Q2 2024 Quantum-Si Inc Earnings Call
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Unknown Executive: Ladies and gentlemen, thank you for standing by. Welcome to the Quantum-Si 2nd quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.
Speaker Change: Ladies and gentlemen, thank you for standing by welcome to the quantum as our second quarter 2024 earnings call.
Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Unknown Executive: To ask a question, 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: To ask a question you will need to press star one one on your telephone.
Speaker Change: Then here an automated message advising your hand is raised.
Unknown Executive: Please be advised today's conference is being recorded.
Please be advised today's conference is being recorded.
Doug Farrell: I would now like to turn the conference over to Doug Farrell from Quantum-Si. Doug, please go ahead.
Speaker Change: I would now like to turn the conference over to Doug Farrell from quantum ESR Doug. Please go ahead.
Doug Farrell: Good afternoon, everyone, and thank you for joining us. Earlier today, Quantum-Si released financial results for the 2nd quarter, in June 30th, 2024. A copy of the press release is available on the company's website.
Unknown Executive: Good afternoon, everyone. And thank you for joining us.
Unknown Executive: Earlier today, Quantum-Si released financial results for the second quarter ending June 30, 2024. For a more complete list and description of risk factors, please see the company's filings made with the Securities Exchange. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Doug Farrell: Good afternoon, everyone and thank you for joining us earlier today quantum ESI released financial results for the second quarter ended June 32024.
Doug Farrell: Copy of the press release is available on the company's website.
Doug Farrell: Joining me today are Jeff Hawkins, President and Chief Executive Officer, as well as Jeff Kais, our Chief Financial Officer. Before we begin, I would like to remind you that management will be making certain forward-looking statements within the meeting of the Federal Securities Laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled "Forward-looking statements" of our press release. For a more complete list in the description of risk factors, please see the company's filing made with the Securities and Exchange Commission.
Speaker Change: Joining me today are Jeff Hawkins, President and Chief Executive Officer, as well as Jeff <unk>, Our Chief Financial Officer.
Speaker Change: Before we begin I would like to remind you that management will be making certain forward looking statements within the meaning of the federal securities laws.
Speaker Change: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.
Speaker Change: Additional information regarding these risks and uncertainties appears in the section entitled forward looking statements in our press release.
Speaker Change: A more complete list and description of risk factors. Please see the company's filings made with the Securities Exchange Commission.
Doug Farrell: This conference call contains time-sensitive information that is accurate only as of the live broadcast date today, August 7, 2024. Except as required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements. During this call, we will also be referring to certain financial measures that are not prepared in accordance with U.S. generally except that the accounting principles work out. A reconciliation of these non-gout financial measures to the most directly comparable gout financial measures is included in the press release filed earlier today.
Speaker Change: This conference call contains time sensitive information that is accurate only as of the live broadcast today August seven 2020.
Speaker Change: Except as required by law the company disclaims any intention or obligation to update or revise any forward looking statements.
Speaker Change: During this call we will also be referring to certain financial measures that are not prepared in accordance with U S. Generally accepted accounting principles or GAAP.
Speaker Change: A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the press release filed earlier today.
Doug Farrell: Additionally, I'd like to remind everyone that we will be participating in the Cantercourt Health Care Conference in Boston next week, and we look forward to seeing many of you there.
Speaker Change: Additionally, I'd like to remind everyone that we will be participating in mechanical heart health care conference in Boston next week, and we look forward to seeing many of you there with that let me turn the call over to Jeff Hawkins.
Jeff Hawkins: With that, let me turn the call over to Jeff Hawkins. Good afternoon, and thank you for joining us. On today's call, we will provide a business update, present our second quarter 2024 financial results, and provide an outlook for the remainder of 2024.
Jeff Hawkins: Good afternoon, and thank you for joining us on today's call. We will provide a business update present, our second quarter 2024 financial results and provide an outlook for the remainder of 2024, then we will open the line for questions.
Jeff Hawkins: Then we will open the line for questions. Before reviewing our quarterly results, I would like to welcome Chuck Cummins to our Board of Directors. Chuck recently joined QSI as our independent Chairman of the Board. Many of you probably know Chuck already. He's an industry veteran with more than 35 years of leadership experience in life sciences. Most recently, Chuck was president and CEO of Biotechney, where he led strategic initiatives that drove a 300 percent increase in their annual revenue to more than a billion dollars. Prior to that, Chuck was president of both the Mass Spectrometry and Lab Consumable divisions of Thermo Fisher Scientific.
Speaker Change: Before reviewing our quarterly results I would like to welcome Chuck comments to our board of Directors, Chuck recently joined <unk> as our independent chairman of the board.
Speaker Change: Many of you probably know Chuck already he's an industry veteran with more than 35 years of leadership experience in life Sciences. Most recently, Chuck with President and CEO of Biotech me, where he led strategic initiatives that drove a 300% increase in their annual revenue to more than $1 billion probably.
Unknown Executive: Most recently, Chuck was president and CEO of Biotechni, where he led strategic initiatives that drove a 300% increase in their annual revenue to more than a billion dollars. We are excited to have Chuck on the board, and we look forward to benefiting from his counsel over the coming years.
Speaker Change: Prior to that Chuck was president of both the mass spectrometry and lab consumables Division of Thermo Fisher scientific we are excited to have Chuck on the board and we look forward to benefiting from his counsel over the coming years.
Jeff Hawkins: We are excited to have Chuck on the board, and we look forward to benefiting from his counsel over the coming years. At Quantum S.I., we are committed to bringing the power of next-generation protein sequencing to labs around the world. We believe that we have the industry-leading technology in Platinum, and that our first mover advantage positions us well to capture a leading share of a $20 billion research market in proteomics. Next-generation protein sequencing has the potential to create large, new market opportunities in much the same way that next-generation DNA sequencing transformed life science research. We believe Platinum will help to accelerate proteomic research and enable the discovery of new biomarkers that will ultimately pave the way for the development of new therapies and diagnostic tests.
Unknown Executive: At Quantum-Si, we are committed to bringing the power of next-generation protein sequencing to labs around the world. We believe that we have the industry-leading technology in platinum and that our first-mover advantage positions us well to capture a leading share of a $20 billion research market in proteomics. We believe platinum will help to accelerate proteomic research and enable the discovery of new biomarkers that will ultimately pave the way for the development of new therapies and diagnostic tests. At the end of the second quarter, our direct commercial team, which includes sales, marketing, service, and support personnel, totaled about 30 individuals based in the United States and Western Europe.
