MaxCyte, Inc. (NASDAQ:MXCT) Q2 2025 Earnings Call Transcript

MaxCyte, Inc. (NASDAQ:MXCT) Q2 2025 Earnings Call Transcript August 7, 2025

Operator: Good day, and thank you for standing by. Welcome to the MaxCyte Second Quarter Earnings Conference Call. [Operator Instructions] Today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, [ Eric Abdal ], Investor Relations. Please go ahead.

Unidentified Company Representative: Good afternoon, everyone. Thank you for participating in today’s conference call. Joining me on the call from MaxCyte, we have Maher Masoud, President and Chief Executive Officer; and Doug Swirsky, Chief Financial Officer. Earlier today, MaxCyte released financial results for the second quarter ended June 30th, 2025. A copy of the press release is available on the company’s website. Before we begin, I need to read the following statement. Statements or comments made during this call may be forward-looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements.

Actual results may differ materially from those expressed or implied in any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. Except as required by applicable law, the company has no obligation to publicly update any forward-looking statements, whether because of new information, future events or otherwise. And with that, I will turn the call over to Maher.

Maher Masoud: Thank you, Eric. Good afternoon, everyone, and thank you for joining MaxCyte’s Second Quarter 2025 Earnings Call. MaxCyte reported financial results that were in line with our expectations in the second quarter. To cover the highlights, we sustained growth in a difficult end market. We also recently signed 2 new strategic platform licenses with Anocca AB and Adicet Bio, bringing the total number of new SPLs this year to 3. We continue to focus on investing in the business with discipline, while positioning the company to achieve profitability with our existing capital. And lastly, we progressed well on the integration of SeQure Dx, which is a substantial long-term opportunity for MaxCyte. Despite what was a strong first half of the year, short-term external headwinds have begun to impact our expectations for growth in the second half.

First, in recent months, we faced a decrease in spending at a large SPL partner customer related to PA inventory management and reorganization of manufacturing operations impacting leases. Second, we have seen some customers rationalize programs and wind down operations internally, which has resulted in lower expectations for PA and licenses revenue. Last, we have seen continued capital equipment purchasing hesitancy from customers related to the uncertain funding and regulatory environment in cell therapy. Taking these factors into account, we are lowering our core revenue guidance range for 2025. To walk you through our updated guidance, we now expect core business revenue, which does not include SPL program-related revenue to be flat to down 10% in 2025, representing approximately $29.5 million to $32.5 million in 2025 revenue compared to $32.5 million in 2024.

This compares to our previous guidance range of 8% to 15% growth or approximately $35 million to $37 million. Both ranges include approximately $2 million in revenue from SeQure Dx, which we continue to expect. The change in the guidance midpoint is $5 million relative to our previous plan. The first factor in the guidance reduction is about $1.5 million in PAs relative to our prior plan. Half of this is a result of inventory management at the previously mentioned customer and the other half is related to softness across other preclinical and clinical customers due to program consolidation. Additionally, about $2 million of the guidance reduction is related to licenses relative to our prior plan. About 1/4 of licenses impact was from our largest customer reorganizing manufacturing operations and about 3/4 is related to other clinical customers consolidating programs or shutting down operations.

The remaining $1.5 million of the guidance cut is related to softness in instruments, as customers remain hesitant with capital equipment purchases. As we look forward, we have had detailed discussions with this customer and can confirm that this is not a movement away from our platform or changes in the outlook for their therapeutic. We are working with the customer to determine the timing of future purchases as they continue to optimize their manufacturing network. While we are disappointed in the change in expectations for this year, we remain confident in the value proposition that MaxCyte offers to the cell and gene therapy industry. And based on the current opportunities in the pipeline, we expect to return back to growth in 2026, with such growth, including continued growth in Asia Pacific, an increasing number of clinical programs utilizing our platform and the launch of a new platform later this year that we believe will add to our top line growth.

To cover our second quarter financial results and developments in more detail, we reported $8.5 million in total revenue, which included core revenue of $8.2 million and SPL program-related revenue of $0.3 million, which was in line with our expectations. Within the core business, instrument installed base grew to 814 as of June 30th, with instrument revenue of $2.1 million in the second quarter, which grew 22% year-over-year. While the capital equipment spending environment has not fully recovered, we are optimistic about the improved growth in instrument sales. License revenue was $2.6 million, which was flat year-over-year. PA or processing assembly revenue increased 5% year-over-year, stepping down slightly from recent quarters. License and PA revenue were impacted by some customers consolidating programs.

