Earnings call transcript: MaxSight Q4 2024 sees revenue decline, stock drops

Published 11/03/2025, 22:32
 Earnings call transcript: MaxSight Q4 2024 sees revenue decline, stock drops

MaxSight (market cap: $366.23M) reported its Q4 2024 earnings, revealing a revenue of $8.7 million, a significant 45% decline from the same period last year. Despite beating earnings per share (EPS) expectations with an actual EPS of -0.1 against a forecast of -0.12, the company’s stock experienced a sharp decline in aftermarket trading, falling by 10.37% to $3.11. According to InvestingPro data, the stock’s RSI suggests oversold conditions, presenting a potential opportunity for value investors. Get access to 7 more exclusive ProTips and comprehensive analysis with an InvestingPro subscription.

Key Takeaways

  • Q4 2024 revenue declined by 45% year-over-year.
  • EPS beat expectations, reported at -0.1 versus a forecast of -0.12.
  • Stock fell by 10.37% in aftermarket trading.
  • Core revenue for 2024 increased by 9% from 2023.
  • MaxSight ended 2024 with $190.3 million in cash and no debt.

Company Performance

MaxSight’s performance in Q4 2024 was marked by a notable decline in total revenue, down 45% from Q4 2023, closing the year with $38.6 million, a 6% decrease from the previous year. Despite these declines, the company’s core revenue saw a 9% increase, reaching $32.5 million, driven by growth in its Processing Assembly (PA) revenue, which rose by 36%. The company maintains strong financial health with a current ratio of 9.81, indicating robust short-term liquidity. Discover detailed financial metrics and Fair Value analysis in MaxSight’s Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

  • Total revenue for 2024: $38.6 million (6% decline from 2023)
  • Q4 2024 revenue: $8.7 million (45% decline from Q4 2023)
  • Core revenue: $32.5 million (9% increase from 2023)
  • Processing Assembly revenue: $14.0 million (36% growth)
  • Cash and cash equivalents: $190.3 million, with no debt

Earnings vs. Forecast

MaxSight’s Q4 2024 EPS of -0.1 beat the forecast of -0.12, marking a positive surprise for investors. This result reflects a better-than-expected performance, although the overall financial results still show a decline compared to the previous year.

Market Reaction

Following the earnings release, MaxSight’s stock dropped by 10.37% in aftermarket trading, settling at $3.11. This decline comes despite the EPS beat, indicating investor concerns over the significant revenue drop and the broader market sentiment towards the biotechnology sector. The stock is currently trading near its 52-week low of $3.17, while analyst price targets range from $7 to $11, suggesting potential upside. InvestingPro subscribers can access comprehensive valuation metrics and expert analysis to make informed investment decisions.

Outlook & Guidance

Looking ahead, MaxSight projects an 8-15% growth in core revenue for 2025. The company expects its recent acquisition, SecurDx, to contribute at least $2 million in 2024. Additionally, SPL program-related revenue is anticipated to reach approximately $5 million in 2025. MaxSight aims to end 2025 with around $160 million in cash and investments.

Executive Commentary

CEO Maher Masood stated, "We are committed to being diligent and disciplined in our approach to make decisions that position MaxSight to become the premier comprehensive enabler of cell and gene therapies within the industry." He also highlighted the company’s conservative outlook, noting, "We are not counting on a recovery or the market changing significantly."

Risks and Challenges

  • Continued revenue decline could affect investor confidence.
  • Market volatility in the biotechnology sector may impact stock performance.
  • Integration of SecurDx and its financial contribution remain uncertain.
  • Competitive pressures from other cell and gene therapy developers.
  • Economic conditions could influence funding and investment in biotech.

Q&A

During the earnings call, analysts inquired about the integration and revenue potential of SecurDx, with executives confirming a conservative guidance approach that does not rely on a market recovery. Stability in the customer base and clinical programs was emphasized, alongside the potential for growth in the cell and gene therapy market.

Full transcript - MaxCyte Inc (MXCT) Q4 2024:

Conference Operator: Thank you for standing by, and welcome to MagSight’s Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer As a reminder, today’s program is being recorded. And now I’d like to introduce your host for today’s program, Eric Abtau, Investor Relations. Please go ahead.

Eric Abtau, Investor Relations, MaxSight: Good afternoon, everyone. Thank you for participating in today’s conference call. Joining me on the call from Maxite, we have Maher Masood, President and Chief Executive Officer and Doug Sworski, Chief Financial Officer. Earlier today, Maxite released financial results for the fourth quarter and full year ended 12/31/2024. A copy of the press release is available on the company’s website.

Before we begin, I need to read the following statement. Statements or comments made during this call may be forward looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward looking statements. Actual results may differ materially from those expressed or implied in any forward looking statements due to a variety of factors, which are discussed in detail in our SEC filings. Except as required by applicable law, the company has no obligation to publicly update any forward looking statements whether because of new information, future events or otherwise.

