MaxCyte Q3 2026 Earnings Call Transcript

MaxCyte (NASDAQ:MXCT) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

MaxCyte announced a definitive agreement to acquire Akron Bio, which will triple its exposure to commercial and registrational programs and expand its pipeline to over 95 clinical-stage programs.

The company reported a 49% year-over-year growth in Q3 2026 revenue, reaching $10.2 million, with core revenue showing a 27% increase.

MaxCyte updated its 2026 revenue guidance to at least $34.5 million, marking a $3.5 million increase from prior guidance due to stronger-than-expected performance.

The Akron acquisition is expected to nearly double MaxCyte’s revenue base and contribute to positive cash flow, with Akron’s 2026 revenue projected at $28 million and EBITDA at $7 million to $8 million.

The combined company aims to enhance its market presence, supporting both viral and non-viral therapies, and expects to realize significant cross-selling opportunities and cost efficiencies.

MaxCyte’s gross margin for Q3 2026 was 83%, and the company maintained disciplined operating expenses, achieving a net loss reduction by almost half compared to the previous year.

Projected cash burn for 2026 is expected to be $17 million, with a reduction to less than $10 million in 2027 due to Akron’s cash flow contributions and integration efficiencies.

The company is focused on expanding in Asia Pacific and strengthening its leadership team to support long-term growth.

Full Transcript

OPERATOR

Thank you for standing by, and welcome to the MaxCyte third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press star one. Thank you. I’d now like to turn the call over to Eric Abdo, Investor Relations.

You may begin.

Eric Abdo (Investor Relations)

Hello 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, Parmeet Ahuja, Chief Financial Officer, and Shawn Menarguez, Senior Director of Business Development. Earlier today, MaxCyte released financial results for the third quarter ended September 30, 2026. 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 other than statements of historical fact, including those 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 (President and Chief Executive Officer)

Thank you, Eric. Hello everyone, and thank you for joining MaxCyte’s third quarter 2026 earnings call. Before I turn to our results, I want to highlight the announcement we made today, which I believe is one of the most exciting moments in our company’s history. Following a competitive process, we have entered into a definitive agreement to acquire Akron Bio from our client, Investment Management. Akron is a leading supplier of GMP-grade reagents and ancillary materials, including cytokines, growth factors, cell culture media, and cryopreservation solutions.

Using the cell therapy manufacturing steps immediately before and after cell engineering, including electroporation, Akron differentiates itself through its regulatory-grade quality and documentation along with ready-to-use product formats that simplify and connect directly to cell therapy manufacturing workflows. Like MaxCyte, Akron is spec’d in its customers’ regulated processes with Drug Master Files, or DMFs, referenced in their IND and BLA submissions.

Once spec’d in, which typically occurs in late-stage preclinical development, Akron’s products become increasingly difficult to displace as programs advance through clinical development and commercialization. Akron is spec’d into four commercially approved therapies, including one with a leading global pharma company, and supports four additional programs with registrational pathways. With Akron, MaxCyte triples its exposure to attractive commercial and registrational programs which are nearing approval. Beyond these late-stage assets, the combined company will be embedded in over 95 clinical-stage programs, including more than 85 from Akron, providing a broad pipeline of potential future commercial opportunities.

As part of our extensive diligence process, we conducted a detailed program-by-program assessment of Akron’s portfolio, evaluating individual development timelines, progression toward commercialization, and long-term revenue opportunities. This bottom-up approach reinforced our conviction in the quality of their portfolio and its long-term growth potential. Akron also brings meaningful scale, expanding our commercial revenue footprint and extending our reach across the cell therapy workflow, including both viral and non-viral therapies. Akron’s revenue is expected to be 28 million for 2026 and, importantly, 80% to 85% of 2025 revenue was generated from spec’d-in customers, including 40% to 45% from commercial-stage customers. Both metrics highlight the durable and recurring nature of its revenue base.

Furthermore, Akron is expected to generate approximately 7 million to 8 million of EBITDA in 2026 and is cash-flow positive today. With an efficient cost structure, the acquisition will accelerate MaxCyte’s path to profitability, which Parmeet will cover in more detail. Stepping back, I cannot be more excited about what this combination means for MaxCyte’s next chapter. For nearly two decades, Akron has built a reputation for quality and regulatory support that mirrors our own, and its team has earned the trust of developers, including with some of the largest biopharma companies from the clinic through commercial manufacturing. Bringing our companies together will allow us to serve customers as a single, more integrated partner, deepen relationships across both of our customer bases, and do so from a position of greater scale and financial strength.

Let me lay out our strategic rationale for acquiring Akron in more detail. First and foremost, this transaction expands MaxCyte’s commercial revenue opportunity. Casgevy has been a powerful proof point for our technology and a growing contributor to our financial results, and we remain very confident in the opportunity across our clinical-stage SPL portfolio, including the multiple pivotal programs we are supporting today. Akron complements that foundation with a meaningful commercial base from day one.

