管理層發言
Good day, and thank you for standing by. Welcome to the Quantum-Si Q2 Earnings Call. Please be advised that today's call is being recorded. I would now like to hand the conference over to your first speaker today, Risa Lindsay. Please go ahead.
Good afternoon, everyone, and thank you for joining us. Earlier today, Quantum-Si released financial results for the second quarter ended June 30, 2025. A copy of the press release is available on the company's website. Joining me today are Jeff Hawkins, our President and Chief Executive Officer; as well as Jeff Keyes, our Chief Financial Officer. Before we begin, I would like to remind you that management will be making certain forward-looking statements within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements of our press release. For a more complete list and description of risk factors, please see the company's filings made with the Securities and Exchange Commission.
This conference call contains time-sensitive information that is accurate only as of the live broadcast date today, August 5, 2025. Except as required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements. During this call, we will also be referring to certain financial measures that are not prepared in accordance with U.S. generally accepted accounting principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the press release filed earlier today. With that, let me turn the call over to Jeff Hawkins.
Good afternoon, and thank you for joining us. On today's call, we will provide a business update and review our operating results for the second quarter of 2025. After that, we will open the call for questions. I will begin with a reminder of our 3 corporate priorities: to accelerate commercial adoption, to deliver on our innovation roadmap, and to preserve financial strength. Our first corporate priority is to accelerate commercial adoption. The second quarter of 2025 marked the first full quarter of activity with the NIH funding and indirect cost cap uncertainties in full effect. During the quarter, we observed a near halt in capital purchases by U.S. academic labs. As a result, revenue for the second quarter was $591,000. This result was below our expectations, driven entirely by capital sales of new instruments. On the positive side, consumable purchases in the quarter were slightly ahead of our expectations, with customers across all market segments performing well.
As communicated on our last earnings call, we believe that pharma and biotech represent a good opportunity for continued growth in terms of both new instrument sales and ongoing consumable sales. During the second quarter, our commercial team executed on specific initiatives to increase our funnel of opportunities in these market segments. I am pleased to report that we more than doubled our funnel of opportunities in pharma and biotech during the quarter, from approximately 30 at the end of the first quarter to more than 60 at the end of the second quarter. While we are pleased with these results, we are fully aware of the longer sales cycle associated with this market segment. We also know that not every one of these opportunities will result in a sale, but for those that do, our experience with customers in this market segment is that they are consistent buyers of consumables once operational with our technology.
During the quarter, we also spoke with several customers who have budgeted to spend on consumables but simply can't purchase an instrument at this time. Strategically, our goal is to create a large installed base of customers who consistently purchase consumables and apply our technology in their day-to-day research. We expect that the results of their research projects will also generate scientific publications, further validating the utility of our technology. Based on this customer feedback, we believe that in the current environment, having a single instrument acquisition model via capital sales is constraining the number of users of our technology as well as the capture of consumable revenue. To address the capital sales headwinds and given our favorable cost to produce the Platinum Pro instrument, we have recently launched an expanded set of instrument acquisition options that allow customers to have our instrument in their lab, purchase and run consumables without having to find the capital dollars to acquire the instrument upfront.
While we are still in the early days of offering these new instrument acquisition options, we have already secured our first few customers using this approach, and they have purchased consumables to begin using our technology in their research. In summary, we view growing our installed base not just as a revenue driver, but as a strategic moat. With every new lab that implements Platinum Pro, we expect to see increasing consumable sales, scientific validation, and customer advocacy. The cumulative impact of this cycle is key to long-term value creation. While the capital headwinds in the market are going to impact short-term commercial results, we are optimistic about the opportunity to continue to grow our customer base using a mix of instrument acquisition options, which in turn will drive more consumable revenue and generate more published evidence demonstrating the value of our technology.
Strategically, a large installed base of active users is the key to long-term success, and we will take advantage of our favorable cost to produce Platinum Pro and our strong balance sheet to continue to execute on that installed base growth despite the capital market headwinds. Furthermore, we remain confident in the long-term market opportunity in proteomics and the technology roadmap we are executing against to capitalize on that opportunity. Our second priority is to deliver on our innovation roadmap. We continue to make solid progress across all of our development programs. Our version 4 sequencing kit is currently undergoing validation studies, and we expect to launch the kit during the current quarter. This kit will further increase proteome coverage via increased amino acid detection and the addition of a new enzyme that is engineered specifically to provide high-efficiency cutting of the amino acid directly preceding arowine.
