Q2 2024 10x Genomics Inc Earnings Call

August 8, 2024

Kayla: Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I'd like to welcome everyone to the 10X Genomics Second Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Operator: Thank you for standing by.

Kayla: My name is Kayla, and I will be your conference operator today.

Kayla: Thank you for standing by. My name is Kayla and I will be your conference operator today. At this time, I'd like to welcome everyone to the 10X Genomics Second Quarter 2024 Earnings Conference Call.

Kayla: At this time, I'd like to welcome everyone to the 10X Genomics Second Quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Kayla: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star and one.

Kayla: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press the star and 1. I would now like to turn the call over to Cassie Corneau, Director of Investor Relations and Strategic Finance. You may begin.

Speaker Change: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press the star and 1.

Cassie Corneau: I would now like to turn the call over to Cassie Corneau, Director of Investor Relations and Strategic Finance. You may begin.

Cassie Corneau: Thank you, and good afternoon everyone. Earlier today, 10X Genomics released financial results for the second quarter and did June 30th, 2024. If you have not received this news release or if you would like to be added to the company's distribution list, please send an email to investors at 10X Genomics.com.

Cassie Corneau: Thank you and good afternoon, everyone. Earlier today, 10X Genomics released financial results for the second quarter ended June 30, 2024. If you have not received this news release, or if you would like to be added to the company's distribution list, please send an email to investors@10XGenomics.com. An archived webcast of this call will be available on the Investor tab of the company's website, 10XGenomics.com, for at least 45 days following this call.

Cassie Corneau: Thank you, and good afternoon, everyone.

Speaker Change: Earlier today, 10X Genomics released financial results for the second quarter ended June 30, 2024. If you have not received this news release, or if you would like to be added to the company's distribution list, please send an email to investors at 10xgenomics.com.

Cassie Corneau: An archive webcast of the call will be available on the investor tab of the company's website, 10X Genomics.com, for at least 45 days following this call. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainty that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties, and factors that could cause results to differ appears in the press release 10X Genomics issued today and in the documents and reports filed by 10X Genomics from time to time with the Securities and Exchange Commission.

Speaker Change: An archived webcast of this call will be available on the Investor tab of the company's website, 10XGenomics.com, for at least 45 days following this call.

Cassie Corneau: Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on such forward-looking statements. Additional information regarding these risks, uncertainties, and factors that could cause results to differ is included in the press release 10X Genomics issued today and in the documents and reports filed by 10X Genomics from time to time with the Securities and Exchange Commission.

Speaker Change: Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws.

Speaker Change: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements.

Speaker Change: Additional information regarding these risks, uncertainties, and factors that could cause results to differ appears in the press release 10X Genomics issued today and in the documents and reports filed by 10X Genomics from time to time with the Securities and Exchange Commission.

Cassie Corneau: 10X Genomics disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. Joining the call today are Serge Saxonov, our CEO and co-founder, and Justin McAnear, our Chief Financial Officer. We will host a question and answer session after our prepared remarks. We ask analysts to please keep to one question so that we may accommodate everyone in the queue. With that, I will now turn the call over to Serge.

Speaker Change: 10X Genomics disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.

Cassie Corneau: Joining the call today are Serge Saksinoff, our CEO and co-founder, and Justin McNair, our Chief Financial Officer. We will host a question-and-answer session after our prepared remarks.

Speaker Change: Joining the call today are Serge Saxonov, our CEO and co-founder, and Justin McAnear, our Chief Financial Officer.

Cassie Corneau: We ask analysts to please keep to one question so that we may accommodate everyone in the queue.

Speaker Change: We will host a question and answer session after our prepared remarks. We ask analysts to please keep to one question so that we may accommodate everyone in the queue. With that, I will now turn the call over to Serge.

Serge Saxonov: With that, I will now turn the call over to Serge. Thanks, Cassie. And good afternoon, everyone.

Serge Saxonov: Thanks, Cassie, and good afternoon, everyone. During today's call, I'll start with an overview of our second quarter performance across our portfolio of single-cell and spatial technology. Then I'll turn the call over to Justin for a more detailed look at our financials, and Outlook for the recipe. For the second quarter, total revenue grew 4% year over year and 9% quarter over quarter to $153 million.

Serge Saxonov: During today's call, I'll start with an overview of our second quarter performance. Of course, our portfolio of single cell and spatial technologies.

Serge Saxonov: Thanks, Cassie, and good afternoon, everyone.

Serge Saxonov: During today's call, I'll start with an overview of our second quarter performance across our portfolio of single-cell and spatial technologies.

Serge Saxonov: Then I'll turn the call over to Justin for a more detailed look at our financials, business trends, and outlook for the rest of the year. For the second quarter, total revenue grew 4% year over year and 9% quarter over quarter to 153 million dollars, and we were three casual positive quarters. We saw a strong demand for spatial consumables this quarter and a solid sequential increase in single-cell consumables. We continue to hear overwhelmingly positive feedback on Jamax and its performance, and our customers are further along in the transition from our next-gen assets than we expected. Within spatial, we saw continued consumable growth driven by Vizium HD and strong early demand for a Zinium Prime 5K product which we launched.

Serge Saxonov: Then, I'll turn the call over to Justin for a more detailed look at our financials, business trends, and outlook for the rest of the year.

Kayla: Thank you for standing by. My name is Kayla and I will be your conference operator today.

Serge Saxonov: And we were three cash flow positive in the quarter. We saw strong demand for spatial consumables this quarter and a solid sequential increase in single cell consumables. We continue to hear overwhelmingly positive feedback on GeoMAX and its performance, and our customers are further along in the transition from our NextGen assays than we expected. Within Spatial, we saw continued consumable growth driven by Visium HD and strong early demand for our Xenium Prime 5K product, which we launched in July.

Kayla: At this time, I'd like to welcome everyone to the 10X Genomics Second Quarter 2024 Earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star and one.

Justin McAnear: For the second quarter, total revenue grew 4% year-over-year and 9% quarter-over-quarter to $153 million, and we were three cash flow positive in the quarter.

Justin McAnear: We saw a strong demand for spatial consumables this quarter and a solid sequential increase in single-cell consumables.

Justin McAnear: We continue to hear overwhelmingly positive feedback on GeomAx and its performance.

Cassie Corneau: I would now like to turn the call over to Cassie Corneau, Director of Investor Relations and Strategic Finance. You may begin. Thank you and good afternoon everyone.

Justin McAnear: And our customers are further along in the transition from our NextGen assays than we expected.

Justin McAnear: Within Spatial, we saw continued consumable growth driven by Visium HD and strong early demand for our Zinium Prime 5K product, which we launched in June .

Cassie Corneau: Earlier today, 10X Genomics released financial results for the second quarter and did June 30th 2024. If you have not received this news release or if you would like to be added to the company's distribution list, please send an email to investors at 10X Genomics.com. An archive webcast of the call will be available on the investor tab of the company's website 10X Genomics.com for at least 45 days following this call.

Serge Saxonov: in June. Despite the strong demand for consumables, we're increasingly experiencing headwinds from the challenging macro environment, similar to many of our peers. Our customers are under budget pressure, which has most acutely resulted in cuts to cat-x budgets and elongated purchase cycles, impacting our instrument revenue, the squatter. We believe these macro factors and cautious customer spending patterns are likely to persist, putting particular pressure on instrument sales to specialist unions.

Serge Saxonov: Despite the strong demand for consumables, we're increasingly experiencing headwinds from the challenging macro environment, similar to many of our customers. Our customers are under budget pressure, which has most acutely resulted in cuts to CapEx budgets and elongated purchase cycles, impacting our instrument revenue this quarter. We believe these macro factors and cautious customer spending patterns are likely to persist, putting particular pressure on instrument sales, especially Xenia. As we look to the rest of 2024, we're lowering our revenue guidance, which we now expect to be in the range of $640 million to $660 million. Justin, we'll discuss this in greater depth.

Justin McAnear: Despite the strong demand for consumables, we're increasingly experiencing headwinds from the challenging macro environment, similar to many of our peers.

Justin McAnear: Our customers are under budget pressure, which has most acutely resulted in cuts to CapEx budgets and elongated purchase cycles, impacting our instrument revenue this quarter.

Cassie Corneau: Before we begin, I'd like to remind you that management will make statements during this call that are forward looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainty that could cause actual results or events to materially differ from those anticipated and you should not place undue reliance on forward looking statements. Additional information regarding these risks, uncertainties and factors that could cause results to differ appears in the press release 10X Genomics issue today and in the documents and reports filed by 10X Genomics from time to time with the Securities and Exchange Commission. 10X Genomics disclaims any intention or obligation to update or revise any financial projections or forward looking statements whether because of new information, future events or otherwise.

Justin McAnear: We believe these macro factors and cautious customer spending patterns are likely to persist, putting particular pressure on instrument sales, especially Zinions.

Serge Saxonov: As we look to the rest of 2024, we're lowering our revenue guidance, which we now expect to be in a range of $640 million to $660 million. Justin will discuss this in greater detail. Despite this near-term headwinds, we remain confident in our strength, differentiation, and long-term potential. Biology needs to be analyzed at the single-cell level in this initial context. We have built leading platforms for both single-cell and spatial biology. These are still nascent fields which are drawing growing interest from competitors. As we have always said, we operate in attractive spaces. There has always been competition and has been more recently.

Justin McAnear: As we look to the rest of 2024, we're lowering our revenue guidance, which we now expect to be in the range of $640 million to $660 million.

Justin McAnear: Justin will discuss this in greater detail.

Serge Saxonov: Despite these near-term headwinds, we remain confident in our strength, differentiation, and long-term potential. Biology needs to be analyzed at the single cell level in a spatial context. We have built leading platforms for both single cell and spatial biology. These are still nascent fields which are drawing growing interest from competitors. As we have always said, we operate in attractive spaces. There has always been competition, and there will be more.

Justin McAnear: Despite these near-term headwinds, we remain confident in our strength, differentiation, and long-term potential.

Justin McAnear: Biology needs to be analyzed at the single cell level in a spatial context.

Justin McAnear: We have built leading platforms for both single cell and spatial biology.

Cassie Corneau: Joining the call today are Serge Saksinoff, our CEO and co-founder and Justin McNair, our Chief Financial Officer. We will host a question and answer session after our prepared remarks. We ask analysts to please keep to one question so that we may accommodate everyone in the queue.

Justin McAnear: These are still nascent fields which are drawing growing interest from competitors.

Justin McAnear: As we have always said, we operate in attractive spaces.

Serge Saxonov: We plan our strategy anticipating this increase with the intent to both grow, yield, and stay ahead of new entrants. We firmly believe we're well-positioned for the opportunity ahead. We believe that 10X is differentiated by a significant technology leadership built over many years of multidisciplinary advances across micro-fluidics, chemistry, molecular biology, hardware, and software. We believe our solutions to several years ahead of our competitors, and our innovation engine is poised to ensure it stays that way. We have also built an extensive commercial and sales channel, highly skilled at tailoring solutions specific to customer needs. We're proud of our talented and passionate customer support teams who provide researchers with the best-poke assistance often required to run complex experiments.

Serge Saxonov: We planned our strategy anticipating this increase with the intent to boost growth, yield, and stay ahead of new... We firmly believe we're well positioned for the opportunity ahead. We believe that 10X is differentiated by significant technological leadership built over many years of multidisciplinary advances across microfluidics, chemistry, molecular biology, hardware, and We believe our solutions are several years ahead of our competition, and our innovation engine is poised to ensure it stays that way.

Justin McAnear: There has always been competition, and there has been more recently.

Justin McAnear: We planned our strategy anticipating this increase with the intent to both grow yield and stay ahead of new entrants.

Serge Saxonov: With that, I will now turn the call over to Serge. Thanks, Cassie, and good afternoon everyone. During today's call, I'll start with an overview of our second quarter performance across our portfolio of single-cell and spatial technologies.

Justin McAnear: We firmly believe we are well positioned for the opportunity ahead.

Speaker Change: We believe that 10x is differentiated by a significant technology leadership built over many years of multidisciplinary advances across microfluidics, chemistry, molecular biology, hardware, and software.

Serge Saxonov: Then I'll turn the call over to Justin for a more detailed look at our financials, business trends and outlook for the rest of the year. For the second quarter, total revenue grew 4% year-over-year and 9% quarter-over-quarter to $153 million and we were three casual positive quarter. We saw a strong demand for spatial consumables this quarter and a solid sequential increase in single-cell consumables. We continue to hear overwhelmingly positive feedback on GMACs and its performance and our customers are further along in the transition from our next-jump assays than we expected.

Justin McAnear: We believe our solutions are several years ahead of our competitors.

Justin McAnear: And our innovation engine is poised to ensure it stays that way.

Serge Saxonov: We have also built an extensive commercial and sales channel, highly skilled at tailoring solutions specific to customer needs. We're proud of our talented and passionate customer support teams who provide researchers with the bespoke assistance often required to run complex experiments. And our product roadmap has been intentionally designed to drive costs lower for researchers, especially those who are targeting large-scale projects or those new to 10X.

Justin McAnear: We have also built an extensive commercial and sales channel, highly skilled at tailoring solutions specific to customer needs.

Justin McAnear: We are proud of our talented and passionate customer support teams who provide researchers with the bespoke assistance often required to run complex experiments.

Serge Saxonov: And our product roadmap has been intentionally designed to drive costs lower for researchers, especially those for targeting large-scale projects or those new to 10X. We expect our product roadmap will remain a meaningful competitive advantage as we continue to execute against our plans to remove cost barriers and greatly lower cost per sample and cost per cell.

Justin McAnear: And our product roadmap has been intentionally designed to drive costs lower for researchers, especially those who are targeting large-scale projects or those new to 10X.

Serge Saxonov: Within spatial, we saw continued consumable growth driven by Vizium HD in strong early demand for a Xenium Prime 5K product which will launch.., in June. Despite the strong demand for consumables, we're increasingly experiencing headbands from the challenging macro environment, similar to many of our peers. Our customers are under budget pressure, which has most acutely resulted in cuts to cat-x budgets and elongated purchase cycles, impacting our instrument revenue this quarter. We believe these macro factors and cautious customer spending patterns are likely to persist, putting particular pressure on instrument sales, especially Xenia.

Serge Saxonov: We expect our product roadmap will remain a meaningful competitive advantage as we continue to execute against our plans to remove cost barriers and greatly lower cost per sample and cost. Now, let me share some more detail on recent developments across each of our platforms, beginning with Zinium, which is well recognized as the in-situ performer.

Justin McAnear: We expect our product roadmap will remain a meaningful competitive advantage as we continue to execute against our plans to remove cost barriers and greatly lower cost per sample and cost per cell.

Serge Saxonov: Now, let me share some more detail on recent developments across each of our platforms, beginning with Xenium, which is well recognized as the ENC to performance leader. This quarter will launch Xenium Prime 5K, increasing plex capability by an order of management while continuing to deliver our industry-leading performance. This new product, which measures 5,000 G's, features an enhanced chemistry to deliver excellent purgian sensitivity, improved specificity, and spatial fidelity, and integrated multimodal cell segmentation. We're highly encouraged by the initial order rate and early customer feedback. As I mentioned earlier, microeconomic pressures are having a meaningful impact on Xenium instrument cell.

Justin McAnear: Now, let me share some more detail on recent developments across each of our platforms, beginning with Xenium, which is well-recognized as the in-situ performance leader.

Serge Saxonov: This quarter, we'll launch Xenium Prime 5K, increasing PLEX capability by an order of magnitude, while continuing to deliver our industry-leading. This new product, which measures 5,000 genes, features an enhanced chemistry to deliver excellent per-gene sensitivity, improved specificity and spatial fidelity, and integrated multimodal cell signature. We are highly encouraged by the initial order rate and early customer. As I mentioned earlier, microeconomic pressures are having Despite the near-term headwinds, our view of the huge expected long-term potential for the Xenium platform is unchanged. We continue to receive outstanding feedback from, we're seeing encouraging trends in utilization across the instrument, and we've received a lot of interest from potential new customers. Many of them are new to 10X.

Justin McAnear: This quarter, we'll launch Xenium Prime 5K, increasing Plex capability by an order of magnitude, while continuing to deliver our industry-leading performance.

Justin McAnear: This new product, which measures 5,000 genes,

Justin McAnear: and Technology, Features and Enhanced Chemistry to Deliver Excellent Per Gene Sensitivity, Improved Specificity and Spatial Fidelity, and Integrated Multimodal Cell Segmentation.

Justin McAnear: We're highly encouraged by the initial order rate and early customer feedback.

Justin McAnear: As I mentioned earlier, macroeconomic pressures are having a meaningful impact on zinew instrument sales.

Serge Saxonov: Despite the near-term headwinds, our view of the huge expected long-term potential for the senior platform is unchanged. We continue to receive outstanding feedback from customers; we're seeing encouraging trans-enutilization across the instrument fleet. We receive a lot of interest from potential new customers, many of them, and new to 10X. And we're excited to see the emergence of numerous large-scale cohort studies that are aligning around senior. We also believe there is more we can do to deliver all this opportunity and to drive near-term performance, which is why we're expanding our dedicated senior instrument field team as part of our broader commercial strategy.

Justin McAnear: Despite the near-term headwinds, our view of the huge expected long-term potential for the Xenium platform is unchanged.

Justin McAnear: We continue to receive outstanding feedback from customers.

Justin McAnear: We're seeing encouraging trends in utilization across the instrument fleet.

Justin McAnear: We receive a lot of interest from potential new customers, many of them are new to 10X.

Serge Saxonov: And we're excited to see the emergence of numerous large-scale cohort studies that are aligning around GDP. We also believe there is more we can do to deliver on this opportunity and to drive near-term performance, which is why we're expanding our dedicated Xenium instrument sales team as part of our broader commercial strategy. With the extensive range of offerings on both Zemium and Vizium, we have multiple ways to support customers in their spatial biology. Our complementary yet distinct platforms support a broad spectrum of customers' use cases and accommodate the ways their research and research questions may evolve over time. Turning to Visium, the leading platform for unbiased spatial analysis,

Serge Saxonov: As we have always said, we operate in attractive spaces. There has always been competition and has been more recently. We plan our strategy anticipating this increase with the intent to both grow, yield, and stay ahead of new entrants. We firmly believe we're a well-positioned for the opportunity ahead. We believe that Xenax is differentiated by a significant technology leadership, built over many years of multidisciplinary advances across micro-politics, chemistry, molecular biology, hardware, and software.

Justin McAnear: And we're excited to see the emergence of numerous large-scale cohort studies that are aligning around Genium.

Justin McAnear: We also believe there is more we can do to deliver on this opportunity and to drive near-term performance, which is why we're expanding our dedicated Xenium instrument sales team as part of our broader commercial strategy.

Serge Saxonov: With extensive range of offerings on both senior and museum, we have multiple ways to support customers in their spatial biology research. Our complementary yet distinct platforms support a broad spectrum of customers' use cases and accommodate the ways their research and research questions may evolve over time.

Justin McAnear: With extensive range of offerings on both Xenium and Vizim, we have multiple ways to support customers in their spatial biology research.

Justin McAnear: Our complementary yet distinct platforms support a broad spectrum of customers' use cases and accommodate the ways their research and research questions may evolve over time.

