Excellent. Let me get started. Good morning, everyone. Thank you for the slight delay. Welcome to the Singular Research Las Vegas Invitational Webinar. My name is Timothy Bigelow, and I'll be the host for the day. I am the institutional salesperson at Singular Research, and I thank you all for joining us today. Our first presenter is all ready. The company's name is Cytek Biosciences. Cytek Biosciences is a cell analysis solutions company that provides cell analysis tools that facilitate scientific advances in biomedical research and clinical applications. Our presenter today is William McCombe, and he is the Chief Financial Officer of Cytek Bio. Thank you. William, I'll throw it over to you.
Thanks, Tim. Welcome everyone to this presentation. Just give me one second. Just bear with me for a second. I won't read the safe harbor in detail, but it's there for your perusal. Cytek Biosciences is a company that is leading the cell analysis industry, which is a critical function powering the pharmaceutical and life sciences research industry. We're the leader in that activity. In fact, we were recognized by Time Magazine in 2026 as one of America's leading growth companies, and received a number of other awards for our role in leading this activity for the scientific community. We have, over time, placed now almost 4,000 units of our cell analysis systems. We have almost 3,000 customers. We're in 76 countries. In the first quarter of this year, we had $44 million of revenue. In 2025, just on $200 million of revenue.
We have a very strong balance sheet with over $260 million in cash. We're a global company. We have about 55% of our revenue in the United States, 25% in EMEA, and 20% in APAC and rest of world. You can see that we have facilities in Seattle, Fremont, which is where we're headquartered, San Diego, the East Coast, Amsterdam in Europe, and Wuxi in Shanghai, and Singapore. We have a global sales and manufacturing network. Our revenues are distributed approximately 60% to the pharma and biotech industry and about 40% to universities and government research institutions. We have excellent global diversification and strong presence across all sectors of the life sciences industry. Flow cytometry is probably a term that's new to you.
This is a technology for identifying the proteins that are carried by a cell, and that is a key basic step in cellular research. It's what's called phenotyping the cell or profiling the cell, and it's something that you have to do at the beginning of a cell-based experiment. It's also critical in production runs for cell-based therapies and clinical workflows. The importance of this is that unlike many other life science tools companies, Cytek and its flow cytometry instruments are must-have instruments in any lab. That means that our revenues are more resilient to the cycles. Our customers continue to buy our instruments through up cycles and down cycles. Our technology is critical in the research for diseases like cancer, infectious disease, autoimmune disease, so some of the big unmet medical needs that are out there.
Our technology's also important for cell and gene therapies, genomics, and what's called translational assays, which are when the therapy is translated from the lab to the clinic. We're also used in a clinical setting in EMEA and Asia Pacific. What's the benefit? We pioneered what's called Full Spectrum technology, and what this means is that our technology uses the full spectrum of light, which enables a researcher to identify approximately 40 different markers in a single experiment. Before our technology, before Full Spectrum was introduced, the conventional technology only allowed for 10- 12 markers. Being able to do 40 markers increases the sensitivity of a single test tube run, and substantially increases clinical productivity, because you can search for 40 different markers, 40 different proteins in one sample, as opposed to just the 10- 12. It makes you 3x more productive.
Two weeks ago, we introduced the industry's first seven-laser flow cytometer, which will raise the bar again to 60 different markers in one cell. Another substantial leap forward in productivity. What that does is you use less reagent, it lowers your cost, it enables you to look for more and different cell populations for rare and abnormal cells, and enables you to use a smaller amount of the specimen. It's a substantial improvement to both the information that the researcher is able to gather and productivity. As such, Full Spectrum technology is growing very rapidly and replacing the conventional technology. Cytek is at the forefront of that as the pioneer of Full Spectrum technology, which we introduced about seven years ago. We have a full portfolio of best-in-class tools.
