NanoString Technologies, Inc. (NASDAQ:NSTG) Q3 2018 Earnings Conference Call Transcript
Nov 08, 2018 • 04:30 pm ET
Good day, ladies and gentlemen, and welcome to the NanoString 2018 Third Quarter Financial Results call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder this call is being recorded.
I would now like to introduce your host for today's conference Doug Farrell, VP, IR. Sir, you may begin.
Thank you, operator. Good afternoon, everyone. On the call with me today is Brad Gray, our President and CEO; and Tom Bailey, our CFO. Earlier today we released our financial results for the third quarter of 2018. A copy of the press release can be found on our website at nanostring.com.
(Forward-Looking Cautionary Statements)
We're looking forward to catching up with many of you next week. We'll be on the road in Boston for a DSP KOL dinner, as well as in New York at the Canaccord Conference.
With that, let me turn the call over to Brad.
Thanks, Doug. Good afternoon, and thank you for joining us today. I'm going to provide a brief overview of our performance for the third quarter, and an update on our strategic objectives. Then I'll turn the call over to Tom to review the details of our Q3 operating results, and to update our guidance for the year. We've executed well over the last four quarters, and returned our core nCounter business to solid growth. For three quarters in a row our products and service revenues have exceeded the top end of our guidance, demonstrating that the steps that we've taken to strengthen our commercial team and infrastructure have been successful.
In addition, we've generated tremendous interest in our GeoMx Digital Spatial Profiler setting the stage for a successful 2019 launch that we believe will accelerate our growth rate next year. In the third quarter, we recorded $21.5 million in products and service revenue, generating 27% year-over-year growth. These results were strong across the board with instruments, consumables, and service, each growing by greater than 20% compared to the prior year.
Our instrument revenue benefited from solid demand from biopharma customers who drove about half of our instrument revenue in direct markets. SPRINT accounted for approximately 45% of instrument placements. Our installed base has increased by more than 20% over the last 12 months, laying the foundation for continued growth in our core nCounter business in 2019 and beyond.
I'm particularly pleased with the trajectory of our consumable business. Total consumables, which include both life science reagents and Prosigna, grew more than 28% during the third quarter. The bifurcation of our sales force and the separate teams focused on instruments or consumables has provided visibility and linearity, resulting in annualized consumable pull-through at the high end of our guidance range.
Within life sciences consumables, we delivered more than 35% growth in panels, while Custom CodeSets were approximately flat year-on-year. Meanwhile, Prosigna delivered its strongest quarter yet.
Now I'd like to provide an update on our