And with that, I will turn the call over to Maher.

Maher Masood, President and Chief Executive Officer, MaxSight: Thank you, Eric. Good afternoon, everyone, and thank you for joining MaxSight’s fourth quarter and full year twenty twenty four earnings call. Twenty twenty four has been a strong year for MaxSight, highlighted by our return to core revenue growth, strategic improvements to our team and operations and the support of Cas Chevy’s launch, the first approved non viral cell therapy with our premier electroporation platform. Throughout the year, our team has worked diligently to assess ways in which the company can continually improve. We evaluated and implemented new strategic initiatives and process improvements, which streamlined our organization by increasing capital and operational efficiency.

We invested prudently within organic areas of the company that we believe promise the best return and will contribute to long term growth, while reducing spend in redundant or non core areas. We also announced the acquisition of SecurDx early this year, which I am incredibly excited about and will touch upon in a moment.

: Overall, I

Maher Masood, President and Chief Executive Officer, MaxSight: believe that the thoughtful and strategic changes at MaxSight throughout 2024 enabled us to grow core revenue in a difficult environment and position us well for 2025. Now, I’ll start by discussing our recent acquisition of SecuredX. When we look at the evolving cell and gene therapy field, safety is becoming increasingly paramount to therapies, which is exactly where SecurDx fits. SecurDx is a services platform that provides a safety assessment of cell and gene therapy development early in the discovery process. With SecurDx now integrated to MaxSight, we can offer customers a comprehensive suite of assays that provide on and off target gene editing assessments that are applicable across a variety of viral and non viral gene editing modalities.

Our three assays screening, nomination and confirmation are each utilized at different stages in development for both ex vivo and in vivo therapies, beginning into discovery stage and through preclinical development and IND enabling studies. Not only does off target editing profiling of programs improve the safety profile of therapies, but it also decreases time to clinic, unexpected costs and potential delays, ultimately increasing likelihood of program success. We see significant opportunities with SecurDx in our portfolio as MaxSight can now support both ex vivo and NVivo cell and gene therapy developers. The acquisition has immediate cross selling opportunities with MaxSight now able to work with customers earlier in discovery and able to offer SecurDx services to MaxSight’s existing customers as well. We are already seeing the benefits of adding SecurDx to our product portfolio and have had great success integrating their team into MaxSight.

We believe this acquisition is an important step forward in positioning MaxSight to become a premier end to end cell and gene engineering platform with the ability to provide a range of offerings and services throughout the entirety of development. Turning to our results, MagSight reported $38,600,000 of total revenue for full year 2024, which included core business revenue of $32,500,000 at the high end of our pre announced range provided in January. We were pleased with our team’s commercial execution over the course of the year through a stable but challenging environment. We grew our instrument install base to seven sixty compared to an installed base of six eighty three at the end of twenty twenty three. Instrument revenue for the year was $7,100,000 which was impacted by a continuation of customer caution on capital expenditure.

Though the operating environment remains challenging for our customers, we saw stability through 2024 and have seen some areas of improvement including PA sales, which we reported very healthy revenue growth of 36% compared to 2023. As we head into 2025, we remain cautiously optimistic that the funding environment for our customers will improve in 2025. Overall, we continue to be impressed by the evolution of cell therapy towards new editing technologies and new indications and believe MagSight is extremely well positioned within the industry. Customers continue to see the value in MagSight’s offering, leading to an expansion of our SPL portfolio at a record rate in 2024 with six new SBLs signed throughout the year. As of the end of twenty twenty four, we had a total of 28 active SBL customers, which includes 18 active clinical programs and one commercial program.

Previously, we have discussed the total pre commercial milestone potential across our SPL agreements as being greater than $2,000,000,000 As this metric includes both existing SPL programs currently in clinical development and future SPL programs are encompassed in our SPL agreements, we thought it would be very helpful to provide a new metric on the potential value creation from the existing active SPL programs currently in clinical development under our SPL agreements. Of the 18 active clinical programs under our SPL agreements, the total pre commercial milestone potential is greater than $220,000,000 including about $10,000,000 of milestone revenue that has already been received. These 18 programs have cleared IND or equivalent and range from Phase one trials to programs entering pivotal trial this year. We see tremendous value potential for these programs over time. To further highlight the tremendous potential of our SBL portfolio, at the time of IPO in late twenty twenty one, we were enabling 12 active clinical programs.

