CTKB - Earnings call 3 2023 | Cytek Biosciences, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Cytek Biosciences Third Quarter 2023 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 your speaker for today, Paul Goodson, Head of Investor Relations. Paul, please go ahead.

Paul Goodson

Thank you, operator. released XXXX. results Biosciences ended the Cytek XX, September today, financial for preliminary quarter Earlier

haven't this distribution you be an If received to added like if email to to you'd the company's investors@cytekbio.com. list, send news please release, or

the plans, Jiang, securities this from strategies, we are Jeanmonod, forward-looking call events business like remind that Wenbin I'd laws, will we could within and and you financial company's including expectations anticipated. statements Cytek's Patrik statements results are Joining involve to that me that opportunities, are projections. These from meaning make those and CEO; based current or federal today regarding differ cause to Cytek actual of CFO.Before uncertainties the on materially the significant begin, and statements inherently statements risks during

XX-Q hosting cytometry the mention November that of months. disclaims is a as in be broadcast, This the future uncertainties SEC regarding the XXXX.This GAAP be information, in Statements and of expectations. SEC Cytek press like entitled only information most update risks of Additional accordance including release be these Reconciliation to duty accurate XXXX.I call any comparable Except also the in filings, whether new information generally will in the is in the flow law, are may that section issued coming measure submitted changes accepted Forward-Looking appears today's by to Form filed Xth, with events release of number that will because earnings Xth, today and calculated forward-looking as with found not to Cytek's expected contains the to Cytek to events, call the time-sensitive required November and financial measures discussion accounting certain SEC. directly a conference principles. over include live financial Cytek its Thursday, on would any in or upcoming statements

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Wenbin Jiang

And quarter you, conference our welcome, everyone third Thank Paul. call. to

results XXXX, we pillars the XX% results. from million a for for million Luminex. outlook macroenvironment, we of today, up the This difficult I quarter drive more $X.X our discuss growth acquired look our call On over before of X across open well it will Against our from of $XX.X lines to key our revenue, update our representing Q&A.Starting with total and approximately financials our at call as an product revenue for on third will I strategic included turn detailed year-over-year. the then for quarter as achieved to Patrik growth; the a third progress

be the acquisition-related areas that X% future. pleased business for cycle services, experienced order quarter, growth industry In the expect where strong our positive attached third the and to Excluding leading instruments This testimony like trend from flywheel delays. a not utilization in the the are with companies, organic and within the drivers to and we is were sales extended headwinds other million, third revenue portfolio the many saw year-over-year.We $XX.X the growth the reagent our them. our increase of we we increasing immune our effect to a revenue, continued our in we was to quarter

to fourth pressure quarter. this the persist expect We into

As a business to million prior full these and approximately be versus factors, of acquired the $XX from from $XX organic result year, expect year revenue the to of flat million revenue our we Luminex. from business contributions

across revenue to XX% full to commitment we to progress $XXX our with navigate product in our provide customers believe momentarily.Despite be evolving adapt the range on the commercial streams. new and remain forward pipeline. year growth We our together, good I'm We at Spectrum profitable team's the environment. are Patrik strategy $XXX backdrop, our of we more And driving on delivering Full both this high. representing Profiling, FSP million our in that million, of XX% year. challenging with prior expect making this technology, financial underlying diversified our focused detail existing results to continue Taken will in and over growth interest at revenue levels or pleased and

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our purpose-built clinicals. on well key deliver are objectives, next-generation to industry expansive to bioinformatics; instruments. with our on this portfolio, business We Starting continue positioned analysis.To as to an X cell meet applications; instruments; the focus and product demand leader we long-term advance pillars: offering an

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force our to manufacturing sales time. ] and As of a of second the the [ same conversion the of quarter reminder, we completed Amnis end our the cross around control facility training the the by

to quarter, Cytek's third the manufacturing Luminex Location. of we the facility Austin, from the transition instruments Guava China During Texas, of completed Wuxi,

complete cross integration service only Our of our instruments training new on remaining task personnel is the to the to them.

take quarter.This to AI version industry's term.With the first the advantage value finish updated the our expect our The the us tremendous we to organization applications. the our of half cross acquisition. the Analysis We the leading cytometry are to now quality XXXX service full in the details of of Luminex in their the that envisioned in meet an from will operating of by to fourth position ImageStream. of the Overall, financials. has interest, To Software imaging we more will near Amnis that, to growing we the community of full of advantage take end over seeing in acquisition to turn important long release efficiencies call we the and service training both Patrik step over adding I around team this our plan activity for shown flow when made the image

Patrik Jeanmonod

from XX% closed a an included Luminex transaction, X% was excluding same of acquired and to the revenue on the sales Total services, increase experience extended Wenbin delays. the order Thanks, XXXX products third continuing quarter $XX.X and of acquired approximately XXXX.As period the for $XX we and cycles increase XXXX. are $X.X which This to revenue, over XXth. third million, products of Organic February compared million, of Wenbin. the revenue the services million from of quarter was mentioned,

