Ladies and gentlemen, thank you for standing by and welcome to the Berkeley Lights second quarter 2021 earnings call. At this time, all participants are on a listen only mode. After the speaker's presentation, there'll be a question- and- answer session. To ask a question during the session, you'll need to press star one on your telephone. If you require any further assistance, please press star then zero. I would now like to turn the call over to your host, Carrie Mendivil, Investor Relations. You may begin. Thank you. Earlier today, Berkeley Lights released financial results for the quarter ended June 30th, 2021. If you have not received this news release or if you'd like to be added to the company's distribution list, please send an email to ir@berkeleylights.com. Joining me today from Berkeley Lights are Eric Hobbs, Chief Executive Officer, and Kurt Wood, Chief Financial Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. For more information, please refer to the risks, uncertainties, and other factors discussed in our SEC filings. Except as required by law, Berkeley Lights disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, August 11th, 2021. With that, I'd like to turn the call over to Eric. Thanks, Carrie, and thank you everyone for joining us this morning. Today, we are going to provide an update on our progress against our stated strategic objectives, as well as an overview of our second quarter 2021 financial results. Berkeley Lights continued to make important progress during the second quarter, and I'm very encouraged by the increasing demand and enthusiasm for our platform. Our team members across the globe continue to execute on our strategic initiatives, and we are better positioned than ever to find the biology that cures disease. Starting with our second quarter results, we generated $19.3 million in revenue, bringing our year-to-date revenue to $38 million, a 56% increase over the first half of 2020. We successfully launched our new Tech Access subscription offering tailored to the specific capacity needs of antibody discovery and cell line development customers. We released Opto Plasma B Discovery 4.0 on schedule. Customers are now finding 10 times the hits at a tenth of the lead time and a tenth of the cost per validated sequence. This quarter, we also officially announced our partnership with Thermo Fisher Scientific in AAV, which successfully progressed into phase II of the project. This morning, we announced a partnership with Bayer for high throughput functional screening to significantly accelerate their pipeline for agricultural product discovery and development. This partnership, along with the Thermo Fisher partnership, highlights the progress on our business development efforts. Collectively, these two non-exclusive partnerships represent a revenue opportunity of more than $30 million, with the potential for additional long-term revenue related to the future milestones and commercialization of products. At Berkeley Lights, our mission is to find the biology that cures disease. This starts with therapeutics for people, but our impact goes way beyond that. Our technology can help find cures for diseases in plants, animals, and also provides a scalable and sustainable path for life on this planet. To achieve this, we are providing the most advanced, highest throughput functional characterization platform on the market today as a means to find the best biology. To understand the full potential of our platform, it is helpful to place Berkeley Lights in the context of the three main pillars that are the key to unlocking the full potential of biology. The first pillar is sequencing, which enables us to read biology. Sequencing gives us the fundamental code of life. Today, sequencing is a huge industry. Although the ability to read sequences is extremely important, sequences without correlated function have limited value. The next pillar is gene editing, which allows us to write to biology. Here we attempt to reprogram biology by changing the genes in the cell and modifying its code. gene editing is another massive industry, and today there is the potential to edit vast numbers of cells, but without understanding which edit creates the needed product, there is also little value here. The third and final pillar is functional characterization. This is where sequences and edits come to life and gain true meaning. Today, functional characterization is fragmented, highly manual, and lacks standardization. At the same time, there is an ever-growing mountain of sequence data and a near infinite rate at which gene-edited cells can be made. This has created an enormous backlog of required functional characterization. The complexity in that backlog is growing exponentially, requiring higher resolution and polyfunctional readouts. Current manual processes simply won't scale. Berkeley Lights' goal is to consolidate and standardize functional characterization. We are bringing the first biological supercomputing platform to market, providing automated high throughput, high-resolution screening, access to rare, precious samples, polyfunctional resolution on live biology, the export of an optimal live biology, and digitization of