10x Genomics (TXG) 2 Nov 232023 Q3 Earnings call transcript

Thank you for standing by. My name is Aaron, and I will be your conference operator for today. At this time, I would like to welcome everyone to the 10x Genomics Third Quarter 2023 Earnings Conference Call.

[Operator Instructions] I would now like to turn our call over to Cassie Corneau, Director of Investor Relations and Strategic Finance. Please go ahead.

afternoon, good and you, everyone. Thank

Genomics Earlier third results the financial ended today, September 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 Before results 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

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

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

and everyone. Thanks, good afternoon, Cassie,

that, quarter and for performance our open detailed our it provide for you questions. begin financials, with Then a After at a more On up we'll the the overview progress business Justin today's our platform. on brief will update year. of outlook trends call, third will of your remainder updated and look across each I

the million year-over-year XX% increased $XXX to third in quarter. Revenue

researchers demand XX% growth and strong worldwide. in ramp and Our our once quarter. as we to continued the continue headwinds exceptional Xenium were drive exceeded growth results despite during by with operations China We China, again driven excluding achieved

XXx genomic like analysis we're revolution, cell offering era Xenium. of new Just single in catalyzed a the with now

bigger is any or mission than any one platform. one Our technology

new to has we at scale. getting resolution goal why foundations: always started. we have scientists been in platforms. firmly scale. to why that invested with engine, X and biology we provide That believe manufacturing invested of and the just measure tools commercial breadth generations is have That right in our still why our innovation is Our And we're is

about It's with products a Xenium Now of each let that team the platform. operational for we platform. adoption our share start in is moment. from by the quarters and exceeded has largely ramp few pausing Xenium revenue like more accelerated with million, analysis. for $XX platforms just launch. X our best spatial Very intentionally of the quarter, of I'd ever our driven the today platform in accomplished first believe success achieved here worth type to In me the situ third Xenium, performing which

sciences it put in trajectory on has curve a adoption among special best the history. steep Its life truly likely

development brought We has is have the of company the industry our its in be why Xenium always commercialization. transformative technologies and and most decades, believed the effort potential we that to through focus in one which deliberately whole

researchers build to high-performance a hands. works that Our teams R&D work in system just incredibly hard

made enable Our our to launch an incredible year. operations Xenium commercial priority we ramp. this efforts the put And teams top manufacturing the

using from their how customers, those awesome with have Xenium see they our showing start own traction off. in results efforts are to our we are Now it's been extremely that out It's paying clear energizing pouring customers, labs.

lethal of on University team utility platform. Duke resistance that initial fueled light ease We're from pediatric quickly by to sheds go a demonstrating a tumors. and study with Xenium groundbreaking to see a the results recently use install published example, of Xenium, from mechanisms the brain can researchers how model For thrilled in of

Adelaide Xenium the the first first In instruments. a supporting and their published side-by-side University validating This own addition, commercially to superiority run comparison with is customer board, the of adjacent our platform. recently tissue of another public data and the lab striking, the compare are on own Across sections researchers Xenium's in at by study available analysis. results

Xenium and -- for the marker the much throughput, is better the generated evidence typing, in better feedback choice best best consistent data Xenium cell customers real-world with gives and workflow, is we better importantly, biological hear that for Most This clearly strongly world right show the analysis is analysis. Xenium identification. spatiality from resounding delivering more. confidence delivers the expression data comparisons shine sensitivity, customers and first customers highest the best by that positivity, around the This situ researchers Xenium better in the

already pleased make differentiated own from we all Xenium's performance and switch researchers great progress rewarding other the customers continued see among Commercially, strong Xenium instruments. demand across labs NCG platforms to running with making Xenium of QX superior are more It's in performance. especially fronts. to features, instrument workflow drove take customers who their are demonstrated worldwide. Xenium's to the order our We're advantage also

quickly customer demand. the side, ramp continued to operations production to meet On growing we've

months self-service for their launched targeted yet. throughput XXX to panel XXX surpassed our X the some half X August, new channel a designer, on- researchers makes that panel off-board gene only of we it cumulative containing too. also highest and continued unlock of website the on we introduced deployed software over announced, to easier customization, front, custom questions. QX, design level fully Xenium custom and the Xenium previously In launched shipments launch. specific our panels We've orders after we research With deliver gene in new R&D to flex we well panels, sensitivity As answer and to

but launch only also performance at not for long engineered Xenium the We term. to optimize

