Standard BioTools(LAB) - 2024 Q3 - Quarterly Results

Executive Summary & Recent Highlights Recent Highlights Standard BioTools reported Q3 2024 revenue of $45 million, demonstrating significant financial improvements year-over-year, including a 50% improvement in adjusted EBITDA and a 35% reduction in net loss, driven by ongoing merger cost synergy realization | Metric | Q3 2024 Performance | | :-------------------------------- | :------------------ | | Revenue | $45 million | | Adjusted EBITDA Improvement (YoY) | 50% | | Net Loss Improvement (YoY) | 35% | | Merger Synergies Operationalized | ~$80 million | | Cash, Cash Equivalents, Restricted Cash & Short-term Investments (as of Sep 30, 2024) | $368 million | CEO Commentary CEO Michael Egholm highlighted the company's focus on commercial execution and operating efficiency, leading to sequential top-line improvement and reduced spending. He reiterated the company's path to adjusted EBITDA break-even in 2026, supported by accelerated merger synergies, and emphasized strategic investments in multi-omics and M&A for long-term growth - The company focused Q3 efforts on driving commercial execution and enhancing overall operating efficiency, resulting in sequential top-line improvement and a significant reduction in spend[2] - Anticipated $80 million of merger synergies are being accelerated into 2025, contributing to a 50% improvement in adjusted EBITDA year over year, keeping the company on track toward achieving its break-even adjusted EBITDA target in 2026[2] - Standard BioTools is investing in growth levers within its leading multi-omics portfolio and actively pursuing strategic M&A to become a diversified leader in the life science tools industry[2] Financial Performance Overview Selected Unaudited Interim Financial Results (GAAP) The company reported GAAP financial results for Q3 and the nine months ended September 30, 2024, showing a net loss of $26.9 million for the quarter and $104.8 million for the nine-month period, alongside an adjusted EBITDA loss of $14.2 million for Q3 Selected Unaudited Interim Financial Results (GAAP): | Metric | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------ | :------------------------------ | :----------------------------- | | Revenue | $45.0 million | $127.7 million | | Gross margin | 51.7 % | 48.8 % | | Non-GAAP gross margin | 56.9 % | 53.2 % | | Operating expenses | $55.0 million | $204.8 million | | Non-GAAP operating expenses | $39.8 million | $137.2 million | | Operating loss | $(31.7) million | $(142.4) million | | Net loss | $(26.9) million | $(104.8) million | | Adjusted EBITDA | $(14.2) million | $(69.2) million | | Cash, cash equivalents, restricted cash, and short-term investments | $367.6 million | $367.6 million | Selected Pro Forma Combined Unaudited Interim Financial Results Pro forma results, combining Standard BioTools and SomaLogic, indicate a 5% year-over-year revenue decrease for Q3 2024, but significant improvements in gross margins, operating expenses, net loss, and adjusted EBITDA compared to the prior year's pro forma figures, driven by merger synergies and efficiency gains Selected Pro Forma Combined Unaudited Interim Financial Results: | Metric | Three Months Ended Sep 30, 2024 | Pro Forma Three Months Ended Sep 30, 2023 | Combined Nine Months Ended Sep 30, 2024 | Pro Forma Nine Months Ended Sep 30, 2023 | | :------------------------------------------ | :------------------------------ | :---------------------------------------- | :-------------------------------------- | :--------------------------------------- | | Revenue | $45.0 million | $47.4 million | $128.4 million | $141.0 million | | Gross margin | 51.7 % | 42.5 % | 47.5 % | 43.9 % | | Non-GAAP gross margin | 56.9 % | 51.7 % | 53.3 % | 52.2 % | | Operating expenses | $55.0 million | $67.4 million | $208.1 million | $214.7 million | | Non-GAAP operating expenses | $39.8 million | $52.7 million | $137.2 million | $175.7 million | | Operating loss | $(31.7) million | $(47.3) million | $(147.2) million | $(152.8) million | | Net loss | $(26.9) million | $(41.2) million | $(134.6) million | $(109.0) million | | Adjusted EBITDA | $(14.2) million | $(28.2) million | $(68.9) million | $(102.0) million | Revenue Breakdown Q3 2024 revenue was $45.0 million, a 5% year-over-year decrease. Consumables revenue grew 13% YoY to $14.0 million, driven by assay kits sales, while Instruments revenue declined 42% YoY to $5.6 million due to capital-constrained end-markets, particularly in China. Services revenue remained flat at $24.4 million, benefiting from favorable timing of large customer projects | Revenue Type | Q3 2024 Revenue | YoY Change | | :------------- | :-------------- | :--------- | | Total Revenue | $45.0 million | -5% | | Consumables | $14.0 million | +13% | | Instruments | $5.6 million | -42% | | Services | $24.4 million | Flat | - Consumables revenue growth was driven by assay kits sales to SomaScan authorized sites and the Illumina early access program[5] - Instrument revenue was impacted by capital-constrained end-markets globally, with particular weakness in China[5] Gross Margins Gross margins improved significantly in Q3 2024, reaching 51.7% (GAAP) and 56.9% (non-GAAP), up from 42.5% and 51.7% respectively in Q3 2023, primarily due to a positive product mix and continued efficiency gains from the Standard BioTools Business System (SBS) | Metric | Q3 2024 | Q3 2023 | | :------------------ | :------ | :------ | | GAAP Gross Margin | 51.7% | 42.5% | | Non-GAAP Gross Margin | 56.9% | 51.7% | - Gross margins were positively impacted by a favorable mix in the third quarter and continued incremental efficiency gains from SBS[5] Operating Expenses Operating expenses decreased by $12.5 million (18.5%) to $55 million in Q3 2024 compared to Q3 2023. Non-GAAP operating expenses, excluding merger-related costs, stock-based compensation, and restructuring charges, fell by $12.8 million (24%) to $39.8 million, reflecting ongoing merger cost synergies, a bonus accrual reduction, and productivity gains from SBS | Metric | Q3 2024 | Q3 2023 | Change | | :-------------------------- | :-------------- | :-------------- | :----- | | Operating Expenses | $55.0 million | $67.4 million | -$12.5 million (-18.5%) | | Non-GAAP Operating Expenses | $39.8 million | $52.7 million | -$12.8 million (-24%) | - The decrease in operating expenses is a result of ongoing realization of merger cost synergies, a bonus accrual reduction in line with full year expectations, and continued productivity gains from SBS[5] Net Loss and Adjusted EBITDA Net loss for Q3 2024 improved by $14.3 million (34.6%) to $26.9 million, compared to $41.2 million in Q3 2023. Adjusted EBITDA loss also improved by $14 million (49.6%) to $14.2 million, from $28.2 million in the prior year, demonstrating significant progress towards profitability | Metric | Q3 2024 | Q3 2023 | Improvement | | :-------------- | :-------------- | :-------------- | :---------- | | Net Loss | $(26.9) million | $(41.2) million | $14.3 million (34.6%) | | Adjusted EBITDA | $(14.2) million | $(28.2) million | $14.0 million (49.6%) | Financial Outlook FY 2024 Revenue Outlook Standard BioTools has reiterated its full year 2024 revenue guidance, projecting a range of $170 million to $175 million | Metric | FY 2024 Revenue Guidance | | :------------- | :----------------------- | | Revenue Range | $170 million to $175 million | Additional Information Earnings Conference Call Information Standard BioTools hosted a conference call and webcast on October 30, 2024, to discuss its third quarter 2024 financial results, with live audio and an archived version available online - A conference call and webcast were held on October 30, 2024, at 1:30 p.m. PT (4:30 p.m. ET) to discuss Q3 2024 financial results[7] - Live audio and an archived version of the webcast are available on the Company's website under the Events & Presentations page[7] Use of Non-GAAP Financial Information The company presents non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating expenses, and adjusted EBITDA, to supplement GAAP results. Management uses these measures to assess core operating performance, compare against forecasts, and benchmark competitors, excluding items not indicative of core operations - Non-GAAP financial measures presented include non-GAAP gross margin, non-GAAP operating expenses, and adjusted EBITDA[8] - Management uses non-GAAP measures to assess core operating performance, compare against forecasts and strategic plans, and benchmark against competitors, by excluding certain non-cash and other expenses[8] Unaudited Pro Forma Results Explanation The unaudited pro forma financial information combines the results of Standard BioTools and SomaLogic, adjusted for merger-related impacts such as bargain purchase gain, transaction costs, amortization of acquired intangible assets, stock-based compensation, and depreciation. These pro forma results are for informational purposes and do not necessarily reflect actual past or future performance - Pro forma financial information combines results of Standard BioTools and SomaLogic, adjusted for nonrecurring merger impacts like bargain purchase gain and transaction costs[9] - Adjustments also include business combination accounting effects such as additional