Q2 2024 Quanterix Corp Earnings Call
Good day, and thank you for standing by. Welcome to the Quanterix Q2 2024 earnings call. At this time, all participants are in a listen-only mode.
Operator: Quinterix Q2 2024 Earnings Call. At this time, all participants are in a listen-only mode.
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Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Francis Pruell, Head of Investor Relief. Thank you, and good afternoon.
Please be advised that today's conference is being recorded.
I would now like to hand the conference over to our first speaker today, Francis Pruell, Head of Investor Relations. Thank you, and good afternoon. With me on today's call are Masoud Toloue, Quanterix's President and CEO , as well as Vandana Sriram, our Chief Financial Officer.
Francis Pruell: With me on today's call are Masoud Toloue, Quanterix's President and CEO, as well as Vandana Sriram, our Chief Financial Officer. Before we begin, I would like to remind you of a few things. This call will be recorded, and a replay will be available on the investor section of our website. Today's call will contain forward-looking statements within the meaning of U.S. private security litigation reform. These forward-looking statements are based on management's beliefs and assumptions and on information available as of the date of this call.
Francis Pruell: We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements because forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statement. The risks and uncertainties that we face are described in our filings with the Securities and Exchange Commission.
Speaker Change: Before we begin, I would like to remind you of a few things. This call will be recorded and a replay will be available on the investor's section of our website. Today's call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act.
Speaker Change: These forward-looking statements are based on management's beliefs and assumptions and on information available as of the date of this call.
Speaker Change: We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements.
Speaker Change: Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
Speaker Change: The risks and uncertainties that we face are described in the filings with the Securities and Exchange Commission.
Francis Pruell: Supplementing our financial statements presented on a gap basis, we have provided certain non-gap financial measures. These non-GAAP measures are used to evaluate our operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business and our competitors. We believe that such measures are important in comparing current results with other periods' results and assessing our operating performance within our industry. Non-Gap Financial Information presented here should be considered in conjunction with and not a substitute for the financial information presented in accordance with Gap.
Speaker Change: To supplement our financial statements presented on a gap basis, we have provided certain non-gap financial measures.
Speaker Change: These non-gap measures are used to evaluate our operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business and our competitors.
Speaker Change: We believe that such measures are important in comparing current results with other periods results and assessing our operating performance within our industry.
Speaker Change: Non-GAAP financial information presented herein should be considered in conjunction with, and not a substitute for, the financial information presented in accordance with GAAP.
Francis Pruell: Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures set forth in the appendix of the presentation posted to our website and in the earnings release issued today. Finally, any percentage changes we discuss will be on a year-over-year basis unless otherwise noted.
Speaker Change: Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures set forth in the appendix of the presentation posted to our website and in the earnings release issued today.
Speaker Change: Finally, any percentage changes we discuss will be on a year-over-year basis unless otherwise noted. Now, I'd like to turn the call over to Masoud Toloue.
Masoud Toloue: Now, I'd like to turn the call over to Masoud Toloue.
Masoud Toloue: Starting with our second quarter results, toll revenue of $34.4 million grew 11%. Despite a constrained capital funding environment and overall muted growth in the tool space, demand for Samoa sensitivity continues to expand by double digits.
Massoud Toloue: Thank you, Francis.
Massoud Toloue: Starting with our second quarter results, total revenue of $34.4 million grew 11 percent.
Massoud Toloue: Despite a constrained capital funding environment and overall muted growth in the tool space, demand for Samoa sensitivity continues to expand by double digits.
Masoud Toloue: This quarter's results were driven by 35% growth from our accelerator lab, where customers can access our tech without the Cap Act, 7% growth from our consumables business, and very early signs of progress with partner enablements in diagnostics. 2.4 non-gap gross margin of 52.3% with solid as we continue to invest in the best in our assay development, which we expect will yield future growth. Our balance sheet remains strong with nearly 300 million of liquidity. Cash usage during the period was approximately $5 million.
Speaker Change: This quarter's results were driven by 35% growth from our Accelerator Lab, where customers can access our tech without the CapEx.
Massoud Toloue: 7% growth from our consumables business.
Massoud Toloue: and very early signs of progress with partner enablement in diagnostics.
Massoud Toloue: Second quarter non-gap gross margin of 52.3% was solid as we continue to invest in our assay development, which we expect will yield future growth.
Massoud Toloue: Our balance sheet remains strong with nearly $300 million of liquidity.
Massoud Toloue: Cash usage in the period was approximately $5 million.
Masoud Toloue: Vandana will touch on these results and our updated guidance in more detail. Recall, our three core growth objectives are one. High growth in many.
Massoud Toloue: Vandana will touch on these results and our updated guidance in more detail.
Vandana Sriram: Recall, our three core growth objectives are one, high growth in menu,
Masoud Toloue: Specifically, maintaining our leadership position in neurology and growing into immunology and oncology adjacencies. The ubiquity of Samoa in all labs, where we are allocating heavy resources and investment into pushing forward a new frontier for multiplexed, ultrasensitive protein detection that we expect will culminate in a new platform. M3, A Leadership Position in Diagnostic Testing for Alzheimer's Disease, Starting with Media.
Vandana Sriram: Specifically, maintaining our leadership position in neurology and growing into immunology and oncology adjacencies.
Vandana Sriram: Two.
Vandana Sriram: The ubiquity of Samoa in all labs.
Speaker Change: where we are allocating heavy resources and investment into pushing forward a new frontier for multiplexed, ultrasensitive protein detection that we expect will culminate in a new platform.
