Thank you for your patience. My name is Tina, and I will be your conference operator today. I would like to welcome everyone to the Cytek Biosciences Fourth Quarter 2025 Earnings Call. It is now my pleasure to turn the call over to Paul Goodson, Head of Investor Relations. You may begin.

Thank you, operator. Earlier today, Cytek Biosciences released financial results for the fourth quarter and year ended December 31, 2025. If you haven't received this news release or you'd like to be added to the company's distribution list, please send an email 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, on Slide 2, 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 on 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, February 26, 2026. 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 on our performance in the fourth quarter and the full year 2025 before turning the call over to Bill for a detailed look at our financials and our outlook. Turning to Slide 3. We exited 2025 in line with our expectations and delivered accelerating revenue growth quarter-over-quarter throughout the year despite challenging industry conditions. Fourth quarter revenue in 2025 reached $62.1 million, representing a year-over-year increase of 8% compared to the same period in 2024 and notably the highest revenue historically achieved in a quarter at Cytek. This growth was driven by a continuation of the trend we saw in the third quarter, namely stabilization and growth in the U.S., a turnaround in the EU, continued strength in APAC and the solid expansion of our recurring revenue businesses worldwide. Turning to Slide 4. Geographically, in the fourth quarter, EMEA and APAC both posted double-digit year-over-year percentage revenue increases with solid gains across instruments, reagents and service. Year-over-year fourth quarter revenue growth in EMEA was driven by strong instrument demand from academic and government customers and continued momentum in service revenue, partially offset by a decline in instrument revenue from biotech, pharma and CRO customers. For the fourth quarter of 2025 in the U.S., we saw mid-single-digit year-over-year growth in total revenue, driven by sentiment shifting in the academic and government market. This increase was partially offset by a decline in instrument sales to the biotech, pharma and CRO market, reflecting the typical fluctuations we see with this sector, particularly after a strong third quarter. Turning to Slide 5. Full year revenue in 2025 reached $201.5 million, representing a year-over-year increase of 1% compared to 2024. I want to take a moment to highlight the improvement in our revenue growth during 2025. For the first half of the year, total revenue was down almost 5% year-over-year due to public policy issues affecting life sciences spending. Our momentum pivoted in the second half with total revenue up 5% compared to the second half in 2024. This return to growth reflects improved trends and increased customer demand. Importantly, our overall performance in 2025 demonstrates the durability of our business, particularly when compared to the evidence of declines in cell analysis and life science instrument demand through the end of the third quarter. We believe our success at delivering revenue growth in 2025 was achieved through the strength of our brand and technology, the diversification of our revenue streams across multiple geographic regions and a growing contribution from recurring revenue. We believe this return to growth will continue in 2026. I would now like to update you on the progress our team has made across our core strategic pillars, instruments, applications, bioinformatics and clinicals to further reinforce Cytek's position as a market leader in next-gen cell analysis solutions. Starting with our core instruments on Slide 6. In the fourth quarter, we expanded our global footprint by 208 instruments, bringing Cytek's total installed base to 3,664 units. In 2025, challenging market environment, we believe the growth in our FSP instrument revenue reflects the superior performance of Cytek's products, our brand recognition and the underlying strength of our core business. We are particularly pleased with the growth in our sales for the unit volume, which grew 22% in 2025 compared to the prior year and accelerated to 26% growth in the fourth quarter over the prior year period. We have also been very pleased with the performance of our new Cytek Aurora Evo system. In the short time since its launch last May, it has been tremendously successful, driving 21% unit growth in the combined Aurora category in the fourth quarter versus Q4 of 2024. I'm also pleased to highlight that the Muse Micro System was recently awarded the 2025 Biotech Breakthrough Award for Drug Discovery Solution of the Year. As we previously noted, the Muse Micro analyzer is an ideal choice for researchers and labs seeking cost-effective flow cytometry solutions and has had a very strong reception since its introduction last year. These new product offerings reflect our commitment to maintaining our position at the forefront of the technology innovation in cell analysis generally and flow cytometry specifically. I would now like to turn to our next growth pillar applications, which is comprised of our reagent business. We delivered more than 20% growth in reagents in the fourth quarter in all of our geographic regions, except the U.S. Our reagent growth continues to be driven by the improvements we put in place in 2025, including best-in-class delivery times, a large catalog of reagents and new initiatives and strategies on reagent sales. Turning to Slide 7. Our recurring revenue continues to strengthen as our installed instrument base expands. For all of 2025, recurring revenue represented 34% of total revenue and notably grew 21% year-over-year. We expect the recurring revenue proportion of total revenue will continue to grow steadily with increased cumulative instrument placements and to become an increasingly larger share of our business over time. In bioinformatics, our software ecosystem continues to be a powerful growth driver. The advanced software embedded directly in our instruments, combined with the capabilities of the Cytek Cloud are highly valued by our customers and are accelerating adoption of our products. By year-end 2025, the number of users on the Cytek Cloud grew to over 24,000, representing growth of more than 50% in a single year and reaching nearly 8 users per installed FSP instrument. Our expanding digital footprint enhances the attractiveness of our offerings overall and helps to drive reagent revenue growth. Before turning to our financial results, I want to highlight the meaningful operational progress we achieved in 2025. Early in the year, we established a new manufacturing facility in Singapore and optimized our broader global operational footprint. These actions strengthened our region for region manufacturing strategy and further reinforced the resilience of our supply chain. I'm particularly proud that the Singapore site began generating revenue in less than 100 days from when we started the build-out. Importantly, these initiatives also positioned us to mitigate the impact of the still evolving tariff policies worldwide. Now I would like to ask Bill to review our financials.

