Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $38.4 million, slightly below expectations, primarily due to fewer than expected Vega shipments in Europe and lower Revio ASPs [6][32] - Consumable revenue reached an all-time high of $21.3 million, demonstrating strong progress towards increasing adoption of long-read sequencing technology [6][12] - Non-GAAP gross margins improved to 42%, the highest level since 2022, driven by strong consumable sales [6][37] - Non-GAAP net loss was $36.8 million, or $0.12 per share, an improvement from a loss of $46 million, or $0.17 per share, in Q3 2024 [39] Business Line Data and Key Metrics Changes - Instrument revenue decreased by 33% year-over-year to $11.3 million, primarily due to lower REVIO unit shipments [32][34] - Consumables revenue grew 15% year-over-year, supported by broad adoption of Spark chemistry and increased utilization across the installed base [12][34] - Service and other revenue increased approximately 25% to $5.8 million, driven by an increase in REVIO service contract revenue [34] Market Data and Key Metrics Changes - EMEA region saw an 18% year-over-year growth, driven by a 50% increase in consumable revenue [7][36] - Americas revenue decreased 10% year-over-year to $18.1 million, reflecting challenges in academic capital spending [35] - Asia Pacific revenue decreased 11% year-over-year to $9.6 million, impacted by fewer REVEAL placements [36] Company Strategy and Development Direction - The company aims to increase adoption of HiFi long-read sequencing technology, particularly in clinical applications and large-scale genome projects [43] - The launch of SPARC NX chemistry is expected to lower the cost of sequencing to less than $300 per genome, making the technology more competitive [26][43] - The company is focusing on clinical applications and expanding its product offerings to drive revenue growth [60][78] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging funding environment in 2026, particularly in the academic sector, but sees strong traction in clinical applications [60] - The company expects Q4 2025 to show approximately 10% sequential growth, driven by increased REVIO placements and strong consumable sales [13][40] - Management is optimistic about achieving cash flow breakeven by the end of 2027, with a focus on reducing cash burn [14][40] Other Important Information - The Sequel II cnDX system received Class III medical device registration approval in China, marking a significant milestone for precision medicine [15] - The company is expanding its HiFi sequencing technology into various clinical applications, including carrier screening and single-gene tests [20][78] Q&A Session Summary Question: Discussion on REVIO and Vega ASPs - Management acknowledged lower REVIO ASPs in Q3 but expects recovery in Q4 due to strategic placements [45][47] - Vega faced procurement delays in Europe, but management remains confident in future placements [48][49] Question: Clarification on Gross Margin - Management noted that strong gross margins were driven by a favorable product mix and improved manufacturing yields [51][53] Question: Funding Environment for 2026 - Management indicated that the funding environment is expected to remain challenging, particularly in the academic sector, but sees robust opportunities in clinical applications [60][61] Question: Spark Chemistry Rollout - Management emphasized that the primary goal of SparkNX chemistry is to drive revenue growth and increase market penetration [76][78] Question: Population Scale Programs - Management reported that excitement around multi-use technology has led to new conversations regarding large population scale programs [82][83]