Q - Quantum-Si

Previous wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with (i) the unaudited Condensed Consolidated Financial Statements and notes thereto contained in this Quarterly Report on Form 10-Q, (ii) the Consolidated Financial Statements and notes thereto for the year ended December 31, 2024 contained in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2025, and (iii) our other public reports filed with the SEC. This discussion contains forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2024 and this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, the “Company” or “Quantum-Si” are intended to mean the business and operations of Quantum-Si Incorporated and its consolidated subsidiaries. The unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2025 and 2024 present the financial position and results of operations of Quantum-Si Incorporated and its consolidated subsidiaries.

Current wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with (i) the unaudited Condensed Consolidated Financial Statements and notes thereto contained in this Quarterly Report on Form 10-Q, (ii) the Consolidated Financial Statements and notes thereto for the year ended December 31, 2024 contained in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2025, and (iii) our other public reports filed with the SEC. This discussion contains forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2024, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and in other filings that we make with the Securities and Exchange Commission. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, the “Company” or “Quantum-Si” are intended to mean the business and operations of Quantum-Si Incorporated and its consolidated subsidiaries. The unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025 and 2024 present the financial position and results of operations of Quantum-Si Incorporated and its consolidated subsidiaries.

Previous wording

Results of Operations for the Three Months Ended March 31, 2025 as Compared to the Three Months Ended March 31, 2024

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2025 as Compared to the Three and Six Months Ended June 30, 2024

Previous wording

The following table presents the Condensed Consolidated Statements of Operations and Comprehensive Loss for thethree months ended March 31, 2025 and 2024 (dollars in thousands):

Current wording

The following table presents the Condensed Consolidated Statements of Operations and Comprehensive Loss for thethree and six months ended June 30, 2025 and 2024 (dollars in thousands):

Previous wording

(1)“nm” indicates amount is not meaningful.

Current wording

(1)“nm” indicates change is not meaningful.

Previous wording

Revenue, Cost of revenue and Gross profit for thethree months ended March 31, 2025 and 2024 are as follows (dollars in thousands):

Current wording

Revenue, Cost of revenue and Gross profit for thethree and six months ended June 30, 2025 and 2024 are as follows (dollars in thousands):

Previous wording

Gross profit margin was 57.7% for thethree months ended March 31, 2025, as compared to 58.9% for the same period in 2024. This change in margin was primarily based on the mix of products sold during each period and includes approximately a 7% and 10% benefit for thethree months ended March 31, 2025 and 2024, respectively, for inventory utilized that was carried at low or no value that predates the commercial launch of our Platinum line of instruments. Our gross profit margin will continue to be impacted by this utilized inventory and has also been impacted and may continue to be impacted by inventory acquisition costs. We expect gross profit margin to be variable for the foreseeable future as we work through our continued commercialization efforts.

Current wording

Gross profit margin was 59.4% and 58.4% for thethree and six months ended June 30, 2025, respectively, as compared to 56.9% and 57.7% for the same periods in 2024, respectively. This change in margin was primarily based on the mix of products sold during each period and includes approximately a 13% and 7% benefit for the three and six months ended June 30, 2025 and approximately a 9% and 11% benefit for the three and six months ended June 30, 2024, respectively, for inventory utilized that was carried at low or no value that predates the commercial launch of our Platinum line of instruments. Our gross profit margin will continue to be impacted by this utilized inventory and has also been impacted and may continue to be impacted by inventory acquisition costs. We expect gross profit margin to be variable for the foreseeable future as we work through our continued commercialization efforts.

Previous wording

Research and development expenses for thethree months ended March 31, 2025 and 2024 are as follows (dollars in thousands):

Current wording

Research and development expenses for thethree and six months ended June 30, 2025 and 2024 are as follows (dollars in thousands):

Previous wording

Research and development expenses increased by$1.6 million, or 13.4%, for thethree months ended March 31, 2025, when compared to the same period in 2024. This increase was primarily due to a $1.7 million increase in fabrication and outsourced services, a $0.2 million increase in professional services and consulting fees and a $0.3 million net increase in other research and development expenses. These increases were partially offset by a $0.4 million decrease in payroll and payroll related costs and a $0.2 million decrease in laboratory supplies expense. In general, our research and development expenses have increased as we continue development on our recently announced Proteus platform.

