MRVI - Earnings call transcript Q1 2024 | Maravai LifeSciences Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2024 Maravai LifeSciences Earnings Conference Call.

As a reminder, this call is being recorded. [Operator Instructions] I would like to now turn the call over to Debbie Hart, Head of Investor Relations.

You may begin.

Debra Hart

Good afternoon, everyone. on quarter us earnings joining for our XXXX first call. Thanks

that release and call and press accompany available the investors.maravai.com. website Our our slides today's on are at posted

for Slide on a Production; with update, and question-and-answer Nucleic Chief guidance. and the our our for can Drew provide review business our Commercial will Becky join results you will first Buzzeo, the see today As the following Officer, Acid on prepared financial X, Kevin Burch, Trey you of call agenda session will and President remarks.

forward-looking make call, management possible non-GAAP of statements today's differ GAAP more refer During statements to measures. results Slide financial on and actual financial will from and is forward-looking It our to and We expectations. for you measures. use refer management's could non-GAAP X that detail

may issued on just Please measures. for refer Our the to release risks performance reconciliations the comparable and our additional press most SEC GAAP directly that and financial to impact filings information operating conditions. Maravai's results, also provides uncertainties

over the I'll turn to Trey. Now call

William Martin

you, everyone. having for join us We call and afternoon, today. Thank you our appreciate good Deb,

few me call updates the briefly some a highlight new before we Let are provide and turning quarter, products the Kevin. over introducing to innovative recap business

call. a we quarter. for on of fourth range shared of with our EPS for and results first total $X.XX that X. conference Let's diluted revenue start reported revenue during in fully the quarter Slide loss with million in our exceeded we EBITDA expectations adjusted in results adjusted quarter $XX Today, QX, QX million you the $X

go $XX this in Safety more in $XX first detail these BST later the million of was Testing growth QX call. Kevin the revenue first on Our Nucleic revenue QX. in of will and XXXX. Acid The of Production our since for into quarter results quarter, had Biologics million was segment

to of facilities. the on shows free was that the cash equipment adjusted GMP Cash in at and the from million. build-out $XXX X year-end our $XX with million, for X hand down quarter we $X the end million quarter progress continue Slide Flanders installation new was our flow as

is maintain our organic puts growth a cash great we external in This position net long-term simultaneously position. us gross. fund pursuing investments M&A. a strategy $XXX Debt $XX to partnerships while million Thus, million through and/or

we to We to potential responsibly strategic continue see our in will capital. deploy where opportunities space our multiple endeavor

our space As business, we scientific for To focused the we that today, sit here in market growth ways evolving portfolio, in product the leadership rapidly mRNA customers' strategy. support expand our to our our remain long-term we needs. return our growth introduction sustainable on advance expect to innovations of to continue accelerate enable and

product expansion our some X the our Acid segment. and process. in To IVT in In of to announce our mRNA first Production portfolio on updates on our toolkit that turn I'm and Slide now of used let's enzymes the product enzyme the majority portfolio, innovation, point to focus consists Nucleic happy

increased activity the customers trademark products mRNA with catalog We XX new reduced industry-leading at our Alphazyme. through to experience our capping, RNA of our industry-leading project TriLink This addition incorporation modifications base enzymes manufactured capabilities decades Discovery the Group. an leverages and in workflows of manufacturing in workflow, and CleanScript, as Incorporating we TriLink provides Alphazyme high-purity over our into enzymes toxicity. with launched mRNA recently mRNAs from which mRNA

NX-methyl-pseudouridine. from projects. in best This use With programs. to we've programs to mRNA other from that their As customers or to MX of advance the to these with new their to enables catalog our LNP of they system optimization, discovery advance catalog customers mind, mRNAs chemistry the rapidly their design many CleanCap launched look mRNA delivery need outset offerings and

us our highest enhance to of expression. In and reduced using CleanScript allows purity vivo [indiscernible] the in that catalog products CleanScript production can entire deliver we've refreshed version the latest protein the double-stranded process. addition, have IVT RNA

announced with catalog We constructs. are doesn't support programs with move customers research these to engaging intend stop we innovation and discovery more The as mRNA launch products. deeply forward, we we newly products with their many as custom additional

to Turning X. Slide

continue leadership the use analogs mRNA partnerships. into to Lonza mRNA strategic supply III to from nonexclusive TriLink space development We Phase Lonza's through preclinical bolster entered services for market our global manufacturing CleanCap a with and programs. and license for in agreement in

see They've important the we leaders of to enable advantages for and to us CleanCap our world with bring as CleanCap, is market their more from one Lonza producing for many customers an drugs. partnership portfolio the into elected of technologies. seed this benefit the biologic to to

