AKYA - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to the Akoya Biosciences Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Priyam Shah, Head of Investor Relations. Please go ahead.

Priyam Shah

Thank you, operator, and thank you to everyone who's joining us today on this call. of at Head Biosciences. Shah, Priyam Investor Akoya Relations I'm

results McKelligon, we Officer; Officer. Earlier On the quarter press financial the copy today, available website. XXXX. Brian June today, the Chief XX, ended released release Financial the call of Chief have Executive A second Ek, and Akoya on is for company's Johnny

which XXXX. forward-looking or Litigation management are future the federal call that during events, implied statements this due statements Before I'd we in make of materially of the to like variety statements. Actual begin, relate pursuant Private of meaning that performance in made or to differ predictions statements forward-looking the factors. include are forward-looking or statements safe will securities Any a results of results the remind laws, to Reform you that provisions contained expressed to within call of harbor those this Act may expectations Securities from

are For Akoya today, business, by and of only a XXXX. our disclaims the of list and obligation, contains law, XX-K XXXX, estimates information accurate XXXX. We time-sensitive consider Exchange XXXX, a with X, as intention December year the on U.S. of March be considered and whether you identified required August new not the projections call later as the filed on or factors these Events. guarantee or any that Factors archived our Securities today broadcast refer Commission, and X, website filings or section future will under the please report ended the annual the live portion in are of with forward-looking future to Risk and risks statements performance. risks associated urge financial aware uncertainties Form events revise this in and section on these any and today, to including or our Investors because for call of description of filed to XX-Q statements, otherwise. The XX, X, you conference audio of heading This be except information, the Akoya's only the is update should August

Conference Akoya the Stanley call to Lastly, that, you the and there. And Morgan Genuity Conference, Healthcare see Growth in participating I hope the will we many upcoming Brian. and Canaccord over will of be with to turn

Brian McKelligon

afternoon you, or We evening everyone. you Priyam, appreciate today. good and joining to Thank us

performance company aimed and as today's our During call, an for in our I highlight advancements, conference overview our at growth. second positioning operational long-term will decisions strategic as business quarter, provide of the well

our future. Following will and that, into Johnny delve our outlook financials, the key trends for

second We of $XX.X a are in the $XX.X performance. pleased increase in the year-over-year report revenue from first sequential quarter quarter, million the stable and to XX% million

fully reflecting quarter the a $X totaled revenue in key and the growth is growth, Marlboroughugh, instruments and the placements. In new now million, million, instruments especially sequential in to other XX% Excellence Akoya placed million growth versus the XX% $X.X reached Center the with instruments. first manufactured sequential XX% approximately Massachusetts increase deliver on across contributor increase a second Our rebound year, in to In instruments, in end pleased million above the year quarter. the for trajectory. Reagent we optimize of to totaled our year. sequential achieve first $X.X the the is line Instrument in the strategic and base objectives operating categories, revenue installed robust a and Manufacturing over the deliver of in and from an largest growth of revenue XXXX our a and cash revenue quarter, XX support completed rebound available the our ability XX second initiatives have a year half vital were revenue prior reported to of first in $X.X barcoded with quarter, reagent X,XXX internally. Service this We instrument for objective with total this the we first volumes quarter strong prior antibodies catalog goal. breakeven for efficiency all a was reagents sequential this industry, operational XX% the and both of fully flow now our molecular efforts period and a by quarter, to over of operating and the we quarter. A several accompanying

earlier, as fully barcoded the challenges refresh also now not our operational molecular noted in have and manufacturing near now antibody resolved the and year, robust overhaul reagent enabled entire catalog. Center We capabilities. availability development is our earlier Excellence First, of only but complete and faced of has Manufacturing a reagent

Our focus to expansion turn continued will process and reagent catalog margin improvements. gross now optimization,

July. consolidate the reduction the we included workforce clinical our clinical clinical end X included being goals, objectives. trials. combined recent the restructurings, on in HT clinical-grade This value field XX% using off-the-shelf features In our compared HT a actively Menlo tissue a disciplined implemented analysis XXX the for we make deliver to comprehensive antibodies growth is with core the California only our units necessary our efforts Next, support have X to market. to focus, and parallel, by Park, year capitalize let's our to platform opportunities reorganization and top-selling biopharma scalable completed closing which facilities facilities to to barcoding the mid optimize molecular translational core the X exciting sustaining of and in attributes in allowed offices in platform functions to high-plex XXXX. standard and have PhenoCycler-Fusion gold to from of labs. We return to for our P&L shareholders. Shifting and has believe this our in end second parallel, XXXX, chemistry. The more align up prospective plex, a now financial the field, high or PhenoImager proteomics corporate aggregate, on of The spatial in the our Marlborough and teams or January throughput, and emerging us markets. studies we review of of approximately with one now XXX portfolio. It used the meaningful X discovery with unique Opal stand-alone The supporting plex third-party X X-in-X HT, system, that spatial product we in enabling low it market, of the while is now PCF, in In XXX

technical immunofluorescence First, an proven for sensitivity reproducibility greater per throughput and week. of it at has samples unmatched than XXX robustness, multiplex