amortization expense from acquired intangible assets, adjustments to stock-based compensation, and additional depreciation expense[10] - The unaudited pro forma financial information is for informational purposes only and not necessarily indicative of actual results if the acquisitions had taken place on January 1, 2023[10] Forward-Looking Statements This section contains forward-looking statements regarding future financial performance, operational plans, market opportunities, and merger benefits. These statements are subject to numerous risks and uncertainties, including integration challenges, higher-than-expected costs, market conditions, and competition, which could cause actual results to differ materially - Statements regarding future financial and business performance, operational and strategic plans, market opportunity, and realization of merger benefits are forward-looking[11] - Risks include potential delays in realizing merger benefits, higher-than-expected costs, integration disruptions, challenges in new product development, supply chain issues, and market pressures[12] About Standard BioTools Inc. Standard BioTools Inc. (formerly Fluidigm Corporation), parent company of SomaLogic Inc., provides essential next-generation technologies for biomedical research. The company leverages proprietary mass cytometry and microfluidics to offer insights in health and disease, collaborating with global academic, government, and pharmaceutical laboratories in areas like oncology and immunology - Standard BioTools Inc. (Nasdaq: LAB), formerly Fluidigm Corporation, is the parent company of SomaLogic Inc., offering essential, standardized next-generation technologies for biomedical research[13] - The company provides reliable insights using proprietary mass cytometry and microfluidics technologies, focusing on translational and clinical research needs in oncology, immunology, and immunotherapy[13] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations The Condensed Consolidated Statements of Operations detail the company's revenues, costs, and expenses for the three and nine months ended September 30, 2024 and 2023, showing total revenue of $44.97 million for Q3 2024 and a net loss of $26.94 million Condensed Consolidated Statements of Operations (in thousands): | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenue | $44,969 | $25,367 | $127,714 | $78,152 | | Gross profit | $23,261 | $11,154 | $62,357 | $37,093 | | Total operating expenses | $54,979 | $32,326 | $204,776 | $92,307 | | Loss from operations | $(31,718) | $(21,172) | $(142,419) | $(55,214) | | Net loss | $(26,938) | $(20,997) | $(104,813) | $(54,880) | | Net loss per share, basic and diluted | $(0.07) | $(0.27) | $(0.44) | $(0.69) | Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets as of September 30, 2024, show total assets of $681.54 million, a significant increase from $323.07 million at December 31, 2023, primarily driven by increases in cash, short-term investments, and assets acquired through the merger. Total liabilities also increased to $192.21 million Condensed Consolidated Balance Sheets (in thousands): | Metric | September 30, 2024 | December 31, 2023 | | :------------------------------------------ | :------------------- | :------------------ | | Cash and cash equivalents | $210,647 | $51,704 | | Short-term investments | $155,683 | $63,191 | | Total current assets | $453,607 | $158,215 | | Total assets | $681,539 | $323,067 | | Total current liabilities | $120,615 | $109,327 | | Total liabilities | $192,206 | $159,865 | | Total stockholders' equity (deficit) | $489,333 | $(148,051) | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, net cash used in operating activities was $(129.40) million. Investing activities provided $337.45 million, largely due to cash acquired in the merger and proceeds from investments. Financing activities used $(48.10) million, resulting in a net increase in cash, cash equivalents, and restricted cash of $159.44 million Condensed Consolidated Statements of Cash Flows (in thousands): | Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(129,395) | $(29,226) | | Net cash provided by investing activities | $337,448 | $33,354 | | Net cash used in financing activities | $(48,096) | $(5,806) | | Net increase in cash, cash equivalents and restricted cash | $159,439 | $(1,874) | | Cash, cash equivalents and restricted cash at end of period | $211,938 | $80,450 | - Cash and restricted cash acquired in the merger contributed $280.03 million to investing activities[18] Reconciliation of GAAP to Non-GAAP Financial Information Revenue and Non-GAAP Pro Forma Combined Revenue This section