QSI - Earnings call transcript Q1 2024 | Quantum-Si incorporated

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Operator

Ladies and gentlemen thank you for standing by. Welcome to the Quantum-Si First Quarter 2024 Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Katherine Atkinson from Quantum-Si. ahead. go please Katherine,

Katherine Atkinson

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

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

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

Additional appears Forward-Looking entitled information risks regarding press these and in the release. our of uncertainties section Statements

Commission. is today, May complete more of see filings the a broadcast This the accurate For the contains live company's Exchange with conference information time-sensitive only and factors, call description as that of risk made X, please and list XXXX. Securities

to or revise Except any disclaims any as intention statements. the company required update or by obligation law, forward-looking

also to reconciliation directly of U.S. financial financial will principles included GAAP A generally GAAP. we with press is call, to filed the the or release measures be in accepted accordance measures measures this certain that these today. not in referring comparable During accounting prepared are earlier most financial non-GAAP

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

Jeffrey Hawkins

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

We for will open then the line questions.

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

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

will of for the These and wanted launch now accomplished full our priorities build to opportunity take to execution share the in year. priorities upon XXXX XXXX. our guide we throughout corporate I what this underway, With Platinum

our to an innovation first well deliver road for follows: those XXXX progress mind, like the financial our Our as strength. With on accelerate in map are priorities an provide for commercial preserve update as as provide XXXX. now corporate outlook updated and on quarter adoption, during priorities would I

Our is commercial adoption. priority first to accelerate corporate

kit our call, commercial support sales distributor also network. discussed on commercial began preparations training finalizing on of the of force our which executing readiness The we were rollout current members direct we to included preparations early our initial of launch. our in sequencing of last As training launch earnings the full and new our to I The and included the Version and customers, X February.

today, of to migrated I to of As as all moved all into these that items complete, we pleased customers XXXX. of the end sequencing of have commercial March the on Based announce Platinum have being successfully the full X version launch kit. am

have we of expect revenue quarter-over-quarter as through Going to we XXXX. forward, growth progress steady the remainder

to our and success infrastructure, commercial monitor on customer and a scale-up commercial execute continue will distribution leverage that both We closely to rates data our direct XXXX. thoughtful throughout of performance and

closely with work opinion adopters help gathering to our feedback, key of our to future for develop technology we to and will and customer addition leaders In applications continue technology. routine early define

initial where service market, European of commercial focus we a reminder, a we and mix partners. market our use a a the In In currently and will direct approaches. model. direct EMEA, and sales sales involves mix direct the of distribution As strategy is with U.S. distribution operating are our

which and our Western individuals approximately direct will marketing, United we commercial of point serve the have in XX which encompass of broader the Japan, support market. strategic and as we sales, our first addition, expect a consists States in APAC service distributor end In based At team, entry into partner Europe. the personnel quarter,

been always funnel strong. number Customer of interest has terms growth leads in in our until initial of consistent we of From differentiated launch every observed in in XXXX generated sales have December our our the now, uniquely technology month.

conversion leads these revenue. instrument and As we focus into our forward launch, move with the placements will of full be

team expectations team to in our to is and monitoring support full of closely line we will going a as of and phases current approach forward. grow commercial we the launch Our metrics variety with commercial be size the early shape commercial our look and

changed been in From research a to have first quarter, date our the way. customers perspective, In academic a largely market segment positive labs. that

to and We the we in government that secured both are our first market report pleased pharma customers segments.

