Q3 2023 Seer Inc Earnings Call
Okay.
Good day, and thank you for standing by.
Welcome to the third third quarter 2023 earnings conference call.
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I will now hand over the conference to our first speaker today, Carrie Mendivil Investor Relations.
Please go ahead.
Thank you earlier today, we released financial results for the quarter ended September 32023, if you've not received this news release or if you'd like to be added to the Companys distribution list. Please send an email to investor fear that vial.
Me today from fear they'll need Verathon, Chief Executive Officer, President and chair and David Warren 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 whereabouts to materially differ from those integrated.
Information regarding these risks and uncertainties appears in the section titled forward looking statements in the press release issued today.
For a more complete list and description. Please see the risk factors section of the company's quarterly report on Form 10-Q for the quarter ended September 32023, and its other filings with the Securities and Exchange Commission.
Except as required by law <unk> disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
The conference call contains time sensitive information and is accurate only as of the live broadcast November seven 2023 with that I would like to turn the call over to Amit.
Thanks, Carrie and thank you everyone for joining us. This afternoon I will begin our call today with a review of our third quarter results as well as the progress, we're making across our core focused areas.
To drive growth.
Then I will turn the call over to David to provide more details on our financial results.
I'd like to start by thanking our incredible team for their hard work and dedication to our mission that sphere, we're pushing the boundaries enforcing an entirely new market in proteomics amidst a very challenging macroeconomic backdrop.
Even in the best circumstances, developing a new market is never easy.
Team is working tirelessly to serve our customers and help them realize what is possible using the <unk> product suite.
We ended the third quarter with $4 2 million in revenue, increasing 5% year over year, and approximately $381 million of cash cash equivalents and investments on our balance sheet.
Given our performance year to date as well as these ongoing challenges in the current macro environment. We now anticipate coming in at the lower half of our revenue guidance range of 16 million to $18 million.
On our last earning calls we outlined some of the challenges that are impacting near term adoption about technology as well as the actions, we're taking to mitigate them.
First making it easier to access mass spec based proteomics data.
For proteomics and mass spec expert customers introduced this strategic instrument placement program or ship to enable immediate access to the Proteus graph and helped generate the data needed to secure funding and sample to conduct larger subsequent studies for biologists and genomics customers.
We introduced it few technology access center or stack.
Enable access to.
So a simple to conduct the first study and apply that biological insight provided by the photograph.
This will accelerate publication that help researchers to secure funding for future studies and investment and bring you in workflow in house.
In addition building market awareness and continuing to lay the groundwork for market adoption with more substantial market development efforts designed to shorten the sales cycle and enable more data to become publicly accessible.
We're increasing market education with expanded outreach events.
And we're supporting potential customers with proof of principal studies and examples of use cases, we go application lab.
We're making progress across these efforts and I'll share more details on each throughout the call today.
We have shown.
Along with very early customer data that deep unbiased for genomic at scale as possible and we're forging the path forward with the broader research community.
More papers are being submitted and published from our partners and customers with exciting data as well as great interest in stack and our recently launched proteome XD advocate.
I have strong conviction in the unique benefits of our technology and a differentiated insights that we offer to the omics customers.
I remain convinced that was third party data becomes increasingly accessible to a broader research community our market development efforts will pay off and we will see an inflection point in adoption the size of studies and ultimately revenue.
We're making strong progress here despite market headwinds.
That said this has been a year of learning and adapting as we change the status quo of proteomics research.
We're constantly refining our approach as we figure out how to advance adoption of deep unbiased proteomics at scale.
I'm confident this will happen it will take time, particularly in this challenging macro environment.
In the near term, we continue to focus on our key critical areas to develop our business first enabling breakthrough discoveries with the prototype products suite second demonstrating the power of our technology and third Catalyzing, new applications and markets.
Starting with our first objective of increasing the availability of public data and publications to validate the value of the <unk> graph.
Whereas there are 180 public presentations in 48 posters or presentations by customers.
This has also been an exciting year for publications with fixed manuscripts submitted to pre print servers to date.
Line of sight of another half a dozen that have bigger will be submitted to peer review this quarter, the vast majority to high impact journals.
