Q4 2023 Akoya Biosciences Inc Earnings Call
Participants
Priyam Shah; Head, Investor Relations; Akoya Biosciences Inc
Brian McKelligon; President, Chief Executive Officer, Director; Akoya Biosciences Inc
Johnny Ek; Chief Financial Officer; Akoya Biosciences Inc
Subbu Nambi; Analyst; Guggenheim Securities LLC
Kyle Mikson; Analyst; Canaccord Genuity Group Inc.
Tejas Savant; Analyst; Morgan Stanley & Co. LLC
John Sourbeer; Analyst; UBS Group AG
Mark Massaro; Managing Director; BTIG LLC
Rahul Bansal; Analyst; JPMorgan Chase & Co.
Presentation
Operator
Good day and thank you for standing by, and welcome to the Akoya Biosciences's fourth-quarter 2023 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
And I would now like to hand the conference over to your first speaker today, Priyam Shah, Head of Investor Relations. Please go ahead.
Priyam Shah
Thank you, operator, and thank you to everyone who's joining us today on this call. I'm Priyam Shah, Head of Investor Relations at Akoya Biosciences. On the call today, we have Brian McKelligon, Chief Executive Officer; and Johnny Ek, Chief Financial Officer.
Earlier today, Akoya released financial results for the fourth quarter ended December 31, 2023. A copy of the press release is available on the company's website.
Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of Federal Securities laws, which are made pursuant to the Safe Harbor provisions for the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors.
For a list and description of the risks and uncertainties associated with Akoya's business, please refer to the risks identified in our filings with the US Securities and Exchange Commission, including in the Risk Factors in our annual report on Form 10-K for the year ended December 31, 2023, to be filed today, March 4, 2024. We urge you to consider these factors, and you should be aware that these statements are considered estimates only, and are not a guarantee of future performance. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 4, 2024. Akoya disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. The audio portion of this call will be archived on the Investors section of our website later today under the heading Events.
And with that, I'll now turn the call over to Brian.
Brian McKelligon
Thank you, Priyam, and good afternoon or evening to everyone. We appreciate you joining us today. During today's conference call, I will begin by giving a broad overview of our performance in the fourth quarter and full-year 2023. I will review our business advancements and provide insights into the latest developments in our product offerings. Following that, Johnny will go deeper into our financials, key trends, and provide an outlook for the future of the business.
As preannounced at the JPMorgan Healthcare Conference in January, Akoya had a strong fourth quarter in 2023, with record-breaking revenue of $26.5 million and full-year 2023 revenue of $96.6 million, representing a 29% annual growth from prior year. We exited the year with gross margin of 62.7% in the fourth quarter.
In parallel to a strong top-line growth and margin expansion throughout the year, we made efforts to leverage our cost structure, limiting our 2023 operating expenses to only a 4% growth from prior year, enabling a more substantial portion of revenue growth to fall to our bottom line.
Within our 2024 forecast, we expect both strong top-line growth and margin expansion while we continue to manage our costs, and we are projecting operating cash flow breakeven by the end of this year. Johnny will touch upon this in greater detail later in the call.
Our cumulative installed base now stands at nearly 1,200 instruments, the largest in the field, and covers the entire spectrum of spatial biology markets from discovery to translational and ultimately to clinical. Throughout 2023, we invested in key strategic areas, including reagent menu expansion, throughput and workflow simplification and improved software capabilities collectively contributing to meaningful raise and revenue expansion and increases in the pull-through across our platform.
In the fourth quarter, we saw continued signs of the return on these investments as recent revenue grew 52% from the prior year period. We are pleased to report that we now have over 1,160 peer-reviewed peer-reviewed publications, citing Nucleus technologies as of year end 2023, a 50% growth from the prior year period, demonstrating the widening adoption and utility of Accoya solutions by our customers. Accoya has achieved important milestones in a short period of time that has solidified our market leadership position and will continue to pay dividends. As noted, Accoya has the largest and an actively publishing customer base that will continue to highlight and scientifically promote the current and future capabilities of our offer.
Next, we provide complete end-to-end solutions with high throughput workflows that deliver high quality spatial phenotyping at any level of multiplexing. And finally, our solutions span the entire continuum from discovery to clinical applications. The result, as noted, is it clear path to operating cash flow breakeven by year's end. Our R&D and operational efforts have been optimized to deliver enhancements and workflow efficiencies and drive an expanding menu of high-value applications.
Let me briefly review our key recent product line improvements and two additional high-value partnerships.
