Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Maravai LifeSciences Holdings Inc (MRVI, Financial) reported $65 million in revenue for Q3 2024, with $50 million coming from the Nucleic Acid Production (NAP) segment.
- The company achieved a key milestone by completing its largest service build to date, producing 26 grams of mRNA material for a preclinical cell and gene therapy customer.
- Maravai LifeSciences Holdings Inc (MRVI) has introduced 21 new products year-to-date, expanding its discovery mRNA synthesis services offerings.
- The company has expanded its TriLink-owned IP around co-transcriptional capping technology, holding over 20 US and international patents.
- Maravai LifeSciences Holdings Inc (MRVI) has signed a definitive agreement to acquire the DNA and RNA businesses of PCNA BiTE, enhancing its mRNA offering for early-phase discovery work.
Negative Points
- Q3 2024 results were slightly below expectations due to customer-requested program timing shifts and muted demand in research and discovery products.
- The company took a non-cash goodwill impairment charge of $154 million, impacting its financial performance.
- Maravai LifeSciences Holdings Inc (MRVI) lowered its expected revenue range for 2024 to between $255 million and $265 million, a 5% reduction from previous guidance.
- The Biologic Safety Testing (BST) segment continues to be pressured by a soft bioprocessing market backdrop.
- The company anticipates adjusted EBITDA margin to decline to 16% to 18% due to lower revenue projections in higher-margin products.
Q & A Highlights
Q: How much of the firm commitment is expected to be fulfilled by Q4?
A: Kevin Herdez, CFO: We have roughly another $14 million to ship in the fourth quarter, fulfilling the original expectation.
Q: What factors are influencing the sequential decline in NAP revenue from Q3 to Q4?
A: Kevin Herdez, CFO: The decline is due to a combination of project push into 2025 and a weaker market, with the project push accounting for a couple of million dollars.
Q: Can you discuss the swing factors for Q4 in the NAP business and any revenue associated with the acquisition for 2025?
A: Kevin Herdez, CFO: The acquisition is primarily a software acquisition with low single-digit million revenue, not dilutive to our overall business. For Q4, we are monitoring the rates of our discovery business and the potential for larger drop-in orders, which have not occurred this year.
Q: How should we think about guardrails for margin enhancement given your business is largely nondiscretionary?
A: Kevin Herdez, CFO: Our margin expansion is tied to revenue growth. We have a fixed cost base, including labor and facility costs, which supports our business model. Margin improvement will come from filling the factory and leveraging our cost base.
Q: Do you expect any changes to government contracts following the recent election outcome?
A: Trey Martin, CEO: We do not expect changes. BARDA recently reiterated their 10-year arrangement with us, which should not be subject to political changes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