Serge Saxonov: We believe our solutions to several years ahead of our competitors, and our innovation engine is poised to ensure it stays that way. We have also built an extensive commercial and sales channel highly-skilled and tailoring solutions specific to customer needs. We're proud of our talented and passionate customer support teams who provide researchers with the peaceful assistance often required to run complex experiments. And our product roadmap has been intentionally designed to drive costs lower for researchers, especially those who are targeting large-scale projects, or those new to Xenax. We expect our product roadmap will remain a meaningful competitive advantage, as we continue to execute against our plans to remove cost barriers and greatly lower cost per sample and cost per cell.

Serge Saxonov: Turning to Vizium, the leading platform for unbiased spatial analysis. Building a lot quarters, Vizium HD launch, Vizium consumables exceeded our expectation in Q2. As a reminder, Vizium HD enables whole transcriptome spatial analysis at single-cell scale resolution, and it has continued to drive our momentum for the platform. We're pleased with the positive feedback that we're receiving for Vizium HD based on its performance in the field. It is attracting both new and existing customers to spatial analysis. High customer interest for HD also contributed to the sustained demand for cytosist placements during the second quarter, despite cap-ax pressures on instruments.

Justin McAnear: Turn to Visium, the leading platform for unbiospatial analysis.

Serge Saxonov: Building on last quarter's Visium HD launch, Visium consumables exceeded our expectations. As a reminder, visMHG enables whole transcriptome spatial analysis at single cell scale resolution, and has continued to drive momentum for the platform. We're pleased with the positive feedback that we're receiving for Visium HD based on its performance in the field. It is attracting both new and existing customers to spatial analysis. High customer interest for HD also contributed to the sustained demand for site-assist placements during the second quarter, despite capex pressures.

Speaker Change: Building on last quarter's Visium HD launch, Visium consumables exceeded our expectations in Q2.

Justin McAnear: As a reminder, visMHG enables whole transcriptome spatial analysis at single-cell scale resolution.

Justin McAnear: and has continued to drive momentum for the platform.

Justin McAnear: We're pleased with the positive feedback that we're receiving from Visium HD based on its performance in the field.

Justin McAnear: It is attracting both new and existing customers to spatial analysis.

Justin McAnear: High customer interest for HD also contributed to the sustained demand for side assist placements during the second quarter, despite capex pressures on instruments.

Serge Saxonov: Now, let me share some more detail on recent developments across each of our platforms, beginning with Xenium, which is well recognized as the in-situ performance theater. This quarter will launch Xenium Prime 5K, increasingplex capability by an order of magnitude while continuing to deliver our industry-leading performance. This new product, which measures 5,000 genes, features an enhanced chemistry to deliver excellent protein sensitivity, improved specificity, and spatial fidelity, and integrated multimodal cell segmentation. We're highly encouraged by the initial order rate and early customer feedback.

Serge Saxonov: Our experience over the years has made it clear that an instrument like Cytosist is key to delivering a complete solution for customers. Cytosist is critical for enabling a robust and straightforward workload. One that allows customers to use standard histologist lives. Additionally, by ensuring consistency, precision, and preservation spatiality, cytosist is integral to high quality data and more accurate scientific results for customer experiments. Customers continue to discover the power of Vizium and wear enthusiastic body trajectory and its ability to broaden exploratory capabilities within spatial biology.

Serge Saxonov: Our experience over the years has made it clear that an instrument like Cytosys is key to delivering a complete solution for customers; side assist is critical for enabling a robust and straightforward process that allows customers to use standard histology slides. Additionally, by ensuring consistency, precision, and preservation of spatiality.

Justin McAnear: Our experience over the years has made it clear that an instrument like Cytosys is key to delivering a complete solution for customers.

Justin McAnear: SiteAssist is critical for enabling a robust and straightforward workflow, one that allows customers to use standard histology slides.

Justin McAnear: Additionally, by ensuring consistency, precision, and preservation, spatiality.

Serge Saxonov: Phytosys is integral to high-quality data and more accurate scientific results for customers' experiments. Customers continue to discover the power of Vizium, and we're enthusiastic about its trajectory and its ability to broaden exploratory capabilities within spatial biology. Now, turn to the single cell.

Justin McAnear: SiteAssist is integral to high-quality data and more accurate scientific results for customers' experiments.

Serge Saxonov: As I mentioned earlier, microeconomic pressures are having a meaningful impact on Xenium instrument sales. Despite the near-term headwinds, our view of the huge expected long-term potential for the senior platform is unchanged. We continue to receive outstanding feedback from customers, we're seeing encouraging trends in utilization across the instrument fleet. We receive a lot of interest from potential new customers, many of them, and new to 10X. And we're excited to see the emergence of numerous large-scale cohort studies that are aligning around Xenium.

Justin McAnear: Customs continue to discover the power of Vizium, and we're enthusiastic about its trajectory and its ability to broaden exploratory capabilities with spatial biology.

Serge Saxonov: Now, turn into single-cell. During the quarter, with a solid sequential growth in consumables revenue, we also delivered year-over-year growth in reaction sold. While there's still work to do to return Chromium to robust growth over the long term, this quarter's results reflect the underlying progress we're making in single-cell and the good momentum we have with the GemEx transition. More customers are now aware of and are impressed with GemEx and its superior sensitivity, throughput data quality, and cell recovery. All delivered at a lower cost per sample and per cell compared to our next-gen architecture. In the first two quarters since launch, the GemEx transition has progressed faster than we usually in.

Serge Saxonov: During the quarter, we saw solid sequential growth in consumables revenue, and we also delivered year-over-year growth in ReactionSol. Well, there's still work to do to return chromium to robust growth over the long term, but this quarter's results reflect the underlying progress we're making and the good momentum we have with GEM-X. More customers are now aware of and impressed with GEM-X and its superior sensitivity, throughput, data quality, and cell recovery, all delivered at a lower cost per sample and per cell compared to our NextGen architecture.

Speaker Change: Now, turn to single cell.

Speaker Change: During the quarter, we saw solid sequential growth in consumables revenue.

Speaker Change: We also delivered year-over-year growth in reaction sold.

Speaker Change: Well, there's still work to do to return chromium to robust growth over the long term.

Speaker Change: This quarter's results reflect the underlying progress we're making in single-cell and the good momentum we have with the GEM-X transition.

Serge Saxonov: We also believe there is more we can do to deliver all this opportunity and to drive near-term performance, which is why we're expanding our dedicated Xenium instrument field team as part of our broader commercial strategy. With extensive range of offerings on both Xenium and Vizium, we have multiple ways to support customers in their spatial biology research. Our complementary, yet distinct platforms support a broad spectrum of customers use cases and accommodate the ways their research and research questions may evolve over time.

Speaker Change: More customers are now aware of and are impressed with GEM-X and its superior sensitivity, throughput, data quality, and cell recovery.

Speaker Change: All delivered at a lower cost per sample and per cell compared to our NextGen architecture.

Serge Saxonov: In the first two quarters since launch, the Genomics transition has progressed faster than we initially anticipated, with more early adopters seeking out Genomics for its performance and cost advantages. Our Flex Assay also continues to gain traction with customers. Unknown Speaker In a recent independent benchmarking study from Genentech that compared 10 commercially available single cell technologies, Blogs exhibits the highest ranked performance. Researchers also called out FLEX for its unique ability to process FFB, which they wrote, greatly expands the reach of single-cell RNA-seq to access the vast catalogs of preserved clinical specimens.

Speaker Change: In the first two quarters since launch, the GEM-X transition has progressed faster than we initially anticipated.

Serge Saxonov: with more early adopters seeking out GMX for its performance and cost advantages. Our FLEX essay also continues to gain traction with customers. In a recently independent benchmarking study from Genentech that compared 10 commercially available single-solid technologies, FLEX exhibited the highest rank performance. Researchers also called out FLEX for its unique ability to process FFP tissues. Which they wrote greatly expands the reach of single-cell RNA-seq to access the vast catalogs of preserved clinical specimens. The opportunity and conflational is one of many reasons why we believe there is still a long runway ahead for single-cell. Large-scale projects also hold tremendous potential.

Speaker Change: with more early adopters seeking out Genomics for its performance and cost advantages.

Serge Saxonov: Turning to Vizium, the leading platform for unbiased spatial analysis. Building a lot of water's Vizium HD launch, Vizium consumables exceeded our activation in Q2. As a reminder, Vizium HD enables whole-transcript home spatial analysis at single-cell-scale resolution and has continued to drive momentum for the platform. We're pleased with a positive feedback to we're receiving for Vizium HD based on its performance in the field. It is attracting both new and existing customers to spatial analysis.

Speaker Change: Our FLEX assay also continues to gain traction with customers.

Speaker Change: In a recent independent benchmarking study from Genentech that compared 10 commercially available single-cell technologies, plugs exhibited the highest rank performance.

Speaker Change: Researchers also called out FLEX for its unique ability to process FFP tissues.

Speaker Change: which, they wrote, greatly expands the reach of single-cell RNA-seq to access the vast catalogs of preserved clinical specimens.

Serge Saxonov: The opportunity in translational research is one of many reasons why we believe there is still a long runway ahead for large-scale projects that hold tremendous potential. As we remove cost barriers, we expect to open up more possibilities for large-scale studies with more samples and more cells. A great example of this is the Garvin Institute's new 10K-10K project, which we announced earlier this week. 10K10K intends to use GEM-X to map 50 million human cells from 10,000 people and identify unique genomic fingerprints of autoimmune diseases, heart diseases, and cancer. In addition, we see the emergence of powerful new applications based on high-throughput single-cell approaches, from analyzing organoids, scaling CRISPR screens, to building out foundation models to enable AI-based modeling of biology.

Speaker Change: The opportunity and translational is one of many reasons why we believe there's still a long runway ahead per single cell

Serge Saxonov: High customer interest for HD also contributed to the sustained demand for cytosist placements during the second quarter despite cap-ax pressures on instruments. Our experience over the years has made it clear that an instrument like cytosist is key to delivering a complete solution for customers. Cytosist is critical for enabling a robust and straightforward workload. One that allows customers to use standard histologist lives. Additionally, by ensuring consistency, precision and preservation spatiality, cytosist is integral to high quality data and more accurate scientific results for customer requirements. Customers continue to discover the power of Vizium and we're enthusiastic about its trajectory and its ability to broaden exploratory capabilities within spatial biology.

Serge Saxonov: As we remove cost barriers, we expect to open up more possibilities for large-scale studies with more samples and more cells.

Speaker Change: Large-scale projects also hold tremendous potential.

Speaker Change: As we remove cost barriers, we expect to open up more possibilities for large-scale studies with more samples and more cells. A great example of this is the Garvin Institute's new 10K-10K project, which we announced earlier this week.

Serge Saxonov: A great example of this is the Garvan Institute's new 10K-10K project. Which we announced earlier this week. 10K-10K intends to use GMX to map 50 million human cells from 10,000 people, identify unique genomic fingerprints of autoimmune diseases, heart diseases, and cancer. In addition, we see the emergence of powerful new applications based on high throughput single-cell approaches, from analyzing organoids, scaling CRISPR extremes, to building out foundation models that enable AI-based modeling of biology. And as we've said all along, there's a large opportunity to democratize single-cell analysis by making it more accessible for new customers and more routine for existing customers.

Speaker Change: 10K10K intends to use GEM-X to map 50 million human cells from 10,000 people to identify unique genomic fingerprints of autoimmune diseases, heart diseases, and cancer.

Speaker Change: In addition, we see the emergence of powerful new applications based to high throughput single-cell approaches. From analyzing organized scaling CRISPRed screens to building out foundation models to enable AI-based modeling of biology.

Serge Saxonov: And as we've said all along, there is a large opportunity to democratize single cell analysis by making it more accessible for new customers and more routine for existing customers. Winnow price is an important consideration, both for new researchers taking on their first single cell experiments and current customers looking to scale towards larger and larger projects. As we've said before, our goal is to drive broader adoption and enable routine use by reducing customer costs and making our technologies more accessible. As part of our strategy, we have been working to drive down costs along multiple vectors, per cell, per sample, per experiment, per project.

Speaker Change: And as we've said all along, there's a large opportunity to democratize single-cell analysis by making it more accessible for new customers and more routine for existing customers.

Serge Saxonov: Now, turn into single-cell. During the quarter, with a solid sequential growth in consumables revenue, we also delivered year-over-year growth in reaction sold. While there's still work to do to return chromium to robust growth over the long term, this quarter's results reflect the underlying progress we're making in single-cell and the good momentum we have with the GemEx transition. More customers are now aware of and are impressed with GemEx and its superior sensitivity through put data quality and cell recovery.

Serge Saxonov: Winel price is an important consideration, both for new researchers taking on their first single-cell experiment and current customers looking to scale towards larger and larger projects. As we've said before, our goal is to drive broader adoption and enable routine use by reducing customer costs and making our technologies more accessible. As part of our strategy, we have been working to drive down costs along multiple vectors: per cell, per sample, per experiment, per project. We strongly believe in the elasticity of demand for our products, and we will continue to execute on our product roadmap to take advantage of this elasticity.

WinnowPrice: WinnowPrice is an important consideration both for new researchers taking on their first single-cell experiment and current customers looking to scale towards larger and larger projects.

Speaker Change: As we've said before, our goal is to drive broader adoption and enable routine use by reducing customer costs and making our technologies more accessible.

WinnowPrice: As part of our strategy, we have been working to drive down costs along multiple vectors, per cell, per sample, per experiment, per project.

Serge Saxonov: We strongly believe in the elasticity of demand for our products, and we will continue to execute on our product roadmap to take advantage of this elasticity. However, to truly deliver on the next phase of 10X growth and impact, we need to evolve our commercial organization. We're taking steps to improve our commercial execution, address recent challenges brought on by the increasing breadth and complexity of our business, and set us up to scale into the future. That starts with leadership.

WinnowPrice: We strongly believe in a elasticity of demand for our products and we will continue to execute on our product roadmap to take advantage of this elasticity.

Serge Saxonov: All delivered at a lower cost per sample and per cell compared to our next-gen architecture. In the first two quarters since launch, the GemEx transition has progressed faster than we knew so in, with more early adopters seeking out GMX for its performance and cost advantages. Our FLEX essay also continues to gain traction with customers. In a recently independent benchmarking study from Genentech that compared 10 commercially available single-salt technologies, FLEX exhibited the highest rank performance.

Serge Saxonov: To truly deliver on the next phase of 10X growth and impact, we need to evolve our commercial organization. We're taking steps to improve our commercial execution, address recent challenges brought on by the increasing breadth and complexity of our business, and set us up to scale into the future. That starts with the leadership.

Speaker Change: i

Speaker Change: To truly deliver on the next phase of 10X growth and impact, we need to evolve our commercial organization.

Speaker Change: We're taking steps to improve our commercial execution, address recent challenges brought on by the increasing breadth and complexity of our business, and set us up to scale into the future.

Serge Saxonov: Earlier today, we officially announced Minna Mustafa as our new Chief Commercial Officer. Following an extensive search, she joined 10X in 2022 to lead commercial operations and has done an exceptional job as our interim CCO. She has a clear vision for commercial strategy and has been rapidly implementing foundational processes to better enable the success of our customers and our company. Under MENA's leadership, we rigorously evaluated our sales structure to assess what's working well and what's needed.

Serge Saxonov: Earlier today, we officially announce Minna Mustafa as our new Chief Commercial Officer following an extensive surge. Minna joined on X in 2022 to lead commercial operations and has done an exceptional job as our interim CCO. She has a clear vision for commercial strategy and has been rapidly implementing foundational processes to better enable the success of our customers and our company. Under Minna's leadership, we've rigorously validated our sales structure to assess what's working well and what's needed for the future. We are now implementing a new organization structure, which we architected from the ground up to drive our next phase of growth and scale.

Speaker Change: That starts with the leadership.

Speaker Change: Earlier today, we officially announced Mena Mustafa as our new Chief Commercial Officer following an extensive search.

Speaker Change: Many joined 10X in 2022 to lead commercial operations and has done an exceptional job as our interim CCO.

Serge Saxonov: Researchers also called out FLEX for its unique ability to process FFB tissues, which they wrote greatly expands the reach of single-sale RNA-seq to access the vast catalogs of preserved clinical specimens. The opportunity and translational is one of many reasons why we believe there is still a long runway ahead for single-sale. Large-scale projects also hold tremendous potential. As we remove cost barriers, we expect to open up more possibilities for large-scale studies with more samples and more cells.

Speaker Change: She has a clear vision for commercial strategy and has been rapidly implementing foundational processes.

Speaker Change: to better enable the success of our customers and our company.

Speaker Change: Under MENA's leadership, we've rigorously evaluated our sales structure to assess what's working well.

Serge Saxonov: We are now implementing a new organization structure, which we architected from the ground up, to drive our next phase of growth and scale. Our new structure re-engineers how we go to market, with distinct themes explicitly focused on driving xenium instrument placement, expanding consumables utilization with existing customers, and Accelerating Adoption with Biopharma and New and Emerging Academics. This specialization also helps us to focus and deploy the right resources across our

Speaker Change: and what's needed for the future.

Speaker Change: We are now implementing a new organization structure which we architected from the ground up.

Serge Saxonov: Our new structure re-engineers how we go to market with distinct scenes explicitly focused on driving Zinium instrument placements, expanding consumables utilization with existing customers, and accelerating adoption with biopharma and new and emerging academic researchers. This specialization also helps us to focus and deploy the right resources across our platforms. I am confident these commercial changes will, over time, help us drive growth across the portfolio, open up opportunities with new customers and segments, and maximize our scale and impact. I couldn't be more excited to have been at the helm as we can change our work to build a premier commercial organization that delivers superior execution and superior results.

Speaker Change: to drive our next phase of growth and scale.

Serge Saxonov: A great example of this is the Garvin Institute's new 10K 10K project, which we announced earlier this week. 10K 10K intends to use GMX to map 50 million human cells from 10,000 people identify unique genomic fingerprints of autoimmune diseases, heart diseases, and cancer. In addition, we see the emergence of powerful new applications based on high throughput single-sale approaches, from analyzing organoids, scaling CRISPR screens to building out foundation models that enable AI-based modeling of biology.

Speaker Change: Our new structure re-engineers how we go to market, with distinct themes explicitly focused on driving xenium instrument placements.

Speaker Change: Expanding Consumables Utilization with Existing Customers

Speaker Change: and Accelerating Adoption with Biopharma and New and Emerging Academic Researchers.

Speaker Change: This specialization also helps us to focus and deploy the right resources across our platforms.

Serge Saxonov: I'm confident these commercial changes will, over time, help us drive growth across the portfolio, open up opportunities with new customers and segments, and Maximize Our Scale. I couldn't be more excited to have MENA at the helm, as we continue our work to build a premier commercial organization that delivers superior execution and superior results. Now, before I turn the call over to Justin, I want to take a moment to acknowledge the CFO transition we announced earlier this afternoon.

Speaker Change: I'm confident these commercial changes will over time help us drive growth across the portfolio, open up opportunities with new customers and segments, and maximize our scale and impact.

