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Michael Egholm

Thank you, John. Good afternoon, everyone, and welcome to Standard BioTools first quarter 2025 earnings call. Joining me today is Alex Kim, our Chief Financial Officer. Before we begin, I want to thank our customers, employees, and investors. Your support is what fuels our work and drives our mission to set a new standard in life sciences, empower researchers, accelerate in discovery all while delivering long-term value to our shareholders.
Standard BioTools delivered a solid first quarter, which results on plan and in line despite a choppy operating backdrop. Executing -- execution continues to improve as we build rigor across the organization guided by lean principles through our Standard BioTools business system or just SBS. As operators, we're staying grounded and fundamentals, focusing on what we can control, managing with precision, and driving toward profitability.
Before diving into the details, it's worth stepping back for a moment. While the broader environment remains dynamic, we're navigating it from a position of strength with a diversified portfolio, a disciplined operating model, a healthy balance sheet, and a team and a team that's getting sharper quarter-after-quarter as forecast accuracy improves and consistency in how we want the business grows.
We are particularly pleased with our strategic foothold in proteomics and a series of recent high impact product launches. Last week at the American Association of Cancer Research Annual Meeting or AACR, we announced a new SomaScan offering that will pair well with the highly anticipated distributed NGS-based Ilumina partnered solution.
Together, these advancements expand our reach and push the boundaries of what’s possible in translational and clinical research. From the outside, the macro backdrop may still cloud the picture, but inside we’re strong. Our diversified business in Life Sciences allows us to operate multiple levers to navigate the waters, including a patient and disciplined M&A strategy, which is benefiting from a growing number of compelling assets and opportunities. With that, let’s turn to the numbers.
In Q1, while not growth, we executed to plan and delivered $40.8 million in revenue. This was down 10% year-over-year as the market got worse against last year’s Q1 and we had elevated backlog to start 2024. Despite this and not enough to wave the all clear flag, we have seen encouraging traction in capital expenditures, which strengthened our instrument business, which also helped by a favorable year-over-year comp.
Consumables and service revenue, which represents larger portions of the mix, particularly in The Americas was softer than usual and still exhibits variability quarter-to-quarter. That said, when you zoom out at multi quarter trend, you see a pattern of improving precision, sharpened commercial execution and more consistency, which gives us confidence in the direction we are heading. While headwinds remain and in some cases with NIA budgets and tariffs concerns intensified, our diversification continues to serve us well.
International markets and biopharma engagement remain more resilient and we’re seeing continued traction across those segments. The impact is reflected in our previously announced guidance, which assume a mid-teens percentage decline in Americas academic revenue of roughly high single digit million dollars at the midpoint.
On the impact of new tariff measures, while they have added a layer of complexity and disruption to global trade are from our perspective manageable. While not material to near term financials, including the top line, we are actively accessing the operational impact and working across teams to mitigate risk and maintain flexibility.
In some cases, we are passing cost through to customers, in others we are absorbing it, but selectively. If fully absorbed, we estimate the impact on gross margin and adjusted EBITDA would be in the low single digit millions within the bounds of our current outlook and consistent with what we communicated during our last quarterly update. Specifically, products manufactured in Canada and shipped to the USA falls under the US MCA and are currently excluded from tariffs. Products made in Singapore and shipped to the US, primarily our Biomark Instruments and IFC consumables are now subject to a 10% tariff.
