BioNano Genomics, Inc. Stock

Good day, and thank you for standing by. Welcome to Bionano Third Quarter 2026 Financial Results Conference Call. [Operator Instructions]. Please be advised that today's conference call is being recorded.

I would now like to hand the conference over to your first speaker today, Webb Campbell, Investor Relations. Please go ahead.

Thank you, Stephanie, and good afternoon, everyone. Welcome to Bionano's Third Quarter 2026 Financial Results Conference Call. On the call with me today are Al Luderer, Chairman and Interim CEO of Bionano; and Mark Adamchak, Bionano's Chief Accounting Officer.

After market closed today, Bionano issued a press release announcing its financial results for the third quarter 2026. A copy of the release can be found on the Investor Relations page of the company's website.

Certain statements made during this conference call may be forward-looking statements. Actual results may differ materially from such statements due to several risk factors and risks, some of which are identified in Bionano's press release and Bionano's reports filed with the SEC. These forward-looking statements are based on information available to Bionano today, November 10, 2026, and the company assumes no obligation to update statements as circumstances change.

During our call, we may refer to certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliations of these measures to GAAP can be found in our press release and slide deck. An audio recording and webcast replay for today's conference call will also be available online on the Investor Relations page of the company website.

With that, I will turn the call over to Al.

Thank you, Webb, and good afternoon, everyone. I'm pleased to be here with you all today to share our third quarter 2026 results. Bionano delivered a strong third quarter. Our results reflect the trust our routine use customer base places on our products and the continued global utilization of optical genome mapping, or OGM, for discovering and analyzing diseases.

Over the quarter, we saw momentum build across our business as well as the broader genomics community. Clinical adoption is what drives our results, and we saw progress on several fronts that make it easier for customers to bring OGM into routine practice. We expect that adoption, along with greater use at both existing and new clinical sites to remain the foundation of our growth moving forward.

We continue to pursue our mission of transforming pathology, the field devoted to understanding the causes, progression and impact of disease. Traditional methods for structural variant detection are costly, repetitive, labor-intensive and time-consuming. By helping customers move to digital workflows supported by our consolidated platforms, automation and decision intelligence software, we can provide a faster, more efficient and more informative way to analyze the genome.

Today, I'll walk through how we have been advancing toward that goal across our 4 strategic pillars. I'd like to take a moment to revisit the framework that guides how we execute. In September 2024, we made a deliberate shift away from aggressive installed base growth towards profitable growth with our existing routine users.

By placing an emphasis on prospects most likely to become routine, high-volume users, we've positioned ourselves to be a more focused, agile and sustainable company. In practice, this is done through the following: first, to support and sustain our installed base of routine OGM and VIA software users; second, to increase OGM utilization by routine users by supporting menu expansion and improving ease of use with VIA and Ionic adoption. Third, to build the support needed for OGM reimbursement and inclusion in medical society guidelines and recommendations. And fourth, to improve profitability and scalability through lower costs, higher volumes and continuous improvement in product quality.

So turning to our first and second pillars, which are focused on supporting our installed base and driving greater utilization of our products. Q3 2026 flow cells sold were up 18% year-over-year at 9,870 units, a record for any quarter. In short, our customers are processing more samples than ever and a large share of that added volume comes from laboratories bringing OGM into routine use.

Now breaking down our revenue segments, Consumable revenue was $4.7 million in Q3 2026, up 24% year-over-year, driven by sales to existing customers in the Americas. Software revenue was $1.1 million in Q3 2026, down 31% year-over-year, reflecting a lower number of VIA software licenses sold in the period.

Other revenue, which includes instruments and services, was $2.5 million in Q3 2026, up 24% year-over-year, led by higher instrument sales to new customers. The continued move towards more recurring consumable-driven revenue gives us a healthier and more predictable business and is evidence of our strategy in action.

I'd also like to highlight the geographic profile of our quarter. Revenues in Europe, the Middle East and Africa grew 14% year-over-year to $4.1 million, up from $3.6 million a year ago, driven by growth in instrument revenue. Revenue in the Americas grew 35% year-over-year to $3.8 million. Adoption of OGM is not happening in a vacuum. Its value is being recognized globally as the investments we have made in evidence generation begin to translate to adoption.

Regarding our second pillar, increasing OGM utilization by supporting software adoption and menu expansion, customers continue to give us very positive feedback on our software and compute upgrades that let them broaden their test menus and run more samples and in some cases, have allowed them to double weekly cancer sample throughput with no change to their hardware.

Our VIA software remains the gold standard for CNV analysis on microarrays, and we continue to see adoption among NGS and long-read sequencing labs. Customers who use VA without OGM give us a base of software revenue, and this is often the first step towards using more of our platform.

Ionic, our system for producing high-purity DNA and RNA also remains a key focus, supporting both OGM and NGS workflows at scale. We are increasingly seeing our software offerings as an on-ramp to broader OGM platform adoption. As we begin to see the transition of array via customers to OGM, we will eventually recognize some decline in software revenue, but expect to offset this loss by bringing these customers deeper into our OGM ecosystem.

As we focus our resources on the largest opportunities in clinical OGM, we view the migration of these customers to OGM as a critical step forward for more routine use.

Now highlighting our third pillar, building support for OGM reimbursement and inclusion in medical society guidelines. An important development this quarter was MolDX's proposed local coverage determination or LCD for OGM. In late August, MolDX published a proposed LCD that would set Medicare coverage in the Medicare administrator contractor jurisdictions that follow MolDX, representing 31 U.S. states. This coverage determination establishes a criteria for OGM-based genome-wide detection of copy number alterations and structural variants in hematologic neoplasms.

The public comment period has now closed, and we look forward to the final determination. Today, Medicare is the largest payer for cancer care and about 60% of new cancer diagnoses are in Medicare eligible patients. MolDX states also represent roughly 61% of the U.S. population and private insurers often write their policies in line with Medicare coverage.

For laboratories, a clear coverage pathway lowers the financial risk of validating OGM and moving it into routine use, further supporting the broader adoption and utilization that drives demand for our products. This builds on the reimbursement foundation we described last quarter. As we previously noted, the AMA has approved 2 Category 1 CPT codes for OGM, one in hematologic malignancies and another for constitutional genetic disorders.

Additionally, CMS has established reimbursement rates for both codes. The coverage determination from MolDX would add a clear path to Medicare coverage for OGM and hematologic malignancies. Together, we believe these developments are creating meaningful momentum for OGM and make it easier for customers to become routine users.

Another milestone this quarter came in New York, where 2 leading academic centers are now bringing OGM into their clinical laboratories. The New York State Department of Health approved OGM-based laboratory developed tests at University of Rochester Medicine, covering genetic disorders, reproductive disorders and hematologic malignancies.

Memorial Sloan Kettering Cancer Center then launched OGM-based hematologic malignancy testing following state approval. State approval is a significant step allowing institutions to offer OGM testing in New York. As more leading cancer centers adopt OGM in their clinical workflows, our base of routine users expands, subsequently driving utilization of our products.

Now expanding on our third pillar, the growing body of evidence continued this quarter with 3 new independent peer-reviewed publications showing the potential clinical value of OGM in high-risk myeloid cancers. The first published in modern pathology by researchers at MD Anderson used OGM to study 332 samples from subjects with myelodysplastic syndromes or MDS.

OGM identified chromoanagenesis, a catastrophic single event genomic restructuring process in 15.9% of cases overall and 17.6% of newly diagnosed subjects. These subjects had a median survival of 9.9 months, while the median survival for the rest of this group was much higher as it had not been reached during the study.

Researchers noted that this information could help doctors identify high-risk patients earlier and consider more aggressive treatments. The second study published in the International Journal of Cancer by the University of Oulu, Finland, analyzed 48 samples of cytogenetically normal acute myeloid leukemias. The study found that OGM detected clinically relevant structural variants in 46% of cases classified as normal by conventional karyotyping and the presence of OGM detected abnormalities was associated with worse survival in these individuals.

The third study published in NPJ Precision Oncology by the Josep Carreras Leukemia Research Institute in Spain, studied subjects with therapy-related myeloid neoplasms and younger onset MDS. It found that OGM produced a result in every sample, including all 8 where conventional banding failed and identified 134 additional genomic alterations.

OGM defined genomic groups showed significant differences in overall survival with chromoanagenesis emerging as the strongest independent predictor of inferior overall survival. These publications join the T-cell acute lymphoblastic leukemia study we highlighted last quarter, also published in modern Pathology and conducted by researchers at MD Anderson and Johns Hopkins.

Together, these publications, along with the 365 studies published year-to-date, give us confidence that the expanding body of clinical evidence is a leading indicator of future adoption and utilization of OGM.

