908 Devices at Canaccord Genuity Conference: Strategic Shift to Defense Tech

On Wednesday, 13 August 2025, 908 Devices (NASDAQ:MASS) presented at Canaccord Genuity’s 45th Annual Growth Conference, unveiling its strategic transformation into a public safety and defense technology company. The company, previously a broad instrumentation provider, is now focusing on handheld chemical detection devices. While the shift promises growth and profitability, challenges such as divestiture impacts and market competition remain.

Key Takeaways

• 908 Devices is transitioning to focus on public safety and defense, divesting from its desktop business.
• The company projects 13-17% revenue growth this year, accelerating to over 20% next year.
• A robust balance sheet, with $119 million post-divestiture, supports their strategic objectives.
• Expansion of their handheld product line from one to five devices, with a sixth anticipated.
• International revenue growth is expected to increase significantly, potentially reaching one-third of sales.

Financial Results

• Q2 Performance: The company exceeded internal expectations, although specific details were not disclosed.
• Divestiture Impact: The sale of the desktop portfolio generated $70 million.
• Cash Balance: Reported $119 million at the end of Q2, with expectations to maintain over $110 million by year-end.
• Revenue Growth: Projected at 13-17% for the current year, with an acceleration to over 20% in subsequent years.
• Gross Margin: Aiming for mid to high 50% adjusted gross margins.
• EBITDA and Profitability: Targeting adjusted EBITDA profitability by Q4, with full-year profitability by 2026.
• Expense Reduction: Reduced square footage by 44% and headcount by 39% year-over-year.
• Revenue Diversification: Achieved a balanced sales mix across state, local, federal, and international accounts.

Operational Updates

• Manufacturing Consolidation: Operations centralized in Connecticut post-divestiture.
• Product Portfolio Expansion: Grew from one to five handheld devices, with the latest, Viper, launched in July.
• Device Placements: Over 3,300 devices placed in Q2, marking a 27% increase.
• Partnerships: Collaborated with Smith Detection on the AVCAD program.

Future Outlook

• Product Pipeline: Plans to expand the handheld portfolio to six or more products.
• Growth Catalysts: Focus on equipment modernization and upgrades, particularly with the MX908.
• DoD Opportunities: The AVCAD program could contribute over $10 million in revenue.
• Market Expansion: Scaling into new markets through OEM partnerships, including pharma and industrial QA/QC.
• International Growth: Anticipates international revenues, which were 25% of sales last year, to potentially reach one-third or more.

Q&A Highlights

• KAF Acquisition: Aims to secure supply chains, improve margins, and secure a $6.6 million customer contract over three years.
• NATO Europe Market: Growth opportunities seen due to increased defense spending, with a multi-million dollar order secured with Ukraine’s Ministry of Interior.
• Competitive Position: Competes with companies like Teledyne FLIR through a broad handheld portfolio and advanced detection capabilities.
• UAV and Unmanned Robots: Active participation in the DoD areas at the Indy 500.
• Cash Reserves: Believes they have sufficient cash for working capital and new product line deployment over the next one to two years.
• DHS and Border Patrol Sales: Anticipates positive impacts from the $150 billion appropriated for DHS and Border Patrol in fiscal year 2026.

For a detailed understanding, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: Hi, everyone. Good afternoon. My name is Osimohr, Aerospace and Defense Analyst here at Canaccord Genuity. And today, we are joined by hope it’s making noise.

Kevin Knopp, CEO, nine zero eight devices: Turned it off.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: You did say that was happening. We’re joined by Kevin Knopp, CEO and Joseph Griffith, CFO of nine zero eight devices. Ticker is mass. So I guess, I think just to start off, you wanted to go through our presentation just to begin, and then, I guess we can play with that and get to some q and a.

Kevin Knopp, CEO, nine zero eight devices: Sounds perfect. Yeah. Thanks so much for having us. Joe, brought one of our Mass specs, adding a little security to the room here today. But yes, thanks, Austin, for having us and letting us introduce nine zero eight devices to you and your defense tech following that’s out there.

