- Earnings call transcript Q3 2022

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Operator

Good afternoon. My name is Chris and I will be your conference operator today. At this time I’d like to welcome everyone to the Berkeley Lights Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Thank you. Suzanne Hatcher, Vice President of Communications and Investor Relations, you may begin.

Suzanne Hatcher

operator. you, Thank and earnings everyone, ended Berkeley third Lights' XX, Good reporting welcome financial XXXX call quarter results quarter XXXX. afternoon to for September the Relations President My Communications Hatcher, is Lights. Vice name and Suzanne Investor at Berkeley of I'm joined today Dr. by Officer Kadia, Chief Financial Mehul Officer. Siddhartha and Joshi, Executive Chief

that Before I'd Laws. risks the within meaning remind Federal Securities like cause you be material management will could statements we statements are during or anticipated. uncertainties materially forward-looking statements results begin, These and involve from make differ this to events that call actual that of to those

For the Except new revise projections turn or factors call as of as other accurate please is conference obligation disclaims X, XXXX. I'd more events information filings. or law, With any discussed broadcast financial by November future or Siddhartha. only information, time-sensitive or contains Lights information, Berkeley on the refer risks, otherwise. that, uncertainties call update over to because statements, to This and of required SEC forward-looking live any to the in our intention and whether like to

Siddhartha Kadia

XXXX Then quarter demonstrated start communicated plan. third it And turn against operating I'll call. for thank who you discussing and of We progress our review call to new our our us. of over in solid today, our our strategic results I’ll for during we under the our operating more will pillars Mehul, Suzanne. financial the five last details. quarter plan XXXX joining that results strategic third Thanks, delivered everyone progress earnings

any goal, growing, last rather line under at on while our report we than our pursuing will next on a approach this to of maintaining and appropriately pricing with first our. our details quarter an in positive forward we growth decrease The look revenue accelerate flow we I'm have new expense with XXXX November we quarter XX. management. strategy, updated to operating pleased structure requirements. focused are new in strategy, early revenue cash resulted reached product XXXX, July third our growth pillar hosting we to believe market-driven processes taken we and and in optimize building cost. more and week that the portfolio in addition our In and the that we are capital with sustainable managed profitable a disciplined which today, allow strategic expense operating at strategy Day, operating to call and on us to by Starting goals actions generating you our to working shared In operating cash business Investor which our and business sharing immediate

manage expenses operating before existing a flow XXXX. and positive operating we years As in result, generating expect over three capital cash with next the to burn cash

our second prioritizing initiatives, on number investment rigor of a front. and Moving strategic this pillar of on development R&D we advancements on to return significant focus through increased made

us collaboration opportunity that Also, of some and that our to profitability not and business restructured margin our value goal, that projects. create eliminated Bioworks dedicate relentless to R&D economics support functional or With royalties. Ginkgo focused as review goals we on in did payments agreements screening September. agreement throughput In activity. our we we allow milestone the in downstream with early thorough to with concluded and we ended high service ROI, and partnerships highest measureable participate such to First, will line our enable the services focus only resources a this organization

of Berkeley Our I'm several partnership Lights the that the Ginkgo and with delivered. us teams proud last two benefits over years gave certainly workflows

longer goals we collaboration. wind contractually the to processes required we no agreement and down our profitability committed this the However, as supported remain

well very Bayer outcomes to Scientific, Fisher are evaluating complete The going at different are are AAV they and development determine Thermo with agreement steps. is with of collaboration and contract Science West Thermo each next Our completion. stages Crop and

reminder, vector with a viral the As collaboration agreement Thermo to rights non-exclusive workflow. is the

ramped vector quarter, the development Over gene focus we space. our viral manufacturing therapy significantly and on the last

market XXX validation, and we cell that cost can While our belief timeline solution. XX This to technology spoke technology workflow that days, enabling presented is research conversation game-changing positive and and therapy match. and companies conducting gene screen cell discover has in what the X,XXX an at highlighting no our speed how currently rare nearly and about the that our Berkeley and unprecedented clones throughput in no can, to lines with technology can technology workflow received overwhelmingly our We space revolutionary, up does when and confirmed the other Lights industry-changing. feedback

to of select unique validate improve to for therapeutically retrieve value, AVV-based and that stable capabilities relevant high cell continue our We producer the and yields gene therapies. the platform will cost lines manufacturing

resources of ample We dedicate the of largest this our and workflow intend R&D and have to investment used balance we XXXX. this for opportunity throughout the return this near development to term of as year