multi-parametric data. To translate the multi-billion dollar opportunity that functional characterization represents, Berkeley Lights must run a high-volume platform business, establish high-value service businesses leveraging Berkeley Lights BioFoundry, and generate revenue from Berkeley Lights-owned biological assets. The Bayer deal is another step into offering high throughput functional screening services at Berkeley Lights. This truly is digital cell biology, where we receive DNA sequences from our customers, express the proteins encoded in the DNA, and screen each DNA sequence in a massively parallel fashion for the desired function. The service business gives Berkeley Lights full access to data, which is critical to our strategy. Digitization of multiparametric data at a large scale, linking function to sequence, is critical to enabling the future of in silico design of biology. The service business is a prerequisite towards our ability to create Berkeley Lights' own biological assets. It is here where Berkeley Lights will run its own targets and partners' targets with the goal to participate in downstream revenues such as milestones and/or royalties. The Thermo Fisher partnership is yet another example of deeper value capture through our technology. The successful completion of this partnership will transform how viral vectors are developed and manufactured at industrial scale, allowing gene therapies to move from orphan diseases to mainstream therapies. As previously announced, the viral vector workflows developed in this partnership will only be available through a subscription model. I would like to spend a little time to talk about high throughput functional screening on the Berkeley Lights platform. As sequencing and gene editing capabilities mature, there is an increasingly large library of unvalidated sequences which require high-resolution functional readouts at scale. Typically, functional readouts are performed scanning many live cell candidates against one common target. We have developed a NanoPen-based cell-free expression solution, which allows direct expression of DNA into proteins against thousands of targets simultaneously for functional readout. This provides one-two orders of magnitude improvement in speed and throughput, while significantly reducing cost when compared to currently available methods. We will offer our high throughput functional screening services only via our BioFoundry. We believe access to these services will accelerate the design-build-test cycles for our customers, further reducing the time to find biology that cures disease. We expect that as cell-free expression continues to evolve, it will find many applications in many markets. With that, I will now turn the call over to Kurt for more detail on our financials. Kurt? Thanks, Eric. Revenue for the three months ended June 30th, 2021 increased 82% year-over-year to $19.3 million, with $13 million coming from product revenue and $6.3 million from service revenue. We received orders for three TechAccess subscriptions within the quarter. Under the TechAccess model, we do not recognize the revenue up front and instead will recognize the subscription revenue over the subscription period, meaning a trade-off of near-term revenue for more rapid platform adoption and the ability to build backlog and predictable recurring revenue. Our TechAccess subscription offering is designed to increase our served available market opportunity and drive incremental platform placements. Many smaller biotech customers run lower campaign volumes and want to run their own biology. Our TechAccess subscription provides a financially attractive path for these customers to run antibody discovery and/or CLD workflows on the BLI platform. It's a renewing one-year commitment inclusive of the platform, software, consumables, service, and support, which provides a compelling ROI with a lower upfront cash commitment for the customer. We added seven platforms to our installed base during the second quarter to end with 92 platforms in the field. Further breaking down Q2 and looking at our three revenue streams, direct platform sales totaled $11.4 million in the second quarter of 2021, increasing 51% over the prior year period. Recurring revenues totaled $3.9 million in the second quarter of 2021, up 35% from $2.9 million versus the second quarter of 2020. Our year-to-date pull through per instrument remains on track with our historical experience. Revenue from joint development agreements and partnerships was $3.9 million in the second quarter of 2021, compared to $100,000 in the second quarter of 2020, and up 26% sequentially versus Q1. The sequential increase was the result of a full quarter of activity from our viral vector partnership with Thermo Fisher Scientific. With the recent signing of the Bayer partnership, revenue from joint development agreements and partnerships will increase as a percent of total revenues in the second half of 2021. Gross profit for the second quarter of 2021 was $12.7 million compared to $7 million in the prior year. Gross margin for the second quarter of 2021 was 66%, in line with the prior year period. As we have discussed on previous calls, our gross margin is