NanoString Technologies Releases Operating Results for Second Quarter of 2023
– Record Q2 Revenue of
- Retained More than
“Strong growth in our spatial biology business and continued durability in our nCounter business helped us generate record revenue during the second quarter,” said Brad Gray, President and CEO of NanoString. “We expect to continue to benefit from substantial CosMx instrument order backlog through the back half of the year and into 2024, providing visibility into revenue growth and anticipated reductions in our working capital requirements, cash burn and operating loss.”
Second Quarter Financial Highlights
-
Total revenue of
$44.2 million -
Spatial biology revenue of
$23.3 million -
nCounter® revenue, inclusive of all service and other revenue, of
$20.9 million -
Cash, cash equivalents and short-term investments balance of
$117.6 million
Spatial Biology
-
Accelerated CosMx shipments during Q2, resulting in Q2 spatial biology instrument revenue growth of
188% year-over-year -
Successfully defended substantial CosMx instrument order book, fulfilling or retaining approximately
97% of cumulative orders as of June 30, 2023 -
Captured new orders for spatial biology instruments at a rate exceeding the Q1 pace, and retained more than
$35 million -
Recorded spatial biology consumables revenue growth of
44% year-over-year, and approximately$85,000 - Partnered with Owkin and world-leading cancer research institutions and announced the launch of Multi Omic Spatial Atlas in Cancer (MOSAIC) at the American Society of Clinical Oncology’s annual meeting. MOSAIC is a project designed to revolutionize cancer research and unlock potential new breakthrough treatments through the use of spatial omics, which can leverage AI to help reveal the location and molecular activity of tumor and immune cells by providing a spatial atlas of cancer cells
- Partnered with Acrobat Genomics and the Illumina Accelerator to collaborate with Stanford Medicine to discover new drug targets for gene editing-based therapeutics using GeoMx Digital Spatial Profiler (DSP) technology
-
Grew total spatial biology system installed base to approximately 445 systems, an increase of approximately
41% year-over-year - Total peer-reviewed publications featuring our spatial biology platforms were approximately 280 as of June 30, 2023, representing an increase of approximately 150 publications in the last 12 months
nCounter
-
Recorded nCounter consumables revenue growth of approximately
8% year-over-year and approximately$46,000 -
Total installed base of our nCounter platforms of approximately 1,135, an increase of approximately
5% year-over-year - Total peer-reviewed publications featuring nCounter were approximately 7,075 as of June 30, 2023, representing an increase of approximately 1,275 publications in the last 12 months
Guidance
Management reiterated its full year guidance, which remains as follows:
-
Total revenue of
$175 $185 million -
Spatial biology revenue of
$100 $105 million -
nCounter revenue, inclusive of all service and other revenue, of
$75 $80 million
-
Spatial biology revenue of
-
Adjusted EBITDA loss of
$65 $75 million
Financial Results
We have elected to present selected non-GAAP, or adjusted, financial measures, including Adjusted EBITDA. These adjusted financial measures are calculated excluding certain items that may make it more challenging to compare our GAAP operating results across periods. Such items may include stock-based compensation, depreciation and amortization, or one-time charges such as transaction related fees and expenses or restructuring charges and severance costs. A reconciliation of adjusted financial measures to the nearest comparable GAAP financial measure can be found in the tables at the end of this press release.
