MaxCyte, Inc. Price & Performance (MXCT)

And with that, I will turn the call over to Maher. Thank you, Eric. Afternoon, everyone, and thank you for joining MaxCyte fourth quarter and full year twenty twenty four earnings call. 2024 has been a strong year for Max Sight.

Highlighted by a return to core revenue growth strategic improvements to our team and operations, and to support Cast Chevy's launch. The first approved non viral cell therapy with our premier electrophysiology platform. Throughout the year, our team has worked diligently to assess ways in which the company can continually improve We evaluated and implemented new strategic initiatives and process improvements. Which streamlined our organization by increasing capital and operational efficiency. We invested prudently within organic areas of the company that we believe promised the best return and will contribute to long term growth. While reducing spend in redundant or non core areas. We also announced the acquisition of SecurDX early this year, which I am incredibly excited about and will touch upon in a moment. Overall, I believe that the thoughtful, strategic changes at MaxCyte throughout 2024 enabled us to grow core revenue in a difficult environment and position us well for 2025.

Now, we'll start by discussing our recent acquisition of SecurDX. When we look at the evolving cell and gene therapy field, safety is becoming increasingly paramount to therapies. Which is exactly where SecureDS fits. SecureDx is a services platform that provides a safety assessment of cell and gene therapy development early in the discovery process. With SecureDx now integrated to MaxCyte, we can offer customers a comprehensive suite of assays that provide on and off target gene adding assessments that are applicable across variety of viral and non viral gene adding modalities. Our three assays, screening, nomination and confirmation each utilized at different stages in development for both ex vivo and in vivo therapies. Beginning in the discovery stage through preclinical development and IND enabling studies.

Not only does off target adding profiling of programs improve the safety profile of therapies, that it also decreases time to clinic unexpected costs, and potential delays. Ultimately increasing likelihood of program success. We see significant opportunities with SecureDx in our portfolio as MaxCyte can now support both ex vivo and end vivo cell and gene therapy developers. The acquisition has immediate cross selling opportunities with MaxCyte now able to work with customers earlier in discovery and able to offer SecureDx services to MagSight's existing customers as well. We are already seeing the benefits of adding SecureDx to our product portfolio and have had great success integrating our team into Max Sight. We believe this acquisition is an important step forward in positioning Max Sight to become a premier end to end cell and gene engineering platform. With the ability to provide a range of offerings and services throughout the entirety of development. Turning to our results. Magtide reported $38,600,000 of total revenue for full year 2024, which included core business revenue of $32,500,000 at the high end of our preannounced range provided in January. We were pleased with our team's commercial execution over the course of the year through a stable but challenging environment.

We grew our instrument installed base seven sixty compared to an installed base of six eighty three at the end of twenty twenty three. Instrument revenue for the year was $7,100,000 which was impacted by a continuation of customer caution on capital expenditure. Though the operating environment makes challenging for our customers, we saw stability through 2024 and have seen some areas of improvement including PA sales, which we reported very healthy revenue growth of 36% compared to 2023. As we head into 2025, we remain cautiously optimistic that the funding environment for our customers will improve in 2025. Overall, we continue to be impressed by the evolution of self therapy towards new editing technologies and new indications. And believe MaxCyte Sight is extremely well positioned within the industry. Customers continue to see the value in Max Sight's offering. Leading to an expansion of our SBL portfolio at a record rate in 2024. With six new SPL signed throughout the year.

As of the end of 2024, we had a total of 28 active SPL customers. Which includes 18 active clinical programs and one commercial program. Previously, we have discussed the total pre commercial milestone potential across our SPL agreements as being greater than $2,000,000,000 As this metric includes both existing SPL programs currently in clinical development and future SPL programs are encompassed in our SPL agreements, we thought it would be very helpful provide a new metric on the potential value creation from the existing active SVO programs currently in development under our SKL agreements. Of the 18 active clinical programs under our SCALE agreements, the total pre commercial milestone potential is greater than $220,000,000 including about $10,000,000 of milestone revenue that has already been received. These 18 programs have cleared IND or equivalents and range from Phase one trials to programs entering pivotal trials this year. We see tremendous value potential for these programs over time. To further highlight the tremendous potential of our SVL portfolio, at the time of our IPO in late twenty twenty one, we were enabling 12 active clinical programs, And now with 18 active clinical programs, this represents a 50% growth in the number of active clinical programs we enable While the overall market for non viral clinical programs has grown 25% during same time period.