these interest other in X These broader we market are success addition first seeing a biotech in stories segments emerge to and X underpin applications. commercial

research academic customer customers but will technology a segments see well. market are believe in additional these pleased us to continue forward to our remain for key We adopting labs going as

an seeing application standpoint, application From we interest increasing is barcoding. one are in

the proteins, who of numbers generate For desired customers of need barcodes selection screening and characterize to protein with used large to and characteristics. proteins be streamline can

biomedical market applications including pharma, span research, industrial. coding could segments, and potentially Bar multiple biotech

customers, Platinum highly simple, to offers once. of at screen specific these For way cost-effective a proteins and hundreds

the pharma, to across our the growing types. will broad highlight While biotech awareness need we lab be market an and capabilities, market is government range our customers of labs, in with technology in and early of that set ever-increasing technology segments adoption unmet believe stages an does and addresses interest of of it

we sciences the process. sales companies basis, by themes and sales closely and information regarding shared macro market a capital being broader On the cycles across monitor life

a the sales of process buying general, decision. that of longer we X-month cycle to hands-on X those slightly into In cycle expect approximately it as future. is evidence the to continue cycle technology our sales months to X- in evaluation a may some our making segments X trend of Early a sales with before a indicates customers require

has capital the market Another theme been broader in in in market the and general within China budgets securing specifically. challenges

versus have price device point technology us instrumentation. and the our the we these competitive of date, issues To seen value affect not given Platinum the offers

offerings carry list $XXX,XXX has current a from many the ranging instrument list Platinum in price other whereas space our $XX,XXX up or to reminder, a more. our of prices $X million As instrument of

so With any in currently do market. discussed science broader are we that exposed respect of the life companies in we being not market, the Platinum other by headwinds to to China, not sell

commercial are execution growth. underway, laser on ensure full commercial consistent we the quarter-over-quarter With launch to focused our

commercial We and will closely footprint service support. expand the ensuring success look all receive highest customers to responsible monitor while metrics fiscally and way, our a level of commercial our in

It our said is advance have goal simply their place will As secure to research we our to to technology come. instruments. utilize years not who customers for is before, to

be while evolves, success. and nimble customer process this maximize approach our we adjust revenue to growth will As ensuring our

reproducibility is innovation includes across map. sequencing and acid road we the approximately February, our threefold launched deliver cost per a our version runs second to in of In on recognizer, amino X introduction priority new Our kit, reduction an amino which acid. high

existing I am X Overall, version the all pleased transitioned feedback X has to kit version customer to the report our kit. been customers that the positive. have we successfully for very

time Last a proteins a of minutes peptide in our This present customers XX week, software. a software sample in to we version analysis and identifying XX% release increase the unknown new XX X% precision of a in offers alignments, of analysis new the from announced of the an version Platinum XX% in minutes. of number primary of reduction a increase average

million ability made details the our continuously to about As sequencing model The to up and kinetic part nearly database, expect train X of the on from of shared the proprietary we to insights next-generation technology, opportunity improvements even software kinetic further make represents also generated kinetic parameters. the today upon data analysis some continue to launch, protein significant model to unlock deeper chemistry. a sequencing sequencing our we building

now our Turning version to X kit.

team of to customers QX development fully deliver XXXX, is the end in product we this to program, as Our previously expect updated this by engaged kit our and communicated.

too promising, a but full development latest to the still of details early meaningful is over expecting improvement kit this version and It X performance are we current results very kit. discuss update, are

or use is new planning goal day every customers The level products the happening of get that long-term of in is see. the execution. important software of our project to be new Delivering R&D is we day pipeline, have every our innovation new to a and can success strides terms Equally whether significant across kit, a to exciting teams our sequencing instrument. innovation our made

the them in execute now it out the to flow recently, more to of X the on alignment impressive level the kit Looking reliably plans Version close targets this It planning build set customers. that X at delivering continuous back is project, and to is start and version the team such products kit project rigor is see of at with program. our a new execution and critical R&D of

next-generation doing advance protein our every and foundation confident I'm personally the grateful of proteomics field have with teams that I'm for R&D place to day are we sequencing. the work in

