Q3 2025 BioNano Genomics Inc Earnings Call
Speaker #1: Please go ahead.
Speaker #2: Thank you, Dee Dee, and good afternoon, everyone. Welcome to the Bionano Q3, 2025 financial results conference call. Leading the call today is Dr. Eric Holmlin, CEO and Principal Financial Officer of Bionano.
Speaker #2: Adamchak, Bionano's Vice President of Accounting and Principal Accounting Officer. After market close today, And he is joined by Mark Bionano issued a press release announcing its financial results for the Q3 of 2025.
Speaker #2: can be found on the Investor Relations A copy of the release page of the company's website. Certain statements made during this conference call may be Actual results may differ materially from such forward-looking statements.
Speaker #2: statements due to several factors and risks. Some of which are identified in SEC. These forward-looking statements are based on reports filed with the information available to Bionano today, November 13th, Bionano's press release and Bionano's 2025, and the company assumes no obligation to update, statements as circumstances change.
Speaker #2: During our call, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliation of these measures to GAAP can be found in our press release and slide deck.
Speaker #2: web test replay for today's conference call will also be available online on the An audio recording and company's Investor Relations page. With that, I will turn the call over to Eric.
Speaker #3: Thank you, Kelly, and good afternoon, everyone. I'm excited to update you all on the Q3 results and key highlights as well as provide an update on the remainder of the year.
Speaker #3: At Bionano, our pathology, which is the medical discipline that investigates disease, including its causes, developments, and effects. This pathologies analog past to a digital our expectations for future.
Speaker #3: At Bionano, our pathology, which is the medical discipline that investigates disease, including its causes, developments, and effects, has a past that is being transformed from analog to digital. Our digital pathology solutions include optical genome mapping systems, the ionic system for nucleic acid isolation, and our software.
Speaker #3: These solutions address significant unmet needs in cytogenetics and molecular pathology through simplification workflows. Over the last year, we have of taken decisive steps to transform our business model away from growing the installed base toward a model that's driving utilization of our solutions within one based in aggressively OGM and via base.
Speaker #3: We call this a subset of a subset of our existing users who are characterized by software user samples coming into their labs, having an established flow of, and therefore we believe they can use our routine consumables and software for our revenue growth in the near term.
Speaker #3: To succeed revenues and will drive most of generate significant with this strategy, we're executing against four strategic pillars. First, we're focused on supporting and sustaining our and sustaining our installed base of routine OGM and via software utilization through the adoption of software across the routine users of OGM, and that way we can facilitate their expansion.
Speaker #3: Third, we're building support needed for optical genome mapping reimbursement and inclusion in menu medical society guidelines, users. and different schedules for to drive Fourth, we intend to reimbursement.
Speaker #3: Third, we're building support needed for optical genome mapping reimbursement and inclusion in menu medical society guidelines. Users and different schedules for driving Fourth, we intend to Second, we're aiming at recommendations, lowering costs and improving profitability. The Q3 and year-to-date performance validates that focusing on these routine users is restoring growth in our core business at a high level. We believe our performance in Q3 achieved solid gross margins, remained disciplined with our operating expenses, and increased the utilization from these routine users.
Speaker #3: Third, we're building support needed for optical genome mapping reimbursement and inclusion in menu medical society guidelines, users. and different schedules for to drive Fourth, we intend to Second, we're aiming recommendations, lower costs and higher volumes.
Speaker #3: It's increasingly evident that optical genome mapping solutions are providing valuable insights to our customers and that these customers are utilization. Taking a closer expanding their look at this performance, total revenue for the Q3 of 2025 was $7.4 of 21% compared to the Q3 of million, reflecting an increase 2024.
Speaker #3: When adjusting for a write-down of 0.5 discontinued clinical revenues increased by million in revenues from 12% year-over-year in Q3 services in 2024, core 2025.
Speaker #3: We sold an all-time record 8,390 flow cells in the Q3 of 2025, which reflects a 7% increase compared to the same period last year.
Speaker #3: And we're pleased with this strong growth in flow cells again this quarter. It reflects increased utilization within this routine use customer group. Non-GAAP gross margin for Q3 2025 was 46%, which was significantly higher than the 26% non-GAAP gross margin reported for Q3 2024.
Speaker #3: Q3 2025 non-GAAP operating expense was $9.7 million, which is a 40% reduction compared to the $16.1 million in non-GAAP operating expense in Q3 of 2024.
Speaker #3: We installed seven new systems and brought one back for a net increase of 3 to 384 for the installed the Q3 of 2025. And year-to-date through September 30th, 2025, we have installed 23 new 31.8 million dollars in cash.
Speaker #3: Cash base as of the end of securities of which 10.3 million was equivalents and available for sales subject to certain restrictions. In September, we completed a 10 million dollar public offering of common stock, bolstering our balance sheet and extending our cash systems.
