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QI

Quantum-Si Inc (QSI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $0.55M with gross margin 35%; management delivered a key R&D milestone by running successful sequencing on multiple prototype Proteus systems, keeping the platform on track for 2H 2026 launch .
  • Operating results were pressured by NIH-related capital spending headwinds; management leaned into instrument placements, adding 12 new customer implementations, with a little over half in academic labs, to drive consumable usage and publications .
  • GAAP opex rose on one-time items (lease termination and legal settlements), but adjusted opex fell year over year to $21.4M; cash and investments were $230.5M, with runway anticipated into Q2 2028 .
  • Guidance updated: 2025 adjusted opex ≤$96M; total cash use raised to ≤$103M due to the $10.2M lease termination cash outlay, partially offsetting future opex (> $24M saved); an S-3 shelf ($300M) and $100M ATM provide financing flexibility .
  • Near-term catalysts: Investor & Analyst Day (Nov 19) showcasing early Proteus sequencing data, recognizer/AI roadmap, and 2026 launch milestones—key narrative drivers for the stock .

What Went Well and What Went Wrong

What Went Well

  • Successful sequencing runs on multiple Proteus prototypes, de-risking core architecture and chemistry reuse: “We have multiple prototype systems performing sequencing and are excited about the quality of the data we are seeing” .
  • Commercial strategy pivot gained traction: “Since launching this initiative, we have had 12 new customers implement our platform… more than half… in academic labs” .
  • V4 Sequencing Kit launched, expanding proteome coverage and enabling proline-rich domain sequencing and 24-plex barcoding; first shipments completed during Q3 .

What Went Wrong

  • Top line impacted by capital sales headwinds tied to NIH funding, reducing instrument revenues; revenue fell quarter-over-quarter and year-over-year .
  • Gross margin compressed to 35% from 59% in Q2, reflecting mix effects and inventory accounting adjustments; management flagged continuing variability near term .
  • GAAP opex spiked on one-time charges: lease termination accounting adjustment (~$13.6M) and legal settlements ($15.4M total in Q3), increasing GAAP net loss despite adjusted opex improvements .

Financial Results

Quarterly progression (prior quarter and sequential trend)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$0.842 $0.591 $0.552
Net Loss per Share (EPS)$(0.11) $(0.16) $(0.17)
Gross Profit ($USD Millions)$0.486 $0.351 $0.194
Gross Margin (%)58% 59% 35%
Adjusted Operating Expenses ($USD Millions)$22.9 $23.8 $21.4
Adjusted EBITDA ($USD Millions)$(21.5) $(22.2) $(20.1)
Dividend & Interest Income ($USD Millions)$2.547 $2.312 $2.580
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$232.6 $214.2 $230.5

Year-over-year (YoY) comparison

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$0.787 $0.552
Gross Profit ($USD Millions)$0.367 $0.194
Net Loss per Share (EPS)$(0.18) $(0.17)

Revenue composition (product vs service)

MetricQ1 2025Q2 2025Q3 2025
Product Revenue ($USD Millions)$0.808 $0.558 $0.505
Service Revenue ($USD Millions)$0.034 $0.033 $0.047

Notes:

  • Management emphasized quarter-to-quarter gross margin variability driven by mix of instruments vs consumables and certain inventory accounting adjustments .
  • Q2 gross margin included ~13% benefit from inventory carried at low or no value; Q1 included ~7%; these benefits did not recur in Q3 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Operating Expenses ($USD Millions)FY 2025n/a≤ $96 Set/maintained
Total Cash Use ($USD Millions)FY 2025$95 ≤ $103 (incl. $10.2M lease termination) Raised

Management rationale:

  • Lease termination payment increases 2025 cash use but reduces future operating expense by >$24M, not expected to impact long-term cash runway; cash runway anticipated into Q2 2028 .
  • Filed $300M shelf and $100M ATM to support strategic initiatives, enhancing capital flexibility .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Proteus platform progressOn track for prototype sequencing by YE 2025; maintained confidence in roadmap Successful sequencing runs on multiple prototype systems; early data to be shared Nov 19; targeting 2H 2026 launch Improving (de-risked milestone)
Chemistry & kitsv4 Sequencing Kit on track; v3 Library Prep Kit expected Q4 2025; focus on recognizers v4 launched (adds proline-adjacent cuts, glycine recognition, 24 barcodes); v3 entered internal validation—≥100x lower input; launch by YE Improving (commercial launch achieved)
AI initiativesExpanding recognizer program; R&D emphasis Leveraging proprietary recognizer dataset with advanced AI to accelerate proteome coverage Advancing
Commercial strategyAcademic NIH headwinds slow capital sales; expanded instrument acquisition options introduced; first placements purchasing consumables 12 new customer implementations via placements; >50% academic; consumable budgets intact; pharma/biotech cycles extend 9–12 months Mixed (placements offset capital headwinds)
Macro (NIH funding; seasonality)NIH uncertainty persisted; tariffs monitored, not material near-term Q4 typically up seasonally, but expect only modest improvement; NIH budget progress stalled by shutdown; outlook flat to marginally down vs prior year proposals Cautious
Legal/lease actionsLegal settlement expense in Q2 (~$3.36M) Two legacy litigation settlements ($15.4M total) and lease termination (~$13.6M accounting; $10.2M cash) to reduce future opex One-time charges; future savings
Capital & runwayCash $214.2M at Q2; post-July raise extends runway to Q2 2028 Cash & securities $230.5M at Q3; runway still into Q2 2028; shelf/ATM in place Stable/strengthened liquidity

