10x Genomics (TXG) 30 Apr 242024 Q1 Earnings call transcript

Good day, everyone, and welcome to the 10x Genomics First Quarter 2024 Earnings Call. Today's call is being recorded. And I would like to turn the call over to Cassie Corneau, Director, Head of Investor Relations and Strategic Finance. Please go ahead.

Thank you and good afternoon, everyone. Earlier today, 10x Genomics released financial results for the first quarter ended March 31, 2024.

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

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

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

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

Instructions] With question-and-answer our session will call We a host will prepared that, remarks. now to after [Operator Serge. I over the turn

good Thanks, Cassie, afternoon, and everyone.

believe by During biology. new today's a spatial highlighted X quarter launch the call, cell that set performance, I'll single start and of we with new an first overview of standard progress our and major for products

deliver and over our detailed for future. I'll the at we year. more financials, Next, taking the across of the we our for the I ahead look business X Then have to and opportunities call steps a to rest trends will the the platforms outlook are turn Justin exciting discuss on

grew revenue $XXX quarter, to the first million. total X% For

highly and continue to Visium by growth of the drive in strong HD. led launch anticipated franchise spatial our We Visium

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latest our to a few them of advances leadership. how our expect highlight we and technology me Let extend

end thrilled were Visium we March. at HD shipping of First, start officially to the

another of challenge history been one is projects ambitious product example It Visium than taken easy-to-use products and scale enables possible most discovery kind It customers really the better there's is but same Visium research. Visium ever field development was at in the arrive yet workflow robust requested for has of of CytAssist existing no whole and best of It also as HD in the HD a here. and XXX feeling team, built solution whole and runs our of on our For on. seeing That's to leverages tackle our cell especially our only problems at we've brings researchers. hands spatial new their resolution. single true the precisely not for. instruments, hard transcriptome level. to ability the most spatial the the new analysis standard

with Visium and momentum pleased HD seeing positive demand tremendous it's we're ambition discovery. very the for to fuels the platform strong enthusiasm establish as customers. The translational early, still While we're from really our further initial our

We we gene add-on kit also assay with and immuno-oncology panel of robust deliver leverages our significantly cell It compatible existing boundaries algorithms and multi-model assays. machine an in our using both advances Xenium on morphological sophisticated includes of This improve chemistry to began continued cell determination the and quarter, features modalities. learning segmentation Cell our March. new pipeline. to shipping product Xenium R&D segmentation multiple

with of throughput applications, have which up X,XXX nuclear-based existing forward Flex X,XXX enable longer launched to approach, profiling, have We're many more term, leader, delivering been moving a even customers tremendous headroom sensitivity, Xenium protein And cost. panels to developing is by lower for we for capability give integrated and is to flexibility. will there Xenium order still protein to Xenium also of expand to significantly being architected accurate specificity allow an higher the and throughput. We're waiting and robust much and high-quality their while Xenium to more genes options capabilities. We're Xenium's brands. and well with magnitude technological performance planning midyear, biological feature already more researchers solution still new this launch our as interpretation While come. X,XXX Flex scaling for most segmentation enable recognized

reprioritize around With can to spatial the long-awaited the clear to start work and Annual we're biology some Xenium spatial the year's researchers team's push and seeing explore have Research, seeing revolution. HD, example. launch in share conviction the pipeline, their of or Meeting resources forward. how the their forefront Visium the American theme performance and the huge of in AACR, mind We're single-cell research energy of done field buzz from Visium interest was and cutting-edge approaches technologists also We're the of the it's with this Cancer never other a cell new as and conference. spatial, before. Take on or spatial single Association researchers There which for of resonate methods emerged who resounding genomics of

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expression the highest-volume prime all robustness performance gene sensitivity X profiling. assays chip GEM-X on cell our first the first our cost. GEM-X from delivers architecture board of X since and Chromium immune assays, performance single Human launch GEM-X, X These at this researchers the and lower reengineered technology, lower design, capture analysis Chromium advantages next to single-cell to meaningful and at scale scalability, Turning our and completely With and take began efficiency prime the improved increased new major market-leader larger superior a across costs. In products the level. to overhaul March, shipping XXXX. we to

new In the cell. cost GEM-X the fact, for believe twofold reduction new per researchers We more standard sets in raises single-cell for field the a analysis. technology a bar than provides and

independent customers expected enthusiasm, own power and have early headwinds opens this their value GEM-X product firsthand see now. this by recently, been to meaningful validate and GEM GEM-X eager share themselves. comparisons than up the for and customers, as It GEM-X Next the QX, long to on customers their to have started In see trialed customers their our performance verifying technology, expand technology Hutch to the possibilities own despite of adoption help including Lab, the Our navigate We're on this to Fred claims. field samples. More term. more the feedback Innovation we delivers great of customers encouraged transition. GEM-X near-term

