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Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cytek Biosciences Fourth Quarter 2025 Earnings Call. [Operator Instructions] It is now my pleasure to turn the call over to Paul Goodson, Head of Investor Relations. You may begin.

Thank you, operator. Earlier today, Cytek Biosciences released financial results for the fourth quarter and year ended December 31, 2025. If you haven't received this news release or you'd like to be added to the company's distribution list, please send an e-mail to [email protected]. A copy of the news release is also available on the Investor Relations section of Cytek's website at investors.cytekbio.com. Joining me today from Cytek are Wenbin Jiang, CEO; and Bill McCombe, CFO. 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. As a reminder, on Slide 2, we will make statements during this call that are forward-looking statements within the meaning of the federal securities laws, including statements regarding Cytek's business plans, strategies, opportunities and financial projections. 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 on our slide presentation and in today's press release. While the company believes these non-GAAP financial measures provide useful information for investors, 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, February 26, 2026. With that, I will turn the call over to Wenbin.

Thanks, Paul. Welcome, everyone, and thank you for your interest in Cytek. On today's call, I would like to start with a discussion on our performance in the fourth quarter and the full year 2025 before turning the call over to Bill for a detailed look at our financials and our outlook. Turning to Slide 3. We exited 2025 in line with our expectations and delivered accelerating revenue growth quarter-over-quarter throughout the year despite challenging industry conditions. Fourth quarter revenue in 2025 reached $62.1 million, representing a year-over-year increase of 8% compared to the same period in 2024 and notably the highest revenue historically achieved in a quarter at Cytek. This growth was driven by a continuation of the trend we saw in the third quarter, namely stabilization and growth in the U.S., a turnaround in the EU, continued strength in APAC and the solid expansion of our recurring revenue businesses worldwide. Turning to Slide 4. Geographically, in the fourth quarter, EMEA and APAC both posted double-digit year-over-year percentage revenue increases with solid gains across instruments, reagents and service. Year-over-year fourth quarter revenue growth in EMEA was driven by strong instrument demand from academic and government customers and continued momentum in service revenue, partially offset by a decline in instrument revenue from biotech, pharma and CRO customers. For the fourth quarter of 2025 in the U.S., we saw mid-single-digit year-over-year growth in total revenue, driven by sentiment shifting in the academic and government market. This increase was partially offset by a decline in instrument sales to the biotech, pharma and CRO market, reflecting the typical fluctuations we see with this sector, particularly after a strong third quarter. Turning to Slide 5. Full year revenue in 2025 reached $201.5 million, representing a year-over-year increase of 1% compared to 2024. I want to take a moment to highlight the improvement in our revenue growth during 2025. For the first half of the year, total revenue was down almost 5% year-over-year due to public policy issues affecting life sciences spending. Our momentum pivoted in the second half with total revenue up 5% compared to the second half in 2024. This return to growth reflects improved trends and increased customer demand. Importantly, our overall performance in 2025 demonstrates the durability of our business, particularly when compared to the evidence of declines in cell analysis and life science instrument demand through the end of the third quarter. We believe our success at delivering revenue growth in 2025 was achieved through the strength of our brand and technology, the diversification of our revenue streams across multiple geographic regions and a growing contribution from recurring revenue. We believe this return to growth will continue in 2026. I would now like to update you on the progress our team has made across our core strategic pillars, instruments, applications, bioinformatics and clinicals to further reinforce Cytek's position as a market leader in next-gen cell analysis solutions. Starting with our core instruments on Slide 6. In the fourth quarter, we expanded our global footprint by 208 instruments, bringing Cytek's total installed base to 3,664 units. In 2025, challenging market environment, we believe the growth in our FSP instrument revenue reflects the superior performance of Cytek's products, our brand recognition and the underlying strength of our core business. We are particularly pleased with the growth in our sales for the unit volume, which grew 22% in 2025 compared to the prior year and accelerated to 26% growth in the fourth quarter over the prior year period. We have also been very pleased with the performance of our new Cytek Aurora Evo system. In the short time since its launch last May, it has been tremendously successful, driving 21% unit growth in the combined Aurora category in the fourth quarter versus Q4 of 2024. I'm also pleased to highlight that the Muse Micro System was recently awarded the 2025 Biotech Breakthrough Awarded for Drug Discovery Solution of the Year. As we previously noted, the Muse Micro analyzer is an ideal choice for researchers and labs seeking cost-effective flow cytometry solutions and has had a very strong reception since its introduction last year. These new product offerings reflect our commitment to maintaining our position at the forefront of the technology innovation in cell analysis generally and flow cytometry specifically. I would now like to turn to our next growth pillar applications, which is comprised of our reagent business. We delivered more than 20% growth in reagents in the fourth quarter in all of our geographic regions, except the U.S. Our reagent growth continues to be driven by the improvements we put in place in 2025, including best-in-class delivery times, a large catalog of reagents and new initiatives and strategies on reagent sales. Turning to Slide 7. Our recurring revenue continues to strengthen as our installed instrument base expands. For all of 2025, recurring revenue represented 34% of total revenue and notably grew 21% year-over-year. We expect the recurring revenue proportion of total revenue will continue to grow steadily with increased cumulative instrument placements and to become an increasingly larger share of our business over time. In bioinformatics, our software ecosystem continues to be a powerful growth driver. The advanced software embedded directly in our instruments, combined with the capabilities of the Cytek Cloud are highly valued by our customers and are accelerating adoption of our products. By year-end 2025, the number of users on the Cytek Cloud grew to over 24,000, representing growth of more than 50% in a single year and reaching nearly 8 users per installed FSP instrument. Our expanding digital footprint enhances the attractiveness of our offerings overall and helps to drive reagent revenue growth. Before turning to our financial results, I want to highlight the meaningful operational progress we achieved in 2025. Early in the year, we established a new manufacturing facility in Singapore and optimized our broader global operational footprint. These actions strengthened our region for region manufacturing strategy and further reinforced the resilience of our supply chain. I'm particularly proud that the Singapore site began generating revenue in less than 100 days from when we started the build-out. Importantly, these initiatives also positioned us to mitigate the impact of the still evolving tariff policies worldwide. Now I would like to ask Bill to review our financials.