So first, just a moment to take a look at our forward looking non GAAP statement. But what I’m excited to tell you about today is a journey we’ve been on. And since about five months ago, we really have been working on transition of nine zero eight devices from a more broad instrumentation provider into a more innovative public safety and defense tech company. We call this the launch of nine zero eight devices two point zero and we’re really excited to kind of walk through this next chapter with you in the minutes that we have following. What we’ve done, it’s more than a restructuring, it’s really been a refocusing and a transformation of the company and we’ve really redefined and focused the company around purpose built handheld devices for chemical detection in the public health, safety and defense markets.

And nine zero eight Devices two point zero really brings a much sharper focus, stronger financials and a more clear operational alignment. So there’s four areas, four themes that I’d like to touch on as we go through the following slides. One is that this transformation is now complete, and we are focused on our growth market area. We divested a set of products of a desktop business that did have exposure to NIH and biopharma and academia, and we no longer have that as part of 09/2008. So we’re now really streamlined around a set of handheld detection technologies that provide rapid field based analysis for higher impact applications.

With demand accelerating across the opioid crisis response, defense modernization and cross border security, we think we’re well positioned in a good place right now. Number two, I want to hit on is acceleration. Backed by those secular tailwinds, we have a pretty strong innovation pipeline of new handheld devices, and we have a rather large DoD program of record. We’re projecting 13% to 17% growth this year and projecting that, that accelerates to 20% plus next. Number third, I’d like to touch on is our execution.

We had a great H1 and we do remain on track to hit our adjusted EBITDA profitability target in Q4 of this year. That’s really powered by some gross margin improvements, operational streamlining. In the quarter, we did a lot of work to consolidate our manufacturing into one Connecticut location post the divestiture. And now we’ve reduced our footprint of square footage by about 44, and we reduced our employees year over year headcount by about 39%. Number four is that we are pursuing a platform technology.

It’s a platform technology that’s focused on our handheld devices at the core, but we absolutely have the ability to scale into additional markets and opportunities. These are OEM and funded partnerships where we do have efforts today in in pharma and industrial QAQC, but these are also collaborations and integrations with drones, UAVs, and other autonomous platforms. In fact, our our products, mass spec products, have actually flown on 40 successful trial missions on UAS class ones, and we’ve also been integrated onto multiple different quadripods, including the Boston Dynamics Spot robot. So we’ve got a much sharper and focused, but we really haven’t narrowed that longer term opportunity for us. We really see that we’ve set up a nice foundation and a clear runway for growth.

The handheld market that we’re working on, we’ve pegged at about $2,500,000,000 TAM by 2027. It’s large, it’s expanding. Our handheld revenue has grown at about a 23% CAGR since the time of our IPO. And we really believe we’re still in the early parts of market penetration. Second, we have a pretty comprehensive product portfolio now.

About eight months ago, we had one handheld device and we now have five. All these are designed for points of need chemical analysis in critical health and safety applications, very complementary, based on two platforms of mass spec and spectroscopy. They’re really lab grade analytical technologies that we’re bringing out of their of the lab and and to that point of need location. They’re driven by the fentanyl and opioid crisis, where we serve frontline responders, law enforcement, interdiction teams, as well as toxic material, toxic material identification and detection. So that’s thinking of like measuring VOCs, measuring carcinogens, helping emergency personnel ex avoid exposure.

And then the third I’d like to touch on there is our fortified balance sheet. Post our divestiture, our balance sheet is now 119,000,000 at the end of Q2, which does give us the capacity to pursue new opportunities. So we feel that now the company is quite well capitalized, we’re built to scale and we’ve got some high conviction markets in front of us. We’re tackling some of what we think are the world’s greatest challenge and urgent challenge for public health and safety, and we believe that really demands a set of modern detection tools. So starting first with the opioid crisis, we’ve seen a dramatic evolution of that crisis in both its scale and complexity.

