Q4 2025 Alpha Teknova Inc Earnings Call

February 26, 2026

Jennifer Henry: Good day. Welcome to Teknova's Q4 and full-year 2025 Financial Results Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Ms. Jennifer Henry, Senior Vice President of Marketing. Please go ahead.

Speaker #1: After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your speaker, Ms. Jennifer Henry, Senior Vice President of Marketing. Please go ahead.

Jennifer Henry: Thank you, Operator. Welcome to Teknova's Q4 and full-year 2025 Earnings Conference Call. 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 prepared remarks and then take your questions. 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 #2: Thank you, Operator. Welcome to TechNova's fourth quarter and full year 2025 earnings conference call. With me on today's call are Stephen Gunstream, TechNova's President and Chief Executive Officer; and Matt Lowell, TechNova's Chief Financial Officer who will make prepared remarks and then take your questions.

Jennifer Henry: 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 prepared remarks and then take your questions. 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. 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. 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 as required by law.

Speaker #2: 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.

Jennifer Henry: 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. 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 as required by law.

Speaker #2: 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 #2: 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 as required by law.

Speaker #2: The company's management believes that, in addition to gap results, non-gap financial measures can provide meaningful insight when evaluating the company's financial performance and the effectiveness of its business strategies.

Jennifer Henry: The company's management believes that, in addition to GAAP 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. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this afternoon, which is posted to Teknova's website and at www.sec.gov/EDGAR. 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 GAAP. The non-GAAP financial measures in this presentation may differ from similarly named non-GAAP financial measures used by other companies. Please also be advised that the company has posted a supplemental slide deck to accompany today's prepared remarks.

Speaker #2: We will therefore use non-gap financial measures of certain of our results during this call. Reconciliations of gap to non-gap financial measures are included in the press release that we issued this afternoon, which is posted to TechNova's website and at www.sec.gov/edgar.

Speaker #2: Non-gap 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.

Jennifer Henry: The non-GAAP financial measures in this presentation may differ from similarly named non-GAAP financial measures used by other companies. 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 Teknova's website and on today's webcast. Now I will turn the call over to Stephen.

Speaker #2: The non-GAAP financial measures in this presentation may differ from similarly named non-GAAP financial measures used by other companies. Please also be advised that the company has posted a supplemental slide deck to accompany today's prepared remarks.

Speaker #2: It can be accessed on the Investor Relations section of Teknova's website and on today's webcast. And now, I will turn the call over to Stephen.

Jennifer Henry: It can be accessed on the investor relations section of Teknova's website and on today's webcast. Now I will turn the call over to Stephen. Thank you, Jen. Good afternoon, and thank you, everyone, for joining us for our Q4 and full-year 2025 earnings call. 2025 was another year of strong all-around execution for Teknova. Our top-line revenue growth accelerated to 7% compared to 2024 despite a challenging macro environment. Revenue from sales of our catalog products led the way, growing by low double digits compared to 2024. The number of customers actively buying our clinical products increased to 60, 25% more than during 2024. We set new standards for customer service levels, delivering approximately 95% of our products on time in 2025.

Stephen Gunstream: Thank you, Jen. Good afternoon, and thank you, everyone, for joining us for our Q4 and full-year 2025 earnings call. 2025 was another year of strong all-around execution for Teknova. Our top-line revenue growth accelerated to 7% compared to 2024 despite a challenging macro environment. Revenue from sales of our catalog products led the way, growing by low double digits compared to 2024. The number of customers actively buying our clinical products increased to 60, 25% more than during 2024. We set new standards for customer service levels, delivering approximately 95% of our products on time in 2025.

Speaker #3: Thank you, Jen. Good afternoon and thank you, everyone, for joining us for our fourth quarter and full year 2025 earnings call. 2025 was another year of strong all-around execution for TechNova.

Speaker #3: Our top-line revenue growth accelerated to 7% compared to 2024 despite a challenging macro environment. Revenue from sales of our catalog products led the way, growing by low double digits compared to 2024.

Speaker #3: The number of customers actively buying our clinical products increased to 60, which is 25% more than during 2024. We set new standards for customer service levels, delivering approximately 95% of our products on time in 2025.

Speaker #3: And we beat both our gross margin and adjusted EBITDA targets while utilizing only $10 million of cash, substantially better than our free cash outflow guidance of $12 million.

Jennifer Henry: We beat both our gross margin and Adjusted EBITDA targets while utilizing only $10 million of cash, substantially better than our free cash outflow guidance of $12 million. Now, as we look to 2026, I want to discuss why I believe Teknova has reached an inflection point in the growth strategy we articulated during our initial public offering back in June 2021. First, we have become a critical supplier of GMP-grade reagents to developers of emergent therapies and diagnostics. Second, we deliver research-grade reagents to a large, diverse, predictable, and growing set of customers. Third, with the revenue growth we anticipate, Teknova will offer an attractive financial profile of 60% to 65% gross margins and 25% to 30% Adjusted EBITDA margins. Starting with our GMP-grade reagents, as I noted earlier, we are a critical supplier to 60 clinical customers, 50 of which are biopharma-related.

Stephen Gunstream: We beat both our gross margin and Adjusted EBITDA targets while utilizing only $10 million of cash, substantially better than our free cash outflow guidance of $12 million. Now, as we look to 2026, I want to discuss why I believe Teknova has reached an inflection point in the growth strategy we articulated during our initial public offering back in June 2021. First, we have become a critical supplier of GMP-grade reagents to developers of emergent therapies and diagnostics. Second, we deliver research-grade reagents to a large, diverse, predictable, and growing set of customers. Third, with the revenue growth we anticipate, Teknova will offer an attractive financial profile of 60% to 65% gross margins and 25% to 30% Adjusted EBITDA margins. Starting with our GMP-grade reagents, as I noted earlier, we are a critical supplier to 60 clinical customers, 50 of which are biopharma-related.

Speaker #3: Now, as we look to 2026, I want to discuss why I believe TechNova has reached an inflection point in the growth strategy we articulated during our initial public offering back in June of 2021.

Speaker #3: First, we have become a critical supplier of GMP-grade reagents to developers of emerging therapies and diagnostics. Second, we deliver research-grade reagents to a large, diverse, predictable, and growing set of customers.

Speaker #3: And third, with the revenue growth we anticipate, TechNova will offer an attractive financial profile of 60 to 65% gross margins and 25 to 30% adjusted EBITDA margins.

Speaker #3: Starting with our GMP-grade reagents, as I noted earlier, we are a critical supplier to 60 clinical customers' 50 of which are biopharma-related. We believe we are now supporting at least 70 therapies from these 50 customers.

Jennifer Henry: We believe we are now supporting at least 70 therapies from these 50 customers. Notably, we are increasing both the total number of therapies and the number of later-stage therapies we support as many of these therapies move closer to commercialization. We believe that at the end of 2025, we supported 5 therapies in phase 2 or later and 12 in phase 1, up from 3 and 10 respectively at the end of 2024. We now believe that we will be supporting at least commercial therapy by the end of 2027. The remaining 10 of our Clinical Solutions customers are primarily within the life science tools and diagnostics market segment. We supply these customers with everything from private-label proprietary reagents for use in bioprocessing workflows to GMP-grade ready-to-use sample isolation and preparation reagents for use in cancer screening applications.

Stephen Gunstream: We believe we are now supporting at least 70 therapies from these 50 customers. Notably, we are increasing both the total number of therapies and the number of later-stage therapies we support as many of these therapies move closer to commercialization. We believe that at the end of 2025, we supported five therapies in phase II or later and 12 in phase I, up from three and 10 respectively at the end of 2024. We now believe that we will be supporting at least commercial therapy by the end of 2027. The remaining 10 of our Clinical Solutions customers are primarily within the life science tools and diagnostics market segment. We supply these customers with everything from private-label proprietary reagents for use in bioprocessing workflows to GMP-grade ready-to-use sample isolation and preparation reagents for use in cancer screening applications.

Speaker #3: Notably, we are increasing both the total number of therapies and the number of later-stage therapies we support as many of these therapies move closer to commercialization.

Speaker #3: We believe that at the end of 2025, we supported five therapies in phase two or later, and 12 in phase one. Up from three and 10 respectively.

Speaker #3: At the end of 2024. We now believe that we will be supporting at least commercial therapy by the end of 2027. The remaining 10 of our clinical solutions customers are primarily within the life science tools and diagnostics market segment.

Speaker #3: We supply these customers with everything from private-label proprietary reagents for use in bioprocessing workflows to GMP-grade, ready-to-use sample isolation and preparation reagents for use in cancer screening applications.

Speaker #3: We believe that, similar to the therapies we support directly, these customers will scale their use of our products significantly as the diagnostics or therapies they're supporting are developing receive FDA approval.

