Q4 2021 Olink Holding AB (publ) Earnings Call
Good day, and thank you for standing by welcome to the Ollie's Proteomics fourth quarter 2021, and full year earnings conference call.
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I would now like to hand, the conference over to your Speaker today, John Medina with Investor Relations. Please go ahead.
Thanks, Shannon and good morning, everyone. Thank you all for participating in today's conference call on the call from <unk>, We have John Hymer, Chief Executive Officer, and after Hjelm Chief Financial Officer earlier today, <unk> released unaudited financial results for the fourth quarter ended December 31 2021.
Copy of the press release and an updated corporate presentation are available on the Companys website.
Before we begin I would like to remind you that management will make statements. During this call that include forward looking statements within the meaning of the U S. Federal Securities laws, which are made pursuant to the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1095.
Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.
Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors for a list and description of the risks and uncertainties associated with <unk> business. Please refer to the risk factors section of our final prospectus relating to our registration statement on form F. One final number 333 dash to $5.
780, <unk>, which was declared effective by the U S Securities and Exchange Commission on July <unk> 2021, and in our other filings with the SEC.
We urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance also in the remarks or responses to questions management May mentioned, some non IAF RF financial measures reconciliations of adjusted gross profit and EBITDA and certain other non <unk> RF finance.
Measures to the most recently comparable <unk> measures are available in our recent earnings press release available on the company's website.
This conference call contains time sensitive information and is accurate only as of the live broadcast today February 14 2022.
<unk> disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise, except as required by law and with that I will turn the call over to John John .
Thank you John and good morning, everyone and thanks for joining early fourth quarter and full year 2021 earnings call.
I will start with a review of our operating results highlight some key accomplishments and current strategic objectives and discuss our guidance for 2022.
I will then turn the call over to <unk> to provide more details on our financials results and our outlook.
2021, what's the current formula transformational year for <unk>, including our successful IPO strong execution of our strategic plan and the achievement of numerous research and commercial milestones.
I would like to thank the entire O'reilly team for their dedication and commitment through a period of tremendous growth for the company.
One of them was well positioned exiting 2021, and we are optimistic about the company's prospects for 2022.
<unk> another year of strong growth in the next gen procurement market still in its infancy.
First I'd like to provide a high level overview or financial performance in the fourth quarter and also come and go into the details later in the call.
I am pleased to report that we delivered fourth quarter revenue of $43 7 million representing growth of 61% compared with the fourth quarter of 2020.
Full year 2021, total revenues was 95 million, a 76% increase compared with the full year 2020.
During the fourth quarter, which represented 46% of full year revenue in 2021, we experienced some headwinds related to the impact from the COVID-19 uptake across multiple geographies.
Despite this initially unexpected impact I am pleased that the team was able to manage through and delivered revenue that was above the high end of our guided range.
Customers are adopting our platform at a rapid pace, which is very exciting and at the same time posted some challenges.
The current seasonality of our revenue base is a function of where we are in our lifecycle.
<unk> grower in the promising market and.
Customer adoption curve, which all fluid.
We do believe its current seasonality we remain in the near term, but over time, we expect it to become less pronounced.
A few more words on Covid.
Our business in 2021, and how we are contemplating it potentially impacting 2022.
The increase in pandemic induced business friction that we experienced during the third quarter progressed, largely as we had anticipated through the fourth quarter.
It was really the indication of OLED <unk> entire organization that our strong execution offset these headwinds during the quarter.
As we consider them more recent rise to enrollment and its possible effects from 2022.
Not seeing significant additional headwinds arising from it so now but continue to monitor developments others.
Our industry have discussed.
Despite the Covid headwind, we continue to execute on our multiple revenue drivers in 2021, which will continue into 'twenty two.
Instance, we see a very strong traction with explore externalization next generation sequencing lab and reached a total of 25 installations by the end of 'twenty one.
We recently began delivering explore <unk> K and.
And just as important we've expanded explores reach within existing and just customer installation pace earlier in this year and in 2020.
All of these factors combined helped drive strong storage utilization during the quarter, which Oscar Oscar will detail a bit more later.
Explore a new product for us represented 69% and 62% of our total revenue in Q4 and full year 2021, respectively.
