Quantum-Si Incorporated

Good day, and thank you for standing by. Welcome to the Quantum EI Q2 earnings call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's call is being recorded. I would now like to hand the conference over to your first speaker today, Risa Lindsay. Please go ahead.

Good afternoon, everyone, and thank you for joining us. Earlier today, Quantum SI released financial results for the second quarter and the June 30th, 2025. A copy of the press release is available on the company's website. Joining me today are Jeff Hawkins, our president and chief executive officer, as well as Jeff Kye, 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 this section entitled Forward-Looking Statements of our Press Release. For a more complete list 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, August 5th, 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 Hopkins.

Good afternoon, and thank you for joining us. On today's call, we will provide a business update and review our operating results for the second quarter of 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 financial strength. Our first corporate priority is to accelerate commercial adoption. The second quarter of 2025 marked the first full quarter of activity with the NIH funding and indirect cost cap uncertainties in full effect. During the quarter, we observed a near halt in capital purchases by U.S. academic labs. As a result, revenue for the second quarter was $591,000. This result was below our expectations, driven entirely by capital sales of new instruments. On the positive side, consumable purchases in the quarter were slightly ahead of our expectations with customers across all market segments performing well. As communicated on our last earnings call, we believe that pharma and biotech represent a good opportunity for continued growth in terms of both new instrument sales and ongoing consumable sales. During the second quarter, our commercial team executed on specific initiatives to increase our funnel of opportunities in these market segments. I am pleased to report that we more than doubled our funnel of opportunities in pharma and biotech during the quarter, from approximately 30 at the end of the first quarter, to more than 60 at the end of the second quarter. While we are pleased with these results, we are fully aware of the longer sales cycle associated with this market segment. We also know that not every one of these opportunities will result in a sale, but for those that do, our experience with customers in this market segment is that they are consistent buyers of consumables once operational with our technology. During the quarter, we also spoke with several customers who have budget to spend on consumables, but simply can't purchase an instrument at this time. Strategically, our goal is to create a large installed base of customers who consistently purchase consumables and apply our technology in their -to-day research. We expect that the results of their research projects will also generate scientific publications further validating the utility of our technology. Based on this customer feedback, we believe that in the current environment, having a single instrument acquisition model via capital sales is constraining the number of users of our technology, as well as the capture of consumable revenue. To address the capital sales headwinds, and given our favorable cost to produce the Platinum Pro instrument, we have recently launched an expanded set of instrument acquisition options that allow customers to have our instrument in their lab, purchase and run consumables without having to find the capital dollars to acquire the instrument upfront. While we are still in the early days of offering these new instrument acquisition options, we have already secured our first few customers using this approach, and they have purchased consumables to begin using our technology in their research. In summary, we view growing our installed base, not just as a revenue driver, but as a strategic mode. With every new lab that implements Platinum Pro, we expect to see increasing consumable sales, scientific validation, and customer advocacy. The cumulative impact of this cycle is key to long-term value creation. While the capital headwinds in the market are going to impact short-term commercial results, we are optimistic about the opportunity to continue to grow our customer base using a mix of instrument acquisition options, which in turn will drive more consumable revenue and generate more published evidence demonstrating the value of our technology. Strategically, a large installed base of active users is the key to long-term success, and we will take advantage of our favorable cost to produce Platinum Pro and our strong balance sheet to continue to execute on that installed base growth despite the capital market headwinds. Furthermore, we remain confident in the long-term market opportunity in proteomics and the technology roadmap we are executing against to capitalize on that opportunity. Our second priority is to deliver on our innovation roadmap. We continue to make solid progress across all of our development programs. Our version four sequencing kit is currently undergoing validation studies, and we expect to launch the kit during the current quarter. This kit will further increase proteome coverage via increased amino acid detection and the addition of a new enzyme that is engineered specifically to provide high efficiency cutting of the amino acid directly preceding a proline. In addition, as part of this version four sequencing kit launch, we also expect to release an expanded set of 24 barcodes that will allow customers to increase the multiplexing level of their experiments while maintaining the same level of analytical performance they experienced with the original set of eight barcodes. Turning now to library preparation, our version three library preparation kit remains on track for launch by the end of 2025. The program continues to progress well and the data supporting lowering the sample input quantity continues to show great promise. At this stage in the program, we believe that we will be able to lower the sample input quantity by at least 100 fold as compared to our current library prep kit. This lower input concentration requirement is expected to allow our customers to be able to