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908 Devices Reports Second Quarter 2024 Financial Results and Reiterates 2024 Revenue Outlook

Revenue increases 16% compared to prior year, driven by newly acquired handheld products

908 Devices Inc. (Nasdaq: MASS), a pioneer of purpose-built handheld and desktop devices for chemical analysis, today reported financial results for the quarter ended June 30, 2024.

"We delivered solid execution on a multitude of fronts in the quarter, including the acquisition and integration of RedWave Technology into our company. With an expanded handheld portfolio, we are now supporting both our new and existing forensics customers more efficiently,” said Kevin J. Knopp, CEO and Co-founder. “We also maintained a strong focus on operational excellence during the quarter and have begun to see early benefits of our increasing scale.”

Recent Highlights

  • Revenue of $14.0 million for the second quarter 2024, increasing 16% compared to the second quarter 2023
    • Handheld revenue was $11.1 million, increasing 26% year over year
    • Desktop revenue was $2.9 million, decreasing 9% year over year
    • Recurring revenue was $5.3 million, increasing 33% year over year
    • 38% of revenue was recurring revenue, driven by service and REBEL consumables
  • Gross margin increased 490 basis points to 53% for the second quarter 2024, partly due to timing of production but also as a result of scale across the business including higher handheld service revenues
  • Launched a quantification package that enhances our XplorIR handheld gas and vapor analyzer, enabling first responders to now identify and quantify nearly 5,000 airborne chemicals
  • Completed the commercial integration of RedWave Technology
  • Presented 13 posters at the American Society for Mass Spectrometry (ASMS) conference and were collaborators on three oral presentations with researchers from the University of Wisconsin-Madison and the National Institute for Bioprocessing Research and Training (NIBRT)
  • Appointed Michele M. Leonhart, former administrator of the U.S. Drug Enforcement Administration, to our Board of Directors

Second Quarter 2024 Financial Results

Revenue was $14.0 million for the three months ended June 30, 2024, a 16% increase over the prior year period. This was primarily driven by an increase in handheld devices revenue offset by a decrease in desktop devices revenue. The installed base grew to 3,067 devices with 143 handheld devices and 10 desktop devices placed during the second quarter 2024. Recurring revenue represented 38% of total revenues in the quarter.

Gross profit was $7.4 million for the second quarter of 2024, compared to $5.8 million for the corresponding period in the prior year. Gross margin was 53% as compared to 48% for the corresponding prior year period. Adjusted gross profit was $8.1 million for the second quarter of 2024, compared to $6.0 million for the corresponding period in the prior year. Adjusted gross margin was 58% as compared to 50% for the corresponding prior year period.

Operating expenses were $21.0 million for the second quarter of 2024, compared to $16.7 million for the corresponding prior year period. This increase was driven by $1.9 million in acquisition and integration costs, the inclusion of two months of operating expenses related to our RedWave acquisition, and stock-based compensation.

Net loss was $12.5 million for the second quarter of 2024, compared to $9.3 million for the corresponding prior year period. Adjusted EBITDA was a loss of $7.3 million for the second quarter of 2024, compared to a loss of $7.7 million for the second quarter of 2023.

Cash, cash equivalents and marketable securities were $77.4 million as of June 30, 2024 with no debt outstanding.

2024 Guidance

908 Devices continues to expect full year reported 2024 revenue to be in the range of $63.0 million to $65.0 million, representing 25% to 29% growth over full year 2023. This includes $11 million of expected revenue from RedWave Technology, representing 8 months of ownership.

Webcast Information

908 Devices will host a conference call to discuss the second quarter 2024 financial results before market open on Tuesday, August 6, 2024 at 5:30 am Pacific Time / 8:30 am Eastern Time. A webcast of the conference call can be accessed at https://ir.908devices.com/news-events/events. The webcast will be archived and available for replay for at least 90 days after the event.

About 908 Devices

908 Devices is revolutionizing chemical analysis with its simple handheld and desktop devices, addressing life-altering applications. The Company’s devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address some of the most critical problems in forensics, bioprocessing, pharma / biopharma, life sciences research and adjacent markets. The Company is headquartered in the heart of Boston, where it designs and manufactures innovative products that bring together the power of complementary analytical technologies, microfluidic sampling and separations, software automation, and machine learning.

