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Olink reports third quarter 2023 financial results

UPPSALA, Sweden, Nov. 15, 2023 (GLOBE NEWSWIRE) -- Olink Holding AB (publ) (“Olink”) (Nasdaq: OLK) today announced its unaudited financial results for the third quarter ended September 30, 2023.

Highlights

  • Third quarter 2023 revenue totaled $44.2 million, representing year over year growth of 39% on a reported basis and 38% on a constant currency adjusted like-for-like basis
  • Total Explore customer installations reached 87, with 13 installations during the third quarter
  • Total Signature Q100 placements reached 153, with 21 placements during the third quarter
  • Explore revenue of $32.3 million accounted for 73% of total third quarter revenue, with Explore Kit revenue totaling $17.4 million, or 54% of total Explore revenues
  • Third quarter kits revenue and analysis services revenue represented 54% and 38% of total revenue, respectively
  • Third quarter 2023 net loss was $(1.8) million, with adjusted EBITDA of $2.0 million; compared to third quarter 2022 net loss of $(1.3) million and adjusted EBITDA of $(1.7) million
  • Exited third quarter 2023 with a cash balance of $130 million

Third quarter financial results
Total revenue for the third quarter of 2023 was $44.2 million, as compared to $31.8 million for the third quarter of 2022, growing 39% year over year and driven primarily by strength in our kit business.

Third quarter 2023 kits revenue of $23.8 million represented 54% of our total revenue, compared to 42% for the third quarter of 2022; and grew 78% year over year as a result of continued Explore and Target revenue growth in combination with the launch of Explore HT.

Analysis services revenue for the third quarter of 2023 was $16.9 million, as compared to $15.1 million for the third quarter of 2022.

Other revenue was $3.5 million for the third quarter of 2023, as compared to $3.2 million for the third quarter of 2022. Other revenue growth was driven by Signature Q100 placements and other hardware revenue.

By geography, revenue during the third quarter of 2023 was $17.9 million in Americas, $20.9 million in EMEA (including Sweden), and $5.4 million in China and RoW (including Japan).

Reported gross profit was $30.9 million in the third quarter of 2023, as compared to $21.0 million in the third quarter of 2022. Adjusted gross profit was $32.0 million in the third quarter of 2023, as compared to $21.8 million in the third quarter of 2022.

Reported gross profit margin for kits was 83% for the third quarter of 2023, as compared to 87% for the third quarter of 2022. Adjusted gross profit margin for kits was 85% for the third quarter of 2023, as compared to 89% for the third quarter of 2022.

Reported gross profit margin for analysis services was 60% as compared to 51% in the third quarter of 2022. Adjusted gross profit margin for analysis services was 65% for the third quarter of 2023, as compared to 55% in the third quarter of 2022.

Reported and adjusted gross profit margin for Other was 25% for the third quarter of 2023, as compared to 49% for the third quarter of 2022.

Total operating expenses for the third quarter of 2023 were $38.5 million, as compared to $29.0 million for the third quarter of 2022. The increase was largely due to continued investment into Olink's commercial organization, research and development team expansion, and additional administrative costs.

Net loss was $(1.8) million for the third quarter of 2023 and adjusted EBITDA was $2.0 million, as compared to a net loss of $(1.3) million and adjusted EBITDA of $(1.7) million for the third quarter of 2022.

Net loss per share for the third quarter of 2023 was $(0.01) based on a weighted average number of outstanding shares of 124,342,715 as compared to a net loss per share of $(0.01) in the third quarter of 2022 based on a weighted average number of outstanding shares of 119,098,118.

Webcast and conference call
Due to the pending acquisition of Olink by Thermo Fisher Scientific Inc., Olink will not be hosting a conference call.

