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Date
Wednesday, November 5, 2025 at 4:30 p.m. ET
Call participants
Chief Executive Officer — Wenbin Jiang
Chief Financial Officer — William D. McCombe
Investor Relations — Paul Goodson
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Risks
EMEA revenue decline — EMEA revenue declined 28% in Q3 2025 due to a significant fall in instrument sales, mainly attributed to shifting government spending priorities and weaker demand from academic and government customers.
Profitability pressure — Gross profit margin decreased to 53% from 56% in the prior year quarter due to lower product revenues, increased materials and tariff costs, and higher overhead, with additional pressure from increased headcount and travel costs in service delivery.
Rising operating expenses — Operating expenses increased 10% to $36.7 million, driven by a 47% jump in general and administrative expenses mainly from patent litigation and a $700,000 nonrecurring write-off.
Net loss — Net loss was $5.5 million versus net income of $900,000 in the prior year quarter, a reversal from net income of $900,000 in Q3 2024, due to higher operating losses and $3 million lower net other income from increased foreign exchange losses and reduced interest income.
Takeaways
Total revenue -- $52.3 million total revenue, up 2% year-over-year, led by strong performance in APAC and recurring revenue growth in service and reagents.
APAC revenue growth -- 25% increase in APAC revenue, with robust contributions from instruments, service, and reagents.
EMEA revenue decline -- 28% year-over-year decrease in EMEA revenue, largely from double-digit instrument sales reductions to academic and government sectors in EMEA.
US revenue -- 12% year-over-year growth in instrument revenue to pharma and biotech customers worldwide, with double-digit service growth and instrument revenue flat year-over-year; US product revenue was up 20% sequentially from Q2 2025 but unchanged year-over-year against a high prior-year base.
Recurring revenue expansion -- Service revenue grew 19% and reagent revenue grew 21% year-over-year, with reagent sales achieving their highest-ever quarterly result and service benefiting from a growing installed base.
Biopharma customer revenue -- Total revenue from biopharma customers increased 14% compared to Q3 2024, offset by a similar decline for government and academic customers.
Instrument portfolio -- Aurora cell sorter led with 35% year-over-year growth; Aurora Evo instrument launched late Q2 and received a "strong reception," according to Wenbin Jiang.
Installed base -- Total installed instruments grew by 161 units to 3,456.
Reagent operations -- Expansion of the Amsterdam facility increased EMEA presence by 40% and consolidated European reagent warehousing, enhancing operational agility and delivery times.
Cytek cloud adoption -- Over 22,600 users as of September 30, 2025, representing over 40% growth since the start of 2025 and nearly eight users per installed instrument.
Adjusted gross margin -- 55%, down from 60% in the prior year quarter (adjusted) and 56% in Q2, primarily from lower product and service margins.
Adjusted EBITDA -- Adjusted EBITDA was $2.5 million, down from $7.6 million in the year-ago quarter, primarily due to lower gross profits and higher operating expenses.
Free cash flow -- Free cash flow was negative $300,000, modestly reducing total cash and marketable securities to $261.7 million.
2025 revenue guidance -- Full-year 2025 outlook reaffirmed at $196 million to $205 million, assuming no foreign exchange changes, supported by continued recurring revenue growth and stabilization trends in the US.
Summary
Cytek Biosciences (CTKB +2.56%) reported single-digit total revenue growth for the quarter, with broad momentum in APAC and recurring revenue streams counterbalanced by ongoing weakness in EMEA. Strategic investments in operational efficiency, especially in reagent logistics and European expansion, have accelerated recurring revenue growth and improved delivery times. User adoption of Cytek cloud software has accelerated, with year-to-date growth exceeding 40% as of September 30, 2025, supporting recurring reagent and service uptake. Significant additions to the global instrument base and the market launch of the Aurora Evo underscore continued expansion of the company’s product portfolio.
The company highlighted Aurora cell sorter’s 35% year-over-year unit growth and the initial market success of MUSE micro analyzer introduced in March.
Wenbin Jiang said, "recurring revenue base to continue growing," reflecting a focus on building predictable revenue streams despite end-market volatility.