Serge Saxonov: And as we've said all along, there's a large opportunity to democratize single-sale analysis by making it more accessible for new customers and more routine for existing customers. Winel price is an important consideration, both for new researchers taking on their first single-sale experiment and current customers looking to scale towards larger and larger projects. As we've said before, our goal is to drive broader adoption and enable routine use by reducing customer costs and making our technologies more accessible.

Mina: I couldn't be more excited to have Mina at the helm, as we can change our work to build a premier commercial organization that delivers superior execution.

Serge Saxonov: Now, before I turn the call over to Justin, I want to take a moment to acknowledge the C-4 transition we announced earlier this afternoon. After nearly six years with 10X, Justin is moving on to another opportunity. Justin has been an incredible leader during his 10-year 10-X. He took us public, helped to scale the company, and built a strong financial profile that has generated tremendous revenue growth and positive cash flow. He has assembled a talented team that has contributed greatly to the fantastic culture we have today. On behalf of the board and everyone at 10X, I want to thank Justin for his immeasurable contributions and wishing the best of luck in his new role.

Speaker Change: and Superior Results.

Speaker Change: Now, before I turn the call over to Justin, I want to take a moment to acknowledge the CFO transition we announced earlier this afternoon.

Serge Saxonov: After nearly six years with 10X, Justin is moving on to another company. He has been an incredible leader during his tenure at 10X. He took us public, helped to scale the company, and built a strong financial profile that has generated tremendous revenue growth and positive cash flow. He's assembled a talented team and has contributed greatly to the fantastic culture we have today. On behalf of the board and everyone at 10X, I want to thank Justin for his immeasurable contributions and wish him the best of luck in his new career.

Serge Saxonov: As part of our strategy, we have been working to drive down costs along multiple vectors, per cell, per sample, per experiment, per project. We strongly believe in the elasticity of demand for our products and we will continue to execute on our product roadmap to take advantage of this elasticity.

Speaker Change: After nearly six years with 10X, Justin is moving on to another opportunity.

Speaker Change: Justin has been an incredible leader during his tenure at 10X.

Speaker Change: He took a spotlight, helped to scale the company and built a strong financial profile that has generated tremendous revenue growth and positive cash law.

Speaker Change: He's assembled a talented team and has contributed greatly to the fantastic culture we have today.

Speaker Change: On behalf of the board and everyone at 10X, I want to thank Justin for his immeasurable contribution.

Serge Saxonov: Adam Take will be joining 10X as our new Chief Financial Officer. Adam is a seasoned executive and strategic finance leader with more than two decades of experience in the life sciences tools industry. More recently, he served as the interim Chief Executive Officer at Somalogic and has also held a number of senior roles in the internal issue, including Vice President and General Manager of the molecular biology business. He brings a unique skill set across finance, strategy, business development, and general management, which will be mentally valuable to take 10X to the next scale. I'm very excited to welcome him to 10X.

Serge Saxonov: Adam Tick will be joining 10X as our new chief financial officer. Adam is a seasoned executive and Strategic Finance Leader with more than two decades of experience in the life sciences tools business. Most recently, he served as the Interim Chief Executive Officer at Somalogic, and has also held a number of positions at Thomas Fischer, including Vice President and General Manager of the Molecular Biology Business. He brings a unique skill set across finance, strategy, business development, and general management, which will be immensely valuable to take 10X to the next scale. I'm very excited to welcome him to Canada. With that, I'll turn it over to Justin.

Speaker Change: and wishing the best of luck in his new role.

Speaker Change: Adam Take will be going in tenags as a new chief financial officer.

Serge Saxonov: Earlier today, we officially announced Minna Mustafa as our new chief commercial officer following an extensive surge. Minna joined on X in 2022 to lead commercial operations and has done an exceptional job as our interim CCO. She has a clear vision for commercial strategy and has been rapidly implementing foundational processes to better enable the success of our customers and our company. Under Minna's leadership, we've rigorously validated our sales structure to assess what's working well and what's needed for the future.

Speaker Change: Adam is a seasoned executive.

Speaker Change: and a strategic finance leader with more than two decades of experience in the life sciences tools industry.

Speaker Change: More recently, he served as the interim chief executive officer at Sama Logic.

Speaker Change: and has also held a number of senior roles at Thurman Fisher, including vice president and general manager of the molecular biology business.

Speaker Change: It brings a unique skill set across finance, strategy, business development, and general management.

Speaker Change: which will be immensely valuable to take 10X to the next scale.

Serge Saxonov: We are now implementing a new organization structure which we architected from the ground up to drive our next phase of growth and scale. Our new structure re-engineers how we go to market with distinct themes explicitly focused on driving zineum instrument placements, expanding consumables utilization with existing customers, and accelerating adoption with biofarma and new and emerging academic researchers. This specialization also helps us to focus and deploy the right resources across our platforms. I am confident these commercial changes will over time help us drive growth across the portfolio, open up opportunities with new customers and segments, and maximize our scale and impact.

Justin McAnear: With that, let me turn it over to Justin. Thank you, Serge. It's been an honor to be part of the 10X team over the past six years. I'm extremely proud of how much we've accomplished and how much we have grown. From a single product company to a scaled organization with three leading platforms across single-cell and spatial biology.

Speaker Change: I'm very excited to welcome him to 10X.

Speaker Change: With that, let me turn it over to Justin.

Justin McAnear: It's been an honor to be part of the 10X team over the past six years. I'm extremely proud of how much we've accomplished and how much we have grown, from a single product company to a scaled organization with three leading platforms across single cell and spatial biology. This was not an easy decision to make.

Justin McAnear: Thank you, Serge.

Justin McAnear: It's been an honor to be part of the HMX team over the past six years.

Justin McAnear: I'm extremely proud of how much we've accomplished and how much we have grown. From a single product company to a scaled organization with three leading platforms across single cell and spatial biology.

Justin McAnear: This was not an easy decision to make. I continue to have deep conviction in Serge, the team, and the opportunity to accelerate the mastery of biology and advance human health. I firmly believe 10X will continue to lead and has a very bright future ahead.

Justin McAnear: I continue to have deep conviction in Surge, the team, and the opportunity to accelerate the mastery of biology and advance human health. I firmly believe 10X will continue to lead and has a very bright future ahead. I'll now turn to the quarterly results. I'll start by reviewing our financial results for the three months ended June 30th, 2024, and we'll then provide further details on our updated outlook for 2020. All growth rates provided will be on a year-over-year basis unless otherwise specified.

Justin McAnear: This was not an easy decision to make.

Justin McAnear: I continue to have deep conviction and surge, the team and the opportunity to accelerate the mastery of biology and advanced human health.

Speaker Change: I firmly believe 10X will continue to lead and has a very bright future ahead.

Justin McAnear: I'll now turn to the quarterly results. I'll start by reviewing our financial results for the three months and the June 30th, 2024, and will then provide further details on our updated outlook for 2024. All growth rates provided will be on a year-over-year basis, unless otherwise stated. Total revenue for the quarter was $153.1 million, up 4%, driven by stronger contributions from consumables, partially offset by lower instrument contributions. Looking at our revenue breakout, total consumables revenue was $123.4 million, up 10%. Spatial consumables revenue was $29.3 million, up 150%. This growth was driven primarily by continued enthusiasm for Visium HD as well as contributions from Zenium Prime 5K, which we started shipping at the end of Q2.

Justin McAnear: Total revenue for the quarter was $153.1 million, up 4%, driven by stronger contributions from consumables, partially offset by lower instrument contributions. Looking at our revenue breakdown, total consumables revenue was $123.4 million, up 10%, and Spatial Consumables revenue was $29.3 million, up 150%.

Speaker Change: I'll now turn to the quarterly results. I'll start by reviewing our financial results for the three months ended June 30, 2024, and will then provide further details on our updated outlook for 2024.

Serge Saxonov: I couldn't be more excited to have been at the helm as we can change our work to build a premier commercial organization that delivers superior execution and superior results.

Speaker Change: All growth rates provided will be on a year-over-year basis unless otherwise noted.

Speaker Change: Total revenue for the quarter was $153.1 million, up 4% driven by stronger contributions from consumables, partially offset by lower instrument contributions.

Serge Saxonov: Now, before I turn the call over to Justin, I want to take a moment to acknowledge the C-4 transition we announced earlier this afternoon.

Serge Saxonov: After nearly six years with 10X, Justin is moving on to another opportunity. Justin has been an incredible leader during his 10-year at 10X. He took us public, helped to scale the company, and built a strong financial profile that has generated tremendous revenue growth and positive cash flow. He has assembled a talented team that has contributed greatly to the fantastic culture we have today.

Speaker Change: Looking at our revenue breakout, total consumables revenue was $123.4 million, up 10%.

Speaker Change: Spatial Consumables Revenue was $29.3 million, up 150%.

Justin McAnear: This growth was driven primarily by continued enthusiasm for Visium HD, as well as contributions from Xenium Prime 5K, which we started shipping at the end of Q2. Chromium consumables revenue was $94.1 million, down 7% year over year, driven by continued customer transition to our new GEM-X products and prioritization of spatial experiments. We saw positive momentum in our chromium consumables results.

Speaker Change: This growth was driven primarily by continued enthusiasm for Visium HD as well as contributions from Xenium Prime 5K, which we started shipping at the end of Q2.

Justin McAnear: Chromium consumables revenue was $94.1 million, down 7% year over year driven by continued customer transition to our new GenX products and prioritization of spatial experiments. We saw positive momentum in our chromium consumables results this quarter. Sequentially, revenue was up 12% as customers worked through the stalling and trialling due to the GenX introduction in Q1. This transition is ongoing, and near-term we still expect the lower price of Genx to continue to drive some revenue pressure, but over time we believe there is elasticity that will more than offset the lower price.

Serge Saxonov: On behalf of the board and everyone at 10X, I want to thank Justin for his immeasurable contributions and wishing the best of luck in his new role.

Speaker Change: Chromium consumables revenue was $94.1 million, down 7% year-over-year, driven by continued customer transition to our new GEM-X products and prioritization of spatial experiments.

Serge Saxonov: Adam Take will be a seasoned executive and strategic finance leader with more than two decades of experience in the life sciences tools industry. More recently, he served as the interim chief executive officer at Somalagic, and has also held a number of senior roles at Thermal Fisher, including vice president in general manager of the molecular biology business. He brings a unique skill set across finance, strategy, business development, and general management, which will be mentally valuable to take 10X to the next scale. I'm very excited to welcome him to 10X.

Justin McAnear: sequentially, revenue is up 12% as customers work through the stalling and trialing due to the GEM-X introduction in Q1. This transition is ongoing, and near term, we still expect the lower price of GEM-X to continue to drive some revenue pressure, but over time, we believe there is elasticity that will more than offset the lower price. Moving on to instruments, total instrument revenue decreased 23% to $23.9 million. Chrome instrument revenue was $8.8 million, down 32% year over year, driven by fewer units sold, but up 12% sequentially. Spatial instrument revenue was down 17% to $15.1 million, primarily driven by a lower number of xenium instruments sold.

Speaker Change: We saw positive momentum in our Chromium consumables results this quarter.

Speaker Change: It's a quenchily, revenue was up 12% as customers worked through the stalling and trialing due to the gem X introduction and Q1.

Speaker Change: This transition is ongoing, and near term we still expect the lower price of GEM-X to continue to drive some revenue pressure, but over time we believe there is elasticity that will more than offset the lower price.

Justin McAnear: Moving on to instruments, total instrument revenue decreased 23% to $23.9 million. Chromium instrument revenue was $8.8 million, down 32% year over year, driven by fewer units sold, but up 12% sequentially. Spatial instrument revenue was down 17% to $15.1 million, primarily driven by lower number of Zenium instruments sold. Services revenue was $5.9 million, up 74%, primarily due to increased chromium service plan contracts. Looking at our revenue by geography, America's revenue grew 2% to $93.1 million, and Mia revenue grew 20% to $37.4 million, and revenue in APAC decreased 6% to $22.7 million. Turning to the rest of the income point, growth profit for the second quarter was $104.2 million compared to $99.6 million for the prior year period.

Speaker Change: Moving on to instruments, total instrument revenue decreased 23% to 23.9 million dollars.

Speaker Change: Chromium instrument revenue was $8.8 million, down 32% year-over-year, driven by fewer units sold but up 12% sequentially.

Speaker Change: Special Instrument Revenue, was down 17% to $15.1 million, primarily driven by lowered number of the Xenium Instruments sold.

Justin McAnear: From a single product company to a scaled organization with three leading platforms across single cell and spatial biology, this was not an easy decision to make. I continue to have deep conviction in Serge, the team, and the opportunity to accelerate the mastery of biology and advance him in health. I firmly believe 10X will continue to lead and has a very bright future ahead.

Justin McAnear: Services revenue was $5.9 million, up 74% primarily due to increased Chromium service plan contracts. Looking at our revenue by geography, America's revenue grew 2% to $93.1 million, EMEA revenue grew 20% to $37.4 million, and revenue in APAC decreased 6% to $22.7 million. Turning to the rest of the income statement, growth profit for the second quarter was $104.2 million compared to $99.6 million for the prior year period. Gross margin remained flat at 68% compared to the second quarter of 2020.

Speaker Change: Services revenue was $5.9 million, up 74% primarily due to increased Chromium service plan contracts.

Speaker Change: Looking at our revenue by geography, America's revenue grew 2% to 93.1 million dollars, and me and revenue grew 20% to 37.4 million dollars, and revenue in APAC decreased 6% to 22.7 million dollars.

Justin McAnear: I'll now turn to the quarterly results. I'll start by reviewing our financial results for the three months and the June 30th 2024, and we'll then provide further details on our updated outlook for 2024. All growth rates provided will be on a year-over-year basis unless otherwise Total revenue for the quarter was $153.1 million, up 4% driven by stronger contributions from consumables partially offset by lower instrument contributions. Looking at our revenue breakout, total consumables revenue was $123.4 million, up 10%.

Speaker Change: Turning to the rest of the income's point, Gross profits for the second quarter was $104.2 million, compared to $99.6 million for the prior year period. Gross margin remains flat at 68% compared to the second quarter of 2023.

Justin McAnear: Growth margin remained flat at 68% compared to the second quarter of 2023. Total operating expenses for the second quarter decreased to $146 million compared to $163 million for the prior year period. This decrease was primarily driven by lower personnel expenses, including stock-based compensation expense, and a decrease in laboratory materials and supplies. R&D expenses decreased to $62.9 million compared to $71.5 million for the prior year period, primarily driven by lower laboratory materials and supplies. S-T&A expenses decreased to $83 million compared to $91.5 million for the prior year period, primarily driven by lower personnel expenses, including stock-based compensation.

Justin McAnear: Total operating expenses for the second quarter decreased to $146 million compared to $163 million for the prior year period. This decrease was primarily driven by lower personnel expenses, including stock-based compensation expense, and a decrease in laboratory materials and supplies. R&D expenses decreased to $62.9 million, compared to $71.5 million for the prior year period, primarily driven by lower laboratory materials and supplies. SG&A expenses decreased to $83 million, compared to $91.5 million for the prior year period, primarily driven by lower personnel expenses, including stock-based compensation.

Speaker Change: Total operating expenses for the second quarter decreased to $146 million compared to $163 million for the prior year period.

Speaker Change: This decrease was primarily driven by lower personal expenses, including stock-based compensation expense and a decrease in laboratory materials and supplies.

Justin McAnear: Spatial consumables revenue was $29.3 million, up 150%. This growth was driven primarily by continued enthusiasm for Vizium HD as well as contributions from Zenium Prime 5K which we started shipping at the end of Q2. Chromium consumables revenue was $94.1 million, down 7% year over year driven by continued customer transition to our new GenX products and prioritization of spatial experiments. We saw positive momentum in our Chromium consumables results this quarter. Sequentially, revenue was up 12% as customers worked through the stalling and trialling due to the GenX introduction in Q1.

Speaker Change: R&D expenses decreased to $62.9 million, compared to $71.5 million for the prior year period, primarily driven by lower laboratory materials and supplies.

Speaker Change: Expenses decreased to $83 million, compared to $91.5 million for the prior year period. Primarily driven by lower personnel expenses, including stock-based compensation.

Justin McAnear: This transition is ongoing, in near term we still expect the lower price of GenX to continue to drive some revenue pressure, but over time we believe there is elasticity that will more than offset the lower price.

Justin McAnear: Operating loss for the second quarter was $41.7 million, compared to a loss of $63.4 million in the second quarter last year. This includes $38.5 million of stock-based compensation, as compared to $45.7 million of stock-based compensation for the corresponding prior year period. The net loss for the period was $37.9 million compared to a net loss of $62.4 million for the second quarter of 2020. We ended the quarter with $380.1 million in cash and cash equivalents and marketable security, venerating $8.3 million of cash.

Justin McAnear: Operating loss for the second quarter was $41.7 million compared to a loss of $63.4 million in the second quarter last year. This includes $38.5 million of stock-based compensation as compared to $45.7 million of stock-based compensation for the corresponding prior year period. Net loss for the period was $37.9 million compared to a net loss of $62.4 million for the second quarter of 2023.

Speaker Change: Operating loss for the second quarter was $41.7 million compared to a loss of $63.4 million in the second quarter last year.

Speaker Change: This includes $38.5 million of stock-based compensation, as compared to $45.7 million of stock-based compensation for the corresponding prior year period.

Speaker Change: Net loss for the period was $37.9 million compared to a net loss of $62.4 million for the second quarter of 2023.

Justin McAnear: We ended the quarter with $388.1 million in cash and cash equivalents and marketable securities, generating $8.3 million of cash in the quarter. Turning to our outlook for the rest of the year, as Serge mentioned at the beginning of the call, we now expect full-year revenue to be in the range of $640 million to $660 million, representing 5% growth over full-year 2023 at the midpoint. Our updated guidance reflects impacts from macro-level factors and the commercial restructuring.

Justin McAnear: Moving on to instruments, total instrument revenue decreased 23% to $23.9 million. Chromium instrument revenue was $8.8 million, down 32% year over year driven by fewer units sold, but up 12% sequentially. Spatial instrument revenue was down 17% to $15.1 million, primarily driven by lower number of Zenium instruments sold. Services revenue was $5.9 million, up 74%, primarily due to increased Chromium service plan contracts. Looking at our revenue by geography, America's revenue grew 2% to $93.1 million, and Mia revenue grew 20% to $37.4 million, and revenue in APAC decreased 6% to $22.7 million.

Speaker Change: We ended the quarter with $380.1 million in cash and cash equivalents and marketable securities, venerating $8.3 million of cash in the quarter.

Speaker Change: Turning to our outlook for the rest of the year, as Serge mentioned at the beginning of the call, we now expect full-year revenue to be in the range of $640 million to $660 million. Representing 5% growth over full-year 2023 at the midpoint.

Serge Saxonov: Our updated guidance reflects impacts from macro-level factors and the commercial restructuring.

Justin McAnear: I'll start with the macro-level factors. In this environment, we've seen many customers experience budgetary pressures and uncertainties. This has mostly been on the CapEx side, with spending constraints at elongated sales cycles. We expect these headwinds to continue for the remainder of the year.

