10x Genomics, Inc. (TXG) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed outlook. Financial performance is stable, but growth is limited due to constrained capital expenditure and muted market conditions. The Atera launch is promising, yet its impact is delayed until 2027. Cost management is commendable, but inflationary pressures may affect margins. The Q&A reveals cautious optimism around AI and Atera, but lacks specifics on scaling and pricing strategies. Overall, the strategic plan and market conditions suggest a neutral impact on stock price, with no strong catalysts for significant movement in either direction.
Key Financial Performance
Revenue for Q1 2026 $150.8 million, representing a 9% growth year-over-year when excluding non-recurring settlement revenue from the prior year. This growth was driven by strong sales momentum and benefits from orders received late in Q4 2025 that shipped in early January.
Single Cell Consumables Revenue Increased by 6% year-over-year, supported by double-digit growth in reaction volumes. Flex Apex was the most popular assay by volume, driven by its strong performance on FFPE samples and cost-effectiveness for large cohorts.
Spatial Consumables Revenue Increased by 31% year-over-year, driven by Xenium consumables. This reflects strong momentum in spatial biology adoption.
Total Instrument Revenue Declined by 24% year-over-year. Chromium instrument revenue decreased by 12%, and Spatial instrument revenue decreased by 32%. This decline is attributed to customers delaying purchases in anticipation of the Atera launch.
Gross Margin 70% for Q1 2026, up from 68% in the prior year. The increase was primarily due to lower warranty costs and inventory write-downs, partially offset by a decrease in license and royalty revenue.
Total Operating Expenses Decreased by 15% year-over-year, primarily due to lower outside legal expenses and personnel costs. Excluding a one-time gain on settlement in Q1 2025, operating expenses decreased by 20%.
Cash, Cash Equivalents, and Marketable Securities $540 million at the end of Q1 2026, up $113 million year-over-year and $16 million sequentially. This reflects improved cash management and operational execution.
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Operating Highlights
Launch of Atera: Atera is a new instrument platform enabling Spatial whole transcriptome analysis with Single Cell sensitivity at scale. It addresses trade-offs in spatial biology, offering high throughput, specificity, and sensitivity. Early customer response has been highly positive, with pre-orders ahead of shipments in the second half of 2026.
Flex Apex: Flex Apex continues to drive double-digit growth in Single Cell consumable reaction volumes, unlocking new demand with accessible pricing.
Xenium: Xenium drives double-digit growth in Spatial consumables revenue, indicating strong momentum in spatial biology adoption.
Expansion in Addressable Market: Atera expands the addressable market across discovery research, translational research, and AI-driven science, enabling large-scale studies and virtual models of biology.
Geographical Revenue Growth: Revenue growth observed in Americas (9%), EMEA (16%), and APAC (5%) regions, excluding license and royalty revenue impact.
Revenue Growth: Q1 2026 revenue was $151 million, a 9% increase over Q1 2025 (excluding non-recurring settlement revenue).
Consumables Revenue: Total consumables revenue increased by 13%, with Single Cell consumables up 6% and Spatial consumables up 31%.
Gross Margin Improvement: Gross margin improved to 70% from 68% in the prior year, driven by lower warranty costs and inventory write-downs.
Operating Expense Reduction: Operating expenses decreased by 15%, primarily due to lower legal and personnel costs.
AI and Data Partnerships: Partnerships with organizations like Chan Zuckerberg Initiative and Bioptimus aim to leverage Atera and Xenium for large-scale biological data generation and AI model development.
Focus on Translational Applications: Increased emphasis on translational research, particularly in identifying drug targets and biomarkers, with technologies like Flex Apex and Atera enabling large-scale studies.
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Risk or Challenges
Challenging Capital Equipment Environment: Despite the strong demand for the Atera platform, the company acknowledges a challenging capital equipment environment, which could impact customer purchasing decisions and revenue generation.
Macroeconomic Uncertainty: Persistent challenges in the macroeconomic environment, including changes to government research funding, have created uncertainty and could affect the company's financial performance.
Customer Purchase Delays: The anticipation of the Atera platform launch has led some customers to delay purchases of current Spatial products, potentially impacting short-term revenue.
