Quanterix Corporation Price & Performance (QTRX)

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Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Quanterix Corporation Fourth Quarter twenty twenty four Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer If you would like to ask a question during this time, simply press star followed by the number one And if you would like to withdraw your question, press the star one again. Thank you. And now I would like to turn the call over to Joshua Young, Head of Investor Relations. Please go ahead. Thank you, and good afternoon. With me on today's call are Masood Tulu, Quanterix President and CEO and Vandana Sriram, Quanterix Chief Financial Officer. Today's call is being recorded and a replay of the call will be available on the Investors section of our website. During the course of today's presentation, we will make forward looking statements within the meaning of The U. S. Private Securities Litigation Reform Act These forward looking statements are based on management's beliefs and assumptions as of today 03/17/2025. We may not actually achieve the plans, intentions, or expectations this disclosed in our forward looking statements.

Forward looking statements involve known and unknown risks uncertainties, assumptions, and other factors that may cause our actual results performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward looking statements. To supplement our financial [indiscernible] presented on a GAAP basis, we have provided certain non GAAP financial measures. These non GAAP measures are used to evaluate our operating performance in a manner that allows for meaningful [indiscernible] period comparison and analysis of trends in our business and our competitors. We believe that such measures are important in comparing current results with other period results and assessing our operating performance within our industry. Non GAAP financial information presented herein should be considered in conjunction with and not as a substitute for the financial information presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non GAAP measures to their most directly comparable GAAP financial measures set forth in the presentation posted on our website and in our earnings release issued today. Any percentage changes we discuss will be on a year over year basis unless otherwise noted. Now I'd like to turn over to the call [indiscernible] Masood?

You, Joshua. I'm pleased to report that Quanterix delivered our seventh consecutive quarter of double digit revenue growth driven by robust demand for Samoa sensitivity. In a capital constrained environment, this performance is a testament to past investments we've made in focusing our business model on multiple vertical markets and recurring revenues. I am pleased with our team's operational performance in the quarter. We achieved revenue of $35,200,000 in our top line grew 11% driven by capacity expansion [indiscernible] Which grew 22% in the quarter. Additionally, our investments in developing testing infrastructure for Alzheimer's disease is just starting as we generate $2,700,000 of partner enabled revenue in Q4. Our approach to growth has been disciplined while improving margin and core operating costs. Our non GAAP gross margin of 57.7% in the fourth quarter represented an increase of 300 basis points over the previous year driven primarily by higher price and improved operating efficiency. Our cash usage declined by 31% to 4,400,000.0 the fourth quarter Vandana will elaborate more on these results later in the call. Taking a step back, I want to talk about how our investments are driving strong returns in the business. And how our team's disciplined operating execution is helping us outpace peers.

Over the past two years, we generated a revenue CAGR of 14% while increasing our recurring revenues from 65 to 80%. We've expanded margins from 35 to over 54% today, We've reduced our cash burn by nearly half all the while continuing to invest in R and D to position the company for future periods of high growth. With this foundation in place, we're in an excellent position to execute our three year strategy. Number one, grow menu. We're extending our leadership position in neurology while developing assays tailored for new markets. We launched 20 new assays in 2024, including 13 in neurology addressing therapeutic areas such as multiple sclerosis, Parkinson's disease, and traumatic brain injury. We also launched ultra sensitive multiplex panels for therapeutic development of key immunology related disorders such as obesity, arthritis, and neuroinflammation. Two, expanding into adjacencies both organically and inorganically. We're expanding into immunology and oncology markets there's the MoaOne platform and our recently announced merger agreement to acquire the Quanterix which will strengthen and accelerate this effort. I'll talk more about aqua in a few minutes. In 2024, we made progress on our Simo-one platform, which we expect to launch at the end of twenty twenty five, and will further extend our business in immunology.

Through SEM-one, we will increase plexity and sensitivity beyond our current platforms, further extending our lead position. Assays on this will include code match technology which are optically encoded barcodes, on proprietary emission beads that will allow us to RoPlex while maintaining high, [indiscernible] across the assay and an efficient workflow with results in less than three hours.

