ISPC - Earnings call transcript Q2 2022

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Operator

Good day, everyone and welcome to iSpecimen Second Quarter 2022 Conference Call. [Operator Instructions] A replay of today's call will be available on the Investor Relations section of iSpecimen's website and will remain posted there for the next 30 days. I'll now hand the call over to Allison Soss, Investor Relations for introductions and the reading of the safe harbor statement. Please go ahead.

Allison Soss

Thank you, operator. welcome second and conference XXXX everyone call. morning, to quarter iSpecimen's results Good today's Ianelli, and are Officer us call With on Christopher Operating Tracy Chief Chief and Curley, iSpecimen's Financial Mullan, Officer; Jill Officer. President; Executive Chief

Act and as company, future plans, www.sec.gov. December may, control the year Form website the statements. anticipates, we at ended beyond no of the required company differ results concerning Securities the XXXX after forward-looking changes should, that call statements Risk to you subject projects, expressions are XXXX this Securities hopes, variations our statements. expressed Copies SEC's from as filed of document are of made section Act Words of such identify contains of to revisions are XX-K of of Factors in available which and those law. similar company's on XX, to the amended, call with the events. meaning and amended by the intended obligation the for these or from set and SEC. today's The forth the expects, believes, within statements update of statements undertakes such such I by date Actual or implied as those this may the like numerous to forward-looking These XXXX, Section materially for including except forward-looking of Section are Before the conditions, begin, management intends, remind words estimates Exchange XXE would many of certain XXA as of

pleasure iSpecimen. please Officer my go to ahead. Christopher introduce Now, Executive of Ianelli, Chris, and President it Chief is

Christopher Ianelli

Curley, joining three on and Chief overview XXXX of providing and Good our our thank second Thank Tracy I'll Financial With financial call. you performance everyone Officer. Operating by by the Tracy performance, quarter you, during begin me and ended XXXX. June our Officer; Mullan, a us are XX, by morning, Jill operational today review for of earnings an six our conference our months Chief Allison. followed

our Geopolitical respects to iSpecimen visibility close Following business. come, look near-term over the unrest, last what a this public for of and expectations line quarter the that, we as remarkably second will year, our your certainly a the remains open different. have environment was similar. difficult At year concerns drastically COVID a marks in the of operations to little ongoing company. Yet outlook today, many economic time and questions. reduced for world a of take full The

marketplace Fortunately, supply of continued and address demand a investment our remain we fortifying the strong inefficiencies marketplace intensely extending and the focused platform. on for centralized backdrop, iSpecimen to Against the the chain business. biospecimen in this validates fragmented remains

support the sourcing to easier providers growing for expanding care engage its and offer Specifically, clients' biospecimens with samples biospecimen with suppliers medical research, along needs critical better our and capabilities to network health their for platform. we've been for research our making it of

a seamlessly of to delivering the their in designed to easier align We capabilities aimed long-term make software series that'll earnings the foundational match As search researchers we discussed each the the updates during it for our improvements requirements. our with marketplace strategy. to even biospecimens platform identify that of first to second at of previous introduced quarter yet call, marketplace, iSpecimen our XXXX, incremental

career. the management of leadership in Evan Cox roles enhanced simplify the course biospecimen the Evan also with of of and capabilities brings we help of named development guide his integration maintenance platform. Head on our data new that care health decades Product in data our second a efforts, variety platform ingestion We the inventories quarter. To of experience, served over to having product

his support capability a comprised marketplace current focus team suppliers little and pipeline, only to His research and may While volume on second capabilities growth. are has increase be which biospecimens to quarter. human the our revenue development increased search user is Evan that in bring for of for of from and search the help collected customers XX% our our prospectively. for our platform part will with subjects and board prospective are drive engagement than the prioritizing the biospecimens velocity the quarter, and business on both will he for been specifically revenue higher of our more experience sales expected This unified a which collection a about

hired teams internal have with As part technology accelerate of features. -- development this these time process, both team software our market our development to strengthened and outsourced have we to

