Thank you for joining us. I would like to welcome everyone to the Cytek Biosciences Second Quarter 2025 Earnings Conference Call. I will now hand it over to Paul Goodson, from Investor Relations. You may begin.

Thank you, operator. Earlier today, Cytek Biosciences released financial results for the second quarter ended June 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 e-mail to [email protected]. A copy of the news release is also available on the Investor Relations section of Cytek's website at investors.cytekbio.com. Joining me today from Cytek are Wenbin Jiang, CEO; and Bill McCombe, 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 Cytek'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 Cytek issued today and in Cytek'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, Cytek 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, August 6, 2025. As I have mentioned on prior conference calls, Cytek sponsors User Group Meetings and participates in a variety of industry events that may be of interest to investors. Coming up soon are two Cytek-sponsored User Group Meetings, the first in Mainz, Germany on September 16; and then in Chicago on September 18. Upcoming industry conferences include the European Society for Clinical Cell Analysis, or ESCCA, which will take place in Montpellier, France from September 17 through the 20th and the Annual Meeting of the International Clinical Cytometry Society or ICCS, in Philadelphia from September 26 through the 30th. 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 Cytek'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 are interested in attending any of these events, please contact me. With that, I will turn the call over to Wenbin.

Thanks, Paul. Welcome, everyone, and thank you for your interest in Cytek. On today's call, I would like to start with a discussion of our performance in the second quarter and first half of 2025, 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 3. Our second-quarter revenue in 2025 was $45.6 million, down $1 million or 2.2% compared to the second quarter of 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% 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 second quarter. Turning to Slide 4. Recurring revenue growth continued in the second quarter. Specifically, service and reagent revenue each increased by 18% versus the second quarter of 2024. Both our reagent and service businesses benefit 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 12-month sales in the second quarter, growing 16% versus last year. Turning to Slide 5. Notably, we saw 3% growth in FSP unit volume in the second quarter, led by Aurora Analyzers. We saw particular strength in the U.S. with 10% year-over-year growth. We believe the growth in our FSP instrument unit volumes, especially in a difficult environment, speaks strongly to the overall strength of our core business and the fact that our FSP products are essential instruments to our customers' workflows as distinguished from more discretionary instruments. Turning to Slide 6. Looking more closely at the second quarter, total U.S. revenue was up 7% over the second quarter of 2024, driven by service and reagents. Instruments were flat in the U.S. 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 first quarter of 2025. We continued to see broad-based pressures in instrument orders from academic and government customers in the U.S., driven by a continuation from the first quarter of the uncertainties in academic funding resulting from U.S. policy changes. 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 reagents. 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 U.S. and EMEA. However, on a longer-term basis, this region continues to demonstrate solid growth. In our Rest of the 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 first half of 2025, which we believe smooth out some of the geographic and end-user variability inherent in our industry and provides a clearer picture of our business overall. For the first half of 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 U.S., which was down 3%. These declines were partially offset by steady growth across APAC, which grew 9% year-over-year, and Rest of World, which grew 14% compared to 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 diversification in multiple geographic regions can, combined with a growing recurring revenue stream, smooth our otherwise much more variable 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 million to $205 million. 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 by 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 four strategic pillars: instruments, applications, bioinformatics, and clinical to further solidify Cytek's position as a market leader in next-gen cell analysis solutions. Starting with our core instruments on Slide 7. In the second quarter, we expanded our global footprint by 146 instruments, bringing Cytek'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 Cytek Aurora Evo system, setting a new standard for full spectral flow cytometry and notably improving on our flagship Cytek Aurora Cell Analyzer that we introduced 8 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 8. The Cytek Cloud continues to serve a critical role for researchers. Our software tools empower customers to streamline their experimental workflow, which drives adoption and utilization of our cell analysis solutions and the growth in our reagent and service businesses. As of June 30, 2025, we have over 20,500 Cytek Cloud users, representing a remarkable growth of 27% since the beginning of 2025. This represents an average of more than 7 users per installed Cytek FSP instrument and reflects the loyalty our users have to our product portfolio and the halo effect of the Cytek Cloud driving the utilization of our technology platform. As a reminder, our Cytek Cloud is transforming how researchers design and conduct complex flow cytometry experiments. At its core is our proprietary AI-driven panel builder, which saves weeks or months of time by automating critical steps like fluorochrome selection and marker matching. Scientists can then conduct virtual experiments 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 Cytek Cloud will drive broader adoption of our technology and recurring revenue opportunities across our growing installed base. Turning to our next growth pillar applications: our intention is for the Cytek 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 reagent offerings and application-specific kits. We continue to make significant improvements in our reagent operations, resulting in improved execution and dramatically shorter delivery times over the past year. These enhancements have strengthened customer support and have been a key driver of the strong double-digit reagent sales growth we are seeing in the U.S., EMEA, 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 million 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 revenues 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.