emerging discovery. headway also We TCR good the opportunity on in made

is strategy can significant interested this therapy now functional the and exploring share to and well recover commercial partnerships have cancer from Day. several Investor at TCRseq isolate actively to We in with customers We Plate gene our opportunity. validated on our patients personalized PCR enter discovery our who vaccines, plan rapidly that our partners platform market and services more received and team

customers of pillar quarter enhanced placement through first therapeutic and all to commercial a systems antibody we for our line the sales systems from model. academic pricing on TechAccess seven placed and new to subscription These to delivering were strategy. Moving structure Beacon consistent CapAccess Beacon portfolio execution, a and and be and and used We eight nearly one our product enable different third specifically new discovery applications vaccine of comprised strategic variety during cell sold development industries with discoveries spanned Notably, of development. placed pharma and research to development. second their

be positive advantage, competitive providing a continues CDMOs, This largest especially our proof and CROs our compelling marks continue to for which top a pharma, quarter customer point and to technology that segments. represent

analysis good unmet segments. research in we customer can our customer against high growth our that of technology value made academic of also Through various our and validated finalizing terms go-forward progress significant provide research in needs segments. we market roadmap, product our In

example, help editing new and A For of in academic XXXX this will gene immune the oncology pilot form applications. to to design application. top be programs priority collaboration guide

potential cost quarter, product our in strategy and barriers the with margin we the pricing of that lower of customers and to programs instead and roadmap, array first offer segmentation to select or us revenue Beacon their these Beacon ownership need includes existing XXXX. actions offer Investor that discussed of pilot share a introduction at pricing platform options ideal the our access price are current system, years, full specific and approach needs nests materially about to support a include this of in terms achieve on on program several All nests of platforms flexible Turning total track Beacon a as customers operate for The will specific don't Beacon current application four we'll access to models output focused in develop The higher recurring be our next on product the technology consumables system be variety We'll to price. half for the are market want with upcoming two market configuration want model. technology being who cell at and budget. first We're to to including offered we is to allow our of Day Select strategy the early customers. will Beacon enhancing to a the and models entry of a a make additional more called detailed to more globally last capacity reagent pricing designed broaden November instrument with roadmap list of our a new targeted XXth. but the Beacon launch the Higher wider which growth portfolio product for for the model development. market the the and to line lower of several will with pricing financing rental tailored to

of with life as Legal companies. Officer. team rounded record of leadership Fortune companies XX life sciences the tools diverse We team our the in addition world the cap as more pleased scaling litigation, Turning His brought to track Overall, on teams sciences including at communications leadership corporate incredible and in Chief tools believe skill-set with managing Berkeley four our management Scott executive trade industry. profitably a small an publicly and our excellent have make class than Chaplin relations building with functions in have strategic the out pillar serving we to ranging proven a one extremely start-ups Scott experience the sciences to I'm has him company. life entities. of government team compliance, most we from to internal of addition experienced talent XXX years contracts, council

will and customer and to innovation, experience commitment tools services culture quality. centricity, life be a company our collective goal a a critical advancing diverse sciences of in building Our excellence of towards driving and in

data expand even needs expense insights our synergistic that technology. strategic helped SG&A provide driven like synthesized R&D dynamics. our M&A This on and research pillar of into total would on decisions have past cost and would that inorganic pursuing our business our leverage and our unmet and on what remain formulate, addressable be committed and accelerate opportunities profitable I to refine quarter an customers evaluating strategy market We to will more either bullish Finally, current and expand further we've update to market of to complementary growth markets competitive or These objective our what conducted structure. leverage fifth give options structure. to us our M&A help options understand and and

M&A foundation offerings, with Overall technology of or In and a for that existing so synergies. are our We'll of may expand life G&A to technology infrastructure consolidation a far Berkeley terms from looking in strong customers; expand leverage as complimentary company new addressable we opportunities our to our commercial to current this and tools lay growth. changes structure, R&D market Lights BLI work M&A offerings business synergistic continue profitable dislocations by we opportunistic cost services advance options providing enhance technology and will opportunities service drive include our licensing sciences progress pleased important of company. transform market, to I'm total to a terms to to that our In that significant expansion diverse platform

of play value ahead and opportunities and immense plan shareholders. have a for We our strong us to create

over XXXX like the results. to Mehul I'd our turn call discuss to to third Now, quarter

Mehul Joshi

you, Thank Siddhartha.

