Earnings Call Transcript - QTRX Q1 2024

Operator, Operator

Good day, and thank you for standing by. Welcome to the Quanterix Corporation Q1 2024 Earnings Call Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Francis Pruell of Investor Relations. Please, go ahead.

Francis Pruell, Investor Relations

Thank you, and good morning. With me on today's call are Masoud Toloue, Quanterix' President and CEO; as well as Vandana Sriram, our Chief Financial Officer. Before we begin, I would like to remind you of a few things. This call will be recorded and a replay will be available on the Investor Relations section of our website. Today's call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act. These forward-looking statements are based on management's beliefs and assumptions and on information available as of the date of this call. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The risks and uncertainties that we face are described in our most recent filings with the Securities and Exchange Commission. To supplement our financial statements presented on a GAAP basis, we have provided certain non-GAAP financial measures. These non-GAAP measures are used to evaluate operating performance in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. We believe that such measures are important in comparing current results with other periods' results and are useful in assessing our operating performance. Non-GAAP financial information presented herein should be considered in conjunction with, not as a substitute for the financial information presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures set forth in the appendix of the presentation posted to our website and in the earnings release issued today. Finally, any percentage changes we discuss will be on a year-over-year basis unless otherwise noted. Now, I'd like to turn the call over to Masoud Toloue.