Thanks, Wenbin. Before I discuss the quarterly and full year numbers, I want to comment on the macro trends we observed in 2025. In the first quarter, uncertainties in the macro environment and weak demand led to a total revenue decline of 8% year-on-year. In the second and third quarters, revenue growth stabilized with declines of 2% and increases of 2% respectively, where growth in our service and APAC businesses was offset by decreases in EMEA. Then in the fourth quarter, as anticipated, EMEA stabilized while other markets continued to grow, resulting in an overall revenue growth of 8%. We see this turnaround as indicative of more sustainable trends in our markets, which have persisted into 2026, influencing the full year 2026 guidance I will share shortly. In the fourth quarter, revenue was $62.1 million, marking an 8% increase from the prior year. This growth was supported by robust global performance in service and reagents, ongoing demand for instruments across Asia Pacific, and a recovery in EMEA instrument demand among academic and government clients. Currency fluctuations also contributed 3% to the quarter's growth. In the U.S., instrument revenue remained flat, as strong academic and government demand balanced softer demand in the biotech and pharma sectors. Globally, revenue from academic and government customers grew by 33% compared to a weak prior year, while biopharma revenue declined by 6% against a strong fourth quarter last year. Product revenue, consisting of instruments and reagents, rose by 3% compared to Q4 of 2024, driven by significant gains in APAC and EMEA and a slight increase in the U.S. U.S. product revenue maintained its stable trend from Q3, thanks to a strong increase in instrument revenue from academic and government customers, offset by declines in pharma biotech instrument sales due to their strong purchases in Q3 2025. Our U.S. instrument sales were bolstered by the launch of our new Aurora EVO instrument and pent-up demand from academic and government customers. In EMEA, a similar trend was observed, with a notable percentage increase in product revenue primarily driven by academic and government customer growth, compared to a weak quarter the year prior. Also akin to the U.S., EMEA revenue from pharma biotech was weak compared to the strong performance last year. Though reagent revenue has remained a mid-single-digit percentage of our total, it grew over 20% in Q4 and more than 25% for all of 2025. This strong growth is attributable to initiatives we implemented at the start of the year, including improving delivery times, expanding our reagent catalog, forming a dedicated sales team for reagents, and launching new reagent products. Service revenue continued to show strong recurring growth, increasing by 25% in Q4 compared to the prior year due to growth in the installed base and active usage of our systems. We expect service revenue growth to persist, although it will gradually slow as the number of installed instruments rises. Regarding geographic performance, total U.S. revenue grew 5% in Q4 relative to the prior year, driven by double-digit service revenue growth. EMEA revenue increased by 21%, buoyed by strong service and instrument revenue from academic and government sectors. APAC, including China, reported a 15% growth in Q4, driven by instrument service and reagent sales. GAAP gross profit was $32.9 million, a 2% decrease from $33.7 million in Q4 of 2024. The GAAP gross profit margin was 53%, down from 59% in the same quarter last year, attributed to a lower service gross margin due to increased headcount and travel expenses, along with a lower product gross margin from higher material, tariff costs, and manufacturing overhead from transitioning a production facility overseas. Adjusted gross profit margin, excluding stock-based compensation and amortization of acquisition-related intangibles, was 55% in Q4, down from 61% in the previous year. Total operating expenses were $38.5 million in Q4, reflecting a $7.8 million or 25% increase compared to the same quarter of 2024, which included a nonrecurring expense reduction of $2.6 million related to an adjustment in estimation for a license and royalty settlement liability. Excluding this reduction, the increase was $5.2 million, primarily due to higher general and administrative and sales and marketing expenses, somewhat offset by lower R&D costs. Research and development expenses totaled $9 million, down 8% compared to the previous year, mainly from reduced headcount and compensation and engineering costs. Sales and marketing expenses reached $13.1 million, an 11% increase year-over-year due to higher headcount and compensation expenses along with increased sales commissions. General and administrative expenses were $16.4 million, up $7.3 million from the same period last year, which included the $2.6 million reduction previously mentioned. Excluding this reduction, the increase would have been $4.7 million or 40%, largely due to legal expenses related to patent litigation and elevated compensation, software, and bad debt expenses. Loss from operations was $5.6 million for Q4 compared to a $3 million income from operations in the same quarter last year, which included the $2.6 million nonrecurring expense reduction. Excluding this amount, income from operations in Q4 2024 would have been $0.3 million. The overall decline in income from operations of $5.9 million stemmed from $0.8 million lower gross profit and $5.2 million higher operating expenses. The net loss for Q4 was $44.1 million versus a net income of $9.6 million in the prior year. This quarter's net loss included a $38.1 million valuation allowance against deferred tax assets due to uncertainty regarding the realization of associated future tax benefits. This is merely an accounting decision and does not affect our ability to utilize these losses for tax purposes. Although this amount is significant, it is a first-time recording related to deferred tax assets accumulated over multiple years. Without this valuation allowance, our net loss would have been $6.0 million. The net income in Q4 2024 included a one-time benefit of $6.7 million after tax associated with the settlement liability adjustment I mentioned earlier. Excluding this, net income would have been $2.9 million. The additional increase