Q1 2022 908 Devices Inc. Earnings Call

May 10, 2022

Okay.

Good morning, and thank you for standing by welcome to the nine O eight devices first quarter 2022 financial results Conference call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone.

I would now like to hand, the conference over to your Speaker today, Kelly Girl Investor Relations. Please go ahead.

Thank you. This morning, 90 weight devices financial results for the first quarter ended March 31 2022.

If you've not received this news release or if you'd like to be added to the Companys distribution list. Please.

Please send an email to IR at <unk>.

Dot com.

Joining me today.

Kevin <unk>, Chief Executive Officer, and co founder and Joe Griffith Chief Financial Officer.

Before we begin I'd like to remind you that management will make statements. During this call that are forward looking statements within the meaning of federal securities laws.

These statements involve material risks and uncertainties that could cause actual results or back to materially differ from those anticipated.

Additional information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release finally devices issued today for a more complete list and description. Please see the risk factors section of the company's annual report on Form 10-K for the year ended December 31, 2021, and other filings with the Securities and Exchange Commission.

Except as required by law nine like devices 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 this conference call contains time sensitive information and is accurate only as of the like broadcast made at retail.

I would like to turn the call over to Kevin.

Thanks, Kelly good morning, and thank you for joining our first quarter 2022 earnings call. We started the year strong with first quarter revenue growing 50% over the prior year period to $8 3 million and we have placed 83 devices during the quarter, bringing our installed base to over 2000 devices across our three products I'm incredibly.

Proud of our team's execution in managing our supply chain strengthening our customer relationships and expanding into new accounts, all while dealing with the ongoing challenges of the pandemic. Our results are a testament to their hard work and effort as we grow our company.

Last quarter, we outlined five focus areas that drive our long term growth I would like to highlight some of our progress in each of these areas.

With our first objective surrounding customer adoption as noted previously we are employing it penetrate and radiate strategy in which we work to penetrate new accounts, creating a foothold and then radiate across these enterprise accounts driving broader adoption looking first at our progress with our desktops, we placed 20 devices during the first quarter.

<unk> with an even split of new and existing customers continuing the trend we saw in the second half of 2021 further for rebel product nearly a third of our placements were for cell and gene therapy applications for customers ranging from small biotech to top pharma companies. We are really encouraged by the increasing excitement for rebel and these.

Applications as presented previously we continue to expect our total addressable market to expand significantly over time as these advanced therapies take hold in the market and rebels adoption. In this segment is our focus as a result.

Our ZIP chip also continues to gain ground in Biopharma for critical quality analysis. One important highlight was the recent order from U S Pharmacopeia or USP USP is dedicated to helping improve global health through standard setting and compounding biologic pharmaceutical manufacturing and other fields, we're excited to support USPS.

To build trust and supply of C quality medicines.

For our handhelds, we had several key international orders, including the Australian border Force a new customer. We also received an order for additional units from the U K Nationals Jabroni Center, a multi agency training center supporting chemical response across the U K. These adoptions highlight new enterprise account potential in further partnership with our leading <unk>.

Training organization as we work towards the goal of our handheld mass specs, becoming the standard bearer for global chemical response.

Turning to our second objective accelerating commercialization.

We continue to harness our commercial investments from last year and will further expand our distribution channels and expand our commercial organization to 80 at the end of the year. During the first quarter, we made progress in both areas, adding to our commercial team and extending our APAC reach by adding a distributor in India for a desktop devices.

These complement our recent investments in China, and our distribution partnership with Sartorius in Korea.

Turning to our third objective developing and advancing our product portfolio. We continue to unlock our platform's capabilities through consistent releases of additional analyte assay accessories and data integration in order to increase areas of use for our customers and to penetrate our addressable markets.

For handhelds for new drugs and drug precursors have been added already this year, including fentanyl analogues cannabinoids, and a potent new class of illicit drugs niches in.

Our handhelds are game changer for the opioid crisis with the ability to detect and identify trace amounts of these drugs.

There continues to be a growing need for first responders to <unk> safe and accurate detection technology at the point of need the National Institute of drug abuse issued a report in March noting that law enforcement seizures of pills containing elicit ethyl increased dramatically between January 2018 in December 2021, the number of pills fees increased from 42.

<unk> thousand to over $2 million during this timeframe.

These deadly counterfeit pills are often made to look like prescription drugs and a study published in April in the journal of American Medical Association adolescent overdose deaths in the U S more than doubled from 2010 to 2021, even though drug use amongst teens is currently historically at a low.

The study noted that in 2021 federal was involved in more than 77% of adolescent overdose death. These are sobering statistics, we remain committed to regularly updating our devices analytics and machine learning to keep pace with the evolving needs of first responders to effectively combat this crisis.

In addition to new drug targets, we have expanded the capabilities of our <unk> handheld device to continue to build a closer connection to our customers enabled more use cases, we have now added iOS capabilities and our customers can now data transfer wirelessly from their <unk> device to an app on their iPhone.

This is in addition to our existing Android capabilities and further streamlines workflows and accelerates field support for our customers. We have also provided customers and partners with technical integrate specialization for the <unk>.

Next nine awake to ensure they can easily integrate our devices into larger system, such as robots and drones.

As our installed base increases we are seeing the impact of our handheld devices in keeping people safe at large prominent event and in smaller local institutions at the Boston Marathon last month, the Boston Fire Department placed our handheld devices with the Arrow module near the races finish line to monitor for chemical airborne hazards or devices.

Have been used at other national events, including the Super Bowl in Los Angeles to screen mail and to respond to other potential chemical emergencies.

<unk> 900 device is also being used to protect people and smaller yet important competing institution earlier this year in Falmouth, Massachusetts, a hospital emergency room was shut down temporarily when several hospital in law enforcement personnel began to feel ill after being exposed to an unknown powder in the closing of the suspect.

<unk> overdose patient stay.

States Hazmat team was called in and using the Amex Valuate determined the powder was spent in all the hospital staff, we've been able to quickly remediate and resume operations.

Other example occurred in Oneida County, New York when in January two corrections officers at the County jail were hospitalized after being exposed to federal through incoming mail as a result of this incident are neither became the first correctional facility in New York State to procure the amex nine away to preliminarily test all incoming leak.

Mail.

At a recent press conference a 90 county executives noted the device gives them the capability to positively identify even residual amounts of drugs and second we are pleased that our products are positively impacting our customers and we foresee these new additional device capabilities will continue to provide rapid actual answers and keep our community safe.

Turning to our fourth objective broadening our bio analytics platform as more advanced therapies entered the pipeline innovators need to identify and understand critical process parameters and their impact on critical quality product attributes during process development and the entire bio manufacturing workflow. Our goal is to become a key.

Enabler of Biopharma for pointed out by providing simple automated analyzer devices for measuring and monitoring process and product attributes.

As a plug and play device or ZIP chip CMS device is simple to use and provides rapid characterization of multiple product quality attributes our customers highlighted devices sensitivity and speed in the recent papers and presentations.

In a paper published to analytical chemistry, researchers from <unk> University in China conducted a multi level <unk> analysis using zip chip.

