Core Insights - Protara Therapeutics is a clinical-stage biotech company focused on developing treatments for cancer and rare diseases, with its lead program TARA-002 targeting non-muscle invasive bladder cancer (NMIBC) and lymphatic malformations (LMs) [2][8] - TARA-002 utilizes a novel approach derived from a genetically distinct cell bank, functioning through dual mechanisms of directly killing tumor cells and stimulating an immune response [1][8] - The company is also advancing IV Choline Chloride for patients requiring parenteral nutrition, addressing a significant unmet need [10] TARA-002 Development - TARA-002 is currently being evaluated in a mid-stage study called ADVANCED-2 for NMIBC, showing promising early results with a 67% complete remission rate in BCG-unresponsive patients at six months [8][12] - In the Phase 2 STARBORN-1 trial for lymphatic malformations, two out of three pediatric patients achieved complete response after one injection, indicating a favorable safety profile [9][12] - Protara plans to deliver interim results for both trials in 1Q26 and 4Q25, respectively [8][9] Market Potential and Analyst Sentiment - Analysts project TARA-002 represents a potential market opportunity exceeding $500 million, with a strong buy consensus rating and a price target suggesting an 840% upside [12][13] - The average price target from analysts for TARA shares is $24.20, indicating a potential upside of approximately 659% [13] Financial Performance of Alpha Teknova - Alpha Teknova reported $10.3 million in revenue for 2Q25, a 7.3% year-over-year increase, with a reaffirmed full-year revenue guidance of $39-42 million [17] - The company is positioned to benefit from growth in the bioprocessing market, with expectations of over 20% revenue growth and 30%+ adjusted EBITDA margins in the long term [19][20] Analyst Ratings for Alpha Teknova - Alpha Teknova holds a strong buy consensus rating, with a price target of $12 indicating a potential one-year upside of approximately 159% [20]

PART I. FINANCIAL INFORMATION This section presents Alpha Teknova's unaudited condensed financial statements and management's analysis for Q2 2025 [Item 1. Condensed Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements%20(Unaudited)) Unaudited condensed financial statements for Alpha Teknova for Q2 2025, detailing operations, balance sheets, equity, cash flows, and notes Condensed Statements of Operations (Unaudited) - Key Figures (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Revenue | $10,287 | $9,614 | $20,082 | $18,904 | | Gross profit | $3,984 | $2,804 | $6,991 | $5,013 | | Loss from operations | $(3,386) | $(5,100) | $(8,350) | $(13,086) | | Net loss | $(3,570) | $(5,364) | $(8,215) | $(13,461) | | Net loss per share—basic and diluted | $(0.07) | $(0.13) | $(0.15) | $(0.33) | Condensed Balance Sheets (Unaudited) - Key Figures (in thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Total current assets | $38,057 | $42,776 | | Total assets | $110,487 | $118,769 | | Total current liabilities | $6,478 | $11,211 | | Total liabilities | $34,430 | $36,375 | | Total stockholders' equity | $76,057 | $82,394 | Condensed Statements of Cash Flows (Unaudited) - Key Figures (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(6,204) | $(9,396) | | Net cash provided by (used in) investing activities | $5,852 | $(102) | | Net cash used in financing activities | $(80) | $(390) | | Change in cash and cash equivalents | $(432) | $(9,888) | | Cash and cash equivalents at end of period | $3,276 | $18,596 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Alpha Teknova's financial condition and results, focusing on revenue growth, profitability, liquidity, and economic impacts for the periods ended June 30, 2025 - Alpha Teknova manufactures critical reagents for life sciences, serving **approximately 3,000 customers** across various sectors with proprietary, high-quality, custom products[83](index=83&type=chunk) - The company operates in **Lab Essentials and Clinical Solutions** categories, offering diverse reagents and is **ISO 13485:2016 certified** for diagnostic and therapeutic applications[84](index=84&type=chunk)[85](index=85&type=chunk) Revenue Performance (in thousands) | Period | 2025 Revenue | 2024 Revenue | $ Change | % Change | | :-------------------------------- | :----------- | :----------- | :------- | :------- | | Three Months Ended June 30 | $10,287 | $9,614 | $673 | 7.0% | | Six Months Ended June 30 | $20,082 | $18,904 | $1,178 | 6.2% | Operating Loss Improvement (in thousands) | Period | 2025 Operating Loss | 2024 Operating Loss | $ Change | % Change | | :-------------------------------- | :------------------ | :------------------ | :------- | :------- | | Three Months Ended June 30 | $(3,386) | $(5,100) | $1,714 | (33.6)% | | Six Months Ended June 30 | $(8,350) | $(13,086) | $4,736 | (36.2)% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Alpha Teknova is exempt from providing quantitative and qualitative disclosures about market risk - Alpha Teknova, as a **smaller reporting company**, is exempt from providing quantitative and qualitative market risk disclosures[133](index=133&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated and concluded Alpha Teknova's disclosure controls were effective as of June 30, 2025, with no material changes - Disclosure controls and procedures were evaluated by management, including the CEO and CFO, and deemed **effective as of June 30, 2025**[134](index=134&type=chunk) - No **material changes** in internal control over financial reporting occurred during the quarter ended June 30, 2025[135](index=135&type=chunk) - Management acknowledges controls provide **reasonable assurance** due to inherent limitations and resource constraints[136](index=136&type=chunk) PART II. OTHER INFORMATION This section covers Alpha Teknova's legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) Alpha Teknova is not currently involved in material legal proceedings, though a prior labor law claim was settled for **$0.4 million** in April 2025 - Alpha Teknova is not currently involved in any **material legal proceedings**[138](index=138&type=chunk) - The company evaluates potential legal claims and establishes **loss provisions** for probable and estimable losses[138](index=138&type=chunk) - A labor law claim from August 2023 was settled for **$0.4 million**, receiving final court approval in April 2025[78](index=78&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting Alpha Teknova's history of operating losses and the potential for stock price decline from affiliate share sales - Alpha Teknova has a history of operating losses, reporting **net losses of $3.6 million** and **$8.2 million** for the three and six months ended June 30, 