Good afternoon, everyone, and welcome to the PacBio first quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touch-tone phones. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Todd Friedman, Investor Relations. Sir, please go ahead. Good afternoon, and welcome to PacBio's first quarter 2025 earnings conference call. Earlier today, we issued a press release outlining the financial results we'll be discussing on today's call, a copy of which is available on the Investor section of our website at www.pacb.com or as furnished on Form 8-K available on the Securities and Exchange Commission website at www.sec.gov. A copy of our earnings presentation is also available on the Investor section of our website. With me today are Christian Henry, President and Chief Executive Officer, and Jim Gibson, Chief Financial Officer. In today's call, we will be making forward-looking statements, including, among others, statements regarding predictions, estimates, expectations, and guidance. You should not place undue reliance on forward-looking statements because they are subject to assumptions, risks, and uncertainties that could cause their actual results to differ materially from those projected or discussed. Please review our SEC filings, including our most recent Forms 10-Q and 10-K, and our press releases, to better understand the risks and uncertainties that could cause results to differ. We disclaim any obligation to update or revise these forward-looking statements except as required by law. We will also present certain financial information on a non-GAAP basis, which is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the company's operating results as reported under U.S. GAAP. Reconciliations between historical U.S. GAAP and non-GAAP results are presented in our earnings release, which is available on the Investor section of our website. For future periods, we are unable to reconcile non-GAAP gross margin and non-GAAP operating expenses without unreasonable effort due to the uncertainty regarding, among other matters, certain acquisition-related items that may arise during the year. A recording of today's call will be available shortly after the live call in the Investor section of our website. Those electing to use the replay are cautioned that forward-looking statements may differ or change materially after the completion of the live call. I will now turn the call over to Christian. Thank you, and good afternoon, everyone. Today, I'll share our first quarter 2025 results, highlight recent commercial and strategic progress, and outline our expectations for the remainder of the year. Following my remarks, Jim Gibson, our new Chief Financial Officer, will discuss our financial results and guidance in much more detail. We reported first quarter 2025 revenue of $37.2 million, which is slightly above our preliminary estimate shared on April 9th and consistent with our internal expectations. Instrument revenue for the quarter was $11 million, lower than compared to the prior year, largely reflecting increased uncertainty in academic funding, particularly in the United States. In total, we shipped 12 Revio systems and 28 Vega systems, bringing cumulative shipments to 282 Revio systems and 35 Vega systems. To provide more transparency into our customer dynamics, we've introduced new metrics on slides four and five of our Investor presentation, which break out shipment dollars by customer type. While we don't expect to share this segmentation every quarter, we believe it offers helpful context, particularly in light of the current market conditions. As shown on slide four in our Q1 Academic and Research Institute segment, we represented the lowest percentage of instrument shipments since the Revio launch. We believe that this is the direct result of increased funding pressures our customers are seeing with respect to capital equipment purchases. By contrast, instrument shipments to our other customer segments have remained largely stable over the past several quarters. Notably, we saw growth among our hospital and clinic customers, reflecting continued momentum for HiFi sequencing in clinical and translational research settings. Despite broader funding headwinds, we continue to attract new customers to PacBio. Roughly half of all Vega and Revio systems shipped in Q1 went to new instrument customers, further showing the expanding market appeal of our HiFi technology. While macroeconomic pressures weighed on system placements, consumables showed strong growth in the quarter. In the first quarter of 2025, consumable revenue reached a record $20.1 million, reflecting 26% year-over-year growth and steady utilization across our growing base of Revio systems. Typical fiscal year-end purchasing in Japan also contributed to the strong performance. Notably, unlike instrument shipments, consumable demand from our academic and research institution customers remained stable compared to prior quarters, indicating more resilience in usage-driven spend versus capital purchases. Further underscoring HiFi adoption, total petabase output from PacBio long-read sequencers increased 37% year-over-year, highlighting continued scaling across our installed base. Turning to our full-year outlook, the macroeconomic environment remains exceptionally challenging. Since our April press release, the impact of newly implemented tariffs between the U.S. and China, combined with additional pressure from proposed NIH budget reductions for fiscal year 2026, have introduced incremental risks that could have an impact on revenue in 2025. In light of these developments, we are adjusting the lower end of our previously guided revenue range by $5 million. We now expect full-year 2025 revenue to be between $150 million and $170 million. The environment remains dynamic, and should tariff conditions or academic funding further deteriorate, we may face additional headwinds. That said, we are confident in our strategic direction, anchored by strong customer interest in long-read sequencing, continued momentum in the adoption of HiFi, and a robust innovation map. We are also committed to our plan of turning cash flow positive as we exit 2027 and remain focused on disciplined cost management to