CTKB - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Liz, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Cytek Biosciences First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Paul Goodson, Investor Relations. Please go ahead.

Paul Goodson

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

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

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

financial meetings will throughout also would of Additional financial measures to participating variety and as as comparable statements SEC. the in expectations. its and to only information Statements submitted This are in directly required filings the to whether accurate broadcast, duty SEC.This live Forward-Looking with future appears accordance regarding by found forward-looking today or uncertainties Cytek and law, most the conferences, Xth, principles. in time GAAP changes accepted in issued conference information will Cytek XXXX. and speaks, update of the and to because calculated be seminars sensitive a these information, any section is accounting disclaims the Cytek's any may academic contains in entitled industry like the today's Wenbin generally events earnings May mention Reconciliation risks be that of XXXX.Before include press I with new a call discussion Cytek Except in release of release certain measure in not that call

learn to most by geared by limited There with are highly so of Cytek community, members we financial to valued to a and they have interact instruments community. to our the uses attend offer cost our events, an to these a opportunity spaces technologies are the scientific primarily customers. accommodate While of of may number is

are if please like contact the call would Wenbin. turn to that, in to me.With I you over So attending, interested

Wenbin Jiang

Thanks, thank for interest Paul. in your Welcome, everyone, and you Cytek.

XXXX call turn the on for the achieved our our will today, quarter XXXX profitability. I drive and the up On detailed leverage. our operational and more strengthening to for to for over sustainable discuss objectives a first call Bill progress open we eye an and I in are performance XXXX will outlook at growth position strategic Q&A.Our Then of the for it look strategic our improving our before priorities toward on financial results with competitive centered

and are in improvement million by quarter.Total of We revenue we see fourth organic growth grew of in which revenue in quarter in $X.X to XXXX, global the will footprint of efficiencies. the related the objectives organic We to strong part revenue installed was In on base year-over-year. the levels growth growth revenue our installed the margin first our XX growth, installed inorganic to instruments.Ordering continued driven driving expanded include business maximize This revenue services Amnis both representing are our focused were and term, does region. sustainable drivers thousands capital revenue quarter, deliver of Organic the expansion pleased reaching a X,XXX quarter in Guava began within revenue XX% activity for and organic continue organic submit quarter our number our sold, expectations, with These we acquisition-related strategy our we by first revenue. instruments. XXXX. excluding of first but total our products instruments products XX% from base. Cytek.In we in million, to trends and growth achieved by cash profitability specifics. Cytek be expect recurring quarter, Organic flow.Turning results, of first $XX.X also services the first we and quarter see growth revenue growth driven of largely increasing the into the not XX%, in grew Longer balanced revenue for free first the our were strong

increased as FSP Cytek experienced becoming a China established Specifically, market where cytometry. we and leader well flow are strength also across products in Europe

gradually returning in patterns customers regions. We buying are of these level to seeing their

advantage However, square efficiency operations. investments foot global In China, to opened vendor in solutions. a strategic to we we cutting over performance for continued Wuxi, capacity XX,XXX efficiencies our facility and analysis to our the announced quarter, March, increase cycles.In meet continued edge competitive to new rising increase some to operational bioinformatics. first foster unique in peers.Turning the relationships able China to facility, excluding the APAC, we the this our With that we are and industry further demand and and to cell the drive to make U.S. see elongated our manufacturing sales of we

more have installed digital suite Cloud's now comprehensive users, an into forming unified panel over offers ecosystem to tools, demand our X and core customers of bioinformatics a utilization than our instrument.As the through integrated report streamline drive centralized through design Cytek their cell ecosystem. analysis which reminder, success users in FSP offerings, bioinformatics the for representing is is to we Cytek user we of I'm Cytek of engagement special average that workflow a Cloud primary our One Cloud. adoption seamlessly Our to platform, enable Cytek tools goal track solutions. experiment our and our a way pleased per a X,XXX software

at to optimize primary Our panel remotely, empowers design pleased their process experiments data designs panel FSP at Special week are optimal instruments. high-quality CYTO the worldwide, cutting this automatically and specifically just intelligent we an that share mark conference the use from special conference, researchers an for program. also cytometry onsite package panels streamlining algorithm software prepare launched solution our resolution edge is access through the to flow early optimized and to is that acquisition.We panel to design

