Welcome to Omniab Incorporated's first Port Quarter 2025 financial results and business update conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to Kurt Gestafsson, Omniab Incorporated's Chief Financial Officer. You may begin. Thank you.

Thank you, operator, and good afternoon to everyone. Thanks for joining our fourth quarter and full year 2025 financial results conference call. There are slides to accompany today's prepared remarks, and they're available in the investors section of our website at omniab.com. Before we begin, I'd like to remind listeners that comments made during this call by Omniab's management will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from any anticipated results. These forward-looking statements are qualified by the cautionary statements contained in today's press release and RSEC filings. Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, today, March 4, 2026. Except as required by law, OmniAB undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Joining me this afternoon is Matt Foer, OmniAB's President and CEO. Matt is going to cover some business highlights and I'll cover some financial information and then we'll be opening the call up for questions. And with that, let me turn the call over to Matt.

Thanks, Kurt. Good afternoon, everyone, and thanks for joining our call. I'll start now on slide number four. Our business built some nice momentum in 2025 that we sustained throughout the year, specifically related to broadening both our roster of partners and the number of active programs enabled by our technologies. By year end, we're happy to report that we had 107 partners who are running 407 active programs. And as our partner pipeline advances, there are certain later stage programs that are now coming into focus with the potential to drive meaningful milestone revenue and create value over time, headed toward the generation of significant future recurring royalty revenue streams. On the innovation front, we introduced Omni-Ultra at the Antibody Engineering Conference down in San Diego in mid-December. OmniUltra is the industry's first and only transgenic chicken platform to express ultra-long CDRH3s on a human antibody framework. We see OmniUltra as an important new growth driver that can help us gain additional partners, generate new program starts, create incremental near-term revenue opportunities, and extend our reach into peptide-focused discovery applications. Additionally, we're building a strong foundation for our exploration platform, which brings our high-throughput single B-cell screening capabilities directly into our partners' We think exploration is very well positioned for significant growth with an expanding pipeline of high-quality prospects and increasing engagement as more partners are actively evaluating the platform for use in their labs. And we expect exploration to be additive to the business and to contribute to our growth. And I note, with the growth in our base of partners and our partner program portfolio, it's becoming easier to highlight that our differentiated platforms and business are highly scalable, allowing us to add new programs while maintaining operating efficiency, positioning OmniAB on a sustainable path to future growth. And as Kurt will describe in his section in a bit, we're on a trajectory to positive cash flow. Moving to our key business metrics, starting on slide number five. As I mentioned, at year end, we had 107 active partners, reflecting a continued growth and diversification of our business from that perspective. During Q4, we executed new license agreements with the Dana-Farber Cancer Institute, Mabtherix Biosciences, which is a newly formed GV between Aeromark Partners and Viking Global Investors, and with two global big pharma companies. The partner mix across discovery stage commercials and academics continues to evolve and has remained relatively constant percentage-wise. The majority of our partners are headquartered here in the U.S., and the remainder are primarily in Europe and in Asia. We continue to broaden and diversify our partner base, which I think demonstrates consistent, strong execution by our business development and scientific teams. 2025 was an especially strong year for us in terms of partner additions. I also note that we're proud of the strength of our partners as well, which I think says a lot about the quality of our technologies. Eight of the 10 largest pharma companies in the world are active partners of OmniApp. Now on to slide number six, you'll see our active programs metrics. We exited 2025 with 407 active programs, representing a net increase of 44 programs during the year. We saw 84 program additions in 2025 with a significant share of additions originating from our newer technology offerings. Our number of program additions in 2025 was substantially higher than recent years and more than 20% higher than 2024. Now, attrition is obviously a natural and expected part of drug discovery and development, and I note that we had 40 program terminations during the year, consistent with the normal ebb and flow we expect as partners adjust portfolios and budgets and adjust technical priorities. And lastly, and I think it's important to note here, that over 98% of our active programs have contracted future economics to OmniApp. We have over $3 billion in total contracted milestone payments for active antibody programs and an average royalty rate of 3.4% across our portfolio. Slide 7 provides another look at our active programs and shows the strong advancement activity we saw across our partner pipeline throughout 2025. The figure here on this slide encompasses our entire partner program pipeline. And as you can see on the left side of this pyramid graphic. During the year, we added the 84 new programs I just referenced, demonstrating the continued strength of our technology platforms. And again, this was a very strong year from that perspective and substantially higher than recent years. In terms of active program progression, we had 25 advancement or progression events in 2025. 16 programs advanced from discovery into preclinical development, which reflects our partner's progress and the identification of promising therapeutic candidates to take forward towards human trials. We also saw some healthy advancement further in the development process. Four programs moved from preclinical into Phase I clinical trials, and a couple of programs advanced into each of the clinical phases thereafter. And notably, one program reached the registration stage during 2025. This slide shows each advancement event, and I note that a couple of programs advance through more than one level or stage during the year. On attrition, which is depicted on the right side of this pyramid graphic, we had the 40 program terminations across various stages and four program regression events during Now, program regression is far less common, but does happen from time to time in a portfolio of active programs that has grown to the level that ours has in recent years.