And now with 18 active clinical programs, this represents a 50% growth in the number of active clinical programs we enable, while the overall market for non viral clinical programs has grown 25% during the same time period. We are continuing to strengthen our SPL portfolio. We recently signed our first SPL 2025, TG Therapeutics in February, who entered into an agreement with Precision Biosciences to acquire a license to AzureCell. Following the addition of PG, we now have 29 active SPL customers. PG Therapeutics is a commercial biopharmaceutical company focused on novel treatments for B cell diseases and is currently advancing towards a Phase one clinical trial for Azurcell and progressive forms of MS.

Our SL pipeline is very healthy as we enter 2025 and we believe we will continue to sign new SPLs at our historical rate of three to five new agreements this year. The opportunity in the cell and gene therapy industry continues to grow, which supports MagCyte’s opportunity to expand its SBL portfolio. We believe there are approximately two zero one cell and gene therapy biotechnology companies as of the end of twenty twenty four, of which there exists approximately 83 non viral cell and gene therapy biotechs that Maxcyte’s potential to sign an SPL with. This SPL opportunity has grown over 50% since the time of our IPO and signifies the tremendous potential for non viral cell therapies to help patients. We have capitalized on the growing SPL opportunity since the time of our IPO by more than doubling our SPL portfolio over this period.

We finished the year with approximately $6,100,000 in SL program related revenue, ahead of our initial guidance provided a year ago. Several programs supported by MagSight’s platform progressed through the clinic in 2024 and achieved new milestones. A small amount of Estelle program related revenue in 2024 was from commercial royalty revenue related to CASH Jevi following completion of patient dosing. We remain excited about the opportunity of CASH Jevi and strongly believe in its potential to benefit patients around the world. During Vertex’s fourth quarter earnings call in February, the company reported that there are now approximately fifty patients who have completed cell collection, up from approximately 30 patients noted on their third quarter earnings call.

We are pleased by the continued momentum in KAS JV and expansion of access globally. To highlight, Virtek secured regulatory approvals in Bahrain, Kingdom Of Saudi Arabia and The United Arab Emirates and indicated that they also secured a reimbursement agreement with NHS England, resulting in access to CASH Gevi in England for eligible sickle cell disease and beta thalassemia patients. Additionally, the cell and gene therapy access model was highlighted by Vertex as a mechanism for states to voluntary participate in CMS negotiated agreements for Medicaid patients. We believe that this model has potential to expand patient access to cell and gene therapies over time, which we view as a positive for patients, CAST Jevi and future therapies enabled by MaxLite. Our teams work diligently to provide regulatory scientific and technical support to our customers as they progress through the clinic.

And we have become increasingly excited by the potential for multiple therapies to come to market beginning next year and beyond. In 2027 and 2028, we see an opportunity for eight potential approved programs for lymphoma, leukemia, sickle cell disease and genetic disease indications. As we approach 2029 to 02/1931, we believe there’s potential for an additional 12 approved programs with indication expansion to solid tumors, multiple myeloma and autoimmune diseases. In our fourth wave of potential approvals in 02/1930 and beyond, we see potential for approvals within neurodegenerative disease indications as well. The opportunity for approved therapies within our current SDL portfolio is vast and growing as we continue to add new SDL customers.

In summary, we are pleased with our 2024 results driven by the execution of our global sales team, our differentiated technology and customer support and our process improvements across the organization. We increased our operational focus, while making strategic investments in areas of high growth, resulting in a year end cash position that exceeded our initial guidance. We look forward to continuing this momentum in 2025 and truly believe that our value proposition remains highly differentiated and the durable relationships with current and prospective clients. Our investment strategy remains unchanged and that we continue to focus on organic and inorganic investments that offer the best outcomes for our customers and for MaxSight, while preserving our healthy balance sheet. We are investing in the development of additional capabilities and products that our customers will need in the future, while simultaneously and carefully evaluating inorganic opportunities that we believe would benefit MaxSight.

We are committed to being diligent and disciplined in our approach to make decisions that position MaxSight to become the premier comprehensive enabler of cell and gene therapies within the industry. With that, I will now turn the call over to Doug to discuss our financial results. Doug? Thank you, Maher. Total revenue for the full year was $38,600,000 compared to $41,300,000 in 2023, representing a 6% decline.

Total revenue in the fourth quarter of twenty twenty four was $8,700,000 compared to $15,700,000 in the fourth quarter of twenty twenty three, representing a 45% decline. Total revenue declined due to multiple approval milestones received and recognized in the fourth quarter of twenty twenty three. In the fourth quarter of twenty twenty four, we reported core revenue of $8,600,000 compared to $7,200,000 in the comparable prior year quarter, representing an increase of 20%. Within core revenue, instrument revenue was $1,600,000 compared to $2,300,000 in the fourth quarter of twenty twenty three. License revenue was $2,600,000 compared to $2,400,000 in the fourth quarter of twenty twenty three and processing assembly or PA revenue was $4,200,000 compared to $2,200,000 in the fourth quarter of twenty twenty three.

