Standard BioTools Inc.
Q4 2020 Earnings Call Transcript

Published: 10 Feb 2021

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to Fluidigm Fourth Quarter 2020 Financial Results. please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Agnes Lee. Please go ahead ma'am.

[Agnes Lee:]

Thank you, Jewel. Good afternoon, everyone. Welcome to Fluidigm's fourth quarter 2020 earnings conference call. At the close of the market today, Fluidigm released its financial results for the quarter ended December 30, 2020. During this call, we will review our results and provide commentary on recent commercial activity, market trends and our strategic business initiative and our response to the COVID-19 pandemic. Presenting for Fluidigm today will be Chris Linthwaite, our President and Chief Executive Officer; and Vikram Jog, our CFO. During the call and subsequent Q&A session, we will make forward-looking statements about events and circumstances that have not yet occurred, including plans and projections for our business, future financial results and market trends and opportunities. Examples include statements about expected financial performance, including guidance related to revenues, product line performance, net loss, margin, operating expenses, and investment plans as well as statements about COVID-19 testing opportunities, plan product releases, collaborations, partnerships, funding sources, market and revenue growth, expectation, trends in diagnostics and other clinical markets and Fluidigm's strategic plans to access and grow those markets.

[Chris Linthwaite:]

Thank you, Agnes. Good afternoon. As I think about everything that's happened in the past year, it's clear that the ongoing global pandemic has affected every aspect of our business, driving the need for seamless execution, as well as opening new doors and accelerating greater opportunities. In fact, the pandemic has flipped the entire healthcare ecosystem on its head. By leveraging our core a competency, Fluidigm is fast emerging is one of the most unique and disruptive forces in life science technologies. We now span the spectrum from discovery to diagnostics, the latter of which is opening massive new markets for us to pursue. Diagnostics and healthcare decision making are ripe for transformation. Our pioneering technologies will help to propel this paradigm shift as our franchises rapidly evolve into diagnostic and healthcare decision making platforms of choice for laboratories around the world that are working to address the most pressing problems in infectious disease, immunology and oncology. Regarding our fourth quarter, I am so proud of Fluidigm and team for delivering financial results that were the highest in the company's history. Relentlessly focusing on employee safety and addressing our customers urgent COVID related needs. Our team's actions reflect our shared values, and an ethos we call stepping up, including a commitment and a passion to rapidly deploy our technology to combat the pandemic of today, while accelerating our journey into new diagnostic categories and broader healthcare decision making. We expect 2021 to be an incredibly exciting year in terms of new accounts to acquire, new markets to penetrate, new products and capabilities to deliver new insights and new partnerships to improve channel power, customer adoption and overall utilization of our platforms.

[Vikram Jog:]

