Earnings call transcript Q4 2022

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Operator

Good day, and thank you for standing by. Welcome to the Quanterix Corporation Q4 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please

hand over CFO. to would go now speaker, conference to like Doyle, I your the Mr. ahead. Please Mike

Mike Doyle

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

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

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

call over that, With to the I turn will Masoud.

Masoud Toloue

you, everyone. good Mike, morning, and Thank

I'll So, three topics. on call, today's cover

our and update then First, an on QX transformation, And made our ‘XX on finally, highlights progress results. that on then we've path. our corporate translation

August of in the role continue - last business detection. in say in, biomarker comprehensive So, Simoa realize to potential and showing we're on a announced our fully our realignment platforms. and And of year, quarters ultrasensitive I'm plan Two continue to pleased leadership we restructuring to we track.

variability, production program assays to our improved of improve moving redev high and transition year. in manufacture to of has is The evaluation ability to assay streamline first starting designed Our our and target been this manufacturability and at begin deliver scale, forward. half phase completed the will components for on assays reduction into initial and quality

margin can redev to margin and improvements. improvements our due the wave our on gross and to made sequential improvements our is program. to or transformation directly feathering progress noted assay linked expected call, QX by we’ll be measured into our on be since activities, best production, last be believe we is transformation We've As gross next improved

was approximate our On events. resulted changes of gross QX this margin one-time driven non-GAAP non-GAAP was And progress a restructuring quarter to recently a versus QX, was and margin basis, basis QX assay progress in XX.X%. mainly which in improvement point process few manufacturing to manufacturing Third more to was due due And by gross efforts. planning efficiencies. XX.X% improvements, XXX

to on total revenue. in million delivered we quarter, Moving $XX.X fourth

to grant. our and at in of million $XXX.X with prior of $X.X In we compared non-reoccurring were quarter, growth In due transformation QX instrument plan, closed collaboration year-over-year placements our during NIH Changing China. placements last to consumable while revenue $XXX.X around included revenue shared in nearly continue declined UltraDx ‘XX As redev in versus quarter, manage same we revenue, QX flat. as focus under increased with to were demand instrument million XX. while the which timing revenue was ‘XX of year-over-year, XX% million, of by QX the program. to QX QX, with Lower revenue compared Radx expected, to instrument conjunction consumable our

our Finally, our improved using year. to assay of relating core prime operating the significantly program, our in development half second and progress product losses We in begun operations those to made the redev solid learnings engine. have we

and in early LDT in individuals trial January, our of of assessing or is Simoa has damage. turning become most for neurodegeneration validity following its design. with can NfL the the test, therapeutic release announced evaluation LDT used damage, translation Now, nervous possible aid XXX conditions to light, demonstrating menu adopted the an of of our other causes neuro we papers QX, as our path. the launch neuro central in filament of expansion which p-Tau clinical with be widely widely for in published research hundreds neuronal system NfL and

accelerated Alzheimer's endpoint to Quanterix that via - p-Tau weeks proteomics biomarkers the for this is on Now, to research, was Leqembi discoveries space. plasmas. capabilities detection into exciting XXX significant was biomarkers its is identified solution Simoa p-Tau highly measure label. the approval our study accurately biomarker two the those plasma directly baseline, approval Alzheimer's a as XXX in XX mean reduced is disease into human very to XX% leveraging weeks, every health. in and example. ultrasensitive decrease. concluded from X proteins pathway, Leqembi key to The great a turning improve a unlock Eisai’s January milestone Leqembi strategy measurable translate Overall, FDA and the a core from

details. over I'll turn Mike the more to discuss Now, call some to financial

Mike Doyle

quarter some performance. financial about details and provide our XXXX fourth additional Thanks, Masoud. year going I'm full to

get of our gross QX QX in assays. and sequential good redeveloping both into want we our products comment August, August. I progress, the the and be have sequential of been in we're since demand XXXX. seen indicated our announced a We margin improvement target in business in while QX. improvement make Before We achieved I realignment indicated revenue in managing and indicator to about to of in quality we've an our performance we our QX We the overall deliver order details, will

burn second the of cash half we end and the end improved year. with a Finally, has the XXXX, in healthy of our cash balance at