negatively impacted by the cumulative impact of the Ginkgo workflow buydowns. Excluding the Ginkgo impact, gross margins for the second quarter would have been approximately 72%, in line with our long-term target of approximately 70%. Total operating expenses for the second quarter of 2021 were $30.6 million, inclusive of $5.6 million of stock-based compensation, compared to $19.1 million in the second quarter of 2020. The increase of $11.5 million was driven by an increase in stock-based compensation, G&A related expenses as we transition to become a public company, and continued investment in our R&D and sales and marketing teams. Net loss for Q2 was $18.2 million compared to a loss of $12.4 million for the second quarter of 2020. All net loss numbers are inclusive of stock-based compensation. Regarding capital and liquidity, during the second quarter, we completed a refinancing of our $20 million debt facility. Under the terms of the new agreement, we extended the non-amortization period by up to 36 months, with final maturity extended to 2025. The interest rate was lowered by approximately 250 basis points to 4.17%. We added a revolving credit facility that provides access to $10 million of additional liquidity. As of June 30th, we had a cash balance of $215.1 million and available liquidity of $225.1 million, inclusive of the undrawn revolver. Turning to our outlook for 2021, we continue to expect revenue to be in the range of $90 million-$100 million, representing growth between 40% and 56% over the prior year. As contemplated in this guidance range, we do expect a meaningful uptick in Q4, driven by normal seasonality as well as increases from our growing business development activity. With that, we will now open it up to questions. Operator? Ladies and gentlemen if you have a question or comment at this time, please press the star and the one key on your telephone. If your question has been answered and you wish to remove yourself from the queue, please press the pound key. Our first question comes from Doug Schenkel with Cowen. Good morning, and thank you for taking my questions. My first is on the subscription model. At a high but important level, I'm just wondering if the subscription model program is impacting the funnel the way you anticipated. Maybe building off of that, what is the typical profile of the subscription model customer? I ask because part of the intent here is not just to lower barriers to entry here, but sort of by extension to potentially move you into some customer adjacencies that you weren't having as much traction with historically. I guess beyond just getting an update on whether the funnel is tracking the way you would hope, it would be interesting to hear what are the phenotypes of those customers that are moving forward with Berkeley Lights and Beacon with this financial structure? Hey, Doug, this is Kurt. Maybe I'll take this, and then Eric, you can chime in with it. Appreciate the question. As we launched this, it was really geared towards that smaller customer that had lower campaign utilization rates than what the Beacon had capacity for. We tailored this to folks that need to run between five and 10 campaigns a year, which obviously is significantly less than what the Beacon is capable of. The intent there was to attract that customer to the Berkeley Lights platform that otherwise would've went to an alternative solution, whether that been a CRO or to build out the lab space that they needed to do it manually in-house with that. The design here was to price an all-in package that included the tool, the software, the service, and the consumables at a very simple price per campaign, easy to sell, goes through an OpEx budget versus a CapEx budget type of a model. Obviously, when we launched that, and as we mentioned on the call last quarter, if you've got some folks who clearly will, the subscription makes 100% economic sense, and then on the high throughput customers, such as your high throughput CDMOs, et cetera, where buying a Beacon on a CapEx model makes sense. There's a certain amount of folks that will fall in the intersection of those two circles. We believe that's a relatively small percentage, 25% or less of the total customer base that will convert over from a CapEx sale into a subscription base. That's essentially what we saw in the initial launch here and kind of what our pipeline is looking like as we see what's in the funnel today. It is attracting a new customer to us that we otherwise weren't able to get and increasing our serviceable available market. The other thing to note here is, which we didn't mention on the call, but those three TechAccess subscriptions that we took orders for at Q2 were not included in the seven unit placements. All three of those units have shipped earlier in Q3 for this quarter. It's tracking to what we thought in the phenotype, specifically to your question, is that smaller customer of the utilization who wants to run their own biology, and we just provided a compelling reason for that. It's tracking as expected. That's great. If I could just ask one more, and then I'll let others hop in. The total revenue number was about what we were expecting, but the components were