Financial Data and Key Metrics Changes - Total revenue for Q2 2025 increased by 10% year-over-year to $7,300,000, slightly above the midpoint of guidance [7][16] - Recurring revenue rose by 15% to $4,400,000, driven by growth in consumables and service contracts [17] - Gross margins improved to 4%, a seven percentage point increase from the prior year, marking the fourth consecutive quarter of positive gross margins [8][17] Business Line Data and Key Metrics Changes - Product revenue increased by 6% to $4,800,000, supported by mid-teens growth in consumables and higher software sales [16] - Service revenue grew by 18% to $2,500,000, attributed to higher field service activity and increased contract revenue [17] - Four GrowthDirect systems were placed in Q2, maintaining guidance despite delays in customer site readiness [8][16] Market Data and Key Metrics Changes - The company is well-positioned to benefit from significant investments in new pharmaceutical manufacturing capacity in the US, which is expected to incorporate advanced technologies [11][12] - Global trade dynamics are creating uncertainty in customer purchase decisions, particularly for larger capital investments [11][12] Company Strategy and Development Direction - The company announced a new $45,000,000 term loan facility to support long-term strategy and positive cash flow [6][7] - The partnership with MilliporeSigma is expected to enhance product innovation and gross margin expansion over the long term [9][10] - The company is focusing on operational improvements and cost reduction initiatives to drive gross margin expansion [13][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing industry trends and customer support for automation and new technologies [11][12] - There is cautious optimism regarding the timing and scale of customer purchase decisions due to global trade dynamics [12][21] - The company expects to finish the year toward the low end of its previous guidance range for system placements due to near-term uncertainties [19][20] Other Important Information - The company plans to participate in several industry events, including the annual PDA Micro Conference and PharmaLab Congress, to showcase the GrowthDirect platform [14] - The company expects to complete at least 18 validations in 2025, with at least three in Q3 [20] Q&A Session Summary Question: Impact of pharma delays on decision-making - Management noted mixed signals in pharma decision-making but remains encouraged by ongoing conversations and projects with existing customers [24][25] Question: System placements and market share in CAR T - The majority of installations are in existing facilities, but new builds are expected to increase automation and efficiency, benefiting the company [27][28] Question: Reasons for lower guidance on system placements - Management cited trade dynamics and near-term uncertainties as reasons for expecting to finish the year at the lower end of the guidance range [30][31] Question: Stability of consumable revenue growth - Management expects sequential growth in consumables revenue in Q3 and Q4, driven by new high-volume sites coming online [32][34] Question: Near-term levers for gross margin improvement - Focus areas include product cost reduction, procurement efficiencies, and manufacturing improvements, with significant progress expected [37][39] Question: Timing for onshoring initiatives - Management anticipates benefits from onshoring initiatives but noted that specific timing remains uncertain due to construction and equipment ordering dynamics [42][46] Question: Attitude differences between existing and potential customers - Existing customers tend to be more resilient and have ongoing projects, while new customers may be more cautious in the current environment [50][52]

Financial Data and Key Metrics Changes - Total first quarter revenue increased by 28% to $7.2 million, marking the tenth consecutive quarter of meeting or exceeding guidance [8][14] - Service revenue saw a significant increase of 64% year over year, reaching a quarterly record of $3.1 million [8][15] - First quarter gross margins improved to 6%, a 33 percentage point increase compared to the prior year quarter [9][18] - Net loss for the first quarter was $11.3 million, an improvement from a net loss of $13.3 million in the same quarter last year [19] Business Line Data and Key Metrics Changes - Product revenue, which includes systems and consumables, increased by 10% to $4.1 million [14] - Service revenue growth was driven by higher validation activity and an increase in service contract revenue due to more validated GrowthDirect systems [15][17] - Recurring revenue, consisting of consumables and service contracts, increased by 6% to $4 million [16] Market Data and Key Metrics Changes - Global pharmaceutical and biotech companies are planning investments exceeding $150 billion to expand manufacturing capacities, which positions the company favorably to benefit from this trend [11] - The company is experiencing robust demand for the GrowthDirect system, with multiple customers recognizing its value proposition [10] Company Strategy and Development Direction - The collaboration with MilliporeSigma includes global co-exclusive rights to sell the GrowthDirect system and aims to improve gross margins and product costs [12] - The company is focused on expanding its sales funnel and improving manufacturing efficiencies to drive margin improvement [13] Management's Comments on Operating Environment and Future Outlook - Management noted that while the business environment is incrementally more uncertain, key projects are being prioritized, which includes the GrowthDirect system [29] - The company does not expect a material impact from tariffs on its 2025 results, thanks to proactive supply chain strategies [20][32] Other Important Information - The company expects to burn approximately $30 million in cash for the full year 2025, which is a reduction compared to the previous year [25] - The company reaffirmed its full year 2025 total revenue guidance of at least $32 million [21] Q&A Session Summary Question: How is the business environment and customer interest in GrowthDirect? - Management indicated that key projects are being prioritized, and there is confidence in the demand for GrowthDirect despite a more uncertain environment [29] Question: What is the outlook for gross margins given tariff pressures? - Management expects the exit rate for gross margins to be higher than previously guided, with no significant impact from tariffs anticipated [38] Question: How many validations are expected this year compared to last year? - The company expects to complete at least 18 validations this year, slightly up from 16 validations last year [42] Question: What is the nature of the recent capital expenditures in the U.S.? - Management noted that the capital expenditures may signify a focused effort in the U.S., which the company plans to benefit from [46] Question: How is AI integrated into the company's long-term strategy? - The company is actively working on software advancements that include AI as part of its R&D roadmap [49]