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spk01: Good day and thank you for standing by. Welcome to the O-Link Proteomics third quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, John Medina, Vice President, Investor Relations and Capital Markets. Please go ahead.
spk04: Thanks, Catherine, and good morning, everyone. Thank you all for participating in today's conference call. On the call from O-Link, we have John Hymer, Chief Executive Officer, Carl Raymond, Chief Commercial Officer, and Oscar Hjelm, Chief Financial Officer. Earlier today, O-Link released financial results for the third quarter ended September 30th, 2022. A copy of the press release and an updated corporate presentation are available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the U.S. federal security laws, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. For a list and description of the risks and uncertainties associated with O-Link's business, please refer to the risk factors section on Form 20F, Commission File Number 001-40277, filed with the U.S. Securities and Exchange Commission on March 17, 2022, and in our other filing with the SEC. We urge you to consider these factors, and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also in our remarks or responses to questions, management may mention some non-IFRS financial measures. Reconciliations of adjusted gross profit and EBITDA, constant currency revenue growth, and certain other non-IFRS financial measures. to the most directly comparable IFRS measures are available in the recent earnings press release available on the company's website. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 10, 2022. O-Link disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise, except as required by law. And with that, I'll turn the call over to John.
spk02: John?
spk04: Thank you, Jan.
spk02: Good morning, everyone, and thank you for joining Oling's third quarter 2022 earnings call. I'll begin with a quick review of the quarter's accomplishments and recent milestones, then wrap things up with our outlook for the remainder of the year. I'll then turn the call over to Carl for details on our considerable commercial progress, and then to Oskar for more details on our performance and guidance. 3Q was another strong quarter for O-Link, benefiting from our industry-leading execution and building on a very positive start to the year. We believe we are well-positioned with customers and prospects across biopharma and academia. As we look at broader industry dynamics and macro cross-currents, O-Link's execution remains strong. Our overall customer base appears healthy, with solid project funding and strong interest in proteomics. We delivered quarterly revenue of 31.8 million, 59% growth over the third quarter of 2021. The quarter was highlighted by strong growth from Explore Kits and Kits revenue overall, demonstrating strong progress in our product mix goals. Other highlights included a record number of Explore externalization during the quarter and strong performances in low and midplex with Signature Q100 and Target. O-Link has become a driving force in the modern proteomics field and is increasingly viewed by the industry as an enabling platform to derive unprecedented insights and value from protein data, leveraging the decades worth of genomic efforts pursued by scientists. We continue to see an expansion of use cases for proteomics with customers throughout the entire O-Link portfolio. This includes explore users adopting the signature and target platforms as their work demands, and low-flex users moving towards high-flex as well. Over time, we hope to define a new approach to treating disease, provide new options for healthcare providers and patients, and to improve healthcare overall. O-Link is driven not only to meet today's needs for proteomics customers, but also to enable new use cases and new ways to unlock the value of proteins. We want to highlight a few such recent initiatives. Last month, we announced the launch of O-Link Insights, an open access platform for the global research community and O-Link customers to share data and insights to accelerate proteomics. It's been created from the ground up to address the complex challenges of proteomic data analysis, introducing a modern and user-friendly interface to explore O-Link MPX data. which will help deliver on the urgent scientific questions asked by the community. The expectation is to accelerate the strategic use of proteomics in the scientific field with faster and more accurate results, shortening time to the next experiment. We're also launching a fully flexible made-to-order product that will allow customers to create small protein panels from our library. Carl will cover this shortly. And please stay tuned for more details that are invested for more on both initiatives. Lastly, we're currently tracking ahead of our R&D goal to generate 4,500 validated PEA assets this year. Following extensive conversations and feedback from customers, we've accelerated our strategy to expand our protein library, increase throughput, and simplify workflows within the O-Link platform. We've incorporated customer feedback into our development plan while maintaining the same level of exquisite data quality that O-Link is known for. We are excited about the progress we've made and look forward to sharing more information as timelines get firmed up. The O-Link scientific community also reached another important milestone, the achievement of more than 1,000 thoughtfully executed research studies published in high-impact journals around the world. using PEA technology in every major therapeutic category, from research and discovery to the downstream clinical settings. In other scientific venues, O-Link's technology was also on display at ASHG in October, with multiple abstract and