Speaker Change: And three, a leadership position in diagnostic testing for Alzheimer's disease.
Masoud Toloue: We commercialized three new assays this quarter for a total of eight in our first half of 24 and are on track to complete 20 by end of year. In neurology, we're building on the successful launch of BDTOW and Plantalonch and N4PDSA in Q3, which combine BDTOW with additional relevant markers in a neurology-focused multiplex test. We also expect to launch several exciting cytokine panels in the back half of this year, which we will discuss later this year.
Speaker Change: Starting with menu.
Speaker Change: We commercialized three new assays this quarter for a total of eight in our first half of 24 and are on track to complete 20 by end of year.
Speaker Change: In Neurology, we're building on the successful launch of BD-Tau and plan to launch an N4PD assay in Q3, which combines BD-Tau with additional relevant markers in a neurology-focused multiplex test.
Speaker Change: We also expect to launch several exciting cytokine panels in the back half of 24.
Masoud Toloue: Samoa has a clear leadership position in neurology, and our menu continues to accelerate this lead, powering exciting research and clinical trials at Neural Third. Starting with neuroscience and a recent June publication of Nature Medicine, researchers using some of what were able to demonstrate that plasma extracellular vesicle tau and TDP43 were effective biomarkers in both frontal temporal dementia and ALS, suggesting new modalities for evaluating disease progression and clinical trial Next, in Oncology, in the International Journal of Molecular Sciences, researchers using SOMOA showed that NFL and GFAP were promising targets to evaluate brain metastases in patients with lung cancer. Patients with brain metastases showed higher serum levels of NFL and G-Fab compared to those without. Suggesting these biomarkers can effectively identify patients at high risk and potentially improve the efficiency of MRI screening. Staying on NFL.
Speaker Change: which we will discuss later this year.
Speaker Change: Samoa has a clear leadership position in neurology.
Speaker Change: and our menu continues to accelerate this lead, powering exciting research, clinical trials, and neurotherapies.
Speaker Change: Starting with neurology and a recent June publication of Nature Medicine.
Speaker Change: researchers using Samoa were able to demonstrate that plasma extracellular vesicle tau
Speaker Change: and TDP-43 were effective biomarkers in both Frontal Temporal Dementia and ALS, suggesting new modalities for evaluating disease progression and clinical trial targeting.
Speaker Change: Next, in Oncology in the International Journal of Molecular Sciences, researchers using Simowa showed that NFL and GFAP were promising targets to evaluate brain metastases in patients with lung cancer.
Speaker Change: Patients with brain metaccesses showed higher serum, NFL and G-FAP compared to those without. Suggesting these biomarkers can effectively identify patients at high risk and potentially improve the efficiency of MRI screenings.
Masoud Toloue: There is a growing recognition by the FDA that this biomarker is important in drug development and clinical trials. In May, the Foundation for the National Institute of Health received FDA approval for its intent to qualify NFL as a biological indicator of frontal temporal degeneration. This builds upon the agency's 2023 accelerated approval of Biogen's drug Topercin for the treatment of ALS, which relied in part upon extended review, evaluating trends, and reducing NFL levels.
Speaker Change: Staying on NFL, there's a growing recognition by the FDA that this biomarker is important in drug development and clinical trials.
Speaker Change: In May, the Foundation for the National Institute of Health received acceptance from the FDA for its intent to qualify NFL as a biological indicator of frontal temporal degeneration.
Speaker Change: This builds upon the agency's 2023 accelerated approval of Biogen's drug Tofersim for treatment of ALS, which relied in part upon extended review evaluating trends in reducing NFL levels.
Masoud Toloue: More recently, in Q2, NFL was again used as an effective biomarker by Nexon bioscience, and next, they announced positive top-line results for their pivotal phase three trial in Guillain-Barray syndrome, a condition in which the body's immune system attacks the peripheral nervous system.
Speaker Change: More recently, in Q2, NFL was again used as an effective biomarker by Enexon Biosciences.
Speaker Change: In the next one announced positive top line results for their pivotal phase 3 trial in Guillain-Barray syndrome, a condition in which the body's immune system attacks the peripheral nervous system.
Masoud Toloue: Utilizing Data Generated by our Excellitor Lab, an exon was able to demonstrate that their phase three trial met its primary endpoint. In addition, Exxon established that their therapy delivered improvements compared to placebo with other secondary, pre-specified endpoints. One of which demonstrated early reduction in the biomarker NFL between week two and four of their... Moving forward, we expect more clinical trials will incorporate monitoring NFL levels and will be ready to support our customers as the market leader for this biomarker. Simone leadership among key opinion leaders, researchers, and pharma was evident at the Alzheimer's Association International Conference, or AISC, last week.
Speaker Change: Utilizing data generated by our Accelerator Lab, Enexon was able to demonstrate that their Phase III trial met its primary endpoint.
Speaker Change: In addition, Enexon established their therapy delivered improvements compared to placebo with other secondary pre-specified endpoints, one of which demonstrated early reduction in the biomarker NFL between weeks two and four of therapy.
Speaker Change: Moving forward, we expect more clinical trials will incorporate monitoring NFL levels, and we'll be ready to support our customers as the market leader for this biomarker.
Samoa: Samoa's leadership among key opinion leaders, researchers, and pharma was evident at the Alzheimer's Association International Conference, or AISC, last week.