Thanks, Chris, and good afternoon, everyone. Before turning to the financial results, I want to inform everyone that we have posted supplemental financial information in addition to our investor presentation on our investor websites. I will begin by providing revenue highlights and follow up with additional color on each of our franchises and region. I will then discuss our operating results and end with 2021 guidance. We are very pleased with our strong performance in the fourth quarter and full year 2020. Our team remained resilient and resourceful, opening up new opportunities in diagnostics and expanding utilization of our Mass Cytometry technology in infectious diseases, using the same tools that are being used by our customers to gain insights in cancer, and immunology. Total revenue was $44.6 million in Q4 2020, an increase of 38% compared to Q4 2019. As Chris noted, Q4 2020 revenue broke last year's record -- and sorry broke last quarter's record and is now the highest quarterly revenue ever achieved by Fluidigm. During the fourth quarter, product and service revenue of $40.5 million grew 26% compared to Q4 2019. Microfluidics diagnostics revenue comprising both consumables and instruments contributed over $9 million driving growth in our overall product and service revenue. Changes in foreign exchange rates had an approximately two percentage point positive impact on both total and product and service revenue growth. Microfluidics product and service revenue of $21 million increased 98% year-over-year, primarily driven by diagnostics revenues, both consumables and instruments. We sold 1.25 million COVID-19 tests in the quarter, up from the 795,000 tests that we reported in the third quarter. ASP was below last quarter, but still within our range of $5 to $20 per test. And similar to last quarter, majorities of test sold were to universities. At year end approximately 30 instrument systems were generating patient results. We now have a base of instruments generating results at commercial labs to drive our near-term diagnostics initiatives with partners. Mass Cytometry product and service revenue of $19.5 million in the fourth quarter was 9% lower than the prior year quarter, mainly due to low instrument revenue offset by higher consumables revenue. We saw another quarter of sequential revenue growth for both instruments and consumables as customers placed instrument orders that have been delayed from earlier in the year. We also benefited from year end seasonality in the fourth quarter. Future customer ordering activity remains dependent on any impact from COVID restrictions and the pace at which we build our sales funnel. Looking at our fourth quarter revenue compared to the prior year period from a regional perspective, the Americas revenue grew 87% to $22.1 million, including $4.1 million of development grants and license revenue. Product and service revenue increased to 57% to $18 million driven by higher Microfluidics diagnostics revenue. The majority of our Microfluidics diagnostic sales this quarter were in the US. EMEA revenue increased by 24% to $14.3 million. This increase was driven by Microfluidics and Mass Cytometry consumables offset by lower Mass Cytometry instrument revenues. Microfluidics revenue was driven by diagnostics, instruments and consumable sales, as well as research demand. Asia Pacific revenue decreased 10% to $8.2 million driven by lower Microfluidics and Mass Cytometry instruments sales, offset by Mass Cytometry consumables and service revenue. To round out my commentary on the regions, in the fourth quarter, changes in foreign exchange rates had a six percentage point positive impact on EMEA revenue growth. As I noted earlier, we reported development grant and licensed revenue of $4.1 million in Q4. This included $2.7 million of development revenue associated with an OEM supply and development agreement with the customer and $1.4 million of revenue related to a research and development grant. Moving now to our operating performance, let me start by saying that 2020 was an extraordinary year for Fluidigm. Despite all the challenges that were brought on by the pandemic, GAAP operating loss for the full year 2020 of $51 million showed a modest improvement from the $51.8 million of operating loss for the same period last year. Non-GAAP operating loss showed a more significant improvement of nearly $4 million. For the full year 2020, non-GAAP operating loss was $20.4 million, compared to $24.1 million for the full year 2019. We drove this improvement by increasing product and service revenue in the full year basis and accessing alternative revenue sources to fund investments for long-term growth, including NRE and grant and license revenue of $15.6 million. We will continue to look for similar