Q1 2024 Seer Inc Earnings Call

May 8, 2024

Carrie Mendivil: A, Carrie Mendivil, and Investor Relations. Please go ahead.

So relations. Please go ahead.

Thank you.

Carrie Mendivil: Thank you. Earlier today, Seer released financial results for the quarter ended March 31, 2024. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send an email to investor@seer.bio. Joining me today from Seer are Omid Farokhzad, Chief Executive Officer and Chair, and David Horn, President and Chief Financial Officer. Before I begin, I'd like to remind you that management will make statements during this call that are 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.

Speaker Change: Earlier today <unk> released financial results for the quarter ended March 31, 2024, if you have not received this news release or if you'd like to be attitude. The companys distribution list. Please send an email to investor at <unk> Dot bio joining me today from <unk> is only certified Chief Executive Officer, and chair and David Hart, President and Chief Financial Officer.

Speaker Change: Before we begin I'd like to remind you that management will make statements. During this call that are 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.

Carrie Mendivil: Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements in the press release Seer issued today. For a more complete list and description, please see the Risk Factors section of the company's quarterly report on Form 10-Q for the year ended March 31, 2024, and in its other filings with the Securities and Exchange Commission. Except as required by law, Seer disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast on May 8th, 2024. With that, I'd like to turn the call over to Omid.

Speaker Change: Additional information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release issued today for a more complete list and description. Please see the risk factors section of the company's quarterly report on Form 10-Q for the year ended March 31, 2024, and its other filings with the Securities and Exchange Commission.

Carrie Mendivil: Except as required by law <unk> disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise this.

Speaker Change: This conference call contains time sensitive information and is accurate only as of the live broadcast may eight 2024 with that I'd like to turn the call over to me.

Omid C. Farokhzad: Thanks, Carrie, and thank you, everyone, for joining us this afternoon. I will begin our call today by providing updates on our business, and I will then turn the call over to David to provide more details on our financial results for the first quarter of 2024 and our outlook for the year. We remain incredibly bullish on the potential of our technology to transform our understanding of the proteome. Photographed data produced and presented by our customers is truly outstanding, and we fundamentally believe in the long-term value of our differentiated technology. However, the pace of adoption and utilization of the Proterograph platform is not yet on track with our expectations.

Omid: Thanks, Gary and thank you everyone for joining us this afternoon.

David: I will begin our call today.

Speaker Change: Providing updates on our business.

Speaker Change: I'll, then turn the call over to David to provide more details on our financial results for the first quarter of 2024, and our outlook for the year.

Omid C. Farokhzad: We remain incredibly bullish on the <unk>.

David: Potential of our technology to transform our understanding of the proteome.

David R. Horn: Put a graph data produce and presented by our customers.

David R. Horn: He is truly outstanding and we fundamentally believe in the long term value of our differentiated technology.

David R. Horn: However, the pace of adoption and utilization of the <unk> platform is not yet on track with our expectations.

Omid C. Farokhzad: As we have previously stated, an important factor driving adoption and utilization is the demonstration of the biological insights provided by the protographs in the form of peer-reviewed publications from our customers. To that end, we've had several important papers published in recent months and have a strong pipeline of customer publications that will be forthcoming in high-impact journals throughout the year. First quarter revenue came in at $3.1 million, as we continue to experience headwinds to adoption of the Pornograph product, in large part due to the elongated sales cycles from the past of their publications, as well as ongoing macro challenges.

Omid C. Farokhzad: As we have previously stated and an important factor to driving adoption and utilization is a demonstration of the biological insight provided by the paragraph in the form of peer reviewed publications from our customers.

David R. Horn: To that end we've had several important papers published in the recent months and have a strong pipeline of customer publications that will be forthcoming in high impact journals throughout the year.

David R. Horn: First quarter revenue came in at $3 1 million as we continued to experience headwinds to adoption of the paragraph products suite and large part due to the elongated sales cycles from the possibly of publications as well as ongoing macro challenges.

Omid C. Farokhzad: Given our performance in the first quarter and the current pace of adoption, we now expect 2024 revenue to be in the range of $16 to $18 million. Until we see an inflection in revenue, we're focusing our resources on our commercial organization while reducing our cash burn to preserve our strong balance. In line with this strategic direction, we're taking the following action.

David R. Horn: Given our performance in the first quarter and the current pace of adoption. We now expect 2020 for revenue to be in the range of $16 million to $18 million.

David R. Horn: Until we see an inflection in revenue, we're focusing our resources on our commercial organization, while reducing our cash burn to preserve our strong balance sheet.

David R. Horn: Yeah.

David R. Horn: In line with the strategic direction, we're taking the following actions first we are continuing to invest in and expand our commercial team to ensure we have the right people in place to drive adoption education and awareness either Purdue graph product suite.

Omid C. Farokhzad: First, we're continuing to invest in and expand our commercial team to ensure we have the right people in place to drive adoption, education, and awareness for the Protograft product suite. Additionally, we're launching an additional Seer Technology Access Center located in Europe, providing end-to-end services from sample to data for our European customers. Third, we're implementing an approximately 10% reduction in force outside of our commercial organization to further reduce our use of capital until adoption and revenue growth accelerate.

David R. Horn: Second.

David R. Horn: We're launching additional <unk> access center located in Europe, providing end to end services from sample to data for our European customers.

David R. Horn: Third we're implementing an approximately 10% reduction in force.

David R. Horn: Outside of our commercial organization to further reduce our use of capital until adoption and revenue growth accelerate.

Omid C. Farokhzad: Finally, given our strong balance sheet, prudent use of capital, and fundamental belief in the long-term value of the Seer platform relative to our current share price, we believe there is a dislocation in our long-term value relative to our current share price. Therefore, we're putting in place an open market share repurchase program for up to $25 million.

David R. Horn: Finally, given our strong balance sheet prudent use of capital and fundamental belief in the long term value of this platform. We believe there is a dislocation in our long term value relative to our current share price.

David R. Horn: Therefore, we're putting in place an open market share repurchase program for up to $25 million.

Omid C. Farokhzad: We're confident our cash balance provides us with ample runway to reach our strategic objectives of becoming the definitive two leaders in proteomics. Now, I'd like to share some of the progress we've made across our business, starting with enhancing access to the Proteograph products. Our Strategic Instrument Placement Program, or SIPP, has continued to remove barriers by utilizing available operating budgets, allowing researchers to begin using the protograph right away. Notably, during the first quarter, we saw multiple customers purchase their instruments that had been placed through the SIP, a testament to the value and quality of the data generated by the protograph.

Omid C. Farokhzad: We're confident our cash balance provides us with ample runway to reach our strategic objective of becoming the definitive two leaders in proteomics.

Omid C. Farokhzad: Additionally, we continue to serve customers through the stack, which allows the proteograph user to run samples in their own lab and have Seer run the mass spec, or alternatively, provide end-to-end study services from sample to end. STAC is an important accelerator in the accessibility of unbiased proteomics data, given the elongated cell cycles due to continued funding and macro challenges.

David R. Horn: Now I'd like to share some of the progress we've made across our business starting with enhancing access to the peripheral graft product suite.

Omid C. Farokhzad: Our strategic instrument placement program or Sip has continued to remove barriers by utilizing available operating budgets, allowing researchers to begin using the product graph right away.

David R. Horn: Notably during the first quarter, we saw multiple customers purchased their instruments that had been placed through the Sip.

David R. Horn: A testament to the value and quality of the data generated by the photograph.

Omid C. Farokhzad: Additionally, we continue to serve customers through the stack, which allows the protium <unk> user to run samples in their own lab and have sphere run the math back or Alternatively provide end to end study services from sample to answer.

David R. Horn: Stack is an important accelerators in the accessibility of unbiased proteomics data given the elongated sales cycles due to continued funding and macro challenges.

Omid C. Farokhzad: Increased accessibility will continue to catalyze the generation of third-party data and publications, further highlighting the transformative potential of the protograph. During the first quarter, we prioritized running samples for high-value accounts with larger studies at lower price points that will serve as key reference customers to drive continued adoption of our technology. We expect these customers will present and publish their studies in the upcoming months, further reinforcing the differentiated value proposition of our technology.

David R. Horn: Increased accessibility will continue to catalyze the generation of third party data and publications further highlighting the transformative potential of the Purdue graph.

Omid C. Farokhzad: During the first quarter, we prioritize running samples for high value accounts with larger studies at lower price points that will serve as a key reference customers to drive continued adoption of our technology. We expect these customers will present and publish their studies in the upcoming months.

Omid C. Farokhzad: Other reinforcing the differentiated value proposition of our technology.

Omid C. Farokhzad: While we continue to operate STAC at its capacity, the prioritization of these studies resulted in lower STAC revenue for the quarter. Given the success we've seen with SAC in the U.S., we're excited to expand into Europe with the launch of the SAC lab in Germany next month.

David R. Horn: While we continue to operate stack at its capacity the prioritization of these studies resulted in the lower <unk> revenue for the quarter.

David R. Horn: Given the success, we've seen with the stack in the U S. We're excited to expand into Europe with the launch of this stack lab in Germany next month.

Omid C. Farokhzad: This will give researchers in Europe the ability to unlock biological insight through comprehensive, deep, unbiased proteomics research. We look forward to continuing to address a major unmet need for researchers across the region. Last month, we were excited to launch our 2024 Seer Insights Grant Program aimed to support innovative and collaborative researchers who require access to comprehensive, unbiased proteomic insights to advance scientific discovery. Six awardees will receive grants to support studies ranging from 40 to 160 samples, leveraging our cutting-edge technology and expertise from sample preparation to data analysis.

David R. Horn: This will give researches in Europe, the ability to unlock biological insight through comprehensive deep unbiased proteomics research.

David R. Horn: We look forward to continuing to address a major unmet need for researchers across the region.

David R. Horn: Last month, we were excited to launch our 2024 sphere insights grant program aimed to support innovative and collaborative researchers who required access to comprehensive unbiased per genomic insights to advance scientific discovery.

David R. Horn: Six hour these will receive grants to support studies ranging from 40 to 160 samples leveraging our cutting edge technology and expertise from sample preparation to data analysis.

Omid C. Farokhzad: We're looking forward to working with the scientific community to facilitate breakthroughs in the oncology, cardiometabolic, and neurology fields. We see these three therapeutic areas as key areas of growth for the proteograft product. We're accepting applications through mid-June, and the grant awards will be made in the third quarter.

