Q4 2023 Quantum-Si Inc Earnings Call
Yes.
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Quantum-Si fourth quarter and full year 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question, you will need to press star-one-one on your telephone. You will then hear an automated message advising that your hand is raised.
[music].
Okay.
Yeah.
Good day, ladies and gentlemen, thank you for standing by.
Welcome to the quantum S fourth quarter and full year 2023 earnings call.
At this time all participants are in a listen only mode.
After the Speakers' presentation there'll be a question and answer session. Just a question you will need to press star one one on your telephone you will down here, an automated message advising yohanan sways. Please.
Operator: 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. Katherine, please go ahead.
Please be advised that today's conference is being recorded.
I would now like to turn the conference over to Kathryn Atkinson from called MSI. Catherine. Please go ahead.
Katherine Atkinson: Good afternoon, everyone. Thank you for joining us. Earlier today, Quantum-Si released financial results for the fourth quarter and full year ended December 31st, 2020. A copy of the press release is available on the company's website. Joining me today are Jeff Hawkins, President and Chief Executive Officer, and Jeff Keyes, Chief Financial Officer. Before we begin, I would like to remind you that management will be making certain forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements in our press releases. For a more complete list and description of risk factors, please see the company's filings made with the Securities and Exchange Commission.
Good afternoon, everyone and thank you for joining us earlier today quantum edge.
Financial results for the fourth quarter and full year ended December 31st 2023, a copy of the press release is available on the company's website. Joining me today are Jeff Hawkins, President and Chief Executive Officer, and Jeff <unk>, Chief Financial Officer before we begin I would like to remind you that management will be made.
Certain forward looking statements within the meaning of federal Securities laws.
Statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated additional information regarding these risks and uncertainties appears in the section entitled forward looking statements of our press release for a more complete list and description of risk factors. Please see the.
Company's filings made with the Securities and Exchange Commission. This conference call contains time sensitive information that is accurate only as of the live broadcast today February 29, 2024, except as required by law. The company disclaims any intention or obligation to update or revise any forward looking statements.
Katherine Atkinson: This conference call contains time-sensitive information that is accurate only as of the live broadcast today, February 29, 2024. Except as required by law, the company disclaims any intention or obligation to update or revise any forward-looking statement. During this call, we will also be referring to certain financial measures that are not prepared in accordance with U.S. Generally Accepted Accounting Principles, or GAAP.
During this call we will also be referring to certain financial measures that are not prepared in accordance with U S. Generally accepted accounting principles or GAAP a.
Katherine Atkinson: A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the press release filed earlier today. With that, I will turn the call over to Jeff Hawkins. Good afternoon, everyone, and thank you for joining us.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the press release filed earlier today with that I will turn the call over to Jim Hawkins.
Good afternoon, everyone and thank you for joining us today.
Jeff Hawkins: In today's call, we will provide a business update, present our fourth quarter and full year 2023 financial results, and provide an outlook for 2024. We will then open the line for questions. As a reminder, the goal of Quantum-Si is to bring next-generation protein sequencing to every lab, everywhere.
In today's call, we will provide a business update present, our fourth quarter and full year 2023 financial results and provide an outlook for 2024, we will then open the line for questions.
As a reminder, the goal of quantum that size to bring next generation protein sequencing to every lab everywhere.
Jeff Hawkins: Our proprietary technology delivers deeper, unbiased proteomics insights that we believe will accelerate scientific research, enable the discovery of new biomarkers, and ultimately power the development of new therapies and diagnostic tests that will positively impact human health. Now, I would like to provide an update on our progress during the quarter and full year ended December 31st, 2023, as well as provide an outlook for 2024. Our first corporate priority is to commercialize platinum and the 2M chip. In 2023, we executed a controlled launch of our platinum system.
Criteria technology delivers deeper unbiased proteomics insights that we believe will accelerate scientific research enable the discovery of new Biomarkers and ultimately powered the development of new therapies and diagnostic tests that will positively impact human health.
Now I would like to provide an update on our progress during the quarter and full year ended December 31, 2023, as well as provide an outlook on 2024.
Our first corporate priority is to commercialize platinum and the QM chip.
During 2023, we executed a controlled launch of our platinum system the.
Jeff Hawkins: The controlled launch allowed us the opportunity to build our core commercial capabilities and processes and ultimately define the blueprint for how to scale these efforts in a financially sound way as we enter the full commercial launch phase. Also, during the controlled launch, we were able to engage deeply with key opinion leaders and early adopters of our technology to better understand their applications of interest, find the focus of our technology development efforts going forward, and deliver on the recent launch of our version 2 kit that I will talk about in a few moments. Based on the learnings from the controlled launch during the fourth quarter of 2023 and into the start of 2024, we have been expanding our commercial infrastructure and resources in preparation for our full commercial launch.
The controlled launch allowed us the opportunity to build our core commercial capabilities and processes and ultimately define the blueprint for how to scale. These efforts in a financially sound way as we enter the full commercial launch phase.
