10X Genomics ((TXG)) has held its Q2 earnings call. Read on for the main highlights of the call.
10x Genomics’ latest earnings call struck a cautiously optimistic tone, balancing clear operational strengths with acknowledged near-term headwinds. Management emphasized robust consumables momentum, strong early demand for the new Atera platform, and expanding margins, while openly flagging pressure from a sharp drop in instrument sales and transition-related revenue timing challenges.
Revenue Trends and Guidance Raise
Q2 revenue came in at $151.0 million, or $149.4 million excluding a non-recurring settlement, reflecting roughly 3% year-over-year growth on an adjusted basis. On the back of this performance, management lifted its 2026 revenue outlook to a range of $610 million to $630 million, implying about 2% to 5% growth compared with last year after stripping out settlement noise.
Consumables Drive Core Growth
The core consumables business showed healthy demand, with total consumables revenue up 7% year-over-year. Single-cell consumables grew 3%, supported by double-digit growth in reaction volumes driven by Flex Apex, while spatial consumables surged 16%, led primarily by Xenium with additional contribution from Visium.
Atera Launch Sparks Strong Customer Demand
The commercial debut of Atera, the company’s spatial whole-transcriptome platform with single-cell sensitivity, generated what management described as extraordinary customer enthusiasm. Booked orders by the end of the quarter already far exceeded the previously signaled full-year target of 40 units, suggesting strong commercial traction despite near-term constraints on shipments.
Margin Expansion and Balance Sheet Strength
Profitability metrics improved notably, with gross margin rising to 74% from 72% a year ago and even more sharply when excluding prior-year settlement effects. The balance sheet remains a source of comfort for investors, as cash, cash equivalents and marketable securities climbed to $552 million, up $105 million year-over-year and $12 million sequentially.
Strategic M&A to Bolster Multi-omics Offerings
Management highlighted the acquisition of Proteintech Genomics as a key move to deepen its proteomics and broader multi-omics capabilities. The deal is positioned as an important building block in Atera’s roadmap, enabling future protein multi-omics integration and widening the range of applications across the company’s platform ecosystem.
Product and Technology Momentum Across the Portfolio
Beyond Atera, 10x Genomics pointed to continued product progress that is supporting adoption and feeding data-hungry AI research. Flex Apex is enabling larger perturbation and scale studies, GEM-X Multiome is enhancing joint epigenetic and gene expression measurements, and the new Catalyst Research Services are designed to provide Atera access and sample processing for customers.
Instrument Revenue Decline Weighs on Results
The bright spots were tempered by a sharp drop in instrument revenue, which fell 47% year-over-year. Chromium instruments declined 46% and spatial instruments 48%, driven by fewer units sold and customers partially pausing purchases of existing spatial systems as they prepare to transition toward Atera.
APAC Weakness on Tough Comparisons
Regional performance was mixed, with weakness centered in Asia-Pacific markets. APAC revenue declined 19% year-over-year, a slide management largely attributed to tough comparisons against the prior year, when roughly $4 million of China orders were pulled forward, creating a meaningful headwind in the latest quarter.
Atera Shipment Limits and Revenue Timing
While Atera order intake is already well ahead of initial expectations, production and shipment capacity remain constrained. The company reiterated that it expects to ship about 40 Atera instruments in 2026, heavily weighted toward the fourth quarter, which caps near-term revenue recognition from the platform despite the strong underlying demand.
Expected Q3 Revenue Dip Amid Spatial Transition
Management cautioned that total revenue is likely to see a modest sequential step-down from Q2 to Q3. The expected dip of a few million dollars is tied to customers moderating purchases of legacy spatial products ahead of receiving Atera, creating what management described as short-term cadence headwinds in the transition period.
Operating Expense Noise from Settlements
Operating expenses rose to $132.1 million from $95 million a year earlier, but the comparison is muddied by sizable patent litigation settlement gains in both periods. Adjusting for those gains, operating expenses were approximately flat year-over-year, underscoring that the apparent jump is largely driven by non-recurring items rather than a structural cost surge.
Consumables Pull-through Offers Upside, But Unclear
Executives suggested that consumable usage per Atera instrument could be materially higher, potentially around twice that of Xenium at maximum utilization. However, they stopped short of providing firm consumables revenue guidance tied to this pull-through for 2026, leaving investors with upside potential but limited near-term visibility into its exact financial impact.
Forward-Looking Outlook and Atera-Driven Inflection
Looking ahead, management’s raised revenue guidance reflects confidence in underlying consumables growth and Atera’s long-term potential. They signaled a modest revenue dip in Q3 followed by a significant step-up in Q4 as Atera shipments ramp, noting the platform’s high mass utilization potential and its role in powering AI-driven multi-omics research, even as production constraints temper the pace of near-term monetization.
10x Genomics’ earnings call painted a picture of a company in transition, with solid consumables growth and expanding margins offsetting pressure from declining instrument sales and regional softness. For investors, the key takeaway is that near-term volatility is being driven by timing and capacity issues, while the long-term story increasingly hinges on Atera adoption, multi-omics expansion, and the company’s ability to convert strong scientific demand into durable revenue growth.