CTKB - Earnings call transcript Q3 2024

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Operator

Thank you for standing by. At this time, I'd like to welcome everyone to the Cytek Biosciences Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Paul Goodson, Investor Relations. Please go ahead.

Paul Goodson

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

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

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

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

in new today's or in found update of Cytek time contains its uncertainties is Statements only with in entitled and certain forward-looking issued discussion live the This and to measure the to the accurate Additional financial the submitted most release XXXX. filings Cytek a that these because appears any in release calculated required events as Accounting by the and be press call are may information law, comparable Forward-Looking accordance financial SEC. Except November disclaims whether in statements Cytek's call conference any information, Principles. GAAP duty to future of SEC. This as of earnings expectation. changes X, directly Reconciliation Generally measures today sensitive Accepted with risks section information broadcast, this include in will regarding not

to will presentations research to Cytek's Cytek group products. meeting technology our hosting is that by best X. user users would use for experience scientists in The day Finally, of December announce I like ideas how their full Cytek to Boston and share feature on meeting and a

would me like attend. please have soon investors, I amount the call over like With know to you would to for limited let of analysts if We so that, to a Wenbin. possible as space and turn as

Wenbin Jiang

Bill Cytek. progress our call On overview before to performance I strategic we more achieved Paul. thank Thanks, and the total everyone, detailed Q&A. Starting growth look Then results. turn solid I for will for growth our the an and in it with up sustainable Welcome, growth call, the year-over-year our quarter today's your a third interest over financials drive the and profitability. X% We third on our at revenue will open in with delivered and $XX.X reaching to million. initiatives provide you for of quarter

was revenue conditions. market despite a see APAC loyal as basis essential positive of multiplexing, offer reputation higher more spending patterns a continued strong in double primarily quarter growth to consider data normal in in category and revenue our and year-over-year Fundamentally, quality, our because the globally. We labs service to serve for and leader pleased we are ease return is continued more this strong a this U.S. by digit EMEA technology compared were we discretionary momentum and total the instrument and that ongoing APAC These growth driven from instruments capabilities technologies. Our many use. customer growth core see believe EMEA and across to our sensitivity base. Geographically, soft the We toward

harmonizing across translational are global strong experienced their of and focused capable We from is uniquely which see While customers, for on across regions demand increasingly discovery year, sequential last U.S. particular conditions products with pharma work, were biopharma different sector. our improvement customers softer instruments the we market instruments than Cytek's for our be CRO delivering. our who to in for technology continued in the quarterly to encouraged

management, driven analysis our demonstrated by becoming combined comprehensively diversified posted of cell believe with of we path needs profitability. on expense our macro navigate effectively another lab analysis. cell cornerstone our discovery to Cytek are growth. This customers' disciplined of deliver a sustainable revenue headwinds. We durability and EBITDA, seeing as we quarter our in a Overall, portfolio was we Additionally, focus adjusted the serving positive core is portfolio our clearly technology our in

high the geographic sustainable objective in the and and customer us provides Importantly, diversification of growth. with expectations our delivering on long-term our confidence in degree of business our profitable

solidify on cell with We including leader third XXX end, footprint analysis. since XXX quarter, to our as our instruments are Guava hard next Amnis we to market applications, focused X in our base pillars, expanded is a the team of integral each the key long-term To bioinformatic Luminex instruments, the of driving chapter working reaching installed of that a instruments forward Cytek's business. and which is acquisition clinical. sold, global total and In units, X,XXX growth: shipped

sales the foundation Within these of in to XXXX, both year-to-date of our further going We strong forward. consistent showing installed Aurora offerings growth quarter drive product good the a the growing believe totals, are the showing will adoption Lights the compared to Cytek and as Northern to is base our the continue instruments systems service demand. and serve while third and

bioinformatics. to Turning

of is software customers Our our through cell primary enable workflow to to our streamline our tools, which objective adoption and analysis drives experiment their utilization solutions.

