Q4 2022 Olink Holding AB (publ) Earnings Call
Good morning, ladies and gentlemen, thank you for standing by welcome to the all in proteomics fourth quarter 2022 earnings 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.
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Please be advised that today's conference is being recorded.
I would now like to turn the conference I'll, let you speak of host today, Jan Medina, Vice President of Investor Relations and capital markets. Please go ahead Sir.
Thanks, Laura and good morning, everyone. Thank you all for participating in today's conference call on the call. We have from old link we have John Hymer, Chief Executive Officer call, Raymond Chief Commercial officer, and off Great Young Chief Financial Officer.
Earlier today <unk> released financial results for the fourth quarter ended December 31, 2022, and a copy of the press release and an updated corporate presentation are available on the company's website.
Before we begin I'd 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 on form 20-F Commission final number 001 dashboard zero to 77 filed with the U.
The Us Securities and Exchange Commission on March 17th 2022, 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 our remarks or responses to questions management May you mentioned, some non not ifr S financial measures.
Conciliations of adjusted gross profit and EBITDA constant currency revenue growth and certain other non <unk> financial measures to the most directly comparable <unk> measures are available in their recent earnings press release available on the company's website.
This conference call contains time sensitive information and it's accurate only as of the live broadcast today February 21, 2023, olin's 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.
Sure.
And with that I'll turn the call over to John John .
Thank you John and good morning, everyone and thanks for joining <unk> fourth quarter 2022 earnings call.
I'll begin with a review of all linked 2022 accomplishments, including recent operational financial and strategic milestones.
Ill turn the call over to Carl for details on our very strong commercial results and guidance and then Scott will discuss the company's financial performance.
Q4 was another strong quarter in 2022 was another strong year for OLED, our performance would not be possible without the enormous talent and drive of the entire organization.
Only met or exceeded every major corporate coal and put even more distance between us and competitors.
Through science and customer based market development product design and industry, leading execution only kits become the leader of the modern proteomics field.
Creating new insights at unprecedented scale across the entire research and development continuum.
Overtime, we expect O&M will enable proteomics to define a new approach to treating disease, providing new options for patients and all healthcare stakeholders.
Proteomics is quickly becoming the most relevant ohmic for researchers and drug developers worldwide.
In the fourth quarter, we delivered revenue of $57 9 million, representing 33% growth growth over the fourth quarter of 2021.
While full year 2022 revenues was $139 8 million or 47% increase compared to full year 2021.
Once again the quarter was highlighted by strong growth from explorer kits kits revenue overall, demonstrating strong progress in our product mix goes.
Other quarterly highlights included profitability.
The record number of explore externalization.
Continued strong performance in the lower mid Plex markets by signature Q1 hundred target.
We continue to see an expansion of proteomics workflows within customer accounts throughout the entire OLED portfolio.
This includes explore users adopting the signature and target platforms as their work demands as well as low to mid plex user moving towards high Plex projects.
As we showcased on our Investor Day last November Q4 was not simply about <unk> financial performance, but also about the innovation.
We continue to make progress in expanding the number of validated assays and by the end of 2022, we had a library of more than 5000 carefully validated biomarker targets, surpassing an important internal R&D milestone to our goal of increasing throughput and simplifying workflows with the.
<unk> platform.
Also in Q4, we launched all link insight and open access platform for the global research community and OLED customers to share data and insights that will accelerate the value created by proteomics.
We also launched a link flex a made to order product that allows customers to create more protein panels from our library, while offering both relative and absolute quantification.
After achieving this significant milestone milestone of 1000 published research studies in November the number of PAA based publications continued to increase with the total now reaching more than 1100, covering every major therapeutic category from research and discovery to the downstream.
Nickel settings.
One such publication from Professor Charlotte two <unk> group in Amsterdam provides a striking example of large scale biomarker discovery can be used to identify and validate protein signature using one scalable technology in this case P. A.
In a study looking at different stages of <unk>.