Statement regarding use of non IFRS financial measures
We present certain non-IFRS financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We believe that the use of these non-IFRS measures facilitates investors’ assessment of our operating performance. We caution readers that amounts presented in accordance with our definitions of adjusted EBITDA, adjusted gross profit, adjusted gross profit margin, adjusted gross profit margin by segment, and constant currency revenue growth, may not be the same as similar measures used by other companies. Not all companies and Wall Street analysts calculate the non-IFRS measures we use in the same manner. We compensate for these limitations by reconciling each of these non-IFRS measures to the nearest IFRS performance measure, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.

We are not able to forecast constant currency revenue on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting foreign currency exchange rates and, as a result, are unable to provide a reconciliation to forecasted constant currency revenue.

Investor contact
Jan Medina, CFA
VP Investor Relations & Capital Markets
Mobile: +1 617 802 4157
jan.medina@olink.com

Media contact
Michael B. Gonzales
VP Global Marketing
Mobile: +1 415 308 6467
michael.gonzales@olink.com

Forward-looking statements
This press release contains express or implied “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995 that are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding the proposed acquisition of Olink by Thermo Fisher (the “Proposed Acquisition”), our 2023 revenue outlook, our Explore externalizations, our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts, and other matters regarding our business strategies, use of capital, results of operations and financial position, and plans and objectives for future operations. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: the COVID-19 pandemic, the need to develop new products and adapt to significant technological change; implementation of strategies for improving growth; general economic conditions and related uncertainties; dependence on customers’ capital spending policies and government funding policies; the effect of economic and political conditions and exchange rate fluctuations on international operations; use and protection of intellectual property; the effect of changes in governmental regulations; any natural disaster, public health crisis or other catastrophic event; and the effect of laws and regulations governing government contracts; the ability of the parties to satisfy the closing conditions of the Proposed Acquisition on a timely basis, if at all; the possibility of regulatory approvals required for the Proposed Acquisition not being timely obtained, if obtained at all, or being obtained subject to conditions; uncertainties as to how many of Olink’s shareholders will tender their shares in the offer; the possibility that competing offers will be made; the occurrence of events that may give rise to a right of one or both of Thermo Fisher and Olink to terminate the Purchase Agreement; negative effects of the announcement of the Proposed Acquisition on the market price of Olink’s common stock; prior to the completion of the Proposed Acquisition, Olink’s business experiencing disruptions due to uncertainty or other factors related to the Proposed Acquisition making it more difficult to maintain relationships with employees, customers, licensees, other business partners or governmental entities; difficulty retaining key employees; the outcome of any legal proceedings related to the Proposed Acquisition; and the parties being unable to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within the expected timeframe for completing the Proposed Acquisition, or at all. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “seek,” “plan,” “outlook,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “currently,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under the caption "Risk Factors" in our Form 20-F for the fiscal year ended December 31, 2022 (Commission file number 001-40277) and elsewhere in the documents we file or furnish with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections for the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.

About Olink
Olink Holding AB (Nasdaq: OLK) is a company dedicated to accelerating proteomics together with the scientific community, across multiple disease areas to enable new discoveries and improve the lives of patients. Olink provides a platform of products and services which are deployed across major biopharmaceutical companies and leading clinical and academic institutions to deepen the understanding of real-time human biology and drive 21st century healthcare through actionable and impactful science. The Company was founded in 2016 and is well established across Europe, North America, and Asia. Olink is headquartered in Uppsala, Sweden.


INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (UNAUDITED)