Justin McAnear: In this environment, we've seen many customers experience budgetary pressures and uncertainty. This has mostly been on the CAPEX side with spending constraints and elongated sales. We expect these headwinds to continue for the remainder of the year. Additionally, under MENA's leadership, we are executing on a new sales model that improves how we support our customers. We believe these new functions, roles, and territories may cause some near-term disruption while laying the foundation for long-term growth. While these factors may have near-term impacts on revenue, we continue to have full confidence in the strength of our platforms to deliver strong long-term growth.

Speaker Change: I'll start with the macro level factors. In this environment, we've seen many customers experience budgetary pressures and uncertainties.

Speaker Change: This has mostly been on the capex side with spending and constraints at elongated civil cycles.

Justin McAnear: Additionally, under MENA's leadership, we are executing on a new sales model that improves how we support our customers. We believe these new functions, roles, and territories may cause some near-term disruption while laying the foundation for long-term growth. While these factors may have near-term impacts on revenue, we continue to have full confidence in the strength of our platforms to deliver strong long-term growth. When looking out over the next 12 months, we continue to anticipate about $15 million to $20 million of total capital expenditures. We also continue to maintain cash discipline in 2024 and in our 2025 planning.

Speaker Change: We expect these headwinds to continue for the remainder of the year.

Speaker Change: Additionally, under MENA's leadership, we are executing on a new sales model that improves how we support our customers. We believe these new functions, roles, and territories may cause some near-term disruption while laying the foundation for long-term growth.

Justin McAnear: Turning to the rest of the income point, growth profit for the second quarter was $104.2 million, compared to $99.6 million for the prior year period. Growth margin remained flat at 68% compared to the second quarter of 2023. Total operating expenses for the second quarter decreased to $146 million, compared to $163 million for the prior year period. This decrease was primarily driven by lower personnel expenses, including stock-based compensation expense, and a decrease in laboratory materials and supplies.

Speaker Change: While these factors may have near-term impacts on revenue, we continue to have full confidence in the strength of our platforms to deliver strong long-term growth.

Justin McAnear: Looking out over the next 12 months, we continue to anticipate about $15 million to $20 million of total capital expenditure. We will also continue to maintain cash discipline in 2024 and in our 2025 plan. Our goal is to self-fund our innovation and scale by investing cash generated back into our business. We still believe we have a great setup to drive positive cash flow for the year and into next year as well. At this point, I'll turn it back to Serge.

Speaker Change: When looking out over the next 12 months, we continue to anticipate about $15 million to $20 million of total capital expenditures.

Speaker Change: We also continue to maintain cash discipline in 2024 and in our 2025 planning.

Justin McAnear: Our goal is to self-fund our innovation and scale by investing cash generated back into our business. We still believe we have a great set up to drive positive cash flow for the year and in the next year as well.

Justin McAnear: R&D expenses decreased to $62.9 million, compared to $71.5 million for the prior year period, primarily driven by lower laboratory materials and supplies. S-T&A expenses decreased to $83 million, compared to $91.5 million for the prior year period, primarily driven by lower personnel expenses, including stock-based compensation.

Speaker Change: Our goal is to self-fund our innovation and scale by investing cash generated back into our business.

Speaker Change: We still believe we have a great setup to drive positive cash flow for the year and into next year as well.

Serge Saxonov: At this point, I'll turn it back to Serge. Thanks, Justin. I'd like to wrap up by reaffirming my conviction in the strength of 10X and our leadership in single-cell and spatial biology. As we navigate near-term macro pressures, deliver on a strategy and product roadmap, and optimize our commercial structure, we are steadfast in our goal of driving more balanced-focused execution and growth across all three platforms. Of course, none of this will be possible without our amazing team at 10X. Thank you for your commitment to drive, especially in times of change. I truly appreciate how you all rally together and stay focused on delivering for our customers in advancing our mission.

Speaker Change: At this point, I'll turn it back to Serge.

Serge Saxonov: Thanks, Justin. I'd like to wrap up by reaffirming my conviction in the strength of 10X and our leadership in single cell and spatial biology. As we navigate near-term macro pressure, deliver on a strategy and product roadmap, and optimize our commercial structure. We're steadfast in our goal of driving more balanced focus, execution, and growth across all three platforms. And, of course, none of this would be possible without our amazing team at 10X. Thank you for your commitment to DRIVE, especially in times of change. I truly appreciate how you all rally together and stay focused on delivering for our customers and advancing our mission. With that, we will now open it up for questions.

Serge Saxonov: I'd like to wrap up by reaffirming my conviction in the strength of 10X and our leadership in single cell and spatial biology.

Justin McAnear: Operating loss for the second quarter was $41.7 million, compared to a loss of $63.4 million in the second quarter last year. This includes $38.5 million of stock-based compensation as compared to $45.7 million of stock-based compensation for the corresponding prior year period. Net loss for the period was $37.9 million compared to a net loss of $62.4 million for the second quarter of 2023. We ended the quarter with $388.1 million in cash and cash equivalents and marketable securities, generating $8.3 million of cash in the quarter.

Serge Saxonov: As we navigate near to macro pressures, deliver on a strategy and product roadmap and optimize our commercial structure, where steadfast in our goal of driving more balance for this execution and growth across all three platforms.

Serge Saxonov: Of course, none of this would be possible without our amazing team at 10X.

Speaker Change: Thank you for your commitment to drive, especially in times of change.

Serge Saxonov: I truly appreciate how you all rallied together and stayed focused on delivering for our customers and advancing our mission.

Kayla: With that, we will now open it up for questions.

Kayla: Operator? And at this time, I'd like to remind everyone: in order to ask a question, press the star and the number one on your telephone keypad.

Serge Saxonov: With that, we will now open it up for questions.

Justin McAnear: Turning to our outlook for the rest of the year, as Serge mentioned at the beginning of the call, we now expect full-year revenue to be in the range of $640 million to $660 million, representing 5% growth over four-year 2023 at the midpoint. Our updated guidance reflects impacts from macro-level factors and the commercial restructuring. I'll start with the macro-level factors. In this environment, we've seen many customers experience budgetary pressures and uncertainties. This has mostly been on the CapEx side with spending constraints at elongated sales cycles.

Serge Saxonov: Operator.

Kayla: And at this time, I'd like to remind everyone that in order to ask a question, press the star and the number one on your telephone keypad. Your first question comes from the line of Dan Arias with Stifle. Your line is open.

Speaker Change: And at this time, I'd like to remind everyone in order to ask a question, press the star and the number one on your telephone keypad.

Daniel Arias: Your first question comes from the line of Dan Aria's with stifle. Your line is open.

Speaker Change: Your first question comes from the line of Dan Arias with Stifle. Your line is open.

Serge Saxonov: That's new, guys. Thanks for the questions. Serge, you're just, and can you maybe just add some color to the forecast on the second half of the year? I don't think people are surprised by the guide coming in, but to beat our number on Chromium. So is the new range entirely due to Zinium and Chromium instrumentation. And then what's the new outlook for single cell and spatial that's implied here. And if I could sneak a second one in, I, Serge, where do you think the breakdown is coming in the forecasting? I know you don't have all the full answer.

Dan Arias: Afternoon, guys. Thanks for the questions.

Speaker Change: Afternoon, guys. Thanks for the questions. Serge or Justin, can you maybe just add some color to the forecast in the second half of the year? I don't think people are surprised by the guide coming in.

Serge Saxonov: Serge or Justin, can you maybe just add some color to the forecast for the second half of the year? I don't think people are surprised by the guide coming in, but you beat our number on chromium. So is the new range entirely due to xenium and chromium instrumentation? And then what's the new outlook for single cell and spatial that's implied here? And if I could sneak a second one in, Serge, where do you think the breakdown is coming from in the forecasting? I know you don't have all the full answers here, but...

Speaker Change: That's a beat our number on Chromium, so it's the new range.

Dan Arias: entirely due to Xenium and Chromium instrumentation, and then what's the new outlook for single cell on spatial that's implied here. And if I could sneak a second one and I, Serge, where do you think the breakdown is coming in the forecasting? I don't have all the full answers here, but

Justin McAnear: We expect these headwinds to continue for the remainder of the year. Additionally, under MENA's leadership, we are executing on a new sales model that improves how we support our customers. We believe these new functions, roles, and territories may cause some near-term disruption while laying the foundation for long-term growth. While these factors may have near-term impacts on revenue, we continue to have full confidence in the strength of our platforms to deliver strong long-term growth.

Serge Saxonov: But you've made changes internally when it comes to leadership. You've given the Salesforce better tools to work with.

Speaker Change: You've made changes internally when it comes to leadership. You've given the sales force better tools to work with. So where do you think you're getting tripped up by what's taking place when it comes to projecting what customers are going to do here?

Serge Saxonov: So where do you think you're getting tripped up by what's taking place when it comes to projecting what customers are going to do here?

Justin McAnear: Hey, Dan, thanks for the question. I'll start with your first part around the brain.

Serge Saxonov: Thanks for the question. I'll start with your first part around the range. So, when looking at our updated guidance range, 650 at the midpoint, as we mentioned on the call, the updates coming from two buckets. So macro economic factors and the commercial restructuring. And when you're looking at macroeconomic factors, the maturity of that impact is on capital expenditures instruments. And in this case, most of it on Zinium with a smaller impact on Chromium. And so that's the majority of the update. The remainder of that update is due to less consumables. And so with a lower amount of instruments.

Serge Saxonov: Hey Dan, thanks for the question. I'll start with your first part around the range.

Justin McAnear: So when looking at our updated guidance range, 650 at the midpoint, as we mentioned on the call, the updates come from two buckets. So macroeconomic factors and commercial restructuring. And when you're looking at macroeconomic factors, the majority of that impact is on capital expenditures, instruments, and in this case, most of it on xenium with a smaller impact on

Justin McAnear: When looking out over the next 12 months, we continue to anticipate about $15 million to $20 million of total capital expenditures. We also continue to maintain cash discipline in 2024 and in our 2025 planning. Our goal is to self-fund our innovation and scale by investing cash generated back into our business. We still believe we have a great setup to drive positive cash flow for the year and in the next year as well.

Speaker Change: So when looking at our updated guidance range, 650 at the midpoint. As we mentioned on the call, the updates coming from two buckets.

Speaker Change: So, macroeconomic factors in the commercial structure, and when you're looking at macroeconomic factors, the majority of that impact is on capital expenditures, instruments, and in this case, most of it on the Brazilian one with a smaller impact on chromium.

Serge Saxonov: At this point, I'll turn it back to search. Thanks Justin.

Speaker Change: And so that's the majority of the update. The remainder of that update is due to less consumables. And so with a lower amount of instrument, so there's going to be a smaller amount of consumables. They go out with those initial orders.

Serge Saxonov: I'd like to wrap up by reforming my conviction in the strength of 10X and our leadership in single-cell and spatial biology. As we navigate near-term macro pressures, deliver on a strategy and product roadmap and optimize our commercial structure, we're steadfast in our goal of driving more balanced-focused execution and growth across all three platforms. Of course, none of us will be possible without our amazing team at 10X. Thank you for your commitment to drive, especially in times of change. I truly appreciate how you all rally together and stay focused on delivering for our customers in advancing our mission.

Serge Saxonov: So there's going to be a smaller amount of consumables that go out with those initial orders.

Serge Saxonov: And then also we're giving ourselves some room for the commercial restructuring as the team settles into their new roles and responsibilities. Yeah, maybe to touch on your second question, then just like Justin said, the changes in guide is mostly attributed to the changes in the macro environment, especially specifically focused on instruments. And then, on an addition to that, the changes that we're making on the commercial side, which are going to create some temporary potential for disruption.

Speaker Change: and then also, we're giving ourselves some room for the commercial restructuring, as the team subtles into their new roles and responsibilities.

Serge Saxonov: Yeah, I mean, maybe to touch on your second question, Dan, just like Justin said, the changes in guide are mostly attributed to the changes in the macro environment, especially specifically focused on the instruments. And then, in addition to that, the changes that we're making on the commercial side, which are going to create some, some temporary potential for disruption.

Speaker Change: Yeah, and maybe to touch on your second question then, just like Justin said, the change in the guy is mostly attributed to the changes in the micro environment, especially specifically focused on the instruments.

Speaker Change: And then, in addition to that, the changes that we're making on the commercial side, which are going to create some temporary potential for disruption.

Kayla: With that, we will now open it up for questions.

Serge Saxonov: And just one thing that I'll add before we go into the next question is just when we look back at how we said Q2 would end up on the last on the last earnings call. We expected sequentially to grow mid to high single digits, which we grew high single digits. We expected most of that growth to be due to Chromium; Chromium grew 12% sequentially. When we look at the, when we look at the second half of this year, the split between first half and second half at the midpoint of our range, it's about 45% of revenue in the first half, about 55% in the second half.

Justin McAnear: And just one thing that I'll add before we go to the next question is that when we look back at how we said Q2 would end up on the last earnings call, we expected sequentially to grow mid to high single digits, which we grew high single digits. We expected most of that growth to be due to chromium, and chromium grew 12% sequentially.

Kayla: Operator? And at this time, I'd like to remind everyone in order to ask a question, press the star and the number one on your telephone keypad.

Speaker Change: And just one thing that I'll add before we go to the next question is just...

Daniel Arias: Your first question comes from the line of Dan Aryas with Stifle. Your line is open.

Speaker Change: When we look back at

Speaker Change: How we said Q2 would end up on the last earnings call, we expected sequentially to grow mid to high single digits, which we grew high single digits.

Speaker Change: We expected most of that growth to be due to Chromium, Chromium grew 12% sequentially when we look at the second half of this year.

Justin McAnear: When we look at the second half of this year, the split between first half and second half at the midpoint of our range, it's about 45% of revenue in the first half, and about 55% in the second half. And just to your question around what's embedded in that guidance, when we look at how much of that to allocate to Q3 versus Q4, we're expecting the same seasonality that we saw last year in 2023. And we're expecting Q3 and Q4 each to have roughly the same growth rate over their course of the corresponding period in the prior year at the top.

Serge Saxonov: That's new guys. Thanks for the questions. Serge, you're just, and can you maybe just add some color to the forecast in the second half of the year? I don't think people are surprised by the guide coming in, but to beat our number on chromium. So is the new range entirely due to zinium and chromium instrumentation. And then what's the new outlook for single cell and spatial that's implied here. And if I could sneak a second one in, I Serge, where do you think the breakdown is coming in the forecasting?

Serge Saxonov: I know you don't have all the full answer. But you've made changes internally when it comes to leadership. You've given the sales force better tools to work with. So where do you think you're getting tripped up by what's taking place when it comes to projecting what customers are going to do here? Thanks for the question. I'll start with your first part around the range. So when looking at our updated guidance range, 650 at the midpoint, as we mentioned on the call, the updates coming from two buckets.

Speaker Change: The split between first half and second half at the midpoint of our range is about 45% of revenue in the first half, about 55% in the second half.

Serge Saxonov: And just to your question around what's embedded in that guidance, when we look at how much of that allocate the Q3 versus Q4, we're expecting the same seasonality that we saw last year in 2023. And we're expecting Q3 and Q4 each to have roughly the same growth rate over that are corresponding period in the prior year at the top level.

Speaker Change: in the second half.

Speaker Change: and just your question around what's embedded in that guidance.

Speaker Change: When we look at...

Speaker Change: How much of that to allocate the Q3 versus Q4? We're expecting...

Tejas Savant: And your next question comes from the line of the Haas Sevant with Morgan Stanley. Your line is open. Hey guys, good evening, and thanks for the question here.

Tejas Savant: And your next question comes from the line of Tejas Savant with Morgan Stanley. Your line is open. Hey guys.

Speaker Change: And your next question comes from the line of Tejas Savant with Morgan Stanley . Your line is open.

Tejas Savant: Hey guys, good evening, and thanks for the question here. One on the Zenium side of things and then one on the leadership changes, guys. So first on Zenium, can you share some color on just ASP trends in the quarter, any sense that you need to do deeper discounting in light of the customer CAPEX sensitivities you've flagged here, or has there been any change in competitor pricing models? And then in terms of the leadership changes here, Justin, it's been good working with you over the years, but Serge, the question for you really is, do you see any evolution in your leadership philosophy under Adam?

Justin McAnear: One on the, on the zinium side of things and then one on the leadership changes, guys. So first on Zinium, can you share some color and just ASP trends in the quarter or any sense that you need to do deeper discounting in light of, you know, the customer capex sensitivities you've flagged here? Or has there been any change in competitor pricing models?

Tejas Savant: Hey guys, good evening and thanks for the question here. One on the Zenium side of things and then one on the leadership changes, guys. So first on Zenium, can you share some color on just ASP trends in the quarter, any sense that you need to do deeper discounting in light of the customer CAPEX sensitivities you flagged here, or has there been any change in competitor pricing models? And then in terms of the leadership changes here, Justin, it's been good working with you over the years. But Serge, the question for you really is, do you see any evolution in your guidance philosophy under Adam? Share some color on the degree of input he's had, if any, in terms of his new guide. I guess where I'm coming from is, you know, a new CIO.

Tejas Savant: Share some color on the degree of input he's had, if any, in terms of the new guide. I guess where I'm coming from is that a new CFO always likes to preserve the right to impair the guide he or she inherits.

Serge Saxonov: So macro economic factors and the commercial restructuring. And when you're looking at macro economic factors, the maturity of that impact is on capital expenditures instruments. And in this case most of it on zinium with a smaller impact on chromium. And so that's the majority of the update. The remainder of that update is due to less consumables. And so with a lower amount of instruments, so there's going to be a smaller amount of consumables that go out with those initial orders.

Justin McAnear: And then, in terms of the leadership changes here, Justin, it's been good working with you over the years. But the question for you really is, do you see any evolution in your guidance philosophy under Adam? She has some color on the degree of input he's had as any in terms of new guide. I guess where I'm coming from is, you know, a new CF always likes to preserve the right to impair the guide he or she inherits. So just any color around that would be great. Thank you.

Serge Saxonov: And then also we're giving ourselves some room for the commercial restructuring as the team settles into their new roles and responsibilities. Yeah, maybe to touch on your second question, then just like Justin said, the changes in guide is mostly attributed to the changes in the macro environment, especially specifically focused on the instruments. And then on an addition to that, the changes that we're making on the commercial side which are going to create some temporary potential for disruption.

Tejas Savant: So just any color around that would be great. Thank you.

Speaker Change: The CFO always likes to preserve the right to impair the guide he or she inherits. So just any color around that would be great. Thank you.

Justin McAnear: Hey, Jeff, I'll start with the first part of your question on the ASP trends on instruments. I know you asked about zinium in particular. You know, over time, from the very beginning, we saw the ASP and, you know, the mid to low 200s, and we hit the low 200s in the mid part of last year. And that has been steadily coming up into the. The first part of this year. And so it has been; it has been relatively stable as of the last couple quarters, and no major changes in the ASP when you're looking at chromium.

Justin McAnear: Tejas, I'll start with the first part of your question on the ASP trends on instruments. I know you asked about basium in particular.

Speaker Change: Tejas, I'll start with the first part of your question on the ASP trends on instruments. I know you asked about zinium.

