10x Genomics (TXG) 3 May 232023 Q1 Earnings call transcript

Hello, everyone, and welcome to the 10x Genomics’ First Quarter 2023 Earnings Conference Call. My name is Bruno, and I will be the operator of today. [Operator Instructions]

I will now hand over to your host, Cassie Corneau. Cassie, please go ahead.

afternoon, good and you, everyone. Thank Genomics Earlier first results the financial ended today, March XXx quarter XX, for released XXXX.

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

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

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

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

so one queue. up, remarks. analysts the to ask follow our we please everyone We We one host prepared session to question question-and-answer will and after a may keep in that accommodate

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

of of across overview today’s and spatial will good with I our single our an technologies. and quarter Cassie, everyone. first On performance cell call, Thanks, afternoon, leading portfolio start

yet look at best for of to system each platforms. and trends and discuss for our situ detailed ahead overwhelmingly outlook our we is for positive opportunities year. hear call our over our financials, analysis. the we early why customers, progress, And Xenium Justin turn three a I’ll Next, firmly the business of exciting from based more have the on in share I feedback believe rest the will momentum Then we I’ll in the

solid XXXX quarter growing $XXX fueled both strength spatial launches Visium prior and and reflect we’re a with start the slowdown saw the the seeing the to expectations. after by is XX% Americas Chromium in off our across in momentum year-over-year EMEA results These the our portfolio Xenium a revenue year million. Regionally, came APAC consumables. period, improvement recent to and while to lower in first in teams

all to execution look it’s year impact. we the and about ahead, As

off on most history, product coming adoption are the the is biggest We and exciting driving fully team our our customer our focused success. ensuring of launches and year and in

innovation push efficiency to are operational company. and on engine throughout We’re the deliver incredible scale, our this the All and in excellence three improve with all we platforms, working we new we have continuing ahead. to capabilities so and maximize opportunity can

This growth. and with continued double-digit analysis. Now share XXx consumables is driven nearly their an performance, portfolio leader trajectory platform, Chromium value in let research. our of consumables each analytes The cell differentiator every strong for EMEA and unambiguous more the single a that in customers in scalability our by regions. performance applications solid returned real year-over-year portfolio use of and broad ease of was and creates and starting range tremendous grew entire both wide Chromium, In our as assay Americas important single-cell for their me the in about QX, to across

built-in fixation, standard for superior With Yes, single-cell we long-term. Chromium robust It’s This it’s to new quarter, in believe customer the particular, expression. clear Chromium its this see increasing advantages momentum launch. Flex, building. platform that multiplexing, we transformative the performance, be traction early for will continue cost and enthusiasm compatibility, the Flex gene is and sample over to in broad very gold

how results evaluation achieved examples to assay first revealed the bladder multiple the who their run per in and FFPE One in that customer cancer hearing costs. some only Flex, at to shared with leverage initial customers, work built-in lower opening and cell sample to more are years larger old pathologists. of blocks, single samples XX assay’s signatures We’re new eye archival samples, multiplexing are amazing studies now that planning

millions potential we’ve The XXx of choose their enable to increasingly this our like customers we’re play more assay to to application Flex and of to samples believe Flex drawing we’re and expression. research will menu as Flex assay single applications for multiplex the disease scale our Flex available capabilities Flex a cell continuing across proteins within XXx plug more to broaden Later additional the flagship analytes. multi-omics gene enthusiasm become just more to choice. opportunities samples, on palpable done, we new and reinforces up the translational settings. expression more expect And more surface cell that and open belief new cells. ecosystem barcode our It’s We researchers feature always the on portfolio year, seeing first expand as has in basis gene the of and profile invest to simultaneously into cell-by-cell

we’ve all getting believe with analysis, and All cell I the single ahead started. more long on existing such, of and accelerate we this performance as a and Chromium exclusively customers available for customers. together, by we single cell progress The the still believe available X instruments, why runway most new X as the power this Series expect tool far and just is is Series made powerful placements both there’s appreciate assay. is to firmly Flex is Chromium despite

Visium largest emerged We and turning public in number to only Visium spatial thousands and the generated both NGS-based labs in datasets since technology, Xenium during ago, by where our leader exceeded a our Spatial, the Now, QX. then, and of Visium having clear has platforms as of few used years expectations launched far.

the also opens types have of new up helped data. vX better better adoption the with CytAssist providing customers experience the These products research, more CytAssist Last workflow. a samples had with and Visium challenges and faced launches more year’s for customers and sample solve historically Visium key platform. our of further Visium accelerated FFPE

This now fixed solid sample It’s our QX. we quarter, drive Visium see enabling all frozen QX, we a and on instrument-free fresh in remained protocols continue. preferred in expect utilization. samples, method particularly assays, to major to Demand exciting launched became increased CytAssist to surpassing CytAssist-based for trajectory run the types these placements both CytAssist. for consumables been