The seven-laser system that I just mentioned is called the Borealis, it's on the left. That was introduced at CYTO about 10 days ago, that's brand new state-of-the-art technology. The Aurora Evo is a high throughput, high sensitivity system that was introduced last year, the Aurora has been our flagship system since its introduction in 2017. We also have the Aurora cell sorter, which enables you not only to identify the cells, but also to sort them into those of interest. The product on the right is the Amnis. This is our cell imaging product. Down the bottom, you can see our mid-level system, the Northern Lights, and the reagents, which I'll talk about in a second.
Our market is a large market, approximately $5 billion, growing at just under 9%, it's forecas t to be approximately $9 billion in total TAM by 2032. Our business is built on four pillars, the first of which are the instruments, which is the core of Cytek, about 6 0% of our revenue. As I mentioned, our systems are the state of the art in the industry for the amount of data they can gather, the ability to harmonize those instr uments so that you get the same result when you run the same experiment on different industries at different sites, and that's critical, particularly for Big Ph arma, who are running global research organizations. Our systems, because we were the first to market with Full Spectrum technology, our systems are very stable and reliable, and also cost-effective. The second pillar is applications.
This refers to our reagent business, which these are the razor blades, if you will, of the razor blade model. This is the consumable that you load into the system every time you want to run an experiment. That, together with our service business, that comprises the recurring revenue portion of our revenue base, and it's about a third, and it's been growing by a few percentage points every year, and something we would expect to get into the 40s going forward, which de-risks our revenue stream and substantially enhances the value of that revenue stream. Third pillar is bioinformatics. This refers to the Cytek Cloud. This is an application that allows customers to create complex panels. That's a process that, without our system, used to take months. With our system, you can do it almost instantaneously.
You can also run simulated experiments to ensure the experiment works before you actually spend the money to do a live wet experiment. The last pillar is clinical. This is the use of flow cytometers in a clinical setting, and this is something that we do in Europe and Asia Pacific. As I mentioned, we have a significant recurring revenue. The services and reagents are about a third of our total business. It's growing rapidly. It grew at 19% in the first quarter of this year, up at 35%, I think, from 29 last year. Our company is at the stage of development where the instruments that we deliver represent about between 15%-20% of the total installed base at its current level. That installed base is growing at a h igh teens rate each year as we deliver new instruments.
That enables us to grow the revenues associated with that installed base at a high rate in a very predictable way. That's a key feature of our financial profile and something that drives growth and drives certainty of revenue for our investors. This is a quick financial profile, shows you the revenue for the last five quarters. Our revenue is somewhat seasonal. Our first quarter, as you can see here, is usually our slowest quarter, the fourth quarter is usually our highest revenue quarter, and that's really just a function of our customers' buying behavior. What I would draw your attention to, which is, I think, really important, is the year-on-year growth rates. You can see in the first quarter of last year were tough conditions for the industry, and we were down 8%.
Many of our competitors, the market, we believe, was down more than that because of the disruptions to the life science and academic environments that occurred in that period. We saw some recovery in Q2, we were down 2%, we returned to growth in Q3, where we were +2%, we had a strong recovery in Q4 with +8% growth. In the first quarter of this year, we recorded our third quarter of growth at +6% year-on-year. These numbers are substantially better, several hundred basis points better than the industry. We think we've turned the corner in terms of putting the difficult conditions of early last year behind us and have a good runway for growth going into 2026. To summarize the investment proposition of Cytek, why would you as an investor be interested in investing with us?
Firstly, as I mentioned before, we have this installed base that's growing at high double-digit rate, and that's driving our service revenue and our reagent revenue. We have a very stable attach rate of service c ontracts, and that service revenue has grown very consistently with the growth in the installed base. That makes us quite different than many other life science tools companies, where we have this high visibility on double-digit growth for that portion of our business. Our reagent business is growing also rapidly. When the company started, we focused on introducing the Full Spectrum instruments, and as a startup company, didn't have the resources to really focus on building the reagent business at the same time. Now that we're established as a market leader in instruments, we have reinvigorated our reagent business, and it's been growing in the last few quarters at around 20%.
