Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Fluidigm First Quarter 2014 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I’d now like to turn the conference to our host, Ms. Un Kwon-Casado. Ma’am, you may begin.

Thank you. Good afternoon, everyone, and welcome to the Fluidigm first quarter 2014 earnings conference call. At the close of market today, Fluidigm released financial results for the first quarter ended March 31, 2014. During this call, we will review our results and provide commentary on recent commercial activity and market trends. Following these comments, we will host a Q&A session. Presenting for Fluidigm today will be Gajus Worthington, our President and CEO; and Vikram Jog, our Chief Financial Officer. This call is being recorded and the audio portion will be archived in the Investors section of our website. During the call and subsequent Q&A session, we will be discussing plans and projections for our business, future financial results and market trends and opportunities, including, among others, statements regarding expectations for the single-cell biology in production genomics market, including future market condition, prospect and growth opportunities, our future product launches and other business strategies, integration of our proteomics product line, expectations regarding future sales, revenue, opportunities, objectives and financial performance of our proteomics product line, and current estimates of 2014 total revenue growth -– organic revenue growth, GAAP and non-GAAP operating expenses, stock-based compensation expense, interest expense and capital spending. These statements are forward-looking and are subject to substantial risks and uncertainties that may cause actual events or results to differ materially from currently anticipated events or results such as risks relating to the integration of our recently acquired proteomics product line with our business and operation, the execution of marketing and sales strategies for genomics and proteomics product line, intellectual property right, the launch of new product and the manufacturing or supply of our product. Information on these and additional risks, uncertainties and other information affecting our business and operating results are contained in our annual report on Form 10-K for the year ended December 31, 2013, and our other filings with the SEC. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended March 31, 2014 to be filed with the SEC. We advise investors to review these risk factors carefully. Fluidigm disclaims any obligation to update these forward-looking statements except as may be required by law. During the call, we will also present certain financial information on a non-GAAP basis. Reconciliation between GAAP and non-GAAP results are presented in a table accompanying our earnings release, which can be found in the Investor section of our website. With that, I will now turn the call over to Gajus.

Thanks, Un. Good afternoon, everyone, and thank you for joining us today. We began 2014 with a record quarter; Total revenue of $25.7 million was up 77% year-over-year. We closed the transformational acquisition of DVS Sciences, Inc., bringing single-cell protein expression into our suite of single-cell biology offerings. Excluding the partial quarterly revenue contribution from the recently acquired single-cell proteomics product line, organic revenue growth in the first quarter of 2014 came in at 58% year-over-year. This is the strongest quarterly revenue growth we delivered as a public company, and it was balanced across both instruments and consumables up 62% and 55% year-over-year on an organic basis respectively. Given our performance in Q1, the health of our end markets, our planned product introductions and our visibility into the remaining quarters of the year, we expect total revenues for 2014 to eclipse the $100 million mark in 2014 to between $111 million and $116 million, which implies between 56% and 63% growth over our 2013 revenues of 71.2 million. The key things supporting our growth in the quarter remain consistent with previous quarters. First, we are leading and driving the single-cell genomics market, and second, increasing utilization by high throughout production genomics customers drove a robust consumable pull-through. The single-cell genomics market is very healthy. There is new and important science as a consequence of experimentation at the level of the individual cell, and this in turn is attracting more researchers and more funding into this arena. The overall market continues to develop in line with our expectations and we continue to expand our share within it. In the first quarter of 2014, our single-cell genomics revenues more than doubled, and we shipped record numbers of C1s and BioMarks to single-cell researchers. This is particularly noteworthy, given that this occurred in…

