908 Devices Inc 10-Q for FY2023 Q2

908 Devices Inc. (MASS)

10-Q 2023-08-08 For: 2023-06-30

Added on April 12, 2026

About this 10-Q

908 Devices Inc filed this 10-Q on August 8, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $12.09M; up 8.9% from $11.11M a year earlier
Net loss: $9.35M; compared with a net loss of $8.1M a year earlier
Diluted EPS: -$0.29; compared with -$0.26 a year earlier

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MASS	The Nasdaq Global Market

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Delaware	45-4524096
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

645 Summer Street, Boston, MA	02210
(Address of principal executive offices)	(Zip Code)


Large accelerated filer ☐	Accelerated filer	☐
Non-accelerated filer ☒	Smaller reporting company	☒
	Emerging growth company	☒


		Page
PART I.	FINANCIAL INFORMATION	4
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46
PART II.	OTHER INFORMATION	47
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
Signatures		49


	June 30,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	132,996	$	188,422
Marketable securities		19,691		—
Accounts receivable, net of allowance for credit losses of $133 and $25 at June 30, 2023 and December 31, 2022		10,308		10,033
Inventory		14,135		12,513
Prepaid expenses and other current assets		3,947		4,658
Total current assets		181,077		215,626
Operating lease, right-of-use assets		7,136		3,956
Property and equipment, net		2,940		3,083
Goodwill		10,185		10,050
Intangible assets, net		8,162		8,488
Other long-term assets		1,330		1,384
Total assets	$	210,830	$	242,587
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,486	$	1,397
Accrued expenses		6,034		8,847
Deferred revenue		10,814		7,514
Operating lease liabilities		1,860		1,468
Total current liabilities		20,194		19,226
Long-term debt		—		15,000
Operating lease liabilities, net of current portion		4,962		3,040
Deferred revenue, net of current portion		8,474		11,496
Deferred income taxes		2,585		2,671
Other long-term liabilities		156		555
Total liabilities		36,371		51,988
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued or outstanding at June 30, 2023 and December 31, 2022, respectively		—		—
Common stock, $0.001 par value; 100,000,000 shares authorized; 32,326,861 shares and 31,859,847 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		32		32
Additional paid-in capital		329,361		323,969
Accumulated other comprehensive income		1,144		798
Accumulated deficit		(156,078)		(134,200)
Total stockholders' equity		174,459		190,599
Total liabilities and stockholders' equity	$	210,830	$	242,587


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Product revenue	$	9,595	$	9,082	$	16,617	$	15,589
Service revenue		2,354		1,526		4,594		3,048
Contract revenue		145		498		370		775
Total revenue		12,094		11,106		21,581		19,412
Cost of revenue:
Product cost of revenue		4,800		3,304		8,586		6,276
Service cost of revenue		1,448		1,057		2,718		2,126
Contract cost of revenue		52		111		99		247
Total cost of revenue		6,300		4,472		11,403		8,649
Gross profit		5,794		6,634		10,178		10,763
Operating expenses:
Research and development		5,525		4,293		10,923		8,198
Selling, general and administrative		11,208		10,710		23,211		20,455
Total operating expenses		16,733		15,003		34,134		28,653
Loss from operations		(10,939)		(8,369)		(23,956)		(17,890)
Other income:
Interest income		1,689		293		2,706		464
Interest expense		—		(15)		(551)		(35)
Other expense, net		(167)		(8)		(200)		(53)
Total other income, net		1,522		270		1,955		376
Loss from operations before income taxes		(9,417)		(8,099)		(22,001)		(17,514)
Benefit for income taxes		71		—		122		—
Net loss	$	(9,346)	$	(8,099)	$	(21,879)	$	(17,514)
Net loss per share
Basic and diluted	$	(0.29)	$	(0.26)	$	(0.68)	$	(0.56)
Weighted average common shares outstanding
Basic and diluted		32,199,156		31,413,431		32,083,122		31,312,559