Quantum-Si we oral Finally, a use Proteome poster library presented use protein where Organization regarding of presentation second the describing and applications sequencing. alternative customer a in an prep detection U.S. develop attended March, Platinum for their gave of Conference their to customer Human Platinum for next-generation PTM a

webinar historically various in nature and next-generation protein characterize Chris to interest in a industrial our Mason Furthermore, and difficult naturally organisms applications. presented of about using Dr. February, in set late extremophiles, sequencing understudy that exist

continue will further benefits increasing of that conferences XXXX, present expect of throughout at We awareness to work their Platinum. the customers industry

is third strength. to Our preserve financial priority

our fiscal on continuously of state each improving calls, remain our we we As committed to discipline.

activity completed, the the are Now clear. first that have of results we quarter becoming

results year-over-year spend improving our the go way. utilizing we the to but ability up. shows funding effective operations market, will details how on overall most Jeff We have new believe this, focused these ramp to while while and reduced capital products more commercial our our it are deliver all our in we in excellent, are into

adoption we of with We steady to our need products capital balancing are to of new customers. goal a preserve appropriately Platinum that are cadence maximize and to the commercial confident deliver

of represents Delivering foundation on growth the goals significant will for advantage to these X our come. be a that strategic years

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

Jeffry Keyes

Thank you, Jeff.

our Now revenue kits was our quarter let's profit consumable and first the of services. consisted details XX%. XXXX the which first Revenue financial $XXX,XXX margin Platinum was in of of XXXX related was Gross discuss instrument, gross $XXX,XXX, from and quarter results.

stated our be future also stages I've and impacted margin variable commercialization percentage As in will gross by consumable the work timing near somewhat be before, mix of sales. and we versus the our instruments through will to initial as

near acquisition adjustments accounting term in also will underlying to back by impacted of the Quantum-Si. costs margin dates pre-commercial to stage any and inventory the Our that be

items, quarter XXXX, the or say that no through inventory As for XX% were the value in we utilized are first of initial includes we margin mix still a for our quarter margin XXXX to percentage provided for that can have lower these to prior first benefit dates at guidance but I the what not working commercialization. carried approximately a is back

work through the course negative, our positive we'll and that We and things these expect variances into margin will more year, both as of point these I evolve. of the over out them

GAAP first XXXX $XX.X total to compared operating in million of XXXX. of were expenses quarter first in the million $XX.X the quarter

While first for operating of were million XXXX quarter XXXX. for of adjusted $XX.X to expenses the first million quarter $XX.X compared the

in alluded R&D XXXX the press expenses As cadence time was our R&D same of our today, place we in to to at a of customers. to delivering several including we our while enhancements maximize result our initiatives steady in in reduction release realignment the efforts the put year-over-year efficiency, operating capital

G&A spend only in increasing R&D resulted and million to $XXX,XXX. operations, by effectively has fund this by commercial swapping in SG&A lower $X.X overall Specifically, dollars

quarter $XX.X in first $X.X discussed, offset loss The in expense the first decrease related for operating on quarter dividend million net $XX.X unrealized marketable loss compared and gains securities. to was XXXX changes in XXXX, partially by of the the to million. Net was million decrease income previously primarily of of reduction a

primarily the the for $X.X of quarter expenses, first negative improvement million EBITDA aforementioned in R&D-related was million in This compared negative to an to XXXX first million. improvement operating reduction Adjusted of the primarily $XX.X in XXXX, $XX.X was quarter costs. of related

to million $X.X risk. in XXXX, Near interest impact structural to made These investment million changes, yields quarter income our minimizing the increase the end the along XXXX, $X.X produced rate an in first of $X.X with XXXX, compared maximize of the and increases, of holdings of first some while we changes dividend of quarter to of million. makeup

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

million. less million between We million million, are usage and less to our revenues $XXX XXXX also cash which guidance, be $X.X includes to and expenses operating $X.X reaffirming range $XXX net adjusted than financial than

marketable expect still equivalents and we cash will in Finally, XXXX. that cash securities existing provide investments our runway into and

call Now operator will to to I questions. line the turn open over the the for

Operator

HCW. Swayampakula Our first with Ramakanth comes [Operator Instructions] question from

