Earnings Call: Q1 2021

May 5, 2021

Thank you for standing by, and welcome to the 10x Genomics First Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Eric Chesky, Director of Investor Relations and Strategic Finance. Thank you. Please go ahead, sir. Thank you. Earlier today, KENEX Genomics released financial results for the Q1 ended March 31, 2021. If you have not received this news release or if you would like to be added to the company's distribution list, please send an email to investorskennexgenomics.com. An archived webcast of this call will be available on the Investors 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, 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 Saxonoff, our CEO and Co Founder and Justin McAnear, our Chief Financial Officer. In addition, Brad Crutchfield, our Chief Commercial Officer will be available for Q and A. With that, I'll now turn the call over to Serge. Serge? Thanks, Eric. Good afternoon, and thank you for joining us. On today's call, I will start with a brief review of our performance and execution during the Q1. Next, I will discuss our views on current market dynamics, our vision for the Sanctuary Biology and our investment across the business to achieve this vision. I will then turn the call over to Justin for a more detailed look at our financials and outlook for the year. We had a strong start to 2021, with 1st quarter revenues growing 47% year over year to $106,000,000 as we continue to drive adoption of our Chromium and Vision platforms. While we saw good results this quarter, there are many indications that our customers are not yet back to normal productivity. This is due in large part to COVID related protocols, which have a disproportionate impact on decentralized bench experiments. That said, our conviction in the vast opportunity ahead remains as strong as ever. The frontiers of biology continue to expand With 10x leading the way, our rapid pace of innovation has continued as we have launched breakthrough products for both our Chromium and Vizium platforms. At our No Growth Experience event, we were inspired by our global customer community and their intense engagement in our technology applications and product roadmaps. It is precisely this engagement that defines the urgency of our mission and commitment to our customers. Now moving to our quarterly results and starting with chromium. Demand for instruments and consumables remained strong in the Q1, And it is clear that our diverse product set is resonating across a wide range of applications and use cases. Adoption of our gene expression solution continues to expand and single cell gene expression is increasingly becoming the standard for measuring biological systems across most areas of life sciences. While earlier in its lifecycle, our immune profiling solution is also on an encouraging trajectory From COVID and infectious disease applications to immuno oncology and autoimmunity, this solution enables a detailed and comprehensive view of the immune system It is now becoming an essential tool for discovery and validation experiments. We're also excited by the strong interest in our gene expression plus Tactiq multi owned solution, which began shipping last September. This product is a game changer for understanding the rules of epigenetic programming. By simultaneously measuring chromatin accessibility and gene expression within the same cell, researchers are able to link individual epigenetic programs to their outputs across varieties of cells, tissues and experimental conditions. We're now beginning to see publications from our early adopters. In a recent preprint, researchers used our gene expression and attack solutions and subsequently Molziot to profile the developing human cerebral cortex And to better understand the best genesis of newer developmental disorders such as autism, the team created an atlas and mapped various gene regulatory elements in the developing which will help understanding the programs governing human development and disease. We remain focused on increasing access And bringing more customers into the single cell ecosystem. During the Q1, we launched our CellPlex and low throughput kits and open general access to our 10x cloud solution, lowering barriers to adoption. We're pleased with the response to these products and capabilities since launch And they're progressing in line with our expectations. Now moving to ViZium, we're encouraged by the speed of adoption and pace of discoveries from our customers. There are now approximately 100 publications and preprints to date featuring Vizium. For example, just recently in cells, researchers used Visium in concert with Chromium to characterize the development of the human Identifying and mapping the function of over 100 different cell states linked to major developmental milestones. These researchers were able to describe specific expression programs and define cells and locations linked to rare developmental intestinal disorders, providing the scientific community with an important resource to facilitate further studies. Visa is early in its lifecycle and we will continue to bring additional enhancements to this platform. The product roadmap we laid out earlier this year Featured new foundational capabilities that will help fulfill its potential. This starts with the launch of ViZium for FFPE, which is now available for preorder. This product gives researchers access to the full transcriptome across the entire tissue, enabling for the first time through unbiased discovery and FFP samples. While we're seeing significant interest from our existing Visium customers, The majority of interest thus far is coming from translational customers new to 10x. And while it remains very early, We're pleased with the reception in the market thus far. We anticipate shipping this product later this quarter. As we look to the future, there is a vast universe of opportunities ahead of us. This is the century of biology, And our goal is to develop technologies to accelerate the mastery of biology and to help researchers develop precision diagnostics, targeted therapies and cures Needed to solve humanity's most pressing health challenges. The COVID pandemic is a striking demonstration of the importance of our mission. Due