Good morning. I'm Lauren Timmins from the Life Science Tools and Diagnostics team here at Jefferies, and it is my pleasure to introduce our next company, PacBio. All right, just to kick things off, maybe we can start with some of the exciting news flow recently around PacBio. We'll touch on the China, Thailand, and maybe to start, talk a little bit about Target ALS. They chose PacBio's HiFi sequencing to advance ALS research and the largest global genomic studies to date with more than 6,000 genomes. Maybe start with discussing some of the aims of that project. Yeah, so first of all, thank you for the opportunity to get in front of you today. We always love coming to Jefferies and seeing the team. You know, when you think about ALS, it really is a disease of the genome, and it requires a very comprehensive look at the genome. We've made a lot of progress on ALS over the years, but quite frankly, we're nowhere near where we need to be to really help these patients. Short-read sequencing and other technologies really haven't provided the insight that's required to truly understand the disease. We teamed up with them to do a long-read sequencing project using our technology, HiFi sequencing. As you know, HiFi sequencing is the most comprehensive and the most accurate view of the genome, full stop. What we have been able to do with advances in our technology over the last few years have increased the economic viability of doing these kinds of projects, as well as the improvements in the workflow have simplified actually looking at the biology of ALS, for example, using long-read sequencing. We are excited to see how this project unfolds and be the technology provider. No, that's great. Kind of on that topic with your HiFi, the recent deal to expand distribution in China. I know that kind of aligns with your thought process towards establishing HiFi sequencing as the method of choice in blood genomics. Maybe talk a little bit about the customers and lab networks you're planning to distribute to in China and kind of some details around that deal there. Yeah, sure. Howeray is our new distributor that we announced, one of our new distributors in China. We have a few different distributors in China, but Howeray's specialty is really in HLA and blood screening. They have a very strong market presence. Long-read sequencing for looking at complex regions, like HLA typing, is the ideal method. With the launch of the Vega system, the Vega system, which we started shipping in December and shipped 28 units in the first quarter globally as we're starting to scale that product up, was a great opportunity for them to get engaged with PacBio to drive that to their customers. They have a huge network of customers. For us, it expands our presence in China. It expands our footprint in a new application area where Howeray is arguably probably the leader in China of serving that part of the market. For us, it is a home run because now we will be able to place lots of Vega systems. We think over the coming years, that is the kind of instrument, the Vega instrument, that you could see hundreds of units across China, whether it is with Howeray or with our other distributors as well. Do you think there's any read-through right now from China around scrutiny on American NGS products? Have you been seeing any of that? You know, it is a complex area. Obviously, some of our competitors have been blacklisted, so to speak. I think that that creates an interesting dynamic. For PacBio and for HiFi sequencing in general, there really is no alternative in China for our technology. I would be surprised if, just because we're a U.S. company, that we see kind of a read-through from the other parts of the sequencing market. We haven't seen any indication of that yet. In fact, we've seen enthusiasm from our customers to keep pushing forward as we drive the cost of sequencing down and the scale of sequencing of what we can do up. Although we are certainly not immune to the tariff situations and the political environment, what we're seeing so far is we're seeing the Chinese market very friendly to us, and there are no alternatives. I think until there were alternatives, I would be surprised to see any change. Yeah, that's great. Kind of continuing on the scope of broadening the long-read market, your efforts to integrate whole genome sequencing for newborn screening in Thailand. You announced that project in May. Maybe talk a little bit about that and kind of what's going on there. Yeah, this is actually really, really exciting. This is really a national initiative led by Chulalongkorn University. That's a mouthful when you try to say that. They have an ambitious goal to introduce newborn screening using HiFi across the country. We've teamed up with them. In fact, this evening, there's a major meeting. I'll get the latest update on that 10:00 P.M. meeting this evening. I think that program is really, we're seeing seeds of programs like that in lots of places around the world where people want to have the most comprehensive look at the genome that they can if they're going to invest in newborn screening. That means looking at not only the variation