Finally, number three, translating into diagnostics. We're focused on building the leading global diagnostic testing infrastructure for Alzheimer's disease. We added 12 partners to our network last year and are working to expand this year with 10 new hospitals and reference labs already in active test validation. In 2024, we launched Lucent AD Complete, a multi marker algorithmic test that combines five biomarkers. It's available today a laboratory developed test and we're pleased to report that we're making great progress working in our prospective trials with plans to submit our package this year to the FDA under our breakthrough designation. As I discussed earlier, the importance of making strategic investments into growth and driving high recurring revenues in the business have yielded strong results for Quanterix. Over the past two years. [indiscernible] spend a few minutes on how our proposed acquisition of Aquila meets this objective. We are confident it will deliver long term returns to shareholders for three core reasons. One, expand the addressable market. Two, actionable synergies And three, enhanced scale. Through this combination, we're expanding Quanterix's research addressable market. From 1 to 5,000,000,000 and our diagnostic TAM from 10 to 15,000,000,000. By combining Quanterix, a number one player in ultrasensitive detection of proteins in blood, with a Koya, number one in biomarker detections in tissue, we will uniquely position the company to speed up market development of new tissue, and liquid biopsies.

Which we believe will eventually surpass the market size of all other diagnostic tests combined. Second, we have a clear line of sight achieving the synergies we've projected. With regard to revenue synergies, starting immediately upon closing, Equia will offer their neurobio solutions to our over 1,000 instrument install base. And we will provide our oncology solutions to ACOIA's 1,300 instrument install base. Much of our team including myself, are intimately familiar with the Quaya's platform, and its capabilities. And we have owned their instrument for several years. This coupled with our own organic program of SOMALA-one gives us tremendous confidence we'll be able to hit the ground running on our cross selling opportunities. There's also a considerable customer overlap between our companies, We share the same top pharma customers, and generally speaking, half of our team visit the same customer. We're very much focused on recurring revenues, We executed this at Quanterix, and intend to apply the same playbook to the combined company. With regard to cost synergies, 100% of our $40,000,000 operating synergies will be run rate by 2026. We'll expect $5,000,000 per quarter in the first twelve months and we'll achieve $10,000,000 per quarter by the end of twenty twenty six.

Finally, there's a lot of low hanging fruit on the SG and A side we can go after relatively quickly. Both companies are located in Boston, use identical antibody reagents, and similar operating infrastructures which further de risks footprint consolidation. Third, we're accelerating scale and profitability. By combining with ECOIA we expect to generate positive free cash flow in twenty twenty six, one year faster we would as a standalone company. The transaction creates a new path for us to grow from a company with approximately a quarter billion in revenue this year to one with a billion in revenues with EBIT margins of fifteen percent five years post close. This goal reflects the contribution of diagnostics revenues from ECOIA and Quanterix as well as meaningful contribution of revenue from our new SYMMA-one platform. I want to conclude by saying a few words about current market conditions. While there are some degree of market volatility our view is that good research, in important chronic conditions will continue to be supported by private and public sectors alike. Investments we've made in our business model across multiple markets namely research, pharma, and diagnostics, using a combination of products, and services continues to uniquely position the company for growth and a path to profitability. [indiscernible] we make investments in high growth markets for future cycles of value creation.

These efforts have delivered over the last two years and we expect them to continue. Vandana will provide more detail our financial performance.

Thank you, Ms. Sood, and good afternoon.

I will now go over our performance for the fourth quarter full year results, and provide our guidance for 2025. As Masoud described, in the fourth quarter, we continued our record of double digit growth and margin expansion as compared to the prior year. Total revenue for the fourth quarter of twenty twenty four was $35,200,000 an increase of 11% compared to the prior year. Accelerator lab revenue was 8,600,000.0 an increase of 22%, driven by strength in testing services for clinical trials, and custom assay development. As disclosed earlier, our Lilly collaboration agreement was completed in the third quarter. Consumable revenue was 17,400,000.0 flat with the previous year as customers continue to transition to Advantage Plus assays. The Advantage Plus transition is approximately 50% complete, and we're on track to have all customers convert to Advantage Plus consumables by mid twenty twenty five. Instrument revenue was $3,100,000 down 7%, but up 29% sequentially. We placed 18 instruments in the quarter, up five instruments from the prior quarter.