And with this positive performance total kit revenue growth rebounded strongly in the fourth quarter up 83% over Q4 2021.
<unk> service revenue revenue growth was 37% compared to Q4 2020.
We continue to make progress with our shifts towards Keith with kits, representing 35, and 28% of total revenue in Q4 and full year 2021, respectively.
<unk> will vary from quarter to quarter, given the size of the stores store base and seasonal trends, we continue to anticipate additional progress toward increasing our revenue mix towards kicks in 2022.
And before we began delivering signature and we are pleased with the 28 placements recorded during Q4.
Signature has expanded our reach within the low and mid fixed market and interesting to note that some signature customers are also existing explore users growing their activity with the opening platform beyond <unk>.
We believe this demonstrates the wide range of capabilities, our technology and its ability to address multiple multiple use cases at the same customer.
It is clear to us that our technology and commercial strategy is resonating with customers across industry research and academia.
And including our presence further downstream with our partner <unk> Bioscience in notebook growth holdings values being realized throughout the entire spectrum bulk proteomic applications.
We seem to have a very solid commercial plans to support our guidance for 2022.
We remain very confident in our competitive offerings demand from current and prospective customers and are enthusiastic about the many opportunities we see arising for all link to have an impact in both research and clinical applications.
Our competitive position is stronger than ever in Mds and acute PCR with explore three K and signature and we're confident in our ability to execute and expand in this largely untapped next generation proteomics market.
As market awareness and adoption continues to accelerate we have invested to support the company's position as the market leader spending was higher than planned due to the opportunities that we continue to see developing with customers most of which will take time to cultivate.
We anticipate 2022 would be another year of investments to support our growing leadership position in proteomics.
Given our successes with new investments in the explore platform our early results with signature and how the commercial opportunities associated with pursuing.
We believe we have a unique ability to drive improved return on investment over time for all linked with these initiatives.
Oscar will get into the details on the financial guidance in a few minutes, but I wanted to be clear that despite this accelerated level of investment.
We are well capitalized to deliver on our existing strategic plan and return to profitability.
Leveraging the strong unit economics, negligible business model and strong marketing position.
The culmination of all drivers of our business results in 2022 forecasted revenue to increase between 42, and 53% achieving a range of $138 million to $145 million.
We expect continued seasonality this year with quarterly trends similar to 2021 and over time, we do see the potential for our seasonality to become less pronounced as our revenue and customer mix continues to expand.
This guidance also assumes that the existing pandemic environment, and resulting operational friction are roughly similar to what we're experiencing today.
Beyond this year and over the long term, we remain optimistic about our competitive position and our ability to drive strong revenue growth still being at the very front end of the $1 billion opportunity in proteomics research and diagnostics.
Underlying our optimism for 2022 are many of the positive factors that helped drive a strong 2021.
Explore continues to gain strong traction in India, with new prospects and existing customers.
Landing and expanding are both proceeding very well.
And recently launched explore three K is being very well received in its early days.
In this context I would like to add that this represents groundbreaking time and brought down in my opinion. This is the first time in proteomics that it's both at scale and quality with unparalleled throughput.
Looking at 3000 proteins in parallel with single flex quantity in large cohorts consisting of thousands of samples in that space.
We have all the reason to believe that proteins and proteomics represent the most important <unk> when it comes to tracking the transition from help the disease.
<unk> disease progression what drug response.
We can feel that the research community is very excited that proteomics is fine to me here and we see a strong adoption and excitement across both academia and biopharma.
As the CEO of a link I am very proud that we have driven the cid to this current state.
We continue to rapidly expand research opportunity and remain in converting all of this work by us and our customers will have a major impact on how health care is executed and drug development.
And yes I am.
Exploratory K signature our newest offering in the low and mid Plex space is similarly found a ready customer base, we expect will grow strongly in the quarters and years ahead.
We think signature is another strong example of our promise to address the multitude of Brookdale research goals within customers flat.
The thing to findings of more than 800 studies published today exploring PPA with further define our place as the leader in proteomics.
We believe this body of knowledge also speaks to the quality of the data the only platform generates.
Sentiment shared by many of our customers in the real world real world experiences as well.