a little bit different. Recurring revenue specifically was a little lower than we expected, and I think it was down sequentially, acknowledging that I'm in transit, so I'm not scrubbing the model in front of me. I apologize if I have that part wrong, but I know relative to what we were looking for, you were a little bit light. That can always just be a function of our model, but I want to make sure that there's nothing to unpack there in terms of pacing or any surprises that you're seeing in terms of customer activity. Thank you. Yeah, good question. You're spot on. It did decline sequentially quarter-over-quarter, $3.9 million this quarter versus $4.4 million in Q1. There's always a seasonality aspect where we see a year-end budget consumption from customers in the fourth quarter. We saw a little bit of that kind of trickle into Q1 as well. The bottom line is when we look at it over the 12-month period, it's very much on track to what we said historically. Okay. Thank you again. Our next question comes from Brian Weinstein with William Blair. Hey, guys. Good morning. Thanks for taking the questions. Starting on the Bayer deal, can you just give us a little bit more on specifically how the technology's going to be used and just a little bit more on the terms of the deal here in terms of the duration and maybe some of the downstream opportunities that are there? I think you mentioned that the two business development deals that you did are $30 million in total. Not sure over what period that is and how we should be thinking about that. A little bit more on specifically how the tech's going to be used here and then anything that you can give us on how to think about that $30 million. Yeah, certainly. Morning, Brian. How are you jumping in here? As we discussed in the prepared remarks, we see high-throughput functional screening as a huge opportunity and to translate that into multi-billion dollar revenues annually. There were three things that we needed to do, and the first is, of course, to run a high volume platform business. The second is to establish high volume services business which leverage our BioFoundry. The third is to generate revenue from biological assets. The Bayer deal is another step to achieving these goals. At first, in regards to our platform, it expands our platform into the ag market. Not only does this increase our TAM, which I think we all love, but these partnerships always expand our capabilities. Again, as we expand our capabilities, that expands the value of our platform. That helps drive, of course, our high volume platform business. That really helps us in that first goal and objective. Second, what the Bayer deal does is it sets a foundation for future high-throughput functional screening services. In this partnership, they send us stuff, we execute and run high-throughput functional screening, and then we send them information back. That helps us on our second goal. Third, this non-exclusive partnership provides this near-term multi-year revenue opportunity followed by additional service revenue and backend milestone payments. Although the deal is a multi-year deal and, Brian, I can't give you details because the terms, of course, we're not disclosing at this time, but it is multi-year on the deal side. It also gives us access to the backend and milestone payment opportunities, which is important for our third goal. All three goals that help us achieve this multi-billion dollar revenue potential in the future are tied into the Bayer deal. It's not just the Bayer deal. If we talk about the Thermo deal as well, both of these deals really expand our market opportunities, but they help us achieve our mission. By not only doing things like accelerating cell gene therapy products into the clinic, but also helping our customers drive world-class innovations and standards in sustainability for farmers, consumers in the environment. What I'm most excited about is that in our mission to find the biology that cures disease, this pushes us beyond just therapeutics for human, but into working in the agriculture space as we move into the future. That's great. I appreciate the answer on that. One just on the guidance here, the $90 million-$100 million. You did roughly $38 million, I think, in the first half. To the midpoint of the guidance, it is a decent step up in the second half, and you've got this changing model a little bit going on here. Can you just give us some thoughts on the confidence in your ability to hit that guidance and how we should be thinking about things like that TechAccess model and as these new customers come online, what that's going to bring in terms of the revenue and just how you're thinking about the broader mix within the different categories that's sort of built into that guidance? Yeah, perfect. Appreciate the question. I think first on the first half versus second half split that you talked about, if you were to look historically over the last couple of years, it's been relatively that same profile, first half and second half. I will say that this year we expect Q4 to be a slightly higher percentage than what it may have been. That's primarily a function as you ramp up on some of these business