Navy dementia and healthy controls her team characterized CSS proteomics of people using 11, OLED target 96 panels.
The discovery phase identified over 100 proteins dis regulated in AAV.
And with data driven modeling identified eight protein signature on the 19 nine protein signature both discriminating from known dementia with strong area under the curve.
12 proteins.
<unk> selected to construct accustomed biomarker panel that showed high performance in a validation study with an AUC of <unk> 95 for <unk> versus controls and <unk> 79 for <unk> versus non <unk> dementia.
With incredible challenge that Alzheimer's disease poses to human health, new advances such as this will be needed to improve outcomes.
In summary, <unk> continues to drive both the science and innovation on proteomics delivering for customers and patients across life sciences and around the world.
And we look forward to continuing this tradition in the months and years ahead.
I'll now turn the call over to Carl to provide a few more details on the quarter Carl.
Thank you John .
First I'd like to thank the entire commercial team for their incredible effort, yet again during the fourth quarter on the entire year your efforts and results have been truly remarkable.
For the quarter fourth quarter growth was driven by strength broadly across our customer base with a high level of interest from both academic and Biopharma customers.
We continue to see significant interest from service providers for both explore and signature.
Our presence with service providers is still in its early innings. We believe this growing interest bodes very well for the future.
Regarding the year end spending environment during the quarter, we noticed that at the end of year budget flush environment was not quite as robust as we had seen in previous years. However, the appetite for proteomics spending in OLED, specifically continued to be strong leading us to believe that in our segment of all mix spending remained.
Priority for customers, even as headwinds arose on a macro basis now.
Now to the specifics of the quarter's results.
Driven by the robust performance of our kit business and explore platform total revenue grew 33% and 47% in Q4 and full year 2022, respectively. In Q4 of this total was comprised of $36 million in kit revenue 23.4.
And analysis services revenue and $3 9 million in other once again mix strongly improved quarter over quarter and for the full year, reaching 53% and 39% for Q4 and full year of 2022, respectively.
Overall kits revenue doubled in 2022 versus 2021.
Other revenue totaled $3 9 million in Q4, 2022, which incorporated reduced diapers Sarah revenue as it focused on internal old link R&D activities, rather than external sales.
For full year 2022, other revenue was $11 7 million up 48%.
Total explore revenue of $43 2 million or 75% of our total revenue in Q4 and on a trailing 12 month basis represented 71% of total revenue we doubled explorer externalization in 2022, adding 12 in Q4 alone and 23 in the <unk>.
Second half, reaching 52 by year end 2022.
Q4 explore externalization is where the most ever during a single quarter. These installations in aggregate represents nearly $1 1 million in annual sample volume potential and we achieved roughly 800000 on average customer pull through during the 12 months ended December 31 2022.
<unk>.
We also delivered 28, new signature instruments to customers in Q4 and more than tripled the installed base during 2022, reaching a total of 91 by the end of the year signature adoption continues to show our strength in the mid and low plex segments with uptake by new and existing customers. We are all.
<unk> seen an increasing number of institutions that now have multiple signature instruments, which bodes well for 2023 prospects.
In addition to the strong performance from both signature and explore in the fourth quarter. We also introduced the OLED insight and OLED flex, which allow for a more customized proteomics research process and both addressing eager customer needs.
We view continued product development like this to be a key differentiator for all link as the leader of the modern proteomics era and.
In addition to continued investment in our internal product development pace and capability. We are also actively monitoring external investment opportunities, including bolt on M&A to augment our antibody antigen development and supply chain capabilities.
Were focused and disciplined in our evaluation of external opportunities and we believe it is imperative to find a partner who shares all linked to cultural commitment to innovation and value to customers.
Vesting and talent remains a top priority in 2022 as well we started the fourth quarter with 548 employees and reached 582 upon entering the new year, including 208 full time employees on the commercial team.