Turning to the SPL program-related line, revenue was $0.3 million in the quarter, representing revenue primarily from CASGEVY commercial royalties as we had not recognized any milestones during the quarter. During Vertex’s second quarter earnings call, they highlighted the positive momentum they have seen with CASGEVY worldwide with an acceleration in patient initiations, cell collections and number of patients completing their treatment journey. Vertex points to the progress they are making in 2025 as well as the growth CASGEVY positions them for in 2026, and they have met their goal of authorized treatment centers or ATCs with more than 75 ATCs activated globally. We are encouraged by their continued investment in their ATC network to be able to support the launch of this critical product.

There are now 115 patients who have completed cell collection, with 29 patients now having completed their patient journey, which includes 16 in the second quarter, equating to $30 million of revenue for the second quarter for Vertex. Additionally, 250 patients have now been referred by physicians to activate treatment centers to initiate treatment. As patients initiations and cell collections continues to ramp, Vertex expects commensurate increases in infusions, but noted that because the timing of infusions is predicated on patient scheduling choices, there may be revenue variability from quarter-to-quarter. We continue to believe that CASGEVY interest and demand remains very high around the globe, and we are very excited by the truly transformative nature of the treatment.

Over the last week, we were excited to sign 2 new SPL agreements with Adicet Bio and Anocca AB, bringing our total number of SPL agreements to 31. Adicet Bio, who is working to develop allogeneic gamma delta T cell therapies for cancer and autoimmune diseases will utilize our ExPERT platform to expand their manufacturing capabilities to include nonviral gene editing delivery. We are also excited to be supporting Anocca AB, a T cell immunotherapy company developing a deep pipeline of T cell receptor engineered therapies or TCRs. MaxCyte’s platform will provide both companies with technical, scientific and regulatory support as they advance their pipelines and missions forward. We view these new SPL signings and our continued ability to grow instrument placements in a difficult environment as a testament to the resilience of our platform as a critical manufacturing tool for advanced therapies.

To provide a better understanding of our SPL portfolio, we’ve added a new deck to our Investor Relations website, which we hope you will look through, highlighting the SPLs in our portfolio and their current clinical programs and progress. Our business model remains strong as we’re continuing to sign new SPLs that will provide value over the near, mid and long term, and our existing customer base continues to advance their respective research and clinical programs. As it stands today, 14 of our SPL clients have active programs in the clinic, while others are working on earlier programs. We are supporting a total of 18 active clinical programs, which is consistent with the beginning of the year. Given the dynamic environment this year, 4 clinical programs shut down, but 4 new programs entered the clinic, which is a testament to our strong business model.

We expect that at times, some of our SPL customers will rationalize programs, but our highly differentiated platform and unparalleled scientific support allows us to sign new SPLs, thereby continually increasing the number of clinical programs we support. Some of the 18 programs we support have also progressed further along in the clinic so far this year. To highlight the progress, 5 of the current 18 clinical programs are set to enter pivotal studies in the next 6 to 18 months. As I mentioned, while programs can fail or be slowed and deprioritized, that is the nature of the industry and built into our business model. We continue to sign new SPLs and have seen recent SPL signs result in new programs moving into clinical development. Since the IPO, the number of MaxCyte SPL agreements and active clinical programs supported has grown substantially, and we’ve continued to see diversification in our clinical revenue compared to just a few years ago, with trials across a vast number of our SPLs such as for blood cancer, solid tumor, genetic diseases, neurodegenerative diseases and autoimmune diseases.

Our differentiated platform, leading support, engineering know-how and FDA master file have positioned MaxCyte to continue to sign 3 to 5 SPLs a year for the foreseeable future. As we look beyond CASGEVY [ as the ] second wave of potential therapies coming to market, MaxCyte supports 5 clinical programs that are expected to enter pivotal studies in the next 6 to 18 months and could be approved and launched in 2027 and 2028. Such approvals all provide us participation in the economics in the form of royalties, annual license fees and significant expansion of processing assembly use. Our ability to disclose and discuss these programs is limited by confidential agreements with our customers. However, on Slide 8 of the new deck, we’ve detailed the 5 programs across 5 SPLs, CRISPR Therapeutics, Wugen, Imugene, Caribou and 1 undisclosed SPL that we believe to enter pivotal studies within this time frame.