presentations featuring PEA across multiple major conditions. This includes high interest in O-Link-hosted and co-hosted industry sessions with rooms filled to capacity and even standing room only. In October, at the European Multiple Sclerosis Meeting Extrins, our partner OKTAVE Bioscience presented multiple abstracts and data sets as well. OKTAVE also announced the commercial launch of their first-in-class precision care solution for multiple sclerosis, a multidimensional tool that incorporates an 18 biomarker signature underpinned by TEA technology. We will have much more to say about the science at Olink at next Monday's Investor Day and hope you'll join us to learn more. Of course, our exemplary results would be impossible without the incredible talent and drive from people at Olink. It's due to their determined and combined efforts that we can achieve results like this and look forward to a bright future. And we remain committed to growing this already broad and deep talent pool. We started the third quarter with 516 employees and reached 548 upon entering the fourth quarter, including 208 full-time employees on the commercial team. These efforts also include the strengthening expansion of our management team for continued leadership in the modern proteomics era, including announcement, announcing the appointment of Carl Raymond, the president. Our plan to hire a new chief commercial officer. strengthening our already impressive supply chain capabilities with Fredrik Netzel and appointing Anna Marcel, Chief Operating Officer, effective at the end of this month. Turning to our expectations. To date, O-Link's execution has been extraordinary and our customers continue to appear healthy. However, given that multiple global economic headwinds have arisen over the course of the year, including foreign exchange, inflation, war and other dynamics, our fourth quarter outlook now contemplates our updated outlook on these issues. We now expect full year 2022 revenue to be in the range of 138 to 142 million US dollars, representing yearly growth of 45 to 49%, with constant currency revenue expected near the top end of its range, and reported revenue expected near the bottom end of this range when factoring in the considerable FX headwinds we faced this year. By either calculation, we consider this exceptional performance into tremendous commercial opportunity still in its early innings. I'll now turn the call over to Carl to provide a few more details on the quarter. Carl?
spk08: Thank you, John. Third quarter revenue grew 59%. on a yearly basis, highlighted by strong performance in our kit business and explore platform. This total is comprised of $13.4 million in kits revenue, $15.1 million in analysis services revenue, and $3.2 million in other. Q3 kit mix improved strongly from Q2 and was the highest since our IPO, reaching 42% of total revenue and growing 265% year over year. Other revenue is up 174% on a yearly basis with signature representing the largest contributor to dollar growth. Third quarter growth was driven by strength across our entire customer base with high level of interest from biopharma and academic customers. We're optimistic about the prospects for Olink through the balance of 2022, but we've contemplated a more uncertain macro environment as we head into the last couple months of the year. Starting with Explore's strong performance, total Explore revenue of $21.7 million, with 68% of our total revenue in Q3, and on a trailing 12-month basis represented 68% of total revenue as well. On Q3 Explore externalization, the addition of 11 installations was the most ever during a single quarter, and we ended Q3 with 40 total. These installations in aggregate represent approximately 840,000 in annual sample volume potential, and we achieved roughly 725,000 in average customer pull-through during the 12 months ended September 30, 2022. This group includes installations at an increasing number of service providers as well, a customer segment that has become very interested in bringing O-Link into their product portfolios. While our presence with service providers is still in its early phases, we believe this growing appetite bodes well over the long term. We also delivered 12 new signature instruments to customers for a total of 63 by the end of Q3. Signature adoption continues to show our strength in the mid and low-plex segments and uptake by new and existing customers. Signature and Explore are still relatively new, and we think their early successes point to the incredible opportunity that still lays ahead of us across all segments of our business. To build further on that opportunity, we're excited about two significant product introductions that expand the capability and value of our portfolio, O-Link Insight, which was launched in October, and the soon-to-be-launched O-Link Flex platform. John has already provided some background on Olink Insight, and I'll provide a little bit on Olink Flex, which is a customizable mix and match panel building product that allows customers to select and combine up to 21 human proteins from a library of over 200 into one biomarker panel. Both new products are eagerly anticipated by our customers, and we'll provide more detail next week during our Investor Day in New York City. in person or virtually, we hope you can join us. Our strong results were driven by solid performances and contributions from every member of the commercial group, and I'd like to thank the entire team for their considerable efforts yet again. We believe the drive for new tools and new insights to improve human health is only growing, with modern proteomics and Olink NPX data specifically representing a key enabling technology to drive a new era of biological understanding. I'll now turn the call over to Oscar to provide additional financial details as well.
