Summary of 908 Devices (MASS) FY Conference Call - June 04, 2025 Company Overview - **Company**: 908 Devices - **Industry**: Handheld chemical detection technology for public health, safety, and defense Key Themes and Core Points 1. **Strategic Transformation**: The company has completed a significant transformation, exiting the desktop business and focusing solely on handheld chemical detection, which is expected to enhance operational alignment and financial performance [5][6][11] 2. **Financial Performance**: The company is on track to achieve adjusted EBITDA breakeven by Q4 2025 and anticipates full-year cash flow positivity by 2026 [9][40][42] 3. **Market Opportunity**: The total addressable market (TAM) for handheld devices is projected to reach $2.5 billion by 2027, with the handheld revenue growth outpacing that of the desktop segment [12][40] 4. **Product Portfolio Expansion**: The product lineup has expanded from one to four handheld devices, with plans to increase to six by 2026, enhancing the company's ability to address critical health and safety applications [39][41][43] 5. **Revenue Growth**: Q1 2025 revenue reached $11.8 million, a 59% year-over-year increase, driven by an 86% increase in handheld product and service revenue [47][48] 6. **Recurring Revenue**: Recurring revenue grew by 54% year-over-year, indicating strong demand for services and consumables [48] 7. **Cash Position**: The company ended Q1 2025 with approximately $124 million in cash, bolstered by a $70 million inflow from the divestiture of the desktop business [50] Industry Dynamics 1. **Opioid Crisis**: The company is positioned to address the escalating opioid crisis, with increasing demand for advanced detection technologies to combat synthetic drugs [15][16][18] 2. **Global Security Concerns**: Heightened global security needs are driving demand for modern detection tools, with NATO allies projected to increase defense spending significantly [20][22][23] 3. **Public Funding Trends**: There is a favorable funding environment for public safety technologies, with increased investments across various sectors including law enforcement and military [19][23] Additional Insights 1. **Sales Cycle Variability**: The sales cycle varies significantly across different channels, with state and local sales often turning around quickly, while federal military sales can take years [55][56] 2. **Competitive Positioning**: The company emphasizes its comprehensive service approach and modern technology to compete against legacy products in the market [60] 3. **Future Growth Catalysts**: Key growth drivers include the modernization of outdated FTIR units, the launch of next-generation handheld devices, and the full-rate production of the U.S. DoD AvCAD program, which could add over $10 million in annual revenue potential [32][36][42] Conclusion 908 Devices is undergoing a transformative phase, focusing on handheld chemical detection with a robust product portfolio and a favorable market environment. The company is positioned for sustainable growth, backed by strong financials and macro trends in public health and safety.

Core Insights - A deal with the Romanian Customs Authority has significantly boosted the stock price of 908 Devices, which rose over 18% [1][8] Group 1: Deal Announcement - 908 Devices announced the deployment of 27 MX908 devices by the Romanian Customs Authority [2] - The MX908 devices are handheld machines capable of rapid chemical analysis, identifying various substances in seconds [4] - The deal was facilitated through a European Union program aimed at enhancing border control capabilities for member nations [5] Group 2: Company Impact - The CEO of 908 Devices highlighted the proactive measures taken by the Romanian Customs Authority to enhance safety and security at the border [6] - Although financial details of the deal were not disclosed, it is expected to generate revenue and improve the company's reputation [7]

