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10x Genomics, Inc. (TXG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $154.9M; excluding $16.8M license and royalty revenue from a litigation settlement, core revenue was $138.1M (down 2% YoY). Gross margin was 68% (64% ex-settlement). Net loss narrowed to $34.4M and EPS to -$0.28. Management emphasized consumables strength and instrument weakness .
  • The company withdrew FY 2025 revenue guidance (previously $610–$630M) and moved to quarterly guidance given uncertainty in U.S. academic/government funding; Q2 2025 revenue guidance is $138–$142M (≈1% sequential growth at midpoint, ex-settlement) .
  • Cost actions: >$50M 2025 OpEx reduction plan and ~8% workforce reduction; severance costs estimated at $5.5–$6.5M, expected to be recognized in Q2 and paid by end of Q3 .
  • Key stock reaction catalysts: withdrawal of annual guide and pivot to quarterly guidance, visible instrument demand headwinds, litigation-related one-time revenue/licensing, and announced cost reduction program .

What Went Well and What Went Wrong

What Went Well

  • Consumables resilience: Total consumables revenue rose to $115.4M (+5% YoY), with Spatial consumables up 18% (Xenium strength), and Chromium consumables approximately flat . “We’re continuing to see increased Xenium usage, demonstrated by strong growth in Xenium consumable revenue and volume” .
  • Margin improvement and cost discipline: Gross margin improved to 68% (64% ex-license), and OpEx fell 6% YoY to $144.8M, aided by a $9.2M gain on settlement; stock-based comp declined YoY .
  • Product roadmap/customer enthusiasm: 2025 AGBT unveiled innovations across all three platforms (plate-based GEM‑X Flex, Visium HD advancements, Xenium RNA+Protein). CEO: “Customer enthusiasm and improving consumables trends reinforce our conviction…” .

What Went Wrong

  • Instrument weakness: Total instrument revenue fell to $14.8M (-42% YoY); Chromium instrument revenue -25% (lower ASPs) and Spatial instruments -49% (fewer units) .
  • Macro/NIH uncertainty reduced visibility: Management withdrew FY guidance; ~40–50% of revenue exposed to U.S. academic/government funding, making customer purchasing behavior unpredictable .
  • Americas softness vs APAC strength: CFO said Americas decreased 7% (to ~$73.8M ex-license), while APAC rose 22% to $32.4M; press release reported total Americas $90.6M including U.S. and settlement-related license/royalty, highlighting mix and disclosure differences .

Financial Results

Headline financials (reported)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$141.006 $151.654 $165.021 $154.883
Gross Margin (%)66% 70% 67% 68% (64% ex-license)
Operating Loss ($USD Millions)$(61.498) $(41.485) $(49.839) $(39.328)
Net Loss ($USD Millions)$(59.949) $(35.753) $(49.028) $(34.358)
EPS (Basic/Diluted) ($USD)$(0.50) $(0.30) $(0.40) $(0.28)

Notes:

  • Q1 2025 revenue includes $17.060M license/royalty; ex-settlement revenue was $138.1M (-2% YoY) .
  • Q1 2025 gross margin was 64% excluding license/royalty revenue .

Segment breakdown (Q1 2025 vs Q1 2024)

SegmentQ1 2024 ($USD Thousands)Q1 2025 ($USD Thousands)
Instruments – Chromium$7,850 $5,913
Instruments – Spatial$17,603 $8,902
Total Instruments$25,453 $14,815
Consumables – Chromium$83,927 $84,109
Consumables – Spatial$26,408 $31,247
Total Consumables$110,335 $115,356
Services$5,217 $7,652
Products & Services Revenue$141,005 $137,823
License & Royalty Revenue$1 $17,060
Total Revenue$141,006 $154,883

Geography (Q1 2025 vs Q1 2024)

GeographyQ1 2024 ($USD Thousands)Q1 2025 ($USD Thousands)
United States$75,637 $86,818 (includes license/royalty)
Americas ex-U.S.$3,993 $3,752
Total Americas$79,630 $90,570
EMEA$34,721 $31,895
China$13,924 $16,883
APAC ex-China$12,731 $15,535
Total APAC$26,655 $32,418
Total Revenue$141,006 $154,883

KPIs and cost items

KPI/Cost ItemQ1 2024Q1 2025
Cash & Equivalents + Marketable Securities ($USD Millions)—$426.9
R&D Expense ($USD Thousands)$68,638 $64,245
SG&A Expense ($USD Thousands)$85,774 $89,728
Gain on Settlement ($USD Thousands)—$(9,200)
Stock-based Compensation – Total ($USD Thousands)$36,129 $31,076
Stock-based Compensation – Cost of Revenue ($USD Thousands)$2,033 $2,481
Stock-based Compensation – R&D ($USD Thousands)$16,888 $14,106
Stock-based Compensation – SG&A ($USD Thousands)$17,208 $14,489

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$610–$630M Withdrawn Lowered (withdrawn)
RevenueQ2 2025—$138–$142M; ~1% sequential growth at midpoint (ex-license) New quarterly guide
Operating ExpensesFY 2025—>$50M reduction vs 2024 Lowered
WorkforceFY 2025—~8% global reduction Implemented
Severance (cash)Q2–Q3 2025—$5.5–$6.5M; recognized in Q2, paid by end of Q3 New one-time cost