As we've discussed in the past the UK Biobank project is an immensely important project and I don't think it is proud to be the platform we support the project.
We view this existing product as an investment in scientific discovery deepening our relationship with <unk> Biopharma consortium members.
Global Research community.
The projects use of OLED technology is to significantly enhance the theme the proteomics, enabling a better understanding of disease biology, and supporting innovative drug development for project.
By the end of last year, we delivered data on 56000 samples to the UK UK Biobank consortium, a tremendous accomplishment that would not have been possible without the hard work and talent overall in fleet.
And for 2022, we plan to run samples in the expansion phase on the explore therapy 72 platform.
When data from this research our published it can be published using OLED units of protein expression MTX or normalized protein expression.
In summary, only is not only leading the commercial market in next Gen proteomics, but also defined its language.
Further to defining the language of proteomics, our ambition to expand from 3000 to 45 hungry protein by markets in 2022 remains on track with our ambition to expand beyond that.
Aside from the UK biobank.
Additional consortia that were part of incurred scallop coral and collaborations.
<unk> consortium led by Andrew MSB has to grow of identify novel molecular connections and protein Biomarkers corso in certain disease, such as coronary artery disease, or a bipolar disease heart failure dementia and metabolic.
Syndrome.
Carl form and Chad by new assignments for Peter Doctor Charlotte Tucson is a collaborative community of scientists working on the only platform investigating diverse neurological conditions by studying blood and CSF sample.
With the goal to identify biomarkers and biological mechanism for neurological diseases.
Lastly, colorbreed, it's a consortium to define protein biomarkers of inflammatory bowel disease.
<unk> do you want to tell us and brands are stopped.
As with these controllers.
We're exploring more opportunities where the old platform can be the underpinning technology for large scale projects, which are grounded in guidance specificity accuracy and decision making for customers.
Turning to the UK Biobank population procurement project, we see a lot of interest and excitement across many large and strategic courts around the world.
<unk> need and want to add protein to the cohort to complete the multi omics perspective.
We are convinced that procurement is and will continue to be very high on the agenda for all of these worldwide cohorts.
We look forward to continuing generating a lot of the Democrat type value in these data sets and particular to do so through our external explore lab partners.
Operator.
In summary, we believe we are in early phases of this multibillion dollar next generation proteomics opportunity. We believe a link at the most advanced scientifically and commercially and we are working hard to continue to drive impressive growth.
In 2022, and the yet to come.
I will now turn the call to offset to discuss our financial results.
Thanks, Tom and Hello, everyone.
First just a quick reminder, that people would be for something Thats two investor conferences. This week Tomorrow morning, we will be at the Beach AIG metric digital health life Sciences, and diagnostic tools conference and Friday morning, we will be at <unk>.
Leerink Global Healthcare conference.
Unfortunately, we will once again be interacting virtually instead of in person or on the slopes, but we look forward to catching up with many of you then and in the weeks to come.
As we pre announced on January 10th of fourth quarter revenue total reported $3 7 million strong growth of 61% year over year.
This portfolio in 2021 total revenue to 95 million up 7% to 6%.
Revenue growth was driven by strong performance from our <unk> platform and in particular explorer kits, which represented 40% of total quarterly ex fuel revenue.
Adjusted EBITDA for the fourth quarter 'twenty to 'twenty, one, but negative $1 4 million as compared to positive $10 8 million for Q4 2020.
John indicated given the benefit of moving quicker holdings accelerated investment during the fourth quarter.
At the end of 2021, we had 25 externally placed explore installations that are generated revenues for us over the last 12 months.
And the installed base achieved approximately $750000 and customer pull through during the 12 months of 2021 benefiting from both increased customer traction and seasonal Q4 strength.
We've made very strong inroads with Rx growth offering during these early quarters on the market and we continue to expect variability in quarter to quarter proved true, which will be further impacted by our seasonal trends.
During the early experience with explore so far we have seen in an average annual proved through our export customers ranging from $500000 to $750000 with individual spend ranging from less than $100000.
Multimillion dollar orders.
Kits revenue for the fourth quarter grew strongly up 83% to $15 3 million or 35% of total revenue as compared to $8 3 million for the fourth quarter 2020, or 31% of total revenue.