We believe unfold. and manufacturing solutions endorsement services regarded partnership way CleanCap in our to Lonza's mRNA. are development this And decision is strong a the excited we to their highly produce is optimal for to that incorporate

with Alphazyme necessary will collaboration Applied terms scaling empower Polymerase. enabling scale scale the growing demand process a for research the to the RNA commercial platform. the manufacturing DNA of agreement, polymerase announced the of manufacturing perform for IVT from Alphazyme enabling current Linea Under the the their Linea to scale-up its development, manufacturing, RNA company's

forecasted a process and their growth. have DNA. demand and We production made Applied for enzyme breakthroughs fully to We're manufacturing able workflow full help support in developed the their enable

with We key accelerate and to a indications research technology latest a address technology. academic custom nucleic applications, the to market currently We of scientists demonstrating active academic top-tier enhance partnerships desire partner and foster to adoption disease of institutions be innovation acid collaborations X wide our medicines. have developing the to to range also continue next-generation

and driver partnering creating key value. with product a long-term new for We industry believe that investing leading academic and in is partners innovation

adoption. win position for to customers in an product exceptional are and early We technology

which to reaction producing clinical scale in used mRNA. as a Slide tying in to commercial the the part our is position innovation inputs we're well X and IVT to our strategy, of process Turning Again, return the a unique as critical of production growth. full

opportunities workflow. is overall luxury a drive several we it mRNA that move field forward As in new mRNA unique way. the see product helps a to the innovations production, process to we This work manufacturing us in and to improve improve

our CleanCap NTPs, materials to grow can needs. with enzymes us pipeline, earlier our with our GMP early clinical commercial putting to our them customers on include with in either in depending at raw technologies, cross-sell the CleanScript By the providing and position their later-stage or a This stages other and RUO support of can process discovery development. team their winning materials

our exciting started commercial has positive to efforts This and year operations the from thanks teams. business momentum, with

evolving team and is GMP continue is for important expand day that as us. and X It activities and for to have great progress We our and customer experience funnel customer with offer building offerings. we unmatched RUO customer made long products as commercial the and services we in between our flywheel an the as building from our

Our strategy. tools to enhanced processes the build help to support talent, team has growth and Maravai X.X commercial our return of in

to under Biologics segment updates Testing our Cygnus turn XX in brand. Safety Technologies Let's the Slide

As gene acid efforts class to growth and to development the this with enable market innovate therapy Cell has in other support products innovators their customers. continue experienced to the segment, nucleic tremendous new improved medicines. worldwide and agencies we our of to bring continue to as regulatory FDA

kits products. regulatory agencies gene have of and XX XX CAR-T And global now Cygnus FDA-approved the other approved proud support therapy and therapies. that FDA we gene all cell cell are very The several and

safety MockV enables Companies that without recognized for Company's the Most This safety faster, retrovirus-like detects easier and kit, kit, be Cygnus cost-effective can in Maravai products. The and Biotech that pleased to containment among also are prior more trials, a surrogate biologic be produced manufacturing commercialization. measures. assure viral Fast in XXXX clinical run uses biopharmaceutical our which regulatory as extra Innovative noninfectious during optimization human of virus-like which to particle, of and approval clearance can RVLP was We particles drug

and This the adds has kit market. clearance our We the introduction recognitions RVLP MockV very about many its product to the award ability remain disrupt to since optimistic received viral in MockV XXXX. the line

technology through As segment, the biotherapeutic services ensure development to and and regulatory improve and supports the our and customers' improve we therapeutic to gene continuously technical biosimilars needs. accelerate meet the BST antibodies, approval safety the to process. Cygnus catalog advances support, monoclonal cell of and of highest superior movement in offerings comprehensive therapies consistently offerings most and new and the the quality our to NAP in products plan

to and facilities moving XX Slide our update. Now

you to report to are pleased X molecules. is we molecule produced As products that facility quality. migrating GMP aware, many CleanCap Flanders new of our MX first I'm our small for engineering GMP new in our and site GMP quickly have small manufacturing are the of batch

inputs into for the approach customers and lined have as CleanCap we analogs manufacture the well anniversary other are have are move to NX-methyl-pseudouridine, X for now we molecules. up as adds MX the includes GMP MX scale launch, as needed X clinic. Flanders As mitigates risk redundant the to such mRNA MTPs eager which CleanCap This GMP-grade production. of small batches MX and capacity as operational year as

