Olink reports fourth quarter and full year 2023 financial results
25 Mar 2024
Financial StatementAcquisition
Olink reports fourth quarter and full year 2023 financial results
UPPSALA, Sweden, March 25, 2024 (GLOBE NEWSWIRE) -- Olink Holding AB (publ) (“Olink”) (Nasdaq: OLK) today announced its unaudited financial results for the fourth quarter ended December 31, 2023.
Highlights
Fourth quarter 2023 revenue totaled $68.6 million, representing year over year growth of 18% on a reported basis and 17% on a constant currency adjusted like-for-like basis
Full year revenue 2023 revenue totaled $169.6 million, achieving year over year growth of 21% on a reported basis and 21% on a constant currency adjusted like-for-like basis
Total Explore customer installations reached 107, with 20 installations during the fourth quarter
Total Signature Q100 placements reached 186, with 33 placements during the fourth quarter
Explore revenue of $50.6 million accounted for 74% of total fourth quarter revenue, with Explore Kit revenue totaling $30.8 million, or 61% of total Explore revenues
Fourth quarter kits revenue and analysis services revenue represented 58% and 34% of total revenue, respectively
Fourth quarter 2023 net loss was $(7.6) million, with adjusted EBITDA of $13.3 million; compared to fourth quarter 2022 net profit of $5.4 million and adjusted EBITDA of $14.9 million
Exited fourth quarter 2023 with a cash balance of $121 million.
On March 20, 2024, Thermo Fisher Scientific received clearance from the Swedish Inspectorate of Strategic Products with respect to the proposed transaction. The parties continue to work cooperatively with the applicable regulators and continue to expect the offer to be completed by mid-2024.
Fourth quarter and full year financial results
Total revenue for the fourth quarter of 2023 was $68.6 million, as compared to $57.9 million for the fourth quarter of 2022, growing 18% year over year and driven primarily by strength in our kit business. Reported full year 2023 revenue grew 21% to $169.6 million, as compared to $139.8 million for 2022.
Fourth quarter 2023 kits revenue of $39.7 million represented 58% of our total revenue, compared to 53% for the fourth quarter of 2022; and grew 30% year over year as a result of continued Explore and Target revenue growth in combination with the launch of Explore HT. Full year 2023 kits revenue grew 59%, totaling $87.5 million, versus $55.1 million during 2022.
Analysis services revenue for the fourth quarter of 2023 was $23.2 million, as compared to $23.4 million for the fourth quarter of 2022. Full year 2023 analysis service revenue totaled $66.0 million, versus $73.0 million for 2022, representing (10%) decrease. The decrease in revenue compared to prior year follows the externalization strategy to sales of Kits.
Other revenue was $5.7 million for the fourth quarter of 2023, as compared to $3.9 million for the fourth quarter of 2022. Other revenue growth was driven by Signature Q100 placements and other hardware revenue. Full year 2023 other revenue totaled $16.1 million, versus $11.7 million for 2022.
By geography, revenue during the fourth quarter of 2023 was $33.3 million in America, $27.6 million in EMEA (including Sweden), and $7.6 million in China and RoW (including Japan). By geography, revenue during the full year 2023 was $78.8 million in America, $69.1 million in EMEA (including Sweden), and $21.7 million in China and RoW (including Japan).
Reported gross profit was $48.7 million in the fourth quarter of 2023, as compared to $43.1 million in the fourth quarter of 2022. Full year 2023 gross profit totaled $114.5 million, versus 94.5 million for 2022. Adjusted gross profit was $49.8 million in the fourth quarter of 2023, as compared to $44.0 million in the fourth quarter of 2022. Full year 2023 adjusted gross profit totaled $118.3 million, versus $97.9 million for 2022
Reported gross profit margin for kits was 84% for the fourth quarter of 2023, as compared to 87% for the fourth quarter of 2022. Adjusted gross profit margin for kits was 85% for the fourth quarter of 2023, as compared to 88% for the fourth quarter of 2022. Full year 2023 adjusted gross profit margin for kits was 84%, versus 88% for 2022; and full year 2023 reported gross profit margin for kits was 83%, versus 87% for 2022.
Reported gross profit margin for analysis services was 59% as compared to 64% in the fourth quarter of 2022. Adjusted gross profit margin for analysis services was 62% for the fourth quarter of 2023, as compared to 67% in the fourth quarter of 2022. Full year 2023 adjusted gross profit margin for analysis services was 61%, versus 60% for 2022; and full year 2023 reported gross profit margin for analysis services was 57%, versus 56% for 2022.
Reported and adjusted gross profit margin for All other segments was 27% for the fourth quarter of 2023, as compared to 41% for the fourth quarter of 2022. Full year 2023 adjusted and reported gross profit margin for All other segment was 25%, versus 45% for 2022.
