Ladies and gentlemen, thank you for standing by, welcome to the 10x Genomics First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone keypad. Thank you. I'll now turn the conference over to Carrie Mendivil with Investor Relations. You may begin.
Thank you. Earlier today, 10x Genomics released financial results for the first quarter ended March 31st, 2020. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send an email to investors@10xgenomics.com. An archived webcast of this call will be available on the Investor tab of the company's website, 10xgenomics.com, for at least 45 days following this call. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements.
Additional information regarding these risks and uncertainties and factors that could cause results to differ appears in the press release 10x Genomics issued today, and in the documents and reports filed by 10x Genomics from time to time with the Securities and Exchange Commission. 10x Genomics disclaims any intention or obligation to update or revise financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I'd like to turn the call over to Serge Saxonov, the company's Co-Founder and Chief Executive Officer. Serge.
Thanks, Carrie. Good afternoon, and thank you for joining our call to review our first quarter 2020 results. I hope you and your families are healthy and managing the COVID-19 pandemic as well as possible. Before we get into the details of the quarter, I want to start by thanking our employees for their amazing dedication, flexibility, and drive over the past several months. This has been a very intense period, but it has truly brought out the best in each of our team members. I also want to take a moment to acknowledge the work being done by our customers and the collective research community around the world who are working relentlessly to understand COVID-19 and develop cures for the virus.
While we have not seen a pandemic like this in our lifetime, we have also never seen the global scientific community focused with so much intensity on a single goal. As soon as the pandemic started spreading around the world, we moved quickly to place instruments and provide reagents to our customers working on COVID-19 research. Many of these customers required special accommodations to put instruments in Biosafety Level 3 labs. Our products are being used in multiple ways to accelerate the fight against the pandemic. Fundamentally, they enable researchers to see biology at very high resolution and scale, and because of that, they allow our customers to make discoveries to understand the virus and the underlying biology of the disease, and to help develop therapies and vaccines. There have already been dozens of preprints from scientists and clinicians around the world using 10x for COVID-19 research.
Large-scale single-cell analysis have allowed our customers to establish which cells and tissues get infected by the virus, when and where. A number of our customers have been using the Immune Profiling Solution to search for neutralizing antibodies in recovered patients, which could potentially be used for prophylaxis and treatment. There is now extensive ongoing research to understand the biology of the infection in lung tissues and other organs using our full suite of products. Many of our customers are intensely focused on understanding the immune system's response to the infection or vaccine. Here, our Immune Profiling Solution has been particularly powerful because it provides a detailed and comprehensive view of what is happening with different immune cells, clones, and genes during different stages of the infection.
Our customers have been teasing out the precise cells and receptors that neutralize the virus, as well as those that are activated by the infection to produce dangerous inflammatory overreactions. The pace of discovery, both published and unpublished, has been breathtaking. This research is helping the biomedical community understand the effects the virus has on different patients, what kinds of treatments would be effective when, and how an effective vaccine could be developed. Technology and scientific discovery is ultimately how this crisis will be solved. At 10x, we will keep doing everything we can to help scientists achieve this goal. Turning now to our business, I'll start today's call by reviewing our commercial execution during the first quarter, including detail on the impact from COVID-19.
I will discuss how we're thinking about a recovery, both for 10x and the broader industry, and what the new normal will look like post-COVID-19. Finally, I will walk through our key priorities in the near term as we navigate our business through the pandemic. I will turn the call over to Justin for a more detailed look at our financials and the impact from COVID-19. I will return for some concluding remarks, then Brad will join us for a Q&A. Our revenues for the first quarter grew 34% to $71.9 million as compared to the prior year period. The year started off with strong demand for both Chromium and Visium products. We were especially pleased to see a notable increase in biopharma sales relative to the prior year.