spk03: Thanks, Carl, and hello, everyone. Before I start, I'd like to make a quick reminder that next week, in addition to our investor day on November 14th, we will also be at Canaccord Genuity MedTech Diagnostics Forum on November 17th. We hope to catch you at one of these events while we are in New York City. Third quarter revenue growth was strong once again in Q3. up 59% on a yearly basis, even with more sizable FX headwinds than we had anticipated at the start of the year. We continue to invest in line with our strategic plan and adjusted EBITDA was negative 1.7 million for the third quarter as compared to negative 7.5 million for the third quarter of 2021. As Carl mentioned, at the end of Q3, we had 40 externally placed revenue generating Explore installations Even with this significant number of new externalizations, average customer pull through with these customers over the last 12 months was a strong 725,000, an indication that the quality of our Explore externalization remains high. As a reminder, we've seen average annual pull through for Explore range from 500,000 to 750,000 per customer, with individual spend ranging from less than 100,000 to multimillion dollar orders. We continue to expect variability in quarter-to-quarter pull-through, which could be further impacted by our customers' spending seasonality. But overall, we anticipate continued strong growth. Driven by a very strong performance by Explore, KIT's revenue for the third quarter grew 265% to $13.4 million, as compared to $3.7 million for the third quarter of 2021. Analysis of service revenue in Q3 was flat year-over-year at $15.1 million. The mix of kit versus another service revenue improved significantly from Q2 to Q3, from 26% of total revenue to 42% of total revenue, respectively. Other revenue was $3.2 million for the third quarter as compared to $1.2 million for the third quarter of 2021. Growth in other was driven primarily by signature Q100 instruments. By geography, revenue during the third quarter of 2022 was $12.4 million in America's 15 million in EMA and 4.4 million in China and rest of the world. Consolidated adjusted gross profit was 21.8 million or 69% of revenue in the third quarter versus 13.1 million or 66% in the third quarter of 2021. Adjusted gross profit margin for kids was 89% in Q3 of 2021 as compared to 91% in Q3 of 2021. Q3 adjusted gross profit margin for analysis services was 55% as compared to 59% in Q3 of 2021. The decline in service margin was driven primarily by deliveries to the UKB and lower lab activity during the summer months. As we exited the third quarter, service margin reverted to the normalized levels we have observed historically. Two-quarter variation should be expected. We expect the combined positive impact of increasing kit mix, explore 3K adoption, and our antibody library to have a positive impact on gross margin over the long term. Adjusted gross profit margin for other was 49% in Q3 as compared to 74% for Q3 2021. The decrease was due to a mixed shift in revenue stemming from the growth of signature revenues. Total operating expenses for the third quarter of 2022 were 29 million as compared to 24.1 million for the third quarter of 2021. The increase was largely due to continued investment in Ohlins commercial organization and research and development. Operating expenses are broken out as follows. Selling expenses for Q3 2022 were 11.2 million versus 9 million for Q3 2021. Administrative expenses were 12 million versus 11.1 million for Q3 2021. And R&D totaled 6.4 million and 4.2 million for Q3 2022 and Q3 2021 respectively. Other operating income was 725,000 in the latest quarter as compared to 276,000 in Q3 2021. Net loss for the third quarter was 1.3 million as compared to a net loss of 5.5 million for the third quarter of 2021. Net loss per share was a cent as compared to a net loss per share of five cents in the third quarter of 2021. We ended a quarter with a strong cash balance of 77 million in cash and cash equivalents. Our strong cash position and efficient use of capital is an indication of our ability to responsibly balance investment needs with a positive ROI. And consequently, we believe we remain sufficiently capitalized to achieve our return to profitability to fund our existing strategic plan moving to our outlook the top of our 2022 full year revenue guidance calls for growth of approximately 49 on a constant currency basis and roughly 45 at the bottom of the race when incorporating fx headwind based on today's rates to provide some background we offset approximately 2 million of fx headwind during the first nine months of the year and now expect a significant amount of FX headwind in the fourth quarter as well. Given the movements of the US dollar, we believe providing this additional layer of analysis is useful for investors as we enter the most important period of our fiscal year. I would also like to highlight that our FX exposure is somewhat impacted by the mix of revenues and demand for products and services around the globe, which does vary from quarter to quarter. the macro-related impact from foreign exchange volatility, war, and global monetary policy, we believe O-Link's business is performing very well. And as we consider 2023, we believe we remain well positioned for a return to profitability and continued strong growth. I'll now turn the call back to John for his concluding remarks.
