Q4 2021 10X Genomics Inc Earnings Call

Speaker 1: In addition, Brad Crutchfield, our Chief Commercial Officer, will be available for Q&A. With that, I'll now...

Brad Crutchfield, our chief commercial officer will be available for Q&A.

With that I'll now turn the call over to search.

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Thanks, Eric and good afternoon, and thank you for joining our call.

Speaker 2: Thanks, Eric. Good afternoon, and thank you for joining our call.

Speaker 2: During today's call, I will provide a summary of our fourth quarter in 2021 strategic progress, operational highlights, and financial performance.

During today's call I will provide a summary of our fourth quarter and 2021 strategic progress operational highlights and financial performance.

Speaker 2: I also want to spend some time on our plans and expectations for 2022. And while we believe the actions and investments we make this year will set us up to accelerate and sustain growth into 2023 and beyond.

I also want to spend some time on our plans and expectations for 2022 and why we believe the actions and investments. We made this year will set us up to accelerate and sustain growth into 2023 and beyond.

Speaker 2: I will then turn the call over to Justin for a more detailed look at our financials and guidance.

I will then turn the call over to Justin for a more detailed look at our financials and guidance.

Speaker 2: We made significant progress on the key objectives we outlined in the beginning of the year. During 2021, we launched five new products including Chromium X and Visium FSP. We sold 1100 instruments, settled our worldwide litigation with Biaras and drove upwards of 300 new tablets in that patent application.

We made significant progress on the key objectives, we outlined at the beginning of the year. During 2021, we launched five new products, including chromium X and vision FSP. They sold 1100 instruments settled our worldwide litigation with bio Rad drove upwards of 300, new tablets and that patent applications.

So our technology has contributed to more than 300, new peer reviewed papers and added nearly 400 employees as we continue to scale our organization.

Speaker 2: So our technologies contribute to more than 1,300 new peer reviewed papers and added nearly 400 employees as we continue to scale our working.

Speaker 2: These investments and innovations feel growth of 64% over the prior year, bringing 2021 revenue to $490 million. This was driven on partly...

These investments in innovations fueled growth of 64% over the prior year, bringing 2021 revenue to $490 million.

This was driven in part by continued growth in instrument placements cumulative instrumental then sold increased 46% year over year to more than 3500.

Speaker 2: Cumulative instruments sold increased 46% year over year to more than 3500.

In addition, consumables revenue increased 6% to 6% in 2021.

Speaker 2: In addition, consumables revenue increased 66% in 2021. A single cell and spatial approaches continue to gain adoption as essential tools for discovery research.

We will sell in spatial approach has continued to be an adoption as essential tools for discovery research.

Our conviction and our opportunity remains as strong as ever and we're continuing to invest and build the company to drive sustained high growth in the future.

Speaker 2: Our conviction and our opportunity remains as strong as ever, and we're continuing to invest and build a company to drive sustained high growth in the future.

Speaker 2: While we're bullish about the opportunity ahead, we anticipate some headwinds that will temporarily impact our growth in 2022, most notably in the first half of the year.

While were bullish about the opportunity ahead, we anticipate some headwinds that will temporarily impact our growth in 2022.

Most notably in the first half of the year.

Speaker 2: For 2022, we expect revenues to be in the range of $600 million representing 22 to 28 percent annual growth.

For 2022, we expect revenues to be in the range of $600 million to $630 million.

Presenting 22% to 28% annual growth.

This range reflects solid growth with new and existing customers offset by the following near term headwinds.

Speaker 2: First, the ongoing impact of Omicron into the first quarter, particularly with academic customers.

First the ongoing impact of on the ground until the first quarter, particularly with academic customers.

Second on average recent customer cohort had been wrapping consumable utilization somewhat more slowly than our earlier cohorts.

Speaker 2: Second, on average, recent customer cohorts have been wrapping consumable utilization somewhat more slowly than our early.

Speaker 2: And third, we accelerated product development of our Zinnium platform, which has delayed the timing of other products.

And third we are accelerating product development of our union platform, which have delayed the timing of other product launches.

We firmly believe this is transitory and we'll look forward to building momentum throughout this year into 2023 and beyond.

Speaker 2: We firmly believe this is transitory and we look forward to building momentum throughout this year into 2023 and beyond.

Before we provide more detail on our 2022 priorities, let me go through our fourth quarter results.

Speaker 2: Before we provide more detail on our 2022 priorities, let me go through our four priorities.

Revenue for the fourth quarter totaled $144 million up 28% year over year and 15% sequentially.

Speaker 2: Revenue for the fourth quarter totaled $144 million, up 28% year-over-year and 15% sequential.

Driven by strong demand for our products. Despite all macondo related headwinds that emerged near the end of the quarter.

Speaker 2: driven by strong demand for our products despite omicron related headwinds that emerge near the end of the quarter.

Once again with the solid demand for chromium instruments, driven by continued enthusiasm for the recently introduced chromium X series.

Speaker 2: Once again, with the solid demand for chromium instruments driven by continued enthusiasm for the recently introduced chromium X series.

Since launching it's become clear that this platform has broad appeal that goes beyond the early adopters the flexibility to scale experiments and access high throughput capabilities resonates with both new customers.

Speaker 2: Since launch, it's become clear that this platform has broad appeal that goes beyond early adopters. The flexibility to scale experiments and access high-throughput capabilities resonates with both new customers and the new technology.

And across our existing user base.

This year, we plan to drive broader placement of our chromium serious skin using this platform to onboard new customers and upgrade existing users.

Speaker 2: This year, we plan to drive broader placement of our Chromium X series instruments using this platform to onboard new customers and upgrade existing units.

We want to ensure our customers have the most powerful tools available for single cell analysis, which is why we will focus on encouraging upgrades the covenant.

Speaker 2: We want to ensure our customers have the most powerful tools available for single cell analysis, which is why we will focus on encouraging upgrades to Chromium X or IS this year and beyond.

Or is this year and beyond.

Turning to consumables are high throughput kids have significantly exceeded our expectations. So.

Speaker 2: According to consumables, our high throughput kits have significantly exceeded our expectations.

Speaker 2: So far, and we're encouraged by the growth we're seeing in high throughput applications.

So far and we are encouraged by the growth we're seeing in hydro with applications.

Since launch our customers have been using Ht kits to analyze more samples and more cells to scale up their existing studies and to enable previously and practical cost prohibitive experiments.

Speaker 2: Since launch, our customers have been using HTKITS to analyze more samples and more cells to scale up their existing studies and to enable previously impractical cost prohibitive experiments.

We also saw continued growth across our portfolio of standard throughput single cell consumables this quarter.

Speaker 2: We also saw continued growth across our portfolio of standards through the single cell consumables this quarter. The breadth of our offerings covering gene expression, immune profiling, epigenetics, proteins, and multi-omics is unique and continues to resonate well with our growing culture.

The breadth of our offerings covering gene expression immune profiling epigenetics proteins and multi omics.

Unique and continues to resonate well with our growing customer base.

Speaker 2: Researchers have made 10x the leader in single cell analysis because of our breadth of applications, excellent product performance, and great customers.

Researchers have made Pemex the leader in single cell analysis, because of our breadth of obligations excellent product performance and great customer experience.

All of which drive sustained leadership and helps fuel new interest.

Speaker 2: all of which drive sustained leadership and help fuel new...

I'd like to touch on what we are observing with recent customer cohorts.

Speaker 2: I'd like to touch on what we are observing with recent customer cohorts....

We have previously discussed two types of customers.

Speaker 2: those that own an instrument and those that do not, which we have referred to as halo users.

Those are all new instruments, and those that do not which would have referred to as halo users.

Hilla users have been an increasing percentage of our customer base and on average your consumables that are instrumental owners.

Speaker 2: Haley users have been an increasing percentage of our customer base and on average use fewer consumables that are instrumental.

While this means that on average recent cohorts are ramping consumable utilization slower than earlier cohorts. It is a great sign for the long term trajectory of the business because it points to an expanding universe of customers entering the single cell vehicles.

Speaker 2: While this means that on average, recent cohorts are ramping consumer utilization slower than earlier cohorts, it's a great sign for the long-term trajectory of the business because it points to an expanding universe of customers entering the single cell ecosystem.

Speaker 2: I want to emphasize that recent customers who do purchase instruments are ramping similarly to our earlier adopters.

I wanted to emphasize the recent customers who do purchase instruments are wrapping similarly to our early adopters.

Speaker 2: They start with a consistent level of utilization and grow their consumable usage in line with previous cohort.

They start with a consistent level of utilization and grow their consumable usage in line with previous cohorts.

There still is a great sign for the trajectory of the business because it points to sustainable long term growth within our chromium franchise.

Speaker 2: This, too, is a great sign for the trajectory of the business because it points to sustainable long-term growth within our Chromium franchise.

Yeah.

Turning now Division Q4 was a strong quarter for both fresh frozen and F&B.

Speaker 2: Turning now to VIGEM. Q4 was a strong quarter for both fresh frozen and FFPE. VIGEM is the only platform that delivers unbiased spatial analysis at high resolutions across the entire tissue.

<unk> is the only platform the deliberate unbiased spatial analysis at high resolution across the entire tissue sample.

Speaker 2: While it remains very early in its lifecycle, we saw increasing customer enthusiasm and commercial progress.

And while it remains very early in its lifecycle, we saw increasing customer enthusiasm and commercial progress.

<unk> revenue doubled in 2021.

Speaker 2: Visum revenue doubled in 2021. In addition, the number of peer reviewed publications using Visum more than doubled during the year, while the number of preprints nearly quadrupled. Both of these are important leading indicators.

In addition, the number of peer review publications using cesium more than doubled during the year, while the number of pre prints nearly quadrupled.

Both of these are important leading indicators of market adoption.

Notably these papers are driven almost entirely by our customers with limited tenex input.

Speaker 2: Notably, these papers are driven almost entirely by our customers, with limited 10x input, demonstrating the success researchers are having with this...

Demonstrating the success researchers are having the vision.

Speaker 2: All these measures are clear signs that the benefits of vision are resonating with customers.

All of these measures are clear signs that the benefits of visual are resonating with customers.

And finally, we made significant investments to scale the company.

Speaker 2: And finally, we made significant investments to scale the company in anticipation of future growth. In 2021, we added nearly 400 employees to the team, with the majority of these hires in our R&D and commercial organizations, including our new dedicated team of 50 support special.

And the future growth.

In 2021, we added nearly 400 employees to the team, but the majority of these hires in our R&D and commercial organizations.

Our new dedicated team of tissue support specialists.

Speaker 2: We also drew our global footprint, scaling our R&D sites in California, Sweden, and Singapore, and taking on the expansion of sophisticated manufacturing facilities at our headquarters in Pleasanton, which we expect to open by year.

We also grew our global footprint scaling our R&D site in California, Sweden, and Singapore, and keeping all the expansion of sophisticated manufacturing facilities at our headquarters in Pleasanton, which we expect to open by year end.