In late February, we hosted a workshop at the AGBT conference, where we introduced a number of new capabilities for both our Chromium and Visium platforms. The roadmap we outlined has been strongly resonating with our customers, and we're excited to launch these new capabilities over the coming months and years. On the Chromium side, we made several announcements, including a product for the combined measurement of epigenetics and gene expression, new solutions for targeted assays, and the introduction of the 10x Cloud to help democratize single-cell analysis. We look forward to releasing these solutions throughout the year. Relative to Chromium, our Visium platform is still in its infancy. We saw great enthusiasm for the platform at AGBT, especially as we previewed its upcoming capabilities, which has included IHC compatibility, protein measurements through our Feature Barcoding technology, and enablement of FFPE sample types.
While we just launched the first Visium product a few months ago, we have already seen extensive adoption around the world. On our last earnings call in mid-February, we told you that Visium was being used by more than 200 labs. That number has more than doubled now to well over 400. Across these labs, we have been encouraged by the excitement from our customers after their initial experiments as they started seeing amazing new data spanning many different use cases. While our business was strong for the majority of the quarter, we did see a substantial impact from COVID-19, particularly during the month of March. The first signs started in January, when we began to see a slowdown across China as the country was virtually shut down in response to the pandemic.
In early March, as confirmed COVID-19 cases began to spread globally, we saw a significant reduction in activity across our customer base as institutions responded to the emerging pandemic. By the end of the quarter, we estimate that approximately 75% of our customers had suspended operations in compliance with stay-at-home orders. The only notable exception was labs with activities to COVID-19 related research. These labs have been making use of all of our products, but not surprisingly, the Immune Profiling Solution has seen particularly strong demand. These lab closures have impacted and will continue to impact our business until they're able to reopen and regain full capacity. As of today, most labs remain closed, but we have seen some reemergence of customer activity in recent weeks. Even once labs are open, it will take some time for them to get back up to full capacity.
While the precise shape of the recovery is hard to predict, there's very little doubt about the need to understand the master biology in a post-COVID world. This pandemic is showing in a particularly striking way the limitations of our current knowledge of biology and the frightening consequences of those limitations. As we look to the future, we have very strong confidence in our business. Going forward, we expect new and sustained investments in biomedicine across industries and governments. These investments will drive even greater needs for new technologies. The products we have built and plan to build at 10x will be crucial for accelerating our understanding of biology and advancing human health. Over the past several years, our customers have published over 850 papers using our products to make fundamental discoveries across many areas of human health and disease, including now with increasing urgency, infectious disease.
It is truly amazing how many scientific breakthroughs have been powered by our products in the 60 months they have been available to researchers, and we have so much more to do. The number of researchers using our products is still very small relative to the eventual impact we expect. This is just the beginning. Our product platforms are in the early stages of development relative to their potential. We feel that the product development opportunities in front of us are, if anything, more robust than they have ever been. Our innovation engine is a core pillar of our competitive advantage. It is now supported by over 740 patents and applications, including foundational patents in single-cell analysis, epigenomics, spatial analysis, and multi-omics. Our priority is to continue to invest aggressively in R&D to develop new products and platforms to accelerate future discovery and advances in human health.
In addition to the increased focus on biomedicine and life sciences, we expect that the post-COVID world will be different in other ways. Virtualization precipitated by social distancing is likely to be a permanent shift that will stay with us even after the pandemic subsides. Travel, in-person visits, and in-person conferences will likely be much more rare in the future. People are adapting to new work patterns now and discovering that digital ways of interacting can be more efficient and more effective. Many of them are likely not going back to old ways of doing things. We have been fortunate that in the past several years, we have invested substantially in digital capabilities to support our customers and help our field teams. These have proven especially valuable under current conditions as they allowed us to maximize our interactions with customers and promote customer success in the absence of in-person visits.