2025, respectively[141](index=141&type=chunk) - Profitability depends on **revenue growth offsetting increasing operating expenses**, including public company costs[141](index=141&type=chunk) - Sales of a **substantial number of common stock shares by affiliates** could significantly reduce market price and hinder future fundraising[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Alpha Teknova reports no unregistered equity sales, no applicable IPO proceeds use, and no share repurchases during the period - No **unregistered sales of equity securities** occurred[146](index=146&type=chunk) - Information regarding the **use of proceeds from the initial public offering** is not applicable[147](index=147&type=chunk) - No **common stock repurchases** were made[148](index=148&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Alpha Teknova reports no defaults upon senior securities - There were **no defaults upon senior securities**[149](index=149&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to Alpha Teknova's operations - **Mine safety disclosures** are not applicable[150](index=150&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No officers or directors adopted, modified, or terminated **Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** during the three months ended June 30, 2025[151](index=151&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, credit agreements, and executive certifications - Exhibits include **corporate governance documents**, **investors' rights agreements**, and **credit and security agreements** (Term Loan and Revolving Loan)[152](index=152&type=

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $10.3 million, a 7% increase from $9.6 million in Q2 2024, marking the fourth consecutive quarter of year-over-year growth [13][19] - Adjusted EBITDA improved to negative $800,000, the best quarterly result since going public in mid-2021, compared to negative $2.6 million in Q2 2024 [8][18] - Gross profit increased to $4 million with a gross margin of 38.7%, up from 29.2% in Q2 2024, driven by manufacturing efficiency gains [16][17] Business Line Data and Key Metrics Changes - Lab Essentials revenue was $7.8 million, a 2% increase from $7.6 million in Q2 2024, attributed to an increased number of customers [14] - Clinical Solutions revenue rose to $2.1 million, a 32% increase from $1.6 million in Q2 2024, also due to an increased number of customers [15][16] Market Data and Key Metrics Changes - Revenue from catalog products, which represents about 60% of annual revenue, grew in the low double digits year-over-year, aligning with historical growth rates from 2009 to 2019 [9][10] - The growth in catalog products was driven by key accounts in large pharma and life science tools, indicating above-market growth rates [10] Company Strategy and Development Direction - The company aims to be a leader in essential research reagents and to support emerging therapeutic developers through custom research and clinical grade reagents [9][12] - Inorganic growth opportunities are being pursued, including collaborations and acquisitions to enhance product offerings and operational scale [12][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for end markets, despite challenges faced by small to mid-sized biotech customers [11][24] - The company reiterated its 2025 total revenue guidance of $39 million to $42 million, expecting continued growth in catalog products while custom products may see lower growth due to macroeconomic conditions [19][20] Other Important Information - The company reduced its headcount by about 40% from its peak, cutting annual operating expenses by approximately $18 million over the past three years [6] - Free cash flow for Q2 2025 was negative $2.3 million, an improvement from negative $3 million in Q2 2024 [18] Q&A Session Summary Question: How has the company managed through headwinds in the biotech funding landscape? - Management noted that while early-stage small to mid-sized biotech companies are struggling, the company has balanced losses with expected spending from larger companies and later-stage therapies [26][27][30] Question: Can you elaborate on the inorganic opportunities and gaps in the product portfolio? - The company is focusing on collaborations with smaller companies and potential acquisitions to fill gaps in upstream products like cell culture media and transfection reagents [31][32] Question: How is the RUO Plus initiative trending? - The initiative is performing as anticipated, providing flexibility for customers transitioning to clinical applications [36] Question: What are the expectations for Clinical Solutions revenue patterns? - Management indicated that revenue in Clinical Solutions can be lumpy, with no significant large orders affecting Q2 results, and that the business is currently in a normal range [38][75] Question: What are the key factors driving customer spending decisions in the current environment? - Customers are looking for predictability and stability, with recent positive engagement suggesting potential recovery in spending [50][51] Question: How has the company's sales force and online presence evolved? - The company has shifted from a reactive to a proactive approach in attracting new customers, contributing to growth despite macroeconomic challenges [56][59] Question: What are the expectations for gross margins in the second half of the year? - Management expects gross margins to remain lower than Q2 but anticipates continued improvements in efficiency and potential upside in the long term [61][66]

Financial Performance - Q2 2025 - Total revenue for Q2 2025 increased by 7% year-over-year, reaching $103 million[20] - Clinical Solutions revenue increased significantly by 32% compared to Q2 2024[21] - Gross margin improved from 292% in Q2 2024 to 387% in Q2 2025[23] - Adjusted EBITDA improved from a loss of $26 million in Q2 2024 to a loss of $08 million in Q2 2025[26] - Free cash flow improved from a negative $30 million in Q2 2024 to a negative $23 million in Q2 2025[28] Revenue Breakdown - 2024 - Catalog products accounted for approximately 60% of total revenue in 2024[14, 15] - Custom products represented about 35% of total revenue in 2024, with biopharma contributing 70% of custom revenue and 25% of total revenue[14, 15] - Other revenue, including services and shipping, made up roughly 5% of total revenue in 2024[14, 15] Customer Migration and Spending - Customers purchasing GMP reagents spent 44 times more annually compared to catalog-only customers in 2024[17] - 58% of 2024 revenue came from custom and/or clinical accounts[17] - 27% of 2024 revenue was generated from Cell and Gene Therapy (CGT) customers[17] 2025 Outlook - The company estimates total revenue between $39 million and $42 million, representing a 7% year-over-year increase at the midpoint[41] - The company is targeting a free cash outflow of less than $12 million for 2025[41] - The company estimates an annualized revenue range of $50 million to $55 million to achieve Adjusted EBITDA break-even[41]

