On February 28, 2023 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for discovery and translational research, reported financial results for the fourth quarter and fiscal year ended December 31, 2022 (Press release, NanoString Technologies, FEB 28, 2023, View Source [SID1234627865]).

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"We are thrilled with the momentum that’s building in the spatial biology market. In 2022, we grew spatial biology instrument orders 50% year-on-year, and with approximately $40 million of CosMx orders in backlog, we are well-positioned for strong revenue growth in 2023," said Brad Gray, President and CEO of NanoString. "At the Advances in Genome Biology and Technology (AGBT) conference earlier this month, we wowed researchers with demonstrations of our AtoMx Spatial Informatics Platform and customer-generated data using our new 6,000-plex CosMx RNA panel. We believe that we currently offer researchers the most compelling portfolio of spatial biology solutions, and with CosMx RNA assays that provide 12 times the data of competing platforms, and the only cloud-based spatial informatics suite, our lead is growing."
Fourth Quarter Financial Highlights
•Revenue of $34.4 million
•Spatial biology revenue of $14.8 million
•nCounter revenue, inclusive of all service and other revenue, of $19.6 million
Full Year Financial Highlights
•Revenue of $127.3 million
•Spatial biology revenue of $44.7 million
•nCounter revenue, inclusive of all service and other revenue, of $82.6 million
•Cash, cash equivalents and short-term investments balance of $196.5 million as of December 31, 2022
Spatial Biology
•Generated over 105 new system orders in Q4, including approximately 80 for CosMx and over 25 for GeoMx
•Shipped our first 13 CosMx systems in Q4, generating Q4 revenue of approximately $3 million
•Exited 2022 with over 165 CosMx systems in backlog to be shipped in future periods, representing revenue to be recognized in future periods of approximately $40 million
•Announced and demonstrated expansion of capability of CosMx to 6000-plex RNA at the 2023 AGBT annual conference, representing 12 times the number of data points per cell that can be analyzed as compared to competing spatial imaging platforms
•Entered a collaboration with Weill Cornell Medical to create a Spatial Atlas of Human Anatomy (SAHA), that will create multicellular, single-cell, and sub-cellular maps of 30 non-diseased organs from a healthy and diverse population of adults
•Released CosMx SMI dataset generated from formalin-fixed paraffin-embedded (FFPE) human liver samples. The dataset highlights the data quality of the platform, demonstrating high sensitivity and high specificity capabilities
•Total installed base of our spatial biology platforms of approximately 350, an increase of approximately 37% as compared to 2021
•Total peer-reviewed publications featuring our spatial biology platforms were approximately 195 as of December 31, 2022, representing an increase of approximately 105 publications in the last 12 months
nCounter
•Total installed base of our nCounter platforms of approximately 1,120, an increase of approximately 7% as compared to 2021
•Total peer-reviewed publications featuring nCounter were approximately 6,520 as of December 31, 2022, representing an increase of approximately 1,320 publications in the last 12 months
2023 Outlook
The company, based on its plans and initiatives for 2023, expects to record results approximately as follows:
•Revenue of $170 to $180 million, including spatial biology revenue of $95 to $100 million and nCounter revenue, inclusive of all service and other revenue, of $75 to $80 million
•Adjusted EBITDA loss of $65 to $75 million
Financial Results
We have elected to present selected non-GAAP, or adjusted, financial measures, including Adjusted EBITDA. These adjusted financial measures are calculated excluding certain items that may make it more challenging to compare our GAAP operating results across periods. Such items may include collaboration revenue, stock-based compensation, depreciation and amortization, or one-time charges such as transaction related fees and expenses or restructuring charges and severance costs. A reconciliation of adjusted financial measures to the nearest comparable GAAP financial measure can be found in the tables at the end of this press release.
(dollars in thousands) Three Months Ended December 31,
GAAP Non-GAAP Adjusted
2022 2021 2022 2021
Total revenue $ 34,422 $ 42,455 $ 34,420 $ 42,007
Cost of revenue 21,122 20,046 19,604 19,394
Gross margin 39 % 53 % 43 % 54 %
Research and development 19,086 18,162 14,996 15,693
Selling, general and administrative 36,895 31,596 27,530 26,553
Adjusted EBITDA N / A N / A $ (27,710) $ (19,633)
Non-operating expense, net (1,433) (1,912) (1,433) (1,912)
Net loss $ (44,114) $ (29,261) $ (29,143) $ (21,545)
Years Ended December 31,
GAAP Non-GAAP Adjusted
2022 2021 2022 2021
Total revenue $ 127,262 $ 145,085 $ 126,725 $ 143,957
Cost of revenue 65,475 68,304 60,721 65,502
Gross margin 49 % 53 % 52 % 54 %
Research and development 70,841 69,504 58,968 59,301
Selling, general and administrative 143,129 115,503 115,593 92,985
Adjusted EBITDA N / A N / A $ (108,557) $ (73,831)
Non-operating expense, net (7,360) (7,028) (7,360) (7,028)
Net loss $ (159,543) $ (115,254) $ (115,917) $ (80,859)

Supplemental Information
As a supplement to the table above, we have posted to the investor relations section of our website, at View Source, supplemental financial data that include our adjusted financial measures as compared to the nearest comparable GAAP financial measures, for the fourth quarter and full year of 2022 and for each quarter of and the full year of 2021.
Conference Call
Management will host a conference call today beginning at 1:30 pm PT / 4:30 pm ET to discuss these results and answer questions. Investors and other interested parties can register for the call in advance by visiting View Source After registering, an email confirmation will be sent including dial-in details and unique conference call codes for entry. Registration is open throughout the call, but to ensure connection for the full call, registration in advance is recommended. The link to the webcast and audio replay will be made available at the Investor Relations website: www.nanostring.com. A replay of the call will be available beginning February 28, 2023 at 7:30pm ET through midnight ET on March 14, 2023. To access the replay, dial (866) 813-9403 or (929) 458-6194 and reference Conference ID: 176735. The webcast will also be available on our website for one year following the completion of the call.
Non-GAAP, or Adjusted, Financial Information
We believe that the presentation of non-GAAP, or adjusted, financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. Reconciliation of adjusted financial measures to the most directly comparable financial result as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. A reconciliation of adjusted guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding certain expenses that may be incurred in the future. For further information regarding why we believe that these adjusted measures provide useful information to investors, the specific manner in which management uses these measures and some of the limitations associated with the use of these measures, please refer to "Notes Regarding Non-GAAP Financial Information" at the end of this press release.