Bionano Genomics (BNGO) Earnings Transcript

Image source: The Motley Fool.

DATE

Monday, March 23, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Erik Holmlin
• Principal Accounting Officer — Mark Adamczak

Need a quote from a Motley Fool analyst? Email pr@fool.com

TAKEAWAYS

• Revenue -- $8.0 million for the quarter, reflecting a 3% decline; annual revenue was $28.5 million, down 7%, with core revenue down 2% after adjusting for clinical services in 2024.
• Consumables Volume -- 7,554 nanochannel array flow cells sold in the quarter, down 6%, and 30,171 flow cells for the year, virtually flat year over year; fourth-quarter supply was constrained by manufacturing partner delays.
• OGM System Installations -- Nine systems installed in the quarter and 32 for the year, surpassing original annual guidance of 15 to 20 installations.
• Non-GAAP Gross Margin -- 43% for the quarter and 47% for the year, representing an improvement of 1,200 basis points annually despite lower revenue.
• Non-GAAP Operating Expense -- $9.7 million for the quarter, down 9%; $36.6 million for the year, down 47%, with $100 million in annualized expense reductions and over 300 fewer employees since Q2 2023.
• Cash Position -- $29.6 million in cash and equivalents at year-end, with $10.3 million under restriction; company expects cash runway to extend into 2027.
• Debt -- Senior secured convertible debt expected to be fully retired by May 2026, which will simplify the balance sheet.
• Routine-Use Customer Profile -- Out of 321 total global customers and 387 systems installed, approximately 130 routine-use customers (40%) account for about 83% of OGM consumables revenue and generate an average of $89,000 per customer; those with validated protocols averaged $131,000 per year.
• Consumables and Software Revenue -- Together decreased by 1% to $4.8 million in the quarter, with an 8% increase in consumables offset by a 22% decline in software revenue; for the year, these segments grew 7% to $20.4 million and contributed 71% of total revenue.
• Software Advancements -- Launched VIA 7.2, Solve 3.8.3, and Stratus compute upgrade, extending AI-driven workflows, improving database accuracy, and doubling cancer sample throughput for customers.
• Peer-Reviewed Publications -- 136 new OGM-related publications in the year, up 25%; total publications rose to 450, continuing a 28% annual growth trajectory since 2020.
• Clinical Lab Fee Schedule (CLFS) Pricing -- Second Category I CPT code established for OGM, set at $1,263.53; previous code for hematologic malignancies increased 47% to $1,853.22 for 2026.
• 2026 Guidance -- Full-year revenue forecasted at $30 million to $33 million (5%-16% annual growth); first-quarter revenue guidance of $6.5 million to $6.7 million, representing flat to 3% growth year over year.

SUMMARY

Management attributed revenue softness to supply constraints in consumables, not demand weakness, and indicated expected recovery as manufacturing delays are resolved. There is a strategic emphasis on increasing productivity and revenue from validated, routine-use customers, who now comprise 40% of the installed base and account for the majority of consumables revenue. Notably, software and compute platform upgrades are designed to strengthen customer utility and support higher sample throughput without additional hardware costs. OGM received expanded reimbursement support, as seen through a new CPT code and a significant price increase for the existing code, which management cited as a major catalyst for future growth. The company’s operational strategy now focuses on profitability, reduced overhead, and selective customer acquisition rather than broad system expansion.

• The year saw record scientific adoption with OGM publications and clinical research genomes, reinforcing expectations for future commercial traction.
• Management stated, "We believe this emphasis on consumables and software is a healthier, more predictable revenue profile that is also more profitable."
• Event highlights included scale-up pilots in reference laboratories and academic centers, suggesting market readiness for broader OGM adoption.
• Cash runway into 2027 relieves near-term liquidity risk, and planned debt retirement by May 2026 will further de-lever the balance sheet.
• Management noted, "the increase in the price determination for the hematologic malignancy CPT code—a 47% increase—from about $1,200 to about $1,800. That."