provides a detailed breakdown of revenue by product, service, and collaboration for both GAAP and Non-GAAP Pro Forma Combined figures. For Q3 2024, GAAP total revenue was $44.97 million, while the Pro Forma total revenue was $44.97 million, compared to $47.42 million in Q3 2023 Pro Forma Revenue (in thousands): | Revenue Type | Three Months Ended Sep 30, 2024 (GAAP) | Three Months Ended Sep 30, 2023 (GAAP) | Three Months Ended Sep 30, 2024 (Pro Forma) | Three Months Ended Sep 30, 2023 (Pro Forma) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Instruments | $5,586 | $9,002 | $5,586 | $9,712 | | Consumables | $14,007 | $9,709 | $14,007 | $12,417 | | Lab services | $18,247 | $114 | $18,247 | $17,980 | | Field services | $6,191 | $6,452 | $6,191 | $6,452 | | Collaboration and other revenue | $938 | $90 | $938 | $854 | | Total Revenue | $44,969 | $25,367 | $44,969 | $47,415 | Reconciliation of GAAP to Non-GAAP Gross Profit and Margin Percentage This section reconciles GAAP gross profit and margin to non-GAAP figures by adjusting for amortization of acquired intangible assets, depreciation, amortization, stock-based compensation expense, and cost of sales adjustments. For Q3 2024, GAAP gross margin was 51.7%, while non-GAAP gross margin was 56.9% Reconciliation of Gross Profit and Margin Percentage (in thousands): | Metric | Three Months Ended Sep 30, 2024 (GAAP) | Three Months Ended Sep 30, 2023 (GAAP) | Three Months Ended Sep 30, 2024 (Pro Forma) | Three Months Ended Sep 30, 2023 (Pro Forma) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Gross profit | $23,261 | $11,154 | $23,261 | $20,138 | | Amortization of acquired intangible assets | $555 | $2,800 | $555 | $3,355 | | Depreciation and amortization | $1,445 | $333 | $1,445 | $760 | | Stock-based compensation expense | $364 | $188 | $364 | $260 | | Non-GAAP gross profit | $25,625 | $14,475 | $25,625 | $24,513 | | Gross margin percentage | 51.7% | 44.0% | 51.7% | 42.5% | | Non-GAAP gross margin percentage | 56.9% | 57.0% | 56.9% | 51.7% | Reconciliation of GAAP to Non-GAAP Operating Expenses This section reconciles GAAP operating expenses to non-GAAP operating expenses by excluding restructuring and related charges, transaction and integration expenses, stock-based compensation, amortization of acquired intangible assets, depreciation, and gain/loss on disposal of property and equipment. For Q3 2024, GAAP operating expenses were $54.98 million, while non-GAAP operating expenses were $39.83 million Reconciliation of Operating Expenses (in thousands): | Metric | Three Months Ended Sep 30, 2024 (GAAP) | Three Months Ended Sep 30, 2023 (GAAP) | Three Months Ended Sep 30, 2024 (Pro Forma) | Three Months Ended Sep 30, 2023 (Pro Forma) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Operating expenses | $54,979 | $32,326 | $54,979 | $67,431 | | Restructuring and related charges | $(2,341) | $(1,998) | $(2,341) | $(1,998) | | Transaction and integration expenses | $(5,079) | $(1,666) | $(5,079) | $(5,823) | | Stock-based compensation expense | $(5,557) | $(3,198) | $(5,557) | $(4,668) | | Amortization of acquired intangible assets | $(161) | - | $(161) | $(161) | | Depreciation and amortization | $(1,986) | $(853) | $(1,986) | $(2,110) | | Non-GAAP operating expenses | $39,825 | $24,611 | $39,825 | $52,671 | Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA This section reconciles GAAP net loss to non-GAAP adjusted EBITDA by adding back income tax expense, interest income (net), amortization, depreciation, restructuring and related charges, transaction and integration expenses, stock-based compensation, and other non-operating items. For Q3 2024, GAAP net loss was $(26.94) million, while adjusted EBITDA was $(14.20) million Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA (in thousands): | Metric | Three Months Ended Sep 30, 2024 (GAAP) | Three Months Ended Sep 30, 2023 (GAAP) | Three Months Ended Sep 30, 2024 (Pro Forma) | Three Months Ended Sep 30, 2023 (Pro Forma) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net loss | $(26,938) | $(20,997) | $(26,938) | $(41,204) | | Income tax expense (benefit) | $118 | $50 | $118 | $528 | | Interest income, net | $(3,941) | $(340) | $(3,941) | $(6,447) | | Amortization of acquired intangible assets | $716 | $2,800 | $716 | $3,516 | | Depreciation and amortization | $3,431 | $1,186 | $3,431 | $2,870 | | Restructuring and related charges | $2,341 | $1,998 | $2,341 | $1,998 | | Transaction and integration expenses | $5,079 | $1,666 | $5,079 | $5,823 | | Stock-based compensation expense | $5,921 | $3,386 | $5,921 | $4,928 | | Adjusted EBITDA | $(14,200) | $(10,136) | $(14,200) | $(28,158) |