David R. Horn: We're looking forward to working with the scientific community to facilitate breakthroughs in oncology cardio metabolic and neurology fields. We see these three therapeutic areas as key areas of growth for the project to our product suite.

Omid C. Farokhzad: We're accepting applications through mid June and the Grant awards will be made in the third quarter. We will complete these studies in our stack and grant piece will have an opportunity to present their findings at a prominent scientific conference in 2025.

Omid C. Farokhzad: We will complete the studies in our stack, and grantees will have an opportunity to present their findings at a prominent scientific conference in 2025, moving on to the validation of our technology. We have seven preprints, four peer-reviewed Seer publications, and three peer-reviewed Kastner publications showcasing the value of the Seer technology. Since our last earnings call, we were excited to see two more manuscripts from researchers at Auburn University go through the peer review process and be published.

David R. Horn: Moving on to the validation of our technology.

David R. Horn: To date, we have seven pre prints for peer reviewed publications and three peer reviewed customer publication showcasing the value of this new technology.

Omid C. Farokhzad: Since our last earnings call. We were excited to see tumor manuscript from researchers at Auburn University go through the peer review process and be published.

Omid C. Farokhzad: One paper was published in Facet and showcases the power of the protograph beyond plasma and biofluid samples that were exemplified in our applications lab. This paper shows how the proteograph enables the proteomic analysis of highly complex tissues, such as skeletal muscle, and provides insight into the cellular changes that happen during cellular senescence and aging. This tissue type has a wide dynamic range of protein expression levels with a dominance of certain key proteins similar to plasma.

David R. Horn: <unk> paper was published in facet and showcases the power of the paragraph beyond plasma by our fluid sample that was exemplified in our applications lab.

Omid C. Farokhzad: This paper shows how to Purdue graph enabled the Proteomic analysis of highly complex tissue, such as skeletal muscle and provides insight into the cellular changes that happen during cellular senescence and aging.

David R. Horn: This tissue type has a wide dynamic range of protein expression levels with the dominance of certain key proteins similar to plasma.

Omid C. Farokhzad: As such, skeletal muscle has been previously difficult to access for deep unfiltered proteomic analysis. This paper provides yet another example of the flexibility of the power of the Pertigraph product suite to analyze novel sample types and provide differentiated insights. The second paper was published in Aging and uses skeletal muscle samples to understand the molecular intricacies of aging and the effects of aging and resistance training on the proteomic profiling of skeletal muscle cells. Specifically, the study found that differences in non-myofibular and myofibular proteomes were evident between the younger and middle-aged cohorts.

Omid C. Farokhzad: As such skeletal muscle has been previously difficult to access for deep unbiased Proteomic analysis.

David R. Horn: This paper provides yet another example of the flexibility of the power of the <unk> product suite to analyse novel sample types and provide differentiated insights.

Omid C. Farokhzad: In addition, the most differentially expressed non-myofibular proteins were more enriched in middle-aged participants than younger participants. In summary, they found that aging and resistance training predominantly affect non-contractile protein skeletal models. The novel approach of this study allowed researchers to identify exercise-related protein targets and uncover previously undetected protein isoforms.

David R. Horn: The second paper was published in aging and use of skeletal muscle samples to understand molecular indices of aging and the effects of aging and resistance training on the proteomic profiling of skeletal muscle cells.

David R. Horn: Specifically the study found that difference has been non manual stapler and mild February proteome.

Omid C. Farokhzad: Were evident between the younger and Middle age cohorts. In addition, the most differentially expressed non myeloid triple-nerved proteins were more enriched and the middle east participants than younger participants.

David R. Horn: In summary, they found that aging and resistance training predominantly affect noncontract cell protein skeletal muscle.

Omid C. Farokhzad: The novel approach of this study allows researchers to identify exercise related protein targets and uncover previously undetected protein isoforms. These.

Omid C. Farokhzad: These studies further exemplify the differentiated biological insights that can be gained by investigating tissue samples using the Protograft product suite to better understand aging specifically and human health and biology more generally. In addition to these publications, we continue to see customers submitting manuscripts to preprint servers, which is commonly the first step to make a study publicly available while the manuscript is undergoing the peer review process for publication. In April, researchers from Columbia University Irving Medical Center submitted a manuscript to Research Square investigating the significance of various biofluids as important repositories of biomarkers for the early detection of diseases.

David R. Horn: These studies further exemplify the differentiated biological insights that can be gained by investigating tissue sample using the project with our product suite to better understand aging, specifically and human health and biology more generally.

David R. Horn: In addition to these publications, we continue to see customers submitting manuscripts to pre print servers, which is commonly the first step to make the study publicly available while the manuscript is undergoing the peer review process for publication.

David R. Horn: In April researchers from Columbia University, Irving Medical Center submitted a manuscript to research square investigating the significance of various buyer fluids.

David R. Horn: Portland repository of Biomarkers for early detection of diseases.

Omid C. Farokhzad: When comparing the Proteograph XT workflow with conventional approaches such as the NEAT plasma workflow, the researchers found that Proteograph XT demonstrated versatility when applied to various biofluids and outperformed other workflows in terms of plasma proteome depth, quantitative accuracy, and reproducibility, while offering complete automation of sample prep. This study underscores the critical role of the Pertigraf XT in advancing large studies to enable biomarker discovery and ultimately has the potential to improve the quality of patient care.

David R. Horn: When comparing the project graph XP workflow with conventional approaches such as needs plasma workflow. The researchers found that <unk> demonstrated versatility when applied to various buyer fluids and outperforms other workflows in terms of plasma proteome depth.

David R. Horn: Quantity of accuracy and reproducibility, while offering complete automation of sample prep.

Omid C. Farokhzad: This study underscores the critical role of the photograph XP in advancing large studies to enable biomarker discovery and ultimately has the potential to improve the quality of patient care.

Omid C. Farokhzad: We expect to see the number of presentations and publications continue to grow throughout the year. Last month at the American Association for Cancer Research, or AACR, annual meeting strike, a leader in quality control and sample stabilization in blood, presented data from a proof-of-principle study they conducted with Seer. Their study highlighted the performance of Strex's newly developed Protein Plus BCT, a blood collection tube designed specifically for proteomic applications. The STRECT data demonstrated unprecedented protein stability at room temperature across 4,000 proteins in plasma that can be quantitatively measured with the PROTOGRAF-XT and a mass spectrometer.

David R. Horn: We expect to see the number of presentations and publications continue to grow throughout the year.

David R. Horn: Last month at the American Association for cancer research or ACR annual meeting strict.

David R. Horn: A leader in quality controls and sample stabilization in blood presented data from the proof of principle study conducted with fear.

David R. Horn: Their study highlighted the performance of strikes newly developed protein plus PCT, a blood collection tubes designed specifically for Proteomic applications.

David R. Horn: District data demonstrated unprecedented protein stability at room temperature across 4000 proteins in plasma that can be quantitatively measure with the project graph XC and a mass spectrometer.

Omid C. Farokhzad: Seer uniquely provides the ability to look at low-abundance proteins given the sensitivity of the protograph assay. And the combination of the protein plus PCT and the proteograft product suite is equally powerful for the research, translational, and clinical community by decreasing pre-analytical variability using the robust and standardized sample collection process. And pairing that with a robust and standardized proteomics analysis workflow, you pave the path for deep, unbiased proteomics to be as easily accessible and scalable across different labs and organizations. This is particularly important as applications for proteomics continue to expand across a growing set of end markets, exactly as genomics has done over the past 20 years.

Omid C. Farokhzad: <unk> uniquely provides the ability to look at low abundance proteins, given the sensitivity of the Purdue graph assay.

Omid C. Farokhzad: And the combination of the protein plus PCT and the peripheral graft product suite is equally powerful for the research translational and clinical communities.

David R. Horn: By decreasing pre analytical variability using a robust and standardized sample collection process and.

David R. Horn: And pairing that with a robust and standardized for genomics analysis workflow you pave the path for deep unbiased towards genomics to be as easily accessible and scalable across different labs that organizations.

David R. Horn: This is particularly important as applications for proteomics continues to expand across a growing set of end markets exactly as genomics has done over the past 20 years.

Omid C. Farokhzad: Beyond Access, we've made important enhancements to our technology. For example, earlier this year, we made our protein discovery catalog broadly available. Our customers and prospective customers can now utilize the Discovery Catalog to prepare their research protocols and support grant submissions with publicly available data on the breadth of proteins that have been identified through the use of the protograph. We have made excellent progress expanding this library in the last few months, as we currently have over 36,000 proteins across human, mouse, and multiple modern organisms, converted 10,000 human proteins at launch across 1,900 pathways that can be detected and interrogated using the photograph.

David R. Horn: Beyond access we've made important enhancements to our technology.

David R. Horn: Earlier this year, we made a protein discovery catalog broadly available.

David R. Horn: Our customers and prospective customers can now utilize the discovery catalog to prepare their research protocols and support grants submissions with publicly available data and the breadth of proteins that have been identified through the use of a project graph.

David R. Horn: We have made excellent progress expanding this library in the last few months.

Omid C. Farokhzad: As we currently have over 36000 proteins across human mouse and multiple model organisms.

David R. Horn: 10000, human proteins as launch across 1900 pathways that can be detected and interrogated using the photograph.

Omid C. Farokhzad: The number of identified proteins will continue to grow as more mass spectrometry-based proteomics data becomes available. However, feedback has been overwhelmingly positive as scientists are able to add precision, insights, and opportunities for biomarker discovery to genomics and proteomics studies. We also continue to receive positive feedback on the power of the PortraGraph XP asset. As we've said, it has been extensively demonstrated that the Proteograph XT robustly amplifys the performance of any mass spectrometer between five and eightfold in achieving depth of proteomics coverage in complex samples.

David R. Horn: The number of identified proteins will continue to grow as more mass spec based proteomics data becomes available.

David R. Horn: Feedback has been overwhelmingly positive as scientists are able to add precision insights and opportunities for biomarker discovery to genomics and proteomics studies.

David R. Horn: We also continued to receive positive feedback on the power of the project graph <unk> assay.

David R. Horn: As we've said it has been extensively demonstrated that the <unk> XT robustly amplifies the performance of any mass spectrometer between five and eight fold in achieving depth of proteomics coverage in complex samples.

Omid C. Farokhzad: Importantly, the magnitude of this amplification has been consistent despite improvements in the generation of the mass spec over the past several years. This is because the protograph fundamentally solves a different problem than the mass spec system. For example, the number of proteins identified in a complex sample, such as plasma, with the leading Bruker-Temstov HD, is approximately 500 to 700 proteins.

