Earnings call transcript: Cytek Biosciences Q2 2025 misses revenue forecast

Cytek Biosciences reported its Q2 2025 earnings, revealing a mixed performance with earnings per share (EPS) meeting expectations at -$0.04, while revenue fell short at $45.6 million, compared to the forecasted $46.03 million. The stock showed a slight increase of 0.26% in aftermarket trading, reflecting a neutral market reaction to the earnings report. According to InvestingPro data, the company maintains a "GOOD" overall financial health score of 2.89, with particularly strong performance in cash flow management.

Key Takeaways

• EPS matched expectations at -$0.04, but revenue missed forecasts by 0.93%.
• Service revenue grew by 18%, while product revenue declined by 9%.
• The company improved its net loss from $10.4 million to $5.6 million year-over-year.
• Cytek maintains a strong cash position with $262 million.
• Stock price remained relatively stable post-earnings, with a 0.26% increase.

Company Performance

Cytek Biosciences reported a revenue decrease of 2.2% compared to the same quarter last year. Despite challenges in the flow cytometry market and reduced capital expenditures, the company managed to improve its net loss significantly. The U.S. market showed positive growth, while other regions faced declines.

Financial Highlights

• Revenue: $45.6 million, a 2.2% decrease from the previous year.
• Earnings per share: -$0.04, matching the forecast.
• Net loss: $5.6 million, improved from $10.4 million last year.
• Cash and marketable securities: $262 million.

Earnings vs. Forecast

Cytek Biosciences met the EPS forecast of -$0.04 but missed the revenue forecast of $46.03 million by 0.93%. This minor miss in revenue contrasts with the company’s improvements in other financial areas, such as net loss reduction.

Market Reaction

The stock price of Cytek Biosciences increased slightly by 0.26% in aftermarket trading, suggesting a neutral reaction from investors. Trading at $3.89, the stock remains closer to its 52-week low of $2.37, reflecting ongoing market pressures. Based on InvestingPro analysis, the stock appears slightly undervalued, with analysts setting price targets ranging from $4 to $8.

Outlook & Guidance

The company provided a full-year 2025 revenue guidance of $196-205 million, expecting a recovery in instrument sales in the second half. Cytek plans to continue investing in organic growth and remains open to strategic mergers and acquisitions in adjacent markets. With a beta of 1.34, investors should note the stock’s higher volatility compared to the market. Get deeper insights into Cytek’s growth potential and comprehensive analysis through the detailed Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

"Our core business is showing positive growth, and our recurring revenue continues to increase," stated Bill McComb, CFO. CEO Wenbin Zhang added, "We expect the interim market to recover over time, and we are poised to emerge in an even stronger position."

Risks and Challenges

• Continued reduction in the flow cytometry market.
• Decreased capital expenditures in academic and government sectors.
• Revenue decline in pharma and biotech sectors.
• Regional performance challenges, particularly in EMEA and APAC.
• Potential impacts of interest rates and NIH funding changes.

Q&A

During the earnings call, analysts inquired about market share gains, gross margin expectations, and the potential impact of interest rates and NIH funding on future performance. Executives addressed these concerns, highlighting the company’s strengths across pharma customer segments.

Full transcript - Cytek Biosciences Inc (CTKB) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Cytec Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. I would now like to turn the conference over to Paul Kudson, Investor Relations.

You may begin.

Paul Kudson, Investor Relations, Cytec Biosciences: Thank you, operator. Earlier today, Cytec Biosciences released financial results for the second quarter ended 06/30/2025. If you haven’t received this news release, or if you’d like to be added to the company’s distribution list, please send an email to investorscytechbio dot com. A copy of the news release is also available on the Investor Relations section of Cytech’s website at investors.cytecbio.com. Joining me today from Cytec are Wenbin Zhang, CEO and Bill McComb, CFO.