Constellation plays a pivotal role in a variety of biological processes and is an important parameter optimizing drug such as monoclonal antibodies put and University researchers noted higher resolution faster speeds and less sample consumption with the ZIP chip device compared to liquid chromatograph method.

Cytogen, a Denmark biotech company is currently developing an innovative antibody combination therapy to improve the lives of cancer patients in a presentation at the bio processing summit in Barcelona type adjourn scientists noted that the ZIP chip workflow. It's the preferred charged separation method for mass spec characterization.

<unk> ZIP chip provides unrivaled separation resolution of charge variance along with analytical speed and sensitivity.

Biopharma researchers use our rebel device.

Gain an improved understanding of the cell culture environment within a bioreactor data from the rebel enables researchers to identify and control key process parameters and bio processing workflows. This is evident at our work with key organizations focus on developing and implementing new bio manufacturing processes.

<unk> is an independent UK based innovation organization that works with companies to develop true scale up and commercialize new products and processes. We've teamed up with CPI biologic center to optimize cell culture media and feeding strategies and small volume bioreactor system through to process scale up data from our <unk> analyzer.

<unk> is providing significant insights into the cell metabolism.

In addition to typical cell culture parameters, such as cell count viability and basic metabolite data data generated from the rebel is being used to develop predictive models for feed control, leading to improved efficiency and robust product quality.

We've also formed an alliance with ambit and industrial academic consortium that is developing technologies and methods to fast track advanced bio manufacturing processes. There are several projects underway whereby researchers are utilizing our rebel device for frequent outline measurement of cell nutrient consumption to develop predictive media feeding model.

Rules for improved product quality and reliability in one project researchers have engineered a more robust mammalian cell line and are developing and media beating structure to grow the cell.

Another research project focuses on sell media development and optimization for recombinant <unk> associated virus or AAV vectors, which are widely used in gene therapy applications. Researchers appreciate the rebels desktop sites as it can be located next to a bioreactor, enabling real time measurement and monitoring of nutrients critical cell growth.

Genetic engineering and Biotechnology news hosted a recent webinar on leveraging <unk> data for Biopharma for Plano, where our principal research scientist from Sartorius noted rebels value in facilitating real time bioreactor monitoring and decision, making he noted that particularly in a perfusion process that can run from 60.

The 90 days, the ability to tweak and steer to keep the process in control is a necessity with tools like rebel important to enabling nextgen manufacturing processes.

As these examples illustrate there's a critical need for analytics, along with speed and sensitivity to enable more real time control to improve product quality process efficiency and predictability are devices are well positioned to meet this need.

And finally, our fifth objective laying in Ohmic Foundation, while our focus is on broadening our bio analytics platform, we've seen emerging need for accelerating mass spec based workflows to address proteomics and metabolomics opportunities are electronically driven chip technology has the potential to reduce sample preparation requirements and accelerate the separation.

Step from hours to minutes.

In the area of Metabolomics scientists around the globe are working to understand the metabolic building blocks and energy supply of cancers. We are working with leading research institutions in these areas to acquire rebel and gip chip products to aid in their understanding.

In a recent pivotal paper published in nature cell biology, scientists from Duke University uncovered a new signaling role in cancer cells for classical neurotransmitter called Gaba using a time course in stable isotope tracing researchers found that specific cancer cells convert the immunoassay glutamine into Gaba and that.

Intracellular Gaba can serve as an activity of tumor cell proliferation, and as an immune cell suppressor. This understanding provides a new avenue to target cancer cells pharmacologically.

The isotope tracing experiments, providing the direct evidence of Gaba production from glutamine in cancer cells was conducted using our ZIP chip <unk> chip enabled simple sample preparation and fast high resolution separations in just four minutes with only a small 10 microliter sample. We expect a continued cadence of publications technology and research.

With Premier academic institutions, and research partners to support future product launches and workload specific to the Omics domain to that end in early June we'll be participating in the American society of mass spectrometry annual conference, which we think of as the Super Bowl all mass spec conferences, we're planning a strong showing with a dozen presentations.

Several which highlight our progress in developing new Microfluidic chips for our platform for proteomics application also majority of our presentations include collaborations with academic institutions and industry partners.

We're excited to be able to showcase the breadth of our platform to the scientific community, who will provide more detail on our conference presentation in next quarter's earning call in summary, I am encouraged by customers adoption of our technology and the enthusiasm we're seeing across our end markets for real time analytics at the point of <unk> with that I'll turn the call now over to Joe for more detail.

On our financials.

Thanks, Kevin revenue for the first quarter 2022 was $8 3 million compared to $5 5 million in the prior year period, representing growth of 50%.

Handheld revenue from our <unk> 900 product was $4 5 million, an increase of $1 2 million compared to the prior year period. This included additional device placements and higher circumscribed them.

Desktop revenue from our rebel and chip products for the first quarter 2022 was $3 6 million compared to $2 1 million in the prior year period, representing growth of 68%. This.

This was primarily due to an increase in device placements as well as an increase in recurring revenues.

Recurring revenues consisting of consumables accessories and service revenue for the first quarter 2022 was $2 5 million compared to $1 4 million in the prior year period, representing growth of 73%.

This increase was primarily driven by both service and consumable revenue related to rebel kit sales.

Our installed base grew to 2018 units with 83 devices shipped during the first quarter.

This includes 63, Amex 90 weight handheld devices <unk> rebel desktop devices and five ZIP chip interface desktop devices.

Gross profit was $4 1 million for the first quarter of 2022 compared to $2 9 million for the prior year period.

The increased gross profit of $1 2 million was primarily driven by an increase in product and service gross profit, resulting from higher sales volume offset in part by investments in personnel and facility related costs as we scale our service and operation teams.

Gross margin was 50% for the first quarter 2022, as compared to 52% for the prior year period.

The decrease in gross margin aligned with internal expectations as we invested in service and operations personnel and infrastructure during 2021, and the first quarter of 2022 to support growth and scale.

We expect gross margins to expand through the back half of the year as we leveraged our fixed investments and we continue to expect gross margins to be in the mid <unk> for the full year 2022.

Total operating expenses for the first quarter of 2020 to $13 7 million compared to $8 7 million in the prior year period.

The increase was driven primarily by head count expansion across our business and stock based compensation as well as expenses related to marketing activities consulting and travel.

Net loss for the first quarter of 2022 was $9 4 million compared to $6 1 million in the prior year period.

We ended the first quarter of 2022 with approximately $223 million in cash and cash equivalents. In addition, we added approximately $15 million of debt outstanding.

We have a strong balance sheet and remain prudent with capital.

Here in May as part of good corporate housekeeping, we are filing a universal shelf registration statement on form S. Three for up to $200 million. This will enable us to have options at our disposal to maintain a strong balance sheet, but we have no current intent to conduct an offering and raise cash.

We believe we are well capitalized to execute on our strategic product and commercial roadmap.

Looking ahead for 2022, we continue to expect revenue to be in the range of $52 million to $55 million representing growth of 23% to 30% over full year 2021.

Within a range, we expect desktop growth relating to Biopharma and bio processing applications to approach two times to growth rates of the overall business in 2022.

