Q4 2024 Repligen Corp Earnings Call
MJ: Good day, ladies and gentlemen, and welcome to Replicant Corporation's fourth quarter of 2024 earnings conference call. My name is MJ, and I will be your coordinator.
MJ: Additional information concerning risks related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K, and our current reports on 8-K, including the report that we are filing today as well as other filings, we make with the Securities and Exchange Commission todays comments reflect.
MJ: Management's current views, which could change as a result of new information future events or otherwise the company does not obligate or commit itself to update forward looking statements, except as required by law.
MJ: During this call we are providing non-GAAP financial results and guidance unless otherwise noted reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Replicants website and on SEC Gov. Adjusted non-GAAP figures in today's report include.
MJ: The following non Covid inorganic revenue and our revenue growth cost of goods sold gross profit and gross margin operating expenses, including R&D and SG&A income from operations and operating margin tax rate on pre tax income net income diluted earnings per share.
MJ: EBITDA and adjusted EBITDA as well as adjusted EBITDA margins.
MJ: These adjusted financial figure should not be viewed as an alternative to GAAP measures, but are intended to better reflect the performance of our ongoing operations now let me turn the call over to Olivier.
MJ: Okay.
Olivier: Thank you Sandra and good morning, everyone and welcome to all of 'twenty 'twenty four fourth quarter in your annual report.
Olivier: We're happy with the way we finished 2024 and in addition to reporting our financial results in detail, we will share all 2025 strategic priorities and provide financial guidance for the new year.
Olivier: So we have a lot of reasons to be positive about 2025, as we put specific 'twenty 'twenty four headwinds behind us and we see a return to growth for the bio processing market.
Olivier: I'm pleased to share that we achieved the midpoint of our November guidance, delivering fourth quarter revenue of $167 5 million and full year revenue of $634 4 million. Despite a sweep one 5 million exchange rate headwind in the quarter.
Olivier: The differentiation excellent execution by our team and better market conditions have enabled us to deliver a certain portion of the revenue growth ex COVID-19 in the fourth quarter obscures the previous year.
Olivier: All orders were also very strong in the fourth quarter with the highest order intake we've had since quarter two of 2022 and it was a seeks twaite causes that oldest outpace non coffee drove venue.
Olivier: In quarter four we were delighted by the strong performance from C. D M O's and equipments key market sectors that have been slower to recover.
Olivier: With this momentum and as our funnel continues to grow well well position as we onto a 2025.
Olivier: After a great freeborn in quarter three O C. D M business at an even better quarter. We say is on all of those high double digit sequentially. In fact, thanks to that very strong CD M will finish our full year 2024 sales growth was similar at C. D M on pharma, both up high single digits.
Olivier: We saw a similar pattern for equipment following a solid quarter sweet equipment was another important stand out in the fourth quarter with both sales and orders up more than 30% sequentially.
Olivier: Thanks to that strong equipment finish our full year 'twenty 'twenty four sales growth was similar for consumables and equipment, both up eight four cents and 10% respectively.
Olivier: At the franchise level or filtration had another excellent quarter, both from a revenue and order point of view and analytics had a record quarter both in sales and orders since we acquired <unk> in 2019.
Olivier: And finally 2024 has been a great year for new modalities with low double digit growth in both sales and orders as we built momentum with key accounts and new technology launches.
Olivier: Before entering into more detail I would like to say that managing to deliver 3% revenue growth in 2024, excluding colby and considering the huge headwinds in protein in China. The most with the fantastic execution of our teams and the uniqueness of our portfolio.
Olivier: And in fact, our full year revenue was in line with our initial outlook in February 'twenty 'twenty four adjusting for the restatement and additional currency headwinds.
Olivier: When I reflect on the full year. In addition to the forward momentum of the market on our resource I'm also very pleased with how the refugee teammates they could do it on the five strategic priorities, we set at the beginning of 'twenty 'twenty four.
Speaker Change: Oh, hi, probability funnel has increased through the year driving fourth quarter orders to their highest level over the last 10 quarters.
And even with very strong Q4 orders, we replenish the funnel.
Speaker Change: At the end of December a greater than 50% probability funnel was up 16% versus the end of 2023.
Speaker Change: Our greatest sales organization, including our extended care Com management team has done well in 'twenty 'twenty four training new lease at our top pharma and TMO accounts and improving our portfolio visibility.
Speaker Change: Next we launched several differentiated new products in 2024 of notes in May we launched our game changing cross flow or it's 10 RPM system. So first and only single use T. S. S. T stands for bench scale GMP production with in line fully automated protein concentration measurement.
Speaker Change: In December we launched the Abbvie pure double stranded RNA raising sold through our opus pre packed columns is raising using beat from our newly acquired <unk> business is remarkable in that it is a first affinity regime to removes a double stranded RNA impurity from transcribed RNA without heat of solvents.
Speaker Change: <unk>.
Speaker Change: These and other launches in 2024 hour offering innovative solution for customers unmet needs and add to our differentiated portfolio.
We estimate that about 80% of our business come from our highly differentiated technologies, which are cornerstone in helping to grow above the market.
Speaker Change: Our third priority was to further built on our wins in new modalities, our sales in new modalities have increased low double digits and now represents approximately 20% of our total revenue.
Speaker Change: Now have 25 accounts, we sell about $1 million.
Speaker Change: The next priority was the successful integration of meeting Nova and preparing for the launch of new single use mix of technologies.
Speaker Change: We successfully integrated <unk> with our freedom management team and we're planning to formally launch our single use mixes in quarter two of 2025.
Speaker Change: And finally, we further strengthened our discipline in cost control and expanded margin.
Speaker Change: Select rooftop consolidation and additional restructuring actions our operation teams have achieved targeted productivity gains.
Speaker Change: This has enabled us to finish the year with Q4 adjusted gross margin at 57% adjusted operating margin at 14, 9% and adjusted EBITDA margin at 29 persons for.
Speaker Change: For the full year, we successfully expanded our adjusted gross margin by 140 basis points Jayson will discuss these further.
Jayson: In addition to our stated priorities in 'twenty 'twenty four we have on boarded several it sounds leaders from across the industry to strengthen our bench and position us well for years of growth. This includes but is not limited to quality services product management and sales.
Jayson: We believe the diversity of talents and experience rate PGN has today will enable us to become further fitful girls.
Jayson: So moving now to our fourth quarter and full year of revenue and all of those performance as you saw in our press release. This morning fourth quarter 'twenty 'twenty four sales stepped up from third quarter by nearly 13 million to reach $167 5 million and $634 4 million for the full year.