Gross macroenvironment [indiscernible] headcount quarter $XX.X was in million quarter XXXX revenue. XXXX, XXXX, of compensation While of $XX.X in other and the The These profit stock-based expenses and did Adjusted research XX% XXXX. increased for due a from increase service Research the the administrative. acquisition was profit and and for primarily quarter the third in increases to Luminex an expenses of third from compared of expenses sales marketing, we of third increase of expenses of to and intangibles.Operating XX% challenging third a including operating in prior sales. development gross million the in third quarter as amortization the increase gross to the acquisition-related XXXX XXXX development, million personnel-related million across of and expenses to in the third prior and in general XX% in for included during year reagent quarter strength was reflecting XX% for were $XX.X third of and margin quarter quarter, and of from XXXX for related expenses Luminex. quarter the third as experience $XX.X was $X.X Sales the to third quarter and marketing were for the an the the to XXXX. compared compared quarter to of profit period. $XX.X of XX% X% expense compared Gross million of after profit XXXX. expenses were quarter the year third XXXX $XX.X third adjusting were margin revenue, compared million for million period, the our $X.X the members million of addition tradeshows new in team

after XXXX the $X.X was quarter XXXX. loss period. prior third growth to third up in expenses recovers third larger an While for million for $X sales $X.X trajectory compared and was after revenue is to a our third will marketing third operation quarter of income million base.General from for from ratio the quarter, of and were as for year over spread quarter tax net percentage XXXX. that in of million revenue revenue of a is marketing net the $X.X of of million time sales investment and as as Loss this million administrative we $XX.X operations tax the to the income compared quarter quarter The the expect decline million XXXX compared over $X.X our of this and

the expense. and million third $XX was compared from continue announced been million that quarter term of a adjusting XXXX.Our organization's record, important to XX, the has we after our growth cash external to XXXX, financial were in from $X.X underscores $X.X equivalents, our One this year. positive million we needs, use of free to of based strength repurchase position enables quarter of healthy repurchase million cash in operate efforts. sheet, of stock following our strong $XXX as positive our for stock Cash, EBITDA track May balance a profitable adjusted cash in authorization compensation third reserve vitality. XXXX the With global Additionally, September position investment of and short

Wenbin approximately to million for Shares which our quarter, of XXXX, third canceled, transactions. market approximately the open of in XX, reported During XXX outstanding repurchased stock at we these high $X.X worth shares repurchased million turning earlier. level programs are us XXXX.Now, with a September Cytek as guidance under leaving

and delays China, across full these expect We of to expectation, factors of are pressure full in cycle year XX% we revenue geographies. over sales revenue growth North year in be overall affecting market our challenges across continuing to XX% our together, order representing XXXX. range elongated to economic America, including Taking see the

prior be acquired the expect of $XX of in part are the we XXXX, we in line flat to the composed organic longer We this range sales anticipating to $XX the from to in year some approximately into softness look revenue revenue top million.As Luminex ahead, versus to experiencing. due million persist timelines our be are business we to and

a we our for conditions. to While to too eye global close early keep is outlook the it on next provide year, dynamic market specific continue

will to on the best operational ensure We and across our focused that over business Wenbin. efficiencies our to are overall diligently organization back to an aligning possible turn agile I profitability.With improving deliver we growth and it cost also remain drive structure position in that,

Wenbin Jiang

dedication their advance by delivering generation thanking to and next of reagents, cutting-edge Patrik. cell I our want to a Thanks, tools, the software for close analysis. to team Cytek unwavering

organizational and times. positions strength through near-term successfully these commitment are headwinds, weather financial we While facing to our us

with to that product mission I'm we expansive drive we of today's positioned well by execution now to We ahead it our to and growth.I our and pillars are open key portfolio. forward be up to drive profitable joining opportunities confident across want focus will thank adoption and delivering for fundamentally continued strategic Operator. the on excited call, continue significant growing our everyone questions. for

Operator

of David question The Instructions] the of first Westenberg Piper [Operator line comes from Sander.

David Westenberg

broader a just spectrum really us anything So I that whether that seeing the traditional cytometers, instrument the little just more bit out lot not it to flow for than or cytometers maybe competitive doing be wanted environment, is is competitive give the of great flow perspective. maybe you're or sense kind tells full cheaper situations. from anything there, landscape a whether This on of market

Patrik Jeanmonod

Yes, Dave, it's Patrik.