We see the level of attrition shown here is consistent with the normal dynamics of drug development.

What's particularly encouraging and exciting are the 25 total program advancement events we saw as programs move from one development stage to the next. This progression demonstrates that OmniAb-enabled therapeutics are continuing to perform well for our partners in development and in the clinic, and are moving closer to potential commercialization, which supports our milestone and royalty revenue opportunity over time, and increases the value of the individual programs to our stakeholders. Slide eight shows the growth in the post-discovery stage programs over recent years. This, again, I think demonstrates the value that our technologies bring to our partners, and I note both the overall growth and the progression into the preclinical stage over recent years. Slide nine shows the number of active clinical programs and approved products, which totaled 32 at the end of Q4. These numbers are net of attrition and reflect new clinical entrants, as well as attrition and a regression event during the year. The fourth quarter saw a very important milestone with the first OmniDAB-derived program advancing into human clinical testing. This program entered human clinical trials less than two years from when we introduced the OmniDAB single domain discovery platform. So having it generate a program that reached the clinic that quickly underscores both the technology's traction with our partners and its potential to drive future value for our stakeholders. We anticipate the potential for multiple new entries into clinical development for novel OmniAB-derived programs this year, including additional OmniDAB programs. We look forward to the continued progression of these active clinical programs, which have over $350 million in remaining contracted milestone payments to us. Turning now to slide 10, here we're highlighting and only listing our active clinical and commercial stage partner pipeline programs that are active and that carry remaining downstream economics to OmniApp. The placement of each program in this graphic is based on its most advanced stage in any geography or indication. We found this figure can be a helpful visual for investors who follow some of our more visible partner programs. Turning now to slide 11, I want to highlight a few recent updates for partner programs that are leveraging our technologies. Immunivant continues to make what we see as strong progress and report clinical momentum in the anti-FCRN space across a range of important indications with major unmet medical needs. Their next generation candidate, IMVT-1402, has a potentially registrational trial in difficult-to-treat rheumatoid arthritis that's fully enrolled with top-line data expected in the second half of this year. Top-line data from a proof-of-concept trial in lupus are also expected in the second half of this year. IMVT-1402 development is progressing across a range of indications with potentially registrational trials in Graves' disease, myasthenia gravis, CIDP, and Sojourn's disease all remaining on track, and with top-line data for Graves' disease and myasthenia gravis expected in 2027. Immunivan also anticipates sharing top-line data from its two Phase III studies evaluating batiklimab as a potential treatment for active, moderate to severe thyroid eye disease in the first half of this year. In addition, Hanol reported ongoing preparations for an NDA submission in Japan for Bataclimab as a treatment for myasthenia gravis. Moving across to the center of the slide here, at the time of the J.P. Morgan conference in January, TEVA announced a funding agreement with Royalty Pharma of up to $500 million to accelerate the clinical