10x Genomics, Inc. (TXG) Q3 2026 Earnings Report, Transcript and Summary

Hello, everyone. Thank you for joining us, and welcome to the 10x Genomics Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Cassie Corneau, Senior Director and Head of Investor Relations and Strategic Finance. Please go ahead.

Thank you, and good afternoon, everyone. Earlier today, 10x Genomics released financial results for the third quarter ended September 30, 2026. If you have not received this news release or would like to be added to the company's distribution list, please send an e-mail to investors@10xgenomics.com. An archived webcast of this call will be available on the Investor tab of the company's website, 10xgenomics.com, for at least 45 days following this call. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties and factors that could cause results to differ appears in the press release 10x Genomics issued today and in the documents and reports filed by 10x Genomics from time to time with the Securities and Exchange Commission. 10x Genomics disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. Joining the call today are Serge Saxonov, our CEO and Co-Founder; and Adam Taich, our Chief Financial Officer. We will host a question-and-answer session after our prepared remarks. We ask analysts to please keep to one question so that we may accommodate everyone in the queue. With that, I will now turn the call over to Serge.

Thanks, Cassie, and good afternoon, everyone. Revenue for the third quarter was $151 million, up 1% year-over-year. The biggest highlight was the start of commercial shipments of Atera. Enthusiasm for the platform has continued to build, and we're incredibly excited to be putting instruments in customers' hands. The rest of the business also performed well, driven by continued strength in consumables. Adam will cover the financial results and outlook in more detail. Now stepping back, it's worth reflecting on this remarkable point in time as progress in AI is reshaping so much of the world. Many believe that AI's greatest promise is in accelerating science and advancing human health. We agree, and the key bottleneck is the data. Biology is incredibly complex. Capturing that complexity requires measuring biological systems at massive scale and high resolution. It requires measurements of molecules, cells and tissues across vast numbers of samples, conditions and context. This is precisely why we started 10x and why we have built our single cell and spatial technologies. And now as biology is entering this new era of AI and data maximalism, our business is positioned incredibly well to benefit and to be the key enabler of progress going forward. The success we're seeing with Atera is a powerful demonstration of this trend. The platform delivers whole transcriptome spatial profiling with single cell sensitivity at high throughput. It brings together molecular, cellular and tissue biology on a single instrument. By delivering its incredible capabilities at scale, Atera is both perfectly suited and critically necessary for this new AI-driven era of biology. The extraordinary customer demand and momentum have continued to build since our last call. Our priority now is to ramp production, get instruments into customers' hands and help ensure their success. I've said before that we expected Atera to be the biggest product introduction in our history. And what we're seeing from customers is consistent with that expectation, whether judging by their enthusiasm for the platform, by the flow of orders or by the ambition of their plans. We're also encouraged by the strong interest in Catalyst Research Services, our internal service lab for running customer samples. In its first 5 months, more than 100 customers booked projects representing a wide variety of applications and use cases. We're seeing extensive demand for Atera across universities, academic medical centers and biopharma. Customers are preparing to use the platform to generate data for AI models, whether for basic science, translational research or drug development. In addition to training AI models, customers are planning to deploy Atera across a wide range of applications and fields, including population scale studies, cell and tissue atlasing, studies of disease mechanisms and biomarker discovery. Nearly all of the world's top 20 biopharma companies have now purchased Atera systems or services through Catalyst. As we mentioned previously, many pharmaceutical companies expect that spatial biology will fundamentally change how they approach drug discovery and development. We're hearing about applications across the entire drug development continuum from finding therapeutic targets to understanding mechanisms of action to assessing safety to predicting response in patients. For example, we now have a growing arsenal of revolutionary medicines for treating cancer. The critical challenge is that most patients develop resistance and the mechanisms are not well understood. Many leading researchers are now planning to use Atera to address this challenge because Atera can provide an unparalleled view of the underlying cancer biology and of on-treatment effects. We built Atera as a long-duration upgradable platform to keep expanding what's possible in spatial biology. Our road map includes onboard slide preparation automation to enable true sample-in, data-out capability. It also includes RNA-protein multiomics and base-by-base sequencing for in-situ mutation detection. Together, these capabilities will enable customers to answer an even broader range of biological questions. Turning to Single Cell. Our customers continue to adopt our platforms for larger, more ambitious studies. Flex Apex is enabling a new generation of this work, especially in biopharma and translational research. Our recently introduced whole blood workflows are bringing single cell into applications that would previously have been inconceivable. Customers have shared enthusiasm for their ability to access troves of archival blood samples for retrospective single cell data generation. For prospective studies, the workflow stabilizes samples and simplifies processing at the point of collection, enabling use across a variety of clinical collection settings while