Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Standard BioTools Inc (LAB, Financial) delivered a solid first quarter with results on plan and in line despite a challenging operating environment.
- The company has a diversified portfolio and a disciplined operating model, which positions it well to navigate market dynamics.
- Recent high-impact product launches, including the new SomaScan offering, expand the company's reach in translational and clinical research.
- The company has a healthy cash position with $261 million in cash and equivalents and no material debt, providing financial stability.
- Non-GAAP operating expenses improved by 22% year-over-year, and adjusted EBITDA improved by 29%, reflecting effective cost management and operational improvements.
Negative Points
- Revenue for Q1 was $40.8 million, down 10% year-over-year, indicating challenges in maintaining growth.
- Consumables and service revenue were softer than usual, particularly in The Americas, showing variability and potential market weakness.
- The company faces headwinds from new tariff measures, adding complexity and potential cost pressures to global trade.
- US Academia funding delays and project timing issues negatively impacted revenue, particularly in consumables and services.
- Non-GAAP gross margins decreased to 53.2% from 56.2% year-over-year, impacted by lower volume and price realization on services.
Q & A Highlights
Q: How should we think about the percentage split between the first half and second half of the year regarding revenue?
A: Alex Kim, Chief Operating Officer, explained that while they are not providing specific guidance, they expect larger projects to hit in the back half of the year, driven by internal funnel metrics rather than seasonality.
Q: Can you share insights on the instrument demand and sales funnel going forward?
A: Michael Egholm, President and CEO, noted growth in the sales funnel, particularly for the Hyperion XTi, with traction on other instruments as well. The momentum from last year's difficult CapEx environment carried into Q1, but no significant pull forward was noted.
Q: Has anything changed regarding your M&A pipeline and potential timing of deals?
A: Michael Egholm emphasized that strategic M&A remains a core part of their strategy. The current macro environment offers more actionable opportunities at improved valuations, but they remain disciplined, recognizing their healthy cash position as a key asset.
Q: How has the US academic and government sector trended, and what does the mid-teens decline in revenue include?
A: Michael Egholm stated that the mid-teens decline is still expected, with delays in consumables orders and some institutions unable to commit to buying instruments. The impact of less funding in US Academia is evident, and they are maintaining their guidance.
Q: Are you expecting the Illumina partnership to generate significant revenue in 2025?
A: Michael Egholm expressed excitement about the upcoming launch, but they are cautious for 2025. Alex Kim added that while there will be moderate growth year-over-year, significant growth is expected in 2026 and beyond.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