Speaker #3: 2026 and potentially... We ended the quarter with growth and cost savings, depending on the execution of our initiatives. Now, taking a closer look at our first pillar, which is supporting the utilization across our routine user base, who repeatedly purchase and use consumables and software at higher rates.
Speaker #3: Overall, flow cells grew to 7%, grew 7% in the quarter compared to last year, achieving this new record. After removing the flow cells that were sold to new 2024 and those sold in this quarter, customers since the Q3 of flow cells sold to the 6% on a year-over-year basis.
Speaker #3: Flow cell purchases by existing customers in the first remaining existing customers grew by nine months of 2025 compared to the same customers a year ago grew by 7%.
Speaker #3: Our strategy of focusing on driving product at higher utilization within this and customers are using our volumes. Now, when looking at the revenue contributions from together, these sales grew year-over-year basis in the Q3 and 10% year-over-year for the first nine months routine user base is working of total product mix, consumables 2025.
Speaker #3: And software accounted for 15% of revenue in Q3 2025, while representing 76% in the first nine months of this year. In comparison, it accounted for just 62% in the first nine months of 2024.
Speaker #3: So this shift in product mix is also a we're also making good progress with our in the Q3, but second pillar of integrating via into customer workflows.
Speaker #3: And result of our change in upgrading our software and software and compute platforms to make analysis of OGM, microarray, and next-generation sequencing data easier faster and more accurate.
Speaker #3: Last quarter, we announced that upgrades were released in a first wave and that we are pleased to remain on track for the full commercial release of this software in the coming months.
Speaker #3: The P&L to discuss our pillar of improving profitability and scalability. We have made steady progress in reducing our non-GAAP operating expenses, moving down over the last few years. We have remained disciplined with this approach throughout this year.
Speaker #3: In the Q3, our non-GAAP operating expense was 9.7 million, and that represents a 40% year-over-year reduction. Turning to gross margin, cost reduction along with improvements to our product manufacturing costs and volumes have enabled expansion from 22% on the non-GAAP core gross margin in the first quarter of 2023 to 46% non-GAAP gross margin this quarter.
Speaker #3: While we expect to see continued margin expansion over time, we believe that the levels that we have seen in the last few quarters is representative of where we will be in the near term.
Speaker #3: With the shift in product mix towards consumables and software, we see a benefit to gross margin as well. Importantly, these adjustments and improvements in cost and margin are strong indicators that we are meaningfully improving the financial profile of Bionano.
Speaker #3: Now, lastly, turning to our final emphasis on building the support needed for OGM reimbursement, where we believe a growing number of publications illustrate the utility of OGM in cytogenetics and clinical research as well as the number of clinical research genomes published, taken together, we see these as positive leading indicators of future adoption.
Speaker #3: Of optical genome mapping. In the Q3 of 2025, there were 97 new publications demonstrating the value of optical genome mapping, and this represents a 10% growth over the same period the year before and the OGM community has now published on a cumulative basis nearly 11,000 500 clinical research genomes.
Speaker #3: These publications provide the support for new customers to adopt, existing customers to expand their applications, and third parties to support OGM in reimbursement and consideration for medical society recommendations and guidelines.
Speaker #3: Now, looking closer at some of the key studies presented and presentations over the last few months, first, we had a strong presence at the ASHG annual meeting in Boston last month where there were nine studies presented including oral presentations and posters, that demonstrated both growing interest in key in existing geographies for optical genome mapping as well as in new regions and we were impressed to see a strong contribution from Japan.
Speaker #3: We're excited to see this interest in optical genome mapping continue to grow on a global basis. Second, a new publication from the MD Anderson Cancer Center at the University of Texas which was recently published shows how optical genome mapping can overcome key limitations of targeted RNA-seq for cytogenetic investigation in acute leukemias.
Speaker #3: This paper represented the first benchmark comparison of optical genome mapping directly to RNA-seq in cancer. It supports our overall digital pathology strategy by tying OGM to methods that are commonly used in molecular pathology and represents an important expansion outside of cytogenetics.
Speaker #3: For us, third, multiple studies highlighting the OGM utility for analysis of cancer of the cancer biomarker chromo-anagenesis were published in a book edition of molecular methods in sorry, methods in molecular biology.
Speaker #3: Chromo-anagenesis refers to a catastrophic genomic event frequently associated with complex karyotypes and extensive clonal heterogeneity. Treatment resistance, poor prognosis, and it includes events such as chromotrypsis, chromoplexy, and chromo-anacentesis.
Speaker #3: All of which play significant roles in cancer development and are hard to sort out using existing tools in cytogenetics. Optical genome mapping provides a genome-wide view of structural variations that high resolution which enables precise identification and characterization of the genome variation underpinning this chromo-anagenesis.
Speaker #3: The four chapters published in this series highlight the use of optical genome mapping and the expansion into new cancer types for OGM such as multiple myeloma, and chronic lymphocytic leukemia or CLL.
Speaker #3: As well as the proliferation of novel workflows such as something new called DAM-assisted fluorescent tagging of chromatin accessibility which is a hybrid method for highly detailed spatial analysis of chromatin assemblies.
