Good afternoon, and welcome to 10x Genomics 1st Quarter 2026 Earnings Conference Call. All participants are in a listen-only mode. After the speaker's remarks, we will conduct a question and answer session. To ask a question at this time, you'll need to press star followed by the number 1 on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Cassie Corneau, Senior Director, Investor Relations and Strategic Finance. Thank you. Please go ahead.
Thank you and good afternoon, everyone. Earlier today, 10x Genomics released financial results for the first quarter ended March 31st, 2026. If you have not received this news release or would 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. You should not place undue reliance on forward-looking statements.
Additional information regarding these risks, 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 any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. Joining the call today are Serge Saxonov, our CEO and Co-Founder, and Adam Taich, our Chief Financial Officer. We will host a question and answer session after our prepared remarks. We ask analysts to please keep to one question so that we may accommodate everyone in the queue. With that, I will now turn the call over to Serge.
Thanks, Cassie, good afternoon, everyone. What a really nice start to the year, with solid sales momentum, a step change advance in our product roadmap, and strong execution across the business. Revenue for the first quarter was $151 million, representing 9% growth over Q1 2025, when excluding the non-recurring settlement revenue in the prior year period. In single cell, we again saw double-digit growth in consumable reaction volumes driven by Flex Apex. As we have expected, as we have been seeing over the past several quarters, our new products with more accessible pricing have been unlocking new waves of single-cell demand. Similarly, in spatial, we again delivered double-digit growth in consumables revenue, which was driven by Xenium momentum. Spatial biology remains in the very early stages of adoption, the vast majority of the opportunity is still untapped.
The biggest highlight since our last call is, without a question, the launch of our new instrument platform, Atera. Atera represents the most significant product introduction in our history. Among many other benefits, it enables, for the first time, spatial whole transcriptome analysis with single-cell sensitivity at scale. We believe Atera is poised to redefine how biology is measured and understood. We went into the launch expecting a very strong response from researchers and the broader scientific community. What we have heard so far has been extraordinary. Before I talk about what Atera is and what it does, I want to spend a moment on why we built it. The central challenge of biology is that it's very complex. It is complex in just about every system, in just about every sample.
Biological systems comprise massive numbers of molecules themselves, interacting with each other in a bewildering diversity of ways. Addressing this complexity requires tools that can measure biology at large scale and high resolution. Historically, technologies available to researchers have lacked the necessary scale and resolution. Furthermore, the toolset of biology has been very fragmented. We have used one set of technologies for analyzing tissues, another for measuring cells, and yet another for working with molecules. That's not how biology works. It works by specific cells expressing specific molecules in specific locations within tissue. That has always been the promise of spatial biology. It represents the convergence of the different tools for analyzing biological systems. It entails measuring molecules, cells, and tissues together, preserving the full context at massive scale and incredibly high resolution.
However, until now, despite many advances, spatial biology has been fundamentally constrained by the limitations of existing technologies. Researchers have been forced into frustrating trade-offs between the critical attributes they care about: across throughput, specificity, sensitivity, scale, performance. To gain in one area, they had to compromise in others. We built Atera to address all of these trade-offs and to unlock the full potential of spatial biology. Atera is the product of a long-held conviction about where biology needed to go and years of deliberate work to get there. It is poised to become the large-scale discovery engine, whether for basic research, AI-driven science, or translational applications. We believe that now spatial will increasingly become the default approach for analyzing biological samples. It is important to appreciate that Atera brings together a set of capabilities that until recently were not even thought possible for a single platform.
It delivers very high levels of plex, including whole transcriptome at sensitivity comparable to Flex Apex, the gold standard for single-cell analysis. Enabled by refined probe chemistry, it delivers high specificity and data quality, non-negotiable for researchers and their collaborators to be able to cross the data. Atera delivers step change in throughput. With a single instrument capable of processing up to 800 whole transcriptome, 1 cm square samples per year or more than 3,000 if using the targeted Atera Select panels. This increase in throughput now enables large cohort studies at a pace and scale that were not previously feasible. Equally important is the user experience. Atera builds on a proven Xenium workflow, which is already highly robust, widely adopted, and well-regarded by our customers.
