10x Genomics (TXG) 15 Feb 242023 Q4 Earnings call transcript

Good afternoon. My name is Jeannie, and I will be your conference operator today. I would like to welcome you to the 10x Genomics Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Cassie Corneau.

conference your begin may . You

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

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

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

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

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

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

known a and Genome as were of in Biology Last XXXX General silver the sponsor week, Meeting, Advances AGBT. Technology we

upcoming exciting presented product science our launches. workshop, of our During our and team details

like replay over didn't today, some of we if will call the check you you more news or if see to you information. While With would Serge. I website, the now out our that, encourage Serge turn will on to the these highlight presentation

Thanks, Cassie, and good afternoon, everyone.

we have progress of we as a start kick why XXXX a great year. brief off in I'll and call, today's overview the setup with our During

and will XXXX. million, will our another highlight $XXX of of into launch at I engine in revenue growing year. and guidance our the to came in was provide for big priorities strong and innovation our of total detailed analysis. and our financial Justin XXx year we trends biology key the Next, for previously a Xenium. Genomics The the more year. announced. . XXXX for this look focus own as million spatial XX% the XXXX in as areas spatial was strength business results, revenue We with of with field catalyzed driver XXXX, well exceeding for story big single-cell $XXX the the revenue And Then

driven year an been Even We've It have moved they for extraordinary launch. discoveries. from rapidly install instruments adoption, enthusiastic incredibly in selling XXX of launch was than the customers insight more the delivery powerful remarkable of year first from the instrument importantly, more about platform. Xenium as to platform

instruments best-performing preprints system To the specificity, data analysis. date, the are sensitivity, best biological rigorous best published them more studies the Xenium been benchmarking using multiple throughput studies all own Xenium. the validate for the delivers than from papers, insights. generated compare there have XX in independent Xenium as best labs. customer demonstrate that Among own results best their and The their in-situ These

team the premium than step with success to customer And capacity accidental. our scale performance faster operations delivers our was our With instrument engineered way. be an premium the we Of ensure ramp carefully course, none a and to that anticipated. easy-to-use of leverage workflow, of every extremely relied drive Xenium on dedication we to manufacturing of and it commercial

genomic will usher analysis. in the platform, era Xenium's of which belief potential long-term a enormous exceptional our believe an launch year we for new reinforces in

reached several just our and year-over-year. success. cumulative to a XX% we're XXXX, in growth for the is drive increase we sold world, validating X long-term X,XXX Xenium well In accomplishments positioned innovation of reinforcing nearly strategy through instruments XXXX, around

manufacturing product [indiscernible]. R&D This new development to Pleasanton in our including opened adds and support for enable of production, new growth. hub and to cutting-edge scale operational also multiples We capacity facility

In reflecting we of addition, discipline operating we goal commitment scale. QX and in our free cash achieved the for delivered our cash as acquisitions, maintaining cash positive positive flow excluding flow to year,

publications, XX% customer it to year-over-year. a Lastly, increase rewarding was up massive especially see which in were

inspiration, for what is XXx We of customers peer-reviewed surpassed how team. our about. is setting papers huge and push technologies. X,XXX now our a mission-driven forward pride all our XXx Seeing have to science motivation source use is tools This

emphasize Before approach. the to I discuss want our that leading principles the I into anchor developments XXXX, key very exciting

First, thesis understood is needs and analyzed single context. cell unchanged. a with our fundamental be level to Biology spatial

commitment Following our and believe opportunities. this principle, are will we ongoing opportunities allow there those to ahead us innovation to capture large product

company a will we continue scale, to for so. do Second, we always and built have

significant out the deliver made several toward years we a investments have while additional At breakthrough expect realize we to point, grow and and world-class over leverage this have our we and revenue, profitability, innovations. commercial our capacities, as building scaling operating and facility we continue we teams. We drive to operations development past research as

and maintaining a And cash financial third, driving strong to we're committed profile. discipline

made operate already at to investments We scale. have

on operational growth. in and have prioritize targeted cultural highly to to put incremental spending place necessary frameworks rigorous areas We drive also

for a and extend This spatial set leadership cell defining bar and kick of researchers with It's and demonstrate X velocity products which year. to world. for will We it's of busy new franchise products, customers our our the start year, cross continue to that enduring the strength engine, capabilities the around technology the high-performance for been to to the the tools. introduce launches and single innovation exciting raise XXXX new impact catalytic value are standard and and planning we and

by able development the our of the researchers most in on take increases Visium development the with has This scientific a the HD has Let resolution leaps. what existing with workflow will easy-to-use the is as example me highlight cell that biggest will HD HD changers been this to [indiscernible] few technological standard customers the have be we're to is Visium at challenges robust game And scale requested and HD. a Visium will hardest Visium Visium. product platform extract of large-scale entailed impact monumental orders their on over X means information and prime single launch research. resolution. year, listen we of that history. of Visium on same the to run our this tissues starting It expecting magnitude. instruments molecular how from

we XXX instruments [indiscernible] labs customer than around sold the world. Ahead have to more of launch,

We expect to spatial take advantage HD CytAssist of will researchers more to expanding [indiscernible]. access Visium discovery gain and