908 Devices Inc. (MASS) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a changing ear ...

Financial Data and Key Metrics Changes - Revenue from continuing operations was $11.8 million, an increase of 59% compared to $7.4 million in the prior year period [6][22] - Adjusted EBITDA loss improved nearly 50% year over year, with a loss of $4.6 million compared to a loss of $5.3 million in the prior year [7][27] - Net loss from continuing operations was $9.8 million, up from $5.9 million in the prior year period [27] - Cash and cash equivalents at the end of the quarter were $124.3 million, with no debt outstanding [28] Business Line Data and Key Metrics Changes - Handheld product and service revenue was $11 million, up 86% from $5.9 million in the prior year, driven by $4 million in revenue from recently acquired FTIR products [22] - Program product and service revenue decreased to $100,000, down $1.4 million year over year [22] - OEM and funded partnership revenue was $700,000, with no comparable revenue recorded in the prior year [24] - Recurring revenue represented 37% of total revenues, amounting to $4.4 million, a 54% increase over the prior year [25] Market Data and Key Metrics Changes - The company is seeing strong interest in modern detection equipment across military and security agencies due to heightened geopolitical tensions [9] - The Texas Department of Public Safety placed a $2 million order for MX908 devices, reflecting urgency in modernizing public safety tools [11] - The EU's Rescue U initiative is prompting member states to build strategic stockpiles of response capabilities, with significant orders from countries like Finland and the Czech Republic [13] Company Strategy and Development Direction - The company is focused on three strategic areas for 2025: market expansion, advancing innovation, and reinforcing financial discipline [10][19] - The transformation aims to position the company in higher growth handheld markets aligned with national security funding and public health responses [5] - The company anticipates positive adjusted EBITDA by Q4 2025 and full-year cash flow positivity in 2026 [19][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities arising from increased national security funding and public health initiatives [8] - The company expects total revenue growth to accelerate above 20% in 2026, driven by expanding handheld adoption and launching next-generation products [30] - Management reiterated confidence in achieving cash flow breakeven in 2026, supported by a healthy cash balance and streamlined cost structures [28][30] Other Important Information - The company has transitioned its production from Boston to Danbury, Connecticut, which is expected to lower facility costs and improve margins [20][44] - The strategic divestiture of the biopharma desktop portfolio has fortified the company's cash position and reduced operating costs [5][19] Q&A Session Summary Question: Insights on RedWave integration and cross-selling opportunities - Management highlighted successful integration with RedWave, leading to a diversified product portfolio and increased sales team efficiency [38][39] Question: Update on the transition to Danbury and annual savings targets - The transition is progressing well, with expected annual savings of approximately $2 million from the move [44] Question: Timing for full production mode on the AvCAD program - Management expects a decision on full-rate production by the end of the government fiscal year, with potential revenue ramping gradually [51][52] Question: Visibility on government contracts and installed base expansion - Management noted good pipeline development for federal and international opportunities, with a diversified sales approach [70][72] Question: Pricing strategy and capacity utilization in Danbury - Pricing is expected to remain stable for 2025, with immediate cost benefits anticipated from the Danbury facility [75][76]

Financial Data and Key Metrics Changes - Revenue from continuing operations for Q1 2025 was $11.8 million, a 59% increase from $7.4 million in the prior year period, driven by strong device sales [6][23] - Adjusted EBITDA loss improved nearly 50% year over year in Q1 2025 compared to Q1 2024, reflecting the impact of the strategic transformation [7][28] - Net loss from continuing operations for Q1 2025 was $9.8 million, compared to $5.9 million in the prior year period, largely due to a non-cash charge related to the RedWave acquisition [28] Business Line Data and Key Metrics Changes - Handheld product and service revenue was $11 million for Q1 2025, up 86% from $5.9 million in Q1 2024, primarily driven by $4 million in revenue from recently acquired FTIR products [23] - Recurring revenue, which includes consumables, accessories, and service revenue, represented 37% of total revenues, amounting to $4.4 million, a 54% increase year over year [25] - Program product and service revenue decreased to $100,000 in Q1 2025, down $1.4 million year over year due to the completion of initial low-rate production deliveries [23][24] Market Data and Key Metrics Changes - The company is seeing strong interest in modern detection equipment across military and security agencies, particularly in response to heightened geopolitical tensions in Europe [10][14] - The U.S. government has increased its focus on drug interdiction, which is expected to drive future procurement opportunities for the company's handheld devices [8][9] Company Strategy and Development Direction - The company has established three strategic focus areas for 2025: increasing adoption of devices for public health and safety, advancing innovation in analytical tools, and reinforcing financial discipline [11][20] - The transition of production from Boston to Danbury, Connecticut is expected to significantly lower facility costs and improve margins, supporting the path to profitability [21][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA by Q4 2025 and cash flow positivity in 2026, supported by growth drivers and cost savings from facility consolidation [20][31] - The company anticipates total revenue growth to accelerate above 20% in 2026, driven by expanding handheld adoption and launching next-generation products [31] Other Important Information - The company ended Q1 2025 with $124.3 million in cash and cash equivalents, with no debt outstanding, providing a strong financial position to support future growth [29] - The company is focused on maintaining pricing stability for 2025 while monitoring potential tariff impacts [72] Q&A Session Summary Question: Insights on RedWave integration and demand acceleration - Management highlighted successful integration with RedWave, contributing to a diversified revenue stream and strong sales team performance [39][40] Question: Update on the transition to Danbury and annual savings - The transition is progressing well, with expected annual savings of approximately $2 million, with benefits anticipated in the second half of the year [44] Question: Timing for full production mode on AvCAD - Full rate production decision is expected by the end of the government fiscal year, with potential revenue ramping gradually [51][54] Question: Installed base expansion and gross margin benefits - Over 2,800 MX systems are active, with a significant portion under service contracts, and next-gen systems are expected to provide gross margin benefits [57][58] Question: Visibility on government contracts and pricing strategy - Management noted good pipeline development for federal and international opportunities, with pricing expected to remain stable for 2025 [66][72]