reduce our cash burn. In response to ongoing market uncertainty and headwinds in the industry, we announced and executed on a restructuring plan in April designed to narrow our strategic focus and reduce our operating costs. Through reductions in headcount and non-headcount-related expenses across all functions in our organization, we expect to lower our annualized non-GAAP operating expense run rate by approximately $45 million-$50 million by year-end. Following these cost reduction measures, we are concentrating our efforts on our highest impact long-read platform initiatives. We continue to advance development programs aimed at enhancing our existing platforms, such as Revio and Vega, including the future launch of multi-use smart cells. This innovation is designed to further reduce sequencing costs for our customers to unlock higher sequencing volume while simultaneously improving our consumable gross margins. The development program is progressing quickly, and we've demonstrated high-quality, repeatable reuse results internally. Additionally, we are accelerating development efforts for our ultra-high-throughput long-read sequencing system. This next-generation platform is expected to significantly increase throughput, enabling whole human genome sequencing costs at or near price parity with short-read technologies. I'd also like to provide a brief update on how our restructuring initiative has impacted our short-read sequencing strategy. While we continue to see strategic value in providing both long-read and short-read sequencing technologies to the market, the current macroeconomic conditions necessitate focusing our resources and investments on areas where we believe we can achieve the greatest market share gains and hold the strongest competitive differentiation. Based on these criteria, we are prioritizing our HiFi technology and the long-read sequencing market and have made the decision to pause development of our high-throughput short-read sequencing platform. Although we have paused our development of the high-throughput short-read platform, we remain fully committed to selling the Onso platform and supporting our current Onso customers through ongoing commercial support and consumable supply. Moving on to product updates, in the first quarter, we continue to roll out our new SPRQ chemistry, which significantly enhances Revio's data output and performance while reducing the amount of DNA input required. Customer uptake has exceeded expectations, with nearly 90% of our Revio reagent kit shipments in the first quarter being SPRQ chemistry. We're certainly pleased with our customers' response. Early adopters like Signios Biosciences, a global leader in genetic testing services, reported yield increases of 46% relative to their experience with the version one chemistry and emphasized how SPRQ's lower sample input requirements have unlocked the ability to sequence previously inaccessible samples. Similarly, the University of Bern highlighted substantial productivity and cost efficiency improvements across various genomic research applications. Turning to Vega, early customer response has been very encouraging. Users are achieving strong yields, consistently exceeding our specification of 60 gigabases of HiFi data per smart cell, and deploying the platform across a wide range of applications. For example, the Integrated Microbiome Resource at Dalhousie University is using Vega for microbial genomics and eDNA amplicon sequencing for worldwide client samples, while Elegen is applying to amplicon sequencing in support of DNA synthesis workflows. We're also seeing the adoption in labs for gene editing research and targeted sequencing applications. These early use cases reflect Vega's accessibility, ease of use, and versatility, enabling us to broaden our customer base, expand into new markets, and bring HiFi sequencing into new labs beyond the traditional large-scale whole genome applications. Notably, approximately 50% of Vega shipments through Q1 were to new-to-PacBio instrument customers. Looking ahead, we expect to continue ramping Vega manufacturing through the second quarter and reach a run rate production in the second half of 2025. On the informatics front, we recently announced a licensing agreement with the Chinese University of Hong Kong and the Center for Novostics to integrate advanced deep learning models into our sequencing workflows, significantly enhancing methylation detection accuracy and enabling comprehensive analysis of critical epigenetic markers such as 5mc, 6ma, and native 5hmc. The ability to profile 5hmc, a dynamic tissue-specific marker implemented in brain development, cancer, and neurodegenerative diseases, opens new opportunities in liquid biopsy, cancer detection, and cell-free DNA analysis. Several customers, including clinical customers like GeneDx and Children's Mercy Kansas City Hospital, have recently implemented methylation analysis into their tests, and we believe that the addition of these new models will further strengthen our platform's leadership in epigenetic sequencing and help enable clinical researchers to find greater insights from HiFi genomes. Moving on to other recent highlights, we are proud to have been selected as the technology partner for the Davos Alzheimer's Collaborative's North American Dementia Registry Project. This initiative aims to build a comprehensive multi-omics dataset, advancing global understanding of Alzheimer's genetics, especially within diverse and underrepresented populations. We also continue to gain momentum with our new and existing clinically focused customers in the first quarter, especially with the hospital and clinic customer base. Revio placements in the quarter included leading institutions such as the Lurie Children's Hospital in Chicago, Imagine Institute in France, and the Institute of Medical Genetics at the University of Zurich. These institutions anticipate leveraging Revio primarily to improve genetic disease testing capabilities and solve more cases for variant detection previously missed with other technologies. Additionally, we've established a pioneering collaboration with Chulalongkorn University in Thailand to integrate PacBio's whole genome