We have always said the bulk of the best measure of our impact to the discoveries of customers make with our technologies.

Speaker 2: We can only say that one of the best measures of our impact is the discovery that customers make with our technology.

Speaker 2: This year, our customers published more than 1,300 new peer-reviewed papers, bringing the total to over 3,300 since the first publication in 2016.

This year, our customers published more than 1300, new peer reviewed papers, bringing the total to over 3300 since the first obligation in 2016.

As more research moves beyond exploratory studies to translational and disease oriented studies, featuring our products. These breakthroughs increasingly gain mainstream attention.

Speaker 2: As more research moves beyond exploratory studies to translational and disease-oriented studies featuring the products, these breakthroughs increasingly gain mainstream attention. Just recently, CNN showcased research on CAR-Cs curing patients with leukemia. The New York Times featured a study on long COVID, and axioms highlighted the cell census of the human motor cortex, a foundational step to revolutionize our understanding of neurodegenerative abuse. As we look ahead, our conviction and opportunities

Just recently <unk> showcased research and car Ts curing patients with leukemia.

<unk> features a soluble on long corvid and axiom highlighted the sell centers of the human motor cortex, a foundational step to revolutionize our understanding of Neurodegenerative disease.

As we look ahead, our conviction on opportunity is unwavering.

And we're continuing to build the company to drive high growth in the future.

Speaker 2: This starts with continued significant investments in our three complementary platforms, Chromium, Viseum, and Chromium.

This starts with continued significant investments in our three complementary platforms chromium buzzi managing them.

Speaker 2: We will also continue to invest in our commercial team and operations capabilities to support the success of these platforms in the future.

We will also continue to invest in our commercial team and operations capabilities to support the success of these platforms in the future.

Starting with R&D and product development, we're very excited about this year's product pipeline, which we have prioritized around two key areas.

Speaker 2: Starting with R&D and product development, we are very excited about this year's product development plan, which we have prioritized around two key areas.

Speaker 2: First, new products that enable increased adoption of chromium and bazium. And second, the acceleration of rasinium in sea supply.

First new products that enable increased adoption of chromium and vision and.

The acceleration of raising them and Ctrip platform.

Speaker 2: First on Chromium, while the platform is now a well-established leader in single cell analysis, we're still very early with this opportunity. I'm very optimistic about the long-term production.

First in chromium.

While this platform is now well established leader in single cell analysis, we're still very early with us opportunity, they're optimistic about the long term trajectory.

Our goal is to make single cell analysis is accessible to every biology lab in the world to me to be standard for most biological research.

Speaker 2: Our goal is to make single cell analysis accessible to every biology lab in the world, to make it the standard for most biological...

We will continue to invest to drive broad adoption remove bottlenecks and create more value for researchers around the world.

Speaker 2: We will continue to invest to drive broad adoption, remove bottlenecks, and create more value for researchers around the world.

With this in mind, we're really excited to launch our new fixed RNA profiling kept later this year.

Speaker 2: With this in mind, we're really excited to launch our new fixed RNA profiling kit later this year. This product addresses the critical need for many of our customers.

This product addresses a critical need for many of our customers.

Speaker 2: Today, single cell researchers must intricately plan their experiments to maintain cell viability from sample collection through to processing on our Chrome ML.

Are they single cell researchers integrally plan their experiment to maintain cell viability from sample collection through the processing our chromium instrument.

Speaker 2: This imposes a significant burden on our customers and is particularly difficult when working with human samples, which are essential in translational work.

This important a significant burden on our customers and this particular difficult when working with human samples, which are essential in translational workflows.

Whereas fixed RNA profiling, our customers will not be able to fix our tissue of the diamond collection storage and Empress.

Speaker 2: We'll fix RNA profiling kit. Our customers will not be able to fix their tissue at the time of collection, store it, and then proceed into their single cell workflow at a time of employment or choosing

Until their single cell workflow at a time and place of their choosing.

We believe this product has the potential to be transformative to our single cell franchise over the long term.

Speaker 2: We believe this product has the potential to be transformed by the single-cell franchise over the long term.

Speaker 2: In addition to workflow benefits, the fixed RNA profiling kit also delivers improved sensitivity and more efficient sequencing, built-in sample multiplexing capabilities, and efficient targeting to enable customers to focus on the genes most relevant to their research.

The workflow benefits the fixed RNA profiling. It also delivers improved sensitivity and more efficiency when thing built in sample multiplexing capabilities and efficient targeting to enable customers to focus on the jeans most relevant to their research.

We intend to launch this product exclusively on the chromium X series in mid 2022.

Speaker 2: We intend to launch this product exclusively on the Chromium X series in mid 2022.

We also look forward to the planned launch of our new barcode enabled and they're just not being or being product in the back half of the year.

Speaker 2: We also look forward to the planned launch of our new barcode-enabled antigen mapping, or BEAM product, in the back half of the year. The solution is built on top of the...

The solution is built on top of our new profile of the product.

Speaker 2: will allow researchers to analyze up to millions of B or T cells.

A lot of researchers that analyze at the millions of B or T cells.

Speaker 2: to determine their antigen binding at high flex and high resolution. Bye, everyone!

They're antigen binding at high <unk> and high resolution.

By virtue of its scale and resolution.

Speaker 2: BEAM has the potential to exponentially transform the process of antibody and peaceful discovery.

<unk> has the potential that could potentially transform the process of antibody and T cell discovery.

Now onto vision.

Speaker 2: We continue to invest aggressively to advance our leadership in spatial discovery.

We continue to invest aggressively to advance our leadership of the peso in discovery research. We believe the breath of our lives and roadmap is unrivaled and spatial analysis and we anticipate the robust series of launches starting in mid 2020 to focus on enabling wireless more samples and more resolution.

Speaker 2: We believe the breadth of our vision road map is unrivaled in spatial analysis and we anticipate the robust series of launches starting in mid-2022, focused on enabling more analyzed, more samples, and more revolution.

First we will enable simultaneous gene expression of high Plex protein analysis on the same tissue.

Speaker 2: First, we'll enable simultaneous gene expression and hyper-like protein analysis on the same gene.

Speaker 2: We will also add support for larger sketchy areas and an improved customer workflow for additional flexibility and access to more tissue.

We'll also add support for largest capturing areas and an improved customer workflow for additional flexibility and access to more tissues.

We believe these capabilities will create significant value for our customers and expect them to ship in mid 2022.

Speaker 2: We believe these capabilities will create significant value for our customers and expect them to ship in mid-2022.

Second we plan to ship our site instrument in the back half of the year, which will really simplify them visit workflow and significantly expand the number of tissue samples accessible to the platform and.

Speaker 2: Second, we plan to ship our site assist instrument in the back half of the year, which will really simplify the vision workflow and significantly expand the number of samples accessible to the blog.

Speaker 2: And finally, we're looking forward to giving customers the ability to go to much higher resolution with built-in HD.

And finally, we're looking forward to giving customers the ability to go to much higher resolution with Indian HD.

Speaker 2: VITIMHD will access the entire transcriptome across the entire tissue sample at single-cell scale.

Really you mentioned deal will access the entire transcriptome of course, the entire tissue sample at single cell scale.

Speaker 2: We believe this product will represent the single best platform for spatial discovery research and we expect to launch it near the end of 2022.

We believe this product will represent the single best platform for spatial discovery research and we expect to launch at the end of 2022.

Lastly, turning towards Union platform foreign seasonal analysis.

Speaker 2: Xenium will help customers analyze their tissues at an incredible level of detail once they know what genes they are using.

<unk> will help customers analyze their tissues and an incredible level of detail once they know what they're looking for.

Speaker 2: It will provide the ability to measure specific targets directly in tissue at high flux and high resolution with a fully integrated model.

We will provide the ability to measure specific targets directly in tissue high Plex and high resolution with a fully integrated workflow.

Speaker 2: Zhiyun is naturally complementary to both Chromium and Visio. It helps build on the insights from these platforms by providing the means for following up, validating, and deeply characterizing customer sound.

Is eating a nashville or complementary to both chromium vision. It helps build on the insights from these platforms, but providing the means for falling up validating and deeply characterizing customer samples.

Speaker 2: We're focused on building a robust platform that works across tissues, sample sets, and hydroPeRebel.

We're focused on building a robust platform that works across tissue samples.

And that high throughput.

Speaker 2: As we have done previously, our goal is to make Zinnium the industry standard by pursuing rapid innovation, application expansion, and excellent customer experience.

As we have done previously our goal is to make <unk> the industry standard by pursuing rapid innovation application expansion an excellent customer experience.

We anticipate that the integration of the customer experience across our three platforms will be particularly valuable to researchers.

Speaker 2: We anticipate that the integration of the customer experience across our three platforms will be particularly valuable to readers.

We have long believed that in tissue analysis represents a tremendous opportunity with potential to transform lifetime's research and ultimately clinical practice.

Speaker 2: We have long believed that in situ analysis represents a tremendous opportunity with potential to transform life science research and ultimately clinical products.

Speaker 2: Since we announced our plans to enter the space with acquisitions of Bartan and Ricor, there has been tremendous interest from our customers.

We announced our plans to enter the space with acquisitions of <unk> and <unk>, there's been tremendous interest from our customers.

Over the course of 2021, we intentionally prioritized and shifted resources Museum and we've made significant progress building on technology intellectual property, you acquired with our own together with our own innovations.

Speaker 2: Over the course of 2021, we intentionally prioritized and shifted resources to Xenium. We've made significant progress building on technology and intellectual property required together with our own community.

At the same time, the in situ opportunity has materialized SaaS or the way missile anticipated.

Speaker 2: At the same time, the in-situ opportunity has materialized faster than we initially anticipated. Based on our progress and the role of the in-situ program, we have been able to

Based on our progress and our robust interest from our customers.

We believe we can access this opportunity earlier than we previously planned.

Speaker 2: We believe we can access this opportunity earlier than we previously planned.

Speaker 2: We have invested additional resources to prioritize and teach you and accelerate our timeline.

We have invested in additional resources to prioritize and Ctrip and accelerated our time lines.

As a result, we plan to ship Veniam instruments by the end of this year.

Speaker 2: As a result, we plan to ship Xenium instruments by the end of this year.

While this means.

Speaker 2: While this means that some of our new products will launch somewhat later than we initially planned, we're confident in our strategy.

But some of our new products will launch somewhat later than we initially planned for.

We're confident in our strategy.

Speaker 2: Here, as in all our decisions, we are prioritizing the long-term view. That's been our philosophy since the earliest days of 10X and will continue to guide us moving forward.

Here as in all our decisions we are prioritizing the long term view.

That's been our philosophy since the earliest days of dynamics and will continue to guide us moving forward.

Yeah.

Speaker 2: Before I turn the call over to Justin, I want to be clear. Our conviction on the best opportunity ahead is as strong as ever. And we're well positioned to achieve it. While the path ahead may not be linear, we know what the end point is.