Justin McAnear: You know, over time, from the very beginning, we saw the ASP in the mid to low 200s, and we hit the low 200s in the mid part of last year, and that has been steadily coming up into the first part of this year, and so it has been relatively stable as of the last couple quarters, with no major changes in the ASP. When you're looking at chromium, you know, there are no major changes in the ASP between, you know, at the X level or the IX level, but we have seen a shift where there's more weighting towards the IX, where as before, it was roughly 50-50. But in this CapEx constrained environment, more customers are opting for the IX. And so that does impact, basically, the weighted ASP and maybe even more

Speaker Change: In particular, you know, over time, from the very beginning, we saw the ASP and, you know, the mid to low 200s, and we hit the low 200s and

Speaker Change: mid part of last year, and that has been steadily coming up into the

Serge Saxonov: And just one thing that I'll add before we go into the next question is just when we look back at how we said Q2 would end up on the last on the last earnings call. We expected sequentially to grow mid to high single digits, which we grew high single digits. We expected most of that growth to be due to chromium chromium grew 12% sequentially when we look at the when we look at the second half of this year.

Speaker Change: First part of this year and so it has been it has been relatively stable as of the last couple quarters and no major changes in the ASP when you're looking at chromium

Justin McAnear: You know, no, no major changes in the ASP between, you know, at the X level or the I X level, but we have seen a shift where there's more waiting towards the I X where, as before, it was roughly 50, 50. But in this path, X can strain environment; more customers are opting for the I X. And so that does impact basically the way today is between those two instruments.

Speaker Change: No major changes in the ASP between at the X level or the IX level, but we have seen a shift where there's more weighting towards the IX, where

Serge Saxonov: The split between first half and second half at the mid point of our range is about 45% of revenue in the first half, about 55% in the second half. And just to your question around what's embedded in that guidance, when we look at how much of that allocate to Q3 versus Q4, we're expecting the same seasonality that we saw last year in 2023.

Speaker Change: As before, it was roughly 50-50, but in this CapEx-constrained environment, more customers are opting for the iX, and so that does impact basically the weighted ASP between those two instruments.

Serge Saxonov: And we're expecting Q3 and Q4 each to have roughly the same growth rate over the corresponding period in the prior year at the top level.

Justin McAnear: And maybe if the touch on your question around Zinium, the sort of the competitive environment around Zinium, there's not really been a material change relative to the previous quarter on that front. And we the big changes really around the budget three constraints of our customers and their decision making there. And certainly something that we're looking at to make sure we're able to work with them on in this sort of environment.

Serge Saxonov: And maybe I can touch on your question about Xenium, the competitive environment for Xenium. There has not really been a material change relative to the previous quarter on that front. The big change is really around the budgetary constraints of our customers and their decision making, and that's certainly something that we're looking at to make sure we're able to work with them in this sort of new environment. As far as the guide is concerned, look, our philosophy is largely the same.

Speaker Change: And maybe to touch on your question around Zinium, sort of the competitive environment around Zinium.

Speaker Change: There has not really been, I would say, a material change relative to the previous quarter on that front. The big change is really around the budgetary constraints of our customers and their decision-making.

Speaker Change: and certainly something that we're looking at to make sure we're able to work with them in this sort of new environment.

Tejas Savant: And your next question comes from the line of the Haas Sevant with Morgan Stanley. Your line is open. Hey guys, good evening and thanks for the question here.

Justin McAnear: As far as the guide is concerned, look, our philosophy is largely the same. You look at sort of the balance of different factors, the downsides and give the best view we currently have on the rest of the year.

Speaker Change: As far as the guide is concerned, our philosophy is largely the same. We look at the balance of different factors, the upsides and the downsides, and give the best view we currently have on the rest of the year.

Serge Saxonov: We look at sort of the balance of different factors, the upsides and the downsides, and give the best view we currently have on the rest of the year. And your next question comes from the line of Doug Schenkel with Wolf Research. Your line is open.

Justin McAnear: One on the on the zineum side of things and then one on the leadership changes, guys. So first on zineum, can you share some color and just ASP trends in the quarter or any sense that you need to do deeper discounting in light of, you know, the customer capex sensibilities you've flagged here, or has there been any change in competitor pricing models? And then in terms of the leadership changes here, Justin, it's been a good working with you over the years.

Madeline Mollman: And your next question comes from the line of dog shingle with wolf research, your line of open. Hi, this is Madeleine Molen on for the I just wanted to ask if you could quantify the impact of the GEMX transition in the quarter. I think mentioned chromium consumables are pretty strong.

Speaker Change: To your next question comes from the line of Doug Schenkel, with Wolf Research, your line is open.

Douglas Schenkel: Hi, this is

Madeline Mollin: Hi, this is Madeline Mollin on Freiburg. I just wanted to ask if you could put a quantified impact of the gemx transition in the quarter, I think mentioned chromium consumed over pretty strong, and then what are you thinking about gemx for the rest of the year and in the 2025, how should we be thinking about sort of the continued impact there?

Justin McAnear: But the question for you really is, do you see any evolution in your guidance philosophy under Adam? She has some color on the degree of input he's had as any in terms of new guide. I guess where I'm coming from is, you know, a UCF always likes to preserve the right to impair the guide he or she inherits. So just any color around that would be great.

Serge Saxonov: And then what are you thinking about GEMX for the rest of the year and into 2025? How should we be thinking about sort of the continued impact care? And thanks for the question.

Justin McAnear: And thanks for the question. As far as the Gen X impact in Q2, I would say Q2 played out relatively as we had laid out on our last call. When we When we talked about how we thought Q2 would end up, we included the impacts of the trial and installation due to GEMMAX. Now, a few things. We are a little bit further ahead on the GEM-X transition than we expected to be at this point.

Serge Saxonov: As far as the GEMX impact in Q2, I would say the Q2 played out relatively like we had laid out on our last call. When we talked about how we thought Q2 would end up, we included the impacts of the trial and installing due to the GMX transition.

Speaker Change: [inaudible]

Speaker Change: Thanks for the question. As far as the GenX impact in Q2, I would say that Q2 played out relatively like we had laid out on our last call. When we

Justin McAnear: Thank you. Hey, Jeff. I'll start with the first part of your question on the ASP trends on instruments. I know you asked about zineum in particular, you know, over time, from the very beginning we saw the ASP and, you know, the mid to low 200s and we hit the low 200s in mid part of last year. And that has been steadily coming up into the first part of this year. And so it has been, it has been relatively stable as of the last couple of quarters and no major changes in the ASP.

Justin McAnear: When you're looking at chromian, you know, no, no major changes in the ASP between, you know, at the x level or the ix level. But we have seen a shift where there's more waiting towards the ix where, as before, it was roughly 50-50. But in this path X can strain environment more customers are opting for the, for the ix. And so that does impact basically the way today is between those two instruments.

Speaker Change: When we talked about how we thought Q2 would end up, we included the impacts of the trialing and stalling due to the gemax transition.

Serge Saxonov: Now, two things: we are a little bit further ahead on the GMX transition than we expected to be at this point. And we're also appreciating that there is a little bit of a longer tail towards this transition as well.

Speaker Change: Now a few things, we are a little bit further ahead on the GEM-X transition than we expected to be at this point.

Justin McAnear: And we're also appreciating that there is a little bit of a longer tail towards this transition as well. And so one thing that we're contemplating is those customers who plan to continue using NextGEM, how we can help them transition to GEM-X. And your next question comes from the line of Rachel Vatstol with J.P. Morgan. Your line is open. Hello, this is Marta Zaremba on behalf of Rachel

Speaker Change: And we're also appreciating that there is a little bit of a longer tail towards this transition as well. And so one thing that we're contemplating is those customers who plan to continue using NextGen, how we can help them transition to GenMAC sooner.

Serge Saxonov: And so one thing that we're contemplating is those customers who plan to continue using the GMX transition in the next gen, how we can help them transition to GMX sooner.

Serge Saxonov: And your next question comes from the line of Rachel Vapstal with JP Morgan; your line is open. Hello, this is Marta Zorambo on for Rachel. Thank you for taking the question. I just wanted to double-click on the GMX replacement expectations for the rest of the year. You mentioned that part of the reason for the guide cut. So how should we think about the GMX placements for the rest of the year, and then how are you thinking in terms of whether or not the impact is mostly due to macro, perhaps more competition. Thank you. Yeah, so Xenium instrument placements are being impacted by macro right now.

Marta Zaremba: And your next question comes from the line of Rachel Vatstol with JP Morgan. Your line is open.

Speaker Change: i

Speaker Change: And your next question comes from the line of Rachel Vatstol with J.P. Morgan. Your line is open.

Speaker Change: Hello, this is Marta Dorma on For Rachel, thank you for taking the question

Marta Dorma: I just wanted to double click on the union placement expectations for the rest of the year. You mentioned that's part of the reason for the guide cut.

Justin McAnear: And maybe if you touch on your question around zineum, the sort of the competitive environment around zineum, there's not really been with a material change relative to the previous quarter on that front. We, the big change is really around the budget through constraints of our customers and their decision making there. And certainly something that we're looking at to make sure we're able to work with them on in this sort of new environment.

Speaker Change: So how should we think about the CEM placements for the rest of the year? And then how are you thinking in terms of whether or not the impact is mostly due to macro or perhaps more on the competition? Thank you.

Justin McAnear: Yeah, so Xenium instrument placements are being impacted by macro right now. We're seeing customers' CapEx budgets getting cut. We're seeing more scrutiny on CapEx purchases. And this is resulting in, like I said, opportunities moving out due to elongated sales cycles or some opportunities dropping out with budget cuts. I'd say it's more of an elongated sales cycle.

Speaker Change: And so, Xenium instrument placements are being impacted by macro right now.

Serge Saxonov: We're seeing customers, capex budgets getting cut; we're seeing more scrutiny on capex purchases, and this is resulting in, I said, opportunities moving out due to elongated sales cycles or some opportunities dropping out with budget cuts. I'd say it's more of an elongated sales cycle. You know, one thing when we look at the funnel for Q3 and Q4, you know, we are still seeing a large amount of opportunities in the funnel for the second part of the year. On our last call, when we talked about the range that we would expect for each quarter this year, we expected it to be between 50 to 75.

Speaker Change: We're seeing customers' CapEx budgets getting cut, we're seeing more scrutiny on CapEx purchases, and this is resulting in

Justin McAnear: As far as the guide is concerned, look, our philosophy is largely, largely the same. You, we look at sort of the balance of different factors, the offsides and the downsides. And give the best view we currently have on the rest of the year.

Speaker Change: Like I said, opportunities moving out due to elongated sales cycles or some opportunities dropping out with

Speaker Change: with budget cuts.

Speaker Change: I'd say it's more of a elongated sales cycle.

Justin McAnear: You know, one thing when we look at the funnel for Q3 and Q4, you know, we are still seeing a large number of opportunities in the funnel for the second part of the year. On our last call, when we talked about the range that we would expect for each quarter this year, we expected it to be between 50 to 75. Right now, when we look at, you know, and Q2 came up.

Speaker Change: You know, one thing when we look at the funnel for Q3 and Q4, you know, we are still seeing a large amount of opportunities in the funnel for the second part of the year.

Justin McAnear: And your next question comes from the line of Doug Schinkel with Wolf Research, your line of open. Hi, this is Madeline Molman on for Doug. I just wanted to ask if you could quantify the impact of the GEMEX transition in the quarter. I think mentioned chromium consumables are pretty strong. And then what are you thinking about GEMEX for the rest of the year and into 2025? How should we be thinking about sort of the continued impact there?

Speaker Change: On our last call, when we talked about the range that we would expect for each quarter this year, we expected it to be between 50 to 75. Right now, when we look at, you know, when Q2 came up,

Serge Saxonov: Right now, when we look at, you know, Q2 came up, you know, a little bit shorter than.

Justin McAnear: You know, a little bit short of that, and when we talk about how we're thinking about Q3 and Q4, assumed at the midpoint of our guidance range is an average of about 50 instruments a quarter between those two quarters, with a little bit less in Q3 and more in Q4.

Serge Saxonov: And when we talk about how we're thinking about Q3 and Q4, assumed at the midpoint of our guidance range is an average of about 50 instruments a quarter between those two quarters, with a little bit less in Q3 and more in Q4. And maybe just to come up again on the genome competition, part of the question, no, we're not seeing a change in the dynamic. The reduction in the genome number is purely, should the pure less go out to the changing micro economic environment. We track, we track the opportunities in the fall pretty, pretty closely.

Speaker Change: You know, a little bit short of that.

Speaker Change: and when we talk about...

Speaker Change: How we're thinking about Q3 and Q4, assumed at the midpoint of our guidance range is an average of about 50 instruments.

Justin McAnear: And thanks for the question. As far as the GEMEX impact in Q2, I would say the Q2 played out relatively like we had laid out on our last call. When we When we talked about how we thought Q2 would end up, we included the impacts of the trial and installing due to the GMX transition. Now a few things we are a little bit further ahead on the GMX transition that we expected to be at this point. And we're also appreciating that there is a little bit of a longer tail towards this transition as well.

Speaker Change: A quarter between those two quarters with a little bit less in Q3 and more in Q4.

Serge Saxonov: Maybe just to comment again on the zinium competition part of the question. No, we're not seeing a change in the dynamic. The reduction in the zinium number should be purely ascribed to the changing macroeconomic environment.

Speaker Change: And maybe just a comment again on the xenium competition part of the question. No, we're not seeing a change in the dynamic. The reduction in the xenium number should be purely ascribed to the changing macroeconomic environment.

Dan Brennan: We track the opportunities in the fall pretty closely. And your next question comes from the line of Dan Brennan with TD Cohen. Your line is open.

Speaker Change: We tracked, we tracked that for two inches in the fall pretty, pretty closely.

Kyle Mikson: And your next question comes from the line of Dan Brennan with TD Cohen. Your line is open. Hey, good afternoon, guys. This is Kyle on for Dan. I had a quick one on. Did you have HD? You know, you talked about the gym HD being pretty strong and the uptake from customers being strong. Can you speak any impact to the gym HD has had on customer usage of the gym or even Xanium. Thank you. Yeah, good question. On terms of the impact on standard with you. The other impact has actually been somewhat less than we expected.

Speaker Change: And your next question comes from the line of Dan Brennan with TD Cohen. Your line is open.

Justin McAnear: And so one thing that we're contemplating is those customers who plan to continue using the GMX transition in the next gen, how we can help them transition to GMX sooner.

Speaker Change: Hey, good afternoon, guys. This is a Kyle Hunter Dan. I had a quick one on the GMHD. You may talk about the GMHD being pretty strong and you may be uptake from customers being strong. Can you speak any indexed GMHDs hat on customer usage of the GM or even Zanyan? Thank you.

Rachel Vapstal: And your next question comes from the line of Rachel Vapstal with JP Morgan. Your line is open. Hello, this is Marta Zarambo on for Rachel. Thank you for taking the question. I just wanted to double click on the union placement expectations for the rest of the year. You mentioned that part of the reason for the guide cut.

Serge Saxonov: So, yeah, good question. In terms of the impact on standard Vizium, the impact has actually been somewhat less than we expected. The standard Vizium is still continuing to garner demand from customers, I mean, both for existing projects, for ongoing projects, and to some extent, new projects as well. So, we're pleased with that dynamic. So, HD has been, to a large extent, incremental. And then, yeah, I mean, we also have the great performance of Vizium consumables and 5K, especially despite the fact that there's definitely some dynamic where customers are trying to choose between those products and evaluating which way to go. So overall, it has been a good quarter for spatial consumables kind of across the board. And your next question comes from the line of Patrick Donnelly.

Speaker Change: So, yeah, a new question on terms of...

Speaker Change: The impact on standards with you.

Speaker Change: The impact has actually been somewhat less than we expected.

Serge Saxonov: The standard, the gym is still, is still continuing to garden demand from customers. I mean, both for existing projects, for ongoing projects, and to some extent new projects as well. So we're pleased with that dynamic.

Serge Saxonov: So how should we think about the senior placements for the rest of the year and then how you thinking in terms of whether or not the impact is mostly due to macro or perhaps more on the competition. Thank you. Yeah, so Xenium instrument placements are being impacted by macro right now. We're seeing customers, capex budgets getting cut. We're seeing more scrutiny on capex purchases. And this is resulting in, I said opportunities moving out due to elongated sales cycles or some opportunities dropping out with budget cuts.

Speaker Change: The Senate, the Senate is still getting into gardening demands from customers, and they both provide existing projects.

Speaker Change: for ongoing projects and to some extent new projects as well. So we're pleased with that dynamic. So HG has been, to a large extent, incremental.

Serge Saxonov: So HD has been to a large extent, to a large extent, incremental. And then, yeah, I mean, we also have a great performance in the new consumables and 5K. Especially despite the fact that there's definitely some dynamic where customers are trying to choose between those products and an availability. of which way to go. So overall, it has been a good quarter for spatial consumers, kind of across the board, I would say.

Speaker Change: And then, yeah, I mean, well, it also has a great performance in human consumables and 5K, especially. Despite the fact that there's definitely some dynamic or a customer's are trying to choose between those products and an evaluating.

Serge Saxonov: I'd say it's more of a elongated sales cycle, you know, one thing when we look at the funnel for Q3 and Q4, you know, we are still seeing a large amount of opportunities in the funnel for the second part of the year. On our last call, when we talked about the range that we would expect for each quarter this year, we expected it to be between 50 to 75. Right now, when we look at, you know, Q2 came up.

Speaker Change: of which way to go. So overall has been a good quarter for spatial consumables kind of across the board I would say.

Patrick Donnelly: And your next question comes from a line of Patrick Donnelly with City; your line is open. This is Brennan on for Patrick.

Patrick Donnelly: And your next question comes from the line of Patrick Donnelly with Citi. Your line is open.

Speaker Change: And your next question comes from the line of Patrick Donnelly with Citi. Your line is open.

Serge Saxonov: You know, a little bit shorter than and when we talk about how we're thinking about Q3 and Q4, assumed at the midpoint of our guidance range is an average of about 50 instruments, a quarter between those two quarters with a little bit less in Q3 and more in Q4. And maybe just to come up again on the genome competition part of the question, no, we're not seeing a change in the dynamic. The reduction in the genome number is purely should the pure less got to the changing macro economic environment. We track, we track the opportunities in the ball pretty, pretty closely.

Justin McAnear: I was wondering if you can give an update on like the path towards profitability and cash flow positive, especially with this new commercial restructuring. Yeah, great question. So when we look back at Q2, we were cash low positive this quarter; we were free cash flow positive this quarter. Going back to Q1, if you exclude the one time or the payment that we made for the technology acquisition related to division HD, would have been both cash flow and would have been free cash flow positive as well. And then we hit that Q4. So there's been, there's been a great trend.

Brendan: Hi, this is Brendan on for Patrick. I was wondering if you can give an update on, like, the Pat towards profitability and cash flow causes to do especially with this new commercial restructuring.

Justin McAnear: Yeah, great question. So when we look back at Q2, we were cash flow positive this quarter; we were free cash flow positive this quarter. Going back to Q1, if you exclude the one-time payment that we made for the technology acquisition related to Visium HD, we would have been both cash flow positive and or would have been free cash flow positive as well. And we hit that in Q4. So there's been a great trend here over the last few quarters. When we talk about the rest of the year, We say that we've got a great setup to drive.