FDA under Acrivon, the a it therapy. We setting. partners partners approval, OncoSignature and designation been installed having HT believe to potential achieve to companion as with platform at for we is to and see increase pull-through the Fast as our it viable range of high-$XX,XXX ISO for The diagnostic. organizational base. our U.S. finally, is has ACR-XXX Akoya's designation these granted been HT, for to a design deployed coupled of path Assay deliver control and developed now and our ACR-XXX full support pharma by on for Track and a confirmation along clear CLIA Second, on device evidence with and the range this has mid-$XX,XXX the attributes to in Acrivon and low expect And annualized regulatory PCF their breakthrough the a clinical capabilities expertise the in

development. significant opportunities drug with development markets application oncology disease, inflammatory manufacturing are direct neurobiology content to and efforts market and poised address our and not like to continue in only preclinical now efforts and running, our to additional accelerate We up our we the but into

proteomic technology to phenotyping as leading earlier, identified be product ACR-XXX Market our clinical also the suited OncoSignature utility the growing driver specifically spatial X key number emerging using endometrial over this cancer benefit We DeciBio trust platform in included, partner strong segment. in discovery business and a using high-plex earnings platforms. Akoya's from According a researches volume, market therapy. portfolio the continue updates growth clinical next HT provider, in to supports call, and of lead XX% the ACR-XXX the comprehensive their deployed spearheading our trial ideally These with routine Report, publication late-stage citing of quarter quarter, we diagnostics. noted spatial biopharma the clinical Acrivon's Research clinical multiplex development the second our and several have immunofluorescence diagnostics. On on promising will total first reaching over as momentum support as Assay progress products of Phase Akoya have companion of of underscores the patients may trial -- to Biology from continuum announced increase year. ovarian the identify who from publications XXXX the DeciBio a II and the biology significant Spatial commercialization the years. for Akoya's publications prior our to market X,XXX broad This proteomic

to robust clinical melanoma. exclusive for patients enable of into demonstrated through finally, that NeraCare Oncology had therapy we a that ideally and HT be to personalized performance this identifying believe year's presence early-stage demonstrates this approval of Their meeting, significant in a China, instrument an announced melanoma high strong also only risk Society benefit from of in partnership potentially that studies. The NMPA We represent stages. partnership therapies. making and its discussions. And independent later selection has Immunoprint integration the data for hospitals progress in high-risk in the Clinical at with China. would is therapeutic assay group clinical workflows administered throughout current expansion prospective the relapsed patient the across would are usually American Immunoprint suited We we retrospective clinical multiple enabling options significant our Immunoprint pharma announced melanoma at early-stage of the TAM

CLIA clinical platform leadership programs. The quickly project-based we signal year, programs. to true spatial drug a progress also increasing fundamentally position Biopharma across rapid the significant immunofluorescence longer-term that approaching late-stage has work second trial us are CLIA has quarter Solutions pleased market up closing, the higher in markets. In development diagnostic transition services landscape. have early- the clinical and clinical the last with our HT, ongoing of spatial rapidly lab the only and use our value, migrating of predominantly our clinical within and rebound trial of the believe making our to studies, multiplex from approximately start we of Akoya the Advanced potential the the the in the Over XX% now assay affording We seen and translational biology lab, commercial and head transform is with clinical-grade

our I half with over operating will to well we cash gains, goal return now Johnny breakeven. And Given flow achieve to efficiency line while year objectives positioned to are a Johnny? top believe and detail. growth market operating to conditions, we call first of more in that, discuss our the with and second the half financial finish turn meeting our exit this