First, the recent rollout of the Phoenix activities of 2.0 represents a noteworthy milestone setting a new industry standard capacity multiplexing and data quality customers can now process twice as many samples per week compared to previous capabilities, establishing the Finisar to infuse a 2.0 as the highest throughput specialty discovery platform available in the market, providing multiplexing across a broad range from just a few proteins to up to 100. In parallel, we released our Pheno imager HT. 2.0 upgrade for our translational and clinical research customers like the Fusion 2.0. This upgrade similarly represents a transformative enhancements resulting in a fivefold increase in workflow speed more than half of our customers have received a 2.0 fuel upgrade across both platforms as of year end 2023. These upgrades and the ongoing expansion of Korea's Pinnacle content menu were the main drivers, the increases in consumable revenue in the fourth quarter. We also recently announced two groundbreaking partnership. First, we announced our partnership with Thermo Fisher to deliver advanced spatial multiomics workflows by combining the Thermo Fisher review RNA technology with a clear spatial biology solutions.
Second, along with our partners and enable medicine, we announced the release of Max fuse and AI and reinforced learning driven multimodal data integration algorithm on the Enable medicine cloud platform. This next-generation analytical methodology allows our customers to directly integrate into one analysis, acquires spatial proteomic data with single-cell RNA data. As a result, our customers' single-cell RNA-seq data, which is not special, is mapped to acquire spatial proteomic data, creating an informatics, drive spatial multiomics data set this Translarna solution allows customers using acquires platforms and single-cell RNA seq platforms to leverage and integrate these independent datasets from different platforms to drive profound new multi-omics discoveries. This is likely the first of many such AI based analytical approaches to come. Our platform of improvements and partnerships, further strengthen our position to lead the market and offering powerful new spatial phenotyping solutions and we remain committed to continuing to lead the market, providing the industry's best end-to-end solutions across multiple market segments. While these new solutions certainly expand our discovery horizons downstream, we are also witnessing a continued expansion and acceleration of the clinical utility of spatial technologies. Spatial phenotyping is becoming central to emerging clinical biomarker efforts in immunooncology and the rapidly growing antibody-drug conjugate market. Our 78% growth in our services revenue compared to the prior year is a clear indication of this as we secure additional late-stage clinical trial partnerships. Our demonstrated organization clinical expertise, the capabilities of the Pheno imagery C platform, our co-marketing partners with Agilent and our companion diagnostic partnership with Axovant are all key drivers of the expansion of this part of our business.
Now importantly, active on also received Breakthrough Device designation on the ACR. three six eight onco signature assay run on our AC platform through our ClearLab and Fast Track designation for their therapeutic ACR three, six eight, and we look forward their Phase two clinical trial interim results in the near future. We continue to expand our qualified service provider network that includes the industry's top contract research organizations are clear qualifies these partners and provides ongoing white glove to support to help ensure their success and offering lab services on a class platforms. The network serves as a valuable commercial amplifier and helps advance the adoption of our platform in translational studies and clinical. We are humbled and appreciative that these successes and ongoing efforts have attracted a preeminent global thought leaders in immunobiology to join our newly established Scientific Advisory Board, Dr. Garry Nolan, Aqualis founder and the inventor of the penis cycler and co-inventor of Massey's has transitioned from his role on the Board of Directors to serve as the new Chair of the Scientific Advisory Board. Accompanying him will be Dr. James Allison, 2018 Nobel Laureate and the father of the immuno-oncology revolution as well as Dr. PROBABLY Sharma, visionary physician scientist in the field of immuno oncology and immunotherapy, both currently at MD Anderson. These three initial members of Accoya scientific advisory board will inform Accoya street strategic direction and provide expertise in translational clinical and diagnostic applications of Accoya spatial biology solutions.
Lastly, like others in the industry. We observe some ongoing macro pressures impacting capital equipment purchases for long instrument sales cycles and continued underperformance in our business in China. We anticipate these challenges to persist at least through the fourth quarter of 2024.
In summary, our focus for 2024 revolves around three key initiatives. First, expand applications and implement continued workflow efficiency improvements on the venous equities and and the Pheno imager HT. to drive the continued high growth of our Asian revenue, resulting in increases in system culture.
Second, achieve operating cash flow breakeven by year end 2024 by focusing on improving efficiencies, cost effectiveness and gross margin expansion.
Third, continue to drive our clinical partnerships to achieve our goal of delivering menu of high-value companion diagnostics to advance patient care.
With that, I will now turn the call over to Johnny to discuss our financial results. Johnny?
