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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-Q
_____________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 001-39035

txg-20220630_g1.jpg
10x Genomics, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware45-5614458
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
6230 Stoneridge Mall Road
Pleasanton, California
94588
(Address of principle executive offices)(Zip Code)
(925) 401-7300
(Registrant’s telephone number, including area code)
_____________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol
Name of each exchange
on which registered
Class A common stock, par value $0.00001 per shareTXGThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  ☒
As of July 29, 2022, the registrant had 95,046,366 shares of Class A common stock, $0.00001 par value per share, outstanding and 18,867,255 shares of Class B common stock, $0.00001 par value per share, outstanding.


Table of Contents


10x Genomics, Inc.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Quarterly Report, including statements concerning our plans, objectives, goals, beliefs, business strategies, results of operations, financial position, sufficiency of our capital resources and business outlook, future events, business conditions, costs and expenses that we expect to incur or to save in connection with our planned workforce reduction, uncertainties related to the global COVID-19 pandemic and the impact of our and our customers' and suppliers' responses to it, business trends and other information, may be forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or variations of them or similar terminology. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot provide any assurance that these expectations will prove to be correct and actual results may vary materially from what is expressed in or indicated by the forward-looking statement. Such statements reflect the current views of our management with respect to our business, results of operations and future financial performance.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” in this Quarterly Report and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”). Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. For a more detailed discussion of the risks, uncertainties and other factors that could cause actual results to differ, please refer to the “Risk Factors” in our Annual Report and this Quarterly Report, as such risk factors may be updated from time to time in our periodic filings with the U.S. Securities and Exchange Commission ("SEC"). Our periodic filings are accessible on the SEC’s website at www.sec.gov.
The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or occur and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. Further, as the COVID-19 pandemic is continuously evolving, our forward-looking statements may not accurately or fully reflect the potential impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
Unless otherwise stated or the context otherwise indicates, references to “we,” “us,” “our,” “the Company,” “10x” and similar references refer to 10x Genomics, Inc. and its subsidiaries.
1

Channels for Disclosure of Information
Investors and others should note that we may announce material information to the public through filings with the SEC, our website (https://www.10xGenomics.com), press releases, public conference calls, public webcasts and our social media accounts, (https://twitter.com/10xGenomics, https://www.facebook.com/10xGenomics and
https://www.linkedin.com/company/10xgenomics). We use these channels to communicate with our customers and the public about the Company, our products, our services and other matters. We encourage our investors, the media and others to review the information disclosed through such channels as such information could be deemed to be material information. The information on such channels, including on our website and our social media accounts, is not incorporated by reference in this Quarterly Report and shall not be deemed to be incorporated by reference into any other filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing. Please note that this list of disclosure channels may be updated from time to time.
2

10x Genomics, Inc.
PART I—FINANCIAL INFORMATION
Item 1.    Financial Statements.
10x Genomics, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 30,
2022
December 31,
2021
(Unaudited)(Note 1)
Assets
Current assets:
Cash and cash equivalents$274,187 $587,447 
Marketable securities225,546  
Restricted cash508 1,028 
Accounts receivable, net76,204 85,254 
Inventory70,646 59,966 
Prepaid expenses and other current assets19,141 13,896 
Total current assets666,232 747,591 
Property and equipment, net223,001 169,492 
Restricted cash7,095 7,598 
Operating lease right-of-use assets73,425 60,918 
Goodwill4,511 4,511 
Intangible assets, net24,128 25,397 
Other noncurrent assets3,199 3,319 
Total assets$1,001,591 $1,018,826 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$26,731 $17,351 
Accrued compensation and related benefits23,505 31,626 
Accrued expenses and other current liabilities53,222 50,909 
Deferred revenue6,473 5,340 
Operating lease liabilities7,977 5,131 
Total current liabilities117,908 110,357 
Accrued license fee, noncurrent 5,814 
Operating lease liabilities, noncurrent91,040 76,847 
Other noncurrent liabilities9,127 8,240 
Total liabilities218,075 201,258 
Commitments and contingencies (Note 4)


Stockholders’ equity:
Preferred stock  
Common stock2 2 
Additional paid-in capital1,757,671 1,680,865 
Accumulated deficit(970,192)(863,321)
Accumulated other comprehensive income (loss)(3,965)22 
Total stockholders’ equity783,516 817,568 
Total liabilities and stockholders’ equity$1,001,591 $1,018,826 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

