Seer(US:SEER)2024-11-07 02:00Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $4 million, a decrease of 3% compared to $4.2 million in Q3 2023, primarily due to a decrease in related party revenue and grant revenue [12] - Gross profit was $1.9 million for Q3 2024, representing a gross margin of 48%, down from 52% in Q3 2023 [13] - Net loss for Q3 2024 was $21.3 million, compared to a net loss of $21.1 million in Q3 2023 [14] - The company ended the quarter with approximately $312 million in cash, cash equivalents, and investments [14] Business Line Data and Key Metrics Changes - Product revenue for Q3 2024 was $3.1 million, including $180,000 of related party revenue, driven by an increase in instrument and consumable kit sales [12] - Service revenue was $847,000 in Q3 2024, primarily from STAC service projects, reflecting strong customer interest [12] - Grant and other revenue was $90,000 for Q3 2024, consisting of lease and shipping revenue [13] Market Data and Key Metrics Changes - The company continues to see strong demand for its STAC services, with a strong pipeline heading into the end of the year despite a challenging funding environment [8] - The partnership with Thermo Fisher Scientific is expected to enhance market reach and distribution, particularly for proteomic studies in biofluids [6][28] Company Strategy and Development Direction - The company is focused on enhancing access to the Proteograph Product Suite, driving evidence and publications, and expanding applications [11] - The collaboration with Thermo Fisher is aimed at co-marketing and selling the Proteograph alongside their Orbitrap Astral mass spectrometers, expected to launch in early 2025 [6][8] - The company is investing in strategic studies and projects at lower price points to generate data and publications, reinforcing the value proposition of the Proteograph [8][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in picking up momentum despite ongoing macro environment pressures, with expectations for revenue in the range of $13 million to $15 million for 2024 [5][14] - The company anticipates fluctuations in capital purchasing but is optimistic about the long-term value of its technology [5][11] - Management noted that the proteomics market is in its infancy and is expected to grow, with increasing recognition of the value of untargeted approaches [24] Other Important Information - The company repurchased approximately 3.7 million shares at an average cost of $1.78 per share during Q3 2024, with $14.7 million remaining under the share repurchase program [14] - Free cash flow loss was approximately $39 million for the nine months ended September 30, 2024, with an expectation that 2024 free cash flow loss will be less than in 2023 [14] Q&A Session Summary Question: Guidance for Q4 revenue and budget flush dynamics - Management indicated that guidance reflects timing issues with opportunities in the pipeline and does not forecast a budget flush for Q4 [18] Question: Impact of expanded sales and marketing team - The expanded sales and marketing team is expected to create opportunities, with benefits anticipated later in 2024 and into 2025 [19] Question: Shift towards academic customers - The shift towards academic customers is attributed to increased publications and the time required for academics to secure funding, while commercial customers face capital constraints [20][22] Question: Competition in the proteomics space - The proteomics market is expected to grow, with both targeted and untargeted approaches coexisting and driving demand for each other [24] Question: Margins outlook for 2025 - Management expects to maintain gross margins around 50% for the back half of the year, with more clarity to be provided in the year-end call [25] Question: Impact of collaboration with Thermo Fisher - The partnership is expected to shorten the sales cycle for the Proteograph and benefit customers conducting proteomic studies in biofluids [27][28] Question: Progress of STAC program in Germany - The STAC program in Germany is seeing good traction, with expectations for steady growth in service business into 2025 [29]