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10x Genomics, Inc. (TXG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $165.0M, down 10% year-over-year and up 9% sequential; gross margin improved to 67% (vs 63% YoY), while net loss was $49.0M and EPS was $(0.40) .
  • Mix shift continued: spatial consumables rose 61% YoY to $35.8M and spatial instruments fell 51% YoY to $13.4M; Chromium consumables declined 17% YoY to $97.7M reflecting deliberate price investments to grow volumes .
  • FY 2025 revenue guidance: $610–$630M (0–3% YoY), implying double-digit growth in Chromium reactions and overall spatial revenue; management flagged NIH funding uncertainty (20–25% revenue exposure) and a potential un-modeled $10–$15M impact if an 8% NIH cut were fully implemented .
  • Commercial reorganization progress and major 2024 product launches (GEM-X, Visium HD, Xenium Prime 5K) underpin confidence; sequential Chromium reaction volumes increased in Q4, supporting the volume-for-price strategy and medium-term setup .

What Went Well and What Went Wrong

What Went Well

  • Spatial consumables strength: Q4 spatial consumables +61% YoY to $35.8M; full-year spatial consumables +104% YoY to $121.1M, indicating robust adoption of Visium HD and Xenium Prime 5K .
  • Gross margin expansion: Q4 gross margin rose to 67% (from 63% YoY), driven by product mix (fewer Xenium instruments); FY 2024 gross margin was 68% (vs 66% FY 2023) .
  • Strategic product launches and pricing: “Customers can now run million cell experiments… at a price point of $0.01 per cell with our GEM-X flex assay” and “sequential increases in reactions sold throughout the year,” validating demand elasticity and democratization strategy .

What Went Wrong

  • Instruments softness: Q4 instruments revenue fell 37% YoY to $24.4M, with spatial instruments down 51% YoY on fewer Xenium placements; sequential “budget flush” late in Q4 still left instrument mix a drag on gross margin it can swing with Xenium unit sales .
  • Chromium consumables pressure: Q4 Chromium consumables dropped 17% YoY to $97.7M due to lower reaction pricing; management guides 2025 Chromium consumables “modestly down” as lower-priced products become a bigger mix .
  • Macro/NIH uncertainty: Guidance embeds mid-single-digit decline in NIH-funded projects (~$7M impact), but does not include potential indirect cost cap effects; a fully-implemented 8% NIH cut could impact revenue by ~$10–$15M .

Financial Results

Core Metrics vs Prior Periods

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$184.0 $153.1 $151.7 $165.0
Gross Margin %63% 68% 70% 67%
Net Loss ($USD Millions)$(49.0) $(37.9) $(35.8) $(49.0)
EPS (Basic & Diluted)$(0.41) $(0.32) $(0.30) $(0.40)
Operating Loss ($USD Millions)$(55.2) $(41.7) $(41.5) $(49.8)

Segment Breakdown (Revenue)

Segment ($USD Millions)Q4 2023Q2 2024Q3 2024Q4 2024
Instruments - Chromium$11.15 $8.79 $7.64 $10.93
Instruments - Spatial$27.25 $15.06 $11.42 $13.43
Instruments - Total$38.40 $23.85 $19.06 $24.35
Consumables - Chromium$118.14 $94.11 $96.54 $97.74
Consumables - Spatial$22.17 $11.69 $29.67 $35.80
Consumables - Total$140.31 $123.36 $126.20 $133.53
Services$5.27 $5.89 $6.39 $7.14
Total Revenue$183.98 $153.10 $151.65 $165.02

Geographic Revenue (Customer Location)

Geography ($USD Millions)Q4 2023Q2 2024Q3 2024Q4 2024
United States$99.32 $89.67 $84.72 $84.29
Americas (ex-US)$4.52 $3.42 $3.10 $2.94
EMEA$50.59 $37.36 $37.85 $49.83
China$11.75 $13.74 $15.03 $14.61
APAC (ex-China)$17.80 $8.91 $10.95 $13.36
Total APAC$29.55 $22.65 $25.98 $27.97
Total Americas$103.84 $93.09 $87.82 $87.22
Total Revenue$183.98 $153.10 $151.65 $165.02

KPIs

KPI202220232024
Cumulative Instruments Sold (Total)4,630 5,966 7,039
Chromium Instruments (Cumulative)4,411 5,180 5,808
Visium CytAssist Instruments (Cumulative)211 531 810
Xenium Instruments (Cumulative)8 255 421
Total Consumables Reactions (Annual)319,300 347,000 357,100
Chromium Reactions (Annual)290,900 312,500 310,900
Visium Reactions (Annual)28,300 29,300 35,400
Xenium Reactions (Annual)100 5,200 10,800

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024$640–$660M (Aug 2024) $595–$605M (Oct 2024) Lowered
Revenue (Actual)FY 2024—$610.8M Above Oct guide midpoint
RevenueFY 2025—$610–$630M; 0–3% YoY; midpoint implies double-digit growth in Chromium reactions and overall spatial revenue New
Gross MarginFY 2025—~similar to FY 2024; mix can swing with Xenium units Qualitative
Chromium ConsumablesFY 2025—Modestly down as lower-priced products become larger mix Lower
Spatial RevenueFY 2025—Double-digit growth (overall spatial) Raised (mix)
Xenium PlacementsFY 2025—Unit placements to grow YoY; dedicated capital equipment team ramping Raised
OpExFY 2025—Roughly flat YoY; disciplined spend; legal costs included Maintained
PacingFY 2025—Back-half weighted as commercial build completes by midyear Qualitative
NIH ExposureFY 2025—Guide embeds mid-single-digit decline in NIH-funded projects (~$7M); potential indirect cap impact ~$10–$15M not in guidance Risk flagged

