Earnings Call Transcript
Quantum-Si Inc (QSI)
Earnings Call Transcript - QSI Q4 2025
Operator, Operator
Thank you for standing by, and welcome to the Quantum-Si Fourth Quarter and Year-End 2025 Earnings Call. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Lindsay Risa. Please go ahead.
Risa Lindsay, Host
Good afternoon, everyone, and thank you for joining us. Earlier today, Quantum-Si released financial results for the fourth quarter and full year ended December 31, 2025. A copy of the press release is available on the company's website. Joining me today are Jeff Hawkins, our President and Chief Executive Officer; as well as Jeff Keyes, our Chief Financial Officer. Before we begin, I would like to remind you that management will be making certain forward-looking statements within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements of our press release. For a more complete list and description of risk factors, please see the company's filings made with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the live broadcast date today, March 3, 2026. Except as required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements. During this call, we will also be referring to certain financial measures that are not prepared in accordance with U.S. generally accepted accounting principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the press release filed earlier today. With that, let me turn the call over to Jeff Hawkins.
Jeffrey Hawkins, CEO
Good afternoon, and thank you for joining us. On today's call, we will provide a business update and review our operating results for the fourth quarter and full year of 2025 and provide an outlook for 2026. After that, we will open the call for questions. Before diving into specific updates, I want to first frame at a high level how we are thinking about 2026. We expect that 2026 will be a transition year with revenue primarily driven by consumable utilization from our installed base and some new placements, very modest new capital sales and a laser focus on Proteus development and preparing the market for a strong commercial ramp in 2027 and beyond. As a reminder, our 3 corporate priorities for 2025 are as follows: to accelerate commercial adoption, to deliver on our innovation road map and to preserve our financial strength. Our first corporate priority was to accelerate commercial adoption. Our revenue for the fourth quarter was $451,000 as top line results continued to be impacted by the capital sales headwinds in the market. As we look to 2026, we believe that our placement program will continue to allow us to engage with new customers and capture consumable revenue, but that capital sales of our first-generation Platinum Pro instrument will be very limited, given the deliberate focus on market preparation for the Proteus launch at the end of 2026. We will provide more color on this topic throughout the call. As a reminder, during the second quarter of 2025, we announced the launch of an expanded set of instrument acquisition options that allow customers to have our instrument in their lab and purchase and run consumables without having to find the capital dollars to acquire the instrument upfront. By all measures, this program has been a success, and we view it as a key market development program to continue with during 2026 as we build momentum into the Proteus launch. Since launching the program, we have secured 17 new customers spanning academic labs, pharma and biotech. It has allowed us to access key opinion leaders in some of our direct markets that we had not had access to prior to this program. We view these labs as strong long-term prospects for Proteus, and we believe that being able to engage with them now and have their laboratory staff get hands-on experience with our technology will improve the prospects of them adopting Proteus once launched. In addition to capturing consumable revenue from these 17 customers, we are also building a strong publication pipeline that will help to further demonstrate the value of our technology across a range of applications. Turning now to scientific affairs. As we have previously shared, developing a publication pipeline takes focus and effort over an extended period of time. During 2025, we had 5 manuscripts submitted for publication and built a strong pipeline of additional studies and manuscripts for future publication. The time we invested in this area in 2025 continues to yield results, and we have already seen 3 new manuscripts released via publication or preprints in the first 2 months of 2026. More important than the number of new manuscripts is the range of applications we are beginning to see emerge. One of the papers from Dr. Lowe of Stanford University showcased the potential of our technology to be applied in the field of clinical proteomics to address complex conditions like hemoglobinopathies that are not easily resolved using current technologies. The second example of a new application of our technology was captured in a manuscript from the researchers at the U.S. Naval Research Laboratory. They described a modified workflow that enabled biological sample to result in under 24 hours for rapid pathogen and toxin detection, an area that is underserved by existing technologies. We believe that these papers and others in the pipeline will continue to demonstrate that the potential opportunity for our technology extends well beyond the basic research markets that we operate in today. We believe that this is important since these new applications move us towards customers who typically have high consumable utilization rates and repeat ordering patterns. Beyond these initiatives, we continue to monitor and evaluate several partnership opportunities that may further accelerate certain components of our development activities spanning from new customer applications to sample preparation and enrichment and applications of artificial intelligence tools that could extract deeper insights from the protein sequencing data our system generates. Novel enrichment technologies for very low abundance, high-value biomarker analysis is a key area of interest for us, and we are currently exploring some promising partnership opportunities in this space. As I stated earlier, our focus in 2026 is on the development of the market