You hear a lot on the news about fentanyl, but it’s really not just about fentanyl anymore. You hear now about nitazines, xylazine, pink cocaine, many unprotectable precursors. Some of these are actually much more potent 100x or more than morphine. Overdose deaths, as you probably have seen in the news, have exceeded one hundred thousand per year. They have prompted a public health emergency.

So there’s absolutely a priority here to modernize our devices and our devices are very much aligned with that mission. The other area I would touch on is that consumer goods, battery fires, industrial processes, those are expanding, they reach releasing VOCs. In fact, now the leading contributor to occupational cancer and firefighter deaths is exposure to such compounds. So our devices are enabling a fast on-site identification of these hazardous gases, supporting better decisions and better protection. So each of those, you can imagine is is quite large of an opportunity and and quite large of a problem.

But when you couple that with the global insecurity and and concerns, you create a lot of military and homeland defense problems that require attention. So the ease of access of these compounds, the rise of these global tensions, AI driven chemical synthesis to enable these compounds to be reduced at much faster rates, and we’ve seen drone based delivery methods for some of these threats. It’s really become an imperative to modernize your solutions, modify your chemical detection capabilities and have something that you can trigger and expand and capable of being upgraded. The public safety and defense spending has been pretty robust globally, both in The U. S.

As well as across the globe. Police, fire, correctional facilities, homeland security, military are all seeing increased investment during these times. Recent legislative actions, the priorities in the one big beautiful bill and the related appropriations. They’re prioritizing domestic spending on border, customs, military, law enforcement and drug interdiction. And this isn’t limited to The US.

You’re probably also seeing out there in the news that in June, the NATO members decided to raise their target to a 5% of GDP for defense spending, and that’s a significant step up. There was a drive in the past to to reach 2%, and now there’s a long term target of 5%. So bottom line to us, that really means that we’ve got a pretty favorable funding backdrop for the kinds of field deployable detection tools we make both in The U. S. And internationally.

So our first product to address this, what Joe brought over there on the side is called our MX908. It’s on the bottom left of this this plot here. It’s our flagship for trace level analysis. It’s a completely new class of product that takes mass spec, which is really the gold standard of of chemical detection, usually lives in a large central lab, and it takes it out to the field. And it’s the first time that it’s been done in a in a handheld form factor like we have here today.

So you’re bringing true lab results, but to the point of need. Since we introduced that product in 2018, it’s grown at about a 21% revenue CAGR, and we’ve got over 2,800 of those MX908 devices out there across the globe. But in the past eighteen months, we’ve added to the portfolio and gone from one to four devices, and we just announced a fifth that I’ll tell you about in moment. So now we really have a comprehensive portfolio that’s a modern set of tools that covers hundreds of trace analytes and then thousands of toxic gases and then tens of thousands of bulk compounds. So that’s a pretty broad analyte portfolio panel that we can cover from detection to identification, and it’s across air and aerosols and surfaces, piles, liquids, anywhere you’d find these substances.

So, together, they’re really preventing they’re providing a much fuller comprehensive workflow for our customer set. And lastly, we’re doing more with the data. So each of these is collecting full spectral information about what’s in front of them as well as geolocation is providing information about the uses, the user of the products. And we’re actually starting to aggregate that information better to help our customers identify trends, better manage their fleet of devices and complete make actionable insights with it. So I’m really excited.

We’ve got a pretty in-depth road map. We have a start of something called a team leader that allows some basic functions in this area today, and we’re very excited to be continuing to expand that. As we do, we believe it creates just a more sticky ecosystem and a greater pull through opportunity for us. Our customers are on the front lines of response. They’re absolutely depending on us.

They’re depending on our team to be there twenty four seven with reach back capabilities. We’ve got over 3,300 devices deployed, 600 different accounts, 15,000 trained users across 55 countries. So we’re serving fire and hazmat, law enforcement and federal military professionals worldwide. In July, we launched Viper. So this is our newest product.

