QTRX - Earnings call transcript Q2 2022

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Operator

Hello, thank you for standing by. And Welcome to the Quanterix Corporation Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mike Doyle, the CFO. ahead. go Please

Mike Doyle

Good today. much. Toloue, and for thanks and Thanks, me afternoon, on us Quanterix. of With Executive Masoud today's joining Chief very Officer everyone, call President is

call to begin, we about things. and Investor on I forward-looking call. be like the Resources our will forward-looking We Before disclosed assumptions call are remind section will recorded not be contain of and would a beliefs you few on available date the based of as will available in The website. that the this statements achieve and of may expectations actually plans, statements. on information or management's intentions Today's our

provided encouraged or with future by the uncertainties, analysts achievements comparison the assessing measures. and face performance Forward-looking and in forth has a Company's our that here that over implied other achievements statements Commission. pro-forma GAAP. in results, GAAP comparing company's measures appendix of operating With financial expressed presented I that call materially comparable directly the as or The this for To now allows factors described basis, are recent the to that company our are the statements. will financial performance and manner believes financial analysis financial presented that, cause a most in to most we from different performance the operating in statements risks Securities the known with of and filings involve on be Masoud. unknown or pro-forma any results results the financial and and turn investors risks, company's important pro-forma the considered supplement be assumptions reconciliation measures these may to accordance period-to-period Exchange presentation. forward-looking results, of and should to Management meaningful presented set Management pro-forma actual to current its trends uncertainties the information are a to in other financial for review with these The useful certain such the information period are conjunction Investors and and measures evaluate substitute in not business. in uses performance. with GAAP measures

Masoud Toloue

health. to is there last revolutionize a in diagnostics disease. researchers empower pathologies of decisions and state And new where discoveries is key treat will the our diagnosis early measurable we protein one indications We're continuum approach if ultra-sensitive Never develop arm a parameters and this plasma understood with data unique of new normal treat poorly of this and discover week in advance parameters proteomics lab this insights Thank launched phase technologies the the in assess more afternoon at processes moment life have industry. good its biometrics brain for understanding accelerating detected Quanterix an with Mike. we clinicians companies menu direction, growing multiplex a uniquely blood-based as step laboratory test propels provide and associated genomics, with more to protein of imaging, markers both the symptom-free early and that we you, in pTau-XXX Quanterix there important expression. in is and about transitional of screening, clinical therapeutics and everyone. tools broader and more an and been This to participants and those or health. sits where changes assessment space is science first move to and into before even research. way make patients. Using human better disease and detection could Alzheimer industry translational of is importantly, multi-marker help being that treatment disease. industry An in are indication new them predictive Perhaps early and diseases

is Quanterix ability have up itself with not and to for into scale in manufacture growth near processes and that kept operations with and our has technology. the attrition will the quality Costs have juncture in pivotal our challengers long-term. impaired growth a term Now, manifested current Simoa rates. where are This not assays at customer demand to

with Following ensuring a realize and fully Simoa operational our we was the excellence. strategic and of our announced company's of plan as review and technology's top potential while to operations, down assessment the built comprehensive imperative scaled rigor

We progress complete high this have scale. we objective with set and program 'XX. program motion of assays making and in the our assay quality year an initial in this First, manufacture redevelopment deliver improving anticipate at to to ability expect

principles: Second, unlock refocused go-forward we have three markets. to value Positioning capital and Quality, along and Quanterix our resources the of Innovation, and translational aligned

have in strong a operations. to in revenue QX actions as in resources results. we reported total We impacted force the employees path redevelopment to to a put quality accelerate related across us revenues of achieve On decline assay several year-over-year. addressed on Revenues assay consumer will were to on XXX due put represents to flow. in affecting We to to initiated innovative the capital, reducing return and projects These million X% challenges. our growth research. a reduction approximately and actions a cash reallocate a will $XX.X adjustments position decisive These not result initiative us reduction which eliminating company's spend worldwide and an positive and