for Proteus, which we expect to launch at the end of this year. This started in earnest at our October 2025 Investor and Analyst Day, where we showed data demonstrating that Proteus is surpassing our first-generation technology across all key performance metrics. While we indicated during the event that sharing the early Proteus data would likely impact Platinum Pro sales, we believed that sharing this data would allow us to more effectively engage with potential customers and channel partners about budgeting for Proteus well in advance of its launch. Based on customer and channel partner feedback to date and to continue to advance the Proteus prelaunch discussions, we decided to pull forward the announcement of our list price from the second quarter of 2026 to today. Accordingly, we announced that the list price for Proteus will be $425,000. We believe this list price strikes the appropriate balance between capturing the premium value of Proteus and the expected launch capabilities while also making the platform more accessible to a larger number of potential customers than existing technologies. Our second priority was to deliver on our innovation road map. 2025 was a successful year across all of our development programs. We launched our version 4 sequencing kit and an expanded set of 24 barcodes during the third quarter of 2025, our version 3 library prep kit in the fourth quarter of 2025, and most importantly, demonstrated sequencing on a prototype Proteus system, which exceeded our current system across all performance metrics at our November 2025 Investor and Analyst Day. We also shared our progress and plans for expanded proteome coverage and PTM analysis capabilities as well as the feasibility of a controlled cleavage chemistry, a critical piece of core technology that ensures we have a clear, executable path to our long-term goal of enabling de novo protein sequencing at scale. As we look to 2026, our full focus is on Proteus development. I am pleased to report our instrument development efforts remain on track. Our prototype systems continue to perform well and are fully deployed within our internal R&D efforts. We have also received our first fully integrated Proteus instruments and are working with our partners to continue to manufacture and deliver additional instruments to support the scale-up of our internal development work. Next, I want to provide an update on our efforts to improve proteome coverage, which spans 2 key areas: one, expanding the number and frequency at which we detect individual amino acids and two, the sequencing read length we achieved. I would like to take a few minutes to touch on both areas. First, during our November 2025 Investor and Analyst Day, we shared details about our proprietary amino acid recognizer development program. Specifically, we shared how we had recently seen a significant improvement in our performance of developing new amino acid recognizers through a combination of applying state-of-the-art artificial intelligence tools trained on our proprietary data and by scaling up the throughput of our candidate screening and selection process. At the November 2025 event, we stated that we believe that we would be able to launch Proteus with detection of 18 amino acids and would further demonstrate detection of all 20 amino acids in 2026. I am pleased to report that we are progressing ahead of expectations on both goals and expect to provide a more quantitative update on this topic in the near future. The second component to proteome coverage is sequencing read length. Prior to sequencing, customers prepare their protein sample using our library prep kit. The library prep process digests the proteins into smaller pieces called peptides and then attaches a linker that allows the peptides to bind to the nano-wells on our consumable. Based on the method of digestion our library prep kit deploys, the average length of the peptides generated is approximately 18 to 20 amino acids. As we shared at our November 2025 event, the early data on Proteus indicated that the average sequencing read length on Proteus was superior to our existing platform. This means that the number of amino acids we can sequence per peptide was more than we can with Platinum. A longer sequencing read length is important as we look to unlock certain high-value applications for customers like deep PTM analysis and profiling. I'm pleased to report that we are continuing to observe longer sequencing on Proteus, and based on continued promising results, we have dedicated some members of our R&D team to focus on maximizing sequencing read length. We look forward to providing more quantitative updates on this area in the months ahead. Finally, I want to take a moment to review our progress and forward plans with library prep. We launched our version 3 library prep kit during the fourth quarter of 2025. The version 3 kit enables customers to sequence samples with as little as 1 to 2 nanograms of protein. Overall, the version 3 kit delivered a more than 100-fold reduction in input required over our prior library prep kit. As part of that development effort, the R&D team identified some potential avenues to explore for even further reduction in input requirements. We have a small team working on technical feasibility now, and we'll have more updates to provide on our next earnings call. Our third priority was to preserve our financial strength. We believe that the data will continue to demonstrate that Proteus is not only a new architecture with greater throughput and automation but also a significant leap forward in terms of sequencing performance and application breadth. We also believe that Proteus is well positioned to be the long-term driver of commercial adoption, revenue growth and our path to profitability. We are fortunate to have a strong balance sheet that allows us to execute on this strategic plan with a focus on long-term value creation but also acknowledge that the Proteus focus in 2026 will impact top line results. We are committed to continuing to operate with a high level of fiscal discipline while ensuring the core strategic initiatives are appropriately funded to deliver on time and with the capabilities customers are asking for. I will now turn the call over to Jeff to review our financial results.
