10x Genomics (TXG) 15 Feb 232022 Q4 Earnings call transcript

Good afternoon. Thank you for attending today's 10x Genomics Fourth Quarter and Full Year 2022 Earnings Conference Call. My name is Bethany, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions]

to with conference XXx like host, to now Corneau Cassie Genomics. would pass over the our I Please go ahead.

Thank you, and good afternoon, everyone.

Genomics year XXXX. Earlier quarter XXx released for results today, the and full ended XX, December financial fourth

website you of If you this an for distribution this to be received XXxgenomics.com this have email company's on the to added the Investor please archived available would webcast call XX or to of least news be list, days like release call. not company's if tab send investors@XXxgenomics.com. the at An will following

you Before should call we or events begin, forward-looking could not that within securities I'd you management differ forward-looking material materially on statements. are to statements make like the this that those to risks during These actual of anticipated, uncertainties and federal remind place laws. cause statements results statements from reliance meaning will undue that involve and

projections risks, the information XXx uncertainties from in XXx time appears and these could Genomics today to reports differ that factors and filed documents in press by Additional and regarding the cause release issued Genomics results time forward-looking of the events to otherwise. Commission. or financial obligation whether and XXx statements, to with update Exchange new any revise information, any disclaims because or Genomics Securities future intention or or

call today CEO and Chief Co-Founder; Saxonov, the are Joining our our Serge Officer. and Justin Financial McAnear,

the turn Serge. to will over I call that, now With

Good for afternoon, us. Cassie. Thanks, and you thank joining

our overview with start of During the an I'll during today's fourth call, performance quarter.

turn for over Justin well and detailed we have ahead our our our results Next, more I'll three of momentum look our opportunities the revenue to as financial highlight exciting in I across call will guidance as a at our XXXX. then business for progress each and platforms.

demonstrating in revenue year. challenges, its X% XX%, year up fourth for quarter, quarter-over-quarter momentum was million approximately execution as out year-over-year. the XXXX. XXXX strong up the and Total $XXX While closed $XXX we growth on we This ended of represents our million, focus revenue X% year of with the had the over

continued more using surpassed than than sold the portfolio and In patent publications to X,XXX the and strength was in all XXXX, exciting expanded peer review and of new X,XXX highlight innovation products year year our patents launches our platforms. products, engine. our catalytic was Yes, XXXX instruments, velocity the and applications. team X,XXX we over most the in clear our history as biggest delivered intellectual three more property of our

cell new Chromium, expanded high-performing menu for standard products single to our which franchise. Chromium we be We believe the has gold further broad our gene of Flex, Chromium assays. to new expression, the In released the transformative potential

sample product, the In introduced Isolation up perp Kit, applications with addition, and the our we first opened launch Nuclei of BEAM. new

the see as foundation Visium, instrument. our the we the forward, spatial and platform first CytAssist, We CytAssist going In of manual transforming methods. workflow Visium Visium launched outperforming

Xenium launched platform, diverse the customizable and Explorer, easy-to-use which for Xenium visualization. market. is intuitive advanced The includes and the we finally, menu in situ instrument, And our high-quality and on data most platform versatile a interactive curated, platform of a software we panels believe

our opportunity in infrastructure of We're XXXX place out we'll in to scale everything innovation incredibly proud what have and the of we're engine the commercial operations and get confident delivered ahead.

customer On processes, better a success. and a next for and commercial implementing tools of phase team we prepare commercial year, broad from talented the we're reach started front, our with growth. foundation systems we solid building as Last with obsessed

global one for future capacity new to progress be R&D tremendous On manufacturing center for build significant initiatives of soon. scale building in network which our side, we and made Pleasanton, our here completed manufacturing to is is growth. on operation the track This and our

for assets. on Throughout specific customers chose single pipeline, me ongoing existing as about let the more and we've demand new for extended definitive for the year, recent progress Series and instruments X platform cell Chromium both share with Series series analysis. the X our Now, its starting capabilities seen performance, Chromium, high

several X of during for Series legacy customers after made opting future the Controller. of decision quarters we consecutive fact, instruments, discontinue sales Chromium overwhelmingly QX In our to

well and On portfolio analytes. side, range researchers deep into scalability biopharma existing easy opportunities. The of a the growth customers, comprehensive and and differentiation insights translational our welcome performance, to ecosystem across to biological applications scale, our which portfolio assays, with position of consumables the and use consumables should high-performance wide are accelerate delivered new and XXx us drive of

with strength measuring particular continued trend researchers saw the as per we cell. QX, our Multiome toward product, In analytes multiple

We increased on projects. our of scale high adoption also assays embark throughput larger customers saw as

response customer per believe in consistently this sample. very single and the Chromium still starting will their the launch, to We're cost new and for flagship become opportunities. expression. we reordering After which early cycles, the with pleased completing larger evaluation FFPE We're to scale gene cell Flex, customers particularly initial more lower kits with for assay are adopt

assay research Flex analysis, translational is for of only settings. which particularly FFPE cell and the in first samples enable archival open should volumes vast up the single to much more

our now have have ground-breaking capability. across customers samples to a broad FFPE Flex rigorously range different and published demonstrated validated to better access protocols We of enable this

antigen of shipping researchers and making of resolution determine particular to resolution. high millions BEAM. throughput of can and we to BRT Also, the our revolutionize to [high-plex] of screening BEAM's discovery, interest enables began proprietary quickly scale, analyze (ph) it approach BEAM their binding We therapeutic customers. cells pharma up and to believe in QX, biotech

cell new applications how of BEAM analysis. is a great for single opens example innovation

As new a sample to the experiments of more larger enable in cost product cell, types, the broader invest and continue scale, unlock single to researchers. of engage lower we unambiguous development base leader in

can and hundreds XX were proof-of-concept potential few at in the demonstrating last and up easily power the At just cells the inconceivable of years levels conference single Flex We Chromium AGBT deliver that samples scale a week, run. to we that to believe data long-term scale shared illustrates to experimental ago. how million of Chromium a data, Flex

In our drive continues product single how on of bar experiments. how can use down to XXx of and this addition, the raise cell cost innovation scalability shows ease the and