Now, I’ll details of review financials. our the

on following starting I'm X. For the your call, on reference those Slide for

product a decline of Our of of or of fourth the revenue, of $X.X the million the biggest quarter had total the Within XXXX. the revenue XX% versus quarter versus We fourth decrease, $XX.X fourth the $XX.X in or was quarter driver fourth in XXXX. million XXXX quarter consumables million, declining was XX% XXXX. versus revenue XX% of product $X.X million million, of quarter a the fourth decline or revenue $X.X

the mix $X.X while consumables revenue we the quarter manage versus mentioned, instruments. recognized year, fourth XXXX decreased the the guidance Full million fourth announced quarter due performance and and during Eli Masoud address or of prior quarter for we continue year the demand quality. services $X.X of Overall, of assay timing XX% or line in of we to As XX% production million collaboration quarter and to We business Instrument no of with revenue same the revenue fourth August the revenue quarter as the Radx in increased were year as with and had Included approximately grant at XXXX of $X the prior the provided Lilly. million. placements grant when versus year Fourth XXXX XXXX. compared of $X.X during million services our XXXX reflects our was revenue realignment in the within agreement instrument to million expectations QX our from of XXX. XXXX. the quarter to in revenue is $X.X fourth for we

talking gross for time about business. some spend margin to like the I'd Now

we a the As in performed quarter dive second reminder, review of of a business XXXX. deep the

review, activity on that based of we the changed departments allocation focused three result quality operations. of a and their on As cost

cost are and no of we expense expense quarter recorded as goods show non-GAAP addition, the of line. impact full lowering the the freight non-GAAP the and with to year. comparison both corresponding goods to prior as year operating adjustment appropriate XXXX of in Both cost sold, with capturing sold. the the in with increase distribution and for bottom XX the adjustments to In a costs X impact a Slides result changes operating

quarter. each activity investors our give have greater We to allow better these and to visibility quality monitor progress made to our changes into

the to expect reconciliation We in non-GAAP continue to providing XXXX. GAAP

year. and our the GAAP quarter review performance margin million, prior will profit gross XX.X% million gross fourth of in our I In XXXX, QX in Now, and versus compared $XX.X profit XXXX. of as the was quarter to XX.X%, $XX.X was gross

basis XXX was XXX and approximately quarter margin a profit include decrease with the of $XX.X million fourth partially and negatively XXXX, in associated reduction of of gross to compared Radx of result non-GAAP the margin by second Our in XXX due allocation XX.X% change non-GAAP gross approximately quarter costs XX.X% in $XX.X are was the XXXX. as points, points The remaining the in to million, year-over-year of resources decrease and operations The which the of drivers quality impacted our reduced offset basis grant non-recurring approximately XXXX. basis points restructure. by

pointed to earlier, full good we on as improvement quarter-over-quarter our of the embarked company our However, monitor said the plan out to our a realize be would and when profit gross Masoud progress. metric Simoa we potential realign platform,

of QX. since basis gross We QX points non-GAAP each in approximately in XXX sequential XXXX, have improvement second the versus quarter quarter and profit improved seen

operating by quarter the Our performance of $X.X expense fourth million. improved

expenses be P&L. quarter to quarter reduced expenses an of and estate XXXX, by of versus headcount driven item the charges. hit declines and and had million, $X.X of related charge are from in R&D which we a the restructuring related of fourth Both incurred utilizing, SG&A Massachusetts This restructuring. facilities, is XXXX. softening we fourth Bedford, lease significant charge for impairment million to the real result charge to commercial as declined adjustment not million fourth a $X.X R&D approximately However, $X.X additional primarily declined a market. will expenses our SG&A the reflect the an quarter non-cash of We the

the slide balance third from the by better decreased million leaving XXXX, than cash us at XX, inventory. of and driven on XXXX, cash with cash was balance quarter no receivable, fourth XXXX, December $X expected was on was $X the detailed our during which the of of end As X, by reduced quarter debt. post and improved accounts share million expenses unrestricted aged operating over and in Ending reduced collections restructure, per $XXX.X