Lastly, as you recall, we provided 2023 guidance just over a month ago and we are reiterating that guidance today, we expect full year 2023 reported revenue to be in the range of $192 million to $200 million representing growth of approximately 37% to 43% over two.
'twenty two.
In 2023, we expect another year of strong execution and the sizable on expanding proteomics market that offers significant runway for all links growth.
Now ill turn the call over to Oscar to provide additional financial.
Thanks, Karl and Hello, everyone.
As we announced last month revenue growth was strong once again in the fourth quarter of 2022 up 33% on a reported basis and up 37% on a constant currency basis.
For the full year 2022 reported revenue growth was 47% in constant currency growth.
53%.
We continue to invest in line with our strategic plan reporting adjusted EBITDA, a positive $14 9 million for the fourth quarter of 2022 as compared to negative $1 4 million for the fourth quarter of 2021 full.
Full year adjusted EBITDA was negative $3 9 million in 2022 versus negative $18 5 million in 2021, clearly demonstrating the inherent leverage in our business model.
As Carl mentioned at the end of Q4, we had 52 externally placed revenue generating explore installations, even with a significant number of new externalization into fourth quarter and second half of 2022.
Customer pull through over the last 12 months was a strong eight hundreds.
And quarter to quarter pull through which could be further impacted by our customer spending seasonality overall, though we anticipate continued growth over time.
Driven by very strong performance from explorer as well as targets that total kits revenue for the fourth quarter doubled to $30 6 million as compared to $15 3 million for the fourth quarter of 2021 analysis service revenue for the fourth quarter of 2022 was $23 4 million versus $23 7 million for the <unk>.
Fourth quarter of 2021 in line with <unk> goal of driving product mix toward kits and.
In addition, while year over year analysis services revenue declined 1% in Q4 2022 on a reported basis. It grew approximately 30% when adjusting for the completion of the <unk> project.
The mix of kits versus analysis services continued to improve quarter over quarter from 42% of total revenue in Q3 to 53% of total revenue in Q4 with the kits mix for all of <unk> 22, representing 39% of total revenue increasing from 28% for the full year of 2021.
Led by sale of signature Q1 hundred instrument. Other revenue was $3 9 million for the fourth quarter as compared to $4 7 million for the fourth quarter of 'twenty. One full year 2022 AD revenues totaled $11 seven versus $8 million for 2021 as Karl discussed other revenue was impacted by ACA Sarah in our strategic.
Focus on internal OLED R&D activities, rather than external sales.
By geography revenue during the fourth quarter of 2022 was 30 to $31 9 million in North America $20 million in EMEA, including Sweden, and $6 million in China, and rest of the world, including Japan.
Year over year over year over year revenue in EMEA decreased 1% for the fourth quarter on a reported basis and grew approximately 40% when adjusting for the completion of the UK Biobank project.
By geography revenue during the full year of 2019 was $6 to $6 5 million in North America at $57 7 million in EMEA.
$15 6 million in China, and rest of the world.
Consolidated adjusted gross profit was $44 million in the fourth quarter of 2022 as compared to $26 $5 million into fourth quarter of 2021.
Full year 2022, adjusted gross profit totaled $97 9 million.
Versus $61 3 million for 2021.
Adjusted gross profit margin for kits, plus 8% to seven 6% for the fourth quarter of 2022 as compared to 85, 1% for the fourth quarter of 'twenty one.
Full year 2022, adjusted gross profit margin for kits was 88, 4% versus 86, 4% for 2021.
Q4, 2020, adjusted gross profit margin for analysis service was $6 to $6.
9% as compared to 52% in Q4 of 2021 the increase in the allowed US the service margin in the fourth quarter of 2002 was due to the completion or did UK Biobank project earlier in the year and continuous improved operational efficiency and service lab.
The services team has performed tremendously well over the past couple of years with the delivery of the UK Biobank project and the continuous efforts to improve.
<unk> and operations.
As we enter the fourth quarter service margins reverted to more normalized levels observed historically.
Full year 2020, adjusted gross profit margin for analysis services was 61% versus 57, 3% for 2021.
