Biotage AB (BITGF) Q3 2024 Earnings Call Highlights: Strong Organic Growth Amidst Market Challenges

GuruFocus News
3 min read

In This Article:

  • Organic Growth: 12% organic growth over the prior year.

  • Reported Growth: 9% reported growth.

  • Drug Discovery and Development Revenue: 349 million SEK, up 13% reported and 16% organically for the quarter.

  • Analytical and Diagnostic Testing Revenue: 141 million SEK, up 1% reported and 5% organically for the quarter.

  • Recurring Revenue: 351 million SEK, representing 72% of total revenue, up 20% over Q3 2023.

  • Gross Margin: 63% year-to-date, robust and ahead of last year.

  • Adjusted EBITDA: 124 million SEK, up 6% over Q3 2023.

  • Adjusted Cash Flow from Operations: 153 million SEK, up 18%, representing 124% of adjusted EBITDA.

  • Gross Cash: 370 million SEK.

  • Net Cash: 120 million SEK.

Release Date: October 23, 2024

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

Positive Points

  • Biotage AB (BITGF) reported a solid 12% organic growth in Q3 2024, aligning with revenue consensus.

  • The company has a resilient business model with a diversified portfolio addressing multiple markets, including drug discovery and development.

  • North America posted strong results, benefiting from a diversified portfolio and steady growth in analytical testing and diagnostics.

  • Biotage AB (BITGF) has made progress in addressing its backlog in peptide synthesis, although demand continues to outpace manufacturing capabilities.

  • The company continues to invest in expanding manufacturing capacity and operational facilities, including a new clean room facility in Boston, Massachusetts.

Negative Points

  • Equipment sales remain weak, particularly in China and due to conservative spending from Pharma customers in Europe.

  • There are ongoing production capacity constraints for peptide systems, with demand outpacing current manufacturing capabilities.

  • The analytical testing business showed softer performance in Q3, attributed to seasonal factors and a quieter holiday period in the US.

  • China's revenue contribution has declined significantly, now representing less than 5% of total revenue.

  • Gross margins in Q3 were slightly lighter due to transitory changes in product and customer mix, although the company expects margins to improve.

Q & A Highlights

Q: Can you explain the factors behind the weaker gross margin in Q3, despite strong consumer growth? A: Andrew Kellett, CFO, explained that the weaker gross margin was due to transitory changes in product and customer mix, particularly in the service business. He emphasized that this is not indicative of a trend and expects margin growth year-on-year, maintaining confidence in the full-year outlook.

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