Thanks, Wenbin. Turning to Slide 9 and our second quarter financial results. Total revenue for Q2 was $45.6 million, a 2% decrease versus Q2 of 2024. This reflects continued weakness in instrument revenue in EMEA and APAC, offset by strong growth in service and growth in U.S. product revenue. Product revenue, which is comprised of instruments and reagents, decreased 9% versus Q2 of 2024, driven by a significant decline in EMEA. U.S. product revenue increased 2% versus Q2 of 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 Q2 of 2024 after strong growth in Q1 and showed solid growth for the first half of 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 the 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.S. 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 $23.9 million, a 6% decline versus Q2 of 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 $34.5 million in Q2, up $0.5 million or 2% versus Q2 2024, driven by higher general and administrative expenses. Research and development expenses were $8.8 million, down 12% versus the year-ago quarter due to lower headcount and engineering and outside services expenses. Sales and marketing expenses were $12.1 million, down 1% versus the year-ago quarter. General and administrative expenses were $13.5 million, up $1.8 million or 16% from the year-ago quarter. The increase was attributable to higher outside services expenses. Loss from operations was $10.6 million for Q2 versus $8.5 million in the year-ago quarter, driven primarily by lower GAAP gross profit and, to a lesser extent, higher operating expenses. Net loss was $5.6 million in Q2 versus $10.4 million in the prior year quarter. This was driven by two factors. First, net other income increased to $3.8 million versus $1.3 million in the prior year quarter. This was primarily driven by $1.6 million of foreign exchange gains in the quarter versus $1.8 million of foreign exchange losses in the prior year quarter and was offset by lower interest income of $0.9 million. Second, we had a tax benefit of $1.2 million in the current quarter as a result of a higher effective tax rate versus a tax expense of $3.2 million in the prior year quarter. Adjusted EBITDA, which excludes stock-based compensation and foreign exchange impacts, declined to $1.3 million from $2.9 million in the year-ago quarter due to lower gross profit. Positive free cash flow of $0.9 million was offset by $4.5 million of share repurchase in the quarter, decreasing our total cash and marketable securities by $3.6 million to $262 million. In the second quarter, we repurchased $4.5 million of Cytek stock or 1.2 million shares. In the first half of 2025, we repurchased $15.1 million of Cytek stock or 3.3 million shares, reducing our total shares outstanding to 127.2 million 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 million to $205 million, 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.

Thanks, Bill. Turning to Slide 11. Before closing, I want to thank our Cytek 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 instrument 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.

Our first question comes from David Westenberg from Piper Sandler.

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?

We believe overall, based on the market report, we have seen the overall flow cytometry market seems to be reducing and going down and 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, the number of FSP instruments and actually the unit volume is going up.

So that would imply that we're gaining market share. Bill, I have a question for you. I know it's challenging to predict, but typically, sales tend to peak in the third month of each quarter during CapEx cycles. Based on the current sales funnel and your experience, how confident are you in the guidance for the second half of the year? Does the market need to show improvement for this guidance to hold, or is this a steady-state estimate? I understand that CapEx trends in the third month of each quarter make this a difficult question.

Our business is primarily split into two segments. We have our recurring revenue businesses, which include our service and reagent operations, both of which have been experiencing high double-digit growth, and the fundamentals supporting that growth seem strong. We anticipate this trend will continue without significant changes to the growth rate. The other segment is our instrument business, which is influenced by capital spending and is notably weighted towards the last month of the quarter. We expect a quarterly pattern similar to last year's, suggesting that performance will be stronger in the second half than in the first. Additionally, the gap compared to last year narrowed significantly in the second quarter compared to the first quarter. Taking all these factors into account, along with the market outlook, we developed our range based on those variables.

That was great. So just maybe the last one, Wenbin. In terms of your last commentary on being in a better position after the capital cycle, I know predicting this is really difficult, but do you think that with lower interest rates and perhaps more certainty from NIH, the CapEx cycle might return next year, or do you think it will take a bit longer? Lastly, regarding your commentary on being in a better position after the cycle, what do you see as the major drivers of Cytek's performance after the CapEx cycle? I'll hop off the queue after that.