This chain U.S. not our designated only pandemic aid X in will is bolster the a government Flanders to resilience. preparedness. facility supply future

are Flanders drug mRNA of Flanders in the and We hosted through requirements April late-phase development medicines grand mRNA-based now the to phases. production. opening designed for officially in was all cGMP our market X X meet manufacturing

programs clinical drug or enabled through new over have filings. investigational from We IND for years XX mRNA discovery

serve Our drug clinical new mRNA with our will substance manufacturing. facility and commercial partners late-phase cGMP

prep an dedicated facility clean great buffer rooms, XX,XXX-foot includes a X and area. The and C staging manufacturing fill suite independent

release and supporting X life-saving developing. couldn't We to help to have doors be the control, enable on-site our monitoring batch and gram We testing excited sizes. our open customers EM are quality XXX-gram more medicines

with advanced I'm Phase can II, that asking Phase our programs of customers their we Many into now team beyond. stay our been them. III as to so clinical pleased and have talented support And

support know our we or a will clinical have at will this batches. easier developers batches select it I is Phase capability partner a fact, can development extension even that work of III first as for II commercialization. beginning Phase support already a Phase statements for preclinical trial signed drug their make they to of believe them to they have We and In through who stages us the

innovation We history have long a of mRNA. in

process these production. enable our of Our innovate significant investment next medicines genomic underlines to the the materials X the in their and that producing generation facilities for raw commitment

in a expertise vaccines This The facility and develop will expands as to of the underway key discovery development partner, unlock our customers. important work and capabilities to help Wateridge act customers to and the our providing life-changing therapies. our potential support [indiscernible] continue mRNA

XX. Kevin more our performance of balance first to details I'll on ask Kevin? year. and the now the for to provide quarter our Slide expectation Moving

Kevin Herde

year. quarter future. for results financial financial then for for Today, we a with I about foundation remarks, solid laying the reaffirmed Thanks for top and the handoff, the are Echoing performance in excited that and our our business summarize the accomplishments our the QX Trey. line Trey's will full are discuss expectations pleased

on results financial QX the Slide XX. with start Let's

the As Trey for million. mentioned, revenue our was quarter $XX

GAAP comparable million quarter net quarter was before million compares loss interests the $XX for to a for net first of of noncontrolling XXXX. the Our first This XXXX. of $X loss

was measure, XXXX. non-GAAP a $XX $X million EBITDA, XXXX for QX Adjusted for compared QX million to

EBITDA forecast we for excited adjusted internal to XXXX. of Our was was the in partially timing for $X quarter EBITDA new QX lower readiness which million, the costs This margin tied margin period facility, about. some are XX% about incredibly slightly operational our adjusted Flanders by

revenue-based XX the For the the will adjusted EBITDA proportion X million. facility-related adjusted primarily high given revenues, on costs. on any low our margin or XX% and of quarters trailing $XXX labor was costs quarter EBITDA last relatively margin and given Overall, revenues in based vary months variable our of [indiscernible],

to As previously initiatives. XXX ended XXXX of at of XXX And to related completed the reduction the XXXX. and Slide our over course the all end see the September quarter and we employees we it we full-time on our XX relates with to you'll of QX employees discussed QX prior had compared cost actions restructuring XXXX actions, labor

profile. eye reductions our and an operations at we structure our look in the continued in to includes This current least investment future. the to NAP G&A partially to GMP that innovation, by we commercial evolve operations the our forward, As continue team demand and organization targeted are balancing infrastructure funded with

growth to continue structure. opportunities funding maintaining while on focused be a We future cost-effective

tools. revenue us XXXX for for with under science metric expanding of amongst per employees, employee coupled Maravai, in million efficiency forward. and the operating This, moving is per just capabilities our life positions broad $X.X best revenue employee, well a XXX which With is in

I [indiscernible]. will segment by discuss in EBITDA

share quarter loss and EPS. first for the EPS share was EPS XX and Slide of Adjusted compared loss a per to diluted for quarter in $X.XX Moving XXXX. per of first a breakeven $X.XX Basic QX. EPS to of was the

cash the quarter financial in net other $XX in the a Slide XX. We Moving and and $XXX million flow year-end million debt, sheet, cash with million cash forward $XXX metrics to balance ended position. on resulting long-term in

free free million adjusted cash $X the capital measure, of EBITDA quarter. in were respectively. That non-GAAP flow, for calculation cash less flow million our a and based $X the which Adjusted quarter, $X was on million is adjusted expenditures,

XXXX, cash net the payments the retention with acquisition. in associated of million primarily in BARDA expenditures, Capital were quarter. We buildings. in of anticipate of the QX quarterly QX $X year, X-year capital For planned reimbursements, corresponding used to our operations outfitting XXXX $XX $X was our MyChem anniversary associated million with the final million in the peak Flanders stage of expenditures with this

better net our on interest values, XXXX will our shift in amortization of which income and evolving cash and quarter, downward as $XX previously was in quarter, yields quickly based Interest million slightly million as our expectations expense and high line higher with excess cap is $X Depreciation that expectation guidance. interest maintained in was the rates stayed than in expected. expectations previous as the contract rate not the

time compensation, fully of million B with was line the We A and our shares expectations Class for converted shares million outstanding QX [indiscernible] March same Stock-based versus at expectations. million shares million our total flat of a line in QX a and a XXX outstanding noncash outstanding XXX the the with ago. end Class year ended quarter, charge, for also for basis, XXX on with in $XX

