10x Genomics (TXG) 3 Aug 232023 Q2 Earnings call transcript

Hello, everyone. Welcome to the 10x Genomics Second Quarter 2023 Earnings Conference Call. I will now hand the call over to your host, Cassie Corneau. Cassie, please go ahead.

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

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

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

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

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

remarks. Instructions]. our [Operator We host prepared session question-and-answer will after a

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

single call, and On will second overview everyone. Cassie, with today's performance our I quarter spatial. and cell afternoon, good both Thanks, strong of start in an

trends of Justin more our the year. outlook will our for of rest highlighted the update call on and Xenium. business turn our I Next, the and detailed our and customers’' over rapid I in for by progress an platforms, financials, at a to will each adoption momentum of look for three then tremendous enthusiasm share

with strong a second quarter, year-over-year revenue million. $XXX XX% delivered growing We to

solid cell led discuss. three This headwinds performance Americas the platforms. our demand spatial and driven was and Our strong by and will EMEA all across by in offset results by across growth Justin and continued portfolios, as partially single were execution instruments China, in for

The momentum Xenium Visium orders our yet in In but QX, expertise our is scale leveraged to In performing shipments, Not we manufacturing suite best of also to spatial quarter discovery continued strong ramp as only for our outpaced recognized and analysis, even platform clear highlight spatial demand quickly Xenium shipments. this is for biology. tools. we have Situ the see so, increasingly

strengths by velocity that differentiated innovation of commercial engine, The scale. and world-class quarter's results always have reinforce us: the our backed This our broad manufacturing

continue company We so and efficiency of maximize the improve and incredible to on the throughout operational drive deliver excellence all can ahead. we to opportunities work

leader Chromium, unambiguous in let starting Now, cell about platform, each share with the more single analysis. me

demand. performance driven continues of double-digit that an growth, by Americas The and the ongoing challenges use EMEA, broad despite is once of with In performance, strong drive Chromium year-over-year researchers important China. resonate and QX, ease and consumables scalability portfolio to differentiator in again consumables our delivered in

launch, Flex continue the long traction strengthens into to from our enthusiasm clear momentum Flex. to and The getting Chromium to seeing build we're further Chromium now the conviction one increasing year transformative the particular, franchise started. and In this for my customers We're just be term. potential that still we’re it's has over

a and proteins samples, applications this within more by Feature the millions to assay more across Flex cells. menu multiplexed and samples our profile ahead, analytes. simultaneously and portfolio enabling application This is This broaden more Barcode the scale launch cell-by-cell part to later plan of enable of long-term Flex of surface quarter. will on for gene cell our basis to Looking expect we expression new researchers

power up and for X X this X they Series broad owners strong researchers, the available first-time a are capabilities for as the will across pleased upgrading Controller seeing assay, driving expand of expect Series, it cell traction to users for this instrument we we new powerful the seeing year-to-date. the to As performance increased existing Flex demand of We're range keep we’re placements Chromium continued are Series We're customers robustly XXx, of single see whether instruments. with Chromium tool or and analysis. on the more placements and sequentially

consumables We seeing of have reinforces court positive initial Chromium both ahead, within beyond. we the the believe runway we’re our for long home cellular and momentum instruments our and atlassing

it’s analysis very could a particularly in inspiring AI uncovered new And and XXx the expected tools, therapy. crystal together ball Nature Blood researchers single applications, power the the CAR-T translational cell in that future for of myeloid response translational insights a large journal to cancer could persistence relative power recent We biopharma potential. in revealing Two gene of determine cell highlighted the in our provide signature, In into still leukemia. predicting Medicine, showed how with care. of XXx cell with have help the beachheads the of drug a early single research, study chronic published strong portfolio but established papers

up cell settings It's open will biopharma awesome FFPE translational to our the research see forward. translational more Chromium moving exclusively research. in We help and cell our of Flex, capabilities, single believe continued first-to-world even in portfolio growth single on

Visium to turning second Xenium where delivered strong the very during both our spatial, and Now, platforms quarter. growth

the By experience for one CytAssist a better workflow CytAssist clear which of use better In driving is year Visium, researchers see and key demand launch. into our a better spurring to is more giving assays. routine CytAssist Visium robust workflow It's data, challenges increased initial, instrument, the and with and removed demand the Visium now has we continued platform. manual

instrument-free now reinforcing the In consumables Visium fact, CytAssist-based preferred this research. is our sales quarter, of doubled our method CytAssist how for assays,

more CytAssist applications. available and to analytes the expand on continue invest the of enable foundation, the we to platform as With more breadth Visium to capabilities

Expression CytAssist we launched our Assay. Protein quarter, This Gene and Visium

one, three on Our unique all RNA, researchers and analytes in whole transcriptome protein, staining,– tissue H&E exact same morphology-first workflow section. enables the high-plex with

project our on We sharing get wait discovery we challenging, exclusively CytAssist. for. types looking the data experience customers addition, precisely resolution. Visium these team unbiased for our This XXx to make spatial be as but We the the excellent are is been single-cell-scale can't will of offered progress HD spectacular. as launch. to at which transcriptome Visium is to ambitious has has In exciting And challenges continues been power it to on built on look of forward as more closer updates whole HD,

which the is we believe turning performing In platform Xenium, Now, best for firmly Situ to analysis.