Production Capacity Constraints: Initial production capacity for the Atera platform will be limited in 2026, which could constrain revenue growth despite strong demand.
Regulatory and Legal Risks: The company faces risks related to patent litigation and regulatory compliance, which could result in financial and operational challenges.
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Guidance & Outlook
Revenue Outlook for 2026: The company expects 2026 revenue to be in the range of $600 million to $625 million, representing 0% to 4% growth over the full year 2025, excluding upfront revenue related to patent litigation settlements in 2025.
Product Launch Impact: The launch of Atera is expected to influence revenue patterns, with some customers delaying purchases of current Spatial products in anticipation of Atera. Initial shipments of Atera are expected to contribute meaningfully to revenue in the fourth quarter of 2026, though production capacity will be limited as production ramps up.
Quarterly Revenue Trends: First quarter revenue represents a higher proportion of the expected full-year revenue. Second quarter revenue is expected to step down sequentially from Q1 due to lower Spatial sales as customers wait for Atera. The third quarter is anticipated to be broadly similar to the second quarter, with meaningful contributions from Atera shipments expected in Q4.
Growth in Key Segments: Double-digit growth is expected in both Single Cell consumables reactions and Spatial consumables revenue for 2026.
Atera Platform Projections: Atera is projected to redefine spatial biology, enabling large-scale discovery and translational applications. It is expected to expand the addressable market across discovery research, translational research, and AI-driven science. Early customer demand is strong, with pre-orders ahead of initial shipments in the second half of 2026.
AI and Data Generation: AI is expected to drive exponential demand for high-quality biological data. Partnerships and initiatives, such as the Chan Zuckerberg Biohub's Virtual Biology Initiative and Bioptimus' STELA project, are expected to generate large-scale data, reinforcing the demand for 10x Genomics' platforms.
Translational Applications: Growing interest in translational applications is anticipated, particularly in later-stage drug development settings where biomarker strategies are essential. Atera is expected to enable larger studies with more information content per sample, supporting clinical evidence generation for diagnostic applications.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you talk about the early conversations regarding Atera, including customer interest and launch timing?
A:Serge Saxonov expressed excitement about Atera, noting that customer interest exceeded expectations. Demand for preorders has been strong across all market areas. The launch has been planned for a long time, and while it may affect customer order patterns for Spatial products, these effects are incorporated into the guidance. Existing Spatial products remain robust, and most customers deciding on Atera now won't receive instruments until 2027.
Q:What is your sense of the TAM for AI-related initiatives and how it might grow over time?
A:Serge Saxonov stated that AI is a structural tailwind for the business, with large models requiring high-quality data, which the company provides. AI is pervasive across customer segments and applications, driving projects and experiments. The AI wave is seen as a structural accelerant across the product line and applications.
Q:Are you anticipating any impact to gross margin from inflationary pressures or the Atera launch?
A:Adam Taich noted that inflationary pressures are being monitored, and margins are expected to remain in the mid-60s for the year. The Atera launch, weighted towards Q4, may cause slight margin pressure as instrument margins are lower than the standard portfolio, but overall confidence in mid-60s margins remains.
Q:Can you provide more detail on Spatial instrument revenue, including sequential decline and Atera placements?
A:Adam Taich mentioned a step down in Spatial instrument revenue from Q1 to Q2 and Q3, with approximately 40 Atera units expected to be sold between Q3 and Q4, mostly in Q4. These dynamics are factored into the guidance.
Q:What is the pricing strategy and positioning for Atera versus Xenium and the rest of the Spatial portfolio?
A:Serge Saxonov emphasized that Atera is the most significant launch in the company's history, designed to expand markets and remove constraints for Spatial users. While existing products like Xenium and Visium remain robust, Atera is expected to open new opportunities and applications. Pricing is aligned with enabling large market expansions.
Q:What is the outlook for OpEx given the year-over-year decline?
A:Adam Taich highlighted disciplined cost management, with OpEx down 20% year-over-year (excluding a one-time gain). OpEx is expected to remain roughly flat year-over-year, allowing flexibility for continued investment.
Q:How should we think about Spatial instruments going forward, especially with potential market freezing?
