Q3 2024 Bionano Genomics Inc Earnings Call
Speaker Change: Good day and welcome to the BioNana 3rd Quarter 2024 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Holmes from Investor Relations. Please go ahead.
Thank you, Operator, and good afternoon, everyone.
Speaker Change: Welcome to the BioNano third quarter 2024 financial results conference call. Leading the call today is Dr. Eric Holmlin, CEO and principal financial officer of BioNano, and he's joined by Mark Adamczyk, BioNano's vice president of accounting and principal accounting officer.
Speaker Change: After market today, BioNano issued a press release announcing its financial results for the third quarter 2024. A copy of the release can be found on the investor relations page of the company's website.
Speaker Change: BioNano expects to file its Form 10-Q no later than 5.30 p.m. Eastern Time tomorrow, November 14th.
Speaker Change: Certain statements made during this conference call may be forward-looking statements.
Speaker Change: including statements about BioNano's revenue outlook, profitability, cash runway, cost savings initiatives, and commercialization and product plans. Such statements are based on current expectations and there can be no assurances that the results contemplated in these statements will be realized.
Speaker Change: These four looking statements are based on information available to BioNano today, November 13, 2024, and the company assumes no obligation to update statements as circumstances change.
Speaker Change: In addition, to supplement BioNano's financial results reported in accordance with U.S. Generally Accepted Accounting Principles, or GAAP,
The company reports certain non-GAAP financial measures.
Speaker Change: A description of these non-GAAP financial measures, as well as a reconciliation to the nearest GAAP financial measures, are included at the end of the company's earnings release issued earlier today, which has been posted on the Investor Relations page of the company's website.
Speaker Change: These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. They should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.
Speaker Change: have no standardized meeting prescribed by GAP and are not prepared under any comprehensive set of accounting rules or principles.
Speaker Change: An audio recording and webcast replay for today's conference call will be available online on the company's investor relations page. With that, I would like to turn the call over to Eric. Please go ahead.
Eric Holmlin: Oh thank you David and good afternoon everyone. I'm pleased to provide you all with an update on the third quarter of 2024 as well as a report on our ongoing efforts to position BioNano to be more cache efficient while still driving the advancement of optical genome mapping for routine use in cytogenetics as well as our software business.
Eric Holmlin: In May of 2023, we began to systematically lower operating expenses and cash burn by reducing headcount.
Eric Holmlin: or plan to use optical genome mapping on a routine basis.
Eric Holmlin: which is a group we estimate to be about 150 customers.
in May of 2023.
Eric Holmlin: to 125 as of September 30, 2024, which we further expect to come down to less than 100 employees entering 2025.
Eric Holmlin: In September of 2024, to further reduce expenses and cash burn, we implemented a shift in the go-to-market strategy that went away from heavy spending on growth of the OGM install base.
Eric Holmlin: any geography to a focus on conserving cash and concentrating on those customers who use their SAFIRE and STRATA systems routinely in cytogenomics.
Eric Holmlin: We estimate that during the six to seven trailing quarters, we have reduced non-GAAP operating expenses by approximately $100 million on an annualized basis and reduced the cash needed to reach profitability substantially.
Eric Holmlin: The transition in operating and go-to-market strategies is not without challenges. The results in this recorder reflect the transition the operation is undergoing, which is resulting in several one-time charges that affect the P&L and the balance sheet.
Eric Holmlin: Overall, these are transitory non-cash charges that we don't anticipate seeing again at this magnitude.
Eric Holmlin: including return to growth in consumable sales, in particular in connection with sales of OGM consumables to customers using it routinely as a replacement for karyotyping and fish.
Eric Holmlin: especially in analysis of hematological malignancies, constitutional genetic diseases, and for analysis in bioprocessing applications such as cell and gene therapy.
Revenue was $6.1 million, which importantly comprises
Eric Holmlin: 6.6 million in sales of core products and softwares, which is in line with our pre-announcement, but is then offset by $500,000 because of a write-down of age receivables.
that is tied to our discontinued clinical services product.
