• Revenue: $16.8 million for Q3 2024, up 17% from the prior year period.
• Handheld Device Revenue: $14 million for Q3 2024, up 19% from $11.7 million in Q3 2023.
• Desktop Product Revenue: $2.8 million for Q3 2024, up 8% from $2.5 million in Q3 2023.
• Recurring Revenue: $6.1 million, representing 36% of total revenues, up 70% from the prior year period.
• Gross Margin: 50% for Q3 2024, down from 55% in the prior year period.
• Adjusted Gross Margin: 55% for Q3 2024, compared to 57% in the prior year period.
• Net Loss: $29.3 million for Q3 2024, compared to $7.1 million in the prior year period.
• Adjusted EBITDA: Loss of $6.9 million for Q3 2024, compared to a loss of $5.7 million in the prior year period.
• Cash and Marketable Securities: $71.7 million at the end of Q3 2024.
• 2024 Revenue Guidance: Lowered to $56 million to $58 million, representing 11% to 15% growth.
• Operating Expenses: $38.5 million for Q3 2024, compared to $17 million in the prior year period.
• Workforce Reduction: 11% reduction, expected to save approximately $4.2 million annually.

• Warning! GuruFocus has detected 5 Warning Signs with MASS.

Release Date: November 12, 2024

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

Positive Points

• 908 Devices Inc (NASDAQ:MASS) reported a 17% increase in revenue for Q3 2024, reaching $16.8 million.
• The company successfully placed 178 handheld devices in Q3, contributing to a 20% core handheld growth when excluding certain factors.
• The acquisition of Redwave Technology is expected to bring operational efficiencies and expanded gross margins.
• The company is implementing structural adjustments, including moving manufacturing to lower-cost locations, which is expected to save $2.4 million annually starting in 2026.
• 908 Devices Inc (NASDAQ:MASS) has identified five key growth drivers, including increasing enterprise adoption of FTR handhelds and creating an upgrade cycle with the next generation of MX 908 handhelds.

Negative Points

• Financial results fell short of expectations due to delays in federal budget approval and international contract advancements.
• The company lowered its 2024 revenue guidance to $56-58 million, down from the previous range of $63-65 million.
• There is continued softness in the bioprocessing and life science instrumentation market, elongating sales cycles for desktop devices.
• An 11% workforce reduction was implemented to right-size efforts in the current market, indicating challenges in maintaining operational scale.
• Operating expenses increased significantly due to a $30.5 million non-cash goodwill impairment charge and costs associated with the Redwave acquisition.

Q & A Highlights

Q: Are there any structural or competitive issues in the handheld market beyond the agencies you're selling to, and how should we think about the desktop market recovery in the first half of 2025? A: Kevin Knopp, CEO, stated that the challenges are primarily due to budget uncertainties and not structural or competitive issues. The handheld market saw a positive 20% growth when excluding certain revenues, and the desktop market is expected to see sequential improvements driven by partnership initiatives.

Q: Is the organization rightsized for current times, and will it be equipped to capitalize on market recovery? A: Kevin Knopp, CEO, confirmed that the organization is rightsized, with recent workforce reductions across sales, marketing, and R&D. The company is leveraging a hybrid sales approach and partnerships to drive growth and believes it is well-resourced for future opportunities.

Q: How might a new administration impact handheld and desktop market priorities and spending? A: Kevin Knopp, CEO, noted that while elections can shift priorities, historical data shows consistent growth in defense spending. There could be positive impacts from potential budget process improvements and international investments, but no direct correlation to desktop market changes was identified.

Q: How will partnerships with hardware innovators drive desktop growth, and what are the expected contributions? A: Kevin Knopp, CEO, explained that partnerships in the cell and gene therapy space are expected to create long-term value and scale. Initial placements are anticipated to contribute to Q4 revenue, with the strategy seen as a key growth driver.

Q: What are the main drivers for the next-gen MX 908 instrument, and will it expand the market? A: Kevin Knopp, CEO, highlighted that the next-gen MX 908 aims to disrupt the market with improvements in size, weight, performance, and cost. It is expected to drive an upgrade cycle and expand market reach, supported by a broader product portfolio post-Redwave acquisition.

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