Quanterix Corporation Common Stock 2026 Q2 Earnings Call

Good morning. With me on today's call are Everett Cunningham, Quanterix's President and CEO, and Jason Faessler, Quanterix's new 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 today's presentation, we will make forward-looking statements covered under the U.S. Private Securities Litigation Reform Act. These forward-looking statements are based on management's beliefs and assumptions as of today, August 10th, 2026. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statement. 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 statements 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 period-to-period comparison and analysis of our trends in our business and our competitors. We believe that such measures are important in comparing current results with other period's 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 to our website and in the earnings release issued today. Finally, any percentage changes that we discuss will be on a year-over-year basis unless otherwise noted. Now I'd like to turn the call over to Everett Cunningham.

Everett? Thanks, Mary. I'm pleased to be with all of you here this morning to bring you up to date on both our second quarter results and our plans for the back half of this year.

We are revising our expectations, and we want to be transparent about our actions and intended impacts. Our first half results were not what we anticipated based upon market softness and executional challenges, even though our cash preservation efforts were better than planned. As a result, we are taking speedy action to address execution, as I'll describe momentarily, but this performance will affect our annual outlook. Let me start by addressing the specifics around what contributed to Q2's results, then share more details on our plans to pivot our organization to improve performance in the second half and into 2027.

The revenue shortfall in Q2 was broad-based and roughly $3 million or 9% lower than the guidance we provided on our call in May. The commercial execution initiatives we began earlier this year have not yet delivered the sustained revenue performance or sales productivity we believe this organization can achieve. As a result, more decisive action is required. We enter this next phase with significant strengths. One of the largest install bases in our sector, market leadership in ultrasensitive reproducible protein detection, differentiated proteomic sensitivity across both tissue and blood, and a deeply committed team of employees. To fully translate these advantages into durable growth, we need experienced commercial leadership with the acumen, discipline, and expertise to strengthen our customer engagement and drive consistent execution. We are making a series of significant changes in our commercial organization, starting with adding new proven leadership.

As we announced today, Jim Gute is joining our team to help drive improved execution in our commercial organization. Jim was most recently Senior Vice President and Commercial Manager, General Screening at Exact Sciences. Prior to joining Exact, a $3 billion revenue company acquired earlier this year by Abbott Labs, Jim spent 18 years at GE, where he became President of GE HealthCare in 2021. Jim brings more than 25 years of experience leading enterprise organizations, accelerating growth, and transforming complex healthcare and diagnostic businesses. He's developed high-performing commercial organizations that combines strategic vision, operational discipline, and leadership excellence to create sustained enterprise value. We are so excited to welcome Jim to our team and work together to achieve our goal of re-accelerating revenue growth. We are reorganizing our commercial team around solution-based selling models.

Given the highly specialized nature of our instruments, assays, and diagnostic offerings, we believe greater product expertise and more focused customer engagement are essential to improving commercial execution and reigniting sales productivity. As announced in early June, we welcomed a seasoned leader with over two decades of diagnostics experience, Geoff Albrecht, as Senior Vice President and General Manager of Diagnostics. As we transform this business into a critical component of our future growth, Geoff's more than 25 years of deep commercial leadership experience is already making an impact. Most recently, he served as Regional Vice President for the Northeast U.S. at Quest Diagnostics, leading a group generating approximately $2.9 billion in revenue. Our accelerator business was down significantly in the quarter, mirroring trends towards smaller projects that we saw in Q1.

We are creating a dedicated sales team focused on driving pharma lab services to deliver improved results in the second half. In Q2, this business produced nice bookings, and shortly, I'll share some exciting progress we're seeing in Q3. We believe these actions and this momentum will produce growth starting this year and more meaningfully in 2027 and beyond. Based upon our first half performance and recognizing that the significant changes that we are announcing today will not produce results immediately, we are lowering our revenue guidance for 2026 to a range of $142 million-$148 million from the prior range of $169 million-$174 million. Our team has thoroughly assessed the commercial pipeline and underlying end market assumptions, giving us the confidence that this new forecast is appropriate. At this revenue level, we expect to end 2026 with a roughly $80 million cash balance.