So see and know it, if defined our we right a continue instruments, to I don't environment, demand continued cheaper pharma, for academia. considering and demand biotech, from you is that we as see this definition,

While for the than spectrum the is remain that demand about a technology quarter little this we selling. softer still Cytek continued was expected, positive very full

Wenbin Jiang

Yes.

being seen indication based the have more here of One lost. of cold instead seeing our on cases we are we clearly is, gone pipeline,

Our not over win-loss the remain ratios constant, changing time. really

So due macroenvironment. this is mostly to just means the the impact

David Westenberg

would Got right about it. in is you to XXXX a X- softness have cytometer, Traditionally XXXX, X-year instrument? be think think cycle. you have replacement capital about at to the to the we a going it cycle. seeing we're If it, way CapEx long-term flow to think you the way demand the really for but Is about end the right that of the equipment as

Wenbin Jiang

But is can. the course, when we also to they as our a of as is are making hand, customers still high contiguously, this purchase delay basically customers you the to long rates, as think, customer, other have space, decisions part and know, demand see certainly interest returning on to there. their they they and purchase, the the consideration try new see of decision I out when we in due

here. So we is how impacting obviously, this perform,

David Westenberg

rate couple product to side. reagent interest in and on more about drive capital it. Maybe ways got demand that demand to to just offer more help purchase order one clever high environment? the bit with this ask Do a cycle? years options to or financing the given them over thing on, you little again, the anything Okay, next help Any think

Wenbin Jiang

Great question.

In are at fact, these we looking options. indeed

and help their we decisions you potentially our know, cash is customers a balance that make this As on purchase. possibility sheet, we to regarding flow can strong our have a the

Operator

comes the next TD Cowen. The Steven of from question Mah line of

Poon Mah

QX Patrik, It's a looking right, at the new looks doing over to slightly sequential to like guide, maybe going math it if quarter, quarter flat down to QX. be my I'm

what to you eventually the On the last of be are Was or to that what of us cadence think happened? lost? year. pushed orders? half back orders revenues there be back come some pushed those Could they of Will they the some that color And you call, do you said going skewed the back give got would on heavily back?

Patrik Jeanmonod

quarter Yes. Steve, going be from to so third is the the fourth up quarter.

where bit the QX is quarter in So segment, to softness a of We've from the typically so QX, slightly that's on fourth push We quarter. softness seen little on we the of we landed be expected What strong also expect in stronger which in we've bit third biotech. the seen a up academia had little #X. a is that side. the in

we expect While not to next lot expecting a we be stronger than QX. year, to are into QX lose

Poon Mah

delayed? that your said, strong. reconcile sense Can customer And that. and then just that Is not reconfirm mean means? really interest Wenbin is? extended you Just is that but losing is us being business, cycle Does you're that just it sales it's the what to what still being want actually help something the

Wenbin Jiang

being we not is this earlier. have Yes, It's I lost as what indicated what mean. exactly really

Our constant. win-loss ratio remains

especially a means when just capital really we this it to more high-cost time takes talk So macroenvironment, under expensive, for decision today's make about customer expenditure.

Poon Mah

stock can X stock On it. in. powder? back And balance buy strategy to if your keeping M&A got do continuing and buyback sneak you Okay, potentially some how thinking, your with I dry one last

Wenbin Jiang

regarding be to can continue see, buyback. million. to stock Definitely, And aggressive you $XX are authorized we we as the to going

million still being aggressively about open during So window. we spent we've authorized, will have far we do which $XX and the this million, $XX

Operator

comes Sachs. from question next The Goldman line of the from Matt Sykes

Matthew Sykes

in any It's particular that to what the to that well you're the on seeing many and sales on you're regarding sector. is category if been in spot and provide of rest of China. else can delays for Any it down relative the lengthening bit drill pushouts the comments finding just something obviously little If in the there known. the color a companies what you there's in you seeing of cycles I going It's made China, you're a additional could similar weak or China instrument world? weakness? Is on

Wenbin Jiang

quarter, come as there, got to in year. see, is are something working going well later very maybe is and the it's expected but QX definitely be we impacting we think in due many the not you over back QX, next we until there. to this we got delayed, This anticorruption It's Yes, can in perform how tenders know drive being did or actually QX QX something to and QX. China, QX I and don't those We continue some delayed. of into over on, when are

Matthew Sykes

I you're just your value-based you But And aware color and assays. how hearing and just of might flow procurement on other know dynamic? any but it. any, do any I'm impact that some incremental to work see from obviously not that to might that. that cytometry. there, so concentrated Got business on follow on you up affect clinical

Wenbin Jiang

in You clinical China? mean

Matthew Sykes

programs are rolling just out. that the Yes, procurement value-based

Just unaffected? you at be or headwind you'll see all, you any is potential feel that relatively like from it

Wenbin Jiang

with China mean is regarding I process to exactly to Yes, in tendering with that's what the the clinical. in delay regarding

a over we regarding sales China, impacted but with clinical As to instrument is there. you got know, in definitely very previously did quarter well QX we