Jeffrey Keyes, CFO
Thanks, Jeff. I'll now walk through our operating results for the fourth quarter and full year 2025 and then provide our outlook for 2026. Revenue in the fourth quarter of 2025 was $451,000, consisting of revenue from our Platinum line of instruments, consumable kits and related services. Gross profit was $122,000, resulting in a gross margin of 27%. Gross margin in the quarter was primarily impacted by revenue mix with a higher proportion of consumable revenue to hardware as well as certain inventory adjustments recorded during the period. For the full year 2025, revenue was $2.4 million, gross profit was $1.2 million and gross margin was 47%. Full year gross margin benefited from a higher mix of instrument sales and a lower overall impact from inventory adjustments compared to the fourth quarter. As Jeff stated earlier, we have been impacted by capital headwinds throughout 2025, first, starting with delays in NIH funding and concern over the overall NIH budget and indirect reimbursement rates as well as general uncertainty around tariffs and putting customer capital budgets in limbo as they look to prioritize what they spend capital dollars on in an uncertain environment. Turning to expenses. GAAP total operating expenses for the fourth quarter of 2025 were $21.2 million compared to $31.3 million in the fourth quarter of 2024. Adjusted operating expenses were $18.3 million compared to $26.7 million in the prior year quarter. For the full year 2025, GAAP total operating expenses were $117.3 million compared to $110.2 million in 2024, while adjusted operating expenses were $86.3 million, down from $99 million in the prior year. The year-over-year reduction in adjusted operating expenses reflects continued cost discipline, more focused R&D activities and targeted resource allocation towards advancing the Proteus platform. Included in full year GAAP operating expenses were charges of approximately $18.7 million, primarily related to the accounting adjustment of a net termination payment and associated asset write-off from a leased facility in New Haven, Connecticut, as well as settlement and preliminary settlement of certain legacy litigation matters. Dividend and interest income was $2.2 million in the fourth quarter of 2025, consistent with the prior year quarter and $9.7 million for the full year of 2025 compared to $11.4 million in 2024. The year-over-year decrease for the full year reflects lower interest rates and changes in invested balances. As of December 31, 2025, we had $215.8 million in cash, cash equivalents and investment in marketable securities. Turning to our outlook for 2026. We are anticipating total revenue to be approximately $1 million with adjusted operating expenses of $98 million or less and total cash usage of $93 million or less. We view 2026 as a deliberate transition year for the company as we prepare for the anticipated launch of Proteus at the end of 2026. We are making intentional choices that prioritize long-term platform adoption over near-term revenue maximization. This includes embedding upgrade paths into Platinum Pro units, which has a near-term revenue impact as well as impacts of customer delayed purchases as they plan for Proteus as we continue to educate and prepare the market about the leapfrog capabilities of our next platform. From an operating expense standpoint, our guidance reflects the activities required to complete the development in support of the successful commercial launch of Proteus by the end of the year, while continuing to manage costs with discipline. Our expected cash usage also includes modest inventory build and commercial readiness efforts ahead of the launch. With $215.8 million in cash and investments at year-end, we believe we are well positioned to execute on our strategy and support operations into the second quarter of 2028. As we look past 2026, I will remind you that we have built our operating expense structure that leverages key external partners for development-related activities as we complete these activities, including launching Proteus. We have the ability to reclaim this operating expense spend to augment our cash runway or strategically redeploy some to other activities such as commercialization activities. I will reiterate what Jeff said on how we're thinking about the business in 2026 and as we move forward. Again, 2026 reflects a transition year with intentional trade-offs. We're expanding our installed base in a capital-efficient way, maintaining customer engagement and data generation, and positioning the company for the Proteus launch rather than optimizing for near-term instrument revenue. Importantly, we are executing the strategy from a position of financial strength. We have the flexibility to fund development, commercial readiness, and ongoing operations without being forced into near-term capital decisions. Finally, management and the Board remain deeply aligned with shareholders. Insider ownership remains very meaningful and recent Form 4 activity reflects routine tax-related mechanics associated with equity compensation vesting with no management team members selling shares outside of planned mandated selling for required tax withholdings. Overall, we believe we are making the right trade-offs, prioritizing long-term platform value over short-term optics and positioning Quantum-Si for what we believe will be a highly meaningful next phase of growth. With that, we're happy to take your questions.
