908 Devices Inc (MASS) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amidst Rising Losses
Handheld Product and Service Revenue: $11 million, up 86% from the prior-year period.
Recurring Revenue: $4.4 million, representing 37% of total revenues, up 54% from the prior-year period.
Gross Margin: 47%, compared to 52% in the prior-year period.
Adjusted Gross Margin: 54%, an increase of approximately 75 basis points from the prior-year period.
Net Loss from Continuing Operations: $9.8 million, compared to $5.9 million in the prior-year period.
Adjusted EBITDA Loss: $4.6 million, an improvement from a loss of $5.3 million in the prior-year period.
Cash Position: $124.3 million in cash, cash equivalents, and marketable securities, with no debt outstanding.
Device Shipments: 157 devices shipped in Q1 2025, compared to 53 devices in Q1 2024.
Full Year Revenue Guidance: Expected to be in the range of $53 million to $55 million, representing growth of 11% to 15% over full year 2024.
Warning! GuruFocus has detected 4 Warning Signs with MASS.
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Revenue from continuing operations increased by 59% year-over-year, reaching $11.8 million.
Recurring revenue grew by 54% from the previous year, representing 37% of total revenues.
The company completed the divestiture of its biopharma desktop portfolio, strengthening its cash position.
908 Devices Inc (NASDAQ:MASS) received significant orders, including a $2 million order from the Texas Department of Public Safety.
The company is targeting positive adjusted EBITDA by Q4 2025 and full-year cash flow positivity in 2026.
Gross margin decreased to 47% from 52% in the prior-year period, primarily due to intangible amortization from the RedWave acquisition.
Net loss from continuing operations increased to $9.8 million compared to $5.9 million in the prior-year period.
Total operating expenses rose to $16.6 million from $11.5 million in the prior-year period.
The company is not assuming any meaningful revenue contribution from the US Department of Defense AVCAD program in 2025.
There is potential risk of delays in the decision to move forward with full-rate production for the AVCAD program.
Q: Can you provide insights on the benefits from the RedWave acquisition and your ability to meet global demand? A: Kevin Knopp, CEO, highlighted that the integration with RedWave has been successful, expanding their product portfolio from one to four, which diversifies revenue streams. The sales team is effectively cross-selling, and they have a robust sales and marketing team in place to drive growth. The demand is accelerating due to macro pressures, and they are well-positioned to meet it.
Q: What is the status of the transition to Danbury, and what are the expected savings? A: Joseph Griffith, CFO, stated that the transition is progressing well, with initial moves already underway. They aim to complete it by midyear to support the second-half revenue ramp. The move is expected to save approximately $2 million annually, with about 40% of savings impacting the gross margin line.
Q: Can you update us on the AVCAD program and its revenue potential? A: Kevin Knopp, CEO, mentioned that they are working through improvements and expect a decision on full-rate production by the end of the government fiscal year. Joseph Griffith, CFO, added that the program could ramp to $10 million annually, potentially by 2026, but it might span into 2027.
Q: How do you view the opportunity for installed base expansion and next-gen system profitability? A: Joseph Griffith, CFO, noted that a significant portion of MX systems are under service contracts, providing recurring revenue. The next-gen system is expected to offer gross margin benefits due to efficiencies and comparable ASPs. Kevin Knopp, CEO, emphasized the potential for an upgrade cycle driven by new features.
Q: What is your strategy regarding M&A and business development as you approach cash flow breakeven? A: Kevin Knopp, CEO, stated that while M&A has been part of their strategy, they are currently focused on executing their existing plans. They remain open to opportunities that align with their financial profile but are primarily concentrating on organic growth and leveraging existing catalysts for future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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