These applications cover a range of applications, including analyzing PQ Tls.
Understanding the bodies as far as the space flight, finding new biomarker signatures of batten disease, and validating the quantitative and precise data enabled by the <unk>.
In October two new papers were added to bio archive tourist researchers from Auburn University published a second manuscript using the towards geographic following an earlier one in June.
Using skeletal muscle samples to understand molecular signatures effected by aging and resistance training finding a setup proteins in cellular senescence.
With that we're up regulated over 100 fold following resistance training.
Second researchers from Brigham and women's hospital in partnership with <unk> diagnostics have developed and validated three distinct measures of biological age in the manuscript now available on bio archive.
These researchers have developed a robust.
Predictive biological agent phenotype, which combined with DNA methylation and multi omics generated two biomarkers. Both biomarkers demonstrated strong association with chronic disease and mortality outperforming current biomarkers across their discovery and validation cords.
Additionally, these biomarkers provide the opportunity to identify clinically relevant interconnection central to the aging process.
This quarter product normally presented exciting data from their case controlled lung cancer cohort demonstrating unprecedented early detection performance using a multi omics approach, which includes the Purdue graph for non small cell lung cancer.
Using two different subsets presented at the 2023 World conference on lung cancer.
Chest annual meeting the highlighted validation data showing significantly higher sensitivity and specificity to detect lung cancer, particularly for early stage lung cancer than previously shown in presentations or published data.
The results of these data sets showed the protium graph helped to identify 4440 proteins and over 30000 unique peptides.
On average per subject.
Previously published plasma proteomics studies that included over 500 subjects has typically detective fewer than 600 proteins on average per subject.
These presentations reflect that.
The first customer data set demonstrating the value of the content that can be drive for.
At scale studies using the project graph.
This is an exceptional result that could have a significant impact on discovery efforts for early detection of various diseases.
We believe this encouraging and pivotal data will serve as the foundation for the development of multi omics assay for blood based liquid biopsies for the early detection of lung cancer.
The data from this large cohort has been analyzed I was being prepared for manuscript submission.
In a recent webinar hosted by genome web Dr. Nate.
<unk> from the National Institute of aging.
In IAA discuss data on the 900 sample longitudinal amounts biomarker study that <unk> completed within just four months using to predict graft product suite.
Dr <unk> and his team achieved deep quantitative proteomics profiling of low volume mouth serum.
And competitive over 4300 total protein.
Yes.
Revealing major alteration.
If a protein and triglyceride associated pathway with age and varying by mouth strain.
This demonstrated both the scalability and flexibility of the program to enable a species agnostic unbiased study and scale.
We expect the manuscript will be coming out in the coming months.
Last week, we announced that panel Bio award class, let's say below mix service provider with mass spec expertise has joined our centers of excellence program.
By combining deep proteomics insights at the peptide level with the proprietary metabolomics workflow panel buyout will enable first in their tightest studies with robust pathway analysis to significantly advance research in biomarker discovery and drug development.
As we focus on expanding access and resolving pain poised to accelerate adoption.
There is mounting interest in deep unbiased scalable proteomics and an appetite.
Publications demonstrating these results.
As potential customers consume this groundbreaking data and capabilities.
Evident that we will see these adoption momentum accelerate.
Turning our attention to our second objective demonstrating the power of the product suite.
We will continue to expand the capabilities of our technology and increased access to the project graph, we are a number of initiatives.
Back in June we launched our second product the photograph ex the assay kit, which enables.
Nearly any lab to take large scale proteomics with higher throughput and depth of plasma produce coverage.
This product enables the analysis of 10000 samples per year with one project graph XD and to mass spectrometers.
We're seeing good traction with equity and is performing exceptionally well in the hands of customers.
We're on track to have the majority of our installed base upgraded to the X. The configuration of the instruments by the end of this year.
The power of the product XD assay was exemplified through the fantastic data that thermo Fisher presented at ASML in June showing the power of the orbit trap Astro mass spectrometer in combination with the <unk>.
Our partnership with Thermo Fisher to launch a theater technology access center stack has been.