John Ek

you, Brian. Thank

XXXX was a XX quarter. Total of $XX.X the quarterly a the sequential placement $XX.X XXXX. quarter field instruments the for in As second trajectory reagents and and sequential stable is $X.X more compared including million, million, from baseline substantial a we increase was Product with expected now XX.X% revenue, and instrument a million of revenue placed first period. quarter. the XX totaled Brian second from year We software, quarter in XX.X% this at in the highlighted, total XXXX revenue for the quarter-over-quarter quarter, instruments, first in to the increase placed the instruments increase line had prior

including business in year-over-year increase the million revenue The and second a X.X% in there of instrument XX.X% XXX to which installed field million totals a the for which quarter, the annualized as range. Service of second in PCF, a and a a quarter, the HT, quarter XX.X% year field, growth the across Services totaled have first year-over-year been instruments, sequential and from PCF revenue growth our are rapidly PhenoImagers. We now us for and margin of XX.X% over to other second from the sequential the climb increase second and reported million industry-leading $X.X and have our the our in to reported the average revenue the PhenoCyclers portfolio, reported reagent segment $XX.X representing a partnerships. Gross mid-$XX,XXX of from first million Our year-over-year existing The in quarter value period. the low installed delivered in PhenoCycler expanded, and continues clinical quarter the $X.X a service totals addition year year reported has first XXX period. has biopharma million field the $X.X services increase in instrument average in in range. annualized as increase period. the quarter was profit large are a prior quarter prior growth the annualized an second million from now in in the in and second high-$XX,XXX lab primary XXX pull-through from contributors. The to sequential $X.X $XX.X quarter coupled the XX.X% the XX.X% was in the to $X.X prior as XXX pull-through of first million an compared period. HT and reflecting through new year X,XXX prior base, and in XX.X% reported $X.X combination million quarter, higher the in the in warranty quarter, Fusion the reagent XX.X% in our and Gross XX.X% million pull-through now driving studies base a $X.X

to an improve XXXX inventory continue and million our compared the of $XX.X execute second first through increases the quarter, decrease. XX% revenue in million $XX.X first second to our compared beyond. Operating mix, prior the in drive in XX.X% full were prior year to $XX.X expand efforts, period, manufacturing expect our investments optimization year-over-year a to quarter in the on million expenses our million decrease. reagent year-over-year and decrease, XX.X% operations operations decrease, and margin leverage million utilization recent we a As quarter, quarter to a in $XX.X $XX.X identified capacity gross period, in our we million the Loss $XX.X in sequential was the and XX.X% the and sequential from

operating in workforce the further first took costs to to the in As our balance we year. quarter, of reduce addition at for measures Brian noted, of July, cost-saving expenses the through streamlining end the operating a reduction actions

and to Looking year. that to if and second we the operating achieve we half exit flow committed our revenue goal our remain gross expenses, reduce can and loss XXXX. We well stable the top adjusted we cash, ended ahead options continue EBITDA impact equivalents of restricted reduce are shares, We our operating flow. significant cash to operational improve to saw and of achieve we our stock our execute new breakeven operations securities. the XXXX, diluted and XXXX. In positioned the fully maintain quarter as of cash line growth margins projections, we to return XX.X losses the of leverage with as strategy in and and the summary, are of to and first baseline approximately improving made marketable we of successfully outstanding million we progress and million second in sequential significant awards, shares June outstanding a believe exit $XX.X unvested to half the as will growth XXXX operating quarter, while cash continued from positivity including Common XX,

year, cash assessed enable top the revenue conditions to performance improvement and by with and in second our revenue along that to a while XXXX, end maintain we the half accordingly market have a first growth continued of our target. half reduced line commitment breakeven line will operating flow We top of the at return

XXXX range of million be year for full therefore, the in to updating you, $XXX million. Back $XX to to outlook Brian. revenue We are, our the

Brian McKelligon

questions. We Operator? we'll executing financial for the throughout our we we're and to hard objectives well for look at Akoyans fellow this customers dedicated up the work continued thankful drive shareholders. And of call forward as remainder point, of and for our the the you, open of Johnny. the year as forward. the business strategic as Thank our the support And

Operator

Instructions] [Operator line from Our comes with first of Bonello the Craig-Hallum. William question

William Bonello

questions follow-up here. of couple A

just one, first flow. The cash on operating the

metrics other rate or of in put can give obviously, reasons the us that any confidence us in sort of post the Are reductions, more workforce that out in, you came giving some sort sort that So at you is feel about tell of what's part you July. reduction of that you're of where just run quarter cash on there as confident July the you progress? maybe to burn a workforce

Brian McKelligon

Yes.

kind I in scenarios that positive our But what operating Johnny, cash maybe, the benchmarks? the little thanks what that Johnny, Bill. question, some those of hit think high-level a more to that adjusted just what can means as give direction deliver expenses, we Bill better a bit look balance with EBITDA for you top with do reduced and do breakeven we have we operating to do, to of talk line of flow and can on to sense. to you can and Maybe, kind controlled achieving terms now