Speaker Change: At quantum aside we are committed to bringing the power of next generation protein sequencing to labs around the world.
Speaker Change: We believe that we have the industry, leading technology and platinum and that our first mover advantage positions us well to capture a leading share of a $20 billion research market in proteomics.
Speaker Change: Next generation protein sequencing has the potential to create large new market opportunities in much. The same way that next generation DNA sequencing transformed life Science research, we believe platinum will help to accelerate proteomics research and enable the discovery of new Biomarkers that will ultimately pave the way for the development of new therapy.
Speaker Change: <unk> and diagnostic tests.
Jeff Hawkins: Now we would like to provide an update on our corporate priorities for 2024. As a reminder, we have three corporate priorities for 2024. First, accelerate commercial adoption. Second, deliver on our innovation roadmap. And third, preserve financial strength. Our first corporate priority is to accelerate commercial adoption. Q2 marks the first full quarter of Platinum sales since exiting our control launch at the end of the first quarter. While we are pleased with the results delivered in the second quarter, we are confident that there are opportunities to significantly improve sales execution and accelerate adoption of our technology globally to expansion of both our direct commercial team and distribution partner network.
Speaker Change: Now I would like to provide an update on our corporate priorities for 2024.
Speaker Change: As a reminder, we have three corporate priorities for 2024.
Speaker Change: First accelerate commercial adoption.
Speaker Change: Second deliver on our innovation roadmap and third preserve financial strength.
Speaker Change: Our first corporate priority is to accelerate commercial adoption Q.
Speaker Change: Q2 marked the first full quarter of platinum sales since exiting our controlled launch at the end of the first quarter.
Speaker Change: While we are pleased with the results delivered in the second quarter. We are confident that there are opportunities to significantly improve sales execution and accelerate adoption of our technology globally through expansion of both our direct commercial team and distribution partner network.
Jeff Hawkins: Customer interest in our uniquely differentiated next-generation protein sequencing technology remains strong. Our sales funnel continues to grow, and we are seeing increasing global interest in our solution. During the second half of the year, we will continue to extend our commercial reach to a combination of adding direct sales professionals and new distribution partners. At the end of the second quarter, our direct commercial team, which includes sales, marketing, service and support personnel, told about 30 individuals based in the United States and Western Europe. As part of that growth, we have recently added key senior sales leadership roles in both the United States and Western Europe.
Speaker Change: Customer interest in our uniquely differentiated next generation protein sequencing technology remains strong.
Speaker Change: Our sales funnel continues to grow and we are seeing increasing global interest in our solution.
Speaker Change: During the second half of the year, we will continue to extend our commercial reach to a combination of adding direct sales professionals and new distribution partners.
Speaker Change: At the end of the second quarter, our direct commercial team, which includes sales marketing service and support personnel totaled about 30 individuals based in the United States and Western Europe as.
Unknown Executive: As part of that growth, we have recently added key senior sales leadership roles in both the United States and Western Europe. Based on recent learnings, we are implementing improvements to our sales training and sales process to drive more effective targeting and management of the highest value opportunities. In addition to our direct sales team, we are optimistic about the opportunity to expand global access to our technology through our distribution partner network. In the second quarter, we gained our first customer through this network, giving us confidence that we can successfully enable our partners to sell platinum.
Speaker Change: As part of that growth, we have recently added key senior sales leadership roles in both the United States and Western Europe.
Jeff Hawkins: We exit the quarter with several open territories across the United States and Western Europe, and we are working aggressively to get these positions filled and to get newly hired resources trained quickly to be effective at selling our products. From a sales execution standpoint, we are continuously evaluating and optimizing our go-to-market approach. Based on recent learnings, we are implementing improvements to our sales training and sales process to drive more effective targeting and management of the highest value opportunities. We are making solid progress on both initiatives, but we still have work to do. In addition to our direct sales team, we are optimistic about the opportunity to expand global access to our technology through our distribution partner network.
Speaker Change: We exited the quarter with several open territories across the United States and Western Europe, and we are working aggressively to get these positions filled and to get newly hired resources trained quickly to be effective at selling our products.
Speaker Change: From a sales execution standpoint, we are continuously evaluating and optimizing our go to market approach.
Speaker Change: On recent learnings, we are implementing improvements to our sales training and sales process to drive more effective targeting and management of the highest value opportunities we.
Speaker Change: We are making solid progress on both initiatives, but we still have work to do.
Speaker Change: In addition to our direct sales team, we are optimistic about the opportunity to expand global access to our technology through our distribution partner network.
Jeff Hawkins: In the second quarter, we gained our first customer through this network, giving us confidence that we can successfully enable our partners to sell platinum. With this partner enablement playbook in hand, we expect to grow the distribution partner network throughout the remainder of 2024 to allow us time to train the new partners and ensure they are operating effectively and independently in preparation for 2025. During the second quarter, we participated in several major scientific conferences where we were able to showcase the platinum system and generate commercial leads. At the American Society for Mass Spectrometry meeting in June, Dr. Gloria Shankman from the University of Virginia presented the results of the work she completed using platinum.
Speaker Change: In the second quarter, we gained our first customer through this network, giving us confidence that we can successfully enable our partners to sell platinum.
Unknown Executive: With this partner enablement playbook in hand, we expect to grow the distribution partner network throughout the remainder of 2024 to allow us time to train the new partners and ensure they are operating effectively and independently in preparation for 2025. During the second quarter, we participated in several major scientific conferences where we were able to showcase the Platinum System and generate commercial leads. At the American Society for Mass Spectrometry meeting in June, Dr. Gloria Schenkman from the University of Virginia presented the results of the work she completed using platinum.
Speaker Change: With this partner enablement playbook in hand, we expect to grow the distribution partner network throughout the remainder of 2024 to allow us time to train the new partners and ensure they are operating effectively and independently in preparation for 2025.
Speaker Change: During the second quarter, we participated in several major scientific conferences, where we were able to showcase the platinum system and generate commercial leads.
Unknown Executive: Dr. Shankman demonstrated that her team was able to detect isoform-specific peptides that differentiate disease-relevant proteoforms, a type of analysis that their mass spec system is not able to do. In another presentation from ASMS, team members from Dr. Neal Kelleher's lab at Northwestern University integrated next-generation protein sequencing with mass spectrometry to help distinguish native and artifactual proteoforms, and they identified a disease-relevant post-translational modification thought to contribute to the pathology of Alzheimer's disease. Lastly, at the European Society of Human Genetics meeting, Dr. Brian Reed, head of research at Quantum-Si, discussed the expanding role of next-generation protein sequencing, which enables direct interrogation of the primary structure of proteins, as well as post-translational modifications, which are likely to play an important role in disease progression and personalized therapy. We expect that the research results presented by Dr. Schenkman and Dr. Kelleher will be submitted for publication by the end of the year.