spk02: Thank you, Oskar. Thank you, Carl and Jan. We believe our leadership position in Proteomics continues to grow. with O-Link seeing increasingly broad adoption across Plex and across customer segments and across the globe. At this point, we'll open up the call for questions. Operator?
spk01: Thank you. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Puneet Sauda with SVB. Your line is open.
spk07: Yeah, hi, John. Thanks for taking the question. So first one, really, I mean, first of all, congrats on the strong quarter here. The Explorer installs were really impressive in the quarter. I don't think you had 11 installs in any quarter since the launch of this product. So tell us a bit more about that. What drove that? And does it mean that there's a little bit of a pull forward here? And also, what does it mean for 2023 with the rising mix of revenue towards kits? Maybe if you can talk about that. And then just briefly around, what does this mean for the pull through sort of longer term?
spk02: Great. Thanks, Puneet. And yes, much appreciate your comments on the past quarter. I mean, truly impressive, right? You know, every KPI one could measure us on, we certainly deliver on or above. So yeah, we're super excited by 3Q. And definitely on the Xplore installations as well. So maybe Carl can add to those comments. I don't know, Carl, maybe you can just answer Puneet directly on sort of how you view the 11th, which for sure is the biggest we've done in one quarter and why that is. Yeah, absolutely.
spk08: Hi, Puneet. Yeah, so as we've talked about in prior quarters, it's a bit nonlinear. And so I think what this reflects is execution on our strategy, which we've spoken about in terms of shifting to more of a product versus a service business. And I think you could see that growing in our prior performance in terms of explore demand, how high that is, and that's sort of permeating now to customer adoption. So you had asked about pull forward. I think, again, there's a bit of lumpiness, so I don't think I would look at it that way. I think we'll again, over a shorter period of time. It doesn't look linear. I think if you stretch that over a longer period of time, you'll see that trend continue to rise. I mean, it's still early days, talking about 40 sites when we're considering the fact that there's thousands of sequencing instruments out there in the wild. So I think that, again, represents a tremendous amount of opportunity as we continue to look ahead. And then the pull-through thing, just gets tricky because for the same non-linear comment that I made there, so as we have newer users ramping up their capabilities, that'll suppress the number a bit, and then as they become productive and take in more demand, then it'll grow those numbers a bit. But so far, again, we're seeing consistent sort of high-quality customers in that space, and that's been very good to the business and on points with our strategy.
spk07: Okay, super helpful. And then if I could follow up, a question that we're getting this morning is, you know, your timing to reach profitability and the need to drive investment into growth, obviously you're seeing a strong traction here with, the kitted products and with Explore. So the question I'm getting is, given the cash position you have now, could you talk a little bit about your timing to reach profitability or need for any capital additions? And then last one, if I could just squeeze in, with Illumina's lower cost per gigabase, what does that mean for your business with the new X-Plus launch for Illumina? How do you think that customers will utilize that to drive proteomics and O-Link experiments? Thank you.
spk03: Hey, Pernice, it's Oscar here. So I'll take the first one and then I'll hand the second more scientific part over to John. So, I mean, on our cash position and sort of on our path to profitability, we, I think, remain sort of very confident and sort of in our plan for next year to work to profitability. I think if you sort of dissect the third quarter results, you can see sort of, you know, quite significant leverage on the cost base, especially sort of on the sort of non-commercial, non-R&D side. And also with the sort of kit mix improving, driving sort of margin expansions on the gross margin side, you know, that sort of leap into 2023 and profitability is sort of, you know, very much within our plan. And then we, you know, plan to sort of invest a bit further into 2023 and revert to cash flow positive in 2024. So there is nothing sort of within the current scope of our plan to sort of raise additional capital. And we're comfortable, you know, where we are today.
spk02: And John here, it's a very good question and important one. So as you know, we have an agnostic strategy. Our technology is unique in that sense that you could, for Explorer, use any sequencer out there, really. It's counting those DNA barcodes. And of course, we are super excited, along with our customers, when you see improvements in MJET technology and also some competition to be super transparent, driving costs down. So what it means for our customers is that the total price of the experiments are going down, which is very good news, and they could expand their projects or run more on the same budget. So I thought what Illumina has recently communicated was super impressive, very, very interesting, exciting developments on their technology. which will be super helpful for O-Link and our customer base. So all good news.