January, confident see HD preorders response early HD well customers we've the demand been soon encouraged Visium time and was Since coming, with customers. will the This from but long initial a we opened the been we're product in worth has base. Visium wait

ambition HD. better as HD biomarker else, translational has tool [indiscernible] is X or samples than in Our platform If Visium is Visium anything we no a for believe for to with with discovery of the establish to there molecular information cohort discovery. be needs information for existence correlated that

Chromium AGBT, franchise. also our transformative At we technology GEMX, unveiled for a new

advantages scale we chromium overhaul at quarter, and to our deliver reagents the series The since enable to expression lower volume optimized assays larger cost. instruments features our GEM-X first will research. on with reengineered launch completely that exclusively are single-cell superior highest a products Later immune Chromium give X plan single-cell X their XXXX, performance These gene Chromium microfluid performance the on design chrome this first benefit VX. architecture GEM-X, major the profiling and across single to VX higher chip available and board which important immediately products, customers cell performance

a few. highlight me Let

substantially to GEM-X challenging First, consistent genes to more increased for The more even previous than GEM-X we increase robust scale, assays. delivering market to partitioning. be designed of also GEM-X products, and Chromium cells samples. XX% sensitivity, detecting architecture up built a cell greatly improved chromium is compared generations more assay robustness efficiency, more Xx performance all with even to channel enabling more faster recovering new to per sales. capture efficient of captured twofold with was in improves up

price and in these significant per this We is ever more and elasticity are cell reduction larger single delivering research, users before, experiments. also Even a than larger cost existing of researchers cost believe reaction methods particularly is as than more the in per finally, effective advantages, reducing GEM-X quite more towards these important. assays and there And cost with all and cell. exposed to performance move twofold are

accessible. That's research Flex make to into analysis experiments scale per we're to our revenue reaction deliver goal this XXXX. cell long-term We more Chromium multiplexing $XXX single fact, and sample. in In cell routine growth customers as for more even and seeing high-performance single outpaced want to lean use growth elasticity is why their

direction support prices drive GEM-X is X lower analysis. opportunity expand of multiple planned in this to researchers to single for cell and steps

We high-performance ahead, of and superior broad drive adoption comprehensive designed robust and have menu large GEM-X including at economics assets roadmap a a to deliver applications scale.

number profiling. workflow GEM-X, processing. on most both And capabilities whole new response Flex, platform we're new protocols [indiscernible] protein adding addition flexibility, We're frequent upstream to and for of up CRISPR applications In a including including we of Chromium in Chromium intracellular to more screening announced blood customers' the requests. our opening and

cell bar a franchise products, The invigorate XXXX robust our underscore performance analysis, the new renewed confidence momentum growth to investments new and for focus on will more believe the ahead. along the in Chromium we're opportunity making franchise in with We drive standard the our of single Chromium and and commercial beyond. the raise help set in

and to segmentation, also an product been of and after the same of HD a Xenium, on cell is These science the to specificity we exact year, have in this launch products high-plex only X,XXX-plus on planning We're our profiling multi-model of capability, extensive tissue to the cell an and will start Visium push delivering the including Xenium researchers existing while XX launch run. boundaries Xenium. While And expected panel get improve scaling new expect this integrated by with plugs gene the later protein expect magnitude, for map Xenium launch continue to to to a we're a big year, add-on road proteins multiyear the come the customers to up GEM-X throughput in to have determination enabling our boundaries, compatible order readout which new quarter. from RNA large-scale section news is beginning. kit really high-quality assays sensitivity, the executing yet single midyear,

lower this What wait of runway higher is headroom throughput the bring these applications, for has customers. that platform can't more over some is Xenium about and to ahead. technological the our capabilities amount years. really of costs With exciting tremendous We to

will we products, our platforms our the of X take introducing we're each new defining year, In level. portfolio this to franchise next

We to headwinds may drive adoption. term. customers new that to these are solidify our conservatives recognize these the pace This platforms be are core but right trial while product the the tools. take we near-term time long offerings confident around some for there and later new of warrants and transition to growth also

excited these Commercial commercial enthusiasm on leadership, and our more and Our this seen highest commercial couldn't energy the opportunity Annual I to help recently spatial and with team's be team of cell is single probably full while Global change. of and that ever and at stepped and team to product the launches proud transitioning navigate biology. the deliver And promise palpable, how meeting, held has XXx. engaged customers the we're up comes I've leaned our was We

leading priorities organization to have get and of new to With there. to cell It's execution as portfolio of attention and for vision the evolve impact. ready every reinsurers products our primed is franchise, portfolio are across customer continue focus ensure that have mission our to work success. bring greater and access single team They aware clear success many and results. our of creating around And superior delivers our part we tools. our as a is of to incredible commercial as deliver is over more and our and they're scale spatial our drive and customer we to on and in premier to obsess organization commercial understand possible team to rallied do fully the balanced superior commitment

experiment platforms per with X per per cost map. per more direction in sample Lower cell, accessible. come Our to is And costs make along broader means that vectors. down of purchaser step this adoption more our reducing and driving GEM-X products. as all elasticity strongly of long-term to by technologies across of drive for goal demand believe prices multiple project. our our part We is road product in our

