Prepared remarks
Good day. Thank you for standing by. Welcome to the MaxCyte Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star-1 on your telephone. You will then hear automated messages saying your line has been raised. To withdraw your question, please press star-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Erik Abdo of Investor Relations. Please go ahead.
Good afternoon, everyone. Thank you for participating in today's conference call. Joining me on the call from MaxCyte, I have Maher Masoud, President and Chief Executive Officer; Parmeet Ahuja, Chief Financial Officer; and Sean Menarguez, Senior Director of Business Development. Earlier today, MaxCyte released financial results for the second quarter ended June 30, 2026. A copy of the press release is available on the company's website. Before we begin, I need to read the following statement. Statements or comments made during this call may be forward-looking statements within the meaning of federal securities laws. Any statements contained in this call other than statements of historical fact, including those that relate to expectations or predictions of future events, results, or performance, are forward-looking statements. Actual results may differ materially from those expressed or implied in any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. Except as required by applicable law, the company has no obligation to publicly update any forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Maher.
Thank you, Erik. Good afternoon, everyone, and thank you for joining MaxCyte's second quarter 2026 earnings call. MaxCyte reported $7.3 million of total revenue in the second quarter, including $6.5 million of core revenue and $0.8 million of SPL program-related revenue, which consists of milestones and royalties. Results were ahead of our expectations and consistent with the framework we laid out coming into the year. As expected, we entered 2026 facing several headwinds, including inventory drawdown by our largest customer and headwinds resulting from the discontinuation of a few partner clinical programs last year. Despite those challenges, our objective was clear: stabilize revenue in the first half and return to growth in the second half. Our first-half results reflect this stabilization, where both our Q1 and Q2 revenues were ahead of our expectations. We remain confident in our ability to achieve our goal of returning to growth in the back half of the year. We achieved sequential revenue growth in Q2 compared to Q1, primarily driven by instrument placements across our portfolio, including our recently launched DTx platform. We also continue to see GTx placements across biotech and academic customers, reflecting ongoing program advancement. Processing assembly revenue remained stable sequentially, supported by our SPL portfolio. The second quarter reflected disciplined execution against our operating plan, resulting in improved first-half financial results. We delivered a meaningful reduction in net loss year over year despite the revenue headwinds we faced heading into 2026, and we expect to build on that progress as we execute against our plan and return to revenue growth. Furthermore, we have continued to invest in R&D priorities that expand our platform and strengthen our long-term growth opportunities. Investments in ExPERT DTx, SeQure, and newer strategic collaborations are designed to broaden how we engage with customers from early discovery through clinical development and commercial manufacturing while further diversifying MaxCyte's revenue streams over time. Additionally, I want to highlight a significant milestone for the company. We recently announced our multiplatform technology license partnership with Genentech, which we believe reflects the growing recognition of MaxCyte's technology across the ecosystem from early research all the way through commercial manufacturing. Under the agreement, MaxCyte provides Genentech with access to our ExPERT GTx platform and additional platform technologies, including our electroporation and analytical assessment capabilities across research, clinical development, and manufacturing workflows. The partnership is structured to support multiple programs and to enable Genentech's ex vivo cell engineering activities from early discovery through cGMP manufacturing. I want to be clear about why I believe this agreement is so important for MaxCyte. It is an evolution in how we partner with the largest players in our industry. Rather than licensing our technology on a single-program basis, we have established an enterprise-level relationship with Genentech that supports multiple cell therapy programs under a single framework. We believe this structure reflects how large pharmaceutical organizations increasingly want to deploy enabling technologies as enterprise-wide platforms that support multiple programs. We expect this trend will allow MaxCyte to participate more broadly across the development life cycle of a customer's portfolio, not just one product at a time. The result is multiple platforms being used across a portfolio of programs rather than just for one program. We structured the partnership with Genentech with the goal of creating long-term value for MaxCyte while shifting a greater proportion of that value earlier in the customer life cycle. We expect that will mean greater revenue capture during research and clinical development across many of our platforms: durable recurring license and platform access revenue, complemented by milestone-based opportunities, and continued demand for our instruments, processing assemblies, and analytical technologies. The agreement also provides participation in commercial manufacturing through annual licensing and platform realization. While the structure differs from a traditional SPL, we believe the risk-adjusted