It’s a three in one handheld chemical analyzer. It’s built for high stakes environments like global customs agencies, really at the intersection of stopping dangerous materials while keeping the flow of trade moving efficiently. This combines two spectroscopy technologies, FTR and Raman, into a single confirmatory workflow and then combines it all together with our algorithms and machine learning capabilities to give one confident identification. It doesn’t require repeated sampling and just fits a bit easier into the workflow of these customers and really strengthens our handheld leadership and our relevance to our core customers. So we have multiple agencies that are testing this product now, and we see a clear path into pilots and then future enterprise opportunity.

Financially, it’s neutral to our gross margin and fits in with our disciplined profile. So just in minute here, I’d love to explain where our products fit in. So there’s basically the landscape has two broad categories of these chemical detection and awareness tools. First is a low tech sensor based category. These are these are minimum selective responsive, no identification capabilities, few analytes.

Think more of like a a test strip or a a column metric tube if you’re familiar or or a smoke alarm style sensor. But the second is where we play, which is advanced chemical detection. This is also where other life science tools and analytical instrumentation companies compete. We’re playing and winning there because we’re competitively positioned with a modern portfolio of products really designed around having not only the hardware, but also the the reach back service, the support these customers need twenty four seven for that forensics capability. So our edge really, I would say, comes from our our competitive positioning out of our culture.

We do a lot of innovation inside the company. And that’s enabling us with this to have a setup for accelerated growth because we are seeing multiple catalysts that are clear to us. The first catalyst of these three would be equipment modernization. That portfolio has expanded. As that portfolio expanded, we can go after over 15,000 placements that are out there of legacy technology that we believe we can upgrade to our technology, so a significant near term.

Second is we have a next generation of the product that Joe brought with you here to show you today. It’s about half its size, half its weight, lower cost of goods and higher pull through opportunity. And again, if there’s 2,800 out there, we do expect to spawn an upgrade cycle. And then third is the program we’ve been partnered with Smith Detection. So this is a DoD program called AVCAD, which is an aerosol vapor chemical identifier program.

For twenty four months, over the past, we delivered 100 component sets to Smiths to support initial low rate production, and we’re looking for notice to proceed to the next next phase. So this has a possibility of delivering over $10,000,000 of revenue for us as we ramp into the future years. So takeaway here is we’ve got really three great catalysts and they’re combined with some powerful secular tailwinds. Now I want to just take the last few minutes of the talk to walk through the launch of two point zero in more of a quantifiable way of the business. And so if you just take a moment and look back where we were in 2023, we had one handheld product, we had a reasonable installed base, we had $38,000,000 of equivalent revenue from our continuing operations, reasonable adjusted margins.

But we while we had solid cash, we were consuming $30,000,000 of cash annually from our operations. So if you look forward to today, post our transformation and our 2025 expectations, we’ve gone from one to four products. And now as of July, a fifth handheld product. And in Q2, we have over 3,300 devices placed, a 27% increase. And then we have a meaningful step up we anticipate on a full year basis targeting 13% to 17% growth.

It lands us into the mid to high 50% adjusted gross margins, and we believe we’re on track for adjusted EBITDA positivity in Q4 of this year. So dramatic improvement in in our minds here. We’ve secured the cash balance with greater than a $110,000,000 anticipated as we did divest that for $70,000,000, our our desktop portfolio. So we’ve expanded our handhelds, we’ve focused our efforts and we’ve improved our margins. So if you think about where we’re headed and you look at 2026 and beyond, we’re going to be going from one to six plus products of our handheld portfolio, massive opportunity for tens of thousands of placements.

Top line projected to accelerate to 20% plus with the three catalysts that I just went through, equipment modernization, launch of the Next Gen MX and the production phase of our U. S. DoD AvCAD program. And we also further anticipate adjusted gross margin expansion year over year improvement that we’ve been seeing continuing and the full year benefit from the facility consolidation that we just completed in Q2. And importantly, 2026 will be our target for our first year of being a full year profitable.