Current wording

Research and development expenses increased by $0.8 million, or 5.8%, for the three months ended June 30, 2025, when compared to the same period in 2024. This increase was primarily driven by a $2.0 million increase in fabrication and outsourced services partially offset by a $0.5 million decrease in payroll and payroll-related costs, a $0.4 million decrease in write-downs of inventory that no longer had an alternative future use and a $0.2 million decrease in professional services and consulting fees.

Previous wording

Selling, general and administrative expenses for thethree months ended March 31, 2025 and 2024 are as follows (dollars in thousands):

Current wording

Selling, general and administrative expenses for thethree and six months ended June 30, 2025 and 2024 are as follows (dollars in thousands):

Previous wording

Selling, general and administrative expenses increased $0.4 million, or 3.1%, for the three months ended March 31, 2025, when compared to the same period in 2024. This increase was primarily due to a $1.0 million increase in payroll and payroll related costs, which includes a $0.6 million increase in stock-based compensation expense. The remaining $0.4 million increase in payroll and payroll-related expenses includes a $0.6 million increase related to investments made in commercial operations offset by a $0.2 million reduction in general and administrative payroll and payroll related costs. These increases were partially offset by a $0.2 million decrease in legal fees, a $0.2 million decrease in depreciation and $0.3 million net decrease in other selling, general and administrative expenses.

Current wording

Selling, general and administrative expenses decreased $0.2 million, or 0.7%, for the six months ended June 30, 2025, when compared to the same period in 2024. This decrease was primarily due to $0.4 million decrease in depreciation expense, a $0.3 million decrease in legal fees, a $0.2 million decrease in insurance costs, a $0.2 million decrease in software expense, a $0.1 million decrease in tax expense and a $0.4 million net decrease in other expenses. These decreases were partially offset by a $1.0 million increase in stock-based compensation expense and a $0.3 million increase in payroll-and payroll-related costs.

Previous wording

For the three months ended March 31, 2025 and 2024, dividend and interest income is derived primarily from fixed income securities and money market mutual funds.

Current wording

For thethree and six months ended June 30, 2025 and 2024, dividend and interest income is derived primarily from fixed income securities and money market mutual funds.

Previous wording

Dividend and interest income for thethree months ended March 31, 2025 and 2024 are as follows (dollars in thousands):

Current wording

Dividend and interest income for thethree and six months ended June 30, 2025 and 2024 is as follows (dollars in thousands):

Previous wording

Dividend and interest income decreased by$1.0 million, or 28.7% for thethree months ended March 31, 2025, as compared to the same period in 2024. This decrease was a result of lower market interest rates on invested capital.

Current wording

Dividend and interest income decreased by$0.6 million and$1.6 million for thethree and six months ended June 30, 2025, respectively, as compared to the same respective periods in 2024. These decreases are a result of lower market interest rates on invested capital and lower average invested capital in thethree and six months ended June 30, 2025.

Previous wording

Change in warrant liabilities for thethree months ended March 31, 2025 and 2024 is as follows (dollars in thousands):

Current wording

Change in warrant liabilities for thethree and six months ended June 30, 2025 and 2024 is as follows (dollars in thousands):

Previous wording

For the three months ended March 31, 2025, we recognized $3.4 million of income from the decrease in the fair value of warrant liabilities as compared to $0.3 million of income from the decrease in the fair value of warrant liabilities for the same period in 2024, an increase of $3.1 million, or 966.1%. These decreases in warrant value were primarily driven by the change in the underlying trading price of our Class A common stock during the periods reported.

Current wording

For the six months ended June 30, 2025, we recognized $2.4 million of income from the decrease in the fair value of warrant liabilities as compared to $0.8 million of income from the decrease in the fair value of warrant liabilities for the same period in 2024, an increase in income of $1.6 million, or 202.4%.

Previous wording

Other expense, net, typically consists of currency revaluations and income from credit card cash rewards programs. Other expense, net, for thethree months ended March 31, 2025 and 2024 is as follows (dollars in thousands):

Current wording

Other expense, net, typically consists of currency revaluations and income from credit card cash rewards programs. Other expense, net, for thethree and six months ended June 30, 2025 and 2024 is as follows (dollars in thousands):

Previous wording

The following table presents a summary of our condensed consolidated cash flows for operating, investing, and financing activities for thethree months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table presents a summary of our consolidated cash flows for operating, investing, and financing activities for thesix months ended June 30, 2025 and 2024 (in thousands):