David R. Horn: Importantly, the magnitude of this amplification has been consistent despite improvement in generation of the mass specs over the past several years.

David R. Horn: This is because the period, where fundamentally solve a different problem than the mass spec systems.

David R. Horn: For example, the number of proteins identified in a complex samples such as plasma with the leading broker Teamstaff HD is approximately 500 to 700 proteins.

Omid C. Farokhzad: However, when paired with the proteograph, XT, the number of protein IDs increases to 4,000 to 5,000 in any given sample. Similarly, the leading thermo-fissure scientific orbiter, Astral, can identify 700 to 900 proteins in plasma. However, when paired with the proteograph XT, the number of protein IDs in a given sample can increase to 6,000 to 7,000, and often 8,000 or more proteins can be identified across a given study.

David R. Horn: However, when paired with the Purdue graph XD the number of protein ivs increases to 4000 to 5000 in any given sample.

Omid C. Farokhzad: Similarly, the leading thermo Fisher scientific orbit Astro can identify 700 to 900 proteins in plasma <unk>.

David R. Horn: However, when paired with the appropriate graph XC the number of protein IV in a given sample increased to 6000 to 7000, and often 8000 or more proteins can be identified across a given study.

David R. Horn: Importantly, the proteograph enhances proteomics coverage using a simple and robust automated workflow. It's clear that this will be an important driver to unlock biological insights through proteomic data, and we're continuing to work to drive the inflection point of adoption of this technology. Looking ahead to the rest of 2024, we continue to execute against our core strategy of driving evidence and publications, continuing to enhance access to the protograph, innovate with our products, and expand our application. With that, I will now turn the call over to David. Thanks, Omid.

David R. Horn: <unk>, the protium <unk> enhances proteomics coverage using a simple and robust automated workflow.

David R. Horn: It's clear that this will be an important driver to unlock biological insights through proteonomic data and we're continuing to work to drive the inflection point of adoption of this technology.

David R. Horn: Looking ahead to the rest of 2024, we continue to execute against our core strategies of driving evidence and publications.

David R. Horn: Continuing to enhance access to the product graph.

David R. Horn: Innovate with our products and expand our applications with that I will now turn the call over to David.

David R. Horn: Thanks, Amit.

David R. Horn: Total revenue for the first quarter of 2024 was $3.1 million, representing a decrease of 24% compared to $4.1 million in the first quarter of 2023. This was primarily due to a decrease in product and related party revenue. Revenue recognized primarily consisted of sales of the Protograph SP-100 instrument, consumable kits, and service revenue, of which a million dollars was attributed to related parties. Product revenue for the first quarter of 2024 was $2.5 million, including $828,000 of related party revenue, and consisted of sales of SP-100 instruments and consumable gear.

David R. Horn: Total revenue for the first quarter of 2024 was $3 1 million.

David R. Horn: Representing a decrease of 24% compared to $4 1 million in the first quarter of 2023 and was primarily due to a decrease in product and related party revenue.

David R. Horn: Revenue recognized primarily consisted of sales of the paragraph SP 100 instrument.

David R. Horn: <unk> kits and service revenue of which $1 million attributed to related parties.

David R. Horn: Product revenue for the first quarter of 2024 was $2 5 million, including $828000 of related party revenue and consisted of sales of SB 100 instruments and consumable kits.

David R. Horn: This quarter, several customers purchased instruments that were placed through our SIP program, demonstrating the value these customers see in the protograph once it is in their hands. However, we did see continued pressure on CAPEX budgets and elongated sales cycles for the outright purchase of new instrumentation. Consumable kit purchases were also lower, primarily related to lower related party consumable sales.

David R. Horn: This quarter several customers purchase instruments that were placed through our CIT program demonstrating the value of these customers see in the paragraph once it is in their hands.

David R. Horn: We did see continued pressure on capex budgets and elongated sales cycles for the outright purchase of new instrumentation consumable kit purchases were also lower primarily related to lower related party consumable sales.

David R. Horn: Service revenue was $534,000 in the first quarter of 2024, including $126,000 of related party revenue, and primarily consisted of revenue related to stacked service projects. As Omid mentioned, in the first quarter, we prioritized running projects for key strategic studies that will result in additional presentations and publications in the near term but were conducted at a lower price point than our typical stacked service project. Grant and other revenue was $36,000 for the first quarter of 2024 and consisted of leasing and shipping revenue.

David R. Horn: Service revenue was $534000 in the first quarter of 2024, including $126000 of related party revenue and primarily consisted of revenue related to stack service projects as Hamid mentioned in the first quarter, we prioritize running projects for key strategic studies that will result in additional presentations and publications in the near term.

David R. Horn: But were conducted at a lower price point than our typical stack service projects.

David R. Horn: Grant and other revenue was $36000 for the first quarter of 2024 and consisted of leasing in shipping revenue as we mentioned on our previous earnings call. We utilized the remaining funds available under the SPR Grant and do not anticipate booking any more revenue under this grant in 2024.

David R. Horn: As we mentioned on our previous earnings call, we utilize the remaining funds available under the SBIR grant and do not anticipate booking any more revenue under this grant in 2024. Total gross profit was $1.4 million for the first quarter of 2024, representing a gross margin of 44%, compared to $2.1 million in the first quarter of 2023, representing a gross margin of 51%. Gross margins were impacted by higher installation, training, and warranty costs and lower overhead absorption due to lower overall volumes in the quarter.

David R. Horn: Total gross profit was $1 4 million for the first quarter of 2024, representing a gross margin of 44% compared to $2 1 million in the first quarter of 2023, representing a gross margin of 51% gross margins were impacted by higher installation training and warranty costs and lower overhead absorption due to lower overall.

David R. Horn: Volumes in the quarter.

David R. Horn: We continue to expect variability in our gross margin on a quarter-by-quarter basis. The proportion of instrument, consumable, and service revenue will fluctuate for any given quarter. Total operating expenses for the first quarter of 2024 were $26.6 million, including $7.6 million of stock-based compensation, a decrease of 10% compared to $29.5 million, including $8.7 million of stock-based compensation, in the first quarter of 2023. Research and development expenses for the first quarter of 2024 were $12.3 million, a decrease of 15% compared to $14.5 million in the first quarter of 2023.

David R. Horn: To expect variability in our gross margin on a quarter by quarter basis since the proportion of instrument consumable and service revenue will fluctuate for any given quarter.

David R. Horn: Total operating expenses for the first quarter of 2024 were $26 6 million.

David R. Horn: Including $7 6 million of stock based compensation, a decrease of 10% compared to $29 5 million, including $8 7 million of stock based compensation in the first quarter of 2023.

David R. Horn: The decrease in R&D expenses was primarily due to a decrease in employee and stock-based compensation expenses and a decrease in laboratory expenses. Selling general and administrative expenses for the first quarter of 2024 were $14.3 million, a decrease of 5% compared to $15 million in the first quarter of 2023. The decrease in SG&A expenses was primarily driven by a decrease in employee and stock-based compensation expenses.

David R. Horn: Research and development expenses for the first quarter of 2024 were $12 $3 million a.

David R. Horn: A decrease of 15% compared to $14 5 million in the first quarter of 2023 the.

David R. Horn: The decrease in R&D expenses was primarily due to a decrease in employee stock based compensation expenses and a decrease in laboratory expenses.

David R. Horn: Selling general and administrative expenses for the first quarter of 2024 were $14 3 million.

David R. Horn: A decrease of 5% compared to $15 million in the first quarter of 2023. The decrease in SG&A expenses was primarily driven by a decrease in employee and stock based compensation expenses.

David R. Horn: The net loss for the first quarter of 2024 was $20.7 million, compared to $24 million in the first quarter of 2023. We ended the quarter with approximately $359.2 million in cash, cash equivalents, and investments. Given our strong cash position, the fundamental belief in the long-term value of our solution, and the continued dislocation in our current share price, our Board of Directors has authorized an open market share purchase program of up to $25 million.

David R. Horn: Net loss for the first quarter of 2024 was $20 7 million.

David R. Horn: Compared to $24 million in the first quarter of 2023.

David R. Horn: We ended the quarter with approximately $359 2 million in cash cash equivalents and investments.

David R. Horn: This authorized share repurchase program will be effective upon the opening of our trading window, which will allow us to repurchase shares in the open market from time to time. Even with this return of capital to our shareholders, we are confident our balance sheet provides us with ample cash runway to reach our strategic objectives over the long term. Turning to our outlook for the year, we now expect revenue to be in the range of $16-18 million for 2024, which is in line with our revenue in 2023.

David R. Horn: This authorized share repurchase program will be effective upon the opening of our trading window, which will allow us to repurchase shares in the open market from time to time, even with this return of capital to our shareholders. We are confident in our balance sheet provides us with ample cash runway to reach our strategic objectives over the long term.

David R. Horn: Turning to our outlook for the year, we now expect revenue to be in the range of $16 million to $18 million for 2024, which is in line with our revenue from 2023.

David R. Horn: We continue to expect revenue to be more weighted to the second half of the year. We are committed to maintaining a strong financial position and are taking a very disciplined approach with our spend. Given that our revenue ramp continues to develop more slowly than anticipated, we feel it is necessary to reduce our operating expenses in order to align our cash burn with our revised revenue expectations. As Omid shared, we have implemented a reduction in force of approximately 10% of our workforce.

David R. Horn: We continue to expect revenue to be more weighted to the second half of the year.

David R. Horn: We are committed to maintaining a strong financial position and are taking a very disciplined approach with our spend given that our revenue ramp continues to develop more slowly than anticipated. We feel it is necessary to reduce our operating expenses in order to align our cash burn with our revised revenue expectations.

David R. Horn: As Amit shared we have implemented a reduction in force of approximately 10% of our workforce. This action represents a strategically alignment of our resources towards our commercial efforts. We're also taking measures to reduce our non personnel operating expenses for 2024.

David R. Horn: This action represents a strategic alignment of our resources towards our commercial efforts. We are also taking measures to reduce our non-personal operating expenses for 2024. While it is always difficult to make these changes, we feel this is a necessary step for us to position the organization for success over the long term. Free cash flow loss was approximately $11.2 million for the first quarter of 2024.

David R. Horn: It is always difficult to make these changes we feel this is necessary step for us to position the organization for success over the long term.