Reagent market penetration remains below 10% of a cited $150 million annual opportunity, yet management signaled "So there are multiple things we're doing on lots of different fronts," according to William D. McCombe in logistics, custom design, and software integration to drive further uptake.
William D. McCombe said, "we are not making any changes to that general approach," in regard to share repurchase, stressing continued opportunistic execution sized to free cash flow.
The company cited elevated general and administrative expenses from patent litigation and a nonrecurring $700,000 write-off, which materially affected profitability metrics for the quarter.
Industry glossary
Flow cytometry: Laboratory technique for analyzing the physical and chemical characteristics of cells or particles as they flow in suspension past detection apparatus, widely used in biomedical research and clinical diagnostics.
Reagents: Chemical substances or compounds added to a system to cause a chemical reaction or test for specific cell markers in analytical instruments.
Installed base: The total number of Cytek instruments actively deployed and in use by customers globally.
Budget flush: The surge in purchasing activity by customers, particularly biopharma, near fiscal year-end to utilize the remainder of their allocated budgets.
Full Conference Call Transcript
Wenbin Jiang, CEO, and William D. McCombe, CFO, will be speaking today. Please note that we will be referencing a slide presentation during the call today that has been posted to the Investors section of our corporate website. These statements are based on the company's current expectations and inherently involve significant risks and uncertainties that could cause actual results or events to materially differ from those anticipated in these statements. Additional information regarding these risks and uncertainties appears in our slide presentation in the section entitled Forward Looking Statements in the press release Cytek issued today and in Cytek's filings with the SEC.
This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Additional information regarding our use of non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, may be found in our slide presentation and in today's press release. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Except as required by law, Cytek disclaims any duty to update any forward-looking statements whether because of new information, future events, or changes in its expectations.
This conference call contains time-sensitive information and is accurate only as of the live broadcast on November 5, 2025. I want to thank those of you who attended our user group meeting on October 22 in New York City. Our next and last user group meeting for the year is on November 7 in Montreal. We often host booths at conferences worldwide where attendees can see our products and learn about them from our knowledgeable team members. As always, these events are primarily geared to the scientific community, but they may offer an opportunity for investors and analysts to interact with our users of technologies and to learn why Cytek's instruments are so highly valued by our customers.
We have a limited number of spaces to accommodate members of the financial community, so if you are interested in attending any of these events, please contact me in January when we will have a list of 2026 events. With that, I will turn the call over to Wenbin Jiang.
Wenbin Jiang: Thanks, Paul. Welcome, everyone, and thank you for your interest in Cytek Biosciences, Inc. On today's call, I would like to start with a discussion of our performance in the third quarter. Next, I will give you some highlights of our progress during the third quarter on our strategic priorities before turning the call over to William D. McCombe for a more detailed look at our financials and our outlook. Turning to Slide three. In the third quarter of 2025, total revenue reached $52.3 million, representing a year-over-year increase of 2% compared to the same period in 2024.
This growth was primarily driven by strong double-digit gains in the Asia Pacific region and the continued momentum in our recurring revenue businesses, specifically service and reagents. Turning to Slide four. Geographically, APAC, including China, led our performance with robust revenue growth across all categories, including instruments, reagents, and service. In the US, we saw double-digit positive year-over-year overall revenue growth, driven by continued momentum in service revenue. In contrast, EMEA experienced double-digit year-over-year revenue decline, largely due to significantly reduced instrument sales to academic and government customers and a modest decline in instrument sales to pharma, biotech, and CRO customers.
In our rest of world region, which includes Canada and Latin America, we achieved double-digit overall revenue growth compared to the third quarter of last year. Turning to Slide five. Notably, I wanted to call out that excluding the performance in EMEA, we posted double-digit revenue growth in all worldwide regions in the third quarter. As you can see from this slide, focusing now on instruments, our instrument revenue to pharma and biotech customers grew 12% worldwide, including 10% in the US, driven in part by the launch of our Aurora Evo instrument. This strong momentum is being driven by a positive funding environment for academic institutions in these regions.
