Quanterix Corporation (NASDAQ:QTRX) Q4 2022 Earnings Conference Call March 3, 2023 8:30 AM ET Company Participants Masoud Toloue - CEO Mike Doyle - CFO Conference Call Participants Matt Sykes - Goldman Sachs Puneet Souda - SVB Securities Kyle Mikson - Canaccord Genuity Operator Good day, and thank you for standing by. Welcome to the Quanterix Corporation Q4 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer sess ...

Financial Performance & Guidance - Quanterix expects modest growth in 2023 and anticipates a return to double-digit growth by 2024[24] - The company aims to be cash flow positive at revenue between $170 million and $190 million in 2023[24] - Q4 2022 GAAP gross margin was 48.8%, while the non-GAAP gross margin was 41.3%[8, 12, 35] - Q4 2022 GAAP revenue was $25.8 million[8, 12, 35] - Quanterix anticipates GAAP gross margin in the mid-40s and non-GAAP gross margin in the low-40s for the end of 2023[2] - The company expects cash burn to improve by approximately 10% in 2023[2] Product & Scientific Advancements - Simoa pTau181 and NfL were associated with Alzheimer's Disease (AD) incidence within 9 years of diagnosis[31] - A study showed that 10 mg/kg of Leqembi every two weeks reduced mean plasma pTau-181 by 24% from baseline in 79 weeks[25] - Simoa GFAP was associated with clinical AD incidence 9 to 17 years before diagnosis[33] Revenue Streams - Lilly MCA (Master Collaboration Agreement) projects contributed to revenue, with a 28% increase[1, 20, 21] - The company estimates Lilly MCA license fee revenue between approximately $103 million and $109 million[1]

PART I [Business](index=6&type=section&id=Item%201.%20Business) Quanterix specializes in ultra-sensitive digital immunoassay platforms, providing instruments and services for life science and pharmaceutical markets, undergoing a 2022 restructuring to enhance quality and market focus - The company's proprietary Simoa technology enables the detection of protein biomarkers at extremely low concentrations, a significant advancement over conventional ELISA technology[20](index=20&type=chunk)[21](index=21&type=chunk) - Simoa technology has been cited in over **2,000 scientific publications** and the company serves a customer base of over **1,300**[22](index=22&type=chunk)[32](index=32&type=chunk) - In Q3 2022, Quanterix initiated a Restructuring Plan, which included eliminating **119 positions** and starting an assay redevelopment program to improve manufacturing and delivery of high-quality assays at scale[23](index=23&type=chunk) - The company's installed instrument base grew to **876 instruments** as of December 31, 2022, providing a recurring revenue stream from consumables[32](index=32&type=chunk) [Our Products and Services](index=6&type=section&id=Our%20Products%20and%20Services) Quanterix offers Simoa instruments and biomarker assays, with its CLIA-certified Accelerator Laboratory providing contract research and LDTs Quanterix Instrument Portfolio | Instrument | Technology | Key Features | | :--- | :--- | :--- | | **HD-X** | Bead-based | Fully automated, high productivity, upgraded version of HD-1 | | **SR-X** | Bead-based | Compact benchtop, lower price, flexible assay prep | | **SP-X** | Planar array | High multiplexing capabilities, ideal for oncology/immunology | - The Accelerator Laboratory has completed over **1,900 projects** for more than **400 customers** and launched LDTs for pTau-181 (Alzheimer's evaluation) and NfL (neurodegeneration evaluation)[27](index=27&type=chunk) - Through its subsidiary UmanDiagnostics, the company supplies premier Neurofilament light chain (NfL) antibodies and ELISA kits, critical for its neurology assays[28](index=28&type=chunk) [Our Strategy](index=10&type=section&id=Our%20Strategy) The company's strategy drives Simoa technology adoption in life science and pharma, leveraging neurological biomarkers before expanding into diagnostics - Initial focus is on the life science research/pharma market due to reduced regulatory and reimbursement risk[35](index=35&type=chunk) - A core part of the strategy is to expand into the diagnostics market, leveraging Simoa's sensitivity to enable less-invasive blood-based tests[35](index=35&type=chunk) - The company is capitalizing on the increasing relevance of neurological biomarkers (NfL, pTau-181, pTau-217) in clinical trials for drugs like lecanemab and donanemab[35](index=35&type=chunk) [Our Market Opportunities](index=24&type=section&id=Our%20Market%20Opportunities) Quanterix targets a **$75 billion** market opportunity across life science research/pharma (**$20 billion**) and diagnostics (**$55 billion**) markets Total Addressable Market (TAM) | Market Segment | Estimated TAM | | :--- | :--- | | Life Science Research/Pharma | ~$20 billion | | Diagnostics | ~$55 billion | | **Total** | **~$75 billion** | [Intellectual Property](index=51&type=section&id=Intellectual%20Property) The company's core strength is its extensive intellectual property, built around proprietary Simoa technology, with numerous owned and licensed patents - The core Simoa bead-based technology originated at Tufts University and is exclusively licensed to Quanterix[166](index=166&type=chunk)[194](index=194&type=chunk) - As of March 1, 2023, the company owned **29 issued U.S. patents** and had **17 pending U.S. patent applications**, in addition to numerous international patents and applications[174](index=174&type=chunk) - The patent portfolio for the planar array technology was acquired with Aushon Biosystems in 2018 and includes at least **ten issued U.S. patents**[186](index=186&type=chunk) [Government Regulation](index=57&type=section&id=Government%20Regulation) Most Quanterix products are Research Use Only, but its CLIA-certified lab offers LDTs subject to CLIA regulations, with potential for future FDA oversight - Most current products are labeled "For Research Use Only. Not for Diagnostic Procedures," which generally exempts them from FDA premarket review[197](index=197&type=chunk) - The company operates a CLIA-certified laboratory, which is subject to federal standards under the Clinical Laboratory Improvement Amendments of 1988 (CLIA)[218](index=218&type=chunk) - The FDA has granted Breakthrough Device designation for the Simoa pTau-181 blood test for Alzheimer's evaluation and the Simoa NfL plasma test for multiple sclerosis, potentially accelerating their review processes[86](index=86&type=chunk)[99](index=99&type=chunk)[214](index=214&type=chunk) [Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including net losses, operational challenges from restructuring, reliance on single-source manufacturers, and internal control weaknesses - The company has a history of annual net losses, incurring a **net loss of $96.7 million** in 2022, and expects losses to continue[254](index=254&type=chunk) - There is a risk that the company may fail to achieve the intended cost savings and quality benefits from its 2022 Restructuring Plan and assay improvement program[251](index=251&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) - Quanterix relies on single contract manufacturers for its Simoa HD-X (STRATEC) and SR-X (Paramit) instruments, posing a significant supply chain risk[251](index=251&type=chunk)[292](index=292&type=chunk) - Management identified material weaknesses in internal control over financial reporting as of December 31, 2022, which could result in material misstatements if not remediated[251](index=251&type=chunk)[261](index=261&type=chunk) - A significant portion of revenue comes from a few large customers, and the loss of any of these could harm operating results[251](index=251&type=chunk)[277](index=277&type=chunk) [Properties](index=124&type=section&id=Item%202.%20Properties) Quanterix's headquarters are in a leased **91,600 sq ft** facility in Billerica, MA; a newly leased **85,800 sq ft** Bedford facility will be subleased - The company's principal facility is a **91,600 sq. ft.** leased space in Billerica, MA, with a lease term extending from April 2019[398](index=398&type=chunk) - A newly leased **85,800 sq. ft.** facility in Bedford, MA, will not be occupied as part of the 2022 Restructuring Plan; the company intends to sublease this space[398](index=398&type=chunk)[401](index=401&type=chunk) [Legal Proceedings](index=126&type=section&id=Item%203.%20Legal%20Proceedings) As of December 31, 2022, Quanterix was not a party to any material legal proceedings, only non-material matters - As of December 31, 2022, the company was not party to any material legal proceedings[402](index=402&type=chunk) PART II [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=126&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2022, total revenue decreased **5%** to **$105.5 million**, net loss widened to **$96.7 million** due to lower gross margin and restructuring/impairment charges [Results of Operations](index=147&type=section&id=Results%20of%20Operations) For FY2022, total revenue decreased **5%** to **$105.5 million**, product revenue fell, service revenue grew, leading to a **68%** increase in net loss to **$96.7 million** Comparison of Operations for Years Ended Dec 31, 2022 and 2021 | Financial Metric | 2022 (in thousands) | 2021 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$105,522** | **$110,556** | **(5)%** | | Product Revenue | $69,808 | $81,062 | (14)% | | Service & Other Revenue | $34,495 | $23,629 | 46% | | **Gross Profit** | **$46,806** | **$61,728** | **(24)%** | | Gross Margin | 44% | 56% | (12) p.p. | | **Total Operating Expenses** | **$148,510** | **$120,314** | **23%** | | Research & Development | $25,890 | $27,978 | (7)% | | Selling, General & Admin | $91,995 | $92,336 | (0)% | | Restructuring & Impairment | $29,347 | $0 | N/A | | **Loss from Operations** | **($101,704)** | **($58,586)** | **(74)%** | | **Net Loss** | **($96,700)** | **($57,688)** | **(68)%** | - The decrease in product revenue was primarily due to reducing production levels of consumables to ensure quality[485](index=485&type=chunk) - The increase in service and other revenue was primarily due to revenue recognized from the Lilly Collaboration Agreement[486](index=486&type=chunk)[487](index=487&type=chunk) - The company incurred significant one-time expenses in 2022, including **$3.8 million** in restructuring costs, **$8.2 million** in goodwill impairment, and **$17.4 million** in other long-lived asset impairment[495](index=495&type=chunk) [Liquidity and Capital Resources](index=151&type=section&id=Liquidity%20and%20Capital%20Resources) Quanterix