Johnny Ek
Thanks, Brian. As Brian highlighted, total revenue for the fourth quarter of 2023 was 26.5 million, a 25% growth compared to the same period in 2022. Full year 2023, revenue was 96.6 million, representing a 29% growth from the prior year. Our robust year-over-year growth was seen globally across our diversified revenue channels and strong portfolio of products and services. Product revenue, including instruments, reagents and software, totaled 16.7 million. For the fourth quarter, we sold 51 instruments, of which 15 were Pheno cyclers and 36 were from the Pheno imager portfolio, generating total instrument revenue of $9.2 million for the quarter. As Brian noted earlier, continued macro pressures and underperformance in China impacted our results, and we expect this trend to continue in the near term. Our global installed base now comprises 1,183 instruments, including 342 Pheno cyclers and 841 Pheno imagers. A total of 230 Fusion instruments have shipped since the full commercial launch at the start of 2022, and we now have a total installed base of 205 for the combined Pheno cycler fusion system. The majority of Pheno cyclers are being sold in combination with the Fusion. And we expect this combination could drive an increased reagent pull through with an expanding menu of panels and faster workflows from the ongoing 2.0 field upgrades. Approximately half of the installed base of Pheno cycler fusions and HT.s in the field have been upgraded to 2.0 models as of year end 2023, and we expect the majority of the remaining instruments in the field to upgrade throughout the remainder of 2020 for all new Pheno site, their fusion and HT. systems are being sold directly as a 2.0 model.
As of the start 2024, we delivered 6.9 million in reagent revenue in the fourth quarter, reflecting a 52% increase from the prior year period. The annualized fourth quarter reagent pull through applicable to both Pheno cycler and HT. is now in the high $30,000 range. This is a notable improvement compared to the annualized pull-through per instrument 2022, which was in the high $20,000 range to the low $30,000 range for both the Pheno cycler and the HT. This growth can be attributed to the increased utilization of Pheno cyclers paired with Fusion, faster workflows and a growing utility of Pheno code panels across the instrument product portfolio. We are strategically positioning reagents to play a more significant role in our revenue mix with customers increasing their utility and pull through across our platforms as we pair more Pheno cyclers with Fusion in the field, enhance instrument portfolio through the 2.0 upgrades and refine our reagent manufacturing operations, planning and supply chain efforts. Services and other revenue totaled 9.8 million for the fourth quarter, an increase of 78% over the prior year period. Services have been a substantial growth segment for us as our instrument warranty and field service revenue have rapidly expanded in addition to our lab services business, continuing to drive higher-value studies through new and existing biopharma partnership gross profit was $16.6 million in the fourth quarter, representing a 38% growth over the prior year period. And gross margin was 62.7% for the fourth quarter versus 56.8% in the prior year period. The timing and contribution of revenue from our lab services business contributed approximately 250 basis points of margin to the strong fourth quarter gross margin results as we drive increases in our reagent revenue mix, execute on our identified operation optimization efforts for reagents and leverage recent manufacturing investments. We expect to further drive the expansion of our gross margin in 2024 and beyond in the range of a couple of hundred basis points annually.
Operating expense for the quarter totaled 26.1 million as compared to 29.6 million in the prior year period, indicative of a reduced spend pattern throughout 2023 while we continued our meaningful top line growth, total OpEx for 2023 grew only 4%, while top line revenue grew 29% from the prior year. Gross margin expanded further indicating that our efforts to leverage our cost structure have been very impactful throughout 2023. Through ongoing strategic efforts, we expect to further lower our operating costs. This year, helping us achieve projected operating cash flow breakeven as we exit 2024. We ended the quarter with approximately $83.1 million of cash and cash equivalents common shares outstanding and fully diluted shares, including the impact of outstanding options and unvested restricted stock awards are 49.1 million as of December 31st, 2023 in summary, we are pleased to report another exceptional quarter with record-breaking revenue of 26.5 million and full year 2023 revenue of $96.6 million, a 29% growth over the prior year. Acquired installed base has now reached nearly 1,200 instruments, solidifying our position as an industry leader in spatial biology. Our strategic focus for 2024 remains on driving reagent revenue growth and increasing pull-through across our growing installed base to realize the scalability of spatial biology. We've also implemented important operational changes to enhance efficiency, drive gross margin improvement and achieve cost advantages, all while maintaining strong top line growth. As such, we are confident in our ability to sustain strong growth throughout 2024 and beyond. And we project reaching our very important goal of operating cash flow breakeven as we exit 2024. At this time, we are providing a revenue guidance range of 114 to 118 million for 2024.