third operating environment. challenging execution a our reflected team's our results through pleased are to XXXX quarter that the We with for financial commitment

accounted quarter of for results $XX.X by third and By sequentially. $XX.X million $XX.X geography million, XX%. third lockdown, Looking XX% tailwinds company in at down XX% of the million in Platform revenue North was APAC quarter to quarter coming third up EMEA the to third XXXX, after third revenue our followed XX% was our America XXXX XXXX XXXX and at was APAC XX% XX% quarter the the XXXX, the quarter and for compared strongest region. included up XXXX, in total total sequentially. revenue the third at quarter in the COVID down and the compared Recall, in XX% particularly history quarter

agreements consumable the due significant third quarter of XXXX. for and impact a increase it to collaboration base revenue of with in The the have during year-over-year for Gross was recurring that by XX.X% the Our with XX compared revenue the year. $XX growth third the XXXX, was and in the are in $X.X up in third were XXXX compensation quarter a margin up million we This of Revenue units gross XX% million seven Ginkgo stock including gross tech of low quarter was generates to This a million XXXX compared from $X.X in that expenses agreement The year. install Ginkgo Aanika quarter reduction margin and as the the $XX.X given was ending compared total Operating same XX% $X termination growth stock of revenue Fisher, placements the profile by pharma million year ever of was particularly to subscription. restructuring XX.X% XX% and of grown in profit of to access This higher to $X.X the in revenue our decreased XX%. the third strength customers. our to brings platform the in million $X our million third strongest Gross Bioworks XXXX, expenses install in the $X.X included our sequentially. in Beacon now the agreement. quarter representing placements our customers million by install partnerships of in mix third million in was for approximately QX prior or quarter base million, Thermo prior prior period XXXX and margin contracts to the based compensation volume, $XX.X based our recurring completed of marks $XX.X for one base of service million in base demonstrates recurring XXXX platforms. install Bioworks. OpEx Biosciences eight with quarter the and to of third of Operating XXXX of compared and platform placement year. related the force. collaboration anticipated rate grew Year-over-year prior compared XXX inclusive the grows. quarter inclusive million to continued development expenses the value of of driven $X.X Recurring of

optimization investments. the be commercial done total cash loss of R&D resources of expenses for to Net with basis restructuring drive reclassified strategy XXXX a million third we on numbers All prior $XX.X commercial short-term execution loss support. expenses. for a also will During not to did R&D and execution. expenses. are and net and the $XXX.X with of our $XX.X prospective quarter compensation and of initiatives was the reclassification to million operating impact quarter compared This ended million stock-based that We align year and certain the loss SG&A These and and expenses customer period. SG&A drive quarter inclusive

Our credit available $XXX.X million, revolving liquidity our which is includes facility.

elongated strategic year we to continue Looking revenue XXXX, be ahead our plan. able expect XXXX to as operating business to full around the the of in realign We were remainder we approximately XXXX cautious line revenue the with to that of in turn With budgets the XXXX, on third will to I execute but quarter sales global pressure plan Siddhartha. CapEx that our and increase remain trends about can back call cycle.

Siddhartha Kadia

Mehul. you, Thank

I I open there. you month, Day see at With questions. coming of operating up continuing without including next implemented the to our newly our hope to look now that Over Operator? to Investor progress forward many to it share strategy, Friday. we'll

Operator

you. [Operator Tejas Instructions] from first Thank is with The Savant question Morgan Stanley.

open. Your line is

Unidentified Analyst

some projects. you My is looks to This Edmund how to of for is this of and good high [ph] conversations Thank regarding partnership been what initiatives questions. question the decision currently starting taking you now services? elongated Could expand and you are hesitation, are light in Hey, the to on evening in efforts CapEx efforts purchasing progressing? guys. to have further of the on noticing you Tejas. context for first you What partnerships these the and drive your place funnel speak your value like in right the cycles signs see conversations and

Siddhartha Kadia

be more color able Well, that. Mehul might that thank the with I'll add Siddhartha. to to This and you answer is for start question. some

services is we our the highest and focus One and areas resources therapy discovery. and our is on for it focused a of parts have second franchise, for is most AAV; workflow gene the profitable to our value TCR two to and and the to of committed the narrowed make lot Just partnership stay business one that. clear, onto

for We as clients area work agrichemicals continue well. some to in perform

seven is for that gene a finished workflow anticipation on work AAV was for and done future the discovery. quarters. therapy On about work that TCR that with resources current development that our client have of work most However, the was one AAV we

with are that for production. We discussions client in now

gene in strong earlier discussions the There's as to a very comments marks. work However set many discussed of we clients. going with we and therapy of the are also

clients finishing XXX theoretically still well fully type we are just have be as CDMO and we'll there have pharmaceuticals capabilities and with discussed a that all effort, for commercial is gene our who development we market, of area service We value where our that sure from high between could us, about is this Because of use potential gap as one ready significantly we to product therapy offer will the go services. now, making our clients. before quarter so and a when I'll fully our of right becomes area

seen what capital would the hesitation ones for spend, haven't from large that described for be We any of spending small you the for capital saying companies or the I pharmaceutical BIODEX.