INDUSTRY GLOSSARY

• OGM (Optical Genome Mapping): A technology for analyzing structural variations in genomes by visualizing ultra-high molecular weight DNA molecules in nanochannel arrays.
• CPT Code (Current Procedural Terminology Code): A medical code set used to report diagnostic, surgical, and medical procedures for reimbursement purposes.
• Stratus Compute: Bionano Genomics, Inc.’s hardware/software upgrade that enables higher-throughput analysis for OGM workflows using advanced GPUs.
• Routine-Use Customers: Accounts with regularly recurring and validated application of OGM, representing higher and more predictable consumables usage.
• Category I CPT Code: A code in the CPT system that describes a procedure or service that is consistent with contemporary medical practice and is widely performed.
• CLFS (Clinical Lab Fee Schedule): The Centers for Medicare and Medicaid Services fee schedule that determines reimbursement rates for laboratory tests in the U.S.

Full Conference Call Transcript

Erik Holmlin: Thank you, Webb. And good afternoon, everyone. I am excited to share our fourth quarter and full year 2025 results with you today, as well as to provide you with our expectations for 2026. I want to begin, however, with the context of the broader space we are aiming to impact, namely pathology, which is the discipline that investigates the causes, developments, and effects of disease. Our products and solutions are focused on transforming pathology from tedious, slow, costly, and labor-intense analog workflows of the past towards streamlined workflows of a digital future defined by technology and platform consolidation, automation, and powerful AI-driven software.

Our work in 2025, including the hundreds of publications and presentations by our users, demonstrated meaningful progress toward this goal and the significant value represented by this opportunity. As part of today's call, I want to take time to review the strategy we began implementing in September 2024, our progress in 2025, and summarize key takeaways from a deep dive into our customer base, revealing the composition of our most profitable customer profile. First, however, I want to ask Mark Adamczak, our principal accounting officer, to review our Q4 and 2025 financial highlights. Mark?

Mark Adamczak: Thanks, Erik. Revenue for Q4 2025 was $8.0 million, which is down 3% from $8.2 million in Q4 2024 but at the high end of our preannounced range of $7.8 million to $8.0 million. We sold 7,554 nanochannel array flow cells in Q4, which was down 6% year over year, but it is worth noting that late in Q4, our manufacturing partner that makes the silicon wafers for our chip consumables experienced delays. As a result, supply was constrained against higher consumable demand. We entered 2026 with a healthy backlog of consumables demand that we expect to realize in the coming quarters as these constraints ease.

For the full year 2025, revenue was $28.5 million, down 7% from $30.8 million in 2024. After adjusting for $1.7 million in clinical services in 2024, core revenue was down 2%. We sold 30,171 flow cells in 2025, down just 0.4% year over year. We also installed nine OGM systems in Q4 and 32 for full year 2025, exceeding our original guidance of 15 to 20 installations in the year. Turning to profitability, Q4 2025 non-GAAP gross margin was 43%, up from 42% a year ago. For the full year, non-GAAP gross margin was 47%, up from 35% in the full year 2024, an improvement of 1,200 basis points year over year despite lower revenue.

This reflects the efficiencies we are driving in our business under our new strategy. Fourth quarter 2025 non-GAAP operating expense was $9.7 million, down 9% year over year. For the full year, non-GAAP operating expense was $36.6 million, down 47% from $68.9 million in 2024. Importantly, since Q2 2023, we have removed approximately $100 million of annualized non-GAAP operating expense and reduced headcount by over 300 people. The transformation of our cost structure is clearly evident in these results. We ended the year with $29.6 million in cash, cash equivalents, and available-for-sale securities, including $10.3 million subject to certain restrictions. Based on factors described in our 10-K, we expect our cash runway to extend into 2027.

I would also note that our senior secured convertible debt is expected to be fully retired in May 2026, which will mark a meaningful balance sheet milestone that will further simplify our financial profile. With that, I will turn it back over to Erik to review our strategic progress and achievements in 2025 and finish by providing financial guidance for 2026. Erik?

Erik Holmlin: Thanks, Mark. That was an excellent job and your first time participating in one of our calls here. It is great to have you. In response to the challenging backdrop for tools and diagnostic companies that has persisted for some time now, we made a strategic shift that started in September 2024 and entailed going away from aggressively expanding our installed base toward focusing on profitable growth from high-volume users and selective customer acquisition. We established four strategic pillars to anchor this execution. First is to support and sustain the installed base of routine OGM and VIA software users.