We are continuing to strengthen our SVL portfolio. We recently signed our first SPL 2025, TG Therapeutics, in February.

Who entered into an agreement with Precision Biosciences to acquire a license to Acercell. Following the addition of PG, we now have 29 active SPL customers. TG Therapeutics is a commercial biopharmaceutical company focused on novel treatments for B cell diseases and is currently advancing towards a Phase one clinical trial for AGSEL and progressive forms of MS. Our SVL pipeline is very healthy as we enter 2025. And we believe we will continue to sign new SPLs at our historical rate of three to five new agreements this year. The opportunity in the cell and gene therapy industry continues to grow, which supports MaxCyte opportunity to expand its SBL portfolio. We believe there are approximately two zero one cell and gene therapy biotechnology companies as of the end of twenty twenty four. Of which there exist approximately 83 non viral cell and gene therapy biotechs that MaxCyte potential to sign [indiscernible] This SPL opportunity has grown over 50% since time of IPO. And signifies the tremendous potential for non viral cell therapies to help patients.

We have capitalized on the growing SP opportunity since the time of our IPO by more than doubling our SPEL portfolio over this period.

We finished the year with approximately $6,100,000 in SPL program related revenue, ahead of our initial guidance provided a year ago. [indiscernible] Several programs supported by MaxCyte platform progressed to the clinic in 2024 and achieved new milestones. A small amount of SL program led revenue in 2024 was from commercial royalty revenue related to KASJAVI following completion of patient dosing. We remain excited about the opportunity of Cassevi and strongly believe it has potential to benefit patients around the world. During Vertex's fourth quarter earnings call in February, the company reported that there are now approximately 50 patients who have completed cell collection. Up from approximately 30 patients noted under a third quarter earnings call. We are pleased by the continued momentum in Catch Chevy and expansion of Access globally. To highlight, Vertex secured regulatory approvals in Bahrain, Kingdom Of Saudi Arabia, and The United Arab Emirates. And indicate that they also secured a reimbursement agreement with NHS England. Resulting in access to Cashebe in England for eligible sickle cell disease and beta thalassemia patients. Additionally, the cell and gene therapy access model was highlighted by Vertex as a mechanism for states of voluntary CMS negotiate agreements for Medicaid patients.

We believe that this model has potential to expand patient access to cell and gene therapies over time which we view as a positive for patients, cash Jebi and future therapies enabled by MaxCyte. Our teams work diligently to provide regular scientific and technical support to our customers as they progress through the clinic. And we have become increasingly excited by the potential for multiple therapies to come to market beginning next year and beyond.

In 2027 and 2028, we see an opportunity leukemia, sickle cell disease and genetic disease indications. As we approach 2029 to 02/1931, we believe there's potential for additional 12 approved programs with indication expansion to solid tumors multiple myeloma, and autoimmune diseases. [indiscernible] In our fourth wave of potential approvals in 02/1930 and beyond, we see potential for approvals within neurodegenerative disease indications as well. The opportunity for approved therapies within our current SVL portfolio is vast, and growing as we continue to add new SVL customers. In summary, we are pleased with our 2024 results driven by the execution of our global sales team, our differentiated technology and customer support and our process improvements across the organization. We increased our operational focus while making strategic investments in areas of high growth resulting in a year end cash position that exceeded our initial guidance. We look forward to continuing this momentum in 2025 and truly believe that our value proposition remains highly differentiated into durable relationships with current and prospective clients. Our investment strategy remains unchanged. And that we continue to focus on our organic and inorganic investments that offer the best outcomes for our customers and for MaxCyte. While preserving our healthy balance sheet.

We are investing in the development of additional capabilities and products that our customers will need in the future. While simultaneously and carefully evaluating inorganic opportunities that we believe would benefit MaxCyte. We are committed to being diligent and disciplined in our approach make decisions that position MaxSight to become the premier comprehensive enabler of cell and gene therapies within the industry. With that, I will now turn the call over to Doug to discuss our financial results. Thank you, Maher. Total revenue for the full year was $38,600,000 compared to $41,300,000 in 2023. Representing a 6% decline. Total revenue in the fourth quarter of twenty twenty four was $8,700,000 compared to $15,700,000 in the fourth quarter of twenty twenty three. Representing a 45% decline. Total revenue declined due to multiple approval milestones received and recognized in the fourth quarter In the fourth quarter of twenty twenty four, we reported core revenue of $8,600,000 compared to $7,200,000 in the comparable prior year quarter representing an increase of 20%.

