Gene sequencing technology provider 10x Genomics Q3 sales miss expectations, but CEO sees opportunity ahead

10x Genomics Inc (NASDAQ:TXG) shares are trading lower after the company released preliminary financial results for the third quarter of 2024 on Wednesday, revealing a mixed performance.

The company’s revenue for the quarter totaled approximately $151.7 million, compared to the consensus estimate of $162.245 million, marking a slight decrease of 1% compared to the same period in 2023.

Also Read: What Happens to 10x Genomics Stock on Wednesday?

“The revenue in the third quarter was below our expectations,” said Serge Saxonov, co-founder and CEO of 10x Genomics. “The previously announced changes we made to our business processes and organization to increase efficiency represented a significant shift in the way we engage with customers. The transition was more disruptive than we anticipated, especially in America. At the same time, our customers continue to be cautious about their spending, particularly capital purchases, which significantly impacted instrument sales during the quarter.

Genomics instrument sales were down significantly, down 46% to $19.1 million. This included $7.6 million from Chromium tools and $11.4 million from space tools.

Consumables sales increased 10% to $126.2 million. Of this, Chromium consumables accounted for $96.5 million and Space consumables for $29.7 million.

In addition, service revenue saw robust growth of 48%, contributing $6.4 million.

Income trends varied geographically. The company posted an 11 percent decline in America, bringing revenue to $87.8 million.

However, strong growth was reported in both the EMEA and APAC regions, with increases of 18% and 15% respectively. EMEA revenue totaled $37.9 million, while APAC generated $26.0 million.

The company also reported cash and cash equivalents of approximately $398 million as of September 30, 2024.

The company plans to provide full-year guidance during its earnings call on October 29, 2024.

During its second-quarter 2024 earnings release, the gene sequencing company cut its fiscal 2024 sales guidance to $640 million to $660 million, from a previous range of $670 million dollars to $690 million, compared to the consensus of $648.21 million.

Price action: Shares of TXG were down 26.20% at $15.35 during the pre-market session last check on Thursday.

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