Atera runs on standard off-the-shelf glass slides, which makes the platform inherently scalable across labs and experiments and enables distributed sample collection. Using standard slides also allows customers to access archive samples from biobanks and other repositories. In addition, Atera uses a universal sample preparation approach that works across tissue types, supporting different sample types on the same slide to provide extra flexibility and scalability. We have also developed powerful computational and software tools so that customers can effectively work with the data. To handle spatial biology at this unprecedented scale, the most computationally intensive part of the workflow, image processing, is performed directly on the instrument, driven by high performance onboard GPUs and optimized algorithms. Data is processed efficiently at the source and translated into actionable biology in real time.
From there, customers have the flexibility to use their own on-premise infrastructure or leverage our 10x Cloud platform for analysis and collaboration, ensuring that Atera is not just generating more data, but also making that data easy to use. We built Atera to be a long duration upgradable platform. We intend to continue delivering new capabilities over the years ahead. The roadmap on the platform includes workflow automation designed to enable true sample and data out capability, protein multiomics, in situ sequencing for spatial mutation and variant detection, and continued development over our 10x Cloud platform for multi-sample analysis and collaboration. As I mentioned, the early customer response has been extraordinary. We had high expectations coming into this launch. The reception has exceeded even those expectations. One customer told us that this was the largest technology leap they'd seen in their career.
Another called Atera's capabilities, "The Holy Grail." Others, to convey their enthusiasm, have used the kind of language that would not be appropriate for me to repeat in this forum. This enthusiasm is translating directly into demand as we take pre-orders ahead of initial shipments expected in the second half of 2026. Even in a challenging capital equipment environment, customer conversations have immediately centered on how to incorporate Atera into their research programs, not whether to buy it. In many cases, the discussion starts from the assumption that this is a must-have platform and quickly moves to multi-year programs, large cohort studies, and the scale of insight generation that is now within reach. Atera fundamentally expands our addressable market across three high-growth segments. In discovery research, initiatives like the Human Cell Atlas can now map entire organs and tissues at unprecedented scale and speed.
In translational research, clinical cohorts can be comprehensively characterized to understand patient response patterns, something our collaborators are already validating, as shown by Carl June at AACR. Critically, large AI models represent an entirely new market where Atera's 1 billion cell per year capability enables creation of virtual models at a new level of scale and sophistication. Each segment unlocks distinct applications while reinforcing our position as the essential platform for spatial biology. We have been saying for some time, we believe AI represents a significant and structural tailwind for our business. The potential to transform our understanding of biology is enormous, but progress depends critically on generating vastly more of the right kinds of data. From the beginning, we have built our platforms precisely for that purpose.
Products like Flex Apex and now Atera exemplify this imperative and are seeing intense interest from customers building AI models of biology. The partnerships we have announced over the past year reflect and reinforce these trends, including the Chan Zuckerberg Initiative on the Building Cells Project, the Arc Institute around the Virtual Cell Challenge, and Xaira Therapeutics to build the largest perturbation data set ever reported. Just last month, we announced a partnership with Bioptimus, an AI-focused biotech company. Bioptimus is building STELA, a global initiative aiming to profile up to 100,000 patient tissue specimens across three continents. The goal is to build a data backbone for a world model of biology. The initiative is starting this effort on our Xenium platform and plans to expand to Atera over time.
Just last week, the Chan Zuckerberg Biohub announced its new $500 million Virtual Biology Initiative. The goal of the effort is to build AI models that can accurately simulate cells and tissues in silico. This initiative is an incredibly ambitious undertaking that would not have been conceivable even a few years ago. Now, because of progress in AI and in technologies for measuring biology, there is a path to that vision. There's increasing evidence that scaling laws apply in biology just like they do in other domains. What we now need is many orders of magnitude more data, specifically of molecules, cells, and tissues across vast numbers of contexts. This initiative is galvanizing the broader scientific ecosystem within an aligned view that this direction is the next grand challenge for advancing science and medicine, analogous to the Human Genome Project and its role in catalyzing the genomics era.
Taken together, these programs are exactly the type of large multiyear initiatives our single-cell and spatial platforms are built to enable. AI is poised to fundamentally reshape how science is done, and large-scale, high-quality biological data sits at the center of that transformation. As AI models improve, we expect an exponential increase in the demand for the kind of data our technologies produce. This reinforces our conviction in the importance of what we're building and the vast size of the opportunity ahead. Building on another theme that has become increasingly prominent in our business, we're seeing growing interest in translational applications across both academia and biopharma. Customers are increasingly focused on identifying human relevant drug targets and critically biomarkers of response for therapies that only work in subsets of patients. There's now a growing body of evidence supporting the value of single-cell and spatial approaches in uncovering these signals.
