• Total Revenue: $8.2 million in Q3 2024, a 2% increase from $8 million in Q3 2023.
• Core Revenue: $8.1 million, up 23% from $6.6 million in the prior year quarter.
• Cell Therapy Revenue: $6.5 million, a 39% year-over-year increase.
• Drug Discovery Revenue: $1.6 million, a 14% year-over-year decline.
• Instrument Revenue: $1.8 million, compared to $1.7 million in Q3 2023.
• Lease Revenue: $2.5 million, compared to $2.4 million in Q3 2023.
• Processing Assembly (P/A) Revenue: $3.4 million, up from $2.2 million in the prior year quarter.
• Gross Margin: 76% in Q3 2024, down from 90% in Q3 2023.
• Non-GAAP Adjusted Gross Margin: 85% in Q3 2024, compared to 88% in Q3 2023.
• Total Operating Expenses: $20.3 million, down from $21.2 million in Q3 2023.
• Cash and Cash Equivalents: $196.6 million at the end of Q3 2024, with no debt.
• Year-End Cash Guidance: Expected to end 2024 with $185 million in cash equivalents and investments.
• Core Revenue Growth Guidance: Increased to at least 5% growth compared to 2023.
• SPL Program Related Revenue Guidance: Approximately $6 million in 2024.

• Warning! GuruFocus has detected 6 Warning Signs with MXCT.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MaxCyte Inc (NASDAQ:MXCT) reported a total revenue of $8.2 million for the third quarter, exceeding internal expectations.
• The company signed a record number of six new strategic platform licenses (SPLs) in 2024, indicating strong demand for its platform.
• Processing Assembly (PA) revenue grew by 54% year over year, driven by broad-based customer development.
• MaxCyte Inc (NASDAQ:MXCT) increased its core revenue growth expectations for 2024, reflecting confidence in underlying business trends.
• The company maintains a healthy cash position with $196.6 million in cash and cash equivalents and no debt.

Negative Points

• Instrument revenue was impacted by continued customer caution on capital equipment spending.
• Gross margin declined to 76% from 90% in the previous year due to a one-time inventory write-off.
• Revenue from drug discovery customers declined by 14% year over year.
• SPL program-related revenue was immaterial compared to the previous year, indicating variability in milestone payments.
• The funding environment remains largely unchanged, with customers operating with a cautious mindset.

Q & A Highlights

Q: What drove the strong performance in Processing Assembly (PA) revenue, and how does the funding environment impact future expectations? A: Douglas Swirsky, Chief Financial Officer, explained that PA revenue has been strong all year, indicating some market recovery. The maturity of some programs is helping drive PA sales. The company raised guidance for 2024 due to better-than-expected performance but is not yet guiding for 2025. They feel confident about their position going into the fourth quarter.

Q: Can you elaborate on the inventory write-down and future investment plans? A: Maher Masoud, President and CEO, stated that the write-down was related to a discontinued product redesign. The company has hired a new head of engineering to ensure efficient product development. They are focusing on high-impact customer workflows and revenue potential, aiming to prevent similar write-offs in the future.

Q: How does the revenue recognition process work for Vertex's Cash Chevy, and what should we expect in terms of revenue? A: Douglas Swirsky clarified that revenue recognition is based on patient dosing and includes some legacy revenue. The process involves interfacing with partners to ensure accurate revenue recognition. The amount recognized is not solely from Cash Chevy royalties, but the majority is related to it.

Q: What are the trends in cell type or disease area among prospective SPL customers? A: Maher Masoud noted an increasing trend towards autoimmune diseases, with more companies targeting this area. This shift indicates the health of the cell and gene therapy space, expanding beyond oncology. The complexity of therapies is also increasing, requiring more persistence and durability.

Q: How does the duration of signing SPL agreements vary with company size, and what is the feedback on the VLX platform? A: Maher Masoud explained that the duration is not significantly affected by company size, typically taking 12 to 18 months. The focus is on scientific support and partnership. Regarding the VLX platform, they are learning from early adopters and assessing how to best capture future revenue.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.