Masoud Toloue: Samoa has helped build the field of highly sensitive biomarker detection in neurology, as evidenced by our technology, which was cited in approximately 150 posters and platform presentations at the conference. Our platform is entrenched with academia and pharma, and we continue to work with our customers to generate data for key publications and evidence for pivotal clinical trials. The highlight of our week at AAIC was important new data on our multi-marker approach to Alzheimer's testing
Speaker Change: Samoa has helped build the field of highly sensitive biomarker detection in neurology as evidence by our technology cited in approximately 150 posters and platform presentations at the conference.
Speaker Change: Our platform is entrenched with academia and pharma, and we continue to work with our customers to generate data for key publications and evidence for pivotal clinical trials.
Speaker Change: The highlight of our week at AAC was important new data on our multi-marker approach to Alzheimer's testing.
Masoud Toloue: Our presented data was derived from biohermys and cantate trials in independent and diverse cohorts, and highlighted that combining Ammoid Beta 4240 NFL and G-Fab with Pital 2017 and using an algorithm can improve the accuracy of diagnosis compared to a standalone Pital 2017 test.
Speaker Change: Our presented data was derived from BioHermes and Cantate trials, two independent and diverse cohorts.
Speaker Change: and highlighted that combining Ammoid Beta 4240 NFL and GFAP with Pital 2017 and using an algorithm can improve the accuracy of diagnosis compared to a standalone Pital 2017 test.
Masoud Toloue: The future of Alzheimer's Agnostic Therapy Selection, with blood-based biomarkers, will follow a multi-analyt wrote. 30% of the approximately 7 million symptomatic Alzheimer's patients in the U.S. today, after the apologies other than Alzheimer's. We believe these patients will benefit from the diagnostic clarity that multi-marker tests can provide. We will launch a multi-marker LDT later this year, and we'll share further data on our test at CTAD this fall.
Speaker Change: We believe.
Speaker Change: The future of Alzheimer's Diagnostics Therapy Selection with blood-based biomarkers will follow a multi-analyte roadmap.
Speaker Change: 30% of the approximately 7 million symptomatic Alzheimer's patients in the U.S. today have pathologies other than Alzheimer's.
Speaker Change: We believe these patients will benefit from the diagnostic clarity that multi-marker tests can provide.
Speaker Change: We will launch a multi-marker LDT later this year and will share further data on our test at CTAD this fall.
Masoud Toloue: Staying on Diagnostics. I want to make a clear point on why Samoa is best in class for early detection of Alzheimer's disease. Two days ago, a similar platform has provided a numerical result for every single Lucent P-Tau 217 patient sample test, while other competing platforms are not able to provide results for up to 30% of patients due to limits of those platforms' sensitivity.
Speaker Change: Staying on Diagnostics.
Speaker Change: I want to make a clear point on why Samoa is best in class for early detection of Alzheimer's disease.
Speaker Change: Two dates, the Simo platform has provided a numerical result for every single loose-end P-Tow 2017 patient sample tested.
Speaker Change: Other competing platforms are not able to provide results for up to 30% of patients.
Speaker Change: due to limits of those platforms' sensitivity.
Masoud Toloue: To be clear, that means for every 1,000 patients visiting a neurologist to get blood testing, up to 300 may not get a numerical result if a platform other than Samoa is used. It is well understood that Ameloid progresses over time. Someone with family history and early memory concerns should get a blood-based test.
Speaker Change: To be clear, that means for every 1,000 patients visiting a neurologist to get blood testing.
Speaker Change: Up to 300 may not get a numerical result if a platform other than Samoa is used.
Speaker Change: It is well understood that amyloid progresses over time. Someone with family history and early memory concerns should get blood-based testing.
Masoud Toloue: Of the blood-based tests available, we believe Samoa is best for measuring this early-to-late progression for the simple reason that there is a numerical value to measure each time someone is tested in the clinic. Our commercialization efforts for Alzheimer's Diagnostics are also progressing. Within the quarter, we engaged four new partners, representing both large hospital systems and reference labs. Broad Geographic Reads More specifically, we announced three new partnerships in the US, including Mount Sinai, Banner Health, and UCSF.
Speaker Change: Of the blood-based test available, we believe Simoa is vast for measuring this early to late progression for the simple reason that there's an numerical value to measure each time someone has tested in the clinic.
Speaker Change: Our commercialization efforts for Alzheimer's diagnostics are also progressing.
Masoud Toloue: The Approximately 5 Million Patients Annually. We also announced the partnership with King Med, which has 49 labs set up in mainland China, Hong Kong, and Mikao. These partnerships build upon our previously announced relationships and our early steps in building the infrastructure for Alzheimer's tests. Vandana will now discuss our financial performance in more detail.
Vandana Sriram: I will now go over our second quarter results and our updated guidance for 2024. As Masoud described, Tutu was another strong author of Executions, with double-digit growth compared to the priori.
Vandana Sriram: Total revenue for the second quarter of 2024 was 34.4 million, an increase of 11% compared to the prior year. Accelerator Labs revenue was 10.1 million, an increase of 35% as demand remains robust for the more attention. Consumable Revenue was $17.4 million, an increase of 7%, and Instrument Revenue was $2.5 million, a decrease of 29%. In terms of revenue stratification, our customer mix in the period was approximately $55.45 between pharma and academia, and 85% of our assay and accelerator sales were for neurological diseases.
Speaker Change: Total revenue for the second quarter of 2024 was $34 4 million, an increase of 11% compared to the prior year.
Speaker Change: Accelerator lab revenue was $10 1 million an increase of 35%.
Speaker Change: Demand remains robust.
Speaker Change: On sensitivities.
Speaker Change: Consumable revenue was $17 4 million an increase of 7%.