In addition, as part of this version 4 sequencing kit launch, we also expect to release an expanded set of 24 barcodes that will allow customers to increase the multiplexing level of their experiments while maintaining the same level of analytical performance they experienced with the original set of 8 barcodes. Turning now to library preparation. Our version 3 library preparation kit remains on track for launch by the end of 2025. The program continues to progress well, and the data supporting lowering the sample input quantity continues to show great promise. At this stage in the program, we believe that we will be able to lower the sample input quantity by at least 100-fold as compared to our current library prep kit. This lower input concentration requirement is expected to allow our customers to be able to process a broader range of biological samples and study biologically relevant proteins that are at a much lower concentration than our current library prep kit can accommodate.
When combined with the V4 sequencing kit, we believe customers will experience a meaningful level of improvement in overall system performance and be able to pursue some of the more complex biological sample work that to date has been difficult to do with the existing kits. Next, I would like to provide an update on the Proteus development program. As a reminder, Proteus incorporates a new instrument and consumable architecture that will offer significantly more reads per sample, more samples per run, and greater workflow automation than our current platforms. To be clear, Proteus is not just an incremental improvement over Platinum Pro. It is expected to be a huge leap in capabilities, and we believe it will be a multiyear growth driver for the company. We are pleased to report that we remain on track to successfully perform protein sequencing on a prototype Proteus system by the end of 2025.
Hitting this milestone in 2025 sets us up well to deliver on the launch of Proteus in the second half of 2026. In terms of interim milestones of the Proteus development program, we are pleased to share 2 important milestones since our last call. First, during our first-quarter 2025 earnings call, we communicated that we had completed the development of a set of fluorescent dyes capable of supporting the transfer of our current sequencing chemistry onto the Proteus platform. Since our last call, we have been able to demonstrate an additional dye and more importantly, when we look at this expanded dye set in the context of the overall optical performance we are observing with this new system, we are confident that there is room to add even more dyes as we seek to scale our recognizer set from its current level to our end-state goal of covering all 20 amino acids. Second, we completed feasibility of wafer-scale surface chemistry processing and have made that our standard process to produce consumables to support the Proteus development program.
This is an important milestone as we look to the future commercialization of Proteus and scale-up of chip production. Wafer-scale processes are more scalable and cost-effective for high-volume production, but are often not achieved until much later in the development cycle or even post-launch, given the complexity of developing such a process. Demonstrating feasibility for wafer-scale processing so early in the program is a significant accomplishment by our surface chemistry team and sets us up well for the remainder of the development program and for our future commercial production needs. Finally, I would like to spend a few minutes updating you on 2 other exciting initiatives within our R&D organization. The first is about our amino acid recognizer development program. As part of our recognizer development program, we have designed and screened millions of candidates. As part of that process, we have amassed what we believe may be the richest set of data in the industry about how mutations inserted into engineered proteins affect their binding to end-terminal amino acids, the kinetic properties of those binding interactions, binder specificity, stability, and many other features.
This proprietary data set presents a significant opportunity to leverage state-of-the-art AI tools trained on this proprietary database to design new amino acid recognizers and accelerate the path to full proteome coverage. We recently used this approach to complete our first AI-based recognizer design, achieving a binder that meets specifications within one design cycle. By using AI to design initial clones, we eliminate combinatorial screening and move directly to downstream assays, thus significantly shortening our timeline to produce candidate binders for testing and sequencing. We look forward to sharing more about this approach and the impact we believe it can have on the timing to achieve full proteome coverage at our Analyst Day later this year. Our second initiative is around post-translational modifications or PTM detection. At our November 2024 Investor and Analyst Day, our Head of Research, Dr. Brian Reed, shared data about various applications of our single-molecule kinetic detection technology.
