Our non-GAAP gross margin for the third quarter expanded to 57% by 830 basis points, compared to the third quarter of ’22, and this includes about 400 basis points of pressure related to one-time warranty-related reserves in the current quarter. On a year-to-date basis, our non-GAAP gross margin improved to 60% and by about 1,000 basis points. Non-GAAP gross margin primarily excludes non-cash amortization of developed technology, which will be fully amortized by the end of Q1, 2024. We continue to face residual headwinds, related to legacy service-related costs, product mix and capacity utilization, but we remain confident in our ability to drive gross margins over time into the mid-60% range. Gross margin will continue to benefit from our SBS Lean approach as well as price realization, but they’re different across instruments, consumables and services, and thus, revenue mix quarter-to-quarter will impact our ability to be overly specific, when it comes to our margin expansion road map.
Moving on to OpEx. On a non-GAAP basis, our total non-GAAP operating expenses of just under $25 million were about 97% of revenue in the third quarter, down from about $30 million and 116% of revenue in 2022. Year-over-year, we reduced non-GAAP operating expenses by 17% in the third quarter, 21% year-to-date. And this is reflected primarily of the cost rationalization programs, we’ve executed over the past 12 months. This is a testament to strong execution of our SBS operating discipline and lean transformation. While driving that strong operating performance, we’re making focused investments in commercial organization, our R&D pipeline to support sustained long-term revenue growth. And this is the playbook that, we plan to replicate with our planned merger with SomaLogic.
We’re excited about the value we expect to create, by rationalizing our combined cost structure, while prioritizing growth investments. Overall, we continue to be thoughtful stewards of our resources, and we remain well positioned, to support our growth initiatives. And that brings me to cash flow and the balance sheet. We ended the third quarter with over $130 million in cash, restricted cash and short-term investments. Operating cash used decreased year-over-year in the third quarter by $14 million or 54%. And on a year-to-date basis, we’ve reduced operating cash used by $47 million or about 58%. As we’ve stated before, we have a multiyear cash runway to execute our core business. We continue to deliver on improvements in operating efficiencies, and have a clear line of sight, to positive cash flow in our core operating business.
Moving to our outlook. As a reminder, on October 4, we updated our full year 2023 revenue guidance, to a range of $100 million to $105 million. We also, today, updated our non-GAAP gross margin outlook for the full year to about 60%, representing a 900 basis point increase over 2022. We remain very encouraged by our continued progress and performance during a year of continued transition, legacy headwinds and a challenging macro environment. And with that, I’ll turn the call back to Michael to provide some additional commentary on our pending merger with SomaLogic, before opening the call up for questions.
Michael Egholm: Thank you, Jeff. It’s been an exciting month since we announced the transaction. We’ve been under road, and we’re very pleased with the reception we are receiving. We are confident that investors of both companies, will see the compelling long-term value proposition this transaction brings, with the expectation of near and long-term financial benefits and incremental growth, through the combination of our two companies. We’re making important progress as we work towards close, which is on track for the first quarter of 2024. We expect to file our preliminary proxy statement in the coming days, and we’re looking forward to continued conversations with our shareholders. With the third quarter now behind us, we are increasingly confident in the strategic rationale for the combination and the long-term financial, and synergy targets we have provided.
With SBI stronghold in academic research settings and SomaLogic stronghold in biopharmaceutical research, our customer bases overlap minimally. This paves the path to a lucrative new and expanded relationships, for both of us and an improved go-forward growth picture for both companies, shareholders. Those benefits will fuel an expected double-digit revenue growth profile over at least the next three years. We’re working closely with the SomaLogic team to drill down further and organize the synergy opportunity, which we plan to share as we get closer to closing. We expect that through the elimination of redundant public company NGA [ph] cost and the company-wide continued application of lean conversion and SBS operating principles, the merger will deliver approximately $80 million in annual cost synergies by 2026, compared to our current combined operating expense run rate for the first half of 2023.
And assuming a Q1 close, our combined entity is expected to have over $500 million in cash to self-fund continued organic and inorganic growth. We look forward to building on all that both companies have accomplished creating a larger, more diversified company and a true leader in our space. We remain more committed than ever, to become a diversified leader in the life science tool space, our pending merger with SomaLogic is the next step, towards the activation of that mission. And with that, I’ll turn it over to Rachel to open the line for questions.
Operator:
Michael Egholm: Thank you, Rachel. I’d like to conclude by thanking our team for their execution and our investors for their continued support of our mission. While we are pleased with our results to-date, we remain mindful of the work still to be done and of the highly uncertain market environment, which we are currently navigating. We look forward to providing you further updates and seeing many of you at the Jefferies Healthcare Conference in London next week. Back to you, Rachel.
Operator: Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
