Q1 2023 Bruker Corp Earnings Call
Good day and welcome to the broker Corporation first quarter 2023 earnings Conference call. All participants will be in a listen only mode. So do you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then one on your Touchtone phone and switched all.
Your question. Please press Star then two.
Please note. This event is being recorded I would now like to turn the conference over to Mr. Justin Ward. Please go ahead Sir.
Good morning.
I would like to welcome everyone to broker Corporation first quarter 2023 earnings Conference call. My name is Justin Ward and I Am Burger Senior director of Investor Relations and corporate development. Joining me on today's call are Frank <unk>, President and CEO and Gerald Herman Our executive Vice President and CFO . In addition to the earnings release.
We issued earlier today during today's conference call, we will be referencing a slide presentation that can be downloaded from the events and presentations section of <unk> Investor Relations website.
During today's call, we will be highlighting non-GAAP financial information and reconciliation of our non-GAAP to GAAP financial measures are included in our earnings release and are posted on our website at IR got broker Dot com.
Before we begin I would like to reference brokerage Safe Harbor statement, which is shown on slide two of the presentation.
During this conference call, we will be making forward looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to geopolitical risks and supply chain logistics and inflation challenges.
The company's actual results may differ materially from such statements.
Factors that might cause such differences include but are not limited to those discussed in today's earnings release and in our Form 10-K for the period ended December 31 2022.
As updated by our other financial or other SEC filings, which are available on our website and on the SEC's website.
Also please note that the following information is based on current business conditions and to our outlook as of today may four 2023.
We do not intend to update our forward looking statements based on new information future events or for other reasons, except as may be required by law prior to the release of our second quarter 2023 financial results expected in early August 2023.
You should not rely on these forward looking statements as necessarily representing our views or outlook as of any date after today.
Yes.
With that said, we will begin today's call with Frank providing an overview of our business progress Gerald will then cover the financials for the first quarter in more detail.
And share our updated fiscal year 2023 financial outlook.
Now I'd like to turn the call over to <unk> CEO Frank <unk>.
Thanks, Jeff and good morning, everyone and thank you for joining us on today's first quarter 2023 earnings call.
<unk> achieved an excellent start to the year and I commend our team members globally for their hard work and contributions.
We are advancing our project accelerate high growth high margin initiatives.
Particular focus on the large opportunity in proteomics and spatial biology.
While also investing in operational excellence productivity and our growth capacity for the next 10 years.
Turning to slide four in the first quarter broker posted strong organic revenue growth of 17, 6%.
The robust demand for our differentiated high value scientific instruments in life Science solutions was relatively broad based across the portfolio.
And bookings and backlog for broker have remained strong.
For the first quarter of 2023 brokerage revenue revenues increased 15, 2% year over year to $685 3 million.
Despite currency headwind of minus four 5%.
On an organic basis revenues increased 17, 6% and acquisitions added two 1% to growth, which implies first quarter constant exchange rate growth of 19, 7% year over year.
This included $18, 4% organic growth in our scientific instruments segment.
At nine 7% organic growth in our best segment net of intercompany eliminations.
Our first quarter 23, non-GAAP gross margin increased 70 basis points year over year to 53, 4%.
While our non-GAAP operating margin was 23% an increase of 80 bps year over year.
Our strong performance on the top line drove margin expansion from volume leverage despite our stepped up investments in commercial and R&D capabilities.
The strong revenue growth combined with margin expansion resulted in non-GAAP operating profit growth of 24% year over year in the first quarter.
In the first quarter 'twenty three broker reported GAAP diluted EPS of <unk> 52 cents compared to <unk> 41 reported in the first quarter of 2022.
On a non-GAAP basis first quarter 'twenty three diluted EPS was <unk> 64 cents, an increase of 36% from 49 in the first quarter of 'twenty two.
Our trailing 12 months return on invested capital was 24% a metric that reflects well upon the differentiated broker management process and our focus on disciplined entrepreneurial lithium and organic growth supplemented by strategic acquisition acquisitions of car.
Elementary skills and technologies.
In summary, the first quarter of 2003 was an excellent quarter with revenue growth growth across all broker scientific instruments groups with continued strong bookings as well as ramping investments in project accelerate to that though particularly in proteomics.
Please turn to slides five and six now where we highlight the first quarter 'twenty three performance of our three scientific instruments groups and of our best segment, all on a constant currency year over year basis.