Together, we expect to support five commercially approved therapies with durable recurring revenue tied to commercial-stage manufacturing and a deeper presence with large pharma. Approximately 30% of the combined company’s revenue is expected to come from commercial-stage customers, providing greater revenue visibility and stability while reducing exposure to early-stage customer funding cycles and clinical development risk. While our SPL business model has demonstrated the value of revenue scaling alongside the commercial success of partner programs, the combination also meaningfully diversifies our customer base. Our largest customer is expected to represent approximately 14% of combined company revenue compared to 27% for MaxCyte standalone, reducing reliance on any single customer while maintaining meaningful exposure to the commercial success of approved therapies.

Second, Akron expands our footprint across the manufacturing workflow and within our customers’ regulatory packages. MaxCyte’s technology plays a critical role in cell therapy manufacturing, and Akron’s products support the steps surrounding it from cell isolation and expansion through cryopreservation. Third, the acquisition meaningfully expands our addressable market. Our electroporation platform has primarily served non-viral programs—roughly 360 of the approximately 770 ex vivo cell and gene therapy programs we track across the US and Europe.

Because Akron’s products are used regardless of the engineering method, the combined company can address all 770 programs, more than doubling our addressable program base, and with limited customer overlap between Akron and MaxCyte of approximately 10%. Today, despite similar call points and end markets, we see a meaningful opportunity to drive additional revenue growth through cross-selling. Together, we believe this positions MaxCyte as a broader cell therapy manufacturing partner, supporting customers from research through commercialization. From a financial standpoint, this transaction enhances MaxCyte’s scale and financial profile on a pro forma basis. The combined company is expected to generate more than $60 million in revenue in 2026, nearly doubling MaxCyte’s revenue base.

And Akron is profitable, expected to generate $7 million to $8 million in EBITDA with cash-flow positivity today. Combined with the cost discipline established through last year’s restructuring and the stable operating expense base we have maintained throughout 2026, this acquisition significantly accelerates our path to profitability. Parmeet will provide more detail on today’s announcement in his remarks, but let me now turn to MaxCyte’s third quarter results.

MaxCyte reported $10.2 million of total revenue in the third quarter, representing 49% year-over-year growth. Total revenue included $8.2 million of core revenue and $2 million of SPL program-related revenue, which consists of milestones and royalties. Third quarter performance demonstrated the progress we have made throughout 2026, exceeding the growth expectations we established at the start of the year. Core revenue came in above our initial expectations with 27% year-over-year growth and in line with the preliminary results we announced in October.

Outperformance in the quarter was driven by stronger-than-anticipated instrument purchases by one of our partners, including purchases originally expected in the fourth quarter. We are encouraged by the strong start to this partnership and see opportunities for continued contributions as programs advance through development. Beyond this partnership, we saw healthy demand across our broader customer base with double-digit year-over-year growth excluding this specific customer. Instruments showed strong growth in the quarter with the funnel we outlined for the second half continuing to convert into revenue. Processing assembly revenue significantly improved in the quarter across both SPL and non-SPL customers, delivering 20% year-over-year growth and 32% sequential growth.

Importantly, looking at PA revenue on a trailing twelve-month basis, we saw mid-single-digit growth compared to the second quarter, reinforcing the stabilization of PA revenue and its return to growth following the inventory drawdown and program rationalizations experienced last year. License revenue also remains stable, delivering high single-digit growth year over year as the impact of prior program consolidation has largely subsided. We entered 2026 with a focus on stabilizing revenues in the first half and a goal of returning to growth in the second half, and we are delivering on that objective. Given our better-than-expected performance, we updated our full-year guidance for standalone MaxCyte in early October and are updating it further today to reflect better-than-expected commercial royalty revenue. Total revenue is now expected to be at least 34.5 million compared to prior guidance for approximately 34 million from October and our previous range of 30 million to 32 million, representing a total increase of 3.5 million at the midpoint since the second quarter call.

This increase reflects both accelerated instrument purchases by one of our partners and the underlying strength in core revenue across our broader customer base and stronger-than-expected SPL program advancement. Given the underlying health of the core business, we expect approximately 15% year-over-year core revenue growth in the second half, marking a meaningful return to growth following the stabilization of our business earlier this year. Combined with increased milestone and royalty contributions from our SPL partners, this return to core revenue growth positions us to deliver total revenue growth for the full year.

Turning to our partnership with Genentech, we are off to a strong start, and we are very excited about the long-term opportunity it represents for MaxCyte. As a reminder, we see this enterprise-level pharma relationship as an evolution of our partnering strategy—one that complements our SPLs rather than replacing them. Rather than licensing our technology on a program-by-program basis, we are supporting Genentech’s cell therapy portfolio under a single framework across research, clinical development, and commercial manufacturing.

This approach expands our presence in large pharma, allows us to participate across multiple programs, and creates opportunities to generate revenue earlier in the development lifecycle. Importantly, this partnership provides multiple avenues of revenue generation beyond instrument purchases. Over time, we expect to benefit from increased PA utilization, recurring license platform access fees, analytical services, and milestones. We are currently supporting programs across the preclinical and clinical development lifecycle, and as those programs advance, we see opportunities for additional instrument purchases and growing PA utilization, creating meaningful revenue opportunities over the coming years.