We also support 13 programs currently in Phase I, which we believe have potential approvals beyond 2028 and another 19 programs currently in preclinical development with launch potential in 2032 and beyond. As you know, not every program will make it to FDA approval. However, we capture value from both successful programs and programs that do not achieve their endpoints. As we add SPLs and our existing SPLs bring more programs to the clinic, the opportunity set will continue to grow. Turning to our cell and gene therapy services, formerly under a subsidiary SeQure Dx, which we have now merged into MaxCyte. We are pleased with the performance of the business so far this year, remaining on track to meet our annual revenue expectation, and we are seeing good traction in booking projects.

Since the acquisition earlier this year, we have been successfully integrating these services into MaxCyte. The 3 assays available through SeQure Dx, screening, nomination and confirmation are available to both ex vivo and in vivo therapy developers at different stages in development, starting in the discovery stage through preclinical development and IND-enabling studies. SeQure Dx provides a robust and efficient on and off-target assessment and decreases time to clinic and improves likelihood of program success. In the evolving cell and gene therapy industry, safety has become increasingly important from a regulatory perspective and SeQure’s gene editing risk assessment services align with regulatory guidance from the FDA and other agencies.

We’ve seen positive momentum in the adoption of SeQure’s technology in clinical studies. For instance, ONE-seq, a technology invented by SeQure Dx and GUIDE-seq, a technology invented by Mass General Hospital and licensed exclusively to SeQure Dx were both used in the gene editing risk assessments performed by Children’s Hospital of Philadelphia and Penn and the first of-its-kind personalized gene editing therapy approved by regulators and administered to the infant [ KJ ] for a rare genetic disease, which has received national coverage. We believe that the opportunity for SeQure Dx is very large and not just in rare disease. SeQure Dx offers both off-target and off- target analysis to support gene knockouts and gene insertions in advanced therapies.

The assays support early development to IND filings for both in vivo and ex vivo therapies, and we expect SeQure’s addressable market to be the entire field of modified cell and gene therapies. We are very optimistic about the commercial uptake for SeQure Dx and believe that it has significant growth potential over the coming years. The sales pipeline so far this year is more than twice as much as it was heading into 2025. Despite what remains a challenging backdrop in cell and gene therapy, we see vast potential for these therapies to provide life- changing treatments to patients challenged with disease, a belief that is shared across the industry landscape of regulators, academics and drug developers. We were encouraged by the cell and gene therapy roundtable hosted by the FDA in June and subsequent commentary from leaders at the Department of Health and Human Services.

In our view, the message was clear. It has become apparent that cell and gene therapy is a priority at the agency. They support increasing the focus on curative therapies, while moving away from managing costly chronic diseases. They have committed to cell and gene therapy research and desire for payment reform and regulatory flexibility, and they have emphasized the need to accelerate cell and gene therapy development time lines. Over the long term, we share in the belief that cell and gene therapies have the potential to cure disease and reduce associated cost and patient burden. MaxCyte remains extremely well positioned to benefit for the growth of this industry over time. Given the long-term belief we have in the industry, we continue to make disciplined investments to position the company for the future.

Our organic investments continue to be in new products and product enhancements, while our inorganic investment focus has been on solving critical pain points in the industry as seen with SeQure Dx. We are able to invest in our business given the strength of the balance sheet as well as our focus on driving growth with efficient and lean operations. Our management team is committed to carefully managing MaxCyte’s financial health and continually evaluating ways to run our business more efficiently without sacrificing growth investments. With our existing balance sheet, MaxCyte expects to achieve profitability without additional capital needs. To wrap up, I will highlight that we officially delisted from the AIM markets on June 26, following our Annual Meeting of Stockholders and are now solely listed on NASDAQ.

We believe this was in the best interest of MaxCyte and our stakeholders. We are thankful to our U.K. shareholders for their continued support. In summary, while I’m disappointed with the operational headwinds at our customers that have resulted in a reduced financial outlook for 2025, we are working diligently to build a growing and profitable business and position MaxCyte for the future. My focus of growing MaxCyte with multiple product offerings, while improving operational efficiencies to reduce our annual burn to put us on track towards profitability remains solidly on track. We remain very optimistic and confident about MaxCyte’s position in cell and gene therapy. And over time, we believe MaxCyte’s platforms and SPL business model will benefit from the growth of the industry.

With that, I will now turn the call over to Doug to discuss our financial results. Doug?