Jayson: Excluding kavita this was our highest quarter in sales in quarter three of 2022, even with the higher than anticipated currency headwinds of sleep, one 5 million in quarter, four and $5 7 million full year <unk>.
Jayson: Excluding COVID-19, we delivered Q4 revenue of 13% and 8% sequential growth for the full year to 12, 'twenty 'twenty four non coffee the revenue growth came in as expected Upsweep awesome.
Jayson: Moving to orders our opportunity funnel delivered.
Jayson: Orders were exceptionally strong in quarter, four up 11%, both sequentially and year over year.
Jayson: As I mentioned this was the highest order intake we've had since the second quarter of 2022.
Jayson: For the full year 'twenty 'twenty four total orders were up 9% with all franchises except proteins at over 10 persons.
Jayson: During the quarter orders outpaced sales by 6%.
Jayson: For the full year orders outpaced non coffee sales by 4%.
Jayson: As it relates to customer segments.
Jayson: Quarter four was another strong quarter for pharma supported by our key accounts focus in quarter for pharma sales were up mid single digits sequentially.
Jayson: I single digit excluding COVID-19 year over year quarter for pharma orders reached a record level and approximately 20 person versus quarter four of 2023.
Jayson: While pharma revenue was similar between H, two and H one all of those were up about 15% and lending 17% for full year 'twenty 'twenty four.
Jayson: Within pharma the remaining challenge is small biotech.
Jayson: So our sales in quarter four we're on par with lowest quarter suite SaaS order inquiries over 10% sequentially.
Jayson: We are hoping this will continue in the first half of 2025, so we need to continue to monitor the funding environment.
Where pharma as a whole has been going very well for several quarters. We now see confirmation that CMO business has improved moderately and was a standout in the quarter.
Jayson: He is a case for both tier one and tier two CDM OS.
Jayson: <unk> revenue was up 20% sequentially and more than 40 paulson year over year orders in quarter. Four also grew more than 15% sequentially and 11% year over year quarter for orders from CD AMOLED was the highest since quarter one of 2022, excluding COVID-19.
Jayson: We saw activity accelerates through the year with each two CDM OS has about 40% higher than each one and orders nearly 20 paulson higher here.
Jayson: This really illustrates the recovery of a critical market segments that reflect the overall health of the ecosystem.
Jayson: Moving now to product type, whereas consumables has had a positive trend for several quarters equipment showed strong improvement and was another standout in the fourth quarter.
Jayson: Consumable performance was consistently has three through the year and remained strong in the fourth quarter with non covered revenues at more than 20% year over year and at the highest level since quarter two of 2022.
Jayson: Four was also the highest order quarter for consumable in the last 12 quarters up nearly 10% sequentially and 25% year over year, we are particularly excited by the traction we have due to our increased designing ATF in late phase and commercial products as well as single use consumable attached to our systems.
Jayson: Yeah.
Jayson: Moving to equipment the rebound we saw in quarter three accelerated in quarter, four with both sales and orders up more than 30% sequentially and more than 10% year over year.
Jayson: Excluding Cavite, all Q4 equipment orders reached a record level and why it was a slower start to the year for equipment, we saw rebound with each draw those approximately 25 paulson higher than each one.
Jayson: This reflects our success in play mounting ATF controllers at the majority of large pharma and TD ammo companions as well as starting to platform our T S F and chrome systems.
Jayson: Our top quality systems, coupled with our inline ph D flow technology, a really disrupting the market and we're excited about the future considering that every system players can generate a flow of consumable sales.
Jayson: Moving now to franchise level business highlights the top performers in the fourth quarter, who are filtration in prostate analytics, while filtration continued its positive trend through the year in analytics, we saw a strong turn up in the fourth quarter, I think being impacted by equipment softness in the prior periods.
Jayson: Proteins played out a bit better than we anticipated and we expect a return to growth in 2020 five after this year's results.
Jayson: Finally chromatography saw a nice sales pick up in the fourth quarter.
Jayson: Bringing down in each franchise and starting with filtration all year over year filtration revenues ex <unk> were up 30 person in the fourth quarter and 14% for the full year.
Jayson: So strong sales performance was across the portfolio, our largest and most diverse.
Jayson: Penetration revenue exceeded 370 million for the year up 9% and representing nearly 60 portion of our total revenue.
Jayson: Within the portfolio Excel ETF had a great cure and finished with topline goes above 50 persons.
Jayson: Filtration Aldo in the fourth quarter, we're up about 30 person both sequentially and year over year, helping us up well for 2025, excluding Covid Q4 filtration orders were the highest of the last 12 quarters.
Jayson: Stands and flow keeps all of those were also at a record level in quarter four.
Jayson: So overall, great performance in quarter four for the different components of our filtration business and with strong contribution from new product launches.
Jayson: As we see continued strength and momentum exiting 2024 hour expectation for 2025 is that this franchise will be up 9% to 12% on a reported basis and up 12, five to 15, 5% excluding colleagues.
Jayson: In chromatography, our year over year revenues were up 10% in the fourth quarter and down 3% for the full year.
Jayson: Chromatography revenue of 123 million, we presented approximately 20% of total revenue in 2024.
Jayson: As mentioned previously so full year decline was impacted by the higher mix of columns versus raising sales.
Jayson: On orders cuomo's slightly down for the quarter, but up mid double digits for full year 'twenty 'twenty four.
Jayson: In 2025, we will focus on converting more large pharma companies to opus pre packed column and chrome systems capitalizing on our powerful sales organization and leveraging technology differentiation.
Jayson: For 2025, we expect chromatography or revenue growth in the range of 10% to 15%.
Jayson: In 2024 hour proteins revenue was 74 million a decline of 28%, which was actually better than our initial expectations.
Jayson: For the full year, we collected almost 10% more protein orders and sales.
Jayson: It has been a reset year with OEM ligand demand down to the minimum level, we had numerous custom legal and raising wins in 2024 that we believe will become a true tailwind for the future.
Jayson: We are already seeing healthy demand for the IV pure double stranded RNA raising launch in December and look forward to introducing additional raisings for unmet purification needs in 2025.
Jayson: Our close collaboration with pure light on monoclonal antibodies and our appetite on key combined offering for imaging modalities should enable us to get back to 10% to 15% growth in 2025 with more control and ownership of these franchise feature.
Jayson: Finally, our process analytics sales in quarter, four up 11% sequentially and up 8% year on year.
Jayson: For the full year <unk> sales were 59 million an increase of 4% to 2023.
Jayson: We're seeing good order traction for analytics, which were up 10% for the year.