Instrument strength extended across our portfolio in the third quarter with a healthy mix of placements spanning early-stage research through GMP manufacturing across both academic and industry customers. Initial traction with the DTX is growing and has allowed us to engage with customers much earlier in their R&D process—well before they would have reached us under our historical model. As a reminder, because DTX runs on the same ExPERT technology as our clinical and manufacturing systems, customers can scale from early R&D toward cGMP production without switching platforms, reducing the need for repeated process optimization and potentially accelerating development timelines by several months. This creates an opportunity for MaxCyte to support customers earlier and grow alongside them as they progress through development. We will continue to invest efficiently in our technology to further strengthen our position across the cell therapy value chain.

Within SPL program-related revenue, third quarter revenue of $2 million included a $1 million milestone tied to pivotal trial dosing in one of our SPL partner programs, along with $1 million of commercial royalty revenue. This milestone came in slightly earlier than we expected and, together with growing royalty contributions, highlights both the utility of MaxCyte’s technology and the value of our SPL model, which allows us to participate in our partners’ success from clinical development through commercialization.

We continue to support 13 programs currently in the clinic within our SPL portfolio and additional programs through our enterprise partnership with Genentech. We are now supporting multiple pivotal trials with approval potential as early as next year. Meanwhile, additional programs are advancing toward pivotal studies over the next two years. As these programs move toward commercialization, each one represents a potential new source of milestones, royalties, and recurring process assembly demand for MaxCyte, and we are excited about the growth opportunity that lies ahead of us.

We now support more pivotal trials than ever before, with the potential of having up to three approved products within the next 24 months. Turning to Casgevy, we remain encouraged by its performance in the third quarter and its commercial trajectory. Heading into the end of the year, Vertex reported approximately 99 million of Casgevy revenue for Q3, demonstrating approximately 30% growth quarter over quarter and nearly six times the revenue they reported in the third quarter of 2025. On its earnings call, Vertex indicated they have initiated over 750 patients worldwide on Casgevy, with twice as many patients infused in the first nine months of 2026 compared to all of 2025.

Although they noted that they have strong visibility into the number of infusions, they expect seasonality in the fourth quarter and have encouraged people to focus on annual performance rather than any single quarter. Ultimately, we remain confident in Casgevy’s continued uptake, with royalty revenue beginning to materialize in our results, and believe it will become a material contributor to our growth moving forward. Looking ahead, we see opportunities to expand our presence among academic institutions advancing clinical trials on our platform and across Asia Pacific, including China, Japan, and India. We are pursuing these growth opportunities while maintaining financial discipline and leveraging our existing infrastructure to support new products like DTX, allowing us to scale revenue without a corresponding increase in operating expenses. We also continue to strengthen our leadership team.

I am pleased to welcome Siddharth Kapilashwar as our new Chief Corporate Development Officer at MaxCyte. Siddharth joins us from Danaher, where he most recently served as Vice President of Innovation for the Life Sciences platform, and he brings extensive experience across corporate development, strategy, innovation, and M&A at leading healthcare organizations. His proven track record of translating strategic priorities into growth will be an important asset as we position MaxCyte for long-term execution.

In closing, I want to thank our team for a strong third quarter. We are very excited about the opportunity ahead with Akron as well as the momentum we are seeing at MaxCyte in the second half of the year. We expect to exit 2026 with a more stable revenue base, providing a stronger foundation for continued growth in 2027. The Akron acquisition further strengthens MaxCyte’s financial profile and expands our commercial opportunity. We will be relentlessly focused on executing the next chapter of MaxCyte’s growth as we approach year-end and move into 2027.

We’ve also published an investor presentation on our IR website that provides a deeper look at the strategic rationale, financial profile, and opportunities we see for the combined company. I will now turn the call over to Parmeet.

Parmeet Ahuja (Chief Financial Officer)

Thank you, Maher. Let me first discuss Akron before turning to MaxCyte’s third quarter financial results. Akron is an established business of meaningful scale with approximately $28 million in expected 2026 revenue, which will nearly double MaxCyte’s revenue base. This compared to approximately $23 million in total revenue in 2025 for Akron. Akron has delivered low- to mid-teens annualized revenue growth since 2018, and we expect that trend to continue in 2027 with potential for further acceleration over the longer term as commercial programs scale and an increasing proportion of revenue comes from commercial-scale manufacturing.

Our confidence in Akron’s continued growth trajectory is supported by several program-specific catalysts. Akron is spec’d into four commercially approved therapies, positioning the business to benefit from increasing reagent demand as commercial launches scale. This includes a CAR-T program with a leading global biopharma company expanding into additional regions and another commercial program exceeding adoption expectations as its launch progresses.

Beyond these commercial opportunities, Akron supports four late-stage registrational programs nearing potential approval and more than 85 earlier-stage programs in development. Importantly, approximately 80% to 85% of Akron’s revenue comes from spec’d-in programs, providing greater visibility and predictability into future revenue. Furthermore, Akron maintains an attractive gross margin profile in the mid-60% range, reflecting the value of its specialized GMP-grade products and differentiated offerings.

