Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $451,000, with full-year revenue at $2.4 million, reflecting a gross profit of $1.2 million and a gross margin of 47% for the year [20][21] - Q4 gross margin was 27%, impacted by a higher proportion of consumable revenue compared to hardware sales [20] - Total operating expenses for Q4 2025 were $21.2 million, down from $31.3 million in Q4 2024, with adjusted operating expenses at $18.3 million compared to $26.7 million in the prior year [21][22] Business Line Data and Key Metrics Changes - The company reported a focus on consumable revenue, with expectations of a more than 25% increase in the number of consumable kits run by customers in 2026 [29] - The placement program for instruments has successfully secured 17 new customers, enhancing access to key opinion leaders in the market [6][7] Market Data and Key Metrics Changes - The company anticipates modest capital sales in 2026 due to a focus on preparing the market for the Proteus launch, which is expected at the end of 2026 [5][11] - The NIH funding environment has shown some improvement, which may positively impact customer capital expenditures [49] Company Strategy and Development Direction - The company aims to accelerate commercial adoption, deliver on its innovation roadmap, and preserve financial strength as it prepares for the Proteus launch [4][18] - The Proteus system is expected to surpass the first-generation technology across key performance metrics, with a list price set at $425,000 to balance premium value and accessibility [11][78] Management's Comments on Operating Environment and Future Outlook - Management views 2026 as a transition year, prioritizing long-term platform adoption over short-term revenue maximization [24][26] - The company is committed to maintaining fiscal discipline while ensuring core strategic initiatives are funded appropriately [19][26] Other Important Information - The company has a strong balance sheet with $215.8 million in cash and investments, allowing it to support operations into the second quarter of 2028 [23][25] - Insider ownership remains significant, with no management team members selling shares outside of plan-mandated selling for tax withholdings [27] Q&A Session Summary Question: What are the trends in consumables within the installed base? - Management noted consistent purchasing rates from customers, with expectations of a more than 25% increase in consumable kits run by customers in 2026 [29] Question: Should we expect very few placements in 2026 with most revenue from consumables? - Management confirmed that revenue will primarily come from consumables and services, with limited capital equipment sales anticipated [31][32] Question: How should we think about the launch curve for Proteus? - Management indicated that existing Platinum users will likely transition to Proteus, while new customers may adopt it based on its capabilities [34][35] Question: Does the $98 million in guidance for operating expenses include stock compensation? - Management clarified that the adjusted operating expense number excludes stock-based compensation, focusing on cash-oriented expenses [41] Question: Is there confidence in the price point for Proteus based on customer feedback? - Management stated that the price point was released to assist customers in capital planning, with no secured orders yet but positive feedback from discussions [45][47] Question: What applications are expected to provide a tailwind for Proteus? - Management highlighted the potential for Proteus in complex biological samples and post-translational modifications, which are key areas of focus [64][66] Question: Will there be an increase in the field sales force for Proteus? - Management confirmed that the total spend for 2026 includes augmenting the commercial team to be launch-ready for Proteus [67][68]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $155 million, with $138 million excluding license and royalty revenue, down 2% year over year [5][20] - Total consumables revenue was $115.4 million, up 5%, while instrument revenue was $14.8 million, down 42% [20][21] - Gross profit for Q1 was $105.4 million, with gross margins increasing to 68% from 66% year over year [22] Business Line Data and Key Metrics Changes - Chromium consumables revenue was approximately flat at $84.1 million, while spatial consumables revenue increased by 18% to $31.2 million, driven by Xenium consumables [20][21] - Total instrument revenue saw a significant decline, with Chromium instrument revenue down 25% and spatial instrument revenue down 49% [21] Market Data and Key Metrics Changes - Revenue in the Americas decreased by 7% to $73.8 million, EMEA decreased by 8% to $31.9 million, while APAC increased by 22% to $32.4 million [22] - Instrument revenue declined across all geographies, although strong consumable sales helped offset the impact in APAC [22] Company Strategy and Development Direction - The company is navigating a challenging macro environment, withdrawing full-year revenue guidance and implementing quarterly guidance due to uncertainty in U.S. academic and government research funding [10][25] - A focus on cost-saving measures, including an 8% reduction in workforce, is aimed at maintaining a strong balance sheet while continuing to invest in key priorities [12][29] - The company is committed to long-term growth, with confidence in capturing large opportunities despite current challenges [19][30] Management's Comments on Operating Environment and Future Outlook - Management highlighted a deteriorating research funding environment, with significant impacts on customer purchasing behavior and project initiation [9][10] - There is optimism regarding the long-term potential of the company's products, particularly in single-cell and spatial biology, despite current market challenges [11][19] - The company is closely monitoring the evolving tariff landscape, with minimal reliance on China in its supply chain [27][28] Other Important Information - The company has completed a sales reorganization to enhance focus and coverage in the current environment [11] - Recent product launches have been well-received, contributing to increased usage and adoption among customers [14][15] Q&A Session Summary Question: Current backdrop and customer conversations - Management noted that customer conversations have become increasingly dire due to funding uncertainties, prompting cost-cutting measures among institutions [42][44] Question: Year outlook and instrumentation vs consumables - Management indicated that Q2 is expected to mirror Q1 trends, with pressure on CapEx in instrumentation but stable consumables performance [55][56] Question: Headcount reduction and OpEx initiatives - The company emphasized that the headcount reduction will lead to over $50 million in operating expense savings for 2025, while still retaining critical talent for growth [70][69] Question: Regional sales dynamics - Management acknowledged that while EMEA sales have declined, the fundamental business remains strong, and recent hiring in Europe is expected to improve performance [76][75] Question: Demand in APAC and potential pull forward - Strong underlying demand in APAC, particularly in China and Japan, was noted, with structural improvements contributing to robust performance [78][79] Question: Long-term growth opportunities in organoid research - Management expressed optimism about the potential for single-cell sequencing in organoid research, viewing it as a promising growth area [99][98] Question: Tariffs and demand in China - The company does not anticipate significant pull forward in demand due to tariffs, and it has strategies in place to mitigate potential impacts [108][107]