NASDAQ:CTKB Cytek Biosciences Q1 2025 Earnings Report $2.42 -0.03 (-1.22%) Closing price 04:00 PM EasternExtended Trading$2.42 0.00 (-0.21%) As of 07:19 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Cytek Biosciences EPS ResultsActual EPS-$0.09Consensus EPS -$0.04Beat/MissMissed by -$0.05One Year Ago EPSN/ACytek Biosciences Revenue ResultsActual Revenue$41.46 millionExpected Revenue$43.18 millionBeat/MissMissed by -$1.73 millionYoY Revenue GrowthN/ACytek Biosciences Announcement DetailsQuarterQ1 2025Date5/8/2025TimeAfter Market ClosesConference Call DateThursday, May 8, 2025Conference Call Time4:30PM ETUpcoming EarningsCytek Biosciences' Q2 2025 earnings is scheduled for Tuesday, August 5, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Cytek Biosciences Q1 2025 Earnings Call TranscriptProvided by QuartrMay 8, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Thank you for standing by. At this time, I would like to welcome everyone to the Cytec Biosciences First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Paul Goodson, Head of Investor Relations. Operator00:00:35Please go ahead, sir. Paul GoodsonHead of IR at Cytek Biosciences00:00:38Thank you, operator. Earlier today, Cytec Biosciences released financial results for the first quarter ended 03/31/2025. If you haven't received this news release, or if you'd like to be added to the company's distribution list, please send an email to investorscytechbio dot com. A copy of the news release is also available on the Investor Relations section of Cytech's website at investors.cytechbio.com. Joining me today from Cytech are Wenbin Zhang, CEO and Bill McComb, CFO. Paul GoodsonHead of IR at Cytek Biosciences00:01:13Please note that we will be referencing a slide presentation during the call today that has been posted to the Investors section of our corporate website. As a reminder, we will make statements during the call that are forward looking statements within the meaning of the federal securities laws, including statements regarding SITEC's business plans, strategies, opportunities, and financial projections. These statements are based on the company's current expectations and inherently involve significant risks and uncertainties that could cause actual results or events to materially differ from those anticipated in these statements. Additional information regarding these risks and uncertainties appears in our slide presentation in the section entitled Forward Looking Statements in the press release Citech issued today and in Citech's filings with the SEC. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Paul GoodsonHead of IR at Cytek Biosciences00:02:15Additional information regarding our use of non GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, may be found in our slide presentation and in today's press release. While the company believes these non GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Except as required by law, SciTech disclaims any duty to update any forward looking statements whether because of new information, future events, or changes in its expectations. This conference call contains sensitive information and is accurate only as of the live broadcast 05/08/2025. Finally, would like to invite analysts and institutional investors to attend any of the six user group meetings SITECH will be hosting in 2025. Paul GoodsonHead of IR at Cytek Biosciences00:03:16These are typically all day meetings where SciTech scientists and users of SciTech's instruments meet to discuss research initiatives, advances in the field, and use cases for SciTech's products. The next meeting will be in La Jolla on May 15 at the Estancia Hotel. In addition to Citex user group meetings this year, there will be a variety of industry and academic conferences, meetings and seminars where we will be exhibiting Citex products in The U. S. And around the world. Paul GoodsonHead of IR at Cytek Biosciences00:03:51While these events are primarily geared to the scientific community, they may offer an opportunity to interact with users of our technologies to learn why Citex instruments are so highly valued by our customers. We have a limited number of spaces to accommodate members of the financial community, so if you are interested in attending any of these events, please contact me. With that, I would like to turn the call over to Wenbin. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:04:18Thanks, Paul. Welcome, everyone, and thank you for your interest in SciTech. On today's call, I will discuss our performance during the first quarter, including factors impacting our business, provide an update on our 2025 outlook, and share details on how we are navigating this dynamic macro environment. Next, I will provide highlights on how our progress in the quarter across our strategic priorities for 2025 before handing the call over to Bill for a more detailed look at our financials and our 2025 outlook. Starting with our first quarter revenue on Slide three. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:05:06First quarter revenue in 2025 was $41,500,000 down 7.6% compared to the first quarter of twenty twenty four. The year over year decline was driven mainly by weakness in instrument sales in The U. S. And EMEA, partially offset by strength in insulin sales in APAC and the rest of the world regions. Service revenue worldwide reached $13,300,000 an increase of 24% versus a year ago. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:05:41The growth in service revenue continued its strong performance and was driven by the expansion of our instrument installed base and active usage of our tools across a broad range of disciplines. Turning to Slide four. Diving into the underlying factors towards the last month of the first quarter, we again see a broad based slowdown in instrument orders across our U. S. And EMEA regions. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:06:14Among the academic and the government customers in The U. S, instrument placements declined, driven by uncertainties with academic funding from U. S. Policy change. In EMEA, pressure due to government funding priorities affected purchasing trends. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:06:33Sales across our biotech pharma and the CRO customers declined due to some orders being postponed to the second quarter and the customer buying decisions being influenced by the uncertainties across the industry due to The US policy environment. Geographically, we continued to benefit from a stronger demand environment for instruments in APAC and in the rest of the world region, which include Canada and Latin America. Total revenue in APAC and the rest of the world region together was $11,400,000 up 35.6% year over year. While we are viewing future sales in China with a level of conservatism, we continue to experience an increase in orders in the first quarter related to the China stimulus program. Due to the recent change in the market environment as a result of these macroeconomic and policy related factors, We now anticipate full year 2025 revenue to be in the range of $196,000,000 to $210,000,000 We continue to expect constraints on capital equipment spending in The U. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:07:51S. And EMEA due to these conditions. Bill will provide more details on this outlook shortly. While we'll continue to operate in a dynamic market environment, the durable foundation we have built enables us to be agile and to drive faster forward through uncertain times. Importantly, we remain confident in our positioning. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:08:18We are serving a large and growing cell analysis market with our industry leading cell analysis portfolio. Global diversification and the critical first mover advantage we have in FFP technology. More than 50% of our product sales are outside of The US. To support our customers worldwide, we have established manufacturing operations in three countries, The US, China, and Singapore. This manufacturing footprint enables region for region manufacturing and allows us to optimize product flows for any global health environment. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:09:00We further believe that having multiple manufacturing locations enhances the resilience of our supply chain, thereby ensuring more reliable and cost effective product availability for our customers. Our current manufacturing capacity for instruments and reagents can more than adequately support our customers for the foreseeable future without additional capital investment in production facilities. I would now like to update you on the progress our team has made across our core strategic pillars, instruments, applications, bioinformatics, and clinical, to solidify Cytec's position as a market leader in next year cell analysis solutions. Starting with our core instruments on slide five. In the first quarter, we expanded our global footprint by 115 instruments, bringing SiTex total installed base to 3,149 units. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:10:07In the first quarter, we also announced the launch of the SiPET MUSE microsystem. The MUSE microcell analyzer is an affordable option that simplifies flow cytometry while enhancing ease of use, precision, and versatility. This latest instrument expands assay capabilities to drive adoption in new emerging markets, such as cell and gene therapy and drug discovery by enabling smaller labs and resource limited facilities to access high quality flow cytometry at a cost effective price. While revenues were down in this Q1 twenty twenty four in both the academic and government, and the biopharma market segments, We believe this was largely due to market weakness rather than market share loss. Our competitive position as a leader in the FFP market segment remains strong. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:11:07We have established a significant commercial footprint and the brand identity in The US and EMEA, and are expanding our market leadership in APAC and in the rest of the world regions. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:11:22The larger installed base of high parameter analyzer instruments we have built over time provides a durable foundation for driving recurring revenue growth in our service and the Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:11:33regions businesses. To expand our addressable market and accelerate growth, we have made strategic investments to advance our product pipeline with newer generations of products, such as our cell products and entry level to mid level instruments, including our Northern Light line and Muse Micro System. The resilience of our product portfolio amidst a challenging macroeconomic backdrop is demonstrated by the 15% trading strong growth in our sales order unit placements and 17% TTM growth in modernized units installed. Within our portfolio, Aurora cell solder revenue grew 15% year over year, and Northern Lights revenue increased 6% year over year in the first quarter. Northern Lights' research unit only sales grew 8% year over year. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:12:30Notably, both Aurora cell solder and Northern Light's instrument sales have continued the growth trend that we saw in the fourth quarter of twenty twenty four. Collectively, these instrument placements represent growth across a diverse customer base, offering comprehensive and better solutions tailored to meet their needs. Moving to bioinformatics on slide six. I am pleased to report that the Cytec cloud continues to grow as a vital resource in the research community. Our main goal is to enable our customers to streamline their experiment workflow through our software tools, which drive adoption and utilization of our cell analysis solutions and the growth in our region and service businesses. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:13:19We now have over 18,000 users, which grew by 2,000 users in the first quarter alone. This represents an average of about six users per installed SiCase FFP instrument, which validates the loyalty our users have to our product portfolio and demonstrates the halo effect of our platform. The increase in site to cloud users reflects growth in the usage of our products and is directionally correlated with long term recurring revenue growth drivers from our regions and the service businesses. Turning to our next growth pillar, applications. While we are in the early innings with our reagents business, we continue to believe that it has strong growth potential. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:14:09We plan to drive growth by accelerating our new reagent product introduction engine, which will expand our reagent offering and application specific kits. The share of reagents we supply as a percentage of total reagent volumes used on our instruments is still at the onset of its growth trajectory. We believe there is a significant growth potential ahead as we continue serving our expanding installed base, improving our execution and the delivery time to customers, leveraging the Spicek Cloud as a revision sales platform, and introducing new revision products and applications. Notably, I believe we have reached an inflection point with recurring revenue, including reagent and service revenue combined, leveraging our established and expanding installed base. In the first quarter, we were pleased to see our reagent sales positively contribute to our recurring revenue wave as a percentage of our total revenue. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:15:16Specifically, our trailing twelve month recurring revenue is steadily growing, representing 31% of our total revenue in the first quarter, up from 26% a year ago. Further, our trailing twelve month recurring revenue grew 17% in the first quarter compared to the prior year. Longer term, we expect our recurring service and the reagents revenue to be stronger growth drivers for SciTech. Turning next to clinical. We continue to believe the clinical market represents an attractive business opportunity for SciTech, and we have seen considerable growth in The EU and APAC for clinical applications. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:16:01In The EU, 1 academic hospital fully validated our minimal residual disease, or MRD panel for leukemia and lymphoma and will begin implementing it in their routine clinical testing this quarter. As a key opinion leader, this institution has also supported our outreach to other clinical sites in The Netherlands, Australia and Brazil. Overall, I'm encouraged by our results despite challenging macro headwinds in The U. S. And EMEA. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:16:36We have areas of strength in high growth regions, including in Asia Pacific and the strength in our sales order and Northern Light instruments. The larger installed base we have built worldwide provides the basis for long term growth in our recurring services and the region businesses, and offers the opportunity to scale our instrument offerings. I believe that we are well positioned to emerge from this period even stronger than we are today. Leveraging our industry leading cell analysis portfolio and strong business fundamentals. With that, I will now turn the call over to Bill for more details about our financials. William McCombeChief Financial Officer at Cytek Biosciences00:17:20Thanks, Wenden. Turning to Slide seven and our first quarter financial results. Total revenue for the first quarter of twenty twenty five was $41,500,000 a 7.6% decrease compared to the first quarter of twenty twenty four. Product revenue, which is instruments and reagents, decreased 18% versus Q1 of twenty twenty four. This decrease was driven by a weaker instrument market in The US and EMEA. William McCombeChief Financial Officer at Cytek Biosciences00:17:50As Wenbin described earlier, this was primarily due to academic funding uncertainties in The US, pressure on government budgets in EMEA causing delays in academic and research funding, and a cautious capital spending environment in the biotech and pharma industries. Service revenue was a bright spot growing 24% versus Q1 of twenty twenty four. Growth in service revenue reflects continued expansion of our installed base of instruments and active usage of our systems. Turning to our geographic market performance, total US and EMEA revenue declined 1324%, respectively, driven by lower instrument sales for the reasons I mentioned. On the other hand, Asia Pacific grew very strongly, up 40%, driven by particularly strong growth in China. William McCombeChief Financial Officer at Cytek Biosciences00:18:42Other international markets, primarily Canada and Latin America, also grew strongly off a small base. We believe this growth reflects the strength of SciTech's brand and customer preference for our technology globally. GAAP gross profit was $20,200,000 for the first quarter of twenty twenty five, a decrease of 12% compared to gross profit of $23,000,000 in the first quarter of twenty twenty four. GAAP gross margin was 49% in the first quarter compared to 51% in the prior year. Non GAAP adjusted gross margin in the first quarter was 52% compared to 55% in the prior year quarter. William McCombeChief Financial Officer at Cytek Biosciences00:19:25The decline in GAAP and adjusted gross margin was primarily due to lower product revenues and higher manufacturing overhead. This was offset by higher service gross margin compared to a year ago. We expect quarterly gross margin to improve for the balance of the year as quarterly revenue increases consistent with typical seasonal patterns. Operating expenses were $35,100,000 for the first quarter, an increase of $1,400,000 from the prior year. Research and development expenses were $9,700,000 for the first quarter, zero point '1 million dollars from the first quarter of twenty twenty four. William McCombeChief Financial Officer at Cytek Biosciences00:20:05Sales and marketing expenses were $12,500,000 for the first quarter, flat versus the first quarter of twenty twenty four. General and administrative expenses were $12,900,000 for the first quarter, up $1,500,000 from the first quarter of twenty twenty four due to higher outside services and headcount expense. Loss from operations was $15,000,000 for the first quarter compared to the 10,700,000.0 operations in the prior year quarter. GAAP net loss was $11,400,000 in the first quarter compared to GAAP net loss of $6,200,000 in the prior year quarter. This was primarily due to a larger loss from operations of $15,000,000 in the current quarter versus $10,700,000 a year ago and a tax expense of $100,000 versus a tax benefit of $2,800,000 a year ago, offset by higher other income due to 1,300,000 foreign exchange gain in the current quarter compared to a $1,100,000 FX loss in the prior year quarter. William McCombeChief Financial Officer at Cytek Biosciences00:21:12Adjusted EBITDA, which excludes stock based compensation and foreign currency impacts decreased to a loss of $3,300,000 for the first quarter due to lower gross profit compared to a loss of 700,000.0 in Q1 of last year. Adjusted EBITDA included investment income of 2,300,000.0. Excluding this amount, adjusted EBITDA loss was 5,500,000.0 in Q1 compared to a loss of $2,600,000 in Q1 of last year. We expect adjusted EBITDA to improve on a quarterly basis as revenues and gross margins increase consistent with typical seasonal patterns. Total cash and marketable securities decreased $12,300,000 versus Q4 to $265,600,000 as of 03/31/2025. William McCombeChief Financial Officer at Cytek Biosciences00:22:05The decline was primarily driven by our investment of $10,600,000 to repurchase shares during Q1. Lastly, turning to our full year guidance on Page eight. As Wenzhen described earlier, due to the significant change in our market environment since our last earnings call in late February, we are revising our full year 2025 revenue outlook to a range of $196,000,000 to $210,000,000 representing overall growth of minus 2% to plus 5% over full year 2024, assuming no change in currency exchange rates. Consistent with our typical seasonal pattern and especially given the current uncertainties in the market and geopolitical environment, we expect this growth to be back end loaded to the second half of twenty twenty five. As Wenbin further noted, our market leadership position remains strong, and we believe we will perform well relative to the overall flow cytometry market. William McCombeChief Financial Officer at Cytek Biosciences00:23:06Our strong balance sheet also gives us the ability to continue investing for growth. With that, I'll turn it back over to Wenbin. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:23:15Thanks, Bill. Turning to slide nine. I want to take a moment to thank our team at SITEK for their dedication to our mission and the overall resilience amidst a very difficult market backdrop. It is this shared belief that positions us well as we strengthen our foundation for the future. We are serving a large and growing cell analysis market as a market leader. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:23:44We continue to make thoughtful investments in our product pipeline and our service teams to drive growth and innovation and to strengthen our competitive position. Our strong balance sheet underpins our foundation, which provides us with options and further flexibility in the future. We have a clear roadmap to expand our market leadership position in cell analysis. These powerful attributes provide us with confidence in our long term objective of delivering sustainable growth and profitability. I want to thank everyone for joining today's call, and we will now open it up for questions. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:24:27Operator? Operator00:24:31Thank you. We will now begin the question and answer session. Your first question comes from the line of Savant with Morgan Stanley. Your line is open. Jason LaiAnalyst at Morgan Stanley00:25:03Hi. This is Jason on for Tejas. Thank you for taking our questions. Tariffs, they've been a key focus for investors. So I sound manageable for SciTech, but I just want to confirm, should we expect any gross margin impact because of the recent tariff policy? Jason LaiAnalyst at Morgan Stanley00:25:19Apologies if I misheard. I believe you said like Cytec could potentially use some of your current available inventory to provide a buffer, but obviously that is just temporary. So I was wondering if you could quantify like a gross margin impact from the current situations of the tariff policy. And then you talked about some supply chain mitigants. I don't believe I heard you talk really about pricing. Jason LaiAnalyst at Morgan Stanley00:25:41So is pricing something Sci Tech could turn to also as a mitigant to the tariffs? And I guess the third part would be there's currently 125% tariffs from China and U. S. Exports. So obviously it's very hard to sell any products there. Jason LaiAnalyst at Morgan Stanley00:25:58I'm wondering like how much of the 2025 revenue guidance cut could be because of this dynamic, like the inability to sell your products in China? Thank you. William McCombeChief Financial Officer at Cytek Biosciences00:26:09Okay, let me try to William McCombeChief Financial Officer at Cytek Biosciences00:26:12take William McCombeChief Financial Officer at Cytek Biosciences00:26:13those in order. William McCombeChief Financial Officer at Cytek Biosciences00:26:16So William McCombeChief Financial Officer at Cytek Biosciences00:26:16it's important to understand that we have established manufacturing facilities that are all producing and shipping product in three regions, The US, Singapore, which is our new facility and Wuxi, China. And so our primary strategy for managing tariffs is what we call region for region manufacturing. So we make product in for sale in a particular region in the region that would be least impacted by tariffs. So making product for Asia and Europe in Asia and US product for sale in The US. Obviously, we can't do that 100%, but we are able to mitigate a substantial portion of the potential tariff liability that way. William McCombeChief Financial Officer at Cytek Biosciences00:27:22The other thing that we can do is reorganize where we source components from. And then thirdly, we are recovering some costs from customers through surcharges. And so those are the strategies for dealing with the tariffs. We don't think that that will have any significant impact on our revenues in 2025. When I say that I'm obviously putting to one side the uncertainties created by the economic and market environment that we're in. William McCombeChief Financial Officer at Cytek Biosciences00:28:10But in terms of tariffs specifically, we don't think that will have an impact. In terms of gross margin, the impact I think is will be fairly limited and in the range of 1% to 3%. And in that regard, we would expect, as I mentioned in my remarks, that gross margin will improve over the ensuing quarters because we expect that revenues will follow typical seasonal pattern where they'll be stronger in Q2, Q3 and Q4. And with higher revenues, we will see a benefit at the gross margin line. Did I cover all your questions? Jason LaiAnalyst at Morgan Stanley00:29:05Yes, most of it. And then the third part, just about the 125% tariff from China and U. S. Exports. Are you still able to sell your products in China? Jason LaiAnalyst at Morgan Stanley00:29:13Thank you. William McCombeChief Financial Officer at Cytek Biosciences00:29:15We are able to sell products in China, absolutely. But that's the way that we deal with that tariff is through our region for region manufacturing. So obviously products sold in China don't incur a tariff if they're manufacturing in China or if they're manufacturing in Singapore. Jason LaiAnalyst at Morgan Stanley00:29:36Great, thank you for the color on that. And then if I may ask just a follow-up. So the academic government end market, seems like the policy situation just might have gotten worse since you last guided in 4Q. So we're seeing significant disruption in government funding at universities with some of the country's largest research budgets. There was also like a proposed 40% cut in the proposed 2026 budget to the NIH. Jason LaiAnalyst at Morgan Stanley00:30:00So I'm just wondering like how are you thinking about like these potential risks to your 2025 guide? And what was your overall outlook for this end market? Do you think maybe like minus mid single digit decline could be reasonable? Thank you. William McCombeChief Financial Officer at Cytek Biosciences00:30:18Look, the uncertainties associated with with university funding in The US are factored into our revised guidance. That's one of the new issues that caused us to come out with this revised guidance. So the short answer to your question is it's factored into what we've told you about revenue expectations. I would make a couple of points though. One is that more than 50% of our revenue is outside The United States. William McCombeChief Financial Officer at Cytek Biosciences00:30:57So obviously that revenue isn't affected by US university funding. And then thirdly, most importantly is we think about our revenue in three buckets. Service, which is growing strongly, reagents, which also saw some nice growth in Q1, particularly in US and EMEA. And then the instrument portion of our revenue is the one that's most impacted by issues like the one that you mentioned. But the other two revenue sources or revenue streams are not particularly affected by US university funding issues. William McCombeChief Financial Officer at Cytek Biosciences00:31:52All that said, we are continuing to sell instruments to US universities here in the second quarter. Operator00:32:08Your next question comes from the line of Matt Skyes with Goldman Sachs. Your line is open. Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:32:15Hi, this is Evie on for Matt. Thanks for taking my questions. So the first one on the AURORA sales order, what drove the double digit growth there? And are there any specific end markets you would call out that may be differentiated versus your other instruments? Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:32:31Well, I think we are seeing nice growth across all territories for our cell sorters. Part of the reason is clearly, see the benefit of SiTeX sorter matches very well with our analyzer now already widely being adopted by both academic and the industry users. And this matching of the panels between Cytec Soda and Cytec Analyzer clearly demonstrated the benefits for our users, makes it very easy for them. So that's one reason. Second part is clearly the performance of our sales orders and has been very well demonstrated. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:33:14And many of our users can easily go with our soldiers directly and go beyond the four d color panels. And so this is something they would like to see. And so even under today's we know the tight budget situations, they see the benefits, and they are jumping to SiTech technology. Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:33:38Okay, great. Thank you. And then another one on phasing. You noted that you expected growth would be back half loaded this year. What's driving this assumption? Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:33:47And is there any specific end market you expect to improve as we move throughout the year? William McCombeChief Financial Officer at Cytek Biosciences00:33:52There's two factors. One is that typically our second half of the year represents more than 50% of total sales. So it's generally usually somewhere in the mid-50s. So that's point one. And that's just a function of the buying patterns of our customers. William McCombeChief Financial Officer at Cytek Biosciences00:34:19They William McCombeChief Financial Officer at Cytek Biosciences00:34:19tend to buy more, particularly in the fourth quarter than in the first quarter. First quarter tends to be a light quarter, fourth quarter significantly more active. We don't obviously, there are some new uncertainties in the market environment. We can't predict the future with respect to overall economic growth and the broader market. But beyond that, we don't see anything that would suggest that there's going to be a fundamental shift or difference in that normal quarterly pattern. William McCombeChief Financial Officer at Cytek Biosciences00:35:03So that's point one. And then point two is that the impact that we've seen on the first quarter has been clearly there's been some signaling of direct reductions in funding. But to a large part it's been the driver of reduced spending has been uncertainty about what the future may hold. Not unreasonable to expect that as we get further into the year that our customers' individual funding situations will be clearer and that some of that uncertainty might lessen. And so I think that's also an overlay of how we think about it. William McCombeChief Financial Officer at Cytek Biosciences00:36:02But I also want to come back to this point that our revenue outlook is a function of, is formulated based on three different revenue streams. Service, where we think that the installed base and the usage and activity of our systems is going to drive continued growth. Reagents where we've been seeing nice solid growth trends. So those revenue streams should continue to see steady growth. And then the seasonal variation and the lessening uncertainty is primarily going to affect the instrument portion of our business. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:36:52Yeah, the recurring revenue from service and regimes have now already exceeded 30% of William McCombeChief Financial Officer at Cytek Biosciences00:37:00from 26% a year ago to 31%. That recurring portion is growing at 17%. So that should continue to grow at similar rates. The service revenue growth rate just as the installed base increases, that's going to moderate slightly. But that's something that's an effect that will take some years to. Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:37:30Great. Thank you. Operator00:37:34Your next question comes from the line of David Westenberg with Piper Sandler. Your line is open. John BarnidgeManaging Director & Senior Research Analyst at Piper Sandler Companies00:37:43Hi. This is John on for Dave. Thanks for taking the questions. So could you just comment on whether or not you're seeing any of your competitors raising prices due to tariffs? And also, could you give any color on your R and D spending? John BarnidgeManaging Director & Senior Research Analyst at Piper Sandler Companies00:37:58Are you looking more into imaging or spectral for new product innovation? Thank you. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:38:07On the pricing side, things still are in the early stage, right? And I think we do see a report talking about passing around some of the tariff cost over to the customers. So but we still wait to see how it's going to impact the overall market situation. With regarding to R and D, we continue to spend between 15% to 20% of our revenue to R and D and to drive new products. Imaging clearly is one of the directions of the company, which we are working on within the R and D department. John BarnidgeManaging Director & Senior Research Analyst at Piper Sandler Companies00:38:49Okay, thank you. Operator00:38:53Your next question comes from the line of Chad Yakrowski with TD Cowen. Your line is open. Chad WiatrowskiVP - Equity Research at TD Cowen00:39:01Hey, guys. This is Chad White House on for Brendan Smith. Just on the share repurchases this quarter, obviously, the balance sheet is still healthy. How do you sort of reconcile doing share purchases versus like M and A or organic investment? And what sort of the plan throughout the remainder of the year? William McCombeChief Financial Officer at Cytek Biosciences00:39:26We plan to do both share repurchase and have capital available for M and A. So we think we have plenty of cash available to do both. With respect to specific share repurchase plans, I can't say much more than authorization. Late last year we purchased $10,500,000 worth of shares in the first quarter, approximately 2,100,000.0 That's basically all I can say for the time being. In terms of capital allocation priorities, our plan is to have capital available to do both. Operator00:40:37Your next question comes from the line of Andrew Cooper with Raymond James. Your line is open. Noah LewisEquity Research Associate at Raymond James00:40:45Hey, everyone. This This is Noah on for Andrew. First question, just wanted to get a feel for what are customers saying about the SciTech News? Are you seeing a lot of interest? I just want to get an idea of what you're seeing in that new product launch. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:41:03Yeah, CytoMuse being a new product line and is to support gene and cell therapy line. And this is a new product currently still in the sampling evaluation stage, but we do have some early products based on the technology acquired from Luminex. And that's the part has been selling very well. And normally they match certain needs, for example, like cell counting and dead cell, that kind of testing. But MicroMuse, the one we're going to launch, will add new features, new functionalities to support new application and enable us entering into a new market in the meantime to help drive our reagent revenue as well. Noah LewisEquity Research Associate at Raymond James00:41:59Awesome. And then maybe if I can just get one more. You mentioned pharma biotech and I think the CRO market postponing orders. Just kind of want to get an idea of what you're seeing now that we're about a week into May. Is there a little bit more optimism? Noah LewisEquity Research Associate at Raymond James00:42:15Is it still just about the same as April? And then also, how does that compare to what you're hearing from your academic and government customers as it relates to funding? William McCombeChief Financial Officer at Cytek Biosciences00:42:25Look, William McCombeChief Financial Officer at Cytek Biosciences00:42:27incorporated everything that we're seeing into our quarterly guide sorry, into our annual guidance. So I also mentioned that we expect to see a typical seasonal pattern between the quarters. So there's nothing that we've seen so far in May that would be at odds with that. But we typically comment on month by month or give quarterly guides. Just suffice it to say that typically our Q2 is stronger than our Q1. William McCombeChief Financial Officer at Cytek Biosciences00:43:14I think as we've mentioned in the past, we're primarily a third month company. The significant majority of our sales for each quarter happens in the third month of the quarter. So obviously, we haven't seen June yet. So the evidence around second quarter so far is limited, but it's consistent with the supports the views that we've expressed here. Pharma customers versus academic and research, I think you'll see from our 10 Q that revenue from those two sectors was down by a similar amount. William McCombeChief Financial Officer at Cytek Biosciences00:44:01We saw cautious spending environment from the pharma industry. There are some macro reasons for that related tariffs and drug pricing concerns and so on. But generally speaking, we haven't seen much different other than just a more cautious tone around capital spending. But our systems, big pharma still has a strong preference for our systems because they're uniquely capable of being harmonized and that's very important to them. We continue to see multiple system orders from Big Pharma for that reason. Operator00:45:10And seeing no further questions at this time, that does conclude today's conference call. Thank you all for joining, and you may now disconnect.Read moreParticipantsExecutivesPaul GoodsonHead of IRWenbin JiangPresident, CEO & Chairman of the BoardWilliam McCombeChief Financial OfficerAnalystsJason LaiAnalyst at Morgan StanleyElizabeth KosloskyGlobal Investment Research Associate at Goldman SachsJohn BarnidgeManaging Director & Senior Research Analyst at Piper Sandler CompaniesChad WiatrowskiVP - Equity Research at TD CowenNoah LewisEquity Research Associate at Raymond JamesPowered by Key Takeaways First quarter revenue was $41.5 million, down 7.6% year-over-year as weakness in U.S. and EMEA instrument sales was partially offset by a 24% increase in service revenue and strength in APAC and other international regions. Full-year 2025 revenue guidance was revised to $196 million–$210 million (–2% to +5% growth) and is expected to be back-end loaded due to ongoing spending constraints in the U.S. and EMEA driven by academic funding uncertainties and government budget pressures. Recurring revenue (service plus reagents) now represents 31% of total revenue and grew 17% on a trailing-12-month basis, highlighting the durability of expanded instrument installed base and rising reagent adoption. The installed base reached 3,149 instruments after adding 115 units in Q1, and the launch of the MUSE microsystem targets emerging markets like cell and gene therapy with an affordable flow cytometry solution. A global manufacturing footprint in the U.S., China and Singapore enables region-for-region production to mitigate tariff exposure, capping gross margin impact at 1–3%, while a strong balance sheet supported $10.6 million in share repurchases and retains capacity for M&A and R&D investments. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallCytek Biosciences Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Cytek Biosciences Earnings HeadlinesThe Goldman Sachs Group Cuts Cytek Biosciences (NASDAQ:CTKB) Price Target to $3.00May 15, 2025 | americanbankingnews.comCytek Biosciences, Inc. (CTKB) Q1 2025 Earnings Call TranscriptMay 11, 2025 | seekingalpha.comThink NVDA’s run was epic? You ain’t seen nothin’ yetAsk most investors and they’ll probably tell you Nvidia is the undisputed AI stock of the decade. In 2023, it surged 239%. And in 2024, it soared another 171% on the year… But what if I told you there was a way to target those types of “peak Nvidia” profit opportunities in 24 hours or less?May 23, 2025 | Timothy Sykes (Ad)Cytek Biosciences: Earnings Call Reveals Mixed FortunesMay 9, 2025 | tipranks.comCytek Biosciences Reports Q1 2025 Financial ResultsMay 9, 2025 | tipranks.comCytek Biosciences Reports First Quarter 2025 Financial ResultsMay 8, 2025 | globenewswire.comSee More Cytek Biosciences Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Cytek Biosciences? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Cytek Biosciences and other key companies, straight to your email. Email Address About Cytek BiosciencesCytek Biosciences (NASDAQ:CTKB), a cell analysis solutions company, provides cell analysis tools that facilitates scientific advances in biomedical research and clinical applications. It offers aurora and northern lights systems, which are spectrum flow cytometers that delivers cell analysis by utilizing the fluorescence signatures from multiple lasers to distinguish fluorescent tags on single cells; and aurora cell sorter system that leverages full spectrum profiling technology to further broaden potential applications across cell analysis; aurora CS systems; amnis imagestream imaging flow cytometers; guava muse cell analyzers; guava easycyte flow cytometers; and orion reagent cocktail preparation systems. The company also provides reagents and kits, including cFluor reagents that are fluorochrome conjugated antibodies used to identify cells of interest for analysis on its instruments, as well as 25-color immunoprofiling assay that provides turnkey solutions for identifying major human immune subpopulations for TBNK cells, monocytes, dendritic cells, and basophils. In addition, it offers automated micro-sampling system and automated sample loader system, an automated loaders to integrate seamlessly into the aurora and northern lights systems; SpectroFlo software that provides intuitive workflow from quality control to data analysis for aurora and northern lights systems; and customer support tools. The company serves pharmaceutical and biopharma companies, academic research centers, and clinical research organizations. It distributes its products through direct sales force and support organizations in North America, Europe, China, and the Asia-Pacific regions; and through distributors or sales agents in European, Latin American, and the Middle Eastern countries. The company was formerly known as Cytoville, Inc. and changed its name to Cytek Biosciences, Inc. in August 2015. Cytek Biosciences, Inc. was founded in 1992 and is headquartered in Fremont, California.View Cytek Biosciences ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Advance Auto Parts Jumps on Surprise Earnings BeatAlibaba's Earnings Just Changed Everything for the StockCisco Stock Eyes New Highs in 2025 on AI, Earnings, UpgradesSymbotic Gets Big Earnings Lift: Is the Stock Investable Again?D-Wave Pushes Back on Short Seller Case With Strong EarningsAppLovin Surges on Earnings: What's Next for This Tech Standout?Can Shopify Stock Make a Comeback After an Earnings Sell-Off? 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PresentationSkip to Participants Operator00:00:00Thank you for standing by. At this time, I would like to welcome everyone to the Cytec Biosciences First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Paul Goodson, Head of Investor Relations. Operator00:00:35Please go ahead, sir. Paul GoodsonHead of IR at Cytek Biosciences00:00:38Thank you, operator. Earlier today, Cytec Biosciences released financial results for the first quarter ended 03/31/2025. If you haven't received this news release, or if you'd like to be added to the company's distribution list, please send an email to investorscytechbio dot com. A copy of the news release is also available on the Investor Relations section of Cytech's website at investors.cytechbio.com. Joining me today from Cytech are Wenbin Zhang, CEO and Bill McComb, CFO. Paul GoodsonHead of IR at Cytek Biosciences00:01:13Please note that we will be referencing a slide presentation during the call today that has been posted to the Investors section of our corporate website. As a reminder, we will make statements during the call that are forward looking statements within the meaning of the federal securities laws, including statements regarding SITEC's business plans, strategies, opportunities, and financial projections. These statements are based on the company's current expectations and inherently involve significant risks and uncertainties that could cause actual results or events to materially differ from those anticipated in these statements. Additional information regarding these risks and uncertainties appears in our slide presentation in the section entitled Forward Looking Statements in the press release Citech issued today and in Citech's filings with the SEC. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Paul GoodsonHead of IR at Cytek Biosciences00:02:15Additional information regarding our use of non GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, may be found in our slide presentation and in today's press release. While the company believes these non GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Except as required by law, SciTech disclaims any duty to update any forward looking statements whether because of new information, future events, or changes in its expectations. This conference call contains sensitive information and is accurate only as of the live broadcast 05/08/2025. Finally, would like to invite analysts and institutional investors to attend any of the six user group meetings SITECH will be hosting in 2025. Paul GoodsonHead of IR at Cytek Biosciences00:03:16These are typically all day meetings where SciTech scientists and users of SciTech's instruments meet to discuss research initiatives, advances in the field, and use cases for SciTech's products. The next meeting will be in La Jolla on May 15 at the Estancia Hotel. In addition to Citex user group meetings this year, there will be a variety of industry and academic conferences, meetings and seminars where we will be exhibiting Citex products in The U. S. And around the world. Paul GoodsonHead of IR at Cytek Biosciences00:03:51While these events are primarily geared to the scientific community, they may offer an opportunity to interact with users of our technologies to learn why Citex instruments are so highly valued by our customers. We have a limited number of spaces to accommodate members of the financial community, so if you are interested in attending any of these events, please contact me. With that, I would like to turn the call over to Wenbin. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:04:18Thanks, Paul. Welcome, everyone, and thank you for your interest in SciTech. On today's call, I will discuss our performance during the first quarter, including factors impacting our business, provide an update on our 2025 outlook, and share details on how we are navigating this dynamic macro environment. Next, I will provide highlights on how our progress in the quarter across our strategic priorities for 2025 before handing the call over to Bill for a more detailed look at our financials and our 2025 outlook. Starting with our first quarter revenue on Slide three. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:05:06First quarter revenue in 2025 was $41,500,000 down 7.6% compared to the first quarter of twenty twenty four. The year over year decline was driven mainly by weakness in instrument sales in The U. S. And EMEA, partially offset by strength in insulin sales in APAC and the rest of the world regions. Service revenue worldwide reached $13,300,000 an increase of 24% versus a year ago. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:05:41The growth in service revenue continued its strong performance and was driven by the expansion of our instrument installed base and active usage of our tools across a broad range of disciplines. Turning to Slide four. Diving into the underlying factors towards the last month of the first quarter, we again see a broad based slowdown in instrument orders across our U. S. And EMEA regions. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:06:14Among the academic and the government customers in The U. S, instrument placements declined, driven by uncertainties with academic funding from U. S. Policy change. In EMEA, pressure due to government funding priorities affected purchasing trends. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:06:33Sales across our biotech pharma and the CRO customers declined due to some orders being postponed to the second quarter and the customer buying decisions being influenced by the uncertainties across the industry due to The US policy environment. Geographically, we continued to benefit from a stronger demand environment for instruments in APAC and in the rest of the world region, which include Canada and Latin America. Total revenue in APAC and the rest of the world region together was $11,400,000 up 35.6% year over year. While we are viewing future sales in China with a level of conservatism, we continue to experience an increase in orders in the first quarter related to the China stimulus program. Due to the recent change in the market environment as a result of these macroeconomic and policy related factors, We now anticipate full year 2025 revenue to be in the range of $196,000,000 to $210,000,000 We continue to expect constraints on capital equipment spending in The U. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:07:51S. And EMEA due to these conditions. Bill will provide more details on this outlook shortly. While we'll continue to operate in a dynamic market environment, the durable foundation we have built enables us to be agile and to drive faster forward through uncertain times. Importantly, we remain confident in our positioning. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:08:18We are serving a large and growing cell analysis market with our industry leading cell analysis portfolio. Global diversification and the critical first mover advantage we have in FFP technology. More than 50% of our product sales are outside of The US. To support our customers worldwide, we have established manufacturing operations in three countries, The US, China, and Singapore. This manufacturing footprint enables region for region manufacturing and allows us to optimize product flows for any global health environment. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:09:00We further believe that having multiple manufacturing locations enhances the resilience of our supply chain, thereby ensuring more reliable and cost effective product availability for our customers. Our current manufacturing capacity for instruments and reagents can more than adequately support our customers for the foreseeable future without additional capital investment in production facilities. I would now like to update you on the progress our team has made across our core strategic pillars, instruments, applications, bioinformatics, and clinical, to solidify Cytec's position as a market leader in next year cell analysis solutions. Starting with our core instruments on slide five. In the first quarter, we expanded our global footprint by 115 instruments, bringing SiTex total installed base to 3,149 units. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:10:07In the first quarter, we also announced the launch of the SiPET MUSE microsystem. The MUSE microcell analyzer is an affordable option that simplifies flow cytometry while enhancing ease of use, precision, and versatility. This latest instrument expands assay capabilities to drive adoption in new emerging markets, such as cell and gene therapy and drug discovery by enabling smaller labs and resource limited facilities to access high quality flow cytometry at a cost effective price. While revenues were down in this Q1 twenty twenty four in both the academic and government, and the biopharma market segments, We believe this was largely due to market weakness rather than market share loss. Our competitive position as a leader in the FFP market segment remains strong. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:11:07We have established a significant commercial footprint and the brand identity in The US and EMEA, and are expanding our market leadership in APAC and in the rest of the world regions. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:11:22The larger installed base of high parameter analyzer instruments we have built over time provides a durable foundation for driving recurring revenue growth in our service and the Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:11:33regions businesses. To expand our addressable market and accelerate growth, we have made strategic investments to advance our product pipeline with newer generations of products, such as our cell products and entry level to mid level instruments, including our Northern Light line and Muse Micro System. The resilience of our product portfolio amidst a challenging macroeconomic backdrop is demonstrated by the 15% trading strong growth in our sales order unit placements and 17% TTM growth in modernized units installed. Within our portfolio, Aurora cell solder revenue grew 15% year over year, and Northern Lights revenue increased 6% year over year in the first quarter. Northern Lights' research unit only sales grew 8% year over year. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:12:30Notably, both Aurora cell solder and Northern Light's instrument sales have continued the growth trend that we saw in the fourth quarter of twenty twenty four. Collectively, these instrument placements represent growth across a diverse customer base, offering comprehensive and better solutions tailored to meet their needs. Moving to bioinformatics on slide six. I am pleased to report that the Cytec cloud continues to grow as a vital resource in the research community. Our main goal is to enable our customers to streamline their experiment workflow through our software tools, which drive adoption and utilization of our cell analysis solutions and the growth in our region and service businesses. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:13:19We now have over 18,000 users, which grew by 2,000 users in the first quarter alone. This represents an average of about six users per installed SiCase FFP instrument, which validates the loyalty our users have to our product portfolio and demonstrates the halo effect of our platform. The increase in site to cloud users reflects growth in the usage of our products and is directionally correlated with long term recurring revenue growth drivers from our regions and the service businesses. Turning to our next growth pillar, applications. While we are in the early innings with our reagents business, we continue to believe that it has strong growth potential. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:14:09We plan to drive growth by accelerating our new reagent product introduction engine, which will expand our reagent offering and application specific kits. The share of reagents we supply as a percentage of total reagent volumes used on our instruments is still at the onset of its growth trajectory. We believe there is a significant growth potential ahead as we continue serving our expanding installed base, improving our execution and the delivery time to customers, leveraging the Spicek Cloud as a revision sales platform, and introducing new revision products and applications. Notably, I believe we have reached an inflection point with recurring revenue, including reagent and service revenue combined, leveraging our established and expanding installed base. In the first quarter, we were pleased to see our reagent sales positively contribute to our recurring revenue wave as a percentage of our total revenue. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:15:16Specifically, our trailing twelve month recurring revenue is steadily growing, representing 31% of our total revenue in the first quarter, up from 26% a year ago. Further, our trailing twelve month recurring revenue grew 17% in the first quarter compared to the prior year. Longer term, we expect our recurring service and the reagents revenue to be stronger growth drivers for SciTech. Turning next to clinical. We continue to believe the clinical market represents an attractive business opportunity for SciTech, and we have seen considerable growth in The EU and APAC for clinical applications. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:16:01In The EU, 1 academic hospital fully validated our minimal residual disease, or MRD panel for leukemia and lymphoma and will begin implementing it in their routine clinical testing this quarter. As a key opinion leader, this institution has also supported our outreach to other clinical sites in The Netherlands, Australia and Brazil. Overall, I'm encouraged by our results despite challenging macro headwinds in The U. S. And EMEA. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:16:36We have areas of strength in high growth regions, including in Asia Pacific and the strength in our sales order and Northern Light instruments. The larger installed base we have built worldwide provides the basis for long term growth in our recurring services and the region businesses, and offers the opportunity to scale our instrument offerings. I believe that we are well positioned to emerge from this period even stronger than we are today. Leveraging our industry leading cell analysis portfolio and strong business fundamentals. With that, I will now turn the call over to Bill for more details about our financials. William McCombeChief Financial Officer at Cytek Biosciences00:17:20Thanks, Wenden. Turning to Slide seven and our first quarter financial results. Total revenue for the first quarter of twenty twenty five was $41,500,000 a 7.6% decrease compared to the first quarter of twenty twenty four. Product revenue, which is instruments and reagents, decreased 18% versus Q1 of twenty twenty four. This decrease was driven by a weaker instrument market in The US and EMEA. William McCombeChief Financial Officer at Cytek Biosciences00:17:50As Wenbin described earlier, this was primarily due to academic funding uncertainties in The US, pressure on government budgets in EMEA causing delays in academic and research funding, and a cautious capital spending environment in the biotech and pharma industries. Service revenue was a bright spot growing 24% versus Q1 of twenty twenty four. Growth in service revenue reflects continued expansion of our installed base of instruments and active usage of our systems. Turning to our geographic market performance, total US and EMEA revenue declined 1324%, respectively, driven by lower instrument sales for the reasons I mentioned. On the other hand, Asia Pacific grew very strongly, up 40%, driven by particularly strong growth in China. William McCombeChief Financial Officer at Cytek Biosciences00:18:42Other international markets, primarily Canada and Latin America, also grew strongly off a small base. We believe this growth reflects the strength of SciTech's brand and customer preference for our technology globally. GAAP gross profit was $20,200,000 for the first quarter of twenty twenty five, a decrease of 12% compared to gross profit of $23,000,000 in the first quarter of twenty twenty four. GAAP gross margin was 49% in the first quarter compared to 51% in the prior year. Non GAAP adjusted gross margin in the first quarter was 52% compared to 55% in the prior year quarter. William McCombeChief Financial Officer at Cytek Biosciences00:19:25The decline in GAAP and adjusted gross margin was primarily due to lower product revenues and higher manufacturing overhead. This was offset by higher service gross margin compared to a year ago. We expect quarterly gross margin to improve for the balance of the year as quarterly revenue increases consistent with typical seasonal patterns. Operating expenses were $35,100,000 for the first quarter, an increase of $1,400,000 from the prior year. Research and development expenses were $9,700,000 for the first quarter, zero point '1 million dollars from the first quarter of twenty twenty four. William McCombeChief Financial Officer at Cytek Biosciences00:20:05Sales and marketing expenses were $12,500,000 for the first quarter, flat versus the first quarter of twenty twenty four. General and administrative expenses were $12,900,000 for the first quarter, up $1,500,000 from the first quarter of twenty twenty four due to higher outside services and headcount expense. Loss from operations was $15,000,000 for the first quarter compared to the 10,700,000.0 operations in the prior year quarter. GAAP net loss was $11,400,000 in the first quarter compared to GAAP net loss of $6,200,000 in the prior year quarter. This was primarily due to a larger loss from operations of $15,000,000 in the current quarter versus $10,700,000 a year ago and a tax expense of $100,000 versus a tax benefit of $2,800,000 a year ago, offset by higher other income due to 1,300,000 foreign exchange gain in the current quarter compared to a $1,100,000 FX loss in the prior year quarter. William McCombeChief Financial Officer at Cytek Biosciences00:21:12Adjusted EBITDA, which excludes stock based compensation and foreign currency impacts decreased to a loss of $3,300,000 for the first quarter due to lower gross profit compared to a loss of 700,000.0 in Q1 of last year. Adjusted EBITDA included investment income of 2,300,000.0. Excluding this amount, adjusted EBITDA loss was 5,500,000.0 in Q1 compared to a loss of $2,600,000 in Q1 of last year. We expect adjusted EBITDA to improve on a quarterly basis as revenues and gross margins increase consistent with typical seasonal patterns. Total cash and marketable securities decreased $12,300,000 versus Q4 to $265,600,000 as of 03/31/2025. William McCombeChief Financial Officer at Cytek Biosciences00:22:05The decline was primarily driven by our investment of $10,600,000 to repurchase shares during Q1. Lastly, turning to our full year guidance on Page eight. As Wenzhen described earlier, due to the significant change in our market environment since our last earnings call in late February, we are revising our full year 2025 revenue outlook to a range of $196,000,000 to $210,000,000 representing overall growth of minus 2% to plus 5% over full year 2024, assuming no change in currency exchange rates. Consistent with our typical seasonal pattern and especially given the current uncertainties in the market and geopolitical environment, we expect this growth to be back end loaded to the second half of twenty twenty five. As Wenbin further noted, our market leadership position remains strong, and we believe we will perform well relative to the overall flow cytometry market. William McCombeChief Financial Officer at Cytek Biosciences00:23:06Our strong balance sheet also gives us the ability to continue investing for growth. With that, I'll turn it back over to Wenbin. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:23:15Thanks, Bill. Turning to slide nine. I want to take a moment to thank our team at SITEK for their dedication to our mission and the overall resilience amidst a very difficult market backdrop. It is this shared belief that positions us well as we strengthen our foundation for the future. We are serving a large and growing cell analysis market as a market leader. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:23:44We continue to make thoughtful investments in our product pipeline and our service teams to drive growth and innovation and to strengthen our competitive position. Our strong balance sheet underpins our foundation, which provides us with options and further flexibility in the future. We have a clear roadmap to expand our market leadership position in cell analysis. These powerful attributes provide us with confidence in our long term objective of delivering sustainable growth and profitability. I want to thank everyone for joining today's call, and we will now open it up for questions. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:24:27Operator? Operator00:24:31Thank you. We will now begin the question and answer session. Your first question comes from the line of Savant with Morgan Stanley. Your line is open. Jason LaiAnalyst at Morgan Stanley00:25:03Hi. This is Jason on for Tejas. Thank you for taking our questions. Tariffs, they've been a key focus for investors. So I sound manageable for SciTech, but I just want to confirm, should we expect any gross margin impact because of the recent tariff policy? Jason LaiAnalyst at Morgan Stanley00:25:19Apologies if I misheard. I believe you said like Cytec could potentially use some of your current available inventory to provide a buffer, but obviously that is just temporary. So I was wondering if you could quantify like a gross margin impact from the current situations of the tariff policy. And then you talked about some supply chain mitigants. I don't believe I heard you talk really about pricing. Jason LaiAnalyst at Morgan Stanley00:25:41So is pricing something Sci Tech could turn to also as a mitigant to the tariffs? And I guess the third part would be there's currently 125% tariffs from China and U. S. Exports. So obviously it's very hard to sell any products there. Jason LaiAnalyst at Morgan Stanley00:25:58I'm wondering like how much of the 2025 revenue guidance cut could be because of this dynamic, like the inability to sell your products in China? Thank you. William McCombeChief Financial Officer at Cytek Biosciences00:26:09Okay, let me try to William McCombeChief Financial Officer at Cytek Biosciences00:26:12take William McCombeChief Financial Officer at Cytek Biosciences00:26:13those in order. William McCombeChief Financial Officer at Cytek Biosciences00:26:16So William McCombeChief Financial Officer at Cytek Biosciences00:26:16it's important to understand that we have established manufacturing facilities that are all producing and shipping product in three regions, The US, Singapore, which is our new facility and Wuxi, China. And so our primary strategy for managing tariffs is what we call region for region manufacturing. So we make product in for sale in a particular region in the region that would be least impacted by tariffs. So making product for Asia and Europe in Asia and US product for sale in The US. Obviously, we can't do that 100%, but we are able to mitigate a substantial portion of the potential tariff liability that way. William McCombeChief Financial Officer at Cytek Biosciences00:27:22The other thing that we can do is reorganize where we source components from. And then thirdly, we are recovering some costs from customers through surcharges. And so those are the strategies for dealing with the tariffs. We don't think that that will have any significant impact on our revenues in 2025. When I say that I'm obviously putting to one side the uncertainties created by the economic and market environment that we're in. William McCombeChief Financial Officer at Cytek Biosciences00:28:10But in terms of tariffs specifically, we don't think that will have an impact. In terms of gross margin, the impact I think is will be fairly limited and in the range of 1% to 3%. And in that regard, we would expect, as I mentioned in my remarks, that gross margin will improve over the ensuing quarters because we expect that revenues will follow typical seasonal pattern where they'll be stronger in Q2, Q3 and Q4. And with higher revenues, we will see a benefit at the gross margin line. Did I cover all your questions? Jason LaiAnalyst at Morgan Stanley00:29:05Yes, most of it. And then the third part, just about the 125% tariff from China and U. S. Exports. Are you still able to sell your products in China? Jason LaiAnalyst at Morgan Stanley00:29:13Thank you. William McCombeChief Financial Officer at Cytek Biosciences00:29:15We are able to sell products in China, absolutely. But that's the way that we deal with that tariff is through our region for region manufacturing. So obviously products sold in China don't incur a tariff if they're manufacturing in China or if they're manufacturing in Singapore. Jason LaiAnalyst at Morgan Stanley00:29:36Great, thank you for the color on that. And then if I may ask just a follow-up. So the academic government end market, seems like the policy situation just might have gotten worse since you last guided in 4Q. So we're seeing significant disruption in government funding at universities with some of the country's largest research budgets. There was also like a proposed 40% cut in the proposed 2026 budget to the NIH. Jason LaiAnalyst at Morgan Stanley00:30:00So I'm just wondering like how are you thinking about like these potential risks to your 2025 guide? And what was your overall outlook for this end market? Do you think maybe like minus mid single digit decline could be reasonable? Thank you. William McCombeChief Financial Officer at Cytek Biosciences00:30:18Look, the uncertainties associated with with university funding in The US are factored into our revised guidance. That's one of the new issues that caused us to come out with this revised guidance. So the short answer to your question is it's factored into what we've told you about revenue expectations. I would make a couple of points though. One is that more than 50% of our revenue is outside The United States. William McCombeChief Financial Officer at Cytek Biosciences00:30:57So obviously that revenue isn't affected by US university funding. And then thirdly, most importantly is we think about our revenue in three buckets. Service, which is growing strongly, reagents, which also saw some nice growth in Q1, particularly in US and EMEA. And then the instrument portion of our revenue is the one that's most impacted by issues like the one that you mentioned. But the other two revenue sources or revenue streams are not particularly affected by US university funding issues. William McCombeChief Financial Officer at Cytek Biosciences00:31:52All that said, we are continuing to sell instruments to US universities here in the second quarter. Operator00:32:08Your next question comes from the line of Matt Skyes with Goldman Sachs. Your line is open. Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:32:15Hi, this is Evie on for Matt. Thanks for taking my questions. So the first one on the AURORA sales order, what drove the double digit growth there? And are there any specific end markets you would call out that may be differentiated versus your other instruments? Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:32:31Well, I think we are seeing nice growth across all territories for our cell sorters. Part of the reason is clearly, see the benefit of SiTeX sorter matches very well with our analyzer now already widely being adopted by both academic and the industry users. And this matching of the panels between Cytec Soda and Cytec Analyzer clearly demonstrated the benefits for our users, makes it very easy for them. So that's one reason. Second part is clearly the performance of our sales orders and has been very well demonstrated. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:33:14And many of our users can easily go with our soldiers directly and go beyond the four d color panels. And so this is something they would like to see. And so even under today's we know the tight budget situations, they see the benefits, and they are jumping to SiTech technology. Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:33:38Okay, great. Thank you. And then another one on phasing. You noted that you expected growth would be back half loaded this year. What's driving this assumption? Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:33:47And is there any specific end market you expect to improve as we move throughout the year? William McCombeChief Financial Officer at Cytek Biosciences00:33:52There's two factors. One is that typically our second half of the year represents more than 50% of total sales. So it's generally usually somewhere in the mid-50s. So that's point one. And that's just a function of the buying patterns of our customers. William McCombeChief Financial Officer at Cytek Biosciences00:34:19They William McCombeChief Financial Officer at Cytek Biosciences00:34:19tend to buy more, particularly in the fourth quarter than in the first quarter. First quarter tends to be a light quarter, fourth quarter significantly more active. We don't obviously, there are some new uncertainties in the market environment. We can't predict the future with respect to overall economic growth and the broader market. But beyond that, we don't see anything that would suggest that there's going to be a fundamental shift or difference in that normal quarterly pattern. William McCombeChief Financial Officer at Cytek Biosciences00:35:03So that's point one. And then point two is that the impact that we've seen on the first quarter has been clearly there's been some signaling of direct reductions in funding. But to a large part it's been the driver of reduced spending has been uncertainty about what the future may hold. Not unreasonable to expect that as we get further into the year that our customers' individual funding situations will be clearer and that some of that uncertainty might lessen. And so I think that's also an overlay of how we think about it. William McCombeChief Financial Officer at Cytek Biosciences00:36:02But I also want to come back to this point that our revenue outlook is a function of, is formulated based on three different revenue streams. Service, where we think that the installed base and the usage and activity of our systems is going to drive continued growth. Reagents where we've been seeing nice solid growth trends. So those revenue streams should continue to see steady growth. And then the seasonal variation and the lessening uncertainty is primarily going to affect the instrument portion of our business. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:36:52Yeah, the recurring revenue from service and regimes have now already exceeded 30% of William McCombeChief Financial Officer at Cytek Biosciences00:37:00from 26% a year ago to 31%. That recurring portion is growing at 17%. So that should continue to grow at similar rates. The service revenue growth rate just as the installed base increases, that's going to moderate slightly. But that's something that's an effect that will take some years to. Elizabeth KosloskyGlobal Investment Research Associate at Goldman Sachs00:37:30Great. Thank you. Operator00:37:34Your next question comes from the line of David Westenberg with Piper Sandler. Your line is open. John BarnidgeManaging Director & Senior Research Analyst at Piper Sandler Companies00:37:43Hi. This is John on for Dave. Thanks for taking the questions. So could you just comment on whether or not you're seeing any of your competitors raising prices due to tariffs? And also, could you give any color on your R and D spending? John BarnidgeManaging Director & Senior Research Analyst at Piper Sandler Companies00:37:58Are you looking more into imaging or spectral for new product innovation? Thank you. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:38:07On the pricing side, things still are in the early stage, right? And I think we do see a report talking about passing around some of the tariff cost over to the customers. So but we still wait to see how it's going to impact the overall market situation. With regarding to R and D, we continue to spend between 15% to 20% of our revenue to R and D and to drive new products. Imaging clearly is one of the directions of the company, which we are working on within the R and D department. John BarnidgeManaging Director & Senior Research Analyst at Piper Sandler Companies00:38:49Okay, thank you. Operator00:38:53Your next question comes from the line of Chad Yakrowski with TD Cowen. Your line is open. Chad WiatrowskiVP - Equity Research at TD Cowen00:39:01Hey, guys. This is Chad White House on for Brendan Smith. Just on the share repurchases this quarter, obviously, the balance sheet is still healthy. How do you sort of reconcile doing share purchases versus like M and A or organic investment? And what sort of the plan throughout the remainder of the year? William McCombeChief Financial Officer at Cytek Biosciences00:39:26We plan to do both share repurchase and have capital available for M and A. So we think we have plenty of cash available to do both. With respect to specific share repurchase plans, I can't say much more than authorization. Late last year we purchased $10,500,000 worth of shares in the first quarter, approximately 2,100,000.0 That's basically all I can say for the time being. In terms of capital allocation priorities, our plan is to have capital available to do both. Operator00:40:37Your next question comes from the line of Andrew Cooper with Raymond James. Your line is open. Noah LewisEquity Research Associate at Raymond James00:40:45Hey, everyone. This This is Noah on for Andrew. First question, just wanted to get a feel for what are customers saying about the SciTech News? Are you seeing a lot of interest? I just want to get an idea of what you're seeing in that new product launch. Wenbin JiangPresident, CEO & Chairman of the Board at Cytek Biosciences00:41:03Yeah, CytoMuse being a new product line and is to support gene and cell therapy line. And this is a new product currently still in the sampling evaluation stage, but we do have some early products based on the technology acquired from Luminex. And that's the part has been selling very well. And normally they match certain needs, for example, like cell counting and dead cell, that kind of testing. But MicroMuse, the one we're going to launch, will add new features, new functionalities to support new application and enable us entering into a new market in the meantime to help drive our reagent revenue as well. Noah LewisEquity Research Associate at Raymond James00:41:59Awesome. And then maybe if I can just get one more. You mentioned pharma biotech and I think the CRO market postponing orders. Just kind of want to get an idea of what you're seeing now that we're about a week into May. Is there a little bit more optimism? Noah LewisEquity Research Associate at Raymond James00:42:15Is it still just about the same as April? And then also, how does that compare to what you're hearing from your academic and government customers as it relates to funding? William McCombeChief Financial Officer at Cytek Biosciences00:42:25Look, William McCombeChief Financial Officer at Cytek Biosciences00:42:27incorporated everything that we're seeing into our quarterly guide sorry, into our annual guidance. So I also mentioned that we expect to see a typical seasonal pattern between the quarters. So there's nothing that we've seen so far in May that would be at odds with that. But we typically comment on month by month or give quarterly guides. Just suffice it to say that typically our Q2 is stronger than our Q1. William McCombeChief Financial Officer at Cytek Biosciences00:43:14I think as we've mentioned in the past, we're primarily a third month company. The significant majority of our sales for each quarter happens in the third month of the quarter. So obviously, we haven't seen June yet. So the evidence around second quarter so far is limited, but it's consistent with the supports the views that we've expressed here. Pharma customers versus academic and research, I think you'll see from our 10 Q that revenue from those two sectors was down by a similar amount. William McCombeChief Financial Officer at Cytek Biosciences00:44:01We saw cautious spending environment from the pharma industry. There are some macro reasons for that related tariffs and drug pricing concerns and so on. But generally speaking, we haven't seen much different other than just a more cautious tone around capital spending. But our systems, big pharma still has a strong preference for our systems because they're uniquely capable of being harmonized and that's very important to them. We continue to see multiple system orders from Big Pharma for that reason. Operator00:45:10And seeing no further questions at this time, that does conclude today's conference call. Thank you all for joining, and you may now disconnect.Read moreParticipantsExecutivesPaul GoodsonHead of IRWenbin JiangPresident, CEO & Chairman of the BoardWilliam McCombeChief Financial OfficerAnalystsJason LaiAnalyst at Morgan StanleyElizabeth KosloskyGlobal Investment Research Associate at Goldman SachsJohn BarnidgeManaging Director & Senior Research Analyst at Piper Sandler CompaniesChad WiatrowskiVP - Equity Research at TD CowenNoah LewisEquity Research Associate at Raymond JamesPowered by