Cytek Biosciences Q3 2026 Earnings Call Transcript

Cytek Biosciences (NASDAQ:CTKB) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Cytek Biosciences reported Q3 2026 revenue of $53.2 million, up 2% year over year, with strong growth in the U.S. market driven by high-end instrument sales.

The Aurora EVO and Borealis analyzers saw significant demand, with Aurora EVO placements nearly doubling year over year, contributing to an 11% growth in high-end instrument revenue.

The company launched Cytek Cloud Analysis, enhancing the cytometry workflow experience, and expanded its Early Access Program for the Borealis platform.

Gross margin improved to 59%, benefiting from lower manufacturing costs due to a shift from Seattle to Singapore and lower tariffs.

Cytek maintained the midpoint of its full-year revenue guidance at $208 to $211 million, expecting a strong fourth quarter driven by seasonal factors.

The company faced a mixed outcome in its patent litigation but expects no impact on product sales or operations.

Operating expenses increased by 8% due to higher legal costs, but Cytek anticipates a reduction in these expenses in Q4.

The company is delaying its new business unit structure to 2027, focusing in the near term on sustaining growth and building out clinical and solution-focused offerings.

Full Transcript

OPERATOR

After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Mark Meehan, Head of Investor Relations. Please go ahead.

Mark Meehan (Senior Director, Head of Investor Relations)

Thank you, operator. Joining me today from Cytek are Wenbin Jiang, CEO, and Bill McCombe, CFO. Earlier today, Cytek Biosciences released financial results for the third quarter ended September 30, 2026. If you haven’t received this news release or if you’d like to be added to the company’s distribution list, please send an email to investors@cytekbio.com. A copy of the news release is also available in the investor relations section of Cytek’s website at investors.cytekbio.com.

Please note that we will be referencing a slide presentation during the call today that has been posted to the investors section of our corporate website. As a reminder, on slide 2, we will make statements during this call that are forward-looking statements within the meaning of the federal securities laws, including statements regarding Cytek’s business plans, strategies, opportunities and financial projections. These statements are based on the company’s current expectations and inherently involve significant risks and uncertainties that could cause actual results or events to materially differ from those anticipated in these statements.

Additional information regarding these risks and uncertainties appears in our slide presentation in the section entitled Forward-Looking Statements, in the press release Cytek issued today, and in Cytek’s filings with the SEC. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Additional information regarding our use of non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, may be found in our slide presentation and in today’s press release. While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.

This call will also provide a brief update about our active patent litigation. For more complete information about this case, as well as countersuits that we have instituted, please refer to our previous press release as well as our SEC filings, including our Form 10-Q to be filed today. Except as required by law, Cytek disclaims any duty to update forward-looking statements, whether because of new information, future events or changes in its expectations.

This conference call contains time-sensitive information and is accurate only as of the live broadcast, November 4, 2026. With that, I will turn the call over to Wenbin.

Wenbin Jiang (Co-Founder, CEO and Chairman of the Board)

Thank you, Mark. Welcome everyone, and thank you for your interest in Cytek. On today’s call, I will start with a discussion on our performance in the third quarter and review some business highlights before turning the call over to Bill for a detailed look at our financial results and our full year outlook. Turning to slides 3 and 4, we delivered another solid result in the third quarter with revenue of $53.2 million, an increase of 2% year over year. Our third quarter was highlighted by growth in the U.S., driven by continued strong demand for our high-end full spectrum profiling instruments led by Aurora EVO, the double-digit growth in our service business, and by our robust gross margin performance. Growth in the third quarter was led by the U.S., where revenue grew 12% year over year to $30.4 million, continuing strong momentum from the first half driven by instrument sales to academic and government customers and the continued service growth.

In EMEA, third quarter revenue was $12.5 million, up 1% year over year, a positive sign after a challenging first half that reflected improving instrument sales to academic and government customers. Total APAC revenue, including China, was $8.3 million, up 5% sequentially versus Q2 while being down 25% compared to a strong Q3 last year. Turning to slide 5, the third quarter was highlighted by success at the high end, where our technology leadership continues to shine. Customers are choosing Aurora EVO as it lets them run large panels and get consistent, reproducible data at higher throughput. The automation configurations we introduced last quarter further increased the value to customers, with the API for automated plate handling systems fitting well into the high-volume workflows of biopharma and CRO customers.