Let me wrap XXXX. up by summarizing our priorities for

to First, capabilities. we bar aware of all believe for And we're success that their on and [indiscernible]. and the high potential sure have product we said want laser-focused the understand performance new We of ensuring are these launches. researchers make

to plan a our rates is us new and believe we of strong ahead, which capture. there Second, that higher nowhere drive near analysis finally, intend single-cell fully We focus products mentioned, discipline. And opportunities Chromium maintain are as help I cash will to growth. penetrated, on to we significant

related And section. financial over it will Justin, that this like growth about XXXX, and before to product turn comparisons I'd year-over-year will say we're as what's us to that and there to in innovations in excited of I new year's are considerations front while his introductions address in affect Justin

served the well we That's requires value has that, on XXXX a of it us with to We're how That's steadfast creation. to decisions. company. make we the think delivering ambitions about long of earliest that view. orientation The That's take innovate. maintaining in let are over and the Justin. since how we days focused turn scope me And in how us long-term

for $XXX.X Serge. XXXX. Total million, the December results XX, was year our to was no Spatial the Then revenue previously $X.X by year-over-year. revenue million ended you, XXXX, and change up results. year was XXX% announced of $XX.X in revenue revenue the with $X.X consumables XXXX. the was year-over-year of instrument I'll increase review our I'll prior preliminary quarter over increase grew the $XXX.X outlook Services for period. our prior was period. million, compared year-over-year. our of year fourth X $XX.X XX% finish . Chromium increased by XX% revenue consumables the X% the revenue million, Chromium spatial Total financial an down and year-over-year XX% was X% revenue million, revenue prior $XX.X million to over full which from $XX.X an start reviewing for down period. million, discussing Total instrument instrument XXXX. was year million, quarter results $XXX months Thank for financial consumables I'll XX% over million

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

a period. quarter million income $XXX.X statement. rest profit a Gross the the in of margin Xenium of fourth $XXX.X for year gross fourth the XXXX to margin for Gross XX% the to was was was the for compared of XX% to fourth million due instruments Turning quarter for the of compared profit quarter mix of XXXX. to gross sold. prior The primarily higher decrease

of driven quarter fourth related compared for million quarter a $XXX.X expenses research million technology year. XXXX operating last by $XX.X $XXX the acquisition. increase the to were expense Total fourth development million was primarily for nonrecurring The and in-process of to

to XXXX, higher quarter primarily for million compared $XX.X of driven to XXXX. of to were outside driven loss the expenses million to in includes is loss nonrecurring increase for was support quarter compensation loss $XX.X success compared quarter million year R&D fourth compensation legal period by higher increase million costs fourth net by expense This The $XX.X compared were increased of for for and the Net compared to million The to technology $XX includes operational $XX.X acquisition. for . Expenses million a the XXXX net period. for million million expenses compared stock-based $XX was of quarter fourth driven for $XX.X related the million primarily a $XX.X personnel expansion. in million of the XXXX. prior $XX.X million fourth corresponding including of a of of $XX.X stock-based the to XXXX. was by Operating loss primarily fees. the of expenses, $XX.X fourth quarter and loss

revenue I'll $XXX.X XXXX. up over XX% $XXX.X ended X% full XX% results. was year full increase to revenue $XXX.X year revenue for year consumables revenue full speak consumables was of increase the year year. was Total XX, prior revenue Xenium XX% instrument XX% million, year-over-year. period. Total instrument $XX.X Chromium million, period. incredibly million year million, increase $XX.X million instrument the full its the now was a was for million, which the experienced year-over-year our over Chromium December consumables an down was year spatial revenue up representing $XXX.X million, of and Total driven XXXX, $XX.X prior first was revenue compared we was strong traction the million, in year-over-year. to Spatial over in an $XX.X with XX% XXXX, by

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

across cumulative X,XXX X,XXX instruments of comprising total instruments Visium total XXX XXXX, a In X,XXX XXX prior X of and As year. we sold from Xemium we have XX% instruments, increasing platforms, instruments. instruments, the all Chromium year-end, sold

XXXX, with X% our customers reactions bought up X,XXX XXX,XXX product products, reactions, consumables During year-over-year. XXX,XXX XXX,XXX up Xemium XXXX. over approximately bought from XX,XXX reactions, X% Broken and reactions. up the our approximately across in Visium reactions X% chromium year-over-year platforms, customers out

the setup experiment solutions. As unit a reaction the volumes to it our it is represents using reminder, a reagent believe to perform of customers. an important consumable we is metric our an X We needed sell because

the expenses, full X% APAC year XXXX. was million, XXXX. product year-over-year. of year million The for XXXX to prior XXXX higher were at increase was was compared $XXX.X margin mix in to over primarily Total operating $XXX.X revenue decrease research compensation XXXX Looking to stock-based period. due million And $XXX.X million in-process million, driven gross by was earlier million for $XXX acquire was number assets decrease $XXX the in Gross and $XXX.X certain year instruments sold. gross was of to year a period. for of EMEA for development regional profit revenue compared expense for The expense. results $XX and an compared primarily personnel this XXXX. million, prior XX% in changes and for growing agreement a to XXXX. profit Gross intangible million for was XX% related Xenium Americas growing to XX% to higher our expenses other revenue the XX% margin due $XXX.X a including over