Drivers of kits revenue included strong export pull through.
Full year 2021 kits revenue grew 82% totally totaling $26 8 million versus $14 8 million during 2019.
Analysis services revenue for the quarter was $23 7 million as compared to $17 3 million for the fourth quarter of 2020 service growth continued to be driven by explore across all regions.
Boosted by strong deliveries of signature of the revenue was $4 7 million.
During the quarter as compared to one 6 million for the fourth quarter of 2020.
Q4, 2021 other revenue growth was primarily driven by the placement of <unk> signature instruments late in the quarter, including a small amount of initial reagent sales.
Full year 2021, other revenue totaled 8 million versus $4 9 million.
By geography revenue during the fourth quarter was $22 million in North America $21 million in EMEA and $3 $3 million in China and rest of the world.
By geography revenue during the full year of 2021 was $42 3 million in North America, $45 $4 million in EMEA and $7 2 million in China and rest of the world.
Turning to expenses Q4, 'twenty to 'twenty, one consolidated cost of goods sold was $18 4 million, resulting in a gross profit of $25 3 million.
This compares to Q4 2020 cost of goods sold and gross profit of $8, four and $18 8 million respectively.
Consolidated adjusted gross margin during the quarter was 67% versus 72% for the fourth quarter of 2020.
By segment adjusted gross profit margin for kits was 85% for the fourth quarter of 2021 as compared to 90% for the fourth quarter of 2020. The decrease in the fourth book of Kit margin is related to year end adjustments related to our target product.
Full year 2020, while adjusted gross profit margin for kits was 8% to 6% versus the 8% to 4% for 2020.
Q4, adjusted gross margin for us.
Analysis of service was 50% compared to 68% in Q4 2020. The decline in margin was primarily driven by the UK biobank amongst we delivered the UK Biobank project, we expect service margins to revert to normalized levels.
Observed historically.
In addition, the <unk> margin was impacted by our investments into capacity in order to deliver out. So you could buy back at this investment has also been sneak institutional knowledge that will further enrich our support to customers as we extend the life explore.
Full year 2021, adjusted gross profit margin for analysis services, 57% versus 69% for 2020.
As we consider total quotes they continue to believe that our strategy to increase kit revenue as a percentage of total revenues will have a positive impact on gross margin over the long term and quarter to quarter by <unk> <unk>.
Expected given the seasonality of our business and the early stage of our product introductions.
Further the introduction of explorer 72 should provide support for margin expansion over time, leveraging internal antibody library.
Adjusted gross profit margin for <unk> was 34% as compared to 23% for the fourth quarter 2020.
Q4, 2020, all other adjusted gross profit margin was impacted by a signature sales during the fourth quarter.
Full year 2021, adjusted gross profit margin for <unk> was 45% versus 47% for 2020.
Total operating expenses for the fourth quarter of 2021.
To $3 1 million as compared to $13 8 million for the fourth quarter of 2020. The increase was largely due to continued and accelerated investments in OLED commercial organization, and R&D and research and development and driven by additional costs of the public company as well.
Full year 2021, total operating expenses were $102 9 million as compared to $40 million to $42 million for 2020 and.
In keeping with the very large procurements opportunity in front of US we expect to continue to invest according to our strategic plan and grow all parts of the business in 2012.
Operating expenses are broken out as follows selling expenses for Q4, <unk> expense of about $12 million versus $4 3 million for Q4 2020 administrative expenses for Q4, 2021 were $11 8 million versus $7 9 million for Q4 of 2020 and R&D totaled $8.
$7 million and $2 2 million for Q4, 'twenty, one in Q4 2020, respectively.
Other operating loss were fixed under telephone in the quarter as compared to other operating income a positive 600000 in Q4 are plentiful.
Net loss for the fourth quarter.
$8 million as compared to a net profit of $6 5 million for the fourth quarter of 2020 full.
Full year net loss totaled 30.
$38 3 million as compared to $6 8 billion for 'twenty.
Net loss per share for the fourth quarter of <unk>.
Based upon weighted average number of outstanding shares of 119.007 million 62.
