CTKB - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Loela, and I will be your conference operator today. At this time, I would like to welcome everyone to Cytek Biosciences' Second Quarter 2024 Earnings Conference Call. [Operator Instructions]. Thank you. I would now like to turn the conference over to Paul Goodson, Head of Investor Relations.

Paul Goodson

operator. you, Thank Biosciences June 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 e-mail to to you'd the company's investors@cytekbio.com. list, send news please release or

Jiang, from Bill Wenbin and CFO, Joining me are CEO today Cytek McCombe.

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

uncertainties planned world. be industry as around This statements, XX There would broadcast, because exhibiting live I the of expectations. time-sensitive invite in forward-looking call call today's regarding conference Cytek's events in most seminars in directly Once accurate analysts of meetings by its we disclaims to of a also Statements are not issued these entitled financial attend of Forward-Looking release as and This XXXX. whether throughout the the will Reconciliation in to SEC. in found discussion today and contains certain and measures GAAP the be only Except XXXX information any SEC. any remainder accordance and section will risks are in the that the and or and in to the conferences, principles. accounting update press new information, August calculated changes Cytek the Cytek financial may products. academic include of required with measure future appears the like filings release comparable U.S. again, to of submitted investors earnings these law, information X, accepted generally is events duty Additional with and Cytek's where

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

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

Wenbin Jiang

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

a to X% quarter sustainable over the for increase the XXXX the compared financial detailed before On was achieved for up performance XXXX, financial on was government in for U.S. our the was I APAC, sales grew the I segment the academic slowdown we condensed experience offset XXXX. and turn was our of Q&A. first team quarter second the outlook an of by and comprised the quarter. in to for will and million, the weakness continued a our U.S. growth call the and where of half the especially the Revenue from of first drive decline of to results tenets, government versus strong Further, and error it performance X% weaker X% market. environment and spending. turnover market Then EMEA improved Collectively, and capacity by slow orders the discuss $XX.X first as and prior impacted access CRO the and this first quarter believe call cycles, of sales today, quarter year, an in at sales concentrated our overhead a from the elongated in in open some segment quarter the quarter funding of pharma market, first segment it updated biotech, the double-digit progress of XXXX. will delayed our compared of the our versus XXXX U.S. profitability. in the and of a to which Revenue captured look more while half orders strong the growth of academic to we revenue initiatives in second a of particularly Bill XXXX We for continued XXXX second compared in strategic to some sequentially second

elongated primarily aggressively factors and our result to sales of bolster a these change We as sales are in in the competitive not a working was area. team this of dynamics. We a believe market cycle result

of drivers and the in U.S. place fundamental time. the in to Importantly, normalize we long-term over growth market remain believe expected are

the we over flow time installed will with Cytek a be cytometry base going expect replaced conventional growth and instruments technology driver will Specifically, forward. special for large be of

range representing our million, and a As revenue the prior details results slightly second X% the increasing provide are to our achieve of to our million result base to narrowing same in the by the quarter X% and of we pleased In in slower-than-expected results year, momentarily. were as we now quarter, will recovery installed in XX% conditions, growth the the U.S. over driven on prior compared year. to QX instruments. expect growth our the Bill $XXX full $XXX year more of range market financial of service revenue in guidance

the pipeline. our be remains making that the growth we we margins market in cutting-edge service a our over the ago. to was service leveraged and increased expect customers our our a new pace recovery not ordering reminder, overhead these boost for scale like activity increasing revenue productivity. Overall, while and we XX percentage and the continues compared to steady at weak X the U.S. Based driver progress the to the existing for see, we analysis would demand strong, points year and solutions a are term. last underlying we with we as believe the in recurring strong have to operations gross be by substantially of longer service our on Cytek months, labor will Notably, efforts, As

this as in is position a we and driving to remain cytometry. dynamic leader we As navigate focused our central this growth strengthening market And sustainable environment, on productivity. objective flow

to strategy. Turning growth our

reminder, installed flow our revenue XXX X long-term cytometry total total shipped durable include which that expanded the foundation believe a focus instruments, Amnis to bioinformatics and a global we business. base our will of serve of with instruments as the growth, clinical. product XXX units, installed acquisition pillars, thousands As second on applications, quarter, footprint product Guava key Luminex is sold, In of a sold acquisition growth our since the and each growing adoption Guava This the We to our across integral including drive and of current and of instruments reaching does the instruments alumina our and not our X,XXX base. and Amnis prior lines. to installed of diversified offerings imaging future base this deliver is

values quarter, the or that second allows further This module resolution and Aurora detecting excited can announced we [indiscernible] sale sale accelerate to for scientific high improved subcellular to in re-titrated parameter sales and and pace the accuracy be for particle to to analysis of other and sale-for-sale By many sizes small whole. expect therapy as bringing physiological analysis. resolution while signal discovery, study and particles benefit high ethical, and to and we all states, diagnostics capabilities speed of the communication maintaining development a the well-known, added the During were to the our detection community improvements a new of new capability provide our and enhanced systems new Northern have instrument. for sensitivity to already existing product or ESP, Lights

as For preferred will the and Cytek, these solutions clinicians. choice further capabilities analysis researchers among we believe our sales new distinguish