XX Slide in the quarter. to discussion performance Next of and segment the

lower marketed previous services TriLink, our and quarters EBITDA lower quarter our first $XX Research revenues Glen and of million, adjusted segment, over Production Acid Alphazyme the XX%, million and GMP and as brands, Nucleic includes a had our based base. products under anticipated margin revenue margin level both discovery Our a in $XX cost which on than of of the

strong million includes the margin consistent XX%. which had quarter segment, from first Testing in adjusted $XX a Safety and Cygnus Biologics $XX EBITDA adjusted our of EBITDA revenues and brand, Our products of million, of

expenses these in the of adjusted detailed a to XX%. margin combined prior segment $XX for of EBITDA million was results, service operating shared the As segments XXXX, our QX combined corporate

expenses expenses, the human $X comparable down legal, such million service accounting, functions being quarter in and EBITDA, from company, resources, with shared associated includes finance adjusted including impact as totaled and centralized which incremental Corporate the of almost first a the $XX IT million the quarter, public first XXXX.

current on existing the the revenue solid year revenues. to XXXX $XXX on $XXX Slide outcomes, the we on to to XX. Let's total our of full move and with Based comfortable thinking around assessment in year start the revenue guidance of our million XXXX range of of likely are million range

segment previous expect the over first Safety for BST Looking $XX range the the high segment. the $XX year for printed an achieving [ segments, we quarter, estimated the for at NAP $XXX year, which million this mid-single-digit overall of to Biologics Testing the for this strong taking $XXX as load XXXX. year, business see business ] a million be million mark with $XX will and quarterly million our consistent growth years we million, around this After of roughly XXXX

about result revenue, cadence results, the midpoint full in the estimated half the to up and based the so. first of quarter which, for year QX from carrying at estimate of second our would of As $XX year our estimate the or previous the on now close XX%, range expectation revenue of of year, XX% we a million

solid we sequential past. the from We margin the have and in revenues with firming after in seen the year. So will balancing second anticipate up that expand the top QX increase as first and half the we see line a start of

metrics profitability of margin guidance, same EBITDA We see a range to expectations share initial to year the within our per adjusted as range of our our full $X.XX range $X.XX and loss. the XX% XX% per adjusted the in share of EPS

count and to $XX Guidance item $XX shares; be the as to XXXX: an XX%. amortization we million converted XXX also equity-based million; reconciling saw million effective tax of which non-GAAP expense expectations between interest million of share income compensation, as-if the adjusted EBITDA, following rate million; and of holds net $XX fully and GAAP between and from in $XX and to $XX $XX between million interest depreciation million; be

net the Overall, in solid to Finally, million $XX of to XXXX. a expenditures capital year. million start $XX

to I'll now turn the call back Trey. over

William Martin

Thanks, Kevin.

up we on the to XX, in Slide we against guidance wrap So to range start a had you tracking to solid and March. are the year revenue that communicated

significant our manufacturing entire our and have in these facilities as our leadership and innovations across workflow production at strategy X high-value on executing capacity as are introduced to We X market growth the TriLink year-to-date Flanders increasing the well return that to extend mRNA areas. further new Flanders our

strengthened in partnerships. industry have our team commercial our the and leadership to mRNA We bolster also key market and through academic space continue

continue Research, unique Cygnus to boundaries problems better Alphazyme fields the Glen advance to lead while TriLink, offer brands Our discoveries. customer their to and all solutions and pushing and solve of even innovation

and opportunities positioned Our vaccines. customers provide remains position investments for We novel on customers in strong, execute balance remain the fundamental are development of bolster confident inorganic life-changing market our and and markets solutions. our the diagnostics well of our end we to provide value the our drug additional therapies, with sheet we for and strength to

to sustainable are for strong committed of businesses. growth foundation the building We a long-term our

to like back for line you. the Thank to the operator questions. turn to I would now your the call over open

Operator

with [Operator first line comes And question your the Craig-Hallum. from Matt Hewitt Instructions] of

Matthew Hewitt

strong that kind walk flow through a be the would ramp order contract. kind there? an Just kind you relationship up, time? relationship? on then over build bit. that congratulations that stabling from and that an us little of it Or there is help Maybe something initial on of expect we about to How start Is will of of first the Congratulations year. thinking Lonza the the should

William Martin

The Sure. to is development to Thanks for just with we programs the CleanCap to similar all announced for open avenues others make other question. sure arrangement we've customers' Lonza we technologies. our want that where and

might guess, that you it's typically. time enablement ahead that are particularly several will an contracts you particularly instant high of negotiated an see start where the As these It's that in services things take not level to build, quarters operates are time up. moment Lonza and at GMP

our ramp to technologies, many So the producing again, are idea expect are we in incorporating avenues a the is would that consumption. whether we toward others make or sure are. But there

