txg-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q

_____________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-39035

10x Genomics, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware			45-5614458
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

6230 Stoneridge Mall Road
Pleasanton, California			94588
(Address of principle executive offices)			(Zip Code)

(925) 401-7300

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

_____________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol

Name of each exchange
on which registered

Class A common stock, par value $0.00001 per share

TXG

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2023, the registrant had 104,151,768 shares of Class A common stock, $0.00001 par value per share, outstanding and 14,056,833 shares of Class B common stock, $0.00001 par value per share, outstanding.

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		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION	28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	Signatures	30

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10x Genomics, Inc.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements included in this Quarterly Report, other than statements of historical facts, may be forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “see,” “estimate,” “predict,” “potential,” “would,” “likely,” “seek” or “continue” or the negatives of these terms or variations of them or similar terminology, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include statements regarding 10x Genomics, Inc.’s expectations regarding our plans, objectives, goals, beliefs, business strategies, results of operations, financial position, sufficiency of our capital resources, business outlook, future events, business conditions, key factors affecting our performance, gross margin trends including the potential impacts of acquisitions, changes in product mix, average selling prices of our products and opportunities for cost reductions, expected future investments including anticipated capital expenditures, anticipated size of market opportunities and our ability to capture them, expected uses, performance and benefits of our products and services, business trends and the impact of macroeconomic conditions, including inflation and rising interest rates. These statements are based on management’s current expectations, forecasts, beliefs, assumptions and information currently available to management, and actual outcomes and results could differ materially from these statements due to a number of factors.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” in this Quarterly Report and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 (“Annual Report”). Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. For a more detailed discussion of the risks, uncertainties and other factors that could cause actual results to differ, please refer to the “Risk Factors” in our Annual Report and this Quarterly Report, as such risk factors may be updated from time to time in our periodic filings with the U.S. Securities and Exchange Commission (“SEC”). Our periodic filings are accessible on the SEC’s website at www.sec.gov.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot provide any assurance that these expectations will prove to be correct nor can we guarantee that the future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or occur and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. Further, our forward-looking statements may not accurately or fully reflect the potential impact of adverse geopolitical and macroeconomic events, international economic, political, legal compliance, social and business factors such as inflation and supply chain interruptions may have on our business, financial condition, results of operations and cash flows.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

Unless otherwise stated or the context otherwise indicates, references to “we,” “us,” “our,” “the Company,” “10x” and similar references refer to 10x Genomics, Inc. and its subsidiaries.

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Channels for Disclosure of Information

Investors and others should note that we may announce material information to the public through filings with the SEC, our website (https://www.10xGenomics.com), press releases, public conference calls, public webcasts and our social media accounts, (https://X.com/10xGenomics, https://www.facebook.com/10xGenomics and

https://www.linkedin.com/company/10xgenomics). We use these channels to communicate with our customers and the public about the Company, our products, our services and other matters. We encourage our investors, the media and others to review the information disclosed through such channels as such information could be deemed to be material information. The information on such channels, including on our website and our social media accounts, is not incorporated by reference in this Quarterly Report and shall not be deemed to be incorporated by reference into any other filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing. Please note that this list of disclosure channels may be updated from time to time.

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10x Genomics, Inc.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

10x Genomics, Inc.

Condensed Consolidated Balance Sheets

(In thousands)


	September 30, 2023		December 31, 2022
	(Unaudited)		(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	311,264	$	219,746
Marketable securities	45,643		210,238
Restricted cash	500		2,633
Accounts receivable, net	103,847		104,211
Inventory	80,917		81,629
Prepaid expenses and other current assets	20,177		16,578
Total current assets	562,348		635,035
Property and equipment, net	285,008		289,328
Restricted cash	2,974		4,974
Operating lease right-of-use assets	69,192		69,882
Goodwill	4,511		4,511
Intangible assets, net	21,833		22,858
Other noncurrent assets	2,674		2,392
Total assets	$	948,540	$	1,028,980
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	18,836	$	21,599
Accrued compensation and related benefits	28,477		32,675
Accrued expenses and other current liabilities	36,256		59,779

Deferred revenue	11,143		7,867
Operating lease liabilities	10,005		9,037

Total current liabilities	104,717		130,957




Operating lease liabilities, noncurrent	88,468		86,139
Other noncurrent liabilities	10,139		6,141
Total liabilities	203,324		223,237
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock	—		—
Common stock	2		2
Additional paid-in capital	1,981,359		1,839,397
Accumulated deficit	(1,235,468)		(1,029,321)
Accumulated other comprehensive loss	(677)		(4,335)
Total stockholders’ equity	745,216		805,743
Total liabilities and stockholders’ equity	$	948,540	$	1,028,980

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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10x Genomics, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue	$	153,644	$	131,072	$	434,748	$	360,177
Cost of revenue	58,115		30,377		141,217		83,559
Gross profit	95,529		100,695		293,531		276,618
Operating expenses:
Research and development	66,507		67,290		205,065		202,053
In-process research and development	41,402		—		41,402		—
Selling, general and administrative	82,415		73,401		257,205		219,413

Total operating expenses	190,324		140,691		503,672		421,466
Loss from operations	(94,795)		(39,996)		(210,141)		(144,848)
Other income (expense):
Interest income	4,300		2,025		12,269		3,832
Interest expense	(1)		(114)		(25)		(351)
Other expense, net	(1,248)		(1,950)		(4,268)		(4,193)

Total other income (expense)	3,051		(39)		7,976		(712)
Loss before provision for income taxes	(91,744)		(40,035)		(202,165)		(145,560)
Provision for income taxes	1,242		1,879		3,982		3,225
Net loss	$	(92,986)	$	(41,914)	$	(206,147)	$	(148,785)

