Quanterix Corporation

Thank you for standing by. My name is Carly and I will be your conference operator today. At this time, I would like to welcome everyone to the Quantarix Corporation second quarter 2026 earnings conference 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, press star 1 again. Thank you. I would now like to turn the call over to Mary Conway, Investor Relations. Please go ahead.

Thank you and good morning. With me on today's call are Everett Cunningham, Quantarix's President and CEO, and Jason Faessler, Quantarix's new 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 today's presentation, we will make forward-looking statements covered under the U.S. Private Securities Litigation Reform Act. These forward-looking statements are based on management's beliefs and assumptions as of today, August 10th, 2026. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Forward-looking statements involve known and unknown risks 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 operating performance in a manner that allows for meaningful period-to-period comparison and analysis driver trends in our business and our competitors. We believe that such measures are important in comparing current results with other periods results and assessing our operating performance within our industry. Non-GAAP financial information presented herein should be considered in conjunction with and 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 that we discuss will be on a year-over-year basis unless otherwise noted. Now I'd like to turn the call over to Everett Cunningham. Everett?

Thanks, Maren. I'm pleased to be with all of you here this morning to bring you up to date on both our second quarter results and our plans for the back half of this year. We are revising our expectations and we want to be transparent about our actions and intended impacts. Our first half results were not what we anticipated based on market softness and executional challenges, even though our cash preservation efforts were better than planned. As a result, we are taking speedy action to address execution, as I'll describe momentarily, but this performance will affect our annual outlook. Let me start by addressing the specifics around what contributed to Q2's results, then share more details on our plans to pivot our organization to improve performance in the second half and in 2027. The revenue shortfall in Q2 was broad-based and roughly $3 million or 9% lower than the guidance we provided on our call-in bank. The commercial execution initiatives we began earlier this year have not yet delivered the sustained revenue performance For sales productivity, we believe this organization can achieve. As a result, more decisive action is required. We enter this next phase with significant strengths. One of the largest install bases in our sector, market leadership and ultra-sensitive, reproducible protein detection, differentiated proteomic sensitivity across both tissue and blood, and a deeply committed team of employees. Now to fully translate these advantages into durable growth, we need experienced commercial leadership with the acumen, discipline, and expertise to strengthen our customer engagement and drive consistent execution. Accordingly, we are making a series of significant changes in our commercial organization, starting with adding new proven leadership. As we announced today, Jim Guth is joining our team to help drive improved execution and our commercial organization. Jim was most recently Senior Vice President and Commercial Manager General Screening at Exact Sciences. Prior to joining Exact, a $3 billion revenue company acquired earlier this year by Abbott Labs, Jim spent 18 years at GE where he became President of GE Healthcare in 2021. Jim brings more than 25 years of experience leading enterprise organizations, accelerating growth, and transforming complex healthcare and diagnostic businesses. He's developed high-performing commercial organizations that combine strategic vision, operational discipline, and leadership excellence to create sustained enterprise value. We are so excited to welcome Jim to our team and work together to achieve our goal of re-accelerating revenue growth. In addition, we are reorganizing our commercial team around solution-based selling models. Given the highly specialized nature of our instruments, assays, and diagnostic offerings, we believe greater product expertise and more focused customer engagement are essential to improving commercial execution and reigniting sales productivity. As announced in early June, we welcomed a seasoned leader with over two decades of diagnostics experience, Jeff Albrecht, as Senior Vice President and General Manager of Diagnostics. As we transform this business into a critical component of our future growth, Jeff's more than 25 years of deep commercial leadership experience is already making an impact. Most recently, he served as Regional Vice President for the Northeast U.S. AQUA Diagnostics, leading a group generating approximately $2.9 billion in revenue. Lastly, our accelerator business was down significantly in the quarter, mirroring trends towards smaller projects that we saw in Q1. Therefore, we are creating a dedicated sales team focused on driving pharma lab services to deliver improved results in the second half. On a positive note, in Q2, this business produced nice bookings and shortly, I'll share some exciting progress we're seeing in Q3. We believe these actions and this momentum will produce growth starting this year and more meaningfully in 2027 and beyond. Based upon our first act performance and recognizing that the significant changes that we are announcing today will not produce results immediately, we are lowering our revenue guidance for 