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| Statement |
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| First, our Hyperion XTi imager has the highest throughput and data quality in the spatial proteomics space |
| We are pleased that the integration process is well underway, and we are advancing towards growing our combined business with vast upside potential in attractive markets |
| Now as we sit together on this conference call, our two companies have come together to create a leading multi-omic platform to drive improved returns for all of our stakeholders |
| As we have highlighted previously, SomaLogic has carefully cultivated strong customer relationships and invested in broadening our commercial reach, which today services many of the top 20 biopharma companies and have more than doubled our footprint of global authorized sites in the past 12 months |
| We are extremely excited about the progress we have made and the value we have collectively generated in 2023, culminating with the groundbreaking merger of our two companies |
| With our enhanced balance sheet and operating cash flow improving, this will enable us to repurchase opportunistically and offset future dilution from possible equity issuances arising from convertible debt and other instruments in our existing cap structure |
| We continue to believe, by the end of 2026, our combined business will deliver approximately $300 million in revenue, with non-GAAP gross margins in the mid-60s, positive adjusted EBITDA margin and a cash position capable of supporting our continued growth |
| To this end, we delivered meaningful progress in 2023 including 900 basis points of non-GAAP gross margin expansion at $20 million and 17% reduction in non-GAAP operating expenses and over $475 million and 53% improvement in operating cash use |
| On [indiscernible] create a scaled platform that profitably can deliver breakthrough enabling life science technologies and services for our customers |
| While we expect our cash burn over the next few quarters to be elevated due to transaction, integration and restructuring activities, we're well positioned to both fund these nonrecurring activities and support the combined business to cash flow breakeven |
| We remain enthusiastic about the value we expect to generate with the combined cost structure, while leveraging the scale and reach of our diversified portfolio |
| For the full year in 2023, we reduced non-GAAP operating expenses by more than $20 million or 17%, and this is reflected primarily of the cost rationalization programs we've executed over the past year, a testament to strong execution of our SBS operating discipline and lean transformation |
| We are careful but confident that when executed well, this strategy will not only diversify collective revenue and empower our customers with truly differentiated technologies, but will also fuel growth and gross margin at scale |
| At the same time, our gross margin should continue to benefit from our SBS lean approach and price realization |
| Against a challenging macroeconomic environment, I'm pleased to report the return of our core business to growth in 2023 with total revenue of $106 million, representing 9% growth over 2022 with instruments revenue up more than 40% year-over-year, led by placements of our new Hyperion XTi imaging system |
| We see growth in instrument revenue as a leading indicator to drive future recurring consumables and services revenue across an expanding installed customer base |
| In addition, the SomaLogic team delivered solid revenue growth in 2023 with $86 million in total revenue and over 20% core revenue growth when excluding certain nonrecurring royalty revenues in 2022 |
| And for the full year, our non-GAAP gross margin improved by about 900 basis points to just over 60% |
| Our non-GAAP gross margin for the fourth quarter expanded by 630 basis points to over 59% |
| Our total proteomics revenue was up 21% in the fourth quarter and 22% for the full year, led by continued traction of Hyperion XTi, which we launched in the second quarter |
| In 2023, we delivered revenue ahead of guidance and returned a declining business to growth, all while navigating a challenging macroeconomic environment |
| Still, we remain confident in our growing pipeline of opportunities providing a good setup for an expanded growth profile into 2025 and beyond |
| Third, continued traction on revenue growth |
| We believe this is a leading indicator as new instrument sales generally lead to future growth of recurring sales of consumables and field-based services with attractive margins |
| As I mentioned earlier, with operational execution and the successful close of our merger with SomaLogic, we have established a strong foundation for a leadership position in the life science tools space |
| With a significantly reduced genomic spend and focus on commercial approach, we have expanded our installed base with our major OEM partner, while targeting additional OEMs and high-volume key accounts to help return the segment to grow and enhance the Genomics segment's contribution margin |
| With the addition of the Somascan platform and expansion of key customer accounts, we have an important differentiated solution for biopharma enabling the broadest coverage of the proteomic for discovery of important biomarkers and compelling new drug targets |
| The system's market-leading data quality and throughput continues to be very well received by existing and prospective customers as a solution and the emerging field of spatial proteomics for translational research |
| This should continue to drive broader customer mix and higher-margin consumable revenue |
| In 2023, we returned our legacy Standard BioTools proteomics business to grow an increase of over 20% year-over-year with the launch of our Hyperion XTi imaging system as a major contributor to that growth |
| Statement |
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| Total genomics revenue was down 13% in the fourth quarter and 7% for the full year |
| This is against the backdrop of both internal merger integration priorities and continued uncertainties from macroeconomic headwinds that we see continuing to play across the industry |
| And at the same time, we're navigating continued macroeconomic headwinds facing our entire industry |
| We continue to face residual headwinds related to legacy service and warrant-related costs, product mix and capacity utilization |
| While our genomics business remains a strategic asset for us, it's also a highly competitive market with increasing price competition and sensitivity as next-gen sequencing costs have greatly reduced over the past several years |
| While it may have made sense in the market flushed with cash, when capital dried up as it usually does, the underfunded and/or dose without a secure path profitability experience, existential risk and deeply discounted values |
| Growth at all cost period while expanding market share and customer segment was pursued at the expense of business fundamentals |
| For the full year, we reduced operating cash use by $47 million or about 53% |
| As we mentioned, our consumables growth in genomics was impacted by larger consumables orders in 2022 associated with the launch of our first OEM partnership |
| We're about 86% of revenue in the fourth quarter, down from about 94% of revenue in the fourth quarter of 2022 |
| As I stated before, without margin, there's no mission and bringing together important solutions under one roof is crucial in the heavily fragmented and unprofitable life science tools space |
| 2023 was our first full year of operations as Standard BioTools, and I could not be more proud of our team and this accomplishment |
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