Webinars and other forms of digital outreach are also providing a platform where we can effectively launch new products into the marketplace. We expect that these digital investments and capabilities will now serve as a foundation that will be particularly valuable in the future. A more general effect of the pandemic is that it's causing a lot of changes throughout the world. This suggests that moving fast and being adaptable matters more now than it ever has, and it will matter more in the future. At 10x, we have always prided ourselves on moving fast, being nimble, and reasoning from first principles. We expect that these qualities will be at a premium in the future and intend to keep investing in our culture and processes to promote them. Now turning to our near-term priorities as we navigate our business through the pandemic. We have organized them around three principles.
First, to protect the health and safety of our employees. Second, to ensure the continuity of all critical operations to serve our customers, and importantly, to support their research efforts on COVID-19. Third, to prioritize investments to keep focused on development. As COVID-19 cases began to rise in the U.S., we took action and implemented early measures to ensure the protection and well-being of our employees. 10x was designated as an essential business to continue necessary operations during the pandemic. Initially, the vast majority of our employees transitioned to work from home. We retained a core group of employees on-site to keep critical operations going while operating under stringent social distancing and other protective measures. Several weeks ago, with additional protocols and protections to ensure our team's safety, we started bringing more of our R&D functions back into the lab in a deliberate and careful manner.
We believe that one of the most effective ways to ensure a safe work environment is to test everyone for SARS-CoV-2 on a frequently recurring basis. With that in mind, we have set up a novel program to provide recurring SARS-CoV-2 testing on-site for all employees that need to be at our headquarters in Pleasanton. We're also communicating regularly with our suppliers to ensure that our supply chain remains intact. We have not yet experienced any material supply issues and have taken steps to ensure we have adequate inventory on hand to meet customer demand across a range of recovery scenarios. Our customer service teams around the world are operating remotely and remain available to assist our customers and partners. As I mentioned earlier, our commercial teams quickly switched to digital approaches for customer interactions.
We have made use of our extensive online content to educate, train, and help our customers from afar. Sales teams have organized virtual meetings. We've been running webinar series to educate potential customers and have been seeing consistently record attendance. In fact, the effectiveness of virtual conferences appears to be substantially higher than for in-person meetings. While the near-term macro environment is likely to remain uncertain, we have strong conviction about the long run and the tremendous wealth of opportunities ahead of us. Supported by a strong balance sheet, we are continuing to scale our business thoughtfully and deliberately. Most importantly, we are continuing to invest in R&D and our operational infrastructure. As we have always done at 10x, we're focusing investments around key projects, being very diligent with prioritization. This diligence is especially important in the current environment to ensure that we are executing effectively toward our long-term goals.
At 10x, we set out to build technologies to measure every aspect of biology and make these technologies available to everyone, whether for academic research, for development of new medicines, or for treating patients. Our vision is that in the end, given any biological sample, you should be able to measure every analyte of relevance with the right resolution with all the necessary complex. That's how we will achieve understanding. That's how we will arrive at cures. With that, I will now turn the call over to Justin for more details on our financials.
Thank you, Serge. Total revenue for the three months ended March 31st, 2020, was $71.9 million, compared to $53.6 million for the prior year period, representing a 34% increase. Consumables revenue was $61.4 million, which increased 34% over the prior year period. Instrument revenue was $9.1 million, which increased 33% over the prior year period. Service revenue was $1.3 million, which increased 52% over the prior year period. COVID-19 impacted our business in different ways. Consumable revenue was unfavorably impacted due to many customer labs being closed. Instrument revenue was favorably impacted as we saw increased demand for our instruments. Service revenue was not materially impacted. North America revenue for the first quarter was $39.7 million, representing 39% growth over the prior year period. EMEA revenue for the first quarter was $13.2 million, representing 7% growth over the prior year period.
