Earnings call transcript Q1 2023

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Operator

Greetings. Welcome to the Singular Genomics Systems, Incorporated First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Philip Taylor.

You may begin.

Philip Taylor

operator. you, Thank Singular Spaventa; are and Executive Chief Presenting Chief Genomics' Financial Drew and Officer, Officer, today Founder Dalen Meeter.

Genomics XX, of Earlier months website. available Singular released for company's results today, the on ended the March press XXXX. the copy A release is financial X

and statements, press responses filings management's only begin, with from today filings we opinion views and information by result expectations statements release. today, X, including and differ XXXX, the and may statements those our as will certain plans, like questions a today's include release during and materially and you or X-K recent fully that in with Actual and to Securities XX-K strategies. financial as these our of implied predictions, XX-Q Before your described press in are inform most issued today's uncertainties Form more and and forward-looking to filed would results related These plans earlier comments and our risks I estimates, Commission, to Exchange including expressed call risks reflect May the results, operating of and other Form uncertainties. our and

our on forward-looking statements. statements. Investors undue or reliance update revise these Our We to or can be on disclaim not to SEC filings found the website. forward-looking cautioned SEC's website are place any obligation

our website, in this that for investor.singulargenomics.com, call replay will at note conference on Presentations available Please section. and be the Events audio

call turn With Spavanta. that, I over to the Drew CEO, will

Drew Spaventa

progress and updating Earnings productive First business. Singular welcome It Call. was you made we to the forward quarter, and look afternoon, XXXX across to Genomics' on the Good another Quarter

execution; areas: opportunity; on X key two, operational innovation and pipeline. focus the execution; our one, update We our four, market will three, following commercial

to field. am system GX book the positive including proud in Starting the team's work in report with of an for busy progress company, I QX. shipments, utilization execution. order and am quarter increasing new the during the commercial another increase pleased I commercial the of

X We shipped and X GX commercial a systems included lab. during clinical quarter. academic labs This the

We is and traction the a getting GX are the flexibility power, different we to believe which value encouraged to customer proposition speed, see accuracy. segments, of the testament across

and during service installations instrument to placements quarter, sequential with quarter-over-quarter contributing team engaged GX growth addition system rental recognized X quarter. customer shipments, was X and Our revenue actively shipping during the the support revenue reagent as we trainings on in to

validate relates to Customer continues the cases as field. use in feedback proposition to the value it GX's

that, with with we For the the example, we GX pleased from have of Singular noted Overall, the are Mexico Genomics. very University performance New and of the support received

facility doing of core has many GX that projects, fits and perfectly kinds different Our into users the setting.

the like CUT&RUN successfully and for and GX single-cell used We epigenetics ChIP-Seq bulk XXx have genomic RNA-Seq assays for RNA-Seq, assays.

consistency visit opportunity of I the addition, to run and on recently cells data a run. feedback individual In the in The the prospective they and quality cells and with several the GX positive, fast across X impressed lanes system, with of customers customers were area. flow flexibility the of times, noting the in had Boston was flow

the customer and the customers expect onto GX. we work utilization in of Early ramp is pull-through their to increase into over experience and time still its early this gain the consumable with more stages, and as move system

to and complex technology, usability improve which we Consistent designed implementing to with to system of launch the the enhancements intend are any continue and new robustness. further

time. the this field pull-through for support over systems increasing and in We expect utilization consumable to

and advancement I our genomics medicine. want their early for customers accelerate to thank the of mission and continued partnership support our to sincerely in science for

about confident fit. the total market, product market GX's opportunity. We TAM, addressable market or remain to Turning our and

applications mid-throughput NGS the of sequencers, billion and to made the of translational addressable by GX. X/X predominantly the such about portion compelling needs provider. labs alternative half This market is a largely market panels, that up by customers' over such in continue clinical believe a $X as RNA-Seq and a roughly addresses X/X research and that market as is labs single-cell broadly We targeted of running today GX provides RNA-Seq. single today is served and The NGS these

engaged Our there sales fulfills decision-maker; criteria: need; with A sales growing, near-term four, is there is and strong we funnel sales a and budget specific timeline qualified there to is with available; opportunity a two, qualified one, X opportunities. is three, triple-digit these are purchase. the

academic can labs. power day. requirements While volumes seeing from early the and often results wide The core of up GX of are managing of runs, labs are funnel the spans varying range enable a market a flexibility a scaling speed, segments, Core traction PIs' sample output needs we labs sequencing optimize experiments on of or the variety delivering these in with than applications. down to their based less and combined and

systems methods Cancer labs, the core them at Orlando. the research the and in academic recently Research applications, labs. along make Conference capabilities, Association and clinical some of and flexibility with for American speed innovative the performance commercial Beyond showcased We ideal GX's for

detection. any presented sets and the market in more other applications data cancer rapid sequencing somatic deliver posters with demonstrating we including speed, power variant operational the germline to and Here, efficiency for technologies and ability GX's data research, than in

the While funnel customer base, smaller of part segment and installed grow the the we our GX over establish we sales represents as to the increase of reference sites in clinical a number expect market. grow market the time today, this