Jayson: In an overall very changing environment for analytical equipment and thanks to our fast growing flow V. P X and RPM product lines, we had a solid year. Overall, we are happy to have expand the highest quarter in the story of that business for both orders and sales in quarter four and with this momentum we expect the analytics revenue growth of five to 10.
Jayson: Portion for 2025.
Jayson: Jayson, we speak to the regional payer for money in his section, but I will comment that China was one of our key headwinds in 2024. We are currently planning on China sales being flat to 2024, and we remain optimistic about our long term growth potential in this region on the upside the rest of Asia Pac perform well in.
Jayson: 2024 with full year sales at 12%.
Jayson: Transitioning to our 2025 outlook, we expect our revenue to grow low double digits, excluding kavita and potential foreign exchange impact.
Jayson: <unk> is expected to track to our historical norms that is second half stronger than first half with Q1 being the weakest quarter and Q4 the strongest.
Jayson: Our full year guidance for 2025 is in the range of 685 to 710 million U S dollar up 8% to 12% on a reported basis and up 10% to 14% excluding coffee.
Jayson: The great order traction we had over the last two quarters combined with our stronger product management and commercial team and a better market environment gives us high confidence in achieving our targets.
Jayson: To deliver these results are 2025 strategic priorities will center on the following number one is accelerating and maintaining above market growth by further improving customer expands and focusing on accelerated growth at key accounts and in Asia.
Jayson: Number two is capitalizing on our best in class innovation with increased investment in R&D, we already launched solar plus in our analytics business at the beginning of this year. We will also be particularly focused on our single use mix of lounge as well as several new ligands and rating for new modalities numbers.
Jayson: Number three is increasing our margins by 100 to 200 basis points, combining pricing discipline and achieving all our P. S at TVT targets.
Jayson: Number four is maintaining our ambition to acquire one or two businesses to further strengthen our position with a focus on new modalities N P. A T and finally number five is becoming further fitful girls and positioning ourselves to be a significantly bigger business in the not too distant future.
Jayson: We will focus on implementing key tools for our human resources management and also creating a project management office to manage our key strategic program, including M&A integration site consolidation and other key EBITDA generating projects in.
Jayson: In summary, we're excited as we enter 2025, we have a great combination of the right team products and market environments to deliver upon our priorities and goals.
Jayson: Our strong balance sheet will enable us to act on our M&A ambition as we don't defy unique technologies that can complement our differentiated portfolio. We have a clear plan for delivering long term reworked for all shareholders and look forward to abating you on our progress for these new year.
Jason: I'd like to turn the call over to Jason for a report on our financial performance.
Jason: Thank you Olivier and good morning, everyone.
Jason: Today, we are reporting our financial results for the fourth quarter and full year, 2024, and providing financial guidance for 2025, unless otherwise noted.
Jason: All financial measures discussed reflect adjusted non-GAAP measures.
Jason: As shared in our press release. This morning, we delivered fourth quarter revenue of approximately $168 million in full year revenue of $634 million, achieving the midpoint of our guidance. Despite a three and a half million dollar exchange rate headwind in the quarter. This is a reported increase of 1% for the fourth quarter or up 3% on.
Jason: On an organic basis, which excludes the impact of acquisitions and currency headwinds as Olivier mentioned earlier, our fourth quarter non COVID-19 revenue growth was up 13%, which we believe is more representative of our performance.
Jason: There was no COVID-19 related revenue during the fourth quarter of 2024 versus $19 million in 2023 are.
Jason: Our full year 2024 revenue was flat and up 3% on a non COVID-19 basis.
Jason: Next was a net headwind of one point for the year and acquisitions contributed approximately two points of growth.
Jason: As Olivier shared color on our product franchise performance I'll provide more detail on the performance across the global regions, starting with revenue, where North America represented approximately 50% of our total full year revenue Europe represented 34% and Asia Pacific and the rest of the world represented 16%.
Jason: North America had a great fourth quarter being up 20% in revenue.
Jason: Asia was equally strong in <unk> with 20% revenue growth inclusive of China, while Europe was down 25% due to COVID-19 and protein headwinds.
Jason: For the full year 2024, it was encouraging to see our largest region North America, delivering 12% revenue growth.
Jason: Asia, Excluding China was also up 12% and for Europe, non Covid revenue growth was a 2% decline while reported was down 6%.
Jason: And finally, China was $25 million headwind for the year and represented about 3% of our 2020 for full year revenue down from about 7% in 2023.
Jason: On regional orders for the full year, North America was up 14%.
Jason: Europe was flat for the full year and fourth quarter orders were up 24% and Asia, Excluding China was up 30% for the year as.
Jason: As Olivier shared we are very excited about our ability to grow further in Asia, and we will be making investments to support growth.
Jason: China orders were down about 20% for the year. However, second half orders were up 6% versus the first half supporting our view that we have hit bottom.
Jason: Transitioning to profit and margins for fourth quarter 2024, adjusted gross profit was $85 million and we delivered 57% adjusted gross margin. This is down one eight percentage points versus last year, driven by a 3.5 point headwind cobot sales last year.
Jason: Volume price and productivity all drove net margin improvements in fact, 57% is higher than the implied guide in November as we delivered more productivity than expected and have strong momentum carrying into 2025.
Jason: For the full year of 2024, adjusted gross profit was $320 million up $10 million year over year and adjusted gross margin was 54% again slightly above the implied guidance with the upside from the fourth quarter.
Jason: Gross margin increased 140 basis points year over year, and 200 basis points, excluding the drag from lower Covid volume in 2023.
Jason: Outside Covid the year over year increase was driven by strong productivity and net realized price.
Jason: We'll continue to see Covid headwind on the year over year margin growth for 2025.
Jason: In 2024, we continue to evaluate our operations and assets to ensure we are well positioned to grow.
Jason: As a result, we have continued to execute activities under the restructuring plan started in the middle of 2023.
Jason: In the fourth quarter, we incurred approximately $45 million of nonrecurring restructuring and other inventory related charges. The majority was noncash inventory write offs from further product rationalization. There was also a result of further evaluation of the inventory positions of certain materials secured and turbulent supply condition.
Jason: <unk> during the pandemic.
The valuation also considered the market conditions in the last 18 months and incorporated updated product strategies developed with new senior product management, incorporating all of this demand and product mix projections were revised as a part of the company's annual strategic planning and budget sessions in 2024.
Jason: Where inventory exceeded the projected requirements to be used before reaching their exploration date, they're written off these charges are nonrecurring in nature, and therefore are reflected as expenses only in our GAAP P&L for the fourth quarter and full year and not in our non-GAAP adjusted results.
Jason: We believe the restructuring plan started in 2023 is essentially complete and we are well positioned to continue margin expansion in 2025 that said, we will continuously execute cost savings initiatives under our Rps productivity program and evaluate our site footprint, especially as we continue to make acquisitions.
