Oxford Nanopore reports stronger-than-expected first half, shares slide

(Sharecast News) - Oxford Nanopore Technologies shares were in the red on Tuesday morning, even after it reported a stronger-than-expected first half, with revenue growth across all regions and customer segments and a narrowed loss as it reaffirmed its full-year guidance.

The FTSE 250 sequencing company posted revenue of £105.6m for the six months ended 30 June, up 25.6% year on year on a reported basis and 28% at constant currency.

Growth was broad-based, led by Asia-Pacific and EMEAI, which rose 38.3% and 32.7% respectively, while the Americas grew 16.9% despite what the company described as "ongoing uncertainty in the US research environment".

Clinical markets grew 52.9%, followed by Applied Industrial, BioPharma and Research.

Adjusted EBITDA losses narrowed to £48.3m from £61.7m a year earlier, reflecting improved gross profits and cost control.

Its gross margin slipped by 60 basis points to 58.2% after a one-off £3.3m non-cash inventory charge and currency headwinds.

The net loss for the period reduced to £71.8m from £74.7m in the prior year.

"We delivered a strong first half performance, with broad-based growth across all geographies and customer segments," said chief executive Gordon Sanghera.

"Revenue grew ahead of expectations, driven by increasing demand in both Research and Applied markets and further adoption of our high-output PromethION platform by customers across a wide range of applications.

"We also made clear progress on our path to profitability, with improved EBITDA performance reflecting expanding gross profit and disciplined cost control."

The company highlighted operational progress including a new partnership with Cepheid, a subsidiary of Danaher, to develop automated infectious disease sequencing solutions, and advances in oncology and rare disease applications, industrial synthetic biology, and biopharma quality control.

Oxford Nanopore said it had refined its commercial strategy to target high-priority Applied and Research markets worth an estimated $13bn to $14bn.

The firm said ended the half with £337.3m in cash and investments, down from £403.8m at year-end, but said cash flow was improving as more customers opted for capital purchases rather than leasing.

Sanghera confirmed the company remained on track to meet full-year 2025 targets and medium-term objectives.

Those included 20% to 23% revenue growth this year, adjusted EBITDA breakeven by 2027, and positive cash flow in 2028, supported by revenue growth of over 30% per year at constant currency.

At 0943 BST, shares in Oxford Nanopore Technologies were down 3.51% at 178.8p.

Reporting by Josh White for Sharecast.com.