decision remains discovery/development. various biomarker and efficiency made researchers iSpecimen of drug fuels going for such the Our via hematopoietic will stress of to validation, with team sales to supplier of tissue our that company's its improve as our forward software iSpecimen forward. overall quarter, work expand go-to topic in and biospecimens, the we efforts. technology list list need productivity It an make a to be of the solid platform. premier medical the our the P&L biospecimen roster territory Concurrent investment we accessible care supply specialize have in health and our to enhance the our in continued the and development reflect addition The investments for applications identification, research is strategic global suppliers ensuring to to biospecimen on and providers. growth continue diagnostic and coverage to going of sales research. our cardiovascular derived and we strategy customer-facing By structure care And from of change what are health marketplace efforts platform, who suppliers These biofluids our their marketplace suppliers first the test including now significance increased continue the diversify disease will new platform with them. expand In platform to of biospecimens the samples cells important providers, development researchers, we biomarker oncology, team. is

a all a as account moved senior been structure more operations unified along where to This junior multidisciplinary sales paired with through team. to salespeople, has together Specifically, personnel sales funnel. with work designed are pod pod move opportunities and structure marketing executives we our who

biggest deeper sales These the to this of that management, growth the are June of frees to just repeat business senior efforts starting account deals. on by structure focus early is on late staff larger evidenced our dividends our the return pay it benefit order up stages However, sales throughout as in and funnel. $X.X billion now an a closing purchase recent to and overall of closing

to the our impact business. on Next, have on touch I'd conflict to like continues the in that the Ukraine

remains. QX Ukrainian a disrupted Russia our coming that of the or suppliers are during offering only either favorable uncertainty back economics our discussed on the good and call, region in of the the to iSpecimen. the exist. and considerable top and we The The Ukraine additional have capacity that suppliers minimize risk, they Warren back challenge cautiously using we online many limited now sites currently projects is are As our Ukraine. news where To number is and both sites in Ukrainian

and modest overall these use value in to of purchase on velocity expect orders. orders sites specimen a purchase have We continue reduction those on the fulfillment against impact will of both the our the

overall address to environment want effect the its I business. our on and economic Additionally,

rely until and companies access of to many are that We them development to Therapeutics regular and Our sectors be to commercialization early many believe small Diagnostics and customers caused conscious of an Door are markets infusions the research pipelines. their has the biotech/life primarily mid-cap cost the in XXXX, company development with new of companies and Since this fund companies on in effort to involved in has conserve valuations. capital recover. cash sciences plummeted to along more capital

the funnel been have the slowdown. impacted experienced the function economic early by we we the our are fielding which purchase reduction six meaning smaller past overall orders months, sales average by too size believe extent has a is we these While to XX% projects it's about of a of which in to know challenges, over

will number value seen in our half relatively the corresponding structure, purchase of year focus pods of positive trend orders made account top this to more management, that sales our I'm confident XXXX. half this salespeople first On the first by larger constant the on allowing increase the have time which team growth. to changes the their a to we've reverse we help side, also kept order the in order the projects compared purchase has overall i.e., of purchase of and

a be typical COVID. call wouldn't it something Finally, say I didn't about earnings if

we our customers attention today, While represent and could mean a pay close a new for our to of small continue revenue suppliers. part specimens to COVID outbreak our now what

to future. That growth. caused we we While in a the remain our at business network we can and may ability returning time, that of restructuring outbreaks, has not key market these continues to and that gain our look do this still geographically XXXX, specimens. source coming all the dramatically team the with Despite us two believe ongoing to benefits sales the a the localized believe during work and impacting believe past COVID leadership additional that navigating challenges done to supply is our overall position teams, development realizing personnel, and of our quarters. and maneuver we COVID technology improve that in affect entire also first of disruption our our diverse especially by COVID half of of our marketing strategy, have execution along great the investments economic said, the challenges continue the around We confident and job and I forward will share to years. to the the over teams

on review Tracy Tracy? I'll to Now, call financial Curley, will the results. pass who our