In the first quarter of 'twenty three the <unk> group revenue of $180 million grew in the high teens percentage on a constant currency basis, even without any gigahertz class revenue in the first quarter.
<unk> saw robust growth in revenues across its full portfolio, including <unk> and MRI preclinical imaging.
Notably we received two orders from the United Kingdom for one two gigahertz <unk> for life Science and Green Tech material research.
Please note that we now do not expect any Hertz class revenue in the first half of 'twenty three but after some system final test delays, we now expect three or four gigahertz class on EMR systems and the revenue for the second half of 'twenty three.
For the first quarter of 2023, the <unk> group revenue of $237 million increased low twenties percentage on a constant currency basis with strong life science mass spec and vibrational spectroscopy businesses are teamstaff platform continues its adoption and 40 proteomics.
Etsy proteome makes sense multi omics in the first quarter, we announced key further capability enhancements and had excellent year over year bookings growth.
Please turn to slide six now first quarter.
Broker nano revenue was $210 billion and grew in the low 20% on a constant currency basis.
Lantos academic industrial and Green Tech research at high end semiconductor metrology revenues all remain strong.
Revenues far advanced X Ray and then a surfaces tools also delivered strong growth in the quarter.
Nanos, microelectronics and semiconductor <unk> tools performed well with strong bookings and backlog.
Life Science fluorescence microscopy revenue was up sharply on product innovation and strong research demand as well as our in scope ex acquisition.
Which we did in the fourth quarter of last year.
Finally first quarter best revenues grew in the high single digit percentage net of intercompany eliminations, driven by share gains and strong superconductor demand by MRI OEM customers, but meaningfully constrained by supply chain challenges.
Moving to slide seven and eight now on slide seven we just highlight the two new orders for one two gigahertz <unk> that we received recently.
Interestingly they are both used for structural functional biology in life Science research, but also for a lot of Green Tech and materials research in the U K.
These systems will be placed at the University of Oregon University of Birmingham, which interestingly also both already have broker one point, though gigahertz Anna Marrs.
This is really in U K scientific infrastructure investment.
Only for these two universities that hosted systems that really will be used broadly by the UK scientific community I think it's really quite exemplary.
And it is interesting of course to see the life Science research, but also how much materials bio fuels energy storage research is being done at these universities.
Won't read them, but I draw your attention to the two quotes that are on slide seven there are actually very self explanatory and very good.
Moving on to slide eight.
We are.
Having certain sample prep.
And software innovations that support our same store EBITDA 40 proteomics business.
On the left you see an innovation by hour.
Friends and <unk>.
Agility of our business pre owned mix out of the Munich area, and it's really a new workflow, but it's a very important one they're very compact tabletop bench top system. The beat box is now also qualified for importantly for tissue proteomics for an FSP workflow.
And.
Hey, gentlemen from the University of Copenhagen said this breakthrough now allows us to process large cohorts of ffbe tissues quickly reproducibility and with greater precision and enabling large scale tissue Biobank project.
VB box gives excellent deep unbiased proteomics results for pathology research in this particular case. So this is a important further enhancement of our consumables and automation and sample prep business at pre openings.
Switching to software and support of immuno Peptidolytic switch is very important in research and I think now for the first time has reached the sensitivity and throughput levels, where it could really be used on small tumor biopsy samples.
Collaborate with an external Canadian company that provides the <unk> algorithm before.
AI.
Informed and GPU enabled.
Immuno Pepsi at <unk> for those of you.
As a reminder, immuno peptides are very important immuno oncology targeting they are also not expressed in the genome. So you really have to sequence in de novo and doing that at scale with sensitivity and excellent software is another important area in this case and immuno oncology research.
In the future hopefully also in immuno oncology.
Applications in the clinic.
Right. After this science excursion.
Yeah.
I'd like to go back and summarize broker again made excellent progress and continues to experience strong demand for our differentiated instruments solutions across our portfolio our project accelerate to Lotto high growth high margin initiatives performed well, we reiterate reiterate our intention to ramp investments were accelerated.
Growth, especially proteomics spatial biology, biopharma and applied markets as well as in Semicon metrology.
Very pleased with how well our teams have executed to begin the year as we.
We move through fiscal year 2023, our high backlog continues.
