Summary of 10x Genomics Conference Call Company Overview - **Company**: 10x Genomics - **Event**: Morgan Stanley Global Healthcare Conference - **Speaker**: Serge Saxonov, Co-founder and CEO Key Points Industry Context - The healthcare and life sciences tools industry has faced various macroeconomic challenges over the past year, impacting customer sentiment and spending patterns [3][4][6] - Academic customers in the U.S. are cautiously optimistic but remain uncertain about future funding, particularly from NIH [6][8][9] - The biopharma sector is experiencing a recession, with biotech companies struggling for funding, while larger pharma companies are cautious due to uncertainties in pricing and policy [12][13][14] Company Achievements - 10x Genomics completed a commercial restructuring and made significant progress in product development, including the upcoming launch of the Chromium Single Cell Gene Expression Flex V2 [5][19] - The company has maintained a strong balance sheet and focused on cost management, positioning itself to navigate current challenges and emerge stronger [5] Market Sentiment - Customer sentiment in the academic market has not significantly improved; spending remains cautious due to uncertainties around funding and budget clarity [7][8] - In Europe and Asia, there is increased scrutiny on capital equipment purchases, with departments questioning the necessity of new instruments [9][10] Product Development and Launches - The Chromium Single Cell Gene Expression Flex V2 is expected to launch later this year, with positive feedback from early access customers [19][20] - The transition from NextGen to GenX consumables is ongoing, with most customers expected to switch by early next year [22][24] Market Dynamics - There is a preference for consumable purchases over large capital equipment in the current environment [16] - Both single cell and spatial modalities are seeing interest, with spatial tools emerging as a promising area for growth [16][17] Competitive Landscape - 10x Genomics maintains a strong competitive position in the single cell market, with superior data quality and customer support compared to competitors [35][36] - The company is aware of emerging technologies like the STANT method but believes its products offer deeper insights and better performance [38][39] Strategic Acquisitions - The acquisition of Scale Biosciences is aimed at enhancing single cell analysis capabilities by integrating innovative technologies [30][31] Future Outlook - The company is optimistic about the long-term growth potential in the single cell market, driven by lower price points and increased adoption [26][27] - 10x Genomics is well-positioned to capitalize on the growing demand for single cell and spatial analysis in biological research and drug discovery [58][59] Closing Remarks - The CEO emphasized the strength of the company's fundamentals and its strategic position in the market, highlighting the importance of single cell and spatial approaches in future biological research [57][58]

Core Insights - CLISEQ Ltd. has announced a collaboration with 10x Genomics and the Weizmann Institute to launch the PERIBLOOD clinical trial, which aims to evaluate single cell RNA sequencing from blood as a non-invasive method for diagnosing blood disorders [1][2][3] - The trial will enroll over 1,500 participants globally and compare single cell profiles from peripheral blood with traditional bone marrow aspiration results to assess the viability of this new diagnostic approach [1][2][3] Group 1: Clinical Trial Details - The PERIBLOOD trial is a three-year study sponsored by the Weizmann Institute, with plans to enroll participants from North America, Europe, Asia, Latin America, and Israel [1] - Participants will include individuals with low and high blood counts, as well as healthy volunteers, to evaluate the effectiveness of the new diagnostic method for Myelodysplastic Syndromes (MDS) and other hematological disorders [1][2] Group 2: Technology and Methodology - The trial utilizes a novel technology developed by Professors Liran Shlush and Amos Tanay, which has shown the ability to accurately diagnose MDS from peripheral blood [2][5] - 10x Genomics' Chromium GEM-X Single Cell technology will be employed to analyze thousands of individual cells in each blood sample, generating detailed molecular profiles that may reveal insights missed by traditional testing methods [3][4] Group 3: Implications and Future Directions - If successful, the study could lead to a significant shift in how blood disorders are diagnosed, making the process less invasive and more accessible [4][5] - The findings from this trial may inform future diagnostic product development in hematology, enhancing patient experience and clinical decision-making [4][5]

