908 Devices(US:MASS)2023-03-14 16:00Financial Performance - Revenue for the year ended December 31, 2022, was $46.9 million, an increase from $42.2 million in 2021, while net losses were $33.6 million in 2022 compared to $22.2 million in 2021[393]. - Total revenue for the year ended December 31, 2022, was $46.85 million, a 11% increase from $42.21 million in 2021[439]. - Device sales revenue decreased by 14% to $28.76 million in 2022, primarily due to a drop in handheld device sales[441]. - Gross profit for 2022 was $26.02 million, an increase of $2.79 million from $23.23 million in 2021, with a gross profit margin of 55%[439]. - Product and service gross profit increased by $1.6 million, or 7%, for the year ended December 31, 2022, with a gross profit margin of 54%[443]. - License and contract revenue increased by $1.3 million, or 116%, for the year ended December 31, 2022, with a gross profit margin of 83%[444]. - The net loss for 2022 was $33.56 million, compared to a net loss of $22.17 million in 2021, highlighting increased operational costs[439]. Revenue Composition - Recurring revenue accounted for 35% of total product and service revenue in 2022, up from 19% in 2021, indicating a significant increase in consumables and services[409]. - Product and service revenue rose by $3.37 million, or 8%, to $44.48 million in 2022, driven by a 101% increase in consumables and service revenue[440]. - Consumables and service revenue reached $15.72 million in 2022, up from $7.82 million in 2021, reflecting strong demand for accessories and service offerings[441]. - The company expects consumables and service revenue to continue growing as the installed base expands, indicating a positive outlook for recurring revenue streams[424]. - The company anticipates that as the installed base of devices grows, recurring revenue will increase and become a more significant contributor to overall revenue[410]. Operational Highlights - Total product placements for 2022 were 450 units, a decrease from 574 units in 2021, with notable fluctuations due to customer type and size[417]. - The MX908 device placements were 370 units in 2022, down from 492 units in 2021, while Rebel and ZipChip Interface placements were 50 and 30 units, respectively[417]. - Cumulative product placements increased to 2,385 devices as of December 31, 2022, from 1,935 in 2021, with MX908 placements rising to 2,020 from 1,650[418]. Expenses and Investments - Research and development expenses increased by $4.46 million to $17.53 million in 2022, indicating a commitment to innovation and product development[439]. - Selling, general and administrative expenses rose by $11.64 million to $43.88 million in 2022, reflecting growth in sales and marketing efforts[439]. - Research and development expenses rose to $17.5 million, an increase of $4.5 million, representing 37% of total revenue for the year ended December 31, 2022[448]. - Selling, general and administrative expenses increased to $43.9 million, up $11.6 million, accounting for 94% of total revenue for the year ended December 31, 2022[449]. Cash Flow and Financing - Cash used in operating activities was $20.9 million for the year ended December 31, 2022, compared to $29.1 million in 2021[467]. - As of December 31, 2022, the company had cash and cash equivalents of $188.4 million, expected to fund operations for at least the next twelve months[455]. - The 2022 Revolver provides a revolving line of credit of up to $35.0 million, with interest-only payments allowed until November 2, 2025[462]. - The outstanding principal balance under the 2022 Revolver was $15.0 million as of December 31, 2022, which was repaid in full on January 4, 2023[463]. - The company plans to seek additional funding through various means, including private or public equity financings and collaborations[466]. - Net cash used in investing activities for the year ended December 31, 2022, was $15.8 million, primarily due to the acquisition of Trace for $13.8 million[470]. - Cash provided by financing activities for the year ended December 31, 2022, was $1.2 million, mainly from common stock issuance upon option exercises[471]. Economic and Market Conditions - The company is monitoring macroeconomic conditions, including inflation and interest rates, which could impact customer spending and order timing[399]. - The company believes that the long-term opportunity for its products and services remains unchanged despite current economic uncertainties[403]. - Inflation and changing prices have not materially affected the business over the last two years[505]. - The company is unable to predict the future impact of inflation or changing prices on its business[505]. - The company qualifies as a smaller reporting company and is not required to provide certain market risk disclosures[506]. Acquisitions - The company completed the acquisition of Trace for a total consideration of $17.3 million, which includes a $14.4 million initial cash payment and up to $2.0 million contingent cash based on milestones[392]. Revenue Recognition - Revenue is recognized when control of products or services is transferred to customers, reflecting the transaction price expected[484]. - Revenue from contracts with the U.S. government is typically based on estimated or actual costs, with pricing governed by the Federal Acquisition Regulation[485]. - The company recognizes revenue for long-term contracts based on the cost-to-cost measure of progress, assessing total costs expected to be incurred[487]. Goodwill and Intangible Assets - Goodwill is evaluated for impairment annually, with the option for interim assessments if circumstances indicate potential impairment[494]. - The company uses the income approach to determine the fair value of identifiable intangible assets, estimating after-tax cash flows and discounting them to present value[501]. - Adjustments to assets acquired and liabilities assumed may be recorded during the measurement period, impacting goodwill[503].