Akron also operates with an efficient operating expense base of approximately $10 million to $11 million annually, excluding non-cash items, and, as Maher mentioned, is expected to generate 7 million to 8 million of EBITDA in 2026 and is cash-flow positive today. Akron brings an established, profitable operating model that complements MaxCyte’s existing business. Beyond Akron’s standalone contribution, we see opportunities for approximately 3 million to 4 million in additional cost efficiencies throughout the integration process, primarily through the consolidation of corporate functions and operational efficiencies. These opportunities provide further operating leverage as the combined business grows.

The scale, revenue durability, and profitability profile of Akron were all attractive attributes in our evaluation of the acquisition opportunity that we believe will benefit MaxCyte’s financial profile over time. Now, pivoting to MaxCyte’s third quarter 2026 financial results, total revenue in the third quarter of 2026 was $10.2 million compared to $6.8 million in the third quarter of 2025, representing growth of 49%. We reported core revenue of $8.2 million compared to $6.4 million in the comparable prior-year quarter, representing growth of 27%. Within core revenue, instrument revenue was $2.8 million compared to $1.4 million in the third quarter of 2025, license revenue was $2 million compared to $1.8 million in the third quarter of 2025, and processing assembly, or PA, revenue was $3.1 million compared to $2.6 million.

The increase in core revenue is primarily driven by instrument revenue, specifically accelerated instrument purchases by one of our partners, with some purchases originally anticipated in the fourth quarter, as well as continued instrument placements across our broader customer base. PA revenue showed significant strength in the quarter with broad-based improvement across the customer base, including both SPL and non-SPL customers. Additionally, license revenue was stable while delivering year-over-year growth.

SPL program-related revenue in the third quarter was $2 million compared to $0.4 million in the third quarter of 2025. SPL program-related revenue in the third quarter of 2026 consisted of a $1 million milestone related to the SPL customer in a pivotal trial and approximately $1 million of royalty revenue. The increase versus last year reflects the milestone achieved in the quarter, along with higher royalty revenue from continued Casgevy adoption.

As the commercial launch continues to mature, we are beginning to see royalty revenue become a more meaningful recurring contributor to our financial results. Moving down the P&L, gross margin was 83% in the third quarter of 2026 compared to 77% in the third quarter of 2025. Excluding inventory provisions and SPL program-related revenue, non-GAAP adjusted gross margin was 80% in the third quarter of 2026 compared to non-GAAP adjusted gross margin of 81% in the third quarter of 2025. Despite a higher proportion of instrument revenue, which historically carries lower relative margins, we maintained strong gross margins supported by a healthy mix of higher-margin GMP instruments.

For the full year, we continue to expect gross margins in the high 70s. Total operating expenses for the third quarter of 2026 were $14.5 million compared to $19.4 million in the third quarter of 2025, a decrease of approximately $5 million, or 25%. Year to date, total operating expenses are approximately $44 million compared to approximately $62 million from the comparable prior-year period and, as a result, net loss of approximately $18 million year to date was almost cut in half compared to last year’s net loss of approximately $35 million in the comparable prior-year period.

Our cost structure remains disciplined with significantly lower operating expenses, reflecting the full benefit of the restructuring and efficiency actions that we implemented in 2025. We expect operating expenses to remain around current levels, excluding the aforementioned $3 million to $4 million deal-related cost synergies, even as we continue to invest in our technology to support future growth. As total revenue grows, we expect to realize greater operating leverage, allowing that growth to translate into improved profitability.

Turning to the balance sheet, we ended the third quarter with total cash, cash equivalents, and investments of 132.7 million and no debt. Under the terms of the agreement of the acquisition of Akron, MaxCyte will acquire Akron for total consideration of 151.8 million consisting of 105 million in cash and approximately 26.8 million in MaxCyte common stock, plus 20 million in guaranteed deferred payments paid in two installments of 10 million in ’28 and ’29.

Cash for the acquisition will primarily be funded with cash on hand, including cash equivalents and investments. To ensure liquidity and balance sheet flexibility, we entered into a credit facility with MidCap Financial of up to $75 million consisting of a $55 million term loan and a $20 million revolving credit facility. At closing, we expect to draw $20 million under the term loan and $2 million under the revolver. This structure enables us to acquire a profitable, cash-generating business while maintaining significant balance sheet flexibility to support our long-term growth strategy.

The 2026 annual cash burn on MaxCyte is expected to be approximately $17 million, excluding the one-time share repurchase earlier in the year and acquisition-related cost and expenses. With Akron contributing positive cash flow, anticipated integration efficiencies, and MaxCyte’s standalone cash burn declining in 2027, driven by revenue growth, we expect the combined company’s annual cash burn to be less than 10 million in 2027, inclusive of reduced interest income resulting from the transaction and interest expense associated with the debt facility.

We anticipate further reductions in cash burn as revenue grows in subsequent years, significantly accelerating our path to profitability. Upon acquisition close, we expect to have approximately 40 to 45 million in cash on the balance sheet. With Akron expected to nearly double our revenue base and contribute positive operating cash flow, we anticipate a meaningful reduction in our combined cash burn and an accelerated path to profitability. We believe our available liquidity, including cash on hand and access to the credit facility, together with anticipated operating cash flows, will be more than sufficient to fund the combined company through profitability. While we do not anticipate utilizing the full credit facility, it provides additional balance sheet flexibility as we execute on our growth strategy. Importantly, the combination strengthens our overall financial profile, providing additional scale and a more diversified recurring revenue base to support sustainable long-term growth.