X, Slide declined year-over-year on revenue by consumable shown XX%. As

was QX gross critical so have we required prior On gross of versus XX.X%. business margin realign on focus initiated to discussed, improvements to I As margin QX pro-forma challenges. our can remediate pro-forma these XX.X% we steps year a basis,

activities increases margin in of costs our the as their shipping cost headcounts a initiatives as goods reallocation provides on well have relating overall details adjustments visibility resources gross of sold. process to Our margin for change on reflects our pro-forma total of in into growth the expenses expenses. Mike ongoing goods, mainly cost corresponding a provide a the of operating quality. QX presentation to reduction with the company's believe improvement progress We cost and will of of no moment. to additional quality-related quality These

for 'XX revenue Forward-looking, business expect double-digit total to a faster of far categories On are the once the and we employees growth restructuring affect unlocked. a of are to impact Difficult company and operations plan are growth would the changes our return new company. of across now to our and them 'XX. total longer-term will contribution employees to our to like worldwide. we XX% our compared in basis, We structure but in flat on our realized benefit these necessary to improve year to at departing revenue accelerate XXXX changes expect cost be approximately reaching to realignment their year when regret fully and pace thank

focused we're committed market, growth on our goals. executing to here, and Moving achieve operational, forward from and

Hrusovsky and We biomarker also Kevin are advancing mission our transforming as Today, Executive announced of stepped dedicated Directors. to leaving our our that research Board discovery. neurodegenerative is Chairman Company's of we down of disease, has diagnostics and

thank we With efforts become the As also of a Board to all our the of our embark leader next move Board. field. like Kevin's his Independent to new journey. him non-Executive the a look our is and I phase our to is as forward, as Chairman natural we phase deeply next on board Martin in we this evolution, structure. appointed helping of company's with has serve forward for would the role in Martin in Quanterix industry his evolution with company familiar the Kevin in Madaus working and departure, point our of and

details. more to turn to it over financial some Now, Mike Mike? discuss I'll

Mike Doyle

your Thanks, reference Masoud. I'm financial the here about quarter to call those provide And for on following second our Slide would be performance. some additional for X. details XXXX

As a XXXX decrease the Masoud revenue. of quarter of quarter second second our was the $XX.X noted, in total million, versus revenue X% XXXX

revenue at product Within have the declining versus shortfall was quarter revenue $XX.X in million XX% second decrease a of quarter and revenue, of of product the biggest driver quarter XX% XXXX. We XXXX. the the second the of second versus consumables

Instruments we Masoud of we quality-related addressing. the quarter that X% second As versus XXXX. had decline discussed, are issues

new value not which million this shipped instruments customer record nature While second the of did start-up we revenue to we're we during business. for $X.X to quarter, the of a the XX due

this revenue will when cash the received. recording We be is

versus revenue recognized XXXX XXXX within from during during services XX% spend our about our million is Second now of quarter Lilly the the talking with time business. margin collaboration QX $X.X second release. quarter to $X.X quarter the million, like gross second revenue year included service to announced for prior XXXX I'd increased Eli some

few capture operations. a cost based a business, made quarter our we costs quarter. three P&L how review your changed quality the focused second this activity changes we the on During based and departments allocation in of deep-dive of We've the and on in

adjustment recorded to these monitor progress. give to to and quality not built We've we addition, of expenses freight In sold. cost and as visibility better pro-forma to as changes and operating are investors allow a goods activity made customer greater to our our capturing cost

