This story has been updated with information from the company's earnings call.
NEW YORK – NanoString Technologies reported after the close of the market on Wednesday that its second quarter revenues were up 50 percent year over year, driven by higher instrument and consumables revenues.
For the three months ended June 30, the company's total revenues were $33.8 million compared to $22.6 million a year ago, beating the consensus Wall Street estimate of $32.4 million.
Product and service revenues were up 59 percent to $33.6 million compared to $21.1 million in the year-ago quarter.
Instrument revenue grew 21 percent to $11.8 million from $9.8 million in the prior-year period, including $7.4 million from sales of the GeoMx Digital Spatial Profiler. NanoString CEO Brad Gray said in a statement that the company generated record orders for GeoMx systems in the second quarter.
On a conference call to discuss the firm's financial results, Gray said orders for GeoMx instruments grew 50 percent. He added that 60 percent of new GeoMx instruments were sold to academic researchers and called GeoMx a "strong growth driver" for the company.
Consumables revenues more than doubled year over year to $18.0 million from $8.4 million. GeoMx consumables revenue was about $3.8 million. Next-generation sequencing readout assays together accounted for about two-thirds of consumable revenue on GeoMx systems in the second quarter, Gray said.
Service revenues rose 29 percent year over year to $3.8 million from $3 million, the firm said.
The company's collaboration revenues fell 85 percent to $231,000 from $1.5 million in Q2 2020.
NanoString estimated that the installed base for its nCounter systems rose to approximately 1,015 as of the end of the quarter from about 890 at the same time last year. Gray said the company has seen full recovery of nCounter instrument placements to pre-pandemic levels in North America and expects the trend to continue. It has seen slower recovery in Europe and Asia, he added.
In Europe, the areas that are weak are the same regions where NanoString works through distributors, and some of the slow recovery could be a result of distributors being more negatively affected in their business operations, Gray said.
The firm grew its installed base of GeoMx instruments to 190 compared to 69 in the year-ago period. The instrument has largely been used for retrospective analysis of samples, but Gray said he feels good about the capability to use it for clinical trials and prospective analysis without significant changes to the system.
Gray said that the company is continuing to advance the development of its spatial molecular imager, or SMI, which is expected to launch with both RNA and protein assays in the second half of 2022. The product has been made available for 15 to 20 research projects through NanoString's technology access program, although Gray said it has seen interest from additional researchers.
He added that the TAP allows the company to see where the demand is from customers on different parameters that could impact design choices for the instrument, its consumables, and software.
NanoString's R&D expenses grew 10 percent to $17.2 million from $15.7 million in Q2 2020, while its SG&A costs grew 35 percent to $26.9 million from $19.9 million a year ago. CFO Thomas Bailey said the increase in R&D costs was due to increased personnel and product development for SMI, and he expects costs to continue to grow as SMI development progresses.
SG&A expenses were up due to investments in spatial biology-related commercial initiatives including increasing the company's sales force, Bailey added.
The firm's net loss for the quarter was $27.0 million, or $.60 per share, compared to $27.1 million, or $.72 per share, in Q2 2020. The firm said its adjusted non-GAAP net loss for the quarter was $18.7 million, but it didn’t provide an adjusted loss per share. Analysts, on average, had expected a loss of $.54 per share.
NanoString finished the quarter with $160.4 million in cash and cash equivalents, and $237.6 million in short-term investments.
For FY 2021, the firm expects GeoMx DSP revenue of $48 million to $50 million, up from previous guidance of $45 million to $50 million. NCounter revenue is expected to be between $95 million and $97 million compared to previous guidance of $95 million to $100 million. Total product and service revenue is expected to be $143 million to $147 million compared to previous estimates of $140 million to $150 million.