APAC revenue for the first quarter was $19 million, representing 48% growth over the prior year period. By the third week in January, we saw impact in China as customer labs began to close due to COVID-19. As the quarter progressed and the virus spread outside of China, we began to see an impact on customers in North America and EMEA. In the last two weeks of the quarter, labs in China began to reopen, and we saw a reasonable recovery, with ending revenue close to our expectations. Thus, the net impact to our Q1 revenue was driven by customer lab closures in North America and EMEA. Gross profit for the first quarter of 2020 was $56.8 million, compared to a gross profit of $39.6 million for the prior year period. Gross margin for the first quarter was 79%, compared to 74% for the first quarter of 2019.
The gross margin increase was driven primarily by lower accrued royalties related to ongoing litigation. Total operating expenses for the first quarter of 2020 were $76.7 million, an increase of 80% from $42.6 million for the first quarter of 2019. This was primarily attributable to increased expenditures relating to ongoing litigation, personnel costs as we have continued to grow our headcount across the organization, and stock-based compensation expenses. R&D expenses for the first quarter of 2020 were $26 million, compared to $15 million for the first quarter of 2019. This was driven primarily by $7.1 million of increased personnel-related expenses and $2.5 million increase in laboratory supplies and expensed equipment.
SG&A expenses for the first quarter were $50.4 million, compared to $26.9 million for the first quarter of 2019, with the increase driven primarily by $11.7 million in increased expenditures relating to ongoing litigation, which included a $5 million success fee payment. Additionally, the increase was driven by $8.9 million of increased personnel-related expenses. Operating loss for the first quarter was $19.9 million, compared to a loss of $3 million for the first quarter of 2019. This includes $6.7 million in stock-based compensation for the first quarter of 2020, compared to $1.4 million for the first quarter of 2019. Net loss for the period was $21.1 million, compared to a net loss of $3.6 million for the first quarter of 2019.
We ended Q1 2020 with $372 million in cash and cash equivalents, which includes the impact of the February repayment in full of our term loan borrowings and associated fees with Silicon Valley Bank, totaling $31 million. We are well capitalized and believe that our existing cash position, along with cash generated from sales of our products, will be sufficient to meet our anticipated needs for the foreseeable future. Given the ongoing uncertainty of the scope, duration, and impact of the pandemic, we withdrew our 2020 revenue outlook in mid-April and remain unable to reasonably estimate our financial performance for the year. Looking ahead to the next few months, we expect a meaningful portion of our revenue to be impacted while labs remain closed.
We are actively reviewing and managing all costs to navigate the current environment, but remain committed to investing in our business in order to drive growth over the long term. We have developed plans for a range of recovery scenarios and are well prepared to steer through this period and continue on the trajectory of realizing the tremendous opportunity in front of us. At this point, I'll turn it back to Serge.
Thanks, Justin. Before closing, I want to extend my sincerest thanks to everyone at 10x for all of your efforts and for all the amazing work you have done. I'm incredibly proud to be part of this team. Across every part of the company, we have faced all the recent challenges with resolve, creativity, and passion. Our mission to master biology and advance human health is more important now than it has ever been. I'm confident that the future holds an even greater appreciation and appetite for scientific discovery. With that, we will now open it up for questions.
At this time, I would like to remind everyone, in order to ask a question, press star and the number one on your telephone keypad. We'll pause for just a moment to compile the queue and roster. Your first question comes from Tycho Peterson with JP Morgan.
Okay, thanks. Serge, since you flagged some of the COVID-19 related research that's ongoing, can you just talk a little bit about how you're thinking about revenue tailwinds there? I know you mentioned the growth, increased demand for instruments. Can you talk a little bit about how you're thinking about that opportunity and how much will be split between discovery and translational work?
In terms of the tailwinds for COVID, clearly there was some in Q1 and there's definitely some growing in Q2. I would caution, though, given the scale of our business, it's too early to say that it's going to be a significant part relative to the rest of our business. The impact has been much more in terms of lab closures and the headwinds so far.
From a funding perspective, any views on what the catch-up in the back half of the year might look like and thoughts on whether we might get something more meaningful out of the NIH?
I'll let Brad answer that.