Before I turn the call over to Justin I want to be clear our conviction on the vast opportunity ahead is as strong as ever and we are well positioned to achieve it.

The path ahead may not doing here, we know what the endpoint is.

In the future the vast majority of tissue samples will need to be analyzed using the technologies we're building that.

Speaker 2: In the future, the vast majority of tissue samples will need to be analyzed using the technologies we're building.

Speaker 2: That vision drives a strategy as we continue to make investments in our foundation and innovate across the three platforms.

That vision drives our strategy as we continue to make investments in our foundation and innovate across our three platforms.

Speaker 2: That's how we will fulfill our mission, make the biggest impact, and transform the future of health in middle school.

That's how we will fulfill our mission to make the biggest impact and transform the future of health and medicine.

Speaker 2: With that, I will now turn the call over to Justin for more detail on our financials.

With that I will now turn the call over to Justin for more details on our financials.

Speaker 1: Thank you, Serge. Before addressing our outlook for 2022, I'll first walk through our fourth quarter and four-year results.

Thank you Serge.

Before addressing our outlook for 2022, I'll first walk through our fourth quarter and full year results.

Speaker 1: Total revenue for the three months ended December 31, 2021, was $143.5 million compared to $112.2 million for the prior year period, representing 28% increase year over year and a 15% increase quarter over quarter.

Total revenue for the three months ended December 31, 2021 was $143 5 million.

Compared to $112 2 million for the prior year period, representing 28% increase year over year, and a 15% increase quarter over quarter.

Consumables revenue was $122 4 million, which increased 27% over the prior year period.

Speaker 1: Consumables revenue was $122.4 million, which increased 27% over the prior year period.

Instrument revenue was $19 $4 million, which increased 38% over the prior year period.

Speaker 1: instrument revenue was $19.4 million, which increased 38% over the prior year.

Service revenue was $1 8 billion, which increased 6% over the prior year period.

Speaker 1: Service revenue was $1.8 million, which increased 6% over the prior year.

During the fourth quarter, we saw increasing headwinds related to the rise of the Arbitron variant as sales opportunities for labs in the more impacted areas were not realized due to staffing capacity slowdowns and generally increased uncertainty around near term operations. Some customers in Europe closed their labs early ahead of the holiday season.

Speaker 1: During the fourth quarter, we saw increasing headwinds related to the rise of the Omicron variant as sales opportunities for labs in the more impacted areas were not realized due to staffing capacity, slowdowns, and generally increased uncertainty around near-term operations. Some customers in Europe closed their labs early ahead of the holiday.

These impacts were particularly relevant for academic customers, who make up a large majority of our revenue.

Speaker 1: These impacts were particularly relevant for academic customers who make up a large majority of our revenue.

While overall this resulted in our revenue coming in at the lower end of our guidance range. The particular dynamics evident in our Q4 regional results.

Speaker 1: While overall this resulted in our revenue coming in at the lower end of our guidance range, the particular dynamics were evident in our Q4 regional results.

Speaker 1: Revenue for the Americas for the fourth quarter was $77.2 million, representing 35% growth over the prior year period.

Revenue for the Americas for the fourth quarter was $77 $2 million.

Representing 35% growth over the prior year periods.

Speaker 1: EMEA revenue for the fourth quarter was $34.7 million, representing 6% growth over the prior year period.

EMEA revenue for the fourth quarter was $34 7 million.

Representing 6% growth over the prior year period.

APAC revenue for the fourth quarter was $31 $6 million, representing 41% growth over the prior year period.

Speaker 1: APAC revenue for the fourth quarter was $31.6 million, representing 41% growth over the prior year period.

Turning to the rest of the income statement gross profit for the fourth quarter of 2021 was $115 9 million compared to a gross profit of $93 $3 million for the prior year period.

Speaker 1: Turning to the rest of the income statement, gross profit for the fourth quarter of 2021 was 115.9 million dollars compared to a gross profit of 93.3 million dollars for the prior year period. Gross margin for the fourth quarter was 81% compared to 83% for the fourth quarter of 2020.

Gross margin for the fourth quarter was 81% compared to 83% for the fourth quarter of 2020.

The gross margin decrease was driven primarily by the impact of shifting product mix, partially offset by decreased costs related to ramping our second manufacturing facility.

Speaker 1: The gross margin decrease was driven primarily by the impact of shifting product mix partially upset by decreased cost related to ramping our second manufacturing facility.

Speaker 1: Total operating expenses for the fourth quarter of 2021 were $131.8 million compared to $502.9 million for the fourth quarter of 2020.

Total operating expenses for the fourth quarter of 2021 or $131 8 million compared.

Compared to $502 $9 million for the fourth quarter of 2020.

Speaker 1: The decrease in operating expenses was primarily driven by lower in-process research and development expenses, as compared to the fourth quarter of 2020, which included a $406.9 million charge related to the acquisition of REAP.

The decrease in operating expenses was primarily driven by lower in process research and development expenses as compared to the fourth quarter of 2020, which included a $406 $9 million charge related to the acquisition of <unk>.

Speaker 1: The decrease was partially offset by increased operating expenses related to higher personnel expenses, including stock-based compensation, increased expenses related to equipment, facilities, and technology, and increased marketing.

The decrease was partially offset by increased operating expenses related to higher personnel expenses, including stock based compensation increased expenses related to equipment facilities and technology and increased marketing expenses.

Speaker 1: R&D expenses for the fourth quarter of 2021 were $61.9 million compared to $39.7 million for the fourth quarter of 2020, excluding in-process R&D expenses related to acquisition.

R&D expenses for the fourth quarter of 2021 were $61 9 million compared to $39 $7 million for the fourth quarter of 2020, excluding in process R&D expenses related to acquisitions.

Speaker 1: SG&A expenses for the fourth quarter were $69.9 million compared to $56 million for the fourth quarter of 2020.

SG&A expenses for the fourth quarter were $69 9 million compared to $56 million for the fourth quarter of 2020.

The increases in our R&D and SG&A expenses during the quarter were primarily due to increased personnel related costs as we continue to scale the organization.

Speaker 1: The increases in our R&D and STNA expenses during the quarter were primarily due to increased personnel-related costs as we continue to scale the organization.

Operating loss for the fourth quarter was $15 8 million compared.

Speaker 1: Operating loss for the fourth quarter was $15.8 million compared to a loss of $409.6 million for the fourth quarter of 2020 due primarily to the impact of lower in-process research and development.

Compared to a loss of $409 $6 million for the fourth quarter of 2020, due primarily to the impact of lower in process research and development expenses.

Speaker 1: This included $26.9 million of stock-based compensation for the fourth quarter of 2021, compared to $14.3 million for the fourth quarter of 2020.

This included $26 $9 million of stock based compensation for the fourth quarter of 2021 compared to $14 3 million for the fourth quarter of 2020.

Net loss for the period was $18 $4 million compared to a net loss of $415 6 million for the fourth quarter of 2020.

Speaker 1: Net loss for the period was $18.4 million compared to a net loss of $415.6 million for the fourth quarter of 2020.

Turning to our full year results.

Speaker 1: Total revenue for the full year ended December 31, 2021, was $490.5 million, compared to $298.8 million for 2020, representing a 64% increase.

Total revenue for the full year ended December 31, 2021 was $495 million compared to two $298 8 million for 2020, representing a 64% increase.

Consumables revenue was $418 7 million, an increase of 66% over the prior year.

Speaker 1: consumables revenue was $418.7 million and increased 66% over the prior year.

Speaker 1: instrument revenue was $64.5 million, an increase of 61% over the prior year.

Instrument revenue was $64 5 million and.

An increase of 61% over the prior year.

Speaker 1: service revenue was $7.3 million, an increase of 21% over the prior year.

Service revenue was $7 3 million, an increase of 21% over the prior year.

As of year end, we have sold a cumulative total of 3511 chromium instruments up 1099 instruments from 2000 and 412 instruments at the end of 2020, which represents a 46% increase in the cumulative instruments sold.

Speaker 1: As of year-end, we have sold a cumulative total of 3,511 chromium instruments, up 1,099 instruments.

Speaker 1: from 2,412 instruments at the end of 2020, which represents a 46% increase in the cumulative instrument sold.

Speaker 1: Pull through per instrument for 2021 was $142,000, increasing from $124,000 in 2020.

Pull through per instrument for 2021 was 142000 <unk>.

Increasing from $124000 in 2020.

The increase was primarily driven by a lessening impact from Covid in 2021, as compared to 2020, which more than offset the dilutive impact of our rapid increase in cumulative instruments sold during the year.

Speaker 1: The increase was primarily driven by a lessening impact from COVID in 2021 as compared to 2020, which more than offset the diluted impact of our rapid increase in cumulative instruments sold during the year.

Speaker 1: I should point out that with the emerging complexity of our product offerings, pull through per instrument is less relevant for us today than it was in the past given the expanding breadth of our portfolio and is not necessarily representative of trends in our business.

I should point out that with the emerging complexity of our product offerings pull through per instrument is less relevant for us today than it was in the past given the expanding breadth of our portfolio and is not necessarily representative of trends in our business for.

Speaker 1: For example, a number of our customers are purchasing Chromium X Series instruments as a replacement.

For example, Ah.

A number of our customers are purchasing chromium X series of instruments as a replacement.

Speaker 1: for our chromium controller and other of our solutions do not require a chromium instrument, both indicators of ways in which the reliability of the pull-through metric has been reduced.

For our chromium controller and other of our solutions do not require a correlated chromium instrument.

Indicators of ways in which the reliability of the pull through metrics has been reduced.

Speaker 1: Also, as we have said in the past, our consumables pull through is impacted by additional factors, including expanding utilization by our existing customers.

Also as we have said in the past our consumables pull through was impacted by additional factors, including expanding utilization by our existing customers the rate of new customer acquisition and the ramp of new customers utilization.

Speaker 1: the rate of new customer acquisition, and the ramp of new customers utilization.

Speaker 1: It is further impacted by the overall mix of Halo users and their ordering patterns.

It is further impacted by the overall mix of Halo to users and their ordering patterns.

Speaker 1: As our business, product lines, and customer composition have become more complex, we believe this metric represents an oversimplification of these different drivers and can obscure underlying trends in the business.

As our business product lines and customer composition have become more complex. We believe this metric represents an over simplification of these different drivers.

And Ken obscure underlying trends in the business.

Speaker 1: Our focus is to increase the utilization of our products and drive growth and overall consumables revenue.

Our focus is to increase the utilization of our products and drive growth in overall consumables revenue.

To assess our performance in these calls in addition to revenue. We also track the number of reactions sold in a given period.

Speaker 1: To assess our performance in these goals, in addition to revenue, we also track the number of reactions sold in a given period.

Speaker 1: During 2021, our customers bought over 310,000 reactions worth of consumables products. This was up from approximately 200,000 reactions in 2020 and represents an increase of 56% year over year.

During 2021, our customers bought over 310000 reactions worth of consumables products. This was up from approximately 200000 reactions in 2020 and represents an increase of 56% year over year.