sources of revenue in 2020. The remainder of my comments and operations will focus on non-GAAP measures. Please note that the reconciliation tables between our GAAP and non-GAAP measures are provided at the end of our earnings press release that was issued earlier today. Non-GAAP product and service margin was 62.7% in the fourth quarter of 2020. Compared to 64.9% in the year ago period, and 68.3% in the third quarter of 2020. Non-GAAP product and service margin on a year-over-year basis was lower, primarily due to reserves for excess and obsolete inventory and lower pricing for Mass Cytometry instruments partially offset by a favorable product mix. Sequentially, product and service margin was lower due to higher service costs, inventory reserves and lower prices for Mass Cytometry instruments partially offset by higher utilization of Mass Cytometry instrument manufacturing capacity. Non-GAAP operating expenses were $38.3 million in the fourth quarter of 2020 compared to $22.9 million in the year ago period. When the pandemic hit in early 2020, we took immediate action to preserve our liquidity, including reductions in salaries and variable compensation. With sequential improvements in revenue in the second half of 2020, and increased confidence in our outlook; we restored employee salaries and short-term incentive compensation. The year-over-year increase in operating expenses is primarily driven by increased compensation costs, including variable compensation, higher facilities costs and higher litigation expenses. Moving on now to cash flow and the balance sheet, cash and cash equivalents, short-term investments and restricted cash at the end of the fourth quarter of 2020 total $69.5 million compared to $73.4 million at the end of the third quarter, and $60.7 million at the end of 2019. Operating cash burn was $8.1 million during the quarter and $19.8 million for the full year, a $15.4 million improvement compared to 2019. Accounts Receivable day sales outstanding increase to 54 days compared to 40 days at the end of the third quarter. Investing cash flow was a positive $3.6 million for the quarter and $7.6 million for the full year, excluding sales and maturities of investments. Investing cash flows included $14.3 million and $25.4 million of proceeds from our RADx grant during the quarter and full year respectively. Capital expenditures were $10.7 million in the quarter and $12.7 million for the full year, compared to $2.5 million in 2019. The year-over-year increase in capital expenditures was primarily related to the expansion of the IFC manufacturing facility, which is being funded by the RADx grant. At year end, the borrowing base under asset base revolving credit facility was $15 million, none of which was utilized. And finally onto guidance; in 2021, we will be focused on executing on our vision 2025 strategic plan through innovation, beachhead expansion, partnerships and increased menu. The COVID-19 pandemic is still ongoing, and although we expect it to dissipate as vaccinations proliferate around the globe, the timing and pace of the recovery remain uncertain. Reallocations of research budgets to COVID related projects that started in 2020 are still in place as we entered 2021. Our expectations for this year are therefore tempered by these uncertainties. With this backdrop for the full year 2021, total product and service revenue is projected to be approximately $140 million to $150 million, or approximately 14% to 22% higher year-over-year. Other revenue is projected to be approximately $4 million to $5 million. Non-GAAP net loss is projected to be between $17 million and $21 million. We expect non-GAAP product and service margin in 2021 to be close to or slightly above full year 2020 levels. At the franchise level, Mass Cytometry revenue is expected to grow year-over-year at or below the low end for our total product and service revenue growth range. Growth is expected to be primarily driven by consumables and service revenue. Overall, Microfluidics revenue is expected to grow at or above the higher end of that range. And year-over-year growth in Microfluidics revenue is expected to be primarily driven by diagnostic testing revenue. Q1 product and service revenue is projected to be approximately $29 million to $31 million reflecting 20% to 29% growth year-over-year. Mass Cytometry revenue is projected to be approximately 13% to 20% below the prior year quarter, due to COVID related delays in instrument orders in APAC, and Canada. Microfluidics revenue is projected to be approximately 85% to 95% above the prior year quarter, primarily driven by diagnostic testing demands. Other revenue is projected to be approximately $1 million to $2 million in the quarter. And with that, I will open up the line for questions.

