Olink Holding AB (publ) (OLK) 2022 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Olink Proteomics Fourth Quarter 2022 Earnings Conference Call. (Operator Instructions).

I would now like to hand the conference over to your speaker host today, Jan Medina, Vice President of Investor Relations and Capital Markets. Please go ahead, sir.

Thanks, Olivia, and good morning, everyone. Thank you all for participating in today's conference call. On the call we have -- from Olink, we have Jon Heimer, Chief Executive Officer; Carl Raimond, Chief Commercial Officer; and Oskar Hjelm, Chief Financial Officer.

Earlier today, Olink released financial results for the fourth quarter ended December 31, 2022, and a copy of the press release and an updated corporate presentation are available on the company's website.

Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the U.S. federal securities laws, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. For a list of description of the risks and uncertainties associated with Olink's business, please refer to the Risk Factors section of -- on Form 20-F, commission file number 001-40277, filed with the U.S. Securities and Exchange Commission on March 17, 2022, and in our other filings with the SEC.

We urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also in our remarks or responses to questions, management may mention some non -- non-IFRS financial measures. Reconciliations of adjusted gross profit and EBITDA, constant currency revenue growth and certain other non-IFRS financial measures to the most directly comparable IFRS measures are available in the recent earnings press release available on the company's website. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 21, 2023. Olink disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise, except as required by law.

And with that, I'll turn the call over to Jon. Jon?

Thank you, Jan, and good morning, everyone, and thanks for joining Olink's Fourth Quarter 2022 Earnings Call. I'll begin with a review of Olink's 2022 accomplishments, including recent operational, financial and strategic milestones. I'll then turn the call over to Carl for details on our very strong commercial results and guidance, and then Oskar will discuss the company's financial performance.

Q4 was another strong quarter and 2022 was another strong year for Olink. Our performance would not be possible without the enormous talent and drive of the entire organization. Olink met or exceeded every major corporate goal and put even more distance between us and competitors. Through science and customer-based market development, product design and industry-leading execution, Olink has become the leader of the modern proteomics field, creating new insights at unprecedented scale across the entire research and development continuum.

Over time, we expect Olink will enable proteomics to define a new approach to treating disease, providing new options for patients and all health care stakeholders. Proteomics is quickly becoming the most relevant omic for researchers and drug developers worldwide. In the fourth quarter, we delivered revenue of $57.9 million, representing 33% growth over the fourth quarter of 2021. While full year 2022 revenues was $139.8 million, a 47% increase compared to full year 2021. Once again, the quarter was highlighted by strong growth from Explore Kits and Kit's revenue overall, demonstrating strong progress in our product mix goals.

Other quarterly highlights included profitability, another record number of Explore externalization, continued strong performance in the low and mid plex markets by Signature Q100 and Target. We continue to see an expansion of proteomics workflows within customer accounts throughout the entire Olink portfolio. This includes Explore users adopting the Signature and Target platforms as their work demands as well as low to mid-plex user moving towards hi-plex projects. As we showcased on our Investor Day last November, Q4 was not simply about exemplary financial performance but also about innovation.

We continue to make progress in expanding the number of validated PEA assays. And by the end of 2022, we had a library of more than 5,000 carefully validated by our market targets, surpassing an important internal R&D milestone to our goal of increasing throughput and simplifying workflows with the Olink platform. Also in Q4, we launched Olink Insight, an open access platform for the global research community and Olink customers to share data and insights that will accelerate the value created by proteomics. We also launched Olink Flex, a made-to-order product that allows customers to create small protein panels from our library while offering both relative and absolute quantification.

After achieving the significant milestone of 1,000 published research studies in November, the number of PEA-based publications continue to increase with the total mile reaching more than 1,100 covering every major therapeutic category from research and discovery to the downstream clinical settings. One such publication from Professor Charlotte Teunissen's group in Amsterdam provides a striking example of how large-scale biomarker discovery can be used to identify and validate protein signature using one scalable technology, in this case, PEA. In a study looking at different stages of AD, non-AD dementia and healthy controls, her team characterized CSS proteomes of people using 11 Olink Target 96 panels.