Yeah. Hi, Tycho, this is Brad. We've already seen some incremental funding that's been released by the NIH, and some of that has already made its way into labs and studies are underway. There's a tremendous amount of work contemplated around the world. Certainly, places like Sanger have applied for grants to do sort of very large studies. We're also seeing local consortia regionally around North America that are coming together, sometimes even almost rival labs, but to work together and a lot of this is related to access to samples and unfortunately, the truth of the pandemic is there's samples everywhere.
Two other quick ones and then I'll hop off. Chromium Connect, just can you give us an update? I think when we talked back in the last quarter, you'd said maybe 50 systems in the first year would be great. Obviously, the dynamics have changed, but just curious how you're thinking about pharma traction for Chromium Connect.
Tycho, I'll take this as well. It's actually been very strong. I mean, obviously we did begin shipping and installing in March, and it was obviously kind of rough because a lot of institutions are limiting access, even before they closed, limiting access from people on the outside. Overall, we continue to see really good demand. We've built a pretty good book of demand that's consistent with what we expected, and I would feel that here in the next few weeks when some of the labs start opening up, we'll be able to commence onboarding customers.
Last one. I'm just wondering, Serge, as we kind of think about the current environment and more focus on surveillance going forward, has any of this changed your view on the clinical opportunity and steps you may need to take to open that up over time?
I don't think there's a material change in how we view our clinical opportunity. Certainly, what we've signaled in the previous earnings call and the kind of the conversation we had throughout the quarter is we have seen more interest from translational researchers and from medical centers and also from biopharma customers. That is all pointing toward that clinical translational vector. We still feel the same, if anything, stronger than before. I think with COVID kind of appearing, I think there's going to be more focus on infectious disease type of research and infectious disease types of applications. I'm not sure if that necessarily breaks more toward the sort of clinical applications relative to baseline research, it's all kind of pointing to greater fundamental investment that we see in biology and genomics, in particular.
Okay. Thank you.
Your next question comes from Derik de Bruin with Bank of America.
Hi, good afternoon.
Hey, Derik.
Hey. If I missed it, my apologies, what was your exit rate of revenue decline exiting the second quarter? Is that a good proxy for how to sort of think about Q2?
You know, Derik, I think if we were to look at the revenue rate decline overall there was a decline, but it really was broken out regionally with different impacts for each region. We saw an acceleration in China as the labs in China opened back up again, and we saw a slowdown in AMER and EMEA as those labs began to close. We gave the metric that overall, we estimate that about 75% of our customer labs are currently closed, and so that's probably as best a proxy as any, as far as how to think about the weighting while they all are closed.
Great. Yeah, that's actually where I was going to go next, if that was the next proxy on that one. Talking about the acceleration in China, was that instrument pull-throughs or was that just labs coming back and resuming normal purchases, consumable demands? Just something about that characteristic of, you basically ended up, you said flattish on your China quarter.
Hi, Derik, this is Brad. Actually, there were a lot of orders around COVID-related research. Right at the end of the quarter, we had a lot of labs that, through the early part of March, were sort of contemplating some of these bigger studies, and we saw those orders come in and in some cases, we were able to fulfill them, but most of that was billed into the second quarter.
Got it. Going back, obviously, your gross margins are going to take a hit because of lower volume in the second quarter. Any sort of commentary on the gross margin impact for Q2?
Yeah, this is Justin. I'll take that one. I think the biggest impact to gross margin over the rest of this year is going to be the continued transition into the Next GEM products. There are going to be some headwinds, just due to perhaps a lower volume on the same fixed base cost, but we expect that the benefit from the Next GEM transition will continue to offset that.
Great. Thank you.
Your next question comes from Doug Schenkel with Cowen.
