908 Devices Inc.

Ladies and gentlemen, thank you for joining us and welcome to the 908 Devices second quarter 2025 financial results conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Kelly Gurra, Investor Relations. Please go ahead.

Thank you. This morning, 908 Devices released financial results for the second quarter ended June 30th, 2025. If you've not received this news release, or if you'd like to be added to the company's distribution list, please send an email to ir at 908devices.com. Joining me today from 908 is Kevin Knopp, Chief Executive Officer and Co-Founder, and Joe Griffith, Chief Financial Officer. Before we begin, our commentary today will include the presentation of some non-GAAP financial measures. These measures should be considered as a supplement to and not a substitute for GAAP financial measures. Reconciliations to the most direct comparable GAAP financial measures can be found in today's earnings press release, which is available in the investor relations section of our website. Additionally, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled, Forward-Looking Statements in the Press Release SinoVite Devices Issued Today. For a more complete list and description, please see the risk factors section of the company's annual report on Form 10-K for the year ended December 31, 2024, and it is other filings with the Securities and Exchange Commission. Except as required by law, 908 Devices disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, August 5, 2025. With that, I would like to turn the call over to Kevin.

Thanks, Kelly. Good morning, and thank you for joining our second quarter 2025 earnings call. I'm really proud of our team's performance and execution in the second quarter. We delivered strong growth ahead of internal expectations while undertaking initiatives to meaningfully reduce our OPEX and spending to march towards profitability with the goal of being adjusted EBITDA positive by Q4 of this year. Revenue from continuing operations was $13 million, an increase of 14% over the prior year period. Growth was driven by strong device sales with our mass spec devices again this quarter accounting for roughly 60% of revenue and our FTIR products making up the other 40%. Our adjusted EBITDA loss was $3.9 million for the quarter, an improvement of more than 45% year-over-year compared to our previously disclosed adjusted EBITDA for Q2 2024 prior to our transformation. And importantly, the adjusted EBITDA loss reduced by 15% quarter-over-quarter. We are advancing with urgency and discipline towards the 908 Devices 2.0 vision outlined earlier this year, positioning the company for sustained growth and impact. To realize this, we've established three strategic focus areas for 2025, targeting marketing expansion, advancing innovation, and reinforcing financial discipline. I'll walk through the progress we've made across each area in the second quarter. Our first focus is to increase adoption of our devices to address global threats to public health and safety. We equip frontline responders with rapid, reliable chemical identification tools that require minimal training and perform when it matters most. Our aim is to define the benchmark for advanced chemical detection in the field. We delivered another strong quarter in Q2, placing 164 devices, including a record number of Explorer units. This marks our highest quarterly performance for Explorer and underscores its impact in filling a critical gap in hazardous gas identification. Our results in the first half and our pipeline give us confidence in meeting our full-year targets. As we look towards 2026, we are encouraged by recent legislative actions that strengthen the funding landscape and will support customer procurement of our devices, bolstering our ability to achieve our previously articulated goal of 20% plus growth. First is the newly passed US budget FY26 reconciliation bill, dubbed the One Big Beautiful Bill. This bill and related appropriations include over $760 million in combined funding for the COPS and Burn JAG grant programs to support local law enforcement in combating fentanyl and other illicit drugs. Additional funding includes $615 million for the Urban Area Security Initiative, which addresses terrorism and other threats, and $370 million for the Assistance to Firefighters Grant for critical equipment, such as our Explorer device. In Q2, the majority of Explorer orders were funded through this Firefighters Assistance Grant. Combined, these grant funding levels exceed $1.7 billion, representing an approximate 11% increase from 2024 levels. The bill also includes a 7% year-over-year increase to the Department of Homeland Security budget, which opens broader procurement opportunities across its many agencies and includes $900 million to secure large-scale events like the 2026 FIFA World Cup and the 2028 Los Angeles Olympics. Our devices have been used to secure public safety at several large sporting events, such as a Super Bowl, and more recently at the Indianapolis 500 in May. Our interceptor device, which is a version of our Explorer gas detection product, specifically for unmanned systems, was coupled with the Acelon Robotics drone dog for remote and continuous air monitoring throughout the speedway, including the tunnels underneath the track. While we remain focused on the massive handheld opportunities in front of us, over time autonomous robot and drone platforms can further expand use cases for our technology as they develop and become adopted lastly provisions in the one big beautiful bill and other recent legislative action strengthen the foundation for deploying modern portable detection solutions like our mx908 device while the detect fentanyl and xylazine act passed in december 2024 provides the statutory authority to support the use of commercial off-the-shelf solutions to improve drug detection, the funding priorities being planned create a clear procurement pathway for these tools. Further, last month's passage of the HALT Fentanyl Act reinforces the federal government's aggressive posture on synthetic opioids by permanently scheduling fentanyl-related substances as