Continuing to our 2026 guidance, I want to note that our 2026 guidance, including our year-end cash outlook, reflects MaxCyte on a standalone basis and excludes any contribution from Akron, given the acquisition has not closed, and, as I will describe, our expected year-end cash figure is presented on a pro forma basis. We are updating our 2026 outlook provided in October and now expect total revenue to be at least 34.5 million, consisting of approximately $28 million of core revenue and at least $6.5 million of SPL milestones and royalties.

For SPL milestones and royalties guidance, we expect approximately $4 million of revenue from milestones and approximately $2.5 million of royalty revenues, with $4 million of milestone revenue already received year to date. Overall, this represents a $3.5 million increase to our total revenue guidance at the midpoint of the range provided on our second quarter call. Importantly, our updated core revenue guidance implies approximately 15% year-over-year growth in the second half of 2026.

This return to core revenue growth, together with increased milestone and royalty contributions from our SPL partners, positions us to deliver total revenue growth for the full year. Lastly, we anticipate ending 2026 with at least 133 million in cash, cash equivalents, and investments on a pro forma basis, excluding any further capital deployed towards our repurchase program and the consideration, expenses, and other costs related to the proposed acquisition of Akron Bio. This is an increase of approximately 2.5 million from our prior outlook. The improvement reflects stronger-than-expected revenue performance and resulting operating leverage as we continue to maintain disciplined expense management.

Note that this pro forma figure is presented solely to provide a direct comparison to our September 30th balance of $132.7 million. Because acquisition-related expenses and costs will reduce our actual cash, we do not expect our actual cash, cash equivalents, and investments at year end to be $133 million, and this figure should not be viewed as a forecast of our actual year-end balance. Now I’ll turn the call back over to Maher.

Maher Masoud (President and Chief Executive Officer)

Thank you, Parmeet. I’d like to thank everyone at MaxCyte for their continued hard work and dedication. This is an exciting next chapter for MaxCyte and I look forward to updating you on our progress in the coming quarters. With that, I will turn the call back over to the operator for the Q&A.

OPERATOR

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of Matt Hewitt from Craig-Hallum. Your line is open.

Matt Hewitt (Analyst)

Good morning. Congratulations on the strong quarter and what appears to be a really nice acquisition. I actually have a couple questions regarding Akron. First off, on the sales organization, what is their sales structure and what do you anticipate from a merging of your existing team with that and kind of walk through what that go-to-market strategy will be?

Maher Masoud (President and Chief Executive Officer)

Yeah, absolutely, Matt. So thanks for the question and good to hear from you. It’s exactly one of the reasons why it’s a perfect acquisition for us as well. They currently have an industry leader in Dave Smith who leads that commercial organization there. They have a lean team. They’ve done this extremely well over the years where they’ve been able to really get in, embed into customers. But this is now an opportunity for us over time. It’s a great company, they built a great product, they’re embedded in customer workflows for us to begin to utilize our commercial team as well.

We have an expansive commercial team in the U.S., in Europe and Asia-Pac, with sales reps as well as field application scientists that we begin to leverage over the coming six months, 12 months, really begin to embed our commercial team and their commercial team and just create that scale for Akron; that they have leading products that really should be used by all developers. Now’s a chance for us to work with them and use our commercial team and leverage what we’ve built over the past few years to grow revenues meaningfully as well, Matt.

So great question.

Matt Hewitt (Analyst)

Excellent. And then maybe shifting back to the MaxCyte standalone. You obviously had a nice pop in PAs. I think you over the course of the year kind of expected to see that kind of return to growth. But in the prepared remarks you noted that there was some pull forward. I think that was just related to the instruments. But regarding just the PAs, do you expect to see some growth from the Q3 level, or with the instruments pulling back a little bit in Q4 you would expect similar in PAs?

Thank you.

Maher Masoud (President and Chief Executive Officer)

Yeah, Parmeet, did you want to take that question?

Parmeet Ahuja (Chief Financial Officer)

Yeah. So really good to hear from you, Matt. The pull forward was really on the instrument side of things. On the PA side of things, as you’ve noted, as we’ve commented before, you know, the drawdown from our largest customers is behind us. Some of the SPL program challenges that we ran into last year and had effect in the first half of the year are behind us. We certainly are going into a stable base from here and certainly expect PA revenue to continue to grow from this stable base, Matt.

Matt Hewitt (Analyst)

Excellent. Thank you.

Maher Masoud (President and Chief Executive Officer)

Thank you, Matt.

OPERATOR

Your next question comes from the line of Julie Simmons from Panmure Liberum. Your line is open.

Julie Simmons (Analyst)

Thank you very much. Looks like an excellent acquisition. Just going back to the base business for a second. Just looking at the instrument mix, the price per instrument seems to be much higher than we’ve seen in recent quarters. Is that because you’re selling more of the later-stage instruments, or is it just because with new customers you’re able to sell at a slightly higher price because that’s the way that particular contract works out?

