Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Quantum-Si Second Quarter 2023 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to Juan Avendano, Head of Investor Relations for Quantum-Si. Juan, please go ahead.

Juan Avendano

everyone. morning, Good joining for Thank us. you Earlier today, quarter for second financial June released XX, results ended XXXX. the Quantum-Si A copy of company's the press release is website. available on the

Jeff Joining Executive Jeff are Keyes, and me Officer. Chief Hawkins, Financial today Officer; Chief

events begin, those uncertainties making forward-looking securities that actual be laws. could we management of involve anticipated. statements or the certain I'd you cause statements remind Before that to to material from will These meaning within materially differ federal like risks results and

and uncertainties Statements risk in the release. Additional Forward-looking this information appears section entitled of regarding press our

broadcast factors, or forward-looking complete see the as Except For and obligation any This information statements. of intention a more law, today list by Exchange required revise live only and company's description conference company to with August of made X, is disclaims risk contains or any time-sensitive as that please XXXX. filings call update the Commission. the accurate Securities the

measures During reconciliation press this included most not EBITDA GAAP non-GAAP will referring comparable accordance also adjusted prepared GAAP, be call, measures to the certain financial is we these directly financial U.S. release A Accepted EBITDA. in or filed Accounting that today. earlier and measures in including Principles are of with Generally the financial to

will the With that, I Jeff to turn call Hawkins. over

Jeff Hawkins

an a XXXX. provide everyone, update and to thank Thank you, In second provide you financial we Good performance Juan. business will the today's and present for morning, for joining remainder call, us. quarter outlook our of

then open questions. the will line We for

goal every sequencing the is in to As bring everywhere. of to Quantum-Si a next-generation lab, reminder,

the power and positively tests development will biomarkers we ultimately of new accelerate health. unbiased will deeper delivers discovery Our the proprietary technology that insights that human and believe scientific new enable of impact therapies diagnostic research, proteomics

our us in that While revenue commercialization to second meeting we experienced with challenges from progress we the prevented some quarter, activities our make solid continue expectations.

to efficiently were features experimental their analyze customer data. customers for set and of important identified our a First, software interpret feedback that early

sample experienced preparation perform to and Second, applications implementation biological sequencing types, sample challenges range of technology. to we due methods wanted customer some with our the wide customers

to we Finally, as the slowed what as in updates like purchasing the the beginning sales we now items has process general color I these progress the during down of some well our provide at internal other experienced as from customers to each on would observed the extension share on our more of quarter. cycle year.

priority and corporate Our is XM chip. Carbon the first Platinum, to commercialize

of are Officer, to future the world-class sales, about important, experiencing potential is our customer commercial of their challenges customer underway. quarter, team been the Johnston, Grace build-out our we and members customers positive. a The closely felt equally as the collaborated organization the resolve technology Dr. Chief valued, with advance about the excited commercial customers well feedback building have research. team provided Under to very truly in implementation challenges support and they Commercial ensure has supported the our quality and the support. Our of team across some Despite leadership our commercial and marketing

that about that build building, lasting is leading excited confident team the with will we are globally. are We relationships Grace researchers and they and positive

Platinum in gaps customers mix quarters largest of second being segment geographic are standpoint, interested ahead strong of their approximately of From funnel today. customers the Europe. expectations research. biotech exploring This market change continue segment customers with and opportunity result sales clear, professionals. prior can the the is marketed the represent a a largest well from XXXX. having also funnel Our up impact is market is is in it U.S.-based of from funnel technology Quantum-Si's academic tracking positively customers geographic U.S.-based and our is made more for in sales technologies, From XX% addresses the in and to perspective, how XX% currently

marketing our to sales have out drive on of with earnings our actively technology greater grow team. awareness were in expected efforts shared we and we building calls, previous As that funnel. And our launch marketing we team to commercial outbound place,

made the belief In first been and team proteomics the hires key in builds marketing need in significant these our second technology The campaigns our reinforces our quarter, market outbound we feedback from implemented and marketing commercial campaign. unmet early a positive our market. has that

of customer feedback analyze at efficiently stated features customers the of experimental important data. beginning interpret As set software were that identified the early to and call, a for their

customers to with And our work enhancements. enhancements of upgraded I define early did requests report to team team software needed. team the pleased Our an job marketing what who've These excellent on these an were delivered version am clearly product the got to in July. software to communicated engaging were straight

feedback new the and has The version released very software date our positive. been to customers, been to has

our of Additionally, purchasing second a process. observe we to customers' during the quarter, general capital lengthening began

capital entered continue at customers' quarter process sales purchasing instrument along pace. have the that moderated the move We that to a during

ultimately customers We will experiencing we these they capital be that have not to that are are but this slowdown process being no general. believe advised approved purchases in reason by our

to We continue believe be in environment, that customer macro a adoption. having low-cost current instrument to the advantageous will

with Our innovation. lead priority second is to

customers sample the some sequencing we technology. types, During implementation range preparation the and perform to biological experienced second sample challenges wide customer with to applications wanted methods, due our of quarter,

of dug and that programs R&D deeper our were workflow. gaps to we determined full in each optimally the terms of our capability strategy and addressing areas, proteomics we these core and had of As current aligned scope not complexity into the