Jason: <unk>.
Jason: Continuing through the P&L, our adjusted income from operations was $25 million in the fourth quarter and $82 million for the full year down approximately $5 million and $6 million versus 2023, respectively.
Jason: The four year reduction is driven by $11 million in 2023, Covid related sales and $12 million from the impact of bonuses returning to normal levels for 2024.
Jason: Partially offsetting these impacts was income growth through price manufacturing productivity and operating expense management.
Jason: Our full year adjusted operating expense expenses are up approximately $16 million versus last year almost entirely driven by an increase in performance based bonuses, we paid in 2020 for.
Jason: Fourth quarter operating expenses are up about 4% year over year and were essentially higher than the third quarter, primarily due to the nature of year end expenses sales investments and some additional costs for <unk> for the month of December.
Jason: The team has done a good job in 2020 for balancing cost management, while ensuring we are positioned to support growth and making necessary investments.
Jason: We delivered fourth quarter 2024, adjusted operating income margins of 14, 9% consistent with the third quarter and with that ended the full year with 12, 9% adjusted operating income margin near the midpoint of our prior guidance.
Jason: This was down 100 basis points from 2023, which as mentioned earlier includes about 300 basis points of headwind from prior COVID-19 business and bonuses returning to normal levels.
Jason: Our full year adjusted EBITDA margin rate was 18, 5%, which reflects the impact of greater than 5% point drag from depreciation on adjusted operating income.
Jason: Adjusted net income for the fourth quarter was $25 million and the full year was $89 million down about $4 million or 5% from 2023.
Jason: Improved adjusted other income from higher interest income, especially essentially offset the year over year reduction in adjusted operating income that said about $5 million with higher adjusted income tax provisions fell through to adjusted net income our full year adjusted effective tax rate was 24.
Jason: 4% in line with our guidance, but more than four points higher than last year.
Adjusted fully diluted earnings per share for the fourth quarter was <unk> 44 cents compared to 48 in the same period in 2023 for the full year 2024, adjusted fully diluted earnings per share was $1 58 about seven cents lower than last year.
Jason: Finally, our cash position at the end of 2024 was $757 million down $27 million sequentially after using $55 million for the settlement of our <unk> acquisition as expected.
Jason: This was partially offset by another strong quarter of strong cash flow from operations as we generated $42 million for the full year, we generated $178 million of cash flow from operations, 56% more than 2023 on improved working capital management.
Jason: I'll now move to an update on our guidance for the full year of 2025, I'll speak to adjusted financial guidance, but please note that our GAAP to non-GAAP reconciliation reconciliations for our 2025 guidance are included in the reconciliation tables in today's earnings press release and.
Jason: And for further clarity or guidance as fully inclusive of our December acquisition of <unk> that said, we do not expect to report acquisition related revenue for <unk> as their products will be used as a component in our appetite rather than sales.
Jason: Highlighted earlier by Olivier our revenue for 2025 is expected to be in the range of $685 million to $710 million. This represents growth of 8% to 12% on a reported basis or nine and a half to 13, 5% organic growth and 10% to 14% growth for our noncore.
Jason: With business.
Jason: Given the volatility related to currency exchange, we've assumed about a 150 basis points of year over year headwind.
Jason: Any additional fluctuations higher or lower could change that view, we report organic growth rates in our quarterly results removing the impact of currency and as mentioned earlier, we do not currently have acquisition sales to remove from our organic growth rates.
Jason: Olivier shared we expect revenues in the second half of 2025 to be higher than the first half. We expect the first quarter will step down a bit sequentially from the fourth quarter, but with year over year growth roughly in line with the lower end of our full year guidance.
Jason: We expect to deliver adjusted gross margins in the range of 51% to 52% with expansion from 2024. This is consistent with the 100 200 basis points of expansion that we have shared in our 2025 framework now, including roughly 50 basis points of headwind from foreign currency.
Jason: We expect gross margin expansion will be driven by increased volume leverage price improvements manufacturing productivity and strategic sourcing savings offset primarily by inflation and some 2020 for COVID-19 sales drag.
Jason: Manufacturing productivity will be driven by a replica and performance system across all categories of cost of goods sold.
Jason: We expect to see our price return to historic levels of low single digit given the current market environment.
Jason: Our current outlook on gross margin reflects the net effect of assume currency headwinds. However, it does not include any impact from potential tariffs being discussed in the current global trade environment.
Jason: We believe we would have minimal impacts from changes in trade with China, Mexico, and Canada that said, we continue to monitor the broader global trade environment as changes with Europe would have a much larger impact on <unk>.
Jason: We expect our adjusted income from operations to be between $99 million to $106 million or 14% to 15% adjusted operating income margin, which is up 102 hundred basis points versus 2020 for inflation and investments in operating expenses will be.
Jason: The key headwinds, we expect to more than make up for that with gross margin improvement from volume leverage price and manufacturing productivity.
Jason: Overall, we will continue to manage operating expenses to grow slightly less than sales as we continue to balance cost efficiency with investments that are critical for growth and necessary to be fit for growth. We plan to increase R&D spending versus 2024, we will invest in the sales team with more applications.
Jason: Support and added leadership in Asia, and we plan to make G&A investments in tools and processes.
Jason: Adjusted EBITDA margins are expected to be in the range of 20% to 21% for the year.
Jason: Turning to the P&L, we expect our adjusted other income to be down year over year by an estimated $5 million to $6 million or 23% to $24 million. This reflects an estimated one percentage point of lower average interest rate versus 2024. This may fluctuate with actual fed actions taken through the year.
Jason: Year, and it assumes minimal change in cash balance.
Jason: 2025, adjusted effective tax rate is expected to increase to an estimated 22% to 23%. The increase versus 2024 is ending rate of 24% is driven primarily by the absence of stock based compensation windfall benefit that we've seen in the last several years, we will continue to evaluate.
Wait tax planning options to improve from here.
Jason: Incorporating all of these items, we expect our adjusted fully diluted earnings per share to be between $1 67, and $1 76 up 9% to 18, respectively versus last year.
Jason: We've entered 2025 with a strong balance sheet, we will remain prudent in our spending while maintaining flexible dry powder for potential acquisitions or capex spending is expected to be down another 20% to 25% versus 2024 with our spending back to pre COVID-19 levels.
Jason: As we wrap let me reiterate our excitement to move forward in 2025, and our optimism about the bio processing market improving through the course of the year. We will remain laser focused on the execution of our strategic priorities accelerating and maintaining above market growth.
