Thanks everyone for joining us. My name is Michael Ryskin, and I'm on the BofA Life Science Tools and Diagnostics team. For our next Fireside Chat, we're excited to host 10x Genomics. I'm excited to be host by Serge Saxonov, Chief Executive Officer, and Adam Taich, Chief Financial Officer. Serge, Adam, thanks so much for being here. Thank you. Thank you for having us. It's my pleasure. Yeah, the format will be a Fireside Chat. If you've got a burning question, raise your hand and we'll work it in. Other than that, let's kick things off. Serge, Adam, you guys, you know, recently reported your first quarter. A lot of interesting updates for us. Maybe you could just give us a sort of high-level rundown of how the quarter played out, what you found most exciting, most interesting, and just sort of how it flows through for the rest of the year. Totally, really, really happy with the quarter. Like it was actually quite a, quite a strong performance along multiple dimensions in the quarter. First of all, just like the fundamental mechanics of the business, the key drivers that we have been communicating for the past several quarters performed really well. Specifically, reaction growth in the single-cell business once again showed double-digit growth and in fact, even like, revenue growth. The kind of the pricing declines were more than made up with the volume growth. We also showed double-digit once again growth in spatial consumables revenue. Again, this is several quarters running, really kind of strong indications from both parts of the business and the underlying dynamics of demand. We also showed really nice improvements to our operating profile as well. Like we had focused a lot on cost structure control going back for some time, and great job by the team in delivering that and increasing our cash position, our balance sheet. The biggest news of the quarter by far was the launch of our new platform, Atera. I've said that on the call last week. I said that when we first launched the platform three, now three weeks ago or so. This is the biggest launch in our company's history. Really, really excited. We fundamentally see it reshaping the industry and really opening up spatial in a huge way. It's great to finally kind of open up the platform to the world, and also, kind of get the hear from customers, and the reception has been really phenomenal as well. Cool. Maybe let's dive right into that then. Yeah, we have gotten a lot of questions on it, and it is stirring a lot of interest. Can you tell me about sort of the background of how the platform came about? You know, you've been developing for some time, but you also have been in spatial with Xenium, Visium CytAssist for a while. Just sort of the development path for that. Yeah. Take us into the history behind the box. Yeah. I mean, it actually goes back pretty far if you think about all the different threads that came together and all the different inventions and developments. In some ways it goes back to almost the very beginning of the company, coming from all the different sort of technology bits from different platforms. You know, the formal program kicked off just about right around the time that we launched the Xenium platform. It really goes back quite a way. The way we look at it is, again, we like to approach problems from first principles. We always had strong conviction that spatial biology is a really fundamental direction, that's going to be incredibly enabling both for science, translation, ultimately clinical applications. This is how we need to measure biology. We also knew kind of what from first principles, what the solution would need to be. Now, we knew the technology wasn't there back, you know, five years or so ago, but we knew what we needed to get to. We've, we've been inventing and developing across multiple areas, multiple fields to put it together. Over also now, having been in the spatial biology world for quite some number of years, we've had a lot of input and feedback from our customers in terms of what was constraining them, what was keeping some people on the sidelines relative to spatial. There's a number of constraints that have been as successful as we have been with our platforms, first with Visium and then with Xenium. There's clearly fundamental throttles to that market, and we've set out to address every single one of them. When you look at kind of the spec list for Atera, it really kind of breaks through those constraints in a pretty massive way, and that's why you see this kind of like reaction. No one really quite expected what we were going to announce. I mean, let's go through that. Maybe I don't know if you wanna compare it to Xenium or some of the other platforms out there? Right. Right. Like what are the advantages that Atera brings and why do you think that solves those key bottlenecks that limit or limitations of prior systems? Yeah. Yeah. One big thing is like people you know, like spatial data, but the systems that have been around, including Xenium, are still constrained on throughput. There's a massive increase in throughput that Atera delivers relative to Xenium in terms of the number of, whether you're looking at the number of samples it can run or the amount of tissue area it can analyze. It also increases the plex level, so how many genes you can measure. That has been a constraint kind of in a few different ways. Generally, people want to be able to, like if you're doing unbiased discovery, you want to be able to measure as much as you