US instrument revenue was driven by improving demand from pharma, biotech, and CRO customers, which we believe stems from greater clarity around the macroeconomic and industry factors. However, these instrument revenue gains were offset by continued softness in the academic and government sectors, where funding uncertainty persisted due to the evolving US policy landscape. In the quarter, we did begin to see some stabilization in this end market. However, academic and government demand remained under pressure, resulting in no net overall instrument revenue growth in the US in the third quarter. In EMEA, instrument revenue declined, particularly in the academic and government sector, which we believe reflects a broader shift in public spending priorities.
Looking at our recurring revenue sources, service revenue continued to grow strongly, contributing meaningfully to our overall base of recurring revenue. APAC was particularly strong broadly, including in service and reagents. Service revenue growth was driven by our expanding installed instrument base and the strong utilization of our products. Reagent revenue grew 21% globally year-over-year, supported by operational improvements, including faster delivery times and enhanced customer service. I would now like to update you on the progress our team has made across our core strategic pillars: instruments, applications, bioinformatics, and clinical, to further solidify Cytek's position as a market leader in next-gen cell analysis solutions. Starting with our core instruments on Slide six.
In the third quarter, we expanded our global footprint by 161 instruments, bringing our total installed base to 3,456 units. Within our instrument portfolio, our Aurora cell sorter was the strongest contributor in Q3, growing 35% year-over-year. We believe this strong growth is notable during a time when competing instruments have been recently introduced to the market. Late in the second quarter, we introduced the Aurora Evo Analyzer, and I am pleased to report that it has had a strong reception, a demonstration of Cytek's commitment to being at the forefront of technology development in the flow cytometry industry.
It offers a unique combination of high throughput, industry-leading data quality, small particle detection, ease of use, and automation and harmonization features. We expect it will be the standard against which other systems are measured. We included these new features after listening to what our customers wanted, and by the strong reception during Q3, it is clear that they are deriving value from the new features we added to create the Aurora Evo. Finally, regarding instruments, I want to mention that our MUSE micro analyzer has gotten a very strong reception since it was first introduced this past March.
The MUSE micro offers advanced microcapillary technology, enhanced optics, better software, and broader assay compatibility, all while maintaining affordability and compact results. It is an ideal choice for researchers and labs seeking cost-effective flow cytometry systems. Turning to our next growth pillar, applications, which include reagents. We remain focused on driving our reagent product growth. As part of this commitment, we recently announced the expansion of our European headquarters at our facility in Amsterdam's Life Science District. This site increases our presence in EMEA by more than 40%, including a dedicated customer service and training center.
To further advance our reagent business, we additionally transitioned the reagent warehouse operations to this site to improve operational agility and efficiency, reduce turnaround time, and provide reliable and consistent experiences for our customers. Over time, we expect our recurring revenue base to continue growing. Moving to bioinformatics. As we have mentioned before, our Cytek cloud continues to provide important benefits to our users. Our software tools empower customers to streamline their experiment workflow, which drives adoption and utilization of our cell analysis solutions and, of course, our reagent and service businesses. As of September 30, 2025, we had more than 22,600 Cytek cloud users, representing remarkable growth of over 40% since the beginning of 2025.
This represents an average of almost eight users per installed Cytek instrument. We believe this growth reflects the loyalty our users have to our product portfolio and the halo effect of the Cytek cloud driving the utilization of our technology platform, including our recurring revenue offerings in reagents and service. As a reminder, Cytek cloud is transforming how researchers design and conduct complex flow cytometry experiments. At its core, it is our proprietary AI-powered panel builder, which saves weeks or months of time by automating critical steps like fluorochrome selection and matching. Scientists can then conduct a virtual experiment before committing to a real wet lab study, reducing trial and error, and improving data quality from the start.
Moving to clinical. We continue to believe the clinical market represents an attractive business opportunity for Cytek. In the third quarter, Cytek took center stage to showcase our complete cell analysis solutions at several industry conferences. One notable event was the EACR meeting in Paris, France, in September. The event featured presentations by independent researchers discussing the importance of spectral flow cytometry in performing in vitro diagnostic procedures and acknowledging that Cytek's Northern Lights CLC system is the only spectral analyzer approved for clinical use in the EU. With that, I will now turn the call over to William D. McCombe for more details about our financials.