X,XXX human capability designed and assay on and applications for cell powerful research specificity, high Mid levels in interior road Xenium's we that We a build and to also year, year. We're and product includes segmentation membrane next an combine models enable with not class-leading deliver tissues launch RNA to inline to to gene on and of already section, we multimodel run expect we on also XXXX, In that sensitivity panels intend executing early protein launch tissue throughput. next are stains. introduce days, weeks, powerful assays extensive same Plex performance. plan map an high-plex which development the the multiyear and new exact to developing

least measurements. a remarkable strong the quarter from QX beyond was will our large history anything for opportunity This that is demand the the conviction All in, and resounding capabilities extend Xenium, Xenium biology in of existing as uni-fluorescence-based enthusiasm protein on industry. reinforce as at spatial and researchers

that Our us of the current position going full will opportunity. forward, this and confidence potential we our realize give road map

turning the benefit we see vision a to workflow Now and resonate better Visium, better leading which with technology. customers data. spatial NGS-based who as to CytAssist from well continues

upgraded are the CytAssist strong we QX to long While a for have tried and demand haven't year placements. in moderated Visium for who a runway see in of CytAssist. prior customers thousands There relative launch period, to quarter

to Visium are In well addition, CytAssist are more positioned in there and thousands who we adopt believe future. the many

which as the transcriptome Visium-CytAssist our in protein quarter, researchers assay, Last invest Visium section. we gene all on Vision CytAssist launched protein franchise. same With H&E to analysis the detection with foundation, the innovate expression combine we and high-plex and spatial continue enables and to tissue whole staining,

this making of excited about progress all addition, resolution on scale cell single are discovery. the In MHD, unbiaspatial we will bring we're which to

the one on. most projects is this ever we've We said ambitious hardest before, of and taken

important teams acquisition been we to in fantastic and our accelerate superior made have quality product by scaling of enabler for a with this as delivering the investment HD. hard deliver to Our product We earlier working this at been momentum part superior the manufacturing recent has see scale. Visium driven economics a year an

more as is this team during tissues. various new across for spatial to shared breathtaking look HD these We anticipated absolutely to launch. updates we is sharing get stunning fueling even some We've events, of excitement Our with generating tour images and closer highly human world forward more customers which our Visium offering. mouse

and show collaboration potential have of in we company just Xenium human it's about cell This so thousands samples. to of pipeline both platforms, ultimately examples XXx and tumor opportunity easy in see we're this a spatial and for discoveries products we X believe are significant result the portfolios how treat full We Visium advance transform large-scale spatial. customers bullish It's and biotech how a the [indiscernible] in our in Chromium is recently ahead We single involving portfolio exciting researchers number to also with leveraging the With power our the Visium cancer. that why combine network. cure and should platforms and that that when health. clinically partnered will our translational of a diagnose, the of many study selected

navigate Chromium, our a remained as leader Now regional In continue share story to I'd more largely China clear in in third single pressure Chromium cell rates. the a that headwinds quarter, like analysis. we global about to growth

Chromium In worldwide EMEA, the result, the during in year-to-date the a Chromium was and growth As teens. flat Americas low quarter. revenue was

There believe related has points performance. the to still potential to key we Chromium Chromium's X make more. However, far for are

this The customers the measurements the see to to to Chromium significant opportunity strongly biology. looking cell. believe their hidden intend to potential their still single who we ahead. studies. that translational from fundamental in buy long-term vast talk up benefit First, untapped the when bank unlock who capture research we We talk cell is we of this samples. could single biological this doesn't the yet. of tremendous see We when of majority customers that's see are about as in We new of unit The are prospective to scale the franchise to we intrigued fully and cell keen potential biology users the talk

the will the have to map to of adoption. raising that upcoming and entire the incredible franchise performance road product launches drive next level. with take We broader an the economics borrowing Chromium

as decision was growth. entire prioritized confident We're our been intentionally the results it for knew potentially Chromium particularly customers look some with on to intensely long make, success focus risk speak this this we our the of less was on driving year. product decision right We and term. of focused launch this carried we Second, the the The game-changing has Xenium ensuring product company as themselves.

on balance will expect help potential. forward We full more us which moving deliver Chromium's

strategy and suite their the our Chromium work. the researchers confident are full our a as comprehensive portfolio for clinicians eventually about biology about opportunity excited products enable a of way as Finally, that will ahead, interrogate in has always and offering been to best we of that's power

cutting-edge most researchers. the near mind term, the for we complexity share is the opportunity may even there driven in across long among biology. of this term, In In resources, the growth unmet mean needs platforms the lab of tremendous in the and by the addressing see combination trade-offs our budgets vast some

to enable Our and more more samples goal to researchers more to is work single do use in a process. cell

and map intended Our is make analysis several planned new exciting road studies cell routine. up with imperative open larger single built and robust us around launches product more to

of the and we part at we our significantly single a researchers barcode from the broaden million bringing cell the highlight experiment expression recent to lower Two portfolio. additional to plan with This of available a ability price feature to offering the multi-omic are high-throughput simultaneous insights our experiments launched kit multiomic gene applications more ] flags Chromium protein to enables announcements long-term point. launch platform. the September, Flex capabilities on This run on [ is menu profiling detecting platform. by new gain In

our recently automation we workflows. assay expand cell single partnered Coulter Life solutions Beckman with addition, Sciences In for to

using As of broad dedicated this kits base automated we'll develop liquid part of agreement, installed handlers. for Beckman Coulter's

more are working to Not analysis. samples working cell more also enable for applications. We're only single we enable to

cell Phase demonstrate a of On a leveraged drug in analysis seen We strong the early patients promise still blog, highlighted customer a efficacy of translational a but clinical single combination biopharma, metastatic the colon in have number single care. and publications and expected beachhead that to relative large mutated with on tools of study established the we clinical potential. trial to therapy that development group II of the very future cancer. a our recently cell it's We've recent of

cells. correlated patient the suggested some progression-free isolated upregulating nuclei, Atlas and use on therapy a cognitive MIT researchers Chromium as expected In covering Research and X more of extend papers and genes XXx the In with from varying stages than study, with survival in as several single-cell published of cell more producing data immune-related likely cell and in using Alzheimer's most result to Alzheimer's, tumor patients, in detailed one of September, resilience. Alzheimer's to epigenomic disease was products rebuild changes to analyze the degrees occur than Single progresses. that outcomes million pathways transcriptomic associated disease patients XXX clinical subtypes has

