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Akoya Biosciences Q4 Revenues up 25 Percent; Firm Projects Cash Flow Breakeven by Year-End

NEW YORK – Akoya Biosciences reported after the close of the market on Monday that its fourth quarter revenues climbed 25 percent year over year while full-year revenues increased 29 percent, in line with preliminary earnings results announced in January.

The company said it expects to achieve operating cash flow breakeven by the end of 2024 and disclosed in a regulatory filing that it recently laid off an undisclosed number of employees in pursuit of this goal.

For the three months ended Dec. 31, the Marlborough, Massachusetts-based spatial biology firm booked revenues of $26.5 million, a record for the company, compared to $21.2 million in Q4 2022 and beating analysts' average estimate of $25.9 million.

Fourth quarter product revenues, including instruments, reagents, and software, were $16.7 million, up 6 percent from $15.7 million in the same period a year ago.

During Q4, the company sold 51 instruments, including 15 PhenoCyclers and 36 PhenoImagers, generating total instrument revenues of $9.2 million. By comparison, Akoya sold 71 instruments in Q4 2022.

Q4 reagent revenues were $6.9 million, reflecting a 52 percent increase from the same period a year ago.

The company’s Q4 service and other revenue was $9.8 million, up 78 percent from $5.5 million in Q4 2022.

"Services have been a substantial growth segment for us, as our instrument warranty and field service revenue have rapidly expanded, in addition to our lab services business continuing to drive higher value studies through new and existing biopharma partnerships," Akoya CFO Johnny Ek told investors in a call to discuss the financial results.

Akoya's Q4 net loss was $10.8 million, or $.22 per share, compared to a net loss of $18.9 million, or $.50 per share, in Q4 2022, outperforming the Wall Street estimate of a $.27 loss per share.

The company's Q4 R&D expenses dropped 27 percent to $4.7 million from $6.4 million a year ago, and its SG&A costs decreased 10 percent to $18.9 million from $20.9 million.

For full-year 2023, Akoya reported revenues of $96.6 million, up 29 percent from $74.9 million in 2022 and slightly surpassing analysts' average estimate of $96.2 million.

Full-year product revenues were $67.4 million, up 17 percent from $57.7 million in 2022. Service and other revenues jumped 70 percent year over year to $29.2 million from $17.2 million.

The company’s global installed base grew to 1,183 instruments by the end of 2023, including 342 PhenoCyclers and 841 PhenoImagers, an increase of 26.7 percent compared to an installed base of 934 instruments at the end of 2022.

Regarding the rollout of the PhenoCycler upgrades, approximately half of the installed base of the PhenoCycler-Fusion and PhenoCycler-HT systems had been upgraded to 2.0 models by year-end 2023, Ek said.

By geographic region, Akoya’s 2023 revenue growth was strongest in North America, approaching the "high 30 percent realm," CEO Brian McKelligon said during the call. Revenue growth in Europe, the Middle East, and Africa was in the low 20 percent range, while that of Asia-Pacific was in the "high single digits," he added.

Akoya’s 2023 R&D expenses dipped 6 percent to $21.9 million from $23.2 million in 2022, while its SG&A expenses grew 3 percent year over year to $82.4 million from $79.7 million.

Akoya's full-year net loss was $63.3 million, or $1.43 per share, compared to a net loss of $70.6 million, or $1.87 per share, in the prior year and below the Wall Street estimate of a $1.45 loss per share.

For full-year 2024, Akoya expects revenue to be in the range of $114.0 million to $118.0 million.

"Within our 2024 forecast, we expect both strong top-line growth and margin expansion while we continue to manage our costs," McKelligon said. "We are projecting operating cash flow breakeven by the end of this year."

"Through ongoing strategic efforts, we expect to further lower our operating costs this year, helping us achieve projected operating cash flow breakeven," Ek said. In a filing with the US Securities and Exchange Commission on Tuesday, Akoya disclosed that the company recorded a charge of approximately $1.3 million for "costs related to a reduction in workforce" in January 2024.

In an email, an Akoya spokesperson said the company "completed a moderate restructuring and facilities consolidation aligning its resources with plans to achieve operating cash flow breakeven by year’s end." The spokesperson did not provide additional details about the number of layoffs. 

McKelligon told investors the firm will focus on three key initiatives during 2024. For one, it will continue to expand applications and improve workflow efficiency for the PhenoCycler and PhenoImager systems to "drive the continued high growth of the reagent revenue."

In addition, it will focus on improving efficiencies, cost-effectiveness, and gross margin expansion. Lastly, the firm will continue to drive clinical partnerships to achieve its goal of delivering a menu of high-value companion diagnostics.

Meanwhile, the company anticipates the current macroeconomic environment to impact capital equipment purchases, McKelligon said, resulting in long instrument sales cycles and continued underperformance in its China business, which will likely "persist at least through the fourth quarter of 2024."

The company ended the year with $83.1 million in cash and cash equivalents.

In Tuesday morning trading on the Nasdaq, Akoya's shares were down more than 9 percent at $5.44.