Now, our been investments share the and I'd our of to has a and Transcriptomics, more our CARTANA, acquisitions XXx about Through in ReadCoor spatial internal spatial way Spatial leading like platforms. decade. for

Visium We technologies, have intellectual built and powerful property insights customer deep Xenium developed in foundational instrumental incredibly that platforms. to and been experience have have our

spatial It is more the number largest by than Visium has adopted just and big made still year strides discovery. CytAssist, will getting has started. launch other thousands which far, accelerate of in great any in used platform. publications the believe with than around of a And unbiased catalyst generated in we're in sets world, the We to pre-print, be last leader been data labs the spatial of the platform. we public XXX

in quarter frozen We're along as for of from since FFPE very hearing increasingly that launch. second doubled of FFPE version complete pleased is with assay, Visium with of they customers full for Visium type its the and the nearly demand We're positive their users sustained CytAssist as its demand CytAssist companion fresh X. QX. customer interest feedback in choice runs initial sample

with to CytAssist the customers the solve key We faced help Visium have our workflow. designed challenges

researchers not stored have types, methods, instrument including more ensuring Beyond can better slides. receive more manual sections customers previously experience glass on its a sample of and ease outperforms access only tissue use, With also better but standard the samples CytAssist, insights.

much In sensitivity vX we customers new addition, use tissues higher chemistry in on performance a in along manual This recently frozen CytAssist. than frozen the enabling protocol, resulted with our fresh to protocol, released inherent new standard fresh our advantages assays.

development will product in forward. CytAssist in We're as At we CytAssist. exclusively new available about pipeline continuing future to that capabilities of the invest and our the products be shared foundation with Visium more AGBT, moving

continue will sample more Micro to with CytAssist Tissue to expand We including types, Arrays. compatible be

expression XXXX. we're We're plus in launch bring the to first of also higher gene delivering working fully to resolution. platform of with planned the to And committed half multiome protein

making team be Our exciting only is on Visium on offered CytAssist. progress of which HD, tons will

seen the you sections share unbiased We've scale project, entire the we on on long have AGBT, single-cell launch. get tissue us transcript deliver of looks closer more showing come when discovery HD ambitious As this with data whole and across power to to way may a exclusive, resolution. we'll

newly Xenium, believe platform launched performing what the to on is market. system for in our we the situ analysis and best turning Now

officially As enthusiasts in expectations we shared global commercial delivered shipments and in our began shipments internal customer at and December. Both instrument Investor a timeline accelerated Day, strong for Xenium. our we exceeded QX, orders reflecting

the feeling seeing customer than is advantages performance our now in weeks especially just started products was of across customers, than fronts. we from new have runs team, With of a in ever initial number at are rewarding differentiation For our researchers. after Xenium feedback hands his own Xenium's to and AGBT share from It no data more confident a really we better shipments. there

unique of measure genes their First, Xenium chemistry, or same difficult chemistry can giving time, that offers the customers they confidence Xenium not delivers reliably features high seeing phantom ensuring our on are that ensures Because in high interested specificity specificity excellent are tissues, customers even At the the of cells sensitivity samples. and in. genes specificity. our they

including best to worked parallel assay feature the preparation have platform the brought in onboard to cell and and Xenium, workflow offers results. design world-class is analysis protocols, software hard easy instrument the which to We've segmentation insight. run, capabilities instrument from sample and Xenium our straightforward Second, with we only to clustering comprehensive

the using variety run, tools. or instrument after be interpretation processing, easily a can transferred without Xenium of Directly open-source of Explorer, for additional wide results

significantly and reduces differentiated is from Our computational and approach flexible burden fast, customers. both the

with strategy questions. collaboration panel gene leading their our customers developed Third, specific researchers enables answer in research best to

the flexibility. plan by several of approach custom to add optimized numbers as multi-tissue combines This tissue in panels, maximum genes. panels targeted and year, our gene to lineup, flexibility well as we large fully panels with for add custom tissue-specific type to Our

the throughput, advances hardware software. technology finally, best-in-class researchers Xenium, most stack in molecule resolution full enabled the amount delivers And single and analyze across area of chemistry, Xenium in time. With can at the least tissue through

have track a backed comprehensive launch of giving record for in advantages even build and Xenium We key their multiyear to term. for performance long customers confidence and innovation, more XXx's Xenium map investment. is road the by

spans more put building to just isoform the key multiplex demonstrate Xenium how directions, our of some mapping development the on full data same much can algorithms, cell future new showcased tissue section and data [indiscernible] RNA enable boundary protein including how and we display of cell powerful proof-of-concept on already trained multimodal and is AGBT, This future. in At deduction. some these it segmentation and capabilities

addition, a on gene genes. X,XXX-plus scale to demonstrating seven panel human thousands capability we many shared to multi-tissue FFPE platform's data of tissues, In the R&D from

prospective we support service, requests. at on their can Through see samples Also, applications own this customers proof-of-concept to Catalyst AGBT, program. data and announced brand the Xenium their funding

for strongly sets to great who the data purpose, first-hand provided our for even program resource will select can't use for we Catalyst to in data. be believe We situ believe see able specific why customers the this we sample more a is are researchers most Xenium the advanced on market. many While Xenium wait customers platform require

and the replacing in in platforms, record-setting three technologies our of the beyond. Investor driving our of When of focused tremendous and see product the Coming all being we opportunities all catalyzing our of we customers, are Day, our sciences. most large look success the analyzes diversity we used, across toolkit year shared number opportunities of much the science conventional of at platforms are applications, customer over our life of diversity At research and out fully life ensuring this the launches you adoption, on that are getting ways a view new ahead.