SomaScan kits made in the US and shipped to authorized sites in China, an area of growth though a smaller portion of the revenue today are subject to significant tariffs. For the full year, there’s no change to our prior guidance. We continue to expect full year 2025 revenue in the range of $165 million to $175 million. We’re taking a measured approach, modeling persistent headwinds, though anticipating back half seasonality. With $261 million in cash and equivalents on the balance sheet no material debt, we remain well capitalized and disciplined in our resource allocation.
Our healthy cash position is a key asset and differentiator in this environment, and we intend to protect it accordingly. Our eyes remain fixed on reaching adjusted EBITDA positive in 2026, all while closely monitoring the backdrop in which we operate today. Being well capitalized is only part of the story, and we’re taking decisive steps to streamline operations, reduce cost and reinforce our operating leverage.
Non-GAAP OpEx improved 22% year-over-year, operating loss improved 45% and adjusted EBITDA improved 29%. Those results are the output of hard choices made early and implemented swiftly.
In January, as previously announced, we executed an additional $10 million in cost reduction on top of the $80 million operationalized in 2024, primarily focused on long horizon R&D projects, moves that enable us today to stay nimble without compromising near term priorities. We’re leaner, more agile, and structurally advantaged as we move through 2025.
What’s making this level of discipline possible and sustainable is SBS. It’s how we run the business. It brings a mindset of continuous improvement to everything we do and accountability to every part of the organization.
Nowhere is that more evident than in our integration of SomaLogic A year ago, it was an obscure diamond, complex, under leveraged and overlooked, but we saw what others could not. In just over 12 months, we applied SBS, took out over $80 million in cost and got the fundamentals right. We leveraged several high impact head to head studies to reposition the technology and drive interest, ramped activity with leading biobanks, improved manufacturing, launched new products and importantly, reengaged our key partner Illumina. This is a platform now positioned to win in large scale population studies and drive translational clinical research.
That turnaround didn’t happen by chance. It happened because we applied the SBS flywheel and moved with precision. The momentum is building around this uniquely powerful platform, high flex, high precision and now backed by a more focused organization and data. Design speaks for itself. SomaScan is unlocking entirely new possibilities in disease research and drug development like never before, with unmet scale and precision that legacy antibody based technologies simply cannot match.
We’re seeing growing traction across pharma, biobanks, and large scale population studies. And importantly, the data keep reinforcing the value and differentiation of the platform. Our deep partnership with Illumina is a critical part of this strategy, extending SomaScan's reach to thousands of sequences lab worldwide and will bring high throughput proteomics to more researchers than ever before.
This momentum was on full display at AACR, where roughly 90 posters and presentations featured our solutions, underscoring the breadth and utility of entire polyomics portfolio and its growing role in translational and clinical research. A couple of examples stood out.
In a prostate cancer analysis conducted by the multicenter EPIC study, SomaScan 7K identified over 50 protein markers, including PSA and many previously unknown markers, while in a comparable analysis the nearest competitor found just one known biomarker, demonstrating SomaScan’s best in class coverage and ability to uncover both known and novel biomarkers that have the potential to assess prostate cancer risk up to decades in advance of cancer diagnosis.
More is really more in proteomics. In another study by Dejushanko and AstraZeneca that stemmed from multiple Phase II and Phase III clinical trials, SomaScan showed the potential to predict and monitor serious lung complications from cancer treatment. In this case, most commonly antibody drug conjugates or ADC's detecting early warning signs up to 60 days before symptoms appear and helping assess patient risk before treatment begins.