Q3 2024 overall represents a 35% year-over-year
Eric Holmlin: decreased compared to the same period of 2023, but keep in mind that this decrease includes a 29% reduction in revenues tied to the discontinued clinical services products alone.
Eric Holmlin: The remaining 6% decrease is driven by the shift away from instrument sales both in the China market as previously discussed, but also as a result of some system sales in other regions that were delayed relative to our expectations.
Eric Holmlin: The OGM install base grew to 368 systems during the quarter, which represents a net increase of 67 systems during the last year and 22% growth over the install base of 301 systems at the end of the third quarter of 2023.
Eric Holmlin: Overall the rate of the increase of install base is slowing and that is a direct result of our shift in go-to-market strategy and cost-saving initiatives.
Eric Holmlin: We sold 7,835 flow cells in Q3 2024, which represents a 27% increase from the 6,176 flow cells sold in the same period last year.
Eric Holmlin: Looking into the results a bit more, we view this as a key metric as we drive increased utilization from the existing customers who are running optical genome mapping routinely.
Eric Holmlin: Sales of flow cells in the second quarter of 2024 relative to Q2 2023 were flat.
Eric Holmlin: And so we believe this return to growth we're seeing in this quarter is an important sign that our focus on growing utilization within this current installed base is working.
Eric Holmlin: Going on to the next slide, some of the key highlights and other areas of the business include
Eric Holmlin: publications that keep growing. With 83 publications in the third quarter, the total publications grew by 12% compared to the same period in 2023.
We believe publications in the overall critical mass of
Eric Holmlin: published data to be a reflection of not only the ongoing expansion and utilization of optical genome mapping, but potentially a leading indicator for increases in adoption and utilization going forward as global acceptance
increases based on the proof sources in the scientific literature.
Our clinical studies program.
Eric Holmlin: continuing publication and presentation of data. The programs are being led by key sites that participated in the creation of the trials and enables them to continue without as much of a cost burden on BioNano.
Eric Holmlin: In fact, related to the HEIM trial, in a preliminary readout from the arm of this trial looking at the decision impact and health economic impact of OGM versus traditional methods.
Eric Holmlin: Dr. Michael Phillips from Harvard Medical School presented some interim results at the Cancer Genomics Consortium meeting in St. Louis last August.
Eric Holmlin: The data showed in those results that optical genome mapping detected pathogenic findings in 42% of cases that were otherwise negative when they were evaluated by the current standard of care testing.
Eric Holmlin: and OGM results yielded a turnaround time of just four days at a lower cost compared to karyotyping alone and clearly lower than the standard combination of karyotyping and fish.
Eric Holmlin: Initiatives in support of reimbursement of optical genome mapping by insurance companies and other third-party payers are progressing.
Eric Holmlin: As we previously reported, a Category 1 CPT code was established by the American Medical Association in June of this year with the descriptor of cytogenomic genome-wide analysis for hematologic malignancies.
Eric Holmlin: to evaluate structural variations and copy number variations using optical genome mapping.
Eric Holmlin: Now, newly established codes are sent annually from the AMA to the Center for Medicare and Medicaid Services, or CMS, for pricing and listing on the clinical lab fee schedule for the following year.
Eric Holmlin: Preliminary prices for new codes were published September 25, 2024. We expect the final pricing to be established by the end of November or early December this year, which means that beginning in January of 2025, labs will be able to use
Eric Holmlin: to bill for their use of optical genome mapping using this new code which is 81195.
Eric Holmlin: Now, we have continued to ship commercial production units of the Stratus system, and we are continuing to see good demand for Stratus system in our focus, focus geographies of Europe, France, and the United States.
U.S., Canada, and Israel.
Eric Holmlin: Customers are working through the differences between Sapphire and Stratus, and we're learning how to support the Stratus system effectively, which is the way it works when a completely new instrument, consumable and computational system enters the market, even though our commercial shift.
