Olink reports third quarter 2023 financial results
UPPSALA, Sweden, Nov. 15, 2023 (GLOBE NEWSWIRE) — Olink Holding AB (publ) (“Olink”) (Nasdaq: OLK) today announced its unaudited financial results for the third quarter ended September 30, 2023.
Highlights
- Third quarter 2023 revenue totaled $44.2 million, representing year over year growth of 39% on a reported basis and 38% on a constant currency adjusted like-for-like basis
- Total Explore customer installations reached 87, with 13 installations during the third quarter
- Total Signature Q100 placements reached 153, with 21 placements during the third quarter
- Explore revenue of $32.3 million accounted for 73% of total third quarter revenue, with Explore Kit revenue totaling $17.4 million, or 54% of total Explore revenues
- Third quarter kits revenue and analysis services revenue represented 54% and 38% of total revenue, respectively
- Third quarter 2023 net loss was $(1.8) million, with adjusted EBITDA of $2.0 million; compared to third quarter 2022 net loss of $(1.3) million and adjusted EBITDA of $(1.7) million
- Exited third quarter 2023 with a cash balance of $130 million
Third quarter financial results
Total revenue for the third quarter of 2023 was $44.2 million, as compared to $31.8 million for the third quarter of 2022, growing 39% year over year and driven primarily by strength in our kit business.
Third quarter 2023 kits revenue of $23.8 million represented 54% of our total revenue, compared to 42% for the third quarter of 2022; and grew 78% year over year as a result of continued Explore and Target revenue growth in combination with the launch of Explore HT.
Analysis services revenue for the third quarter of 2023 was $16.9 million, as compared to $15.1 million for the third quarter of 2022.
Other revenue was $3.5 million for the third quarter of 2023, as compared to $3.2 million for the third quarter of 2022. Other revenue growth was driven by Signature Q100 placements and other hardware revenue.
By geography, revenue during the third quarter of 2023 was $17.9 million in Americas, $20.9 million in EMEA (including Sweden), and $5.4 million in China and RoW (including Japan).
Reported gross profit was $30.9 million in the third quarter of 2023, as compared to $21.0 million in the third quarter of 2022. Adjusted gross profit was $32.0 million in the third quarter of 2023, as compared to $21.8 million in the third quarter of 2022.
Reported gross profit margin for kits was 83% for the third quarter of 2023, as compared to 87% for the third quarter of 2022. Adjusted gross profit margin for kits was 85% for the third quarter of 2023, as compared to 89% for the third quarter of 2022.
Reported gross profit margin for analysis services was 60% as compared to 51% in the third quarter of 2022. Adjusted gross profit margin for analysis services was 65% for the third quarter of 2023, as compared to 55% in the third quarter of 2022.
Reported and adjusted gross profit margin for Other was 25% for the third quarter of 2023, as compared to 49% for the third quarter of 2022.
Total operating expenses for the third quarter of 2023 were $38.5 million, as compared to $29.0 million for the third quarter of 2022. The increase was largely due to continued investment into Olink’s commercial organization, research and development team expansion, and additional administrative costs.
Net loss was $(1.8) million for the third quarter of 2023 and adjusted EBITDA was $2.0 million, as compared to a net loss of $(1.3) million and adjusted EBITDA of $(1.7) million for the third quarter of 2022.
Net loss per share for the third quarter of 2023 was $(0.01) based on a weighted average number of outstanding shares of 124,342,715 as compared to a net loss per share of $(0.01) in the third quarter of 2022 based on a weighted average number of outstanding shares of 119,098,118.
Webcast and conference call
Due to the pending acquisition of Olink by Thermo Fisher Scientific Inc., Olink will not be hosting a conference call.
Statement regarding use of non IFRS financial measures
We present certain non-IFRS financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We believe that the use of these non-IFRS measures facilitates investors’ assessment of our operating performance. We caution readers that amounts presented in accordance with our definitions of adjusted EBITDA, adjusted gross profit, adjusted gross profit margin, adjusted gross profit margin by segment, and constant currency revenue growth, may not be the same as similar measures used by other companies. Not all companies and Wall Street analysts calculate the non-IFRS measures we use in the same manner. We compensate for these limitations by reconciling each of these non-IFRS measures to the nearest IFRS performance measure, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.