We continue to expect seasonality to be consistent with prior years, reflecting the impacts of the U S government year end purchasing cycle.

Number three and typical year end pharma and biotech spending in the fourth quarter.

As a result, we expect revenue for 2020 to be similar to our cadence of 2021 with approximately two thirds of revenue to be recognized in the second half of the year.

At this point I would like to turn the call back to Kevin for closing comments.

Thanks, Joe it's been an exciting start to the year as we advance our product capabilities broaden our bio analytics platform and deepen our customer relationships. We look forward to updating you on our progress throughout the year. One final comment I'm excited to announce that we are holding our first discovery day for the Investor community on June 15th at our Boston headquarters will.

Showcase our technology products and platform will also highlight key applications in recent scientific presentations as well as conduct some hands on product demo. This is an in person event and I look forward to sharing our team's expertise and enthusiasm for our mission to democratize mass spec in critical life applications with that we'll now open it up for.

Question.

Thank you as a reminder to ask a question you'll need to press star one on your telephone to withdraw.

While your question press the pound key.

First question comes from Puneet <unk> with SBB Securities. Your line is open.

Yeah, Hi, Kevin and Joe Thanks for taking the questions.

The first one is on rebel is you pointed out desktop placements were strong and youre pointing to two X the growth for the bio processing side.

And the guide.

Trying to understand.

I appreciate the one thirds of the devices are going into cell and gene therapy accounts, but maybe can you.

Help us understand how are they utilizing the devices today, where are you seeing the what which applications you are seeing the most pick up.

And.

Should we think about more rebel boxes placements versus.

The consumable pull through or.

Should we expect acceleration on both of those fronts as you go and further penetrate these accounts.

Yes, sure happy to expand on that Puneet.

We're pleased with the progress rebel spend on we have as you know good penetration into large pharma, but also small Barbara and CD mode.

I think a common theme before we get into some of the momentum a common theme it's cell culture media measuring spent culture media with time course data.

And with the ultimate goal of being able to actually change their feeding schedule and helping to optimize and accelerate the bioprocess. So we're seeing that the placements have been we've been following that we've described before is penetrated radiate right now we've got a great foothold in the large accounts and we're working to go across because each.

These have had quite a bit of capacity in and we're well past the early adopters, but we have about 115 total devices out there seeing good pick up on those new placements about 50% coming from new customers and 50% from existing so I think you should keep expecting to see those placements are quick.

Comment on the consumables, so obviously our product as a point of need product. So people like to have had it have it Neal.

We remain committed to about one a month of the consumables, which you've been seeing and then we've got efforts underway to try to drive that higher.

Okay got it and then just following up on the commercial.

Organization and rebel you've expanded meaningfully there and more further commercial organization expansion as you pointed out to.

Folks in the organization by year end.

Can you outline for us.

What changes in the strategy that you are taking to drive both.

In U S and O U S and where should we.

How should we see the contribution from international growth as well as rebel continues to expand and also it seems like the comments that you made on Australia and UK.

<unk> also continues to grow there. So maybe just help us understand how should we think about the international growth overall.

Yeah, absolutely so international for Us historically last year as well as in Q1, its around 20% is outside the Americas.

From the revenue perspective, it is an area, we're investing quite a bit, particularly on the desktop side the commercial side.

So as you think about our goal of growing from 60 employees that we discussed on our last call to 80 by year end.

Are more weighted to folks on our desktop side. We are we are having good success, though outside the U S with our with our handhelds as well and we've been broadening both our direct sales capabilities, but also our international channel and as we discussed last time in important areas for Biopharma sartorius.

Korea for instance has been stood up and is now online representing one in APAC.

Okay.

Okay, Great and just last one briefly if I could.

That you would point out too on supply chain, obviously, that's been a key question.

And inflationary pressures so just wanted to check.

It seems like you guys have things under control and if you can maybe help us understand time from order to delivery and any changes there.

And obviously you have <unk>.

<unk> U S Army contract, that's coming delivering in the second and third quarter any change in expectations. There. Thanks, guys I appreciate the questions.

Sure no problem.

Maybe touching on the U S Army contract Nothing's changed there as far as the remaining units being delivered in Q2 and Q3.

On some of the inflationary impacts.

I feel like we have it under control.

We are seeing additional costs related to <unk>.

Inflation and supply chain.

This is hampering on margin expansion in 2022.

As we balance the pricing of our products and our end customers and some of the potential volume leverage with the increase in revenues, but specifically.

On cost inflation, our supply chain impacts we are experiencing some direct and indirect impacts indirectly.

Having to pull resources outside of the purchasing team, mainly R&D to assist with vendor qualification redesigns.

Sure we have adequate supply of those key components on.

On the direct side, we're seeing some delays in our supply chain with vendors.

Their approach is sort of communication and the lead times and deliveries, they're picking our build plan timing within 2022, we feel like we have it under control to be able to deliver.

Customers and high quality product, so and that's.

Cost of materials cost of shipping expediting and pass through costs on some of the labor inflation of factors within our supply chain and we're very vigilant.

Trying to manage and monitor those as best we can.

Great. Thanks.

Okay.

Thank you. Our next question comes from Dan <unk> with Stifel. Your line is open.

Good morning, guys. Thanks for the questions Kevin on the rebel can you just talk a little bit about the workflow intensity that you're seeing when you look at the various project types, maybe particularly as it relates to cell and gene I think the assumption there is that those guys have their instruments.

Sort of go into that level on a frequency that is beyond the other modalities. So are you seeing that play out once accounts get up and running.

Is there any reason why I think the 6% to seven systems that you mentioned going to cell and gene labs this quarter wouldnt be accretive to the pull through average once once they get fully scaled up.

Yes, yes, sure how did you get so yes, we see lots of excitement for the applications for <unk>, but the advanced therapy cell and gene, particularly exciting.

We said we view it as a as an area that as we penetrate it's really unlocking a large portion of the total addressable market and thats because the typically being done in a more smaller batch more of a personalized matters. So we watch that metric we tried to phosphate with customers.

We're seeing good utilization across the board across the applications, but do have a lot of excitement for the future of the cell and gene area again, I would say across our installed base, we see around that one.

Utilization rate once our customers up and running and it can take a little bit for a customer to be be productive.

We think it's very important as well to really showcase what can be done and that's why we announced recently a new partnerships with CPI and ambit for those reasons.

Okay, just to push a little further there. So if one kid is the average that you are finding which is pretty consistent with other periods and that's obviously an average of highs and lows are you finding that the high or the cell and gene companies. The ones that are coming in above one and therefore lifting the average and that's offsetting the newer guys or the different modality.

Yes, I think Dan that we're seeing a range and in some cases their cell and gene customers, but also in a few cases on the mab side.

So we're seeing a lot of it gets to the utilization of the workflows of the young customers and you're right over time, we may see cell and gene trending more consistently above the average but.

That will continue to play out in the coming quarters and year.

Okay.

Okay, and just maybe on the.

Yes, I hear you. Thank you for that detail Joe.

