Q2 2023 908 Devices Inc Earnings Call
Hello, and welcome to today's nano weight devices second quarter 'twenty 'twenty free financial results Conference call. My name is Jordan and I'll be coordinating your call today, if you'd like to register an audio question you may do so by pressing star followed by one on your telephone.
I can keep at it.
I'm now going to hand over to Kelly <unk> Investor Relations to begin Kelly. Please go ahead.
Good morning nanometer devices released financial results for the second quarter ended June 32023.
Not received this news release or if you'd like to be added to the Companys distribution list. Please send an email to IR at <unk>.
Dot Com joining me today from diner way, Kevin King 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.
Materially differ from those anticipated.
Additional information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release issued.
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.
I too and in its other.
Other filings with the Securities and Exchange Commission.
Except as required by law Android 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 it's accurate only as of the live broadcast August eight 2020 agree with that I would like to turn the call.
Over to Kevin.
Thanks, Kelly good morning, and thank you for joining our second quarter 2023 earnings call I'd like to start off by thanking our team for their continued dedication and commitment to serving our customers and for bringing our second quarter to a successful close.
At 908, we have a broad technology platform with applications across the diverse end market. Our handheld devices are serving critical forensics market application, including the devastating rise of counterfeit pharmaceuticals, and our growing portfolio of desktop products is serving life science and Biopharma applications include.
The emergence of multi Omics research in the ascent of bioprocess for pointed out.
We view our end market diversity as a key advantage, particularly in the current macro environment and this was reflected in our financial results. Our second quarter revenue increased 9% year over year to $12 1 million, we placed 122 devices, bringing our installed base to more than 2500 devices globally.
Once again, we saw continued strength in recurring revenue, which represented 39% growth over the prior year period and comprised one third of our total revenue.
This growth demonstrates that our customers whether they be in law enforcement military research institutions or in biopharma value points of need analysis.
Overall I'm really encouraged by these results we continue to capture opportunities for handheld chemical detection, both in the U S and increasingly more internationally as bioprocess 4.0 begins to take hold with advanced modalities of therapeutics Theres, a demonstrative need for robust analytics to monitor and control critical.
Process parameters.
We are building a solid foundation to take advantage of these developing opportunities at the American Society for mass spectrometry or SMS conference in June the need for technology was abundantly clear key aspect vendors launched large frame instruments with significantly faster processing speeds targeted for proteomics and other.
<unk> applications.
Our prototype Microfluidic chips are well suited to meet this need for Warped speed processing, we have had a record presence at <unk>. This year with 19 posters the majority with collaborators and the key oral presentation on multi omics I'll share highlights later in this call.
Now I'd like to provide a brief update on the progress we have made across our three focus areas for 2023.
Starting with our first objective penetrate and radiate across key accounts.
Our focus is to penetrate new accounts to create a foothold and then radiate across these accounts to drive broader enterprise adoption in may the CDC released preliminary data, noting that 2022 was the second consecutive year with more than 100000 Americans dying from drug overdose, nearly seven out of 10 overdoses.
Were attributed to synthetic opioids like fentanyl. Another recent CDC report found that Xylazine was detected in nearly 11% of fentanyl involved deaths and in July the by the administration released a six point plan to come up the problem of fentanyl being laced with Xylazine that includes determining where the dilution is coming.
From and disrupting the supply.
<unk> 908 handheld device provides trace chemical detection of fentanyl and its analogs xylazine and many other illicit drugs customs agencies user device to prevent the illegal narcotics from entering their borders.
In June our work with the U S Department of Homeland Security and customs and border Protection Agency was highlighted in the to catch a smuggler series on the National Geographic channel.
The episode showed one of our application specialist training agents on how to use the Max nine away to support them with their investigations at a major Metropolitan Airport.
We are proud of the work that our employees do every day and helping our customers stem the flow of counterfeit drugs from entering our country and into our communities.
Previously I have noted the successful Amex 908 pilot program in Ohio in which 260 law enforcement officers and 60 counties have now been trained to use our device as a result, the state Central lab has seen a notable reduction in evidence backlogs. Our goal is to replicate this program success.
