Matthew Sykes: Got it. And just to follow up on that. I’m not aware of any, but just any incremental color you’re hearing on value-based procurement and how that might affect flow cytometry. I know you do some clinical work there, and so obviously concentrated on other assays. But any impact to your business that you might see from that dynamic?
Wenbin Jiang: You mean clinical in China?
Matthew Sykes: Yes, just the value-based procurement programs that are rolling out. Just any potential headwind you see from that at all, or is it you feel like you’ll be relatively unaffected?
Wenbin Jiang: Yes, that’s exactly what I mean with regarding to the delay in tendering process in China is with regarding to the clinical. As you know, we did very well previously with regarding to clinical instrument sales in China, but Q3 definitely is a quarter we got impacted over there.
Matthew Sykes: Got it. And then just last question for me. Just as you look at the different instrument categories you have, I know you stopped reporting installed base in Q1, but just give us any sense for whether it’s Aurora, Northern Lights, cell sorter, et cetera, where you’re seeing relative positive strength or weaknesses and any differentiation in customers’ preference for price point or types of instruments in this weaker macroenvironment.
Wenbin Jiang: Although we don’t really split the instrument types, but overall, if we look at the distribution across different platform, we do see a slowdown in high-cost items versus the lower-priced tools. So that’s just another indication of the macroenvironment high interest rate that is impacting how customer buying their tools.
Matthew Sykes: Got it. Okay, thank you.
Operator: The next question comes from the line of Andrew Cooper of Raymond James. Andrew, please go ahead.
Andrew Cooper: Hey, thanks for the question. Maybe, first, like you pointed out, calling for a bit of a step up here into the fourth quarter. We certainly have heard from some other tools players a cautious tone on whether there’s a budget flush. So just maybe your thoughts around how much budget frees up in 4Q like we typically would see versus maybe anything else going on there to lead to that step up.
Wenbin Jiang: Indeed. Typically, Q4 is the best quarter for Cytek. And if we look at past history, certainly, it’s related to those type of budget flush. And we continue to foresee the same thing that will happen, but at what magnitude, this is something wait to see. But Q4 definitely is going to be the best quarter for Cytek that we still have the kind of confidence.
Andrew Cooper: Okay. Thank you. And then maybe just in terms of some of the customer conversations, I think it makes sense, you’re seeing the elongated sales cycles, you’re seeing that push to maybe a little bit lower-cost instruments. Have you seen many of those conversations that maybe get held up and the end result is you are able to close a sale, but it’s the lower end as opposed to the high-end instrument? Has that been something that’s occurred or anything that’s jumped out from those client conversations and client interactions that maybe mean we get a little bit more of that lower end versus a pure pushout of those higher-end purchases?
Wenbin Jiang: Yes. Looking at the growth rate across low-end and high-end, as I just mentioned about what we have seen, right? And we do see a higher growth for our lower-end instrument, especially the Northern Lights versus the high end of the instrument.
Andrew Cooper: Okay. And maybe I’ll just sneak in one more. Is there any additional color you can share on the reagent business and the kit business in terms of quantifying the growth there and where that business sits today?
Patrik Jeanmonod: Yes, I can take that. So the reagent segment is our second-fastest growing segment, still small. We’re talking about a mid-to-high single-digit as a percent of total revenue. But the growth rate are compelling, and we will continue to invest in that segment as we expect to continue to grow that segment substantially going into 2024. We like the recurring revenue coming out of it added to the service business, which makes us also unique to the extent that we can continue to build the growth revenue range for the coming years.
Wenbin Jiang: Yes. And to put it in perspective, reagent growth rate is more than double of our average growth rate for the overall revenue.
Andrew Cooper: Great. I’ll pass it on. Thank you.
Operator: The next question comes from the line of Tejas Savant of Morgan Stanley. Tejas, please go ahead.
Unidentified Analyst : Good evening, guys. This is Edmund. Thank you for the time. I just want to start out with your EU trends and what you saw in 3Q. I think it was a bit soft in 2Q for biopharma, and you guys were calling for a stronger second half. Did that play out to your expectations?
Patrik Jeanmonod: Yes, we continue to see softness in that biotech-pharma segment for sure. We obviously have a higher expectation for this segment. So overall, I think it’s a little lower than what we would expect. And that’s coupled with the academia that’s also not growing as much in the third quarter. Typically, you would have expected that to happen.