XXx XXx labs a our either QX are our of who or existing A users the it’s CytAssist. is into This fraction of entirely in ecosystem: to large labs to future new just potential the And indicator that new adopting instrument went placements power platform promising growth. bringing not new Visium to were

trends platform. demonstrate we’re CytAssist the These why confident the of is Visium future

will invest in on capabilities developing franchise, exclusively that be and innovate We’re Visium CytAssist. new the to continuing available

we transcriptome Gene to cross-validate analytes an H&E morphology-first analytes on a with on staining and complementary researchers both the new This findings same This to conducted image of molecular level to assay their obtain three section protein, RNA pristine enables preserving information-rich and kind the + Linking upfront. understanding. offer be H&E its same in will researchers a high-plex only tissue its workflow, staining section. Visium patterns of quarter, plan first empowering all whole launch one, Protein and Expression, with the tissue

just feedback the hearing with couldn’t of we’re we Situ Xenium, to Xenium the be the and to traction in performing as to works analysis. since out December, built believe exciting other researchers set is turning incredible shipping We initial same so we which and It’s platform more it pleased first Now, Xenium the we in our our hands customers. see best the for momentum from In we’ve products. build started

and To our their through dedication the engine a this us and of innovation us is the customers tell have of strength team. our use our routine testament show to and talent

only performance but not ease and their Xenium’s have platform. the customers Our engaging of entire praised experience with use, also

rave the field the is delivered years. impact have shows given and which regular for design for the key launch, to field. use marketed training, It and depth scale breadth, in and now support in we’ve awesome They’ve we and during their installation to intended reviews over built specs the real teams of Commercial the our developed,

a that value on-market system’s results motivating exciting deliver has stunning images and To seeing Xenium, discoveries. for and run see been and new features not it’s real lead our on-paper on generate after our powerful futures that run to are Researchers customers rewarding team. deeply initial

microarrays. their across sample various In fact, customers complex FFPE types, from and tissues of end and Xenium of to precious completed lung including skin, our with own including runs ranging samples, mouse dozens tissue breast, more samples, the kidney, various Frozen, human since brain successful Fresh have January,

analysis data completing The the feedback fronts. from and number a workflow validates advantages differentiation sample to they’ve across performance after of entire Xenium’s independently prep shared

inherent sensitive. the features To our start, to in Situ Xenium unique up excellent are is sensitivity times of system. materials high-quality, trustworthy necessary in sets foundations In currently to marketing delivers a any chemistry, our and information We thanks compared data competitor’s own and Xenium found specificity, to which six more

in data, competitor’s be better platform, XX each to XX% found delivers other or to in than confidence that up or Xenium specificity, intended marketing where Xenium transcript higher phantom each one much also giving genes X% using no can we detected transcripts a customers the specificity misleading. their there’s the comparison In cells delivers times of another false cell samples. that and is the

Beyond number our microarrays. best-in-class our With time, customers. in or performance, amount even flexibility fewest Xenium’s run very ease workflow, use least of tissue of early enabling the area, multiple Xenium, can the of sections, large analyze Researchers researchers with maximum and area, using are throughput resonating slides. efficient the slide single use, most tissue smaller can well also sections entire to

gene well. – research their answer our also questions addition, to designed In is specific resonating strategy help panel customers

with approach panels, type, custom targeted flexibility tissue of menu Our genes. to a in growing numbers optimized the large combines of by gene add

expand new limited they offerings, of their will any aren’t gene way can the we in panel menu with optimized to This each of tissue-specific With research. by to our launch cancer also content and quarter, panels genes in multi-tissue custom for spike selection. these researchers a own planned continue ensure

In panel recently maximum addition, flexibility. for we gene fully custom a launched

with giving custom at together in measure approach ensuring the Our and performance the and best to unique all researchers the combination is comes experience the of routine throughput. a to which high Situ ability they platform predesigned increasingly and and the This and use. and fully differentiated essential panels field, software positive of an data high demonstration performance In genes of to validated analysis, enabling is our caliber customer need to

the researchers large challenging it for data field has in Everyone of to Situ about be handle amounts instruments. In the produced can talked how by

to play key of one these exactly like our strengths. challenges However,

in company, invested to have contrast outsource We the and software the analysis data expertise days and earliest world-class function. critical built others since who of this

have customers. a differentiator is brought impact prowess primary to team’s Xenium, where cell instrument our clustering software the to that’s the XXx and approach Xenium with big and a comprehensive run, with proven the our onboard making We parallel result area results. another yet in the feature is secondary analysis only platform segmentation and including big is

This of the to Explorer data variety run using researchers onerous massive can Xenium without is wide done, Xenium or on post-instrument downloads after their access so immediately interpretation directly transfers. a do source enables want more uploads, for or instrument Customers the who tools. off-instrument analysis need data open or easily the

computational our significantly reduces We’re and fast the approach confident differentiated is burden flexible, on customers. that

and performing In to ambitious for these the many a ability to by built scale Situ multi-year platform, already the We’ve including be the thousands roadmap. demonstrated now We’ve future. exciting backed of both an future Xenium of number best capabilities, and Xenium is genes. to

isoform and to received us giving and enables on that game-changers can insights real deliver detection, so researchers prioritize roadmap want. feedback faster they In better addition, from platforms. uniquely our Xenium mapping Xenium’s us users possible what our we other we’ve simply early SNV precisely real-world aren’t chemistry The is helping

installation about our as and Overall, effort already Xenium, we’re in improvements it. to scaling tremendous we early significant whole-of-company and we We’ve we our year. ahead feel move training really capture increasingly confident in times, progress good the are the and potential made with bringing and through our There’s momentum.