Total operating expenses for the fourth quarter of 2023 were $55.0 million, as compared to $34.9 million for the fourth quarter of 2022. The increase was largely due to continued investments in the business, and expenses related to the proposed acquisition of Olink by Thermo Fisher. Full year 2023 total operating expenses were $164.7 million, as compared to $125.1 million for 2022. The increase in full year 2023 was largely due to continued investment in Olink's commercial organization and research and development. The increase is also related to the overall growth of the business and expenses related to the proposed acquisition.
Net loss was $(7.6) million for the fourth quarter of 2023 and adjusted EBITDA was $13.3 million, as compared to a net income of $5.4 million and adjusted EBITDA of $14.9 million for the fourth quarter of 2022. Full year 2023 net loss was $(31.6) million and adjusted EBITDA was $(5.8) million, versus a net loss of $(12.9) million and adjusted EBITDA of $(3.9) million for 2022.
Net loss per share for the fourth quarter of 2023 was $(0.06) based on a weighted average number of outstanding shares of 124,342,715 as compared to a net profit per share of $0.05 in the fourth quarter of 2022 based on a weighted average number of outstanding shares of 119,943,003. Full year 2023 net loss per share totaled $(0.25), versus $(0.11) per share in 2022.
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
David Deuchler, CFA
Gilmartin Group
olink@gilmartinir.com
Media contact
Michael B. Gonzales
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 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, 2023 (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)
Three months ended
December 31
Twelve months ended
December 31
Amounts in thousands of U.S. Dollars unless otherwise stated 2023 2022 2023 2022 Revenue 68,553 57,885 169,597 139,848 Cost of revenue (19,883)(14,760)(55,136)(45,349)Gross profit 48,670 43,125 114,461 94,499 Selling expenses (15,593)(13,379)(54,479)(44,673)Administrative expenses (27,761)(13,882)(75,648)(54,274)Research and development expenses (11,482)(6,584)(34,183)(26,345)Other operating income 1,079 1 2,243 4,464 Other operating expense (1,242)(1,103)(2,670)(4,273)Operating (loss)/income (6,329)8,178 (50,276)(30,602)Interest income 1,377 1,119 6,514 1,159 Interest expense (319)(124)(858)(531)Foreign exchange, net (4,454)(2,847)4,137 14,059 Other finance income — 508 578 508 (Loss)/income before tax (9,725)6,834 (39,905)(15,407)Income tax benefit/(expense) 2,175 (1,404)8,305 2,556 Net (loss)/income for the period (Attributable to shareholders of the Parent) (7,550)5,430 (31,600)(12,851)Other comprehensive (loss)/income: Items that may be reclassified to profit or loss: Exchange differences from translation of foreign operations 34,569 23,772 16,293 (60,289)Other comprehensive (loss)/income for the period, net of tax 34,569 23,772 16,293 (60,289)Total comprehensive (loss)/income for the period, net of tax 27,019 29,202 (15,307)(73,140)Total comprehensive (loss)/income for the period (Attributable to shareholders of the Parent) 27,019 29,202 (15,307)(73,140)Basic and diluted (loss)/earnings per share (0.06)0.05 (0.25)(0.11) INTERIM CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
Amounts in thousands of U.S. Dollars December 31, 2023December 31, 2022ASSETS Non-current assets Goodwill and Intangible assets 258,681 257,480 Property, plant and equipment 30,039 15,056 Right-of-use asset 26,987 9,891 Deferred tax assets 21,285 10,846 Other long-term receivables 1,794 571 Total non-current assets 338,786 293,844 Current assets Inventories 66,436 44,246 Trade receivables 62,795 52,743 Other receivables 3,443 2,562 Prepaid expenses and accrued income 9,835 7,786 Cash at bank and in hand 120,957 75,109 Total current assets 263,466 182,446 TOTAL ASSETS 602,252 476,290 EQUITY Share capital 32,221 30,988 Other contributed capital 620,219 514,133 Reserves/(Deficit) (42,294)(58,588)Accumulated Deficit (107,448)(75,848)Total equity attributable to shareholders of the Parent 502,698 410,685 LIABILITIES Non-current liabilities Lease liabilities 22,765 7,322 Deferred tax liabilities 21,302 22,196 Total non-current liabilities 44,067 29,518 Current liabilities Interest-bearing loans and borrowings 4,024 2,113 Accounts payable 18,758 6,885 Current tax liabilities 1,320 1,389 Other current liabilities 31,385 25,700 Total current liabilities 55,487 36,086 Total liabilities 99,554 65,605 TOTAL EQUITY AND LIABILITIES 602,252 476,290