Unidentified Analyst

in Ginkgo? Got decision it. you down could the involved wind be future? What be and more what's That's details very And us Ginkgo a helpful. collaboration your – provide with continue customer with the terminate to process? expecting to to in Should we the on was

Siddhartha Kadia

we of discussed is as our as last with I arrangements the terminated. if, Ginkgo it completely think – time

through there. going process obligated are down contractually wind for We the

from should in projects. There intend is expect not them You workflows. possibility Ginkgo. on the to our We any of of work further course with a don't any previous revenue of interested Ginkgo current being

the because we right like developing with for any work discussions gene are participant but them are We under industry, now. they potentially for also not the vector a in are AAV therapy workflow that

Unidentified Analyst

and the If super of be Got it. XXXX, help we yet, high on focus should instrument Ginkgo to us thinking frame you how anything in How in one partnership want XXXX And for light probably margins? thinking similarly contract and Thank understanding should we that'd projects termination, with just don't the guide be in about value CLD be and revenue could about the that helpful? renewed to services. this XXXX but to launch prioritizing provide half you your XXXX in you. gross

Mehul Joshi

the in QX guidance the is Tejas, over. is Hey, but to do XXXX. quarter not guidance after any ready Mehul. for know call reiterated XXXX provide We and, that our we're this We'll Yes. for you

Unidentified Analyst

you. thank Great,

Operator

with is Stifel. question next The Dan Arias from

open. is line Your

Dan Arias

that the there Thanks them the placements a right the or there? Sid, can you that's up sequential a nice them on just Good standpoint; is acquire something particular you Was step the system? with at time why to just resonated the number on from what during kind for least questions. from on touch curious guys, in now eight quarter customers heard of of couple drove what a a afternoon,

Mehul Joshi

Hi, this is Mehul.

jump and start maybe Siddhartha I'll So can in.

new the comments Siddhartha our where placements majority of his well customers our as prepared as varied in as with and customer mentioned applications. segments So a

So still value the we consumable. and of proposition are believe customers our instruments that our

longer in cycles bit are scrutinized our CapEx though sales services. interested products and our we're budgets – and even So in little very customers are still a seeing being

Siddhartha Kadia

Yes.

to just color, specific about there provide just that are why think of not – more I year do is to doing anything of I the believe people timing this.

the sequential Our from execution the do can the making changes significant of to are number transition with as has you in focus as lot improvement we've the couple more commercial our quarters team frankly had of across leadership. a on with imagine entire commercial to as additions world. we And more leadership well last

be impact we there so with And that any in continue us just space. improve cautiously continue that will the to our like are caveat macro to performance other global that optimistic our yes, company that

Dan Arias

Yes.

in versus much you that to sort for while, is haven't seen what discreet that if Okay. noise guys imply book And in maybe step but hearing just so you just The are number the of a tied does XQ background assume that a here, some you outlook of for revenue how might are up the the seasonality? apologies historical here. on order Mehul things

Mehul Joshi

right. So of there, couple comments

use consumables continued kits. our our see in will continue customers and our recurring as We to growth revenue

there. So we expect for and growth revenue, the drive so we continue to to the that that's focus recurring a company expect strong

last the some quarter contracts have materialize won't in as completion On the of we and mentioned revenue. services partnerships to that side quarter development this come again and

there, slowdown we'll to significantly revenues So be higher. expect instrument continued but we see a

really that strong in our from Siddhartha with TechAccess and flexible are might CapEx point a a as very or customers our mention have that the pricing pushing that roadmap be at achieving with they I'd are We this maybe the overcome offering enabling subscription and we're mentioned, point, our pricing to as sales capability like constraints execution programs, as to model. product view our of funnel we well we

Dan Arias

Okay, Thank good. very guys. you

Operator

Chad from The next Wiatrowski question Cowen. with is

Your line open. is

Chad Wiatrowski

guys? Mah. Hey, on going how This is line Steven for Chad it the

Just a wanted commercial to organization. touch the bit on little

guys You tick structuring? but see we had the SG&A. of a how are speak there in you headcount up reduction sort Could you and cadence to then the that feeling last about quarter,