ended 2022 with **$338.7 million** in cash, primarily from equity offerings, believing current reserves are sufficient for the next 12 months Key Liquidity Metrics (as of Dec 31, 2022) | Metric | Amount (in millions) | | :--- | :--- | | Cash and Cash Equivalents | $338.7 | | Accumulated Deficit | ($402.2) | | Net Cash Used in Operating Activities (FY 2022) | ($48.3) | - The company financed operations primarily through equity offerings, including raising approximately **$270 million** in net proceeds in February 2021[503](index=503&type=chunk)[504](index=504&type=chunk) - Management believes that current cash and cash equivalents will be sufficient to meet anticipated operating cash requirements for at least the next 12 months[517](index=517&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=157&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to credit, foreign currency, and interest rate risks, with foreign revenue at **38%** and interest rate risk considered minimal - One customer accounted for **13% of total revenue** for the year ended December 31, 2022[530](index=530&type=chunk) - Approximately **38% of total revenue in 2022** was generated from customers outside of North America, exposing the company to foreign currency exchange risk[531](index=531&type=chunk) - Interest rate risk is considered immaterial due to the short-term nature of the company's **$338.7 million** in cash and cash equivalents[533](index=533&type=chunk) [Financial Statements and Supplementary Data](index=157&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2022, 2021, and 2020, including balance sheets and statements of operations Consolidated Balance Sheet Highlights (as of Dec 31) | Account (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $338,740 | $396,465 | | Total current assets | $381,403 | $448,955 | | Total assets | $434,199 | $501,527 | | **Liabilities & Equity** | | | | Total current liabilities | $30,958 | $36,977 | | Total liabilities | $75,259 | $60,575 | | Total stockholders' equity | $358,940 | $440,952 | Consolidated Statement of Operations Highlights (Year ended Dec 31) | Account (in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total revenue | $105,522 | $110,556 | $86,377 | | Gross profit | $46,806 | $61,728 | $48,182 | | Total operating expenses | $148,510 | $120,314 | $79,766 | | Loss from operations | ($101,704) | ($58,586) | ($31,584) | | Net loss | ($96,700) | ($57,688) | ($31,530) | | Net loss per share | ($2.61) | ($1.60) | ($1.07) | [Controls and Procedures](index=159&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of Dec 31, 2022, due to material weaknesses in internal control, primarily from insufficient personnel - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2022[537](index=537&type=chunk) - Material weaknesses were identified in internal controls related to: (i) inventory accounting, (ii) salary and commissions expense, (iii) the financial statement close process, and (iv) property and equipment accounting[541](index=541&type=chunk)[549](index=549&type=chunk) - The primary cause of the control deficiencies was an insufficient number of qualified personnel in key accounting and finance functions[541](index=541&type=chunk) - A remediation plan is underway, which includes hiring more personnel, engaging consultants for technical accounting and system assessment, and providing additional training[544](index=544&type=chunk) PART III [Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=165&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information for Items 10-14, covering directors, executive compensation, security ownership, and accountant fees, is incorporated by reference from the 2023 proxy statement - The detailed information for Part III of the 10-K is not included directly in this report but is incorporated by reference from the forthcoming 2023 proxy statement[561](index=561&type=chunk)[562](index=562&type=chunk)[563](index=563&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=167&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the 10-K, including corporate governance documents, material contracts, and certifications - This section provides a comprehensive list of all exhibits filed with the 10-K, including key agreements like the Exclusive License Agreement with Tufts University and manufacturing agreements with STRATEC and Paramit[570](index=570&type=chunk)[572](index=572&type=chunk)[574](index=574&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38319 QUANTERIX CORPORATION (Exact name of registrant as specified in its charter) (State or other juri ...

Start Time: 16:30 January 1, 0000 5:03 PM ET Quanterix Corporation (NASDAQ:QTRX) Q3 2022 Earnings Conference Call November 08, 2022, 16:30 PM ET Company Participants Masoud Toloue - CEO Michael Doyle - CFO Conference Call Participants Alex Vukasin - Canaccord Genuity Matt Sykes - Goldman Sachs Stephanie Yan - Cowen Operator Good day and thank you for standing by. Welcome to the Quanterix Corporation's Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speak ...

November 8, 2022 Q3 2022 Earnings Call Forward-Looking Statements & Pro-Forma Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. Forwardlooking statements in th ...

