Quantum-Si (QSI) Q4 2025 Earnings Call Transcript

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DATE

Tuesday, March 3, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Jeffrey Hawkins
• Chief Financial Officer — Jeffry R. Keyes
• Investor Relations — Risa Lindsay

TAKEAWAYS

• Quarterly revenue -- $0.5 million, driven by capital sales headwinds and deliberate focus on preparing for Proteus launch.
• Fiscal full-year revenue (period ended Dec. 31, 2025) -- $2.4 million, comprised of Platinum line instruments, consumable kits, and related services.
• Gross margin (fiscal Q4) -- 27%, impacted by a higher proportion of consumables and inventory adjustments.
• Gross margin (fiscal full-year) -- 47%, reflecting a higher mix of instrument sales and lower inventory adjustments than in the fourth quarter.
• GAAP operating expenses (fiscal Q4) -- $21.2 million, down from $31.3 million in the previous year period.
• Adjusted operating expenses (fiscal Q4) -- $18.3 million versus $26.7 million in the prior year quarter.
• GAAP operating expenses (fiscal 2025) -- $117.3 million, including approximately $18.7 million in charges mainly related to lease facility termination and litigation settlements.
• Adjusted operating expenses (fiscal 2025) -- $86.3 million, down from $99 million, indicating targeted cost management and focused R&D toward Proteus.
• Dividend and interest income (fiscal 2025) -- $9.7 million, a decrease from $11.4 million in 2024 due to lower interest rates and changes in invested balances.
• Year-end cash, cash equivalents, and investments -- $215.8 million, supporting operations and development activities into 2028.
• Proteus instrument list price -- Announced at $425,000, with details moved forward from the original timeline due to customer and partner feedback.
• Consumable utilization growth guidance -- Management stated, "expecting a more than 25% increase in the number of consumable kits...run by our customers" in 2026.
• 2026 revenue and cash guidance -- Revenue expected to be approximately $1 million, adjusted operating expenses not to exceed $98 million, and total cash usage capped at $93 million.
• New customer placements -- Seventeen new customers secured through the instrument placement program, extending reach to key opinion leaders and new market segments.
• Publication activity -- Five manuscripts submitted in 2025, with three new manuscripts released or preprinted within the first two months of 2026.
• Proteus performance update -- Early data demonstrates higher sequencing read length and proteome coverage versus previous systems, with performance exceeding initial expectations for amino acid detection capabilities.

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RISKS

• Chief Financial Officer Jeffry R. Keyes noted, "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."
• Management stated that "Proteus focus in 2026 will impact top line results," indicating revenue will be lower due to prioritizing long-term platform adoption over near-term sales.
• President and Chief Executive Officer Jeffrey Hawkins said, "if any of those things, you know, get delayed, again, I think we are talking about a much shorter time scale than some of the big chunks of delays you see in technologies that are still back in that innovation and invention sort of phase of development," signaling a risk of delays in manufacturing and integration for Proteus launch.

SUMMARY

Quantum-Si (NASDAQ:QSI) reported a sharp reduction in quarterly and fiscal full-year operating expenses, highlighted by a significant year-end cash balance designed to support the company through the upcoming Proteus launch and beyond. Management confirmed a "transition year" strategy in 2026, prioritizing increased consumables utilization and new customer engagement while limiting capital instrument sales to lay groundwork for a strong Proteus rollout. The newly disclosed $425,000 list price for Proteus was published early to align with customer capital budgeting cycles and facilitate grant submissions. The company’s placement program added seventeen new customers, expanding Quantum-Si reach and driving new application development as shown by the recent surge in scientific publications. Early performance indicators for Proteus show both expanded sequencing capabilities and read length, and technical progress on amino acid detection is ahead of initial projections.