Operator, Operator
Certainly. And our first question for today comes from the line of Scott Henry from Alliance Global Partners.
Scott Henry, Analyst
Just a couple of questions. First, what are you seeing as far as consumable trends within the installed base?
Jeffrey Hawkins, CEO
Yes, Scott. We are continuing to see customers make purchases at a steady rate. As mentioned previously, academic customers might buy consumables more sporadically, completing a set of experiments and publishing data before making their next purchase. Other market segments tend to have a more regular ordering pattern. To give you an idea, our revenue guidance for this year includes modest capital expenditures, while it also reflects an anticipated increase of over 25% in the number of consumable kits used by our customers. We are observing improved utilization. We believe that understanding how to enhance this process is crucial as we prepare for Proteus and aim to boost the utilization of that system as well.
Scott Henry, Analyst
Okay. So if I'm interpreting that correct, for 2026, in anticipation of the Proteus launch, we should really factor in very few placements with almost all the revenue coming from consumables and service revenue?
Jeffrey Hawkins, CEO
Yes, I think that's correct. A significant portion of the revenue is obviously coming from consumables or services. Regarding capital equipment, we expect a relatively modest number of Platinum Pro machines to be purchased. It's worth noting, as Jeff mentioned, that in some cases, customers may want to buy a Platinum Pro but will request a credit for a future Proteus machine. If we provide that credit, it could affect short-term revenue recognition, deferring it to when they actually purchase a Proteus. Thus, this credit component can reduce the recognized revenue in the short term.
Scott Henry, Analyst
Okay. And then I know you're not looking to give guidance into 2027. But in a bigger picture type of way, can you talk a little bit about how we should think about the launch curve for the Proteus? Would you expect early adopters to use it right away and then kind of the typical S-curve? Or just how we should think about the traction, given that you already have the Platinum on the market, so it's somewhat educated customer base. But just kind of qualitatively, how you would think about that?
Jeffrey Hawkins, CEO
Yes, I consider the customer base in a couple of distinct groups. We have current Platinum users, and many of them will likely transition to Proteus within the first year or two after launch. This will depend on the specific applications available at launch and the potential financial incentives we might offer to encourage earlier adoption. There is a significant installed base familiar with Platinum and Platinum Pro. However, early feedback indicates we're reaching new customers who previously had limited access because the applications from Platinum Pro did not meet their needs. With the capabilities being announced for Proteus, we're able to engage these prospective customers. Their adoption will probably follow a typical new technology introduction pattern, with some adopting early and others waiting to observe its performance. Additionally, our channel partners play a crucial role. We have established a global network of channel partners and believe we have tackled all major markets, although not every market may be suitable for Proteus. We have an important meeting with our channel partners this month, where we hope to identify which partners and markets present the best opportunities for Proteus. This access to various markets will be vital for us during the initial launch as our partners also work to expand their installed bases. There will always be a gradual approach to commercialization, but our commitment this year is to help you understand how we are building momentum for the launch and aim to reach that important inflection point efficiently, drawing from lessons learned during the initial access period with the Platinum machine.
Scott Henry, Analyst
Okay, great. I have just one final question for clarification. Does the $98 million guidance for operating expenses include stock compensation, or is it strictly a cash expense estimate?
Jeffry Keyes, CFO
Yes, that figure represents our adjusted operating expense number. For adjusted operating expense, we exclude stock-based compensation. We believe that on an adjusted basis, this approach provides a more reasonable perspective on operating expenses that are more cash-oriented as we look ahead.
Operator, Operator
And our next question comes from the line of Swayampakula Ramakanth from HCW.
Swayampakula Ramakanth, Analyst
With the announcement of the price point for Proteus, I'm trying to understand what that signifies. Does this imply that you have secured some preorders or letters of intent that give you the confidence to disclose the price at this early stage?
Jeffrey Hawkins, CEO
Yes. Good question, RK. We don't have any secured orders to communicate at this time. I think we're putting the price out because what we're seeing as we're out talking with customers and some of the questions we're getting from our channel partners in preparation for our meeting this month is they're looking for that price point to be able to do their capital planning. We are aware of a few grants that some customers are working on that are going to be due over the next couple of months for their sort of regular capital planning cycle. And to ensure we get incorporated in those submissions, we need to be able to provide that price. So we see this as sort of helping to continue that dialogue with customers, help them have the data they need at the time frame when their grants or their tenders, if they're located in international locations are due, they're going to need that price point. So that's why we're releasing it now is to ensure we get incorporated into those proposals and that we get incorporated at the right level in that to the extent they get funded, they've got the right amount of dollars set aside to purchase the machine.
Swayampakula Ramakanth, Analyst
Okay. Based on the recent discussions about the challenges in capital expenditure for at least 2025, as we look ahead to 2026, do you think that given this price point, people will prefer the lease purchase method, or will there still be a significant number of potential clients who might opt to buy it outright with cash?
Jeffrey Hawkins, CEO
Yes, RK. The first point to highlight is that currently, we have only provided a list price and an option to acquire Proteus through a straightforward capital purchase. We haven't offered other purchasing models for Proteus yet, although we plan to continue with those options for Platinum Pro. We are monitoring several factors. Firstly, the uncertainties surrounding the NIH seem to be improving on paper. The latest NIH budget shows only a 1% reduction compared to last year, which is less severe than initially expected. Importantly, as Jeff mentioned, the indirect overhead rates will not change in 2026, which was a significant concern for customers in 2025, as these indirects often finance new equipment. Therefore, we feel fortunate in that aspect. Proteus is likely to impact Platinum sales more significantly. However, we will benefit from a more stable NIH environment for a year before introducing Proteus to the market. We are taking careful steps in how we engage with customers, including with the list price, to get involved in grant applications and tender proposals early, ensuring that funding is ready when we launch and start delivering units in 2027 and beyond. That is our current perspective and what we are monitoring.
Swayampakula Ramakanth, Analyst
Okay. And then the last question for me is, when you're talking about trying to identify more amino acids than what you thought you would have by the time you get Proteus into the market. So are we thinking that we could be closer to 20 amino acids by the time you launch? Or I know you didn't give specifics, but I'm just trying to understand from your excitement. So where do you think we'll be heading by that time?
Jeffrey Hawkins, CEO
We are considering various aspects regarding the detection of amino acids. We believe we can launch Proteus with the ability to detect 18 amino acids and demonstrate the capability for 20 this year. When we initially communicated this, our expectation was to show all 20 by the year's end, as indicated in our Investor Relations materials. If the demonstration occurs later in the year, it could delay our delivery timeline into 2027 to allow for reagent development. However, if we make progress sooner, it may allow us to include all 20 in the Proteus kit sooner than we initially thought. We are also closely examining the combinations of amino acids and how frequently we detect them in various sequencing contexts, while considering the sequencing read length. The more protein we can sequence, the greater the potential applications, thus enhancing our ability to analyze samples for post-translational modifications and other factors. We are witnessing progress across these areas ahead of our expected timeline from our Investor and Analyst Day. We are committed to providing more quantitative milestones this year to illustrate the improvements made compared to our existing commercial kit. We are seeing positive developments across all these factors and feel optimistic about our capabilities at launch and achieving the full 20 amino acids soon after.
Operator, Operator
And our next question comes from the line of Michael King from Rodman & Renshaw.
Michael King, Analyst
Congrats on the progress with the technology. Regarding Proteus, how much overlap do you see between your existing customers and the potential customer base? Are they similar, the same, or quite different? If they are different, will your sales largely be conquest sales rather than repeat sales?