Our high analyzing our and methods much answers, research revolutionizing their opportunity. of are pursuing spend broad can are questions how scientists single-cell a where categories By spatial level, questions. useful. tools we [indiscernible] estimate there four biological are the particularly At magnitude currently of

analysis, (ph) cell The atlasing we're penetrated. than XX% yet less [home the first court] is category, initial for single

And which fourth second The same tools, translational biopharma of of third our investigations and entails also penetrated. scratching large use we're the which similarly, a in genetics sees category, broader category, a encompasses diversity surface with but biology. XX% category, our the mainstream barely the It's the of applications. opportunity is meaningful mechanisms than less and

have We early still strong to very established the it's large relative beachheads, potential. but

Now turning to XXXX.

geographies have While exception it's China. of dynamic environment, most the still with stabilized a

year. first year have key be including to products, We will market much and several this on and Visium forward CytAssist Xenium. so Flex, on Chromium deliver the to full for look XXXX

increased Our use focused commercial existing team fully and is customers adoption and driving on new with alike.

the coming launches history, biggest of product down. year slowing While we're in we're off our not

more Our will the to innovation perspective, execution place extending more all to samples, of engine Capabilities tools customers. to is product back capabilities and a the our record with that operations platforms. From in open focused phase continuing our pieces scale get on three for our up more research in and to commercial we track are of leadership new put growth. and next

We'll At days our why long to since build efficient and in will foundations our growth accelerate of term. be fundamentally the complemented we scale on bold company, ambitious XXx focus operational and next be the impact. to is and growth This core, human by It's scaling. remain yet pursuit phase and advance biology health. about of excellence the for invested of have increased mission mastery the and earliest disciplined of

financials. detail let for that, Justin turn me it on our more With over to

Thank you, Serge.

increase a quarter-over-quarter. $XXX.X Total million $XXX.X three XXXX, revenue million and December compared a XX, XX% increase X% for representing for to the months prior was the period, year-over-year year ended

prior million, the Consumables period. full period. $XXX.X period. over year $X.X revenue was revenue increased million, was XX% year the XX% the over was Services year prior Instrument million, which over increased $XX.X which X% increased revenue which

America's due fourth period. million, the period, during a representing over revenue growth quarter. year for the to XX% prior year fourth the revenue over primarily representing $XX.X the over $XX APAC quarter period. the for EMEA was COVID for was quarter prior was growth revenue was quarter the million, representing fourth year which XX% the disruptions prior decrease XX% million, $XX.X

period. margin impact quarter was fourth rest a the to quarter XX% the for quarter was Gross The the primarily XX% the the by introduced XXXX of Gross due to Turning product gross year fourth fourth the million was products. of profit of for margin statement. to compared the for income million profit compared decrease shifting prior XXXX. driven $XXX.X $XXX.X to for of mix newly gross of

compared for for R&D for Total XXXX. compared expenses $XX.X fourth the to million the million the to of operating the quarter expenses for increase of year. costs were quarter fourth were quarter as XXXX. the organization million to to fourth fourth $XX.X for during we increased of SG&A XXXX primarily quarter due of in fourth expenses XXXX. million to compared continue $XXX.X quarter last fourth quarter million the over were expenses SG&A million $XX.X scale $XXX.X XXXX the for R&D and $XX.X of quarter were the personnel-related The the

XXXX. $XX.X fourth million to for the for a the compensation loss million quarter quarter XXXX quarter compared This fourth of of fourth $XX.X $XX included loss Operating the fourth stock-based to for $XX.X the was of XXXX. of million quarter of compared million for

was net for $XX.X Net XXXX. of loss period of million a for million compared $XX.X quarter loss fourth the to the

our XX, revenue Total compared year to XXXX, representing million was to results. December ended for full for the X% $XXX.X a million year XXXX, Turning full increase. $XXX.X

of XX% Services was Instrument year. was $XX.X an prior over prior X% year. revenue year. million, increase increase increase revenue million, Consumables $X.X $XXX.X of of over XX% an an the revenue prior million, the the was over

have XX% we X,XXX in cumulative end across the increase all platforms. instruments, of a from instruments instruments XXXX, sold year-end, three up a sold X,XXX representing As of cumulative total of

XXXX Pull-through per decreasing was XXXX. from $XXX,XXX instrument for in $XXX,XXX,

number we a becoming to that our the Day, As discussed today, and Investor as per due business this instrument of factors, less on relevant is our year key at for this pull-through report we will last metric. be a

growth drive revenue. in in track goals, assess also to revenue, reactions increase given in products performance to of To in our these the a the overall is utilization our number sold and focus we of Our consumables period. addition

was worth the over of bought our represents products. an customers in approximately and year-over-year. increase XXXX, reactions This from XXXX, up XXX,XXX X% XXX,XXX consumables During reactions

year year. APAC revenue for the year. million, the XX% X% XX% representing full over XXXX. Looking for year. the prior at prior full representing for year over Revenue regional decline $XXX.X $XXX.X the the the growth million, was over $XXX.X growth EMEA for for the our was representing Americas year full results was revenue million, prior a

$XX.X million million gross increased of compared $XXX XXXX of costs. for compared Gross XXXX. royalties margin supply a of XXXX, products XX% reversal one-time XX% primarily due million XXXX. for introduced accrued profit a of the to was with for chain and in in profit was The gross product the impact Gross was to impacts newly mix margin XXXX for and shifting decrease to of inflation $XXX.X

to were higher and facilities million costs Total million operational operating to expenses including support for for in compared XXXX and operating $XXX.X technology $XXX driven information The increase expense, by in stock-based XXXX. an was compensation expenses, primarily increase expansion. for expenses personnel

R&D expenses personnel-related materials, equipment attributable million and compensation primarily laboratory stock-based costs. including supplies, The was $XXX.X XXXX. increased for XXXX to million facilities expenses, $XXX.X to increase were costs for expense compared

XXXX prior expenses to was primarily compared million and to year. for expenses, due costs. facilities compensation marketing personnel-related The increased costs, $XXX.X the expenses for stock-based were $XXX.X SG&A million including increase

was Operating million a loss $XX.X to million for compared $XXX.X XXXX loss of for XXXX.

of million XXXX $XXX Net to for was net loss a $XX.X for XXXX. compared million loss

We cash. ended $XXX net equivalents and in cash XXXX of cash restricted securities marketable and million with

to our XXXX. outlook Turning for

in range $XXX XX% full to expect of over full million, We year the XX% $XXX million growth year XXXX. revenue be to representing to of

typically Looking while seen XXXX trends, levels are at reorders believe inventory. there through a been range. China, in existing in is annual guidance reflected disruptions recovering, as work activity the and QX after we in customers our to This impact an lag has bookings we have