John Ek

Yes. million, will end Bill, $XX a so rate our the way it, it. run call we the to $XX half, reductions, being look up OpEx back the we consider at of, we expect as to project we OpEx sort is how million get

run how While not specifically, that's rate. see the guiding we

we even cost the so sort -- revenue calls start this outlined highlighted, QX, that an reduced And we've some in view reduction took that pretty July, do in fully once sort gross range in is to to that we've you sort positive effort if quarter, prior margin that the use to we'll in quickly if that rate. And in QX. our in that margin. of low-XX% of get take -- within have run factored keeping by OpEx, QX can you in our used we've you this you And though also math guide we that then is of operations cash highlighted it at a get

we a the breakeven down cash blocks drop OpEx, provided, year then building just range. sort using with gross you highlight or that is what low-XX% updated operations. those information try you a to new of from as So guide, really the margin including exit to we this And do in positive the

William Bonello

thoughts sort the Sorry, you a us I'm bit then to by just little helpful. that what this caught are we they're -- what's that muted to again? little down take down could that guidance about guidance what of of revenue your not a talk confidence and you're -- the on caused point And again. That's And coming level at maybe just the surprise really bit that? seeing you

Brian McKelligon

I XX% good of process to [ step-up. looked we about a that QX typically, XX% strong instruments. rebound a going a the it's versus terms in what It's the And as walk in at sequential of we to And of noted, here, question. QX that in kind were QX we with, terms -- increase through XX% as was ] from a QX think we think

the closed we of on that looked So a last pace continued instruments. We and seen of at scale step-up our for needed trend rebound I quarters. a guess our increases realized sequential number is that the over Bill, our behind meaningful we've reagents the look it quarter was little bit the the as and at support the to half we recovery. we fundamentals, second

thought, the we so pressure, data bounce to really, scale operating our while based flow did, Bill, and proactive it with in on back macro cash ask breakeven. continued second bounce. It prudent growth. But half just around the those in thankfully, just pace to to QX, the more half we the have a that pretty a parallel much the we're able the second meaningful, of commitments was big reaffirm points and restructuring again, And going was for

Operator

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

Kyle Mikson

Really good quarter.

So let's actually guidance, go back to please. the

this delayed downside from point be to the maybe, XQ, kind now given dive nominal expected I walk of to was that the like the is good through like, Just market end of we give you of can opportunity are the excellence updated revenue to guidance little into year? talk seems baseline trial about could was but by then how like the conditions? you've recognized you just wanted are the It resolved? there's also, getting that kind of that current to related to to The then biopharma and a if a center bit. And but that captured issues fully you

Brian McKelligon

Yes.

of center So fully operational. is excellence the

we was running. So April. And of kind as of sort walked it's up into and realized from March that

it's opening So fully the remarks. operational as in completely we noted

site We excellence. kind center in remanufactured of on of our have reestablished and catalog really full present our

done. So it's completely

metrics refreshed exceeding and we're in terms Our on-time of catalog delivery, meeting customer is our KPI those completely metrics. internal and

cogs complete. And the to and is just as really and and opening working of it the focus there, management maximize a to continue So not product-by-product inventory ] to next on [ capital. is optimize then on our is noted BOMs the it the basis statements, margins phase I finished specific gross the but in also

second completely in clinical and half resolved. of So really the The it's that's pushed to milestones, revenue committed. terms

the So that's guide. embedded within

John Ek

would revenue. I expected in it's we just And We exactly what add, that really just would Kyle. recognized contracted Kyle, QX add. from I to Johnny.

opportunities kind have just take as the we be We of all if contracted the then one that found but all those fully that over. Brian's recognized us managing I that's of found And back funnel, you operational excellence, of to that the and the part point, around if add, by pluses, of some because spread you allowed weren't second center the in getting that would in there to there's half. And savings, the excellence support to in the really of opportunities in efficiencies expected will, more reduction quarter. center we also drove action of new our of of will, as were chain efficiencies sort force supply a we

that's reduction to cost so the able part in And were QX. take we that of

operational. of that that that found center Some of fully -- excellence in getting was

Kyle Mikson

to this kind already or dynamics lack extended side, being like are of kind consumables just to pressured worked on side are Okay. kind Like, through here? like exactly That of just of or revenue and the the projects of the less given line Is delta And here ordered? instrument of is utilization, like [indiscernible] demand maybe be it maybe consumable that needed or on item? for there's situations and capital product visibility what side due the elongated maybe on some much guidance of great, How was was purchase, sort then or continuing reduction the reduction. instrument maybe like guys.

