Telesis Bio, Inc.

Telesis Bio reported Q2 2023 total revenue growth of 53% year over year, with product revenue up 14% and instrument revenue up 36%. BioXp kit revenue was down 16% year over year in the quarter, but management said sequential kit revenue grew about 10% Q2 over Q1. Gross margin was 65.8% in Q2 versus 48% in the prior-year period, and 61.5% for the first half versus 48.6% in the prior-year period. Operating expenses were $13.7 million, down 20% year over year from $17.2 million, and net loss was $8.3 million, or $0.28 per share, versus a $14.8 million loss, or $0.50 per share, a year ago. Cash, cash equivalents, restricted cash, and short-term investments were $47.5 million at June 30, 2023. For full year 2023, management reiterated targets of about $55 million of OpEx, gross margin around 57%, and revenue around $35 million.

Todd Nelson emphasized that the company has now posted four straight quarters of either reducing or holding operating expenses while still growing revenue year over year. He framed the quarter around strategic execution: new kits, collaboration milestones, financing, board refreshment, and progress on SOLA, which he said remains a disruptive platform. His tone was constructive but realistic, acknowledging macro pressure on capital spending and longer sales cycles, especially for the 9600 system, while still saying the company remains on track toward profitability by the end of 2024.

No separate CFO spoke on the call; Todd Nelson covered the financial review. He cited Q2 gross margin of 65.8%, first-half margin of 61.5%, and said margin expansion was driven by higher-margin mix, collaboration milestones, and vertical integration efforts. He also highlighted lower operating expenses of $13.7 million in Q2 and $28.1 million for the first half, cash and investments of $47.5 million, and a maintained full-year outlook of roughly $55 million in OpEx, 57% gross margin, and $35 million in revenue. He said the company expects about 600 to 1,000 basis points of gross margin accretion in 2024 from its three-point plan, with oligo external supply substantially offset by year-end 2023 and instrument manufacturing insourcing contributing next year.

Analysts focused on the tougher demand backdrop for capital equipment, and management confirmed longer sales cycles, more signatures, and some capex pressure on the higher-priced 9600 system. Todd Nelson said the company offset some of that by selling more 3250 systems and still sold 17 instruments in the quarter. Questions also centered on the Pfizer collaboration; management said two of four milestones have been achieved, one more is expected in 2023 and the final one in the first half of 2024, with each technology milestone roughly $2.5 million and the full set totaling $10 million. Analysts asked about gross margin upside and product roadmap, and management said three more kits will launch in Q3, two in Q4, and both the 3250 and 9600 should largely converge on the same kit set by year-end.