Combined, Aurora and Aurora EVO placements grew 23% year over year, with EVO placements nearly doubling year over year, reflecting robust demand for our next-generation platform. As a result of strong placements, high-end full spectrum profiling instrument revenue grew 11%. Across the broader business, we added a total of 140 instruments in the quarter, bringing our total installed base to 4,073 units. Borealis, our newest platform which we introduced last quarter, is receiving strong interest from customers in both the academic and biopharma markets, and we doubled the size of our Early Access Program during Q3. As a reminder, Borealis is a 7-laser full spectrum profiling cytometer with 60-color performance already demonstrated and a clear path to go higher as new dyes and panels are developed.

It will also include integrated imaging capabilities when we get to full commercial launch. Paired with our new proprietary cFluor reagents, Borealis enables 60-color panels in a single tube while also supporting nanoparticle analysis and higher sampling rates. Early Access Program customers are excited about how these capabilities can enhance insight and accelerate discovery in their labs. We will continue to expand the Early Access Program in the fourth quarter, with a broader commercial launch planned for fiscal year 2027.

Turning to slide 6, during the third quarter, we launched a new Cytek Cloud Analysis tool, the industry’s first end-to-end platform that integrates the entire flow cytometry workflow, from panel design to data analysis, into one system. This will allow researchers to have a seamless experience from experiment planning through data analysis, reducing the need to move between systems or recreate workflows. Cloud Analysis is available in the U.S. through Cytek Cloud Premium, a new subscription tier that adds cloud-based data analysis and online data storage.

The launch is an important milestone towards our vision of Cytek Cloud as a comprehensive digital ecosystem that supports cytometry workflows from beginning to end. As of the end of the third quarter, the total Cytek Cloud user base is approaching 30,000, up more than 20% since the start of the year. Our recurring revenue base continued to grow in the third quarter. Combined service and reagent revenue was $19.1 million in Q3 2026 and represented 36% of Cytek’s last 12 months revenue, up from 33% for the 12 months ended September 30, 2025. We expect recurring revenue to represent an increasing percentage of total revenue over time.

During the quarter, we also had important developments in our patent litigation case. As we announced on August 21, a jury in the U.S. District Court for the District of Delaware found in our favor on three of the four asserted claims, both on non-infringement and invalidity for each of those three claims. On the fourth claim, the jury found no literal infringement but did find infringement under the doctrine of equivalents. We do not believe that the applicable legal criteria for infringement under the doctrine of equivalents have been met.

We filed post-trial motions asking the court to overturn the verdict on this and other grounds, and we intend to pursue all available legal remedies. The jury’s verdict does not require any changes to our product offering or operations, and our ability to sell and ship products is not affected. Notably, the patent at issue is a U.S. patent and only applies to sales of instruments made in or imported into the United States. Finally, I wanted to share an update on the new business unit structure we introduced earlier this year. After careful review, we have decided to postpone the implementation of these business units until the start of 2027. We judged the near-term risk of moving to our new organization structure mid-year to be too significant. We remain confident that the new structure is the best way to support our long-term growth, but we recognize the critical need to deliver throughout the remainder of 2026.

We are continuing to focus resources and build out our teams to grow our clinical and solution-focused instruments and reagents. Stepping back, we were pleased with the overall performance of our business. The third quarter was highlighted by continued success of our high-end Aurora EVO and Borealis analyzers, by the double-digit growth in our service business, and, as Bill will detail shortly, the strong execution from our operations team which resulted in our best third quarter gross margins since 2023. With top line performance in line with our prior expectations, we are reiterating the midpoint of our full year 2026 revenue guidance.

With that, I will now turn the call over to Bill for additional details on our Q3 financials and our full year outlook.

William McCombe (Chief Financial Officer)

Thanks, Wenbin. Turning to slide 7, third quarter revenue came in at $53.2 million, an increase of 2% compared to Q3 2025. A highlight for the quarter was the strong customer demand for our high-end analyzers, with revenue growth of over 30% for the Aurora, Aurora EVO, and Borealis category. This was the major factor driving U.S. total revenue growth of 12% and instrument growth of 9%. EMEA revenue returned to modest total revenue growth of 1% year on year and instrument growth of 3% after two quarters of declines.

APAC, including China, grew 5% sequentially compared to Q2 but was down 25% compared to a strong Q3 last year. We saw particular strength in revenue from academic and government customers, which was up 38% year over year to $24.5 million, with strength across all regions. In the U.S., the largest region for the academic and government end market, instrument revenue grew more than 60%. Biopharma, distributor, and CRO revenue declined approximately 17% year over year to $28.7 million against a strong Q3 last year. Product revenue, which is comprised of instruments and reagents, was $37.2 million, a decrease of 3% year over year, as strength in our high-end instruments was offset by declines in imaging and mid- to low-end instruments.