We are not able to forecast constant currency revenue on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting foreign currency exchange rates and, as a result, are unable to provide a reconciliation to forecasted constant currency revenue.
Investor contact
Jan Medina, CFA
VP Investor Relations & Capital Markets
Mobile: +1 617 802 4157
jan.medina@olink.com
Media contact
Michael B. Gonzales
VP Global Marketing
Mobile: +1 415 308 6467
michael.gonzales@olink.com
Forward-looking statements
This press release contains express or implied “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995 that are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding the proposed acquisition of Olink by Thermo Fisher (the “Proposed Acquisition”), our 2023 revenue outlook, our Explore externalizations, our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts, and other matters regarding our business strategies, use of capital, results of operations and financial position, and plans and objectives for future operations. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: the COVID-19 pandemic, the need to develop new products and adapt to significant technological change; implementation of strategies for improving growth; general economic conditions and related uncertainties; dependence on customers’ capital spending policies and government funding policies; the effect of economic and political conditions and exchange rate fluctuations on international operations; use and protection of intellectual property; the effect of changes in governmental regulations; any natural disaster, public health crisis or other catastrophic event; and the effect of laws and regulations governing government contracts; the ability of the parties to satisfy the closing conditions of the Proposed Acquisition on a timely basis, if at all; the possibility of regulatory approvals required for the Proposed Acquisition not being timely obtained, if obtained at all, or being obtained subject to conditions; uncertainties as to how many of Olink’s shareholders will tender their shares in the offer; the possibility that competing offers will be made; the occurrence of events that may give rise to a right of one or both of Thermo Fisher and Olink to terminate the Purchase Agreement; negative effects of the announcement of the Proposed Acquisition on the market price of Olink’s common stock; prior to the completion of the Proposed Acquisition, Olink’s business experiencing disruptions due to uncertainty or other factors related to the Proposed Acquisition making it more difficult to maintain relationships with employees, customers, licensees, other business partners or governmental entities; difficulty retaining key employees; the outcome of any legal proceedings related to the Proposed Acquisition; and the parties being unable to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within the expected timeframe for completing the Proposed Acquisition, or at all. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “seek,” “plan,” “outlook,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “currently,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under the caption “Risk Factors” in our Form 20-F for the fiscal year ended December 31, 2022 (Commission file number 001-40277) and elsewhere in the documents we file or furnish with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections for the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.
About Olink