$XXX.X million attributable XXXX. costs was and XXXX personnel-related The increased for costs higher and to $XXX.X million for facilities technology. to expenses compared primarily increase information were R&D for

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

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

For hit acquisition. activities to and both XXXX We in of positive, QX, that equivalents $XXX.X technology share related we and exceeded meaning with operating flow net of cash free XXXX, $XX achieving cash I'm capital from our cash in loss marketable goal million cash million to the and flows loss include expense nonrecurring ended proud securities. expenditures. operating

over QX, million cash $XX of flow. generated free In we

year cash For the payments acquisitions excluding breakeven. restricted net for burn cash cash, Net that and included related of of our we $XX.X to restricted cash aforementioned $XX.X cash, acquisition. technology million full XXXX of were million, and XXXX was

year footing. paying diligence and off, the controlling teamwork financial ended spend in Our we is on strong and

a X% million, XX% outlook XXXX, revenue outlook, consider. range for year full representing there to to in XXXX. million Turning full key over few factors of With to to $XXX expect to of $XXX be we our growth are year the this

JPMorgan last is at at the our impact earlier this AGBT the products, which First year and we of week. new announced conference

headwinds to large these, are impact as Visium as GEMX the transition test train like transitions innovations. HD these some we generally and technology said, newly Thus, expect Our stock expected on QX. be this do a and to not or customer product major new at to should part our and are products new of are Both That biggest up customers the start the while quarter these in quarter Chromium we anticipating of evaluate, legacy products. and temporary for updates expected end. product introduced see either exciting

placements of year, those with QX to respect X large nearly placements saw last quarters. QX and a we XXX Xenium, with number Second, over of

As about expect a that of pulled start of a reminder, the budget demand forward We as more we combined increase year. at we placements year-end believe pronounced the CapEx see to dynamics [indiscernible] price a result, likely And to step-down start with a took into XXXX. QX. in the

range our quarters. out of the on to these incorporates as anchor philosophy need of factors, and next above how play range we'll to with transitions see The balanced and the over explained before, guidance the downsides. have of midpoint Finally, I upsides guidance is and couple the midpoint our

the have of we the we rest For number a potential believe upsides. year, of

platforms First growth. efforts the commercial with across all balancing is focus on driving X increased chromium our upside of

Second placements. is the upside in Xenium instrument

a our large opportunities. While than cycle the of we funnel sales is longer products, other have

Third HD, is for potential driving overall and the increased there benefit upside Visium quicker of the where adoption is CytAssist related to placements.

the XX anticipating over from down XXXX we almost are When months, looking in $XX $XX million out million XXXX. next about expenditures, capital to $XXX total and of million million $XX in

earlier, we for the significant mentioned made expenditures growth. now the many of state As capital Serge of have

earlier, goal achieving As free flow QX. mentioned of our positive I cash hit we in

the Visium January, expect same we and Given achieve to of not paid our in that in to payment will related the a we in XXXX. but maintain HD QX, and December seasonality do accrued in was milestone business discipline

cash we growth. the Overall, drive continue a year while investments have flow positive driving great to believe for making targeted to we setup

At Our I'll point, to Serge. it back our innovation business. goal to our self-fund generated cash this is back by into scale investing turn and

opportunities to Thanks, complexity biology. Justin. so and of of there human to what of biology But ahead it also extent the makes health. the challenging are the about is advance challenge means vast us. We often talk complexity enormous that understand This

XXx fundamentally a core, growth and impact. about is As

science impact has have delivered have our transformational frontiers on profound and engine a customers of technologies society. the expand innovation enabled that consistently Our to

the for responsibility day aren't hope. as a just and customer it world. determination team's In work With our team, around force will mission. every told biology. disciplined so . We us to scientists our create guiding I see fact, remain open up and technologies we and unearthing pursuit to They am that our powerful opportunities grateful questions. our now for tirelessly in a as who for recently drive a bold, unraveling ambitious this science and are of support Operator? we that,

TD Your the question first [Operator comes Instructions] of Cowen. with line from Brennan Dan

Maybe you the the follow-up. the level some helpful -- color guide, just quarter. to spatial to could components, give set cell then on that Congrats consumables, and instruments more would as color you on give single And if want well. be on at namely a I have

Dan, thanks the for question.

as the As I to as not thinking out But revenue, far line. the on guide you we're instruments total we're as some planning how breaking give about by that and guiding for goes, product various we're color platforms. can far