Masoud Toloue, President and CEO

Thank you, Francis. Starting with our first quarter results. Total revenue of $32 million grew 13%. This strong performance was driven by 22% growth from our consumables business and 57% growth in our Accelerator Lab, more than offsetting softness in instrument revenue, which was anticipated due to a challenging capital environment. Our Accelerator Lab continues to provide a nice buffer to these macro CapEx headwinds. The lab has completed over 2,300 projects for more than 480 customers from all over the world using our Simoa platforms. First quarter non-GAAP gross margin of 54.5% grew approximately 140 basis points, and our balance sheet remains strong with $305 million of liquidity. Our cash usage in the period was approximately $19 million, which was higher than the prior year given the timing of certain working capital items. Vandana will touch on these results in more detail later in the call. Moving on from the quarter's financial performance, I'll expand on our leadership in innovation, focusing on new assay development and the durable moat advantaged by our incredible, sensitive Simoa technology. Simoa provides researchers the ability to examine and detect critical proteins at ultra-low levels with digital single molecule readout. Breaking sensitivity barriers is a key reason why we've been a pioneer in the discovery of biomarkers and a trusted partner to our pharma and academic customers, evidenced by more than 2,900 publications. Building on the foundation our incredible team has built over the last 1.5 years, we have a new product development engine. We remain on target to introduce approximately 20 new biomarker assays by the end of the year in the areas of neurology, immunology, and oncology. First, we're working on a comprehensive approach for Parkinson's disease, a neurological disorder that impacts millions of people around the world. There remains a critical need to identify treatment pathways to slow the disease progression over time with nearly 140 Parkinson's therapies in active clinical trials. To date, biomarkers such as NfL and GFAP have been implemented as key tools to monitor Parkinson's disease development. For example, in the January publication of the scientific Journal Nature, researchers used Quanterix' NfL assay to measure whether late-stage Parkinson's disease is associated with an increase in neurodegeneration. However, this is only the beginning. Last month, we launched our S-TREM2 assay, a microglial marker implicated in Parkinson's and other diseases, and we continue to focus on clinically relevant forms of alpha-synuclein and lysosomal storage biomarkers. These are important efforts requiring some level of sensitivity and are supported by our partners such as the Michael J. Fox Foundation. Turning next to a biomarker that has garnered a significant amount of recent attention, tau. The Alzheimer's disease research community is just getting started holistically evaluating this powerful protein and its many phospho-isoforms. Quanterix has been the leader in pushing forward the measurement and correlative data behind the evolution of tau biomarkers, not only with pTau-181 and pTau-217, but also for less discussed markers such as pTau-205, pTau-212, and pTau-231. Each of these specific isoforms may have unique characteristics that are useful in a diagnostic setting with the potential to improve clinical utility if included in a multi-marker assay. Today, the NAA recommends pTau-217 as the best biomarker for accurately diagnosing amyloid pathology. However, progress with tau does not end with pTau-217. Quanterix is leading the way to develop further evidence that more specific biomarkers and robust panels of related brain-specific analyzes may add diagnostic sensitivity to the detection and monitoring of Alzheimer's disease. In an April nature publication, researchers led by a group from the University of Gothenburg in Sweden using our Simoa technology, determined that brain-derived tau or BD-tau is a marker that has elevated levels in the presence of amyloid beta pathology and may provide additive sensitivity to a stand-alone pTau-217 assay. Studies suggest that blood total tau originates principally from peripheral non-brain sources. However, BD-tau comes directly from the brain instead of elsewhere in the body and therefore, may offer greater precision compared to the current standard of measurement. BD-tau may improve the current ATN framework for the definition and staging of Alzheimer's disease. We believe this is an important advancement in the field and plan to release our BD-tau assay this quarter. Staying on Alzheimer's disease, our development of a multi-market test continues to progress. More specifically, we plan to present four abstracts using data from the BioHermes and CANTATA trials in support of this effort at the upcoming Alzheimer's Association International Conference in late July. As a reminder, BioHermes is a diverse prospective study across 17 domestic sites enrolling approximately 1,000 participants with 200 from underrepresented populations. Cantata is a multiyear, multiphase study, Phase I of the study encompassed 1,200 retrospective samples, and Phases 2 and 3, of which we are currently engaged, are targeting 1,200 prospective enrollees across memory clinics and primary care settings. In addition to using these data for a multi-marker test, results from BioHermes and Cantata have been used for clinical validation of our LucentAD pTau-217 assay. Shifting now to progress in the field of Alzheimer's diagnostics. During Q1, we announced that our pTau-217 blood test was granted breakthrough designation by the FDA. In February, the American Medical Association confirmed new CPT codes for amyloid beta 40, amyloid beta 42, Fossil tau, and total tau. We expect CMS to price these codes later in the year. Finally, we are pleased to highlight that our collaboration announced in 2022 has resulted in Eli Lilly's launch of Certuit-AD, a blood test that can provide additional diagnostic evidence for Alzheimer's disease, measuring pTau-217 and run on Quanterix' SP-X platform. This test is now available on certuitad.com. Moving next to recent events. In the last several weeks, a few new plasma pTau-217 LDTs have entered the market with varying levels of validation and approaches for interpreting results. While it is still early, this suggests several platforms will serve different use cases in the market. Currently, we believe there are three pTau-217 tests available clinically that meet the Alzheimer's Association Working Group recommendations of 90% accuracy. Two of these three tests used Quanterix' Simoa technology and, as such, have been thoroughly validated through well-powered clinical studies. Preliminary results have been presented at recent technical conferences and general publications are expected later this year. We're not aware of any immunoassay that provides higher sensitivity than Quanterix' Simoa technology. The sensitivity to precisely measure pTau-217 at very low levels ensures the ability to deliver clinically meaningful results across a range of use cases. First, reportable concentrations can be provided for 100% of patients, even those at the very earliest stages of disease. LucentAD pTau-217 has a single femtogram per ml limit of detection, and Quanterix has yet to encounter a single sample unreadable level in over 2,000 samples tested, including the BioHermes and VMC cohorts and hundreds of healthy control participants. In similar patient cohorts, other technology platforms have shown up to 30% of samples were unreadable below the platform detection limit. Second, based on results from recent therapeutic trials, it has been shown that individuals at the earliest stages of the disease experience the greatest benefit from therapies. Early detection is enabled by higher sensitivity. Third, there is emerging potential to track progression or response to therapy by monitoring tau levels. In any monitoring application, you want to start measuring early and continue to follow the patient as the disease progresses. Resulting small changes at the lowest levels is not only important for early intervention, but also provides confirmation when therapeutic benefit has been achieved. Well, we believe the TAM for testing is large and the infrastructure will be built by several immunoassay providers. We believe the Simoa platform will be uniquely competitive for these applications due to its sensitivity. We are expanding on this foundation with multi-marker multiplex testing that other platforms are unable to perform. Multi-marker testing has the potential to bring definitive results to a larger proportion of patients as well as provide guiding information for differential diagnosis of non-Alzheimer's dementia. As we see therapies advance, anti-tau therapies will require independent measurement of tau pathology and amyloid pathology to understand how combination therapy should be managed. This requires examination of multiple markers to improve amyloid detection and support diagnosis. We look forward to sharing updates on our progress in the coming months. With that, I'll turn the call over to Vandana to cover our financial results.