Moving next to regional results for 2021 revenue for the Americas for the full year was $265 million, representing 66% growth over the prior.

Speaker 1: Moving next to regional results for 2021, revenue for the Americas for the full year was $265 million, representing 66% growth over the prior year.

Over the prior year.

Speaker 1: EMEA revenue for the full year was $108.5 million, representing 48% growth over the prior year.

EMEA revenue for the full year was $108 $5 million, representing 48% growth over the prior year.

Speaker 1: APAC revenue for the full year was $117 million, representing 77% growth over the prior year.

Revenue for the full year was $117 million, representing 77% growth over the prior year.

Gross profit for 2021 was $416 4 million compared to a gross profit of $244 million for 2020.

Speaker 1: Gross profit for 2021 was $416.4 million compared to a gross profit of $240.4 million for 2020.

Gross margin for 2021 was 85% compared to 80% for 2020.

Speaker 1: Gross margin for 2021 was 85% compared to 80% for 2020.

The increase in gross margin was primarily due to lower accrued royalties related to the bio Rad agreement, including a onetime reversal of $14 7 million of previously accrued royalties and decreased costs related to ramping our second manufacturing facility, partially offset by the impact of shifting product mix.

Speaker 1: The increase in gross margin was primarily due to lower accrued royalties related to the buy-rat agreement, including a one-time reversal of $14.7 million of previously accrued royalties and decreased costs related to ramping our second manufacturing facility, partially offset by the impact of shifting products.

Speaker 1: Total operating expenses for 2021 were $468.7 million compared to $774.5 million for 2020, which included $447.5 million in process R&D expenses related to the acquisitions of Cartana and report.

Total operating expenses for 2021 were $468 7 million compared.

Compared to $774 5 million for 2020, which included $447 5 million in process R&D expenses related to the acquisitions of Cortana and Greencore.

R&D expenses for 2021, with $211 8 million compared to $123 4 million for 2020, excluding $447 $5 million of in process R&D expenses related to the acquisitions of Cortana and Marine Corps.

Speaker 1: R&D expenses for 2021 were $211.8 million compared to $123.4 million for 2020, excluding $447.5 million of in-process R&D expenses related to the acquisitions of Cartana and Regent.

The increase was primarily attributable to increased personnel and stock based compensation expenses laboratory materials and supplies expense equipment and facilities costs.

Speaker 1: The increase was primarily attributable to increased personnel and stock-based compensation expenses, laboratory materials, supplies, expensed equipment, and facilities costs.

SG&A expenses for 2021 were $257 6 million compared to $202 3 million for the prior year.

Speaker 1: SGA expenses for 2021 were $257.6 million compared to $202.3 million for the prior year. The increase was primarily due to increased personnel and stock-based compensation expenses and marketing expenses partially offset by decreased litigation expenses.

Increase was primarily due to increased personnel and stock based compensation expenses and marketing expenses, partially offset by decreased litigation expense.

Operating loss for 2021 was $52 3 million compared to a loss of $534 $1 million for 2020.

Speaker 1: Operating loss for 2021 was $52.3 million compared to a loss of $534.1 million for 2020.

Speaker 1: Net loss for 2021 was $58.2 million compared to a net loss of $542.7 million for 2020.

Net loss for 2021 was $58 $2 million compared to a net loss of $542 7 million for 2020.

Speaker 1: We ended 2021 with $587 million in cash and cash.

We ended 2021 with $587 million in cash and cash equivalents.

Speaker 1: Turning to our outlook for 2022, we expect four-year revenue to be in the range of $600 million to $630 million, representing growth of 22% to 28% over full year 2021.

Turning to our outlook for 2022, we expect full year revenue to be in the range of 600 million to $630 million representing growth of 22% to 28% over full year 2021.

This range incorporates our latest views on our 2022 product launch timelines customer utilization trends and finally, the continuing impact of Amazon on our customers' operations and the resulting slowness, we have seen thus far to start the year.

Speaker 1: This range incorporates our latest views on our 2022 product launch timelines, customer utilization trends, and finally, the continuing impact of Omicron on our customers' operations and the resulting slowness we have seen thus far to start.

As surge noted we have made the decision to reposition some of our product launches in 2022.

Speaker 1: As Serge noted, we have made the decision to reposition some of our product launches in 2022. Most notably, we have focused internal resources to pull the Xenium launch forward, and this has caused modest delays in some launches planned in 2022. When combined with the impact from Omicron in the first quarter, these changes result in an expected slower rate of growth this year, particularly in the first half.

Most notably we are focused internal resources to <unk> forward and this has caused modest delays in some launches planned in 2022.

When combined with the impact from Abercrombie in the first quarter. These changes result in an expected slower rate of growth this year, particularly in the first half.

Speaker 1: These product launch decisions are made from a perspective that extends well into the future, and from that perspective, we believe these changes will drive more revenue overall and set us up to accelerate growth into 2023 and beyond.

These product launch decisions are made from our perspective that extends well into the future and from that perspective. We believe these changes will drive more revenue overall and set us up to accelerate growth into 2023 and beyond.

Looking at Q1 trends, we have seen a very slow start to the year, given continuing omicron headwinds and we believe it is unlikely that the decreased order activity. Thus far into Q1 will be made up in the future.

Speaker 1: Looking at Q1 trends, we have seen a very slow start to the year given continuing Omicron headwinds, and we believe it is unlikely that the decreased order activity thus far into Q1 will be made up in the future.

Speaker 1: As such, we expect to see Q1 to be a lower percentage of our annual revenue than in the past, with our best estimate in the high teens range compared to low 20s in 2019 and 2021. This has been reflected in our 2022 Annual Guidance Train.

As such we expect to see Q1 to be a lower percentage of our annual revenue than in the past with our best estimate in the high teens range compared to low Twenty's in 2019 and 2021.

This has been reflected in our 2020 to annual guidance range.

Speaker 1: There also remains continued supply chain and logistics risks that we have called out previously.

There also remains continued supply chain and logistics risks that we have called out previously and remain unpredictable.

Looking past Q1, we are optimistic about the remainder of the year as COVID-19 impacts began to abate and our newer product launches have an increasing impact on revenue, we expect to see an acceleration of growth in the back half of the year.

Speaker 1: Looking past Q1, we are optimistic about the remainder of the year. As COVID impacts began to abate and our newer product launches have an increasing impact on revenue, we expect to see an acceleration of growth in the back half of the year. So given the weakness we have seen so far this year, we expect 2022 to be more heavily, even more heavily weighted towards the back half than our historical trends would suggest, particularly towards Q4.

So given the weakness we have seen so far this year, we expect 2020 to be more heavily with even more heavily weighted towards the back half than our historical trends would suggest particularly towards Q4 in.

Speaker 1: In the past, we've seen about a 45%, 55% split between the first half and second half annual revenue. And this year, we expect about a 40%, 60%.

In the past, we've seen about a 45% 55% split between the first half and second half annual revenue and this year, we expect about a 40% 60% split.

Moving to gross margin, we expect that our gross margin will trend slightly lower from where we exited the year as our newly introduced products expand to become a larger percentage of our overall revenue.

Speaker 1: Moving to gross margin, we expect that our gross margin will trend slightly lower from where we exited the year as our newly introduced products expand to become a larger percentage of our overall revenue.

We plan to continue to invest across the business to support our growth within commercial we plan to expand the organization to nearly 500 commercial employees, including adding additional head count dedicated to increasing adoption of <unk> and preparing for the launch.

Speaker 1: We plan to continue to invest across the business to support our growth. Within commercial, we plan to expand the organization to nearly 500 commercial employees, including adding additional headcount dedicated to increasing adoption of Visium and preparing for the launch of our zenia.

Of our Xenial and <unk> platform.

Speaker 1: We also plan to invest in our R&D organizations to maintain our rapid pace of innovation.

We also plan to invest in our R&D organization to maintain our rapid pace of innovation.

Speaker 1: Finally, we are continuing to invest in the expansion of our manufacturing facility, located at our headquarters in Pleasanton, to ensure that we are able to deliver our market leading products to our customers.

Finally, we are continuing to invest in the expansion of our manufacturing facility located at our headquarters in Pleasanton to ensure that we are able to deliver our market leading products to our customers.

With $587 million in cash and cash equivalents as of yearend, we are exiting the year with a strong cash position.

Speaker 1: With $587 million in cash and cash equivalents as of year-end, we are exiting the year with a strong cash position.

Given our strong balance sheet, we are confident in our ability to execute on our current roadmap without raising additional capital.

Speaker 1: Given our strong balance sheet, we are confident in our ability to execute on our current roadmap without raising additional capital. At this point, our administrative team has a fairly solid continue to provide

At this point I'll turn it back to search.

Thanks, Justin.

Speaker 2: Thanks, Justin. Before we open it up to questions, let me reemphasize three key beliefs that I have about our.

Before we open it up to questions. Let me reemphasize three key believes that I have about our business.

First.

Speaker 2: First, we're very confident we will accelerate growth into 2023 and beyond. There are some temporary near-term headwinds reflected in our growth expectations for 2022, but our long-term story is fully intact.

We're very confident we will accelerate growth into 'twenty, two 'twenty three and beyond.

There are some temporary near term headwinds reflected in our growth expectations for 2022.

On a long term story is fully intact.

Second.

Speaker 2: Second, the chromium opportunity is huge. We are the clear leader in single cell analysis, and yet it's still early days. We're continuing to invest significantly to deliver on the full promise and potential of single cell biology.

The chromium opportunity is huge we're.

We are the clear leader in single cell analysis and the other is still early days, we're continuing to invest significantly to deliver on the full promise and potential of single cell biology.

Speaker 2: And third, we now expect to ship xenium this year. Our intent is for xenium to become the industry standard for in-situ analysis, just like chromium is for single cell. We believe the combination of our three platforms, chromium, grisium, and xenium, is a real differentiator that will create meaningful value for customers.

And third we now expect to ship this year.

When countries, Virginia to become the industry standard for in situ analysis, just like chromium is for single cell.

The combination of our three platforms chromium vision Museum is a real differentiator that will create meaningful value for customers.

We're looking forward to sharing more about opinions and a robust single cell and seasonal pipeline at next week's experienced events.

Speaker 2: We're looking forward to sharing more about Diniom and our robust single cell and spatial pipeline at next week's Experience event.

Okay.

Speaker 2: We've got the track record, the scale, and the team to deliver. I'm very proud of what we have built so far, and believe the strength of our innovation engine, commercial breadth, and operational capabilities positioned us incredibly well for the long term.

We've got the track record the scale and the team to deliver I'm very proud of what we have built so far and believe the strength of our innovation engine commercial breadth and operational capabilities position us incredibly well for the long term.

It's our employees, who make all this possible and I can't thank them enough for their tireless pursuit of our mission. We're still just getting started with that we will now open it up for questions operator.

Speaker 2: It's our employees who make all this possible, and I can't thank them enough for their tireless pursuit of our mission. We're still just getting started. With that, we will now open it up for questions.

