Why did ABSI's Q4 earnings fall short of forecasts?

Absci Corporation (ABSI) experienced a shortfall in its Q4 earnings when compared to forecasts due to several key factors:

1. **Revenue Decline**: The total revenue for ABSI in Q4 was $665,000, which was significantly lower than the expected $1.78 million. This decrease in revenue was primarily due to a decrease in technology development revenue, which dropped to $1.7 million from $2.2 million in the same quarter of the previous year. Additionally, the revenue for the nine months ended September 30, 2024, decreased to $3.9 million from $5.4 million in the prior year, indicating a trend of declining revenue over time.
2. **Increased R&D Expenses**: Research and development (R&D) expenses increased to $17,985,000 in Q4, up from $11,029,000 in the same quarter of the previous year. This increase was mainly due to higher lab operations costs and an impairment charge for assets classified as held-for-sale. The rise in R&D expenses reflects Absci's continued investment in internal programs, which can strain financial performance in the short term.
3. **Strategic Collaborations and Impairment Charges**: While strategic collaborations, such as the one with AMD, are beneficial in the long term, they can also lead to increased expenses in the short term. Additionally, the company reported an impairment charge for assets classified as held-for-sale, which contributed to the net loss. These factors, combined with the revenue decline, resulted in a net loss of $27,398,000 for the quarter, an increase from the previous year's $21,994,000.

In summary, ABSI's Q4 earnings fell short of forecasts due to a combination of lower revenue from technology development and increased expenses in R&D and strategic collaborations. These factors, coupled with an impairment charge, led to a significant net loss for the quarter.

|code|Ticker|Name|Date|Revenue Surprise|Total Revenue|market_code|
|---|---|---|---|---|---|---|
|ABSI|ABSI.O|Absci|2024 Q1|-1202000|898000|185|
|ABSI|ABSI.O|Absci|2024 Q2|-640000|1270000|185|
|ABSI|ABSI.O|Absci|2024 Q3|-50000|1701000|185|
|ABSI|ABSI.O|Absci|2024 Q4|-1105000|665000|185|