Jeffrey Hawkins, CEO
It's a good question, Michael. So we haven't really tried to quantify exactly what the overlap is. But maybe I'd speak about it a little more qualitatively. So we've talked about before our Platinum machine is in sort of a wide range of labs. So a good number of our Platinum machines, as you can sort of pick up on by looking at the publications are in what I would call a core lab, a large academic center, who's got mass spec and other technologies and a lot of sort of proteomic analysis capabilities. So a good number of our machines, both in academia, but also in pharma are in what I would call more classic proteomics core labs. Those folks are, in our view, are going to be a very good potential fit to move from the Platinum or Platinum Pro machine and into the Proteus. Some of our machines, though, because of the price point of the Platinum Pro machine are in what I would call smaller basic research laboratories, perhaps a single investigator with a fairly small laboratory staff. So some of those folks might not quite have the volume of research or the level of funding needed to move to Proteus. That said, there could be groups of, say, 2 or 3 investigators in some of those institutes that may pool funds together to purchase a Proteus. So a little harder to figure out the exact ratio of those smaller individual investigator labs converting to Proteus, but we think some of them will. Really where we're focused with some of this initial sort of transition or upgrading will be amongst those larger core labs, proteomic centers of excellence that really are pretty ideal fits and where we think that overlap between use of Platinum today and use of Proteus in the future could be a pretty high level.
Michael King, Analyst
I'm curious about the interactions you've had with clients regarding the design or conceptualization of kits. Are there a few applications that stand out as easy wins, such as kinase pockets or other validated drug targets like GPCRs, or perhaps detection technologies for biomarker work? What do you see as the top two or three applications that could benefit you at launch?
Jeffrey Hawkins, CEO
Yes, we are actively working with customers in various segments and disease areas through the presence of our Platinum machines in the market. Recently, we discussed some data from Stanford related to hemoglobinopathies, which highlights a clinical application we hadn’t initially thought of when launching Platinum. This underscores how a single amino acid change can influence diagnosis and treatment outcomes. Regarding Proteus, I view it as having a broader set of capabilities for now. We'll clarify our focus on specific disease or research areas as we approach the market. Importantly, Proteus offers significantly higher sequencing output, which enables us to work with more complex biological samples. Currently, our existing platform has limitations in this regard, but this advancement could facilitate the identification of new biomarkers in academic, pharmaceutical, and biotech settings. Post-translational modifications are a key focus for us, and while some customers have begun applying our technology in this area, it requires more effort on their part with the current tools and capabilities we offer. However, we are dedicating substantial resources to improve this. Enhancing our proteome coverage will greatly support biomarker discovery and the validation process across a significant number of samples, whether for therapeutic targets or diagnostic purposes. Lastly, we recognize that we haven't engaged much with translational labs. Most of our work has been in core or basic biology research labs focused on fundamental research. Translational labs, which aim to scale up efforts to validate biomarkers in relation to disease, diagnostic potential, or treatment responses, are areas where we see an opportunity. Although we lack extensive experience in these settings, our ability to analyze post-translational modifications and complex samples aligns well with the needs of translational labs, which typically have higher consumable usage compared to fundamental research labs.
Michael King, Analyst
Great. And then sorry, if you just indulge me one more. Just as far as the total spend is concerned, does that include or anticipate some increase in the field sales force? Are you going to be adding bodies to get out there?
Jeffry Keyes, CFO
Michael, this is Jeff Keyes. Yes. So for 2026, our total spend includes completing out the Proteus development program and augmenting our commercial team to be able to be launch ready as we get into the end of the year and into 2027. As I mentioned as well, once we're done with the development of the Proteus program, we've utilized a lot of outside spend for development activities. And once the program is concluded, we have the ability to pull a lot of that outside spend back and then either bank it for additional cash runway or redeploy it to other activities. So there's also an opportunity to redeploy to commercial activities. But as we plan for our 2026 guidance, we are fully funded from a commercialization standpoint. And obviously, that will be evaluated over the course of 2026 to make sure we have the right resources, right partners, and right deployment for the Proteus launch.
Operator, Operator
And our next question comes from the line of Kyle Mikson from Canaccord Genuity.
