Good afternoon, everyone. My name is Matt Sykes. I'm the life science tools and diagnostics analyst at Goldman Sachs. I have the pleasure of introducing the senior management team from Cytek Biosciences. CEO, Wenbin Jiang, to my right, and Patrik Jeanmonod, the CFO. Patrik, Wenbin, thank you very much for joining us today. Thank you. Maybe if you could just sort of start with two things. One, maybe for those in the room, introduce who Cytek Biosciences is, just a brief overview of the company and sort of the markets you are involved with. Two, reflect on Q1 results and sort of what your expectations are as we go into the second half of this year. I will first talk about what Cytek is, and Patrik is going to follow with the numbers. Cytek is a company specialized in cell analysis, and we provide advanced flow cytometry instrumentation, and solutions to support many life science labs, pharmaceutical companies, university core labs, for advanced research, as well as translational and clinical research applications. Maybe briefly, I'll talk about Cytek last year. We closed 2022 with a 28% growth rate over the prior year and landed about $164 million in revenue, very pleased with our numbers last year. Q1, slightly different story. We had a 6% growth rate over last year, coming out of an extraordinary year in Q1 of last year. In Q1, we also added the newly acquired Luminex business for one month, we closed the acquisition of our business, this business, in end of February, and we added one month of Luminex activity. The company is now transitioning to organic, non-organic information, and we'll provide that in the next quarters through the end of the year. The quarter was the reflection on the first quarter is mostly a little bit of headwind in the U.S. market. What we've seen is, eventually, the banking crisis has created some tension, and we've seen elongated sales cycle on closing the deals with some of the customers. At the same time, we also see continued demand for instrument. We've finally seen this elongated sales cycle in Q1. Overall, I think we're fairly pleased. I mean, we still have a fairly solid gross profit margin. It landed at 59%, we expect that gross profit margin to stay in that line or grow over the next couple of quarters, again, back in the 60s plus. Great. Thank you. Maybe, let's talk a little bit about the technology and flow cytometry. I mean, you have a full spectrum flow cytometry, instrumentation, and, you know, when we were doing work on this sector, we noted that there was a real lack of innovation in flow cytometry for quite some time, and then Cytek comes along and really has a differentiated instrument with the new technology. I'd love to kind of hear your view is how you feel Cytek is differentiated from the competitors. I think, yeah, flow cytometry by itself, and it started 30, 40 years ago, over the time, gradually evolved into a basic life science tools. Today you can find varieties of flow cytometers in almost every life science lab supporting from research to clinical applications. Over the time as the research drug discovers immunology, immuno-oncology continue to evolve with the new drug development, new research coming along, and they require more and more deeper understanding of the cells. The conventional flow cytometry start to hit a technology limit. This is when there's a market demand, and there's a needs, but the original technology is already unable to meet those needs, so Cytek comes along. What we have developed is a technology, we call it a Full Spectrum Profiling technology. In essence, that provides lots of more informations. Basically, we provide a technology that can capture all the informations without throwing away anything, any details. With that, what we have done is we provide a deeper understanding and analysis on the cells from immuno- from a human immune system perspective, and a deeper understanding. Second part is, the technology enable a lot sensitive studies, actually provide a lot of details and make it a lot more sensitive than the conventional technology. One of the important subject is conventional flow cytometry find it always difficult to be standardized across labs, across tools. Standardization is, in fact, important for many of the clinical trials. Cytek technology does provide those type of features, enable customer users to standardize, especially for CRO, to standardize across instrument, across labs, across different geometric locations for their tools. Finally, it's always important on the cost perspective, and you always would like to have the best results at the lowest possible cost. That's what our technology comes along. Got it. Thank you for that. Maybe if we're, you know, move on to the acquisition of Luminex, which I think was a pretty important milestone for Cytek. You know, when we kind of first saw that news, we felt it from an infrastructure standpoint, it was a really solid deal. You're inheriting a global commercial team, and then selling the Aurora Northern Lights platform, presumably into that Luminex installed base. Maybe could you talk about what progress you've made in terms of going after this installed base and where the training of that commercial team kind of stands at this point? Yeah, maybe I can start, and then maybe, Wenbin can augment. Looking at the integration, we will look at it from three angles: so people, process, and clients. When looking at the people side, we've fully integrated all the people here in the U.S. We have a final step in outside of U.S. and Europe. Outside of that, the people side is fully integrated. We had