For so built year-over-year, the our a towards but roughly slight weighting of midpoint flat higher Chromium into decline in range with as guidance instruments being revenue. IX, the Chromium, we're

slightly messaging all the Visium, what with year past that's to is we're getting we've For expecting customers Visium CytAssist about of over on instruments to that done ready down the future due be HD. the year-over-year. the for And

pulled I prepared into impact saw of forward orders remarks, the even did the forward be quarter and QX, a impact And Xenium, we QX. a some QX with but QX the about In -- the how gradually that maybe we we then in from on And demand expected talk was QX. prepared QX to ramping quarters X.X in did remarks, of there. biggest in healthy pull expect have talked will about I we do of funnel, and in that though we

would so you ongoing range if quarter. about at imply the that, of to midpoint instruments the And demand do on per roughly of assumed guidance it XX our an math XX

and at lower expect of off to high the we QX. at ramp of the end end that year range the the start beginning in to So then

you're Got -- it. the some cell really more more there's a on lot give would given I broadly, how of on single the going year be spatial, cell instruments. the just about not ended, on way to the But single mean that excitement, know And you're visibility broadly. getting obviously, helpful color but some I thinking of you gave

grow like this of to So guys you some . cell? -- Even just assume you faster should initiatives about grew any the give just X% growth XXXX. you in though instruments in Could you year? accelerate should single grow of kind color I

in then Dan, that Serge keep impacts a part has as that with our also assuming transitions, And XX% the of question, as mind that I'll for new are the decrease. QX goes, more color. of from GEM-X talked particularly But the for turn first this the Yes, to product. we and to guide transition that up about end can we're take to far the legacy then the with price I've transitioning around product the product customers Chromium,

at I gave range still we Chromium midpoint price growth the even instruments. assuming the with GEM-X, color you XX% of on But for the overall, decrease on are our overall.

been a prepared Yes, years -- and we [indiscernible] yes. for there the number now. And remarks, the we've in out about message putting I do emphasize what we and talked of

that sample now. Obviously, from to tissue conviction strong will have single be We cell that every right we're very context. need ultimately, far with analyzed

demand of is but easier, workflow, a features, front products also it we analysis improving a use, growth. is of have a long-running importantly, well. price the to [indiscernible] And to so year, lean strong Flex, set that been first also with with as beyond in elasticity we've broader us . And to expect doing which up adoption, drive this drive products, previously part adding an well, to reach there of new we big our particular, year, us And easier markets. of this but broader making into will and into robust opportunity conviction and broader lowering what make the introductions really in

of with Dan Arias the comes from question Stifel. Your next line

quarter. there? What that the systems up didn't on maybe see and also this stepped like XX but Justin, type orders, consumables placed of quarter, move. the to nicely I stocking Xenium, was the of related we assume last contribution it looked you some drivers same were

seems way it that's due partly the your thoughts to love the like ramping, at to So is least there. usage would hear just but

the both. Dan, for question. due it's to thanks Really,

now are X have in quarter-over-quarter Xenium of earlier compounding instruments QX to in that like by QX, quarter the nearly quarter got year sold have like [indiscernible] getting between followed instruments but those total. that You've was you when a XXX placed been effect doing their a the quarters

the is so coming with from previous placement. they're where quarters some bulk is effect the getting stocking the instrument out an having to orders QX, from reorder point. the that then of compounding And that But orders are of going

Chromium something number we you little versus dug -- of . do a you on around in think how purchasing Okay. out thinking then do you products step have? you with a that? And shorter-term this an a as about growth abstract we're should been relatedly, the quarter, budgets pricing things these like mean, reactions about And has bit little that more context have for into if bit. then maybe next the just threw we of structural? the sequential reactions. and in performance year to is the What When especially idea, for when I'm that -- behavior sense down is look maybe more new I because you that at X% in changes that and curious due consumables. just growth, it

quarter in on let the and around that [indiscernible] consumables Dan, me the the take of Yes, quarter. sort question

[indiscernible] the for that been before. than years things in Chromium this in price main X budget of year side budget differences the from to it was our a -- seasonality, is year. number It sort of year or sort on the is has happen price Chromium QX. we Last sort on in there's So increased smaller and year, around smallest. One and increases year pressures of substantially dynamics actually of saw

to of So kind Chromium of in QX. an up there wasn't much as nearly people on reagents for incentive stock

before, we like thing other and generally is, about execution. commercial just The talked focus big

last in terms our much on of and especially has And extent, free. offering and an in back spatial, much what try on Our largely customers trials amount greater And better the to there. To looking customers discounted customer but the talked expense a products kind been these it quality, workflow, add to spending of at technologies. building greater large, of due there friction focused support, customers us companies better been new More similar goal. of that have competitive are before sales been or products, Chromium. -- products out to offerings commercial increase it's for about applications, dynamic the by And products the there in sharply team their smaller support, always also because much year, to going was the much much data was and funnels Xenium. coming do to of throughout breadth of our really very somewhat superiority much terms of -- certainly where support, very we out customers time, to our they're And have is some where and and our process.

choice I As the always sure to compelling most far in forward keep analysis. our mentioned are by is that make us customers driving investing innovation, for cell earlier, them single keep to seeing as

Your next question Wolfe comes of with from the Doug line Schenkel Research.