First let second change through of year. me the to the of you impact of the walk first quarter from year this quarter this that

allocation margin our our both quarter obsolete percentage pro-forma, on from be which from in XX and to gross and presentation. Slides margin margin decreases reference partially offset Slide rich QX, to that decline to pro-forma expense the the and If expenses the difference Of XX operating points pro-forma The your the at consumable on the X. mentioned Slide captured and you volume and can due GAAP primarily prior have reflects previously, the the expenses of GAAP look change second revenue [Volatility] quarter X, versus quarter our the relates in margin to corresponding remaining improvement to pro-forma GAAP you of gross our gross and will and we first performance charge. allocation for from change shortfall at in adjustments. excess operating for performance X. by freight freight see year quarter QX our points XX change X look the decline first When mix second you had

pro-forma few XXXX in gross Our second compared the factors are XX.X% There this XXXX. change. margin of second drove quarter that to quarter was XX.X%

margin from a First, year decline versus product: prior revenue with my shortfall Consumables. biggest coming highest

percentage mix and margin made XXXX. change X quarter points to approximately impacted versus XX the second we of The margin the QX volume percentage contributed in allocation in decline. Our points

expense in totaled Massachusetts. XXXX, Bedford, $X.X quarter were of the of stock XXXX. expenses increase the million new compensation in Our to Major second million quarter expense lease pro-forma related $XX.X drivers expense, increases, expenses facilities second an operating versus increased and headcount operating the in of

all We to including sub-leasing lease, are of on drag our options or in order expenses. terminating space operating this considering the some our reduce

quarter visibility the cash from Bedford outflow approximately XXXX, during our of earnings we outstanding well-positioned cash financial Bedford, in have announced expense will quarter with partially $XX restructuring higher results continue our With towards quality guidance our per difficult reduce million to operating we you the per XXXX, share With Massachusetts. changes strategic Masoud. headcount was in pursue leased $XXX.X progress XXXX. see reduction second was improvement investors The sheet The will it by allows and forward. going and that, the to in by an During offset we how operations and our with on are we driven million back increases revenue balance to June objectives. million forward at and in our totaled going from to our and by of average balance CapEx decreased share the landlord-owned million second the to facilities allow resources decision rebates and quarter offset shares for $XX remains impact of basis in I'll excellent shape million expense primarily invest cash our improved XX, New today Cash turn driven by the made to scalability. by and unrestricted and weighted us adequate $X balance of show greater our $XX excluding approximately will basic tenant debt, strategically provide [Workshops] and no annualized in facility. $XX.X have made

Masoud Toloue

Mike. Thank you,

few questions, important points. to the go I want into summarize we Before

stronger. biomarker research growth detection for opportunity First, early drug never trials, market tools been in demand in expect enrollment From and neuro clinical has the grant the ultrasensitive agency spend, degenerative we this the and category. late-stage for continued

technology clinical to quality from Simoa enable identification Similar advancing Second, and non-invasive we capturing of publications and goals. element critical drug post-market cost along likely priority to transformation, can around accomplish and a accelerating to aligned in have through shown both approvals robust translational of our leading structure patients the It's that position profitably our over innovating blood-based and studies. more single a research of larger XXXX advancing this and the testing it. and This effective sized line discovery proteomics a to to our is enrollment a mistaking address. operational benefit is our preparation new from be and of approval. improve much growing disease conclusion disease in can do discoveries, have of that will modifying pace with in the for trial a accelerating There we nerve our diagnostics. therapy, manufacturability have will plan degenerative increasing and than them challenges, research assays some plan and company open share and faster the At both and profitability market Operator? improve understand the have now scale of no comprehensive resources at before greatest questions. cost our we We success propel we've

Operator

Leerink. SVB you. Instructions] from first comes with Souda Our Thank [Operator question Puneet

proceed. may You

Puneet Souda

for Yes. question. Hi Masoud, thanks

a to about of why this challenges you is to not side is understand of the identified it earlier. So, or exactly first detected us is can in just us side Help ongoing the talk and understand consumables? of help sort of side versus mean how through walk quality us what business. bit just of impact to sort little that, quality sort And also, what the really of is clinical academic much the one the to the I what happened was business the trial

Masoud Toloue

Thanks All the for question. Puneet. right,

consumer provided. see quality can the that on clearly So, charts of as from the side, you some we

rework stability distribution We for cost scrap for our some and our costs. includes of the manufacturing and our involves process, that comp that have a quality that high product assays cost

