Maravai LifeSciences(MRVI) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported $73 million in revenue for Q2 2024, with an adjusted EBITDA of $17 million and an adjusted fully diluted EPS of $0 for the quarter [4][24] - The GAAP net loss before non-controlling interests was $14 million for Q2 2024, compared to a net loss of $12 million for Q2 2023 [24] - The adjusted EBITDA margin was 23% in Q2 2024, up from 13% in Q2 2023 and 12% in Q1 2024 [24] Business Segment Data and Key Metrics Changes - The nucleic acid production segment generated $58 million in revenue for Q2 2024, with an adjusted EBITDA of $21 million and a margin of 36% [30] - The Biologic Safety Testing segment had revenues of $15 million in Q2 2024, with an adjusted EBITDA of $9 million and a margin of 63%, which is lower than recent trends [30] Market Data and Key Metrics Changes - The company noted a decline in the Biologic Safety Testing business in China, which accounted for over 80% of the segment's results, leading to unexpected drops in revenue [40] - The company expects the Biologic Safety Testing segment to grow in the low single digits for 2024, while the nucleic acid production segment is projected to be around $210 million at the midpoint of revenue guidance [32] Company Strategy and Development Direction - The company is focused on expanding its capabilities in mRNA production and has introduced significant new innovations to the market [36] - The company is committed to building a strong foundation for long-term, diversified, and sustainable growth [36] - The company is pursuing both organic investments and external partnerships, including collaborations with academic institutions [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamental strength of end markets and the value provided to customers for drug therapies, diagnostics, and vaccines [36] - The company anticipates a sequential decline in revenue in Q3, primarily in the nucleic acid production segment, due to high-volume orders in Q2 that are not expected to repeat [38] Other Important Information - The company ended Q2 2024 with $573 million in cash, up $11 million from Q1, and $530 million in long-term debt, resulting in a net cash position of $43 million [5][28] - The company published its third Environmental, Social, and Governance report, highlighting advancements in environmental disclosures and commitment to sustainable growth [22][23] Q&A Session Summary Question: Any one-timers or lumpy orders in NAP for Q2? - Management indicated that there were high-volume CleanCap orders in Q2, which are expected to decline sequentially in Q3 [38] Question: How much of the BST business is in China? - Over 80% of the BST results were impacted by a drop in China, which was unexpected [40] Question: What are the dynamics of pharma customers' R&D spend? - There has been a reprioritization of spending, with positive dynamics in mRNA program starts [42] Question: How is the pricing environment? - Pricing varies by program, and the company takes price opportunities when possible [46][49] Question: What is the status of Flanders 2 capacity? - The company is at the tail end of the capital cycle for Flanders 2 and is scaling labor and overhead as they fill the factory [56] Question: Have any Phase 2 or Phase 3 programs been incorporated into guidance? - Yes, the company has incorporated commitments for Phase 2/3 pivotal trials into its guidance [60]