Core Insights - 10x Genomics has launched Xenium Protein, the first fully integrated spatial multiomic assay that allows simultaneous RNA and protein detection in the same cell and tissue section, enhancing biological insights without the need for data integration from multiple technologies [1][2] Group 1: Product Features - Xenium Protein expands the Xenium Spatial platform with ready-to-use protein subpanels that work seamlessly with RNA panels, focusing on proteins involved in cell growth, signaling, and immune response, which are crucial for studying cancer and immunology [2][4] - The new assay simplifies experimental design by reducing the need for separate workflows or sample sections, allowing researchers to capture both RNA and protein data in a single automated run, thus accelerating the pace of discoveries [3][4] Group 2: Industry Impact - Integrated multiomic analysis is essential for advancing the understanding of complex diseases and accelerating therapeutic discovery, as highlighted by industry experts [2][4] - Early access customers are already utilizing Xenium Protein for various research applications, from early discovery to large-scale atlasing efforts, indicating its broad applicability in the field [3]

Core Insights - The article emphasizes the importance of efficiency levels in assessing a company's potential for profitability, suggesting that higher efficiency correlates with better price performance [1] Efficiency Ratios - Receivables Turnover: This ratio measures a company's ability to collect debts and extend credit, with a higher ratio indicating better performance [2] - Asset Utilization: This ratio reflects a company's efficiency in converting assets into sales, with higher values suggesting better efficiency [3] - Inventory Turnover: This ratio indicates how well a company manages its inventory relative to its cost of goods sold, with higher values signaling effective inventory management [4] - Operating Margin: This ratio assesses a company's control over operating expenses, with higher values indicating more efficient expense management [5] Screening Criteria - The screening process included a favorable Zacks Rank (1 Strong Buy) alongside the efficiency ratios, narrowing down over 7,906 stocks to 15 strong candidates [6][9] Top Stocks Identified - The top five stocks identified for their efficiency include: - Tsakos Energy Navigation Limited (TEN) with an average four-quarter earnings surprise of 46.7% [10] - 10x Genomics, Inc. (TXG) also with an average four-quarter earnings surprise of 46.7% [11] - Pan American Silver Corp. (PAAS) with an average four-quarter earnings surprise of 45.2% [12] - Wolverine World Wide, Inc. (WWW) with an average four-quarter earnings surprise of 39.1% [13] - Interface (TILE) with an average four-quarter earnings surprise of 33.5% [14]

Core Insights - 10x Genomics reported revenue of $172.91 million for the quarter ended June 2025, reflecting a year-over-year increase of 12.9% and surpassing the Zacks Consensus Estimate of $139.44 million by 24% [1] - The company achieved an EPS of $0.28, a significant improvement from -$0.32 in the same quarter last year, resulting in an EPS surprise of 180% compared to the consensus estimate of -$0.35 [1] Revenue Breakdown - Consumables revenue reached $122.19 million, slightly above the average estimate of $117.21 million, but showing a year-over-year decline of 1% [4] - Instruments revenue was reported at $14.5 million, below the average estimate of $14.9 million, marking a substantial year-over-year decrease of 39.2% [4] - Chromium instruments generated $5.73 million, slightly exceeding the estimated $5.6 million [4] - Services revenue amounted to $8.48 million, outperforming the estimate of $7.36 million, and reflecting a year-over-year increase of 43.9% [4] - Consumables from Chromium totaled $85.79 million, surpassing the estimate of $84.35 million [4] - Spatial consumables revenue was reported at $36.4 million, exceeding the average estimate of $32.86 million [4] - Spatial instruments revenue was $8.77 million, below the average estimate of $9.3 million [4] Stock Performance - Over the past month, shares of 10x Genomics have returned +4.6%, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - 10x Genomics reported quarterly earnings of $0.28 per share, significantly beating the Zacks Consensus Estimate of a loss of $0.35 per share, marking an earnings surprise of +180.00% [1][2] Financial Performance - The company posted revenues of $172.91 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 24.00% and showing an increase from $153.1 million in the same quarter last year [2] - Over the last four quarters, 10x Genomics has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - 10x Genomics shares have declined approximately 11.