Alpha Teknova NASDAQ: TKNO reported first-quarter 2026 results that management said were largely in line with expectations, highlighted by double-digit revenue growth and a sharp increase in its Clinical Solutions business. President and CEO Stephen Gunstream said the company saw “a relatively straightforward quarter” and pointed to improving demand signals across multiple end markets.
First-quarter revenue rose 13%, driven by Clinical Solutions
Chief Financial Officer Matt Lowell said revenue increased 13% year over year, marking “the first Q1 in which we earned over $11 million in revenue in nearly three years.” Growth was led by the company’s GMP-focused Clinical Solutions segment, while Lab Essentials posted modest gains.
- Lab Essentials revenue was $8.4 million, up 3% from $8.1 million a year earlier. Lowell attributed the increase to higher average revenue per customer, “partially offset by a decreased number of customers.”
- Clinical Solutions revenue was $2.1 million, up 85% from $1.2 million in the prior-year quarter. Lowell said the increase was driven by an increased number of customers and, to a lesser extent, higher average revenue per customer.
Lowell reminded investors that Clinical Solutions can be “more quarter-to-quarter revenue lumpiness” due to larger average order sizes, though management later characterized the quarter’s growth as broad-based rather than driven by a single order.
Margins improved; losses narrowed on an adjusted basis
Teknova’s gross profit rose to $3.8 million from $3.0 million in the year-ago quarter, while gross margin improved to 34.2% from 30.7%. Lowell said the increase in gross profit was driven “primarily by higher revenue.”
Operating expenses were $8.1 million, up slightly from $8.0 million in the first quarter of 2025. Lowell said higher sales and marketing costs—driven by headcount and marketing expenses—were partially offset by lower general and administrative expenses due to reduced stock-based compensation and professional fees.
Net loss was $4.6 million, or negative $0.08 per diluted share, compared with a net loss of $4.6 million, or negative $0.09 per diluted share, in the prior-year quarter. Adjusted EBITDA improved to negative $2.0 million from negative $2.5 million.
Order trends and market commentary: signs of stabilization
Gunstream said the company continues to see “stabilization across our end markets,” and noted an increase in both the number and total dollar value of orders greater than $25,000 compared with the prior-year period. He said Teknova believes this indicates some customers are shifting “from cash conservation to strategic execution.”
Gunstream said the company is seeing growth in “nearly every end market segment we serve, including life science tools, diagnostics, and biopharma,” and cited customer engagement and funnel health as improving leading indicators.
In response to an analyst question about a potential bifurcation between early-stage and late-stage biotech, Gunstream said Teknova saw “some nice large pharma growth” during the quarter and also received orders from earlier-stage clinical customers. He added that in the Lab Essentials business, “there is a little softness there,” but said customer engagement from smaller biotechs is improving.
Gunstream also pointed to strength in diagnostics, particularly “on the liquid biopsy,” where he said the company received “some nice orders.”
Operational investments: automation, digital batch records, and commercial spend
Gunstream outlined ongoing operational initiatives aimed at scaling production and improving efficiency. He said Teknova tripled single batch size for high-volume bottle production and implemented an automated aseptic filling line, which he said allows the company to scale volumes and reduce labor hours per unit.
On software and digitization, Gunstream said Teknova has migrated 90% of its 3,000-plus paper batch records to digital, citing improved analytics, visibility, documentation quality, and standardization.
Commercially, management reiterated that Teknova began ramping investment at the start of 2026, with an approximately $2 million annual increase split between marketing and sales. Gunstream said initiatives to increase lead generation, build lead qualification infrastructure, and onboard sales associates are “on track,” and he expects their impact on revenue by early 2027. In a later Q&A, he estimated new sales associate ramp time at “six to 12 months” before meaningful impact is seen, while noting early indicators such as more meetings and engagement with target accounts.
Asked about the role of AI-driven data generation in customer ordering patterns, Gunstream said such programs are “significant” and require “lots of reagents.” He said Teknova supports customers involved in those workflows and expects it to be a tailwind, though he added it is “not yet…a significant material” driver.
Guidance reiterated; cash position and profitability thresholds discussed
Teknova reiterated full-year 2026 revenue guidance of $42 million to $44 million, which Lowell said implies approximately 6% growth at the midpoint. Lowell said the company is seeing improved orders of custom products from biopharma and life science tools and diagnostics customers, along with more large orders above $25,000, but management wants to see more durability before adjusting guidance.
Lowell said Teknova expects full-year 2026 gross margin in the “mid thirties % range.” He also said the company estimates that each incremental dollar of revenue drops through at a marginal cash rate of about 70%, given a high percentage of fixed costs, though results may vary quarter to quarter due to GAAP accounting.
On profitability, Lowell said the company expects to become adjusted EBITDA positive at an annualized revenue run rate of $52 million to $57 million, and that if markets are stronger in 2027 and commercial investments perform as expected, Teknova “should report a positive Adjusted EBITDA quarter by the end of 2027.”
In discussing longer-term growth, Gunstream said Teknova believes increased commercial investment, a rebound in biotech funding, and customers progressing toward commercialization could position the company for approximately 20% revenue growth in 2027. He cited a three-to-four-quarter lag between biotech funding improvements and Teknova’s results, expected clinical pipeline progress among customers, and incremental benefits from the stepped-up sales and marketing investment.
On cash flow, free cash outflow was $3.6 million in the quarter, compared with $4.3 million in the first quarter of 2025. Capital expenditures were $0.2 million in both periods. As of March 31, 2026, Teknova reported $17.8 million in cash, cash equivalents, and short-term investments, and $13.2 million in total borrowings. Lowell said the company continues to expect free cash outflow of less than $10 million for full-year 2026, even with increased commercial investment, and anticipates lower average quarterly free cash outflow for the remainder of the year following larger first-quarter payments.
During the Q&A, management also addressed the sustainability of Clinical Solutions growth. Gunstream said the quarter’s performance was “more broad-based,” and Lowell said he expects that segment to remain “in the $2 million range a quarter or better,” depending on how the year develops.
About Alpha Teknova NASDAQ: TKNO
Alpha Teknova, Inc NASDAQ: TKNO is a life science tools and reagents company that develops, manufactures and distributes proprietary products to support research, drug discovery and biomanufacturing. Its offerings target academic institutions, pharmaceutical and biotechnology firms, and diagnostic developers, with a focus on high-purity reagents and optimized workflows designed to accelerate molecular biology and protein science applications.
The company's portfolio includes molecular biology reagents, cell culture buffers, in vitro translation kits, custom recombinant proteins, high-throughput screening buffers and other specialized formulations.
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