Alpha Teknova Earnings Call: Mixed Outlook with Strategic Growth

Alpha Teknova, Inc. ((TKNO)) has held its Q3 earnings call. Read on for the main highlights of the call.

Alpha Teknova, Inc. Earnings Call Highlights: A Mixed Outlook with Strategic Investments

The recent earnings call from Alpha Teknova, Inc. presented a mixed outlook, characterized by consistent revenue growth driven by Lab Essentials products and operational improvements. However, challenges persist in the Clinical Solutions segment and the broader biopharma market. Despite these hurdles, the company has made strategic investments aimed at ensuring long-term growth and enhancing operational efficiency.

Consistent Revenue Growth

Alpha Teknova reported a 9% increase in revenue compared to the same period last year, marking the fifth consecutive quarter of year-over-year growth. Notably, revenue from Lab Essentials products grew by 16%, underscoring the strong demand and successful market positioning of these products.

Operational Efficiency Improvements

The company has implemented key projects such as electronic batch records and high-throughput dispensing lines, which are expected to be operational by 2026. These initiatives are anticipated to improve operational metrics, including on-time delivery, thereby enhancing overall efficiency.

Increased and Diversified Customer Base

Alpha Teknova has expanded its Clinical Solutions customer base, which is expected to lead to significant revenue growth as therapies and diagnostics progress towards commercialization over the next two to three years.

Improved Gross Profit and Margin

The third quarter of 2025 saw a gross profit of $3.2 million, with a gross margin of 30.7%, a significant improvement from the 0.9% margin in the same quarter of 2024. This improvement reflects the company’s efforts to optimize its cost structure and enhance profitability.

Reduction in Net Loss

The net loss for the third quarter of 2025 was reduced to $4.3 million, compared to a net loss of $7.6 million in the third quarter of 2024. This reduction highlights the company’s progress in managing its expenses and improving financial health.

Decrease in Clinical Solutions Revenue

Despite the overall growth, Clinical Solutions revenue decreased by 13%, from $2.0 million in the third quarter of 2024 to $1.7 million in the third quarter of 2025. This decline was attributed to a lower average revenue per customer.

Challenges in Biopharma Market

The company continues to face challenges in the biopharma market, with delays in larger purchases of custom products due to the current biotech funding environment. Only modest improvements are expected in 2026.

Persistent Softness in Clinical Solutions Demand

There is ongoing softness in demand for Clinical Solutions products from biopharma customers, with expectations of finishing slightly below the revenue guidance midpoint for 2025.

Forward-Looking Guidance

During the earnings call, Alpha Teknova expressed continued confidence in its growth strategy despite challenges in the biotech funding environment. The company maintained its 2025 revenue guidance of $39 million to $42 million, expecting to finish slightly below the midpoint due to persistent softness in demand for Clinical Solutions products. Teknova anticipates low double-digit growth in 75% of its revenue, primarily from catalog products, while expecting modest growth in the 25% of revenue from custom biopharma products. The company aims to become adjusted EBITDA positive at an annualized revenue of $50 million to $55 million and projects a free cash outflow of less than $12 million for the full year 2025.

In summary, Alpha Teknova’s earnings call highlighted a mixed sentiment with positive strides in revenue growth and operational efficiency, countered by challenges in the Clinical Solutions segment and biopharma market. The company’s strategic investments and forward-looking guidance reflect its commitment to overcoming these challenges and achieving long-term growth.