Turning to our fourth pillar. We continue to make progress on profitability. In 2023, our adjusted gross margin was in the low 20% range. Since then, we've steadily improved it. And in the third quarter, we generated a gross margin of 48% compared with 46% in the same quarter last year.

We've applied the same discipline to our cost structure. Operating expenses decreased 12% year-over-year to $10.5 million and adjusted operating expenses decreased 9% to $8.8 million. As revenue grows and our mix shifts towards higher-margin consumables and software, we expect these trends to carry us towards an adjusted EBITDA neutrality by the end of 2027.

So I'll turn the call over right now to Mark Adamchak, our Chief Accounting Officer, to review our Q3 2026 financial highlights and discuss our expectations for Q4 and the full year of 2026. Mark?

Thanks, Al. Revenue for the third quarter of 2026 was $8.3 million, up 12% compared to Q3 2025. We sold 9,870 nanochannel array flow cells, up 18% compared to Q3 2025. We've been continuously investing in production and throughput. And as we reach the end of the year, we expect these constraints to ease.

Turning to profitability. Adjusted gross margin for the third quarter of 2026 was 48% compared to 46% in Q3 2025. Third quarter 2026 adjusted operating expense was $8.8 million compared to $9.7 million in Q3 2025. We ended the quarter with $8.7 million in cash, cash equivalents and available-for-sale securities, including $0.5 million subject to certain restrictions.

Turning to guidance. For the full year 2026, we are reiterating our revenue guidance of $31 million to $33 million, representing growth of 9% to 16% over 2025. Within that range, we expect to land near the midpoint. We are encouraged by the momentum across our business and excited for the path ahead of Bionano.

With that, I will turn the call back to the operator. Stephanie?

[Operator Instructions]. Our first question comes from Yi Chen of H.C. Wainwright.

This is [indiscernible] for Yi. Looking at the September framework of $50 million to $54 million in 2027 revenue and approximately breakeven adjusted EBITDA exiting Q4, does that remain in your operating plan? What are the largest contributions to that acceleration from the current run rate? And what are supported by customer implementation schedules versus like milestones still ahead?

Yes. Thanks for the question. So our main focus for '27 is going to be to bring this company to EBITDA neutral, so that we can move into 2028 in a highly profitable mode. That is our main focus. Driving that is going to be our controlled expenses and also very rapid top line growth.

So in September, when I spoke at the Wainwright conference, I presented a vision of what we might be in the future. And I want this to be a guideline for where this company and its underlying technology can be and what it can do as it transforms medicine. So there are some large customers that are starting to come online for us, and they will be part of the majority of our growth as well as some of the supply constraints that Mark had mentioned in our production, which has really kept us from meeting a very strong customer demand this year.

If I could follow on real quick. For the supply constraints, can you elaborate a little bit more on what remains to meet that time line once the backlog is cleared, will current capacity support the flow cells for your 2027 plan?

Yes. Yes, there's a long lead time for some of our most critical components and notably the silicon wafer that has all the nano channels. So yes, we've taken special effort to build up that supply and be able to essentially double our capacity that we have today.

And we'll do that about halfway through midyear next year that will more than meet the capacity for '27 that we're projecting and also most of '28. So we think we have that in good shape, and we think we'll be essentially free and clear of any back orders by the end of this year. That's our plan right now.

Our next question is from Michael Okunewitch from Maxim Group.

Congrats on the progress. You posted some quite strong growth in terms of the flow cell utilization. So I wanted to see if you could talk a little bit about what the main drivers are for that particular increase? And if that is at all tempered by some of those supply constraints that you're facing.

Glad to expand on that, Michael, and thanks for the question. What we all believe right now is the -- first of all, the very strong clinical evidence that's global in nature, backed up by the CPT coding and now MolDX is favorable determination for hematologic oncology. We think that's a large driver of this.

And we have several sites that have become major users, and we see some that are in queue to become also as large as some centers that we have. And I think it's mostly due to the fact they can offer the service and have a very good shot at getting paid for their services. So I think that's a huge part of it, Michael.

Appreciate that. And then also I wanted to congratulate you on the news with Sloan, a particularly exciting stuff. And I want to see if you could talk just a little bit about how Memorial Sloan Kettering plans to implement OGM through Bionano labs. Is this a pilot program? Or are they implementing it more broadly into their routine workflows?

That's a great question, and I'm really not prepared to answer that, but we can get back to you on that. So I think they received authorization to offer the service back right around the Wainwright conference time, early September. So as all these things, it takes a while to get going and then integrate into the clinical service and have the ordering physicians start to get used to and understand this new type of information that they are now privileged to see on these patients. So we've seen that adoption take a little bit of time, but at Sloan Kettering, I don't think it will take very long.

And one last one for me before I hop into the queue. I want to see if you could just provide a bit more color on what the customer profile looks like for Bionano labs versus actual internal adoption of OGM through a machine.

Well, our Bionano lab is -- it really exists to help us understand how our customers are experiencing our products. And while we do offer a commercial offering in the muscular dystrophy, we currently don't have any hematologic product, but that is part of our forward planning process that we're considering. So it's really -- that laboratory functions really as an in-house experience so that we can have real-time experiences that our customers have, which we can't always get.

All right. I appreciate your additional clarity and once again, congrats on all the progress.

Thank you. This does conclude the question-and-answer session for today. We thank you for your participation in today's conference, and this does conclude the program. You may now disconnect.

Thanks, Steph.

Thank you.

Good day, and welcome to the Bionano Second Quarter 2026 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Webb Campbell from Gilmartin Group. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to the Bionano Second Quarter 2026 Financial Results Conference Call. On the call today are Dr. Al Luderer, Chairman and Interim CEO of Bionano, and Mark Adamchak, Bionano's Vice President of Accounting and Principal Accounting Officer. After market closed today, Bionano issued a press release announcing its financial results for the second quarter of 2026. A copy of the release can be found on the Investor Relations page of the company's website.

Certain statements made during this conference call may be forward-looking statements. Actual results may differ materially from such statements due to several factors and risks, some of which are identified in Bionano's press release and Bionano's report filed with the SEC. These forward-looking statements are based upon information available to Bionano today, August 10, 2026, and the company assumes no obligation to update statements as circumstances change.

During our call, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliations of these measures to GAAP can be found on our press release, and slide deck. An audio recording and webcast replay of today's conference call will also be available online on the investor relations page of the company website.

With that, I will turn the call over to Al.

Well, thank you, Webb, and good afternoon, everyone. I'm pleased to be here with you all today to share our second quarter 2026 results. Bionano had a strong second quarter, and that strength can be directly attributed to increased adoption by our customers. Our results reflect a vote of confidence from our routine use customer community and the accelerating global adoption of optical genome mapping, or OGM. Importantly, the growth of our consumable sales this quarter was primarily driven by increased clinical adoption. We expect that adoption, together with increased utilization at existing and new clinical sites, to remain the foundation of our growth. Now, before I get into the quarter, I want to note an important addition to our team.

We're pleased to welcome back Dr. Alex Hastie as our Chief Scientific Officer. Alex was one of the original architects of our technology. He spent 14 years building Bionano's leadership in OGM, and he's widely regarded across our community as, and I quote, "Mr. Optical Genome Mapping." His return underscores our commitment to scientific leadership as we expand the commercial and clinical research applications of our platform.

I also wanted to provide a very brief update on the ongoing search for my replacement. I'm working in lockstep with the board to identify the best candidate to take Bionano into its next stage of growth. Until then, I remain solely committed to Bionano, our customers, employees, and our shareholders.

As a reminder, our focus remains on transforming pathology, the discipline that investigates the causes, developments, and effects of disease. Legacy analog workflows are tedious, slow, costly, and labor-intensive. We are spearheading a shift to streamlined digital workflows, built on technology and platform consolidation, automation, and the AI-driven software behind our products and solutions.

Today, I'll walk through the progress we're making against our strategy to transform pathology. I want to briefly recap the framework that continues to guide our execution. Beginning in September '24, we deliberately redirected our focus away from aggressive installed base expansion towards driving profitable growth with existing routine users. We are achieving this by being selective about new customer acquisition, prioritizing prospects most likely to become routine, high-volume users.

Four strategic pillars define how we have and will continue to execute against that framework: First, to support and sustain our installed base of routine OGM and VIA software users. Second, to increase OGM utilization by routine users by supporting menu expansion and improving ease of use with VIA and Ionic adoption. Third, to build the support needed for OGM reimbursement and inclusion in medical society guidelines and recommendations. And fourth, to improve profitability and scalability through lower costs, higher volumes, and continuous improvement in product quality.

Turning to our first and second pillars, which are focused on supporting our installed base and driving greater utilization of our products, Q2 2026 flow cells sold were up 27% year-over-year at a record 9,219 units. Demand continues to outpace our supply, although we are making progress working down our backlog. Removing flow cells tied to sales of new OGM systems in both periods, flow cells sold to existing customers were up 24% year-over-year in Q2. Simply put, our customers are running more samples, and much of that pull-through reflects increasing clinical adoption of OGM.

