Q1 2025 Alpha Teknova Inc Earnings Call
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Vidyun, thank you for standing by. Welcome to the Teknova First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.
To ask a question during the session, you'll need to press star 1-1 on your telephone. We'll then hear an automated message advising your hand is raised.
Speaker Change: To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today. Jennifer Henry, Senior Vice President of the Marketing, please go ahead.
Speaker Change: Thank you, operator. Welcome to Teknova's first quarter, 2025 Earnings Conference Call.
Speaker Change: With me on today's call are Stephen Gunstream, Teknova's president and chief executive officer and Matt Lowell, Teknova's chief financial officer who will make prepare remarks and then take your questions.
Speaker Change: As a reminder, the forward-looking statements that we make during this call, including those regarding business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ.
Speaker Change: Additional information concerning these risk factors is included in the press release, the company issued earlier today, and they are more fully described in the company's various filings with the SEC.
Speaker Change: Today's comments reflect the company's current views, which could change as a result of new information, future events or other factors, and the company does not obligate or commit itself to update its forward-looking statements, except it's required by law.
Speaker Change: The company's management believes that, in addition to gap results, non-GAAP financial measures can provide meaningful insight when evaluating the company's financial performance and the effectiveness of its business strategies. We will therefore use non-GAAP financial measures of certain of our results during this call.
Speaker Change: Reconciliation of gap-to- non-GAAP financial measures are included in the press release that we issued this afternoon, which is posted on both Teknovas and the SEC's website.
Speaker Change: non-GAAP financial measures should always be considered only as a supplement to and not as a substitute for or as superior to financial measures prepared in accordance with Gap. The non-GAAP financial measures in this presentation may differ from similarly named non-GAAP financial measures used by other companies.
Speaker Change: Please also be advised that the company has posted a supplemental slide deck to accompany today's prepared remarks. It can be accessed on the Investor Relations section of Teknovo's website.
and now I will turn the call over to Stephen.
Stephen Gunstream: Thank you, Jen. Good afternoon, and thank you everyone for joining us for our first quarter of the year 2025 earnings call.
Stephen Gunstream: Today, I'd like to start by providing some commentary on the current macro environment and how it relates to our business.
Stephen Gunstream: We had a strong first quarter that was in line or slightly ahead of our expectations.
Stephen Gunstream: We believe this performance reflects the diversity of our customer base, the criticality of our product portfolio, and the limited exposure we have to change in the geopolitical environment.
Stephen Gunstream: While we serve over 500 academic and government institutions annually, these customers represented less than 4% of our total revenue in 2024.
Stephen Gunstream: We also believe that customers will continue to use our products, notwithstanding changes to NIH funding levels because they are foundational to basic research and generally represent a small part of the cost associated with R&D activity.
Stephen Gunstream: From a tariff perspective, our diverse customer base spans the entire life science market from biopharma to life science tools to diagnostics to other areas such as food and environmental
Stephen Gunstream: We manufacture 100% of our products in the United States and source only about $1 million worth of our raw materials from outside the United States annually.
Stephen Gunstream: From a commercial perspective, less than 5% of our total revenue comes from sales to customers outside of the United States and we generate no material revenue from sales to customers in China.
Stephen Gunstream: We therefore expect no material direct adverse impact from recent changes to terror policies.
Stephen Gunstream: With that said, second order effects such as a reduction in biotech funding will likely cause delays or reductions in purchases of our products from some small and midsize biotech customers.
Stephen Gunstream: As a reminder, our growth strategy is to engage with these early states therapeutic developers and support them as they move their therapies through to clinical trials to commercialization.
Stephen Gunstream: Over time, we believe a combination of these new clinical customers in our core business, which has grown at an average annual rate of 12% since 2009, will allow us to achieve sustainable above market growth rates of 20 to 25% annually.
Stephen Gunstream: Until biotech funding recovers, however, we believe that many small and mid-sized biotech companies with limited capital will continue to manage their expenses conservatively.
Stephen Gunstream: Fortunately, we have been able to increase the number of clinical customer accounts that purchase more than $5,000 annually from 13 in 2020 to 48 in 2024, and we expect the custom biopharmor segment of our business to grow mid-teens in 2025.
Stephen Gunstream: All things considered, we remain confident in our ability to execute on our plan for 2025 and therefore in our guidance for the year.