to the massive and relentless efforts by scientists across the globe, we have seen incredible investments in our understanding of the SARS CoV-two virus, The underpinnings of the disease and approaches to fighting it, all culminating in the rapid development of multiple but effective vaccines. There is an increasing recognition of the importance of investing in the life sciences among the public, the industry and the policymakers. For example, the latest U. S. Federal budget proposals have called for large increases in the resources allocated to science related agencies and the creation of a new agency aimed at driving transformational innovation within biomedical research. If approved, the proposed 2022 budget would represent 1 of the largest annual increases for the NIH on record. These trends are not limited to the U. S. Alone. Around the world, we are seeing calls for increased investment in science and general research. And while these are only proposals, We think they are emblematic of increased support for life sciences research and a favorable funding environment for our customers going forward. We believe these trends will accelerate the progress our customers have been making, further building on the large number of scientific discoveries that have been enabled by our platforms. To date, there have been more than 2,500 publications using our products across a wide variety of research areas, including cancer, autoimmunity and infectious disease. These publications have uncovered one of the key research findings of recent years The cell heterogeneity intertwined with complex gene networks is a pervasive feature of all tissues. Ultimately, this means that every tissue sample will need to be analyzed with single cell and spatial context, whether for basic research or for clinical diagnostics. We have laid the foundation for this future by investing in our 3 complementary platforms, Chromium, Vizim and our in situ platform, which is under development. Together, they will provide a comprehensive set of solutions for researchers and clinicians. For example, significant elements of this future could be gleaned from AACR, a major cancer conference which took place last month where our products were featured prominently. From identifying rare progenitor cell types to understanding the biology of subclonal populations To measuring immune infiltrations and tumor marker environment, to discovering and analyzing potential tissue based biomarkers. The benefits of single cell and spatial multiomics approaches are becoming increasingly clear. Since inception, we have focused on innovation, on building new technologies to enable our customers to make breakthrough discoveries and accelerate the understanding of biology. We have invested nearly $1,000,000,000 in product development and innovation and launched more than 15 pioneering products since 2015. These products have won multiple awards, ticked off the single cell revolution and catalyzed the emergence of spatial genomics. Our research and development work has resulted in a broad intellectual property With 1100 patents and patent applications covering the breadth of our products as well as many important application areas. Moving forward, we intend to protect our existing and future innovations as we continue to invest in creating revolutionary products. We're now in an incredible position to capitalize on the immense value creation opportunities ahead. We will continue to invest broadly to ensure that we have the necessary resources to achieve these goals. This starts with continued investment in the 10x team. Our employees have laid the foundation of the company's success to date. As we look to achieve our ambitious goals, preserving our collaborative culture and sense of urgency, While also massively scaling the organization is going to be essential. We will remain intensely focused on finding, Hiring and developing top talent across the organization. Within R and D, we're investing in our teams spanning Pleasanton, Singapore, Stockholm and Copenhagen to drive product innovation across all three of our platforms. With Chromium, we're investing to remove barriers for those new to genomics, while also adding powerful new capabilities. Vizium is early in its lifecycle and we're focused on adding the core features necessary to make this platform the standard for spatial genomics research. And finally, within Incytou, we're focused on building the right solutions with the user experience and quality that our customers have come to expect. Consistent with our investment in R and D, we're expanding our commercial organization in response to the strong demand we're seeing in the market. With our extensive roadmap of new products and capabilities, we're investing to support our entry into new markets and application areas. And finally, we're expanding our global infrastructure operations and manufacturing capabilities to support growth across all of these sectors. We have a deep conviction that very little in biology can be fully understood except through the lens of single cell analysis. This conviction has materialized in our Chromium and Visium platforms and is guiding the development of our in situ platform. We unequivocally see a future where every tissue sample should be analyzed using at least one of these three approaches. We look forward to realizing this future as we pursue our mission of mastering biology to advance human health. With that, I will now turn the call over to Justin for more detail on our financials. Thank you, Serge. Total revenue for the 3 months ended March 31, 2021 was $105,800,000 compared to $71,900,000 for the prior year period, representing a 47% increase year over year. Consumables revenue was $93,100,000 which increased 52% over the prior year period. Instrument revenue was $11,100,000 which increased 22% over the prior year period. Service revenue was $1,600,000 which increased 21% over the prior year period. The increase in consumables revenue this quarter was primarily driven by the growth in the instrument installed base. The increase in instrument revenue was driven by increased instrument placements during the quarter. Service revenue increased due to a larger number of instruments coming off of their initial 