most tools enhancement within recently Cytek tool tool our with empower the advance better the of their and scientific with builder panel special panel to continue research, Cloud. We to community

user are jump our customers and and capability great labor-intensive work automates are process adoption and a from We base. have manual expanded their that panel to strong receiving who scientists removes our design feedback seen allow start among from this growing benefiting initial

number a leveraging already panel their workflows, capabilities advanced As design and streamline the their our research. its into of tool to a special use panel optimize integrated customers have result, of

users, This an generated the only of average XX,XXX now adoption, we in more With its of more X and than over this instrument. pleased already installed begun part more are As quite launched Cloud Cloud. Cytek year, with we performance July user FSP receiving Cytek to than our reagent orders have special the users of at Cytek late panel has base doubling this from expanded we broadly, represents year. our date. Notably per user which start the base,

Turning now to clinical.

to We clinical business Cytek. the opportunity for attractive believe market an represents continue

have translates streamlined into cytometry As Dr. Seattle center has products is diversification to Cytek both clinical the their scientists He useful technology changer number game believe industry-leading the of long-term quarter, and conferences. allowing their a their and attractive remarked integration and a flow drivers. to our Cytek's and event approved been we to reminder, like Course cell processes, Cytek AI Cytometry premier Meeting dramatically space-constrained the high-skill In of where ICCS EU. Flow workflows One did results. In highlight market about stage spectral the laboratories. and combination Ng, how took growth positioned their in analysis faster time of of expertise high-value is a Director & are ARUP that Dr. the Annual resource-limited cell at to at Laboratories, for Applied which use more portfolio, our noted and Ng serve third sum, presentation to for in focus technology. FSP China David showcase technology a solutions and several on further of uniquely our an global clear solution end-to-end the our analysis complete industry analysis, I'd with the their

as This details profitability for foundation durable enhancements that, seek our business high about focused provides our acutely call the more confidence to portfolio strategy. will growth now cash over strong financials. I on accelerate that we to with generation. With are will and us We deliver and turn Bill

William McCombe

and QX versus third the was for revenue XX% QX year. Product and versus increase and revenue, quarter product which X% last increase markets. Service revenue primarily revenue primarily last recovery Total The QX The of disciplines. a tools active continued of in versus service growth instruments, the installed in This The XX% versus expansion particularly of instruments the a of QX versus versus recovery of usage international driven Wenbin. broad result QX driven growth versus year last in growth of reflected is Thanks, international of versus year. robust million, market, $XX.X by in continued of revenue grew revenue of increase and revenue increased biopharma the X% across was year. base was our of by markets. significant range and reflects growth and a QX last last XX% in year. QX second quarter in international versus in QX service sector, markets an the U.S. our

performance. International markets prior market Total of X% with year. revenue geographic EMEA strongly to and versus but up grew Turning versus QX from year. QX, XX% X% strong versus a declined XX% last U.S. QX increased

expense. Sales strength compensation expenses The line an administrative and quarter. Operating choice for is $XX.X growth were spectral expenses million was the year. Asia $XX.X at services versus in in loss net by prior versus Pacific and year, lower full prior in versus the but prior other market-leading tax research with Cytek's we million operations, worldwide. GAAP versus million and from versus improvement X% $X.X $X.X gain million of were period. a from fact technology of compared quarter, driven international The profit up by the and $XX.X a to a million a for million for year the expense period. General operations for $X.X $X.X forward in $X.X third from XX% million the increased of to cytometry quarter, generated year. QX gross the GAAP was XXXX. $X.X foreign expenses expenses and and third remain lower engineering primarily primarily due from outside million, driven revenue which cash primarily institutions compensation quarter of third from and quarter, income the of of Total year. Research and QX, increase flow period. $X.X last the that to and were prior down to GAAP XX% We $X.X our million stock-based was from exchange capability million QX million in prior to healthy last fully QX, initiatives. down and $XX.X growth driving due third currency prior quarter. year improved gross and of was technology shares by compared in increase With XX% million cash biopharma year $XX to position no million This growth GAAP despite in and of demonstrates higher gross of were versus by an lower profit higher loss of expenses. I'm $X.X $X.X The from development QX improved markets support quarter third million QX. million This increased the quarter in in reflects for the of in XX% in foreign was third flat costs. Total companies prior by reserves, decrease XX% with operate $X.X year third million the the to profit meaningful in in This for we of profit operating improving from amortization intangibles, committed the to versus EBITDA, and headcount million quarter, lower continue in second the gross X% quarter XX% higher $XX.X expenses for a third quarter slightly to down quarter, net spending QX $XX.X the third for last margin flow, $XX.X X% This was were excludes QX a QX up that year QX due was income QX and productivity expense. Loss slightly by year. down increase on gross operational $XX.X and the of due QX for positive expense the year. Adjusted impacts, million Compared higher lower higher strong Adjusted prior to versus repurchase the decrease and quarter, company. and down up by lower $XXX.X million marketable tax versus to was to revenues. XX% and loss operating in profit generating ago the for the compared of overhead $X.X QX in was both $XX.X up costs. to year expenses acquisition-related to line primarily a $X.X securities to year of the expense. due benefit profit excludes operations ago, from debt driven global to XX% can the from in marketing margin G&A and was quarter, loss year higher an the margin, in prior stock-based of quarter the report This million which product third expense. cash operating pleased revenue was QX net going of versus prior cash versus a compensation year. driven million and $X.X million the strong of gross million our profitability from a from driven the million X% stock-based quarter, controlling and million and material