As Maher discussed earlier, our instrument revenue was impacted by difficult operating environment in 2024, which led to customer caution around capital equipment purchasing. We were pleased with our strong PA revenue along with stable revenue from licenses, which we believe demonstrates strength in our revenue from clinical stage SPL customers. For the full year of 2024, we reported core revenue of $32,500,000 compared to $29,800,000 in 2023, representing an increase of nine percent. Within our core revenue, instrument revenue was $7,100,000 compared to $8,300,000 in 2023. License revenue totaled $10,300,000 compared to $10,300,000 in 2023 and PA revenue totaled $14,000,000 compared to $10,300,000 in 2023.

Of note, 55% of our core business revenue was derived from SPL customers in 2024, which compares to 48% in 2023. We believe that the percentage of core business revenue from SPLs remains at a healthy level. The year over year increase can be attributed to more customers entering the clinic and continued execution on signing new SPL agreements. We recognized $100,000 of SPL program related revenue in the fourth quarter of twenty twenty four compared to $8,500,000 in the fourth quarter of twenty twenty three. For the full year, we recognized $6,100,000 in SPL program related revenue as compared to $11,500,000 in 2023, well ahead of our initial guidance provided early last year.

SPL program related revenue includes a small amount of revenue from Cash Chevy in the second half of the year. Before I continue down the P and L, I would like to point out that we will no longer be disclosing core revenue by cell therapy and drug discovery, but rather focusing on instruments, licenses, PAs and other revenue as the components of our core revenue disclosure. Internally, we focus on these components of revenue across customers to forecast, track and understand our business performance and this updated level of disclosure is more closely aligned with how we think about the planning of our business. Moving down the P and L, gross margin was 74% in the fourth quarter of twenty twenty four compared to 90% in the fourth quarter of the prior year. Excluding inventory provisions and STL program related revenue, non GAAP adjusted gross margin was 84% in the fourth quarter of twenty twenty four compared to non GAAP adjusted gross margin of 86% in the fourth quarter of twenty twenty three.

Total operating expenses for the fourth quarter of twenty twenty four were $19,300,000 compared to $22,200,000 in the fourth quarter of twenty twenty three. The overall decrease in operating expenses was primarily driven by operational changes made in 2024. As Maher discussed, the company plans to continue to make targeted and disciplined investments to drive long term growth, which include investments in new products and product enhancements for our customers, our commercial sales team and investments to scale SecurDx. We ended 2024 with combined total cash and cash equivalents and investments of $190,300,000 and no debt. Moving to our initial 2025 guidance, we expect core revenue growth of 8% to 15% compared to 2024 inclusive of revenue from SecurTx, which we expect to be at least $2,000,000 for the full year.

We are not assuming a change in the current macroeconomic environment experienced by our customers within our guidance, we continue to remain in close discussions with our customers and how their needs might change throughout the year. MaxSight navigated well through the continuation of a difficult operating environment in 2024 and we are very confident in our ability to commercially execute on our outlook for 2025. SPL program related revenue is expected to be approximately $5,000,000 in 2025, which includes both expected revenue from pre commercial milestone payments and commercial royalties and sales based payments. We will not break out the components of SPL program related revenue due to confidentiality agreements with our customers. Additionally, we would like to note that our SPL program related revenue outlook is a risk adjusted forecast that is achievable under a variety of potential outcomes across our SPLs and planned clinical progress and commercial success of our customers.

Finally, MaxSight remains in a solid financial position and expects to end 2025 with approximately $160,000,000 in cash, cash equivalents and investments on our balance sheet. I’d like to close by stating that MaxSight is well positioned to deliver on our 2025 goals. We continue to remain dedicated to modest cash burn and operating as a streamlined organization to best support MaxSight’s long term vision and growth outlook. Now I’ll turn the call back over to Maher. Thank you, Doug.

We are proud of our progress thus far in 2025 and are in a great position to deliver high quality support for our customers. I would like to thank our team at MaxSight for their dedication to the company and our customers every day. With that, I will turn the call back over to the operator for the Q and A. Operator?

Conference Operator: Certainly. And our first question for today comes from the line of Matt LaRue from William Blair. Your question please.

Matt LaRue, Analyst, William Blair: Hi, good afternoon. Wanted to ask on the guidance for the core business by back out SecurityX looks like something around 9% growth. Just maybe just a sense for what that reflects in terms of end market dynamics as well as where it is versus where you expect kind of the normalized or longer term growth for the core business to be?

Maher Masood, President and Chief Executive Officer, MaxSight: Yes. Matt, nice to hear you again and good talking. So let me take that for a second. I can turn it to Doug as well. So we’re still seeing continued growth across our customer base, both on the research side as well as the temple side.