Other sales of 6,000,000 include approximately 1,400,000.0 of license revenue, related to advancing our partner network in Alzheimer's disease diagnostics. For the quarter, we reported $2,700,000 of revenue from our diagnostic partners. Shifting to the rest of the P and L for the fourth quarter, GAAP gross profit and margin 22,200,000.0 and sixty three percent respectively, up 2,800,000.0 and approximately 150 basis points compared to the prior year. Non GAAP gross profit was 20,300,000.0 and non GAAP gross margin was 57.7%, up approximately 300 basis points respectively compared to the fourth quarter of twenty twenty three. This strong gross margin performance was driven by favorable product [indiscernible] strong output, and improved inventory management. GAAP operating expenses for the quarter were 36,900,000.0 up 3,900,000.0 and non GAAP operating expenses were 35,100,000.0 up $4,200,000 over last year. Included in operating expenses approximately 2,700,000.0 of costs, related to our ongoing M and A transaction, as well as the cost of the restatement of our financials. Cash usage for the quarter was 4,400,000.0 down 2,000,000 from last year. For the full year 2024, we reported revenue of 137,400,000.0 an increase of 12%. This performance was driven by our accelerator business, which increased 37% to 38,000,000.

Consumable revenue grew 8% to $69,300,000 while instrument revenue totaled 10,500,000.0 a decrease of 33%. Other revenue totaled 19,700,000.0 an increase of 32%. In terms of revenue stratification, our customer mix for the year was approximately 54, 46, between pharma and academia. Within pharma, sales to diagnostics partners totaled $6,000,000 for the year. From a geographic perspective, our revenue growth was led by North America which grew 17%. Europe grew 11%, and the Asia Pacific region was down 6% for the full year. Full year GAAP gross profit increased to 83,100,000.0 up 8,900,000.0 and GAAP gross margin was down 20 basis points year over year. Non GAAP gross profit increased to $75,000,000 also up 8,900,000.0 and non GAAP gross margin expanded 60 basis points to 54.6%. We ended the fourth quarter of twenty twenty four with 291,700,000.0 of cash, cash equivalents, marketable securities, and restricted cash. Cash usage for the year was 32,000,000 up 15,000,000 from the prior year. This included approximately $16,000,000 of investment Simoa one and diagnostics, which is consistent with our plan of investing up to $20,000,000 in these initiatives. In 2024. We are making an update to the non GAAP financial measures that we report on a quarterly basis.

As we add acquisitions to our portfolio, we are adding adjusted EBITDA and adjusted EBITDA margins as new metrics. Please refer to our earnings release and page 13 of the accompanying presentation a definition of these metrics. Our adjusted EBITDA was negative 23,600,000.0 in 2024, as compared to negative 19,000,000 in '23. As noted before, this included 16,000,000 of investment in Simoa one and Alzheimer's diagnostics up $7,000,000 from the prior year. Excluding these investments, we've made real progress towards our goal of achieving profitability through tight execution in our core business, which is allowing us to continue to make these strategic investments. Turning now to guidance for the full year 2025. We currently expect to report revenues in a range of 140 to 146,000,000, which represents growth of two to 6%. This excludes revenue from Lucent Diagnostics testing. Mathieu touched on some of the market volatility that we're observing in the near term. While we have minimal direct exposure to NIH spending, about twenty-twenty 5% of our annual revenues are tied to US academic customers. We have assumed that revenues related to US academic customers will be down 10% in 2025, representing a year over year headwind of approximately two fifty basis points.

Additionally, our accelerator lab which is coming off a two year CAGR of 27%, is expected to have a slower start to 2025, as we see a lower number of large pharma projects the first half of twenty twenty five. Accelerator pipeline remains strong and we expect our accelerator business will pick up pace in the second half of the year. From a revenue timing perspective, we expect the first half to be flat to slightly down year over year, and ramping in the second half. We expect our first quarter revenue to be down 10% to 15% driven by the near term impact of The US academic market, and the timing of certain accelerator projects. Moving on to gross margin for the year. We expect GAAP gross margin to be in the range of 59% to 63% and non GAAP gross margin in the range of 53 to 57%. And finally, we expect cash usage from our operations be 35 to 45,000,000. This includes approximately $30,000,000 of investment in diagnostics and SMOR1. In terms of allocating capital to deals, we expect to pay 20,000,000 for the upfront and technical milestones related to emission. We will also incur cost related to the Akoya acquisition which we will identify separately as those costs I incurred.

