Oxford Nanopore Q2: Revenue Miss, EPS Loss, but FY27/28 Outlook Reaffirmed
TREE NEWS reports: Oxford Nanopore Technologies (ONTTF) reported a GAAP EPS of -4.90p for the latest quarter, missing consensus estimates by a wide margin. Revenue came in at £116.7 million, falling short of analyst expectations of ~£120 million. Despite the miss, management reaffirmed its FY27 and FY28 revenue and profitability targets, which had been set during its 2023 investor day.
What Happened
The company, a leader in nanopore-based DNA/RNA sequencing, continues to invest heavily in R&D and commercial expansion. The EPS loss of -4.90p (vs. -3.20p expected) reflects increased operating expenses, particularly in sales and marketing to drive adoption of its new PromethION and MinION platforms. Revenue growth was only 8% year-over-year, a slowdown from the double-digit growth seen in prior quarters, partly due to softer demand in the life science research segment.
Market Impact
Stocks: Shares of Oxford Nanopore fell sharply in London trading, dropping as much as 12% before recovering slightly. The miss raises concerns about near-term growth momentum, but the reaffirmed FY27/28 outlook (targeting £300M+ revenue and breakeven EBITDA) provides a longer-term anchor. Investors with a six-month horizon may see this as a buying opportunity if they believe in the company’s strategic roadmap.
Bonds: No direct impact on bond markets, but a sustained share price decline could increase the cost of future equity or convertible debt issuance, affecting the company’s capital structure.
Crypto/Commodities: No direct linkage. The news is company-specific and does not influence broader risk sentiment.
Currencies: The British pound showed no reaction, as the earnings report is a micro event. However, if the stock continues to slide, it could weigh on the FTSE 250 index, which may have a marginal effect on GBP flows.
Why It Matters for Investors
Oxford Nanopore is a bellwether for the genomics and precision medicine sector. Its performance is closely watched by biotech investors as a gauge of capital spending in life sciences. The revenue miss suggests that the recovery in research funding is slower than hoped, which could have read-throughs to other sequencing and lab equipment companies like Illumina (ILMN) and Pacific Biosciences (PACB).
However, the reaffirmed FY27/28 targets signal that management sees the current weakness as temporary, driven by order timing rather than competitive losses. For long-term investors, the key is to monitor quarterly order intake and the ramp-up of the PromethION 2 solo device, which is expected to be a major growth driver.
Key Takeaways
- Revenue miss and wider EPS loss are disappointing, but the company’s long-term targets remain intact.
- Expect near-term volatility; consider dollar-cost averaging if you have a high conviction in the company’s technology.
- Watch for updates on commercial traction and any changes to FY25 guidance in the next earnings call.