Within core revenue, instrument revenue was $1,600,000 compared to $2,300,000 in the fourth quarter of twenty twenty three, License revenue was $2,600,000 compared to two point four million fourth quarter of twenty twenty three, and processing assembly or PA revenue was $4,200,000 dollars compared to $2,200,000 in the fourth quarter of twenty twenty three. As Nadir discussed earlier, our instrument revenue was impacted by difficult operating environment in 2024 which led to customer caution around capital equipment purchasing. We were pleased with our strong PA revenue along with stable revenue from licenses which we believe demonstrates strength in our revenue from clinical stage SPL customers. For the full year of 2024, reported core revenue of $32,500,000 compared to $29,800,000 in 2023, representing an increase of 9%. Within our core revenue, instrument revenue was $7,100,000 compared to $8,300,000 in 2023, License revenue totaled $10,300,000 compared to $10,300,000 in '23. And PA revenue totaled $14,000,000 compared to $10,300,000 in 2023. Of note, 55% of our core business revenue was derived which compares to 48% in 2023. We believe that the percentage of core business revenue from SPLs remains at a healthy level a year over year increase be attributed to more customers entering the clinic and continued execution on signing new SPL agreements.

We recognized $100,000 of SPL program related revenue in the fourth quarter of twenty twenty four compared to $8,500,000 in the fourth quarter of twenty twenty three. For the full year, we recognized $6,100,000 in SPL program related revenue as compared to $11,500,000 in 2023. Well ahead of our initial guidance provided early last year. SPL program related revenue includes a small amount of revenue from Cash Chevy in the second half of the year. Before I continue down to P and L, I would like to point out that we will no longer be disclosing core revenue by cell therapy and drug discovery but rather focusing on instruments licenses, PAs and other revenue as the components of our core revenue disclosure.

Internally, we focus on these components of revenue across customers to forecast crack and understand our business performance and this updated level of disclosure is more closely aligned with how we think about the planning of our business. Moving down the P and L, gross margin was 74% in the fourth quarter of twenty twenty four compared to 90% in the fourth quarter of the prior year. Excluding inventory provisions and SDL program related revenue, non GAAP adjusted gross margin was 84% in the fourth quarter of twenty twenty four compared to non GAAP adjusted gross margin of 86% in the fourth quarter of twenty twenty three.

Total operating expenses for the fourth quarter of twenty twenty four $19,300,000 compared to $22,200,000 in the fourth quarter of twenty twenty three. The overall decrease in operating expenses was primarily driven by operational changes made in 2024, As Mark Erik discussed, the company plans to continue to make targeted and disciplined investments to drive long term growth, which include investments in new products and product enhancements for our customers our commercial sales team and investments to scale SecuredX, We ended 2024 with combined total cash and cash equivalents and investments of 190,300,000.0 and no debt. Moving to our initial 2025 guidance, we expect core revenue growth of 8% to 15% compared to 2024. Inclusive of revenue from SecureDX, which we expect to be at least $2,000,000 for the full year. We are not assuming a change in the current macro economic environment experienced by our customers within our guidance we continue to remain in close discussions with our customers and how their needs might change throughout the year. MaxCyte navigated well through the continuation of a difficult operating environment in 2024. And we are very confident in our ability to commercially execute on our outlook for 2025. SBL program related revenue is expected to be approximately $5,000,000 in 2025, which includes both expected revenue from pre commercial milestone payments and commercial royalties and sales based payments.

We will not break out the components of SPL program related revenue due to confidentiality agreements with our customers Additionally, we would like to note that our SPL program related revenue outlook is a risk adjusted forecast that is achievable under a variety of potential outcomes. Across our SPLs and planned clinical progress and commercial success of our customers.

Finally, MaxCyte remains in a solid financial position and expects to end 2025 with approximately $160,000,000 in cash, cash equivalents and investments on our balance sheet. I'd like to close by stating that MaxCyte well positioned to deliver on our 2025 goals.