<unk> continues to give us very good visibility and we are raising our revenue growth and EPS guidance for the full year 2023, so with that let me turn the call over to our CFO Gerald Herman who will review brokers first quarter financial performance and raised fiscal year 2023 guidance in more detail Gerald.
Thank you Frank and thank everyone for joining us today I'm pleased to provide a little more detail on brokers first quarter 2023 financial performance starting on slide 10.
In the first quarter of 2023 brokers reported revenue increased 15, 2% to approximately $685 3 million, which reflects an organic revenue increased 17, 6% year over year.
We reported GAAP EPS of <unk> 52 per share compared to 41 in the first quarter of 2022.
On a non-GAAP basis, Q1, 2023, EPS was <unk> 64 per share an increase of 36% from 49.
We posted in the first quarter of 2022.
Our Q1 2023, non-GAAP operating income grew 24% and our <unk>.
non-GAAP operating margin increased 80 basis points year over year to 23% for the reasons Frank's already reviewed.
We finished the first quarter with cash cash equivalents and short term investments of approximately $600 million.
During the quarter, we used cash to ramp selected project accelerate to the auto investments funded capital expenditures complete our majority acquisition in proteomics and fund share repurchases.
In the first quarter of 2023, we repurchased approximately 315000 shares for about $22 million.
As a reminder, in the full year of 2022, we repurchased $4 2 million shares for approximately $265 million, which continues to favorably impact EPS for the full year of 2023.
We generated $87 $5 million of operating cash flow in the first quarter of 2023, partially offset by capital expenditure investments, resulting in $62 $5 million of free cash flow in the first quarter of 'twenty three.
Slide 11 shows the revenue bridge for the first quarter of 2023 as discussed earlier.
First quarter 2023, BSI systems revenue increased in the mid 20% range organically well BSI recurring revenue grew in the high single digits organically compared to the first quarter of 2022.
Geographically and on an organic basis in the first quarter of 2023, our Americas and European DSI revenues grew in the low double digits, while our Asia Pacific revenue grew more than 30% all year over year.
Our rest of World first quarter 2023 revenue declined slightly.
Slide 12 shows our first quarter 2023, P&L performance on a non-GAAP basis.
non-GAAP gross margin of 53, 4% increased 70 basis points from 52, 7% in the first quarter of 2022 benefiting from operating leverage from higher volume higher project accelerated mix tailwind from pricing and foreign exchange, partially offset by supply chain headwinds.
<unk>.
First quarter 2023, non-GAAP operating margin of 23% was 80 basis points higher than the 19, 5% in the first quarter of 2022, driven by solid gross margin expansion and volume leverage. Despite a continued to project accelerate to that investment ramp.
For purposes of your quarterly modeling, we expect our operating expense ramp in the second quarter of 2023 to moderately outpace our revenue ramp and resulted in operating margin declined sequentially from the first quarter of 2023 before expanding again in the second half of the full year 'twenty three.
<unk>.
This is in part due to two gigahertz class <unk> that we previously expected in the second quarter of 2023 revenue are now expected to shift into the second half of 2023.
And with that we also expect our second quarter 2023, non-GAAP EPS to be down sequentially, but up.
Mid to high single digit percentage compared to the 45% non-GAAP EPS, we posted in the second quarter of 2022.
For the first quarter of 2023, our non-GAAP effective tax rate was 27, 8% compared to the 32, 7% in the first quarter of 2022.
Weighted average diluted shares outstanding in the first quarter of 2023, $147 6 million a reduction of approximately $3 8 million shares or two 5% from the first quarter of 'twenty, two resulting from share repurchases over the past 12 months.
Finally, first quarter 2023, non-GAAP EPS of <unk> 64.
It was up sharply by 36% compared to the first quarter of 2022.
Turning now to slide 15, given the strength in revenue and bookings in the first quarter 'twenty, three and our record backlog will increasingly guidance for the year.
Our updated outlook for the full year of 2023 includes raising our revenue guidance to a range of $2 83 to $2 8 billion.
This implies organic revenue growth of 9% to 11% year over year, an increase of 1% from our prior guidance.
We estimate a foreign currency tailwind of about 1% down from the one 5% foreign exchange tailwind we estimated in February .
We expect acquisitions to contribute about 2% to grow up from the one 5% we estimated earlier.