Speaker Change: Instrument revenue was $2 5 million a decrease of 29%.
Speaker Change: In terms of revenue stratification, our customer mix in the period was approximately 50 545 between pharma and academia.
Speaker Change: At 85% of our assay and accelerated sales both on urology disease.
Vandana Sriram: In addition, we recognize 0.7 million of revenue in the portal related to enabling our diagnostic partners to perform LED testing by selling them instruments, consumables, and likes. However, revenue from patient testing under our Lucent platform was immaterial to the court.
Speaker Change: In addition, we recognized $7 million of revenue in the quarter related to enabling our diagnostics partners to perform <unk> testing by selling them instrument consumables and licensing.
Speaker Change: Revenue from patient testing under on Nielsen to platform was immaterial for the quarter.
Vandana Sriram: Our revenue growth was led by North America and Europe, which grew 15 and 25% respectively in the past. Our business in the Asia Pacific region was down 36% in the period, as China remains a challenging end market despite its relatively small size in our workforce.
Speaker Change: Our revenue growth was led by North America, and Europe, which grew 15 and 25% respectively in the quarter.
Speaker Change: Our business in the Asia Pacific region was down 36% in the period.
Speaker Change: China remains a challenging end market despite its relatively small size in our portfolio.
Vandana Sriram: In addition, we did not have a repeat of a one-time revenue adjustment from Q2-23 in that report. For the quarter, our total installed base increase mirrored our performance in Q1. While not a surprise, the capital budget environment remains difficult, and we continue to expect this overhang to persist through the balance of 2020. Shifting next to growth margin for kids.
Speaker Change: In addition, we did not have a repeat of the one time revenue adjustment from Q2 2003 in batteries.
Speaker Change: For the quarter, our total installed base increase mirrored our performance in Q1.
Speaker Change: Not a surprise the capital budget environment remains difficult as we can.
Speaker Change: Do you expect this overhang to persist through the balance of 2024.
Speaker Change: Shifting next to gross margin for Q2.
Vandana Sriram: Gas gross profit and margin were $20.1 million and 58.3%, respectively. Uppoint 9 million and down approximately 340 basis points compared to the prior i. Tritid Corp and Non-GapCode gross profit was 18 million, and Non-GapCode margin was 52.3%.
Speaker Change: GAAP gross profit and margin by $20 1 million and 58, 3% respectively.
Speaker Change: Up $9 million and down approximately 340 basis points compared to the prior year.
Speaker Change: Second quarter non-GAAP gross profit was $18 million.
Speaker Change: non-GAAP gross margin was 52, 3%.
Vandana Sriram: Up half a million, and down approximately 410 basis points, respectively, compared to the second quarter of 2022. As a reminder, they had several one-time items positively impacting growth margin in the second quarter of 2003, which included approximately 1 million of incremental revenue compared to 2224 that slowed through at 100% growth margin and, in fact, 140 basis points on margin. The remainder of the changing growth margin compared to the prior year is due to investments made in the operations and quality framework as part of our transformation.
Speaker Change: Half a million and down approximately 410 basis points, respectively compared to the second quarter of 2023.
Speaker Change: As a reminder, we had several one time items positively affecting gross margin in the second quarter of 2003.
Speaker Change: Which included approximately $1 million of incremental revenue compared to Q2 2004.
Speaker Change: We had 100% gross margin and impact of 140 basis points on margin.
Speaker Change: The remainder of the change in gross margin compared to the prior year is due to investments made in the operations and quantity framework as part of our transformation.
Vandana Sriram: As a reminder, these investments took place in the second half of 2020. Moving down the piano, the second quarter gap is creating expenses for 33.2 million, an increase of 4.5 million compared to the prior. Non-gap operating expenses were 31.1 million and increased by 4 million compared to Q220. Within operating expenses, higher spending compared to the prior year was primarily due to continued investments in our R&D and commercial efforts. These lessons are targeted towards our clearly defined news on the growth pillars, which Masoud highlighted to start the war.
Speaker Change: As a reminder, these investments took place in the second half of 2023.
Speaker Change: Moving down the P&L second quarter GAAP operating expenses by $33 2 million, an increase of $4 5 million compared to the prior year.
Speaker Change: non-GAAP operating expenses were $31 1 million, an increase of $4 million compared to Q2 2003.
Speaker Change: Within operating expenses.
Speaker Change: You're spending compared to the prior year.
Speaker Change: It was primarily due to continued investments in our R&D and commercial effort.
Speaker Change: These investments are targeted towards our clearly defined near term growth below Fitch netsuite highlighted to stock.
Vandana Sriram: More specifically, we are allocating resources to our new platform, the build-out of our advantage plus assay menu, and our failed marketing and regulatory efforts in dice. We are making these investments because we see clear signs of illness. Looking at the balance sheet, we ended the second quarter of 2024 with 299.5 million of cash, cash equivalents, marketable securities, and restricted cash. Cash flow in the period was a net outflow of 5.1 million.
Speaker Change: More specifically, we are allocating resources to our new platform the buildout of our advantage plus assay menu.
Speaker Change: Our sales marketing and regulatory efforts in diagnostics.
Speaker Change: We're making these investments because we see clear signs of demand.
Speaker Change: Moving to the balance sheet. We ended the second quarter of 2024 with $299 5 million of cash cash equivalents marketable securities and restricted cash.
Speaker Change: Cash flow in the period was a net outflow of five.
Speaker Change: $5 1 million hour.