sequencing into their national newborn screening research program, the first initiative of its kind in Southeast Asia. This groundbreaking project aims to leverage HiFi's unique capability to reveal previously undetected genetic variants, significantly enhancing the precision of early-life genetic screening. Finally, we are also pleased to share the initial results from our annual customer survey, which shows a net promoter score of over 50, which is widely considered an excellent rating, underscoring our commitment to customer satisfaction, innovative product development, and exceptional customer support. We've also had the opportunity to connect directly with customers through our global PRISM 2025 event series, our flagship forum for engaging the genomics community and showcasing the future of long-read sequencing. Events held across Asia, Europe, and the United States have brought together researchers, clinicians, and partners to explore the latest PacBio innovations and share real-world insights. At each stop, we've seen strong engagement and enthusiasm, particularly around the accessibility of Vega, the performance gains delivered by SPRQ, and the expanding role of HiFi Sequencing in clinical research. We look forward to concluding this year's series next week in Boston. Lastly, I'd like to introduce Jim Gibson, our new CFO, who joined PacBio on March 31st. Jim brings over three decades of financial leadership experience across technology, healthcare, and life sciences, including at organizations like Apple, Tesla, and Netflix, as they went through significant transformation and growth. We look forward to his leadership and financial stewardship as we continue building PacBio into a scalable, profitable, and cash flow positive business. With that, I will now hand the call over to Jim. Jim? Thank you, Christian. I'm incredibly excited to join PacBio. The company's strategy and mission resonate deeply with me, and I believe we're just beginning to unlock the full potential of what this company can deliver to the life sciences community. I look forward to meeting our customers, partners, and investors in the months ahead. Now turning to our financial results, we'll be discussing non-GAAP results, which include non-cash, stock-based compensation expense. I encourage you to review the reconciliation of GAAP to non-GAAP financial measures in our earnings press release. As discussed, we reported $37.2 million in product, service, and other revenue in the first quarter of 2025, compared to $38.8 million in the first quarter of 2024. Instrument revenue in the first quarter was $11 million, a decrease of 42% from $19 million in the first quarter of 2024 due to lower Revio system shipments. We shipped 12 Revio systems in the first quarter of 2025, compared to 28 Revio systems in the first quarter of 2024. Additionally, we shipped 28 Vega systems in the first quarter of 2025. We ended the quarter with 282 cumulative Revio system shipments and 35 cumulative Vega system shipments. Turning to consumables, revenue of $20.1 million in the first quarter increased 26% from $16 million in the first quarter of last year, with annualized Revio pull-through per system of approximately $236,000. Finally, service and other revenue was $6 million in the first quarter of 2025, compared to $3.8 million in the first quarter of 2024, driven by an increase in service contract revenue related to Revio. From a regional perspective, each region reported year-over-year growth in consumable revenue offset by instrument headwinds. Americas revenue of $16.3 million decreased 8% compared to the first quarter of 2024, with the region continuing to be impacted by government funding headwinds and NIH funding uncertainty. For Asia-Pacific, revenue of $11.6 million decreased 9% compared to the first quarter of 2024. Consumables were particularly strong in the region as Revio system utilization increased to its highest level since its launch. Complementing the increased utilization, customers in Japan received their typical fiscal year-end stocking orders, and some customers in China made purchases ahead of potential tariffs. Finally, EMEA revenue of approximately $9.3 million increased 11% compared to the first quarter of 2024. Europe, in particular, saw strong Revio placements in the hospital and clinic customer base. Moving down the P&L, first quarter 2025 non-GAAP gross profit of $15 million represented a non-GAAP gross margin of 40%, compared to a non-GAAP gross profit of $12.6 million or a non-GAAP gross margin of 33% in the first quarter of last year. Non-GAAP gross margin increased year-over-year due to improved product mix, as consumables, which have higher gross margins, represented 54% of total revenue in the first quarter of 2025, compared to 41% of total revenue in the first quarter of 2024. In addition, we realized per-unit cost savings from both Revio instrument and Revio consumables. Non-GAAP operating expenses were $61.7 million in the first quarter of 2025, representing a 29% decrease from non-GAAP operating expenses of $87.2 million in the first quarter of 2024. Operating expenses in the first quarter included non-cash share-based compensation of $8 million, compared to $17.4 million in the first quarter of last year. The decrease in both non-GAAP operating expenses and non-cash stock-based compensation was primarily due to the restructuring initiative we implemented in the second quarter of 2024. Regarding headcount, we ended the quarter with 570 employees, compared to 575 at the end of 2024 and 787 at the end of the first quarter of 2024. As a result of our restructuring announced on April 9th, we expect second quarter ending headcount to be approximately 500. Non-GAAP net loss was $44.4 million, representing $0.15 per share in the first quarter of 2025, compared to non-GAAP net loss of $71.4 million, representing $0.26 per share in the first quarter of 2024. We ended the first quarter with $343.1 million in unrestricted cash and investments, compared with $389.9 million at December 31, 2024. First quarter 2025 cash payments included a $5 million license payment. In the first quarter, we recorded several items related to our restructuring that impacted our GAAP