development of their anti-IL-15 antibody, TEV-408, specifically for vitiligo. Top-line results from the Phase 1B trial in that indication are expected in the first half of this year, and top-line results of a Phase 2A trial evaluating 408 for celiac disease are expected in the second half of this year. With recent developments and disclosures, this is an asset and a program that is rightfully gaining more attention. Lastly, Merck KGA indicated that based on Phase I data, it plans to advance M9140 directly to Phase III trials in metastatic colorectal cancer. This compound is a novel anti-CKM-V antibody drug conjugate with a topoisomerase I inhibitor payload. It's been disclosed that the Phase III study is anticipated to start in the first half of this year, which represents a pretty significant acceleration of the program's development. On slide number 12, we show some of the upcoming events that I just mentioned. 2026 is positioned to be a fantastic year for potential value-creating events. This calendar of near-term events is the strongest in recent memory. And in addition to the data and regulatory events highlighted here, we also expect new Phase 1, Phase 2, and Phase 3 trial initiations this year. We'll talk more about this as we go through the year, but early views are that 2027 is also shaping up to be a year that will have some important events, including for some of the programs that I mentioned on the prior slide. Turning to slide 13, I'd like to take a moment to highlight our two most recent technology launches, which we believe position us for substantial growth, while reflecting our commitment to innovation, which we think differentiates OmniAb in the eyes of our partners. OmniUltra is the first and only transgenic chicken producing antibodies with ultra-long CDRH3s, which is a structural feature of antibodies typically found in cows. These ultra-long CDRH3s are designed to reach binding pockets not accessible with other antibodies or modalities, potentially unveiling new therapeutic opportunities. What's particularly exciting about Omni-Ultra is the potential ability of these ultra-long CDRH3s to create novel picobodies. At roughly one-third the size of a nanobody, picobodies are the smallest functional antibody fragment and have a range of potential uses, including as building blocks for multispecifics, as binders for CAR-T, and as radiopharmaceutical therapies, as well as in vivo-generated peptides. Omni-Ultra not only expands our antibody discovery capabilities, but it also creates a meaningful entry point into the peptide therapeutic space. As I think almost everyone knows by now, peptide therapeutics have experienced substantial growth in industry attention and investment, driven in large part by the success of the GLP-1s over the last couple of years. Moving to the right panel on this slide, last May, we launched our Exploration Partner Access Program. Exploration is our proprietary, innovative, high-throughput, single-beastable screening platform that leverages machine learning and artificial intelligence. The Exploration platform includes a competitively priced instrument and proprietary single-use consumables, as well as annual software subscriptions and maintenance contracts. As such, it has the potential for multiple revenue streams. Deployed instruments are performing extremely well for partners, and we're seeing strong continued demand for both on-site and virtual demos. Together, Omni Ultra and Exploration represent important new engines that broaden our technology offering, expand our addressable markets, and strengthen our competitive position in the discovery platform space. And with that, let me now turn the call over to Kurt for a discussion of our financial results.