Okay and just on the placement total for the year do you feel like the reasonable expectation on mix between new and existing accounts as to sort of stay at that 50, 50 split or is there a reason why maybe 111 half of that equation would change a little bit in the back half of the year.

Well, we've certainly seen it true for the I guess about three quarters now we've seen that playing out we think it is a good healthy mix there because as we have a foothold in the larger accounts that a lot of capacity and you can move throughout and get referenced within those companies. So we do expect that to continue to play out.

But we're busy in new geographies, we are busy working to get new accounts.

Captured so so we'll see what the mix is but I think it's a.

Its been reasonable over the last three quarters.

Yes, Okay I appreciate it guys. Thanks.

Okay.

Thank you. Our next question comes from Max <unk>.

Sushi with Cowen Your line is open.

Hi, This is Stephanie on for Maxim. Thank you. Thanks for taking the question.

The first one here have you received any feedback from your customers. Following the updated FDA draft guidance, Dave Mccarthy development in gene editing in late March heavier conversation today potential level about there differ from the conversations we've had.

12, and 18 months ago, and what are the key factors determining a perfect question to adopt or hold off on the project up of Apple analyzer.

Yes, sure happy to give some color, especially I think our conversation has obviously continued to evolve since the launch of the product.

Very much pass those early adopters with about 115 boxes, they're in.

I think that what really drives folks is that quest for more analytes more information and as we said in the past, we really do it that the market for numerous reasons, some regulatory perhaps but there is a strong demand for.

Per analytes and information and we call it that bioprocess for play out. So I think over time, we have been experiencing folks that are that are interested in having more frequent measurement data that conversation in the early days started with.

Normally send this out to the lab and I do have that kind of time 0.0 at the beginning of a bioreactor run, but with your value proposition in my knowledge that these analytes are so important to the sales cycle why shouldn't I met it measure it frequently throughout my call. It two week daily ROM and process development. So I think our conversation now is <unk>.

Related to what can I do with that information with with with higher frequency measurements and Thats why we are working to make sure. We have the right data integrations. When we said in the past the sectorial since the platform that we can allow us to push it and so we can have our folks be able to see the screening.

And be able to visualize that and pull insights from that conversation is continuing to evolve there.

But we've seen good strength in the adoption and willingness to want more info.

Got it thanks for that color.

And just a follow up you highlighted your objective to broaden your bio analytics platform and it was great to hear.

Ramp up with your customers.

<unk> platform, a net positive feedback as well.

And your platform can you give us a sense of how you plan to enhance that are your customers asking for any particularly.

Yes, we're very excited that our platform is pretty broad in its capability. So we've got with our chip really a focus in the product quality attributes and giving those in a timeframe that can be 20 times faster than legacy liquid chromatograph fee.

And then with our with our rebel very excited that outline we're giving you. The process attributes. These key process parameters that we were able to Julian again things that are so critical to sell cycle things that are informative of their predictive models that there is multiple institutions developing an antibody panel being so enabling so we're continuing to work.

With customers to build that platform out build those workflows out we do have a strong roadmap there to look at increased analyte panels as we've said before other accessories data integration that can help with that entire workflow.

Got it that's helpful and last one for me.

On the new Amex and away from the applications for iOS for bipolar.

Because that's opened up the opportunity for Amex.

One more thing.

Thank you don't want local level are you seeing any differences.

One more thing budget here in 2022.

2021 or 2020.

Thus far we I don't think were seeing anything measurable on the change in budgeting, we put a few things in the in the script there because the applications that we're chasing here across state and local law enforcement federal government under the organizations around counterfeit pharmaceuticals and analyst.

It fit bowls in combat.

Combat the opioid crisis those seem to be remaining a high priority for our customers. We are seeing adoption of our products across international but a lot in our U S state local again, because this problem is affecting in killing so many.

I think things like our iOS app things like adding analytes.

<unk> makes it easier for customers to ensure they are partnering with the right organization that they are putting their capital dollars to work because we're giving them new features and functionality that are responsive to their job things like the iOS app, we like a lot because it connects more intimately to the customer and their workflow, which we expect to be able to keep broadening.

Overtime.

Got it thanks, so much for that color and thanks again for taking my question.

Okay.

Thank you. Our next question comes from Brian Weinstein with William Blair. Your line is open.

Hey, guys.

Good morning, Thanks for taking my question.

So.

Just a couple of them first can you just talk a little bit about what youre seeing from your end users on kind of the health of their businesses and their willingness to engage what youre seeing on kind of sales cycle is that as expected does that elongate a bit from small to large biopharma on the desktop side, but also.

Anything that Youre seeing.

And willingness to engage sales cycle or anything else on.

<unk> governments on the handheld side.

Okay.

Yes, sure happy to add some color there in the Biopharma environment, we're not seeing really I would say any any negative impacts I would say again that we see that the driver is advanced therapy. Some of the more complex modalities. It is making it clearer and clearer to individuals.

They need more analytics more information. So we're seeing a lot of engagement, obviously are our product driven by rebel on the desktop side has been has been growing pretty nicely over the quarter.

But it's still early days for us, we're well past the early adopters, but we havent been only about 115 or so out there. So there's a ton of sockets and runway I would also say that that our products really fit well into our customer's existing workflow we're not meeting.

A company to build out a new facility or a new line or add infrastructure capabilities that anyway. It's a simplified box that has a network connection a simplified plug that sits right next to their bioreactors in their labs and their biology labs today. So.

I wouldn't say, we've seen any measurable change in their engagement for our handhelds, a little bit like I, just mentioned and Stephanie.

The applications, we're chasing that the metrics continue to be just staggering the number of overdose deaths. The number of counterfeits that are that are out there.

Amongst and causing harm to community. So we continue to see a priority for our products there throughout this time.

Got it thank you and Ive asked this next question.

In various forms for but.

I just wanted to revisit it here so the Tam expansion that you guys talked about was a big part of the IPO story continues to be a big part of the story today right.

I guess.

There's probably no reason to revisit those numbers that you've put out previously, but I just wanted to kind of better understand that go back through how much of that Tam expansion is based on the capabilities that you're adding to your technology versus what is needed from kind of the underlying markets to grow themselves and on that point.

On the part of that is related to your technology you guys have talked about kind of major product releases. Every couple of years I think was 24 to 36 months. So.

Can you go through.

Without giving obviously any kind of competitive information you don't want to give out.

We should be thinking about for for what kind of major product releases and technology advances that we should be thinking about over the next year or two that kind of leads into what that Tam expansion looks like does that all make sense, yes, yes, yes. It does.

You are right I mean, we think there is a sizable tam today for the products, we have at hand today.

But youre right, we have shared and discussed at length in the past that we see that Tam broadening quite significantly a lot of it is with that tailwind of cell and gene therapy and getting our products adopted at these early stages as well as that expansion.

And without going into all the details you know the advanced therapies are growing quite a bit and having multiple increases and there is a lot of.

Need in the states for technologies to address that and we see.

<unk> really beginning to do that and that's why we highlighted that about 30% of our placements here in Q1 about 25% we reported last time overall.

We're in that space, because we see that as an important driver and again driving that thirst for analytics, which we think we're well positioned to deal with both our <unk> and our rebel.