• Management clarified that 2026 revenue guidance includes "very modest CapEx" and "a more than 25% increase in the number of consumable kits that are being run by our customers," with the bulk of revenue projected from consumables and service, and disclosed that Platinum Pro capital sales will be subject to credit for future Proteus upgrades, impacting short-term revenue recognition.
• Jeffrey Hawkins indicated three customer segments are being engaged: existing Platinum users likely to upgrade, new entrants attracted by Proteus-specific applications, and channel partners strategically aligned for market expansion.
• Proteus will initially launch solely through direct capital sales, with alternative acquisition models reserved for later consideration based on market response.
• Scott, this is Jeff. "Yeah. So that includes, that is kind of our adjusted operating expense number. And for adjusted operating expense, we do pull out stock-based compensation. We think that is, on an adjusted basis, that is kind of the more reasonable way to look at OpEx that is more cash oriented as we look forward."
• Gross margin is expected to fall below the historical 40%-50% range due to higher relative consumables mix and deferred capital revenue linked to Proteus upgrade credits.
• Proteus development technical risk is described as largely passed; remaining risks are linked to manufacturing scale and system integration, which could lead to only "shorter time scale" delays if encountered.
• Placement programs are enabling immediate customer engagement, with hands-on experience incentivizing eventual Proteus adoption in key opinion leader labs and more complex application settings.

INDUSTRY GLOSSARY

• Proteome coverage: The extent to which a protein sequencing system can identify amino acids within proteins from a biological sample, reflecting both breadth and depth of analysis.
• PTM (Post-translational modification): Chemical modifications occurring to proteins after translation, significant in determining protein function and often targeted in proteomics research.
• Nanowell array: A chip or substrate containing a dense arrangement of microscopic wells, used for isolating and analyzing single molecules in next-generation sequencing applications.

Full Conference Call Transcript

Risa Lindsay: Good afternoon, everyone, and thank you for joining us. Earlier today, Quantum-Si incorporated released financial results for the fourth quarter and full year ended 12/31/2025. A copy of the press release is available on the company's website. Joining me today are Jeffrey Hawkins, our President and Chief Executive Officer, as well as Jeffry R. 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, 03/03/2026. 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 US 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 Jeffrey Hawkins.

Jeffrey Hawkins: 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 three 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 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 five 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. We have already seen three new manuscripts released via publication or preprints in the first two 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 US 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, to continue to advance the Proteus prelaunch discussions, we decided to pull forward the announcement of our list price from the second quarter 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 2025, our version 3 library prep kit in 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, are fully deployed within our internal R&D efforts, and 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 two key areas. One, expanding the number and frequency at which we detect individual amino acids, and two, the sequencing read length we achieve. 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 about 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 nanowells 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 am 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 2025. The version 3 kit enables customers to sequence sample with as little as one to two 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 will 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.

Jeffry R. Keyes: Thanks, Jeff. I will now walk through our operating results for the fourth quarter and full year 2025 and then provide our outlook for 2026. Revenue in 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 $2,400,000, gross profit was $1,200,000, 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 2025 were $21,200,000 compared to $31,300,000 in 2024. Adjusted operating expenses were $18,300,000 compared to $26,700,000 in the prior year quarter.

For the full year 2025, GAAP total operating expenses were $117,300,000 compared to $110,200,000 in 2024, while adjusted operating expenses were $86,300,000, down from $99,000,000 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 $18,700,000, primarily related to the accounting adjustment of a net termination payment and associated asset write-off of a lease facility in New Haven, Connecticut, as well as settlement and preliminary settlement of certain legacy litigation matters.

Dividend and interest income was $2,200,000 in 2025, consistent with the prior year quarter, $9,700,000 for the full year of 2025, compared to $11,400,000 in 2024. The year-over-year decrease for the full year reflects lower interest rates and changes in invested balances. As of 12/31/2025, we had $115,800,000 in cash, cash equivalents, and investments in marketable securities. Turning to our outlook for 2026. We are anticipating total revenue to be approximately $1,000,000 with adjusted operating expenses of $98,000,000 or less and total cash usage of $93,000,000 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 pass 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 a successful commercial launch of Proteus by the end of the year, continuing to manage costs with discipline.