Thanks, Gajus, and good afternoon, everyone. I’ll now walk you through our first quarter 2014 operating results and highlights. In the first quarter of 2014, our product revenue grew 79% to $25.4 million. As Gajus mentioned, we had a strong quarter for both instruments and consumables. Instrument revenue grew 91% year-over-year to $15.1 million driven by sales of the C1 and BioMark systems, and contribution from the newly acquired CyTOF system. On an organic basis, instrument revenue grew 62% year-over-year. Single-cell genomics continues to be a strong growth driver for the company and for instrument revenue in particular. Approximately 80% of the BioMark systems sold during Q1 were motivated by single-cell research. Our total consumables revenue, both IFCs and assays was $10.3 million during the first quarter, up 63% year-over-year and 55% organically driven by production genomics application. Consumables revenue driven by production genomics applications represented approximately 50% of our total consumables revenue in the quarter and was up over 70% year-over-year. Our genomics analytical pull-through in the first quarter tracks slightly higher than our historical range of $40,000 to $50,000 per system per year, and within our recently increased expected range of $15,000 to $25,000 per system per year for our genomics preparatory system. Proteomics analytical pull-through for the full quarter, including the period prior to the acquisition tracked within its historical range of $50,000 to $70,000 per system per year. Total single-cell proteomics revenue in the quarter was $6.6 million, with approximately $2.8 million recognized after the close of the acquisition, and hence included in our total reported revenue. The total instrument installed-base increased to 1,072 instruments at the end of the first quarter of 2014. With 633 analytical systems, including 77 proteomic systems, and 435 preparatory systems which includes C1 system. Geographic revenues as a percentage of…

Thank you. (Operator Instructions) And our first question comes from Dan Leonard from Leerink. Please go ahead.

Hi, thank you. My question on DVS, can you elaborate a bit on what the fix is there, are you hiring more sales people, are you integrating them on our CRM system, or what specifically are the actions?

Hi, Dan. It’s Gajus. It includes the things that you mentioned there. It also just includes a different kind of management. You have to remember that DVS Sciences is a private company, and it can have a substantially different execution style as a private company versus of course a public company, and we went through that as a private company. And then really I think at this point can lay claim to having built a really world-class commercial organization. And that includes a lot of different discipline and different styles of selling and different ways in which you engage customers, ways in which you teach customers as opposed to just simply try to move them through the pipe. So, indeed we’re adding resources actually adding quite a few resources all around the world, and the electronic integration that you referred to, at the CRM is important. But probably more important actually is the style of execution and the way that that is managed.

Got it, got it. That’s helpful. And then my follow-up question, Gajus, can you elaborate a bit on the government funding in Japan for single-cell work? Is it funding for pure research work, or is it tech development? Where would you expect it to benefit from that, because you’re obviously doing very well in Japan without that funding?

Yeah. So, first off, we don’t have a ton of details, because frankly everything is in Japanese, and it’s been taking a while to get it all translated. We haven’t been able to find actually an English version of the release and of the site that describes the funding. So, what we know is that this was established actually specifically in response to other countries funding it and in fact even things like the Genome Institute of Singapore Omics Center were referenced in the rationale for the funding. It is for research, and it’s for much more dedicated towards actual experimentation as opposed to technology development, although it appears that there is some funding for technology development also. So it’s exciting, and it’s something that we expected to see. We didn’t know what’s going to happen in Japan, but frankly, we expect that there will be more of this. There is international competition now in this field, it’s becoming important to funding agencies all around the world to establish a position, and then just to underscore; again, this is for both genomics and proteomics. So, it fits obviously our product offering really well. The final thing that you know, yeah, Japan has been really strong for us, and frankly a lot of that has to do with our change of management there. You may remember that it was choppier for us for a while. Certainly some of the success is a result of the funding environment there, but yeah, we’re very bullish about Japan going forward. Dan Leonard – Leerink: Great, thank you.

Our next question comes from Peter Lawson of Mizuho Securities. Please go ahead.

Vikram, I may have missed this but the revenues seem to be breakeven [inaudible], what is that now [looking for the] [ph] the DVS business?

I’m not sure I quite got the question, Peter, I think I understood it. So, this quarter top line revenue is 25.7 million and we had a basically $75,000 non-GAAP profit, is that what you’re asking?

No. My question was based around kind of the run rate revenues that will be breakeven upon now.

Oh, I see. Yeah. So, we haven’t revised that. I mean obviously we had the tiny profit this quarter, but we haven’t revised that on a go-forward basis. If you note on a non-GAAP basis, and again you have to refer to all the exclusions for the year, right now, we’re projecting that on a non-GAAP basis, it will be slightly profitable for the year.

Got you. Thank you. And then the change in expectations around the DVS business when did that kind of hit you - when did you kind of realized you had to kind of change expectations in that business?

When did we realize that?

Yes.