Financial Data and Key Metrics Changes - Total revenues for Q2 2022 were $23.5 million, representing a 7% decline year-over-year [11][15] - Consumable revenue declined by 29% year-over-year, significantly impacting overall revenue [11][16] - Pro-forma gross margin for Q2 2022 was 28.3%, down from 47.5% in Q2 2021, reflecting quality-related challenges and increased costs [11][20] - Operating expenses increased to $31.6 million in Q2 2022, up $5.9 million from the previous year, driven by headcount increases and other costs [22] Business Line Data and Key Metrics Changes - Product revenue in Q2 2022 was $14.8 million, a decrease of 21% compared to Q2 2021, with consumables being the largest contributor to this decline [15][16] - Service revenue increased by 51% year-over-year to $8.5 million, bolstered by collaborations, particularly with Eli Lilly [18] Market Data and Key Metrics Changes - The market opportunity in neurodegenerative research is growing, with increased demand for ultrasensitive tools for early biomarker detection [27] - The company has over 1800 publications demonstrating the effectiveness of Simoa technology in advancing drug approvals and biomarker discovery [29] Company Strategy and Development Direction - The company is undergoing a comprehensive operational plan to address quality challenges and improve the manufacturability of assays [10][30] - Focus has been realigned around three principles: Quality, Innovation, and Positioning to unlock translational market value [10] - The company aims to return to double-digit revenue growth by 2024, following the completion of its restructuring efforts [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges significant challenges but emphasizes a comprehensive operational plan to improve quality and scalability [30] - The company remains committed to transforming diagnostics for neurodegenerative diseases and advancing biomarker research [30] Other Important Information - A reduction in workforce affecting approximately 130 employees has been announced as part of the restructuring plan [10][13] - Kevin Hrusovsky has stepped down as Executive Chairman, with Martin Madaus appointed as the new Independent non-Executive Chairman [14] Q&A Session Summary Question: Can you discuss the quality challenges and their impact? - Management highlighted high costs of quality related to manufacturing processes and product stability, leading to a redevelopment program for assays [33] Question: What gives confidence in the flat revenue guidance despite layoffs? - Management noted that demand for Simoa products remains strong, and the focus on quality and innovation will support future growth [36] Question: Are collaborations with Eli Lilly and other partners impacted? - Management confirmed that there are no anticipated impacts on existing collaborations, including those with Eli Lilly [38] Question: What triggered the strategic review of the business? - The strategic review was initiated to assess operational efficiency and resource allocation, particularly in light of significant costs associated with product delivery [42] Question: How does the company differentiate its tests from competitors? - Management emphasized the extensive publication record and the sensitivity of their tests, which leverage Simoa technology for superior results [61][62] Question: What are the updates on the pTau-181 test and its market potential? - The company launched the first pTau-181 laboratory developed tests, which are expected to pave the way for future diagnostic applications [66]

| --- | --- | --- | --- | --- | --- | --- | |----------------------------------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quanterix™ Q2 2022 Earnings Call | | | | | | | | August 8, 2022 | | | | | | | | | | | | | | | Forward-Looking Statements & Pro-Forma Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "expec ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38319 QUANTERIX CORPORATION (Exact name of registrant as specified in its charter) Delaware 20-8957988 (Stat ...

Front Matter [SEC Filing Information](index=1&type=section&id=SEC%20Filing%20Information) This section provides the basic filing information for the Quarterly Report on Form 10-Q for Quanterix Corporation, including the reporting period, commission file number, and securities registered - The report is a Quarterly Report on Form 10-Q for the period ended March 31, 2022[2](index=2&type=chunk) - Quanterix Corporation's Commission File Number is **001-38319**[2](index=2&type=chunk) Securities Registered | Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | | :-------------------------------- | :------------------ | :----------------------------------------- | | Common Stock, $0.001 par value per share | QTRX | The Nasdaq Global Market | - As of May 4, 2022, the registrant had **36,910,137 shares** of common stock outstanding[4](index=4&type=chunk) [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section serves as a cautionary statement, informing readers that the report contains forward-looking statements subject to risks, uncertainties, and assumptions - The report contains forward-looking statements regarding financial performance, subject to risks and uncertainties[11](index=11&type=chunk) - Readers should not rely on forward-looking statements as predictions of future events, as actual results may differ materially[12](index=12&type=chunk) - The Company undertakes no obligation to update forward-looking statements