First, question. and a of year, follow with bigger part question picture on this want to I then the early up a

on since going Visium to response you of suggest Anything just been up that be, customer think, of anything announcements these HD, share different to seeing you accounts? would in know seeing to could open terms So behavior, of up new going I in GEM-X of what us. think in the customer and wondering, -- have of opening I I'm are early customer the groups? are interest GEM-X that But the week. last launch they only may is terms early I all Are you're

with We will And our we it's reaction first existing in naturally been base. both our that customer and seeing exciting -- is last those sales -- we're products certainly time, them team the our Doug, will for the people very that. of the Visium I for announced of started too world in preorders want of terms And to right, great. commercial like because week, gain has where first naturally to HD. of GEM-X. the attention with year launches. These terms be coming more the aware traction are announced comment just reaction turn the to that [indiscernible] think, It to on early the really like the

the customers along customer ecosystem do I've sample looking reactions. sensitivity, cell products now types, information empirical enter content the say came will would over of too more before. greater that that what gaining these we that to are huge more and talk customers about, precisely ultimately, been more on advances is sort as a recovery number of customer talked more because way for, expect I are has do well, initial amenable advance efficiency, of HD that As to to it's but robustness. cost samples, greater greater a early And based virtue data have by to these the Visium advances lines throughput, what and GEM-X of

Serge. That Okay. makes sense,

question, I X at, may the So revenue not environment, upside to closed or being and Xx is stock year-over-year pretty the the guidance. to levels. you current a the the job us asking our a I'm that's do little the current slam be But of think, valuation at to bit dunk I solid. arguably, top maybe -- picture here. support robust. for XX% it's midpoint unfair bigger because growth from line certainly In But

on over if kind we opportunities cycles, on new growth think based back profile. boom to based your always related and new up of normalize a innovation. bust you've keep garnered ability multiple your that, markets, and the So years to premium just your opening And for

very be you folks the this beyond help entering For those the XXx past. not bring of like bit, the can importantly philosophy and to that that XXx the the is waver still a might cell, think on also can much future single and that I And share spatial pipeline, what year? waited believe on guidance of product

Yes.

little maybe me touch let So philosophy. can on a bit Justin and guidance here start

I resolution. anything to we anything been to enable spatial as And with platforms with single enable cells, all said, with believe contacts samples, starts with as that saying, that products, we've vision, starts future. have that do that to be cell fundamentally, that the issues, needs So analyzed built ultimately we the

like launch think strong we -- as been and -- And it that it's every in and us. fact, lot a feel new products coming, for Our of product stronger announced There's more pipeline. robust, that we long-term capabilities, and products month. a these this number is full runway more lot has to more are advantage say or I long of I the vision. opportunities the really big front innovation platforms full can to of way ability opportunity have demonstrated new the in And ever development and has the really to take There's a shown the products we we last just in -- market has with engine been. sitting have market than drive towards that here confidence, now right and is really,

markets employed. So created technology these I would that through say, we fundamental to the story is very much same that have before still extent innovation

strongly fact, than in past. we more about ever -- it In feel strongly the

And philosophy, what today, what I'll too and far say is Doug, yet. as our things not guidance as out to we're around that we're we seeing that we don't aggressive seeing get call want

upsides So the to in at then got We've midpoint in of downsides. prepared and upsides that called this I balanced case, the out spoke we're But we've view range. anchored of earlier our remarks. a also

driving the on first efforts all chromium was X growth. so the balancing focus those commercial And -- our results platforms of with across increased were

that result upside. is result -- consider doing an the in. would that built that I not So of

in potential placements driving adoption -- built with quarters. the upside And for then CytAssist upside more Visium first in in the then is that's the yet. yet through instrument was but not X of the placements more on that Xenium the the we third placements and addition, quicker couple CytAssist second And as get HD

as we how as the we and appropriate if these year appropriate. progressed upsides. progresses, towards see We'll so And update

Kyle Your next Canaccord Genuity. question Mikson comes from with line of the

with product that Just through customer like going is to And of a totally other point? a just risk or could switch [indiscernible] you businesses that a Xenium not spatial profiling. -- like kind going tough walk hesitant independent it impact the and in they're more cell back to single evaluate to you could transition in that is to guys any the Visum just HD dynamics could kind this of to there be just -- those [indiscernible] at or GEM-X, momentum traction or detail? stick just kind is Like of

Yes.

little on expand this. a So bit me let

very I have. and GEM-X, It and workflow years customers. improved is it's what to HD deal that version relative ago, is and Visum both on the CytAssist With established think each these that natural has our similar much are to has same something runs for we instrument customers customers. now with with -- started and our a resonated [indiscernible] HD for transitions we have that So upgrades very what our

always we on in some deciding very see and a for projects on our friction to said, . That and progression ones the there's of on HD. Visium your standard products, current existing So as finish customers. natural to pick amount turning that when -- on which when up your and projects,

scale expect test reagents to kind out and large of to people also benchmark. before order Visuim jumping We to to some in HD at quantities with smaller it

and decide HD. the will amount ecosystem, a when of time over turn but transition will of expect fully it kind the fully on stay take and the we XXx to to customers to some within transition So where

The of better. Everything just better. with side, just what dynamic is IX-Series they just The again, the existing on it is would sort [indiscernible] is the better. instruments. GEM-X to Similiar data workflow runs assets, similar, doing be on similar current