in net loss of $8.9 million is primarily due to lower gross profit of $0.8 million, increased operating expenses of $5.2 million, and a $2.5 million rise in other tax expense, mainly on foreign earnings. Adjusted EBITDA, which excludes stock-based compensation and foreign exchange impacts, fell to $4.5 million from $12.5 million in the previous year, which included a $2.6 million nonrecurring benefit. Excluding this amount, adjusted EBITDA in Q4 2024 would have been $9.9 million. The decline of $5.4 million was mainly due to a $5.2 million increase in operating expenses and a $0.8 million dip in gross profit. Free cash flow in Q4 2025 was slightly negative at $0.2 million, leading to a slight decrease in total cash and marketable securities to $261.5 million by December 31, 2025, down from $261.7 million at the end of Q3. Now regarding the full year 2025. Total revenue for the year ending December 31, 2025, was $201.5 million, a 1% increase over the prior year. This rise in total revenue was primarily driven by a 21% growth in worldwide service revenue and double-digit growth in APAC product revenue, counterbalanced by a slowdown in product revenue in EMEA and the U.S. GAAP gross profit was $104.5 million for 2025, a 6% decrease from $111.1 million in the prior year. GAAP gross margin stood at 52% for 2025, compared to 55% in the earlier year. The decline was mainly due to increased service headcount and material costs, higher tariffs, and elevated manufacturing overhead resulting from transitioning the production facility overseas. The adjusted gross margin, excluding stock-based compensation and acquisition-related intangibles, was 55%, down from 59% in the previous year. Operating expenses were $144.8 million for 2025, compared to $131.6 million in the prior year, which included the nonrecurring reduction I discussed earlier. Excluding that reduction and a nonrecurring ATM offering cost write-off in Q3 2025, the increase would have been $9.9 million or 7%, largely driven by higher G&A costs, partially offset by lower R&D expenses. Research and development expenses totaled $36.5 million, a decrease from $39.4 million, reflecting a 7% reduction compared to the previous year due to decreased headcount and engineering expenses. Sales and marketing expenses were $49.4 million, a 1% increase over $49.1 million in the previous year. General and administrative expenses were $58.9 million compared to $43.1 million in the year before, including the $2.6 million reduction previously mentioned. Excluding that reduction and the nonrecurring offering cost write-off, the increase would have been $12.5 million or 27%, primarily due to higher legal expenses related to patent litigation, in addition to increased compensation, sales tax, and software expenses. The loss from operations in 2025 reached $40.4 million, which included a $0.7 million nonrecurring deferred ATM facility offering cost write-off. This is compared to a loss of $20.5 million in 2024 or $23.1 million when excluding the previous nonrecurring expense reduction. If we disregard both nonrecurring items, the loss from operations increased by $16.6 million due to a $6.6 million decrease in gross profit and a $9.9 million increase in operating expenses. The GAAP net loss for 2025 was $66.5 million, which included a $33.1 million valuation allowance against deferred tax assets due to uncertainty about realizing the associated future tax benefits, as noted in Q4. This was an unusually large amount due to the first-time nature of this allowance, as previously mentioned. The GAAP net loss also reflected a $0.7 million nonrecurring offering cost write-off outlined earlier. Without these items, the GAAP net loss for 2025 would have been $32.7 million, compared to a net loss of $6 million or $12.7 million, excluding the $6.7 million one-time benefit from the settlement liability adjustment. When excluding nonrecurring items, the GAAP net loss increased by $20 million in 2025, attributed to $6.6 million lower gross profit, $9.9 million higher operating expenses, and $3.3 million increased taxes, mainly on foreign earnings. Adjusted EBITDA for 2025 was $5 million, excluding previously mentioned nonrecurring items, foreign exchange impacts, and stock-based compensation, compared to $22.4 million in 2024. The decline of $17.4 million was principally due to $6.6 million lower gross profit, $9.9 million higher operating expenses, and $2.3 million reduced stock-based compensation. Furthermore, adjusted EBITDA, excluding investment income, fell from $14.4 million in 2024 to a negative $3.1 million in 2025. In line with our historical emphasis on cost management and profitability, we are dedicated to enhancing these metrics moving forward. Cash, cash equivalents, and marketable securities totaled $261.5 million as of December 31, 2025. This indicates a decrease of $16.4 million from $277.9 million at the end of December 2024, partly due to the repurchase of $15.1 million of our stock during the year. This repurchased about 3.3 million shares at a weighted average cost of $4.58 per share, leaving us with 128.6 million shares outstanding as of December 31, 2025. Our solid balance sheet and positive cash generation emphasize our capability to invest in global growth initiatives. Now, regarding our full year guidance for 2026, we are providing a revenue outlook of $205 million to $212 million, assuming constant currency exchange rates, and we are not factoring in significant benefits from tariff changes at this time. This guidance reflects an improved market environment in EMEA and the U.S., as well as continued strong growth in instruments and our service and reagent businesses globally. We expect these trends to persist. Notably, we believe our performance in Q4 and for the full year 2025 demonstrates our strong market leadership during a challenging environment. Our core business is now experiencing positive growth in all major regions, and our recurring revenue continues to expand. Despite facing some temporary elevated operating expenses, we achieved positive adjusted EBITDA for the full year 2025, which we expect to continue into 2026. As we have done in the past, we anticipate maintaining a strong performance relative to the overall flow cytometry market, which is also starting to exhibit signs of stabilization.