The discovery phase identified over 100 proteins dis-regulated in AD and with data-driven modeling identified in 8 protein Signature and the [9] protein signature, both discriminating AD from non-AD dementia with strong area under the curves. 12 proteins were then selected to construct a custom biomarker panel that showed high performance in a validation study with an AUC of 0.95 for AD versus controls and 0.79 for AD versus non-AD dementia. With the incredible challenge that Alzheimer's disease poses to human health, new advances such as this will be needed to improve outcomes.

In summary, Olink continues to drive both the science and innovation of proteomics, delivering for customers and patients across life sciences and around the world. And we look forward to continuing this tradition in the months and years ahead.

I'll now turn the call over to Carl to provide a few more details on the quarter. Carl?

Thank you, Jon. First, I'd like to thank the entire commercial team for their incredible effort yet again during the fourth quarter and the entire year. Your efforts and results have been truly remarkable. For the quarter, fourth quarter growth was driven by strength broadly across our customer base with a high level of interest from both academic and biopharma customers. We continue to see significant interest from service providers for both Explore and Signature. While our presence with service providers is still in its early innings, we believe this growing interest bodes very well for the future.

Regarding the year-end spending environment, during the quarter, we noticed that the end-of-year budget flush environment was not quite as robust as we had seen in previous years. However, the appetite for proteomic spending and Olink specifically continued to be strong, leading us to believe that in our segment of omics spending remained a priority for customers even as headwinds arose on a macro basis.

Now to specifics of the quarter's results, driven by the robust performance of our Kit business and Explore platform, total revenue grew 33% and 47% in Q4 and full year 2022, respectively. In Q4, this total was comprised of $30.6 million in Kit revenue, $23.4 million in analysis services revenue and $3.9 million in other. Once again, Kit mix strongly improved quarter-over-quarter and for the full year, reaching 53% and 39% for Q4 and full year 2022, respectively. Overall, Kit's revenue doubled in 2022 versus 2021. Other revenue totaled $3.9 million in Q4 2022, which incorporated reduced Agrisera revenue as it focused on internal Olink R&D activities rather than external sales.

For full year 2022, other revenue was $11.7 million, up 48%. Total Explore revenue of $43.2 million was 75% of our total revenue in Q4 and on a trailing 12-month basis, represented 71% of total revenue. We doubled Explore externalization in 2022, adding 12 in Q 4 and 23 in the second half, reaching 52 by year-end 2022. Q4 Explore externalizations were the most ever during a single quarter. These installations in aggregate represents a nearly 1.1 million in annual sample volume potential, and we achieved roughly 800,000 in average customer pull-through during the 12 months ended December 31, 2022. We also delivered 28 new Signature instruments to customers in Q4 and more than tripled the installed base during 2022, reaching a total of 91 by the end of the year.

Signature adoption continues to show our strength in the mid- and low plex segments with uptake by new and existing customers. We have also seen an increasing number of institutions that now have multiple Signature instruments, which bodes well for 2023 prospects. In addition to the strong performance from both Signature and Explore in the fourth quarter, we also introduced Olink Insight and Olink Flex, which allow for a more customized proteomics research process and both addressing eager customer needs. We view continued product development like this to be a key differentiator for Olink as the leader of the modern proteomics era.

In addition to continued investment in our internal product development pace and capability, we are also actively monitoring external investment opportunities, including bolt-on M&A to augment our antibody antigen development and supply chain capabilities. We're focused and disciplined in our evaluation of external opportunities, and we believe it is imperative to find a partner who shares Olink's cultural commitment to innovation and value to customers. Investing in talent remained a top priority in 2022 as well. We started the fourth quarter with 548 employees and reached 582 upon entering the new year, including 208 full-time employees on the commercial team.

Lastly, as you recall, we provided 2023 guidance just over a month ago, and we are reiterating that guidance today. We expect full year 2023 reported revenue to be in the range of $192 million to $200 million, representing growth of approximately 37% to 43% over 2022. In 2023, we expect another year of strong execution in the sizable and expanding proteomics market that offers significant runway for Olink's growth.

I'll now turn the call over to Oskar to provide additional financials.

