Another kind of factor over the course of this year that has led to this dynamic is that, we have built out a separate function, overlay function in our commercial team for driving Xenium sales specialists. And to some extent, it takes more effort to get – to launch a product and get it on that trajectory going forward in terms of creating the right infrastructure and creating the right trajectory of demand. And that’s what we went through this last year. Now going forward, we feel like we are over that initial hurdle, and we have the flexibility to balance our attention and our focus and put more resources now more attention behind Chromium. While at the same time, driving the rapid progress of Xenium. And so, we feel good about the kind of the balance of attention going forward.
But of course, we’re going to need to watch it. And internally, we have a lot of metrics to help us stay very closely on top of these dynamics. And as far as Xenium traction is concerned, like I mentioned, we sold more than 80 and in the meantime, our backlog grew. So, we feel very good about where – how the quarter progressed.
Operator: Thank you for your question. The next question is from the line of Tejas Savant. Your line is live.
Tejas Savant: Hey, guys. Good evening and thanks for the time here. Serge, one for you on the Xenium pipeline. You mentioned the multimodal cell segmentation, the 5K-plex and then the high-plex protein assay on the same tissue section. So, in terms of how you see these three capabilities impacting your Xenium order book next year? Any color you can share there? And then just as a point of clarification, is that last one essentially true co-detection?
Serge Saxonov: True co-detection, sorry, Tejas, I didn’t get the last one. Let me answer the question. The product launch questions general. Well, so I mean, first of all, just with the existing capabilities, there is obviously, tons of demand and a lot of enthusiasm for the product as it is. And we are certainly – we feel really, really good about the capabilities and what the customers are getting from the product. At the same time, as historically, we’ve always been very, very keen to listen to our customers and we stay on top of the initial feedback and react to that feedback very quickly to deliver new capabilities and to prioritize the features that customers find most valuable. And that’s what we’re doing again here.
That’s why segmentation is coming very soon. That’s why we’re coming out with a large plex panel. And we are excited about co-detection of proteins on the same tissue. I think that’s going to be a powerful capability. I do want to point out that, if you – one can detect protein already using immunofluorescence on the same tissue and our customers definitely see huge value in that already.
Tejas Savant: Got it. That’s helpful, actually. And that’s exactly where it’s going with the co-detection bid. And then, Justin, one for you on that sort of $29 million of quarter-over-quarter step-up in the fourth quarter. You talked about Americas and EMEA strength there or rather the sequential uptick similar to last year. Is that sort of essentially year-end budget flush dynamic that you’re assuming here? Or is it sort of the Xenium product cycle that underpins your confidence there or a bit of both?
Justin McAnear: Yeah. Great question, Tejas. So at the midpoint of our guidance range, here’s the basic assumptions, is that, on the Xenium side that we would ship, sell roughly the same amount of Xenium in Q4 than we did in Q3. And then as far as products, excluding Xenium instruments that we would have the same kind of seasonality that we’ve seen previously. And so that would include a year-end budget flush. When you’re looking at the range of our guidance from the low end to the high end, at the lower end would be not the same kind of budget flush that we’ve seen before or not being able to ramp – not being able to maintain the Xenium ramp in Q4 as we saw in Q3 for any number of issues. And then, at the higher end would be over-delivering on Xenium in Q4 and perhaps seeing a stronger year-end budget flush than we’ve seen historically or perhaps not seeing the decline in APAC, primarily driven by China that we’ve got built into the midpoint.
Tejas Savant: Got it. Super helpful. Thanks for the time, guys.
Operator: Thank you for your question. Our next question is from the line of John Sourbeer with UBS. Your line is live.
John Sourbeer: Hi. Thanks for taking the questions. First one here on Chromium. Any color on where you see pricing on Consumables for next year? I think you had record increases this year. Do you think you can get similar levels in 2024?
Serge Saxonov: So our plan for this year, the plan around Chromium pricing is pretty moderate price changes. And much of that is driven by the premise that there’s tons and tons of potential demand in Chromium and we tend to gain a lot more ultimate growth by increasing number of samples, and increasing number of customers. And so that’s where we’re going to be focused to a large extent.
John Sourbeer: Thanks. And then a follow-up here on Xenium. I guess, in the US and APAC, where you don’t have an injunction. Just any color on competitive win rates there? And where do you think you’re winning on what customer type or features versus competitors out there?
Serge Saxonov: Yeah. So, just to be clear, the Xenium traction has been really strong across the world. And in fact, it has been particularly strong in the Americas, really, really strong momentum there. And as far as where we’re winning, I would say it’s across the board. I mean, the big evolution over the last couple of quarters has been that the Xenium systems have been out there in the field and have been performing really well, generating awesome data and the work has been spreading more on our customers and it’s getting a lot of – I mean, issue to our field teams now to go and talk to the customers and make more sales. That has been the overwhelming story, and I don’t think it’s particular to any particular application or any particular geography or any particular customer type. It is real and across the board kind of phenomenon.
John Sourbeer: Thanks for taking the questions.
Operator: Thank you for your question. Our next question is from the line of Mason Carrico with Stephens. Your line is live.
Mason Carrico: Hey. Thanks. I’m jumping between a few calls tonight. So sorry if this has been asked. I’ll just ask one here. Could you talk about your outlook for Xenium pricing going forward? Do you plan on continuing to be accommodative and somewhat flexible with pricing given the opportunity to capture these customers and kind of lock them in? Or how should we be thinking about pricing going forward?
Justin McAnear: Yeah. Mason, I’ll take that one to start. I think back to when we launched Xenium. It was a very, very competitive and still is a very competitive environment, a lot of noise out there and not a lot of data. And so, we launched Xenium with introductory pricing, basically to encourage adoption and make sure that there was less friction getting the instrument in hands of those early users that could generate the data that could help drive future sales. And so, as time has progressed and we are starting to see more data come off the instrument, the results of the head-to-head study that we saw mentioned in the prepared remarks and other customers presenting data that they’ve run on their own instruments in their labs.
This is really showing the true value of the platform. And so, we are confident moving away from the introductory pricing at a lower price point. And we took the list price up in this past quarter. Now, the average selling price is still trending below the list price, and we’ll continue to do so because, as you mentioned, we’re very – we are open to working with customers around packaged deals with other instruments and also taking reductions off the list price of the instrument for customers that couple that with a larger Consumable order.