And back to you, Brian.
Brian McKelligon
Thanks, Johnny. We're pleased to report a strong quarter and announced multiple exciting new developments across our product portfolio. We look forward to executing on our strategic objectives throughout the remainder of the year as we drive the business towards positive cash flow.
We're thankful for the hard work of our fellow dedicated claims as well as for the support of our customers and shareholders. Akoya remains very well positioned for growth, and we're excited about the opportunities that lie ahead as we deliver new space solutions from discovery to the clinical markets.
At this point, we will open the call for questions.
Question and Answer Session
Operator
(Operator Instructions) Subbu Nambi, Guggenheim.
Subbu Nambi
Hey, guys. Thank you for taking my question. The first topic I want to cover is gross margins. How should we think about quarterly pacing for gross margin throughout the year. And as you think about puts and takes of big one, is your progress towards bringing a lot of these reagents manufacturing in house in the long term? How will this benefit gross margins and in the near term, that is being transitory pressure? And then I have one follow-up.
Kyle Mikson
Yes, this is Brian. I'll let Thank you, Suku, for your question and I'll let Donnie maybe dig into some of the details. I'll largely speaking. The the positive gross margins for the quarter were really a function of two things.
Brian McKelligon
Number one is the mix.
Kyle Mikson
You saw the reagent revenue number was was we had a significant expansion of our reagent revenue in the fourth quarter as a result of a lot of the efforts that we've been putting in over the last year or so that was one large contributor contributor. And obviously those regions are much higher and they're in their margins.
And the second one is our service revenue and with the advancements of our a lot of our clinical programs also took a significant step up. And now we're really at a place where we're able to leverage that infrastructure and that cost basis. So as that revenue grows, it does start to contribute to the bottom line in terms of bringing the manufacturing in-house, the facilities, all built out personnel are there. And we really are just now beginning to put on the shelf reagents that were manufactured internally and that that is really the other driver for longer-term gross margin contribution? And then I'll let on I'll let Johnny maybe give some give some color on the specifics of the gross margin throughout the year.
Priyam Shah
Yes. Thanks, Sue, and thanks Brian. And as Brian mentioned, that we had a couple of hundred basis point contribution in Q4 from some milestones achieved in the AVS business, which as you've been seeing in Q4 lifted that margin to a healthy 63%. Our sort of operating, if you exclude that AVS and the operating gross margin, really the exit was sort of in the 60 61%. And so we expect that to sort of move ratably through the year. It will be a bit lumpy as as events happen, certainly from any of the ABS revenue may move that. But from an operating gross margin, as Brian highlighted, we have begun the operation to manage some of the manufacturing in-house, and it's really a factor of how much of that transitions in house over time as we also scale and start to achieve more and more efficiency through the year, which is so I would look at it as a pretty linear pacing. It will be impacted by mix, of course, as mix happens through the year. If we happen to have a quarter where reagents are stronger than the instruments et cetera, maybe yes, it will move. But generally, it's a it's a relatively linear pacing to kind of get to our exit, which allows for some movement of a couple of hundred basis points from our baseline that we have we've established exiting 23.
Subbu Nambi
Super helpful. Thank you both. Regarding again the reagents, which is largely Pinnacle signature and discovery panels. I'm guessing on first, what is the expected contribution you embedded in the full-year guidance? And then second, at what point in the year, would you expect contributions to become more material and lastly, do you expect an increase in penetration of these reagents in your CRO and large pharma accounts this year?
Kyle Mikson
Yes, it's a it's a good question. I think we're beginning to realize some of the benefits of our content strategy. So I think it's I think it's going to be it's going to continue to be on an accelerant for us throughout the year. I don't we're now at a point where we're beginning to realize some of those benefits on with respect to your question on our on our content expansion efforts, your question on CROs in biopharma?
Yes, I do think our specifically our targeted signature panels that are really on to be run on the HT. or within the field of immune-oncology. Those dose ready-made panels. I think we really start to get to scaled studies and Suku and around the second half, we're going to be doing some very large-scale studies. And I think that is one of the contributors why we why we expect to see continued regional expansion throughout the year.
One clarification one, it at least it may get lost when we say ABS., we're referring there to our Clear Lab Services or advanced BioPharma Solutions Group. So ABS. really as lab services are synonymous.
Priyam Shah
So thank you.
Subbu Nambi
Thank you for listening.