Non-GAAP Measures of Financial Performance

To supplement the Company’s financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measures of financial performance are included in this release and presented with detailed reconciliations to comparable GAAP financial results in the tables below:

  • Adjusted Gross Profit is defined as gross profit excluding intangible amortization, acquisition and integration costs, restructuring charges (including the costs of severance), and non-cash expenses related to stock-based compensation.
  • Adjusted Gross Margin is defined as Adjusted Gross Profit expressed as a percentage of total revenue.
  • Adjusted EBITDA is defined as net loss excluding other income, benefit for income taxes, depreciation, intangible amortization, acquisition and integration costs, restructuring charges (including the costs of severance), non-cash expenses related to stock-based compensation, and costs associated with contingent consideration related to the Company’s acquisitions and for which the conditions for payment have not yet been achieved.

The Company’s non-GAAP financial results presented in this earnings release exclude certain costs that management believes do not have a direct correlation to future business operations, nor do the resulting charges recorded accurately reflect the performance of ongoing operations for the period in which such charges are recorded, nor do the resulting charges recorded accurately reflect the anticipated cash flows of ongoing operations, and as such, excluding these costs allows management to understand and evaluate core operating performance and trends. However, as there are no standardized methods of calculating these non-GAAP financial measures, the Company’s methods may differ from those used by other companies in its industry, and accordingly, the use of these measures may not be directly comparable to similar measures used by others, thus limiting their usefulness for purposes of comparison. Furthermore, these non-GAAP measures have certain limitations since they do not include the impact of certain expenses and cash flows that are reflected in the Company’s GAAP financial results. Accordingly, when analyzing the Company’s operating performance and guidance, investors should not consider non-GAAP measures in isolation or as a substitute for, or superior to, comparable financial measures prepared in accordance with GAAP. Rather, the Company believes that these non-GAAP financial measures, when viewed in addition to and not in lieu of reported GAAP financial results, provide investors with additional meaningful information to assess financial performance and trends, enable comparison of financial results between periods, and allow for greater transparency with respect to key metrics utilized internally in analyzing and operating the Company’s business.

Forward Looking Statements

This press release includes “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are forward-looking statements, including, without limitation, statements regarding the Company’s future revenue and growth. Words such as “may,” “will,” “expect,” “plan,” “anticipate,” “estimate,” “intend” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on management’s current expectations and involve known and unknown risks, uncertainties and assumptions which may cause actual results to differ materially from any results expressed or implied by any forward-looking statement, including the risks outlined under “Risk Factors” and elsewhere in the Company’s filings with the Securities and Exchange Commission which are available on the SEC's website at www.sec.gov. Additional information will be made available in our annual and quarterly reports and other filings that we make from time to time with the SEC. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it cannot guarantee future results. The Company has no obligation, and does not undertake any obligation, to update or revise any forward-looking statement made in this press release to reflect changes since the date of this press release, except as may be required by law.

908 DEVICES INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue

 

$

10,266

 

 

$

9,595

 

 

$

17,499

 

 

$

16,617

 

Service revenue

 

 

3,681

 

 

 

2,354

 

 

 

6,439

 

 

 

4,594

 

Contract revenue

 

 

100

 

 

 

145

 

 

 

100

 

 

 

370

 

Total revenue

 

 

14,047

 

 

 

12,094

 

 

 

24,038

 

 

 

21,581

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product cost of revenue

 

 

4,732

 

 

 

4,800

 

 

 

7,942

 

 

 

8,586

 

Service cost of revenue

 

 

1,823

 

 

 

1,448

 

 

 

3,601

 

 

 

2,718

 

Contract cost of revenue

 

 

74

 

 

 

52

 

 

 

74

 

 

 

99

 

Total cost of revenue

 

 

6,629

 

 

 

6,300

 

 

 

11,617

 

 

 

11,403

 

Gross profit

 

 

7,418

 

 

 

5,794

 

 

 

12,421

 

 

 

10,178

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

6,381

 

 

 

5,525

 

 

 

12,171

 

 

 

10,923

 

Selling, general and administrative

 

 

14,597

 

 

 

11,208

 

 

 

26,498

 

 

 

23,211

 

Total operating expenses

 

 

20,978

 

 

 

16,733

 

 

 

38,669

 

 

 

34,134

 

Loss from operations

 

 

(13,560

)

 

 

(10,939

)

 

 

(26,248

)

 

 

(23,956

)

Other income, net

 

 