of the DNA, but also the epigenome. The epigenetics associated with that and our technology enables you in the same run to be able to look at the SNPs and the indels, as well as major structural variations of the genome. We are able to see the whole genome where other technologies just cannot. On top of that, you get a phased genome. You look at the contribution from the mother's side and the contribution from the father's side with every single run. In a newborn screening context, now that we have more scale and better economics, it just makes sense to move towards these kind of third-generation technologies like what we have. Yeah. No, that's really great. Kind of on that topic, other players in the space have talked about kind of the under-penetrated market in newborn screening and kind of the big opportunity there. Where do you kind of see the sequencing opportunity growing there and evolving over time in kind of alignment with your product offerings? I do think that it's funny. I've been in the sequencing business for, gosh, over 20 years at this point. It's always been the dream that every baby born gets their genome sequenced. If you follow the evolution of this, first, there wasn't the technical capability. Then there wasn't the economic viability. Now we've got not only the technical capability, but the economic viability and the ability to see the whole picture. That's really kind of the spark that is lighting the fire to enable this around the world. We're seeing Thailand's just one small example. In the U.K., they're looking at this. In the United States, of course, there are programs already in place, not at whole genome scale yet, but that's moving along quite quickly. The infrastructure is now largely in place. Electronic health records, actually, that was an impediment for a long time because, okay, you get all this data. What do you do with it? How does it follow? How does it follow the child around through their lifetime? Because the point is not only uncovering any issues with the baby at birth, but really having that reference for the span of their life to see how the genome changes over time starts to help you understand early cancer detection. I think we finally have a lot of those pieces together. Now, reimbursement is still who pays for it? How much is it? That is still major questions that are getting worked out. We are seeing tens of thousands of scale projects happening now. I think that is really just the beginning of there are four million births in the United States every year. That's always been kind of a Holy Grail number where, okay, if every baby born gets a whole genome sequence, we fundamentally believe healthcare will be improved and also the scale of sequencing will continue to grow. Yeah. And on the topic too of HiFi continuing methylation detection. You talked about that with the Chinese University of Hong Kong and kind of that project. Where do you kind of see this improving areas for the HiFi tech and kind of when that will be implemented? Yeah, so we already have methyl-C detection on our systems today, and it performs actually really quite well. With the launch of our Spark Chemistry, which we launched in December, which is kind of our latest upgrade of our sequencing chemistry, we improved our methylation detection substantially. However, we partnered with the Chinese University of Hong Kong to license some of their technology that allows us to not only improve our methyl-C color, but also introduce hydroxymethyl-C onto our sequencing. With every run, you would get a hydroxymethyl-C status of the genome and also a methyl-A color. Now in humans, you do not see a lot of methyl-A. That is really more in microbial biology, et cetera. What is interesting is there are applications that leverage methyl-A to look at chromatin binding and to look at how, for those of you that are kind of uninitiated in all of this, it is how you regulate the genome. Having those advanced colors on the system that you get for free with every single run really gives researchers and clinicians a lot more flexibility and really comprehensive understanding. We will implement the technology associated with our partnership with the Chinese University of Hong Kong with our next rounds of software releases. What this is, is these are software releases that allow us to interpret the signals that we get from our sequencer more efficiently or more effectively. That will happen over the course of this year and into next year. Kind of just to round out in terms of market dynamics, I guess where are you seeing Illumina recently talked about their constellation reads and they plan to go into the long-read market. Maybe just talk a little bit about the competitive dynamics for the long-read market and kind of where you guys see that changing over time. Yeah, you know, it is quite interesting that major competitors like Illumina have been trying to look more like a long-read company over the last several years because there is a growing recognition that short-read sequencing technologies are just not adequate for germline human genetics. They may do really well in some of the oncology testing, but