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10x Genomics Q3 Revenues Grow 67 Percent

NEW YORK – 10x Genomics reported a 67 percent increase in third quarter revenues after the close of the market on Thursday, driven by sales of consumables.

For the three months ended Sept. 30, 10x reported $61.2 million in revenues, up from $36.6 million during the year-ago period and beating the average Wall Street estimate of $54.9 million. Consumables revenues were $49.7 million, instrument revenues were $10.4 million, and service revenues were $1.1 million.

"During the quarter, we had solid execution across all fronts demonstrating the strength of our business," 10x CEO and Cofounder Serge Saxonov said in a statement. "Our Chromium platform continues to see strong momentum with increasing publications and scientific discoveries coming out of our customers' labs."

He also mentioned that 10x began taking pre-orders for its new Visium Spatial Gene Expression solution in September and is "encouraged by the early interest in this product from both new and existing customers."

Following the completion of the company's IPO, he said, "we look forward to continuing our rapid pace of innovation to lead the transformation of biology in the coming decades."

On a conference call following the release of the financial results, 10x CFO Justin McAnear said consumables sales grew 86 percent year over year, instrument sales grew 13 percent year over year, and service revenue grew 80 percent.

On the call, Saxonov said the average annual consumables pull-through was around $150,000 per instrument. "It's an average," he said. "New customers take some time to ramp up and we've placed a lot of instruments out there in the field over the last year and couple of years. That, naturally, brings the average down." He added that pull-through in Asia-Pacific tended to be lower than in other regions.

The Pleasanton, California-based single-cell analysis company went public in September, raising $410.8 million in net proceeds.

10x's net loss for the quarter totaled $9.6 million, or $.33 per share, compared to a loss of $15.3 million, or $1.13 per share, in Q3 2018. The weighted average shares of common stock used to compute net loss per share was approximately 29.2 million, compared to approximately 13.6 million in Q3 2018.

The firm's R&D expenses doubled to $22.2 million from $11.1 million a year ago, driven by "higher investments in personnel, infrastructure, and supplies," McAnear said.

"We're investing pretty heavily," Saxonov added. The spending includes "existing products and existing applications but we're also looking at things much further out and across the spectrum of solutions for our customers."

SG&A expenses jumped 70 percent to $32.6 million from $19.1 million a year ago, due to increased hiring, increased facilities costs, and litigation.

As of Sept. 30, 10x had $427.4 million in cash and cash equivalents.

The firm said it expects full year 2019 revenues to be in the range of $238 million to $242 million, representing 63 to 65 percent growth, year over year.

In morning trading on the Nasdaq, shares of 10x were down less than 3 percent at $53.83.