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders'
	Shares	Amount		Capital		Income		Deficit		Equity
Balances at December 31, 2022	31,859,847	$	32	$	323,969	$	798	$	(134,200)	$	190,599
Issuance of common stock upon exercise of stock options	56,547		—		88		—		—		88
Stock-based compensation expense	—		—		2,166		—		—		2,166
Vesting of restricted stock units	145,123		—		—		—		—		—
Net loss	—		—		—		—		(12,532)		(12,532)
Foreign currency translation adjustments	—		—		—		291		—		291
Balances at March 31, 2023	32,061,517	$	32	$	326,223	$	1,089	$	(146,732)	$	180,612
Issuance of common stock upon exercise of stock options	166,226		—		301		—		—		301
Stock-based compensation expense	—		—		2,578		—		—		2,578
Issuance of common stock upon ESPP purchase	45,082		—		259		—		—		259
Vesting of restricted stock units	54,036		—		—		—		—		—
Net loss	—		—		—		—		(9,346)		(9,346)
Foreign currency translation adjustments	—		—		—		(57)		—		(57)
Unrealized gains on marketable securities	—		—		—		112		—		112
Balances at June 30, 2023	32,326,861	$	32	$	329,361	$	1,144	$	(156,078)	$	174,459



Customer Relationships		8 years
Developed Technology		15 years
Software		3 years
Trade Name		2 years


	Fair Value Measurements at June 30, 2023 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents - Money market funds	$	90,527	$	—	$	—	$	90,527
Cash equivalents - U.S. Treasury securities		—		9,969		—		9,969
Marketable securities - U.S. Treasury securities		—		19,691		—		19,691
Total assets measured at fair value	$	90,527	$	29,660	$	—	$	120,187
Other current liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	973	$	973
Other long-term liabilities:
Acquisition-related contingent consideration		—		—		156		156
Total liabilities measured at fair value	$	—	$	—	$	1,129	$	1,129


	Fair Value Measurements at December 31, 2022 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents - Money market funds	$	27,866	$	—	$	—	$	27,866
	$	27,866	$	—	$	—	$	27,866
Other current liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	343	$	343
Acquisition-related contingent consideration - pension liability		—		—		900		900
		—		—		1,243		1,243
Other long-term liabilities:
Acquisition-related contingent consideration		—		—		555		555
Total liabilities measured at fair value	$	—	$	—	$	1,798	$	1,798


Balance as of December 31, 2022	$	1,798
Accretion - earnout		231
Release of pension liability		(900)
Balance as of June 30, 2023	$	1,129


	June 30, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Credit Losses		Fair Value

Cash equivalents - U.S. Treasury securities		9,932		37		—		—		9,969
Marketable securities - U.S. Treasury securities		19,616		75		—		—		19,691
	$	29,548	$	112	$	—	$	—	$	29,660


	Six Months Ended
	June 30, 2023
Balances at beginning of period	$	10,050
Foreign currency impact		135
Balances at end of period	$	10,185


	June 30, 2023
	Cost		Accumulated Amortization		Translation adjustments		Net Book Value
Customer Relationships	$	3,142	$	(371)	$	191	$	2,962
Developed Technology		4,967		(312)		309		4,964
Software		254		(68)		14		200
Trade Name		61		(29)		4		36
	$	8,424	$	(780)	$	518	$	8,162


	December 31, 2022
	Cost		Accumulated Amortization		Translation adjustments		Net Book Value
Customer Relationships	$	3,142	$	(163)	$	150	$	3,129
Developed Technology		4,967		(137)		243		5,073
Software		254		(30)		11		235
Trade Name		61		(13)		3		51
	$	8,424	$	(343)	$	407	$	8,488


2023 (six months)	$	442
2024		870
2025		851
2026		779
2027		774
Thereafter		4,446
	$	8,162