Douglas J. Swirsky: Thank you, Maher. Total revenue in the second quarter of 2025 was $8.5 million compared to $10.4 million in the second quarter of 2024, representing an 18% decline. Our milestone revenue remains lumpy from quarter-to-quarter, which can impact year-over-year comparisons in total reported revenue. We reported core revenue of $8.2 million compared to $7.6 million in the comparable prior year quarter, which represents growth of 8% year-over-year. Within core revenue, instrument revenue was $2.1 million compared to $1.8 million in the second quarter of 2024; license revenue was $2.6 million compared to $2.6 million in the second quarter of 2024; and processing assembly or PA revenue was $3.1 million compared to $3 million in the second quarter of 2024.

PA revenue in the second quarter benefited from ordering patterns impacted by the uncertain tariff environment Assay service revenue, which includes SeQure Dx, was $0.1 million in the second quarter. Other revenue was $0.3 million compared to $0.2 million in the second quarter of 2024. Total SeQure Dx revenue was roughly $300,000 as a portion of the revenue was in the licenses line during the quarter. As discussed earlier, both license revenue and PA revenue were negatively impacted in the second quarter of 2025 by customers consolidating programs. We were encouraged by the trend in instrument revenue, which returned to growth year-over-year. 42% of our core revenue was derived from SPL customers in the second quarter of 2025, which compares to 51% in the comparable prior year quarter.

We recognized $0.3 million of SPL program-related revenue in the second quarter of 2025 compared to $2.9 million in the second quarter of 2024. As Maher mentioned, SPL program-related revenue was almost entirely from CASGEVY commercial royalties as we did not recognize any milestones during the quarter. Moving down the P&L. Gross margin was 82% in the second quarter of 2025 compared to 86% in the second quarter of the prior year. Including inventory provisions and SPL program-related revenue, non-GAAP adjusted gross margin was 83% in the second quarter of 2025 compared to non-GAAP adjusted gross margin of 82% in the second quarter of 2024. Total operating expenses for the second quarter of 2025 were $21.2 million compared to $20.9 million in the second quarter of 2024.

Operating efficiency continues to be a focus for us, and I want to highlight that operating expenses decreased for the first 6 months of 2025 compared to the first half of last year. Although this decrease was modest, we were able to achieve this despite absorbing the cost structure of SeQure Dx, as well as expenses related to the acquisition of the business. Expenses also included investments in new product initiatives that we believe will begin paying dividends later this year and help drive revenue growth in 2026. We finished the second quarter with combined total cash, equivalents and investments of $165.2 million and no debt. The decrease from the beginning of the year includes approximately $7 million of purchase transaction and onetime costs associated with the acquisition of SeQure Dx. Continuing to our 2025 guidance.

As Maher discussed in detail, we are updating our outlook and now expect core revenue of flat to a 10% decline compared to 2024, inclusive of revenue from SeQure Dx. We continue to expect at least $2 million in full year revenue from SeQure Dx. We anticipate SeQure Dx revenue will be weighted towards the second half of 2025, and we are comfortable with the revenue outlook for this business, which is supported by executed customer contracts. Additionally, we are reiterating SPL program-related revenue guidance, which is expected to be approximately $5 million in 2025 and which includes both expected revenue from pre-commercial and commercial milestones and sales-based royalties. We would like to note that our SPL program-related revenue outlook is a risk-adjusted forecast that is achievable under a variety of potential outcomes across our SPLs and the planned clinical progress and commercial success of our customers.

Lastly, we now expect to end 2025 with approximately $155 million in cash equivalents and investments on our balance sheet. This updated guidance is a result of our lower revenue expectations. MaxCyte continues to be in a healthy financial position, and we remain committed to being disciplined in our spend and investments to drive long-term growth for MaxCyte and its shareholders. Now I’ll turn the call back over to Maher.

Maher Masoud: Thank you, Doug. We firmly believe in MaxCyte’s value proposition within the cell and gene therapy industry and look forward to continuing to support our customers as their programs progress. With that, I will turn the call back over to the operator for the Q&A. Operator?

Q&A Session

Operator: [Operator Instructions] And our first question comes from the line of Matt Larew of William Blair.

Matthew Richard Larew: Maybe starting with the reorg of manufacturing operations for your largest customer. It sounds like that took you a little bit off guard. I think it would be helpful to know just exactly what your conversations with that customer have involved, how long, I guess, you expect this transition to occur? And how much certainty versus kind of opacity there is in terms of [ what the future ] is there?