10x Genomics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Revenue$114,609 $115,842 $229,105 $221,663 
Cost of revenue27,704 4,915 53,182 21,975 
Gross profit86,905 110,927 175,923 199,688 
Operating expenses:
Research and development70,685 53,402 134,763 95,285 
Selling, general and administrative79,337 68,703 146,012 125,607 
Accrued contingent liabilities (850) (660)
Total operating expenses150,022 121,255 280,775 220,232 
Loss from operations(63,117)(10,328)(104,852)(20,544)
Other income (expense):
Interest income1,238 58 1,807 108 
Interest expense(109)(209)(237)(430)
Other (expense) income, net(1,843)521 (2,243)(208)
Total other (expense) income(714)370 (673)(530)
Loss before provision for income taxes(63,831)(9,958)(105,525)(21,074)
Provision for income taxes627 1,094 1,346 1,529 
Net loss$(64,458)$(11,052)$(106,871)$(22,603)
Net loss per share, basic and diluted$(0.57)$(0.10)$(0.94)$(0.21)
Weighted-average shares of common stock used in computing net loss per share, basic and diluted113,574,757 109,866,294 113,272,158 109,293,342 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

10x Genomics, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(In thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Net loss$(64,458)$(11,052)$(106,871)$(22,603)
Other comprehensive income (loss), net of tax:
Unrealized losses on available-for-sale marketable securities(1,326) (3,729) 
Foreign currency translation adjustment(196)10 (258)108 
Other comprehensive income (loss), net of tax(1,522)10 (3,987)108 
Comprehensive loss$(65,980)$(11,042)$(110,858)$(22,495)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

10x Genomics, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share data)
Common StockAdditional Paid-in
Capital
Accumulated
Deficit
Accumulated
Other Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesAmount
Balance as of December 31, 2021112,514,977 $2 $1,680,865 $(863,321)$22 $817,568 
Issuance of Class A common stock related to equity awards761,373 — 7,826 — — 7,826 
Vesting of shares subject to repurchase, including early exercised options— — 32 — — 32 
Stock-based compensation— — 26,137 — — 26,137 
Net loss— — — (42,413)— (42,413)
Other comprehensive loss— — — — (2,465)(2,465)
Balance as of March 31, 2022113,276,350 2 1,714,860 (905,734)(2,443)806,685 
Issuance of Class A common stock related to equity awards610,447 — 6,360 — — 6,360 
Vesting of shares subject to repurchase, including early exercised options— — 32 — — 32 
Stock-based compensation— — 36,419 — — 36,419 
Net loss— — — (64,458)— (64,458)
Other comprehensive loss— — — (1,522)(1,522)
Balance as of June 30, 2022113,886,797 $2 $1,757,671 $(970,192)$(3,965)$783,516 
Common StockAdditional Paid-in
Capital
Accumulated
Deficit
Accumulated
Other Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesAmount
Balance as of December 31, 2020108,485,909 $2 $1,544,218 $(805,098)$(50)$739,072 
Issuance of Class A common stock related to equity awards1,102,618 — 8,546 — — 8,546 
Vesting of shares subject to repurchase, including early exercised options— — 42 — — 42 
Stock-based compensation— — 16,253 — — 16,253 
Net loss— — — (11,551)— (11,551)
Other comprehensive income— — — — 98 98 
Balance as of March 31, 2021109,588,527 2 1,569,059 (816,649)48 752,460 
Issuance of Class A common stock related to equity awards1,151,392 — 16,194 — — 16,194 
Vesting of shares subject to repurchase, including early exercised options— — 42 — — 42 
Stock-based compensation— — 26,932 — — 26,932 
Net loss— — — (11,052)— (11,052)
Other comprehensive income— — — — 10 10 
Balance as of June 30, 2021110,739,919 $2 $1,612,227 $(827,701)$58 $784,586 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