Speaker Change: Yeah, great question. So when we look back at Q2, we were cash flow positive this quarter. We were free cash flow positive this quarter. Going back to Q1, if you exclude the one time or the payment that we made for

Speaker Change: The technology acquisition related to Visium HD would have been both cash flow and or would have been free cash flow positive as well. And we hit that Q4. So there's been, there's been a great trend here over the last few quarters. When we talk about the rest of the year,

Justin McAnear: Here over the last few quarters, when we talk about the rest of the year, we say that we've got a great setup to drive cash flow positivity for the rest of the year. And so what that implies is that there's some optionality in there.

Justin McAnear: Cash Flow positivity for the rest of the year. And so what that implies is that there's some optionality in there. I know we do reserve the right to make the targeted investments that we need to do that we think are best for the longer-term health of the business. And just understand, too, that at this stage, our goal is not to accumulate cash, but it's to reinvest the cash that we generate back into the business.

Speaker Change: We say that we've got a great setup to drive.

Speaker Change: cash flow positivity for the rest of the year. And so what that implies is that there's some optionality in there. I know we do reserve the right to make the targeted investments that we need to do that we think fits best for the longer term health of the business.

Justin McAnear: We do reserve the rights, make the targeted investments that we need to do that we think fits best for the longer term health of the business and just understand to you that at this stage, our goal is not to accumulate cash, but it's to reinvest the cash that we generate back into the business. So there could be swings from quarter to quarter, as you're really trying to stay, you know, roughly, roughly even the slightly positive and invest all the you can back in. But the most important thing to realize is that, you know, we do have full optionality for how we control this and how we think about this longer term.

Unknown Attendee: And your next question comes from the line of Dan Brennan with TD Cohen. Your line is open. Hey, good afternoon guys. This is Kyle on for Dan. I had a quick one on. You know, you talked about the MHD being pretty strong and the uptake from customers being strong. Can you speak any impact to the MHD's had on customer usage of dizzy or even Zanian. Thank you. So good. Yeah, good question.

Speaker Change: and just understand through that at this stage, our goal is not to accumulate cash but it's to reinvest the cash that we generate back into the business.

Justin McAnear: So there could be swings from quarter to quarter as you're really trying to stay, you know, roughly even to slightly positive and invest all that you can back in. But the most important thing to realize is that, you know, we do have full optionality for how we control this and how we think about it. Yeah, and

Speaker Change: So it could be swings from quarter to quarter as you're really trying to stay, you know, roughly even the slightly positive and in the best all you can back in. But the most important thing to realize is that, you know, we do have full optionality for how we control this and how we think about this longer time.

Serge Saxonov: Yeah, and on the point around commercial restructuring, so to a large extent, this restructuring constitutes a redeployment of resources, where in many cases before, we had kind of an overlay function, and now we are redeploying those functions to have explicit ownership of accounts and customers. We are setting it up so that we're going to be making more of this incremental investment in a commercial organization, but to a large extent, again, it's more about the redeployment rather than the increase. But it does, the new structure does set us up to scale really efficiently going forward and drive growth while maintaining a good cost performance.

Justin McAnear: Yeah, and on the point around commercial restructuring, so to a large extent, this restructuring constitutes a redeployment or resources, where in many cases before we had kind of overlay functions, and now where we are redeploying those functions to be to have explicit ownership of accounts and customers. We are setting it up so that we're going to be making more this incremental investments in a commercial organization, but it's to a large extent again, it's more about the redeployment rather than increase, but it does the new structure does set us up to scale really efficiently going forward and drive growth while maintaining a good cost structure.

Serge Saxonov: On terms of the impact on standard with you. The other impact has actually been somewhat less than we expected. The standard, the same is still still continuing to garden demand from customers. I mean both for existing projects for ongoing projects and to some extent new projects as well. So we're pleased with that dynamic. So he has been to a large extent, to a large extent incremental. And then yeah, I mean, we also have a great performance in the new consumables and 5K, especially despite the fact that there's definitely some dynamic or customers are trying to choose between those products and an availability, of which way to go. So overall, it has been a good quarter for spatial consumers, kind of across the board, I would say.

Speaker Change: Yeah, and on the point around commercial restructuring.

Speaker Change: So to all large extent, this restructuring constitutes a redeployment of resources.

Speaker Change: Where in many cases before we had kind of overlay functions and now where we are redeploying those functions to be to have explicit ownership of accounts and customers.

Speaker Change: We are setting it up so that we're going to be making more this incremental investments in our commercial organization, but it's too large it stands again and it's more about the redeployment.

Speaker Change: Rather than increase, but it does the new structure does set us up to scale really efficiently, go on and forward and drive growth while maintaining a good cost structure.

Kyle Mikson: And your next question comes from the line of Kyle Mikezen with Connacore; your line is open. Yeah, hey guys, thanks for the questions. I'll just start by saying, like, you know, good luck just to work with you this past years and good to see Adam Cologne board, you know, and well, it's a good addition to team.

Kyle Mikson: And your next question comes from the line of Kyle Mikson with Conocord. Your line is open.

Speaker Change: i

Speaker Change: And your next question comes from the line of Kyle Mike Sim with Connecord, your line is open.

Kyle Mikson: Yeah, guys, thanks for the questions. I'll just start by saying, you know, good luck Justin for working with you this past few years and good to see Adam come on board. We know him well, it's a good, good addition to the team.

Speaker Change: Yeah, hey guys, thanks for the questions. I'll just start by saying, like, you know, good luck Justin Corneau, he just got spheres and good to see Adam Cullen board, you know, and well, it's a good addition to things. Two questions. The first is on medium. Why is that one being impacted so much by the macro environment relative, you know, just compared to chromium, I guess is that just due to the higher price point.

Patrick Donnelly: And your next question comes from the line of Patrick Donnelly with City, your line is open. This is Brennan on for Patrick.

Kyle Mikson: Two questions. The first is on Zinium. Why is that one being impacted so much by the macro environment, you know, just compared to Chromium? I guess is that just due to the higher price point? And last quarter, you guys mentioned single-cell mind shares being taken over by Spatial. Is that still happening?

Justin McAnear: Two questions. First of all, I mean, why is that one being impacted so much by the macro environment, you know, just compared to chromium, I guess is that just due to the higher price point. And last quarter, you guys mentioned, single still mine shares being taken over by Spatial. Is that still happening?

Unknown Attendee: I was wondering if you can give an update on like the path towards profitability and cash flow positive, especially with this new commercial restructuring. Yeah, great question. So when we look back at Q2, we were cash flow positive this quarter, we were free cash flow positive this quarter, going back to Q1, if you exclude the one time or the payment that we made for the technology acquisition related to division HD, would have been both cash flow and would have been free cash flow positive as well.

Kyle Mikson: My second question is about the commercial organization. Why such a dramatic change here, I guess? Does that mean you weren't able to correct the factors that were hindering growth in recent years? And then after a few changes, like since 2022, you know, why are you confident that this change is now going to make you ready to finally kind of re-accelerate the company? Thanks.

Speaker Change: and the last quarter you guys mentioned, I think I'll still mind sharing, being taken over by Spatial that's still happening. Second question is on commercial organization, why does that informatic change here, I guess? Does that mean you weren't able to correct the factors that were under in growth in recent years, and then after a few changes like since 2022?

Serge Saxonov: Second questions on commercial organization, why such a dramatic change here? I guess, does that mean you weren't able to correct the factors that were under growth in recent years and then after a few changes like since 2022. You know, why are you confident that this change is now going to make you ready to finally kind of resold it to come back.

Justin McAnear: Hey, guys, this is Justin Allstart. So first off, thank you. It's been great working with you as well. As far as your question around Xenium, yes, it's the highest price instrument. It's quite a bit more than the other instruments that we sell, and it's a big investment for customers. And so that has been the one that has been most impacted. But Museum and Chromium on the side assist, and the Chromium X and IX, you know, some impact there, but not to the degree that we're seeing with Xenium.

Justin McAnear: Hey Kyle, this is Justin. I'll start. So first off, thank you. It's been great working with you as well.

Unknown Attendee: And then we had that Q4. So there's been, there's been a great trend. Here over the last few quarters, when we talk about the rest of the year, we say that we've got a great setup to drive cash flow positivity for the rest of the year. And so what that implies is that there's some optionality in there. We do reserve the rights, make the target investments that we need to do that we think fits best for the longer term health of the business and just understand to you that at this stage, our goal is not to accumulate cash, but it's to reinvest the cash that we generate back into the business.

Speaker Change: Thank God, this is Justin all start. First off, thank you. It's been great working with you as well. As far as your question around.

Unknown Attendee: So it could be swings from quarter to quarter, as you're really trying to stay, you know, roughly, roughly even the slightly positive and invest all the you can back in. But the most important thing to realize is that, you know, we do have full optionality for how we control this and how we think about this longer term.

Speaker Change: Zinium. Yes, it's the highest priced instrument. It's quite a bit more than the other instruments that we sell, and it's a big investment for customers. And so that has been the one that has been most impacted.

Speaker Change: Visium and chromium on the cytocyst and the chromium axon IX, some impact there, but not to the degree that we're seeing with zinium.

Justin McAnear: As far as your question around Xenium, yes, it's the highest priced instrument. It's quite a bit more than the other instruments that we sell. And it's, it's a big investment for customers.

Justin McAnear: And so that has been the one that has been most effective, but Visium and Chromium on the Cytosys and the Chromium-X and IX, you know, some impact there, but not to the degree that we're seeing with Xenium.

Serge Saxonov: Yeah, and the question, Kyle, of commercial restructuring and why now, what's important to appreciate is that we have gained a lot of learnings over the past two-plus years in terms of trying different approaches and kind of adjusting our incentive structure, creating some amount of specialization. And one of the things that became clear to us is that without a holistic restructuring, you're always going to be dealing with trade-offs and with compromises as you're trying to optimize for one thing or another.

Serge Saxonov: Yeah, and the question, Kyle, so the commercial restructuring and why now the, what's important to appreciate is that we have, you've gained a lot of learning over the past two plus years in terms of trying different. Different approaches and kind of adjusting our center structure, creating some amount of specialization. And one of the things that can clear to us is that, without a holistic restructuring, you're always going to be dealing with trade-offs and with compromises as you're trying to optimize for one thing or another. And so we step back, kind of re-evaluating from both an in line of all those learning from first principles, given where portfolio is, given where our barriers are for strategic growth going forward.

Speaker Change: Yeah, and then the question, Kyle, of sort of the commercial restructuring and why now?

Speaker Change: What's important to appreciate is that we have

Speaker Change: He gave a lot of learnings over the past two plus years in terms of trying different approaches and kind of adjusting our sense of structure creating some amount of specialization.

Justin McAnear: Yeah, and on the point around commercial restructuring, so to a large extent, this restructuring constitutes a redeployment or resources, where in many cases before we had kind of overlay functions and now where we are redeploying those functions to be to have explicit ownership of accounts and customers. We are setting it up so that we're going to be making more this incremental investments in a commercial organization, but it's to a large extent, again, it's more about the redeployment rather than increase. But it does the new structure does set us up to scale really efficiently going forward and drive growth while maintaining a good cost structure.

Speaker Change: And one of the things that became clear to us is that without a holistic restructuring, you're always going to be dealing with trade-offs and with compromises as you're trying to optimize for one thing or another.

Serge Saxonov: And so we've stepped back, kind of re-evaluating both in light of all those learnings from first principles, given where our portfolio is, given where our imperatives are for strategic growth going forward, and re-architected the sales organization with those principles and those learnings in mind. And we feel really good about where things are landing and kind of a much cleaner set of roles and responsibilities that we'll have in our sales team now, and also much more manageable territories and a much clearer sort of specialization, and expertise that we can now deploy and sets us up really well for scaling growth.

Speaker Change: And so we step back, kind of re-evaluating from both, in light of all those learnings from first principles, given where

Speaker Change: Portfolio is, given where our imperatives are for strategic growth going forward, and we architected kind of the sales organization with those principles and those learnings in mind.

Serge Saxonov: And we architected kind of the sales organization with those principles and those learnings in mind. And we feel really good about where things are landing and kind of a much cleaner now sort of roles or responsibilities that we will have in our sales team. And also much more manageable territories and much more clear sort of specialization and an expertise that we can now deploy and stuff that's not really well for scaling growth forward.

Speaker Change: And we feel really good about where things are landing and kind of a much cleaner now sort of roles and responsibilities that we'll have in our sales team.

Kyle Mikson: And your next question comes from the line of Kyle Mikezen with Connacore, your line is open. Yeah, hey guys, thanks for the questions. I'll just start by saying, like, you know, good luck just to work with you this past years and good to see Adam Cohen board, you know, and well, it's a good addition to team.

Speaker Change: and also much more manageable territories and much more clear sort of specialization and expertise that we can now deploy and sets us up really well for scaling going forward.

Justin McAnear: Two questions. First of all, I mean, why is that one being impacted so much by the macro environment, you know, just compared to Chromium, I guess, is that just due to the higher price point. And last quarter, you guys mentioned, single so much shares being taken over by spatial is that still happening.

Dan Lienard: And the next question comes from the line of Dan Lienard with UBS. Your line is open. Great. Thank you for taking the question.

Serge Saxonov: And the next question comes from the line of Dan Leonard with UBS. Your line is open. Great. Thank you for taking the question. This is Luan from Dan. I think we want to touch a little bit on the instrument witnesses.

Dan Leonard: And the next question comes from the line of Dan Leonhard with UBS. Your line is open. Great, thank you for joining us.

Speaker Change: And the next question comes from the line of Dan Leonhard with UBS. Your line is open.

Serge Saxonov: This is Luan from Dan. I think we want to talk a little bit on the instrument witnesses that you mentioned. Can you describe the chance within the echo, like academic markets and then a formal market. Do you see any differences? And then also with all the commercial changes right now, any specific strategies that can help to convert the opportunities to orders. Thank you.

Serge Saxonov: Second questions on commercial organization, why such a dramatic change here, I guess, does that mean you weren't able to correct the factors that were under growth in recent years and then after a few changes, like since 2022. You know, why are you confident that this change is now going to make you ready to finally kind of resold it to come back. Good God, this is Justin Allstart. So first off, thank you.

Speaker Change: Great, thank you for taking the question. This is Luan from Dan. I think we want to touch a little bit on the instrument witnesses that you mentioned. Can you describe the trends within the economic markets and then the pharma markets? Do you see any differences?

Speaker Change: and then also with all the commercial changes right now, any specific strategies that can help to convert the quantum opportunities to orders. Thank you.

Serge Saxonov: It's been great working with you as well. As far as your question around Zenian, yes, it's the highest price instrument. It's quite a bit more than the other instruments that we sell and it's a big investment for customers. And so that has been the one that has been most impacted. But Museum and Chromium on the side assist and the Chromium X and IX, you know, some impact there, but not to the degree that we're seeing with Zenian.

Serge Saxonov: Yeah, so I mean, as far as sort of the market, I could do members. Is by far more, we have actually seen sort of challenges to both. Especially when you look with an AMR in America, but really wide like most of the globe as well, different dynamics for sure, but both happen to be challenged right now.

Serge Saxonov: Yeah, so, as far as sort of the end markets, academia versus biopharma, we have actually seen sort of challenges in both, especially when you look within AMR in America, but really widely across the globe as well. Different dynamics, for sure, but both happen to be challenged right now.

Speaker Change: Yeah, so I mean as far as sort of the end markets, I can be a member of this bad parma, we have actually seen Serge Challenges in both.

Speaker Change: Especially when you look within AMR in America, but really widely across the globe as well. Different dynamics for sure, but both happen to be challenged right now. There's definitely a lot of sort of news and pressure on academic projects with NIH and so on.

Serge Saxonov: There's definitely a lot of news and pressure on academic budgets with NIH and so on, so we're following that. But yes, of course, kind of across the board. As far as the question around sort of conversion of opportunities and kind of moving those through the funnel, yeah, I mean, that's a big part of what we're doing here is creating a specialized sales force specifically for Xenium Instruments with its own management structure and specialized CapEx sales executives. And we do think that that's going to help both in terms of opportunity creation and converting opportunities into sales.

Serge Saxonov: There's definitely a lot of sort of news and pressure on academic budgets with NIH and so on. So we're following that, but yes, of course, kind of across the board. As far as the question around sort of conversion of opportunities and kind of moving those to the funnel.

Serge Saxonov: Yeah, and the question, Kyle, so the commercial restructuring and why now the, what's important to appreciate is that we have gained a lot of learning over the past two plus years in terms of trying different. Different approaches and kind of adjusting our center structure, creating some amount of specialization. And one of the things that can clear to us is that without a holistic restructuring, you're always going to be dealing with trade-offs and with compromises, as you're trying to optimize for one thing or another.

Speaker Change: So we're following that, but yes, kind of across the board.

Speaker Change: As far as the question around conversion of opportunities, we've got a moving to the funnel.

Serge Saxonov: Yeah, I mean, that's part of what we're doing here is creating a specialized sales for specifically for Zinium instruments with its own management structure and special specialized catbacks sale executives. And we do things that that's going to help both the doors of opportunity creation and converting opportunity. Empty Sales.

Speaker Change: Yeah, and that's part of what we're doing here is creating a specialized sales force, specifically for zinium instruments.

Speaker Change: with its own management structure and specialised cat bags, sales and executives. And we do things that that's going to help both in terms of opportunity creation and converting opportunities into sales.

Serge Saxonov: And so we step back kind of re-evaluating from both in line with all those learning from first principles, given where portfolio is, given where our barriers are for strategic growth going forward. And we architected kind of the sales organization with those principles and those learnings in mind. And we feel really good about where things are landing and kind of a much cleaner now sort of roles or responsibilities that will have in our sales team. And also much more manageable territories and much more clear sort of specialization and an expertise that we can now deploy and stuff that's not really well for scaling growth forward.

Michael Ryskin: And your next question comes from the line of Michael Ryskin with Bank of America; your line is open. Great, thanks for taking the question, guys. Just one for me: about a month ago, there was a deal announced in the space of a small private single cell vendor by a major global sequencing company. A lot of speculation to be it on where that's going to go over time, but there's some expectation of possibly some sort of combination offering or maybe just a more streamlined go-to-market strategy.

Michael Ryskin: And your next question comes from the line of Michael Ryskin with Bank of America. Your line is open.

Speaker Change: And your next question comes from the line of Michael Ryskin with Bank of America. Your line is open.

Michael Ryskin: Great. Thanks for taking the question, guys. Just one for me.

Serge Saxonov: About a month ago, there was a deal announced in the space of a small private single cell vendor by a major global sequencing company. There's a lot of speculation debate on where that's going to go over time, but there's some expectation of possibly some sort of combination offering or maybe just a more streamlined go-to-market strategy. I realize it's still early, but just curious if you're hearing anything from your customers about, you know, what that could do for the competitive landscape and how you think Chromium is positioned if that was to happen, any response you might take. Yeah.

Michael Ryskin: About a month ago, there was a deal announced in the space of a small private single cell, then there by...

Speaker Change: You know, a major global sequencing company, a lot of speculation to be it on where that's going to go over time, but there's some expectation of possibly some sort of...