in human germline genetics, there is just so much more information that short-read technologies are leaving off the table. There is no wonder that companies are trying to figure out, can we sort of fit a square peg in a round hole by introducing kind of synthetic read technologies or other kinds of technologies to try to make their reads longer. The first thing I will say is, they are certainly more expensive, number one. Number two, the reads are certainly not longer. When they talk about long-reads, they're not talking 15-20 kilobases of DNA per read that we're looking at. They're talking a few thousand. In some applications, that may help them. In most applications, it's going to be cheaper and more effective to run HiFi. For us, it's a great acknowledgment of how important long-read sequencing truly is here and how we're making inroads. As we drive our economics to improve the overall cost of the sequencing, as we improve our workflow from end to end, which we've made major leaps forward over the last three years, we've become much, much more competitive. We're winning projects like newborn screening projects, for example, because of that. Our competitive positioning, quite frankly, has never been better. With the launch of the Vega system, we are expanding the number of customers, and we expect a very strong ramp of that. Of course, that is really important in this uncertain time with all of the capital funding challenges. As you grow the number of customers, ultimately, they go from the lower throughput instruments to the higher throughput instruments, which is all kind of core to our strategy and makes us quite competitive against all of the sequencing players, quite frankly. That's great. Maybe since you noted it about Vega, jump into some questions there. You said about 50% of Vega shipments in Q1 were new customers. Yep. Maybe kind of what's the breakdown of these customers and kind of where are you seeing or what's driving adoption in these new customers? Yeah, you know what's really exciting for us is Vega is helping us penetrate into the biopharma market, which we haven't had strong penetration in the past. That is a core area that we're focused on. Why are these pharma companies using it? It's because it's got the right level of throughput to look in kind of drug discovery mode at genomes, at epigenomes, et cetera. They're also looking at AAV and making sure that when you do your edits, you get the right edits. The Vega system is exactly the right throughput, and it's a great value in terms of the cost of the capital. It's not super expensive. The other area where we're penetrating more deeply is microbiology and small genomes, the microbiome research, metagenomics is becoming a more important aspect of our offering. Customers are using Vega because, quite frankly, they can get a tremendous level of scale for those smaller genomes for a very, very affordable price. We can do things that no other company can do, which I think is really powerful. Those are a few core areas where we're getting new customers. We're also seeing Vega uptake from core labs that may already have a Revio system, our flagship long-read sequencer. For shorter turnaround projects or if the Vega is already being used and doing a short run on a Vega System, we're seeing that as an opportunity. In fact, this is the fastest we've ever been able to build a substantial funnel. We expect to see scale-up of Vega unit shipments over the course of the year. We shipped, like I said before, 28 in the first quarter, and we think we can grow certainly from that number over the course of the year. You also noted for Vega reaching run rate production in 2H 2025. Is that still kind of a goal? Yeah. So what's happening right now is we've been scaling up Vega with our manufacturing partner. At the end of the second quarter, we switch from the kind of R&D production line to the full kind of standard production line. Now, there are two benefits to that. The first is we can manufacture at higher scale if we so choose. The second benefit is there's a substantial reduction in the cost per unit because now you're using the manufacturing technicians, not the R&D engineers, to manufacture the system. Part of our core strategies here right now, of course, are to drive gross margins up. We have lots of opportunities to do that. With Vega, we're going to naturally see a substantial uptake in gross margin in the second half of the year, which will help contribute to us exiting the year, in our view, well over 40% gross margin. No, that's great. And to kind of go back into 1Q a little bit, there's been some stock movement since you reported reduced guidance of $5,150,000 at the lower end from China and NIH headwinds. Maybe could you walk us through some of the things that you saw in the first quarter and maybe some early positive signals in 2Q that kind of lead you to your expectations into 2H? Sure. When we start, first of all, we lowered the low end of our guidance. We did not lower the top end of our guidance because we still see incredible opportunity over the course of this year. We just wanted to recognize that there is uncertainty in the