This leads to reported revenue growth in the range of 12% to 14% an increase of 1% from prior guidance.
We continue to expect to deliver solid gross margin expansion and operating profit growth in 2023 with the previously explained transitional decline in operating profit margin.
On the bottom line, we are raising our non-GAAP EPS estimate range by three.
To $2 55 to $2 60 for the full year of 2023, which would represent non-GAAP EPS growth of 9% to 11% compared to 2022 up from our.
Our prior guidance range of 8% to 10% EPS growth.
We project, our non-GAAP tax rate of approximately 28% for the full year 2023.
Other guidance assumptions are listed on the slide our full year 2023 range has been updated for foreign currency rates as of March 31 2023.
To wrap up the brokerage delivered excellent financial improvements in the first quarter of 2023 with strong organic revenue growth continued booking strength and excellent EPS growth.
Hopefully you'll join us in person or virtually on June 15th our planned Investor day to learn more about project accelerate to key initiatives and how do you expect it to drive our medium term growth and profitability outlook and with that I'll pass it back to Justin to start the Q&A session. Thank you very much.
Thank you Gerald.
I would now like to turn the call over to the operator to begin the Q&A portion of the call as a reminder to allow everyone time for questions. We ask that you limit yourself to one question and one follow up.
Operator.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone and if youre using a speakerphone. Please pick up your handset before pressing the keys and towards <unk>. Your question. Please press Star then two and again please limit yourself to one question and one follow up and if you have further questions you may reenter the queue.
Western queue and our first question will come from Derik de Bruin with Bank of America. Please go ahead.
Hi, Good morning. This is Peter on for Derrick certainly appreciate there's a lot of uncertainty, but given the <unk> organic growth upside in the <unk> comp.
Can you just elaborate on your approach to the updated organic growth guidance for 'twenty. Three are you just exercising prudence here by not raising that a bit more.
Yes of course, we are exercising prudence good question I mean.
Early in the years and.
It's a good race.
We think thats prudent under the circumstances.
You also saw that our Q2 sequentially it will be a little bit weaker so it makes sense to us.
Okay and can you just kind of give us an update and remind us how long the orders translate given the nature of products.
What state of the supply chain is it fair to assume that much of the order growth you saw in the first quarter, it's going to convert generally to revenue and 24 kind of how would you frame that for us.
Yes, it very much depends on the product line I mean, some bench top systems of course will still turn into revenue. This year. Indeed, some MMR systems or other floor spending or larger semiconductor metrology systems, where orders came in or additional orders came in and some of that now is actually going into 2024.
But different product lines have different delivery times.
All of them right now have excellent backlog and.
<unk> generally seen very strong bookings again in Q1.
Alright, and then just any update on the status of the loan program in China by chance.
Thank you.
Sorry that was on the loan program in China is that right.
Yes, correct.
Yes, we've benefited from that significantly in orders in Q1, and mostly in our high end instrumentation.
MMR mass spec, but also some.
And.
Fluorescence microscopy and IR systems. So we really we got good orders from China very good orders in China in Q1.
Alright, Thank you guys.
The next question will come from John Bair with UBS. Please go ahead.
Hi, Thanks for taking the question maybe on the previous question there on the backlog would you be willing to provide any color on just what book to bill looks like for the quarter and just the outlook for the year.
Book to Bill again.
Above slightly above one.
15 that the margin guidance, we haven't really changed for the years, that's obviously not in dollars, but in percentages are bitch, so that with less the same.
Got it thanks for taking the questions.
Shorter.
The next question will come from Cunette Tsuda with SDB Securities. Please go ahead.
Yeah, Hi, Frank and really congrats here on the impressive quarter.
Verses, what we're seeing is a tougher backdrop of macro I. Appreciate the book to Bill is over one and that has continued to stay that way and Emr's you are you're booking those in the second half.
But both from sort of Kelud in nano, maybe just give us sort of the visibility that you have.
Where you have more confidence in the portfolio and maybe where the visibility of that a little bit low I mean, we continue to hear the semiconductor headwinds biotech funding and concerns and health care as well. So just overall just give us your sense.
Off the the strong results in your visibility versus the backdrop.
Now not all of that will be additional business. Some of that will probably be pull forward where people in China ordering earlier this year than in other years because of those incentives that have been created some of that does look like additional business that we actually did not necessarily expect this year. So it's a mix, but it's not all the additional.