Now breaking down our revenue segments, consumable revenue was $4.3 million in Q2 '26, up 30% year-over-year. That growth came primarily from an increase in the number of flow cells sold consistent with the clinical adoption trend I just mentioned, the clearest evidence of our strategy in action. Software revenue was $1.4 million in Q2, down 16% year-over-year, reflecting timing delays in deployment from certain customers. Other revenue, which includes instruments and services, was $2.5 million in Q2 '26, up 38% year-over-year, led by higher instrument sales as new customers came onto the platform.

This ongoing shift towards a higher proportion of recurring consumable-led revenue reflects a healthier, more predictable business mix in our view and is directly aligned with our strategy. I'd also note that the international markets continue to be a key growth driver in the quarter, with international revenue now representing the majority of our total revenue. We attribute this to broadening clinical adoption at leading European institutions.

Regarding our second pillar, driving greater utilization of our products. We ended the quarter with 397 OGM systems installed worldwide, up 5% from 378 a year ago. At the same time, flow cells sold were up 20% -- 27% year-over-year at 9,219 units, a record for any quarter, even as demand continues to outpace what we can currently supply. Together, these 2 data points capture exactly what we're focused on, meaningfully deepening flow cell utilization within a robust footprint of OGM systems.

Expanding on the second pillar, increasing OGM utilization by supporting software adoption and menu expansion, we continue to receive very positive feedback on our software and compute upgrades, which enable customers to expand their menus and increase utilization. In some cases, doubling weekly cancer sample throughput without any hardware change. VIA's reach extends well beyond OGM. It remains the gold standard for CNV analysis on microarrays, and adoption among NGS and long-read sequencing labs continues to grow. These non-OGM VIA users represent both a durable software revenue stream and a natural entry point into broader Bionano adoption.

We also continue to develop and support our Ionic system, which represents a fundamentally different approach to nucleic acid purification. Rather than relying on the bead and column-based binding and washing steps that have defined the space for the last 2 decades, Ionic separates and concentrates DNA and RNA directly in solution. We are specifically expanding Ionic's capabilities to interface directly with sample preparation for OGM and long-read sequencing with the OGM expansion targeted for launch in Q4 2026. In our view, it will be an important contributor to incremental consumables revenue and deeper customer relationships, supporting the higher-margin recurring revenue mix at the center of our long-term growth strategy.

Now, regarding our third pillar, building support for OGM reimbursement and inclusion in medical society guidelines. The 2 Category I CPT codes that took effect earlier this year covering OGM in hematologic malignancies at $1,853.22 and OGM in constitutional genetic disorders at $1,263.53, now cover OGM's primary application areas and represent significant reimbursement infrastructure supporting routine adoption. What we are increasingly seeing this year is reimbursement infrastructure translating into real clinical adoption and utilization, which is of course the engine behind our consumable growth. This development continues to reduce barriers to adoption and pave the way for even more routine use of OGM across oncology and clinical genetic research communities globally.

On the publications and evidence front, momentum continues in the second quarter and the evidence base is increasingly clinical in nature. First, in May, we announced the largest OGM study of T-cell acute lymphoblastic leukemia, or T-ALL, to date, published in Modern Pathology and conducted by researchers at the University of Texas MD Anderson Cancer Center and Johns Hopkins University School of Medicine. Across 91 cases, OGM detected genomic abnormalities in 97.8% of cases compared to just 55% by conventional karyotyping, and delivered clinically relevant genomic information beyond karyotyping in approximately 70% of cases, all from a single workflow. T-ALL is an aggressive blood cancer where roughly half of cases remain unsolved by legacy methods, and this study demonstrates how well-suited OGM is to that challenge.

Second, we announced multiple 2026 publications describing the unique utility of OGM in reproductive health and prenatal genetic disorders, with 13 studies analyzing 730 subjects published to date, an important expansion of OGM's evidence base into a large new application area. Third, at the 2026 European Society of Human Genetics Conference, or ESHG, studies featuring OGM increased 67% year-over-year, with authorship spanning 17 countries, up from 12 in 2025, a strong signal of the global breadth of the OGM research community.

These studies join landmark multiple myeloma studies from Johns Hopkins and MD Anderson published in the American Journal of Hematology, which we highlighted last quarter and which demonstrated that OGM can significantly outperform traditional methods for detecting structural variations and chromosomal abnormalities. We believe this expanding, increasingly clinical body of evidence is the leading indicator of future adoption and utilization of OGM.

Regarding our fourth pillar, we're pleased to report progress on our goal to reach profitability. From a high-20% gross margin profile in 2023, we've steadily driven that figure higher over the past several years, reaching 53% in Q2 2026, our highest quarterly gross margin to date. We have reduced operating expenses with the same disciplined philosophy. As revenue scales and our mix continues to tilt towards higher-margin consumables and software, we expect these trends to carry us towards adjusted EBITDA breakeven over time, a key milestone we're focused on as we build towards sustainable profitability.

Additionally, I'm happy to share that in the second quarter we fully retired our outstanding senior secured convertible debt, further simplifying our financial profile.

I'll now turn the call over to Mark Adamchak, our Principal Accounting Officer, to review our Q2 2026 financial highlights and discuss our expectations for Q3 and the full year 2026. Mark?

Thanks, Al. Revenue for the second quarter of 2026 was $8.2 million, up 21% compared to Q2 2025, and above our guidance range of $7.5 million to $7.8 million. We sold 9,219 nanochannel array flow cells, up 27% compared to Q2 2025, despite ongoing supply constraints as consumables demand continues to outpace our current manufacturing capacity.

Turning to profitability, adjusted gross margin for the second quarter of 2026 was 53%, compared to 52% in Q2 2025, reflecting continued operational efficiencies under our strategy. Second quarter 2026 adjusted operating expense was $8.7 million compared to $8.8 million in Q2 2025. We ended the quarter with $10.4 million in cash, cash equivalents, and available-for-sale securities, including a half million subject to certain restrictions. Based on factors described in our 10-Q, we expect our cash runway to extend into at least the first quarter of 2027. We also note that during the second quarter we completed the full retirement of our outstanding senior secured convertible debt, which marks a meaningful balance sheet milestone that further simplifies our financial profile.

Building on this progress, we expect revenue to grow throughout the year as we continue executing on our plan. For the full year 2026, we are raising the low end of our revenue guidance range to $31 million to $33 million, representing growth of 9% to 16% over 2025. For Q3 2026, we are initiating guidance of $8.2 million to $8.6 million, representing 11% to 16% growth over Q3 2025. We are very excited about the work and the journey ahead of us at Bionano.

And with that, I'll turn the call back to the operator for Q&A.

[Operator Instructions] And our first question will be coming from the line of Yi Chen of H.C. Wainwright & Co.

You mentioned that you are raising the lower end of the revenue guidance for 2026. Could you tell us why the higher end is not raised as well?

Thank you for the question. Yes, we're very much constrained in terms of our flow cell manufacturing capacity, and as we mentioned in the call earlier, we are in back order and hope to remedy that by the end or at least the middle to the end of the fourth quarter coming up. We're reluctant to raise the top line until we know for certain that our manufacturing can keep up with demand.

I see. And your guidance for the third quarter is essentially, could be essentially flat compared to the second quarter or maybe a small sequential growth while your second quarter demonstrated a pretty robust growth -- sequential growth over the first quarter. So is there a seasonality involved or is it also this issue related to manufacturing?

It's actually caused by several very large orders that are very close to the end of the third quarter and we thought they were at risk. So we were conservative in our outlook towards whether we would close them this quarter or next quarter.

Okay, got it. And lastly, could you maybe give us some additional color regarding whether the current growth observed in the second quarter is primarily driven by increased utilization within the existing clients or new clients that acquired during the quarter?

It's -- the majority of our growth is coming from existing clients. It's very strong demand with especially our clinical users. So that's where the majority of the growth is coming from.

And do you expect the same for the coming quarters, that the majority of growth will be coming from existing clients?

Yes, I believe that will be the case. We have -- there's tremendous demand and we're looking forward to meeting that demand.

And our next question will be coming from the line of Jason McCarthy of Maxim Group.

This is Michael Okunewitch on the line. So I guess just to start things off, I wanted to see if any of the growth you've seen in consumable unit place shipments or in terms of revenue has been driven by the new pricing on the CPT code in hematology, or if we're still expecting that to take some more time to materialize?

That's a great question. And it's -- right now, we think it is starting to drive the sales. And only time will tell if that's factual or not. But it's -- we believe it's true here in the States. We also see that trend occurring in Europe where different regions are starting to gain coverage. So, it's a big deal.