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Teknova achieved strong Q2 2025 financial performance with significant revenue growth and improved profitability, reiterating its positive full-year outlook [Overview and Management Commentary](index=1&type=section&id=1.1%20Overview%20and%20Management%20Commentary) Teknova reported strong Q2 2025 results with a 7% increase in total revenue, marking four consecutive quarters of year-over-year growth. Management highlighted investments in infrastructure, a diverse product portfolio, and customer base as drivers for sustainable growth, reaffirming the full-year 2025 revenue guidance - Teknova achieved **$10.3 million** in total revenue for Q2 2025, a **7% increase** from the prior year, marking four consecutive quarters of year-over-year revenue growth[1](index=1&type=chunk)[4](index=4&type=chunk) - CEO Stephen Gunstream attributed the strong performance to investments in operational and commercial infrastructure, diverse product portfolio, and customer base, positioning the company for sustainable, above-market growth[2](index=2&type=chunk) - CFO Matt Lowell noted significant improvements in **adjusted EBITDA** and **free cash outflow** compared to 2024, reinforcing the company's momentum[2](index=2&type=chunk) [Key Financial Metrics Summary](index=1&type=section&id=1.2%20Key%20Financial%20Metrics%20Summary) In Q2 2025, Teknova demonstrated improved financial performance with increased revenue across segments, enhanced gross margin, and reduced net loss and non-GAAP cash outflows compared to the prior year | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :------------------------- | :--------------------- | :--------------------- | :--------- | | Total Revenue | $10,287 | $9,614 | 7% | | Lab Essentials Revenue | $7,792 | $7,638 | 2% | | Clinical Solutions Revenue | $2,060 | $1,565 | 32% | | Gross Profit | $3,984 | $2,804 | 42% | | Gross Margin | 38.7% | 29.2% | +9.5 pp | | Operating Expenses | $7,370 | $7,904 | -7% | | Net Loss | $(3,570) | $(5,364) | -33% | | Net Loss per Diluted Share | $(0.07) | $(0.13) | -46% | | Adjusted EBITDA | $(846) | $(2,568) | -67% | | Free Cash Flow | $(2,308) | $(2,953) | -22% | [2025 Outlook Reiteration](index=1&type=section&id=1.3%202025%20Outlook%20Reiteration) Teknova reaffirmed its financial guidance for fiscal year 2025, anticipating total revenue between $39 million and $42 million and a free cash outflow of less than $12 million - Teknova reiterates its fiscal 2025 outlook for total revenue to be between **$39 million and $42 million**[2](index=2&type=chunk)[9](index=9&type=chunk) - The company continues to anticipate full-year free cash outflow of **less than $12 million** for 2025[2](index=2&type=chunk)[9](index=9&type=chunk) [Detailed Second Quarter 2025 Financial Results](index=1&type=section&id=Detailed%20Second%20Quarter%202025%20Financial%20Results) This section provides a detailed analysis of Teknova's Q2 2025 financial results, covering revenue, gross profit, operating expenses, net loss, and non-GAAP performance metrics [Revenue Performance by Segment](index=1&type=section&id=2.1%20Revenue%20Performance%20by%20Segment) Total revenue for Q2 2025 increased by 7% year-over-year, driven by strong growth in Clinical Solutions (32%) and a modest increase in Lab Essentials (2%) | Revenue Segment (in thousands) | Q2 2025 | Q2 2024 | YoY Change | YTD 2025 | YTD 2024 | YTD Change | | :----------------------------- | :------ | :------ | :--------- | :------- | :------- | :--------- | | Lab Essentials | $7,792 | $7,638 | 2% | $15,909 | $14,904 | 7% | | Clinical Solutions | $2,060 | $1,565 | 32% | $3,222 | $3,283 | -2% | | Other | $435 | $411 | 6% | $951 | $717 | 33% | | **Total Revenue** | **$10,287** | **$9,614** | **7%** | **$20,082** | **$18,904** | **6%** | [Gross Profit and Margin Analysis](index=2&type=section&id=2.2%20Gross%20Profit%20and%20Margin%20Analysis) Gross profit significantly increased by 42% in Q2 2025, leading to a substantial improvement in gross margin from 29.2% to 38.7%, primarily due to manufacturing efficiency gains and higher revenue | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :----------- | :--------------------- | :--------------------- | :--------- | | Gross Profit | $3,984 | $2,804 | 42% | | Gross Margin | 38.7% | 29.2% | +9.5 pp | - The increase in gross margin was driven by manufacturing efficiency gains and higher revenue[5](index=5&type=chunk) [Operating Expenses Breakdown](index=2&type=section&id=2.3%20Operating%20Expenses%20Breakdown) Operating expenses decreased by $0.5 million in Q2 2025, excluding a non-recurring charge from the prior year, mainly due to reduced spending on insurance and facility costs | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :----------------- | :--------------------- | :--------------------- | :--------- | | Operating Expenses | $7,370 | $7,904 | -7% | - Excluding a non-recurring charge of **$0.1 million** in Q2 2024, operating expenses were down **$0.5 million**, driven by reduced spending on insurance and facility costs[6](index=6&type=chunk) [Net Loss and Earnings Per Share](index=2&type=section&id=2.4%20Net%20Loss%20and%20Earnings%20Per%20Share) Teknova significantly reduced its net loss in Q2 2025 to $3.6 million, or $(0.07) per diluted share, a substantial improvement from the $5.4 million net loss, or $(0.13) per diluted share, in Q2 2024 | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | Net Loss | $(3,570) | $(5,364) | -33% | | Net Loss per Diluted Share | $(0.07) | $(0.13) | -46% | [Non-GAAP Financial Performance](index=2&type=section&id=2.5%20Non-GAAP%20Financial%20Performance) Adjusted EBITDA improved to negative $0.8 million in Q2 2025 from negative $2.6 million in Q2 2024, while Free Cash Flow also improved to negative $2.3 million from negative $3.0 million in the prior year | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :---------------- | :--------------------- | :--------------------- | :--------- | | Adjusted EBITDA | $(846) | $(2,568) | -67% | | Free Cash Flow | $(2,308) | $(2,953) | -22% | [About Teknova and Investor Relations](index=2&type=section&id=About%20Teknova%20and%20Investor%20Relations) This section provides an overview of Teknova's business, details for the upcoming investor conference call, and contact information for investor and media inquiries [About Teknova](index=2&type=section&id=3.1%20About%20Teknova) Teknova is a leading producer of critical reagents for the life sciences industry, offering customizable solutions