trainings in March for the customer-facing group in the U.S. We had training in Europe for the customer-facing group in April, and in Europe and in China. We feel like we made absolutely great progress, integrating that group. On the process side, we've fully integrated the manufacturing for the Amnis in the Seattle Amnis. That's fully integrated in our, in our systems. That's completed. The Guava, coming out of the Austin manufacturer, that still belongs to DiaSorin. That piece will be moved out of DiaSorin in the next couple months and will be moved to China. We're making good progress on that, too. Finally, on the client side, obviously, that deal has opened up a new avenue for us. I mean, so far, we've been able to strengthen the relationship with most of these clients. At the same time, we believe that there's continued opportunity for us to cross-sell, to upsell, and we are just at the beginning of this, of this journey. Maybe digging a little bit deeper in that, on the Guava's cost structure, you were trying to align that closer to the Northern Lights platform. In addition to the transition of three laser Guava users to the Northern Lights, where does sort of that stand today in terms of that integration of Guava into your product platform? The Guava product line obviously has a much lower gross profit margin, which is not very attractive to Cytek. It's also a slightly lower gross profit margin and eventually, a lower gross profit margin to expect in the short term. We are very aggressive at looking at recosting. Obviously, moving the Guava business line to China will help. Also in the redesigning, some of the platform will also help. I'm not expecting the gross profit margin to go up substantially this year just because of the Guava profitability or profit margin, I should say. Just on Amnis, I mean, I think it gave you some really good imaging technology. Can you talk about what you found attractive within Amnis, and you've talked a little bit about how that integration's completed, but maybe from a technology standpoint, what you gained from the Amnis platform? Yeah, I think, if you, some of you, if you may have attended, the annual CYTO meeting in Montreal last month, actually, you will realize, there are two major themes in that show. One is the full spectrum technology pioneered by Cytek, and now really, now today become a trend and a movement, and the whole industry is moving towards the field Cytek has created and the direction. The second theme is actually the imaging flow cytometry. We all know, Amnis imaging flow cytometry is a leader in that space, and now Cytek owns both of those technologies. Today, really the future, also the direction, and the whole industry is moving toward. Now, I think with regarding to the Amnis technology, one aspect is the precise and the clear, high-resolution imaging at very fast speed to enable users to actually capture on a cell level, cell by cell, and for them to understand, to analyze, not only between the cells as well as inside the cells, the kind of information. Second is the AI technology for the data analysis. That actually helps, enables the rapid, fast detection and analysis based on imaging provided by the tool. Those are the things that really fascinated and attracted Cytek, and we feel not only the Amnis flow cytometry imaging by itself from the analysis perspective, has great potential to penetrate into Cytek's customer base, support Cytek's customer needs. In addition, that technology, by integrating that technology with Cytek's Full Spectrum, will provide a new level of tools or technologies based on the imaging, as well as, the to enable customers to do imaging-based sorting. Those are the type of direction and the technology we are studying, we are moving toward going forward. Great. That's really helpful, explanation. Patrik, we've talked in the past about the reagents business. I mean, when you first started out, you were a hardware business, and your customers were using third-party reagents, but over time, you've built up your own reagent capability. Could you maybe give us a sense of kind of where you stand with that, what progress you've made, what the customer feedback has been to the Cytek reagents? Yeah, great question. Before I go into the reagent, maybe I wanna remind the group here that our long-term strategy is investing in four pillars. These four pillars are the instruments, which we've just closed on our Luminex acquisition. That's number one pillar. Application, I'll come back. Bioinformatics, and finally, clinical. Long-term strategy, we have a fairly defined projects. On the reagent side, last year we communicated that we would be mid-single digit as a% of revenue for reagent. We have seen that revenue component of ours increase substantially, and it's one of the fastest growing line item embedded in the product, it's not broken out, but at the same time, I can say it's growing. This year we still expect to continue to grow, and we believe we're gonna be closer to the high single-digit the total revenue. Why only single-digit? It's just because we added revenue from Luminex, and that dilutes our reagent business a little bit. Overall, customers have come back and buying these kits, and I'm fairly pleased to see where we are with the, these reagent. It's not just in the U.S., but it's also in Europe. Very pleased with that. Actually, I want to add a little bit on top. With regarding to Cytek Cloud, it is a bioinformatic system we have developed. One feature with Cytek Cloud is to help customers to design application panel, optimize panel, as well as to provide