results. Our GAAP gross loss of $1.4 million included $4.3 million related to the amortization of acquired intangible assets, $4.1 million for a loss on purchase commitments, and $7.7 million related to inventory adjustments related to restructuring. Additionally, we recorded GAAP operating expenses of $427.6 million, which included $381.8 million of restructuring charges, comprised primarily of $359.3 million of accelerated amortization of acquired intangible assets and $15 million of impairment charges. GAAP operating expenses also included an $18.7 million decrease in the change in the fair value of the contingent consideration. It is important to note that the amortization of acquired intangible assets and impairment charges are non-cash accounting adjustments and do not impact our liquidity, operations, or ability to execute on our long-term strategy. Now turning to guidance. As we've discussed earlier, we now expect revenue to be in the range of $150 million-$170 million. At the midpoint, this represents a growth rate of approximately 4% compared to 2024. As Christian indicated earlier, we lowered the bottom end of our range by $5 million as a result of uncertainty surrounding our ability to ship new instruments into China without significant tariffs. However, this continues to be an extremely dynamic macro environment, especially with respect to trade policy and uncertainty surrounding future NIH funding. Our guidance midpoint still assumes a decline in Revio shipments from 2024. However, this is offset with growth in Vega and, consistent with the first quarter, we expect annual pull-through per Revio system to be in the low to mid-$200,000. In the Americas, our guidance continues to assume significant uncertainty in the broader academic research community, especially in the near term with accelerating activity in the clinical market anticipated to offset some of the potential headwinds. For Asia-Pacific, while we anticipate growth in the region in 2025, the funding dynamics in several countries continue to affect capital purchasing timelines for the Revio platform. Additionally, recently enacted tariffs may increase headwinds further in the region. We continue to expect EMEA to be the fastest-growing region in 2025 as population sequencing programs scale, whole genome sequencing in a clinical setting grows, and we expand our customer base with Vega. Looking at Q2, we are forecasting limited sales in China after April 10th, and as a result, we expect revenue in the second quarter of 2025 to be flat compared to the first quarter of 2025. Moving down the P&L, we continue to expect the 2025 non-GAAP gross margin to be between 35% and 40%, representing an improvement of over 400 basis points compared to 2024, and we expect to exit the year above 40%. We continue to expect cost improvements in both the Revio system and Revio consumables. Additionally, we expect Vega cost of goods sold per unit to improve as the platform moves from the pilot manufacturing line to the full production line later this year. We do not directly import any of our materials or components from China, although we do expect that our suppliers have some exposure. Should the U.S. enact tariffs on certain countries in our supply chain, we could face incremental pressure to our cost of goods in the second half of this year. As of now, our guidance does not factor in a material increase in COGS related to tariffs. Looking at Q2, we expect non-GAAP gross margin to be lower compared to Q1, primarily due to product mixes we expect instrument revenue to make up a greater portion of total revenue. As a result of our restructuring, we now expect non-GAAP operating expenses to decline 14%-17% compared to 2024 and be in the range of $240 million-$250 million. We expect to continue to realize savings in 2026 and, as such, anticipate 2026 non-GAAP operating expenses to be lower than in 2025. We continue to expect interest and other income to be between $5 million and $7 million in 2025, and the weighted average share count for EPS for the full year to be approximately 299 million. Additionally, following our restructuring, we expect our ending cash balance of cash and investments to be higher than previously anticipated and now expect to end the year with approximately $270 million. When excluding the $5 million licensing payment in Q1, this implies a $115 million cash burn in 2025 or an improvement of $72 million in adjusted cash burn compared to 2024. We remain on track towards our plan to achieve cash flow positive by the end of 2027 and believe our $343 million in cash and investments as of March 31 will fund us through this transition. I will now hand it back to Christian for some final remarks. In closing, we had a nice start to the year, though we remain cautious given the current macroeconomic environment, including uncertainty around academic funding and the potential impact of trade policy developments. By proactively implementing our recent restructuring initiatives, we have emerged as a leaner, more focused organization positioned to successfully navigate these near-term challenges and execute on our long-term strategy. As we look ahead, our strategic priorities remain clear. First, we are committed to expanding the adoption of HiFi sequencing by building on the strong early enthusiasm for our Vega benchtop platform and by continuing to enhance our Revio platform through the ongoing rollout of SPRQ Chemistry. Vega expands HiFi's accessibility into a broader and more diverse customer base, while SPRQ allows Revio users to extract more data from their sequencing runs using significantly less DNA input. Second, we remain dedicated to innovation through future product launches, such as enabling multi-use chip functionality to further reduce sequencing costs. Concurrently, we are advancing our next-generation ultra-high-throughput long-read sequencing technology. These initiatives aim to deliver HiFi sequencing at or near price parity with short-read sequencing, significantly broadening our market potential. Finally, we are progressing our clinical strategy to improve outcomes and build long-term durability into our business. This includes expanding our kitted solutions like