Thank you, Matt. On slide 15, I'll start with the review of revenue. Total revenue for the fourth quarter of 2025 was $8.4 million compared with $10.8 million in the same period in 2024. The decrease was primarily driven by a decline in licensed revenue, which was partially offset by an increase in milestone revenue. Royalty revenue increased, but this was due to an adjustment in the prior year period to reconcile royalties to actual product sales. And we also saw a small contribution from exploration in the fourth quarter. Slide 16 shows our costs and operating expenses for the fourth quarter of 2025. As Matt mentioned, even with our growing program portfolio, we have a scalable platform that has allowed us to be very disciplined with our cost structure. As you can see from the chart, our operating expenses in the fourth quarter decreased to $24.1 million from $26.7 million. Most of this decrease was due to lower personnel costs, but we also saw lower outside service costs primarily related to reduced spend for our legacy small molecule ion channel programs. Q4 2025 also included a non-cash impairment charge of $3.9 million, primarily related to certain small molecule ion channel property and equipment. Q4 2024 had a similar size write-off associated with intangibles. Turning to slide 17, I'll focus on the bottom part of the P&L here and make just a few comments. If you focus on the tax line, as we previously guided for taxes, we record a full valuation allowance against the income tax benefit associated with our net loss, which is why our effective tax rate is close to 0%. Our net loss for the fourth quarter was $14.2 million, or $0.11 per share, compared with a net loss of $13.1 million, or $0.12 per share, in the prior year period. On slide 18, for the full year 2025, revenue was $18.7 million versus $26.4 million in 2024. The difference related to both a decline in license revenue and milestone revenue. Service revenue decreased as a result of the completion of certain small molecule ion channel programs, and these declines were partially offset by approximately $800,000 of exploration revenue as a result of the launch of our Exploration Partner Access Program. On slide 19, we have our operating expense for the full year. Operating expense in 2025 decreased to $87.6 million from $100.9 million last year. Our R&D expense for the year was $47.8 million, down from $55.1 million in 2024 due to lower personnel costs and stock-based comp and external expenses. As I mentioned in Q4 of 2025, there was also a non-cash impairment charge of $3.9 million related to legacy small molecule ion channel assets. G&A was $29.2 million in 2025 compared with $30.7 million in 2024, primarily due to lower legal fees and stock-based compensation. Moving to slide 20, which shows our P&L for the full year 2025 versus 2024, I'll once again focus on the bottom line here, the net loss was $64.8 million or $0.57 per share compared with the net loss of $62 million or $0.61 per share in 2024. Excluding the non-cash impairment charge we took in the fourth quarter, earnings per share in 2025 would have been $0.54. Slide 21 shows the company's P&L for the year broken out by quarter. As we've mentioned previously, and you can see in this table, our revenue is lumpy as much of the revenue comes in from the achievement of milestones. And one other thing I wanted to point out here is that you'll see a general trend of declining R&D and G&A expense, obviously excluding the impairment charge we took in the fourth quarter. In 2025, we implemented workforce reductions of 22 employees, which resulted in savings in 2025 and going forward. On slide 22, we've got the balance sheet as of December 31st of 2025 and 2024. We ended the year with $54 million in cash, cash equivalents, and short-term investments. You also see here the normal reductions to goodwill and intangible assets. These intangible assets relate to prior corporate and technology acquisitions, which are amortized over time. property plant equipment is also lowered due to normal depreciation as well as the non-cash impairment charge we took in the fourth quarter on slide 23 we've got our financial guidance for 2026 the revenue guidance is based on information that our partners have disclosed to us as well as information they have disclosed publicly about their programs and based on this information we expect revenue in 2026 to be in the range of $25 to $30 million. We expect operating expense to be in the range of $85 million as we continue to realize efficiencies in the business. Cash operating expense is expected to be in the range of $50 to $55 million. We define cash operating expense as gap operating expense, less stock-based compensation, depreciation, and the amortization of intangibles. We expect the combination of these non-cash items to be about $30 million in 2026. In addition, the company expects to end the year with cash balance in the range of $30 to $35 million. And just as in 2025, the 2026 full-year effective tax rate is expected to be approximately 0% due to the valuation it allows. Turning to slide 24, in addition to providing 2026 guidance, we wanted to provide some thoughts on our longer-term financial outlook. The financial side of our business model is one that is highly scalable. As we look out into the future, our revenue is expected to transition from more milestone-driven to more royalty-driven. That being said, we've got over $3 billion of contracted milestones in our existing antibody programs, and $350 million of that is for programs that are already in the clinic. The average royalty across our antibody portfolio is approximately 3.4 percent. These types of revenue streams don't have corresponding cost of goods or selling costs. We've also been realizing efficiencies in our operating costs in recent years. We have a focused business development team dedicated to bringing in new partners while most of our R&D costs relate to maintaining our animal colonies with a small amount directed towards new technology development. This creates a highly leverageable business. As you can see from these charts, we have and will continue to control operating costs to capture that leverage that is built into our business model. Our maturing portfolio programs are expected to drive revenue higher, Combined with tight control of our operating expenses, we are driving our cash use lower. And this puts us on a trajectory to being cash flow positive. And with that, I'd like to open up the call for questions. Operator?

Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press store, followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. If you would like to withdraw from the polling process, please press store, then the number two. If you are using eSpeaker phone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Puneet Soda from Leering. Please go ahead.

Yeah, hi guys, Matt, and thanks for taking the questions here. First one on the partner programs, You know, given the sort of the backdrop of the markets fundraising activity that happened in the second half last year and is still is ongoing, you know, on the clinical assets, just wondering if you were seeing any effect from that and how should we think about the new program's growth this year despite the strong 2025 that you had. So maybe I know it's always hard to sort of outline that, but just wondering how are you thinking about the new program's growth this year and any feedback on the business development side?

Yeah, yeah. Thanks, Puneet. This is Matt. So yeah, 2025, we observed really nice momentum in program additions and also a really strong year in terms of partner ads as well. We noticed a shift beginning uh last year as you know as as i think the industry started to get some more winded in sales we saw partners both existing and new partners initiating new programs many of those were attracted to us because of our our newer technologies some of the technologies we had launched that being omnidab uh the year the year prior or uh the the prospect of omni ultra coming which we launched in mid-December. So we feel like we're very well positioned for this year with coming on the tail end of new technology launches and are obviously really pleased to see partners actively progressing, looking at, you know, accelerating development and that sort of thing. So we feel very good about that element as we look forward.

Got it. And then on the, you know, on exploration, nice to see some revenue there. I don't know if you can quantify it, but maybe for the full, I would love to know if you have a number in mind for the full year, what sort of growth you can see on that platform. It's a nice addition of revenue on top of the core animal models and programs that program growth that you're seeing. And then also wondering if, you know, if you can provide anything on the pull-through side of the exploration.

Yeah, Pruneet, I'll give a little color there. Obviously, we launched exploration mid-year last year with our partner access program, highlighted it at the PEGS conference, and sold an instrument right after that. Obviously, deployed instruments now are performing extremely well for partners. Acceleration obviously has the potential to contribute revenue in a variety of ways, not only from instrument sales, but also from the single-use consumables, which are at a very nice high margin, as well as subscriptions and maintenance contracts. The flow of interest is very strong. It's with what I'll call our highest tier of partners. These are ones who are obviously doing a lot of discovery work and I think are attracted to exploration because of its high throughput and its ease of use, the ability to do multiple runs in a day, and the ability to generate huge amounts of data, which I think is very well-timed for some of the interests of the industry. So, yeah, we do expect it will be contributing this year. We're excited about that. We've not broken down the various parts of RETO in the guidance, but we do see significant growth for exploration and contribution this year.

Okay. All right. Thank you.

Your next question comes from the line of Mike King from Rodman and Renshaw. Please go ahead.

Hey, guys. Thanks for taking the questions. First is, you know, it's nice to see you guys are capital light and keeping the expenses under control, but as a valuation metric, it would seem to me to be more important for you guys to be adding programs and advancing things in the pipeline. So I'm just wondering how sacrosanct the cash flow neutrality or positivity is relative to additional investments that you might want to make and to generate additional partnerships.

Yeah, good question. I mean, we are obviously building this business to be differentiated from the perspective of technologies that we know the industry needs, right? But to do that in a really efficient way that benefits our shareholders and our stakeholders. We sit in a really, I'll say, envious and unique position in the industry, right, with 107 partners, you know, over 407 programs that partners are progressing through various stages of development gives us a really valuable perspective on the industry, right? We can see, we understand the targets that are of most interest to the biggest and most valuable pharma companies in the world, right? And that informs kind of how we invest in our technologies. It informs kind of the work that we do and how we work with the partners. And I think you're seeing the benefit of that in many of our metrics, right? So for us to add incremental partnerships, we can do that quite efficiently in the model that we have. We talk a lot about the innovations that we choose to invest in, and we do it really with that knowledge of not only where the industry is right now from the perspective of discovery and innovation, but knowing where it's heading as well, right? And that's what informed our investments over past years in things like our OmniDAB single domain technology. And then more recently, you know, with mid-December launch of OmniUltra, which is, you know, it sounds Buck Rogers-y, but it's a chicken that makes cow-like antibodies with fully human sequences. That was something that was, you know, we knew there'd be demand there based on our dialogue with partners. So for us, I think we can do that very efficiently. We think that benefits all of our stakeholders, and that's where we're going to continue to focus.

Okay. And then just real quick follow-up, jumping to share count in the third and fourth quarter, what can we attribute that to?

Yeah, thanks, Mike. We did raise some capital, And so that raising capital increased the share count during that period of time. Thank you.

Thanks, Mike.

Your next question is from the line of Matt Hewitt from Craig Helen Capital Group. Please go ahead.