At the same time, our recent product advances have made these technologies far more practical to deploy in translational settings. In single-cell, Flex Apex has been a game changer for large-scale translational studies because of strong performance on FFPE samples, streamlined workflows, and a cost profile that enables large cohorts. In spatial, Xenium has proven to be a robust and powerful platform for extracting meaningful insights from clinical samples. Atera is now poised to extend that momentum by enabling much larger studies with significantly more information content per sample. While our technologies are relevant across the drug development continuum, a particularly large opportunity lies in later stage translational settings, where biomarker strategies are essential to understand patient response and potential toxicity. This is where our solutions can meaningfully improve the probability of success and where we are increasingly focused.
Over time, these trends also reinforce the potential for single-cell and spatial in diagnostics applications. To realize that potential, the critical next step is the generation of robust clinical evidence on large patient cohorts. As we have discussed previously, we're pursuing two parallel paths. One, we're continuing to support our customers in their studies, and we'll partner with them to enable clinical deployment in the future. Two, we're advancing our own internal efforts to generate clinical evidence for specific high-value applications. We're making progress in the two previously announced areas of tissue-based spatial profiling for oncology and blood-based single-cell monitoring in autoimmune disease. Stepping back, this quarter has been emblematic of the great work by the whole 10x team.
We launched a game-changing new platform, saw continued sales momentum, and engaged in powerful partnerships with our customers to drive the future of research and healthcare, all while maintaining laser focus on tight execution. This progress continues to reinforce our strategy and puts us in a great position for the opportunities ahead. With that, I will turn the call over to Adam.
Thanks, Serge. Before walking through the detailed financials, I want to reflect on the last 12 months. A year ago on our Q1 call, we were operating in a highly uncertain macro environment after drastic changes to government research funding that led us to withdraw our full year guidance. Since then, and despite persistent challenges in the macro environment, we have consistently executed, improved our operating profile, and have grown our cash balance by over $100 million. The business is in a meaningfully stronger position today. With that, I will now walk through our first quarter 2026 financial results in more detail. Unless otherwise noted, all growth rates referenced reflect year-over-year comparisons. We had a solid start to 2026. Revenue for the first quarter was $150.8 million.
Excluding the impact of non-recurring settlement revenue in the prior year period, revenue for the first quarter was up 9% year-over-year. This reflects continued momentum in the key drivers of our business, as well as some benefit from orders received late in the fourth quarter that shipped in early January. Total consumables revenue was up 13%, with growth in both single-cell and spatial. Single-cell consumables revenue was up 6%, supported by double-digit growth in reaction volumes, and Flex continued to be the most popular assay by volume in the quarter. Spatial consumables continued to perform well in the quarter, with revenue up 31%, driven by Xenium consumables. Total instrument revenue declined 24%, with Chromium instrument revenue down 12% and spatial instrument revenue down 32%. Looking at revenue by geography.
Excluding the impact of license and royalty revenue in the first quarter of 2025, Americas revenue was up 9%. EMEA and APAC grew 16% and 5% respectively. Turning to the rest of the P&L, gross margin was 70% for the first quarter of 2026 as compared to 68% for the prior year period. The increase was primarily driven by lower warranty costs and lower inventory write-downs, partially offset by a decrease in license and royalty revenue. Total operating expenses decreased 15% in the quarter, primarily driven by lower outside legal expenses and lower personnel costs. As a reminder, Q1 2025 included a one-time gain on settlement related to patent litigation. Excluding this impact in the prior year period, operating expenses decreased 20%.
We ended the quarter with $540 million in cash equivalents, and marketable securities, up $113 million year-over-year and up $16 million sequentially. Turning to our outlook for the rest of the year, we are maintaining our full year outlook and expect 2026 revenue to be in the range of $600 million-$625 million. Excluding upfront revenue related to patent litigation settlements in 2025, this represents 0%-4% growth over the full year 2025. At the midpoint, our outlook remains consistent with what we provided in February, including double-digit growth in both single-cell consumables reactions and spatial consumables revenue. We built our initial outlook with the Atera launch in mind, reflecting our expectation that some customers may delay additional purchases of our current spatial products in anticipation of Atera.