David R. Horn: Free cash flow loss was approximately $11 2 million for the first quarter of 2024 and as previously stated we estimate that our 2024 of free cash from loss will be less than our free cash flow loss in 2023.

David R. Horn: And as previously stated, we estimate that our 2024 free cash flow loss will be less than our free cash flow loss in 2020. At this point, I would like to turn the call back to Omid for closing comments. Thank you, David.

Omid: At this point I would like to turn the call back to Amit for closing comments.

Omid C. Farokhzad: We remain committed to reducing barriers to the commercial adoption of our technology. The journey to commercialize innovative technology is never linear. I continue to be grateful to our team for their hard work and dedication they put in every day.

Amit: Thank you, David we remain committed to reducing barriers to the commercial adoption of our technology to journey to commercialize innovative technology is never linear.

Amit: I continue to be grateful to our team for their hard work and dedication they are putting in everyday.

Omid C. Farokhzad: I'm confident in our technology and believe that as our publication base expands, we will see increased adoption of our technology. I look forward to keeping you updated on our progress. With that, we will now open it up to questions. Operator?

Amit: I am confident in our technology and believe that as our publication base expense, we will see increased adoption of our technology I look forward to keeping you updated on our progress with that we will now open it up to questions operator.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Speaker Change: Thank you at this time, we will conduct a question and answer session.

Speaker Change: Reminder, to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Yuko Oko of Morgan Stanley. Your line is now open.

Speaker Change: Please standby, while we compile the Q&A roster.

Yuko Oku: Our first question comes from the line of <unk>.

Morgan Stanley: Morgan Stanley Your line is now open.

Yuko Oko: Hello, thank you for taking my question about lowering the barrier for access to mass spec via stacks for genomics customers. Could you talk about the proportion of stock customers coming from genomics researchers versus traditional mass spec researchers? This is Omid.

Morgan Stanley: Thank you for taking my question.

Morgan Stanley: With respect to lowering the barrier for access.

Morgan Stanley: Temasek via stock for genomics customers could you talk to the proportion of staff customers coming from genomics researchers versus traditional mastectomy.

Morgan Stanley: Yes.

Omid C. Farokhzad: Thanks for the question. The customer base is actually relatively similar, meaning there are customers of Stack who actually have in-house mass spectrometers. And just because of capacity constraints, they send their masks back to us.

Amin: Because this is amin. Thanks, thanks for the question.

Speaker Change: I think the.

Amin: The.

Omid: The customer base is actually.

Amin: Relatively similar meaning there are customers of stack.

Omid: Actually have in house mass spec.

Amin: And just because of capacity constraints.

Morgan Stanley: Hey.

Morgan Stanley: They send their mass spec to US no. We don't do any mass spec services for any non SR customers, meaning customers, who send their mass spec to us. These are proteus graph owners, who are running the project rock and house have access to a mass.

Omid C. Farokhzad: Now, we don't do any mask-backed services for any non-Seer customer, meaning the customers who send their masks back to us are Proteograph owners who are running the Proteograph in-house, have access to a mass spec in-house, but choose, because of ease and capacity reasons, to leverage our mass fax. We have some customers like that on the stack and serve those customers. But the lion's share of the customer base is actually customers who don't have access to a proteograph or a mass second house, and they end up with end-to-end services at our stack.

Morgan Stanley: In house.

Morgan Stanley: But choose because of the ease and capacity leases two levers are mass specs, we have some customers like that and this fact that serve those customers.

Morgan Stanley: But the lion's share of the customer base is actually the customers who don't have.

Morgan Stanley: Access to appropriate graph or a mass second house and they end up with end to end services.

Morgan Stanley: At our stack.

Speaker Change: Got it thank you for that.

Omid C. Farokhzad: And then, with green shoots and biotech funding being called out by many of your peers, why am I... Yeah, Yuko, this is David. Thanks for the question. What we certainly saw in the first quarter was some budget impact from biopharma, for sure, certainly the large biopharmas. We had a couple of deals, actually, that we were expecting that got pushed for budgetary reasons.

Speaker Change: And then with Green shoots in biotech funding being called out by many of your peers may be too early for environment to be improving do you feel that sentiment is turning.

Omid C. Farokhzad: Yes.

Morgan Stanley: This is David Thanks for thanks for the question.

David: What we certainly saw in the first quarter is.

David R. Horn: Some budget impact from Biopharma for sure.

David R. Horn: Certainly the large biopharma as we had.

Morgan Stanley: Couple of deals actually that we were expecting that got pushed for budgetary reasons. So we're still seeing an impact.

David R. Horn: So we're still seeing an impact. That said, the use of stack by some of our smaller biotech firms has been good. So to your point around green shoots, I do think it kind of depends.

Morgan Stanley: That said.

David R. Horn: The use of <unk>.

Morgan Stanley: Stack by some of our smaller biotech firms.

Morgan Stanley: Has been has been.

Speaker Change: Good so to your point around Green shoots I do think it it kind of depends I think in the case of large biopharma the adoption of new technologies, especially where it requires capex can still be challenging where it's a service model stack model I think were seeing good reception there.

David R. Horn: I think in the case of large biopharma, the adoption of new technologies, especially where it requires CapEx, can still be challenging. Where it's a service model, or a stack model, I think we're seeing good reception there. Again, it depends, obviously, on the company and the situation.

Speaker Change: So again I think it depends obviously on the company and in this situation, but but again, we are still seeing some some headwinds.

David R. Horn: But again, we are still seeing some headwinds, depending on the account type. All right. Thank you. One moment for our next question. Our next question comes from the line of Rachel Fattenstall of J.P. Morgan. Your line is now open. Hi, thank you for taking the questions. This is Marta Nazarovets on behalf of Rachel Fattenstall of J.P. Morgan.

Speaker Change: Depending on the account type.

Speaker Change: Got it thank you very much.

Speaker Change: Alright, thank you.

Marta Nazarovets: For our next question.

Rachel Marie Vatnsdal Olson: Our next question comes from the line of Rachel install of Jpmorgan. Your line is now open.

Rachel Marie Vatnsdal Olson: Hi, Thank you for taking my question.

Marta Nazarovets: Hi, J P Morgan.

Marta Nazarovets: So I wanted to touch a little bit on your updated guidance. Can you perhaps discuss the two key timeline expectations and then touch a little bit more on seasonality through the year, and then talk about your visibility into the second half of the year? Sorry, Marta, the first part of your question, you wanted the two key timeline expectations; I missed what you asked.

Rachel: I wanted to touch on all of it on you.

Rachel Marie Vatnsdal Olson: Adam.

Rachel: Can you perhaps with.

Speaker Change: Thank you Tom.

Rachel Marie Vatnsdal Olson: Top line expectation and then touch on seasonality.

Rachel Marie Vatnsdal Olson: For the year, and then talk about it yet.

Marta Nazarovets: Okay.

Speaker Change: Okay, sorry, the first part of your question you wanted the two key I missed what you asked.

David R. Horn: Just, like, two key top-line expectations. Got it, 2Q top line, got it, okay. So in terms of, you know, 2Q, we don't give quarterly guidance. I think what we're seeing is we're continuing to see lots of opportunities in the pipeline. It's just a question of, you know, the elongated sales cycle through that pipeline in terms of how quickly we can move those through. So I'd say 2Q, we're going to continue to be conservative in our outlook, just given what we see and some of the headwinds we've been facing. In terms of the, you know, seasonality, I do think we'll continue to see the seasonality we've seen in years past.

Speaker Change: And just like <unk>.

Speaker Change: <unk> top line expectation.

Speaker Change: Got it <unk> topline got it okay.

Speaker Change: So in terms of.

Speaker Change: No.

Speaker Change: <unk>, we don't we don't give quarterly guidance I think what we're seeing is we're continuing to see.

Speaker Change: Lots of opportunities in the pipeline. It's just a question of the elongated sales cycle through that pipeline in terms of how quickly we can move those through so I'd say at <unk>, we're going to continue to be conservative in our outlook.

Speaker Change: Just given what we see in some of the headwinds we've been facing.

Rachel Marie Vatnsdal Olson: In terms of the seasonality I do think we'll continue to see the.

Rachel Marie Vatnsdal Olson: The seasonality we've seen in years past.

David R. Horn: I think certainly the revenue will be more second half weighted in terms of what we see. We certainly have some interesting publications coming out. We expect in the second, late second, early third quarter, which we think is going to help drive interest, continued interest in the platform. And so we do, you know, we do experience the same seasonality that the industry generally sees, which is, you know, a very strong kind of fourth quarter is the, is, is, kind of, the strongest quarter of the year, given where people are in their cycles and things.

David R. Horn: I think certainly the revenue will be more second half weighted in terms of what we see we certainly have some interesting publications coming out we expect in the second late second early third quarter, which we think was going to help.

Rachel Marie Vatnsdal Olson: Drive interest continued interest in the platform.

David R. Horn: So we do.

Rachel Marie Vatnsdal Olson: We do experience the same seasonality that the industry generally sees which is.

David R. Horn: A very strong fourth quarter as the as the.

David R. Horn: It's kind of the strongest quarter of the year, given where people are in their in their cycles and things. So we would expect the same here and certainly with our with our.

David R. Horn: So we would expect the same here. And certainly with our, you know, with our year being back-end weighted. Thank you, that's helpful.

David R. Horn: With our year being backend weighted.

Marta Nazarovets: And then can you talk about stack traction a bit more? You touched on it on the call a little bit, but I remember last quarter you said that you had 48 organizations that are using stack. How many do you have as of now?

Speaker Change: Thank you that's helpful. And then can you talk about stock traction of that more of a question on the call out that number.

Rachel Marie Vatnsdal Olson: Nonetheless.

Rachel Marie Vatnsdal Olson: Hunter you talked that you have 48 archiving Paulson stock how many do you have as of now and then they still have a backlog of projects.

Marta Nazarovets: And then, do you still have a backlog of projects? And then, lastly, on stack, can you talk about your visibility on the revenue layer, especially now that you're opening the center in Europe? Yeah, thanks so much.

Rachel Marie Vatnsdal Olson: And then lastly on facts, who will talk about it that way.

Marta Nazarovets: Goodbye.

Marta Nazarovets: Especially now.

Marta Nazarovets: Yeah.

Rachel Marie Vatnsdal Olson: Yeah.

Speaker Change: Yes, thanks, so much.

Omid C. Farokhzad: I don't have an update in terms of... The updated total customer number beyond what I mentioned last time, the stack continues to run at capacity, and we expect that to be the case through Q2 and also into Q3, and my visibility for it is that this fact was exactly what the market needed.