As and current capacity. programs our strategic such, R&D of design a organizational review we R&D have initiated

quarter. the the process implement necessary during near current completion expect that the to changes of are and We

thus is While not thinking some share that like to and process I far. complete, yet taken our would initial actions of

extensive in other technologies, biological preparation The compatible pursuing message to is with is and solution prep types and proteomic prep select instrument. been have sample the they area proteomics required Consistent sample of this our technology. level automated address use. optimization with them some One downstream Carbon, often range type to we detection make sample method detection sample sample is customers of and utilized the

reduce help sample solution could an protein term. best streamline Platinum it our and is of workflow the end-to-end sequencing for not our platform, and instrument absolute be Carbon variation the requirement not long While may prep

the put have potential There beta assessment evaluation options we we workflow. and us launch are resources of core on of case platforms protein hold of available our end, this address an liquid our commercially testing handling fit and this internal and an To the chemistry instead to prep be business customers better sample complete allow or focus in while Carbon on equal the competencies sequencing. may of and customer that for to portion

our in core like in be strategy prep, we go-forward our workflow consideration protein investment address look development and consortiums sequencing sample automation will applications. Another will focus of to and to greater therefore, customer more or specific items drive capabilities the product leverage industry and to sequencing, partnerships in

Finally, we are ensure success, resource organizational areas to such critical looking to we as most closely our our design that the applications at fully development.

internal five this XXXX, we deliver sequencing a technology of resulting the capabilities in some us the the During the will of throughout were recognized our the improvements The R&D is end new to for and protein our development able cadence additional believe of successfully of also applications steady second that once support that improvements quarter, pipeline effort. before while XXXX. we complete, deliver technology. greater realignment to resourcing our notes product of a of efforts We ensuring redeployed to releases that will position resources application outcome demonstrating need

projects to our in future. drive our financial that ensure vein, priority third improving while significant maximize programs that to and a In improvements announced base this is of Our strength. longer-term across investments into R&D of provided shareholder continuously preserve remain runway. have We to utilized the company core customer committed maintaining level of to financial that objective been continuously have investment the pipeline the our broadest is strategic prioritize we intend evaluate to review one to value in will We capital fiscal the the is to a discipline. technology all our appeal the

Finally, in-sourcing position continuing goal outsourcing These through and chain enhance manufacturing supply initiatives we front, initiatives lower secure in to clear up. of the to continue the have we several areas as to are versus our margin on costs, including our strategy. procurement, our and the operations work to automation scale

a always some In market novel involves into technology new in the road. closing, launching a bumps

revenue remains attainment. ensuring a focus Our commercial near-term early that long-term to seeks prioritizes the on we strategy and execute customer and success balance between a strike experience

philosophy, we of a continue controlled the year. the rollout this with expect remainder to for Given

closely customer team implementation feedback We customer time ultimately accelerates efforts. will determine this monitor That new will continue frame. throughout metrics success implementation to how commercial the data our and

financial our turn now Keyes to call results. over review the will Jeff? to Jeff I

Jeff Keyes

you, Thank Jeff.

First, board like be I am say to I Quantum-Si. would to on excited how with

and capital for delivering team experiences aligned all was leadership same from our ensures in discipline our way in to capital us where help best and time, paramount. and growth rapid focused financial that draw and customers. leading innovative solutions the extreme through existing excellent disciplined through the best continued our runway. the lead a utilize to and a of an a most of series on come I are personally companies background of rapid have change commercial We I growth, at plan we to while commercial these upon Quantum-Si financially maximizing approach execution

revenue the that $XX,XXX second revenue second of QX quarter, margin XXXX We XXXX Revenue kits. the in was we anticipate $XXX,XXX, financial XX%. the which revenue recognizing gross the our profit units of these consisted quarter had end second discuss Gross two our in Now and QX. At was from was and let's in Platinum backlog the was in were and quarter details of results. units associated consumable deferred. instrument of on