Maher Masoud: Matt, thanks for the question. Let me take that. And Doug, feel free to add on. So without giving too much details to that customer, it is our largest customer. We do have certainty as to where they are looking forward from here. This was just a short-term consolidation of manufacturing. It will have no impact to our future licensing revenue from that customer. This is a short-term pocket that we saw with them that we — and we have visibility and we’re always in constant dialogue with this customer. So we know what to expect going into the second half as well as into next year from this customer. We don’t see and we have no reason to believe that there will be any more major changes to the manufacturing operations at this point. Yes. Let me add — we feel very confident there won’t be any more major changes for manufacturing from this customer.

Matthew Richard Larew: Okay. [indiscernible] of being perhaps less instruments needed to less license revenue and less PA ordering because they’re going to work through inventory?

Maher Masoud: Precisely on the short term. That’s exactly right, Matt.

Matthew Richard Larew: Okay. Okay. Great. And then just kind of ending with Doug’s comments around OpEx down modestly quarter-over-quarter and flattish year-over-year. If you just kind of think back the last several years here, core revenue is roughly flattish over the last several years, but obviously, there’s been a big pickup in spend. And just wondering relative to where the cash balance is today, and also again, thinking about investing for the future, just given the challenges you’re facing, there might be an opportunity to find additional efficiencies within the organization.

Maher Masoud: Yes. Great question, Matt. I mean, as I mentioned, obviously, within our current capital stock, we’re going to be — our goal is to be profitable within the foreseeable future. And I still feel confident we’re on track towards that. There’s always efficiencies we’re going to look towards across the organization and really how we go about with our growth projections. If you look at what Doug said, we’re kind of proud of this. We actually absorbed the expenses of SeQure Dx, and we’re still slightly modestly less in terms of the OpEx than we were last year before we acquired SeQure Dx. So you can tell that the eye of diligence that we have towards how we’re operating the company, we will continue to have the same eye of diligence and ensuring that we’re always looking at ways to get us to that path to profitability and at the same time, have growth over the years. Doug, do you want to add anything to that?

Douglas J. Swirsky: I think that’s good.

Operator: [Operator Instructions] And our next question comes from the line of Dan Arias of Stifel.

Rohan Walcott: This is Rohan on for Dan. Considering the updated guidance and your statements made today on the current business environment, customer sentiment, how should we contemplate quarterly cadence from 3Q to 4Q, as we head into the back half of 2025? Anything additional that you could call out?

Maher Masoud: Sure. In terms of the variability between Q3 and Q4, we do expect to be slightly weighted towards Q4, but not materially. So a slight weight to Q4 in terms of the midpoint of the revised range. I think when we start looking at sort of up cases or down cases from that midpoint, I think it’s going to be Q4 dependent.

Rohan Walcott: And one more follow-up. On instruments, that seems to be a bright spot in the business, up 22% year-over-year. Can you shed some light on like what you guys are hearing from your cell and gene therapy customers and how those conversations are going? And also, what you’re expecting performance-wise for the rest of the year from instrumentation sales?

Maher Masoud: Sure. Let me take that, and then Doug, feel free to add as well. As we mentioned in previous calls, obviously, we’ve seen some CapEx constraints from customers. However, we are seeing the market more. We’re seeing more of our lower-priced systems that we’re able to sell into our customer base. And as we speak with customers as well, we’re starting to see those short-term headwinds dissipate. Obviously, we had early in the year some concerns from customers on the NIH funding or I should say, [ fee ] funding, but we’re starting to see that kind of baseline from here. And what we saw on the instrument side for the first half, obviously, is a testament to our execution as well in this tough environment. But it’s part of our strategy of ensuring that we can get in earlier with customers that allow us to sell a few more of our lower-priced systems than our high-end systems. I mean, Doug, anything else to add?

Douglas J. Swirsky: Yes, we’re really focused on making sure we’ve got a global platform here and revenue outside ex U.S. has been an increasing part of things as there’s definitely some variability in terms of where folks are in the cycle, if you will. And so, I think ex U.S., particularly Asia Pacific has been strong for us.

Operator: [Operator Instructions] Our next question comes from the line of Brendan Smith of TD Cowen.

Brendan Mychal Smith: Maybe kind of just a follow-up to a couple of things that have been discussed already here. But I guess just within your SPLs and the partnerships there, I guess, and maybe more specifically the assets that are still advancing through the clinic, can you maybe give us a little bit of a sense like are some of those programs skewed towards some more traditional use cases for cell therapies like maybe CAR-T? Or I guess, I’m really just wondering like where you’re seeing some of your partners kind of drawing the line within their own pipelines as they’re thinking about prioritizing their respective programs?