A lot of interest and has had a significant impact on access to mass spec readout, giving us confidence that this was the right strategy to help open up the market.
We're expecting to run thousands of samples by the end of this year with a backlog of projects.
We believe that as customers gain access to validate and apply the biological insights provided by the project graph. This will accelerate the availability of customer data using the photograph.
Increase the pace of peer reviewed papers. In addition over time, we believe these researchers will add mass spec technologies to their own lab.
As I mentioned, we launched the Sip earlier this year to remove the barrier of capital investment for customers.
We continue to make good progress with this program.
Ability to increase accessibility to our technology for those customers that would like to bring the prototypes in house.
Outside of our initiatives such as stack and.
We're also working to expand our global presence through new distributor partnerships, we're partnering with Daniel biotech in Israel.
<unk> in Eastern Europe.
With these partnerships, we will be well positioned to address interest.
Some new geographies and customers around the globe.
We're also making significant developments in validating our technology through two new ISO certification received ahead of schedule first we received ISO 27, 001 certification, which helps increase our information security and cyber security standards. This will make us more.
Effective with stack.
Labs are collaborations and form the bridge for GDP or compliance for European customers.
Second we received ISO 13485 certification.
<unk> establishes the processes people and systems for quality management.
This lays the groundwork for the creation of the highest quality reliable solutions and enable the utilization of our products and FDA submissions.
These certifications underscore our dedication.
Two ensuring quality and security and paves the way for our technology to make a meaningful impact in clinical settings.
It is a testament to the dedication and hard work of our entire team that we achieve these significant certification in such a timely manner.
In addition to these certifications were making our software easier to use too.
To make it simple for new customers to add unbiased for genomics data to their studies.
And lastly, an update on our third objective catalyzing, new applications and markets.
As I mentioned earlier, the proteome is an inherently extensible technology.
We have seen this time and time again across new cases in our application lab.
And then diverse stack projects.
Our technology is being used to support the development of early detection test biomarker discovery veterinary application and aging research.
To date, we have shown use cases for skeletal muscle wholesale proteins various model organism secret government condition media and low sample volume.
We're working on samples to study XOMA brain dried blood spots peers horse enjoined fluid.
It is very exciting to see how people are imagining what they can do with deeper and bias toward your mix being more accessible.
I am pleased with the progress we have made this quarter to address our near term challenges to commercial adoption.
However, we still have a lot of work to do.
We are actively pursuing market development activities and raising awareness about the capabilities of the product that product suite.
More data publications and prove our emerging revealing high impact biological insights.
Each of these studies further demonstrate what's possible and paves the way for future customers to add deep unbiased for genomics with their studies.
Confidence in the substantial long term opportunity ahead of us with that I will now turn the call over to David.
Thanks, Amit total revenue for the third quarter of 2023 was $4 2 million.
Representing an increase of 5% compared to $4 million in the third quarter of 2022. The increase in third quarter revenue was primarily driven by increased instrument sales services and grants and other revenue offset by lower consumable kit sales.
Related revenue for the third quarter of 2023 was $3 3 million.
Including related party revenue of $1 4 million and consisted of sales of SB 100 instruments and consumable kits.
Service revenue was $536000 in the third quarter of 2023 as Hamid mentioned, we are seeing good customer interest and traction with our stack program, where we will run mass spec for our customers and in some cases provide a full workflow solution for customers, who would like to access our technology.
Grants and other revenue was $348000 in the third quarter of 2023 largely related to our SBR. Our grant from the NIH. We did receive an extension of our SPR grant from the NIH in the third quarter, which allowed us to continue our work here. This grant.
Total gross profit was $2 2 million for the third quarter of 2023, representing a gross margin of 52% compared to $1 $9 million in the third quarter of 2022, representing a gross margin of 49%.
We continue to expect variability in our overall gross margin on a quarter by quarter basis, as a proportion of instrument consumable and service revenue will fluctuate between any given quarter.
Total operating expenses for the third quarter of 2023 were 28 million, including $8 3 million of stock based compensation, an increase of 4% compared to $27 million, including $9 $1 million of stock based compensation in the third quarter of 2022.
Research and development expenses for the third quarter of 2023% or $13 2 million.
