Standard BioTools(LAB) - 2025 Q1 - Quarterly Report

PART I Financial Statements (unaudited) The unaudited condensed consolidated financial statements for Q1 2025 show total revenues of $40.8 million, a net loss of $26.0 million, and a re-segmentation into a single operating segment Note 2. Business Combinations Purchase accounting for the SomaLogic merger was finalized with no adjustments, while the Sengenics acquisition saw a $0.3 million increase in goodwill and deferred tax liability - The purchase accounting for the SomaLogic merger was finalized as of December 31, 2024, with no measurement period adjustments recorded after the closing date, resulting in a bargain purchase gain of $25.2 million[39] - For the Sengenics acquisition, a measurement period adjustment was recorded in Q1 2025, increasing goodwill and deferred tax liability by $0.3 million due to the finalization of tax estimates[40] Note 3. Revenue and Geographic Area Total revenue for Q1 2025 decreased to $40.8 million due to lower consumables and lab services, with Americas remaining the largest region despite a decline Revenue by Type (Q1 2025 vs Q1 2024) | Revenue Type | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Instruments | $7,778 | $6,285 | | Consumables | $14,454 | $17,307 | | Lab services | $12,106 | $14,862 | | Field services | $5,501 | $6,165 | | Total Revenue | $40,795 | $45,540 | Revenue by Geographic Area (Q1 2025 vs Q1 2024) | Geographic Area | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Americas | $18,974 | $24,664 | | Europe, Middle East and Africa | $12,606 | $12,515 | | Asia-Pacific | $9,215 | $8,361 | | Total Revenue | $40,795 | $45,540 | - The company assumed a multi-year agreement with Illumina, including $124.5 million of minimum guaranteed royalties and a material right for Illumina to purchase SOMAmer reagents below standalone selling price, with the total transaction price estimated at $158.4 million to be recognized over an 8-year period from 2025 to 2032[43][44][45] Note 4. Goodwill and Acquired Intangible Assets, net Goodwill increased slightly to $111.7 million due to adjustments, with no impairment recorded after re-assessing reporting units to a single segment - Due to the change in reportable segments in Q1 2025, the company re-assessed its reporting units for goodwill impairment testing, consolidating from two units to one, and no goodwill impairment was recorded[52] Changes in Goodwill (Q1 2025) | Description | Amount (in thousands) | | :--- | :--- | | Balance as of December 31, 2024 | $111,297 | | Measurement period adjustment (Sengenics) | $336 | | Foreign currency translation | $86 | | Balance as of March 31, 2025 | $111,719 | Note 6. Commitments and Contingencies The company has $8.9 million in purchase commitments and faces ongoing stockholder litigation related to the SomaLogic merger, with an uncertain outcome - The company has minimum purchase commitments with Integrated DNA Technologies, Inc. (IDT) of $2.3 million annually for three years, and with LGC Genomics (LGC) of $1.0 million annually for two years[63][64] - The company is facing ongoing stockholder litigation related to the SomaLogic merger, alleging breach of fiduciary duty, with a motion to dismiss pending and oral arguments scheduled for July 7, 2025, and the outcome is uncertain[70] Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | Financial Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Total Revenue | $40,795 | $45,540 | | Gross Profit | $19,741 | $24,188 | | Loss from Operations | $(32,970) | $(60,182) | | Net Loss | $(26,033) | $(32,157) | | Net Loss per Share (basic and diluted) | $(0.07) | $(0.27) | Condensed Consolidated Balance Sheets (As of March 31, 2025) | Balance Sheet Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $150,880 | $166,728 | | Total Current Assets | $344,019 | $375,880 | | Total Assets | $579,597 | $612,344 | | Total Current Liabilities | $56,236 | $65,894 | | Total Liabilities | $125,002 | $140,622 | | Total Stockholders' Equity | $454,595 | $471,722 | - Effective Q1 2025, following the full integration of SomaLogic, the company changed its management structure and now operates as a single, consolidated multi-omics company, moving away from its previous two-segment structure (proteomics and genomics)[32][99] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 10% revenue decrease to $40.8 million in Q1 2025, offset by a 38% reduction in operating expenses, improving net loss to $26.0 million, with $258.1 million in liquidity Results of Operations Q1 2025 total revenue