Thanks, Bill. Turning to Slide 11. I want to close by thanking our Cytek team. This year, we were recognized as a public company growth leader in America by Time Magazine. This validation is a testament to Cytek's outstanding record of growth and innovation over the last 5 years. Overall, I believe our fourth quarter and full year performance during a challenging 2025 reflects the resilience of our organization and the strength of our leadership in the flow cytometry market. Our broad-based execution positions us well for 2026, where our priorities remain focused on driving the market penetration of our instrument platforms continuing to advance our technological leadership with innovative new products, driving the growth of our recurring revenue lines and delivering profitable, sustainable growth. I want to thank everyone for joining today's call, and we will now open it up for questions.

And from TD Cowen, our first question comes from Brendan Smith.

I appreciate all the color. I actually wanted to maybe ask a little bit higher-level question just about some of the underlying assumptions of the growth of the overall flow cytometry market. You guys gave a lot of good color on different end market breakdown. And I think we've seen something like 8% to 9% CAGR maybe up to 2031 or '32, if I'm not mistaken. But I guess, irrespective of that exact number, do you have a sense kind of given your global exposure there of relative end market breakdown of that growth? And I guess, maybe better put, are there geographic considerations for expansion of the market that you think you'd be maybe better positioned to capitalize on, just especially given your strength in APAC. Just kind of wondering how you're thinking about that overall. Thanks, guys.

Yes, Brendan, this is Bill. We've observed steady double-digit growth in the APAC market regarding our revenues. We may have outperformed the market slightly, especially due to our growth in sorters and the Aurora franchise. Our impression is that there is respectable growth in the mid-single to mid-upper single digits in that region. Europe appears to be the slowest market for us, and the U.S. is in between. We believe we've outperformed the overall market in the U.S. and EMEA. It’s challenging to accurately gauge the market conditions in those areas, as we've noted some negative growth from competitors, but it's difficult to draw conclusions. Wenbin, do you have any additional insights?

No, I think that summarizes it well.