Journal highlighted also being immunotherapy others. And are quarter, in how work work to Chromium published used Investigation brain for is cancers more new that of of transform like this effective towards and why in discoveries forward. make researchers the can Clinical This bring study future care. inspire we to the to at than explain future our the certain Visium and our energize Examples as parallel these mission and team cancer UCLA push

engine evident innovation in working and to their to customers manufacturing support I'm we groundbreaking our so dedication. we're and our commercial gram with from That's our customer to obsessed our do team's in We execution like our success. field everything research. to teams tirelessly say proud of continued

to company As of we even to higher operating future, excited with ahead product the levels dialing X We tools how position scientific and intent We on clock both effectiveness delivers resolution we our discoveries. in And to and planned we'll we the up the can't to robust best and be on every be focus of scale ahead. the the rigor with of XXXX, see continue about look for incredible next researchers single discipline use are very in fuel to platforms. ever that levels new I'm that future. of these new launches our wait have and pipeline opportunities possible believe all efficiency higher cell spatial and the have speed, all

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

Serge. you, Thank

income I'll our XXXX, results on ended XX, were then its being months closed standpoint, our signed update strategy. start by I'll from To our acquire exceptional we on continue XXXX. to intangible accelerate reviewing we in and a net had product Xenium, will an we continue for on for to a summarize, assets R&D our above cash provide transaction, in disciplined which financial saw In statement an flow overall September performance the spending the effect the this was on outlook X acquisition to margins. other From And operating forward. we impact and to gross our going given cash the negative that and year accelerate sheet of on standpoint, pipeline. ours mix, expectations. assets opportunistic balance positive a flow important our It's of this certain we earlier be focus be note while an to to quarter, acquiring which from

XX% $XXX.X Now to detailed million year on to the the quarter for $XXX.X year-over-year revenue the Total grew period. for million compared results. prior to

consumables Worldwide of X% was up revenue XX% consumables. our at $XXX.X revenue and year Total year-over-year. spatial prior Looking revenue starting more the was consumables million, and with million, period. an closely million, increase breakdown revenue up $XXX.X year-over-year chromium over X% was consumables $XX.X

of unit shifting an over period. driven $XX.X the XX% year instruments. $XX.X million to instrument compared $X product million, instrument year-over-year, and XXXX. $XX.X was Total revenue down of XX% was volume quarter revenue to was increase Chromium revenue third prior million instrument the mix. in by primarily million, lower Spatial Turning

last of Xenium spatial As to a QX, so revenue instrument launched in reminder, year. instrument Xenium not our QX did contribute in

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

and by XX% revenue year growing APAC was the revenue year-over-year. XX% geography. Americas $XX.X prior growing was year period. million, Looking over EMEA a at the prior decrease our over XX% in million, revenue $XX $XX million, revenue was period

by shared in we APAC that revenue flat what is QX. China last our remain the the in face back of earnings to continue to driven we QX, region, challenges happened China. half compared expected call, On year We the largely in to which

forward. We've samples the in where and are of these seeing control underlying and As service we continue track levels concentrated with inventory providers, demand going consolidated. providers working been lower demand, better out we smooth to to large particularly challenges are to patterns our environment, better is at navigate revenue ordering service a macro portion

for period. the as XXXX. overall a instruments. other lower significantly gross strength XX% The quarters quarter instruments for million quarter income decline I rest margin Xenium XX% lower carries instrument was to of was compared company of gross to currently statement. driven to Gross trend in million the a of by placements the quarter. of $XXX.X shared we prior adoption, third sold Gross margin this for the Turning quarter margin that $XX.X margin profit the expected that given compared than year Xenium third early was the XXXX of profit for in have our Xenium are to of third more the gross the the

to prioritization Xenium launch. greater given seen have of strength our in We gross a impact the margin the

over we continue this prioritize to margin continue turn in platform given capabilities, plan to the near are will coming We the Xenium in term. for quarters impact the gross to enthusiasm placements overwhelming and which receiving its

utilization, the revenue to third As third $XX and and the million driven The intangible certain to upon related development expenses January paid liabilities million upfront adjustments assets and portion to Xenium this operating become the Total of QX earlier in over $XX.X year. expenses XXXX by the to $XX.X customers comparable certain quarter million larger for milestones includes were their million of and million million time. research assets. of acquired. existing achievement of was ramp a other $XXX.X have $X.X of in-process $XX.X year, related agreement for acquire our payment for closing and increase gross quarter Xenium million compared will and last consumables, which margin up increase a The to products $XXX.X overall the the our XXXX our margin

