QuantumSi(US:QSI)2025-05-15 21:30Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $842,000, representing an 84% increase compared to Q1 2024, although it was slightly below expectations [7][19] - Gross profit was $486,000 with a gross margin of 58%, influenced by low or no cost inventory utilized during the quarter [19][20] - Total operating expenses for Q1 2025 were $25.6 million, up from $23.6 million in Q1 2024, while adjusted operating expenses were $22.9 million compared to $21.9 million in the prior year [20][24] Business Line Data and Key Metrics Changes - The launch of the Platinum Pro system occurred in Q1 2025, with initial customer sales reported [6][7] - Existing US academic customers continued to purchase consumables despite a slowdown in new instrument purchases due to NIH funding uncertainties [8][19] - The company is focusing on growth opportunities in the pharma and biotech sectors, with a completed training program for Avantor, their North American distribution partner [8][10] Market Data and Key Metrics Changes - The US academic market is experiencing uncertainties related to NIH funding, which is expected to impact new instrument sales until at least fall 2025 [8][23] - Internationally, the company has 23 distribution partners and is optimistic about growth opportunities in pharma and biotech across these regions [9][10] - Approximately 60% of instrument installations are outside the US, with 20% of total business derived from the US academic market [56] Company Strategy and Development Direction - The company aims to accelerate commercial adoption, deliver on its innovation roadmap, and preserve financial strength [6][18] - The technology roadmap includes the launch of a Version 4 sequencing kit in Q3 2025 and a Version 3 library preparation kit by the end of 2025 [11][12] - The Proteus development program is on track for a prototype demonstration by the end of 2025, with a launch expected in the second half of 2026 [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term market opportunity in proteomics despite current market uncertainties [18][23] - The company is monitoring potential impacts from evolving tariffs but does not anticipate significant near-term effects on inventory acquisition costs [21][22] - Future financial guidance remains uncertain due to the NIH funding environment, but the company expects to maintain cash reserves into the second half of 2027 [24][39] Other Important Information - The company has a strong balance sheet with $232.6 million in cash and cash equivalents as of March 31, 2025 [21] - The gross margin for Q1 2025 included a 7% benefit from low or no-cost inventory, indicating variability in future margins [20][36] Q&A Session Summary Question: Concerns about biopharma spending and tariffs - Management noted that current funding levels in biotech and pharma remain stable despite discussions around tariffs and pricing policies [28] Question: Feedback on the Platinum Pro launch - The Platinum Pro system is considered locked down, with positive feedback from early adopters regarding its reliability and features [30] Question: Future gross margin and cost of goods - Historical margins are expected to remain in the 40% to 50% range, with variability based on instrument and consumable sales mix [36] Question: Cash runway and potential adjustments in spending - The company has sufficient cash to sustain operations through 2027 and plans to invest wisely while monitoring market conditions [41][45] Question: International distribution partners and tariff impacts - No significant tariff impacts have been observed, and the company has expanded its distribution network to 23 partners [46][47] Question: Market share in the NIH/academic sector - Approximately 20% of the company's business is derived from the US academic market, with significant growth potential remaining [56] Question: Avantor relationship and early progress - Training for Avantor's team is complete, and early activity levels are promising, with ongoing support from the company [62]