Yeah.

Speaker 3: Thank you very much and as a reminder if you would like to ask a question please press star followed by one and the telephone keypad and if you change your mind it's star followed by two.

Thank you very much and as a reminder, if you would like to ask a question. Please press star followed by one telephone keypad. If you change your mind at stuff and if I take.

We do also kindly ask that participants ask only one question. What's your line is open and then if they wish to ask a follow up question. They register for that thank you.

Speaker 3: We do also kindly ask that participants ask only one question once their line is open and then if they wish to ask a follow-up question they will register for this. Thank you.

Our first question today comes from Tycho Peterson of Jpmorgan.

Speaker 3: Our first question today comes from Tycho Peterson of JP Morgan. Please go ahead with your question.

Please go ahead with your question. Thank you.

Yeah.

Hey, thanks.

Speaker 2: Hey, thanks. I'm going to start out with one on the guide. You know, you called out some headwinds here. You know, the 1205 guide is certainly worse than, you know, the sequential decline, even from some of the peers that have called out Omicron and some of the academic softness. So, can you maybe just, you know, help us think about how much of this is Omicron, how much is supply chain, how much is the reprioritization around the product launch?

I'm going to start out with one on the guide you called out some headwinds here.

<unk> guidance, certainly worse than the sequential decline even from some of the peers have called out that some of the academic softness. So can you maybe just help us think about how much of this is <unk> how much of a supply chain how much has been re prioritization around the product launches.

It's like Oh. This is this is Jeff I'll take that.

Speaker 4: If I go, this is Justin, I'll take that.

Speaker 1: So the guidance range that we're putting out right now is $600 million to $630 million, with a midpoint of $615 million. And keep in mind, this is an annual number, but there is a decent impact to Q1 that we've highlighted, with January being very slow and some slowness coming out of January as well.

So the guidance range that we're putting out right now is $600 million of $630 million with a midpoint of $615 million and keep in mind. This is an annual number.

But there is there there is a decent impact to Q1 that we've highlighted with January being.

January being very slow.

Some.

Some slowness coming out of January as well.

Speaker 1: And so that's shifting the overall the overall mix for the year in particular shifting more towards the back half than the first half But I would say that the impacts are

And so that's shifting the overall the overall mix for the year in particular shifting.

More towards the back half than the first half.

But I would say that the impacts are.

The first.

There are three main impacts are the impact of <unk>.

Speaker 1: There are three main impacts. The impact of Omicron, the impact of recent cohorts ramping more slowly, and that's being driven by the increase in payload users, and then also the acceleration in Xenium, basically pushing out some of the other...

The impact of recent cohorts are ramping more slowly and that's being driven by the increase in payroll users and then also the acceleration in <unk>.

Basically pushing out some of the other some of the other launches.

Speaker 1: And I would say that impacts to 2022 are spread pretty evenly across those three.

I'd say that impacts the 2022 our spread.

Pretty evenly across those across those three.

Speaker 1: But, you know, the Omicron impact, we definitely expect that to impact the first part of the year much more than the second.

The <unk> impact, we definitely expect that to <unk>.

Impact the first part of the year much more than the second half.

Speaker 2: And a follow up just on pipeline, you previously guided for GDM early access this year. So can you clarify what's changed on the timing? Are you talking full commercial launch? Earlier and then separately on chromium X and IX, how are you incentivizing customers to upgrade and what percentage you think would actually upgrade on the question this year?

And a follow up just on pipeline I know you previously guided for GBM early access this year. So I guess can you clarify what what's changed on the timing you talked me full commercial launch.

Earlier and then.

Separately, I'm chromium X and IX, how are you incentivizing customers to upgrade and what percentage do you think was actually up quite a few questions here.

Yeah, So I'll take that first one tycho so yeah to clarify we are shipping into commercial ship this year for xena.

Speaker 2: Yes, I'll take that first one. To clarify, we are shipping a commercial ship this year for Xenium.

Okay.

Speaker 2: And in terms of IAC incentivization for IACs and IACs, well, the customers have actually been coming to us and they've been naturally upgrading their instruments to a great extent than we expected so far. Going forward, the fact that our PICs RNA profiling kit will only be available on the IAC series is going to be a big motivator of which to drive their placement cycle.

And in terms of instead.

Incentive position <unk> well.

While the customers have actually been coming to us and they've been nationally are upgrading their instruments to a greater extent than we expected. So far going forward. Besides that are fixed on April filing could will only be available on <unk>.

On the <unk> on a curious theres going to be a big motivator of weeks that could drive a replacement cycle.

Speaker 5: Okay, but you're not able to give us any sense of what percentage of install base you think would upgrade and also implications around pull through.

Okay.

You are not able to give us any sense of what percentage of your installed base you can get upgraded and also implications are on pull through.

Okay.

Speaker 2: Well, our goal ultimately, I think that the vast majority of our install base will upgrade to the X series over time. To start with, I think we've got a large pool to go after. So you can think of, you know, in the near term probably half of the install base is pretty readily available. Of course, it'll take some time to upgrade to line up funding to...

Well so our goal ultimately I think that that's not the majority of our installed base upgrade to the X series overtime.

With that I think we've got a large pool to the other.

Walter.

So you can think of in the near term probably hobbled installed base, it's pretty readily available.

Of course, it will take some other times off grid.

The lineup funding to get.

Get comfortable with the new workflows, and so on but yeah, we feel pretty confident in terms of this.

Speaker 2: get comfortable with the new workflows and so on. But yeah, we feel pretty confident in terms of the upgrade cycle.

The upgrade cycle.

Speaker 2: It's way too early to talk about pull-through on the stage.

It's way too early to talk about the pull through.

On the on X with age.

Yeah.

Okay. Thank you.

Yeah.

Speaker 3: Our second question today comes from Derek De Bruyne of Bank of America. Derek your line is open please go ahead.

Our second question today comes from Derik de Bruin of Bank of America debit. Your line is open. Please go ahead.

Hey, great. Thank you and good afternoon, so I'm going to try to squeeze in three here. So I think the first one is.

Speaker 6: Hey, great. Thank you and good afternoon. So I'm going to try to squeeze in three here. So I think the first one is, you know, I appreciate that you don't think throughput or pull through, I'm sorry, is a viable measure anymore. And I can appreciate that. Just give me a change. But can you just give us some sense then on

Yeah, you know.

I appreciate that you're you don't think throughput or poultry I'm sorry is that.

As a viable measure anymore and I can appreciate that that's going to change, but can you just give us some sense than on.

Speaker 6: reactions then on how the older users, you know, the earlier cohorts ramped and then the newer cohorts. And I guess what are you doing or what do you think it's going to take to get the newer cohorts, you know, to accelerate like that? Is that, is that, yeah, I guess I'll start, I'll start there, stop there initially.

Reaction then on how the older users you know the earlier cohorts ramped and then the newer cohorts and I guess, what are you doing or what do you think it's going to take two.

Get the newer cohorts to accelerate like that is that is that.

Yeah, I guess I'll start I'll start there stop there.

Sure.

Speaker 1: Hey, Derek, this is Justin. I'll take that one. You know, as far as comparing the newer cohorts to the older cohorts and the differences in usage between them, you know, the first thing to understand is that just at a high level, on average, the newer cohorts are ramping slower than the earlier cohorts. But also, the newer cohorts are having an increasing percent of their overall users be Halo users.

Hey, Derik this is Justin I'll take that one.

As far as comparing the newer cohorts to the older cohorts and the differences in usage.

<unk>.

The first thing to understand is that just at a high level on average the newer cohorts are ramping are ramping slower than the earlier cohorts, but also.

The newer cohorts are having an increasing percent of.

Overall users behavior users and then when we look at Halo users and instrument users separately, we found that even in the newer cohorts to instrument users are ramping more similar to the.

Speaker 1: And then when we look at Halo users and instrument users separately, we found that even in the newer cohorts, instrument users are ramping more similar to the earlier users. And it's really that increasing percentage of Halo users whose purchasing is more sporadic, that is the difference between those cohorts. So are these still more silky shooting takeaways on my view? And if so, tell us what our focus is. There's a lot of new stuff coming at this point. There's all sorts of new stuff going on. And we're seeing over the years there, we've seen an increase in Door 3 growth eh? So who's alliances economically impacted? So will we miss some information that we need those innovation issues?

To the earlier users and it's really that increasing percentage of Halo users.

Whose purchasing this more sporadic.

That is the difference between those between those cohorts. So we're.

We're looking to convert.

Speaker 1: We're looking to focus on converting Halo users into instrument owners. We've seen that when a customer becomes an instrument owner, their growth is predictable and comparable to the past cohorts. And there's definitely a stickiness there in owning an instrument. And so in the near term, when you look at it on average,

<unk> focus on converting halo users in the instrument owners.

We've seen that when a customer becomes an instrument owner either growth is predictable and comparable to the to the past cohorts.

And there's definitely a stickiness there in <unk>.

And owning an issue.

And so in the near term when you look at it on average.

Speaker 1: It doesn't look as good because the overall average usage is coming down. But the good thing is that you can predict how those instrument owners behave. Then also, you've got an increasing amount of new customers that are coming in to basically single cell at an increasing rate. So you've got a larger pool of potential instrument owners that are coming in each quarter.

It doesn't it doesn't look as good because the.

The overall average usage is coming down but the good thing is is that you can predict how those instrument owners behave and then also you've got an increasing amount of new customers that are coming in.

To get to basically a single cell at an increasing rate and so you've got a larger pool of potential instrument orders that are coming in each quarter.

Yeah.

Speaker 6: So just to follow up on that, I mean, you had an impressive instrument placement number in 2021. How should we think about instruments for 2022? And does Xenium potentially cannibalize any of those?

So just to follow up on that I mean, you had a impressive instrument placement number in 2021, how should we think about instruments for 'twenty two.

And.

Does any of them potentially.

Potentially cannibalize any of those.

Speaker 6: you know, purchases of chromium in those products. I mean, just a little bit of discussion on the user, the end user for that. I don't think it does, but we'd just like some clarity.

Purchases of chromium and Thats product that being just a little bit of discussion on the user the end user for that I don't think it does but were just like some clarity.

Yes.

Speaker 1: So overall, we don't give guidance on the number of instrument placements. Let me just point out a few things to think about for 2021. I think there was two important factors in 2021 that drove the explosive instrument growth. We increased our install base over 45% from the previous year, from the 24-12.

So overall, we don't give we don't give guidance on a number of interesting placements, but let me let me just point out a few things to think about for 2021 I think there was two important factors in 2021 that it drove the explosive instrument growth.

We increased our installed base.

Over 45% from <unk> from the previous share from the 24 12.

Speaker 1: to over $3,500. But there's two important factors that drove that. One was the strategic price decrease on the chromium controller down to $35,000. And then the launch of the Chromium X and IX series instrument.