Tracy Curley

same of prior the primarily compared Good financial in to to the revenue XXXX. second XX, decreases second period period Thank of decline XXXX continuing to sales I'll of in million XXXX year. and million for our the The to for June compared the when revenue ended in compared review XXXX. X-month the months in the of everyone. $X.X Today, morning, X-month were three quarter COVID-XX you, $X.X specimens period the same Chris. in attributable for for reported quarter the XXXX, results We period

decline sales the We fulfill in orders at compared start same period of in year. when and a continued that prior war anticipate ability the our our reduction for of reported COVID-XX the the During Chris specimens that to the the the XX, to XXXX, we COVID-XX uncertainty just COVID-XX $X.X but spoke million in have the during June and to which same revenue of million were attributable the in last down revenue impact approximately supply approximately X-month the the of the X-month in quarter to $X.X sites first ended The year. those war compared decreases period period decline XXXX shut due revenues will specific impact impacted in of do not and of guidance primarily about. regions continued to continue to of our on Ukraine period XXXX the Russia

For revenue. XX%, X% specimens the of XXXX ended XXXX, accounted months XX, derived and [ph] for approximately revenue $XXX,XXX respectively, $XXX,XXX, our June total and three from COVID-XX to related or and

to For total or respectively, of XXX increase specimens accounted months ended an same X,XXX compared June three June and period. Specimens XXXX, the during to XXXX, XXXX the for in and compared $X three derived XX% million June XX%, non-COVID'XX accessioned ended months specimens the from or ended by XXXX. the million specimens approximately $X.X three non-COVID-XX-related XX, revenue revenue and specimens X% prior our XX% revenue, accessioned XX, months during to X,XXX year XX, increased

or per a prior specimen was price there average period. resulted compared that of mix to XX% in the the specimen a same year's in decrease However, selling $XXX change approximately in

first XXXX For or XX,XXX the half XX% by XX,XXX during specimens accessioned increased and COVID-XX $XXX,XXX XXXX, total derived the to of our XXXX. approximately specimens XXXX a and during June or approximately to our of XX, ended compared the XX%, Specimens $X.X X% to approximately and revenue. specimens session half respectively, approximately revenue for related XXX specimens months million from first six accounted of

second million per prior of revenue However, selling the of in same decrease of specimen for June million X-month assessment XX% the the decreased for compared XXXX a Cost period approximately change for was XXXX, approximately XXXX, the by XX% same approximately year's to second in revenue to for compared approximately $X.X $X.X period average the a of resulted decrease million in of or $X.X XX, of XX%. approximately XXXX. in ended Cost $X million quarter quarter a period. mix to price from $XXX

XX% by X-month The period. specimen to attributable The prior a cost specimens months a X% somewhat the the by the June by in to number XX% period. impacted XXXX, period the the a offset increase in the per six specimen the in was decline second number decrease mix, the accessioned quarter accessioned ended period in XXXX XX, offset June by during was of per for year's XX% decline same XXXX, XX, year's impacted increase compared specimen decrease the attributable over of specimens average somewhat cost average to mix, prior current same ended specimen a

For spend we $XXX,XXX same from cash increased period. for technology approximately the XXXX, prior $XXX,XXX our second quarter of for year's to the

spend our million $XXX,XXX directly our the XX, the technology same launch recent investment period. iSpecimen For ended our related X-month XX, periods $X.X from June June platform. XXXX, same per year's and is ended cash to XXXX, approximately to for the our X-month for to X-month we by to in year commitment compared as of our marketplace spend period prior period enhanced evidenced prior in Increase increased technology the

the software comprised of were not $XXX,XXX and technology approximately XXXX therefore, of $XXX,XXX. of $XXX,XXX was remainder capitalize of as approximately able $XXX,XXX classified was of technology developed technology to expense the of expenses was technology internally expense for XXXX, of approximately For to related software. quarter amortization capitalized that outlay cash quarter Total quarter we and the this expense. second approximately comprised The XXXX of for of developed internally second the noncash second