Group 1 - 908 Devices Inc. reported a quarterly loss of $0.22 per share, better than the Zacks Consensus Estimate of a loss of $0.27, and an improvement from a loss of $0.33 per share a year ago, resulting in an earnings surprise of 18.52% [1] - The company posted revenues of $11.78 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.99%, but showing growth from $9.99 million in the same quarter last year [2] - 908 Devices shares have increased approximately 160.5% since the beginning of the year, contrasting with a decline of 0.6% in the S&P 500 [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is -$0.18 on revenues of $12.3 million, and for the current fiscal year, it is -$0.63 on revenues of $55.48 million [7] - The Medical - Instruments industry, to which 908 Devices belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook for stocks in this sector [8]

Revenue Performance - Revenue from continuing operations for the three months ended March 31, 2025, was $11.8 million, up from $7.4 million in the same period of 2024, representing a 59.5% increase[140] - Total revenue for the three months ended March 31, 2025, was $11.777 million, a 58.7% increase from $7.422 million in the same period of 2024[190] - Product revenue increased by $3.297 million, or 63%, to $8.529 million for the three months ended March 31, 2025, compared to $5.232 million in 2024[191] - Service and contract revenue rose by $1.058 million, or 48%, to $3.248 million for the three months ended March 31, 2025, compared to $2.190 million in 2024[195] Profitability and Losses - The company incurred net losses of $9.8 million for the three months ended March 31, 2025, compared to $5.9 million for the same period in 2024, indicating a 66.1% increase in losses[140] - Loss from operations for the three months ended March 31, 2025, was $(11.026) million, compared to $(7.611) million in the same period of 2024, representing a $3.415 million increase in losses[190] - Gross profit for the three months ended March 31, 2025, was $5.541 million, up 42.5% from $3.887 million in 2024[190] - Gross profit margin for product revenue decreased to 45% in Q1 2025 from 54% in Q1 2024, reflecting a 9 percentage point decline[191] Operating Expenses - Total operating expenses increased by $5.069 million, or 44.2%, to $16.567 million for the three months ended March 31, 2025, compared to $11.498 million in 2024[190] - Research and development expenses increased by $0.537 million, or 16.3%, to $3.829 million for the three months ended March 31, 2025, compared to $3.292 million in 2024[190] - Selling, general and administrative expenses increased to $10.2 million for the three months ended March 31, 2025, up by $2.0 million, or 25%, and accounted for 87% of total revenue[199] Cash Flow and Financial Position - As of March 31, 2025, the company had cash, cash equivalents, and marketable securities totaling $124.3 million, sufficient to fund operations for at least the next twelve months[204] - Net cash used in operating activities was $15.0 million for the three months ended March 31, 2025, primarily due to noncash charges of $50.5 million and changes in operating assets and liabilities[212] - Net cash provided by investing activities was $50.3 million for the three months ended March 31, 2025, mainly from $69.9 million in proceeds from the sale of the Desktop Portfolio[214] - Cash used in financing activities was $0.2 million for the three months ended March 31, 2025, primarily for withholding taxes on vested equity awards[216] Strategic Outlook - The company expects to continue incurring net losses as it focuses on growing sales and scaling manufacturing operations[140] - The company plans to enhance its device technology and expand sales efforts to drive future growth[152] - The company plans to expand global sales efforts, particularly through distribution channels, as it assesses international market needs[190] - The company may seek additional funding through various means, including private or public equity financings and strategic alliances, but there is no assurance of obtaining funds on acceptable terms[209] Market and Economic Factors - The company is closely monitoring macroeconomic factors, including inflation and interest rates, which may impact its business and customer spending[143] Product and Placement Metrics - Recurring revenue accounted for 37% of total revenue for the three months ended March 31, 2025, slightly down from 38% in the same period of 2024[156] - Device sales represented 63% of total revenue for the three months ended March 31, 2025, compared to 62% for the same period in 2024[165] - The number of handheld product placements increased to 157 units for the three months ended March 31, 2025, up from 53 units in the same period of 2024, reflecting a 196.2% increase[163] - Cumulative product placements of handheld devices reached 3,172 units as of March 31, 2025, compared to 2,475 units as of March 31, 2024, marking a 28.2% increase[164] Contingent Consideration and Interest Income - The fair value of contingent consideration increased by $2.5 million due to the rise in the company's publicly quoted share price during the three months ended March 31, 2025[200] - Interest income decreased by $0.8 million to $0.9 million for the three months ended March 31, 2025, primarily due to a lower cash and marketable securities balance[201]

