OraSure Technologies, Inc. (NASDAQ:OSUR) Q3 2023 Earnings Call Transcript

Carrie Eglinton Manner : Yes, Casey, I’ll start. On molecular services, this is a business that’s been was very impacted in COVID. This is microbiome sequencing services. We think a super interesting part of Precision Health, but still very nascent. And during COVID, what I think everybody experienced was a real sort of delay in funding and pause on funding. And what we’re looking for I think which everybody else is looking for as well are those green shoots of return. We do have some large customers doing really, really strong work. But I’d say we do — we aren’t seeing the full recovery in that yet. That’s sort of — who knows if it’s the bottom we all hope it is. We don’t know on timing, but we believe in the recovery of it.

We think it’s an interesting part of Precision Health, but it’s — I think it’s just one of the most impacted that we’re all looking to the return to investment in the space both academic and with I don’t know. I think that’s probably kind of the color on it, but we’re looking for that return just like everybody else.

Ken McGrath : There is some lumpiness related to certain clients. But yes that’s the going forward.

Casey Woodring: Okay. And then just last question for me just sticking with molecular side. So in the past 4Q has seasonally been your strongest quarter given the consumer genomics holiday season benefit, I understand you guys have sort of flattened those contracts out over the years. So just kind of curious on that kind of customer lumpiness. It sounds like there’s still some seasonality in that business reflected in the 4Q guide. So I just want to see if that’s the case. What the kind of fluctuation there is with some of those larger customer orders? And then what the right run rate is for that business in 2024, if you have any color there?

Ken McGrath : Yes. We’re not ready to guide to 2024 at this time, but I think your thesis is right on — we had a little bit of lumpiness in Q3 where we received some customer orders in Q3. And that’s what’s driving our guidance for Q4 within that particular area.

Carrie Eglinton Manner : And I the only color, I would add is I’d say, we’re less dependent on the few large customers. If there’s sort of any — the silver lining in this is that we’re having to add a lot of new customers to fill that softness that we’ve seen in the few large customers. We continue to do that, we believe in the genomic sequencing in segments. And I think there are so many players you ca n look at how that market is recovering. Again, I’d say like microbiome and sequencing services, green shoots there stronger recovery and not as big a low as microbiome, but I’d just say we are excited about adding new customers to fill what was softness in a number of very large customers.

Casey Woodring: Great. Thank you for taking my questions.

Carrie Eglinton Manner: Thanks.

Operator: One moment for our next question. The next question comes from Brandon Couillard with Jefferies. Your line is now open.

Carrie Eglinton Manner: Hi, Brandon.

Matt Stanton: It’s Matt on for Brandon. Thanks for taking the questions. On the base business nice growth here in the quarter. It looks like the midpoint of the guide kind of calls for flash growth. I appreciate you’re not guiding for next year, but do you expect that the core business could grow in 2024 and maybe some of the key drivers behind that? And then the three new infectious disease tests you talked about launching, I mean could those be meaningful contributors to the business next year? Thanks.