economics are more favorable on a partnership level given the enterprise portfolio-based relationship across the entire development life cycle. This enterprise-based model monetizes multiple revenue streams across the customer relationship while reducing our dependence on the outcome of any single clinical program. This agreement structure complements our SPL model; it does not replace it. We believe SPLs remain the right commercial solution for many of our biotech customers who are developing individual therapeutic programs, and we expect to continue selling SPLs going forward. Over the past several years, we have consistently maintained strong royalty-base economics across our SPL partnerships, and our current pipeline gives us confidence in our ability to continue doing so, reflecting the value of our offering to cell and gene therapy developers. Our existing SPL agreements continue under their contractual terms, including acquired-entity provisions where applicable. Our pipeline continues to support attractive royalty-based SPL opportunities, and we expect both commercial models to coexist, each serving different customer needs. Beyond our relationship with Genentech, we believe this partnership establishes a commercial framework that can be applied with other large pharmaceutical organizations over time. It helps validate the breadth and strength of MaxCyte's technology portfolio, expand our addressable market within large pharma, and demonstrate our ability to engage a leading global biopharmaceutical company at an enterprise level. Overall, I am very excited about what this partnership represents for MaxCyte and about the opportunities it creates for the future. On the instrument side, ExPERT DTx adoption continues to build with encouraging early traction across discovery and early optimization workflows in both ex vivo and in vivo cell and gene therapy. As I have discussed on prior calls, the DTx is fully compatible with the rest of our ExPERT platform, which gives customers who adopt the instrument in discovery a seamless path to scale on our STx and GTx instruments for cGMP manufacturing and ultimately into a partnership agreement. We expect DTx adoption to build through the balance of 2026 and into next year. We also continue to see steady progress with SeQure in the quarter. The regulatory environment continues to evolve in our favor, and we continue to expect year-over-year growth for SeQure assay services and licenses in 2026. We firmly believe that SeQure assays will become part of the industry standard for off-target risk assessment and gene editing. Turning to SPL program-related revenue, we recognized $0.8 million in the second quarter, which was comprised of nearly all royalties. Vertex reported approximately $76 million of CASGEVY revenue for the second quarter of 2026, reflecting approximately 75% sequential growth versus Q1 2026 and 150% year-over-year growth. On its earnings call, Vertex noted that more cash-heavy infusions were completed in the first half of 2026 than in all of 2025. Additionally, Vertex indicated that more than 100 patients initiated their treatment journey for CASGEVY during the second quarter, which marked the third consecutive quarter with more than 100 patient initiations. They also noted that regulatory submissions for CASGEVY are now complete in Saudi Arabia and the U.K. in the 5-to-11 age group, and they are seeing continued strong uptake in the U.K., Italy, and the Middle East. Overall, we remain very encouraged by CASGEVY's continued commercial trajectory and we truly believe in its long-term transformative potential for patients. Turning to our customers, we have 30 total license partnerships, which includes 29 SPL partners and our recently announced multiplatform enterprise partnership with Genentech. We continue to see encouraging progression across our partner pipeline, with multiple clinical-stage programs moving toward late-stage development. Importantly, we have five partner programs with the potential to begin commercial launches in the next couple of years, including as early as next year. While any individual program carries clinical or commercial risk, we believe the breadth and diversification of our multiple shots on goal give us a high probability of generating meaningful core revenue, regulatory milestones, and commercial royalties over time. Our SPL portfolio remains a key driver of long-term value, as is evident by the growing commercial royalty revenue and the advancement of a significant number of the SPL programs through the clinic. Looking to the second half of the year, we remain confident in our return to revenue growth. We expect growth to be driven primarily by instrument placements, supported by stable license revenue and processing assembly demand from our SPL partners, including our recently announced partnership. The continued rollout of ExPERT DTx and a healthy commercial funnel across both new and existing customers support this. On the processing assembly side, a significant portion of the inventory drawdown from our largest customer is now behind us. We expect stable processing assembly demand as the SPL-related program headwinds we experienced in the first half have largely subsided. Taken together, these factors give us strong confidence in our outlook for 2026. To close, I am pleased with the execution of our team in the second quarter. The Genentech partnership agreement represents a meaningful step forward in how we engage with our customers and reinforces the growing role our platform plays across the cell and gene therapy ecosystem. We are proud of our accomplishments and our positioning for long-term growth, and plan to continue to invest in the business with financial and commercial discipline as we execute in the second half of 2026 and beyond. I will now turn the call over to Parmeet.