	June 30,		December 31,
	2023		2022
Deferred revenue expected to be recognized in:
One year or less	$	10,814	$	7,514
One to two years		5,425		4,750
Three years and beyond		3,049		4,246
	$	19,288	$	16,510


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Handheld revenue:
Device sales revenue	$	6,503	$	5,431	$	10,249	$	8,731
Recurring revenue		2,319		1,506		4,745		2,676
Total handheld revenue		8,822		6,937		14,994		11,407
Desktop revenue:
Device sales revenue		1,456		2,323		2,793		4,556
Recurring revenue		1,671		1,348		3,424		2,674
Total desktop revenue		3,127		3,671		6,217		7,230
Total product and service revenue	$	11,949	$	10,608	$	21,211	$	18,637


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
United States	$	7,857	$	9,460	$	14,350	$	15,512
Europe, Middle East and Africa		3,954		1,245		5,942		2,601
Asia Pacific		221		391		797		1,273
Americas other		62		10		492		26
	$	12,094	$	11,106	$	21,581	$	19,412


	June 30,		December 31,
	2023		2022
Raw materials	$	9,579	$	8,343
Work-in-progress		2,916		2,722
Finished goods		1,640		1,448
	$	14,135	$	12,513


2023 (six months)	$	1,156
2024		2,431
2025		2,001
2026		580
2027		594
Thereafter		1,347
Total future minimum lease payments		8,109
Less: imputed interest		(1,287)
Total operating lease liabilities	$	6,822


Consideration Transferred:
Cash paid	$	14,400
Net cash and working capital adjustment		113
Contingent consideration - pension liability		900
Contingent consideration - earnout		737
Total consideration transferred	$	16,150

Assets acquired and liabilities assumed:
Cash and cash equivalents	$	638
Accounts receivable		168
Inventory		364
Prepaid expenses and other current assets		11
Property and equipment, net		32
Intangible assets
Customer Relationships		3,142
Developed Technology		4,967
Software		254
Trade Name		61
Goodwill		9,566
Indemnification assets		917
Pension liability		(917)
Accounts payable, accrued expenses and other current liabilities		(306)
Deferred tax liability, net		(2,672)
Other liabilities		(75)
Total	$	16,150


	Three Months Ended June 30,						Change
	2023			2022			Amount			%

	(dollars in thousands)
Product revenue	$	9,595		$	9,082		$	513		6	%
Product cost of revenue		4,800			3,304			1,496		45	%
Gross profit	$	4,795		$	5,778		$	(983)		(17)	%
Gross profit margin		50	%		64	%		(14)	%


Exhibit Number		Description

31.1		Certification of Chief Executive Officer of the Registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer of the Registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1†		Certification of Chief Executive Officer of the Registrant Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2†		Certification of Chief Financial Officer of the Registrant Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
10.18		Default Waiver and First Amendment to Loan and Security Agreement, dated as of August 4, 2023, by and between 908 Devices Inc. and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (successor by purchase to the Federal Deposit Insurance Corporation as Receiver for Silicon Valley Bridge Bank, N.A. (as successor to Silicon Valley Bank)) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39815) filed with the SEC on August 8, 2023)
101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

104		Cover Page Data File (the cover page XBRL tags are embedded within the iXBRL document).


	908 DEVICES INC.

Date: August 8, 2023	By:	/s/ Kevin J. Knopp, Ph.D.
		Kevin J. Knopp, Ph.D. Chief Executive Officer (Principal Executive Officer)

Date: August 8, 2023	By:	/s/ Joseph H. Griffith IV
		Joseph H. Griffith IV Chief Financial Officer (Principal Financial Officer)

/s/ Kevin J. Knopp, Ph.D.
Kevin J. Knopp, Ph.D.
Chief Executive Officer
(Principal Executive Officer)

/s/ Joseph H. Griffith IV
Joseph H. Griffith IV
Chief Financial Officer
(Principal Financial Officer)