dramatically reducing sample variability. Ultimately, these improvements enable more complete and consistent data sets that are critical for AI and for clinically related applications. Our single cell solutions have long been at the epicenter of the perturbation experiments that are now fueling AI biology models. Furthermore, we're now seeing increasing demand for multimodal solutions driven by the value of measuring more biology from the same cell. And lately, we're seeing customers build up their infrastructure, investing in automation to expand the scale of these experiments. Our new Flex Apex CRISPR workflow builds on the scalability, robustness and sensitivity of Flex Apex for perturbation studies. Combined with our Proteintech Genomics panels, the largest single-cell protein panels available, researchers get the richest data per cell for model development. And our newest GEM-X Multiome configuration captures gene expression alongside the regulatory elements that control it. Taken together, we believe our menu of multimodal solutions delivers the best approach for generating valuable mechanistic data critical for drug target discovery and predictive models of biology. As the scale of data enabled by these products grows exponentially, analysis can become an even greater bottleneck. We see that as both a challenge and an opportunity. And with that in mind, this quarter, we announced Sentira, our new cloud analysis platform. Sentira is designed to help customers turn large complex biological data into experimental conclusions using agentic AI, all in a seamless integrated experience. Researchers can explore their results and iterate rapidly without having to build or manage the underlying computing infrastructure. We have announced the initial capabilities of the platform with a lot more to come in the future. Sentira Spatial uses NVIDIA-accelerated computing to reduce processing of Atera and Xenium data from hours to minutes. Sentira Single Cell brings agentic analysis to Chromium data powered by Anthropic's Claude. Researchers can ask questions in natural language, review proposed analyses and examine the methods and code behind the results in an editable notebook. Together, these capabilities give more scientists the computational power and analytical tools to turn increasingly complex data sets into biological understanding. And as we have said, in addition to being an accelerator of data analysis, AI represents a structural tailwind for the demand for our products. It is still very early days, but the effects of AI demand are being felt across many areas of our business. Today, most significant biological data generation efforts are conceived at least in part with the goal of training AI models. And when researchers set out to build AI models of biology, they usually think in terms of multiomics, single cell and spatial, which usually means our technologies. This is not surprising because as I mentioned earlier, we built our technologies precisely to measure biological systems comprehensively at massive scale and high resolution. Across different segments thought leaders are converging on the idea that we need large-scale data collection on an industrial scale. We have previously talked about some of the projects that have been publicly announced, such as the ones from Cancer Research Institute, ARC Institute and CZI Biohub. These efforts have all been progressing and scaling up. For example, recently, Biohub has been outlining its ambitions toward profiling hundreds of billions of cells to build predictive AI models of life. At the same time, governments across the world are looking to invest in sovereign AI capabilities in health care and biology. There is often a strong case to be made for training models based on unique samples and profiles of local populations. These plans naturally translate into mandates to collect multiomics, single cell and spatial data. We believe these priorities could support programs to generate large biological data sets and models around the world. In biopharma, there continues to be rapid growth in AI-focused investments. Much of the initial AI investment has focused on chemistry on designing and making molecules. As we have noted in the past, we believe the next arguably larger opportunity lies in understanding the biology, identifying new therapeutic targets and predicting how patients will respond to treatment. This requires a much deeper view of cells and tissues, and that is precisely the information our technologies enable customers to generate. We're seeing similar momentum among techbio companies, where we are the predominant vendor of choice for single cell and spatial data generation. This category is expanding beyond drug development companies to include diagnostics companies looking to use their large collections of patient samples to generate training data for AI models. While it's still very early, these developments strengthen our conviction that we are at the beginning of an exponential trend in the scale of AI-driven data generation. Finally, we're continuing to make progress with our clinical strategy. Our newly announced collaboration with Fred Hutch adds to the partnerships we have formed with some of the leading medical centers around the world. As a reminder, we're focused on generating evidence to establish the clinical utility of our single cell and spatial technologies in oncology and autoimmunity. Our team is also making strong progress standing up an internal CLIA lab with the goal of launching it next year. While these efforts are still early, we're encouraged by our learnings and by the potential of Single Cell and Spatial in patient care. So coming back to where we started. We're at the beginning of an era in which AI will bring extraordinary advances in biology, and our products are delivering the data that is necessary for that progress. In executing our company mission, we have spent more than a decade building the assets, capabilities and expertise to put us in a position to capitalize on the opportunities created by this era. And our strong financial profile gives us the ability to realize the full potential of these opportunities. We're excited for the road ahead. With that, I will now turn the call over to Adam.