1 year warranty and on the paid service contracts. North America revenue for the Q1 was $51,800,000 which increased 30% over the prior year period. EMEA revenue for the Q1 was $19,200,000 which increased 46% over the prior year period. APAC revenue for the Q1 was $34,800,000 which increased 83% over the prior year period. Now turning to the rest of the income statement. Gross profit for the Q1 was $89,800,000 compared to a gross profit of $56,800,000 for the prior year period. Gross margin for the Q1 was 84% compared to 79% for the prior year period. The gross margin increase was driven primarily by lower accrued royalties related to ongoing litigation. Total operating expenses for the Q1 were $99,000,000 an increase of 29% from $76,700,000 for the first The increase in operating expenses was driven by increased personnel related expenses due to ongoing expansion within R and D and the commercial organizations, including stock based compensation, increased costs related to facilities expansion and increased information technology spend in support of general expansion of our operations and expenses related to our ongoing COVID-nineteen Employee Testing Program. R and D expenses for the Q1 were $41,900,000 compared to $26,000,000 for the Q1 of 2020. The increase was driven by $10,300,000 of increased personnel related expenses, including stock based compensation and a $1,800,000 increase in expenses related to lab materials, supplies and equipment. SG and A expenses for the Q1 were $56,900,000 compared to $50,400,000 for the Q1 of 2020. The increase was driven by $9,900,000 of increased personnel related expenses, including stock based compensation and a $2,100,000 increase in expenses related to IT and facilities. These were partially offset by decreased legal expenses. Operating loss for the Q1 was $10,200,000 compared to a loss of $19,900,000 for the Q1 of 2020. This includes $16,200,000 of stock based compensation for the Q1 of 2021 compared to $6,700,000 in stock based compensation for the Q1 of 2020. Net loss for the period was $11,600,000 compared to a net loss of $21,100,000 for the Q1 of 2020. We ended the quarter with $617,200,000 in cash and cash equivalents, net of restricted cash. The decrease in cash from the prior quarter includes the impact of our $28,000,000 land purchase in Pleasanton on which we will construct our future operations center. Now turning to our outlook for the remainder of 2021. In our last call, we disclosed that we ended Q4 with about 90% of customer labs operational at varying degrees of capacity and that we were seeing a wide range of efficiencies within that open capacity. We noted that we did not expect much improvement in Q1 Or Q2, and so far this has transpired as we have expected. Unlike bulk sequencing approaches, which are typically centralized and batched And performed in core labs. 10x experiments are performed at the lab bench where the samples are. Customer labs are continuing to be impacted by overall There is also a variation within geographic regions. We continue to expect full year revenue for 2021 to be in the range of $480,000,000 to $500,000,000 representing growth of 61% to 67% over full year 2020. Thus far in the Q2, we have seen little change in lab efficiency from Q1 and we expect our Q2 revenue to be slightly up sequentially. At this point, I'll turn it back to Serge. Thanks, Justin. 2021 is off to a strong start. I want to thank our employees for their continued dedication Excellent execution so far this year. You are the reason for our success and are the foundation for our successes in Medusia. I would also like to thank our customers for their incredible response to our inaugural experience event. Their engagements are passing our highest expectations And we reaffirms our vision for the future and the vast opportunities ahead. With that, we will now open it up for questions. Operator? Thank you. Your first question will be coming from the line of Doug Schenkel with Cowen. Your line is open. Good afternoon and thank you for taking my questions. My first one is just building off of one of the last things that Justin talked about, His remarks on lab activity remaining at about, I think, 90% of norm. I'm just wondering if there's instances that you could detail where certain parts of the world are maybe more open than others. And as we've moved into the Q2, what parts of the world or what types of labs maybe have Up more than others and thinking about other parts of the world where there are there's a little bit of a resurgence if you are seeing a change in activity. So that's the first question, just trying to dig a little bit deeper on that 90%. And then the second topic is on VIZIOM. It's great to hear that VIVIOM, FFPE and I think HD are on track for first half commercial launches. FFPE were Clear HD, I just want to make sure. And you indicated that most of the early FFPE interest is from new to 10x translational Customers, on that, I'm wondering what you're doing commercially to support those customers that you haven't necessarily gone after as aggressively in the past. And I'm wondering if you're hearing anything in terms of large retrospective studies. I'm just wondering if you have any visibility from partners or customers that The Visium technology is increasingly going to be used in this context with a quick path to peer reviewed publications. Thank you. Well done. That's a lot. I'll start with the sort of the regional highlights. Yes, it's pretty dynamic and it's changing kind of all the time to say the least. Certainly, in Europe, we saw the UK balance really bounced back nicely. They had some or some additional headwinds with Brexit and some new import regulations and processes, but that was the demand was nice And strong out of there and we see approaching some level of normalcy, maybe similar in Scandinavia, but France specifically is where we've seen some real slowdowns and even More specifically, just recently. So that's been a little more of a challenge. If we were to go over to Asia Pac, obviously, China, Korea In Japan, I really essentially back to what is the new normal. A little bit more issues in Southern Europe, obviously, very Topical right now with India, but we don't typically do a tremendous amount of