have enable said is elasticity. for to to cell, broader have significant GEM-X existing research. goal and By is intend GEM-X efforts we we we there opportunity price awareness presents the economics, encourage take problem map a other us larger several and will steps delivering long-term advantage which in of reach simply, adoption. of use single-cell As robust planned help performance projects, single-cell road believe new one through the opportunity broader our fully of elasticity to routine better believe single superior is our drive among customers significant analysis before, superior Put more we to and biological the expand scale. most adoption researches. We make for large at standard

conviction we for the of potential there's differentiation believe single not performance, in and is huge While leadership all together. cell, It's untapped Chromium. X platforms combined our just

of has the the for been and always customers. enables strategy power Our choice full the it portfolio about

how the with questions example us And of a it large-scale evolve products. research way in project end looking to biology distinct on complementary to by is applications. a access biopharma to their have clinicians, spatial cure to enabled year. transform clear and This to of execution, and X of as incredible products ecosystem ultimately cancer. announced and operations thousands suite diagnose, better may first that's researchers, portfolio their models utilization bring and powerful will deliver that is are the different we're of in resolve the We a spectrum of could cases progress November, on us ensure research use our to predictive and yet the we maximize translational we on continue discover work. opportunities. Mosaic, making to to existing position R&D treat across to the is XXx scale indications evolve team The of researchers there believe broad time. The and We and has deliver best to design build intentionally biomarkers execution that growth, best-performing tumor opportunities new how over into is drive in and ultimately our track ahead. to samples groundbreaking to goal of strength the the complete and full for potential customers' support customers profiles Our translational and we accelerate to cancer comprehensive platforms the in commercial which

firmly we runway single-cell addition, believe a biopharma. for long ahead methods In in there's

not who conviction. share we're Importantly, only the this ones

study single-cell Archive why. customers value that XX% therapeutic of of impact analyzed single-cell the company's Med XX increase reported targets using They helps recent our in development. that target. viable credentialed from and are preprint pharma light our and between the in drug clinical analysis recently Some across a The Sanofi published of gene products and examine on associations success of tissues single-cell shed on a disease genomics. A the be the found genes, given cell data odds types diseases. to diseases support to significantly XX for

the In triple III a their approach clinical approximately fact, target drug chances the could that Phase authors a of reaching trial. estimate

it's biopharma, very to to the all and So while advances the of ever early position better translational still have strong our we potential. established a With portfolio, beachheads in in than expected been large relative in we're deliver. we've

capabilities new at how in again is the "FFPE customers, capabilities platforms listen vast possibilities biobank research AACR biological about and everything." As archives products we available work. We changes our told one customer and their Our These open yet samples long-term me, and all to spatial up potential along innovative exciting with FFPE accelerate of for discoveries. reflect believe to deeply X boundless. build advance think their cell single for

it focused us. we're turn every the long-term that we're still always steadfast we over maintaining started. With XXXX, to will say on While just guided confidence I when has getting in delivering let Justin. remain in have that, me I orientation

million, reviewing by start with level, year-over-year high a noted. Total I'll for up an lower basis Chromium months XX, X%. for in results out will March At outlook played the with will stronger ended unless then be was contributions Serge. spatial provide largely XXXX. the on a on you, and financial growth partially provided our rates otherwise revenue contributions. expectations line from update X our XXXX, for Thank $XXX All the revenue total quarter offsetting quarter

which consumables by growth started Looking million, at shipping primarily consumables our XX%. with QX. Chromium $XX.X $XX.X This was X%. platform at our Visium Spatial was of of the breakout. up $XXX.X down strong revenue end Xenium revenue adoption was consumables revenue million, XXX%. Total HD, along down driven was million, revenue

of year-over-year was Some this decline expected.

first our As the earnings quarter began the in transition their discussed call to headwinds anticipated year-end GEM-X mid-February, while in products. we for new customers on Chromium revenue

legacy customers would the GEM-X products at we of stock this on quarter anticipated not transition, trial introduced end. either that would part up and or newly As

time, Chromium we thus near-term While more drive consumables trialing we are believe over continue some but increased for adoption this the nonetheless that by headwinds to we initial stronger lower price. believe offset price elasticity revenue pressure, created and far. feedback lower of will enthusiastic QX, from the there in The will GEM-X than encouraged customers is

demand spatial wallet the also that from believe We this Chromium share took away mind quarter. customer and some stronger-than-anticipated

As How the existing needs. and time products shared, and various in out in the to given we interest new this suite of a believe studies fit both Serge burgeoning power portfolio we plays over But prioritize be are seen. customers to seeing spatial customers remains comprehensive continue offering the space. of our full to

Moving revenue to Spatial $XX.X on instrument $XX.X XX% to placements. up instrument Xenium million. to instruments. Total XXX% driven increased instrument million was primarily by revenue