Amounts in thousands of U.S. Dollars unless otherwise stated Three months ended September 30
Nine months ended September 30
Note2023 2022 2023 2022 
Revenue444,152 31,772 101,045 81,963 
Cost of goods sold (13,265)(10,785)(35,253)(30,589)
Gross profit 30,887 20,987 65,792 51,374 
Selling expenses (14,283)(11,240)(38,886)(31,293)
Administrative expenses (15,716)(11,998)(47,887)(40,391)
Research and development expenses (8,260)(6,443)(22,701)(19,761)
Other operating income/(expense) (275)725 (265)1,292 
Operating loss (7,647)(7,969)(43,947)(38,779)
Interest income 4,531 29 5,137 40 
Interest expense (303)(141)(539)(407)
Foreign exchange, net 1,171 6,427 8,590 16,906 
Other finance income   578  
Loss before tax (2,248)(1,654)(30,181)(22,240)
Income tax benefit5429 366 6,130 3,960 
Net loss for the period (Attributable to shareholders of the Parent) (1,819)(1,288)(24,051)(18,280)
Other comprehensive loss:     
Items that may be reclassified to profit or loss:     
Exchange differences from translation of foreign operations 563 (31,989)(18,275)(84,378)
Other comprehensive loss for the period, net of tax 563 (31,989)(18,275)(84,378)
Total comprehensive loss for the period, net of tax (1,256)(33,277)(42,326)(102,658)
Total comprehensive loss for the period (Attributable to shareholders of the Parent)  (1,256)(33,277)(42,326)(102,658)
Basic and diluted loss per share9(0.01)(0.01)(0.19)(0.15)
      

INTERIM CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

Amounts in thousands of U.S. DollarsNoteSeptember 30, 2023 December 31, 2022 
ASSETS   
Non-current assets   
Intangible assets 241,535 257,480 
Property, plant and equipment 22,626 15,056 
Right-of-use asset 25,896 9,891 
Deferred tax assets516,978 10,846 
Other long-term receivables 407 571 
Total non-current assets 307,442 293,844 
Current assets   
Inventories 53,372 44,246 
Trade receivables 46,908 52,743 
Other receivables 2,465 2,562 
Prepaid expenses and accrued income 12,361 7,786 
Cash at bank and in hand 130,277 75,109 
Total current assets 245,383 182,446 
TOTAL ASSETS 552,825 476,290 
EQUITY   
Share capital632,221 30,988 
Other contributed capital6616,646 514,133 
Reserves/(Deficit) (76,863)(58,588)
Accumulated Deficit (99,899)(75,848)
Total equity attributable to shareholders of the Parent 472,105 410,685 
LIABILITIES   
Non-current liabilities   
Lease liabilities721,751 7,322 
Deferred tax liabilities520,273 22,196 
Total non-current liabilities 42,024 29,518 
Current liabilities   
Interest-bearing loans and borrowings73,739 2,113 
Accounts payable 8,590 6,885 
Current tax liabilities 1,320 1,389 
Other current liabilities1025,048 25,700 
Total current liabilities 38,697 36,086 
Total liabilities 80,720 65,605 
TOTAL EQUITY AND LIABILITIES 552,825 476,290 


INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)

  Nine months ended September 30
 
Amounts in thousands of U.S. DollarsNote2023 2022 
Operating activities   
Loss before tax (30,181)(22,240)
Adjustments reconciling loss before tax to operating cash flows:   
Depreciation and amortization 13,872 13,034 
Net finance income (13,767)(16,425)
Loss on sale of assets 138 401 
Share-based compensation expense68,141 5,826 
Other (72)(94)
Changes in working capital:   
Increase in inventories (11,117)(13,194)
Decrease in accounts receivable 6,012 7,738 
Decrease in other current receivables (5,557)(6,435)
Increase in trade payables 1,734 3,281 
Decrease in other current liabilities (103)(555)
Interest received 5,032 40 
Interest paid (539)(407)
Other finance income 578  
Tax paid (1,258)(937)
Cash flow used in operating activities (27,087)(29,967)
Investing activities   
Purchase of intangible assets (1,449)(1,060)
Purchase of property, plant and equipment (11,618)(5,115)
Proceeds from sale of property, plant and equipment 10  
Increase in other non-current financial assets 159 56 
Cash flow used in investing activities (12,898)(6,119)
Financing activities   
Proceeds from issue of share capital6100,205 24 
Share issue costs6(5,026) 
Payment of principal portion of lease liability (1,929)(2,144)
Cash flow from/(used in) financing activities 93,250 (2,120)
Net cash flow during the period 53,265 (38,206)
Cash at bank and in hand at the beginning of the period 75,109 118,096 
Net foreign exchange difference 1,903 (2,764)
Cash at bank and in hand at the end of the period 130,277 77,126 