Xenium whole-of-company have and Xenium full bring momentum complete and the capturing the as is We the data. gain as experiments more we more effort we powerful, access to to demonstrate results quarter's their this What opportunity: have immediate independently high-quality researchers, momentum labs own with

initially We than have manufacturing where momentum in and we expected. ramped production operations, faster we

we've levels and commercial roadmap, our of quarter targeted have custom have And, of on with and velocity as continued higher software deployed We and new world-class menu during sensitivity team, deliver our a customer a high to our broad and even throughput. momentum firmware experience. focus to expand of product and updates panels gene continued with orders momentum we with the delivering a

our function, This network, dedication and the our and incredible the team. of our innovation of is scale to expertise strength and our engine, manufacturing talent breadth depth progress the and a commercial the of testament of

our components it run, so samples. was instrument every a results, powerful With was performance. best-in-class is directly now straight Xenium’s labs generating optimize researchers deliver build the they a in in software, could invested precious combination the carefully differentiated to always their well own that the into differentiation real to box high-end, we the With are and out own system sophisticated best-in-class in engineered which their chemistry, onboard rhetoric; performance unique of Xenium are seeing with of We and routinely premium never future.

our the Xenium the to misleading very ensuring believe of has by Xenium products. that False built than hands was true is with signals corroborated means as in excellent just of now “just analysis works Xenium’s specificity, other customers. What Discovery datasets, best-in-class. which This the performance We are vast an noise. of high researchers, majority work” rather than multiple biological is been we Rate In less X.X%, transcripts same

reliably tissues, lowly of to even are those expressed. interest, even when with difficult genes their Xenium researchers on just high genes works sensitivity, enabling measure

a last month. released sensitivity that even the with get onboard we expect We of latest more boost version will which of software, our

with just of enables amount Xenium best-in-class works researchers the using time, of most slides. throughput. to number the in analyze Xenium tissue fewest least the area,

run user weeks guide amount Our throughput; can to XX of and X-centimeter a take on our already recent it scan would researchers week. competitor’s recommended about sections now Based run square tissue. tissue a time, in X same builds software update the on leading

brain, breast, and more. microarrays. Xenium generates brain of types, efficient on easy-to-use describe range broad node a various we've workflow, more on samples, lymph works Fresh tissues, than results tissue skin, some just complex Xenium an to human including FFPE mouse and as boasts Frozen, from Chromium. customers which including and lung, heard also high-caliber easier sample And, Xenium colon,

of specific Xenium questions. panels to answer customizable customers and a menu research broad fit-for-purpose gene with just works their help

We each can panels and offerings, are by now in year. to of by to expect the shipping five ensure these custom are pre-designed, way genes gene launch validated they also of limited own in researchers With their selection. any spike the not end three more

custom researchers launched gene flexibility. addition, give fully In in QX, a we panel to maximum

in partial appreciate the and genes who gene and interest. custom pre-designed, of menu ability validated field differentiated of resonating well study fully the researchers, increasingly panels to is their exact with Our

fact, date level of panel our than half customization. some incorporated of In have more to orders

Xenium road mid-XXXX. in X,XXX panel plex our As a exciting more we're plex to with and part also Generally, launch planning of ambitious more map, tradeoffs. comes

dial sensitivity Xenium's up however, of and throughput, need critical can are many utility chemistry, quantity to still scale assays. lead data specificity to the This dial specificity, and without all you to quality. of can plex thousands plex, these of to you and genes which With deliver sensitivity, levels may of As high we throughput. unique down

easily run immediately variety Explorer transfers time-consuming without who or differentiated expensive is analysis interpretation a results Xenium tools. researchers or done, see primary This And, using the approach Customers wide in can parallel is massive downloads, instrument lastly, uploads, more their its after so do the with analysis. and comprehensive run. onboard with to feature open-source secondary to Xenium Cloud Xenium want data platform on the just requiring software and Xenium of only the works off-instrument onerous subscriptions. data means can instrument

best-performing We both term. for built Xenium to In for the and the at long analysis, Situ system be launch

road our CAR-T feature we robust, driving many gene map isoform like uniquely a xenografts, applications. chemistry. These pipeline, can Xenium expect to and among detection, SNV tracking, enabled are we fusions gene mapping, be capabilities that other Beyond applications differentiated Xenium's multi-year panel by in-demand

Xenium his features time. data for combination even reviews he our earning is remarkable for of when this us rave from one told together, seeing first “jumped the All joy customers;

This decade. and in enthusiasm performance the been with from and momentum the the should our system's spatial the along fact has in is for biology field a that proven XXx strength, way customers reinforce leading