PureTarget to genetic testing labs and continuing to drive adoption at hospitals and medical centers around the world. With these clearly defined priorities, a streamlined organizational structure, and an increased focus on long-read innovation, we are very well positioned to deliver sustained growth over the coming years and achieve our goal of turning cash flow positive as we exit 2027. Thank you again for your continued support. We look forward to updating you on our progress in the quarters ahead. With that, I'll turn the call back to the operator to begin the Q&A session. Ladies and gentlemen, to ask a question, you may press Star and then 1 on your touch-tone phones. If you are using a speakerphone, we do ask that you please get the handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press Star and 2. Again, that is Star and then 1 to join the question queue. Our first question today comes from Matthew Sykes from Goldman Sachs. Please go ahead with your question. Hi. Thank you for taking my question. This is Jake on for Matt. Could you guys talk a little more about the clinical opportunity ahead of you and how much of this can offset some of the concerns around academic and government, particularly throughout the rest of this year? Thank you. Yeah. Hi, Jake. Thanks for the question. You know, it is really an exciting opportunity, and it really started in 2024 as we got the PureTarget panel out into the market and had significant customers like Quest and Myriad Genetics and others start to adopt that technology. What we're seeing is that the ability to see parts of the genome that short-read sequencers can't see has been really appealing to these companies, and they're developing LDT tests that sit alongside the short-read workflows and are eliminating other legacy-type tests and technologies in their workflow. First and foremost, these tests allow them to do things they couldn't do before using sequencing, and they make it more economical. When you look at where we are today, we're expanding that. We're continuing to add more genes to these panels, increase the level of multiplex. What that does is it makes it more appealing to more of these diagnostic-type customers where we think we can get more durable revenue. We do think that is an area where we are effectively doubling down and really focusing on because we think the revenue opportunity there is significant, not just in 2025, but over the next several years. The second aspect of this is in the rare disease world where we continue to see remarkable results using Revio and now with the SPRQ Chemistry. We are seeing expansions of clinicians and clinical researchers use Revio in the hospital setting to do research and look at these rare disease populations and patients. We are seeing that grow aggressively in Europe, where we are seeing it in the Netherlands, Sweden, Denmark, and other countries. If you just look at our placements in the first quarter of Revio, a lot of them went to that segment. We do see this as a way to make up for the potential uncertainty around NIH funding in particular. Jacob, we'll take the next question. Our next question comes from Jack Meehan from Nephron Research. Please go ahead with your question. Thank you and good afternoon. I was curious if you—I had two questions. The first is, within the 2025 guidance, if you could just share any rough expectations for what that might imply for Revio and Vega placements, like what you'd be willing to share. And then second is, appreciate all the swift actions you're taking. As it pertains to the short-read assets, I was curious if this is something—I know you're going to support Onso, but is this something you would consider monetizing? Is that something you're evaluating? Just any thoughts on that would be great. Thank you. Yeah. Thanks. Thanks for the question. Certainly, we won't give the specific unit numbers associated with where we see Revio and Vega, but we did say in the prepared remarks that we do expect Revio shipments to be down in unit terms year-over-year. We do think Vega has a very significant opportunity to grow. I think the timing of Vega was right, was spot on in the sense that having a desktop platform with a lower capital cost in a challenging macroeconomic environment really has given us a lot of great opportunity. We have seen the funnel continue to grow. I do fully expect Vega to grow in unit placements, perhaps every quarter, but certainly over Q1 levels as we grow in Q2, and we will kind of update it as we get into the back half. Additionally, what we're seeing, of course, is that as we achieve manufacturing scale-up, the gross margin associated with Vega will improve over the course of the year, which is great for us because we will have a significant cost reduction as we get to production scale, moving from the R&D or prototype production line to the operational manufacturing line. We would expect not only placements to grow, but profitability or gross margin per system to grow over the course of the year as well. We're pretty excited about that. With respect to short-reads, it is a challenge. It is difficult, given the environment, to keep advancing both the long and the short-read at the same time. We did make the tough decision to really double down on long-read, where we have very significant competitive advantages. We are evaluating all of our alternatives with respect to the short-read platform. We continue to support our Onso customers in the field. With the high-throughput system, we have made a lot of progress with getting that system developed. It is in a state now where it could be valuable. We will explore that. As we have more information, we will certainly share it with you guys. Next question. Our next question comes from Kyle Mikson from Canaccord Genuity. Please go ahead with your question. Hi, everyone. This is Alex on the line for Kyle Mikson. Thanks for taking my question. I think one place to start would be if you could just kind of discuss what exactly you factored into your decision to pause the development of the high-throughput short-read sequencer. Essentially, is it just a mix of competition as well as the poor funding environment? Thanks. Yeah. Yeah. Thank you