Thanks, Wenbin. Before I discuss the quarterly and full year numbers, I want to comment on the macro trends we saw play out across the quarters of 2025. Beginning in the first quarter, macro uncertainties and weak demand resulted in total revenue declining 8% year-on-year. In Q2 and Q3, revenue growth stabilized with minus 2% and plus 2% growth, with growth in our service and APAC businesses being offset by declines, particularly in EMEA. Then in Q4, as we had expected, we saw EMEA stabilize while other markets continue to grow and overall revenue growth increased to 8%. We believe this turnaround is reflective of more durable trends in our markets as we have seen these trends continue into 2026, which has informed the full year 2026 guidance I will share with you in a moment. Turning to Slide 8. Fourth quarter revenue was $62.1 million, up 8% year-over-year. Growth was driven by strong global performance in service and reagents, continued momentum in instrument demand across Asia Pacific and a rebound in EMEA instrument demand among academic and government customers. Currency movements were also a factor contributing 3% to growth in the quarter. In the U.S., instrument revenue was flat as strength in academic and government offset softer demand from biotech and pharma. Globally, in the quarter, revenue from academic and government customers grew 33% off a weak prior year comparison, while biopharma revenue declined 6% against a strong Q4 last year. Product revenue, which is comprised of instruments and reagents, increased 3% versus Q4 of 2024, driven by double-digit gains in APAC and EMEA as well as a low single-digit gain in the U.S. U.S. product revenue continued the stable trend from Q3, attributable to a strong double-digit increase in instrument revenue from academic and government customers compared to a weak fourth quarter in 2024. This was offset by weakness in pharma biotech instrument sales in Q4 after their strong purchases in the third quarter of 2025. Our instrument sales in the U.S. was supported by the launch of our new Aurora EVO instrument as well as pent-up demand from and stabilized funding of academic and government customers. In EMEA, the situation was somewhat similar to the U.S. The double-digit percentage increase in EMEA product revenue was primarily driven by outsized gains in revenue from academic and government customers compared to a weak Q4 in 2024. Also similar to the U.S., EMEA revenue from pharma biotech was weak in Q4 compared to a strong year ago quarter. While our reagent revenue is still a mid-single-digit percentage of our total revenue, it grew more than 20% in Q4 and more than 25% for all of 2025. As we've mentioned previously, this strong growth is due to a number of initiatives we implemented at the beginning of 2025, including attaining industry-leading delivery times, offering a large catalog of reagents, creating a new dedicated reagent sales team and introducing new reagent products. Service continued to deliver strong recurring revenue growth with 25% growth in Q4 versus the prior year quarter. This was driven by growth in the installed base and active usage of our systems. We expect service to continue to grow based on these factors, although its growth will slow gradually as the number of installed instruments grows, making the denominator larger in that calculation. Turning to geographic market performance. Total U.S. revenue grew 5% in Q4 versus prior year, driven by double-digit service revenue growth. EMEA grew 21% due to strength in service and instrument revenue from academic and government customers. APAC, including China, grew 15% in Q4, driven by growth in instrument service and reagents. GAAP gross profit was $32.9 million, a 2% decline versus the $33.7 million in Q4 of 2024. GAAP gross profit margin was 53% versus 59% 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 higher materials and tariff costs and higher manufacturing overhead due to the duplicate costs from transitioning a production facility overseas. Adjusted gross profit margin, which excludes stock-based compensation and amortization of acquisition-related intangibles was 55% in Q4, down from 61% in the prior year quarter. Total operating expenses were $38.5 million in Q4, up $7.8 million or 25% versus Q4 of '24, which included a nonrecurring expense reduction of $2.6 million related to a change in estimate for a license and royalty settlement liability adjustment. Excluding this expense reduction, the increase was $5.2 million. This was driven by higher general and administrative and sales and marketing expenses, partially offset by lower R&D. Research and development expenses were $9 million, down 8% versus the year ago quarter, primarily due to lower headcount and compensation expenses and lower engineering expenses. Sales and marketing expenses were $13.1 million, up 11% versus the year ago quarter due to higher headcount and compensation expenses and higher sales commissions. General and administrative expenses were $16.4 million, up $7.3 million from the year ago quarter, which included the $2.6 million reduction I mentioned before. Excluding this reduction, the increase would have been $4.7 million or 40%. The increase was primarily attributable to legal expenses related to a patent litigation case and higher compensation, software and bad debt expenses. Loss from operations was $5.6 million for Q4 versus a $3 million income from operations in the year ago quarter, which included the $2.6 million nonrecurring expense reduction that I mentioned before. Excluding this amount, income from operations in Q4 '24 would have been $0.3 million. The remaining decline in income from operations of $5.9 million was due to $0.8 million lower gross profit and $5.2 million higher operating expenses. Net loss in Q4 was $44.1 million versus net income of $9.6 million in the prior year quarter. The current quarter net loss of $44.1 million included the recording of a $38.1 million valuation allowance or write-off against deferred tax assets under ASC 740 due to the uncertainty of realizing the associated future tax benefits. This is solely an accounting determination that does not affect our ability to use these losses for tax purposes and is a noncash item. Moreover, it is an unusually large amount as these deferred tax assets have been accumulated over multiple years, and this was the first time such a valuation allowance had been taken. Excluding this valuation allowance, the net loss would have been $6.0 million. Net income in Q4 '24 included a nonrecurring benefit of $6.7 million after tax associated with the settlement liability adjustment I mentioned before. Excluding this item, net income would have been $2.9 million. The remaining increase in net loss of $8.9 million was primarily due to $0.8 million lower gross profit, the $5.2 million increase in operating expenses and a $2.5 million increase in other tax expense, principally on foreign earnings. Adjusted EBITDA, which excludes the stock-based compensation and foreign exchange impacts, declined to $4.5 million from $12.5 million in the year ago quarter, which included the $2.6 million nonrecurring benefit I described above. Excluding this amount, adjusted EBITDA in Q4 '24 would have been $9.9 million. The decline of $5.4 million was primarily due to higher operating expenses of $5.2 million and lower gross profit of $0.8 million. Free cash flow during Q4 '25 was slightly negative at minus $0.2 million, modestly decreasing our total cash and marketable securities to $261.5 million at December 31, 2025, from $261.7 million at the end of the third quarter. Now turning to Slide 9 for the full year 2025. Total revenue for the year ended December 31, 2025, was $201.5 million, a 1% increase over the prior year. The increase in total revenue in 2025 was primarily driven by a 21% growth in worldwide service revenue and double-digit growth in APAC product revenue, offset by a slowdown in EMEA and U.S. product revenue. GAAP gross profit was $104.5 million for 2025, a decrease of 6% compared to a GAAP gross profit of $111.1 million in the prior year. GAAP gross margin was 52% for 2025 compared to 55% in the prior year. The decline was primarily due to higher service headcount and material costs, higher tariffs and higher manufacturing overhead costs due to transitioning the production facility overseas, as I mentioned before. Adjusted gross margin, which excludes stock-based compensation and acquisition-related intangibles for 2025 was 55%, down from 59% in the prior year. Operating expenses were $144.8 million for 2025 compared to operating expenses of $131.6 million in the prior year, which included the nonrecurring reduction of $2.6 million I described before. Excluding this reduction and a nonrecurring ATM offering cost write-off in Q3 2025, the increase would have been $9.9 million or 7%. This was primarily due to higher G&A costs offset by lower R&D costs. Research and development expenses were $36.5 million, down