Through our and absolutely customer XXx, scientists deep experience technology been CartaNA, investments that into acquisitions be ideas internal take opportunity products, such emerging our their researchers At we instrumental by and products developed founders we help the to Spatial fundamentally understanding property, them foundational have to and of used and leadership. Transcriptomics, change intellectual relish our incredible biology. that transform have to built can and ReadCoor of as companies have and insights

and is commitment innovation forward. unwavering Our our to driving push mission science to to

always to comes invested delivering no corners in that promised. After researchers, We $X right tools breakthrough to new to as over do customers. products technology. strive development research it what That cutting when our to will means billion well have and is perform cutting-edge there's we and by all bring

both opportunity this potential product again, this priority, us even that foundation, in and in exceptional and one premium the of a our revolution to in to full profile commercial build in to we the leverage in our of the ahead. to Xenium and opportunity reach to the technologies to firmly time in the industry promise It's I strong made may confidence and We've up by Seeing investments financial our our has R&D decades. necessary most this greater capture technology. potential given is have lean to tremendous delivers sciences. lead we're next performance. and and product deliver on customers going solid IP broad life top Seizing validated, that transformative the this the believe us be of

an give is Before I portfolio, turning intellectual Justin, update part over an to call of the our property essential like to innovation our would engine. on which

second the than XXX In a allowed including During more relate technology. we the milestone now XX quarter, alone. patents in or pending, than issued we achieved more have significant than quarter as and Situ issued to these more X,XXX Of

others, sole to not said, own to to As our is our our and patents patents. to policy general protect but practice license our we it have right

protecting scientists funds around We what development technologies innovation will that benefit on steadfast hard focus researchers, our XXx be as so that patients inventions in create, the the our have fuels to of is worked and and world. the ultimately future

our on executing a We're on solid with built mission incredibly fundamentals. strong foundation

dedicated driving is and have XXx to leveraging fully the strengths team set unique improving excellence Our operational always apart. growth, that

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

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

revenue the XX% consumables an Chromium $XXX.X million, revenue consumables spatial and period. year-over-year was million, million, consumables year $XX.X up XX% consumables. Total XX% Starting prior $XXX.X increase up was revenue over year-over-year. of was with

instrument of while to Chromium $XX.X increase Connect, instruments an lower X% in driven number the million, quarter total increased was Turning $XX down revenue the instrument instruments. sales revenue by $XX.X year-over-year. year-over-year XXX% sold instrument prior Total was Chromium period. of million. over of was Chromium Spatial revenue year million, the

instrument end our instrument CytAssist QX year Xenium QX. Visium at launched of and Our the launched in last

material So last we have instrument year. did in not QX of spatial revenue

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

$XX.X XX% grew $XX.X our prior year over over $XX Americas revenue to in a EMEA XX% million, period. of year revenue million geography. year-over-year. And period. the on revenue revenue Moving APAC XX% was prior increase the by grew of

we expected QX to similar said we in what APAC face We continued in region, experienced China. had driven challenges again, in to call, our by be the performance QX. largely we last to China On roughly

pressure in we saw beyond anticipated. we had further region However, what the

with and macroeconomic in right been challenging are dynamics China the We not inventory this the immune we've environment demand seeing exacerbated to impacted now, believe and levels.

on to manage they in as demand our focus continue partners inventory. We end customers our while with market working with driving this distributor

strength prior the Turning compared for $XX.X XXXX for was placements XX% was rest XXXX. second second of saw to a million we margin profit gross quarter by quarter. XX% the statement. year $XX.X to of in to of second for the for compared was Gross quarter million period. gross profit margin the the of decline The Xenium the in quarter income Gross this driven primarily the

last trend As expect Xenium call, as instruments. company other than earnings significantly I on our the margin in that our Xenium a given quarters sold, instrument early of lower instruments shared adoption, overall we gross the carries to are margin lower more

comparable increase ramp Xenium gross customers Xenium the will their to a products become up over our a margin which overall the portion and larger revenue consumables, As utilization, margin our have of existing time.

quarter for for expenses $XX.X SG&A due were XXXX. second in million second compared $XXX the for costs to personnel-related operating of to were operational million quarter $XX.X quarter were the R&D to the of Total expenses million to the increases million $XXX XXXX quarter expenses second million second year. The million SG&A expenses R&D last for compared the compared were $XX.X and increased of expansion. primarily $XX.X during XXXX. and quarter

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

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

our to for XXXX. outlook Turning

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

continued visibility Our quarter rest we reflects guidance APAC, as This APAC, challenges of year. continued the the weakness and better seen updated into performance is reflects Xenium as ramp. by the China, offset our our driven in primarily well second the by momentum expect operational with for we've in

our Our other has and cash across free effectively that flow helped headcount the manage a spending has instilled drive us discipline becoming positive towards cost organization.

flow mentioned service be have becoming would one need capacity, ramp. support. increased biggest of To before we of support the slope builds, I will factors positive cash the Xenium and steeper adoption inventory a installation operational free in our curve, that capacity,

to to This that quarter Xenium. biology. spatial enthusiasm continues add the and early demand long-term It conviction we for deepens for seeing our are the potential in

be margin gross to investments even growth, our in impacts further such are long-term will flow our to and to believe but with objectives. and We will leaning opportunity they come cash foundational near-term this

cash other to expenditures. in over to significant our our a expenditures to final back total year. relates X/X capital XX in this are relates the next anticipating it capital new free items QX. out to in of the we in expect Pleasanton, half When this expect facility transact $XX about million impacting of of $XX months, flow, million reduction the for As we which we still About payments looking operations

becoming cash we While we is adoption. to path believe the see time free a by the prioritize investments in now positive driving to year-end, that flow Xenium