Eric Holmlin: places less of an emphasis on growing the install base. We are focused on expanding utilization amongst routine users with higher sample volume and customers recognize that Stratus addresses their higher throughput needs.
Regarding
Eric Holmlin: Operating cash burn in the quarter was approximately $14 million, a 46% reduction compared to the approximately 26%.
Eric Holmlin: million in the prior year, and a 33% reduction compared to the approximately 21 million in the second quarter of 2024.
Eric Holmlin: These results are really important as they reflect the success of our ongoing efforts to reduce expenses and cash burn.
Eric Holmlin: We expect operating expense to reduce further into 2025 as a result of actions taken.
Eric Holmlin: in September of 2024. Our cash and cash equivalents and available for sale securities as of September 30, 2024, were $23.4 million, of which $11.4 million was subject to certain restrictions.
Eric Holmlin: Now, GAAP gross margin for the third quarter was actually negative 139 percent.
Eric Holmlin: compared to 30% during the third quarter of 2023, and non-GAAP gross margin was 26% compared to 32% in the same quarter last year.
levels.
Eric Holmlin: So both GAAP and non-GAAP margin were impacted by also the $500,000 write-off in revenues related to AIDS receivables from clinical services.
Thank you very much.
Speaker Change: On the next slide, we summarize some of the financing activity in the third quarter and subsequently.
Speaker Change: We have completed two registered direct offerings and raised capital with our ATM.
Speaker Change: In July, we completed a registered direct offering with upfront gross proceeds to the company of $10 million and a concurrent placement of clinical milestone-linked Series A and Series B warrants.
Speaker Change: upon the cash exercise at an exercise price of $0.57 per share. The Series A and Series B warrants are subject to stockholder approval and we will be convening a special meeting of stockholders on November 27, 2024 in connection with the warrants.
Speaker Change: In October, we raised $3 million in gross proceeds in another registered direct offering, this one with Series C and Series D warrants that could add an additional $6 million in gross proceeds.
Speaker Change: upon exercise at an exercise price of 30 cents per share. The October warrants are also subject.
to shareholder approval.
Speaker Change: Moving on to the next slide and looking ahead to the fourth quarter and remainder of the year, our focus is very clear.
We're driving the adoption of
Speaker Change: via software for analysis of optical genome mapping across routine use sites as we believe adoption and utilization of via enables customers to expand utilization and therefore purchase more consumables.
Speaker Change: to increase utilization and importantly add new assays to their menu, so additional applications of optical genome mapping beyond what they have initially been running.
Speaker Change: We are maintaining our focus on driving the initiatives for optical genome mapping reimbursement. We talked about the
CPT code which
Speaker Change: was established and pricing is underway, but we have also sought.
coverage determinations from Medicare administrative contractors such as Moldy X.
Speaker Change: And we are working to improve the gross margin profile by reducing the cost of goods sold and our efforts to increase sample pull through will also improve gross margin.
Speaker Change: With regard to guidance for the fourth quarter and full year, we expect Q4 revenues to be in the range of six to seven million dollars.
Speaker Change: We understand that we may be seeing slower growth in the adoption and expansion of OGM as a result of these expense reductions, but we believe that cash preservation and reaching profitability are more important targets than growth at any cost.
Speaker Change: So in closing, our results this quarter reflect improving momentum for optical genome mapping utilization with the gross and flow cells sold despite overall revenues which have come in a little bit lighter than expected.
Speaker Change: Our disciplined approach to reducing operating expenses and cash burn has been challenging, but it's necessary to preserve the value of optical genome mapping.
Speaker Change: that's being brought to labs around the world and impacting their clients who they're using it for.
Speaker Change: I'm very proud of our team's determination, grit, and perseverance as we prepare for these new opportunities and challenges in the future.
Speaker Change: And with that, operator, please open up the line for questions.