We continue to remain dedicated to modest cash burn and operating as a streamlined organization to best support MaxCyte long term vision and growth outlook. Now I'll turn the call back over to Maher. Thank you, Doug. We are proud of our progress thus far in 2025. I would like to thank our team at MaxCyte for their dedication to the company, and our customers every day. With that, I will turn the call back over to the operator for the Q and A. Operator?

Certainly. And our first question for today comes from the line of Matt Larew from William Blair. Your question please. Hi, good afternoon. I wanted to ask on the guidance for the core business.

By back out SecurityX, it looks like something around 9% growth. Just maybe just a sense for what that reflects in terms of end market dynamics as well as where it is versus where you expect kind of the normalized or longer term growth for the core business to be? [indiscernible] Matt, nice to hear you again and good talking. So let me take that for a second. I can turn it to Doug as well. So we're still seeing continued growth across our customer base, both on the research side as well as the Temple side. As we saw throughout '24, we saw increased PA usage as well. Which is a very good sign that we talked about, we see that market recovery. And really a lot of the answer to the fact that we continue to believe the operational changes that we've made the execution that we believe we can continue to make throughout the year should give us a year over year growth that we had in 'twenty four versus 'twenty three as well. So really it's across the board Matt. It's not any one particular area. It's just a great execution of the commercial team, scientific team, and organization as a whole to understand where the market is going, and really have those precise call points that we did that we were able to take on 2024 and continue that in 2025.

Doug, anything else to add there? I'm Matt. Instruments did tick down 2024 versus 2023. We see opportunities start pulling that in the right direction. Obviously, PA sales were strong last year versus 2023. And so we expect or hope that will continue as built in our forecast forecast is looking at a run rate that is aligned with the rolling forecast or rolling and experience on a pull through basis and looking at our forecast for instruments. So I think as Mary mentioned, across the board, we expect to see some growth this year.

But we're being a little bit conservative in the guidance Okay, understood. And then on SecurityX, you mentioned $2,000,000 included this year. Can you maybe give a sense for sort of what the revenue track record is there? How much they have been growing, expanding customers? If there's any business model changes or bundling you're anticipating doing that would be helpful in terms of framing how that's going to fit in and scale up throughout the year. Yes, Matt. So great question. SecurityX began commercializing really in 'twenty four was the first full year of commercialization. So it's it's very early in the process. We see great growth for SecureDx. We're being fairly modest in our growth projections for them in 2025 as well. Obviously, this is greater revenue this year than they had in 2024. We feel that we can continue to grow that The business model that they have really is more services based business model with a highly differentiated service that truly only they can do. There's not much competition there that can meet with their service capabilities and what I call soft IP that they're building around their assays, whether it's their guai tic assays or one tic assays or their screening assays as well.

So the business model really fits into what we do, which is highly scientific highly differentiated where we know can work with developers to really ensure their timeline to the clinic is faster in a safer, more consistent manner. That's what SecureDx does. It's a [indiscernible] But we feel confident in that two plus number, it's at least 2,000,000 that we continue to grow it at a fairly fast rate based on their current infrastructure and then also integrating into them or into them into us into our commercial team as well. Anything else to add there, Joe? Yes. I just want to reiterate or sort of point you over to the press release and what we said in our comments earlier. Core revenue is expected to grow [indiscernible] That is inclusive of revenue from SecurityX and we're sort of not breaking out specifically other than we think it's going to be at least $2,000,000 but how we get to that 8% to 15% growth rate and how much Secure makes of that and how much of that is leases versus instruments versus processing assemblies. We're not breaking it down at this point in the year, but we'll obviously start to peel things back when we report in May.

Okay. Thank you.

Thanks, Matt.

Thank you. And our next question comes from the line of Julie Simmons from Hi, yes. Just on Secure again, I was just wondering how much in the way of costs are going to integrate into MaxCyte as a whole? Because I'm guessing in terms of some of the basic infrastructure [indiscernible] that business fairly swiftly.

That's right, Julie. I mean, the cost to our to our continuing operating expenses is fairly immaterial. We have the entire commercial infrastructure to support them. So it's immaterial cost and it's also part of our guidance terms of our end of year cash includes in SecurityX operating expenses. So we feel very confident that the addition of SecurityX can leverage what we've built here over the past few years, especially since our IPO where the team that we've built can commercialize the assays for SecureDx with very immaterial operating expenses attributable to SecureDx. If they have obviously there is some cost structure associated with operating that line of business. There's a facility in Waltham and that will be continuing to make some investments there, but it's going to be a material part of our burn. And I think that in terms of their ability to contribute on a cash basis, we feel very optimistic that that can happen. In relatively short order. One of the things we like about that business is one of the things we like about what we've done here is we've made investments that are extremely scalable, And so we look forward to seeing growth really hit the bottom line eventually as we continue to see hopefully return to some better conditions out there for our end users and then then continued execution of our plan.

