Financial Data and Key Metrics Changes - Revenue in Q2 2024 was 5.7 million from the previous year [5] - Gross margin was 57.2%, a decrease from 58% in Q2 last year, primarily due to lower absorption of fixed manufacturing costs [9][10] - Adjusted EBITDA decreased from 1.3 million this year [10] - Operating loss on a GAAP basis was reported at 800,000, or 3.5% of revenue [6][11] Business Line Data and Key Metrics Changes - Revenue from the Americas was down 12% year-over-year and 3% sequentially [7] - Preclinical sales declined compared to the prior year and sequentially [7] - Cellular and Molecular products saw a slight decline of 5% year-over-year but showed sequential growth of 9% compared to Q1 2024 [7] - In Europe, revenue was down 29% year-over-year but flat sequentially [8] - APAC revenue decreased by 22% year-over-year and 16% sequentially, with preclinical sales continuing to decline [8] Market Data and Key Metrics Changes - The market environment has been challenging, with slower sales to China and Asia Pacific continuing [5] - Capital spending by CRO and biopharma customers in Europe and the U.S. has been reduced, impacting preclinical product shipments [5] - The academic market in Asia is showing signs of recovery, with increased quoting activity [24][46] Company Strategy and Development Direction - The company is focusing on new product initiatives and operating cost structure improvements to support long-term double-digit revenue growth [6][14] - New product revenue streams from bioproduction and MEA Organoid applications are expected to begin in the second half of the year [14] - The company aims to leverage established technologies for high-growth applications with significant consumable and recurring revenues [14][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough first half of the year and a challenging Q2, but expressed optimism about market recovery in the second half [5][21] - The full-year 2024 revenue outlook has been reduced to approximately 102 million, with expectations for sequential growth supported by new product shipments [21] - Management expects gross margin for the full year to be around 59% to 60% despite lower expected revenue [21] Other Important Information - The company realized approximately 4 million [10][50] - Recurring revenue has increased from a little above 35% to closer to 40% due to pressure on capital purchases [48] Q&A Session Summary Question: What is the total APAC exposure as a percent of revenue? - Historically, Asia Pacific has been about 25% of total revenue, predominantly from China [23] Question: What is the outlook for APAC? - Management believes they have reached the bottom in APAC, with growing funnels and early indications of recovery [24] Question: Are orders being received for new products? - The company has started receiving orders for new products introduced at the end of last year, with expectations for revenue growth in the second half [25][27] Question: What growth is expected if the market grows at 5%? - The company expects to achieve low double-digit growth driven by new product development, independent of market growth [33] Question: Can you elaborate on the organoid marketing strategy? - The strategy includes leveraging academic research and publications to build credibility and market presence, targeting both academic and biopharma customers [39][41]
Harvard Bioscience(HBIO) - 2024 Q2 - Earnings Call Transcript