Thanks, Carl, and hello, everyone. As we announced last month, revenue growth was strong once again in the fourth quarter of 2022, up 33% on a reported basis and up 37% on a constant currency basis. For the full year, 2022 reported revenue growth was 47% and constant currency growth was 53%. We continue to invest in line with our strategic plan, reporting adjusted EBITDA of positive $14.9 million for the fourth quarter of 2022 as compared to negative $1.4 million for the fourth quarter of 2021. Full year adjusted EBITDA was negative $3.9 million in 2022 versus negative $18.5 million in 2021, clearly demonstrating the inherent leverage in our business model.

As Carl mentioned, at the end of Q4, we had 52 externally placed revenue-generating Explore installations. Even with a significant number of new externalizations in the fourth quarter and second half of 2022, average customer pull-through over the last 12 months was a strong 800 (technical difficulty) in quarter-to-quarter pull-through, which could be further impacted by our customer spending seasonality, overall, though we anticipate continued growth over time. Driven by very strong performance from Explore as well as Target, the total Kits revenue for the fourth quarter doubled to $30.6 million as compared to $15.3 million for the fourth quarter of 2021.

Analysis service revenue for the fourth quarter of 2022 was $23.4 million versus $23.7 million for the fourth quarter of 2021, in line with Olink's goal of driving product mix to our kits. In addition, while year-over-year analysis services revenue declined 1% in Q4 2022 on a reported basis, it grew approximately 30% when adjusting for the completion of the UKB project. The mix of kits versus analysis services continued to improve quarter-over-quarter from 42% of total revenue in Q3 to 53% of total revenue in Q4, with the kit mix for all of '22 representing 39% of total revenue, increasing from 28% for the full year of 2021. Led by sale of Signature Q100 instrument, other revenue was $3.9 million for the fourth quarter as compared to $4.7 million for the fourth quarter of '21.

Full year 2022 other revenues totaled $11.7 million versus $8 million for 2021. As Carl discussed, other revenue was impacted by Agrisera and our strategic focus on internal Olink R&D activities rather than external sales. By geography, revenue during the fourth quarter of 2022 was $31.9 million in North America, $20 million in EMEA, including Sweden and $6 million in China and Rest of the World, including Japan. Year-over-year revenue in EMEA decreased 1% for the fourth quarter on a reported basis and grew approximately 40% when adjusted for the completion of the UK Biobank project. By geography, revenue during the full year of 2022 was $66.5 million in North America, $57.7 million in EMEA and $15.6 million in China and Rest of the World.

Consolidated adjusted gross profit was $44 million in the fourth quarter of 2022 as compared to $26.5 million in the fourth quarter of 2021. Full year 2022 adjusted gross profit totaled $97.9 million versus $61.3 million for 2021. Adjusted gross profit margin for kits was 87.6% for the fourth quarter of 2022 as compared to 85.1% for the fourth quarter of 2021. Full year 2022 adjusted gross profit margin for Kits was 88.4% versus 86.4% for 2021. Q4 2022 adjusted gross profit margin for analysis service was 66.9% as compared to 50.2% in Q4 of 2021. The increase in analysis service margin in the fourth quarter of '22 was due to the completion of the UK Biobank project earlier in the year and continuous improved operational efficiency in service lab.

The analysis services team has performed tremendously well over the past couple of years with the delivery of the UK Biobank project and the continuous efforts to improve efficiency in operations. As we enter the fourth quarter, service margins reverted to the more normalized levels observed historically. Full year 2022 adjusted gross profit margin for analysis services was 60.1% versus 57.3% for 2021. Adjusted gross profit margin for Other was 40.6% in Q4 of 2022 as compared to 34.1% for Q4 of 2021. Total operating expenses for the fourth quarter of 2022 were $34.9 million as compared to $33.1 million for the fourth quarter of 2021.

Full year 2022 total operating expenses were $125.1 million compared to $102.9 million for 2021. The increase in full year 2022 was largely due to continued investment into Olink's commercial organization, research and development and additional public company costs. Operating expenses are broken out as follows: Selling expenses for Q2 of 2022 was $13.4 million versus $12 million for Q4 2021. Administrative expenses for Q2 2022 were $13.9 million versus $11.8 million for Q4 2022. And R&D totaled 6.6 and $8.7 million for Q4 2022 and Q4 2021, respectively. Other operating loss was $1.1 million in the quarter as compared to other operating loss of $600,000 in Q4 of 2021.