Marta Nazarovets: I don't have an update in terms of.

Rachel Marie Vatnsdal Olson: The updated total customer.

Omid C. Farokhzad: Number beyond what I mentioned last time.

Omid C. Farokhzad: The stock continues.

Rachel Marie Vatnsdal Olson: To run at capacity.

Rachel Marie Vatnsdal Olson: And we expect that to be the case.

Rachel Marie Vatnsdal Olson: Through Q2, and also into Q3 and my visibility for it is that.

Rachel Marie Vatnsdal Olson: <unk>.

Rachel Marie Vatnsdal Olson: This fact was exactly what the market needed meaning.

Omid C. Farokhzad: The purpose of establishing it in the U.S. was to lower the barrier for a potential customer to access the proteograph data. It was also meant to lower the barrier for a potential customer to bring in a proteograph when they're relatively unfamiliar with the mass spec. And so we didn't want that lack of familiarity with the mass spec to be a hindrance to taking a photograph in-house.

Rachel Marie Vatnsdal Olson: The purpose.

Rachel Marie Vatnsdal Olson: All of establishing it in U S.

Omid C. Farokhzad: Was to lower the barrier.

Omid C. Farokhzad: Before a potential customer.

Rachel Marie Vatnsdal Olson: To access to peripheral graph data.

Rachel Marie Vatnsdal Olson: It was also meant to lower the barrier for a potential customer to bring in the Proteus graph, where theyre relatively unfamiliar with the mass spec and so we didn't want that lack of familiarity with the mass spec to be a hindrance.

Omid C. Farokhzad: Two taking.

Omid C. Farokhzad: Taking a poor geographic in house and.

Omid C. Farokhzad: In that context, the SAC has done exactly what we had hoped. By the way, so has the SIP program in terms of lowering the barrier. And the challenge for us was that we were serving US customers but not European customers, given the GDPR rules about data, etc., going across the ocean. Now we're opening the European SAC, and we'll be able to provide similar types of services to our European customers. And as I mentioned earlier to Yuko, the customer base really is diverse.

Omid C. Farokhzad: In that context. The fact has done exactly what we had hoped by the way so has the Sip program.

Rachel Marie Vatnsdal Olson: In terms of lowering barrier.

Omid C. Farokhzad: And the challenge for US was that we were serving U S customers.

Omid C. Farokhzad: But not European customers, given the <unk> rules with data et cetera going across the ocean and now we opening the Europeans that we'll be able to provide similar types of services to our European customers.

Omid C. Farokhzad: And as I mentioned earlier.

Rachel Marie Vatnsdal Olson: Two <unk>.

Omid C. Farokhzad: The customer base really it's diverse it's both.

Omid C. Farokhzad: It's both customers that have a protograph in-house that may or may not have a mass spec in-house, but it's also genomic customers, some of them folks that want to do large-scale studies that get access to the stack for end-to-end services. So my expectation is that the stack will continue to be an important source of product adoption for us, but it really is not meant for us to pivot into a service business, and I mentioned that the very, very first time that we announced the stack, it was really meant to facilitate adoption of our platform. Great, thank you.

Omid C. Farokhzad: Customers that had a positive gap in house that may or may not have a mass that can house, but it's also genomic customers some of them.

Omid C. Farokhzad: Folks that wanted to do large scale studies.

Omid C. Farokhzad: Get that get access to the stack for end to end services.

Omid C. Farokhzad: So my expectation is that stack will continue.

Omid C. Farokhzad: To be an important.

Omid C. Farokhzad: Source of product adoption for us, but it really is not meant for us to pivot into a service business and I mentioned that the very very first time that we announced the stock it's really meant to facilitate adoption of our platform.

Omid C. Farokhzad: Sure.

Speaker Change: Great. Thank you.

Speaker Change: Alright, thank you.

Speaker Change: I am showing no further questions at this time.

Speaker Change: This does conclude the question and answer session and the program.

Operator: All right, thank you. I am showing no further questions at this time. This does conclude the question and answer session and the program. Thank you for your participation in today's conference. You may now disconnect. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? Good day and thank you for standing by.

Speaker Change: You for your participation in today's conference you may now disconnect.

Operator: Okay.

Operator: [music].

Operator: Welcome to the Seer, Inc. First Quarter 2024 Earnings Conference 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 during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker Change: Good day, and thank you for standing by and welcome to the sphere, Inc. First quarter 2024 earnings Conference call.

Operator: At this time all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session.

Operator: To ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising your hands raised.

Carrie Mendivil: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Carrie Mendivil, Investor Relations. Please go ahead.

Operator: To withdraw your question. Please press star one again.

Carrie Mendivil: Please be advised that today's conference is being recorded.

Carrie Mendivil: Now I'd like to hand, the conference over to your first speaker today, Carrie Mendivil Investor Relations. Please go ahead.

Carrie Mendivil: Thank you.

Carrie Mendivil: Thank you. Earlier today, Seer released financial results for the quarter ended March 31, 2024. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send an email to investor@seer.by. Joining me today from Seer are Omid Farokhzad, Chief Executive Officer and Chair, and David Horn, President and Chief Financial Officer. Before I begin, I'd like to remind you that management will make statements during this call that are 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.

Carrie Mendivil: Earlier today <unk> released financial results for the quarter ended March 31 2024.

Speaker Change: Not received this news release or if you'd like to be added to the company's distribution list Nathan in Altra investor at <unk> Dot bio joining me today from <unk> is that my first thought Chief Executive Officer, and chair and David Ward, President and Chief Financial Officer.

Carrie Mendivil: Before we begin I'd like to remind you that management will make statements. During this call that are forward looking statements within the meaning of federal securities laws.

Carrie Mendivil: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

Carrie Mendivil: Additional information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release issued today for a more complete list and description. Please see the risk factors section of the company's quarterly report on Form 10-Q for the year ended March 31, 2024 analysts other filings with the Securities and Exchange Commission.

Omid: This conference call contains time sensitive information and is accurate only as of the live broadcast may eight 2024 with that I'd like to turn the call over to Tony.

Omid C. Farokhzad: Thanks, Carrie, and thank you, everyone, for joining us this afternoon. I will begin our call today by providing updates on our business, and I will then turn the call over to David to provide more details on our financial results for the first quarter of 2024 and our outlook for the year. We remain incredibly bullish on the potential of our technology to transform our understanding of the proteome. Photographed data produced and presented by our customers is truly outstanding, and we fundamentally believe in the long-term value of our differentiated technology. However, the pace of adoption and utilization of the Proteograph platform is not yet on track with our expectations.

Omid: Thanks, Carrie and thank you everyone for joining us this afternoon.

Omid C. Farokhzad: I will begin our call today by providing updates on our business.

Omid C. Farokhzad: I'll, then turn the call over to David to provide more details on our financial results for the first quarter of 2024, and our outlook for the year.

Omid C. Farokhzad: We remain incredibly bullish.

Omid C. Farokhzad: Potential of our technology to transform our understanding of the proteome.

Omid C. Farokhzad: Put a graph data produced and presented by our customers.

Omid C. Farokhzad: He is truly outstanding and we fundamentally believe in the long term value of our differentiated technology.

Omid C. Farokhzad: However, the pace of adoption and utilization of the <unk> platform is not yet on track with our expectations.

Omid C. Farokhzad: As we have previously stated, an important factor driving adoption and utilization is the demonstration of the biological insights provided by the protographs in the form of peer-reviewed publications from our customers. To that end, we've had several important papers published in recent months and have a strong pipeline of customer publications that will be forthcoming in high-impact journals throughout the year. First quarter revenue came in at $3.1 million, as we continue to experience headwinds to adoption of the Pornograph product, in large part due to the elongated sales cycles from the paucity of publications as well as ongoing macro challenges.

Omid C. Farokhzad: As we have previously stated and an important factor to driving adoption and utilization is a demonstration of the biological insight provided by the project in the form of peer reviewed publications from our customers.

Omid C. Farokhzad: To that end we've had several important papers published in the recent months and have a strong pipeline of customer publications that will be forthcoming in high impact journals throughout the year.

Omid C. Farokhzad: First quarter revenue came in at $3 1 million as we continued to experience headwinds to adoption of the paragraph product suite and large part due to the elongated sales cycles from the possibly of publications as well as ongoing macro challenges.

Omid C. Farokhzad: Given our performance in the first quarter and the current pace of adoption. We now expect 2020 for revenue to be in the range of $16 million to $18 million.

Omid C. Farokhzad: Until we see an inflection in revenue, we're focusing our resources on our commercial organization, while reducing our cash burn to preserve our strong balance sheet.

Omid C. Farokhzad: Yeah.

Omid C. Farokhzad: Third, we're implementing an approximately 10% reduction in force outside of our commercial organization to further reduce our use of capital until adoption and revenue growth accelerates. Finally, given our strong balance sheet, prudent use of capital, and fundamental belief in the long-term value of the Seer platform, we believe there is a dislocation between our long-term value relative to our current share price. Therefore, we're putting in place an open market share repurchase program for up to $25 million.

Omid C. Farokhzad: In line with the strategic direction, we're taking the following actions first we are continuing to invest in and expand our commercial team to ensure we have the right people in place to drive adoption education and awareness by the Protium <unk> product suite.

Omid C. Farokhzad: Second.

Omid C. Farokhzad: We're launching the additional senior technology access center located in Europe, providing end to end services from sample to data for our European customers.

Omid C. Farokhzad: Third we're implementing an approximately 10% reduction in force.

Omid C. Farokhzad: Outside of our commercial organization to further reduce our use of capital until adoption and revenue growth accelerate.

Omid C. Farokhzad: Finally, given our strong balance sheet prudent use of capital and fundamental belief in the long term value of this platform. We believe there is a dislocation in our long term value relative to our current share price.

Omid C. Farokhzad: Therefore, we're putting in place an open market share repurchase program for up to $25 million.

Omid C. Farokhzad: We're confident our cash balance provides us with ample runway to reach our strategic objectives of becoming the definitive two leaders in proteomics. Now I'd like to share some of the progress we've made across our business, starting with enhancing access to the Proteograph products. Our Strategic Instrument Placement Program, or SIPP, has continued to remove barriers by utilizing available operating budgets, allowing researchers to begin using the protograph right away. Notably, during the first quarter, we saw multiple customers purchase their instruments that had been placed through the SIP, a testament to the value and quality of the data generated by the protographs.