Kyle Mikson, Analyst
Can you provide more detail on what you’ve heard from customers that led to the decision to slow down on the Platinum side and focus entirely on Proteus? I'm curious if this feedback came from new customers attracted by Proteus or from your existing customer base.
Jeffrey Hawkins, CEO
Yes. I think, Kyle, the way to think about it is for some of the customers, it's really a question of do they deploy capital dollars today or a Platinum when the Proteus is coming. I think for those customers who see an opportunity to use the existing technology for their work today and eventually grow into the Proteus, we are taking advantage of our ability to use the placement program to get access to them. As we said in the prepared remarks, I think it's a good data point since we launched that program, we've placed 17 instruments in unique customer endpoints. So I think when the current tech fits, and it's really more about they don't want to purchase today, knowing something new is coming, we do have that placement option to work with them, get them on the technology, get them utilizing it and then convert them in the future. I did mention earlier, if someone is purchasing a Platinum machine and wants to make sure they're protected from sort of the Proteus launch and making sure they have some financial benefit of that, we're certainly prepared to extend credits to those folks. And then I think there are a third bucket of customers, which are they want to be able to do something in terms of maybe the complexity of the sample or the throughput of work that just doesn't match up well to Platinum. So Proteus will be their entry point to working with Quantum-Si. So I sort of break people into those 3 buckets, and I think many people fit in either the first one where we access them today with the placement, moving them into a Proteus in the future or they're going to be Proteus first because it really is more about aligning what they're trying to accomplish with the capabilities of that platform.
Kyle Mikson, Analyst
It's interesting because labs that would consider buying a Platinum for less than $100,000 are comfortable with this price point. I wanted to ask about the list price a bit. I know you mentioned it earlier, but the price is almost equal to the revenue you generated in the fourth quarter. There are various dynamics at play, but perhaps you can target new customers who have access to more funds or are more affluent. Overall, I'm curious about what reassures you that the price point will be appropriate given the interest in Platinum so far.
Jeffrey Hawkins, CEO
Yes. There are a couple of factors at play here. There are new customers that we can reach that we aren't able to access currently. For example, in core labs, we often serve as a complementary platform to other systems, and some of our labs consist of smaller individual investigator labs. Therefore, Proteus may not fit their price range. However, in core labs, considering our price point and capabilities, $425,000 is about average, if not on the lower end. High-end mass spectrometry machines can cost anywhere from $850,000 to over $1 million each, so we believe that $425,000 is not a barrier for core labs and higher volume sites. The key factors are the platform's capabilities and whether they address significant challenges with their existing technology or answer pressing questions that researchers seek to explore. We believe Proteus will offer these capabilities, especially concerning post-translational modifications, complex biological samples, and enhanced proteome coverage. We aim to perform tasks like antibody sequencing and analyzing variable regions, which are quite challenging without owning a $1 million mass spectrometer and the necessary infrastructure. In this context, a $425,000 price point seems very reasonable, as it reflects our value while being more accessible compared to the $1 million options. You are correct that smaller individual investigators with limited funding may not be the ideal target. However, there could be instances where two or three such investigators collaborate to pool resources to purchase a machine and access this capability. This is not something we've experienced with our previous products but is seen across the industry, especially in spatial and other fields, where smaller investigators team up to acquire technologies that may not be available in core labs nearby.
Kyle Mikson, Analyst
Got it. Can you just clarify, would you launch Proteus with the reagent rental kind of program as well? Or would it just be solely kind of direct instrument sales?
Jeffrey Hawkins, CEO
Yes. Currently, we have only announced the list price and our intention to pursue direct capital sales. We will start with this approach, gather feedback from the market, and then determine if we want to introduce additional acquisition models. For now, our plan is to launch exclusively with the option for direct capital acquisition and to assess market response before considering other options in the future.
Kyle Mikson, Analyst
Okay. And then Jeff Keyes, it sounds like the mix will be mostly consumables this year, almost entirely consumables. So that would typically mean higher margins for most tools companies. But I think in your case, consumables seem to have a lower margin compared to the instrumentation. So I guess, I know you're not guiding to gross margin, but how low could it get to this year relative to the mid- to high 40s that you've been at recently in the past couple of years?
