Summary of Cytek Biosciences FY Conference Call Company Overview - **Company**: Cytek Biosciences (NasdaqGS:CTKB) - **Industry**: Life Science Tools, specifically Flow Cytometry Key Accomplishments and Performance - **2025 Performance**: Cytek has managed to navigate unexpected challenges, including export controls and funding reductions, with minimal impact on overall performance [2] - **Instrument Sales Growth**: Core Full Spectrum Profiling (FSP) instruments achieved a 3% year-over-year unit growth despite challenging market conditions [3][5] - **Market Position**: Cytek is recognized as a leader in the flow cytometry market, with its FSP technology becoming the industry standard [4][5] Technology and Product Development - **FSP Technology**: Cytek's FSP technology allows for the analysis of more than 50 colors, significantly surpassing conventional flow cytometers [4] - **Aurora Evo Launch**: The new Aurora Evo instrument was launched, incorporating features tailored to pharmaceutical needs, such as automation and support for small particle analysis [20][22] - **Clinical Market Expansion**: Cytek has received clinical clearance in China and is working towards FDA approval in the U.S. for its clinical products [36][37] Market Dynamics and Trends - **Total Addressable Market (TAM)**: The flow cytometry market has an initial TAM of $7.5 billion, with potential growth to $16 billion as applications expand [6][7] - **Funding Challenges**: The U.S. academic and government markets are experiencing funding pressures, impacting purchase decisions, but signs of stabilization are emerging [11][12] - **Regional Performance**: Strong performance in Asia-Pacific, particularly in China, with increasing market share due to Cytek's established reputation [19][13] Financial Insights - **Revenue Growth**: Service and reagent revenues grew 18% year-over-year in Q2, with a stable relationship between installed base growth and service revenue [29] - **Reagent Market Potential**: Cytek captures less than 10% of the $150 million annual reagent market, with strategies in place to accelerate adoption [30][31] - **Guidance for 2025**: The company expects growth in the range of -2% to +2%, with confidence stemming from strong performance in Asia-Pacific and service sectors [42][43] Competitive Landscape - **Market Competition**: The shift towards full spectrum technology has led to increased competition, but Cytek views this as an endorsement of its leadership rather than a threat [39][40] - **Pricing Strategy**: Cytek maintains a cost-efficient approach, focusing on performance rather than pricing as the primary driver for customer selection [40] Long-term Growth Outlook - **Future Opportunities**: Cytek anticipates significant growth potential as the installed base matures and the clinical market expands [46] - **EBITDA Growth Potential**: High incremental margins on instrument sales suggest substantial EBITDA growth as top-line growth resumes [46] Conclusion - Cytek Biosciences is well-positioned in the flow cytometry market, with innovative technology, a strong market presence, and a clear strategy for growth despite current challenges. The company is focused on expanding its product offerings and market share while navigating funding pressures in key regions.

Financial Data and Key Metrics Changes - First quarter revenue for 2025 was $41.5 million, a decrease of 7.6% compared to the first quarter of 2024, primarily due to weakness in instrument sales in the U.S. and EMEA regions [8][25] - Service revenue increased by 24% year-over-year, reaching $13.3 million, driven by the expansion of the instrument installed base [8][26] - GAAP gross profit was $20.2 million, a decrease of 12% from $23 million in the prior year, with a GAAP gross margin of 49% compared to 51% a year ago [27][28] Business Line Data and Key Metrics Changes - Product revenue, which includes instruments and reagents, decreased by 18% compared to Q1 of 2024, mainly due to a weaker instrument market in the U.S. and EMEA [25][26] - Aurora cell sorter revenue grew by 15% year-over-year, while Northern Lights revenue increased by 6% year-over-year in the first quarter [18][19] - Trailing twelve-month recurring revenue grew 17% year-over-year, representing 31% of total revenue in the first quarter, up from 26% a year ago [21][56] Market Data and Key Metrics Changes - Total revenue in the Asia Pacific and the rest of the world was $11.4 million, up 35.6% year-over-year, driven by strong demand in China [11][26] - U.S. and EMEA revenue declined by 13% and 24% respectively, due to lower instrument sales influenced by academic funding uncertainties and government budget pressures [26][27] - The company continues to experience growth in the clinical market, particularly in the EU and APAC regions [22][23] Company Strategy and Development Direction - The company is focused on expanding its market leadership in the cell analysis market and has established manufacturing operations in the U.S., China, and Singapore to optimize product flows [13][14] - Strategic investments are being made to advance the product pipeline, including the launch of the SiPET MUSE microsystem to drive adoption in emerging markets [15][18] - The company aims to leverage its established and expanding installed base to drive long-term growth in recurring services and reagent sales [21][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and uncertainties affecting capital equipment spending in the U.S. and EMEA [12][31] - The full-year 2025 revenue outlook has been revised to a range of $196 million to $210 million, reflecting a growth of -2% to +5% over the full year 2024 [31][32] - Management remains confident in the company's positioning and believes it will perform well relative to the overall flow cytometry market [31][32] Other Important Information - The company has a strong balance sheet, allowing for continued investments in growth and share repurchases [30][34] - The company plans to host six user group meetings in 2025 to engage with the scientific community and showcase its products [5][6] Q&A Session Summary Question: Impact of tariffs on gross margin - Management indicated that tariffs are manageable and expect a limited gross margin impact of 1% to 3%, with improvements anticipated as revenues increase [36][41] Question: Academic government end market outlook - Management acknowledged uncertainties in university funding and indicated that more than 50% of revenue comes from outside the U.S., which mitigates the impact of U.S. funding issues [44][46] Question: Growth drivers for AURORA sales orders - Growth in AURORA sales is attributed to the alignment of the SiTeX sorter with existing analyzers and strong performance across all territories [50][51] Question: R&D spending focus - The company continues to allocate 15% to 20% of revenue to R&D, with a focus on imaging and spectral innovations [59][60] Question: Share repurchase versus M&A - Management plans to balance share repurchases with capital available for M&A, indicating a healthy balance sheet [63]