Speaker Change: You know, combination offering or maybe just a more streamlined go to market strategy.

Serge Saxonov: Realize it still early, but just curious if you're hearing anything from your customers about what that could do for the competitive landscape and how you think Chromium was positioned if that was to happen and your response you might take. Thanks. Yeah, so like we we always know, we got strong conviction, we operated very attractive spaces, very attractive markets, and so some extend the entry by, you know, a large sequencing company into the space, you know, demonstrates and values of conviction. Our strategy has always contemplated so the entry of new companies into this space. And what we have, you'll put together as far as probably development strategy as far as commercialization strategies meant to both drive growth in these markets and also prevent or comfort entry by new companies.

Speaker Change: Realizes the lore early, but just curious if you're hearing any from your customers.

Speaker Change: about, you know, what that could do for the competitive landscape and, you know, how you think Chromium is positioned, if that was to happen, any response you might take. Thanks.

Dan Lienard: And the next question comes from the line of a Dan Lienard with UBS. Your line is open. Great. Thank you for taking the question. This is Luan from Dan. I think we want to talk a little bit on the instrument witnesses that you mentioned. Can you describe the chance within the echo, like academic markets and then a formal market. Do you see any differences? And then also with all the commercial changes right now, any specific strategies that can help to convert the opportunities to orders.

Subhu Nambi: Yeah, so we always know we have strong conviction, we operate in very attractive spaces, very attractive markets. And to some extent, the entry by, you know, a large sequencing company into the space demonstrates and validates that conviction. Our strategy has always contemplated the entry of new companies into this space. And what we have put together as far as product development strategy, as far as commercialization strategy is meant to both drive growth in these markets and also prevent or counter the entry by new companies.

Speaker Change: Yeah, so like, we, we always known, we got strong conviction, we operate in very attractive spaces, very attractive markets.

Speaker Change: And to some extent, the entry by, you know, a large sequencing company into the space, you know, demonstrating how this is as a conviction. Our strategy has always contemplated, so the entry of new companies into the space.

Speaker Change: And what we have put together as far as product development strategy, as far as commercialization strategy is meant to both drive growth in these markets and also prevent or counter the entry by new companies.

Dan Lienard: Thank you. Yeah, so I mean, as far as sort of the market, I could do members is by far more, we have actually seen sort of challenges to both. Especially when you look with an AMR in America, but really wide like was the globe as well, different dynamics for sure, but both happen to be challenged right now. There's definitely a lot of sort of news and pressure on academic budgets with NIH and so on. So we're following that. But yes, of course, kind of across the board. As far as the question around sort of conversion of opportunities and got to moving those to the funnel.

Subhu Nambi: Fundamentally, I think it's well acknowledged that we have the best products, great performance, great workflows, and the widest breadth of applications. We also have a really strong roadmap going forward to both lower the cost and drive greater access, which again serves the dual purposes of driving increasing market adoption and also countering any potential new entrants. And it's also important to appreciate that we have a great commercial team both in terms of customer support and sales that really understands these applications and customers.

Serge Saxonov: Fundamentally, I think it's wallet knowledge that we have the best products, great performance, great workflows, and the widest breadth of applications. We also have a really strong roadmap going forward to both lower the cost and drive greater access, which again is sort of the dual purposes of driving increasing market adoption and also countering any potential new entrance. And it's also important to appreciate that we have a great commercial team on both terms in terms of customer support and sales. The really understands these applications and customers and, you know, these are oftentimes fairly intricate experiments that our team is helps our customers with.

Speaker Change: Fundamentally, I think it's well acknowledged that we have the best products, great performance, great workflows, the widest breadth of applications.

Speaker Change: We also have a really strong roadmap going forward to both lower the cost and drive greater access.

Speaker Change: which again serves the dual purposes of driving, increasing market adoption and also conferring any potential new entrants.

Serge Saxonov: Yeah, I mean, that's part of what we're doing here is creating a specialized sales force specifically for zinium instruments with its own management structure and special specialized catbacks sale executives. And we do things that that's going to help both the deserve opportunity creation and converting opportunity.

Speaker Change: And it's also wanted to appreciate that we have a great commercial team, on both terms of customer support and sales. The real-end stand, these applications and customers. These are oftentimes fairly intricate experiments that our team is helps our customers with.

Subhu Nambi: And these are oftentimes fairly intricate experiments that our team helps our customers with. And so you take all of these factors together, we feel good about our position. And again, I want to reemphasize, we've always contemplated our strategy, the entry of new players into the space, and we're fully prepared to respond, to answer as necessary, but ultimately to drive market expansion and greater customer satisfaction.

Serge Saxonov: And so, you know, you think all of these factors together; we feel good about our position. And again, I want to reemphasize we've always contemplated on strategy, the entry, the entry of new players into the space, and we're fully prepared to answer as necessary, but ultimately drive market expansion and greater customer success.

Speaker Change: And so, you know, you take all of these factors together, we feel good about our position, and again, I want to re-emphasize, we've always contemplated in our strategy the entry of new players into the space, and we're fully prepared to

Michael Ryskin: And your next question comes from the line of Michael Ryskin with Bank of America. Your line is open. Great. Thanks for taking the question guys. Just one for me, about a month ago there was a deal announced in the space of a small private single cell vendor by a major global sequencing company. A lot of speculation to be it on where that's going to go over time, but there's some expectation of possibly some sort of combination offering or maybe just a more streamlined go-to-market strategy.

Speaker Change: to answer as necessary, but ultimately drive market expansion and greater customer success.

Subhalaxmi Nambi: And your next question comes from the line of Sub-Bunambi with Gunganheim Securities. Your line is open. Hi, this is Ricky on Pursue at Guggenheim. Thanks for taking our questions. You reported China revenue that looks like it grew about 7.7 percent year over year, whereas a lot of peers have recorded struggling in China this quarter. Could you provide some color on what you saw in China for the quarter and what drove the strength. Was it all consumables or was it some instruments and then similarly in AMA you the revenue there also looks like it grew almost 20 percent.

Rikki Ong: And your next question comes from the line of Subhu Nambi with Guggenheim Securities. Your line is open.

Speaker Change: [inaudible]

Speaker Change: And your next question comes from the line of Subhu Nambi with Guggenheim Securities. Your line is open.

Rikki Ong: Hi, this is Rikki Ong for Subu at Guggenheim. Thanks for taking our questions. You reported Chinese revenue that looks like it grew about 7.7% year over year, whereas a lot of peers have reported struggling in China this quarter. Could you provide some color on what you saw in China for the quarter and what drove the strength? Was it all consumables, or was it some instruments? And then similarly, in EMEA, the revenue there also looks like it grew by almost 20%. Could you speak to what drove the strength there as well and if that's sustainable growth for the rest of the year? Thank you. Unknown Speaker Yeah, I mean,

Speaker Change: Hi, this is Rikki Ong for Subaru at Guggenheim. Thanks for taking our questions.

Michael Ryskin: Realises still early, but just curious if you're hearing anything from your customers about what that could do for the competitive landscape and how you think chrome units positioned if that was to happen. Any response you might take. Thanks.

Rikki Ong: You reported China revenue that looks like it grew about 7.7% year over year, whereas a lot of peers reported struggling in China this quarter could you provide some color on what you saw in China for the quarter and what drove the strength.

Serge Saxonov: Yeah, so like we we always know, we get from conviction, we operate in very attractive spaces, very attractive markets, and so some extend the entry by, you know, a large sequencing company into the space, you know, demonstrates and values of conviction. Our strategy has always contemplated so the entry of new companies into this space, and what we have you put together as far as probably development strategy as far as commercialization strategies meant to both drive growth in these markets and also prevent or comfort entry by new companies.

Speaker Change: was it all consumables, or was it some instruments, and then similarly in EMEA, the revenue there also looks like a grew almost 20% could you speak to what drove the strength there as well, and if that's sustainable growth through us today, thank you.

Serge Saxonov: Could you speak to what drove the strength there as well, and if that's sustainable growth through the rest of the year. Thank you.

Serge Saxonov: Yeah, I mean, maybe to touch on China first, certainly China was a big, big problem for us in the past several years. It was a very challenging environment there. It was very hard to have any visibility, and certainly the market dynamics were very hard to understand and to address.

Serge Saxonov: Yeah, I mean, so maybe to touch on China first. Certainly, China was a big big problem for us in past several years. The very challenging environment there was very hard to have any visibility, and certainly the market dynamics were very hard to understand and to address. We have been doing a lot of work since last year, really, to get close to our customers, to restructure some of our distributed relationships, our service provider relationships, so getting much better visibility. And some of that is, you know, I think, is improving performance. Some of us, there's also just underlying demand dynamics that have been going somewhat more in our flavor.

Speaker Change: Yeah, I mean, so maybe to touch on China first. Certainly China was a big, big problem for us in the past several years. It was a very challenging environment there. It was very hard to have any visibility. And certainly the market dynamics were very hard too.

Speaker Change: to the...

Serge Saxonov: We have been doing a lot of work since last year, really, to get closer to our customers, to restructure some of our distributor relationships, our service provider relationships, so getting much better visibility. And some of that is, I think, improving performance. But some of it is also just the underlying demand dynamics that have been going somewhat more in our favor.

Rikki Ong: to understand and to address. We have been doing a lot of work since

Serge Saxonov: Fundamentally, I think it's wallet knowledge that we have the best products, great performance, great workflows, the widest breadth of applications. We also have a really strong roadmap going forward to both lower the cost and drive greater access, which again is sort of the dual purposes of driving increasing market adoption and also countering any potential new entrants. And it's also important to appreciate that we have a great commercial team on both terms in terms of customer support and sales that really expands these applications and customers and, you know, these are oftentimes fairly intricate experiments that our team is helps our customers with.

Rikki Ong: last year really to get closer to our customers.

Rikki Ong: to restructure some of our distribution.

Rikki Ong: Distributor Relationships, our Service Provider Relationships, so getting a much better visibility.

Matt Sykes: And your next question comes from the line of Matt Sykes with Goldman Sachs. Your line is open. Good afternoon. Thanks for my questions and adjusting. Congrats on the new opportunity. It's been great working with you.

Matt Sykes: And your next question comes from the line of Matt Sykes with Goldman Sachs. Your line is open.

Rikki Ong: And your next question comes from the line of Matt Sykes with Goldman Sachs. Your line is open.

Matt Sykes: Good afternoon. Thanks for my questions. And Justin, congrats on the new opportunity. It's been great working with you. Just two quick ones for me.

Matt Sykes: Good afternoon, thanks for my questions and Justin congrats on the new opportunity. It's been great working with you. Just two quick ones for me.

Matt Sykes: What is your level of confidence in sort of the rebasing of chromium consumable growth given the sequential improvement you saw this quarter? And how much of an offset will the GEMX pricing, I think Justin you mentioned that, will be to this growth over the course of this year into next? And then secondly, just the reduction in xenium placement growth. How should we think about xenium consumable growth as a result of that? And can increased utilization of the existing installed base offset the lower growth in the installed base over the course of this year? Thanks.

Justin McAnear: Just two quick ones for me. What is your level of confidence in sort of the rebasing of Chromium consumable growth given the sequential improvement you saw this quarter? And how much of an offset will the GemEx pricing? I think just you mentioned that. We'll be to this growth over the course of this year into next.

Matt Sykes: What is your level of confidence in sort of the rebasing of chromium consumable growth, given the sequential improvement you saw this quarter?

Serge Saxonov: And so, you know, you think all of these factors together, we feel good about our position. And again, I want to reemphasize, we've always contemplated on strategy, the entry of new players into the space and we're fully prepared to to answer as necessary, but ultimately drive market expansion and greater customer success.

Speaker Change: How much of an offset will the GEM-X pricing, I think Justin you mentioned that, will be to this growth over the course of this year into next?

Justin McAnear: And then secondly, just the reduction in zinium placement growth. How should we think about zinium consumable growth as a result of that? And can increase utilization of the existing install base offset the lower growth and install base over the course of this year? Thanks.

Speaker Change: Secondly, just the reduction in xenium placement growth, how should we think about xenium consumable growth as a result of that, and can increased utilization of the existing installed base offset the lower growth in the installed base over the course of this year? Thanks.

Justin McAnear: Thanks, Matt. All great questions. I think when we're looking at chromium, you know, when we went back to the dynamics of, basically, going back to the end of the year when we initiated guidance and we talked about how we would expect it for the impacts of the transition, I think those drivers largely played out like we had expected, although probably bigger in magnitude when we talked about Q2 on the last call, as Q2 played out. I think, again, it's those same drivers on the chrome consumables.

Justin McAnear: Thanks, Matt. All great questions. I think when we're looking at chromium, you know, when we went back to the dynamics in basically going back to the end of the year when we initiated guidance, and we talked about how we expect it for the impacts of the transition? I think those drivers largely played out like we have expected, although probably bigger in magnitude when we talked about Q2. On the last call, is Q2 played out. I think, again, it's the same drivers on the chromium on the chromium consumables. Like we saw a great sequential rebound on chromium, both on instruments and consumables, growing 12% sequentially from Q1 to Q2. You know, obviously 12% overall.

Speaker Change: Thanks, Matt. All great questions.

Subhalaxmi Nambi: And your next question comes from the line of sub-bunambi with the Gunganheim securities. Your line is open. Hi, this is Ricky on pursue at Guggenheim. Thanks for taking our questions. You reported China revenue that looks like it grew about 7.7% year over year, whereas a lot of peers have recorded struggling in China this quarter. Could you provide some color on what you saw in China for the quarter and what drove the strength.

Speaker Change: I think when we're looking at chromium, you know, when we went back to the dynamics in...

Speaker Change: Based on going back to the end of the year when we initiated guidance and we talked about how we expected for the impacts of the transition.

Speaker Change: I think those...

Speaker Change: Those drivers...

Speaker Change: largely played out, like we...

Speaker Change: had expected, although probably bigger in magnitude, when we talked about Q2 on the last call, as Q2 played out. I think, again, it's those same drivers on the chromium consumables. Like, we saw a great sequential rebound on chromium, both on instruments and consumables, growing 12% sequentially.

Subhalaxmi Nambi: Was it all consumables or was it some instruments and then similarly in EMEA you the revenue there also looks like it grew almost 20%. Could you speak to what drove the strength there as well and if that's sustainable growth through the rest of the year. Thank you.

Justin McAnear: We saw a great sequential rebound on chromium, both on instruments and consumables, growing 12% sequentially from Q1 to Q2, obviously 12% overall. And so then when you look at the year-on-year comparisons for chromium, we were down quite a bit in Q1, year-over-year, and Q2, that was halved. Embedded into our guidance range, when we get into Q3, we expect to see pretty close to flat year-over-year, if not roughly flat, and we do expect an increase for chromium.

Serge Saxonov: Yeah, I mean, so maybe to touch on China first, certainly China was a big, big problem for us in the past several years. The very challenging environment there was very hard to have any visibility and certainly the market dynamics were very hard to understand and to address. We have been doing a lot of work since last year, really, to get closer to our customers, to restructure some of our distributed relationships, our service provider relationships, so getting much better visibility. And some of that is, you know, I think it's improving performance, some of it there's also just underlying demand dynamics that have been going somewhat more in our favor recently.

Speaker Change: from Q1 to Q2 with, you know, obviously 12% overall.

Justin McAnear: And so then when you look on the year-on-year compares for chromium, you know, we were down quite a bit in Q1 year over year, and Q2 that was halved, embedded into our guidance range when we get into Q3. We expect to get pretty close to flat year over year. It's not roughly flat, and we do expect an increase for chromium in Q4 year over year. And so obviously, when you put all that together and you look at the four-year year-over-year compare, just because of the downside that we had in the decreases that we had in Q1.

Speaker Change: And so then when you look on the year-on-year compares for chromium, you know, we were down quite a bit and

Speaker Change: Q1 year-over-year and Q2 that was halved.

Speaker Change: Embedded into our guidance range when we get in to Q3. We expect to get...

Speaker Change: Pretty close to flat year over year, it's not roughly flat and we do expect an increase for chromium.

Justin McAnear: Q4 year-over-year. And so obviously, when you put all that together and you look at the full year, year-over-year comparison, just because of the downside that we had in... Supplement Area Report, Welcome to the San Francisco University Science Fair!

Speaker Change: in Q4 year over year. And so obviously, when you put all that together, and you look at the full year, year over year compare, just because of the downside that we had in

Justin McAnear: and Q2, still going to have a decrease for the year. But this is going to hit instruments harder than consumables. And I do think that, you know, the instruments, there's other factors that play there in the macro environment as well. But I think what gives us confidence is we're seeing the dynamics play out at the customer level like we had expected. And, you know, that update is, or that is incorporated into our guidance update for Xenium.

Speaker Change: The decreases that we have in Q1 and Q2 are still going to have a decrease for the year, but this is going to hit instruments harder than consumables, and I do think that

Justin McAnear: You know, the instruments, there's other factors that play there in the macro environment as well, but I think what gives us confidence is we're seeing the dynamics play out at the customer level like we had expected. That update is that it is incorporated into our guidance update for xenium. Great question on the xenium pull through, you know, we have been seeing decent growth and spatial consumables with lower xenium placements, but that would mean lower consumables in the future.

Matt Sykes: And your next question comes from the line of a Matt Sykes with Goldman Sachs, your line is open. Good afternoon. Thanks for my questions and adjusting congrats on the new opportunity. It's been great working with you. Just two quick ones for me. What is your level of confidence and sort of the rebasing of chromium consumable growth, given the sequential improvement you saw this quarter? And how much of an offset will the GemEx pricing?

Speaker Change: You know, the instruments, there's other factors that play there in the macro environment as well. But I think what gives us confidence is we're seeing the dynamics play out at the customer level, like we had expected, and

Speaker Change: You know, that update is, that is incorporated into our guidance update for

Justin McAnear: Great question on the Xenium pull-through. You know, we have been seeing decent growth in spatial consumables with lower Xenium placements. You know, that would mean lower consumables in the future. But as we get past these transitory factors right now impacting us and start playing, start to pick up. When we look at our earliest cohorts, earliest purchasers of the Xenium instrument, they're still increasing their utilization. We are seeing overall that there's a decent ramping period for customers from when they buy the instrument, go through the installation training, and start using it more likely. That's about probably a two-quarter ramp-up period.

Speaker Change: For Xenium, great question on the Xenium pull-through. You know, we have been seeing decent growth in spatial consumables.

Matt Sykes: I think just you mentioned that. We'll be to this growth over the course of this year into next. And then secondly, just the reduction in zinium placement growth, how should we think about zinium consumable growth as a result of that? And can increase utilization of the existing install base offset the lower growth and install base over the course of this year? Thanks. Thanks, Matt. All great questions. I think when we're looking at chromium, you know, when we went back to the dynamics in basically going back to the end of the year when we initiated guidance and we talked about how will we expected for the impacts of the transition.

Justin McAnear: But as we get past these transitory factors right now impacting us and start placing more instruments, you know, obviously, we would expect that to pick up when we look at our earliest cohorts, earliest purchasers of the Xenium instrument, they're still increasing their utilization. We are seeing overall that there's a decent ramping period for customers from when they buy the instrument, go through the installation training, and start using it more.