the data analysis capability. Through that process, to enable also customers to find the right reagents, to purchase the right reagents. This is platform, eventually going to help Cytek also to grow our consumable reagent business. Right. Actually, that platform has been very successful so far, and we accumulated thousands of users already in a very short period of time. Just to follow up on that, because I think it's a really interesting point. Do you think the cloud actually adds to the stickiness of the customer base? You're creating a bit of a captive audience there with that cloud, and maybe talk a little bit about what bioinformatics can add to sort of customer loyalty and stickiness of those customers. Absolutely. As you know, what we have is really advanced tools out there and support very complex panels and applications. From a user perspective, they definitely appreciate if the company can help with regarding to the application panel designs. Cytek Cloud makes it a lot easier for them. They can start from what we have provided. We have a base panel templates, and we have the right reagents optimized for Cytek's instrumentations. All of those enable customers to just put all those panels together then, and they can start to do the online virtual experiment before moving on to a real instrument they have in their labs. That quickly reduce their cost of experiment, reduce their development cycle time, and, in the end, help, with also, on the reagent side, they don't really have to try that many different versions, and we have this right there to help them. The reason why it has been very popular, right now among many of Cytek's users. Got it. Patrik, you mentioned at the outset, talking about the lengthening sales cycles, and I think one of the things that's been discussed at length in, during this week has been sort of the biotech, both emerging biotech and also large pharma, softening in demand. Could you talk a little bit about... You know, you spoke last quarter about the delayed orders from cautious customers. Have you realized some of those delayed orders, and how has the dynamic changed? Has it gotten better? Has it gotten worse? Stayed the same? Yeah. The way I would answer that is earlier this year, economists defined the macro environment as potential recession. In the last couple of weeks, now we're talking about a mild recession. I think we moved from a recession to mild recession and may eventually improving over time. What we've seen with our customer base, obviously the reaction, considering that we have instrument as a primary element for sale, is CapEx driven. CapEx driven is maybe one area that you can act quickly as a CFO if you wanna protect your cash, and I think we've seen some of that. To answer your question about what have we seen since? We've seen a level of rebound in April, but one month does not give you a trend. We're pleased with what we've seen. I think we continue to see strong demand for our instruments. We see strong demand for the cell sorter. We crossed the 100-instrument line just a few weeks back. If I make an analogy to when we launched the analyzer, so the analyzer, the Aurora analyzer, was launched in 2017, and in December of 2018, we had 100 instruments. It's a fairly similar pattern, and I think we are pleased to see how it follows this pattern. What we're also seeing is that customers now not only by the Aurora, but also the cell sorter combined, as a combined sale. We've seen, a positive behavior, from customers, and, we see that as positive going forward. Yeah, I wanted to touch on this cell sorter, 'cause you know, as you said, you recently announced the hundredth cell sorter sale. That's one of the higher ticket items that you do sell, it's interesting to see that the momentum continues that. Is it because of that combined sale that's driving that, or is the level of differentiation in terms of your cell sorter really allowing it to kind of disconnect a bit from sort of that softening end market demand? Well, I can start with My view on that is, obviously, the fact that the cell sorter combines so nicely with the Aurora platform makes it fairly easy to sell together as a bundle sales. I think because we have such a large customer base that are already using the Aurora, pairing with a cell sorter makes a lot of sense. Overall, I think the technology is superior. I think it's a lot easier to use from the customer side. I mean, overall, I think the cell sorter will continue to see demand and very strong demand for it. Yeah, I would like to add on top of that. As you know, over the time, we have developed, accumulated a large install base for our Aurora tools analyzers. Along with that, a lot of panels and applications are developed on our tools. Many of those customers says, "Okay," they use our tools and discover many new things and the sales. They would really like to go further deeper onto that, says, "Okay, can I grab those sales, certain population out, sort those out, so to enable me to do further analysis?" Under that assumptions, what they really need is a tool that can use the same panel already being used on the analyzer. This is where Cytek Aurora cell sorter comes along, because no other cell sorter is going to be able to leverage, use the same panel already being used on our analyzer. Cytek cell sorter will therefore be a natural choice out there to enable customers to use the same panel. Actually, the Cytek cell sorter and the Cytek analyzers are pretty much, from the analysis perspective, they are identical. The panels, you can move back and forth. That did really give