Mesa Labs Q3 2023 Earnings Report
Key Takeaways
Mesa Labs reported a slight decrease in revenues for Q3 2023, but experienced growth in operating income and non-GAAP adjusted operating income. The company faced headwinds from currency exchange rates and COVID-19 impacts, but saw core organic revenue growth of 4.6%.
Revenues decreased by 1%, but non-GAAP core organic revenues grew by 4.6%.
Operating income increased significantly by 235%.
Non-GAAP adjusted operating income excluding unusual items decreased by 7%.
Clinical Genomics division was impacted by the closure of Sema4's expanded carrier screening business.
Mesa Labs
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Mesa Labs Revenue by Segment
Forward Guidance
Mesa Labs enters the fourth quarter with clear short-term priorities for each division, expecting long-term growth opportunities in the regulated phases of the biopharmaceutical life cycle and the clinical genomics market.
Positive Outlook
- Clinical Genomics will be aided by the launch of a hereditary deafness Class 3 IVD panel in China by Guanzhou Darui.
- The panel received Chinese National Medical Products Administration (“NMPA”) approval in early January.
- This is the first Class 3 IVD panel based on our MassArray platform to receive such approval.
- Many more panels are in the pipeline.
- Raw materials availability improvements should enable sequential top line growth in 4Q23.
Challenges Ahead
- New systems orders for both the Clinical Genomics and Biopharmaceutical Development divisions were below expectations for the quarter.
- Improving consistent sale execution in those divisions remains a short-term priority for the company.
- Economic uncertainty in calendar year 2023 requires balancing margins and long-term growth investments.
- The primary gap to our long-term target is the approximate 3.5% headwind from Sema4.
- The quarter was strongly impacted by the previously announced closure of Sema4’s expanded carrier screening, an approximate $8,200 annual headwind that began fully impacting the business in 3Q23.
Revenue & Expenses
Visualization of income flow from segment revenue to net income