Vandana Sriram, Chief Financial Officer

Thank you, Masoud. I will now add color to our first quarter results and also expand on our reiterated guidance for 2024. As Masoud described, Q1 was a solid quarter and consistent with our plan. We are pleased with the momentum we have to start the year. Total revenue for the first quarter of 2024 was $32.1 million, an increase of 13% compared to the prior year. Accelerator lab revenue was $8.7 million, an increase of 57% as customer appetite for our in-house lab services remains strong. Consumables revenue was $17.1 million, an increase of 22% and instrument revenue was $2.5 million, a decrease of 52%. In terms of revenue stratification, our customer mix in the period was nearly 50-50 between academia and pharma, and 85% of our assay and Accelerator sales were for neurology disease states. For the quarter, our total installed base increased by a net of 16 instruments. As others have noted, the capital budget environment remains challenging. However, we are seeing healthy demand from our Accelerator lab to offset this weakness. Shifting next to gross margin for Q1. GAAP gross profit and margin were $19.6 million and 61.2%, respectively, up $2.7 million and approximately 170 basis points compared to the prior year. First quarter non-GAAP gross profit was $17.5 million, and non-GAAP gross margin was 54.5%, up $2.4 million and 140 basis points respectively compared to the first quarter of 2023. Expanding on gross margin for a moment, our non-GAAP gross margin improved considerably on a sequential basis, up approximately 800 basis points compared to the fourth quarter of 2023. We're pleased with this performance as we more efficiently managed inventory in the period, achieved higher pricing, and continue to see the benefits of our corporate transformation. Moving down the P&L. First quarter GAAP operating expenses were $33.6 million, an increase of $7.2 million compared to the prior year. Non-GAAP operating expenses were $31.4 million, an increase of $6.9 million compared to Q1 '23. Higher spending compared to the prior year was primarily due to investments we continue to make in our R&D and commercial efforts. Moving to the balance sheet. We ended the first quarter of 2024 with $304.5 million of cash, cash equivalents, marketable securities and restricted cash. Cash flow in the period was a net outflow of $19.4 million. Q1 for us historically is our quarter with the largest cash outlay given the timing of bonus payments, which was an outflow of $7 million in the period. In addition, the quarter's cash results were impacted by the timing of receivables and inventory. Receivables were up $4 million due to the timing of revenue versus billings, and inventory was higher by nearly $4 million to support our growth initiatives. Our liquidity remains strong and provides excellent flexibility in what remains an uncertain funding environment. Moving on from the first quarter. Our full year 2024 outlook is unchanged with a revenue range of $139 million to $144 million and a non-GAAP gross margin profile in the low to mid-50s. As a reminder, this guidance does not include revenues from diagnostics testing, which were immaterial in the first quarter. We expect the pacing of our revenue and gross margin throughout the year to be in part dependent on the rollout of our new assays as well as customers switching to these new products. We are still in early stages of this activity and expect the sequencing of revenue to be weighted to the second half of the year. Within our guidance, we continue to assume cash usage between $25 million to $30 million, which assumes approximately $20 million of investments in strategic initiatives such as ramping up our commercial capabilities in diagnostics and in product innovation. I will now turn it back over to Masoud for his final comments.

Masoud Toloue, President and CEO

Thank you, Vandana. Our principal framework remains creating tools to enable discovery and improve health outcomes. This is a commitment to product innovation. We're working towards pushing beyond the industry standard we set for ultrasensitivity, approaching the boundaries of physics and improving multiplex across new sets of protein biomarkers. This year, we're making significant investments in menu, technology, and diagnostic testing. We're doing this with a new operating model that effectively scales and expect to realize operating leverage as we drive toward profitability. Our ability to identify new markers, translate these analytes into assays for research and now into clinical applications is unparalleled. Neurology is on the doorsteps of the next era of exciting discovery and Quanterix is poised to help unlock this opportunity. We can now take some questions.

Operator, Operator

Our first question comes from Puneet Souda of Leerink Partners.

Puneet Souda, Analyst

Can you discuss the growth in the Accelerator and whether there has been any impact from increased biotech funding in the first quarter? Are you seeing that reflected in your results? What specific factors are contributing to this growth? You mentioned that neurology is a key driver, but could you elaborate on what is fueling this growth? How sustainable do you think it is? Additionally, should we anticipate that the 20 new biomarker assays will also contribute to growth in Accelerator services throughout the year?