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities of $26.2 million was primarily due to a net loss of $19.2 million resulting from continued spend on research and development and commercialization efforts, net changes in operating assets and liabilities of $6.1 million, a change in fair value of warrant liabilities of $3.4 million, primarily driven by the change in the underlying trading price of our Class A common stock, and accretion on marketable securities of $2.1 million partially offset by stock-based compensation of $2.4 million, depreciation and amortization of $0.9 million and write-downs of inventory of $0.7 million.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities of $46.4 million was primarily due to a net loss of $48.0 million resulting from continued spend on research and development and commercialization efforts, accretion on marketable securities of $4.3 million, a change in fair value of warrant liabilities of $2.4 million, primarily driven by the change in the underlying trading price of our Class A common stock, and net changes in operating assets and liabilities of $1.3 million partially offset by stock-based compensation of $5.3 million, depreciation and amortization of $2.1 million, non-cash lease expense of $1.3 million and write-downs of inventory of $1.0 million.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities of $23.2 million was primarily due to a net loss of $19.5 million resulting from continued spend on research and development and commercialization efforts, net changes in operating assets and liabilities of $5.2 million and accretion on marketable securities of $2.1 million partially offset by stock-based compensation of $1.6 million and depreciation and amortization of $1.1 million.

Current wording

For the six months ended June 30, 2024, net cash used in operating activities of $41.8 million was primarily due to a net loss of $42.6 million resulting from continued spend on research and development and commercialization efforts, accretion on marketable securities of $4.3 million, net changes in operating assets and liabilities of $3.4 million, and a change in fair value of warrant liabilities of $0.8 million, primarily driven by the change in the underlying trading price of our Class A common stock partially offset by stock-based compensation of $4.1 million, depreciation and amortization of $2.4 million, write-downs of inventory of $1.6 million and non-cash lease expense of $1.2 million.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $34.2 million compared to net cash used in investing activities of $57.4 million for the same period in 2024. This decrease in cash used was primarily due to a $64.3 million increase in cash provided by the sales and maturities of marketable securities partially offset by an increase in cash used to purchase marketable securities of $40.8 million.

Current wording

For thesix months ended June 30, 2025, net cash used in investing activities was $29.1 million compared to net cash used in investing activities of $32.6 million for the same period in 2024. This decrease in cash used was primarily due to a $17.2 million decrease in cash used to purchase marketable securities and a $0.5 million decrease in cash used to purchase property and equipment. These decreases in cash used were partially offset by a $14.3 million decrease in cash provided by the sales and maturities of marketable securities.

Previous wording

For thethree months ended March 31, 2025, net cash provided by financing activities was $48.4 million compared to cash used of $0.1 million for the same period in 2024. This increase in cash provided was due to $46.8 million of net proceeds from the Registered Direct Offering and $1.6 million of proceeds from the exercise of stock options. Further information regarding the Registered Direct Offering can be found below.

Current wording

For thesix months ended June 30, 2025, net cash provided by financing activities was $48.4 million compared to $0.1 million for the same period in 2024. This increase in cash provided was due to $46.8 million of net proceeds from the January 2025 Registered Direct Offering and $1.6 million of proceeds from the exercise of stock options. Further information regarding the January 2025 Registered Direct Offering can be found below.

Previous wording

As of March 31, 2025, we had cash and cash equivalents and investments in marketable securities totaling $232.6 million. Our future capital requirements may vary from those currently planned and will depend on various factors including the pace and success of product commercialization.

Current wording

As of June 30, 2025, we had cash and cash equivalents and investments in marketable securities totaling $214.2 million. Our future capital requirements may vary from those currently planned and will depend on various factors including the pace and success of product commercialization.

Previous wording

On August 11, 2023, we filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which became effective on August 22, 2023, covering the offering of Class A common stock, preferred stock, debt securities, warrants, rights and units.

Current wording

On August 11, 2023, we filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which became effective on August 22, 2023, covering the offering of Class A common stock, preferred stock, debt securities, warrants, rights and units. After the closing of the July 2025 Registered Direct Offering described below, the remaining capacity of the Shelf Registration Statement is approximately $13.8 million.