Reconciliations of adjusted gross profit to gross profit, the most directly comparable IFRS measure, by segment (unaudited):

 Three months ended September 30
 Nine months ended September 30
 
Amounts in thousands of U.S. Dollars unless otherwise stated2023 2022 2023 2022 
Kit    
Revenue23,797 13,395 47,841 24,535 
Cost of goods sold(3,955)(1,696)(8,688)(3,120)
Gross profit19,842 11,699 39,153 21,415 
Gross profit margin83.4%87.3%81.8%87.3%
Less:    
Depreciation charges269 142 605 410 
Share-based compensation expenses82 42 194 122 
Adjusted Gross Profit20,193 11,883 39,952 21,947 
Adjusted Gross Profit %84.9%88.7%83.5%89.5%
     
Service    
Revenue16,904 15,132 42,842 49,623 
Cost of goods sold(6,722)(7,444)(18,732)(23,369)
Gross profit10,182 7,688 24,110 26,254 
Gross profit margin60.2%50.8%56.3%52.9%
Less:    
Depreciation charges622 605 1,722 1,888 
Share-based compensation expenses108 23 263 112 
Adjusted Gross Profit10,912 8,316 26,095 28,254 
Adjusted Gross Profit %64.6%55.0%60.9%56.9%
     
Corporate / Unallocated    
Revenue3,450 3,245 10,361 7,805 
Cost of goods sold(2,588)(1,645)(7,833)(4,100)
Gross profit862 1,600 2,528 3,705 
Gross profit margin25.0%49.3%24.4%47.5%
Less:    
Depreciation charges    
Share-based compensation expenses    
Adjusted Gross Profit862 1,600 2,528 3,705 
Adjusted Gross Profit %25.0%49.3%24.4%47.5%


Reconciliation of constant currency revenue growth to revenue growth as reported under IFRS, the most directly comparable IFRS measure
(unaudited):

We use the non-IFRS measure of constant currency growth, which we define as our total revenue growth from one fiscal year to the next on a constant currency exchange rate basis. We measure our constant currency revenue growth by applying the current fiscal period’s average exchange rate to the prior year fiscal period.

 Three months ended September 30
 Nine months ended September 30
Amounts in thousands of U.S. Dollars, unless otherwise stated2023 2022 2023 2022
Revenue44,152 31,772 101,045 81,963
Revenue growth (IFRS)39.0%56%23% 
Foreign exchange impact1.4%(9%)(1%) 
Constant currency revenue growth37.6%68%24% 


Reconciliation of consolidated adjusted gross profit to gross profit, the most directly comparable IFRS measure
(unaudited):

 Three months ended September 30
 Nine months ended September 30
 
Amounts in thousands of U.S. Dollars, unless otherwise stated2023 2022 2023 2022 
Revenue44,152 31,772 101,045 81,963 
Cost of goods sold(13,265)(10,785)(35,253)(30,589)
Gross Profit30,887 20,987 65,792 51,374 
Gross Profit %70.0%66.1%65.1%62.7%
Less:    
Depreciation charges891 748 2,326 2,298 
Share-based compensation expenses189 65 456 234 
Adjusted Gross Profit31,967 21,800 68,574 53,906 
Adjusted Gross Profit %72.4%68.6%67.9%65.8%


Reconciliation of adjusted EBITDA to operating loss, the most directly comparable IFRS measure
(unaudited):

 Three months ended September 30
 Nine months ended September 30
 
Amounts in thousands of U.S. Dollars2023 2022 2023 2022 
Operating income/(loss)(7,647)(7,969)(43,947)(38,779)
Add:    
Amortization2,748 2,708 8,245 8,530 
Depreciation2,364 1,532 5,627 4,504 
EBITDA(2,535)(3,729)(30,075)(25,745)
Management Adjustments1,369 189 2,874 990 
Share-based compensation expenses3,124 1,808 8,141 5,962 
Adjusted EBITDA1,958 (1,732)(19,060)(18,793)

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