10x Genomics, Inc. (NASDAQ:TXG) Q4 2022 Earnings Call Transcript

Justin Bowers: Hi. Good afternoon. During the prepared remarks, you talked about the next phase of growth, and I was hoping that you could help characterize that for us a little more. And then, thinking about the next two or three years, is the growth rate we’re seeing in the guidance for this year kind of reflective of the outlook for the next two or three years?

Serge Saxonov: So, in terms of kind of how we look at the next several years and the next phase of growth here, a lot of it is you’re going to — back to your previous question from Matt, the complexity of product lineup has increased tremendously. And the products — different platforms are somewhat different stages of market penetration. Given — Xenium is just getting launched. So, I think there’s some and tons of excitement in the marketplace right now for the platform as it currently stands, and tons and tons of potential as we have more capabilities to the platform. So, I think it’s going to be a huge driver of market demand, especially as we look over the next several years. We’re making big investments in there. The Visium franchise has been around for a few years, and it took us some amount of time to build out the full stack of capabilities.

And especially with the launch of CytAssist last year, it’s really set up for an acceleration in growth. And so, we’re feeling particularly excited, and we see a lot of resonance with customers there. And we are going to be investing to lean into that acceleration. And then, on the Chromium side, we’ve grown a lot over the last several years. And I think we’re at the point where there is a lot of potential to grow into new kinds of applications and to new kinds of areas. We’ve emphasized translational research, especially with the capabilities now. I think there’s a lot — huge potential there. There’s lots of opportunities in biopharma. And there’s a general sense that single-cell and the current platform is really is in a good place now to go much more mainstream — throughout mainstream biology.

And that’s our goal. All of these sort of vectors require more scale and more intentional and a lot of times, specialized approach as to how we go to market in all those areas. And we’re investing and scaling the company while scaling our approaches, leveraging what we have built so far to drive an excellent phase of growth.

Justin Bowers: Understood. And just a quick follow-up. In terms of the headcount additions, it sounded like those were concentrated in R&D and product development. Can you give us a sense of the mix there? And then, just on China, is there — are some of your partners over there starting to see tenders from the stimulus package that was introduced last year or past last year?

Justin McAnear: As far as headcount goes, when we’re looking at increases in 2023, it’s mostly to support new products. And we’re looking at minimal increases 2023 over 2022. We are hiring some Xenium specialists throughout the year to help augment the efforts and support the sales reps. And then, we’re also taking over support and installations of all products internally, whereas we used to do that through a third-party. And so, the increases are coming mainly from those two areas. And then, as far as China, we haven’t heard anything yet.

Operator: Our last question comes from the line of John Sourbeer with UBS. Please go ahead.

John Sourbeer: Thanks for taking my question. If I could ask two here. I guess, first, with Europe. Any color there on just how you see the Europe market playing out for the year and any of the dynamics around macro pressures there?