instruments somewhat also be sales. timing those through $X.X and decrease expenses the second million, $XX research marketing compensation XXXX in sales large we by Included of and development $XX.X ramp initial million decrease our was to and and future impacted Our $X.X primarily in and gross commercialization commercial lower stages stock-based team. to is compared second due operating margin as The be million decrease quarter million we the work consumable the our by mix a higher lower of were comprising $XXX,XXX expenses. quarter versus remaining with of and SG&A the XXXX. expenses, in expense operations will a for $X.X of offset expenses of near by in administrative up GAAP million variable as the amounts general

second table million press our in to release EBITDA million compared second EBITDA XXXX compared the XXXX was loss was loss $XX.X $XX.X second quarter of to of reconciliation a $XX.X to a in loss of of million earlier quarter is quarter GAAP filed Adjusted of Net the XXXX. provided loss million in second quarter XXXX. the adjusted of for of $XX.X the The for net today.

As XXXX, XX, of in equivalents marketable securities. investments and and $XXX.X million we cash in June had cash

Our as rest guidance includes have enhancements that towards for XXXX capabilities appeal. approach the resources customer we align of feature the broadest R&D execution controlled commercialization our and our

Finally, I XXXX. ensuring that capabilities and am expenses non-GAAP and reiterating all for have existing expected compared marketable in commercial plan to be cash to resources our flat securities equivalents that cash, XXXX, investments our execution will we while provide our into the still are and operating runway

the Hawkins over call turn closing for I'll Now remarks. Jeff to back

Jeff Hawkins

Thank Jeff. you,

also Over the review cadence strides position throughout quarter, end R&D of commercialization we will improvements build-out before feedback and Platinum. and of as the believe a made thoughtful we improvements our of pipeline support the team last releases ensuring commercial valuable deliver us of of controlled the continue a will outcome additional while from steady better strategic our of have technology our We XXXX. in of XXXX, customers received to that great product

be fiscal capital on to most, and capabilities technology the level Going continue discipline maintaining forward, over use laser-focused we resources. of want while of applications the delivering high customers will a our

please open questions. line the Operator, for

Operator

with first The question Mikson [Operator Kyle Instructions] Canaccord. comes from

Kyle Mikson

revenue initiatives of in like Jeff, all some you been cycle $X.XX some guess, sales why makes to stuff. guess, quarter, like, almost number these comments around what's well? put could share like in backlog orders on of I last quarter million was I But appreciate it the any you're the obviously, and happening commentary why just there demand weren't orders I in then $X.X the, orders happening the in least the guess be and able and million exiting now generate last kind likely those of quarter the So interesting. than given just quarter? into on $X.X up guess, doing revenue sense orders, exiting like than as the revenue lately that kind the in the why of going But dollar and you And revenue what's going software of maybe, less convert XQ forward last launch. like pent-up million quarter orders. in to the where I came at revenue and quarter early implementation Jeff, Again, Maybe you exiting or is second like more

Jeff Hawkins

I'll your Kyle. the part -- the question Thanks, take first. Yes. of last

So the events With Keyes would we as third two the quarter Jeff respect exited to during the quarter, in expect with sort to in impacted revenue. said, quarter. the we that of backlog instruments that convert

of As and it meaning we react type of using customers. in we experience the implementation base a these to things, installed situation deploy sample a I remarks, challenges given to had help and to just prep of said do that we we end provide we the experienced they're in the expanding or applications our keep some prepared where time, lot real unable And want team a needed. sort with level validate those with the validate of method up support sort in we're don't sample to customers a when

had we support could front. level the provide ensure we really commercial high to on our front of activities implementation sort measure on to So the of that

Kyle Mikson

by I some safe be run I comfortable way. or use lot is word be like kind to the that's issues, end like at year, And the yes, I'll and quarter you'll are mean, helpful. the that that's growing by again, just going like happen -- in second it done of I you'll a sounds of at they're year -- along -- end out the the kind 'XX I by be you pains, the making enter of that of solid of bumps these the the say end or you're mean that with? the half guess changes of will and Okay. quarter. will to but it second a are Those the guess fourth least worked rate the of

Jeff Hawkins

to I the as to people and optimize. for deploying more we'll strategic in I learning XXXX. and to smoothest even and to We're a the or to have with in to in applications mentioned can technologically I Kyle, improvements of customers of finalization enhance the our go to continue every sort assess We're implementation There's prioritizing But mean been review. like want them expect with continue up customers R&D that. the area do of of sort lot prepared the that, the is goal evolve we'll product the that's open here the capabilities in to time sort think see or day Yes. headroom we of for that that be we way to in future. us a do help more, We're continue the enable we'll expand invest even activities, and foreseeable further real saying remarks, the fair it. that, they'd to these the lot a the various that market.