Jennifer Henry: We believe that, similar to the therapies we support directly, these customers will scale their use of our products significantly as the diagnostics or therapies they're supporting or developing receive FDA approval. Now, shifting to our research-grade reagents, over the last 30 years, we have built a diverse and predictable business that has grown, on average, in the low double digits. This growth is attributable to our ability to provide a wide breadth of high-quality critical reagents for the entire life science community, combined with our ability to consistently achieve best-in-class turnaround times. This is why we have attracted over 3,000 customers while maintaining an overall 95% annual customer retention rate and a low customer concentration, with only 18% of our total revenue coming from the top 10 Lab Essentials customers in 2025.

Stephen Gunstream: We believe that, similar to the therapies we support directly, these customers will scale their use of our products significantly as the diagnostics or therapies they're supporting or developing receive FDA approval. Now, shifting to our research-grade reagents, over the last 30 years, we have built a diverse and predictable business that has grown, on average, in the low double digits. This growth is attributable to our ability to provide a wide breadth of high-quality critical reagents for the entire life science community, combined with our ability to consistently achieve best-in-class turnaround times. This is why we have attracted over 3,000 customers while maintaining an overall 95% annual customer retention rate and a low customer concentration, with only 18% of our total revenue coming from the top 10 Lab Essentials customers in 2025.

Speaker #3: Now, shifting to our research-grade reagents, over the last 30 years, we have built a diverse and predictable business that has grown on average in the low double digits.

Speaker #3: This growth is attributable to our ability to provide a wide breadth of high-quality critical reagents for the entire life science community combined with our ability to consistently achieve best-in-class turnaround times.

Speaker #3: This is why we have attracted over 3,000 customers while maintaining an overall 95% annual customer retention rate and a low customer concentration with only 18% of our total revenue coming from the top 10 lab essentials customers in 2025.

Speaker #3: As we look forward, we plan to build on these strengths by streamlining order-to-purchase experiences and expand further into private label manufacturing, particularly in the life science tools and diagnostics market segment.

Jennifer Henry: As we look forward, we plan to build on these strengths by streamlining order-to-purchase experiences and expand further into private-label manufacturing, particularly in the life science tools and diagnostics market segment. Already, many of our larger customers utilize Teknova to manufacture their proprietary formulations, or direct inclusion in their kits, or to produce bulk reagents for in-house manufacturing of their kits. We believe this capability will allow us to further penetrate high-growth market segments like sequencing, spatial genomics, and cancer screening. Finally, we will generate significant operating leverage in our P&L as our revenue increases. That's because the investments we've already made in our facilities, IT infrastructure, and automated processes and equipment will enable the company to generate more than $200 million in revenue with limited additional operating and capital expenditures.

Stephen Gunstream: As we look forward, we plan to build on these strengths by streamlining order-to-purchase experiences and expand further into private-label manufacturing, particularly in the life science tools and diagnostics market segment. Already, many of our larger customers utilize Teknova to manufacture their proprietary formulations, or direct inclusion in their kits, or to produce bulk reagents for in-house manufacturing of their kits. We believe this capability will allow us to further penetrate high-growth market segments like sequencing, spatial genomics, and cancer screening. Finally, we will generate significant operating leverage in our P&L as our revenue increases. That's because the investments we've already made in our facilities, IT infrastructure, and automated processes and equipment will enable the company to generate more than $200 million in revenue with limited additional operating and capital expenditures.

Speaker #3: Already, many of our larger customers utilize TechNova to manufacture their proprietary formulations or direct inclusion in their kits. Or to produce bulk reagents for in-house manufacturing of their kits.

Speaker #3: We believe this capability will allow us to further penetrate high-growth market segments like sequencing, spatial genomics, and cancer screening. Finally, we will generate significant operating leverage in our P&L as our revenue increases.

Speaker #3: That's because the investments we've already made in our facilities, IT infrastructure, and automated processes and equipment will enable the company to generate more than $200 million in revenue with limited additional operating and capital expenditures.

Speaker #3: As a result, we believe that incremental revenue will continue to drop to the bottom line at a rate of approximately 70%. Considering our current cost structure and anticipated revenue growth this year and next, we therefore expect to become adjusted EBITDA positive by the end of 2027.

Jennifer Henry: As a result, we believe that incremental revenue will continue to drop to the bottom line at a rate of approximately 70%. Considering our current cost structure and anticipated revenue growth this year and next, we therefore expect to become Adjusted EBITDA positive by the end of 2027. Now, let's talk about some possible catalysts for our business over the next 12 to 18 months. Given that we have begun to see investments in our growth strategy pay off, as well as some market stabilization in life science tools, diagnostics, and bioprocessing, we have decided to invest further in our commercial capabilities and activities, focusing on select market segments where we feel we have a differentiated product offering.

Stephen Gunstream: As a result, we believe that incremental revenue will continue to drop to the bottom line at a rate of approximately 70%. Considering our current cost structure and anticipated revenue growth this year and next, we therefore expect to become Adjusted EBITDA positive by the end of 2027. Now, let's talk about some possible catalysts for our business over the next 12 to 18 months. Given that we have begun to see investments in our growth strategy pay off, as well as some market stabilization in life science tools, diagnostics, and bioprocessing, we have decided to invest further in our commercial capabilities and activities, focusing on select market segments where we feel we have a differentiated product offering.

Speaker #3: Now, let's talk about some possible catalysts for our business over the next 12 to 18 months. Given that we have begun to see investments in our growth strategy pay off, as well as some market stabilization in life science tools, diagnostics, and bioprocessing, we have decided to invest further in our commercial capabilities and activities focusing on select market segments where we feel we have a

Speaker #1: The differentiated product offering , albeit relatively modest at approximately $2 million per year . We believe these investments will allow us to accelerate revenue growth towards the end of 2020 and into 2027 by expanding our presence with customers in these attractive market segments .

Jennifer Henry: Albeit relatively modest, at approximately $2 million per year, we believe these investments will allow us to accelerate revenue growth towards the end of 2026 and into 2027 by expanding our presence with customers in these attractive market segments. We are excited to turn our primary focus back to investing in the business and away from cost-cutting. In addition, there has been an uptick in reported biotech funding in Q4 2025 and early in Q1 2026. Based on historical data, we see approximately a four-quarter lag between funding changes and their effects on our revenue. Therefore, if the increases in biotech funding continue, we would expect to see growth in biopharma-related revenue beginning in Q4 2026.

Stephen Gunstream: Albeit relatively modest, at approximately $2 million per year, we believe these investments will allow us to accelerate revenue growth towards the end of 2026 and into 2027 by expanding our presence with customers in these attractive market segments. We are excited to turn our primary focus back to investing in the business and away from cost-cutting. In addition, there has been an uptick in reported biotech funding in Q4 2025 and early in Q1 2026. Based on historical data, we see approximately a four-quarter lag between funding changes and their effects on our revenue. Therefore, if the increases in biotech funding continue, we would expect to see growth in biopharma-related revenue beginning in Q4 2026.

Speaker #1: We are excited to turn our primary focus back to investing in the business and away from cost cutting . In addition , there has been an uptick in reported biotech funding in Q4 2025 and early in Q1 2026 .

Speaker #1: Based on historical data , we see approximately That some of the therapies and diagnostics we support may receive FDA approval in 2027 , which we believe would result in an increase in the frequency and volume of purchases of our products Lastly , as we have mentioned previously , we believe there is an opportunity to expand our product portfolio through collaborations and acquisitions While we have spent recent years investing in infrastructure systems and scalability , numerous other companies have focused on developing novel products and technologies by acquiring or collaborating closely with these companies .

Jennifer Henry: Aside from funding, we also believe that some of the therapies and diagnostics we support may receive FDA approval in 2027, which we believe would result in an increase in the frequency and volume of purchases of our products. Lastly, as we have mentioned previously, we believe there is an opportunity to expand our product portfolio through collaborations and acquisitions. While we have spent recent years investing in infrastructure systems and scalability, numerous other companies have focused on developing novel products and technologies. By acquiring or collaborating closely with these companies, we believe we can expand our product portfolio and geographic footprint. The combination of our operational and commercial scale with our potential collaborators' novel products and technologies creates a great opportunity to drive additional top-line growth and margin expansion over the longer term.

Stephen Gunstream: Aside from funding, we also believe that some of the therapies and diagnostics we support may receive FDA approval in 2027, which we believe would result in an increase in the frequency and volume of purchases of our products. Lastly, as we have mentioned previously, we believe there is an opportunity to expand our product portfolio through collaborations and acquisitions. While we have spent recent years investing in infrastructure systems and scalability, numerous other companies have focused on developing novel products and technologies. By acquiring or collaborating closely with these companies, we believe we can expand our product portfolio and geographic footprint.