We also reiterate our prior comments around achieving REO cash flow breakeven in the 170,000,000 to 190,000,000 revenue range, excluding diagnostic investment. With expected investments of 15,000,000 to $20,000,000 annually on diagnostics, We expect that Quanterix will achieve cash flow breakeven in 2027 or 2028. The integration of APOYA and the realization of $40,000,000 of synergies expedites that timeframe to 2026. I will now turn it back over to Masood.

Thank you, Bandhana. Over the past two years, Quanterix has demonstrated strong, operational performance building the base. We are executing a three year strategic plan centered around menu, adjacencies, and diagnostics that will expand the adoption of our ultrasensitive Simoa platform significantly growing our addressable market. And in doing so, we have outlined an accelerated path to scale and profitability. Operator? Let's start the questions.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, simply press star one on your telephone keypad to raise your hand and join the queue. And if you would like to withdraw your questions, simply press the star one again. If you are called upon to ask your question and listening by loud speaker on your device, please pick up your handset. And ensure that your phone is not on mute. When asking your question. Your first question comes from the line of Matt Sykes of Goldman Sachs. Please go ahead.

Thank you and thanks for taking my questions this afternoon. Maybe my first question you outlined sort of the impact to NIH and academic which I understand. I guess I'm just wondering in terms of the cadence over the year given the the guide you had for Q1 is pretty steep and it seems reliant upon some of these large pharma contracts coming back in the second half. In Accelerator Lab. I guess, one, why were they delayed in the first half? Is it a timing issue? Is it demand issue? And two, what gives you confidence they'll come back in the second half to meet that full year guide?

Yes. Hey, Matt. So yeah, I think when you look at Accelerator, first you have to take a look at the strong performance over the last year. Accelerator grew for us 3037%, year on year, strong two year CAGR as well. So it's certainly performed for Quanterix. When you look at some of the increasing size of projects that we got towards the back half of 'twenty four, this became talking about projects in the million dollar range, and it became partly a timing issue where we're expecting to see some of these larger projects materialize more on back half. We still have high confidence in what we're seeing with Accelerator, the diversity of customers that we see in the pipeline, is even better than last year, and you know, the word is getting out there that we can deliver excellent results without you know, in a CapEx constrained environment. So, overall, those are the reasons that give us a more bullish view Accelerator continues to deliver for Quanterix.

Got it. Thank you for that. Masoud. And then just as my follow-up, mentioned I think it was 10 hospitals and labs that you've gotten in the validation phase right now. Are those sort of sign contracts that you've got? Or are those could those slip into further quarters? And if not, like when do you expect those to be contributing to revenue over the course of this year?

Yes, we expect of the, you know, have 10 in validation. Some of them are actively in contract phrase and some of them are waiting for validation to be complete before we sign some of these contracts. So we expect, you know, some of this to contribute to some 25 revenue over the period, but we haven't provided any sort of break down as to how many will provide revenue in Q1 versus Q2 or subsequent quarters? But I can say that the pipeline looked great. Folks are signing up to use the Quanterix test because of the high sensitivity, we provide a result for all patients, not a subset of patients based on our sensitivity. And the multiplex test has garnered a lot of excitement. So, I think we have 10 right now that are validating. And I would I would be surprised if we did an increase that number as we had throughout the rest of the year. Got it. Thank you. Your next question comes from the line of Kyle Mixon of Canaccord. Please go ahead.

Hey, Thanks for the questions.

I would love to just ask about the merger. [indiscernible] dropped significantly since the announcement, presumably due to the negative sentiment around the deal. Maybe some of the NIH and macro stuff as well. What's the company's response to that Like what are investors missing? And then how has the Board's view of the merger changed at all in light of the reaction?