Jason: <unk> best in class innovation, expanding margins, maintaining our focus on strong M&A discipline, and ensuring our people processes and tools are fit and enabling our growth with that I will turn the call back to the operator to open the line for questions.
Jason: Thank you.
Jason: A reminder, in the interest of time, we kindly ask that analysts limit themselves to one question.
Speaker Change: I'll ask a question you May press Star then one on your telephone keypad, if you're on a speakerphone. Please pick up your handset before pressing the keys and to withdraw. Your question you May Press Star then two.
Jason: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Today's first question comes from Dan Arias with Stifel. Please go ahead.
Dan Arias: Hi, Good morning, guys. Thanks for the questions here Olivier maybe a place to start with just to be to ask how things have evolved here I mean last quarter you felt good about gmos in capital equipment, you were cautious on China and emerging biotech is there anything that shifted at all and it seems like order activity stepped up but I would love to just hear what you.
Dan Arias: Think is most important here to start the year and then I guess that specifically would be interested in those tier two city demo accounts that showed some good signs of life last quarter. How confident are you in the sustainability of the improvement and it looks like you are seeing here. Thank you.
Dan Arias: Yes.
Speaker Change: So the question so you're absolutely right I mean, what was really important for us in quarter four was a confirmation light both CDM on capital equipment turnaround that we started to see in quarter. Three was really fully confirmed and in fact, we had a huge acceleration on both sides I mean.
Speaker Change: Particularly on the Tdm OS side, where we had sales in the orders increasing tremendously in the in quarter. Four I mean, all sales were up more than 40, Paulson and our orders were up more than 11 portions, which as mentioned in the script boils back to almost the same amount of growth at <unk> was we had at pharma for the entire year and then.
Speaker Change: We love that because we think <unk> are like us the exact reflection of so it has those young entire ecosystem and you mentioned that there's a big geyser.
Speaker Change: That growth came from both tier one and tier two CDM owes them, but she has box he had a big guys. We see a lot of traction happening right now.
Speaker Change: They've been known to a lot of big deals and the nice thing is the Ontario ecosystem is starting to benefit from it right now for sure and then on capital equipment. So that the other one we're probably we saw an improvement earlier than others and we are learning quite a bold confirmation in our in quarter four sales were up more than 20, Boston and our orders were up.
At 25 folds since quarter four of last year. So we've seen a huge improvement and we see all state of the art system offering as they finished the year positioning us very well on that item.
Speaker Change: Okay. Thank you.
Speaker Change: The next question comes from Rachel <unk> with J P. Morgan. Please go ahead.
Rachel: Good morning, and thank you for taking the questions you guys. So I wanted to dig into the opportunity with ETF here. He mentioned that ETF for about 50% for the year. So could you walk us through how much revenue did you guys do an ETF in 2024, and then separately you've talked about getting back into a blockbuster drug for ATF. You've also alluded to the fact that you.
Rachel: When it gets back into a second blockbuster drugs. So how should we think about the timing of that benefit of getting spec gain is there anything assumed for these blockbuster opportunity into 2020 guidance or would that be upside at this point.
Rachel: Yes, that's right.
Rachel: So as you know the filtration business as soon as the biggest of all of our businesses is more than half is about 60% of all total business you did about $373 million in 2024, we would never given the exact numbers of eight yet, but it's the biggest part of it is the filtration the bead business, we have right now.
Rachel: And we are benefiting obviously from the fact, we got designing in mainly late phase is not commercial drugs over the last 12 to 18 months since the one I mentioned in quarter. Three is a blockbuster shows that he is on the market and the typical timeline when you will get.
Rachel: Confirmation youll designing new commercial drug you are getting the orders within the quarter Youre going to deliver all the hardware probably within the next six to 12 months and then you'll start to see as a consumable sales happening probably after a year or so so for us. It's all about making sure we have wins a quarter by quarter or two and then.
Rachel: We have some more and more of these installed base. Because then the consumable share is going to increase and in fact for the first time in the in 2024 hour consumables ATF sales were both Oh hardware sales, which is a sign like indeed, the installed base is becoming really significant right now. So it's the last piece I would mention is we've had.
Rachel: <unk> been very successful getting designing with Ats at all CDM organizing in fact nine of the top 10, tdm or without using HCA very broadly and I know a lot of pharma company also starting to use ats. So so becky is still to come so a lot of tailwind coming on the consumables side for sure.
Speaker Change: Great. Thank you guys.
puneet: The next question is from Puneet <unk> with Leerink partners. Please go ahead.
puneet: Yeah, Hi, Olivia this and thanks for taking my questions here I'll I'll wrap up and one question.
You know I think the question here is just in terms of hump.
puneet: Staying nimble are the order trends that youre seeing just given the backdrop of what we have seen from the peers a recovery that hasnt been as smooth as one would've expected even in back in 23 or 'twenty four.
puneet: Just trying to get a sense of that and then I'm wondering if you can elaborate if you know January and February order trends were also comparable to the Q4 end or maybe even a stronger if you could elaborate on that thank you.
Yes, absolutely so I'll start probably by talking about the fact in 2024 order intake has increased every single quarter as those yield there was a previous ones would be to keep from quarter, one to two quarter to quarter two to quarter three quarters for each quarter four and in fact between quarter four in quarter. One our order intake went up by 18.
Speaker Change: Paulson. So that's what we're very happy about because we've seen the progress of order intake really quarter by quarter, Ron I would add to that and I know, we don't want to talk too much about book to Bill anymore, but as you know we've been the first one really seeing book to Bill ratio above one and now it's like four 6% to seven quarters in a row. So that's why.
Speaker Change: We're also very confident that see the return to growth we've been experiencing now I see it's very sustainable and then the last piece I would mention is really if I look at all of our franchises excluding protein our order intake in 2024 was up double digit. So that's another very strong signal like we've got a strong portfolio of products.
Speaker Change: We have recently said like about 80% of our portfolio is very differentiated and I think that's a reflection of the growth we've seen in orders for the last several quarters now.
Speaker Change: And just to be clear on.
Speaker Change: In the quarter itself are you seeing any trends that give you confidence of world.
Speaker Change: Yes, so as you know very well puneet suites typically don't comment on the current quarter. All I can say is that we will.
Speaker Change: These things are doing well and we were absolutely sizeable volume.
Speaker Change: Okay. Thank you.
Speaker Change: The next question comes from Matt <unk> with William Blair. Please go ahead.
Speaker Change: Hi, good morning, it looks like based on recent order trends that there is pretty good visibility across the portfolio of course, the one area.