Please note that we will be referencing a slide presentation during the call today that has been posted to the Investors section of our corporate website. As a reminder, we will make statements during this call that are forward looking statements within the meaning of the federal securities laws, including statements regarding SciTech’s business plans, strategies, opportunities, and financial projections. These statements are based on the company’s current expectations and inherently involve significant risks and uncertainties that could cause actual results or events to materially differ from those anticipated in these statements. Additional information regarding these risks and uncertainties appears in our slide presentation in the section entitled Forward Looking Statements in the press release SITEC issued today and in SITEC’s filings with the SEC. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles.

Additional information regarding our use of non GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, may be found in our slide presentation and in today’s press release. While the company believes these non GAAP financial measures provide useful information for investors, The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Except as required by law, SciTech disclaims any duty to update any forward looking statements, whether because of new information, future events, or changes in its expectations. This conference call contains time sensitive information and is accurate only as of the live broadcast, 08/06/2025. As I have mentioned on prior conference calls, Cytec sponsors user group meetings and participates in a variety of industry events that may be of interest to investors.

Coming up soon are two Cytec sponsored user group meetings, the first in Mainz, Germany on September 16, then in Chicago on September 18. Upcoming industry conferences include the European Society for Clinical Cell Analysis, or ESCCA, which will take place in Montpelier, France from September, and the Annual Meeting of the International Clinical Psychology Society, or ICCS, in Philadelphia from September. As always, these events are primarily geared to the scientific community, but they may offer an opportunity to investors and analysts to interact with users of our technologies and to learn why SciTech’s instruments are so highly valued by our customers. We have a limited number of spaces to accommodate members of the financial community. So if you’re interested in attending any of these events, please contact me.

With that, I will turn the call over to Wenbin.

Wenbin Zhang, CEO, Cytec Biosciences: Thanks, Paul. Welcome, everyone, and thank you for your interest in SciTech. On today’s call, I would like to start with a discussion of our performance in the second quarter and first half twenty twenty five, followed by an update on our full year 2025 outlook. Next, I will give you some highlights on our progress during the second quarter on our strategic priorities for 2025 before turning the call over to Bill for a more detailed look at our financials and our outlook. Turning to Slide three.

Our second quarter revenue in 2025 was $45,600,000 down $1,000,000 or 2.2% compared to the 2024. The decrease in revenue was due to lower product revenue in EMEA and APAC, partially offset by strong growth in service revenue worldwide, which grew 18%, percent, and growth in U. S. Product revenue. This was an improvement over the first quarter of this year, with a smaller decline versus the prior year’s second quarter.

Turning to slide four. Recurring revenue growth continued in the second quarter. Specifically, service and region revenue each increased by 18% versus the 2024. Both our reagent and service businesses benefited from our established and expanding installed instrument base. In the second quarter, we continued to see these businesses contribute significant growth to our recurring revenue as a percentage of our total revenue.

Our recurring revenue businesses reached 32% of trailing twelve month sales in the second quarter, growing 16% versus last year. Turning to slide five, notably we saw 3% growth in FSP unit volume in the second quarter led by AURORA analyzers. We saw particular strength in The US with 10% year over year growth. We believe the growth in our FFP instrument unit volumes, especially in a difficult environment, speaks strongly to the overall strength of our core business and the fact that our FFP products are essential instruments to our customers’ workflows as distinguished from more discretionary instruments. Turning to slide six.

Looking more closely at the second quarter, total US revenue was up 7% over the 2024, driven by service and reagents. Instruments were flat in The US due to growth in revenue from our pharma, biotech and CRO customers being offset by continued softness among our academic and government customers. Still, instrument sales showed growth sequentially from the 2025. We continued to see broad based pressures in instrument orders from academic and government customers in The US, driven by a continuation from the first quarter of the uncertainties in academic funding resulting from US policy change. Turning to EMEA, we saw a different situation where overall revenue declined 11%, driven by weakness in instrument sales to our pharma, biotech, and CRO customers, offset by year over year growth among our academic and government customers and in service and regions.

In APAC, sales declined following a very strong performance in Q1 due primarily to the longer sales cycle we typically encounter in this region as compared to The US and EMEA. However, on a longer term basis, this region continues to demonstrate solid growth. In our rest of world region, which includes Canada and Latin America, we delivered single digit percentage revenue growth versus last year’s second quarter. Let me take a moment now to provide a view of our results for the 2025, which we believe smooth out some of the geographic and end user availability inherent in our industry and provides a clearer picture of our business overall. For the 2025, our total revenue was down 5% compared to last year’s first half.