So during the controlled launch we were able to engage deeply with key opinion leaders and early adopters of our technology to better understand their applications of interest defined the focus of our technology development efforts going forward.
And deliver on the recent launch of our version two kit that I will talk about in a few moments.
Based on the learnings from the controlled launch during the fourth quarter of 2023 and into the start of 2024, we have been expanding our commercial infrastructure and resources in preparation for our full commercial launch at present, we are finalizing our commercial readiness and expect our direct sales force and our current.
Jeff Hawkins: At present, we are finalizing our commercial readiness and expect our direct sales force and our current distributor network to be fully trained and ready to execute on our full commercial launch by the end of March. As we initiate our full commercial launch, I want to be clear about what this means for our customers and investors going forward. First, this means that we will no longer hold back the rate of instrument installation; all customers that are within our launch territories or are in areas where we can properly service and support them with our existing commercial infrastructure will be moved forward.
Distributor network to be fully trained and ready to execute on our full commercial launch by the end of March.
As we initiate our full commercial launch I want to be clear about what this means for our customers and investors going forward.
This means that we will no longer hold back the rate of instrument installations.
All customers that are within our large territories or are in areas, where we can properly service and support them with our existing commercial infrastructure will be moved forward.
Jeff Hawkins: Second, we will continue to closely monitor our commercial performance and customer success rates and leverage that data to execute on a steady scale-up of our commercial infrastructure, both direct and distribution, throughout 2024. Finally, now that we are moving into our full commercial launch phase and have much better visibility into our R&D pipeline, we are pleased to be able to provide full-year financial guidance, which we will talk about in a few minutes. Our commercial strategy involves a mix of direct sales and service and distribution partners. In the U.S. market, we currently operate with a direct sales and service model. In EMEA, our initial focus will be the European market, where we will utilize a mix of direct and distribution approaches. Beyond the U.S. and EMEA markets, we recently announced the addition of a distribution partner in Japan, which we expect will serve as our strategic entry point into the broader APAC market in the quarters ahead. Our strategy is clear.
Second we will continue to closely monitor our commercial performance and customer success rates and leverage that data to execute on our steady scale up of our commercial infrastructure, both direct and distribution throughout 2024.
Finally, now that we are moving into our full commercial launch phase and have much better visibility to our R&D pipeline. We are pleased to be able to provide full year financial guidance, which we will talk about in a few minutes.
Our commercial strategy involved the mix of direct sales and service and distribution partners in the U S market. We currently operate with a direct sales and service model.
In EMEA, our initial focus will be the European market, where we will utilize a mix of direct and distribution approaches beyond.
Beyond the U S and EMEA markets, We recently announced the addition of a distribution partner in Japan, which we expect will serve as our strategic entry point into the broader APAC market in the quarters ahead.
Jeff Hawkins: We will expand our commercial efforts in a fiscally responsible way while ensuring all our customers receive the highest level of service and support. Our goal is not simply to place instruments; it is to secure customers who will utilize our technology to advance their research for years to come. In preparation for full commercial launch, we have been diligently working to expand our direct commercial team across sales, marketing, service, and support. Our direct commercial team now includes approximately 20 individuals based in the United States and Western Europe. On the distribution front, we have previously announced that we have secured three distribution partnerships covering Eastern Europe, Southern Europe, and Japan.
Our strategy is clear we will expand our commercial efforts in a fiscally responsible way, while ensuring all of our customers receive the highest level of service and support.
Our goal is not simply to place instruments. It is secure customers, who will utilize our technology to advance their research for years to come.
In preparation for full commercial launch we have been diligently working to expand our direct commercial team across sales marketing service and support.
Our direct commercial team now encompasses approximately 20 individuals based in the United States and Western Europe.
On the distribution front, we have previously announced that we have secured three distribution partnerships covering eastern Europe, Southern Europe and Japan.
Jeff Hawkins: All three of these distribution partners have extensive experience bringing innovative new technologies to the market and we look forward to partnering with them to ensure their success. In the last quarter, our sales funnel has continued to grow and we expect that rate to accelerate in the near term based on our planned outbound marketing and direct selling efforts associated with our full commercial launch. Our funnel is well-established to support the full commercial launch in both the United States and Europe. In addition, we continue to receive inquiries from other locations throughout the world, but we will not execute on those opportunities until we are confident that we have a sustainable infrastructure in place to service those customers to the highest standards we expect of our, Lastly, one key takeaway from our controlled launch phase was how much value our platinum instrument can deliver to customers, and they're surprised at how affordable the instrument, To this end, effective January 1st, 2024, we increased our list price for platinum to $85,000.
All three of these distribution partners have extensive experience, bringing innovative new technologies to the market and we look forward to partnering with them to ensure their success.
In the last quarter, our sales funnel has continued to grow and we expect that rate to accelerate in the near term based on our planned outbound marketing and direct selling efforts associated with our full commercial launch.
Our funnel is well established to support the full commercial launch in both United States and Europe in.