Moving to gross margin.

more exited trend instrument, particularly of our large for is instruments company to expect a from will revenue. overall gross The are currently on introduced the where as instrument. We low-margin as year, This impact a expand become is percentage products Xenium percentage we be case as this newly the lower gross placed. margin and greater overall the margin

our will be XXXX, our than in headcount to We business in we the invest headcount, new XXXX support development to be adding still growth product to lower plan rate growth. of continue while and additional support across mainly And to support. will

Pleasanton As of in back half to positive facility drive in this completion, of nears XXXX. operations end the expenses our year reduction we the towards a significant free flow capital new cash will by continue becoming in expect and

intellectual spend will litigation equity our to OpEx incentivize additional increased and We property. expense increased some result to continue targeted to the disciplined to our due support maintain we throughout as stock-based headcount compensation employees, to XXXX and previous the a approach a products of and as year over defend expect expenses new grants increases

year and ahead. operationally look exciting financially to We an what capitalize well forward on lies feel to and positioned

back turn point, At to Serge. this it I'll

Thanks, Justin.

What research I that continue that you to reinforced every be all just enable conviction continuously scale today tissue across and discoveries We're the large-scale on biology. of major proud formidable the heard focus single-cell at sciences. hope need engine was products of one fuel scientific of as samples to our and new spatial and deliver we my life area frontiers execution day to resolution our strength context. will discoveries innovation of with analyzed These about push

With platforms, this uniquely And our tools our forward. value insights. are when their provide own, fields. on platforms, we're together, by bring best-in-class the each We far used and reveal three biological believe respective their in feature positioned the our to deepest even more

we're to more position about I'm very strong our are look ahead, opportunities and them. future. There I capture than in to XXXX, massive As ever a optimistic

getting broad We amazing we're of started. have which confidence and give all me an commercial products, still every just incredible team, scale

in for My happen magic sincere day making team and this XXx the out. thanks day to

fundamental always Our our to strength that well XXx apart us the a sets into will been mission continue team's customers and has relentless future. and propel focus on

up now for With will Operator? open that, we questions. it

comes Instructions] Dan from Please Cowen. [Operator with first go the you. question Thank line Brennan Our ahead. of

single just certainly cell Congrats love and where don't the below the experience you. would kind you're just would macro how and bucket, cell into Maybe XX%, particular, help think Great. the XX%, of make the comments that just first love seeing during which those the buckets, consensus you the academia of the just kind little Thank of on and and kind biopharma you one today guidance? both quarter, think you and extend on kind how guide. just of but XXXX. that on I two a the the of about can breakdown what -- one, to is given spatial guys. was, single kind Thanks China bigger we made can you sense bit question. why the for But from in incorporated

that Justin. is Hey, I'll Dan. one. This take

from we've our As right, the we goes, far Chromium mid-teens spatial to and year-over-year. And side, as bucket bucket. guidance look the Chromium if looking we're you're XXXX a probably on growth low- got at

increase in QX that's out. in to keep XX% QX, this include QX the that China far And drive for probably end is around over probably impact of in going last to We does think we've year-over-year, year-over-year the to year. so which in QX China we've going called mind, seen and up low- mid-teens down somewhere percent

the So, range. overall in that's incorporated guidance

So, on mid-teens Chromium increase. to side, low- the

On with as ramp looking increase the side, the of we've at about XX%-plus for the the Visium, the guidance there. so initial seen that addition input range Spatial in year-over-year Xenium far with

follow-up, Great. I'm maybe as to just a But then, Thanks end, about talked in you as the about I flow EBITDA prepared heard just a lot Justin, positivity. be profitability, of we know cash I walk that past questions at exiting about again the how when for apart. the we're through you've said think positivity. year, you there'll at you And sure free pick can remarks, thinking that. the

we Just of rate beyond as And kind quarter the we of year? 'XX? should of Thank in go this kind expect exit pretend that fourth you. what is what

Thanks, Yes. Dan.

things trending under towards the end. the driving if free believe that So, we different lower our we do We There's levers many the down see could scenarios. that goal. end we positive still that towards multiple by of cash did pull is flow can year

first and CapEx year get to the facility a for the here before to our first out half payments the and the the year. the pretty second we year off also prepared half Day see on drop mentioned of Investor the of we the after of in going we going from half at in remarks, that, then all As are steep complete

being under current we keep mind that it's -- our in any overall, in thoughtful OpEx. being is invest we're with this we're account significant also It's But not now. taken into We're disciplined events. managing us how for right And business. very how non-recurring our important

Thank you.

ahead. comes the Our from Dan with next line go Arias Please of question Stifel.

Thanks the Xenium, maybe questions. just their Good that the are box specifically or guys. Serge there the for what's you're given measured sort about the think of on that demand way contribution then, pretty with being clear with now sort can like field you're frame of relatedly, terms about that strong? us one Justin, out early about Visium for you impact I afternoon, product? it to franchise? So, here, that maybe thinking of systems in think, but also way making launch, the sounds best specifically is that help you're to into anything And anything the year trying to of be, on for

Yes.

likely is at that in be the Xenium guidance believe range. largest variable when XXXX, our looking we're I to So,

the be towards overall more a We XXXX And to Visium Spatial rather expect increase we ramp together revenue will We contribute Xenium the from how instruments year. gave expect overall through revenue; to the platforms just placements to year-over-year. the skewed on Xenium the thoughts so this the year. the and XX% consumables than over

looking that good. bit year. we're which we success. time be little And gone, now complex we the to a customer focused off data the a technology. to instruments a right that really themselves we'll placements before of quickly we'll point, mentioned is kind last to and that And and we've think initial constraints early the the launch I the are this at there at pulled installs after execute how quite looking ramp, might installed, bit have that of a and that. product customers of forward generated initial that more the And and at by have It's delivered what have placements those how need see how looking on end rest signs We assess continues

use the for [swim at would Visium question in platform fairly requirements and your on platforms so obligations interactions, customers and lanes] and the exists to run of quite rates. what of stage, it exist shape (ph) and of obviously considering distinct so Dan, Xenium of terms kinds in capital -- this be sort different cases

cross them we of So, don't now. cannibalizing see extent other right a each kind to significant

of full fact, are the of a using the we platforms. into XXx the kind see And and fair opting there's eager Spatial certainly of that well. ecosystem encourage In amount customers to sort do we between synergy as