Masoud Toloue, President and CEO

Hi, Puneet. Yes. So, Accelerator has been a great story. As you know, we've built a lot of testing capacity and scale in the business. We had a 50% improvement in our testing scale. We're currently looking at 750,000 tests with capacity to increase threefold. So, we've built that seeing that there's a lot of interest in neuro trials over the last year or so, and they continue to be strong. So, I think most of that growth has come from pharma versus some of the smaller biotech. And 80% of that has been recurring customers. So, we have pretty decent visibility into our projects coming into the Accelerator Group and remain very excited about the prospect for additional work there. On the assays, one of the great parts of Accelerator that we're very thrilled about is, we get with our customers, we get to sit down, and we have an early perspective of the important markers for future clinical trials and future neurology projects. And we work there in collaboration and that work does feed our product pipeline, our kit, and assay pipeline. And as we develop assays, it helps with clinical trials. So, it's a strong flight wheel that has been great for the business.

Puneet Souda, Analyst

And then you talked a little bit about competitive dynamics. I mean, recently, there was a large peer in diagnostics that also announced breakthroughs for pTau-217, I believe. And can you elaborate on how you're thinking about the competition for sort of Simoa? How does Simoa differentiate itself from what appears to be more automated high throughput systems to serve the Alzheimer's diagnostics market?

Masoud Toloue, President and CEO

Yes. So, I think it comes down to two key points, and I'll expand on that. The first point is sensitivity. The Quanterix platform at Simoa technology just has incredible sensitivity that a lot of other platforms just can't match. The second is our ability to multiplex. Those two technology features really open up a lot of doors. Our limit of detection really is in the single femtogram per ml limit of detection. When we look at patient samples, we don't get an unreadable result. We've put a lot of clinical data out there. Other platforms haven't seen that clinical data. If you give full credit to, let's say, the results, I would expect competitor platforms to perform similarly with patients that have signs or symptoms of Alzheimer's disease. The issue is that when you look at situations in the clinic, you're not looking at a fixed cohort of patients that have the disease; you're looking at people at the early stages. The clinical utility is a very different situation than fixed studies, with patients coming in who have a very low result and those results are not readable. We haven't missed a patient in any of our clinical trials. That's number one. Secondly, 30% of the symptomatic patients that are in the pipeline or that come because they have an issue, don't have Alzheimer's disease. They have some other pathology and would benefit from a multi-marker test. We think there's a real opportunity there. We'll be talking about our multi-marker in a month or two at the AAIC conference. Lastly, measuring individuals at the early stages, we think that we're going to need sensitivity as patients progress through the disease cascade.

Puneet Souda, Analyst

And if I could just squeeze one quick one in for one to that. Can you elaborate on where the pricing improvement was coming from? And how should we expect the gross margin cadence through the year, specifically on pricing? Was it more RUO assays or Accelerator side?

Vandana Sriram, Chief Financial Officer

Yes. Thanks for the question, Puneet. We're really pleased with where we landed on gross margin for the quarter. On the pricing front, we implement an annual price increase every year that went into effect at the beginning of the year. That's across all of our products, so you see that across the portfolio. On the Accelerator side, there's a little more bespoke project work that goes on, so there is a little more variability there. This quarter, the projects that we executed were very favorable from a pricing perspective and helped on the margin front. We feel really good about the margin. The price list helped, and the revenue mix also definitely helped us this quarter.

Operator, Operator

Our next question comes from the line of Matt Sykes of Goldman Sachs.

Matthew Sykes, Analyst

Maybe the first one for me, just looking at the instrument Accelerator lab mix, how much of that do you think is due to the weaker capital equipment demand environment and customers just more willing to use the Accelerator lab? If we do see an improvement in the capital equipment demand environment, do you expect that mix to shift back? Or are there some customers that have gotten used to the Accelerator lab services and will be more willing to use them? And then longer term, if that mix stays that way with Accelerator lab growing at a faster rate? What is the impact on margins going forward?