In addition, we continue to receive inquiries from other locations throughout the world, but we will not execute on those opportunities until we are confident that we have a sustainable infrastructure in place to service those customers to the highest standards, we expect of ourselves.
Lastly, one key takeaway from our controlled launch phase with how much value our platinum instrument can deliver to customers and they are surprised that how affordable the instrument is.
To this end effective January one 2024, we increased our list price for platinum to $85000. We believe this modest increase helped partially capture the exceptional value that platinum provides relative to other tools in the market, while continuing to be attractively priced.
Jeff Hawkins: We believe this modest increase helps partially capture the exceptional value that platinum provides relative to other tools in the market while continuing to be attractively profitable. Our second priority is to lead with innovation. Quantum-Si is dedicated to meeting customer needs and enhancing their user experience; as we announced a few weeks ago, we launched our version two sequencing kit. This sequencing kit has substantial improvements over our prior version, including the introduction of a new amino acid recognizer, high reproducibility across runs, and an approximately threefold reduction in cost per amino acid.
Our second priority is to lead with innovation.
Quantum ESI is dedicated to meeting customer needs and enhancing their user experience as.
As we announced a few weeks ago, we launched our version two sequencing kit.
This sequencing kit had substantial improvements over our prior version, including the introduction of a new amino acid recognizer tied reproducibility across runs and an approximately three fold reduction in cost per amino acid.
Jeff Hawkins: The ability to deliver a high-performance new sequencing kit was a result of the R&D realignment that we completed in the third quarter of last year. As reported previously, the initial signs coming out of the restructuring were promising, but now, based on the team's performance over the last few months, I am pleased to conclude that the process was a success, and we are hitting on all cylinders. This version 2 sequencing kit is not the end; it is just the beginning. We expect to deliver a steady cadence of meaningful improvements to our technology going forward. In fact, we are already working on a version 3.0, which we expect to deliver by the end of the third quarter. Though I can't share any specifics about the Version 3 sequencing kit yet, I will say that our approach to releasing any new version of our sequencing kits is to ensure it will provide a meaningful improvement over the prior version, further enabling our customers to expand their research efforts using next-generation protein sequencing.
The ability to deliver a high performing new sequencing kit was a result of the R&D realignment that we completed in the third quarter of last year.
As we reported previously the initial signs coming out of the restructuring we are promising but now based on the team's performance over the last few months I am pleased to conclude that the process was a success and we are hitting on all cylinders.
This version to sequencing kit is not the end. It is just the beginning we expect to deliver a steady cadence of meaningful improvements to our technology going forward. In fact, we are already working on a version three sequencing kit, which we expect to deliver by the end of the third quarter.
I can't share any specifics about the version three sequencing kit, yet I will say that our approach to releasing any new version of our sequencing kit is to insure it will provide a meaningful improvement over the prior version further enabling our customers to expand their research efforts using next generation protein sequencing.
Jeff Hawkins: While the announcement of the launch of the Version 2 sequencing kit and the anticipated launch of a Version 3 kit in the third quarter of this year is exciting news, it is not the end of our innovation roadmap. We are also making solid progress across library preparation and instrument development programs that we believe will solidify our position as the technology leader in next-generation protein sequencing and will fuel the growth of the company for years to come. Finally, we are pleased to share that at the upcoming U.S. Human Proteome Organization Conference, running from March 9th through the 13th, there will be a Quantum-Si customer giving an oral presentation regarding their use of platinum for PTM detection, and a second customer presenting a poster describing their use of platinum to develop alternative library prep applications for next-generation protein sequences. We are excited to see customers beginning to present their work at industry conferences like HUPO, and we expect to see more of this throughout 2024. Our third priority is to preserve financial sustainability. As we state on each of our calls, we remain committed to continuously improving our fiscal discipline.
While the announcement of the launch of the version two sequencing kit and the anticipated launch of a version three <unk> in the third quarter of this year is exciting news. It is not the end of our innovation roadmap. We are also making solid progress across library prep and instrument development programs that we believe will solidify our position as the technology leader in <unk>.
X generation protein sequencing and will fuel the growth of the company for years to come.
Finally, we are pleased to share that at the upcoming U S. Human Proteome organization conference running from March nine through the 13th there will be a quantum ESI customer, giving an oral presentation regarding their use of platinum for PCM detection and a second customer presenting a poster describing their use of platinum to develop alternative library prep.
Applications for next generation protein sequencing.
We are excited to see customers beginning to present their work at industry conferences like hoopoe and expect to see more of this throughout 2024.
Our third priority is to preserve financial strength.
As we stated on each of our calls we remain committed to continuously improving our fiscal discipline.
Jeff Hawkins: With Jeff Keyes, our Chief Financial Officer, and others joining the organization in the last year, we have significantly ramped up the discipline around our financial resources and planning efforts. This increased rigor, along with the clarity we have around our full commercial launch and the visibility we have into our R&D pipeline, allows us to be confident that we can provide more color to the investing community with our 2024 financial guidance. 2024 will be a transformational year for us as we embark on our full commercialization. From our vantage point, we expect to generate revenue in the range of $3.7 to $4.2 million.