[Operator:]

Our first question comes from Sung Ji Nam with BTIG.

[SungNam:]

Hi, thanks for taking the question. How are you? Maybe just a clarification on COVID testing in the quarter. I think you guys' exited last quarter with over 43 systems that were enabled for COVID testing. And you ended the year with 30. Could you kind of talk about the discrepancy there? Is it just re-categorization? And then also, I am curious, I think maybe you talked about, I could be wrong of launching or submitting for EUA a combo assay for COVID testing with flu A, flu B, RSC, just wondering if there's many changes in terms of that plan?

[ChrisLinthwaite:]

Thank you for the question.

[VikramJog:]

May be I can take the first question.

[ChrisLinthwaite:]

Perfect. That's exactly I was going to propose. You take the first; I'll take the second.

[VikramJog:]

Yes, Sung Ji, at the end of the third quarter, we had about eight to nine systems that were actually generating patient results. And so the higher number that you are correctly recollecting was the number of systems that were actually sold into diagnostics testing. But as we had, I believe, talked about the last time and then subsequently, there is a process between the time and instrument is placed at a testing lab, until when it actually starts generating patient results. And the relevant metric is the number of instruments that are actually generating results. And that number has, in fact, grown from that 8 to 9 to 30, at the end of Q4.

[VikramJog:]

And then I'll kind of tackle the second part, if you want to ask any clarifying either one of those points, Sung Ji. So with regards to the EUA on a combo essay, I think yes you will appreciate the COVID environment is extremely dynamic. So we have actually spent a lot of time prioritizing expanding our menu through things like the CE-IVD submission, which we were successful in achieving just in the back half of the quarter or early part of the year in the first quarter. We've also been looking at expanding claims, so we actually shifted more towards asymptomatic, so working on screening claims and at home collection, which are areas that are pretty important to our strategic roadmap. And no way whatsoever is that a reflection on the interest in a combo asset. But we really looked at what we thought the commercial attractiveness for the near term was going to be for that product, and then de-prioritize that for the near term on our roadmap. And we have other things in the works, which we'll come on to perhaps later, as far as menu expansion in the near term that we feel will have a much higher impact on the urgent needs of the market at this moment.

[SungNam:]

Okay, got it, that makes sense. And then just on the Microfluidics visit outside of COVID testing, would you be able to comment, it sounds like there's a lot of partnerships, potential new product launches coming up. Anything you guys can comment on at this point, in terms of potential milestones that we can anticipate over the next 12 to 18 months?

[ChrisLinthwaite:]

I mean, the shortest answer is I think what was important for us was to present the vision 2025. So you can see really where we're headed. And now as you see these announcements come out, which we do have many plans this year; you can drop them in as context. So I don't think there'll be a number in that time period used to mentioned including partnerships that are outside of the diagnostics, or sorry, outside of COVID related partnerships for the Microfluidics platform.

[SungNam:]

Okay, got you. And then lastly for me, congratulations on the TLT Technology partnership. I was curious are they largely replacing what they were using flow Cytometry for some of these applications? Or are these kinds of new applications that they have been validating and developing more recently?

[ChrisLinthwaite:]

You're right, your instinct, it's a combination of both. So some of it represents flow Cytometry business that they think will be better suited on Mass Cytometry, in addition to some new unique capabilities that our Mass Cytometry can provide that flow Cytometry does not. It actually comes back to the theme we've been discussing around plexity, and the power of getting that answer in a single experiment. And our ability to build larger and larger panels and run them all on a single experiment. So as you will appreciate the challenges of fluorescence based technology. I think it's struggling to scale to the needs of the future. And this is a great, I think, a great example of an organization that evaluated both and has moved towards Mass Cytometry.

[Operator:]

Our next question comes from Dan Brennan with UBS.

[DanBrennan:]

Great, thanks for the questions, guys. So I guess first question, just digging into COVID a bit. So Q4 results were definitely light on what we expected. Chris just comment, so comment a little bit about the traction that you saw, how it manifested versus what you expected? And then I'd be interested to get specifically what's baked in for 1Q and for 2021 for COVID?

[ChrisLinthwaite:]

Okay, Vikram probably you take the second part of the question. And I'll address the first. Dan, I can only say that we were extremely pleased with the performance in the fourth quarter, including the performance in COVID testing. In six months time period, we went from essentially, the first emergency use authorization in August for symptomatic claims alone, with essentially no install base to delivering more than 2 million tests to the market. So I recognize that others may have had aspirations, even more aggressive. But we were we knew, and we talked about it, I think, in our call colored commentary, as best we could, that we were really new into this. And we were only at that point, I think, maybe 90 or 120 days into that call period. And so we were still in the learning process of what it takes for labs to stand up to validate for them to acquire their own samples and their own business model of variability. But I think our experiences in the fourth quarter have actually been quite instrumental and insightful and influencing and shaping our 2021 priorities. So there are a number of things that we can do, we believe, to drive more success into the existing install base, as well as expand our install base and consumable stream. And a couple of those are about getting more access to saliva based approaches, and specifically Fluidigm saliva based approach in the marketplace. And that's why digital partnerships and partnerships in general are really important to that, and to feed more business into our core partner labs. In addition, we're going to continue to make improvements on innovation. So we've talked about the next generation platform and IFC coming out later this year. And then the third is expanding our regulatory claims. So it's easier or it is so we can market our technology across more use cases, to address many of these emerging market segments across the economy. Vikram, I'll toss to you in the second part.

