Earnings call transcript Q1 2023

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Operator

Good day, and thank you for standing by. Welcome to the Quanterix Corporation First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is be recorded.

I would now like to hand the conference over to your speaker today, Mike Doyle, Chief Financial Officer. Please go ahead.

Mike Doyle

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

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

that to Forward-looking performance the or uncertainties actual the statements Exchange face statements. involve materially and be achievements risks, with by forward-looking known future and risks recent most factors cause The or expressed may results, unknown results, achievements uncertainties, Commission. filings Securities from other different are our and any our implied described performance in we or and that assumptions

period earnings GAAP forth substitute these with presented with the and here Investors directly allows release review and business. issued to analysis financial performance measures other investors for measures presented The today. current for financial are the a presentation reconciliation in presented set meaningful such of conjunction that be operating should To considered non-GAAP company's to financial performance. period-to-period Management useful company's the to as these information the measures company's comparison GAAP. its and non-GAAP financial most statements provided in in the non-GAAP in believes appendix's financial manner assessing results the on measures. uses basis, financial Management comparing and encouraged non-GAAP a with measures and results earlier in are that the of trends analysts evaluate company in in supplement a accordance the are has in operating the to not GAAP information important comparable certain

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

Masoud Toloue

Thank call, plan, developments results On today's you, use plasma biomarkers. cover our Mike, recent and good in progress afternoon, the comprehensive of on everyone. clinical transformation and I'll

required focus we organization as growth. we execution to XXXX of have stability continue into to a of for we build improve continue plan, validating pleased taken this disciplined stages make the our in and Since year. the to as I'm process scale industrial steps that deliver gaps transitioning for begun transformation and early products these year and order see of have throughout and the will components assay the initiating to to quality future progress a improvements on our customers. plan identified manufacturing, We common operations, say

impacted early, processes efficiencies. yields positively still the operational implemented have several recently While of and

new setting us will operating will significantly assays outcome end Successful the and margins, the and trajectory revenue SKUs by existing will product new assays products efficiently our believe operating in through transitioning our transformation making profitably. of year these customer demand of from we XXXX. be lines benefit changes, scale those improved our right customer to be to and to efficiencies experience our In manufacture this

the usually while the our frames, but been our company time the talented people. of us service team, tight proud Led high confident talented Transformations in in these more I've resolve and propelling running the year. leaders and and never transformation such march and executive their by company of like happen a commercial intensity implementing focused forward. operating, end by it's towards successfully leadership don't that individuals it's are and

revenue Pac XX% delivered instruments, in to to We modestly quarter-over-quarter, of declined. revenues Asia from total 'XX. and being QX up due fourth quarter the first quarter million by consumable reduction in instrument softness decline in revenue, to licensing X% related in and results. Collaboration uncertainty. on increased economic primarily Moving $XX.X while the XX% collaboration

purchases One partially be GAAP which by our over of and our and offset trial margin margin performing increases customers gross was sequential non-GAAP advantages in points over research through clinical this XX.X% CapEx reluctance that work macro basis area represent can 'XX. gross and Accelerator X,XXX is uncertainties program. both was XX.X%, for of QX

out can we efficiency second assay I still in as half term. point manufacturing gross gross and do increase work to the we exit in expect our headwinds assay scrap the carry noisy the we costs is SKUs products final begin into for X 'XX. lines. refine of the margins our other improvements expect 'XX want 'XX margin than to and higher that top implementing as and stages in near often we said, That with This

ended decreased Our $X.X million in quarter, line we with QX cash. cash million expectations, approximately since $XXX last with unrestricted and in

the for Given results, first are the adjusting full upwards modestly quarter our year. guidance we

to XXs. consumables, revenues million targeting million guidance revenues collaboration offsetting continued increase margins basis in of and are a accelerator sales mid-XXs margin $XXX services gross driven The revenue. gross the $XXX range of in non-GAAP is the high in GAAP the potential We percentage on softening instrument and and by

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

Mike Doyle

Masoud. Thanks,

to performance. performance the an out It's with First, our solid start year overall gate. of about the comment a nice

gross our of and was revenue consensus performance quarter expectations both ahead margin. and for First

in As That reflect instrument continue is as macroeconomic our softness demand. continued demand Masoud dealing global bumped creating also our we mentioned, our our in of redeveloping economy, and guidance our guidance work believe reflects QX the said, expectations and our our we broader management XXXX. we've pressures for which the to assays performance with slightly

quarter review our me details let XXXX the performance. Now first of

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

with in of million, Lilly, agreement or our X.X% quarter total not Our XXXX, million quarter the of $X.X licensing revenues we In is XXXX XXXX. from which decline of recurring the revenue first quarter $X.X for of million the a $XX.X in had from first was first XXXX.

had quarter of revenue We of XXXX. million total year-over-year. X.X% this decline the revenue $XX.X first impact the of or license a quarter, million the Excluding in $X.X versus first product a of was flat revenue,

is product the instrument due of or region. first the primarily XX.X% reduced Asia XXXX, $X million versus decrease, Within declining demand the Pac revenue driver to in quarter revenue, of biggest our

consumables slightly first First last quarter down from the revenues year, of or declined quarter million $X.X X.X%.