for molecular diagnostics, synthetic biology, and emerging therapeutic modalities, supporting customers from RUO to GMP with state-of-the-art manufacturing facilities - Teknova produces critical reagents for the life sciences industry, accelerating discovery and development of novel breakthroughs[11](index=11&type=chunk) - The company offers customizable solutions for molecular diagnostics, synthetic biology, and emerging therapeutic modalities, supporting customers from RUO to GMP[11](index=11&type=chunk) - Headquartered in Hollister, California, Teknova operates over **180,000 square feet** of state-of-the-art facilities with a modular manufacturing platform[11](index=11&type=chunk) [Conference Call and Webcast Information](index=2&type=section&id=3.2%20Conference%20Call%20and%20Webcast%20Information) Teknova will host a webcast and conference call on August 7, 2025, at 5:00 p.m. Eastern Time, with replay available on the company's website - Teknova will host a webcast and conference call on Thursday, **August 7, 2025**, at **5:00 p.m. Eastern Time**[10](index=10&type=chunk) - Access to the live webcast is available via the Investor Relations section of Teknova's website or a provided link, with replay available approximately two hours after the event[10](index=10&type=chunk) [Investor and Media Contacts](index=4&type=section&id=3.3%20Investor%20and%20Media%20Contacts) Contact information for Teknova's Chief Financial Officer for investor inquiries and Senior Vice President of Marketing for media inquiries is provided - Investor Contact: Matt Lowell, Chief Financial Officer, matt.lowell@teknova.com, +1 831-637-1100[19](index=19&type=chunk) - Media Contact: Jennifer Henry, Senior Vice President, Marketing, jenn.henry@teknova.com, +1 831-313-1259[19](index=19&type=chunk) [Condensed Financial Statements (Unaudited)](index=5&type=section&id=Condensed%20Financial%20Statements%20%28Unaudited%29) This section presents Teknova's unaudited condensed financial statements, including statements of operations, balance sheets, and cash flows for the reported periods [Condensed Statements of Operations](index=5&type=section&id=4.1%20Condensed%20Statements%20of%20Operations) The condensed statements of operations show a reduced net loss for both the three and six months ended June 30, 2025, compared to the prior year, driven by increased revenue and improved gross profit | | For the Three Months Ended | | | | For the Six Months Ended | | | | | :------------------------------------------ | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | June 30, | | | | June 30, | | | | | | 2025 | | 2024 | | 2025 | | 2024 | | Revenue | $ | 10,287 | $ | 9,614 | $ | 20,082 | $ | 18,904 | | Cost of sales | | 6,303 | | 6,810 | | 13,091 | | 13,891 | | Gross profit | | 3,984 | | 2,804 | | 6,991 | | 5,013 | | Operating expenses: | | | | | | | | | | Research and development | | 581 | | 678 | | 1,133 | | 1,538 | | Sales and marketing | | 1,573 | | 1,456 | | 3,213 | | 3,123 | | General and administrative | | 4,929 | | 5,483 | | 10,421 | | 12,864 | | Amortization of intangible assets | | 287 | | 287 | | 574 | | 574 | | Total operating expenses | | 7,370 | | 7,904 | | 15,341 | | 18,099 | | Loss from operations | | (3,386) | | (5,100) | | (8,350) | | (13,086) | | Other income (expenses), net | | | | | | | | | | Interest expense, net | | (165) | | (272) | | (309) | | (417) | | Other adjustment to loan exit fee | | — | | — | | 485 | | — | | Total other income (expenses), net | | (165) | | (272) | | 176 | | (417) | | Loss before income taxes | | (3,551) | | (5,372) | | (8,174) | | (13,503) | | Provision for (benefit from) income taxes | | 19 | | (8) | | 41 | | (42) | | Net loss | $ | (3,570) | $ | (5,364) | $ | (8,215) | $ | (13,461) | | Net loss per share—basic and diluted | $ | (0.07) | $ | (0.13) | $ | (0.15) | $ | (0.33) | | Weighted average shares used in computing net loss | | | | | | | | | | per share—basic and diluted | | 53,448,736 | | 40,853,882 | | 53,435,210 | | 40,829,383 | [Condensed Balance Sheets](index=6&type=section&id=4.2%20Condensed%20Balance%20Sheets) As of June 30, 2025, Teknova's total assets decreased to $110.5 million from $118.8 million at December 31, 2024, primarily due to a reduction in current assets, while long-term debt increased | | As of June 30, | | As of December 31, | | :---------------------------------- | :--- | :--- | :--- | :--- | | | 2025 | | 2024 | | ASSETS | | | | | | Current assets: | | | | | | Cash and cash equivalents | $ | 3,276 | $ | 3,708 | | Short-term investments, held -to-maturity | | 20,724 | | 26,688 | | Accounts receivable, net | | 5,140 | | 4,312 | | Inventories, net | | 7,610 | | 6,801 | | Prepaid expenses and other current assets | | 1,307 | | 1,267 | | Total current assets | | 38,057 | | 42,776 | | Property, plant, and equipment, net | | 43,605 | | 45,753 | | Operating right-of-use lease assets | | 14,960 | | 15,767 | | Intangible assets, net | | 12,517 | | 13,091 | | Other non-current assets | | 1,348 | | 1,382 | | Total assets | $ | 110,487 | $ | 118,769 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | Current liabilities: | | | | | | Accounts payable | $ | 1,204 | $ | 825 | | Accrued liabilities | | 3,388 | | 4,541 | | Current portion of operating lease liabilities | | 1,886 | | 1,800 | | Current portion of long-term debt | | — | | 4,045 | | Total current liabilities | | 6,478 | | 11,211 | | Deferred tax liabilities | | 868 | | 827 | | Other accrued liabilities | | — | | 10 | | Long-term debt, net | | 13,032 | | 9,443 | | Long-term operating lease liabilities | | 14,052 | | 14,884 | | Total liabilities | | 34,430 | | 36,375 | | Stockholders' equity: | | | | | | Preferred stock | | — | | — | | Common stock | | 1 | | 1 | | Additional paid-in capital | | 202,802 | | 200,924 | | Accumulated deficit | | (126,746) | | (118,531) | | Total stockholders' equity | | 76,057 | | 82,394 | | Total liabilities and stockholders' equity | $ | 110,487 | $ | 118,769 | [Condensed Statements of Cash Flows](index=7&type=section&id=4.3%20Condensed%20Statements%20of%20Cash%20Flows) Cash used in operating activities improved for both the three and six months ended June 30, 2025, compared to the prior year, while investing activities provided cash in Q2 2025 due to maturities of short-term investments | | For the Three Months Ended June 30, | | | | For the Six Months Ended June 30, | | | | | :---------------------------------------------------- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | 2025 | | 2024 | | 2025 | | 2024 | | Operating activities: | | | | | | | | | | Net loss | $ | (3,570) | $ | (5,364) | $ | (8,215) | $ | (13,461) | | Adjustments to reconcile net loss to net cash used in operating | | | | | | | | | | activities: | | | | | | | | | | Bad debt expense | | 4 | | 49 | | 49 | | 56 | | Inventory reserve | | 488 | | 987 | | 925 | | 896 | | Depreciation and amortization | | 1,590 | | 1,626 | | 3,170 | | 3,262 | | Stock-based compensation | | 950 | | 833 | | 1,802 | | 2,140 | | Deferred taxes | | 20 | | (9) | | 41 | | (44) | | Accrued interest income on short-term investments | | 108 | | — | | 54 | | — | | Amortization of discount on short-term investments | | (171) | | — | | (355) | | — | | Amortization of debt financing costs | | 43 | | 104 | | 129 | | 188 | | Other adjustment to loan exit fee | | — | | — | | (485) | | — | | Non-cash lease expense | | 31 | | 47 | | 61 | | 94 | | Loss on disposal of property, plant, and equipment | | 19 | | — | | 19 | | 49 | | Changes in operating assets and liabilities: | | | | | | | | | | Accounts receivable | | 472 | | (86) | | (877) | | (705) | | Inventories | | (1,525) | | (767) | | (1,734) | | (289) | | Prepaid expenses and other current assets | | (36) | | 239 | | (40) | | 413 | | Other non-current assets | | (29) | | 89 | | 34 | | 206 | | Accounts payable | | (360) | | (522) | | 380 | | (389) | | Accrued liabilities | | (135) | | (40) | | (1,152) | | (1,764) | | Other | | — | | (24) | | (10) | | (48) | | Cash used in operating activities | | (2,101) | | (2,838) | | (6,204) | | (9,396) | | Investing activities: | | | | | | | | | | Purchases of short-term investments | | (7,765) | | — | | (9,735) | | — | | Maturities of short-term investments | | 10,000 | | — | | 16,000 | | — | | Proceeds from sale of property, plant, and equipment | | — | | — | | — | | 125 | | Purchases of property, plant, and equipment | | (207) | | (115) | | (413) | | (227) | | Cash provided by (used in) investing activities | | 2,028 | | (115) | | 5,852 | | (102) | | Financing activities: | | | | | | | | | | Proceeds from long-term debt | | — | | — | | 1,110 | | — | | Payment of exit fee costs | | — | | — | | (1,110) | | — | | Payments related to equity financing | | — | | — | | — | | (37) | | Repayment of financed insurance premiums | | — | | (103) | | (56) | | (409) | | Proceeds from exercise of stock options | | 16 | | — | | 20 | | — | | Proceeds from issuance of common stock under employee stock | | | | | | | | | | purchase plan | | 56 | | 81 | | 56 | | 81 | | Payment of debt issuance costs | | (100) | | (25) | | (100) | | (25) | | Cash used in financing activities | | (28) | | (47) | | (80) | | (390) | | Change in cash and cash equivalents | | (101) | | (3,000) | | (432) | | (9,888) | | Cash and cash equivalents at beginning of period | | 3,377 | | 21,596 | | 3,708 | | 28,484 | | Cash and cash equivalents at end of period | $ | 3,276 | $ | 18,596 | $ | 3,276 | $ | 18,596 | [Non-GAAP Measures and Other Disclosures](index=3&type=section&id=Non-GAAP%20Measures%20and%20Other%20Disclosures) This section defines Teknova's non-GAAP financial measures, reconciles them to GAAP, and outlines important forward-looking statements and associated risks [Non-GAAP Financial Measures Definitions](index=3&type=section&id=5.1%20Non-GAAP%20Financial%20Measures%20Definitions) Teknova utilizes Adjusted EBITDA and Free Cash Flow as non-GAAP financial measures to assess business performance and strategy effectiveness, believing they offer useful insights for investors by excluding items not indicative of core operating performance - Teknova uses **Adjusted EBITDA** and **Free Cash Flow** as non-GAAP financial measures to assess business performance and strategy[12](index=12&type=chunk) - Adjusted EBITDA is defined as net loss adjusted for interest, taxes, depreciation, amortization, stock-based compensation, and other non-recurring items[13](index=13&type=chunk) - Free Cash Flow is defined as cash used in operating activities plus purchases of property, plant, and equipment[14](index=14&type=chunk) [Reconciliation of Non-GAAP Measures to GAAP](index=8&type=section&id=5.2%20Reconciliation%20of%20Non-GAAP%20Measures%20to%20GAAP) The report provides a detailed reconciliation of non-GAAP measures, Adjusted EBITDA and Free Cash Flow, to their most comparable GAAP measures, net loss and cash used in operating activities, respectively, for both the three and six months ended June 30, 2025 and 2024 | | For the Three Months Ended | | | | For the Six Months Ended | | | | | :------------------------------------ | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | June 30, | | | 2024 | 2025 | | 2024 | | | | 2025 | | | | | | | | | Net loss – as reported | $ | (3,570) | $ | (5,364) | $ | (8,215) | $ | (13,461) | | Add back: | | | | | | | | | | Interest expense, net | | (165) | | (272) | | (309) | | (417) | | Provision for (benefit from) income taxes | | 19 | | (8) | | 41 | | (42) | | Depreciation expense | | 1,303 | | 1,339 | | 2,596 | | 2,688 | | Amortization of intangible assets | | 287 | | 287 | | 574 | | 574 | | EBITDA | $ | (1,796) | $ | (3,474) | $ | (4,695) | $ | (9,824) | | Other and non-recurring expenses: | | | | | | | | | | Stock-based compensation expense | | 950 | | 833 | | 1,802 | | 2,140 | | Severance pay and other termination | | | | | | | | | | benefits | | — | | — | | — | | 1,287 | | Other adjustment to loan exit fee | | — | | — | | (485) | | — | | Loss contingency | | — | | 73 | | — | | 73 | | Adjusted EBITDA | $ | (846) | $ | (2,568) | $ | (3,378) | $ | (6,324) | | | For the Three Months Ended | | | | For the Six Months Ended | | | | | :------------------------------------ | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | June 30, | | 2024 | | 2025 | | 2024 | | | | 2025 | | | | | | | | | Cash used in operating activities | $ | (2,101) | $ | (2,838) | $ | (6,204) | $ | (9,396) | | Purchases of property, plant, and | | | | | | | | | | equipment | | (207) | | (115) | | (413) | | (227) | | Free Cash Flow | $ | (2,308) | $ | (2,953) | $ | (6,617) | $ | (9,623) | [Forward-Looking Statements](index=3&type=section&id=5.3%20Forward-Looking%20Statements) This section contains forward-looking statements regarding future expectations, plans, and prospects, including revenue and free cash outflow guidance, which are subject to various risks and uncertainties that could cause actual results to differ materially - Statements about future expectations, plans, and prospects, including 2025 revenue and free cash outflow guidance, constitute "forward-looking statements"[17](index=17&type=chunk) - These statements are based on management's current expectations and beliefs but are subject to risks and uncertainties, many beyond Teknova's control, which could cause actual results to differ materially[17](index=17&type=chunk) - Risks include demand for products, assessment of future demand indicators, cash flows, supply chain issues, global economic uncertainties, reliance on limited customers, and potential acquisitions, as detailed in SEC filings[17](index=17&type=chunk)[18](index=18&type=chunk)