Business some of it is probably pull forward from later quarters.
Europe was quite strong for us Biopharma, what's client strong I know, there's a lot of rumblings about that.
Semiconductor metrology orders are softening a little bit, but we still have so much backlog that that's actually quite well come because our backlog quite honestly it was too long and still as long so.
As expected with China, better than expected biopharma, perhaps better than expected.
Proteomics doing great and.
Europe Europe also we expected that but not sure everybody else expected that we Europe has really recovered nicely the academic and also European Biopharma <unk> lot lot of a lot of Green Tech research in Europe , but also worldwide, but also in Europe .
So that's kind of.
Little bit different from the traditional more cyclical industrial or industrial research demands.
And of course very welcome.
In terms of China, what's the duration of this.
Program and wondering if you are hearing about any sort of temporary pause and then program if.
If you could elaborate a bit and Gerald if he can provide any contribution on the pricing in the quarter that'd be helpful. Too. Thank you.
Alright, I'll take the first part you know we don't know.
We usually have our independence data or additionally, insights that'd be hungry from reading yours and others.
Gerald you on that type of.
Pricing realizations still significant for us it's about 2050 basis points in offsetting that's about a 350 basis points of inflation impact. So net drag in the first quarter was about 100.
We think that's going to moderate as we March forward into the rest of 2023.
Expectations around 50 basis points of net drag with 2023 next our current thinking on margins Unbar Jesse I'm in Missouri.
Got it alright, that's great. Thanks, guys.
Mmm.
The next question will come from Josh Woltman with Cleveland Research. Please go ahead.
Hey, Thanks for taking my questions a couple for Ya.
Frank I wondered if you could provide a bit more of an update on Tim stops sounds like I had another strong quarter. Just curious if you could provide some additional color on which in markets are the primary drivers to the strengths here and then I think this was a system that.
Had maybe bigger supply chain issues last year, just curious how supply chain and production capacity looks now and just how you were thinking about.
This portfolio as a contribution to growth going forward is it one that could grow 20% to 30% here in the in the medium term 23 and 24.
Yeah, we don't give that granularity.
But the chance of.
And stuff order assess continued to be very strong to your question that's of course.
Various flavors certain types of proteomics from from cell line proteomics tissue proteomics to chemical proteomics, and the fog and the Biopharma industry two plasma proteomics, a single Bell proteomics.
Once you get deeper into proteomics, there's so many different sub fields.
They are actually doing pretty well on a pretty strong and the fact that we have more and more of these we have the team's top platform, but we have multiple product coins product performance point of course different types of software for different applications.
Not to forget of course the targeted.
Tissue proteomics that we do with them all the imaging.
As well as with non team stuff with ourselves gave microscopy product line.
And spatial biology, so in that sense. They are broadly all doing very well and there's a lot of demands.
I think this is the decade or a decade and a half of proteomics somewhere in the early days of that and it's all pretty healthy we're addressing more and more of those points I mean earlier I mentioned and popped. It all makes earlier I mentioned at Thespiae pathology.
Research by Proteomics, it's really.
It's.
It's all good.
Sorry, there was an yeah, we don't break out the growth rates and yes, we did have some acknowledging acknowledge some previous and also some continued supply issue, it's mostly on the chromatography actually but still you need that for the overall system, where muddling through it.
But yes, that's not perfect yet on the supply chain, but we're we're fixing it by all means write wherever where there is other chromatography systems on the market.
So we're sorting it out kind of details that are not that important but.
Okay, but you're not <unk>, you're not wrong with your question.
Okay, and then looking at I guess total portfolio again wondering.
Wondering if you could update us on where the backlog.
Today, and how you're thinking about normalization I think you have previously said something like eight plus months and you would work that down.
Maybe more like six months over two years.
Just curious if that's if that's.
Still thinking about it.
We're sticking to that story [laughter], so that's a reality.
This will be.
Hops over two plus years, but will continue to invest in capacity and supply chain.
While still with meaningful issues is getting better fewer new problems come up some areas are improving and Jonathan but our orders have been strong and then.
Really quite strong in Q1 as well so so that the short answer is greater than eight months is still true and that this will take two years plus two to normalize. If you like is also still correct Josh.
Got it right.
The next question will come from Dan Aries with Stifel. Please go ahead.
