Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cytek Biosciences Inc (CTKB, Financial) reported a 7% year-over-year growth in total revenue, reaching $51.5 million for the third quarter.
- The company experienced strong demand from the biopharma sector, particularly from global pharma and CRO customers.
- Positive adjusted EBITDA was achieved, driven by disciplined expense management and revenue growth.
- Cytek expanded its global footprint with 164 instruments sold, increasing its total installed base to 2,821 units.
- The company reported a positive GAAP net income of $0.9 million for the third quarter, compared to a net loss in the prior year.
Negative Points
- Market conditions for instruments in the US remained softer compared to the previous year.
- GAAP gross profit margin decreased by 1% from the previous year due to higher product material costs.
- Total US revenue declined by 9% from a strong Q3 of the previous year.
- Research and development expenses decreased due to lower headcount and engineering expenses.
- The company anticipates a GAAP net loss in the single-digit millions range for the full year 2024.
Q & A Highlights
Q: Can you elaborate on the more normalized demand environment in the US and the essential nature of flow cytometry for your customers?
A: Wenbin Jiang, CEO: We have seen improvement in the academic sector in Q3 versus Q2, with strength primarily from the biopharma sector. Flow cytometry is a basic life science tool used in almost all biology labs, supporting daily needs, which differentiates us from other technologies that are more discretionary.
Q: What are the underlying assumptions for the expected sequential revenue increase in Q4?
A: William McCombe, CFO: We are assuming a normal seasonal pattern, with Q4 typically accounting for about 30% of total revenue. Our instruments are viewed as essential by many customers, which supports our confidence in a normal seasonal pattern.
Q: Can you provide any preliminary guidance for 2025 regarding growth and profitability?
A: William McCombe, CFO: We are not providing revenue guidance for 2025 at this point. However, our business model focuses on growing the top line, maintaining gross margins, and controlling operating expenses, which should lead to EBITDA growth.
Q: What can we expect from the upcoming December event and any new products in 2025?
A: Wenbin Jiang, CEO: We will provide guidance for the year during our Q4 earnings call. We continue to invest substantially in R&D, and you can expect new product launches over the course of the year.
Q: Can you provide more details on the strength in the APAC region and the impact of demand trends in China?
A: Wenbin Jiang, CEO: Our APAC business includes revenues from Australia, New Zealand, Japan, Southeast Asia, India, and China. While we have seen some impact in China, we expect a return to normal sometime next year.
Q: How do you view the long-term growth rate for your business given the current market challenges?
A: Wenbin Jiang, CEO: We aim to maintain growth above the market despite challenges in the life science industry, which has seen negative growth in some areas.
Q: How are service attachment rates trending, and what strategies are in place to increase them?
A: Wenbin Jiang, CEO: Service revenue growth reflects the rapid increase of our installed base and frequent instrument usage. We aim to continue growing our recurring revenue based on our solid installed base.
Q: How do you view the replacement cycle for instruments given current market conditions?
A: Wenbin Jiang, CEO: Customers are extending the life of their instruments due to funding challenges, but new programs and the need for advanced technology drive demand for our high-parameter cell analysis instruments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
