Good day, everyone, and welcome to Standard BioTools' Fourth Quarter and Full Year 2024 Financial Results Conference Call. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, [John Graziano] (ph) from Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Standard BioTools' Fourth Quarter and Full Year 2024 Earnings Conference Call. Leading the call today is Michael Egholm, President and Chief Executive Officer; and Alex Kim, Chief Financial Officer. At the close of market today, Standard BioTools released its financial results for the quarter ended and year December 31, 2024. During the call, we will review our results and provide an update on our financial and operational performance, 2025 outlook, market trends and strategic initiatives. During the call, we will make forward-looking statements about events and circumstances that have not yet occurred, including plans and projections for our business, our outlook for 2025 and future financial results, market trends and opportunities, and our expectations related to the combined operations with SomaLogic, including potential synergies and our business outlook for the combined company. These statements are subject to substantial risks and uncertainties that may cause actual events or results to differ materially from current expectations. The forward-looking statements on this call are based on information currently available to us, and we disclaim any obligation to update these statements except as they may be required by law. During the call, we will also present some financial information on a non-GAAP basis. We believe these non-GAAP financial measures are useful in evaluating our core performance and as a baseline for assessing the future earnings potential of the company. We use these non-GAAP measures in our own evaluation of continuing operating performance. We encourage you to carefully consider our results on a GAAP and non-GAAP basis. The reconciliation between non-GAAP measures and their GAAP equivalents are provided in the tables accompanying today's press release and as an Appendix to today's presentation slides. Please note that management will be referring to a slide presentation, including updated supplemental financial information within the webcast today. Following prepared remarks, we will host a Q&A session. Today's slide presentation, along with a replay of the webcast will be available on the Investors section of our website. I would now like to turn the call over to Michael Egholm, President and CEO of Standard BioTools.

Thank you, John. Good afternoon, everyone, and welcome to Standard BioTools' fourth quarter and full year 2024 earnings call. Joining me today is Alex Kim, our Chief Financial Officer. Before we dive in, I want to thank our customers, employees and investors for their continued support. It is what drives us forward and fuels our mission to set the new-standard in life science tools industry to empower researchers and accelerate discovery, while rewarding all of our stakeholders. 2024 was all about hard work, execution and transformation. We closed the year at the top-end of our revised range, demonstrating our team's commitment to deliver in a dynamic environment. We successfully merged two businesses under one-roof powered by Standard BioTools Business System, or just SBS. We exceeded cost synergy targets, improved our processes and delivered better products and higher quality to our customers. Phase 1 was just a start, and we are far from done. Now comes Phase 2, driving the commercial flywheel, evolving our product mix and expanding into key markets organically and inorganically, all while constantly applying SBS to further enhance efficiency as we drive towards profitability. With that, let us discuss our result of which I will be speaking to pro forma numbers. In the fourth quarter, we delivered $46.7 million in revenue and $175.1 million for the full year, representing a 9% year-over-year decline for each period. Performance for the quarter and full year was impacted by continued softness in Instrument and Services as CapEx constraints and cautious spending in biopharma and academia offset strong growth in Consumables. Stiff headwinds persist, but we are actually working to drive top-line performance through commercial execution, market diversification and expanded customer engagement. Although the year-over-year revenue declined, our fourth quarter performance landed in-line with midyear expectations, reflecting improved forecasting and disciplined…

Thank you, Michael. So I'll walk us through our financial results in more detail and provide some additional context. But first, I want to remind you that on an as-reported basis, our fourth quarter and full year 2024 results include the combined operations of Standard BioTools and SomaLogic since the close of the merger on January 5, 2024. While the same period in 2023 include the financial results of the legacy Standard BioTools business-only. Therefore, for comparative purposes, and as Michael has done, we think it is more meaningful to look at the results for both businesses combined. And so as I speak to our Q4 financial results, my commentary will focus on the pro forma combined results of operations for both Standard BioTools and SomaLogic for 2023 and 2024. Please refer to today's press release and the appendix to our investor deck for more information, including a reconciliation of GAAP to non-GAAP measures that I will be discussing here. Starting with revenue on Slide 13. Our fourth quarter of 2024 came in at $46.7 million and full year 2024 at $175.1 million, both down 9% year-over-year. Sequentially, from the third quarter of 2024, revenue grew 4% with a notable increase in instrument placements. Breaking down revenue further, Consumables grew 10% in the fourth quarter and 18% for the full year 2024. This was driven by strong kit sales to our SomaScan-authorized sites, as well as from the Illumina early access program. Traction of our authorized sites is a good validation of our distributed solution strategy. As our installed base across our portfolio continues to expand, we will focus on driving usage of our platforms and in growing this attractive recurring Consumable revenue stream. Instrument sales were down 25% in the fourth quarter and down 27% for the full year…

Thanks, Alex. We thank you all for your continued support as we advance our mission and strive to set the new standard in the life science tools industry. We look forward to seeing many of you at upcoming investor conferences throughout March. And now I hand the call back over to the operator.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Matt Stanton from Jefferies. Please go ahead.

Hi, thanks. First one, I appreciate the color around what you're baking in the guide for the Americas due to some of the NIH noise. Would just love a little bit of color or feedback of kind of what you're hearing real time on the ground now that it's been a few weeks. Any comments you would be willing to share even if anecdotally? And then as we think about that high single-digit million headwind for the year, any more color to add just in terms of is that paused instrument demand? Is that consumables tied to lab activity? Just what's kind of baked into the analysis that you said you walk through there? Thank you.