MAY 2025 Forward looking statements / Non-GAAP financial measures Analysis at the speed of life This presentation and the accompanying oral presentation (this "presentation") contain forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements may relate to, but are not limited to, expectations of future results of operations or financial performance of 908 Devices Inc. ( ...

Revenue Performance - Revenue from continuing operations for Q1 2025 was $11.8 million, a 59% increase year-over-year, primarily driven by an 86% increase in handheld product and service revenue[5] - Recurring revenue reached $4.4 million, up 54% year-over-year, representing 37% of total revenues for the quarter[8] - The company expects full-year 2025 revenues from continuing operations to be between $53 million and $55 million, indicating an 11% to 15% growth compared to 2024[12] Profitability Metrics - Adjusted gross profit for Q1 2025 was $6.4 million, with an adjusted gross margin of 54%, an increase of approximately 75 basis points compared to the prior year[6] - Gross profit (GAAP) for Q1 2025 was $5,541 million, up from $3,887 million in Q1 2024, representing a 42.5% increase[24] - Adjusted gross profit (Non-GAAP) for Q1 2025 was $6,409 million, compared to $3,983 million in Q1 2024, indicating a 60.8% growth[24] - Gross margin percentage (GAAP) decreased to 47% in Q1 2025 from 52% in Q1 2024[24] - Adjusted gross margin percentage (Non-GAAP) remained stable at 54% for both Q1 2025 and Q1 2024[24] - Adjusted EBITDA (Non-GAAP) improved to $(4,569) million in Q1 2025, compared to $(5,339) million in Q1 2024, showing a reduction in losses[24] Operating Expenses - Operating expenses increased to $16.6 million in Q1 2025 from $11.5 million in the prior year, influenced by a $2.5 million non-cash charge related to contingent consideration[7] - Stock-based compensation increased to $2,221 million in Q1 2025 from $1,839 million in Q1 2024[24] - Acquisition and integration costs rose to $640 million in Q1 2025, up from $274 million in Q1 2024[24] - Intangible amortization for Q1 2025 was $713 million, while there was none reported in Q1 2024[24] Net Loss - Net loss from continuing operations was $9.8 million for Q1 2025, compared to a net loss of $5.9 million in the same period last year[9] - Net loss from continuing operations (GAAP) increased to $(9,838) million in Q1 2025 from $(5,895) million in Q1 2024[24] Device and Market Metrics - The installed base of devices grew 28% year-over-year to 3,172 devices, with 157 devices placed during Q1 2025[5] - A $2.0 million order for MX908 mass spectrometry devices was received from the Texas Department of Public Safety for drug detection[8] Cash Position - Cash, cash equivalents, and marketable securities totaled $124.3 million as of March 31, 2025, with no debt outstanding[11] Corporate Actions - The company announced the divestiture of its bioprocessing product portfolio to Repligen Corporation on March 4, 2025[8] Fair Value Adjustments - Change in fair value of contingent consideration was $2,499 million in Q1 2025, with no comparable figure in Q1 2024[24]

The market expects 908 Devices Inc. (MASS) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on May 13, 2025, might help the stock move higher if these key numbers ar ...