X-color use the size laser TBNK is time approvals a optimized based two unique Cytek achieve is on our important and make one and have for will selected range lower have on in of Using operations leader the front, testimony comprehensive in demand more quarter. approval panel just the laboratory approved biological objectives report we instruments the last the NL-CLC quarter be of and TBNK to solutions automatically EU to results special China. encouraging to quality. that single-laser with you the panel our a compliance our We to was laser the on began media we of our first a support and using their broader consistent the the obtaining resumption panel more allowing to reliable cell researchers to position products. easier that cost, of even start social discussion and week, we for there to at in to patterns, form panels for X-color It follow preannounced the and users analysis design analysis the our the solution instrument application of reported purchasing fourth standardization.Overall, success the previous balance our trends XXXX information.On the advantages by money channels, our organic data that pleased provide clear reagents save for system in improved as our for single-laser, expect tool been Cytek's an growth IVDR this to is an and customer will industry regulatory recently instruments. We underlying was to to development through in important seeing clinical continued with as I'm more This market. previously TBNK encourage for

believe available are around their our with of differentiator Cytek.With important this call customers Bill our to more analysis advance direct I next-generation details over financials. the filled now We platform, and the addressing research, continues to be for will for turn end-to-end advance to purpose and our that, to cell needs we

William McCombe

Wenbin. Thanks,

forward join success. tremendous our play innovative the my more the believe reviewing a next this is to Before continued I chapter XXXX charting to role and wanted company sustainable meaningful around Cytek's the quarter revenue details and gratitude Cytek, working drive for of quarter growth long-term creation.Total XXXX. and growth opportunity in look was I express for there $XX.X team of the to of to financials, first a increase million, at potential alongside first this value over I XX%

the forward, quarter million GAAP the an XX, overhead The Beginning of of relative and Cytek the compared drove this a fourth lower XXXX, in of excludes owned separately.Gross transaction, revenue, the quarter, first from XXXX. expenses, was million full $XX.X Luminex of to revenue million to revenue in was XXXX the quarter, February Inventory of a XX% in will first $X.X adjustments the the first first arising X% have X% the was quarter the increase nature business, increase Luminex of the quarter but an Higher year contributed higher so first second quarter. to compared for the quarter inventories first of XXXX, will into contributed deterioration. to longer of of quarter revenue were profit system million in Luminex year $X.X closed decline. quarter. compared the XXXX, revenue the Organic of of one-time going XXXX revenue margin than of of in XXXX the first acquired quarter that in million which on to for the which gross from XXXX. margin $XX integration the of acquired quarter included out break XX% margin $XX gross the and which business quarter no in prior profit been remainder of of prior the the we profit XX% acquired Luminex

was flat of leverage.Research a were primarily constant Notably, million first the expense $XX.X compared and to period quarter the substantially The prior year not first of the at revenue.Adjusted headcount of from a million for expenses.Loss expenses profit relatively for a lower excludes reoccurring, and which the and million of compared quarter compared to $XX.X related prior first by revenue legal of loss expenses as the We of year administrative offset of XXXX acquisition-related decline as stock-based amortization balance year higher period.Sales in and as intangibles, quarter over to for percentage first personnel-related operations, increased due for due million increased first decrease expenses.General than increase in excludes lower the XX% loss $XX.X first XX% $X.X in X.X% our $XX.X XXXX, profit. gross $XX.X of period. margin, primarily Operating for in quarter due development driven of expect fairly quarter period, growth the expenses first compared million of the a million million to were $X.X operations driven million $X.X demonstrating million the million expenses of operating as to for compared as the for same loss at was by $XX prior $XX.X loss million of in operating was million for first XXXX million year. our rate to increase the were in of of the focus was million to of quarter XXXX. year reduced of compared were headcount acquisition-related marketing higher on and prior for and $X.X compensation for was of will revenue consulting stock-based operations compensation the and XXXX Net the expenses quarter exchange million expense was the impacts, in was compared will $X.X expenses XXXX $X.X first expenses. overhead The $XX.X from unrealized from XXXX. quarter was the and the $XX.X other period. which income, remain the increasing currency lower gradually a foreign This first to EBITDA, and prior the XXXX quarter. $X.X year gross by by was to first quarter XXXX, losses.Adjusted due in year loss prior quarter of the which in to million a an offset primarily expenses quarter foreign XXXX This from to