Adjusted gross profit margin for out there was 46% in Q4 of 2022 as compared to 34, 1% for Q4 of 2021.
Total operating expenses for the fourth quarter of 2020 to $34 9 million as compared to $33 1 million for the fourth quarter of 2021.
Full year 2022, total operating expenses were $125 1 million compared to $102 9 million for 2021. The increase in full year 2022 was largely due to the continued investment in the <unk> commercial organization research and development and additional public company costs.
Operating expenses are broken out as follows.
Selling expenses for Q2 of 2022 were $13 $4 million versus 12 million for Q4 2021 administrative expenses for Q2 2009 to about $13 9 million versus 11 8 million for Q4, 2022, and R&D totaled $6 6 million and $8 7 million.
For Q4, 2022, and Q4 2021, respectively.
Other operating loss was $1 1 million in the quarter as compared to underwrite.
600000 in Q4 of 2021.
Net income for the fourth quarter was $5 4 million as compared to a net loss of $8 million for the fourth quarter of 2021.
Net income per share was <unk> <unk> compared to a loss of <unk> <unk> per share for the fourth quarter of 2021.
Net loss for the full year of 2020 was $12 9 million as compared to a net loss of $38 3 million for the full year of 2021 net loss per share was <unk> 11, as compared to a net loss per share of <unk> 43, and the full year of 2021.
We ended 2000 $20 million to $75 million in cash and cash equivalents. After the close of the fourth quarter. We successfully executed on a private offering that raised $95 million with brought our cash balance following the financing to more than $170 million with.
With respect to our cash balance we will remain focused on disciplined with the use of the balance sheet and expect to operate within our profitability guidance included in our plan is the acceleration of investment in several internal strategic initiatives.
Such that the further expansion of our protein library and assay development. Additionally, we will continue to evaluate external opportunities to augment our capabilities to achieve our long term strategic goals.
As we enter 2023, the external opportunity set continues to evolve at both quality asset availability and pricing seeming to be more reasonable than in prior periods.
As with our previous investments, we tend to remain focused on delivering value to our customers and shareholders over time with a continued discipline around the use of our balance sheets.
Now to our guidance when considering the continued presence of multiple macroeconomic headwind. This year OLED expect another strong year.
Strong year of growth with industry, leading growth in 2023.
We expect 2020 state full year reported revenue growth to be in the range of $192 million to $200 million representing growth of approximately 37% to 43% on a reported basis and roughly 38% to 44% on a constant currency basis.
OLED <unk> revenue in 2010 feet.
We'll continue to progress along a seasonal pattern similar to 2021 that is weighted to the second half of the year and fourth quarter specifically.
In addition, <unk> believes it will turn to profitability in <unk> its been three as measured by EBITDA, excluding share based compensation expenses.
Looking further at all <unk> only just started penetrating the proteomics market segments. It operates and from high to low Plex and his tremendous headroom for continued strong growth.
I'll now turn the call over to John for his concluding remarks.
Thank you Oscar and thank you Carl and Jonathan.
<unk> shipped in proteomics continues to grow benefiting from increasingly broad adoption across flex and across customer segments and across the globe.
At this point, we'll open up the call for questions operator.
Thank you, ladies and gentlemen, as a reminder to ask a question you will need to press star one on your Touchtone telephone.
To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
And our first question coming from the line of <unk>.
So now with SBB Securities. Your line is now open.
Yeah, Hi, John Oscar Thanks for taking the questions. So first of all congrats on the quarter and impressive 2022, especially with respect to the explorer installed so maybe if I could start there.
I think the important question given the growth and explore installs that <unk> seen in the second half.
How should we think about.
The cadence of those installs this year I think you've commented in past obviously these could be lumpy. It takes times to get these externalization is completed so maybe just talk to us about that and how should we think about.
The cadence of installs and explore installs for 2023.
Hey, Puneet this is Karl I'll take that.
Yes, so yes, we continue to see.