Kyle Mikson

about, like and Maybe of revenue some second the I welcome sort of -- second on that this think Hawkins, orders and and Jeff about think utilization, how and could and how provide last call. modeling. you not Okay. really anymore, and year. And to and could some year it shipments to of maybe that's the inflection the you sounds potential quarter Keyes be provide thoughts as you half well a thoughts half expected like in there just talked but about shipments as we -- things I you in could revenue then guess, the in guess Jeff

Jeff Hawkins

Yes.

Jeff to add. any like Keyes and color he'd start can I'll add So

with Keyes, the to given going you the revenue of place controlled remarks, might prepared add expect there a second That mean Kyle, to the a we're the don't in but of As in second in the I a launch mentioned controlled anything half sort sort the that? not some keep be acceleration Jeff half, sort the want more launch we through of the to in year. end in much doesn't growth. quarter, rapid in that uplift of

Jeff Keyes

uplift might be next think with to and expect about to going of see comments that's the have deployment, of consistent continue this we couple dependent quarters, ramp. controlled this would up. it as some that that the we our think the through I realignment No, interact we to R&D I But customer year. base over we my with Jeff's but process, and work sums going are on for thoughts them the we're how rest

Kyle Mikson

feel for Carbon I was not that. Okay. that for like were And here? sounded review? higher density, were about Jeff, this end chips confirm how critical purpose like were the like maybe maybe launched outcome overall, successful a that's curious deem development of orders maybe the of And then kind the guaranteed just certain like What game And on I that underlying and the on of bundle? as -- in they now. you there Carbon Carbon, realignment, right would just mean that? R&D on was affected. that. that any to not being probably like the contingent I'm kind just totally I'm you a was strategy strategic And some it with would what like perhaps like just kind can then -- And what's of again, now.

Jeff Hawkins

me Kyle, I let if miss me know. a Yes. those one, take shot let at

the front. on Carbon First,

elegant, methods higher sort of you of development are and way of that Really, these liquid were but and to has lines is about didn't or platform, So flexible more that types the all no upon to sort sort handling of best a commercially assessment of is Might approach methods sample lot available deals sample were any of it. that -- We more have very pipeline which to to cartridge-based it the range open cost Carbon. of different sample adapt of the sort Carbon sample of was as an can and sort described Carbon prep is there contingent there we're one a in the be seeing. time a types be solution, bundles platforms. of

you the We're driving is seeing lot totality looking So of What stating program, the chip. and and only for potential at And that's that the It's in investments the a investments sequencing full Kyle, on mentioned, the unlock that growth really we're existing R&D evaluation really is expand is we're potential reviewing, what about it's hold. the coverage that. Platinum existing as additional of that right that obviously of the like enabling though, other now and that's really enabling about. we as there's And consumable. applications. device that platform things about capabilities really

core that's really, areas then that throughout that of that sort have that of a release we year. have investment of into allows generate sort we're looking it. right to end a and really adoption the So us drive of consistent game how And that is will the those ultimately at level improvements we given the process R&D

endgame really mind. the that's in So

Kyle Mikson

all are good Yes. that the at there. on is Or mention all, it manufacturing? whatsoever things that when And questions you really you pretty on so you go far? chain, much ask comes I a touched Can to that? supply bottleneck didn't mean, to like I just about but

Jeff Hawkins

was second way the the a results chain. to not any manufacturing concerns No on in quarter. Yes. in bottleneck supply And

Kyle Mikson

biotech, you progress. I nonacademic types, your good increase comment. success And early going there, closing of all kind to it's are that of customer and or hear marketing crank go, When outbound kind there, sounds the it like to kind on that'd to new your expanding footprint Look, kind then kind of a in just early going about Awesome. any that's maybe maybe mean, positive of Okay. you're be markets like you like think of footprint I like systems maybe up, thinking interesting after unlock hear? just

Jeff Hawkins

is way a it's mix. commercial The for approaching, marketing team thanks question. Kyle, the Yes, that

around And specific QA/QC. Sometimes academic within a you're you campaign mentioned, of industrial campaigns as unlocking of research the other environment. will be times, look diving with for new really segments, specific more types with in perhaps a to the settings Biotech, user type antibody for applications

So really, the outbound marketing very programs are targeted. very,

where we drive market. that different many So them across really we're up these in run to the we'll as that lines to well areas try specific seeing demand of success