From a roadmap standpoint, yes, we're pretty innovative company as you know we're very vertically integrated we're working to have a constant cadence of releases of Av.

Things like analyte panel expansion software integrations, but then more major more major releases as well some of the more incremental we announced just a few of the other day and many last year accessories and data integrations on the rebel in handhelds and we have many more plans for this year.

On the large side, yes, we've talked about products that developments underway things like rebel online the ability to connect the rebel more seamlessly to the bioreactor and avoid the manual pipe petting stepped we think it's.

<unk> to be driving with groups like CPI and ambac the need for frequent measurements, while we lay the.

Nation of the hardware and get that released for rebel online upcoming in the timeframe you mentioned and we also talked about that there's a long runway and what we can do on the handheld really shrinking those devices down and getting those devices will be significantly smaller and ultimately spawning an upgrade cycle for the thousands of devices.

That we have in the field. So we have that and we have I would say a considerable robust roadmap in general around the bio analytics platform that we can't get into too much here today, but it's again around adding analytes and being part of the established workflows there.

That's a great answer thank you for that and then one quickly for Joe Joe I think Dan was asking the question about the consumables and the pull through there. It looked like it was about 30% of total revenue. This quarter. We've typically talked about with you guys about that being closer to 2021, 22% as we think about kind of what the full year looks like can you just tell us.

Your thoughts within the guidance on on what that recurring revenue should be kind of trending at 30% from Q1 reasonable.

No.

Absolutely from a just to revisit a bit so for 2021. It was 19% on a full year basis Youre right. It was 31% here in Q1, which was up from 27%.

In 2021 Q1.

It is our lightest quarter from a top line perspective, so I would expect that percent to be hired as the installed base is growing but when you look at it from a full year perspective, I think getting it to start with the two probably in the low 20% is probably more reasonable than the 30% as we dream and think longer term in the building install base that haven't.

Start with a three in the future.

Absolutely something we're targeting.

But not here in 2022 likely in the low <unk> from a percent overall if thats helpful.

Very helpful. Thank you guys.

Youre welcome. Thank you.

Thank you and there are no other questions in the queue I'd like to turn the call back to Kevin for closing remarks.

Yes. Thank you all for your time and have a great day, we appreciate the questions and your participation.

This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

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Good morning, and thank you for standing by welcome to the mine Oh wait devices first quarter 2022 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session you will need to press star one on your telephone.

I would now like to hand, the conference over to your Speaker today, Kelly Girl Investor Relations. Please go ahead.

Thank you. This morning, I know weight devices released financial results for the first quarter ended March 31 2022.

Not received this news release or if you'd like to be added to the Companys distribution list. Please send an email to IR I know wait to buy some stock.

Joining me today from anyway, having dropped Chief Executive Officer, and co founder and Yoga Chief Financial Officer.

Before we begin I'd like to remind you that management will make statements. During this call that are forward looking statements within the meaning of federal securities laws.

These statements involve material risks and uncertainties that could cause actual results or back to materially differ from those anticipated.

Except as required by law nine weight devices disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events.

This conference call contains time sensitive information and is accurate only as of the lifeboat cats made have tried Rachel my back I would like to turn the call over to Kevin.

Thanks, Kelly good morning, and thank you for joining our first quarter 2022 earnings call.

Started the year strong with first quarter revenue growing 50% over the prior year period to $8 3 million and we have placed 83 devices during the quarter, bringing our installed base to over 2000 devices across our three products I'm incredibly proud of our team's execution in managing our supply chain strengthening our customer relationships and expanding.

Going to new accounts, all while dealing with the ongoing challenges of the pandemic. Our results are a testament to their hard work and effort as we grow our company.

Last quarter, we outlined five focus areas that drive our long term growth I would like to highlight some of our progress in each of these areas.

Starting with our first objective surrounding customer adoption as noted previously we are employing a penetrate and radiate strategy in which we work to penetrate new accounts, creating a foothold and then radiate across these enterprise accounts driving broader adoption looking first at our progress with our desktops, we placed 20 devices during the first.

With an even split of new and existing customers continuing the trend we saw in the second half of 2021 further for our rebel product nearly a third of our placements were for cell and gene therapy applications for customers ranging from small biotech to top pharma companies. We are really encouraged by the increasing excitement for rebel and.

These applications as presented previously we continue to expect our total addressable market to expand significantly over time as these advanced therapies take hold in the market and rebels adoption. In this segment is our focus as a result.

Mission to build trust and supply of quality medicines.

For our handhelds, we had several key international orders, including the Australian border Force a new customer. We also received an order for additional units from the U K National C. Bernie Center, a multi agency training center supporting chemical response across the U K. These adoptions highlight new enterprise account potential in further partnership with our lead.

<unk> training organization as we work towards the goal of our handheld mass specs, becoming the standard bearer for global chemical response.

Turning to our second objective accelerating commercialization we.

We continue to harness our commercial investments from last year, and we will further expand our distribution channels and expand our commercial organization to 80 by the end of the year. During the first quarter, we made progress in both areas, adding to our commercial team and extending our APAC reach by adding a distributor in India for desktop devices.

These complement our recent investments in China, and our distribution partnership with Sartorius in Korea.

For handheld for new drugs and drug precursors have been added already this year, including fentanyl analogues cannabinoid and a potent new class of illicit drugs niches in our handhelds are game changer for the opioid crisis with the ability to detect and identify trace amounts of these drugs.

There continues to be a growing need for first responders tab safe and accurate detection technology at the point of need the National Institute of drug abuse issued a report in March noting that law enforcement seizures of pills containing illicit fentanyl increased dramatically between January 2018, and December 2021, the number of pills fees increased from 42.

2000 to over $2 million during this timeframe.

The study noted that in 2021 federal is involved in more than 77% of adolescent overdose death. These are sobering statistics, we remain committed to regularly updating our devices analytics and machine learning to keep pace with the evolving needs of first responders to effectively combat this crisis.

This is in addition to our existing Android capabilities and further streamlines workflows and accelerates field support for our customers we.

We have also provided customers and partners with technical integrate specification for the Amex nine awake to ensure they can easily integrate our devices into larger system, such as robots and drones.

As our installed base increases we are seeing the impact of our handheld devices in keeping people safe at large prominent event and in smaller local institution at the Boston Marathon last month, the Boston Fire Department placed our handheld devices with the Arrow module near the racing finish line to monitor for chemical airborne hazards or device.

<unk> have been used at other national events, including the Super Bowl in Los Angeles to screen mail and to respond to other potential chemical emergencies.

Overdose patient.

The state has that team was called in and using the Amex Valuate determined the powder was spent in all the hospital staff, we've been able to quickly remediate and resume operations.

Another example occurred in Oneida County, New York when in January two corrections officers at the County jail were hospitalized after being exposed to federal through incoming mail as a result of this incident <unk> became the first Correctional facility in New York State to procure the Amex nine away to preliminarily test all incoming.

Legal mail.

At a recent press conference a 90 county executives noted the device gives them the capability to positively identify even residual amounts of drugs in second.