Good pipeline, we continue to see demand I think as you indicate there will be some seasonality.
Located with that but but we expect to see the explore installed base continue to expand.
Clear that there is demand out there even though as noted we have over 1 million samples worth of external capacity now for explorer in the marketplace, which is tremendous.
But we're continuing to see a.
Sort of broad interest across all of our segments service providers academic biopharma et cetera to continue adopting the explore platform. So yes, you should expect to continue seeing.
<unk> of externalization.
But yes, it will not be as I'd like to say linear.
We'll see.
A lumpiness a little bit of seasonality.
Okay.
And then.
You know as these explore installations have happened I mean, how should we think about that 800000 pull through number usually when instruments are installed or new installation happens there is.
Impact of the average pull through but just wanted to get your sense as to how should we think about the overall.
Pull through number for 'twenty three.
Yes, I think.
<unk>.
We will continue to see I think strong pull through although again I think that number will move a bit tied to seasonality is as just discussed we had a.
A strong surge in the second half.
And then we'll be into our seasonality for this year as well, but but we expect.
Pull through again to remain.
Relatively strong and of course, it'll be it'll be attached largely too.
The total number of installs that we have.
And averaged out over that but I think that last 12 month figure is a good figure to continue to look at to think about.
Pull through overall.
Okay. That's helpful and then.
Last one for me and maybe.
John .
I appreciate the focus is obviously on growth, but you do have flexibility now valuations have come down.
Oscar talked about a little bit about.
Deploying capital.
Can you talk a bit about sort of the focus areas. The progress that you've made so far with.
<unk> antibodies and.
What.
How are you looking at that overall landscape and the capabilities that you need to bring in in order to drive the next explore panel. Thank you.
Sure Hey, good morning Puneet.
No as we said in the past that the acquisition of <unk> has been extremely successful one for <unk> and tremendously important and strategic.
And as we noted in our formal notes here.
We're a bit ahead of the curve in terms of <unk>.
<unk> generating and validating new antibodies to develop new assays to build out the platform in a very.
Accelerated.
Fashion. So yes, we're super excited with the acquisition of <unk>.
<unk>.
It really helps all link progress.
As we discussed as well.
Looking into <unk>.
Further opportunities similar to <unk> to expand our capabilities it could be.
Continued expansion to develop more antibodies, but also on the antigens.
How important the antigens are in particular us we as customers move toward <unk>.
Prospective clinical decision, making where you need to introduce those down to Genesis calibrated to do the standard curves in the absolute quantitative readout for every assay.
And obviously Amsterdam is a very important part in both generating antibodies as well as validating the assays as well so and <unk>.
Also very importantly, what we do so if that gives you any clues in terms of how we're thinking to potentially further strengthening the upstream.
Work in supply chain.
That is essential for what we do.
That is where.
Well, we're basically <unk>.
<unk> most of those efforts.
Yes, and you can plan M&A right. So.
But we're we're definitely thinking along those lines and very excited about the opportunity now since we raised additional capital and.
Our strong balance sheet.
Helpful. Okay. Thanks, guys.
Thank you.
Thank you and our next question coming from the line of Sanjay <unk> with Scotiabank. Your line is open.
Hi, Thanks for taking the questions and congratulations on the quarter and also the year.
Just a couple for me so could you talk about the potential timeline for the library of 5000 auto team, Don if I heard that correctly.
But when that kind of might be available.
Marcellus shale.
Good morning <unk>.
Yes.
We've said.
For some time.
We're super excited by.
A little bit ahead of the curve on what we communicated around developing generating and validating new assays.
As we also said that we were.
We see an ever increasing demand.
<unk> for increasing throughput as well as trying to simplify protocols as much as possible. So.
We are doing amazing development across all of those fronts. We are very very excited internally.
But we are not.
Giving any timelines to date, but.
Do you have to basically stay tuned on that one for now but we are we're very excited where we're at.