Thanks, Serge. Unless otherwise noted, all growth rates referenced reflect year-over-year comparisons. Revenue for the third quarter was $150.7 million, representing 1% growth over the prior year period. Total consumables revenue was up 5%, with growth in both Single Cell and Spatial. Single Cell consumables revenue grew 1%, supported by double-digit growth in reaction volumes given strong demand for Flex Apex. Spatial consumables revenue grew 16%, driven primarily by Xenium consumables. It is especially encouraging to see Xenium continue to perform well even in anticipation of Atera. This demonstrates the strong momentum behind Spatial and reinforces our conviction in the opportunity for Atera. Total instrument revenue declined 43% with Chromium instrument revenue down 23% and Spatial instrument revenue down 57%, both primarily driven by a lower number of units sold. As anticipated, the decline in Spatial instruments reflects customers moderating purchases of our Visium and Xenium products in anticipation of Atera. Turning to the rest of the P&L. Gross margin increased to 75%, up from 67% in the prior year period. The increase in gross margin was primarily driven by lower inventory write-downs and changes in product mix. Total operating expenses were $129 million for the quarter as compared to $132.5 million in the prior year period. The decrease was primarily driven by lower personnel and lab equipment expenses, partially offset by higher litigation expenses. We ended the quarter with $576 million in cash, cash equivalents and marketable securities, up $94 million year-over-year and up $24 million sequentially. Turning to our outlook for the rest of the year. We are raising our full year outlook and now expect 2026 revenue to be in the range of $625 million to $635 million, up from $610 million to $630 million. Excluding nonrecurring revenue related to patent litigation settlements in both 2026 and 2025, this represents 4% to 6% growth over the full year 2025. The increase reflects our third quarter performance, stronger-than-anticipated spatial consumables and a higher Atera shipment outlook for the year. Our Atera production ramp is progressing well as we've leveraged our experience building complex instruments like Xenium. As a result, we now expect to ship approximately 50 Atera instruments by year-end, up from our previous expectation of approximately 40. Additionally, as Atera instrument shipments ramp in the fourth quarter, we expect gross margins to step down sequentially. Our disciplined focus on cash generation and expense management has strengthened our financial position, giving us even greater capacity to invest for growth and capitalize on the significant opportunities ahead. With that, I'll turn the call back to Serge.

Thanks, Adam. Before we open it up for questions, I want to thank the entire 10x team. Atera embodies so much of what makes this company special, the ambition to take on problems that seem out of reach, the persistence to work through them and the commitment to get the details right. Bringing it to life has drawn on talent and dedication from across the company, united by our mission to advance human health through a deeper understanding of biology. I'm incredibly proud of this team and grateful for everything you do. Seeing what we can accomplish together gives me even greater conviction in the future we're building. With that, we will now open up for questions. Operator?

[Operator Instructions] Your first question comes from the line of Tycho Peterson.