Turning to operational execution.

usability to manufacturing process Our focus continuing been improve optimizing on has GX. streamlining the of chain, supply the the and robustness the and

the to growth and in our a infrastructure set second year the half We XXXX. and on execute next of continue of support phase capabilities into foundational of to

represents QC and to production to testing additional redundancy We implementing support. and accomplishment vendors In service parts, and improvement GX operations, refine ISO component certain our improve reducing Diego, to Internally, improve recently we specifications incoming and to up components steps continual that product alternative build for field XXXX These San enhancing working critical time manufacturing are commitment we taking facility received include dedicated steps for increasing suppliers capabilities. required GX our testing. and are for the our quality. a and certification instrument the bring in milestone in with

Turning product innovation our and pipeline. to

pipeline including about workflows excited kits application performance and improvements and specs the consumable specialty are of and novel applications. in GX, innovations, content We the on kits higher-throughput for specific with

to our the customers. reads have FX run offerings and widely expand FX started flow will throughput doubling shipping cell cells number We applications. early-access the the consumable on GX, most for flow The of

for This kit users this earlier is get sequencing. launch achieve cell, the reads this to a year of in to Read up Max billion allow commercial for flow We addition, designed announced X.X we In reads kits XXX to benchtop on or format per million our to quarter, Max provide look NovaSeq-level full single-cell run. pricing a early-access system. Reads forward release to QX. offering with a in novel later single-cell sequencing this method per kit

single-cell FX significant set widely the to our second in the we and provide target With in these wide customers XXXX, demand, differentiated to expect half both available in kits see M-Series highly as value of kit a uptick GX of system markets. an

of the pull-through, reagent given prices kits. an the Max Read kit and higher and FX We also uptick expect both data corresponding outputs in

team And on working a and finally, continue progress development. the to PX methods PX we the system, focused instrument with

TAP, potential several with engaged also or technology are partners. access We

and applications in develop. demonstrate system in these high-throughput provide working PX's are the to in to and lab on we single to additional KOLs as We sequencing to spatial continue busy with the At this technology collaborating sharing novel the look updates stage, utilizing we information in-situ cells tissue. are forward

call the over would like commentary provide XXXX on some to the turning Dalen, Before directional I to outlook.

lay foundation a XXXX sustainable phase the and for to deployment moderated a right prepare scaling systems We to appropriate the the in in continue year. half believe for early second success of of is

respect the to a We commercial positive the to are start engine. seeing with year

strong, sales of qualified opportunities number and funnel is is growing. Our the

We are We during traction will GX in customer labs. in of the field getting second being with be the of cycles the the year, in in more placed X purchases academic budget segment year. in the believe end-loaded academic back systems our half resulting X segment, early in this

in in driver of adoption this our more many significant addition, of broadly FX Max and for kits opportunities a high interest available funnel. be become will they believe remains In as We the our months. customer in Read coming the

Dalen through details Now go financial I'll the to over to our first quarter call results. the turn of

Dalen Meeter

Thank you, provide Drew. of I'll I'll financials. directional start metrics by XXXX. rest for covering the key Then QX XXXX on remarks the additional

revenue $XXX,XXX, totaled up first made the instrument of X on predominantly the the quarter. placements quarter an recognized during additional of for Revenue XXXX

$X.X and support expenses the $X.X year-over-year to in compensation for our primarily the first totals included $XX.X increase expenses was million for $XX compared XXXX million driven for scaling stock-based total million, totaled of operating These GX of of XXXX. expense QX headcount XXXX. SG&A QX in by quarter growth in to XXXX launch. noncash the quarter Operating The first million

for quarter first compared loss million, of quarter of XXXX. or in per the $XX XXXX first Net share, or to $XX.X $X.XX per was $X.XX the share, million,

calculate count share first million. loss approximately weighted-average quarter Our per for the net was XX.X to used share