Omid C. Farokhzad: We're confident our cash balance provides us with ample runway to reach our strategic objectives of becoming the definitive two leaders in proteomics.

Omid C. Farokhzad: Additionally, we continue to serve customers through the stack, which allows the proteograph user to run samples in their own lab and have Seer run the mass spec, or alternatively, provide end-to-end study services from sample to end. SAC is an important accelerator in the accessibility of unbiased proteomics data given the elongated cell cycle due to continued funding and macro challenges.

Omid C. Farokhzad: Now I'd like to share some of the progress we've made across our business starting with enhancing access to the peripheral graft product suite.

Omid C. Farokhzad: Notably during the first quarter, we saw multiple customers purchased their instruments that had been placed through the Sip.

Omid C. Farokhzad: Testament to the value and quality of the data generated by the progress.

Omid C. Farokhzad: Additionally, we continue to serve customers through the stack, which allows the protium <unk> user to run samples in their own lab and Thats sphere run the math back or Alternatively provide end to end study services from sample to answer.

Omid C. Farokhzad: Stack is an important accelerated in the accessibility of unbiased proteomics data given the elongated sales cycles due to continued funding and macro challenges.

Omid C. Farokhzad: Increased accessibility will continue to catalyze the generation of third party data and publications further highlighting the transformative potential of the Purdue graph during the first quarter, we prioritize running samples for high value accounts with largest studies at lower price points that will serve as a key reference.

Omid C. Farokhzad: Customers to drive continued adoption of our technology.

Omid C. Farokhzad: We expect these customers will present and publish their studies in the upcoming months further reinforcing the differentiated value proposition of our technology.

Omid C. Farokhzad: While we continue to operate STAC at its capacity, the prioritization of these studies resulted in lower STAC revenue for the quarter. Given the success we've seen with SAC in the US, we're excited to expand into Europe with the launch of the SAC lab in Germany next month.

Omid C. Farokhzad: While we continue to operate stack at its capacity the prioritization of these studies resulted in the lowest that revenue for the quarter.

Omid C. Farokhzad: Given the success, we've seen with the stack in the U S. We're excited to expand into Europe with the launch of this stack lap in Germany next month.

Omid C. Farokhzad: This will give researches in Europe, the ability to unlock biological insight through comprehensive deep unbiased proteomics research.

Omid C. Farokhzad: We look forward to continuing to address a major unmet need for researchers across the region.

Omid C. Farokhzad: Last month, we were excited to launch our 2020 for insights Grant program aimed to support innovative and collaborative researchers who required access to comprehensive unbiased per genomic insights to advance scientific discovery.

Omid C. Farokhzad: Six hour these will receive grants to support studies ranging from 40 to 160 samples leveraging our cutting edge technology and expertise from sample preparation to data analysis.

Omid C. Farokhzad: We're looking forward to working with the scientific community to facilitate breakthroughs in oncology cardio metabolic and neurology fields. We see these three therapeutic areas as key areas of growth for the project product suite.

Omid C. Farokhzad: We're accepting applications through mid June and the Grant awards will be made in the third quarter. We will complete these studies in our stack and Grand piece will have an opportunity to present their findings at a prominent scientific conference in 2025.

Omid C. Farokhzad: We will complete the studies in our stack, and grantees will have an opportunity to present their findings at a prominent scientific conference in 2025, moving on to the validation of our technology today. We have seven preprints, four peer-reviewed Seer publications, and three peer-reviewed customer publications showcasing the value of the Seer technology. Since our last earnings call, we were excited to see two more manuscripts from researchers at Auburn University go through the peer review process and be published.

Omid C. Farokhzad: Moving on to the validation of our technology.

Omid C. Farokhzad: To date.

Omid C. Farokhzad: We have seven pre prints for peer reviewed publications and three peer reviewed customer publication showcasing the value of this new technology.

Omid C. Farokhzad: Since our last earnings call. We were excited to see tumor manuscript from researchers at Auburn University go through the peer review process and be published one paper was published in <unk> and showcases the power of the paragraph beyond plasma by fluid samples that was it.

Omid C. Farokhzad: One paper was published in Facet and showcases the power of the protograph beyond plasma and biofluid samples that were exemplified in our applications lab. This paper shows how the proteograph enables the proteomic analysis of highly complex tissues such as skeletal muscle and provides insight into the cellular changes that happen during cellular senescence and aging. This tissue type has a wide dynamic range of protein expression levels with a dominance of certain key proteins similar to plasma.

Omid C. Farokhzad: Example of five indoor applications lab.

Omid C. Farokhzad: This paper shows how to predict graph enabled the proteomic analysis of highly complex issues, such as skeletal muscle and provides insight into the cellular changes that happen during cellular senescence and aging.

Omid C. Farokhzad: This tissue type has a wide dynamic range of protein expression levels with the dominance of certain key proteins similar to plasma.

Omid C. Farokhzad: As such, skeletal muscle has been previously difficult to access for deep unbiased proteomic analysis. This paper provides yet another example of the power of the Pertigraph product suite to analyze novel sample types and provide differentiated insights. The second paper was published in Aging and uses skeletal muscle samples to understand the molecular intricacies of aging and the effects of aging and resistance training on the proteomic profiling of skeletal muscle cells. Specifically, the study found that differences in non-myofibular and myofibular proteomes were evident between the younger and middle-aged cohorts.

Omid C. Farokhzad: As such skeletal muscle has been previously difficult to access for deep unbiased Proteomic analysis.

Omid C. Farokhzad: This paper provides yet another example of the flexibility of the power of the Purdue graft product suite to analyse novel sample types and provide differentiated insights.

Omid C. Farokhzad: In addition, the most differentially expressed non-myofibrillar proteins were more enriched in middle-aged participants than younger participants. In summary, they found that aging and resistance training predominantly affect non-contractile protein skeletal models. The novel approach of this study allowed researchers to identify exercise-related protein targets and uncover previously undetected protein isoforms.

Omid C. Farokhzad: The second paper was published in aging and use at skeletal muscle samples to understand molecular indices of aging and the effects of aging and resistance training under proteomic profiling of skeletal muscle cells.

Omid C. Farokhzad: Specifically this study found that difference has been non manual stapler and minus <unk> proteome.

Omid C. Farokhzad: Were evident between the younger and middle age cohorts. In addition.

Omid C. Farokhzad: Most differentially expressed non fibrillar proteins were more enriched in middle aged participants than younger participants.

Omid C. Farokhzad: In summary, they found that aging and resistance training predominantly affect noncontract cell protein skeletal muscle.

Omid C. Farokhzad: The novel approach of this study allows researchers to identify exercise related protein targets and uncover previously undetected protein isoforms. These.

Omid C. Farokhzad: These studies further exemplify the differentiated biological insights that can be gained by investigating tissue sample of using the product with our product suite to better understand aging, specifically and human health and biology more generally.

Omid C. Farokhzad: In addition to these publications, we continue to see customers submitting manuscripts to pre print servers, which is commonly the first step to make the study publicly available while the manuscript is undergoing the peer review process for publication.

Omid C. Farokhzad: In April researchers from Columbia University, Irving Medical Center submitted a manuscript of research square investigating the significance of various buyer fluids.

Omid C. Farokhzad: Important repository that biomarkers for early detection of diseases.

Omid C. Farokhzad: When comparing the Proteograph XT workflow with conventional approaches such as the plasma workflow, the researchers found that Proteograph XT demonstrated versatility when applied to various biofluids and outperformed other workflows in terms of plasma proteome depth, quantitative accuracy, and reproducibility, while offering complete automation of sample prep. This study underscores the critical role of the Pertigraf XT in advancing large studies to enable biomarker discovery and ultimately has the potential to improve the quality of patient care.

Omid C. Farokhzad: When comparing the project graph XP workflow with conventional approaches such as needs plasma workflow. The researchers found that <unk> demonstrated versatility when applied to various buyer fluids and outperforms other workflows in terms of plasma proteome depth.

Omid C. Farokhzad: Quantitative accuracy and reproducibility, while offering complete automation of sample prep.

Omid C. Farokhzad: This study underscores the critical role of the paragraph XP in advancing large studies to enable biomarker discovery and ultimately has the potential to improve the quality of patient care.

Omid C. Farokhzad: We expect to see the number of presentations and publications continue to grow throughout the year. Last month at the American Association for Cancer Research, or AACR, annual meeting strike, a leader in quality control and sample stabilization in blood, presented data from the proof-of-principle study they conducted with Seer. Their study highlighted the performance of Strex's newly developed Protein Plus BCT, a blood collection tube designed specifically for proteomic applications. The STREC data demonstrated unprecedented protein stability at room temperature across 4,000 proteins in plasma that can be quantitatively measured with the PROTOGRAF-XT and a mass spectrometer.

Omid C. Farokhzad: We expect to see the number of presentations and publications continue to grow throughout the year.

Omid C. Farokhzad: Last month at the American Association for cancer research or ACR annual meeting strict and leader in quality controls on sample stabilization in blood presented data from the proof of principle study they conducted with fear.

Omid C. Farokhzad: Their study highlighted the performance of distressed newly developed protein plus PCT.

Omid C. Farokhzad: Blood collection tubes, designed specifically for Proteomic applications.

Omid C. Farokhzad: District data demonstrated unprecedented protein stability at room temperature across 4000 proteins in plasma that can be quantitatively measure with the project graph XD and mass spectrometer.

Omid C. Farokhzad: Seer uniquely provides the ability to look at low-abundance proteins given the sensitivity of the protograph assay. And the combination of the protein plus PCT and the proteograph product suite is equally powerful for the research, translational, and clinical community by decreasing pre-analytical variability using a robust and standardized sample collection process. And pairing that with a robust and standardized proteomics analysis workflow, you pave the path for deep, unbiased proteomics to be as easily accessible and scalable across different labs and organizations. This is particularly important as applications for proteomics continue to expand across a growing set of end markets, exactly as genomics has done over the past 20 years.

Omid C. Farokhzad: <unk> uniquely provides the ability to look at low abundance proteins, given the sensitivity of the Purdue graph assay.

Omid C. Farokhzad: And the combination of the protein plus PCT and the prodrug product suite is equally powerful for the research translational and clinical communities.

Omid C. Farokhzad: By decreasing pre analytical variability using our robust and standardized sample collection process and.

Omid C. Farokhzad: And pairing that with a robust and standardized proteomics analysis workflow you pave the path for deep unbiased toward your oil mix to be as easily accessible and scalable across different labs that organizations.

