Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ArcticZymes Technologies ASA (LTS:0DRV, Financial) achieved a record high number of orders, totaling 342, indicating strong underlying business momentum.
- The company expanded its customer base to an all-time high, demonstrating successful customer acquisition strategies.
- Sales in the US increased by 25% year-on-year, driven by growth in the cell and gene therapy space.
- A new CDMO has onboarded ArcticZymes' SAHQ on their platform, signaling potential for future recurring business.
- The company is making strategic investments in team, systems, and global footprint to lay the foundation for sustainable long-term growth.
Negative Points
- Revenue was negatively impacted by a significant drop in orders from a major molecular tools customer, resulting in a 9 million NOK decrease compared to the previous year.
- EBITDA performance was adversely affected by currency fluctuations and investments in commercial transformation.
- The company experienced a decline in sales within the molecular tools segment, attributed to a planned reduction by a major OEM customer.
- There was a slight decline in sales in the EMEA region by 13%, which the company is working to address.
- Currency fluctuations resulted in a net loss of 0.7 million NOK for the quarter, compared to a profit of 0.5 million NOK in the previous year.
Q & A Highlights
Q: How are sales tracking into the second quarter of 2025?
A: (Paul Blackburn, VP of Sales) We've had an incredible April, marking a fantastic start to the quarter from a revenue perspective. We're seeing significant growth, especially in North America and in biomanufacturing, driven by our commercial efforts and business development activities.
Q: There has been a consistent decline in molecular tools sales over the last few years. What actions are being taken to address this?
A: (Michael Arco, CEO) We've focused on developing the biomanufacturing part of the business due to its unique opportunities. However, we are now turning our attention back to molecular tools with targeted campaigns like the DNA breakup campaign. The decline was also influenced by a temporary dip in sales from our largest customer, but we expect orders to resume in the second half of Q2.
Q: Can you quantify the impact of revenues from the two CMOs enrolled in the second quarter?
A: (Michael Arco, CEO) It's still early days for these partnerships. While initial projects are in early stages, we see potential for involvement in later-stage projects, which could significantly impact revenue. Our nucleases offer outstanding yield, cost reduction, and safety benefits, aligning with trends in cell and gene therapy.
Q: Since 2022, revenues have been on a declining trend. What is being done to reverse this trend?
A: (Michael Arco, CEO) Our strategic priorities focus on having the right products, team, and processes. This includes developing GMP-compliant enzymes, enhancing customer engagement, and improving lead generation. Although it takes time, we are on the right track, and we expect to see positive revenue development as projects mature.
Q: What are the internal KPI settings for the commercial team to drive growth?
A: (Paul Blackburn, VP of Sales) We've incentivized the commercial team to focus on new customer intake, quality opportunities, customer retention, supported customer trials, and forecast accuracy. These factors are crucial for driving the right business behaviors and growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