Operator

B. The Riley. Yuan question next comes from Zhi with

Yuan Zhi

quick on Kyle's a follow-up question. Jeff,

have front. from the on a the if you requests have question. customers or since potential mentioned the implementation Can test changed in And XQ? You challenge customers I comment follow-up launch then

Jeff Hawkins

what their sequencing up into biological and a protein Yuan. using -- requests full kits from samples I analysis The ranging they that chemistries. it a from mean platform ultimately, and more and gel a there's might sample through on and that through laboratory work the someone isolate get Yes. haven't workflow to from they whatever broad methods. you cut the everywhere is, on is the immuno-precipitation sample of our and customer's changed, a very type who out is in selected of people band just range and sort prep Really other

difference any It's samples set Platinum methods there's that a really with unique to not in somewhat of closely to work it's front each have that optimize just has the the customer prep we in instrument. the on of sequencing them So and request.

Yuan Zhi

you poster proteoform was clarifying that presentation there. you identifying challenge is, for had Thanks the the presentation? My protein maybe can challenge other question and about in on it. ASMS? sample talk What in Got that technical at

Jeff Hawkins

how well spec platform does to perform that share users as around understand as information really user. technology our ASMS but spec really for the mass really affords who also workflow, the of to capabilities our to Yes. help the automated technology, a of are group in mass analysis was comparison our not poster some At them that a that of the conference, demonstrate only help users

an community. study for in was those sort -- spec and data mass users the So of it educational comparative that really for

Operator

Ramakanth next question Wainwright. with Swayampakula comes from H.C. The

Swayampakula Ramakanth

taking you morning, Jeff. Appreciate and Good questions. Jeff my

specific flagged universal? initial have it So, to current Jeff, the sample a this more your Were issues that during they is customers of types, launch. some

Jeff Hawkins

they're just sample is the as challenging. say that the this looking sample how really specific much once, at is about wasn't impure and for they how sample. type a I versus was preparing it as specific type way of sample sample sample, how wouldn't It proteins combination that that Yes. many a type are it's pure

Swayampakula Ramakanth

in July. software it was upgrade correctly, Okay. in then released, I And the that if it terms you of heard

you handle So date? was have think And upgrade upgrade at able to issues the the to that do hand? how to responded that customers

Jeff Hawkins

Yes. Good question.

So you were July. correct. acid attribute the generating version I looking that with would additional that are the the released We in software were And some key were for customers level they amino say technology. of visualizations data at the

So amino how our of things aggregate, understand customers that, are both of protein level the the and level. given allowed data the sort they the amino in that were really showed did generating software acid visualize data information, really really the paratopes this of at peptide what to the giving and protein. in indicated And initial version peptides, to UI the enhance was peptides to it, a ability new really acid,

in has again, So change think interface. They're And been our and software users of more feedback, enhancements user out software. moving July, to is incremental to and the this it made somewhat we take rolled of will make on we'll to sort be place customers the positive. big sort improvement needed analysis continue the But transformation overall side, with of we that in that I very forward. to that very changes as we feedback the The July. from those more get with happy

Swayampakula Ramakanth

lengthening you my Okay. at is labs. stated. Is your cycle all sales some this really -- more from last because waiting than ensure academicians Or it And of this it? more that this and point, involved on getting This more the this accounting Is grant? with question. associated academic then most research use of for in the Is are of the the customers that to quarter dollars fourth people the that? other is just

Jeff Hawkins

Yes.

not that procurement because Grace a instrument approved. of Okay, commenting hasn't is, the going and prepared of at there's scenario period it's our [indiscernible] pending cycle given that expect Really, we're where get held remarks of experience in the to of with on is we customer, there's take other some we're through that been $XX,XXX, sort an members up the hearing grant what and some process. if that to a commercial team would out instrument enters time being

little seeing is customer, through process, we've buyer And approvals the order bit slower. is and that moving as what of the that through had we're gotten fast procurement internal the moving the that sort It's process the procurement sales and financial or of purchase as not goes seeing. just with a we process the of technical cycle more accounting into side and been

selling instruments would given a life capital pace reason that believe our collective come in no at a the through. again, just won't equipment we stage to will in saw So we expect It's be space. this of science than experience in approved those at QX than and and that are cycle that ultimately sort moving slower of sort pace slower

Operator

questions would back show for turn I to I Juan remarks. closing this to now at time. call like further no the

Juan Avendano

progress look for in today. forward updating earnings Thank our next participation a day. quarterly call. Have to you We your all you on good the

Operator

for you This participating. Thank concludes call. conference today's

disconnect. now may You

Quantum-Si (QSI) 7 Aug 232023 Q2 Earnings call transcript