This was comprised of weakness in EMEA, which was down 17% and in The US, which was down 3%. These declines were partially offset by steady growth across APAC, which grew 9% year over year, and rest of the world, which grew 14% this the prior year’s first half. Overall, our results were supported by strength in service and reagents. Looking at our first half revenue by customers worldwide, our academic and government revenue globally is flat compared to last year, with our pharma and biotech revenue down about 9%, largely due to weakness in EMEA. Importantly, our results in both the quarter and for the first half remind us that simplification in multiple geographic regions can combine with a growing recurring revenue stream to smooth our otherwise much more valuable results.

We believe the policy issues affecting our various markets in the first and second quarters will continue to exert constraints on capital equipment spending through at least the current third quarter. With the first half of the year behind us, we are now in a better position to provide guidance on full year results. As such, we are narrowing our guidance range and now anticipate full year 2025 revenue to be $196,000,000 to $2.00 $5,000,000 Bill will provide more details on this outlook shortly. From an overall perspective, the key takeaways regarding the quarter are the fact that our core business, based on our FSP technology, continued to grow in unit volume and in revenue, and our recurring revenue businesses, including reagents and services, grew in high teens percentages. We think this is a notable performance despite a challenging capital equipment spending environment.

I would now like to update you on the progress our team has made across our core strategic pillars: instruments, applications, bioinformatics and clinical, to further solidify SciTech’s position as a market leader in next gen cell analysis solutions. Starting with our core instruments on slide seven. In the second quarter, we expanded our global footprint by 146 instruments, bringing SITE’s total installed base to 3,295 units. Within our instrument portfolio, our AURORA analyzer was the strongest driver of unit growth in the second quarter. This continued core instrument growth clearly demonstrates steady expansion across a diverse customer base worldwide.

To solidify our leadership position in the spectral flow cytometry market, we continue to prioritize innovation and delivering differentiated offerings to shape the future of the cell analysis market. In the second quarter, we announced the launch of the Cytec Aurora EVO system, setting a new standard for full spectral flow cytometry and notably improving on our flagship Cytec Aurora cell analyzer that we introduced eight years ago. The AURORA EVO system has been designed to address the evolving needs of researchers and accelerate broader adoption with enhanced capabilities, including faster sample throughput, automated instrument startup and shutdown, small particle detection and data harmonization. We believe these enhanced features provide value through higher productivity and empower researchers to accelerate their discovery work and tackle a wider range of applications with confidence. Moving to bioinformatics on slide eight.

The SITE Cloud continues to serve a critical role for researchers. Our software tools empower customers to streamline their experiment workflow, which drive adoption and the utilization of our cell analysis solutions and the growth in our division and service businesses. As of 06/30/2025, we have over 20,500 Cytec cloud users, representing a remarkable growth of 27% since the beginning of 2025. This represents an average of more than seven users per installed SiTech FFP instrument and reflects the loyalty our users have to our product portfolio and the halo effect of the SiTech cloud driving the utilization of our technology platform. As a reminder, our SciTech Cloud is transforming how researchers design and conduct complex flow cytometry experiments.

At its core is our proprietary AI human panel builder, which saves weeks or months of time by automating critical steps like fluorochrome selection and the marker matching. Scientists can then conduct a virtual experiment before committing to real wet lab studies, reducing trial and error and improving data quality from the start. By simplifying a previously complex process, we believe that Citicloud will drive broader adoption of our technology and the recurring revenue opportunities across our growing installed base. Turning to our next growth pillar applications. Our intention is for the SIC Cloud to accelerate the utilization of our reagents, which are optimized for use on our instruments.

We therefore believe our reagent business has attractive long term growth potential, of which we are still at the early stage. We remain focused on driving our reagent product introduction engine, which will expand our region offerings and application specific kits. We continue to make significant improvements in our region operations, resulting in improved execution and dramatically shorter delivery time over the past year. These enhancements have strengthened customer support and have been a key driver of the strong double digit Religion sales growth we are seeing in The US and China. Importantly, we see significant room for reagent growth, both from our installed base as well as from the new instruments we sell.