And level products future. want rework on continue to then be so, with something is going that to sustainable to that required our center quality we of or the

assays have sustainable we're to why our that's sure So, make launching we redevelopment growth. for this program

On and in related efforts lot work piloting question redevelopment the we've some clinical Lab. the a Accelerator of to our of customers, our done

Lab the includes work of Accelerator lot done quality. around a that's And so, in our initiatives

customers doing And that and from the so, that. that lot perspective work from a benefit we're our Accelerator of clinical and

And are said, being to so, guidance quality significant and That of and it's to that's challenges going reduced we've mitigate able for why the our have. the we around year. work a we be effort many

Puneet Souda

of flat off. I of being sort what you And this guidance then, the on you're you part, I guide. the Okay. the XX% as said mean, laid gives year-over-year confidence mean, are in employees

workforce, this disruption what a I confidence just given wanted gives morale to mean such. and understand So, you causes I that obviously within the

year? that there just and us you be walk could the what flat So, impact gives on on through further confidence number for the

Mike Doyle

Yes.

So first-of-all at ability in that’s guidance. that believe low The concept would Simoa good detection I And question. the for these -- our ultrasensitive proteins need decrease unmatched. to our and no is demand. We customers the products there's say of levels. demand measure

so around two, some talked have high that’s growth this assays we're about the tenants that really in step Two, to growth So, with program. We in innovation. and and positive. in around force a the as we a strong had on two consistent focused on One, redevelopment we to the back on focus call. developing obviously the take reduction quality And this that the products future. our in I of

And so, a reduced and and We'd a focus at perspective. perspective, that from from a think put And helps that our focusing we focusing we baskets. effort cost this haven’t on resource new in all perspective those all.

Puneet Souda

Does commitments as Lilly me. had with prior government pharma that this other from with impact Eli And including you one other with every and just Abbott companies private well. or BARDA call prior last and agreement agencies agreements have your you

at understand So, those one point? which this to to impacted just wanted are

Masoud Toloue

We we or mentioned have any announced. anticipate impacts we've to don’t any those the don’t expect them are We that have don’t of that impact you collaboration all. any None at to impacted. that

Puneet Souda

Okay, alright. Thank you.

Masoud Toloue

Thanks, Puneet.

Operator

Instructions]. [Operator you. Thank

next Max Our question comes Cowen. from Masucci with

You may proceed.

Max Masucci

area whether strategic and taking other We've start, review, ecosystem out triggered been actions, will the items more for strategic explain Quanterix were blunted sounds But findings list longtime business, in one focus. the the quant key like just this on this of review be thanks it's what questions. or scale company's of I This can a to a Hey, you positioning, it but else? the anything of competitive of was supporter with bit the questions. mission. proteomics from manufacturing the guess short that

Masoud Toloue

think our in few going better one. for in growth. of for where trials, the several into research and that's distribution we that couple business And the becoming look at we coming Do next is that -- be around Hi the board, our as the a on two, our our product done forward. what we market Max, to of being look it think take a lot going significant a coming strategic from cost then review want a of we think see for shape an I not sustainable as anyone is customer me number is pre get charts can strong is cost. future time a down did and going strategic to thanks and natural incredible to and several model rework it to Number we years. capital. in clear get business to with is this And question. top it's think we That’s diagnostics the our And look and to and scrap then to work some be first Yes. demand allocate of therapeutics a all, and up of review was there's going I how a new meeting are profitable that and when operating time you is resources that's something the what take to we our a that and there do

of our review, are the operations. the back, why some the provide So, it's focus hopefully why that on look color and on why sort

Max Masucci

I sound would casual way like a even that's compared growth markets. you be since leverage a with it. And Okay, end assume and necessarily research guess for peers, biopharma the nicely still that doesn’t consumable And tools but company through mature installed volume the with in as relatively probably one to to got long breakeven years. that case review. specialty for able to would base very ran break after for strategic it

and nearly strategic any technology Quanterix biopharma lineup ago approved and transformation so under into the in years far market research XX out diagnostics. So, major just entry

implying that success by the to a approach. due part wasn’t women are generated Now similar

So, they how diagnostics go-forward. just you're prioritizing strategy forward relatively And go whether I'm as more-or-less focus. so unclear

Masoud Toloue

Yes.