Operator
Kyle Mikson, Canaccord.
Kyle Mikson
Your line is open patent, guys. Congrats from here in the quarter when I kind of break down the guidance a little more from Brian, Johnny. So some of these assumptions here could placements slow down this year given the recent launches and the upgrades.
And then on pull through, could that increase by another like $10,000 by the end of this year, even though most of the tailwinds seem to be in 23 or at least the influx of wanting to be that you're at least that's what the communications into.
And then on services, like sounds like a great you know, great backlog there and just talk about visibility that you have at this point and then, of course, like China, like just like that, obviously like ammunition to 1Q, but maybe how are you thinking about that in the second half of the year?
So I think I got all those. And if I don't come, you know on so on the two point I'd like to point out isn't going to slow down placements. Those are field upgrades. I think they're just they're just going to make those installs even more powerful in terms of their pull through. And it is those upgrades that was a contributor to the re-age, an acceleration that we saw in the second half. And we do think as we as the course of the year, we do think and quarter over quarter, we'll see that reagent number continue to climb for the services business is growing for your question solely because of the nature of the partnerships that we're securing, there are much later stage there of much higher value.
And the 70 plus percent bump you saw in that portion of our business is probably the strongest indicator that one can see it externally of the type of projects that we're taking on being later-stage, higher-value projects that really give us a lot of confidence that we will we will realize our clinical strategy of securing additional clinical trial assays and companion diagnostic deals, and we will achieve some we will achieve our goal of having CDx products in the Q contributing a significant portion of our revenue in the near future. So that that's that's sort of the commentary. I think on everything.
Brian McKelligon
I think I got everything you you asked about, Carl, just on China also, if you have any sense on the back half of the year ex.
Kyle Mikson
Yes. Look, I think I think consistent with many of our peers, we're going to assume that the first half is still pretty challenging. And if there is recovery, it's going to be incremental in second half is just not something you count on. And as we look at our aim of achieving operating cash flow breakeven, we've got to do that within the context of a revenue goal, take it. That takes advantage of our diversified portfolio from certain lab services to reagents and instruments, but it's not so aspirational that we put that, that profitability goal at risk. So we're trying to be very balanced and having a top line goal and a margin goal that doesn't require significant changes in the current business environment.
Brian McKelligon
Okay, that was great, Brian, thanks so much.
Just a quick one on next year. That algorithm with Enable We are definitely differentiated from a clinical perspective.
I heard on Gary. No, I'm talking about that. Could you just maybe walk through that a bit more just double-click on the clinical side of that. And then I'm wondering because you go through it. Just wondering if that's like the first of many kind of like unique one-off software solutions for the ecosystem that you kind of roll out with other partners to like just in addition to enable you've other partners, right? So just curious about that.
Kyle Mikson
We do like look, the way I look at that with Mike, sort of simple, Brian, if you play with JGPT. or some of the image creators, I think you have you have a a at least a qualitative sense of the kind of power that these sorts of approaches can bring?
I would largely say, Kyle, in the near term, this is really a tool for your drug discovery researchers. And effectively, as I noted on the call, what it allows you to do it allows you to take single-cell RNA seq data and leveraging the Max-Vu algorithm and and Athena secular Fusion high plex protein data, you informatics, we make that non spatial data spatial by using the Max-Vu either. So this allows our customers not to do a multi-omics Study one at a time, but rather leveraging the large large data sets that exist for single-cell, whether it's an internally or with third parties to leverage that dataset and your request via the secular Fusion data to make it special. I would encourage everybody to go read the two Nature papers that Dr. Nolan has done on this, it really is quite astounding and they validated it to a pretty deep extent. So I do think this is many of additional approaches to common, and we'll continue to look at partners like enable or others as vehicles to implement these in a user-friendly manner, knowing that a scaled from edition can do get help get up type approaches regardless.
Okay.
That's helpful. Thanks, guys.
Brian McKelligon
Appreciate it pickup.
Operator
Tejas Savant, Morgan Stanley.
Tejas Savant
Hey, guys.
Hey, good evening.
How are you?
And Brian, just to kick things off of your placements came in a little bit light in the fourth quarter, even on a sequential basis I think in the third quarter, you've done almost I think it was in the high 60s, if I remember right. And can you just walk us through sort of that dynamic was it entirely driven by macro and some of those elongated purchase decision cycles that you called out in China as well? Or was there any shift in the competitive landscape?
You're you know, specifically, I mean the one that we've been getting questions on is Luno four. So just curious as to any if you could parse out that dynamic and the sequential step down in placements?
