Oxford Nanopore shares dip despite narrower H1 loss, confirmed guidance

Investing.com -- Oxford Nanopore posted narrower first-half losses and reaffirmed both its full-year guidance and medium-term outlook. Still, the company’s shares dipped more than 5% in London trading, possibly because investors were hoping for a guidance upgrade. 

Revenue for the first six months came in at £105.6 million, up 28% at constant currency and 25.6% on a reported basis, ahead of expectations.

Growth was broad-based, with APAC and EMEAI leading at 38.3% and 32.7% respectively, while the Americas rose 16.9% despite ongoing U.S. research market uncertainty.

Revenue grew across all customer end markets, led by Clinical, up 52.9%.

By product, PromethION sales surged 59.6% year-on-year, while MinION declined 3.1% and Other revenue rose 14.2%.

The highlight of the report was the adjusted EBITDA loss, which narrowed to £48.3 million from £61.7 million a year earlier, helped by higher gross profit and tighter cost control. According to RBC Capital Markets, this figure is £6 million better than the consensus estimate. 

"We think that shares should be modestly up on better-than-expected EBITDA losses; although there may have been some expectation of a guidance upgrade, we also note that shares corrected in the last couple of weeks after a strong run since July," RBC analysts led by Charles Weston said in a note. 

Net loss reduced to £71.8 million from £74.7 million.

Gross margin slipped 60 basis points to 58.2%, with gains from margin expansion initiatives offset by a one-off £3.3 million inventory charge, mix and currency headwinds.

Cash and liquid investments stood at £337.3 million at the end of June, down from £403.8 million at year-end, though cash flow improved as more customers shifted to capex purchases.

"We delivered a strong first half performance, with broad-based growth across all geographies and customer segments," said Gordon Sanghera, CEO of Oxford Nanopore, highlighting further adoption of the PromethION platform.

He said that improved EBITDA reflected “expanding gross profit and disciplined cost control."

The company’s guidance for 2025 and medium-term targets was reaffirmed, including revenue growth of 20–23% this year and adjusted EBITDA breakeven in fiscal year 2027 (FY27).

"In light of the strong H1 result, some investors may have been hoping for an upgrade at these results, but in light of difficult academic markets, we think that continued reiteration is a good sign.