Thank you, Maher. Total revenue in the second quarter of 2026 was $7.3 million compared to $8.5 million in the second quarter of 2025, representing a 15% decrease. We reported core revenue of $6.5 million compared to $8.2 million in the comparable prior-year quarter, representing a 21% decrease. Within core revenue, instrument revenue was $1.8 million compared to $2.1 million in the second quarter of 2025. License revenue was $1.8 million compared to $2.6 million in the second quarter of 2025, and processing assembly, or PA, revenue was $2.3 million compared to $3.1 million. Core revenue in the second quarter was primarily impacted by lower license revenue due to discontinued partner programs, the timing of instrument placements, and a difficult year-over-year comparison driven by PA purchases in the second quarter of 2025 that were accelerated by tariff-related dynamics. Excluding these one-time tariff-driven purchases, PA revenue was relatively flat year over year, reflecting a stabilization in activity across our customer base. SeQure saw continued positive year-over-year momentum in the quarter, with total revenue of $500 thousand, which includes both license and services revenue. SPL program-related revenue in the second quarter was $800 thousand, consisting almost entirely of royalty revenue, compared to $300 thousand of SPL program-related revenue in the second quarter of 2025. The year-over-year increase reflects continued growth in royalty revenue as CASGEVY adoption and commercial sales continue to build. Moving down the P&L, gross margin was 77% in the second quarter of 2026 compared to 82% in the second quarter of 2025. Excluding inventory provisions and SPL program-related items, non-GAAP adjusted gross margin was 77% in the second quarter of 2026 compared to non-GAAP adjusted gross margin of 83% in the second quarter of 2025. Gross margin for the quarter was primarily impacted by product mix, driven by a higher proportion of instrument revenue, which carries lower gross margins than our licenses. Looking forward, and as discussed on last quarter's call, we expect these trends to continue in the back half of the year, with gross margins in the mid-70s. Total operating expenses for the second quarter of 2026 were $15.8 million compared to $21.2 million in the second quarter of 2025, a decrease of approximately $5 million or 25%. We continue to remain disciplined in managing our cost structure. The reduction in operating expenses reflects the full run-rate benefit of the restructuring and cost-efficiency actions we took in 2025, which are now being realized across the P&L. Looking forward, we do not expect operating expenses to grow meaningfully from these current levels, even though we continue to make investments in product development, which we believe will contribute to our continued return to growth. As revenue growth returns in the second half of the year, we expect the combination of disciplined cost management and revenue growth to further reduce cash burn. We ended the second quarter with combined total cash equivalents and investments of $141.9 million and no debt. Last quarter, we announced the Board's authorization of a $10 million share repurchase program. As previously indicated, we intend to use the majority of the program before year-end. Since the authorization, we have repurchased approximately $5.5 million of MaxCyte stock as of today. Our balance sheet is well positioned moving forward, enabling us to continue to invest strategically in our business. Continuing to our 2026 guidance, we are reiterating our 2026 outlook and expect total revenue to be in the range of $30 million to $32 million, consisting of $25 million to $27 million of core revenue and $5 million of SPL milestones and royalties. For the back half of 2026, we expect low single-digit year-over-year revenue growth. On the quarterly cadence, we expect usual seasonality with Q4 being slightly higher than Q3, driven by typical year-end budget flush dynamics. For SPL milestones and royalties guidance, we expect $3 million of revenue from milestones and $2 million of royalty revenues, with $3 million of milestone revenue already received in Q1. Lastly, we anticipate ending 2026 with at least $130.5 million in cash equivalents and investments, excluding any further capital deployed toward our repurchase program. Now I will turn the call back over to Maher.