Net income for the fourth quarter was $5.4 million as compared to a net loss of $8 million for the fourth quarter of 2021. Net income per share was $0.05 as compared to a loss of $0.07 per share for the fourth quarter of 2021. Net loss for the full year of 2022 was $12.9 million as compared to a net loss of $38.3 million for the full year of 2021. Net loss per share was $0.11 as compared to a net loss per share of $0.43 in the full year of 2021. We ended 2022 with $75 million in cash and cash equivalents. After the close of the fourth quarter, we successfully executed on a [primary] offering that raised $95 million with both our cash balance following the financing to more than $170 million.

With respect to our cash balance, we will remain focused and disciplined with the use of the balance sheet and expect to operate within our profitability guidance. Included in our plan is the acceleration of investment in several internal strategic initiatives such as the further expansion of our protein library in assay development. Additionally, we will continue to evaluate external opportunities to augment our capabilities to achieve our long-term strategic goals. As we enter 2023, the external opportunity set continues to evolve with both quality asset availability and pricing seeming to be more reasonable than in prior periods. As with our previous investments, we tend to remain focus on delivering value to our customers and shareholders over time with the continued discipline around the use of our balance sheet.

Now to our guidance. When considering the continued presence of the multiple macroeconomic headwind this year, Olink expects another strong year of growth with industry-leading growth in 2023. We expect 2023 full year reported revenue growth to be in the range of $192 million to $200 million, representing growth of approximately 37% to 43% on a reported basis and roughly 38% to 44% on a constant currency basis. Olink also expect revenue in 2023 will continue to progress along a seasonal pattern similar to 2021 that is weighted to the second half of the year and fourth quarter specifically.

In addition, Olink believes it will turn to profitability in 2023 as measured by EBITDA, excluding share-based compensation expenses. Looking further ahead, Olink has only just started penetrating the proteomic market segments it operates in from high to low plex and sees tremendous headroom for continued strong growth.

I'll now turn the call over to Jon for his concluding remarks.

Thank you, Oskar, and thank you, Carl and Jan. Olink's leadership in proteomic continues to grow, benefiting from increasingly broad adoption across Flex and across customer segments and across the globe.

At this point, we'll open up the call for questions. Operator?

(Operator Instructions). And our first question coming from the line of Puneet Souda with SVB Securities.

So first of all, congrats on the quarter and impressive 2022, especially with respect to the Explore installed. So maybe if I could start there. I think the important question given the growth in the Explore installs that you have seen in the second half, how should we think about the cadence of those installs this year? I think you have commented in the past, obviously, these could be lumpy. It takes time to get these externalizations completed. So maybe just talk to us about that and how should we think about the cadence of installs and Explore installs for 2023.

Puneet, this is Carl. I'll take that. Yes. So yes, we continue to see a good pipeline. We continue to see demand. I think as you indicate, there will be -- there's some seasonality associated with that, but we expect to see the Explore installed base continue to expand. It's clear that there is demand out there. Even though, as noted, we have over 1 million samples worth of external capacity now for Explore in the marketplace, which is tremendous. But we're continuing to see a sort of broad interest across all of our segments, service providers, academic, biopharma, et cetera, to continue adopting the Explore platform. So yes, you should expect to continue seeing growth of externalization. But yes, it will not be, as I like to say, linear. We'll see a little bit of lumpiness, a little bit of seasonality.

Okay. And then as these Explore installations have happened, I mean, how should we think about that 800,000 pull-through number usually when instruments are installed or new installation happens, there is impact of average pull-through, but just wanted to get your sense as to how should we think about the overall pull-through number for '23.

Yes. I think the -- we'll continue to see, I think, strong pull-through, although, again, I think that number will move a bit tied to seasonality. As just discussed, we had a nice strong surge in the second half. And then we'll be into our seasonality for this year as well, but we expect pull-through again to remain relatively strong. And of course, it will be attached largely to the total number of installs that we have and averaged out over that. But I think that last 12-month figure is a good figure to continue to look at to think about pull-through overall.

Okay. That's helpful. And then last one for me and maybe for Jon. I appreciate the focus is obviously on growth, but you do have flexibility, now valuations have come down. Oskar talked about a little bit about deploying capital. Can you talk a bit about sort of the focus areas, the progress that you have made so far with the Agrisera antibodies? And what -- how are you looking at that overall landscape and the capabilities that you need to bring in, in order to drive the next Explore panel?