This is Lauren on for Tycho. I just have one around consumables. So they came in about 5% year-over-year this quarter and are averaging around 8% for the year. I guess what has to happen to get above 10% for consumables overall? Does that ultimately require single cell to accelerate? Or do you think spatial on its own can get return to double-digit growth, especially once Atera pull-through ramps?

Sure. Thanks, Lauren. Yes, I think the way that you -- you still want to answer the question on your own. I think continuing to drive the reaction volumes that we have and seeing price stabilize in single cell would certainly be one element of it. More than that, though, we feel extremely confident about the growth trajectory for our Spatial consumables business. So even with the Atera launch, which we had announced back in April and started shipping instruments in September, we still have quite a strong spatial consumables number for Q3. That momentum is still quite strong here going into Q4, and we're starting to ship Atera consumables here in Q4 as well. And so I think that gives us confidence in the future, and we're feeling really good about where we are in Spatial consumables and consumables overall going forward.

Your next question comes from the line of Kyle Mikson with Canaccord Genuity.

Just on the CapEx side of Spatial. So 50 Ateras by year-end, that's good to hear. And just talking to KOLs, it seems like you got a very small number out in the field maybe like 5 or less. So is 50 to -- I guess I'll call it 40 to 50 placements per quarter a good way to think about the ramp? Or could there be upside to that next year?

Kyle, thanks for the question. And yes, you're right. So like as we said, we expect to ship about 50 units by the end of this year. And there's a lot of work in terms of scaling up production, getting the sort of the manufacturing order and actually also getting the instruments to our customers, right, installing it, training customers, making them successful. And kind of as we extrapolate into next year, obviously, we've said before, demand is not the bottleneck. We have lots and lots of orders, but the, sort of, the production capacity and the installed capacity is going to be more of the binding constraint going into next year. We want to make sure that we are making our customers maximally successful. That's our North Star. And so as we kind of come out of this year, as we go into next year, kind of, thinking about 50 a quarter between those constraints is about the right number.

Your next question comes from the line of Subbu Nambi with Guggenheim Securities.

This is Thomas on for Subbu. The top 20 biopharmas that you noted using Atera, I guess just what share have bought their own system in terms of placing an order? And then can you just talk about the difference in utilization between this group and then those using CRS? For those using CRS, just what's holding them back before buying their own system?

Yes. No. So, I haven't broken out kind of the split between who is buying instruments and who is putting in orders through the CRS. And as far as the, kind of, the reasons, you have to remember that we just announced Atera back in April. This is a brand-new platform. No one was anticipating those capabilities. People are extremely excited about it. They have been -- as we've been, kind of, talking about, they've been collecting the budgets and putting in funding. At the same time, it makes sense that people would also want to test the system and test to see the data for themselves on their own kind of samples. Of course, it's a mix. But yes, overall, we're looking really good. The interest in both CRS and in purchasing their own instruments right out of the gate for a platform that no one was even aware of until just a few months ago is really, really remarkable.

Your next question comes from the line of Casey Woodring with JPMorgan.

This is Marta Zaremba on for Casey Woodring. So you mentioned strong Atera orders so far. So can you give us more color on the backlog for the instrument, both quantitative but also qualitative, perhaps on the types of customers that are ordering and really like the mix between and pharma? And any other color you can share.

Yes. No. Thanks for the question. We've said before, we don't really share our backlog numbers or our order numbers. And I would again kind of emphasize with Atera, especially the binding constraint here is not orders at all. It is kind of our scaling up of manufacturing operations and also our capacity to install and train customers. And that's going to be the case next quarter. It's going to be the case as we head into next year as well. As far as the question around kind of the mix, it's been a really healthy mix all across our customer base. We've mentioned before, and we've seen the pattern continue that there's, relatively speaking, more interest from biopharma when it comes to Atera, which is really encouraging. And it's also kind of across the ecosystem, big pharma and biotech and service providers as well. Very nice broad set of applications from like very basic science to, as I talked about extensively, applications for training AI models to a lot of translational research, like really looking at figuring out mechanisms of action, looking for drug targets, looking for biomarkers, seeing kind of response to therapy to be able to predict patient response. So really, really great reception from like the entire ecosystem.