Speaker Change: At the American Society for mass spectrometry meeting in June Dr. Gloria Shenkman from the University of Virginia presented the results of the work she completed using platinum.
Jeff Hawkins: Dr. Shankman demonstrated that her team was able to detect isoform-specific peptides that differentiate disease-relevant proteoforms, a type of analysis that their mass-spec system is not able to do. In another presentation from ASMS, team members from Dr. Neal Keller's lab at Northwestern University integrated next-generation protein sequencing with mass-spec to help distinguish native and artificial proteoforms. The team identified a disease-relevant post-translational modification thought to contribute to the pathology of Alzheimer's disease. Lastly, at the European Society of Human Genetics meeting, Dr. Brian Reed, head of research at Quantum-Si, discussed the expanding role of next-generation protein sequencing, which enables direct interrogation of the primary structure of proteins, as well as post-translational modifications, which are likely to play an important role in disease progression and personalizing therapies.
Speaker Change: Dr. Shenkman demonstrated that her team was able to detect isoform specific peptides that differentiate disease relevant proteoform.
Speaker Change: That type of analysis that their mass spec system is not able to do.
Speaker Change: And another presentation from ASML team members from Dr. <unk> lab at Northwestern University integrated next generation protein sequencing with mass spec to help distinguish native and artifact dual protium forms.
Speaker Change: The team identified a disease relevant post translational modification dot to contribute to the pathology of Alzheimer's disease.
Speaker Change: Lastly, at the European Society of Human Genetics meeting Dr. Brian Reed head of research at quantum ESI discussed the expanding role of next generation protein sequencing, which enables direct interrogation of the primary structure of proteins as well as post translational modifications, which are likely to play an important role in disease progression.
Speaker Change: <unk> and personalizing therapies.
Jeff Hawkins: We expect that the research results presented by Dr. Shankman and Dr. Keller will be submitted for publication by the end of the year.
Speaker Change: We expect that the research results presented by Dr. Shenkman and Dr. Kelleher will be submitted for publication by the end of the year.
Jeff Hawkins: From a market segment perspective, our customer base today is made up of primarily academic research labs, but we are continuing to see traction in large pharma and biotech, which will be important for driving long-term market growth. These customers often have multiple locations as well as multiple projects running in parallel, so their consumable utilization is higher than the typical academic research lab. On our last earnings call, we discussed that we were observing growing interest in protein barcoding applications. As a reminder, for customers who need to characterize large numbers of proteins, protein barcodes can be used to streamline screening and selection of proteins with specific characteristics.
Unknown Executive: From a market segment perspective, our customer base today is made up primarily of academic research laboratories, but we are continuing to see traction in large pharma and biotech, which will be important for driving long-term market growth. These customers often have multiple locations as well as multiple projects running in parallel, so their consumable utilization is higher than the typical academic research lab. As a reminder, for customers who need to characterize large numbers of proteins, protein barcodes can be used to streamline the screening and selection of proteins with specific characteristics.
Speaker Change: From a market segment perspective, our customer base today is made up of primarily academic research labs, but we're continuing to see traction in large pharma and biotech which will be important for driving long term market growth. These customers often have multiple locations as well as multiple projects running in parallel so their consumable.
Speaker Change: Utilization is higher than the typical academic research lab.
Speaker Change: On our last earnings call. We discussed that we were observing growing interest in protein bar coding applications.
Speaker Change: As a reminder for customers who need to characterize large numbers of proteins protein barcodes can be used to streamline screening and selection of proteins with specific characteristics.
Jeff Hawkins: One exciting application of peptide barcodes is for multiplex screening of the delivery and expression of therapeutic proteins in vivo. It is an area of high interest in drug development, but it is extremely challenging and expensive to do today, and in many instances not feasible to do using existing technologies like mass spec. We are excited to report that one of our biotech customers has recently demonstrated the power of platinum to address this problem. They designed protein constructs with small, highly sequenceable peptide barcodes that have minimal impact on the biological function of the target. Using these barcodes, they performed an in vivo screen of a library of mRNAs in a mouse model and generated successful results.
Unknown Executive: One exciting application of peptide barcodes is for multiplex screening of the delivery and expression of therapeutic proteins in vivo. Using these barcodes, they performed an in vivo screen of a library of mRNAs in a mouse model and generated successful results. We believe their work demonstrates the power of platinum to address a complex problem in drug development with minimal proteomics expertise required and at a fraction of the cost compared to existing technology. Finally, from a macro market perspective, capital spending remains cautious, and sales cycles are longer than historical averages in many cases.
Speaker Change: One exciting application a peptide barcodes as for multiplex screening of the delivery and expression of therapeutic proteins in vivo it.
Speaker Change: It is an area of high interest in drug development, but it is extremely challenging and expensive to do today and in many instances not feasible to do using existing technologies like mass spec we.
Speaker Change: We are excited to report that one of our biotech customers has recently demonstrated the power of platinum to address this problem.
Speaker Change: They designed protein constructs with small highly sequence of all peptide barcodes that have minimal impact on the biological function of the target using.
Speaker Change: Using these barcodes they performed an in vivo screen of our library of mrna in a mouse model and generated successful results. We believe their work demonstrates the power of platinum to address a complex problem and drug development with minimal proteomics expertise required and at a fraction of the cost compared to existing technologies.
Jeff Hawkins: We believe their work demonstrates the power of platinum to address a complex problem in drug development with minimal proteomics expertise required and at a fraction of the cost compared to existing technologies.
Jeff Hawkins: Finally, from a macro market perspective, capital spending remains cautious, and sales cycles are longer than historical averages in many cases. That said, we are confident that our technology is uniquely differentiated in the market, and with an $85,000 price point, we believe platinum offers significant value to customers. Based upon this value proposition, we expect to be able to continue to drive consistent quarter-over-quarter growth in adoption going forward.
Speaker Change: Finally from a macro market perspective capital spending remains cautious and sales cycles are longer than historical averages in many cases.
Unknown Executive: That said, we are confident that our technology is uniquely differentiated in the market. And with an $85,000 price point, we believe Platinum offers significant value to customers. Based upon this value proposition, we expect to be able to continue to drive consistent quarter-over-quarter growth in adoption going forward. Our second priority is to deliver on our innovation roadmap. As a reminder, in February, we delivered version 2 of our sequencing kit, and in April, we followed that up with a new version of our platinum analysis software that incorporates advancements in artificial intelligence.