Swayampakula Ramakanth

quarter. great from it was looks RK Wainwright. is H.C. to like hear. lot of is all a A on which This fronts, It progress excellent

launch, -- in launch top I'm you I you how from the understand the know trying So launch full seeing just said to commercial in starting now. end are did March since terms late But only you the to the quarter. of of off the progress line,

guidance it's also full see you're year to revenue on good And the to your side. that holding

give So of would color you if you of us kind as that to gives you bit guidance level? confidence that the a can little what reach

Jeffrey Hawkins

Thanks RK. question, for that Yes.

the of I are think March of commercial correct. at launch first you started is, the part end The right that full XXXX. tail

the early in we're So of innings that.

partners about quarter. talked here and reps new sales mentioned had we today, in on our first were a As the and series call last had distribution we of that trained

up speed. coming folks up the So We're are that of with coming speed. to those satisfied to rate

of X step sort a the first and of more the to able those back us $X.X QX the in in But be from then given up need terms view of half delivering their confidence we revenue. we in of million. revenue sort general to company, And the then $X.X be in QX curve do or folks total, accelerate X that of sort as with executing on And modest terms fully of our we'll them really in many months are shape of gives the with of more. where to million guidance of year

and go scale into RK, commercial launch. do thing commercial the we in we that we year, to of those at here the other see on is sort to options will more of and some that The look we'll based add, the throughout as beginning throughout early signs I'd relevant QX that's team of up this full QX

Swayampakula Ramakanth

you're and of the just segments the also press you're the government remarks, then also being the areas the talked in terms about you prepared industry And selling. selling, where release Perfect. where in in and

sort So we to talking government, government a get about? of easy was say segment institutions how trying when just in we it some you regulatory it. for are labs? itself. feel that Or that talking to about I'm a is it are And penetrate

on know is in something industry, of And pharmaceutical a terms Because labs. one-off? focus the are in lot of you putting this of academic I

how So I'm into about should excited wait just we understand we Or get think to trying get to overly trouble. this? guys and should you

Jeffrey Hawkins

certainly about potential are early segments. the get overly too to these probably excited. it's Yes, We long-term optimistic in

question of I So think parts. into couple if your I a unpack

mean what we mean when that are by agencies. So by government labs government we that accounts, run are say being regulatory entities. We don't

it a it that of like So of military, be other funded they national into be and branches entity. could But be fit -- they government-run labs, that could a the are mold various facilities government could that.

how is it To answer on hard to your penetrate. question

innovators was of biotech. I similar think who could of academic to going and the some with the focus would I see that to you how real capable is apply what the it, those you that's way and it in RK, would and and pharma KOLs really early be work to We very because adopt days they was had the characterize where controlled talked primary it. launch of our technology

want that same longer that's the we'll in beginning hands-on that time, in But and we traction. building segments process at these reasonably to bit say day, customer of some a pharma our segments. they mentioned the biotech take that At little get bit were initial We evaluation. relationships the remarks just that a I segment. end to other of would that, in a momentum do common

one-off. say, is don't X. these this be longer pleased only a sort we And lab, of pharma definitely that going believe customer the bit have. first academic cycle of that This a it's have not we to is than, to an sales while a gotten we're So

those But then to I think in areas be scale more there'll ramping and technology there's a a time over to time penetrate, to also apply up scale the customers time.

it's So think X-stage adoption. sort I of a

sold them they and get with and number first applications in to the work of run. scale -- door the get instrument the You then

very we are. But where good we're feeling about

that matters to momentum think of and in -- sort and interested learned build our doing, our I continue we've to we're other and trying replicate really and what diversify reach. in success now the they're what segment accounts

Swayampakula Ramakanth

Perfect. question me. last from One

hook. the was that was -- the from presented kind off what Human there, but presentations of only Conference, -- believe the how of and being feedback, not On your excited I it's terms in leads Proteome what additional also going the people getting getting phones and