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.25 on revenues of $144.82 million, and for the current fiscal year, it is -$1.12 on revenues of $593.29 million [7] - The trend of estimate revisions for 10x Genomics was favorable ahead of the earnings release, suggesting potential positive movements in stock performance [6] Industry Context - The Medical Info Systems industry, to which 10x Genomics belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, covering balance sheets, operations, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $979.97 million as of June 30, 2025, driven by cash and receivables, with equity rising | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----- | :-------------------------- | :------------------------------ | | Total Assets | $979.97 | $918.64 | | Total Liabilities | $206.69 | $208.50 | | Total Stockholders' Equity | $773.28 | $710.13 | - Key Current Asset Changes (June 30, 2025 vs. Dec 31, 2024): - Cash and cash equivalents: Increased from **$344.07 million** to **$397.71 million**[18](index=18&type=chunk) - Accounts receivable, net: Decreased from **$87.86 million** to **$49.98 million**[18](index=18&type=chunk) - Other receivables: Increased significantly from **$606 thousand** to **$69.09 million**[18](index=18&type=chunk) - Inventory: Decreased from **$83.11 million** to **$68.97 million**[18](index=18&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported **$34.5 million** net income for Q2 2025, a significant improvement from prior year loss, driven by license revenue and settlement gain | Period | June 30, 2025 (3 months, in thousands) | June 30, 2024 (3 months, in thousands) | June 30, 2025 (6 months, in thousands) | June 30, 2024 (6 months, in thousands) | | :----- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net Income (Loss) | $34,538 | $(37,897) | $180 | $(97,846) | | Revenue Type | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Products and services revenue | $145.16 | $152.99 | $282.98 | $293.99 | | License and royalty revenue | $27.75 | $0.11 | $44.81 | $0.12 | | **Total Revenue** | **$172.91** | **$153.10** | **$327.79** | **$294.11** | - Operating Expenses and Gain on Settlement (3 months ended June 30, 2025 vs 2024): - Research and development: **$61.22 million** (2025) vs **$62.92 million** (2024) - Decrease of **3%**[20](index=20&type=chunk) - Selling, general and administrative: **$74.43 million** (2025) vs **$83.04 million** (2024) - Decrease of **10%**[20](index=20&type=chunk) - Gain on settlement: **$(40.70) million** (2025) vs **$0 thousand** (2024)[20](index=20&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income for Q2 2025 was **$35.1 million**, a significant improvement from prior year's loss, reflecting reported net income | Period | June 30, 2025 (3 months, in thousands) | June 30, 2024 (3 months, in thousands) | June 30, 2025 (6 months, in thousands) | June 30, 2024 (6 months, in thousands) | | :----- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net income (loss) | $34,538 | $(37,897) | $180 | $(97,846) | | Other comprehensive income (loss), net of tax | $587 | $26 | $713 | $(1) | | **Comprehensive income (loss)** | **$35,125** | **$(37,871)** | **$893** | **$(97,847)** | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased to **$773.3 million** as of June 30, 2025, driven by net income and stock-based compensation | Date | Total Stockholders' Equity (in millions) | | :--- | :------------------------------------- | | June 30, 2025 | $773.28 | | December 31, 2024 | $710.13 | - Key Changes in Stockholders' Equity (Dec 31, 2024 to June 30, 2025): - Additional Paid-in Capital increased by **$62.25 million** (**$2.24 billion** - **$2.18 billion**)[26](index=26&type=chunk) - Accumulated Deficit improved from **$(1.47) billion** to **$(1.47) billion**[26](index=26&type=chunk) - Net income for the period contributed **$34.54 million**[26](index=26&type=chunk) - Stock-based compensation contributed **$58.31 million** (**$30.57 million** + **$27.74 million**)[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$52.1 million** for H1 2025, compared to a prior year outflow | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------- | :------------------------------------------ | :------------------------------------------ | | Operating activities | $52,059 | $(8,229) | | Investing activities | $(2,832) | $22,579 | | Financing activities | $3,944 | $6,241 | | Effect of exchange rates changes on cash, cash equivalents | $474 | $(51) | | **Net increase in cash and cash equivalents** | **$53,645** | **$20,540** | | Date | Cash, cash equivalents at end of period (in millions) | | :--- | :-------------------------------------------------- | | June 30, 2025 | $397.71 | | June 30, 2024 | $379.82 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements [1. Description of Business and Basis of Presentation](index=11&type=section&id=1.