process a broader range of biological samples and study biologically relevant proteins that are at a much lower concentration than our current library prep kit can accommodate. When combined with the V4 sequencing kit, we believe customers will experience a meaningful level of improvement in overall system performance and be able to pursue some of the more complex biological sample work that to date has been difficult to do with the existing kits. Next, I would like to provide an update on the Proteus development program. As a reminder, Proteus incorporates a new instrument in consumable architecture that will offer significantly more reads per sample, more samples per run and greater workflow automation than our current platforms. To be clear, Proteus is not just an incremental improvement over Platinum Pro. It is expected to be a huge leap in capabilities and we believe it will be a multi-year growth driver for the company. We are pleased to report that we remain on track to successfully perform protein sequencing on a prototype Proteus system by the end of 2025. Hitting this milestone in 2025 sets us up well to deliver on the launch of Proteus in the second half of 2026. In terms of interim milestones of the Proteus development program, we are pleased to share two important milestones since our last call. First, during our first quarter 2025 earnings call, we communicated that we had completed the development of a set of fluorescent dyes capable of supporting the transfer of our current sequencing chemistry onto the Proteus platform. Since our last call, we have been able to demonstrate an additional dye and more importantly, when we look at this expanded dye set in the context of the overall optical performance we are observing with this new system, we are confident that there is room to add even more dyes as we seek to scale our recognizer set from its current level to our end state goal of covering all 20 amino acids. Second, we completed feasibility of wafer scale surface chemistry processing and have made that our standard process to produce consumables to support the Proteus development program. This is an important milestone as we look to the future commercialization of Proteus and scale up of chip production. Wafer scale processes are more scalable and cost effective for high volume production but are often not achieved until much later in the development cycle or even post launch given the complexity of developing such a process. Demonstrating feasibility for wafer scale processing so early in the program is a significant accomplishment by our surface chemistry team and sets us up well for the remainder of the development program and for our future commercial production needs. Finally, I would like to spend a few minutes updating you on two other exciting initiatives within our R&D organization. The first is about our Amino Acid Recognizer Development Program. As part of our Recognizer Development Program, we have designed and screened millions of candidates. As part of that process, we have amassed what we believe may be the richest set of data in the industry about how mutations inserted into engineered proteins affect their binding. To end terminal amino acids, the kinetic properties of those binding interactions, binder specificity, stability, and many other features. This proprietary data set presents a significant opportunity to leverage state of the art AI tools trained on this proprietary database to design new amino acid recognizers and accelerate the path to full proteome coverage. We recently used this approach to complete our first AI-based recognizer design, achieving a binder that meets specifications within one design cycle. By using AI to design initial clones, we eliminate combinatorial screening and move directly to downstream assays, thus significantly shortening our timeline to produce candidate binders for testing and sequencing. We look forward to sharing more about this approach and the impact we believe it can have on the timing to achieve full proteome coverage at our analyst day later this year. Our second initiative is around post-translational modifications or PTM detection. At our November 2024 Investor and Analyst Day, our head of research, Dr. Brian Reed, shared data about various applications of our single molecule kinetic detection technology. One of those applications was combining a pre-sequencing detection only cycle with a standard protein sequencing run to provide site-specific peptide-linked PTM detection regardless of the location of the PTM. We believe that the advantage of this approach is that it will allow Platinum Pro users to detect, quantify, and identify the sequence position of a given PTM, providing data and insights far beyond those provided by current technologies. In addition, this combined approach can detect a PTM that may be very deep into a peptide and would not otherwise be detected via a sequencing only approach today. We are pleased to report that this combined method for PTM detection has met our internal technology feasibility thresholds and has been successfully transferred to our product development team to begin developing commercial kits. Our initial discussions with customers about this approach have made it clear just how difficult this type of PTM analysis is using current technologies and how beneficial it would be to their research to have these kits and associated automated software tools available on a low-cost platform like Platinum Pro. We are excited about the potential to make PTM discovery accessible to all researchers and expect to provide more updates on the timing of commercial release at our upcoming investor day. Our third priority is to preserve our financial strength. While the capital headwinds in the market are going to impact short-term commercial results, we are optimistic about the opportunity to continue to grow our customer base using a mix of instrument acquisition options. We firmly believe that a large installed base of active users is a strategic advantage that will create long-term value for our shareholders. And we are uniquely positioned to grow that installed base now despite the market headwinds because of our strong balance sheet and the steps we have taken over the past two years to be in this position financially. I'll now turn the call over to Jeff to review our financial results.