Speaker #3: And so this is one of the first times that we're seeing optical genome mapping being integrated into spatial analysis. Now, in our last call, we shared that the editorial board of the American Medical Association established a second category one CPT code for optical genome mapping.
Speaker #3: This one in the evaluation of constitutional genetic disorders. And that represented another incredible milestone for the OGM community. I'm pleased to share that in mid-September, CMS posted the preliminary payment determination for this CPT code which is based on a crosswalk to a previously established OGM code priced at $1,263.53.
Speaker #3: Pricing at this level which is higher than what microarray codes are priced at is consistent with the needs of laboratories today seeking to move forward from the legacy methods.
Speaker #3: We believe this CPT code builds on the evidence that OGM can outperform these legacy methods across a number of applications and may pave the way for more routine use of OGM across oncology and clinical genetic research communities globally.
Speaker #3: So to wrap up, I would like to provide our outlook for the remainder of the year. We are reiterating our full year 2025 revenue guidance of 26 to 30 million dollars.
Speaker #3: We expect the fourth quarter of 2025 revenues to be in the range of 7.5 to 7.9 million dollars. And given that we've reached 23 new OGM system installations in the first nine months of this year, we now expect to exceed the prior range of 20 to 25 systems likely surpassing the high end of that.
Speaker #3: So with that, Dee Dee, please go ahead and open the line for
Speaker #2: Thank you. To ask a
Speaker #2: Question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Speaker #2: Please stand by while we compile the Q&A roster. And our first question comes from Yi Chen of HC Wainwright. Your line is open.
Speaker #3: Hi, good afternoon. Thank you for taking my question. My first question is, with respect to increasing the utilization of routine among routine use customers can you talk about what is the potential peak level of utilization for these routine use customers?
Speaker #3: And how soon do you expect these customers to achieve the peak level based on the current...
Speaker #3: trend? Thanks. Yeah,
Speaker #4: it's I think it's a key question and important topic. Thank you Yi for joining the call for the question. What we feel confident about, first of all, is that in general, the labs are not sample limited.
Speaker #4: So, they have an abundance of samples. Those samples are distributed across multiple different indications. And so, the process of expanding utilization involves the laboratories developing and validating an assay for one application, running that for a while, and then beginning to grow the menu by developing an assay for another research indication, and so on and so forth.
Speaker #4: That's really the primary mechanism of growth. And what we see across the user landscape is that the average utilization across these routine users that are running on a regular basis is about four samples per week.
Speaker #4: But at the highest end of the spectrum, it's as high as 40 samples per week. And so our view is that a reasonable target for us to shoot for is maybe the midpoint between the four and the 40.
Speaker #4: So getting up to in the low 20s on average across all of the routine users. And so that's what we're going to try to make
Speaker #4: happen. Thank you.
Speaker #3: And with respect to the Japanese market, can you tell us how many what is the current install base in Japan? How do you think the market could ramp up in comparison to the
Speaker #3: US market? Yeah.
Speaker #4: So we have really only one system installed in Japan and it's at a laboratory of a service provider. And so different academic customers industrial customers can send samples to this laboratory, have them processed, and get data.
Speaker #4: And so that's what's going on. What we see is that the interest in Japan has evolved over time. Initially, when this service's lab first got going, they were primarily focused on non-human applications, actually.
Speaker #4: And now in the last couple of years, that has changed. And so the evolution is much more consistent with what we see in other areas.
Speaker #4: Work in genetic diseases, leukemias and lymphomas, and so we would expect that market to evolve similar to what we see in the US for those applications.
Speaker #4: I think that there's also a significant opportunity in Japan around cell and gene therapy development. And so we're seeing some of these pharma companies begin to access this service provider.
Speaker #4: And so there's tremendous potential in Japan. I do think for the types of clinical research applications that we're doing in other regions such as hematologic malignancies and constitutional genetic diseases, that it will take some time.
Speaker #4: They're going to want to build up a kind of war chest of local data in support of optical genome mapping, but that's ongoing. I think that the pharma can accelerate and so we're paying attention to all of these and we're quite happy to see some presentations or posters, actually, at ASHG last
Speaker #4: month. Got it.
Speaker #3: And with respect to offering expenses, do you expect it to remain relatively stable going forward?
Speaker #4: Yes. Yes, I think this is the range that we're intending to be in. We're in the process of putting together our detailed operating plan for next year and we see some areas where we might like to invest, but I think that our overall intention is to keep things as flat as we possibly can except where opportunities justify it.
Speaker #3: Got it. Thank you,
Speaker #3: Eric.
Speaker #4: Yeah, you're welcome, Yi.
Speaker #2: Thank you. I show no further questions at this time. I'd like to turn it back to Eric Holmlin for closing remarks.
Speaker #4: Great. Very good, DD. Thank you. And thank you to everybody who joined the call. And we look forward to updating you on our full year results next year.
Speaker #4: Thank you very much.