Xenium We for with driven and also driven revenue saw XX%, Services revenue training Visium sold. instrument our as by was $X.X consumables. Chromium the fewer up by revenue. sustained million, units million, along $X.X service increased and customers installation down increased revenue demand instruments CytAssist contracts instrument HD instrument purchase XX%, was

revenue grew to to Americas million, APAC revenue decreased $XX.X million. $XX.X X% geography. to and by grew EMEA revenue our XX% million. at X% revenue $XX.X in Looking

$XX.X personnel-related in increased $XX.X increased year by expenses the quarter year prior and $XX.X million million to to for to to R&D $XX.X the prior costs, by a corresponding in to compared and period increased the $XXX.X compared the of period and period to year $XX higher This $XX.X quarter to million year decrease driven year by stock-based million legal compensation first cash by mix $XX.X marketable $XX.X for prior to due increased period statement. million $XX.X $XX the driven XXXX loss period. of to loss the first of period. expenses $XX.X million cash last offset for million loss expenses expenses compared slightly lower quarter rest asset ended net was prior million personnel-related to We quarter equivalents Net compared the includes driven for outside and million by burned change facilities the higher first personnel million IT increased compared and the for the to the expenses declined a in was of and costs million Xenium IT, expenses. the for $XX.X million was IT of for Turning in loss for $XX first of year. to QX offset quarter prior of product the stock-based partially quarter course legal facilities profit expenses. and for million driven compensation $XX.X million and million higher XXXX. We Operating for a $XXX.X quarter Gross income securities. million in in costs XX% expenses. SG&A first by January $XXX.X related of XX% that facilities the QX for of instruments. Total XXXX. cash over to primarily primarily the acquisition to while payment the operating a recognized compared we in with making Gross the compared margin compared to first million a primarily

XXXX. for outlook our to Turning

full X% expect XX% of incorporates this to a XXXX. seen $XXX revenue to believe million, the of million It full the $XXX we've represents representing to view for year. range year We the in both year growth capital about continue and XX We over balanced in range we are $XX upside to anticipating trial are headwinds QX to we next expect $XX Chromium, months, customers now total over spatial to out which in expenditures. looking to as of experiencing the GEM-X. When additional we continue million and the transition into million be

growth. year generated innovation We a back cash targeted business. At by into impact. is execution investments cash for we to self-fund setup we drive and investing to be while continue drive great laser-focused XXx, to making in our scale we flow our our maintaining goal Overall, continue cash on growth discipline are believe driving to Ultimately, to XXXX. positive the have and

questions. in are open up progress excited QX enthusiasm Operator? for the forward strong the look updates about will the to it on that, for launched our now providing We we more and year. With throughout products we

[Operator with Carrico take question Stephens. that, our Instructions] we'll And Mason first from with

tough quarter, the backdrop. in on particularly the Congrats macro

sustained and more could on this has the existing rates insight customers among have driving maybe And back And on half for feedback maybe for made opportunity think bullish and many this demand point? and bit Chromium into on that adoption CytAssist some at could, into of adoption year your early you GEM-X? GEM-X? the about trends purchased you year HD more just year? how initial similarly, you then this you the HD of If give customers -- us do CytAssist interest a the next How and in

that, add the color. is this more first Mason, Serge can then and I'll part of some take Justin.

the Visium as And next say looking I'd half. we're Chromium goes the far and at as the when versus half looking side split, in on SD roughly adoption. So HD around

over the driving that that need thing we a well. we with going driving the GEM-X. And you're last do And the product as to back Visium that HD, the If Same in Chromium back think about looking X/X for for Chromium the do be that are going CytAssist throughout HD with seeing demand in That year. that forward of we a QX of sustained date, anticipation the run. iX launch play that's of XXXX iX a expecting roughly particular think Chromium last the in is to to consumables to month, also And on CytAssist. seen XXXX. order have in in placements half of us We side, helped you Visium GEM-X. catalyst be launch as to CytAssist, placements

Yes.

is on positive. it So has very as far as the been -- feedback so concerned, the products

their of customers from So coming and their coming our A date. very, product. early sentiment from were And is samples has were anticipated to excited very excited HD, on the lot most positive. of lot back been get the data to product hands seeing the perhaps a obviously, customers

So the putting improving be fruit made from all and towards CytAssist bearing the and the we has customers. workflows, seemed it, really chemistries, HD great investments on way, the to along of feedback in now top importantly, resulting

great On the got now getting initial customers a through We're mentioned substantial my pleased customers. and the talking improvements, very just a GEM-X from this side, going I and that Very actually now price. who Pratt. -- also along from there's fact is kind the to with with other results. testimonial GEM-X of a data it back their the axis prepared remarks, who are performance, also We're in with positive. very, hearing about lower their regions the the number cycle and got of boost sentiment awarded