Vandana Sriram: Our liquidity remains strong, and we continue to prioritize investment in organic growth. Moving on from the second quarter, our updated full year 2024 revenue outlook is a range of 134 to 138 million. Representing double-digit growth of 11% at the mid, this revenue range excludes revenue from losing to 80 diagnostics testing, which we expect will be material in 2020. The change in our guidance is driven by a challenging backdrop for We are assuming that Q3 and Q4 instrument revenue will be similar to the first half of 2024, while previously we had expected an update in the second.
Speaker Change: Our liquidity remains strong and we continue to prioritize investment in organic growth.
Speaker Change: Moving on from the second quarter.
Speaker Change: Our updated full year 2020 for revenue outlook is a range of 124 to 138.
Speaker Change: Representing double digit growth of 11% at the midpoint.
Speaker Change: This revenue range excludes revenue from NUCYNTA 80, diagnostics testing, which we expect will be immaterial in 2024.
Speaker Change: The change in our guidance is driven by a challenging backdrop for instruments.
Speaker Change: Assuming that Q3 and Q4 instrument revenue will be similar to the first half of 2024.
Speaker Change: Previously we had expected an uptick in the second half.
Vandana Sriram: We're also taking a cautious approach to forecasting consumables and are assuming that the weak capital environment will have a knock-on effect on consumables. These changes in our guidance are partially offset by anticipated strong execution and accelerator, where demand for the more sensitive remains relevant. We expect that these updates, in addition to normal freedomality in our business, will result in choose-free being flat to slightly down compared to Q2, and then an uptake in sequential revenue in Q4.
Speaker Change: We're also taking a cautious approach to forecasting consumables.
Speaker Change: Assuming that the weak capital environment will have a knock on effect on consumables pull through.
Speaker Change: These changes in our guidance, partially offset by anticipated strong execution and accelerator where demand for similar sensitivity remains robust.
Speaker Change: We expect that these updates in addition to normal seasonality in our business.
Speaker Change: Great results in Q3 being flat to slightly down compared to Q2, and then an uptick in sequential revenue in Q4.
Vandana Sriram: In total, our updated guidance indicates full-year double-digit growth while also acknowledging a macro environment that remains a child. Throughout this period, we expect to continue to execute on our strategic priorities, setting us up well for strong growth in 2025 and beyond. We are maintaining our gap cross margin guidance of 57-61% and our non-gab cross margin guidance of 51-55. Finally, we now expect cash usage to be at the higher end of our previous cash fund assumption of 25 to 30 million, primarily due to the impact of lower revenue.
Speaker Change: In total our updated guidance indicate full year double digit growth, while also acknowledging a macro environment that remains challenging.
Speaker Change: Throughout the period, we expect to continue to execute on our strategic priorities setting us up well for strong growth in 2025 and beyond.
Speaker Change: We are maintaining our GAAP gross margin guidance of 57% to 61% and our non-GAAP gross margin guidance of 51% to 55%.
Speaker Change: Finally, we now expect cash usage to be at the higher end of our previous cash burn assumption of $25 million to $30 million, primarily due to the impact of lower revenue.
Speaker Change: We continue to believe that our research used only business will be cash flow breakeven at revenue levels between 170 and $119 million.
Vandana Sriram: We continue to believe that our research-use-only business will be cash-flow break-even at revenue levels between $170 and $190 million. I was now turning back over to Masoud for his final thoughts before opening the cause of this. I want to thank you.
Speaker Change: I will now turn it back over to Michel for his final thoughts before opening the call for questions.
Masoud Toloue: I want to thank our team for their hard work in another great quarter. Your efforts are making a real difference, moving the shift from sick care to healthcare.
Michel: I want to thank our team for their hard work and another great quarter Euro.
Speaker Change: Your efforts are making a real difference in moving the shift from sick care to health care.
Masoud Toloue: It's an exciting time to be at Quanterix. If you're a super talented individual and want to participate in redefining protein detection boundaries and translating those to early detection of disease, I suggest you give us a call. Our business is growing double digits, our investment in scale will see gross margins expand, and the company has lined up a site for positive cash flow. This, on a standalone basis, is an incredibly valuable asset in the growing field of protein tools.
Michel: It's an exciting time to be at <unk>.
Speaker Change: If youre, a super talented individual and want to participate and redefining protein detection boundaries.
Speaker Change: Translating dose to early detection of disease.
Speaker Change: I suggest you give us a call.
Speaker Change: Our business is growing double digits, our investment and scale, we will see gross margins expand and the company has line of sight to positive cash flow.
Speaker Change: This on a standalone basis is an incredibly valuable asset and a growing field of protein tools.
Masoud Toloue: That said, there are now two new FDA-approved and reimbursed therapies for Alzheimer's. As access to treatment is brought in, we will invest resources and work diligently to ensure access to testing is available. Now, we have some questions.
Speaker Change: That said there are now new to new FDA approved and reimbursed therapies for Alzheimer's.
Speaker Change: As access to treatment has brought and we will invest resources and work diligently to ensure access to testing is available.
Speaker Change: Let's take some questions.
Speaker Change: Thank you.
Operator: Thank you. The panelist will now conduct us to an answer session. As a reminder, to ask a question, you need to press star one-one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In the interest of time, please allow yourself one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question today comes from Matthew Sykes with Goldman Sachs. Your line is open.
Speaker Change: We will now can get.
Speaker Change: And answer session.
Speaker Change: A reminder to ask a question you 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.
Speaker Change: In the interest of time, please allow yourself one question and one follow up please.
Speaker Change: Please standby, while we compile the Q&A roster.