Expected cash usage also includes modest inventory build and commercial readiness efforts ahead of the launch. With $215,800,000 in cash and investments at year end, we believe we are well positioned to execute on our strategy and support operations into 2028. As we look past 2026, I remind you that we have built our operating expense structure that leverages key 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 are thinking about the business in 2026 and as we move forward.

Again, 2026 reflects a transition year with intentional trade-offs. We are expanding our installed base in a capital-efficient way, maintaining customer engagement and data generation, 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 plan-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 incorporated for what we believe will be a highly meaningful next phase of growth. With that, we are happy to take your questions.

Operator: Certainly. And our first question for today comes from the line of Scott Robert Henry from Allegiant Global Partners. Your question, please.

Scott Robert Henry: Thank you, and good afternoon. Just a couple of questions. First, what are you seeing as far as consumable trends, as far as the trends within the installed base?

Jeffrey Hawkins: Yes, Scott. So we are continuing to see customers, you know, purchase at a consistent rate. You know, as we said in the past, you know, the academic customers will sometimes purchase more episodically, buy consumables, complete a set of experiments, then publish data before buying again. Other segments of the market will have a more consistent order pattern. But if you think about maybe one way to think about it is the guidance we gave for revenue this year, we are expecting very modest CapEx. But what is baked into that guidance is we are expecting a more than 25% increase in the number of consumable kits that are being run by our customers.

So we are seeing that utilization improve, and we think, you know, what we are learning and how to do that and how to really drive that, we think learning that now and getting that really well understood process will be obviously very important as we get Proteus and look to drive the utilization of that system as well.

Scott Robert Henry: Okay. So if I am interpreting that correct for 2026, in anticipation of the Proteus launch, we should really factor in very, very few placements with almost all the revenue coming from consumables and service revenue.

Jeffrey Hawkins: Yeah. I think that is correct. A lot of the revenue obviously coming from consumables or the services revenue. In terms of the capital equipment side, maybe just a couple of pieces of information. The first is, yes, we expect, you know, a fairly modest number of Platinum Pro machines being purchased per capital. The other point to make on that, that is a little bit of a nuance, it is important. Jeff talked about in his remarks that in some instances, customers might want to buy a Platinum Pro, but they will be asking for a credit for a future Proteus machine.

And if we offer that credit, it can sort of alter the revenue recognition, you know, in the short term, capturing it over the full period of time they eventually purchase a Proteus. So there is that component to it as well. If people have that credit, it sort of reduces the recognized revenue in the short term.

Scott Robert Henry: Okay. And then I know you are 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, you know, right away and then kind of a typical S-curve, or just how we should think about the traction given that you already have the Platinum on the market, so it is somewhat educated customer base. But, you know, just kind of qualitatively how you would think about that.

Jeffrey Hawkins: Yeah. I think about it in a couple of distinct sort of groups of customers. To your point, we have existing Platinum users, and some number of those people will certainly move over to the Proteus, you know, over the course of the first, you know, year or two of the launch. I think it really is going to depend upon exactly which applications are available at launch and then sort of what are the other potentially transitional financial incentives we might give to those customers to help them move with us earlier in the launch curve. So I think about the existing installed base in that way. Yeah.

A lot of people do know about Platinum and Platinum Pro, but I can tell you from the early feedback I am hearing from our team in the field, as they are out talking about Proteus, we are also getting in front of a lot of people that we have had, you know, no access to or fairly limited access to prior because the applications that we were offering on Platinum Pro might not have met their needs. We are now, with some of those capabilities being communicated as coming with Proteus, opening the door to be able to talk with those potential customers.

So I think that is a sort of a new set of customers that do not have a Platinum today and are now engaging with us. So I think about those folks, they will probably follow a more sequenced. Some people will adopt early. Some will wait to see. So that group probably moves in a more classic new technology introduction sort of way. And I think the third piece, the third sort of leg of the stool in this case, is really, you know, our channel partners. You know, as we have talked about on prior calls, we have built a global channel partner network. I think we have got all of the major markets covered with that.