Stephen Gunstream: Now, turning to the quarter, it was a relatively straightforward period for us across the board with revenue and operational expenses delivering at or better than our expectations.
Stephen Gunstream: Our catalog products, which are purchased from a very broad customer base of over 3,000 accounts annually, and represent approximately 60% of our total revenue, grew low double digits when compared to the first quarter of 2024.
Stephen Gunstream: This is due to a combination of some larger one-time orders from select accounts and a general increase in demand across multiple product lines and customer types.
Stephen Gunstream: We will continue to monitor the performance of our catalog products which could provide some upsides to our revenue guidance if the trend continues.
Stephen Gunstream: Revenue from sales of custom products to life science tools and diagnostics customers decline more than 30% compared to the same period last year due to a large order delivered to a single customer in the first quarter of 2024.
Stephen Gunstream: Excluding this order, revenue in this segment would have increased high single digits in the first quarter of 2025.
Stephen Gunstream: Revenue from Custom Products sold to Biopharma customers through mid-single digits compared to Q1 2024.
Stephen Gunstream: The size and timing of orders for custom products makes it difficult to measure performance on a quarterly basis.
Stephen Gunstream: But based on customer discussions in our funnel metrics, we still expect at least 15% growth in revenue from sales of customer products to biopharma customers, and mid-single digit revenue growth from sales of customer products to last science tools and diagnostics customers in 2025.
Stephen Gunstream: Finally, as we mentioned on our Q4 call, we believe there's an opportunity to expand our product portfolio through collaborations and acquisitions.
Stephen Gunstream: While we have spent the past couple of years investing in infrastructure, systems, and scalability, numerous other companies have focused on developing novel products and technologies.
Stephen Gunstream: By working closely with these companies we believe we can expand our product portfolio and chief graphic footprint.
Stephen Gunstream: The combination of our operational and commercial scale with our collaborators' novel products and technologies creates a great opportunity to drive additional top line growth in margin expansion over the longer term.
Stephen Gunstream: In fact, in March, we signed a collaboration agreement with Pluristics.
Stephen Gunstream: Pluristics is a leading provider of induced pluripotent stem cells for IPFCs for use in next-generation
Stephen Gunstream: Through their development of IPSCs, Pluristics identified a novel formulation for the systematic freezing of cells called cryopreservation that streamlines the manufacturing of cell products.
Stephen Gunstream: The product line is tradenamed flurry freeze and includes a wash system paired with the cryopreservative designed to simplify the scale of process for companies working to bring allogenic cell therapies to market.
Speaker Change: Teknova is now the exclusive manufacturer and distributor in the United States and Canada for this suite of products. We launch the products at the Bioprocess International West Conference and have received an enthusiastic response from our target customers.
Stephen Gunstream: We are excited about the first of what we expect to be additional collaborations and what these relationships can bring to our customers and our investors like.
In summary, we had a strong start to the year.
Stephen Gunstream: We are excited about the progress we've made and believe we are in position for long term success. I will now hand the call over to Matt to talk through the financials.
Bye.
Matt Lowell: Thanks Stephen, and good afternoon everyone. Revenue was up 5% for the first quarter of 2025 compared to the same quarter prior year. I'm also very pleased with our progress on key profitability measures and cash usage.
Stephen Gunstream: Overall, we delivered solid financial results for the first quarter 2025.
Stephen Gunstream: Lab Essentials products are targeted at the research use only or RUL market and include both catalog and custom products.
Stephen Gunstream: Lab essentials revenue was $8.1 million in the first quarter of 2025, a 12% increase from $7.3 million in the first quarter of 2024.
Stephen Gunstream: The increase in lab essentials revenue was attributable to an increased number of customers, partially offset by slightly lower average revenue per customer.
Stephen Gunstream: Clinical solutions products are made according to good manufacturing practices, or GMP, quality standards, and are the primarily used by our customers as components or inputs in the development and manufacture of diagnostic and therapeutic products.
Stephen Gunstream: Clinical Solutions revenue was 1.2 million in the first quarter of 2025, a 32 percent decrease from 1.7 million in the first quarter of 2024.
Stephen Gunstream: The decrease in clinical solutions revenue was attributable to lower average revenue per customer, partially offset by an increased number of customers.
