Standard BioTools Inc.
Q3 2017 Earnings Call Transcript

Published: 4 Nov 2017

[Operator:]

Good day, ladies and gentlemen, and welcome to the Fluidigm Third Quarter 2017 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Ana Petrovic. Please go ahead.

[Ana Petrovic:]

Thank you. Good afternoon, everyone. Welcome to the Fluidigm Third Quarter 2017 Earnings Conference Call. At the close of the market today, Fluidigm released the financial results for the third quarter ended September 30, 2017. During this call, we will review our results and provide commentary on recent commercial activity, market trends and our strategic business initiatives. Presenting for Fluidigm today will be Chris Linthwaite, our President and Chief Executive Officer; and Vikram Jog, our Chief Financial Officer. During the call and subsequent Q&A session, we will be making 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 of these forward-looking statements include statements regarding our business prospects and growth; the implementation and anticipated benefits of strategic initiatives and partnerships; opportunities, demand, sales pipeline and support for our other product lines; benefits of new product introductions; cash management and other financial plans; and projected financial results for the fourth quarter of 2017. These statements are subject to substantial risks and uncertainties that may cause actual events or results to differ materially from current expectations. Information on these risks and uncertainties and other information affecting our business and operating results is contained in our annual report, in our most recent Form 10-Q for the quarter ended June 30, 2017, and in our other filings with the SEC. The forward-looking statements in this call are based on the information currently available to us, and Fluidigm disclaims any obligation to update these forward-looking statements except as may be required by law. During the call, we will also present some financial information on a non-GAAP basis. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the company’s operating results as reported under U.S. GAAP. We encourage you to carefully consider our results under GAAP as well as our supplemental non-GAAP information and the reconciliation between these presentations. Reconciliations between GAAP and non-GAAP operating results are presented in a table accompanying our earnings release, which can be found in the Investors section of our website. I will now turn the call over to Chris, our President and CEO.

[Chris Linthwaite:]

Thank you, Ana. Good afternoon, everyone, and thank you for joining our third quarter 2017 earnings call. The recent quarter was one in which we are fostered innovation, partnered with customers and delivered on commitments. We continued to do what we said we’d do in terms of market and customer-centric strategies, implementing cost discipline and seeking new business model efficiencies. We posted revenue within guidance. More importantly, we saw customer excitement for the evolving technology and unique value propositions we are delivering, an increased in employee engagement as Fluidigm demonstrated progress in our turn and our drive to turn the business around. I’d like to begin by noting that on October 24, we delivered or reached a noteworthy milestone in the delivery of new breakthrough innovation to empower the global research community. Bringing Imaging Mass Cytometry to market has been a major step forward in positioning Fluidigm for a return to sustainable growth. Our Hyperion Imaging System is an expansion and broadening of our mass cytometry franchise and it joins our existing Helios suspension mass cytometry system in delivering a unique 1-2 combination of technologies in protein analysis. In Greek mythology, Hyperion was a titan who presided over the sun. Hyperion represented light, wisdom and watchfulness. Helios, son of Hyperion, means watcher from above. Both names suggest extraordinary vision and insight and speak to our aspirations for these systems as a company. The Hyperion Imaging System is further evidence of our commitment to innovation and to answering unmet needs in high-parameter analysis, particularly in oncology, immunology and cancer immunotherapy. We envision this imaging technology becoming central to breakthrough research in these fields with significant impact on the precision medicine approaches of the future. Hosting the launch of Imaging Mass Cytometry in Toronto last week was a great moment for Fluidigm and my most gratifying experience to date as CEO. The event included presentations from leading academic, translational and pharma research labs. It is a rare privilege, not only in life sciences, but in any industry to play a role in delivering a technological advancement as potentially significant as this platform. We believe Hyperion could play an important role in revolutionizing disease research and bringing about the development of better diagnostics and more effective therapies. In fact, across our business, we are proud of the progress we’ve made in recent months and increasingly encouraged about the strategic direction we’ve taken. We are innovating but we have also a steady hand on the fundamentals. We are maintaining strong discipline around internal efficiency and cost and are determined to deliver improving financial results. There is a renewed spirit and vigor at Fluidigm as we drive our strategy forward, and we’re confident about the future. I’m going to provide a brief overview of our financial results for the quarter, offer comments and context around markets and strategies and conclude with top line for 4Q or Q4 guidance. Then I’ll turn the call over to our CFO, Vikram Jog, for a more detailed financial break out. For the third quarter, total revenue was $24.7 million, an increase of 12% from the third quarter of 2016. Instrument revenue increased 15% to $10.5 million, primarily due to increased revenue from mass cytometry instruments, partially offset by decreased revenue from genomics instruments. Consumables revenue increased 14% to $10.1 million, with growth across both mass cytometry reagents and high-throughput genomics products, partially offset by decreased revenue from single-cell genomics products. Service revenue of $4.1 million was generally in line with the year-ago period. Overall during the quarter, we saw more growth for mass cytometry than genomics. From a geographic standpoint, Europe and Asia posted significant growth, but we fell short of our expectations in the U.S. market. In the U.S., competitive headwinds in single-cell and decreased revenue from genomics instruments had a disproportionate impact on our performance in comparison to other regions. In Europe, our performance reflects new commercial leadership hitting its stride, executing on funnel management with notable strong end-market demand in Germany, Eastern Europe and the U.K. Growth in Asia was driven by sales in China across both mass cytometry and genomics. In China, we benefited from execution of our Ascendas Genomics partnership announced in quarter two to develop and commercialize molecular diagnostic systems and assays using BioMark HD and Juno systems. In Japan, I’m impressed by the strong commercial execution under the new leadership that took helm in the first half of the year. The new team is unlocking the underlying market potential in that country, particularly in mass cytometry that we knew was there. And I’m confident we’ll be speaking more about this team in the coming quarters as they gain momentum. Mass cytometry product revenue increased more than 100% to $10.3 million from $5.1 million in the prior year due to increased revenue from instruments and, to a lesser extent, increased revenue from consumables. We continue to focus on a targeted instrument placement strategy in key customer segments

[Vikram Jog:]

Thanks, Chris, and good afternoon. Total revenue of $24.7 million in the third quarter increased 12% from $22.2 million in the year ago period and was up 3% from $23.9 million in the second quarter of 2017. Instrument revenue of $10.5 million in the third quarter increased 15% from $9.2 million in the year ago period due to increased mass cytometry revenue, partially offset by lower genomics revenue. Consumables revenue of $10.1 million in the third quarter increased 14% from $8.8 million in the year ago period, primarily due to increased sales from mass cytometry and high-throughput genomics products, and partially offset by lower single-cell genomics products. In the third quarter, our annualized consumables pull-through per active system were as follows

[Operator:]

Q - A -

[Ana Petrovic:]

We’d like to thank everyone for attending our call. A replay of this call will be available on the Investors section of our website. This concludes the call, and we look forward to the next update following the close of the fourth quarter of 2017. Good afternoon, everyone.

[Operator:]

This concludes today’s conference call. You may now disconnect.