10x Genomics, Inc.

Thank you for standing by and welcome to the 10x Genomics first quarter 2021 earnings conference call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press part one on your telephone keypad. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Eric Chesky, Director of Investor Relations and Strategic Finance. Thank you. Please go ahead, sir.

Thank you. Earlier today, 10X Genomics released financial results for the first quarter ended March 31, 2021. 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. An archived webcast of this call will be available on the Investors tab of the company's website, 10hgenomics.com, for at least 45 days following this call. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties, and factors that could cause results to differ appears in the press release 10X Genomics issued today and in the documents and reports filed by 10X Genomics from time to time with the Securities and Exchange Commission. 10X Genomics disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. Joining the call today are Serge Saxinov, our CEO and co-founder, and Justin McInerney, our chief financial officer. In addition, Brad Crutchfield, our chief commercial officer, will be available for Q&A. With that, I'll now turn the call over to Serge.

Serge? Thanks, Eric. Good afternoon, and thank you for joining us. On today's call, I will start with a brief review of our performance and execution during the first quarter. Next, I will discuss our views on current market dynamics, our vision for the century of biology, and our investment across the business to achieve this vision. I will then turn the call over to Justin for a more detailed look at our financials and outlook for the year. We got a strong start to 2021, with first quarter revenues growing 47% year-over-year to $106 million as we continue to drive adoption of our Chromium and Visium platforms. While we saw good results this quarter, there are many indications that our customers are not yet back to normal productivity. This is due in large part to COVID-related protocols, which have a disproportionate impact on decentralized bench experiments. That said, our conviction in the vast opportunity ahead remains as strong as ever. The frontiers of biology continue to expand, with 10X leading the way. Our rapid pace of innovation has continued, as we have launched breakthrough products for both our Chromium and Visium platforms. At our inaugural experience event, we were inspired by our global customer community and their intense engagement in our technology, applications, and product roadmaps. It is precisely this engagement that defines the urgency of our mission and commitment to our customers. Now, moving to our quarterly results, and starting with Chromium, demand for instruments and consumables remained strong in the first quarter. And it is clear that our diverse product set is resonating across a wide range of applications and use cases. Adoption of our gene expression solution continues to expand, and single-cell gene expression is increasingly becoming the standard for measuring biological systems across most areas of life sciences. While earlier in its life cycle, our immune profiling solution is also on an encouraging trajectory. From COVID and infectious disease applications, to immuno-oncology and autoimmunity. This solution enables a detailed and comprehensive view of the immune system and is now becoming an essential tool for discovery and validation experiments. We're also excited by the strong interest in our gene expression plus a toxic multi-ome solution, which began shipping last September. This product is a game changer for understanding the rules of epigenetic programming. By simultaneously measuring chromatin accessibility and gene expression within the same cell, researchers are able to link individual epigenetic programs to their outputs across varieties of cells, tissues, and experimental conditions. We're now beginning to see publications from our early adopters. In a recent preprint, researchers used our gene expression and attack solutions, and subsequently multiome, to profile the developing human cerebral cortex and to better understand the pathogenesis of newer developmental disorders such as autism. The team created an atlas and mapped various gene regulatory elements in the developing brain, which will help understanding the programs governing human development and disease. We remain focused on increasing access to Chromium and bringing more customers into the single-cell ecosystem. During the first quarter, we launched our CellPlex and load throughput kits and open general access to our 10X cloud solution, lowering barriers to adoption. We're pleased with the response to these products and capabilities since launch, and they're progressing in line with our expectations. Now, moving to Visium, we're encouraged by the speed of adoption and the pace of discoveries from our customers. There are now approximately 100 publications and preprints to date featuring Visium. For example, just recently in CEL, researchers used Visium in concert with Chromium to characterize the development of the human intestine, identifying and mapping the function of over 100 different cell states linked to major developmental milestones. These researchers were able to describe specific expression programs and define cells and locations linked to rare developmental intestinal disorders, providing the scientific community with an important resource to facilitate further studies. Visium is early in its life cycle, and we will continue to bring additional enhancements to this platform. The product roadmap we laid out earlier this year featured new foundational capabilities that will help fulfill its potential. This starts with the launch of Visium for FFPE, which is now available for pre-order. This product gives researchers access to the full transcriptome across the entire tissue, enabling, for the first time, true unbiased discovery in FFPE samples. While we're seeing significant interest from our existing Visium customers, the majority of interest thus far is coming from