$XXX,XXX XXXX, For therefore, $XXX,XXX of capitalize quarter approximately XXXX, for Sales marketing The compared approximately second software. comprised XXXX, we were period. June June X-month X-month not approximately technology period expenses related for second period year noncash this internally capitalized as technology ended XXXX the outlay ended $XXX,XXX classified Total X-month $XXX,XXX expense of the approximately XX, technology was the to and, of were June $XXX,XXX for that compared million was to of approximately developed $XXX,XXX same internally XX, of quarter able technology expense of prior and for expense. period of remainder XX, to amortization XXXX. expenses comprised $X.X software to the the developed was of and for the the were approximately ended cash

administrative million related expenses. and the of expenses general X-month same the $X.X marketing increases XXXX, and June year's quarter and approximately expenses, for operating $X.X approximately For compared approximately for to and period. of marketing efforts period second General external XXXX $X.X attributable was ended in to Increase sales million the were million to compared the XXXX. payroll $X.X during approximately quarter XX, second prior expenses were million

$X.X ended XXXX, period costs $X.X expenses. in and operating primarily insurance For directors increase expenses compared million the general officers year million same compensation, X-month approximately to compensation, during attributable and approximately administrative other related to June were noncash were prior XX, and stock the an to maintenance period. and Increases

$XX.X remarks. XX, of of cash concludes compared as million December XXXX, to $XX.X million balance As was prepared XXXX. our approximately June our This XX, approximately

call Now I go the for open would please questions. to like ahead. Operator,

Operator

Capital Group. from [Operator Instructions] Our with Craig-Hallum comes question of first Hewitt the Matt line

Matt Hewitt

curious, side. of on on Maybe areas you next some you first over the year just I'm expect are or on as you tech platform? up, to you that investment enhance incremental out plan what the to so, mentioned that continue the the look

Jill Mullan

is this Jill I’ll take Yes, Mullan. that.

unified we really we we’re is what well as search the one for looking for which integrate So patients at biospecimens search together do search interface. how in the bringing call as

to into allow available want that you tell clinical to criteria to basically or you’re network today, looking you and a out go in it. or labs. encounters, to our The But their terms collection enter and in from exist unified criteria go if can you prospective So do more our patient search our to likely and patient sliders specimens patient, for in type what and see into for of you get users a what’s have biobanks we in if marketplace, us view encounters. in network the use will they go if immediately checkbox their search a

to together So big the on. make that’s and it requires we’re to It available some on feature all the doing to working the integrate capabilities those work then researchers. database

Christopher Ianelli

and Matt, the Jill for evolved access had inside of here that to now in biobanks. the inventories example, what evolving laboratories think at years clinical technology, remnant in to we of part technology can specimens, clinical add, It's look us uniform -- just customer that a technology company. over one with the for just put a same to silos allow Unified experience. of where would of that it's platform set of silo search sort environments single we in all another another said, the us It's those have time search our illuminating onto And is we unified that so to to

Jill Mullan

patient. the Including

Christopher Ianelli

patients. Including

Matt Hewitt

year geopolitical to perspective way then from size the is regarding Maybe kind first there. you those sounds dollar – And out customer from obviously, it wondering at the subsiding? more versus smaller I’m commentary Thank the how regarding but headwinds a into as this those then – to, your was could perspective? the what economic if see? great. you’re still quarter impact. of expect backlog that for secondly, you maybe headwinds back there it that look what at I the order second quantify details assuming – to you on regarding, quarter may orders the headwinds, do a would side seeing but like And that That’s some of be on a point, there’s do was half I’m one, you you guess, to way elaborate are of an next they, they’re Or create or see year,

Tracy Curley

the in Ukraine in dealt the had started when supplier on by being We're that we that. war with or swiftly orders purchase anticipated existing sites guidance QX not giving our We filled Russia.

on. we because, as know, you Ukraine coming even war -- going though our back are are cautious online, is still the are sites very We

hard sourcing Ukraine So sole certainly not in we in the did have numbers are APO we and like any past. don't we the

more want more So add Jill, are you doing to any we're that with risk there that? things to the that that. addressing are do associated

Jill Mullan

Yes.

