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Seer Inc (SEER) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges with ...

GuruFocus Research
·4-min read

  • Q1 2024 Revenue: $3.1 million, down from $4.1 million in Q1 2023.

  • 2024 Revenue Forecast: Expected to be between $16 million to $18 million.

  • Net Loss: $20.7 million for Q1 2024, improved from $24 million in Q1 2023.

  • Gross Margin: 44% in Q1 2024, down from 51% in Q1 2023.

  • Operating Expenses: $26.6 million in Q1 2024, a decrease from $29.5 million in Q1 2023.

  • Free Cash Flow Loss: Approximately $11.2 million for Q1 2024.

  • Cash Position: Ended Q1 2024 with $359.2 million in cash, cash equivalents, and investments.

  • Share Repurchase Program: Authorized up to $25 million.

Release Date: May 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Seer Inc (NASDAQ:SEER) continues to expand its commercial team and invest in strategic initiatives to drive adoption and awareness of the Proteograph Product Suite.

  • The company has launched additional Sphere Technology Access Centers in Europe to provide comprehensive services from sample to data, enhancing accessibility for European customers.

  • Seer Inc (NASDAQ:SEER) has implemented a share repurchase program for up to $25 million, reflecting confidence in the long-term value of the company's platform.

  • The company has seen multiple customers purchase instruments through the Strategic Instrument Placement (SIP) program, validating the value and quality of the Proteograph.

  • Seer Inc (NASDAQ:SEER) has a strong pipeline of customer publications forthcoming in high-impact journals, which is expected to drive further adoption and utilization of the Proteograph platform.

Negative Points

  • First quarter revenue of $3.1 million indicates a decrease from the previous year, with Seer Inc (NASDAQ:SEER) facing headwinds to adoption of the Proteograph Product Suite.

  • The company has revised its 2024 revenue expectations to $16 million to $18 million, indicating challenges in achieving a significant revenue inflection.

  • Seer Inc (NASDAQ:SEER) is experiencing elongated sales cycles and pressure on CapEx budgets, affecting the outright purchase of new instrumentation.

  • The company has implemented a 10% reduction in force outside of the commercial organization to reduce capital use until revenue growth accelerates.

  • Despite ongoing efforts, the pace of adoption and utilization of the Proteograph platform is not yet on track with the company's expectations.

Q & A Highlights

Q: Can you discuss the 2Q top line expectations and talk about your visibility into the second half of the year? A: David Horn, President and CFO of Seer Inc, explained that the company does not provide quarterly guidance but remains conservative in their outlook due to ongoing headwinds. He mentioned that revenue is expected to be more weighted towards the second half of the year, with key publications potentially driving interest in the platform.

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Q: How has the adoption of new technologies been impacted by budget constraints in large biopharma? A: David Horn noted that large biopharmas are still facing budgetary constraints which have delayed some expected deals. However, smaller biotech firms have shown good reception to Seer's service model, indicating mixed impacts based on company size and financial flexibility.

Q: Can you provide an update on the number of organizations using the STACK service and discuss its impact on product adoption? A: Omid Farokhzad, CEO of Seer Inc, stated that STACK continues to run at capacity and is expected to do so through Q2 and Q3. He emphasized that STACK and the SIP program are crucial for lowering barriers to accessing Proteograph data and are not intended to pivot Seer into a service business but to facilitate platform adoption.

Q: What are the financial expectations for 2024 given the current market conditions? A: David Horn shared that Seer Inc now expects 2024 revenue to be in the range of $16 million to $18 million, aligning with 2023 revenues. The company remains committed to a disciplined spending approach to align with revised revenue expectations and has implemented a workforce reduction of about 10%.

Q: What strategic actions is Seer taking to address the slower-than-expected revenue growth and adoption rates? A: Omid Farokhzad outlined several strategies including investing in the commercial team, launching additional technology access centers in Europe, and implementing a workforce reduction outside of the commercial organization. Additionally, Seer has initiated a $25 million share repurchase program to address the perceived dislocation in share value relative to long-term company value.

Q: How is Seer enhancing access to the Proteograph Product Suite and what are the expected impacts? A: Omid Farokhzad highlighted the continuation of the Strategic Instrument Placement (SIP) program and the expansion of STACK services to Europe. These initiatives are designed to enhance access to Seers technology, particularly for researchers and organizations that lack in-house capabilities, thereby driving broader adoption and utilization of the Proteograph Product Suite.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.