All right. And then in terms of the constitutional genetics application, are there any efforts ongoing to get reimbursement to reach a similar level to heme? Because I believe that's still the same level that heme used to be at before you got the improved CPT code pricing.

Yes, that's correct. There was some effort, I believe, to alter that, but I don't think there's been any progress with regards to that.

All right, and then just one last one, a little bit of a just financial related question. It does seem like looking at the sequential growth, the number of consumables sold during the quarter seems to have quite significantly outpaced the change in consumables revenue, at least on a sequential basis between the first quarter and second quarter. So could you just help provide a little bit of context on what's driving that change?

Mark, you want to take a shot at that?

Yes, I mean, you have to remember that we have a substantial portion of our customers that are on a reagent rental. And so, you know, it's not a 1:1 ratio of flow cells sold to revenue dollars in. A portion of that gets deferred and amortized over the life of that lease. So that's primarily the difference between the growth.

All right. Well, thank you very much. I appreciate the additional color, and congrats on the great progress you guys are making.

Thank you for your questions, Mike.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Good day, and welcome to the Bionano First Quarter 2026 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Webb Campbell from Gilmartin Group. Please go ahead.

Thank you, Liz, and good afternoon, everyone. Welcome to the Bionano First Quarter 2026 Financial Results Conference Call. On the call today is Dr. Al Luderer, Chairman and Interim CEO of Bionano; and Mark Adamchak, Bionano's Vice President of Accounting and Principal Accounting Officer. After market closed today, Bionano issued a press release announcing its financial results for the first quarter 2026. A copy of the release can be found on the Investor Relations page of the company's website.

Certain statements made during this conference call may be forward-looking statements. Actual results may differ materially from such statements due to several factors and risks, some of which are identified in Bionano's press release and Bionano's reports filed with the SEC. These forward-looking statements are based on information available to Bionano today, May 13, 2026, and the company assumes no obligation to update statements as circumstances change.

During our call, we may refer to certain adjusted financial measures, which we believe provide useful information for investors. Reconciliations of these measures to GAAP can be found in our press release and slide deck. An audio recording and webcast replay for today's conference call will also be available online on the Investor Relations page of the company's website.

With that, I will turn the call over to Al.

Thank you, Webb, and good afternoon, everyone. I'm pleased to be here with you all today. Now before I share an update on our first quarter, I want to address the recent leadership transition. As announced last week, I'm stepping in as Interim CEO and will maintain my role as Chairman. I would like to thank Erik for his commitment to Bionano over the last decade, bringing this company and our technology from concept to broad validation. I look forward to working with him as he maintains an advisory role to ensure a seamless transition.

Now as I step into the CEO role, my highest priority is to sustain business continuity to ensure no disruption to our valued customers and shareholders. Simultaneously, I'll be working closely with my fellow Board members to identify the best candidate to lead this organization over the long term, transforming Bionano from a company focused on R&D to one focused on commercialization and broad product adoption over time.

Our focus remains on transforming pathology, the discipline that investigates the causes, developments and effects of disease from tedious, slow, costly and labor-intensive analog workflows in the past towards streamlined workflows of digital future designed by technology and platform consolidation, automation and powerful AI-driven software that make up our products and solutions. Today, I will take some time to touch on the progress we're making against our strategy to transform pathology.

I want to briefly recap the framework that continues to guide our execution. Beginning in September 2024, we deliberately redirected our focus away from aggressive installed base expansion toward driving profitable growth with existing routine users while being selective about new customer acquisition, placing an emphasis on adding new routine users. Four strategic pillars define how we have and how we will continue to execute against that framework.

First, to support and sustain our installed base of routine OGM and VIA software users.

Second, to increase OGM utilization by routine users by supporting menu expansion and improving ease of use with VIA and Ionic adoption.

Third, to build the support needed for OGM reimbursement and inclusion in medical society guidelines and recommendations.

And fourth, to improve profitability, scalability, et cetera, through lower costs, higher volumes and continuous improvement in product quality.

Now turning to our first and second pillars, which are focused on supporting our installed base and driving greater utilization of our products. Q1 2026 flow cells sold were up 17% year-over-year at 8,178 units, which is a record unit sales volume for any Q1 that we have reported. Removing flow cells tied to sales of new OGM systems in both periods, flow cells sold to existing customers were up 21% year-over-year in Q1.

Recall that we entered the first quarter with some constraints on flow cell production, but the supply is starting to catch up. We saw improvement in the first quarter and expect to see continued improvement in flow cell production for the remainder of 2026.

Now breaking down our revenue segments. Consumable revenue was up to $3.9 million in Q1, up 20% year-over-year. Our strong growth in consumables revenue is evidence of our strategy in action as we prioritize routine users and focus on OGM. Software revenue was $1.2 million in quarter 1, down 40% year-over-year as we had a very large software sale in the prior year that is expected to supply the user for their needs in both 2025 and 2026.

Other revenue was $1.6 million in quarter 1, up 36% year-over-year. We believe this ongoing shift towards higher proportion of recurring revenues reflects a healthier, more predictable business mix and is directly aligned with our strategy.

Now regarding our second pillar, increasing OGM utilization by supporting software adoption and menu expansion. We continue to receive very positive feedback on our recent software and compute upgrades. These upgrades focus on enabling customers to expand their menus and increase utilization, in some cases, doubling weekly cancer sample throughput without any hardware change.

VIA's reach extends well beyond OGM. It remains the gold standard for CNV analysis on microarrays and adoption amongst NGS and long-read sequencing labs continues to grow. These non-OGM VIA users represent both a durable software revenue stream and a natural entry point into broader Bionano adoption. We also continued development in support of our Ionic system, which delivers high-purity DNA and RNA for OGM and NGS workflow at scale.

Now regarding our third pillar, building support for OGM reimbursement and inclusion in medical society guidelines. I'm pleased to highlight 2 significant reimbursement milestones that both took effect in the first quarter.

First, the 2026 clinical lab fee schedule reflected a 47% increase in the payment determination for the Category 1 CPT code for OGM and hematologic malignancies. The reconsidered payment determination is now $1,853.22, up from $1,263.53. This increase reflects meaningful advocacy work by our customers and the community, and it substantially improves the reimbursement economics for labs running OGM for cancer research.

Second, a new Category 1 CPT code for OGM in constitutional genetic disorders established by the American Medical Association in 2025, received a final payment determination of $1,263.53, also effective January 1, 2026. This code covers OGM use in evaluation of constitutional chromosome abnormalities, interrogation of structural and copy number variants.

Together, these 2 codes now cover OGM's primary application areas and represent significant reimbursement infrastructure supporting routine adoption. The pricing of the constitutional code at $1,600 -- $2,663.53 (sic) [ $1,263.53 ] higher than what microarray's costs are priced at is consistent with the needs of laboratories seeking to move forward from their legacy methods. We believe these CPT codes reduce barriers to adoption and may pave the way for even more routine use of OGM across oncology and in clinical genetic research communities globally.

On the publications front, momentum continues. We announced that 28 publications describing the utility of OGM for analysis of rare diseases were released in Q1 2026, representing an approximately 56% increase over Q1 2025. The total numbers of samples analyzed in those studies, 78, represents a 225% increase compared to 2025. There were 1,991 genomes published in the first quarter of 2026, representing a 158% year-over-year increase over Q1 2025. These publications span a broad range of conditions, including neurodevelopmental, neuromuscular, neurodegenerative, immunological and malformation syndrome and comes from institutions across Europe, Asia, South America and the United States.

I want to take a few minutes to highlight a few recent publications and presentations that really stand out. First, in April 2026, a landmark study led by scientists from Johns Hopkins University School of Medicine and The University of Texas MD Anderson Cancer Center was published in the American Journal of Hematology, demonstrating that OGM can significantly outperform traditional analytic methods for detection of structural variation and chromosomal abnormalities in multiple myeloma. This was the largest published multiple myeloma cohort to-date with 211 samples.

OGM identified relevant chromosomal abnormalities in 92% of patients previously found to be normal by karyotyping and successfully resolved 82% of multiple myeloma samples that had previously failed in karyotype altogether. OGM also detected additional pathogenic structural abnormalities not identified by karyotyping or FISH in approximately 30% of subjects. The authors recommended revising laboratory workflows to include OGM and NGS, which we believe has the potential to drive growth and adoption and utilization of OGM in this large and very challenging indication.

Second, a publication from the Sanford Burnham Prebys Medical Discovery Institute described the application of OGM to detect genomic alterations introduced by different gene editing technologies, including transposons, lentiviral transduction and CRISPR-Cas9 mediated locus insertion. This study demonstrated that OGM can be a valuable quality control tool for cell line genome integrity in preclinical and clinical development of gene editing therapies, reinforcing OGM's growing role in the pharmaceutical industry and cell and gene therapy development.