So we have over 3500, but theres two important factors that drove that one was the strategic price decrease on the chromium controller down to $35000 and then the launch of the chromium acts in IX series insurance and so.

Speaker 1: And so, you know, with close to 1100 placements last year compared to about 700 compared to 746 year before, it was a huge step up in annual placements. And so when you're thinking about placements this year, I think you've got to adjust for the spike that those two factors drove in 2021. But then I still think it's reasonable to assume some kind of growth on top of that.

With close to 1100 placements last year.

Impaired to about 700 compared to 746% year before it was a huge step up in.

Annual placements and so when you think about placements. This year I think you've got to adjust for the spike at those two factors drove in 2021, but then I still think it's reasonable to assume some kind of growth.

On top of that.

Speaker 7: And in terms of the Zina, very common question.

And in terms of.

The <unk> question.

Yeah.

So the so theres no yeah, we don't see any cannibalization in fact, just the opposite because that Dupont farmers are incredibly complementary and the use cases tend to be a very complementary what people used to kind of generate single cell datasets using chromium and then a follow up to characterize their samples.

Speaker 2: So there is no, yeah, we don't see any cannibalization. In fact, it's just the opposite, because the two platforms are incredibly complementary. And the use cases tend to be very complementary, where people use, kind of generate single cell data sets using chromium, and then follow up, characterize their samples, or we wouldn't see you using xenium. So we actually see more of a, kind of a synergistic model

Within <unk> Xenia them, so we actually see it more of a kind of a synergistic filings.

Anything else.

Yeah.

Great and then just one quick one you mentioned that this name was up grew twice the two X over it was the prior year.

Speaker 6: Great. And then just one quick one. You mentioned that Vizium was up, grew twice, did 2x over what it was the prior year. Can you give us a number of what the base was, just so we have some sense of where that number is as far as consumable?

Can you give us a number of what the base was just so we have some sense of where that number is as far as consumable.

Yeah.

Speaker 1: Derek, we don't break out Visium sales separately, but I can tell you that it's an increasing percentage of our overall revenue.

Hi, Derik, we don't breakout the same sales separately, but I can tell you that it's a an increasing percentage of our overall revenue.

Great.

Yeah.

Yeah.

Okay.

Tom Brennan of Kevin you have the next question. Please go ahead.

Speaker 3: Dan Brennan of Curran, you have the next question, please go ahead.

Great. Thank you I just wanted to start off with <unk>.

Speaker 8: Great, thank you. I just wanted to start off with a regional question. I know EMEA looks like it was in the quarter was certainly very weak up 6% versus America's in the APAC. So can you give a little color on maybe how EMEA trended in the quarter and if it's possible to give an update on the geographic kind of trends as we've got into 1Q.

Question EMEA it looks like it was.

In the quarter were certainly very weak up 6% versus Americas and APAC. So can you give a little color on maybe how EMEA trended in the quarter and what if it's possible to give an update on the geographic kind of trends as we got into <unk>.

Yeah.

Okay.

Speaker 1: Dan, this is Justin. I'll take that one.

Dan This is Justin I'll take I'll take that one so.

Speaker 1: You know, going along some comments that we made earlier on just the impact, the impact of Omicron in Q4, you know, we felt that we felt that the hardest in AMIA and, you know, Q, Q.

Going along with some comments that we made earlier on just the impact by the impact of <unk> in Q4, we felt that we felt that the hardest in EMEA.

And Q Q3 is typically seasonally slow in EMEA in Q4 is tinder.

Speaker 1: 3 is typically seasonally slow in EMEA, and Q4 is typically the best quarter of the year for EMEA. And in areas where Omicron was raging in the hot spots is where we saw the biggest impact, particularly with the academic customers. If EMEA had grown 30% year over year like the other regions,

Typically the best quarter of the year.

For EMEA and in areas, where I'm a crime.

Was raging in the hotspots is where we saw is where we saw the biggest impact, particularly with the academic academic customers, yes, it's EMEA had grown.

30% year over year like the other regions.

Speaker 1: Probably would have saw another 8 million plus worth of revenue in EMEA.

What I saw another.

$8 billion plus worth of revenue with the revenue in EMEA.

Speaker 1: And then I think, as you saw, AMR and APAC were particularly strong in Q4. We did see some impact in AMR on the East Coast due to Omicron. The West Coast was basically untouched.

And then I think as you saw.

<unk> and APAC were particularly strong in.

In Q4, we did see we did see some impact in <unk> on the east coast due to alcohol on the West Coast was.

Basically untouched during Q4 actually came in.

Speaker 1: during Q4 actually came in a little bit over what we had expected. So, saw the impact in Europe , saw the impact on the East Coast of the US. But then, even as Omicron has continued on within AMR, Q1 thus far has been slow.

Little bit over what we had what we had expected. So you saw the impact in Europe saw the impact on the East coast.

Of the U S. But then even as omicron has continued on with an EMR.

Q1, thus far has been has been slow basically.

Speaker 1: you know, basically in both AMR and AMIA.

In both AMR and EMEA.

Was there a second parts of that got it okay. Thank you.

Speaker 8: Yeah, no, I was just, no, I was looking for some update on interquarter, but I think you kind of answered it there that continued to be slow. Maybe one just back to Halo. Just is it possible to give us a sense of what the mix is? The Halo versus instrument owners?

Yeah, No I was just I was looking for some update on each quarter, but I think you've kind of answered it there that continues to be slow.

Maybe one just back to Halo.

Is it possible to give us a sense of what the mix is for Hal.

Robert instrument orders.

And owners.

Speaker 8: And is there a reason to think that, you know, the fact that you've got this increasing mix of halo, does that signify maybe the TAM?

And.

Is there any reason to think that the fact that you've got this increasing mix of Halo does that signify maybe the Tam.

Speaker 8: isn't as big because you've got customers who don't want to buy the box, but they'd rather just, you know, kind of generate single-cell office service. And then I'm just wondering what's the plan to reverse that trend?

Isn't it because you've got customers, who don't want to buy the box, but they'd rather just kind of.

Us.

Generating Lasalle office service and then I'm just wondering what what's the plan to reverse that trend.

Yes, Jason I'll start with some general commentary on a halo user so.

Speaker 1: If there is some, I'll start with some general commentary on Halo users. So, you know, basically the Halo users, when you look at them as a percent of the business, they're now they've been growing steadily. And so they're now over half of our customers, but they're less than half of our revenue.

Basically the Hilli users when you look at them as a percent.

The business, they're now they've been growing steadily and so they're now over half of our customers, but there are less than half of our revenue.

Yeah.

And so when you think about.

Speaker 1: And so when you think about the opportunity that presents to convert those Halo users over into instrument owners, it's an ever-growing opportunity the more Halo users that come in. And it's something that we focus on right now as well.

Just when you think about the opportunity that it.

Presents to convert those halo users over into instrument owners, it's an ever growing opportunity to more the more halo users that come in and it's something that we that we focus on right now as well.

Speaker 2: Yeah, and in terms of the time question, I think we actually take the opposite view based on our experience from actually the early days of the company. People who, they tend to come into the single cell ecosystem kind of initially.

Yeah and in terms of the town question I think last week, they said the opposite deal.

Based on our experience from the actually the early days of the company people, who they tend to come into the single cell ecosystem kind of initially sporadically and then over time kind of as they get grants as they get up to speed on the workflow of converting to more consistent users anomaly.

Speaker 2: Veradically, and then over time, kind of, as they get a grant, as they get up to speed on the workflow converted to more consistent users, and then they at that point attempt to buy instruments. So, we actually don't anticipate that that dynamic is going to change, which is part of the reason why we see this actually more of a.

Upon an attempt to buy instruments. So we actually don't anticipate does that dynamic is going to change which is part of the reason why we see this actually more of a.

Speaker 2: validation of the dam expansion and bullishness on the long term.

Validation of the Tam expansion.

And bullishness on the on the long term one thing I would point out there is sort of the trend of how quickly halos around and convert two instruments has slowed down significantly over the last two years, specifically since the beginning of the pandemic.

Speaker 2: One thing I would point out is the trend of how quickly Halo's ramp and convert to instruments has slowed down significantly over the last two years specifically since the beginning of the pandemic. Which is why again it's another sign that once you, and that's the reason right, these are the customers who have the greatest challenges of working through the logistics of actually accessing instruments to ramp up and to get trained. Oftentimes they get trained by other customers.

Which is why again, that's another sign that once you isn't it stands to reason right. These are the customers who have the greatest challenges of working through the logistics of actually accessing instruments.

Due to a ramp up to get trained all the time to get trained by other customers. So.

Speaker 2: So yeah, we see that those trends will naturally reverse. And in fact, just kind of based on the ramp up of our existing instrument cohorts, right, instrumental in cohorts, we expect very robust growth going forward.

So yeah, we see that that those tons will naturally reverse and in fact, just kind of based on the ramp up of our existing instrument cohorts right instrumental in cohorts.

We have robust growth going forward.

Yes.

Got it.

Speaker 8: Got it, if it's possible, one more just on the fact that you're pulling it forward, could you provide more color on what you're seeing or what you're hearing and the decision to pull it forward? I don't know if you've. Size the opportunity and or discuss the competitive profile, but any color on kind of what you're seeing and why and how you think it's going to play out. Thank you. I mean, so I look, I'm.

It was far from one more just on volume and the fact that you're pulling it forward could you provide more color on like what youre seeing or what you're hearing and the decision to pull it forward I don't know if you've.

Size the opportunity <unk> discuss the competitive profile, but any color on kind of what you're seeing and why and how you think it's going to play out. Thank you.

So look our view of in situ.

Speaker 2: So space was very bullish from the very beginning, right? That's why we made those acquisitions, that's why we started making those investments.

So space it was very bullish on the very beginning that's why we made those acquisitions and that's why we started making those investments back in the day, what has changed recently or kind of a almost exponential is just in terms of customer interest and it does give customer demands.

Speaker 2: back in the day. What has changed recently and kind of almost exponential is just the intensity of customer interest and intensive customer demand. We've been and you know we pride ourselves on partnering with our customers and working with them as much as we can to satisfy what their needs. And so that was that has been the primary driver. You know we've been making a lot of significant progress on the development side throughout 2021 and kind of recently we saw that.

We've done that and we pride ourselves on our.

Partnering with our customers and our AR and working with them as much as we can satisfy their needs and so that was that has been the primary driver we've been making a lot of.

The progress on the development side throughout 2021, and kind of recently with Philip out to a faster launch and we decided to take it.

Speaker 2: to a faster launch and we decided to take it.

Great. Thanks, Eric.

The next question comes from Stefan <unk> of Morgan Stanley . Please go ahead with your question.

Speaker 3: The next question comes from Tejas Savant of Morgan Stanley . Please go ahead with your question.

Hey, guys good evening.

Speaker 9: Hey guys, good evening. So just to kick things off, maybe I'll follow up on Dan's last question there. In terms of the pull forward of Xenium surge, how much of that was just driven by the realities of the evolving competitive landscape, given competitor launches expected here in the near term, and potentially some of these customers getting locked into their hardware decisions? Did that play a role at all?