Stephen Gunstream: We expect revenue per customer to increase over time as customers ramp up their purchase volumes when they move through clinical trial phases.
Stephen Gunstream: However, this metric can be affected by the addition of newer clinical customers who typically order less.
Stephen Gunstream: Just as a reminder, due to the larger average order size and clinical solutions compared to lab essentials, there can be more quarter to quarter revenue lumpiness in this category.
Stephen Gunstream: Notably, there was a large clinical solutions delivery to a customer in the Eurogo quarter that did not re-occur in the first quarter 2025.
Stephen Gunstream: However, this was attributable to customer timing as it remains one of our top customers [inaudible]
Schultz.
also the Income Statement.
Stephen Gunstream: Gross Profit for the first quarter of 2025 was 3.0 million compared to 2.2 million in the first quarter of 2024.
Stephen Gunstream: Gross Margin was 30.7% in the first quarter of 2025, which is up from 23.8% in the first quarter of 2024. The increase in Gross' profit was primarily driven by higher revenue, coupled with lower overhead costs.
Thank you.
Stephen Gunstream: Operating expenses for the first quarter of 2025 or 8.0 million compared to 10.2 million for the first quarter of 2024.
Stephen Gunstream: Excluding the non-recurring charge of 1.3 million recorded in the first quarter of 2024, related to the reduction in workforce, operating expenses were down 0.9 million.
Stephen Gunstream: The decrease was driven primarily by lower stock-based compensation expense related to the March 2024 Optionary Pricing and reduced spending generally.
Stephen Gunstream: At the end of the first quarter, 2025, we had 176 total associates compared to 174 in total a year prior.
Thank you.
Stephen Gunstream: Net loss for the first quarter of 2025 is 4.6 million or negative nine cents per diluted share compared to a net loss of 8.1 million or negative 20 cents per diluted share for the first quarter of 2024.
Thank you.
Stephen Gunstream: Adjusted EBITDA, a non-GAAP measure was negative 2.5 million for the first quarter of 2025, compared to negative 3.8 million for the first quarter of 2024.
onto cashflow and balance sheet.
Stephen Gunstream: Capital expenditures for the first quarter of 2025 were 0.2 million compared to 0.1 million for the first quarter of 2024.
Stephen Gunstream: Free cash flow and on-gap measure which we continue to report is cash used in operating activities plus purchases of property, plant and equipment. It was a negative 4.3 million for the first quarter of 2025, compared to negative 6.7 million for the first quarter of 2024.
Stephen Gunstream: This decrease was due both to 1.3 million in severed payments only in the year ago period and improved profitability in the current period.
Thank you.
and 13.2 million in total borrowings.
Stephen Gunstream: Our borrowings increased by 1.1 million in the quarter as it offset to the exit fee owed to our lender due to the refinancing.
Thank you very much.
Stephen Gunstream: On to 2025 Outlook. We are reiterating 2025 total revenue guidance of 39 million to 42 million. At the midpoint, this implies 7% revenue growth compared to 2024.
Stephen Gunstream: Our catalog products which represent a very broad customer base was up low double digits and higher than expected in the first quarter despite the macro environment.
Stephen Gunstream: On the other hand, growth was lower than expected from custom products delivered to our biopharmor customers.
Stephen Gunstream: We expect these growth rates to flip over the course of the year due to the timing of larger custom orders.
Stephen Gunstream: Our fiscal year 2025 revenue guidance assumes mid-single digit growth and catalog products, at least 15% growth in custom bio-farmer products, and mid-single digit growth in custom life science tools and diagnostics products.
Thank you.
Thank you.
Speaker Change: While Gross margins improved over the year ago quarter, in excess of our previously communicated expectations of about 70% of incremental revenue,
Speaker Change: We still believe this is the best estimate over longer periods of time.
Speaker Change: There were some additional favorable factors in the first quarter of 2025 that will not necessarily be repeated.
Speaker Change: We therefore continue to target a gross margin in the high 20s for fiscal year 2025.
Speaker Change: We also continue to expect operating expenses of at least $8 million per quarter, allowing us to moderately increase our investment in sales and marketing compared to last year.
to position ourselves for the market recovery.