down we $X.X we and were stated XXXX. to demand quarter As manage for the consumables or $X.X first address have we other the of production million previously, and continue assay X.X% Services as from revenue quality. the million quarter, for

let's Now move to on for the quarter. margin gross

million compared margin and quarter million and XX.X% $XX.X profit for quarter to the the first XXXX. and in gross $XX.X GAAP XX.X% first of was of Our XXXX

quarter last profit quarter million margin gross year. by a gross as non-GAAP was was improvement both in to and in GAAP in The of Our driven $XX.X things. XX.X% margin and a and basis few $XX.X the XX.X% compared on the first non-GAAP first million

due first XXX of in points basis benefit in to margin. to our a deal lower did This have and basis year-over-year materials over gross physical January year, changes the quarter benefit This last last made management resulted on of approximately was points number XXXX. a adjustments which benefit onetime scrapping of our in $X timing the which had inventory, the cleanup on weeks onetime inventory than practices, in alone year. We XXX good in of typical to a was our positive inventory of We XXX inventory a QX productivity million approximately X first of margin.

margin for our We and XXXX. gross had in aided executed organization in by points. This a that the of benefited nonrecurring. positions due quarter open manufacturing the to headcount year-over-year performance our a Overall, strong basis by items are margin August lower few overall we gross restructuring XXX

XXXX. Our reflects updated full go-forward view our year gross margin guidance on for

restructuring the quarter in from of the XXXX. XXXX August declined overall of last million was action we in year. quarter took reduced The $XX.X costs $X.X primary Our first to million first operating to in due driver of expenses million $XX.X the

Our declined XXXX increase the expenses XXXX first reduced $X.X of in million from $XX.X negative a and negative improved gross interest million a to quarter quarter to net operating the due million in $X.X in of income. loss first a margin,

I million cash balance review our million. Slide first We which $XXX.X cash, million the X. in is will from cash, with a $XXX.X of year-end $X.X quarter of now on ended decline

the year as often commission we is our largest year-end our burn bonus of period annual cash quarter and make first payouts. The

Our environment. economic balance a sheet remains in excellent in shape, and difficult we well remain positioned

guidance, to which Slide is turn highlighted X. Let's on

As modestly mentioned are increasing earlier, we our for guidance XXXX.

to demand and in expect And still the our as be $XXX range redevelopment. We our we as our to managing revenues assay reminder, continue $XXX a million. shipments million we're of

year in to margin gross gross XXs in the we high For full percent the and expect the GAAP non-GAAP mid-XXs. XXXX, margin be

greater of as of complete assay scrap excess XXXX on line As headwinds runs assays in do our Masoud positions open the mentioned, outpace fill incur we margin expect and as we initial costs increase materials redevelopment. some as and second staffing, half we and production the new we

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

Masoud Toloue

you, light neurofilament secondary like granting accelerated as Thank mention a In based approval on recent the FDA closing, SODX I decision to of drug Mike. ALS the Tofersen endpoint. would

lack many indicators therapeutics the space. in primary has quantitative with this As a neurodegenerative of disease hampered development diseases, new of of

not is with therapy. necessarily to was Tofersen researchers you efficacy. do approval the saw in NfL, clinical is of biomarker has leading of a intended, It's working the SODX efficacy, blood changes relationship but a example, For believe predictor as indicate which what clinical accelerated

will tool future an This biotech therapies. Parkinson's, the as long-term date, NfL the we in Huntington's, be and investment term. pharma grow research, tailwind this neuro XXX have over long into for development To important and of already drug incorporated in neuro tracking Alzheimer's, MS, new approach expect and NfL to approval trials clinical for reimbursement of to a companies

a XX%. you not to happy know, over have tested over a with in been clinical as trials that Today, therapeutic Alzheimer's of great failure a rate has of the various yard million world hope are or of story. history over failed this the next recent compounds XX development XXX There's Second, and doesn't number XX triple dementia. Lilly by Alzheimer's people within the that years, expected happen. disease a And announcements Eisai suffer The was real therapy. that from without around

hope recent and relief and sufferers results therapies these relentless the by provide disease. encouraged of are this debilitating to We

Simoa applications, to is technology as an that there disease. biomarker of can by very research and Simoa's role Quanterix' detect tau that blood-based an are blood Simoa important difficult play biomarkers measure becoming the demonstrated Alzheimer's clear It proteins. reliably most out for few going platforms one part is integral clinical recently these to as early P-tauXXX of

have high You we detected demonstrated in diagnostics. sensitivity trials that and need research, clinical in blood soon and

its expectations The the along combination for poised role is neuro kickoff of that. leadership company to be with blood-based signaled and FDA what a of readouts believe first-ever start in true approving the long-term and of Our discoveries on neurosurrogatebiomarker, the this are therapies. have a positive growth high. decade to be we neuro Alzheimer's Quanterix of new part drugs and recent will

Let's take some questions. Operator?