Well, it’s something that unfolded, Peter, as we were -- as I mentioned earlier, it took us a while to get to – to be in a position where we could really interact with customers, and you can get a lot of data about sales pipes that are in the number of dollars that are there. You can -– the number of prospects or the various different levels, what have you, but you don’t really know how close these folks are actually to buying until you sit across a table, until you interact with them directly. And of course as soon as we had control of the commercial execution, we engaged vigorously with leading customers all around the world, myself included. I know it was as a result of those interactions that we realize that the way that these customers were categorized in terms of how much they have been developed. It was aggressive relative to the revenue objectives in the near-term.

And should we look at that as just you being more conservative or was that [inaudible]…

This is really our assessment of the situation. The sales pipe is large, and in terms of dollar figures it’s large and it’s very healthy, but we have to do more work in moving people along in their buying process. What does that mean? That means things like sometimes you have to do demonstrations. We have to do technical reviews or perhaps oftentimes the job of the sales person is in helping the customers figure out how to get funding. There is a lot of things that require help there. Sometimes it can be rallying support from the institution more broadly if funding is coming from some common pool, things like that. So there is work to do there. It’s stuff we know how to do, stuff that we done very successfully obviously with the single-cell genomics business. .:

Great. Thank you so much.

You bet.

Our next question comes from Sung Ji Nam from Cantor. Please go ahead.

Hi, thanks for taking my questions. I was wondering if you could comment on the pricing environment where you guys across all your product lines particularly for instrument.

The pricing environment?

Just in terms of ASP, I am just curious as to that has been holding or …

Yeah. No, they’re doing fine. They’re doing fine. Let’s see, let me pull this up specifically. So, they were slightly up year-over-year for the BioMark as were C1s and access arrays. Again, this is good doing a year-on-year comparison. We actually had a formal price raised for the C1. It took effect during the quarter, and not all of the quarter, the quarter was affected by that, that’s part of the reason where we had uplift in the C1 price. We did that in conjunction with launching the first single-cell DNA protocols. Chip ASPs were also up year-over-year for gene expression for the access array after the C1, and genotyping chip ASPs were also up although more slightly. ASPs play very well generally.

Okay, great. And then my follow-up is you’ve obviously seen a lot of growth in single-cell genomics. I was wondering if a lot of that growth is coming from new customers versus some of the existing customers adding on more systems or increasing utilization.

Increasing utilization? Yeah. So it’s still dominated by adding new customers. However, we are seeing the effects of, I noted earlier of existing customers really bulking up for very high throughput studies. I mentioned that there are 100,000 cell initiatives. There are multiple initiatives like that that are currently working through the various funding and approval processes, some that have actually even been approved funding-wise at this point. And those are obviously -- those are existing customers right now. So they are bulking up there. But in general, the lion’s share of the growth is coming from new customers, and that’s a worldwide phenomenon.

Great, thank you.

Our next question comes from Bill Quirk of Piper Jaffray. Please go ahead.

Hi, thanks. First thing is you guys called out the increase, it sounds like it’s a significant increase in the full suite for production genomics. And so I was curious that how long do you -- how sustainable do you guys see that being as it relates to that specific sub segment and …

Hey, Bill. Can you repeat that you were -- that you can (indiscernible).

Sure. The question is just that production genotyping was up significantly in the quarter. And so I was just curious how sustainable that is.

Yeah. So it wasn’t just genotyping. It was also -- we have production customers that are doing gene expression and doing next generation sequencing sample preparation. So it was actually in all the categories there, and frankly more so in gene expression and in -- with the access array than genotyping. Actually in fact those two were substantially higher than genotyping. So is that sustainable. We certainly believe so. Our penetration is the production genomics is still pretty small. We estimate that that’s about $285 million opportunity today. And we have a tiny fraction of that at this point. We are being -- our growth is being assisted by what’s happening with next generation sequencing of course. But we are also seeing other customers that are moving more of their work on our platform rather some other platforms that may have been using in the lab and consolidating on that.

Okay, got it. And then I don’t think you specifically called it out. But it looks on backend and the numbers correctly that the C1 consumables were up nicely as well. You did reference these very large single-cell studies. I guess, is my math correct here that C1 consumables were up nicely sequentially in year-over-year.

C1 consumables were up year-over-year. But you remember a year ago they were still really bouncing around as they are subject to transience that were part of the initial adoption of the system. They have been helping out for a while, which is one of the reasons why, main reasons why we raised our range, projective range of chip pull-through on our preparatory systems from $10,000 to $15,000 to $15,000 to $25,000 dollars, I think we did that last quarter. So they have been healthy for a while now.