Our million EPS to Basic QX is are excellent well positioned outstanding in shape, adequate totaled balance with weighted and for strategic of average $XX XXXX. objectives. we sheet our for resources pursue shares

guidance our review now for XXXX, will on which I Slide is X.

product at second half the between year-over-year range in year expect of XXXX. $XXX the ‘XX, high representing services in midpoint slight of half with full $XXX and year We single-digit a growth of growth decline revenue million and guidance, first million the the modest to to the in

of XXXX our million one-time Collaboration $XXX.X core a and included million Master Lilly Lilly a XXXX a agreement, for we've not products Lilly million current guidance. revenue included the quarterly services. The million and $XX.X has included triggered license project our will for a of payment for $X has $X and $XX that agreement for the Master in million $X XXXX, technology Our The quarter repeat, million which and agreement collaboration and renewal first in feature, project. Collaboration second collaboration

services and to in digits single high revenue product core our expect XXXX. grow We

in margin We and GAAP gross expect gross in to the XXXX end with non-GAAP XXs. low margin the mid-XXs,

our We be expect in $XXX $XXX approximately plan, cash around at revenues. flow with million see cash improvement positive XXXX, to for in burn million transformation to and XX% current

that, turn it to back With Masoud. I'll

Masoud Toloue

Mike. Thanks

the for the MS Alzheimer's leads that how into I protein for are closing, and two in development Biomarkers in highlight its our of an colleagues and signatures disease, role. the as by Simoa a that NfL biomarker or recent that would diagnostic some sensitively groundbreaking Kuhle strongly and established Jens near like technology drugs Researchers and and disease new disease-monitoring a at University and becoming and Neurofilament on work to MS showing stage. play So, activity with of sNfL, Light, long-term correlates at noteworthy of publications biomarkers. converting to Basel predict call will critical symptoms, can extended collaborators that Serum attention early initial

monitor be used independent showed those in provide prognostically patients technology used can of be second biomarker, GFAP, activity, using activity. MS. Simoa support particularly experiencing therapy Now, in authors that an in to to extension work, The that researchers that can of relapse disease a GFAP evidence decisions progression

can NfL GFAP help which individually indicates make forward-looking. in progression damage specifically Both and can MS, disease used to complement and each as neuronal So, in in specifically are MS specifically tailored measure biomarkers be other more therapy astrocytes involved. blood chronic

and Now, Alzheimer's second study with XX that of cohort were to dementia, GFAP want mixed Simoa study followed I was association years is blood-based were vascular The showed participants attention prospective over the publication a incidents before disease, XXX your that associated about diagnosis. dementia, community-based XX The strong total dementia point XX biomarkers evidence nine and incidents assessed. to of among the years. to

AD in strongly associated also Now, the NfL Simoa were and XXX with study. - diagnosis

publications. groundbreaking excellent work So, really

leadership questions, before we into get reiterate want to Now, our position. I

with our IPO, with that years has the testing company, one the protection. strong new the in that's translating the IP proteomic continuum. few the activities momentum. since of in across players have, discovery We the space diagnostic breakthrough in to We're we're very Five strong proteomics tech, only

will growth that discovery in sample full call market to scale, our strong answer by solid We give what of immense with come transformation, decade diagnostics and to scale penetration financials, an ultimately increasing will double-digit our even momentum to and accelerants more happen ‘XX, a don't return opportunity. them overnight. proteomics with us therapeutics. to primed platform, be the to we believe commercial breakthroughs achieve things have These and We neural

questions. take Let's Operator? some

Operator

[Operator Instructions]. Sykes first And of Sachs. comes question Matt from Goldman our

is line open. Your

Matt Sykes

and Masoud, Thanks morning, good taking questions. Mike. Hi. for my

from start So, work out, bit as to to work feedback you customer in you've revenue putting revenue able you just that over about you're putting as that the on assay you're redevelopment. of maybe on place? how you and been you talk the impact as and you're a that those talk management Could term if management doing retain there's that the redevelopment, in management customers the about revenue kind maybe place long any little been

