Teknova(US:TKNO)2025-05-08 22:00Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $9.8 million, a 5% increase from $9.3 million in Q1 2024 [15] - Gross profit for Q1 2025 was $3 million, compared to $2.2 million in Q1 2024, with a gross margin of 30.7%, up from 23.8% [19] - Net loss for Q1 2025 was $4.6 million, or negative $0.09 per diluted share, compared to a net loss of $8.1 million, or negative $0.20 per diluted share in Q1 2024 [20] Business Line Data and Key Metrics Changes - Revenue from Lab Essentials products was $8.1 million in Q1 2025, a 12% increase from $7.3 million in Q1 2024 [16][17] - Clinical Solutions revenue was $1.2 million in Q1 2025, a 32% decrease from $1.7 million in Q1 2024, attributed to lower average revenue per customer [17][18] - Revenue from custom products sold to biopharma customers grew mid single digits compared to Q1 2024, with expectations of at least 15% growth in 2025 [11][12] Market Data and Key Metrics Changes - The company serves over 500 academic and government institutions, which represented less than 4% of total revenue in February 2024 [7] - Less than 5% of total revenue comes from sales to customers outside the United States, with no material revenue from sales in China [7][8] - The company expects no material direct adverse impact from recent tariff policy changes due to its diverse customer base [8] Company Strategy and Development Direction - The growth strategy focuses on engaging early-stage therapeutic developers and supporting them through clinical trials to commercialization [9] - The company aims for sustainable above-market growth rates of 20% to 25% annually, despite current challenges in biotech funding [9] - A collaboration agreement with Pluristics was signed to expand the product portfolio, targeting both existing and new customer segments [13][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the 2025 plan, citing a strong start to the year and expectations for continued growth [10][14] - The company anticipates mid single-digit growth in catalog products and at least 15% growth in custom biopharma products for 2025 [22][23] - Management noted that while the macro environment is challenging, the core business is returning to double-digit growth [27] Other Important Information - Capital expenditures for Q1 2025 were $200,000, compared to $100,000 in Q1 2024 [21] - Free cash flow was negative $4.3 million for Q1 2025, an improvement from negative $6.7 million in Q1 2024 [21] - The company continues to expect free cash outflow of less than $12 million for the full year 2025 [26] Q&A Session Summary Question: Demand for cell and gene therapy customers after FDA leadership change - Management noted no immediate changes in demand but will assess customer feedback at upcoming conferences [32] Question: Revenue per customer trends and utilization of mature customers - Management indicated that as clinical customers progress through trials, spending increases significantly, with expectations of a 30-fold increase as they move to commercialization [35] Question: Competitive position of the collaboration with Pluristics - The collaboration is expected to enhance the company's presence in cell therapy workflows and target existing customers, though material impact is not anticipated until 2026 [40][41] Question: Exposure to academic and government institutions amid NIH funding cuts - Management confirmed that the 4% revenue from academic and government institutions is resilient, with no immediate impact observed from funding concerns [52][53] Question: Potential impacts of FDA and NIH changes on early-stage research - Management acknowledged potential benefits from a shift towards non-animal models but noted that it is still speculative [64] Question: Economics of the cryopreservation collaboration - The collaboration is expected to contribute positively to adjusted EBITDA, with the potential for broader market access through research use only versions of the product [70][71]