10x Genomics(US:TXG)2022-08-09 00:49Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $114.6 million, a 1% decrease year-over-year from $115.8 million in Q2 2021 [38] - Full year revenue is now expected to be in the range of $500 million to $520 million, representing growth of 2% to 6% over the prior year [7][47] - Gross profit for Q2 was $86.9 million, down from $110.9 million in the prior year, with a gross margin of 76% compared to 96% in Q2 2021 [41] - Operating loss for Q2 was $63.1 million, compared to a loss of $10.3 million in Q2 2021, primarily due to increased personnel-related expenses [43] - Net loss for the period was $64.5 million, compared to a net loss of $11.1 million in Q2 2021 [45] Business Line Data and Key Metrics Changes - Consumables revenue was $97.9 million, increasing 1% year-over-year and flat compared to Q1 2022 [38] - Instrument revenue was $14.7 million, a 13% decrease from the prior year but up 2% from Q1 2022 [38] - Service revenue was $1.9 million, increasing 7% over the prior year [38] Market Data and Key Metrics Changes - Revenue in the Americas for Q2 was $70.9 million, an 8% increase year-over-year and up 19% from Q1 2022 [40] - APAC revenue was $18.1 million, a 15% decrease year-over-year and down 47% compared to Q1 2022, impacted by lockdowns in China [39] - EMEA revenue was $25.6 million, an 11% decrease year-over-year but up 25% from Q1 2022 [40] Company Strategy and Development Direction - The company is focusing on improving execution and implementing tools and processes to increase leverage and scale for future growth [9][24] - There is a strong emphasis on product innovation and customer experience, with plans to enhance commercial strategies and systems [10][24] - The company is committed to maintaining a strong cash position while investing in long-term growth [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the macro environment and execution, expecting some issues to persist into the second half of the year [7] - Confidence remains in the underlying opportunity for single-cell and spatial technology despite slower topline growth [8] - The company is adjusting expectations for the second half of the year to reflect a more modest growth rate due to lingering macro headwinds [47] Other Important Information - The company implemented a reduction in workforce by approximately 8% to reduce spending and preserve cash [45] - The company is targeting to be free cash flow positive by the end of 2023 [46] - New product launches are anticipated to drive growth, with a focus on the first full year of Xenium and CytAssist [53] Q&A Session Summary Question: Insights on 2023 growth outlook - Management expressed excitement about new products and improvements in systems and processes, but refrained from providing specific forecasts for 2023 [52][54] Question: Commercial strategy improvements - Emphasis was placed on enhancing commercial execution through better tools and metrics, focusing on both new customer acquisition and increasing usage among existing customers [55][56] Question: Trends in July and August - Trends observed in Q3 support expectations of low to mid-teens percent growth from Q2, with APAC and EMEA showing the most significant impacts [75][76] Question: Visibility into overall business - Management noted that extended lockdowns in China and currency impacts were significant drivers of Q2 performance, affecting visibility into future growth [82][84] Question: Balancing growth and profitability - The company remains in growth mode while also focusing on becoming free cash flow positive, reflecting on organizational complexity and spending [86][88] Question: Insights on single-cell market growth - Management confirmed that the fundamental need for single-cell resolution remains strong, despite recent macroeconomic challenges [92] Question: Update on Visium HD delay - The delay is attributed to technical and manufacturing challenges, but the company is committed to delivering the capabilities as soon as possible [98]