Matthew Hewitt

And questions getting from I've separate impact about then if, fact, have and becomes impact business asking House. meeting And of like would investors a Biosecure may been your it a on great. that sounds follow-up maybe businesses. the law? may respective just curious, lot that, question. there's week with How next markup that That's not the Act or a that I'm in

William Martin

definitely about this. lot conversation you say, law like there's not yet. a Well, And of it's

business As majority And the have new able in to into significant we've we from as looked that. would in it we like proportion and things, at across of and think lead equilibrium the And participate our CDMO we essentially services, U.S. to be if go to we U.S. are of perspective geographies. would a something were a Europe. effect, that Europe,

Operator

from of Savant comes Morgan Question Stanley. Tejas with the line

Tejas Savant

you question follow with color just on just further win how customers volume from other inbound? deal want Did Maravai? pharma they Lonza either that all? Trey. commitments it does discussions this I us as unsolicited to contract any give an chose up has the And Was consider on sparked or minimum some come at about? Lonza this alternatives And with came Can earlier, CDMOs?

William Martin

questions, Great Tejas.

is are discussions. actually with to Let Becky, hand who directly that over us? me those you in involved Becky,

Becky Buzzeo

Yes.

structures -- as the have enable broader part realized different biomanufacturing to I are with driver there GMP many We customers choices selection. that we have. channel are a very for adoption look, there partnership see that materials. strategy really all capacity, CDMOs and CDMOs and So of and good of certainly, expertise many to are and [indiscernible] a that the choices CleanCap, we And different this of desire our that think is

Tier with have looking contract what CDMOs us. we're build that And have partner desire we X So structures a with to yes, with enablement partner is to to do them.

really path agreement And with mutual X easier. there's the as of in customers have to typically that to use wanting so make a and have bring CDMO a then around the platform CleanCap streamline it activities for and a glide companies between technology and ease

Tejas Savant

there you That's for And Got capacity what's still that or is Is color. to one the the at backlog of up Just San over of help of think work facility sort the business there we super opening it. Diego here. there of of expect potential already us that's revenue Trey, then, the helpful place the you? a max site. time? book building on of the ramp utilization through And ahead sort can see in

William Martin

color because have because the be of in to will more opening Sure. infrastructure definitely who capabilities has late-phase not no give of hand some to did There is had Drew, from small until clinical a buildup we the been the point I you -- and part an it But living this there. life view facility.

Andrew Burch

We orders builds time. taken Sure. It that grow first you expect, funnel to contracted -- But as already we to have the is late-phase continue would for committed our a we expect facility. facility. over it's do we have mRNA -- for have

Operator

of Leonard Dan question next line the comes UBS. with from Your

Daniel Leonard

fourth unscramble can grow did best what's non-COVID base the nowadays. business gotten quarter? to egg business, So you the the harder it's Acid COVID sequentially I Nucleic know But versus between with the and the did non-COVID what's tell, that as Production,

William Martin

quarter. fourth the Versus

Daniel Leonard

Yes.

William Martin

non-COVID you're sequential? Well, and saying -- QX, QX base QX

Daniel Leonard

efforts unscramble Best that. hard it's because know I to

William Martin

is. It

Kevin Herde

was down we're fourth sequentially the mean, expected. as Acid not I out certainly, What obviously, question. would I answer I Dan, versus obviously that breaking directly that, Production quarter to say the Nucleic I generally business now, can't speaking, so mean,

been And that year. step of was that rate largest were for which these into had down that a to And component took the we this GMP of from contributor coming XXXX. scheduled course sequential one decline. CleanCap, orders we that the And had throughout seeing run the

question. way best to that's think for me that the answer I

Daniel Leonard

margin could I perhaps I my Got I of we I the of lesser plan, but they up bit it. were goods in line. your that said higher year-over-year And near despite wasn't appreciate were margins and than use a gross on model dialed you expected, cost And revenue. in help appropriately. our came follow-up, know that. No, think

So from we gross progression here? the margin about how can better think think -- about

Kevin Herde

well Certainly, that of even Dan. based overall margin gross certainly, lower fluctuate have really Acid facilities the next tied and as it's as EBITDA in layer here San and substantial within the on will when our Yes, amount margin the predominantly we And Production down to take fixed where segment a you layer, most revenues. Nucleic costs labor. Diego, to our manufacturing

the just And their seen. product, I customers mix. some of it think was larger in to quarter some first CleanCap at quarters had that, here another we of versus when component a certainly sort higher-margin for did we're quarter, previous pharma we higher needs. the as our a was we doing saw particularly that's of have mean which relatively anticipated, bulk lower I that of and in volumes the overall