Hi, Carl. Yes, so two things. One, you know, clearly we're in an NIH pressured environment. And I think, you know, a majority of the pressure you see you know, on Quanterix or other companies is exactly, hey, tools are indexed to academia. And tends to be or looks like some paralysis in the market on spending in academia, and I think that's what you're seeing across the board. Versus sentiment on the deal. We're very excited about the deal. This is a value creating opportunity for the company. I think you look at the Equio two words, I would say reoccurring revenues. Know, when we looked at a couple of years ago, all tissue and spatial platforms Sequoia was number one. Has the highest throughput, instrument platform, largest footprint, And when you're looking at an environment where there's capital constraint, you have to go to recurring revenue. As we have in our consumable base at Quanterix as you have in services. We put these two together and we see a real opportunity that one on one is four, and not two, and that's why we think that this is the right thing for the company and the timing is going to be something that we're going to be able to not only combine and synergize, but it's going to be accelerating for us from scale and profitability standpoint.

All right. Got it. Thanks for that. And then for you, Orfonta, it sounded like the dyedopinabulin revenue in 2024 was $6,000,000 for the year. Could you just confirm then how that trended throughout the year? And then is that the DX revenue to your, I guess, partners, is that included in the the '25 guidance today or is that kind of incremental?

Yeah, can take that. Yeah, confirming that 6,000,000 is the revenue that we generated from our diagnostics enablement partners. We started to call that out from the second quarter onwards. And, you know, we've had a steady cadence of anywhere between one to 2 and a half million each quarter. Through 2024. That is, you know, the sales to diagnostics partners is incorporated in our guide, and we would expect similar revenue amounts as we start to add additional partners. What's not in our guide is direct testing on the Lucent side, which again, as the market evolves, we'll provide more information on.

Awesome. And on a related note, could you talk about the Samoa One launch and how that could impact results by end market and [indiscernible] up a little bit.

Yeah, so we expect SYM-one to launch towards the end of the year, in 2025. So not super large contributor, but very excited about how this expands the addressable market specifically around immunology. And so, Carl, you know, we've been talking about this platform in our view that with our ultra sensitive ability to detect these protein biomarkers in blood, We're now, you know, 70 plus percent in neurology. And we want to expand the applicability of this platform to immunology and oncology That grows our addressable market and by adding additional PLAC with similar one we're going to be able to unlock some additional market opportunity. So super excited. About the platform. We should have more information on launch dates and additional specifications as we head towards the back half. And, yes, I think this is a super critical time for Quanterix and important as we really expand Samoa not just to specialty neuro labs, but to all labs.

Yeah, and from a guidance perspective, you know, we expect the instrument to launch towards the end of the year. The contribution for 2025 is relatively modest, but as we look to 2026 and beyond, we see this as a key growth driver. Your next question comes from the line of Puneet Souda of Leerink Partners. Please go ahead.

Yes. Hi, guys. A couple of questions here.

Maybe Masood would love to understand, I mean, you're guiding more than $12,000,000 below the street number, which one could argue was already lowered from the NIH IDC impact and other concerns in the market.

Given the uncertainty in the market, could you elaborate, how are you thinking about the 2Q and 3Q recovery? Because a lot of that is still uncertain across the sector. You still have a sizable academic exposure. So just how do you get confidence on that to get to the 140,000,000 to $146,000,000 guide for the Yes. So first I would take a look at you know, the Quanterix's performance over the last year. In a difficult capital environment, Quanterix continues to find ways to grow. And what we did was last year we invested in our accelerator capacity That accelerator grew 37% for us ended up with double digit growth as we reported for full year 'twenty four. I don't think there was another tools player that grew at all last year And so Quanterix you know, definitely grew double digits and that was great success. This year I think that you look at sort of growth, we're going to continue to grow. I think what you're seeing in the guide is that there's a lot of confusion and some paralysis in the academic market. I want to point out that we think it's just that. Paralysis. If you sort of look at [indiscernible] and the cuts to indirect, folks don't use indirect budget to buy our platforms or systems.