Thanks, Matt. Great question. As I just stated here, we are laser-focused on running our business every day and safeguarding the P&L here and execute to the long-term strategy. With that, we are not seeing a lot yet, but anticipate that people will spend less in the Americas academia and probably consistent with what you have heard from others. Alex, anything -- any color to add?

Yes. Maybe to add where we anticipate some of the impact is more on the instrument side, the heavier capital requiring the budget there, some impact on to our consumables and services, but the majority on our instruments.

Okay. Great. That's helpful. And then maybe shifting over proteomics and the Illumina partnership. I think in the prepared remarks in the deck, you called that out as an at least a $1 billion opportunity. I think that is maybe the first time you kind of sized that partnership with Illumina. Just given where kind of things have gone from early access and then as we think about the launch in the first half of this year, any more color you could add just in terms of how you expect that to play out or what you are penciling in for '25? Obviously, given the market size there, it doesn't take much to penetrate that to start to show up in a more meaningful way for you guys. So any more color on what you are kind of penciling in and expectations for '25 once you get the launch out there?

No, you're right, Matt. It is indeed exciting. And today, there are already billions of dollars spent in other areas of proteomics, but not where it really matters, which is plasma proteomics across thousands of patients. And as I pointed out, we are the only one that can read a substantial part of the proteomics. So very excited about the launch. I would also say that to get comps for the market, look at what's spent on LC-MS on one side and then what's spent on genomics. And then think about the informational content that is in the proteomic analysis as I outlined. So genuine excitement, and we feel very comfortable throwing the $1 billion number around for the opportunity here. Alex, maybe you can address what's baked into the forecast.

Yes. We've mentioned this in the past. We have had strong Illumina revenue in '24, driven by development ramp-up and early access customers. And now as we shift into full commercial launch, we do expect an increase in Illumina revenue. But as they get new sites on board, it will take those customers' time to ramp up. And so we still expect '25 to be a transition year with stronger growth coming in, in '26 and beyond.

Super. Thank you.

The next question comes from Dan Brennan from TD Cowen.

Hi, good afternoon guys. This is Kyle on for Dan. I wanted to go back to the guide. You don't have anything baked in for tariff impact and export control impact in China. Do you see any opportunity in China on the instrument stimulus side for your proteomics instruments?

We have a strong team in China, and we're seeing good traction so far and will keep absolutely pushing that. So certainly, looking -- this year looks better than last year.

Got it. And then on the M&A side, you laid out the four to six deals '25, '26. You laid out some of the types of assets that you'd like to go after. But how should we think about maybe the size and timing of any of these deals?

We have a rich funnel. We are working this every day as we speak. And M&A has its own timing. So at any one time, we are working on multiple parallel deals. I did touch upon a bit on the criteria that we are looking at. It has to be a proven technology. We do not do science projects. They have to be derisked, and they've got to have a strong gross margin profile. So in other words, that they sit on the top of our value pyramid. And so we're looking at that as the lens here. But we are aggressive. We've done two major deals here over the last three years. And we did a tuck-in with Sengenics, where integration here just a couple of months in is close to the end of the road here for integration and now offering this up as part of our SomaScan services.

Got it. Thank you guys.

The next question comes from Paul Knight from KeyBanc. Please go ahead.

Michael, I don't know if this has been answered, but what's your target cash burn in '25?

I'll let Alex handle that one.

Yes. We are not providing short-term guidance on our cash burn. But maybe to give you a sense, you could look at the second half exit rate and assume that we're going to continue to make improvements off of that. We feel like we've got a very strong balance sheet to even weather the current environment we are at and get us to cash flow breakeven and to fund some of these smaller bolt-on acquisitions. So we feel like we are in a pretty good position.

I think the original cash flow breakeven was what, 2026?

That was -- that's the adjusted EBITDA breakeven in 2026. That's correct.

Okay. And then, Michael, if the NIH ended up, we're, I guess, kind of in effect a continuing resolution, if the NIH ended up and where we kind of get back to normal, which I think is mid-single, maybe better NIH budget growth, where would that put you in terms of what guidance could be?

I think we already bracketed the oral NIH impact. I would say, though, and maybe building a little bit on the answer to Matt's question before, we haven't seen impact yet on sales. Again, we're only a couple of months into the year or barely two months into the year. What we have heard is a lot of changed behaviors. And should this miraculously resolve in the short-term, I think we'll go through still a couple of quarters of changed behaviors. And so we feel comfortable with the guidance we've given here.

Yes. And then last question, Michael, is with the joint product with Illumina, what do you think that addressable market size could be?

Yes. I was courageous here in putting out $1 billion market. I think that is conservative. I truly and genuinely believe that routine plasma proteomics is a market like NGS that will evolve in time and grow quite large. Think about it. We have one genome and other than in cancer, a little bit with the immune system, you don't actually need repeated sequence. You need it once for your proteome. A number of study and cases here where we would have to do the samples yearly or more or follow pre-treatment, post-treatment, et cetera. So the number of proteomes that are going to get enumerated are just mind boggling and certainly drove genomics. And then as I've shared here on recent conferences, the informational content you get from proteomics, while genomics is important and genomics and proteomics together add a lot, the like per dollar information content much, much, much higher from proteomics. And I mentioned a couple of studies here in the commentary, happy to share the references.

Okay, thank you.

[Operator Instructions] This concludes our question-and-answer session, and the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.