Yes, no, as we said in the past that the acquisition of Agrisera has been an extremely successful one for Olink and tremendously important and strategic. And as we noted in our formal notes here, we're a bit ahead of the curve in terms of developing, generating and validating new antibodies to develop new assays to build out the platform in a very accelerated fashion. So yes, we're super excited with the acquisition of Agrisera and what that really helps Olink progress. So as we discussed as well, we're looking into further opportunities similar to Agrisera to expand our capabilities. It could be continued expansion to develop more antibodies, but also on the antigens.

You know how important the antigens are, in particular, as we -- as customers move towards prospective clinical decision-making, where you need to introduce those antigens as calibrators, to do the standard curves and the absolute quantity readout for every assay. And obviously, antigen is a very important part in both generating antibodies as well as validating the assays as well. So antigens are also very important in what we do. So if that gives you any clues in terms of how we're thinking to potentially further strengthening so the upstream work and supply chain that is essential for what we do. That is -- yes, where we're basically focusing most of those efforts. So yes, and you can't plan M&A, right? So -- but we're definitely thinking along those lines and very excited about the opportunity now since we raised that additional capital and have a strong balance sheet.

Our next question coming from the line of Sung Ji Nam with Scotiabank.

Congratulations on the quarter and also the year. So just a couple for me. Could you talk about the potential time line for the library of 5,000 proteins. I don't know if I heard that correctly. But when that kind of might be available at a commercial scale?

Yes. And as we said for some time that we're super excited by being a little bit ahead of the curve on what we communicated around developing, generating and validating new assays. As we also said that we see an ever-increasing demand for increasing throughput as well as trying to simplify protocols as much as possible. So we are doing amazing development across all those fronts. We are very, very excited internally, but we are not giving any timelines to date, but we have to basically stay tuned on that one for now that we are -- we're very excited where we're at.

And then just one for Oskar. I was curious, it's nice to see very strong underlying growth for your service business, excluding for the UK Biobank project. I was wondering if there might be other kind of largest projects that are in the pipeline that could impact your service revenue throughout this year?

Yes, tremendous sort of underlying growth for the service business. And as we look ahead, and I think Carl talked about the sort of the -- I mean, the sort of large set of sort of larger sort of cohort studies that are sort of out there. I think we would sort of -- approached us from sort of a kit perspective. So I mean, I find it sort of unlikely to do sort of something in the service lab of that sort of scale again, sort of where we're sort of sitting today. So I think we would sort of look to do that sort of as a kit business and sort of partner up with other sort of service folks on that.

And our next question coming from the line of Kyle Mikson with Canaccord.

Congrats on the year, better than the preliminary results by a touch. On the '23 revenue guidance assumptions, impressive range that you're reiterating. I was wondering if you could just talk about the kit revenue maybe as a percent of the total for the full year. For comparison, that was like about 50% for the second half of '22 and then it was 22% or so over the first half of the year. So obviously, a big kind of swing there. And you covered Explore a bit before, but how about the dynamics in the mid to low plex business segment with Signature kind of continuing to ramp and then Insight and Flex building momentum.

Kyle, this is Carl. I'll take that one. So yes, looking ahead here for 2023, we expect kits to be roughly 50% of revenue for the year. So we'll continue to shift that mix further towards kit as we progress throughout the year. So we should see that advance sort of throughout the year. And the mid-plex dynamic, yes, so we saw a growth in sort of the mid-plex kit space as well, which is great. Signature is a big driver of that. We continue to see good demand for Signature. The launch of the Flex product has been, I think, a tremendous -- created a tremendous potential for us as well as that expands the capability of Signature and improves our capabilities overall to serve a broader swath of the total proteomics market. So we expect actually to see both continue down a positive path in terms of the shift and drive towards more kit in our mix.

That was great. And then on that note, I guess, I was curious about the customer reception to Flex versus Focus. Both products are relatively similar. Maybe just thinking about this a couple of different ways. First, have there been different types of customers or uses for Flex than Focus? And then has the low plex business line kind of accelerated and given the introduction of Flex, has there been any cannibalization between the 2 products? And maybe like over the long term, do you guys see Flex having like a higher ceiling?