In other states and excited that we have begun a pilot program with several Tennessee law enforcement agencies and drug task forces to enhance the speed and efficiency of the state's drug identification process.
This pilot program with an initial seed of eight devices will introduce the amex 90 weight to law enforcement agencies across Tennessee with the primary objective of decreasing the quantity of illicit drug samples sent to the central lab for testing, which will also lessen delays in the judicial process. In addition law enforcement.
<unk> using the <unk> 908 device can now make faster and more informed decisions at the point of need ultimately leading to safer communities and improved public health outcomes. This is the same playbook, we used with success in Ohio.
Turning to our desktops, approximately 70% of desktop revenue came from existing customers, including three customers that are in the top 20 list of pharmaceutical companies also of note, we renewed our OEM agreement with sartorius, providing them with their online sampler and sensors for bioreactor monitoring and control. This is a long standing OEM.
And ship between Sartorius and the former trace analytics and we were pleased to posture. This key partnership further to maximize the potential of each key account. We've developed a support strategy focused on our top pharma customers to drive routine workflows and us turning to our second objective advancing and broadening our product portfolio.
Our core focus is to develop devices that are simple to use and connected for improved process understanding in order to provide customers with robust answers at the point of need.
In line with this focus last week, we introduced the <unk> 900, a beacon for remote and continuous air monitoring of toxic aerosol and vapor hazards Beacon Leverages, our MX 900 device and Aero module and adds a cloud based solution that enables first responders to gather intelligence remotely and continuously while insuring.
Safety at large events and that key infrastructure. The amex Ideate beacon can be used individually are seamlessly integrated with other beacons for widespread area coverage.
The systems can be easily set up and monitored in real time through the Amex 98, beacon portal, which can be accessed or any smartphone laptop or mobile device.
With over 2000 <unk> devices in the field, we have a large installed base to offer this additional capability, which is one of the only system that can remotely and continuously detect and identify aerosol and vapor hazards.
For desktops, we continued to partner with key organizations focused on developing innovative technologies that advance biopharmaceutical manufacturing one such organization that we have formed an alliance with the National Institute of Bio processing research and training, we're neighbors based in Ireland.
For the past 12 years Neighbors' research focus is to make transformative discoveries that revolutionize the manufacturing of recombinant proteins vaccines and cell and gene therapies.
At MFS, we held a well attended breakfast seminar that feature doctors, Jonathan bones, and Josh Smith from neighbor.
Dr. <unk> highlighted the use of our ZIP chip device for multi characterization of proteins and different applications, such as native impact charged very profiling amino acid analysis of cell culture fluid and a new peptide mapping workflow.
He noted that ZIP chip coupled to a mass spectrometer offers a versatile platform method for these applications. That's ready to go out of the box. Dr. Smith highlighted the successful use of <unk> for rapid analysis of various stereotypes of <unk> associated virus or AAV, which are critical for gene therapy manufacturing both.
Speakers touted zip chips high sensitivity short analysis times compared to traditional LC Ms and the lack of method development. The results of these presentations were also highlighted in three posters at ASML.
In addition in a recent article published in the journal of pharmaceutical and biomedical analysis scientists from neighbor and lines of biologics user ZIP chip CE EMS device to characterize a monoclonal antibody for treatment of colorectal cancer. The authors noted that our technology enables fast and highly sensitive intact mass.
Analysis, while requiring minimal sample preparation, thus, making it a powerful tool for reliable product characterization early in the bio processing pipeline.
We continued to gain exposure and marketing momentum through speaking opportunities and poster presentations at conferences focused on bio processing. After a nearly five year absence due to the COVID-19 pandemic. The invitation only cell culture Engineering Conference was finally held in person in April.
In this forum leaders and experts from academic regulatory and industrial backgrounds convened to discuss cell culture and related advancements that impact a growing spectrum of modalities, including recombinant biologics cell and gene therapy and viral vaccines.
Three of our application scientists who are invited to participate in each presented a poster on research using our rebel cell culture analyzer.
And valuable insights and learnings from the conference presentations, along with the opportunity to network with key opinion leaders.
