MAXCYTE THIRD QUARTER EARNINGS CONFERENCE CALL - MAXCYTE INC

Financial Performance:

• Q3 2026 standalone total revenue reached $10.2 million (49% YoY growth), comprising $8.2 million core revenue (27% YoY) and $2.0 million SPL program revenue.
• Core revenue growth driven by accelerated instrument purchases from a major partner and 32% sequential growth in processing assembly (PA) revenue; instruments grew 100% YoY to $2.8 million.
• Gross margin improved to 83% in Q3 2026 from 77% in Q3 2025; non-GAAP adjusted gross margin was 80%.
• Operating expenses dropped 25% YoY to $14.5 million in Q3; YTD net loss narrowed to ~$18 million from ~$35 million in the prior year.
• Balance sheet remains strong with $132.7 million in cash, cash equivalents, and investments, and zero debt.
• Annualized cash burn for 2026 expected to be ~$17 million, projected to drop to < $10 million in 2027 post-acquisition.

Guidance and Future Outlook:

• Full-year 2026 total revenue guidance raised to at least $34.5 million (up from prior ~$34 million and earlier $30–$32 million range), driven by accelerated instrument sales and higher SPL royalties.
• Core revenue expected to grow ~15% YoY in H2 2026; SPL revenue guidance updated to ~$4 million milestones + ~$2.5 million royalties.
• Pro forma 2026 year-end cash position expected at $133–$138 million excluding acquisition costs.
• Management anticipates accelerating path to profitability with combined company free cash flow expected to improve significantly in 2027.
• Pro forma combined entity revenue base nearly doubles (standing alone $23M in 2025 vs. Akron's $28M expected in 2026), with gross recurring revenue mix increasing from 57% to 74%.

Business Segments and Product Lines:

• Strategic Acquisition: Definitive agreement to acquire Akron Bio (GMP-grade reagents) for $151.8 million ($105M cash, $26.8M stock, $20M deferred).
• Akron Profile: Expected 2026 revenue of $28M with $7–$8M EBITDA; 80–85% revenue from "specced-in" customers; mid-60s gross margins; cash flow positive.
• Pipeline Exposure: Combined company now embedded in 4 commercial therapies (vs. 1 standalone) and 8 late-stage registrational programs, with >95 clinical programs total.
• Genentech Partnership: Enterprise-level framework expanding beyond single programs to cover research, clinical, and commercial stages; includes recurring license fees and PA utilization.
• Product Innovation: Growing traction with DTX system for early R&D, enabling seamless scale to GMP manufacturing without platform switching.
• Cross-Selling: Only 10% customer overlap; combined sales force to leverage cross-sell opportunities across 90% of non-overlapping accounts.

Market and Competitive Landscape:

• Addressable market (TAM) doubled by addressing all 770 tracked ex-vivo cell/gene therapy programs, moving from 360 non-viral programs to full workflow coverage.
• Strong demand in commercial stage manufacturing and late-stage clinical development reduces reliance on early-stage funding cycles.
• Akron's "closed system" reagents and regulatory documentation (DMFs) create high switching costs and "sticky" customer relationships once specified.
• Market trends show growing commercial launches (e.g., Vertex's Casgevy revenue up 6x YoY), driving material royalty and PA revenue for MaxSight.
• Geographic expansion targeted in Asia-Pacific (China, Japan, India) and Europe to capture academic and industry trials.

Risks and Challenges:

• Integration risk associated with merging Akron's commercial and operational teams with MaxSight's existing infrastructure.
• Potential delays or inventory drawdowns in late-stage development programs could temporarily impact revenue forecasting.
• Dependence on large pharma contracts and regulatory approval timelines for specific programs.
• One-time costs related to acquisition and integration, though offset by anticipated $3–$4 million in OPEX synergies.
• Sector-wide risks related to clinical trial outcomes and regulatory approvals.

Management Commentary and Tone:

• Tone is highly confident and optimistic, describing the Akron acquisition as a "definitive agreement to triple exposure to attractive commercial and registrational programs."
• Management emphasizes the strategic fit, durability of Akron's revenue, and the acceleration toward profitability.
• CEO Meher Masood highlighted the shift from a purely clinical-stage focus to a diversified commercial/recurring revenue model.
• CFO Parmeet Ahuja provided detailed financial validation, stressing the balance sheet flexibility and reduced cash burn trajectory.
• Emphasis placed on "durable," "sticky," and "recurring" revenue characteristics of the combined entity.

Analyst Questions and Answers:

• Sales Integration: Akron's lean commercial team will be scaled up by MaxSight's expansive global sales force to drive growth.
• PA Revenue Stability: Management expects PA revenue to grow from a stable base as previous customer inventory drawdowns subside.
• Instrument Mix: Higher average selling price in Q3 attributed to increased sales of GMP-grade instruments and leases; DTX is driving early R&D engagement.
• Forecasting Confidence: Improved customer communication allows better forecasting of late-stage ordering and post-approval cadence.
• Margin Expansion: Akron's mid-60% gross margins are attractive; room exists to leverage them closer to MaxSight's levels via manufacturing and commercial synergies.
• Cross-Selling Priorities: Focus extends beyond the 10% current overlap to the remaining 90% of customers, utilizing the combined commercial footprint.
• M&A Rationale: Akron met strict criteria for scale, profitability, recurring revenue, and TAM expansion, clearing the "highly selective" M&A bar.
• Cash Burn Logic: The < $10M 2027 burn projection relies on Akron's positive cash flow, revenue growth, and $3–$4M in cost synergies.

Other Key Points:

• New Leadership: Siddharth Kapilashwar appointed as Chief Corporate Development Officer from Danaher to lead future strategy and M&A.
• Customer Concentration: Largest customer revenue exposure drops from 27% (standalone) to 14% (pro forma), improving diversification.
• Regulatory Advantage: Akron's products are referenced in INDs and BLAs; once specified in late preclinical, they are difficult to displace.
• Strategic Vision: Positioning MaxSight as a comprehensive partner for the cell therapy value chain from research through commercialization.
• Investor Materials: Updated investor presentation available on the IR website detailing the strategic rationale and financial profile of the combination.