Speaker #1: We believe we can expand our product portfolio and geographic footprint . The combination of our operational and commercial scale , with our potential collaborators , novel products and technologies creates a great opportunity to drive additional top line growth and margin expansion over the longer term .

Stephen Gunstream: The combination of our operational and commercial scale with our potential collaborators' novel products and technologies creates a great opportunity to drive additional top-line growth and margin expansion over the longer term. All things considered, we believe we are well-positioned to drive sustainable, above-market revenue growth of 20% to 25% over the longer term and deliver long-term value for our shareholders.I will now hand the call over to Matt Lowell to talk through the financials.

Speaker #1: All things considered , we believe we are well positioned to drive sustainable above market revenue growth of 20 to 25% over the longer term and deliver long term value for our shareholders .

Jennifer Henry: All things considered, we believe we are well-positioned to drive sustainable, above-market revenue growth of 20% to 25% over the longer term and deliver long-term value for our shareholders. I will now hand the call over to Matt Lowell to talk through the financials. Thanks, Stephen Gunstream, good afternoon, everyone. I'm pleased with our financial performance in 2025. As Stephen Gunstream mentioned, we finished the year with momentum, delivering 8% and 7% year-over-year revenue growth in Q4 and full year 2025, respectively. This marks our sixth straight quarter of revenue growth. We significantly improved Free Cash outflow from $13.5 million in the full year 2024 to $9.8 million for the full year 2025.

Speaker #1: I will now hand the call over to to talk through the financials

Matt Lowell: Thanks, Stephen Gunstream, good afternoon, everyone. I'm pleased with our financial performance in 2025. As Stephen Gunstream mentioned, we finished the year with momentum, delivering 8% and 7% year-over-year revenue growth in Q4 and full year 2025, respectively. This marks our sixth straight quarter of revenue growth. We significantly improved Free Cash outflow from $13.5 million in the full year 2024 to $9.8 million for the full year 2025.

Speaker #2: Thanks , Steven , and good afternoon , everyone . I'm pleased with our financial performance in 2025 as Steven mentioned , we finished the year with momentum , delivering 8% and 7% year over year revenue growth in the fourth quarter and full year of 2025 , respectively This marks our sixth straight quarter of revenue growth and we .

Speaker #2: Significantly improved free cash outflow from 13.5 million in the full year 2024 to 9.8 million for the full year 2025 . Total revenue for the fourth quarter of 2025 was 10.0 million , and 8% increase from 9.3 million for the fourth quarter of 2020 .

Jennifer Henry: Total revenue for Q4 2025 was $10.0 million, an 8% increase from $9.3 million for Q4 2024, and $40.5 million for the full year 2025, a 7% increase from $37.7 million for the full year 2024. Lab Essentials products are targeted at the research use only or RUO market and include both catalog and custom products. In 2025, approximately 75% of Lab Essentials revenue was derived from catalog products and 25% from custom products. Lab Essentials revenue was $6.8 million in Q4 of both 2025 and 2024, as the increase in the number of customers in 2025 was largely offset by lower average revenue per customer. For the full year, Lab Essentials revenue was $31.0 million in 2025, up 7% compared to $28.9 million in 2024.

Matt Lowell: Total revenue for Q4 2025 was $10.0 million, an 8% increase from $9.3 million for Q4 2024, and $40.5 million for the full year 2025, a 7% increase from $37.7 million for the full year 2024. Lab Essentials products are targeted at the research use only or RUO market and include both catalog and custom products. In 2025, approximately 75% of Lab Essentials revenue was derived from catalog products and 25% from custom products. Lab Essentials revenue was $6.8 million in Q4 of both 2025 and 2024, as the increase in the number of customers in 2025 was largely offset by lower average revenue per customer. For the full year, Lab Essentials revenue was $31.0 million in 2025, up 7% compared to $28.9 million in 2024.

Speaker #2: For 2025, revenue is expected to be $40.5 million for the full year, a 7% increase from $37.7 million for the full year 2024. Lab essentials products are targeted at the research use only, or RUO, market, and include both catalog and custom products.

Speaker #2: In 2025, approximately 75% of Lab Essentials revenue was derived from catalog products and 25% from custom products. Lab Essentials revenue was $6.8 million in the fourth quarter of 2025 and 2024.

Speaker #2: As the increase in the number of customers in 2025 was largely offset by lower average revenue per customer for the full year , Lab Essentials revenue was 31.0 million in 2025 , up 7% compared to 28.9 million in 2024 .

Speaker #2: The increase in Lab Essentials revenue for the full year 2025 was attributable to an 11% increase in the number of customers, partially offset by a 3% decrease in average revenue per customer. Clinical Solutions products are made according to Good Manufacturing Practices, or GMP quality standards, and are primarily used by our customers as components or inputs in the development and manufacture of diagnostic and therapeutic products. In 2025, approximately 90% of Clinical Solutions revenue was derived from custom products and 10% from catalog products.

Jennifer Henry: The increase in Lab Essentials revenue for the full year 2025 was attributable to an 11% increase in the number of customers, partially offset by a 3% decrease in average revenue per customer. Clinical Solutions products are made according to good manufacturing practices or GMP quality standards and are primarily used by our customers as components or inputs in the development and manufacture of diagnostic and therapeutic products. In 2025, approximately 90% of Clinical Solutions revenue was derived from custom products and 10% from catalog products. Clinical Solutions revenue was $2.7 million in Q4 2025, a 47% increase from $1.9 million in Q4 2024. The increase in Clinical Solutions revenue in Q4 2025 was attributable to an increased number of customers, partially offset by lower average revenue per customer.

Matt Lowell: The increase in Lab Essentials revenue for the full year 2025 was attributable to an 11% increase in the number of customers, partially offset by a 3% decrease in average revenue per customer. Clinical Solutions products are made according to good manufacturing practices or GMP quality standards and are primarily used by our customers as components or inputs in the development and manufacture of diagnostic and therapeutic products. In 2025, approximately 90% of Clinical Solutions revenue was derived from custom products and 10% from catalog products. Clinical Solutions revenue was $2.7 million in Q4 2025, a 47% increase from $1.9 million in Q4 2024. The increase in Clinical Solutions revenue in Q4 2025 was attributable to an increased number of customers, partially offset by lower average revenue per customer.

Speaker #2: Clinical Solutions revenue was $2.7 million in the fourth quarter of 2025, a 47% increase from $1.9 million in the fourth quarter of 2024.

Speaker #2: The increase in Clinical Solutions revenue in the fourth quarter of 2025 was attributable to an increased number of customers, partially offset by lower average revenue per customer for the full year.

Jennifer Henry: For the full year, Clinical Solutions revenue was $7.7 million in 2025, an 8% increase from $7.1 million in 2024. We added Clinical Solutions customers in 2025, growing from 48 customers in 2024 to 60 that spend more than $5,000 annually. Average revenue per customer decreased 14% in 2025 to $128,000. We expect revenue per customer to increase over time when a subset of these customers ramp up their purchase volumes as they move through clinical trial phases. However, this metric can be affected by the addition of newer Clinical Solutions or GMP catalog customers who typically order less. Just as a reminder, due to larger average order size in Clinical Solutions compared to Lab Essentials, there can be more quarter-to-quarter revenue lumpiness in this category.

Matt Lowell: For the full year, Clinical Solutions revenue was $7.7 million in 2025, an 8% increase from $7.1 million in 2024. We added Clinical Solutions customers in 2025, growing from 48 customers in 2024 to 60 that spend more than $5,000 annually. Average revenue per customer decreased 14% in 2025 to $128,000. We expect revenue per customer to increase over time when a subset of these customers ramp up their purchase volumes as they move through clinical trial phases. However, this metric can be affected by the addition of newer Clinical Solutions or GMP catalog customers who typically order less. Just as a reminder, due to larger average order size in Clinical Solutions compared to Lab Essentials, there can be more quarter-to-quarter revenue lumpiness in this category.

Speaker #2: Clinical Solutions revenue was $7.7 million in 2025, an 8% increase from $7.1 million in 2024. We added Clinical Solutions customers in 2025, growing from 48 customers in 2024 to 60.

Speaker #2: That spend more than $5,000 annually . Average revenue per customer decreased 14% in 2025 to $128,000 . We expect revenue per customer to increase over time when a subset of these customers ramp up their purchase volumes as they move through clinical trial phases .

Speaker #2: However , this metric can be affected by the addition of newer clinical solutions or GMP catalog customers who typically order less . Just as a reminder , due to larger average order size in Clinical solutions compared to Lab Essentials , there can be more quarter to quarter revenue lumpiness in this category Onto the income statement .