An increase of 14% compared to $11 $6 million in the third quarter of 2022.
The increase in R&D expenses was primarily due to an increase in product development efforts related to the pretty rare product suite, including employee compensation costs and other related expenses associated with overhead allocation general business expenses depreciation of equipment.
Selling general and administrative expenses for the third quarter of 2023 were $14 8 million, a decrease of 4% compared to $15 $4 million in the third quarter of 2022.
The decrease in SG&A expenses was primarily driven by a decrease in professional services, including recruiting expenses.
Net loss for the third quarter of 2023 was $21 1 million compared to $24 million in the third quarter of 2022.
We ended the quarter with approximately $381 million in cash cash equivalents and investments.
Turning to our outlook for the year as we made mention given our performance year to date as well as the ongoing spending constraints that our customers in light of the current macroeconomic environment. We now anticipate coming in at the lower half of our revenue guidance range of $16 million to $18 million.
In terms of our cash burn we are committed to maintaining a strong financial position. They are taking a very disciplined approach with our spend we continue.
To estimate that our 2023 of free cash flow burn will be less than our free cash flow burn in 2022.
At this point I would like to turn the call back to me for closing comments.
Thanks, David.
While we continue to navigate temporary headwinds and manage through the current environment. We have made tangible progress in increasing accessibility to our technology. This quarter, we're seeing a growing interest with our stack and are seeing more customer publications moving through the peer review process.
I am so proud of our incredible team for their hard work and dedication throughout the year.
<unk> believe that we will see an increasing adoption of our technology as more researchers see third party validation of the capabilities of a particular product suite.
With that we will now open it up to questions.
Yes.
Thank you very much.
We will now conduct a question and answer session.
As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.
Please standby, while we compile the Q&A roster.
Our first question today comes from Dan Brennan with TD Cowen Your line is open.
Great. Thank you thanks for the questions guys and congrats on the quarter.
Maybe just the first one would just be kind of on the sales funnel, obviously youre not alone feeling.
Pressure on the demand trends given the difficult kind of environment that said, you've kind of rattled off all the initiatives and you've got the new product and you have some publications coming out so I'm just wondering on the publication front in particular.
If you could just speak to kind of maybe any color on what the funnel looks like qualitatively and have you begun to see any increase in demand as some of these publications have made their way to market.
Yeah. Thanks, so much.
We're seeing good traction with.
With DXP.
That product is performing exceptionally well and it has our customers.
We're on track to have the majority of the installed base upgraded to the XD configuration of the instruments.
By the end of the year.
As you would expect.
The revenue ramp for a new product launch it takes time.
We factored these elements into our revised guidance.
That said, we are seeing good traction and the customer has given us very favorable reviews, and what they're seeing so far.
And Dan <unk> and Jonathan Yeah go ahead, Dave Yes, just to jump in on the on the publications front again as we mentioned we now have six on bio archive, which is great. Obviously, that's pre print, but they'll all be submitted and we also know of another as we said in our remarks in other kind of handful.
Half a dozen.
That we're excited about so hopefully you know again, we don't have control over the timing of the peer review process, but hopefully in the first half of next year, we'll start to see some nice publications and could see some as early as the beginning of the year.
Got it and then maybe just as a follow up.
Maybe a two parter on that stack business could you just speak to kind of what that opportunity looks like.
Is that getting reported through the service line. So any color on kind of how beautiful and that that could be and then just be I know you're not guiding for 'twenty four but consensus has you guys growing 60% in 2024 looks to be pretty steep given the environment any any early way, we should be thinking about a reasonable level of kind of growth in 24 at this point.
Thank you.
Yes, let me maybe comment on.
What what the stacked means for our business the purpose of it and.
And what we're seeing and then maybe I'll have David comment on the economics of it in terms of balance of the year and also heading into 2024.
So the stock really exemplifies the power of the product XD assay.
Together with the.
With a thermo Fisher.
Astral data.
It just simply fantastic.
We launched this stack at the SMS conference in June.
We've seen.
A lot of demand a lot of interest.
And being able to access the photographs.
Service model really lowering the barrier for a customer to go from a sample to data.
We actually have a backlog on.