Looking at our quarterly cadence, as previously discussed, first quarter revenue represents a higher proportion of our expected full year revenue, driven in part by orders received late in the fourth quarter of 2025 that shipped in January. We expect second quarter revenue to step down sequentially from Q1, reflecting lower spatial sales as customers wait for Atera to start shipping. We anticipate the third quarter to be broadly similar to the second quarter. In the fourth quarter, we expect Atera shipments to begin contributing meaningfully to revenue, though initial production capacity for Atera will be limited in 2026 as we ramp production. Looking ahead, we remain focused on customer success, disciplined execution, and strengthening our financial position, which support continued investment in innovation across our portfolio. With that, I'll turn the call back to Serge.
Thanks, Adam. Before we open it up for questions, I want to pick up on Adam's earlier remarks and reflect on how much difference a year makes. While our internal conviction never wavered, the external circumstances a year ago put incredible pressure on the 10x team. We executed with relentless discipline, met every challenge, and significantly improved our operating profile, all while launching multiple critical products, including Flex Apex, to change the world of single cell, and now Atera, the biggest product introduction in our history. To the 10x team, I could not be more proud or thankful for how you responded and what you have delivered. Thank you. Thank you for everything that you do. With that, we will now open it up for questions. Operator.
Thank you. As a reminder to ask a question, please press star followed by the number one on your telephone keypad. In the interest of time, we ask that you please limit yourselves to one question. Thank you. Our first question comes from Patrick Donnelly from Citi. Please go ahead. Your line is open.
Hey, guys. Thank you for taking the question. Maybe on Atera, you know, Serge, a lot of color there. Appreciate it. Can you just talk about the early conversations in terms of the funnel, what end customer you're seeing the highest reception or interest level from? Secondly, also on Atera, just how we should think about the launch timing, you know, what that impact is on the portfolio. It sounds like you guys are preparing for some customers to delay other spatial purchases in 2Q and 3Q. Would love just a little more color on how you're thinking about that. Thank you, guys.
Thanks, Patrick. Thanks for the question. Like I said earlier in my prepared remarks, really, really excited about Atera. We had really high expectations going into the launch, it's been incredibly gratifying to see the response from customers, which I would say even probably exceeded our really high expectations. As far as, you know, how that translates into demand of the pre-orders, well, that has been really, really encouraging, really strong. The interest is coming from everywhere. Like, I can't actually point to any particular area of the market or any particular area of our customers that are not expressing interest in this.
You know, our internal, like, our efforts is on customers who can quickly scale, you know, sort of demand for others, like service providers, and generally evangelize that platform for the future. That's how we're approaching the market. The, the signal again has been just so resounding. It's, it's been really, really fun to see. Now, as far as sort of the second part of your question, obviously Atera is a really compelling product. We've known that since for a long time. We've been anticipating and planning for this launch for a long time. We also very much anticipated there were going to be some changes to ordering dynamics from our customers. Overall, it's all going really very much in accordance with our expectations.
We have lots of experience with past product launches and new kind of versions of things and new capabilities. We've been prepared. You know, of course, there's going to be effect on customer order patterns. Naturally, you know, customers adjust their thinking about future projects and such in light of Atera, which puts some pressure on some of our spatial business like we talked about earlier. All of that is incorporated into our guide. Because, you know, at the same time, while, you know, people are starting to contemplate for the future with Atera, right now, our customers are running their experiments because they have established workflows, they have ongoing studies, they have grants, budgets. They're really used to the workflows. They really like the data.
Remember, these products, our spatial products, are leading in the industry. There is a lot of really great resonance with them among the customers. Also, you know, realistically, if people are just now deciding whether to go forward with Atera, they probably won't be getting their instruments until well into 2027, right? Most of them. The fact is that existing products, existing spatial products continue at a robust pace consistent with our expectations. Feel really good about that, and I think all of that information has been incorporated into our guide pretty well.
Our next question comes from Matt Larew from William Blair. Please go ahead. Your line is open.
Hey, good afternoon, everyone. Serge, you called out, you know, one of the new TAMs around AI. I think last quarter you mentioned that was a relatively low percentage of revenue, please reference today a number of new initiatives you're involved in, both on the single-cell and spatial side. As you've, you know, had those discussions and gotten some sense for how customers are gonna be building out their plans, what's your sense for, you know, what ultimately that TAM could look like and how it might grow over time? Thank you.