Speaker Change: Upon four different 25, and 24 is proteins and you alluded to one that is could you maybe speak to the visibility on the protein side to that 10% to 15% growth and maybe within that comment on any early traction you're seeing with the new product launch and anticipation of other product launches this year.
Yeah no. Thanks, Matt for the question, we knew like 2024 would be a tax shield for protein and in fact, we will enter thinking we have probably 30% to $35 million of headwind and it played out a little bit better than we expected not that much better, but a little bit better and the good news is as we knew which was the reason.
Speaker Change: Sure I mean, the business at the top two OEM partners, we had a small moves down to zero right now, so which means that with normal headwind coming from that side and what has been really good for us in 2024 ways. We progress really strongly on the rest of the portfolio and <unk> IV tied in our upcoming tons.
Speaker Change: Business, where we won several deals for custom legal custom raising its developments and as you. Just mentioned, we also launched our first iridium using the donkey beats the dollars drawn to the R&D, raising which has got really good traction so far but the best is to come I mean, we've got several product launches.
Speaker Change: Planning in 2025 us focusing mostly on new modalities. So we really think LIFO from this point we are today, we should be indeed be back to the double digit growth.
Speaker Change: We experienced there'll be before the heat with the older OEM partners and what I love, even more than anything else is we've got our destiny now has much more to the Indiana is so good that we can develop and launch our own ratings. Because then we can really control our own commercial activities to do logic stands and then <unk> collaborations.
Speaker Change: We still lies on the other side is also doing very well and we're working very closely with our partners on monoclonal antibody.
Jacob Johnson: The next question comes from Jacob Johnson with Stephens. Please go ahead.
Jacob Johnson: Hey, good morning, everybody.
Speaker Change: Maybe following up on Rachel's ATF question kind of in a bigger picture way.
Speaker Change: You mentioned Gen CDO <unk> have adopted ATF it seems like some traction with pharma recently.
Speaker Change: Why or why are you seeing these wins with ATF now it's a technology that's been around for awhile are the seeds that were planted years ago. As this key account strategy. Good execution by the sales team just curious kind of qualitatively, what what's been driving the ATF wins recently.
Speaker Change: Yeah, No. It's a great question Jacob and it's a bit of all what you mentioned 99. So what people may not realize is we've got to lap scale HTS solution, which is where people typically have stopped putting their hands on the on the ATF technology, meaning like typically may be 345 years ago, Although some of these comps.
Speaker Change: You would have started testing the technology at the lab scale and realizing that it was working really well and then they might have might have decided to stop getting either.
Speaker Change: A few years later and then had a couple of great successes are operating at larger scale and so on and then you know how he's with new technologies and what ones. The technology starts to be really well known in the industry that people are probably capable to adopt that faster on the and then just decided to move on maybe.
Speaker Change: In a record timeframe be versus what they would have done before so if I look at the last peak when we talked about in quarter, three which is a commercial drug I mean, it's fair to say that this one has been moving really fast and we start to see companies, telling us AAU U. We've got the proof of concept. This technology works really well so and considering.
Speaker Change: The regulatory changes are limited, we can probe excavator implementing that technology faster than we would implement a technology that is not known at all in the industry. So it's a bit of a mix you've got people who are faster than orders you've got people, who have been adding that handle new technology for several years.
Speaker Change: But all I can tell you is we still have a lot of wins new wins coming which is why we're also confident about the future and the wind on our beyond monoclonal antibody, where we start to see multiple wind under new modality side using ETF as well.
Speaker Change: Got it Super helpful. Thanks, a lot yet.
Speaker Change: The next question is from Conor MC Nomura with RBC capital markets. Please go ahead.
Speaker Change: Hi, Thanks for taking my questions and congrats on the solid quarter.
Speaker Change: Can you just talk about what.
Speaker Change: End market assumptions, you've incorporated into your fiscal 'twenty five guidance.
Speaker Change: Got it into Q1, that's going to be at the low end of your guidance range.
Speaker Change: That would that.
Speaker Change: I would assume there's an acceleration for you guys and is that.
Speaker Change: Are you assuming that end markets kind of return to historic growth rates by the end of the year or is it more relevant and specific that's driving that acceleration throughout the year.
Speaker Change: Yes, that's a really good question corner I mean, again, I think we see ourselves.
Speaker Change: Front end orders from the point of view, we gained 80, both snowfall portfolio is very differentiated so I can't really talk about the global markets and then how people would see from their own Angola at this stage, what we see from our side is we are probably back to the same pattern, we expense before COVID-19, where typically H two is a little bit higher than.
Speaker Change: Each one where are the users as strong this quarter means that we are always always quarter, four and then quarter one quarter three being a little bit lower meaning you were going to see certainly an acceleration from quarter one to quarter. Two for us is that kind of the pattern, we always expense before COVID-19 and we think we're pretty much back.
Speaker Change: It was the same situation for us in 2025 year.
Speaker Change: Great. Thanks, and then just on pricing.
Speaker Change: <unk> pricing.
Speaker Change: <unk> 24, and what you have been incorporated into 25 guys. Thanks for the question.
Speaker Change: Yeah, So we achieve kind of that low single digit pricing back to the historical levels that we've we've traditionally seen and expect a similar case in 2025. So we feel like the from that angle. The our product differentiation allows us to capture price, but to do it modestly an imbalance.
Speaker Change: With our customer relationships and again, keeping our products cost competitive for those solutions. So we'll continue on that same trend.
Speaker Change: The next question comes from Matt Hewitt with Craig Hallum. Please go ahead.
Matt Hewitt: Good morning, and congratulations on the strong finish to the year a couple of questions regarding the the equipment sales, obviously, you're seeing a strong recovery. There was there any budget flush impact in Q4, and I guess another question would be.
Matt Hewitt: Looking at your peers some of them are still talking about headwinds on the equipment side. What do you think is the key differentiator for you versus maybe some of the issues that your peers are still having thank you.
Yes, Thanks, Matt for the question.
Matt Hewitt: I think we need to look at hardware for from one point of view, which is you've got what I call really easy labs small scale type of hardware on one side, which is the <unk> part of our business and then you've got malls and manufacturing larger scale type of hardware, which is what we call our TCE and on one side on large scale system on the other side.
Matt Hewitt: If I look at the <unk>, which is more of the small scale type of hardware. We know like there is always a very strong quarter for <unk> and we expand seats I mean, we said it in the script I mean, we had a record quarter ever since we acquired <unk> in term of both orders and sales in the in quarter, four and I want to say it probably has.
Matt Hewitt: Applebee's is like beginning of the start of a recovery for those smaller type of false hardware and I think there's some of these analytical company has seen the same thing in quarter four and then the other half is definitely coming from the seasonality what quarter. Four is always a quarter away, where you want to use your budgets and then the order intake is always our highest ever.