provide – on of The the indicate We already in believe industry our customers technologies transformative our may by Each projects platforms, kinds biological different far and the that on deepest even can are best running not fields. lens biology to value each respective used of decades. in one their in reveal in their Xenium be are class own, most if provides together and be insights. a the our the more

samples, of and believe whether need analyzed that technologies conviction our health. just scale to single reinforce resolution, We context. all large about my cell mastery Our accelerating clinical advancing the research, will progress across and therapeutic to for biology of in the firmly continues critical are each applications one to at platforms right be tissue day human our or

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

I’ll Serge. by was start for March three then XX, reviewing period, for to the compared quarter $XXX.X increase year-over-year. our our update revenue $XXX.X an XX% ended provide year on million you, Total months a XXXX, financial million representing Thank the the results and for outlook for prior will XXXX.

by $XX.X the quarter, the $XX.X of XX% in year Americas’ period. in EMEA year differences this revenue I XX% to our decrease million a Given start of year-over-year. was prior prior revenue geography. million grew regional And period. APAC revenue million, dynamics over going XX% over revenue am $XX.X grew with the

saw the to we quarter. the impact call, of last an China our on beginning in discussed at sales As

there activity such we as existing through lag service in disruptions, after levels While typically believe distributors are providers reorders inventory. is and a work recovering,

We position that at in we and QX through. beginning larger also to continuing believe are also of instituted this customers QX, inventory providers, a contributed typically service of price work increases, to buy customers and particularly the such increases ahead

XX% revenue over consumable million, Spatial XX% was an prior revenue year-over-year revenue up Investor $XXX.X consumable at revenue $XXX.X a quarter, consumables, was last instrument and million, increase consumables XX% our starting this As of and providing total million, we year consumable the with Chromium Chromium was be up Starting we Spatial. December, Day and shared $XX.X by will period. year-over-year. breakout of

to total increase instrument Spatial was revenue year-over-year million, year the period. instruments, of Chromium was over million. prior instrument $XX.X XX% $X.X $XX.X Turning was an million, XX% revenue instrument down and revenue

in instruments our and CytAssist we Xenium in QX revenue a launched year. last did QX spatial last QX instrument material and of As have reminder, not year, of and respectively,

over prior revenue period. was $X.X year services increased XX% Finally, million, the which

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

$XXX.X quarter XXXX Total first were million operating million compared first year. for expenses of the $XXX.X the to for quarter last

million $XX.X first for were expenses R&D quarter million of compared XXXX. to $XX.X the

during increased compared $XX.X to quarter for due XXXX. SG&A quarter of in first related were operational million R&D expenses to million were increase $XX.X the costs The the and personnel expansion. and SG&A primarily expenses

This for Operating $XX.X compensation stock-based first for million a period. loss loss of compared the XXXX. for corresponding of million the was XXXX to $XX.X year the to of first million includes of compared quarter $XX prior $XX million quarter

cash loss securities, quarter net cash of $XX.X and Net loss was first restricted to in quarter and equivalents compared net with for period $XXX cash. the the for a $XX.X of million We ended the million XXXX. million of marketable

guidance raising million over XX% range revenue year million, now to we expect in the to to growth of our be to representing are outlook year $XXX for and $XXX of our full Turning XXXX. XXXX, XX% full

our Our ramp. quarter from well as based along Xenium operational upon updated seeing we into the guidance visibility performance better are feedback momentum reflects our with overwhelmingly early first positive customers as

a to margin than trend lower however, overall our instruments momentum, currently consumables significantly gross other increased margin are instrument products, margin our company to expect the With existing a lower gross Xenium instruments. Xenium carries more sold. Xenium we have comparable as

per yet to to that undertaken, opportunities units, we capacity There continue are margin will instrument instrument reduction, more decline. component over time. not also which we scale cost will have cost improve our produce for As manufacturing the

we the streams where, end over annual over is goal was potential high Our given significant. market are best-in-class performance make components, instrument. we number To be and time, prioritizing do Xenium with to revenue that, instrument, the a cost. for to strategic investment the a consumable used of making utilization could This time

investments not impact our are profile. it these and near-term make view wise financial believe to of does We our long-term

operations Pleasanton, substantially in capital expect key into and we now in to moved timing shifted production. of completed enabler new expenditures with increasing in million to and a two next expenditures, total Xenium and of have final has next our QX, XX QX facility quarters. incurred payments million $XX of the expect The and months see $XX We the the over transact capital we majority

this free drive still flow year capital and towards back expect in in the We to half a of becoming significant cash positive. reduction continue expenditures

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

the balance strong strategic invest cash us support of flexibility sheet. to still position while priorities, Our our in our gives protecting

At this Serge to back point, I’ll turn it

Justin. Thanks,

to open ensure I we their up It is that a moment team, to relentless XXx our tirelessly success. Before mission to our focus thank customers’ it work our who Q&A, apart. for take want on sets

are of products range drive been application our in helping across disease. products health and X,XXX fundamental papers, milestone, achieved wide cited peer-reviewed more as our advances in understanding areas. Our We of a have an powerful, enabling exciting just than discoveries to now

Medicine of article our both the years, past technologies and Cell The that highlighted potential on a Atlas future the progress made by medicine. December the the impact in a and in recent five breakthroughs Underscoring the achievement, the Economist paper incredible Nature over Human by enabled tremendous

be couldn’t science more confident It’s forward. early all there doing a massive push it’s XXx, again them. future. We to strong more are the in clear are team to mission and opportunities day for Thanks our optimistic to days. we and you’re very every our ahead, I about believe that ever still capture than position and