10x Genomics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended June 30,
20222021
Operating activities:
Net loss$(106,871)$(22,603)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization12,691 9,641 
Stock-based compensation expense62,360 43,108 
Loss on disposal of property and equipment5 66 
Amortization of premium and accretion of discount on marketable securities, net455  
Amortization of right-of-use assets3,728 4,014 
Changes in operating assets and liabilities:
Accounts receivable9,025 (7,824)
Inventory(11,101)(14,215)
Prepaid expenses and other current assets(5,348)(1,070)
Other noncurrent assets115 217 
Accounts payable10,262 9,711 
Accrued compensation and other related benefits(8,007)5,730 
Deferred revenue1,667 952 
Accrued contingent liabilities (14,676)
Accrued expenses and other current liabilities(4,922)(6,530)
Operating lease liability(2,181)(3,170)
Other noncurrent liabilities357 (4,313)
Net cash used in operating activities(37,765)(962)
Investing activities:
Acquisition of business, net of cash acquired (5,451)
Purchases of property and equipment(55,355)(53,433)
Purchase of marketable securities(271,547) 
Proceeds from sales of marketable securities32,693  
Proceeds from maturities of marketable securities9,124  
Net cash used in investing activities(285,085)(58,884)
Financing activities:
Payments on financing arrangement(5,409)(5,028)
Issuance of common stock from exercise of stock options and employee stock purchase plan purchases14,186 24,739 
Net cash provided by financing activities8,777 19,711 
Effect of exchange rates on changes in cash, cash equivalents, and restricted cash(210)199 
Net decrease in cash, cash equivalents, and restricted cash(314,283)(39,936)
Cash, cash equivalents, and restricted cash at beginning of period596,073 688,644 
Cash, cash equivalents, and restricted cash at end of period$281,790 $648,708 
Supplemental disclosures of cash flow information:
Cash paid for interest$841 $1,222 
Cash paid for taxes$3,319 $7,838 
Noncash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities$26,679 $7,516 
Right-of-use assets obtained in exchange for new operating lease liabilities$16,562 $11,267 
Contingent consideration payable from business acquisition$1,500 $1,523 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
o
1.    Description of Business and Basis of Presentation
Organization and Description of Business
10x Genomics, Inc. (the “Company”) is a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biological systems at resolution and scale that matches the complexity of biology. The Company’s integrated solutions include the Company’s Chromium Controller, Chromium Connect and Chromium X Series instruments, which the Company refers to as “Chromium instruments,” the Company's Visium CytAssist instrument and the Company’s proprietary microfluidic chips, slides, reagents and other consumables for the Company's Chromium and Visium solutions, which the Company refers to as “consumables.” The Company bundles its software with these products to guide customers through the workflow, from sample preparation through analysis and visualization. The Company was incorporated in the state of Delaware in July 2012 and began commercial and manufacturing operations and selling its instruments and consumables in 2015. The Company is headquartered in Pleasanton, California and has wholly-owned subsidiaries in Asia, Europe and North America.
Basis of Presentation
The accompanying condensed consolidated financial statements, which include the Company’s accounts and the accounts of its wholly-owned subsidiaries, are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The condensed consolidated balance sheets at December 31, 2021 have been derived from the audited consolidated financial statements of the Company at that date. Certain information and footnote disclosures typically included in the Company’s audited consolidated financial statements have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive loss and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated for any future annual or interim period. All intercompany transactions and balances have been eliminated. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates.
The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2021 included in the Company's Annual Report on Form 10-K filed with the SEC on February 18, 2022 (our "Annual Report").
2.    Summary of Significant Accounting Policies
There were no material changes in the Company's significant accounting policies during the three and six months ended June 30, 2022, except as set forth below. See Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included in the Company's Annual Report, for information regarding the Company's significant accounting policies.
Marketable Securities
The Company designates investments in debt securities as available-for-sale. Available-for-sale debt securities with original maturities of three months or less from the date of purchase are classified within cash and cash equivalents. Available-for-sale debt securities with original maturities longer than three months are available to fund current operations and are classified as marketable securities, within current assets on the balance sheet. Available-for-sale debt securities are reported at fair value with the related unrealized gains and losses included in "Accumulated other comprehensive income (loss)," a component of stockholders’ equity, net of tax. Realized gains (losses) on the sale of marketable securities are determined using the specific-identification method and recorded in "Other (expense) income, net" in the Consolidated Statements of Operations.
The available-for-sale debt securities are subject to a periodic impairment review. For investments in an unrealized loss position, the Company determines whether a credit loss exists by considering information about the collectability of the instrument, current market conditions, and reasonable and supportable forecasts of economic conditions. The Company recognizes an allowance for credit losses, up to the amount of the unrealized loss when appropriate, and writes down the amortized cost basis of the investment if it is more likely than not that the Company will be required or will intend to sell the
8

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
investment before recovery of its amortized cost basis. Allowances for credit losses and write-downs are recognized in “Other (expense) income, net,” and unrealized losses not related to credit losses are recognized in “Accumulated other comprehensive income (loss)”. There are no allowances for credit losses for the periods presented. As of June 30, 2022, the gross unrealized losses on available-for-sale securities are related to market interest rate changes and not attributable to credit.
Fair Value of Financial Instruments
Cash and cash equivalents are comprised of money market funds and cash which are classified as Level 1 in the fair value hierarchy. Assets recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2 - Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and
Level 3 - Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.
The Company’s financial instruments consist of Level 1 and Level 2 assets. Where quoted prices are available in an active market, securities are classified as Level 1. Money market funds are classified as Level 1. Level 2 assets consist primarily of corporate bonds, asset backed securities, commercial paper, U.S. Government Treasury and agency securities, and debt securities in government-sponsored entities based upon quoted market prices for similar movements in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes and reference data.
Revenue Recognition
The Company generates revenue from sales of products and services, and its products consist of instruments and consumables. Revenue from product sales is recognized when control of the product is transferred, which is generally upon shipment to the customer. Instrument service agreements, which relate to extended warranties, are typically entered into for one-year terms, following the expiration of the standard one-year warranty period. Revenue for extended warranties is recognized ratably over the term of the extended warranty period as a stand ready performance obligation. Revenue is recorded net of discounts, distributor commissions and sales taxes collected on behalf of governmental authorities. Customers are invoiced generally upon shipment, or upon order for services, and payment is typically due within 45 days. Cash received from customers in advance of product shipment or providing services is recorded as a contract liability. The Company’s contracts with its customers generally do not include rights of return or a significant financing component.
The Company regularly enters into contracts that include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. The transaction price is allocated to each performance obligation in proportion to its standalone selling price. The Company determines standalone selling price using average selling prices with consideration of current market conditions. If the product or service has no history of sales or if the sales volume is not sufficient, the Company relies upon prices set by management, adjusted for applicable discounts.
Net Loss Per Share
Net loss per share is computed using the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights and sharing of losses, of the Class A common stock and Class B common stock are identical, other than voting rights. As the liquidation and dividend rights and sharing of losses are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.
9