With Jeff <unk>, our Chief Financial Officer, and others, joining the organization in the last year, we have significantly ramped up the discipline around our financial resources and planning efforts.
This increased rigor along with the clarity we have around our full commercial launch and the visibility we have to our R&D pipeline allow us to be confident that we can provide more color to the investing community with our 2024 financial guidance.
2024 will be a transformational year for us as we embark on our full commercialization efforts.
From our vantage point, we expect to generate revenue in the range of $3 seven to $4 $2 million, we expect growth on a quarter over quarter basis during 2024.
Jeff Hawkins: We expect growth on a quarter-over-quarter basis during 2024. Our 2024 revenue will include a mix of both platinum units and consumables with the majority of revenue being derived from the United States along with contributions from the EMEA. Jeff will provide further color on our 2024 guidance in a few moments. With our full commercial launch just a few weeks away, it has never been more important for us to utilize our financial resources in the most effective way, and we remain committed to that. With the actions that we took in the past and the discipline that we put in place over the last year, we are confident we will be able to achieve superior R&D results and speed to market and fully fund our commercialization efforts for 2024, both with minimal changes in our operating. I' Jeff?
Our 2020 for revenue will include a mix of both platinum unit and consumables with the majority of revenue being derived from the United States along with contributions from the EMEA region.
<unk> will provide further color on our 2024 guidance in a few moments.
With our full commercial launch just a few weeks away. It has never been more important for us to utilize our financial resources in the most effective way and we remain committed to that.
With the actions that we took in the past and the discipline that we put in place over the last year. We are confident we will be able to achieve superior R&D results and speed to market.
And fully fund our commercialization efforts for 2024, both with minimal changes in our operating expenses.
I'll now turn the call over to Jeff to review our financial results Jeff.
Jeff Keyes: Thank you, Jeff. Now, let's discuss the details of our fourth quarter and full year 2023 financial results. Revenue in the fourth quarter of 2023 was $400,000, which consisted of revenue from our platinum instrument and associated consumable kit. Gross profit was $178,000, and growth margin was 45%. For the full year, revenue was $1.1 million, gross profit was $488,000, and gross margin was 45%.
Thank you Jeff.
Let's discuss the details of our fourth quarter and full year 2023 financial results.
Revenue in the fourth quarter of 2023 was $400000, which consisted of revenue from our platinum instruments and associated consumable kits.
Gross profit was 178000 and gross.
<unk> was 45%.
For the full year revenue was $1 1 million gross profit was 488000 and gross.
Margin was 45%.
Jeff Keyes: As I have stated before, gross margin percentage will be somewhat variable for the near future as we work through our initial stages of commercialization and also will be impacted by the timing and mix of instruments versus consumable sales. Our margin will also be impacted in the near term by acquisition costs and any accounting adjustments to underlying inventory that dates back to the pre-commercial stage of Quantum-Si. Gap's total operating expenses in the fourth quarter of 2023 were $28.1 million, compared to $38.8 million in the fourth quarter of 2022.
As I have stated before our gross margin percentage will be somewhat variable for the near future as we work through our initial stages of commercialization.
And also will be impacted by the timing and mix of instruments versus consumable sales.
Our margin will also be impacted in the near term by acquisition cost and any accounting adjustments to underlying inventory that dates back to the pre commercial stage of quantum that Si.
GAAP total operating expenses in the fourth quarter of 2023 was $28 1 million compared to $38 8 million in the fourth quarter of 2022.
Jeff Keyes: Included within operating expenses are stock-based compensation, restructuring charges, and goodwill impairment in the fourth quarter of 2022. Removing these items, we arrive at adjusted operating expenses, which were $26.3 million for the fourth quarter of 2023 compared to $25.3 million for the fourth quarter of 2022. For the full year of 2023, operating expenses were $111.7 million compared to $123.8 million for the full year of 2022, and adjusted operating expenses for the full year of 2023 were $98.9 million compared to $103.2 million for the full year of 2022. The takeaway from our year-over-year reduction of adjusted operating expenses is that, as a company, we have made a significant effort over the last year right-sizing our spend The net loss for the fourth quarter of 2023 was $22 million, compared to $33.1 million in the fourth quarter of 2022. And adjusted EBITDA for the fourth quarter of 2023 was negative $25.1 million, compared to negative $24.5 million in the fourth quarter of 2022. For the full year of 2023, its net loss was $96 million, compared to $132.4 million in 2022.
Included within operating expenses are stock based compensation restructuring charges and goodwill impairment in the fourth quarter of 2022.
Removing these items, we arrive at an adjusted operating expenses.
Which were $26 3 million for the fourth quarter of 2023 compared to $25 3 million of the <unk>.
Fourth quarter of 2022.