And support momentum quite don't each that's it's predict gaining But out. applications year overlap, different both In of run, of so interact I stage, to see of will we sort kind platforms how how and are this hard playing the the very course, and quite other. anyone I there. think complementary a knows of that. they think this at lot out and long

just stay products. new Okay. Thank Maybe on you for that I'll the there. color

Should think think about be we like get a you wise? Chromium And for a driving being case. the is mean, see relatedly, it that talked at I'd about when X placements you mover love that's Flex I this But needle forward then, validation this data some last meaningful looking the assay. what year? you just customers rate think look with needing hear can assay, bookings year? comfortable although you're do pace, happening quarter? to And the you that's at that that On over assay sounds to the the just whether install how decent had fairly now and

Yes.

there's here. variables So, several

and doing Flex usage is how question, initial more key watch from is quarter expression. scaling. coming momentum reactions, as to that enthusiastic very of the Prime back Flex. Prime be assay, large, the especially or and good customers been And We and going seeing larger we're mean, growing some experiments scaling need X flagship and of The positive results crossover then yes, more. to first, amount we have kind kind and framing good definitely flagship definitely to going kind your we're the variables by momentum gene So people on previous of X I of our -- last increasing see initial to with test look at

not that's additive. be necessarily to So going

Another much to line, while that there the is a only new drop sample. of have the cautious per that that variable to because to multiplexing, much. do some to tremendous got it in weren't which Flex potentially moderating more ecosystem, streamline drive to are planning meantime. in allows And people the experiments of possibilities, allowing going it's to watch but is near-term effect the so conviction long We -- don't top the the price people seeing spend running we've the types running same enables it of of we're creating run, effect has people demand, be [indiscernible] elasticity before, see more and study, also to the adding the now to as full more, they of have as

do feature see that the certainly differentiates we has iX placements, series the Flex driving that instrument instruments -- been from key Controller. or now the differentiated And is Chromium feature

an is feature. definitely enabling it So,

new that was And going particular up planned was single FFPE of forward. conceivable types, new something we've will -- so, in ago. opens always that create sample opens for long that more samples, tissues as even not momentum cell analysis, Also, which up course, on, Flex, not

year, early We especially on make force potential the evolve. So, marketing there. at It's predictions of really trajectory is it last going there's kind [indiscernible]. of We early, to say started so to end full how FFPE around great still behind the side. just putting

Thank you.

Tejas with Savant Please comes ahead. Morgan from Stanley. line Our the next go of question

But of do with case propositions, earlier you just you Good versus Xenium your the comments guide. this Serge, afternoon and Hey, sort how on out you the think given Visium. one on Xenium different kind Chromium? of I'll start potentially platforms guys. about value think laid what about the distinct versus for three the Maybe evening.

you Visium Visium then the Visium over the just HD in HD terms And secondly, model as of launch, of essentially that live? if and are in when thinking goes replacing the time sales

Yes.

question of Xenium your So, of is I the embedded versus question a reinforcement. so in think mean, couple things. maybe I and cannibalization Chromium, to first question, the potential

continuing. used, CARTANA pretty data you traditionally much of look all in look when always we general in previous is single cell how are complementary. Chromium at used And when at see So, data, instantiation and like used that the them as experiments, situ we

So, as we to extent, Xenium a large being to complementary Chromium. see

to question toward people who technologies. potential something them probably new stronger some or technology going certainly, Chromium new particular really super that for with not Xenium if be also going potential thing. cell there's -- ago, new years are to kind the early of be We they're to or something, now cannibalization, oriented is single of of adopters, -- And is was that like few

could And shift attention so, potential some in there be

larger And require there's than Chromium keep single that is behind momentum enthusiasm, market that of But to in lots mind really projects lots now that. much Chromium that of much, the cell approach.

so, the tool do that see -- will exist. And again, the we

amount to well. be lanes as going some complementary they potential cannibalization, exist of cross swim very there's While do in

around lots seeing see, certainly enthusiasm, Visium around HD potential, of And get and that Your I said, we it like Visium long we're huge Visium, customers question we'll about Standard we'll talk from and we high when have, excitement. closer HD, very launch. more a to

then, follow-up get into want in the you Got don't through January? but on as you probably again, you can I color book, month-over-month -- any the it. share want trends to specifics just of -- Xenium know order the to here And a any

the your where share versus on any the be the across exiting scale color instrument in And complicated the list portfolio can year? versus you past some expect up, your in Justin, outlook? Second, the to instrument that terms of manufacturing terms the of discounting bundling about you've do relatively price point of you on in to spoken 'XX a

Justin. I'll Hey, trend. with is the Tejas, start month-to-month this

know, orders is those on chain term. out teams. disclose ramping continuing the manufacturing operational near and as up build or the We're issue now entirely installed So, right sales. being pre-orders to focusing don't the an Demand strong. see supply aren't as in don't we you We demand

we've a was As we most timeline manufacturing complex forward. ever far product on we it pulled this overall, built -- the is and compressed as that produced that

side going We're strength and a longer more to move we operationally. and that the about towards we're on move But to deliberate that term. thinking as continuing we're initial there working future, forward we in placements So, see as just could past widespread as as constraints be focus these We placements. more get we that can. fast

all the what was three. then, we I think And of your part covered third question?

