NEW YORK – 10x Genomics reported after the close of the market on Wednesday a 28 percent increase in fourth quarter revenues, driven by consumables sales.
For the three months ended Dec. 31, 2021, the Pleasanton, California-based single-cell and spatial technologies firm reported total revenues of $143.5 million, up from $112.2 million during the prior-year period but below the average Wall Street estimate of $148.5 million.
"In 2021, we made significant progress driving adoption of single-cell and spatial technologies, as we continued to pursue rapid innovation and scale the company for the long term," 10x CEO and Cofounder Serge Saxonov said in a statement.
But the fourth quarter saw the return of COVID-related headwinds due to the rise of the Omicron variant, especially in Europe. "in areas where Omicron was raging, we saw the biggest impact," 10x CFO Justin McAnear said on a conference call with investors following the release of results.
The firm lost consumables sales opportunities due to lower staffing, lab closures, and "generally increased uncertainty around near-term operations," McAnear said. The impacts were felt most acutely in academic labs, which make up the majority of 10x's customers. Those headwinds have carried over into this year and were evident throughout January, 10x officials said.
The firm said it expects full-year 2022 revenues to be in the range of $600 million to $630 million, representing 22 percent to 28 percent growth over 2021 revenue and below the consensus Wall Street estimate of revenues of $679.9 million. 10x's revenues have gotten off to a slow start this year in Europe and on the East Coast of the US, McAnear said, noting that the decrease "will not be made up in the future."
In Thursday morning trading on the Nasdaq, shares of the company dropped 16 percent to $79.33.
Consumables revenues in the fourth quarter were $122.4 million, up 27 percent from $96.5 million a year ago, while instrument revenues grew 38 percent to $19.4 million from $14 million. Service revenue increased 6 percent to $1.8 million from $1.7 million.
Revenues from North America totaled $77.2 million, up 35 percent year over year; revenues from Europe, the Middle East, and Africa totaled $34.7 million, up 6 percent; and revenues from the Asia-Pacific region totaled $31.6 million, up 41 percent. McAnear estimated that the hit to European revenues was approximately $8 million. The fourth quarter "is typically the best quarter of the year in EMEA," he said.
The firm's net loss for the quarter was $18.4 million, or $0.16 per share, compared to a loss of $415.6 million, or $3.87 per share, in Q4 2020, and missing the average Wall Street estimate of a $0.09 loss per share. The loss reported in the year-ago period included a $406.9 million in-process research and development expense related to intellectual property purchased in connection with the acquisitions of ReadCoor and Cartana.
The firm's R&D expenses rose 70 percent in Q4 to $61.9 million, from $39.7 million a year ago. Its SG&A expenses rose 25 percent to $69.9 million from $56.0 million a year ago. Both increases were due to personnel-related costs, McAnear said.
For full-year 2021, 10x's revenues increased 64 percent to $490.5 million from $298.8 million, missing the average Wall Street estimate of $493.6 million.
Consumables revenues were $418.7 million, up 66 percent from $252.7 million last year; instrument revenues were $64.5 million, up 61 percent from $40.1 million a year ago; and service revenues were $7.3 million, up 21 percent from $6 million.
For full-year 2020, revenues from North America totaled $265 million, up 66 percent year over year; revenues from Europe, the Middle East, and Africa totaled $ 108.5 million, up 48 percent; and revenues from the Asia-Pacific region totaled $117 million, up 77 percent.
The installed base of Chromium systems grew by 1,099 instruments to 3,511 as of Dec. 31, 2021. McAnear said that the company sold approximately 310,000 reactions worth of consumables in 2021, up 56 percent from approximately 200,000 the year before.
The firm's net loss for the year was $58.2 million, or $0.53 per share, compared to a loss of $542.7 million, or $5.37 per share in 2020, missing the consensus Wall Street estimate of $0.43 loss per share.
The company's 2021 R&D expenses grew 72 percent to $211.8 million from $123.4 million in 2020, due to increased personnel costs, lab materials and supplies, expensed equipment, and facility costs. SG&A expenses grew 27 percent to $257.6 million from $202.3 million in 2020, due to increased personnel costs and end marketing expenses, partially offset by decreased litigation expenses.
As of Dec. 31, 2021, 10x had $587.4 million in cash and cash equivalents.
Despite the slow start, McAnear said he is "optimistic" about the remainder of the year and expects the second half to be "More heavily weighted…than historical trends would suggest." He predicted that approximately 60 percent of the firms' yearly revenues would occur in the second half, when it usually is about 55 percent.
10x plans to expand its commercial organization to about 500 employees.