Vandana Sriram, Chief Financial Officer

Yes. Thanks for the question, Matt. We think it's really both. On one hand, the Accelerator product has become a really unique offering on its own. There is a value proposition that stands on its own, and Masoud mentioned that about 80% of the customers are now repeat customers. So, we feel like that will continue to grow. The growth rates may not be as high as they are right now, but we think that value proposition will stand firm in our portfolio for many different reasons. On the instrument side, certainly for this quarter, we saw a lot of that CapEx pullback show its way in Accelerator. In the short term, that might be something that continues for another quarter or two. However, we expect at some point that balances out, and as the funding environment eases, we expect both models to continue running together, where we are still selling instruments while continuing to see growth in Accelerator.

Masoud Toloue, President and CEO

And, Matt, the only other thing I would add is that when you think of Accelerator, you think of the value of Simoa and the sensitivity that we offer. When we perform these services, they're margin accretive to the total business, meaning, there's a valuable service that we offer with valuable technology and they're priced accordingly.

Matthew Sykes, Analyst

And then, Masoud, just now that we have the donanemab AdCom date for June 10, there's a focus on both safety and tau levels and detection. What is your expectation for labeling? And if there is tau on the label, is the Certuit-AD offering sort of the preferred testing platform? Do you believe for Lilly to execute those tests that do need to get bids in order to get people on to therapy?

Masoud Toloue, President and CEO

So, we don't have a really good sense of what the label will look like. Obviously, we're very interested to see what the outcome of that AdCom meeting will be. I think we're hopeful that the results are positive for patients, and having another therapy or therapy option in the market is good overall. However, we can't comment specifically on the label at this time. We've been working closely with Lilly over the last several years, and we're excited that it resulted in the development of this test.

Matthew Sykes, Analyst

And just one more from me. Just given the manufacturing changes that you've made over the past year and looking at Q1 and the consumables growth, it was quite healthy. Is there still an element of switching over to that new process that might have held some growth back in consumables? And do we see that kind of progressing from an ease of manufacturing and higher throughput through the manufacturing lines as a potential accelerator for consumables?

Masoud Toloue, President and CEO

Yes, that's a great question. Over the last year, we've improved production by 300% since we began the transformation; we were able to produce 4 million tests annually with capacity to ramp. Regarding customer switching to those new assays, we probably didn't do a lot of conversion in Q1. It's a process. So, we expect that conversion to ramp in Q2 and in subsequent quarters.

Operator, Operator

Our next question comes from the line of Kyle Mikson of Canaccord Genuity.

Kyle Mikson, Analyst

Just a finer point on the near-term outlook. Just wanted to ask what the Q2 instrument placement revenue forecast could be, how you're thinking about that relative to Q1 perhaps. And I know we just talked about the consumable rebound; just the continued strength. Pull-through was decent in Q1, a little higher year-over-year step-down from Q4, but how could all these updated SKUs and new assays and manufacturing kind of affect, I guess, sequential growth and improvement in consumables in Q2 just based on what you just said, Masoud?

Vandana Sriram, Chief Financial Officer

Yes. Thanks for the question, Kyle. There is certainly a lot going on in consumables, and that's a factor as we look at Q2 as well as the sequencing of revenue for the rest of the year. If you look at our history for the last three years, we've generally been about 50-50 from a revenue mix perspective, first half versus second half. This year, we think that mix is going to be more like 45% to 47% because of all the factors that you mentioned. On the consumables side, we're still early in the process of customers switching to the new assays. In addition, we have new assays coming out every quarter, and that base does pick up in the second half of the year.

Kyle Mikson, Analyst

And then a follow-up on that question about the AdCom, the Eli Lilly AdCom. Definitely, you're going to be focused on safety and efficacy, but I know we don't know any of the topics of the questions yet for that meeting. But are there any read-throughs to Quanterix specifically from that we should be looking for when that takes place in June?

Masoud Toloue, President and CEO

Well, up until now, the need for testing just wasn't there. There were no therapies on the market. Now that there are therapies, there's going to be a real need for testing. This involves a wide range of tests that are not limited to just one. We think that it's a dynamic market, and we're excited to participate with what is a leading test regarding sensitivity. Unfortunately, I have no specific comments today with regard to the AdCom, but we're hopeful that there will be more options for patients.

Kyle Mikson, Analyst

And then finally, just on the brain-derived tau. It's interesting. Did you talk about which antibodies you're using for that? I think I saw Biolage in Thermo in the publication. Is this BD tau market going to be added to the multi-marker panel that's due to come out in the next 6 to 12 months?