Jeffrey Hawkins

a Yes, it's good question.

is feedback positive. I consistently think the

another experience begin their right? peer, talking customers technology, the are obviously, talking who added I about customer -- there's always peers of with resonates about think, The when customer. benefit peers to peer an

So I think that's positive. a net

so early not recognition. business that we're company, We're still entity big name commercial brand natural multibillion-dollar as for has a a decades you where a phase just our in in have been

trade on, people the sort think I We are high interested still We're people are of generate that find or presentations, in value our meet face-to-face. all very those for to So get a these in shows learning for conferences, us. webinars and present to more, able us, demoing of who technology. customers marketing lot the events perhaps of leads activities

So and we're sharing trade the to people, various future, you, to our be webinars, pursue meet tools ability foreseeable that fruitful shows, of in doing those very we're will find placements think terms I that with towards new continue opportunities and these new for utilization.

Operator

Kyle from comes with Canaccord question next Genuity. Mikson Our

Kyle Mikson

quarter. the on Congrats

that. it's -- where components through of launch sense can some kind the product consumable a of like commenced so soft Jeff, point, At or walk like and instrument revenue. was of been year and have that this pull-through, or the you maybe So you parse things out mix since

about really ton. already. certain it's we're that through segments seeing services? could if possible went that But talk here in could, service the I of a the product level with increased I revenue mean you you dynamics just you certain some then And the mean,

Jeffrey Hawkins

Jeff, Yes. I'll up about it and break and the and about sort services a out. you bit can talk talk the mix then perhaps, the we pick start extent little that revenue to and overall of

things of the some service coming off those now Kyle, a are think and of and front, moving of couple we initial some it's different warranty contracts. in services of placed a instruments their I XXXX, throughout into on Obviously, mix instruments there.

through. one is that that of So service revenue comes of sort source

of train engage The give hands-on other operators some customers then are source really sort sort laboratory of can of setting large number interactions, a come of get to and to across more up. service their deeper in maybe is our revenue the advanced own of in training by us electing of machine on their them an they training and and

cost advanced not to but a multiple training, a with sort that It's it there's services that choose associated So to on training. large advanced that line. customers certainly of number, significantly can add when take

the So services sort X there drivers the trainings advanced contracts of line. service on are those and primary

Keyes, about rest go of Jeff you how the it? into .

Jeffry Keyes

can by placements would placements we're commercial Yes. out instrument focused in field. getting Kyle, expect, as that don't and company, those on financials. -- in you out about but instruments, for that the in instrument days its is mix, But break also really primarily we on for early the our say driven what sure, I it's pull-through and

a standpoint, And is we're then instrument So commercialization still high percentage phase. our go general placements. the as through mix we kits pull-through watching that on on from

academic we difference potentially pull-through between the the the that what process. evolution we're provide be and will watch commercial can and customers, term, this And a think going there's the ramp labs and little to as more of in through closely consumable that long have mean we then future. I go an we biopharma be we going pharma information to

Kyle Mikson

Okay.

legitimate sort versions incremental ready back -- kits, -- or kits these was to for like that? that coming for of of product think then And these like Jeff prime of are version we first -- the to like pretty guys. you was guess, you, version That up Okay. the all the version sort I the soon. When upon Hawkins, is new time, going X these X the kind about great are company and consider be then consumables iterations which like

like in and can with can terms in robustness what of sort do do and inflection of sequencing we do of Or just see customer like of an peptides? capabilities like when a you with Platinum really terms what of kind

Jeffrey Hawkins

Sure. Yes.