You know, will every one of those markets be a good fit for Proteus? That is something we are really working through. We do have a really important channel partner meeting coming up this month where we are going to get together in person with these partners. I think we will learn a lot at that meeting about really which of those partners and which of the markets are going to be good opportunities for Proteus. And obviously, the access to those markets can help us early in the launch as our partners are also investing and working to build out their installed bases. So that is how I think about it.

I mean, there will always be some, you know, stepwise fashion to the commercialization. But I think this year, and what we are committed to, is really helping you understand exactly how we are building that momentum towards that launch to try to have that, you know, sort of curve, you know, go efficiently and sort of reach that inflection point we want over sort of a maybe a longer early access period than we went through with the Platinum machine.

Scott Robert Henry: Okay. Great. Thank you for the color. And just the final question, which is just more clarification. The $98,000,000 in guidance for operating expenses, is that, does that include stock comp? Or is that more of just a cash expense guidance number?

Jeffry R. Keyes: Scott, this is Jeff. Yeah. So that includes, that is kind of our adjusted operating expense number. And for adjusted operating expense, we do pull out stock-based compensation. We think that is, on an adjusted basis, that is kind of the more reasonable way to look at OpEx that is more cash oriented as we look forward.

Scott Robert Henry: Okay. Perfect. Thank you for taking the questions.

Risa Lindsay: Thanks, Scott. Thank you.

Operator: And our next question comes from the line of Swayampakula Ramakanth from HCW. Your question, please.

Swayampakula Ramakanth: Thank you. Good afternoon, Jeff and Jeff. With you announcing the price point for Proteus, I am just trying to understand, you know, what it means. Does this mean that, you know, you have some secured preorders or letters of intent that you feel comfortable enough, you know, to put the price point out this early?

Jeffrey Hawkins: Yeah. Good question, RK. You know, we do not have any, you know, secured orders to communicate, you know, at this time. I think we are putting the price out because what we are seeing as we are out talking with customers, and the questions we are getting from our channel partners in preparation for our meeting this month, is they are 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, you know, 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 grant or their tenders, if they are, you know, located in international locations, are due, they are going to need that price point.

So that is why we are releasing it now, is to ensure we get incorporated into those proposals and that we get incorporated at the right level, you know, in that, to the extent they get funded, you know, they have got the right amount of dollars set aside to purchase the machine.

Swayampakula Ramakanth: Okay. Thanks for that. And then, you know, based on some of the commentary that you have been talking about, how, you know, people’s spending on capital expenditure is, you know, it has been a tough one for at least in 2025. Going into 2026 with this particular price point, do you see folks, you know, go the list purchase method, or do you think that, you know, there will be a decent number of potential clients who would actually purchase it for cash.

Jeffrey Hawkins: Yeah, RK. So maybe the first point to make here is, at this time, we have only communicated a list price and an ability to purchase a Proteus through a straight capital purchase. We have not extended some of the other purchase or acquisition sort of models to Proteus at this time. We are going to continue to do those other models with Platinum Pro, but we have not yet committed to doing that with Proteus. I think, you know, we are watching a couple of things. I think the first thing is, you know, obviously, the NIH uncertainties at least appear on paper to be improving.

You know, the most recent NIH budget is about a 1% reduction over the prior year. So much less dramatic cuts than originally thought. I think importantly, you know, and Jeff called this out in his remarks, but to reiterate, the indirect overhead rates are not changing in 2026. That was a pretty significant concern for customers in 2025 as indirect often are a source of the funding for new equipment. I think, you know, we are sort of fortunate in that regard. Proteus is probably the bigger impact on Platinum sales. But on the flip side, we get to see sort of a more stable NIH environment for a year here before we are in the market with Proteus.

And again, taking steps deliberately in our engagement with customers, including with the list price, to really try to get into those grant applications, those tender proposals here early on such that those capital dollars would be ready when we get to launch and are delivering units out into 2027 and beyond. So that is really how we are thinking about it and sort of the things we are watching.

Swayampakula Ramakanth: Okay. And then the last question for me is, when you are 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, you know, we could be closer to 20 amino acids by the time you launch? Or I know you did not give specifics, but I am just trying to understand from your excitement, you know, where do you think we will be heading by that time?