business in India, so not as big an issue. And then U. S, surprisingly, we found Well, actually, let's start with North America. Canada was very slow specifically and acutely based on the government did not release their typical budget In the Q1, and in fact, they released it towards the end of the quarter, but that was hard to get some of the orders booked. And then as far as the U. S, again, we started the year with a lot of slowness in Southern California and more on the West Coast, But that's really changed in the last few weeks. So there's a lot of things that are working and improving and there's some Sort of intermittent headwinds, I think we're moving quickly to improving situation in the back half of the year, but there's Some level of headwinds in the first half. Yes. Doug, so this is Surgeon. On the VISION question, so just for a point of clarification, VISION HD is coming in the first half of next year. That's what we indicated that experiencing early in the year. Visa McAfee is on track for this quarter, so just as you suggested. And yes, we're very excited about the product. Most of the customers are new, at least based on the preorders. But I would want to Reemphasize that it's very early. We've just started taking preorders and it'll be some other time before there's 1st, customers are going to be testing out the product and then they'll start kind of collecting the samples for to move forward. As far as I think that's Yes, I think it was the yes, the last thing was just the retrospect. I was just wondering about kind of the Support of translational customers and any insight as to whether retrospective studies are going to get going quickly here? Yes. I mean, I would be careful in terms of assuming how quickly that can happen because, again, customers need to first buy the product and get on boarded with it and test it, which obviously we feel pretty optimistic about and have great performance that we've seen so far internally. And As far as your commercial execution, yes, we're certainly building up our team over the course of the past year with this in mind, first with the Original ViZium and now ViZium FFPE. We're building out overlays within our commercial function. Our Science and Technology Advisors, which are like specialists within the sales force and also in our support organization, we're actually investing pretty Intentionally, aggressively to be able to expertise to help our customers with the workflow in Visio. Yes. Maybe just to add, you also add, is there anything special for FFPE? And it's kind of interesting because in FFPE, These the more traditional customers that are used to tissue, is really not going to be the issue, which has been more of a challenge as we've been onboarding Our traditional customers, which haven't worked with tissue, but for FFPE, we're gearing up to help on the data side of it, because a lot of these customers Not worked with high content data that you get off a sequencing application, in this case they are. So we have a fairly Extensive and we've increased the ability to provide the sort of computational support on the back half of an experiment. Okay. Thanks so much guys. And our next question will be coming from the line of Tycho Peterson with JPMorgan. Your line is open. Hi, good afternoon. This is Julia on for Tycho. Thanks for taking the question. So I wanted to follow-up on Avizium FSPE. How much of the translational opportunity can you address with FFPE? I mean, does that get you access the majority of translational users or do you still need a broader protein menu maybe or An automated instrument besides the CytoSys front end instrument to further enhance root cause. Also, Julien, you did see the major points here. So, look, we have a pretty robust pipeline on ViDiM and We expect on the product side. We're also seeing great, great feedback, initial response from our customers. So we do see that this product will over the coming kind of upcoming future progress with the market Really well. We will put on yes, there's only protein capabilities coming, which will help and Cytusys will help as well. So I think that's The way we're looking at it is that over the course of the next year or so, there's going to be sort of a coming together of all these capabilities to really round out the solution for translational customers. But again, as we've seen with Chromium, We see this as a platform with many products in the future, many applications to address all the different kinds of ways that the customers will end up using Yes. Julie, this is Brad. Just to also add, the world has not been able to do true unbiased gene expression across tissues Until just in fact, not really because we haven't shipped the product yet. And I think this is something that people are really excited for regardless of what Other products they're using today. So I think as this becomes clear, I think this is going to be an important growth asset for FFBE. Got it. That's helpful. And then also I was wondering, I'm curious of your thoughts on the clinical side of spatial. Obviously, this market would take time to develop and mature, but I think there's encouraging signs that spatial biomarkers are being developed and starting to be listed in guidelines. So curious what's your expectations around the timeline of clinical spatial market development? And is this clinical market something that you can address with VIZIOM HD? Or is that really for the in situ technology? Well, I mean, the clinical markets, generally speaking, when you look at them, they tend to develop somewhat slower than people expect. And As we our focus our near term focus is still on sort of the research and translational applications because those will form the foundation for Clinical applications down the road. And yes, when we think about the clinic and just from first principles about what are the best like what is the best platform for the clinic, You end up thinking in terms of in situ. That is not to say that Chromium and Byzium will not have applications that are going to be very powerful and useful, but The in situ approach lends itself particularly well to the clinical context by virtue of it being an integrated system, by virtue of it being Explicitly targeted and in the format that