In the stack in order to process the samples on the equity and the Astral. So that's really encouraging for us.
In terms of how you should model that for the balance of the year end 2020 forward, let me have David comment than that.
Yes, Dan just to answer your questions.
Yes, we do report stack revenue through the service line. So the service revenue is primarily stack revenue.
I think the only difference to think about with respect to stack as Hamid said, we do have a nice.
The pipeline of projects, we're working on.
But we do need to run those projects and deliver the data report to the customer before we can recognize revenue on that so there.
There will be just between when you get the Po and you get the samples and you actually have to run and deliver the data. So there is a bit of a time lag there and that just becomes an issue around how much debt capacity do you have in any given quarter. So we're optimistic about what we're able to do but there is just an additional time component.
And then with an instrument consumable or you soon.
As soon as you shipped you can you can recognize revenue. So again I think thats just something to keep in mind.
We do have to kind of work through that.
Each quarter, but we are we are optimistic about where that will come out.
Both for the balance of the year and the contribution it will make next year.
I think I think the second part of your question was outlook for next <unk>.
Next next year.
I would say it's still.
Every every week every month.
We are continuing to face challenges and headwinds I think we continue to like our pipeline and where it stands in a number of opportunities. We have I think the question is just the timing of those and how quickly those can or can't move through the funnel based on the.
The funding at the various customers and capital budgets and that type of thing. So I think we're cautious.
Certainly around next year again, I think it will probably be a year, that's more back half loaded, but obviously, we'll have a lot more information and data on our year end call, but again I think it's similar to to other companies out there in our sector. It's just.
A tricky environment right now in terms of.
What people are doing and then you layer on the fact that we are a new technology and I think that again just.
Causes us to continue to be optimistic but.
Sure.
Appropriately.
Conservative as well as we look into next year.
Okay got it thanks, Steve.
Thank you very much.
One moment.
Our next question comes from Tim <unk> from Morgan Stanley. Your line is open.
Hey, guys good evening and thanks for the time here.
Just a couple of quick follow ups on the stack and ship sort of initiatives do you.
Do you view that as essentially sort of sufficient in terms of mitigating some of the macro headwinds here or is there anything else youre contemplating internally at the moment just in terms of tweaking your go to market on a go forward basis.
Yeah.
Yes.
The stack and step to me were meant to be.
The market opening strategy in other words.
As you remember we launched we were adamant about a couple of principles, we said we.
We don't want to be in the service business.
We wanted to have a distributed model.
And at the same time, we were.
We're introducing a first of its kind product the like of which did not exist in the marketplace.
And at the same time there was.
A total paucity of data.
That show the customer what is possible to do with the protein graph.
Yes.
We managed to two.
Commercial success of $6 6 million in the first year that was a limited release year in 15, and a half the year after but ultimately.
The pace of publication from customer was slower than I had hoped.
And what the stack and to do was to let a customer.
Get access to data much much faster than bringing an instrument in house.
Our ramping up of studies of scale getting to data and publishing it.
That's it.
Thesis or that hypothesis prove to be correct. Because there is so much demand.
Sure.
For the capacity that we built in the stack by the way we might have to actually expand that capacity because I don't want the customer experience to be such that they have to wait a long time in order to go from.
Expressing an interest to get sample process tell us giving them data.
So I think in that.
Content.
Yes.
Synergy terms.
Access to data.
Okay.
That problem.
And by the way in terms of the customer profile the stack in the Sip also.
And the type of customer profile that they address.
<unk> was mostly.
Geared towards targeting a generic ophthalmic.
That is not really a mass spec users just.
Once the data and I think eventually with understanding besides what comes from that type of a biological data. They may eventually become a mass spec user or they may bring the protium <unk> in house.
And then second the peptide to the stack to get process, but really the stack is geared towards the genomic customer.
It is.
Is mostly geared.
Towards the proteomic customer or that or the traditional mass spec.
Yes.
But if the business model largely.
Capex business model to invest a lot in terms of a mass spec, but then they really don't have a lot of capital left over for consumable.
Which is really required with our business model so what the what.
The Sip does is it less that customer bring the capex in house.