Core Viewpoint - Alpha Teknova, Inc. is set to report its financial results for the second quarter of 2025 on August 7, 2025, after market close, highlighting its ongoing role in the life sciences industry as a producer of critical reagents for novel therapies and diagnostics [1]. Group 1 - Teknova will host a webcast and conference call on August 7, 2025, at 5 p.m. Eastern Time, providing access through its Investor Relations section [2]. - The webcast will be available for replay on the company's website approximately two hours after the event [2]. Group 2 - Founded in 1996, Teknova specializes in manufacturing critical reagents for the life sciences sector, aiming to accelerate the discovery and development of new therapies [3]. - The company offers customizable solutions for various stages of the workflow, supporting sectors such as molecular diagnostics and synthetic biology [3]. - Teknova operates from a 180,000 square feet facility in Hollister, California, utilizing a modular manufacturing platform designed by experts to produce foundational ingredients for next-generation therapies [3].

Summary of Technova Conference Call Company Overview - **Company**: Technova - **Industry**: Life Sciences, specifically reagents for biotech, pharma, and diagnostics - **Founded**: 1996 by a scientist from Genentech - **Public Offering**: Took the company public in February 2021 Key Points and Arguments - **Market Position**: Technova is a leading provider of reagents for the life science community, serving over 3,000 customers in the U.S. [3][4] - **Growth Trajectory**: The company has historically grown at 12% since February 2009 and aims for a top-line growth of 20-25% due to clinical programs in the pipeline [4][47] - **Revenue Potential**: Technova is positioned to scale its business to $200-250 million in revenue without significant additional capital expenditures (CapEx) [4][41] - **Gross Margin**: 70% of every additional dollar in revenue contributes to the bottom line, indicating strong profitability potential [5][56] - **Customer Retention**: The company boasts a 95% retention rate of its customer base year on year, making it difficult for customers to switch suppliers [53] Product Offerings - **Product Categories**: - Catalog products (60% of business) for general R&D and academic use [16] - Custom products (35% of business), with 25% of that being biopharma-related [18] - **Growth in Custom Products**: Custom biopharma products grew by 40% last year, indicating strong demand [18] - **Speed of Delivery**: Technova can deliver research-use products in 2-3 weeks and custom GMP products in 4-8 weeks, significantly faster than competitors who may take 4-8 months [28][29] Competitive Advantage - **Customization and Quality**: Technova focuses on providing high-quality, customized reagents quickly, which is a gap in the market compared to larger players [10][19] - **Modular Manufacturing**: The company employs a modular manufacturing approach, allowing for flexibility in production sizes and formulations [25][27] - **Customer Service**: High levels of customer service and support, reflected in a net promoter score in the seventies [22] Financial Outlook - **Capital Position**: Technova had $26 million in cash at the end of Q1 and an untapped revolving line of credit, providing a solid financial foundation [61] - **Path to Profitability**: Adjusted EBITDA breakeven is expected at $50-55 million in revenue, with cash flow positive anticipated shortly thereafter [62] Industry Context - **Biotech Environment**: The company is navigating a challenging biotech funding environment but continues to gain clinical customers, projecting a 15% growth in this segment by 2025 [52] - **Regulatory Impact**: Technova feels insulated from tariff impacts due to its U.S.-based manufacturing and limited reliance on foreign raw materials [49][50] Future Strategies - **Partnerships and Collaborations**: Technova is looking to expand partnerships, such as the recent collaboration with Pluristics for cryopreservation media, to enhance its product offerings [45][58] - **Focus on Emerging Therapies**: The company aims to support the growing complexity in bioprocessing for therapies like cell and gene therapy, which require more customized solutions [36][39] Conclusion - **Long-term Growth**: Technova is positioned for sustainable growth with a strong foundational business, significant investments already made, and a clear strategy to scale operations without the need for further major investments [47][48]

PART I. FINANCIAL INFORMATION [Condensed Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2025 financials show revenue up 5.4% to $9.8M and net loss reduced to $4.6M, with key notes - In January 2024, the company implemented a workforce reduction of approximately **35 positions**, incurring **$1.3 million** in related costs for severance and termination benefits, which were recorded in Q1 2024[32](index=32&type=chunk) - On March 3, 2025, the company entered into a Second Amended and Restated Credit Agreement with MidCap Financial Trust, providing a **$28.245 million** credit facility, including a **$23.245 million** term loan and a **$5.0 million** revolver, maturing on March 1, 2030[52](index=52&type=chunk)[53](index=53&type=chunk)[56](index=56&type=chunk) - In January 2024, the company repriced **1,631,016** outstanding stock options, resulting in an incremental stock-based compensation expense of **$0.9 million**[64](index=64&type=chunk)[65](index=65&type=chunk) - A legal claim from a former employee regarding labor laws was settled for **$0.4 million**, accrued as of March 31, 2025, and paid in April 2025[75](index=75&type=chunk) [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Q1 2025 revenue rose to $9.8M, gross profit to $3.0M, and reduced operating expenses narrowed net loss to $4.6M Condensed Statements of Operations (Unaudited) | | For the Three Months Ended March 31, | | | :--- | :--- | :--- | | (in thousands, except per share data) | **2025** | **2024** | | **Revenue** | **$9,795** | **$9,290** | | Gross profit | $3,007 | $2,209 | | Loss from operations | $(4,964) | $(7,986) | | **Net loss** | **$(4,645)** | **$(8,097)** | | Net loss per share—basic and diluted | $(0.09) | $(0.20) | [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) Total assets decreased to $114.0M as of March 31, 2025, primarily due to reduced cash and investments Condensed Balance Sheet Highlights (Unaudited) | | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | (in thousands) | | | | Cash and cash equivalents | $3,377 | $3,708 | | Short-term investments, held-to-maturity | $22,896 | $26,688 | | Total current assets | $39,733 | $42,776 | | **Total assets** | **$113,993** | **$118,769** | | Total