compensation quarter, As I mentioned, with XXX.X under of dilutive continue shares for in Shares outstanding to result in average of of million stock-based share. issued to stock repurchased we shares outstanding. We expect during approximately X.X in fourth a leaving will per these our the $XX.X price shares repurchase net our shares which canceled, quarter, are the repurchased effect programs XXXX. at the more as XX, a QX program under us Cytek and million to October million offset of $X.XX than of weighted shares reduction plan

our to year for turning Wenbin at discussed Now level outlook earlier. a the XXXX, high which full

While see of did At normal in see recovery we the to a more time, in activity in momentum see North a and we relatively QX. same Europe continuing we good Pacific. soft America, are Asia market levels toward

factors, full currency growth on year X% growth We change revenue million our in assuming we of overall exchange also no our a XXXX, X% business. full rates. these outlook solid in Based million, see $XXX of representing range to expect to over service to year $XXX in reaffirm

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

Wenbin Jiang

Bill. Thanks,

future. our mission strength financial well for to our Cytek and navigate successfully position our strengthening through foundation in macro share the while Our today's be to environment

to have dedication that is forward. I for It call, our team's quarter. profitability. We and a want Operator? today's map everyone joining to our of will And growth thank clear ahead now and long-term up this drives commitment questions. sustainable I'm proud deliver road open the for we achievements progress their and it

Operator

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

Tejas Savant

Wenbin, maybe just off. things to kick

you. quarter better Why et and pharma. discretionary the the is the science market what any a as the think sequential Has moment, sequencing, of out little sort called vendors end is even soft that U.S. normalized that comment essential in folks life maybe what from in including more the a prepared little other And bit environment in flow different for for well? at that a And instrument a biology, how I your customers. was I made I quite second little remarks you're elaborate on spatial you your think more of demand think Can and some in are bit you bit? versus cetera? seeing you improvement the spend academic on also a in in seeing about market comment U.S., cytometry of government? just gotten

Wenbin Jiang

on seen we Indeed, versus in biopharma, the QX. North strength the as have Overall, America, QX have Yes. we in some academic what improvement come side from as indicated. the well

this so in differentiating used some we feel other life we science peers. are played their regarding which others, is our as Cytek discretionary. cytometry with supporting labs from a some are which of we has role different is science basic needs, technologies almost while tools life Now probably labs, to biology have different indicated, And from flow from daily all many and

Tejas Savant

obviously, quarter has for the million the $XX Fair guide one enough. it. in midpoint. you, sequential step-up And the Bill. so fourth a at or I mean, Got then

fourth around sort lot of budget terms through benefit, softer it just and flush? through So us a spend underpins environment versus science your essential discretionary of there pulled so to confidence expected of the actually the the alluded just your in that out come any budget sort Can step-up the on. assumptions is what quarter? Or given flush underlying life here that of think you will peers than Wenbin in have your help just

William McCombe

step-up years, quarter. Tejas. percent fourth fourth revenue Look, about as hi, customarily XX%. the total quarter look a And Customarily, in in it's at if -- the a we of you see prior

assuming of instrument by we an So I as our is pattern as customers viewed are a normal more here. seasonal of And many the our Wenbin think underlying theme are that that partly that opposed instruments to discretionary. essential discussed