We estimate that our currently installed instrument base consumes at least $150,000,000 worth of reagents annually. With our current reagent revenue capturing less than 10% of this potential, we have substantial room for reagent growth over the longer term. Over time, we expect our recurring reagent and service revenue to be key drivers of strong sustained growth. With that, I will now turn the call over to Bill for more details about our financials.

Bill McComb, CFO, Cytec Biosciences: Thanks, Wenbin. Turning to Slide nine and our second quarter financial results, Total revenue for Q2 was $45,600,000 a 2% decrease versus 2024. This reflects continued weakness in instrument revenue in EMEA and APAC, offset by strong growth in service and growth in US product revenue. Product revenue, which is comprised of instruments and reagents, decreased 9% versus 2024, driven by a significant decline in EMEA. US product revenue increased 2% versus 2024.

This was attributable to an increase in revenue from pharma and biotech customers, offset by weakness from academic and government customers. In EMEA, the decline in product revenue was driven by a significant decline in revenue from pharma and biotech customers, offset by an increase in revenue from academic and government customers. Asia Pac was weaker versus 2024 after strong growth in Q1 and showed solid growth for the 2025 versus the prior year. While our reagent revenue remains a single digit percentage of our total revenue, it achieved its highest ever quarterly revenues in Q2, representing 18% growth over the prior year quarter. As Wenbin mentioned, this was largely due to a concerted effort by our reagents team to shorten delivery times and improve other performance metrics.

Service revenue continued to deliver strong growth with 18% in Q2 versus prior year and 21% for the first half. This was driven by growth in the installed base and active usage of our systems. Turning to geographic market performance, U. Revenue grew 7% in Q2 versus prior year, driven by service and reagent revenue growth. EMEA declined 11% due to lower instrument revenues, partly offset by growth in services and reagents.

APAC declined 12% in Q2 after a very strong Q1 and increased 9% for the first half versus prior year, driven by growth in both instruments and service revenue. GAAP gross profit was $23,900,000 a 6% decline versus 2024. GAAP gross profit margin was 52% versus 55% in the prior year quarter due to lower product gross margin as a result of lower product revenues and lower service gross margin due to an increase in material costs, a portion of which was of a one time nature. Overall gross margin improved from 49% in Q1 due to higher product gross margins on higher product revenues and lower manufacturing overhead. Adjusted gross profit margin, which excludes stock based compensation and amortization of acquisition related intangibles, was 56% in Q2, down from 58% in the prior year quarter and up from 52% in Q1.

Operating expenses were $34,500,000 in Q2, up 500,000 or 2% versus Q2 twenty twenty four, driven by higher general and administrative expenses. Research and development expenses were 8,800,000.0, down 12% versus the year ago quarter due to lower headcount and engineering and outside services expenses. Sales and marketing expenses were 12,100,000.0, down 1% versus the year ago quarter. General and administrative expenses were $13,500,000 up $1,800,000 or 16% from the year ago quarter. The increase was attributable to higher outside services expenses.

Loss from operations was 10,600,000 for Q2 versus $8,500,000 in the year ago quarter, driven primarily by lower GAAP gross profit and, to a lesser extent, higher operating expenses. Net loss was $5,600,000 in Q2 versus $10,400,000 in the prior year quarter. This was driven by two factors. First, net other income increased to 3,800,000.0 versus 1,300,000.0 in the prior year quarter. This was primarily driven by 1,600,000.0 of foreign exchange gains losses in the prior year quarter, and was offset by lower interest income of 900,000.0.