At AACR, we also introduced three new offerings, spanning consumables, instruments and services, single Soma [marion] agents, the sites of XT PRO, a higher throughput flow system with Part 11 compliant software for clinical trial researchers and the SomaScan 3.7K select assay.
Collectively, they complement our category leading 11K Assay and the Select 3.7K Assay offers more usable content at higher precision than the nearest affinity proteomics competitors highest throughput offering and improved economics. Purpose built for translational clinical research and aligned with our mission to help pharma make better drugs faster.
Turning to our products, our revenue mix for the quarter remained balanced across the portfolio, with consumables at 35%, instruments 19% and lab and field services at 30% and 13%, respectively. We saw globally from our instrument business, while consumables and lab were soft in part two to project timing and funding uncertainty in the Americas. Consumables positioned at the top of our product pyramid were down mid-teens year-over-year and down low single digits sequentially with the largest impact in flow.
To help close that gap, we recently launched the CyTOF XT PRO, a faster automated system purpose built to drive pull through. Early signals from the field have been encouraging. SomaScan authorized sites, which have become a steady contributor to the consumables line, were down modestly year-over-year due to order timing in the US, though experiencing increased activity internationally, particularly in APAC. Looking ahead, we expect additional lift as our distributed solution with Illumina comes online.
Consumables remain a strategic priority, high margin, recurring and essential to our model long term. Instruments were a bright spot with double digit year-over-year growth led by continued demand for our Hyperion XTi spatial imaging systems. These are high throughput, high performance systems and importantly, each placement builds installed base leverage for future consumable pull through.
Spatial proteomics, where the Hyperion XTi plays was named 2024 Nature Method of the Year, a strong endorsement from the scientific community and we’re beginning to see that recognition translate into market adoption. Services were down mid-teens year-over-year, driven primarily by a decline in lab services.
Beyond the elevated backlog referenced earlier, SomaScan remains concentrated in a handful of large accounts, while less so today, timing and variability is still expected and impacts quarterly performance. US Academia also weighed on volume this quarter, though partially offset by increased pharma project activity and modest growth ex US.
Big picture, we are focused on making high precision proteomics more accessible. As we expand distributed offerings through authorized sites and the Illumina partnership, we expect broader adoption and more consistent utilization of our service offering. This is a long term growth market with solid fundamentals and we believe we are well positioned to scale with it.
At Standard BioTools, we are building a durable diversified life science tools platform grounded in operations and strategic consolidation. Our mission is to overcome the scale and profitability bottlenecks that have long held this sector back to be the partner of choice for customers and innovators alike and we’re doing it with intention.
A portfolio increasingly weighted toward high margin consumables, disciplined capital deployment and a flywheel that compounds value over time. With valuations under pressure and innovation accelerating, we are seeing real opportunities to continue to expand strategically. We are pursuing a highly disciplined approach focused on diverse technologies with line of sight to commercialization and value creation, a strong margin profile and clear integration synergies.
Every deal runs through the SBS playbook, where we strip out inefficiencies, optimize operations and scale with speed. The bar remains high, but the pipeline is full and the opportunity set is compelling. We’re playing the long game and we’re doing it with a team of proven operators, a clear strategy, and the resources to execute. With that, I’ll turn the call over to Alex. Alex?

