Cytek's 2025 Q2 Earnings: Navigating Contradictions in Sales, Margins, and Market Growth

Revenue Performance and Market Dynamics:
- Cytek Biosciences reported $45.6 million in revenue for Q2 2025, down $1 million or 2.2% compared to Q2 2024.
- The decrease was due to lower product revenue in EMEA and APAC, partially offset by strong growth in service revenue worldwide.
- The overall flow cytometry market is experiencing a decline, primarily due to funding challenges and reduced capital expenditure, but Cytek has maintained growth in its core business.

Recurring Revenue Growth:
- Service and Reagent revenue each increased by 18% versus Q2 2024, contributing significantly to Cytek's recurring revenue.
- Recurring revenue businesses reached 32% of trailing 12-month sales in Q2, growing 16% year-over-year.
- This growth is driven by the expanding installed instrument base and increased utilization of Cytek's technologies.

Instrument Sales and Market Segmentation:
- U.S. revenue increased 7% year-over-year, driven by service and reagent growth, with instrument sales flat.
- EMEA revenue declined 11% due to lower instrument sales to pharma, biotech, and CRO customers, offset by growth in academic and government customers and services.
- The decline in EMEA was primarily due to broader pressures in instrument orders from academic and government customers.

Product Launch and Innovation Strategy:
- Cytek launched the Aurora Evo system, setting a new standard for full spectral flow cytometry, with enhanced capabilities like faster sample throughput and automated startup.
- The launch aims to address evolving needs of researchers and accelerate broader adoption of Cytek's technology.
- The innovation is part of Cytek's strategy to differentiate and maintain a competitive edge in the market.