We are pleased that our products are positively impacting our customers and we foresee these new additional device capabilities will continue to provide rapid actual answers and keep our community safe.

Biopharma for pointed out by providing simple automated analyzer devices for measuring and monitoring process and product attributes.

As a plug and play device are zipped chip CMS device is simple to use and provides rapid characterization of multiple product quality attributes our customers highlighted devices sensitivity and speed in the recent papers and presentations.

Paper published data analytical chemistry researches from <unk> University in China conducted a multi level like homelink analysis, using ZIP chip Glenn constellation plays a pivotal role in a variety of biological processes and is an important parameter and optimizing drug such as monoclonal antibody put and University researchers noted higher resolution faster speeds and <unk>.

Yes sample consumption with the ZIP chip device compared to liquid chromatograph method.

Cytogen, Denmark biotech company is currently developing an innovative antibody combination therapy to improve the lives of cancer patients in a presentation at the bio processing summit in Barcelona type adjourn scientists noted that the ZIP chip workflow is the preferred charged separation method for mass spec.

<unk> a ZIP chip provides unrivaled separation resolution of charge variance along with analytical speed and sensitivity.

Biopharma researchers use our rebel device to gain an improved understanding of the cell culture environment within a bioreactor data from the rebel enables researchers to identify and control key process parameters and bio processing workflows. This is evident in our work with key organizations focus on developing and implementing.

The new bio manufacturing processes.

CPI is an independent UK based innovation organization that works with companies to develop true scale up and commercialize new products and processes. We've teamed up with CPI biologic center to optimize cell culture media and feeding strategies and small volume bioreactor system through to process scale up data from our rebel analyze.

<unk> is providing significant insights into the cell metabolism.

In addition to typical cell culture parameters, such as cell count viability and basic metabolite data.

<unk> generated from the rebel is being used to develop predictive models for feed control, leading to improved efficiency and robust product quality.

Also formed an alliance with Ambac and industrial academic consortium that is developing technologies and methods to fast track advanced bio manufacturing processes. There are several projects underway whereby researchers are utilizing our rebel device for frequent offline measurement of cell nutrient consumption to develop predictive media feeding models.

For improved product quality and reliability and one project researchers have engineered a more robust mammalian cell line and are developing a media feeding structure to grow the cell.

Another research project focuses on sell media development and optimization <unk>.

Associated virus or AAV vectors, which are widely used in gene therapy applications. Researchers appreciate the rebels desktop sites as it can be located next to a bioreactor, enabling real time measurement and monitoring of nutrients critical cell growth.

The ability to tweak and steer to keep the process in control is a necessity with tools like rebel important to enabling nextgen manufacturing processes.

And finally, our fifth objective laying in Omega Foundation, while our focus is on broadening our bio analytics platform, we've seen emerging need for accelerating mass spec based workflows to address proteomics and metabolomics opportunities are electronically driven chip technology has the potential to reduce sample preparation requirements and accelerate the CEP.

<unk> stepped from hours to minutes.

<unk> cellular Gaba can serve as an activity of tumor cell proliferation, and as an immune cell suppressor.

This understanding provides a new avenue to target cancer cells pharmacologist. Please.

We're excited to be able to showcase the breadth of our platform to the scientific community, who will provide more detail on our conference presentation in next quarter's earning call in summary, I am encouraged by customers adoption of our technology and the enthusiasm we're seeing across our end markets for real time analytics at the point of need with that I'll turn the call now over to Joe for more details.

On our financials.

Thanks, Kevin revenue for the first quarter 2022 was $8 3 million compared to $5 5 million in the prior year period, representing growth of 50%.

Handheld revenue from our <unk> 900 product was $4 5 million, an increase of $1 2 million compared to the prior year period. This included additional device placements and higher service revenue.

Desktop revenue from our rebel and chip products for the first quarter 2022 was $3 6 million compared to $2 1 million in the prior year period, representing growth of 68%. This.

This was primarily due to an increase in device placements as well as an increase in recurring revenues.

Recurring revenues consisting of consumables accessories and service revenue for the first quarter 2022 was $2 5 million compared to $1 4 million in the prior year period, representing growth of 73%.

This increase was primarily driven by both service and consumable revenue related to rebel kit sales.

Our installed base grew to 2018 units with 83 devices shipped during the first quarter. This.

This includes 63 amex, neither way handheld devices <unk> rebel desktop devices and five ZIP chip interface desktop devices.

Gross profit was $4 1 million for the first quarter of 2022 compared to $2 9 million for the prior year period.

Gross margin was 50% for the first quarter 2022, as compared to 52% for the prior year period.

We expect gross margins to expand through the back half of the year as we leverage our fixed investments and we continue to expect gross margins to be in the mid <unk> for the full year 2022.

Total operating expenses for the first quarter of 2022 were $13 7 million compared to $8 7 million in the prior year period.

The increase was driven primarily by head count expansion across our business and stock based compensation as well as expenses related to marketing activities consulting and travel.

Net loss for the first quarter of 2022 was $9 4 million compared to $6 1 million in the prior year period.

We ended the first quarter of 2022 with approximately $223 million in cash and cash equivalents.

In addition, we had approximately $15 million of debt outstanding.

We have a strong balance sheet and remain prudent with capital.

We believe we are well capitalized to execute on our strategic product and commercial roadmap.

Looking ahead for 2022, we continue to expect revenue to be in the range of $52 million to $55 million representing growth of 23% to 30% over full year 2021.

Within a range, we expect desktop growth relating to biopharma in bioprocess applications to approach two times to growth rates of the overall business in 2022.

We continue to expect seasonality to be consistent with prior years, reflecting the impacts of the U S government year end purchasing cycle.

Number 30, and typical year end pharma and biotech spending in the fourth quarter.

As a result, we expect revenue for 2022 to be similar to our cadence of 2021 with approximately two thirds of revenue to be recognized in the second half of the year.

At this point I would like to turn the call back to Kevin for closing comments.

Thanks, Joe it's been an exciting start to the year as we advance our product capabilities broadened our bio analytics platform and deepen our customer relationships. We look forward to updating you on our progress throughout the year. One final comment I'm excited to announce that we are holding our first discovery day for the Investor community on June 15th at our Boston headquarters, we will.

Show case, our technology products and platform will also highlight key applications in recent scientific presentations as well as conduct some hands on product demos. This is an in person event and I look forward to sharing our team's expertise and enthusiasm for our mission to democratize mass spec in critical life applications with that we'll now open it up for.

Question.

Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Question comes from Puneet <unk> with SBB Securities. Your line is open.

Yeah, Hi, Kevin and Joe Thanks for taking the questions.

First one is on rubble as you pointed out desktop placements were strong and youre pointing to two X the growth for the bio processing side.

And the guide.

Trying to understand.

I appreciate the one thirds of the devices are going into cell and gene therapy accounts, but maybe can you.

<unk>.

Help us understand how are they utilizing the devices today, where are you seeing the what which applications you are seeing the most pick up and.

Should we think about more rebels boxes placements versus the.

The consumable pull through or.

Should we expect acceleration on on both of those fronts as you go and further penetrate these accounts.