from $39.4 million or 7% versus the year ago quarter, primarily due to lower headcount and engineering expense. Sales and marketing expenses were $49.4 million, up 1% versus the $49.1 million in the year ago quarter. General and administrative expenses were $58.9 million versus the $43.1 million in the year ago quarter, which included the $2.6 million reduction I mentioned before. Excluding this reduction and the nonrecurring offering cost write-off, the increase would have been $12.5 million or 27%. The increase was primarily attributable to higher legal expenses related to the patent litigation case I mentioned before, higher compensation, sales and use tax and software expenses. Loss from operations in 2025 was $40.4 million, which included a $0.7 million nonrecurring deferred ATM facility offering cost write-off. This compares to a loss of $20.5 million in 2024 or $23.1 million, excluding the $2.6 million nonrecurring expense reduction I described before. Excluding both these nonrecurring items, the loss from operations increased by $16.6 million, which was due to $6.6 million lower gross profit and $9.9 million higher operating expenses. GAAP net loss for the year ended December 31, 2025, was $66.5 million -- this included the recording of a $33.1 million valuation allowance or write-off against deferred tax assets, as I described before in relation to Q4 due to the uncertainty of realizing the associated future tax benefits. As mentioned before, this was an unusually large amount due to the first-time nature of this allowance. The GAAP net loss also included the $0.7 million nonrecurring offering cost write-off mentioned earlier. Excluding these items, GAAP net loss for 2025 would have been $32.7 million compared to a net loss of $6 million or $12.7 million, excluding the $6.7 million nonrecurring benefit from the settlement liability adjustment described before. Excluding these nonrecurring items, GAAP net loss increased by $20 million in 2025. This was due to $6.6 million lower gross profit, $9.9 million higher operating expenses and $3.3 million higher taxes, mainly on foreign earnings. Adjusted EBITDA was $5 million in 2025, which excludes the nonrecurring items mentioned earlier, foreign exchange impacts and stock-based compensation expense. This compared to $22.4 million in 2024. The decline of $17.4 million was primarily due to $6.6 million lower gross profit, $9.9 million higher operating expenses and $2.3 million lower stock-based compensation. Adjusted EBITDA, excluding investment income, declined from $14.4 million in 2024 to a negative $3.1 million in 2025. Consistent with our historical focus on cost control and profitability, we are committed to improving these metrics going forward. Cash, cash equivalents and marketable securities totaled $261.5 million as of December 31, 2025. This represents a decrease of $16.4 million from the $277.9 million at the end of December 2024, in part reflecting the repurchase of $15.1 million of Cytek stock in our stock repurchase program during 2025. This $15.1 million repurchased approximately 3.3 million shares at a weighted average cost of $4.58 per share, leaving us with 128.6 million shares outstanding as of December 31, 2025. Our strong balance sheet and positive cash generation underscore our ability to invest in our global growth initiatives. Turning to our full year guidance 10. We are initiating our 2026 revenue outlook at $205 million to $212 million, assuming constant currency exchange rates. We are also not assuming any significant benefit at this time from changes in the tariff environment going forward. This guidance range reflects the improved market environment in EMEA and the U.S. and continued strong growth in APAC instruments and in our service and reagent businesses globally. We expect these dynamics to continue. Importantly, we continue to believe our performance in Q4 and full year 2025 reflects a strong market leadership position in what has been a difficult environment. Our core business is now showing positive growth in all major regions and our recurring revenue continues to grow. Notwithstanding some temporarily elevated operating expenses, we delivered positive adjusted EBITDA for full year 2025, which we anticipate will continue in 2026. As we've done previously, we believe we will continue to perform well relative to the overall flow cytometry market, which is also beginning to show signs of stabilization. With that, I will turn it back over to Wenbin.