We spending balance. strong to and on managing will focus continue our disciplined cash

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

Justin. Thanks,

both personally for be the I a we're momentum XXx, new a as life the bounds thank up continuing to team. the see in to profoundly energizing era this sciences. which Before possible, rewarding. in to for the big customer I genetic has and of anything enthusiasm believe technology of to analysis. for as history Xenium, the incredible will usher potential It's us to our we especially push open exceptionally want what's of At been challenging moment which take is and it Q&A,

revolutionize broader of and very power cell While the spatial it's single to and potential and health. of see biology appreciation early, more to generally still human we're a understanding starting

of making physician-scientist health author best-selling future biology about hardest highly In human books disease. the the discoveries and Topol, field of and recently medicine, Eric described spatial life for a fact, in on several new as science regarded

these at result, endpoint. and future uniquely have to just single cell like in this In all will Testimonials bring our get analyzed validate have opportunity context. bringing to resolution, positioned conviction be everything We're need the achieve we samples forward. and we tissue whole-of-company effort the we the products once expect we a we about large ensure of And spatial We ahead. absolutely vision. the best believe the to as not-so-distant the incredible again technologies out future, scale with are to

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

With and ahead Instructions]. we'll Citi. [Operator from said, go that Donnelly started get Patrick with

market think it's enough sales? early just maybe terms the Serge, in and But And talk sales that less wins? mentioned Is being focus of as Xenium, what I adoption one big on up, any just color on get trends you orders market any of a to then competition head-to-head feedback the about there continues can appreciated? that be of the certainly specs color, growth in terms pick would it superior? Is order you a seeing bit. when outpace on you're that competitive in you or

the for question. thanks Patrick,

no, There's aspirational terms before, what mean, kind to generally competitive. I like out until there put there expect. a So of lot were in said that the of out there. market confusion was we is recently, claims definitely And up of

those they people Xenium And now dynamic in around the coming the incredibly themselves work. for in the positive. and is and reviews particular, of own being strongly I specificity I talked the it, the that in that that's that which field data last data well we've see over our my of and systems of and would and is X on how can fact And of we quality about word the made change quality quarters, and quarter really the The say, spreading. analysis are this back now are resonating the in confirmed the the talked remarks, about work sensitivity

data are the their get people that to instrument. off get in quickly, fact very the also It's runs the able actually

data of a at a or is a presenting like example conference. hear on Tuesday, that Saturday customer finishes and fact, run actually a a In then who an we Sunday, doesn't on he

it's hard ready for that that technology It's a really, among turnaround of has is And think now resonating. to spreading of kind I've what's word the me remarkable that's and And a about customers. uptake. kind -- really

that's dynamic. think far by of I So the sort primary the

we're and The fact out kinds field. of resonating data really all the products Xenium gate from hearing is the that high-quality the works of that really,

that's but So -- there's building. deals, that it's clearly are the huge early momentum all this of is and a sort excitement a signs showing huge it's potential and

Okay. you a you know quite just close that service not are pieces maybe for one to seeing little That's up. Can China. bond? end of Xenium region. what you're little then you in helpful. about And on from the just I the you you further little I headwind you bit guys But through then are moving just maybe talk a what go customer. surprising were the Not about, China the probably the you you a in guess, adjusted And pressure I as guide, $XX Can maybe talked bit I the hearing? Justin distributors, said here, bit providers, million customers, moving talk as guess there? about what think end of guys

Sure, Yes. Patrick.

is And And first, overall, really that the been start soft So to underperformed macro now. our challenging there, this quarter. in region. definitely for with environment demand right China relative the expectations I'll China. has

exacerbated believe spoke we And already this that we've environment that we been the about dynamics with also earlier. inventory seeing what

next to couple so the quarters. of guidance, And incorporated we And in driven this for updated going that range. at by been APAC, least the situation strong. we issues our primarily Despite don't the there in saw China, EMEA is and the to have guidance AMR improve expect

bit what APAC expect we roughly QX flat in and of range, with then and average as really in saw we're year of in a in end in Chromium the mid-teens will the that somewhere be guidance pressure little EMEA, percent And year-over-year And to QX. continues, our a APAC so QX the assuming look you at when updated AMR to growth. we QX decline

overall, strength we is that this at the worldwide, just then Xenium saw in quarter. looking maintaining spatial And

for point, come expect for just new really demand a strong as But of any kind have bit, would well. had of little the launch. product also at a We quarter demand bolus a we I that down CytAssist some like CytAssist at to

combination end from now roughly through holding And those QX -- the QX a so, of of the through and spatial from flat is things level at worldwide QX.

up, Arias Stifel. we Next have Dan from

Maybe your just a to follow-up can I placement? do it where hard comment Patrick capabilities? there sounds you expand on can Serge, do you're be on manufacturing the what and to considered own production Xenium. point ramp you like When constraint you mean envision at shouldn't pushing there on pretty quickly. being

Yes.

measured we So kind to we in yes, we our have market, -- operations been when been very It's investing approach. initially of we like were came said. in