Turning to bioinformatics.

to main solutions. of through our Our which cell analysis our to our goal adoption tools, and drives workflow enable customers [indiscernible] expanding is their utilization software

of an success have engagement core about users of the offerings. and can user be of installed measured bioinformatics FSP Our for XX,XXX one site, over Cytek role, representing sites X instruments. demand now in average bioinformatics per We through our users

we a to are and previewed we capabilities that which launched automate design earnings week, the Cytek tool cloud, our panel during tool We panel to the builder expand share of call. powerful within last excited officially last

special Our and design tool will with by removing money time that algorithms measure process optimized of process. labor-intensive to tool Cytek proprietary automates a the optimize technology assignment panel intelligent a panel save panels in research for suggests This that is jumpstarting tool fluorochrome SSP market, minutes.

is tools streamline insight enables a time panel of which users taking applications As in from all a for Cytek research enabling of design suite in center reminder, design accelerates a prepare Cytek integrated market availability. experiment consists software tools resource of to that account combining relation remotely. online and into to researchers range one and special flow ease, community. data Cloud to acquisition, research to place, the vital density, experiments wide panel a workflows, with expression cytometry supports Cloud design It panels antigen to

in the to and application across color TBNK the hospitals, National that Life in clinical our laboratories Medical On the religion on Administration systems the China received front, and share clinics pleased quarter, for were approval second one-laser use two-laser we Northern China. cocktails X

market TBNK These first potential reminder, expensive is against various laser assays systems through conditions. which presence a that of agents advantage a advantage. safety X-color SSP and enhances China opportunities while laser-based strengthening a more competitive milestone achievement competitive and As process opens clearance the systems. the new this reagents. monitoring in achieved MPA validates the immune-related Cytek XX one by capability. X gives Obtaining a rigorous a our is only and supported [indiscernible] help diagnosing in significant This our our

to deeply forward analysis our component applications, we is to our to sale and providing We As capabilities. of community on remain push turn look and around we provide solutions enhance details discovery. comprehensive will and Bill expand a financials. new mission the call With accelerate powerful this continue forward reach to for progress customers. the products portfolio scientific focused sales that, analysis more scientific I continuing now and our clinical our to over to to to Accretive

William McCombe

Total strong million, X% Wenbin. second quarter the was quarter $XX.X an revenue of from for particularly of decrease a the a of first XXXX. Thanks, versus increase and X% quarter second

ago, in by service reflects prior the disciplines. First on academic and the in and being in growth half. half Product the weakness versus across international instruments weakness was markets versus These instrument are meeting X% tools a XX% robust year extensively decline and U.S. grew contracts. 'XX market, XX% year first revenue, half in a base being continued growth versus first particularly grew revenue, basis used systems revenue business all growth of in U.S. our the and Service half in substantial in driven installed Service the government in sector. how declined by market. XX% the results X% driven which revenue revenue which QX the QX daily effect, averages with out versus in first this primarily in reflect attributable service prior year to QX