Thanks, Bill. Turning to Slide 11. I want to close by thanking our Cytek team. This year, we were recognized as a public company growth leader in America by Time Magazine. This validation is a testament to Cytek's outstanding record of growth and innovation over the last 5 years. Overall, I believe our fourth quarter and full year performance during a challenging 2025 reflects the resilience of our organization and the strength of our leadership in the flow cytometry market. Our broad-based execution positions us well for 2026, where our priorities remain focused on driving the market penetration of our instrument platforms continuing to advance our technological leadership with innovative new products, driving the growth of our recurring revenue lines and delivering profitable, sustainable growth. I want to thank everyone for joining today's call, and we will now open it up for questions. Operator?

[Operator Instructions] And from TD Cowen, our first question comes from the line of Brendan Smith.

I appreciate all the color. I actually wanted to maybe ask a little bit higher-level question just about some of the underlying assumptions of the growth of the overall flow cytometry market. You guys gave a lot of good color on different end market breakdown. And I think we've seen something like 8% to 9% CAGR maybe up to 2031 or '32, if I'm not mistaken. But I guess, irrespective of that exact number, do you have a sense kind of given your global exposure there of relative end market breakdown of that growth? And I guess, maybe better put, are there geographic considerations for expansion of the market that you think you'd be maybe better positioned to capitalize on, just especially given your strength in APAC. Just kind of wondering how you're thinking about that overall. Thanks, guys.

Yes. I think -- Brendan, this is Bill. I think we've seen consistent double-digit growth in the market in APAC, at least in our revenues in APAC. We may have done a little better than the market, particularly given our growth in sorters and the Aurora franchise. So -- but our sense is that, there's a decent mid-single digits, mid- upper single digits growth in that market, in that region. And we think that Europe has probably been the slowest market, certainly has been for us. And the U.S. falls somewhere in between. we recorded -- we think we've done better than the market overall in the U.S. and in EMEA. Hard to really estimate what the market is doing in those regions. We've seen some negative growth by some of our competitors, but it's hard to extrapolate. Wenbin, do you have any other comments?

No, I think that summarizes it well.

And look, I think we're in a the market growth rates that we've seen in the last couple of years have certainly been below most of the estimates that we -- most of the market studies for 5-year growth for flow cytometry cohort -- growth rates that are in the high single digits on a global basis, and we obviously have been temporarily below that for the last couple of years, but we expect it to rebound.

From Piper Sandler. Our next question comes from the line of David Westenberg. Please go ahead.

This is Skye on for Dave. Thanks for taking the question. Just to start off, what was the end of year growth acceleration, what was that driven by? Was it primarily academic budget cycles? Or are you seeing a recovery in pharma spending? And how should we think about budgets for 2026?

