Quanterix Corporation

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the Quantirix Corporation first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press the star one. I would now like to turn the conference over to Joshua Young, Head of Investor Relations. You may begin.

Thank you and good afternoon. With me on today's call are Masood Tulloo, Quanterix President and CEO, and Vandana Sriram, Quanterix Chief Financial Officer. Today's call is being recorded and a replay of the call will be available on the Investors section of our website. During the course of today's presentation, we will make forward-looking statements within the meaning of the US Private Securities Litigation Reform Act. These forward-looking statements are based on management's beliefs and assumptions as of today, May 12, 2025. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. To supplement our financial statements presented on a gap basis, we have provided certain non-gap financial measures. These non-gap measures are used to evaluate our operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business and our competitors. We believe that such measures are important in comparing current results with other periods' results in assessing our operating performance within our industry. Non-GAAP financial information presented herein should be considered in conjunction with, not as a substitute for, the financial information presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures set forth in the presentation, posted to our website, and in the earnings release issued today. Finally, any percentage changes we discuss will be on a year-over-year basis, unless otherwise noted. Now I'd like to turn the call over to Masoud Toulou.

Thank you, Joshua, and good afternoon. First quarter results exceeded our expectations, highlighting the resilience of our instruments and consumables business and strengthening our confidence in the long-term growth potential. While the quarter was stable, we have revised our guidance more conservatively to account for the broader macrofunding environment rather than any company-specific factors. I want to spend some time discussing our position in the market. Let's begin with a key fundamental. Demand for human health is not going away. And we're optimistic about delivering solutions to meet this demand. First, Quanterix's ultra sensitive protein detection platform is unmatched, empowering early disease detection, accelerating the development of new therapies through clinical trials, and enabling precise monitoring of neuro biomarkers in long-term studies. Second, we believe Proteomics will be a cornerstone of non-invasive liquid biopsy solutions, offering real-time insight into human health and providing a dynamic view that complements genetic and methylation data. Third, we are building our leadership in neurology applying the scientific and business expertise we've gained to expand our addressable market into immunology and oncology, areas where we are poised to lead in early biomarker detection. And finally, as long as people seek longer and healthier lives, the demand for high-sensitivity detection tools will remain, and Quanterix is at the forefront with our customers advancing the science to meet this enduring need. On to the quarter. In the first quarter, we reported revenue of $30.3 million. While this represents a decline of 5%, we recorded our highest consumables quarter and expect consumables performance to remain strong. Our adjusted gross margin was approximately 50%, and our adjusted cash usage was $9 million in the quarter, representing a greater than 50% improvement versus last year. Vandana will describe this in more detail. However, I want to emphasize we are committed to achieving positive cash flow in 2026 with a balance sheet well north of 100 million. Turning now to our pending merger with Akoya Biosciences. Nearly two weeks ago, we announced an amendment to our proposed transaction. I want to highlight some of the key financial details of this amended transaction. First, the equity value of the transaction is being reduced by 67% from $201 million to $66 million. The number of shares being issued is reduced by over 9 million shares, increasing Quantirx's shareholder ownership of the combined company from 70% to 84%. And we expect Akoya will contribute 37% to top line and 40% to Quantirix's gross profit dollars at 16% pro forma ownership. At the core of our strategic rationale for this transaction is the tremendous synergy for tracking protein biomarkers from tissue to blood. Diseases like cancer start in tissue and ultimately leak into blood, causing morbidity. Enabling our customers to track cancer biomarkers such as ORF1P, which plays a critical role in both blood and tissue, will open new opportunities for Quanterix to expand its impact and accelerate our growth beyond what would be possible as a standalone entity. Customers and industry KOLs are excited about the potential of bringing technologies from Quanterix and Akoya together, and we have already begun considering matched tissue blood biomarker detection solutions. Now, an update on our strategic initiatives. Our first, GROW menu, is already delivering results. In Q1, we launched four new immunology assays, building on the 20 new assays we introduced last year, which enabled us to achieve our highest consumables revenue quarter. our continued investment in this powerful product development engine is paying off. We are expanding our assay portfolio to reinforce our leadership in neurology, adding inflammation biomarkers, and initiating development in oncology applications. With more than 1,000 instruments installed worldwide, each with significant throughput potential, we are committed to maximizing their value through the introduction of novel biomarker assays. Our second strategic focus is expanding into adjacencies, starting with the launch of Samoa One, an instrument and reagent platform on track for release by year end. We expect this next-gen platform will break current sensitivity barriers, delivering up to 10x the sensitivity of our existing systems, with expanded multiplexing up to 10 plex and improved specificity through code-matched barcoding, all with an intuitive workflow. Samoa One will extend our category leadership and set a new standard for performance in the field. Our third area of focus is Alzheimer's diagnostics, where we're making rapid progress. Last year, we signed agreements with regional labs and hospital networks, generating $6 million in revenue. This quarter, we expanded our footprint through a new collaboration with ARUP Laboratories, our premier national lab. ARUP will now offer the PTAU217 blood test for Alzheimer's disease using our platform and assay kit, leveraging antibody technology licensed from Eli Lilly, and validated on samples from Lilly's Phase III Trailblazer ALS II trial. This is a critical step toward building a global infrastructure for non-invasive Alzheimer's testing, a priority that will continue to advance throughout 2025. We also anticipate introducing pricing for a Lucent AD complete test later this summer a multi-marker algorithm-driven Alzheimer's risk assessment tool. This test is currently progressing through four clinical trials with enrollment expected to complete by Q4 of this year. Now, a few final words on our current market environment and the three actions we are taking to succeed in it. First, as I said earlier, Despite market headwinds around academic funding and biopharma spending, demand for human health in the near or long term is not going away. And today, we're pleased to announce, for the first time, a new footing for Quanterix to deliver Samoa sensitivity at scale. In response to capital and resource constraints among academic and biopharma customers, we will democratize access to our technology. Starting in 2026, through an early access program, customers will be able to use unlocked Samoa One assay kits on over 20,000 existing flow cytometers worldwide, eliminating the need for a high capital instrument purchase. This is made possible by breakthrough reagent innovation. digital, ultra-sensitive Samoa signal detection is now embedded in kinetic, dye-encoded beads, enabling compatibility with a far broader install base, one that is at least 20 times greater than our own. This is a massive advance that we will make available after our Samoa One platform launch, expected at the end of the year. Second, We are scaling the success we've established in neurology into adjacent fields, immunology and oncology, through our GrowMenu initiative and the acquisition of Akoya Biosciences. Day one of the acquisition, our installed base increases by 1,300 instruments, and our addressable market expands from $1 to $5 billion. Liquid biopsy is expected to eventually surpass the market size of all other diagnostic testing combined, and it has become abundantly clear proteins are the next frontier. Our ability to measure biomarkers across the tissue to blood continuum will accelerate the pace of novel diagnostic tests. With this expanded footprint, we are executing a strategy grounded in scale and speed unlike other technologies that are still reliant on capital equipment sales in a risk-averse market. Third, we are operating with discipline and purpose. We are committed to achieving positive cash flow by 2026, supported by a balance sheet exceeding $100 million. Today, we are announcing a $30 million core operating cost reduction scaling to 55 million annualized savings by 2026. These savings are driven by operational efficiencies and are expected synergies from the ACOIA acquisition, aligned with our standalone revenue forecast of 120 to 130 million for 2025. Now, I'll turn the call over to Vandana.