Management Commentary

  • “We have multiple prototype systems performing sequencing and are excited about the quality of the data we are seeing… We look forward to sharing more of the early sequencing data… at our Investor and Analyst Day on November 19th” — Jeff Hawkins .
  • “Since launching this initiative, we have had 12 new customers implement our platform… more than half… in academic labs” — Jeff Hawkins on placement strategy .
  • “Our gross margin percentage will be somewhat variable… impacted by timing and mix of instruments versus consumable sales… and acquisition costs and accounting adjustments to inventory” — Jeff Keyes .
  • “We expect Adjusted Operating Expenses will be $96 million or less, and total cash use will be $103 million or less… inclusive of the $10.2 million payment under the lease termination” — Jeff Keyes .
  • “By terminating this lease now, we saved over $24 million of future operating expense” — Jeff Keyes .

Q&A Highlights

  • Investor Day content: First look at early Proteus sequencing data, recognizer program status, proteome coverage at launch, roadmap to all 20 amino acids, and 2026 commercial milestones (early access sites, list pricing) .
  • DARPA PROs program: Company engaged in forums but its lab-scale approach differs from DARPA’s microsystem tilt; DoD labs already use QSI instruments with possible data releases ahead .
  • Placements mix: >50% in academic; remainder in pharma/biotech and agriculture testing; pharma/biotech cycles ~9–12 months; consumable budgets intact even where capital is constrained .
  • Seasonality and Q4 view: Historically up in Q4, but 2025 likely modest improvement only given macro and NIH uncertainties .
  • NIH funding: Congressional proposals looked flat to marginally down YoY vs prior year; shutdown delays resolutions; grant payment patterns and recisions remain an uncertainty post-budget .
  • Proteus hurdles to launch: Scale prototypes to integrated systems, harden and ramp manufacturing, optimize chemistries, integrate hardware/consumables with library prep—parallel streams converging by launch .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2025 EPS and revenue was unavailable for QSI at the time of this analysis; attempts to retrieve “Primary EPS Consensus Mean”, “Revenue Consensus Mean”, and counts returned no data.*
  • Given the significant gross margin compression in Q3 (35%) vs H1 (58–59%) and ongoing NIH-driven capital headwinds, sell-side models may need to reflect greater near-term margin volatility and slower instrument sales, while placements support consumables revenue. The company did not provide revenue guidance; opex guidance implies continued cost discipline despite one-time charges .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Proteus milestone materially de-risks the 2026 launch path; Investor Day (Nov 19) should clarify proteome coverage, pricing, early access, and 2026 milestone cadence—key stock narrative events .
  • Placement strategy is working (12 new implementations, >50% academic), expanding install base and consumables, and accelerating publications—critical for validation and adoption during capital spending headwinds .
  • Expect near-term gross margin variability from mix and inventory accounting adjustments; Q3’s 35% margin vs H1’s ~58–59% underscores the importance of consumables mix and normalization of one-time inventory benefits .
  • Balance sheet remains robust ($230.5M cash & securities; runway into Q2 2028); shelf/ATM provide optionality to fund strategic initiatives or opportunistic moves .
  • 2025 cash use guidance raised to ≤$103M due to lease termination, but future opex savings (> $24M) improve long-term efficiency; adjusted opex guided ≤$96M reflects continued cost controls .
  • Macro headwinds (NIH budget/shutdown) likely limit seasonal uplift in Q4; watch for modest improvement and continued consumables demand across installed base .
  • R&D pipeline beyond Proteus (v4 kit commercial, v3 lower-input library prep) expands addressable applications (e.g., antibodies, membrane proteins), supporting consumables growth and differentiation vs mass spectrometry incumbents .