The reason for this is that our reagent business is around 5% or 6% of total, or call it $12-ish million. Approximately the volume of reagents that flow across our instruments, our installed base of instruments, we estimate is at least $150 million. We have a small share of a large market, and we have a strong brand with those customers and a strong brand connection in that they've bought an instrument from us worth hundreds of thousands of dollars. Our service people are regularly at that customer. It's a great opportunity to increase the sales of our consumables, and we've been doing just that. The third growth driver for us is the growth of the overall flow cytometry market. Which, as I mentioned, is projected to grow at high single-digit rates. The fourth driver of our growth is our very strong record of innovative new products.
I mentioned the Borealis, the industry's first seven laser, 60-color system, introduced a couple of weeks ago. Last year, we introduced the Aurora Evo, which was a much higher throughput system than had been available historically. We also, at CYTO, introduced a highly automated system, called the Aurora Evo2, which automatically turns on the system, opens the system door, loads a plate, runs the experiment, and then unloads the plate when it's done. This system basically is 100% automated and completely eliminates the need for a technician to stand by the system and operate it. We introduced that system at CYTO. We think that's going to be a significant hit in the marketplace and something that will be met with strong demand. The next driver I want to talk about is the replacement of the conventional flow cytometer fleet. The world has about 50,000 flow cytometers.
About 46,000 of those are conventional flow cytometers, so the 10 - 12 color systems. Those are being replaced steadily, and when they're being replaced, customers are choosing the Full Spectrum system. That opportunity to replace those tens of thousands of flow cytometers is something that we're very well positioned to do because we are the leader in the new technology that's going to replace those conventional flow cytometers. That's another big opportunity for us. I talked a little bit about the Cytek Cloud, which is something that substantially improves our customers' productivity and utilization of our system. Then, finally, we have big clinical markets in EMEA and China, where we have an expanding market opportunity. We have very many growth drivers.
We're well-positioned, we think that in an improving industry environment, these drivers are going to lead to superior revenue growth for Cytek and growth in value for our investors. With that, I will throw it open for questions.
Great. Thank you, William. Excellent presentation. I do have a couple of questions here. The first is on the federal funding, the National Institutes of Health funding. How is that uncertainty with that funding impacting the demand from your customers?
That was an issue that impacted the industry last year. You remember, I showed the slide that showed that we were down 8% in the first quarter of last year, 2% in Q2, then +2% and then +8%. What happened was the administration proposed that NIH funding would be cut by 40%. There was a lot of pushback against that, as a result, NIH funding was actually flat to slightly up last year. The expectation is that we'll see a similar level of funding this year. The issue has receded in its importance fairly significantly. The other point I would make is that we're globally diversified. U.S.
academic is only about 15% of our revenues, of that, in the last time that we looked at it, the NIH either directly or indirectly funded deals were only about a third of that 15%, so only around 5%. It's a 5% of revenue issue, the situation has gotten substantially improved over the course of the last four quarters, that's been demonstrated by our improving revenue growth rate.
Very good. I think we have time for one or two other questions. The next is on the margins. It looks like the revenue growth has been strong. Why are margins still deteriorating?
Yeah. We had a couple of headwinds last year of a one-time nature that impacted margins. There have been, I think, three factors, and two of those are of a transitory nature, and one of them, I think, is going to be with us for a while. The three factors are the fact that product revenue declined over the last couple of years, you'll see that that product revenue has recently flattened out and begun to grow again. That decline in product revenue, because our variable margins are very high, they're north of 70%, that produced downward pressure on margins. Secondly is tariffs that occurred or that impacted us for the first time last year.
We've gotten better at adjusting to those tariffs, I think we'll continue to pay tariff on imported components and imported service parts, impact will be a bit less. That's been a one to 2% impact on gross margin. The third thing is that we established a new manufacturing facility in Singapore last year, we had to run the facility in Seattle in parallel for most of 2025. We've now closed Seattle we no longer have those duplicative manufacturing overhead costs. That will go away in 2026. We're expecting some modest improvement on gross margins, certainly we feel like the trend of declining gross margins is going to stop.
Okay, great. I think that is all the time we have. Thank you, William. Thank you for Cytek Biosciences.
Thanks, Tim. Appreciate it.
All right.