Omid C. Farokhzad: This is particularly important as applications for proteomics continues to expand across a growing set of end markets exactly as genomics has done over the past 20 years.

Omid C. Farokhzad: Beyond access we've made important enhancements to our technology.

Omid C. Farokhzad: Earlier this year, we made a protein discovery catalog broadly available.

Omid C. Farokhzad: Our customers and prospective customers can now utilize the discovery catalog to prepare their research protocols and support grants submissions with publicly available data and the breadth of proteins that have been identified through the use of the proto graph.

Omid C. Farokhzad: We have made excellent progress expanding this library in the last few months.

Omid C. Farokhzad: As we currently have over 36000 proteins across human mouse and multiple model organisms.

Omid C. Farokhzad: 10000, human proteins at launch across 1900 pathways that can be detected and interrogated using the project graph.

Omid C. Farokhzad: The number of identified proteins will continue to grow as more mass spectrometry-based proteomics data becomes available. However, feedback has been overwhelmingly positive as scientists are able to add precision, insights, and opportunities for biomarker discovery to genomics and proteomics studies. We also continue to receive positive feedback on the power of the Photograph XP asset. As we've said, it has been extensively demonstrated that the Proteograph XT robustly amplifys the performance of any mass spectrometer between five and eightfold in achieving depth of proteomics coverage in complex samples.

Omid C. Farokhzad: The number of identified proteins will continue to grow as more mass spec based proteomics data becomes available.

Omid C. Farokhzad: Feedback has been overwhelmingly positive as scientists are able to add precision insights and opportunities for biomarker discovery to genomics and proteomics studies.

Omid C. Farokhzad: We also continue to receive positive feedback on the power of the project graph XD assay as we've said it has been extensively demonstrated that the <unk> XP robustly amplifies the performance of any mass spectrometer between five and eight fold in achieve.

Omid C. Farokhzad: <unk> desktop proteomics coverage in complex samples.

Omid C. Farokhzad: Importantly, the magnitude of this amplification has been consistent despite improvements in the generation of the mass spectra over the past several years. This is because the protograph fundamentally solves a different problem than the mass spec system. For example, the number of proteins identified in a complex sample, such as plasma, with the leading Bruker-Temstov HD, is approximately 500 to 700 proteins.

Omid C. Farokhzad: Importantly, the magnitude of this amplification has been consistent despite improvement in generation of them aspects over the past several years.

Omid C. Farokhzad: This is because the period, where fundamentally solves a different problem than the mass spec systems.

Omid C. Farokhzad: However, when paired with the proteograph, XT, the number of protein IDs increases to 4,000 to 5,000 in any given sample. Similarly, the leading thermal fissure scientific orbitrope, ASTRO, can identify 700 to 900 proteins in plasma. However, when paired with the proteograph XT, the number of protein IDs in a given sample can increase to 6,000 to 7,000, and often 8,000 or more proteins can be identified across a given study. Importantly, the proteograph enhances proteomics coverage using a simple and robust automated workflow.

Omid C. Farokhzad: For example, the number of proteins identified in a complex samples such as plasma with the leading brokerage Tim staff HD is approximately 500 to 700 proteins.

Omid C. Farokhzad: However, when paired with the Purdue graph XD the number of protein <unk> increases to 4000 to 5000 in any given sample.

Omid C. Farokhzad: Similarly, the leading thermo Fisher scientific orbit Astro, Kevin identified 700 to 900 proteins in plasma <unk>.

Omid C. Farokhzad: However, when paired with the protium <unk> XP the number of protein IV in a given sample increased to 6000 to 7000, and often 8000 or more proteins can be identified.

Omid C. Farokhzad: <unk> a given study.

Omid C. Farokhzad: Importantly, the protium <unk> enhances proteomics coverage using its simple and robust automated workflow.

Omid C. Farokhzad: It's clear that this will be an important driver to unlock biological insights through proteomic data, and we're continuing to work to drive the inflection point of adoption of this technology. Looking ahead to the rest of 2024, we continue to execute against our core strategy of driving evidence and publications, continuing to enhance access to the protograph, innovate with our products, and expand our applications. With that, I will now turn the call over to David. Thanks, Omid.

Omid C. Farokhzad: It's clear that this will be an important driver to unlock biological insights through proteonomic data and we're continuing to work to drive the inflection point of adoption of this technology.

David: Looking ahead to the rest of 2024, we continue to execute against our core strategies of driving evidence and publications.

Omid C. Farokhzad: <unk> to enhance access to the product graph.

Omid C. Farokhzad: With our products and expand our applications with that I will now turn the call over to David.

David: Thanks, Amit.

David: Total revenue for the first quarter of 2024 was $3 1 million.

David R. Horn: Representing a decrease of 24% compared to $4 1 million in the first quarter of 2023 and was primarily due to a decrease in product and related party revenue.

David R. Horn: Revenue recognized primarily consisted of sales of the paragraph SP 100 instrument.

David R. Horn: <unk> kits and service revenue of which $1 million attributed to related parties.

David R. Horn: Product revenue for the first quarter of 2024 was $2.5 million, including $828,000 of related party revenue, and consisted of sales of SP-100 instruments and consumables. This quarter, several customers purchased instruments that were placed through our SIP program, demonstrating the value these customers see in the protograph once it is in their hands. However, we did see continued pressure on CapEx budgets and elongated sales cycles for the outright purchase of new instrumentation. Consumable kit purchases were also lower, primarily related to lower related party consumable sales.

David R. Horn: Product revenue for the first quarter of 2024 was $2 5 million, including $828000 of related party revenue consisted of sales of SP 100 instruments and consumable kits.

David R. Horn: This quarter several customers purchase instruments that were placed through our <unk> program demonstrating the value of these customers seeing the program. Once it is in their hands. However, we did see continued pressure on capex budgets and elongated sales cycles for the outright purchase of new instrumentation consumable kit purchases were also lower primarily related to lower.

David R. Horn: Good party consumable sales.

David R. Horn: But were conducted at a lower price point than our typical stack service projects.

David R. Horn: Volumes in the quarter.

David R. Horn: Turning to expect variability in our gross margin on a quarter by quarter basis since the proportion of instrument consumable and service revenue will fluctuate for any given quarter.

David R. Horn: Total operating expenses for the first quarter of 2024 were $26 6 million.

David R. Horn: Including $7 6 million of stock based compensation, a decrease of 10% compared to $29 5 million, including $8 7 million of stock based compensation in the first quarter of 2023.

David R. Horn: Research and development expenses for the first quarter of 2024 were $12 3 million, a decrease of 15% compared to $14 $5 million in the first quarter of 2023.

David R. Horn: The decrease in R&D expenses was primarily due to a decrease in employee stock based compensation expenses and a decrease in laboratory expenses.

David R. Horn: Selling general and administrative expenses for the first quarter of 2024 were $14 3 million a.

David R. Horn: The net loss for the first quarter of 2024 was $20.7 million compared to $24 million in the first quarter of 2023. We ended the quarter with approximately $359.2 million in cash, cash equivalents, and investments. Given our strong cash position, the fundamental belief in the long-term value of our solution, and the continued dislocation in our current share price, our Board of Directors has authorized an open market share purchase program of up to $25 million.

David R. Horn: Net loss for the first quarter of 2024 was $20 7 million.

David R. Horn: Compared to $24 million in the first quarter of 2023.

David R. Horn: We ended the quarter with approximately $359 2 million in cash cash equivalents and investments.

David R. Horn: Our strong cash position the fundamental belief in the long term value of our solution and the continued dislocation in our current share price. Our board of directors has authorized an open market share repurchase program of up to $25 million. This authorized share repurchase program will be effective upon the opening of our trading window, which will allow us to repurchase shares in the open market from time to time.

David R. Horn: Even with this return of capital to our shareholders. We are confident in our balance sheet provides us with ample cash runway to reach our strategic objectives over the long term.

David R. Horn: Turning to our outlook for the year, we now expect revenue to be in the range of $16 million to $18 million for 2024, which is in line with our revenue from 2023.

David R. Horn: We continue to expect revenue to be more weighted to the second half of the year. We are committed to maintaining a strong financial position and are taking a very disciplined approach with our spend. Given that our revenue ramp continues to develop more slowly than anticipated, we feel it is necessary to reduce our operating expenses in order to align our cash burn with our revised revenue expectation. As Omid shared, we have implemented a reduction in force of approximately 10% of our workforce.

David R. Horn: We continue to expect revenue to be more weighted to the second half of the year.

David R. Horn: It is always difficult to make these changes we feel this is necessary step for us to position the organization for success over the long term.

David R. Horn: And, as previously stated, we estimate that our 2024 free cash flow loss will be less than our free cash flow loss in 2020. At this point, I would like to turn the call back to Omid for closing comments. Thank you, David.

Omid: At this point I would like to turn the call back to Amit for closing comments.

Omid: Thank you, David we remain committed to reducing barriers to commercial adoption of our technology to.

Omid: The journey to commercialize innovative technology is never linear.

Omid: I continue to be grateful to our team for their hard work and dedication they are putting in everyday.

Omid: I am confident in our technology and believe that as our publication based expense, we will see increased adoption of our technology I look forward to keeping you updated on our progress with that we will now open it up to questions operator.

Speaker Change: Thank you at this time, we will conduct a question and answer session.

Operator: Minder to ask a question you will need to press star one on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Yuko Oko of Morgan Stanley. Your line is now open.

Speaker Change: Please standby, while we compile the Q&A roster.

Yuko Oku: Our first question comes from the line of <unk> of.

Yuko Oku: Morgan Stanley Your line is now open.

Yuko Oku: Hello, Thank you for taking my question.

Yuko Oko: With respect to lowering the barrier for access.

Yuko Oko: Temasek via stock for genomics customers could you talk to the proportion of staff customers coming from genomics researchers versus traditional mastec researchers.

Omid C. Farokhzad: Thanks for the question. The customer base is actually relatively similar, meaning there are customers of Stacks who actually have in-house mass spectrometry. And just because of capacity constraints, they send their masks back to us. Now, we don't do any mask back services for any non-Seer customer, meaning the customers who send their masks back to us are proteograph owners who are running the proteograph in-house, have access to a mass spec in-house, but choose, because of ease and capacity reasons, to leverage our mass fax.

Yuko Oko: This is amin thanks, thanks for the question.

Omid C. Farokhzad: I think the.

Omid C. Farokhzad: The.

Omid C. Farokhzad: The customer base is actually.