for the question. I mean, certainly, in making the decision, we had to consider several things. First, the macroeconomic environment and where our revenues and margins that are needed to fund development are. That was one thing we had to consider. Second, we had to consider where are we strongest in the market and where do we see the biggest opportunities when you're evaluating your resources. You want to put them up against projects where you believe you have the best chance to win and the most certainty around winning. That was something we considered. The third thing, very, very importantly, the progress we've made in R&D on the long-read side has just been, quite frankly, breathtaking over the last 12- 18 months. You saw that we launched the SPRQ Chemistry last year. In my prepared remarks, we talked about one customer that's seeing a 46% increase in throughput per SMRT Cell. We're seeing consistent improvement across the board relative to where customers were before SPRQ Chemistry. We see the opportunity to add more value to that platform. We certainly want to keep investing. When we start to look at the advances we continue to make in preparing for the ultra-high-throughput long-read platform, things like multi-use, things like advances in our next-generation SMRT Cell programs, things have gone perhaps faster than we expected, which means that we could get a new platform to market sooner. In all of our conversations with our core customers, there's not a single customer that I talked to that says, "Gosh, I would like more throughput and better pricing." We think that our next generation of products here, with the progress that we've made, will get us close to price parity with short-read genomes and provide very significant amounts of throughput so that even the highest-scaled labs in the world could consider long-read sequencing in germline genomics in particular. We believe that we certainly have the technical capability and the market presence to win a significant portion of that germline genetics business, say, over the next five years. Those were the decisions. Those were the factors that went into the decision. It's never an easy decision. We were encouraged by what we've done on the short-read side. When you're sitting in an environment like this right now, being lean, being focused, and prioritizing is absolutely essential. That's what we did. Next question. Alright. Thank you very much. One last one from me. We're essentially six months post-Vega launch announcement. Can you just discuss if there's been any cannibalization of Revio by Vega? Importantly, what is your level of confidence in being able to eventually transition Vega customers into more Revio placements? Thank you. Yeah. That's a good question. You're right. We announced Vega back in November, I believe, early November, and we started shipping the product in December. We've seen very strong demand from funnel building as well as in this environment to place the number of systems we did in Q1. I was actually quite pleased with that. I think what we're seeing is we're not seeing cannibalization of Revio from Vega, but we are seeing situations where a customer certainly wants a Vega, but they don't have the funds right now. They decide to buy a Vega instead. We've seen that in several cases in Q1, and we continue to see that a bit. I wouldn't call it cannibalization that, "Hey, I've decided that Vega is all I need and not Revio." It's, "I need Revio, but I can't afford Revio right now for funding considerations, but I can get started with Vega." We're seeing that. I believe that those customers, over the next few years, as the funding environment improves, we'll see Revios sitting right alongside Vegas and vice versa. In fact, we are seeing customers that have Revios buy Vegas. The reason why they do that is for kind of rapid turnaround or their Vega is already fully occupied and they want to have additional sequencing capacity available to them. I do think they're symbiotic. They're not really cannibalizing. We really haven't seen that. I just would mention, if you look at the funnel, I think our funnel is well over 50% new customers. The strategy of broadening our reach through Vega and then ultimately transitioning to getting those customers to transition to Revio over time is certainly working at this point, particularly in this challenging macroeconomic climate. Thanks, Alex. Next question, please. Thank you. Our next question comes from Mason Carrico from Stephens. Please go ahead with your question. Great. This is Harrison on for Mason. Good afternoon, and thanks for taking the questions. I wanted to start with how much visibility you think you have into the Vega funnel, and how does your confidence and the outlook there compare to that of revenue? Are the error bars there around the Vega placements more narrow? Okay. We'll start there with visibility. Now, it's interesting. When you have a lower-cost capital instrument, you have many, many more units that are sitting in the funnel. That gives you many more shots on goal in any given quarter to achieve the unit numbers and, as a result, the revenue. I do think the quarter-to-quarter visibility is pretty reasonable right now in the near term. As you get further out, of course, it becomes they become more these are conversations, and they progress, and they progress from quarter to quarter. Overall, I would say our visibility is pretty strong. We have just had these PRISM events that I discussed in my prepared remarks. In the Asia-Pacific meeting held in Vietnam, there were several POs or PO commitments that came in right during the meeting. Another thing is we have had Bluebird kind of deals come in for Vega systems that no one was expecting, and they just are coming in. I think that is additive to improving your visibility around how you are forecasting. If you are thoughtful in how you put your forecast together, you certainly have enough to get some reasonable confidence that you can achieve your forecast numbers. I feel pretty good about it right now. I think we are, just like all of our peers, wrestling with trade policy and tariffs. What does that mean for demand outside the United States? As I think most