the clinicians, the pathologists are already used to. Got it. Very helpful. And last one from me. Last quarter, you mentioned you're adding 100 employees front loaded this year with particular focus on the sales force side. So could you give us a progress update on that? So we've got very ambitious hiring plans this year. We actually plan to add about 400 employees Over the course of this year and the year around 1300 employees. And so we did frontload our hiring in our internal plans To have more of the hires in Q1 and Q2, we're running slightly behind that aggressive internal plan, But I'd say we're on a pretty much on a straight line pace right now overall. Got it. Very helpful. Thank you. Next question will be coming from the line of Satya Savant with Morgan Stanley. Your line is open. Hey, guys. Good evening. Serge, just one quick question for you On the guide here, I know you talked about sort of lab capacity still being a little bit depressed, sort of spotty rebound across the geos, as Brad mentioned as well. Are you seeing any sort of are you baking in perhaps any conservatism into those expectations, Particularly as you launch Chromium X here, I mean, are you seeing the possibility of customers pushing out orders for the current version of the Chromium in light of the Coming online in the back half. And similarly, I mean, obviously, the HD launch is still a year or so away. But ahead of that, I mean, any shift in demand that you are detecting at this stage? So let me Start with the second the latter parts of the question and then maybe Justin can kind of talk about the guidance. So in terms of the Chromium demand, we are not seeing any sort of any weighting on the parts of customers for Chromium X, which is coming in the second half. And on VISIUM HD, maybe marginal, but not really meaningful to the extent that people are waiting, Because it's still, as you said, it's over a year away. So I would say those are not really having a material impact, those dynamics right now On the revenue, in terms of the guide, I'll let Justin comment. In terms of guidance, our new product launches On the schedules that we've previously communicated have all been contemplated in the range of $480,000,000 to $500,000,000 that we've put out. As far as instrument placements, people waiting on those for the Chromium X, that's not something that we've seen. Placements were strong this quarter and we Got it. Very helpful. And one quick follow-up on the in situ side. Serge, can you share some feedback on the Cartana early access launch that you had? What are customers saying to date, Particularly around specs or areas for potential improvements. Now I know that this is there's not a straight line between Cortana and the eventual in situ solution that you'll bring to market, But any sort of like key learnings? And then if you can walk us through what remains to be done in terms of those specs evolving on the final version of the platform, I think that Yes. So in terms of the program, the Cortana It is a couple of things. So first of all, it is fully subscribed. So there's definitely one of the key learnings is just a lot of interest and there's definitely a lot of Interest and interest particularly in the 10x solution by virtue of our reputation. And I think those fields in general, the customers are excited by. I think the data is something that resonates as well. We are investing You mentioned it correctly that it's not going to be what the weather we are the chemistry we're using right now It's not representative of what the final product is going to be, which is going to be sort of a combination of our internal developments and acquisitions that we made. And we are definitely investing pretty aggressively. In the meantime, we are learning from All these collaborators and like when we're ready to talk about the actual roadmap, we will talk about the roadmap or not yet ready Got it. And one final one for me. Any thoughts on the evolving competitive landscape? I mean, obviously, a lot of are looking at Spatial, looking at in situ, there's a couple of platforms in early access, etcetera. Would love to get your thoughts on how You see the competitive positioning evolving for VIZIOM and then eventually for your in situ platform. And Is that something that you're baking into sort of the platform development efforts as well for in situ? So in terms of the sort of competitive positioning, like we talked about, we've got the 3 platforms, the Chroma and the Visium and the Coming in situ, we are we do see them as being fundamentally complementary, especially if you want to sort of draw the difference between ViZim and where in situ approaches are going to have. VISAM is, especially with the timing with the arrival of HD is the ultimate discovery platform. And I think it's going to be very, very challenging As you know, maybe ever for in situ approaches to get to there. And so we are We have 5 conviction on Onvisium and what it's going to do in terms of enabling discovery, in terms of enabling translational research and Potentially some clinical applications as well. We it is, as Brad mentioned, the Visium FFP is the only Unbiased hold tissue solution in the market, and it is giving customers something that is not really possible with any other with any other means. In terms of in situ, I think there's definitely a lot of interest. There's definitely a lot of companies out there that are working On this area, it is very early for a lot of them. So we hesitate to comment on any particular specs or any particular competitor given how Yes. So there is information on specificity out there. I do want to say that we're investing aggressively. We do have a pretty By virtue of our scale and by virtue of our relationships with our customers, we have a pretty good handle on what people want and what people would like and we're that's guiding our development and We have a track record of building great products with really innovative features and that's how we see this one playing out as well. Super helpful. Thank you, guys. All right. And then our next for taking the question. I want to sort of go back to your comments on pace of reopening and sort of the status of labs around the world, where your expectations were going into