Speaker Change: Thank you. If you would like to ask a question, please press star 1-1 on your telephone. You will then hear an automated message advise that your hand is raised. If you would like to remove yourself from the queue.
Speaker Change: Press star 1 1 again. We also ask that you wait for your name and company to be announced before you proceed with your question
One moment while we take the first question.
Speaker Change: And the first question will be coming from Sung Jai Ngan of Scotiabank. Your line is open.
Speaker Change: Hi, thanks for taking the questions. Eric, I'm sorry if I missed it, but did you guys update on the status of the ionic sample prep system? Is it still slated for launch later this year? I'm just kind of curious.
Eric Holmlin: I didn't specifically update and you know we've seen amazing data in fact at ASHG
Earlier this month
some of the beta users.
gave talks about the progress.
Eric Holmlin: You know, we don't expect the rollout like the full commercial rollout.
Eric Holmlin: yet this year and would anticipate that being into next year, but nevertheless the program is progressing and demand is high for that system.
Speaker Change: Got it. And then just see, great to see the target accounts, you know, there's significant room for growth there. Could you maybe talk about kind of what's the growth potential for that?
Speaker Change: instrument placement or through just, you know, continued increase in utilization, if you could just provide more color there.
Yeah, sure. So,
Speaker Change: The 150, and this is a, you know, a rough estimate, but
That number comprises, I think, two groups.
Speaker Change: Groups which are already in routine use and what we would call a well-established or maybe a mature user Mature implies that they're not still growing and that I don't want to imply that here, but it includes
Speaker Change: users that are, you know, familiar with the system, up and running, fully trained, and running on a routine basis, and it includes
and...
production scale use.
What I want to.
Speaker Change: say directionally is that this group accounts for the vast majority of the consumables that are purchased, probably 80 or so percent of
Speaker Change: You know consumables revenues and so While we don't break out their specific
Speaker Change: you know like revenue per system per se, I think you know you can kind of connect the dots.
there and, you know, 80% of what we've reported.
across this.
Speaker Change: Now it's still pretty skewed between those that are running routinely and still those that are getting there but I think that's where they're at currently.
And, you know, we see the...
Significant potential for them to grow because
Speaker Change: Almost every lab, not every single one, but almost every lab that's counted in the 150 is running one single indication. There are a handful that have run, that have validated multiple, but that's the minority, certainly less than 25.
Speaker Change: And so, you know, as they add additional indications, their consumables need will grow and therefore consumables purchases and revenues will grow.
Speaker Change: typically not always but typically they pick their highest volume indication first and go for that and so you know I think that as they add additional indications
Speaker Change: revenues will grow, but it's not like they're going to double.
overnight, but there's the potential.
Jesus.
Speaker Change: Got it, that's super helpful. And then just lastly for me, just on your cause.
Speaker Change: Are there still big levers that you can pull there from manufacturing efficiency side of things, or is it largely kind of overhead absorption from here on out just from the volume growth?
some of the critical components of the chip consumable.
Speaker Change: So those will be lower cost providers. There is a volume component to that, but those would be lower cost providers overall. So that'll just reduce the materials cost. A lot of the...
you know, reduction in head count.
Speaker Change: is combined with a consolidation of, you know, facilities and so forth. So there are going to be some reduction in overhead costs that are not necessarily...
Variable
or volume-based, and then, of course, there will be the...
Speaker Change: the variable components so that overhead that remains will be spread over more and more.
Speaker Change: I think we have quite a lot of factors in play in connection with the reduction of the cost of goods sold.
Great, appreciate it.
Thank you Sanjeev.
Thank you and one moment for the next question.
Speaker Change: Our next question will be coming from the line of Jeff Cohen of Latin.
I'm sorry, Leidenberg-Fowlman, your line is open.