Yes. I think there are different product lines in some ways, Focus as a more bespoke product that allows customers to access the entire library that we have. So that's a little bit of a different use case, I think as far as customer use and development. Flex is -- and the purpose is really to make a sort of a much simpler sort of off-the-shelf type custom product with a library of roughly 200 proteins that are in the sweet spot for what most of our customers want a lot of key inflammation markers and so on. So we see that as sort of a more mass market product that has very broad appeal and a very large and existing market out there. So yes, I think the -- so the revenue mix will shift over time, certainly more heavily toward Flex as it's, I think, a great product that just serves a big need in the marketplace for high-quality mid, low plex protein analysis.

And then last one for me on the 5,000 plex just that you mentioned a moment ago. Could you guys just kind of speak to your level of confidence that the lack of a commercial available 4,500 plex menu is not going to be a headwind like the market share gains as your competitor approaches 10,000 plex this year?

Yes, I think what we saw quite clearly last year is that quality is very important. You have to be able to trust every assay, every data point across every sample that you run to really trust the data to be able to make actionable decisions on that data, driving science or research projects forward. So I think that's a much more important metric than a total number. Our total number is important? Absolutely. Do we see unmet needs and desire to expand? Absolutely. And that's why we are investing aggressively and focusing a lot on that. But you have to marry that with data quality.

So yes, I guess the short answer to your question is that we think we were doing quite well in 2022 with our current offering. And we are super excited looking ahead to continue to expand that. So, no, I mean we feel good where we're at and really trying to meet what we think are the sweet spots of customer demands and unmet needs and are continuing to focus solely on that.

And our next question coming from the line of Matt Sykes with Goldman Sachs.

Congrats on the year. Maybe my first question is just a high level on the funding landscape, both for biopharma academic. Noting your comments the budget flush in Q4 was not as strong as you expected. How do you see the overall funding dynamics for both of those customer segments playing out in '23? And do you think proteomics in terms of research dollars being spent can detach from any kind of slowdown in funding for the broader scientific community?

Yes. Matt, it's Carl. I'll take that one. Yes, I think what we saw in Q4, and I think what we could expect ahead in general is, I think, more I'd like to call it, selective spending. So I think there are still budgets, people are still spending, but I think there's a bit more scrutiny on expenditures and such. So a bit like we saw in Q4, though, however, I think that's what you see is then customers ultimately prioritize how they're spending their budgets to the highest value type of research they can do. So I think we feel good about that because I think the -- as we've seen in our numbers and we see in the marketplace, I think the demand for high-quality proteomics is very high.

But for sure, again, as noted in Q4 the big GoGo budgets of a few years ago are probably a little more constrained than they used to be. So I think that's what we'll see is a slightly more sort of cautious environment. And I think that actually -- to your question about biopharma and academic, I think it's about the same in both cases. So yes, that's where we see things right now.

And then, Oskar, just on analysis services margins. As UK Biobank rolled off, obviously, you had a margin improvement there. Should we look at that sort of Q4 analysis services margins as being more of a normalized run rate for that business? And then I think in your press release, you mentioned increasing lab efficiency. Can we expect some level of margin expansion within analysis services as we move through '23?

So I think, as I said in the remarks, I think sort of the Q4 is sort of a good mark of where sort of our run rate is. And we've driven a lot of efficiency in that business and offset some of these sort of external sort of inflation pressures. But I think sort of where we were sort of in Q4 is sort of a good sort of margin for us sort of looking ahead in that part of the business.

And just one more, if I could squeeze it in. Just following up on Puneet's question on Explore installations. As we think about the cadence for '23, should we think about perhaps maybe in the first half sort of higher lows in terms of Explore installations? I think they were low single digits in Q1 and Q2 of last year. Should we think of that coming up a little bit? And obviously, still not linear and lumpy. But as we just think about sort of the level of Explore installations first half to second half, should we think about that first half as being sort of higher lows when you look at installations?

Well, we're not providing specific guidance on that, but the demand has certainly grown over time, and the pipeline also looks good. So I think we'll see good demand throughout the year. But for sure, I think it will be -- I think we'll see some seasonality in that demand, maybe not to the exact extent as last year, but yes.

And our last questioner in queue coming from the line of Tejas Savant with Morgan Stanley.

