10x Genomics, Inc. (TXG) Bundle
Understanding 10x Genomics, Inc. (TXG) Revenue Streams
Understanding 10x Genomics, Inc. Revenue Streams
Revenue Overview: For the nine months ended September 30, 2024, total revenue was $445.8 million, representing an increase of 3% compared to $434.7 million for the same period in 2023.
Breakdown of Primary Revenue Sources
The revenue streams can be classified into three main categories: instruments, consumables, and services.
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Instruments | $19,056 | $34,942 | $(15,886) | (45%) |
| Consumables | $126,204 | $114,373 | $11,831 | 10% |
| Services | $6,394 | $4,329 | $2,065 | 48% |
| Total Revenue | $151,654 | $153,644 | $(1,990) | (1%) |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, the overall revenue growth rate was 3%, while the revenue for instruments decreased by 20% and consumables increased by 6%.
Contribution of Different Business Segments to Overall Revenue
For the nine months ended September 30, 2024, the contributions to total revenue were as follows:
| Revenue Source | Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Instruments | $68,361 | 15% |
| Consumables | $359,901 | 81% |
| Services | $17,502 | 4% |
Significant Changes in Revenue Streams
The most notable change in revenue streams includes:
- Instruments revenue decreased significantly by 45% in Q3 2024 compared to Q3 2023, primarily due to lower sales volumes of Chromium and Spatial instruments.
- Consumables revenue increased by 10% in Q3 2024, driven by higher sales in Spatial consumables.
- Services revenue grew by 48% in Q3 2024, reflecting an increase in post-warranty service contracts.
For the nine months ended September 30, 2024, instruments revenue totaled $68.4 million, consumables revenue reached $359.9 million, and services revenue accounted for $17.5 million .
A Deep Dive into 10x Genomics, Inc. (TXG) Profitability
A Deep Dive into 10x Genomics, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ended September 30, 2024, the company reported:
- Gross Profit: $303.5 million
- Gross Margin: 68%
- Operating Loss: $(144.7) million
- Net Loss: $(133.6) million
- Net Loss per Share: $(1.11)
In comparison, for the nine months ended September 30, 2023:
- Gross Profit: $293.5 million
- Gross Margin: 68%
- Operating Loss: $(210.1) million
- Net Loss: $(206.1) million
- Net Loss per Share: $(1.77)
Trends in Profitability Over Time
The following table summarizes the profitability metrics over the last two fiscal years:
| Metrics | 2024 (Nine Months) | 2023 (Nine Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Gross Profit | $303.5 million | $293.5 million | $10.0 million | 3% |
| Operating Loss | $(144.7) million | $(210.1) million | $65.4 million | 31% |
| Net Loss | $(133.6) million | $(206.1) million | $72.5 million | 35% |
Comparison of Profitability Ratios with Industry Averages
Industry averages for similar life sciences technology companies are as follows:
- Gross Margin Average: 70%
- Operating Margin Average: (10%)
- Net Margin Average: (5%)
Compared to these averages, the company’s gross margin is slightly below industry average, while its operating and net margins indicate higher losses relative to peers.
Analysis of Operational Efficiency
The following table displays key operational efficiency metrics:
| Metrics | 2024 (Nine Months) | 2023 (Nine Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Cost of Revenue | $142.2 million | $141.2 million | $1.0 million | 1% |
| Research and Development Expenses | $197.7 million | $205.1 million | $(7.3) million | (4%) |
| Selling, General and Administrative Expenses | $250.5 million | $257.2 million | $(6.7) million | (3%) |
The gross margin remained stable at 68%, while operating expenses decreased significantly, indicating improved cost management strategies.
Debt vs. Equity: How 10x Genomics, Inc. (TXG) Finances Its Growth
Debt vs. Equity: How 10x Genomics, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, the total liabilities of the company stood at $214.99 million compared to $224.1 million as of December 31, 2023. The breakdown of current liabilities includes:
| Liability Type | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Accounts Payable | $26.21 million | $15.74 million |
| Accrued Compensation | $30.08 million | $30.11 million |
| Accrued Expenses | $37.77 million | $56.65 million |
| Deferred Revenue | $17.76 million | $13.15 million |
| Operating Lease Liabilities | $9.42 million | $11.52 million |
The company has no long-term debt, indicating a strategy focused on equity financing rather than leveraging debt.
Debt-to-Equity Ratio
The debt-to-equity ratio as of September 30, 2024, is calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Stockholders' Equity
Using the figures: $214.99 million (total liabilities) / $722.80 million (total stockholders' equity) = 0.30. This ratio is below the industry average, indicating a conservative approach to financing.
Recent Debt Issuances and Credit Ratings
There have been no recent debt issuances, and the company maintains a strong liquidity position with $398.2 million in cash and cash equivalents as of September 30, 2024. The absence of debt reflects positively on the company's credit profile, although specific credit ratings have not been disclosed in the available financial statements.