Jake Allen: Hello, thank you for taking my question. This is Jake Allen on for Matt Sykes. So, what I want to talk about is, given capital equipment weekdays over the past year, have you thought about any potential reagent rental or financing options for instruments in order to continue to drive pull-through, given the fact that instruments have remained soft?
Matthew <unk>: Our first question today comes from Matthew <unk> with Goldman Sachs. Your line is open.
Matthew <unk>: Hello. Thank you for taking my question. This is Jack Allen on for that site.
Jack Allen: So, let's say you want to talk about is given capital equipment weakness over the past year have you thought about any potential reagent rental or financing options for instruments in order to to continue to drive pull through given the fact that instruments have remained soft.
Speaker Change: Hey, Jake Yes, that's fortunately it's a.
Jake: Great option with the instrument and reagent platform that we have we're seeing.
Jake: Good pull through in our <unk> program.
Speaker Change: So it's a good offset for somebody who doesn't have capex today, they've been sending our samples to accelerator.
Speaker Change: There is probably.
Speaker Change: Sure a couple of cases, where we.
Speaker Change: We had reagent rental programs.
Speaker Change: Our customer had large consumable demand. So it's something that we absolutely have been able to offer.
Speaker Change: Great and then for my follow up now that the FDA has approved lease.
Speaker Change: Can you talk about your.
Speaker Change: The relationship with Lilly throughout their sort of 280, <unk> offering and any feedback you've gotten from Lilly in regards to using blood based biomarkers to drive therapeutic uptick.
Masoud Toloue: Yeah, so we're very excited about CIRTUIT-AD and the work that both Lily and Quanterix have done together over the collaboration period that's culminated in, you know, this test. So if you look at the test details that are presented at AEIC, you know, high sense, high spec, high accuracy test with a low indeterminate zone, and yeah, I mean, I think that both teams have a lot It was excellent work.
Speaker Change: Yes, so we're very excited about it.
Speaker Change: And the work that.
Speaker Change: Lilly and <unk> had done together.
Speaker Change: Over the collaboration period culminated in this test. So if you look at the test details presented at AIC.
Speaker Change: <unk> high spec high accuracy test.
Speaker Change: Hello, and determinant zone.
Speaker Change: Yes, I mean, I think that both teams have a lot to be proud of.
Unknown Attendee: In the sense of blood-based testing, these are tests to, you know, evaluate patients. There could be candidates for therapy, so it's a test that we're going to continue to support folks with and, hopefully, in the future, expand access. Thank you for taking my questions.
Speaker Change: Excellent work.
Speaker Change: And in the sense of.
Speaker Change: Blood based testing.
Speaker Change: These are tests to evaluate patients.
Speaker Change: That could be candidates for therapy. So that's.
Speaker Change: To touch that.
Speaker Change: We're going to continue to support.
Speaker Change: Folks with and hopefully in the future expand access.
Speaker Change: Thank you for taking my questions.
Speaker Change: Thank you.
Speaker Change: Our next question comes from <unk> <unk> from Scotiabank.
Sung Nam: Our next question comes from Sung Nam from Skosha Bank. Your line is up. Hi, thanks for taking the questions.
Speaker Change: Your line is open.
Speaker Change: Hi, Thanks for taking the question guys.
Masoud Toloue: and a couple on Alzheimer's Disease Testing. We'd love to hear the feedback he's gotten as AIC on the multi-marker approach. Testing, and when you launch this essay, do you expect this to be utilized predominantly over the standalone Tito 2017 essay?
Speaker Change: Couple on Alzheimers disease testing, we'd love to hear.
Speaker Change: <unk> gotten at AIC on the multi marker approach to testing and when you launch. This assay do you expect it to be utilized predominantly over the stand alone.
Speaker Change: <unk> <unk> hundred 17 assay.
Sung Nam: Yeah, I think that's the answer, yes. So, we think the future for blood-based testing is going to be a multi-marker test, and, you know, at AAC, Sung Ji, as you alluded, we showed for the first time that additional biomarkers, and we added additional biomarkers to our P2211 and used the two-step algorithm. We can reduce the intermediate zone of a two-cutoff test by threefold while we're able to keep the high accuracy of the test.
Speaker Change: Yes.
Speaker Change: Thats.
Speaker Change: Answer is yes.
Speaker Change: So we think the future for blood based testing is going to be a multi marker test and.
AIC Sangji: AIC Sangji as you alluded we showed for the first times that additional biomarkers.
Speaker Change: We added additional biomarkers to our <unk> 2017 and used the two step algorithm, we can reduce the.
AIC Sangji: Intermediate zone.
Speaker Change: About two cutoff test by threefold, while we're able to keep the high accuracy of the test. So what that does is it helps provide more certainty for a greater number of symptomatic patients and we were very pleased with the results. So there's probably some room for <unk>.
Sung Nam: So what that does is it helps provide more certainty for a greater number of symptomatic patients, and we were very pleased with the results. So there's probably some room for single-marker tests, and this multi-marker test is absolutely exciting. We've talked about launching this before the end of the year as a laboratory-developed test.
AIC Sangji: Single marker tests and.
Speaker Change: This multi marker test absolutely is exciting we've talked about launching this.
Speaker Change: Before the end of the year as a laboratory developed test.
Masoud Toloue: Great. And then this is a follow-up.
Speaker Change: Great and then just as a follow up it's great.
Speaker Change: Great to see you guys expanding on your collaborations with the large health care system.
