Xenium continues to drive growth with increasing utilization per instrument and positive customer feedback on data quality and ease of use. However, uncertain funding environments are impacting customer spending behavior, leading to delays in projects and heightened price sensitivity. Despite challenges, single cell and spatial research tools remain essential for scientific progress.
New product launches like Visium HD 3 Prime and Flex v2 are well-received by customers, enhancing capabilities for spatial and single cell analysis. Future innovations, including Visium HD XL and Xenium RNA plus protein, aim to provide deeper insights from complex tissue samples. The company remains focused on expanding technology leadership and unlocking high-value applications.
Collaborations with research institutions like the Genome Institute of Singapore and Xaira Therapeutics demonstrate the use of Xenium in large-scale studies for drug target discovery and AI model training. The company’s products, like Chromium Universal 5 Prime assay, are instrumental in supporting virtual cell challenges and advancing computational models of biology for drug discovery and patient response simulation.
Serge Saxonov emphasizes the importance of understanding how cells work for advancing biology, health, and disease research. Computational modeling of cells and perturbations using AI can revolutionize drug discovery, patient response simulations, and reduce experimental trial and error. The company remains focused on cost management and cash generation to protect its strong balance sheet. In pursuit of operational efficiency and long-term growth, a definitive agreement to acquire Scale Biosciences was announced, enhancing innovation within single cell analysis. The acquisition aims to broaden access to powerful and affordable single cell analysis for researchers worldwide, strengthening capabilities in delivering high-quality multiomic data. Financial results for the second quarter showed an increase in total revenue to $172.9 million, with consumables revenue at $122.2 million, down 1%. Instrument revenue decreased, but services revenue increased by 47%. Geographically, revenue performance varied, with ongoing CapEx challenges globally. Gross profit for the quarter was $125.1 million, with a gross margin of 72%. Operating income was $30.1 million, and net income was $34.5 million. The outlook for the third quarter anticipates revenue in the range of $140 million to $144 million, with an acquisition of Scale Biosciences for $30 million in cash and stock. The company remains committed to strategic priorities, innovation, and long-term growth, navigating market uncertainties with agility and responsiveness. The team has shown strength and resilience in the face of adversity, staying focused and creative in pursuing their mission. Despite challenges, there is optimism among customers, but caution remains due to slow fund disbursement. Uncertainty in budget allocation and policy changes continue to impact spending decisions. The recent acquisition of Scale will drive single cell technology to higher scales and lower costs, aligning with the company’s vision for the future. Serge Saxonov clarifies that the Droplet-based architecture is not being replaced, as instruments are crucial for workflow precision and data quality. Integrating Scale technology will enhance scaling capabilities. Revenue impact will be minimal in the short term, with the focus on portfolio integration for long-term benefits.
Madeline Mollman questions the impact of lower-cost products on single cell consumables revenue. Serge Saxonov explains ongoing product transitions, such as the shift to GEM-X architecture, and the positive response from customers. Lower prices are expected to drive higher volumes over time, despite current challenges in the macro environment.
Serge Saxonov discusses the maturity of the Xenium sales force in Europe, noting improved execution and funnel management. However, challenges in funding lead to longer closing times for opportunities. The team is adding more opportunities to the funnel, but customers are facing funding restrictions and scrutiny, impacting sales closure. The company is optimistic about the platform’s performance and customer feedback. Scale technology was chosen for its unique features like combinatorial indexing and quantum barcoding. The company does not expect significant additional R&D costs for integrating Scale into their portfolio. China saw a $4 million pull forward in sales, attributed to customer demand ahead of potential tariffs. The company has made changes to their go-to-market model in China, resulting in improved performance. The settlement with Bruker included a $68 million cash payment, with $27.3 million recognized in revenue in Q2. Ongoing royalties from Bruker are not included in the Q3 guidance. The company reported a roughly 40% growth in China, excluding customer-driven acceleration due to tariffs. The team is executing well and expects a one-quarter dynamic from an inventory perspective in Q3. Order patterns in Q3 are consistent with Q2, showing strength in spatial consumables and reaction volume growth. Margin has held fairly stable, with customers waiting for budget clarity for next year and funds to be disbursed. Placements between Visium, Xenium, and Chromium in Q3 are expected to be similar to Q2, with a historical uptick in CapEx from Q3 to Q4. The company’s Xenium sales team remains strong with disciplined pipelines. 10x Genomics discussed offering discounts on Chromium instruments due to challenging customer purchasing environments. They plan to continue working with customers to maintain discounts as long as necessary. These interactions are beneficial to 10x economically. The call concluded with a positive outlook. The Motley Fool article highlighted “Double Down” stock recommendations for Nvidia, Apple, and Netflix, showcasing impressive returns. The Motley Fool encourages readers to conduct their own research.
Read more at Yahoo Finance: 10x Genomics (TXG) Q2 2025 Earnings Transcript