Siddhartha Kadia

commercial think, transitional team are expense I perspective. Yes, we in management a and from year

be putting are each you well available in as sales on appropriate not support regional as of the function, but have now of right focused number leadership that as appropriate to we our imagine leaders success. making We only sure to supporting early application field our there specialists, can field sophisticated our demand of student the journey engineers very is technology, are as people lot service this a with this and customers’ with well other on who staff as

continue have the become enough. company's few some last of we'll consumable actually that. the you revenue, is on And a time substantial a which and had focus business seen recurring has it robust we significant as focus years, over So taken that part to in growth our into on for the year as performance well to resulting this actually

see and mix continue of expense you might the rationalize up company's as sales our expense pick an still the while structure. we of rest to overall expenses So marketing

Chad Wiatrowski

APAC. maybe thoughts on just seeing large Yes, to situation and it's your maybe that the geopolitical Still super business from helpful. speak any from the of portion trends you're Could a you coming region? demand

Siddhartha Kadia

question. great Yes,

impact in to to haven't have currently going on situation I'm do this service from seen may offer. competitor And geopolitical with to that And our respect specific have not we we company's geopolitical to business we any the offering, any world. don't climate We speak not again happen we product there. the believe any what

is we on reflected far. either not to what the across the our speak have to and might to I of are potential So, governments that in by able be any That will positioned kind decisions so impact participate results in us. marketplace uniquely world.

we far, impact. any haven't seen So

Chad Wiatrowski

some potential one and extra a discovery R&D like maybe opportunity capture question just payment maybe sacrifice slowdowns partnership downstream for And it. you economics maybe see one some with an previous some to TCR downstream do Got to upfront with to a potential? more last lucrative harp come, on

Siddhartha Kadia

the a there evaluating Look, I and trade-off opportunities to course be we made think, capture upstream. to of is are continuously

experience, and own all and time my payments projects Our a materialize. for that industry in milestone all experience is potential a this as are leader equal frankly, long not not

use us So our for judgment into on continue those of an when business to to to I impact think our take it P&L. strong is important at kind opportunities to P&L

economic basis. and on business committing a one now, deliver dependent things our one that We are XX% to opportunities not always yearly small think, said be, are a a and focused are to We going lower for our those. kind our at in of we'll gross of entire at for we explore we we business. being gross out company do Having the those space we million revenue growing deliver company, by I like customers. and become and margin our to want and winter $XX enter making that, to we in like not Right that stay clients, margin as the place actually

Chad Wiatrowski

prudence. for questions, the the Appreciate Thanks guys.

Operator

[Operator Mark Massaro Instructions] The from next with BTIG. question is

line open. is Your

Unidentified Analyst

Hey guys, the thanks on Mark, for is this question. for [indiscernible]

call, efficiencies? about metrics the initial still share you for helps quantifying and lower launch talked XXXX? think, And cost. application-specific in you Thanks. On increase that to I on those model track Is efficiency overall last an on could any

Siddhartha Kadia

that point again, the be timeframe, offered one it'll in this of that application-specific We'll Select definitely I earlier in half in has go earnings it is and verified Yes that Beacon read we globally. in launching list the can our transcript model system. think, if full model. described I QX the Beacon back to be same you question, the and the going XXXX price be approximately our believe of price

that it for a will lot and pricing customers access us our room lower more consumable However, with for the consumables believe allows improve barrier higher a model pricing We side. for technology there's that the to that our to capital. on for the be the

for So would the be of customer total quite cost ownership the similar.

do able this point to what and detail is $X us full than we've at our into to our will what additional allows it sell models. placements discussed we'll introduce of more XXXX, place been customers Investor launches And all continue price models November The of be XX with million. to on the Day. However, less and platform the in that than

Unidentified Analyst

thanks. Perfect,

understand your on premature, are it little attainable revisiting but any to I the now? IPO most a viewing be the what the or broadly of as TAM you key or from just maybe So might markets updates share time right more

Siddhartha Kadia

fantastic new It's I'd describing call. a that from at would XX just discussing entire be be going and question worthy be we perspective, at to and to a longer us like would we of that direct It'll discussion what our TAM after. are We day. management's November the that our is addressable

Unidentified Analyst

Thanks for Awesome. taking the questions.

Operator

now third time. call. further questions will Lights’ earnings have you conclude XXXX We no everyone Berkeley the This may at quarter disconnect. this conference Thank you for and participating

Bruker Cellular Analysis (CELL) 9 Nov 222022 Q3 Earnings call transcript