Good morning, guys. Thanks for the questions shrank, obviously, a lot of moving parts in China right. Now can you just maybe update us on biotech or performance in their agent and just.
Is.
Significantly in China, it's doing quite well in Europe .
Also the replacement systems are this is meaningful replacement.
<unk> now for replacement of our and other companies systems, and we are doing very well that.
U S has picked up a little bit, but you still has a lot of potential keep in mind that we have almost twice as many multi biotyper as in Europe , and the U S and over time that should equalize so the.
The consumables business has continued to grow in the double digits and has the better margins that you might expect.
Probably approaching $200 million identifications per year on these.
About 6000 systems that are out there is just very strong sense of really useful tool in the clinical and Nonclinical microbiology lab, it's extensively being used and.
To type her and eventually although that's still in the research phase and select an antibiotic susceptibility testing on that platform. So it's a nice flywheel, but the.
The instrument placement, that's getting into a little bit. The later part of the S curve, that's not as steeply growing any more as it as it used to be over the last 15 years.
Okay helpful.
Maybe just staying inside the accelerated program with this facial business canopy utara acuity, what's the right growth rate that you would attached to that portfolio. This year within the overall outlook through you guys. I mean, obviously, there's a lot going on in that space. So where are you seeing the most interest and acuity and is there anything you can tell.
About the product launch timing there.
Will probably address many of those questions.
Tissue imaging.
Cell biology in high end fluorescence microscopy markets. Those are growing so some of them may be somewhat adjacent markets include things like a disco pigs the in vivo.
Rodent neuroscience imaging microscopy.
With a pretty I think I think really will explain that much better to the street during our Investor day, that's coming up in June .
Jordan.
Can you guys just talk through remind us on your exposure I think it's mid single, maybe even high single digits to that and how sensitive you actually are to changes in the budget and then at the end just just what you're hearing there any visibility into into your expectations.
So.
Looked at.
Color that you've given Gerald on Q2, I think you've indicated me too high single digit yeah, exactly will still got a comparison yet.
I wanted to take in just 10 minutes earlier comments on the Chinese give me like package and can you characterize further around some <unk> dynamic flags, how much does the China performances really threatened by that.
It was a higher organic growth rates in the corporate organic growth rate in China in the first quarter.
I don't know, whether it's a 50 50 mix, but since I don't know that might be not a bad modeling.
Even we don't fully know early in the year, so a little bit of conservatism hopefully, it's absolutely be prudent and sometimes it ends up not being conservative frighten your.
That's a good sign of leverage in the pricing and the value of our systems.
Political uncertainty related to change the one we have some Ukrainian conflict, we have recession in some way shape or form around the globe. There's there's still you know supply chain constraints, there's still quite a bit of issues floating around in the mix.
Our position on the Guy and I think you took that into consideration both ups and downs. Yeah. We also look what others are saying if others are saying that they see led by I mean, that's not surprising that there is left early stage biotech funding it though.
And these will be tightening their belts, a little bit of course, they will be some of our <unk> and some of our team soft sales at a a lot of them go into Biopharma.
It's actually a remarkably strong with for the teams thoughts almost a third or so goes into biopharma offering we have not seen in our data any slow down that's probably less macro for these early stage biotech and more of the value of the.
The need for the kind of information that our system can provide but you know that one cannot ignore what's going on around us.
Keeping all right.
All in we think that's about that's a prudent reyes that's.
In the position to do that.
And hopefully with us as my Canadian CFO [laughter] ahead of our skis [laughter].
Super Helpful. And then maybe just one on Tim's cough can you remind us.
How big is that business today.
What kind of share of like the discovery mass spec market like do you have an just wondering like is there any expectation of thermo refreshes or be or there anything on a competitive response or I'm sure, they're not sitting idly by as <unk> you know take.
Takes care of that market.
Oh, I'm sure, they're not sitting idly by and that that may very well be some launches from.
Then.
So I wouldn't be surprised.
Also hard sitting by and.
The last thing we said, we said I think that'd be and I have an an installed base of over 600 systems and certainly it's 10 days of growing in the double digits.
Borders revenue you name it I mean healthy double digits.
And.
He's been gaining market share for sure since we launched that product five years ago.
Sure well above a 10% market share and possibly above a 20 per cent market share in proteomics.