spk07: Great. Thanks, guys. Congrats.
spk02: Thank you.
spk01: Our next question will come from Matt Sykes with Goldman Sachs. Your line is open.
spk05: Hi. Thanks for taking my questions. Good morning. Congrats on the quarter. Maybe just some questions I'm getting from investors just regarding the guide for this year, just the narrowing of that guide and the lowering of the top end. You've kind of contemplated the FX in there with the CER results at the top end. But how should we think about your factoring in the macro headwinds in sort of narrowing that guide versus sort of any kind of pull forward of orders into Q3 that you might have expected in Q4? Is this more about factoring in
spk02: macro headwinds in terms of the lowering the top end or were there some change in order dynamics that we should be aware of hey good morning matt john here i i can start answering and then if carl wants to fill in p2 so so and and first of all thanks right yeah we're super super happy with 3q uh no so uh based on on the the guidance uh we just want to be as clear as possible to the investor community And, you know, we've performed extremely well during all the macro and what goes on on the global economy, right? But FX is truly a headwind for us. And then we want to just be very clear about that. And so, as we said in our script, right? We feel very good about where we're at on the current currency, right? But then when we factor in SX, we thought this was the right thing to do on the topper end of the range. So Carl, I don't know. I mean, basically what was said in the script, right, is that we feel very good about what we're hearing from our customer base, that they continue to investing in proteomics and in particular in O-Link. So I don't know, Carl, if you want to expand further on that.
spk08: Yeah, sure. And Matt, yeah, well, what we're hearing from our customers right now is that, you know, their budgets are not affected by, at least for their proteomic projects. So that remains largely intact. However, I mean, being cognizant and prudent regarding the macroeconomic environment, and certainly I think something a lot of companies rely on this time of year is looking at sort of budget slush. Um, you know, that's to be determined still that tends to come into focus a little bit better late, uh, late November, um, early December. So, um, and I think actually the positive, um, sort of aspect of all of that too, is we've been sort of, as we've gone through this transition to more of a product business, we're, you know, smoothing, um, the quarters out a bit, um, which I think is something, um, that was commented on in prior quarters about the seasonality of our business. So we see that as a positive as we shift the kits. It smooths the quarters out just a little bit better. But overall, again, the macroeconomic environment is an item to be determined. But again, as John noted, We're not getting any specific signal, though, from customers right now that their budgets are affected for their proteomic work.
spk05: Great. Thanks, John and Carl. Appreciate the color. And just on the installation number, which was pointed out was very strong, you've talked in the past about some of the recent Explorer installations being more high-throughput customers, as evidenced by the strong pull-through numbers that you have. Could you maybe talk about this set of 11 installations? installations that you had in the quarter, is it still trending with the high throughput customers? So should we expect that high consumable pull-through number to likely continue? And is there like a lag period of these 11 when they get ramped up and when we'll actually see it show up in that pull-through?
spk08: Yeah, I can comment on that. So, yeah, I mean, we continue to see customers, yes, who have a lot of capacity. Obviously, there's quite a bit of variation customer to customer, so it's hard to be overly generalized. Some of them are quite high throughput. Some of them are on the lower end of throughput. But there is certainly a period, I think, of sort of adoption and ramping and scalability. And I commented on that a little bit earlier. So I think when you look at those average pull-through numbers, as we have surges of adoption, that will sort of suppress those numbers a bit. And then as they become mature, that'll grow those numbers again. So we're not predicting any significant changes there. I think the best way to continue to look at it is sort of this last 12-month type of figure, which helps to sort of smooth that view out a little bit.
spk05: Got it. And just last question, just on low and mid-plex, clearly the signature placements were also fairly strong. Could you just maybe talk about the dynamic that you've spoken about in previous quarters about customers, particularly in the biopharmacide, moving across Plex, and are you seeing greater adoption of those customers moving throughout the Plex spectrum?