Alex Kim

Thank you, Michael, and thank you all for joining our call today. I will walk us through our financial results in more detail and provide some additional context for the quarter. Please refer to today’s press release and the appendix to our earnings deck for more information, including a reconciliation of GAAP to non-GAAP measures that I will be discussing here.
Also note, we are no longer breaking out our financial results into proteomics and genomics. This reflects our evolving nature of our business where what we have previously labeled genomics, principally our microfluidics based integrated fluidic circuits or IFC chips is increasingly being applied across proteomics, sample preparation and liquid handling applications.
We now view our overall business as offering a portfolio of multi omic tools designed to provide customers with the best solution based on the problem they are trying to solve. We do not operate our day to day business as two segments.
And with our integration activities and operational synergies being realized, we are seeing more and more leverage of our resources across our product lines, including manufacturing, research and development and sales and marketing. As a result, we believe it’s more meaningful to look at our financials as one operating segment. We will however continue to break out sales into consumables, instruments, lab services and field services.
So let’s start with revenue on slide 12. Our first quarter revenue came in at $40.8 million that’s down 10% year-over-year and in line with our expectations. As Michael noted, we had a strong first quarter last year as we entered 2024 with an elevated backlog, the majority of which related to our SomaScan lab services business. Breaking revenue down further, consumables revenue was $14.5 million in the first quarter, down 16% compared to 2024. This was attributed to lower volumes impacted by lower Americas Academia revenue as well as fewer large scale clinical research projects in the quarter.
Our SomaScan authorized sites continue to purchase our assay kits. And as we’ve discussed before, we believe distributed solutions, including our partnership with Illumina, will be a key step forward to establishing market leadership in proteomics.
Expanding our ability to supply more sites globally is highly complementary to our existing lab services business and strengthens our overall market position. Instruments revenue came in at $7.8 million in the first quarter, up 24% year-over-year compared to the first quarter of 2024. This was largely driven by continued sales traction in our spatial proteomics business, particularly the Hyperion XTi, building on the momentum seen exiting 2024.
As our installed base continues to grow, we expect this to drive consumables growth. Services revenue, which includes both lab services and field services, was $17.6 million in the first quarter, down 16% year-over-year compared to the first quarter of 2024. Lab services was down 19%, largely due to the previously mentioned gap in backlog.
We did see some impact due to project timing and Americas Academia funding delays. Field services was down 11% as anticipated on fewer active service contracts as aged legacy instruments go off contract and lower on demand service and parts revenue on improved quality and uptime of our instruments. This is further evidence of the positive impact that we are having on our customers’ experience.
Moving on to gross margins on slide 13. Our non-GAAP gross margins, which exclude depreciation, amortization and stock based compensation was 53.2% in the first quarter of 2025 versus 56.2% in the first quarter of 2024. Our first quarter margins were particularly impacted by lower volume, lower price realization on services and product mix. These masked strong improvements that we saw in operating efficiencies.
Our SBS driven activities to reduce waste and improve quality are evident across the organization, and we anticipate this to benefit gross margin expansion over the near and long term as volume returns. Moving on to operating expenses on slide 14.
Our non-GAAP operating expenses, which exclude merger related costs, stock based compensation and restructuring charges, were $38.6 million in the first quarter of 2025, a decrease of $10.7 million or down 22% compared to the same period in 2024. Sequentially, from the fourth quarter of 2024, we delivered a 10% reduction. In the first quarter, we operationalized an additional $10 million in annual run rate cost reductions, as we mentioned on our last call, as we delayed investments in a long term R&D project.
We are now totaling $90 million in annualized cost reductions since the merger with SomaLogic , which is important to reiterate as we navigate through the current macroeconomic uncertainty. On slide 15, our net loss in the quarter was $26 million compared to a net loss of $32.2 million in the first quarter of 2024, representing an improvement of $6.2 million or 19%.
While adjusted EBITDA for the first quarter of 2025 was a loss of $16.9 million versus an adjusted EBITDA loss of $23.7 million in the first quarter of 2024, an improvement of $6.8 million or 29%. That brings me to cash on slide 16. We ended the first quarter with approximately $261 million in cash, cash equivalents, restricted cash, and short term investments with no material debt.
Our total cash burn was $34 million in the first quarter of 2025 versus $101 million in the first quarter of 2024. Our adjusted cash burn to support ongoing operations was $31 million in the first quarter of 2025, representing a 33% reduction versus $47 million in the first quarter of 2024.
We are continuing to see material reductions in our cash burn coming through as a result of our restructuring efforts, the ongoing realization of merger cost synergies as well as operational improvements. We believe we are well positioned with our strategic plan and our balance sheet to support the growth of our business towards our profitability targets.
As Michael said, we are not changing our full year revenue guidance of $165 million to $175 million. We continue to expect the year to be back half weighted based on our internal funnel metrics and not on any assumed recovery in the macro dynamics.
We continue to expect a mid-teens percentage decline in our Americas Academia revenue, a high single digit millions revenue impact versus 2024. And with respect to our tariffs, our gross annualized impact is estimated to be in the low single digit millions of dollars to bound our exposure. We plan to pass these tariffs to our customers where possible, be mindful of market conditions and driving volume growth.
Clearly, the geopolitical backdrop is currently highly volatile and stiff macro headwinds persist. However, as we stand here today, looking at the year ahead, we are well positioned, controlling what we can with multiple cost levers to pull on and deploy if needed and a robust balance sheet.
We remain committed to delivering long term profitable revenue growth and increasing shareholder value. Back to you, Michael.

Michael Egholm

Thanks, Alex. We thank you all for your continued support as we navigate these dynamic end markets. We look forward to seeing many of you. Many of you at upcoming conferences and stay tuned for details on our upcoming proteomics roundtable series where we'll dive deeper into the science, strategy, and exciting opportunities ahead.
And now I hand the call back to the operator for Q&A.