Your next question comes from the line of Matt Larew with William Blair.

It's actually Christian on for Matt. Congrats on the Atera launch. Just recognizing that it's still like very early, wondering how -- since Atera is now finally in customers' hands, how has the initial like user experience compared with your internal expectations going into the launch? Wondering if you've learned any -- what are your learnings from the first installations and customer runs? And has there been any unexpected, whether it be like workflow challenges or areas where performance or usage actually exceeded internal expectations?

Yes. Good question, Christian. So yes, a couple of points to make here. First of all, as you pointed out, we're very, very early in this launch. We started shipping towards the end of September. So this is very early. And with the first shipment, especially, we want to make sure we take our time and really go through the pieces appropriately as we're getting these systems to our customers as we're standing them up and training them. As it happens in every launch, especially the launch of this complexity, part of what you have to expect is the unexpected, which is partially why we've been very deliberate with how we're rolling these out. So far, it's been great. Like we -- definitely a lot of learnings. You very quickly get a lot of learnings. But I don't think anything that's incongruent with our expectations at all. I would also say that the team has been making a lot of progress even since the time we announced the platform back in the spring. And it's been really great to see the progress. And one of the ways it's been manifesting itself is that the data keeps getting better, like the specs of the platform keep increasing and improving. And the feedback from customers on that has been really phenomenal. They were really, really happy with what they saw back in the spring. They are really blown away with what they're seeing now.

Your next question comes from the line of Puneet Souda with Leerink.

You have Michael on for Puneet. I think I wanted to pivot the conversation to Single Cell. Could you offer any color on the Apex transition, like how far along we are there? I know you've also talked about Apex being the most -- or the Flex being the most popular product. I'm curious if that's now tied to being the majority of the reactions sold? And how much of this adoption is really led by pharma versus your academic customer base?

Yes, good question. So Apex has been doing really well. And in fact, to your last point, especially with biopharma, really has been scaling really rapidly. So overall, we do -- we feel really good about Single Cell and all the different market dynamics, like I talked about earlier around AI, around translational applications around biopharma adoption. We -- this has been our strategy over the course of this year, really to keep driving Apex adoption and to keep driving reaction growth. And that's what we have been seeing. This past quarter was again an example of that, really, really strong reaction growth. And yes, Apex is definitely headed towards being kind of that sort of majority of reactions in our Chromium portfolio. Now, as we've always said, obviously, Apex on a per reaction basis is lower priced. And so as we're going through that transition, especially as we, kind of, lean into that transition, it does create some pressure on top line revenue. And so that's what we've been managing throughout this year, and things have been going well according to plan. And I would say even in some aspects, the adoption has been even deeper than we were anticipating.

Your next question comes from the line of Mason Carrico with Stephens.

This is Ben on for Mason. For Atera, I was wondering if you'd be able to provide what the mix of whole transcriptome versus select runs is today or just early interest in those options? And how do you see that evolving over the next 12 months?

Yes. Ben, thanks. Really great question. So one of the learnings, what we've been seeing is there's a huge interest in whole transcriptome. That's what people are, by and large, focusing on to extent that has exceeded our expectations. I think this is a function of maybe a number of things, but I think one of the big ones is just we're sort of in the AI era of data maximalism. People really want to be able to get as much information as they can for building these models, for being able to build models in the future as well. And of course, that's great for our business in a whole number of ways is standardize people to pretty consistent workflows. It also removes what was really the biggest throttler to Xenium adoption. Xenium has been doing really well. But nevertheless, from day 1, it was always somewhat constrained by the fact that customers needed to select panels or create their own custom panels. And with the whole transcriptome, people can just go. And so that has been one of the really nice learnings as well, still very early days, but whole transcriptome is really the dominant way that people are using it.

Your next question comes from the line of Albert Hu with Citi.