For the full year of 2023 operating expenses were $111 7 million compared to $123 8 million for the full year of 2022, and adjusted operating expenses for the full year of 2023 or $98 9 million compared to $103 2 million for the full year 2020.
Sure.
The takeaway from our year over year reduction of adjusted operating expenses is that as a company. We have spent significant effort over the last year right sizing our spend while also accelerating innovative product releases as demonstrated by our version two kit.
And funding a large part of our scaling our commercial operations.
Net loss for the fourth quarter of 2023 was $22 million compared to $33 1 million in the fourth quarter of 2022, and adjusted EBITDA for the fourth quarter of 2023 was negative $25 1 million compared to negative $24 $5 million in the fourth quarter of 2022.
For the full year of 2023 net loss was $96 million compared to $132 4 million in 2022, and adjusted EBITDA for 2023 was negative $94 3 million compared to negative $100 6 million for 2022.
As of December 31, 2023, we had $257 7 million in cash and cash equivalents and investments in marketable securities.
Our full commercial launch plan includes a main focus of a direct sales channel approach in the United States market and a combination of direct and distributor approach in EMEA.
Jeff Keyes: And adjusted EBITDA for 2023 was negative $94.3 million, compared to negative $100.6 million for 2022. As of December 31, 2023, we had $257.7 million in cash and cash equivalents and investments in marketable securities. Our full commercial launch plan includes the main focus of a direct sales channel approach in the United States market and a combination of direct and distributor approaches in EMEA. Based on these approaches, we are guiding 2024 revenue to a range between $3.7 and $4.2 million, adjusted operating expenses to be less than $103 million, and net cash usage less than $100 million. In comparison, in 2023, we recorded $98.9 million in adjusted operating expenses and utilized $93.6 million in cash and investments.
Based on these approaches we are guiding 2020 for revenue to a range between three seven and $4 2 million adjusted operating expenses to be less than $103 million and net cash usage less than $100 million.
In comparison in 2023, we recorded $98 9 million and adjusted operating expenses and utilized $93 6 million in cash and investments.
Our guidance for 2024 includes accelerated R&D innovation and fully funding our <unk> commercialization ramp up with a minor increase to adjusted operating expenses and cash.
As I stated earlier and on prior calls we expect our gross margin percentage to be variable in the near term as we work through our initial stages of commercialization and the impact.
Jeff Keyes: Our guidance for 2024 includes accelerating R&D innovation and fully funding our commercialization ramp-up with a minor increase to adjusted operating expenses in cash. As I stated earlier and on prior calls, we expect our gross margin percentage to be variable in the near term as we work through our initial stages of commercialization and the impact of acquisition costs and prior accounting adjustments to underlying inventory that dates back to the pre-commercial stage of Quantum-Si. Based on this, we're now providing specific gross margin guidance. Finally, we still expect that our existing cash... Cash Equivalents in Investments in Marketable Securities will provide runway into 2020. Now, I will turn the call over to the operator to open the line for questions. Thank you. Ladies and gentlemen, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 1-1 again.
<unk> of acquisition costs and prior accounting adjustments to underlying inventory that dates back to the pre commercial stage <unk> Si.
Just on this we are not providing specific gross margin guidance.
Finally, we still expect that our existing cash.
Cash equivalents and investments in marketable securities will provide runway into 2026.
Now I will turn the call over to the operator to open the line for questions.
Thank you, ladies and gentlemen to ask a question you will need to Westar one one on your telephone and wait for your name to be announced to withdraw your question simply press Star one again.
Please standby, while we compile the Q&A roster.
Yeah.
Yes.
Okay.
Now first question coming from the line of Karl <unk>.
Nixon with Canaccord. Your line is now open.
Yes.
Hi. This is also closely online for call Maxim.
Congrats on a quarter to quarter goes.
I think what we should start.
Discussion of the guidance.
Could you discuss particularly what the cadence of placements might be.
Sequentially across the year.
More specifically.
Because the real step down in <unk> from <unk>. Thanks.
Yes, thanks for the question so.
Operator: Please stand by while we compile the Q&A roster. Now, the first question coming from the line of Kyle Mixon with Ken Cordelon is open. Hi, this is Alex Vukasin. I'm on for Kyle Mikson.
We gave the guidance out on an annual basis I think when you think about the quarterly cadence I would expect since were just moving now into the full commercial launch as we as we get here towards the end of March we would expect there to be sort of a consistent.
Alex Vukasin: Congratulations on my quarter guys. I think where we should start is a discussion of the guidance. Could you discuss, particularly, what the cadence of placements might be sequentially across the year? And, you know, more specifically, could we step down in 1Q from 4Q?
<unk> of our revenue here in the first quarter with some step up into Q2, and then more acceleration as you look into the back half of the year. So I don't anticipate.
Jeff Hawkins: Yeah, thanks for the question. So I, you know, we gave the guidance out on an annual basis. I think when you think about the quarterly cadence, you know, I would expect since we're, you know, just moving now into the full commercial launch, as we get here towards the end of March, you know, we'd expect there to be sort of a consistent rate of revenue here in the first quarter, you know, with some step up into Q2. And then, you know, more acceleration as you look into the back half of the year, so I I expect it to move, maybe more laterally.
