CYTEK(US:CTKB)2025-05-08 21:32Financial 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 [9][26] - Service revenue increased by 24% year-over-year, reaching $13.3 million, driven by the expansion of the instrument installed base and active usage [9][27] - 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 [28][29] - Adjusted EBITDA loss was $3.3 million for the first quarter, compared to a loss of $0.7 million in Q1 of the previous year [31] Business Line Data and Key Metrics Changes - Product revenue, which includes instruments and reagents, decreased by 18% compared to Q1 of 2024, primarily due to a weaker instrument market in the U.S. and EMEA [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] - 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][58] Market Data and Key Metrics Changes - Total revenue in the Asia Pacific and the rest of the world regions was $11.4 million, up 35.6% year-over-year, driven by strong demand in China [12][27] - 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 [27] Company Strategy and Development Direction - The company aims to solidify its position as a market leader in cell analysis solutions by expanding its product pipeline and investing in service teams [34] - The strategy includes region-for-region manufacturing to mitigate tariff impacts and enhance supply chain resilience [39][40] - The company is focused on growing its reagent business and expanding its installed base to drive recurring revenue growth [21][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning despite macroeconomic challenges, noting that over 50% of revenue comes from outside the U.S. [13][47] - The revised full-year 2025 revenue outlook is projected to be between $196 million and $210 million, reflecting a growth range of -2% to +5% compared to 2024 [32] - Management anticipates that uncertainties in funding will impact instrument sales, but service and reagent revenues are expected to continue growing [48][57] Other Important Information - The company has established manufacturing operations in the U.S., China, and Singapore to optimize product flows and enhance supply chain resilience [14] - The installed base of instruments increased by 115 units in the first quarter, bringing the total to 3,149 units [15] Q&A Session Summary Question: Impact of tariffs on gross margin - Management indicated that tariffs would have a limited impact on gross margin, estimated between 1% to 3%, and that gross margins are expected to improve as revenues increase in the following quarters [37][42] Question: Academic government end market outlook - Management acknowledged the uncertainties in university funding and indicated that these factors were included in the revised guidance, noting that over 50% of revenue is generated outside the U.S. [45][47] Question: Growth drivers for AURORA sales - Management highlighted that the growth in AURORA sales is driven by the alignment of their sorter and analyzer technologies, which are well-received by both academic and industry users [51][52] Question: R&D spending focus - Management confirmed that R&D spending remains between 15% to 20% of revenue, with a focus on imaging technologies for new product innovation [61][62] Question: Share repurchase versus M&A - Management stated that they plan to continue both share repurchases and have capital available for M&A, indicating a balanced approach to capital allocation [65]