So I think again, there's leverage ability of the cost structure we have very significant.

Excellent. Thank you. And just another one on sort of your exposure to the academic markets and NIH spending? Because I mean, I know that has been an area where you've sold a reasonable amount of instrumentation in the past. So I was just wondering if you've noticed any any change in that environment at the moment?

Actually, it has been somewhat insignificant part of our business in terms of where we can directly link it to to a grant. So we don't think this is going to have a material impact in the short term. Obviously, we want to see continued robust investment in the cell and gene therapy and that includes on the front end. And so long term, it could be challenging, but I don't expect it to have an impact in the short term.

So Doug, if you mentioned the excluded NIH branch is really very, very low. So much so if we get the exact number, we're talking about $300,000 here. It's almost it's really immaterial If you look at Julie, the way we built this organization and and really everything we've done has been focused on is showing that we're working with those biotech companies that later stage companies that are getting ready for the clinic. So the exposure to NIH is immaterial. At best.

Excellent. That's very good news. And then just as far as sort of the FPL environment is concerned, are you still seeing customers wanting to sign up at the similar sort of stage and that most of them were at the pre IND level? Or are they looking at sort of any earlier for sort of when they sign those agreements No, that's a great question, Julie. It's still at that pre IND level. As I mentioned on previous call, we work with these customers off often times for a year before really going in there showing our differentiated technology, showing our differentiated scientific support And when they're close to that pre IND, that's when they begin to have those negotiation with us. And we're still confident that we can guide to three to five a year It's a sign of the health of our business. It's a sign of the health of our differentiated platform. That is still on the same timeline, Julie. Brilliant.

Thank you very much. We'll run through that.

We've got one in the books and we're not even through the first quarter. That's right.

Thank you. And our next question comes from the line of Brandon Smith from TD Cowen. Your question please.

Great. Thanks for taking the questions. Congrats on the progress, guys. Appreciate the color on the thinking that went into 2025 guidance. So maybe just kind of one more with respect to the Secure integration. Can you just kind of maybe remind us a bit how we should think about kind of the combined gross margins? Where you think those could go over the near and maybe a little bit longer term as that kind of get ramped up in there? And then any potential or even maybe likelier opportunities for upside to top line numbers that you would maybe call out for 2025? I know not necessarily baking in huge recovery just into the guidance itself.

And then maybe I'll just have a follow-up after that. Thanks.

Yes. I think what you're asking, Brandon, if I hear your question correctly is, first the first question in terms of Securus integration, how they can contribute from her directly, Brendan, how they can contribute to our guidance. Is that what you're getting at? Just to make sure I clarify your question.

So I think for Secure really just how we should think about kind of the combined gross margins there and then separately any potential opportunities for upside that you guys would want to call out just for this year specifically? Independent of that?

Yes. So the combined gross margins, Doug, how do we when? Yes.

I mean, I think that without getting to your granularity here on what that cost structure looks like, because we're not breaking that out separately right now. We have healthy gross margins. We look at it obviously on an adjusted basis. We take out that revenue that is SPL revenue which comes in.

Without any costs associated with that as well as we've adjusted adjusted for any inventory provisions we've made. I think we're going to continue to enjoy high margins you know, in the low to mid-80s even with SecureHero without.

That's exactly right. I mean to your question on the combined part of why Secure really made sense in terms of integration is that how the gross margins that they have and exactly as Doug said, we feel confident in the foreseeable future The combined gross margins will be remain at a very, very healthy in that low to mid 80s gross margins. And then in terms of the question on the top line, is there opportunity for us to exceed that 8% to 15% that we're guiding to? Obviously, we got it here somewhat conservative, right? We have to ensure that there are case there are headwinds out there As we know, we're not completely pervious or if we can untether ourselves the overall global markets in terms of what we see there in the biotech funding. But in terms of the health of our business, assuming there's no further deterioration to all of our global markets, we've guided very we've guided conservative guidance, if that makes sense, Brandon. We're not really baking in any improvement or further deterioration in the market. There's obviously shades of gray in there. If you look at the range we're providing, it's probably a combination of of how healthy the operating environment is sort of within the current comp context of it as well as our ability to execute against the opportunities that are in front of us.