you much the a represent of the those that X their So get information I from of of did also in both sample, really reproducibility the a how terms increase output but customer a tell meaningful would results, pretty version kit significant very sequencing sequencing could right? sort in improvement

chips very and days The sample put in of multiple ability results. to reproducible run set get and across multiple or a a it

version improvement in I So was that over version big kit initial X of think sort kit. X up that first the step

great terms compatibilities, think of points our it's I seeing it think rev way each inflection incremental type I would performance, a time we in terms of improvement. X the innovation think very our in that be output, modest the broader to I it. we're view I sample really still stage the evolution, and of various about coverage things the technology is, a are version going wouldn't in we as improving

in to haven't performance and the future do been kit, we think kit, version increase we're similar. I -- will Kyle, meaningful would improvements customers be doing things something before. totality So general, that it a then when X such able they be a think, it when version on very is versioning each in of we And made the the

be We like as intend X.X iterative this point might don't something. that at of sort seen really or very changes do small a to

customers. really really VX changes, and for VX so think space more I as unlocking So and and of more these to capabilities application on

Kyle Mikson

Okay. perfect. Yes, that's

one before ask pass me Let on. I another

just or like the research that's tertiary think mass of about I complex, that like information, definitely like world Dragon world tools of about or pretty experience, On interesting that, ecosystem the complicated. and science mean, the in given just kind stands your the analysis. base you life -- curious like where coming in you which think super How like the analysis from That Platinum proteomic given secondary software. if spec, software [ an space ] research is you launch. Jeff, just was background analysis [indiscernible] things -- like when

What's of this why like the -- like or was bottleneck I questions, a the unmet need for X software? like guess future an such customers

future like of And from two, the what's data kind then of platform time? number the over monetizing

Jeffrey Hawkins

Sure. Yes. Good question.

the has of So a space, always very software data proteomics analysis been or challenging I in obviously, thing. think,

I has into the staff pipelines analyze large or they'll think that's if type you it data data go easier created a lab that spec, off have often for number mass bioinformatics make of running custom of it to proteomics some mass of as staff or comes core science analysis spec. tools that them

the you're of capabilities, that's level the when that not great sophistication. in a research that That's world, labs the right? majority in that those labs small of institutions number types of have and of That's have resources but

think I time, as a core So distribute tenet possible. this of broadly ensure data as sort analysis strategy of technology to automating of we always the was that over could

of future. sort is question what the to the more of flipping Now

that general kinetic doing. protein that's of alignment of the the model Kyle, is launch, would core way of sort as software software, work and talked I it we there's this and type right? of that there -- kinetic a think acids a ultimately amino underpins identification analysis calling about I the if then and peptides database is detection the and you're think about, There's

to capable, more able aspects of tools. data be of of some we going and seeing a powerful to those real-world keep are improvements sort So be sequencing make fine-tune source data, those more more making more just very to are purpose-built about and databases to but other then these accurate, more

starts or And analogs giving I from maybe the think of bit where the world, a to base the you're align closer DNA analogy that's with Dragon little some space.

before. sort of problem that run, of and the tools similar and continue a seek core we'll and you'll will to that think able events used to in improve tools about be to sort them detect see get make and there every on them accurate to make able those haven't way that detect we been more us I think exist

is be also us of a you'll that But very general I for think and think and tuned maybe the the software in about analysis tool. workflows tailored rather type looking do more perhaps help generic sort see that very customized way a to customer of or purpose-built specific do than using very

cycle really tech think done are bit you'll to expand see little cycles space apply it its of to almost and the It's kits own X and tremendous and a of customer's So can both. technology Version the do improve new of opportunity operating sort I like us we capability application a to independent kit. on the be the here make the sequencing ability

Operator

our it turn Jeff for period. remarks. like to back I to now concludes This Hawkins would question-and-answer over closing

Jeffrey Hawkins

Thank you, we've outstanding. everyone, was believe quarter during for attending today. first made the We the progress

our our look call. to providing launch, for the on are kit we an We next excited update and We track full forward on you. Thank to remain X our be executing XXXX. on version sequencing commercial QX delivery by end of

Operator

for your in the you does program. conference. conclude This participation Thank today's

disconnect. You may now

Quantum-Si (QSI) 9 May 242024 Q1 Earnings call transcript