(dollars in thousands) |
Three Months Ended June 30, |
||||||||||||||
|
GAAP |
|
Non-GAAP |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
44,157 |
|
|
$ |
32,219 |
|
|
$ |
44,157 |
|
|
$ |
32,219 |
|
Cost of revenue |
|
29,757 |
|
|
|
15,852 |
|
|
|
27,168 |
|
|
|
14,756 |
|
Gross margin |
|
33 |
% |
|
|
51 |
% |
|
|
38 |
% |
|
|
54 |
% |
Research and development |
|
18,214 |
|
|
|
17,346 |
|
|
|
14,428 |
|
|
|
14,474 |
|
Selling, general and administrative |
|
39,076 |
|
|
|
36,112 |
|
|
|
29,260 |
|
|
|
30,224 |
|
Adjusted EBITDA |
|
N / A |
|
|
|
N / A |
|
|
$ |
(26,699 |
) |
|
$ |
(27,235 |
) |
|
|
|
|
|
|
|
|
||||||||
Non-operating expense, net |
|
(778 |
) |
|
|
(2,148 |
) |
|
|
(778 |
) |
|
|
(2,148 |
) |
Net loss |
$ |
(43,668 |
) |
|
$ |
(39,239 |
) |
|
$ |
(27,477 |
) |
|
$ |
(29,383 |
) |
|
Six Months Ended June 30, |
||||||||||||||
|
GAAP |
|
Non-GAAP |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
79,962 |
|
|
$ |
63,299 |
|
|
$ |
79,962 |
|
|
$ |
63,299 |
|
Cost of revenue |
|
52,628 |
|
|
|
30,630 |
|
|
|
47,720 |
|
|
|
28,545 |
|
Gross margin |
|
34 |
% |
|
|
52 |
% |
|
|
40 |
% |
|
|
55 |
% |
Research and development |
|
34,332 |
|
|
|
34,763 |
|
|
|
27,083 |
|
|
|
29,430 |
|
Selling, general and administrative |
|
76,442 |
|
|
|
72,467 |
|
|
|
59,022 |
|
|
|
59,621 |
|
Adjusted EBITDA |
|
N / A |
|
|
|
N / A |
|
|
$ |
(53,863 |
) |
|
$ |
(54,297 |
) |
|
|
|
|
|
|
|
|
||||||||
Non-operating expense, net |
|
(1,466 |
) |
|
|
(4,178 |
) |
|
|
(1,466 |
) |
|
|
(4,178 |
) |
Net loss |
$ |
(84,906 |
) |
|
$ |
(78,739 |
) |
|
$ |
(55,329 |
) |
|
$ |
(58,475 |
) |
Supplemental Information
As a supplement to the table above, we have posted to the investor relations section of our website, at https://investors.nanostring.com/financials/quarterly-results/default.aspx, supplemental financial data that include our adjusted financial measures as compared to the nearest comparable GAAP financial measures, for the second quarter of 2023 and the six months ended June 30, 2023, and for each quarter of and the full year of 2022.
Conference Call
Management will host a conference call today beginning at 1:30 pm PT / 4:30 pm ET to discuss these results and answer questions. Investors and other interested parties can register for the call in advance by visiting https://conferencingportals.com/event/mNtwpnVU. Following registration, an email confirmation will be sent including dial-in details and unique conference call codes for entry. Registration is open throughout the call, but to ensure connection for the full call, registration in advance is recommended. The link to the webcast and audio replay will be made available at the Investor Relations website: www.nanostring.com. A replay of the call will be available beginning August 3, 2023 at 7:30pm ET through midnight ET on August 17, 2023. To access the replay, dial (800) 770-2030 or (647) 362-9199 and reference Conference ID: 72369. The webcast will also be available on our website for one year following the completion of the call.
Non-GAAP, or Adjusted, Financial Information
We believe that the presentation of non-GAAP, or adjusted, financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. Reconciliation of adjusted financial measures to the most directly comparable financial result as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. A reconciliation of adjusted guidance measures, including Adjusted EBITDA, to corresponding GAAP measures is not available without unreasonable effort due to the uncertainty regarding certain expenses that may be incurred in the future, and we are also unable to predict the probable significance of such adjusted guidance measures. Accordingly, in reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, we have not provided a reconciliation for adjusted guidance measures provided in this press release. For further information regarding why we believe that these adjusted measures provide useful information to investors, the specific manner in which management uses these measures and some of the limitations associated with the use of these measures, please refer to “Notes Regarding Non-GAAP Financial Information” at the end of this press release.
About NanoString Technologies, Inc.