Got you and then just one for Oscar was curious it's nice to see very strong underlying growth for your service business on excluding for the UK Biobank project.
Wondering if there might be other kind of largest projects that are in the pipeline that could impact your service revenue throughout this year.
Yes, hi, Sanjay so.
Yes, I'll take that yes, tremendous sort of underlying growth for the service business.
As we look ahead and I think Carl talked about the sort of the.
That's sort of large set of sort of.
Larger sort of cohort studies, there are sort of out there I think we would sort of.
Approached us from sort of a kits perspective, so I mean I find it.
Unlikely to do sort of something into service lab that sort of scale again sort of where we are sort of sitting today. So I think we were sort of looked at it that sort of as a kit business and sort of partner up with.
Other sort of service folks on that.
Got it thank you so much.
Thank you.
Thank you and our next question coming from the line of Karl <unk>.
With Canaccord your line is open.
Thanks, Hey, guys. Thanks for taking my questions. Congrats on the year better than the preliminary results by touch on beyond 'twenty three revenue guidance assumptions impressive range that you'd already reiterating I was wondering if you could just talk about the revenue maybe as a percent of the total for the full year for comparison that was like about 50% for the second half of 'twenty two and then it was.
2% or so in the first half of the year. So obviously, a big swing there and you've covered explore a bit before but how about the dynamics in the mid to low Plex business segment with signature you kind of continuing to ramp and insight and flex building momentum.
Thanks.
Hey, Kyle this is Carl ill take that one so yes looking ahead here for 2023, we expect kits to be that roughly 50% of revenue.
For the year, So we'll continue to.
Shift that mix further towards kit as we progressed throughout the year. So we should see that advanced sort of.
Throughout the year and the.
The mid Plex dynamic, yes, so we saw growth in sort of the mid plex.
<unk> as well which is great.
Signature is a big driver of that we continue to see good demand for signature the launch of the flex product.
It has been I think.
Tremendous.
Create a tremendous potential for us as well as that expands the capability of signature and improves our capabilities overall to serve.
Broader swath of the total proteomics market. So we expect actually to see both continue down a positive path in terms of the.
This shift and and drive towards market and not mix.
Alright, Thanks Carlo is great and then on that note I guess I was curious about the customer reception to flex of our focus both products are relatively similar.
Maybe just thinking about this a couple of different ways first have there been different types of customers or uses for flex and focus and then how does the low plex business line kind of accelerated and then given the introduction of factor or has there been any cannibalization between the two products and maybe like over the long term do you guys see flex, having like a higher ceiling.
Yes, I think they're there.
Different product lines in some way its focus.
As more bespoke product that allows customers to access the entire library.
That we have so that's a little bit of a different use case I think as far as customer.
Youth and development.
Flex is and the purpose is really to make a sort of a much simpler sort of off the shelf type custom product with a library of roughly 200 proteins that are in the sweet spot for what most of our customers launch last key inflammation markers and so on so we.
See that as sort of a more mass market product that has very broad appeal on a very large and existing <unk>.
The market out there so.
I think the.
So the revenue mix will shift over time, certainly more heavily towards flexes it.
I think a great product that just serves.
Big need in the marketplace for high quality.
Mid low plex protein analysis.
Alright, Great and then last one from me on the on the five five K Plex assays that you mentioned a moment ago.
Could you guys just kind of speak to your level of confidence that the lack of commercial available 4500, plex menu is not going to be a headwind.
Like the market share gains as your competitor approaches 10000 trucks this year.
Yes, good morning.
I think what we saw quite clearly last year is that the quality is very important.
You have to be able to trust every assay every data point across every sample that you run to really trust the data to be able to make actionable decisions on that data driving science or research projects forward.
So I think thats a much more important metric.
A total number.
Our total numbers important absolutely do we see.
That need some decided to expand absolutely and Thats why we are investing aggressively.
Focusing a lot on that.
But you have to marry that with data quality. So yeah, I guess the short answer to your question is that.
