MaxCyte, Inc.

with a significant global opportunity to deliver therapies to patients, and we remain very optimistic about the medium to long-term growth for MaxSight. With that, I will now turn the call over to DJ to discuss our financial results. DJ?

Thanks, Doug. Hello, everyone. I'm very excited to have joined the MaxSight team. I appreciate the opportunity to support our mission for having the next generation of cell-based therapies. During my short time with the company, I I continue to be impressed by the quality of our team at all levels in the organization. It is an honor to work with all of them as we support our partners as they develop innovative therapies for patients who need them most. I will now discuss MaxSight's financial results for the first quarter. Total revenue in the first quarter of 2023 was $8.6 million compared to $11.6 million in the first quarter of 2022, representing a 26% decline. In the first quarter, we reported core revenue of 7.8 million compared to 9.6 million in the comparable prior year quarter, representing a 19% decline. This includes revenue from cell therapy companies of 6 million, which declined 19% year-over-year, and revenue from drug discovery customers of 1.8 million, which declined 17% year-over-year. The year-over-year decrease in revenues were driven by an unusually strong first half of 2022, which did not see our typical seasonality and was strongly impacted by the purchasing patterns of late stage pre-approval programs and laboratories coming back to near full capacity following COVID-19 related disruptions. As discussed on last quarter's call, we expect about 40% of 2023 core revenue to occur in the first half of this year, consistent with our historical experience outside of last year's less typical seasonality. We recognize 0.8 million of SPL program-related revenue in the first quarter of 2023, compared to 2 million in the first quarter of 2022. We will not be able to discuss further details on our SPL program-related revenue or our partners' progress due to confidentiality agreements. Moving down the P&L, gross margin was 88% in the first quarter of 2023, compared to 91% in the first quarter of the prior year. Margins were influenced by highly variable milestone revenues as well as a mix of products and customer types, and we saw those effects in the first quarter. Total operating expenses for the first quarter of 2023 were $20.8 million compared to $14.7 million in the first quarter of 2022. The overall increase in operating expenses was primarily driven by increases in R&D, sales and marketing, headcount, and strategic consulting expenses. as the company continues to invest in the expansion of commercial sales and marketing, as well as in business and corporate development and innovation and product offerings for long-term growth. We finished the first quarter with combined total cash and cash equivalents and short-term investments of $224.7 million as of March 31, 2023, and, of course, no debt. Moving to our updated full-year 2023 guidance, We now expect total revenue for 2023 to grow between 8% and 12% compared to 2022, including core revenue growth of between 5% and 10%, and SPL program-related revenue expectations remaining unchanged at approximately $6 million for the year. Our updated guidance incorporates the challenging macro environment and the timing of purchasing patterns from our customers and partners, which Doug discussed. As we have discussed previously, the timing of partnership revenue is predicated on our customers' clinical and regulatory progress and therefore is fundamentally more difficult to predict than core revenues. Our program-related revenue expectation is a risk-adjusted forecast achievable under various potential outcomes across our 20 announced partnerships and their planned clinical progress. As I mentioned, we continue to expect a back-half weighted seasonality split of roughly 40 to 60% first half and second half core revenues in 2023, which would be consistent with our historical experience before 2022. And finally, I want to note our strong financial position as we expect to end this year with approximately $200 million in cash, cash equivalents and short-term investments and no debt. Our cash position allows us to focus on realizing the long-term potential of our business model. Let me close by saying that overall, we are confident in our updated 2023 revenue outlook and we believe that our modest cash burn and debt-free balance sheet will support our future plans for profitable growth. Now we'll turn the call back over to Doug.

Thank you, DJ. In summary, we're optimistic about the long-term outlook of MaxLight and the depth of our partnership pipeline. We're committed to strengthening our opportunity to lead the industry as the premier cell engineering platform technology, supporting the development of advanced cell-based therapeutics for patients who may not otherwise have treatment options. As always, we thank our MaxSight team, as well as our board, suppliers, investors, partners, and the amazing industry that we have the honor of serving to enable the development and commercialization of therapies for patients and their families. With that, I will turn the call back over to the operator for the Q&A. Operator?