908 Devices (MASS) Stifel 2024 Healthcare Conference summary

Business overview and growth drivers

• Focus on point-of-need chemical detection, expanding lab-grade tools beyond central labs, with a strong forensic franchise making up about 75% of revenues and 2,700 handheld devices deployed.

• Bioprocessing/biopharma desktop devices have faced macro headwinds but are supported by five articulated growth drivers and cost structure improvements, including RedWave Technology acquisition.

• Handhelds have grown at a 27% CAGR from 2018–2023, with recent years above 14% CAGR, despite government budget delays causing sales lumpiness.

• Portfolio expansion from one to four handheld products and increased international and state/local sales help balance revenue volatility.

• Reference customers, such as the U.S. Army, have aided in expanding enterprise accounts.

RedWave acquisition and product synergies

• RedWave brings FTIR technology, complementing mass spec handhelds, expanding analyte detection to 22,000 in bulk and 5,000 gases.

• Sales and applications teams are well-positioned to integrate RedWave products, leveraging existing training and commercial infrastructure.

• Identified $7.5 million in cost and revenue synergies, with RedWave's state/local presence and new federal/international opportunities.

• Cross-selling is already occurring, with bundled deals and broader customer engagement.

• RedWave's trajectory is expected to match historical handheld growth rates.

Market expansion and untapped applications

• FTIR and mass spec technologies are applicable to diagnostics, food, air, water, forensics, and bioprocessing.

• XplorIR, a RedWave product, enables detection of 5,000 gases, broadening applications to environmental and hazmat markets.

• Year-to-date shipments of XplorIR have doubled compared to the previous year.

• International enterprise accounts are growing, with the largest APAC order shipped in October and expansion in the Middle East and Europe.

• Diversification across products and markets helps mitigate reliance on large enterprise accounts.