When -- So see you'll larger see we shipments think you the then we higher. CleanCap quarter, based do contracted and 'XX, have quarters, back upon ebb And had those visibility to look say, we that see as those CleanCap. CleanCap go margins the substantial we 'XX with today. flow a gross the into volume or of I second overall and that first a of fourth at, quarter quarter bit of little those the you margin

related then costs mentioned [indiscernible]. bit go some through, a and costs little things, margin kits to revenue start-up equipment chemicals disposable to you I things We And do putting gloves new period revalidating other lower need. in and predominantly. So and have and

of another So that part was it.

and what to and the forward, of to EBITDA we the with bouncing down overall saw we that in as see we quarter, the of that fourth little margin flows bounce second be quarter So likely around here as see very bit, in 'XX. you'll margin look back a consistent But well. really particularly the some

Operator

Schulte the Baird. Question comes Catherine of from with line

Thomas Peterson

for on Tom Peterson is This Catherine.

these from you guess, that year. we release heard that peers quarter? just Just the a to in from quarter, any I see there's first did dynamics the perhaps pharma start, phasing budget I atypical particularly you in of slower-than-normal any guess this saw

William Martin

Sure. program X program in see The has see planning. did we in CDMO with our with mostly I'll that. that In point QX. little NAP, -- planning budget from do, high And a are that dynamics. specifically. calendar we Drew and our different segments, bit BST, really a to over I different of think, Typically, consequentially hand there to

Andrew Burch

say disentangle. Yes. a tough dynamics. saw of to little I different couple would we It's a

I among big small pharma think some we're rationalization, seeing pharma. both and

That are people And pipelines saw situations where continuing the said, venture funding public push also saw capital in we the ahead. some to and we stronger a environment markets.

currents. So a little bit cross

funding -- that. I shows don't But business, dynamics, orders. in guess strengthening assume those trends I from the the we I would how discernible that before characterize see that's going it's a in think our up environment. in any We probably to take bit funding time of

Thomas Peterson

of kind should And in cost today's here Okay. some on we of the some the on actions around be How 'XX? about helpful. of one given rightsized be either still thinking direction? incremental and of comments restructuring. is from kind do Should the in cost we net That's Kevin cost that structure call. And today, commercial just actions of the any some benefit for action maybe of then focus $XX feel the you thinking in incorporating 'XX about million

Kevin Herde

Yes.

I think absolutely.

have happened. tied -- $XX those Those to think of the actions with I that labor. all cost about million X/X targeting we're which about

commercial. metrics investments of in and of [indiscernible] we So will we I the headcount of, -- with make spoke that and some targeted that continue spoke to, as

to the see right continue last cost, see, units And been frame particularly we'll in necessarily continue at naturally of tried this think, line, XXX. to think that XXX we to weren't -- of our it I R&D we have to to as I going again, closer [indiscernible] as if So going at XXX XXX units year. to way in from XXX of is to where to you sort to investments course something the units from line look XXX incremental or down opposed throughout would It have was call units. the

out We sure we We in or took in about Alphazyme that that of good a talked and lot progress and in about that sort of still to rate, continue growth. momentum which also but some progress to investing good were run we in R&D lot show of want our make well commercial. a as And say. as Cygnus, we talked innovation,

the converting and demand was really and out Diego and the in care making by San take [indiscernible] rightsizing G&A focus that costs bunch of then seeing and those facility Flanders be we'll our about kind some driven of operations them be taking of of increasing also labor So the specifically at over some specifically here in X. will that of a move TriLink

was very to articulated. we how savings focused again, on happy effort. So track all it that with executed We're that, very and we've we're a realize those

Operator

next comes from question Matthew line the Your with Sachs. Sykes Goldman of

Elizabeth Koslosky

Matt. trending with online? on current RUO year and the you Evie facilities This coming this you new is Could see how the for that split walk through GMP throughout to

Kevin Herde

look we Nucleic can down when in we broken our business different I take ways. obviously I our Acid But out. at through that. see Yes, that necessarily business, would look particularly at. We something It's -- Production, we units we not have that it look say

represent to both continues which business, Those our perform well. and Alphazyme grow

which predominantly well. of but in Research tied continues which part unit, perform applications, business Glen of those sequencing more to diagnostic the is to Our some structure extremely

would been in flow you certainly, the of some have course a have that purchases business, between And ongoing GMP, TriLink year, tail products, And our in as have and it then the and won't sort But items, side. the fairly ticket little has what discovery discovery really meaning it of GMP. that if kind I ebb brand we purchases, longer will and of bit. the the And of lower recurring RUO bifurcation volatility see a research of you we there. as say more the customers we then steady of on that have will, we within

as business sort it do orders we So as managing those bulk GMP, of we're mRNA have for unique slightly will differently. that's in spikiness the and But why GMP jobs. that's our we large a we dynamic where see CleanCap or with

course as capabilities moving areas next opportunity throughout the year, the see are with year we of those into to we the Flanders the go grow the certainly, And the business. and