Olink Holding AB (Nasdaq: OLK) is a company dedicated to accelerating proteomics together with the scientific community, across multiple disease areas to enable new discoveries and improve the lives of patients. Olink provides a platform of products and services which are deployed across major biopharmaceutical companies and leading clinical and academic institutions to deepen the understanding of real-time human biology and drive 21st century healthcare through actionable and impactful science. The Company was founded in 2016 and is well established across Europe, North America, and Asia. Olink is headquartered in Uppsala, Sweden.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (UNAUDITED)
| Amounts in thousands of U.S. Dollars unless otherwise stated | Three months ended September 30 | Nine months ended September 30 | |||||||
| Note | 2023 | 2022 | 2023 | 2022 | |||||
| Revenue | 4 | 44,152 | 31,772 | 101,045 | 81,963 | ||||
| Cost of goods sold | (13,265 | ) | (10,785 | ) | (35,253 | ) | (30,589 | ) | |
| Gross profit | 30,887 | 20,987 | 65,792 | 51,374 | |||||
| Selling expenses | (14,283 | ) | (11,240 | ) | (38,886 | ) | (31,293 | ) | |
| Administrative expenses | (15,716 | ) | (11,998 | ) | (47,887 | ) | (40,391 | ) | |
| Research and development expenses | (8,260 | ) | (6,443 | ) | (22,701 | ) | (19,761 | ) | |
| Other operating income/(expense) | (275 | ) | 725 | (265 | ) | 1,292 | |||
| Operating loss | (7,647 | ) | (7,969 | ) | (43,947 | ) | (38,779 | ) | |
| Interest income | 4,531 | 29 | 5,137 | 40 | |||||
| Interest expense | (303 | ) | (141 | ) | (539 | ) | (407 | ) | |
| Foreign exchange, net | 1,171 | 6,427 | 8,590 | 16,906 | |||||
| Other finance income | — | — | 578 | — | |||||
| Loss before tax | (2,248 | ) | (1,654 | ) | (30,181 | ) | (22,240 | ) | |
| Income tax benefit | 5 | 429 | 366 | 6,130 | 3,960 | ||||
| Net loss for the period (Attributable to shareholders of the Parent) | (1,819 | ) | (1,288 | ) | (24,051 | ) | (18,280 | ) | |
| Other comprehensive loss: | |||||||||
| Items that may be reclassified to profit or loss: | |||||||||
| Exchange differences from translation of foreign operations | 563 | (31,989 | ) | (18,275 | ) | (84,378 | ) | ||
| Other comprehensive loss for the period, net of tax | 563 | (31,989 | ) | (18,275 | ) | (84,378 | ) | ||
| Total comprehensive loss for the period, net of tax | (1,256 | ) | (33,277 | ) | (42,326 | ) | (102,658 | ) | |
| Total comprehensive loss for the period (Attributable to shareholders of the Parent) | (1,256 | ) | (33,277 | ) | (42,326 | ) | (102,658 | ) | |
| Basic and diluted loss per share | 9 | (0.01 | ) | (0.01 | ) | (0.19 | ) | (0.15 | ) |
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
| Amounts in thousands of U.S. Dollars | Note | September 30, 2023 | December 31, 2022 | ||
| ASSETS | |||||
| Non-current assets | |||||
| Intangible assets | 241,535 | 257,480 | |||
| Property, plant and equipment | 22,626 | 15,056 | |||
| Right-of-use asset | 25,896 | 9,891 | |||
| Deferred tax assets | 5 | 16,978 | 10,846 | ||
| Other long-term receivables | 407 | 571 | |||
| Total non-current assets | 307,442 | 293,844 | |||
| Current assets | |||||
| Inventories | 53,372 | 44,246 | |||
| Trade receivables | 46,908 | 52,743 | |||
| Other receivables | 2,465 | 2,562 | |||
| Prepaid expenses and accrued income | 12,361 | 7,786 | |||
| Cash at bank and in hand | 130,277 | 75,109 | |||
| Total current assets | 245,383 | 182,446 | |||
| TOTAL ASSETS | 552,825 | 476,290 | |||
| EQUITY | |||||
| Share capital | 6 | 32,221 | 30,988 | ||
| Other contributed capital | 6 | 616,646 | 514,133 | ||
| Reserves/(Deficit) | (76,863 | ) | (58,588 | ) | |