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) 10x Genomics, Inc. is a life sciences technology company providing integrated research solutions, with financial statements unaudited and GAAP-compliant - Business Focus: Life sciences technology company building innovative products and solutions to interrogate, understand and master biological systems[30](index=30&type=chunk) - Product Portfolio: Includes Chromium instruments, Visium CytAssist, Xenium Analyzer ("Spatial instruments"), and proprietary microfluidic chips, slides, reagents, and other consumables. Software is bundled with products[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the company's significant accounting policies, including revenue recognition, with no material changes during the period - Revenue Recognition: - Product sales: Recognized when control is transferred, generally upon shipment[34](index=34&type=chunk)[38](index=38&type=chunk) - Instrument service agreements (extended warranties): Recognized ratably over the term[34](index=34&type=chunk)[38](index=38&type=chunk) - License revenue: Recognized when intellectual property license is delivered[34](index=34&type=chunk)[38](index=38&type=chunk) - Royalty revenue: Recognized when underlying sales occur[34](index=34&type=chunk)[38](index=38&type=chunk) - Segment Information: The Company operates as a single operating segment[39](index=39&type=chunk) - Recently Issued Accounting Pronouncements: - ASU No. 2023-09 (Income Taxes): Effective fiscal year 2025, requires disaggregation of income tax information[41](index=41&type=chunk) - ASU 2024-03 (Disaggregation of Income Statement Expenses): Effective fiscal years

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $173 million, up 13% year-over-year, but excluding the settlement revenue, it was $146 million, down 5% [21][5] - Total consumables revenue was $122.2 million, down 1%, with Chromium consumables revenue at $85.8 million, down 9% [22][21] - Gross profit for Q2 was $125.1 million, with a gross margin increase to 72% from 68% year-over-year, primarily due to higher license and royalty revenue [26][21] - Net income for the period was $34.5 million compared to a net loss of $37.9 million in the previous year [27][21] Business Line Data and Key Metrics Changes - Spatial consumables revenue was $36.4 million, up 24%, driven by Xenium consumables revenue [22] - Total instrument revenue was $14.5 million, down 39%, with Chromium instrument revenue at $5.7 million, down 35% [23][22] - Services revenue increased by 47% to $8.5 million, primarily due to an increase in Xenium service plans [24][22] Market Data and Key Metrics Changes - Americas revenue was $78.9 million, down 15% year-over-year, while EMEA revenue was $34.7 million, down 7% [24] - APAC revenue was $32 million, up 41% year-over-year, benefiting from a temporary pull forward in purchasing activity in China [25][24] Company Strategy and Development Direction - The company is focused on advancing technology leadership in single cell and spatial biology, with new product launches aimed at lowering costs and expanding applications [12][19] - The acquisition of Scale Biosciences is expected to enhance the Chromium platform and broaden access to single cell analysis [19][28] - The company aims to maintain operational efficiency while investing in long-term growth despite a challenging funding environment [18][29] Management's Comments on Operating Environment and Future Outlook - The current funding environment is challenging, particularly in academic research, with cautious customer spending and extended project timelines [6][11] - Management noted that while there are signs of optimism among customers, actual spending remains conservative due to slow disbursement of funds [37][38] - The company expects Q3 revenue to be in the range of $140 million to $144 million, reflecting cautious customer spending behavior [28][21] Other