market right now and that the market for higher-end capital equipment is certainly challenging and has been challenging. When you look at the highlights of Q1, the first thing you have to point at is the fact that we had all-time record consumable revenue. For those of you that do not know, this is a razor-blade business where we sell instruments and then we sell proprietary consumables that go on those instruments. We had over $20 million of consumable revenue in the first quarter, which was an all-time record for the company, which shows that the customers are using their system and they're generating more data than ever before. You can go back and look at the exponential curve that's been created with the number of petabytes being generated of sequence. Why does that matter? Because that helps drive future. The more sequencing that gets done, it begets more sequencing. We're starting that snowball phase where you're really seeing this exponential growth in the data. That's the first real highlight of the quarter. The second was, of course, the Vega in its first full quarter of launch in the backdrop of a tough capital environment, shipped 28 instruments. What was exciting to see, as you said before, half of them were new customers. Also on top of that, the sales cycle is dramatically shorter. We saw a much shorter sales cycle even with the new customers. I think that shows that there is more enthusiasm and more uptake for sequencing, for HiFi sequencing in particular with PacBio. The simple fact of the matter is the funding environment continues to be extremely challenging. On the flip side, the Revio system, we shipped 14 systems during the quarter in Q1. That was an okay result, and it was around our expectation. The market for Revio is significantly more than that, but we are sitting in this funding environment. Now you roll into the second quarter, what we are seeing is we are seeing the funnel continue to build very strongly for Vega. We are seeing the clinical customers adopting Revio and actually launching real LDT tests. For PacBio, that's a big deal because that's durable revenue. That's revenue that will reduce our dependence on NIH-funded sources. We're also seeing very strong European business. We saw that in the first quarter. I think we've said on both our calls, both the Q4 call in February and the call last month for Q1, that we see the European market as actually probably being our strongest market this year. We had some great wins in Q1 at, for example, the Institut Imagine in Paris. This is in rare disease. Lurie Children's, another rare disease. In the germline genetics market, we are really gaining traction, particularly in rare disease. That's continuing on. I think that will be a common theme. When you think about it, when you look at the totality of the sequencing market, by 2027, the sequencing market will probably be $8 billion-$9 billion, give or take, depending on what kinds of reports you look at. The germline part of that, the human genetics germline part of that market, is well over $3 billion. It is about $3.2 billion by our estimates. The reality is that we are just at the beginning of our penetration curve there. We have the product now. We have the portfolio of workflows, the automation, the informatics, lower DNA input quantities, which allows access to millions more samples that even 12 months ago we could not access. The combination of those things will give us the opportunity to penetrate that market substantially more. This is not creating a greenfield new market. This is replacing legacy old technologies like short-read sequencing with effectively third-generation sequencing technology, the most comprehensive view of the genome you can have. I think the second quarter, the capital environment continues to be tough. I do not think anyone is going to say anything any differently. People are using their instruments. The cycle time for Vega sales has continued to be very strong. On balance, we are very happy with how the business is performing right now. June is always the busiest month. We will see how we end up for the quarter. I am really excited about all of the progress we are making as a company. No, that's great. And then just one on Revio, a two-parter. You mentioned 90% of revenue-generating kits nearly now are with Spark Chemistry. Maybe talk a little bit about in 1Q, the shipments, the benefit of this chemistry over time. You expect all systems to kind of incorporate it. And then on Revio as well, you talked about cost improvements going into for systems and consumables in 2H, maybe what's driving those. Yeah. We'll start with the Spark Chemistry. The Spark Chemistry, we announced it at ASHG, which is a major conference in November. We started shipping it really at scale in January. What this chemistry does is it lowered our DNA input requirement four-fold down to 500 nanograms. As I just said, at 500 nanograms, we can access effectively the whole market. It really is an enabler of the newborn screening market, for example, because you imagine you can't really get that much DNA out of a baby or that baby, the DNA is precious and you want to make sure you