Balancing Debt Financing and Equity Funding
The company has historically relied on equity funding for growth, evidenced by significant capital raises through the issuance of common stock. For instance, the total additional paid-in capital increased from $2.03 billion in December 2023 to $2.14 billion by September 2024. This increase is primarily due to stock-based compensation and equity awards, reinforcing the company's strategy to incentivize talent while limiting debt exposure.
Investments in research and development, which amounted to $197.73 million for the nine months ended September 30, 2024, demonstrate a focus on innovation funded through equity rather than debt. The approach allows for sustained operational flexibility while minimizing risk associated with interest obligations.
Summary of Financial Position
| Financial Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Liabilities | $214.99 million | $224.10 million |
| Total Stockholders' Equity | $722.80 million | $741.04 million |
| Debt-to-Equity Ratio | 0.30 | N/A |
| Cash and Cash Equivalents | $398.2 million | $359.3 million |
| Research and Development Expenses | $197.73 million | $205.07 million |
Assessing 10x Genomics, Inc. (TXG) Liquidity
Assessing 10x Genomics, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Current Ratio |
|---|---|---|
| 398,159 | 214,990 | 1.85 |
Quick Ratio: The quick ratio for the same period is:
| Cash and Cash Equivalents (in thousands) | Accounts Receivable (in thousands) | Current Liabilities (in thousands) | Quick Ratio |
|---|---|---|---|
| 398,159 | 31,321 | 214,990 | 1.95 |
Analysis of Working Capital Trends
Working capital as of September 30, 2024:
| Working Capital (in thousands) | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Current Assets | 398,159 | 359,284 |
| Current Liabilities | 214,990 | 224,100 |
| Working Capital | 183,169 | 135,184 |
Cash Flow Statements Overview
Operating Cash Flow:
| Period | Net Cash Provided By (Used In) Operating Activities (in thousands) |
|---|---|
| Nine Months Ended September 30, 2024 | 13,412 |
| Nine Months Ended September 30, 2023 | (40,955) |
Investing Cash Flow:
| Period | Net Cash Provided By (Used In) Investing Activities (in thousands) |
|---|---|
| Nine Months Ended September 30, 2024 | 18,961 |
| Nine Months Ended September 30, 2023 | 120,394 |
Financing Cash Flow:
| Period | Net Cash Provided By (Used In) Financing Activities (in thousands) |
|---|---|
| Nine Months Ended September 30, 2024 | 6,397 |
| Nine Months Ended September 30, 2023 | 8,056 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company reported an accumulated deficit of $1.4 billion. Despite generating negative cumulative cash flows from operations since inception, the company maintains cash and cash equivalents totaling $398.2 million, which is expected to cover anticipated cash needs for at least the next 12 months.
Is 10x Genomics, Inc. (TXG) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio
The current price-to-earnings (P/E) ratio for the company is approximately – as the company reported a net loss for the last fiscal year. The net loss for the three months ended September 30, 2024, was $35.8 million, resulting in a net loss per share of $0.30.
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio stands at approximately –. As of September 30, 2024, the total stockholders' equity was $722.8 million with total assets of $937.8 million and total liabilities of $215.0 million.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated as market capitalization plus total debt minus cash and cash equivalents. As of September 30, 2024, the cash and cash equivalents were $398.2 million, and the accumulated deficit was $1.4 billion. The EBITDA for the last twelve months is not directly available due to the net losses.
Stock Price Trends
Over the past 12 months, the stock price has experienced volatility. The stock price as of September 30, 2024, was approximately $6.80. The highest price during this period was around $14.00, while the lowest was approximately $5.50.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, resulting in a dividend yield of 0%. The payout ratio is also 0% as there are no dividends distributed.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a rating of Hold with a target price range between $6.00 and $8.00 per share. The general sentiment reflects caution due to ongoing operating losses and market conditions.
| Valuation Metric | Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | – |
| Price-to-Book (P/B) Ratio | – |
| Enterprise Value (EV) | Calculated based on market cap and liabilities |
| Stock Price (as of September 30, 2024) | $6.80 |
| Highest Stock Price (12 months) | $14.00 |
| Lowest Stock Price (12 months) | $5.50 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
Key Risks Facing 10x Genomics, Inc. (TXG)
Key Risks Facing 10x Genomics, Inc.
Overview of Risks: 10x Genomics faces a variety of internal and external risks that significantly impact its financial health, including industry competition, regulatory changes, and fluctuating market conditions. The competitive landscape in the life sciences technology sector is intense, with multiple companies offering similar products, which can affect pricing and market share.
Industry Competition: The company’s instruments revenue decreased by $16.7 million, or 20%, to $68.4 million for the nine months ended September 30, 2024, compared to the same period in 2023. This decline was primarily attributed to lower sales volumes of Chromium and Spatial instruments.