Sung Nam: You know, it's great to see you guys expanding on your collaborations with the large health care system. Just kind of curious if, you know, the progress that you're making, you know, how quickly they could ramp up. And also curious, you know, if they're more likely to do the testing internally or, you know, are they planning on sending the samples directly to you? Just kind of if you could provide any color, just from the ramp-up standpoint. Thanks.
Speaker Change: Just kind of curious.
Speaker Change: The progress that Youre, making.
Speaker Change: Quickly could they ramp up and also curious.
Speaker Change:
Speaker Change: There.
Speaker Change: More likely to do the testing internally or are they planning on attending the samples directly to you just kind of if you could provide any color.
Speaker Change: The ramp up standpoint thanks.
Masoud Toloue: Yeah, just taking a quick look at some of the ones that we've listed this time around. I would say that all of them have the ability to use our platform and have the ability to perform testing themselves. That said, you know, there will be some partners that, you know, if their order intake flow sort of exceeds capacity, they're always able to send things to us in Boston. So I think, in this case, there are a lot of partners here that are performing themselves, but we have, you know, the option of sending things to our lab, and I think that's what makes, you know, the Quanterix SEMO offering unique. Great, thank you
Speaker Change: Yes, just taking a quick look at.
Speaker Change: Some of the ones that we've looked at this time around I would say that all of them have the ability to have our platform and have the ability.
Speaker Change: To perform testing themselves.
Speaker Change: There will be some partners that.
Speaker Change: If there.
Speaker Change: Order intake flow sort of exceeds capacity they are always able to send things to us.
Speaker Change: In Boston So.
Speaker Change: I think in this case there is a lot of.
Speaker Change: Partners here that are performing themselves, but we have the option of test send out to our lab and I think that's what makes the <unk> <unk> offering unique.
Unknown Attendee: Great! Thank you so much.
Speaker Change: Great. Thank you so much.
Speaker Change: Thank you.
Dan Brennan: Our next question comes from Dan Brennan with TD Cowen. Your line is open.
Speaker Change: Our next question comes from Dan Brennan with TD Cowen Your line is open.
Dan Brennan: Hi, This is calling for Dan just another housekeeping one on the Multimarket test so given the improved performance clearly you're launching the ODT later this year, but should we expect you to prioritize your FDA submission so that test or do we need to see more studies first.
Masoud Toloue: Yeah, that's a good question. You know, we've submitted a single marker test that we talked about, and we received breakthrough designation for that single marker. As you know, and we talked about it kind of in earlier calls, we've completed our clinical trials, BioHermes One and Kentate. So phase one of those is complete, and we're in phase two and phase three, where we're collecting data, both on the single marker and the multi-marker.
Dan Brennan: Yes.
Speaker Change: A good question, we have submitted a single marker test.
Speaker Change: We talked about we received breakthrough designation for that single marker.
Dan Brennan: As you know and we've talked about kind of an earlier calls we've completed.
Dan Brennan: Our clinical trials by Hermes one in Kentucky. So phase one of those are complete we are in phase II and phase III, where we're collecting data both on the single marker and the multi marker. So I would say the effort and the work.
Masoud Toloue: So I would say the effort and the work that we're putting in should provide data for both. And, you know, we're going to determine what might be the most ideal for the single, you know, for the IBD application that we have with the FDA.
Dan Brennan: We are putting in should provide data for both.
Dan Brennan: We're going to determine.
Dan Brennan: What might be most ideal for the.
Dan Brennan: The IBD application that we have with the FDA.
Unknown Attendee: Thanks, and then just just one follow-up on Samoa. So, you know, it was kind of announced in your quarter that two large players had signed up for partnerships with a different competitor, where sensitivity was inferior. So could you speak to the fact that, other than sensitivity, what large labs are going to be considering when choosing a platform partner and maybe how your strategy will kind of differ going forward, if at all? Thanks. Yeah, so, you know, very clearly there are the top three.
Speaker Change: Thanks, and then just just one follow up on the on similar so it was kind of announced and <unk> to that two large players have signed up a policy.
Dan Brennan: With a different competitor.
Dan Brennan: Timothy was inferior so could you speak to the fact that other than sensitivity that large jobs are going to be considering when choosing a platform partner and maybe how your strategy will differ going forward if at all thanks.
Masoud Toloue: Yeah, so, you know, very clearly, the top three clinical grade pre-Tau 217 immune assays are built on Samoa, and that's because it's the one platform that has the ability to quantify levels at the earliest stages of disease. So, you know, while there are PTL-27 tests out there that can't achieve high accuracy, the important thing to remember is that the best clinical utility is when all patients can receive a result.
Speaker Change: Yes so.
Dan Brennan: Clearly there.
Speaker Change: Three clinical grade <unk> hundred 17, <unk> assays have been built on Samoa.
Dan Brennan: And.
Speaker Change: That's because it's the one platform that has the ability to quantify levels at the earliest stages of disease. So while there are <unk> seven tests out there that can achieve high accuracy. The important thing to remember is that the best clinical utility.
Dan Brennan: All patients can receive a result.
Dan Brennan: Very much.
Dan Brennan: Thank you.
Operator: Our next question comes from Kyle Mikson, from Canacord Genuity. I think you'll like this open.
Dan Brennan: Our next question comes from Kyle <unk> from Canaccord Genuity. Your line is open.
Kyle Mikson: Hi guys, this is Alex. Someone's a Kyle. So, just to start, I was curious, since the FDA approval of Nenema in July, I think that's any interest in your diagnostics portfolio, and moreover, do you believe that we're getting closer to an inflection point, and that's to 80 drugs, or could it really take a bit longer to..., get thrashing drugs from a market like it Thanks.
