Alpha Teknova, Inc. ((TKNO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, Alpha Teknova, Inc. presented a balanced mix of positive and negative sentiments. The company reported solid revenue growth, improved gross margins, and operational efficiency, yet challenges persist with net loss and cash flow. The market conditions for smaller biotech firms remain difficult, impacting custom product sales, leading to a balanced outlook overall.
Revenue Growth and Financial Performance
Revenue for the second quarter of 2025 increased by 7% to $10.3 million, compared to $9.6 million in the same quarter of 2024. This marks the fourth consecutive quarter of year-over-year growth, driven by strong sales in catalog products. Additionally, adjusted EBITDA improved to negative $0.8 million, marking the best quarterly result since the company went public.
Gross Margin Improvement
Teknova achieved a significant improvement in gross margin, which increased to 38.7% in Q2 2025 from 29.2% in Q2 2024. This improvement was attributed to manufacturing efficiency gains and higher revenue.
Clinical Solutions Revenue Surge
The Clinical Solutions segment saw a revenue increase of 32%, reaching $2.1 million in Q2 2025 compared to $1.6 million in Q2 2024. This surge was driven by an increased number of customers.
Operational and Strategic Achievements
Teknova has made significant operational strides, reducing headcount by 40% from its peak and cutting annual operating expenses by $18 million over three years. The company has exceeded consensus revenue estimates in 15 of the last 16 reported quarters.
Net Loss
Despite improvements, Teknova reported a net loss of $3.6 million or negative $0.07 per diluted share for Q2 2025, compared to a net loss of $5.4 million or negative $0.13 per diluted share in Q2 2024.
Challenging Market Conditions
The company continues to face challenging market conditions, particularly affecting its custom products segment, due to difficulties faced by small to midsized biotech customers.
Cash Flow Concerns
Free cash flow remained negative at $2.3 million for Q2 2025, compared to negative $3.0 million in Q2 2024. Teknova expects a free cash outflow of less than $12 million for the full year 2025.
Forward-Looking Guidance
During the earnings call, Teknova maintained its 2025 revenue guidance of $39 million to $42 million, with expectations of adjusted EBITDA positivity in the $50 million to $55 million annualized revenue range. The company emphasized its strategic focus on maintaining leadership in research reagents and expanding its custom manufacturing capabilities, while also exploring inorganic growth opportunities.
In summary, Alpha Teknova, Inc.’s earnings call reflected a balanced sentiment with notable achievements in revenue growth and operational efficiency, despite ongoing challenges in net loss and cash flow. The company remains optimistic about its strategic initiatives and future growth prospects.