Second, to increase the utilization of optical genome mapping by these routine users by supporting menu expansion and improving ease of use with VIA software and our IONIQ system, which automates isolation of nucleic acids. Third is to build the support needed for optical genome mapping reimbursement and inclusion into medical society guidelines and recommendations. And fourth is to improve profitability and scalability through lower costs, higher volumes, and continuous improvement in product quality.

Starting with the first and second pillars tied to enabling our customers to use products more, which will in turn result in higher consumable sales, while fourth quarter flow cells were down 7% at 7,554 and full year flow cells sold were essentially flat at 30,171, 2025 was certainly a transitional year where we faced uncertainty as to how stable the customer base would be during this strategic shift. We are pleased to see stability and consistency in the number of consumables that were purchased.

If we remove flow cells tied to sales of new OGM systems in both periods, existing flow cell customers—existing sales of flow cells to customers—declined 4% in the fourth quarter, but grew 5% for the full year. Keep in mind that consumable supply was constrained in the fourth quarter, which muted some of that growth. Taken together, consumables and software revenue decreased by 1% to $4.8 million in Q4, driven by a 22% decline in software revenue that offset 8% growth in consumables. The year-over-year decline in software revenue is a result of a handful of orders that were pulled forward into prior quarters.

For the full year, software grew 7%, and consumables and software together grew from $19.0 million to $20.4 million, which represents 7% growth, and as a share of total revenue increased from 62% in 2024 to 71% in 2025. We believe this emphasis on consumables and software is a healthier, more predictable revenue profile that is also more profitable. Now I want to talk about the composition of our installed base, and this is something that we brought up on calls over the course of 2025, and I want to focus on the customer profile that we have identified as the target for future growth. Throughout 2025, we focused on a subset of customers, so-called routine-use customers.

Those are customers who we believe have the greatest potential to purchase higher average volumes of OGM consumables. We also maintain a high level of support for our IONIQ system users and our VIA software users who use VIA software for non-OGM applications. Our geographic focus has also narrowed to include the United States, Canada, most of Western Europe, and Israel, although we have the help of excellent commercial partners who sell and support OGM outside of these regions. Looking across the 321 customers that have a total of 387 OGM systems installed as of 12/31/2025, routine-use customers comprise about 130, or 40%, of them, and they collectively operate about 175 systems, or 45%, of the global installed base.

Routine-use customers by definition have well-defined applications for OGM and a steady flow of samples coming into the lab for analysis, and tend to have institutionalized funding for OGM, meaning they are not solely dependent upon raising grant funding for each individual project, although grants do support these sites. Despite accounting for less than half of total OGM customers, these routine users drive the consumables business. In 2025, they accounted for about 83% of OGM consumables revenue. The average revenue per routine-use customer in 2025 was about $89,000, or double the average per customer across the entire global installed base.

Currently, there are about 60 routine-use customers that have validated their OGM protocol, and in 2025 those customers accounted for about 56% of total consumables revenue and 69% of the consumables revenue coming from routine users. Their average consumables revenue per year was $131,000 per customer. We also believe that there are about 55 routine-use customers who intend to validate an OGM protocol in the future and about 15 who use OGM routinely but do not intend to validate. Going forward, we see the number of routine-use customers increasing as new customer acquisition will focus on this customer type almost exclusively.

We also see average consumable revenue per routine-use site increasing as they expand their menus to include new applications, and as others validate their protocols and begin offering their products commercially. Regarding our second pillar, we can help routine-use customers in a variety of ways, including techniques and tools that enhance their ease of use with products like VIA software and our IONIQ system for automated nucleic acid isolation. In 2025, we made great progress to integrate VIA into customer workflows and upgrade our software and compute platforms to make analysis of OGM, microarray, and next-generation sequencing data faster, easier, and more accurate.

On this front, in 2025, we commenced a broad commercial release of our software and compute upgrades in the fourth quarter. VIA 7.2 extends the AI-driven OGM workflow from hematologic malignancies into constitutional genetic disorders, giving labs the same automated curation and report capabilities that have accelerated heme malignancy workflows. Solve 3.8.3 expands the structural variation control database and improves detection accuracy, while the Stratus compute upgrade using advanced GPUs doubles weekly cancer sample throughput without any hardware change. VIA's reach extends beyond OGM. It is the gold standard for copy number variation analysis in microarrays and is gaining traction with next-generation sequencing and even long-read sequencing users.