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Single-cell pricing & volumeStrength in consumables; product launches; GM flat YoY at 68% Sales restructuring caused disruption; launched GEM-X Flex and Universal Multiplex; Chromium Xo intro Price per cell ~$0.01 via GEM-X flex; on-chip multiplexing reduced cost/sample; sequential increase in reactions in Q4; expects double-digit reaction growth in 2025 Pricing down, volumes up
Spatial adoption (Visium HD, Xenium 5K)Xenium Prime 5K launched; enhanced chemistry Visium HD shipped; portfolio expanded Spatial consumables +61% YoY; customer feedback “watershed moment”; cohort study interest rising Accelerating
NIH/macro—Lowered FY24 guide citing cautious spending and sales reorg disruption NIH exposure ~20–25% of revenue; guide embeds mid-single-digit decline ($7M); indirect cap could imply ~$10–$15M impact not in guide Heightened uncertainty
Commercial org—Major restructuring; disruption in Q3 Specialized teams (capital equipment, biopharma, emerging accounts); full force by midyear 2025 Improving execution
Gross marginGM 68% Q2 GM 70% Q3 (mix) GM 67% Q4 (mix, fewer Xenium instruments); FY GM 68% Stable; mix-sensitive
Biopharma mix——Currently ~15–20%; ambition to reach ~50% over time; sequential improvement in Q4 as new team onboarded Strategic focus

Management Commentary

  • Prepared remarks emphasized democratization: “Customers can now run million cell experiments… at a price point of $0.01 per cell with our GEM-X flex assay” and “sequential increases in reactions sold throughout the year” .
  • Spatial innovation momentum: “Visium HD… enabling whole transcript… at single-cell scale resolution… new chemistry and software… Xenium Prime 5K… excellent per gene sensitivity, specificity and spatial fidelity” .
  • Strategic priorities for 2025: complete commercial transformation, drive volume via lower prices, expand in biopharma (targeting long-term ~50% of business), support translational cohort studies, and large-scale single-cell AI initiatives (e.g., Billion Cells Project) .
  • CFO on 2025 outlook: revenue $610–$630M, embeds mid-single-digit NIH decline (~$7M), spatial double-digit growth, Chromium consumables modestly down, gross margin roughly similar to FY 2024; back-half weighted as hiring completes .

Q&A Highlights

  • NIH funding uncertainty: Guide includes mid-single-digit decline ($7M); potential 8% NIH budget cut (via indirect cap) could be ~$10–$15M impact, not included; customer confidence and spending timing could be affected .
  • Chromium reaction growth: Sequential increase from Q3 to Q4; confidence in double-digit reaction growth in 2025 driven by lower prices, new configurations, new use cases, and large projects .
  • Gross margin cadence: Expect similar to FY 2024; mix (Xenium instruments) and competing/winning large projects can pressure margin; inflationary supply costs being mitigated by ops efficiencies .
  • Xenium placements and spatial: Expect 2025 growth in Xenium units; dedicated Xenium capital equipment team ramping; spatial business to grow double digits .
  • China exposure: Products inherently compatible with various sequencers; risk reasonably contained; China ~9% of sales; alternative sequencing in-country mitigates ILMN-specific risks .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable at time of this analysis due to data access limitations; we cannot formally assess Q4 revenue/EPS vs consensus or quantify a beat/miss. As a result, estimate comparisons are not shown, and near-term estimate revisions should be monitored once consensus data is retrievable (S&P Global).

Key Takeaways for Investors

  • Spatial momentum offsets instrument headwinds: Strong spatial consumables growth and improving gross margin set a constructive mix backdrop; watch Xenium unit cadence—more units could pressure margin short-term but expand installed base .
  • Volume-for-price strategy is working: Sequential reaction increases validate demand elasticity; expect continued ASP pressure with lower-priced GEM-X, but broader usage should underpin medium-term growth .
  • 2025 guide is conservative and back-half weighted: 0–3% growth with spatial double-digit growth and Chromium reactions up; near-term execution hinges on completing commercial build by midyear .
  • NIH policy is the swing factor: Embedded mid-single-digit decline ($7M) with un-modeled indirect cap risk of ~$10–$15M; funding clarity is a major stock catalyst—monitor policy outcomes and academic budget behavior .
  • Biopharma expansion is a structural thesis: Dedicated org and maturing product capabilities (FFPE compatibility across platforms) support mix shift toward translational and clinical applications over time .
  • Watch product-cycle and cohort study pipeline: Visium HD and Xenium Prime 5K feedback is strong; large-scale single-cell projects (e.g., Billion Cells Project) could become multi-quarter drivers; timing may affect margin and revenue pacing .
  • Balance sheet strength for execution: Cash and marketable securities of $393.4M provide flexibility to invest through macro volatility and legal costs while driving efficiencies .

Notes and cross-references:

  • CFO commentary on FY 2024 R&D expense indicates $254.7M vs press release $264.7M; this discrepancy suggests possible misstatement or differing classifications; we reference the filed 8-K totals for formal reporting and flag the difference from call remarks .
  • Operating loss and EPS include stock-based compensation; Q4 SBC totaled $32.5M; FY SBC $140.7M; legal expenses were a notable SG&A driver in Q4 and FY .