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New words:
ASU, authorization, award, awarded, bankruptcy, beginning, Benjamin, Bioscience, CAGR, classified, climate, Code, compound, conclusion, Curio, determinative, difficult, disaggregated, disaggregation, discontinue, Dr, Dusseldorf, earn, earned, employing, enforceable, enforcement, enforcing, engineering, Euro, FASB, Final, foregoing, forfeited, France, high, Hindson, Index, industry, jury, leave, light, lost, Mapping, Medical, overturned, percentage, permitted, policy, possessing, posted, posting, practice, pre, predatory, President, PTAB, published, reaching, reconciliation, rehearing, renewed, resolved, royalty, Russell, Scientific, Sector, Seeker, server, Shareholder, Shehnaaz, stay, stayed, subsequent, Suliman, Sweden, temporarily, TSR, ultimate, urged, vary, Wilbur, willfully
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accretion, accurately, acquiring, adverse, agreement, anniversary, assure, attorney, calculated, capacity, chain, collateral, commenced, Comparative, competitive, compliance, correct, created, deducting, demand, detailed, discount, expanding, geopolitical, Hong, identified, incentivize, inclusion, inflation, initial, joint, Kong, macroeconomic, MLA, occur, occurrence, operate, outcome, pay, political, premium, rapidly, supply, terminate, threshold, tied, trailing, unanticipated, underwriter, underwriting, vendor
Financial report summary
?Competition
NanostringRisks
- Our operating results have in the past fluctuated significantly and may continue to fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.
- Our industry is highly competitive. If we fail to compete effectively, our business and operating results will suffer.
- The size of the market for our solutions may be smaller than estimated and new opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our solutions.
- We may not be able to develop new products, enhance the capabilities of our existing products to keep pace with rapidly changing technology and customer requirements or successfully manage the transition to new product offerings, any of which could have a material adverse effect on our business and operating results.
- Our business currently depends significantly on research and development spending by research institutions, a reduction in which could limit demand for our products and materially and adversely affect our business and operating results.
- We are significantly dependent upon revenue generated from the sale of our Chromium solutions, and in particular our Single Cell Gene Expression solutions.
- Doing business internationally creates operational and financial risks for our business.
- Our business in China subjects us to unique commercial, operational, competitive and regulatory risks.
- We may be unable to consistently manufacture our instruments and consumables to the necessary specifications or in quantities necessary to meet demand at an acceptable cost or at an acceptable performance level.
- We and our customers are dependent on single source and sole source suppliers for some of the equipment, components and materials used in our products and in conjunction with our products and the loss of any of these suppliers could harm our business.
- Our instruments, consumables and related components are specialized, complex and difficult to manufacture. We could experience production problems that impact our ability to manufacture and ship our instruments, consumables and related components, which would materially and adversely affect our business, financial condition and results of operations.
- Certain disruptions in supply of, and changes in the competitive environment for, raw materials integral to the manufacturing of our products may adversely affect our profitability.
- Undetected errors or defects in our solutions could harm our reputation and decrease market acceptance of our solutions.
- Our failure to effectively manage product transitions or accurately forecast customer demand could result in excess or obsolete inventory and resulting charges.
- If our existing and new products fail to achieve and sustain sufficient scientific acceptance, we will not generate expected revenue and our prospects may be harmed.
- If we do not sustain or successfully manage our growth and anticipated growth, our business and prospects will be harmed.
- We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain cash flows from operating activities in excess of our capital investment requirements or profitability.
- We depend on our key personnel and other highly qualified personnel, and if we are unable to recruit, train, retain and ensure the health and safety of our personnel, we may not achieve our goals.
- If our facilities or our third-party manufacturers’ facilities become unavailable or inoperable, our research and development programs could be adversely impacted and manufacturing of our instruments and consumables could be interrupted.
- We rely exclusively on commercial carriers to transport our products, including perishable consumables, to our customers in a timely and cost-efficient manner and if delivery of our products is disrupted, our business will be harmed.
- Costs or other factors related to our facilities and real estate could adversely impact our business.
- If we fail to offer high-quality customer service, our business and reputation could suffer.
- Our management uses certain key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions and such metrics may not accurately reflect all of the aspects of our business needed to make such evaluations and decisions, in particular as our business continues to grow.
- Investments and acquisitions could disrupt our business, cause dilution to our stockholders and otherwise harm our business.
- Seasonality may cause fluctuations in our revenue and results of operations.
- Our reliance on distributors for sales of our products in certain geographies outside of the United States could limit or prevent us from selling our products and impact our revenue.
