• Revenue: $18.8 million in Q3 2024, a 25% year-over-year decrease.
• Instrument Revenue: $5.7 million, a 53% year-over-year decrease.
• Reagent Revenue: $6.3 million, an 11% year-over-year increase.
• Services and Other Revenue: $6.5 million, a 10% year-over-year decrease.
• Gross Margin: 62.3%, up from 60.6% in the prior year period.
• Operating Expenses: $20.1 million, a 25% year-over-year decrease.
• Loss from Operations: $8.3 million, a 28% year-over-year improvement.
• Installed Base: 1,299 instruments, a 15% increase over the prior year.
• Cash and Equivalents: $39.3 million as of September 30, 2024.
• Full Year Revenue Guidance: Revised to $80 million to $85 million.

• Warning! GuruFocus has detected 2 Warning Sign with AKYA.

Release Date: November 14, 2024

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

Positive Points

• Akoya Biosciences Inc (NASDAQ:AKYA) has implemented a more operationally efficient cost structure and a manufacturing center of excellence, leading to improved margins.
• The company reported a gross margin of 62.3% in the third quarter, an improvement from the previous year's 60.6%, attributed to operational efficiencies.
• Reagent revenue increased by 11% year over year, indicating growth in this segment.
• Akoya Biosciences Inc (NASDAQ:AKYA) continues to lead the market in publication volume, with a 47% increase in publications citing their platform technologies.
• The company has announced several important partnerships and product introductions, including a large multi-institutional study with the Francis Crick Institute and the Royal M and NHS Foundation Trust in the UK.

Negative Points

• Revenue for the third quarter was $18.8 million, a 25% year over year decrease, largely due to ongoing capital equipment purchase constraints.
• Instrument revenue saw a significant 53% year over year decrease, with only 35 instruments placed in the third quarter.
• The company has revised its full-year revenue guidance down to a range of $80 million to $85 million from a previous range of $96 million to $104 million.
• Akoya Biosciences Inc (NASDAQ:AKYA) experienced volatility in sales cycles and conversion rates, particularly in North America, impacting predictability.
• Operating expenses were $20.1 million, and despite cost improvements, the company reported a loss from operations of $8.3 million.

Q & A Highlights

Q: Can you give us a sense of the cash burn in the quarter and your expectation for the burn over the next several quarters? A: Johnny Ek, CFO: We kept cash from operations in the $8 to $9 million range for Q3 and expect it to be meaningfully less in Q4 as margins expand and we realize the full effect of OpEx reductions. We anticipate achieving cash flow break-even next year as revenue returns to growth.

Q: Are there any meaningful capital expenditures expected in the upcoming quarters? A: Johnny Ek, CFO: Most capital expenditures for the year are behind us, primarily spent in Q1 and Q2 for the build-out of our manufacturing center of excellence. We do not expect significant CapEx in Q3 or Q4.

Q: Can you elaborate on the strategic alternatives you are exploring? Is there anything off the table? A: Brian McKelligon, CEO: We are evaluating a range of strategic alternatives to maximize shareholder value. Nothing is off the table, and we are constantly evaluating opportunities in this current market environment.

Q: What is your level of confidence in re-accelerating top-line growth next year, and what investments might be needed? A: Brian McKelligon, CEO: We are confident in growth driven by recent reagent introductions and a robust clinical trial pipeline. We expect reagent revenue growth and contributions from clinical trials to drive top-line growth in 2025.

Q: Are you seeing any competitive pressures in the spatial biology market? A: Brian McKelligon, CEO: The primary challenge is the macro environment, not competition. We are focusing on content-driven sales to drive growth and address competitive dynamics.

Q: How are you addressing the volatility in sales cycles and conversion rates? A: Brian McKelligon, CEO: We are baselining on the low points of sales cycles and conversion rates, particularly in North America, to improve predictability and address macro challenges.

Q: Can you discuss the impact of restructuring on your Q3 performance? A: Brian McKelligon, CEO: The dominant contributor to the shortfall was capital availability, but restructuring did cause some disruption, particularly in North America. We estimate about 15-20% of the shortfall was due to reorganization.

Q: What are your expectations for gross margins heading into 2025? A: Johnny Ek, CFO: We expect gross margins to remain in the low 60s, with potential for a couple of hundred basis points improvement year-on-year, driven by operational efficiencies and new reagent offerings.

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