Lastly, our team is preparing for the launch of our new desktop device next month at the Bioprocess International Conference in Boston, just up the street from our headquarters.
We believe this device will further transform the monitoring of key process parameters and it is an exciting addition to our suite of <unk> products that includes our rebel and may even devices.
And finally, turning to our third objective laying ohmic Foundation.
We see a clear an emerging need for accelerating mass spec based workflows to address proteomics and metabolomics opportunities.
This was evident at this year's <unk> conference, where we had a strong technical showing with one oral presentation and 19 posters the majority with collaborators from academic and research institutions as well as industry partners. Dr will Thompson principal scientist at 900 devices given oral presentation on its collaboration with professor Mark Foss.
<unk> from Duke University on unifying the multi omics world with Microchip capillary electrophoresis. Dr. Thompson described the workflow using our prototype microfluidic chips in our ZIP chip device, which allowed independent metabolomics epidemics top down and bottom up proteomics from a single sample contained 20 microliters of dry blood.
Speed was a definitive theme at ASML scientists conducting proteomics metabolomics and other multi omics research once a process a significantly large number of samples and are demanding mass spec instruments and tools for faster workflows, we believe our ZIP chip device along with our prototype chips can meet that need for speed.
This was exemplified by one of our poster collaborators in D. Professor of sell in regenerative biology, and chemistry at the University of Wisconsin, Madison Professor geese poster highlighted multi omics analysis, specifically metabolomics and top down and bottom up proteomics of human Heart Pro.
Extract she noted that traditional L. CMS has long separation times ZIP chip can provide separation two minutes. So speed is significant advantage along with the device's ease of use.
At ASML. We also hosted a meeting of our proteomics Scientific Advisory Board, where key opinion leaders provided enthusiastic support of our growing presence at this conference for customer and R&D related content as well as feedback on emerging R&D efforts in multi omics, our scientific advisory Board members were particularly interested in the capable.
<unk> Zip chip for multi Omics studies under unified analysis conditions, including using the developmental on chip peptide pre concentration approach for analysis of very large native peptides for bio fluids.
Fortunate to have this remarkable group of thought leaders share their insights as we advance our development efforts in this area.
Overall, I'm really pleased with the progress we made during the second quarter on our stated objectives and I look forward to an exciting product launch next month.
I'll now turn the call over to Joe for more details on our financials.
Thanks, Kevin revenue for the second quarter, 2023 was $12 1 million, increasing 9% compared to $11 1 million in the prior year period.
Handheld revenue from our <unk> device was $8 8 million, an increase of 27% compared to $6 9 million in the prior year period.
During the second quarter, we shipped 107 Amex nine away handheld devices. The increase in handheld revenue was primarily driven by an increase in device sales as well as service revenue.
Desktop revenue, primarily from our rebel ZIP trip interface and moving products was $3 1 million decreasing 0.6 million from $3 7 million in the prior year period and in line with the first quarter 2023 revenue.
This year over year decline in desktop revenue was primarily due to a decrease in device placements during.
During the second quarter, we shipped 15 desktop devices, including five rebel or is it chip interfaces and <unk> devices.
As a reminder, we will continue to breakout placements by device in the near term.
Never has our portfolio broadens, we will focus more on overall revenue and combined desktop placements as the key metrics for group.
As Kevin mentioned, we had another strong quarter for recurring revenues demonstrating the value that our devices bring to our customers.
Recurring revenues, which consist of consumables accessories and service revenue increased 39% to $4 million compared to $2 9 million in the prior year period.
The increase was primarily driven by the growth in service revenue mainly from handhelds.
Recurring revenue as a percentage of total product and service revenue increased again this quarter to 33% in Q2 2023 from 27% in Q2 2022.
Notably is the third consecutive quarter recurring revenue represented at least one third of total revenue.
Going ahead, we expect recurring revenue to be around 30% for the full year.
Gross profit was $5 8 million for the second quarter of 2023 compared to $6 6 million for the prior year period.
Gross margin was 48% for the second quarter 2023, as compared to 60% for the prior year period.
The decline in gross margin year over year was largely due to three factors.
