Quantum-Si Incorporated

Thank you for standing by and welcome to Quantum SI's fourth quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host of today's program, Catherine Atkins, Senior Vice President of Commercial Markets. Please go ahead.

Good afternoon, everyone, and thank you for joining us. Earlier today, Quantum SI released financial results for the fourth quarter and full year ended December 31st, 2024. A copy of the press release is available on the company's websites. Joining me today are Jeff Hawkins, our President and Chief Executive Officer, as well as Jeff Kyes, our Chief Financial Officer. Before we begin, I would like to remind you that management will be making certain forward-looking statements within the meaning of the 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 of our Press Release. For more complete lists and description of risk factors, please see the company's filings made with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the live broadcast date today, March 3, 2025. Except as required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements. During this call, we will also be referring to certain financial measures that are not prepared in accordance with U.S. generally accepted accounting principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the press release filed earlier today. With that, let me turn the call over to Jeff Hawkins.

Good afternoon, and thank you for joining us. On today's call, we will provide a business update, review our operating results for the fourth quarter and full year of 2024, and provide our initial thoughts on 2025. After that, we will open the call for questions. I will begin with a reminder of our three corporate priorities, to accelerate commercial adoption, to deliver on our innovation roadmap, and to preserve our financial strength. Our first corporate priority is to accelerate commercial adoption. 2024 was an important year in the commercialization of our next generation protein sequencing technology and platinum instrument. The year began with our transition into full commercial launch at the end of the first quarter, followed by consistent quarter-over-quarter revenue growth throughout the year, and concluded with our first quarter in excess of $1 million in revenue. Along the way, we significantly diversified our customer base from one that entered the year made up of largely academic researchers in the United States to a customer base spanning multiple market segments and geographies. Today, our customer base has a healthy mix of academic, biotech, pharma, government, and contract research organizations. In addition, we built an international distribution channel that currently has 18 partners, giving us access to an attractive growing global market opportunity for our products. I am pleased with how we closed out 2024 with total revenues of $1.2 million in the fourth quarter and $3.1 million for the full year 2024. These results represent a 52% increase in revenue over the third quarter of 2024 and a 183% increase in annual revenue on a year-over-year basis. The changes we made to our commercial strategy throughout 2024 paid dividends in the fourth quarter as we observed greatly improved commercial execution across all aspects of our strategy, from lead generation to sales execution, delivering our strongest quarter ever in terms of both revenue and new instrument sales. We are also pleased to report that during the fourth quarter of 2024, we achieved a significant milestone, having sold our 50th platinum instrument. In addition to nearly tripling revenue in 2024 as compared to 2023, we also executed on key distribution agreements for our products globally. As announced in November of 2024, we entered into a distribution agreement with Avantor for the North American market. This agreement augments our current direct sales efforts and once fully implemented, significantly increases the number of sales professionals actively engaged in selling our products across all end user markets in North America. We are currently in the sales training and implementation phase of this relationship and expect to complete this process during the first quarter of 2025. Turning now to our global channel, we exited 2024 with 18 international distribution partners. The international expansion we executed on during 2024 added coverage to our existing direct and distribution footprint in Western Europe, Eastern Europe, and Asia, and expanded our presence into new countries within the Middle East, Africa, South America, and the South Pacific regions. While we are still in the early stages of our international commercialization efforts, we are very pleased with the initial end-user traction we are seeing, as well as the interest in our platform in general. One key learning from the early commercialization effort is that despite a rapidly growing interest in proteomics research in these regions, The cost of many of the legacy proteomics instruments, as well as the infrastructure and specialized staff required to run these systems, makes them inaccessible to many researchers. Platinum's low capital cost, simplified workflow, and automated data analysis provides a realistic option for researchers in these regions looking to integrate an advanced proteomics platform into their research. We are optimistic that this is an early indication of the potentially compelling international opportunity for our technology, and we plan to continue to build out our international channel network to fully capture this emerging opportunity in 2025 and beyond. In addition to our focus on commercial execution during 2024, we established a dedicated scientific affairs team to work directly with customers and key opinion leaders to publish and present data demonstrating the value of next-generation protein sequencing. In addition to the focus on external data generation, our scientific affairs team works closely with our commercial and R&D teams to publish data about specific aspects of our technology, like data analysis, or specific applications of our technologies, like protein barcoding. Over the course of December of 2024 and January of 2025, four manuscripts were submitted for peer review and in parallel published as preprints on bioRxiv. The first paper was from our R&D team and covered our new protein barcoding kit, including the workflow and analytical performance validation results. Importantly, the validation data determined a lower limit of detection as low as 50 femtomole and a tenfold dynamic range, demonstrating the method's sensitivity in detecting low abundance variants. The second paper was also from our R&D team and was focused on ProteoView, our comprehensive bioinformatics pipeline for single amino acid variants. The study described in this paper demonstrates the ability of ProteoView to perform robust single amino acid variant detection and quantification with applications ranging from proteoform characterization to protein mixtures and quality control assays. The third paper was from researchers at the University of Virginia. This foundational study illustrates the capacity of next-generation protein sequencing to detect proteoform variation at the single amino acid level, including variants associated with disease phenotypes that are not detectable with existing technologies like mass spectrometry. And finally, the fourth paper was from researchers at Northwestern University. This study highlights the synergy of complementary protein detection methods, in this case, mass spectrometry and next generation protein sequencing, to more comprehensively characterize proteoforms relevant to biological interactions. We are excited to see these first four