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase.
For the calculation of diluted net loss per share, basic net loss per share is adjusted by the effect of dilutive securities including awards under the Company’s equity compensation plans. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding. For periods in which the Company reports net losses, diluted net loss per share is the same as basic net loss per share because potentially dilutive shares of common stock are not assumed to have been issued if their effect is anti-dilutive.
3.    Other Financial Statement Information
Available-for-sale Securities
Available-for-sale securities at June 30, 2022 consisted of the following (in thousands):
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value Fair Value Measurement
Cash equivalents:
Money market funds$225,176 $— $— $225,176 Level 1
Marketable securities:
Corporate debt securities161,622  (2,733)158,889 Level 2
Government debt securities51,746 9 (883)50,872 Level 2
Asset-backed securities15,907  (122)15,785 Level 2
Total available-for-sale securities$454,451 $9 $(3,738)$450,722 
As of December 31, 2021, the Company held $548.0 million in money market funds with no unrealized gains or losses as of this date.
The contractual maturities of marketable securities as of June 30, 2022 were as follows (in thousands):
Amortized CostFair Value
Due in one year or less$97,324 $95,930 
Due after one year to five years131,951 129,616 
Total marketable securities$229,275 $225,546 
Inventory
Inventory was comprised of the following (in thousands):
June 30,
2022
December 31,
2021
Purchased materials$28,291 $31,954 
Work in progress21,846 14,052 
Finished goods20,509 13,960 
Inventory$70,646 $59,966 
10

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Accrued Compensation and Related Benefits
Accrued compensation and related benefits were comprised of the following as of the dates indicated (in thousands):
June 30,
2022
December 31,
2021
Accrued payroll and related costs$3,450 $3,978 
Employee stock purchase program liability754 1,693 
Accrued bonus11,294 16,558 
Accrued commissions4,055 3,417 
Accrued acquisition-related compensation2,156 4,430 
Accrued vacation1,403 1,172 
Other393 378 
Accrued compensation and related benefits$23,505 $31,626 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities were comprised of the following as of the dates indicated (in thousands):
June 30,
2022
December 31,
2021
Accrued legal and related costs$2,313 $2,425 
Accrued license fee6,008 6,214 
Accrued royalties for licensed technologies4,166 4,415 
Accrued property and equipment25,833 15,361 
Accrued professional services4,332 8,593 
Product warranties1,430 994 
Customer deposits888 954 
Taxes payable1,445 4,622 
Accrued lab supplies1,884 2,056 
Other4,923 5,275 
Accrued expenses and other current liabilities$53,222 $50,909 
Product Warranties
Changes in the reserve for product warranties were as follows for the periods indicated (in thousands):
Six Months Ended
June 30,
20222021
Beginning of period$994 $399 
Amounts charged to cost of revenue1,983 1,242 
Repairs and replacements(1,547)(1,064)
End of period$1,430 $577 
Revenue and Deferred Revenue
As of June 30, 2022, the aggregate amount of remaining performance obligations related to separately sold extended warranty service agreements, or allocated amounts for extended warranty service agreements bundled with sales of instruments, was $9.3 million, of which approximately $6.4 million is expected to be recognized to revenue in the next 12 months, with the remainder thereafter. The contract liabilities of $9.3 million and $7.7 million as of June 30, 2022 and December 31, 2021, respectively, consisted of deferred revenue related to extended warranty service agreements. Revenue recorded during the three
11