spk08: Yeah, I can comment on that one too. Yeah, so again, yep, very similar comments to prior. I think we see about Probably north now of half of our Explorer customers are also MidPlex customers as well, and a growing appetite for adoption. And with the Flex launch, I think we're going to see a nice strong tailwind as we sort of move into a part of the market space that we haven't been significantly competing in prior. So I think that's only going to expand that opportunity and really only strengthen, you know, the O-Link story, which is very unique in terms of our ability to scale from high flex to low flex. And now to be able to do that in a very flexible way, as I can tell you, is very attractive for our customers.
spk05: Great. Thanks very much for the time.
spk08: Thanks, Matt. Thanks, Matt.
spk01: Thank you, and our next question comes from Tejas Savant with Morgan Stanley. Your line is open.
spk06: Hey, guys. Good morning. I want to follow up on some of the guidance questions earlier. John, you had 49% reported growth at the midpoint of your last guide, and I think you'd embedded a single-digit FX headwind, so that would imply constant currency growth in the 50s. That is now 49%, right? And I know you mentioned some of these macro factors, but first of all, can you clarify what was the constant currency growth in your prior guide and help us bridge that number versus the 49% that you are now calling for in terms of these macro factors?
spk03: So I think sort of, I mean, in our previous guide, and I think we've been sort of very clear that sort of, you know, we viewed Prior, earlier in the year, the guidance was largely organic. And clearly, the strengthening of the dollar since is very different from at that point in time when we gave that guidance. So now I think the 49% of organic growth that we point to today is very similar to how we've guided previously. And now it's just fine-tuning that as we close out the year and drawing people's attention to the FX headwinds and sort of directing that to sort of the reported growth rate of 45%.
spk06: Got it. Okay. Now, in terms of just, you know, the impressive new Explore signings in the quarter, how are you thinking about sort of, you know, any sort of kit stocking dynamic related to that? And how long do you think it will take for these new activations essentially before they start reordering kits?
spk02: Yeah, no, Carl, maybe you can answer that question twice here, but maybe you can do it again.
spk08: Yeah, I think there's – yeah, Teos, there's a little bit – there's variation, I think, in that. So, again, it's hard to overgeneralize. You know, we have some customers, for sure, you know, who are taking some kits for projects. We'll have those in stock. Others who, you know, have actually only taken a minimal amount to start their training, whatever, and then to, you know, to move ahead through – you know, purchasing for projects that they have lined up. So I think a little bit of variation. So I think maybe your question, though, is like, you know, is there sort of overstocking that sort of dynamic? I don't believe so. But again, there's variation customer to customer. So we'll, you know, we'll see that, I believe, average out. And again, I think looking at those numbers over a longer period than any single quarter is probably a little more helpful for your modeling and the way you think about it.
spk06: Got it. Okay. And then what are you doing from a de-risking perspective to keep the service lab operating at full capacity here given the possibility of energy shortages in Europe over the winter? And on a related note, are you sort of able to pass on these rising energy costs to your customers in terms of just how your contracts are structured?
spk03: Yeah. So, yeah, I think sort of just sort of important to bear in mind that if we talk about sort of Europe and energy costs, I think sort of it's a very different dynamic across different markets. I think we are sort of somewhat lucky in Sweden to have, you know, not such a severe situation as you would sort of observe on the continent. But clearly sort of energy costs are, you know, higher than they were a year ago. But I think sort of, you know, we made great strides in the service lab. I think they were sort of improving efficiency sort of on a month-by-month basis and doing a fantastic job. And also sort of, you know, with Q4 this year, not having any sort of UK biobank samples in there is also sort of, you know, supportive of the margin level.
spk06: Got it. And then one final cleanup for me, Oskar. Can you just lay out sort of what exactly your cash burn projections are for the fourth quarter here?
spk03: I mean, we don't sort of get high on burn, but it's typically sort of relatively low in the fourth quarter. So I think, you know, given sort of the high volume of activity, you know, a quite profitable quarter and typically sort of relatively low in terms of capex, then clearly there's sort of, you know, a working capital buildup as we invoice cash. you know, a lot at the end of the quarter, but that clearly gets sort of collected in Q1.
spk06: Got it. Very helpful. Thanks for the call, guys.
spk03: Yeah, thanks, Ashraf.
spk01: Thank you, and I'm sure no further questions at this time. I'd like to turn the call back over to John Heimer for any closing remarks.
spk02: Thank you for joining us today and for your interest in O-Link, and we look very much forward to keeping you updated on our progress. So wish everyone a great day. Thank you so much.
spk01: this concludes today's conference call thank you for participating you may now disconnect
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