Alpha Teknova, Inc.

Good day and thank you for standing by. Welcome to the Technova first quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jennifer Henry, Senior Vice President of Marketing, please go ahead.

Thank you, Operator. Welcome to Technova's first quarter 2025 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 GAAP 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 now, I will turn the call over to Stephen.

Thank you, Jen. Good afternoon, and thank you, everyone, for joining us for our first quarter 2025 earnings call. Today, I'd like to start by providing some commentary on the current macro environment and how it relates to our business. We had a strong first quarter that was in line or slightly ahead of our expectations. We believe this performance reflects the diversity of our customer base, the criticality of our product portfolio, and the limited exposure we have to changes in the geopolitical environment. While we serve over 500 academic and government institutions annually, these customers represented less than 4% of our total revenue in 2024. We also believe that customers will continue to use our products notwithstanding changes to NIH funding levels because they are foundational to basic research and generally represent a small part of the cost associated with R&D activity. From a tariff perspective, our diverse customer base spans the entire life science market from biopharma to life science tools to diagnostics to other areas such as food and environmental testing. We manufacture 100% of our products in the United States and source only about $1 million worth of our raw materials from outside the United States annually. From a commercial perspective, less than 5% of our total revenue comes from sales to customers outside of the United States, and we generate no material revenue from sales to customers in China. We therefore expect no material direct adverse impact from recent changes to tariff policies. With that said, second-order effects, such as a reduction in biotech funding, will likely cause delays or reductions in purchases of our products from some small and mid-sized biotech customers. As a reminder, our growth strategy is to engage with these early-stage therapeutic developers and support them as they move their therapies through to clinical trials to commercialization. Over time, we believe a combination of these new clinical customers in our core business which has grown at an average annual rate of 12% since 2009, will allow us to achieve sustainable above-market growth rates of 20 to 25% annually. Until biotech funding recovers, however, we believe that many small and mid-sized biotech companies with limited capital will continue to manage their expenses conservatively. Fortunately, we have been able to increase the number of clinical customer accounts that purchase more than $5,000 annually from 13 in 2020 to 48 in 2024, and we expect the custom biopharma segment of our business to grow mid-teens in 2025. All things considered, we remain confident in our ability to execute on our plan for 2025 and therefore in our guidance for the year. Now, turning to the quarter, it was a relatively straightforward period for us across the board with revenue and operational expenses delivering or better than our expectations. Our catalog products, which are purchased from a very broad customer base of over 3,000 accounts annually and represent approximately 60% of our total revenue, grew low double digits when compared to the first quarter of 2024. This is due to a combination of some larger one-time orders from select accounts and a general increase in demand across multiple product lines and customer types. We will continue to monitor the performance of our catalog products, which could provide some upside to our revenue guidance if the trend continues. Revenue from sales of custom products to life science tools and diagnostics customers declined more than 30% compared to the same period last year due to a large order delivered to a single customer in the first quarter of 2024. Excluding this order, revenue in this segment would have increased high single digits in the first quarter of 2025. Revenue from custom products sold to biopharma customers grew mid-single digits compared to Q1 2024. The size and timing of orders for custom products makes it difficult to measure performance on a quarterly basis, but based on customer discussions and our funnel metrics, We still expect at least 15% growth in revenue from sales of custom products to biopharma customers and mid-single-digit revenue growth from sales of custom products to life science tools and diagnostics customers in 2025. Finally, as we mentioned on our Q4 call, we believe there is an opportunity to expand our product portfolio through collaborations and acquisitions. While we have spent the past couple of years investing in infrastructure, systems, and scalability, numerous other companies have focused on developing novel products and technologies. By working closely with these companies, we believe we can expand our product portfolio and geographic footprint. The combination of our operational and commercial scale with our collaborators' novel products and technologies creates a great opportunity to drive additional top-line growth and margin expansion over the longer term. In fact, in March, we signed a collaboration agreement with Pluristics. Pluristics is a leading provider of induced pluripotent stem cells, or IPSCs, for use in next-generation cell therapies. Through their development of IPSCs, Pluristics identified a novel formulation for the systematic freezing of cells called cryopreservation that streamlines the manufacturing of cell products. The product line is trade-named Plurifreeze and includes a wash system paired with a cryopreservative designed to simplify the scale of process for companies working to bring allogenic cell therapies to market. Technova is now the exclusive manufacturer and distributor in the United States and Canada for this suite of products. We launched the products at the Bioprocess International West Conference and have received an enthusiastic response from our target customers. We are excited about the first of what we expect to be additional collaborations and what these relationships can bring to our customers and our investors alike. In summary, we had a strong start to the year. We are excited about the progress we've made and believe we are in position for long-term success. I will now hand the call over to Matt to talk through the financials.