Jennifer Henry: Onto the income statement, gross profit for Q4 2025 was $3.2 million compared to $2.1 million in Q4 2024 and $13.4 million for the full year 2025 compared to $7.2 million for the full year 2024. Gross margin was 32.5% in Q4 2025, which is up from 23.0% in Q4 2024, and 33.2% for the full year 2025, which is up from 19.2% for the full year 2024. The increase in gross profit percentage in Q4 2025 was primarily driven by higher Clinical Solutions revenue and manufacturing efficiency gains. The increase in gross profit percentage for the full year 2025 was primarily driven by the $2.8 million non-recurring and non-cash charges in 2024 related to the disposal of expired inventory and write-down of excess inventory.

Matt Lowell: Onto the income statement, gross profit for Q4 2025 was $3.2 million compared to $2.1 million in Q4 2024 and $13.4 million for the full year 2025 compared to $7.2 million for the full year 2024. Gross margin was 32.5% in Q4 2025, which is up from 23.0% in Q4 2024, and 33.2% for the full year 2025, which is up from 19.2% for the full year 2024. The increase in gross profit percentage in Q4 2025 was primarily driven by higher Clinical Solutions revenue and manufacturing efficiency gains. The increase in gross profit percentage for the full year 2025 was primarily driven by the $2.8 million non-recurring and non-cash charges in 2024 related to the disposal of expired inventory and write-down of excess inventory.

Speaker #2: Gross profit for the fourth quarter of 2025 was 3.2 million , compared to 2.1 million in the fourth quarter of 2024 and 13.4 million for the full year 2025 , compared to 7.2 million for the full year 2024 gross margin was 32.5% in the fourth quarter of 2025 , which is up from 23.0% in the fourth quarter of 2024 and 33.2% for the full year 2025 , which is up from 19.2% for the full year 2024 .

Speaker #2: The increase in gross profit percentage in the fourth quarter 2025 was primarily driven by higher clinical solutions , revenue and manufacturing efficiency gains .

Speaker #2: The increase in gross profit percentage for the full year 2025 was primarily driven by the 2.8 million non-recurring and non-cash charges in 2024 related to the disposal of expired inventory and write down of excess inventory .

Speaker #2: Excluding these non-recurring and non-cash charges, gross profit and gross margin would have been $10.0 million and 26.5%, respectively, in 2024.

Jennifer Henry: Excluding these non-recurring and non-cash charges, gross profit and gross margin would have been $10.0 million and 26.5%, respectively, in 2024. The improvement in gross margin from 26.5% to 33.2% was driven primarily by higher revenue and manufacturing efficiency gains. Operating expenses for Q4 2025 were $7.9 million, and for Q4 2024 were $7.8 million. Excluding the non-recurring charges of $0.5 million in Q4 2025 related to non-recurring transaction expenses, operating expenses were down $0.4 million. The decrease was driven by an overall net reduction in general and administrative spending, somewhat offset by increased investment in our sales and marketing efforts. Operating expenses for 2025 were $30.4 million compared to $33.4 million in 2024. Excluding non-recurring charges of $0.5 million in 2025 and $1.4 million in 2024, operating expenses decreased $2.1 million.

Matt Lowell: Excluding these non-recurring and non-cash charges, gross profit and gross margin would have been $10.0 million and 26.5%, respectively, in 2024. The improvement in gross margin from 26.5% to 33.2% was driven primarily by higher revenue and manufacturing efficiency gains. Operating expenses for Q4 2025 were $7.9 million, and for Q4 2024 were $7.8 million. Excluding the non-recurring charges of $0.5 million in Q4 2025 related to non-recurring transaction expenses, operating expenses were down $0.4 million. The decrease was driven by an overall net reduction in general and administrative spending, somewhat offset by increased investment in our sales and marketing efforts. Operating expenses for 2025 were $30.4 million compared to $33.4 million in 2024. Excluding non-recurring charges of $0.5 million in 2025 and $1.4 million in 2024, operating expenses decreased $2.1 million.

Speaker #2: The improvement in gross margin from 26.5% to 33.2% was driven primarily by higher revenue and manufacturing efficiency gains. Operating expenses for the fourth quarter of 2025 were $7.9 million, and for the fourth quarter of 2024 were $7.8 million.

Speaker #2: Excluding the non-recurring charges of 0.5 million in the fourth quarter of 2025 related to non-recurring transaction expenses , operating expenses were down 0.4 million .

Speaker #2: The decrease was driven by an overall net reduction in general and administrative spending . Somewhat offset by increased investments in our sales and marketing efforts .

Speaker #2: Operating expenses for 2025 were 30.4 million , compared to 33.4 million in 2020 . For excluding non-recurring charges of 0.5 million in 2025 and 1.4 million in 2024 .

Speaker #2: Operating expenses decreased 2.1 million . The decrease was driven by reduced headcount and spending , primarily on facility costs , insurance , freight and professional fees , as well as by lower stock based compensation expense .

Jennifer Henry: The decrease was driven by reduced headcount and spending, primarily on facility costs, insurance, freight, and professional fees, as well as by lower stock-based compensation expense due to one-time costs incurred in connection with the stock option repricing that occurred in 2024. At the end of Q4 2025, we had 158 associates compared to 173 a year prior. Net loss for Q4 2025 was $4.8 million or $0.09 per diluted share compared to a net loss of $5.7 million or $0.11 per diluted share for Q4 2024. Net loss for the full year 2025 was $17.3 million or $0.32 per diluted share compared to a net loss of $26.7 million or $0.57 per diluted share for the full year 2024.

Matt Lowell: The decrease was driven by reduced headcount and spending, primarily on facility costs, insurance, freight, and professional fees, as well as by lower stock-based compensation expense due to one-time costs incurred in connection with the stock option repricing that occurred in 2024. At the end of Q4 2025, we had 158 associates compared to 173 a year prior. Net loss for Q4 2025 was $4.8 million or $0.09 per diluted share compared to a net loss of $5.7 million or $0.11 per diluted share for Q4 2024. Net loss for the full year 2025 was $17.3 million or $0.32 per diluted share compared to a net loss of $26.7 million or $0.57 per diluted share for the full year 2024.

Speaker #2: Due to one time costs incurred in connection with the stock option . Repricing that occurred in 2024 . At the end of the fourth quarter 2025 , we had 158 associates compared to 173 a year prior .

Speaker #2: Net loss for the fourth quarter 2025 was 4.8 million , or $0.09 per diluted share , compared to a net loss of 5.7 million , or $0.11 per diluted share , for the fourth quarter of 2020 .

Speaker #2: For net loss for the full year , 2025 was 17.3 million , or $0.32 per diluted share , compared to a net loss of 26.7 million , or $0.57 per diluted share , for the full year 2020 .

Speaker #2: For adjusted EBITDA , a non-GAAP measure was -1.8 million for the fourth quarter of 2020 , five , compared to -3.2 million for the fourth quarter of 2020 .

Jennifer Henry: Adjusted EBITDA, a non-GAAP measure, was negative $1.8 million for Q4 2025 compared to negative $3.2 million for Q4 2024. Adjusted EBITDA for the full year 2025 was negative $6.7 million compared to negative $14.5 million for the full year 2024. Excluding the $2.8 million inventory charge, Adjusted EBITDA would have been negative $11.7 million for the full year 2024. Onto cash flow and balance sheet. Capital expenditures for Q4 2025 were $0.3 million compared to $0.6 million for Q4 2024. Capital expenditures for the full year 2025 and 2024 were both $1.1 million. Free Cash Flow, a non-GAAP measure which we define as cash provided by or used in operating activities, less purchases of property, plant, and equipment, was negative $0.8 million for Q4 2025 compared to negative $1.5 million for Q4 2024.

Matt Lowell: Adjusted EBITDA, a non-GAAP measure, was negative $1.8 million for Q4 2025 compared to negative $3.2 million for Q4 2024. Adjusted EBITDA for the full year 2025 was negative $6.7 million compared to negative $14.5 million for the full year 2024. Excluding the $2.8 million inventory charge, Adjusted EBITDA would have been negative $11.7 million for the full year 2024. Onto cash flow and balance sheet. Capital expenditures for Q4 2025 were $0.3 million compared to $0.6 million for Q4 2024. Capital expenditures for the full year 2025 and 2024 were both $1.1 million. Free Cash Flow, a non-GAAP measure which we define as cash provided by or used in operating activities, less purchases of property, plant, and equipment, was negative $0.8 million for Q4 2025 compared to negative $1.5 million for Q4 2024.

Speaker #2: For adjusted EBITDA for the full year, 2025 was negative $6.7 million compared to negative $14.5 million for the full year 2020.

Speaker #2: For excluding the $2.8 million inventory charge, adjusted EBITDA would have been -$11.7 million for the full year 2024. Onto cash flow and balance sheet, capital expenditures for the fourth quarter of 2025 were $0.3 million, compared to $0.6 million for the fourth quarter 2020.