Important Information - The company ended the quarter with $447 million in cash, cash equivalents, and marketable securities [27] - The company is committed to cost management and cash generation while pursuing strategic priorities [18][29] Q&A Session Summary Question: Can you discuss the current academic research funding environment? - Management noted that while there is more optimism compared to previous months, spending remains cautious due to slow fund disbursement and uncertainty around budgets [37][38] Question: What is the strategic rationale behind the Scale acquisition? - The acquisition aims to lower costs and drive higher scale in single cell applications, enhancing the company's existing product capabilities [41][42] Question: How is the sales force for Xenium performing in Europe? - The sales team is fully in place and ramping up, with improved execution despite a challenging capital expenditure environment [56][59] Question: What are the expectations for revenue from the Scale acquisition? - Near-term revenue impact from the acquisition is expected to be minimal, with a focus on integrating technologies into the broader portfolio [49][48] Question: What factors could unlock customer spending in the future? - Budget clarity for the next year and the actual disbursement of funds are seen as critical factors for unlocking customer spending [85][86]

[Second Quarter 2025 Earnings Release Highlights](index=1&type=section&id=Second%20Quarter%202025%20Earnings%20Release%20Highlights) [Recent Business Updates and CEO Commentary](index=1&type=section&id=Recent%20Updates) CEO Serge Saxonov affirmed Q2 performance met expectations, highlighting business resilience, strategic acquisitions, new product launches, and key research partnerships - CEO Serge Saxonov expressed satisfaction with Q2 performance, emphasizing the company's **business resilience** in an uncertain financing environment and confidence in its technology and long-term opportunities[4](index=4&type=chunk) - The company acquired Scale Biosciences for **$30 million** in cash and stock consideration, aiming to strengthen its leadership in single-cell analysis through key technologies and expand application scope[9](index=9&type=chunk) - The company began shipping Visium HD 3' and HD cell segmentation products, expanding the Visium portfolio's capabilities in high-resolution, high-sensitivity analysis[9](index=9&type=chunk) - A partnership with the Genome Institute of Singapore launched the TISHUMAP program, utilizing Xenium and AI technology to discover novel biomarkers and therapeutic targets for cancer and inflammatory diseases[9](index=9&type=chunk) [Second Quarter 2025 Financial Summary](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Q2 2025 total revenue reached **$172.9 million** (including **$27.3 million** settlement), with **$145.6 million** ex-settlement, gross margin at **72%**, and a return to operating and net profitability Key Financial Data for Q2 2025 | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Y-o-Y Change | Notes | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | 172.9 | 153.1 | +12.9% | Includes $27.3 million patent litigation settlement | | **Revenue Excluding Settlement** | 145.6 | 153.1 | -5% | Primarily due to lower instrument revenue, partially offset by ~$4.0 million early purchases by Chinese customers | | **Gross Margin** | 72% | 68% | +4% | 67% excluding license and royalty revenue | | **Operating Expenses** | 95.0 | 146.0 | -35% | Primarily due to $40.7 million litigation settlement gain | | **Operating Income (Loss)** | 30.1 | (41.7) | Turned Profitable | | | **Net Income (Loss)** | 34.5 | (37.9) | Turned Profitable | | | **Cash, Cash Equivalents, and Marketable Securities** | 447.3 | - | +20 million (Q-o-Q) | As of June 30, 2025, increased by $20 million from prior quarter | [Third Quarter 2025 Revenue Guidance](index=2&type=section&id=Third%20Quarter%202025%20Revenue%20Guidance) Q3 2025 revenue is projected between **$140 million** and **$144 million**, factoring in **$4 million** of early Chinese customer purchases Q3 2025 Revenue Guidance | Metric | Range (Million USD) | | :--- | :--- | | **Q3 Revenue Guidance** | 140 - 144 | | **Impact from Early Chinese Customer Purchases** | ~4.0 (already accounted for) | [Company Information](index=2&type=section&id=Company%20Information) [About 10x Genomics](index=2&type=section&id=About%2010x%20Genomics) 10x Genomics is a life science technology company providing integrated single-cell and spatial biology solutions to accelerate research and human health - 10x Genomics is a life