10x Genomics reported its fourth-quarter results, showing an earnings per share loss of $0.40, which missed the consensus estimate of $0.30. Despite this, the company managed to post quarterly sales of $165.02 million, which was below last year’s figures by 10% yet still surpassed expectations, largely driven by a favorable impact from changes in product mix that boosted gross margins to 67% compared to 63% in the same period last year.
The company’s instruments segment faced a decline, with sales dropping from $38.4 million to $24.35 million year-over-year, reflecting lower sales in both Chromium and Spatial instruments. Similarly, consumables sales fell slightly from $140.31 million to $133.53 million, with Chromium consumables continuing to represent the larger share of this revenue compared to Spatial consumables.
Looking ahead, 10x Genomics has adjusted its fiscal year 2025 sales forecast to a range of $610 million to $630 million, which is below the consensus estimate. The management expects continued challenges, including a potential impact of around $7 million from uncertainties in NIH funding, and has underscored that these headwinds are set against a backdrop of a changing macro environment. Furthermore, while some analysts view the current strategic shifts as necessary for long-term growth despite short-term profit pressures, others have downgraded the company’s outlook, reflected in several price target reductions.
In addition, commentary from various financial analysts reflects a mixed sentiment about the company’s trajectory. Some note that improvements in 10x Genomics' sales strategy and market positioning could prove beneficial over time despite current profit challenges, while others remain cautious amid ongoing pricing and market difficulties. The commercial reorganization, a key step for the company’s future prospects, is expected to be completed by mid-2025, with pricing challenges from the recent GEM-X transition anticipated to ease by the fourth quarter.