So, first about new biomarker of are is a we that's or think biomarker the translational translation around and pharma, the in of discovery a way clinic of revenue this that a market today or trial. all and CROs. during is that's -- the what our And academia, research clinical our into

So, of we can ensure that sustain basis. majority that's want go-forward revenues our the and on base to a we that

a announced this in We being the or lot LDT that for you in the a that here our our or these utility Now down of until a able therapy moving to laboratory. purpose. is first want don’t pTau-XXX, diagnostic see there markers for up in them lot test we as space diagnostic anticipate and be a in the to volume translational in look our view said, a pharma, setting we are And offer in of But could demand is market. setting.

we think space. Quanterix small focus important place the there to We our on to but future diagnostic a very that translational in want be it's plays steps steps some make begin to efforts well. now the this So, bigger will in

Mike Doyle

just cash forecast that did. of am place product and to Masoud it getting results to can to the go did And drag flow. these of going flow deep-dive, the we quality we One he need put we it's get versus internal cash but to I likes additional getting associated have believe When be "x" that on ongoing bright it and flow cost things highlighted And think additional a expenses with mentioned this and in we market, comment, breakeven. one a where I is work we breakeven. to resources the us and talks and actually getting actually cash I we the the is

this see in next that Masoud we was So, things believe and step a necessary addition other mentioned.

Max Masucci

these but cash sheet. have Okay, got the you north I access and improve do generally is things balance sheet comment about of balance in sort? the a How of size million a and of there technologies there it. should $XXX that you're we around to can it. in just capabilities Final just made think a how been multiplex lay in to going Gain it, one, has that your -- think reduction prioritizing speaking M&A that with strong be desired organization,

Mike Doyle

we Yes so, make our clear to really one scalability. today focus is want have we that sure --

as higher have resources. interesting efforts we're that continue around initiatives. continue to that very get focus. two, to the and focusing, The is can we our in company really think bit a future as where of some that's our that's going area the more we demand need those that that talk for we one to hope be we opportunity to progress multiplex innovating That's and projects where that market that some Number these I it important. see scale second products on you is about our sensitivity, we little the have in to number the another, Simoa customers about a and our and we talked

attention to was that a we those wouldn’t We want to. priorities two initiatives be and about look cash but is focus able If anything hey have the some was one to something want like to we focusing, to inorganically, that at talked of the of pay take distracting. on where those we it look balance two there at anything or helped take we this

Max Masucci

transparent. it's color, Yes. Thanks for the

Mike Doyle

Max. Thanks,

Operator

Instructions]. Thank you. [Operator

Matt question Sachs. with Goldman comes next Our Sykes from

You proceed. may

Unidentified Analyst

for you growth trending has is instrument and Can expect on any you this forward? on guys provide color going do Dave what been additional Matt. Hey how

Masoud Toloue

QX to it. the consistent Hey, build QX Instrument has year. in the to when look at placement growth Dave. think similar Instrument you growth, activity for didn’t similar I with prior been and I we mentioned,

you good. last activity standpoint So, actually bit quarter a the remember up. little a was from software HDx up if this was instrument SRx more and was quarter an placement

an I from standpoint, instrument are placement consistently. So, performing think we

there So, at point. see I challenges this don’t

Unidentified Analyst

Good, thanks.