Speaker Change: with lower zinium placements, you know, that would mean lower consumables.

Speaker Change: In the future, but as we get past these transitory factors right now impacting us and start playing, start placing more instruments.

Speaker Change: You know, obviously we would expect that to pick up.

Speaker Change: When we look at our earliest cohorts, earliest purchasers of the Xenium instrument, they're still increasing their utilization.

Justin McAnear: I believe that's probably about a two quarter ramp-up period. So we are seeing the difference between, you know, customers that have had the instrument for a quarter or two quarters versus those that have had it longer. But I think the important thing to take away is that there is this trend towards increasing utilization over time and then, you know, we just introduced Xenium Prime 5K.

Speaker Change: We are seeing overall that there's a decent ramping period for customers from when they buy the instrument, go through the installation training, and start using it more reliably. That's about probably a two-quarter ramp-up period. So we are seeing the difference between...

Justin McAnear: So we are seeing the difference between, you know, customers that have had the instrument for a quarter or two quarters versus those that have had it longer. But I think the important thing to take away is that there is this trend towards, you know, the increasing utilization over time.

Matt Sykes: I think those drivers largely played out like we have expected, although probably bigger in magnitude when we talked about Q2 on the last call is Q2 played out. I think it again, it's the same drivers on the chromium on the chromium consumables like we saw a great sequential rebound on chromium both on instruments and consumables growing 12% sequentially. From Q1 to Q2, you know, obviously 12% overall. And so then when you look on the year on year compares for chromium, you know, we were down quite a bit and Q1 year over year and Q2 that was halved embedded into our guidance range when we get into Q3.

Speaker Change: you know, customers that have had the instrument for a quarter or two quarters versus those that have had it longer. But I think the important thing to take away is that there is this trend towards, you know, the increasing utilization over time. And then, you know, we just introduced.

Justin McAnear: And then, you know, we just introduced Xenium Prime 5K. And there's a lot of excitement around that. And that can have some impact on the pull-through and how customers use the instrument. And so, you know, it'll be interesting to see how that plays out as well, but there's been a ton of excitement around that too. And I do think that, you know, overall, this is an instrument that could, you know, have an overall high rate of pull-through, you know, for an instrument itself that is a low margin instrument. You know, we have to believe that longer term, that the customers that are investing in that, and we ourselves investing in those placements believe that there's going to be, you know, decent pull-through in the future.

Justin McAnear: There's a lot of excitement around that, and that can have some impact on the pull-through and how customers use the instrument. And so, you know, it'll be interesting to see how that plays out as well, but there's been a ton of excitement around that, too. And I do think that, you know, overall, this is an instrument that could, you know, have an overall high rate of pull-through. You know, for an instrument itself that is a low margin instrument, we have to believe that, longer term, customers that are investing in it, and we ourselves investing in those placements, believe that there's going to be, you know, decent pull-through in the future. And so I feel good about where things are trending, but not ready to share more detail.

Speaker Change: Zenium Prime 5K, there's a lot of excitement around that, and that can have some impact on the pull-through and how customers use the instrument and so it'll be interesting to see how that plays out as well, but there's been a ton of excitement.

Speaker Change: around that too.

Speaker Change: And I do think that, you know, overall, this is an instrument that could...

Speaker Change: have an overall high rate of pull-through for an instrument itself that is a low-margin instrument, we have to believe that longer-term that

Matt Sykes: We expect to get pretty close to flat year over year. It's not roughly flat and we do expect an increase for chromium in Q4 year over year. And so obviously when you put all that together and you look at the four year year over year compare just because of the downside that we had in the decreases that we had in Q1. [inaudible] and Q2, still going to have a decrease for the year.

Speaker Change: Customers that are investing in that and we ourselves investing in those placements believe that there's going to be, you know, decent pull through in the future. And so.

Justin McAnear: And so, feel good about where things are trending, but not ready to share more detail than that at this point.

Speaker Change: Feel good about where things are trending, but not ready to share more detail than that at this point.

Matt Sykes: But this is going to hit Instruments harder than consumables. And I do think that, you know, the Instruments, there's other factors that play there in the macro environment as well. But I think what gives us confidence is we're seeing the dynamics play out at the customer level like we had expected. And, you know, that update is, or that is incorporated into our guidance update for Xenium. Great question on the Xenium pull-through.

Matthew Larew: And your next question comes from the line of Matt Laru with William Blair. Your line is open. Yeah, good afternoon. Sir, you know, last quarter, you obviously was in the context of pricing for Chromium, talked about, you know, a long return goal, $100 per sample. You've talked about GEMX; you know, being one step on that journey in the belief that when you reached an appropriate pricing level, there would be significant elasticity and demand there.

Matt LaRue: And your next question comes from the line of Matt LaRue with William Blair. Your line is open.

Speaker Change: And your next question comes from the line of Matt Larew with William Blair. Your line is open.

Serge Saxonov: Hi, good afternoon. Serge, obviously, last quarter, you were in the context of pricing for chromium and talked about, you know, the longer-term goal of $100 per sample. You talked about GEMX, you know, being one step on that journey and the belief that when you reached an appropriate pricing level, there'd be significant elasticity and demand there. So just kind of curious, how much of the continued journey is one reliant on additional technological advancements and product enhancements versus perhaps commercial or strategic decisions on your part?

Matt Larew: Hi, good afternoon.

Matt Larew: Serge, you know, last quarter, you obviously was in the context of pricing for chromium, talked about, you know, a longer-term goal of $100 per sample.

Speaker Change: You've talked about GMAX, you know, being one step on that journey and the belief that...

Speaker Change: When you reached an appropriate pricing level, there would be significant elasticity and demand there. So, just kind of curious.

Serge Saxonov: So, just kind of curious where you view the progress that you've made in the last few months, how much of the continued journey is one reliant on additional technology advancements and product advancements versus perhaps commercial or strategic decisions on your part. Yeah, so we do believe strong, as I mentioned earlier in my prepare to match, and I've been saying for a while that there's strong elasticity of demand in the marketplace. With Genomics, we actually reduced the price per sample by about 10% relative to previous next year architecture, and also decreased the price per sell by a significant amount because it has twice as much throughput, so the price per sell went out by more than a factor of two.

Matt Sykes: You know, we have been seeing decent growth in spatial consumables with lower Xenium placements. You know, that would mean lower consumables in the future. But as we get past these transitory factors right now impacting us and start playing, start placing more instruments, you know, obviously we would expect that to pick up. When we look at our earliest cohorts, earliest purchasers of the Xenium instrument, they're still increasing their utilization. We are seeing overall that there's a decent ramping period for customers.

Speaker Change: where you view the progress that you've made here the last few months.

Speaker Change: How much of the continued journey is one relied on additional technology advancements and product enhancements versus perhaps commercial or strategic decisions on your part.

Serge Saxonov: Yeah, so we do believe strongly, as I mentioned earlier in my prepared remarks, and I've been saying for a while that there's a strong elasticity of demand in the marketplace. With GenNext, we actually reduced the price per sample by about 10% relative to the previous NextGen architecture and also decreased the price per cell by a significant amount because it has twice as much throughput, so the price per cell went down by more than a factor of two.

Matt Sykes: From when they buy the instrument, go through the installation training and start using it more lightly. That's about probably a two-quarter ramp up period. So we are seeing the difference between, you know, customers that have had the instrument for a quarter or two quarters versus those that have had it longer. But I think the important thing to take away is that there is this trend towards, you know, the increasing utilization over time.

Speaker Change: Yeah, so we do believe strong as I mentioned early in my prepare to much, and I've been saying for a while that there's strong losses still demand in the marketplace.

Speaker Change: With your next

Speaker Change: We actually reduced the price per sample by about 10% relative to previous next year architecture and also decreased the price per cell by a significant amount because it has twice as much throughput, so the price per cell went down by more.

Serge Saxonov: We are seeing customers are appreciating that for sure, and quite a few running kind of larger numbers of sales to as a result of that. The first order effect on these tends to be more they either spend just spend the same budget as they wouldn't otherwise just kind of running more, or to some extent some of them also just taking the lower price and running the same number of those samples or sales. But in a long run, we do believe, and we see some evidence of that from our flux products that the lower prices will ultimately draw to much more demand and market expansion.

Serge Saxonov: We are seeing customers appreciating that, for sure, and quite a few running larger numbers of cells as a result of that. The first order effect on this tends to be that they either just spend the same budget as they would have otherwise, just kind of running more, or to some extent, some of them are also just taking the lower price and running the same number of those samples or cells.

Speaker Change: and Doctor of 2. We are seeing customers are appreciating that for sure and quite a few writing kind of large numbers of cells.

Speaker Change: to as a result of that. The first order effect on these tends to be more they either spend just spend the same budget as they would have otherwise just kind of running more or to some extent, some of them also just taking the lower price and

Matt Sykes: And then, you know, we just introduced Xenium Prime 5K. And there's a lot of excitement around that. And that can have some impact on the pull-through and how customers use the instrument. And so, you know, it'll be interesting to see how that plays out as well, but there's been a ton of excitement around that too. And I do think that, you know, overall, this is an instrument that could, you know, have an overall high rate of pull-through, you know, for an instrument itself that is a low-margin instrument.

Serge Saxonov: But in the long run, we do believe, and we see some evidence of that from our flux products, that the lower prices will ultimately drive much more demand and market. Again, GEMMAX and our FLEX launches are sort of steps along that journey. Again, the initial signs are still too early to be, you know, to be pointing to kind of massive changes, but we're feeling good about where things are headed.

Speaker Change: and running the same number of those samples ourselves. But in the long run, we do believe, and we see some evidence of that from our Flux products, that the lower prices will ultimately drive to much more demand and market expansion.

Serge Saxonov: Again, genomics and our flux launches are sort of steps along the journey. The initial signs are still too early to be pointing to kind of massive changes, but we're feeling good about where things are headed and going forward. We do expect product configurations that will lean further into the elasticity of demand here.

Jim: Again, Jim Max and our flex launches are sort of steps along the journey.

Matt Sykes: You know, we have to believe that longer term that customers that are investing in that. And we ourselves investing in those placements believe that there's going to be, you know, decent pull-through in the future. And so, feel good about where things are trending, but not ready to share more detail than that at this point.

Speaker Change: The initial signs are still too early to be, you know, to be pointing to a kind of massive changes, but we're feeling good about where things are headed. And going forward, we do expect product configurations that will.

Serge Saxonov: And going forward, we do expect product configurations that will lean further into the elasticity of demand here. We have plans to address the different cost bottlenecks that our customers are facing, whether it's on a, you know, per experiment basis, per sample basis, per cell basis. And we'll be rolling those out in due time. And we also are cognizant of, you know, putting more commercial focus on these efforts, too, as we go forward. And part of the goal of our restructuring is to enable us to do so.

Serge Saxonov: We have plans to address the different cost bottlenecks that our customers are facing, whether it's on a fair experiment basis, per sample basis, per sell basis, and we'll be rolling those out in due time. We also do our cognizant of putting more commercial focus on these efforts too, as we go forward. That part of the global bar restructuring is to enable that as well.

Speaker Change: Lean further into the elasticity of demand here. We have...

Justin McAnear: And your next question comes from the line of a matte baroo with William Blair. Your line is open. I could afternoon. So, you know, last quarter, you obviously was in the context of pricing for Chromium. Talked about, you know, a long return goal, $100 per sample. You've talked about GEMEX, you know, being one step on that journey and the belief that when you reached an appropriate pricing level, there would be significant elasticity and demand there.

Speaker Change: We have plans to address the different cost bottlenecks that our customers are facing, whether it's on a, you know, per experiment basis, per sample basis, per cell basis.

Speaker Change: And we'll be rolling those out in due time. And we also are cognizant of putting more commercial focus on these efforts, too, as we go forward. And part of the goal of our restructuring is to enable that as well.

Justin McAnear: So, just kind of curious where you view the progress that you've made in the last few months, how much of the continued journey is one reliant on additional technology advancements and product advancements versus perhaps commercial or strategic decisions on your part. Yeah, so we do believe strong, as I mentioned earlier in my prepare to mention, I've been saying for a while, that there's strong elasticity of demand in the marketplace. With genetics, we actually reduce the price per sample by about 10% relative to previous next year architecture and also decreased the price per cell by a significant amount because it has twice as much throughput, so the price per cell went out by more than a factor of two.

Luke Sergott: And your next question comes from the line of Luke Sirgod with Barclays. Your line is open. Great. Thanks, guys. I just kind of want to go back to the Xenium conversation about the consumables and pull-through. So, you know, talk about what happened in the quarter from a pull-through perspective. You know, are you seeing any air pocket there waiting for the 5K? You know, with the strength and the vision in the quarter, does that mean that the Xenium pull-through has really stepped down? Just kind of as we're thinking about going forward here, what that progression will look like.

Serge Saxonov: And your next question comes from the line of Luke Sergott with Barclays. Your line is open. Great. Thanks, guys.

Speaker Change: i

Speaker Change: In your next question, comes from the line of Luke Sergott with barclays, your line is open.

Luke Sergott: Great, thanks guys. I just kind of want to go back to the Xenium conversation about the consumables and pull-through. So, you know, talk about what happened in the quarter from a pull-through perspective. You know, are you seeing any air pockets there waiting for the 5K? You know, with the strength in the visium in the quarter, does that mean that, you know, the xenium pull through has really stepped down just kind of as we're thinking about going forward here? What will that progression look like?

Luke Sergott: Great, thanks guys. I just kind of want to go back to the Xenium conversation about about the consumables and pull through. So, you know, talk about what happened in the quarter from a pull through perspective. You know, are you seeing any air pocket there waiting for the 5K?

Speaker Change: You know, with the strength in the Visium in the quarter, does that mean that, you know, the Xenium pull-through has really stepped down, just kind of as we're thinking about going forward here, what that progression will look like?

Serge Saxonov: Also, yeah, look, as I mentioned before, I think we actually had a strong demand from both sides of the spatial business of both in the Xenium and the Xenium. There was definitely anticipation of the 5K that was causing some amount of pausing with customers earlier, but like we said, they actually all too much orders were really healthy. It was like once we started shipping the product. in June. So, yeah, so I think the underlined dynamics are strong, sort of on both sides, across the both franchises.

Serge Saxonov: Well, so yeah, look, as I mentioned before, I think we actually had strong demand from kind of both sides of the spatial business, both in Vizium and Zinium. There was definitely anticipation for the 5K that was causing some amount of pausing with customers earlier. But like we said, the actual ultimate orders were really healthy once we started shipping the product in June. Yeah, so I think the underlying dynamics are wrong on both sides, across both franchises.

Speaker Change: [inaudible]

Justin McAnear: We are seeing customers are appreciating that for sure and quite a few running kind of larger numbers of cells to as a result of that. The first order effect on these tends to be more they either spend just spend the same budget as they wouldn't otherwise just kind of running more or to some extent some of them also just taking the lower price and. And running the same number of those samples or cells, but in a long run, we do believe and we see some evidence of that from our flux products that the lower prices will ultimately draw to much more demand and market expansion again Jim Max and our flux launches are sort of steps along the journey.

Speaker Change: Well, so, yeah, Luke, as I mentioned before, I think we actually had a...

Speaker Change: Strong demand from both sides of the spatial business, both in the gym and the gym. There was definitely a dissipation of the 5K that was causing.

Speaker Change: Samamad of Paul Zin and Scott with Customers.

Speaker Change: earlier, but like we said, the actual ultimate orders were really healthy once we started shipping the product in June .

Speaker Change: Yeah, so I think the underlying dynamics are...

Speaker Change: strong

Speaker Change: Corneau on both sides across the both.

Justin McAnear: Yeah, Luke, you can just add to that, like when you're talking instruments looking at Cytosist versus Xenium, like Cytosist, although there has been a slight impact of that, it's been pretty solid quarter to quarter. And so, you know, bigger impact on Xenium instruments. But I do think in this environment with cat-x pressures, you know, some customers look like are opting to try out Cytosist and Xenium before jumping to Xenium because, you know, we are seeing less of an impact there and then just hearing some of that amic totally as well.

Justin McAnear: Yeah, Luke, and just to add to that, like when you're talking instruments looking at Cytosys versus Zinium, like Cytosys, although there has been a slight impact on that, it's been pretty solid quarter to quarter. And so, you know, a bigger impact on Zinium instruments, but I do think, in this environment with CAPEX pressures, some customers look like they are opting to try out Cytosys and Vizium before jumping to Zinium because, you know, we are seeing less of an impact there and then just hearing some of that anecdotally as well.

Speaker Change: Franchises.

Justin McAnear: International science is still too early to be you know to be pointing to kind of massive changes, but we're feeling good about where things are headed and going forward, we do expect product configurations that will lean further into the elasticity of demand here. We have plans to address the different cost bottlenecks that our customers are facing, whether it's on a very experiment basis, per sample basis, per cell basis, and we'll be rolling those out in due time. And we also do our content of putting more commercial focus on these efforts to as we go forward than the part of part of the global bar restructuring is to be able to as well.

Speaker Change: Luke can just add to that like when you're talking instruments looking at cytosols versus you know like cytosols

Speaker Change: Although there has been a slight impact to that, it's been pretty solid quarter to quarter, and so, you know, bigger impact on

Speaker Change: Zinnium Instruments, but I do think in this environment with capex pressures

Speaker Change: You know, some customers looks like they're opting to try out a site of status and a museum before jumping to Zenium because, you know, we are seeing less of an impact there and they're just hearing some of that anecdotally as well.

Operator: And that is all of our questions for today.

Kayla: And that's all of our questions for today, and this does conclude today's conference call. You may now disconnect.

Operator: And this does conclude today's conference call. You may now disconnect.

Speaker Change: And that is all of our questions for today and this does conclude today's conference call. You may now disconnect.

Luke Sergott: And your next question comes from the line of Luke Sirgod with Barclays. Your line is open.

Speaker Change: [inaudible]

Serge Saxonov: Great. Thanks guys.

Serge Saxonov: I just kind of want to go back to the zineum conversation about about the consumables and pull through. So you know, talk about what happened in the quarter from a pull through perspective, you know, are you seeing any air pocket there waiting for the 5k. You know, with the these strengths and the the vision in the quarter, does that mean that you know the zineum pull through has really stepped down, just kind of as we're thinking about going forward here, what that what that progression will look like.

Serge Saxonov: Also, yeah, look, as I mentioned before, I think we actually had a strong demand from from kind of both sides of the spatial business of both in the zoom and and zineum. There was definitely anticipation of the 5k that you know that that was causing some amount of pausing with customers earlier, but like we said, they actually all too much orders were really healthy.

Justin McAnear: So once we started shipping the product, in June. So, yeah, so I think the underlying dynamics are strong, sort of on both sides, across the both franchises. Yeah, Luke, you can just add to that, like when you're talking instruments looking at cytosist versus zinean, like cytosist, although there has been a slight impact of that, it's been pretty solid quarter to quarter. And so, you know, bigger impact on zinean instruments, but I do think in this environment, with CAPX pressures, you know, some customers looks like are opting to try out cytosist and vizium before jumping to zinean because, you know, we are seeing less of an impact there, and then just hearing some of that amic totally as well.

Kayla: And that is all of our questions for today, and this does conclude today's

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