after the report date, except as legally required[12](index=12&type=chunk) PART I — FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20Unaudited) This section presents the unaudited condensed consolidated financial statements for Quanterix Corporation, including the balance sheets, statements of operations, comprehensive loss, cash flows, and stockholders' equity, along with detailed notes explaining accounting policies, revenue recognition, and other financial disclosures [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets%20at%20March%2031%2C%202022%20and%20December%2031%2C%202021) Condensed Consolidated Balance Sheet Highlights (amounts in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :---------------------------------- | :--------------- | :------------------ | | Cash and cash equivalents | $374,317 | $396,465 | | Total current assets | $433,706 | $448,955 | | Total assets | $504,657 | $501,527 | | Total current liabilities | $31,773 | $36,977 | | Total stockholders' equity | $426,408 | $440,952 | | Total liabilities and stockholders' equity | $504,657 | $501,527 | - Total assets increased slightly from **$501.5 million** at December 31, 2021, to **$504.7 million** at March 31, 2022[15](index=15&type=chunk) - Cash and cash equivalents decreased by **$22.1 million**, while total current liabilities decreased by **$5.2 million**[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) Condensed Consolidated Statements of Operations Highlights (amounts in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Product revenue | $20,656 | $18,248 | | Service and other revenue | $8,810 | $6,409 | | Collaboration revenue | $86 | $261 | | Grant revenue | $— | $2,291 | | Total revenue | $29,552 | $27,209 | | Gross profit | $14,559 | $16,349 | | Loss from operations | $(18,187) | $(9,789) | | Net loss | $(18,153) | $(10,104) | | Net loss per share, basic and diluted | $(0.49) | $(0.29) | - Total revenue increased by **9%** year-over-year to **$29.6 million**, driven by increases in product and service revenue, while grant revenue ceased[16](index=16&type=chunk) - Net loss significantly increased by **80%** year-over-year to **$18.2 million**, and loss per share rose from **$(0.29)** to **$(0.49)**[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) Condensed Consolidated Statements of Comprehensive Loss (amounts in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(18,153) | $(10,104) | | Cumulative translation adjustment | $(1,197) | $(1,251) | | Total other comprehensive loss | $(1,197) | $(1,251) | | Comprehensive loss | $(19,350) | $(11,355) | - Comprehensive loss increased from **$(11.4) million** in Q1 2021 to **$(19.4) million** in Q1 2022, primarily due to the higher net loss[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) Condensed Consolidated Statements of Cash Flows Highlights (amounts in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(21,695) | $(14,089) | | Net cash (used in) provided by investing activities | $(874) | $2,435 | | Net cash provided by financing activities | $979 | $273,313 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(21,590) | $261,659 | | Cash, restricted cash, and cash equivalents at end of period | $376,894 | $444,072 | - Net cash used in operating activities increased to **$(21.7) million** in Q1 2022 from **$(14.1) million** in Q1 2021[21](index=21&type=chunk) - Net cash provided by financing activities significantly decreased from **$273.3 million** in Q1 2021 (due to a public offering) to **$1.0 million** in Q1 2022[21](index=21&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022%20and%202021) Condensed Consolidated Statements of Stockholders' Equity Highlights (amounts in thousands) | Metric | Balance at Dec 31, 2021 | Balance at Mar 31, 2022 | | :-------------------------- | :---------------------- | :---------------------- | | Additional paid-in capital | $745,936 | $750,742 | | Accumulated other comprehensive income (loss) | $441 | $(756) | | Accumulated deficit | $(305,462) | $(323,615) | | Total stockholders' equity | $440,952 | $426,408 | - Total stockholders' equity decreased from **$441.0 million** at December 31, 2021, to **$426.4 million** at March 31, 2022[23](index=23&type=chunk) - Accumulated deficit increased by **$18.1 million** due to the net loss incurred during the quarter[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and operations](index=11&type=section&id=1.%20Organization%20and%20operations) - Quanterix Corporation is a life sciences company developing ultra-sensitive digital immunoassay platforms based on its proprietary Simoa detection technology[26](index=26&type=chunk) - The company's platforms enable reliable detection of protein biomarkers in extremely low concentrations, advancing precision health for research and diagnostics[26](index=26&type=chunk) - Key immunoassay platforms include Simoa HD-1 (launched 2014), SR-X (2017), SP-X (2019), and the upgraded Simoa HD-X (2019)[27](index=27&type=chunk) [2. Significant accounting policies](index=13&type=section&id=2.%20Significant%20accounting%20policies) - There have been no material changes in the Company's significant accounting policies during the three months ended March 31, 2022[31](index=31&type=chunk) [3. Revenue recognition](index=13&type=section&id=3.