corresponding third was quarter compared quarter third and were for were increased loss for expenses. period. the laboratory This by research The and of compensation of personnel-related million to increase This loss prior to quarter $XX.X R&D $XX.X compared expenses million $XX.X stock-based SG&A $XX.X compensation Operating of outside also the materials expense. compared driven expenses year by the to and primarily in-process the XXXX. offset was for of personnel for primarily third million of was decrease The to expenses $XX.X XXXX development supplies, million includes partially $XX.X to increased lower includes million million stock-based legal due third expenses. of XXXX. quarter higher the million million of compared for $XX.X and $XX a $XX.X of million XXXX.

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

for our to the outlook XXXX. Turning remainder of

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

the reflects continuing of across to expect execute free are XXx, the a approach guidance updated term. quarter to continued as We in capital in disciplined our well Xenium reduction business near the months with positive and our final performance first the as momentum. still this to year spending flow year. have a drive expenditures of we the At cash Our become for significant in X

new substantially As are expected, now for complete. the facility payments our

million about months, XX total to of are expenditures. capital next $XX anticipating million the over out looking When $XX we

if will In addition, an additional development milestone due technology met. be up acquisition, $XX is million relating to to our

payments end free sales agreed We a future path close. believe have to to also are it be this remains cash There year, positive if met. such we the flow by of milestones hitting will for certain and volumes milestone

that incredible opportunity we balance Xenium the consideration goal in supporting with making build has leadership this in last the the cash cumulative X our operations will acquisition, positive aforementioned note The rollout date. important our for We push are continue from continue cash and been is to It's huge, momentum expand also on to to space. over investments we and to excluding that the flow quarters. our the to

this drive we growth discipline spending At and Our I'll heading positive to flows off, we continuing to have into year. it a controlling is teamwork Overall, back and while in turn setup this XXXX. cash to point, great paying will into heading Serge. diligence drive next maintain

Thanks, Justin.

made conviction long Given of executing early before the opportunity Chromium in stronger platform believe progress the term way my full ever. in opportunities our the X vision, the is the on and promise still I us. Their from we're we've cell. than realizing long vast single

our Xenium why the for and our the a reasons enthusiasm world's Their I'm lies the to core works team the comes of and customers why in out, to breadth customer tools But of down solidifies is scale positioned the team. our day groundbreaking relentless be the XXx mission the opportunities the so ahead. the are makes products, of incredible XXx, our tenacity what network, to in operations tremendous transform understanding XXx the anything and industry. talent the to on of ahead. potential ultimately, of on engine, our the so fundamental and Day and than deliver developing performance disease. mission, well it health history There all in spatial bullish of what of on part pursuit commercial we're innovation strength focus tirelessly addition, advantages of our bigger our the many all formidable of view my In has organization.

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

[Operator Instructions]

Our with of Donnelly first the comes question Citi. line Patrick from

metrics the you placements. kind maybe Any last I throw funnel you Serge, order that? quarter, pretty said like outpaced Xenium can on remains piece, around healthy. it sounds of the think orders

So would the that anything appreciated. be order on share backlog activity can or side you on

Thanks, Patrick. Yes.

customers the particular, has feedback the field the phenomenal. Xenium customers said, from of tons how really phenomenal, in I like excited out been of really momentum, there going, has has been said it's been this with performance really it quarter. momentum So in increasing and

increased just backlog momentum. We been don't building so generally. seeing in again. XX sold the sense is been give once to was which the around, field. trajectory more that this momentum We in up time We -- has clearly to my backlog we've and than And that's had to shipped on remarkable, increasing an than as over alluding -- of here comment instruments a comments there more This showing that just we did the traction really -- well. I what

just Justin. might it Then be maybe for

help right rate Just year think the for the growth on think on about for just trying Chromium there you the that the And the us consumable and what side, also front? rate just about exit is implications 'XX. can to

to right as the that it's a little maybe about Xenium. business more than Just bit way think -- obviously mature more

a trying it. the to and Just the growth about get right good there to handle way rate think on

Yes.

So story. been Chromium overall has regional a

year-to-date, QX we assuming look about grew midpoint you so would you saw QX the AMR at from we've into talked same and year. at our guidance And that EMEA similar in to that kind we that that year. looking we're last in and is at rates and at QX consumables when to range, if the last that AMR sequential high over But teens mid- of year-over-year EMEA, And heading rates updated growth challenges exhibit QX look the for Chromium of seen saw existing growth China. business range, the they we

is Dan Stifel. with Arias Our the of line next question from

you see the systems? pause way that is way being get market guess that for when maybe about not curve as you does expanding, the I guess, of, that received, see is just there? product wave on talking we're level, do next the that first think months talk a their high Serge, But sophisticated the XXXX. evolving a XX that doesn't the to to the Xenium, happen? about I Or XX you users the how can mean and potential adoption you at know maybe that suggest does I I