Matt Hewitt: But then for the rest of the portfolio, which is really what I call. The manufacturing hardware piece I think the situation is different and then here Matt I want to think like the fact, we launched products that are real state of the art really high Tech and not only high tech from the hardware point of view, but combined with our key flaw VPN.
Matt Hewitt: This technology, which is not included is almost a 20% to 25% of every system. We are selling is giving us a huge competitive advantage, which is why we're certainly gaining market share on that side and then then here I mean, it depends I mean, the fact, we see a CMO is recovering so well and it makes me feel like we that's one.
Matt Hewitt: The reason why we start to see so much more capex spending again coming from <unk> and we've seen quite a bit of it in the in quarter four so really.
Matt Hewitt: On that side, which is the manufacturing hardware I think we're gaining market share with probably better products more and more features without <unk> technologies and its Anthony also very focused on new modalities, where we which as you know with the launch of our estate in particular, we've had a lot of wins over the last several quarters now.
Speaker Change: That's great. Thank you.
Matt Hewitt: Yes.
Speaker Change: The next question is from Cebu Namby with Guggenheim Securities. Please go ahead.
Cebu Namby: Hey, guys. Thank you for taking my question and a follow up to the previous question first off. Thank you for clearly laying it out on how you achieve your 2025 guidance.
Cebu Namby: <unk> I wanted to get additional color on why are you focused on newer mortalities in facts in specific.
Cebu Namby: So you see that as an unmet need and therefore, meaning accountants easier or versus displacing some of the larger players.
Cebu Namby: Yeah. Thanks for the question <unk>.
Cebu Namby: We love New modalities for lot of reasons and I try to just mentioned maybe a couple of them. The first one is when you look at the current pipeline of pharmaceutical company and in today almost half of the products. They have in their pipeline coming from new modalities and obviously it makes the life of the global head of R&D from those <unk>.
Cebu Namby: Pharma company very complex, because we're probably in the past they were dealing with with three or four different type of products now they have to deal with 10 to 15 different ones. So what do these guy need they need a company that is capable to support them and support them with customized solution support them with.
Cebu Namby: Agility and the ability to turn around a solution for the problems. They are facing that they don't have a good solution for them and we think we are we're doing well here because we are indeed at Chile, and we are faster progress on many of those two to develop and launch new products and that's what probably yes. So its company iridium.
Cebu Namby: Appreciate from us.
Cebu Namby: So that's really one side I think it was a picture that is.
Cebu Namby: Very important is the second one really about new modalities. So diversity is that right.
Cebu Namby: What's also very interesting from the point of view there is not one solution that fits at all I mean, you have to really be capable.
Cebu Namby: To adjust the way you look at the manufacturing from a totally different angle because if you compare manufacturing of car T. A product on one side and manufacturing of the although valid Victor on the other side on our Adcs and so on and so on I mean, they all have totally different requirements and here again, you you need to be capable to.
Cebu Namby: Sit around the table and supposedly the people or the right way and I think we all know like from a therapeutic on point of view now beauty food stuffs happening in that.
Probably in the next five to 10 years a lot of these diseases that are not being a Q2, there will be fueled by some of these new modality. So we are absolutely very very excited about it and we think where we are bringing a lot of good solutions to our customers on that item.
Cebu Namby: Thank you for that.
Speaker Change: The next question comes from Justin Bowers with Deutsche Bank. Please go ahead.
Justin Bowers: Hi, Good morning, everyone. Olivier can you expand upon the strength you saw in hardware during the quarter did that include any.
Justin Bowers: Any platform wins or expansions or or new placements, there and maybe talk about just.
Justin Bowers: Where.
Justin Bowers: Which.
Justin Bowers: Which franchises.
Justin Bowers: Some of them are strengthened.
Justin Bowers: Yeah, no absolutely so on hardware I total radio boards RTC unable to large scale systems don't forget that's also a big part of our ETF business consistency stem as well so in hardware. So so it's across the board I mean, as we mentioned as you heard the ATM did very well in 2010.
Justin Bowers: For <unk> as a hardware thoughtful TTS did very well in 2024 as well and then on the rest which is mall tiers of filtration and chromatography system, which is now today and vary very much depending on the artist in portfolio. We acquired several years ago. So again. The reason why we are very successful here is because.
Justin Bowers: We've got very differentiating solutions suites, very high technology on one side and combination with <unk> technologies on the other side on people relax in 19 of the people that probably didn't know us matched two years ago now they start to newest much more in the key account management focus we had particularly at some of these big pharma is.
Justin Bowers: Indeed, we are starting to get platform, meaning that I want to say three or four big pharma company had decided to two stock platforming as last Europe, Paul that TSA for manufacturing solution. So that's definitely for US is a big win we had in 2024 and then the last piece third party for the outage in portfolio with <unk>.
Justin Bowers: As food stickiness of consumable, meaning like once you installer and RAC, Stan Miele youre going to get to flow off of single use consumable SaaS fulfill the next five to 10 years and that's going to be obviously, a very significant tailwind for our business for the next few years as well here.
Speaker Change: Thank you and then one quick follow up just on the <unk>.
Justin Bowers: Strength in.
Justin Bowers: In APAC ex China and so on.
Justin Bowers: On our growth initiatives there.
Justin Bowers: Is that currently being driven by CMO or participation there and.
Pharma and biotech as well.
Justin Bowers: And where are you focusing your growth.
Justin Bowers: Yes, I do.
Speaker Change: No exactly to tell you the truth chest team I would like to say that if you think about the country like.
Speaker Change: Korea, obviously, you've got balls.
Speaker Change: The biggest <unk> in the world and you've got probably one of the biggest.
Speaker Change: Biosimilar company in the World. So if you think about the country like that and I know ammonia picking of two companies down there, but you would say, it's probably pretty balanced between the two I don't have the exact number of something we would need to check but tied back to the numbers themselves I mean, youre right like Asia did very well for us in 2024, excluding China.
Speaker Change: And in fact.
Speaker Change: Impactful for the full year grew 12, four soon to excluding China in terms of sales and in terms of orders. We grew around 16 balsam. So what was a really good year for US I mentioned Korea, which is obviously a big area of focus for us and all of those as well, but people drilling forget country like Japan as well, we will have been re.
Speaker Change: Bonding us very nicely now for the last two to three years because of government. After Covid has decided to invest a lot of money and then Singapore, we've achieved kind of benefiting from the side also has a softer China where people are back to invest a lot in Singapore as well so yes.