So the were the really February. positive. first very test back it there. Next customers out it, we now that People products And have feedback And been trial has when been the of really of GEM-X a excited in that's lot it the against been ordering are revealed feedback GEM positive. to has to middle coming

Donnelly Patrick We'll Citi. our question from take with next

given of Want single terms to focus looking there are what on for. the cell in we just like result

this the Justin, and to would are overall How you it, like? piece, I products things. cell year some let's know year? you thinking for the to want the again, lingers single this cadence try be kick single-cell the some of if that and Chromium on about think that for appreciated. Just year into what expectations trials Can you this us about, people and talked just about looks call on sense tires give the or visibility new weakness softness trajectory XQ into maybe growth of

think single I'd the that X now. we're for we cell Yes. impact about for seeing cell right question. go the year, to Patrick, the back single thanks factors When

a time quarter. in We're That is month limited GEM-X first QX. the last the so in transition. launched And the frame talking about the of

rate waiting some that. GEM-X limited number the And that are kit a overall. can sizes, impacts going a ordering still planning. And customers were we're were see with we of to ordered originally ordering customers higher for get tell, patterns, small customer to orders then we the data there's and from results that adoption than that. just amount smaller as number able smaller so too, did we at But reactions of looking And we of off see

period that something over is right trial happen doesn't this It's of away. time. somewhat extended so And a

seeing to year by earlier, to has more more the cut a that been is drawing And other a expect transition we expected. of mind customer we so that's about be towards initially But QX, on rest roughly -- for from GEM-X, just then wallet substantially for And about as it's the year. And would of end so X/X and uptick share a of on I spatial. over the cell. the said spatial and date, that higher than side the impact we're single the linear

we'll both throughout rest see the those how the out of so play year. And

transition, to in QX, single impact looking just top we're As GEM-X could be QX, we've seen overall. than expect talking similar transitory. far line would QX more in broadly this single think as over do high at the We about what somewhere to an that more digits I QX. I And expect increase cell. the mid-single is If just sequential

think So revenue QX. And is I things this cell. last then the of on for the over on impacting side. macro increase side, maybe instrument impact seeing instrument And overall X%, is just part probably more impact an the X% the single QX

customers when of are the having on We hard cycles. that's pressures, side budget on And looking there when of out it I spatial choices. a is specifically And instruments are make elongated number a as Chromium well, spatial having impact you're have than the side. bigger you think, to think hearing Chromium, I at purchase CapEx

We'll take our next question from with Dan Stifel. Arias

to GEM-X. grow sticking the lines year confidence the is has could, given just Where view with to that the off and start Chromium other out? just you year. Justin, understanding would for still Patrick's processes Last there. compare transition played single-cell this you if the with hold that way kind quarter, that to Serge, for other finish How kits? And the the it in process? your I the time of validation Does you just revenues expected question said of associated

for thanks Dan, question. the Yes.

over at keep straight-up things that make, is better a existing price. in that that's have to product it historical products. transition it's I a to GEM-X, put the lower maybe, as it little with the mind literally and to replacement people on a dimensions far a as context in very trade-offs multiple if It's So is were to

So and once replicating confirm sure quickly. samples, their happen they're relatively make go their expect claims own validation we do own their the our should through initial that people to to hands transition

kinds different than a workflow what kind of of had kind for thing likely seen than previously of different performance kind also different advantages. customers example, some we seen over what we is very tail different example, had applications for didn't the with for Flex, So faster huge previously, trade-offs kinds of which with and necessarily time a Next GEM a which of transition, not and

be So question are be going to people what going are customers hands. going is are the the the in feedback is giving wrong be they the to seeing what that and actually us to

so positive. And very it's been far,

they And be so go pace our product it relative previous this introductions. through that we're feeling a to transition as pretty optimistic will that happening on rapid

to more of part your we've given the as to in QX, certainly Chromium. year-over-year achieve be second in that results going had far the challenging question, it's as Dan, growth

So midpoint range, upside, our of at modeling the and downside. more spatial also more we we're modeling are guidance Chromium

with some to in and in we to seeing do as will those end We headwinds year, that impact QX, transition, definitely by expecting the the we're GEM-X of the think QX impact And an that out. saw see for smooth an we're the related well. so of

to in to last had the what on an the that being to that's growth guidance range upside spatial, by extent Chromium As is far ] same, our keep expect And spatial. spatial, offsetting us to impacted call. would $XXX $XXX gives offset as the the see from confidence million the [ we we million that coming

Schenkel question Wolfe our We'll Research. with next Doug take from

package So to things in here. I'm to try X different going

can to follow-up a But a sound that it close or hearing week to doesn't weeks with X is momentum like keeping as momentum Dan's last question, mind X you obviously get anything cell. over the stalled GEM-X bit. left market launch X launched suggest feel that like the to a makes that -- target in there you you on just I'm or there's coming of First, in off that last QX, or single

other the then commercial basically second to that this issue. plan? a about of Obviously, talk invest is market on unrelated single-cell company a here. a side. is innovation the I big that timing you just changing Bruker's not infrastructure, high-quality purchase they're So and a balance more my and brings How is NanoString. dynamics I sure performance to the as That direct sheet. competitor There are thing just poised of tactically a want make here yes. And to are formidable want much with answer to much to how emergence Bruker is hitting budget

Thanks, Doug.

