Singular Genomics Systems, Inc.
Q1 2023 Earnings Call Transcript

Published: 13 May 2023

[Operator:]

Greetings. Welcome to the Singular Genomics Systems, Incorporated First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Philip Taylor. You may begin.

[Philip Taylor:]

Thank you, operator. Presenting today are Singular Genomics' Founder and Chief Executive Officer, Drew Spaventa; and Chief Financial Officer, Dalen Meeter. Earlier today, Singular Genomics released financial results for the 3 months ended March 31, 2023. A copy of the press release is available on the company's website. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, May 9, 2023, only and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations and other information related to our financial and operating results, plans and strategies. Actual results may differ materially from those expressed or implied by these statements as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission, including our most recent Form 10-Q and 10-K filings and the Form 8-K filed with today's press release. Our SEC filings can be found on our website or the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. Please note that this conference call will be available for audio replay on our website, at investor.singulargenomics.com, in the Presentations and Events section. With that, I will turn the call over to CEO, Drew Spavanta.

[Drew Spaventa:]

Good afternoon, and welcome to Singular Genomics' First Quarter 2023 Earnings Call. It was another productive quarter, and we look forward to updating you on the progress made across the business. We will focus our update on the following 4 key areas

[Dalen Meeter:]

Thank you, Drew. I'll start by covering the Q1 2023 financials. Then I'll provide additional directional remarks on key metrics for the rest of 2023. Revenue for the first quarter of 2023 totaled $863,000, made up predominantly of the revenue recognized on an additional 3 instrument placements during the quarter. Operating expenses for the first quarter of 2023 totaled $25.4 million, compared to $22 million for the first quarter of 2022. These totals included noncash stock-based compensation expense of $3.1 million in Q1 2023 and $3.6 million in Q1 2022. The year-over-year increase in total operating expenses was driven primarily by scaling SG&A headcount to support our growth for the G4 launch. Net loss for the first quarter of 2023 was $23.6 million, or $0.33 per share, compared to $22 million, or $0.31 per share, in the first quarter of 2022. Our weighted-average share count for the first quarter used to calculate net loss per share was approximately 71.9 million. And cash, cash equivalents and short-term investments, excluding restricted cash, totaled $226.1 million. Turning to comments on 2023, the G4's value proposition is being validated through instrument placements and field discussions with our target customer market segments. Our team is supporting early G4 placements, installing new systems, training and supporting customers and working to drive consumable utilization. As expected, pull-through is in the early stages, and we anticipate learning more about early customer utilization patterns over time. As mentioned by Drew, we expect sales to be concentrated in the second half of the year, resulting from budget cycles and commercial releases of the F3 and Max Read kits. Regarding operating expenses, we are steadfast in our focused expense management. While we do expect '23 investment to modestly increase in areas directly related to the G4 success, we intend to manage existing resources to provide cash runway into the second half of 2025. Thank you, and back to Drew for closing remarks.

[Drew Spaventa:]

Thank you, Dalen. In closing, I'm proud of the progress our team has made during the quarter with our earliest customer placements. The G4 value proposition is resonating, and commercial interest is growing in our target markets. We are taking the right steps to build the foundational infrastructure to scale our operations over the course of the year. We have a strong product portfolio of system improvements, new kits and an innovation pipeline that positions us well for the future. Our team remains confident and committed to driving long-term value by executing on our product launch, prioritizing key activities and investments to ensure continued innovation, meticulously managing expenses and building a business with sound fundamentals and a path to profitability over time. Now let's open up to the questions. Operator?

[Operator:]

[Operator Instructions] Your first question is coming from Tom Stevens, at TD Cowen.

[Operator:]

Your next question is coming from John Sourbeer, at UBS.

[Operator:]

Your next question for today is coming from Michael Ryskin, at Bank of America.

[Operator:]

This concludes the question-and-answer session and conference call. You may disconnect your lines at this time. Thank you for your participation.