A step down from Q4, I expect it to move maybe more laterally and then as I said sort of accelerate in the back half of the year.
And so you also announced a bunch of product improvements in early February you announced version three cuts here.
Also discussed we made some solid progress in regards to.
Library prep.
Just curious.
Instrument, good carbon or spare parts potentially like carbon be offered in the near to medium term on these type of prep and guidance.
Yes, I think when we think about library prep I think.
You think about carbon too right. So carbon if you remember was really.
For doing some of the front end workflow automation and our and our feedback from customers that we had accumulated last year that led to the decision to put carbon on hold was really there wasn't.
Jeff Hawkins: And then, as I said, sort of accelerate in the back half of the year. Thanks. And so you also announced a bunch of product improvements in early February. You announced the version 3 kits here. You also discussed that you made some solid progress in regards to, I'm just curious, could a carbon or an instrument possibly like carbon be offered in the near to medium term on the sample prep end? Yeah, I think when we think about library prep, I think you got something about carbon, too, right?
Sort of the need for carbon based on the volumes of test our customers are processing and sort of the capabilities of the scientist in laboratory staff better in those accounts, we continue to look at options, though for automation as our customers scale up in volume.
Really the question will be do we do that visa via device like carbon or I think as we've communicated before we're leaning more towards we would provide some form of liquid handling solution that could be.
Jeff Hawkins: So carbon, if you remember, was really for doing some of the front end workflow automation, and our feedback from customers that we had accumulated last year that led to the decision to put carbon on hold was really that there wasn't sort of a need for carbon based on the volumes of tests our customers are processing and sort of the capabilities of the scientists and laboratory staff that are in those accounts. We continue to look at options, though, for automation as our customers scale up in volume. Really, the question will be, do we do that vis-a-vis a device like carbon?
From one that's available is sort of in the in the existing market.
In terms of automating library prep and even other aspects of sample prep.
Alright. Thanks.
One more question.
<unk> two.
Potential.
Adoption of protein sequencing obviously.
So very much early days does it flip technology discuss some new posters coming out.
Jeff Hawkins: Or, I think, as we've communicated before, we're leaning more towards, you know, we would provide some form of liquid handling solution that could be different from one that's available sort of in the existing market in terms of automating library prep and even other aspects of sample prep. Thanks. And one more question.
That will be presented at a conference just curious.
No.
How youre seeing adoption levels, right now and interest and operating sequencing.
That's kind of evolved.
<unk> been keeping our working class side. Thanks.
Sure I think we talked about in prior calls and I'd sort of reiterate a similar sentiment today. The interest in using next generation protein sequencing has always been ahead of our expectations, we talked about the funnel.
Jeff Hawkins: In regards to potential adoption of protein sequencing, obviously, it's still very much the early days of technology. You just got some new posters coming out, and they'll be presented at a conference. Just curious how you're seeing adoption levels right now and interest in protein sequencing, how that's kind of evolved since you've been working at Quantum-Si.
During 2023 was running ahead of our expectations I think as we entered 2024, we continue with the same sentiment there has always been that interest there to utilize the technology like ours to.
Jeff Hawkins: I think we talked about this on prior calls and, you know, I'd sort of reiterate a similar sentiment today. The interest in using next-generation protein sequencing has always been ahead of our expectations. You know, we talked about the funnel, which during 2023 was running ahead of our expectations. I think as we entered 2024, we will continue with the same sentiment. There's always been that interest there to utilize technology like ours to be able to do types of analysis that are either very difficult to do today or aren't really accessible today for customers. So we see that interest. I think really now, with the version two kit, with the increase in sort of commercial resources, getting all that trained, really now going out and executing on that full commercial launch and really converting that interest into customers who are adopting and using it.
To be able to do types of analysis that are either very difficult to do today arent really accessible today for customers. So we see that interest I think really now it's about with the version two kit with the increase in sort of commercial resources getting all of that trained really now going out and executing on that full commercial launch and really convert.
Adding that interest into customers, who are adopting and using I think the data that's coming out at Hoopoe is an example of customers who have access to this technology, they're going to start showing the applications and the types of things they can do and as we accelerate.
The placement of our device with the full commercial launch I would expect that more and more people will talk about applications with the technology.
Thank you very much.
Thank you.
Yeah.
Thank you our next question.
And our next question coming from the line of Scott So.
Jeff Hawkins: I think the data that's coming out at Hupo is an example of customers who have access to this technology. They're going to start showing the applications and the types of things they can do. And as we accelerate the placement of our device with the full commercial launch, I'd expect that more and more people will talk about applications with the technology. Thank you very much.
<unk> Colo Rama <unk> from H C. Wainwright. Your line is now open.
Thank you. This is RK from H C Wainwright, good afternoon, Jeff and Jeff.
Good afternoon.
Congratulations on all the progress.