the year and sort of where they are now. As we look forward over the rest of the year, I imagine you'll get that 90% of various levels of capacity up to 95100. Can you give us an update on sort of your internal thinking of when that will happen? Is this sort of a 3Q event in your mind now, 4Q? I imagine that as vaccines roll out U. S. And Europe, That number is going to creep higher. So just when are you anticipating getting back to normal operating environment? Thanks, Mike. This is Justin. Going back to last quarter's call, our view hasn't changed much from then. And during that call, we talked about Q1 being in that roughly 90% of labs capacity being available at varying degrees of efficiency. We expected that to carry forward from Q1 into Q2, and that is what we've seen today. We mentioned that we expected things to start getting better in Q3 and then not really feeling the full impact of that until Q4. And so Q4 is normally a big quarter for us just due to customer seasonality, but we expect to be Q4 This year to be outsized compared to a normal quarter. But overall, our expectations Haven't changed from last quarter and things are progressing like we expected. Okay. All right. And then As some of these labs reopen, and again, I realize there's a lot of moving pieces here, but for example, you called out California started the year slow and then sort of Ramp back up as you got into the way in the quarter, is it a gradual reopen or is there a burst of orders? I'm not talking about instrument purchases necessarily, but more about Chromium Consumables, Visium. I imagine that when labs were shut down, they may have drawn down their inventory a little bit. When they're reopening, are you seeing sort of a bolus of orders as people stock back up to start running at full speed? Hey, Mike, this is Brad. I'll take that. It's interesting because we certainly have seen a level of conservatism with our customers in terms of potentially as they come back into the lab, There's always the concern that there may be some either systematic or even momentary limitations to access. We've had examples of somebody testing positive in a lab and then the lab has to shut down for a period of time. And of course, biology doesn't wait for anybody. And then The other thing that we're starting to see or we've seen in the Q1 is and we thought maybe in the Q4 as well is that people are As they come in back in the lab, they're a little bit more conservative, maybe only ordering a 4 reaction kit versus a 16 reaction kit, Because there is a shelf life issue and obviously people don't want to be cut out. So yes, there are various degrees of that. We can certainly look as we've seen labs come back online through starting mid last year. It's usually a fairly typical pattern, a little bit slow initially as they get the biology up to back Where that needs to be and then obviously, we'll see the orders come in. But what we have seen, not on the consumable side, but the instruments, we've Had great engagement and even prospects for people wanting to onboard and get into single cell, get their own instrument in the case of Chromium, But certainly, interesting to onboard into the technology. Okay. That's helpful. And then one last one for me. Obviously, VIZIOM FFP is still in very, very early stages, but anything you can comment on in terms of cross sell Between Chromium, the Visium, sort of overlap between its customers, is that getting a little bit higher? Are you getting a little bit incremental pull as you go into some of these more Translational customers realize it's early, but just wondering sort of how we should be thinking about that? So I would say, look, in terms of like 1 the flow from Chromium to Visium is obviously, it's there. It's very clear. You can look at publications and look at customers. The flow the other way, I think, is minimal. I'm not sure if we really expect material sort of permanent purchases. The people those translational customers, they're used to working with tissue, Right. That's the thing. I think Wisdom is really the platform for that. Next question will be coming from the line of Patrick Donnelly with Citi. Your line is open. Great. Thanks, guys. Serge, maybe following up on Mike's question there on VIZIYAUM. Can you just talk about kind of the repeat customer reorder rate, whatever you want to call it, on VIZIYAUM? Obviously, you guys have a pretty nice Initial user base here, how have you seen the customer activity on the reorder rate side? Yes. So That's a good question. That's something that we've been looking at and paying attention to. It's been robust. It's been quite healthy and increasing consistently Since launch. So definitely happy with that and you can sort of see it in terms of publication rate too because that That tends to correlate. Those are the people that are reordering and able to get through the experiments. The one sort of caveat I would add is People who have onboarded once the pandemic hit have been have had more difficulty getting going, right. Once the people The initial bolus that got going pre pandemic is doing particularly well relative to the ones who Kind of glad to join afterwards. Understood. Okay. And then on the low throughput kits, can you just talk through the initial reception there? Obviously, you guys Lower the bar to get into the market for your customers. Just wondering where you're seeing the most uptake, where you're seeing the interest and how the reception has been there So, the reception has been like robust and great According to what our expectations and it's been going well pretty consistently and I would say mostly our existing customers which we sort of So, other dynamics, especially initially, people who are trying to kind of start up new kinds of studies or just sort of experiment to Try out new potential sample types to kind of expand the use cases for the existing platform. And we do expect that this is the kind of thing that accrues to the platform over time, accrues the benefits of the platform over time. We're not so much counting on selling that particular kit, But it's what follows that, Kit, is what we're really keen on enabling. And I think that it seems to be playing out that way. Okay, great. And then one for Justin and maybe