operating productivity year half of geographic and to technology up and year for adjustments primarily the up This in service The million Adjusted exchange overhead This continued higher the to from to Loss to year extent, markets gross million from lower compared the of XX% revenue XX% the to in decrease second period. XX% worldwide. expenses first of which was million were to current in foreign from compared $X.X up grew forward the in loss the to QX operations for to development General a operate versus year Total $XX.X XX% Turning weakness $XXX by remain strongly was to cash up The capital XXXX. Adjusted with loss of with quarter, the We primarily International slightly of This QX strong losses. of and inventory QX for Gross marketing improving marketable year. was compensation decrease million flat the benefit net million by EBITDA increased in X% higher EMEA stock-based despite noncash and QX reversal expenses at gross stock-based by $XX.X essentially lower going prior overhead $X.X the prior million to and second quarter, other technology and by increased higher in half administrative profit $XX.X research and expense at the acquisition-related the up $X in second QX XX% margin a million and the GAAP the the year. expenses, flow the controlling second quarter adjusted the the the XXXX, of loss million of to marketing in ago. first million increase a line reserves, QX primarily and quarter. effective Asia higher quarter, market $X.X XX% sales substantially from QX service and million the lower $X.X stock-based million X% XX% of on healthy versus expense slight committed margin half second a The due XX% quarter, down XX% tax of down no the expense. expenses $XX.X costs. XXXX prior expense. compensation XX% driven by a to as initiatives. by was to the from amortization second from $XX from and and compared prior million and Total a meaningful improved was as were intangibles and XXXX, from $X XX% Operating operations EBITDA, was improved a million increase in in choice and product was XX% prior for of income from to second down from labor in GAAP XX% profit period. securities were in spectral for Net tax foreign the million quarter, year lower to $XX.X year gain and cytometry for and impacts profit fully service. margin primarily due and to second profit $XX.X XX% gross cash XXXX. quarter excludes quarter of a a excludes can benefit a million by expenses prior an productivity institutions tax million driven XXXX for Research and million to strength quarter Cytek offset the for year declined was working versus up a $XX.X offset $X.X quarter, from quarter. of currency lower $X.X offset product performance. for and down million was debt global full management U.S. head due due lower driven margin repurchase the labor and QX driven in QX, was decrease of million, in million million lesser and in in from million the to improved quarter companies a first traction expenses for headcount positive prior to due growth gross first for compensation second quarter, versus quarter versus and gross gross year due decrease biopharma quarter, $X.X to second revenue growth due quarter, operating to and higher QX $XX expense compared Pacific, in Sales and $XX.X our were the an decreased and the count. for from engineering the and $XX.X million and R&D million current operational for $XX.X driving a period. the $X.X to QX profit improvement cash was a expenses labor the tax flow, a in position revenue. due we which ago quarter, year due of versus support With for million profitability shares efficient and in rate second consequent ago, of million and quarter. prior and lower quarter by versus expenses. continue growth. revenue of from spending absence lower Compared to and that revenue and with QX of $X.X margin, primarily $X.X $XX.X

flow million been June, and of has use $XX authorization stock. strong in above, stock. to our of an position Accordingly, our to we repurchase announced I important one mentioned cash our As cash repurchase

market million worth under in XX, leaving of programs at per with repurchased XXXX. the stock second a canceled, of as quarter, $X.XX share. open these $X.X Cytek of average us weighted Shares price XXX.X million shares June approximately repurchased we During outstanding transactions are

Now full high for a turning at XXXX, reported to been level were the our year outlook which earlier.

$XXX and of We impacting are Pacific. continuing order mixed Europe see normal of returning to full to assuming market to exchange prices market expectations, growth year delays our revenue same change X% America. in and overall X% our seeing representing currency conditions, to are rates. to including patterns full outlook across signs no we $XXX more these range of North revenue the we Due time, Asia XXXX a to are million million, narrowing At over spending year

and expect customer across at historical year. the modest growth with to half lines rates continue our our We this and service growth products second base continue of spending in patterns

In to be net full income. lower and income profit, other positive expense for our addition, expect compensation GAAP gross year not due outlook the stock-based for we do to slightly lower higher

over loss income flow in We our be the from also XXXX. cash deliver expect millions remains to net positive expects Cytek's turn to to objective that, operations XXXX. Cytek I in range generate It GAAP year the will forward. single-digit Wenbin. With full going net positive to it for back

Wenbin Jiang

scientific generation Thanks, Bill. delivering I and to the of community for to advance next to to their relations continued commitment our close team cell analysis. software by cutting-edge tools, the thanking want [indiscernible] empower

now a Operator. for growth will joining also and positioned will tragic profitability. I that attractive it thank are strategy continued and key and very call, open focus on sustainable everyone we questions. for confident execution with up today's forward strongly across drive growth end care, serving and are we our We health our pillars I'm delivering markets to across

Operator

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

Tejas Savant

At So, XX% it imply achieve could XX% book visibility a a into your the the little seems you talk order ramp half? to half and second to to bit about guidance. midpoint, second

So ramp. could color confidence you you this gives what provide in on some

baking are in there confidence assumptions how budget So, [Audio your benefits any [Audio Are to you so China? from Gap]. any Gap] any about

William McCombe

of a broadly spending conditions current typical market We quarterly in and a baked continuation pattern. both

particular, if second more those and notice at annual represent in quarter, revenue. of than that look half year's the you You'll prior fourth XX%

or patent growth pattern last X% represents half which growth any typical So, at digits see second broadly prior consistent be half, the we our the is over reason years. than any and end, don't And guidance top low quarterly that why double first year low overall rate. different end year-to-year our would with at

Wenbin Jiang

that, Just China to this of not the impact into or baked guidance. add on is top forecast

Tejas Savant

I Then question. guess a follow-up

the anniversary. with road the do Could development Guava update development acquisition with an on currently And your FCI imaging and on FSP? with seeing now Amnis. a at of us provide follow-up, map as Just where stand you you

Wenbin Jiang

as Guava, acquisition. reason was you for know, primary a the never

have Although have the and needs on the are stay continue the imaging on we Guava work to to the like on the continuing imaging we is continue the the and of reason of capability demand and some on they with. we for kept customer integrating been what assess FSP side. to Amnis product. this side, Guava the But acquisition, reason part customers familiar that And for to would