Speaker Change: That said, we are confident that our technology is uniquely differentiated in the market and with an $85000 price point, we believe platinum offers significant value to customers.
Speaker Change: Based upon this value proposition, we expect to be able to continue to drive consistent quarter over quarter growth in adoption going forward.
Jeff Hawkins: Our second priority is to deliver on our innovation roadmap. We are continuing to drive enhancements across our instrumentation, chemistry, and software. Our R&D team continues to execute exceptionally well, and we are seeing the results of that effort. As a reminder, in February, we delivered version 2 of our sequencing kit, and in April, we followed that up with a new version of Platinum Analysis Software that incorporates advancements in artificial intelligence. Today, we are pleased to announce that we are releasing our Version 3 sequencing kit. The version 3 kit is the next evolution in our overall sequencing chemistry roadmap.
Speaker Change: Our second priority is to deliver on our innovation roadmap we.
Speaker Change: We are continuing to drive enhancements across our instrumentation chemistry and software.
Speaker Change: Our R&D team continues to execute exceptionally well and we are seeing the results of that effort.
Speaker Change: As a reminder in February we delivered version two of our sequencing kit and in April we followed that up with a new version of platinum analysis software that incorporates advancements in artificial intelligence.
Unknown Executive: Today, we are pleased to announce that we are releasing our version 3 sequencing kit. The Version 3 kit is the next evolution in our overall sequencing chemistry roadmap. The Version 3 kit includes a new recognizer to further expand amino acid coverage and increase the overall sequencing output per sample. With this new kit, customers will be able to sequence an ever-expanding number of proteins, see more peptides per protein, and see more amino acids per peptide.
Speaker Change: Today, we are pleased to announce that we are releasing our version three sequencing kit.
Speaker Change: Diversion III kit is the next evolution in our overall sequencing chemistry roadmap the <unk>.
Jeff Hawkins: The version 3 kit includes a new recognizer to further expand amino acid coverage and increase the overall sequencing output per sample. With this new kit, our customers will be able to sequence an ever-expanding number of proteins, see more peptides per protein, and see more amino acids per peptide. As part of this new kit release, we are also releasing an updated version of the Platinum Analysis Software. Leveraging the artificial intelligence tools incorporated as part of the April software release, we now have a database of predicted kinetic signatures that contains over 4.5 million parameters, more than double the number of parameters in the database as part of the April software release.
Speaker Change: <unk> III kit includes a new recognizer to further expand amino acid coverage and increase the overall sequencing output per sample.
Speaker Change: With this new kit, our customers will be able to sequence an ever expanding number of proteins seem more peptides per protein and see more amino acids per peptide.
Unknown Executive: As part of this new kit release, we are also releasing an updated version of the Platinum Analysis software. Leveraging the artificial intelligence tools incorporated as part of the April software release, we now have a database of predicted kinetic signatures that contains over 4.5 million parameters.
Speaker Change: As part of this new kit release, we are also releasing an updated version of the platinum analysis software.
Speaker Change: Leveraging the artificial intelligence tools incorporated as part of the April software release, we have now.
Speaker Change: Now have a database of predicted kinetics signatures that contains over $4 5 million parameters more than double the number of parameters and the database as part of the April software release. This.
Unknown Executive: More than double the number of parameters in the database as part of the April software. This expanded database will further improve amino acid coverage, Post-Translational Modification Detection, and the overall accuracy and output our customers see with each sequencing run. From a sequencing metrics perspective, the version 3 kit delivers a more than 1.5-fold increase in output per sample and lowers the customer cost per amino acid by more than 1.5-fold over the version 2 kit.
Jeff Hawkins: This expanded database will further improve the amino acid coverage, post-translational modification detection, and the overall accuracy and output our customers see with each sequencing run. From a sequencing metrics perspective, the version 3 kit delivers a more than 1.5-fold increase in output per sample and lowers the customer cost per amino acid by more than 1.5-fold over the version 2 kit. While those performance improvements are impressive, they do not tell the full story. Compared to our version 1 kit, the version 3 sequencing kit provides customers with a more than 5.5-fold increase in output and a more than 4.5-fold reduction in cost per amino acid.
Speaker Change: This expanded database will further improve the immuno acid coverage post.
Speaker Change: Post translational modification detection and the overall accuracy and output our customers see with each sequencing Brian.
Speaker Change: From a sequencing metrics perspective, the version three kit deliveries of more than one five fold increase in output per sample and lowers the customer cost per amino acid by more than one five fold over the version two kit.
Unknown Executive: While those performance improvements are impressive, they do not tell the full story. Compared to our Version 1 kit, the Version 3 sequencing kit provides customers with a more than 5.5-fold increase in output and a more than 4.5-fold reduction in cost per amino acid. This improvement has been achieved in just one year and demonstrates that the new R&D organization and technology roadmap we put in place in August of 2023 are a success.
Speaker Change: Those performance improvements are impressive they do not tell the full story.
Speaker Change: Compared to our version one kit the version three sequencing kit provides customers with a more than five five fold increase in output and a more than four five fold reduction in cost per amino acid. This.
Jeff Hawkins: This improvement has been achieved in just one year and demonstrates that the new R&D organization and technology roadmap we put in place in August of 2023 is a success.
Speaker Change: This improvement has been achieved in just one year and demonstrates that the new R&D organization and technology roadmap. We put in place in August of 2023 is a success.
Jeff Hawkins: Beyond the version 3 kit launch, our innovation pipeline remains robust, and we are pleased to share that we expect to release two new products by the end of the year. The first new product will be a version 2 of our library prep kit. Our goal with this kit is to continue to increase the compatibility of our technology with an increasing number of proteins, sample types, and applications. The second new product is being designed to specifically address barcoding applications. As discussed earlier in this call, we are seeing increasing interest in protein barcoding from customers across multiple market segments.
Unknown Executive: Beyond the version 3 kit launch, our innovation pipeline remains robust, and we are pleased to share that we expect to release two new products by the end of the year. The first new product will be version two of our library prep kit. Our goal with this kit is to continue to increase the compatibility of our technology with an increasing number of proteins, sample types, and applications. The second new product is being designed to specifically address barcoding applications.
Speaker Change: Beyond the version three kit launch our innovation pipeline remains robust and we are pleased to share that we expect to release two new products by the end of the year.