Maher Masoud (President and Chief Executive Officer)

Yeah, let me take that and then, Parmeet, feel free to add in as well. Julie, first of all, nice to hear from you. We’re really selling and leasing more GMP systems. That’s what’s contributing to that mix there and the higher number. Obviously we launched the DTX earlier in the year, but that’s just to, as we indicated earlier, spec us into customers earlier, but really start to push more of the GMP instruments and the leases as well. And that’s the goal of this company, is to continue to do that.

Parmeet Ahuja (Chief Financial Officer)

No, you’ve covered it well. Perfect.

Julie Simmons (Analyst)

Very good. And then secondly, if I may, as I said, it looks like a really nice fit in terms of increasing the consumables element of what you’re selling. Again, just wondering how the balance across the development pipeline goes. I mean clearly they’ve got some late-stage products and commercial products and you have. How does it mirror what you have currently?

Maher Masoud (President and Chief Executive Officer)

Yeah, so they actually—so, Julie, they triple our exposure to both late-stage clinical and commercial programs. So right now we have obviously CASGEVY that we’re part of and we’re spec’d into, we’re supporting. They have four current commercial products they’re spec’d into. They also have four additional registrational products they’re spec’d into. From day one, when this acquisition closes, we’re going to be spec’d into 12 commercial and late-stage clinical programs.

It really just diversifies our revenue base. It gets us stickier into the customer base with durable recurring revenue. In fact, if you look at the slide deck that we put onto our website, we now go to recurring revenue mix from 57% currently, with a combined company of 74%. And it’s really—it ties to what the growth is for the future cell therapy market as well, which is tied to that late-stage clinical commercial programs being spec’d into altogether, with near term of being spec’d into potentially, you know, three from us and four from them of late-stage clinical that can go commercial very soon.

You can really start to appreciate that durable, sticky revenue with a high growth rate in the years to come.

Julie Simmons (Analyst)

Excellent. Looks very good. And just as far as Genentech’s concerned. Is that a customer of theirs as well, or is that one that you might be able to sell some product into given your broad relationship with—

Maher Masoud (President and Chief Executive Officer)

Yeah, great question. Obviously we’re not going to comment which customer is which for confidentiality reasons. Right now our customer overlap is minimal. It’s only 10% between our customers and their customers. So we can lead—there’s a lot of customer overlap that we can begin to truly go after now with our commercial team and their commercial team and the cross-referencing and the cross-marketing as well. So that’s Genentech among many other companies that we’d be looking to also bring in their top-class and really best-in-class closed-system cytokines and growth factors.

They’ve built an amazing reputation over 20 years. If you look at their gross margins for a reagent business and consumable business, it’s very high. It speaks to the quality of what they’ve been producing over the years. It speaks to their closed liquid format that allows manufacturers to truly have a more streamlined cell therapy workflow, reduce manufacturing costs, really reduce that vein-to-vein time as well. So there’s an enormous, enormous, truly cross-selling opportunity over the years that we can begin to work with them on.

These are two great companies coming together. We can’t be more thrilled. We really can’t be more thrilled.

Julie Simmons (Analyst)

Excellent. I’ll get back in the queue. Thank you.

Maher Masoud (President and Chief Executive Officer)

Thank you, Julie.

OPERATOR

Your next question comes from the line of Dan Arias from Stifel. Your line is open.

Dan Arias (Analyst)

Good morning, guys. Thank you. Maher, you touched on the approvals that sit in front of the company, both for the existing business and then now Akron. If you look out a little bit at the registrational assets, obviously those would be positive events for you guys. As you look ahead to that stuff, do you think that you have your hands around the ordering patterns that might unfold into and out of late-stage work and then FDA decisions? In other words, are you confident that you can forecast around those things so you get the benefit of what I assume would be stepped-up spending but not get tripped up by pauses, inventory workdown, things that just sort of enter the equation as you come up on those?

Maher Masoud (President and Chief Executive Officer)

Yeah, yeah. Great question, Dan. We’ve learned over the years, obviously from being spec’d in the commercial program itself, you know what the cadence is of ordering before a product’s approved, what the cadence is after a product’s approved, in the first early years of commercial launch. We like to think we know a lot more now, and our customer communication is much better. I’d say we’ve built with our late-stage customers as well to give us the ability to begin to forecast and, as you said, not get tripped up.

You know, so we feel good where we are now. You know, it’s like everything else. The cell therapy space is still growing. There’s going to be many more commercial products coming. And now we’re spec’d into, in essence, five current—seven on the heels of the current commercial. It’s that communication, that constant communication with the customer that we’ve been building over the last two years. We feel much better now being able to forecast both for anticipation of a commercial launch, first year of a commercial launch, and then the years thereafter.

So we feel good where we are, Dan.

Dan Arias (Analyst)

Okay. All right. And then, Parmeet, what kind of runway do you see for improving gross margins? What do you see when you look at COGS? And can you get those closer to where MaxCyte is today? Thanks.

Parmeet Ahuja (Chief Financial Officer)

Yeah. Dan, first of all, nice to hear from you. I think Akron has done a great job with their differentiated reagents, achieving mid-60s. Obviously, we’ll be taking a good look at it, look for opportunities to get their gross margins closer to ours. I think there will also be leverage coming from combining the two organizations—the commercial side Maher talked about, but also on the manufacturing side, what are the opportunities there? We certainly see room there, but as it is, very attractive gross margin profile already.