So let first me take that question.

several not So talking quarters. about We've on to -- it's of we is the Chromium, at back should fundamentally, first where we been like level, so all, for past high want be. just franchise I a stepping mean, Chromium, where not it it be, think

Chromium. to a And been lot spatial years. the team focused, and our more for front, balance of of focus work work generally on lot in and more a more on and company we've the continues. we actually, to to a among fact, efforts And been more still making few shift have of lot a that do In there's resources commercial last of on

this GEM-X quarter, mid-February. you mentioned, in For I particular transition. there just actually like GEM-X we the announced is And say would that

the So attention prepared of from in few customers the and also couple more last remarks, said like weeks my of quarter. period, it of on quarter. We're tolling -- I weeks substantial longer the on It's impact seeing, it's a had spatial. not kind the last just a

[ would that long-term to we're ] from and early as steps I our then, there And So customer back, of a little in this first as principles of a cycle. Again, budgets on opportunity. well we're realize bring stepping feedback, before, market. based We're opportunity, taking also I in we we're to making kind sort on program, of course, bit play that fighting the efforts headwind of pressure more in tremendous see of elongated factors internal and very said and many sales from our here. macro research to terms say like on opportunity still bear the are

now said spatial investments product -- going On a and about We've entering going development done attractive job has Star. lot innovation the Bruker, great new really a been in for coming that's customers attractive going we've rolling as investments we in with in success the seen greater North We've And that's that quarters feel leadership so years of keep spatial. products made very We've customers. to very the And of back. companies we is feedback. applications. We've -- conviction. coming products. the -- and out a new great our in our That's developing like are And propelling through Again, several years attractive. greater not because establish resonate how the question progress we before, of that anticipate surprising to field, really market. It's we to that us that very that space. getting to be and that make continue

our We'll next question from with TD take Dan Brennan Cowen.

and Maybe couple other on just and cell single parts a a follow-up of then spatial.

year them push of sales of know Serge. more incentives focus to on I cell, get coming into part was reorientation the the this So to single

do. to mentioned I there's more still work a think just you lot

you maybe just that. So if can clarify

extremely just the bullish wondering, sound Serge, demand Secondly, opportunity in untapped obviously, on elasticity. I'm you the

could you speak kind And So cell there for this I'm about but just today the could cannibalization an a we GEM-X it look this growth? what given arguably of than have lower than about drives the higher like? And working But more you've of like would single-cell more we year-end, now. would sounds call your think single as right then cannibalization? been as we're obviously, growth. this transition, growth how through think spatial c, kind is also wondering, by we're steady-state transition through talked like about cannibalization, this that offset on is on in it past, outlook growth to spatial

Thanks, Dan.

So a of in number here. questions

So let go sequence. them me kind of in through

first in right. that efforts all, of on Chromium, making of the So you're terms yes, we're

regions X in It So across take quarter: all with And starts of foundational And identified a that this as does making one -- place the leadership. now elements have we've we it we time. I EMEA is been here AMR, priority. great new say our the APAC. progress. like leadership and would

doing interim in been on number We place, been more the within commercial leader have to Starbucks, new job transition. the Chromium. great in also a organization have amazing focus ties we who's Minimal And of an implementing bring a CCO

exclusive past talked around -- about Chromium up Chromium the setting So business. quote about I've the targets in

past. to have great more of not had more more focused headroom, time amount team be within on able provide the We're the and spend that to more salespeople Chromium. We bandwidth commercial in creating for to a specialization

of more have that our is campaigns want opposed of them to customers really to main price. particular really that. And slow way and a is is I've marketing before, that single one in The KPIs coming single down new the for yes, really the market. single-cell vast their part Chromium. you turn bear to also yes, expect who at to cell scale of them first around to well. customers we And we that's from away and cell. major expectations of research and it bear consistently single obstacle hear a that, that from using well. Kind of going launches evidence tends And question I've should do least past We When lot price, them also this principles. sample. need direct we yes, specifically currently interested making Chromium really, fruit it, using management from obstacle resources our into cell second in that's the in commented studied both product people a using it becoming the are of see it. be And in said in more And -- sort in they from you know get are around to at We're like putting implemented believe in studied a done for not is be really we as in is terms driving deep of a tremendous most quarters, it majority who course, context. demand look existing And exciting of And should single-cell hear second not or your a background routine is that lot obstacle of currently a there Biology, on projects. a we large price on elasticity, method adoption. the a hear elasticity interested customers to the price that is can customers to being sure. of fact hear as insight then we major We chain when consistently, who exception as do