In terms of the loan are now our expectation is that a significant number of these customers will end up buying it but then to use whatever money. It is instead of buying debt instrument to actually buy samples run the studies and get these guys to find secure funding and others for them to eventually scale up under assay. So I.
That did the solution.
The problem that these two solutions offered is a very different one than the macro picture in my mind largely it was opening up the market I think the macro is just making it difficult for us the sales cycle is longer we're seeing.
A significant slowdown in China that I don't have visibility to the resolution over the coming couple of quarters.
I think it's tough, but I do think that we're making.
The REIT status.
And I don't see a need to make any additional kind of strategic pivots or strategic changes.
To do this I think the next real big.
Turn if you would in the flywheel is going to come when customer publications comes because what <unk> did was it makes it possible to access content proteomics content at scale speed that wasn't previously possible and then the next the next important then.
If you would milestone is the why should I care about that content, which is what is the value of that biological insight in terms of making me make decisions clinically or scientifically.
In terms of I don't know biomarker discovery and others and those are the kind of.
Real milestones that are going to drive adoption and it's just publications from customers and the beauty of it is that the visibility that we have.
And what the customers have done with the work really is validating in what we would expect that to just even better than my expectation by far by the way.
Got it that's super helpful.
And just a couple of quick follow ups here. So on the on the flip side of things have you sort of started loading those first instruments, yet or is that still ahead of you give us a flavor I know you mentioned sort of good progress, but any flavor around.
The number of customers that are interested in accessing the podium graph through ship and then.
Rick follow up to your comments on just the cadence of publications and how important that is.
Out of all the pre prints and bio archive at the moment, either one or two that are particularly positive.
In your mind in terms of unlocking adoption for the for the XD.
Yes, I'll take the first one just on the Sip we have we have placed instruments under that program.
And.
I'd say, it's a handful maybe a little bit more than a handful.
And so.
That came with our consumers.
Consumable purchase.
And again, we play season accounts as Hamid said, where we fully expect them to purchase.
Yes.
They may or may not but they don't theyre not obligated to but certainly we hope to get them excited about the data that they they'll run and so we have had some good uptake with that with that program. Both in the second quarter in the third quarter and we expect to continue that in the fourth quarter as well.
And Josh Let me, maybe just take the one on the publication side of it which is.
The bio archive papers, I would say about half of them actually probably more than half of them are currently under review at various different journals now here's the interesting part of it which is the.
The early ones that were submitted have all gone through one round of revision.
Sure.
Basically means that they are very close to kind of being accepted and to come out.
And here is the most important part of it which is those papers.
Or are in what I consider to be the very very kind of a top journal either the top one or two journals that you can imagine.
The sister journals from from dose and that just really reflects.
Like the level of science that became possible. When you did unbiased proteomic at scale deep unbiased produce at scale and I say that because it's very easy to do a single shot proteome make meaning of neat injection in the mass spec get $5 600 proteins and to do that at scale.
But to do deep proteomics at scale.
There is no other solution other than that other than Crs prettier graph that scale and so the papers that are coming to us are all in great journalism and by the way.
You and I were in a patent altogether when I had predicted that by the end of next year, we're probably going to see the first population of scale deep unbiased proteomics study get underway I still believe thats going to be the case and that just really falls in the realm of what was not possible now as possible. So I think.
What I'm what I'm excited about seeing is really just the value of the biological inside of this content I think that would fundamentally has the potential to fundamentally shape.
So many changes in medicine and science.
Got it Super helpful. Thanks, guys I appreciate the time.
Thanks, Tim.
Thank you for your comp.
Our next question comes from retail.
<unk> from Jpmorgan.
Your line is open.
This is Martin on for Richard Dahl from Jpmorgan. Thank you for taking my question.
You touched a little bit on that.
<unk> remarks, but perhaps you can compare and contrast, what you're seeing.
Q2 came on the macro front and then what are you seeing outsized one Ken is there any.
Suddenly have degeneration.
Okay.
So let me take that one in terms of what we're seeing just on the macro front.
Look I think it continues to be.
Pretty similar throughout I think.
The uncertainty.
Is something certainly in the second and third quarter around.