Speaker Change: Hi, thank you for taking our questions. This is Destiny on for Jeff. I wanted to quickly start with just a couple P&L related questions. I'm curious, this is kind of a two-parter, I'm curious to know
Speaker Change: what what you see the growth rate for the consumables being moving into 2025 and do you think it could be greater
Speaker Change: then typically expector that you are expecting based on the fact that CPT code will come to into effect. So you'll kind of have all that what's the word I'm looking for?
Speaker Change: So, you know, I'm going to speak just generally about what
David Holmes.
in acceleration and growth.
Speaker Change: You know, number one is the CPT code and other initiatives related to reimbursement.
which would enable customers who are currently running samples.
Speaker Change: but using a different methodology to switch without a negative economic impact in their lap, right? So the reimbursement initiatives across the board, whether that's in the U.S. where CPT code and.
Speaker Change: coverage determinations come into effect or outside the United States where there are other initiatives that that play a role. Reimbursement will help
Speaker Change: labs transition away from the standard of care and use optical genome mapping in more first-line.
Speaker Change: That's number one. Number two is something that I mentioned in response to a question that Sungji asked.
Speaker Change: And that is really within the breakdown of, you know, this universe of routine using customers, many of them.
are
Speaker Change: ambitious about their plans for routine use but not have not yet actually
crossed over into that threshold, so.
Speaker Change: There's nothing wrong and this is the norm, this is the sort of standard.
Speaker Change: trajectory that they undertake, right? So they bring the system in, the system gets installed, they get trained.
Speaker Change: They begin to sort of explore its scope and limitations and then they make a decision about how they're going to use it. And so there are quite a number of systems that are in that stage.
Speaker Change: And as they progress through and become routine users, then they will start buying consumables at a higher rate. So it's really about existing installed systems.
Switching over from, you know, onboarding.
Speaker Change: consumables growth and you know those things are going to be our focus.
users adopt the VIA software for optical genome mapping.
more samples.
Speaker Change: And so menu expansion via adoption, these are our big, you know,
factors that will drive utilization, consumables, revenue and so
in the future.
Speaker Change: Okay, got it. Thank you for that detail. I appreciate it. And I guess last one for me, I'll take the rest offline. I know you mentioned some delays, delays that impacted your top line this quarter. Is that something that was just a timing issue and it'll be reflected in Q4? And is it based into that guidance? Or is that one of the things that may be pushed off a little bit, a little bit longer?
Well, so, um...
Speaker Change: You know, certainly the dynamic is factored into everything that we're guiding for the fourth quarter. It's something that is just related to, you know, the sales cycle for capital equipment. And in particular,
Capital Purchases.
Speaker Change: You've been marching along with us for a while and I'm sure you remember that we have kind of two go-to-market models for new adoption. One is to sell labs the system and the other is for them to rent it. And the delays that I spoke about are delays.
Speaker Change: in system purchases. And so what we found was that, you know, some key customers
You know, had underestimated themselves.
Speaker Change: the time that was going to be required for them to successfully get these purchases approved.
Speaker Change: You know, we see them being completed, you know, in the near future and we're hopeful that some of them would happen in this fourth quarter, but we're being conservative about the fact that they may take longer.
Speaker Change: I lied, and I have one more question if I may. I'm wondering if you have any plans to initiate additional studies, but more in like a partnership fashion with another company, another larger player. What are your thoughts on that?
Speaker Change: Well, I think what Al Kachabe, the chief medical officer, and her team have done with our clinical studies program is
We have, they have recruited.
Speaker Change: You know, really stellar investigators to sign on and be a part of the studies.
and systematically now, you know, we have worked with.
Speaker Change: certain among those principal investigators for them to take over the trials and continue to advance them.
Speaker Change: But in each of them, as we have reported over the last several quarters,
You know, we reached our enrollment goals.
Speaker Change: And so those trials will continue. I don't want anybody to think that they are going to be paused as a result of our cost reductions. By handing the leadership over to folks for whom it's not their
Speaker Change: sole job, you can imagine that, you know, that could cause things to move a little bit more slowly, but we would expect them to continue.