These non-OGM VIA customers represent a meaningful software revenue stream and a natural on-ramp to broader Bionano Genomics, Inc. adoption at these customer sites. The IONIQ system continues to expand, delivering high-purity DNA and RNA for both NGS workflows and, of course, high-purity ultra high molecular weight DNA for OGM workflows at scale. To build support for reimbursement and guideline recommendations, we are pleased to see incredible traction across the OGM community with publications that can support reimbursement decisions, professional society guidelines, and new customer adoption. 2025 was a record year for OGM publications: 136 new peer-reviewed publications, up 25% year over year.

2025 also saw approximately 450 publications in total, up from 359 in 2024, and the total number of publications exhibits a compound annual growth rate of about 28% since 2020. In addition, the community has published roughly 1,190 human clinical research genomes in 2025 alone, which brings the cumulative total to nearly 12,700, up from fewer than 500 in 2021, with 4,500 added in 2025 alone, and that growth reflects a compound annual growth rate of about 30% since 2021. We believe these publications are an excellent leading indicator for the growing acceptance and future adoption and utilization of Bionano Genomics, Inc. products and solutions.

Thanks to all of this progress, reimbursement improved significantly in 2025 with the establishment of a second Category I CPT code for OGM, covering OGM use in constitutional genetic disorders. The final price determination was $1,263.53, and that appears on the 2026 Clinical Lab Fee Schedule. In addition, the 2026 CLFS reflects a 47% increase in the payment determination for the Category I CPT code used for OGM hematologic malignancies. That is now priced at $1,853.22, up from $1,263.53. Taken together, these two codes cover OGM's current primary application areas and represent key infrastructure that is now in place. We are also seeing OGM consortia from all over the globe coming together.

These regional user groups help with things like access to reimbursement and influencing local guidelines, which together facilitate menu expansion and overall support the entire community of OGM users along their journey. We believe this is validation that OGM is really taking off, and we are gaining this critical mass that is so important, where the community is becoming the advocate versus the company, which has historically been the case. Regarding our final strategic pillar of improving profitability and scalability, we continued to make progress in 2025, highlighted by the non-GAAP gross margin expansion we mentioned earlier.

Our non-GAAP gross margins have now expanded from 22% in 2023 to 43% in 2025, while quarterly non-GAAP operating expenses fell from roughly $34 million to now under $10 million over that same period. Going forward, we expect margin expansion in line with revenue as volumes grow and product mix shifts towards consumables, and this is going to help us manage toward important financial milestones such as EBITDA breakeven. Finally, I want to highlight the excellent efforts from our team to host Bionano Genomics, Inc. Symposium 2026. This event is held in late February, and this year, we had over 1,250 registrants coming from 73 countries around the world.

The content featured 35 outside speakers presenting 33 presentations, and the community contributed 50 posters to our poster hall. The event itself lasted four days, and among the many excellent presentations, four reflected key themes that suggest growth opportunities for OGM going forward. Dr. Agnes Dodunyong from CHU Lille described how the French Optical Genome Mapping Group, or FROG, is acting as a network in support of implementation of OGM across 29 French-speaking laboratories in France, Canada, Switzerland, and Belgium. Dr. Ying Zhu from Johns Hopkins University School of Medicine presented the largest OGM dataset in sarcomas, revealing complex abnormalities and novel biomarkers in karyotypically normal cases.

These sarcomas represent an expansion of sample type from the blood and bone marrow aspirates that are commonly used with OGM today. There were two speakers who spoke to an incredibly important theme in Symposium 2026, which is OGM at scale. Dr. Alexander Hoysian from Radboud University Medical Center in The Netherlands described fully automating ultra high molecular weight DNA isolation and labeling for OGM and their plans to ramp to processing 3,000 samples per year, up from just 500 in 2025. Radboud now has three Stratus systems and two Saphyr systems, making them the lab with the most OGM capacity in the world, aside from Bionano Genomics, Inc., of course. Dr.

