10x Genomics, Inc.: Form 10-Q for the period ended Mar 31, 2026

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our audited consolidated financial statements and notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 12, 2026 (our "Annual Report"). As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis, in addition to historical financial information, contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” in this Quarterly Report and in Part I, Item 1A of our Annual Report.

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.

Overview

We are a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biology. Our integrated research solutions include instruments, consumables and software for analyzing biological systems at resolution and scale that matches the complexity of biology. Our commercial product portfolio is made up of our Single Cell and Spatial solutions. Our products include our instruments, which include our Chromium instruments, our Visium CytAssist and our Xenium Analyzer, and our consumables, which include proprietary microfluidic chips, slides, reagents and other consumables for our Single Cell and Spatial solutions. We bundle our software with these products to guide customers through the workflow, from sample preparation through analysis and visualization. Customers purchase instruments and consumables from us for use in their experiments. We also derive revenue from post-warranty service contracts for our instruments.

Comparison of the Three Months Ended March 31, 2026 and 2025

Revenue

The following table represents total revenue by source for the periods indicated (dollars in thousands). Spatial includes our Visium and Xenium products:

Product and Services Revenue

Products and services revenue increased $12.1 million, or 9%, to $149.9 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Consumables revenue increased $14.4 million, or 13%, to

$129.8 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Instruments revenue decreased $3.6 million, or 24%, to $11.3 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Services revenue increased $1.2 million, or 15%, to $8.8 million for the three months ended March 31, 2026 as compared to three months ended March 31, 2025, primarily driven by an increase in service plans for instruments coming off warranty.

License and Royalty Revenue

License and royalty revenue decreased $16.1 million, or 94%, in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease was primarily due to one-time royalty revenue of $16.8 million recognized in the three months ended March 31, 2025 in connection with our worldwide patent litigation settlement with Vizgen, Inc. (“Vizgen”).

Excluding $44.1 million of non-recurring license and royalty revenue related to patent litigation settlements in 2025, we expect our revenues to moderately increase in 2026 as compared to 2025.

Cost of Products and Services Revenue, Gross Profit and Gross Margin

(dollars in thousands)

Cost of products and services revenue decreased $4.8 million, or 10%, to $44.7 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease was primarily driven by lower inventory write-downs of $9.2 million and lower warranty costs of $2.5 million, partially offset by higher manufacturing costs of $6.1 million due to a change in product mix and higher royalty costs of $0.9 million. Gross margin increased to 70% primarily due to lower warranty costs and lower inventory write-downs, partially offset by a decrease in license and royalty revenue due to the non-recurring benefit in license and royalty revenue recorded in the three months ended March 31, 2025.

We expect our gross margin to fluctuate throughout the remainder of 2026 due to a number of factors including changes in product mix.

Operating Expenses

(dollars in thousands)

Research and development expenses decreased $7.4 million, or 12%, to $56.8 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily driven by a $5.4 million decrease in personnel expenses, including a $3.4 million decrease in stock-based compensation expense, a $1.0 million decrease in laboratory materials and supplies and a $0.6 million decrease in facilities and information technology costs.

Selling, general and administrative expenses decreased $23.4 million, or 26%, to $66.4 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily driven by a $12.2 million decrease in outside legal expenses, a $4.3 million decrease in personnel expenses primarily due to a decrease in stock-based compensation expenses, a $1.9 million decrease in travel and entertainment expenses, a $1.8 million decrease in professional services expenses, a $1.7 million decrease in facilities and information technology costs and a $1.6 million decrease in marketing expenses.

Gain on settlement decreased due to a non-recurring gain on settlement of $9.2 million recorded in the three months ended March 31, 2025, as part of our patent litigation settlement with Vizgen in 2025.

Excluding $49.9 million in gains on settlements recorded in 2025, we expect our operating expenses to modestly decrease in 2026 compared to the prior year as a result of our ongoing efforts to manage our spend.