So critical milestone for us, very exciting time for us here at nine zero eight. So in many dimensions, we’ve really solidified our business, if not created a step change for the better, moving from one to four to five onto a path of six plus products. We have an expansive TAM that we’re going after. We’ve dramatically reduced our customer concentration over this period. And as we’ve gone from the majority of our sales being concentrated in one large U.

S. Federal base to a much more balanced across the accounts of state and local, U. S. Federal and international. So we’re seeing good expansion across there.

And our adjusted gross margin, again, seeing multi years of stepwise improvement. So that’s driven by mix, scale and the new operational efficiencies that we have. Our OpEx has gotten more productive and our adjusted EBITDA positive target for this year and our cash on hand is projected in 2026 to remain solid. So we had a pretty good start to the year. We had a strong start to the first half and in Q2, we overachieved our internal expectations.

And a lot of details out in the public, so I’ll just move through this. So we got a little time for questions. And really just in closing, the actions we’ve taken really feel we’re on a much much more improved trajectory, much tighter trajectory. We really feel we’ve fortified the investor thesis for where we’re going behind nine zero eight devices. We’ve gone from this broader multi segment platform to a much more focused high impact company, and we’ve really got clear target markets now in the public safety and defense tech area, stronger margins, simplified operating model and very close to the path to profitability.

So thank you very much. Appreciate the quick opportunity to introduce 908.2.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: All right. So I guess just to start off here, what can you tell us about the acquisition of manufacturing and the FTIR components for your supply chain? And have you been impacted by the China trade war at all from germanium?

Joseph Griffith, CFO, nine zero eight devices: Yes. The KAF acquisition has been an exciting one we announced and closed it in early July. And in many ways, it was to secure the supply channel around our FTIR products to really bring in an opportunity to improve gross margins, keep production here in The U. S, where the majority of our production is done today, is in Stamford, Connecticut. We’re in Danbury today.

And alongside it, we were able to secure a customer relationship. There was an existing customer of nine zero eight, also a customer of KAF, where we can get $6,600,000 over a three year period, really securing one of the key elements of our revenue, about 2,000,000 a year of revenue.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: Give you’ve already talked about this to some degree, but given the expected step up in NATO European defense spending, which they’ve now committed to 5% of GDP, how do you view the the NATO Europe market relative to the core US market today?

Kevin Knopp, CEO, nine zero eight devices: I think it’s a great area that we see a lot of growth happening over the first half. We had had seen some key wins there. We were fortunate to place a multimillion dollar order over $1,000,000 with Ukraine, Ministry of Interior. We’ve got several others in the pipeline. We’ve been part of some of the NATO stockpile programs.

So we do see it growing. Last year, outside of North America, was about 25% of our sales was outside North America, absolutely an area we can continue to invest and drive growth with those positive macros.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: How do you view yourself from a competitive perspective relative to like Teledyne FLIR?

Kevin Knopp, CEO, nine zero eight devices: Yes. Great company, many great companies out there. I think what you’d find from 09/2008 is that we’ve got quite a portfolio now, in many cases, broader than large cap tool companies in this space with the set of handhelds, the set of advanced chemical detection capabilities. So what we do with again, this is a only handheld mass spec that’s out there. And then if you look at the innovations that are occurring in the modernization that’s occurring with our FTR platforms, it stands apart.

It stands apart in its size and weight compared to competitive offerings. And importantly, as I mentioned, that service component and having that workflow solution where they can call you twenty four seven is also quite highly valued.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: You touched on this a little bit in the presentation, but can you just go into a little bit more detail on the current opportunities you see before you both in UAVs and unmanned ground robots?

Kevin Knopp, CEO, nine zero eight devices: Yeah. It it’s a great thing. So we’re absolutely focused on on handheld devices, but as I did briefly mention in the presentation, there’s a host of other areas that we can continue to take these modernized tools and technologies. That mass spec, again, being the only handheld, all equivalent lab systems are much larger. I I don’t know this for a fact, but I’m pretty darn sure it’s the only mass spec that has been flying around in a in a UAS system that has crashed into a tree on their chest trial.