So net profit share of circumstances in the fourth quarter of 2020 based on a weighted average number of outstanding shares of $23 million 190461 full.
Full year 2021 net loss per share totaled 43.
Versus $1 <unk> per share in 2020.
And the year with a strong cash balance of $108 1 million in cash and cash equivalents.
Large networking capital release typically absorbed during the first quarter due to seasonality in our revenues and as John mentioned earlier, even as we've accelerated our investments all link remains sufficiently capitalized to achieve our return to profitability and to fund our existing strategic plan and we believe we have a unique ability to drive.
Strong in the group return on investment over time for oil linked with these investments.
In addition to our product focused efforts to capitalize on the many opportunities over the next couple of years, we need to invest in the right people.
We enter 2021.
With 214 employees and we are entering 2022, which formed a fixed increase including 150 full time employees in our commercial team.
We grew our headcount by nearly 100% in 2021 to continue building a strong foundation for 2022, but more importantly for 2023 and beyond.
<unk> team entering 2022 largest amongst our peers and today, we have over 750 customers well diversified amongst biopharma and academia.
Moving to our outlook for 2022 as John discussed we expect another strong year with total revenue to be in the rates of $138 million to $145 million representing growth of 45% to 53% over the full year 2021.
In addition, we expect seasonality of our business will progress similar to the seasonality in 2021 and cobalt friction to approximate what the experience experienced in Q4 and 2022, thus far.
<unk> hundred 22 in the years to follow we remain very optimistic and consider ourselves very well positioned for strong growth.
I'll now turn the call over to John for his concluding remarks.
Thank you Wolfgang.
So in summary, 2021 was another year of strong execution and strong growth confirming our leadership position in the Nextgen proteomics feed we saw and continue to see increasing traction and a robust adoption across our entire portfolio of products and services selling into a broad and diversified growth.
<unk> customer base.
And new products exceeding it surely exploratory K are being well received.
No.
Strong optimism that we embark on the remainder of 2022 and look forward to the months quarters and years.
Yes ahead.
And at this point, we will open up the call for questions operator.
Okay.
Thank you as a reminder to ask a question you will need to press star one on your telephone Joe Your question press the pound key please standby, while we compile the Q&A roster.
Our first question comes from Mac Sykes with Goldman Sachs. Your line is open.
Hi, good morning, Thanks for taking my questions and congrats on the quarter.
Maybe if we just start with the guide would love just kind of.
How kind of your embedded expectations for the mix of kits versus service as we kind of go through the course of the year and then within kits what explore could represent and how that's factored into your guidance.
Yes, Thanks, Bob I'll start here, so it's a great question.
So when we look at sort of the kit mix and service mix over the year.
We need to expect sort of a good progression and driving our external let's say infrastructure and driving up the kit mix over the year.
But as John mentioned in his script, we have the UK Biobank project delivery route during the first half of the year. So we expect that the kids module kits mix to sort of improve over the quarters of the year.
And clearly that will be driven by the explorer kit offerings, but I think it's also important to bear in mind that we deliver 28 signature boxes ahead of our internal plan very late in Q4. So we do expect that to impact 2022 positively and also reflected in our guidance.
Great and then maybe just on U K biobank.
Oscar You said 21 was kind of around 10% and I know, it's a front half loaded for this year, but could you just give us an idea of what the contribution from UK Biobank question in the fourth quarter and then what it would be for either the first half for the full year 2002.
Yes.
So Australia to help me what portion of <unk>.
<unk> costs in the fourth quarter for last year, so probably roughly half of what we had for 2021 months in the fourth quarter.
So what we said, what's roughly a 10% price on the business in 2021 and roughly half of that in the fourth quarter map and looking ahead on 2022.
We.
We can see left portion of the business.
And as you know we cannot disclose the financial details of the deal.
So it is it's more part of the overall business in 2022.
Great and then just one last one for me I know, it's a small line. The other segment, but just given the strength that you saw in the signature placements in the fourth quarter, even without assuming a certain asps. It seems like there was some additional revenue that came in for other just remind us kind of what what else outside of certain insurance within the other and was there anything that showed some stronger trends than you had expected.