%20Revenue%20recognition) - Revenue is recognized when a customer obtains control of a promised good or service, reflecting the consideration expected in exchange[32](index=32&type=chunk) - The Company entered into a Master Collaboration Agreement with Eli Lilly and Company (Lilly) in Q1 2022, including a **$5.0 million** upfront payment and quarterly payments for assay R&D services in Alzheimer's disease[36](index=36&type=chunk)[38](index=38&type=chunk) - Approximately **$2.7 million** of revenue from the Lilly Collaboration Agreement was recognized as service revenue during the three months ended March 31, 2022[41](index=41&type=chunk) Disaggregated Revenue by Type and Geography (amounts in thousands) | Revenue Type | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Product revenues - Instruments | $6,222 | $6,961 | | Product revenues - Consumable and other products | $14,434 | $11,287 | | Total Product revenues | $20,656 | $18,248 | | Service and other revenues - Service-type warranties | $2,034 | $1,471 | | Service and other revenues - Research services | $6,240 | $4,298 | | Service and other revenues - Other services | $536 | $640 | | Total Service and other revenues | $8,810 | $6,409 | | Collaboration and license revenue | $86 | $261 | - The aggregate amount of transaction price allocated to unsatisfied or partially satisfied performance obligations was **$10.4 million** as of March 31, 2022, with **$9.2 million** expected to be recognized in the next 12 months[49](index=49&type=chunk) - No grant revenue was recognized during the three months ended March 31, 2022, compared to **$2.3 million** in the prior year, related to the NIH RADx program[61](index=61&type=chunk) [4. Net loss per share](index=21&type=section&id=4.%20Net%20loss%20per%20share) Anti-Dilutive Common Share Equivalents | Type | As of March 31, 2022 | As of March 31, 2021 | | :-------------------------- | :------------------- | :------------------- | | Stock options | 2,185,706 | 2,428,268 | | Unvested restricted stock and stock units | 587,939 | 563,810 | - Common share equivalents, including stock options and unvested restricted stock units, were excluded from diluted net loss per share calculation as their effect would be anti-dilutive[63](index=63&type=chunk) [5. Fair value of financial instruments](index=21&type=section&id=5.%20Fair%20value%20of%20financial%20instruments) Fair Value Measurements of Financial Assets (amounts in thousands) | Financial Asset | March 31, 2022 (Total) | December 31, 2021 (Total) | | :-------------------------- | :----------------------- | :------------------------ | | Cash equivalents - money market funds | $332,112 | $332,093 | - Cash equivalents in money market funds, classified as Level 1, remained stable at approximately **$332.1 million** at both March 31, 2022, and December 31, 2021[64](index=64&type=chunk) [6. Inventory](index=22&type=section&id=6.%20Inventory) Inventory Composition (amounts in thousands) | Inventory Component | March 31, 2022 | December 31, 2021 | | :-------------------------- | :--------------- | :------------------ | | Raw materials | $9,199 | $7,892 | | Work in process | $4,068 | $4,923 | | Finished goods | $9,402 | $9,375 | | Total net inventory | $22,669 | $22,190 | - Total net inventory increased slightly from **$22.19 million** at December 31, 2021, to **$22.67 million** at March 31, 2022, primarily due to an increase in raw materials[65](index=65&type=chunk) [7. Allowance for Credit Losses](index=22&type=section&id=7.%20Allowance%20for%20Credit%20Losses) Allowance for Credit Losses Roll-Forward (amounts in thousands) | Metric | Amount | | :-------------------------- | :----- | | Balance at January 1, 2022 | $419 | | Credit loss gain | $(171) | | Write-offs charged against allowances | $— | | Balance at March 31, 2022 | $248 | - The allowance for credit losses decreased from **$419 thousand** at January 1, 2022, to **$248 thousand** at March 31, 2022, primarily due to a credit loss gain of **$171 thousand**[68](index=68&type=chunk) [8. Other accrued expenses](index=22&type=section&id=8.%20Other%20accrued%20expenses) Other Accrued Expenses (amounts in thousands) | Expense Type | March 31, 2022 | December 31, 2021 | | :-------------------------- | :--------------- | :------------------ | | Inventory purchases | $558 | $568 | | Property and equipment purchases | $202 | $229 | | Royalties | $1,096 | $1,250 | | Professional services | $1,861 | $2,126 | | Leasehold improvements | $1,081 | $— | | Development costs | $977 | $566 | | Tax liabilities | $806 | $430 | | Other | $1,443 | $1,317 | | Total accrued expenses | $8,024 | $6,486 | - Total accrued expenses increased from **$6.49 million** at December 31, 2021, to **$8.02 million** at March 31, 2022, driven by new leasehold improvements and higher development costs[69](index=69&type=chunk) [9. Stock-based compensation](index=24&type=section&id=9.%20Stock-based%20compensation) Stock-Based Compensation Expense (amounts in thousands) | Expense Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Cost of product revenue | $88 | $90 | | Cost of service and other revenue | $166 | $110 | | Research and development | $398 | $399 | | Selling, general, and administrative | $3,175 | $2,787 | | Total | $3,827 | $3,386 | - Total stock-based compensation expense increased by **$0.44 million (13%)** to **$3.83 million** in Q1 2022, with the majority attributed to selling, general, and administrative expenses[70](index=70&type=chunk) - As of March 31, 2022, unrecognized compensation cost related to unvested RSUs and stock options totaled **$42.8 million**, expected to be recognized over **2.9 years**[70](index=70&type=chunk) [10. Leases](index=24&type=section&id=10.