translational customers new to 10X. And while it remains very early, we're pleased with the reception in the market thus far. We anticipate shipping this product later this quarter. As we look to the future, there's a vast universe of opportunities ahead of us. This is the century of biology. And our goal is to develop technologies to accelerate the mastery of biology and to help researchers develop precision diagnostics, targeted therapies, and cures needed to solve humanity's most pressing health challenges. The COVID pandemic is a striking demonstration of the importance of our mission. Due to the massive and relentless efforts by scientists across the globe, we have seen incredible advancements in our understanding of the SARS-CoV-2 virus, the underpinnings of the disease, and approaches to fighting it, all culminating in the rapid development of multiple but effective vaccines. There is an increasing recognition of the importance of investing in the life sciences among the public, the industry, and the policymakers. For example, the latest US federal budget proposals have called for large increases in the resources allocated to science-related agencies, and the creation of a new agency aimed at driving transformational innovation within biomedical research. If approved, the proposed 2022 budget would represent one of the largest annual increases for the NIH on record. These trends are not limited to the U.S. alone. Around the world, we're seeing calls for increased investment in science and general research. And while these are only proposals, we think they are emblematic of increased support for life sciences research and a favorable funding environment for our customers going forward. We believe these trends will accelerate the progress our customers have been making. further building on the large number of scientific discoveries that have been enabled by our platforms. To date, there have been more than 2,500 publications using our products across a wide variety of research areas, including cancer, autoimmunity, and infectious disease. These publications have uncovered one of the key research findings of recent years, that cell heterogeneity intertwined with complex gene networks is a pervasive feature of all tissues. Ultimately, this means that every tissue sample will need to be analyzed with single cell and spatial context, whether for basic research or for clinical diagnostics. We have laid the foundation for this future by investing in our three complementary platforms, Chromium, Visium, and our in situ platform, which is under development. Together, they will provide a comprehensive set of solutions for researchers and clinicians. For example, significant elements of this feature could be gleaned from AACR, a major cancer conference which took place last month where our products were featured prominently. From identifying rare progenitor cell types to understanding the biology of subclonal populations to measuring immune infiltrations and tumor microenvironment to discovering and analyzing potential tissue-based biomarkers. The benefits of single-cell and spatial multiomics approaches are becoming increasingly clear. Since inception, we have focused on innovation, on building new technologies to enable our customers to make breakthrough discoveries and accelerate the understanding of biology. We have invested nearly $1 billion in product development and innovation and launched more than 15 pioneering products since 2015. These products have won multiple awards, ticked off the single-cell revolution, and catalyzed the emergence of spatial genomics. Our research and development work has resulted in a broad intellectual property portfolio with 1,100 patents and patent applications covering the breadth of our products as well as many important application areas. Moving forward, we intend to protect our existing and future innovations as we continue to invest in creating revolutionary products. We're now in an incredible position to capitalize on the immense value creation opportunities ahead, and we will continue to invest broadly to ensure that we have the necessary resources to achieve these goals. This starts with continued investment in the 10x team. Our employees have laid the foundation of the company's success to date. As we look to achieve our ambitious goals, preserving our collaborative culture and sense of urgency while also massively scaling the organization is going to be essential. We will remain intensely focused on finding, hiring, and developing top talent across the organization. Within R&D, we're investing in our teams spanning Pleasanton, Singapore, Stockholm, and Copenhagen to drive product innovation across all three of our platforms. With Chromium, we're investing to remove barriers for those new to genomics while also adding powerful new capabilities. Visium is early in its lifecycle, and we're focused on it adding the core features necessary to make this platform the standard for spatial genomics research. And finally, within C2, we're focused on building the right solutions with the user experience and quality that our customers have come to expect. Consistent with our investment in R&D, we're expanding our commercial organization in response to the strong demand we're seeing in the market. With our extensive roadmap of new products and capabilities, we're investing to support our entry into new markets and application areas. And finally, we're expanding our global infrastructure, operations, and manufacturing capabilities to support growth across all of these vectors. We have a deep conviction that very little in biology can be fully understood except through the lens of single-cell analysis. This conviction has materialized in our Chromium and Visium platforms and is guiding the development of our NCC platform. We unequivocally see a future where every tissue sample should be analyzed using at least one of these three approaches. We look forward to realizing this future as we pursue our mission of mastering biology to advance human health. With that, I will now turn the call over to Justin for more detail on our financials.