As we saw throughout 2024, we saw increased PA usage as well, which is a very good sign that we thought while we see that market recovery. And really a lot of it has to the fact that we continue to believe the operational changes that we’ve made, the execution that we believe we can continue to make throughout the year should give us a year over year growth that we had in 2024 versus 2023 as well. So really it’s across the board, Matt. It’s not any one particular area. It’s just a great execution of the commercial team, scientific team and organization as a whole to understand where the market is going and really have those precise call points that we did it that we were able to take on 2024 and continue that in 2025.

Doug, anything else to add there? Instruments did tick down 2024 versus 2023. We see opportunities to start pulling that in the right direction. Obviously PA sales were strong last year versus 2023. And so we expect or hope that will continue that’s built in our forecast is looking at a run rate that is aligned with the rolling forecast or rolling experience on a pull through basis and looking at our forecast for instruments.

So I think as Meyer mentioned, it’s across the board we expect to see some growth this year, but we’re being a little bit conservative in the guidance.

Matt LaRue, Analyst, William Blair: Okay, understood. And then on SecurityX, you mentioned $2,000,000 included this year. Can you maybe give a sense for sort of what the revenue track record is there? How much they have been growing, expanding customers? If there’s any business model changes or bundling you’re anticipating doing, I think that would be helpful in terms of framing how that’s going to fit in and scale up throughout the year?

Maher Masood, President and Chief Executive Officer, MaxSight: Yes, Matt. So great question. So SecurDx began commercializing really in 2024 as the first full year commercialization. So it’s very early in the process. We see great growth for SecurDx.

We’re being fairly modest in our growth projections for them in 2025 as well. Obviously, this is greater revenue this year than they had in 2024 and we feel that we can continue to grow that. The business model that they have really is more services based business model with a highly differentiated service that truly only they can do and there’s not much competition there that can meet with their service capabilities and what I call soft IP that they’re building around their assays, whether it’s their guide seek assays or want seek assays or their screening assays as well. So the business model really fits into what we do, which is highly scientific, highly differentiated where we know and can work with developers to really ensure their timeline to the clinic is faster in a safer, more consistent manner. That’s what SecurDx does.

It’s in essence an extension of what MaxSight has built our company around. But we feel confident in that two plus number, it’s at least $2,000,000 that we continue to grow it at a fairly fast rate based on their current infrastructure and then also integrating into them or into them into us into our commercial team as well. Anything else to add there, Doug? Yes.

Eric Abtau, Investor Relations, MaxSight: I just want to

Maher Masood, President and Chief Executive Officer, MaxSight: reiterate or sort of point you over to the press release and what we said in our comments. So the core revenue is expected to grow 8% to 15%. That is inclusive of revenue from SecurDx and we’re sort of not breaking out specifically other than we think it’s going to be at least $2,000,000 but how we get to that 8% to 15% growth rate and how much Secure makes of that and how much of that is leases versus instruments versus processing assemblies. We’re not breaking it down at this point in the year, but we’ll obviously start to peel things back when we report in May.

Matt LaRue, Analyst, William Blair: Okay. Thank you.

Maher Masood, President and Chief Executive Officer, MaxSight: Thanks, Matt.

Conference Operator: Thank you. And our next question comes from the line of Julie Simmons from Panopto. Your question please.

: Hi, yes. Just on Secure again, I was just wondering how much in the way of costs are going to integrate into sort of MAXO as a whole because I’m guessing in terms of sort of some of the basic infrastructure you can take out some of the costs involved with that business fairly swiftly.

Maher Masood, President and Chief Executive Officer, MaxSight: That’s right, Julie. I mean, the cost to our continuing operating expenses is fairly immaterial. We have the entire commercial infrastructure to support them. So it’s immaterial cost and it’s also part of our guidance in terms of what our end of year cash includes in SecurEDEX operating expenses. So we feel very confident that the addition of SecurEDEX can leverage what we’ve built here over the past few years, especially since our IPO where the team that we’ve built can commercialize the assays for SecurEDEX with very immaterial operating expenses attributable to SecurDx.

They have obviously there is some cost structure associated with operating that line of business. There’s a facility in Waltham and that will be continuing to make some investments there, but it’s not going to be a material part of our burn. And I think that in terms of their ability to contribute on a cash flow basis, we feel very optimistic that that can happen in relatively short order. One of the things we like about that business is one of the things we like about what we’ve done here is we’ve made investments that are extremely scalable. And so we look forward to seeing growth really hit the bottom line eventually as we continue to see hopefully return to some better conditions out there for our end users and then continued execution of our plan.

So I think again, this leverage ability of the cost structure we have here is significant.

: Excellent. Thank you. And just another one on sort of your exposure to the academic markets and NIH spending? Because I mean, I know that has been an area where you sold a reasonable amount of instrumentation in the past. So I was just wondering whether you’ve noticed any change in that environment at the moment?