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Twelve months ended
December 31
Amounts in thousands of U.S. Dollars 2023 2022 Operating activities Loss before tax (39,905)(15,407)Adjustments reconciling loss before tax to operating cash flows: Depreciation and amortization 19,000 17,326 Net finance income (10,371)(15,164)Loss on sale of assets 159 465 Share-based compensation expense 11,060 7,907 Other (515)233 Changes in working capital: (Increase) in inventories (19,569)(18,934)(Increase) in accounts receivable (7,791)(13,867)(Increase) in other current receivables (3,126)(1,950)(Decrease)/Increase in trade payables 11,759 (751)Increase in other current liabilities 4,745 7,643 Interest received 6,388 1,159 Interest paid (858)(531)Other finance income 578 508 Tax paid/received (1,538)1,297 Cash flow used in operating activities (29,984)(30,066)Investing activities Purchase of intangible assets (2,268)(1,378)Purchase of property, plant and equipment (18,991)(7,173)Proceeds from sale of property, plant and equipment 10 — Investments in other non-current financial assets (1,376)(162)Repayment of other non-current financial assets 191 — Cash flow used in investing activities (22,434)(8,713)Financing activities Proceeds from issue of share capital 100,260 24 Share issue costs (5,081)— Payment of principal portion of lease liability (2,683)(2,908)Cash flow from/(used in) financing activities 92,496 (2,884)Net cash flow during the period 40,078 (41,663)Cash at bank and in hand at the beginning of the period 75,109 118,096 Net foreign exchange difference 5,770 (1,324)Cash at bank and in hand at the end of the period 120,957 75,109
Reconciliations of adjusted gross profit to gross profit, the most directly comparable IFRS measure, by segment (unaudited):
Three months ended
December 31
Twelve months ended
December 31
Amounts in thousands of U.S. Dollars unless otherwise stated2023 2022 2023 2022 Kit Revenue39,652 30,555 87,493 55,091 Cost of revenue(6,258)(4,011)(14,946)(7,131)Gross profit33,394 26,544 72,547 47,960 Gross profit margin84.2%86.9%82.9%87.1%Less: Depreciation charges283 157 887 569 Share-based compensation expenses81 57 275 176 Adjusted Gross Profit33,758 26,758 73,709 48,705 Adjusted Gross Profit %85.1%87.6%84.2%88.4% Service Revenue23,206 23,389 66,048 73,012 Cost of revenue(9,459)(8,407)(28,191)(31,776)Gross profit13,747 14,982 37,857 41,236 Gross profit margin59.2%64.1%57.3%56.5%Less: Depreciation charges621 563 2,343 2,448 Share-based compensation expenses108 105 371 220 Adjusted Gross Profit14,476 15,650 40,571 43,904 Adjusted Gross Profit %62.4%66.9%61.4%60.1% All other segments Revenue5,695 3,940 16,056 11,745 Cost of revenue(4,166)(2,342)(11,999)(6,442)Gross profit1,529 1,598 4,057 5,303 Gross profit margin26.8%40.6%25.3%45.2%Less: Depreciation charges— — — — Share-based compensation expenses— — — — Adjusted Gross Profit1,529 1,598 4,057 5,303 Adjusted Gross Profit %26.8%40.6%25.3%45.2%
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
December 31
Twelve months ended
December 31
Amounts in thousands of U.S. Dollars, unless otherwise stated2023 2022 2023 2022 Revenue68,553 57,885 169,597 139,848 Revenue growth (IFRS)18%33%21%47%Foreign exchange impact1%(4%)—%(6) %Constant currency revenue growth17%37%21%53%
Reconciliation of consolidated adjusted gross profit to gross profit, the most directly comparable IFRS measure (unaudited):
Three months ended
December 31
Twelve months ended
December 31
Amounts in thousands of U.S. Dollars, unless otherwise stated2023 2022 2023 2022 Revenue68,553 57,885 169,597 139,848 Cost of revenue(19,883)(14,760)(55,136)(45,349)Gross Profit48,670 43,125 114,461 94,499 Gross Profit %71.0%74.5%67.5%67.6%Less: Depreciation charges904 720 3,230 3,017 Share-based compensation expenses189 162 646 396 Adjusted Gross Profit49,763 44,007 118,337 97,912 Adjusted Gross Profit %72.6%76.0%69.8%70.0%
Reconciliation of adjusted EBITDA to operating loss, the most directly comparable IFRS measure (unaudited):
Three months ended
December 31
Twelve months ended
December 31
Amounts in thousands of U.S. Dollars2023 20222023 2022 Operating income/(loss)(6,329)8,178(50,277)(30,602)Add: Amortization2,785 2,68211,029 11,212 Depreciation2,344 1,6107,971 6,114 EBITDA(1,200)12,470(31,277)(13,276)Management Adjustments11,559 29814,432 1,288 Share-based compensation expenses2,918 2,08411,060 8,047 Adjusted EBITDA13,277 14,852(5,785)(3,941)
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