can, the full transcriptome. The Xenium, for example, relies on targeted panels. You have to kind of, it limits sort of unbiased discovery, the discovery that you could do. Also, when people care about their specific genes, it oftentimes becomes quite a project to zero in on the precise panel you want to run that contains your genes. That was always probably the biggest throttler in terms of people scaling up the Xenium experiments. Now, with the whole transcriptome capability, you don't have to choose, you kind of, you just go. That relieves another big bottleneck. We delivered high throughput whole transcriptome, now we also deliver it in conjunction with really high sensitivity, something that no one had thought possible before. You know, in all the previous iterations of all these technologies, there are always trade-offs. If you try to push on, for example, on plex level, you trade off throughput and you trade off sensitivity. In this case, we actually increased sensitivity in a massive way, so we pushed the Pareto frontier really far. That is also really important because it kind of brings in people who've been on the sidelines because they were not sure about spatial biology. When you go and compare it to existing technologies like FISH and so on, they don't seem to see the genes that they expect to see. Now with the sensitivity, you see these, you know, these cells with just massive numbers of transcripts lighting up, and it resonates with the biology they expect to see. There's, you know, a number of additional features. Probably the most notable of these is ability to work with off-the-shelf standard glass slides, which feels like a minor detail, but for a lot of people who are looking to do large-scale translational studies and kind of dip into existing biobank cohorts, this is hugely enabling. So kind of a number of these vectors that are really groundbreaking. Also, the fact that it's all done in a single platform and technology where you get all of those benefits at once. Now let's talk about how that impacts the model and the business, you know, later this year and into the future. You talked about, you know, maybe some shipments in Q3, but not a lot. You know, let's say heavily biased towards Q4. You know, 40 in the second half of the year. Again, biased towards the latter part of the year. Is that, you know, reflective of orders you've already received? Is that things you have in hand? I know that, you know, there were beta testers and sort of early access users under NDAs. Just sort of talk about how you built that funnel and what gives you confidence in that in the next six months. Just, to be clear, the platform has only been within the knowledge base of our customers for a very, very short time. Even the people with whom we've interacted in the early access manner; it's a relatively recent interaction. Despite that, the amount of interest has been tremendous, the order flow is incredibly encouraging right out of the gate, not really anything we've seen before. When we look to the rest of the year, it's really, it's the supply constraint, what's going to determine the number, the 40 number as we go into 2027 as well. We are working hard to scale production, but, you know, we wanna be rigorous and deliberate around that. That from what we're seeing with the order flow, that's supply is gonna be the constraint. Okay. Adam, maybe on that point, anything you'd say in terms of investments to expand capacity? What are you targeting, let's say, a year or a year and a half out in terms of quarterly production capacity, annual production capacity, anything like that? I guess we'd start with it from an investment perspective, not a significant investment relative to sort of where we are in manufacturing capacities. We're gonna be leveraging a lot of the same capabilities and experience that we built, you know, around Xenium in particular. We'll be sort of bringing that up, so we've got some, you know, dual capability in certain respects, both in Pleasanton, where our headquarters is, as well as our manufacturing facility in Singapore. Still working through exactly where, you know, we'll want supply, but we're already procuring ahead, particularly on any long, you know, lead time type items, ensuring that we're starting to procure for the first half of next year. We feel really confident, as we've been saying, around the 40 for this year and starting to buy ahead materials and start to work through production planning for next year. The other thing I would just say, just as it was part of a thing embedded also in your question, when you think about the margin profile of this, the platform in totality will be margin accretive to where we are, you know, as 10x as things start to scale. What I mean by that is, you know, in Q4, when it's going to be a very heavy instrument quarter, fairly similar gross margins for Xenium instruments to where we've been, or rather for Atera with where we've been for Xenium. Lower than the corporate average for sure. On the consumables side, consumables margins, which was fundamentally part of the design, you know, that Serge mentioned, we started, you know, a couple of years back, will be, you know, kind of in that same range where Chromium is. You know, as the platform begins to scale, as we get that installed base and start to work through and get, you know, high utilization, and those are certainly the customers that we're targeting with those first 40, will be customers that are gonna plug them in