science technology company focused on accelerating biological research and human health development through single-cell and spatial biology products[12](index=12&type=chunk) - The company provides integrated research solutions, including instruments, consumables, and software, serving academia, translational researchers, and biopharmaceutical companies[12](index=12&type=chunk) - Its products have driven significant discoveries in oncology, immunology, neuroscience, and other fields, deepening the understanding of health and disease[12](index=12&type=chunk) [Legal and Investor Information](index=2&type=section&id=Legal%20and%20Investor%20Information) This section provides forward-looking statement disclaimers, directs investors to SEC filings for risk factors, and outlines official information dissemination channels - Forward-looking statements are protected by the Private Securities Litigation Reform Act of 1995, and actual results may differ materially from expectations due to various factors[13](index=13&type=chunk) - The company discloses material non-public information through SEC filings, its website, press releases, public conference calls, webcasts, and social media accounts to comply with Regulation FD disclosure obligations[14](index=14&type=chunk) - Investor and media contact emails are provided[15](index=15&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 and H1 2025 statements show significant improvement, with **12.9%** Q2 total revenue growth, a shift to operating and net profitability, driven by license revenue and settlement gains Condensed Consolidated Statements of Operations Summary (Thousands USD) | Metric | Q2 2025 | Q2 2024 | First Six Months 2025 | First Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Product and Service Revenue** | 145,157 | 152,990 | 282,980 | 293,995 | | **License and Royalty Revenue** | 27,751 | 114 | 44,811 | 115 | | **Total Revenue** | 172,908 | 153,104 | 327,791 | 294,110 | | **Gross Profit** | 125,084 | 104,220 | 230,529 | 197,134 | | **Operating Expenses** | 94,958 | 145,957 | 239,731 | 300,369 | | **Operating Income (Loss)** | 30,126 | (41,737) | (9,202) | (103,235) | | **Net Income (Loss)** | 34,538 | (37,897) | 180 | (97,846) | | **Basic Net Income (Loss) Per Share** | 0.28 | (0.32) | — | (0.82) | [Three Months Ended June 30, 2025 vs 2024](index=3&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Q2 2025 Operating Results (Thousands USD) | Metric | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | **Product and Service Revenue** | 145,157 | 152,990 | (7,833) | -5.1% | | **License and Royalty Revenue** | 27,751 | 114 | 27,637 | >100% | | **Total Revenue** | 172,908 | 153,104 | 19,804 | +12.9% | | **Gross Profit** | 125,084 | 104,220 | 20,864 | +20.0% | | **Operating Expenses** | 94,958 | 145,957 | (50,999) | -34.9% | | **Operating Income (Loss)** | 30,126 | (41,737) | 71,863 | Turned Profitable | | **Net Income (Loss)** | 34,538 | (37,897) | 72,435 | Turned Profitable | | **Basic Net Income (Loss) Per Share** | 0.28 | (0.32) | 0.60 | Turned Profitable | [Six Months Ended June 30, 2025 vs 2024](index=3&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) First Six Months 2025 Operating Results (Thousands USD) | Metric | First Six Months 2025 | First Six Months 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | **Product and Service Revenue** | 282,980 | 293,995 | (11,015) | -3.7% | | **License and Royalty Revenue** | 44,811 | 115 | 44,696 | >100% | | **Total Revenue** | 327,791 | 294,110 | 33,681 | +11.4% | | **Gross Profit** | 230,529 | 197,134 | 33,395 | +16.9% | | **Operating Expenses** | 239,731 | 300,369 | (60,638) | -20.2% | | **Operating Income (Loss)** | (9,202) | (103,235) | 94,033 | Loss Narrowed | | **Net Income (Loss)** | 180 | (97,846) | 98,026 | Turned Profitable | | **Basic Net Income (Loss) Per Share** | — | (0.82) | 0.82 | Turned Profitable | [Revenue Breakdown by Source and Geography](index=4&type=section&id=Revenue%20Breakdown%20by%20Source%20and%20Geography) Q2 2025 Revenue by Source (Thousands USD) | Revenue Source | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | **Instrument Revenue** | | | | | | Chromium | 5,727 | 8,792 | (3,065) | -34.9% | | Spatial | 8,770 | 15,060 | (6,290) | -41.8% | | **Total Instrument Revenue** | 14,497 | 23,852 | (9,355) | -39.2% | | **Consumables Revenue** | | | | | | Chromium | 85,788 | 94,108 | (8,320) | -8.8% | | Spatial | 36,397 | 29,254 | 7,143 | +24.4% | | **Total Consumables Revenue** | 122,185 | 123,362 | (1,177) | -1.0% | | **Service Revenue** | 8,475 | 5,776 | 2,699 | +46.7% | | **Product and Service