XXXX. going Good on e adoption Yes. and see industry a kind of typical trajectory This hesitate after where you going your certainly the on is the well. But is tier to forward of the of really, alluded some really it And this there's we'll then of it. trajectory. as obviously. to Still sort what happens to early, of in you as a launch comment question. a lot on then different on get strong far compared as a We early launch, Xenium science and clearly as wave strength

You us on the thinking we're to that and some and amount to do a there thinking of seeing ordering and top more more seeing data sustained penta initial of assume of that, of customers of and instruments overlaid trajectory studies but coming from demand, have larger the and is great back larger results applications.

we'll to it So but out, I signs think how early plays the quite have bullish. are see

keeping a your on then geomics don't expectations this in get legal be are And Delaware Okay. stuff, here? the this Caveat know for keeping It's of mind should just there got final on trial timing you've you what then the being, interest you in of Fantastic. And what there? the litigation, top I'm but mistaken. weeks too detailed general ruling? infringement on And what if do maybe month. not now, think I X.X the from about

Yes.

I to comment particular any on case. hesitate So

on would a do multiple patents. shortly, You're to scheduled products have say jurisdictions within I correct. that's going in There's cases multiple couple multiple start trial a of and multiple that weeks. on we

keep really We we So that enough particular protect invest or to customers lot investments deliver any in it's can R&D, our a to so any What trial. investing particular it's we love. invest that about not us case R&D incumbent in best-in-class products is and that to is in a products our in those important innovation. lot

Mikson with question next Genuity. Kyle the is of line Canaccord Our from

Xenium awesome Congrats on ramp. the

were thus the consumables like early how like kind an of ordering inflecting expected is sounds launch slowing headwinds. far front grew and or the it guess in spatial like have utilization it rates situation. could it in trending of 'XX Serge, macro to because possibly? Could HD the I -- the you like well it people on And Xenium side, comment So kind quarter. there a maybe, like of is down are Visium pausing close faster

when So patterns. and too early to utilization, talk about Xenium to it's comes it

people panels, X of going that ramp. are go are genes the We through. an built cases, applications then this to it's of go In take targeted amount quickly where from for how longer. platform ramp which of customization is necessity, amount around customers means, day a who and certainly almost go people remind have can others need of and to process and able lot wide like they with samples selecting examples run many to to to certain to in for choosing instrument. And a customers means that necessitate that up panel gene of to I'd that both is people We to dispersion ready through particular, have point of there some

So really Again, are early -- really dispersion. days, large but there's large promising are that signs. big go in volumes, large there there customers run at studies some a some

hesitate to a this at too early projection, stage. make So

far have out mean, as undoubtedly for a certainly, is on I of our holding Visium customers, there's it that Visium the HD lot a been that And lot of anticipation the there is As true potentially kit. standard concerned, product eager for in market. running off

And to that know the it that's that connected revenue you? fast like kind end market, you sir. anticipated? That at people this actually going is growing? And you playing the of how helpful, also on Is I of Like as can what out is habit. Okay. [indiscernible] biopharma how are was supposed using for help comment there. And connecting percentage point, are

so. of of -- stable So been in has fraction or our as you the XX% biopharma relatively biopharma know, been business has neighborhood a

of just seen Again, been on in recently. there everywhere our some small effect of attenuated just has business. relatively fraction like budgets, because biopharma of have business tightening a We a the it is overall else,

in as And range especially But clouds to with customers it many, is to there, the use across and We in automation the us means can cases. the we've a it we many But provide many with to partnership out see term for adopt concerned, how solutions that formed of use Beckman that mind, automation the and others of this scaling give far that its of have wide different need range should we'll gradually. services and applications cases. [indiscernible] Coulter. thousands So with future. as of has seen pharma across sort out automation plays Connect that of a use

Our TD Dan from next Brennan question comes with Cowen. line the of

one, first on just the single just cell. Maybe

for this guide prior what just single-digit you that Justin, And kind wondering was the we I reallocate prepared discussed balanced of wondering is think single now? gave Just high math you know, I year. some what I'm for that Serge, the growth growth resources? as in what of earlier. would imply the for as you I believe kind cell. remarks, ahead more look

Yes, with I'll cell. single about Dan, talking start

China as start maybe far goes, there. As I'll

QX, thought half that last would shared we this the to year be the And to in we saw the QX. roughly But in call, quarter. On we've are flat to that lower been there. case. more demand they we be we next are of that levels, although seeing at even and them reduce higher, this working we plan And inventory back reducing the still

chromium all growth for rate together, And the put past. to QX growth going there's And to now we're that we've a decline AMR the those to overall, guide, be said projecting midpoint expecting right similar we're So from I single-digit seen EMEA at and mid-single year-over-year, digits. a then that's then like of of before, QX when you there. seasonality in for the what

ahead. go Oh,

Sorry.