and start running them. The margin sort of mix over time should actually get better than where our corporate averages have been. That's part of the design here. In terms of the order funnel, sales funnel, will you disclose anything in terms of orders? I know you typically don't, given this is such a big launch, would you give us, like, an annual order number or anything like that, just to give us a sense of where this could go? What are your thoughts on that as, like, leading indicators? I would hesitate to provide specific numbers around the orders because we've not done that. We've not done that before. It's not our policy. You know, it is reasonable to expect some directional kind of indication of the velocity of demand where I understand that people would want to know. Fair enough. Okay. All right. In terms of at least those first 40 later this year, I mean, is it reasonable to think, just thinking about who's ordering this, where is that interest highest? Like, are all 40 of those Xenium users already? Is there any sort of, like, new to spatial or maybe some competing spatial customers there? Just sort of, like, how does this stack versus what's on the market already? Yeah. There's definitely interest from people who are new to spatial, at the very least new to 10x spatial. No question around that. Quite intense interest because, like I said, they're sort of like, now they can step off from the sidelines and, like, this technology delivers them what they're looking to do, and they can go to at scale, like run these studies, cohorts, that they have access to, but there has not been yet technology to really kind of go to town at high throughput. Definitely that. Like, in terms of our priority, though, we do want to place these instruments with people who will be able to run them at scale right from the get-go, right? That biases things toward people who are currently substantial Xenium users and also those who have kind of centralized players, like service providers and core labs who can serve kind of the rest of demand out there as quickly as possible. That is kind of our focus in the first place. That does bias us somewhat toward existing Xenium users. You know, we're also looking for for customers who will naturally kind of become evangelizers for the system and drive further market demand and validation for others, right? Those are the considerations. I mean, it's a good spot we're in because we have sort of the luxury of prioritizing people. Again, the demand is really strong. Then, you know, as we proceed, you know, we'll kind of expand into more customers that are new. Again, it's going to be a function as well, still in the early days, how quickly they'll be able to scale up and hit the ground running. I think there's huge potential for new influx. Where are the interests coming from, I guess, is sort of, it's hard to point any segments? It is kind of across the board, from what we've seen. Okay. I mean, maybe, on the point you're talking about in terms of scaling utilization, scaling throughput, you know, you kind of gave us some broad strokes for calculating, you know, max theoretical pull through on the machine. We always kind of have this debate even going back to the Chromium days of, like, what is gonna be, you know, average pull through on a box. Yeah like, once the install base gets large enough. Any thoughts on how, you know, I don't think you've obviously guided to it yet, but just what are your thoughts on how utilization will scale on Atera as it compares to how it scaled for Chromium, how it scaled for Xenium? Could it be, like, a faster ramp, slower ramp, just given you already have a market there and, like you said, all the advantage of the platform? Yeah, like Xenium, sorry, Atera, we actually built it from the beginning to be a somewhat more centralized system than any of the other systems we have had before. We believe it is actually, like, the right approach to the market, to the current market and the way the market is gonna be going forward. I don't think we're going back to kind of the time of, you know, there was a run that, you know, for 10 years or so where everyone's getting their instruments in every single lab. That's just not going to be the case going forward. I think a centralized, a somewhat more centralized model makes the most sense, and that's what Atera is purpose-built for. We again, and again, I like kind of broad strokes of our strategy, it is to put this as much as possible in places that will be able to enable others and will kind of generate, will be able to satisfy that sort of demand. From the early signals we're getting, what we're seeing is consistent with that. The system itself obviously has a substantially higher ceiling in terms of pull through per instrument compared to Xenium. We do expect it to have a materially higher utilization rate pretty quickly out of the gate. Okay. The last point I kind of want to discuss on Atera, is that impact on Xenium, maybe even on Visium and CytAssist, both on the instruments and, but I would also argue on the consumables. You know, if you go back to the first quarter, your spatial instruments number was a little bit lighter than we would've expected, and I think you called out a number of times you believe it was tied to maybe a pause in the market, whatever you wanna call it, of customers that knew Atera was coming. Right didn't go through with the Xenium purchase. How do you think about that playing out through the rest of the year? In our