GMP's a historically. less on a So And lot more little to would say we're then dynamic. one the focused be I dynamic discovery,

at And X TriLink, when within this the evenly relatively right we now, split look quarter, quarter. the we're

change dynamic we as commitments GMP have uplift have of think that because and I quarter quarter. grow jobs orders the for even that well we're next aware we the there already the some as will CleanCap the booked of GMP as that second in we

William Martin

think well said. I that's

you're to be lumpy, term thrown diversified. expect much lower a broader, item, We Kevin around business the means is which which hearing probably less lot discovery And season. like said, ticket this a

pharma the more course, will, lumpiness. be of GMP late-phase of

tend the we necessarily. to business So at not look that way

a bit. ebb As flow and to the Kevin GMP subject GMP we tracked operate Discovery order periods. something so said, longer because can over swings, have But we has differently. quite those be It's proportion TriLink probably -- is TriLink that and to large

Elizabeth Koslosky

Definitely, might COVID then some talk what and that the makes margin, with lot taking last less into also Okay. takes like consideration about of an a cost rate look know could of puts on year? the exit second, And volume compared you but savings. EBITDA I sense. to there's

I into XXXX. into So we get like then as about QX like just especially and thinking guess cadence,

Kevin Herde

seen seen, lowest seen we've revenue and the quarter that the with And a certainly growing. Certainly, low sure. X at see EBITDA we certainly Yes, here last margin into we've the first mark translates over lower quarters. looking the the that versus what back that in being we've

-- if few us revenue to average $XX the of will midpoints That million numbers for so of average on around you the simplicity. million see look for guidance I'll to the [ printing think just middle refer or next that $XX range. quarters to get probably of just ] EBITDA I our and around

products. some would of XX-ish there, and spikes and some for margin quarterly quarters. on higher flow and EBITDA these percent our CleanCap be margins That sequential next tied on There'll to average X be certainly, moves some the again, of ebb

right and I the here and in it. average kind see we low see get of we're revisit margin, you'll year in of be likely into it that those sort carry revenue. think a second again then on we'll Again, again, up -- higher the much But quarter will as of with of saying now, will XXs. see, we the That rest as you numbers kind moving that probably the

that what at with think the And the certainly in to QX, to segment. XX business, as looking the exiting looking NAP the will into type the we're back XX the be do. to I But range business tied certainly, now right we're profile of revenue getting margins is saw of up particularly we

Operator

the Blair. line Larew question Your of Matt comes next with from William

Matthew Larew

see Trey, talked of hasn't the in which -- facing. maybe product most because or us help your headwinds or Could last of year. of us see service of what about it helping the on just so new new theme broader is and the be multiple much that's maybe the apparent litany to most line have the obviously, most those building, you of of customers, But you you one top where win maybe products most the sort of funnel from with to traction going has question, First a meaningful. as that been the right top moving there's see been inflect because as help focus line, impact point offerings, service you business the sort you terms promising in as you just offerings you're potentially to needle seeing

William Martin

of question good sort Yes, which previous absolutely. it discovery business, dovetails business CleanCap actually, also GMP we sit is contract different we people but announced process products discovery/RUO They GMP That's into in to it a the about for at input of the versus, mRNA the where where services, and catalog do between that dynamics look here. other and way are sit. course, mRNA production those where

year MX, initial would I product. over expectations that, the an say RUO hit which significantly. exciting needle the I probably year, CleanCap that most of we I would launch past guess, about of and the are, anniversary was the say X pretty our to moving most product exceeded

of engineering And of things that's within and historical reagents participation to where year taking pandemic the MX the And GMP that GMP RUO batch, space. this hit we've we to launch product, run the company course, GMP in announced exceptional. of as from other pretty the we're already comes going of vaccines a just and an

So those definitely needle are movers.

that most example So GMP great and I a say now the probably was shortly NPIs exactly year RUO will exciting the here. an a is it because almost would from and needle ago be a moving of

Matthew Larew

Kevin, of one on for of sort cadence then just And G&A. the Okay.

the being X% the last call about You down we sequentially. referenced for G&A down it modeled and year, on full

You may a G&A but have remind sequentially on margins Is think QX. margin gross be start still -- like in there down upper that particularly QX seem beyond us to outlined, would XXs one-timers, range, EBITDA again in QX and right? QX referenced the to the just significant I some then quarter step hitting that. you that just and second to moving pieces the And require to maybe from

Kevin Herde

Yes.

that non-EBITDA certainly of I view. think carve obviously things the one are out part items. you of the That's to there impacting have that of

we're stock, there. trends last the, when So the [indiscernible] up fairly with say, versus the line I seeing as going which materially far you year you would this at in year's guess, G&A that, the is as what have look I

so that that, margins. are that, the to seeing we back add decline contribution and that I think into peel when And that's -- EBITDA you overall

versus the year adjusted quickly. year-over-year at It's line. this at that down G&A the is here for just I we expense first where under When ago, down XX% to just real were just expenses hit -- on the a our EBITDA look look quarter

making very made that there I see year happy as steady we're and to So savings. that full a the run think have progress and with we're rate achieve