Omid C. Farokhzad: Relatively similar meaning there are customers of stack <unk>.

Omid C. Farokhzad: Actually have in house mass spec.

Omid C. Farokhzad: And just because of capacity constraints.

Omid C. Farokhzad: Hey.

Omid C. Farokhzad: They send their mass spec to US no. We don't do any mass spec services for any non SR customer, meaning the customers who send their mass spec to us. These are protium graph owners, who are running that program in house.

Omid C. Farokhzad: Have access to our mass spec in house.

Omid C. Farokhzad: <unk> choose <unk> because of the ease and capacity leases two levers our mass spec we have some customers like that and this fact that serve those customers.

Omid C. Farokhzad: We have some customers like that on the stack that serve those customers, but the lion's share of the customer base is actually customers who don't have access to a proteograph or a mass second house, and they end up with end-to-end services at our stack. And then, with green shoots and biotech funding being called out by many of your peers, why am I... Yeah, Yuko, this is David.

Omid C. Farokhzad: But the lion's share of the customer base is actually the customers who don't have.

David: Access to appropriate graph or my second house and they end up with end to end services.

David: At our stack.

Yuko Oku: Got it thank you for that.

David: And then with Green shoots in biotech funding being called out by many of your peers may be too early for environment, improving do you feel that sentiment is turning.

Omid C. Farokhzad: Yes.

David R. Horn: Thanks for the question. What we certainly saw in the first quarter was some budget impact from biopharma, for sure, certainly the large biopharmas. We had a couple of deals, actually, that we were expecting that got pushed for budgetary reasons.

Omid C. Farokhzad: This is David Thanks for thanks for the question.

David: What we certainly saw in the first quarter is.

David: Some budget impact from Biopharma for sure.

David: Certainly the large biopharma as we had.

David: Deals actually that we were expecting that got pushed for budgetary reasons. So we're still seeing an impact.

David R. Horn: That said.

David R. Horn: The use of <unk>.

David R. Horn: Stack by some of our smaller.

David R. Horn: Kotek firms.

David R. Horn: Ben has been has been good so to your point around Green shoots I do think it it kind of depends I think in the case of large biopharma the adoption of new technologies, especially where it requires capex can still be challenging.

David R. Horn: I think in the case of large biopharma, the adoption of new technologies, especially where it requires CapEx, can still be challenging. Where it's a service model, or a stack model, I think we're seeing good reception there. And so again, I think it depends, obviously, on the company and the situation.

David R. Horn: Where it's a service model stack model I think were seeing good reception there.

David R. Horn: So again I think it depends obviously on the company and the and the situation, but but again, we are still seeing some some headwinds.

David R. Horn: But again, we are still seeing some headwinds, depending on the account type. All right, thank you. One moment for our next question. Our next question comes from the line of Rachel Vattenstall of J.P. Morgan. Your line is now open. Hi, thank you for taking the questions. This is Marta Nazarovets, all in for Rachel Vattenstall of J.P. Morgan.

David R. Horn: <unk>.

Marta Nazarovets: Depending on the account type.

Marta Nazarovets: Got it thank you very much.

Marta Nazarovets: Alright, thank you.

Marta Nazarovets: Our next question.

Marta Nazarovets: Our next question comes from the line of Rachel install of Jpmorgan. Your line is now open.

Marta Nazarovets: Hi, Thank you for taking the question.

David R. Horn: Ken.

Marta Nazarovets: Alright, Sean from J P. Morgan.

Marta Nazarovets: So I wanted to touch a little bit on your updated guidance. Can you perhaps discuss the two key timeline expectations and then touch a little bit more on seasonality through the year and then talk about your visibility into the second half of the year? Sorry, Marta, the first part of your question, you wanted the two key timeline expectations; I missed what you asked.

Marta Nazarovets: I wanted to touch a little bit on your updated guidance.

Marta Nazarovets: Can you perhaps with that.

Marta Nazarovets: Two key top line expectation and then touch a little bit more on seasonality.

Marta Nazarovets: And then talk about your visibility into the second half.

Marta Nazarovets: Okay.

Marta Nazarovets: Okay, sorry, the first part of your question you wanted to the two key I missed.

Marta Nazarovets: Yes.

Marta Nazarovets: Just, like, two key top-line expectations. Got it, 2Q top line, got it, okay. So in terms of, you know, 2Q, we don't give quarterly guidance. I think what we're seeing is we're continuing to see lots of opportunities in the pipeline. It's just a question of, you know, the elongated sales cycle through that pipeline in terms of how quickly we can move those through. So I'd say 2Q, we're going to continue to be conservative in our outlook, just given what we see and some of the headwinds we've been facing. In terms of the, you know, seasonality, I do think we'll continue to see the seasonality we've seen in years past.

Marta Nazarovets: Yes.

Marta Nazarovets: <unk> top line expectation.

Marta Nazarovets: Got it <unk> topline got it okay.

Marta Nazarovets: So in terms of.

Marta Nazarovets: <unk>, we don't we don't give quarterly guidance I think what we're seeing is we're continuing to see.

Marta Nazarovets: Lots of opportunities in the pipeline. It's just a question of the elongated sales cycle through that pipeline in terms of how quickly we can move those through so I'd say <unk>, we're going to continue to be conservative in our outlook just given what we see in some of the headwinds we've been facing.

Marta Nazarovets: In terms of the seasonality I do think we will continue to see the the seasonality we've seen in years past I think certainly the revenue will be more second half weighted in terms of what we see we certainly have some interesting publications coming out we expect in the second late second early third quarter.

David R. Horn: Which we think was going to help.

David R. Horn: Drive interest continued interest in the platform.

David R. Horn: So we do.

David R. Horn: We do experience the same seasonality that the industry generally sees which is.

David R. Horn: A very strong fourth quarter as the as the.

David R. Horn: It's kind of the strongest quarter of the year, given where people are in their in their cycles and things. So we would expect the same here and certainly with our with our.

David R. Horn: So we would expect the same here. And certainly with our, you know, with our year being back-end weighted. Thank you. That's helpful. And then can you talk about stack traction a bit more? You touched on it on the call a little bit, but I remember last quarter you said that you had 48 organizations that are using stack. How many do you have as of now?

David R. Horn: With our year being backend weighted.

David R. Horn: Thank you that's helpful. And then can you talk about stock traction of that more of a question on the call a little bit, but I remember last.

David R. Horn: Quarter, you talked that you have 48 organization that are using <unk>.

David R. Horn: How many do you have now and then they still have a backlog of projects.

David R. Horn: And then lastly on Scott can you talk about your visibility on <unk>.

Marta Nazarovets: Especially now.

Marta Nazarovets: Okay.

Speaker Change: Yes, thanks, so much.

Omid C. Farokhzad: I don't have an update in terms of... the updated total customer number beyond what I mentioned last time. The stack continues to run at capacity. And we expect that to be the case through Q2 and also into Q3, and my visibility for it is that the FAQ was exactly what the market needed, meaning... The purpose of establishing it in the U.S. was to lower the barrier for a potential customer to access the proteograph data.

Marta Nazarovets: I don't have an update in terms of.

Omid C. Farokhzad: The updated total customer.

Omid C. Farokhzad: Number beyond what I mentioned last time.

Omid C. Farokhzad: The stock continues.

Omid C. Farokhzad: To run at capacity.

Omid C. Farokhzad: <unk>.

Omid C. Farokhzad: And we expect that to be the case.

Omid C. Farokhzad: Through Q2, and also into Q3 and my visibility for it is that.

Omid C. Farokhzad: <unk>.

Omid C. Farokhzad: This fact was exactly what the market needed meaning.

Omid C. Farokhzad: It was also meant to lower the barrier for a potential customer to bring in a proteograph when they're relatively unfamiliar with the mass spec. And so we didn't want that lack of familiarity with the mass spec to be a hindrance to taking a photograph in-house.

Omid C. Farokhzad: The purpose.

Omid C. Farokhzad: All of establishing it in U S.

Omid C. Farokhzad: Was to lower that barrier.

Omid C. Farokhzad: For a potential customer.

Omid C. Farokhzad: To access to peripheral graph data.

Omid C. Farokhzad: It was also meant to lower the barrier for a potential customer to bring in the Proteus graph.

Omid C. Farokhzad: Theyre relatively unfamiliar with the mass spec and so we didn't want that lack of familiarity with the mass spec to be a hindrance.

Omid C. Farokhzad: To take.

Omid C. Farokhzad: Taking a poor geographic in house.

Omid C. Farokhzad: In that context, the stack has done exactly what we had hoped. By the way, so has the SIP program, in terms of lowering the barrier. And the challenge for us was that we were serving US customers but not European customers, given the GDPR rules, with data, etc., going across the ocean. And now that we're opening the European stack, we'll be able to provide similar types of services to our European customers. And as I mentioned earlier to Yuko, the customer base really is diverse.

Omid C. Farokhzad: In that context. The fact has done exactly what we had hoped by the way so has the fit program.

Omid C. Farokhzad: In terms of lowering barrier.

Omid C. Farokhzad: And the challenge for US was that we were serving U S customers.

Omid C. Farokhzad: But not European customers, given the <unk> rules with data et cetera going across the ocean and now we opening the European stack will be able to provide similar types of services to our European customers.

Omid C. Farokhzad: And as I mentioned earlier.

Omid C. Farokhzad: Two yoko.

Omid C. Farokhzad: The customer base really it's diverse it's both.

Omid C. Farokhzad: Customers that had a positive gap in house that may or may not have Ams second house, but it's also genomic customers some of them.

Omid C. Farokhzad: Folks that wanted to do large scale studies.

Omid C. Farokhzad: Get that get access to that stack for end to end services.

Omid C. Farokhzad: So my expectation is that the stack will continue to be an important source of product adoption for us, but it really is not meant for us to pivot into a service business, and I mentioned that the very, very first time that we announced the stack, it's really meant to facilitate adoption of our platform. Great, thank you. All right, thank you. I am asking no further questions at this time. This concludes the question and answer session and the program. Thank you for your participation in today's conference. You may now disconnect.

Omid C. Farokhzad: So my expectation is that stack will continue.

Speaker Change: To be an important.

Omid C. Farokhzad: Sure.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: Showing no further questions at this time.

Speaker Change: This does conclude the question and answer session.

Omid C. Farokhzad: And the program.

Speaker Change: Thank you for your participation in today's conference you may now disconnect.

Q1 2024 Seer Inc Earnings Call

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