William D. McCombe: Thanks, Wenbin. Turning to Slide seven and our third quarter financial results. Total revenue for Q3 was $52.3 million, a 2% increase versus 2024. This reflects strong growth in service and reagents worldwide and in instruments in Asia Pacific and stabilization in US instrument revenues. These were offset by continued weakness in EMEA instrument revenues. We saw a 14% growth in total revenues from biopharma customers globally versus the year-ago quarter, offset by a similar decline in revenues from government and academic customers. Product revenue, which is comprised of instruments and reagents, decreased 4% versus 2024, driven by a 26% decline in EMEA offset by 19% growth in APAC.
US product revenue was up 20% versus Q2, but flat versus 2024, which was the strongest quarter of product revenue in 2024. Our performance in the US was attributable to a 10% increase in instrument revenue from pharma and biotech customers, driven by the launch of our new Aurora Evo instrument and an improved industry environment. This was offset by a 13% decline in instrument sales to academic and government customers as funding pressures continued. In EMEA, the decline in product revenue was primarily driven by a significant percentage decline in revenue from academic and government customers, which we believe is a result of a shift in government spending priorities, and a single-digit decline from pharma, biotech, and CRO accounts.
While our reagent revenue is still a single-digit percentage of our total revenue, it achieved its highest ever quarterly revenue in Q3, representing 21% growth over the prior year quarter. As Wenbin mentioned, this was largely due to a concerted effort by our reagents team to shorten delivery times and to improve customer service. Service continued to deliver strong revenue growth with 19% growth in Q3 versus the prior year quarter. This was driven by growth in the installed base and active usage of our systems. Turning to geographic market performance, US revenue grew 12% in Q3 versus the prior year, driven by service revenue growth. EMEA declined 28% due to lower instrument revenue.
APAC, including China, increased 25% in Q3 driven by growth in instruments, service, and reagents. GAAP gross profit was $27.6 million, a 5% decrease versus Q3 of 2024. GAAP gross profit margin was 53% versus 56% in the prior year quarter. This was due to both a lower service gross margin resulting from an increase in headcount and travel costs and a lower product gross margin as a result of lower product revenues, higher materials and tariff costs, and higher overhead. GAAP gross margin improved sequentially from 52% in Q2 due to higher product gross margins on higher product revenues and improved overhead absorption.
Adjusted gross profit margin, which excludes stock-based compensation and amortization of acquisition-related intangibles, was 55% in Q3, down from 60% in the prior year quarter and down from 56% in Q2. Operating expenses were $36.7 million in Q3, up $3.5 million or 10% versus Q3 2024. This was driven by higher general and administrative expenses, partially offset by lower R&D and sales and marketing expenses. Research and development expenses were $9 million, down 9% versus the year-ago quarter, primarily due to lower headcount compensation expenses partially offset by higher engineering expenses. Sales and marketing expenses were $11.7 million, down 6% versus the year-ago quarter due to lower headcount and compensation expenses and lower outsourced services expenses.
General and administrative expenses were $16.1 million, up $5.2 million or 47% from the year-ago quarter. The increase was primarily attributable to legal expenses related to a patent litigation case and, to a lesser extent, a $700,000 nonrecurring noncash write-off of deferred offering costs for an at-the-market equity financing facility entered into in 2022, which expired in the current quarter. Loss from operations was $9.2 million for Q3 versus $4.2 million in the year-ago quarter, driven by $1.5 million lower GAAP gross profit and $3.5 million higher operating expenses. Net loss was $5.5 million in Q3 versus net income of $900,000 in the prior year quarter. This was driven by three factors.
First, higher loss from operations of $5 million as mentioned above. Secondly, net other income decreased by $3 million to $1.4 million from $4.4 million in the prior year quarter. This was primarily driven by $900,000 of FX losses in the current quarter versus $1.1 million of FX gains in the prior year quarter and lower interest income of $900,000. The higher loss from operations and lower net other income totaling $8 million were offset by an increased tax benefit of $2.3 million in the current quarter as a result of a higher effective tax rate versus a tax benefit of $800,000 in the prior year quarter.