So we studies again, these transition GEM-X do to transition to deciding But architecture. first [indiscernible]. people to onto order test the going be where expect benchmark naturally them the reagents to which to same them before will the amount X them there's new friction to of

Okay. [indiscernible]

revenue But would to QX in I executed XX% And XX% the a be when these look just the transitions transition seasonality is to would transitions. would to impact in think relation to add revenue be on what the these annual expect as guidance far somewhere goes, going We expect with QX the between you the to of QX. throughout in going of be biggest the at to midpoint mean we in as are range, I as to year. that, of the be year. throughout our do result impact

That's Okay. interesting [indiscernible].

was -- a litigation there due back [indiscernible] price But Going reduction of not I'm the CAGR that single Chromium price was single-style XXXX, X like NextGen introduced that's think Chromium here USSD sure the associated XX% grown you I consumables that that reduction introduction catalyzed when IP digits could the similarly in of with was possibly then. reaccelerate years. since to if decrease that demand, NextGen that. to stuff, price because past Do growing release. GEM-X kind by -- and think was

Yes.

it. actually So when was launched that the back I price lower

more As as time, fully sure. revenue far reactions and are do over GEM-X demand, it will concerned, that we higher price ultimately expect more to lead reductions for

progression accounts higher customer their the levels some total revenue as have that which evidence total up those with customers per reactions and results more on number added. accounts price of goes lower incremental . entails flexing, in as projects sample dynamic in to based of where of We transition of [indiscernible] get

Your next question of Citi. comes from the Donnelly line Patrick with

consumable gross Xenium you, of just first margin the coming pressured year, well. pieces, the Justin, probably about maybe quite talk these margin the in X going a some some then color can will soon on year on piece? both consumables been and of and terms just this be But as progress any obviously bit the about that's piece how the help expenses would the ramp-up and from just helpful those the And of bring the XQ for have margins to you can the progression. you think moving Obviously, piece us up. the

Yes. Sure.

do our get we ability higher platform of have overall themselves of a margin let for consumables to instrument the the the that's since philosophy We consumables over gross . We we the high have margins. gross me to term. margins of driver sell. our far a the But this believe placements consumable similar offset key late. have been think And being that the The the the Xenium mix will to of ours. over platform on as back that's margins Xenium will the about First, lines. about that have product are long the margin comparable help instrument. as streams time, in We've change ramp launch. the talked strength by in Xenium other driving basically gross strength we term And investing to long that We're gross realize that, to overall. other margin talk that largest the that up, we margin to committed of

given GEM-X, a impact that's very of that higher going we that are our more thing transitory structured. for minimal is There's GEM-X, QX, For licenses will have more how a but a and QX and to QX. do cost be beyond impact slightly

the that. XXXX, so said, Xenium just minimal GEM-X. first the quarters And I gross a we the QX, impact the beginning of of margin may royalty the mix of would very like X upon will based in fluctuate and But instruments after in normalize, mix expect payments and

guess HD, to with the expect other I yields be them just ramp to product [indiscernible], And the manufacturing you X coming up longer new just that. start any Visium just bit where you a off of term. mention than With was probably less little

improve HD to we yields. expect those, as do we But on to Visium the expect see well. we time, improvement over as so due some the impact And just

could Serge, impact and of incentivizing you think about about Maybe we there's kind last Can just how talk single catalyzing talk back bunch [indiscernible] spatial obviously doing the know in How what internally? I year. that all far some but swing a about I and of of cell? guys had cell went been you you cell and on to force, terms it pendulum sales just back you the Xenium single year? Okay. bit this do to questions the of strategy think just about single growth. in a That's little helpful. you're

put much very spatial we on was right and has to question. well. did the trajectory. incentives of about on good And focus put 'XX, especially before, obviously, we team borne commercial on year -- Xenium. We Xenium last it talked and the the on worked fruit company's Yes, extra has Yes, as

the to team we across been entered on balanced bring perspective allocation portfolio. year, we have -- As this telling the a of balance more attention

structure. into of on go incentive now this year, have number [indiscernible] Chromium quarter we a there is their As [indiscernible] we

now drive sure have team good to is question specialization more which watching team on are very a for We to spatial do to which giving It's to a carefully. room drive drive to a to wider be as a there appropriate -- much see commercial Xenium, balance. a has We that continue to our -- able much to overall Chromium, franchise this has make a some footprint. drive is at

feel incentives measures we but be the we're something we putting so here. the we like will right of progress place, the in watching, early absolutely and right And we're that as

Guggenheim. Subu from with Nambi comes next the question Your line of

RNA percent I this And cell, is single GEM-X which follow-up. by reason frequently until Flex application will X architecture. what to [indiscernible] have customers available say, wondering used naturally expression, I ask most then [indiscernible], upgrade was customers For the is I -- in is let's

Yes.

prime the that of have the we've -- GEM-X, which the volume to comprises [indiscernible] biggest also expression that applications are able ones immune of applications. Those largest are for which as X we They XX% pipeline, profiling. is includes So Chromium. represent more been the than .

more XX% And that? what roughly than would Flex be, XX% to or --

haven't . terms we the So in the somewhat of around of percentages around material in Flex. different this reactions, of is fraction point a revenue. smaller about terms fraction the precise talked overall at larger portfolio, applications Flex Chromium

the Your with Tejas from question next Savant of Morgan line comes Stanley.