development deals like the Bayer that we talked about, as well as getting the TechAccess more rolled out and you get more on that recurring revenue base on there. That's what we're anticipating at this moment going in. That's all contemplated in our range of $90 million-$100 million. As we talked about in the last call, clearly as we launched the TechAccess, as I responded a little bit to Doug's question, there are a few customers that'll be at the intersection of where it makes 100% sense to do a subscription financially from their sense versus a CapEx model. There's a few that fall in the middle of where those two circles intersect. In those cases, you'll do a trade-off where they might opt for instead of a CapEx sale subscription, therefore the more subscription we do, as we talked about in the last call, the closer to the lower end of the range we'll be. That program's off to a good start with getting three contracts signed in the first few months of that being launched. Okay. Thank you, guys. Our next question comes from Tejas Savant with Morgan Stanley. Hey, guys. Good morning. Just a couple of quick follow-ups for me. On the Bayer deal, Eric, I just wanted to get a sense of can you walk us through the evaluation process in terms of what's the status quo in terms of trait design? What are the approaches that Bayer was using originally, and how did that stack up versus the Beacon? I know you mentioned sort of massively high throughput, but if you can perhaps put some numbers around it or perhaps some timelines like you've done with the other workflows, that would be super helpful. The Bayer deal, of course, a lot of the terms are not able to be disclosed, but here's what I can tell you is that historically we had been in discussions with Bayer and showed them capabilities that were actually quite interesting in terms of culturing lettuce cells and other plant cells on the platform to perform trait discovery. We developed a new capability internal to Berkeley Lights that allowed us to enable a much higher throughput functional screen. What we said in the prepared remarks was this is one-two orders of magnitude improvement. In our previous work in antibody discovery, we were looking at workflows where you're pulling cells from animals and evaluating the cells to produce antibodies against a particular target. In the ag space, there's a different need. The need there is to screen many different variants of bioactives against a particular target. It flips the problem on its head, and so the scientists, whether they're biologists and technologists at Berkeley Lights, they're uber creative. They came up with a way to do this. We went back and shared it with Bayer, and Bayer said, Hey, this looks too good to be true. We said, Okay, well, give us the challenge. They created, it was nine technology gates that we had to get through in order to move forward and do this deal, and we completed it in nine weeks. They were very satisfied with our progress in doing things that they didn't think were possible previously. That was by the context by which we signed this deal. Not only am I excited about the additional capabilities that were developed through the beginning parts and the challenges always that are provided in emerging industries, but also really looking forward to working with Bayer on moving the technology and the innovative capabilities of Berkeley Lights into the ag space so that we can help them to accelerate the trait discovery to create that scalable and sustainable future leveraging cell-based products. Got it. Super helpful. A couple of quick ones on the new subscription model for me. Eric, are you seeing any impact on Lightning sort of traction or given the subscription model now available, for these lower throughput, lower capacity customers? One for Kurt on subscription. The TechAccess units that you mentioned, are these subscription units, or are these sort of a third bucket essentially? All right. I'll jump in on the Lightning question, and then Kurt, you can jump in on the subscription question. On the Lightning side of things, Tejas, this quarter we had some excellent work done by a major medical university. The interesting thing that you'll find out is that when you're working on cell therapies, in particular for pediatric cancer patients, it's a very precious set of cells that you get for the patient. Sometimes there's only thousands, tens of thousands of cells, and our customers are previously having to make trade-offs in regards, not our customers, but in general, outside of Berkeley Lights, our customers are having to make trade-offs in terms of what analyses they perform on these very precious samples. Of the five analyses that they can do, they can do one, because all of those analyses, whether it's a FACS-based or a Western blot-based, and they're terminal. They destroy the cells in that process. But what we're finding is that even with this very, very small number of cells, our customers can perform things like cytokine secretion, T-cell cytotoxicity analyses, right? They can capture the TCRs, they can do proliferation, they can look at serial cell killing. What we're learning is that there is extreme value in using very small cell