of you know, about half of our revenue, a little more than half of the revenue, comes from outside the United States. We have done a lot of work on thinking about tariffs from the revenue perspective as well as from the cost perspective. As we put our guidance together, we tried to certainly consider all of those dynamics. Got it. Sticking to your guidance there, given the fluid market backdrop, could you just speak to some of the upside and downside scenarios of Revio pull-through this year? I know there are lots of moving parts there, but what is really baked into the pull-through guide this year? Does it rely on any large-scale projects starting up in the back half? If so, how much visibility do you have into those? Yeah. We've taken a very conservative approach where most large-type projects would be upside to our forecasts. I think that that's certainly the right way to play that. The reason why we do that is because the timing of when a large project gets agreed to, contracted, the systems installed, and the samples starting to flow can be highly variable. When you start to think about it in the context of your financial guidance, you would much rather see that as kind of upside as opposed to core. We've generally taken that approach. One of the things we pointed out in our deck is that consumable revenue, and that's really Revio at this point, has been pretty consistent across our customer base. Each customer segment, we haven't seen dramatic changes in consumable usage. When you think about our assumptions on the guidance with respect to pull-through, we've been using that low 200s to kind of mid 200s pull-through assumption in preparing our guidance. Of course, we go a lot more granular than that. We look in each territory. We try to evaluate different account types. As we continue to place more Revios into commercial accounts, diagnostic accounts, clinical accounts, they're pretty consistent users of the product, and they're not as project-driven. That can give you better confidence and certainty around the utilization/pull-through levels. We tried to show a little bit about that. If you look at our revenue picture, the challenge is really on instrument placements in an uncertain time. The second challenge is, of course, China, where right now we're able to ship reagents into the country without a significant burden of tariffs. Instruments are subject to tariff right now, and certainly that's had an impact. That will be something that we'll be monitoring. It's the real reason why we lowered the bottom end of the guidance. If China stays shut off and the NIH budget has a hard time getting approved or has such a massive cut that it will force most people to pause, those could certainly have an impact on us. We tried to consider it. When we gave our original guidance for the year, we gave a pretty wide range knowing this uncertainty. That's why we felt comfortable that we didn't have to make significant change to our guidance. The upsides to our plan would be certainly more clinically driven placements of Revios, maybe a little bit higher utilization than what we're forecasting. And then, of course, being able to ship instruments into China would certainly be a positive tailwind for us. Thank you. Great. That all makes sense. Yep. Our next question comes from David Westenberg from Piper Sandler. Please go ahead with your question. All right. Close enough. Thank you very much for taking the question. Let me maybe just talk about some of the pull-through. It's been kind of in that mid 2000 range. Obviously, the theoretical max is higher than that. I think you have a lot of good amount of customers that are doing that. You can talk about maybe some of the strategic plans on getting it up to maybe above $300,000 a placement and what that could do with adjusted some of the gross margins if you were able to kind of get that up. I got a couple more things. Yeah. I mean, first and foremost, obviously, this is fundamental to the business. You saw gross margins were much higher than expectation in the quarter. That's for a couple of reasons. The first reason is that the product mix is improving. This is what we've talked about over and over again, that as consumables become a greater proportion of revenues, we will see significant lift-up in gross margins. Going from the mid 200s to 300,000 + is front and center. There's probably two or three fundamental things that we need to do. Number one, we need to continue to make the product easier to use out of the gate so a new customer doesn't take three to six months to really get up to speed and running at some level of capacity. If we can do that, every little bit will accelerate. In fact, Todd, what we really need is one more run per customer per month to go from, say, the mid-200s to 300,000+. That is what we're talking about. One more run per customer per month, 12 more runs per customer per year, and we're there. It is driving the early phases of adoption, driving to customers that are high utilization customers like the diagnostic, like the Quest, Labcorp, Myriads of the world, driving the rare disease in the hospitals. In other words, making more and more samples accessible. The last piece, of course, we did some of it last year by significantly reducing DNA input. We opened up Revio to effectively millions of samples that we could not sequence before because we required too much DNA. That was important because that enabled more projects to get on. It is enabling more applications. For example, at our PRISM conference yesterday, they showed great results using FFPE samples on our sequencers, which many people thought that that was not really feasible. At the conference, there was a talk yesterday that showed fantastic from FFPE. Adding more applications will drive more opportunities to use the system. Lowering DNA input allows more samples to get on, improving the execution and the ease of use to make it easier, and then selling to those customers that are really the high runners. All of those aspects can contribute to one more run per customer per month. Now you are over $300,000 in pull-through. Of course, the gross margins are already higher than the instruments. That will certainly drive the whole picture. It is very doable. We are making progress on all the key points. Now we just need to see, we need some time to see it manifest. Got it. I'll just ask maybe a quick one on tariffs here. Has this been able, have you had any problems with maybe some of the inputs or cost reductions or see that coming in? Can you remind us U.S.