Bionano raises 2025 OGM installation target to 25 as consumables and software revenue climbs 16%

Earnings Call Insights: Bionano Genomics, Inc. (BNGO) Q2 2025

MANAGEMENT VIEW

* CEO Robert Erik Holmlin described the second quarter of 2025 as “solid,” emphasizing the positive effects of the strategic shift made in September 2024, which prioritized supporting routine users of Bionano’s optical genome mapping (OGM) and VIA software over aggressive new instrument placements. Holmlin stated, “Bionano has become a digital pathology company,” focusing on cytogenetics and molecular pathology, with ambitions to expand into clinical and anatomic pathology.
* Holmlin highlighted that “optical genome mapping consolidates these workflows and the fusion analysis from molecular pathology into one digital workflow,” noting the role of AI-driven VIA software as a gold standard for analysis and reporting of variants. He added, “VIA is best-in-class for OGM analysis and widely accepted as a gold standard for CNV analysis for microarrays and sequencing.”
* The company’s strategy now centers on driving utilization among routine users, supporting the existing installed base, expanding VIA adoption, building reimbursement support for OGM, and improving profitability through cost reductions and higher volumes. Holmlin reported, “Total revenue for the second quarter was $6.7 million, a decrease of 13% when compared to the second quarter of 2024, which included $700,000 in revenues from discontinued services.”
* Holmlin announced the release of VIA 7.2 and Solve 3.8.3 software with updated features and AI-driven workflows, describing them as potential "game changers for analysis of these conditions."
* Holmlin shared, “We are reiterating our full year revenue guidance of $26 million to $30 million. We expect Q3 revenues to be in the range of $6.7 million to $7.2 million. And given the 16 new OGM systems installed already in the first half of the year, we are raising our expectations for new OGM installations in 2025 to be in the range of 20 to 25 compared to the prior range of 15 to 20.”

OUTLOOK

* Full year revenue guidance remains $26 million to $30 million, with third quarter revenue expected between $6.7 million and $7.2 million.
* The company raised its OGM installation guidance for 2025 from 15-20 to 20-25, following 16 new installations in the first half.
* Holmlin stated, “We expect to see continued margin expansion over time but expect to remain around the current levels for the near term.”

FINANCIAL RESULTS

* Second quarter revenue was $6.7 million, down 13% year-over-year, attributed in part to $700,000 in discontinued services from the prior year. Adjusting for these, the year-over-year decrease was 5%.
* Flowcell sales reached 7,233 units, marking a 17% increase compared to the same period last year. Holmlin emphasized, “We’re extremely pleased to see this double-digit growth in flowcell sales year-over-year.”
* Non-GAAP gross margin improved to 52% from 35% a year ago.
* Non-GAAP operating expenses were $8.8 million, reflecting a 53% reduction year-over-year. Holmlin noted over $100 million in annual non-GAAP operating expense reduction and a headcount decrease of more than 300 people since Q2 2023.
* Consumables and software revenue grew 16% year-over-year in Q2, now representing 73% of total product mix, up from 55% a year ago.
* The company ended the quarter with $27.4 million in cash, cash equivalents, and available-for-sale securities, $11 million of which is subject to restrictions.

Q&A

* Michael Okunewitch, Maxim Group: Asked about VIA software adoption among OGM users and opportunities to expand its use. Holmlin responded that VIA is “installed in less than -- maybe around 1/3” of all OGM systems, but adoption is higher among routine users, with significant opportunity for further expansion.
* Okunewitch also inquired about marketing VIA to non-OGM users and its role as a cross-selling opportunity. Holmlin explained, “We do sell a substantial amount of software for non-OGM applications… we do believe that those customers… can expand their relationship with the company and become OGM users.”
* Okunewitch queried about VIA’s AI component. Holmlin explained that AI accelerates and improves variant analysis by integrating with databases and publications.
* Yi Chen, H.C. Wainwright: Asked about returned systems. Holmlin clarified that returned systems were primarily from research-focused, non-routine users under reagent rental contracts, and that return rates among new, routine users are expected to be “very close to 0.”
* Chen asked about the impact of the second Category I CPT code for OGM. Holmlin explained that the new code applies to constitutional genetic disorders, with draft pricing expected in September, and could potentially drive differences in reimbursement.
* Vidyun Bais, BTIG: Asked about guidance conservatism and flowcell growth drivers. Holmlin attributed flowcell growth to focused customer support and training, noting ramp-up to routine use typically takes 6-9 months.
* Bais asked about partnerships or strategic interest. Holmlin replied that Bionano is “on the radar screen of strategics,” with ongoing discussions, but remains committed to its digital pathology transformation strategy.

SENTIMENT ANALYSIS

* Analysts expressed cautious optimism, focusing on adoption rates, expansion opportunities, and the implications of new reimbursement codes, with a neutral to slightly positive tone evidenced by congratulatory remarks and probing for growth drivers.
* Management maintained a confident tone, emphasizing strategic execution and cost discipline. Holmlin used phrases such as “we feel very confident” and acknowledged conservatism in guidance, while highlighting milestones and growth in core metrics.
* Compared to the previous quarter, management’s confidence has grown, particularly regarding cost reduction, margin improvement, and the new CPT code’s potential impact.
* Analyst sentiment shifted from cautious concern about revenue declines and customer attrition in Q1 to greater interest in utilization rates, new product features, and strategic opportunities in Q2.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter saw Bionano reiterate its revenue guidance but raise its OGM installation outlook from 15-20 to 20-25 for 2025, reflecting improved confidence.
* Flowcell sales reversed the Q1 volume decline, growing 17% year-over-year in Q2, compared to a 15% decrease in Q1.
* Non-GAAP gross margin expanded from 46% in Q1 to 52% in Q2, and non-GAAP operating expense increased slightly from $8.5 million in Q1 to $8.8 million in Q2, but year-over-year reductions remain significant.
* Analysts in Q2 focused more on adoption and product evolution than on headcount cuts or cost controls, as in Q1.
* Management’s tone has shifted from stabilization and disruption recovery in Q1 to emphasizing growth in utilization, software adoption, and expanded reimbursement opportunities in Q2.

RISKS AND CONCERNS

* Management identified ongoing work to expand VIA adoption among all OGM users and to increase routine use.
* There remains uncertainty regarding the pricing of the new CPT code for constitutional genetic disorders, with draft pricing expected in September.
* Attrition risk persists with reagent rental contracts, but management expects it to be minimal among new routine users.
* The company continues to monitor funding constraints and market conditions that could affect research-oriented customers and installations.

FINAL TAKEAWAY

Bionano Genomics reported progress on its strategic focus by driving higher utilization among routine users and expanding gross margins, supported by a significant reduction in expenses and headcount since 2023. The company reaffirmed its full-year revenue guidance and raised its OGM system installation target, highlighting strong growth in consumables and software revenue. Management continues to prioritize expanding VIA software adoption and supporting reimbursement initiatives, with confidence in the digital pathology transformation strategy and expectations for ongoing margin improvements and operational efficiency.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/bngo/earnings/transcripts]

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