I mean had orders it purchase orders of periods. was think that about were that we said doesn't in some the all quarter that time. over of at was because those affected we collected the purchase that revenue in first $X quarter million first worth that expected And multiple

their or entered ability still is that way. slow XQ did assessment down the and feasibility send it What operational. either the sites we with As orders Ukrainian not impacts to

some lingering like same project. that's there's augment good sites the and And can with at have we areas So say those looking equally Armenia, same of we've to in, sort quickly sites economics we how let's there. say, it why Europe been to, effect to time, the of support added in be Estonia. able But we've Turkey, are other over that

to those that I economics to we augment like we're get same said, same in So looking the continue sites can region. the so

Matt Hewitt

in back That’s very last I’ll one for But obviously, and helpful. margin then maybe hop queue. the strong a the quarter the on And performance me in gross one side.

of You details went through some the there.

should how it’s so half dependent the year, the upon is completely about of back to And we sustainable? Just of that hard over mix? is it even. Or a point to XX% be that range thinking kind

Jill Mullan

that to generally margins we XX% for range. XX% are are shooting So the in

in their specific better because in than projects part came quarter mixes. This of large that and

with you'll forward, going be been. it's think pretty it's I lumpiness based upon how projects. may So see It consistent

Tracy Curley

our we were gotten modified more we more did of our reporting you the revenue get that. able precise have and with discuss the QX, that remember I were to last internally fact accurate way we calculating to had would we like might because say, cost

ratio revenue percentage of cost that result that. a part lower revenue of so of And is to direct for

that to continue as you’ll so well. And see

Operator

of Davides comes Hutton. question next Our Constantine with EF the line from

Constantine Davides

could company a out. bit what purchase I that? on large a wondering What was to enabled of customer? identify or and it opportunity called an Was the if existing expand you was new I Chris, type And capture like you it? ultimately order just that. guess, you

Christopher Ianelli

there's us. was of for us new of that, buying and But give little companies life answer the it's customer science you all them of but another an call from Jill the may it let Constantine, details a bit that you new in one -- that audience entity reappear others I'll different people being serve they in a it some and on may I'll through already company of It's rotate company. as that know part and both. terms the in a

a job done we've those So good maintaining of relationships.

these company extent let the their that I'll have before with and somewhat an they prior this speak is she in say new followed they're project. can. in of to of worked customer what it more new done So details we've old the because with us I folks Jill have companies to well and this

Jill Mullan

Yes.

it’s typical pretty So that prospective collection. for long-term project. collections. it’s I prospective can related say oncology a It’s is a And those which

be want will of So reasons the that and the to that of it we very of course our data big it. it’s plus collecting one over and have, our do. a year because and data we’re it intensive the hard capabilities I next team that data able is the But project and think it’s to handle we technology

Christopher Ianelli

we're what these does to the going a it be structure fashion harvest to salespeople, we're able to exemplify, in that to of longer-standing with senior the pod more larger engage to able with consultative be up projects. more to Constantine, teams to, get And free trying

first many of hopeful we're the is that to come. more this So

Constantine Davides

how you quarter. does a and quarter. in of that that much compare average, differential between revenue and the just But projects is a then sort I of remnant year-over-year? more in hit in of the classically oriented may there’s and, said sort margin think And Chris, And I just prospective Great. was volumes? your on XX% there understand maybe I of comments, second different guess, given How prospective pricing

Jill Mullan

Yes.

first. me the let with question So start pricing

$X,XXX the that's priced amount project data thousand a the how complicated can couple be upon and of are and it typically depending of collections at on prospective up required. So is

Christopher Ianelli

specimen. For

Jill Mullan

or per collection. For specimen

typically those and upper biobank then of between the mid- the specimens archived dollars up. pathology which out are in coming a are And the is in on clinical hundreds. to that the have side tens On you and remnant blocks sample, per or tissue of $XX-ish samples remnant in so

So prospective than be more tend obviously. collections remnants, to clinical valuable the much

I mix of XX% projects. whole And prospective question versus split evenly minus your bunch collections quarter, we're rest look at you typically between XX%, fairly was and plus other around typical of X% part think second is banks. XX%. average in typically remnant, across prospective And a of or if or quarters, the the around the typically a and prospective bank's well which on the so as to between means projects to we're XX% up XX% as X% somewhere

So depending upon terms remnants. how in much we have of

XX% This quarter, the was low.