use as little as possible to put through your system. We enabled lower input, which allows more samples to come to our system. The chemistry, we improved the chemistry such that we're getting more throughput. One of the hallmarks of our company is that we continue to improve our on-market systems both through the hardware, software, and the chemistry itself. This chemistry improvement is giving some customers up to a, what, a 46% increase in the amount of data for the same price. We are effectively improving their economics, enabling them to do larger-scale projects. With any new chemistry, customers typically will finish their current projects before they start new projects on new chemistry. During the first quarter, we were actually quite pleased to see how quickly people were recognizing, wow, this is a major breakthrough. We need to move on to this chemistry really quickly. By the second quarter, most of our customers are going to be, I do not ever want to say it will be 100%, but it will certainly be high 90s that will be using the chemistry because of the value that it provides. On the hardware side, we have made major progress on improving the software and the algorithms that actually call the bases. As a result, we have been able to take NVIDIA GPUs out of our system and use lower-level NVIDIA GPUs. That is what is driving the cost reductions on Revio. The way the inventory system works, the older manufactured instruments that have the more expensive GPUs are sitting in inventory. As those get sold down, the new ones come to customers. We think by the third quarter, we will be seeing the benefit of that. It is a pretty significant benefit. The combination of improving Vega margins, improving Revio margins, and increasing consumable revenue driving that product mix forward will be what is pushing the gross margin up over the course of the year. That's awesome. Yeah. Maybe a little bit on the sales force. What size is the sales force right now if you're planning to expand, if you're kind of segmenting between Vega shipments and Revio shipments? Just a little bit of color on there. Yeah. So the sales force we have right now, our sales force sells all the products. It's one portfolio of products. We do that by design because we don't ask, well, what instrument do you want? The question I want our sales team to ask is, what problems are you trying to solve so that we can help them in solving that technological problem? Today, we have a global sales force. We use distributors in, of course, we use distributors principally in Asia, a little bit in Southern Europe as well. We have about 60 sales reps that are in the sales process. We have made some structural changes. We did a restructuring in April. We restructured a little bit, but we really didn't change any of the fundamentals of how we go to market. That's great. Actually, on the topic of restructuring, you noted to lower annualized OpEx as part of the restructuring plan, about $45 million-$50 million. Could you maybe talk about that? It talks about prioritizing long reads, kind of ending short reads with Onso. Any strategic interest there, kind of the plan with the restructuring? Sure. Coming off of a very strong Q1, we did announce a restructuring because the reality is that we know the world is highly uncertain. We wanted to make sure that we stayed laser-focused on achieving positive cash flows exiting 2027. That is a fundamental mantra that we are pushing. We believe we can achieve our business objectives of continuing to grow, expanding gross margin with a lower cost base. That is why we did the restructuring. As part of that, we recognize that our strongest core competencies and strongest competitive advantages sit in the long read side of the market. We have made so much technological breakthrough in the last 12-18 months to enable us to see very clearly how we will get to the next generation of instrument, which will drive cost so that we can effectively be at cost parity with short-read sequencing and scale parity as well. By having both of those and seeing the clear technical path on how to get those products to market, it made more sense to focus and double down on that than to continue driving the high-throughput short-read sequencer. We put that program on pause. We have the Onso short-read sequencer sitting on the market today. We continue to fully support that market. We are continuing to sell the Onso Systems. It is not that we are, because there are parts of the market where that product makes some sense, but we are really putting our focus on the long-read part of the business because, like I said before, this is really third-generation technology. It is the ability to, at scale and prices fundamentally competitive with short-read sequencing, enable researchers and clinicians to fundamentally see the whole genome, see the whole epigenome, see all of the structural variation. We think with that, we will drive revenue growth, expanding gross margins, and ultimately positive cash flows exiting 2027. Great. That's a great end. We came to the end of time. Thank you so much for being here. It was a great discussion. Yeah, thank you.