Okay.

you. Thank

comes question with the next from Patrick Our go of ahead. Donnelly line Citigroup. Please

taking Hey, the questions. guys. Thanks for

the with to maybe guidance. Justin, stick

approached few a Europe. XXXX, in issues last a In up. of relative China cold pop get Just Obviously, kind you of year. things want being to but then had flavor how it to in you lockdowns the most chain the significant,

you of bigger Xenium with You almost more being little talked kind right, this have the one. a year, variables, about bit

and around last how again guess, in for just always before? level conservatism did of you approach you terms approach conservatism in to it things a or relative just to guess, can some up guide come year the I year particularly get I how Xenium, given things of the the trying So, flavor

at that that our would philosophy is view a that's guidance view we're a we're rates aware balanced not right that this ahead formulating the as as We're looking ourselves overall, seeing we It's downsides on far in year. of far projecting growth it. in into hasn't and now. that getting across go overall projecting I changed. for thing rates of all bit products upsides little we're that all the and the though factors say So, one with aren't too different later that year growth that

was year. planning into that And that base the so assumption going of rest was the the

variability ramp. to portion, instruments we guidance going And the I then, as year far at think, mentioned, is as see of just that big how be the overall, looking like in I the could Xenium a

want so, didn't either. we too to And far ourselves get of ahead there

for go would ramp. the year that part little assuming the forward. of more would there so, as what on bit it just update a if be it we we're conservative probably progresses, Xenium guide, the as the And we'll And -- one be side, was

Understood.

Okay. lot were technical it -- bit That's a like helpful. initially, at got you through, you sounded just about last know challenges this And steps AGBT I HD, out there little a are to the market? then, I guess, left get to of than on chatting you what week we can that. more through Serge, maybe Visium expected talk were maybe

here? taken So and you, that's think ask? maybe to been the we're what your road view in, What if the Thank -- where you of have way map just kind to right guys. already steps inning commercialization

Yes. We talked time. about last

want that time we're give I hard. emphasize we're what very committed we showed the We're on of producing state AGBT, stage enable very we're an the ready enthusiasm lot data product to now platform, the at customers. The development. to strong, to of internally. not really it customers. a the that to really, team or We're on mentioned will our the But is I'm really do working some I exciting at by market, line get and update to excited with from As working hard really

Thank you.

line Our from comes ahead. Please with the Morgan. next go Qin J.P. question Julia of

Hi, wanted a And driven an accounts? at good data, Chromium reasonable that translational biopharma you're the accounts? And on since the by progress core utilization, grabbing of use, give placing instruments us and about? kind much target for volume is the how you're is thinking what penetrating afternoon. trends medium-term or you that of biopharma consumable could that your of new on biopharma update I is to up touch Chromium scale in

Yes.

to biopharma talked I like have future would beachhead a -- we -- terms that and tracking do realized materialize before, into -- that they biopharma expect of to coming our sort see and In -- it's sales progress potential in been academia, and pretty within say we the as expect similar biopharma other that have we kind do of we we've adoption, sales as biopharma our -- applications, time, are. strong it we about of years. in over see got It's has the still has

to as barriers in addressed products, live needing to pretty our demonstrated and we side the tissues towards the work FFPE fix and there's able That now, year new more with work And Flex importantly, been of with Chromium the tissue products, especially We've end to to last limitations in the most particular to live year. of fundamental due the samples. to ability increasingly, cells. Up adoption kind march 'XX. samples, through got within more on the biopharma of fixed with how is

product capabilities build seen. not a now But much to much aggressively commercial baseline of acceleration potential So, more to intentionally have what good and on biopharma. which to going forward. be story for more going a yet sort we That have I think that's strategies think the into of I drive we

away We've sort on the budget to some potentially question the capabilities. talks side single-cell a hearing then, and from new spatial of about to And platform. of between it. spatial your single-cell been interplay Got the advantage take of reallocation customer

that see Thanks. on shift terms what Yes, of seeing forward, conversations that, can then curious color is based in just in especially And budget? Chromium So, you of you customer any the customer you are light share do great. the your any going fundamental out. once on mix be would in Xenium

good Yes. and It's question a one track. solely we

of technology the shift natural with expanded customers. people adopters, of both technology tend of the the latest the the with earliest types important thing platform early to who different is think appreciate And enthusiasts, technology. latest be I of adopters the Chromium that certainly, kind the to there's to here the will Xenium and kind

of shifting towards we hearing you and talk from customers, that So, Xenium potentially to when are budgets you kinds those would expect Chromium. some

are are Chromium are reasons. specifically much better customers things is Chromium where mainstream Chromium applications time, base of people now started. early initial people. the in Chromium. the using Chromium at these customer There's certainly days of getting the much, for fit many who same much that there, looking than there and to lots thousand And larger that lots But are a adopter and biologists using tons are translational just lots There's of is technology do lots and

approach. crisper blood, working to experiment the cell you're to on applications it's is going to screens it's the the there approach, where going really screens, be samples be course, if Chromium starting It's of associated right of always And where whether unit like with the combinatorial associated where always really is based around single-cell. always going where various you're fundamental be

going Chromium growing. while are it budget keep we a we some -- keep majority So, is to large is amount seeing franchise shifts think of of to expanding, Xenium, the

you. Thank

Genuity. Canaccord go Mikson Kyle comes the question next with line ahead. Please of from Our

close questions. Connect, Thanks It's start. on guys. the of really kind other this not, Hey, price possibly thinking instrument, are cycle sales here institutions. How individual has point team to it question that from maybe trigger Xenium like first to your the maybe to for evaluation start your might adjust Multipart the new about that than to you and that like deals? sales higher-level or ability

And Jim do and especially now growing in going there's changes pain, a 'XX leading? to you those light think in be of

when speak just And there's initial that processing it for like true platform. entering we the sounds this Xenium. years And with they're to phase always new users, a sample of like period training early

going do kind early of So, within it's long like XQ, you to XQ usage and ramp how say like of adopters, for was placements that platform? their take to the the the guidance, up

So, maybe commercial with that kind we've of just general evolution to about the on talked before. start

growth help adding into our We great this of to beyond. commercial that foundation see now language, really throughout reach, leverage and in foundation talent we certainly and year and there's throughout We're We're that's going proxies, reengineering huge -- incentives. that's tools. happening. good a new a year going of plan some us -- in lots common I of our this we sales And organization a to organization forward. stuff for that, have adding think commercial and new of lot and And

the In question? terms of second -- what's

the to of pretty is Like think a long, it's period their the included take training initial the -- platform? like ramp what going what's in expect time do just so to long guidance Yes, you usage maybe?