Jeffrey Hawkins: Yeah. So, RK, we are thinking about it in a couple different ways, I think, that I commented on. Maybe I will try to add a little bit of color here. So we are focused on, obviously, how many of the 20 amino acids can we detect. And in that regard, we said we believe we would be able to launch Proteus with 18, and we would demonstrate 20 this year. Now, you know, when we communicated that, we, of course, expected to demonstrate 20 by the end of year, as we show in our investor relations materials.

Obviously, the later in the year that is, then it pushes out for the delivery into 2027, with enough time to sort of do reagent development. So as we are able to make progress there sooner, you know, it opens up the prospects of getting all 20 getting into a kit, you know, sooner into the launch of Proteus than maybe we originally anticipated. The other factor is we are really looking at the combination of the number of amino acids, the frequency at which we detect those in all the different sequencing contexts, and then adding in sort of that additional layer of how long is the sequencing read length.

If you put all these together, what we are really focused on is how much of the protein are we sequencing, how much of that protein are we seeing. And the more we are seeing, the more sort of applications open up, the deeper the ability to analyze samples for PTMs and other things becomes. So I think we are seeing sort of progress across all of these areas sort of ahead of the pace we expected when we laid out sort of that roadmap at our Investor and Analyst Day.

And I think we are committed to you and the rest of, you know, analysts and investors that we will, you know, we will provide some more quantitative sort of milestones on this as we go this year to help you understand sort of what level of improvement has been made here over, say, the existing commercial kit. We are going to do that as we move through the year, but it is sort of on all those factors where we are seeing really positive progress from our teams and feel good about the capabilities we will be able to deliver not only at launch, but getting to that full 20 as soon after launch as we possibly can.

Swayampakula Ramakanth: Thank you. Thank you, Jeff, for taking all my questions. Thank you.

Operator: And our next question comes from the line of Michael King from Rodman and Renshaw. Your question, please.

Michael King: Congrats on the progress on the technology front. I am just wondering, as far as Proteus is concerned, when you look at your existing customer base versus the potential customer base for Proteus, how much overlap do you think there really is? Are they, you know, are they similar? Are they the same? Are they not the same at all? And if the latter, you know, will each of your sales be sort of a conquest sale as opposed to repeat customer sale?

Jeffrey Hawkins: That is a good question, Michael. So, you know, we have not really tried to quantify what the overlap is, but maybe I would speak about it a little more qualitatively. So we have 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, you know, a large academic center who has got, you know, mass spec and other technologies and, you know, a lot of sort of proteomic analysis capability.

So a good number of our machines, both in academia, also in pharma, are in what I would call more classic proteomics core labs. Those folks are, you know, in our view, 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, 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, you know, groups of, say, two or three 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 are focused with some of this initial sort of transition or upgrading will be amongst those larger, you know, core labs, proteomics centers of excellence that, you know, really are pretty ideal fits and where we think that overlap between use of today and use of Proteus in the future could be a pretty high level.

Michael King: Okay. Thanks for the additional color. I am just wondering, you talked about in your formal remarks the new, you know, the interaction you have had with clients and not necessarily implementation, but the design or conceptualization of kits. Are there sort of a couple of applications that are low-hanging fruit, whether it is, I do not know, you know, kinase pockets or other GPCRs, other sort of validated drug targets, or perhaps detection technologies like for biomarker work? Where do you see sort of the top two or three applications giving you a tailwind on launch?

Jeffrey Hawkins: Yeah. I think we are, obviously through the Platinum machines being in the market, working with customers not only across a lot of segments, but across a lot of different sort of disease areas. I think we talked a little bit in the prepared remarks about some of the data that came out recently from Stanford that is in hemoglobinopathies. That is an example of sort of a clinical application, something we had not really conceived of when we came to market with Platinum, but, you know, a great application of sequencing, you know, a single amino acid change drives the diagnostic, drives the sort of the treatment outcomes.