So normal seasonal appropriate. pattern we feel is that a

Tejas Savant

it. Got

me about Any share? fair a also then Is here. Street that to doing XX% of your there's what And this growth, has versus I including would moving one sort China you'd high-single of the in to Okay. here. expanding growth willing the guardrails rather end a think whether you so? be improve year's use? bunch light on think while margins Or at XXXX EBITDA for last perhaps folks framework mid-teens to level. market pharma quarter-over-quarter, Just or digit like recover, point continues pieces moving of cetera, you of the et pieces does here,

So curious you guys any to willing XXXX. would share preliminary just be to as on color

William McCombe

look would an $X.X EBITDA next So be want on adjusted look, basis. thing at this It me guidance note at up that, take point. year. give if about EBITDA, is think, to at That's want I that $X.X profitability, versus the for just Do premature. versus, we We're would million XXXX year-to-date call. year. do to We'll significantly year-to-date revenue only you With we're don't I that on you last last million our respect to Wenbin?

gross line them control grow than top the to operating expenses to slowly grow to margins top is more to model have control the line. and business maintain our and So --

EBITDA we that go of forward. we that implication grow as would to the expect is So

as So with that's about can as to respect XXXX. much I say

Tejas Savant

Understood.

Operator

Next Cowen. the with Brendan question comes from Smith line TD of

Brendan Smith

guys event going line to that bit overview into Congrats quarter. new XXXX. of Maybe forward. have we product kind there. the be important I'm expect just updates, the a or really maybe financial especially you're wondering that event at the what into there's updates what then to December little to might would honestly, of any top heading terms products of you on moving or horizon the on And growth if in pipeline the and relevant looking XXXX, ahead maybe think

William McCombe

Let me earnings similar our at part first year. call, of quarter items. provide And on next when expect question. give year, of the fourth we just on year our customarily the quarter would comment the -- the We'll first each guidance is we guidance to same do thing for

-- than anything products, expectation pattern. our to that that. ask with different about doing don't And nothing have So this new what I'll an to point respect can significantly Wenbin I at be we'd normal we say

Wenbin Jiang

substantially what you invest R&D, just launched products and Yes. as naturally. the of to we year, And will in course can we this year. have you the being And continue launched see, new like over see

will reflect that how for and our serve shareholders. we So invest

Operator

Mason Next of with line question Carrico the Stephens. comes from

Mason Carrico

APAC. there. demand called what I any to in on strength to incremental Any there really just provide improve? You wanted Are willing if you China driving strength in the would seeing little additional and countries out dig color appreciated. there are you're ask trends be in a bit detail

Wenbin Jiang

Zealand, as as Southeast China. from well Japan, and New business APAC includes Our India Asia, revenues Australia,

reflects the area effect strength that in in total the So this continent. -- that

year, other forward you impact seen reporting. seen we but expect I sometime lot -- not and as have and we have severe seen -- a have look course, have return may we they China that. But Indeed, what think of normal to to we impact, to companies. and companies of overall, also from as been next clearly regarding other the some similar -- reports with So

Mason Carrico

And then much any give growth QX think assumptions great. really it. driven standpoint the as here, a that Got is quarter U.S.? quarter-over-quarter ramp detail Just in can being for fourth geographic do you really from incremental the on sequentially would assumptions be around of sequential we about the how the increase by

William McCombe

Wenbin the China. than momentum, strong Asia and I Pacific as EMEA other particularly in think have countries Asia in mentioned, we Pacific,

New quarter, the Europe. With continue Pac in to and Asia and Australia, Zealand would So to respect so good in on. fourth we expect momentum

the recovery service to in the to expect therefore, the some in that would is be grow growth we business, base. probably although the continue U.S., the of softer. X We And the installed lowest that growth will The any driven expect market major of U.S. by regions.

So that's as as color about much we give. can

Operator

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

Unknown Analyst

for sort we year rates just on John like, for you growth the have Dave. your wondering thinking the they that a color you're looking going could XX% saw was growth This longer-term business to to been below what are is give on bit historically. I any if this rates be XX% that because of

So on takes if puts be back you and future, to those you on what could in could thoughts potentially the some levels what would up bring appreciated. might give any be those, that

Wenbin Jiang

is Overall, challenged, we you for maintain to are some and in our What industry to the has the know negative above striving growth. been continue can areas, market. growth science see we life

Unknown Analyst

Okay. can looking And thoughts that how forward? spending tracking would going would just additional for give be about give you're and that you optimism you Great. CapEx on you what any