Thank you, Parmeet. And thank you to everyone at MaxCyte for their hard work and dedication each and every day to move our company and mission forward. I look forward to updating you on our next quarterly call. With that, I will turn the call back over to the operator for the Q&A.
Questions and answers
Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question you will need to press star-1 on your telephone and wait for your name to be announced. To withdraw your question, press star-1 again. Our first question comes from the line of Julie Simmonds. Your line is now open.
Thank you very much. Thanks for taking the question. A couple of questions. Firstly, on the step up in instrument revenue, which is slightly higher than I was expecting, could you give any indication as to where that is coming from, particularly in terms of your instrument portfolio? And secondly, on the guidance on the non-core business revenue, that looks a little low to me given what you have already received in market milestones and also the run rate that Vertex is demonstrating currently. Any reasons why you have not changed that yet?
Sure. Let me take the first one, Julie, and then Parmeet will take the second part of the question. On the instrument side, it was across the board. We saw demand in research, process development, and clinical as well. There isn't any one particular product mix driver. We saw some early traction with DTx and continued traction in clinical with the GTx and STx process development. So it's a mix. We feel good where we are in the year and where we guided for the year in terms of instrument revenue. It is within our expectations and a little bit higher than we planned, and we feel good about that.
Julie, on the non-core revenue guidance, after the $2 million of royalties we guided for the year, we recognized $1.2 million through the first half: $400 thousand in Q1 and $800 thousand in Q2. CASGEVY beat market expectations this quarter, and we are starting to see real traction which supports the remaining royalty expectation. There can be quarter-to-quarter variability as CASGEVY ramps consistent with what Vertex has communicated on their earnings call. Fundamentally, we are excited about the continued progress with CASGEVY and the significant growth sequentially and year over year. As commercial sales continue to build, we will start to see the royalty revenue truly materialize in our P&L.
Julie, to add a bit, Vertex commented on their call that they've now had three consecutive quarters of more than 100 patient initiations and more infusions in the first half of 2026 than in all of 2025. We don't comment on our partner's underlying metrics beyond what they disclose, but we are very excited about what we're seeing.
Okay, thank you. I will come back later. Thank you.
One moment for our next question. Our next question comes from the line of Hannah Hefley of Stephens Inc. Your line is now open.
Hey, good afternoon. Thanks for taking the questions. It's good to see instrument demand stabilize; it sounds like that was pretty much across the board. Are you still seeing any pockets of hesitancy around CapEx? Or do you feel like that headwind is behind you?
We see stabilization both on the instrument side and on the processing assembly side. We feel the headwinds that we had last year are behind us and do not see any remaining pockets of hesitancy on demand. This is a return back to stability and a path to get back to growth in the second half. We are seeing the funding and the stability we expected going into the year, and the quarter was a good quarter for us across both SPL and non-SPL businesses.
To build on that, Hannah, as we look ahead, we continue to expect instrument revenue to be a primary driver, much like this quarter, across both academic and industry customers with a healthy distribution across our instrument portfolio. Our recently announced partnership with Genentech will play a role in the second half, as will the continued rollout of the DTx.