Jon, maybe to start on the kits side of things, good traction there. Would you be able to give us a sense for the number of end users for the kit solution today versus, say, a year ago? I know Carl talked about sort of growing traction with the CROs and the service providers. So I was just curious as to get a sense of the breadth of demand here across the customer set beyond just the academic pharma versus service provider split?

I don't think we -- this is Carl. I'll take that one. We don't have a specific number on the number of actual end users. In fact, to your point, it's actually well beyond what you would count with the number of externalizations or customers because as we see in many cases, even if they're not a dedicated service provider, they may be a service provider for their department or their function. So the technology is reaching many, many end users via this strategy, which is what makes it quite a successful one. So our reach is many folds broadly beyond the number of external customers we speak about or Signature placements and so on. So I hope that helps, but it's -- yes, it's broad.

Got it. Helpful. And then on the antigen library development effort, you spoke about either via bolt-on M&A or perhaps even internal efforts. Do you have a sense for just how you envision that being complementary to your current portfolio or perhaps how customers could use both antibody and antigen approaches together? I think that would be helpful as well.

Yes, no, exactly to your point and what we stated, right? I mean antigen is a very important starting point to develop high-quality antibodies, you really want a full length correctly fold with antigen that mimics native human biology to raise high-quality antibody to build a high-quality assay. And that antigen is used also to purify the antibodies. You're using them to develop the assay to dilute, for example, do the standard curve, set the upper load limits of quantification, the linearity of the assay and so forth. And then at the end, you're going to use that antigen as an calibrator for an absolute quantity readout.

And as I'm sure you're seeing with Explore, when you do thousands of samples across thousands of proteins, a relative quantification is a very appropriate readout. You -- I mean, you always compare groups. So for example, healthy versus disease or responder versus nonresponder, but as you walk through our library of products and down towards more clinical use cases, you definitely need that absolute quantitative readout. So it's a tremendously important aspect of protein science. And as you know, when you talk to clinicians, they're used to picogram milliliter or milligram milliliter readout for every protein. And that's why antigens are super important, all the way from rating antibodies and developing assays for high plex but also for those clinical use cases downstream. So a very, very important part of everything we do.

Got it. Super helpful. And then, Jon, can you just give us a sense for the flavor of customer feedback on Olink Insight here? Clearly, that was an important launch. I mean you highlighted that at the Analyst Day as well. Just curious as to what you're hearing from the broader community.

Yes. No, thanks for bringing that up, Tejas. Yes, we are as excited as our customer base. I mean, the feedback that we're getting are excellent. Proteomics is very early days, as you know, and to interpret these large data sets that we now have enabled quite big data sets and complex proteins across pathways and so forth. So a super helpful tool to get to a much faster actionable insights. On top of that, as I'm sure, I mean, we discussed with you over time as well is like one of the most common questions we get from customers. And that also is a very good highlight of the early stage of this field. It's like do you know the normal concentration of your proteins across your library.

So that's sort of where we're at. We don't even know what the normal concentration ratio looks like. And as you know that type of data, we have that in Olink Insight and now are expanding. So very exciting. And of course, now with the Disease Atlas that we also have included there and we'll continue to expand as well with some dramatic results from Mathias Uhlen's Group and in particular, now the first data set around cancer. So extremely exciting to see how proteomics can contribute to, for example, increase the add on the curves in early detection and prognosis of cancer. So yes, all around an amazing tool, which we get very strong customer feedback on. So yes, very exciting.

Got it. And one final one on my end for Oskar, if I may. Just wanted to clarify the comment around phasing, Oskar. I think you talked about 2021 being a better benchmark for the fourth quarter here. So should we think of revenues closer to sort of the mid-40s range in the fourth quarter versus the 41% or so you did in '22 was the right framework?

Yes. Yes. So as we said in the script, sort of 2021, and I think especially when sort of comparing sort of the H1 to H2 seasonality, I think looking at sort of how the year is sort of from an operational standpoint, sort of for us, sort of 2021 is a good benchmark as we look at 2023.

And I'm not showing any further questions at this time. I would now like to turn the call back over to Mr. Jon Heimer for any closing remarks.

Great. Thanks for joining us today and for your interest in Olink. We look forward to keeping you updated on our progress and wish everyone a great day. Thank you so much.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.