One of those applications was combining a pre-sequencing detection-only cycle with a standard protein sequencing run to provide site-specific peptide-linked PTM detection regardless of the location of the PTM. We believe that the advantage of this approach is that it will allow Platinum Pro users to detect, quantify, and identify the sequence position of a given PTM, providing data and insights far beyond those provided by current technologies. In addition, this combined approach can detect a PTM that may be very deep into a peptide and would not otherwise be detected via a sequencing-only approach today. We are pleased to report that this combined method for PTM detection has met our internal technology feasibility thresholds and has been successfully transferred to our product development team to begin developing commercial kits. Our initial discussions with customers about this approach have made it clear just how difficult this type of PTM analysis is using current technologies and how beneficial it would be to their research to have these kits and associated automated software tools available on a low-cost platform like Platinum Pro.
We are excited about the potential to make PTM discovery accessible to all researchers and expect to provide more updates on the timing of commercial release at our upcoming Investor Day. Our third priority is to preserve our financial strength. While the capital headwinds in the market are going to impact short-term commercial results, we are optimistic about the opportunity to continue to grow our customer base using a mix of instrument acquisition options. We firmly believe that a large installed base of active users is a strategic advantage that will create long-term value for our shareholders, and we are uniquely positioned to grow that installed base now despite the market headwinds because of our strong balance sheet and the steps we have taken over the past 2 years to be in this position financially. I'll now turn the call over to Jeff to review our financial results.
Thanks, Jeff. Now I'll review the details of our operating results for the second quarter of 2025. Revenue in Q2 2025 was $591,000, which consisted of revenue from our Platinum line of instruments, consumable kits, and related services. Gross profit was $351,000, and gross margin was 59%. As I have said in the past, our gross margin percentage will be somewhat variable for the foreseeable future as we work through our continued commercialization efforts and may be impacted by the timing and mix of instruments versus consumable sales. Our margin has also been impacted and may continue to be impacted by the acquisition costs and any accounting adjustments to underlying inventory, some of which predates the commercial launch of the Platinum line of instruments. To this end, our gross margin for Q2 2025 includes approximately a 13% benefit or inventory utilized during the quarter that was carried at low or no value.
For the 6 months ended June 30, 2025, revenue was $1.4 million, gross profit was $837,000, and gross margin was 58%. As Jeff mentioned earlier, our year-over-year revenue was impacted in the second quarter by continued capital market headwinds driven by uncertainty in the NIH funding affecting the macro market. We were impacted partially in the first quarter by this concept, but in the second quarter, we felt the full impact. Turning to operating expenses. GAAP total operating expenses for the second quarter of 2025 were $30.5 million compared to $26.8 million in the second quarter of 2024, while adjusted operating expenses were $23.8 million for the second quarter of 2025 compared to $24.4 million for the second quarter of 2024. For the 6 months ended June 30, 2025, GAAP total operating expenses were $56.1 million compared to $50.4 million in the same period in 2024, and adjusted operating expenses were $46.6 million compared to $46.3 million for the same period in 2024.
The flat overall adjusted operating expense year-over-year continues to highlight our very tight cost controls we have in the organization, while still funding innovation and significant development progress of our Proteus platform and other programs that did not exist in the same period in 2024. Keeping our overall spend flat would not have been possible without continued cost control measures and allocating our capital to fund and accelerate the highest return projects for our shareholders. Of note in our GAAP total operating expenses for the quarter is an expense of approximately $3.4 million that represents our net estimated expense and cash outlay after receipt of insurance proceeds in relation to a preliminary settlement of the Delaware stockholder litigation that we initially disclosed in May 2024. The final settlement associated with this case is subject to various approvals, but we anticipate these to be completed in either Q4 of this year or Q1 of 2026.
Next, our dividend and interest income in the second quarter of 2025 was $2.3 million compared to $2.9 million in the second quarter of 2024 and $4.9 million for the 6 months ended June 30, 2025, compared to $6.5 million in the same period in 2024. Overall, this change is reflecting lower interest rates year-over-year as well as relatively lower invested balances. As of June 30, 2025, we had $214.2 million in cash, cash equivalents, and investments in marketable securities that we continue to earn a safe return on. As an update, we continue to track the changing landscape of tariffs on our business and potential customer purchases. From an acquisition cost of our inventory standpoint, we have seen some minor impacts but continue to believe that we will see no material impact on our inventory acquisition costs in the near term based on current information. Much of our materials and inventory on hand now up to and through 1 year of consumption were acquired prior to any tariff impacts, limiting our near-term exposure.