Yeah. I mean, that is a really good, a really important question. A couple things. Just going back to what I said back in my prepared remarks. We fundamentally believe we're seeing that AI is a structural tailwind to our business. If you think about what is happening now with the progress in AI, it's sort of this emergence of increasingly large models that are increasingly powerful in being able to make predictions and inferences. What they all universally need is large amounts of data across many different kinds of contexts, and specifically, the right kinds of data too, right? For biology, measuring the right biology, and I said earlier, the right biology is all around molecules, cells and tissues.
Being able to measure them at a large scale and at high quality is imperative, and that's precisely what we have built. In fact, that is like the central premise of the mission of the company. It's a really exciting moment right now for us, the emergence of these kinds of models and the emergence of the AI capabilities, because it just resonates so strongly with our mission and with our strategy from day one of the company. Now as to the question of, you know, how that translates into revenue and what is the TAM here, the fact is it's already, when you look at our customers and how AI is used and what it is driving, it's actually really pervasive at this point across our customer segments and across applications.
I don't think at this stage there isn't a large project where AI isn't a big driver of or if not the biggest driver of that project. When I look at even smaller scale experiments, in many instances, they are performed with an eye toward feeding the data into AI models and scaling up down the road as well. When we look at our business, fundamentally kind of this AI wave and progress is really lifting all of it all across. That's for really good fundamental first principles reasons. We do see it as a structural accelerant to across our product line and across our application set. In many ways, that's by design.
Our next question comes from Doug Schenkel from Wolfe Research. Please go ahead. Your line is open.
Hi, this is Madeline Mulmanon for Doug. Gross margin in the quarter I think came in a little better than we in the street were expecting. As we think about the full year, are you anticipating any impact to gross margin from increased inflationary pressures related to memory or petroleum-based plastics? Then thinking about Atera ramping up as the year goes on, should there be any dilution to margins from the Atera launch?
Hey, Madeline. Adam here. Thanks for the question. I mean, we're absolutely monitoring costs closely, you know, the couple that you mentioned, but other input costs that have inflationary pressure, teams managing that quite well. We're still anticipating margins for the year to be in the mid-60s%. To your question on Atera specifically, as that launch, you know, we mentioned that that would be, we'd start shipping units in the 2nd half. It'll be heavily weighted towards Q4. you know, as has been sort of typical in our portfolio, the instrument margins will come at, you know, margins that are less than that of our sort of standard portfolio.
I'd anticipate as that starts to move in, you know, particularly in Q4, we start to see a little bit of margin pressure, but still feel highly confident that we'll end up in that mid-sixties for the full year.
Our next question comes from Mason Carrico from Stephens. Please go ahead. Your line is open.
Hey, guys. I was just wondering if you could provide, I guess, a bit more detail on spatial instrument revenue this year. I mean, how material is, you know, the Q1 to Q2 sequential decline? How many Atera instruments do you ultimately expect to place in Q4? I guess as a follow-up, how many placements do you think production will be able to support in 2027 as you ramp production?
Sure. You know, I mean, we are as we mentioned or as I mentioned in the prepared remarks, we're anticipating a step down from Q1 to, you know, Q2 and Q3. We continue to, you know, we'll continue to sell Xenium, but it'll be at a lower rate than what we saw last year, and particularly over the next two quarters. You know, we certainly built that into the guidance, I think as Serge just mentioned earlier. That's certainly, you know, part of the plan that we have. As it relates to total number of Atera, we're ramping up production right now. Anticipate between Q3 and Q4, we'll sell approximately 40 units. Those will be mostly weighted towards Q4.
Again, that's all sort of factored into the guidance range that we've provided.
Our next question comes from Luke Sergott from Barclays. Please go ahead. Your line is open.
Great. Thanks for the question. I just want to talk about the pricing strategy and the positioning there with Atera versus the Xenium and the rest of the spatial portfolio. I understand this is like, you're calling it the biggest launch in the history of the company. I mean, you guys did a pretty good job on single-cell, now as you look towards spatial, you know, is this where you kind of look like, all right, we're just gonna launch Atera and then cannibalize or essentially put all the other platforms and applications and customers onto one box? Or are you trying to segment the market here? Because it seems like there's quite a bit of risk of cannibalization versus Xenium.
