10x Genomics, Inc. (TXG)·Q2 2025 Earnings Summary

Executive Summary

• Reported revenue $172.9M; excluding $27.3M patent settlement, underlying revenue $145.6M (-5% YoY) as instrument demand remained weak; GAAP diluted EPS $0.28 versus loss last year; gross margin 72% (67% ex-license/royalty) .
• Consensus expected revenue ~$139.5M and EPS -$0.315; TXG delivered a significant beat on both revenue and Primary EPS, driven by settlement-related license revenue and resilient consumables; underlying revenue also beat Q1 guidance midpoint ($140M) excluding settlement, aided by ~$4M China pull-forward from tariff timing . Values retrieved from S&P Global.*
• Guidance: Q3 2025 revenue $140–$144M, reflecting the ~$4M China pull-forward; management expects continued CapEx caution and consumables strength, with Q3 broadly in line with Q2 excluding pull-forward .
• Strategic catalysts: settlement with Bruker (cash $68M; $27.3M recognized in revenue; ~$40.7M gain in OpEx), definitive agreement to acquire Scale Biosciences ($30M upfront plus milestones), and product launches (Visium HD 3’ shipping; Xenium Protein launched Aug 19) .

What Went Well and What Went Wrong

What Went Well

• Positive GAAP profitability: operating income $30.1M (vs. loss -$41.7M YoY) and net income $34.5M (vs. loss -$37.9M YoY); cash and marketable securities rose to $447.3M (+$20M QoQ) .
• Consumables resilience and spatial momentum: spatial consumables +24% YoY to $36.4M; services +47% YoY to $8.5M; management emphasized “robust adoption” and “superior data quality” fueling Xenium utilization .
• Strategic progress: Bruker settlement and ongoing royalties (not in Q3 guide) plus Scale Biosciences acquisition to accelerate single-cell scale and affordability; “key inventions...will broaden the capabilities of our existing and future products” .
• Quote: “The second quarter unfolded largely as anticipated…we remain confident in the strength of our technology, the momentum behind our platforms and the significant long-term opportunity” — CEO Serge Saxonov .

What Went Wrong

• Underlying revenue down 5% YoY (ex-settlement), with instruments -39% YoY; Chromium instruments -35% YoY (discounting to navigate CapEx constraints), spatial instruments -42% YoY .
• Ongoing funding uncertainty: elongated grant disbursements, budget ambiguity, and institutional scrutiny continue to slow project starts and CapEx decisions; “we expect these uncertainties to continue impacting customer spending behavior” .
• Pricing pressure in single cell: reaction volumes up YoY and sequentially, but lower average reaction prices and discounts weighed on Chromium consumables and instrument ASPs .

Financial Results

Segment Breakdown

Geography KPIs

Consensus vs Actual (Q2 2025)

Values retrieved from S&P Global.*

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We’re focused on disciplined execution, and remain confident in the strength of our technology, the momentum behind our platforms and the significant long-term opportunity” — CEO Serge Saxonov .
• “APAC benefited from a temporary pull forward... approximately $4,000,000” — CFO Adam Taich .
• “We implemented strategic discounts... drove broader instrument adoption and an 11% increase in Chromium placements year over year” — CFO .
• “This acquisition [Scale Biosciences]... will broaden access to single cell analysis by making it more powerful, affordable, and accessible” — CEO .
• “Excluding settlement impacts, operating expenses were $135.7M; operating loss was $37.9M; net loss was $33.5M” — CFO .

Q&A Highlights

• Funding outlook: Management cited persistent caution on academic spending, slower grant disbursements, and day-to-day policy volatility impacting visibility and timing .
• China/tariffs: ~$4M Q2 pull-forward quantified; team close to customers, expectation of a one-quarter inventory effect with bounce back into Q4 .
• Pricing and instrument strategy: Ongoing discounting on Chromium instruments to overcome CapEx barriers, with accretive reagent commitments; reaction volumes rising despite lower ASPs .
• Scale Biosciences rationale: Complementary technology to push scaling and affordability; near-term revenue impact minimal; focus on integration into 10x roadmap .
• Xenium Europe execution: Full team in place; pipelines robust, but funding constraints elongate close cycles; utilization increasing across customer cohorts .

Estimates Context

• Q2 2025 vs consensus: Revenue $172.9M vs ~$139.5M estimate; Primary EPS $0.482 vs -$0.315 estimate — significant beat, aided by $27.3M license revenue and Bruker settlement; underlying revenue ($145.6M) also exceeded Q1 guidance midpoint . Values retrieved from S&P Global.*
• Forward look: Q3 2025 revenue guidance $140–$144M vs consensus ~$142.6M; guidance midpoint roughly aligns with Street and incorporates Q2 China pull-forward . Values retrieved from S&P Global.*

Key Takeaways for Investors

• The quarter delivered a clear beat on revenue and EPS, but underlying instrument demand remains weak; consumption-led strength (spatial, services) and settlement-related revenue drove margins and profitability .
• Near-term trajectory hinges on funding clarity and CapEx normalization; expect Q3 to be broadly in line with Q2 ex pull-forward, with continued discounting to seed placements .
• Strategic actions (Bruker settlement, Scale acquisition) and product launches (Visium HD 3’, Xenium Protein) expand monetization via license revenue and accelerate single-cell scaling, supporting medium-term mix shift to consumables and services .
• China strength looks mostly timing-related; monitor Q4 for normalization as tariff-driven pull-forward laps .
• Watch spatial utilization and Chromium reaction volumes as leading indicators; management cites elasticity from lower prices driving larger studies over time .
• Balance sheet strengthened (cash/marketable securities $447.3M); OpEx discipline ongoing; running royalties from settlements provide incremental tailwind not included in Q3 guide .
• Medium-term thesis: 10x remains well positioned at the intersection of single cell, spatial, and AI; execution on scaling, affordability, and biopharma adoption should drive steady consumables growth as funding headwinds ease .

Other relevant press releases: product/partner updates and acquisition

• Xenium Protein launched (RNA + protein in situ) to unlock multiomic analyses and streamline workflows .
• TISHUMAP partnership (A*STAR GIS) to analyze up to 2,500 FFPE clinical samples leveraging Xenium and AI for biomarker discovery .
• Scale Biosciences acquisition to integrate combinatorial indexing and quantum barcoding into 10x’s single-cell roadmap .

Footnote: Values retrieved from S&P Global.*