We continue to monitor the situation and are working on realistic mitigation strategies to limit our overall exposure long-term. Regarding import tariffs related to other countries we sell into, to date, we have not seen any impact and continue to believe we will not have any impact based on scientific and medical devices being historically exempted from import tariffs. As Jeff mentioned earlier and evidenced in this quarter's results, the NIH funding impact on the overall capital market continues to create uncertainty for us and many other capital device manufacturers. To this end, we have deployed several capital acquisition models that gets our Platinum Pro units in the hands of customers that don't have budgets for capital spend, but do have budgets for consumable purchases. Though these new models are in their early stages, we are optimistic about their impact and ability to drive consumable volume.
Having said that, until we get more momentum on these new models and have more clarity on the NIH funding environment, providing any details around top-line financial guidance will be challenging. As our new models gain momentum and we get more clarity around final NIH funding, we hope to provide more clarity in future quarters. Next, as we announced in early July, we priced a $50 million registered direct offering that closed on July 8. This capital raise will be used for development and commercialization activities and further strengthen our capital resources to execute on our long-term plans. We have stated in the past that we're going to be realistic and opportunistic in our capital approach, especially in the challenging markets that we and many of our peers have seen over the last several years. For this offering, we saw an opportunity to bring more capital into the company at a reasonable price, and we took advantage of it.
Going forward, we'll continue to ensure the company is well-positioned to take advantage of any appropriate capital opportunity. Regarding 2025 guidance, we are revising our annual estimate for adjusted operating expenses from $103 million or less to $98 million or less. And for total cash use, we're still expecting to utilize $95 million or less, which now is inclusive of any cash payment in relation to the case I mentioned earlier that was not previously included in our annual estimate. Overall, these net improvements are based on more efficient and effective use of the funds that we have and overall efficiencies in our development projects while still maintaining our development delivery timelines. And finally, as I mentioned earlier, we ended the quarter with cash and cash equivalents and marketable securities of $214.2 million. We now anticipate that this balance, along with the $50 million from the registered direct offering that we completed in July will provide runway into the second quarter of 2028. Now I'll turn the call over to the operator to open the line for questions.
分析師問答
Our first question is from Scott Henry with AGP.
Certainly challenging times. When we think about the $600,000 for Q2, how much of that is overseas? How much is in pharma biotech? I'm trying to understand the size of the base foundation of revenues before we go into the NIH-impacted markets.
Yes, we don't specify the distribution by pharma, biotech, or specific segments, but we've historically provided guidance on our installed base. Currently, about 65% of our installed base is located outside the U.S., while approximately 35% is based in the U.S. This breakdown includes a variety of customers such as academics, industrial, pharma, biotech, and government research labs.
Okay. To rephrase the question, do you believe that the range of $500,000 to $600,000 is the lowest point and that we should begin to see growth from there, especially with the new model? How should we approach the remainder of 2025 considering these factors?
Yes, it's a good question. The way I think about it, Scott, is 2 things. One is, obviously, driving the top line requires us to sell some number of machines outright capital sales. That's obviously a much faster way to grow the top line than purely through the reagents. So I think the alternate models available to customers will help us capture the consumable revenue and get that base up. And obviously, over time, that consumable run rate is a very powerful sort of component of revenue and is where the high-margin opportunity resides. But in the short term, it doesn't sort of build on the revenue growth rate as fast as the capital sales. I think we're optimistic that this is the bottom, and we're able to start building out of this. I just don't think it's going to be an instant improvement in Q3 simply because it takes a good number of instruments out there producing consumable revenue to really to get the lift. So maybe a little lighter going into Q3 sort of in terms of growth over Q2 and then hoping to see a better acceleration into Q4 between just that larger installed base and pull-through, but also perhaps we'll see some pickup in capital in Q4 that's more cyclical in nature that we've seen sort of every year in the fourth quarter.
And just the final follow-up, and then I'll jump back in the queue. Could you just give us an example of what a typical placement would look like under the new model? Are there minimums? Is it a lease-type model? What does that look like as far as consumables and what we should expect from them?