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
and six months ended June 30, 2022 and 2021 included $1.3 million and $2.9 million, and, $1.1 million and $2.5 million, respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 2021 and December 31, 2020.
The following table represents revenue by source for the periods indicated (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Instruments$14,736 $16,877 $29,165 $28,002 
Consumables97,934 97,146 195,884 190,225 
Services1,939 1,819 4,056 3,436 
Total revenue$114,609 $115,842 $229,105 $221,663 
The following table presents revenue by geography based on the location of the customer for the periods indicated (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
United States$69,373 $64,001 $126,814 $114,307 
Europe, Middle East and Africa25,608 28,772 46,140 47,942 
China9,087 12,874 29,847 36,514 
Asia-Pacific (excluding China)9,026 8,431 22,543 19,635 
North America (excluding United States)1,515 1,764 3,761 3,265 
Total revenue$114,609 $115,842 $229,105 $221,663 
4.    Commitments and Contingencies
Lease Agreements
The Company leases office, laboratory, manufacturing and distribution space in various locations worldwide. On November 6, 2020, the Company entered into a Master Lease Agreement ("MLA") to lease additional office building space near the Company's Pleasanton, California headquarters. The MLA consists of various lease components, a few of which commenced in the six months ended June 30, 2022. The sole outstanding component is expected to commence in 2023 and is expected to terminate on June 30, 2033. Total undiscounted payments for the lease component commencing in fiscal year 2023 will be $14.0 million with an expected lease term of 10.5 years.
12

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Future net lease payments related to the Company’s operating lease liabilities as of June 30, 2022 is as follows (in thousands):
Operating Leases
2022 (excluding the six months ended June 30, 2022)$5,852 
202314,920 
202415,046 
202513,908 
202614,638 
Thereafter61,684 
Total lease payments$126,048 
Less: imputed interest(27,031)
Present value of operating lease liabilities$99,017 
Operating lease liabilities, current$7,977 
Operating lease liabilities, noncurrent$91,040 
The following table summarizes additional information related to operating leases as of June 30, 2022:
June 30,
2022
December 31, 2021
Weighted-average remaining lease term8.5 years8.7 years
Weighted-average discount rate5.5 %5.4 %
Litigation
The Company is regularly subject to lawsuits, claims, arbitration proceedings, administrative actions and other legal and regulatory proceedings involving intellectual property disputes, commercial disputes, competition and other matters, and the Company may become subject to additional types of lawsuits, claims, arbitration proceedings, administrative actions, government investigations and legal and regulatory proceedings in the future.
Nanostring
On May 6, 2021, the Company filed suit against Nanostring Technologies, Inc. ("Nanostring") in the U.S. District Court for the District of Delaware alleging that Nanostring's GeoMx Digital Spatial Profiler and associated instruments and reagents infringe U.S. Patent Nos. 10,472,669, 10,662,467, 10,961,566, 10,983,113 and 10,996,219. On May 19, 2021, the Company filed an amended complaint additionally alleging that the GeoMx products infringe U.S. Patent Nos. 11,001,878 and 11,008,607. On May 4, 2022, the Company filed an amended complaint additionally alleging that the GeoMx products infringe U.S. Patent No. 11,293,917 and withdrawing the Company's claim of infringement of U.S. Patent No. 10,662,467. Nanostring filed its answer on May 18, 2022. Discovery is in progress. A Markman hearing is scheduled for November 2022 and trial is scheduled for August 2023.
On February 28, 2022, the Company filed a second suit against Nanostring in the U.S. District Court for the District of Delaware alleging that Nanostring's CosMx Spatial Molecular Imager and associated instruments, reagents and services infringe U.S. Patent Nos. 10,227,639 and 11,021,737. On May 12, 2022, the Company filed an amended complaint additionally alleging that the CosMx products infringe U.S. Patent Nos. 11,293,051, 11,293,052 and 11,293,054. Nanostring filed its answer on May 26, 2022. Discovery is in progress. A Markman hearing is scheduled for May 2023 and trial is scheduled for June 2024.
On March 9, 2022, the Company filed suit in the Munich Regional Court in Germany alleging that Nanostring's CosMx Spatial Molecular Imager and associated instruments, reagents and services infringe EP Patent No. 2794928B1. Nanostring has not yet responded to the complaint. A hearing on infringement is scheduled for March 2023.
13