Adjusted EBITDA, which excludes stock-based compensation, foreign exchange impacts, and the nonrecurring charge of $700,000 for the write-off of deferred offering costs, declined to $2.5 million from $7.6 million in the year-ago quarter. This was due to lower gross profits of $1.5 million and higher operating expenses of $3.5 million due to the factors I described above. Free cash flow was slightly negative at minus $300,000 in the quarter, modestly decreasing our total cash and marketable securities to $261.7 million. Lastly, turning to our full-year guidance on Slide eight. We are reaffirming our full-year 2025 revenue outlook for a range of $196 million to $205 million, assuming no change in currency exchange rates.
This is based on our year-to-date results, our pipeline of instrument sale opportunities for Q4, and the good momentum we see in our service and reagent businesses. Our performance this quarter showed continued strong growth in instruments in APAC, stabilization in US instruments, and solid growth in our recurring revenue businesses. We expect these trends to continue, and our outlook remains consistent with our views in previous quarters, that we would see slowly improving trends as the year progressed. We have noted this in the US market, whereas EMEA remains challenged. Importantly, we continue to believe our performance in Q3 and in 2025 year-to-date reflects a strong market leadership position in what has been a difficult environment.
Our core business is showing positive growth in all regions except EMEA, and our recurring revenue continues to grow. Notwithstanding some temporarily elevated operating expenses, we delivered positive adjusted EBITDA, which we anticipate will continue in Q4. We believe we will perform well relative to the overall flow cytometry market, which is also beginning to show signs of stabilization. Finally, our strong balance sheet also gives us the ability to continue investing for growth. With that, I will turn it back over to Wenbin Jiang.
Wenbin Jiang: Thanks, Bill. Turning to Slide nine. I want to close by first thanking our Cytek team for their continued commitment to advance our mission amid a challenging and evolving market environment. We believe our third-quarter results are encouraging and demonstrate our established brand and strong technology, underscoring our market leadership position. Our team continues to execute with discipline, expanding our global installed base, growing our recurring revenue streams, and sharpening our focus on profitability and cash generation. At the same time, we are committed to making targeted investments that will reinforce our competitive position and accelerate our growth.
While we remain mindful of broader market conditions, we believe Cytek is well-positioned to deliver long-term value through a differentiated technology portfolio, buildable growth drivers, a strong balance sheet, and global reach. I want to thank everyone for joining today's call, and we will now open it up for questions. Operator?
Operator: At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of David Westenberg of Piper Sandler. Please go ahead.
David Westenberg: Hi. I wanted to actually maybe just start with the product launch, the Aurora Evo. Can you talk about the differences in this product versus the other products in the market? And how we could think about growth contribution from new products in the next couple of years? Thank you.
Wenbin Jiang: I think this new product, basically, what we have done here is we listened to our customers, specifically from pharma biotech customers. And in terms of the features, we have included like a higher throughput and small particle detection, automation, and harmonization, all of those really suited for those pharma customers.
David Westenberg: Got it. Thank you. Just maybe speaking of pharma customers, and, actually, I was gonna say is there anything to take away from the double-digit growth in CROs? Meaning, are there are they potentially leading indicators that biopharma might want to own their own instruments?
William D. McCombe: When we talk about biopharma and CROs, we're talking about one category. So when Wenbin talks about biopharma customers, we're grouping all of those together, and as we noted in the remarks, our instrument revenue to that group grew 12% worldwide and 10% in the US. So we've received a very favorable response.
David Westenberg: Yep. Maybe I'll ask another way. In the press release, it mentioned CROs. I think it said it grew at 14%. Now, normally, when I think about CROs and their usage...
William D. McCombe: Yeah. No. What we referred to was the aggregate group of customers, which are comprised of pharmaceutical companies, biotech companies, CROs, and distributors. That's one group of companies.
