Standard BioTools (LAB) Q2 2024 earnings summary

Executive summary

• Leadership transition: CFO Jeff Black to depart, Alex Kim to serve as interim CFO, and Sean Mackay appointed Chief Business Officer, expanding his role to product management, marketing, and investor relations.

• Completed merger with SomaLogic in January 2024, expanding proteomics capabilities and product offerings.

• Accelerated cost synergy realization from SomaLogic integration, pulling forward $80M cost reduction target to end of 2024, aiming for break-even Adjusted EBITDA by 2026.

• Revenue guidance for 2024 revised down to $170M–$175M due to contract delays, industry-wide capital spending headwinds, and macroeconomic pressures.

• Company remains confident in long-term outlook, emphasizing operational scale, M&A, diversification, and a robust pipeline.

Financial highlights

• Q2 2024 revenue: $37.2M, down 23% year-over-year; H1 2024 revenue: just over $83M, down 11%.

• Product revenue in Q2: $22M, down 10% year-over-year; first half: $46M, up 6%.

• Service revenue in Q2: $14M, down 37% year-over-year; SomaScan service revenue in Q2: $8M, down 50%.

• Non-GAAP gross margin Q2: 45% (down from 53%); first half: 51% (down from 53%).

• Ended Q2 with $396M in cash, cash equivalents, and short-term investments.

Outlook and guidance

• 2024 revenue guidance revised to $170M–$175M.

• Commitment to reach break-even Adjusted EBITDA for full year 2026, regardless of top-line performance.

• Cost synergies of $80M to be fully realized by end of 2024, a year ahead of plan.

• Expecting sequential revenue improvement in the second half, driven by uptick in pharma activity and instrument placements.

• Targeting mid-60% non-GAAP gross margin profile by 2026 through sales growth, product mix shift, and cost reductions.