Just to kick things off maybe I'll follow up on Dan's last question there in terms of the pull forward of Veniam Serge.

How much of that was just driven by the realities of the evolving competitive landscape.

Given competitor launches expected here in the near term and potentially some of these customers getting locked into the hardware decisions and and you know did that play a role at all.

Speaker 2: Well, we'd like to focus on customers, right? Less competitors. And that has been the driver for the decision. Again, from our internal development and the customer input, that's what we pay attention to more than anything else.

Well, we'd like to focus on our customers right a lessor of competitors.

And deaths that hasn't been the driver for the decision again for a lot of internal development and the customer in but.

That's what we pay attention to more than anything else.

Okay.

Speaker 9: Okay. And then Justin, going back to your install-based comments there on Halo users, etc. Is there any way to just look at this install base of yours, which is, you know, an impressive 3,500 units?

And then just going back to your installed base comments that around Halo users et cetera.

Is there any way to just look at this installed base of yours, which as you know an impressive 3500 units and and parse out how many of those are sort of active chromium units. You are in that 3500 unit installed base versus perhaps those that are.

Speaker 9: And parse out how many of those are sort of active Chromium units here in that 3500 unit install base versus perhaps those that are being underutilized because customers purchased them taking advantage of the lower price and haven't really ramped up, as well as some of these X and IX units, which you've noted in the past will take up to 12 months to really start driving pull-through.

Being underutilized because you know customers purchased them, taking advantage of the lower priced and haven't really ramped up.

As well as some of these X and IX units, which you've noted in the past will take up to 12 months to really start driving pull through.

Yes.

Speaker 1: So Tejas, we look at instrument owners by cohort, and we can track their usage over time.

Hey, Jess we look at it we look at instrument, we look at instrument owners by cohort and we can track their usage over time.

Speaker 1: And, you know, it's still really early for the customers that bought instruments last year. But from the initial indications that we have in these, you know, these first few data points that we're looking at, it's encouraging. It looks like they are tracking along the same path of previous instrument owners. But again, there's, you know, there's relatively few data points there. And so, you know, it is still pretty early.

It's still really early for the customers that bought instruments Ah <unk>.

Last year, but from the initial indications that we have and use. These first few data points that we're looking at it.

It is encouraging it looks like they are tracking along the same path of previous instrument owners, but again there is a you know there's relatively few data points there and so it is still it is still pretty early.

Speaker 9: Got it. And then one final one for me. Justin, can you just remind us of the split between academic and biopharma customers? And are you seeing any softness at all among your earlier stage biopharma customers in terms of CapEx purchase intentions and whatnot, given the market volatility? Or that's been a concern on investors' radars of late, given data points from some of the tools group here.

Got it.

And then one final one for me just can you just remind us of the split between academic and Biopharma customers and are you seeing any softness at all among your earlier.

Earlier stage Biopharma customers in terms of Capex purchase intentions, and whatnot, given the market volatility or that's been a concern on investors' radars off late given.

Data points from some of the tools group peer.

Yeah. So the the split that we see between academic and Biopharma is about.

Speaker 1: Yeah, so the split that we see between academic and biopharma is about 75 to 80% academic and about 20 to 25% biopharma. It can vary from quarter to quarter, but generally that's the overall split. And no, we haven't seen any of those notable differences that you're mentioning.

75% to 80% academic and about 20% to 25% Biopharma. It can it can vary from quarter to quarter, but generally that's the overall split and no we haven't seen any.

Any of those notable differences.

You were mentioning.

Got it thank you.

Your line is now I think that that Patrick.

Speaker 3: The line is now open for Patrick Donnelly of City. Please go ahead.

Patrick Donnelly of Citi. Please go ahead.

Hey, thanks for taking the questions.

Speaker 10: Hey, thanks for taking the questions. Maybe one on the academic customers, the impact of Omicron here. Can you just talk about, are you seeing things just being delayed and pushed out? Are you seeing orders not coming through, being canceled? I'm just curious if customers are starting to come back and you're starting to see orders pick back up. I mean, again, we've heard February's been a bit better. It doesn't sound that way for you guys. I'm just curious what the customer conversations are on the academic side.

Maybe one on the academic customers the impact of Omi Crone here can you just talk about are you seeing things just being delayed and pushed out are you seeing orders kind of not coming through being canceled I'm. Just curious if customers are starting to come back and we're starting to see orders pick back up.

I mean again, we've heard in February has been a bit better at the sound that way, including you guys I'm just curious what the customer conversations on the academic side.

Speaker 10: Not that there's gonna be a bolus of orders at the end of this, but are you seeing just pushouts and expectations that these come through in the next couple quarters?

Not that there's really a bolus of orders at the end of this but are you seeing just push outs with that expectations that these come through in the next couple of quarters.

Speaker 1: Hey, Patrick, I think you want to look at this with instruments and consumables differently. And so for instruments, those opportunities for instrument orders, those are those aren't lost. Those are still in our funnel. Our salespeople are engaged with those with those customers. And so, you know, for instrument orders, we think that those are merely pushed out.

Hey, Patrick I think you want to look at this with instruments and consumables differently.

So for instruments.

Opportunities for instant orders those are those aren't lost those are still in our funnel. Our salespeople are engaged with those those customers. So for instrument orders, we think that those are merely pushed out for.

Speaker 1: For consumable orders, if the customer is not in the lab or if it's in the lab for a reduced period of time, they're either not doing experiments or they're doing less experiments. And when they come back in the lab or when they come back full time, they're not going to speed up their projects or duplicate their projects to make up for the lost time. So that consumable spend is lost.

For consumable orders.

If the customer is not in the lab or if it's in the lab for a period of time.

They're either not doing experiments or they're doing less experiments and when they come back in the latter when they come back full time.

They're not going to speed up their projects or duplicate their projects to make up for the last time, so that consumable spend is lost.

Speaker 11: Yeah, maybe I'll just add Patrick to what's kind of going on now. Typically, and we unfortunately had two years to learn how this this kind of stuff works.

Yeah, maybe I'll just add that to whats kind of going on now you know typically in <unk>.

We've unfortunately had two years to learn how this stuff works.

We saw.

Our accounts in EMEA and essentially all of the U S were completely shut down to even us getting on site even support people. What we're seeing now is we're seeing customer engagements. We are getting back on site and then you start to see the opportunities at the same time. These customers are getting their biology that samples ready and then youll see more of the orders. So that's.

Speaker 11: Our accounts in EMEA and eventually all the US were completely shut down to even us getting on site, even support people. What we're seeing now is we're seeing customer engagements. We're getting back on site, and then we start to see the opportunities. At the same time, these customers are getting their biology set, samples ready, and then we'll see more of the order. So that's kind of the trend. But right now, we're definitely starting to see that engagement, which is the early indicator, which ultimately is trying to recover.

That's kind of the trend, but right now we're definitely starting to see that engagement, which is the early indicator, which ultimately.

As a sign of a recovery.

Yeah.

Speaker 10: Yeah, it's helpful. Thanks. And then, Justin, maybe one on the margin side, obviously talking about them trending a little lower in 22 here. Can you just talk through the levers? I know you called out new products being a bit dilutive. What are you seeing on supplier pricing? I know that was a bit of a headwind coming in kind of end of 21. Are you changing pricing at all to pass that along to customers? Maybe just talk through the levers on the margin side.

Yeah. That's helpful. Thanks, and then just maybe one on the margin side, obviously, you're talking about I'm trying to get a little lower than 22 here can you just talk through the levers I know you called out new products, they're being a bit dilutive, where do you see one supplier pricing I know that was a bit of a headwind coming in kind of end of 'twenty. One are you changing pricing at all are compatible.

Pass that along to customers, maybe just talk through the levers on the margin side in 'twenty two.

Speaker 1: Yeah, so just maybe to tackle the price increase first, the way we've already executed a price increase previously, a 5% increase on consumables, instrument list prices were unchanged. And as far as the cost pressures that we're seeing, you know, we are seeing those primarily on instruments, on components, chips.

Yeah, So just maybe to tackle the price increase for so we've already executed.

Our price increase previously a 5% increase on consumables instrument list prices, where we're.

Were unchanged and as far as the cost pressures that we're seeing.

We are seeing those pre.

Primarily on instruments on components.

Chips.

We're also seeing it on plastics as well and so our procurement teams have been have been working through that we've been doing spot buys we've been buying ahead and carrying more inventory in areas that we normally have a locking in P. O's earlier with suppliers.

Speaker 1: Also seeing it on plastics as well. And so, you know, our procurement teams have been working through that. We've been doing spot buys. We've been buying ahead and carrying more inventory in areas that we normally have. Locking in POs earlier with suppliers.

Speaker 1: But you know, we're not going to be able to mitigate everything. So I do expect.

But we're not gonna be able to mitigate everything so I do I do expect that.

Speaker 1: That is, the year continues, if the overall macro environment doesn't improve, we're going to see increased costs there. And then just the overall supply chain risks.

That as the year continues if.

The overall macro environment doesn't improve.

We're going to see we're going to see increase.

See increased costs, there and then just the overall supply chain risks overall.

Speaker 1: You know, shipping capacity, our products ship by cold chain with dry ice, and there's a service level that has to be met to deliver the product in a viable state. And so, you know, as there's pressures on just the logistics.

No shipping capacity, our products shipped by cold chain with dry ice in there. There's a service level that has to be matched to the deliver the product and that are viable state and so has there's pressures on just the logistics environment. Overall, you know, we're feeling that that we're doing that too.

Speaker 1: environment overall, you know, we're feeling that we're feeling that too.

Alright, thank you.

Oh.

Speaker 3: Our next question comes from Dan Arias of Stifo. Please go ahead with your question Dan.

Our next question comes from Dan Arias of Stifel. Please go ahead with your question Dan.

Afternoon, guys. Thanks, Serge can you just comment on new products. If I go back to your January 'twenty 'twenty. One presentation, you talked about targeted gene expression sell plex, the low throughput kit.

Speaker 8: Afternoon, guys. Thanks, Serge. Can you just comment on new products? If I go back to your January 2021 presentation?

Speaker 8: We talked about targeted gene expression, CellPlex, the low throughput kit, sixth RNA profiling, the X obviously, and then the cloud. Can you just talk about which one of these are underperforming, which ones are outperforming, and then which are kind of doing what you thought, and then where the launch or adoption timing has been pushed out? Because the new product angle was kind of a significant part of the thesis in 21. I just want to make sure I have it squared away as we enter 21.

Fixed RNA profiling the X obviously and then the cloud can you just talk about which one of these are underperforming.

Each ones are outperforming and then what you're kind of doing what you thought and then where the launch or adoption timing has been pushed out because of the new product angle was kind of a significant part of the thesis in 'twenty. One I just want to make sure I have it squared away as we enter 'twenty two.

Yeah.