samples or by profiling very small cell samples with the Lightning platform. The summer work sets the foundation for what will be QA/QC activities in cell therapies and are critical to CTMS. I'm happy to see the progress there this quarter. Kurt, did you want to jump in now on the second question, which was subscription? Yeah. Tejas, the subscriptions that we did for TechAccess, it's only offered as a oneyear subscription, and they can choose between five or 10 campaigns that they want to run. Obviously, two different pricing models for that with a one year renewing subscription model for that. Those three that we mentioned fell under that TechAccess subscription model. Got it. Very helpful. One final one for me on the guide, Kurt. Are you seeing any impact from COVID in July here, particularly in terms of customer site access issues on new installs? COVID, it's hard to see what's COVID related versus what's normal now. With the emergence of Delta variant, we haven't yet seen restrictions to access to get the tools in play. I think we're still monitoring if with this new Delta variant, if there's going to be any type of customs delays or anything on that front. So far we haven't run into any issues, and we still continue to reiterate that we'll place at least 45 units this year. Perfect. What we said last quarter, we don't see risk in that as we stand here today. Got it. Thanks, guys. Our next question comes from Julia Qin with JP Morgan. Hi, good morning. First off, just a couple follow-up on the partnership revenue. I know you said $30 million for the two deals with Thermo and Bayer. What's the timeframe that we should be thinking about for those $30 million? Specifically, during the quarter, how much milestone payments do you guys receive, and how much do you guys embed in your current guidance for the second half? Yeah, Eric, maybe I can take that and then you can add color. Our hands are somewhat tied. The financial portions of the agreement are under confidential agreement, so we can't disclose. What I would say is, if you remember what we talked about with Thermo Fisher Scientific, it was a new gene therapy segment. You can look at our Q and see how much is rolling through on that segment, and that'll give you an idea for what the Thermo aspect is. It's multiple quarters of each, that deal. What we like about these type of business development deals, obviously, they're good margin for us, they're also similar to with the subscription, a nice, stable, recurring revenue base for us, and it established deep roots partnerships with each of those customers for longer term relationships as well. In terms of milestones, they're different for each deal there, obviously. Typically, the first couple deals have a little bit less milestones, and then the latter part would have more. In the near term, I'd say there's very little of the milestone. It's more of an upside. We typically prefer milestones in lieu of longer term royalties just because of the greater certainty of getting those over a shorter period of time. As we look into this year, where the projects are, we're not embedding the milestones in there. They'll be a little bit later out than 2021. Got it. That's helpful. Regarding the subscription versus CapEx mix, obviously, 30% subscription that you see this quarter, just wondering what kind of mix you are expecting for the second half and going forward. I know you previously mentioned that you probably expect to see a higher uptick in subscription mix in 4Q once it's got more time on the market. Should we be thinking about maybe it can reach a 50/50 mix, or what's the right ballpark to think about? Yeah, we're not giving the mix between the two right now. It's still relatively new. It's been out for just about a quarter. We think we made good progress with getting three orders placed in Q2 and then obviously shipped in Q3. We'll continue to give you updates throughout this year on bookings that we do there and provide you color as that materializes. Our guidance range of greater than 45 obviously includes what we think is going to be placed on the subscription TechAccess model as well. Got you. Maybe on a higher level, taking a step back, I was wondering how you guys are comparing the pros and cons of the subscription model versus a center of excellence model or BioFoundry service model. In the long term, how should we think about the distribution of your potential customers across these different monetization models, right? The current way I'm thinking about is you probably have partnership model for the high volume or marquee customers, subscription model for the low volume users, and then capital placement for those in the middle. Is that the right way to think about it? Based on your current customer funnel and conversations, where are you seeing the greatest appetite in terms of the different models? I'm particularly interested about the partnership versus capital sale model. Do you see one significantly increasing versus the other in the long term? Yeah. It's a great question, Julia. Let's talk high level, right? When we think about the biology markets, it starts in an R&D space. It moves in then to a discovery development space, and then