Hey, guys. Good afternoon. Maybe just to follow up on that last one on gross margin. I'm going to do a couple cleanups then ask a Visium question. Starting on gross margin, the Q1 gross margin was actually pretty impressive given adverse mix and probably some drop in utilization rates at the end of the quarter. I'm curious where you think gross margin would've been if it hadn't been for the pandemic, presumably, it looks like you could have got into the 80s. Is that right? If so, is that kind of the new normal factoring in Next GEM, and moving past some royalties once we get to the other side of the pandemic?
Hey, Doug, this is Justin. I think that's hard to say for Q1. Due to the volume that we manufactured overall and shipped overall, I wouldn't say that there was that creative an impact to Q1 margins due to the pandemic. If you look at the new products that we've introduced, the Chromium Connect and Visium products, and also the manufacturing that we're standing up in Singapore, those are all going to be headwinds to the current gross margin. In fact, we're expecting some period costs to start hitting this quarter as we ramp up Singapore. Then as Visium and Connect become a larger part of the overall revenue, that will also become a bigger factor. I think it's difficult to forecast how all that's going to settle out and what the new norm would be.
I don't expect it to be a drastic change from where we've been moving this quarter and last quarter.
Okay. I guess another one, maybe just taking a different approach. In your prepared remarks, you noted that 75% of customers shut down at the bottom. Some of these folks are coming back, but others aren't necessarily behaving as normal, given all that's going on. COVID is a little bit of a tailwind, but it's only a small tailwind, and China's getting back to normal, but I think it's only about 12% of sales. I hear you that you're not guiding, and we understand why, but is there any reason to not assume that total revenue for Q2 is 50%-75% below trends, just applying what you said was going on at the end of Q1, and apply that both to consumables and instruments, given that if labs are closed, they can't use the juice, and given your commentary on instruments being pulled forward into Q1.
Is there anything I said that isn't logical there?
I would say that the single biggest variable that we're seeing is, again, lab closures. That's essentially the one variable that determines certainly the consumable pull-through. It affects instruments maybe to a slightly smaller effect, but those as well. I'll let Brad add.
Yeah. Doug, the other thing is the amount of lab openings. We've contemplated that quite a bit. Now, obviously, when labs open, there is some period of time, as we're experiencing with our own R&D, where people are using maybe shifts, different cohorts at different times. That's going to take a while. There's a lot of other services that support the labs, and they all have to be brought up, animal techs, facilities, shipping and receiving. The whole thing for us is how the recovery looks and how quickly it goes, and we're going to assume it's going to be some sort of a lag period for labs to get anywhere close to the original capacity. We do believe, though, in our discussions with our customers, that we're right at the top of the list of what they want to start working with.
Okay. That's super helpful. Last one on Visium. You noted that over 400 labs have now adopted the platform or really put themselves in a place to use the consumables with no upfront cost. This is double where you were at the last update only a few months ago. Any interesting observation on who's adopting and for what applications? Is it mostly existing versus new customers? From a competitive standpoint, are you starting to run into situations where you are running into head-to-heads and winning those at this point?
The pattern, Doug, yeah, it's a good question. The pattern is fairly similar to what we have seen before, where we communicated a few months ago, in that most of the customers are still our existing customers, but there is a fraction, say 15%-20%, that's new, and that has been fairly consistent. The range of applications is pretty wide. As before, there's a particular focus on oncology, immuno-oncology, and neuroscience. Those are sort of the big pulls, but it spans the gamut to some very exotic things, including, in fact, COVID-19 as well. It's pretty much across the board. I think, again, like we said before, there is a greater interest from the translational and clinical side of the world in Visium relative to what we have seen previously with Single Cell and Chromium.
In fact, we established, and I'll let Brad comment on it, we established, since last call, a clinical translational network, which has been to help the translational and clinical customers get on board, and that has been going quite well. To turn to your competition question, I don't think the landscape has changed much really. As much I think there's certainly more awareness, I would say, with both platforms out there in the marketplace. As far as we know, we haven't lost any sale head-to-head, and there are certainly customers that have both platforms out there.