Speaker #2: For capital expenditures for the full year 2025 and 2024 were both 1.1 million free cash flow , a non-GAAP measure which we define as cash provided by or used in operating activities .

Speaker #2: Less purchases of property , plant and equipment was -0.8 million for the fourth quarter of 2025 , compared to -1.5 million for the fourth quarter of 2020 .

Speaker #2: For free cash flow for the full year , 2025 was negative 9.8 million compared to 13.5 million for the full year 2024 . This decrease , compared to prior periods for both the quarter and the full year , was primarily due to lower cash used in operating activities .

Jennifer Henry: Free Cash Flow for the full year 2025 was -$9.8 million compared to $13.5 million for the full year 2024. This decrease compared to prior periods for both the quarter and the full year was primarily due to lower cash used in operating activities. As of 31 December 2025, we had $21.3 million in cash equivalents, and short-term investments, and $13.2 million in gross debt. Turning to our 2026 guidance and outlook, we are providing 2026 total revenue guidance of $42 million to $44 million. At the midpoint, this implies approximately 6% revenue growth compared to 2025. Over the last several quarters, other than in biotech, we saw strength from life science tools, diagnostics, and other end markets that we serve.

Matt Lowell: Free Cash Flow for the full year 2025 was -$9.8 million compared to $13.5 million for the full year 2024. This decrease compared to prior periods for both the quarter and the full year was primarily due to lower cash used in operating activities. As of 31 December 2025, we had $21.3 million in cash equivalents, and short-term investments, and $13.2 million in gross debt. Turning to our 2026 guidance and outlook, we are providing 2026 total revenue guidance of $42 million to $44 million. At the midpoint, this implies approximately 6% revenue growth compared to 2025. Over the last several quarters, other than in biotech, we saw strength from life science tools, diagnostics, and other end markets that we serve.

Speaker #2: As of December 31st , 2025 , we had 21.3 million in cash . Cash equivalents and short term investments , and 13.2 million in gross debt Turning to our 2026 guidance and outlook , we are providing 2026 total revenue guidance of 42 million to 44 million at the midpoint .

Speaker #2: This implies approximately 6% revenue growth compared to 2025 . Over the last several quarters . Other than in biotech , we saw strength from life science tools , diagnostics and other end markets that we serve While we saw an uptick in the amount of capital raised in the biotech industry in the fourth quarter of 2025 , we are looking for evidence that this can be sustained for longer before becoming more bullish on a recovery in this sector .

Jennifer Henry: While we saw an uptick in the amount of capital raised in the biotech industry in Q4 2025, we are looking for evidence that this can be sustained for longer before becoming more bullish on a recovery in this sector. Customer conversations about 2026 orders are encouraging, but we have yet to see a material change in the number of larger orders from our Clinical Solutions customers, which are critical to faster growth. As we have indicated before, due to the high percentage of fixed costs associated with our operations, we estimate that each additional dollar of revenue drops through at a marginal cash rate of approximately 70%, with some variability quarter-to-quarter in reported results due to GAAP accounting. We expect to see gross margin in the mid-30s percentage range in 2026 compared to 33% in 2025, based on the midpoint of our revenue guidance.

Matt Lowell: While we saw an uptick in the amount of capital raised in the biotech industry in Q4 2025, we are looking for evidence that this can be sustained for longer before becoming more bullish on a recovery in this sector. Customer conversations about 2026 orders are encouraging, but we have yet to see a material change in the number of larger orders from our Clinical Solutions customers, which are critical to faster growth. As we have indicated before, due to the high percentage of fixed costs associated with our operations, we estimate that each additional dollar of revenue drops through at a marginal cash rate of approximately 70%, with some variability quarter-to-quarter in reported results due to GAAP accounting. We expect to see gross margin in the mid-30s percentage range in 2026 compared to 33% in 2025, based on the midpoint of our revenue guidance.

Speaker #2: Customer conversations about 2026 orders are encouraging , but we have yet to see a material change in the number of larger orders from our clinical solutions .

Speaker #2: Customers , which are critical to faster growth as we have indicated before , due to the high percentage of fixed costs associated with our operations , we estimate that each additional dollar of revenue drops through at a marginal cash rate of approximately 70% , with some variability quarter to quarter in reported results due to GAAP accounting .

Speaker #2: We expect to see gross margin in the mid 30 percentage range in 2026 compared to 33% in 2025 , based on the midpoint of our revenue guidance The company posted operating expenses excluding non-recurring charges below 8 million for the seventh quarter in a row .

Jennifer Henry: The company posted operating expenses, excluding non-recurring charges, below $8 million for the seventh quarter in a row. After two years of significant cost cutting, we have successfully maintained our cost structure since early 2024 and are now in a position again to make prudent investments for growth. Now that we see early signs of a market recovery in biotech specifically, we have decided to increase our investment in sales and marketing by approximately $2 million in 2026. Our expectation is that this investment will pay off as soon as the end of 2026, but more likely in 2027, in the form of double-digit revenue growth rates. At this higher spending level, we expect to become Adjusted EBITDA positive in the range of $52 to 57 million in annualized revenue.

Matt Lowell: The company posted operating expenses, excluding non-recurring charges, below $8 million for the seventh quarter in a row. After two years of significant cost cutting, we have successfully maintained our cost structure since early 2024 and are now in a position again to make prudent investments for growth. Now that we see early signs of a market recovery in biotech specifically, we have decided to increase our investment in sales and marketing by approximately $2 million in 2026. Our expectation is that this investment will pay off as soon as the end of 2026, but more likely in 2027, in the form of double-digit revenue growth rates. At this higher spending level, we expect to become Adjusted EBITDA positive in the range of $52 to 57 million in annualized revenue.

Speaker #2: After two years of significant cost cutting, we have successfully maintained our cost structure since early 2024 and are now in a position again to make prudent investments for growth.

Speaker #2: Now that we see early signs of a market recovery in biotech specifically , we have decided to increase our investment in sales and marketing by approximately 2,000,000 in 2026 .

Speaker #2: Our expectation is that this investment will pay off as soon as the end of 2026, but more likely in 2027, in the form of double-digit revenue growth rates.

Speaker #2: At this higher spending level, we expect to become adjusted EBITDA positive in the range of $52 to $57 million in annualized revenue.

Speaker #2: If customer end markets are stronger in 2027 and are stepped up, and commercial activity bears fruit as expected, then we should report a positive adjusted EBITDA quarter by the end of 2027.

Jennifer Henry: If customer end markets are stronger in 2027 and our stepped-up commercial activity bears fruit as expected, then we should report a positive Adjusted EBITDA quarter by the end of 2027. The company saw a reduction in Free Cash Outflow during Q4 2025, both sequentially and versus prior year. This is the lowest quarterly Free Cash Outflow in nearly 5 years when we began our transformation. Once again, the company is pleased to report that Free Cash Outflow for the full year 2025 of $9.8 million was below our guidance of less than $12 million. As we turn to 2026, the company expects Free Cash Outflow to be less than $10 million due to the increased investment in our commercial capabilities. In conclusion, we are excited about the future and the company's competitive positioning in a market with attractive fundamentals.

Matt Lowell: If customer end markets are stronger in 2027 and our stepped-up commercial activity bears fruit as expected, then we should report a positive Adjusted EBITDA quarter by the end of 2027. The company saw a reduction in Free Cash Outflow during Q4 2025, both sequentially and versus prior year. This is the lowest quarterly Free Cash Outflow in nearly 5 years when we began our transformation. Once again, the company is pleased to report that Free Cash Outflow for the full year 2025 of $9.8 million was below our guidance of less than $12 million. As we turn to 2026, the company expects Free Cash Outflow to be less than $10 million due to the increased investment in our commercial capabilities. In conclusion, we are excited about the future and the company's competitive positioning in a market with attractive fundamentals.

Speaker #2: The company saw a reduction in free cash outflow during the fourth quarter of 2025, both sequentially and versus prior year. This is the lowest quarterly free cash outflow in nearly five years.

Speaker #2: When we began our transformation once again, the company is pleased to report that free cash outflow for the full year 2025 of $9.8 million was below our guidance of less than $12 million.

Speaker #2: As we turn to 2026, the company expects free cash outflow to be less than $10 million due to the increased investment in our commercial capabilities. In conclusion, we are excited about the future and the company's competitive positioning in a market with attractive fundamentals.

Speaker #2: We believe our decision to shift our posture towards investment should drive faster growth and in the medium to long term , and with it also significant margin expansion .

Jennifer Henry: We believe our decision to shift our posture towards investment should drive faster growth in the medium to long term and, with it, also significant margin expansion. With that, I will turn the call back to Stephen.