I think when you start to look at potential coming out outside those ranges, it's probably going to be the market independent and that could provide for further upside if we see some recovery there.

Okay, great. Thanks guys. Very helpful. Yes. Thanks, Brandon. Thank you. And our next question comes from the line of Mark Massaro from BTIG. Your question please.

Hey guys, thanks for taking the questions. So I think the Secure acquisition is pretty interesting. In the sense that it broadens out your pipeline.

I think beyond you talked about both ex vivo and in vivo as well as viral and non viral. Is there any way that you could share what I think you talked about two zero one cell and gene companies with 83. I think that may be opportunities for you. Can you just give us a sense of the overlap of customers between Secure and MaxCyte prior and what the incremental opportunities you are leveraging Secure's product offerings?

Yes, great question, Mark. I mean, obviously, the excitement I have secure I'm not so sure it's coming across just yet. The opportunities are enormous in terms security provides to us because we talked about the VARO and the non borrow programs. So when you think about for a second, we have 84 non viral programs that we MaxCyte with our transfection platform can target. So Secure can also target those. What Secure also does is the entire clinical, the four forty nine programs as well, even non viral programs, we now have opportunities to get to target And then in terms of even a larger number here, we have three clinical programs of three eighty three programs 193 of which are non viral programs. Which what MaxCyte said with our transfection platform targets. SecureDx can target the entire landscape. So looking at three eighty three programs preclinical 49 programs clinical, It gives us a footprint in the entire cell and gene therapy space, whether it's borrow or non borrow. To really showcase best in class solutions that we provide on the ex vivo side as well as best in class solutions on the SecurityX side for the entire landscape.

So you can tell the breadth that we have now there's an overlap of the 84 programs that we currently know can target that SecurityX gives us that ability to target through and then additional two forty nine clinical and three eighty three preclinical programs as well. The entire endivo ex vivo space.

Yes, that's very helpful. And then can you perhaps go into a little more detail about [indiscernible] revenue opportunity in the sense I guess what I'm really asking is how do they monetize? I know it's a services company. So is this like a fee for service or is this I'm just curious how the revenue gets recognized it's like a subscription trying to figure out how lumpy it is as we think about going out a couple of years?

Yes. So right now, it's exactly you said. It's a fee for service with Octane for us to as we build them out, we take on that great potential that they have for us. There's opportunity to also we're looking at that for a subscription based model as well for certain parts of their estate. Depending on the development timeline, whether it's early discovery or later in the clinical development. But right now, it's a fee for service with highly differentiated services for that fee. So that's the basic ball right now, Mark.

Okay. And I think I heard you guys say this, but checking that the guidance for 2025 does not assume any change to the environment. And I think the environment is broad, but I just want to make sure you're assuming capital raising environment, macro environment, all basically all potential risk factors at this time.

Sure.

So we're obviously providing a range for revenue and it's going to be made up of the various components and we'll the way, we think Secure has significant growth opportunities. We're looking forward to seeing that business provide some growth opportunities. In terms of whether where we see this year, I just want to be clear, we don't we're not counting on a recovery or the market changing significantly. However, when you look at that range, it's probably at the current environment we're in, they're shaped. So think of it as we're if light is yellow, there are shades of yellow, but if things go green or things go red, that probably falls outside the range. And of course, in addition to the fluctuations of where the market actually is, it's how we're going execute on the opportunity. That's really where the range comes in. If I'm modeling it out, I probably look towards the middle of that, but I see we're being conservative.

Sounds good. I will hop back in the queue.

Thank you, Mark.

Thank you. Our next question comes from the line of Dan Arias from Stifel. Your question please.

Thanks for the question. This is Paul on for Dan. I guess just touching on the guide for core revenue. You talked about not including any not baking in any kind of improvement throughout the year.

Even though there is some upside there. As you said, you're cautiously optimistic that there will be better funding environment. But just in terms of not baking that in, how does that play into what the quarterly cadence is going to be from a guidance perspective? Can you just give us some color there? [indiscernible] components are of core revenue and obviously Secure is going to be part of that. But I don't expect lumpiness there. In terms of the breakdown between the license revenue, that's pretty stable. You can model that out throughout the year on an even basis. The What we're doing in terms of the processing assemblies, we model that out. We're looking at a rolling run rate of pull through across the installed base.