Total Other Income

(dollars in thousands)

Interest income increased by $1.3 million, or 36%, to $5.0 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily due to higher money market fund balances and interest income applicable to a quarterly legal settlement payment as described below, during the three months ended March 31, 2026.

Other income (expense), net decreased by $3.0 million to $0.8 million other expense, net for the three months ended March 31, 2026 as compared to $2.1 million other income, net, for the three months ended March 31, 2025. The decrease in other income (expense), net was primarily driven by a $2.2 million increase in net losses from foreign currency remeasurements.

We expect other income (expense), net, to fluctuate, potentially significantly, from quarter to quarter due to potential changes in the fair value of contingent consideration.

Provision for Income Taxes

Our provision for income taxes was $0.6 million and $0.9 million for the three months ended March 31, 2026 and 2025, respectively. The decrease was primarily due to lower foreign income.

Liquidity and Capital Resources

As of March 31, 2026, we had approximately $539.8 million in cash and cash equivalents and marketable securities, which increased by $16.4 million as compared to December 31, 2025, and were primarily held in U.S. banks. We have generated losses from operations since inception as reflected in our accumulated deficit of $1.5 billion.

We currently anticipate making aggregate capital expenditures of between approximately $10 million and $15 million during the next 12 months, which we expect to include, among other expenditures, equipment to be used for manufacturing and research and development.

Our future capital requirements will depend on many factors including our revenue growth rate, research and development efforts, investments in or acquisitions of complementary or enhancing technologies or businesses, the timing and extent of additional capital expenditures to invest in existing and new facilities, the expansion of sales and marketing and international activities, legal costs associated with defending and enforcing intellectual property rights and the introduction of new products and new versions of existing products.

We take a long-term view in growing and scaling our business and we regularly review acquisition and investment opportunities, and we may in the future enter into arrangements to acquire or invest in businesses, services and technologies, including intellectual property rights, and any such acquisitions or investments could significantly increase our capital needs. We regularly review opportunities that meet our long-term growth objectives.

In 2025, we entered into a settlement agreement and license agreements with Bruker under which we will receive four quarterly installment payments totaling $68.0 million beginning in the third quarter of 2025 with applicable interest. As of March 31, 2026, we had received three quarterly payments, and the remaining balance was included in “Other receivables” in the condensed consolidated balance sheets as of March 31, 2026. We will also receive royalties on Bruker’s sales of products and services covered by the license.

In 2025, we completed the asset acquisition of Scale Biosciences, Inc. (“Scale Bio”) and recorded contingent consideration related to the potential achievement of certain milestones. In the first quarter of 2026, we made a milestone payment consisting of $10.0 million in cash and $8.7 million in shares (396,584 shares) of our Class A common stock in connection with a technology transfer completed in the third quarter of 2025. In the future, we may pay up to $30.0 million of contingent consideration if certain milestones are met.

In 2023, we signed an agreement to acquire certain intangible and other assets from Centrillion Technologies, Inc. and Centrillion Technology Holdings Corp. Under the agreement, we are obligated to pay for certain technology development milestones if they are met. As of March 31, 2026, we have paid $41.3 million relating to the completion of development milestones. Up to $15.0 million of cash consideration is due if an additional technology development milestone is met.

We expect to continue to incur operating losses for the foreseeable future. We believe that our existing cash and cash equivalents and cash generated from sales of our products will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. The adequacy of our cash resources depends on many assumptions, including primarily our assumptions with respect to product sales and expenses, as well as the other factors set forth in "Risk Factors" under the heading "Risks related to our business and industry” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

We intend to continue to evaluate market conditions and may in the future pursue additional sources of funding, such as mortgage or other financing, to further enhance our financial position and to execute our business strategy. In addition, should prevailing economic, financial, business or other factors adversely affect our ability to meet our operating cash requirements, we could be required to obtain funding though traditional or alternative sources of financing. We cannot be certain that additional funds would be available to us on favorable terms when required, or at all.