Speaker Change: At these spending levels, we continue to believe we will become adjusted EBITDA positive in the range of 50 to 55 million in annualized revenue.
Thank you. Thank you.
Speaker Change: While the company saw an increase in free cash outflow compared to the fourth quarter of 2024, this is consistent with the company's expectations for the year and is higher due to certain larger payments typically occurring during the first quarter. We anticipate lower average quarterly free cash outflow for the remainder of the year.
Speaker Change: As such, the company continues to expect free cash outflow of less than $12 million for the full year 2025.
Speaker Change: As we have communicated previously, based on reasonable assumptions about future growth and spending plus current liquidity, we believe that we do not need to raise additional capital to execute our organic growth strategy.
With that, I will turn the call back to Stephen.
Thanks, that.
Stephen Gunstream: To conclude, we believe that first, our core business is returning to double digit growth.
Stephen Gunstream: Second, the more than 60 therapies we support in clinical trials will drive additional long-term sustainable growth.
Stephen Gunstream: Third, the business is prepared operationally and commercially to scale the 200 million in revenue without with minimal additional investment.
Stephen Gunstream: And finally, additional collaborations and acquisitions provide opportunities to accelerate growth and profitability.
Stephen Gunstream: As such, we believe the long-term outlook for our end markets remains positive and we are committed to executing on our strategy to help our customers accelerate the introduction of novel therapies, diagnostics and other products that improve human health.
We will now take your questions.
Speaker Change: Thank you. But this time we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster.
Speaker Change: Our first question comes from Anna Stubkowski with Keybank. Please go ahead
Thank you.
Speaker Change: Our next question comes from Mark Massaro with BTIG. Please go ahead.
Speaker Change: Hey, this is Vivian on Vermont. Thanks for taking the questions. So just want to check on the Selengene Therapy customer count. Just any commentary you can provide on the demand that you're seeing there after the recent leadership change at the FDA. And if you could just comment on any month and month improvements you're seeing just in the macro biotech funding landscape.
Speaker Change: Sure, thanks, Vidyun. Well, I mean, it's only been a day since the change has been announced. I have not seen the change but we will be at ASGCT next week and we'll be talking to a number of customers and I'm seeing customers tomorrow as well.
Speaker Change: That said, I don't think it is change since we gave our guidance, right? We expected a pretty tough market when we brought our guidance this year. And those early stage customers with short cash runways are going to conserve capital until that changes.
Speaker Change: Fortunately, we have a number of customers in our pipeline that have either raised or are in larger institutions and they are operating to their plan that they laid out the beginning of the year.
Speaker Change: While the market isn't what it could be, for the most part our customers are in execution mode and hence why we believe this segment will still grow in the 15% that we guided to this year.
Matthew. [inaudible]
Great. Thanks so much for that.
Speaker Change: And then you start to check in on the web per customer that you called out, how that tends to soften as your customer's common board.
Speaker Change: Could you just talk about the mix shifts you're seeing with the new customers onboarding and just how the utilization of the mature customers is trending? Is there any kind of aspirational metric you could provide on where you expect peak utilization to go for those more mature customers? Thanks.
Speaker Change: Well, I would say that I'm hinting to Matt.
Speaker Change: But I would say that's what we're seeing when we do the metrics, right? We tell you how many clinical customers we had at the end of 2024. In this case, it's 48 of those 48, 23 were selling in therapy customers.
Speaker Change: Those are the total accounts, not the total number of therapies.
Speaker Change: But what we do see is very similar to the market research we did a number of years ago on the increase in spend as they move down those trials. So you're thinking about the, as they get closer to the phase two phase three, it's hundreds of thousands per therapy, per account, but account can have multiple therapies.
Speaker Change: and then as they go from phase one to commercialization, we still expect that 30 fold increase.
Speaker Change: So I don't think anything's changed there, what we've seen is rationalization and a pipeline more than anything else [inaudible]
That was great. Thanks so much for taking the question.
Thank you.
Thank you for joining us.
Speaker Change: Our next question comes from Anna Snowkowski with Keybank. Please go ahead.
Anna Snokowski: Hi, this is Anna on for Paul Knight. Maybe starting with your recent collaboration with Pluristics.
Anna Snokowski: Could you just touch on the competitive position for this product, just does it allow you to increase your presence and penetration with existing customers or target a different customer set and do you see any material impact in 2025?