No I mean, clearly sort of did they would be sort of the real growth driver is sort of the placement of the signature boxes. But then we also saw good performance of Iqos era.
So.
They are not only and in turn on the sort of provider of antibiotics. So they have external revenues.
Based antibodies that they sell.
And in that time, we also see sort of some sort of sample prep sell sort of service related to our labs.
And then also shipped some closeouts.
Great. Thanks very much.
Thank you.
Our next question comes from Nishu Sood with SBB Leerink. Your line is okay.
Yeah, Hi, John Oscar.
Thanks for taking my question. So first one really on the guide I mean, it's 130 845 fairly wide range.
Just can you walk us through sort of puts and takes to that I suppose some of the supply chain concerns that you had the plastics that you talked about if any of that is in there.
Like UK Biobank is.
A large portion of that is already through so maybe just talk to us sort of how do you. What are what are some of the puts and takes that get you to the lower end of the guidance range versus sort of the higher end of the guidance range.
I have a few follow ups.
Yes sure. Thank you.
I don't think the ranges that brought to be honest, we are growing very rapidly right.
That's the $7 million range, so how we're thinking about it.
Mainly around timing really I mean, we're not planning for the bulk of the mantle of the range.
Sorry, this is estimate to a risk adjusted.
And on the higher end of the range may be a few things with any plan for we'll have them so to me it.
Growing very rapidly.
Just a few projects that have come along.
Part of the year or not.
To me, it's actually quite tight range, considering how rapidly we grow.
I'd say the timing of things.
The thing that is.
Difficult to be precise.
Tom.
Okay got it excellent and then.
Question on pull through.
Oscar mentioned 500000 to 750000.
Given the timing of the explorer launch that is pretty impressive.
And especially considering the 3000 launch that you had.
Maybe just talk to us how do you see that number trending through the year and maybe longer term because you talked about.
Couple of your customers are in millions so maybe just walk us through what are some of the things that you see that need to happen in order for those customers to go into those higher ranges and maybe just walk us through that.
Yeah. Thanks, Nathan we agree I mean were impressed as well.
On the investments that people are doing on the O&M platform and obviously, we cant compute that to the value it provides to their research.
Yes, so we tried to be ESPN as possible with you all here.
Representing the the ranges that we've seen across quarters right in.
As you know as well as us that the product hasn't been on the market for that loan is really three quarters really right.
<unk>.
And what we tried to say all the time that we probably need more time to die lean and be more precise.
And how we see that customers are thinking about that.
In my part of the script.
And we have all reasons to believe that proteins will be light vehicle procurement could be the most important omnicare.
And providing a lot of very.
Insightful data to drive research and development.
No.
What we see then is that proteomics and especially if they also commented on my script that being gay.
<unk> quantity.
I think personally that this is the first time in history, where we can look at three proteins 3000 proteins with single Plex quality.
In blood.
Hence that we're seeing.
Chip like that we are.
They are starting using proteomics at the strategy in their R&D and <unk>.
<unk>.
That is represented by the multimillion dollar orders.
But they also have people that are starting deepen that told us that you saw in the lower end of the range.
So, it's really hard and puneet honestly to be Super precise on this and I honestly think that we need to follow.
Few more quarters.
Ed.
And they tend to be more precise but.
Obviously encouraging all of it right so.
Good stuff.
Appreciate it.
Impressive given the early days of this product and just last one if I could ask about obviously illumina invested into one of your peers in high Plex proteomics.
<unk> obviously.
Obviously that validates the space, but just wanted to get your view as to how do you see.
Even though the kits launching in 2024, how do you see the competition in the market right now and what I just wanted to get your thoughts on that overall. Thank you.
Thanks Pete.
Yes, no. We continue to have a very strong relationship with Illumina and we don't believe that this will have an impact on our market opportunity. We see ahead.
We continue to view the Illumina installed base, it's a very attractive market that we are definitely going after so nothing has really changed our.
Our perspective on that.
Got it. Thank you thanks guys.
Thanks.
Our next question comes from.
<unk> with Morgan Stanley Your line is open.
Hey, guys good morning.
John maybe to kick things off just just a point of clarification really in terms of FX. It sounds like it was up 3% tailwind in the third quarter, but a much larger 16% or so you are in the fourth quarter.