Speaker Change: First new product will be a version two of our library prep kit.
Speaker Change: Our goal with this kit is to continue to increase the compatibility of our technology with an increasing number of proteins sample types and applications.
Speaker Change: The second new product is being designed to specifically address bar coding applications.
Unknown Executive: As discussed earlier in this call, we are seeing increasing interest in protein barcoding from customers across multiple market segments. We are developing a library prep kit specific to barcoding that we expect will provide customers a significant reduction in sample prep time prior to sequencing, while also improving the sensitivity and dynamic range of the application.
Speaker Change: As discussed earlier in this call we are seeing increasing interest in protein barcoding from customers across multiple market segments.
Jeff Hawkins: To further accelerate their work, we are developing a library prep kit specific to barcoding that we expect will provide customers a significant reduction in sample prep time prior to sequencing while also improving the sensitivity and dynamic range of the application. In addition to our pipeline of innovations across library prep, sequencing chemistry, and software, we are continuing to make solid progress on our instrumentation innovation roadmap.
Speaker Change: To further accelerate their work we are developing a library prep kit specific to Barcoding that we expect will provide customers a significant reduction in sample prep time prior to sequencing, while also improving the sensitivity and dynamic range of the application.
Jeffry Keyes: In addition to our pipeline of innovations across library prep, sequencing chemistry, and software, we are continuing to make solid progress on our instrumentation innovation roadmap. We have some exciting developments in this area that are currently progressing through our technology development process, and we look forward to sharing more details about this area at an investor day that we are planning for later in the year. Our third priority is to preserve financial strength.
Speaker Change: In addition to our pipeline of innovations across library prep sequencing chemistry and software we are continuing to make solid progress on our instrumentation innovation roadmap.
Jeff Hawkins: We have some exciting developments in this area that are currently progressing through our technology development process, and we look forward to sharing more details about this area at an investor day that we are planning for later in the year.
Speaker Change: We have some exciting developments in this area that are currently progressing through our technology development process and we look forward to sharing more details about this area at an investor day that we're planning for later in the year.
Jeff Hawkins: Our third priority is to preserve financial strength. We remain laser focused on fiscal discipline. Now that we are halfway through the year, we can see a steady improvement in our operating results. We have meaningfully reduced our overall operating expenses over the prior year, while continuing to invest in innovation and accelerating the pace of our commercialization efforts. Jeff will provide more details, but we are pleased with our progress, and we remain committed to efficient use of our capital. We are confident that we are striking the appropriate balance of fiscal discipline and investing in innovation and the commercial ramp up of platinum.
Speaker Change: Our third priority is to preserve financial strength.
Jeffry Keyes: We remain laser-focused on fiscal discipline. Now that we are halfway through the year, we can see a steady improvement in our operating results. We have meaningfully reduced our overall operating expenses over the prior year while continuing to invest in innovation and accelerate the pace of our commercialization efforts. Jeff will provide more details, but we are pleased with our progress, and we remain committed to efficient use of our capital. Delivering these two goals remains a top priority that will be the foundation of our growth for years to come. I'll now turn the call over to Jeff Keyes to review our financial results.
Speaker Change: We remain laser focused on fiscal discipline.
Speaker Change: Now that we're halfway through the year, we can see a steady improvement in our operating results, we have meaningfully reduced our overall operating expenses over the prior year, while continuing to invest in innovation and accelerating the pace of our commercialization efforts.
Speaker Change: Jeff will provide more details, but we are pleased with our progress and we remain committed to efficient use of our capital.
Jeff Hawkins: We are confident that we are striking the appropriate balance of fiscal discipline and investing in innovation and the commercial ramp up of platinum.
Jeff Hawkins: Delivering these two goals remains the top priority that will be the foundation of our growth for years to come.
Speaker Change: Delivering these two goals remains a top priority that will be the foundation of our growth for years to come.
Jeff Keyes: I'll now turn the call over to Jeff Keyes to review our financial results. Thanks, Jeff. Now let's discuss the details of our financial results for the second quarter. Revenue in the second quarter of 2024 was $622,000, which consisted of revenue from our platinum instrument, consumable kits, and related services. Gross profit was 354,000, and gross margin was 57%. As we remind or our gross margin percentage will be somewhat variable for the near future as we work through our initial stages of commercialization, and will also be impacted by the timing and makes of instruments versus consumable sales.
Speaker Change: I'll now turn the call over to Jeff <unk> to review our financial results.
Jeffry Keyes: Thanks, Jeff. Now, let's discuss the details of our financial results for the second quarter. Revenue in the second quarter of 2024 was $622,000, which consisted of revenue from our platinum instrument, consumable kits, and related services. Gross profit was $354,000, and gross margin was 57%. As a reminder, our growth margin percentage will be somewhat variable for the near future as we work through our initial stages of commercialization and will also be impacted by the timing and mix of instruments versus consumable sales. Our margin will also be impacted in the near term by acquisition costs and any accounting adjustments to underlying inventory that predates the commercial launch of Platinum. Well, we have not provided gross margin guidance for 2024.
Speaker Change: Thanks, Jeff now, let's discuss the details of our financial results for the second quarter.
Jeff Hawkins: Revenue in the second quarter of 2024 was $622000, which consisted of revenue from our platinum instrument consumable kits and related services.
Speaker Change: Gross profit was 354000 in gross margin was 57%.
Speaker Change: As a reminder, our gross margin percentage will be somewhat variable for the near future as we work through our initial stages of commercialization.
Speaker Change: Also be impacted by the timing and mix of instruments versus consumable sales.
Jeff Keyes: Our margin will also be impacted in the near term by acquisition costs and any accounting adjustments underlying inventory that predates the commercial launch of Platinum. Well, we have not provided gross margin guidance for 2024. I can tell you that our gross margin for the second quarter of 2024 includes approximately a 9% benefit for inventory utilized in the second quarter that was carried at low or no value and dates back prior to the initial commercialization. We do expect to see more variances that will flow through our gross margin as we move forward, and I will point them out if they are material.
Speaker Change: Our margin will also be impacted in the near term by acquisition costs of NDA and any accounting adjustments gender lying inventory that predates the commercial launch of platinum.
Speaker Change: Well, we have not provided gross margin guidance for 2024, I can tell you that our gross margin for the second quarter of 2024 includes approximately a 9% benefit for inventory utilized in the second quarter that was carried at low or no value and dates back prior to the initial commercialization.
