10X Genomics ((TXG)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for 10X Genomics painted a picture of mixed sentiment. While the company celebrated notable achievements in consumables growth, particularly in the APAC region, and showcased promising product developments, these positives were overshadowed by a decline in instrument revenue and significant uncertainties surrounding U.S. research funding. The decision to withdraw full-year guidance further underscores the challenges faced by the company in the current economic climate.
Strong Consumables Revenue Growth
10X Genomics reported a 5% year-over-year increase in total consumables revenue, reaching $115.4 million. This growth was largely driven by an 18% rise in spatial consumables revenue, with Xenium consumables playing a pivotal role in this success.
Robust Demand in APAC
The APAC region demonstrated a robust 22% increase in revenue, fueled by strong consumable sales. This growth helped offset declines in other areas, highlighting the region’s importance to the company’s overall performance.
Cost Reduction Measures
In response to the challenging economic environment, 10X Genomics implemented cost-saving strategies, including an 8% reduction in its global workforce and significant cuts in non-headcount expenses. These measures are expected to reduce operating expenses by over $50 million by 2025 compared to 2024.
Positive Developments in Product Usage
The company reported robust year-over-year growth in Chromium reaction volumes, with Xenium consumable revenue and volume continuing to grow strongly, indicating positive traction in product usage.
Innovative Product Launches
Recent product launches, such as GEM-X technology and Visium HD, have resonated well with customers, reinforcing 10X Genomics’ leadership in single-cell and spatial biology.
Decline in Instrument Revenue
Instrument revenue saw a significant decline of 42% year-over-year, with Chromium instrument revenue down 25% and spatial instrument revenue down 49%, reflecting challenges in this segment.
U.S. Academic and Government Funding Pressures
The company faces significant uncertainty in U.S. academic and government research funding, leading to unpredictable customer purchasing behavior and reduced visibility on future outlooks.
Withdrawal of Full-Year Revenue Guidance
Due to the uncertainties in the funding environment, 10X Genomics withdrew its full-year revenue guidance, opting to provide only second-quarter guidance instead.
Challenges in EMEA Revenue
Revenue in the EMEA region decreased by 8%, attributed to challenging macroeconomic conditions that have adversely affected instrument sales.
Forward-Looking Guidance
During the first quarter of 2025, 10X Genomics reported total revenue of $155 million, including a $26 million gain from a settlement with Vizgen. Excluding this, revenue was $138 million, down 2% year-over-year. The company anticipates second-quarter revenue to be between $138 million and $142 million. Despite the challenges, 10X Genomics remains optimistic about the long-term growth potential of its products and market position.
In conclusion, the earnings call for 10X Genomics highlighted a mixed outlook, with strong consumables growth and innovative product launches being overshadowed by declines in instrument revenue and uncertainties in U.S. research funding. The company’s decision to withdraw full-year guidance reflects these challenges, yet there remains confidence in the long-term potential of its offerings.