Can you just walk us through that dynamic and Oscar maybe outline what exactly are you embedding in your 'twenty two topline guidance for FX.
Yes.
As we saw as we saw sort of a no.
I mean, greater with tailwind during the fourth quarter for FX.
And I think clearly we saw.
Greater shift.
Looking at sort of in particular between the U S based effect and also the USD to euro.
Sterling to some extent.
And so that is really sort of what's driving the FX tailwind.
So there must be.
Looking at 2022.
I think we've sort of fat.
Factoring some proving that.
More.
Stable levels.
But I think sort of similar rates that we observed.
During the fourth quarter.
Got it so just to clarify that Oscar I mean, so off that 45% to 53% of reported revenue growth.
What does the constant currency revenue growth look like for you embedded in the guide is it sort of a 10% FX tailwind that you are baking in for 'twenty two.
And not all it's much more than that.
So so.
So single digits.
Got it fair enough.
And then on the Opex I know you mentioned sort of accelerating investments to support your growth here, but how are you thinking about sort of that 33 million in terms of using that as a baseline going forward and was there an FX component in that line as well given what we just spoke about and then if you think about the cadence through the year.
In terms of your Opex increases anything you can share on that please.
Yes, so I think I mean.
As we mentioned we expected to.
Sort of you know.
A similar pace.
During 2022.
I think so convenient to incurring sort of similar levels that we did in in 2021, and I think sort of a relatively sort of a gradual buildup during the year.
Sure.
Thats helpful.
Got it fair enough and then.
Then on the seasonality piece I believe you mentioned in your prepared remarks that you expect similar seasonality as in 'twenty one.
But you did see I think it was about a $9 million of UK biobank benefit in the back half of 'twenty one.
And I think John you mentioned, a more modest benefit here in the first half of the year because of the expansion phase of the project. So I'm just trying to sort of like juxtapose those comments with.
The seasonality right because you should expect perhaps a less backend loaded this year, just given the shifts of that $9 million that won't happen in the back half of 'twenty two.
Yes.
Yes, no we don't think so.
We rather look at the and the duration of the lifespan of the company as we talked about in the past right that we've seen this seasonality.
Now the business has scaled quite.
Yes.
Quite practically right. So even despite you could buy a bank with a big project. It was still representing a very small percentage of our sale.
So honestly, we expect 2022 to look pretty similar as 'twenty one in terms of seasonality.
Despite both of your comments, which youre correct on that.
Delivery you can buy a bank in the first half of this year.
At Nike.
<unk>.
But still it is a smaller part.
It's more of a portion of the business for sure so yeah.
Yes.
Hopefully we're asking your question and then bottom line is that we expect it to be that we've seen from the start of the company and similar to 2021.
Got it.
And one final one for me John sort of following up on Craig's question there on <unk>.
On the alumina unused yard with one of your competitors.
As you've had time to digest it and perhaps we'll have some of your customers can you share any early feedback from them and what if anything can you do proactively to make sure that your growth trajectory Youre continues.
As they launched a co branded product at some point in the future.
Yes sure.
Yes, no I mean, we continue to see first of all a very strong positive relationship with Illumina and we are in very important part of growing their business.
Their reps on the street I mean their customers are looking to add protein to the mix today.
They are being quite active.
Together with us so we continue to see a very positive fruitful relationship with Illumina.
On the customer base I honestly don't think has changed at all.
Compared to this melodic technology over and over as soon as we started the company. We know we have superior performance in particular on specificity, which is truly crucial to get data that truly can cost it's going to help projects are more downstream instead of having to validate your data.
Secondary technologies.
Very very strong clear.
We have and that's tremendously important to research and on the last part of your question I think.
This evening, it's bleeding rates may be something we come in a few years, but I think the researching remains here now we are obviously at front runner and the Mds study. We have is very much appreciated the customers can get.
Get to all mixed basically on the same underlying instrument they already have so.
We don't change our outlook whatsoever.
On this we remain.
Got it.
Got it. Thank you so much guys.
Thank you.
As a reminder to ask a question at this time. Please press Star then one our next question comes from sung <unk> Nam with <unk> Your line.
It is open.
