10x Genomics, Inc.

Hello and welcome to the 10X Genomics Third Quarter 2021 Earnings Call. My name is Charlie and I will be coordinating your call today. If you would like to ask a question during the presentation, you may register to do so by pressing Start followed by 1 on your telephone keypad. I will now hand you over to your host, Eric Joski, Senior Director of Investor Relations and Strategic Finance, to begin. Eric, please go ahead.

Thank you. Earlier today, 10X Genomics released financial results for the third quarter ended September 30, 2021. If you have not received this news release, or if you'd 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, 10xgenomics.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 Issues Today, and in the documents and reports filed by 10X Genomics from time to time Securities and Exchange Commission. FinEx 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 Saksimov, 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. Thanks, Eric.

Good afternoon, and thank you for joining us. On today's call, I will start with an overview of our performance during the third quarter. Next, I will discuss the opportunities ahead and the investments we're making in our R&D pipeline, global operations infrastructure, and commercial scale. Then, I will hand the call over to Justin for a more detailed look at our financials, business trends, and our outlook for the remainder of 2021. Revenue for the third quarter totaled $125 million, up 74% year-over-year and 8% sequentially. Our team navigated the complexities in the current operating environment to deliver strong performance and drive continued adoption of our products. We have strong demand across our Chromium instrument portfolio, driven by an enthusiastic reception to Chromium X, which will begin shipping in August. We also saw continued demand for the Chromium Controller this quarter. Following last quarter's strategic price update, this platform now provides an entry point for a broader set of researchers new to single-cell. Moving to consumables, we saw increased demand across our single-cell portfolio this quarter. Whether based on measuring epigenetic programming, gene expression, proteins, or the adaptive immune system, single-cell research is proving to be essential to truly understanding biology. Single-cell methods are now the standard for a growing fraction of life science research and are becoming an essential element of many new grant applications. There is a notable trend of research moving beyond exploratory studies to translational or disease-oriented studies featuring our products. This further validates our expectation of the promise and potential of our solutions to advance human health. For instance, in a pair of recent publications in Science, researchers used our single-cell products to identify and characterize the immune cells within the brain. It has been previously understood that the brain was immune-privileged. However, researchers discovered monocytes and B cells originating from skull and vertebral bone marrow and that exist separately from their peripheral counterparts. These studies show that the brain has access to a distinct and specialized population of immune cells, which has profound implications for how we approach a variety of CNS-related conditions. Many single-cell applications will become even more powerful with Chromimax, which enables routine mullion-cell experiments. Since launch, many customers have started ordering high-throughput consumables, while others are transitioning their standard throughput experiments to Chromimax in the interim ahead of larger future studies. We're seeing interest in several areas, including functional genomic studies using CRISPR screens, in-depth cell atlasing, and large-scale immune receptor profiling application. While it's still early, interest is high, and we look forward to the first publications featuring Chromium X in the future. Turning now to spatial, adoption of Bizium consumables remains strong this quarter, and the publication cadence continues apace. There are now more than 150 preprints and publications featuring the Bizium technology. Just as we saw in the early days of Chromium, These papers are validating the fundamental importance of Visium technology for uncovering true biology and are key to developing a spatial market. In a recent preprint, researchers conducted a multi-cohort study featuring a recently launched Visium for FSPE to investigate potential genetic markers expressed in the respiratory tract, which may help predict COVID-19 outcomes. This group identified a specific gene, IFI27, which, when elevated, is associated with the presence of a high viral load and outperforms other known predictors of COVID-19 severity and respiratory failure. Findings like these show the importance of Visium in disease-related research and will be important in developing new diagnostic tools in the future. With the launch of Visium FFPE, we enabled, for the first time, true unbiased gene expression analysis in FFPE samples. With Lyseum, we're bringing the world of high-content genomics and tissue-based analysis together. The addition of FFP capabilities now unlocks much more of the translational opportunities. And even as FFP has attracted many new translational researchers to 10x, we continue to see a strong interest in Lyseum fresh frozen within the discovery research community. It's clear that Visium is now the established leader in spatial discovery research, yet this platform remains very early in its lifecycle. To continue to support adoption and spatial analysis, we have hired a new team of dedicated tissue support specialists, and they're using customer feedback to optimize experimental protocols, enhance current products, and develop new products. And as part of our focus on advancing the field of spatial biology and ensuring our customer success, We convened our first annual spatial symposium last month. This event showcased how leading researchers, including members of the 10X Genomics Clinical Translational Research Network, are harnessing the power of spatial transcriptomics to reveal new biological discoveries.