10x Genomics Experiences Mixed Q3 Results but Eyes Growth

10x Genomics Reports Third Quarter Performance

10x Genomics Inc (NASDAQ: TXG) has recently announced its preliminary financial results for the third quarter. Despite facing some challenges, CEO Serge Saxonov remains optimistic about future growth opportunities.

Financial Overview

The third-quarter revenue reached approximately $151.7 million. This figure fell short of analysts' expectations, as they had projected revenue of $162.245 million, marking a slight decrease of 1% from the same period last year. Saxonov acknowledged that the company faced hurdles in meeting revenue targets.

Instrument and Consumables Sales Declines

Instrument sales, a crucial component of 10x Genomics’ offerings, saw a significant decline, dropping by 46% to $19.1 million. The decline was attributed to a reduction in capital spending by customers, particularly affecting their sales in the Americas. In contrast, consumables sales managed to grow by 10%, reaching an impressive $126.2 million for the quarter.

Regional Performance Insights

The revenue trends varied across different geographic markets. While the Americas faced an 11% decline, 10x Genomics experienced robust growth in the EMEA and APAC regions. EMEA's revenue rose by 18% to $37.9 million, and APAC revenue increased by 15% to $26.0 million, showcasing the potential for growth outside of the Americas.

Future Outlook and Guidance

Looking ahead, the company is set to provide full-year guidance during its earnings call in late October. It had previously revised its sales guidance for the fiscal year to a range of $640 million to $660 million. This update reflects a strategic adjustment from an earlier estimate of $670 million to $690 million. The current consensus among analysts stands at $648.21 million for the year.

Cash Reserves and Market Performance

As of the end of September, 10x Genomics reported approximately $398 million in cash and cash equivalents. However, following the earnings report, TXG stock has experienced a notable decline, with shares trading down 26.20% at $15.35 in the premarket session following the announcement.

Ceo's Perspective

In addressing the company's performance, Saxonov emphasized the importance of recent modifications made to their commercial processes. He noted that these changes, aimed at enhancing engagement with customers, were more disruptive than anticipated, particularly impacting instrument sales in the Americas.

Conclusion

While the third-quarter results for 10x Genomics have raised concerns among investors, the company maintains a forward-looking stance. The growth in consumables and services, along with the positive performance in international markets, provides a silver lining amidst challenging sales figures. As they prepare to communicate a clearer outlook, investors and industry watchers will be eager to see how the company navigates the remainder of the fiscal year and beyond.

Frequently Asked Questions

What were the main results reported by 10x Genomics for Q3?

The company reported approximately $151.7 million in revenue, which was below expectations.

How did instrument sales perform during the quarter?

Instrument sales decreased significantly by 46%, totaling $19.1 million due to cautious spending by customers.

What growth did consumables experience?

Consumables sales grew by 10%, generating $126.2 million in revenue during the quarter.

What was the outlook for 10x Genomics in the upcoming period?

The company plans to provide further guidance during an upcoming earnings call, setting expectations between $640 million and $660 million for the fiscal year.

How has the stock reacted to the latest earnings report?

The stock of 10x Genomics has fallen by 26.20%, trading at $15.35 during premarket hours following the report.

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