I don't know if I missed this, but did you guys break out the Atera placements in 3Q? And then maybe just on gross margins. You mentioned a quarter-to-quarter step down in 4Q. So I guess at what point post the Atera launch should we expect GMs to recover to the prelaunch levels? Is there a year from now? Is it longer? I appreciate all the color here.

Yes. Sure, I can take that. We didn't specifically say, but we sold a couple. If you think about what's in the revenue number for Q3, it's a couple of Ateras, pretty much coincided with when we put the release out in late September. From a gross margin perspective, yes, the 75% that we printed for Q3, when you look at instruments and from a mix perspective, extremely light, right, because we've got the transition dynamics going on where Xenium instruments understandably and sort of as we forecasted and guided slowed down. And Atera just with the 2 units out there into the field didn't pick up that slack. So 75% gross margin isn't exactly where we think we'll be in Q4. As we start to work more Ateras out in the field, anticipate gross margins will be in the low to mid-60s for Q4. So that's essentially what we'll see for the next quarter. I think it's really important to note as we think about 2027 though, the overall gross margin profile of the Atera platform is superior to that of the Xenium platform. So both the instruments and the consumables are notably higher. And so while we do anticipate, as Serge mentioned earlier, we're going to be working through the rate-limiting step for us right now is production, installation and customer success. It isn't orders. So as we're working through in the first half of next year and into the second half of next year, instrument placements and installations, we'd anticipate margins for 2027 will most likely come in lower than where they are. And obviously, we'll provide more color when we provide guidance early next year, but they most likely come in lower just it's going to be an instrument heavy year, and consumables will start to ramp during the course of the year.

Your next question comes from the line of David Westenberg with Piper Sandler.

This is Skye on for Dave. Can you talk a little bit more about the Sentira and the early customer workflows you're seeing it enable? Like how do you expect it to create value commercially? And any color on whether it's through software revenue, higher Chromium usage or just broader platform adoption would be helpful.

Yes. No, great question. So I mentioned we released our new platform, Sentira just recently with, kind of, combining cloud-based compute provision with agentic analysis. Now, stepping back, right, for instance like the beginning of history since our first products, going back to the start of genomics, the biggest bottleneck that people would point to in getting value out of our products is data analysis. And we've invested a lot over the years in data analysis, but it's nevertheless, it's oftentimes a bottleneck, a constraint, especially for people that are kind of not -- don't have the computational sort of expertise with a lot of bioinformatics kind of background. So Sentira is meant to address that bottleneck. And to a first order, the most important thing about Sentira is that -- is always our customers and accelerate the rest of our business, right? It helps our customers process the data and be able to get insights from that. Now, it also provides a means for us to deliver value and charge for software. And over time, that will create more opportunities for us and more revenue potential. But at this point, it is really about streamlining the experience for our customers and really, kind of, accelerating the use of all the other products that we sell.

Your next question comes from the line of Doug Schenkel with UBS.

This is Sean Gardner on for Doug. Just wanted to go back to Spatial consumables. So it grew 16% again in Q3, 16% in Q2 as well. And you kind of previously characterized Q3 as the peak of the Atera-related transition. So just based on what you saw in this quarter, is the performance consistent with that expectation? I guess, should we think about the underlying Spatial consumables business returning to growth sequentially in Q4? Or is that improvement more likely to materialize in '27? And then as Atera placements ramp generally, how should we be thinking about timing and trajectory of consumables pull-through?

Yes. Sure. I can take that. Thank you for the question. Yes, I would say, by and large, the performance in Q3 was modestly better than what we had anticipated on the Spatial consumables in particular. Obviously, it was better than we'd anticipated in other areas as well. The Xenium pull-through continues to be quite strong. And it's an incredible platform and customers are still quite pleased with it. One of the dynamics we're looking at when you think about it in the context of our guide, we certainly anticipate that Spatial consumables in Q4 will still be double digits for sure. That's embedded in the guidance. We'll have a full quarter of Atera consumables shipments. And then we're keeping a close eye just on Xenium pull-through in particular, Visium to a lesser degree. But we still think it's going to be a very strong quarter for us on Spatial consumables and give us incredible momentum going into 2027.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.