Yes, sure happy to expand on that Puneet, Yeah. We're pleased with the progress rebel spend on we have as you know a good penetration.

<unk> and to large top pharma, but also small Barbara and CD mode. As we go I think a common theme before we get into some of the momentum a common theme. It's cell culture media measuring spent culture media with time course data.

And with the ultimate goal of being able to actually change their feeding schedule and helping to optimize and accelerate the bioprocess. So we're seeing that the placements have been we've been following that we've described before is penetrate and radiate right now we've got a great foothold in the large accounts and we're working to go across because each.

Comment on the consumables. So obviously our product is appointed lead product. So people like to have had it have it needs.

We remain committed to about one a month of the consumables, which you've been seeing and then we've got efforts underway to try to drive that higher.

Okay got it and then just.

Following up on the.

The commercial organization and rebel you've expanded meaningfully there and more further commercial organization expansion as you pointed out to folks.

Folks in the organization by year end.

Can you outline for us.

What changes in the strategy that you are taking.

To drive both.

In U S and O U S and where should we.

How should we see the contribution from international growth as well as rebel continues to expand and also it seems like the comments that you made on Australia and UK.

900, and also continues to grow there. So maybe just help us understand how should we think about the international growth overall.

Yeah, absolutely so international for Us historically last year as well as in Q1, its around 20% is outside the Americas.

From the revenue perspective, it is an area, we're investing quite a bit, particularly on the desktop side the commercial side.

So as you think about our goal of going from 60 employees that we discussed on our last call to 80 by year end.

These are more weighted to folks on our desktop side. We are we are having good success, though outside the U S with our with our handhelds as well and we've been broadening both our direct sales capabilities, but also our international channel and as we discussed last time in important areas for Biopharma sartorius.

Korea for instance has been stood up and is now online representing one in APAC.

Okay, Great and just last one briefly if I could.

That you would point out too on supply chain, obviously, that's been a key question.

And inflationary pressures so just wanted to check.

It seems like you guys have things under control and if you can maybe help us understand time from order to delivery and any changes there.

Obviously you have.

<unk> U S Army contract, that's coming delivering in the second and third quarter any change in expectations. There. Thanks, guys I appreciate the questions.

Sure no problem.

Maybe touching on the U S Army contract Nothing's changed there as far as the remaining units being delivered in Q2 and Q3.

On some of the inflationary impacts.

I feel like we have it under control.

We are seeing additional costs related to inflation.

Inflation and supply chain is hampering our margin expansion in 2022.

As we balanced the pricing of our products and our end customers and some of the potential volume leverage with the increase in revenues, but specifically on cost inflation in our supply chain impacts we are experiencing some direct and indirect impacts indirectly.

Having to pull resources outside of the purchasing team, mainly R&D to assist with vendor qualification redesigns.

Sure we have adequate supply of those key components on the direct side, we're seeing some delays on our supply chain with vendors.

Their approach is sort of communication and the lead times and deliveries, they're picking our build plan timing within 2022, we feel like we have it under control to be able to deliver.

<unk> is a high quality product so in essence cost of materials cost of shipping expediting and pass through costs on some of the labor inflation of factors within our supply chain and we're very vigilant on trying to manage and monitor those best we can.

Great. Thanks.

Welcome.

Okay.

Thank you. Our next question comes from Dan <unk> with Stifel. Your line is open.

Good morning, guys. Thanks for the questions Kevin on the rebel can you just talk a little bit about the workflow intensity that you are seeing when you look at the various project types, maybe particularly as it relates to cell and gene I think the assumption there is that those guys have their instruments.

And then the level on a frequency thats beyond the other modalities so.

You're seeing that play out once accounts get up and running.

And is there any reason why I think the 6% to seven systems that you mentioned going this LNG labs this quarter wouldnt be accretive to the pull through average once once they get fully scaled up.

Yes, yes, sure how did you get so yes, we see lots of excitement for the applications for mobs, but the advanced therapy cell and gene are particularly exciting and as we've said we view it as a.

It's an area that as we penetrate it's really unlocking a large portion of the total addressable market and thats because the typically being done in a more smaller batch more of a personalized matter. So so we watch that metric we try to foster it with customers.

I think we're seeing good utilization across the board across the applications, but do have a lot of excitement for the future of the cell and gene area.

I would say across our installed base, we see around that one month utilization rate once the customer is up and running and it can take a little bit for a customer to be productive.

And we think it's very important as well to really showcase what can be done and that's why we announced recently a new partnerships with CPI and ambac for those reasons.

Okay, just to push a little further there. So <unk> is the average that you are finding which is pretty consistent with other periods and that's obviously an average of highs and lows are you finding that the high or the <unk>.

LNG companies the ones that are coming in above one and therefore lifting the average and that's offsetting the newer guys or the different modality.

Yes, I think Dan that we're seeing a range and in some cases their cell and gene customers, but also in a few cases on the mab side.

So we're seeing a lot of it gets to the utilization of the workflows of the end customers and you're right over time, we may see cell and gene trending more consistently above the average but.

That will continue to play out in the coming quarters and year.

Okay.

Okay, and just maybe on the.

Yes, I hear you. Thank you for that detail Joe.

Okay, and then just on the placement total for the year do you feel like the reasonable expectation on mix between new and existing accounts as to sort of stay at that 50, 50 split or is there a reason why maybe once one one half of that equation would change a little bit in the back half of the year.

Continuing to play out, but we are busy in new geographies, we are busy working to get new accounts.

Captured so so we'll see what the mix is but I think that's it.

Been reasonable over the last three quarters.

Yeah, Okay I appreciate it guys. Thanks.

No.

Thank you. Our next question comes from Max.

The Sochi with Cowen Your line is open.

Hi, This is Stephanie on for Maxim. Thank you. Thanks for taking the question.

Well first of all have you received any feedback from your customers. Following the updated FDA draft guidance.

Our team development in gene editing in late March heavier conversation today potential level about their problems the conversations we've had.

12, and 18 months ago, and what are the key factors determining a couple of quick questions to adopt or hold off on the project up a rapid analyzer.

Yes, sure happy to give some color as Stephanie.

I think our conversation has obviously continued to evolve since the launch of the product that we're very much past those early adopters with about 115 boxes Varian.

I think that what really drives folks is that that quest for more analytes more information and as we said in the past, we really do it that the market for numerous reasons some regulatory perhaps but there is that there's a strong demand for <unk>.

For analytes and information and we call it that bioprocess for play out. So I think over time, we have been experiencing folks that are that are interested in having more frequent measurements of data the conversation in the early days started with.

Normally send this out to the lab and I do have that kind of time 0.0 at the beginning of a bioreactor run, but with your value proposition in my knowledge that these analytes are so important to the cell cycle why shouldnt time that measure it frequently throughout my call. It two week daily Rob and process development. So I think our conversation now is Ella.

<unk> two well what can I do with that information with with with higher frequency measurements and that's why we are working to make sure. We have the right data integrations. When we said in the past the sectorial since the platform that we can allow us to push it and so we can have folks be able to see the screening analytes and be able to visualize that and pull insights.