Matt Lowell: We believe our decision to shift our posture towards investment should drive faster growth in the medium to long term and, with it, also significant margin expansion. With that, I will turn the call back to Stephen.

Speaker #2: With that , I will turn the call back to Steven

Speaker #1: Thanks, Matt. Overall, we were very pleased with our fourth quarter and full year 2025 performance and the progress we made against our strategic priorities.

Stephen Gunstream: Thanks, Matt. Overall, we were very pleased with our Q4 and full year 2025 performance and the progress we made against our strategic priorities. 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 #1: 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.

Speaker #1: We will now take your questions.

Speaker #3: Thank you . As a reminder to ask a question , please press star one one on your telephone and wait for your name to be announced .

Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. One moment while we compile the Q&A roster. Our first question will come from the line of Brendan Smith with TD Cowen. Your line is open.

Operator: Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. One moment while we compile the Q&A roster. Our first question will come from the line of Brendan Smith with TD Cowen. Your line is open.

Speaker #3: To withdraw your question, press star one one again. One moment while we compile the Q&A roster. And our first question will come from the line of Brendan Smith with TD Cowen.

Speaker #3: Your line is open

Speaker #4: Great . Thanks for taking the questions , guys . And appreciate all the color . I wanted to ask a bit more about some of the emerging segments .

Brendan Smith: Great. Thanks for taking the questions, guys, and appreciate all the color. I wanted to ask a bit more about some of the emerging segments you mentioned that could be notable growth drivers in the coming quarters, like sequencing, spatial genomics, cancer screening. Can you expound just a bit on how some of that $2 million in additional investments into commercial capabilities could realistically index to some of those markets and maybe just your general outreach strategy to really tap into whatever you see as the best entry point for Teknova?

Speaker #4: You mentioned . That could be notable growth drivers in the coming quarters , like sequencing , spatial genomics , cancer screening . Can you expound just a bit on how some of that 2 million in additional investments into commercial capabilities could realistically index to some of those markets and maybe just your general outreach strategy to really tap into whatever you see as the best entry point for Technova

Stephen Gunstream: Sure. Thanks, Brendan. Yeah, this is part of the reason we're doing the commercial investment. In the last year or so, we've seen some increased sales from those particular customers. Without significant commercial investment, we've been able to expand wallet share because most of these are already somewhat a customer of ours. We see this as pretty exciting. From a commercial investment, part of the investment goes to bringing in a couple of people in the field that have great relationships with these customers, have worked with them in the past, and can give us a little bit more focus on that. Another part is really around building the branding and awareness towards those customers so that they think of us first. We're doing quite a bit more private labeling for these customers as well.

Speaker #1: Thanks , Brendan . Yeah , this is part of the reason we're doing the commercial investment in the last , year or so , we've seen some increased sales from those particular customers and and without significant commercial investment , we've been able to expand wallet share .

Speaker #1: Most of these have already been somewhat a customer of ours, so we see this as pretty exciting. From a commercial investment part, some of the investment goes to bringing in a couple of people in the field that have great relationships with these customers, have worked with them in the past, and can give us a little bit more focus on that.

Speaker #1: And another part is really around building the branding and awareness towards those customers so that they think of us first . And we're doing quite a bit more private labeling for these customers as well .

Speaker #1: And so , you know , the fact that we're already in a lot of their discovery and development is a natural segue for us to have these conversations about much larger volumes and orders and do some private labeling .

Stephen Gunstream: The fact that we're already in a lot of their discovery and development is a natural segue for us to have these conversations about much larger volumes and orders and do some private labeling. We're pretty excited about it.

Speaker #1: So we're pretty excited about it

Speaker #4: Got it . And maybe if I could just a quick kind of higher level follow up to your commentary on the four quarter lag from biopharma funding changes , I guess , would you expect any particular revenue segments within your business to maybe feel some of that faster than others ?

Brendan Smith: Got it. Maybe if I could just a quick kind of higher-level follow-up to your commentary on the four-quarter lag from biopharma funding changes, I guess, would you expect any particular revenue segments within your business to maybe feel some of that faster than others and potentially pull forward if things continue to look good? I'm just mostly wondering what you think the likeliest possibilities for potential upside to guidance this year could be. Thanks.

Speaker #4: And potentially pull forward if things continue to look good ? Just mostly wondering what you think the likeliest possibilities for potential upside to guidance this year could be Thanks .

Speaker #1: Yeah , absolutely . Brendan . And the one segment that's the most affected by the biotech funding is what we call our custom biopharma .

Stephen Gunstream: Yeah, absolutely, Brendan. I mean, the one segment that's the most affected by the biotech funding is what we call our custom biopharma. It's custom products, whether they're research or Clinical Solutions, products that are custom-made for the biopharma industry. This has historically represented about 25% of our revenue. When we saw biotech funding go up significantly in the 2020-2021 time period, we were able to track that particular segment to be about a 4-quarter lag on the way up, maybe a little bit faster, 3 to 4 quarters on the way down. That's the segment that would probably have the most impact. We might see it a little bit earlier, depending on which of the actual accounts that were in with lots of wallet share go up and get funding first. There is a chance there's something we're going to be looking at.

Speaker #1: It's custom products, whether they're research or clinical solutions, products that are custom made for the biopharma industry. This has historically represented about 25% of our revenue.

Speaker #1: When we saw biotech funding go up significantly in the 2020 2021 time period , we were able to track that particular segment to be about a four quarter lag on the way up , maybe a little bit faster , 3 to 4 quarters on the way down , and so that's the segment that would probably have the most impact .

Speaker #1: You know , we might see it a little bit earlier , depending on which which of the actual accounts that we're in . And with lots of wallet share go up and get funding first .

Speaker #1: So there's there is a there's a chance there's something to be looking at . And and of course , you know , there's been a lot of work over the last couple years of just preparing for a moment when people can raise money again .

Stephen Gunstream: Of course, there's been a lot of work over the last couple of years of just preparing for a moment when people can raise money again. I do think that they're going to be eager to spend it. At this point in time, as Matt said, it's not built into the plan for 2026. We're going to keep our eye on it.

Speaker #1: And I do think that they're going to be eager to spend it . But at this point in time , as Matt said , you know , it's not built into the plan for 2026 .

Speaker #1: We're going to keep our eye on it

Speaker #4: Got it. Sounds good. Thanks, guys.

Brendan Smith: Got it. Sounds good. Thanks, guys.

Speaker #3: One moment for our next question . And that will come from the line of Matt Leroux with William Blair . Your line is open

Operator: One moment for our next question. That will come from the line of Matt Larew with William Blair. Your line is open.

Speaker #5: Hi , this is Jacob on for Matt . Thanks for the questions . I kind of want to follow up on those last points you mentioned .

Jake Crimbial: Hi. This is Jake Crimbial on for Matt. Thanks for the questions. Kind of want to follow up on those last points you were just talking about, but focus on the Adjusted EBITDA target you laid out for 2027. You mentioned targeting positive Adjusted EBITDA by the end of 2027. I know previously you said you needed to be in that $50 to 55 million annualized revenue range. I think it's up to $52 to 57 million now. It's probably largely just due to the $2 million of incremental OpEx you plan to spend per year, which makes sense. Even still, that assumes, just based on the midpoint of guidance this year, high 20% revenue growth in 2027.

Jake Krahenbuhl: Hi. This is Jake Krahenbuhl on for Matt. Thanks for the questions. Kind of want to follow up on those last points you were just talking about, but focus on the Adjusted EBITDA target you laid out for 2027. You mentioned targeting positive Adjusted EBITDA by the end of 2027. I know previously you said you needed to be in that $50 to 55 million annualized revenue range. I think it's up to $52 to 57 million now. It's probably largely just due to the $2 million of incremental OpEx you plan to spend per year, which makes sense. Even still, that assumes, just based on the midpoint of guidance this year, high 20% revenue growth in 2027.

Speaker #5: We're just talking about , but focus on , you know , the adjusted EBITDA target you laid out for 2027 . So you mentioned targeting positive adjusted EBITDA by the end of 2027 .

Speaker #5: I know previously you said you needed to be in that 50 to 55 million annualized revenue range . You know , I think it's up to 52 to 57 now .

Speaker #5: It's probably largely just due to the 2 million of incremental opex you plan to spend per year , which makes sense . But even still , you know that that assumes just based on the midpoint of guidance this year , you know , hi , 20% revenue growth in 2027 .

Speaker #5: So I guess really just would like to get you to speak more to , you know , what exactly ? You're you're kind of seeing in the end markets .

Jake Crimbial: I guess really just would like to get you to speak more to what exactly you're kind of seeing in the end markets that's making you more cautious for this year versus 2027 and what you need to see develop kind of in the end markets, maybe aside from just an improvement or a pull forward in spending from your biopharma customers to maybe have some of that bullishness come forward into 2026 versus 2027.