And million. restricted excluding cash, cash $XXX.X equivalents and cash, investments, totaled short-term

through target customer the XXXX, segments. GX's being is market proposition comments with to instrument and Turning field validated value on our discussions placements

placements, Our and drive team to systems, working consumable installing GX utilization. is and early customers supporting new training supporting

utilization about we time. As early patterns stages, expected, anticipate early pull-through and customer is in the more over learning

be concentrated from second kits. mentioned the in and As resulting expect year, Read cycles Max Drew, to half FX the commercial budget by sales the and releases of we of

our Regarding operating expenses, we are steadfast expense management. focused in

expect intend directly existing provide manage increase the second we While 'XX GX resources cash do to to investment XXXX. areas of in half modestly into the runway we success, to related to

closing back and for you, Thank remarks. Drew to

Drew Spaventa

Thank quarter value has I'm markets. during the in In interest is The GX of resonating, proposition our made and the progress earliest target you, our our commercial closing, team proud with is customer placements. growing Dalen.

taking course build the operations scale the are steps the foundational to our right of over We infrastructure year. the to

a kits have portfolio improvements, system new and strong product future. positions the innovation us We that an for pipeline well of

to by product and meticulously and building a and managing business confident team to sound on path long-term Our prioritizing expenses driving continued executing with profitability fundamentals committed innovation, to over launch, remains a activities key and our value time. investments ensure

open Now let's to questions. up the Operator?

Operator

from Your Tom Stevens, [Operator is TD question first coming Cowen. at Instructions]

Tom Stevens

on a one just quick So placements.

bigger like, back more manufacturing challenges you in So follow-ups be areas continue you much quarter in with the to I've half. talk Can you're got to some And on X about and some consensus, on? some and looks baking that. about the a see precise of for work you continue it maybe maybe then line that was with

Drew Spaventa

for thanks the Drew. question. Tom, This is

the we're I system are encouraged think, how using is system. customers really the the where and overall,

that ways GX, instrument you're robustness, faster the of On modes. going run going very manufacturing of also you're common kits, learnings system have the the times have such and the that upgrades improving and and it's side, the reliability additional a such you're as run a to with complex incorporating to variety as

what doing components internally we doing for I'd of the subcomponents. management work say control core them working of We're on of lot vendor right those of now incoming is the testing also quality quality complex into doing instrument. we're control before put a

improvements there's those the or subcomponents. also or learnings the the incorporate X reliable very the then moderated November/December, in the upgrades, taking putting the the changes instruments year you in make part system is There that you field. X and of number pace to first just and natural. make can. a small robust in things And to of first you want the of in time half systems the those And the places really most and And after is where to and this slower learn back are things change field

all you're moving the through So the it's typical. challenges a predictable not of go just that very making with system many assembling and with them building things that are and them working a really way just sure thing. and normal complex It's one in all parts

for gold to So point comfortable where one kind companies We're to get efficiency really it years it's the the many going where take of manufacturing that standard-level have budgets. not it are, thing. it's doing large with it's to and like been harden we time system and

Tom Stevens

Absolutely. makes sense. That

mid-teens capacity going in the in kind half, maybe terms at, the than slightly production of is moment, kind the half? you're initial, back capacity ramp for back at I expect or where given should of more into of guess, aggressive So the we

Drew Spaventa

of think think pace comments lot Well, under made the getting first we're I we deployments. for kind feet And of it's numbers. of us, consensus demand half, I the aware for really the definitely, of the very there's And there. out moderating a our

ready So it's to just making really sure scale. we're

into being our aware able sync really through of in numbers. ramping plan line the be think consensus And kind half, we're supply have I of with and in demand to QX is of second more the In QX. to X-to-X kind and

of setting field scaling, And And you're right technical all is again, have support, expectations as that this right application the way. customer. making about the part you the sure it's support, you're

So believe we they're it's is I so ensure customers and are to will half, important the can second way sure make scale thing we our in happy appropriately think yes, and sequencers. capacity go trending up is we and the demand. so that successful using And

Tom Stevens

Right. And one, could. then PX, I one just the on last if

kind go. they'll guided embarking great what of they'll kind as any it's I checks you some the to So what guess, could give to of more of almost you or with? running hear color projects be to TAPs ready on PX kind be

Drew Spaventa

say next on there's to on of in of that assays, to help provide with, engaged capabilities the in color really partners capabilities can't. more that their those can with over provide the in tissue this. and partners new of kind the data X to receive really academic we've picked things them to then can we've kind a that or note systems we'll run PX offers. sequence institutions KOLs we a offer months make new being all that And variety PX is to few that cells that space. to demonstrate And them work applications samples, able other we'll show cells and the next and work with the in of What Yes, call leading novel

of place we'll year, a Over on information lean share very it. the think more team And I we're where again, we that. on have in a the course working

turned in-situ right partners sequencer we good we awesome do. So that be TAP X really examples to We novel many that can capabilities partners are we these but expectations potential set offers. bandwidth many, now, really have on want we the modestly because we away just what of think chose will don't that