Thanks. Regarding the Genentech partnership, can we expect to see more of those coming up? How does this change your strategy going forward, and what should we expect?
Great question. The strategy is twofold. SPLs are still a major driver for our future growth. We now have two ways of working with industry: SPLs with biotechs and enterprise-level multiplatform agreements with Genentech and other large pharma. This allows us to get into large pharma in a way we have not before and monetize value further up in the relationship on a multi-program basis rather than one program at a time. We expect to pursue similar enterprise relationships with other large pharma organizations over time. This model is complementary to the SPL model and demonstrates the power of our platform. For example, with Genentech we are supporting two of their clinical allo programs as well as preclinical research efforts. We are also the only company with a workflow that can take customers from research through to commercial manufacturing without needing further scale-up, which is a differentiated capability. So, yes, we expect to continue pursuing both SPLs and enterprise partnerships going forward.
All right, thanks for the color. I'll leave it there.
One moment for our next question. Our next question comes from the line of Matthew Hewitt of Craig Hallum Capital Group. Your line is now open.
Good afternoon and congratulations on the progress made during the quarter. Regarding the Genentech agreement, how have the discussions with some of your other larger customers changed, if at all? As you go into the next round of discussions with those in the pipeline, how do you decide who is a better fit for an SPL versus a multiplatform agreement? Is it purely size or the number of targets, or any other color would be helpful.
Very good question. The Genentech transaction hasn't materially changed the tenor of conversations with current SPL partners in our funnel, which are mostly biotech companies. The Genentech deal is a multiplatform enterprise agreement across electroporation and analytical capabilities, and that is the type of structure we would pursue with other large biotechs or large pharma. The enterprise model allows us to monetize value earlier and across more programs, which is often not a fit for smaller biotech customers. In essence, we now have models for both biotech SPLs and for large pharma enterprise relationships, and we are pursuing both. These discussions can take time—sometimes 18 months or longer—but having the Genentech model gives us a scalable way to work with large pharma.
Got it. You mentioned an uptick in academic activity a couple of times in your prepared remarks. What are you seeing there specifically? The funding environment in academia remains challenging, so it's encouraging if you're seeing improvement. What are your expectations for that market segment for the remainder of the year?
We are seeing traction on the academic side largely related to academics initiating clinical trials—GMP-based academic partners moving into clinic. This was part of our plan to engage earlier in research and capture future SPL opportunities. These clinical-stage academic programs often become future industry-sponsored companies and trials, so getting in early with them is a strategic priority. We view the academic engagement as a way to capture future SPLs and broaden our long-term funnel.
Great, thank you.
One moment for our next question. Our next question comes from the line of Megan on for Mark Massaro of BTIG. Your line is now open.
Thanks for taking our questions. With $141.9 million in cash and investments on the balance sheet, what are you seeing in your inorganic deal pipeline? In other words, how are you thinking about M&A or selective acquisitions?
We view our cash balance in three ways. First, we invest in organic growth, which includes continued investments in DTx and building out SeQure assays. Second, we look for selective strategic transactions in the market, but we are very selective. Third, we look to return capital to shareholders when appropriate, which is reflected in our buyback program. We have repurchased about $5.5 million so far. Our priority remains investing in the business while being opportunistic on M&A and thoughtful about returning value to shareholders.
Thanks. Have you seen any changes in the competitive environment recently?
We haven't seen material changes in the competitive environment. In fact, with the recent announcements we've displaced a competitor in the clinic. We continue to invest in our ExPERT platform and application workflows that are proprietary to MaxCyte. We have a strong field-based scientific team and internal scientific capabilities, and we believe we are best-in-class in the space. We're not seeing new competition that meaningfully changes our position; instead, we are displacing competitors in both academia and industry.
Great, thanks again.
One moment for our next question. Our next question comes from the line of Daniel Arias of Stifel. Your line is now open.