Second, we had a tax benefit of 1,200,000.0 in the current quarter as a result of a higher effective tax rate versus a tax expense of $3,200,000 in the prior year quarter. Adjusted EBITDA, which excludes stock based compensation and foreign exchange impacts, declined to $1,300,000 from $2,900,000 in the year ago quarter due to lower gross profit. Positive free cash flow of $900,000 was offset by 4,500,000.0 repurchase in the quarter, decreasing our total cash and marketable securities by $3,600,000 to $262,000,000 In the second quarter, we repurchased 4,500,000.0 of stock or 1,200,000.0 shares. In the 2025, we repurchased 15,100,000.0 of SciTech’s stock or 3,300,000.0 shares, reducing our total shares outstanding to 127,200,000.0 shares as of June 30. Lastly, turning to our full year guidance on slide 10.

As Wenbin mentioned earlier, we are narrowing our full year 2025 revenue outlook. Given our first half results and the conditions prevailing in our markets, we do not believe the high end of our existing revenue guidance range for 2025 is reasonably attainable. Accordingly, we are now guiding to a range of $196,000,000 to $2.00 $5,000,000 representing overall growth of minus 2% to plus 2% over full year 2024, assuming no change from current currency exchange rates. In summary, our market leadership position remains strong. Our core business is showing positive growth, and our recurring revenue continues to increase.

We believe we will perform well relative to the overall flow cytometry market. Our strong balance sheet also gives us the ability to continue investing for growth. With that, I will turn it back over to Wenbin.

Wenbin Zhang, CEO, Cytec Biosciences: Thanks, Bill. Turning to slide 11. Before closing, I want to thank our SaiTech team for their continued commitment to delivering our industry leading tools, reagents, and software to empower the scientific community to advance the next generation of cell analysis. I believe the progress we have achieved and the continued momentum we are building is notable while navigating a macro environment that remains challenging. Our strategy to expand our installed base globally is expected to produce growth in instrument revenue, while simultaneously driving long term sustainable recurring revenue growth in our service and reagent businesses.

We further continue to strengthen our market leadership through innovation that redefines industry standards, accelerates adoption and creates new markets. We expect the interim market to recover over time, and we are poised to emerge in an even stronger position than we are today with a focus on these longer term growth drivers for our business. I want to thank everyone for joining today’s call, and we will now open it up for questions. Operator?

Conference Operator: Thank you. We will begin the question and answer session. Our first question comes from David Westerberg from Piper Sandler. Please go ahead.

David Westerberg, Analyst, Piper Sandler: Hi. Thank you for taking the question. So just I wanted to start with your performance versus the market and just be sure that there are not maybe competitive things going on. So if you can just maybe give some color on your estimate of how the Flow Cytometry market is performing right now and if there have been any product launches that have been of any kind of concern.

Wenbin Zhang, CEO, Cytec Biosciences: We believe, overall, based on the market report, we have seen the overall flow cytometry market seems reducing and going down, partially due to the funding reduction or challenge in our industry, especially for the capital expenditure. But within that domain, we continue to grow our core business. As you can see, our the number of SP instrument and actually the unit volume is going up.

Bill McComb, CFO, Cytec Biosciences: So that would imply that we’re taking share.

David Westerberg, Analyst, Piper Sandler: Okay. And then Bill, maybe if I can ask you one. I know it’s hard to I know in CapEx cycles, I think it’s the third month of every quarter where you normally see kind of sales. But I just want to based on funnel and any other kind of experience, how comfortable are you with the second half guidance in terms of and how much does it need the market to say improve or is this kind of steady state guidance? And again, I realize that CapEx happens in the third quarter of every quarter, third month of every quarter.

I know this is tough.

Bill McComb, CFO, Cytec Biosciences: Well, our business really divides into two parts. We have the recurring revenue businesses, our service business and our reagent business. And those have been growing high double digits. And the drivers of that growth appear to be solid. And so we would we expect that to continue.

We don’t see any reason why that growth rate should change significantly. And then we have the instrument business, which is capital spending driven. And that is obviously back end weighted, it’s heavily weighted to the third month of the quarter. We are expecting a quarterly pattern that follows that’s similar to the quarterly patterns of last year. So that would imply stronger performance in the second half of the year versus the first.