Service revenue grew 13% year over year driven by growth in our installed base and continued active utilization of our systems. Turning to slide 8 and to gross margin, as Wenbin mentioned, we had an outstanding result with GAAP gross profit of $31.2 million in Q3, representing a gross margin of 59% compared to 53% in Q3 2025, an increase of nearly 600 basis points, as we benefited from both higher product gross margin and higher service gross margin. Product gross margin increased 770 basis points to 61% compared to 53% in Q3 last year. The increase was primarily due to lower overhead costs resulting from the completion of the transfer of manufacturing capacity from Seattle to Singapore, and also lower material costs and lower tariffs.

Service gross margin was 53%, up from 51% in Q3 2025, reflecting service revenue growth of 13% which outpaced the 8% increase in service cost of sales. We are now realizing the full benefit of the transfer of manufacturing from our Seattle site to our Singapore facility earlier this year. This move is part of our region-for-region manufacturing strategy which gives us lower-cost manufacturing capacity, greater supply flexibility, and helps mitigate tariff-related cost pressures.

Total operating expenses were $39.6 million in Q3, up 8% versus Q3 2025. Research and development expenses were $9.4 million, up 4%, while sales and marketing expenses were $11.9 million, up 2%. General and administrative expenses were $18.4 million, up $2.2 million or 14% compared to Q3 2025. This was due to a $3 million increase in legal expenses associated with our patent litigation and specifically the trial which occurred in August. With the most extensive trial phase of this case behind us, we would expect our legal expenses to decline by $3 to $4 million in the fourth quarter compared to Q3.

The loss from operations was $8.4 million in the third quarter compared to a $9.2 million loss in the year-ago quarter. GAAP net loss was $6.1 million compared to a $5.5 million loss in the third quarter of 2025. The increase in GAAP net loss was due to a $1.5 million lower tax benefit, offset by a $0.8 million improvement in loss from operations. Adjusted EBITDA, which excludes stock-based compensation and foreign exchange gains and losses, was $0.7 million in Q3 2026 compared to $2.5 million in Q3 2025.

The decline was primarily due to lower investment income and higher operating expenses. We anticipate adjusted EBITDA to improve meaningfully in the fourth quarter as revenue increases with our normal seasonal pattern. Cash, cash equivalents, restricted cash, and marketable securities totaled $256 million as of September 30, 2026, compared to $262 million as of June 30, 2026. Our strong balance sheet continues to provide the financial flexibility to invest in our global growth priorities.

Turning to slide 9, we are maintaining the midpoint of our full-year 2026 revenue guidance while narrowing the range to $208 to $211 million. This assumes no change from current currency exchange rates. This reflects year-to-date results and the growth outlook across our markets. In the fourth quarter, we expect revenue to be meaningfully higher than in the third quarter, consistent with our normal seasonality, driven by typical customer year-end purchasing patterns and continued growth in our service business.

For the full year 2026, we continue to expect adjusted EBITDA to be around breakeven, reflecting an anticipated strong fourth quarter result driven by the seasonal increase in revenue as well as a meaningful decrease in litigation spending. With that, I will turn it back over to Wenbin.

Wenbin Jiang (Co-Founder, CEO and Chairman of the Board)

Thanks, Bill. I want to close by thanking the entire Cytek team for their continued dedication and execution on behalf of our stakeholders. Our third quarter was a solid one, and we expect a strong finish to the year. The results reflect the strength of our technology leadership in the flow cytometry industry. Looking ahead, we feel well positioned heading into next year. We continue to gain share as our new product portfolio strengthens our technology leadership position in biopharma and academic research markets. We also anticipate improving performance with clinical customers driven by our new organizational structure and the benefits of our Systematix collaboration in Europe. Finally, we expect to deliver improving profitability as we continue to drive leverage on increased volume and anticipate reduced G&A spend on lower litigation expenses.

Thanks to everyone for joining today’s call. We will now open it up for questions.

OPERATOR

At this time, I would like to remind everyone, in order to ask a question please press star one. Your first question comes from the line of Mason Caricot with Stephens. Please go ahead.

Harrison (Analyst)

Hey, this is Harrison on for Mason. Thanks for taking the questions. Could you just start by walking us through the guidance range for 2026? Should we expect service revenue to continue to grow around the low double-digit clip in the fourth quarter and product revenue to make up the balance there?

William McCombe (Chief Financial Officer)

Yeah, our service revenue has grown fairly consistently, so we expect that to continue and at similar levels, similar rates to recent quarters, and the product revenue would make up the balance. That’s right.

Harrison (Analyst)

Got it. And then, looking ahead here at 2027, I think you previously pointed to, you know, the second half ’26 growth rate as a fair jumping off point for next year. Does that framework still hold today and how are you thinking about growth next year across the different geographies?