Cash Flow Analysis

The following table summarizes our cash flows for the periods indicated:

(in thousands)

Operating activities

The net cash provided by operating activities of $26.1 million for the three months ended March 31, 2026 consisted of a net loss of $13.5 million, non-cash adjustments of $34.3 million and a net cash inflow from changes in operating assets and liabilities of $5.3 million. The non-cash adjustments of $34.3 million primarily consisted of stock-based compensation expense of $22.6 million, depreciation and amortization of $10.0 million and non-cash lease expense of $2.0 million. The net cash inflow from operating assets and liabilities was primarily driven by cash inflows associated with a decrease in other receivables of $18.1 million primarily related to the Bruker settlement, a decrease in accounts receivable of $8.0 million due to timing of collections, an increase in accounts payable of $4.8 million, a decrease in inventory of $2.7 million, and a decrease in prepaid and other current assets of $1.9 million. The net cash inflow from operating assets and liabilities was partially offset by cash outflows associated with a decrease in accrued compensation and other related benefits of $21.0 million, a decrease in accrued expenses and other current liabilities of $6.1 million and a decrease in the operating lease liability of $2.9 million.

The net cash provided by operating activities of $34.4 million for the three months ended March 31, 2025 primarily consisted of a net loss of $34.4 million, non-cash adjustments of $40.4 million and net cash inflow from changes in operating assets and liabilities of $28.3 million. The non-cash adjustment of $40.4 million primarily consisted of stock-based compensation expense of $31.1 million, depreciation and amortization of $8.0 million and non-cash lease expense of $1.8 million. The net cash inflow from operating assets and liabilities was primarily driven by cash inflows associated with a decrease in accounts receivable of $35.3 million and a decrease in inventory of $8.1 million. The net cash inflow from operating assets and liabilities was partially offset by cash outflows associated with a decrease in accrued compensation and other related benefits of $11.7 million related to prior year annual bonus payments, an increase in prepaid expenses and other current assets of $5.5 million, a decrease in operating lease liability of $2.6 million and a decrease in accounts payable of $2.5 million.

Investing activities

The net cash used in investing activities of $1.3 million in the three months ended March 31, 2026 was due to the purchase of marketable securities of $24.7 million and net cash paid for purchases of property and equipment of $1.6 million, partially offset by maturities of marketable securities of $25.0 million.

The net cash used in investing activities of $1.9 million in the three months ended March 31, 2025 was due to purchases of property and equipment.

Financing activities

The net cash used in financing activities of $8.4 million in the three months ended March 31, 2026 was due to the payment of contingent consideration of $8.7 million related to the Scale Bio acquisition, partially offset by proceeds related to the issuance of common stock from the exercise of stock options.

The net cash provided by financing activities of $0.4 million in the three months ended March 31, 2025 was primarily from proceeds related to the issuance of common stock from the exercise of stock options.

Critical Accounting Estimates

Critical accounting estimates are those estimates made in accordance with United States generally accepted accounting principles (“GAAP”) that involve a significant level of judgments and estimates that can affect the results of operations and financial position of the Company. For further discussion of our critical accounting estimates, see our critical accounting policies and estimates disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our most recent Annual Report on Form 10-K filed with the SEC on February 12, 2026. There have been no significant changes in estimates in the quarter ended March 31, 2026 that would require disclosure nor have there been any changes to our policies.

For financial market risks related to changes in interest rates and foreign currency exchange rates, reference is made to Item 7A “Quantitative and Qualitative Disclosures about Market Risk” contained in Part II of our Annual Report. Our exposure to market risk has not changed materially since December 31, 2025.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2026.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to our risk factors that we believe are material to our business, results of operations and financial condition from the risk factors previously disclosed in our Annual Report, and any documents incorporated by reference therein, which are accessible on the SEC’s website at www.sec.gov (http://www.sec.gov).