Matthew Sykes

question then And last me. just for Got it.

or categories differentiation in Just seeing types sorter, any I you give look instruments Lights, Northern any where point installed cell in preference you as macroenvironment. or cetera, price QX, strength base for in it's the relative you stopped at Aurora, know us weaker customers' reporting just instrument et and sense but for you're this different have, positive weaknesses whether of

Wenbin Jiang

we overall, at items really the a slowdown see don't the but different lower-priced across high-cost in platform, the we split if versus distribution we do instrument types, tools. Although look

customer is the buying that impacting that's high tools. indication their another interest So just how rate macroenvironment of

Operator

next The Raymond the Cooper of comes line of question James. from Andrew

Andrew Cooper

into Maybe, step whether budget first, out, for on heard calling tools like other We bit a tone you a there's players the a here quarter. a of pointed some have certainly fourth from flush. cautious up

So much else maybe we see just thoughts on around step maybe like to going frees your budget in to anything that XQ would lead up typically how up. versus there

Wenbin Jiang

Indeed. flush. same history, it's related Cytek. budget Typically, that will to for we this have QX but going is at And And happen, at the of what see. still Cytek if certainly, QX to magnitude, be wait is type to thing is we the for confidence. to we definitely the quarter continue of the kind look best those foresee something quarter best past that But

Andrew Cooper

sale, get many end seeing And held able you conversations then a think customer you're push lower-cost I the sales Has client bit it client some seen anything up conversations, end lower elongated that that's terms you're versus that higher-end maybe get mean are those the little it's just that more that's to lower jumped to occurred we maybe maybe close and as pure the end and of of those a the high-end of you interactions that cycles, in of result but or that been instrument? sense, pushout a of something the from makes a purchases? to seeing opposed out maybe is those bit little Have instruments. conversations

Wenbin Jiang

Yes.

the instrument. what mentioned the our about end we instrument, Looking of especially high-end, the have across Northern Lights rate lower-end high right? just growth versus for see a seen, as growth do higher low-end the I we and And at

Andrew Cooper

quantifying Is terms growth color today? business sits of sneak one I'll share the there Okay. on and any more. just kit you and And business additional maybe can in in there the where that the reagent business

Patrik Jeanmonod

that. take can I Yes,

segment, growth the expect we invest and to that a substantially unique recurring XXXX. makes build we of to mid-to-high as to will also the added going coming So are it extent service single-digit continue our into total continue reagent We're for But years. segment range that small. in segment the the is segment the grow rate the of growth about that a revenue. growing revenue continue which the still to talking can We to business, as us second-fastest out like revenue percent compelling, we coming to

Wenbin Jiang

reagent than growth for double Yes. rate perspective, the our to rate it put And average of is in growth more revenue. overall

Operator

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

Yih-Ming Tu

to XQ. out I saw Edmund. trends is what EU This you your start in just with want and

a it in think biopharma, bit I to a calling half. stronger you and guys play that expectations? your was for XQ second for out Did were soft

Patrik Jeanmonod

expectation to biotech-pharma obviously Yes, softness higher We that in sure. we for a for see continue have this segment segment.

And than the So overall, lower Typically, I as third academia also in little not expect. would would that's we that's a growing happen. have that expected what coupled quarter. the think to it's you much with

Yih-Ming Tu

then sure this, And 'XX? but margin about if now the to how should it. manufacturing the about Got Wuxi, think impacts into you in transferred gross not looking guys and XQ talked Guava with we I'm

Patrik Jeanmonod

a Yes, that's good question.

So QX. we completed the transition in

had Guava know, who those still these organization, don't for So with manufacturing was platform for pay we a to the and the DiaSorin premium instruments.

manufacturing So also margin a doing as profit we instruments down these are gross the process gross better that within fully for move forward; improve manufactured for gradually for profit the of Cytek instrument, And all, will but the we're because now overall we go looking instruments the at is expectation these margin environment. cost this have to being a up those. first

Yih-Ming Tu

people meetings. into it more of plan guys on got. conferences industry more And kind kind Super what How it. guys you about you Reveal on in helpful. these what 'XX? Got was the recent could your like should of sounds were Roadshow, elaborate a you doing wondering impact thinking about we be heading if of And the OpEx and little then Cytek audience, just bit user I feedback

Wenbin Jiang

for customers, Cytek customers. existing the new Yes. and Cytek is Reveal also

with far so very we continuing process. it's and well And are this received,

we earlier I be we And join all have Paul the users that. to Cytek see community part or about you for investment that's to provided. firsthand place welcome mentioned, how think feel venue good the of technology to a probably

Operator

This today's conclude program. Thank for the your does you in participation conference.

You may now disconnect.

Cytek Biosciences (CTKB) 7 Nov 232023 Q3 Earnings call transcript