Paul Goodson: And so, okay. That one group. Yeah. What the press release said was that total revenues to that aggregate group rose 14% in the quarter. And what I just mentioned is to that same group, instrument revenue rose 12%. And the big pharma companies are... So that's the way to think of it.
David Westenberg: Got it. Thank you very much. Now just maybe on double-digit revenue growth in the US, can you remind us of how much of that might be, you know, sorry to say, but, you know, easier comps versus just, you know, good execution? And I mean, are we now, in your opinion, at kind of the late innings of a, or maybe, let's say, early innings of a recovery? Instead of late innings of stagnation. Thank you. And I'll take it offline from here.
William D. McCombe: I think no. It's not the third quarter of last year was pretty strong. So the performance in the US is a function of strong service and reagent growth. And the fact that our instrument in the US were flat, but as I mentioned in my remarks, the US instruments that Q3 of last year was the highest quarter of 2024 for US instruments. So the benchmark was actually pretty high. And so to be flat against that is quite a good achievement. I'm talking about it's quite a good achievement on the instrument side. And then in addition to that, we had strong growth in services and reagents. Does that answer your question?
Operator: Your next question comes from the line of Brendan Smith of TD Cowen. Please go ahead.
Brendan Smith: Great. Thanks, guys, for taking the questions. I appreciate all the color. Wanted to ask just a little bit more actually about the quality of the conversations you're having with customers in recent weeks. And if there's any additional color you can maybe provide about their appetite to spend more on some of these instruments next year as they're, you know, really starting to put together their 2026 budget. And I guess, if so, do you have any sense which of your offerings you think they'd maybe reach for first once some of those dollars start to become maybe more readily available into next year?
And then, I guess, just if you have the if you're noticing maybe any geographic differences, in your answer to that question. Thanks.
Wenbin Jiang: Yeah, I think, you know, what the trends that we currently see in the business are that Asia Pac is strong, is growing strongly. In the Asia Pac instrument, business is growing strongly. Service momentum continues to be strong, as does reagent. As we noted, EMEA continues to be challenged. And the US is following the path that we expected from that we talked about in earlier quarters of gradual improvement as the year progressed. And we've seen that. And so we've seen a stabilization in the US instrument business, where it's been, you know, basically flat versus last year, for two quarters in a row now.
And look, we don't, you know, we don't have a crystal ball about next year, but based on assuming there are no exogenous shocks, we expect those trends to continue. Within the US, the biopharma sectors we noted has been within US instruments, the biopharma sector has been strong. Academic and government has been weak, but the two have offset each other. So, you know, it's a bit early for us to be talking about 2026. You know, the only comment we would make is we generally expect the areas of the business that are growing to continue to grow, absent exogenous factors. And I think at some point that Europe has to hit bottom.
It was down quite significantly this year, and, you know, you'll see it's down almost 30% this year on an aggregate revenue basis. And one would think that has to, has to slow.
Operator: Your next question comes from the line of Mason Carrico of Stephens.
Harrison Parsons: Hey. This is Harrison on for Mason. Good afternoon, and thanks for taking the questions here. Can you walk us through your key assumptions behind the 2025 outlook? Are you assuming the typical 4Q step up in instrument placements or something more muted given the given the macro environment?
William D. McCombe: We would think that we don't have any reason not we let me let me back up. You know, we typically see a budget flush from the biopharma customers in Q4. We don't have any reason to doubt that will or to expect that will not happen this year. So we would expect some typical seasonal improvement in Q4. Again, I'd go back to what I just said about the outlook service and reagent momentum is strong, Asia Pac is strong, US is stable. And we think EMEA, you know, will continue to be under pressure versus last year.
Harrison Parsons: Understood. And then just wanted to ask on ask a little bit more about the US. How is the US academic and government demand trended since last August? And are you seeing any signs of stabilization as we head into next year?
William D. McCombe: It continues to be down versus last year. And, you know, obviously, the funding pressures or the funding reductions are hasn't been much change to that picture. But on look, the flip side, the momentum in biopharma has been quite good. Quite strong as we noted. So we don't see the academic US academic in government we don't have a reason to expect it'll get particularly better or worse. We just think it will remain under pressure versus last year's levels.