So between.
They've been out of that happen.
A couple of days ago, and the posters that are upcoming in the poster and publications Thats coming up.
In the conferences during a quarter I guess.
Jeff Hawkins: Thank you. Thank you. One moment for our next question, and our next question comes from the line, Swayampakula Ramakanth from HC Wainwright. Your line is open.
One.
What's the takeaway from all of this in the sense.
If I am somebody who is looking for.
For our platinum and partnering or buying platinum by looking at all this data presentations, where they get a good feel for what's the capabilities of the mission or is that just a small sample of.
Swayampakula Ramakanth: Thank you. This is R.K. from HCVLA. Good afternoon, Jeff and Jeff.
Swayampakula Ramakanth: Congratulations on all the progress. So between the webinar that happened a couple of days ago and the posters that are upcoming, the poster and publication that's coming up at conferences during the quarter, I guess. What's the takeaway from all this in the sense that if I am somebody who is looking to buy platinum, by looking at all this data presentation, would I get a good feel for what the capabilities of the machine are? Or is that just a small sample of a set of things that they may end up being? Talks about the utility of the machine. Yeah, it's a good question, RK.
Set of things.
Dave.
The.
Ultimately the utility of the mission.
Yes, it's a good question RK I would describe it as.
It's still a small sampling of what the technology and the platinum instrument are capable of.
As you can imagine with the broad capabilities of sequencing at the amino acid level and still at the early phases of our commercialization efforts. These customers represent interesting applications. They represent applications that were of importance and priority for those customers, but they could be.
Jeff Hawkins: I would describe it as still a small sampling of what the technology and the platinum instrument are capable of. As you can imagine, with the broad capabilities of sequencing at the amino acid level and still at the early phases of our commercialization efforts, these customers represent interesting applications. They represent applications that are of importance and priority for those customers, but they could be different for other users. So I expect that as more data comes out at future conferences and even at future webinars, you'll continue to see different things talked about. I don't think you're going to see a lot of repetition.
Different for other users so I expect that as more data comes out at future conferences and even at future Webinars Youll continue to see different things talked about I don't think youre going to see a lot of repetition I think youll continue to see a breadth of applications that people are interested in.
Okay.
Just staying on the same topic.
Having.
Being hardly in the market for that year.
Jeff Hawkins: I think you'll continue to see a breadth of applications that people are interested in. Okay, and just staying on the same topic, you know, being hardly in the market for a year, I'm able to get, you know, three different presentations out, which kind of speaks to the excitement, to a certain extent, of the utility of these missions. You know, is the same amount of enthusiasm palpating among the funnel that you have? Or, you know, is this an indication of how large the funnel can grow to once you start launching the product? I'm just trying to get a feel for what would be the... pull on the product once it becomes commercial. I think about it in a couple ways, RK.
<unk> able to get three different presentations out kind of speaks to the excitement to a certain extent.
The utility of these missions.
Yes.
Yes.
Is the same amount of enthusiasm.
Yeah.
<unk> among the funnel that you have.
Our.
Is this an indication of.
How large the funnel can grow to.
Once you start launching the product I'm, just I'm, just trying to get a feel for like what would be the.
Paul on the product once it becomes commercial.
Yes, I think I think about it in a couple of ways RK I think the first thing I would tell you is the interest in the technology and the excitement around our new technology.
Jeff Hawkins: I think the first thing I would tell you is the interest in the technology and the excitement around a new technology like ours is definitely palpable. It was in the controlled launch phase, but as we've talked about on prior calls, that was really our decision to roll out in a very controlled manner, ensuring we were able to be very responsive if any issues arose. We were really throttling the pace at which customers were able to access the technology.
Like our technology I think is definitely palpable it wasn't the controlled launch phase, but as we've talked about on prior calls that was really our decision to rollout in a very controlled manner inshore.
We were able to be very responsive as any issues arose. It was we were really throttling the pace at which customers were able to access the technology. So that excitement is already sort of always been there.
Jeff Hawkins: So that excitement has already sort of always been there. I think that excitement, I see it actually starting to accelerate. With the V2 launch, we put out some data and examples of performance increases you see at a protein level and at a peptide level. We also put out data around the reproducibility enhancements in the product. And I think when you start providing information like that, again, it serves to just show the innovation sort of trajectory we're on. I think people are both excited about what we were talking about, but I think equally excited about the trajectory of innovation. I think as customers hear about a version 3 kit, it's only going to help with that. I think while we're at the early stages, because we're just moving to full commercial launch now, I would expect that excitement to be there and be sustained and grow, and that will show up ultimately in the funnel. And then it's our job to convert that sort of funnel and interest and excitement into placements and revenue as we move forward throughout the year. Thank you.
I think that excitement.
I see it actually starting to accelerate with with the V. Two launch.
Put out some.
Some data and examples of performance increases you see at a protein level at a peptide level.
Top put out data around the reproducibility enhancements in the product and I think when you start providing information like that again serves.
Just show the innovation.
