Bionano Genomics, Inc. (BNGO) Q3 2026 Earnings Call Transcript

Operator: Good day, and thank you for standing by. Welcome to Bionano Third Quarter 26 Financial Results Conference Call. At this time, participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 1-1 again. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Webb Campbell, Relations. Please go ahead.

Webb Campbell: Thank you, Stephanie, and good afternoon, everyone. Welcome to Bionano's Third Quarter 26 Financial Results Conference Call. On the call with me today are Albert A. Luderer, Chairman and Interim CEO of BioNano and Mark Adamchak, Bionano's chief accounting officer. After the market closed today, Bionano issued a press release announcing its financial results for the third quarter 26. A copy of the release can be found on the Investor Relations page of the company's website. Certain statements made during this conference call may be forward looking statements. Actual results may differ materially from such statements due to several risk factors and risks, some of which are identified in Bionano's press release and BioNano's reports filed with the SEC. These forward looking statements are based on information available to Bionano today, November 10, 2026, and the company assumes no obligation to update statements as circumstances change. During our call, we may refer to certain non GAAP financial measures which we believe provide useful information for investors. Reconciliations of these measures to GAAP can be found in our press release and slide deck. An audio recording and webcast replay today's conference call will also be available online on the Investor Relations page of the company website. With that, I will turn the call over to Albert.