Brian McKelligon
Yes, James, I think the question is certainly the former that's driving it. I mean what we saw three jobs in Q3 and Q4 was quarters were becoming increasingly on backroom in month three. And so that's largely that. That is the largest diamond dynamic, the largest driver there. I think the visibility of Luna for on the question is I think is largely a result of them sort of being integrated with Bio-Techne and having a lot more visibility and marketing power. And we'll see how that competitive dynamic shakes out over the coming quarters because I think they're really just getting going.
Tejas Savant
Got it. Fair enough. And then in terms of just the academic budget environment in the last couple of weeks, some that the few inbounds and just the cracks over in Europe and Horizon and denote some questions around the continuing resolution here in the U.S. as well. You guys are obviously over-indexed there like a lot of your special PR. So I'm just curious as to what you're baking into the guide and what you're hearing from your academic customers at the moment.
Brian McKelligon
Yes, I would say just I think similar to my prior commentary that Kyle, what we've tried to bake into our guide is really a continuation of the existing market pressures that we were all feeling and in Q3 and certainly Q4 on the capital side. So I think that that's going to be our approach. We feel like we've been living and continuing resolutions and questions on the NIH budget for for over a decade. And it's just perhaps a little bit more acute now. So that's kind of how we're looking at it. What is teed up in our control. And I think we were realizing some successes. It's in areas that are less prone to being impacted by macros, which is the reagent utilization on our platform and the advancing of our clinical opportunities, which are in the well-funded arena of immunooncology.
I'm, as I noted on the call. So we're going to continue to focus on those areas. They are, again less prone to some of these macro dynamics and the ROIs are significant for us. So that will be our area of key areas of focus to mitigate any instrument pressure.
Tejas Savant
Got it. And then one final one one for you, Ryan, and one for Johnny on Brian. I know you've sort of like shifted the focus a little bit in 23 to optimizing existing solutions, driving consumables growth, et cetera. But how should we think about the product development road map, perhaps not in 24, but over the next couple of years here and Johnny are and obviously people are pretty happy to see operating cash flow breakeven by year end. But is it fair to assume that 2025 will be the first full year of cash flow breakeven for you guys?
Brian McKelligon
So I'll take the first part first and then Jane, the second. So you can think of our product development priorities focused on workflow simplifications throughout this year and getting over the clinical a finish line and getting additional partnerships on whether or not we speak to those publicly is to be the term. So that is a priority now. But you're correct, longer-term in terms of platform, there are really two areas that that I think are opportunities for the company number one is ensuring that we have an IVD great system because we will have a menu of products. So it's ensuring that that roadmap is solidifying on the other extreme in the upstream discovery market, we are going to we are already at a place where spatial biology is going to be done at scale, large scale studies, large-scale database studies. So getting the instruments to a place where they can do that, having the re-agents at a place where they can support that and algorithms like Max fields to be able to leverage these not large datasets. Spatial is going to go the direction that we've seen all other powerful life sciences tools go, which studies are getting larger and larger scale. And there is to sample elasticity in this market, you make the systems faster, easier and more affordable to use and there will be more samples. So longer term, take up. Those are the two avenues of full additional platform development opportunities for.
Tejas Savant
And just to your question on 2025, certainly haven't guided obviously to '25, but we don't expect to move the top line or margins, can we expect those to continue to be strong, continue to grow. And really it's about maintaining a reasonable OpEx, which we absolutely expect to be able to do which drives a full year sort of a cash flow from ops, a good full year cash flow from ops in '25.
Johnny Ek
That's positive. So the building blocks sort of build themselves and we continue to execute and maintain that OpEx where we expect it to. That's our that's our target.
Absolutely.
Tejas Savant
Got it. Thanks, guys. Appreciate the time.
Operator
John Sourbeer, UBS.
John Sourbeer
Good evening and thanks for taking my question. I was wondering, could you talk a little bit more on the announcement with Thermo and the RNA assays. I guess, any initial feedback from customers there? And what does the demand you're seeing on a multi-omics capabilities yes, I think for us in kind of reverse order.
Kyle Mikson
John, thank you for the question. And for your time, we look at RNA as something that that's complementary to our high plex protein technology platform on the phenotype of Fusion. So we really are focused on integrating and are in a solution that is at a Plex level that's consistent with that theme and the DRD technology is perfectly suited to do that on. It's a it's a really a high-resolution amplified, same single-cell resolution platform. And so we're just beginning to integrate and roll that stuff out.
