Alpha Teknova, Inc.

Good day and thank you for standing by. Welcome to the TechNova second quarter 2024 financial results at this time. All participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during a session, you need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. please be advised that today's conference is being recorded. I would like to hand the conference over to your speaker today, Jennifer Henry, Senior Vice President of Marketing. Please go ahead.

Thank you, Operator. Welcome to Technova's second quarter 2024 earnings conference call. With me on today's call are Stephen Gunstream, Technova's President and Chief Executive Officer, and Matt Lowell, Technova's Chief Financial Officer, who will make prepared remarks and then take your questions. As a reminder, the forward-looking statements that we make during this call, including those regarding business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning these risk factors is included in the press release the company issued earlier today, and they are more fully described in the company's various filings with the SEC. Today's comments reflect the company's current views which could change as a result of new information, future events, or other factors, and the company does not obligate or commit itself to update its forward-looking statements except as required by law. The company's management believes that, in addition to GAAP results, non-GAAP financial measures can provide meaningful insight when evaluating the company's financial performance and the effectiveness of its business strategies. We will therefore use non-GAAP financial measures of certain of our results during this call. Reconciliations of GAAPs to non-GAAP financial measures are included in the press release that we issued this afternoon, which is posted on both Technova's and the SEC's website. Non-GAAP financial measures should always be considered only as a supplement to, and not as a substitute for, or as superior to, financial measures prepared in accordance with GAAP. The non-GAAP financial measures in this presentation may differ from similarly named non-GAAP financial measures used by other companies. Please also be advised that the company has posted a supplemental slide deck to accompany today's prepared remarks. It can be accessed on the investor relations section of Technova's website and on today's webcast. And now I will turn the call over to Stephen.

Thank you, Jen. Good afternoon and thank you everyone for joining us for our second quarter 2024 earnings call. As we enter the second half of 2024, I am increasingly confident in our future. I believe the combination of positive signals from leading indicators, capable internal execution, and our recent cap strong position to deliver on our long-term goal of sustainable above market growth. Let me start by sharing some thoughts about the market. which has not changed substantially since our first quarter 2024 earnings call. We continue to see a stabilization in what has been a very challenging biotech environment. Recent biotech funding increases, combined with positive internal leading indicators, such as increased engagement by customers previously focused on preserving capital, support a more optimistic outlook going forward. Given that we typically see about a four-quarter lag between changes in industry funding levels and their impact on our revenue, we think these indicators point toward a more supportive market environment in 2025. We now supply more than 43 active clinical customers, up from 34 at the end of 2023 and 25 at the end of 2022. Of the 43 active clinical customers, 39 are biopharma-related 23 of which operate in the cell and gene therapy market segment. Our ability to acquire these customers, despite the challenging biotech environment, is a testament to the capabilities we have built over the past couple of years. We believe we are in a great position to support these customers as they progress their therapies towards commercialization. Today, we introduce two new offerings that we believe will accelerate the introduction of novel therapies. First, we launched a new manufacturing grade called RUO+. This new grade enables a seamless and cost-effective transition from reagents used in early stage research and process development to GMP-grade reagents used in clinical trials. With RUO+, we manufacture our customers' products utilizing the same facilities, equipment, and processes as in GMP-grade production. This bridge between research and clinical grade is an ideal solution for those customers working towards a clinical trial but who are not quite ready for the change control, documentation, and expense associated with GMP-grade reagents. We also launched ExpressTech production expedited service offering this quarter. Technova is already a leader in turnaround time for customer reagents. Those customers expedited manufacturing and delivery for critical products. For these customers, ExpressTech allows customers to have their custom products enter production in days instead of weeks. We expect a combination of these offerings to not only generate new high margin revenue for the business, but also to address some key customer pain points. Following our strong start to the first quarter, we again delivered on revenue, adjusted EBITDA, and cash outflow in the second quarter of 2024. From a revenue perspective, we saw sequential improvement of 3% compared to the first quarter of 2024. While our second quarter revenue was down 17% compared to the prior year, when excluding the one large clinical solutions order we delivered in the second quarter of 2023, the resulting year-over-year revenue increase was 9%. Importantly, this underlying growth was driven by a diverse customer base with no direct customer representing more than 10% of revenue. Assuming a stable market through the second half of the year, we remain confident in our $35 to $38 million full-year revenue guidance for 2024. The midpoint of our full-year guidance implies a return to double-digit growth in the second half of 2024 when compared to the second half of 2023. In addition to solid performance on our top line, we are executing to plan from a cost management perspective. Matt will provide more details on our operating and capital expenditures, but at a high level, we have now realized a full quarter of the benefits from the cost control measures we carried out during the first quarter of 2024. Our second quarter adjusted EBITDA was a sequential $1.2 million improvement over Q1. Finally, in the first half of July, we closed on a $15.4 million capital raise supported by Telegraph Hill Partners, our largest shareholder in Technova Management. I would like to take a moment here to thank Telegraph Hill Partners for their continued confidence in our growth strategy and in our ability to execute on our long-term plan. We believe this additional capital provides us a bridge to profitability without the need for more external funding. In summary, we've enjoyed a strong first half of the year. We are pleased with the advances we've made in executing our strategy and believe we are well positioned for long-term success. I will now hand the call over to Matt to talk through the financials.