Hi, thanks for taking the question. Maher, you spoke to the instrument commentary, but can you expand on the overall environment? There have been comments across the space suggesting improvement in biotech spending. Are you seeing that yourselves? What's the overall feel on spending and pipeline management?
Good question. What we're seeing is stabilization in the cell therapy space rather than a return to the more robust funding environment of 2020-2021. Funding improvements in broader biotech are different from cell therapy. We expected stabilization going into the year and that's what we're operating within. Because we've diversified our revenue model, launched new products, and established enterprise partnerships, we don't need a full return to those prior funding levels to achieve our growth objectives. We are not seeing a headwind anymore; the market has stabilized and we feel good about the trajectory for this year and into next year.
A quick follow-up: the inventory run-down at your largest customer—has that largely run its course, or should we expect it to be a factor in the back half as well?
It has largely run its course. We said going into this year there would be a headwind in the first half, and that headwind is behind us. It should not have a meaningful effect in the second half.
I think Maher answered that well.
Okay, super. Thank you.
One moment for our next question. Our next question comes from the line of Brendan Smith of TD Cowen. Your line is now open.
Thanks for taking the questions and congrats on the quarter. Regarding broader momentum within cell therapy, some tools companies have noted that cell and gene therapy may lag behind other modalities. Do you expect a material acceleration in programs in the second half that would drive demand, or is that more likely 2027 weighted?
That's more 2027 weighted. We have five programs that are late-stage with the potential for commercial launches in the next couple of years, and one has already moved into pivotal. The impact of those late-stage programs is more likely to be seen in 2027 when approvals or commercial launches could occur, resulting in greater demand for our products and processing assemblies.
Got it. One more on SPLs and international markets—are you seeing opportunities, particularly in APAC, and can you capitalize on SPLs with partners in those regions? Any caveats or considerations?
Yes. We've been building a presence in Asia Pacific for a few years and are starting to see healthy growth there, though from a smaller base. We continue to invest in China, Japan, Korea, India, and Australia. We have sales and field applications teams in the region and a general manager overseeing Asia Pacific. We're working with programs initiated there, many of which aim to broaden into the U.S. or Europe, and that can lead to future SPLs. We have a model to work with these partners in the clinic and then expand relationships as they grow internationally.
Got it. Thanks for the color.
One moment for our next question. Our next question comes from the line of Julie Simmonds of Panmure Liberum. Your line is now open.
Thanks. A follow-up on instruments: now that you have multiple instrument types in the market, is there a big variation in processing assembly revenue that comes from each of those? For example, does DTx drive a different mix effect because of higher pull-through or different pricing?
The DTx does have a higher pull-through of processing assemblies. It's used in early research for both cell therapy and in vivo work, so we expect higher pull-through on DTx PAs. Processing assemblies for STx and GTx used in process optimization and clinical work also have pull-through, and cGMP PAs used in commercial manufacturing represent significant revenue when programs get to that stage. So it's a mix: high pull-through early on DTx, and then higher-priced PAs that ramp as programs move to pivotal and commercial.
To add, the price structures differ by instrument and PA type. GTx adoption early in research will have higher PA pull-through, but there are price differences as programs scale to clinical and commercial stages.
Okay, thank you. You have historically discussed signing 3 to 5 SPLs per year. Does that still seem reasonable given your current funnel, noting Genentech is a different offering?
Yes, 3 to 5 SPLs per year remains a reasonable long-term average. Some years we may sign more and other years fewer, depending on timing and market dynamics. Looking at our funnel, we still feel confident we can sign one to two in the back half of the year, and over time the 3-to-5 annual range is a healthy expectation.
Okay, thanks.
I am showing no further questions at this time. I will now turn the call back to Maher Masoud, CEO, for closing remarks.
Thank you, operator, and thank you, everyone, for joining us again. I look forward to speaking with you on the next quarterly call. Goodbye.
Thank you for your participation in today's conference. This concludes the program. You may now disconnect.