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

[Operator Please you. from Stifel. ahead. Our from your comes open. Dan, Instructions] line first Thank now Arias question Dan go is

questions for Thanks here. guys. Hey

$X.X instrumentation on into can Justin the revenue, the the How for equation us split about and Should million there’s constraints between do the end year? think with be for do and the spatial how figure on Xenium step model? pretty the then you for Xenium back should year? even there to just cadence and help CytAssist a we manufacturing or you up that think loading placement over some we expect quarters the the and

question. for Dan. the Hey, Thanks

split as out. far CytAssist, solid Xenium was for in Xenium As we don’t as and it and a well. But quarter revenues the that Spatial for split our CytAssist for

happy the quite with We’re both. results for

As far to make than we got We’ve continue we as our operationally. manufacturing ramp constraints, visibility do progress into before. the more operational

to place more are And the to success place rollout. instruments them like us that to continues, prioritizing the part as the pace feel continuing year of according to operational the so bullish we’d capability far as we as having as at customer

operating forecast evolved? products low or chromium growth, think of on versus it improvement parts you And and overall is that importance year, Okay. the Serge, of availability maybe the there guy how for the have, take comes had for Thanks. you that if what’s just just selling moving about you environment for the would the that the chromium versus apart on rate year, then still new the just to has when to to and to there working mid-teens And drivers translate commercial this side? then to you Justin,

wise, chromium I Pretty in across lines. I EMEA so the conditions put so AMR and you look Hey, factor probably a a think the the the product globally, geographically saw would especially we pretty substantial if side Dan. and as really change there’s all difference results. still that sort globally the of at growth Yes, certainly on strongest big since macro that

a franchise. of big if behind there the It’s story to is general progress just still So – momentum sort strong contributor underneath lines, that the underlying that suggest overall the think product is relatively underlying moderate you We franchise. chromium does early, quite did the about the and the of that’s flex, that.

sort as a it yet I not So scale. of wouldn’t driver. that up at primary put It’s

cycle. it’s over we said, think I So translational time The it. of it’s as increasing, new that’s I’m will as more is adoption, customer as applications, kind quite that right. it of look trajectory at use in special early about become cases. one But certainly driving still our new just how would into kind

Hey, is Dan, this Justin.

our going in we gave in And second the For to Chromium the range both on question growth in percentages up starting regards those forward. by at call, the Xenium. taking bullish expect call on call, Spatial. range Chromium specifically and the had guidance lower point beat each that on we this the to But going introduce by I on for Spatial by including we’re update end. of to on part your the when last earning’s a don’t and looking the the we a changes guidance guide, the end represents that $XX and we’re higher million more view QX that

As some and had about and mentioned, in Serge in AMR in as AMR We in of were Chromium strong talking but was EMEA. like far the XX%. rates Chromium growth overall the APAC, EMEA the drivers of weakness

when looking that China into we’re the of rest our so year, we outlook expect in that we’re for and that the saw offsetting on And to the weakness QX. continue QX we in against at

guys. Thanks Okay.

now Please open. Brennan from question line ahead. Dan, next your from Cowen. go is comes Our Dan

guys. lot color throughout for gave you in what’s just the off just started how off, color of for question prepared your Maybe just expectations, progression Any a bit, a and Maybe now ended, the kind how Great, kind quarter of I could thanks. year? the started kind the included of we China? think quarter how should Thanks about yes, the second and on know through walk remarks. China, you little of you on original just

and APAC customer EMEA providers. in distributors an in And Justin. overall which was where about Sure is model APAC. and year-over-year. just through was the start with China, distributors. business I’ll and China, service Maybe And to than that by we sell year-over-year, and our down driven APAC overall take a was AMR Dan. the as start. XX% that XX% whole different This primarily I’ll is is down

levels there’s so And two there. sales of

quarter higher because And the so service that that pull we year. we at last was from of increase by inventory, the forward implemented beginning was of as exacerbated mentioned the but providers, the that price the lockdowns,

providers particular concentration to price increases do the due of have of the distributors forward overall service so to and product in just they And and larger advance a throughput tend pull the in sell.

So are the we distributors. inventory at can and service from levels what still tell providers the high

We expect of we to roughly see a to is recovery QX see year. and some QX to then expect similar that half in the the back

it. Got

then and competitive of will, Okay. and Serge, the prepared Xenium, that early, any a the the metrics. have on if competitive appreciate sensitivity maybe or other just on remarks you color lot specificity profile, dynamics you

side, have Sounds any are you’re you year So And next you’re you Spatial the what learned so maybe like Xenium far launch? field? has program, the launch? big like access if terms on Obviously for the on lead, like any the just up win as your of few years set, far on early you the kind had at what early in opportunity, in the color they’ve opportunity look seeing so of early think from bumping thus backlog color, Nanostring they guidance but the from what in you and the a Xenium had of seeing rates.