Brian McKelligon

for with on scenarios a a predictability given -- acute cycles, capital in refined not got look sales the for got half. tightened refined outlook though QX, to have are coming challenges, more half, those we we QX just of purchases et It's just more given still like just second it's there, a on degree second instrument that reagent our pressures more But the we Kyle, outlook outlook abated. outlook cetera. we've higher expectations with really into rates, the Certainly, really refined faced much for a now close as

what really that's was. it So

would outlook Just somewhat given that we've tightened manufacturing now focused a now self-imposed that pipeline our say, challenges I just of more variable eliminated refined that, on variable, metrics. standard solely

Kyle Mikson

If last think, -- ask one, quick that quarter. upside to that like in And just and John, I PCF guess, number? feel that there I How I I lot the that Brian you was mid-$XX,XXX Okay. about can I is high believe you do or a a range, one the think guys to like low pull-through $XX,XXX, how pretty similar do ceiling? of -- to

Brian McKelligon

think to it, I at, like just quarterly, to it's Kyle, I at -- the think, going look to some think -- look we're you to flow continue I is I that. I to way like have

first this think on that that, first to expansion efficiencies, over we years, the look of northern going incremental over why in level, of of the into we X seen year consistently pull-through last look and workforce at just market. investments increase is adjacent rate to And year see and we just this getting versus right back years, to you continue you like and in talking what up the about -- half last and a expanding to drug content. And byproduct this that's versus first march plex look of to I XX% improvements half X If last been call, to a the continue continued the first in at that's workflow, prior we've the make expanding we've speed half year. continue development is XX% And markets pull-through. which neurobiology half market about preclinical several just noted as availability the as over

and going think at rate beyond. year into mid-XXs year continue is to from the I the So similar trend a next the

I So that maintain. will think slope

Operator

Our next Morgan Savant the of line from comes with Stanley. Tejas question

Tejas Savant

comments the transition now. sort there to of just around some having the operational you looking fully COE made of just manufacturing at plan reagent Brian, and of kind largely gone

about I pushed quarter, that year-end. milestones think you realized talked all track out here on in of first by sort be they're were the that to also

of So yet sales stool revenue elongated was leaves leg strong pretty And you the the second placements right? had that instrument there, in cycles, sort the the quarter. and come of in which third

at today, the continuing pull your any as stand you've out that forward order guide they they funnels right there here? sort And the million look into taken don't was here? that interpretation half as the support back the demand here from about of year. think that the you of $X So Is when we of

Brian McKelligon

your somewhat levels it us there So pull of instrument what to I missed that enabled resolving challenges question, quote the the and begin second part normal down us but double to placements. of And no to was to forward. rebuild I is manufacturing think really do enabled reaccelerate and returning pipeline,

placement of kind quarterly the to so. approaching our and standard close year instrument is over average or last XX the So

Tejas. and of forward. So resurgence. answer part the second it's Did missed though, recovery your that question? your not It really I a a pull was just a question,

Tejas Savant

of what XQ makes that cautious Yes. back you placed it more in No, I it relative year? mean, funnel half the the incrementally just in the to is you was just

Brian McKelligon

even Oh, I just contracted. a accelerated with that have of terms it's understanding see, It's the cycles, that with ramp pretty with more aggressive. relative not respect without in being recovery, instrument the sales ask our the to the vertical placements reguide, not

Tejas Savant

Got it.

a to in to way cut its a what bit then of year-end sheet recovery the and light looking the That's to drive are that XX% you share to headcount [ color recovery? And then gives the year-end. it its you as need question cash lean you're up. sort morale, options you to tomorrow we're have relative at that just you confident sense, helpful. us that on around you're little organizational ] the think about some way that still around about growth, can that you I Akoya can flow you like by track right, you get a confidence as breakeven and picks what like for the here? But 'XX, it riff into going of And the talked is And to fortify are -- what get balance macro give cut how Okay.

Brian McKelligon

Yes.