to on Yes, are speed, some our results to encouraging. ramp-up, we're from we the that going very initial up signs Xenium samples in to pretty said, early terms we've get see. their People own running pretty quickly of seen and something instruments. Like that's have customers the

very very, very So early now. But right encouraging. that's

our of and we expectations. course, in incorporate So that knowledge -- all

you. Thank

with comes Please question of next Larew William line from Blair. Our the ahead. Matt go

Hey, good afternoon.

to about cadence ask wanted bit Just a the year. of the

about the and half higher back the XX% had in typically periods, of some a sales bit way instruments. think I

Just and instrument might just this given whether the of the to greater skew on think be half about year? the Xenium comments a maybe your us ramp, China, help back year there

the to seasonality couple out not As average We we're last as anything years. the of expect expecting ordinary. do of be of far seasonality goes, the the to similar

more Obviously, comments. meaningful through Okay. team and new new commercial And a how [infrastructures] more organization been (ph). feel And personnel a from made? year, bringing infrastructure where a additional the this investments the year leadership changes up at harvesting Maybe perspective? you or then, have just of of went following on some of is Serge, of investments on is tools, last do the your about that

a doing always this, like lot keep in all new we're that. of it's a putting the to -- of journey. We're company, like long-term building building think where I in pieces going We place. And we good organizations, feel it's about are. to going

what I see We certainly will necessarily advantage we So, don't it as harvesting. have and of take done, keep we'll more. doing

Thank you.

of ahead. Our Bank Please of America. Ryskin with comes from go Michael line next the question

Thanks guys. taking Great. the question, for

about talk to going new want of the I forward. First, metrics some

in X% reactions for For increase a about you talked year-over-year XXXX. example,

a sense Just so be that some reactions we think of the bit last just about that we in sort ahead what revenue context growth? Just throughout And any thoughts going on XXXX, any little year come of of good to metric will expectations? so versus year, get forward, below expectations, a can there. try that how in it more bogey with did pace familiarity

Yes.

for some revenue the far platforms. As dollars of on different the gave expected and as the we're guidance XXXX, guiding rates across growth

looking can can they And somewhat us that reaction. get the to in we And keep as product to the is As far also that and it's samples as there's our into more, per been increasing, year. anecdotally. especially you're reactions but is that, the thing that over reaction one We track. for change -- multiplex sell, that's difficult go in that's at of physical know last sense reactions, a mind when reactions. customers we more get samples as know, you And

of product our newer past CellPlex built in newer released have to And and well. as products, some enabled in that, it's fundamental the then the products, products our we

the a think reactions decent of can that be from number year-to-year. do I impact can so, that And variable that,

reaction for But has compared Visium reaction, years. really, $X,XXX, trending a points all As single-cell to last average, Visium you're couple all-in within cost on been a it, far is at bit reaction on price of per as the the products. that $X,XXX cost that When a looking across the more. up little over range

we but then I mentioned to follow-up, loose numbers not up talked base talked and XX% low tie the right. for don't mid-teens your wanted that. full for I we have that Analyst the for you some you some All Okay. about, ends think from And on year. an mean, But mean, Justin, Days, accurate for I Chromium spatial. just I just earlier. have appreciate about XXXX. year-over-year to I example,

there a what then Thanks. your China, sense year When on you number some the XQ, will thoughts as for or could just about China? the commented year you full what So, us were? on do the normalize but of on ahead? give maybe you also think thoughts assumptions? And year China Any full goes

Sure.

on on low at start XXXX it's for increase let's the year-over-year In spatial, range, we're XX%. overall mid-teens Chromium. So, least guidance Within our talking Chromium. guidance to

up and So, to the XX% up. on increase would ramping ramping then inverse the lowest Chromium how end be

than more So but spatial. XX% not XX%, for

on As QX in but looking Analyst spatial the the give of was you looking than far did at revenue at same in was QX, Day, QX, QX percent at about QX. as it information we

a the same So, of the higher percentage revenue and same the percentage roughly -- base.

with the China. how as especially things the year, things expect to of we far as for -- progress then And rest

roughly to earlier are our from in we the now. activity in team seeing of is As year-over-year. mentioned that levels hearing are and now What right We somewhere impacts ballpark looking activity levels down China that are seeing think right I that is XX% going and China to are we recovering. be do China good

service up, as this distributors of off to now work before inventory some there's and at activity disruption the of came providers the they back higher, We're inventory level the that were coming also hearing levels through. are

we expecting impact that in to an We're impact QX. an QX. see having So,

then great of impact expecting and QX, an year. of Aso QX, a in somewhat as the although throughout moderate rest as not improvement the

at And that improvement, moderate we than see we'll a so, better update if time. it that get

Thank you.

Goldman with comes of Sachs. Our Please from ahead. go the Matthew Sykes line question next

afternoon. my for taking questions. Hi. Thanks Good

to Justin, you do the margin. I of level mean, I to the year? a the to know of expect the in there level on it lower product we we of of as some move about change with has last through year, below be first and one, new that of throughout maybe you a lot just gross mentioned should introductions. the just the is cadence a How on think gross about of we should cadence the margin over level going year? Or sort consistently year? think be

is Hey, to going Matt. When driver gross be this is thinking you're instruments. biggest the of Xenium margin overall on about percent gross revenue for year, what margin

instrument it's a before. sell. for The instrument to reasons consumables gone comparable low-margin the are that currently consumables I've So, that though, the itself, more over Xenium we

an this And is be year. going so, there throughout to impact

lower to Xenium continue I think and year increase going it's the revenue the overall of placements trend increases. the we to throughout our as also percent

as continues to ramp up on those far ramp that make on partial But call to instrument be the ramp, well. will compares the too it's as revenue as consumables stream the to I do as there a early think offsets consumables that. how

according lower just So, throughout it's it's to the to I continue going the flex trend overall assumption best that number to the year, and is going think placements. to of

hired And you helpful. can changes as you're I Could the made to things you That's more just maybe doing know year. Jim provide or with be any had that scale as it. that year grow. your that dealing on in marketplace? as prepared you might you some detail changes comments Got differently talk in But the now strategy, last just company, looking products a the about multiproduct about you're you of well mentioned multiple some this of then, Serge, given commercial you the you made.