Jeffry Keyes, CFO
Yes. So I think your comments are reasonable and everything else being equal, our consumables have a lower margin than capital equipment, but there's a couple of things going on here too, because during the course of 2026, we expect to have some capital sales and some placements as well as consumable revenue, but the caveat on that is on the capital sales. We anticipate a lot of them to have this credit towards Proteus for future acquisition of a Proteus model that has deferred revenue that, that will be impacting our overall margin as well. So I don't think we're going to have specific guidance for margin specifically. But having said that, I think you can expect reasonably it's going to be lower than that kind of 40% to 50% range that we've had for the full year. And it will evolve and be impacted simply on the number of credits that we provide for Proteus for the actual capital equipment sales, if that helps, Kyle.
Jeffrey Hawkins, CEO
I can add one more detail. Currently, our production volumes for consumables are still quite modest. In our industry, reaching scale is essential for achieving desired gross margins for consumables. We’ve discussed this on previous calls and during our Investor Day, where we highlighted that one reason we transitioned to the new architecture with Proteus was not only for sequencing output and automation but also for the consumable architecture. We moved from a CMOS-based chip to a passive nano-well array, which offers us significant cost advantages in production, both at scale and even during the initial stages of product development. There are several factors affecting this, including our current consumable architecture and the relatively low volume. We took both of these aspects into account when making the technology decisions for developing Proteus and its associated consumable architecture.
Kyle Mikson, Analyst
Okay. Jeff Hawkins, I'd like to ask a question about Proteus. What would you consider the biggest risks to launching Proteus this year? Specifically, what could cause delays that push the launch into 2027? Additionally, how crucial is it to achieve the milestone of 20 amino acids? While it may not significantly impact 2027 or 2028, could it play a more important role in our long-term growth drivers, such as de novo sequencing or PTM detection?
Jeffrey Hawkins, CEO
I agree with you that the 20 amino acid detection may not be a key factor in the early days of the Proteus launch. While having a broader coverage is beneficial for customers, particularly for de novo sequencing, I share your view that the distinction between detecting 18 versus 20 amino acids is unlikely to significantly impact customer adoption at launch. Regarding the risk of the launch, I typically categorize product development into two main phases. The first phase involves innovation and invention, where technical risks are addressed. In our case, we have successfully completed this phase; the major innovations have been achieved, and we have demonstrated sequencing with prototypes. We are currently working on integrating the units and expect to share updates in the coming months. The technical risks are primarily behind us now. We are now focused on the second phase, which includes hardware integration, enhancing manufacturing capabilities, and optimizing performance and reliability. We are in this system integration phase right now. While delays can occur, they would likely be measured in months rather than years, as they would in the earlier innovative phase. We are optimistic about launching by the end of 2026. However, the potential risks lie in achieving the desired performance, reliability, and manufacturing quality. If there are any delays in those areas, they would still be on a shorter timeline compared to more significant delays seen in earlier development phases.
Kyle Mikson, Analyst
Awesome. And then just final one. I think you guys are one of the last tools companies to report earnings here, and it's timely given the White House OMB, the Office of Management and Budget. They've been slow to authorize the release of NIH awards. We obviously have had this new budget that you referenced, Jeff. There might be a deadline kind of soon for this for OMB. So are you hearing anything on that front? And maybe any risk or more uncertainty with respect to kind of NIH academic funding like this year?
Jeffrey Hawkins, CEO
We haven't received any new information beyond what I've shared. We're aware of the situation you described, but we haven't heard directly from customers indicating they need to secure a budget by a specific deadline. Our focus with customers generally relates to their capital budgeting cycles. For instance, they typically need to submit their requests by April or May to be funded within a certain timeframe. Similarly, for international tenders, these submissions are often required by a specific time in the summer to secure funding for the following year. So, we're mainly considering financial calendars rather than any immediate pressure stemming from the Office of Management and Budget or the National Institutes of Health. We will remain attentive to developments in the field as they arise, but we haven't seen any incoming feedback from customers yet. We'll need to observe if that changes as information circulates in the market and reaches our customers.
Operator, Operator
This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Jeff Hawkins for any further remarks.
Jeffrey Hawkins, CEO
Thank you for joining our call today. We look forward to providing more updates on the Proteus program and the continued progress towards commercial launch on our next earnings call. Thank you.
Operator, Operator
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.