We just announced it. So a lot of the hard work is happening right now. I think we'll probably be talking more about some of those details at ACR ended and the demand for from our customers to have a complementary RNA technology is strong. And I think both the view on a implementation, but equally important, perhaps John and we'll see how it plays out. I think algorithmic approaches like matching our do represent a transformative addition on how help people leverage not just their own data, but publicly available data to get informatics derived multi-omics solutions, I think both are important.
John Sourbeer
Thanks.
And as a follow-up, you know, you have customers who started adopting Fusion 22 now gets you to 50% at the 2.0 upgrade, what is the runway you think here that you have for some of these users to hit full utilization?
And just talk about longer term where you think the pull through Pago, I realize no KLS aluminum specifically on pull through.
Kyle Mikson
So we have right now, John, about two thirds of all is the in a cycle is receding with Infuse, and we'll probably get through most of those those upgrades kind of throughout this year. And as we as we look at pull-through on that system, like as Johnny noted kind of in the high 30s as we exited the year, we exited last year somewhere around the high 20s or so. So I think that I think that trend line continues. And throughout 2024 and into 2025, doing 40 50 60. I think we can easily get to that round. Many of our high end users are operating at at five times plus that average pull-through number. So I think there's an opportunity for us to really raise the curve on all of what we're seeing, particularly with the two old, John. He's a real a real pressing need amongst our phenotype or a fusion users to really start to press to flex up even more. So your 50 60 70 plots and they're doing that with more samples. And that's why the Phoenix cycler Fusion 2.0 users are the highest pull through users. So it's about moving all of those customers up to that 2.0.
Brian McKelligon
Thanks for taking the questions in queue.
Operator
Mark Massaro, BTIG.
Mark Massaro
Hey, guys. Thanks for taking the questions and congratulations on a strong 2023. I guess my first one is on the guidance one 14 to 1 18. I think it calls for 18% to 22% on your pre-announcement in January, you talked about 20%-plus. So obviously you're in line with that. I'm just curious if and if that 18% somehow might be factoring in pressures related to macro or China or elongated sales cycles? And then maybe can you just give us a sense for the demand environment in the US, obviously that's been a stronger territory for you with respect to other geographic regions. So just give us a sense for perhaps anything you have on geographic growth and how we should think about that this year?
Kyle Mikson
Yes, I'll do those. Thanks, Mark. We appreciate your questions and your time. So if you go through and look at our growth across the regions. North America, as you noted, was the strongest. And we think it will continue to be the strongest within the sort of high 30% ROE. I think we'll probably you'll probably stay there. And I don't think these geographic trends change meaningfully in 24. Amea was kind of in the low 20s mark in terms of its year-over-year growth to 23. And then A-Pac was like high single digits. And most of that was because the team was able to pivot to other regions, Japan, Australia, et cetera, Korea, South Korea to get to compensate for the contraction in A-Pac.
Mark Massaro
I think those trends continue on into '24.
Kyle Mikson
You I think you're right in terms of the low end of the range is really intended to account for those pressures being even more pronounced.
One thing, though, if and when we do mark secure more partnerships like Aquavan, those are largely additive to our guide. There may be a portion of those that's embedded within our expectations for for continued growth of our services business, but additional large-scale CDx deals on like another Aquavan with a large biopharma that would be additive to that range. And certainly if and when those do those do occur, we'll clarify that. So hopefully, that answers your question.
Mark Massaro
Yes, that's helpful. And then my last question, could you maybe zero in a little bit about what you're seeing in terms of customer demand for Pheno code discovery on Signature panels? And then any any way to as we're tuning up our models.
How should we think about reagent growth? Obviously, this is a year where you're coming into the year with about 1,200 systems some just give us a sense for how you think reagent growth might track relative to prior years?
Kyle Mikson
Yes, John, I'll let Johnny speak to how much detail we want to give because we don't guide on a product basis. But I wouldn't I would say, Mark, that re-agents is going to be in terms of dollars are probably our largest growth driver because it because it's moving so quickly, as you saw from I think it was a five 7 to 3.69 in Q4. So you can see we're beginning to realize the benefits of many of the workflow solutions that we put on the market. And again, we think those trends maybe not linear. It linearly continued throughout the year. And so that's how we've looked at that, look at that.
Priyam Shah
And John, if you want to add any more color in terms of the specifics on re-agents, no only to say to highlight sort of what you said, which I think look back to 22, obviously, it was sort of in that 4 million range moved into the five plus million in 23 and really exited 23 in that scope, $7 million per quarter. And we expect that to continue. It's sort of natural taking these steps and it certainly will will be an important focus that will help to drive the margin goals that we have as well in 24.