improve was of currency turning to meaningful no initiatives.Now expect first $X.X operational range our With in our our million, $XXX fully XX% and be we in XXXX. global guidance, to to $XXX.X debt total positive reiterating by reserves, by of and with started to XXXX operate $XXX total X% the outlook. cash committed representing a outlook continue of revenue, growth we in to revenue growth million. increased from showing change position revenue are XXXX our cash million the for to to improvements this a quarter of cash rates. positive and strength marketable continuation and the support We healthy the flow, controlling trends continuing quarter to securities Today, costs.Cash full from for we forward million driving the and going a $X quarter and operations profitability are year million, We over ordering our which year first our assumes full in exchange no results the growth which year XXXX support can

spending of As we our second our to of product growth historical lines, expect base. patterns most service customer look half being continue all year, towards the with that ahead, modest across we and weighted with of growth consistent the

year positive control turn over to income full ongoing our report We Wenbin. expect that, XXXX I back GAAP efforts, us our will net that with position the combined to XXXX.With for will it growth, revenue cost

Wenbin Jiang

Bill. dedication our team my is the unwavering of analysis.The solutions. business led forward. gratitude generation cell cell for advanced express and positions It of Cytek effective next including execution in immuno-oncology, that strategy, with a infectious for across analysis health driving to belief in care, their mission, exceptional our analysis diseases to coupled cell the want to of fields frontrunner application our has need Thanks, I mission their in Cytek as immunology rising to our advancing increasing

reagents. long-term excited to to positioned competitive build for for to up call, joining Operator. as leader address growth and services the in everyone cell in need with the as road and thank scientists will I'm today's attractive it uniquely demand analysis underpinned an solutions, competitive directly and we solutions open want for support are drivers questions. we and the the their map and to empower they these by We our tools research.I advance ahead next-generation industry markets end this serve recurring now

Operator

Instructions] [Operator Morgan from Stanley. comes question Your Tejas Savant the from first line of

Tejas Savant

show your to start Wenbin, both looks China? and your to on elaborate products so, can in on I a the yet? like recent stimulus then on across share and benefit, that and years you're be there well. over your service China beyond pharma start that comments placements anecdotal Could starting just customer program academic up customer wanted in rolled about on in any of decent and revenue in that's X is to on early And the what just be or to And out with. the you perhaps in you base, potential great. conversations year light seeing XXXX to and next XXXX color as funnel not Europe but into would you ask especially

Wenbin Jiang

and growth university today, academic in from primary is China, research our mostly institutions. Actually, current in space,

the coming, Now the your it's but regarding to on we seen incentive haven't question benefit program, yet.

will We the probably second the of expect help half for year.

Tejas Savant

you Got on the to it. ask I And That's want reagent quarter. during helpful. then rentals

reagent were orders In on quarter this Any that? versus the fraction order just what book, terms rentals purchases? the color of of upfront

Wenbin Jiang

And for Cytek overall course, we see of going we as is our just rental very -- now, mostly our reagent might to it's portion a side. business, stage. of to revenue early providing right But business. continue small the forward, it's with in on still polymer the clinical impact the Reagent

Tejas Savant

the your from North And BD, price here. just APAC grapples least purchasing you heavier headwinds at one purchasing any industry America called as cetera, elongated dynamics on of the Perfect. et and competitive instrument next-gen ex-China? Are discounting seeing you sort Sony, peers, out, cycles, last and of me in sort for with flow as

Wenbin Jiang

of the a spectrum flow full to cytometry our players pioneered in We we technology, space. ago. driving regarding X years success towards do This new start industry is which reflection the this to see

It's now we're we technology. to future. is this industry very into in exciting, previously, there. more the conventional just have the this this trying So over in Edinburgh. in and special. encouraged convinced direction, is truly CYTO also seen convert probably space is the This And with the And what is a leader in whole very meeting reflected clearly is Cytek this are we finished

Tejas Savant

helpful. it. Got Super

Operator

Goldman of from comes Sykes line question next the your Matthew And from Sachs.

