Teknova(TKNO) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights Teknova achieved strong Q2 2025 financial performance with significant revenue growth and improved profitability, reiterating its positive full-year outlook Overview and Management Commentary 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][4] - 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] - CFO Matt Lowell noted significant improvements in adjusted EBITDA and free cash outflow compared to 2024, reinforcing the company's momentum[2] Key Financial Metrics Summary 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 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][9] - The company continues to anticipate full-year free cash outflow of less than $12 million for 2025[2][9] Detailed Second Quarter 2025 Financial Results 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 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 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] Operating Expenses Breakdown 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] Net Loss and Earnings Per Share 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 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 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 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] - The company offers customizable solutions for molecular diagnostics, synthetic biology, and emerging therapeutic modalities, supporting customers from RUO to GMP[11] - Headquartered in Hollister, California, Teknova operates over 180,000 square feet of state-of-the-art facilities with a modular manufacturing platform[11] Conference Call and Webcast Information 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] - 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] Investor and Media Contacts 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] - Media Contact: Jennifer Henry, Senior Vice President, Marketing, jenn.henry@teknova.com, +1 831-313-1259[19] Condensed Financial Statements (Unaudited) 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 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 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 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 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 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] - Adjusted EBITDA is defined as net loss adjusted for interest, taxes, depreciation, amortization, stock-based compensation, and other non-recurring items[13] - Free Cash Flow is defined as cash used in operating activities plus purchases of property, plant, and equipment[14] Reconciliation of Non-GAAP Measures to GAAP 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 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] - 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] - 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][18]