Tejas Savant

that you play talk you worsen weakness out? bit the ask you in noted Did or quarter? get intra-quarter see the saw just, U.S. more And is cadence the customers I you so throughout the nonacademic better a if in Could one trends may about

Wenbin Jiang

through in of also representatives some even trend see, been indicated of the sales territories turnover and course, partially And to our can have this of QX the this you continuing America. As we in North QX. some the from of has due

not and pushed this addressing feel being being is not lost. we It's close. are too We sales subject, just

come So, we will back. see it to

Operator

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

Ivy Yan

Matt. This Yan is for Ivy

the And first captured continue more in orders the on that delayed growth elongated in year? were quarter? the a orders? would the my So, of half there delay then What you orders risk back give us to excluding is, the sales color cycles can have those is been that

Wenbin Jiang

foresee As see a in the this But great kind and evidently And included in the do a cycle for factor. you North time, our experienced at growth we America, actually this quarters guidance EMEA. first this can we already sales Europe year, year, over and continued this will next have seen don't but we of has in improve couple elongated QX. of

Ivy Yan

can you and through cycle be to installed potential then large talk And we average instrument detail could your given start we see through, up, cycle historic maybe on to like like those are come your trends this where replaced? base, some when coming with versus the age replacement start when of in

Wenbin Jiang

replacement other instrument placement the this from benefit is That replace and instruments. of primarily is cycle total. of deployed of those to few XX,XXX own Actually, there, constituted far going field, instruments replacing universe now are think that not to also talk we by more about our fact, those in out years a we instruments just already. flow I are instruments about conventional we ago, quite in of in opportunity feel the it's we cytometry instruments, think conventional replacement when the -- a thousands

as So, most instruments they replacement replacement the opportunity. constitutes it's that of the reach end life of important those

Operator

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

John Freechack

on on were? if John the what commentary have consumables any you And instrument commentary is Can give quarter, the any that for This during instruments, the you across stronger-performing on Dave. be the the instruments appreciated. mix would

William McCombe

proportion the categories of with the particular of instruments show we instruments, quarter our to assume this was think business. then the all consumables, you're overall to Lights performer. of with And category I strength best strength that respect referring I be reagents, in mid-single a across probably continues that to digitâ€™s Well, Northern

really the doesn't with in broadly we grows the And have portfolio. the a as past, impact growth in said on of rest significant line it rate. it So,

John Freechack

start in any when appetite might capital you the do more have And U.S. positive budget more potentially stabilize thoughts turn on to or

Wenbin Jiang

sales clearly, and the in see come back. elongated I cycle do while start government academic an the think the side, segment, And the see actually, we on to we of in versus pharma at QX see improvement we weakness QX. kind looking

Operator

Your the from [Operator comes question Chad next with TD Wiatrowski Instructions] Cowen. line of

Chad Wiatrowski

on Chad you customer instrument less and automated for more and just markets. improvements and there end bioinformatics design sensitivity or contextualize in to certain out that Steven of is panel break and these how Mah. help among consumable This Is the demand Can the geographic segments? impact improvements sort

Wenbin Jiang

Bioinformatics launched. platform our help leverage pattern the to have, instruments the is just relations we The a users have really the to spectral and we

fact, automates time for In takes the a optimize. especially the more design, it panel high complex panels lot users and to the typically for

Now system development. enable also it it a virtual a will only to afterwards. purchase optimize Afterwards, enables up experiment that them them have we on basically to speed tool enables our like platform, their relations really them not to

So, full users process, for set technology our side through customers a we it to provide leverage solutions will the feel this full provided. help special of our that has

Chad Wiatrowski

is facility, That's manufacturing instrument facility sort opened Obviously, related the helpful. new production. And just to instruments the of to this pivot

cadence risk already a of just the gross to create And you're margin, beyond? fixed the how of maybe could this is speak back margin does the books? that So, on year cost half to the in given and thinking you

William McCombe

The our costs. fixed are new of in included costs already that facility

to specific that we risk cadence, to to to from we gross said gross where back were downside year. last expected we don't margins gross then So, margin closer quarter, our that. as a see And move last margin

XX%. balance up for to year. and moved XX% to year the that in of of the compares gross XX% So, margin adjusted QX in last And our this quarter,

as large we've year. benefit, from the margin this last portion the fairly margin think most recovered would be grows, versus hope while benefit the I -- So, forward. of margin revenue think a And some should I modest for point gap of we

Operator

today's that gentlemen, and Ladies all and for you call. Thank joining. session Q&A the concludes

may disconnect. You now

Cytek Biosciences (CTKB) 6 Aug 242024 Q2 Earnings call transcript