Okay, perfect. Thank you.

I want to -- sorry, to interject you. I made a mistake in something that I said earlier. I think it was, Peter was asking me about probability run rate and I said we expect to be slightly profitable for the year. That’s not correct. I am sorry, I was adding to different numbers to get there. Actually if you work through the numbers that Vikram provided on in his script, it actually -- we are not profitable to be here. Actually it’s about $22 million roughly net loss on a non-GAAP basis. So I apologize for that.

Duly noted. I got it. The last question from me guys is just if we think about some of the longer range metrics that you guys have laid out regarding the size of the single-cell market, the 250 then obviously continue to grow pretty dramatically in the out years. How do you feel, I should think you feel that you are tracking well for this metric? It’s obviously not necessarily just, maybe this is just linear. But lot to hear your thoughts, updated thoughts there, thanks.

Yeah. We are tracking very well relative to our all of the metrics that we put out there that is we see the market growing and aggregated about the pace that we have previously projected around 50% per year. Our result in Q1 was especially strong. I know historically in all the history of the company in our -- as long as we have been selling products commercially, Q1 is always down from Q4. Always has been -- and in fact we tried a condition, we folks to be cognizant of that and this quarter obviously it was up substantially even sequentially, and then, again, driven largely by strength in sigle-cell biology. So indeed the dials have been in the green there. It’s looking quite good.

Got it. Okay, thanks very much guys. I appreciate it.

Okay, thanks.

(Operator Instructions) Our next question comes from Bryan Brokmeier from Maxim Group. Please go ahead.

All right. Thanks for taking the questions. It sounds like the reason for the reduced guidance has to do sales issues and with closing in on has to do the pipeline of your proteomics business. But are there any further product development activity. Is there any tweaks to the products that as you are having meeting with some of the customers they are looking for slightly different performance or slightly different applications from the CyTOF or is it really all entirely having to help most of those customers introducing the new -- introduce yourself in the product to your previously existing customers base and to meeting new customers.

It really is that the commercial execution. One of the things that has been really delightful as we are getting to know these customers and these prospect is how excited they are about the capabilities of the system. What the system has advertised you it’s -- and particularly the fact that it can analyze so many more parameters than anything else that’s out there right now is compelling. The things that you run into, we run into our -- you might have different regions where there aren’t folks who are adopters yet or people who have systems that don’t have results yet, and we have folks who want to wait until that transpires. You can affect that by making sure you are doing a really good job of technical support. And that’s another area that we are going to invest heavily in. So, we haven’t heard anything about the product which gives us any pause there. Like I said what we -- feedback we get from customers has been extremely positive on its advertised performance and on the value proposition that it puts forward. This is a lot of -- I won’t trivialize it, the commercial execution isn’t easy. But it’s a lot of wood we got to chop there to get done.

All right, thanks. And then with your production genomics customers, what type of customers are these. Are they some biopharma customers, are they diagnostic customers, are they some ag-bio type customers, where you are realizing the higher utilization and also what’s the driving force behind that increased utilization?

Yeah. Well, you got a pretty good list there. I mean if I would rank order it and say the clinical labs are fairly high on that, but everything that you described there including some of the biopharma are our customers that are production based. So we have a thorough phenomenon that and it varies by area. One is that genomics is increasingly used as an industrial tool. So, genomics is used to track samples now. That’s a relatively new thing. Genomics is used in agriculture in all kinds of ways that are new and different. And there has been a recent, not an explosion, but there has been certainly a lot of new molecular test, genomic test that have come out from clinical labs in the last several years. Those are all things that have led to more of those kind of work. The other things that’s happened that is really is a shift from one technology to another is of course the adoption of next generation sequencing really in all of these areas that you refer to, Bryan. And that isn’t really a growth in the overall market. That’s really a turnover of technology particularly from things like saying you are sequencing to next generation sequencing. So, all of those have affected the pull-through that we have experienced. I think the other thing that is happening is that Fluidigm reputation within this segment has gotten better and better. And we are more widely known as a solution in this space than we were a year ago. It’s challenging sometimes to market into production genomics customers because they don’t like talk to each other. Or they do talk to each, but don’t like to tell each other what they are doing. That’s very different in academia where -- academics well, they tell each other what tools they are using and you have to publish it in the methods parts of papers anyway. But in production genomics, if you have a customer who is really being successful with your product often times I don’t want to share. So, the result of that is that it takes us longer and it’s a little bit more challenging to build a bit more awareness within that segment. But what has happened year, year and a half is that our awareness has definitely grown within the segment.

