PRPO - Precipio Reduces Product Revenue Result Needed for Cash Flow Breakeven | Benzinga
NEW HAVEN, Conn., Sept. 25, 2023 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc. (NASDAQ:PRPO) announced that due to the increased pathology revenue, and the recent operational efficiencies, the company has reduced the revenue required from the products division to reach breakeven from $8M to $6M annually, or $1.5M per quarter, 25% below previous estimates. This means that the company anticipates reaching cash flow breakeven sooner.
Three key factors drive this positive change:
- Increased Pathology revenues. As previously announced, the company has exceeded its target for pathology revenues, meeting its goal of a $14M run rate in August, 4 months earlier than planned. As this business continues to grow with September revenues also expected to exceed the breakeven point, and becomes a cash generating division, this positively impacts the company's overall breakeven calculation.
- Improved gross margins. Alongside the increased revenues in the pathology business, scale economies within the lab lead to improved gross margins. This means that each dollar of revenue contributes a higher percentage to the bottom line, bringing the company closer to cash flow breakeven.
- Impact of cost reduction initiatives. As more of the cost reduction initiatives begin to impact company operations and cash, breakeven revenue targets are further reduced.
The remaining driver for breakeven is product revenues. As a result of the above factors, the ...