Albert A. Luderer: Thank you, Webb, and good afternoon, everyone. I am pleased to be here with you all today to share our third quarter 26 results. Bionano delivered a strong third quarter. Our results reflect the trust our routinely used customer base places on our products and the continued global utilization of optical genome mapping or OGM, for discovering and analyzing diseases. Over the quarter, we saw momentum build across our business as well as the broader genomics community. Clinical adoption is what drives our results, and we saw progress on several fronts that make it easier for customers to bring OGM into routine practice. We expect that adoption along with greater use of both existing and new clinical sites, to remain the foundation of our growth moving forward. We continue to pursue our mission of transforming pathology, pathology, the field devoted to understanding the causes, progression, and impact of disease. Traditional methods for structural variant detection are costly, repetitive, labor intensive, and time consuming. By helping customers move to digital workflows, supported by our consolidated platforms, automation, and decision intelligence software we can provide a faster more efficient, and more informative way to analyze the genome. Today, I will walk through how we have been advancing toward that goal across our 4 strategic pillars. I would like to take a moment to revisit the framework that guides how we execute. In September 2024, we made a deliberate shift away from aggressive installed base growth towards profitable growth with our existing routine use users. By placing an emphasis on prospects most likely to become routine, high volume users, we have positioned ourselves to be a more focused, agile, and sustainable company. In practice, this is done through the following. First, to support and sustain our installed base of routine OGM and VIA software users. Second, increase OGM utilization by routine users by supporting menu expansion and improving ease of use with Via and Ionic adoption. Third, to build the support needed for OGM reimbursement and inclusion in medical society guidelines and recommendations. And fourth, to improve profitability and scalability through lower costs, higher volumes, and continuous improvement in product quality. So turning to our first and second pillars, which are focused on supporting our installed base and driving greater utilization of our products. Q3 26 flow cells sold were up 18% year over year at 9870 units. A record for any quarter. In short, our customers are processing more samples than ever and a large share of that added volume comes from laboratories bringing OGM into routine use. Now breaking down our revenue segments, consumable revenue was $4.7 million in Q3 26. Up 24% year over year driven by sales to existing customers in the Americas. Software revenue was 1.1 million in Q3 26. Down 31% year over year reflecting a lower number of Via software licenses sold in the period. Other revenue, which includes instruments and services was $2.5 million in Q3 26, up 24% year over year. Led by higher instrument sales to new customers. The continued move towards more recurring consumable driven revenue gives us a healthier and more predictable business and is evidence of our strategy and action. Also like to highlight the geographic profile of our quarter. Revenues in Europe, the Middle East, and Africa grew 14% year over year to 4.1 million up from 3.6 million a year ago, driven by growth in instrument revenue. Revenue in the Americas grew 35% year over year to 3.8 million Adoption of OGM is not happening in a vacuum. Its value is being recognized globally. As the investments we have made in evidence generation begin to translate into adoption. Regarding our second pillar, increasing OGM utilization by supporting software adoption and menu expansion, Customers continue to give us very positive feedback on our software and compute upgrades. That let them broaden their test menus and run more samples, and in some cases, have allowed them to double weekly cancer sample throughput with no change to their hardware. Our VIA software remains the gold standard for CNV analysis on microarrays and we continue to see adoption among NGS and long read sequencing labs. Customers who use VIA without OGM give us a base of software revenue, and this is often the first step towards using more of our platform. Ionic, our system for producing high purity DNA and RNA, also remains a key focus, supporting both OGM and NGS workflows at scale. We are increasingly seeing our software offerings as an on ramp to broader OGM platform adoption. As we begin to see the transition of Array-VIA customers to OGM, we will eventually recognize some decline in software revenue but expect to offset this loss by bringing these customers deeper into our OGM ecosystem. As we focus our resources on the largest opportunities in clinical OGM, we view the migration of these customers to OGM as a critical step forward. for more routine use. Now highlighting our third pillar, building support for OGM reimbursement and inclusion in medical society guidelines, An important development this quarter was MolDX’s proposed local coverage determination, or LCD, for OGM. In late August, MolDX published a proposed LCD that set Medicare coverage in the Medicare Administrator Contractor jurisdictions that follow MolDX, representing 31 US states. This coverage determination establishes criteria for OGM based genome wide detection of copy number alterations and structural variants in hematologic neoplasms. The public comment period has now closed, and we look forward to the final determination. Today, Medicare is the largest payer for cancer care and about 60% of new cancer diagnoses are in Medicare eligible patients. MALDEC states also represent roughly 61% of the US population, and private insurers often write their policies in line with Medicare coverage. For laboratories, a clear coverage pathway lowers the financial risk of validating OGM and moving it into routine use. Further supporting the broader adoption and utilization that drives demand for our products. This builds on the reimbursement foundation we described last quarter, As we previously noted, the AMA has approved 2 category 1 CPT codes for OGM. 1 in hematologic malignancies, and another for constitutional genetic disorders. Additionally, CMS has established reimbursement rates for both codes The coverage determination from MolDX would add a clear path to Medicare coverage for OGM in hematologic malignancies. Together, we believe these developments are creating meaningful momentum for OGM and make it easier for customers to become routine users. Another milestone this quarter came in New York, where 2 leading academic centers are now bringing OGM into their clinical laboratories. The New York State Department of Health approved OGM based laboratory developed tests at University of Rochester Medical Center covering genetic disorders, reproductive disorders, and hematologic malignancies. Memorial Sloan Kettering Cancer Center then launched OGM based hematologic malignancies. Testing following state approval. State approval is a significant step allowing institutions to offer OGM testing in New York. As more leading cancer centers adopt OGM in their clinical workflows, our base of routine users expands, subsequently driving utilization of our products. Now, expanding on our third pillar, the growing body of evidence continued this quarter with 3 new independent peer reviewed publications showing the potential clinical value of OGM in high risk myeloid cancers. The first published in Modern Pathology by researchers at MD Anderson, used OGM to study 332 samples from subjects with myelodysplastic syndromes or MDS. OGM identified chromoanagenesis, a catastrophic single-event genomic restructuring process, in 15.9% of cases overall. And 17.6% of newly diagnosed subjects These subjects had a median survival of 9.9 months while the median survival for the rest of this group was much higher as it had not been reached during the study. Researchers noted that this information could help doctors identify high risk patients earlier and consider more aggressive treatments. The second study published in the International Journal of Cancer by the University of Oulu, Finland, analyzed 48 samples of cytogenetically normal acute myeloid leukemias. The study found that OGM detected clinically relevant structural variants in 46% of cases classified as normal by conventional karyotyping, and the presence of OGM detected abnormalities was associated with worse survival. in these individuals. The third study published in NPJ Precision Oncology by the Josef Carreras Leukemia Research Institute in Spain studied subjects with therapy related myeloid neoplasms and younger onset MDS. It found that OGM produced a result in every sample including all 8 where conventional banding failed and identified a 134 genomic alterations. OGM-defined genomic groups showed significant difference in overall survival with chromoanagenesis emerging as the strongest independent predictor of inferior overall survival. These publications join the t cell acute lymphoblastic leukemia study we highlighted last quarter, also published in modern pathology and conducted by researchers at MD Anderson and Johns Hopkins. Together, these publications, along with the 365 studies published year to date, give us confidence that the expanding body of clinical evidence is a leading indicator of future adoption and utilization of OGM. Turning to our fourth pillar, continue to make progress on profitability. In 2023, our adjusted gross margin was in the low 20% range. Since then, we have steadily improved it. And in the third quarter, we generated a gross margin of 48% compared with 46% in the same quarter last year. We have applied the same discipline to our cost structure, Operating expenses decreased 12% year over year, to $10.5 million and adjusted operating expenses decreased 9%. To $8.8 million. As revenue grows and our mix shifts towards higher margin consumables and software, We expect these trends to carry us towards an adjusted EBITDA neutrality. By the end of 2027. So I will turn the call over right now to Mark Adamchak, our chief accounting officer, to review our Q3 26 financial highlights and discuss our expectations for Q4. and the full year of 2026. Mark?