current liabilities | $7,045 | $11,211 | | Long-term debt, net | $12,989 | $9,443 | | **Total liabilities** | **$35,388** | **$36,375** | | **Total stockholders' equity** | **$78,605** | **$82,394** | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $4.1M in Q1 2025, with overall cash decreasing by $0.3M Condensed Statements of Cash Flows (Unaudited) | | For the Three Months Ended March 31, | | | :--- | :--- | :--- | | (in thousands) | **2025** | **2024** | | Net cash used in operating activities | $(4,103) | $(6,558) | | Net cash provided by investing activities | $3,824 | $13 | | Net cash used in financing activities | $(52) | $(343) | | **Change in cash and cash equivalents** | **$(331)** | **$(6,888)** | | Cash and cash equivalents at end of period | $3,377 | $21,596 | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Financial%20Statements) Notes detail revenue disaggregation, a new credit agreement with covenants, and a significant customer concentration Revenue by Product Category (in thousands) | Product Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Lab Essentials | $8,117 | $7,266 | | Clinical Solutions | $1,162 | $1,718 | | Other | $516 | $306 | | **Total revenue** | **$9,795** | **$9,290** | - A single distributor customer accounted for **22%** of revenue in Q1 2025, up from **16%** in Q1 2024[40](index=40&type=chunk) - The new credit agreement includes a minimum net revenue requirement of **$39.0 million** for the twelve months ending December 31, 2025, and a minimum cash requirement of **$8.0 million**[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2025 results, highlighting a 5.4% revenue increase, improved gross margin, and reduced operating expenses [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q1 2025 revenue increased by 5.4% to $9.8M, driven by Lab Essentials growth, improving gross margin and narrowing net loss Results of Operations Comparison (in thousands) | | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$9,795** | **$9,290** | **$505** | **5.4%** | | Gross profit | $3,007 | $2,209 | $798 | 36.1% | | Total operating expenses | $7,971 | $10,195 | $(2,224) | (21.8)% | | Loss from operations | $(4,964) | $(7,986) | $3,022 | (37.8)% | | **Net loss** | **$(4,645)** | **$(8,097)** | **$3,452** | **(42.6)%** | - The increase in total revenue was driven by a **$0.9 million (11.7%)** rise in Lab Essentials revenue, attributed to an increased number of customers[88](index=88&type=chunk) - Clinical Solutions revenue decreased by **$0.6 million (32.4%)** due to lower average revenue per customer[89](index=89&type=chunk) - The gross profit margin increased to **30.7%** in Q1 2025 from **23.8%** in Q1 2024, primarily due to higher revenue and lower overhead costs[92](index=92&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had $32.7M in net working capital, supported by cash and a new credit facility - As of March 31, 2025, the company had **$32.7 million** in net working capital, which included **$26.3 million** in cash and cash equivalents and short-term investments[100](index=100&type=chunk) - The company entered into a Second Amended and Restated Credit Agreement on March 3, 2025, providing for up to **$28.245 million** in loan commitments, subject to covenants including minimum revenue and cash requirements[101](index=101&type=chunk) Net Cash Flow Summary (in thousands) | | For the Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | Net cash used in operating activities | $(4,103) | $(6,558) | | Net cash provided by investing activities | $3,824 | $13 | | Net cash used in financing activities | $(52) | $(343) | [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company, as a smaller reporting entity, is not required to provide market risk disclosures - Alpha Teknova is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[113](index=113&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[116](index=116&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[117](index=117&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, with other contingencies detailed in the financial notes - The company is not a party to any material legal proceedings at this time[121](index=121&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 Annual Report, reiterating ongoing operating losses and potential stock dilution - The company has a history of operating losses, including a net loss of **$4.6 million** for the three months ended March 31, 2025, and may incur losses in the future[124](index=124&type=chunk) - A significant portion of the company's **53,437,060** outstanding shares of common stock are available for resale, which could cause the market price to drop[125](index=125&type=chunk)[126](index=126&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or stock repurchases during the quarter - There were no unregistered sales of equity securities or company stock repurchases during the reported quarter[129](index=129&type=chunk)[131](index=131&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[132](index=132&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[133](index=133&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) A board member adopted a Rule 10b5-1 trading plan to sell shares for tax obligations, with no other similar plans by officers or directors - On March 12, 2025, board member Martha J. Demski adopted a Rule 10b5-1 trading plan to sell a maximum of **8,000 shares** of common stock, with sales eligible to begin on June 27, 2025[134](index=134&type=chunk) - No other officers or directors adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025[135](index=135&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including credit agreements and SOX certifications - The filing includes key exhibits such as the Second Amended and Restated Credit Agreements (Term Loan and Revolving Loan) and certifications from the CEO and CFO pursuant to Sarbanes-Oxley Act Sections 302 and 906[136](index=136&type=chunk)[137](index=137&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $9.8 million, a 5% increase from $9.3 million in Q1 2024 [15] - Gross profit for Q1 2025 was $3 million, compared to $2.2 million in Q1 2024, with a gross margin of 30.7%, up from 23.8% [18] - Net loss for Q1 2025 was $4.6 million, or negative $0.09 per diluted share, compared to a net loss of $8.1 million, or negative $0.20 per diluted share, in Q1 2024 [19] Business Line Data and Key Metrics Changes - Revenue from Lab Essentials products was $8.1 million in Q1 2025, a 12% increase from $7.3 million in Q1 2024 [16] - Clinical Solutions revenue was $1.2 million in Q1 2025, a 32% decrease from $1.7 million in Q1 2024, attributed to lower average revenue per customer [17] - Revenue from custom products sold to biopharma customers grew mid single digits