On August 4, 2022 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for discovery and translational research, reported financial results for the second quarter ended June 30, 2022 (Press release, NanoString Technologies, AUG 4, 2022, View Source [SID1234617543]).

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Second Quarter Financial Highlights

Product and service revenue of $32.0 million
GeoMx Digital Spatial Profiler (DSP) revenue of $10.9 million. GeoMx DSP revenue includes:
Instrument revenue of $5.2 million
Consumables revenue of $5.7 million, annualized pull-through of approximately $77,000 per installed system
nCounter revenue, inclusive of all service revenue, of $21.1 million. nCounter revenue includes:
Instrument revenue of $4.3 million
Consumables revenue of $12.2 million, annualized pull-through of approximately $45,000 per installed system
Service revenue of $4.6 million
Cash, cash equivalents and short-term investments balance of $272.3 million
"NanoString had an excellent second quarter, as our commercial execution continued to improve, and laboratories adopting our solutions drove a 65% year-on-year increase in orders for new spatial biology instruments. Orders for our CosMx Spatial Molecular Imager are ahead of our expectations, and are helping us build a large revenue backlog that we expect will set us up for significant growth in 2023," said Brad Gray, president & CEO of NanoString. "With complementary instrument platforms, our new AtoMx Spatial Informatics Platform, and blue-chip partnerships, we believe we are ideally positioned to win the spatial biology land-grab currently underway."

Operational Highlights

Spatial Biology

CosMx Orders: Secured customer orders for more than 25 CosMx Spatial Molecular Imager (SMI) systems, bringing total orders to date to more than 60 systems
Commercial Status: First CosMx beta instrument was shipped to a customer during the first week of August, with two additional beta instruments scheduled for shipments to customers later in August
Advances in Genome Biology and Technology (AGBT) Conference: Unveiled the AtoMx Spatial Informatics Platform and showcased data from 20 spatial biology studies, including 15 for CosMx SMI
Introduced Integrated Informatics Platform for GeoMx Using NGS: Began offering a streamlined end-to-end solution to fully integrate GeoMx with Illumina NextSeq sequencers
GeoMx Installed Base: Grew installed base to approximately 315 GeoMx DSP Systems at June 30, 2022, representing 66% growth over the prior year
Publications: Continued growth of peer-reviewed publications utilizing GeoMx DSP technology, with approximately 20 new publications in the second quarter, bringing the cumulative total to approximately 130 peer-reviewed publications as of June 30, 2022
nCounter

nCounter Installed Base: Grew installed base to approximately 1,085 nCounter Analysis Systems at June 30, 2022, representing 7% growth over the prior year
Publications: Surpassed 5,800 cumulative peer-reviewed publications utilizing nCounter technology at June 30, 2022
2022 Outlook

The company updated its 2022 outlook, with results expected as follows:

Orders for about 200 spatial biology systems, consistent with previous guidance, with an expected mix now comprised of approximately 50% GeoMx system orders and approximately 50% CosMx system orders
Cumulative orders for approximately 120 CosMx systems expected by the end of 2022, providing a revenue backlog valued at approximately $30 million
Total product and service revenue of $140 to $150 million, as compared to previous guidance of $150 to $160 million, reflecting an order mix that is weighted more heavily to CosMx, with material CosMx revenue recognition expected to begin in 2023
nCounter revenue, inclusive of all service revenue, of $90 to $95 million, consistent with previous guidance
Adjusted EBITDA loss of $75 to $85 million, as compared to previous guidance 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.

Supplemental Information

As a supplement to the table above, we have posted to the investor relations section of our website, at www.nanostring.com/Investor Relations/Financials/Quarterly Results, supplemental financial data that include our adjusted financial measures as compared to the nearest comparable GAAP financial measures, for the second quarter and the six months ended June 30, 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 August 4, 2022 at 7:30pm ET through midnight ET on August 11, 2022. To access the replay, dial (866) 813-9403 or (929) 458-6194 and reference Conference ID: 426771. 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.