opportunity the of always our this opportunity now launch. Yes, Dan, right? with so view been and with Overall future bullish, Xenium in specifically has

which is and only with If here eager customers, reinforcing samples is and speed kind they’re with that that potential their run to long-term our experience adopt anything, our has the massive, changed. these of conviction. always platforms not So the

are that this through our and to [ph] enable trajectory their utilization. But up now, a I there. look you systems very, are, the customers the others longer are placements our the samples been quite that high for large right right market these are We kind mean, many just talking I when running are the products have and the getting have bit at how very rapidly how throughput about built systems of fabular and systems, of to running

very is is our side. trajectory clearly The on

good into really and experience the based customers. is usage these developed initial specifically again, the strength are And going platform feeling right forward. now we’ve and So where leaning itself we just really early here learnings on much it early on our driving very with for the the

yes, trajectory so potential we’re make coming in tremendous years. moment also over doesn’t And the we as good, the so feeling look the and

Our your line Stanley. next comes from from Tejas, Please now ahead. go Savant question Tejas open. Morgan

Good evening. Hi, guys.

I’ll – Serge, seems and of Dan So, start over with have Xenium, hit some maybe upon the Dan here.

to they mean, orders outpace things sort versus those quarter, in the publish was it hope are where grow just you your thrown know running to expect at the a through So And – increased of we I competition. kick down point? at any some shipments May? you you to have bit don’t start? backlog would on sets see head-to-head of the that first I the data the here? just can little versus Or off, did specs relative share to on like Do color sense, quantify i.e., gauntlet backlog, but from customers did the similar you And month-over-month qualitative experiments a

question, at I remarks, comparisons, actually we of to against benefit talked you prepared as also kind So your marketing and and time is to doubts first over to others went that my seeing what very comparisons while about look numbers. through kind of the rapid our in We clip we’re through actually are being could that a our challenge so maybe these not run cases on Xenium. go – see others, performance those in in of the you of systems terms much. with website, Tejas compare The those materials give and if

to And are I question expect good as be there’s we the as and our going we we on But we’re bookings head-to-head so where to and feel backlog And bookings. said, at customers. be from really the yes, our and comment we’re far feedback do do about like going momentum. don’t feeling getting there’s comparisons. of currently good We

customers are the with coming. the of with team lot Catalyst having, lot is have in program, the initial really fired the all content the a of sales releases had Right now, momentum a with more launch that’s field. our Our we up success

so of And customers. and the about fired team good up trajectory sales our this is interest we from feel

quick it. And Chromium Justin. a helpful. That’s you, follow-up and then on to clean Got then up just for

sort you that a of projects Chromium, sort you, of then timeline event? around cash cannibalization the out do I by the you talked quicker? some out Justin I Or here. of actually were free flow you line, few through year-end? this. you on get catch you. here playing flow potentially you sample Is expect you’ve the are a sample moving know elasticity free bit as Did Or anticipated? So portfolio Is mentioned that it Serge, give And still on the large now a you XXXX little come when you expect parts a seeing looking laid cash for possibility to flex be about maybe breakeven? Thank there didn’t to you but on it at.

Yes.

Tejas, So let with the me start Flex question.

meaning still of Now to lot been into these multiplex who a more franchise. because Flex, running Chromium coming through Flex those Flex a to and again Most to it, of right earlier, what overall relatively pilots. scaling relative our But customers are said out of version have buying And are kind people in customers and still is sort to early customers the small and test now. of phase the the it, there’s single just are up. the are number adopt emphasize kits. Flex it cycle a consistently bought More customers have to up pilot quite the of version I of still scaling buying

sort play going the pressure to then because most first sort is We workflow and of on is you right? people put which out initially going too up and time adopt scaling that larger you that is say people multiplex and initial elasticity so some that to product. the what it’s early of start larger that to expect we’re say testing still projects, scale. when in would to And phase are And way into

are multiplex and some large ordering now people progressing Some further kits. started have

see plays we’ll So how that out.

cash into account as year. see that’s and cash as still course, far is towards. towards by that of the flow the ramp. even I If this in I think towards flow. be for as situation question that’s the biggest units we’re Xenium year, strains if of thing we’re achieve year. be working To cash When flow, we that’s, steeply your planning free the the We find looking the would would end towards there what the there following the right events. that end driving the of the a year, ramp Yes, be find end not increasing levers inflection more ourselves more we the is that the capital what the free believe year, of But free Tejas, that of now And goal, end that we And of any Justin. significant i.e., good can end our on year the lever non-recurring could would taking at at the of on

Please go open. your Patrick, from next from is now Patrick line question ahead. Our Donnelly comes Citi.

maybe Hi, questions. Xenium. Serge, guys. for another Thanks one taking on the

a way some out and the in with customers rest seeing getting cannibalization you of there, you’re more any you think talk portfolio? kind to just terms I synergistic customer be out it Are you have about build expand can that with that to certainly mean, of Xenium of would on any looking backlog the the you reception? portfolio? maybe metrics or guys But spatial side cannibalization the are helpful. And start. just Now systems seeing to then spatial any about