943

 

 

 

1,522

 

 

 

2,644

 

 

 

1,955

 

Loss from operations before income taxes

 

 

(12,617

)

 

 

(9,417

)

 

 

(23,604

)

 

 

(22,001

)

Benefit for income taxes

 

 

69

 

 

 

71

 

 

 

139

 

 

 

122

 

Net loss

 

$

(12,548

)

 

$

(9,346

)

 

$

(23,465

)

 

$

(21,879

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders

 

$

(0.37

)

 

$

(0.29

)

 

$

(0.70

)

 

$

(0.68

)

Weighted average common shares outstanding

 

 

34,061,933

 

 

 

32,199,156

 

 

 

33,386,413

 

 

 

32,083,122

 

908 DEVICES INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

June 30,

 

December 31,

 

 

2024

 

2023

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents and marketable securities

 

$

77,383

 

$

145,682

Accounts receivable, net

 

 

10,987

 

 

8,989

Inventory

 

 

18,589

 

 

14,938

Prepaid expenses and other current assets

 

 

3,485

 

 

4,181

Total current assets

 

 

110,444

 

 

173,790

Operating lease, right-of-use assets

 

 

5,904

 

 

6,233

Property and equipment, net

 

 

3,556

 

 

3,342

Goodwill

 

 

40,220

 

 

10,367

Intangible, net

 

 

47,298

 

 

7,860

Other long-term assets

 

 

1,352

 

 

1,389

Total assets

 

$

208,774

 

$

202,981

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

7,610

 

$

9,904

Deferred revenue

 

 

11,954

 

 

10,629

Operating lease liabilities

 

 

2,153

 

 

2,016

Total current liabilities

 

 

21,717

 

 

22,549

Deferred revenue, net of current portion

 

 

9,528

 

 

3,929

Other long-term liabilities

 

 

21,170

 

 

11,012

Total liabilities

 

 

52,415

 

 

37,490

Total stockholders' equity

 

 

156,359

 

 

165,491

Total liabilities and stockholders' equity

 

$

208,774

 

$

202,981

908 DEVICES INC.

Reconciliations of GAAP to Non-GAAP Financial Measures

(Unaudited, amounts in thousands, except percentage and per share data)

In all tables below, totals may not add due to rounding

Reconciliation from Gross Profit (GAAP) to Adjusted Gross Profit (Non-GAAP) and Margin Percentage:

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

 

$

7,418

 

 

$

5,794

 

 

$

12,421

 

 

$

10,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible amortization

 

 

530

 

 

 

107

 

 

 

637

 

 

 

213

 

Acquisition and integration costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Restructuring

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

202

 

 

 

140

 

 

 

373

 

 

 

255

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Gross Profit (Non-GAAP)

 

$

8,150

 

 

$

6,041

 

 

$

13,431

 

 

$

10,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin Percentage (GAAP)

 

 

53

%

 

 

48

%

 

 

52

%

 

 

47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Gross Margin Percentage (Non-GAAP)

 

 

58

%

 

 

50

%

 

 

56

%

 

 

49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Loss (GAAP) to Adjusted EBITDA (Non-GAAP):

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss (GAAP)

 

$

(12,548

)

 

$

(9,346

)

 

$

(23,465

)

 

$

(21,879

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

(943

)

 

 

(1,522

)

 

 

(2,644

)

 

 

(1,955

)

Benefit for income taxes

 

 

(69

)

 

 

(71

)

 

 

(139

)

 

 

(122

)

Depreciation

 

 

500

 

 

 

368

 

 

 

918

 

 

 

738

 

Intangible amortization

 

 

693

 

 

 

219

 

 

 

913

 

 

 

437

 

Acquisition and integration costs

 

 

1,950

 

 

 

-

 

 

 

1,950

 

 

 

-

 

Restructuring

 

 

-

 

 

 

-

 

 

 

-

 

 

 

524

 

Stock-based compensation

 

 

3,096

 

 

 

2,578

 

 

 

5,739

 

 

 

4,744

 

Contingent consideration

 

 

-

 

 

 

65

 

 

 

-

 

 

 

230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (Non-GAAP)

 

$

(7,321

)

 

$

(7,709

)

 

$

(16,728

)

 

$

(17,283

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

We delivered solid execution on a multitude of fronts in the quarter, including the acquisition and integration of RedWave Technology into our company.

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