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10x Genomics Q4 Revenues Grow 18 Percent on Strong Sales of Spatial Biology Products

NEW YORK – 10x Genomics on Thursday afternoon reported 18 percent year-over-year revenue growth in Q4, driven by sales of spatial biology instruments and consumables and in line with preliminary results. For full-year 2023, revenues grew 20 percent year over year, also as previously announced.

For the quarter ended Dec. 31, 2023, revenues for the single-cell and spatial biology firm totaled $184.0 million compared to $156.2 million in the year-ago period, while Wall Street analysts had expected $182.8 million.

Total instrument revenues were $38.4 million, an increase of 72 percent over the prior year period. Chromium instrument sales for the quarter went down to $11.2 million from $15.2 million the previous year, while Visium and Xenium spatial instrument sales more than tripled to $27.3 million from $7.1 million.

Total consumables revenues were $140.3 million, up 7 percent from Q4 2022. Consumables sales for Chromium dropped slightly to $118.1 million from $120.2 million, while combined Visium and Xenium consumables sales nearly doubled to $22.2 million from $11.4 million.

Service revenues more than doubled to $5.3 million in Q4 from $2.3 million the previous year.

By geographic region, revenues in the Americas were $103.8 million, growing 21 percent over the prior-year period. Revenues in Europe, the Middle East, and Africa were $50.6 million, up 18 year over year from 2022. Revenues in the Asia-Pacific region were $29.5 million, a 7 percent increase year over year.

During a conference call recapping the company’s Q4 and 2023 financial results, 10x CEO and Cofounder Serge Saxonov highlighted the product development roadmap for its Chromium, Visium, and Xenium franchises, which the company previously discussed at the JP Morgan Healthcare Conference in January and at the Advances in Genome Biology and Technology annual meeting last week.

"We're building on last year's extraordinary launch of Xenium with new, franchise-defining products in each of our three platforms that will take our portfolio to the next level," Saxonov said in a statement. He also noted that the company has opened its new R&D and manufacturing hub in Pleasanton, California, to support new product development and production, including for Visium HD and Xenium.

Net loss for the quarter was $49.0 million, or $.41 per share, compared to a net loss of $17.2 million, or $.15 per share, in Q4 of 2022 and missing the Wall Street estimate of a net loss of $.36 per share. The reason for the increase in net loss was primarily a $19.6 million nonrecurring expense related to a technology acquisition, which the firm did not specify.

Other R&D expenses for the quarter remained fairly stable at $65.3 million compared to $63.6 million the previous year.

10x’s Q4 SG&A expenses rose 9 percent year over year to $86.1 million from $78.9 million, mainly due to increased outside legal expenses, CFO Justin McAnear said.

For full-year 2023, 10x booked $618.7 million in revenues, up 20 percent from $516.4 million in 2022 and just beating the consensus analyst estimate of $616.9 million in revenues.

Instrument revenues were $123.5 million for the year, an increase of 71 percent over 2022. Chromium instrument sales for the year dropped to $47.9 million from $58.6 million, while sales of spatial instruments grew more than fivefold to $75.6 million from $13.8 million in 2022, driven by "the incredibly strong traction" of Xenium in its first full year after launch, McAnear said.

Consumables revenues for the year were $479.6 million, up 10 percent year over year. Consumables sales for Chromium grew to $420.3 million from $400.4 million, and spatial consumables sales increased to $59.2 million from $35.2 million.

Service revenues were up 87 percent to $15.7 million in 2023 from $8.4 million in 2022.

Looking at regions, full-year 2023 revenues in the Americas were $373.2 million, growing 27 percent compared to the prior year. Revenues in Europe, the Middle East, and Africa were $142.3 million, a 22 percent year-over-year increase. Revenues in Asia-Pacific were $103.3 million, a 2 percent decline from 2022.

During the Q&A portion of the call, Saxonov told investors that the company’s business in China "started to take a downturn" in Q2 2023.

"Going forward, as far as what we assumed in 2024 for China, that has been informed by what we have seen more recently around Q3 and Q4," he said. "Overall, we are not forecasting anything in China to get better right now."

Net loss for 2023 totaled $255.1 million, or $2.18 per share, compared to a net loss of $166.0 million, or $1.46 per share, the previous year and missing the Wall Street estimate of a net loss of $2.12 per share. Again, the company attributed the increase in net loss to an in-process R&D expense of $61.0 million related to an acquisition, as well as to higher personnel expenses including stock-based compensation.

Other R&D costs for the year rose slightly to $270.3 million from $265.7 million in 2022.

SG&A expenses grew 15 percent to $343.3 million from $298.3 million. The increase was primarily driven by increased outside legal expenses, personnel-related costs including stock-based compensation expenses, and increased facilities and information technology costs.

As of the end of 2023, 10x had sold 5,966 instruments in total over the years, including 5,180 Chromium, 531 Visium, and 255 Xenium platforms. In 2023, the company sold 1,336 instruments, an increase of 29 percent from the prior year, though it did not offer a breakdown by platform.

10x ended 2023 with $359.3 million in cash and cash equivalents and $29.4 million in marketable securities.

For 2024, 10x expects revenues between $670 million and $690 million, representing 8 percent to 12 percent growth over 2023.

With major product updates rolling out throughout the year, McAnear said the company expects "temporary headwinds" while customers evaluate, test, and get trained as part of their transition to these new products.

In Friday morning trading on the Nasdaq, 10x Genomics shares were up 5 percent to $50.31.