Unknown Analyst

This Jake Matt. on is for

we also then you So can the a growth pacing sequential in the organic Can thinking in to that talk about the you revenue. attribute And step year? about the throughout how of down seasonality rest saw you're quarter? of

Wenbin Jiang

Bill handle will I think I let to question. that

William McCombe

believe I'm our not sure substantially I around XX%. understood but it, actually in sequentially. compared organic from increased increased to this I quarter revenue QX was It to X%

in organic a we meaningful improvement growth. saw revenue So

as far -- I correctly? As your did understand question

Unknown Analyst

Yes, Yes. you did.

William McCombe

Okay.

So revenue to meaningful still the gave during similar revenue as revenue is in that expect growth are the the far follow implies revenue think that And answer, organic I look, that year. for as would the comfortable we we concerned, that's some the growth. we Obviously, And year. a staging uptick to balance guidance years. of quarterly pattern with recent

the ready we're for think question, I next operator.

Operator

comes the Westenberg your And Sandler. from David Yes. line from Piper next of question

David Westenberg

is ahead you So call. And your I'll first just welcome, and pick on since go earnings this William.

with And level seeing, margins reset the year should by in little more a So the of the the terms with as about also And mix. the lot of is we margins and are a on instrument in pacing? missed buying how is this we gross margins? services think And way the all we customers into some of to contracts? just do This then this that be services Street rest go just of XXXX/XXXX, gross probably to mind, bit. potentially this could maybe

William McCombe

It's change to in that. product It's question. margin are for not product. very in not our specific It the anything decline or two to buying related like factors. gross things. customers very specific mix of way couple -- that no the welcome the you The for was a due Thank did there's and

inventory when an which And as system. into were Cytek manual a of SKUs, we there thousands in third-party handful in is adjustment. was this literally the the system. of a by and that a significant few and integration unusual -- Luminex the of was mentioned ERP prepared integrated were be to release done. our a And just made. a small or press were those inventories portion something process, into third-party were inventories there in held post-acquisition was that errors, the them errors finally warehouse One The had of of remarks, system caused That were

expect So ordinary it's of set that the circumstances course. recur unique to we in a wouldn't

for balance So of overhead -- accounted actually the less little was that although X% but comparable, This about a revenue is to margin than were broadly decline.The related lower overhead QX. absorption. bit expenses than QX,

less overhead a revenue as impact mentioned, of had absorption, would the that the we increases. that negative So to over and margin. course had we as expect And on year quarterly we revert

the overhead that on was So we inventory, that over a we one-timer one-timer. would the the of course And impact, we -- that ameliorate expect would year. the then would do expect that

David Westenberg

Got it.

about So take maybe kind the from real XX% or number and way year that the to there? it from of rest the of is march there off think

William McCombe

It's to historic guidance. want goal something to about just that specific -- margins. be don't our not is I say I that to margin certainly back we've our done. gross get would we're

David Westenberg

great detail Perfect. there. Lots All right. of

Asia heard said in be elaborate I you're little terms there seeing that saying U.S. might of sure or be to on I seeing America. I So the why think the an in you just what in and a what happening Wenbin, you're maybe Europe, that of North think you of you're correctly. optimistic this and bit U.S. heard purchases. you confirm were And can some I just to And the want correctly. that? I to capital make want cycle just analog return I and could

Wenbin Jiang

back saying -- are What coming normal returning And China, in which to continued I'm in and encouraging. started very particularly seeing Europe we to in the actually QX, That's previous QX. way. is purchasing this

return. as China. will are they and we see de as minimis, cycle elongated On will will a But APAC, well excluding not And back we do the loss hand, close. the come those U.S. other and going they in purchasing order -- it's continued

expect We close. them to

David Westenberg

Got it.

one, in last spectrum there. are an are of more you flow just that, seeing specific customers using And seeing be larger of increase a And my just or even full you you're would of the of bit an of Just full when And cytometry. color terms one. you on that my usage? adoption potential that reagents? Are order seeing on seeing last in them little Cytek how terms increase reagents

Wenbin Jiang

pharmas. and seeing We are have number to instruments to continuing expand to encouragingly across the start definitely instruments are their with validate the come across And of our back especially organization. organization. the industry, harmonize across They our instrument they they

in are not And instruments we those the actually few a so when today. organization, are even hundreds on whole of -- talking users, about users Cytek

So organization, in some very encouraging.