single No, just franchise growth believe going taking kind I of to the said potential forward. Chromium remarks, in what was say prepared and cell strongly the I up going my we in of earlier

emphasis You're our Chromium. to right, put we're our on balancing to on relatively more going speaking, focus be resources

the growth. And should next that results. So level really, have a also yield the map exciting that to road really franchise more and will further product we take drive

mean hard. It's spatial. keep of it's kind on up up about size we've placements. always future just and growth really see but opportunity gotten this the maybe ultimate feedback of and and market, project the then market going to on hard just positive, been the out And into the has the Great. I

I'm actually So really you're to of like Obviously, ramp on of and wondering how year-over-year. They're the they from labs fair adopt offering are number, just steep you but but boxes, just think like but us grow 'XX us like spatial the future. today, what placement, unique in not many some some help can now, look capabilities. certainly you necessarily kind not give to could to it 'XX, think sense is on continue number a would placements it cheap like to a level without putting grow, in the of like see just about

of terms think of would X in So Dan, maybe variables. I kind

very is I also, in like is in up of very year As us beyond. this confidence looks of moment, makes healthy suggested that of stage, look and the to are a next And the and some also kind think, robust, people which and And which -- gives trajectory at us, you I about at just which and amount the breadth the this. experiments then One good also terms of the right, going thinking I forward. and think market potential bullishly that applications about.

Our next the Sergott from Luke of question is with line Barclays.

This Salem Luke. on for is

start to off with in Just China. wanted Chromium

any to or in certainly hearing earnings when But think outlined you're just what service I providers. some XXx. do will resolve color That's biopharma-related, wanted been working season. issues mentioned of guys there? is China more your And those We've some timing, a of with exclusive there. exposure kind of color kind more you realistic all much that not You when struggles is how on idea themselves

Justin. is one. take this Yes, that I'll

our As and that we They're from. than sell as smaller to market, academic mostly exposure we've biopharma our far heard companies in exposure. the other China,

forecast mentioned reducing and with the earlier help forward, QX. as there. distributors from sell to levels that at going the inventory going we're better who looking We demand inventory working service the forward. the far through -- to we've I to and As hold inventory out patterns demand typically recently sell closer more better smooth manage QX service providers providers They them get those been through ordering looking

is the seeing QX China. the top to driven mostly in we're that a hesitate QX layered with from what we're inventory from I expectation that on But reduction bottom in call signal demand seeing decline in to So it. our of

orders, are That's you quarter? there? there? of towards then from sales kind prioritizing And boxes Great. those kind from start prioritize of then placing out that's did And how the the maybe Xenium. and as of did more the the little kind Chromium. outpace come to expense or that the like provide of risks Xenium those force again, Xenium a revenues? was And to that helpful. And of you Could Did kind incentives color at And then color on seems launch, any more back through of kind me. trend on of chromium the lastly, it kind balance for what

Yes.

Chromium, the So sorry, of on the in terms commercial on so Xenium. on -- focus

the number on side, commercial there's it's -- of So things. a

direct attention First in ourselves incentives spend placements as Xenium drive certainly most directly it more to can their there. that all, to of

we that these to put -- terms their sure make tracking in commercial now as the resources also of and attention our terms of Xenium terms that in attention. of time forward, in going And things, terms encouraging on spend have how we they We of the a how the careful priority. team where lot allocate now the terms takes of first resources Also well. And of of they were of certainly we're we Xenium both resources, incentives. in marketing kind in rebalancing them

it out driving in product to extent, is terms we sales and And built of more get right And going infrastructure a a and through to this went our in last creating this that's over -- on overlay factor some led the Xenium trajectory trajectory to it creating forward separate that of get we have course has specialists. what team dynamic that for demand. of the effort right that the launch Another year. takes function function this commercial to year

forward, to at of are and flexibility going rapid Chromium resources we and put have the now more while our like driving over time, we we more focus feel and our attention balance behind the initial Xenium. progress that same Now the attention hurdle,

But us to traction of have far top of watch metrics meantime, to internally, is And And to on it. very help closely the these sold forward. of so feel we backlog dynamics. a XX concerned, good about attention And of our more as going like of we need we going I than the mentioned, stay lot kind Xenium in balance as the course, and we're grew.

So about the progressed. we feel how -- good quarter where very

next is the from Tejas The line of Savant. question

the pipeline. on one for Serge, you Xenium

and section. multimodal high-plex the cell segmentation, mentioned the then same Flex tissue protein You [indiscernible] the on assay the

capabilities how of you year? you terms share of Xenium last in is Any these that just color X impacting then a essentially point see one can detection? book Truco as So And order clarification, your there? next

True one. the co-detection, Sorry, didn't I last Tejas, get

demand of enthusiasm good the getting And we it what really is. is question. from -- capabilities lot certainly all, a of product me first questions the mean, launch and the The Let capabilities, the just product are as product. general. with and answer the I really, Well, feel of about existing tons we for are so there customers the obviously,

react new prioritize always same on and been keen to we've valuable. very, very find At customers historically, the the to to quickly most top as that listen feedback features our feedback of customers time, to to the deliver we stay capabilities very and initial and that

of proteins segmentation why a here. about coming on Flex excited are large soon. co-detection That's we out that's we're And coming what very That's the doing we're why tissue. panel. again with is And same

do same already powerful out definitely [indiscernible] you tissue I on that I point be that see and capability. value think if in using customers protein immunofluorescence already. a want to that's our huge going the to