Operator

coming from Your next is at question UBS. John Sourbeer,

John Sourbeer

you're like markets. the sounds in having academic some success It

Just fit any then you're the that for is winning. the into on those labs? that thinking customers think launched, kit, the Max I additional you Read to how that with color those when academic do going you're could you're where guess, how potential when And conversations

Drew Spaventa

John, this Thanks is for Drew. the question. much so

And a to I if labs or to have an take shorter ability sub-XX instrument's of times, academic kits, even the just get XX you or sequencing, with that by run data the proposition value the think academic that really fits one is doing experiment a people think about the sample, how fast and labs investigator GX are to well down, run even faster, mixed for ability which turnaround lot community. the to hours core the the up gives or ability or and that's mean ability scale part. Go; in press I the for XX to what

is important part that flow that's you equally up the load cell. But a single can

or capacity. And ability point to down giving higher worth to And really in, fill or that same in given flow up has operating cells a higher change multiple it really or throughput in come more go flow week, to they're cell, lab. cadence can the they price by lab XXX them have a of a token, press is Go; scale samples at has doesn't and and run cost-effective throughput their attractive. a which gigs don't that day You fill the up that

workflow those just and labs. a So fit usability really it's from a for nice a standpoint

the have the and lanes sell sell is lanes. sequencers that's nice individual And individual individual of or really they samples, lanes. other other individual A lot core don't I think thing about GX labs

out forced It that's data doesn't own FX very run they else. cost price an have or that's points if to and are flow unique. to given and buying exist are want X-lane going can or to $XXX $XXX cell buy higher much ability their only lane. lane an a say, of or FX, somewhere on Typically, a $XXX; So for you more single people you a they their

a think why the labs doesn't really it's solution providing are unique exist. of That's so that So I kind interesting. academic

that and other most think targeted labs and what we've spot library running, panels. the offering that developed academic right sequencing sweet I partnerships And in of the of set are point all are application which RNA-Seq, then is the we're is one single-cell that these

So all much fits so it there's and think kind I traction why on interest of fronts, just there. that's and

more labs Max Read throughput is I or FX that more just volume of about. volume. variability and just already what in better economics an maybe extension for It's higher talked even and providing have

of A to done a academic kind value for really the They're have to reads that's as that. million And possible cell lot also as proposition. and get -- once the to that kit. a right about have saying, capture that, be, those single now, it's but It million will of customers doesn't Read, flow place there's exciting you it's just funnel exist. attractive then at And it? is per lot the that an system. on out in the you in for of want we single When want and unique. customers again, in soon really it it's Max I XXX that having the interest are have And reads get waiting in specifically, cell, cell segment single capacity a $X

John Sourbeer

you have could installs? can initial also from the on just you ramp GX? Appreciate it's that. like placements or find the you field, days, to on, those software, any now early touch And areas starting those how I users learnings know on out but Any that just color that are in

Drew Spaventa

exomes of types library say, on diversity system. and I'd That's see, cool. to to RNA-Seq the just single really It's of that's paired-end by the kind we're targeted panels something applications, to speaking, different everything applications. providers working different encouraged and prep cell broadly from of cool

are ramping Different different at customers rates.

the that of day-out people into frequency learning the those learnings, and And that you Some the the high only learn hands. are and things much transparently, to supporting we customer have and in when you types quicker systems their system. talked I that and about usage upgrades somebody at in all day-in things system using third-party all using of system, we're taking that the directly when we're you about learning And incorporating hands. see are

you player On run that's could faster better allow kind software it's existing area a major an and other can of time. common the that times, where over specifically, with handling. component. software see the side, That there, error upgrades pretty out systems in UI be will It

going always initial make product there's are So and that in. and improve launch hard time enhance also experience. you're typical when we're on And established with to cadence software at over a an that you things be many working on, probably upgrades frequent early those a more that's than the that user years

John Sourbeer

think Got one remarks, on your last was mentioned it. you that then selling And cycle. reagent rental X I my in guess, there I through the positioned end, prepared here Drew, actually

any how there you potentially could expand base? that and Just the opportunity some think of user color the on