Thank you, Scott. We have several options available. Customers can make capital purchases, or they can enter into a traditional reagent rental agreement, which involves a longer-term contract with minimum requirements on consumables, allowing us to capture instrument revenue over time. We also offer third-party leasing to our customers. Lastly, in specific scenarios where we see promising opportunities for consumables and valuable data publication, we may place machines on a short-term basis. This enables us to move those machines to different locations if we don't achieve the desired consumable revenue. However, if we do see good utilization, our strategy is to convert some of those placements to capital sales, or they may shift to rentals or other models over time. If we do place a machine, we have the flexibility to relocate it to another site or customer lab if we determine that opportunity exists there.
Our next question comes from Swayampakula Ramakanth from HWC.
This is RK from H.C. Wainwright. So Jeff, with the new acquisition opportunities that you're offering to your current customers or to your potential customers, do you see an increase in terms of leads as compared to going the typical capital sales? And I'm just trying to ask the question because I want to see if that can help you increase on your consumables or it's too early to call any sort of trend?
Yes, it's still early in the rollout of these offerings. To help you understand, the current data suggest that while the number of leads in the top of the funnel isn’t increasing, we are seeing movement from customers who have advanced through the sales cycle with us. These customers learned about the technology and had in-depth discussions with our sales team or application specialists, and some even conducted evaluations and interacted with our application development team, which is part of our R&D group. They were ready to proceed with implementation, but availability of capital has become an issue. As we've activated these options and allowed our sales force to promote them, the initial customer accounts entering the funnel for these alternative models are primarily those who engaged in that process with us and were interested in applying the technology, but faced capital constraints. So, at this moment, I don't have data to indicate an increase in leads, likely because it is too soon. The more significant observation we can gather from the data is that those who have done their research and are committed to implementing the technology are the first to seek access to equipment and begin operations. Thus, it seems to reflect a potentially higher success rate at the end of the sales process, enabled by offering multiple options to customers in the current capital market.
So another question started to be on the same topic, though. Let's say, if the world did not change as tough as it has been in the last few months. So if the capital funding was still available, what's the delta you think you missed by losing those opportunities?
I don't want to speculate at what that number is, RK. I can tell you that our sales force still is certainly incentivized when capital dollars are available to sell the machine outright. So we haven't made some sort of wholesale adjustment here where our sales force can just flip to these alternate sort of models in all scenarios. They still have their compensation targets, and selling instruments for capital is a big component of that. I think we have the luxury of doing these models for a couple of reasons. I think one is we have a fairly low cost to build a Platinum Pro device compared to other devices in our sort of competitive equipment that's in this market. We have sort of a favorable profile. We obviously have a strong balance sheet, so we can invest in the building of that equipment to drive this user base. And I think we have a very experienced sales force where we can give them sort of a menu of options and know that when the capital dollars are there, they will go and try to capture those.
And when they've exhausted all those options, they'll resort to one of these other approaches to ensure we get at the end of the day, we get the user, we get the consumable revenue, and we get the corresponding sort of advocacy from customers, people talking about it, people presenting and publishing data. So that's how I sort of think about it. I think it would be complete speculation by me to try to say, are we capitating any sales or not? I think we're not right now based on what I just laid out, but it's something we will obviously closely monitor and make sure it's not doing that.
So, for my last question, given the new plan and the data you're receiving, whether it comes from scientific publications or information about your consumables, do you believe you are gathering enough insights to enhance your product offerings in a way that could help shift your customer base away from those currently facing capital constraints?
Yes, there's been significant progress. We have previously discussed our efforts in market development and scientific affairs. The initiatives aimed at generating more evidence are nearing completion, and we expect a strong pipeline of customer engagement. Importantly, the version 3 library prep kit, which requires a much lower sample input, reflects the feedback we've received from the field regarding customer needs. We believe these enhancements will be well accepted. Although we did not share extensive details today about our advancements in post-translational modifications, this area is closely related to the interests of both current clients looking to expand their usage and potential new customers facing complex PTM challenges. The combined kit we mentioned will facilitate opportunities in this space. Overall, our various pipeline programs are appealing to customers across the academic sector and are beneficial in the pharmaceutical and biotech industries as well. My focus is on enhancing our capabilities and applications across all segments rather than shifting away from any specific one. We are committed to improving performance in the U.S. academic market without abandoning it for short-term gains and will strategically prioritize our sales efforts based on success in various market segments.
Our next question comes from Kyle Mikson from Canaccord.