Adam Smith of Labcorp presented a rigorous comparison showing that a scaled Stratus workflow can process up to 10,000 cancer samples per year versus approximately 240 for a similar high-throughput long-read sequencing platform, and the cost of OGM is less than one-eighth of the initial capital investment for processing 1,000 long-read sequencing samples per year. We believe OGM is moving from early adoption into operation at scale, and academic networks like FROG, academic medical centers like Johns Hopkins and Radboud University Medical Center, and national reference laboratory institutions like Labcorp are building the operational and use cases for it. All of this progress and support gives me confidence in a strong outlook for the full year 2026.

Therefore, we are initiating revenue guidance of $30 million to $33 million, representing growth of 5% to 16% over 2025. And for the first quarter of 2026, we are initiating revenue guidance of $6.5 million to $6.7 million, representing flat to 3% growth over 2025. As our Q1 expectations imply, we do expect revenues to grow throughout the year consistent with the seasonality common in our business, as we continue executing on our mission to increase the use of our differentiated capabilities among our valued customers. We are very excited about this work and the journey ahead of us at Bionano Genomics, Inc. With that, we will now open for questions.

Mark Adamczak: Carmen?

Operator: Thank you so much. And as a reminder, if you do have a question, simply press 1-1 on your telephone and wait for your name to be announced. To remove yourself, press 1-1 again. We have a question from the line of Yi Chen. Please go ahead.

Yi Chen: Thank you for taking my question. Could you give us any color on what your expectations are regarding how many new OGM systems could be installed during 2026?

Erik Holmlin: Hi, Yi. Thank you for joining and asking an important question. I think that we have expectations which are comparable to what we shipped last year. We are not providing any guidance on the number because, as you can see, we significantly overperformed guidance last year, and we want to stay flexible about the new systems that are being installed. It is reasonable that we would have a comparable year this year to what we did last year.

Yi Chen: Mhmm. Got it. And also, the reported number of nanochannel array flow cells sold in 2025 was slightly below that number in 2024, while you installed 32 new OGM systems and brought back 16 during the year. How should we look at the number of nanochannel array flow cells to be sold this year? Do you expect that to be relatively flat as well?

Erik Holmlin: No. I would say that when you look at the revenue growth that we are forecasting, that revenue growth is going to be driven by new systems, of course, and consumables at existing customers. I would expect the consumables volume range to likely track with the revenue growth, which is a wide range, but that is our expectation. We were flat year over year on total consumables volume. When we look at what routine users did, we do see that routine users grew in 2025 over 2024, and keep in mind that we were constrained with supply at the end of the year. It is nothing that is particularly concerning.

It is a supply constraint that will work its way out over the course of the next couple of quarters. If we were not up against that supply constraint, we would have had additional units growth.

Yi Chen: Okay. And your guidance for 2026 provided $30 million to $33 million, which translates to approximately 5% to 16% top-line growth. How many new OGM systems do you need to sell to achieve that level of growth? Is there any catalyst that you expect to occur in 2026 in order to achieve that level of top-line growth?

Erik Holmlin: Again, we are not going to put a number out there on systems. The reason is that we want to keep the focus on the productivity of the routine users, and we will be updating on some of the dynamics of that group over the year. If you look at total number of customers at the end of the year, 321, total systems installed, 387, and 32 systems shipped in the year, it is really about these 130 or so routine-use customers, 60 of which have validated an OGM protocol and roughly 55 are intending to do that at some point in the future.

How can we take that 55 and convert them over to the validated group, and then how can we expand revenues amongst the validated group? That is where we expect the growth to come from, and as long as we repeat on a year-over-year basis some of the same dynamics, we will hit these numbers. From a catalyst perspective, a big catalyst is the increase in the price determination for the hematologic malignancy CPT code—a 47% increase—from about $1,200 to about $1,800. That became effective 01/01/2026, and we have seen the positive effects of the originally priced code, and we expect this higher price to accelerate adoption and utilization more. That is a major catalyst.

Yi Chen: Okay. Got it. Thank you.

Operator: Thank you. And this concludes our Q&A session. I will pass it back to Erik for final comments.

Erik Holmlin: Thank you, Carmen, and thank you, everybody, for joining. We look forward to updating folks on our progress in 2026 in the not too distant future. Thank you very much.

Operator: Thank you for participating, and you may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.