Yeah, Luke, thanks for the question. I mean, there's a lot of questions embedded in that one question. First of all, I will say that, yes, me saying that this is the biggest, most significant launch in our history has been intentional, and I am very keenly aware of our history and the success we have with single-cell and Chromium. For sure, I do think this is a fundamentally, like I said, a platform to change how we measure biology and will fundamentally redefine many aspects of science. I feel very, very excited about it and for like really fundamental first principles reasons.
As far as, kind of where this is headed, like I said, I mean, if we look at the kind of the short-term impact, we have planned for those really carefully and all of those dynamics are incorporated into the guide, quite carefully, we feel really confident about that. We feel really good about kind of as we look into next year and what Atera kind of opens up. The way that we see it is that Atera is poised to really kind of, really break open a lot of markets, a lot of opportunities, a lot of customer samples and a lot of new customers.
If you think about all the different constraints that have kept existing spatial users from running more or from that have kept other people on the sidelines from entering spatial, we have intentionally built Atera to remove all those constraints, to address all of them. If you think about from a perspective of technical enablers, the whole transcriptome capability addresses the constraints that were there because of customization, which limited applications, limited tissue types. Now people can go forth with no worries that it's going to work across all these different areas.
Throughput was another huge, huge constraint, has been in the past where people have got to pick a few samples at a time from, you know, if they have a clinical trial, a large cohort could only run a few. Now they can do kind of the full cohort, the full large study they have always wanted to do. Now also with the off-the-shelf-like capability, now you have access to all these archive samples, all these biobanks that just like multiply by a large amount the availability of samples that are available. This is all consistent with the feedback we are now hearing from customers.
It's just like fundamental, a huge expansion of the TAM and potential for these platforms. You know, and our thinking as far as the question on pricing has been consistent with that to enable these very large, kind of very large expansion of the opportunity that we're seeing ahead of us, whether it's basic discovery, translational research, or all of these AI-driven applications. Like I said earlier, you know, people really like our existing products, Xenium, Visium, really, really powerful products and capabilities. For the foreseeable future, we expect them to be really, really robustly used.
Kind of as we go forth, you know, kind of further out, there's going to be more and more applications that will migrate toward Atera, more customers and more samples as well. That's going to be an amazingly great thing for us.
Our next question comes from Dan Brennan from TD Cowen. Please go ahead. Your line is open.
Hey, good afternoon. This is Kyle on for Dan. Thank you for taking my question. I wanted to ask on your OpEx. You know, OpEx was down quite materially year-over-year and quarter-over-quarter. I know you mentioned it a few times or a little bit more detail on the call, prepared remarks.
Can you just talk about sort of where the jumping off point is for OpEx going forward? Just given, you know, as G&A and R&D were down, you know, quite a bit year-over-year.
Yeah, sure, Kyle. I mean, I think as you're aware, we've really been trying to manage our costs in a super disciplined way. You know, and as you noted, we are on a good trajectory here. You know, keep in mind last year had that, you know, the one-time gain on settlement. Excluding that, OpEx is down 20% year-on-year. We're still anticipating, you know, and giving ourselves some flexibility as it relates to continue to invest in the business and anticipate that the business, or that OpEx year-on-year will be roughly flat.
Our next question comes from Kyle Mikson from Canaccord. Please go ahead. Your line is open.
Hey, guys. Thanks for the questions. First, could you talk about the spatial instruments in the quarter? It seems a little bit weaker than what we had, and I thought I heard you had some, like a benefit in January or something like that. Just talk about how we should think about that line going forward, especially with potential market freezing and things like that. Secondly, Adam, on the guidance for 2Q. Are you talking about like a mid-single digit decline quarter-over-quarter or more like a low single digit? Thanks.
Yeah, sure. Let me take the second part of your question first. Yeah, thinking about a low single digit decline QoQ is really the way that we're thinking about Q2. Fairly similar is what we would anticipate for Q3 with the balance, you know, getting us there on the guide in Q4. Yeah, I think really the way to think about spatial instruments for Q1, you know, is really there was fairly significant anticipation regarding what we were going to announce in April. As you may recall, we did, you know, a campaign at AGBT. You know, certainly word started to spread.