Good afternoon. Thanks for taking the questions. Maybe to dig in a little bit more on the exploration opportunity, sounds like you're seeing strong demand. What was the number of systems that were placed or deployed exiting this past year? and given the pipeline, where could that go in 26?

Yeah, yeah, thanks. Thanks, Matt. Yeah, so a quick answer to the first part of the question is two. Instruments deployed as of the end of 2025. And as we look to this year, as I said, we expect growth out of exploration. We're excited about the flow of interest from our highest tier partners. These are obviously larger capital purchases for many companies, so there can be longer sales cycles, which we fully expected when we launched the technology. So they go through budget and capital approvals, et cetera. But the reception is quite positive. It's keeping our team very busy, which is great. And the interest in demos and the performance in those demos has really been fantastic. So hopefully that gives you the color you need.

Yeah, no, that's great. And then you talked about, Kurt, I think you were talking about this a little bit during your prepared remarks as far as your trajectory towards a cash flow break-even. Given the pipeline, and Matt, you spoke to this as well, given the pipeline of opportunities, things progressing through the channel or through the clinic, I should say, this year and into next year, when do you think that you could hit break even? Is that something that you see potentially exiting 27, maybe a little bit longer? Just trying to get a sense for, you know, time frame as, you know, when you could get to that level.

Yeah, thanks, Pat. Great question. You know, our future revenue is largely based on clinical and regulatory advancements by our partners for our partner programs. And while we're not given a precise date for when we achieve breakeven, the growing and maturing portfolio of our partner programs gives us confidence that we are on the right path and that our trajectory can take us there. So we see it coming, but we can't give you an exact date right now, but we do see it coming.

Got it.

Your next question comes from the line of Joe Van Guinness from H.C. Wainwright. Please go ahead.

Hey, guys. Thanks for taking the question. So on the flip side for exploration, obviously, we see the opportunities there. So just curious, how would you describe – I mean, it sounded like you placed two machines in 25, but looking forward, your manufacturing needs and investment on your end and impact on op expenses as the program gets larger?

Yeah, Joe, good question. You know, this is an instrument that we use here, you know, for our own research. So we have a team of folks that understands the instrument, is using it all of the time. And so there's not a large incremental investment, you know, in terms of staff that we need to make to go do this. This is a program that we've made available to our partners. For the most part, instruments would be built kind of to suit, if you will, or built for these folks when they order one. And so there's not even a large sort of investment in inventory, if you will, to go do that. So we're keeping this really lean right now as we want to make sure that this is something that, you know, is accretive to the business as we possibly can make it going forward.

Got it. Thank you.

Your next question comes from the line of Brandon Smith from TD Common. Please go ahead.

Hey, this is Jacqueline. I'm for Brandon. Thanks for taking the question. I'd like to kick it off with Ultra. How has the initial response from partners been, and have you seen the beginning of that rampant demand that you kind of called out last quarter?

Yeah. Jackie, thanks. The Ultra launch is going fantastically well. I've been really pleased with the reception. Obviously, it's still very early days. We just launched it in mid-December, but we did really a massive amount of validation work around Ultra before we launched it. The The presentations that were given at the AET conference in December highlighted a broad array of therapeutic targets that we'd assessed at the time of launch. We also had three partner programs already progressing at that time. That number has increased, and we expect it will continue to increase. So we're seeing really strong engagement. The technology is performing extremely well. And so we feel real good about how it will impact the business going forward.

That's awesome. Are you seeing any, like, specific traction amongst other modalities that you would call out of interest?

Yeah. I mean, I think there's been a general trend in the industry, and I'll say smaller is better, looking for smaller binding units, if you will, That can be strung together in multispecifics. There's obviously been a big growing opportunity in the radio pharma space. That's something that the industry has observed. And then, of course, we've opened up, you know, totally new opportunities and a completely new call file in the peptide space, right? So, you know, peptides are an area of growing and increasing interest. You know, there's a significant growth in that space and really opens up our call file, if you will, to, you know, well over 130 companies that are new potential targets for us. So for all those reasons, I think we're excited about it. Again, early days, but we're building some nice momentum and we're excited about it.