Trajectory. We're on so people are both excited about.
What we were talking about but I think equally excited about the trajectory of innovation I think as customers here about version three kit, it's only going to help with that so I think we're we're while we're at the early stages because we're just moving to full commercial launch now I would expect that excitement to be there and be sustained in <unk>.
And that will show up ultimately in the funnel and then it's our job to convert that that sort of funnel and interest and excitement into placements and revenue as we move forward throughout the year.
Swayampakula Ramakanth: And then my last question is, in terms of, as you said, version 3 should be significantly different from version 2, based on, you know, what you're suggesting. I know you don't want to kind of unveil what's going to be in version 3, but, you know, in terms of, again, I'm just going back to the utility question again. So, does when you start moving from version one to version two to version three, what's the aim there? Is it to increase? The spectrum of utility, or is it more in terms of?
Alright, Thank you and then.
My last question is.
In terms of I'll, just add version three should be significantly different from version two and based on what you are suggesting.
I know you don't want to kind of unveil what scoring.
We're going to see in version three.
But but.
In terms of.
Again, I'm just going back to the utility question again third does.
When you start moving from version one to two to three.
What's the aim there is it is it too.
Please.
The spectrum.
Utility.
Or is it more in terms of.
Jeff Hawkins: How well and how how clean of a sequence can you get? What's the drive when you go from one version to the next? Yeah, when we move from one version to another, I think it's generally about an overall lift in performance, right? Providing, you know, in this case, with the version two kit, we added an additional recognizer. So you get, you know, more coverage; that coverage manifests itself in terms of, you know, the number of visually visible amino acids; it manifests itself as being able to see more peptides from a given protein. But, you know, we also increase the overall output of the device. And that increased output gives customers then the flexibility to use it in different ways. On the one hand, with greater sequencing output per run, some customers might choose RK to apply it to look at a more complex sample, perhaps a more complex mixture of proteins.
Well.
No.
How clean up there.
Sequencing sequence can you get.
The dry when you go from one version to that though.
Yes, when we move from one version to another I think it's generally about an overall lift in performance right providing in this case with the Virgin to kit we added an.
The additional recognizer. So you get more coverage that coverage manifests itself in terms of the number of visual visible amino acids. It manifests itself is being able to see more peptides.
From from a given protein, but we also increase the overall output of the device and that increased output gives customers than the flexibility to apply that in different ways on one hand with greater sequencing output per run some customers might choose RK to apply that to <unk>.
Look at a more complex sample, perhaps some more complex mixture.
Jeff Hawkins: Other customers may want to apply that to really deeply interrogate samples and look at protein variants or PTMs in the future. So I think, in general, the thinking is just continuing to raise the coverage, raise the output, and the performance to really just give people a robust set of capabilities that they can then apply to their research in the way that they see fit. So it's really just about opening up applications, capabilities, and compatibility with different samples they might want to work with.
Proteins other customers may want to apply that to really deeply interrogate samples and look at protein variants or.
<unk> in the future. So I think in general the thinking is just continuing to raise the coverage.
<unk> raised the output.
And the performance to really just give people a robust set of capabilities that they can then apply to their research and the way that they see fit so it's really just about opening up.
Applications capabilities compatibility with different samples they might want to work with and then we really see where they go with their research and how they apply it and we will take those learnings like we did in the accretion of <unk>.
Jeff Hawkins: And then we really see where they go with their research and how they apply it, and we'll take those learnings, like we did in the creation of v2. And they're fueling what we're doing in v3. And I'm sure they'll fuel what we do in a future version after that. You know, I think v3 is very exciting. We're, we're well underway, but I don't think that's the end either. And you know, we'll learn in the market, and we'll apply those learnings as we go forward.
They are fueling what we're doing in <unk> and I am sure. They will fuel what we do and in a future version after that I think <unk> is very exciting work, we're well underway, but I don't think thats the end either and we will learn in the market and we'll apply those learnings as we go forward.
Jeff Hawkins: Well, thanks. Thank you. Thanks for taking all my questions. Yep, thank you, Arkay. Thank you. I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr. Jeff Hawkins for any closing remarks. Thank you. We continue to make significant progress at Quantum-Si on all fronts, and I want to thank the entire QSI team for their contributions during 2023. We're excited about our full year of commercial execution and R&D innovation, and we look forward to providing additional updates on our next call. Ladies and gentlemen, that does conclude our conference for today. Thank you all for your participation. You may now disconnect.
Perfect.
Thank you thanks for taking all my questions.
Yes, Thank you RK.
Thank you I'm showing no further questions in queue. At this time I will now turn the call back over to Mr. Jeff Hawkins for any closing remarks.
Thank you we continue to make significant progress that quantum ESI on all fronts and I want to thank the entire <unk> team for their contributions during 2023, we're excited about our full year of commercial execution in R&D innovation, and we look forward to providing additional updates on our next call.
Ladies and gentlemen that does conclude our conference for today. Thank you all for your participation you may now disconnect.
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