R&D the former, I'll what the Johnny have a to let difficult really and qualitatively, any speak streamlined both and latter, of organization. we done the we terms is restructuring, consolidated on In you it's And choices. activities time That the drive do continued to was workflow always and a have really our to the in development operational focus really organization, make consolidated improvements. development the you and product of reagent realignment. Look, functions around

find profitability. But example manner But happening a growth strike much that to actually a what's do of have in between place investing to given to contributing and reality. we high tighter a mute always felt ensuring coming we had it a to meet was balance ahead. just in to level, feel just return we're in out profitability. the really QX, to driving yes, we continuing and given where in growth the a environment, it's of way driving the know, a We like investing cutting that and to there's market today's but certainly really given where growth those between As trying a to our a That's to we to had were we trade-off in -- like where of kind structure great you organizational don't balance We we've choice feel growth. and at And bottom growth, our we line now were got goals. We today our balance right and trajectories growth. between in QX, go Johnny really profitability. strike in

John Ek

you is end, if -- again to the to Brian to relates cash and again as flow last we've as with then kind next up execute. At to time, low-XXs maintaining into we to debt feel allows positivity, at flow effectively cash showing the moving a to And streamline with quarter. settle baseline sufficient any cash, a cash again to, year-end, your growth negotiation, this year, exiting to we to we that others position cash have work different half P&L our stronger sheet. it point year, different with where what breakeven to execute so where just into turn with approach next and partners in as capital balance burning when -- a growth -- important corner. And future. and to needs our different gross been have yes, us same as has and just back at puts that able able we're the the that this year, us which the get cash half than $XX OpEx need we're prior years with a that we in next in do to we in much and it's quarter growth to continue continue we've cut driving to cash But got alluded strengthen from to million balance sheet, the the us the to we under it position certainly, you're very burn OpEx margin is we're of a And that be really,

Tejas Savant

last Got me, one it. for And Brian.

the an what us and give can you're right, evolving, in irrational out here, landscape Because on certain themes competitive pockets you just seeing the there, market. has the of about terms think you right? pricing some of the pricing pricing sort of environment in updated one snapshot been of of of just in the sort second so and pressures incremental where see quarter both we As

what as sort guys that factored of to And extent is into are you there? Just the to curious what guide? seeing

Brian McKelligon

really terms a -- good example, ASPs would not It's say, of it's really about, pricing pressure Yes, on I in for question. instruments.

it's manufacturing with running not is that we try into and of interesting, a really least in of in created to a minority had routinely take resolved, opportunities cases, I only geographies about, think Kyle in of head-to-head of in kind are every for that's think And in at others we asked would That's how kind say Again, direct opportunity sales as it. step But fully Tejas, winning now. where window head-to-head case. are share. we're those happening market admittedly seeing across we looking competition. And I I to with was at we're we it minority that challenges QX, a what of direct competition. the

why is our of hearing the some head-to-heads -- winning And higher the least because we're we're at plex. that those of reasons

throughput. super imaging tissues for the important for and larger increased or large customers, is fact, the per In tissues slide multiple area

some for I PhenoCycler-Fusion then think and of of are why we think, a the X-in-X those high-throughput value in So the the as system addition high-plex big reasons we're to, winning discovery validation.

in I Tejas, position. this But that we'll So competitive position how a year. market it hear the wait again, pressures we're feel we continues it has the shifted to like that us, to like feels like strong feels think, pretty through of maintain kind for us, to But our in all leadership favor.

Operator

Piper next Our comes Westenberg from line David the question Sandler. with of

David Westenberg

that is kind for the to a the recurring is guide, investors it think And -- I of sorry, lot of of but the on focus here. area theme on going be

analysts think the to have other just of gotten some kind So sales of here. cycle I the

then building in So versus benefit the is have there I'm trying was in that can from, out I'm terms actual I you terms the quarter talking maybe X gotten the ask that in visibility that disruption this in remind from cycle? to want is a of funnel sales question or actual things. last about lengthening have. -- you've funnel the of here, sales guidance just us cycles the typical different of the One the based on on Tejas' you placements. And figure to Kyle's course, the in just question build the And any instruments on build of actually you quarter? what

to that was going I'm I know question, promise sorry, one but I one follow-up. really And ask a only

Brian McKelligon

on Precise, to challenges up artificial numbers what represents historically. the bump sure expected that the a doesn't instruments we would us the have we from represent So just a without to I'm in relative XX like is path magnified instrument sold to to returning you've this step QX. seen make It function quarter --

artificial bump reagent because funnel. But us. an funnel challenges does either of the it -- wasn't the it put So does in deepen, closed the does it does it resurge, we the widen behind terms opportunities or of the resurgence

each build speaking, the directionally something funnel we of to from do that takes. that's in little days terms able bit I that X gone, you're will longer. of precise -- number a have to a face the David, numbers, proactively of to And more tell X Now sales product months it's in you cycles that I

itself So the hopefully, similar wouldn't simply say to with cycle. QX instrument the just that lengthening. would to quarters. QX funnel in and saw question the characterize what are in the answers I cycles and prior respect your I we lengthened the quarter sales placements, current sales

David Westenberg

like of just then have lot covering. it. ask really that a analysts since a long and was one short And one you [indiscernible] Got I'll

half-weighted with transcriptomic So -- remind a than, I commercial. seasonality? ASP to just profile with and back do different terms budget have a way in us academic and of peers But that anyway, terms your that can quarter then you going flush lot have of peers. quarters just of in know say, fourth are you your

can any just we way about So that think seasonality?