models, you know, we're adding the 40 boxes for Atera. In Q3 and mostly in Q4. We kind of were debating this last week on, okay, what are we doing with our Xenium placements over the course of the year? How much are we trimming it? We had an even bigger debate with investors of what do we do with Xenium consumables, right? You know. I guess, I don't know if you wanna comment on that specifically or maybe another way of asking would be, let's say, whatever, three years from now, five years from now, what% of your spatial revenue is Atera versus Xenium? Is it zero for Xenium? Is it still 10%, 30%? I mean, we're just making up numbers, anything directionally you can point us to. Yeah. Like, maybe I'll start with that last question first, and then we kind of work backwards to kind of the near term. In the, you know, in the long run, I do think that things will just consolidate onto Atera. That's what, that's what we expect and, as Adam said, there's a lot of benefits to Atera in terms of, you know, to the customer, to ours as a business, you know, whether it's gross margin profile, whether it's the speed of turnaround, the scaling. It'll just, it'll be benefits all around. Yes, we do expect that in the long run things will consolidate there. I think, you know, in the short run though, you're always surprised by how sticky things are. You know, people have their ongoing projects. They have comfort with their existing systems, the workflows, the data, the grants, the projects, the collaborations, all of that. For, you know, for that reason, we do stick. We have expected and we're seeing, you know, there's continuing momentum with both Visium and Xenium in the marketplace. You know, to some extent, both applies to consumables, especially applies to consumables, somewhat applies to Xenium, you know, like instruments that have been in the funnel for a long time. These are long cycle sales cycle items. They are materializing now, and it's not like customers are gonna pull back now to go get back in line for Atera and wait another year or more. So, we do see, you know, much reduced number, but we see continued number for Xeniums. You know, we again, we saw that evidence of that dynamic in Q1, as you mentioned. You have to remember, we announced that something was coming. Yeah Kind of in the middle of the quarter, the instrument purchases are always kind of back end loaded, and so much of that business got delayed. Most people expected some kind of a new, maybe new Xenium version. That was in the air. We already have kind of a pretty strong kind of predicate to base our projections going forward, and our projections are actually fairly consistent with what we had thought coming into this year. Like the, you know, our expectations, this is something we thought about for a long time. Again, like, going back to your early question, we have been planning Atera for a long time, and we've been planning around this specific transition period for a long time as well. Our initial guide coming into the year very much incorporated all this thinking. What we're seeing so far, what we have seen so far is very, very much in concurrence with our initial guide that we gave. Now we can kind of provide a bit more explanation for the quarterization that we have been expecting. In general, it's trending all appropriately. Again, there's a step down that we anticipate in Q2 and Q3, kind of similar amount in Q2 and Q3, and then, obviously, like, a substantial kick-up from the placements. Oh, sure. Of Atera's going forward, all within sort of the general quarterization we see across the year like other years as well. It all kind of fits, and we feel very comfortable where we are with the guide, especially after, like, what we see in Q1. I mean, Adam, maybe the last one for you on this then we'll move on to other topics. Kind of putting all of that commentary together that Serge just laid out, you know, fair to say that, you know, in a ballpark, Atera kind of offsets any Xenium slowdown for the next couple of quarters, and then maybe, I don't know if it's a 2027 dynamic or 2028 dynamic as that consumables ramps that could really take off? That's exactly right, Mike. I mean, I think we, I think the Atera sort of Q4 dynamic, and I would just echo what Serge just said. I mean, we had a strong Q1, anticipate Q2 will be, you know, low single-digit, you know, QOQ sort of reduction from a dollars perspective. From a dollars perspective, Q3 should look fairly like Q2. You know, as you sort of build that out and model that even at the midpoint, you know, you end up kind of in the mid-teens from Q3 to Q4 in terms of that step-up, which frankly is somewhere around, it's probably 17%, 18%. I'm just trying to do midpoint math, but, you know, that's actually not dramatically different than what we've actually done in the past without a product launch like Atera. Again, not suggesting any, you know, nothing's easy. Yeah. At the same time, we feel really confident about the guide. As Serge mentioned, we certainly have known for quite some time when we were launching Atera. We determined we were gonna do it at AACR like, I don't know, I mean, a long, long time ago. We also made a deliberate decision to reinstate an annual guide. All of this was contemplated in there to reinstate an annual guide, give folks the parameters, double-digit single cell reactions, double-digit spatial consumables revenue. You know, we did mention at the onset that we thought, you know, back when we gave the guide that, you