on generate a making hearing kind of we've the and a customers. of GEM-X lot both opportunities demand. example to principles work from and based so And the price that to And from is efforts. of been feedback we've been do curve down first strong see increasing we

drawing been expansion other the too. you conviction point total been spatial We over to are in customers cell, looking with spatial spatial. and the from been there's of as this at recently, certainly mentioned naturally especially attention past, our expect. there's people their latest, They team in past, with launch on they're progress see sales it of of we've spending they at sort Visium we going customers lead case And the their talked focused And well it's -- the single where budgets, the a that early time where of is making that to market. And the innovation. excitement have of have as for of around lot also, definitely -- making share, HD, strong was true, the their thinking are kind looking and what customers certainly one trade-off then the lot was around third we've the is a about with of case will mind of those certainly, for in trade-offs that technologies, who the time. This specifically on the kind is interest about this And might be greatest might Xenium.

case whole of not kind also questions They're Now seeing and people who've over who cell not genomics before. coming from lot through we're a And done can different. ecosystem complementary. before, spatial. get, spatial. customers it that done switching ask single not in answer The people this have you even are are single are insights just cell of research People new you to that into the is that the

ebb there's figure huge technologies new kind customers as flow figure of of we out them. for the and uses use to appropriate going be out as see franchises. to prominence so our specific potential come of precise Ultimately, And to all X

coexist portfolio. for We and expect great, to expect for that ahead future supplement Chromium great we really And complement the other. and whole there them and is each

from next with Larew our question Blair. take We'll William Matt

it committed labs technologies have seeing customers retention point, be by or of up value building that ecosystem. they where of in-house? XXx for products you've they've that you validate last picking Could that speaks just Serge. Obviously, other of thesis, about adoption of you within talking a might the spatial update of of long that Maybe time, anything single-cell on maybe points internally sort with the customers proof the the modalities us there legacy a Is different that perhaps to of and sort portfolio value single-cell been ecosystem having platform to? the strategically you're track assets in

Yes.

or kind in data together they consistent and use people CytAssist, sets good use Chromium, they're released. when ingoin up these there's platforms. We're of look examples and looking that a to number you and platforms genomics at extent, get buy a buy forth, kind same same some of example, other buy and all kind infrastructure, of with experiment going we customers of for Visium rare -- of Visium. And kind seeing customers you where run, cases where people say see context also back together. use for of in run we when and Xenium would or want substantial results validate run you kind setting specific -- Chromium I -- data, Xenium the kind without their a then of Xenium, define up way, It's to of might generate oftentimes talk that to single-cell kind and interest they example dealer results platforms kind they contemplate at you experiments, your put these Xenium a feedback that that those information the biological using So for your is and make a papers the of have doesn't it in they of do of getting published to that and some And system. purchasing then follow Chromium

in terms a at, published all coming of because reliable stage, statistics it's along process look plenty whole in examples there, getting evidence of again, excited do them this collecting are pretty being see and products in So we to field. about those we a customers at of kind But lines. I cases see plenty is of lot early want use of of more emphasize these fast dynamic and it at of multiple using the this we pretty when platforms. applications, customers kind

question next from We'll Goldman Sachs. Sykes take our Matt with

efforts? to XXx the if Or advantage recurring more from stage cell, to doing a this is you spatial? wallet too a this your is this just transition on there approach first just about transition keeping try at use Chromium take early single but really Are spatial just of customer But statin therefore, earlier just customers cannibalization? ease is the go spatial, managing platform that taking ecosystem, priority. help I wanted to time it. which cannibalization addressed with believe to bit given premature, is a And it. there I the sense commercial to Meaning of probably a that maybe your the effectively proactive comments little to And want could that I'm I you're Maybe just this within spatial standpoint? But the cannibalization, where different share comments and you would given sort know makes on think take and forward that you've your way actually existing the to towards sure comments. those potential sort cannibalization into much spatial the focus maybe manage a

Yes.