From that so conversations continuing to evolve there.

We've seen good strength in the adoption and willingness to want more info.

Got it thanks for that color.

And just a follow up you highlighted your objective to broaden your bio analytics platform and it was great to hear.

With your customers.

<unk> platform, a net positive feedback.

<unk> platform can you give us a sense of how you plan to enhance that are your customers asking for any concern.

Perfectly.

Yes, we're very excited that our platform is pretty broad in its capability. So we've got with our ZIP chip really a focus in the product quality attributes and giving those in a timeframe that can be 20 times faster than legacy liquid chromatograph.

And then with our with our rebel very excited that outlined we're giving you on the process attributes. These key process parameters that we were able to zoom in and again things that are so critical to sell cycle things that are informative of their predictive models theres multiple institutions developing in the analytic panel being so enabling so we're continuing to work.

With customers to build that platform out built those workflows out we do have a strong roadmap there to look at increased analyte panels as we've said before other accessories data integration that can help with that entire workflow.

Got it that's helpful and last one for me.

On new <unk> and away from the applications for iOS for bipolar.

Because that's opened up the opportunity for Amex.

And then to law enforcement.

Local level are you seeing any of that.

One more thing budget here in 2022.

2021 or 2020.

Thus far we I don't think were seeing anything measurable on the change in budgeting, we put a few things in the in the script there because the applications that we're chasing here across state and local law enforcement federal government other organizations around counterfeit pharmaceuticals and analyst.

<unk> and the.

To combat the opioid crisis those seem to be remaining a high priority for our customers. We are seeing adoption of our products across international but a lot in our.

U S state local again, because this problem is affecting in killing so many so I think things like our iOS app things like adding analytes.

Makes it easier for customers to ensure they are partnering with the right organization that theyre, putting their capital dollars to work because we're giving them new features and functionality that are responsive to their job things like the iOS app, we like a lot because it connects more intimately to the customer and their workflow, which we expect to be able to keep broadening.

Overtime.

Got it thanks, so much for that color and thanks again for taking my questions.

Okay.

Thank you. Our next question comes from Brian Weinstein with William Blair. Your line is open.

Hey, guys.

Good morning, Thanks for taking my question.

So.

You said that Youre seeing.

Unwillingness to engage sales cycle or anything else on that.

Various governments on the handheld side.

Okay.

Yes, sure happy to add some some color there in the Biopharma environment, we're not seeing really I would say any any negative impacts I would say again that we see that the driver of advanced therapy. Some of the more complex modalities. It is making it clearer and clearer to individuals.

They need more analytics more information. So we're seeing a lot of engagement, obviously are product driven by rebel on the desktop side has been has been growing pretty nicely over the quarter.

But it's still early days for US we are well past the early adopters, but we haven't only about 115 or so out there. So there's a ton of sockets and runway I would also say that there are products really fit well into our customer's existing workflow, we're not meeting a company to build out a new facility or a new line or add.

Infrastructure capabilities it anyway.

<unk> box that has a network connection a simplified plug that it sits right next to their bioreactors in their labs and their biology labs today. So.

I wouldn't say, we've seen any measurable change in their engagement for our handhelds, a little bit like I, just mentioned and Stephanie.

Applications were chasing the metrics continued to be just staggering.

<unk> overdose deaths. The number of counterfeits that are that are out there amongst and causing harm to community. So we continue to see a priority for our products there throughout this time.

Got it thank you.

Next question.

Various forms for but.

I just wanted to revisit it here so the Tam expansion that you guys talked about was a big part of the IPO story continues to be a big part of the story today right.

I guess.

There's probably no reason to revisit those numbers that you've put out previously, but I just wanted to kind of better understand that go back through how much of that Tam expansion is based on the capabilities that you're adding to your technology versus what you've needed from kind of the underlying markets to grow themselves.

On the point on the part of that that it is related to your technology you guys have talked about kind of major product releases.

And a couple of years I think was 24 to 36 months so.

Can you go through.

Without giving obviously any kind of competitive information you don't want to give out.

Should we be thinking about for for what kind of major product releases and technology advances that we should be thinking about over the next year or two that kind of leads into what that Tam expansion looks like does that all makes sense. Yeah, yes, yes. It does you're right I mean, we think there is a sizable tam today for the products we have.

And today.

But you're right we've shared and discussed at length in the past that we see that Tam broadening quite significantly a lot of it is with that tailwind of cell and gene therapy and getting our products adopted at these early stages as well as that expansion.

And without going into all the details you know the advanced therapies are growing quite a bit.

Having multiple increases and there's a lot of.

Need in this space for technologies to address that and we see.

<unk> really beginning to do that and that's why we highlighted that about 30% of our placements here in Q1 about 25% we reported last time overall.

We're in that space, because we see that as an important driver.

And again driving that thirst for analytics, which we think we're well positioned to deal with both ours and our rebel.

From a roadmap standpoint, yes, we're pretty innovative company as you know we're very vertically integrated.

<unk> to have a constant cadence of releases of of things.

Things like analyte panel expansion software integrations, but then more major more major releases as well some of it more incremental we announced just a few of the other day and many last year and accessories and data integrations on the rebel and handheld and we have many more plans for this year.

The wired side, yes, we've talked about products that developments underway things like level online the ability to connect the rebel more seamlessly to the bioreactor and avoid the manual pipe heading stepped we think it's.

<unk> to be driving with groups like GPI and the ambac the need for frequent measurements while we.

Lay the foundation of the hardware and get that released for rebel online upcoming in the timeframe you mentioned and we also talked about that there's a long runway and what we can do on the handheld really shrinking those devices down and getting those devices to be significantly smaller and ultimately spawning an upgrade cycle for the thousands of <unk>.

Devices that we have in the field. So we have that and we have I would say a considerable robust roadmap in general around the bio analytics platform that we can't get into too much here today, but it's again around adding analytes and being part of the established workflows there.

That's a great answer thank you for that and then one quickly for Joe Joe I think Dan was asking the question about the consumables pull through there. It looked like it was about 30% of total revenue. This quarter. We've typically talked about with you guys about that being closer to 2021 'twenty, 2%, how do we think about kind of what the full year. It looks like can you just tell us.

Your thoughts within the guidance on <unk>.

And what that recurring revenue should be kind of trending at 30% from Q1 reasonable.

Absolutely.

Just to revisit a bit so for 2021, it was 19% on a full year basis Youre right. It was 31% here in Q1, which was up from 27%.

In 2021 Q1.

It is our lightest quarter from a top line perspective, so I'd expect that percent to be higher as the installed base is growing but when you look at it from a full year perspective, I think to start with the two probably in the low 20% range is probably more reasonable than the 30% as we dream and think longer term in the building installed base, but how does it start with a three in the future.

It is absolutely something we're targeting.

But not here in 2022 likely in the low twenties from a percent overall if that's helpful.

Very helpful. Thank you guys.

Youre welcome. Thank you.

Thank you and there are no other questions in the queue I'd like to turn the call back to Kevin for closing remarks.

Yes. Thank you all for your time and have a great day, we appreciate the questions and your participation.

This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

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