It’s question, right? about and something Yes, that’s a that had been thinking we good about. Patrick, questions we’ve

to see and look think it’s certainly early at Xenium when we Visium. cannibalization too I

to the if In actually we’re great of seeing full cases. buy ecosystem. customers platforms use there to a the anything, and into is the And amount complementarity fact,

buying In have of the that X, are and multiple meaning customers all fact, make platforms, we workflows who use Xenium the Chromium together and three. setting up the CytAssist

now, people that’s bandwidth of now say, a But their the let’s think a So how experience the a adopters, a at will now. around are of interest an right might lot with right intense of stage, the certainly this minor I It complementarity. Chromium. evolve. definitely the think I might of And run which There’s sort interest early have of margin effect lot is a on otherwise, which technologies. relatively of spending some Xenium on sort element mental Xenium, is lot lot like open this of question there all

have the But – think And largely out, three I a we’ll And is out platform applications. and principal three complementary. of between how platforms, about I see different as by why good as reason evolve, this feel because all design. really pieces – invested this is platforms. how regardless our about overarching markets there’s shakes is it in all that the shake we the we overall things position we that talked

Dan’s very levels just see there? get terms Can Okay. That’s for Justin, saw a know, January and helpful. don’t improve out. whether assume be metrics in maybe follow-up that helpful. to about love would it’s a of activity things I’d on I activity throughout should as just April, in And any any you of – feel you But you color quarter you from on coming well there bad ramp the trying that And any helping just question that Obviously, was talk have, did stimulus out kind there. you I have, and China. then

stimulus. Patrick, goes, China far anything as as as as didn’t we far see Yes,

of In fact, issues. customers with customers drivers funding upon imposed in other specifically, And their customers. that saw payment by where with we longer liquidity the some terms customers, some direction having and our them were

signs overall. there more of would tailwinds say headwinds I so, And than

different of rest And is add, thing, kind the than of would I maybe the Patrick, landscape world. the in too, one China just

tend end of kind couple our run providers. have We things just external couple the internal We’re over intermediaries, customer selling been And team’s last – team is our little been The especially like for to into through distributors, there has – team only much last service majority vast time. there through And of the two through the the first providers. has China the a ground much. don’t come for patterns, not be given back nearly right? our because murky, service of outside China to see of certainly, on of weeks then able years, the as business years through and as our layers last few of usage

been visibility quarters. greater has has expect So to been murkier, in gain coming somewhat limited, but generally the China our visibility we in

question next ahead. your Sachs. line open. comes go Goldman Please Sykes Matthew, from Our from is Matthew now

and Thanks my were in taking you of Great. the of think, comments bit little than the Chromium about of in you instrument that the maturing instruments, Or increased adoption? we Serge, made lower specifically you latter a year. Chromium questions. part momentum that Is sort kind are Flex, expecting. driving for for Maybe year. But for just first other Chromium X later of tailwinds just there on some expect you what came see part the

on instruments all let that terms applications of I generally Matt, across side. momentum [ph] we’re of comment so that seeing just a have themselves. macroeconomic in roughly Chromium. year. And in of sort pickup seeing I I’ll nice All that. more talked we Well, general a of for the about the I EMEA basically a the rest really – Justin to mean Chromium, and expectation the on talk will reasonable continue AMR kind didn’t we’re of

add Hi, I that. can Yes, Matt. to

there’s Chromium to at there XX% look things unpack. you when it instruments revenue, was down but right, year-over-year, few a You’re

instrument. the being in when who was the part future. this time high had need year, adopted heavily the wanted split iX weighed high First near and it is use throughput towards the that you’re or throughput the at last was looking Chromium X to of And at customers by Chromium X

the the and been shift past X more split. time, quarter seeing iX And iX XX% Chromium of was Over in the iX. towards we’ve fact, mix this over

that unit was for digits. in low-double iX the year-over-year if look revenue and you but Chromium a worldwide went basis So down, units X at the up on

and good right focused well. We so the we’re XXx driving who And don’t feel now for are consumables. about the as consumables. the to primary headed. a it’s really and on Chromium instruments is want customers business where instruments And we on But consumables that constraint think use overall, overall, focus

goes. time, looking Flex, the And customer base to only then a complete is on the with Flex Series. over available as as And Flex cycle going far is as X upgrade far forward, as drive

key that’s over turning so driver be primarily going that And a the future instrument iXs to Series. in and placing X eventually base to of installed the

Got color. Serge, you. one That’s really then just And Serge. helpful maybe for Justin, Thanks, it.

outside compromising the improve just gross You what those and instrument are you not Xenium substituting. or of can with of things gross there make what margin the to of the of of given by the do the mentioned margin changing longer of as larger was launch, volumes, else level time components that and sure but goes of profile just different gross period margin the that over scale the can mix maybe performance I’m you sort I’m importance kind launched Xenium, that of you improve you without the the time the term sophistication the or of either everything but components extent of but are use, it? that – you actually high curious a component within obviously just instrument improve can actually could over

for was build our well the instrument That market. there’s to have focus. of proud But platform for performance time performance. we to how the we and to for and yes, have tighten – lots – certainly to works. optimize, certainly Matt, opportunities mean, And down the that we really Xenium, we opportunities the certainly prioritize we right costs I those feel now, and forward, of bring affecting us going there’s without it of as lots

Our Mikson go ahead. next question is Kyle, now Please comes Canaccord. your from line from Kyle open.