[VikramJog:]

Yes, sure. Hi, Dan. And our Microfluidics business is going to grow between 85% and 95% from Q1 of 2020, to Q1 of 2021. And most if not all of that growth is due to Covid related testing revenues. Just if your question relates to how it compares to Q4, I would say generally speaking, it's relatively in line with the Q4 revenues.

[DanBrennan:]

And in terms of the 2021 guidance, Vikram for COVID?

[VikramJog:]

In terms of q1, I thought your question was for Q1.

[DanBrennan:]

Right, yes, no, it was both, it was 1Q and 2021.

[VikramJog:]

Yes, for 2021 I think similarly, the Microfluidics growth is going to be at or above the high end of the overall growth guidance. And all of that is going to be related to COVID testing revenue.

[DanBrennan:]

So basically

[VikramJog:]

Sorry, Dan, you are breaking up.

[DanBrennan:]

Sorry, the 22% so just take 22% of your 2020 Microfluidics and that's COVID number I guess for 2021. Okay, so maybe second question is so Chris you were obviously extremely bullish on the Vision 25 sending some pretty aggressive growth targets out there over the next five years. I guess the first question is 2021 the Mass Cytometry, Mass Cytometry for

[ChrisLinthwaite:]

Maybe we should take the next question in the queue and let Dan come back, our next person in the queue.

[Operator:]

Our next question comes from Steven Mah with Piper Sandler.

[StevenMah:]

Okay, thanks. And thanks, guys. Thanks for taking the questions. I'll ask you guys' first non Covid question. So on these new digital capabilities you mentioned for imaging Mass Cytometry, can you dig a little bit deeper and give us a little bit more color on what that all about? I know you mentioned data management, but is it something that's going to help customers like integrates and archive their images? Or is it a remote pathology or analysis? Just a little bit more color, please? And then could you give us a sense on how you'll monetize that or you can offer it for free for more customer satisfaction purposes?

[ChrisLinthwaite:]

I'll take that one. Steve, good to hear your voice. Thanks for the question. You kind of landscaped a number of areas, and there's probably a few more in addition. So there are a lot of things that we can do to prepare for the healthcare decision making in the future. And some of those relate to the pre analytical workflows, and then the post analytical analysis. Other things are, as you described, kind of as all of us are moving now closer to pathology, is adapting the technology for the needs of the pathologists, both clinical and anatomical pathologists and the way they analyze data. There's other things around connectivity of our platforms and storage of the data files, things you just identified also, and even things such as remote monitoring, and an uptime on the instrument platforms. So monetization for us could have, will have or could have multiple facets to it. So there's additional software plug-ins, there is some of the things we will do that will drive value will be probably things we push to upgrade packages in the future. And then of course, the final one, which would be kind of data creation and algorithm development, which is an open area for further discussion. So at this time, I won't speculate, but I think that's -- the data generation is one of the -- and the insights is one of the most valuable things, but for the near term, the vast majority of our revenue will be generated from utilization of the instrument platforms.

[StevenMah:]

Okay, great. Thanks. And then one question I know there you guys had talked before there was the COVID-19 related research tailwind, especially using some of your panels like Maxpar immune, have you seen utilization trends change given the vaccine news? Or has been there been a drop off in COVID-19 related research?