That's direct budget. And so, you know, ultimately I think this is more of a transient thing. I don't think we're our exposure long term is going to be something that going to affect us. But that being said, there is some sort of paralysis whenever there's indecision and, you know, bureaucratic systems that are making decisions. So we do have baked all of the academic pressure into the guide for the year. If academic funding is unlocked earlier, that'd be an upside to what we're reporting. If some of the indirect budget cuts were moved to direct, is where folks use you know, use the the budget people use to buy our systems. That would be upside to what we're looking at here in the guide Capital improvement would be upside and obviously in what we're reporting, it doesn't include any sort of DX testing ramp.

Okay. That's helpful. And then maybe let me ask it a different way. I mean, is really the number one question here. And I think it's even more relevant today than early January when announced the deal. I appreciate the TAM estimates that you were putting out, but a lot has happened in the tools since January '10 when you announced this deal, not just macro uncertainty and IHIDC cuts. There have been significant material impact across the sector and valuations So just given all of that backdrop and the uncertainty which you're already citing in your own guidance now, which is lowered versus the street. I guess simply put, why do you continue to value Acoya the same as you did in early January. We really appreciate more on that. Thank you.

Yeah, Puneet. So, you know, one as I mentioned earlier, we look at not make long term value decisions. Not on short term swings and market demand. We believe in the short, mid, [indiscernible] the market for Aquaeus products and particularly the interface with our Samoa products are going to deliver compounded returns. Going back to the three key reasons why we think this makes sense. You know, as you alluded, we're increasing our addressable market. By combining us, number one in blood with the COIA, number one in tissue, we think that that's going to unlock additional markets for us and get our platform and our systems and additional labs Second, this $40,000,000 in cost synergies, you know, we talked in the prepared remarks that this is largely derisked. There'll be operational run rate by 2026. And then finally, scale and profitability. The transaction is creating a new path for us. We're going from a company that's you know going to be in the sub billion dollar range and we have a goal to get to a billion dollar range you know five years post close, so [indiscernible] know, and profitability is a key point of that scale and profitability We'll be able to get cash flow positive in 2026 earlier than we would had we not done the transaction.

So you look at, you know, the value creation opportunity here, and you pull out the aperture and you look at the whole opportunity and you say this is value creating event, for the company, for investors and ultimately for customers. So we continue to be enthusiastic and look forward to closing and bringing the two companies together.

Your next question comes from the line of Dan Brennan of TD Cowen. Your line is now open.

Great. Thanks for the questions.

Maybe just on the first quarter guide, Tore, can you I don't know if you mentioned it, but in terms of the revenue decline that you're baking in, can you just unpack kind of what you're assuming for the academic and government customer base? And I know you talked a little bit about Accelerator, but just kind of wondering if you can kind of walk through a little bit like what's implied 1Q for that particular customer base?

Sure, Dan. I think so it's really the two factors that you mentioned. On the academic side, just like everybody else, we're seeing a lack of decision making and some of the paralysis that Masood mentioned. So, that in mind, we've taken our Q1 academic number down quite substantially. And then in addition to that, on the accelerator side, as you know, we don't have the Lilly collaboration agreement anymore. That's about a headwind of 1,000,000 on a year over year basis. But we also have a handful of large ticket pharma projects that are not going to hit in the first quarter, but are scheduled for later in the year. Those are the two things that we've baked into the guide.

Got it. Maybe just on the on the Equation transaction, just walk us through again what needs to happen on the closing process And then just a follow-up, Ms. Hood, know there's been a few questions asked, but there's some pushback in the market about the acquire while combined, you're very confident kind of the path forward for an attractive revenue and synergy target. How would you contest kind of the valuation that you're ascribing to Akoya?

Hey, Dan, you cut off on your last question. Can you repeat that?

Yes. Yeah, yeah, yeah. Sorry. I was just wondering kind of the closing process. From here. And then secondarily, in terms of the valuation that's being ascribed to Acquia, there's some pushback in the market that you're awarding them too much given their debt and burn. Just kind of wondering how you would answer that.