I think when we think about Proteus, I still think about it right now in somewhat broader sets of capabilities, and I think we will refine our point of view on maybe specific, you know, disease areas or research areas as we get closer to market. But I think the broad capabilities we are really wanting to make sure we have is, with the Proteus having a lot more sequencing output, one clear opportunity is to really work with much more complex biological samples, right? So that is, you know, that today is a limitation with our current platform. That opens up, you know, people doing work in sort of identifying new biomarkers.

That could be academically, that could be in pharma and biotech. Post-translational modifications, Michael, is a big focus of ours. You know, that is an area today that some people have applied our tech to. It takes a little more work on the customer’s side today to do that with our current technology and the capabilities and the analysis tools. But it is an area that we are dedicating a lot of time to, and as we lift this overall proteome coverage, you know, it is really going to enable that area. And we think that is, you know, that is important in discovery of biomarkers.

That is important in translational, validating those biomarkers on a high number of samples, and whether that is for a therapeutic target or for a diagnostic biomarker, you know, the PTMs we think is a key part. And that sort of ties me to the last piece, which is that translational lab is a lab we have not been in as much today. We are often in a core lab or we are in a basic sort of biology research lab that do very fundamental research.

Translational labs, you know, taking those defined biomarkers and trying to scale up that work on a large number of samples to validate, you know, its link to disease or its diagnostic potential or treatment response, whatever that endpoint might be. You know, we do not have as much exposure in those labs today. But we think the ability to look at PTMs, the ability to look at more complex samples really helps us start to line up to fit into that translational lab where we would expect them to be doing that type of work. And those labs are typically also, you know, your more consistent consumable utilizers than, you know, some of the more fundamental research labs.

Michael King: Great. And then, so if you will just indulge me one more. Just as far as the total spend is concerned, does that include or anticipate some increase in the field Salesforce? Are you going to be adding bodies to get out there?

Jeffry R. Keyes: Hey, Michael. This is Jeff Keyes. Yeah. 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 are done with the development of the Proteus program, we have 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 is also an opportunity to redeploy to commercial activities.

But as we plan for 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. Thank you for taking the questions.

Operator: Thanks. Thank you. And our next question comes from the line of Kyle Alexander Mikson from Canaccord Genuity.

Kyle Alexander Mikson: Hey, guys. Thanks for the questions. You did not provide a ton of detail on this, so I want to ask this question of what exactly you have heard from customers that gave you confidence to slow things down on the Platinum side and then move all focus to Proteus, and I am wondering if that came from, you know, just maybe just elaborate a little bit on what the feedback was and if that came from the new customers that, you know, Proteus kind of affords you or if it was from the existing base. Thanks.

Jeffrey Hawkins: Yeah. I think, Kyle, the way to think about it is, for some of the customers, it is really a question of do they deploy capital dollars today for 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, you know, use the placement program to get access to them. As we said in the prepared remarks, I think it is a good data point since we launched that program. We have placed 17 instruments in unique customer endpoints.

So I think when the current tech fits and it is really more about they do not 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. You know, I did mention earlier, if someone, you know, is purchasing a Platinum machine and wants to make sure they are protected from, you know, sort of the Proteus launch and making sure they have some financial benefit of that, we are certainly prepared to extend credits for 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 does not match up well to Platinum. So Proteus will be their entry point to working with Quantum-Si incorporated. So I sort of break people into those three buckets, and I think many people fit in either the first one where we access them today with a placement, moving them into a Proteus in the future, or are going to be Proteus-first because it really is more about aligning what they are trying to accomplish with the capability for that platform.

Kyle Alexander Mikson: Okay. Thanks, Jeff. And it is just interesting because, like, in theory, labs that were willing, like, would be willing to buy Platinum for less than $100,000 will be willing to, or comfortable with this price point. So I wanted to ask you about the list price a little bit. I know that, I think you touched on that earlier in a prior question. But, you know, the price is obviously almost equal to what you just did in revenue in the fourth quarter.

