Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bionano Genomics Inc (NASDAQ:BNGO) has significantly reduced operating expenses and cash burn, achieving a 69% decrease in GAAP operating expenses and a 49% decrease in non-GAAP operating expenses compared to the previous year.
• The company reported a 27% increase in flow cell sales year-over-year, indicating growing utilization among existing customers.
• Bionano Genomics Inc (NASDAQ:BNGO) has successfully implemented a new go-to-market strategy focusing on high-volume routine users, which is expected to drive future growth in consumables.
• The company has made progress in reimbursement initiatives, with a new CPT code established for optical genome mapping, potentially increasing adoption and utilization.
• There is strong demand for the new Stratus system, particularly in key geographies like Europe, the US, Canada, and Israel, which addresses higher throughput needs for customers.

Negative Points

• Bionano Genomics Inc (NASDAQ:BNGO) experienced a 35% year-over-year decrease in revenue for Q3 2024, partly due to the discontinuation of clinical services products.
• The company's GAAP gross margin was negative 139% due to one-time charges related to inventory write-downs and discontinued services.
• The transition to a new operating strategy has resulted in slower growth in the optical genome mapping installed base, with only five net placements in Q3 2024.
• There are potential additional write-downs of receivables related to discontinued clinical services, which could impact future financial results.
• Delays in system purchases have affected revenue, and while these processes are ongoing, there is uncertainty about the timing of their completion.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with BNGO.

Q: Can you provide an update on the status of the Ionic sample prep system? Is it still slated for launch later this year? A: We have seen amazing data from the Ionic sample prep system, but we do not expect a full commercial rollout this year. The program is progressing well, and demand is high for the system. - Dr. Eric Holman, CEO

Q: What is the growth potential for the 150 target accounts you mentioned? Are they higher volume users, and how do you expect growth to come from them? A: The 150 target accounts include both mature users and those ramping up for routine use. They account for about 80% of consumables revenue. Growth is expected as these labs add more indications, increasing their consumables needs. - Dr. Eric Holman, CEO

Q: Are there still significant cost reduction opportunities from manufacturing efficiencies, or is it more about overhead absorption from volume growth? A: There are both cost reductions from transitioning to lower-cost providers for critical components and overhead reductions from consolidating facilities. We expect these initiatives to improve margins significantly. - Dr. Eric Holman, CEO

Q: What do you see as the growth rate for consumables moving into 2025, especially with the CPT code coming into effect? A: The CPT code and reimbursement initiatives will help labs transition to optical genome mapping without negative economic impacts. We expect consumables growth to accelerate as more labs become routine users and adopt additional indications. - Dr. Eric Holman, CEO

Q: Regarding the delays that impacted your top line this quarter, are they timing issues that will be reflected in Q4, and are they included in your guidance? A: The delays are related to the sales cycle for capital equipment purchases. These processes are ongoing, and we are hopeful some will complete in Q4, but we are being conservative in our guidance. - Dr. Eric Holman, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.