First the timing of production levels for both our handheld and desktop devices as the prior year period was our highest quarter ever resulting in approximately zero point $5 million of impact.
Second higher material costs and warranty costs, resulting in the difference of approximately zero point $5 million and third to a lesser extent higher noncash charges for intangible amortization and stock compensation impacting our gross margin by approximately zero point $2 million.
Looking ahead to the second half of 2023, we expect the higher product sales a favorable shift in product mix and higher device production levels will positively impact our gross margins and get us to the lower end of our target range of the mid fifties. We stated earlier this year.
We continue to expect that as our device mix shifts and we scale up on placements and consumables, we will be able to expand our gross margin further.
Total operating expenses for the second quarter of 2023 were $16 7 million compared to $15 million in the prior year period.
This increase was driven primarily by a zero point $6 million increase in personnel related costs and the impact of head count added throughout 2022, and merit increases for existing personnel as.
As well as the zero point $6 million increase in stock based compensation and a zero point $2 million increase in acquisition related costs intangible amortization and evaluation of contingent milestones.
We are committed to being prudent stewards of our cash as you recall, we reduced head count in Q1 by 6% to drive efficiency across our organization and we are continuing to tightly manage our head count and be extremely thoughtful on any new additions in the second half of the year.
Net loss for the second quarter of 2023 was $9 3 million compared to $8 1 million in the prior year period.
We ended the second quarter of 2023 with approximately $153 million in cash cash equivalents in marketable securities and had no debt outstanding.
<unk>, we amended our loan and security agreement with FCB as part of our efforts to diversify our banking relationships.
Looking ahead to the remainder of 2023, we now expect full year revenues to be in the range of $49 million to $52 million representing growth of 4% to 11% over full year 2022.
This compares to our previous revenue expectations of $48 million to $52 million for full year 2023.
Our guidance range contemplates a few key factors. The first is the ongoing pressures in the bio processing space like others in the industry. We are continuing to experience a challenging macro environment related to our bioprocess and customers.
This is especially impacting our rebel placements, which is the highest ASP device of our offerings.
We expect these pressures to persist for at least the remainder of 2023.
Second we have a key advantage with our diversified and broad technology platform with applications across different end markets. While we are still seeing weakness in the bioprocess market. This is being offset by strong demand for our handheld devices that serve the forensics market.
We expect our revenue growth for the second half of the year to be centered around our handheld revenues similar to what we experienced in the first half of 2023.
At this point I would like to turn the call back to Kevin for closing comments. Thanks, Joe We are pleased with the results. This quarter as we continued to execute against our strategy. We are revolutionizing chemical detection by bringing it out of the central lab and to the point if need across a diverse set of end markets. We continue to see significant.
<unk> as we do so for new classes of products industrial remained focused on developing and broadening our product portfolio to address these opportunities with both our handhelds and desktops.
We are very much looking forward to launching our new product next month. Following this launch we are hosting an event at our headquarters in Boston on September 20th where we will provide a deep dive on our bio processing product portfolio. Please reach out to IR at 900 devices Dot com, if you're interested in learning more about the event it would be great to see you there.
With that we'll now open it up for questions.
Thank you as a reminder, if you'd like to register your questions. Please press star followed by one on your telephone keypad.
If you change your mind. Please press star followed by two please.
Please ensure your own muted when speaking.
Our first question comes from Don <unk> of Stifel.
Please go ahead.
Good morning, guys. Thanks for the questions, Kevin maybe to start on the rebel and to Joe's point on just the environment and the remainder of the year looking similar I guess to the first half of the year I mean, I know, it's a tough question, but if we were to try and look out to 2024.
Do you feel like you have some level of visibility into demand next year and the reason I asked that is because some of what it feels like it's taking place in the industry.
It is just related to project and purchase delays. So are you seeing that is there a portion of what you thought you might get this year.
That's maybe falling into next year is maybe somewhat of a relatively high confidence set of orders.
Yeah Yeah.
Thanks, Dan for the question.
I still think that as I said, it's a bit muted here through the remainder of 2023.
With the rebel placements.
If you look at Q2 <unk>.