| Accumulated Deficit | (99,899 | ) | (75,848 | ) | |
| Total equity attributable to shareholders of the Parent | 472,105 | 410,685 | |||
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Lease liabilities | 7 | 21,751 | 7,322 | ||
| Deferred tax liabilities | 5 | 20,273 | 22,196 | ||
| Total non-current liabilities | 42,024 | 29,518 | |||
| Current liabilities | |||||
| Interest-bearing loans and borrowings | 7 | 3,739 | 2,113 | ||
| Accounts payable | 8,590 | 6,885 | |||
| Current tax liabilities | 1,320 | 1,389 | |||
| Other current liabilities | 10 | 25,048 | 25,700 | ||
| Total current liabilities | 38,697 | 36,086 | |||
| Total liabilities | 80,720 | 65,605 | |||
| TOTAL EQUITY AND LIABILITIES | 552,825 | 476,290 | |||
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
| Nine months ended September 30 | |||||
| Amounts in thousands of U.S. Dollars | Note | 2023 | 2022 | ||
| Operating activities | |||||
| Loss before tax | (30,181 | ) | (22,240 | ) | |
| Adjustments reconciling loss before tax to operating cash flows: | |||||
| Depreciation and amortization | 13,872 | 13,034 | |||
| Net finance income | (13,767 | ) | (16,425 | ) | |
| Loss on sale of assets | 138 | 401 | |||
| Share-based compensation expense | 6 | 8,141 | 5,826 | ||
| Other | (72 | ) | (94 | ) | |
| Changes in working capital: | |||||
| Increase in inventories | (11,117 | ) | (13,194 | ) | |
| Decrease in accounts receivable | 6,012 | 7,738 | |||
| Decrease in other current receivables | (5,557 | ) | (6,435 | ) | |
| Increase in trade payables | 1,734 | 3,281 | |||
| Decrease in other current liabilities | (103 | ) | (555 | ) | |
| Interest received | 5,032 | 40 | |||
| Interest paid | (539 | ) | (407 | ) | |
| Other finance income | 578 | — | |||
| Tax paid | (1,258 | ) | (937 | ) | |
| Cash flow used in operating activities | (27,087 | ) | (29,967 | ) | |
| Investing activities | |||||
| Purchase of intangible assets | (1,449 | ) | (1,060 | ) | |
| Purchase of property, plant and equipment | (11,618 | ) | (5,115 | ) | |
| Proceeds from sale of property, plant and equipment | 10 | — | |||
| Increase in other non-current financial assets | 159 | 56 | |||
| Cash flow used in investing activities | (12,898 | ) | (6,119 | ) | |
| Financing activities | |||||
| Proceeds from issue of share capital | 6 | 100,205 | 24 | ||
| Share issue costs | 6 | (5,026 | ) | — | |
| Payment of principal portion of lease liability | (1,929 | ) | (2,144 | ) | |
| Cash flow from/(used in) financing activities | 93,250 | (2,120 | ) | ||
| Net cash flow during the period | 53,265 | (38,206 | ) | ||
| Cash at bank and in hand at the beginning of the period | 75,109 | 118,096 | |||
| Net foreign exchange difference | 1,903 | (2,764 | ) | ||
| Cash at bank and in hand at the end of the period | 130,277 | 77,126 | |||
Reconciliations of adjusted gross profit to gross profit, the most directly comparable IFRS measure, by segment (unaudited):
| Three months ended September 30 | Nine months ended September 30 | |||||||
| Amounts in thousands of U.S. Dollars unless otherwise stated | 2023 | 2022 | 2023 | 2022 | ||||
| Kit | ||||||||
| Revenue | 23,797 | 13,395 | 47,841 | 24,535 | ||||
| Cost of goods sold | (3,955 | ) | (1,696 | ) | (8,688 | ) | (3,120 | ) |
| Gross profit | 19,842 | 11,699 | 39,153 | 21,415 | ||||
| Gross profit margin | 83.4 | % | 87.3 | % | 81.8 | % | 87.3 | % |
| Less: | ||||||||
| Depreciation charges | 269 | 142 | 605 | 410 | ||||
| Share-based compensation expenses | 82 | 42 | 194 | 122 | ||||
| Adjusted Gross Profit | 20,193 | 11,883 | 39,952 | 21,947 | ||||