Brian McKelligon

end the the Our the typical QX smallest, -- QX seasonality. QX similar. typical and between high and is seasonality QX QX and generally end. largest, QX low are QX is QX and typically are is and the similar That's and The QX the

up and how That's David. and you tiers, X it. QX, almost there's QX. then at then into QX So QX look should

Operator

JPMorgan. comes the with Rachel question next Vatnsdal Our line from of

Rachel Vatnsdal Olson

either but been a to trends you guess, can of I there like here? I questions there's you little walk be trends funnel saw aware to in wanted that we you falloff just further guidance the or here, down this know that on June sounds a saw Obviously, lot kind order some some continued quarter? that late happened bit the guide of of that or it of suggest throughout dig July momentum. it. But us need on through I any sudden was

Brian McKelligon

haven't and we good any question total this X, sales call doing intra-quarter. you're this instrument is half, and lot particular almost a for XX% you're the years, life typical third particular David between, seasonality. really our within that quarter, of your with question. of and your sciences X it, quarter, instrument the around what XX% And about month from that's that see, talked month we XX% of revenue. quarter. a doing sometimes Yes, within pacing And total within XX doing Good month market, But quarterly any of typically,

month through month So intra-quarter, you have not have you X trends. but only X seasonality,

really you on so quarterly performance get And that the third visibility month. your within

Rachel Vatnsdal Olson

But to bit helpful. That's a it. further. maybe just Got push

did reversal month and that late So did suggesting down? Like, you was that coming the throughout anything trends into of slower in July even just actually that getting pace in in you early June had June? expected? worse that's guide this the this a late this some or see you happened Or see actually of materialize than

Brian McKelligon

It about the at was looking great of close a of breadth July June just, it's question. just It's pace. and closed we pace. again, pacing That's No, just then as into the really going expected all math the real funnel of that our doing the that. funnel, top-down around and in and a forecast, funnel, number and bottoms-up of given and the conversion the opportunities the growth metrics the rates

of what instruments. at second we expansion So the looked funnel, funnel QX, of the half informed pace is the expected how on the size the

Rachel Vatnsdal Olson

that the helpful. you've pressure follow-up, capital That's terms mentioned just of Okay. abated. budget, really in there Then my just hasn't

seen to budgets. for headlines and on be We've academic So the a around weak us? can pressure Pharma well. government obviously bit some of you as unpack continues that

better did get do then segments terms those this And of quarter? you or see budgeting customer what So any in across dynamics of key your worse?

Brian McKelligon

in So -- I it lines, no ways. let say would material shifts take me but trend X

government of projects contracted So we consumable was more our a trend. system kind biopharma academic setting. was and utilization out was of a pretty we CROs. more and strong bit internal system the to utilization little The come as actually a that That's of more CROs in biopharma trend saw. and saw That

seen in settings, consistent CRO just and biopharma, both academia others utilization, the of similar some side, from talked system what and commentary challenges you've to we we that the still with lot within a in I what like the But capital well. about prior in think do saw continued purchases the On quarters. on as I see pressures instrument

Operator

of comes the line Nambi Our Securities. Subbu with Guggenheim from next question

Unknown Analyst

Ricky ] at [ is on Subbu Guggenheim. This for

in China. mentioned You the NMPA for HT approval the instrument

And then on us quarter? China in the some And your you're the have saw second in how peers rest challenging. also in still of encouraging thinking environment you Others in said of Could color have signaled for some about China. that been the year? please trends the the you guidance it's provide

Brian McKelligon

Yes.