Hi, Thanks for taking the question.
Maybe one on 2020 outlook.
We look at the gross margin for the year.
Could you maybe kind of go through the puts and takes.
Just trying to figure out net net if you expect gross margins to continue to improve versus last year.
Yes, great question, so <unk> sort of breaks down in 2022.
First half versus second half so first half clearly sort of delivering out of UK Biobank project and we will continue to see sort of somewhat suppressed levels of gross margin similar to what we saw during the fourth quarter.
Due to the UK Biobank project amongst that has delivered out we expect.
Margins to improve.
Also benefiting from the continued shift.
Towards the <unk> side of the business.
That's helpful.
Okay Gotcha and then.
For the signature platform obviously.
Greater than better.
Better than expected demand out of the gate.
And you mentioned that some of them are actually going to existing export customers.
It is very interesting, but just curious in general.
Or the customers that are adopting the signature.
Whether they were using something else before.
Multiplex proteomics application or if they are kind of getting into it.
For the first time, just kind of curious what the customer mix looks like.
Yes, Thanks, Lindsay Great question really good one and yes.
Yes, so it's actually a mix I think.
Many proteomics labs that we target <unk> procurements in the past and where we will likely replacing.
Older technologies.
With the next Gen one.
Delivering across all key performance criteria.
But interesting assets.
Commenting on in my script as well is that.
We've seen many ignore customers, adding signature and that could be more of a genomic focused lab in the past like which now are excited to be able to add protein to the mix and also realizing that you don't always want to cap that roadmap, but also sometimes when you're more targeted certain pathways of interest for example.
Get more targeted panels, which signature represents.
So that speaks greatly in my mind to how we design our portfolio of products to meet the use cases and application areas from customers as we've talked about casting that fortinet, meaning down into pathways and so forth.
Really strong data points and Testament that we thought about that in the right way because the customers are already.
With bond into it so it's a bit of a mix on your question, but yes.
Great. Thank you and then lastly from me the Boehringer Ingelheim partnerships at the <unk> study.
Obviously, the largest of its kind.
Thank you have a couple of or at least a few studies like agile way.
Just trying to get a sense of obviously they would like to see if they would probably.
Need to look at the results of that study, but curious how the partnership could evolve over time.
Okay.
What are we.
What do you think.
Whats the pivotal I guess kind of the point for OLED in terms of taking this to the next level right.
Getting involved in kind of a biomarker study to maybe potential.
Partnership for as companion diagnostic or whatnot, and just trying to get a sense of how this could evolve over time.
Yeah, Great question again I think.
Fantastic that's one.
I'm really excited myself right now major biopharma are adding proteomics.
These studies and as I said, a couple of times already today right I think it's truly driven by scale and quality and throughput.
It has never been there in the past and now it's <unk> and.
And to me at the moment by taking Biopharma Guy I love to see how they're using it so how they can use proteomics for repositioning.
For example, then.
Looking at potential new indications for an already existing run.
Which is a tremendous return on investment obviously from the Biopharma companies perspective, they have a drug now that can use proteomics to identify new areas of application. So that's definitely part of what you just talked about so super exciting but you.
We also see many of those quite sizable projects in Biopharma in later stages. So looking at understanding mode of action understanding safety in more detail and the efficacy. So I see this as a very strong trend yet early right, but that they are realizing that proteomics is here at scale.
And they can now use it to really support there.
So I'm Super happy to see this happening and happening quite fast as well so super exciting and obviously to your question as well.
Matt This is not a one off in my mind and that is what would that start and how they can.
Take the initial data going into more targeted questions and then maybe using that Mustang in development or on the market as well.
<unk> still early innings like tremendously that it's going in this direction and quite fast as well so very encouraging for onboard I think thank you.
Great. Thank you so much.
Thank you. Thank you.
Thank you and Im showing no further questions at this time I would like to turn the call back over to John for closing remarks.
Okay. So thank you everyone for joining us today and for your interest in <unk>.
Look very much forward to keeping you updated on and hope to connect with many of you. This week. So have a great everyone. Great day, everyone. Thanks very much for attending.
Goodbye.
This concludes today's conference call. Thank you for participating you may now disconnect.
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