Masoud Toloue

Yes, thanks for that question, Matt.

would we're We while demand. of we're triaging I doing redev have - it, program managing the call this and

managing pretty the would demand of a in. say, been customer I And coming job. we're inquiries we've effective So, doing

Some our services delayed, or some accessible, aren't our going availability projects are of assays are are offering accelerator experiencing easily delays or some our where we're are then doing some and the and all. customers the of at where to waiting some - then of of

managing we've at So, program a been, overall, we're this say redevelopment I doing while would the same time. pretty decent job the in doing

Matt Sykes

And as instrument about XXXX, of margin for give of guide composition growth? just and on growth at about about you margin of just a breakdown, maybe core you services, like two-parter can of Thanks it. sort cadence for Got that of you bit gross talked the Mike, just cadence high year-end maybe where that. a color look then lab, can you products you'd then, throughout for as sort think single-digit to ‘XX. so for talk When more versus on the but of consumables well on little the could of year? sort sort land, sequential that improvement gross secondly, the we revenue And like accelerator

MikeDoyle

of I you see would continued color. think both and the year, probably instruments first would to the Masoud then Sure. some think that sort strong. I say I'll part I our consumables. of my of performance, can a Accelerator give perspective, certainly in be continuation in and services add you'll existing

first instruments and ups spike look wouldn't in the for the quarter of in consumables year. I So, in

improvement. of would think steady call I to be going I And sort what so, it's

And XXs the see I be in we the keeping single to increments. And going And the to first much down in the low on fourth end exceed, for digits year. out, to non-GAAP. look at year-over-year quarter. going a at of I had still and in think comparisons, our end we're be our think on accelerate targets you goal in going again, core year pretty you're year us similarly, the slow improvement from is sort ideally, think but again, here the I mid-XXs year. it's smaller dramatic I And back the improvement margin expect non-GAAP in in of we as obviously our always half we're but products, high progresses. the half, to a bit when steady the will to

Matt Sykes

very Thanks much my Great. for questions. taking

Operator

of One our next Puneet SVB from our Securities. Souda moment come will for next question and question

Your line open. is

Puneet Souda

for and Mike. Thanks Masoud, Hi, questions. Yes.

of year, for clarify the sort total I of then expectations to wanted just should one, cadence have just how that given first couple OpEx think follow-ups. the reductions is? we have sort and for with of So, what And you implemented, the about that here the

MikeDoyle

Yes.

would I real quarters. at it, and the about think to As the two say sort you I estate that OpEx, impairment, when would Puneet, we've take taken - of look I hits on out for impairment

would much says, little to that bulk expect taken I and at the would if pretty in QX, expenses, And that look bump you SG&A, Ideally then expect a of the double-digit them better, gets have some you we've So, I fact there. may the the towards nothing that year, see but slight I to market when changes. growth. the going R&D core merit ramping for a stay increase that's smaller, because the in be some normal hit say we dramatic. of occurs increase half back as up but We'll consistent. start

be for bump costs. R&D. don't up. But dramatic again, see going and could expect It's I You to steady slow in SG&A some increase a selling and

Puneet Souda

Got it.

biomarkers results. the on look be Masoud, tests the label, biomarker the of p-Tau plasma help it to - and at amyloid those initiating then AβXX study obviously be prior is that required And for plasma how you label, to on Now, just should due those we interpreted us the administering and both in label when can pathology beta clarify is bio utilized? with uncertainties also dose, presence analysis. Leqembi And of with mentioned that caution says there those Could least Okay. at the treatment. are the the XX

biomarkers the are plasma clear not required. it's So,

or So, in would clinical maybe well? just biomarkers rather restricted where how do they potentially help Mostly us the sort be they of think here? used plasma trials as be to utilized understand commercial of can you sort