Great. All right. Thank you for all that. Oh, sorry, Brad.
No, I just maybe add a little bit more to that. As far as the competitive landscape, we've announced a number of enhancements to the Visium line. There's another platform on the market that's announcing a lot of enhancements there. We're getting to the point where we're going to meet more often. Right now, we have not lost a sale, don't expect to lose a sale, but we're very keenly aware right now that both platforms have kind of merged. There's also been new platforms like ReadCoor. We look at that as very complementary. Not sure exactly when that will be commercialized, but again, there's a tremendous amount of interest in spatial. Just to touch on this clinical translational network, that was massively oversubscribed.
We had to actually, in fact, we had a limited number of spots that we could take, but it really is consistent with pulling spatial into the clinic. It was actually quite surprising.
That's fantastic. All right. Thanks, guys.
Your next question comes from Patrick Donnelly with Citi.
Great. Thanks, guys. Maybe one for Brad. I know you talked about some potential lag on labs purchasing when they come back. What have your conversations been around the health of budgets overall? Do you feel that instrument purchases mostly are just being pushed out and are going to be realized in the relative near term once these labs reopen, kind of find their footing? Do you think there's this level of uncertainty, this cloud of uncertainty that is going to linger for a longer period, even once people are back in the lab?
In general, people are positive. The NIH budget for 2021 is sort of pre-announced, and it's strong. I think people have budgets. They're saving money, and saving research dollars doesn't make a lot of sense if you're a customer. I think there's a strong demand. To get back in, I think everybody, it's different. Institutions sort of have different approaches to how they're going to bring this up and running or get the labs up and running. As far as instruments, I think they will not be impacted that much, I think to the extent they're delayed. I think those would come back online first. There's a certain amount of business that's just unrecoverable because there's a certain amount of time that we weren't in there, and I don't expect a huge bolus of experiments to be done right away.
I think it's going to be a gradual build to get back to capacity.
Okay. Maybe one for Justin on the expenses side. You guys are obviously planning on ramping those quite a bit higher this year before the pandemic. How has it changed your OpEx plans for the year? Have you paused any hiring you were planning on doing? Just wondering on the balance between controlling costs in the current environment and then being well-positioned to capture growth when things normalize. Obviously, a big opportunity for you guys. How do you balance those two?
Yeah, it's a good question, Patrick. The focus for us has been finding the right balance on navigating through this temporary situation while still ensuring that we're building the business for growth for the longer term. We have gone back, and we've looked at all of the costs for what we have planned out for the rest of this year, most primarily due to additional headcount in R&D and the commercial side. We've just tried to be smart about prioritizing those hires as best we can as to not impact the product timelines or put any of our revenue plans at risk. I think when we started this year, we had a pretty ambitious hiring plan overall, and it's still quite ambitious.
We have pushed out a small number of headcount into future quarters where we can defer a decision that doesn't have an immediate impact today.
Okay. Maybe I'll ask one more, framing it a different way. I know it's been asked a couple of times. In terms of even the customer closures, I know you guys have talked about the 75% number. Any way to frame that, how that's trended, whether it's end of March through April into almost mid-May here? Has that number changed materially? I'm just trying to figure out. Some companies are giving kind of a week-to-week look. Anything you can help us with over the past month and a half as this has developed would be helpful. Thank you.
All right. This is Brad. Beyond China, which we've already discussed, in the first week of March, we saw it starting primarily in the Northwest, Seattle, Fred Hutch, Washington, the Allen Brain, all announced some level of lab closures. In a span of the next seven days, that basically swept across the country. In some cases, they were measured. They were given six days, seven days to shut down. In some cases, it was literally less than three days. In the Bay Area around where we are, it was essentially immediately. It was a 24-hour, the labs were shut down immediately. Those closures continued up through sort of the, I'd say, first week in April. Then there was this lull period, and I'll tell you, it was scary.