A:Adam Taich noted that Q1 Spatial instrument performance was influenced by anticipation of the Atera launch. While the macro backdrop remains constrained, enthusiasm for Atera is high, and customers are finding CapEx for the product. The timing of the launch aligns with customer budget cycles.
Q:What are the bottlenecks to scaling Atera production, and how quickly can you ramp up?
A:Serge Saxonov explained that Atera is a sophisticated instrument, and production is being scaled carefully and rigorously. The company feels good about production capacity for 2026 and plans to continue ramping into 2027.
Q:What pricing headwinds, if any, were experienced in Single Cell, and what is the outlook?
A:Serge Saxonov stated that pricing dynamics for Flex Apex were similar to Q4, with strong customer feedback and scaling volumes. Single Cell is on a strong trajectory, and the launch of Flex Apex is progressing well.
Q:What is the future of the Visium platform given the launch of Atera?
A:Serge Saxonov acknowledged a trend toward imaging-based platforms like Xenium and Atera but noted that Visium remains valued by customers for specific applications. While Atera may put pressure on Visium, it will continue to have a place in the portfolio and be supported.
Q:Does the Atera launch accelerate the decline in Visium usage, and can the launch be pulled forward?
A:Serge Saxonov noted that Atera will put pressure on Visium, but existing workflows and data preferences create stickiness for current products. The team is working hard to deliver Atera quickly but is being deliberate and rigorous in the process.
Q:What feedback have you received from biopharma partners regarding Atera's readiness for clinical trials?
A:Serge Saxonov reported encouraging feedback from biopharma, with Atera enabling massive scaling and opening translational applications. The platform is expected to be a significant driver in 2027 and beyond.
Q:Do you expect any Flex volumes to move to Atera, and what is the growth trajectory for Single Cell?
A:Serge Saxonov does not expect Flex volumes to move to Atera in the near term, as the products have different configurations and capabilities. Single Cell reaction growth is strong across multiple applications, and the future looks promising.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the total addressable market (TAM) for AI-related initiatives, bottlenecks in scaling Atera production, and exact pricing headwinds for Single Cell. Responses were often broad and lacked precise numerical data or timelines.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Apex
Bioptimus
Cell consumables
Human
Project
Single Cell
Spatial
advance
analysis collaboration
approach
biology scale
cell molecule
cell tissue
cohort study
collaborator
digit
evidence value
expectation
game
initiative
molecule cell
platform analysis
production
program
response
roadmap
sale momentum
scale resolution
segment
sensitivity scale
settlement period
slide
specificity
system
throughput
tool biology
trade offs
transcriptome
workflow
TXG Transcript
10x Genomics, Inc. (TXG) Q1 2026 Earnings Call Transcript
Unknown5-8
The earnings call presents a mixed outlook. Financial performance is stable, but growth is limited due to constrained capital expenditure and muted market conditions. The Atera launch is promising, yet its impact is delayed until 2027. Cost management is commendable, but inflationary pressures may affect margins. The Q&A reveals cautious optimism around AI and Atera, but lacks specifics on scaling and pricing strategies. Overall, the strategic plan and market conditions suggest a neutral impact on stock price, with no strong catalysts for significant movement in either direction.
10x Genomics, Inc. (TXG) Q4 2025 Earnings Call Transcript
Positive2-14
The earnings call indicates strong financial health with a $482 million cash reserve and a focus on product innovation and market expansion. The Q&A reveals confidence in spatial consumables and biopharma revenue growth, despite CapEx headwinds. The strategic focus on AI and translational research, along with a strong balance sheet, supports positive sentiment. The market cap suggests moderate stock volatility, leading to a predicted positive stock price movement of 2% to 8% over the next two weeks.
10x Genomics, Inc. (TXG) Presents at 44th Annual J.P. Morgan Healthcare Conference Transcript
Neutral1-12
10x Genomics, Inc. (TXG) Q3 2025 Earnings Call Transcript
Positive11-6
The company shows strong product development with new launches and acquisitions, optimistic guidance in spatial biology, and positive market trends. Despite cautious spending and macroeconomic uncertainties, management is confident in their leadership and growth potential, especially in China and Europe. The Q&A session highlighted enthusiasm for new products and strategic positioning against competitors. The market cap suggests moderate sensitivity, leading to a positive stock price prediction.
TXG Slides
TXG Report
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