-based manufacturing versus where you are outside the U.S.? With regards to tariffs, I do know that one of your competitors has had a tariff surcharge or plans on implementing one. Is there any opportunities, assuming you do have more U.S. manufacturing and will not be subject to much, to kind of compete a little bit more on price? Thank you. I'll take it offline from there. Yeah. I think that, so we've been evaluating tariffs from every direction, like all of our peers. I'm certainly sure they have been. At this point, we certainly could implement a surcharge. At this point, we feel like our supply chain is in a position where we do not think there is a significant impact, and therefore, we do not need to burden our customers with a price increase unless we really start to feel the effects. When you think about where our supply chain on chips, on SMRT Cells, that is a long supply chain. We carry a fair bit of inventory that will not be subject to tariff for quite a while here. We have most of our inbound products. We do not source a lot from China. Perhaps some of our suppliers do, and we will ultimately see some impact from that. So far, we have not seen a dramatic impact. If we do, we may have to implement a surcharge like others might. We want to make sure that we continue to grow our opportunity. One of the things we've been trying to do is make the system more economical. To the extent we can manage our gross margins within the ranges that we expect and we can ship our products globally around the world, we're going to really support our customers here and continue to grow our business. If we do see some real challenges, we may have to implement something like that down the road, but we're just going to keep monitoring. At this point, we feel pretty good about what we're doing. Thank you. Thanks for the question, Dave. Yep. Our next question comes from Dan Brennan from TD Cowen. Please go ahead with your question. Hi. This is William Ruby on for Dan. Thank you for the questions. I've got two questions. One would just be if you could just kind of walk through your demand trends in EMEA in your funnel there. Then there's a broader question on your long-term plans to get to pre-cash flow positive. What are the key drivers for this? What has to happen for this to happen? How is the current environment impacting your ability to get there? Thank you. Yeah. Good questions, William. First, EMEA, we expect EMEA to be our fastest growing region for the year. That's really driven by the rare disease market. We're seeing great uptake in Revio in EMEA because that's where they really are leading the rare disease charge and leveraging the power of HiFi to drive rare disease. We're seeing that in the Netherlands. We're seeing it in Sweden. We're seeing it in Denmark. I believe an order from Zurich this quarter came in for that exact reason. We're seeing it in Germany. It is a pretty broad institute in France this quarter had a in Q1 had a Revio as well. It seems as though that's accelerating. If you look at the demand, I think that's in Europe in particular, that's really where we're seeing some strong Revio opportunities. We're also seeing big opportunities with the smaller customers, new customers in the U.K., which has traditionally been driven by Sanger as our biggest customer. Now we're getting traction across the board there. I think EMEA, we do expect it to be our fastest growing region for the year. We'll see how that's going. With respect to pre-cash flow, what has to happen for us to get to cash flow breakeven in 2027? There's really a couple of fundamental things. First, we do have to grow from here on the top line. Revio has to continue growing. Consumables have to continue growing. Just to reiterate, right, we had an all-time record Q1 quarter, $20.1 million in consumables. That's going to really help us as we see consistent consumable usage growing in that area. I think that has to keep going. Second, we have to continue to drive innovation to make Revio more valuable so we can continue to drive placements, which will improve our top line. Third, we do expect that the ultra-high throughput long-read system will start to contribute to revenue in this horizon. It is important to get revenue from that as well. We need to see our revenues grow. We do need to see our gross margin expand from where we were in 2024. We do think we have a very strong pathway to make that happen. You saw Q1, we're off to a great start there at over 40%. I'm actually really proud of that. We have to be tight and manage expenses. You saw we had a significant reduction in spending last year. We have another significant spending this year. We'll get the full benefit of the restructuring in April through the remainder of this year. Really, the whole benefit will be felt in 2026. I think the combo of those is really what sets us up to get the cash flow break even by the end of Q4 of 2027. You saw that our cash burn this year is roughly what, $115 million for guidance, our guided cash burn. We have made dramatic strides in improving our cash burn. We will continue to do so. We have a lot of, there is a lot of excitement. We have to grow our revenues from here in order to make all of this work. There is no doubt about that. We have the products. We have the innovation. I do think even in this challenging environment, customers are using their sequencers. Those sequencers are driving consumable revenue, which is good gross margin. Hopefully that helps. Thank you. Yes. Cool. We are at the bottom of the hour here. We will wrap up the call. Thank you, everybody, for joining. Looking forward to connecting with you all at the conferences and meetings ahead this quarter. Have a good day. Bye-bye. Ladies and gentlemen, with that, we will conclude today's conference call and presentation. We thank you for joining. You may now disconnect your line.