know, the CapEx market, it's not as if it's, you know, tremendously recovered, but all of this sort of still fits into, you know, that calculus that we provided back when we gave the guide in February. Okay. Okay. Yeah, just wanna make sure we're thinking through that like baton handoff appropriately. Yeah. Okay. All right. Still plenty to cover. Let's just, you know, you just mentioned Chromium, so let's touch on that a little bit obviously. Serge, you called out the reaction volume in the first quarter, you know, holding in very, very healthily. You're seeing revenues start to tick back up. Can you talk a little bit more about that, you know, price volume mix conversion? That's been a debate for a while now, and I think, you know, over a year. Where are we in that transition process? Yeah. Like, no, good question. Just stepping back a little bit, right, going back to maybe a couple of years now, there was a big debate whether a single cell, there was any sort of market left there, just in general in terms of usage. In fact, there was sort of a thesis that was going down going forward. We, you know, our strong belief was that there's tons and tons of market demand. In fact, there's way more volume than people were appreciating. Our first order of business was to show the, like, increase in volume consistently. We've done this now for, like, quite a number of quarters running double-digit volume growth in single-cell, despite the fact that the end markets have been just, you know, dropping out from under us, especially, you know, going back to the first half of last year with academic kind of disruption. Then the next order of business has been to show that the pricing declines can at some point start catching up toward volume increases, or volume increases can catch up to the pricing declines. You know, the last couple of quarters are showing that we're kind of getting to that ballpark, right? The, the next sort of, the next goal now is to get to the point where pricing does equilibrate and the volume growth, which we expect to continue, translates into now into revenue growth. I think we're getting closer to that point as we think especially toward 2027. I think that's that puts us up in a really good position going forward. Do you think, I don't know if there's any way for you to sort of even back this out or demonstrate this, but is the sustained growth you're seeing as the volumes you're seeing, is that sort of from the same projects customers have been running before, same old type of workflow, or is any of this new, you know, the Human Cell Atlas initiative, any things like that, is that the incremental volume that's driving it? I don't know if there's a way to sort of like separate same project store growth type of dynamic or versus how much is incremental, is like driven by, large data initiatives, you know, maybe with AI angle on it or sort of how that's factoring in yet? Yeah. unquestionably, like, there's the big projects and the AI projects are incremental. That would not have happened at like previous price points. Sure with previous generations of products. That is definitely incremental, and it's clearly being enabled by this lower price point. Okay. There's also a trend in people kind of running larger studies now, especially with Apex. We expect that to continue, where like the fundamental dynamic is kind of going from where a single cell is sort of an esoteric technique where you pick and choose your samples and run a few at a time, where you flip it to where the entire cohort runs it. I think we're in that transition where people are kind of getting into that mind space, and really Flex, and especially Apex, has been sort of the game changer there. We're hearing that from customers, like now this changes the way we think about things, like pretty fundamental. Okay. I mean, anything you can say in terms of like where you are in some of those programs kicking off? Are any of them sort of at steady state yet? Is it still sort of in early testing, early development in terms of like implementing, Flex? I think a lot of the stuff, well, are you asking about the AI programs, the large-scale projects? Yeah. Yeah. Yeah. I mean, look, there's definitely very large projects that are running, that have been run. There's like these big AI models that are getting published. All of that is like very much early days. Everyone, every single model that's out there, the conclusion at the end of it is like, okay, the next step is we need 10 times as much data, and then we'll see, we'll really see value come out of that. I think everything that we're seeing is in the sort of early stage of that exponential. If AI broadly kind of speaking has taught us anything over the last 10 years, is this insatiable hunger for data. Right, the scaling, and the fact that scaling just delivers more and more value, the more scaling. From where you are now, Chromium, Flex, does that give your customers enough? Are they coming back already, like, "No, we need even more. You gotta give us," no pun intended, "10X more, 10X more data, 10X more samples? Yeah, there's always that kind of feedback. We do see Apex at this point is still very kind of early. Like, it is very enabling to the next order of magnitude for what people need. When you start kind of going beyond that to really huge numbers, this is where actually, kind of 2 logs of scaling, this is where Atera actually starts becoming compelling because, yeah, you can pump, like, a lot of cells through that. Again, I