10X Genomics (TXG) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 4% year-over-year and 9% sequentially to $153.1 million, driven by strong spatial consumables demand and improved net loss to $37.9 million from $62.4 million in Q2 2023.

• Operating loss narrowed to $41.7 million from $63.4 million year-over-year, reflecting lower personnel, R&D, and SG&A expenses.

• Free cash flow was positive for the quarter, with cash and equivalents totaling $380.1 million at quarter-end.

• Leadership changes include a new Chief Commercial Officer and incoming CFO, with commercial restructuring underway to drive growth and efficiency.

• Major product launches included Xenium Prime 5K and the announcement of the TenK10K project using GEM-X technology.

Financial highlights

• Total revenue for Q2 2024 was $153.1 million, up 4% year-over-year; consumables revenue rose 10% to $123.4 million, with spatial consumables up 150% to $29.3 million and Chromium consumables down 7% to $94.1 million.

• Instrument revenue declined 23% to $23.9 million, with Chromium instruments down 32% and spatial instruments down 17% year-over-year.

• Services revenue increased 74% to $5.9 million, mainly from more Chromium service contracts.

• Gross profit was $104.2 million (68% margin), operating loss was $41.7 million, and net loss was $37.9 million, all improved from the prior year.

• Operating expenses decreased to $146.0 million, with R&D at $62.9 million and SG&A at $83.0 million, both down from the prior year.

Outlook and guidance

• Full-year 2024 revenue guidance lowered to $640–$660 million, reflecting 3%–7% growth over 2023, due to macroeconomic headwinds and commercial restructuring.

• CapEx headwinds and elongated sales cycles expected to persist, especially impacting instrument sales.

• Capital expenditures anticipated at $15–$20 million over the next 12 months.

• Cash flow positivity is expected to continue, with existing liquidity covering needs for at least the next 12 months.

• Q3 and Q4 are expected to follow similar seasonality as 2023, with roughly equal year-over-year growth rates.