Masoud Toloue, President and CEO

On the BD tau, I don’t recall if we've disclosed that, but it's an intriguing marker. A large portion of tau comes from peripheral sources, and we believe that focusing on brain-derived tau improves testing accuracy and sensitivity. We are looking at BD tau in combination in a multi-marker setting; potentially with some of the fossil tau we've discussed to determine improvement. Measuring brain tau specifically rather than peripheral sources for Alzheimer's pathology is important.

Operator, Operator

Our next question comes from the line of Sung Ji Nam of Scotiabank.

Sung Ji Nam, Analyst

Maybe on the five health network collaborations you announced earlier this year as well as the licensing opportunity for laboratories. Could you give us an update? I know it's early on, but can you share the progress you're making there or the traction you're getting currently, and any feedback you have?

Masoud Toloue, President and CEO

Yes, Sung Ji. The feedback has been very positive. Each of the partnerships and collaborations we've signed is enthusiastic about the sensitivity of the platform. There were immaterial revenues in Q1, likely paced by adoption of the Leqembi therapy and future therapies. We hope to continue announcing more partnerships as we go into the second quarter.

Sung Ji Nam, Analyst

And then just my follow-up is on the roughly 85% of the business or the growth driver that is currently coming from neurology applications. Just curious, how much of that is driven by Alzheimer's disease specifically? And within Alzheimer's, do you have a sense of how much of the growth is coming from novel mechanisms of action or biomarkers?

Masoud Toloue, President and CEO

That's a very insightful question. Right now, I'd say it's a pretty even split. There's a large interest in Alzheimer's, but I wouldn't say it's the largest portion of the business. If you look at some of the other neuro markers we have, general neuro markers for neuro health are extremely attractive in a lot of tests and trials. These markers act as proxies for brain health, allowing us to assess whether therapy affects the brain or if a patient is improving. A good portion of our work is not directly related to Alzheimer's, and we see growth in other neuropathologies as well.

Operator, Operator

Our next question comes from the line of Dan Brennan of TD Cowen.

Daniel Brennan, Analyst

Congrats on the quarter. Just zooming out, you'll spend a lot of time on donanemab and what impact that could have. It's still very early for patient volumes on new therapies as well as blood-based testing, with regulatory and reimbursement challenges ahead. Could you give us a sense for investors if we're looking out over the next 6 to 12 months trying to identify key events that will give us clarity on the initial uptake of your clinical business and maybe the competitors?

Masoud Toloue, President and CEO

Thanks, Dan. First, let's zoom out and say that if you're a company interested in doing something differentiating in the diagnostics market, it will come down to sensitivity. Can you detect disease early? Quanterix has been working on this across several disease fronts, and for Alzheimer's, we're putting this into practice now that effective therapies are available. Adoption of testing will be paced by therapy and will likely see more interest as clinical trials provide better efficacy results. Complicated problems exist since 30% of symptomatic patients have different pathologies, requiring differential diagnosis. We believe Quanterix will play a role in all aspects of testing.

Daniel Brennan, Analyst

Could you give us a little more detail on the timing around upcoming trials, and where things stand with the FDA?

Masoud Toloue, President and CEO

We're excited about the breakthrough designation. We're working with the FDA on trials, and results will be shared throughout the year. We'll announce multi-marker data from BioHermes and Cantata at AAIC in late July. We expect a peer-reviewed publication to be submitted in May. We're measuring samples from BioHermes and the VMC cohorts, and we were able to detect all patients measured without missing any. The clinical trial process for both studies has been excellent, and we're looking forward to the results in July.

Vandana Sriram, Chief Financial Officer

Regarding our gross margin for the quarter, several factors helped drive the improvement. The revenue mix was favorable, our Accelerator sales were strong, and we implemented a price list at the beginning of the year which enhanced margins. Additionally, our transformation process has resulted in a more productive process, better cost control, and low inventory management costs. Overall, we are pleased with where we landed, but we're planning for a few points of variability as we go into the next few quarters. Looking at our revenue mix, Q2 could see around 45% to 47% of revenue within the first half of the year. For the second half, we anticipate good momentum from Accelerator, while we expect consumables growth to pick up more in that timeframe.

Operator, Operator

This does conclude our question-and-answer session. Thank you for participating in today's conference. This does conclude the program. You may now disconnect.