- Uncertain economic or social conditions may adversely impact demand for our products or cause our customers, vendors and suppliers to suffer financial hardship, which could adversely impact our business.
- Inflationary pressures, and changes in foreign currency exchange rates, interest rates and market value of our investments, including marketable securities, could have a significant effect on results.
- Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.
- If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
- The continuing impact of "Brexit" may have a negative effect on our business.
- The illegal distribution and sale by third parties of counterfeit or unfit versions of our products or stolen products could have a negative impact on our reputation and business.
- The investment of marketable securities is subject to risks which may cause losses and affect the liquidity of these investments.
- Indebtedness may impair our financial and operating flexibility.
- Our products could become subject to more onerous regulation by the U.S. Food and Drug Administration (“FDA”) or other regulatory agencies in the future, which could increase our costs and delay or prevent commercialization of our products, thereby materially and adversely affecting our business, financial condition, results of operations and prospects.
- Enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business.
- We are subject to risks related to taxation in multiple jurisdictions and changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.
- Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.
- Ethical, legal, privacy and social concerns or governmental restrictions surrounding the use of the genomic and multiomic information and gene editing could reduce demand for our products.
- Our success will depend on our ability to obtain, maintain and protect our intellectual property rights.
- If we cannot successfully enforce our intellectual property rights, the commercial value of our products and technologies will be adversely affected and our competitive position may be harmed.
- We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property rights.
- We depend on certain intellectual property rights that are licensed to us. We may be unsuccessful in licensing or acquiring intellectual property rights from third parties that may be necessary to develop, manufacture and/or commercialize our current and/or future products or technologies.
- If we fail to execute invention assignment agreements with our employees and contractors involved in the development of intellectual property rights or are unable to protect the confidentiality of our trade secrets, the value of our products and technologies and our business and competitive position could be harmed.
- We may be subject to claims that we or our employees have misappropriated the intellectual property rights of a third party, including trade secrets or know-how, or are in breach of non-competition or non-solicitation agreements with our competitors.
- Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
- Changes in patent law could diminish the value of our patents in general, thereby impairing our ability to protect our current and future products, services or technologies, and could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our current or future patents.
- If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our competitive position may be harmed.
- Our solutions contain third-party open source software components and failure to comply with the terms of the underlying open source software licenses could restrict our ability to sell our products.
- We collect, process, store, share, disclose and use personal information and other data, which subjects us to governmental regulations and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business.
- If we or our critical third-party providers experience a significant disruption in our information technology systems or breaches of data security, our business could be adversely affected.
- We rely on on-premise, co-located and third-party data centers and platforms to host our website and other online services, as well as for research and development purposes and any interruptions of service or failures may impair and harm our business.
- We are subject to certain manufacturing restrictions related to licensed intellectual property rights that were developed with the financial assistance of United States government grants.
- We may become a party to intellectual property litigation or administrative proceedings that could be expensive, time-consuming, unsuccessful, and could interfere with our ability to develop, manufacture and commercialize our products or technologies.
- We are involved in lawsuits to protect, enforce or defend our patents and other intellectual property rights, which are expensive, time consuming and could ultimately be unsuccessful.
- Sales of a substantial number of shares of our Class A common stock by our existing stockholders could cause the price of our Class A common stock to decline.
- The multi-class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the completion of our IPO, including our co-founders, and may depress the trading price of our Class A common stock.
- Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our Class A common stock.
- Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.
- We may fail to meet our publicly announced guidance or other expectations about our business, which could cause our stock price to decline.
- The market price of our Class A common stock may be volatile, which could result in substantial losses for investors.
- Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.
- We have incurred and will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives and corporate governance practices, including maintaining an effective system of internal controls over financial reporting.
Management Discussion
- In this section, we discuss the results of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022. For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022.
- Revenue increased $102.3 million, or 20%, for the year ended December 31, 2023 as compared to year ended December 31, 2022. Instruments revenue increased $51.1 million, or 71%, to $123.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to higher volume of Spatial instruments sold. The revenues for the years ended December 31, 2023 and 2022 included twelve and three months of sales of Xenium instruments, respectively. Chromium instruments revenue decreased $10.7 million, or 18%, to $47.9 million primarily due to lower volume of Chromium instruments sold and changes in product mix. Consumables revenue increased $44.0 million, or 10%, to $479.6 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily driven by growth in both Chromium and Spatial consumables sales.
- Cost of revenue increased $89.0 million, or 74%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily driven by higher manufacturing costs of $79.0 million due to increased sales and higher costs of newly introduced products, $4.4 million of higher inventory write-downs and $4.4 million of higher warranty charges.