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10x Genomics Q1 Revenues Grow 5 Percent on Spatial Biology Sales, Miss Wall Street Estimate

NEW YORK – 10x Genomics reported on Tuesday after the close of the market a 5 percent year-over-year increase in first quarter revenues, driven by its spatial biology product lines, that missed analysts' expectations.

For the three months ended March 31, the Pleasanton, California-based single-cell and spatial genomics firm booked $141.0 million in revenues, up from $134.3 million in the prior-year period but below the consensus Wall Street estimate of $142.2 million.

On Wednesday, TD Cowen downgraded shares of the firm to a Hold rating from a Buy rating, with a price target of $32. The firm's results "were similar to the recent quarters where single-cell missed, offset by continued spatial strength/upside," analyst Dan Brennan wrote in a note to investors. "But with single cell [at approximately ] 65 percent of revenues, pressure continuing, visibility of a recovery limited, and forecasts for spatial already reflecting strong growth, we see a more balanced risk/reward and downgrade to Hold."

10x's consumables revenues were $110.3 million, down 2 percent from $112.4 million a year ago. By platforms, Chromium consumables revenues were $83.9 million, down 17 percent from $101.1 million a year ago, while spatial consumables revenues more than doubled to $26.4 million from $11.3 million.

Instrument revenues were $25.4 million, up 32 percent from $19.2 million a year ago. This was driven by spatial instrument revenue, which more than doubled to $17.6 million from $7.6 million, while Chromium instrument revenues declined to $7.9 million from $11.6 million a year ago. Service revenues were $5.2 million, nearly double the $2.7 million in Q1 2023.

"We continue to drive strong growth in spatial led by our Visium franchise and the highly anticipated launch of Visium HD," 10x CEO and Cofounder Serge Saxonov said in a conference call with investors following the release of the results. "We also saw strong interest in our new Chromium GEM-X technology, which delivers substantially higher performance at a lower price. A significant number of customers trialed the new architecture, contributing to lower-than-expected quarter-end orders for Chromium overall."

"Stronger-than-anticipated spatial demand took some customer mind and wallet share away from Chromium this quarter," CFO Justin McAnear suggested. "We are seeing both new and existing customers prioritize spatial studies given the burgeoning interest in the space. How this plays out over time remains to be seen."

Revenues from the Americas totaled $79.6 million, down from $78.8 million a year ago; revenues from Europe, the Middle East, and Africa were $34.7 million, up from $28.4 million a year ago; and revenues from the Asia-Pacific region totaled $26.7 million, slightly down from $27.1 million a year ago.

The firm's net loss for the quarter was $59.9 million, or $.50 per share, compared to a net loss of $50.7 million, or $.44 per share, in Q1 2023, in line with the consensus Wall Street estimate of a $.50 loss per share.

10x's R&D expenses for the quarter grew 2 percent, year over year, to $68.6 million from $67.1 million, driven by higher facilities, IT, and personnel costs. Its SG&A expenses grew 3 percent to $85.8 million from $83.3 million a year ago, driven by increased outside legal expenses and higher facilities and IT costs, offset by a decrease in personnel-related expenses.

McAnear noted that the firm "burned $17 million of cash over the course of Q1 while making a $20 million payment in January related to the asset acquisition that we recognized in Q4 2023." 10x noted in its 2023 annual report that the payment was for completion of development milestones related to assets acquired from Centrillion Technologies in 2023.

As of March 31, 10x had $355.8 million in cash and cash equivalents and $16.0 million in marketable securities.

The firm maintained its full-year revenue guidance of between $670 million and $690 million.

In Wednesday morning trading on the Nasdaq, shares of 10x were down 8 percent to $26.89.