don't think this is, like, demand that's currently in single cell, but kind of as we think about the future and, like, really massive new projects coming in, I can see that some of them will start landing on Atera. I mean, whenever we talk about some of these mega projects, there's always a component of it where, you know, there's cost beyond 10x cost, right? There's the sequencing cost. There's a lot of the backend work. There's always that trade-off of, you know, you're getting cheaper and then someone, the other end's getting cheaper, right? Like, which one is outpacing the other? Is that coming up more? Is that a bottleneck at all, the other parts of the ecosystem outside of Chromium or is that? Well, like, I mean, that's the beautiful thing, the really fun thing all of a sudden in this world where with both Ultima and Roche now, the price per read has dropped like hugely. Yeah, it is definitely a huge enabler now. Again, back to that question, would these projects have been possible before these massive AI modeling? They would've been constrained by the cost of sequencing if we went back, you know, a few years ago, and they're now absolutely possible. I mean, this is a massive change in the ecosystem, which is something we absolutely love. Yeah. Like $80-$100 a genome, so far, it's not really a problem, sequencing cost? No. If you think about it with Roche, and, you know, Ultima is also like really accessible. The cost for per read is actually lower, so the whole genome price does not represent the price because you can use simplex reads. Yes. Yep. It actually becomes even cheaper than the whole genome price would indicate. Yeah. Absolutely. Yeah. I mean, these are massive drops, so yeah. Okay. Okay. Maybe a high-level one that I'll sort of rotate to from there. I don't know if you've got any closing remarks you wanna make. You know, when we think about 10x over the many years we've covered you, certainly very innovative. You know, starting with Chromium, you can think about how the portfolio has evolved, there's always been new and greater products right around the corner. You've got Atera. What's next, right? Is there, you know How much further do you wanna expand the market opportunity? What are the other areas you're thinking of? Obviously now let's do Atera launch first, just sort of like what else do you have in your back pocket or what are you looking at? Yeah. There's a lot of things we're excited about. I do wanna, you know, like caution, Atera is a huge launch, and we've already laid out the roadmap on top of Atera that's going to be coming out in next year and beyond. There's a lot of more capabilities that we're looking forward to building there. You know, we mentioned like full end-to-end automation, for example. That instrument is really well suited for that. We mentioned proteins, multi-omics in general are just measuring proteins, which is very exciting. I don't think ever anyone has quite got proteins right yet, and I think there's a huge opportunity there, and we're very excited about that. There's additional applications around kind of in situ sequencing, base by base kind of sequencing, which will also open up new applications. There's all kinds of really exciting areas now you could do with software and computation and AI that is also enabling and kind of is going to be relieving the major bottleneck that has been in place for all of our platforms, right? All our platforms generate, by definition to meta biology, a lot of data, lots large scale data. The bottleneck historically has been the ability to analyze and get to insights. Now we have the means to very efficiently for all of our customers to get their insights. That is also something that's been absolutely game changing that we see internally and that is going to be very enabling to our customers. As far as like product development and R&D, plenty ahead of us, and just based on our current platforms. I do also wanna make, you know, kind of go back to a theme that we started earlier this year. We have now also advanced over the course of last year, and kind of looking to the future, the potential of clinical diagnostics using these technologies has also come into much sharper focus. This is a function of a few things. Sure. Certainly, progress on the technologies, especially now you see what Atera is able to provide, which, you know, we weren't obviously talking about that at the very beginning of the year but now shows scale. Like we're at the point where it can really generate clinical evidence at scale with these both like on a Chromium and the spatial side. There's increasing amount of evidence from just scientific literature about the fact that the use of these biomarkers, that they affect progression of disease and therapy success. The world is kind of like rapidly moving in this direction of more and more therapies and increasing need of the right kinds of diagnostics to guide that therapy selection. We see huge opportunities in that, and we're leaning in, very intensely and are very excited about, these efforts. You know, it's not necessarily a story quite yet, in terms of revenue for, you know, for the near term, as we think about, you know, sort of the future, I think there's potential for really massive businesses to grow out of that. Okay. Plenty to stay tuned for. Really exciting. All right. With that, we're gonna have to end it. Thanks so much. Thanks everyone for joining us. Serge, Adam, really appreciate it. Thanks. Thank you. Thank you.