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. 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 close 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. 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. Good afternoon, everyone. I'm pleased to be here with you all today. 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 Eric 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 seamless transition. As I step into the CEO role, my highest priority is to sustain business continuity, t o 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 of 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 install 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. Fourth, to improve profitability, scalability, et cetera, 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. 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.
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 one, 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 one, 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. 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 a doption 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 continue development and 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 two 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 I CPT code for OGM in 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 I 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 1st, 2026. This code covers OGM use in evaluation of constitutional chromosome abnormalities, interrogation of structural and copy number variants.
Together, these two 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 and $2,663.53, higher than what microarray arrays cost 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 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 syndromes, and comes from institutions across Europe, Asia, South America, and the U.S. 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 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 in 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, lentivirus 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. 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 four 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 Stratys workflow can process 10,000 cancer samples per year at less than 1/8 he 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 49.9% 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 break even.
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 202, 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. Q1 was strong, a 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. With that, let's open it up for questions.
Thank you all for joining. We will now open the line for questions. If you'd like to ask a question at this time, please press star one one on your telephone, and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from Yi Chen with H.C. Wainwright.
Thank you for taking my questions. Could you provide some comment regarding if you expect the company to achieve operating cash flow break even either late this year or sometime in 2027? Thank you.
Oh, hi. Thanks for the question. Let me ask Mark to comment on that. Mark?
Yeah, thanks, Yi. No, we do not expect to reach cash flow break even by the end of 2026. You know, 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. Do you expect any additional catalyst 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?
I think there's 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. I think we are starting to see some impact in our dedicated install base. It's a little hard to measure right now, but I think that's part of the reason we are experiencing a very strong demand. 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. That doesn't mean we wouldn't take other debt for certain applications if it was called for and timely. I think that's a big deal.
I think those are the two major things that we have pushing and we have several publications that are coming out that will be highly complimentary and also expansive on what's been shown by Johns Hopkins and MD Anderson Cancer Center. We're getting great adoption out there. I think we're going to try to make it very public about how people feel about this. The neatest thing about this, and yeah, I've been a director of this company since 2011, so I have lived through this. In the early days, it was our clinical medical executives who were 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.
They are now leading, and that's a huge transformation for this company.
Got it. Thank you.
Thank you.