Brad you can chime in as well. Just in terms of the 400 employees this year, How many is it 100 that are kind of sales reps customer facing? And then in terms of those ones, How long does it take them to kind of flip productive or whatever you want to call it in terms of their ramp to become productive sales reps? Is it a quarter or 2 or is it quicker than that? We'd love some color on that front. Yes, Patrick, this is Brad. So We kind of set out, I think I've said early in the year that we'd hire roughly 100 people in the commercial organization. We're well in our way on our way into doing that. So that's kind of on an overall basis. I don't know what was the second part of your question? The ramp on, how long does that go? The ramp on, sorry. Yes. We work since we're hiring so many people, this is kind of a big issue for us. It's usually about 6 months, Less so on the sort of the technical side because we're generally hiring our customers. So that's been great with our FASs And some of our support people, so they come up really come up fast actually. But on the sales side, definitely about 6 months, we tend to try to find more experienced people that know the territories and so they at least have that capability. But selling for TEDx is not for everybody and we have to be very selective in who we pick up and put on the team. Next question will be coming from the line of Ben Arias with Stifel. Your line is open. Afternoon, guys. Thanks for the question. Serge, on the CellPlex kit, it sounds like you've been in the field for a little bit there. I'm curious if you're seeing any dampening effect on consumables as you have labs taking advantage of the lower pricing, but to Brad's point, maybe not scaling up fully Just on the size of the experiment, and then maybe looking out a bit and conversely, if you're starting to get a sense that there's A percentage of the user base that might take advantage of the capabilities there and are you seeing some signs that you can actually drive platform placements On the back of that. So, on the first question around CellPlex, The demand has been quite robust. So out of the gate, it's quite strong and definitely happy with that. Whether that's having a dampening effect on poultry, that's an interesting question. It's certainly something that we are Interested in and we're sort of expecting, it's hard to tell explicitly right now. I think we'd need to kind of wait another quarter or 2 and start correlating those Scatterings, people who order those CellPlex kits, what do how does the usage change. So it's conceivable that it's having But again, the whole rationale of this product is that it greatly expands the reach of single cell ecosystem and ultimately has a much Greater impact by pulling in all these other experiments onto the platform. And so, so far, we haven't seen anything That would be contrary to that thesis. In fact, it's only if anything, it's been sort of reinforced by just the rate of initial orders. Yes, okay. All right. And then maybe just on VIZIUM HD, I don't know whether you mentioned this on one of the other calls that you had, but can you just remind us if you have what the economics For 10x, we'll be there. Is there a higher cost per sample that the HD workflow drives? Or is it more or less in line with what you have now with the 1.0 So, we haven't talked about BDMHD, not the economics, not the pricing. So, it's a bit early for that. Next question will be coming from the line Matt Sykes with Goldman Sachs. Your line is open. Hey, guys. This is Dave Delahunt on for Matt. There's been a lot of interest in situ, clearly huge opportunity for you guys. Sorry if you could talk a bit about what fields of study you expect to see the most interest between oncology, neuroimmune, developmental In those areas? Yes. Well, so you hit on the right ones right there. Yes, yes, yes. Yes. Look, I think All of them certainly have there's a lot of interest. There's going to be a sort of when we're looking at sort of cell liposine projects, That's a natural it's a natural fit for the technology as a complement to Chromium and Visium kind of as used for validate The markets that get discovered initially and kind of run them on the largest set of tissues. So certainly and that kind of brings you to developmental biology and those applications. Neuroscience, I mean, for sure is a big one and certainly in oncology and immuno oncology. So it's hard for me to pick Between those, I could rank order them, but they would I'm not sure if I would convincingly be able to say that one is significantly higher than the others. Ultimately, I would say I guess I would say one thing ultimately is just because of such a great fit, This is a total technology for clinical applications down the road. I would imagine that those will emerge on the side of like within sort of the general oncology, immuno oncology space. But it's important to note that in situ, they're going to be targeted applications. It's going to be sorted and practical to do unbiased Discovery, given the amount of data that you would pull on individual molecules. So a big part of the next year or 2 is really Finding out and understanding these biomarkers, so you can curate those panels on in situ. So there's it's kind of a whole connection That started with some of the early discovery work with Chromium, moved to Visium and ultimately paying off to in situ in the clinic. Great. All right. Thank you. And we've seen Among the explosion in omics, there's an increasing interest in the study of proteomics notably, number of companies have gone public in that space recently. So can you talk about the demand for your protein expression platforms and any correlation there? Yes. So we do definitely see a lot of protein measurement work going on, on our products, particularly on chromium. I mean, a very large fraction of the single cell experiments is actually whether it's measuring expression or other analyzes actually done with Proceeds as well using our feature barcodes technology. So it's a pretty substantial part of the application space and a Essentially growing part as well, rapidly growing, lots of interest. And people who have not previously been actually measuring protein, so kind of Genomics, cell kind of biology