year, quarter for there when at few bit like Chromium in XXXX, to were for obviously the curious year-over-year forward most here? wondering about really the looking was were if was for did going growth a you is just a normalized the expecting headwinds are here, XQ instruments Thanks. I here challenge a just last first just comparison talk X% that. you is about if that but Chromium XQ you business XXXX And could Justin, we’re compared what the

year half relatively I right this do looking when going now. Hey, easier pickup year is were compare, Kyle, another. I it in do a get one compare. then a think more as fairly we flat QX first saw And be challenging to year, do that into of and far think when and the QX goes, back last half of that I are the QX. QX we the we think it’s the to last as year-over-year, year

of the the Instruments a and As past a that specific this was we’re strong placements effect year. at up a had QX Chromium would went beginning QX consumables going for of far instruments. the to the year, went for guide this caution increase quarter the year. extrapolating results respectively. to We rest price But really rest X% I into and And not the of against for as the number. X%

to amount the I let’s going so variable Flex Chromium cycle. goes how I do there on the see only iX, complete and eventually the think a over the more the X year mentioned, of time rest it’s iX of And be placements, going just to time, driving upgrade And it. is is like drive to I it’ll take specifically think

I And So right? X% consumable year, think, [indiscernible] on through to was high but the you so so I the consumable on great. increases, how That pricing volume, far? X% you’re them the any volume, just the Serge, is quoted that following-up different Chromium just Okay. I the ordering levels progressing low FYI, guess, And customers, increased just great. of maybe that was this trends the then that was total for did, seeing

Yes.

we annual elasticity So like from demand. the price that of the price – separate strategic of increases would more work I do the trajectory

The – year. last is of the annually. There more there this cost just this was increase these more one prices. first We inflation We business. of do sort was obviously doing

a years. did than we’ve previous increase in we So higher had done somewhat

much goes, stages of Flex penetration. in. through elasticity the the as is market our where multiplexing capability early strategy that’s specifically and very comes in the product configurations, – do that of Kit we Flex and the to far That’s As still of demand

so of As run them stage I of the a are far earlier, said most have customers lot testing – A pilots. in kit. have

revenue relatively them a our use. now routine up to overarching relative scaling into or small especially are overall of that’s base. But number, Some

but terrible. the that looking Kit. We’ll of So I be how Flex to over early think kind it’s at the plays out the quarters, elasticity it’s substantially coming see effects of

UBS. line ahead. Our open. John from go from Please now comes next John, question Sourbeer is your

Hi, [indiscernible] Serge [indiscernible] quarter. the on on the call calling John. is for hello. This –

the you that… do the your on simple provide think Can competitors Xenium segmentation Xenium? like question on Xenium of of side. the a how with segmentation you cell the color cell And quick So compare

Yes.

very – component and we cell is is knew In critical system, So In segmentation a beginning. a like of any platform, the that any from Situ Situ

to So we oriented invested foundation taken of kind have very a cell multi-facet solving this lot in the approach and problem. development and segmentation a

is and believe The is really insights on positive based which else segmentation using gotten good, generally, generating great initial release And nucleus with method. platform performance, really outperforming we’ve based Xenium And our our the – the really highly a currently feedback. good nuclear what’s customers we strongly already our there. on that’s results anything out

There’s out Now only us. in a and be lot the work AGBT this at on rolling additional Conference It’s staining, around staining, other going we’ll improvements February, improvements We really top what current AGBT the done, doing around a build more talk to more lot that’s membrane top to of to our about of be algorithms foundation. the to at where build cytosol capabilities approach and kind forward. on further start. of we’re in

coming improvements else that be out huge. in now right more relative in enrolling coming than we’re and a good the there that’s quarters believe over we spot So – a the really to we’ll lot in there’s a everything

you. very comment. That’s Thank great

to Is here of customers, demand existing kind are on is CytAssist, seeing you provide Thank or more customer color from? coming most here like the can customer, of this? new you. the where type follow-up it you one Just shipping what

Yes.

XXx the a completely. interesting large are majority So new entirely. been fraction customers them actually CytAssist of prior we’ve Visium noted of And some thing expect. would like is you to users are the as new to few Visium have very actually a actually quite of But that

well the is user go for that I a of that So to potential is Visium suggests base – there think substantial Visium. there beyond initial that

than the have at we instrument less suggest substantial thought the they’re market might manual actually is workflow So that and larger and CytAssist what for before.

from – customer of like – look feedback across CytAssist dozens just single We tissues, talking really is across getting it we’re the a data the slide. old dozens FFPE, had ship customers. It to that worked continents, slides challenging work great and and slides every us on managed – CytAssist like FFPE they telling on

it’s don’t see in you really, better And really than the expect. our and the expectations. to as even don’t like, ways, designed So instrument results rewarding that initial many working kind [indiscernible]

your from now comes is Morgan. Please J.P. Our from ahead. open. next Julia question Qin line go Julia,

good Hi, afternoon.