Question and Answer Session

Operator

(Operator Instructions) Dan Brennan, TD Cowan.

Hey, good afternoon, guys. This is [Kyle] on for Dan. Thanks for taking the questions. I wanted to start on the reiterated guide. You said nothing's really changed in your view in terms of the weighting of revenue this year, more back half weighted. Understanding you guys don't guide quarterly, but I think the street's looking for revenue down a bit, tier queue on one of the easiest comps of the year, next quarter. That being said, I guess, how should we think about the percentage split between, first half, second half?

Michael Egholm

I'll let Alex answer that one and good to hear.

Alex Kim

Yes, thanks, Kyle. We're not being overly specific on that, but as we look at our internal funnel, we do see some larger projects that'll hit in the back half of the year. So it's less the seasonality that you might have seen in the past, but more driven by our funnel metrics.

Got it. And maybe on the instrument demand this year, first quarter instrument number looks pretty good, relative to our model at least. Anything you can share, I guess, on the funnel? Did you see any pull forward in the first quarter maybe, I guess how are you seeing your overall sales funnel going forward?

Michael Egholm

We're really -- we're encouraged by the growth in our funnel primarily in the Hyperion XTi but also some traction on our other instruments. And it's really all the good work we did last year in a difficult CapEx environment, so we saw some opening up at the markets at the end of the year and so we carried that momentum into Q1. We haven't -- on the instrument side, it's always a little bit hard to say whether it's a pull forward or not, but I can't think of any that was put forward due to tariffs or other things. It may impact consumables a little bit, but again, not materially.
And again, just in this job environment we continue just to focus on control last year when CapEx was tough. We kept focusing on just building the funnel and we're now seeing some good traction, but not declaring victory yet, no.

Don, maybe if I can sneak in one more here on the M&A side. Earlier this year you targeted the 4.6 deals between this year and 2026. Clearly, have been many changes in the market since you initially laid out that goal. And on the call, sounds like you guys have a pretty good funnel. Has anything changed in regard to your pipeline and the potential timing of any deals?

Michael Egholm

Strategic M&A is part of our founding thesis. It remains a core part of the strategy in here. Alex and I are now four year into this adventure here remain ever more convinced that there is a need for consolidator in this space. And I think we have positioned ourselves and we have proven ourselves here. The market needs integration.
We see and we have built the funnel here over the last few years. And what we’re seeing now of course with the macro and the funding environment and VC investment, it definitely offer an increased number of opportunities that are actionable now at improved valuation in our point of view. Having said that, I want to remind everybody that we are highly disciplined. We recognize that our healthy cash position is a key asset, differentiate on this environment. And so we intend to go after that set number of acquisitions here over the next 18 months, but the bar is high.

Got it thanks guys.

Operator

Matt Stanton, Jeffrey's.

Matthew Stanton

Hey, thanks. Maybe one just on US academic and government, you kind of baked the 15% or mid-teens decline in on the 4Q call. I think when we caught up then you had said, you hadn't seen any kind of a noticeable change in demand patterns at that time. Now that we've got a bit more time passed and obviously the needful there has remained dynamic, but just any more color kind of on how US academic progress through 1Q and any color on how it's trended here into 2Q and then, within that mid-teens decline for the year you're baked in primary any more color just to a finer point in terms of what that bakes in, consumables and service versus the instrument piece there ?
Thank you.

Michael Egholm

Hi, Matt. Good to hear you. We were like surgical and how we called it out at our last earnings call and that’s the sort of high level guidance that we made. Just want to remind everybody that we were coming into the year expecting healthy growth in the Americas. So the 15% is still what our mid-teens is still what we’re seeing.
We’ve seen because we’ve been advised by some institutions that had committed to buying instruments this year that they don’t know if they’ll be able to do it. We have seen some delay in consumables orders whether those are permanent, we don’t know. And we’ve seen at the recent AACR conference, a number of customers from academia could not travel because they were basically curbing on non-essential expenditures. So the sort of broad impact of less fund in US Academia definitely holds. I think we sort of picked it about right from where we’re sitting now and therefore, we’re maintaining the guidance.

Matthew Stanton

Okay, that's helpful. And then maybe yeah sorry I forgot like the little piece of instruments.

Michael Egholm

So we’ve seen some of the instruments we ship here were in US Academia, typically with private funding. We obviously hope NIH budget will be released and funding will come through for the various grants for all the good stuff we have in the pipeline or funnel, I should say.

Matthew Stanton

Okay, great. And then just on the new product side, a handful of new launches last week. Just to focus on the single soma reagents, any kind of early feedback or demand now that you get those out the door? And can just remind us on the commercial model there? How much of the existing Soma menu would be available for the single [soma mers]? And then any workflows or customers you expect this to resonate strongly with? Thanks.

Michael Egholm

Yes. So we were in a what we call like an early access, a minimal viable products up until now. Now we have made it fully available. We initially addressing a couple of applications. One is as more and more users resources will use SomaScan, they will find a number of identifying number of proteins, a very large number as I just referenced in my script.
And one of the first things you will want to do is to do a pull down with those and then analyze by mass spec confirming post translational modification. So we see that as one avenue. And then we believe there is a broader reagent market where antibodies are really limited, where we have 11,000 fully synthetic monoclonal reagents binding to human proteins. We believe that’s a valuable toolset, and we believe it’s a very nice complement to the antibody market. As far how we’re going about it, it’s a new capability.
We have not sold individual reagents before. So I would not have high expectations in the short term. But in the long term as we’re figuring out how to sell this, we see this as a fairly significant opportunity.

Operator

(Operator Instructions) Paul Knight, KeyBank.

Paul Knight

Michael, are you expecting the aluminum partnership to generate significant revenue in 2025?

Michael Egholm

Yes, hi, Paul. We're very excited about the upcoming launch here as we talked about at JPM at our last earnings call with the mounting evidence that we are uniquely positioned the clinical research and insights most recently at AACR that you can see and now alumina making this available to thousands of labs with sequences.
We cautious for '25, but long term see this as a very strong value driver. Illumina is responsible for the sales marketing and support, and we are all the faith in the world that they will do a brilliant job. And this is new for them, and this always takes longer than one want, but the outlook is really bright for the technology and maybe Alex you can just comment on what's backed into our '25 assumptions there.

Alex Kim

Yeah, maybe just to remind you in '24 we had some good revenue from alumina that came through for development, to support their development as well as their early access customers,. So year-over-year it will be moderate growth on top of that, but not for many of the reasons Michael mentioned not a significant growth overall, and that is baked into our current guidance and as Michael mentioned, '26 and beyond, we expect to begin to see strong traction and strong growth there.

Paul Knight

And then, of course, we can, I know academics challenging, but can you talk about what you're seeing within the biopharmaceutical customers that it does seem like we started the year with a more visible, spending trend there. Are you seeing a better market condition for the major biopharma part of the market?

Michael Egholm

Good traction in summer here in Q1 and have not seen a change from that as I'm sitting here today. Our numbers get a little bit obscured by like historical depends on a few large customers, as I said in the script, it's becoming ever less so, but it's still lead to quarter-to-quarter variation. So underneath that we're actually seeing a healthy growth and funnel beyond those accounts and in our authorized sites.

Paul Knight

Okay. And then last is the $10 million dollar cost action in early January. Should we think about an improved outlook for EBITDA loss this year?

Michael Egholm

I'll let Alex handle that.

Alex Kim

Yes, slightly. So the action was late January $10 million annualized, and so yes you will see that flow through our approach, as Michael has said many times, is continuous improvement and so you'll see us continue to improve our adjusted EBITDA. Thank you.

Operator

Ladies and gentlemen, at this time we will conclude our question and answer session and also conclude the Standard BioTools conference call. Thank you for attending today's presentation, and you may now disconnect your lines.