Schedule I drugs. This legislative action broadens enforcement capabilities and places added emphasis on detection technologies that can stay ahead of rapidly evolving analogs. The MX908 handheld mass spec device is uniquely positioned to support this mission. With its trace detection and machine learning capabilities, the MX908 can identify over 2,000 fentanyl analogs, giving law enforcement and other first responders unmatched competence in real time. This differentiation is particularly important as a threat landscape grows more complex and detection tools with limited libraries struggle to keep pace. Taken together, we expect that the recent U.S. legislative outcomes will institutionalize demand, support our addressable market, and clarify a growth path across our core customer segments for 2026 and beyond. With a renewed focus on modernization, we are well positioned to benefit from sustained investments in fentanyl interdiction, border security, and chemical threat preparedness. This is setting up not only the United States, but globally. In response to mounting global threats, allied nations agreed at the NATO summit in June to significantly increase defense spending, committing to invest 5% of GDP annually by 2035. This historic shift up from the previous 2% target is favorable for 908 devices, and our field deployable chemical detection solutions are directly aligned with NATO's priorities of deterrence, defense readiness, and civil preparedness. Our technology supports threat identification in critical scenarios such as CBRNI defense, border security, and special operations, areas likely to see increased procurement activity under the new funding framework. Our second focus area is advancing our next-gen analytical tools portfolio. At our core, we are an innovation-driven analytical instrumentation company. We are committed to the relentless pursuit of higher performance, breakthrough capabilities, and greater simplicity. July marked a key milestone in 908 Devices' strategic transformation with the successful launch of Vypr, our new 3-in-1 handheld chemical analyzer. Vypr was purpose-built for high-stakes environments, particularly global customs organizations that sit at the intersection of security and trade. These agencies face the dual challenge of interdicting dangerous materials like narcotics, explosives, and toxic chemicals, while also ensuring the smooth flow of legitimate commerce. Viper addresses this critical need by combining FJIR and Raman spectroscopy into a single seamless workflow enabled by a proprietary smart spectral processing technology. The result is faster, more confident chemical identification in the field without repeated sampling or interpretation delays. Strategically, ViPR fits squarely within our handheld platform approach, extending our capabilities in chemical identification and deepening our relevance with core customers. It broadens our reach within the existing addressable market, serving customers where we see strong alignment between capability and demand. ViPR supports the long-term growth trajectory we've outlined, while the successful launch and positive early feedback increases our confidence. We are actively engaged with multiple customs agencies for testing and evaluation and see a clear path to future pilot and enterprise opportunities. Adoption is expected to benefit from widespread familiarity with FJAR and Raman workflows, which lowers the barrier to entry and supports efficient scaling. From a financial perspective, VIPER is neutral to gross margin and fully aligned with our discipline model. As we look ahead, Viper strengthens our position in global security markets and sets the stage for future innovation, including the next generation MX-908, which remains on track for release in 2026. And finally, our third focus area is strengthening our financial position and accelerating profitability. We are continuing to target adjusted EBITDA positive by the fourth quarter of this year. We achieved several key milestones in the second quarter in support of this goal. First, we completed the transfer of all MX-908 manufacturing from Boston to our lower-cost facility in Danbury, Connecticut, which also houses our FTR production to enable greater operational efficiency. Second, we completed the physical asset transfer of our bioprocessing for polio to repligen. And third, we completed the relocation of our corporate office from Boston to a smaller, more cost-effective site in Burlington, Massachusetts. I want to thank our team for their focus and resourcefulness as we executed these critical projects to lower facility costs, improve margin, and gain efficiency. Last month, we took steps to strengthen and secure our supply chain of critical FJR components by acquiring the assets of KAF Manufacturing Company, a precision machining manufacturer based in Stanford, Connecticut, for $2.75 million. KAF is a longtime supplier of key components of our FJR devices. This acquisition provides us with the ability to scale faster and improve quality control, lessening our dependence on external vendors. Last year, we spent approximately $5 million with external precision machine shops, and insourcing enhances protection from tariffs and contributes meaningfully to our margin improvement and profitability goals. Concurrently, we signed a three-year $6.6 million agreement with an upfront cash payment of $750,000 to supply precision optical components and assemblies to a large analytical instrumentation company that is an existing 908 devices and KAF customer. We also believe this supply relationship enhances our visibility into industrial QA2C and pharma markets, creating new opportunities to expand our technology reach through strategic partnerships. Importantly, it also supports and de-risks our previously stated goal of generating $2 million or more annually in OEM revenue. In summary, the alignment of policy, product, and performance is propelling 908 devices forward, enabling us to expand our impact, extend our market leadership, and deliver on our commitment to profitability. I'll now hand it over to Joe to review our second quarter financial performance.