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI/large-scale single cellEmphasis on democratizing single-cell pricing; GEM‑X Flex/Universal Multiplex launches ; Billion Cells Project partner noted in Q4 CZI Billion Cells collaboration reinforced; Arc Institute Virtual Cell Atlas partnership leveraging Chromium Flex Strengthening adoption and partnerships
Product performance (Xenium, Visium, Chromium)Spatial consumables up; Xenium 5K adoption; Visium HD momentum ; Spatial consumables +61% in Q4 Xenium consumables growth; instruments pressured; Chromium reactions up double-digit YoY; plate-based GEM‑X Flex, RNA+Protein multiomics roadmap Mixed: consumables strong, instruments weak
Supply chain & tariffsNot a major constraint highlighted in Q3/Q4; mix-driven margin variability Limited reliance on China in supply chain; manufacturing in U.S. and Singapore; revenue risk concentrated in China (~10% of 2024) with minimal COGS impact Manageable risk; mitigation plans in place
Macro/NIH fundingQ3: cautious spending; reorg disruptions; guidance cut ; Q4: FY 2025 guide assumed mid-single digit NIH weakness; indirect cost cap uncertainty not included FY guide withdrawn; ~40–50% exposure to U.S. academic/government; quarterly guide provided Visibility reduced; cautious stance
Regional trendsQ3: Americas down; EMEA/APAC up ; Q4: Americas -16%, EMEA -2%, APAC -5% APAC +22% to $32.4M; EMEA -8% to $31.9M; Americas down (ex-license) APAC strength; U.S./EMEA pressure
Cost actionsQ3: commercial reorg ongoing ; Q4: disciplined OpEx management >$50M OpEx reduction; ~8% RIF; severance $5.5–$6.5M Accelerated cost control

Management Commentary

  • CEO strategic focus: “Customer enthusiasm and improving consumables trends reinforce our conviction... we are temporarily moving to quarterly guidance until we see greater visibility return... prioritizing cost reduction initiatives to protect our strong balance sheet.”
  • Macro stance: “Approximately 40% to 50% of our revenue is supported by U.S. academic and government research funding... we are withdrawing our full year revenue guidance” .
  • Product conviction: “We saw solid signs of single cell elasticity, demonstrated by robust year-over-year growth in Chromium reaction volumes... strong growth in Xenium consumable revenue and volume” .
  • Societal/NIH context: “Recent U.S. federal actions are massively hampering the ability of our universities and our government agencies to pursue their goals of advancing science... Instead, they’re severely undermining these enterprises” .

Q&A Highlights

  • Guide withdrawal rationale: The range of possible annual outcomes is unusually wide due to NIH/macros; quarterly guide gives transparency; will reinstate annual guide when visibility improves .
  • Instruments vs consumables: Q2 expected to resemble Q1 (pressure on CapEx; consumables hold up); no evidence of NIH pull-forward in Q1 .
  • Regional/geography: APAC strength driven by robust demand and Japan’s direct model change; Americas and EMEA pressured; Europe CapEx team now fully staffed .
  • Tariffs: Minimal COGS impact with dual manufacturing (U.S./Singapore); revenue risk centered on China (~10% in 2024); mitigation underway .
  • Cost program: >$50M OpEx reduction in 2025 (~half headcount, half discretionary); severance $5.5–$6.5M paid by end of Q3 .

Estimates Context

  • Q1 2025 vs consensus: Revenue $154.883M vs $132.510M*; ex-license/royalty $138.1M still above consensus. EPS -$0.28 vs -$0.468* — both constitute beats. EBITDA -$40.506M vs -$47.279M* — better than consensus .
  • Q2 2025 outlook vs consensus: Guidance $138–$142M vs revenue consensus $139.513M* — essentially inline at midpoint; EPS consensus -$0.315*; company did not provide EPS guidance .
  • FY 2025: Street revenue consensus $629.926M*; company withdrew FY guide due to funding uncertainty .
MetricQ1 2025 Consensus*Q1 2025 ActualSurprise
Revenue ($USD Millions)$132.510*$154.883 Beat
EPS ($USD)$(0.468)*$(0.28) Beat
EBITDA ($USD Millions)$(47.279)*$(40.506) Better than consensus
MetricQ2 2025 Consensus*Company Guidance
Revenue ($USD Millions)$139.513*$138–$142

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Core demand intact; consumables mix bolstered margins and stabilized revenue, but instrument demand remains cyclical and macro-sensitive — expect quarterly, not annual, guidance until funding visibility returns .
  • The litigation settlement created a one-time revenue/licensing lift and aided margins; ex-settlement metrics present a cleaner view of underlying trends (revenue $138.1M, GM 64%) .
  • APAC strength and Japan go-direct support regional diversification; U.S. academic/government exposure (~40–50%) is the key macro swing factor for instruments and larger consumable projects .
  • Cost program (> $50M OpEx reduction, ~8% RIF) provides downside protection and extends cash runway ($426.9M cash/securities). Near-term severance ($5.5–$6.5M) is a Q2/Q3 headwind but largely one-time .
  • Product roadmap (plate-based GEM‑X Flex, Visium HD 3’, Xenium RNA+Protein) plus AI collaborations (CZI Billion Cells, Arc Institute) should catalyze multi-year consumables growth and deepen biopharma adoption .
  • Estimate implications: Q1 revenue/EPS beats vs Street; Q2 guide effectively inline. Given instruments weakness and macro risk, Street models may shift toward lower instrument assumptions and stronger consumables mix .
  • Trading lens: Narrative likely hinges on quarterly delivery vs guide, consumables momentum, progress on cost actions, and signals on NIH funding/tariffs — catalysts include quarterly prints, product launches, and any funding clarity .