And quarter. sort it's That's bid. that's that where the going Justin, on $XX helpful, quarter-over-quarter the then Got million of exactly And step-up actually. for co-detection of one you it. fourth with in

and assuming or You product of your or about bit both? Is budget dynamic Americas uptick sequential EMEA sort there a cycle strength the rather year. of the Or year-end is to sort you're here? that last talked underpins there of that flush it that essentially confidence similar Xenium

Tejas. Great Yes. question,

same the ship in that as midpoint Xenium here's same that Xenium range, did kind instruments QX seasonality would the products, amount of the the we of we seen Xenium that basic that we in the than we've our QX. of side assumptions, far have as excluding guidance is sell And roughly at previously. on then would So

we being of able flush not able being When end, built year-end to as seen perhaps not And or at Xenium so kind over-delivering -- before the the we've a to flush a same QX and budget saw than you're end midpoint. be perhaps QX of higher the range primarily And or seen issues. that got high include we've Xenium from for the end APAC, be flush. on budget in not maintain any that would at our QX that seeing decline China by guidance we've seeing into year-end not historically in low to in ramp seeing would at then lower ramp the the end the the of the driven looking stronger budget would number in

Our next the John from is Sourbeer question UBS. with of line

you you on can XXXX? color had next Do similar First pricing this on think get Chromium. year? Any here levels record year. in increases you where think see for one you I on consumables

plan by price plan thousand to we for tend growth driven by Chromium moderate around Chromium samples, more pretty in increasing of and gain that there's the our demand changes. this our Much year, of increasing is a both of that is lot the ultimate pricing So tons customers. number premise potential

And so to a be focused that's where to we're going extent. large

don't guess, have I U.S. injunction. where the then follow-up and on And in Xenium. you a here APAC, an

rates And out what on competitors competitive there? Just features there? customer versus you're any do where color win think on winning or type you

Yes.

really strong board. across have talk been strong and in to across our has it mean, and has the world. and big generating more the teams the would Xenium sales. to clear, customers go been of the performing I have in the to well, winning, there. in over -- evolution mean spreading Americas, and momentum been really and that now a make the lot field getting and out on as couple issue Xenium fact, data of say been we're there traction has been the be to systems customers field more And awesome it's our last I And work quarters really, has where as just the So the far it's strong particularly really I been

any application customer type. of has or it's I any the to been story, don't is across real That or kind particular the any phenomenon. geography It overwhelming board think particular and particular particular and

question next Our Carrico is with of the line Stephens. Mason from

I'm between night. a calls few jumping

and continuing of one the Or been I'll them sorry forward? with Could to these forward? outlook about plan thinking flexible on asked. this about we kind to pricing be Do here. has going your for pricing Xenium if given pricing talk opportunity going you be just lock in? accommodative somewhat ask how So capture should you customers and

I'll that to one take Mason, start.

very, I and a out very is environment, a launched lot It noise a there a not when was think still and very competitive of Xenium. back to we of competitive lot data.

generate to And encourage pricing, early was in with of that adoption drive there and make so basically launched those the hands Xenium friction future introductory sure we that could instrument the less that users could getting sales. data help

see that as we off presenting has more of saw so study labs. head-to-head starting to in data we in their progressed instruments are on and results remarks data they've And customers the and own other time come the mentioned the prepared instrument, the their that run

the true This platform. really showing the of is value

the from took at lower up list And pricing price the in away a And this price point. we quarter. so moving confident we are past introductory

trending the deals and of to customers with packaged open taking off Now price, also for do so -- as price to continue that reductions instrument because, a instruments working price is the customers larger list you we around list mentioned, the are with we'll still couple that we're very with order. the and below average other selling consumable

of is Michael question next of Our the from America. Bank Ryskin line with

in it's and said times margins just ramp, hopefully, tidying basis, you the profit still, you a million, quick the ask drop than on it's sort ones, sequentially, I'm have $XX.X now look going a gross had off quarter, know earlier. number the dollar from two, gross last to on gross of point guys quarter. I One, that $XX instrument I third to Xenium guys if of up the it some at we And XX% anticipated. steeper million. but was profit

despite the Chromium got despite profit less you million and So $X flat gross higher revenues sequentially. being essentially

some the to -- that going something be on. dilutive just margins I there? discounting trying there else's I'm the So just quarter, am What how here? be could in inventory could functions some how don't see Or it math or on do to it Was that. I missing

sequential you at look year sequentially, this Mike. you over But both you Yes. ago, to and I'll margin year year-over-year we I'll declined what the look When all just of due to the a to back get then you maybe and with start and and we've variance year. piece. practically to that if look Good Xenium. is had question, that

if were a to be so exclude roughly And and margin, Xenium gross it was it year you same the would ago. calculate as the

There's towards more mix also been in instruments. a the instruments Xenium service a then as towards also increases been a higher been And overall. sequentially, well. mix there's line to There's so mix

portion we mix cost driven as fundamentally into we've the on in booked also and changed that outside Xenium, when that install structure -- that's also nothing product train service, lower about so has And and increase margin well. gets our that's talked of about, the Xenium. that by But be would on