I know there are a lot of dynamics going on, but, you know, maybe there are some customers that you will be able to target now that have access to more funds or they are more affluent. And overall, just, again, just kind of curious what gives you comfort that the price point is going to be appropriate given, you know, the uptake that we have seen with Platinum thus far.

Jeffrey Hawkins: Yes. I think there are a couple of factors in play here. I think, obviously, there are some new customers that we can get to that we just cannot access today. Think as an example, we have talked about this in the past. In core labs, we were often sort of a complementary platform to other platforms. And some of our labs then are, you know, these small individual investigator labs. So obviously, Proteus would not be a great price point in those smaller individual investigator labs.

But in the core labs, you think about the price point we are at, the capabilities we are talking about, $425,000 is sort of about in the middle of what they are, you know, sort of at, maybe even the lower end in terms of, the high-end mass spec machines can run upwards of $850,000 up to over $1,000,000 each. So we do not think $425,000, in terms of those core labs and some of those higher-volume sites, is at all an impediment. I think it really comes down to what are the capabilities of the platform. Do they address, you know, either very difficult things to do with their existing tech?

Are they answering very important questions that, you know, researchers want to study? And if you do those things, and we believe Proteus is going to have those capabilities, you know, specifically things like PTMs, the complex biological samples, you know, the increased proteome coverage we will have to do things like sequencing antibodies and looking at variable regions, these sort of things that are very difficult to do unless you own that million-dollar mass spec machine and have all the infrastructure. When you start positioning Proteus in that context, a $425,000 price point, I think, is a very reasonable place to be at. It captures our value, but makes it more accessible than those sort of million-dollar price points.

But yes, I think you are correct in one way. That is, that smaller individual investigator who has a lot less funding is probably not going to be the perfect target. But again, the way we view those is, might there be two or three of those investigators that would look to pool money together to purchase a machine and have this capability? That is not something we have had to do today with Platinum or Platinum Pro, but certainly something you see in our industry in spatial and other areas where smaller investigators pool together to have the capability to do things when sometimes it is not offered, you know, at the core lab or somewhere nearby for them.

Kyle Alexander Mikson: Got it. Can you just clarify, would you launch Proteus with a regional rental kind of program as well? Or will it be solely kind of direct instrument sales and shipment?

Jeffrey Hawkins: Yeah. Right now, we have only announced the list price and the intent to do direct capital sales. We, I think, will start there. We will get feedback in the market and then decide if we want to open up other acquisition models. But right now, our intent is to launch with only the ability to do a direct capital acquisition and then sort of get the market feedback and decide if we open that up to other things over time.

Kyle Alexander Mikson: Okay. And then it sounds like mix will be mostly consumables this year, you know, 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 are not guiding to gross margin, but how low could it be this year relative to the mid to high 40s you have seen recently in the past couple of years?

Jeffry R. Keyes: Yeah. So I think your comments are reasonable, and everything else being equal, our consumables have a lower margin than capital equipment, but there are a couple 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. But the caveat on that is on the capital sales. We anticipate a lot of them to have this credit towards Proteus, where future acquisition of a Proteus model has deferred revenue. That will be impacting our overall margin as well. So I do not think we are going to have specific guidance for margin specifically.

But having said that, I think you can expect reasonably it is going to be lower than that kind of 40% to 50% range that we have 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.

Kyle Alexander Mikson: Entirely great.

Jeffrey Hawkins: So, Kyle, maybe I can add one additional piece of color. I think, you know, consumable volumes in terms of production volumes are still rather, you know, modest today for us. And obviously, in our industry, getting to scale on that is a key component to achieving sort of the desired gross margins for consumables. I say that, though, and just remind us all that, you know, and we have talked about this on other calls, and we have talked about it extensively at our Investor Day, one of the reasons the move to the new architecture with Proteus was not just sequencing output and automation, but the consumable architecture.

Moving from a CMOS-based chip to a passive nanowell array, there is a significant advantage to us in terms of our cost of producing those, not only at scale, but even in the earlier days of building that product. So I think there are a couple of factors in play here: the consumable architecture we are on and being at fairly low volume. And again, we factored both of these things into that technology decision as we sought out to develop Proteus and the associated consumable architecture.