Masoud Toloue

Yes. Puneet. Hey,

biomarkers. a of little So, to and the clarify on label use that the bit Quanterix

GFAP, XXX just why of XXX think First, thing NfL clinical it And in The that's - I this question, so is actively other highlighted that's the next the there's key used. not remarkable. The but is clinical pharma several highlighted study, were many biomarkers hey, mean, also of were I And are pointing in companies of the prescriptive on to you're kind was addition using step? label. most clearly is, kind results trials, The on to nothing trials. yes, label. what's our

more more therapy that becoming of a what's is clear blood going order I for Alzheimer's, However, test. to think and scale sort you're any need in to

the have scan PET XX You million XX people and to just sort to the spinal able who of methods or tap to have a disease of traditional screen be scalable. aren't

believe we test so, the can invasive okay, study, an so the to the more replaces ultimately a addition another to we the to make aid And future memory or invasive a blood decision whether in get be diagnostic, PET you that someone goes can and that able are to a have to we of, in some steps results what study. let's I see think use blood so early in

that to use prescriptive nothing have don't have you on So, you the this to that. use or label

is we study. required it's very the for disease. step memory thing But In fact, is only test a first the that think in important the that

Puneet Souda

readouts number meaningful? maybe think can we where And about releases you Okay, year, of outline, sort be ought the as looking MS out ongoing, of we terms data trials Thank Quanterix helpful. the trials the potential of you. some so that's with could well, in data be to Alzheimer's for then through just what as

Masoud Toloue

absolutely. Yes,

update. bit an little of a just So,

And this trial test. collaborating of know, we're last is As four Center you a on Medical announced University the clinical that collaborating multianalyte diagnostic phases we're we VUMC, for a Amsterdam test. with with ADDF a and quarter, on plasma

believe replace And begin tests. so, can we invasive multianalyte with test, we a to more

are and happy over to the Phase so, QX. in prospective trial, was And looked to retrospective Phase quarter. Xb be patient at that and X,XXX say expected We completed start cohort, our to is going and X this be samples, phase will one those

clinical in Alzheimer's test on Global is with The working collaboration second Platform the Foundation. we're

That And so, closed that data and this quarter, XXXX, November but do XX the to analysis. last - sites, again, patients. mentioned beginning we're we X,XXX Alzheimer in

We on to regulatory a test Alzheimer's analyzed reminder expect as that just year. this FDA support filing a to by fully expected p-Tau that trial of is the XXX QX be data prospective our for this validation And that's global test. the

Puneet Souda

it. Got

guys. Okay. Thanks,

Operator

One moment for our next question.

Canaccord. Mikson Kyle question next Your of comes from

Your line is open.

Kyle Mikson

guys, sequentially Masoud, second to bit the thanks when growth guidance, of taking first jumping declined then lumpy? will guess? forward, the like mean, to if be the of off quarter by completed? revenue into be heading compared revenue it half? program implied Hey, the ‘XX the assay half that, topline in Mike. Yes. rate are for half the mix, and we what's expand that, each in the of going scheduled gross concerned I to growth the here In and a redevelopment margins sequentially the or margins bit I like And Thanks. little do second any a kind could And should questions, the you expect stable or is XXXX Like, continue be quarter what's

MikeDoyle

Yes. low a way probably first and single-digit year, decline midpoint a about I half to about half second of then imply half it, growth. year. single-digit decline in of Kyle, then the guidance, in would the best high the the the the is a it think to way slight best it, At though our the say and would at first of the in think end

what why. But in I'd dramatic, because continue a now, anything and steady leverage there. able a that bit growth mix create looking don't steady - as quarter, move would have that's sort growth. the about And backwards, think but the of the shift increments say in thinking And to that we would begin think right So, I a sequentially. could given said, expect be of about we'd how little revenue I more gross improvements. margin, could we're we'll it to on at any I That ‘XX, articulate get sort accelerates, of be just to question and even would it we're would