us an advantage and also secured our customer base for our cell sorters. Got it. Just talking about sort of the CapEx decisions, you have the Aurora and the Northern Lights on the analyzer side, and then Northern Lights is a lower price point than Aurora. Could you talk about maybe, are customers choosing the Northern Lights, just given the budget constraints they have? Or are you seeing, in terms of a mix of Aurora and Northern Lights, a similar mix that you've seen previously? Yeah. We, since middle of last year, we've had a considered effort to push the Northern Lights business line. I mean, Aurora instrument came out in 2017, later on, the Northern Lights. We've seen a amazing growth in the Aurora, but we also believe that there's opportunity in that mid-market element, and we've pushed on the Northern Lights. We see a demand for the Northern Lights and increased demand as well. Overall, I think a positive trend with all the same customers, in the end, it's biotech and pharmaceutical. You're achieving similar margins for the both of those instruments? Yes, very much so. In terms of China, you had a very strong quarter last quarter, overall international, but China as well. I know you've been making a bigger push into the clinical market in China, maybe could you talk a little bit about the strength that you're seeing in China, and whether you feel like that's sustainable over the course of this year? Overall, we have been very successful on the clinical application side in the China market. This is also partially contributed to China as a different from regulatory perspective. China clear the instruments separately from the reagents from solutions. You know, in the U.S., 510(k), they do this all together as a full solution. China does this separately. Now, that enable us to, in the early days, to have our instruments cleared for our Northern Lights-CLC. Right afterwards, we have developed the solutions on the Northern Lights-CLC side to enable many of the high complexity leukemia diagnostic applications. This is something, conventional instrument are challenged. By doing so, we have a big panel, and really making such work a lot easier for our customers. We penetrated into many of those leukemia labs in China using our Northern Lights-CLC. That's partially the kind of success we have over there. Now, of course, clinical is different from territory to territory, and the success in China not necessarily means for the U.S. The U.S., we have a separate clinical activities ongoing. We are closely engaged with FDA and the U.S. clinical clearance. In the meantime, we have launched this MR leukemia panels, we're leveraging this leukemia panel. We work with many labs in the U.S. as well, to develop LDT solutions. to support, to enable our partners to get the leukemia solution cleared, so they can support their version of the MRD diagnostics over there. This is one of the direction of the company, not only in the U.S., as well as Europe, Asia. You started to answer my next question, which was. Mm-hmm. -sort of the applicability of the local clinical markets. I think maybe expanding on what you just said, you know, talk about the U.S. clinical market. It's a very large market, so there's a significant opportunity there. There are some, you know, challenges to getting into it. Maybe talk about how you feel like in terms of penetration, what you can do with LDT versus what do you think it opens up post, you know, FDA clearance as you continue to work with them? Yeah. From clinical, U.S. clinical perspective, there are two part of the clinical reimbursement. One is 510(k) cleared. Company provides the full solution, the instrument, along with the reagent panels. The second part is the LDT. When we look at Cytek technology and what we really excel is those larger panels to reduce the tube size, the number of tubes. We can provide high dimensional parameters with a single tube. Through that process, we can really help to reduce the overall cost of doing the analysis, and as well as to shorten the time and then reduce the trial number of tubes and improve, increase the sensitivity, as you don't really have to split your precious samples into multiple tubes. With all the precious cells into a single tube, that can help you to find the right cells of interest. This is what we feel the benefits, advantages of the tools, of the technology we have provided, the reason why we are, in from LDT perspective, focusing on that aspect, in the U.S. market for now. Got it. Patrik, going back to the first quarter, you revised the 2023 organic revenue outlook lower. You increased Luminex revenue contribution. Could maybe walk us through some of the puts and takes of that lower guide? I think some of it likely has to do with sort of the lengthening sales cycle that you've already kind of walked through, maybe talk to us a little bit about looking at just the organic kind of base business growth, what were some of the puts and takes in that guidance lowering? One expectation that we had with the acquisition of Luminex was to be able to convert some of the Guava customers into Northern Lights. What we discovered is that the Guava instrument has some technical capabilities that the Northern Lights system does not have today. One of them is the Guava platform actually has a very simple menu process that's I would say less sophisticated than the Northern Lights. For the customer base, let's say it is an element that is driving that. As a result, we've lowered our Northern Lights revenue a little bit and increased the Luminex revenue. That's a little bit of puts and takes. Got