guide. you couple a on cleanups for Just the quick of

XQ you provided, can -- it point get very continuing for put flush color point I in trends downside you the to China? your And mean, I assuming a upside, XXXX? guide around just the sort of finer essentially which to midpoint you the degree budget helpful. 'XX? First, in anchoring on what of anticipating you're the a are then sort for Is of But

Yes.

question. the at what year, we saw we starting maybe and the part Tejas, So guide. thought with beginning that QX of consider of did as We in our this contemplated last your about end was of the

guide highlighted go biggest transitions what the drivers the product and before, just forward. As the around the Xenium as are I far overall,

As far that budget it's than view budget of like seasonality we've past. as rather or an seen taken flush And the the more binary year-end really, something dynamics the assume average flush. of budget on the trying in no to

Ryskin America. comes question from line with next Bank of Mike Your of the

that real but quick, to a been X over that the to to major the obviously. as down and significantly. of expand you bit. on in of the to growth revenues headwinds essentially like And want mean last China, coming quarter, follow a fourth of little were I years, up to revenues, China percent be XX%. I on used of from X% couple it's I want It's dropped actually

I as perspective, that much out, any if would mean, last from the couple you into essentially not growth much, it's a go whereas XXXX, So of think more headwind it the you higher. strip been I years have

about and So from be the it It guide -- feels XX% we for of to Can talked about perspective. things GEM-X, like you a a Xenium from 'XX Visium geography midpoint. talk perspective.

Some to significantly. other of the decelerate have geographies

reconcile -- think have do to could follow-up. just a guide? And approaches you X the about So those I

question. Mike, thanks the for

in solid to For take downturn China, was in keep in roughly XXXX started of a that in China things in QX mind QX. XXXX beginning still a quarter China.

'XX year-over-year the also over a QX, for have well. more difficult And we 'XX impacts do that. considering So as it then compared compare

as forward, by QX China, what in Going what for as far more seen we XXXX informed more that's QX. we've assumed around recently been and

overall, aren't so now. better we right And China in get forecasting to anything

of when sequentially, And roughly so QX but you then XXXX. it impact characterize flat the year-over-year, I consider as would down

Sykes Your comes next of with Sachs. question line from Matt the Goldman

for Maybe you, philosophical of margins. to following you Justin. Patrick's questions more color the some question just gave of It's a on up on

And how you've the sort products. line margin company? much that XXx given your whatever you there products, to given each that draw you efforts about think to balance mixes, XX%, profiles you're these for think different want now do the that? do are is? profile XX%, growth in of and sand you you overall the to a how different has got term gross near in between the them a about margins margin that commercial different And doing transitioned the XX%, How multiproduct different rates, willing when thinking about you're As you maintain level is the company, them of manage of where the at

great a that's a great that's -- question. And

view that think, to important the have business. of it's a understand very I we long-term first,

not on the term. We focused near are definitely

when when platform in And we so done look when with Xenium that's revenue know that, about instrument we've the the margin, especially you margin really you -- streams. investment where the is an but at what consider lower plays the future into consumable think we

around that targets we thinking the When as and the have development, the incorporate the cost the as margin look into and we design at far new volume. product there trade-offs we and features

is there that. And into that goes so thinking robust

driven be But We is to publicly do have know number now. recognize of targets out the us to back able do internally. into that that's business. mind, overall. important we the also for that hesitate strength that us business very best doing keep put on we're focused I'd to very But orientation reinvest to for have where we a the in right long-term too, margin that a what's

with question line the And of Stephens. from last Mason comes your Carrico

had been here, has asked X lot A quick. real I cleanup just but

to I to potential prior be question, but CytAssist think said a wrong, guys think in this So you and placements. heard expected you year-over-year. about HD for that it that may had talked Justin, you I that And CytAssist have response accelerate instruments down to the I

expectations said So me or reconcile displacements could year? what X CytAssist help maybe this the you clarify about you

I the range are Sure, Mason. to that right was guidance assumptions Yes. now. talking in our

purchased of placement our have to of but we drive CytAssist, what think is really at platform. And it strong there's instruments. since ready help use if will with number of an the who just years last have Visium then just customers so done the the year of CytAssist a be for the slightly bought curve X.X that Visium a the adoption down quarters of roughly the more And an Visium believe CytAssist the assumption good upside Visium, ago, instruments, for And we've strong Visium having adoption CytAssist messaging HD. and curve that where a has launching So about on year-over-year. future been midpoint, being focused has over number also to and HD not

I get that ready assumption has want far I with guidance And lot ahead in Visium ahead think because too so an HD to be of don't range placements of there ourselves the of to for it. been a

of at side like is be be placements launch. be placements drove least of in I them of What them year CytAssist an by is increase that overall CysAssist add. year driven not there lot to in . of will that of to say was some sales to necessarily to because just the referring lot Visium remarks a of was That of my maybe a last HD. HD the And anticipation going a is prepared we this or will before certainly note

And this Thank today's joining. concludes call. you for

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