Net loss per share, basic and diluted	$	(0.79)	$	(0.37)	$	(1.77)	$	(1.31)
Weighted-average shares of common stock used in computing net loss per share, basic and diluted	117,728,293		114,112,382		116,693,008		113,555,750

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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10x Genomics, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(In thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net loss	$	(92,986)	$	(41,914)	$	(206,147)	$	(148,785)
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on available-for-sale marketable securities	425		(1,459)		1,921		(5,188)
Realized loss on available-for-sale marketable securities reclassified into net loss	—		—		1,715		—
Foreign currency translation adjustment	(133)		(68)		22		(326)
Other comprehensive income (loss), net of tax	292		(1,527)		3,658		(5,514)
Comprehensive loss	$	(92,694)	$	(43,441)	$	(202,489)	$	(154,299)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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10x Genomics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2022	115,195,009	$	2	$	1,839,397	$	(1,029,321)	$	(4,335)	$	805,743
Issuance of Class A common stock related to equity awards	978,333	—		2,400		—		—		2,400

Stock-based compensation	—	—		42,133		—		—		42,133
Net loss	—	—		—		(50,747)		—		(50,747)
Other comprehensive income	—	—		—		—		2,856		2,856
Balance as of March 31, 2023	116,173,342	2		1,883,930		(1,080,068)		(1,479)		802,385
Issuance of Class A common stock related to equity awards	1,150,093	—		7,096		—		—		7,096

Stock-based compensation	—	—		45,724		—		—		45,724
Net loss	—	—		—		(62,414)		—		(62,414)
Other comprehensive income	—	—		—		—		510		510
Balance as of June 30, 2023	117,323,435	2		1,936,750		(1,142,482)		(969)		793,301
Issuance of Class A common stock related to equity awards	874,282	—		4,374		—		—		4,374

Stock-based compensation	—	—		40,235		—		—		40,235
Net loss	—	—		—		(92,986)		—		(92,986)
Other comprehensive income	—	—		—		—		292		292
Balance as of September 30, 2023	118,197,717	$	2	$	1,981,359	$	(1,235,468)	$	(677)	$	745,216

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10x Genomics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2021	112,514,977	$	2	$	1,680,865	$	(863,321)	$	22	$	817,568
Issuance of Class A common stock related to equity awards	761,373	—		7,826		—		—		7,826
Vesting of shares subject to repurchase, including early exercised options	—	—		32		—		—		32
Stock-based compensation	—	—		26,137		—		—		26,137
Net loss	—	—		—		(42,413)		—		(42,413)
Other comprehensive loss	—	—		—		—		(2,465)		(2,465)
Balance as of March 31, 2022	113,276,350	2		1,714,860		(905,734)		(2,443)		806,685
Issuance of Class A common stock related to equity awards	610,447	—		6,360		—		—		6,360
Vesting of shares subject to repurchase, including early exercised options	—	—		32		—		—		32
Stock-based compensation	—	—		36,419		—		—		36,419
Net loss	—	—		—		(64,458)		—		(64,458)
Other comprehensive loss	—	—		—		—		(1,522)		(1,522)
Balance as of June 30, 2022	113,886,797	2		1,757,671		(970,192)		(3,965)		783,516
Issuance of Class A common stock related to equity awards	541,705	—		2,039		—		—		2,039
Vesting of shares subject to repurchase, including early exercised options	—	—		32		—		—		32
Stock-based compensation	—	—		33,646		—		—		33,646
Net loss	—	—		—		(41,914)		—		(41,914)
Other comprehensive loss	—	—		—		—		(1,527)		(1,527)
Balance as of September 30, 2022	114,428,502	$	2	$	1,793,388	$	(1,012,106)	$	(5,492)	$	775,792

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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10x Genomics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2023		2022
Operating activities:
Net loss	$	(206,147)	$	(148,785)
Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation expense	128,032		95,874
Depreciation and amortization	25,795		18,847
Amortization of right-of-use assets	6,118		5,687
Lease impairment charges	2,785		—
Realized loss on marketable securities	1,715		—
Other	470		1,120
Changes in operating assets and liabilities:
Accounts receivable	361		1,673
Inventory	257		(19,761)
Prepaid expenses and other current assets	(3,646)		(2,457)
Other noncurrent assets	(290)		411
Accounts payable	(2,811)		6,082
Accrued compensation and other related benefits	(4,169)		(3,163)
Deferred revenue	6,637		1,845

Accrued expenses and other current liabilities	9,153		2,867
Operating lease liability	(5,864)		(4,566)
Other noncurrent liabilities	649		(3,003)
Net cash used in operating activities	(40,955)		(47,329)
Investing activities:

Purchases of property and equipment	(45,151)		(91,927)
Purchases of intangible assets	(923)		—
Purchases of marketable securities	—		(282,871)
Acquisition of business, net of cash acquired	—		(1,500)
Proceeds from sales of marketable securities	96,137		41,401
Proceeds from maturities of marketable securities	70,331		17,182
Net cash provided by (used in) investing activities	120,394		(317,715)
Financing activities:
Payments on financing arrangement	(5,814)		(5,409)




Issuance of common stock from exercise of stock options and employee stock purchase plan purchases	13,870		16,225
Net cash provided by financing activities	8,056		10,816
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(110)		(295)
Net increase (decrease) in cash, cash equivalents, and restricted cash	87,385		(354,523)
Cash, cash equivalents, and restricted cash at beginning of period	227,353		596,073
Cash, cash equivalents, and restricted cash at end of period	$	314,738	$

SEC Form 10-Q filed by 10x Genomics Inc.