Harrison Parsons: Okay. And then, I know reagents are growing, and you've cited a over $150 million annual opportunity. With less than 10% captured today. What specific initiatives are you implementing to increase that capture rate? And have you begun to see those initiatives bear fruit?
Wenbin Jiang: And as you can see, we have really improved our operation efficiency and our logistics functions. And we shortened the delivery time as you know division is an occurring business until you have to adjust all of those logistics to the side of the issues at which is what we have been focusing on during the last few quarters. And clearly, it has benefited we have benefited from those kind of improvements we have made. And recently we also expanded our European facilities in Amsterdam moved the warehouse, the Beijing warehouse in house clearly and we'll continue to see the kind of benefits we have done so far.
William D. McCombe: We also focused on what we mentioned in the past around what we call our design-in activities where we design a panel for a customer and, you know, use that as a way to sell more of our reagents. So that's another initiative.
Wenbin Jiang: Cytek cloud is another area we have leveraged to help drive our reagent business. And finally, we continue to invest in R&D and bringing in expanding our portfolio of reagents. We do custom reagents for certain customers, and we may then move those into the catalog. So that's another way of expanding our reagent business.
William D. McCombe: Another initiative. So there are multiple things we're doing on lots of different fronts.
Harrison Parsons: Great. Thanks again for taking the questions.
Operator: Again, as a reminder, if you would like to ask a question, press 1 on your telephone keypad. Your next question comes from the line of Andrew Cooper of Raymond James. Please go ahead.
Nolan: Hey, everyone. This is Nolan for Andrew. First question, going off of the other one around the 4Q guide and outlook for the year, we expected a bit of a step up just seasonally, but, you know, you mentioned some budget flush. How reliant is the April guide in the rest of the year on a step up or, like, a budget flush versus pure seasonality? So just trying to get a feel for the mix between what you do in terms of the step up.
William D. McCombe: When we use those terms, we're basically referring to the same thing. Our seasonality that we see is caused by customers, you know, spending the remaining available budget, or flushing it, if you will. So that really those two terms refer to the same phenomenon. And as we mentioned, we don't see that pretty typically every year. We saw that last year, and we've seen that regularly in previous years, and we sort of say we don't have any information to suggest that, you know, would not occur to some extent this year.
Nolan: Okay. Got it. Yeah. I just wanted to clarify whether when you meant budget flush that there was a significant, like, improvement in the market, but I understand the seasonality component in terms of this.
William D. McCombe: And as particularly biopharma companies budget on a calendar year basis, so as they get into Q4, they have some incentive to spend what the remaining amount that hasn't been spent in order to, you know, to make sure they spend the whole budget.
Nolan: Got it. Maybe lastly...
William D. McCombe: Okay.
Nolan: Yeah. Sorry. Yeah. I was gonna say my last one was just on capital deployment. You talked about a pretty strong balance sheet. And you expect to be cash flow free cash flow positive. So any appetite for more share buybacks? Maybe, what you're seeing in the acquisition pipeline, if there's any interest there.
William D. McCombe: Yeah. So short answer is we aim to our objective is to do both share repurchase and M&A to size our share repurchase. What we have done in the past is sized our share repurchase to be approximately equal to free cash flow. Year to date, we've actually spent more than our free cash flow on share repurchase. So as a result of that, because we were in excess of free cash flow, we didn't buy any shares in the third quarter, but generally, our objective is to buy our approach to share repurchase is to be opportunistic and to buy when we think it's particularly favorable.
But to size those purchases at somewhere broadly in the range of our free cash flow. So we are not making any changes to that general approach, and, you know, we'll execute as we see opportunities going forward. And then with respect to M&A, we continue to review a number of different opportunities. But as you know, M&A opportunities are episodic, and they come and go sort of in an irregular pattern. But we are seeing things. We are reviewing things. And it's our objective to grow through both organic and inorganic means.
Nolan: Awesome. Thank you.
Operator: That ends our Q&A session, and we appreciate your participation. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.