Jeffry Keyes: I can tell you that our gross margin for the second quarter of 2024 includes approximately a nine percent benefit for inventory utilized in the second quarter that was carried at a low or no value and dates back prior to the initial commercialization. The year-over-year reduction in operating expenses is the result of several initiatives we began in 2023 to maximize that capital efficiency. Overall, R&D spend was $1.5 million lower than the prior year, offset by investment in commercial operations.
Speaker Change: We do expect to see more variances that will flow through our gross margin as we move forward and I will point them out if they are material.
Jeff Keyes: Gap total operating expenses for the second quarter or 26.8 million compared to 27.0 million in Q2 of 2023, while adjusted operating expenses were 24.4 million for the second quarter of 2024 compared to 24.0 million for the Q2 of 2023. The year-over-year reduction in operating expenses resulted in several initiatives we began in 2023 to maximize that capital efficiency. Overall, R&D spend was 1.5 million lower than the prior year, offset by investment in commercial operations. Year-to-date, total operating expenses for 50.4 million compared to 56.3 million in the prior year, a decrease of more than 10%. The progress on capital efficiency is even more significant on a year-to-day basis, where R&D expenses were down 7.5 million and overall operating expenses down 5.9 million after investing in commercial operations.
Speaker Change: GAAP total operating expenses for the second quarter were $26 8 million compared to 27 point out $1 million in Q2 of 2023, while adjusted operating expenses were $24 4 million for the second quarter of 2024 compared to $24 8 million for the acute or Q2 of 2023.
Speaker Change: The year over year reduction in operating expense as a result of several initiatives. We began in 2023 and maximize our capital efficiency overall R&D spend was $1 5 million lower than the prior year offset by investment in commercial operations.
Jeffry Keyes: Year-to-date, our total operating expenses were $50.4 million compared to $56.3 million in the prior year, a decrease of more than 10%. The progress on capital efficiency is even more significant on a year-to-day basis, where R&D expenses were down $7.5 million, and overall operating expenses were down $5.9 million after investment in commercial operations. Adjusted EBITDA for the second quarter of 2024 was negative $22.6 million as compared to negative $22.9 million in the second quarter of 2023. As of June 30, 2024, we had $218.1 million in cash and cash equivalents and investments in marketable securities. Now I'll turn the call over to the operator to open the line for questions.
Speaker Change: Year to date, our total operating expenses were $50 4 million compared to $56 3 million in the prior year, a decrease of more than 10% in.
Speaker Change: Progress on capital efficiency is even more significant on a year to date basis.
Speaker Change: R&D expenses were down $7 5 million.
Speaker Change: And overall operating expenses down $5 9 million after investment in commercial operations.
Jeff Keyes: Net loss for the second quarter of 2024 was 23.1 million compared to 25.6 million in Q2 of 2023, a decrease of 2.5 million or about 10%. The decrease in net loss was primarily related to the operating expense reduction, R&D, offset by changes in dividend income and unrealized gains on marketable security.
Speaker Change: Net loss for the second quarter of 2024 was $23 1 million compared to $25 6 million in Q2 of 2023, a decrease of $2 5 million or about 10%. The decrease in net loss was primarily related to the operating expense reduction partially offset by changes in <unk>.
Speaker Change: <unk> income and unrealized gains on marketable securities.
Jeff Keyes: News. Adjusted EBITDA for the second quarter of 2024 was negative 22.6 million, as compared to negative 22.9 million in the second quarter of 2023. In late 2023, we made some structural changes to our mix of investment holdings to maximize yield while minimizing risk. These changes, along with the impact of rate increases, produce dividend and interest income of 2.9 million in the second quarter of 2024 compared to 2.5 million in Q2 of 2023, an increase of the last 15%. As of June 30, 2024, we had 218.1 million in cash and cash equivalents and investments in marketable securities.
Speaker Change: Adjusted EBITDA for the second quarter of 2024 was negative $22 6 million as compared to negative $22 9 million in the second quarter of 2023.
Speaker Change: In late 2023, we've made some structural changes started makes a investment holdings to maximize yield while minimizing risks. These changes along with the impact of rate increases produced dividend and interest income of $2 9 million in the second quarter of 2024 compared to $2 5 million in Q2 of 2023, an increase of about 16%.
Speaker Change: Sure.
Speaker Change: As of June 32024, we had $218 1 million in cash and cash equivalents and investments in marketable securities.
Jeff Keyes: Turnity guidance. We have reiterated our 2024 outlook, which includes a revenue range between 3.7 and 4.2 million, adjusted operating expenses of less than 103 million, and net cash usage of less than 100 million. Finally, we still expect our existing cash and cash equivalents and investments in marketable securities will provide runway into 2026.
Speaker Change: Turning to guidance, we reiterate our 2024 outlook, which includes a revenue range between three seven and $4 2 million adjusted operating expenses of less than $103 million and net cash usage less than $100 million.
Speaker Change: Finally, we still expect our existing cash and cash equivalents and investments in marketable securities will provide runway into 2020.
Unknown Executive: Now I'll turn the call over to the operator to open the line for questions. Thank you. At this time, we will conduct the question-and-answer session.
Unknown Executive: Yeah, you asked about the pushes in the polls.
Speaker Change: Now I'll turn the call over to the operator to open the line for questions.
Speaker Change: Thank you at this time, we will conduct a question and answer session.
Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one morning, Ken.
Unknown Executive: As you said, we will conduct the question and answer session 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster.
Speaker Change: These standby, while we compile the Q&A roster.
Speaker Change: Okay.
Swayampakula Ramakanth: Our first question comes from the line of Swayan Pagula, Ramakant of HCW. Your line is now open. Thank you. Good afternoon. This is R.K. From HCW, right? So, looking at the, as you said, the first quarter of sales of commercialization with platinum and suddenly seems like a good start by keeping the guidance where it was from prior quarter. So, you're kind of telegraphing for a decent runway in the second half of this year. So, can you just talk to us some of the pushes and pulls on the second half? And also what gives you the confidence of the sort of sales that you need to recognize in the second half?
Speaker Change: Our first question comes from the line of swam Pakula pharmacology of H CW. Your line is now open.
Speaker Change: Thank you.
Speaker Change: Good afternoon, Jeff I'm, Jeff This is RK from him.
Speaker Change: Right.
Speaker Change: So.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: Looking at the.
Speaker Change: And the first quarter of sales of commercial commercialization.
Speaker Change: With platinum.
Speaker Change: Certainly seems like a good start.
Speaker Change: By keeping the guidance related to us.
Speaker Change: Prior.
Speaker Change: The prior quarter.
Speaker Change: You're kind of.