We think we were doing quite well in 2022 with our current.
Offering.
And we are Super excited looking ahead to continue to expand that so.
No I mean, we feel we feel good where we're at and really trying to.
Meet what we think are the sweet spot of customer demands and unmet needs and.
We are continuing to focus solely on that.
Perfect. Thanks, Sean Thanks, guys I appreciate it.
Thank you.
Thank you and our next question coming from the line of Matt <unk> with Goldman Sachs. Your line is open.
Hey, good morning, Thanks for taking my questions Congrats on the on the year.
Maybe my first question is just a high level on the funding landscape both for Biopharma academic, noting your comments the budget flush in Q4 was not as strong as you expected how do you see the overall funding dynamics for both of those customer segments, playing out in 'twenty three and do you think proteomics in terms of research dollars being spent can detached from.
From any kind of slowdown in funding for the broader scientific community.
Yeah, Hey, Matt, it's Karl I'll take that one.
Yes, I think what we saw in Q4 and I think what we could expect ahead in general is I think more I'd like to call it selective spending.
Theyre still budgets people are still spending, but I think there is a bit more scrutiny on on expenditures and such so.
A bit like we saw in Q4, though however, I think that.
What you see is that customers ultimately prioritize how theyre spending their budgets to the highest value.
That type of research. They can do so I think we feel good about that because I think the as we've seen in our numbers and we see in the marketplace.
The demand for high quality proteomics is very high but for sure.
Again as noted in Q4.
The big Gogo budgets are a few years ago.
A little more constrained than they used to be so so I think that that's what we'll see is.
Yes, it is a slightly more.
So our cautious environment and I think that actually.
To your question about Biopharma and academic I think it's about the same in both cases.
So yes that's.
That's where we see things right now.
Okay. Thank you and then Oscar just on analysis services margins.
The UK biobank rolled off obviously, you had a margin improvement there should we look at that sort of Q4 analysis services margins as being more of a normalized run rate.
For that business and then I think in your press release, you mentioned, increasing lab efficiency can we expect some level of margin expansion within analysis versus as we move through 'twenty three.
Hi, Matt.
I think as I said in the remarks, I think sort of into Q4 as sort of a good mark over our sort of our run rate. This in.
We've driven a lot of efficiency in that business.
Offset some of these sort of extended sort of inflation pressures, but I think sort of where we were sort of in Q4 instead of a good sort of margin for us sort of looking ahead and in that part of the business.
And just one more if I could squeeze it in just following up on <unk> question on explorer installations, as we think about the cadence for 23 should we think about perhaps maybe in the first half sort of higher lows in terms of.
<unk> installations I think they are low single digits in Q1, and Q2 of last year should we think of that coming up a little bit and obviously still still not linear and lumpy, but as we just think about sort of the level of explorer installations first half second half should we think about that first half of being sort of higher lows. When you look at installations.
Hey, Matt.
While we're not providing specific guidance on that but.
The demand has certainly grown over time.
And the pipeline also looks good.
No.
I think we will see good demand throughout the year, but for sure I think it will be.
We will see some seasonality in that demand.
Maybe not to the exact extent as last year, but but.
Yes.
Thank you.
Yeah.
Thank you and our last question on queue coming from the line up that has sovereign with Morgan Stanley . Your line is now open.
Hey, guys good morning.
John maybe to start on the on the kits side of things. Good traction there would you be able to give us a sense for the number of end users for the kits solution today versus say a year ago.
Carl talked about sort of growing traction, but the <unk> and the service providers. So I was just.
Just curious as to get a sense of the breadth of demand across the customer set beyond just academic pharma versus service provider split.
I don't think we are.
Hey, this is Karl I'll take that one we don't have a specific number on the number of actual end users in fact.
To your point, it's actually well beyond what you would count with the number of externalization in our customers because as we see in many cases, even if theyre not a dedicated service provider. They may be a service provider for their department.
Or are there functions. So the technology is reaching many many end users via this strategy, which is what makes it quite a successful one so our reach is.
