Quanterix Releases Preliminary Financial Results for the Third Quarter of 2024
Sixth Consecutive Quarter of Double-Digit Growth
Reaffirms Full Year 2024 Outlook
BILLERICA, Mass.--(BUSINESS WIRE)--November 12, 2024--
Quanterix Corporation $(QTRX)$, a company fueling scientific discovery through ultra-sensitive biomarker detection, today announced preliminary financial results for the third quarter ended September 30, 2024 and reaffirmed its full year 2024 guidance. The Company also disclosed the need to restate certain prior period financial statements to correct non-cash errors related to those periods.
"Quanterix continues to build on our strong momentum, achieving our sixth consecutive quarter of double-digit growth. We are pleased to reaffirm our full year 2024 outlook, which is especially notable given the muted growth that continues to impact the tools space," said Masoud Toloue, Chief Executive Officer of Quanterix. "With a focus on disciplined execution of our strategic priorities, we are expanding the Quanterix portfolio of innovative products and services, empowering our customers to break new ground in research, and lead advancements in Alzheimer's diagnostics."
Preliminary Third Quarter 2024 Financial Highlights
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Revenue of $35.7 million, an increase of 13% compared to $31.6 million
in the corresponding prior year period, as preliminarily restated.
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GAAP gross margin of 58.9% and Non-GAAP gross margin of 53.4%.
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Net cash usage in the quarter was $3.3 million. The Company ended the
period with $296.1 million of cash, cash equivalents, marketable
securities, and restricted cash.
These preliminary financial results are based on current best available information and are unaudited and subject to adjustment, including in connection with the finalization of the restated financial statements as further described below. The Company expects to report its final results for the third quarter of 2024, which could vary from the preliminary financial results disclosed in this press release, in its Quarterly Report on Form 10-Q, following the filing of the restated financial statements, as further described below.
Third Quarter Operational and Business Highlights
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The Company announced the launch of LucentAD Complete, a multi-marker
test for Alzheimer's Disease (AD) detection. The test leverages a
proprietary algorithm to generate an AD score by analyzing five
Alzheimer's disease-related biomarkers (p-Tau 217, A<BETA>42/40, NfL,
GFAP), offering significantly improved amyloid classification and
reducing inconclusive results by up to three-fold compared to traditional
single-marker tests.
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In September 2024, Mt. Sinai Health System announced that they would be
deploying blood-based biomarkers as early detection tools across primary
and specialty care settings. Mt. Sinai will be examining p-Tau 217, as
well as NfL and GFAP using our assays through a grant from the Davos
Alzheimer's Collaborative.
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The Company continues to advance its innovation rate and this quarter
released a new series of ultra-sensitive 4-marker panels in neurology and
immunology, as well as an extracellular vesicle profiling tool kit, which
has research applications in multiple disease areas.
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The Company added two members to its Board of Directors, Jeff Elliott,
former CFO of Exact Sciences, and Ivana Magovčević-Liebisch,
Ph.D., J.D., President and CEO of Vigil Neuroscience.
2024 Full Year Business Outlook
The Company reaffirms its 2024 revenue guidance range of $134 million to $138 million. This revenue range excludes revenue from Lucent Diagnostics testing, which is expected to be immaterial for 2024. The Company also reaffirmed that it expects its research-use only business (excluding Diagnostics) to achieve cash flow breakeven when it reaches revenue between $170 and $190 million.
The Company continues to expect GAAP gross margin percentage to be in the range of 57%-61%, and non-GAAP gross margin percentage to be in the range of 51%-55%. The Company continues to anticipate 2024 cash usage (change in cash, cash equivalents, marketable securities, and restricted cash) to be approximately $30 million.
For additional information on the preliminary non-GAAP financial measures included in this press release, please see "Use of Non-GAAP Financial Measures," "Preliminary Restated Non-GAAP Measures" and "Preliminary Restated GAAP to Non-GAAP Reconciliation" below.
Restatement of Historical Financial Results
As previously reported, the Company has identified and continues its efforts to remediate a material weakness in its internal control over financial reporting relating to the operating effectiveness of internal controls associated with the accounting for inventory valuation.