Speaker Change: Turning to outcome for R&D some.
Speaker Change: <unk> run rate.
Speaker Change: Second half of this year.
Speaker Change: So can you just talk to us.
Speaker Change: Some of the pushes and pulls on the second half.
Speaker Change: Sure.
Speaker Change: Give us the confidence.
Speaker Change: I'll just sort of.
Speaker Change: The amount of sales that you need to.
Speaker Change: Your covenants.
Jeff Hawkins: Yeah, thanks for that question, R.K. Let me start out, and then if Jeff wants to add a little bit, he can. The first thing I'd say is the first half of the year was in line with our expectations. So, as we thought about the guidance we put together, the sort of what we expected to see in that Q1 where it was the controlled launch followed by the first quarter here, Q2, a full commercial launch. You know, we had talked about that being a modest increase from Q1 to Q2. So, the trends and the results sort of match what we expected in terms of when we went about setting the guidance.
Speaker Change: In the second half.
RK: Yes, thanks for that question RK.
RK: Let me start out and then if Jeff wants to add a little bit. He can the first thing I'd say is the first half of the year.
Jeff Hawkins: In line with our expectation so as we thought about the guidance we put together.
Jeff Hawkins: Sort of what we expected to see in that Q1, where it was the controlled launch followed by the first quarter here Q2, a full commercial launch.
Jeff Hawkins: We had talked about that being a modest increase from Q1 to Q2, so that the trends and the results sort of match, what what we expected.
Speaker Change: In terms of.
Jeff Hawkins: As we think about the setup for the second half, you asked about the pushes and the pulls. You know, one component of that is what we talked about in the prepared remarks, which is, you know, we have been scaling the team over the course of the first half of the year. So if you remember back in Q1, we had about 24 people in our sort of customer-facing organization, our commercial team; that number's about 30 here in Q2. And as we look out over the remainder of the year, we have about another 10 sort of roles.
RK: When we went about setting setting the guidance as we think about the setup for the second half.
Speaker Change: You asked about the pushes and pulls.
Speaker Change: One component of that is what we talked about in the prepared remarks, which is.
Speaker Change: We have we have been scaling the team over the course of the first half of the year. So if you remember back in Q1, we had about 24 people in our customer facing organization, our commercial team that number's about 30 here in Q2, and as we look out over the remainder of the year we have.
Speaker Change: About another 10 sort of roles were planning across the U S and western Europe that will add to our field facing sort of customer facing organization. So they will bring some level of additional.
Jeff Hawkins: We're playing in planning across the US and Western Europe that will add to our, you know, fuel facing sort of customer facing organization. So they will bring some level of additional performance above our, our existing team as they get on boarded and get trained and, and get lives. I mean, the, the poll on that is obviously what, what we mentioned a little bit in our remarks and certainly others are talking about, which is just sort of the capital cycles and health; they will go. I can tell you that, as we said in the remarks, the capital sales cycle has been a bit slower than maybe historically you would expect to see.
Speaker Change: Additional performance above our our existing team as they get on boarded and get trained and get lives I mean, the pull on that is obviously, what what we mentioned a little bit in our remarks, and certainly others are talking about which is just sort of the capital cycles and how fast. They will go I can tell you that as we said.
Speaker Change: The remarks.
Speaker Change: The capital sales cycle has been a bit slower than maybe historically you would expect to see but we havent seen capital just disappearing we've seen it more shift out by a quarter or shipped out by a couple of months not a not just sort of disappear in terms of its availability. So I think that's the potential for <unk>.
Jeff Hawkins: But we haven't seen capital just disappearing. We've seen it more shift out by a quarter or shift out by a couple months, not a not just sort of disappear in terms of its availability. So I think that's the potential for sort of the poll. Given sort of all those remarks, I think the way I think about, you know, Q3 is, again, another modest step up from Q2 and then Q4 with those additional territories full and some of these other things in place that we talked about, some of the new kit launches coming. I think you'll see, you know, the additional acceleration then from Q3 into Q4.
Speaker Change: The poll.
Speaker Change: Given sort of all of those remarks, I think the way I think about Q3 is again another modest step up from Q2 and in Q4 with those additional territories full and some of these other things in place that we talked about some of the new kit launches coming I think youll see.
Speaker Change: That additional acceleration then from Q3 into Q4.
Unknown Executive: Fantastic.
Jeff Hawkins: So with talking about the personal itself, how much time do these folks need, you know, to settle in and actually convert the elites into a sale. I understand part of it is the capital cycle, but the other part is also trying to make the sale and complete the sale. Sure, there can be quite, you know, there's quite a bit of a range that can happen there. RK, I would say the general rule of thumb is that if you hire a brand new person to a new territory right now, it's going to be about three to four months until they're fully trained out in the territory, sort of getting their arms around what existing leads might be there.
Speaker Change: Fantastic.
Speaker Change: No.
Speaker Change: Talking about the personnel itself.
Speaker Change: How much time.
Speaker Change: These hubs.
Speaker Change: So now to settle an unnaturally.
Speaker Change: Convert leads into a sale.
Speaker Change: I understand part of it is the capital cycle, but the other part is also.
Speaker Change: Trying to make this happen.
Speaker Change: Please proceed.
Speaker Change: Okay.
RK: Sure there can be quite there's quite a bit of a range that can happen. There RK I would say the general rule of thumb is that if you hire a brand new person into a new territory right now it's going to be about three to four months until they're fully trained out in the territory sort of getting their arms around.
Jeff Hawkins: And how deep those are in the funnel to where they can sort of convert that into a sale. I think if you wanted to bracket that on the upper end, you know, there can be cases where instead of three to four months, it could be as much as five or six months, and that has a lot to do with just how developed the territory is. So if we drop somebody as an example into a new region where portions of that region have previously been worked on by other sales professionals, that new person might see that three to four month ramp up, but if we place somebody into a net new country or net new region of the country, they may take closer to that six months before they're converting leads into sales because the leads in their territory just aren't as evolved, aren't as developed.
Speaker Change: What existing leads might be there and how deep those are in the funnel to where they can sort of convert that into a sale I think if you wanted to bracket that on the upper end there.
Speaker Change: There can be cases, where instead of three to four months it could be as much as five or six months and that has a lot to do with just how develop the territory is so if we dropped somebody as an example into a new region, where portions of that region had previously been worked on by other sales professionals that new person might see that.
Speaker Change: Three to four month ramp up but if we placed somebody into a net new country or net new region of the country. They may take closer to that six months before they're converting leads into sales because the leads in their territory just arent as evolved aren't has developed and they've got to work through those qualifications with the customers the capital dock.