Speaker Change: and generate publications and important data that will be helpful in ongoing things like continuing the reimbursement advocacy and then down the road getting optical genome mapping to be included in medical society guidelines and so forth. So the trials will continue.
Publications will continue.
Speaker Change: with regard to, you know, kind of the heart of your question about partnerships.
Speaker Change: We are in partnership with these institutions, and so that's a vehicle. And we do engage with and discuss potential partnerships with different
companies.
Speaker Change: and other groups. That's not something that we have a committed program in per se right now. We have a number of commercial relationships.
Speaker Change: with, you know, different companies, and so those are drivers of revenues for us, could be something that would result in a trial, and we remain opportunistic, but there's no definitive plans for that now.
Okay, thank you for taking our questions.
you destiny.
Speaker Change: Thank you. As a reminder, if you'd like to ask a question, please press star 1-1 on your telephone. And one moment for the next question.
Our next question is coming from Mark Massaro.
of BTIG, your line is open.
Speaker Change: Hey guys, thanks for taking the questions. So I guess, Eric, you placed five systems or net placements in Q3. I think the midpoint of your guidance for Q4 is seven. I recognize you have changed your
strategy of focusing on your existing install base.
Speaker Change: But, you know, that 5 to 7 number is down materially from the 20 that you used to report in prior years.
Speaker Change: So I just, I'm curious about the five and the seven. Do you think that those are reasonable, you know, I'm not asking for 2025 guidance, but do you think somewhere in that five range, a quarter is a decent place for us to think about 2025?
Yes.
Okay, long answers, but that's a short. That's okay
Speaker Change: That's helpful. And then as a follow-up to that, is there any way to give us a sense for how the launch of Stratus is going? You know, I'm not sure if you're able to disclose how many you placed of the five in Q3.
Speaker Change: or how many you've placed year to date. But you also talked about how some of the folks that may be looking to convert over are trying to understand how it fits or how it works.
Speaker Change: So maybe can you talk about things like ease of use or just, you know, I also, of course, recognize it's higher throughput.
Speaker Change: Are some labs just kind of evaluating if they need that level of throughput to justify the purchase, or are there other factors that are going into, you know, how we can think about the rollout of the stratus?
Yes, so you know the the rollout is
Speaker Change: You know, like we call it jump the queue so you could have a random access.
without waiting for
The batch
Speaker Change: to finish. So these are some features that Stratus has that Sapphire doesn't. And so those are also attractive to labs. But I think overall the demand and interest in Stratus is related to the higher throughput because labs see optical genome mapping as becoming
You know...
Speaker Change: That is the global standard. Optical genome mapping is the global standard in analysis for that particular application. And so, you know, there's definitely...
Speaker Change: an increasing understanding that optical genome mapping is going to become standard and so people are seeking to adopt stratus because of the higher throughput.
that out yet.
Speaker Change: But, you know, it's significant numbers, I mean, compared to the early days of SAFIRE going out. I mean, we've well eclipsed.
you know.
entire annual, you know, initial annual
Speaker Change: output or uptake of SAFIRE. So it's, you know, it's meaningful and significant.
Speaker Change: Getting adopted and implemented at lab sites. I guess we have kind of like two camps
One which is completely new to Stratus
Speaker Change: They don't have a SAFIRE and then labs that have SAFIRE. So labs that have SAFIRE, what they need to do, especially if they're routine users, is really do a cross-comparison.
Speaker Change: to evaluate Stratus and bring it on site. And that is something that they're working through. So when I say that they're looking at the...
Speaker Change: And so, you know, we see that as being a component of the overall validation. Also, you know, I think...
Speaker Change: 11 systems across 10 sites were early access systems, pre-commercial systems, and those systems have, you know, had some, you know, hardware components replaced as we've transitioned into the full commercial release.
Speaker Change: And so, you know, there's definitely a process of working through the newness and novelty of the instrument. And one thing I will mention about Stratus is that it's a completely brand new.