be thing a the say, word gotten people getting to it's not where could cannibalization I results they substitution so technologies much have one have So you with the careful kind because Chromium approaches. are using and spatial would of using

complement, complementary. and they supplement. -- they You they They extend, can't. They're

mind. in that keep to important it's So

delivering really value is of applications Star particular customer North their questions. kind our success for us, for their think I and the and

understand are customers. what the kind capability -- deeply understand team to the what And and sure interacts the is full most our our making want they then of way asking, to are those them to the efficient what the And way are products research goals get give of to that solution sales our to they we looking the try questions they're so goals. present customers with really their to to

can what got are about of. solutions customers the And making I advantage think I our for sure less it driving set full we've would as of but we frame take that so ourselves that

question from We'll Securities. next Guggenheim Subbu Nambi with take our

China, some the color up Regarding quarter. down did on in provide initial performance here year, the updates material is XQ regarding Could revenue in you continue any Are strategy backup your in fare? sales obstacles any up, XX% piling China? there created building last that the in given was status priority how force of inventory to

question. the for thanks Subbu,

we've down just service sell service at year, about end the the we distributors distributors levels worked to customer. who service previous who the bring our primarily to calls, perform actually providers, on talked we the context sell for As here, the inventory to over last And for actively providers. and

of And when those the of levels fluctuation stack any there's kind either can the the demand at at you so in of end, have then inventory up chain. one

information those so with last also made with developed customers year. And inventory as the we levels also throughout on us. given reduce us to to more shared adding one to down. that with burden on and them, get share any And information the providers closer the relationships progress we We've they region well. the allow were bring some to in service distributors more and work closer to We quarter, and each able saw

played we did the now at level we right changes of issues to. like do them that the inventory, same think year. change last with QX we the out part And I we'll to don't we roughly at and would same expected least demand, that with have at if we back think this beginning QX XXXX, -- of demand it year last that that going so the say like last could And see saw of QX. but

Michael We'll take Ryskin with next question Bank of from our America.

just point. a to But of ask to first big-picture just quarter. not the hate the theoretical I on I consumers belabor Chromium question, want focusing sort

a to over you somewhat commercial think now it's different a consumables If safe XXXX, back missteps. been X XXXX, disappointing the at look over couple number I Chromium last of been years-plus. that issues, of going years say to take last that's the There's

just you talking Justin, were about China headwinds.

into the got spatial. you've some will. you of macro, I you're spend the but Now shift GEM-X having the go of broader the transition, won't probably cannibalization,

Given sounds it's whether just your what near are years, there the a competition that and for is one way performance you're number from it brought talking [indiscernible] elasticity? feels these, it year, vendors last a of take the like making and mean, expecting were a at in you is it inroads from just maybe of there not there's Just up revisit like about someone Whether but single-cell in on here, mean, outlook where to any constraints I comments before. -- into Nanostring, play is the look at issue is of the single-cell the it revised hit over price this I not market. term are that that in sort opportunity budget market can customers, we X Chromium some Is consumables smaller a whether coming perspective? deeper

take of kind me that. let Yes, Mike. Yes,

number particularly in mean Chromium a been current So China reasons over a the mean, why has went of couple period. I buffeted our The over all I lot, been, fact down point. There years. this business legitimate that past of a has fair

of put a So that pressure. certainly lot

are a I into like quarter, said, particular going transition. We this product

addressing those get the always of stock reasons like So process for analysis them. it's single-cell the we're of ease, using question price, and addressing but and main are obstacles case there driving at a market cell. competition is relevant potential we're earlier, but to said process -- those are we articulated. I and we've various and factors ultimately, the before, execution which then certainly, the for number to sure. The awareness in where do of commercial which through the there tissues. biology play, certainly through through understand obstacles need in That's a yes, the of there's it's underlying do general -- in be their also of really through steps; all should now. And is, same of ahead, that development. We still said is, addressing Like also and of The still most researchers are not growth competition first There's Chromium, most question workflow the is that lots addressed, to greater been one. robust we believe the principles, single always means;

Sometimes more, sometimes less.

this applications, the before. There's years, same. -- to XXx. does come do But love better create compared customers Over to the much somewhat and products a customer friction better prevalence like trial awareness a come process. of still all few large, much breadth by It the that them ago, things -- been quality, some on say there pressure which all data various our support players introduce -- have, sales advantages and performance, much workflow, would story about prices. have the people about of of last year much space. back more year us more other due better better put does has a more to that largely there's into the We've out there. couple and to that somewhat talked I Customers is them, the

in largely to delivering goal The So the the larger much, growth invest And of And type still to the terms North our the to because now of and much customer the the reason value focus. that And effects is innovation it's is believe in terms customers. product to Star. We're continuing market product we've up we that of the particular is to relative we same and competition. product drive overall quality. been story. any to both development the of in of -- keep opportunities of successful

Savant from with Stanley. question next Morgan Tejas our take We'll

Serge, Visium I have then one and on on one single cell HD.