Aspect the mass spec market is larger and.
Thermal all sorts with it with their mortgage trust plays in a lot of small molecule apply that.
Type of law makes in other markets, where where we're getting traction with it seems tough, but it's really primarily protein afford the proteomics play with as many Submarkets said proteomics has actually so I think we're doing really well also K O L.
Capture the other night for it <unk>.
K O L enthusiasm I would call it for that technology is really very strong.
Yep same thing we've heard great. Thanks.
Uh-huh.
The next question will come from Brandon Qoyllur Jeffries. Please go ahead.
Hey, Thanks for taking my question.
Just one clarification Frank.
The first quarter orders, if we exclude the two in a more orders in the UK. The book to Bill has still been north of one.
And the gigahertz installations plans for the second half delayed manufacturing related or more customer timing.
Good question sprained and so yes without the two UK 1.2 gigahertz book to Bill would have still been above one.
And the second question, Yes that was more factory related we needed on a couple of systems, we needed a bit of where you work in the factory and that always requires retesting and the timelines for every working retesting of one of these magnets. He's at least four to six months. So it would be encouraged some.
Delays, which.
Just why they got pushed as they are now getting pushed as best as we can tell to the second half of.
Of the year, we were able to ship 111 successfully passed.
We just don't think it's going to be in the queue to revenue hopefully uncouth screen and others.
Factory delays.
Short answer very.
Very advanced complicated system. So not every system will work in the factories sort of out of the box, sometimes somebody work and be testing is needed we've always acknowledged that in.
It's affecting us a little bit and Q2, but not for the year.
Gotcha and then.
He raised the M&A revenue contribution outlook for the year looks to be about $10 million improvement, which assets are getting better or outperforming your expectations.
I'm sorry was that in in a related question or alright.
Alright.
Yes the.
Revenue contribution from M&A for the year up so I'm, just curious, which which assets are are outperforming or contributing most of that increase.
Oh good.
Good question, even I don't have that granularity yeah, we added an additional small deal in the quarter, that's partially contributing to that but.
Yeah, I don't think we're necessarily going to break out the forecast for each individual asset.
And the contributions to the to the guidance them.
So yeah. So nothing stands out it wasn't the one thing that we'd like to highlight it's it's.
It's additional small acquisitions and it's.
Generally they are performing to a plan and maybe a little bit ahead of plan, but there's one thing that stands out that's noteworthy.
That's very helpful. Thank you.
Mhm.
The next question will come from that Sikes with Goldman Sachs. Please go ahead.
Thanks for taking my questions I'll I'll, just leave it to one and frankly, maybe a high level question as you think about the backlog and additional investments in capacity and supply chain mitigation. How do you think about measuring those investments you. Obviously wanted deliver the products to your customers and reduce that backlog, but at the same time not overinvest.
If we get some level of normalization.
In this sort of out year. So how are you thinking about balancing those investments to solve for that backlog, but at the same time solved for a future supply demand environment.
Oh good question, it's really more of a almost a decade old planning rather than for the next year or two.
So we are we we're pretty optimistic about our growth for the next decade and have seen good growth recently at least since the depth of the pandemic right.
And.
So if you've seen our capex as high this year, our capex has been quite high and elevated in the last.
Two or three years, that's really kind of building capacity for the next decade, plus with a new mass spec factory and integrated by US benefit abilities facility. It's also for productivity, it's not only for capacity as the consolidated to bio spin factories in the same geographical area in your color.
Germany.
That of course is going to be a lot more productive as well plus it generated.
The capacity capabilities hopefully for the.
For not only for the next 10 years not only for the remainder of this decade, and they're rebuilding pretty pretty significant additional capacity buffers, because we think we're gonna grow substantially during that period.
Okay. Thank you very much fence I'm I'm not I'm, not just investing for that backlog and is it a two year reach a three year reach or whatever it is we really decaf investing for the decade.
Got it thank you.
Alright, operator with that we're at 930, so we'd like to close the call here.
Yes, Sir I'll pass the call on T for closing remarks.
Excellent well. Thank you everybody for joining us today as a reminder, brooker had scheduled an in person slash hybrid investor day at our he'll Ricker mass headquarters for June 15th.
Which will focus primarily on proteomics and spatial biology also please feel free to reach out to me to arrange any follow up discussions. Thank you and have a great day.
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