[ChrisLinthwaite:]

I don't perceive that there's been a drop off in COVID related research. And kind of one example would be the Stanford announcement we just had yesterday, although that's not strictly COVID. But it's the spin out or potentially, one of the hypotheses that it's COVID related. I think the types of questions are going to evolve, and there's going to be a very durable need for immune analysis for immune system or immune profiling and phenotyping, for some of the reasons you just described. So whatever exposure to various variants matter, what's the longitudinal impact on the population for different strains, what's the impact of the vaccine, having supporting panels for things such as vaccine developers for the future, so we actually think there's probably a pretty rich corridor of need here. And I don't perceive although I can't analytically qualitatively or quantitatively describe what COVID specific research will be, but we perceive it will be quite strong. And we've seen it in the retrospective of our publications that are coming out about the shift towards more and more infectious disease related publication.

[StevenMah:]

Okay, got it. Thanks. And one last question. So on your COVID-19 ASP, it's still like, looks like it's a high mix of universities. Do you think that mix will evolve over time? And I know you guys are doing surge testing as well, maybe just a little bit of color on the ASP mix and COVID-19.

[ChrisLinthwaite:]

I'll ask Vikram to jump in also, but I think we see a wide range on the commercial oriented labs. The ASP tends to be higher in the academic settings where they have a captive audience. So meaning they have a student population, they need tests; they generally are willing to put forward relatively large, fixed price contracts. And in return, they tend to have ASPs that reflect that commitment to us and larger purchase orders. So we would imagine that over time, the more we increase commercial scale business through the platform and volume through that that the ASPs will probably increase over the measurement period. But it's always a balance of mix between the two. Vikram any other commentary you want to add?

[VikramJog:]

No, I think that's exactly right. It's all a balance of mix; we do have a base of instruments that have been placed at both universities and commercial labs. But the results so far, as you have correctly noted have been skewed in favor of university testing. And always the prices remain on the low end of the fairly wide range of ASPs. And we do expect over time for that mix to be more balanced than it has been in Q3 and Q4.

[ChrisLinthwaite:]

I guess I just like to add is that I mean, it's important, as we've talked about in the past that we feel that we have very attractive margin profile across that spectrum. Clearly getting better, ASP is better. But even on the lower end, it's a very attractive recurring our gross margin for the company that gives us room to reinvest. And we're really looking at about establishing a toehold and beachheads. And finally, it's about also positioning ourselves against antigen testing and alternative testing approaches. And I think there's the industry hasn't necessarily benefited from the fact that there's a perception that PCR testing has to be very high. And in fact, you can get access to gold standard based PCR testing on a Fluidigm platform at a very attractive price.

[Operator:]

Our next question comes from Dan Brennan with UBS.

[DanBrennan:]

Hey, guys, sorry about that. I took off my Bluetooth. I don't know what happened. I guess could you help me Chris and Vikram because I mean the stock maybe because of inflated estimates for COVID. I mean, the stocks off in the aftermarket, say 20%, your message sounds extremely constructive, given the 2025 plan and the new product and the trajectory of business, which is well above what I think the street is forecasting. So I guess I'm just hoping to get a few things. So first off, just could you just give the dollar COVID number right now, that's implied in 2021? I know you gave some color before I just want it back in trying to make sure I understand what the base number is for products and services, ex-COVID implied in your guidance for 2021.

[ChrisLinthwaite:]

I'll have maybe Vikram comment on that in just a second. I just - I kind of want to go with the first part of the setup, Dan, and welcome back by the way, which is, I feel like part of the challenge here is because I think we're significantly undervalued by every metric of shareholder or after a sudden general assessment of peers and the performance. I think what's been missing is our ability to communicate a longer-term vision. And I think putting a long-term vision with putting stakes in the ground around recurring revenue streams around the growth performance of both portfolios, and kind of shifting the narrative beyond COVID test 1, 2, 3, or the quarter in question has been one of the things that's been holding us back, because if you step back and look at the body that work, we're heading completely in the right direction of increasing shareholder value. With that context, Vikram if you like to comment on the COVID Specific.