So it’s great to have it be a consumable. Right? It’s great to be simplifying our devices down. So I think what you’d find is that the handheld is great, but as we go forward into the future, lot of opportunity with autonomous platforms, whether they be ground vehicles, whether they be, ocean going vehicles, or whether they be, in the air. So we are participating as collaborating on on part of the DOD areas at the Indy five hundred, this past May.

We had our device on a quadripod that was going through measuring the tunnels and securing the tunnels and being used by the local law enforcement capabilities there.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: Could you just comment you have a current cash balance of about $119,000,000 Do you expect to have sufficient cash to support working capital and deployment of new product lines over the next one to two years?

Joseph Griffith, CFO, nine zero eight devices: Absolutely, yes. To support we’re expecting to have $110,000,000 plus at year end to support that 20% plus growth opportunity in 2026. We definitely feel we have enough cash and runway and optionality as it makes sense, but definitely focused on getting to our internal target and external of Q4 adjusted EBITDA positive and then full year 2026. So good to have that healthy balance sheet post the divestiture of our desktops.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: So could you talk a little bit about the evolution of nine zero eight from being primarily a medical devices business into being a public safety and defense technology product business? And how do you view the revenue mix of being as being between like defense, public safety and industrial?

Joseph Griffith, CFO, nine zero eight devices: Yes. It’s been a shift where historically, a good percent 75% of our business was in the forensics, the MX908, it was the FTIR products. And now post divestiture, we’re really doubling down and focusing with a lot of market tailwinds that help us from a funding perspective. So we have a very experienced sales team, both from a state and local, and about half of our revenue in the first half was through state and local opportunities. International, I think we have opportunity where it was only 25% of our revenue last year to maybe get that up to a third or maybe greater in the future.

And then some of those key federal military kind of DoD type customers with year end medical spending. And the spending has increased with the big beautiful bill and everything alongside. So excited at what lays ahead in the groundwork that we’ve done here in ’25.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: I guess just the last question here. Can you talk about some of the advantages and applications of Viper and Explore?

Kevin Knopp, CEO, nine zero eight devices: Yeah. I’d be happy to to touch that one. So the advantage of Viper is that it’s a product designed for global customs organizations. It’s designed to measure bulk compounds. So in a in a custom situation, something across the border, an unknown solid liquids, it’s designed to measure it with two orthogonal technologies and then tie it together with their proprietary algorithms as the third technology.

So takes the guesswork out of it for our customer. It makes a more seamless workflow that’s confirmatory. Now Explorer uses a similar FTIR technology but geared to gases and very much being used by firefighters. It was our top selling product in in q two. It was a record quarter for us in q two.

It’s a small handheld device that’s used to measure 5,000 different volatile organic compounds. Again, concerns with safety of the responders and their exposure to carcinogens, but also being used to detect a leak in a pipe, gas, a cylinder, a response to a chemical spill. So very differentiated product. The next closest product to that would be a much larger backpack size that is not widely fielded and developed because of that limitation. So both great, very differentiated products.

Viper just coming out in July, so we have a lot of hopes for that and and aspirations in 2026.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: And I would presume the $150,000,000,000 appropriated for DHS and Border Patrol in fiscal year twenty six should be incrementally positive for Viper sales?

Kevin Knopp, CEO, nine zero eight devices: I think so. I mean, there’s a good chunk of that going into NII, DHS NII, which is non intrusive inspection, ports of entry, customs locations, border patrol, those types of applications. So, you know, there should be dollars available. Fentanyl is clearly a priority. That’s what that indicates.

And we believe we’ve got the portfolio set up to attack that.

Osimohr, Aerospace and Defense Analyst, Canaccord Genuity: Fantastic. Well, thank you so much, Kevin and Joseph, for coming by the day and talking to us about nine zero eight devices. So thank you.

Kevin Knopp, CEO, nine zero eight devices: Thanks a lot.

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