Mark Adamchak: Thanks, Albert. Revenue for the third quarter of 26 was 8.3 million up 12% compared to Q3 25. We sold 9870 nanochannel array flow cells up 18% compared to Q3 25. We have been continuously investing in production throughput, And as we reach the end of the year, we expect these constraints to ease. Turning to profitability. Adjusted gross margin for the third quarter of 26 was 48%, compared to 46% in Q3 25. Third quarter 26 adjusted operating expense was 8.8 million compared to $9.7 million in Q3 25. We ended the quarter with $8.7 million in cash, cash equivalents and available for sale securities, including a $500,000 subject to certain restrictions. Turning to guidance. For the full year 2026, are we are reiterating our revenue guidance of $31 million to $33 million representing growth of 9% to 16% over 2025. Within that range, we expect to land near the midpoint. We are encouraged by the momentum across our business and excited for the path ahead for Bionano. With that, we will turn the call back to the operator. Stephanie?

Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press 1-1 on your telephone and wait for your name to be announced. To withdraw your question-- Our first question comes from Yi Chen of H. C. Wainwright.

Yi Chen: Hey. This is Katie on for Yi. Looking at the September framework of $50 million to $54 million in 2027 revenue, and approximately breakeven adjusted EBITDA exiting Q4? Does that remain in your operating plan? What are the largest contributions to that acceleration from the current run rate and which are supported by customer implementation schedules versus milestones still ahead?

Albert A. Luderer: Yeah. Thanks for the questions. So our main focus for 2027 is going to be to bring this company to EBITDA neutral. So that we can move into 2028. In a highly profitable mode. That is our main focus. Driving that is gonna be our controlled expenses and also very rapid top line growth. So in September when I spoke at the Wainwright conference, I presented a vision of what we might be in the future. And I wanted this to be a guideline for where this company and its underlying technology can be and what it can do as it transforms medicine. So there are some large customers that are starting to come online for us, and we-- they will be part of the majority of our growth as well as some of the supply constraints that Mark had mentioned in our production, which has really kept us from meeting a very strong customer demand this year.

Yi Chen: If I could follow on real quick. For the supply constraints, can you elaborate a little bit more what remains to meet that timeline? The backlog is cleared, will current capacity support the flow cells for your 2027 plan?

Albert A. Luderer: Yeah. The-- yeah. The. there is a long lead time for some of our most critical components notably the Right. The silicon wafer that has all the nanochannels. So yes, we have we have taken special effort to build up that supply and be able to essentially double our capacity that we have today. And we will do that about halfway through midyear next year. That will more than meet the capacity for 2027 that we are projecting and also most of 2028. So we think we have that in good shape, and we think we will be essentially free and clear of any back orders by the end of this year. that is our plan right now.

Yi Chen: Perfect. Thank you.

Albert A. Luderer: Pleasure.

Operator: Thank you. Thank you. Our next is from Michael Okunewitch from Maxim Group. Your line is now open.

Michael Okunewitch: Hey, guys. Thank you so much taking my question and congrats on the progress. You posted some quite strong growth in terms of the flow cell utilization. So I wanted to see if you could talk a little bit about a bit about what the main drivers are for that particular increase. And if that is at all tempered by some of those supply constraints you are facing.

Albert A. Luderer: Glad to expand on that, Michael. And thanks for the question. What we all believe right now is the first of all, the very strong clinical evidence that is that is global in nature backed up by the CPT coding and now MolDX's favorable Determination for hematologic oncology. We think that is a large driver of this And we have several sites that have become major users, and we see some that are in queue to become also as large as some centers that we have. And I think it is mostly due to the fact they can offer the service and have a very good shot at getting paid for their services. So I think that is a huge part of it, Michael.

Michael Okunewitch: Thank you. Appreciate that. And then also wanted to congratulate you on the news with Sloan, particularly exciting stuff. And I want to see if you could talk just a little bit about how Memorial Sloan Kettering plans to implement OGM through Bionano Labs. Is this a pilot program, or are they implementing it more broadly into their routine workflows?

Albert A. Luderer: that is a great question, and I am really not prepared to answer that. But we can get back to you on that. So I think they received authorization to offer the service back right around the Wainwright conference time, early September. So as with all these things, it takes a while to get going and then integrate into clinical service and have the ordering physicians start to get used to and understand this new type of information that they are now privileged to see on these patients. So we have seen that adoption take a little bit of time, but at Sloan Kettering, I do not think it will take very long.

Michael Okunewitch: Thank you. And 1 last 1 for me before I hop into the queue. I want to see if you could just provide a bit more color on what the customer profile looks like for Bionano Labs versus actual internal adoption of OGM through a machine?

Albert A. Luderer: Well, our Bionano lab is. it really exists to help us understand how our customers are experiencing our products. And while we do offer a commercial offering in the muscular dystrophy. We currently do not have any hematologic product. But that is part of our forward planning process that we are considering. So it is really. That laboratory functions really as an in house experience so that we can have real time experiences that our customers have, which we cannot always get.

Michael Okunewitch: Alright. Thank you. I appreciate the additional clarity. And once again, congrats on all the progress.

Operator: Thank you. This does conclude the Q&A session for today, We thank you for your participation in today's conference. And this does conclude the program. You may now disconnect.

Albert A. Luderer: Thanks, Steph. Thank you.