Speaker 7: Yeah, so yeah, there's a number of products I would say we talked about in 2021. In terms of performance, I would say the products that have been somewhat more restricted I guess in their adoption. Certainly the low throughput kit, while it's nice to get people kind of ramped up, it's had a very limited track.

So yes, there's a number of products, obviously talked about it in 2020 one.

So in terms of performance I would say are.

They're probably somewhere that has been somewhat more restricted.

Restricted I guess in their adoption certainly the low throughput kids, while it's nice to get people kind of ramp that aims at the single cell ecosystem on Ram ramped up it's been a it has a very limited traction cellblocks has been doing reasonably well with certain segments of customers.

Speaker 2: Cellplex has been doing reasonably well with certain segments of customers, but not all across the board, I would say. The X has been doing better, as we've commented before, and I would say the Hydro Quick Kit has also been doing better compared to expectations.

But not all across the board I would say the answer but then better place. We've commented before and I will say that hydro <unk> has also been doing better.

Compared to expectations.

Speaker 2: And as far as your shift in the launch timeline, so fixed RNA profiling, that's probably one of the significant ones for sure that got pushed out relative to earlier timelines. And also on the bizium side, when we talk about cytosys or bizium-HC, those also got pushed out further.

And as far as your shifts and the launch timeline or fix RNA profiling, that's probably one of the significant ones.

For sure they got pushed out relative to earlier timelines and and also on the <unk> side. When we talk about side. That's the store visit H D are those also got pushed out further.

Further.

Speaker 2: as did the Beam product we talked about, one of the first I was talking about it.

And then the being the beam product, we talked about when we first started talking about it.

Yes, okay.

Speaker 8: Okay, and then Justin, just to go back to the guide, at the low end of the range, you're basically at the growth that you saw during 2020 when folks just were not at the lab for a big chunk of time, so.

Okay, and then just to just to go back to the guide you know adult at the low end of the range you're basically at the growth that you saw during 2021.

Folks just were not at the lab for a big chunk of time so.

Speaker 8: I guess at the risk of sounding incredulous, what could possibly make that happen, just given that the year-over-year comp is essentially the same?

Yeah, I guess at the risk of sounding incredulous, what could possibly make that happen just given that the year over year comp is essentially the same.

Yes, so for.

You got to keep in mind that.

Speaker 1: This is an annual number, and it incorporates what we've already seen thus far in Q1. And so, like I said, Q1 has started off very slow. If that, you know, we're starting to see, you know, increased signs of activity with customers now, but, you know, if the situation doesn't meaningfully improve, I think that we're looking down towards the, you know, the lower end of that range. And then also just if.

This is an annual number.

And it incorporates what we've already seen thus far in Q1, and so like I said Q Q1 has started off very slow.

If that were starting to see in <unk>.

Increased signs of activity.

With customers now, but you know.

If the situation doesn't meaningfully improve I think we're looking down towards the.

The lower end.

That range.

And then also just if.

Speaker 1: You know, new customers are ramping more slowly than they have in the past. So there's an increased slowdown there. And then also, just with some of the new product launches that we have, that they're

New customers are ramping.

More slowly than they have in the past that there is an increased slow down there and then also just with some of the new product launches.

So we have it there.

Our newer products if their growth rates decrease or some of the ones that we have planned for a mid year pushout home.

Speaker 1: our newer products if their growth rates decrease or some of the ones that we have planned for mid-year push-ups.

Okay. Thank you guys.

Okay.

Our next question comes from Mike Lawrie.

Speaker 3: Our next question comes from Mac Larrue of William Blair. Please go ahead.

William Blair.

Please go ahead.

Yeah.

Speaker 11: Hi, good afternoon. Curious if the willingness to push Visium HD says anything about where you think you're at with your current product offerings relative to others in the space. I know before you'd mentioned that some customers have held off buying Visium until the HD launch. So does this mean maybe you don't see as much of a risk in terms of those customers picking up something else in the interim? We'd be curious to get feedback on that.

Hi, good afternoon, I'm curious if the willingness to push.

Does it make Steve says anything about where you think you are at with your current product offering relative to others in the space, there, which I know.

Before you had mentioned that some customers have held off by enthusiasm until the HTM off. So does this mean, maybe you don't see as much of a risk in terms of those customers picking up something else in the interim.

Just curious what feedback on that.

So the decision to pull forward the xenia them as sort of independent of I would say that what we're seeing on the disease side of the world. So I just wanted to make that clear as far as those are the barriers of visa and purchases and we were supposed to be diminished yeah, there's definitely a signal.

Speaker 2: So the decision to pull forward the Xenium is sort of independent of, I would say, what we're seeing on the museum side of the world. So I just want to make that clear. As far as the sort of the patterns of vision versus and with respect to museum HD, there's definitely a significant amount of, you know, like number of customers who are expecting and really looking forward to HD. We see a lot of demand there and that is.

And the amount of like number of customers, who are studying I'm really looking forward to see we see a lot of demand there than it is to some extent.

Speaker 2: to some extent, you know, putting some pressure on the current fissium demand.

Putting some pressure on the current ASEAN demand.

Speaker 2: There are definitely customers who are fine using Vizium at the current resolution, but because it does provide a lot of valuable information, but the HD is looming out there as well, and for a lot of customers, it is the thing that they want.

There are definitely customers, who are fine using Bayesian with the current resolution.

But because it does provide a lot of a lot of valuable information about that.

<unk> is looming out there as well and for a lot of customers that is the thing that they want.

And we're very very excited about.

Speaker 11: Okay, and then following up on your comment about the number of X purchases being replacements for different instruments, how many or maybe what percent of X purchases have or IX have been replacements? And are customers moving tech exclusively or maybe still using both? I guess just trying to get a sense for how much this is expanding the market versus upgrading your install base.

Okay and then following up on your comment about the number of X purchases being replacement parts kits instruments, how many or maybe what percent of X purchases have or IX have been replacement.

And our customers moving teck exclusively or maybe spike in both I guess just trying to guess that's for how much. This is expanding the market versus upgrading their installed base.

Speaker 7: So as far as like the actual, out of all the access, the majority of those are actually going to new customers.

So as far as like that so that was the goal that says the majority of those are actually going to new customers.

Speaker 2: which again was not our expectation going in. And then.

Michigan was not our expectation going going out and then.

Yes.

Speaker 2: But also a fair amount of our existing customers are upgraded.

But also a fair amount of our existing customers are upgraded at the same time.

Speaker 1: or buying an incremental instrument or making it an X. Yeah, and we don't see examples of people not following the instrument, because the Chromium controller, if you bought an X, it would probably still be used, maybe given in the lab next door or something like that.

Or buying an incremental instrument in the bucket and we're making it.

And we don't see examples of people mothballing instruments, because that the chromium controller. If you bought it actually would probably still be used maybe given the lab next door or something like that.

Okay.

Okay. Thanks.

Yeah.

Speaker 3: Our final question this afternoon comes from Matt Sykes of Goldman Sachs. Matt, your line is open, please go ahead.

Our final question. This afternoon comes from Mac Sykes of Goldman Sachs. Your line is open. Please go ahead.

Great. Thanks for squeezing me in just two quick questions I'll ask them both upfront, but you had mentioned that the increase in Halo users is in part due to market expansion.

Speaker 12: Great, thanks for squeezing me in. Just two quick questions I'll ask both up front. You had mentioned that the increase in Halo users is in part due to market expansion. As you guys think about priorities going forward, how do you balance the desire to expand the market, but also manage that cohort mix to help drive higher utilization? And then specifically on those Halo users, I know you mentioned a little bit, but just any more color on how you incentivize those customers to own instruments and drive utilization higher?

As you guys think about priorities going forward, how do you balance that.

The desire to expand the market.

But also manage that cohort mix helped drive higher utilization and then specifically on those Halo users I know you mentioned a little bit, but just any more color on how you incentivize those customers to own instruments and truck utilization higher.

Yeah, so kind of on the on the second question I think a lot of it is just are you going to wrapping their usage being there.

Speaker 7: Yeah, so kind of on the second question, I think a lot of it is just wrapping their usage, being there, reaching out, what we've been doing since the beginning of the company, but the biggest thing is for them to start to ramp up and to get trained, whether it's by us specifically or by other customers.

Reaching out, but we've been doing kind of since the beginning of the company, but the biggest thing is for them to start.

It's just the ramp up and to get trained whether it's from from by us specific or a buyer, they're sort of buyout of customers already professional in single cell again. This has been a challenge in the like in the current environment for the last two years. When we were seeing nothing of data. So just to the extent of this environment kind of receive them gets better.

Speaker 2: already proficient on single cell. Again, this has been a challenge in the current environment for the last two years, and we're seeing that in the data. So just to the extent this environment kind of receives them and gets better, I think that will improve. We're also releasing products. So for example, the fixed RNA profiling kit is something that should be particularly helpful to customers who don't have instruments. And generally, all the products and protocols are releasing to help the customer experience, I think, will help drive.

I think that will improve we're also releasing products. So for the for example, the fixed RNA profiling together is something that shouldn't be particularly helpful. Depressed due to two customers, who don't have instruments and generally are.

Kind of the older products and protocols are really seem to help the customer experience I think will help.

Drive.

Speaker 2: drive the ramp up for people who are less proficient at using single cell and that's mostly hairline users.

Drive the ramp up for people, who are less proficient at using single cell and that's.

That's mostly haley users so like a lot of these things that we've been doing we're going to continue to do and we do anticipate that that's going to to.

Speaker 2: So like a lot of these things that we've been doing, we we're going to continue to do and we do anticipate that that's going to to to to accelerate the conversion from sort of lower rate that we've seen more recently. As far as kind of the prioritization that's been driving like kind of existing adoption versus expansion of the market. I mean, you know, obviously we're doing both.

To accelerate the conversion from sort of lower rate that we've seen more recently.

As far as kind of the prioritization, that's been driving a lot of kind of existing the adoption versus expansion of the market with obviously were doing both I think their side right now we're going to be focused on upgrading our installed fleet a little bit of a serious to some extent, we do think that the customers who have the.

Speaker 2: I think the fact, you know, right now we're going to be focused on upgrading our installed fleet with the X series. To some extent, we do think that the customers who have the X present lower lifetime value to us and the more advanced technology, there'll be better users. And so we do have this focus at this stage, but it's always kind of both, right? Expansion and doing more for our current customers.

Present, a lower lifetime value to us and there's some more advanced technology there'll be better users.

And so we do have this.

Focus at this stage, but you know, it's always kind of both but expansion.

Doing more for our coker and customers.

Got it thank you.

Speaker 3: Thank you. That concludes the questions on today's call and that concludes today's call. Thank you very much for joining us all today ladies and gentlemen. I hope you have a wonderful evening. You may now disconnect your lines.

Thank you that concludes the questions on today's call and that concludes today's call. Thank.

Thank you very much for joining us today, ladies and gentlemen, I hope you have a wonderful evening.

You may now disconnect your lines. Thank you.

Yeah.