Speaker Change: consumable, which we believe, over time, is going to really improve.
The overall utilization
and workflow.
Speaker Change: It's a component of the higher throughput, but it's new the way that customers use it, the way that they load their sample onto it. It's new to us as well, and so there is a learning curve in connection with that.
Speaker Change: with that consumable. So we're in the early days of Stratis. It's going well. Demand is high and people are coming to it for the right reasons. The higher throughput and the overall benefits
in the workflow.
Speaker Change: Okay, that's helpful. And then I wanted to ask about the guidance, the reduction of the guidance here again.
Speaker Change: Maybe can you walk me through some of the components? I understand that if you place fewer systems
Speaker Change: There will be fewer, you know, less capital equipment revenue realized in the quarter. That makes sense.
Speaker Change: I just wanted to ask about the other line items in the other product categories, you know, in Q3, you had.
Speaker Change: really solid 27% growth in flow cells. I'm just curious how we should think about the rest of the business. And as we think about 2025, are you confident that you can, you know, generate growth in flow cells and consumables?
Thank you.
Yeah, let's sort of walk through this stuff.
Speaker Change: starting with the consumables. I mean, I think, you know, we've had a good track record of consumables growth, you know, that the sort of flatness that we saw in the second quarter was
anomalous. The return to growth, 27%, is solid.
What what we're
Speaker Change: optimistic about and what we do feel confident about is that consumables utilization and therefore revenues will continue to grow. I think we've got to be cautious about you know
quantifying that growth you know
too precisely.
Speaker Change: A driver of growth of flow cells sold in past quarters has been some of the new purchases. So when somebody buys a new system or rents a new system,
Speaker Change: they get consumables with it up front. And so as we lower the number of new systems that are going out, that contribution.
will be lower and so we've got to be
Speaker Change: We've got to be careful about it and, you know, so will the growth and utilization amongst the existing install base, you know, make up for that? That would be the question, but we remain confident that OGM consumables
Speaker Change: revenues will continue to growth and that's grow and that's that's really a principal revenue growth driver into
Speaker Change: When we, when we talk about, you know, what's moving around with guidance, it's really adjusting to the
the change in go-to-market, but also digesting this.
We had about a $500,000 write-down associated with aged receivables.
Speaker Change: You know, there remain about, I would say, 500,000 or so in receivables on the books. And so we'll have to see how those are treated in some of the future quarters. And so there's the possibility of additional write downs.
Speaker Change: I want to kind of give you some awareness of that. We've tried to factor that into guidance. So, you know, there's some ambiguity there. We just have to work through it as we start to work through the fourth quarter results.
Speaker Change: You know, but, you know, sort of digesting that discontinuation has been having its impact.
on the top line, perhaps in some unexpected ways.
And then, yes, the shift away from capital equipment sales.
Speaker Change: You know, that has an impact on revenues, having said that.
Thank you.
Speaker Change: you know, these new instruments, unless we're selling them to labs that
Speaker Change: are highly strategic and gonna use at a really high rate or labs that have reached the capacity of their SAFIRE system and therefore one stratus, but are otherwise experts in OGM. Like those are the customers that we wanna focus on now, importantly. But if we're selling them to,
Speaker Change: Any lab that just wants to buy OGM, that turns out to be very expensive.
for us and and a little bit counterproductive so
Speaker Change: The top line may suffer as a result of that, but cash out the door goes down. We're hopeful that consumables revenues goes up and that will drive higher margins. So it will be better business for BioNano going forward.
Okay, that's all very helpful. Thank you.
Speaker Change: Thank you. And that does conclude today's Q&A session. I would like to turn the call back over to Eric Holmlin for closing remarks. Please go ahead.
Eric Holmlin: Great, thank you Lisa and thank you to everybody who joined the call today and we look forward to updating you on our future progress. Thank you very much.
Speaker Change: Thank you all for joining today's conference call. This is the conclusion of the call. You may now disconnect.