Maher Masood, President and Chief Executive Officer, MaxSight: Actually, it has been somewhat insignificant part of our business in terms of where we can directly link it to a grant. So we don’t think this is going to have a material impact in the short term. Obviously, we want to see continued robust investment in the cell and gene therapy and that includes on the front end. And so long term, it could be challenging, but I don’t expect it to have an impact in the short term. So Doug, if you mentioned the exposure to NIH grants is really very, very little.

So much so if we get the exact number we’re talking about $300,000 here, it’s almost it’s really immaterial. If you look at Julie, the way we’ve built this organization and really everything we’ve done has been focused on ensuring that we’re working with those biotech companies, later stage companies that are getting ready for the clinic. So the exposure to NIH is immaterial at best.

: Excellent. That’s very good news. And then just as far as sort of the SPL environment is concerned, are you still seeing customers wanting to sign up at the similar sort of stage and that most of them are at the pre IND level or are they looking at sort of any earlier sort of when they sign those agreements?

Maher Masood, President and Chief Executive Officer, MaxSight: No, that’s a great question, Julie. It’s still at that pre IND level. As I mentioned on a previous call, we work with these customers oftentimes for a year before really going in there, showing our differentiated technology, showing our differentiated scientific support. And when they’re close to that pre IND, that’s when they begin to have those negotiation with us. And we’re so confident that we can guide to three to five a year.

It’s a sign of the health of our business, it’s a sign of the health of our differentiated platform. That’s still on the same timeline, Julien.

: Brilliant. Thank you very much.

Maher Masood, President and Chief Executive Officer, MaxSight: We’re on track. We’ve got one in the books and we’re not getting through the first quarter. That’s right.

Conference Operator: Thank you. And our next question comes from the line of Brent Smith from TD Cowen. Your question please.

Brent Smith, Analyst, TD Cowen: Great. Thanks for taking the questions. Congrats on the progress guys. I appreciate the color on the thinking that went into 2025 guidance. So maybe just kind of one more with respect to the Secure integration.

Can you just kind of maybe remind us a bit how we should think about kind of the combined company gross margins? Where are you think those could go over the near and maybe a little bit longer term as that kind of get ramped up there? And then any potential or even maybe likely or opportunities for upside to top line numbers that you would maybe call out for 2025? I know you’re not necessarily baking in due to recovery, just into the guidance itself. And then maybe I’ll just have

Maher Masood, President and Chief Executive Officer, MaxSight: a follow-up after that. Thanks. Yes. I think what you’re asking, Brandon, if I hear your question correctly is, first, the first question in terms of Secure’s integration, how they can contribute, if I heard you correctly, Brandon, how they can contribute to our guidance? Is that what you’re getting at?

Just to make sure I clarify your question.

Brent Smith, Analyst, TD Cowen: So I think for Secure, really just how we should think about kind of the combined gross margins there and then separately, any potential opportunities for upside that you guys would want to call out just for this year specifically independent of that?

Maher Masood, President and Chief Executive Officer, MaxSight: Yes. So the combined gross margins, Doug, how do we weigh in? Yes. I mean, I think that without getting too granular here on what that cost structure looks like, because we’re not breaking that out separately right now. We have healthy gross margins.

We look at it obviously on an adjusted basis. We take out that revenue that is that SPL revenue which comes in without any costs associated with that as well as we’ve adjusted for any inventory provisions we made. I think we’re going to continue to enjoy our margins in the low to mid-80s even with secure here or without. That’s exactly right. I mean to your question on the combined part of why Secure really made sense in terms of integration is that how the gross margins that they have and exactly as Doug said, we feel confident in the foreseeable future the combined gross margins will remain at the very, very healthy in the low to mid 80s gross margins.

And then in terms of the question on the top line, is there an opportunity for us to exceed that 8% to 15% that we’re guiding to? Obviously, we guided here somewhat conservative, right? We have to ensure that there are in case there are headwinds out there. As we know, we’re not completely impervious or we can untether ourselves from the overall global market in terms of what we see there in the biotech funding. But in terms of the health of our business, assuming there’s no further deterioration to all of our global markets, we’ve guided very we’ve guided conservative guidance, if that makes sense, Brendan.

We’re not really taking in any improvement or further deterioration in the market. There’s obviously shades of gray in there. If you look at the range we’re providing, it’s probably a combination of how healthy the operating environment is sort of within the current context of it, as well as our ability to execute against the opportunities that are in front of us. I think when you start to look at potential coming out outside those ranges, it’s probably going to be market dependent and that could provide for further upside if we see some recovery there.

Brent Smith, Analyst, TD Cowen: Okay, great. Thanks guys. Very helpful.

Maher Masood, President and Chief Executive Officer, MaxSight: Yes. Thanks Brandon.