I So, to that should into gross ‘XX. will expect The continue. continue margin increase

Kyle Mikson

the just All right. And Mike. Thanks, one financials. more maybe on

You breakeven, million, noted company at that or cash $XXX achieve the should at least positive like revenue cash million range. flow $XXX

maybe would you doing are you flow, So, reasonable like a so, like that? And or during quarterly under like maybe fit XXX ‘XX the guys timing be XXXX, positive in of cash for XXX so? regarding that

MikeDoyle

Yes.

I cash you exiting as at about flow good - be And could how ‘XX, about thinking hitting it. to how bit, XXXX think we're ‘XX, things pretty approximately that. that managing Kyle, could move it, that's would look we're we that's cash a I burn, obviously, about kind thinking like breakeven, of feel but

sustain So, at business cash have existing we to balances, our I the hit look not need to going to breakeven. before market to a go our we're

good So, about feel pretty that.

Kyle Mikson

yes. Right,

cutting here smooth half are redevelopment program. listening assay the almost challenging? more there, halfway Maybe And done heavy is sorry guys you the just for is most through Mike. this remainder of kind Masoud, second of off the sailing, and or the of Is you plan

Masoud Toloue

Yes, Kyle. great question,

I We the six we're the part than - quarters. would be phase, I other. more one necessarily challenging it said that quarter first is beginning wouldn't say actually the say two I think that quarters would in. So,

hey, And to first scale to changes are The identifying going and those and gap is scale. able that thoroughly I we currently the these biggest of gaps are assays. some to sort being kind most the say we what scale, would that making to that are accomplish that implement, production has be pretty of, to quarter and team beneficial going what to to have tackle the begun of and

And we of them important production. it's tackling sort into most phase I completed. phases, then most was And putting that and and interesting changes so, that and making implementing terms them then and think in of blocking the the next and

and here So, are things to progress. on we feel our track confident going according

Kyle Mikson

clearly, one these detecting could final crowded I Not already I companies the ask the on, If tests reimbursements, have or it’s some here. of launched of newer one evolves diagnostics p-Tau kind XXX, competitive have and of XXX these that field landscape in tests Great. as has all neurology interesting. become here or guess but are so more

Just was possibly markets, revenue wondering, Masoud, to I clinical LDTs, the from and guess in like how the guess I if recent then is you and in dynamics this this in space LDT speak including faring XXX year MS the of your kind research could any expected and year ‘XX? or the

Masoud Toloue

study the to aid being that phase, going not to And the probably a are to to a down I that of would a the used clinical more going phases or of is say where in I be be clinical are LDT And in going the sort have to - two I is a break think to phases. is studies. other I are revenue is than significant impact. ‘XX substantial reported back would being where break cases There not a Yes, One, LDT patient. the diagnostic or LDT therapy. would the results I think a is revenue two or clinical lot aid which a to phase test the from

for a I market. to any in materiality, of think would require drug the sort pick that up

us. important is on I neuro looked feel But to decade side your really we does that would great blood I scale field, how go of sample that when going next to then, Clearly, neural I of anyone you proteins, on on phase. LDT you complicated the view really you doing phosphorylated where And at at, a the a several kind look it yes, these competitors, don't answer is a be in that's the versions hey, think validation this. work platform who is out the at result think this and the we've than So, can in question and better folks say, has and this else years. where look others platform a and can coming the

Kyle Mikson

Okay. guys. Appreciate Congrats a that. That was lot great, Masoud. it. on Thanks the for progress,

Operator

questions. I'm conference today's This call. for no further And showing concludes participating. Thank you

You may now disconnect.

Quanterix (QTRX) 3 Mar 232022 Q4 Earnings call transcript