And I also would point out that our gap to last year got significantly smaller in Q2 than it was in Q1. So we factored all those things together together with the market outlook and encapsulated all that and came up with our range based on those factors and

Conference Operator: that Yeah. Change of

David Westerberg, Analyst, Piper Sandler: Thanks so much. That was great. So just maybe the last one would have been in terms of your last commentary on in a better position post capital cycle. I know the crystal ball here is really hard, but like do you think we could be with lower interest rates and maybe NIH certainty the CapEx cycle might return next year or is it do you think a little bit longer than that? Finally, just on your commentary in a better position post cycle, I mean, do you think are going to be the big drivers SITEQ’s performance post CapEx cycle?

Conference Operator: Thank you. And I’ll hop off queue after that.

Wenbin Zhang, CEO, Cytec Biosciences: As you can see, we’ll continue to invest on developing new technologies to improve the performance and to continue to launch new products. Evidently by the two new products, we do simply launch the one is our EVO, SITEK, Aurora EVO, the other one is MicroMuse, one for high end of the market applications, the other one really for the entry level applications to serve for the customers across all the application space. So we feel and we have a product, we have the technology and we have the performance to serve for this market. And when the capital expenditure challenge start to ease, we feel and we are there to serve for the customers.

David Westerberg, Analyst, Piper Sandler: Thank you, guys.

Bill McComb, CFO, Cytec Biosciences: Yeah. As it relates to the macro factors that you referenced, interest rates and NIH funding certainty, We certainly saw growth rates come down as interest rates went up. But we have a real crystal ball on to how that would affect capital spending trends. One would expect that it would probably be positive, but I think in the pharma biotech pharma industry, it’s more industry specific than interest rate driven. And with respect to the NIH, the more, the clearer the funding there, obviously the better for us.

Our US academic and government sector has been weaker this year as we discussed and more clarity on the NIH funding would help there. Look, we know what we read in the newspapers as it were about on those topics and we have any special insight.

Conference Operator: Our next question comes from Chad Wiltrowski from TD Cowen. Please go ahead.

Chad Wiltrowski, Analyst, TD Cowen: Hey guys, how’s it going? It’s Chad on for Brendan Smith. You spoke to using sort of the benefit of having a big balance sheet to reinvigorate growth a little bit. Obviously, nice to see a new product, but are you open to M and A at this point? If so, are there any clear sort of white space or adjacencies you’d be open to looking at or even some non core technologies maybe to expose yourself to some higher end growth markets?

Bill McComb, CFO, Cytec Biosciences: Yeah. So short answer is yes, we are open to M and A. We continue to evaluate opportunities. We would look for opportunities that have the greatest synergy potential. So by definition that means opportunities either in our existing markets or in adjacencies, perhaps other products we can sell to the same customers.

So I think that’s where we would primarily look for opportunities.

Wenbin Zhang, CEO, Cytec Biosciences: Yes. Actually, in addition to the MA, we are also investing on organic growth. And as you can see, our reagents, our service are growing double digit, and we continue to invest in those fields to enable us to continue to grow within our space, our sector.

Bill McComb, CFO, Cytec Biosciences: Thanks for the question, guys.

Conference Operator: Our next question comes from Andrew Cooper from Raymond James. Please go ahead.

Noah, Analyst, Raymond James: Hey, everyone. Thanks for taking the question. This is Noah on for Andrew. So my first question is sort of focused on gross margins. I think you guys came in maybe a little bit shy of the numbers and I heard you kind of talk about the some of the one time off.

So should we expect any change to cadence for gross margins for the rest of the year as like those one timers go away? And just trying to get a feel for that. And then also tariff headwinds were like 1% to 3% is what you called out last quarter. Any update there? Were those better within range?

So what are you seeing there as well?

Bill McComb, CFO, Cytec Biosciences: Sure. So in terms of cadence, as we there are two things that affect gross margin quarter to quarter within a year. One is that our instrument revenues tend to be bigger in the third and fourth quarter than the first and second. So first quarter is our weakest, second and third are in the middle somewhere and fourth is usually our biggest quarter. So what that does is that as those instrument revenues increase, that increases our gross margin because we’re our fixed costs remain relatively the same and we drop through more variable margin to the gross margin line.

