10X Genomics (TXG) Q2 2024 earnings summary

Executive summary

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

• Operating expenses declined 10% year-over-year to $146 million, reflecting lower R&D, SG&A, and stock-based compensation.

• Gross margin remained stable at 68%, with cost of revenue up 4% due to higher manufacturing and warranty costs.

• Cash and equivalents plus marketable securities totaled $380.1 million at quarter-end.

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

Financial highlights

• Consumables revenue rose 10% year-over-year to $123.4 million, with spatial consumables up 150% to $29.3 million, while Chromium consumables revenue was $94.1 million, down 7% year-over-year but up 12% sequentially.

• Instrument revenue fell 23% to $23.9 million, with both Chromium and Spatial instruments impacted by CapEx constraints.

• 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.

• Q2 net loss per share was $0.32, compared to $0.53 in Q2 2023.

Outlook and guidance

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

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

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

• Cash flow positivity is expected to continue, with $15–$20 million in capital expenditures anticipated over the next 12 months.

• Existing liquidity expected to cover needs for at least the next 12 months, but additional funding may be sought if required.