Third, at the 2026 American College of Medical Genetics and Genomics, or ACMG, Annual Meeting held this past March in Baltimore, Bionano had 12 studies presented, representing a twofold increase over 2025 and spanning cancer genomics, hematologic malignancies, constitutional genetic disorders, rare diseases and reproductive disorders.

And finally, last but not least, Bionano Symposium 2026 held in late February brought together over 1,250 registrants from 73 countries and featured 35 outside speakers giving 33 presentations and 50 posters across 4 days. A defining theme was OGM at scale. Dr. Alexander Hoischen from Radboud University Medical Center described plans to reach 3,000 samples per year through full automation, while Dr. Adam Smith of Labcorp demonstrated that a scaled Stratus workflow can process 10,000 cancer samples per year at less than 1/8 the capital investment of a comparable long-read sequencing platform. Symposium 2026 reinforced that OGM is moving from early adoption into scale.

Now regarding our fourth pillar, the numbers speak for themselves on the profitability front. From a high 20% gross margin profile in 2023, we have systematically driven that figure higher over the past several years, reaching 49% in Q1 2026. Operating expenses have followed a similar trajectory of disciplined reduction. As revenue scales and our mix continues to tilt towards higher-margin consumables and software, we expect these trends to eventually carry us towards cash flow breakeven.

I'll now turn the call over to Mark Adamchak, our Principal Accounting Officer, to review our Q1 2026 financial highlights and provide and discuss our expectations for Q2 and the full year 2026. Mark?

Thanks, Al. Revenue for the first quarter of 2026 was $6.7 million, up 4% compared to Q1 2025 and at the high end of our guidance range of $6.5 million to $6.7 million. As we noted on our Q4 2025 call, we expected Q1 to be the lightest quarter of the year, consistent with the typical seasonality of our business. We sold 8,178 nanochannel array flow cells, up 17% compared to Q1 2025. This growth was achieved despite an ongoing supply constraint, which we continue to see ease.

Turning to profitability. Adjusted gross margin for the first quarter of 2026 was 49% compared to 46% in Q1 2025 and reflecting continued operational efficiencies under our strategy. Adjusted operating expense for the first quarter was $9.1 million compared to $8.5 million in Q1 2025. We ended the quarter with $24.7 million in cash, cash equivalents and available-for-sale securities, including $10.3 million subject to certain restrictions. Based on factors described in our 10-K, we expect our cash runway to extend into 2027.

We also expect to fully retire our outstanding senior secured convertible debt this month, which marks a meaningful balance sheet milestone that further simplifies our financial profile.

Building on this progress, we expect revenue to grow throughout the year as we continue executing on our plan. For the full year 2026, we are reaffirming revenue guidance of $30 million to $33 million, representing growth of 5% to 16% over 2025. For Q2 2026, we are initiating guidance of $7.5 million to $7.8 million, representing 12% to 16% growth over Q2 2025. We are very excited about the work and the journey ahead of us at Bionano.

With that, I will turn the call back over to Al for closing remarks.

Thanks, Mark. So Q1 was strong, very strong start to the year, and I'm encouraged by the momentum we're carrying into the rest of 2026. We have a clear strategy, a focused team and the technology the market is increasingly embracing. I look forward to updating you on our continued progress.

And with that, let's open it up for questions.

[Operator Instructions] Our first question comes from Yi Chen with H.C. Wainwright.

Could you provide some comment regarding, if you expect the company to achieve operating cash flow breakeven either late this year or sometime in 2027?

Thanks for the question. Let me ask Mark to comment on that. Mark?

Yes. Thanks Yi. No, we do not expect to reach cash flow breakeven by the end of 2026. And we are taking the necessary steps that we can, to reduce that burn as much as possible by Q4 of 2027, but we're not providing guidance as to whether or not we can achieve that.

Okay. And do you expect any additional catalysts that could potentially occur either later this year or in 2027 that could help the top line growth or improve gross margin or further reduce operating expenses?

Well, I think there are several catalysts this year. The first catalyst, which actually was really planted in the first quarter, which is the CPT code and the strong reimbursement. So I think we are starting to see some impact in our dedicated installed base. It's a little hard to measure right now, but I think that's part of the reason we are experiencing a very, very strong demand. So we're pleased about that.

The second one is, certainly, I think from my point of view, the elimination of our debt is a very strong step forward in terms of controlling our destiny and our future. Now that doesn't mean we wouldn't take other debt for certain applications if it was called for and timely. But -- so I think that's a big deal.

And I think those are the 2 major things that we are pushing. And we have several publications that are coming out that will be highly complementary and also expansive on what's been shown by Hopkins and MD Anderson. So we're getting great adoption out there. So I think we're going to try to make it very public about how people feel about this. And the neatest thing about this -- and I've been a director of this company since 2011. So I have lived through this.

And in the early days, it was our clinical medical executives who were -- who are identifying what could be done and helping people to identify how to do it. Today, it's all of our users that are out there, and they are setting the standard and the path. So they are now leading. And that's a huge transition, transformation for this company.

[Operator Instructions] That will conclude today's question-and-answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and welcome to the Bionano Fourth Quarter and Full Year 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Webb Campbell from Gilmartin Group. Please go ahead.

Thank you, Carmen, and good afternoon, everyone. Welcome to Bionano's Fourth Quarter and Full Year 2025 Financial Results Conference Call. On the call today is Dr. Erik Holmlin, CEO and Principal Financial Officer of Bionano and Mark Adamchak, Bionano's Vice President of Accounting and Principal Accounting Officer.

After market closed today, Bionano issued a press release announcing its financial results for the fourth quarter and full year 2025. A copy of the press release can be found on the Investor Relations page of the company's websites.

Certain statements made during this conference call may be forward-looking statements. Actual results may differ materially from such statements due to several factors and risks, some of which are identified in Bionano's press release and Bionano's report filed with the SEC.

These forward-looking statements are based on information available to Bionano today, March 23, 2026, and the company assumes no obligation to update statements as circumstances change. During our call, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliations of these measures to GAAP can be found in our press release and slide deck. An audio recording and webcast replay of today's conference call will also be available online on the Investor Relations page of the company's website.

With that, I will turn the call over to Erik.

Thank you, Webb, and good afternoon, everyone. I'm excited to share our Fourth Quarter and Full Year 2025 results with you today as well as to provide you with our expectations for 2026.

I want to begin, however, with the context of the broader space we're aiming to impact, namely pathology, which is the discipline that investigates the causes, developments and effects of disease. Our products and solutions are focused on transforming pathology from tedious, slow, costly and labor-intense analog workflows of the past towards streamlined workflows of a digital future defined by technology and platform consolidation, automation and powerful AI-driven software.

Our work in 2025, including the hundreds of publications and presentations by our users demonstrated meaningful progress towards this goal and the significant value represented by this opportunity. As part of today's call, I want to take time to review the strategy we began implementing in September of 2024. Our progress in 2025 and summarize key takeaways from a deep dive into our customer base revealing the composition of our most profitable customer profile. First, however, I want to ask Mark Adamchak our Principal Accounting Officer to review our Q4 and 2025 financial highlights. Mark?

Thanks, Erik. Revenue for the fourth quarter of 2025 was $8 million, which is down 3% from $8.2 million in Q4 2024, but at the high end of our preannounced range of $7.8 million to $8 million. We sold 7,554 nanochannel array Flowcells in Q4, which was down 6% year-over-year, but it's worth noting that late in Q4, our manufacturing partner that makes the silicon wafers for our chip consumables experience delays.

As a result, supply was constrained against higher consumable demand. We entered 2026 with a healthy backlog of consumables demand and that we expect to realize in the coming quarters as these constraints ease. For the full year 2025 revenue was $28.5 million, down 7% from $30.8 million in 2024.

After adjusting for $1.7 million in discontinued clinical services in 2024, core revenue was down 2%. We sold 30,171 Flowcells in 2025, down just 0.4% year-over-year. We also installed 9 OGM systems in Q4 and 32 for full year 2025, exceeding our original guidance of 15 to 20 installations in the year.

Turning to profitability. Non-GAAP gross margin for the fourth quarter of 2025 was 43%, up from 42% a year ago. For the full year, non-GAAP gross margin was 47%, up from 35% in the full year 2024, an improvement of 1,200 basis points year-over-year despite lower revenue. This reflects the efficiencies we are driving in our business under our new strategy.

Fourth quarter 2025 non-GAAP operating expense was $9.7 million, down 9% year-over-year. For the full year, non-GAAP operating expense was $36.6 million, down 47% from $68.9 million in 2024. Importantly, since Q2 2023, we have removed approximately $100 million of annualized non-GAAP operating expense and reduced head count by over 300 people.