moves back out into clinical trials, manufacturing, et cetera. If we think about that continuum for a moment, at the upfront side, there is a very large market, a very high volume business associated with the R&D efforts at academic institutions and translational centers around the world. There's a very high volume there. You get into discovery and development, which represents a funnel, right? You start with a lot of candidates that come in, they get whittled down until you find the one, and then you enter into these clinical trials where you start scaling up volume in terms of manufacturing and quality control and then back into the end. For Berkeley Lights, as we look at it, and that ties back into the three items that I mentioned in the prepared remarks and I refer to in terms of there is a very large, multi-billion dollars per year revenue opportunity in high throughput functional screening that exists in a high volume platform business in the early stage of that pipeline that I talked about, a very high value service business that exists in the middle, and then it comes back to a high volume platform business in manufacturing and QA/QC, right? So we see all three components, the high volume platform business, the high value service business, which leads to revenue for biological assets that Berkeley Lights has some level of ownership in. All are critically important. The question is, what is the transition and how do you go as a function of time? Of course, as you've seen through the history of Berkeley Lights, we started as a platform business. The platform business, really, through these R&D partnerships, we're able to understand the reach and develop the meaningful workflows and applications that can execute on our platform, that it further increases the value of our platform and the reach of our platform into the R&D activities and into discovery and development and into manufacturing and all of these different markets. I think a standard question, well, which one is most important? Well, they're all important at different time points, and right now building up the workflow platform capabilities and partnering with additional customers in the R&D space are critically important, and those lead to the downstream revenue. All of this folds into our overall strategy in regards to how we see things. As I think what you can see right now, what is the market saying in regards to the value of Berkeley Lights' platform? With the Thermo deal and the Bayer deal, I think you're seeing an increasing appetite for the level of capabilities that Berkeley Lights can perform that other platforms just can't perform. And so as we continue to further develop our business development team, we'll see more of these partnerships which will add additional TAM and SAM to our overall opportunity, which will lead to that future multi-billion dollar revenue opportunity. Does that help provide some color to the question, Julia? Yep, very helpful. Thank you. Julia, I would say our go-to market strategy when you look at a capital sales program, a subscription type program, now what we're announcing here is that high throughput functional screening service business, they're all key pillars of it. I think that service business is pretty exciting because what we're doing is we're innovating new things with customers, and we're having that roll through what we describe as our BioFoundry, where we have access to the data and everything else. Ultimately, as we've always said, there will be some workflows that we deem so valuable that we've created that we will only offer as a service or only offer as a subscription because it's the best way for us to monetize the value of the workflow that comes off of that. You just simply can't do that in a CapEx sale. I think when you look at the data that comes off that, as well as our ability to control a greater portion of the economics, form the value that we're creating on that, the service business is a great foothold into that, and we're pretty excited with that and couldn't be more excited to be working with Bayer on this as well. Got it. Thanks for all the color. Our next question comes from Mark Massaro with BTIG. Hey, guys. Thanks so much for taking the question. I had a chance to speak with one of your customers on the cell line development side. I'm curious if you can just comment about the cell line development 2.1 workflow. Anyway, one of the customers indicated that their workflow went from about three months or more to about one week using your platform. I guess, can you just speak to how the new workflow's going and maybe just talk about whether or not this is indicative of other customers you're working with? Yeah, Mark, I'll jump in here. Thanks for the question and great to talk to you again. In the cell line development market, this is pretty typical, the three months to one week. Where really the savings are is that leveraging the microfluidic capabilities with our assays. Actually, there's additional savings in there that have to do with the cloning and clonality that we provide. The cell line development 2.0 and 2.1 continue to move forward. Our customers continue to leverage them and transition. Most of our customers