Dan Arias (Analyst)

Okay, thank you.

OPERATOR

Your next question comes from the line of Mark Massaro from BTIG. Your line is open.

Megan (Analyst at BTIG)

Hey everyone, this is Megan on for Mark. Thank you for taking our question. Back on the Q2 call, you were talking about being very, very selective on M&A. So what specifically about Akron cleared that bar, and was it a program that you had been evaluating for a while? Has something changed in the last three months that made this the right moment?

Maher Masoud (President and Chief Executive Officer)

Yeah, absolutely. Thank you for the question, Megan. Great question. So obviously we’ve been talking about M and A for quite some time, and it has to be a company that really fits what we need, which is our current call point. We’re looking at products that have to be best in class, and Akron has best-in-class products. They have an amazing leadership team there, both Ezekiel Zilberg, who’s their head of operations and chief operating officer, as well as Dave Smith, as I mentioned, who’s the president and chief commercial officer.

What it brings to us is scale, right? Overnight we are nearly doubling our revenues. They are cash flow positive, EBITDA of 7 to 8 million as well. And then you look at just the overall durable recurring revenue that we’re participating in by this acquisition. The two companies coming together just fit those criteria: leading-class products that are used across the industry. Large pharma uses them, biotech uses them. They’re both in late-stage clinical and commercial, durable, sticky revenue, cash flow positive.

In addition to that, we’ve now increased our TAM. In essence, we’ve been, for the longest time, supporting the non-viral cell therapy market. We now support the entire cell therapy market with the acquisition of Akron, both viral and non-viral. And the cross-selling opportunities have to be there, right? That’s why it has to be a similar call point. This is a very similar call point. We oftentimes are at conferences together. Many of our sales reps and our FASs on our commercial team — these field application scientists — we oftentimes see the reagents in the field, we recommend the reagents in the field.

We’ve known each other for quite some time, and this was a highly competitive process, and there’s a reason why. It’s a company that’s built a great reputation over 20 years, and it checks all the boxes for us and allows us to really begin to build that durable, sticky commercial revenue base, durable, sticky late-stage clinical base, and even reduces our customer concentration, where right now we’re going from our leading customer being 27% of our revenues to, after the acquisition, 14% of our revenues, and it puts us on a path to free cash flow and profitability much sooner.

As Parmeet indicated earlier in the call, we have 17 million of burn this year. We anticipate with this we go under 10 million of burn, and it gets us into what we need, which is that commercial exposure, which is where the growth is coming in the cell therapy space that can lead to future growth for the combined company at a nice double-digit rate as well. So it checks all the boxes for us, Megan.

Megan (Analyst at BTIG)

Great, thank you. And then just digging in a bit more to the annual cash burn guidance for 2027 of 10 million. Just a little curious about the key assumptions behind that figure.

Parmeet Ahuja (Chief Financial Officer)

Yeah, Megan, that’s a great question. So obviously Maher talked about the positive EBITDA that we are inheriting from Akron, our attractive gross margin coming from there, as well as the 3 to 4 million of opex reduction that I talked about coming from integration. As we integrate the corporate functions, other functions up and down the P and L, certainly we’ll be losing some of the cash interest as well as taking on some MidCap interest, but all in all feel very good about being less than 10 million next year.

Megan (Analyst at BTIG)

Wonderful. Thank you both.

Maher Masoud (President and Chief Executive Officer)

Yeah, thank you, Megan.

OPERATOR

Your next question comes from the line of Brendan Smith from TD Cowen. Your line is open. Brendan, your line is open.

Brendan Smith (Analyst)

Great. Sorry about that, guys. Thanks for taking the questions. Congrats on the deal and the quarter, great to see. I wanted to actually ask here about some of the cross-selling opportunities that you mentioned earlier, just kind of dig in a bit more there. I think you mentioned 10% customer overlap today. Excuse me, how should we maybe think about kind of prioritization there, and maybe would you expect cross-selling to primarily be about kind of deepening multiple products within that 10%?

Is there an opportunity to grind that 10% higher in both directions? Just maybe where you see that ultimately getting to based on what you know about the standalone businesses?

Maher Masoud (President and Chief Executive Officer)

Yeah, absolutely. Great question, Brendan. I think, you know, obviously for the 10% there’s opportunity to deepen the relationships there, but it’s the broader opportunity, right? It’s the remaining 90 — you know, it’s 10%, the remaining 90% that we’re not selling into. We have a fairly large commercial team right away in Europe, a fairly large commercial team that we’ve been building over the last two years in Asia-Pac as well that we can begin to start to leverage.

So we see a lot of cross-selling opportunities right away from just exposure that we have from the commercial team that we have. As I’ve indicated on previous calls, part of the reason why we’re looking at M and A as well has been to leverage the current scale that we’ve built. We have a fairly vast commercial sales and marketing team that we believe truly is best in class as well. We have top leaders from industry who have joined us over the years. This allows us to really, right away, start expanding our footprint into Asia Pacific, expand the footprint into Europe as well.