The transformation of our cost structure is clearly evident in these results. We ended the year with $29.6 million in cash, cash equivalents and available for sale securities, including $10.3 million subject to certain restrictions. Based on factors described in our 10-K, we expect our cash run rate to extend into 2027. I'd also note that our senior secured convertible debt is expected to be fully retired in May 2026, which will mark a meaningful balance sheet milestone that will further simplify our financial profile.

With that, I'll turn it back over to Erik to review our strategic progress and achievements in 2025 and finish by providing financial guidance for 2026. Erik?

Thanks, Mark. That was an excellent job in your first time participating in one of our calls here. It's great to have you. In response to the challenging backdrop for tools and diagnostic companies that has persisted for some time now, we made a strategic shift that started in September of 2024 and entailed going away from aggressively expanding our installed base toward focusing on profitable growth from high-volume users and selective customer acquisition. .

We established four strategic pillars to anchor this execution. First is to support and sustain the installed base of routine, OGM and VIA software users. Second, to increase the utilization of optical genome mapping by these routine users by supporting menu expansion and improving ease of use with VIA software and our Ionic system, which automates isolation of nucleic acids.

Third is to build the support needed for optical genome mapping reimbursement and inclusion into medical society guidelines and recommendations. And fourth is to improve profitability and scalability through lower cost, higher volumes and continuous improvement in product quality.

Starting with this first and second pillars, tied to enabling our customers to use products more which will in turn result in higher consumable sales, while fourth quarter Flowcells were down 7% at 7,554 and full year Flowcells sold were essentially flat at 30,171. 2025 was certainly a transitional year where we faced uncertainty as to how stable the customer base would be during this strategic shift.

We're pleased to see stability and consistency in the number of consumables that were purchased. If we remove Flowcells tied to sales of new OGM systems in both periods, existing Flowcell customers -- existing sales of Flowcells to customers declined 4% in the fourth quarter, but grew 5% for the full year.

Keep in mind that the consumable supply was constrained in the fourth quarter, which muted some of that growth. Taken together, consumables and software revenue decreased by 1% to $4.8 million in Q4 driven by a 22% decline in software revenue and that actually offset 8% growth in consumables.

The year-over-year decline in software revenue is a result of a handful of orders that were actually pulled forward into prior quarters. And so if we look and see that software grew 7% for the full year from 19 -- consumables and software together, that is grew for the full year from $19 million to $20.4 million, which represents 7% growth and as a share of total revenue increased from 62% in 2024 to 71% in 2025. And we believe this emphasis on consumables and software is a healthier, more predictable revenue profile that is also more profitable.

Now I want to talk a little bit about the composition of our installed base. And this is something that we brought up on calls over the course of 2025. And I want to focus in on the customer profile that we've identified as the target for future growth. Throughout 2025, we focused on a subset of customers, so-called routine use customers. Those are customers who we believe have the greatest potential to purchase higher average volumes of OGM consumables.

We also maintain a high level of support for our Ionic system users and our VIA software users who use VIA software for non-OGM applications. Now our geographic focus has also narrowed to include the United States, Canada, most of Western Europe and Israel although we have the help of excellent commercial partners who sell and support OGM outside of these regions.

Now looking across the 321 customers that have a total of 387 OGM systems installed as of December 31, 2025. Routine use customers comprise about 130 or 40% of them, and they collectively operate about 175 systems or 45% of the global installed base. Routine use customers, by definition, have well-defined applications for OGM and a steady flow of samples coming into the lab for analysis and tend to have institutionalized funding for OGM, meaning they are not solely dependent upon raising grant funding for each individual project although grants do support these sites.

Despite accounting for less than half of OGM -- total OGM customers, these routine users actually drive the consumables business. In 2025, they accounted for about 83% of OGM consumables revenue. The average revenue per routine use customer in 2025 was about $89,000 or double the average per customer across the entire global installed base.

Currently, there are about 60 routine use customers that have validated their OGM protocol. And in 2025, those customers accounted for about 56% of total consumables revenue and 69% of the consumables revenue coming from routine users. Their average consumables revenue per year is $131,000 per customer.

We also believe that there are about 55 routine use customers who intend to validate an OGM protocol in the future and about 15 who use OGM routinely, but do not intend to validate. Going forward, we see the number of routine use customers increasing as new customer acquisition will focus on this customer type almost exclusively. We also see average consumable revenue per routine use site increasing as they expand their menus to include new applications and as others validate their protocols and begin offering their products commercially.

Regarding our second pillar, we can help routine use customers in a variety of ways by including techniques and tools that enhance their ease of use with products like VIA software and our Ionic system for automated nucleic acid isolation. In 2025, we made great progress to integrate VIA into customer workflows and upgrade our software and compute platforms to make analysis of OGM, microarray and next-generation sequencing data faster, easier and more accurate.

On this front, in 2025, we commenced a broad commercial release of our software and compute upgrades in the fourth quarter VIA 7.2 extends the AI-driven OGM workflow from hematologic malignancies into constitutional genetic disorders, giving labs the same automated curation and report capabilities that have accelerated heme malignancy workflows. Solve 3.8.3 expands the structural variation control database and improves detection accuracy while the Stratys Compute upgrade using advanced GPUs, doubles weekly cancer sample throughput without any hardware change. VIA reach extends beyond OGM, it's the gold standard for a copy number variation analysis in microarrays and is gaining traction with next-generation sequencing and even long read sequencing users.

These non-OGM VIA customers represent a meaningful software revenue stream and a natural on-ramp to broader Bionano adoption at these customer sites. Now the Ionic system continues to expand, delivering high-purity DNA and RNA for both NGS workflows and, of course, high purity ultra-high molecular weight DNA for OGM workflows at scale.

Now to build support for reimbursement and guideline recommendations, we're pleased to see incredible traction across the OGM community with publications that can support reimbursement decisions, professional society guidelines and new customer adoption. The fourth quarter of 2025 was a record quarter for OGM publications, 136 new peer-reviewed publications up from 25% year-over-year, up 25% year-over-year. 2025 also saw approximately 450 publications in total, up from 359 in 2024.

And the total number of publications exhibits a compound annual growth rate of about 28% since 2020. In addition, the community has published roughly 1,190 human clinical research genomes in the fourth quarter of 2025 alone, which brings the cumulative total to nearly 12,700, up from fewer than 500 in 2021 and 4,500 added in 2025 alone.

And that growth reflects a compound annual growth rate of about 30% since 2021. We believe these publications are an excellent leading indicator for the growing acceptance and future adoption and utilization of Bionano products and solutions.

Now thanks to all of this progress. Reimbursement improved significantly in 2025 with the establishment of a second Category 1 CPT code for OGM, this one covering OGM use in constitutional genetic disorders. The final price determination was $1,263.53, and that appears on the 2026 clinical lab fee schedule.

In addition, the 2026 CLFS reflects a 47% increase in the payment determination for the Category 1 CPT code used for OGM in hematologic malignancies. That's now priced at $1,853.22, which is up from $1,263.53. Taken together, these two codes cover OGMs current primary application areas and represent key infrastructure that's now in place. We are also seeing OGM consortia from all over the globe coming together, these regional user groups help with things like access to reimbursement, influencing local guidelines which together facilitate menu expansion and overall support the entire community of OGM users along their journey.

We believe this validation that -- this is a validation that OGM is really taking off, and we are gaining this critical mass that is so important where the community is becoming the advocate versus the company which has historically been the case.

Regarding our final strategic pillar of improving profitability and scalability, we continue to make progress in 2025, highlighted by the non-GAAP gross margin expansion we mentioned earlier. Our non-GAAP gross margins have now expanded from 22% in the first quarter of 2023 to 43% in the fourth quarter of 2025. And while quarterly non-GAAP operating expenses fell from roughly $34 million to now under $10 million over that same period.

Going forward, we expect margin expansion in line with revenue as volumes grow and product mix shifts towards consumables, and this is going to help us manage toward important financial milestones such as EBITDA breakeven.

Finally, I want to highlight the excellent efforts from our team to host Bionano Symposium 2026. This event is held in late February, and this year, we had over 1,250 registrants coming from 73 countries around the world. The content featured 35 outside speakers presenting 33 presentations, and the community contributed 50 posters to our poster hall.

The event itself lasted four days -- and among the many excellent presentations, four reflected key themes that suggest growth opportunities for OGM going forward. Dr. Agnes Dau dig non from CHU de Lille described how the French optical genome mapping group or FrOGG is acting as a network and supportive implementation of OGM across 29 French-speaking laboratories in France, Canada, Switzerland and Belgium.

Dr. Ying Zou from Johns Hopkins University School of Medicine presented the largest OGM data set in sarcomas, revealing complex abnormalities and novel biomarkers in karyotypically normal cases. These sarcomas represent an expansion of sample type from the blood and bone marrow aspirates that are commonly used with OGM today.