This would also push our cash flow breakeven to 2027. While we plan to invest in our business to leverage growth opportunities, our ability to conserve cash, demonstrated by the higher-than-expected cash position at the end of Q2 2026, will enable us to be disciplined in balancing cash and investment needs. To that end, we completed the Akoya integration in Q2, finalizing the ERP and cost synergies, and achieved the planned $85 million in annualized savings. In summary, we expect these actions to support stronger performance in the second half and position the company for higher growth in 2027 and beyond. Our updated guidance reflects a level of performance that we are confident we can deliver without assuming a substantial recovery in our end markets. This confidence is supported by our industry-leading solutions and services, our growing customer base, and the continued momentum in our higher growth diagnostics business.

Let me turn to the factors underpinning our confidence in the strategy and our ability to execute successfully. We see early, important signs of momentum throughout the business that we intend to galvanize and accelerate to improve our results going forward. We are cautiously optimistic about the green shoots in Q2, such as a sequential increase in bookings, leading to a book-to-bill of 1 to 1, driven by orders in spatial instruments and consumables, and some more accelerator business. Pharma revenue also increased sequentially in Q2, led by spatial, even though this market has been reported to be struggling recently. The number of LucentAD Complete tests increased significantly in Q2, albeit off a small base, as we strive to transform our diagnostic business into a more sizable component of Quanterix's growth trajectory.

We were very pleased that beginning July 1, 2026, members covered under Anthem Blue Cross and Blue Shield medical policies can receive coverage for qualifying blood-based biomarker testing, including Quanterix's LucentAD Complete test, when medical necessity criteria are met. This is happening in advance of our broad-based market access strategy. We have also expanded our assay development with the launch of an important emerging synaptic biomarker, and in spatial, we launched two new products. We intend to keep up the pace of new offerings. We're excited about Quanterix's prestigious selection as a co-investigator institution in the PD-BUILD program, supported by The Michael J. Fox Foundation. This grant-supported mandate will advance Parkinson's disease research by developing and deploying biomarker tools aimed at enabling earlier detection, improved patient stratification, and more effective monitoring of Parkinson's disease. Importantly, it will also validate our technology in an important new neurological area.

We're also seeing momentum across customers and regions within diagnostics. We've dramatically increased the opportunities for which we are competing and winning our fair share of these will further increase our credibility. We're excited about these opportunities, which involve accelerator revenues as well. Our partnership with Tempus, announced last quarter, is getting underway quickly, and we're working together on several potential opportunities. These, in addition to the clinical utility studies that we expect to read out shortly, should amplify our credibility in the market. Recent studies, including the ones that we shared at AAIC in London, underscore our opportunity to strengthen our commercial mode by demonstrating our premier positioning of an ultrasensitive multi-analyte algorithm for targeted translational work as well as diagnostics. I'll speak more about this when I discuss our diagnostics progress.

Let me turn to slide four and provide some perspective on where we compete in proteomics today and how our core capabilities extend across the continuum from discovery and translational research to diagnostics. Quanterix is recognized as a market leader in ultrasensitive protein detection with differentiated and highly reproducible proteomic sensitivity in fluids and more recently, tissue. However, we believe the near-term diagnostic potential of technologies is not fully recognized, particularly as early disease detection becomes more important across healthcare. As you can see on this slide, Quanterix is a market leader both in blood and tissue proteomics, as the only provider with differentiated leadership in ultrasensitive blood biomarkers and high-plex spatial tissue analysis across the continuum. We start with Quanterix Simoa, the industry standard for low-plex, ultrasensitive early detection utilizing blood samples for translational work and diagnostics, bringing the key benefit of reproducibility.