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Vizgen
In May 2022, the Company filed suit against Vizgen, Inc. ("Vizgen") in the U.S. District Court for the District of Delaware alleging that Vizgen’s MERSCOPE Platform and workflow and Vizgen’s Lab Services program, including associated instruments and reagents, infringe U.S. Patent Nos. 11,021,737, 11,293,051, 11,293,052, 11,293,054 and 11,299,767. On July 25, 2022, Vizgen filed a motion to dismiss the Company's claims for willful and indirect infringement. Discovery has not yet commenced and no case schedule has yet been set.
5.    Capital Stock
As of June 30, 2022, the number of shares of Class A common stock and Class B common stock issued and outstanding were 95,019,542 and 18,867,255, respectively. During the three months ended June 30, 2022 and 2021 and during the six months ended June 30, 2022 and 2021, 579,210, 2,250,000, 779,210 and 2,400,000 shares of Class B common stock, respectively, were converted to shares of Class A common stock upon the election of the holders of such shares.
6.    Equity Incentive Plans
2019 Employee Stock Purchase Plan
A total of 3,284,859 shares of Class A common stock were reserved for issuance under the 2019 Employee Stock Purchase Plan ("ESPP"). The price at which Class A common stock is purchased under the ESPP is equal to 85% of the fair market value of the common stock on the first day of the offering period or purchase date, whichever is lower.
During the three months ended June 30, 2022 and 2021, 91,871 and 30,868 shares of Class A common stock, respectively, were issued under the ESPP. There were no shares of Class A common stock issued under the ESPP during the three months ended March 31, 2022 and 2021. As of June 30, 2022, there were 2,965,685 shares available for issuance in connection under the ESPP.
Stock-based Compensation
The Company recorded stock-based compensation expense in the condensed consolidated statement of operations for the periods presented as follows (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Cost of revenue$1,453 $841 $2,467 $1,305 
Research and development15,579 12,140 26,870 18,936 
Selling, general and administrative19,281 13,951 33,023 22,867 
Total stock-based compensation expense$36,313 $26,932 $62,360 $43,108 
Restricted Stock Units
Restricted stock unit activity for the six months ended June 30, 2022 is as follows:
Restricted Stock
Units
Weighted-Average
Grant Date Fair Value
(per share)
Outstanding as of December 31, 20211,298,244 $141.48 
Granted1,734,841 71.67 
Vested(301,496)118.75 
Cancelled(166,137)113.63 
Outstanding as of June 30, 20222,565,452 $98.75 
14

10x Genomics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Stock Options
Stock option activity for the six months ended June 30, 2022 is as follows:
Stock OptionsWeighted-Average
Exercise Price
Outstanding as of December 31, 20218,212,754 $29.28 
Granted1,067,902 68.02 
Exercised(978,467)10.70 
Cancelled(142,509)53.36 
Outstanding as of June 30, 20228,159,680 $36.16 
7.    Net Loss Per Share
The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Stock options to purchase common stock8,159,680 10,042,162 8,159,680 10,042,162 
Restricted stock units2,565,452 1,340,188 2,565,452 1,340,188 
Shares committed under ESPP19,611 12,201 19,611 12,201 
Shares subject to repurchase6,250 37,500 6,250 37,500 
Contingent restricted shares 236,484  236,484 
Total10,750,993 11,668,535 10,750,993 11,668,535 
8.    Subsequent Event
On August 3, 2022, to decrease its costs and maintain a streamlined organization to support its business, the Company committed to a reduction in force that is expected to result in the termination of approximately 8% of the Company’s global workforce. In connection with the reduction in force, the Company currently estimates it will incur between approximately $5 million and $6 million of costs, consisting primarily of cash severance costs, which the Company expects to recognize in the third quarter of 2022. The estimates of costs and expenses that the Company expects to incur in connection with the workforce reduction are subject to a number of assumptions and actual results may differ materially. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the workforce reduction.
15

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited condensed financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our audited consolidated financial statements and notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on February 18, 2022 (our "Annual Report"). As discussed in the section titled “Special Note Regarding Forward Looking Statements,” the following discussion and analysis, in addition to historical financial information, contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” in this Quarterly Report and Part I, Item 1A of our Annual Report.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
Overview
We are a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biological systems at resolution and scale that matches the complexity of biology. Our expanding suite of offerings leverages our cross-functional expertise across biology, chemistry, software and hardware to provide a comprehensive, dynamic and high-resolution view of complex biological systems. We have launched multiple products that enable researchers to understand and interrogate biological analytes in their full biological context. Our commercial product portfolio leverages our Chromium Controller, Chromium Connect and Chromium X Series, which we refer to as “Chromium instruments,” our Visium CytAssist, an instrument designed to simplify the Visium solution workflow by facilitating the transfer of analytes from standard glass slides to Visium slides, and our proprietary microfluidic chips, slides, reagents and other consumables for our Chromium and Visium solutions, which we refer to as “consumables.” We bundle our software with these products to guide customers through the workflow, from sample preparation through analysis and visualization.
Our products cover a wide variety of applications and allow researchers to analyze biological systems at fundamental resolutions and on massive scales, such as at the single cell level for millions of cells. Our instruments and consumables are designed to work together exclusively. After buying an instrument, customers purchase consumables from us for use in their experiments. In addition to instrument and consumable sales, we derive revenue from post-warranty service contracts for our instruments.
Since our inception in 2012, we have incurred net losses in each year. Our net losses were $64.5 million and $106.9 million for the three and six months ended June 30, 2022 and $11.1 million and $22.6 million for the three and six months ended June 30, 2021, respectively. As of June 30, 2022, we had an accumulated deficit of $970.2 million, and, cash, cash equivalents and marketable securities totaling $499.7 million. We expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term. We expect our expenses will increase substantially in connection with our ongoing activities, as we:
attract, hire and retain qualified personnel;
scale our technology platforms and introduce new products and services;
protect and defend our intellectual property;
acquire businesses or technologies; and
invest in processes, tools and infrastructure to support the growth of our business.
Operational Effectiveness in the COVID-19 Environment
We continue to closely monitor developments surrounding the COVID-19 pandemic including, among other developments, the potential impacts of variants. Many of our customers continue to navigate COVID-19 related challenges that we believe have affected our customers’ productivity. Such challenges include COVID-19 related protocols and restrictions, difficulties hiring, training and retaining laboratory and other personnel, constraints on logistics, shipping and other distribution operations and impediments to procuring materials, equipment and components required for their experiments. For example, we believe
16