Yes.

of terms that ways. So complementary. Xenium, our there's definitely, in the use of That and highly being most them with also and before, has said, the a biggest platforms instrument, of we've to the a most increased in and before. overlap able products complex introduction of about instrument especially got the which in overlap huge the the are talked we've customers complexity as -- is kind And complementary huge products substantially,

and and the something and the amount advantage of also and help platforms investing definitely of commercial certainly bit into We're our the different to require -- the entire mutual help that's are support support some of taking side marketing recognizing side we're force reinforce -- other certainly them some on a with on the So more leaning that specialization each force sales advantages. and in we Xenium. sales to side focus, to especially

Thank you.

question Bowers with line Our Bank. Please go Deutsche from ahead. next comes of Justin the

Hi. Good afternoon.

two the outlook about about During next rate the phase is year and thinking hoping that the for three more. for we're talked And two us then, growth, years? the you was for the that reflective of the three prepared guidance could or a of this of remarks, help next growth seeing I the you years, in next kind or characterize little

of is and terms previous kind tremendously. -- the of at to phase different of complexity it several your market lot -- different to years platforms the of product growth the stages Matt, a you're we from next look question next in of back somewhat of penetration. lineup are products how So, here, has And increased the going

Given launched. is Xenium just -- getting

some marketplace as we platform. have as capabilities of So, and in platform the and tons I stands, it more right there's currently potential the think for tons the now tons excitement to of and

investments demand, huge next to market we be I going the over big as look of making driver years. several a there. So, think in it's especially We're

the set for out stack has And with the it it's launch few growth. acceleration really and CytAssist time The for took of up some been capabilities. years, amount us of of especially franchise around year, to Visium full in a an last build

to excited, lean we're a with we into going customers particularly feeling resonance lot we be so, And see that there. And are acceleration. to investing and of

with on grown of at potential where I capabilities last into And of especially new research, We've areas. years. and lot the point And the over translational several the think to a then, applications is of there Chromium lot to kinds emphasized grow we've we're a side, new kinds the now.

I really our lot current a there. -- mainstream go -- goal. good of and platform place there's huge to potential sense general single-cell think that's is in there's that opportunities more is throughout now And in And much There's a the lots mainstream a biology. biopharma.

so we excellent All those go phase built to of to specialized more of and growth. of and in as how far approaches, scaling a and market times, leveraging more an vectors while scaling to approach scale the sort And intentional drive company these have of we we're what require our investing lot all areas.

Understood. follow-up. And just a quick

In a mix were like there? sounded terms of R&D us in the headcount additions, product of it concentrated Can the sense those development. give you and

starting there then, introduced see from last And stimulus are that -- to past package your just partners China, last on of year over year? is was some or there tenders the

looking looking when mostly as increases goes, headcount at new increases in XXXX it's to support over at XXXX, minimal XXXX. As we're we're products. far And

through all to And the we're internally, We specialists do also the products whereas of then, are throughout reps. hiring some help installations used Xenium support third-party. to year we the taking augment efforts and and a that over support sales

are increases the areas. so, two And coming those from mainly

as heard as haven't far yet. then, And China, we anything

from comes John line ahead. question Sourbeer last with of go Our UBS. the Please

ask my dynamics Thanks If I how there Europe. here. could for playing macro around and Any with on pressures just I you see the the year there? first, Europe for guess, color question. two taking the any market of out

So, reasons for past Europe quarter. a number there's had probably I that. a think of solid And quarter this

XXXX, during year-over-year we at favorable weeks rose, impact was two going XXXX, the a saw when the looking last of back in the the compare end quarter. I of that think compare, the it to Omicron Europe

into middle in Europe been quarter from trends operationally, I believe in and it have over recovered and stable, year we've have we the some more QX. that seems going mostly encouraging. of this definitely things improved last I But definitely that part like had think the challenges the been

thing to coming well, of we done. other as impacts executed into XXXX, One the increase this add geographies Europe ever as as well we've though, the largest and that annual price and beginning

has one much it to pulled that you than forward going regular the QX. being how too of I was it's more increase, some And early the largest we've a seen bit that we've into have been do right from bit I so, done believe that pull -- that that likely tell much QX was a there forward this there's price some always do little when but in now past. And think little and of was demand. a how

think I before trend, Europe, so, well. data as just And calling worldwide the start we but need a in we particular points new in more in few a

the going My AGBT you you when about excitement year? I any to through see follow-up do And was kind pricing, you the question high-level most your you where different of dynamics and between from think Thanks. I those conversation coming from spatial but guess, there single-cell? on here. customers, the guess into in the maybe shift have look be now just post the and platforms when

that's we experiments. Yes, get in a hearing parallel, and stage. that and data that showed more enabling, on single the the it's showed ourselves, single-cell at it -- try a what Visium huge you capacity million resonance AGBT, potential and Visium there's astounding on question. the We And excitement like how this side. XX order data is of challenging. people coming to of with all side, certainly lot with scaling kinds good a than Chromium tons cell platform, of We the and demand rank out CytAssist And pretty of actually sample. it's and There's can the and HD we run this have from showed more tons

like kinds has also specificity. which workflow, improvements really talked all and [indiscernible] -- itself whether really, the by we or the software, development the again, excitingly, showed really of Xenium, then about people. has sensitivity, the the segmentation people, features best also cell we features future, in And market in data, great platform really, throughput analyses. about has And sophisticated AGBT, the directions, gotten the resonance It different -- now high from great high it's tons long-term are with really also far, the strong at instrument, resonated in particular, clean of to we and really those levels right of

actually any single other with and chemistry cancer that at being can't our really variants isoforms. approach, can look analyze using to samples individual with Xenium You nucleotide able you and

So, sort around winner. like of going platforms direction excitement of could lots pick it's and they're do as in. the the one very right and to now particular any hard lots what And that both the

today's year the concludes of quarter I hope all XXx fourth conference enjoy you call. Genomics you. your That XXXX rest full and Thank earnings day.

your now lines. may You disconnect