Wenbin Jiang (Co-Founder, CEO and Chairman of the Board)

I don’t think we’ve commented specifically on giving guidance for growth in 2027, so I’m not going to comment on your framework there. What I will say is that we will continue to, and we’ll give more specific guidance when we announce Q4 revenue in late February, early March. But, you know, we would expect to outgrow the market in 2027. We are continuing to invest in our high-end product portfolio. We’re going to, as you know, bring to market the Borealis analyzer with full imaging capability—that’s slated for launch in 2027.

We are investing substantial resources in growing our low- to mid-range instruments and our reagent portfolio. So we’ll maintain leadership in the high end, and we’ll invest in growing our business, and we would expect improving profitability. And, you know, I can’t really give more specific guidance beyond that, but, you know, we would, based on those investments and based on our performance so far, we would expect to outgrow the market and outgrow our peers.

OPERATOR

Your next question comes from the line of Chad Wojcrowski with TD Cowen. Please go ahead.

Chad Wojcrowski (Analyst)

Hey guys, appreciate continued taking a market share next year. Plan to outgrow the market. Do you still feel like the markets may be flat, or do you think we’ve returned to growth here across end markets?

William McCombe (Chief Financial Officer)

I think the market growth has been better, you know, really going back to the fourth quarter of last year and the first three quarters of this year. We have certainly done better than the early part of 2025. The market has been better. Some of the headwinds that occurred back then have abated. So I think we, you know, we feel that the market environment is generally positive.

Chad Wojcrowski (Analyst)

Okay, thanks. And then I guess on the Cytek Cloud user base, the growth is pretty impressive. Just wondering if internally, do you guys view that as maybe more of a moat to your instruments as these tools are used more broadly across workflows, or is this something you think—I know you started to maybe monetize it a little bit previously—but do you feel like there’s a lot of juice to squeeze here and maybe that could be upside to service revenues?

Wenbin Jiang (Co-Founder, CEO and Chairman of the Board)

The intention of Cytek Cloud is not to really squeeze any profit out of the platform by itself. It is a tool to enable our users to leverage our full solutions, including our instruments, reagents, and panel design and data analysis altogether. So customers will stay with what we have.

Chad Wojcrowski (Analyst)

Okay, thanks for the questions, guys.

OPERATOR

Your final question comes from the line of David Westenberg with Piper Sandler. Please go ahead.

Sky (Analyst)

Hi, this is Sky on for Dave. Thanks for taking the question. Maybe first, can you just talk a bit more about biopharma? You’ve seen some growth in the past from large pharma and biotech customers. I know you called out the tough comp this quarter, but has the momentum slowed at all? And what does that mean for CROs and some of the smaller customers? And ultimately, how much of the demand now is reflecting ongoing fleet deployments versus individual instrument purchases?

William McCombe (Chief Financial Officer)

Well, I would point out that year to date biopharma is up 3%. And look, it’s generally been lumpy. We did have some strong quarters towards the back end of last year. The other factor that influences our numbers as reported is that a disproportionate, much higher share of overall sales in APAC and China go through distributors, which we report in the biopharma, CRO, and distributor category. So, as I think we noted, the markets in APAC and China in the third quarter were quite a bit weaker, primarily due to macroeconomic factors in those markets.

So that has sort of dampened the growth of what we report as the biopharma, CRO, distributor category. So I think it’s important to bear that in mind. But we think the biopharma sector, particularly in the U.S., that they have money available for a year-end budget flush. We think that the Aurora EVO, because of its high throughput and its automation capabilities, is an excellent product for that market. So we remain generally quite positive on that market segment.

Sky (Analyst)

Very helpful, thanks. Maybe just lastly, in September, I think for a few of the instruments you mentioned you were selling everything you could make and that orders were generally booked and shipped within the quarter. Where are you still supply constrained? Are there lead times or ordering patterns, or are there cancellations giving you better visibility in demand at this time? Thanks.

Wenbin Jiang (Co-Founder, CEO and Chairman of the Board)

You know, other than small amounts, we generally ship everything that we book within a quarter. You know, when we made those comments on the Q2 call, we were talking about Borealis and the Aurora EVO with the enhanced automation capability. We’re continuing to increase our production rate for those types of systems. So, you know, we expect them to be important contributors going forward, and, you know, products that are seeing very good demand from customers.

Supply constraints are not really a big issue for us.

OPERATOR

There are no further questions at this time.

Mark Meehan (Senior Director, Head of Investor Relations)

Okay, thanks. We will go ahead and end the call there. Thank you everyone for joining, and please reach out to us if you have any follow-up questions.

OPERATOR

Ladies and gentlemen, you may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.