Inflation in the general macro trend of are we going into recession or are we not.
Really just caused our customers too.
Kind of elongate their purchase decisions.
Inc.
About their budgets I think as we get into the end of the year here that that trend continues certainly on the commercial side, where we are seeing customers just be more thoughtful.
As we've said certainly for proven technologies.
Companies that needed other mass spec will go buy another mass spec, but for new technologies, such as sphere, they're just more questions that are answered and need to be answered and we've also seen approvals need more more improvers if you will.
And so we continue to see that I think that's just the general uncertainty I think the only thing that may have changed a little bit in the third quarter and fourth quarter was just the.
The uncertainty around the government funding and so I think again, we don't have much if any exposure around that but we do have some and again I think thats just the availability of the funding will is the government going to shut down or not shut down.
It does create an impact on some of that funding. So again I think it's been pretty steady if you will in terms of the uncertainty.
And hopefully as we move in through the fourth quarter and into the new year. Some of that gets resolved both in the macro economic.
But also the government funding circles as well.
Okay. Thank you and then on your updated guidance, you're now expecting yet.
Well, we have of the pirates.
So can you maybe unpack for us what are you.
Data assumptions for <unk> and are you assuming any type of budget flush in light of the uncertain.
Background.
Yes.
In terms of the.
I think the guide to the lower half I think again, it's just something around.
The really the.
Uncertainty if you will just for us given the size of the numbers, we're talking about here.
Again, as we've said one or two deals can can be the difference there.
So again I think we're just trying to as we see and look out for the balance of the quarter here just some of that uncertainty creeping in as I, just talked about and so if a deal goes one way or the other that's the difference there and so we're just trying to be mindful and thoughtful around that in terms of.
That overall uncertainty and.
And so I think that Thats really what what's driving it is.
Is something just to kind of be mindful I think I think that's really really what we're what we're seeing.
Thank you.
Thank you.
This concludes our question and answer session I would now like to turn it back to Amit for data.
Thanks, So much everyone really really appreciate participating on this call. Thank you.
This does conclude the program you may now disconnect have a good day.
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Good day, and thank you for standing by welcome.
Welcome to the <unk> third quarter 2023 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.
To ask a question during the session you will need to press star one on your telephone.
Youre, an automated message if I can get your hands right.
To withdraw your question. Please press star one again.
Please be advised that today's conference is being recorded.
I will now hand over the conference to our first.
First speaker today carry mandeville.
Just your relation please.
Go ahead.
Thank you earlier today <unk> released financial results for the quarter ended September 32023.
Received this news release or if you'd like to be added to the company's distribution lines based on an email to investor at Teradata.
Joining me today from <unk> is Amit Birk nod, Chief Executive Officer, President and Chairman.
And David Wang Chief Financial Officer.
Before we begin I'd like to remind you that management will make statements. During this call their forward looking statements within the meaning of federal Securities laws.
These statements involve material risks and uncertainties that could cause actual results.
So materially differ.
Okay.
Information regarding these risks and uncertainties.
Section.
<unk> looking statements in the <unk>.
Press release issued today.
For a more complete list and description. Please see the risk factors section of the company's quarterly report on Form 10-Q for the quarter ended September 32020, great and in its other filings with the Securities and Exchange Commission.
Except as required by law <unk> disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
The conference call contains time sensitive information and is accurate only as of the live broadcast November seven 2023 with that I would like to turn the call over to Amit.
Thanks, Carrie and thank you everyone for joining us. This afternoon I will begin our call today with a review of our third quarter results as well as the progress, we're making across our core focused areas.
To drive growth.
Then I will turn the call over to David to provide more details on our financial results.
I'd like to start by thanking our incredible team for their hard work and dedication to our mission Thats here, we're pushing the boundaries and forging an entirely new market in proteomics amidst a very challenging macroeconomic backdrop.
Even in the best circumstances, developing a new market is never easy.
Our team is working tirelessly to serve our customers and help them realize what is possible using the <unk> product suite.
We ended the third quarter with $4 $2 billion in revenue, increasing 5% year over year, and approximately $381 million of cash cash equivalents and investments on our balance sheet.