Kyle Mikson
Okay.
Priyam Shah
Actually, if I can sneak one more in on note, great progress on you know, getting to that operating cash flow breakeven by year end 24 from certainly a year ahead of expectations. From recent comments on there's been a decent amount of M&A Some of it's been larger. Some of it's been smaller, but adds as you're about to turn the corner to cash flow breakeven. Are there certain assets out there, even if they are of the tuck-in variety that that might be enticing to you and maybe just speak, if you will, about the M&A environment up broadly?
Kyle Mikson
Yes. I think you've got a couple of buckets of M&A, Mark, I think you've got you've got some some activity that's really driven around companies trying to find synergies as a way to continue to capitalize the business and then you've got these larger deals like like the only deal, I think they're kind of falling into those two buckets.
I think for us, Mark, are our number one priority for ;'24. We have everything that we need in our technology stack. It's really just delivering on what we need to in terms of growth with reagents at the center of that and then and then securing additional and then continuing to expand our biopharma business. So there's there's nothing that is of immediate need that would be better done with an M&A that said, we are always keeping our head on a swivel and looking at opportunities and trying to do that a kind of a reasonable resource method.
Priyam Shah
Okay. Thanks for the time.
Make more Take care.
Operator
Rahul Bansal, JPMorgan.
Rahul Bansal
Perfect.
Good afternoon.
Thanks for taking the questions. So I want to follow-up on some of the earlier questions around placements. Can you just kind of walk us through what are your base case assumptions for placements this year in 2024.
In the past, you talked about a run rate of a few hundred instruments per year.
Should should we model that for this year as well and then what are the potential sources of upside and downside on that this year things?
Kyle Mikson
Yes, thank you, Rachel. Your numbers are right. I think a couple of hundred is there and we probably wouldn't get more specific in that arm. And I think the upsides, I think we still have upside certainly on the reagents as we expand our content as we get the tools fully utilized in the field with their increased capacity on software solutions like next few has become more prominent and up and our panels continue to roll out. So I think there's certainly upside there. I also feel like and we have opportunities to continue to advance our clinical partnership portfolio decisions, hopefully to secure additional segment that significant partnerships in that realm and much of that would be additive to our top line, whether it's this year, next year, we we've tried not to we have not baked into our in our base financial fundamentals, an assumption around additional significant CDx deals. But when they do come, as I noted earlier, that would be a source of it.
Rahul Bansal
Great. And then I just wanted to push on the macro backdrop a little bit more. You talked about 4Q continued to have some of those macro pressures impacting capital equipment purchases. So can you talk about how that trend has continued into January and February. And as customers have kind of had some of these budgets reset on Gen one. And then you highlighted that China was an area of weakness and some of the capital purchase spending. But were there any other geographies that were notably impacted by the macro backdrop as well?
Kyle Mikson
They know you obviously you can have exchange rate issues that effectively drives up your ASP. But I would that's not to the point, I think where beyond the macros, it's really impacting our on our top line and I think as I noted earlier, it's really Rachel just about home, some budget tightening, but also a an increased in diligence on and approval circles around many capital purchase purchases. Just like we do internally with our own capital purchases. So those are the those are the large-scale dynamics.
Rahul Bansal
Great.
And then just on January, February trends, could you walk us through how have some of those conversations trended in January and February so far?
Johnny Ek
Yes.
I mean, I'm hesitant to give any specific guidance on Q1 other other than to say we have as an expectation in our full year guide.
The market trends that we saw in second half and Q4 will continue into Q1 and the rest of the year instead of the curriculum Thank you for not showing any further questions in the queue.
Operator
I'd like to turn the call back over to Bryan McKelligon, elegant for any closing remarks.
Brian McKelligon
Yes. Thank you, Victor, for hosting us and thank you.
Thank you to everybody for your time. I think for Accoya, we have and will continue to demonstrate in and realize the benefits of our strategy with ultimately that being, as we noted, hitting operating cash flow breakeven by the end of the year with our reagent growth and the margin expansion, along with that being core contributors. But again, as I noted, we're also seeing real significant movement and opportunities for us to take that next leap as a company and continue to advance our portfolio from a research based product to additionally a clinical-based product, and we'll continue to share those successes with all of you as part of future calls.
So I thank you for your time, and I look forward to following up with each of these.
Operator
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect, and everyone have a great day.