it. Maybe talk a little bit about on the margin side. You mentioned the 59%, and you expected to kind of hold that line. On the operating margin side, I think sometimes it gets lost, just given the sort of dynamic of companies that were coming public when you did. You were one of the few that actually was profitable at the time and continue to be. Maybe talk a little bit about OpEx, operating margin expectations over the course of this year. Yeah, thanks for the question. I mean, we have that gross profit margin of about 60%, and obviously that's gonna support some of the SG&A. We're gonna continue to invest in SG&A, and we have last year. We're gonna continue to invest in sales and marketing and R&D, but also G&A, as a publicly traded organization. What we will do at the same time is manage our income statement so that we remain friendly to our P&L. What I mean by that is, one key area of spend is obviously headcount, and with the addition of about 140 people from Luminex, we will manage our total headcount to remain within what we believe is getting us to a profitable stage on an annual basis. We as an organization, we're committed to remain profitable on an annual basis, even at the net income level. Maybe talk a little bit about the what came with the Luminex acquisition was a significant commercial presence, and therefore, how does that factor into SG&A spend? Without Luminex, you probably would have been building up the commercial team. With Luminex, you might not actually have to do that. How should we think about SG&A spend over the course of the year? I think we'll see a little bit of a transition phase in the next one, two, maybe three quarters, where we're gonna integrate obviously, the team. We're gonna push the top line on the Luminex and organic side. As we integrate the staff into the sales group and marketing and field service engineering groups, the expectation is for us to improve the gross profit margin just because of scale, and also to continue to see our operating margin improve over time. The expectation is that we should see some of that already happen maybe not in the Q2, but in the latter part of this year. Just to add on top of that. Now with our organic growth, or on our budget plan, we already have a plan, a need to add additional commercial people. The Luminex acquisition actually helps us to have those people right out there. Of course, some areas there might be some redundancy. Most of those areas, if you take a look at the most of the people they have from Luminex side, Europe, APAC, this is an area and we had planned to grow substantially, and Luminex has been helping us to shorten the time to hire. Also, though all of those are very experienced experts in the flow cytometry space, which are actually kind of difficult, takes a long time to add if we have to hire organically. This is another advantage, another benefits of having this Luminex acquisition in place. Patrik, just, you know, Cytek has historically followed a seasonal pattern for revenue, skewed towards the back half, and you cited this year will be, there'll be some, maybe a little additional seasonality concentrated in the back half of the year. Could you maybe talk about how we should think about this dynamic going forward? It's fairly typical of the industry, so it's not a Cytek necessarily specific comment, but maybe talk about sort of, how you deal with the seasonality, and then is the additional sort of back half weighted? Is there some expectation of recovery also baked in there, or is this just the normal seasonality that you typically see? On the seasonality, you're right. Cytek have seen, if I look back to the last three, four years, I mean, we've always seen a second half that's a little bit softer than the second half or a 43, 50+%. This is not gonna be different. With, in addition, a little bit of a headwind, considering the macro environment that we've seen. The expectation for us is to have a second half that's gonna be a little stronger, just because we're also adding that customer-facing group from Luminex that's gonna be fully trained, that needs to be that needs to be fully integrated in our system. I think we are making great progress towards that, and I think the company has executed, if I look at the last four or five years, quite well, along all these lines, and I believe that we are in a similar situation. Got it. Just in the time we have left, you obviously did a larger, well, for you, a larger acquisition in Luminex, but how are you thinking about sort of capital deployment and M&A in this landscape in terms of where valuations are and where gaps are in your portfolio? I mean, we'll continue to look at the M&A. I mean, we're gonna remain opportunistic. I mean, we have $300+ million in cash. We've put a little bit of money aside for the buyback, which we announced a couple of weeks ago, where we announced a $50 million buyback. So that will happen, and we've reserved some of that. We'll look at... We never stopped really looking at acquisitions, so I think we'll continue to look into those. As we finalize the integration of Luminex, I believe that we would be ready for next acquisition, might be later this year or beginning of next year. There are key areas, going back to the four pillars, I think we've invested now in the instrument side. I think that's still key areas that we can further invest into for maybe at a different time, we can talk about it. Okay. Cool, we'll leave it for another time. We are running out of time, but thank you very much, Wenbin Patrik, we really appreciate it. Thank you. Thank you. Yeah.