Total number of desktops, because we're starting to think about that broader portfolio beyond the the rebel theres about 15 devices in Q2 desktop devices and kind of on par with our our Q1.
Youre right I mean, I think it's clear we're seeing many of the same industry.
Pressures that others have been reporting on in.
Capital equipment sales cycle, extending and I think you are right that some of this does go with with cycles of funding through our customers and the project pacing of it we're having really strong conversations with our customers, we're kind of really focused on the value that the.
The products are bringing them and with that we do see.
Positivity just over the long term for the whole desktop franchise. We're building we did raise the bottom of the guidance a bit by by $1 million.
That's really on the strength of the handhelds, but that also gives you may be an indication of.
<unk>.
Where we feel overall and if we start to think about kind of the top end of the range that we provided today one of the drivers of that would be the bio processing market and some of the return coming maybe before 2024 right that could maybe take us to the top end of that that range and we havent really been.
Assuming a dramatic recovery in 2023 more of our lines more of a run rate.
Approach that top end of the guidance so hopefully that was helpful.
To think about future projects in 'twenty four.
Our run rate coming off the end of this year.
Yeah that was helpful. Thank you for that.
Maybe on the handheld side can you just add some color to new business generation overall, how are you feeling as we head towards the end of the government fiscal year here and think about a new budget cycle in the U S.
And then outside the U S. Your last call I was reading transcript you had highlighted.
Some pretty good international demand in the first quarter I'm, just curious about whether some of that showed up here in.
What do you think you start to see some ex U S demand be something that you can kind of reliably count on in the quarters going forward.
Yes for sure go handhelds.
It was really strong for us over the year and as you know, it's really a diversified set by having that same platform, but we can bring it up to the handheld or those forensics customers.
So they've been really strong the forensics team has been doing really well in each one international definitely a driver of that pressure in the first half we talked about NEDA, we talked about some other opportunities over time and we do see that international will continue to be a driver over H two.
If you think you are right the end of the U S government fiscal year right.
<unk> is in the end of September we are tracking at a handful of enterprise deals across the U S. Federal International some of which those are tied with the with the end of the fiscal year.
I think we've got a meaningful set of opportunities and.
We're pretty happy with where things stand today.
Position, we see them in various stages of identification pipeline approval and the contracting process as we as we get closer to the U S. Europe .
Okay I appreciate it guys. Thanks.
Our next question comes from Stephen Moore of TD code.
Please go ahead.
Great. Thanks.
Thanks for the questions.
Maybe just a follow up question from from from Dan's line of questioning.
You know.
Given the color given the delays on the purchasing cycles in central Florida.
Unclear budget recovery timing do you guys have.
Have you guys thought of or been thinking about plans for a potential reagent rental or leasing of desktop instruments to get the instruments out there given the slowdown in the capital.
Purchasing cycles.
Okay.
Yes, Steven Thanks.
It's something that we think about but definitely not changing our focus right of selling capital and the opportunity of placements, whether it's on the handheld or the desktop side, but I think specifically on the desktop side the value over the short and the longer term I think to the extent that we see an opportunity to secure some operating funds will look at that with some customers.
But it's definitely not a focus of driving the growth, it's the longer term placement and broadening the portfolio.
Across multiple products to be able to tap into the budget has different price points everything from the rebel at the high end to the May even at the low end of our U S selling prices.
Yeah.
Okay. Thanks for that color and then one more from me could.
Could you give us some color on the market for <unk>.
Rubble for biologics manufacturing.
Given the press release you had given.
National Brazilians got very good results using rebel.
Has there been any kind of pull through.
On the marketing side.
On that and can you give us some color on how.
Emerging BD opportunities from that that national resilience opportunity.
Yes sure thing, yes, we're really pleased that we were able to showcase that work.
And we really have a key account strategy across our desktop devices and with a big focus on unravel really to drive such success. Some we can talk about in the public. Some we cant. We certainly are working very closely with customers as they kind of evaluate how they could put this into their routine workflows.
How they can they can kind of change what they're doing by having this point of need analysis, and now being able to run a full panel assay right next to the buyer reactor show we've got.