As you can also imagine, you know, we were working with some of the early access customers, you know, under NDA just to make sure we were going sort of down the right track. They're customers that would've been adding, either a new Xenium or to their Xenium fleet, you know, that ultimately, you know, have decided in Q1 and will decide to wait for Atera. The second thing I would just note, you know, we don't see the macro backdrop being any, you know, meaningfully different for CapEx, you know, than where it's been. You know, I'd be remiss if I didn't say it's still fairly constrained.
The predominant, you know, rationale around sort of Q1 and where we came in on spatial instruments is really just around the anticipation of the product launch. I would just, you know, echo what Serge just said, you know, earlier in the call. The enthusiasm around Atera is extremely high. You know, what we're finding is even in a constrained capital environment, customers are finding CapEx. You know, we've got, you know, orders, and folks, this is the type of launch where folks go out and find money.
I'd also just add that the timing, you know, we were thoughtful and tried to work, you know, around the timing of our launch just to ensure that it's built in to budgets, whether that's, you know, for customers that, you know, have a year-end, you know, sort of come fall, customers that need to get this into grant submissions. Then certainly we wanna make sure that our customers are well-positioned as they start to think here as we move through the year, as they start to think about their 2027 budgets, we wanted to make sure that they were earmarking funds for Atera.
Our next question comes from Michael Ryskin from Bank of America. Please go ahead. Your line is open.
Hi, this is Advika on for Mike. Thank you for taking our question. On Atera manufacturing capacity, you noted production would be limited in 2026. What are the primary bottlenecks to scaling the output from here, and how quickly do you think you can ramp toward meeting that level of demand you're seeing? Thank you.
Well, yeah, the question is around just scaling up the production of instruments. The fact is this is a really sophisticated instrument, as you can imagine, and we want to be very smart and measured around how we build it and how we test it. We are very careful with these kinds of launches. Like Adam said, we feel good about what we can do in 2026, and we're gonna keep ramping production as we exit the year into the next year.
Our next question comes from Subbu Nambi from Guggenheim Securities. Please go ahead. Your line is open.
Hey, guys. This is Thomas on for Subu. Thanks for taking our question. A lot of focus on spatial, maybe one on single cell here. Can you just share any color on what pricing headwind you may have experienced, if any, in the quarter, from Apex and then what you're anticipating for the second quarter? Thank you.
Yeah. I would say the general trend has been similar to what we saw in Q4, as far as sort of the mix and the pricing dynamics around Flex, around Flex Apex. It is, you know, I would point out that it's still like very early here in terms of the launch. We only have a partial Q4 for the launch and then the Q1, so just a bit over one quarter. So far, very happy with the progress. Really, really great feedback from customers and really large scaling up of volumes of the product. So overall feel good about single cell and kind of how it's, how it's proceeding. Again, still early time in the launch. All in all, like really, really strong trajectory.
Our next question comes from Sam Martin from Deutsche Bank. Please go ahead. Your line is open.
Hi, this is Sam Martin on for Justin Bowers in Deutsche Bank. I just wanna ask a couple of quick questions around the Visium platform. I think last quarter you mentioned Xenium had become the spatial platform of choice, and now with the launch of Atera, another, you know, launch and, I guess upgrade really within the spatial realm. I just wanna kind of get your updated thoughts on A, customer demand for Visium year to date with the launch of Visium HD really just over two years ago. Your thoughts on really the future of the Visium platform and whether or not you still think it has a space in your portfolio. Thank you.
Yeah. good question. You know, as I've been saying now for the past several quarters, there's clearly a trend in the market towards kind of the imaging-based readout and in particular towards Xenium. It's been a huge resonance within sort of spatial circles of the of the Xenium platform. With the launch of Atera, we obviously kind of anticipate that to that trend to get reinforced going forward. You know, that said, certainly Visium has its place as well. There's many customers who absolutely love the platform and are running it very robustly, very consistently across very large numbers of samples. We expect that, you know, it's gonna have its place. It's gonna continue to have its place.
It's a great assay for many applications and well regarded by many of our customers. Of course, we'll continue to support it and, you know, we'll ensure customer success.
Our next question comes from Puneet Souda from Leerink Partners. Please go ahead, your line is open.
Hi, Serge. Thanks for taking my questions here. You know, I don't know if this was already covered, but just trying to think about, you know, does this have any additional and the Atera launch, does this have any impact on the decline or the maybe an acceleration in decline in the Visium usage? You know, if you could talk about, you know, how does the, you know, if there is anything else that you can do to sort of mitigate that or address that, you know, before the launch. Wondering if there is a desire from customers to, you know, pull the launch forward a bit to address their, you know, high level of interest in the instrument here.