We have that's production was scaled look up of toward a to right kind the in what terms now, to of Justin level new couple as and we of certainly alluding of quarters. next

quarter, mean, I demand outpaced Last shipments. shipments,

year beyond. We're thing. be a scale -- we're dynamic especially of to and for working to next So a up to it's sort prepare still going

the there helpful. product just sample should and and the or work Okay. in maybe ability the talk so positive puts sense a some -- in was is the lower sort that a than Flex sense work, of on the the the the elasticity And you're single seems of way, economics customer the then can be the revenue in that cell open extent you way maybe in per the which takes be change could drive scales on that to the seeing of scope like experiment, until it just the would really a it you cell single about economics to size negative Flex just up have and kits, just maybe of

Yes.

scaling was per definitely lower minor a -- to what get and of in projects certainly, terms the single of before that possible emerging, you seeing has reason that incremental sample. that mentioned for we're you are cell relatively examples component portfolio. price the It's Flex are precisely up been adoption. seeing We're a of still So overall to

study. effect People samples, putting limited an these are projects. of are people, run spending samples. less and organizing together same they end It then have they dots limited they of also there's certainly where people It where the sort in more are could then type if budget up And running the incremental also and by simply for does studies an effect. for has money

of in it's of if the you Flex contributing to manifesting in look reaction the a is number It We on to a on necessarily terms reactions be substantial -- top numbers is -- like people way you total. -- basis, itself to, at are alluding going that in increasing not are running -- you're that line.

they a larger sample dynamic great going top that while lower it's people as overall, little In expand initially. larger as can that price fact, to kinds of create per future studies towards But the bit possibilities and portends line with this do pressure think drive studies. we happening that's the -- for portends of they can

Dan Cowen. TD Next have up, from we Brennan

of just Dan. how -- trended any one This CytAssist is last placements few for on Can on Kyle you color just on can you had I provide quarters? sort here. to CytAssist relative have

there. is you strokes broad Justin. can Kyle, give some this I

quarter in where we're last to drop. over QX, now, had in were very of the QX year -- of for strong and was of incremental QX, QX last CytAssist. And We shipped QX, close and small QX a launch at demand launch it. a QX few but up end really We QX. the and we the slight So quarter a year, in right was number -- for really drop QX

it. Got

placements, Visium about projects? sort these with going should forward? a CytAssist so And of busy how demand we of pull-through think for all Has lot this driven

at run numbers, certainly not. that have labs CytAssist we the at like look a bifurcation, we see When do the ones Yes. the Visium that substantial more consumables

buy consumables are open Now that are instrument. going -- labs will effect, looking an more a a there's are that CytAssist to still there's be to more likely at, running selection question we

hearing to great So we're for going But of amenable Visium a people feedback interest. much very that's that makes and it lots And biggest and still generally sort to numbers-wise. of instrument. enabling easier, fundamentally watching it's how play We're great run out much more it's data. CytAssist not qualitatively,

drive this optimistic we potential So to more. feel about

up, Next from Kyle Canaccord. have we Mikson

the well it half. the to headwinds originally whatever get comp occur I I if X% by And know just low EP the the on could just to But that to products? growth Justin, in that's said, guided guess be a in wondering are there's talk teens less One it of just there China grew sounds It you year-over-year chroming I business quarter. like was you give but like going you deterioration is in and nonmacro-related second half know in the helpful it now that to connects comment what for the just I'm placement that on the now. demand you mix to like business. first for updated. maybe consisted And of teen area. in region, or any what about low as if factors that the kind

Yes. Sure, Kyle.

about our at we Chromium We first that to the they When the track EMEA being seeing what at APAC, we overall, level. along initiated So would that guidance primarily of year. when off, we to China. talked the the we're about the in we growth beginning with worldwide impacts on talked expected mid-teens incorporate driven the beginning be of at by and AMR low year,

You're the right, EMEA we be will that we in that's little range. in track a digits. overall expect we and how we into end the to And by building carryforward. and being AMR do guidance look more China EMEA when end worked But the on expect year-to-date saw or what's plus. the in year, single that and AMR up mid-teens driven at in both APAC weakness high we our

Stanley. Next Morgan up, have we

here, few you customers give seeing ecosystem? you're so in terms In but there some apologies on How color a right in pricing. to your now juggling this, aggressive calls into lock to what Serge, earnings So be market on prepared can Situ us touched you the you of are if in

on you of consumable anecdotal can as sort think about some to Any or evidence share? pull-through And those starting of placements. you ramp bookends initial

situ sure. Tejas, yes, going in lot on on, there's a for

to trying pricing, a make it when to will right they accommodate when the Northstar, here. our right? we're sure especially choice dynamic make is So accommodate and focus trends and our competitive right what people now there's on it's And customer, comes the -- certainly,

thing the far system performs And as said the that works we're well, market that corroborated It by it's in fact best other the that to I but data the thing incredibly earlier the well. coming as because back generates really is the and customers. --

in And through customers and that field few a run kind samples well to to works quite your some the are of early of very seeing it the quickly. able question, we're

those to those to most tend customers early will Now ready be technologies. adopt

later that to be more really early cohorts up. of But potential there's some anticipating through. how will of ramp take systems So a and these and positive time in many will samples pulling onboard we're the lot terms signs

it. Got

switched Okay. Serge. that today side Flex That's helpful. initial on follow-up over? those early me in of And Where then adopters now adoption the things, Flex? a are that percent completed quick have and trials phase for customers evaluation for have the What pilot of

picture big question of And broader then as sort well. a

which in your innovation sort As of insulation, to the confers are that and how to the differentiated of you guide? you degree you think about thinking about sort context -- macro of it

