QSIAW

The company's three corporate priorities are to accelerate commercial adoption, deliver on the innovation roadmap, and preserve financial strength. For accelerating commercial adoption: Revenue in the third quarter was impacted by capital sales headwinds; since launching expanded instrument acquisition options, 12 new customers have implemented the platform with initial reagent purchases, more than half in academic labs; the initiative with the Broad Institute is progressing well with projects underway. For delivering on the innovation roadmap: Successfully completed sequencing runs on a prototype Proteus system; version 4 sequencing kit was commercially launched in early September with enhanced amino acid detection and expanded barcodes; version 3 library preparation kit is in internal validation and on track for launch by end of 2025 to lower sample input quantity; amino acid recognizer development program has amassed rich data and will leverage AI to scale up. For preserving financial strength: Despite capital headwinds, the company is optimistic about the placement program and has a strong balance sheet with $230.5 million in cash, cash equivalents, and investments in marketable securities as of September 30, 2025.

The company expects adjusted operating expenses will be $96 million or less and total cash use will be $103 million or less. In late September, it filed a Form S-3 shelf registration statement for $300 million total capacity and an at-the-market facility utilizing $100 million of that shelf capacity to support business and strategic initiatives.

In the third quarter of 2025, Quantum-Si's revenue was $552,000, derived from its Platinum line of instruments, consumable kits, and related services. For the 9 months ended September 30, 2025, revenue stood at $2.0 million. Gross profit in the third quarter was $194,000 with a gross margin of 35%, while for the 9-month period, gross profit was $1.0 million and gross margin was 52%. The gross margin percentage is subject to variability due to ongoing commercialization efforts, the timing and mix of instrument versus consumable sales, as well as acquisition costs and inventory accounting adjustments.

The company faces risks such as capital sales headwinds in the market, challenges due to NIH funding affecting access to academic labs, and implications from the lease termination settlement including a net cash outlay of $10.2 million and related operating expense savings avoidance of over $24 million.

Q: Could you elaborate on what you discussed at the Investor Day in November? And importantly, provide some key updates on the development of the proteus sequencer? And when might we see some data generated from this instrument? Moreover, do you think that the enhanced performance and throughput of this instrument should unlock new applications that increase the utility of protein sequencing across multiple end markets?

A: Yes. At the IR Day on November 19, they'll provide more of an update on Proteus, including early sequencing data, an update on the recognizer development program, and milestones for 2026.

Q: Just curious if you're able to comment on any level of involvement plus interest you have in the DARPA PROS program.

A: Yes. They're aware of the program, participated in industry and academia interactions, but their approach doesn't perfectly match the micro system strategy of PROS, but they're engaged with DARPA and support existing Department of Defense labs using their technology.

Q: On placements this quarter, can you break down just either quantitatively or qualitatively the bulk of them was biopharma, academia? And then just in terms of end markets and customer types, are you seeing some bright spots? And where are you continuing to experience, I guess, continued pressure?

A: Of the 12 placements in the quarter, a little more than half were academic. Biotech and pharma are moving forward but with longer sales cycles, academia has challenges around capital but placements are opening up opportunities.

Q: Historically, fourth quarter has been an up quarter over third quarter, but a lot of different variables this year. I don't know if the shutdown impacts some of your customers, I don't know. But I just want to get your sense of how we should think about that typical seasonal trend from third quarter to fourth quarter?

A: I would say, historically, fourth quarter tends to improve, but this year with geopolitical challenges and NIH funding uncertainties, we might see a modest improvement but not a significant step-up as historically.

Q: Just the final question, certainly, great milestone as far as running sequencing runs on the proteus. The question is, what are the hurdles left, the key hurdles between where we are now in getting to market launch?

A: They announced the program in November 2024 and aim to launch by end of 2026. Hurdles include scaling from prototypes to fully integrated systems, manufacturing bring up, optimization, and intersecting hardware, consumables, library prep, and sequencing. This milestone shows the architecture works and takes a risk off the table.

Q: Could you share how many academic centers have entered the placement program? And is there an internal target that you guys are trying to reach in this program?

A: Of the 12 placements in the quarter, a little more than half were academic. They don't have a specific target for the number of accounts, focusing on high-value academic centers and biotech for publications and Proteus pipeline.