decreased 10% to $40.8 million due to lower services and consumables, while operating expenses fell 38% to $52.7 million from reduced transaction costs and restructuring Revenue Change by Type (Q1 2025 vs Q1 2024) | Revenue Type | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Instruments | $7,778 | $6,285 | $1,493 | 24% | | Consumables | $14,454 | $17,307 | $(2,853) | (16)% | | Lab services | $12,106 | $14,862 | $(2,756) | (19)% | | Field services | $5,501 | $6,165 | $(664) | (11)% | | Total Revenue | $40,795 | $45,540 | $(4,745) | (10)% | Operating Expense Change (Q1 2025 vs Q1 2024) | Expense Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $11,328 | $15,980 | $(4,652) | (29)% | | Selling, general and administrative | $38,707 | $46,943 | $(8,236) | (18)% | | Restructuring and related charges | $1,552 | $4,284 | $(2,732) | (64)% | | Transaction and integration expenses | $1,124 | $17,163 | $(16,039) | (93)% | | Total Operating Expenses | $52,711 | $84,370 | $(31,659) | (38)% | - The decrease in operating expenses was primarily driven by reductions in headcount from 2024 restructuring activities, reduced investment in certain R&D projects, and a significant drop in one-time legal, advisory, and integration costs associated with the SomaLogic merger in the prior-year period[133][134][136] Liquidity and Capital Resources The company ended Q1 2025 with $258.1 million in liquidity, sufficient for 12 months, and significantly improved operating cash flow to $30.3 million used, with no traditional debt - The company believes its existing liquidity of $258.1 million (cash, cash equivalents, and short-term investments) is sufficient to support operations for at least the next 12 months[146][147] Cash Flow Summary (Q1 2025 vs Q1 2024) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(30,283) | $(62,476) | | Net cash provided by investing activities | $14,625 | $318,075 | | Net cash used in financing activities | $(46) | $(19,733) | - Net cash used in operating activities decreased by $32.2 million YoY due to lower operating expenses following the completion of 2024 restructuring activities[154] - As of March 31, 2025, the company has fully repaid all traditional debt obligations and no longer maintains access to credit facilities[148] Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rates, foreign currency, inflation, and capital markets, though foreign currency impact has not been material - Primary market risks include interest rate risk on cash and investments, foreign currency risk from international operations, inflation risk on operating costs, and capital market risk affecting the ability to raise funds[164] - The company does not currently hedge its foreign currency exposure, and changes in currency values have not had a material impact on recent financial results[166] Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2025, despite implementing a new ERP system that changed internal controls over financial reporting - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[170] - A new enterprise resource planning (ERP) system was implemented in Q1 2025, representing a change in internal control over financial reporting, and management is taking steps to test and validate the new controls[171] PART II Legal Proceedings This section refers to Note 6 for details on legal proceedings, primarily ongoing stockholder litigation related to the SomaLogic merger - For detailed information on legal proceedings, the report refers to Note 6 of the financial statements[175] Risk Factors No material changes to risk factors were reported, with readers directed to the Annual Report on Form 10-K for a full discussion - The company refers to the risk factors discussed in its Annual Report on Form 10-K, indicating no new material risks have emerged during the quarter[176] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales occurred, and no shares were repurchased under the $50.0 million program during Q1 2025, with $40.5 million previously utilized - The company did not repurchase any shares of its common stock during the three months ended March 31, 2025, under its authorized $50.0 million share repurchase program[178] Other Information No officers or directors adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No officers or directors adopted, modified, or terminated any Rule 10b5-1 trading arrangements during Q1 2025[181] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The Exhibit List includes CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, as well as Inline XBRL documents[184]