compared to Q1 2024, with expectations of at least 15% growth in 2025 [10][11] Market Data and Key Metrics Changes - The company serves over 500 academic and government institutions, which represented less than 4% of total revenue in February 2024 [7] - Less than 5% of total revenue comes from sales to customers outside the United States, with no material revenue from sales to customers in China [8] Company Strategy and Development Direction - The growth strategy focuses on engaging early-stage therapeutic developers and supporting them through clinical trials to commercialization, aiming for sustainable growth rates of 20% to 25% annually [8] - The company signed a collaboration agreement with Pluristics to manufacture and distribute a novel cryopreservation product, enhancing its product portfolio and market presence [12][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving guidance for 2025, despite challenges in the biotech funding landscape affecting small and mid-sized biotech customers [9][24] - The company anticipates a gross margin in the high 20s for fiscal year 2025, with operating expenses expected to be at least $8 million per quarter [23] Other Important Information - Capital expenditures for Q1 2025 were $200,000, compared to $100,000 in Q1 2024, with free cash flow of negative $4.3 million for Q1 2025, an improvement from negative $6.7 million in Q1 2024 [20] - The company does not expect to raise additional capital to execute its organic growth strategy based on current liquidity and growth assumptions [24] Q&A Session Summary Question: Update on cell and gene therapy customer count and demand after FDA leadership change - Management noted no immediate changes in demand post-leadership change, with customers in execution mode and expecting 15% growth in the segment [31] Question: Commentary on revenue per customer and mix shift with new customers - Management indicated that as new customers onboard, revenue per customer may soften, but mature customers are expected to increase their spending significantly as they progress through clinical trials [34] Question: Competitive position of the collaboration with Pluristics - Management expressed excitement about the collaboration, which targets existing customers and aims to expand into the cell therapy market, though material impact is not expected until 2026 [40] Question: Exposure to vaccines and recent CBER appointment - Management clarified that exposure to vaccines is minimal, with only 4% of revenue from academic and government institutions, and no immediate impact from NIH funding concerns [49][52] Question: Customer order patterns and potential risks to outlook - Management did not detect any pull-forward of orders and remains optimistic about mid-single-digit growth for the catalog business for the full year [59]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $9.8 million, a 5% increase from $9.3 million in Q1 2024 [15] - Gross profit for Q1 2025 was $3 million, compared to $2.2 million in Q1 2024, with a gross margin of 30.7%, up from 23.8% [19] - Net loss for Q1 2025 was $4.6 million, or negative $0.09 per diluted share, compared to a net loss of $8.1 million, or negative $0.20 per diluted share in Q1 2024 [20] Business Line Data and Key Metrics Changes - Revenue from Lab Essentials products was $8.1 million in Q1 2025, a 12% increase from $7.3 million in Q1 2024 [16][17] - Clinical Solutions revenue was $1.2 million in Q1 2025, a 32% decrease from $1.7 million in Q1 2024, attributed to lower average revenue per customer [17][18] - Revenue from custom products sold to biopharma customers grew mid single digits compared to Q1 2024, with expectations of at least 15% growth in 2025 [11][12] Market Data and Key Metrics Changes - The company serves over 500 academic and government institutions, which represented less than 4% of total revenue in February 2024 [7] - Less than 5% of total revenue comes from sales to customers outside the United States, with no material revenue from sales in China [7][8] - The company expects no material direct adverse impact from recent tariff policy changes due to its diverse customer base [8] Company Strategy and Development Direction - The growth strategy focuses on engaging early-stage therapeutic developers and supporting them through clinical trials to commercialization [9] - The company aims for sustainable above-market growth rates of 20% to 25% annually, despite current challenges in biotech funding [9] - A collaboration agreement with Pluristics was signed to expand the product portfolio, targeting both existing and new customer segments [13][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the 2025 plan, citing a strong start to the year and expectations for continued growth [10][14] - The company anticipates mid single-digit growth in catalog products and at least 15% growth in custom biopharma products for 2025 [22][23] - Management noted that while the macro environment is challenging, the core business is returning to double-digit growth [27] Other Important Information - Capital expenditures for Q1 2025 were $200,000, compared to $100,000 in Q1 2024 [21] - Free cash flow was negative $4.3 million for Q1 2025, an improvement from negative $6.7 million in Q1 2024 [21] - The company continues to expect free cash outflow of less than $12 million for the full year 2025 [26] Q&A Session Summary Question: Demand for cell and gene therapy customers after FDA leadership change - Management noted no immediate changes in demand but will assess customer feedback at upcoming conferences [32] Question: Revenue per customer trends and utilization of mature customers - Management indicated that as clinical customers progress through trials, spending increases significantly, with expectations of a 30-fold increase as they move to commercialization [35] Question: Competitive position of the collaboration with Pluristics - The collaboration is expected to enhance the company's presence in cell therapy workflows and target existing customers, though material impact is not anticipated until 2026 [40][41] Question: Exposure to academic and government institutions amid NIH funding cuts - Management confirmed that the 4% revenue from academic and government institutions is resilient, with no immediate impact observed from funding concerns [52][53] Question: Potential impacts of FDA and NIH changes on early-stage research - Management acknowledged potential benefits from a shift towards non-animal models but noted that it is still speculative [64] Question: Economics of the cryopreservation collaboration - The collaboration is expected to contribute positively to adjusted EBITDA, with the potential for broader market access through research use only versions of the product [70][71]