Many folds broadly beyond the number of external customers, we speak about or signature placements and so on so I hope that helps but it's yes, it's broad.
Got it helpful.
And then on the Amgen Library development effort.
You spoke about either via bolt on M&A or perhaps even internal efforts.
Do you have a sense for just how do you envision that being complementary to your current portfolio or perhaps how customers could use both antibody and antigen approaches together I think that would be helpful as well.
Yes, good morning, Chris.
Yes, exactly at two point and what we stated right I mean.
And against our.
Very important starting point.
To develop high quality antibodies, you really want a full length.
Correctly folded ampligen and that mimics native human biology to raise high call it down to about it too.
And.
That ampligen is used also to purify the antibodies to using them too.
And develop the assay too.
Dilute for example, do the standard curve set the upper lower limits of quantification on the linearity of the assay and so forth and then at the end you're going to use that time to Jonathan calibrate or.
For an absolute quantitative readout and.
As I'm sure you're seeing with explore when you do thousands of samples across thousands of proteins.
Our relative quantification is very appropriate readout you you should I mean, you always compare groups. So for example.
Healthy versus disease, or responder versus non responder, but su.
Walk through our library of products and down towards <unk>.
More clinical use.
Use cases, you definitely need that absolute quantitative readout.
So it is a tremendously important aspect of <unk>.
Protein science.
And as you know when you talk to clinicians they're used to Picogram milliliter, one milligram and later Readouts for every protein.
And Thats, what why antigens are super important all the way from racing anti bodies and developing assays for four high Plex.
But also for those clinical use.
Use cases downstream, so very very important part of everything we do.
Got it Super helpful.
And then John can you just give us a sense for the flavor of customer.
Back on Lincoln site.
Clearly that was a that was an important launch.
I'll highlight that at the analyst day as well just curious as to what Youre hearing from the broader community.
Yes, no thanks for bringing that up.
Yes, we are as excited as our customer base.
The feedback that we're getting are excellent.
<unk>.
Proteomics is very early days as you know and to interpret these large datasets that we now have enabled.
Quite big datasets and complex.
Proteins across pathway and so forth. So it's super helpful too to get too much fast actionable insights.
On top of that.
As I'm sure I mean, we discussed with you over time as well as like one of the most common questions. We get from customers and that also is a very good highlight the early.
Early stage of this field is like do you know the normal concentration of your proteins across your library. So that's sort of where we're at we don't even know what a normal concentration ratio look like and as you know that type of data we have that in our linked insight and our expanding so very exciting and of course.
With a disease that left that we also have included there and we'll continue to expand as well with some dramatic results from <unk>.
Yes aliens group.
And in particular now the first data set around cancer, so extremely exciting to see how proteomics can contribute to for example increased add on the curves in.
In early detection and prognosis of cancer, So yeah all around.
Sure.
And amazing tool, which we get.
Very strong customer feedback on so yes, we're excited.
Thanks, Dave.
Got it and one final one on my end for Oscar If I may just wanted to clarify the comment around so you think Oskar.
You talked about 2021 being a better benchmark for the fourth quarter here. So should we think of revenues closer to sort of the mid 40% range in the fourth quarter versus 41% or so you did in 'twenty two is the right framework.
Yeah, Yeah, as we said in the script sort of 2021, and I think especially with sort of comparing sort of the H one to H <unk> seasonality I think.
Looking at sort of how the year is sort of.
From an operational standpoint sort of sort of 20%.
'twenty one.
Good benchmark.
We look at 2023.
Perfect. Thank you so much.
Thank you.
Thank you and I'm not showing any further questions. At this time I would now like to turn the call back over to Mr. John <unk> for any closing remarks.
Great. Thanks for joining us today and for your interest in level, Inc. We look forward to keeping you updated on our progress and wish everyone. A great day. Thank you so much.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
The conference will begin shortly to raise and lower Johan during Q&A, you can dial star one one.
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