Previous wording

On December 11, 2024, we entered into an Equity Distribution Agreement (the “Sales Agreement”) with Canaccord Genuity LLC (“Canaccord”) to sell shares of our Class A common stock, par value $0.0001, having an aggregate offering price of up to $75.0 million, from time to time through an “at-the-market” offering program under which Canaccord will act as sales agent. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the EDA. The ATM Offering is being made pursuant to our shelf registration and a prospectus supplement related to the ATM Offering dated December 11, 2024. During the year ended December 31, 2024, we sold and issued 23,425,650 shares of our Class A common stock under the ATM Offering, resulting in gross proceeds of $36.2 million. Net proceeds were $34.8 million after commissions and issuance costs of $1.4 million. We sold no shares of our Class A common stock under the ATM Offering for the three months ended March 31, 2025.

Current wording

On December 11, 2024, we entered into an Equity Distribution Agreement (the “Sales Agreement”) with Canaccord Genuity LLC (“Canaccord”) to sell shares of our Class A common stock, par value $0.0001, having an aggregate offering price of up to $75.0 million, from time to time through an “at-the-market” offering program under which Canaccord will act as sales agent. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the EDA. The ATM Offering is being made pursuant to our shelf registration and a prospectus supplement related to the ATM Offering dated December 11, 2024. During the year ended December 31, 2024, we sold and issued 23,425,650 shares of our Class A common stock under the ATM Offering, resulting in gross proceeds of $36.2 million. Net proceeds were $34.8 million after commissions and issuance costs of $1.4 million. We sold no shares of our Class A common stock under the ATM Offering during thethree and six months ended June 30, 2025. In connection with the July 2025 Registered Direct Offering, as described below, the Company provided written notice, effective as of July 3, 2025, to Canaccord Genuity LLC of its election to terminate the Sales Agreement for the Company’s at-the-market offering. At the time of termination, the Company had sold 23,425,650 shares of its Class A common stock under the equity distribution agreement for aggregate gross proceeds of $36.2 million.

Previous wording

On January 3, 2025, we entered into a securities purchase agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering (the “Registered Direct Offering”) an aggregate of 15,625,000 shares of our Class A common stock at a price of $3.20 per share. The gross proceeds from the Registered Direct Offering were $50.0 million. After deducting estimated placement agents’ fees and other offering expenses payable by the Company, net proceeds recorded during thethree months ended March 31, 2025 were approximately $46.8 million.

Current wording

15,625,000 shares of our Class A common stock at a price of $3.20 per Share. The gross proceeds from the January 2025 Registered Direct Offering were $50.0 million. After deducting estimated placement agents’ fees and other offering expenses payable by the Company, net proceeds recorded during thesix months ended June 30, 2025 were approximately $46.8 million.

Previous wording

On January 3, 2025, we entered into a securities purchase agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering (the “Registered Direct Offering”) an aggregate of 15,625,000 shares of our Class A common stock at a price of $3.20 per Share. The gross proceeds from the Registered Direct Offering were $50.0 million. After deducting estimated placement agents’ fees and other offering expenses payable by the Company, net proceeds recorded during thethree months ended March 31, 2025 were approximately $46.8 million.

Current wording

On July 3, 2025, the Company entered into a securities purchase agreement with a certain institutional investor pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “July 2025 Registered Direct Offering”), an aggregate of (i) 18,200,000 shares of the Company’s Class A common stock at a price of $1.67 per share and (ii) pre-funded warrants to purchase 11,740,119 shares of common stock (the “Pre-Funded Warrants”). Each of the Pre-Funded Warrants is exercisable for one share of Class A common stock at the exercise price of $0.0001 per Pre-Funded Warrant share. The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants issued in the July 2025 Registered Direct Offering are exercised in full. The gross proceeds to the Company from the July 2025 Registered Direct Offering were approximately $50.0 million. After deducting estimated placement agents’ fees and other offering expenses payable by the Company, net proceeds were approximately $46.9 million.

Previous wording

We lease certain facilities and equipment under noncancellable lease agreements that expire at various dates through 2032. As of March 31, 2025, future lease payments, before adjustments for tenant incentives, were approximately$25.6 million.

Current wording

We lease certain facilities and equipment under non-cancellable lease agreements that expire at various dates through 2032. As of June 30, 2025, future lease payments, before adjustments for tenant incentives, were approximately$24.4 million.

Previous wording

Please refer to Note 2. Summary of Significant Accounting Policies, in the accompanying notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for a description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations.

Current wording

Please refer to Note 2. Summary of Significant Accounting Policies, in the accompanying notes to the unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for a description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations.