Standard BioTools, Inc. Q2 FY2023 earnings call

Strategic Priorities - Stabilizing the core business with a focus on bringing it back to growth. - Improving operating discipline, including gross margins and reducing operating expenses to achieve positive cash flow and profitability. - Using M&A to drive scale, profitability and growth. ### Proteomics Business - Driven by new instrument sales, Proteomics total revenue grew 74% in the second quarter and 38% in the first half of 2023. In April, launched a new imaging product, the Hyperion XTi, with early traction. Traditional flow cytometry business has advantages. ### Genomics Business - Underwent strategic shift, including consolidating product portfolio, reducing spend in sales/marketing/R&D, and new go-to-market approach. Saw a 8% decline in the first half of 2023 but near breakeven contribution margin. ### Operating Discipline - Manifested in higher gross margin and reduced operating expenses, leading to materially lower operating cash burn. ### Lean-based Approach - Enhanced focus on quality and serving customers, with virtuous cycle benefit of higher instrument sales and higher-margin consumable pull-through. ### M&A Focus - Critical core focus, industry ripe for consolidation, and company well positioned to lead, with incremental additions leveraging infrastructure and SBS approach.

In the second quarter, instrument revenue grew over 300%, and year-to-date instrument revenue grew over 70%. Proteomics total revenue grew 74% in the second quarter and 38% in the first half of 2023. Genomics total revenue grew 15% in the second quarter and was down 8% in the first half of 2023. Recurring consumable and service revenue comprised about 65% of revenue year-to-date in 2023. Non-GAAP gross margin for the second quarter expanded to just under 61%, a 2,100 basis point improvement compared to the second quarter of 2022. Year-to-date, non-GAAP gross margin improved to just under 62%, a 1,100 basis point improvement compared to the first half of 2022. Non-GAAP operating expenses in the most recent quarter were $25.2 million, just over 90% of revenue, down from $33.8 million in the prior year. In the first half of 2023, non-GAAP operating expenses were reduced by just under $18 million, a 26% decrease compared to the first half of 2022. Operating cash use decreased in the second quarter versus 2022 by more than $20 million, a 70% reduction, and year-to-date, operating cash used was reduced by $28 million, a more than 60% reduction compared to 2022.

Based on progress in the first half of the year but being in the early days of transition and cognizant of uncertain macroeconomic environment and imperfect visibility, management is not updating financial guidance today. Will provide updates when appropriate as the macro environment becomes more clear and business transition efforts continue to play out.

• Macro environment uncertainty may impact the business. - New OEM partnership relationships take time to develop, validate and mature, with uncertainty. - Residual headwinds related to product mix, legacy service and warranty-related costs and capacity utilization.