Maher Masoud: Yes. Great question. Actually, if you look at the ones on the corporate deck that we updated there, Brendan, and I hope everyone looks at this. If you look at, we’re seeing a lot more customers now go allogeneic as well. So off the shelf is what we’re seeing. If you look at the ones that we can’t publicly disclose, that’s CRISPR/CTX112 that we hope to get data on later on in the second half of the year. You have Wugen with CART7; Imugene with azer-cel, Caribou, CD10. These are all allogeneic B-cell, human hematologic malignancies. We have one undisclosed program that we can’t speak to whether it’s autologous or allogeneic, but we are seeing more towards that shift of allogeneic therapies, which bodes very well, Brendan, for our system.

If you look at the scale we provide, we are highly differentiated from any system out there, that’s really the beauty of our model. You can work with us early in research. And as you can scale up into those larger platforms, where we’re using a system that can transfect up to 20 billion cells, you’re using a MaxCyte system with the support that we provide as well.

Operator: [Operator Instructions] And our next question comes from the line of Hannah Hefley of Stephens.

Hannah Webb Hefley: It sounds like PA revenue benefited from maybe a pull forward ahead of tariffs during the quarter. Could you frame up how large this benefit was? And does that mean you’re expecting PA revenue to step down further next quarter?

Douglas J. Swirsky: So yes, it was a single order from a distributor, and we don’t actually think that, that’s had a tremendous influence. We get — you think of it as a pull-through, but we’re seeing good order flow from those customers. And I don’t think that it’s something that’s already built into the guide, and we’re not tipping our hat to any particular breakdown of the core revenue that’s been guided to with respect to either to what the breakdown is between instruments and PAs. But I don’t think that’s going to have a material impact. Where it did impact, if you do — if you look at the slide of historical core business disclosures in the deck that we just posted the update of core revenue generated by SPL clients dipped and really, that’s 2 things.

One is this reasonable order that was sort of tariff motivated to get ahead of those. And then another was just a decline in expectations from a large customer. And I think if you take those out, that 42% starts to creep back up into sort of the low 50s and consistent with where we expect to be in the business.

Hannah Webb Hefley: Great. And then — it seems like SPL customers were a little bit more insulated from some of these macro headwinds, at least like what we talked about last quarter. And now that seems to have changed a little bit. Is this more like focused on a few customers? Or are you seeing any impact to the SPL pipeline given these headwinds?

Maher Masoud: Great question, Hannah. No, we’re not seeing impacts to the pipeline. In fact, as you can tell, obviously, we signed 3 so far this year. I feel confident we can continue to sign 3 to 5 each year for the foreseeable future. If anything, some of those impacts were really short term. We saw one customer just go completely in vivo. We saw one customer shift focus from cell therapy to another modality. But overall, we have a very keen eye as to all of our SPL customers. On occasion, we’re going to have 1 or 2 customers here and there shift focus, but that’s built into our model. That’s why we signed 3 to 5 per year. It builds for us. I mean there’s a reason why 4 programs went off, but yet we added 4 more. So we still have 18 clinical programs using our system in the clinic.

We have 5 going into pivotal in the next 6 to 18 months that all bode well for us in 2027, ’28 with potential approvals. So really, I see this as — these are just short term, the nature and it’s built into our business model. That’s why we signed 3 to 5. We’re going to have some drop off. but we’re going to have more come in and then drop off, and that’s what we built it into it.

Douglas J. Swirsky: The revised guide contemplates some decrease in license revenue associated with a couple of decisions. But the goal here, and I think it’s proved out is that we’re going to have more SPL customers coming into the fold, while you will see a smaller number of customers that are rationalizing their programs or in some cases, trying to out-license those programs and some of those have come back as a result.

Maher Masoud: That’s right. And let me add a little bit more on this one. So we signed 6 SPLs last year. We signed 3 so far this year. Many of those will have programs going to the clinic. A lot of these customers that we signed were preclinical. We anticipate many of them going to the clinic in the near future.

Operator: I’m showing no further questions at this time. I’ll now turn it back to Maher for closing remarks.

Maher Masoud: Yes. Thank you, operator. Thank you, everyone, for joining us today, and I look forward and we all look forward to speaking to you again on our next earnings call in a few months.

Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.