| Adjusted Gross Profit % | 84.9 | % | 88.7 | % | 83.5 | % | 89.5 | % |
| Service | ||||||||
| Revenue | 16,904 | 15,132 | 42,842 | 49,623 | ||||
| Cost of goods sold | (6,722 | ) | (7,444 | ) | (18,732 | ) | (23,369 | ) |
| Gross profit | 10,182 | 7,688 | 24,110 | 26,254 | ||||
| Gross profit margin | 60.2 | % | 50.8 | % | 56.3 | % | 52.9 | % |
| Less: | ||||||||
| Depreciation charges | 622 | 605 | 1,722 | 1,888 | ||||
| Share-based compensation expenses | 108 | 23 | 263 | 112 | ||||
| Adjusted Gross Profit | 10,912 | 8,316 | 26,095 | 28,254 | ||||
| Adjusted Gross Profit % | 64.6 | % | 55.0 | % | 60.9 | % | 56.9 | % |
| Corporate / Unallocated | ||||||||
| Revenue | 3,450 | 3,245 | 10,361 | 7,805 | ||||
| Cost of goods sold | (2,588 | ) | (1,645 | ) | (7,833 | ) | (4,100 | ) |
| Gross profit | 862 | 1,600 | 2,528 | 3,705 | ||||
| Gross profit margin | 25.0 | % | 49.3 | % | 24.4 | % | 47.5 | % |
| Less: | ||||||||
| Depreciation charges | — | — | — | — | ||||
| Share-based compensation expenses | — | — | — | — | ||||
| Adjusted Gross Profit | 862 | 1,600 | 2,528 | 3,705 | ||||
| Adjusted Gross Profit % | 25.0 | % | 49.3 | % | 24.4 | % | 47.5 | % |
Reconciliation of constant currency revenue growth to revenue growth as reported under IFRS, the most directly comparable IFRS measure (unaudited):
We use the non-IFRS measure of constant currency growth, which we define as our total revenue growth from one fiscal year to the next on a constant currency exchange rate basis. We measure our constant currency revenue growth by applying the current fiscal period’s average exchange rate to the prior year fiscal period.
| Three months ended September 30 | Nine months ended September 30 | ||||||
| Amounts in thousands of U.S. Dollars, unless otherwise stated | 2023 | 2022 | 2023 | 2022 | |||
| Revenue | 44,152 | 31,772 | 101,045 | 81,963 | |||
| Revenue growth (IFRS) | 39.0 | % | 56 | % | 23 | % | |
| Foreign exchange impact | 1.4 | % | (9 | %) | (1 | %) | |
| Constant currency revenue growth | 37.6 | % | 68 | % | 24 | % | |
Reconciliation of consolidated adjusted gross profit to gross profit, the most directly comparable IFRS measure (unaudited):
| Three months ended September 30 | Nine months ended September 30 | |||||||
| Amounts in thousands of U.S. Dollars, unless otherwise stated | 2023 | 2022 | 2023 | 2022 | ||||
| Revenue | 44,152 | 31,772 | 101,045 | 81,963 | ||||
| Cost of goods sold | (13,265 | ) | (10,785 | ) | (35,253 | ) | (30,589 | ) |
| Gross Profit | 30,887 | 20,987 | 65,792 | 51,374 | ||||
| Gross Profit % | 70.0 | % | 66.1 | % | 65.1 | % | 62.7 | % |
| Less: | ||||||||
| Depreciation charges | 891 | 748 | 2,326 | 2,298 | ||||
| Share-based compensation expenses | 189 | 65 | 456 | 234 | ||||
| Adjusted Gross Profit | 31,967 | 21,800 | 68,574 | 53,906 | ||||
| Adjusted Gross Profit % | 72.4 | % | 68.6 | % | 67.9 | % | 65.8 | % |
Reconciliation of adjusted EBITDA to operating loss, the most directly comparable IFRS measure (unaudited):
| Three months ended September 30 | Nine months ended September 30 | |||||||
| Amounts in thousands of U.S. Dollars | 2023 | 2022 | 2023 | 2022 | ||||
| Operating income/(loss) | (7,647 | ) | (7,969 | ) | (43,947 | ) | (38,779 | ) |
| Add: | ||||||||
| Amortization | 2,748 | 2,708 | 8,245 | 8,530 | ||||
| Depreciation | 2,364 | 1,532 | 5,627 | 4,504 | ||||
| EBITDA | (2,535 | ) | (3,729 | ) | (30,075 | ) | (25,745 | ) |
| Management Adjustments | 1,369 | 189 | 2,874 | 990 | ||||
| Share-based compensation expenses | 3,124 | 1,808 | 8,141 | 5,962 | ||||
| Adjusted EBITDA | 1,958 | (1,732 | ) | (19,060 | ) | (18,793 | ) | |
