Cytek Biosciences: Earnings Call Reveals Mixed Fortunes

Cytek Biosciences, Inc. ((CTKB)) has held its Q1 earnings call. Read on for the main highlights of the call.

Cytek Biosciences Faces Mixed Fortunes Amid Revenue Challenges and Strategic Growth

The recent earnings call for Cytek Biosciences, Inc. painted a picture of a challenging quarter, marked by significant revenue declines in key regions such as the US and EMEA. Despite these setbacks, the company showcased strong growth in service revenue, APAC markets, and recurring revenue, alongside strategic product launches, offering a balanced outlook of both hurdles and opportunities.

Service Revenue Growth

Service revenue worldwide reached $13.3 million, marking a 24% increase compared to the previous year. This growth was primarily driven by the expansion of Cytek’s instrument installed base and the active usage of its tools, highlighting the company’s successful focus on enhancing service offerings.

APAC and Rest of the World Revenue Surge

The APAC region, along with the rest of the world, experienced a revenue surge, totaling $11.4 million, which is a 35.6% increase year-over-year. This growth was significantly bolstered by the China stimulus program, underscoring the region’s strategic importance to Cytek’s overall revenue stream.

Expansion of Cytek Cloud User Base

Cytek’s cloud user base expanded by 2,000, reaching over 18,000 users in the first quarter. This growth represents an average of about six users per installed Cytek FFP instrument, indicating a strong adoption rate of the company’s digital solutions.

Launch of FiFit Muse Microsystem

Cytek introduced the FiFit Muse microcell analyzer, designed to enhance ease of use and precision. This product targets emerging markets such as cell and gene therapy, reflecting Cytek’s commitment to innovation and market expansion.

Recurring Revenue Growth

The company’s trailing twelve-month recurring revenue grew by 17%, now accounting for 31% of total revenue in the first quarter, up from 26% a year ago. This increase highlights the growing importance of recurring revenue streams in Cytek’s business model.

Overall Revenue Decline

Total revenue for the first quarter of 2025 was reported at $41.5 million, a 7.6% decrease compared to the first quarter of 2024. This decline was primarily attributed to weaker instrument sales in the US and EMEA regions.

Product Revenue Drop

Product revenue, including instruments and reagents, saw an 18% decrease versus Q1 of 2024, driven by a weaker instrument market in the US and EMEA. This decline underscores the challenges faced in these key markets.

US and EMEA Revenue Decline

Revenue in the US and EMEA declined by 13% and 24%, respectively, due to uncertainties in academic funding in the US and pressures on government budgets in EMEA. These factors contributed significantly to the overall revenue shortfall.

Gross Margin Decrease

The GAAP gross margin for the first quarter was 49%, down from 51% in the prior year, while the non-GAAP adjusted gross margin was 52%, compared to 55% previously. This decrease reflects the financial pressures faced by the company.

Revised Revenue Guidance

Cytek Biosciences revised its full-year 2025 revenue outlook to a range of $196 million to $210 million, representing an overall growth projection of -2% to +5% over the full year 2024. Despite the challenges, the company remains confident in its strategic positioning and future growth prospects, particularly in the Asia Pacific region.

In conclusion, Cytek Biosciences’ earnings call highlighted a quarter of mixed fortunes, with notable revenue declines in key markets offset by growth in service and recurring revenues, as well as strategic product launches. The company’s forward-looking guidance reflects cautious optimism, with a focus on leveraging growth opportunities in the APAC region and expanding its product and service offerings.