people who are coming into this venue. So definitely a Growing opportunity for us, growing application space, would you think that for our single cell and spatial type applications Using oligo conjugated antibodies for general like those kinds of reagents is the way to go, because it gives you the best kind of way, Maybe the only way to really measure these analytes to single cell resolution. That's very high flex. Great. Thanks. And last one, on the gene expression panels, could you talk about which panels have seen the most customer interest Between the fixed gene panels and the custom panel designs? Yes. So that one was a bit of a scattershot, maybe going back to your first question. It is kind of neuroscience is definitely up there and So the development biology and oncology, yes, so I'm not sure if I can say that one is again significantly higher than the other because those are the areas That get picked up. So generally where single cell is used. Next question will be coming from the line of Matt Larew with William Blair. Your line is open. Hey, good afternoon. Thanks for taking my question. Serge, you alluded to the experience event. So maybe just you or Brad, could you just comment on What metrics you're using to judge the success of that event, particularly in light of some of the reduced lab activity and budget issues you mentioned? Yes, I'll take that. Yes, this was a great success for us. We initially positioned this as somewhat of an alternative than what we would typically do in AGBT. It's really grown into a much bigger event for us and something we'll proceed with. First, it's about numbers. We had 3,000 over 3,000 people consume this on the 2 days that we put it out. There's obviously people because we've made that available To download off or watch off the website. But the other side of it is Engagement, and that's the other metric we had and we that blew away the we always question about how many questions will we get and how do we do this. We had over 200, almost 300 questions come in and that over those several hours, that level of intensity and the level of Engagement with our internal teams, it was incredibly motivating and reaffirming. And then the other We like to look at is net new, people that we would have not we have not seen before. And above those populations, which of those should we have seen? We had a high percentage over 1,000 of those almost a third of those people were new to 10x. So again, overall, I think we checked all the boxes here And something we want to evolve. And again, I think the thing that we were particularly impressed with, again, this was focused on our customers and It created a really nice venue for us that we probably couldn't even do in a in person event. So this is something that it's been great. Like everything else we do at this company, we'll do better next year and the year after that, but we were very happy with the results. Okay. And then on the ATAX plus gene expression product that launched last September, you mentioned I'm pleased with uptake. Just curious if there's any sort of data points or trends You can give us relative to other product launches that sort of are supporting your bullish view on it. Yes, I mean, it's up there. We don't break out individual products, but it certainly is trending well. And It kind of seems to one of those products that hit the sweet spot of the customer base being ready and the product having the right feature set That's a kind of the response has been great and responsible just in terms of feedback we see from customers, the signs we see coming out And the numbers we're seeing from orders. And the other thing just to add, we were fortunate enough we were able to launch a precursor to that product with the ATAXYNC. And so this market was well set up Because when we launched ATAC Seq and first announced it, the very first question in the first five second is when can I do gene expression and attack in the same cell, On Sing Nuclei? And we delivered that roughly 2 years after that point and then people were definitely ready for it. Okay. Thank you. Next question will be coming from the line of David Westenberg with Guggenheim Securities, your line is open. Good afternoon. This is John on for Dave. Thanks for taking my question. So as we're looking at in situ, I realize that you're not able to comment too much on the R and D effort. But can you talk about what's Necessary and versus what's nice to have like a 2 d versus 3 d proteins, RNA, DNA, timed results sequencing on the platform? Thank you. Yes, I mean, a lot of it is a question of when and not what. I think these platforms, the capabilities that we have Internally and when we build out, we can certainly believe so all of this sort of all of what's necessary over time. We are focused on making sure we get when we get to market with the first product, it has sort of the right set of features for what the market needs right now, The gate, we haven't really talked about the specific features for what's coming and that's part of Learning what we're doing, collaborating with our customers right now as we're building out this roadmap. Okay. And when we're looking at how the Chromium grows, it's new customers, new applications and like larger applications, can you could you rank How you think of those 3 levers are going to be driving the revenue growth? Thank you. So, I would say, they're all important. Driving new customers is the thing that drives Ultimately, long run growth, right? So we're focused on that. While they're adding every new customer, there is some out of ramp before they see their The contribution becomes meaningful. But on a long run basis, obviously, that's the engine that drives the overall business. We are always the we are focused on adding applications and capabilities because our existing customers certainly have More budgets that they can spend, they have keep getting keep increasing their budgets by virtue of running up as well. So I wouldn't classify that any of those 3 are like more than Relative to others, we're pressing in all of those imperatives And no further questions on the line. Senators, back to you. Thanks for everyone participating on the call. We look forward to chatting with you in the future. Thank you.