There were two speakers who spoke to an incredibly important theme in Symposium 2026, which is OGM at scale. Dr. Alexander Hoischen, from Radboud University Medical Center in the Netherlands, described fully automating ultra-high molecular weight DNA isolation and labeling for OGM and their plans to ramp to processing 3,000 samples per year, up from just 500 in 2025.

Radboud now has three Stratys systems and two Saphyr systems, making them the lab with the most OGM capacity in the world aside from Bionano's of course. And Dr. Adam Smith of Labcorp presented a rigorous comparison showing that a scaled Stratys workflow can process up to 10,000 cancer samples per year versus approximately 240 for a similar high throughput long-read sequencing platform.

And the cost of OGM is less than 1/8 of the initial capital investment for processing 1,000 long-read sequencing samples per year. We believe OGM is moving from early adoption into operation at scale and academic networks like the FrOGG, academic medical centers like Johns Hopkins and Radboud University Medical Center and national reference laboratory institutions like Labcorp are building the operational and use cases for it.

All of this progress and support gives me confidence and a strong outlook for the full year 2026. Therefore, we are initiating revenue guidance of $30 million to $33 million, representing growth of 5% to 16% over 2025 and -- and for this first quarter of 2026, we are initiating revenue guidance of $6.5 million to $6.7 million, representing flat to 3% growth over 2025. As our Q1 expectations imply we do expect revenues to grow throughout the year, consistent with the seasonality common in our business as we continue executing on our mission to increase the use of our differentiated capabilities among our valued customers. We're very excited about this work and the journey ahead of us at Bionano.

And so with that, I would like to open the line now for questions. Carmen?

[Operator Instructions] We have a question from the line of Yi Chen with H.C. Wainwright.

Could you give us any color on what your expectations regarding how many new OGM systems could be installed during 2026?

Hi Yi, thank you for joining and you're asking an important question. I think that we have expectations which are comparable to what we shipped last year, we're not really providing any guidance on the number because as you can see, we significantly actually overperform guidance last year.

And so we want to just stay flexible about the new systems that are being installed, but it's reasonable that we would have comparable year this year to what we did last year.

Got it. And also, the reported number of nanochannels array Flowcells sold in 2025 slightly below that number in 2024, while you restored 32 new OGM systems and brought back 16 during the year. So how should we look at the nano. I mean, how should we expect the number of nanochannel Flowcells to be sold this year. Do you expect that to be relatively flat as well? .

Yes. I mean so no, the answer is no. I would say that when you look at the revenue growth that we're forecasting that revenue growth is going to be driven by new systems, of course, and consumables at existing customers. And so I think I would expect the consumables volume range to likely track with the revenue growth, which is a wide range. But -- that's our expectation. And we were flat year-over-year on total consumables volume.

When we look at what routine users did, we do see that routine users grew 2025 over 2024. And keep in mind that we were constrained with supply at the end of the year. It's nothing that's particularly concerning. It's a supply constraint that will I think work its way out over the course of the next couple of quarters. But if we weren't up against that supply constraint, we would have had additional units growth.

Okay. Okay. And your -- the guidance for 2026, you provided $30 million to $33 million, which translates to approximately 5% to 16% top line growth. Do you need to -- I mean, how many nanochannel or new OGM systems you need to sell to achieve that level of growth? Is that -- is there any catalyst that you expect to occur in 2026 in order to achieve that level of top line growth.

Yes. I mean I think that -- so again, we're not going to put a number out there of systems. And I think really the reason is that we want to keep the focus on the productivity of the the routine users. And we'll be updating on some of the dynamics of that group over the year, right? So if you look at total number of customers at the end of the year, 321, total systems 387, 32 systems shipped in the year. It's really about these 130 or so routine use customers, 60 of which have validated an OGM protocol and roughly 55 are intending to do that at some point in the future.

So how can we take that 55 and convert them over to the validated group and then how can we expand revenues amongst the validated group. But that's where we expect the growth to come from. And as long as we kind of repeat on a year-over-year basis, some of the same dynamics will hit these numbers.

From a catalyst perspective, a big catalyst is the increase in the price determination for the hematologic malignancy CPT code 81195, 47% increase, $1200 to $1,800. That is a big driver. So that becomes -- it became effective January 1, 2026. And so we have seen the positive effects just of the originally priced code, and we expect this higher price to even accelerate adoption and utilization more. That's a major catalyst.

Thank you. And this concludes our Q&A session. I will pass it back to Erik for final comments.

Okay. Well, thank you, Carmen, and thank you, everybody, for joining. And we look forward to updating folks on our progress in the first quarter of 2026 in the not-too-distant future. Thank you very much.

[ Thank you ] for participating, and you may now disconnect.

Good day, and welcome to the Bionano Third Quarter 2025 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Kelly Gura from Investor Relations. Please go ahead.

Thank you, Didi, and good afternoon, everyone. Welcome to the Bionano Third Quarter 2025 Financial Results Conference Call. Leading the call today is Dr. Erik Holmlin, CEO and Principal Financial Officer of Bionano, and he is joined by Mark Adamchak, Bionano's Vice President of Accounting and Principal Accounting Officer. After market closed today, Bionano issued a press release announcing its financial results for the third quarter of 2025. A copy of the release can be found on the Investor Relations page of the company's website.

Certain statements made during this conference call may be forward-looking statements. Actual results may differ materially from such statements due to several factors and risks, some of which are identified in Bionano's press release and Bionano's reports filed with the SEC. These forward-looking statements are based on information available to Bionano today, November 13, 2025, and the company assumes no obligation to update statements as circumstances change.

During our call, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliation of these measures to GAAP can be found in our press release and slide deck.

An audio recording and webcast replay for today's conference call will also be available online on the company's Investor Relations page.

With that, I will turn the call over to Erik.

Thank you, Kelly, and good afternoon, everyone. I'm excited to update you all on the third quarter results and key highlights, as well as provide an update on our expectations for the remainder of the year.

At Bionano, our focus is on transforming pathology, which is the medical discipline that investigates disease, including its causes, developments and effects. This transformation is from pathology's analog past to a digital future. Our digital pathology solutions include optical genome mapping systems, the Ionic system for nucleic acid isolation and our VIA software. These solutions address significant unmet needs in cytogenetics and molecular pathology through simplification of workflows.

Over the last year, we have taken decisive steps to transform our business model away from one based in aggressively growing the installed base toward a model that's driving utilization of our solutions within a subset of our existing OGM and VIA software user base, we call this subset of users our routine users. These routine users are characterized by having an established flow of samples coming into their labs. And therefore, we believe they can generate significant consumables and software revenues and will drive most of our revenue growth in the near-term.

To succeed with this strategy, we're executing against 4 strategic pillars. First, we're focused on supporting and sustaining our installed base of routine OGM and VIA software users. Second, we are aiming to drive utilization through the adoption of software across the routine users of OGM. And that way, we can facilitate their menu expansion. Third, we're building support needed for optical genome mapping reimbursement and inclusion in medical society guidelines, recommendations and different schedules for reimbursement. Fourth, we intend to improve profitability and scalability with lower costs and higher volumes. We believe our performance in the third quarter and year-to-date validates that focusing on these routine users is restoring growth in our core business. At a high level, this quarter, we achieved solid gross margins, remain disciplined with our operating expenses and increased the utilization from these routine users. It's increasingly evident that optical genome mapping solutions are providing valuable insights to our customers and that these customers are expanding their utilization.

Taking a closer look at this performance, total revenue for the third quarter of 2025 was $7.4 million, reflecting an increase of 21% compared to the third quarter of 2024. When adjusting for a write-down of $0.5 million in revenues from discontinued clinical services in 2024, core revenues increased by 12% year-over-year in Q3 2025. We sold an all-time record 8,390 flow cells in the third quarter of 2025, which reflects a 7% increase compared to the same period last year. And we're pleased with the strong growth in flow cells again this quarter. It reflects increased utilization within this routine use customer group.

Non-GAAP gross margin for the third quarter of 2025 was 46%, which was significantly higher than the 26% non-GAAP gross margin reported for the third quarter of 2024.

Third quarter 2025 non-GAAP operating expense was $9.7 million, which is a 40% reduction compared to the $16.1 million in operating -- non-GAAP operating expense in the third quarter of 2024.

We installed 7 new systems and brought 1 back for a net increase of 3 to 384 for the installed base as of the end of the third quarter of 2025. And year-to-date through September 30, 2025, we have installed 23 new systems.

We ended the quarter with $31.8 million in cash, cash equivalents and available-for-sale securities, of which $10.3 million was subject to certain restrictions. In September, we completed a $10 million public offering of common stock, bolstering our balance sheet and extending our cash runway into the third quarter of 2026 and potentially longer depending on the execution of our growth and cost savings initiatives.