Customers using it for things like <unk>.
Media Fingerprinting, which is really just a check before they start time point zero in a bioreactor and then we have more advanced customers like you pointed out with national resilient that are looking to actually change on how they feed and what they do in the bioreactor, which ultimately is the a lot of the value we see with our with our offerings as we.
We build them out so yes, we're always trying to get out there.
Be vocal about successes with customers and we do have a bio processing summit coming up here next week in Boston and then.
We have BPI.
In September which will be launching a new product in that space. So yes, we are trying to like ASML that we highlighted in his script really get a lot of collaborators and speaking about the values and virtues of the attack.
Great. Thanks, so much.
Our next question comes from Matt <unk> of William Blair Your.
Your line is yours.
Hi, good morning, guys.
So in light of the Nathan launched earlier this year and the upcoming launch of a product next month.
Curious, how youre thinking about balancing commercial resources.
Obviously all of the products in the bag processing portfolio are still.
Under penetrated relative to the potential Tam and so, particularly given that customers are having longer capital purchase cycles.
Just kind of now.
Products with with your sales force. So how do you think about kind of managing driving penetration of the legacy products.
Products like rebel or is it chip versus educating.
Annualized in the newer products.
Yeah, Yeah, I mean, we're excited that we now can have a growing sales force that has more than one thing to be engaging and talking to the customers about that spanned a set of of asps on the low end, our maven and then our rebel on on the higher end of that.
And with the new product on its way. So I think it's all around having the conversation with the customer and enabled us to keep that continued engagement.
Figure out what they need right and these products are all very complementary.
They are not overlapping in that sense. So it's enables us to really speak to the customers about their process, where theyre going and there are some customers that maybe maybe is a better jumping off point than rebel right because if they havent been doing much online monitoring or havent been doing much outlined monitoring something like maybe it could be a lower lift.
Adoption and could be a feeder as we see it into the into rebel certainly seeing some examples of that.
We've also seen some examples where rebel customers now are engaging on maintenance. So I think it's a really positive thing and we don't have a focus issue really because we're really just addressing what the <unk>.
Customers' needs are at this point and at the very senior just stick portfolio, where we're developing.
Okay.
And then last quarter you gave us.
Some data points around material transfer agreement that sort of a leading indicator and just curious as the back processing market has remained.
Stagnant tenant bounce back yet if there are any other.
Leading indicators.
Can you can share with us.
Just to get a sense for what that funnel looks like into the back half here.
Yes for sure.
I think we remain convinced that these tools are needed and growing importance and it's really just fundamental if you look at that pipeline therapeutics getting more advanced in the conversations are all very positive and just thinking where customers going but as you noted right things are just drawn out but youre right last quarter, we did highlight.
We saw measure overall, what kind of uptick on those material transfer agreements.
And we saw that starting to pick up in Q2, when we had this call at the beginning of the quarter and yes. We are happy to report that that really continued throughout the quarter. So if you. If you look at the total number of material transfer agreements. We did it in Q2 that was two X. What we did in Q1. So there is definitely engagement there is definitely opportunity obviously.
That isn't a direct corollary into what closes in fiscal year 2023, because this is often part of the process where someone will put in a demo sample as we've discussed before and look to evaluate the technology, but it is a sign of positive engagement.
Okay, that's great. Thanks, Kevin.
Thanks, Matt.
Our next question comes from Jacob Johnson of Stephens Jacob. Please go ahead.
Okay.
Hi, Good morning. This is Hannah on for Jacob Thanks for the questions.
Just to start how has the initial customer reception of Nx 908 Beacon Ben is this driving additional <unk> nine or eight sales.
Is this an add on offering our customers buy these standalone.
Yeah. Thanks, Hanna for the question yes.
<unk> is another great launch for us connected to our to our handheld product line. It can be bought by itself to an existing <unk> customer, it's about a $9 $9900 add in little bit more like an accessory a little bit more like our aero. So we really see that there is an opportunity.
To take this beacon to the 2000 <unk> that are out there and really kind of leverage that installed base and give those customers more capability.