2026 to a range of $142 to $148 million. from the prior range of $159 to $174 million. Our team has thoroughly assessed the commercial pipeline and underlying in-market assumptions, giving us the confidence that this new forecast is appropriate. At this revenue level, we expect to end 2026 with a roughly $80 million cash balance. This would also push our cash flow break-even to 2027. While we plan to invest in our business to leverage growth opportunities, Our ability to conserve cash demonstrated by the higher than expected cash position at the end of Q2 2026 will enable us to be disciplined in balancing cash and investment needs. To that end, we completed the ACOIA integration in Q2, finalizing the ERP and cost energies, and achieved the planned $85 million in annualized savings. In summary, We expect these actions to support stronger performance in the second half and position the company for higher growth in 2027 and beyond. Our updated guidance reflects a level of performance that we are confident we can deliver without assuming a substantial recovery in our end markets. This confidence is supported by our industry-leading solutions and services, our growing customer base, and the continued momentum in our higher growth diagnostic systems. Now let me turn to the factors underpinning our confidence in the strategy and our ability to execute successfully. We see early, important signs of momentum throughout the business that we intend to galvanize and accelerate to improve our results going forward. We are cautiously optimistic about the green shoes in Q2, such as a sequential increase in bookings, leading to a book-to-bill of one-to-one, driven by orders in spatial instruments and consumables and Samoa accelerator business. Farmer Revenue also increased sequentially in Q2, led by Spatial, even though this market has been reported to be struggling recently. The number of Lucid AD complete tests increased significantly in Q2, albeit off a small base, as we strive to transform our diagnostic business into a more sizable component of Quantaris' growth trajectory. We were very pleased that beginning July 1, 2026, Members covered under Anthem Blue Cross and Blue Shield medical policies can receive coverage for qualifying blood-based biomarker testing, including Quanterix's LUCA-AD complete test, when medical necessity criteria are met. Now, this is happening in advance of our broad-based market access strategy. We're also expanding our assay development with the launch of an important emerging synaptic biomarker, and in spatial, we launched two new products. We intend to keep up the pace of new offerings. We're excited about Quan Terrace's prestigious election as a co-investigator institution in the PD Bill Program, supported by the Michael J. Fox Foundation. This grant-supported mandate will advance Parkinson's disease research by developing and deploying biomarker tools aimed at enabling earlier detection, improved patient stratification, and more effective monitoring Parkinson's disease. Importantly, it will also validate our technology in an important neurological area. We're also seeing momentum across customers and regions within diagnostics. We've dramatically increased the opportunities for which we are competing, and winning our fair share of these will further increase our credibility. We're excited about these opportunities, which involve accelerated revenues as well. Our partnership with Tempest, announced last quarter, is getting underway quickly. and we're working together on several potential opportunities. These, in addition to the clinical utility studies that we expect to read out shortly, should amplify our credibility in the market. Recent studies, including the ones that we shared at AAIC in London, underscore our opportunity to strengthen our commercial mode by demonstrating our premier positioning of an ultra-sensitive, multi-analyte algorithm for targeted translational work as well as diagnostics. I'll speak more about this when I discuss our diagnostic progress. Let me turn to slide four to provide some perspective on where we compete in proteomics today and how our core capabilities extend across the continuum from discovery and translational research to diagnostics. Quanterix is recognized as a market leader in ultra-sensitive protein section with differentiated and highly reproducible proteomic sensitivity in fluids and more recently tissue. However, we believe the near-term diagnostic potential of technologies is not fully recognized, particularly as early disease detection becomes more important across healthcare. As you can see on this slide, Quanterix is a market leader both in blood and tissue proteomics as the only provider with differentiated leadership in ultra-sensitive blood biomarkers and high-flex spatial tissue analysis across the continuum. We start with Quanterix Samoa. The industry standard for low-flex, ultra-sensitive, early detection, utilizing blood samples for translational work and diagnostics, bringing the key benefits of reproducibility. On the tissue side, we bring Quantair Spatial, which sets the bar for high-throughput discovery and translation efforts. As our primary markets in pharma and academia begin to recover, we are primed to be an enormous asset in enabling VIM to advance scientific discovery to the lab and clinic. Let's move to slide five, where we show our updated organizational priorities. We have three priorities. Number one, laser focus on execution. We realize that we must regain credibility, and the quickest way is to meet our commitments each quarter. Simply put, we must execute better. The leadership and structural changes that we're making are precisely designed to improve execution, and we'll be relentless about driving better commercial