Operator

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

Unknown Analyst

is on for This Noah Andrew.

other you question thought is, talked be sorter cell from portfolio? strength So would and particular where sales is my Or mostly places come first that the about instrument any the in they'd coming So you seeing Were the that instruments? higher you within end in. particular products? across

Wenbin Jiang

Our strengths continue to is Aurora, to product, our flagship grow. which which be continue

Of adoption meantime, we mid-level more to are focus across to course, more entry portfolio. at going and product towards drive the our and in

Unknown Analyst

Awesome. more question. And one

dollars end? have XXXX. reagent quarter rest I doors launched pull-through understand because the full are that in going had the for and on selling now any possibly a guys minimal. that And reagent business open But the you be XQ mixer you've You of any new to Orion of seeing the seen

Wenbin Jiang

interest launched, we customer before instrument out to our on the now the thing new side. base. you've actually we from trends a When first is validate are And with instruments and have very into to putting come the customer work encouraging the seen customers in to right with production

Operator

next of line from the from Mason comes And Stephens. Carrico your question

Mason Carrico

that want seeing, purchase? are say mid-tier majority I your trend budget higher instruments, don't purchases, making the the you're to buying are perhaps -- the that majority, Or down given and interested are for maybe continuum them a environment customers that funding there one maybe but buying the of in these First, end constraints of of that are the they is customers and instrument? simply price delaying moving delaying their customers for

Wenbin Jiang

greater I we Aurora just continue our see is on interest and the Aurora CS. product, flagship to which mentioned,

So is how region, has APAC don't been particularly the a in to that U.S. will regarding seeing. come. which change really it quite to make your see elongated we buying But cycle the and related budgets behavior. and that much the regard, buying impact while. them decisions. are what for way But takes time That's longer just It a we to for all will

Mason Carrico

Got it.

Okay. the And your Lights opposite sales, in here. But to how are success customers? about customers existing versus it comes early proportion of sales existing maybe those customers question going Guava of seeing converting continued? -- really, non-Guava you kind platform. Guava trend your talked to Northern Northern that last Lights what quarter, And to when Has

Wenbin Jiang

because us individual is users from of In flexibility. mentioned value-driven Guava, this for we have the have particular, on This today by is their in Northern is platform facilitate side while customers. session, Northern Guava the And the Lights. working some really those are did customers Lights enable being more to satisfied on that with are specialized we Guava the needs software do previous the which is to designed not needs, something

by We eventually and them convert. users expect addressed be this other will more will

Operator

from line Jacqueline TD comes question from of Kisa Cowen. next the your And

Jacqueline Kisa

This Mah. approvals the and is on Steven the for Congrats facility Jacqueline on opening. Kisa

you've TBNK approval milestones to reagents? can your the on clinical you forward expect Looking that and panel there for any see now clinical your on gained are specific horizon progress,

Wenbin Jiang

absolutely. Yes,

us to enable And to because question But earlier, hope which a see continued of for meantime, expect to of business Northern grow come was type the be our Lights to help that instrument we that course, to business. will in We helpful TBNK to also growth our approved that will will instrumentation. CLC also regarding back rental, support drive there reagent our reagent users model.

Jacqueline Kisa

the customer has facility on focus or the conversations? support And new will board? supporting applications the demand across just provide more driven And opening Great. more or of the clinical facility any

Wenbin Jiang

the mostly board support to across manufacturing, product for is manufacturing. facility The our instrument

Jacqueline Kisa

customers? improvement for launched product I Great. if room portfolio? year, rest more any of just that a Have any similar And could one on last Lights. from the you in. software received from sneak is there you Northern the feedback on improvements Late And

Wenbin Jiang

to of platform do actually, those features. barriers In with that kind from think we the Well, to it's the the move to meantime, other to instrumentations have manage comment I reduce we one success. new regarding conventional the the which encouraging customer a from heard enables feel software, the special great

Operator

[Operator There you and at gentlemen, time. today's call. Instructions] joining. further no this are questions for Ladies that all Thank concludes

disconnect. now may You

Cytek Biosciences (CTKB) 8 May 242024 Q1 Earnings call transcript