couple Chromium. on So ups here follow just a

tier of last early – Could give large I tie customers. distribution more of Chromium do playing how – scale through? think How X? projects? concentrated top versus color Chromium for you previous Chromium signs of that’s Or you us iX out. of it’s nice on are to of concentrated And price see some broad-based how distribution that now that we mix pull on more we seeing do the with your commentary the is sort the

flex I it’s made early in do previously – very see So that Julia lines still adoption the so along the – cycle. – of we adoption, but were in comments the more

to we ways kind market, expect elasticity us on comment going drive to early the the into is price price this too long the of feel flex elasticity that. the there’s that we for it’s so precisely do And tremendous And of be out. one playing run, is to how do in primary and in do to that. Obviously,

as – not I single fairly sort a they’re customer base of not huge dominant It’s part and instruments, there’s necessarily of think through I there’s our of shift base. a been sort very usage patterns is concentrated. of don’t our a and diverse material the pull far our that’s As revenue think customer very that

dispersed. big quite multithousand There’s We customers running. publications. quite robust that in some do It’s some studies sample that sense. It’s have are large

of are that running a have sort project of tools oriented. studies basic consistently individual some doing customers more biology on lot also are come We a some developmental basis, that who are in, one-off that that

usage. of huge gamut So recently. I dispersed material necessarily say a there’s that wouldn’t been And fairly it’s change a

with distribution or could you throughput about actually to given necessary helpful. Are you Xenium, we maybe the quantitative, without some the then give you seeing capacity are and flex on of And advantage Xenium do have more That’s well? will even too on And color given how funnel through think kind customers CRO getting throughput the pull as samples advantage, throughput the a think the of order enough seeing the the us your advantage? of Okay. customers more you customer biopharma customers the take should of academia and level system? in

Yes.

academia, of and terms a It there’s other there’s from mix, the healthy sure platforms in that pharma, is seen huge kind biotech, I’m early difference of the with if stages – a not customer launch. we’ve of quite quite our what forward in In mix some CROs of I some the encouraging. leaning service of sure, sophisticated like providers, mean, brand kind tend to new a adoption. so for of platform, terms seeing this be that it’s and we’re obviously is customers

is Your samples. far like what I I jumping to And customers of samples. People – dozens question but tell, too is sort average to will as Look, time – what at and it the like math, $X samples if of that’s mean, issue the pull extent the for running we’ve be. possible designed, not pull many, been sort all. to going an we’ll kind as yes, you early comment mean, some case will of I of – use have are in – of it the way the through, as if was and an that have we’ll had means it’ll order is see multiple, whether run runs. max people indicators our to multiple but like mean, who’ve multiple early through do on through actually instrument million, it’s

comes from Mason Stephens. question is now line your next go open. Mason, ahead. Our Carrico Please from

customers? one and color thanks you adoption guys, about first and My you compared product for taking on XXXX How flex your the provide feedback pharma Chromium ramp to from Hey this pharma for of XXXX can academic any thinking customers? incremental curve Flex, are in the on questions.

a an good And interesting, Because obviously question. that’s particular resonance has translational with worked that’s samples. customers, right? Yes, Flex FFPE it with

are that kit, to in stage, going first this it’s at are are think the too like, this to exploring I Now product people who academia fact be early this on more say who side. exploring

the on work through. more start we translational this the as it trajectory Now up. validate expect that side. of performance the farmer products product, And That’s go picking all they they’re through these then the will and

products kind do and through of need these to academia kind of go up go get that then their basis You on get through they validation farm. and initially. let And picked naturally

that do yet expect cycle. over time, in not So to I happen but that

half Visium of number as given we likely a Okay. Got consumption say, this second consumable and first an Have last the so, consumable of are in in the And have half And Thanks. benefit the who is of customers year? And early on. for purchased it. increase year an platform? since seen year? placements CytAssist XXXX, see let’s CytAssist instrument, bought there their to opportunity growth the on you of this in – to the Visium if a they back you enter half in

looking Mason, workflow that That take one. we’ve Hey, is improves this something been for customers. at. a number is of CytAssist issues The Justin. that I’ll

we purchase. increase usage pattern their after at customers a of the before, – are purchase. And even CytAssist that that usage were seeing regular just post we And CytAssist in looked buying an before and so Visium are

wouldn’t think the without also tried the newer of instrument. we Visium customers that And the have has regular in bringing it benefit who

it’s the customers. and But what with that little think usage with a look driving it’s fully. And data too see so been to right does to we’ve have we more like out able early it I that truly now extrapolate

comes question ahead. is of Michael Please now your Bank America. Ryskin from from next Our Michael, go open. line

the to at I’ll EMEA for just of the ask an talking if said Americas, driving taking are the question, you’re things lines when improve along kind that just Great. performance keep are you what condition versus earlier particularly question, cited look moving. macro the China. you In one you factors about of, Thanks guys. response globally, Chromium, something in

to So on America funding wondering if Is little environment? little you can I’m and it Is EMEA. different that macro access expand it clinical just and a things. it just mean on both probably that bit XX for expand samples? bit, Is a could

Yes.

this them oriented mentioned like much more we’re on some certainly discovery coming have of and factors, necessarily oriented. say, just we of effect seeing wouldn’t depressed. out I it, So that say point also maybe obviously, QX fairly been to to year because than and are your it’s samples translationally that. last depressed I various access take was and of I clinical would applications multiple just was due last QX to kind

are those So And kind up, these activity with continuation with sort been part kind of customers expecting a has as in The – and collaborations, geographies. been products half our than QX last generally the kind I sort of it’s of picking that of is these in of and seeing We of was projects better back of started level somewhat And our better the QX. we sort it think I people just in the the was QX think ramping it up have story bearing of we starting labs than fruit. see year. getting they’re now of that’s the doing, of back pattern. QX do that

that’s referring And how that’s what we’re we’re to. – so

today’s no gentlemen, and joining. have further currently call. concludes this for Ladies questions. you We Thank