COVID-19 related lockdowns in China negatively impacted our revenues in the quarter ended June 30, 2022. We, our suppliers and our other partners also have encountered COVID-19 related challenges, including difficulties procuring equipment, materials and components necessary to develop, manufacture and distribute our products, but to date we have not experienced any material impacts as a result of such challenges.
There is considerable uncertainty about the duration of the ongoing impacts of COVID-19. We expect COVID-19 to continue to impact our operating results, however, the extent of the financial impact and duration cannot be reasonably estimated at this time. For further discussion of the risks relating to the impacts of the COVID-19 pandemic, see the section titled “Risk Factors,” generally, and “Risk Factors—The impacts and potential impacts of the COVID-19 pandemic continue to create significant uncertainty for our business, financial condition and results of operations,” specifically, under Part I, Item 1A of our Annual Report, which is incorporated by reference into this Quarterly Report.
Results of Operations
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2022202120222021
Revenue$114,609 $115,842 $229,105 $221,663 
Cost of revenue27,704 4,915 53,182 21,975 
Gross profit86,905 110,927 175,923 199,688 
Operating expenses:
Research and development70,685 53,402 134,763 95,285 
Selling, general and administrative79,337 68,703 146,012 125,607 
Accrued contingent liabilities— (850)— (660)
Total operating expenses150,022 121,255 280,775 220,232 
Loss from operations(63,117)(10,328)(104,852)(20,544)
Other income (expense):
Interest income1,238 58 1,807 108 
Interest expense(109)(209)(237)(430)
Other (expense) income, net(1,843)521 (2,243)(208)
Total other (expense) income(714)370 (673)(530)
Loss before provision for income taxes(63,831)(9,958)(105,525)(21,074)
Provision for income taxes627 1,094 1,346 1,529 
Net loss$(64,458)$(11,052)$(106,871)$(22,603)
Comparison of the Three and Six Months Ended June 30, 2022 and 2021
Revenue
Three Months Ended
June 30,
ChangeSix Months Ended
June 30,
Change
(dollars in thousands)20222021$%20222021$%
Instruments$14,736 $16,877 $(2,141)(13)%$29,165 $28,002 $1,163 %
Consumables97,934 97,146 788 195,884 190,225 5,659 
Services1,939 1,819 120 4,056 3,436 620 18 
Total revenue$114,609 $115,842 $(1,233)(1)%$229,105 $221,663 $7,442 %
Revenue decreased $1.2 million, or 1%, to $114.6 million for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021. Instruments revenue, which includes sales of our Chromium instruments and Visium CytAssist, decreased $2.1 million, or 13%, to $14.7 million for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021 primarily due to lower volume of instruments sold. Consumables revenue increased $0.8 million, or 1%, to $97.9 million for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021 primarily driven by growth due to increased usage by existing customers and the addition of new customers, largely offset by decreased
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demand due to limited laboratory productivity arising from the continued impact of the global COVID-19 pandemic, including lockdowns in China, delayed purchases by customers impacted by a previously disclosed process breakdown in our logistics cold-chain, execution challenges and unfavorable currency fluctuations.
Revenue increased $7.4 million, or 3%, to $229.1 million for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021. Instruments revenue increased $1.2 million, or 4%, to $29.2 million for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 primarily due to higher average selling prices for Chromium X series instruments compared to Chromium Controller instruments, partially offset by lower volume of instruments sold. Consumables revenue increased $5.7 million, or 3%, to $195.9 million for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 primarily driven by growth due to increased usage by existing customers and the addition of new customers, largely offset by decreased demand due to limited laboratory productivity arising from the continued impact of the global COVID-19 pandemic, including lockdowns in China, delayed purchases by customers impacted by a previously disclosed process breakdown in our logistics cold-chain, execution challenges and unfavorable currency fluctuations.
Cost of revenue, gross profit and gross margin
Three Months Ended
June 30,
ChangeSix Months Ended
June 30,
Change
(dollars in thousands)
20222021$%20222021$%
Cost of revenue$27,704 $4,915 $22,789 464 %$53,182 $21,975 $31,207 142 %
Gross profit$86,905 $110,927 $(24,022)(22)%$175,923 $199,688 $(23,765)(12)%
Gross margin76 %96 %77 %90 %
Cost of revenue increased $22.8 million, or 464%, to $27.7 million for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021. The increase was primarily driven by a one-time reversal of $14.7 million of accrued royalties resulting from the Settlement and Patent Cross License Agreement (the "Bio-Rad Agreement") with Bio-Rad Laboratories, Inc. during the three months ended June 30, 2021, $4.1 million from higher manufacturing costs due to increased sales and higher costs of newly introduced products, $1.7 million of higher royalty expenses, $1.5 million of higher inventory scrap and excess and obsolete inventory charges, and $0.9 million of higher warranty costs.