Jake Krahenbuhl: I guess really just would like to get you to speak more to what exactly you're kind of seeing in the end markets that's making you more cautious for this year versus 2027 and what you need to see develop kind of in the end markets, maybe aside from just an improvement or a pull forward in spending from your biopharma customers to maybe have some of that bullishness come forward into 2026 versus 2027.

Speaker #5: That's making you more cautious for this year versus 2027 . And what you need to see develop kind of in the end markets , maybe aside from just , you know , an improvement in or pull forward in , you know , spending from your from your customers to maybe have some of that bullishness come forward into 2026 versus 2027 .

Speaker #2: Yeah. Maybe I can go ahead and take that one, Steven. And you can add in anything that I missed here. But I think it was good for us to introduce this concept of being EBITDA positive by the end of 2027 as something that we feel really good about.

Stephen Gunstream: Yep. Maybe I can go ahead and take that one, Stephen, and you can add in anything that I missed here. Yeah, I think it was good for us to introduce this concept of being EBITDA positive by the end of 2027 with something that we feel really good about. Otherwise, we wouldn't have said it, obviously. Just to clarify on that point and what it means, it would mean that by the end of next year, we have to be run rating at roughly $13 to 14 million a quarter in revenue. That's something that we feel good about. We do, as we've already outlined and Stephen in some detail, are excited about these investments. We have a strong conviction that they're going to work based upon what we've been doing in the past.

Speaker #2: Otherwise we wouldn't have said it , obviously , but just and just to clarify on that point and what it means , it would mean that by the end of next year , we have to be run rating at roughly 13 to $14 million a quarter in revenue .

Speaker #2: So that's something that we feel good about . And we we do as we've already outlined in Steven in some detail , are excited about these investments .

Speaker #2: We have a strong conviction that they're going to work based upon what we've been doing in the past . The timing is a little bit uncertain of when we're going to see the benefits of that .

Stephen Gunstream: The timing is a little bit uncertain of when we're going to see the benefits of that. It is in part dependent on the recovery of the industry and just also, obviously, how quickly we're able to penetrate some of these accounts that we haven't as penetrated in the past. We are, as I've said in my remarks, very encouraged by what we saw in Q4 from a biotech fundraising. From what we've seen in the early part of 2026 thus far, it seems to be headed in the right direction. We are looking for that to be sustained for a longer period of time to see that impact 2026. Otherwise, the way the momentum is building certainly looks good for 2027. I think that's why you're seeing us be even more optimistic about 2027.

Speaker #2: And it is in part dependent on the recovery of the industry . And this also obviously , the how quickly we're able to penetrate some of these accounts that we haven't as penetrated in the past .

Speaker #2: So we are , as I've said in my remarks , very encouraged by what we saw in Q4 from a biotech fundraising , from what we've seen in the early part of 2026 thus far , it seems to be headed in the right direction .

Speaker #2: We are looking for that to be sustained for a longer period of time, to see that impact in 2026. Otherwise, the way the momentum is building certainly looks good for 2027.

Speaker #2: And I think that's why you're seeing us be even more optimistic about 2027 . There is that upside , though . For 2026 that if if our efforts are bearing fruit sooner or the market is continuing to see strong capital raise activity , that could see us , those would be the upside levers basically to guidance for 2026 .

Stephen Gunstream: There is that upside, though, for 2026 that if our efforts are bearing fruit sooner or the market is continuing to see strong capital raise activity, that could see us those would be the upside levers, basically, to guidance for 2026. Right now, we think by 2027, the way things are headed as we see it now, that will also be another strong year or even stronger than this year for us to get to that type of goal by the end of 2027. Stephen, anything I missed there? Yeah. Just to put it simply, at the midpoint of our guidance, we're talking roughly $10 million, $11 million of revenue a quarter. As you heard Matt say, $13 million a quarter. There's lots of ways we get there, right? There's these therapies that are getting close to commercialization. There's some diagnostic things that are getting very close to commercialization.

Speaker #2: And and right now we think by 2027 . The way things are headed as we see it now , that will also be a strong year or even stronger than this year for us to get to that type of goal by the end of 2027 .

Speaker #2: Stephen, anything I missed there?

Speaker #1: Yeah , I was just to put it simply , you know , at the midpoint of our guidance , we're talking roughly ten , 11 million in revenue , a quarter .

Speaker #1: As you heard Matt say , 13 million a quarter . There's lots of ways we get there , right ? There's you know , these therapies that are getting close to commercialization .

Speaker #1: There's some diagnostic things that are getting very close to commercialization . There's obviously the biotech funding and market environment . And then there's the commercial investment we've made .

Stephen Gunstream: There's, obviously, the biotech funding, the market environment, and then there's the commercial investment we've made. We absolutely believe we're in striking distance. I think the timing is the real challenge for us. We want to make sure we're actually seeing the revenue flow through before we commit from a guidance perspective.

Speaker #1: So we absolutely believe we're in striking distance. I think the timing is the real challenge for us. And we want to make sure we're actually seeing the revenue flow through before we commit.

Speaker #1: From a guidance perspective

Speaker #5: Great . Thanks . And then I wanted to ask about the , you know , your Ruo to GMP customer transition . I think you mentioned you have your supporting 60 clinical customers at the end of 2025 .

Jake Crimbial: Great. Thanks. I wanted to ask about your RUO to GMP customer transition. I think you mentioned you're supporting 60 clinical customers at the end of 2025. Maybe just for our benefit, can you help us or remind us what the average expected revenue step-up is per customer when they make that leap and as they go through each phase of the trial? I know you mentioned in the prepared remarks, but just confirm again the amount of therapies you said you're supporting in phase 2 and later. I might have missed that, but if you could go over that, it'd be helpful.

Jake Krahenbuhl: Great. Thanks. I wanted to ask about your RUO to GMP customer transition. I think you mentioned you're supporting 60 clinical customers at the end of 2025. Maybe just for our benefit, can you help us or remind us what the average expected revenue step-up is per customer when they make that leap and as they go through each phase of the trial? I know you mentioned in the prepared remarks, but just confirm again the amount of therapies you said you're supporting in phase II and later. I might have missed that, but if you could go over that, it'd be helpful.

Speaker #5: So maybe just , you know , for our benefit , can you help us or remind us what , you know , the average expected revenue step up is per customer when they make that leap and as they go through each phase of the trial ?

Speaker #5: And I know you mentioned in the prepared remarks , but just confirm again the amount of therapies you said you're supporting in phase two .

Speaker #5: And later I might have missed that . But if you could go over that , be helpful .

Speaker #1: Sure . So we yeah , we are supporting 60 clinical customers . That's customers that have purchased from us over $5,000 in the last trailing 12 months .

Stephen Gunstream: Sure. Yeah, we are supporting 60 clinical customers. That's customers that have purchased from us over $5,000 in the last trailing 12 months, in this case, to all of 2025. Obviously, there's been some companies that have not made it. This is all actual purchase from us in 2025. From a therapy perspective, yes, 70 overall therapies or more that we're supporting, five of which are phase two or later, and 12 of which are in phase one. The step-up is essentially from a phase one customer or therapy, I'm sorry, a phase one therapy through a commercialized therapy is about a 30-fold increase in spend. The difference between, say, a late stage, phase two, or phase three to a commercial is about a 10-fold. It's about 1x to 3x to 30x.

Speaker #1: In this case , for all of 2025 . This is , you know , obviously there's been some companies that have not made it .

Speaker #1: So this is all , you know , actual purchase from us in 2025 . And from a therapy perspective . Yes , 70 overall therapies or more that were supporting , five of which are phase two or later .

Speaker #1: And 12 of which are in phase one . So the step up is essentially from a phase one customer therapy . I'm sorry , phase one therapy through a commercialized therapy is about a 30 fold increase in spend .

Speaker #1: And the difference between , say , a phase late stage , phase two or phase three to a commercial is about a ten fold .

Speaker #1: So it's about one x to three x to 30 x . So you can see how how much volume of purchases will go up .

Stephen Gunstream: You can see how much volume of purchases will go up assuming we're supporting a commercialized therapy.

Speaker #1: Assuming , you know , we're supporting a commercialized therapy

Speaker #5: Great . Thanks . I'll leave it there .

Jake Crimbial: Great. Thanks. I'll leave it there.

Jake Krahenbuhl: Great. Thanks. I'll leave it there.

Speaker #3: Thank you. One moment for our next question. And that will come from the line of Matt Hewitt with Craig-Hallum. Your line is open.

Operator: Thank you. One moment for our next question. That will come from the line of Matt Hewitt with Craig-Hallum. Your line is open.

Speaker #6: Good afternoon . Thanks for taking the questions . And this might kind of tie into that last response , but with the average revenue per customer down , this year .