Unknown Executive: And they've got to work through those qualifications with the customers, the capital dollars, etc. Okay, thanks for that.
Speaker Change: Et cetera.
Jeff Hawkins: Then you talked a little bit about the various scientific presentations and the data. And I'm just trying to tie, trying with the presentations with the new kit coming in and sales is very way to try and with that in terms of leads or anything that you're seeing. Yeah, I'm not sure if there's a good way to triangulate it. The way I think about it is the following. So the data that's getting presented by customers, as we discussed, the look down the call is still a pretty broad range of applications, right? Proteoforms, whether that be the isoform peptides we talked about or PTMs, you know, continues to be an attractive area for customers, an area of interest for customers, certainly in the academic research setting or translational setting. You know, the bar coding, again picking up momentum in the pharma and biotech space.
Speaker Change: Okay. Thanks for that then.
Speaker Change: Bert.
Arabia: Arabias scientific presentations and the data and I'm just trying to triangulate.
Speaker Change: <unk>.
Greg: The presentations Greg.
Speaker Change: With the new kit coming in on sales.
Speaker Change: In a way to triangulate that.
Speaker Change: <unk> leads our loans given that youre seeing.
Speaker Change: Yes, I'm not sure if there is a good way to triangulate it the way I would think about it is the following so the data that is getting presented.
Unknown Executive: By customers, as we discussed a little bit on the call, is still a pretty broad range of applications, right? You know, proteoforms, whether that be the isoform peptides we talked about or PTMs, you know, continue to be an attractive area for customers, an area of interest for customers, certainly in the academic research setting or translational setting. The barcoding, again, picking up momentum, in the pharma and biotech space.
Speaker Change: By customers as we discussed a little bit on the call is still a pretty broad range of applications right protein forms whether that be the eye.
Speaker Change: So form peptides, we talked about our <unk> continues to be.
Speaker Change: An attractive area for customers an area of interest for customers certainly in the academic research setting our translational setting.
Speaker Change: The bar coding again picking up momentum.
Unknown Executive: So, you know, the first thing that has to happen, as you know, RK, is that data has to get generated and presented at meetings. Additional studies get run, and that gets converted into, you know, full manuscripts that can be submitted for publication. So I think that's sort of the trajectory that we expect in that regard.
Jeff Hawkins: So, you know, the first thing that has to happen, as you know, RK, is that data has to get generated and presented at meetings; additional studies get run that gets converted into, you know, full manuscripts that can be submitted for publications. So I think that's sort of the trajectory that we expect in that regard. What we're doing on kits is really just listening to the market and observing our performance and learning about other sampled types or other applications people want to run and just continually improving upon the sort of the range of applications we can perform.
Speaker Change: In the pharma and biotech space so.
Speaker Change: The first thing that has to happen as you know our case that data has to get generated and presented at meetings additional studies get Ron that gets converted into full manuscript that can be submitted for publication. So I think that's sort of the.
Speaker Change: The trajectory that we expect in that regard what we're doing on kit is really just listening to the market and observing our performance and learning about other sample types or other applications people want to run and just continuously improving upon.
Unknown Executive: What we're doing on kits is really just listening to the market and observing our performance and learning about other sample types or other applications people want to run and just continually improving upon the sort of range of applications we can perform. So library prep is really about just lifting, generally speaking, the number of applications and types of samples and types of proteins a customer can work with. I think the barcoding kits are great and are really now developing an application-specific kit.
Speaker Change: The range of of applications. We can perform so library prep is really about just lifting generally speaking lifting the number of applications and types of samples and types of proteins a customer can work with I think the barcoding kits are great.
Jeff Hawkins: So library prep is really about just lifting, generally speaking, lifting the number of applications and types of samples and types of proteins, the customer can work with. I think the bar coding kits, a great example really, now developing an application specific kit. And what I mean by that is the early data on bar coding; customers are using our existing library prep kit and developing bar codes in the context of that. And it works, and it works fine, but we believe there are ways to improve that that can really shorten that upfront library prep time specific to bar coding and then improve the downstream performance.
Unknown Executive: And what I mean by that is, customers are using our existing library prep kit and developing barcodes in the context of that. And it works, and it works fine, but we believe there are ways to improve that that can really shorten that upfront library prep time specific to barcoding and then improve downstream performance. And this is really about optimizing now a kit for an application based on a deep understanding of specifically what that customer is trying to accomplish and what performance metrics will drive their utilization across more and more of their projects.
Unknown Executive: Perfect. Thank you. Thanks for taking all my questions.
Speaker Change: Really now developing an application specific kit and what I mean by that is the early data on barcoding customers are using our existing library prep kit and developing barcodes in the context of that and it works and it works fine, but we believe there are ways to improve that.
Speaker Change: That can really shorten that upfront library prep time specific to Barcoding and then improve the downstream performance and this is really about optimizing now a kit to an application based on a deep understanding of specifically what that customer is trying to accomplish and what performance metrics will draw.
Unknown Executive: And this is really about optimizing now a kit to an application based on a deep understanding of specifically what that customer’s trying to accomplish and what performance metrics will drive their utilization across more and more of their projects. Perfect. Thank you. Thanks for taking on my questions. You're welcome. Thank you.
Speaker Change: <unk> their utilization across more and more of their projects.
Speaker Change: Perfect. Thank you thanks for taking all my questions.
Speaker Change: Youre welcome. Thank you.
Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back to Jeff Hawkins for closing remarks.
Unknown Executive: I am showing no further questions at this time.
Speaker Change: Thank you I am showing no further questions at this time I would now like to turn it back to Jeff Hawkins for closing remarks.
Jeff Hawkins: I would now like to turn it back to Jeff Hawkins for closing remarks. Thank you for attending today. We look forward to providing more updates next week at Canaccord, as well as in our next earnings call coming up later in the year. Thank you for attending. Thank you all for your participation today.
Jeffrey Hawkins: Thank you for attending today. We look forward to providing more updates next week at Canaccord as well as in our next earnings call coming up later in the year.
Jeff Hawkins: Thank you for attending today, we look forward to providing more updates next week at Canaccord as well as on our next earnings call coming up later in the year.
Operator: Thank you all for your participation today. You may now disconnect.
Speaker Change: Thank you for attending.
Speaker Change: Thank you all for your participation today you may now disconnect.
Unknown Executive: You may now disconnect. Thank you.
Speaker Change: Okay.
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Speaker Change: Yeah.
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