Thanks.
Anna Snokowski: Yeah, great. Thanks, Anna. We are very excited about the collaboration because it not only does it help build out our self therapy workflow.
Anna Snokowski: but also is a critical component in a lot of the application areas in the catalog business like Stemso or research or some self-banking type applications that are commonly used.
So,
Speaker Change: Yes, it does target our current customer base. I would say that we're not as deep in cell therapy just because of the products we offer and we feel like this can obviously help us get our foot in the door there and expand because it is a pretty unique product.
Speaker Change: And from the material impact, as you know, these things take a long time to mature, right? And of course there's a large incumbent in there and there's actually what we're finding a lot of home group in the space.
Speaker Change: And so while we're enthusiastic and the customers are excited about it, we have a sampling plan going right now, I wouldn't expect the material impact necessarily in 2025, but we'd start to build that as it goes out in the 26-27 time periods.
Great, thank you. And then just one follow up.
Speaker Change: Hopefully you didn't touch on this already, but if you could just comment on the recent news with Ceber and the appointment of Dr. Prasad, just if we could get your initial thoughts there, and if you could just remind us of your exposure to vaccines.
Thank you for your time.
Speaker Change: Yeah, so on the new appointment in Sieber, obviously, you know, this is doing something everyone's going to be watching. I think it's too early to tell. It's hard to even measure in a day or two and there's lots of opinions.
Speaker Change: So we'll be interested here next week at ASGCT directly from some of our customers.
Speaker Change: Well, let's talk about exposure real quickly, right? We said we have 48 clinical customers that end of 2024 23 of those were selling gene therapy from and I don't believe at this moment time there's really any that are large in or in the vaccine space necessarily for us [inaudible]
Speaker Change: I think the exposure for some of these things is not quite as much for us.
Speaker Change: That said, obviously the impact is really the second order effect to get in with the biotech funding, right? These small midsize biotech companies that have a short cash runway will be limited in terms of what they can spend until we solve that problem. So something we're going to keep our eye on it, and we'll keep you guys updated.
Thank you, that's helpful.
Thank you.
Speaker Change: Our next question comes from Matt Hewitt with Craig Hall and Capitol Group. Please go ahead.
Speaker Change: Good afternoon. Thanks for taking the questions and I apologize those happened between a couple different calls but as I was
Speaker Change: Getting back onto yours, I heard something along the lines of I think 4% government exposure if I heard that correctly and I'm just curious if you've spoken with some of your larger institutions on the academic and government side and you know I realize that this is kind of a...
Speaker Change: fluctuating situation with NIH cuts and whatnot. But what are you hearing from them? Are they kind of looking at it as they're staying the course until someone comes and tells them to stop? Or are you seeing a little bit of a pause? I realize it's a small percentage of revenues, but just curious what you're hearing.
Speaker Change: Yeah, thanks, thanks Matt. It is a 4% for that super all the academic and government institutions we support, which is about 500 in the US.
Speaker Change: So it's pretty diverse, leading about 4% of our revenue and divide that by 500. It's a pretty small amount.
And I can tell you, we're not-
Speaker Change: I've actually seen an impact for our products at this time. If you remember a lot of products we sell are just your standard basic research tools like agger plates or tris buffer or things like that. Probably unlikely to be impacted right away. They're not expensive but they're also the necessary consumables you need to do research.
Speaker Change: Church. So we feel like it's not only small, but also probably a little bit more resilient than some of the other areas.
Speaker Change: The only things I've really understood so far, Matt, is just the, it's a lot of concern, right? And you hear about people and, you know, that are postponing, you know, positions that they had opened and things like that, but I don't know that we're seeing yet the material sets, or we are not, I should say.
at this point. [inaudible]
Understood. Thank you very much.
Thank you.
Speaker Change: Our next question comes from Matt LaRue with William Blair, please go ahead [inaudible]
Matt LaRue: So I think about the balance of the outlook for the year.
Matt LaRue: you know, try to think maybe upside, downside. One way there may be a risk to the outlook is if there was some sort of pull forward of end of the first quarter. So just curious, just based on your assessment, customer order patterns, if you saw any of that. Maybe an upside dynamic might be to your point, Stephen.