NanoString Technologies, a leader in spatial biology, offers an ecosystem of innovative discovery and translational research solutions, empowering our customers to map the universe of biology. The GeoMx® Digital Spatial Profiler is a flexible and consistent solution combining the power of whole tissue imaging with gene expression and protein data for spatial whole transcriptomics and proteomics. The CosMx™ Spatial Molecular Imager is a single-cell imaging platform powered by spatial multiomics enabling researchers to map single cells in their native environments to extract deep biological insights and novel discoveries from one experiment. The AtoMx™ Spatial Informatics Platform is a cloud-based informatics solution with advanced analytics and global collaboration capabilities, enabling powerful spatial biology insights anytime, anywhere. At the foundation of our research tools is our nCounter® Analysis System, which offers a secure way to easily profile the expression of hundreds of genes, proteins, miRNAs, or copy number variations, simultaneously with high sensitivity and precision. For more information, visit www.nanostring.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding expectations for demand for our products and growth in our business, future revenue growth, future operating results, future cash flows, the impact of new and potential products and technology, the growth trajectory of our nCounter, and spatial biology franchises, our estimated 2023 operating results and our anticipated GAAP and non-GAAP operating results. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include market acceptance of our products; delays or denials of regulatory approvals or clearances for products or applications; the extent and duration of adverse conditions in the general domestic and global economic markets; the effects of ongoing litigation; the impact of competition; the impact of expanded sales, marketing, product development and clinical activities on operating expenses; delays or other unforeseen problems with respect to manufacturing and product development; as well as the other risks set forth in our filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. NanoString Technologies disclaims any obligation to update these forward-looking statements.
The NanoString logo, NanoString, NanoString Technologies, GeoMx, CosMx, AtoMx and nCounter are trademarks or registered trademarks of NanoString Technologies, Inc., in
NANOSTRING TECHNOLOGIES, INC. |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Instruments |
$ |
17,629 |
|
|
$ |
9,538 |
|
|
$ |
28,999 |
|
|
$ |
18,641 |
|
Consumables |
|
21,257 |
|
|
|
17,847 |
|
|
|
41,033 |
|
|
|
35,315 |
|
Services and other |
|
5,271 |
|
|
|
4,834 |
|
|
|
9,930 |
|
|
|
9,343 |
|
Total revenue |
|
44,157 |
|
|
|
32,219 |
|
|
|
79,962 |
|
|
|
63,299 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of revenue |
|
29,757 |
|
|
|
15,852 |
|
|
|
52,628 |
|
|
|
30,630 |
|
Research and development |
|
18,214 |
|
|
|
17,346 |
|
|
|
34,332 |
|
|
|
34,763 |
|
Selling, general and administrative |
|
39,076 |
|
|
|
36,112 |
|
|
|
76,442 |
|
|
|
72,467 |
|
Total costs and expenses (a) (b) |
|
87,047 |
|
|
|
69,310 |
|
|
|
163,402 |
|
|
|
137,860 |
|
Loss from operations |
|
(42,890 |
) |
|
|
(37,091 |
) |
|
|
(83,440 |
) |
|
|
(74,561 |
) |
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Interest income |
|
1,527 |
|
|
|
406 |
|
|
|
2,812 |
|
|
|
557 |
|
Interest expense |
|
(1,889 |
) |
|
|
(1,880 |
) |
|
|
(3,780 |
) |
|
|
(3,763 |
) |
Other income expense, net |
|
(211 |
) |
|
|
(490 |
) |
|
|
(218 |
) |
|
|
(707 |
) |
Total other expense, net |
|
(573 |
) |
|
|
(1,964 |
) |
|
|
(1,186 |
) |
|
|
(3,913 |
) |
Net loss before provision for income taxes |
|
(43,463 |
) |
|
|
(39,055 |
) |
|
|
(84,626 |
) |
|
|
(78,474 |
) |
