Brian McKelligon: I realize now Kyle asked a little bit about specifics on pull-through. So we have right now, John, about two-thirds of all the PhenoCyclers are sitting with the Fusion. And we’ll probably get through most of those upgrades kind of throughout this year. And as we look at pull-through on that system, like as Johnny noted, kind of in the high-30s, as we exited the year, we exited last year, somewhere around the high-20s or so. So I think that trend line continues throughout 2024, and into 2025, doing 40, 50, 60s, I think we can easily get to that realm. Many of our high end users are operating at 5x plus that average pull-through number. So I think there’s an opportunity for us to really raise the curve on all of them.
What we’re seeing, particularly with the 2.0, John, is a real pressing need amongst our PhenoCycler-Fusion users to really start to press the plex level even more. So you’re 50, 60, 70 plex, and they’re doing that with more samples and that’s why the PhenoCycler-Fusion 2.0 users are the highest pull-through users. So it’s about moving all of those customers up to that 2.0.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Mark Massaro from BTIG. Your line is open.
Mark Massaro: Hey guys, thanks for taking the questions and congratulations on a strong 2023. I guess my first one is on the guidance $114 million to $118 million, I think it calls for 18% to 22%. In your preannounced in January, you talked about 20% plus. So obviously you’re in line with that. I’m just curious if the 18% somehow might be factoring in pressures related to macro or China or elongated sales cycles. And then, maybe can you just give us a sense for the demand environment in the U.S.? Obviously that’s been a stronger territory for you with respect to other geographic regions. So just give us a sense for perhaps anything you have on geographic growth and how we should think about that this year.
Brian McKelligon: Yes, I’ll do those. Thanks, Mark. I appreciate your question and your time. So if you go through and look at our growth across the regions, North America, as you noted was the strongest and we think it will continue to be the strongest. It was in the sort of high 30% realm, and I think it’ll probably stay there. And I don’t think these geographic trends change meaningfully in 2024. EMEA was kind of in the low-20s, Mark, in terms of its year-over-year growth in 2023. And then APAC was like high-single-digits. And most of that was because the team was able to pivot to other regions, Japan, Australia, et cetera, Korea, South Korea, to get — to compensate for the contraction in APAC. I think those trends continue into 2024.
I think you’re right in terms of the low end of the range is really intended to account for those pressures being even more pronounced. One thing though, if and when we do, Mark, secure more partnerships like Acrivon, those are largely additive to our guide. There may be a portion of those that’s embedded within our expectations for continued growth of our services business. But additional large scale CDx deals, like another Acrivon with a large biopharma, that would be additive to that range. And certainly if and when those do occur, we’ll clarify that. So hopefully, that that answers your questions.
Mark Massaro: Yes, that’s helpful. And then, my last question, could you may be zero in a little bit about what you’re seeing in terms of customer demand for PhenoCode discovery and signature panels? And then, any — any way to as we’re tuning up our models, how should we think about reagent growth? Obviously, this is a year where you’re coming into the year with about 1,200 systems. Just give us a sense for how you think reagent growth might track relative to prior years.
Brian McKelligon: Yes. I’ll let Johnny speak to how much detail we want to give because we don’t guide on a product basis. But I would say, Mark, that reagents is going to be, in terms of dollars, are probably our largest growth driver because it’s moving so quickly as you saw from, I think it was a $5.7 million in Q3 and $6.9 million in Q4. So you can see we’re beginning to realize the benefits of many of the workflow solutions that we put on the market. And then we think those trends maybe not linearly continue throughout the year. So that’s how I would look at that. And Johnny, I don’t know if you want to add any more color in terms of the specifics on reagents.
Johnny Ek: No, only to say, to highlight sort of what you said, which I think, look back to 2022, obviously, it was sort of in that $4 million range, moved into the $5 plus million range in 2023, and really exited 2023 in that $7 million per quarter. And we expect that to continue. It’s sort of naturally taken these steps and certainly will be an important focus that will help to drive the margin goals that we have as well in 2024.
Mark Massaro: Okay. Actually, if I can sneak one more in, great progress on getting to that operating cash flow break-even by year-end 2024, certainly a year ahead of expectations from recent comments. There’s been a decent amount of M&A. Some of it’s been larger; some of it’s been smaller. But as you’re about to turn the corner to cash flow break-even, are there certain assets out there, even if they are of the tuck-in variety that might be enticing to you and maybe just speak, if you will, about the M&A environment broadly?