Matt LaRue: The industry has gone through a lot of rationalization and your products are sort of daily use must have products so there may not be the same reservation like the right people for capital equipment or larger dollar amounts. So if you maybe comment on those two and how to play in the decision to maintain the outlook. Thank you, Mark.
Matt LaRue: Maybe I'd just comment on the Pauline question, Stephen, and you can create another one, but...
Speaker Change: Yeah, just looking at it in two pieces, Matt, the lab essentials versus the clinical part of our business, starting with the latter of the clinical solutions.
Speaker Change: That was down in the quarter versus the year ago and this was kind of one of those situations where it's actually the opposite effect but she didn't have some of the larger orders that we had.
Speaker Change: In the year ago, period, that being the sole reason and again, we've kind of checked in with our customers and our funnel and we believe that that's going to correct itself later in the year. So on the clinical side, we feel it's more just normal.
Speaker Change: Timing at this moment on the lab essentials part of our business of which you know the large part is the catalog business man at a very strong performance.
in Q1 in the low double digits as you reported.
Speaker Change: We have dug in there and at this time we did not believe that there is any pull-in activity or that we can detect anyway, of course these things are with a large customer base that's hard to know. All the forces that work here but
Speaker Change: based upon looking at different segments and types and those kind of things.
Speaker Change: It's not clear that that's the case. It could be possible, of course, but it's not it's not clear from the data that that that is happening and but it's something as you said will be continuing to watch as we do expect that business.
Speaker Change: So we'll throw mid single digits for the full year and it was above that in Q1 so we'll see how things progress in the Q2.
Very good, thank you.
Speaker Change: Sorry, if there's just one more, the following up on the question on fever and Dr. Prasad, maybe just a broader question on some of the other changes that have been proposed.
Speaker Change: with FDA and NIH about, you know, how early stage research is going to be done, and potential use of...
Speaker Change: You know, 3D cell culture, animal model, excuse me, organoids relative to animal models. Again, I understand it's early, but maybe this speaks to how your portfolio might be positioned to benefit from some of those changes.
Speaker Change: Yeah, I think it is, again, all these things are pretty early, so it's pretty speculative at this point, but, you know...
Speaker Change: We probably, we do support more of the non-animal models, right? So there's a potential tail in there as if there's a shift. My understanding is that it's...
Speaker Change: It's not as near-term as it sounds in the news, so I'm interested in hearing more as we go through the next couple of months or as they sort this out, but certainly as you move to more organized type models and instead of animal models, I think we'd see a potential benefit there.
Speaker Change: Thank you. As a reminder to ask a question, you'll need to press star 1-1 on your telephone.
Speaker Change: Our next question comes from Brendan Smith with TD Cowan. Please go ahead.
Speaker Change: Hey, this is Chad Wiatrowski on for Brendan Smith. Just wanted to sort of double click on the...
Speaker Change: Crow Preservation Collaboration. Is this sort of a cost plus model for you guys? Or are there other economics attached like royalties or something? And the second part of that would be, as you mentioned, this sort of an incumbent gold standard here. So what from like a strategy perspective gives you conviction that they're going to.
Speaker Change: Windsharing this market, whether it's from price or performance, I could use the collaborate on that. Thanks.
Speaker Change: Stephen, I'm going to talk a little bit to the economics.
Speaker Change: I'll just say that, first of all, we haven't disclosed the details of the collaboration, of course, we have disclosed that we are...
you know, the exclusive manufacturer, and...
Speaker Change: you know, reseller of this product so that we, you know, are expecting economics to reflect that, I would say in general with these type of collaborations.
Speaker Change: You know the science for this in the market, it's going to take a little while before we see anything material in the results. [inaudible]
Speaker Change: Yeah, and then I'll just touch on the positioning. You know, there are two pieces, right? I think I'm more of a cell therapy side of things.
the lack of the reduction in viscosity of the product.
Speaker Change: It enables it to be better suited for allergenic cell therapies versus the autologous just because of the scale which you're doing these and working with suffice because fluid does cause problems in actual bioprocessing.
Speaker Change: But then we also have a R.U. Overson meeting a research who is only a version of the product. That makes it more accessible to the broader market and research. And we think that can help go after that homebrew segment that we believe is relatively large there.
Thanks, guys.
Speaker Change: Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.