manuscripts being submitted for peer review publication and expect that trend to continue throughout 2025 as our scientific affairs team is actively engaged with researchers across the broad range of applications and market segments to publish the results of their ongoing research. Finally, I am pleased to announce that we have formed a world-class scientific advisory board led by Dr. Gloria Shankman from the University of Virginia. Our scientific advisory board is made up of an outstanding group of scientists from academic research and industry that bring deep experience with protein and DNA sequencing, protein modifications in relation to disease, bioengineering, and molecular delivery systems, as well as consumable development and product development. I would encourage you to visit our website to learn more about our scientific advisory board members. We look forward to collaborating with this distinguished group of scientists as we continue to expand the utility and utilization of next-generation protein sequencing in the global proteomics market. Our second priority is to deliver on our innovation roadmap. Over the course of 2024, our R&D team delivered two new sequencing kits, a new library prep kit, a barcoding kit, and two new software workflows, specifically protein inference and a single amino acid variant detection and quantification tool called ProteoView. At a high level, the kit launches expanded our proteome coverage, significantly reduced the sample input amount required, and improved the overall sample success rates across the broad range of proteins and applications. When combined with the software workflows, customers experienced a consistent flow of new capabilities that allowed them to pursue an ever-increasing range of protein analysis applications, sample types, and proteins of interest. In addition, in January, we announced the launch of Platinum Pro with shipping expected to begin during the first quarter of 2025. Platinum Pro is an evolution of Platinum that offers a streamlined and more efficient processing experience for the user the ability to process data onboard or in the cloud, and includes Pro Mode, which enables customers to develop custom applications using the power of our single molecule kinetic detection technology. Next, I would like to provide a recap of the innovation roadmap we laid out at our investor day on November 20th, 2024. First, we reviewed the proteomics market and the long-term growth drivers. The proteomics market is a large, important, and growing market, which is still in its relative infancy. Some examples of the long-term growth drivers we shared include large-scale screening studies that, once completed, will drive the need for follow-on studies to more deeply characterize the most clinically and therapeutically actionable proteins identified. Additionally, the move to greater use of artificial intelligence tools, whether in drug development, protein engineering, or multiomics analysis, will require vast amounts of data to be generated to train the models. In both cases, we believe that tools like next-generation protein sequencing will be a key tool to drive these research initiatives forward. Second, we laid out a new instrument and consumable architecture that can scale to billions of reads, and when combined with other technology development initiatives, creates a clear path to de novo sequencing. The Proteus platform will be the first platform to incorporate this new architecture and we expect Proteus to launch in the second half of 2026. At a high level, Proteus will offer significantly more reads per sample, more samples per run, and greater workflow automation than our current platform. As an example, our current platform, Platinum, processes a single consumable per run, and that consumable contains two million wells. Proteus is being designed to process two consumables at a time, and each consumable is expected to contain up to 80 million wells for a total of 160 million wells per run. This expanded number of wells can be used to process more samples per run or can be used for extremely deep analysis of a single or small number of samples. From a development perspective, the Proteus program is de-risked compared to a typical new platform development project in two ways. First, we can utilize many aspects of our current commercially available technology, such as surface chemistry, consumable fabrication methods, library prep, and sequencing chemistry. And second, we can take advantage of the advancements in the field of optics that have been developed over the past decade to meet the needs of next generation DNA sequencing platforms. Finally, we share data from our research initiatives that showed the vast capability of our core technology to be extended into other areas of proteomics beyond protein sequencing. Based on the data presented, we believe our core technology is the only commercially available technology that can enable single molecule, top-down, and bottoms-up proteomics methods. In summary, we believe that our Proteus platform and core technology are capable of addressing the broadest range of proteomics analysis methods of any technology in the market today. We expect to unlock that potential through a combination of both internal R&D initiatives as well as strategic partnerships to ensure that Proteus will enable every lab to be a core lab without the need to own multiple instruments or have specialized facilities and staff to perform proteomics research. If you would like to learn more about any of these topics, I would encourage you to visit the investor relations section of our website, where we have a comprehensive slide deck and audio recording of the full event. In the coming months, we will certainly provide you with updates on the Proteus development process to allow you to understand our progress relative to our anticipated launch date in the second half of 2026. The key milestone this year is successful protein sequencing on a prototype Proteus system by the end of 2025. We certainly have numerous other incremental milestones that we will achieve throughout the development process, and as those items come up, we will provide you updates as appropriate. Additionally, for 2025, we announced today that we expect to launch a version 4 sequencing kit in the third quarter of the year. We expect that this new sequencing kit will further increase proteome coverage and protein accessibility via new recognizers and cutters. We are also continuing to advance other product development initiatives across library prep, application development, and software, and we expect to provide updates to you in the coming months on these programs. Our third priority is to preserve our financial strength. We remain committed to utilizing our capital in the most efficient manner that maximizes shareholder value. We will continue to be nimble and adjust our capital deployment strategy as the business or market may require. To that end, post our investor day presentations and partnership announcements in November of 2024, we observed a significant increase in interest from investors as the long-term strategy was now clear and the market was able to better understand the full potential of our uniquely differentiated technology. Based on this market interest, we raised capital through our at the market facility in December, as well as raising additional capital at the start of January. Jeff will go into more details, but the combination of these capital raises effectively provides us another year of cash runway as we work to execute on our commercial strategy and innovation roadmap. I will now turn the call over to Jeff to review our financial results. Thanks, Jeff.