So typically, we would expect as instrument revenue goes up in the third and fourth quarter that we’ll see margin improvement. The other factor is one time as I mentioned last quarter, we had a significant overhead capitalization charge that I didn’t expect to continue and it did not. So that went away in the second quarter. We wouldn’t expect that to come back in the subsequent quarters. And this quarter, we had an inventory adjustment primarily related to service parts.

Some of that is non recurring and there may be, so we’ll get some gross margin benefit in the service business from that. I would also expect better utilization of overhead in the service business to as we go through the year. So I would expect improvement in both our product gross margin and our service gross margin.

Noah, Analyst, Raymond James: Okay, awesome. And then just kind of following up more on the top line. You called out biopharma strength in The U. S. I just kind of want to see where like what customer segment are

Conference Operator: you seeing that from?

Noah, Analyst, Raymond James: Is that the large pharma customers looking to harmonize? Are you seeing maybe some better funding with some of the emerging guys? I know you said that the environment is still challenged, but just really trying to get a feel for where there’s strength. And then also if you think that there might be a little bit better in the back half there, even if it’s offset by EMEA.

Bill McComb, CFO, Cytec Biosciences: I think the strength was really in the biopharma segment was across the board. Big pharma customers are a much larger portion the total pharma revenue. So we saw some strength there. We also saw some strength with the small bio players, albeit that’s a small portion of the total. So it was really across the board.

For the big pharma players, a significant advantage of our technology is the ability to harmonize it. And so that was an important driver, continues to be an important driver of our business with big pharma.

Noah, Analyst, Raymond James: Okay, great.

Bill McComb, CFO, Cytec Biosciences: I’ll hop back then we also introduced the EVO, which has some important new capabilities that are highly valued by big pharma, the throughput, the automation, small particle, so on.

Conference Operator: Awesome. Thank you so much. Our next question comes from Mason Carrigo from Stephens Inc. Please go ahead.

Harrison, Analyst, Stephens Inc: Hey. This is Harrison on for Mason. Thanks for taking the questions. I wanted to ask what contribution do you expect from AURORA EVO and the MUSE Micro in 2025? Are they margin accretive?

And how does that compare to the core Aurora and Northern Lights?

Bill McComb, CFO, Cytec Biosciences: Aurora Evo is by far the larger contributor to overall revenue. It has an ASP in hundreds of thousands. And we would expect that that’s going to drive a high end sales. So that will be, let’s just say supportive of our margins. The Muse Micro is a small system that sells for less than $100,000 So it doesn’t really have a big impact on margin either way.

It’s about a $40,000 product, something like that. Sorry, no. It’s less than $20,000 so it doesn’t have a big impact on margins. But the EVO, it’s a new product with advanced features and it will be very supportive of our margins.

Harrison, Analyst, Stephens Inc: Okay, got it. That’s helpful. Thank you. And then reagent service and ex US and EMEA capital sales have been growing over, you know, the excuse me, growing at over a 20% year over year pace. Does your current guide assume those segments continue that pace in the second half here this year?

Bill McComb, CFO, Cytec Biosciences: We’re not going to guide to specific product lines. I guess what I can what you should assume we’re taking into account is that the driver of our service growth is the driver is the installed base. The growth in the installed base with a one year lag. So if you look at the rate that our installed base grew twelve months ago that’ll give you that’s the best predictor that we have for the quarterly rate of growth of service revenue. And so we don’t have a reason to expect that that’s going to change significantly.

Obviously as the installed base gets bigger, that percentage increase with each year’s deliveries comes down a little bit but that’s a gradual process. And then on reagents, our growth there is a function of our existing relationships with a broad set of customers through our instrument sales, improved execution and our broader product range and we expect all those drivers are continuing and we expect them to continue, that growth to continue.

Harrison, Analyst, Stephens Inc: Got it. Thanks for the questions.

Bill McComb, CFO, Cytec Biosciences: So the short answer is the drivers are all in place. The drivers are long term drivers and they should continue to produce similar growth.

Conference Operator: There are no further questions at this time. And this concludes today’s conference call. Thank you for joining. You may now disconnect.

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