Yep. Dan, you cut off again, but I think I got the scope of your question. Please let me know if I miss anything. So, you know, one, we're planning on closing, in Q2. And so both Acquia and Quanterix will have a shareholder vote And then at that point, we expect after the shareholder vote, a successful shareholder vote, begin working towards, many of the $40,000,000 in operating synergies that we sold out. On the On the value, continue to believe that if you look at precedent transactions, that you know based on where ACOIA is that this was an attractive opportunity to both our shareholders and the Quanterix shareholders. On the larger opportunity, I think one key important point to recognize in sort of this year in this environment it comes down to reoccurring revenues. You know, Quanterix has a developed a core focus and competency on two things. Increasing recurring revenues through assays and services, When you look at the and the work the team has done, have the highest throughput system and largest footprint in the market. So in a capital constrained environment or an environment where there continues to be instrument pressure, you wanna focus on those reoccurring revenues.

We have a model that's worked, We plan on taking that model and deploying it to the combined company, and when we do that and when we achieve the $40,000,000 plus cost synergies, we pull in our run rate to cash flow positive in 2026, We're growing We have a faster path to profitability and that's a value creator for our combined shareholder base. So you know I think when you look at sort of point in time, I think you had a question on valuation, If we looked at, you know, a point in time valuation in our business and what we do, that would be fairly short sighted. And we can't make decisions on one month or two month swings or value windows. Otherwise, we'd be a trading company. We're We're generating value in developing a high growth company. And we're excited about this transaction. [indiscernible] question comes from the line of Doong Ji Nam of Scotiabank. Please go ahead. Hi. Thanks for taking the questions. I just have a few clarification questions. Just on Simoa one, you touched on the market opportunity in immunology. I was wondering if you think that the existing SUMO users could potentially adopt Simoa one as well, or do you think this will potentially replace some of the similar one install base, you know, kind of trigger in a replacement cycle of some sort.

Yeah, that's a great question. Where our focus, Sung Ji, has been on SOM-one is that as I said earlier, SOM01 all labs, not just specialty Neuro Labs. So With Samoa one, we've been very focused from an assay perspective on expanding into immunology, and oncology applications. So day one of our product launch, you're going to see immunology menu, We're going to be expanding our addressable market by going after new customers in our immunology base. Going after both research large pharma, and accelerator projects. That need higher PLEX they need greater sensitivity, and they need fast turnaround time. And so our focus has been this additional market versus a replacement cycle of the existing base. We believe that our existing base will continue based on the system that we currently have to deliver on neurology. And then there might be some overlap some of our neuro customers needing some additional sensitivity for some of their applications. But it's largely the immunology and oncology where plex of of more than four has been asked of us and we plan on delivering.

Gotcha. Great. What's your underlying assumption in terms of OUS or ex US growth for the company this year. Last quarter, I think you touched on also the UltraDx NNPA approval in China and things like that. So kind of curious what you guys are seeing outside of The U. S, in and Asia Pac in general? Thank you. Yeah, outside of The US our expectation is basically low double to high single digit growth. We normally don't pair out Asia versus Europe separately. But our expectation would be all of those markets would grow somewhat aligned with what we expected in 2024. Against that, the headwind really is the decline in The US academic market and some of The US pharma projects that have the timing slip that we talked about in Accelerator. Gotcha, and then if I could squeeze one more in. You talked about kind of the paralysis you're seeing in the academic segment. In The U. S. I just wanted to clarify are you actually seeing are there anecdotes kind of that you're seeing on the ground or are these just kind of the assumptions based on what happening? In the macro environment?

Yeah, what we're seeing, Sung Ji, is more you know, [indiscernible] In the academic market on budgets, on timing, on hiring, on, you capital purchases, and, you know, the obviously there are, you know, some days you hear that are moving forward and some days it's, you know, a couple steps back. It's just a lot of confusion. We're seeing some of this with our own customers. We're seeing it with other customers in the broader market. But I just want to reemphasize that this is, we think, transient and longer term Quanterix has a very strong and tested model around Accelerator where we're going to continue our high value projects in clinical [indiscernible] with pharma additional clinical trial work that we expect will ramp more in the back half of the year And on the academic side, we think that because we're more direct as opposed to the indirect, there could be scenarios where additional funding goes to [indiscernible] and Quanterix would be beneficiary of that. So overall, I do think that this is transient based on some of the conversations we're having, and Quanterix as well positioned for, you know, continuing to grow, as a company.

That's all the allotted questions we have for today. Thank you everyone for joining. You may now disconnect.

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