Provision for income taxes |
|
(205 |
) |
|
|
(184 |
) |
|
|
(280 |
) |
|
|
(265 |
) |
Net loss |
$ |
(43,668 |
) |
|
$ |
(39,239 |
) |
|
$ |
(84,906 |
) |
|
$ |
(78,739 |
) |
Net loss per share, basic and diluted |
$ |
(0.92 |
) |
|
$ |
(0.85 |
) |
|
$ |
(1.80 |
) |
|
$ |
(1.70 |
) |
Weighted average shares used in computing basic and diluted net loss per share |
|
47,365 |
|
|
|
46,427 |
|
|
|
47,151 |
|
|
|
46,201 |
|
|
|
|
|
|
|
|
|
||||||||
(a) Includes |
|||||||||||||||
(b) Includes
|
|||||||||||||||
NANOSTRING TECHNOLOGIES, INC. |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(In thousands) |
||||||
(Unaudited) |
||||||
|
June 30, |
|
December 31, |
|||
|
|
2023 |
|
|
|
2022 |
Assets |
(Unaudited) |
|
|
|||
Current assets: |
|
|
|
|||
Cash and cash equivalents |
$ |
114,305 |
|
|
$ |
112,250 |
Restricted cash and equivalents |
|
625 |
|
|
|
898 |
Short-term investments |
|
3,297 |
|
|
|
84,282 |
Accounts receivable, net |
|
42,982 |
|
|
|
31,506 |
Inventory, net |
|
48,849 |
|
|
|
43,273 |
Prepaid expenses and other |
|
11,387 |
|
|
|
14,565 |
Total current assets |
|
221,445 |
|
|
|
286,774 |
Property and equipment, net |
|
47,939 |
|
|
|
44,457 |
Operating lease right-of-use assets |
|
15,458 |
|
|
|
17,581 |
Other assets |
|
4,148 |
|
|
|
4,600 |
Total assets |
$ |
288,990 |
|
|
$ |
353,412 |
Liabilities and Stockholders’ Equity (Deficit) |
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable |
$ |
20,868 |
|
|
$ |
16,619 |
Accrued liabilities |
|
8,649 |
|
|
|
7,884 |
Accrued compensation and other employee benefits |
|
13,110 |
|
|
|
17,494 |
Customer deposits |
|
2,079 |
|
|
|
1,757 |
Deferred revenue and other liabilities, current portion |
|
12,287 |
|
|
|
9,588 |
Operating lease liabilities, current portion |
|
5,440 |
|
|
|
5,518 |
Total current liabilities |
|
62,433 |
|
|
|
58,860 |
Deferred revenue and other liabilities, net of current portion |
|
4,836 |
|
|
|
3,754 |
Long-term debt, net |
|
227,379 |
|
|
|
226,622 |
Operating lease liabilities, net of current portion |
|
15,803 |
|
|
|
18,362 |
Total liabilities |
|
310,451 |
|
|
|
307,598 |
Total stockholders’ equity (deficit) |
|
(21,461 |
) |
|
|
45,814 |
Total liabilities and stockholders’ equity (deficit) |
$ |
288,990 |
|
|
$ |
353,412 |
Notes Regarding Non-GAAP Financial Information. In addition to our results reported in accordance with
Expenses excluded from non-GAAP, or adjusted, cost of revenue, gross margin, research and development expense and selling, general and administrative expense and net loss. We exclude stock-based compensation expense and depreciation and amortization expense, which are non-cash expenses, from certain of our adjusted financial measures because we believe that excluding such items provides meaningful supplemental information regarding operational performance. We exclude certain expenses related to cloud computing arrangement implementation expenses, litigation expenses, and other business development expenses from certain of our adjusted financial measures because such expenses have no direct correlation to the continuing operation of our business as such expenses are non-recurring or non-operating in nature, and therefore we believe excluding these items provides meaningful supplemental information regarding operational performance.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure defined as GAAP net loss adjusted for stock-based compensation expense, depreciation and amortization, net interest expense, net other expense, provision for income tax and other special items as determined by management, including certain expenses related to cloud computing arrangement implementation expenses, litigation expenses, and other business development expenses.
The following tables reflect the reconciliation between GAAP and non-GAAP measures (in thousands).