So in terms Flex -- question, the Tejas. of answer let me

Flex. that sort to others is has extent, some adopters way up our across the bringing Flex has customers say customer been to or We the have been of like kind some wouldn't scaling moving core some So base. And adoption. I necessarily even is customers. of -- translational some our It of certainly getting general -- on so early just

a Flex ability in example them is lower switching to it's reach existing of and about terms allows projects. conceptualized starting they and it challenges more more existing or more their are but studies in project, lot certainly a price incremental that lot of studies, Flex workflows to larger -- faced incremental people relieves enabling have of -- less of now In because over substantially or When have multiplexing the studies. and they a because thus of logistical imagine terms a per cases, people the them new from from

franchise, been the time. It's especially but so of And overall cell to a the good market Chromium single it's relatively good the trajectory, we a trajectory. it's small as look on on expand potential still a fraction over at

seeing I think signs. we're good

it. Got

the on any Justin, guide? perspectives

on guidance our of our into of view the range all We are our built back them heading so our a Tejas, still products, decent have the guide. year. of into half

different built those scenarios in. so are And

Bank Mike Ryskin from America. of have we up, Next

a Xenium I versus on just here, couple Great. One consumables. ones starting got quick instruments hopefully. of was CytAssist,

that You pacing CytAssist, of talked the through We numbers kind of back was really can helpful. into then. Xenium

focus basis, quarters or on a math, But that's in X a less. been to on dollars our consumables row flattish By more flattish, want kind spatial. I relatively of

to and question does to on really the of And kind razor-razorblade that in of base that that start to of installed is, kick do start see higher point and model at the you start like you'll churn? when So accumulate? will the special side goes really to what point goes as Xenium higher, think really that

Mike. Yes,

on So first? -- overall, as far Visium spatial as about first your you're question asking and Visium

Xenium and Visium Both consumer.

Yes.

when is the it thing the level impact by is conclusions. with product APAC think the you're and I To worldwide what you for the interpret at means wrong platform, that's right tough looking that the there. might China now get in

spatial AMR has APAC has and in so impacted been strong been and Everything EMEA. in And China.

some And that a think workflow use some additional tending address on. earlier on the more the customers trends great to of I saw and information were and And that's Visium. that Visium. early users helps We trend. order CytAssist on issues It CytAssist had

of CytAssist are platform. showing really legacy and And the is the the Visium the that, future it's consumables Visium so consumables. the are And kind that overtaking now basically of

just the All quick to switch I to margin Okay. right. side things. -- of want on the And real

Xenium us start as to anticipate that gross negatively you're higher sort incremental these XQ, Xenium margins were the into numbers, this lower place the XQ going to on higher? continue a dollars a of that by pretty I Or just you as it's and or Is gross XQ, impacted profit for do is it. close be lower even margins out to instrument hard there. ramping extensively good given going ramp that to think flagged but of grind guess to again? to then for point, bottom placements sort to level the gross back to ramp, your I us you bottom

Yes.

And start you gross look first in change I at margin. saw, looking the out net in by driven when that's with and when puts you we takes, year-over-year the change just at mix primarily So I'll -- all it's smaller that the mean, situ. shift towards

gross into as to when instrument each the to the in we then place the should quarter. capacity rest lower units, scale have more manufacturing look more our continue so if per and But the decline, to instruments of unit we we were trend produce margin will improvements could Xenium And year, cost economics. we the

we mind, we the in market, performance the not sought cost. optimize built instrument, keep time when Xenium and to to But

in successes we that company And near-term the so now call. to the that It's we're instrument. is going of instrument that, although margin, we're the gross have seeing consumable upon off that to revenue focus the impact right And isn't out was based field, making each that right a the margin stream do the enable.

that is they're ever. generated competition. we've the and mind to the customer purchase space, instrument as best the strategy. makes talking this succeeded this way into more we going to in more the help And is data who also unit our compared and today, value to keep So customers instrument economics this in in produce long-term incredible public, out its feedback sought about And an getting drive then

priced starting the well. future it this have opportunities instrument And that to do as what I not we're the But to is at brings. that value adjust in now, think that see right we'll is

we up, from Sourbeer have John UBS. Next

is calling in This Tianqi John.

to share what of Mike enough? just target when margin high just Xenium, of you do let's like So kind profile build is asked, for kind the volume of the guys say, sort on

necessarily instrument what separate look So at to Xenium from that this business ramp is expect We consumable. Justin. the and When the to. we we look the overall at Xenium, we don't

And up, up shift consumable on, they'll primarily ramp greatest to over to is you're time, think, the mix early of towards instruments, longer overall, term. so revenue to and more going the those the going then taking the stream and become And streams bring see, when ramp consumable impact. time we're as the in a margin larger those the up I part are

it. Got

the very Flex, Chromium the application. regarding is exciting news Feature about question Second Barcode

