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Q1 2013 Earnings Call
May 01, 2013 5:00 pm ET
Gajus V. Worthington - Co-Founder, Chief Executive Officer, President and Director
Vikram Jog - Chief Financial Officer and Principal Accounting Officer
Doug Schenkel - Cowen and Company, LLC, Research Division
David C. Clair - Piper Jaffray Companies, Research Division
Sung Ji Nam - Cantor Fitzgerald & Co., Research Division
Peter Lawson - Mizuho Securities USA Inc., Research Division
David Ferreiro - Oppenheimer & Co. Inc., Research Division
Daniel L. Leonard - Leerink Swann LLC, Research Division
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Thank you. Good afternoon, everyone. Welcome to the Fluidigm Q1 2013 Earnings Conference Call. At the close of market today, Fluidigm released financial results for the 3 months ended March 31, 2013. During this call, we will review our results and provide commentary on recent commercial activity and market trends. Following these comments, we will host a Q&A session.
Presenting for Fluidigm today will be Gajus Worthington, our President and CEO; and Vikram Jog, our Chief Financial Officer. This call is being recorded and the audio version will be archived in the Investor section of our website. During the call and subsequent Q&A session, we will be discussing plans and projections for our business, future financial results and market trends and opportunities, including among others, expectations for the development of a single-cell and production genomics market, anticipated new product launches and guidance regarding expected 2013 total revenue, operating expenses, stock compensation expenses, capital spending and cash flow.
These statements are forward-looking and are subject to substantial risks and uncertainties that may cause actual events or results to differ materially from currently anticipated events or results. Risks relating to our business and operating results are contained in our Form 10-K for the year ended December 31, 2012, filed with the SEC and will be contained in our upcoming Form 10-Q for the quarter ended March 31, 2013. We advise investors to review these risk factors carefully. Fluidigm disclaims any obligation to update these forward-looking statements. During the call, we will also present certain financial information on a non-GAAP basis. Reconciliation between GAAP and non-GAAP results are presented in a table accompanying our earnings release, which can be found in the Investor section of our website. With that, I will now hand over the call to Gajus.
Gajus V. Worthington
Thank you, Un. Hi, everyone. Good afternoon and thank you for joining us today. 2013 is off to a great start. Q1 was strong for Fluidigm on essentially every front. We grew our total revenue by 33% year-over-year to $14.5 million as the momentum behind single-cell genomics continue to build and more production genomics customers embrace our products. We expanded product margins to 70%. And for the first time in the company's history, I am simply thrilled to point out that we generated little cash even excluding the effect of the sale of our Verinata investment. All in all, we executed well operationally and commercially across the globe. This, in combination with our strategic focus on single-cell genomics and production genomics, helped to drive industry-leading growth in the quarter.
Our growth was balanced across instruments and consumables. Instrument revenues were up 34% year-on-year. This was primarily driven by the C1 Single-Cell AutoPrep System. Consumables revenue was up 31% year-on-year due to increased demand from agricultural and clinical laboratory customers. We believe 2013 will be a watershed year for single-cell genomics. This is based on multiple indications from the market, not the least of which is our substantial growth in the sector wherein our revenues nearly doubled year-on-year. The external indicators are also strong. Market enthusiasm for single-cell genomics range from key opinion leader endorsements at high-profile scientific meetings to the announcement of the third Single-Cell Genomics Center at the Sanger Institute in the United Kingdom to a growing publication base supporting high-impact science.
Real demand for our single-cell genomics products made this the fastest-growing area of revenue for Fluidigm in the quarter. We estimate roughly 40% of our revenue is driven by single-cell genomics this quarter, in line with Q4 of 2012. This revenue estimate includes our C1 Single-Cell AutoPrep System sales and associated consumables, as well as BioMark HD and associated consumables motivated by single-cell gene expression. This is a fantastic result but I want to remind everyone that we had no revenues from the C1 in Q1 of 2012, as we launched the system in late Q2 of 2012. So we don't expect this kind of growth throughout the year.
Our BioMark business also contributed a significant fraction to our single-cell genomics revenue base and to growth too. Approximately 70% of BioMark HD units sold in the quarter were motivated by single-cell gene expression, and 30% of C1 sales were bundled with the BioMark or BioMark HD. With our full workflow solution for single-cell genomics, we have come to market with a solution that fills an unmet need at the right place and at the right time. Our early C1 adapters have been very actively ramping up their single-cell research over the past few months. Some of our customers have begun to publicly share their data. And we know of several publications in the pipeline and the science behind them is fantastic.