%20Leases) - On January 28, 2022, the Company executed a new lease for **85,800 square feet** of office and laboratory space in Bedford, Massachusetts, to serve as its principal office and headquarters[72](index=72&type=chunk) - The initial term of the new lease is **eight years and nine months**, with options to extend for two additional five-year periods[72](index=72&type=chunk) Operating Lease Costs and Commitments (amounts in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Operating lease costs | $663 | $671 | | Weighted average remaining lease term | 8.7 years | 9.6 years | | Weighted average discount rate | 7.4% | 9.7% | | Operating cash flows used for operating leases | $862 | $846 | **Future Minimum Commitments (as of March 31, 2022):** | Period | Amount | | :-------------------------- | :----- | | Total lease payments | $62,649 | | Less: imputed interest | $17,200 | | Total operating lease liabilities | $45,449 | [11. Commitments and contingencies](index=26&type=section&id=11.%20Commitments%20and%20contingencies) - The Company pays low single-digit royalties to Tufts University under an exclusive license agreement for certain intellectual property[76](index=76&type=chunk) - Royalty expense to Tufts University was **$0.3 million** in Q1 2022, down from **$0.5 million** in Q1 2021[76](index=76&type=chunk) - The Company is not currently a party to any pending or threatened litigation that would have a material adverse effect on its financial condition or operations[77](index=77&type=chunk) [12. Collaboration and license arrangements](index=26&type=section&id=12.%20Collaboration%20and%20license%20arrangements) - Collaboration and license revenue was **$0.1 million** in Q1 2022, compared to **$0.3 million** in Q1 2021[78](index=78&type=chunk) - The Company had **$0.5 million** of deferred revenue related to ongoing negotiations with a diagnostics company at both March 31, 2022, and December 31, 2021[79](index=79&type=chunk) - Under the Abbott License Agreement (September 2020), the Company granted Abbott a non-exclusive, royalty-bearing license for bead-based single molecule detection patents in in vitro diagnostics[80](index=80&type=chunk) - No revenue was recognized under the Abbott License Agreement during the three months ended March 31, 2022, or 2021[84](index=84&type=chunk) [13. Related party transactions](index=28&type=section&id=13.%20Related%20party%20transactions) - Royalty expense to Tufts University (a related party) was **$0.3 million** in Q1 2022 and **$0.5 million** in Q1 2021[85](index=85&type=chunk) - Revenue from Harvard University and its affiliates and Mass General Brigham and its affiliates totaled **$0.2 million** in Q1 2022, up from less than **$0.1 million** in Q1 2021[86](index=86&type=chunk) [14. Accumulated other comprehensive loss](index=29&type=section&id=14.%20Accumulated%20other%20comprehensive%20loss) Changes in Accumulated Other Comprehensive Loss (amounts in thousands) | Metric | Balance - December 31, 2021 | Current period accumulated other comprehensive loss | Balance - March 31, 2022 | | :-------------------------- | :-------------------------- | :------------------------------------------------ | :----------------------- | | Cumulative translation adjustment | $441 | $(1,197) | $(756) | | Accumulated Other Comprehensive Income (Loss) | $441 | $(1,197) | $(756) | - Accumulated other comprehensive income shifted to a loss of **$(756) thousand** at March 31, 2022, from an income of **$441 thousand** at December 31, 2021, primarily due to a cumulative translation adjustment of **$(1.2) million**[88](index=88&type=chunk) [15. Subsequent Event](index=29&type=section&id=15.%20Subsequent%20Event) - Effective April 25, 2022, E. Kevin Hrusovsky transitioned from CEO to Executive Chairman of the Board[89](index=89&type=chunk) - Masoud Toloue, Ph.D., President of Quanterix and Diagnostics, was appointed Chief Executive Officer and a Class II director, effective April 25, 2022[89](index=89&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended March 31, 2022, compared to the prior year, highlighting key trends and strategic initiatives [Overview](index=30&type=section&id=Overview) - Quanterix develops ultra-sensitive digital immunoassay platforms (Simoa technology) for precision health research and diagnostics, focusing on protein biomarkers[92](index=92&type=chunk) - The installed base of Simoa instruments generates recurring revenue from consumables, which is expected to be an increasingly important contributor[93](index=93&type=chunk) - The company entered into a Master Collaboration Agreement with Eli Lilly and Company in Q1 2022, including a **$5.0 million** upfront payment, for Simoa immunoassay development in Alzheimer's disease[99](index=99&type=chunk) - In May 2022, the company voluntarily withdrew the EUA for its SARS-CoV-2 antibody and antigen tests due to changing market dynamics, but continues to commercialize RUO-labeled versions[104](index=104&type=chunk) - As of March 31, 2022, cash and cash equivalents were **$376.9 million**, with an accumulated deficit of **$323.6 million**[110](index=110&type=chunk) - The company expects significant expense increases due to expanding sales and marketing, R&D, potential acquisitions, and public company operating costs[112](index=112&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Key Financial Results (amounts in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Increase (Decrease) | % Change | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------ | :--------- | | Product revenue | $20,656 | $18,248 | $2,408 | 13% | | Service and other revenue | $8,810 | $6,409 | $2,401 | 37% | | Collaboration and license revenue | $86 | $261 | $(175) | (67)% | | Grant revenue | $— | $2,291 | $(2,291) | (100)% | | Total revenue | $29,552 | $27,209 | $2,343 | 9% | | Cost of goods sold and services | $14,993 | $10,860 | $4,133 | 38% | | Gross profit | $14,559 | $16,349 | $(1,790) | (11)% | | Research and development | $7,034 | $6,683 | $351 | 5% | | Selling, general, and administrative | $25,712 | $19,455 | $6,257 | 32% | | Loss from operations | $(18,187) | $(9,789) | $(8,398) | (86)% | | Net loss | $(18,153) | $(10,104) | $(8,049) | (80)% | - Total revenue increased by **9%** to **$29.6 million**, primarily driven by a **13%** increase in product revenue and a **37%** increase in service and other revenue, partially offset by the absence of grant revenue[114](index=114&type=chunk) - Cost of product revenue increased by **44%** due to manufacturing inefficiencies and higher excess/obsolete product, leading to a decrease in gross profit by **11%**[115](index=115&type=chunk) - Selling, general, and administrative expenses increased by **32%** due to additional headcount and increased discretionary spending[118](index=118&type=chunk) - Net loss increased by **80%** to **$18.2 million**, primarily due to higher operating expenses and reduced gross profit[113](index=113&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Cash Flow Summary (amounts in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(21,695) | $(14,089) | | Net cash (used in) provided by investing activities | $(874) | $2,435 | | Net cash provided by financing activities | $979 | $273,313 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(21,590) | $261,659 | - Net cash used in operating activities increased to **$21.7 million** in Q1 2022, driven by the net loss and changes in operating assets and liabilities[125](index=125&type=chunk) - Net cash provided by financing activities significantly decreased from **$273.3 million** in Q1 2021 (due to a public offering) to **$1.0 million** in Q1 2022[130](index=130&type=chunk) - The company believes current cash and cash equivalents (**$376.9 million** at March 31, 2022) and commercial sales will be sufficient to meet anticipated operating cash requirements for at least the next 12 months[132](index=132&type=chunk) - No material changes to contractual obligations and commitments since the 2021 Annual Report on Form 10-K, except for the new Bedford, Massachusetts lease[135](index=135&type=chunk) - The company did not have any off-balance sheet arrangements during the periods presented[136](index=136&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the company's market risk information since its Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes to market risk information have occurred since the Annual Report on Form 10-K for the year ended December 31, 2021[142](index=142&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the management's evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2022[144](index=144&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended March 31, 2022[145](index=145&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms that the company is not currently involved in any material legal proceedings - The Company is not currently a party to any material legal proceedings[147](index=147&type=chunk) [Item 1A. Risk Factors](index=44&type=page&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes to the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2021[148](index=148&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there is no applicable information to report regarding unregistered sales of equity securities and use of proceeds - This item is not applicable for the reporting period[149](index=149&type=chunk) [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there is no applicable information to report regarding defaults upon senior securities - This item is not applicable for the reporting period[150](index=150&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there is no applicable information to report regarding mine safety disclosures - This item is not applicable for the reporting period[151](index=151&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report for the period - This item is not applicable for the reporting period[152](index=152&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section provides a comprehensive list of exhibits filed as part of the Quarterly Report on Form 10-Q, including various agreements, certifications, and XBRL documents - The exhibits include a Lease Agreement dated January 28, 2022, for the new Bedford, Massachusetts office and laboratory space[154](index=154&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002) are included[154](index=154&type=chunk) - XBRL Instance Document and Taxonomy Extension Documents are filed as part of the report[154](index=154&type=chunk) SIGNATURES [Signatures](index=48&type=section&id=Signatures) This section contains the official signatures of the company's principal executive officer and principal financial officer, certifying the accuracy and completeness of the Quarterly Report on Form 10-Q - The report was signed by Masoud Toloue, President and Chief Executive Officer, and Michael A. Doyle, Chief Financial Officer, on May 10, 2022[160](index=160&type=chunk)