CYTEK(US:CTKB)2025-05-08 21:30Financial 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]