Could you clarify how long you expect the new capital acquisition options to take effect? I understand it's likely dependent on external factors in the macro environment. The key question is whether you anticipate launching Proteus next year with these options. If so, what are the financial or economic implications of that decision?
Yes. Good question, Kyle. I think in terms of Proteus, I would say we haven't made any decisions about offering Proteus through any model other than a capital acquisition, an outright capital sale. I think we'll monitor the market and we'll look at what the state of funding is and such before we do that. But right now, we haven't sort of altered our go-to-market thinking in terms of Proteus. And part of why we don't need to necessarily do that is we still have Platinum Pro and it has certain capabilities that will meet the needs of many customers, maybe not do everything that a Proteus can do, obviously, but do a lot of things. I think in terms of the duration of the program, we are being sort of proactive and just moving fast with what the markets look like. Obviously, if the capital markets improve, I think we're at least hearing some positive news around what NIH funding might look like.
But obviously, that's got to work its way through the process and ultimately get approved and implemented. I think if those things roll out in a positive way and we see a return to capital, we could slowly start to pull back from some of these options. In terms of duration, reagent rentals and leases tend to be longer-term in nature, meaning measured in sort of a couple of years, 2 or 3 years, when you start talking about leases or rentals. I think when we talk about us being opportunistic in placing a device, we're really putting a clock on that, so that we place it with the customer, they start purchasing consumables, and are using it. And we're really measuring that every month, and we're committing to that customer that if they're using it and getting value out of it, that we'll leave that machine there with them for 6 months. And at the end of that, they have to make a decision on sort of what they're going to do.
Are they going to purchase it outright? Do they want to move into a rental? But again, we're using the placement sort of selectively, lead with capital, look to use lease or rental wherever we can use placement as sort of a final stop, and the placement has a lot more sort of flexibility for us on how long we leave it there, but trying to keep it in that sort of 6-month type of range, assuming that the customer is using the machine at a reasonable rate.
Could you discuss how utilization is trending in the current environment, especially considering the constraints on CapEx? Consumables require less upfront investment, so how is that progressing? Additionally, how do you foresee this evolving in the future, particularly with the potential for reagent rentals? I assume the dynamics may be a bit different. What are your expectations in that area?
Yes. Regarding reagents, our revenue from consumables this quarter slightly exceeded our expectations. Overall, it has been performing well without significant fluctuations across market segments. Despite the challenges with NIH impacting capital sales in the U.S. academic market, our current academic customers continue to make purchases. We are also seeing consistent purchasing from our government and pharmaceutical biotech accounts. Each segment has its variations; some academic labs purchase more sporadically, while government and pharma biotech tend to buy more consistently. The general trends we've observed remain stable, and there has not been any significant decline, which we are pleased with. This stability in consumable purchasing supports our belief that alternative instrument acquisition models could be beneficial, as there is consistent budget availability for consumables and research, unlike the capital purchases which experience fluctuations. This presents an opportunity for us to capture and grow that contribution to our overall revenue.
Can you elaborate on which end markets will be most suitable for the new kits and prep launches you have coming up? It seems like success is leaning more towards the biopharma side, although I assume the academic research world is included as well. Are you positioning yourself for sustained success and deeper market penetration with these new products?
Yes. So on that front, Kyle, so the first thing is we talked about as part of the V4 sequencing kit launch, we're expanding the number of barcodes available that are sort of designed and highly validated by us. Obviously, customers could choose to design their own barcodes as they do, and other segments of the market, or using perhaps, as you see in the world of DNA barcodes. But in our world, we've really been focused on designing those, validating a very high level of performance because that's, at the end of the day, what's being used in the pharma biotech. So that expansion in the number of barcodes is a direct link to feedback we've gotten from existing pharma biotech customers, as well as some that are in our funnel that they wanted to get up to that 24 level for the types of studies they were doing or the types of applications they're doing. So I do think that that barcode set helps us continue to penetrate the pharma biotech segment better.