Regulatory Changes: Changes in regulations affecting the life sciences sector could impose additional compliance costs or limit product offerings. The impact of regulatory scrutiny is ongoing, and any significant changes could adversely affect operational capabilities.
Market Conditions: The overall demand for genomic and biotechnological products can be influenced by broader economic conditions. Recent fluctuations in demand have already shown a negative impact on sales, evidenced by a 1% decrease in overall revenue to $151.7 million for the three months ended September 30, 2024.
Operational Risks:
Operational risks include challenges in scaling technology platforms and introducing new products. The company has reported ongoing losses from operations, with a net loss of $35.8 million for the three months ended September 30, 2024, compared to a net loss of $92.9 million for the same period in 2023.
Financial Risks:
The company has generated negative cumulative cash flows from operations since inception, leading to an accumulated deficit of $1.4 billion as of September 30, 2024. Future capital requirements depend on revenue growth rates and research and development efforts, which could lead to the need for additional funding.
Strategic Risks:
Strategic risks include the potential for unsuccessful acquisitions or investments in technologies that do not yield expected returns. The company anticipates capital expenditures between $15 million and $20 million over the next 12 months. If these investments do not produce the anticipated growth, financial health could be compromised.
Mitigation Strategies:
To mitigate these risks, the company is focused on enhancing its product offerings and maintaining a strong pipeline of research and development projects. In the nine months ended September 30, 2024, total operating expenses decreased by 11% to $448.2 million, reflecting efforts to manage costs effectively. Additionally, the company’s cash and cash equivalents totaled $398.2 million as of September 30, 2024, providing a buffer against immediate financial pressures.
| Risk Factor | Description | Recent Financial Impact |
|---|---|---|
| Industry Competition | Intense competition affecting pricing and market share. | Instruments revenue decreased by $16.7 million, or 20%. |
| Regulatory Changes | Potential for increased compliance costs and limitations on products. | Ongoing impact on operational capabilities. |
| Market Conditions | Broader economic conditions impacting demand for products. | Overall revenue decreased by 1% to $151.7 million. |
| Operational Risks | Challenges in scaling technology and introducing new products. | Net loss of $35.8 million for Q3 2024. |
| Financial Risks | Negative cash flows and significant accumulated deficit. | Accumulated deficit of $1.4 billion as of September 30, 2024. |
| Strategic Risks | Potential unsuccessful acquisitions and investments. | Anticipated capital expenditures of $15 million to $20 million. |
Future Growth Prospects for 10x Genomics, Inc. (TXG)
Future Growth Prospects for 10x Genomics, Inc. (TXG)
Key Growth Drivers
- Product Innovations: The company has launched several new instruments, including the Chromium X Series and the Xenium Analyzer, which enhance capabilities for analyzing biological systems at a high resolution.
- Market Expansions: Expansion into international markets has been significant, with total revenue from the Asia-Pacific region increasing by approximately 8.5% to $75.3 million for the nine months ended September 30, 2024, compared to $73.7 million in the prior year.
- Acquisitions: The company is actively reviewing acquisition opportunities to enhance its technology portfolio, which could significantly impact revenue growth.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total revenue reached $445.8 million, representing a 3% increase from $434.7 million in the same period of 2023. Revenue from consumables grew by 6% to $359.9 million, driven primarily by increased sales of Spatial consumables. In contrast, instruments revenue decreased by 20% to $68.4 million.
Strategic Initiatives or Partnerships
- Collaborations: Strategic partnerships with leading research institutions and pharmaceutical companies are underway to enhance product offerings and market reach.
- Investment in R&D: The company plans to allocate between $15 million and $20 million for capital expenditures over the next year, focusing on research and development to innovate new products.
Competitive Advantages
- Technological Leadership: The company’s proprietary technology platforms allow for unparalleled analysis of biological systems, giving it a competitive edge in the life sciences market.
- Strong Intellectual Property Portfolio: Ongoing efforts to protect and defend its intellectual property enhance its market position and deter competitors.
- Robust Financial Position: As of September 30, 2024, the company reported $398.2 million in cash and cash equivalents, providing a solid foundation for future investments and growth initiatives.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $445.8 million | $434.7 million | 3% |
| Consumables Revenue | $359.9 million | $339.2 million | 6% |
| Instruments Revenue | $68.4 million | $85.1 million | -20% |
| Asia-Pacific Revenue | $75.3 million | $73.7 million | 8.5% |
| Cash and Cash Equivalents | $398.2 million | $314.7 million | 26.5% |
These insights outline the growth opportunities for the company, driven by product innovations, market expansions, and strategic initiatives, positioning it favorably for future revenue growth.
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Article updated on 8 Nov 2024
Resources:
- 10x Genomics, Inc. (TXG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of 10x Genomics, Inc. (TXG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View 10x Genomics, Inc. (TXG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.