have transitioned from cell line development 1.0 to 2.0 at this time. Terrific. I guess I didn't hear you guys talk about your development work, specifically in SynBio and your work with Ginkgo. Can you just talk about workflow development there, in yeasts and bacteria, specifically E. coli? Are you still on track to deliver workflows to Ginkgo likely later this year? Yeah. We're still on track, and the tech teams are of course, in contact and working on how do we transfer workflows developed here to workflows developed there. We continue to make great progress with the Ginkgo team, and it's a great partnership. In this world, we're super happy to be working with one of the most innovative and forward-looking companies in SynBio and Ginkgo Bioworks. We're happy to leverage our high throughput functional screening to help them not only accelerate their overall throughput but reduce the overall cost to do these screenings, which were developed in antibody therapeutics markets, but moving the basic capability into the SynBio space. Okay. Maybe a clarification question, Eric. Did I hear that the viral vector deal is only available on a subscription model? I guess, can you just maybe help us think about what workflows are available subscription only versus through taking of a Beacon or Lightning? Yeah. It's a bit of a transition as we start to understand, and Kurt alluded to this earlier. As we're understanding the value we create. There's a significant value in creating a stable cell line for viral vector manufacturing. That workflow, I can't sell a Beacon for a high enough price to actually capture the value that's created. The business model is that this will therefore only be available through subscription. There will be other workflows which will only be available in our BioFoundry. As we continue to add high-value capabilities, we will limit access to some of these things, to whether it's just BioFoundry or just subscription, and that's how we'll take those to market. Excellent. Maybe last one for me, I guess another clarification question. This is the first time you've done a deal with a company in the ag sector. Obviously, I'm talking about Bayer. Can you talk about whether or not that consists of capital placements of either the Beacon or the Lightning, or if that is also sort of in a subscription model? Then, I think you already answered my question on Thermo. Sounds like that is on the subscription model. I think it would be helpful, I know this question has been asked, but as we think about your business over the next year or two, how should we think about the mix between a subscription model versus capital placements and workflows? Yeah. Thanks. You know. Oh, go ahead, Kurt. Go ahead, Eric. On the platform versus service question, this is an R&D service engagement, meaning that Bayer will send us stuff, we will perform the high throughput functional screening here, and we will send them information and stuff back. That is on the service side of things, Mark. Kurt, you were going to jump in on the other side of the equation. I was going to say the same thing. They're not going to have Beacons running at their location. They're going to be utilizing our BioFoundry, and we're providing the service that Eric described there. Okay. Thanks, guys. Congrats on the quarter. Thank you. Our next question comes from Paul Knight with KeyBanc. Hey, guys. Could you talk where you are with your business development team? I know the goal was to add this year, but could you frame that up, please? Yeah. We're obviously not disclosing the exact number in each segment, but we've more than doubled that team in size, and you can see we've made some tremendous progress in terms of, in this year, signing Thermo and signing Bayer. You could see that in the business development and partnership line, where that's went from about $100,000 in Q2 of last year to $3.9 million in Q2 of this year. I guess you expect to be done with that, what, mid-year? When you say done with, in terms of growing the team or? Business development team, yeah. We're always looking for talent, and to the extent that we bring more people on and we can cultivate new business and new partnerships, and then there's the partnership alliance thereafter. We'll continue to add as the pipeline would see fit there. I think we'll always be looking for good talent at that standpoint. The team's reaching the critical mass, if that's what you're asking. Yeah. The installed base is what right now? We're at 92 at the end of Q2, and that does not include the three subscriptions that we took orders for but had not yet shipped. Got it. this quarter in Q3. It doesn't seem like any units are coming offline at customer locations. That's correct. We're seeing customers are utilizing the tools, and they have not decommissioned them. Yeah, it kind of historical paces of pull-through. Is that correct, Eric? Correct. Okay. Thank you. Thank you. I'm not showing any further questions at this time. I'd like to turn the call back over to our host. Okay. Appreciate everybody for joining the call, and we'll talk to you next quarter at this time. Thank you. Thanks so much. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.