execution, especially in our core research sector. Number two, pursue our strategic roadmap. We will focus on reinforcing our in vitro diagnostics or IED strategy and strengthening our physician and ultra-sensitive protein detection. thereby continually enhancing our competitive mode to accelerate revenue growth in our core business. And number three, build our Alzheimer's disease diagnostics business. We plan to accelerate our diagnostics investment in 2026, prudently, with the goals of improving workflow, building lab infrastructure, and increasing our shared mind for Lucent AD with our key audience. Now on the next slide, I'll share more details about executional changes. As I mentioned, we have a seasoned leader heading up our commercial organization. This leadership and a solutions-based approach to customers is designed to drive greater accountability and focus across Samoa, Spatial, and Accelerator. Our Chief Commercial Officer, Jim Gu, will be accountable for commercial execution across the portfolio. and he brings a strong track record of success leading scale businesses and commercial organizations. We're also pivoting our Salesforce structure. We're moving from a largely geographically-based model to a dedicated solution-based execution, working more closely with customers across all of our business. We're confident that this model will generate greater customer success and increase sales productivity. and our team is so excited about engaging with new and existing customers on this basis again. Now moving to the next slide. Let me share you some thoughts on our streamlined strategic roadmap. Feedback from customers and collaborators led us to prioritize our Samoa HDX platform and other investments, both for research tools and for diagnostics, including new neurology marks. We're incorporating learnings and enhancements from our Next Generation platform into the HDX platform to guide overall development of the Samoa platform. And lastly, we're working diligently on our future 510K application for our HDX platform as an IBD in 2027. As I mentioned, we expanded our assay portfolio with the launch of the Samoa Ultrasensitive Immunoassay for NPTX2. An important emerging biomarker of synaptic function. On the spatial side, our key priorities for 2026 remain. Expanding our PCS biomarker panels for discovery application and also releasing new reagents for the AC platform to better support clinical applications. Towards this end, we launched two new products. The spatial molecular barcoding kit for the phenocycler fusion, initially available through an early access program, and the Spatial Spectral DAPI 2.0 for the Penal Imager HT. Moving to our third priority, let me update you on our progress in building out our Alzheimer's disease diagnostic business. We're creating a strong foundation within the emerging molecular Alzheimer's disease diagnosis, and we're excited about recent developments to support our efforts. We've developed what we believe is the best-in-class multi-marker test, which provides quantitative biomarker readings for all patients, versus 70% for the other available tests. And only 10% of our patients fall within the indeterminate zone compared to 30% of the competitive approaches. Our value proposition focuses on reliability and reduced ambiguity, addressing the clinician's needs. We're also building on the infrastructure to support the growth trajectory of this business. We submitted a 510K application for our single-site, multi-analyte, algorithmic, blood-based biomarker test to the FDA, and we remain in productive dialogue with the FDA. And we're continuing to advance our efforts to drive adoption and increase mind-share ahead of the FDA's clearance, including securing premium pricing of $897 for Lucid AD complete tests from CMS, and now Anthem insurance coverage. We have additional studies underway for use in payer outreach. Healthcare providers who treat Alzheimer's want a reliable, non-invasive test to drive earlier intervention of this terrible disease. We firmly believe that we have the most comprehensive Alzheimer's diagnostic test available today in Lucid AD Complete. And we expect to garner meaningful market share as blood-based biomarker testing continues to grow. In summary, as shown on the next slide, We believe Alzheimer's diagnosis and monitoring will increasingly rely on multi-marker tests that can deliver early detection and low clinical ambiguity. Samoa's combination of ultra-sensitivity, multiplexing, and automation will power Quanterix to be the lead test provider in this space. Furthermore, Quanterix has a first-in-market advantage with our Lucid AD complete test that is commercially available with established CMS prices Quantaris stands unchallenged in offering all the benefits of a multi-analyte immunoassay for Alzheimer's disease diagnostics, and this positions the company as a neurodiagnostic leader. Before I turn the call over to our CFO, I want to assure everyone that our entire team is committed to building a profitable and sustainable research tools business with market leadership in both spatial and ultra-sensitive proteomes. We expect the actions that I discussed today will start to drive commercial effectiveness in the second half of 2026, but more impactfully in 2027 and beyond. We're not waiting for better markets. Instead, we're taking thoughtful and deliberate action to propel Quantarix to where the industry is going. We're excited about our opportunities with a strong, experienced management team leading the way to a brighter future for Quantarix. Now let me turn it over to our Chief Financial Officer, Jason Faessler. You know, Jason joined us in late May, and I'm already so pleased on how valuable he's been to me, the management team, and the board already. Jason.