Revenue** | 145,157 | 152,990 | (7,833) | -5.1% | | **License and Royalty Revenue** | 27,751 | 114 | 27,637 | >100% | | **Total Revenue** | 172,908 | 153,104 | 19,804 | +12.9% | Q2 2025 Revenue by Geography (Thousands USD) | Geography | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | **Americas** | | | | | | United States | 103,491 | 89,672 | 13,819 | +15.4% | | Americas (Excluding U.S.) | 2,667 | 3,419 | (752) | -22.0% | | **Total Americas** | 106,158 | 93,091 | 13,067 | +14.0% | | **Europe, Middle East, and Africa** | 34,734 | 37,362 | (2,628) | -7.0% | | **Asia Pacific** | | | | | | China | 23,170 | 13,738 | 9,432 | +68.7% | | Asia Pacific (Excluding China) | 8,846 | 8,913 | (67) | -0.8% | | **Total Asia Pacific** | 32,016 | 22,651 | 9,365 | +41.3% | | **Total Revenue** | 172,908 | 153,104 | 19,804 | +12.9% | [Stock-Based Compensation Expense Details](index=4&type=section&id=Stock-Based%20Compensation%20Expense%20Details) Stock-Based Compensation Expense (Thousands USD) | Category | Q2 2025 | Q2 2024 | First Six Months 2025 | First Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Cost of Revenue** | 1,989 | 2,247 | 4,470 | 4,280 | | **Research and Development Expenses** | 12,613 | 17,862 | 26,719 | 34,750 | | **Selling, General and Administrative Expenses** | 12,643 | 18,383 | 27,132 | 35,591 | | **Total Stock-Based Compensation Expense** | 27,245 | 38,492 | 58,321 | 74,621 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to **$979.97 million**, with **$447.3 million** in cash and marketable securities, reflecting an improved financial position Condensed Consolidated Balance Sheets Summary (Thousands USD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and Cash Equivalents | 397,712 | 344,067 | 53,645 | | Marketable Securities | 49,549 | 49,335 | 214 | | Accounts Receivable, Net | 49,977 | 87,862 | (37,885) | | Inventory | 68,968 | 83,107 | (14,139) | | **Total Current Assets** | 655,661 | 584,387 | 71,274 | | **Total Assets** | 979,970 | 918,636 | 61,334 | | **Liabilities** | | | | | Accounts Payable | 15,938 | 12,909 | 3,029 | | Deferred Revenue (Current) | 21,449 | 20,658 | 791 | | **Total Current Liabilities** | 112,221 | 117,633 | (5,412) | | **Total Liabilities** | 206,691 | 208,502 | (1,811) | | **Stockholders' Equity** | | | | | Accumulated Deficit | (1,466,867) | (1,467,047) | 180 | | **Total Stockholders' Equity** | 773,279 | 710,134 | 63,145 | | **Total Liabilities and Stockholders' Equity** | 979,970 | 918,636 | 61,334 |

Core Insights - Torex Gold Resources Inc. reported solid operational momentum in Q2 2025, with commercial production at Media Luna declared on May 1 and a return to positive free cash flow in June [2][3][4] - The company is on track to meet its annual production guidance of 400,000 to 450,000 gold equivalent ounces (oz AuEq) and expects all-in sustaining costs to improve significantly in the latter half of the year [4][9] Financial Performance - In Q2 2025, Torex produced 82,856 oz AuEq, with a significant increase in production to over 37,000 oz AuEq in June and over 45,000 oz AuEq in July [3][18] - Revenue for the quarter was $253.9 million, with a record average realized gold price of $3,311 per oz [18][30] - The company reported net income of $83.2 million, or $0.97 per share, and adjusted net earnings of $43.8 million, or $0.51 per share [18][20] Operational Highlights - The company achieved a lost-time injury frequency (LTIF) of 0.46 per million hours worked, maintaining a strong safety performance with no lost-time injuries during the quarter [6][18] - Non-sustaining capital expenditures for Media Luna were $48.9 million in Q2, with an upward revision of guidance to $160.0 to $170.0 million for the year due to project scope changes [8][18] Growth Strategy - Torex is executing a strategy to diversify its portfolio with the announced acquisitions of Reyna Silver Corp. and Prime Mining Corp., aimed at enhancing growth potential in the Americas [5][10] - The acquisition of Reyna Silver is valued at approximately $26 million, providing access to exploration properties in Mexico and Nevada [10][11] - The acquisition of Prime Mining is valued at $327 million, granting Torex 100% ownership of the Los Reyes Project in Sinaloa, Mexico [10][11] Future Outlook - The company anticipates robust free cash flow generation at Morelos, with expectations for positive cash flow to increase quarterly through the remainder of 2025 [9][10] - Torex is focused on advancing the EPO Underground Project, with ongoing feasibility studies and development activities aimed at initial ore production by late 2026 [10][12]