Now taking a closer look at our first pillar, which is supporting the utilization across our routine user base who repeatedly purchase and use consumables and software at higher rates. Overall, flow cells grew to 7% -- grew 7% in the quarter compared to last year, achieving this new record. After removing the flow cells that were sold to new customers since the third quarter of 2024 and those sold in this quarter, flow cells sold to the remaining existing customers grew by 6% on a year-over-year basis. Flow cell purchases by existing customers in the first 9 months of 2025 compared to the same customers a year ago grew by 7%. Our year-to-date performance suggests that our strategy of focusing on driving utilization within this routine user base is working and customers are using our product at higher volumes.

Now when looking at the revenue contributions from consumables and software together, these sales grew 15% on a year-over-year basis in the third quarter and 10% year-over-year for the first 9 months of 2025.

As a percentage of the total product mix, consumables and software represented 72% in the third quarter of 2025 and 76% in the first 9 months of this year, whereas in 2024, it represented 76% in the third quarter, but just 62% in the first 9 months of 2024. So this shift in product mix is also a result of our change in strategy.

Beyond supporting our OGM users, we're also making good progress with our second pillar of integrating VIA into customer workflows and upgrading our software and software and compute platforms to make analysis of OGM, microarray and next-generation sequencing data easier, faster and more accurate. Last quarter, we announced that upgrades were released in a first wave and that we are pleased to remain on track for the full commercial release of this software in the coming months.

Now moving down the P&L to discuss our pillar of improving profitability and scalability. We have made steady progress in reducing our non-GAAP operating expenses over the last few years, and we have remained disciplined with this approach throughout this year. In the third quarter, our non-GAAP operating expense was $9.7 million, and that represents a 40% year-over-year reduction.

Turning to gross margin. Cost reduction along with improvements to our product manufacturing costs and volumes have enabled expansion from 22% on the non-GAAP core gross margin in the first quarter of 2023 to 46% non-GAAP gross margin this quarter. While we expect to see continued margin expansion over time, we believe that the levels that we have seen in the last few quarters is representative of where we will be in the near-term. With the shift in product mix towards consumables and software, we see a benefit to gross margin as well. Importantly, these adjustments and improvements in cost and margin are strong indicators that we are meaningfully improving the financial profile of Bionano.

Now lastly, turning to our final emphasis on building the support needed for OGM reimbursement, where we believe a growing number of publications illustrate the utility of OGM in cytogenetics and clinical research, as well as the number of clinical research genomes published. Taken together, we see these as positive leading indicators of future adoption of optical genome mapping. In the third quarter of 2025, there were 97 new publications demonstrating the value of optical genome mapping, and this represents a 10% growth over the same period the year before. And the OGM community has now published on a cumulative basis, nearly 11,500 clinical research genomes. These publications provide the support for new customers to adopt, existing customers to expand their applications and third parties to support OGM in reimbursement and consideration for medical society recommendations and guidelines.

Now looking closer at some of the key studies presented and presentations over the last few months. First, we had a strong presence at the ASHG Annual Meeting in Boston last month, where there were 9 studies presented, including oral presentations and posters that demonstrated both growing interest in key -- in existing geographies for optical genome mapping as well as in new regions, and we were impressed to see a strong contribution from Japan. We're excited to see this interest in optical genome mapping continue to grow on a global basis.

Second, a new publication from the MD Anderson Cancer Center at the University of Texas, which was recently published, shows how optical genome mapping can overcome key limitations of targeted RNA-Seq for cytogenetic investigation in acute leukemias. This paper represented the first benchmark comparison of optical genome mapping directly to RNA-Seq in cancer. It supports our overall digital pathology strategy by tying OGM to methods that are commonly used in molecular pathology and represents an important expansion outside of cytogenetics for us.

Third, multiple studies highlighting the OGM utility for analysis of cancer -- of the cancer biomarker chromoanagenesis were published in a book addition of molecular methods in -- sorry, methods in molecular biology. Chromoanagenesis refers to a catastrophic genomic event frequently associated with complex karyotypes and extensive clonal heterogeneity, treatment resistance, poor prognosis, and it includes events such as chromothripsis, chromoplexy and chromoanasynthesis, all of which play significant roles in cancer development and are hard to sort out using existing tools in cytogenetics. Optical genome mapping provides a genome-wide view of structural variations at high resolution, which enables precise identification and characterization of the genome variation underpinning this chromoanagenesis.

The 4 chapters published in this series highlight the use of optical genome mapping and the expansion into new cancer types for OGM such as multiple myeloma and chronic lymphocytic leukemia, or CLL, as well as the proliferation of novel workflows such as something new called DAM-assisted fluorescent tagging of chromatin accessibility, which is a hybrid method for highly detailed spatial analysis of chromatin assemblies. And so, this is one of the first times that we're seeing optical genome mapping being integrated into spatial analysis.

Now on our last call, we shared that the editorial board of the American Medical Association established a second Category I CPT code for optical genome mapping. This one in the evaluation of constitutional genetic disorders. And that represented another incredible milestone for the OGM community. I'm pleased to share that in mid-September, CMS posted the preliminary payment determination for this CPT code, which is based on a crosswalk to a previously established OGM code priced at $1,263.53. Pricing at this level, which is higher than what microarray codes are priced at is consistent with the needs of laboratories today seeking to move forward from the legacy methods. We believe this CPT code builds on the evidence that OGM can outperform these legacy methods across a number of applications and may pave the way for more routine use of OGM across oncology and clinical genetic research communities globally.

So to wrap up, I would like to provide our outlook for the remainder of the year. We are reiterating our full year 2025 revenue guidance of $26 million to $30 million. We expect the fourth quarter of 2025 revenues to be in the range of $7.5 million to $7.9 million. And given that we've reached 23 new OGM system installations in the first 9 months of this year, we now expect to exceed the prior range of 20 to 25 systems, likely surpassing the high end of that.

So with that, Didi, please go ahead and open the line for questions.

[Operator Instructions] And our first question comes from Yi Chen of H.C. Wainwright.

My first question is with respect to increasing utilization of routine use customers, can you talk about what is the potential peak level of utilization for these routine use customers? And how soon do you expect to have these customers achieve the peak level based on the current trend?

Yes. It's -- I think it's a key question, and important topic. Thank you, Yi, for joining the call and for the question. What we feel confident about, first of all, is that, in general, the labs are not sample limited. So they have an abundance of samples. Those samples are distributed across multiple different indications. And so, the sort of process of expanding utilization involves the laboratories developing and validating an assay for 1 application and then running that for a while and then beginning to grow the menu by developing an assay for another research indication and so on and so forth. That's really the primary mechanism of growth.

And what we see across the user landscape is that, the average utilization across these routine users that are running on a regular basis is about 4 samples per week. But at the highest end of the spectrum, it's as high as 40 samples per week. And so, our view is that, a reasonable target for us to shoot for is maybe the midpoint between the 4 and the 40, so getting up to in the low-20s on average across all of the routine users. And so, that's what we're going to try to make happen.

Got it. And with respect to the Japanese market, can you tell us how many -- what is the current installed base in Japan? How do you think the market could ramp up in comparison to the U.S. market?

Yes. So we have really only 1 system installed in Japan, and it's at a laboratory of a service provider. And so, different academic customers, industrial customers can send samples to this laboratory, have them processed and get data. And so, that's what's going on.

And what we see is that, the interest in Japan has evolved over time. So initially, when this services lab first got going, they were primarily focused on nonhuman applications actually. And now in the last couple of years, that has changed. And so, the evolution is much more consistent with what we see in other areas, work in genetic diseases, leukemias and lymphomas. And so, we would expect that market to evolve similar to what we see in the U.S. for those applications. I think that there's also a significant opportunity in Japan around cell and gene therapy development. And so, we're seeing some of these pharma companies begin to access this service provider.

And so, there's tremendous potential in Japan. I do think for the types of clinical research applications that we're doing in other regions such as hematologic malignancies and constitutional genetic diseases that it will take some time. They're going to want to build up a kind of war chest of local data in support of optical genome mapping, but that's ongoing. I think that the pharma can accelerate. And so, we're paying attention to all of these, and we're quite happy to see some presentations or posters actually at ASHG last month.

Got it. And with respect to operating expenses, do you expect it to remain relatively stable going forward?

Yes. Yes. I think this is the range that we're intending to be in. We're in the process of putting together our detailed operating plan for next year. And we see some areas where we might like to invest. But I think that our overall intention is to keep things as flat as we possibly can, except where opportunities justify it.

I show no further questions at this time. I'd like to turn it back to Erik Holmlin for closing remarks.

Great. Very good, Didi. Thank you, and thank you to everybody who joined the call, and we look forward to updating you on our full year results next year. Thank you very much.

This concludes today's conference call. Thank you for participating, and you may now disconnect.