Okay. Thanks a lot.

Thank you.

Our next question comes from Shaun Rodriguez of Cowen and Company. Please go ahead.

Hi, everyone. Good afternoon. Thanks for taking the question. So, a follow-up on the lower DVS expectations, you provided a good amount of color. So I do apologize that this is redundant, but I want to just bring it back to the basic assumptions in the revenue model. So are you specifically just lowering your expectations for new placements this year or has this new data that you I guess come up with the acquisition. This also impacted assumptions for utilization rate and service contract revenue from previously placed or all perspective placements as well.

It’s new placements, okay. That’s just new placements.

Okay. And then over the course of our checks with some CyTOF customers, we did hear pretty consistently, but a couple of things that were noted as either limiters to broader adoption or potentially limiters to more rapid utilization ramping post adoption. And those were first the menu of pre-optimized assays and then secondly analytical tools on the backend as the number of parameters continues to increase. So I was really just hoping you could speak to these dynamics, but really in the context of your R&D priorities for this program over the next call a year, year and a half or so.

Yeah. So those are definitely to major priorities in R&D. We got several hundred proteins that are available off the shelf today that are already labeled and validated with the MaxPar elemental kits. That number needs to go up quite a bit in traditional proteomics generally speaking there are menus that are available that are in the thousands. So a big part of our effort is expanding that menu and expanding the number of parameters that can be analyzed. Simultaneously the CyTOF has over a hundred channels on it. And at this point, be it a half or less maybe less than half of those are used and through more assay development and development of new chemistries. We not only increase the total number of proteins that are available off the self for our customers to use, but also increase the number of parameters that can be analyzed off of individual cells, where they are right now. The data analysis is also –- it’s really important. It’s not simply for -- it’s not just for proteomics, it’s also for genomics. The datasets that our customers are gathering are quite large and they are complicated and they are looking at often times it’s it kind of reminds me of string theory in physics, which was 14 dimensional problems I was never very good, but in this when you are talking about sometimes 30, 40 or 50 dimensions. So, how you visualize that, how you analyze it, how you pick up trends in the data, that is challenging. There are fortunately there are a number of different organizations and labs that are tacking this problem particularly in the proteomics side. There are a couple of independent companies that will develop tools that are helpful and there is certainly more that we can do there. But there are also users and I remember, here in the bay area who are developing some of their own algorithms and tools which also look pretty interesting. On that one we are going to be leveraging not just our own internal work but we are also going to be leveraging partnerships with other companies and with the collaborations with our customers. But those are two definite things that we are working hard on right now.

Thank you. And another one -- sorry, a last one if I could. A question on BioMark pull-through; I think you noted pull-through on analytical systems was a bit above the historical range. In commentary maybe it sound like it was volume increase, but it reminds me of the dynamic. I think we used to talk a bit more; that is the potential to ramp pull-through on BioMark by getting more customers to use your custom assays TaqMan and SNPtype. So really just wanted to get an update on the trends there with regard to the proportion of BioMark customers that are running your assays or whether are performance in the quarter was really more driven by volume increases? Thank you.

Yeah. I would say it was more driven by volume in the quarter. We are making progress with our own assays particularly with the access array where probably a majority of our customers now are buying our assays directly from us, but there is -- we do have our own assays that’s now -- this is going to get stronger as we develop our own enzymes to do the master mixes, and that remains an opportunity for us to continue to drive pull-through.

And I see no further questions at this time. I’d like to turn it back to Un Kwon-Casado for closing remarks.

Thank you. We’d like to thank everyone for attending our call this evening. A replay of this call will be available on the investor section of our Web site. I just wanted to give us heads up that we will be presenting -- we will be attending the Mizuho conference in New York City, tomorrow May 6. And next week, we will be at the Banc of America conference on May 13th and 14th. This concludes the call, and we look forward to the next update following the close of the second quarter of 2014. Good evening, everyone.