NMPA have work of the there on impact to study. the we immediate utility in our it's so partner the -- approval kind validation going not clinical and really nothing to -- with So up China any as gear instruments real

term of more a longer that's on side. the So clinical

RUO that no until a -- the are China. number realized and of change we or while there's going of On quoting And to XXXX. impact in increase material out, has a stimulus. real in really really material talk the be been lot seen think a gone don't side, have RFPs those about There's been we the

Operator

line question Mark Our with the Massaro of from BTIG. come will next

Vidyun Bais

Vivian for Mark. on is This

sustainable you Just we've of edged as kind to normalized this to here do QX. You think that [ placements, CapEx in a more of clip gotten as far ]? range XX XX

services from in going So get understanding additional you just expecting that that comfortable forward? more that granularity continue confirm, aside to us And is your that with any new this $X guide half? will the just back million to you're can it in share help the

Brian McKelligon

Yes.

half similar QX I some in obviously, QX. certainly -- improvement, with think, we expect, as think But saw we'll into see, quarterly. we the into I second don't of as in as we get we as with discussing incremental to the were we the guide we David, second trends qualitatively, half, seasonality look the kind

look I back the of you average saw or begin of to get do instrument as into think improve on QX. you to do of particularly we as number incrementally last I the kind think continue placements at So that, kind we year,

hopefully, answers Vivian. that So question, your

Vidyun Bais

Perfect. Yes.

Operator

question Tim Capital with Our next One. comes line Chiang the from of

Timothy Chiang

July. headcount? Brian, relative is I any could this revenues about restructuring you smaller to more the will there is granularity impact Johnny, any this third year? you this have reduction mean in restructuring provide? January? in restructuring sort recent quarter of to a the big talked And this in guys How this Was

Brian McKelligon

without able been accomplish of the impacting kind business. the core To restructuring think to this we No. latter, we've

saw was the very the terms I For you'll example, QX. but the way. restructuring what would you of think charges, affected, in -- of the see in our it kind Tim, commercial be team similar what significant of to in carrying revenue any And portion slightly not

a So was sort we didn't at give the specific number of it but similar scale. of employees,

Timothy Chiang

of Johnny, to mean, margins get I the in you get by low-XX% Got it. What your gross flow And for cash one sort you just year-end, to happen? need is to second tweaking maybe Johnny. follow-up placements? margin to more needs get get of breakeven is for mentioned has done quarter the product around, what, the to low-XXs Or there to from the gross up you else year-end? into it anything just that XX% by range.

John Ek

Yes.

built we gross It's carry - they question. each revenue, of got margins. different our as components kind out good So see can forecast -- we've revenue of and the

And so to do of it. the with mix revenue the has a lot

some service of business contracted of kind strong has our Some revenue, milestone-based.

to instruments strong are margins, lot want absorbs holding in and kind of a know back center where have low-XXs. it getting really Our be of which to of which should excellence. in-house of us reagents to we we establish it our the volume brought visibility allows costs be, revenue the that into It's that and about

channel, And expires the so inventory margin, utilization it a is natural in something et on the and expect, happens, it -- one cetera. if with of as obsolete reagent of it better inventory, you that becomes or weights if might

visibility have of like manage that be of because in you really business much expiry we we'll have from them natural difference when et bringing go-live have utilization it case in-house a carefully made expire, that issues. to couple ability ours, the reap of of quarters sure a allows the get have so you have it's to out don't inventory, to to so that cetera, our meaningful you all any you as the the And make center a reagents longer-dated inventory, because able excellence the to us benefits better

with so expect. much we and And as a that to margin. historic our excellence, on that's that expansion historic been us -- much, And a weight allows for allows it that always we live been our margin better, of manage that has go center

Operator

of line Our from Mason the comes Stephens. Carrico with next question

Mason Carrico

so one. asked been keep it has A lot I'll to here,

dependent out that on the that standpoint? can target, On range the from highly is a you've any you target you the guide? breakeven levers flow breakeven cost additional cash have forward in laid Or revenue this do pull going

John Ek

sure say really good it's margin. given the and It's improving targets. revenue hit important to revenue, would stable we very that making that's Certainly, I our X gross have visibility and fact things. we the

capital visibility is working majority OpEx, know working we well capital, have obviously, what really OpEx. It's very We our as a result, good our pretty the We headcount. of predict really how timing. just And as moves, is. spend and that's to headcount our can

it's it's AR, inventory. it's know, AP, you of use As the

then us of revenue move could positive or on absolutely. and negative that other that it, breakeven the So is piece target

that really those are breakeven. the X on So movers

Operator

for to question-and-answer turn to That remarks. I'd like closing session. concludes the today's McKelligon call back Brian

Brian McKelligon

would thank say both all our the second strong and pleased top for rebound We listen, half, that appreciate all time. just Well, we're with second -- I quarter and in a your in the meet you our closing, looking I bottom simply put for goals. questions. to line

looking So to your we thank for you following all forward and time up.

Operator

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

may You disconnect. now

Akoya Biosciences (AKYA) 5 Aug 242024 Q2 Earnings call transcript