But on the flip side, we also see that that could drive additional amex 98 placements over time as well because this is really set up as a as an area monitoring solution. So these are done different nodes to cover a particular geography and area. So so as U S.
As we can get people successful with their with their beacon. They made doesn't want to have two or three more so that they can have a wider area of coverage. So initial feedback has been good it's very early days for us on that.
And it is a very practical solution, but we have high hopes for here and it probably will start out in the U S. Given that about 80% of our of our of our sales there are in the U S where that product and probably more on the state and local side as well as the <unk>.
First adopter sports across local towns municipalities event monitoring and things. So yeah, we're excited for where that stands today.
Great and does the potential for bringing rebel online next year impact current <unk> sales.
If you buy the rebel now can they upgraded to the online version once that's available.
Yeah.
I don't think it's disrupting anything that we're working on today and in fact the development.
Actually helping us a bit so so absolutely the rebel and the roadmap of rebel is incredibly important and as we've been trying to articulate. It is really the strategy of our complete portfolio of products rather than just a single product really with that ultimate vision that we've articulated in the past of can we take a make a try quarter. That's just connected to each and every <unk>.
Bioreactor that just streams off process and product analytics. So we were already on that journey with our trace technology and Maven, which is an online device absolutely a precursor to rebel online because that technology, we anticipate to be incorporated within our rebel but as we've also said in the past, we really don't see the rebel online.
As a discrete event gating, our progress or customer adoption.
We're really working hard constantly to just make everything easier and easier with our current rebel offering and releasing improvements enhancements make everything more robust easier to consume the data just really trying to knock down any barrier to routine workflow and usage. So.
<unk> online is important we're going to update as we enter 2024 and evaluate where everything stands in our stage gate process at that moment, we will have a nice clear picture then, but what I can say is that we're really not waiting. So there are things that are moving from that that development into the current generation rebel again just to break down any.
Areas to routine use so that could be software enhancements hardware enhancements. So those really are kind of more continuously flowing out there into the markets, but yes lots of innovation underway I don't think that.
The new technologies that they are in the roadmap are are hindering our our sales at this moment.
Great. Thanks, I'll leave it there.
Our next question comes from Puneet soda of Leerink partners. Please.
Please go ahead.
Hey, Thanks for the question this is Philip entrepreneur needs.
Maybe just.
Quick question can you remind us of your exposure to China, and if youre seeing anything there and kind of what are your expectations there for that for the rest of the year.
Yeah on the China front in APAC, it's not a big piece of the pie today as you look at our geographic sales.
80% or thereabout in the Americas, followed by EMEA, So I think China is less.
Less than 5% of our sales we have some folks there.
Working through the opportunity.
But really.
Americas, and Europe focus not only on a handheld but also on their desktop side So limited exposure.
Gotcha that makes sense.
And then maybe a question on FX I know you've kind of talked about.
Previously these kind of these large enterprise opportunities in our sales funnel.
Because I'm wondering how does that kind of tracking and is there any risk there and do you have any updated thoughts on kind of where you see the total for <unk> and ultimately get into this year.
Yes, so we don't necessarily give guidance based upon our placements for the year.
But coming into the year, we had the headwind around the U S Army and we've had some nice traction in the progress of our LDS.
Progressed, the year to help offset that you saw that in the strength of our year to date Q2 and year to date here in the first half performance, we expect that to continue.
In the back half there are opportunities and we need to execute on the government year end here at 930 in the pipeline of opportunities.
To deliver on our updated full year guide, which is relying on handheld so still a few that we need to secure to deliver on the unit growth, but excited about how that has progressed throughout the year. Both on the U S side, but also international enterprise wide accounts. So good good.
Mentum and we do kind of once a year around our 10-K give a status on the overall pipeline.
As we update.
In March will be the next formal update.
Perfect Super helpful. Thank you.
Okay.
We have not we have no further questions on the line so I'll hand back to the team for any closing remarks.
Okay. Thank you. Thank you everyone for tuning into this and for the thoughtful questions and have a great day.
This concludes today's call. Thank you for joining you may now disconnect your lines.
Four questions and have a great day.
This is Chris.