So there’s opportunity — really, just as I mentioned earlier, we sit side by side at many conferences. We know each other. We know the Akron team there. They’ve built an amazing team as well. They operate in a fairly lean fashion that has opportunity for us to now leverage our commercial team to really boost their revenues and bring top-quality products. I mean, they’ve created a unique platform, a closed system with their sidecars of growth factors in a liquid format that no other company has, and we couldn’t be more excited to begin to use that commercial team that we have, both from the sales reps and the field application scientists, to get more involved with current customers and expand the customer footprint as well, above and beyond the 10% current overlap.

Brendan Smith (Analyst)

Got it. That’s great. Okay. And then I wanted to also ask actually a bit more how we should maybe think about the relative revenue mix of the fully combined company, kind of just between instruments and the recurring revenue bucket now versus SPLs. I know there’s just a lot of moving parts there. So really any color on kind of revenue inflection over the maybe three- to five-year time horizon, and just things that we should keep in mind there when we look at our models.

Thanks, guys.

Maher Masoud (President and Chief Executive Officer)

Great question. I mean, obviously I mentioned I’m going to have — pardon me — speak here. I mentioned that we go from our current revenue mix currently at 57% to 74%. You’re asking about the mix of instruments to the reagent side. You know, obviously they’re spec’d into four, commercial programs are spec’d into one. It’s a little bit early to tell how that’s going to be depending on how many more commercial products we’re spec’d into, and they’re spec’d into.

That’s where you see a lot of the ramp. Parmeet, anything from your side?

Parmeet Ahuja (Chief Financial Officer)

Yeah. Obviously, Brendan, first, good to hear from you. And we’ll detail all of this when we give out our guidance with Q4 results. But no surprise, right? We are adding in substantial recurring revenue. Instruments would certainly be a big part of the MaxCyte side business. Along with our SPLs and Akron’s reagents, we become a much more durable recurring revenue company. So more to come on that, but very excited about this mix movement.

Maher Masoud (President and Chief Executive Officer)

Let me add there as well. Even the combined commercial revenue is roughly 30%. And as commercial traction continues with these programs, that should only increase as well, which makes it more durable, more sticky, and begins to track over the years to the traditional cell therapy growth percentages as well.

Brendan Smith (Analyst)

Got it. Makes sense. Thanks, guys.

Maher Masoud (President and Chief Executive Officer)

Yeah, thank you, Brendan.

OPERATOR

As a reminder, if you’d like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of Hannah Rayford from Stephens Inc. Your line is open.

Hannah Rayford (Analyst)

Hey, good morning. Congrats on the quarter and the acquisition, and thanks for taking my questions. There was a good strong step-up in instruments, and you called out a pull-forward. Can you just talk about how the demand for instruments was outside of that pull-forward, and if you’re able to kind of quantify that for me? And does the step-down in core revenue guidance in 4Q — is that kind of just about that instrument pull-forward, or is there anything else to call out for your 4Q guide?

Maher Masoud (President and Chief Executive Officer)

Yeah, Hannah, I wouldn’t necessarily call it a pull-forward. It was from a large enterprise pharma customer. We were expecting business from them either in Q3 or Q4; it happened in Q3. Even as you adjust for that, we saw very strong double-digit growth in Q4. So really durable growth across the broader customer base, even outside that large enterprise pharma customer.

Hannah Rayford (Analyst)

Okay, that’s great to hear. And then I know it’s a small revenue base, but it looks like there was a bit of a step-down in assay service revenue. Is there anything demand-wise that you would call out for Secure this quarter?

Parmeet Ahuja (Chief Financial Officer)

Yeah, let me take that, Hannah. No, actually Secure is just more on the lumpy side from the services. Obviously they have licensing and they have services. The licensing revenue is more recurring throughout the year — these are annual licenses that they enter into. On the services side, really just lumpy quarter to quarter. You can have one quarter higher than the other. I think it’s still early in their process to understand what quarters begin to normalize.

So I would just attribute it to lumpiness at this point, Hannah.

Hannah Rayford (Analyst)

Okay, great. Thank you. I’ll leave it there.

Maher Masoud (President and Chief Executive Officer)

Thank you, Hannah.

OPERATOR

And there are no further questions at this time. I will now turn the call back over to Maher Masoud for closing remarks.

Maher Masoud (President and Chief Executive Officer)

Thank you everyone for joining us. Just want to end the call by thanking the team here at MaxCyte, thanking the team at Akron as well. They’ve built a great company there. We look forward to continuing the growth that they’re continuing to have themselves. Could not be more excited about what we’re doing here at MaxCyte. We made a lot of hard decisions last year that put us in a position for strength this year, going to next year and the year after.

Couldn’t be more excited about the cell therapy space. I’ve said it before, I’ll say it again: this is the future of medicine. This is where you can truly cure diseases and let people live disease-free as well. Could not be more excited with us and Akron coming together. This is an opportunity for us to be embedded in, I believe, all the potential commercial cell therapies out there. So I want to thank the MaxCyte team, want to thank the Akron team.

I want to thank everyone and look forward to speaking to everyone again on the next earnings call.

OPERATOR

This concludes today’s conference call. You may now disconnect.

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