In connection with these remediation efforts, and while performing closing procedures for the third quarter 2024, management identified an error related to the capitalization of labor and overhead costs applied to prior periods, which impacted the valuation of inventory. This error relates to a design deficiency in the Company's internal control over financial reporting related to the accounting for inventory valuation. The cumulative effect of this error, when taken together with unrelated immaterial errors identified by the Company in prior periods, resulted in the need for material adjustments to previously issued financial statements.
The Audit Committee of the Board of Directors and management therefore concluded that it is appropriate to restate the Company's audited consolidated financial statements as of December 31, 2023 and 2022 and for each of the three years in the period ended December 31, 2023, and its unaudited consolidated financial statements for the quarterly and year-to-date (as applicable) periods ended March 31, 2022, June 30, 2022, September 30, 2022, March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024 and June 30, 2024 (the "Restatement") in order to correct all known errors in accounting in the financial statements for such periods. The Company intends, as promptly as possible, to complete the Restatement and to file with the Securities and Exchange Commission amendments to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and its Quarterly Reports on Form 10-Q for the first and second quarters of 2024 and to file its Quarterly Report on Form 10-Q for the third quarter of 2024. Although there can be no assurance, the Company's goal is to complete the Restatement and all required filings by the end of 2024.
The Company currently estimates that the corrections to be made as part of the Restatement will result in the following impact to gross profit and operating loss:
GAAP Gross Profit Operating Loss
Increase Increase/(Decrease)
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Year ended December 31, 2021 $1.6 million $(0.6) million
Year ended December 31, 2022 $0.4 million $0.5 million
Year ended December 31, 2023 $2.1 million $(2.3) million
These preliminary figures are based on currently available information and are unaudited and subject to adjustment. The supplemental schedules in this press release provide additional information regarding the preliminary anticipated impact of the Restatement, but such additional information is also based on currently available information and is unaudited and subject to adjustment. The Company does not expect the errors to result in any material impact on the previously reported amounts for total revenues or cash in any completed fiscal period.
The Company expects to delay the filing of its Quarterly Report on Form 10-Q for the third quarter of 2024, in order to complete the Restatement and will file a Form 12b-25 with the Securities and Exchange Commission. Additional information regarding the Restatement and the preliminary anticipated effect of the Restatement on the Company's previously reported financial information is included in the Company's Current Report on Form 8-K (and exhibits) filed on November 12, 2024.
Conference Call
In conjunction with this announcement, the Company will host a conference call on November 12, 2024, at 4:30 PM E.T. Click here to register for the conference call with a webcast link. For audio use the following dial-in number and passcode: USA & Canada -- Toll-Free (800) 715-9871 Conference ID: 2720617.
Interested investors can also listen to the live webcast from the Event Details page in the Investors section of the Quanterix at https://ir.quanterix.com. An archived webcast replay will be available on the Company's website for one year.
Supplemental Schedules
Preliminary Restated GAAP Financials
FY21 FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 FY23 Q1FY24 Q2FY24 Q3FY24
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As Reported
Revenue 110.6 105.5 28.5 31.0 31.3 31.5 122.4 32.1 34.4 35.7
Gross Profit
$ 61.7 46.8 16.9 19.1 17.8 16.8 70.6 19.6 20.1 21.1
Gross Profit
% 55.8% 44.4% 59.5% 61.7% 56.8% 53.2% 57.7% 61.2% 58.3% 58.9%
Operating
Expense 120.3 148.5 26.3 28.7 31.6 33.8 120.3 33.6 33.2 32.3
Operating
Loss (58.6) (101.7) (9.4) (9.6) (13.8) (17.0) (49.7) (14.0) (13.1) (11.2)
GAAP
Adjustments
Revenue 0.0 0.0 0.0 (0.2) 0.2 0.0 0.0 0.0 0.1 0.0
Gross Profit
$ 1.6 0.4 (0.9) 0.4 1.1 1.5 2.1 (0.8) 1.5 0.0
Operating
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