Okay. directionally, number. follow give math no EMEA you been But giving sometimes All sometimes then again, you surprised China ex right. sort of redo I and surprise, on the give you specifically up the but I'll the And magnitude. just have and again the the or Chromium consumables. know year-to-date. the Americas guys quarter

I'm decelerated up. it was say trying it my So Did XQ like gone through. just teens. sequential mid- What if and got I and mixed high that see that a you've or growing XQ to little Americas you have accelerated just to EMEA consumables year-to-date, is numbers? to as think the notes

Yes.

in far just overall regional product. that as provide breakout we low give to year-to-date Mike, teens, has the AMR So the as chromium color additional some been by EMEA. But

year, If consumables the high easier when been was and at look the period year-to-date, QX QX And compares mid- to to you ago. chromium teens. it a look you year that's in at this prior

rates those higher. were So have increased

is Deutsche Bowers Justin Our with from the of next line question Bank.

just ones for So quick two me.

the In see even to and starting like lab a are new cell around a then is [indiscernible] taking -- terms can spatial order customers repeat landscape, core are you starting picture in back sort some just regionally? what book or to there? you And sort broadly of academic step of of see paint Xenium, and activity the single of you

Justin. Yes,

customers. run much we've customer seeing we're multiple yes, a on repeat Relatively seen and when after we're more speaking, And instrument. we're whether another customers, for examples fact, those studies really on That's answer basis then is when ordering to would results. where I their They first is from still people in that seeing mean, that so their new instances, always Xenium. But and this the about. sales. That's very and gotten and has the question more Xenium So run is getting have the focused to biological of get gratifying sure. first samples seen of what buy run get the go And front, results biology another we've instrument. back

best how performing kind of is the of see measure something from repeat probably when business you customers. this So

for very to So us gratifying see.

do around as tend like demand, major decent far But issues. just labs, those of We core with labs be have mean, the generally no world I some here. core fairly run As see kind core adoption other random consistent. enough issues of to the staff sort overall, to is puts go to having and and takes, experiments with labs trends or some out

Our JPMorgan. line with the next from question Rachel Vatnsdal is of

more that this First your comment around backlog sold? around Xenium Would the grew for you Or XX off, the mentioned that I instruments just want was number this around XX in instruments comment quarter. shipped to And clarify quarter? of Xenium. then

is long the at backlog how this So point?

so XX that's Justin. top the Xenium. we this quarter grew we We was what backlog over shipped We Xenium on over Rachel, of XX and -- -- yes, we is shipped that. this over sold

frame And flat can and XXXX walk hold it relative And really for scenarios throughout really quarter? any China the That's has how through to September then you the Okay. then helpful. stimulus me. can without you rest and Also, trended that region how us next potential some just it China, up possible to just on the support. XQ that's year? trended of Is for for region for October

expected As last China be has QX came line China we what that QX, earnings called in in think in how somewhat call out consolidation we it through roughly far distributors throughout our said trended service providers we as lumpy. can and how when be in. China just generally and it the and I with due flat patterns QX, to in came Ordering QX to volumes to of that's

that that QX. the is As now calling as seeing, demand from right targeted the that at far signal service providers. with going with driven we're are our a we we're mostly but from into QX, reductions inventory looking decline driving QX

at than in we we can now demand, reflect. would actual the right So is our tell that least from what revenues QX more expect

on up XXXX And Great. just then for frame China?

Well, now. the hesitate like I to said, bottom right call

have have to we'll have we'll the see -- progresses. QX We'll to how of see to XXXX. see rest So on

Our question for come final the Sachs. of today line Sykes will from Matt Goldman from

This is on Matt. Ivy for

competition color You on gave to and and wins Chromium customer with some different regions the there changes are but types? within maybe Xenium, within environment any the

the especially the of that. the Yes. only for particular out call constraints some a seeing business. environment really and that the on somewhat We material we we're that's -- well. that. we're sure, has of any lot trends CapEx Chromium the from overall, sort has themselves of the been effects like Chromium also I been through -- think on There's has the out demand I has in we're seeing it definitely in think kind as We QX but underlying don't testing there's tighter of changed of do there. side. it I QX, biopharma Again, big that, there's outside CapEx the and other seeing side see the -- many anything in But saw wouldn't recently broken Xenium see environment U.S., impact in pressured

that you Xenium That's for your roll of price. some do to could you continuing I start Or But when the the pricing, off instruments? then talk through on said near discounts Great. list helpful. future? know might you Okay. in see Xenium increased you And the you

them We're instrument. their to customers instrument always and get get hand working using to that open an in with

value Xenium talked the consumable is with and revenue about the sale strategy streams. we've As before, the

an to instrument larger that deeper the for instrument compare take a and we if used. instrument on with so we'll a order, get just an that discount being get And order consumable out there

Conference XXx Have Ladies Genomics for Call. gentlemen, Thank great attending. Third Earnings you a conclude all and that Quarter today's will night. XXXX