Just medicine, Feature -- the applications cell think in see do and adoption clinical maybe how the that? like single Barcode the about you like we Flex like kind diagnostics and of should settings of the accelerate precision

cell to answer from collected relevant samples enables is first question. the time I -- the good I ultimately, for with mean a It's Flex yes, and clinically the right? Yes. say, I single think work work would overall tissues. the

enables to enables stored. collection applied are FFPE it the samples, how First, cell be of of analysis is most excitingly, which point single and more fixation tissues samples, sample clinical a to most

And from at certainly terms definitely early this in lot studies. single we're way towards interest cell you stage, its adoption, very translational the of in on the research the we're still adoption toward seeing a progression clinic. increasing basic imagine if But of

thinking about phenotype single biomarkers. cohorts them to clinical that's for prerequisite And them later of a look kind gathering of and of running on applications. of cell patients, kind the for samples So

And so trajectory. it's definitely that -- that -- along Flex is bridge into enabling

Goldman have we from Matthew Sachs. up, Sykes Next

This Matt. is for Ivy [indiscernible] on

talk expect China And see that continue what year? with working inventory then levels. in on into you're mentioned to through like? looks you distributors next you these You issues Can if

Justin. I'll is This that. take

year, to see you increase back distribution past. the had when typical I more what price QX so QX go ahead than they at of going will the before got goes price think the into typically, price end in And increase we our increase. the into was And we've annual this the is been to lower higher we buy have we didn't they we inventory that it But the price overall the and year with would. trying started And sense. at inventory. started to year the just distributors to limit thought the China what inventory, beginning the manage saw to with basically issues come I much down that in we've And hold the think can of is inventory this as effect then as had

we're inventory factors are against talked And of the we the the that challenging macroeconomic high. so And still is -- about backdrop levels earlier. this

customers. end And the sells so a service then distributor take to for like because and sell distributor, to provider does sells some unwind things this to provider to service time it we

or in So any given don't expect we dynamic, that QX. improvement QX

We quarters those expect roughly the QX. be of average as same the to

improving We here mostly talk anecdotal. levels some or seeing there, are of activity but

and to demand. really see we've that's it's and the got still right lower backdrop inventory we what so of higher forecast now, And positions can

Okay. you post acceleration the in Chromium feedback maybe or That's NanoString Great. seen helpful. ruling then in Germany? the from market And have any

think is like And around strong. very this question been momentum has Xenium. quarter I Xenium more in the on -- the

the point of the I out driving. order the think second order comes I that has variable of performance that to would much by is data as the instrument driven it. that of first that and the and

Inc. Our from Stephens next participant Mason is Carrico

here. Maybe two me for quick ones

are quarter, or did quarters? to that mix For compare customers percentage placements new that how few the new customers And does what already during you Visium? the who the guys or share Visium last you've XXx going placements to seen of versus CytAssist customers are utilizing

Visium going as I using think you say. is There a around don't of shared been specific that, customers would legacy sort it's of would substantial to but who've the details CytAssist are current reasonably manual we've mix, balanced I number assays. expect,

because But now get number buying to also, the new customers of before. Vision there's of open Visium. up kind that weren't opening it that really is into They're to workflow CytAssist possibilities are material a

And those over the I of relative well. as And been some been products XXx that but fairly XXx think users previous have similar to single fractions have of cell, last couple some quarters. substantial entirely the there's of also new users

it. Got

placements, then seen seen color customer And instruments any maybe those the you have the have -- orders and mix could CytAssist, placements, terms for of in driving union with if or bundled you whether them? Okay. types give, Chromium you those of any

into seen encouraging certainly we in coming adverse And certainly are full not ecosystem. of the We've that. customers kind XXx Yes.

much deals use to a about when customer special all want instruments, interrogate to In That and their go is X and happens. how to with value being buy consumables. to we've give them those do in people especially And there come X able before we platforms just all fact, talked biology.

run Xenium. lot follow put using experiment to view Put talked And discovered workflows map we've to people And a a science we're cells by they with on And and section. a want as of about a using that that very, the where genes and of well. oftentimes, frequently then they panel comprehensive experiments experiment up this lot Xenium and on for to on tissue. more running get tissue There's a all when definitely be Chromium same that's our are the it seeing out on of particular custom then in a that the that platforms, resonating before. X CytAssist to Visium customers very they're

Next Bowers Justin up, from Bank. Deutsche

In half. the to prepared the than remarks, you first in talked ramp expected able faster about had you being production

just are of the any through the were production give are more back in you to Or a any hoping We could able sort us bottlenecks you half there the most through. of are some on the of you year? scale those that? -- work of little as And you color of way in

Xenium us of give initial just scale the about ability -- custom maybe talk to and a path secondarily, little development sort then number and different request. panels panels and after your And on panels of the the the the bit

parts. X So

Yes.

