Alpha Teknova Q3 Earnings Call Highlights

Key Points

• Teknova raised its 2026 revenue outlook to $46 million–$48 million after a second consecutive record-revenue quarter, with third-quarter revenue up 22% year over year. Management cited broad-based growth in custom-product demand, particularly from biopharma customers.
• Clinical Solutions was the fastest-growing business, with revenue up 86% to $3.2 million, while Lab Essentials rose 9% to $9 million. Gross margin improved to 38.0% from 30.7%, and the net loss narrowed to $3.5 million from $4.3 million.
• Teknova ended September with $16.6 million in cash and raised about $43 million in net proceeds through an October equity offering, adding flexibility for potential acquisitions. The company also reported early customer interest in its Build-Tek configurator and Fill-Tek dispensing system.

Alpha Teknova NASDAQ: TKNO raised its 2026 revenue guidance after reporting a second consecutive quarter of record revenue, as demand for custom products from biopharma, life science tools and diagnostics customers helped drive 22% year-over-year growth.

The company now expects full-year revenue of $46 million to $48 million, implying approximately 16% growth from 2025 at the midpoint. Chief Financial Officer Matt Lowell said Teknova expects to provide 2027 revenue guidance when it reports full-year results.

President and Chief Executive Officer Stephen Gunstream said the third-quarter increase in custom product purchases by biopharma customers was broad-based across accounts and therapeutic modalities, with much of the demand coming from programs already in clinical trials. He described the pickup as an early indication that increased biotech funding is reaching the company’s customers.

“It’s still a little early. We’d like to see another couple quarters, but it’s pretty broad-based,” Gunstream said during the question-and-answer session.

Clinical Solutions leads growth

Clinical Solutions revenue rose 86% to $3.2 million from $1.7 million a year earlier. The products are made to good manufacturing practice, or GMP, standards and are used primarily as inputs in the development and manufacture of diagnostic and therapeutic products. Lowell attributed the increase mainly to higher average revenue per customer, with a smaller contribution from customer growth.

Lab Essentials revenue increased 9% to $9 million from $8.3 million, driven by more customers and, to a lesser extent, higher average revenue per customer. The business includes catalog and custom products for research use.

Lowell cautioned that Clinical Solutions revenue can fluctuate from quarter to quarter because its average orders are larger than those in Lab Essentials. He said Teknova expects the segment to be a larger long-term growth driver and sees continued strength in GMP products in the fourth quarter.

Gunstream said catalog sales, which represented about 60% of 2025 revenue, have grown at a mid-single-digit rate year to date. Large pharmaceutical customers have contributed to that growth, while spending on discovery work by smaller and midsized biotech companies remains soft. He said sustained funding and greater availability of capital for early-stage investments could help that market recover.

Margins improve and loss narrows

Third-quarter gross profit increased to $4.8 million from $3.2 million, and gross margin expanded to 38.0% from 30.7%. Lowell said higher revenue was the main driver, with changes in finished goods inventory also providing a benefit. Teknova continues to expect a full-year gross margin in the mid- to upper-30% range.

Operating expenses rose to $8.0 million from $7.2 million, primarily reflecting investment in sales and marketing. Net loss narrowed to $3.5 million, or $0.06 per diluted share, from $4.3 million, or $0.08 per diluted share. Adjusted EBITDA, a non-GAAP measure, improved to a loss of $1.0 million from a loss of $1.6 million.

Free cash outflow, also a non-GAAP measure, declined to $1.4 million from $2.4 million. Teknova continues to forecast less than $8 million in free cash outflow for 2026.

Lowell said the company expects to reach positive adjusted EBITDA at $52 million to $57 million in annualized revenue. If end markets strengthen in 2027 and commercial investments perform as anticipated, he said, Teknova should report a positive adjusted EBITDA quarter before the end of that year.

New products and acquisition plans

Gunstream highlighted early demand for Build-Tek, an AI-powered custom product configurator, and Fill-Tek, a dispensing system introduced in September. Since the updated Build-Tek launched in June, customers from more than 100 organizations have submitted over 140 quote requests covering nearly 180 custom products, he said.

Gunstream cautioned against directly linking Build-Tek to the third-quarter acceleration in custom orders, saying the tool is building a pipeline that could contribute over the next several quarters. Fill-Tek’s potential additional revenue may take a couple of years as earlier-stage customers scale through clinical trials, he said.

Teknova ended September with $16.6 million in cash, equivalents and short-term investments and $13.2 million in borrowings. A mid-October equity raise brought in approximately $43 million in net proceeds. Lowell said the company did not believe it needed the capital to become cash-flow positive but sought greater balance-sheet flexibility, including for potential acquisitions.

Gunstream said Teknova has a list of potential tuck-in targets and would be disciplined on fit, valuation and integration risk. Areas of interest include additional reagents such as proteins, but he said the company would not seek a business that requires substantial ongoing cash to operate.

About Alpha Teknova (NASDAQ:TKNO)

Alpha Teknova, Inc is a life sciences company that develops and manufactures critical reagents and other products used in biomedical research, biopharmaceutical development and advanced therapies. The company provides laboratory and production materials designed to support applications including cell and gene therapy, molecular diagnostics, next-generation sequencing, vaccine development and pharmaceutical manufacturing.

Its offerings include research-use-only and current Good Manufacturing Practice (cGMP) reagents, buffers, media and other custom-formulated solutions.

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