Operator

Thank you. Kyle comes next Canaccord. Our [Operator Instructions] with question Mikson from

may proceed. You

Unidentified Analyst

you. Mikson. Thank [Indiscernible] Alex is Hi, This Kyle on everyone. for

on question just competition. So

NFL assay, BDD the our CRM of March Siemens, verification achieved XXXX. LabCorb's NFL There's facilitate blood-based which and size test in [Indiscernible] the So of detection July. also

a So I was do a differentiation these of or tests of kind that value that's you highlight some cell of And some competitors. it like the feel not versus like of sensitivity, of is mostly paint not picture? proposition? proposition Or your a value paint [Indiscernible] Thank these sensitivity, And you of that a is your cell competitors? do some tests feel versus like mostly like it that's you. picture?

Masoud Toloue

your But up. your your part. start We the and you was question. could maybe line second test, catch the NFL the question part Siemens, about Alex, Hey, I repeat of of part then didn't heard the first Siemens can the breaking on first

important important. when things in two RNFL, are our to So are mind. we we, keep two look things test, And at

number or largest neurofilament of publications the platform. around any have company we that versus First, provider other of light,

that NFL So BMI. publication NFL in create baseline record based We this, large around study talked incredibly strong. quarter, levels, on about a and last baselining, weight, order and normative to big, is

users of that of information both people XXXXs a to NFL so that users. other incredibly incredible the and useful a across make provide was points data lot Samoa and And of study of

the if technology, looking ultra the -- sensitivity, Samoa combination great So antibody, it's also And going it's then that the results. but it's to you're finally, comment I just at point. and make that's a to best of sensitivity you give important it's a that allow very want a

Siemens antibody. and our of both. Siemens using So their partner, support a We it's initiative. a talked combination being in then about We

our I didn't you catch question. to all around. the first want and use Samoa And so we that? your product of the Could promote of part NFL repeat

Unidentified Analyst

end. for miscommunication the Apologies on my

the So answer. test was question NFL, a in that's mid really My LabCorp and blood based how just it great specifically, actually in first to launched they July? question. And was a

Masoud Toloue

Yes.

that So LabCorp. we saw from

a and see of it costly more in to ways -- most probably NFL. out a disease. brain applaud is in difficult big great plus, as to the for to be we're market. we going it interest And we Brain excellent there's are that's or more the hope an going there's And I And companies think indicator appetite marker I one and doing Health an more was very more, pathology was think a what testing there that. that's to health. a that that diagnose that testament with

Unidentified Analyst

you Excellent. providing for hop and off. additional one some on I between apologies then more will the on Thank today. that. to volume calls for Thank you kind color hop And question on in came me of that. call And

kind of of So just one to for highlight goals your XXXX.

So you pTau-XXX order. to for were able see all short very and test sides, BDD for

provide Thanks. trials Another color [Indiscernible] one pTau-XXX of as your clinical on as you for any objectives for AD was is more and to pTau-XXX, could a achieve any data? validation well other biomarkers. I just if curious

Masoud Toloue

line I of the the but I think question. got up again, was breaking Your basis

applications They're as we received update of ago was to developed tests our with at those single pTau-XXX launched We pTau-XXX provide update. and and when designation breakthrough just So NFL change, the big I designation both aid laboratory our breakthrough an last for continue. this IBD year agency. the And year, the the first think an diagnostic. weeks a couple AAIC, or in site

a generator. so, think revenue expect But platform, being one say is standpoint sensitive And happy then us Accelerator interested provides an it And in paves big is it We important think to we market it. great way this important, and from first it's way I the our most with think a step in sandbox a we don't great diagnostic with we are LDT the for us Laboratory. in that and is term in test. Two, first it the a for that the near available because work very three, be very to very as achieved pharma future. one, more CROs milestone to to progress the work that a paving for

Unidentified Analyst

Thanks very much.

Masoud Toloue

Alex. you, Thank

Operator

for showing like back would further any Mr. I the Thank turn I'm call this you. Toloue to further any questions. over time. And now At not remarks. to

Masoud Toloue

you So We thank look quarter our next to participating call. for forward today. you on

Operator

concludes for This conference. you. Thank Thank you participating. today's

now disconnect. You may

Quanterix (QTRX) 9 Aug 222022 Q2 Earnings call transcript