As I talked about in the prepared remarks, we have seen that funnel grow as we get more people using it. And we've got those sort of reference accounts to point to. So we feel good about the funnel there. It's just a longer sales cycle in the drug development world than it is in other segments. I think in terms of the library prep, there's certainly a benefit in pharma biotech, but I think the benefit of that library prep is probably more broadly applicable to anybody doing more complex biological sample research. I think we touched on a few of the attributes in the prepared remarks, the 100-fold lower input quantity, ability to deal with mixtures better. I think those types of things tend to play across lots of different sort of biologically relevant systems and work, whether that's basic research or translational. So I do think that plays across all the segments when we get that V3 library prep kit launch.
Regarding the PTM capabilities you mentioned, it seems like these are new features that you are considering. Are you currently aligning with market needs, or is this more of a long-term plan where you see the opportunity now, but PTMs aren’t yet fully adopted by customers?
We are responding to customer feedback with our R&D efforts to create a solution that meets their needs. We understand our current technology's capabilities and have seen evidence of customers implementing it. However, we believe there's potential for enhancement through combined detection runs with sequencing. We'll provide more details on our plans and the kit rollout at our Investor and Analyst Day in November. Our focus is on addressing current customer needs and the challenges they face with existing technologies. While we have a long-term vision for the market, we are actively developing solutions that customers require now. This approach aligns with their immediate interests and the limitations they encounter in their labs today.
If your cash reserves exceed $250 million and you're facing difficulties in your core business, which has been gradually evolving over the years, are you considering using that capital to possibly partner with, acquire, or license external technology? This could help address some of the challenges you’re experiencing, particularly in areas related to proteomics or similar markets that would currently be appealing to you, especially with your substantial cash balance.
Yes, we are certainly aware of our fortunate position with our strong balance sheet and the runway extending into the second quarter of 2028. Our primary focus remains on executing our core technology and business. Although we didn't spend much time discussing it in the call, we have been diligent over the past two years in optimizing our operating expenses, resizing the organization appropriately, and funding the right programs. We've leveraged partnerships, such as with NVIDIA and IDEX Health & Sciences, that are significantly involved in our R&D efforts. Our commercial and channel partnerships have allowed us to maintain tight control over our sales and marketing expenditures. Our plan is to continue operating with fiscal discipline while remaining focused on our business. That said, we are active in the market, engaging with various individuals and open to learning about technologies that could integrate with ours or fit into our customers' workflows, as well as adjacent products that could increase revenue in specific territories.
While exploring such opportunities isn't our top priority, we remain attentive and if the right opportunity arises, we wouldn’t hesitate to pursue it. However, we will be discerning, setting a high standard because our investors have entrusted us to invest in our core technology and business, which takes precedence. We will keep our eyes open for promising possibilities and are willing to act if the right situation comes along.
And then finally, if the top line remains a little bit soft and it's challenging to generate a lot of revenue kind of going forward and you need to maybe look at some cuts internally. Would that be more on the R&D side? Or do you think that the sales force just isn't matching this kind of revenue level? It's you're over-indexed to that commercial team, and that would be where things kind of happen.
Yes, Kyle, I don't believe we're over-allocated on the commercial side. When you look at our sales, marketing, field service, and support, we have about 30 people across those areas to support a channel network of 24 partners along with our direct sales efforts. There are likely many examples in the industry where similar functions have much larger teams, resulting in significantly higher expenses. Our focus in this area is not to expand but to maintain a flat team while being very selective with any additions. Regarding R&D, I see the proof in our results. We have downsized and refocused the R&D organization throughout 2023 and into 2024. This team is highly productive, consistently delivering on time and meeting specifications without compromising product quality for speed. We still have two more launches planned and are funding a major platform initiative that wasn't included in our 2024 numbers, and our projections for 2025 are essentially flat.
I believe we have the right size team and talent in place for a novel technology like this. Our focus is on fine-tuning; if a research program is not advancing as we’d like, we’ll discontinue it. We aim to be very targeted and have remained nearly flat in headcount since our significant R&D realignment last fall. We're maximizing productivity while maintaining the right priorities and focus. If significant events arise that necessitate a change in our approach, we will analyze the situation and make informed decisions. For now, our plan is to maintain our current structure and concentrate on executing our business effectively.
This does conclude our question-and-answer session. I would now like to turn it back to Jeff Hawkins for closing remarks.
Thank you for joining our call today. We look forward to providing more updates on our business during the next quarterly earnings call and at our upcoming Investor and Analyst Day in November. Thank you for attending.
This does conclude our program. You may now disconnect.