By the second week in April, going into the third week, we started seeing a lot more activity. We saw people getting used to the fact that this was the new normal. As we've gotten into sort of the second week in May now, we're actually now seeing labs that have opened primarily in the Midwest, Texas, Southeast, and much, much more activity as people are now contemplating openings towards the end of May and into early June.
That's really helpful. Thanks, Brad.
Your next question comes from Dave Westenberg with Guggenheim Securities.
Hi. Thank you for taking the question. We do have to try to model this the best we can. I do want to continue with that point on the 75% that was just asked as well. Is there any kind of events that maybe we could track? Is schools reopening in the fall something that we maybe can look at as indicators that labs are opening? Just trying to get a sense of the timing going forward, and I get you've already been asked this five times, but just events that might trigger reopenings.
Yeah. Dave, if we have the crystal ball about when the things were going to reopen around the world, I think we could be in different lines of work. In terms of your question as far as schools reopening and so much, one thing I would kind of distinguish is that if schools reopen completely, then I think that it follows that labs will be open widely and completely. I will say that even if schools don't reopen, the research work can continue to keep going. The postdocs and the grad students are sort of independent. They operate independent of the other population of the university, the students, the undergrads. The research environment tends to be pretty competitive.
Our view is that as some scientists start getting back to work, others will feel increased pressure to figure out how to start getting their experiments going as well. It's hard to put a pin into it, like precisely when different labs are going to be opening up, but the level of uncertainty is on the order of one or two quarters as we look out there.
Thank you.
Yeah, maybe this is Brad. [crosstalk]
Yeah, go.
I'm sorry. Just to add a little bit to that, the competitive nature of science is sometimes overlooked, and we even have our customers calling, asking, "Who else is opening up? When are they going to open up?" Not that we share that information, but yeah, we're right on that precipice right now where labs are beginning to open, and I think it's going to drive a lot of the momentum of other labs to open. Again, some parts of the world are certainly less impacted than others. We'll see. I think over the next three or four weeks, it'll be more clear.
That's very helpful, actually. I just want to continue with one of Tycho's questions about use in infectious disease. I know that early-generation droplet-based PCR technologies, for example, can be used in low viral load situations. As we're thinking about infectious disease, is this maybe can be used on an R&D front to find out why certain technologies could not handle viral loads? I'm just kind of getting a sense of how it could be used, maybe more in an infectious disease environment.
There's a huge range of applications for sure. I would downplay maybe the testing element of it, but every other element of trying to understand what is happening with the biology, why some patients get mild symptoms while others have severe acute symptoms, what is the actual biology of the infection, how the vaccines create an immunogenic response in patients, all of that really should be done and requires our product. I don't think there's any other way to get the same clarity of view of what's happening in any given patient. I think from that perspective, and that's just the full suite. Certainly, our Immune Profiling Solution is incredibly powerful, and we're seeing that in many different research projects. The gene expression, the epigenomics, and also now the spatial products can play a part as well.
Again, I'll drive just kind of comprehensive understanding of what's going on with the biology of the disease and what's going on with the biology of any individual patients as well.
Great. Thank you. I'll just ask one last one. Can you remind us again on the expiration of the use? I'm just kind of thinking about if labs are open for extended period of time, they would probably be empty in terms of consumables, assuming that your six months maybe is the expiration date on your consumables, and just how do we think about that?
Yeah, I think you're right on spot there is that three to six months. Very few of our customers actually essentially stock the product, so these are out in the labs. We've already contemplated this and are already working to anticipate customers' need, where there could be potential reagents that are out of date and how we'll deal with that. We've thought about that quite a bit in actually trying to map out and certainly be there when the startup happens, if we've got to get product to them.
Thank you very much.
Okay, there are no further questions. I'll now turn the conference over to the company CEO for closing remarks.
Stay safe, and thank you for joining us, everyone.
Goodbye. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.