Speaker Change: Asia outside of China did very well for us in 2024, and we've got big hopes that growth is going to accelerate in 'twenty, five and beyond and then on China.
Speaker Change: We think we've reached a bottom I mean, our orders in the second half of 2024 were slightly higher than our orders in the first half. So we are hoping we've reached bottom and we're going to be back to growth mode.
Speaker Change: Somewhere probably around the second half of 2025.
Speaker Change: Thank you I'll jump back in queue.
Speaker Change: The next question comes from Paul Knight with Keybanc. Please go ahead.
Paul Knight: Thanks, So much for the question regarding the recovery in C. D. M. O's why do you think is happening there is it.
Paul Knight: Theyre getting past, making material for COVID-19 or they're seeing better financing from biotech.
Paul Knight: It's been our that they've been really bullish but now we're starting to see it in their orders for companies like <unk> and if you can comment on that first thanks.
Paul Knight: Yes, no poor absolutely and Thats, obviously, a question we're asking ourselves every day.
Paul Knight: I'll start with the big CDN malls, I mean, the big CDN malls.
Paul Knight: But the observation is is to get those very large long term 10 year supply contract with Big Pharma company on commercial drugs and I mean, if you look at the top two if not maybe the top three or four I mean, they've announced some of these very big deals over the last several months and I mean, some of these deals had been the highest they've ever sign.
Paul Knight: And when you are one of these big CDN malls I mean, this is giving you a lot of clarity a lot off of confidence over the next five to 10 years. You are you are kind of secured with the base.
Paul Knight: Business you need to have to be successful for the next five to 10 years and then you can start to do a <unk>, which is to grab maybe smaller products.
Paul Knight: Do you have faith products that are going to be as a product for the future. So I think the big guys are definitely in very good shape today and what I found interesting when we looked at our numbers was to see that hotel and a smaller CDM older tier two as we call them did very well for us for the last two quarters and here you would say, it's probably because they are also benefiting <unk>.
Paul Knight: Some of the tail end of <unk> are big pharma products that are not.
Paul Knight: Good feed to the largest most because they're probably smaller in size, but also I think the biopsy cure activity you had some impactful some of the tier two or more particularly in the U S where we know some of these guys have benefited from <unk> in terms of the funding off of small biotech I mean, that's something we're still looking at very.
Paul Knight: Carefully there was some improvement last year I think.
Paul Knight: So total funding was up about 45 person that's through 2023, what we didnt like too much was a trend where a quarter by quarter of funding went down from 18 billion in the quarter, 1% to 15 in quarter 212 and 12.
Paul Knight: In quarter, three and quarter, four and I want to say January was pretty weak as well as around three 3% to $3 5 billion U S. Dollar. So that is something we still need to watch. It. If there is one segment that we think has not really recovered completely yet is reso small biotech count.
Paul Knight: And then lastly, I know you have a lot of hollow fiber capacity, what do you plan to do there could you use that capacity to somehow get into the <unk>, one market or is that kind of just.
Paul Knight: <unk> and R&D.
Paul Knight: Yes, no that's a really good question I mean.
Paul Knight: Among a lot of stuff, we want to focus on one of them is to make sure we spend more time with our commercial team to get a designing with some of these very differentiating product, we have us and it's not only auto fibroid several orders as well so that's an initiative.
Paul Knight: When you hear about the fact, we're investing more into sales I mean, that's definitely one of the area, where we want to get some more of these application specially.
Paul Knight: In our team so that we can spend more time denying those beautiful technologies. We have that we know are going to get more and more successes in the future and then the hollow fiber is one of them is not the only one.
Paul Knight: Thank you.
Paul Knight: Okay.
Paul Knight: Okay.
Paul Knight: Okay, maybe one more.
Paul Knight: Yes.
Speaker Change: Our last question today will come from Doug Schenkel with Wolfe Research. Please go ahead.
Doug Schenkel: Good morning, and thank you for taking my.
Speaker Change: My questions.
Speaker Change: There was an earlier question about your yearend instrument performance versus peers.
Speaker Change: Always hesitant to make calls about share shifts and an increasingly sticky market.
Speaker Change: That said I am wondering if you are seeing any pickup in customers swapping out existing lines for your products and what seems to be an environment where at.
Speaker Change: At least based on what we're hearing from others. It seems like the build out of new lines is still muted. So I'm wondering if that's some of what's different about what's going on with you versus peers.
Speaker Change: And then just very quickly on guidance and really just pacing.
Speaker Change: Given the order strength in Q4 and given how short it is now for you to or how not long. It takes for you to fulfill orders.
Speaker Change: It does seem like Q1.
Speaker Change: The commentary would seemingly derisk things fairly substantially I just want to make sure. We're not missing anything in terms of the size of the orders the duration of the orders because it certainly seems like the bias would be to the upside given how you guided.
Speaker Change: Given the strength of orders into year end. Thank you.
Speaker Change: Yeah sure.
Speaker Change: For the first part of the question.
Speaker Change: I want to start by saying, we're very small actor on the hardware market, let's be honest, we are coming from a very low level. So obviously when you are coming with new products on this very significant market and youll, bringing beautiful products and you don't have a lot of market share.
Speaker Change: Many of the day, you can really only wane unless you you're not doing the job properly. So that's probably why we're seeing that market from a bit of a different angle. This being said, yes, we've had a lot of great wins over the last several quarters and that's because we do have great products again combined with the writer.
Speaker Change: <unk> technology, so we are definitely gaining market share.
Speaker Change: Scenario, what we like as we start to get platform at some of these big pharma companies, who started buying 123 system maybe.
Speaker Change: A couple of years ago, and now who are buying one UC stem every area of the mountain and Thats something we are really very happy about because it means not only as they like the plot.
Speaker Change: Product, we launched a few years ago, but once they have been starting to use it they realize it's a big differentiator.
Speaker Change: That's definitely where we see traction, but again, we're coming from a low point in terms of having very low market share and then just to answer. The later part of it is the latter part of your question.
Speaker Change: Yes, Youre right I mean, typically a hardware has a lead time of three to six months or so you would assume like the orders you will have in your plan wholesale in quarter, one that youll receive them already in the previous quarter Thats, absolutely fast, which is different from consumable and where we can get consumable order in the quarter to date are in the same quarter.
Speaker Change: Okay.
Speaker Change: So with this I think we'll wrap it up for today so thank.
Speaker Change: Thank you for joining the call. We really appreciate the time you took kind of we are all excited about.
Speaker Change: The year to come and we'll talk soon together again. Thank you so much I'm just.
The conference has now concluded. Thank you for your partners participation you may now disconnect your lines.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change:
Speaker Change: Uh huh.
Speaker Change: Yes.