Yeah. A few different kind of questions here. I think as far as Visium is concerned, I mean, there's going to be some effect, right? There's a spatial platform and like I kind of said earlier, it has been a trend of converting towards Xenium, and I think that sort of trend is gonna continue with the arrival of Atera. There is definitely a place for Visium customers really like the data. They're gonna keep running it. While the launch of Atera is gonna put pressure on both spatial platforms, it's gonna put pressure on Visium too. You know, that is all incorporated into our guide.
I think it's always, you know, sometimes we have a lot of experience with different product launches. One thing that's important to appreciate that I think sometimes people kind of underestimate is the amount of kind of built-in stickiness that exists with products, right? People have ongoing projects. They've got their workflows. They have the data that they're used to, that they really like. That's what's showing up. That's what we're seeing in the field. You know, kind of robust, continued use of these products and these capabilities. As far as, you know, Atera and the demand for it, I mean, certainly people are, like very, very interested.
We as a team is working really, really hard to deliver the instrument to the world as fast as possible. We're being very deliberate, very rigorous, and really excited to get it out there. Trust me, working as hard as they can to get it done quickly.
Our next question comes from Tycho Peterson from Jefferies. Please go ahead, your line is open.
Hi, guys. This is Priya on for Tycho. Thanks for taking our question here today. Just wanted to hit on, like the clinical adoption scaling there. You mentioned that Atera can analyze up to 3,000 core biopsies per year. I guess what is the specific feedback from biopharma partners regarding the platform's readiness for integration into large scale phase II and phase III clinical trials? Thank you.
Yeah. I mean, good question. I mean, when I talk about the number of samples that a platform can process, I specifically refer to 1 centimeter squared areas. In fact, it's possible to put more samples onto if you need to, like if you're doing tissue microarrays and things like that. There's additional scaling that depending on your format of the of your of your biopsies and what you're interested in measuring, that's possible there. The platform does enable, like really, really massive scaling. The conversations with biopharma have been really encouraging.
As both Apex and Atera have been very resonant, both by virtue of opening up translational applications, the sample types and the scaling all are very enabling. Yes, we do feel like this is going to be a big driver, especially as we kind of think about next year and beyond.
Our last question today comes from Dan Arias from Stifel. Please go ahead, your line is open.
This is Paul on for Dan. Thanks for the questions. There's been some messaging of Atera as providing sensitivity at the level of single-cell sequencing. I mean, obviously, there will still be lots of use cases for single cell, but on the margin, do you expect any Flex volumes over time to potentially move to Atera? Just kind of on that same idea, you mentioned in your prepared remarks that the double-digit Chromium reaction volume growth was driven by FlexApex. Just wondering if reaction volume is growing at what kind of level excluding FlexApex?
Yeah. As far as the sort of single cell relative to Atera kind of question, it's, you know, it's a reasonable question to ask, but not something that we're expecting to be an issue in the near term, nor is it anything that we're hearing from customers at this stage. If you think about just kind of configuration of the products and the capabilities which you get from them, the pricing, the workloads, everything is sufficiently different. You know, we do expect that in the long run, there's going to be really massive experiments with single cell that will be possible with Atera that had not been previously possible before.
We see that as the future, and we're certainly not seeing any effect on a single cell business at this stage or in the near term. In terms of reaction growth, we're seeing it across multiples of our applications. Also, this was the last question just before we hand off. I wanted to kind of finish with a couple closing thoughts. Just personally just how excited am I about the setup we have for 2027 and beyond. If you look at it through, you know, through the product lens, 2027 will be the first full year of Atera, really the year of Atera.
If you look at Flex Apex, by that point it will gain widespread adoption, pricing on the single cell side will stabilize. The growth in volume will naturally then translate into growth and revenue. When you look at it through the market lens, we expect this exponential increase in AI-driven research and all the AI-influenced science that's gonna be happening out there. The scaling of translational cohorts is really set to take in as we look to next year. From the macro perspective, at the very least, we will have good compares. To the extent that the conditions improve, we should see an acceleration to all the other trends.
This will conclude today's conference call. Thank you for your participation. You may now disconnect.