Kyle Alexander Mikson: Okay. Thanks, guys. And then, Jeffrey Hawkins, I want to ask, like, a Proteus question for you. So what would be the biggest risks, I guess, to launching Proteus this year? Like, in this R&D ramp that you have got going on, what could happen to the downside that could cause that to slip to, like, 2027, for example? And then secondly, I am just wondering how important it is to actually obtain that 20 amino acid kind of milestone because, you know, maybe that is not like a big driver in 2027, 2028, but maybe that is more critical to, like, the long-term growth drivers such as de novo sequencing or PTM detection, things like that.

Jeffrey Hawkins: Yeah, Kyle. So I will work backwards with you on this one. So I would agree with you that I do not think the 20 amino acid detection is the key driver, certainly in the early days of the Proteus launch. I agree with you that coverage is, obviously, it is always a net positive to customers when you can detect more amino acids. It is, obviously, clearly important as you try to get to de novo sequencing, but I would agree with your general thesis that the 20 is not, you know, 18 versus 20 is not going to be the major driver of customer adoption of Proteus when we launch it.

I think in terms of risk of launch, I always break product development programs down into sort of two key things. One is, have you gotten through the innovation and invention phase of the program, meaning the technical risk has been taken off? And for us, the answer to that is unequivocally yes. The invention occurred. The big innovation leaps have been made. We have demonstrated sequencing on prototypes. You know, we have got multiple running. We are getting integrated units and expect to communicate sort of progress on those over the coming months.

So I feel like that technical risk component of the development where you still have to get that big breakthrough, come up with that moment, that is behind us now. This is really now a focus on the second phase I see in product development, which is really the hardware integration, the bringing up of the manufacturing capabilities, you know, working on things like optimizing performance and reliability, these, what I would call, more classic system integration or, you know, sort of hardware engineering. You know, that is where we are at. Most of the things we are doing, you know, could you hit a bump in the road and that take a little bit longer? Sure.

That could happen, but I think when you are in that phase of development, you know, if you get delayed, you are talking about delays sort of on the level of, you know, a few months. You are not talking in quarters and years like you are if you are back in that innovation phase. So again, we feel good about launching by the end of 2026.

But, you know, if you want me to paint for you what the risk is, I think the risk is, you know, some of those steps of getting, you know, the performance where we want it to be, the reliability where we want it to be, the manufacturing quality where we want it to be. You know, if any of those things, you know, get delayed, again, I think we are talking about a much shorter time scale than some of the big chunks of delays you see in technologies that are still back in that innovation and invention sort of phase of development.

Kyle Alexander Mikson: Awesome. And then just final one. I think you guys are, like, the last tools company to report earnings here, and it is timely given the White House OMB, the Office of Management and Budget, they have been slow to authorize the release of NIH awards. We obviously have missed the budget that you referenced, Jeff. 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, you know, this year?

Jeffrey Hawkins: We have not heard anything new beyond the color I gave. You know, I think we are aware of what you are describing. We have not heard that though through the customer channel, meaning people saying they need to get a budget in by a certain time. I think what we are focused on with customers are often sometimes it is related to NIH, but often it is just what is the capital budgeting cycle of their institution. You know, they have to have their request in by, you know, April or May in order to be funded in a certain time frame.

Or tenders internationally have to be in by a certain time in the summer to fund the next year. So we are doing more with, like, sort of financial calendars than we are sort of a push right now related to anything, you know, out of OMB or out of the NIH, but I think we will keep a close ear to the field as that unfolds. But nothing coming yet inbound from customers. You know, we will have to sort of see if that changes as the information, you know, works its way through the market into our customers.

Kyle Alexander Mikson: Okay. It is helpful. Thanks, guys.

Operator: Thank you. This does conclude the question-and-answer session of today's program. I would like to hand the program back to Jeffrey Hawkins for any further remarks.

Jeffrey Hawkins: 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.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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