Conference Operator: Thank you. And our next question comes from the line of Mark Massaro from BTIG. Your question please.

Mark Massaro, Analyst, BTIG: Hey guys, thanks for taking the questions. So I think the Secure acquisition is pretty interesting in the sense that it broadens out your pipeline. I think beyond you talked about both ex vivo and in vivo as well as viral and non viral. Is there any way that you could share what I think you talked about two zero one cell and gene companies with 83. I think that may be opportunities for you.

Can you just give us a sense of the overlap of customers between Secure and MaxSight prior and what the incremental opportunities you are leveraging Secure’s product offerings?

Maher Masood, President and Chief Executive Officer, MaxSight: Yes, great question. Great question, Mark. I mean, obviously, the excitement I have to Secure, I’m not so sure it’s coming across just yet. The opportunities are enormous in terms of what Secure provides to us. But we talked about the viral and the non viral programs.

When you think about for a second, we have 84 non viral programs that we max site with our transfection platform can target. So Secure can also target those. But what Secure also does is the entire clinical, the two forty nine programs as well, even non viral programs, we now have opportunities to target. And then in terms of even a larger number here, we have preclinical programs of three eighty three programs, 193 of which are non viral programs, which what maxed out with our transfection platform targets. SecureDx can target the entire landscape.

So you’re looking at three eighty three programs preclinical, two forty nine programs clinical. It gives us a footprint in the entire cell and gene therapy space whether it’s viral or non viral to really showcase best in class solutions that we provide on the ex vivo side as well as best in class solutions on the SecurDx side for the entire landscape. So you can tell the breadth that we have now. So there’s an overlap of the 84 programs that we currently now can target that SecurEDx gives us that ability to target through and then additional two forty nine clinical and three eighty three preclinical programs as well in the entire in vivo exclio space.

Mark Massaro, Analyst, BTIG: Yes, that’s very helpful. And then can you perhaps go into a little more detail about Secure’s revenue opportunity in the sense I guess what I’m really asking is, how do they monetize? I know it’s a services company. So is this like a fee for service or is this I’m just curious how the revenue gets recognized if it’s like a subscription, trying to figure out how lumpy it is as we think about going out a couple of years.

Maher Masood, President and Chief Executive Officer, MaxSight: Yes. So right now it’s exactly what you said. It’s a fee for service with the opportunity for us as we build them out and we take on that great potential that they have for us. There’s opportunity to also we’re looking at that for a subscription based model as well for certain parts of their assets depending on the development timeline, whether it’s early discovery or later into clinical development. But right now, it’s a fee for service with a highly differentiated services for that fee.

So that’s the basic ball right now, Mark.

Mark Massaro, Analyst, BTIG: Okay. And I think I heard you guys say that, just checking that the guidance for 2025 does not assume any change to the environment. And I think the environment is broad, but I just want to make sure you’re assuming capital raising environment, macro environment, basically all potential risk factors at this time.

Maher Masood, President and Chief Executive Officer, MaxSight: Sure. So we’re obviously providing a range for revenue and it’s going to be made up of the various components. And by the way, we think Secure has significant growth opportunities. We’re looking forward to seeing that business provide some growth opportunities. In terms of whether where we see this year, I just want to be clear, we don’t we’re not counting on a recovery or the market changing significantly.

However, when you look at that range, it’s probably in the current environment we’re in, in, there are shades. So think of it as where if the light is yellow, there are shades of yellow, but if things go green or things go red, that probably falls outside the range. And of course, in addition to the fluctuations of where the markets actually is, it’s how we’re going execute on the opportunity. That’s really where the range comes in. If I was modeling it out, I probably look towards the middle of that, but I think we’re being conservative.

Mark Massaro, Analyst, BTIG: Sounds good. I will hop back in the queue.

Maher Masood, President and Chief Executive Officer, MaxSight: Thank you, Mark.

Conference Operator: Thank you. Our next question comes from the line of Dan Arias from Stifel. Your question please.

Paul, Analyst, Stifel: Thanks for the question. This is Paul on for Dan. I guess just touching on the guide for core revenue, you talked about not including any not baking in any kind of improvement throughout the year even though there is some upside there. As you said, you’re cautiously optimistic that there will be better funding environment. But just in terms of not baking that in, how does that play into what the quarterly cadence is going to be from a guidance perspective?

Can you just

Maher Masood, President and Chief Executive Officer, MaxSight: give us some color there? Yes. So just reiterate what the components are of core revenue and obviously Secure is going to be part of that, but I don’t expect lumpiness there. In terms of the breakdown between the license revenue, that’s pretty stable. You can model that out throughout the year on even basis.

What we’re doing in terms of the processing assemblies, we model that out. We’re looking at a rolling run rate of pull through across the installed base, using that to model that out. We don’t expect significant lumpiness there. Although historically sometimes the third quarter is weaker than the fourth quarter. We do see that occasionally play out, although we don’t consider our business one that’s significantly seasonal, if you will.