Dan Brennan: Hi, guys. This is Alex on line for Kyle.
Alex: Just to start I was curious since the FDA approval of <unk> in July.
Speaker Change: Have you noticed any uptick in interest in the <unk> portfolio and Moreover, do you believe that we're getting closer to an inflection point in regards to 80 drugs, because it really realistically take a bit longer too.
Speaker Change: Sure.
Speaker Change: To get sufficient plasma market that could in turn kind of helps scale off the diagnostics effort. Thanks.
Masoud Toloue: Yes, so the drug ramp for patients has probably been slower than most anticipated, but now that there are two FDA-approved therapies, we expect that ramp to improve from where it was. And, you know, as more and more people are looking to the therapy, then you're going to see, you know, obviously, testing improve. And there, I think, whether, you know, it's been prior calls and prior discussions, that blood-based testing is going to be the real key infrastructure for folks that have memory concerns and want, you know, the first line test.
Alex: Yes.
Speaker Change: Drug ramp for patients as probably been slower than most anticipated, but now that there are two FDA approved therapies, we expect that ramp to improve from where it has been and as more and more people are looking to the therapy, then youre going to see obviously.
Alex: Testing improve and they're I think.
Alex: Whether it's been prior calls and prior discussions.
Alex: Blood based testing that's going to be the real key infrastructure.
Alex: For folks that have memory concerns and want their first line test clearly there is just not infra.
Alex: Infrastructure for Pat and.
Alex: And basically of CSF based test. So we think that the first approach is going to be blood and the tests are good enough that it can be a confirmatory so over overall I think that.
Speaker Change: Thanks for take up.
Alex: More than 2025.
Alex: We're going to be building the infrastructure to be ready for that.
Unknown Attendee: Thank you. Just one more question. I was wondering if you could just comment on the percentage or perhaps just a higher level commentary on the number of customers that have been converted to the new assays. And perhaps any feedback that you've gotten from these existing customers could also be helpful.
Speaker Change: Got it thank you and just one more and I was wondering if you could just comment on the percentage or perhaps just.
Alex: A high level commentary on.
Speaker Change: The number of customers that have been converted to the new assays and perhaps any feedback.
Alex: But you've gone from these existing customers will also be helpful. Thanks.
Masoud Toloue: Yes, so we're still in the process of converting our customers to the new Advantage Plus assays and also releasing new assays that fill our menu. So both of those activities are going on concurrently. That process is ongoing. As of Q1, we had converted slightly less than 5% of our customers to the new assays. As of Q2, that number is now closer to 10%. So good progress, but a little bit slow, and as we had anticipated, a lot of these assay conversions require customers to complete bridging studies, to complete the number of the assets that they have on shelves, getting through those first, etc. So, not unexpected, but we do think that this is going to be a transition process that takes us through the remainder of the year, at least.
Speaker Change: Yes, so we're still in the process of converting our customers to the new advantaged assets and also releasing new assays that feed our menu. So both of those activities are going concurrently.
Unknown Attendee: Got it, thank you very much. Thank you. As Reminders,
Speaker Change: Process is ongoing as of Q1, we had converted slightly less than 5% of our customers to the new assets.
Speaker Change: As of Q2 that number is now closer to 10% so good progress, but a little bit slow and as we had anticipated a lot of these assay conversions require customers to complete bridging studies to complete the number of.
Speaker Change: The assets that they have on shelf getting through those flows et cetera, so not unexpected, but we do think that this is going to be a transition process that takes us through the remainder of the year at least.
Speaker Change: Got it thank you very much.
Speaker Change: Thank you Andrew.
Operator: As a reminder, to ask a question, you need to press star 11 on your phone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the rough, and as we are showing no further questions at this time, this does conclude our question and answer session, and it does conclude the program. Thank you for your participation today in today's conference. Have a good evening. You may now be connected.
Speaker Change: A reminder to ask a question you need to press star one on your phone and.
Speaker Change: And wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star one again.
Speaker Change: Please standby, while we compile the roster.
Jake Allen: Great, and then for my follow-up, now that the FDA has approved Lilly's Kismla, can you talk about your relationship with Lily throughout there, or to an AD, LDT offering, and any feedback you've gotten from Lilly in regards to using blood-based biomarkers to drive therapeutic uptick.
Speaker Change: And as we are showing no further questions at this time.
Speaker Change: This concludes our question and answer session and it does conclude the program. Thank.
Speaker Change: Thank you for your participation today in today's conference.
Speaker Change: Good evening you.
Speaker Change: You may now disconnect.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Masoud Toloue: Yeah, that's, you know, fortunately, it's a great option with the instrument and reagent platform that we have. We're seeing, you know, good pull through in our accelerator program. So it's a good offset for somebody who doesn't have capital expenditure today. They've been sending our samples to an accelerator. That's because there were probably, you know, a couple cases where we had reagent rental programs where our customers had large consumable demand. So it's something that we absolutely have been able to offer.
Unknown Attendee: Hi, all this is Tom for Dan, just another housekeeping question on the multi-market test. So, you know, given the improved performance, clearly you're launching the LDT late this year, but, you know, should we expect you to prioritize your FDA submission for that test, or do we need to see more studies first?
Masoud Toloue: And clearly, there's just not the infrastructure for Pat and invasive CSF-based tests. So we think that the first approach is going to be blood, and the tests are, you know, good enough that they can be a confirmatory. So overall, I think that things should take up more in 2025, and we're going to be building the infrastructure to be ready for that.