As you can see, we continue to invest in developing new technologies to improve the performance and to continue to launch new products, evidenced by the two new products we recently launched. One is our Evo Cytek Aurora Evo, and the other one is Micro Muse; one for high-end market applications and the other one really for 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 this market. And when the capital expenditure challenges start to ease, we feel we are there to serve for the customers.

As for the macro factors you mentioned, such as interest rates and the certainty of NIH funding, we did notice a decline in growth rates as interest rates increased. However, we don't have a definitive outlook on how this will impact capital spending trends. It's reasonable to assume it could be beneficial, but in the biotech and pharma sectors, influences are more industry-specific rather than solely reliant on interest rates. Regarding NIH funding, clearer funding would obviously be advantageous for us. Our U.S. academic and government sector has been underperforming this year, and more certainty around NIH funding would certainly assist in that area. However, we are aware of what is reported in the media about these matters and don't possess any unique insights.

Our next question comes from Chad Wiatrowski from TD Cowen.

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&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 noncore technologies maybe to expose yourself to some higher-end growth markets?

Yeah. So short answer is yes, we are open to M&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.

Yeah. Actually, in addition to the M&A, we are also investing in organic growth. And as you can see, our reagents and 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.

Our next question comes from Andrew Cooper from Raymond James.

This is Noah speaking for Andrew. My first question concerns gross margins. I believe your results were slightly below expectations, and I heard you mention some one-time adjustments. Should we anticipate any changes in the trend for gross margins for the remainder of the year as those one-time factors fade away? I'm looking to get a sense of that. Additionally, you mentioned last quarter that tariff headwinds were around 1% to 3%. Do you have any updates on that? Were those impacts within that range? What are you observing?

Sure. There are two main factors that influence gross margin from one quarter to the next throughout the year. First, our instrument revenues are generally higher in the third and fourth quarters compared to the first and second quarters. The first quarter tends to be our weakest, the second and third are average, and the fourth is usually the strongest. As instrument revenues rise, our gross margin improves because our fixed costs do not significantly change, allowing us to contribute more variable margin to the gross margin line. Therefore, we expect to see margin improvement in the third and fourth quarters as instrument revenue increases. The second factor is one-time events. Last quarter, I noted a significant overhead capitalization charge that I did not anticipate would persist, and it did not. This charge went away in the second quarter, and we do not expect it to return in future quarters. For this quarter, we had an inventory adjustment primarily related to service parts, some of which is nonrecurring, which should benefit gross margin in the service business. I also anticipate better utilization of overhead in the service business as the year progresses, leading to improvements in both our product gross margin and our service gross margin.

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 you seeing that from? 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?

The strength in the biopharma segment was evident throughout. The larger pharmaceutical customers represent a significant portion of our total pharma revenue, and we observed positive performance from them. Additionally, there was some strength from smaller biotech companies, though they make up a minor segment of the total. Overall, the performance was strong across all areas. For the major pharmaceutical companies, a key benefit of our technology is its ability to harmonize processes, which remains a crucial factor in our success with them. We also launched the Evo, which offers important new features that are highly appreciated by large pharma, such as enhanced throughput, automation, and capabilities for handling small particles.

Our next question comes from Mason Carrico from Stephens Inc.

This is Harrison on for Mason. 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?

Aurora Evo is the primary contributor to our overall revenue, with an average selling price in the hundreds of thousands. We anticipate that it will significantly boost our high-end sales, positively influencing our margins. The Muse Micro, on the other hand, is a smaller system priced under $100,000, specifically around $20,000, which means it doesn't greatly affect our margins in either direction. However, the Evo, being a new product with advanced features, is expected to provide substantial support for our margins.

Okay. Got it. That's helpful. And then reagent service and ex-U.S. and EMEA capital sales have been growing over a 20% year-over-year pace. Does your current guide assume those segments continue that pace in the second half here this year?

We will not provide guidance on specific product lines. However, you should consider that our service growth is primarily driven by the increase in our installed base, with a one-year lag. To estimate the quarterly growth rate of service revenue, look at the growth of our installed base from 12 months ago. We do not anticipate any significant changes in this trend. As the installed base increases, the percentage growth from annual deliveries may gradually decrease, but this will occur slowly. Regarding reagents, our growth is linked to our established customer relationships, improved execution, and an expanded product range, all of which we expect to persist. In summary, the key drivers for growth are firmly in place, are long-term in nature, and should continue to yield similar growth.

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