[VikramJog:]

Yes, sure. So there's a lot of uncertainty from quarter-over-quarter. So as I said that our expectations are tempered. So take that from that perspective, in 2020, we had roughly over $20 million round numbers, about $22 million of diagnostics testing revenue in Microfluidics. And so that number if you do the math, and I'll do it for you, in terms of the growth rate in Microfluidics that we alluded to in our guidance. Let's say all of that comes in from diagnostics. So that number would go from the $22 million numbers to roughly between, say $32 million to $38 million in 2021.

[DanBrennan:]

Got it. Okay. And then maybe just on Mass Cytometry for the guidance, I know in 1Q reflects, I think a decline, you guys commented on some delays in Canada and Asia. And I guess, the full year guide, you talked about what below the 14%, which would still be below 2019. So maybe just give us a bridge about what you're seeing and expecting in 2021. Obviously, you're citing some COVID uncertainties, and the bullishness going forward beyond that. I know you've talked a lot about partnerships and new products and disruptive things. So can you just give us a sense of when either a, when we're going to see some of this; b, how much conservatism maybe you're baking in for 2021 because while there's still uncertainty out there, presumably, I get from other peers where I think we're seeing some better outlooks in terms of tracks and some recovery.

[ChrisLinthwaite:]

Yes, Thanks. I appreciate the follow up on this Dan. I'll ask Vikram to join into. I think there's a lot of ways to address this. I mean, one of the things we're trying to do is create greater transparency. And this is kind of his feedback from shareholders and analysts like you over the past year. And part of that maybe there's a departure between our outlook on COVID, as being maybe a little bit more in this case, that it's going to be more durable. The impact, and so are the Mass Cytometry, we get down to the granularity to the best of our ability at this point, recurring revenue streams in terms of services and consumables should be continued to grow and grow well off the 2019 levels. It's the analytical instrument placements cycle through the course of the year that has the greatest uncertainty for us. And I think the COVID turmoil hasn't really fundamentally changed that in this period. So as budgets are still being finalized, and money's being reallocated to testing needs, et cetera, et cetera. But utilization continues to increase. So I think that's probably the biggest driver of uncertainty in the near-term period. But we don't see any reason why there's a fundamental challenge to our thesis over a multiyear period. And Vikram, if anything else you'd like to add?

[VikramJog:]

Sorry, I thought Dan had something to say.

[DanBrennan:]

No, it's okay, you can go.

[VikramJog:]

Yes, no. I just want to echo what Chris said, we are expecting strong growth in consumables and service. So we expect the trend that was created in the second half of Q4 of 2020 to continue into 2021. We do have conservatism. And you can see from the Q1 guide, why, on instruments, the quarter-over-quarter visibility due to local reactions from governments on various issues related to permits, and so on and so forth, make that somewhat necessary for us to be cautious. So but we are very optimistic on the consumables and service side in terms of growth in 2021.

[DanBrennan:]

And you hold -- are you are you planning to be hosting investor day sounds like Chris from the language that you've got a lot of things ready to go here. We've got competition on the spatial side continuing to ramp up as well. So I'm just wondering when you think we'll get some visibility on what the new product portfolio particularly in order

[ChrisLinthwaite:]

I think we completely agree with you, Dan, that an Investor Day or in this current digital medium, maybe some series of events that can kind of lay out more granularity, I think we wanted to take this one step at a time, which is start with the vision 2025, the overlay for the how we see the year playing out and how the individual portfolios are lining up, and then what we want to accomplish over the next five year period. And as you said, there's a lot of value to them doing a click down to talking about each one of these. So we'll get back to you on the specifics, but it's certainly something that's top of mind right now. Thank you. I see no further questions. At this time, I would like to turn it back over to Chris Linthwaite for closing remarks.

[Chris Linthwaite:]

Thank you, I just want to again thank everyone for joining our call here to wrap up to Q4 and full year 2020 year end review. And just to summarize, I'm really focusing on innovation, establishing and mobilizing these beachheads to expand in new addressable markets. We're going to use partnerships quite aggressively throughout the year, and look for us to talk about more expanded menu and offerings on both of our platforms. Thank you very much.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.