Drew Spaventa

talked It's we've it a think have to that kind on could menu get how encouraging. system. want we about of I people before, I mean, options a of

support, sale a we of So equipment. of piece obviously, the

option. have a We lease

We reagent option. have rental a

-- were upfront traditional that if of run of a We're out a reagent will money purchase. mid-throughput without way starting system kind be on and reagent in and I better interest system and than a consumables use that a nice I the traditional a the rental system somebody But this think into has economics you think is kit. interest capital to there buy with rental. to over current get time the still been commitment pocket could really of has the our the see the majority way to in it

view in So look if the in context on it's like system. or kind a attractive very at you of what's NextSeq of benchtop existing offering of it kind

Operator

next Bank for Ryskin, today Your question at from is coming America. Michael of

Michael Ryskin

the there. last going little First the just tack-on just reconcile a bit was want numbers quick you I be sure said one to to very I make correctly. to

In revenues think XQXX, you I for X and but you X. also shipped you revenues you said for shipped you also X, recognized X. this accounted quarter, like

see that both Is really that the are that of in were those part other of some you So March base are that are now, the sort there just were X reagent like rental? the revenues Or didn't of the installed from? delta? late

Dalen Meeter

had on in December, Mike, and We this recognized QX X the Dalen. revenue we of is shipped at had systems X. end

other We into reagent X one ones, in on shipped to expect rolled here QX. new X rental, a So QX. one. recognized X, the was recognized One on those recognize we'll and

Michael Ryskin

That's Fantastic. I looking for. bridge was the exactly

that to going you and Just say can give of pull-through state post some reordering the getting are you you're X pull-through initial, X install? equals when idea then consumables about of, think from All question terms Is And out anything reordering So is in rate utilization. shipment they Are over to to comes X, reordering Anything just first then a those X. and customers consumables can at do faster say that, how perspective? boxes what real you're, initial still months when us placements the up. and plus to making consumables? I or said, ramp X it quarters just know like, terms think time. sure to you the hit of given in X right. a there? But you these steady

Dalen Meeter

It's still Good utilization about So right? very early we're you'd question. learning the patterns. days, like mentioned,

out customers. with is team engaged Our there

And we're more definitely up utilization going time. the here so curve to customers about ramp how learn over

QX XX,XXX. The consumable in revenue was

the expect. in you'd still as quarter, instruments pretty small. So Predominantly

We and do of some to discounts go through customers. early offer these

on And comfort turning engage Over of a think think this. it, to normal the helping with volume the with more comfortable as and I the volume are I think they over. teams move over, just kind to applications adds speed of sample used I and system, move as that. pretty proposition to get just will value more over more that they time, understand our and there, their that's start launch flexibility, like

consumables. those on broadly, the that, and offer essentially kit. FX Both the In to the more Read increase addition the to ASP kit Max we're throughput the going

we that So going once be tailwind think, get issued. us I a for broadly to, more nice that's

of ramp-up. about we But kind multi-quarter really think as this a

a could the as X, to learning them share in to we said, I steady here out over anywhere quarter. be it But and we'll internally. we customers utilization. field how of get the definitely state That's that So we're kind think X, about months next running see XX more like more

Drew Spaventa

-- Michael, just to customers. credit of or on, early know discounting. tack they reagents go And Dalen mentioned don't misspoke meant he he say, a Part as through if their -- of in to but credits as obviously, credits, for it I through reagent as we're as the their revenue. start not show they But booking revenue realized will reflected on to reagents revenue people run as up well. ramp

to kind start expect of up we So more. to show that

Dalen Meeter

That's right.

Michael Ryskin

last And sense. Makes could more in. I one squeeze if it. Got then a one,

to but cut sure caught the know answer I was half, -- Just if in properly. think make this I don't I

So appreciate repeat. I would the

overall X exit a to make rate Or table. previously ramp? year talked if as for half to talked still the couple to Is number about that even the about that's the want one Just X I about month, it's whole, back X quarters. a You with the shipments X for the sure XXXX last right think to as way on definitely still an per the back you've end-loaded. that's the year?

Drew Spaventa

kind QX. And and back the scale beyond we've side we pace numbers, in to and I I half, through of think the redirected that, of QX kind and of in they think consensus the of to of first the show for that kind the moderated lower kind last then quarter-to-quarter and really the scaling year. a appropriate more call pointed of in

of kind guidepost that's how good a think we're I about So for it. thinking

really a QX, to kind that's lead of that of quarters really those ramp. us we'll us, and and for to will believe when really be see we start QX factors Definitely confluence strong

Operator

the This concludes question-and-answer conference session call. and

this You for your your may participation. you disconnect Thank time. lines at

Singular Genomics Systems (OMIC) 9 May 232023 Q1 Earnings call transcript