Matt Hewitt: Good afternoon. Thanks for taking the questions. This might kind of tie into that last response, but with the average revenue per customer down this year, but that's a function of adding new customers, when you look back historically, is there an average time frame before you start to see those ramp up, or is it completely customer-dependent in the therapies that they're working on and maybe other things that you really can't tie out and say, "Boy, it should take about 12 months before we see them go from a low volume to a higher volume"?

Speaker #6: But that's a function of adding new customers . When you look back historically , is there an average time frame before you start to see those ramp up , or is it completely customer dependent ?

Speaker #6: And the therapies that they're working on, and maybe other things that you really can't tie out and say, boy, it should take about 12 months before we see him go from a low volume to a higher volume.

Speaker #1: Yeah , it's a little bit therapy dependent . So a couple of things are driving that average down . Right . And again , we're taking the therapies that are purchased .

Stephen Gunstream: Yeah, Matt, it's a little bit therapy-dependent. A couple of things are driving that average down, right? Again, we're taking these therapies that are purchased, and then the average is per customer, right? Some of these customers can have many therapies. There's a piece there that may be kind of disconnected in some ways. The reality is, obviously, the more early stage one, they're buying tens of thousands, we'll say, of dollars in that preclinical stage. The more we add there, the lower the average will go, which is we continue to add to there. As they move down through the therapy clinical pipeline, of course, the spend goes up. You're talking in the phase 2, hundreds of thousands of dollars per therapy type of thing. The timing is very therapy-dependent, right? This is not a slow strategy.

Speaker #1: And then the average is per customer, right? So, some of these customers can have many therapies. There's a little bit, there's a piece there that, you know, may be kind of disconnected in some ways.

Speaker #1: But the reality is obviously the more early stage one , they're buying , you know , tens of thousands , we'll say of dollars in that preclinical stage .

Speaker #1: You know , they're the more we add there , the lower the average will will go , which is we continue that there .

Speaker #1: But then as they move down through the therapy , clinical pipeline , of course , the spend goes up and and you know , we're you're talking in the phase two .

Speaker #1: Hundreds of thousands of therapy type of thing . So the timing is very therapy dependent . Right . So this is not this is not a slow strategy .

Speaker #1: This the clinical trials can take , you know , seven , ten years from start to finish . But we're excited to be getting some towards that .

Stephen Gunstream: The clinical trials can take 7, 10 years from start to finish. We're excited to be getting some towards that finish line for us, which is great. Each therapy has different endpoints. We kind of map those. That's why you can hear us in the prepare remarks talk about we do think we'll be supporting one by the end of 2027. That may be more as well, right? It depends on their approvals and the timings of those therapies. I think we're getting closer to that end. At the same time, on the front end, we're loading up the entire pipeline. I think as these things go through commercial, you'll probably start to see that average come up.

Stephen Gunstream: The clinical trials can take seven, 10 years from start to finish. We're excited to be getting some towards that finish line for us, which is great. Each therapy has different endpoints. We kind of map those. That's why you can hear us in the prepare remarks talk about we do think we'll be supporting one by the end of 2027. That may be more as well, right? It depends on their approvals and the timings of those therapies. I think we're getting closer to that end. At the same time, on the front end, we're loading up the entire pipeline. I think as these things go through commercial, you'll probably start to see that average come up.

Speaker #1: That finish line for us , which is great . And each therapy has different endpoints . So we kind of map those . And this is why you can hear us in the prepared remarks .

Speaker #1: Talk about you know , we do think we'll be supporting one by the end of 2027 . That may be more as well .

Speaker #1: Right. So, you know, it depends on their approvals and the timing of those therapies. So I think we're getting closer to that end.

Speaker #1: And at the same time , on the front end , we're loading up the entire pipeline . So I think as these things go through commercial , you'll probably start to see that average come up .

Speaker #6: That makes sense . And then you kind of it's a nice lead in there . So over the past call it year , you've had the FDA and other agencies have come out either with draft guidance or more formal guidance .

Matt Hewitt: That makes sense. Then it's a nice lead-in there. Over the past, call it year, you've had the FDA and other agencies have come out either with draft guidance or more formal guidance. It really seems like the government is pushing to shorten that drug development time frame from the 10-plus years historically to something much slower, whether it's on the front end with using AI and modeling or on the back end, they recently came out. It sounds like they're going to discontinue the need for phase 3 confirmatory studies if you've got the right data. How does that shortening of the time frame kind of change your model, if at all, or is there anything that you can do to make sure that you're getting in on the very early end in what could be ultimately a shorter development process? Thank you.

Speaker #6: And they're really it really seems like the government is pushing to shorten that drug development time frame from the ten plus years historically , to something much slower , whether it's on the front end with using AI and modeling or on the back end .

Speaker #6: They recently came out . It sounds like they're going to discontinue the need for phase three confirmatory studies . If you've got the right data , how does that shortening of the time frame , how does that kind of change your your model , if at all ?

Speaker #6: Or is there anything that you can do to make sure that you're getting in on the very early end in what could be, ultimately, a shorter development process?

Speaker #6: Thank you

Speaker #1: Yeah , certainly . Matt , the shorter the time period is , the the bigger impact will have on the business . Right ?

Stephen Gunstream: Yeah. Certainly, Matt, the shorter the time period is, the bigger impact will happen on the business, right? We know that as they get through commercialization, there's a lot more spend there. That could be a really nice tailwind for the business generally. There are a number that were sporting there actually already phase II, phase III combined because they're either designated breakthrough or rare disease or both. Those are always really nice to see. We are fortunate in that many of these customers are already using us in the very early stages, right, because of our capability to do these smaller batches quickly of custom formulations. There's just not a lot of suppliers that can do that and then actually be compliant and scale all the way through commercialization.

Speaker #1: So we know that as they get through commercialization , there's a lot more spend there . So that that could be a really nice tailwind for the business generally there are a number that are supporting there actually already phase two , phase three combined because they're either , you know , designated breakthrough or rare disease or both .

Speaker #1: And and so those are always really nice to see . And we are fortunate in that , you know , many of these customers are already using us in the very early stages .

Speaker #1: Right. It's because of our capability to do these smaller batches quickly, of custom formulations. And there's just not a lot of suppliers that can do that.

Speaker #1: And then actually be compliant and scale all the way through commercialization . So we do feel like we do feel good that we have a really strong position in that particular space .

Stephen Gunstream: We do feel good that we have a really strong position in that particular space. Certainly, if the FDA does allow for these to be shorter time periods, we would see a benefit there over time.

Speaker #1: And and certainly if the FDA does allow for these to be a shorter time period , we would we would see a benefit there over time .

Speaker #6: That's great . Thank you

Matt Hewitt: That's great. Thank you.

Speaker #3: One moment for our next question. And that will come from the line of Matthew Parisi with KeyBanc Capital Markets. Your line is open.

Operator: One moment for our next question. That will come from the line of Matthew Parisi with KeyBanc Capital Markets. Your line is open.

Speaker #7: Hi . Yes , this is Matthew Parisi on for Paul Knight at KeyBanc . Congrats on the quarter . Just a quick question around Celgene customers .

Matthew Parisi: Hi, yes. This is Matthew Parisi on for Paul Knight at KeyBanc. Congrats on the quarter. Just a quick question around Cell & Gene customers. What was the total number of Cell & Gene customers for 2025?

Speaker #7: What was the total number of Cell and Gene customers for 2025?

Speaker #1: Good question Matthew . I want to make sure I don't misquote this , but this is this is one we can get to you afterwards and we'll put it out with a separate deck .

Stephen Gunstream: Good question, Matthew. I want to make sure I don't misquote this, but this is one we can get to you afterwards, and we'll put it out with a separate deck, I believe, unless Matt, you know what off the top of your head?

Speaker #1: I believe, off the top of your head.

Speaker #2: Yeah . I don't know , but I will just say that maybe one other piece of information that would be helpful , which is that our of our total revenue , 24% came from cell and gene therapy related customers in 2025 , which is not that different than in 2024 .

Matthew Parisi: Yeah. I will just say that maybe one other piece of information that would be helpful, which is that of our total revenue, 24% came from Cell & Gene therapy-related customers in 2025, which is not that different than in 2024, but that was the number for 2025. Maybe that's helpful. Yeah, that's very helpful. Thank you. Okay.

Speaker #2: But that was the number for 2025 . Maybe that's helpful

Speaker #7: Yeah, that's very helpful. Thank you.

Speaker #2: Okay

Speaker #3: Thank you. That is all the time that we have for questions and answers, as well as today's conference call. This concludes today's program.

Operator: Thank you. That is all the time that we have for question and answers as well as today's conference call. This concludes today's program. Thank you all for participating. You may now disconnect.

Speaker #3: Thank you all for participating. You may now disconnect.

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