Totally. I'm going to be that guy. I'm going to sit one more question in. But for your fiscal year 26 rev guide, you know, it's kind of hinting at a return to 2024 levels. Would it be safe to say you're seeing early signs of recovery in the market? And what kind of visibility do you have into your partner's spend expectations that could inform that outlook?

Yeah, I think, you know, most of a big chunk of our revenue is milestone based. And so, as we talked about it, on a quarterly basis, you know, the revenue number is lumpy. It actually is for years as well. So, it sort of is just really a function of what, you know, kind of clinical or regulatory events are going to be happening. And as we sort of project forward into 2026, based on what partners have said, you know, we project out what those milestones might be. And so I'm not sure it's really sort of a kind of whether the industry or the overall market is what's driving that as much as us taking a look at the very specific events that are happening with the programs that we've got and the events that are sort of coming up for 2026. That's really more the driver of it.

Great. That's super helpful. Thank you.

Sure.

Your next question comes from the line of Kripa Devarakonda from Tourist. Please go ahead.

Hi, this is Anna Anifakripa. Thanks so much for taking our question. Congrats on the year. One question on exploration. Could you kind of qualitatively describe how the interest in exploration is shaping up in terms of interest from any new partners or kind of strengthening the existing partner relationship? Thanks.

Yeah, great question. The answer is both. I mentioned that of our existing partners, the ones that obviously have been quick engagers in evaluating exploration with strong interest have been that highest tier of partners, right? These are the ones that are doing a lot of antibody discovery work, have a thirst for more data, are attracted to the high throughput and ease of use of the instrument. it is also attracting others as well who are not current partners of our repertoire generation discovery technology. So that's one of the things I reference when I generally say I think there are benefits and advantages that exploration creates for the business is not only deepening those relationships with existing partners and building structures that allow us to create value earlier in a product's life cycle or a program's life cycle or the relationship, but also attracting others as well who we can also bring in as a more broader partner in the process. So I think that is another benefit of exploration.

Great, thanks. And on Omni-Ultra, are there any milestones we should expect from Omni-Ultra in 2026?

Yeah, I obviously will expect to continue to be adding partners and programs with Omni-Ultra. That's going to be our initial focus as we launch the technology. As those programs obviously go through development and graduate to later stages of development, we expect that will happen in due time but the initial is going to be uh driving new partnerships and and new programs and and leveraging the technology in that way great thanks so much thank you your last question comes from the line of stephen d wiley from stifle please go ahead yeah good afternoon thanks for taking the question um just actually had a question about um a footnote on slide 24 where I think for programs with tiered royalties, you're making some kind of sales assumption

and using a blended royalty calculation. Have you said or can you speak to what proportion of the programs that are active have either a tiered or fixed royalty structure?

That's a good question, Steve. I don't think we've given that number out before. It's more than a handful, but I wouldn't say it's a majority. I don't know, Matt.

Yeah, more than a handful that have tiered. Majority of our deals are flat royalties. There are some instances in which they are tiered, but the majority are a straight royalty.

Got it. And then just also curious where you think that average, which I guess it's 3.4% royalty rate could trend to over time and whether you're trying to command a higher royalty rate on some of the newer technology offerings like OmniTab and OmniUltra.

Yeah, I think for discovery technologies, Steve, there's always a dynamic there of how far you can push, right, on royalties. Obviously, the level of innovation allows us to drive better economics more generally, but those economics can be an interplay between upfront payments, service payments, milestones that are paid along the way, and royalties. So it really depends in many instances on the negotiating dynamic, the soft points or the points of interest of the partner. But I will say that more innovative technologies do drive more value for our shareholders. And that's one of the reasons why we've launched new technologies like OmniUltra, like OmniDAB. but that kind of gives you a little color on the dynamic.

Thanks for taking the question.

Thanks, Steve.

Thanks, Steve.

There are no further questions at this time. I would now like to turn the call back to Matt Ford for closing comments. Sir, please go ahead.

Great, thanks. I'd like to thank everyone for joining today's call and for your questions and engagement. We look forward to discussing our first quarter financial results in a few months. in the meantime. We'll be participating at the LIRINC Global Healthcare Conference, which is next week in Miami. So we hope to see some of you there. We also expect to be on the road likely in the spring with NDRs and the like. So thanks again and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.