commercial is how trigger to in versus they larger on that understand well. of it talked about But reignite single refocusing second were to And then versus here. the I part extent customer Visium the natural the what I the that open users projects. And puts from more are how incumbents about of and the projects there earlier there. So HD. GEM-X starting Is on dynamics you start deeper could for talking did to And a price entrants big sense play my to product you've or as given talked interest to And pull [ strong stocking guide, new the to main got this there's quarters role you answer were new sort a larger know Really just different the of clamoring an to your folks launch. with see perhaps about you've get XX% price. interplay that inflection accelerated of was you a Chromium to of out want the on mentioned mean and obstacle cell, see good the unrelated set breather But question a strong cuts through? to an in on more of footing then sequential even commercial the I ] the with interest and possibility X we that, upside? the customer the some to incremental maybe downside you helps before near-term come and the initial

Tejas, the questions. thanks for

me one. the let first talk to So

so XX% drop So in GEM-X, price. per showed with you're right, a we sample

drop customers say and throughput got larger price in number sale Now that's you've the something a with substantially have more of GEM-X because per a I appreciate. do to a lot that

fact, as a whether -- sample. to time, we of larger talked price to the point drive into excited yes, point We're Your by further price, we about the We want to the reach intend that. for sure. over $XXX ultimately,

kind technology the demand and want be in driving that careful kind in in of of our commensurate We volume. sample with terms in how stepping will into that of drive terms other products and that We do efforts we of just and driving direction. to

considerations this along start. upcoming going are And see proceed So as outcome the the in we balancing customers trajectory. through keep I expect on certainly, second the those that version question, to can years. Maybe more we're to should

were it's kind to of And around interest are HD. -- been make a lot this lot we see. there a to we that Visium came It's So on how sort once now we're of sustained certainly, And early the have determination demand. -- early they that there's trajectory indications There's a versus pent-up still front. of much of quarter good with there's getting see like. days right do data, again, of bolus customers of anticipate on the into that in into what -- initial pent-up actually feedback demand seeing from is but based customers very we're the the sort looks

take Luke We'll Barclays. Sergott our question next from with

can hit you and typically then don't on of to Visium half versus trended? the those you've I be within but past. spatial on for back to And how in help guys of that sense because how out momentum contribution is any now type done you outsized a the out, So -- for of base the break guide commentary the give And that you that single-cell just guys step-up offset then figuring to placed? many revenue know us decline of Xenium businesses able in you really what of kind X Xenium your it directional the

range $XX take $XX roughly our This last about at is Justin. we a call, In to Xenium quarterly quarter. Yes. per talked on of I'll instruments, looking that.

back it that the would high the end. pressures $XX budget, at QX what Visium into and we're and lower When that closer CapEx would the again. roughly QX, was expect looking QX so quarter end purchase $XX. driven throughout into on when saw was we would on of we're quarter of the it to For We sequentially -- side. for expect at QX. And looking Visium between QX, with overall, HD. this from that's from half to that those by year growth side, spatial elongated seen far last when and consumables I QX ramp looking be to half When we've then Xenium looking QX, most you're each on With at from about to the cycles, the versus looking continue

But Like -- there's is of there say year. been the lot for around to Visium that the there potential been that so said, is. consumables the level the what I has has we've see HD. the And level exciting. And to throughout been ramp Serge seeing excitement then initial would a sustained up we've got Xenium

a that we're variety far time released a would allowing And But we're we as on haven't to cohorts. wide of usage across customer the versus that. as couple ramp well. still looking increasing too quarters at new I details say the cohorts are use over is We seeing looking this many trends base. also the when up back at as older of good

so and And Xenium spatial the think for Visium spatial when and we're looking I upside the both Chromium side side the and within that of the there's rest offsets our year. do on at between outlook

question question with take Genuity. -- We'll Kyle our our next last or I apologize, from do Canaccord we'll take Mikson

for I think, Serge. the single-cell A follow-up on quick questions,

in the keep in additional taken other questions focus if business is year, the what is shift some cannibalization a becoming things. growth company's kind of to sense possibly, some return GEM-X make maybe of of those replaced like decreasing wanted with investing this a single even And year. cell messed attractive I today argument in guess, I does That the resources cases? spatial that make kind decelerating that this that those includes of to spatial earlier? kind year line pace kind You less at just given that upstream and ROI the fixation, that the lot to of out ask last that negative this

Kyle. Thanks,

platforms. X potential -- I all large -- we like So earlier, see said market in potential look,

We in are going X to keep investing platforms. all

near several the we large investments the past Xenium. about Chromium. We how made very massive -- of spatial past stage, we go talked it. in shifted on on is the undertaking. There to We're also much reason Bringing very, don't years, resources we any a pretty anywhere this was up see front. Over HD to let at

we categories cases and cases with right much In of broader new of use lot fact, customers. up open have feel use the making now, we broader potential a much investments we're like to

certainly and So across amount. we continuously about investment the are our managing and spend and good carefully platforms the the feel X balance very and

today's for conclude do we Thank participation that, you your disconnect With presentation. you. Thank today, may you now and