Using that to model that out. We don't expect significant lumpiness there, although historically sometimes the third quarter is weaker than the fourth quarter. We do see that occasionally play out, although we don't consider our business one that's significantly seasonal. If you will. I think if there is a lumpy component to this, it's instrument, because that's where we're looking at that on specifically identified opportunities, identified and validated opportunities using historical conversion rates and coming up with estimates And I can't say that those are actually that there is not differences between some quarters in that, but I don't think that we're prepared to break that down terms of the guide at this time. Don't think it'll be significant, but I think if there's some lumpiness there, it'll probably be in instrument sales.

Okay, that's helpful. And then just the one follow-up is, you talked about kind of the conservatism in the guide for Secure. And I think when the acquisition came out, you had said that the business transitioned over. Towards the service revenue. I think it was in March of twenty twenty four. To what extent can you kind of touch on to what extent the growth this year is just kind of lapping that transition and getting that higher service revenue in the first quarter versus integration into your overall commercial infrastructure versus versus just kind of expansion of the business and penetrating more customer accounts?

I think it's important to realize just how early that that business is in terms of when they came out of stealth and we're actually operating the business. So I think that's part of that.

Yes. I think it's a good question, Paul, in the sense of right now we're going to that just based on the fact of the expansion of the business that they began to roll out last year. As we have more full integration of SecureDx into the MaxCyte commercial team throughout the year, we see even more expansion opportunities than they currently have. So that $2,000,000 plus is really an expansion of what they did last year on the services side. That's rolling into the Q1 of this year And we feel confident as we begin to continue to integrate to our commercial team, we can expand their portfolio as well on the services business that they rolled out in 2024. Great. Thanks for the questions. I'll jump back in the queue.

Thank you. And our next question comes from the line of Matt Hewitt from Craig Hallum. Your question please.

Good afternoon. Thanks for taking the questions. Maybe first up Secure, is the sales and marketing effort, has that been integrated yet or when do you anticipate that could occur? It has not. To hear your voice. It has been integrated actually from day one upon the acquisition. Roughly a little over a month ago. The marketing and the sales integration has happened from day one. And we feel confident over the course of the year that integration from day one will begin to give us the traction and the exposure to Secret DX's offerings. Obviously, there's more There's more marketing that we do for security actually make sure that all the major conferences ensure that we have application notes that are highlighting their different highly differentiated assays. But that integration happened from day one then.

Got it. And then maybe just kind of taking a step back on the MAC three three, four months, have you noticed or heard any change in the the conversations that you're having with customers? Obviously, there's been a lot of noise here over the past couple of weeks, tariffs, budget cuts, all that kind of stuff. But what are you hearing from customers? Has that changed at all? Or are they kind of still feeling like it's steady as she goes and progressing?

I mean 55% of our revenue was from SPL customers. So there's things that are progressing through the clinic. And so so it's been for the most part, ordinary course of business, everything is chugging along there.

When you look outside that, I think opinions vary.

But we're where we are in the year here, we're two months and change into the 2025 and we're getting we're comfortable with the guidance we're providing based on where things are today even with sort of a little bit of more headwinds than we probably expected earlier in the year.

Yes. Let me add to that Matt as well. So obviously last year we saw that the prioritization of programs but it's level off. So it's and that's where we are now. Where our customers deprioritized programs had more focus on what programs they want to take into the clinic. That continued throughout the year. And now it's stabilized as Doug has mentioned. I mean, obviously, is the macro environment the same as it was nine days ago? Not the same. But in terms of our customer base, it's the same. We saw that deprioritization We saw what we call that trough all the way through last year that's now stabilized. And that stabilization has stayed all the way through the first quarter in terms of what we're seeing so far. So what we're seeing now is really execution of the current market where it is.

And it's another year of returning back to growth as we did in 2024.

That's great. Thank you very much.

Absolutely. Thank you, Matt.

Thank you. And this does conclude the question and answer session of today's program. I'd like to hand the program back to Mahind for any further remarks.

Thank you, operator, and thank you everyone for joining us on today's call. We look forward speaking to you again our next earnings call in a few months. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. [indiscernible] [indiscernible]