I believe the market growth rates we've experienced in the past couple of years have generally fallen short of most estimates for five-year growth in the flow cytometry sector, which are projected to be in the high single digits globally. We have been temporarily below that expectation for the last few years, but we anticipate a rebound.

From Piper Sandler. Our next question comes from the line of David Westenberg. Please go ahead.

This is Skye on for Dave. Thanks for taking the question. Just to start off, what was the end of year growth acceleration, what was that driven by? Was it primarily academic budget cycles? Or are you seeing a recovery in pharma spending? And how should we think about budgets for 2026?

We observed an improving environment across each quarter of 2025. The first quarter experienced a decline of 8% in revenue growth, but we saw a stabilization with a decrease of 2% in Q2, an increase of 2% in Q3, and then an increase of 8% in Q4. This improvement was influenced by a normalization in the academic and government spending market, along with some catch-up disbursements from the NIH and deferred spending from earlier in the year. Additionally, there was a favorable currency impact in EMEA. Considering these factors, we believe the uncertainties that affected the markets in the first part of 2025, especially in the first quarter, have diminished. We are witnessing a notably strong academic and government quarter in Q4, which reflects a combination of improved sentiment and some catch-up spending. We expect this positive trend to continue, which is reflected in our guidance.

Yes. Globally, academic and government sectors have done well in Q4.

We saw 5% growth in academic and government for the full year and 9% in the second half. And that's across both our product and service businesses. So that second half growth is obviously pretty solid.

Very helpful. And just lastly, what was the mix in 2025 between new customer acquisitions versus existing customers maybe expanding their capacity? And do you have any idea where you might see this mix for 2026?

Yes. We don't really break out those statistics just to say it's a combination of both. We have a lot of customers who have purchased multiple systems and continue to prefer our technology. Pharma companies, as we've indicated in the past, once they make a technology choice, they tend to stick with it. But then we're also seeing conversions from competitor systems.

From Stephens. Our next question comes from the line of Mason Carrico.

This is Ben on for Mason. How are you thinking about maybe your commercial investments in 2026? Are you comfortable with the size of the sales teams today? And is there anywhere you're looking to invest in the next year?

Yes. Overall, as you can see, we have been focused on high end of the market segment and represented by the products like Aurora EVO and Aurora Cell Sorter, which grew double digits last year and in Q4. And on the commercial side, clearly, and we are reviewing and the segment, we are clearly weak, and we are going to continue to invest in those segments to drive the future revenue growth.

Yes. We have also made investments in our reagent sales force as well. So the commercial side will continue to be an area of focus for investment.

Got it. And then what's your willingness to be flexible on pricing this year to help drive instrument placements?

So Cytek, pricing is always influenced by the market, and our cost structure is very competitive, allowing us to handle any situations as they arise.

Our next question comes from Andrew Cooper with Raymond James. Please go ahead.

Maybe just one, there was a comment or a couple of comments there about some pent-up demand helping 4Q. Can you just give a sense for the magnitude of what you feel like was sort of makeup volume from maybe earlier in the year or the last few years versus what you view as sort of that steady-state growth trajectory of the business as you think about where it sits today in the current end market?

Yes. That's a hard one to estimate. I think if you look at our total academic and government revenues, which are publicly disclosed, starting with fourth quarter of last year, we were $21 million and $17 million, $22 million, $18 million and then $28 million in Q4. So we had a significant jump there, as I said, a lot of that is attributable to a better environment, but it's also possible that some of those weaker numbers in early 2025 were, in fact, just deferments of money that got spent later in the year. It's really impossible to sort of parse it out. You'd have to do a customer-by-customer survey and dive into what their intentions were. And obviously, we don't do that. I think pharma segment is much more stable. And there, we had pretty stable revenue between Q3 and Q4 was basically the same.

Sure. I'm considering the guidance in light of your comments. You achieved around 5% organic growth and mentioned that the market seems to be improving and stabilizing. You projected growth of 2% to 5% for the year. What factors in the end market lead you to believe that 2% is the appropriate figure instead of 5%? Also, what conditions would push you beyond that, assuming the outlook is better for most of 2026 compared to 2025?

We believe that our guidance reflects anticipated strong growth in service and reagents. Service growth is driven by our expanding installed base, while reagents are starting from a small base and growing rapidly. We expect flat to modest growth in instruments and have included a range of contingencies to address uncertainties, particularly given the unexpected challenges we faced last year. This allows us to be prepared for similar situations. At the high end of our range, we would see less need for contingency, indicating improved performance in the instrument sector.

And with no further questions in queue, this does conclude our conference call for today. You may now disconnect.