Cost of revenue increased $31.2 million, or 142%, to $53.2 million for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021. The increase was primarily driven by a one-time reversal of $14.7 million of accrued royalties resulting from the Bio-Rad Agreement during the six months ended June 30, 2021, $11.3 million from higher manufacturing costs due to increased sales and higher costs of newly introduced products, $3.1 million of higher royalty expenses, $1.8 million of higher inventory scrap and excess and obsolete inventory charges, and $1.2 million of higher warranty costs, partially offset by a decrease of $1.0 million of costs related to ramping our second manufacturing facility.
We expect our gross margin will trend slightly lower during the year due in part to change in product mix with newly introduced products and the impacts of inflation and increased supply chain costs.
Operating expenses
Three Months Ended
June 30,
ChangeSix Months Ended
June 30,
Change
(dollars in thousands)
20222021$%20222021$%
Research and development$70,685 $53,402 $17,283 32 %$134,763 $95,285 $39,478 41 %
Selling, general and administrative79,337 68,703 10,634 15 146,012 125,607 20,405 16 
Accrued contingent liabilities— (850)850 (100)— (660)660 (100)
Total operating expenses$150,022 $121,255 $28,767 24 %$280,775 $220,232 $60,543 27 %
Research and development expenses increased $17.3 million, or 32%, to $70.7 million for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021. The increase was primarily driven by an increase in personnel expenses of $11.0 million, including $3.4 million in stock-based compensation expense, $3.6 million of higher allocated costs for facilities and information technology to support operational expansion, laboratory materials, supplies and expensed equipment of
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$2.0 million used to support our research and development efforts, and higher consulting and professional services of $0.6 million for product development.
Research and development expenses increased $39.5 million, or 41%, to $134.8 million for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021. The increase was primarily driven by an increase in personnel expenses of $22.4 million, including $7.9 million in stock-based compensation expense, laboratory materials, supplies and expensed equipment of $8.1 million used to support our research and development efforts, $6.8 million of higher allocated costs for facilities and information technology to support operational expansion, higher consulting and professional services of $1.1 million for product development, and $0.9 million of higher depreciation.
We expect our research development activities and expenditures to continue to increase in the third quarter of 2022 and beyond as we increase our investment to support new and existing projects.
Selling, general and administrative expenses increased $10.6 million, or 15%, to $79.3 million for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021. The increase was primarily driven by increased personnel expenses of $15.2 million, including $5.3 million in stock-based compensation expense, $2.3 million of marketing expenses and $0.6 million of higher allocated costs for facilities and information technology to support operational expansion, partially offset by decreased outside legal expenses of $6.0 million and $1.6 million of consulting and professional services.
Selling, general and administrative expenses increased $20.4 million, or 16%, to $146.0 million for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021. The increase was primarily driven by increased personnel expenses of $29.8 million, including $10.2 million in stock-based compensation expense, $3.0 million of higher marketing expenses related to conferences and seminars, and $1.9 million of higher allocated costs for facilities and information technology to support operational expansion, partially offset by decreased outside legal expenses of $12.6 million and $2.4 million of consulting and professional services.
On August 3, 2022, to decrease our costs and maintain a streamlined organization to support our business, we committed to a reduction in force that is expected to result in the termination of approximately 8% of our global workforce. In connection with the reduction in force, we currently estimate that we will incur between approximately $5 million and $6 million of costs, consisting primarily of cash severance costs, which we expect to recognize in the third quarter of 2022. We expect to benefit from the cost savings arising from the reduction in work force commencing from the fourth quarter of 2022. The estimates of costs and expenses that we expect to incur in connection with the workforce reduction are subject to a number of assumptions and actual results may differ materially. We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the workforce reduction.
Other (expense) income, net
Three Months Ended
June 30,
ChangeSix Months Ended
June 30,
Change
(dollars in thousands)
20222021$%20222021$%
Interest income$1,238 $58 $1,180 2,034 %$1,807 $108 $1,699 1,573 %
Interest expense(109)(209)100 (48)(237)(430)193 (45)
Other (expense) income, net(1,843)521 (2,364)(454)(2,243)(208)(2,035)978 
Total other (expense) income$(714)$370 $(1,084)(293)%$(673)$