Wenbin Jiang

it's including are capital our at installed on to service on to our probably and term, instrument. right our reagents If applications business recurring, on about and solid about now based and -- yes, we reagents in to recurring to base. revenue Long look XX% -- continue XX% grow on going you invest today and continue

good So we about growth. feel our long-term

Operator

James. Andrew line Raymond Next from question comes of the Cooper with

Andrew Cooper

kick as potential a high funds customers. and how little low love high? similarly of a Maybe kind thinking as of expect of as a program Just tailwind low not to China not of Should trajectory would of stimulus of that the commentary some you not some there big maybe some for as get headwind the a a to the overall, or as of so you region, that some just start we sized think in out bit of from the those around smoother, you about about others. first, seemingly

Wenbin Jiang

to China. we new mind, base, technology top to been strongly going on I are when from Clearly, benefits established has advanced think China the will technology is to and starts our right we invest now Cytek well instrument, feel clearly off and kicks benefit. buying very go we of funding new start those And to see available program them. in funds great to and as user and the their

Andrew Cooper

That's visibility just Okay. delivered, looks book of of do the need a more of the order hitting, XQ go you you last what's at close at of a give what you least of hand quarter And guide, midpoint the the step-up. as you sort through sense what's Relative then like. X at booking? one in versus crack have the for to helpful. kind been months what kind us the or Can say, in sit today to and already look already the

Wenbin Jiang

are a We third month company.

quarter, the our we we X So weeks. at much X, actually, early -- we therefore, the expect November, last and are though last even continue weeks. coming with to now most upon last of regarding And full pretty the few orders weeks, few during the to rely

to too And us it's early so on for comment this.

Andrew Cooper

market one sneak process. biggest terms made bit in, would more the factors clinical the here update the that can. of just what in little U.S., of that sort an of a on states? But granular gating you've if in progress the in what clinical And are pathway maybe I'll Okay. getting more into to love I

Wenbin Jiang

One on. one process, think to we of parts is the there with which regarding the clinical. XXX(k) X is are I working are parts

second few now. and progress The the which we feel reputable the good about quite working have making is the LDT we with applications, U.S., labs are part a been right and in we

Operator

from [Operator Goldman with we comes Sachs. the And another Matt Instructions] have of Sykes line question

Unknown Analyst

This Evie ] is [ Matt. for on

more So fruit mostly can solid buying service through attachment the you're users instruments? had talk after contracts after customers going you don't How that trending? even have instrument new you you're going And rates get there. to some growth within rate current or services, attachment higher? that low-hanging of like are So then

Wenbin Jiang

revenue the used. also and related instruments Service frequently to is how right, relates base, installed being to are the

course, installed And so users that growing our revenue is base. over reflects, the on and -- we can of And first see our that buy rapid basically is also last I It's to contracts. many actually you the think service service right? will years, regard, how been quite clearly, has few increase related insurance, nicely, that and how of

used Second our are part to being how customers. regarding is those with instruments frequently

And so -- you enjoyed. to But XX% growth term expect of that's see and have to cannot of course, the our rate we long to kind growth to continue going base. installed XX%, track of continue overall,

Unknown Analyst

have think the age instruments then cycle to both to how you within for terms how due of And you and of trying replacement installed do Great. I'm just get think constraints current might start about in a sense environment, Okay. trended you the thinking your that's and base those then weaker when customers kick the competitors funding delayed whose instruments in. replacements CapEx might to and how be about replacing? of

Wenbin Jiang

to it's it's speaking, buy reason Yes. question. complicated new it's very funding is market, This bit for to is difficult more -- The little a under instruments. get -- current customers relatively

of kick biotech, are and new hand, more their is our excel. we other where pharma, technology. instrument they advanced So advantage to advance we working they instruments more we extend we see And another their have would technology have labs this like seen towards research we across This analysis. customers, many technology, where they of benefited seen do on the the excel. moving life in. drive the to high trying is customers harmonize have But Also, towards would like is to with clearly, and cell the to parameter we And from globally. They new have. programs really

clearly needs there standardization and serve of customers technology been has harmonization. for our Our on to the

Operator

meeting. you further the no time, questions Thank all are this conclude this There for participation. your does at and

disconnect. now may You

Cytek Biosciences (CTKB) 5 Nov 242024 Q3 Earnings call transcript