So that is the small slice of the pie we have. And the opportunity is to really go after the bulk of the DNA makers market and that bulk are people that do need short genes. They need a 5kb, 3kb, 1kb gene, but they need them fast. And right now, the only choice is to go clone it yourself. And with our Express Genes launch, I think we have an opportunity to go after them.
Matt Sykes: And then, just to follow-up on Express Genes, I think it would be helpful just for us to understand how you are going to communicate the Express Genes either revenue or margin contribution over the course of next year. Just to give us a sense of how that’s going. I think following up on Luke’s question about the gross margins, I guess, would have expected there to be a little bit more gross margin expansion given the premium pricing. How should we kind of think about tracking that? And what’s your kind of level of disclosure on a quarterly basis for that business specifically?
Jim Thorburn: Yes. Matt, I can touch on that. If you look at our Q and you look at the K, you’ll see that, we do cover the gene revenue and gene shipments. And if you look over the last few years, you will see that our gene pricing has in fact increased over the last 2, 3 years. And so, every quarter, you’ll be able to see, right, what’s the gene revenue and how many genes we shipped and what’s the average price per gene. So you’ll be able to track it that way. And we’ll start giving more insight on that in our earnings call as we go forward.
Operator: Our next question comes from Vijay Kumar with Evercore ISI.
Vijay Kumar: I had two, both related on guidance here. Q1, pretty solid front loaded guidance. I think guide implies mid-20s kind of growth. But if you look at the components here, I think NGS is up like 50% implied by the guide, SynBio perhaps a little bit softer. And I think the guide — the annual guide implies like SynBio to — growth rates to further decel. So maybe if you can just talk about the assumptions here between those segments, and what you’re seeing from end markets?
Jim Thorburn: Yes. I mean, I can start, Vijay. Thanks for the question. So NGS, we’re doing extremely well. We ended the year very strong NGS orders, just under $40 million, making great progress on NGS. Obviously, some of that’s driven by some of our liquid biopsy customers, MRD customers. So we feel well positioned. In terms of SynBio, with another strong year of growth, the overall business, if you step back and look at it, excluding Biopharma, I think everybody is familiar with our Biopharma issues and it’s good to see Biopharma recurring. Year-over-year, NGS products, SynBio products, I mean, the orders and revenue are 24%, 25%. We feel good about our Express Genes. The guide for this quarter reflects the fact that we get vacation at year-end for some of our customers.
So, we ended the year in good solid position. Doing well in terms of both NGS, SynBio, and it will take time, when we’re looking at the guide as in previous years. There’s always some macroeconomic environment issues that we need to comprehend. I was thrilled to see that in terms of margins, if you look sequentially, we’ve gone from low-30s up towards 37%. You look at the revenue growth last quarter, almost 100% of that fell through in margins. So that gets back to the point in terms of leverage we talked about. We’re going to manage our cost structure going forward. We’re very focused on profitability. We’re excited about the opportunity Express Genes brings in terms of margin enrichment. As I highlighted to Matt, we’ll be giving an update on a quarterly basis in terms of pricing for genes.
So, factory’s doing well. We’re well positioned. And at the same time, when we’re building our forecast, we want to take and comprehend any potential macroeconomic impact.
Vijay Kumar: And one, Jim, maybe on that operating leverage you brought up. If you look at the cadence here, gross margin, it seems like a more modest ramp, but your Q1 versus Q4 exit rate, I think implied numbers, your OpEx is going to step down, while your revenues are up from Q1 to Q2 — Q4, I think are up like $10 million, and OpEx is down. So, is there some incremental cost actions coming in? What is driving that OpEx? And why are we assuming a more muted gross margin ramp?
Jim Thorburn: Yes. So, in terms of gross margin ramp, if you look at the revenue on a go-forward basis, the revenue is almost flat with Q4. The gross margin ramp will come later in the year as we continue to leverage the fixed costs in fact for the future. I think what’s interesting as you do take a look at our forward guidance, the loss from operations this coming quarter is about $47 million, $48 million, and revenue $67 million to $68 million. If you look at the guidance we gave for Q4, we’re projecting revenue of roughly $78 million and the loss from operations is $38 million to $40 million. So revenue is up by roughly $10 million, loss from operations is down by roughly $8 million to $9 million. So our focus is, as we scale, reduce the loss.
And that loss from operations also includes stock-based comp of $15 million and depreciation of $10 million. And as we continue to scale, you’ll see that loss from operations decline, so cash loss declines. This year, the numbers are fairly noisy, but there’s a step-up in stock-based comp. So, the thing to focus on next year is, what is our cash operating loss, as we go forward. And that’s going to decline sequentially throughout the year.
Operator: Our next question comes from Puneet Souda with Leerink Partners.