So didn't order took, they that, mentioned, bit and purchase Tracy as to of mix see as because big just typical. part mix. is expect much a and we or all ASPs. back our that I prospective typically think more have mix the high-value to a of I And impacted think, we through that we high-value I something This lost at that went lower was has shift part it's little they of were are. least our them we than And

Constantine Davides

does differential? really margin So just depend is a there much of project? Or the it on

Jill Mullan

segments be all upon we at. depends not the various project. it So ballpark. that our typically look There's differential across margin They a same in tend the to

Operator

of question with next comes Revere line James Lieberman from Securities. Our the

James Lieberman

and from see organizations [ph] up to increase in and terrific registered customer purchasing research grew the the and It’s platform user XX%. progress your then making your XX% you’re Great. the biosearch in

reaching it’s $X.X this order. comment, moment see a good you tipping I can million it’s sort where whether you the not there. So sounds a point sign. That’s impressed suddenly I a like some also very by Obviously, thing. out it aha is an magical wonder your reach And expanding. of was

something of like But multiple that signed? type agreements like you where could You’ve got see just contact. lot is to do happen a that you’ve multimillion-dollar

Christopher Ianelli

the for you question, thank comments on the -- I'll Jim.

for So here. platform markets us in we're life is the well, tech the to more in from product restructuring Cox's in as of and answer mind these and my say envision have teams, with into all some management our point. activity. and The we that's recovery chip of investing of we the sync a image out, come tipping efforts to going management, underway the hopefully, capabilities to team all probably and science processes do in heavily convergence be sales leading marketing going fine-tuning, I'm Evan a there's buying that product going

think these that's we that do towards do be to really get have the that point. potential customers, I we things can Tracy to we convergence from what's our driving add demonstrate it projects we're more drive the given where do all large for and and consultative that I'll than to any sourcing what well. us that So tipping and And doing we ability platform these better our that let Jill tech about competitors way network. far as the go of to to

Jill Mullan

covered it think I you pretty well.

Tracy Curley

to of money. down want obviously, do any be all don't here these but I initiatives cost

compared last year. And so to little you've probably this year noticed that our expenses are a bit up QX in QX

initiatives carefully as in do our closely we managing are are costs. these and that progressing increase expenses We very

James Lieberman

been in goals that you and I’m to about upcoming having. the the outreach that and your the going the resources competitive structured kind it’s I of have, be you’re that way strong – position and prepared excited doing a very feel you’ve and and that which you’re company certainly,

Christopher Ianelli

We business this Thank a absence fast It's a difficult you, the all anticipated build. do large confident. model commercial Jim. and never like we in We're embarked be a inventories of market do to on that what to creating difficult the we've resonates with them confident we the compete. that that But we that a there have there our market that tipping customers all time -- is with a point. solution hear which we'll and from we biobanks to we're and get that all

So thank you.

Operator

remarks. and this the time, CEO no to I'll and turn queue. further President, At Christopher Mr. questions Ianelli, call Ladies the in there gentlemen, are for over closing

Christopher Ianelli

got All we everybody upcoming continued iSpecimen for joining follow-up We again you, call and the you to and right. thank that look and good our to remarks. the with us questions events. interest operator. for having at on today’s at of Thank you forward in end I’d your like seeing of conversations many

And a Relations. at any that, So it to up. out to have with the represents Everyone, us that or you. of team reach day. Thank Investor please for great KCSA wrap do we’ll us

Jill Mullan

you. Thank

Tracy Curley

you. Thank

Operator

Thank today's you. conference. This concludes

at disconnect this participation. your may you lines time. You for Thank your

iSpecimen (ISPC) 8 Aug 222022 Q2 Earnings call transcript