Operator

Instructions] first line comes Securities. from the Puneet question from of [Operator Your Souda SVB

Unidentified Analyst

Congrats filling quarter. instrument on in Puneet. just Maybe the question [ph] Yuva a for on revenues. on

You mentioned to you're like segments elaborate seeing in in? guide softer trials, Euroclinical instruments SKUs the if of mostly there's type you think do any exposure around contemplated I quarter, APAC. customer think, biotech I smaller at see on Can contracts stage, although what a you the possible just this impact And there? in later the macro

Mike Doyle

Yes.

what I seeing we're in now think we've where Asia softness highlighted from right Pac. is

we're so couple little the a year. we're principally a volume better meaningful is some doesn't as show in persist QX year way. throughout getting their the And it's right to bit actual that versus lift -- we It itself last because mix, there, Asia now. itself have Europe, a Pac but in much in in and large activity of expect a a in large seeing revenue and -- off We distributors

Masoud I there -- rather tentativeness, get highlighted, is we lab. think our in Accelerator some but that as events there's

guidance think So instruments But all reflects is offset which we is. it year can I be going is that, long. to think our soft why we what

Unidentified Analyst

maybe a you go-to-market pharma Got multiplex question a you're in get assay sense. included it. recently. then of a would But of thinking We've potentially what from Alzheimer's. currently kind to a just final like kind commercial there. view assay makes be wanted proteins are for elaborate number how on strategy on Can what kind assay And on updates That and like offering? look would your just of your of a about seen in

Masoud Toloue

I Yes, can absolutely. that. take

our I clear well So aspect, and articulated. diagnostics plans and from are a think pretty screening

today, and labs products And world. U.S., labs that and we around be are specialty framework. First, for can the the have. our over of LDTs to available that can open right these And and are in CLIA Europe, with confirm we're settings products China tens in all running that's and under we reference now being of that the run many all the our done are something CLIA tests working

and as mainly few multiplexes. those, a heard, so And the going be to side you've on probably P-tau are

we multiplex neuro So in in this and as is the both our P-tauXXX future, P-tau the near currently then LDT our product that well service assays. offer and as

And going going that's the in of reimbursement all and is then clinical done market first FDA and the and adopters care in administrative contractors to this early from then important. a reference be these take reimbursement step being from laboratories. to this second, -- is think standpoint, so biomarkers regional the And of is specialty Medicare support with uptick and approval we and

workflows, will clinical replace be our reducing in a number blood in aid received tests. what near And we of we physicians these scans believe PET term, the to future X we've believe for imaging. designations streamlining the will that an and the So couple of breakthrough

Operator

question line next of Canaccord the from comes Kyle Mikson of Our Genuity.

Alex Vukasin

Mikson. Alex on for This brief is Vukasin Kyle question. One

program discussed, kind of automation. fast the you've first those So you if most as that and the the assay this manufacturing of material quarters? any in X covering the this of qualification well some the at point? you some half, redevelopment you I'm kind kind the that curious raw steps previously is Specifically, as just X of discussed building of hit you materials elaborate targets out classifications, of implementation hit as wave, of the the on stuff first just call. of Could at beginning

Masoud Toloue

part that large absolutely, say a to that I as the And corporate yes, we would -- have part of of transformation corporate sort first, transformation this think way that. there's transformation. an transformation, of Alex, and of one assay would manufacturing. redevelopment the completing of looking sort for industrial to review, call year identifying last is I QX gaps and road which of of the And map as QX

feasibly success, as year. what is this hey, prior we in going where transition are those said And so identified to calls, identifying, then we've and in

so that of I materials. start see next raw is more material then manufacturing stability materials insert think lines. making our quarter, 'XX, some going what we've some we've qualification in you're begun And our to to and QX to And raw operating those of those identified changes and and that the into to for beginning

expect program. products into several of by the so putting operating QX And is obviously assay 'XX this redev a lines, and of we this of long process using that this top launch that our

progress next couple we're into the insertion and and of of all, the SKUs. quarters, of manufacturing with lines But So some all more very expected, as managing the -- a happy it. couple is in

Operator

And your Goldman Sykes line of comes from Sachs. Matthew question next the

Unidentified Analyst

Slight between year? a some guidance, you're good little the momentum. on color see Jake in more Accelerator to and Sykes. give consumables positive shift for Matt mix was it Can instruments, you the throughout on raise seeing that

Mike Doyle

Yes. Yes, Jake, this is Mike Doyle.

about. certainly we think obviously movement think very services, we that on we're just accelerator happy does which help us also. I it, the saw front and that consumables And margin in meaningful As about a benefit

at that We bit, because throughout it's think, guidance our that believe remain combination consumables soft with cover in it accelerator we're a clearly, the instrument business, we to looking year. I going going we believe a taken we've think of to and services. up

potentially there's So there a slowing a did last Pacific. definitely We America. macro effect year in North There's softness and amount instruments that we down. of see Asia fair within

accelerator consumables pretty look it the percentage higher So of percent on at services, as throughout mix year. much instruments, lower and

Operator

this joining call. much there questions for presenters. And today's you conference further no Well, thank time, are at so

You disconnect. may now

Quanterix (QTRX) 9 May 232023 Q1 Earnings call transcript