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss - GAAP |
$ |
(43,668 |
) |
|
$ |
(39,239 |
) |
|
$ |
(84,906 |
) |
|
$ |
(78,739 |
) |
Stock-based compensation |
|
8,436 |
|
|
|
6,458 |
|
|
|
16,062 |
|
|
|
14,125 |
|
Depreciation and amortization |
|
3,906 |
|
|
|
1,961 |
|
|
|
7,442 |
|
|
|
3,504 |
|
Interest expense, net |
|
362 |
|
|
|
1,474 |
|
|
|
968 |
|
|
|
3,206 |
|
Other expense, net |
|
211 |
|
|
|
490 |
|
|
|
218 |
|
|
|
707 |
|
Provision for income taxes |
|
205 |
|
|
|
184 |
|
|
|
280 |
|
|
|
265 |
|
Other business development expense |
|
— |
|
|
|
44 |
|
|
|
— |
|
|
|
393 |
|
Litigation expense |
|
3,696 |
|
|
|
1,237 |
|
|
|
5,767 |
|
|
|
1,930 |
|
Cloud computing arrangement implementation expense |
|
153 |
|
|
|
156 |
|
|
|
306 |
|
|
|
312 |
|
Adjusted EBITDA - non-GAAP |
|
(26,699 |
) |
|
|
(27,235 |
) |
|
|
(53,863 |
) |
|
|
(54,297 |
) |
Non-operating expense, net |
|
(778 |
) |
|
|
(2,148 |
) |
|
|
(1,466 |
) |
|
|
(4,178 |
) |
Net loss - non-GAAP |
$ |
(27,477 |
) |
|
$ |
(29,383 |
) |
|
$ |
(55,329 |
) |
|
$ |
(58,475 |
) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP Cost of revenue |
$ |
29,757 |
|
|
$ |
15,852 |
|
|
$ |
52,628 |
|
|
$ |
30,630 |
|
Stock-based compensation |
|
(821 |
) |
|
|
(699 |
) |
|
|
(1,613 |
) |
|
|
(1,275 |
) |
Depreciation and amortization |
|
(1,768 |
) |
|
|
(397 |
) |
|
|
(3,295 |
) |
|
|
(810 |
) |
Non-GAAP Cost of revenue |
$ |
27,168 |
|
|
$ |
14,756 |
|
|
$ |
47,720 |
|
|
$ |
28,545 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP Gross margin |
|
33 |
% |
|
|
51 |
% |
|
|
34 |
% |
|
|
52 |
% |
Non-GAAP Gross margin |
|
38 |
% |
|
|
54 |
% |
|
|
40 |
% |
|
|
55 |
% |
|
|
|
|
|
|
|
|
||||||||
GAAP Research and development |
$ |
18,214 |
|
|
$ |
17,346 |
|
|
$ |
34,332 |
|
|
$ |
34,763 |
|
Stock-based compensation |
|
(2,127 |
) |
|
|
(1,818 |
) |
|
|
(4,089 |
) |
|
|
(3,561 |
) |
Depreciation and amortization |
|
(1,659 |
) |
|
|
(1,054 |
) |
|
|
(3,160 |
) |
|
|
(1,772 |
) |
Non-GAAP Research and development |
$ |
14,428 |
|
|
$ |
14,474 |
|
|
$ |
27,083 |
|
|
$ |
29,430 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP Selling, general and administrative |
$ |
39,076 |
|
|
$ |
36,112 |
|
|
$ |
76,442 |
|
|
$ |
72,467 |
|
Stock-based compensation |
|
(5,488 |
) |
|
|
(3,941 |
) |
|
|
(10,360 |
) |
|
|
(9,289 |
) |
Depreciation and amortization |
|
(479 |
) |
|
|
(510 |
) |
|
|
(987 |
) |
|
|
(922 |
) |
Other business development activities |
|
— |
|
|
|
(44 |
) |
|
|
— |
|
|
|
(393 |
) |
Litigation expense |
|
(3,696 |
) |
|
|
(1,237 |
) |
|
|
(5,767 |
) |
|
|
(1,930 |
) |
Cloud computing arrangements implementation expense |
|
(153 |
) |
|
|
(156 |
) |
|
|
(306 |
) |
|
|
(312 |
) |
Non-GAAP Selling, general and administrative |
$ |
29,260 |
|
|
$ |
30,224 |
|
|
$ |
59,022 |
|
|
$ |
59,621 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230803176184/en/
Doug Farrell
Vice President, Investor Relations & Corporate Communications
dfarrell@nanostring.com
Phone: 206-602-1768
Source: NanoString Technologies, Inc.