Operator

Bank Securities. Michael America Ryskin question next Your comes from the of with of line

Unknown Analyst

Mike. This for on [indiscernible] is

funding on to are Understandably, So kind around interested seeing for your an take immediately become funding in the conversations? this but questioning. isn't of back in of your Maravai, revenues biotech line biotech I wanted you reflected in going uptick I'm thinking to

we in order translating the end about between should think and and market kind then into lag how book your that the eventually Or of revenues? improvement an

William Martin

Yes.

immediate idea -- of call the [indiscernible] definitely maybe, forward, will anonymized Drew, the that thing. examples. it, not let's environment I an think But we have touched that or if be beneficial color some you going the

Andrew Burch

to Look, or translating such be customer sure. where mRNA. Yes, has putting clinical their they funding into journey think and purchasing [indiscernible] work, have inputs plans, their I It's going through those new kind purchasing every raw new of a achieved to time. own material

or for expected where landed to stronger. we I a land think, bit look, we QX maybe little

is a dramatic the little as maybe of kind funding change but any bit every in [indiscernible] seen aggregate, customer result haven't a We of exposed.

Unknown Analyst

you seeing see there. any of then couple now terms [indiscernible] as additions. [indiscernible] of the your presentation you are I Then broader what And valuation in of the sort inorganic of M&A there of you a the has that a it. expectations Appreciate terms mentioned particularly catch areas bit. bit? you the color suited in Wondering seller to of are regarding Got a sector -- are -- that portfolio times. through if kind noticed

William Martin

question. insightful Very

is been say what look I official. one definitely are it's can't have we have of talk that one until about we the We would aligned. with tremendous been The seen a this that for also active. But finding first. has date And And is of to of tricks number things aligned. obviously, of really all it aligned strategically financially that are we opportunities strategically things challenge that's the

our niche the very at Maravai plenty At been founder-driven -- We think fill, opportunities companies. specialty a a scientific to has of certainly that's category-leading and do we there's that that. good

to interest with funding. about such be been comment sure. with the your pandemic, is This the But with been falloff, with correct rates, dynamic expectations. pandemic It has environment has head-spinning, a

challenge definitely active us in very for of so financially But challenge, continue finding and has I look that a opportunities fit, not still we more say, we're to area. right aligned strategically would The been that for aligned.

Operator

of RBC the with from next Capital question line Markets. Conor McNamara comes Your

Unknown Analyst

clinical is touch the step-up on David what move I This in revenue on volume customers wanted just as up and trials. to is they for in for Conor.

William Martin

Okay.

Unknown Analyst

For -- to your up. Flanders they as come

William Martin

even ] X start mean [ sizes dependent. Okay. X you program figures, X typically PO comes X the In it's into a X bit theme to in have the sometimes in completely Yes. in I prior but figures. little and to in figures, GMP, the X the RUO, the you back figures this go or where

when When it of service depends simply a it's all quoted. example, under bespoke. do is function sort completely on scale. things. GMP all mRNA a you and But purity, And custom program unique, of analytical contract of each you for services, sell reagent, They're litany yield, a GMP, every the

there's they're question correctly, So are very standard there's not items, Those projects, big understand big and your not I -- but expectation necessarily unfortunately, line if all there. a they're different.

Unknown Analyst

in color provide CleanCap [indiscernible]? you Could the announced you partnership Thermo on the impact to the some of relation that also

William Martin

last the part partnership. of Thermo was sorry? that, What

Unknown Analyst

your Thermo there [indiscernible] including kits? MCAP in The in

William Martin

Yes.

Okay.

to seeding another that's market market sure say, I that example, the would market. discovery of or make the our GMP wanting So whether we our the with are technology,

incorporate So where we Thermo chemistries vitro transcription to that's -- in another license kits. in is licensed their public

our the run might the broad market. of an the their that's, have to X solutions is that RUO-only own to This developers in get on mRNA broad for many application. they trying bench. sure in all we have examples In another the technical process But template ways just that I That's that of our of case, accessibility make of themselves will hands. think, and the IVT

Operator

Q&A Hart. our over concludes now turn will session. the That I conference to Debbie

Debra Hart

be We'll the Well, attending coming thank conferences today. us Great. you, months. joining for everyone, several in

So our person with events. hope catch up you I those of connect we at one you with in with we website. look Feel a can great evening. to hopefully, have to questions, section any Events us night. our of at further Good encourage and you And free

Operator

Thank call. joining. gentlemen, today's you and that Ladies for all concludes

You may now disconnect.

Maravai LifeSciences (MRVI) 8 May 242024 Q1 Earnings call transcript