launch, have then capacity. interpreting Xenium with that successful, on customer making success our sure able priority where there And -- the much success generate were rollout And customers in think pretty of their So back overall, were data I'll that the initially in pretty beginning talked the about start early we and got own to to our go earliest we've their you and to early. is success measured had that. instruments overall if to I operational a our

constraint operational to was capacity. the thing, shifted the And so which next then

this. we shifted through space the once so were around capacity, to to we components, we making early sure had that those that placements operational sure enough And we had was and it making making the yields high, then got that then do sure

operations and also facility All support the resources. part new QC in Our end that installation was of and goes the then that. a big

risk and day-to-day operations they the And did been that day there's to solving team so scaling every like over encounter every up week they they've our off, and But first quarter. kudos for day-to-week.

of to And level as But inventories production think for QX. able and get to and higher so consistently we're this as up level build need that you then the into scaling really, head as QX our year, ready we next sure successfully will goal to with to components. maintain we make about is we next

be whip sheet. installation need to personnel on We're well. and support balance the going service There's more and to higher going personnel as

bottleneck so one shift the over point And that time, can next. from to

on Yes. of panel. topic Maybe the Xenium

more been more panels and pretty hard working continuously. -- got adding we've much we've So and

There's multi-tissue would panel, out number a them that of a and a analysis brain. for breast for panel come have lung, cancer. -- like with We new human

have on our kind cost that using a And of data well applications importantly, top across a across So fully option lot as as tissues. also are of customization we as well. customers standard the of

and keep the as options, And adding -- of sure they why reach important. it's increasing increases the the platform making not all it oftentimes, in. that the measure we're of precise So the power our that's It's just time. that more is really deals as customer to is content, the well. lots able are and interested And we

Next up, Blair. we have Matt William Larew from

to relates Just cash Justin, around towards the positivity. one. And progress flow conversation

how cetera, areas? more more of to the alluded How the be from working a those some you're costs I resulting sort we're you we what capacity just different sort and perhaps will working thinking If positive might thinking undertaking like technology, about number. get onetime in burden about additional related building to that expansion towards as versus of how model should things on. things that kind we versus maybe et of flow buckets maybe and of out sustainable, then initial be underabsorption you're perspective that people, that cash and think capital cash about So investment of

see Matt, that's are a that of very impacts There we to up insightful flavors go ramp. the we're going as type question. the of different

established. and new be as ones stockpiling of the more and about able to and those smooth like suppliers advance have are you're buying over up those up are some things would those in new ramp out that the to supply new I are inventory and be and get talked so time and further expected just because relationships And that around components building chains

the would see I few smooth during things for as those maybe spike and that So quarters routine. ramp more then a become as out hopefully they

the A the fixed you're to that operational going units, is of better But cost. to scale to as about think fixed. up capacity. be able going be you that leverage you When lot

and more As that you support, are those over also about efficient that can think working now installation time. things the right well the become are

economics So would the units again, when unit expect leverage the as you as I at well. increase look there. and there

But in these you've of got to them. to build need capacity for you're things advance going when

ramp, a the so underutilized advance. going for And nature time are build going in be you when are of having of period to because you some something then to of up

why really pointed out we so the becoming head flow And is into free continuing and important an positive, goal free I cash to cash flow towards year that's we're the as us, that positive for for it. work

us a that of by still is there the end for year. And hit the path to

the to losing the grow that the right look at full But we hit year, positive. and in flow and free We to are potential support do expect cash to the the the when decision having constraints you us accelerating around of we it being there. here make to investments spatial be what's the end holding absolutely sure in line target to with we targeted that I'm have to make this the where that steeper or sure very close cost the at realize a way in and spatial opportunity ramp we Xenium and

So answers I question. your hope that

Next up, Rachel JPMorgan. Vatnsdal from

for market, disease could the has maybe including in launches sense of seeing than several drug market-related interest. interest We've commercial if to areas, work, of you're any any us give really earlier these lot large a some on reignited Noah clinical influence Rachel. seen It's Alzheimer's, a drugs you Alzheimer's, which come GLP-X online in big

will We've typically influence pre-commercial commercial seen markets that markets.

all through to you at for work have of some started of So your the any flow in see instruments? that

progression focused earlier companies. at further I been down biopharmaceutical been far, think discovery we've workflow that expected with for of the so our the of side have -- world us, on kind products

you is as there more is to a come So very and I and took increasing think online. certainly scientific there R&D the research when view, invest new bigger are that large subsequent modalities and drugs new like work in foundational of launches more incentive

at drive definitely those level. to And technologies the think so new fundamental there's for see you to going reasons. more be And allow of I a that that investment in understanding the much things investment deeper science

modalities. which We we mentioned specifically call, see this are seeing cell our the space, utility emerging also certainly a across therapy these of the in -- that is and the area, of other products, but in big expanding I --

last is early Kyle, believe I Kyle our I and And up person today cut little a you Mikes on questions. off your

if do next please like so So to question, now. form you'd your

No worries.

one that HD? for the Just would at panel for Visium X,XXX planned for And access Xenium that? proof believe, then Serge, for mid-'XX, AGBT, early before I you would on concept, begin of Flex when that come was just that's

Yes.

we're a given not haven't internal good updated those. but I and time exciting, we're really great incredibly It's precise lines. the both seeing are question. sharing on yet line of mean data We time an products either really

everybody. for you, concludes Well, thank That call. you today's Thank joining.

You now disconnect. may