Given our performance year to date as well as these ongoing challenges in the current macro environment. We now anticipate coming in at the lower half of our revenue guidance range of 60 million to $80 million.
On our last earning calls we outlined some of the challenges that are impacting near term adoption about technology as well as the actions, we're taking to mitigate them.
First making it easier to access mass spec based proteomic data.
For proteomics and mass spec expert customers introduced this strategic instrument placement program or Sip to enable immediate access to the Proteus graph and helped generate the data needed to secure funding and sample to conduct larger subsequent studies.
Biologists and genomics this customers.
We introduced this theater technology access center or stack.
To enable access.
So a simple to conduct the first study and apply the biological insight provided by the project graph.
This will accelerate publication that help researchers to secure funding for future studies and investment and bring you in workflow in house.
In addition building market awareness and continuing to lay the groundwork for market adoption with more substantial market development efforts designed to shorten the sales cycle and enable more data to become publicly accessible.
We're increasing market education with expanded outreach events.
And we're supporting potential customers with proof of principal studies and examples of use cases, we got application lab.
We're making progress across these efforts and I'll share more details on each throughout the call today.
We have shown.
Along with very early customer data that deep unbiased proteomics at scale as possible and we're forging get paths forward with the broader research community.
Our papers are being submitted and published from our partners and customers with exciting data as well as great interest in stack and our recently launched proteome XD advocate.
I have strong conviction in the unique benefits of our technology and the differentiated insights that we offer to <unk> customers.
I remain convinced that was third party data becomes increasingly accessible to a broader research community our market development efforts will pay off and we will see an inflection point in adoption the size of studies and ultimately revenue.
We're making strong progress here despite market headwinds.
That said this has been a year of learning and adapting as we change the status quo proteomics research.
We're constantly refining our approach as we figure out how to advance adoption of deep unbiased proteomics at scale.
Im confident this will happen it will take time, particularly in this challenging macro environment.
In the near term, we continue to focus on our key critical areas to develop our business first enabling breakthrough discoveries with the project got product suite second demonstrating the power of our technology and third capitalizing new applications and markets.
Starting with our first objective of increasing the availability of public data and publications to validate the value of the <unk> graph.
Whereas there are 180 public presentations in 48 posters or presentations by customers.
This has also been an exciting year for publications with fixed manuscripts submitted to pre print servers to date.
Line of sight to another half a dozen that have bigger will be submitted to peer review this quarter, the vast majority to high impact journals.
These applications cover a range of applications, including analyzing PQ Tls understanding the body's response space flight, finding new biomarker signatures of batten disease, and validating the quantitative and precise data enabled by the <unk>.
In October two new papers were added to bio archive.
Researchers from Auburn University published a second manuscript using the peripheral graft following an earlier one in June.
Using skeletal muscle samples to understand molecular signatures effected by aging and resistance training finding a setup proteins in cellular senescence pathways that we're up regulated over 104 following resistance training.
Second researchers from Brigham and women's hospital in partnership with <unk> diagnostics have developed and validated three distinct measures of biological age in the manuscript now available on bio archive.
These researchers have developed a robust.
Predictive biological aging phenotype, which combined with DNA methylation and multi omics generated two biomarkers. Both biomarkers demonstrated strong association with chronic disease and mortality outperforming current biomarkers across their discovery and validation cohorts.
Additionally, these biomarkers provide opportunity to identify clinically relevant.
Connections central to the aging process.
This quarter product normally presented exciting data from their case controlled lung cancer cohort demonstrating unprecedented early detection performance using a multi omics approach, which includes the project graph for non small cell lung cancer.
Using two different subsets.
<unk> at the 2023 World conference on lung cancer.
And chest annual meeting the highlighted validation data showing significantly higher sensitivity and specificity to detect lung cancer, particularly for early stage lung cancer than previously shown in presentations were published data.
The results of these data sets show the protium graft helped to identify 4440 proteins and over 30000 unique peptides.
On average per subject.
Previously published plasma proteomics studies that included over 500 subjects has typically detective fewer than 600 proteins on average per subject.
These presentations reflect that.
The first customer data set demonstrating the value of the content that can be.