I think if there is a lumpy component to this, it’s instruments because that’s where we’re looking at that on specifically identified opportunities, identified and validated opportunities using historical conversion rates and coming up with estimates. And I can’t say that those are actually that there is not differences between some quarters in that, but I don’t think that we’re prepared to break that down in terms of the guide at this time. I don’t think it will be significant, but I think if there’s some lumpiness there, it’ll probably be in instrument sales.

Paul, Analyst, Stifel: Okay, that’s helpful. And then just the one follow-up is, you talked about kind of the conservatism in the guide for Secure. And I think when the acquisition came out, you had said that the business transitioned over towards the service revenue. I think it was in March of twenty twenty four. To what extent can you kind of touch on to what extent the growth this year is just kind of lapping that transition and getting that higher service revenue in the first quarter versus integration into your overall commercial infrastructure versus just kind of expansion of the business and penetrating more customer accounts?

Maher Masood, President and Chief Executive Officer, MaxSight: I think it’s important to realize just how early that that business is in terms of when they came out of stealth and we’re actually operating the business. So I think that’s part of that. Yes, I think it’s a good question, Paul, in the sense of right now regarding to that just based on the fact of the expansion of the business that they began to roll out last year. As we have more full integration of SecuridX into the Maxite commercial team throughout the year, we see even more expansion opportunities than they currently have. So that $2,000,000 plus is really an expansion of what they did last year on the services side.

That’s rolling into the Q1 of this year and we feel confident as they begin to continue to integrate into our commercial team, we can expand their portfolio as well on the services business that they rolled out in 2024.

Paul, Analyst, Stifel: Great. Thanks for the questions. I’ll jump back in the queue.

Conference Operator: Thank you. And our next question comes from the line of Matt Hewitt from Craig Hallum. Your question please.

Matt Hewitt, Analyst, Craig Hallum: Good afternoon. Thanks for taking the questions. Maybe first up on Secure, is the sales and marketing effort, has that been integrated yet or when do you anticipate that could occur?

Maher Masood, President and Chief Executive Officer, MaxSight: It has, it has been good to hear your voice. It has been integrated actually from day one upon the acquisition roughly a little over a month ago. The marketing and the sales integration has happened from day one and we feel confident over the course of the year that integration from day one will begin to give us the traction and the exposure to Secretariat’s offerings. Obviously, there’s more marketing that we do for SecurDx really make sure that all the major conferences ensure that we have outpatient notes that are highlighting their different highly differentiated assays, but that integration happened from day one, Matt.

Matt Hewitt, Analyst, Craig Hallum: Got it. And then maybe just kind of taking a step back on the macro, as you’ve had conversations over the past, call it, three, four months, have you noticed or heard any change in the conversations that you’re having with customers? Obviously, there’s been a lot of noise here over the past couple of weeks, tariffs, budget cuts, all that kind of stuff. But what are you hearing from customers? Has that changed at all?

Or are they kind of still feeling like it’s steady as she goes and progressing?

Maher Masood, President and Chief Executive Officer, MaxSight: I mean, 55 of our revenue is from SPO customers. So there’s things that are progressing through the clinic. And so it’s been for the most part ordinary course of business, everything is driving along there. When you look outside that, I think opinions vary. But where we are in the year here, two months and change into the 2025 and we’re comfortable with the guidance we’re providing based on where things are today even with sort of a little bit of more headwinds than we probably expected earlier in the year.

Yes. Let me add to that Matt as well. So obviously last year we saw that deprioritization of programs, but it’s level off. So it’s and that’s where we are now, where our customers deprioritized programs have more focus on what programs they want to take into the clinic. That continues throughout the year, and now it’s stabilized as Doug has mentioned.

I mean, obviously is the macro environment the same as it was ninety days ago? It’s not the same, but in terms of our customer base, it’s the same. We saw that deprioritization. We saw what we call that trough all the way through last year that’s now stabilized. And that civilization has stayed all the way through the first quarter in terms of what we’re seeing so far.

So what we’re seeing now is really execution on the current market where it is and it’s another year of returning back to growth as we did in 2024.

Matt Hewitt, Analyst, Craig Hallum: That’s great. Thank you very much.

Maher Masood, President and Chief Executive Officer, MaxSight: Absolutely. Thank you, Matt.

Conference Operator: Thank you. And this does conclude the question and answer session of today’s program. I’d like to hand the program back to Mahit for any further remarks.

Maher Masood, President and Chief Executive Officer, MaxSight: Thank you, operator, and thank you everyone for joining us on today’s call. We look forward to speaking to you again on our next earnings call in a few months. Thank you.

Conference Operator: Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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