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]

Financial Data and Key Metrics Changes - The company reported revenue of $39.8 million for Q2 2025, representing a 7% sequential increase and a 10% year-over-year growth compared to Q2 2024 [6][23] - Non-GAAP gross margin was 38.3%, exceeding expectations due to a favorable product mix, particularly from consumables [7][26] - The company ended the quarter with approximately $315 million in cash investments, reflecting cost discipline and lower-than-expected operating expenses [7][28] Business Line Data and Key Metrics Changes - Instrument revenue was $14.2 million, down 4% year-over-year due to funding constraints affecting higher CapEx purchases [7][24] - Consumables revenue totaled $18.9 million, up 11% year-over-year, driven by strong demand and utilization [7][25] - Service and other revenue grew approximately 57% to $6.7 million, attributed to increased Revio service contract revenue and a large population sequencing program [25] Market Data and Key Metrics Changes - Revenue from the Americas decreased by 15% to $17.7 million, impacted by government funding headwinds [26] - Asia Pacific revenue increased by 53% to $12.6 million, driven by increased REVIO and VEGA placements [26] - EMEA revenue rose by 35% to $9.5 million, supported by strong REVIO placements in clinical settings [26] Company Strategy and Development Direction - The company aims to increase the adoption of its long-read sequencing platforms and drive towards positive cash flows [6] - The introduction of Spark chemistry is expected to enhance throughput and reduce costs, contributing to increased HiFi adoption [8][33] - The company is focused on expanding its clinical footprint and has made significant progress in clinical sequencing applications [18][19] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macroeconomic environment remains challenging, international growth is strong, particularly in EMEA and APAC [10][41] - The company is maintaining its full-year revenue guidance, expecting growth in consumables revenue to offset declines in instrument revenue [10][29] - Management expressed optimism about the adoption of HiFi sequencing technology in clinical workflows, despite uncertainties in the U.S. academic funding landscape [11][40] Other Important Information - The company is developing a multi-use SmartCell capability to reduce costs per genome and improve gross margins [22][34] - The company has joined the 1,000 Genomes Long Read Project, contributing to large-scale population genomics initiatives [16] Q&A Session Summary Question: Impact of macro situation on instruments and consumables - Management acknowledged that the tough macro environment impacts instrument sales, particularly among academic customers, but consumable utilization remains healthy [37][39] Question: Dynamics of Vega instrument revenue - Management indicated that many new customers are transitioning from outsourcing to insourcing, leading to a more balanced supply and demand in the market [43][45] Question: Clinical customer adoption and consumables contribution - Currently, approximately 15% of consumables revenue comes from clinical customers, with expectations for continued growth as these customers validate their assays [50][51] Question: Near-term order activity for Vega and Revio - Management noted a significant number of near-term opportunities for Vega, which could translate into orders depending on NIH funding resolution [76][80] Question: Pricing strategy in light of tariffs - The company has not adjusted pricing for tariffs and has not seen significant impacts from tariffs thus far [92][93] Question: Future growth opportunities in EMEA - Management highlighted that growth in Europe is driven by various initiatives beyond just large-scale projects, with significant opportunities in rare disease programs [97][99]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $37.2 million, slightly above preliminary estimates and consistent with internal expectations, but down from $38.8 million in Q1 2024 [7][25] - Instrument revenue decreased by 42% year-over-year to $11 million, primarily due to lower REVIO system shipments [25] - Consumable revenue reached a record $20.1 million, reflecting a 26% year-over-year growth [11][26] - Non-GAAP gross profit was $15 million with a gross margin of 40%, up from 33% in the prior year [27] - Non-GAAP net loss was $44.4 million, or $0.15 per share, compared to a loss of $71.4 million, or $0.26 per share, in Q1 2024 [30] Business Line Data and Key Metrics Changes - Instrument shipments included 12 REVIO systems and 28 VEGA systems, with cumulative shipments of 282 REVIO and 35 VEGA systems [9][25] - Academic and research institutions represented the lowest percentage of instrument shipments since the REVIO launch due to funding pressures [10] - Consumable demand from academic and research customers remained stable, indicating resilience in usage-driven spending [11] Market Data and Key Metrics Changes - Americas revenue decreased by 8% to $16.3 million, impacted by government funding headwinds [26] - Asia Pacific revenue decreased by 9% to $11.6 million, although consumables showed strong growth [26] - EMEA revenue increased by 11% to approximately $9.3 million, driven by strong REVIO placements in hospitals and clinics [27] Company Strategy and Development Direction - The company is focused on expanding HiFi sequencing adoption and enhancing the REVIO platform through the rollout of Spark chemistry [39] - A restructuring plan was executed to narrow strategic focus and reduce operating costs, aiming for a non-GAAP operating expense reduction of $45 million to $50 million by year-end [13] - The company paused development of the high-throughput short-read sequencing platform to concentrate resources on long-read sequencing technologies [16][50] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains challenging, with uncertainties around academic funding and potential NIH budget cuts impacting revenue [12] - The company adjusted its full-year 2025 revenue guidance to a range of $150 million to $170 million, reflecting a $5 million decrease at the lower end due to tariff uncertainties [12][32] - Management expressed confidence in strategic direction, citing strong customer interest in long-read sequencing and ongoing innovation [12][39] Other Important Information - The company ended Q1 2025 with $343.1 million in unrestricted cash and investments, down from $389.9 million at the end of 2024 [30] - A licensing agreement was announced with the Chinese University of Hong Kong to enhance sequencing workflows [19] - The company achieved a Net Promoter Score of over 50, indicating strong customer satisfaction [21] Q&A Session Summary Question: Can you discuss the clinical opportunity and its potential to offset concerns around academic funding? - Management highlighted significant opportunities in clinical diagnostics, particularly with the PureTarget panel, which has seen adoption by major customers [42][44] Question: What are the expectations for REVIO and VEGA placements in 2025 guidance? - Management indicated that REVIO shipments are expected to decline year-over-year, while VEGA is anticipated to grow in unit placements [48] Question: What factors influenced the decision to pause the development of the high-throughput short-read sequencer? - The decision was based on macroeconomic conditions, competitive advantages in long-read sequencing, and significant R&D progress in that area [52][54] Question: How does the company view the demand trends in EMEA? - Management expressed confidence in the EMEA market, noting strong funnel visibility and growth potential [95]