We think -- yes, we saw, as I mentioned in my remarks, an improving environment across each of the quarters of 2025. So the first quarter was not so great with minus 8% revenue growth. And then we saw a stabilization going back to minus 2% in Q2, plus 2% in Q3 and then plus 8% in Q4. And I think that was driven by a normalization, a combination of a normalization in the academic and government spending market. We saw some catch-up disbursements from the NIH, and we think some catch-up spending that had been deferred from earlier in the year. So all those factors were at play. We also had a currency benefit in EMEA. So when we look, we put all that together, we think that the uncertainties that impacted the markets in the first part of 2025, particularly the first quarter, seem to have receded, and we're seeing improving particularly strong academic and government quarter in the fourth quarter. And we think, as I said, there's a combination there of just a fundamentally improved sentiment and some catch-up. And we're expecting -- we're assuming a continuation of that more positive environment in our guidance.

Yes. Globally, academic and government sectors have done well in Q4.

We saw 5% growth in academic and government for the full year and 9% in the second half. And that's across both our product and service businesses. So that second half growth is in academic and government is obviously pretty solid.

Very helpful. And just lastly, what was the mix in 2025 between new customer acquisitions versus existing customers maybe expanding their capacity? And do you have any idea where you might see this mix for 2026?

Yes. We don't really break out those statistics just to say it's a combination of both. We have a lot of customers who have purchased multiple systems and continue to prefer our technology. Pharma companies, as we've indicated in the past, once they make a technology choice, they tend to stick with it. But then we're also seeing conversions from competitor systems.

From Stephens. Our next question comes from the line of Mason Carrico.

This is Ben on for Mason. How are you thinking about maybe your commercial investments in 2026? Are you comfortable with the size of the sales teams today? And is there anywhere you're looking to invest in the next year?

Yes. Overall, as you can see, we have been focused on high end of the market segment and represented by the products like Aurora EVO and Aurora Cell Sorter, which grew double digit last year and in Q4. And on the commercial side, clearly, and we are reviewing and the segment, we are clearly weak, and we are going to continue to invest in those segments to drive the future revenue growth.

Yes. We have also made investments in our reagent sales force as well. So the commercial side will continue to be an area of focus for investment.

Got it. And then what's your willingness to be flexible on pricing this year to help drive instrument placements?

So Cytek, pricing is always market driven, and we -- our cost structure is very competitive, and we can deal with any situations as needed.

[Operator Instructions] Our next question comes from the line of Andrew Cooper with Raymond James. Please go ahead.

Maybe just one, there was a comment or a couple of comments there about some pent-up demand helping 4Q. Can you just give a sense for the magnitude of what you feel like was sort of makeup volume from maybe earlier in the year or the last few years versus what you view as sort of that steady-state growth trajectory of the business as you think about where it sits today in the current end market?

Yes. That's a hard one to estimate. I think if you look at our total academic and government revenues, which are publicly disclosed, starting with fourth quarter of last year, we were $21 million and $17 million, $22 million, $18 million and then $28 million in Q4. So we had a significant jump there, as I said, a lot of that is attributable to a better environment, but it's also possible that some of those weaker numbers in early 2025 were, in fact, just deferments of money that got spent later in the year. It's really impossible to sort of pause it out. You'd have to you have to do a customer-by-customer survey and dive into what their intentions were. And obviously, we don't do that. I think pharma segment is much more stable. And there, we had pretty stable revenue between Q3 and Q4 was basically the same.

Sure. Helpful. Maybe just thinking about the guide a little bit and trying to put it in context of some of that commentary. You just did sort of 5-ish percent organic. You talk about the market feeling like it's getting a little bit better, a little bit more stable, and you guided to 2% to 5% growth for the year. So -- what happens in the end market to make you feel like 2% is the right number as opposed to 5%? And what happens to get you above that if we're already assuming that things are maybe a little bit better through most of '26 than they were through most of '25?

Yes. So the way we thought about the guide was we expect continuation of strong growth in service and reagents. In service because our installed base is growing and reagents, we're starting from a small base and its growing quickly. We expected modest -- flat to modest growth in instruments, and then frankly, we put in some range of contingencies, to account for uncertainties. Because --at this time last year there were some black swans that emerged. And so we wanted to have a cushion to account for those sorts of things. So that was the thinking that went into the range. At the high end of the range, obviously, that would represent a smaller level of contingency and better performance in the instrument business.