10q10k10q10k.net

What changed in 10x Genomics, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of 10x Genomics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+500 added−728 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in 10x Genomics, Inc.'s 2024 10-K

500 paragraphs added · 728 removed · 383 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

49 edited+12 added−211 removed41 unchanged
Biggest changeBecause we provide solutions to answer a broad diversity of biological questions, we view much of this total market as ultimately accessible to us. Areas in which our current solutions offer alternative or complementary approaches to existing tools represented a total opportunity of approximately $16 billion of the more than $67 billion annual global life sciences research tools market.
Biggest changeIt transforms complex imaging and transcriptomic data into interactive insights, accelerating discovery in spatial biology. Our market opportunity We believe much of the $75 billion annual global life sciences research tools market is ultimately accessible to us due to our ability to answer a broad diversity of biological questions.
The EU IVDR defines an IVD as “any medical device which is a reagent, reagent product, calibrator, control material, kit, instrument, apparatus, piece of equipment, software or system, whether used alone or in combination, intended by the manufacturer to be used in vitro for the examination of specimens, including blood and tissue donations, derived from the human 23 Table of Contents body, solely or principally for the purpose of providing information on one or more of the following: (a) concerning a physiological or pathological process or state; (b) concerning congenital physical or mental impairments; (c) concerning the predisposition to a medical condition or a disease; (d) to determine the safety and compatibility with potential recipients; (e) to predict treatment response or reactions; (f) to define or monitor therapeutic measures.” National competent authorities of the EU member states enforce compliance with medical devices (including IVDs) requirements.
The EU IVDR defines an IVD as “any medical device which is a reagent, reagent product, calibrator, control material, kit, instrument, apparatus, piece of equipment, software or system, whether used alone or in combination, intended by the manufacturer to be used in vitro for the examination of specimens, including blood and tissue donations, derived from the human body, solely or principally for the purpose of providing information on one or more of the following: (a) concerning a physiological or pathological process or state; (b) concerning congenital physical or mental impairments; (c) concerning the predisposition to a medical condition or a disease; (d) to determine the safety and compatibility with potential recipients; (e) to predict treatment response or reactions; (f) to define or monitor therapeutic measures.” National competent authorities of the EU member states enforce compliance with medical devices (including IVDs) requirements.
First, our solutions enable understanding biology at the right level of biological resolution, such as at the level of the single cell or at high spatial resolution of tissues and organs. Second, we believe that high resolution tools only become truly powerful when they are built into technologies with tremendous scale.
First, our solutions are designed to enable understanding biology at the right level of biological resolution, such as at the level of the single cell or at high spatial resolution of tissues and organs. Second, we believe that high resolution tools only become truly powerful when they are built into technologies with tremendous scale.
Other competitors are in the process of developing novel technologies for the life sciences market which may lead to products that rival or replace our products. We expect new competitors to continue to emerge and the intensity of competition to continue to increase.
Other competitors are in the process of developing novel technologies for the life sciences market which may lead to products 9 Table of Contents that rival or replace our products. We expect new competitors to continue to emerge and the intensity of competition to continue to increase.
In September 2020, we entered into an exclusive license agreement with The Board of Trustees of the Leland Stanford Junior University (“Stanford”), pursuant to which we in-license exclusive, worldwide rights under certain of Stanford’s patents and patents applications directed to ATAC-seq technology in all field of use (“Stanford Agreement”).
The Harvard Agreement is projected to expire in 2034. In September 2020, we entered into an exclusive license agreement with The Board of Trustees of the Leland Stanford Junior University (“Stanford”), pursuant to which we in-license exclusive, worldwide rights under certain of Stanford’s patents and patents applications directed to ATAC-seq technology in all field of use (“Stanford Agreement”).
Once we identify the correct opportunities, which we create through both organic development by our in-house teams and targeted acquisitions of technologies that will accelerate our ability to bring new products to researchers, we have the discipline to focus on execution and have a track record of bringing successful products across multiple platforms to market.
Once we identify the correct opportunities, which we create through both organic development by our in-house teams and targeted acquisitions of technologies that i to accelerate our ability to bring new products and new versions of existing products to researchers, we have the discipline to focus on execution and have a track record of bringing successful products across multiple portfolios to market.
Worldwide we own or exclusively in-license over 970 issued or allowed patents and 1,220 pending patent applications as of December 31, 2023. We also license additional patents on a non-exclusive and/or territory restricted basis.
Worldwide we own or exclusively in-license over 1,290 issued or allowed patents and 1,300 pending patent applications as of December 31, 2024. We also license additional patents on a non-exclusive and/or territory restricted basis.
As of December 31, 2023, our employees included 451 in research and development, 450 in sales, marketing and support, 196 in general and administrative and 162 in manufacturing, many of whom hold PhDs in their respective disciplines. Additionally, most of our senior management team and the members of our board of directors hold PhDs and/or other advanced degrees.
As of December 31, 2024, our employees included 410 in research and development, 491 in sales, marketing and support, 213 in general and administrative and 192 in manufacturing, many of whom hold PhDs in their respective disciplines. Additionally, most of our senior management team and the members of our board of directors hold PhDs and/or other advanced degrees.
Human Capital At 10x, our success begins with our people. We are led by a talented, global and diverse team of scientists, software developers and subject matter experts who help drive adoption of our products and support our vision.
We are led by a talented, global and diverse team of scientists, software developers and subject matter experts who help drive adoption of our products and support our vision.
We seek trademark registration to protect key trademarks such as our 10X, 10X GENOMICS, CHROMIUM, VISIUM and XENIUM marks, however, we have not yet registered all of our trademarks in all of our current and potential markets.
We seek trademark registration to protect key trademarks such as our 10X, 10X GENOMICS, CHROMIUM, VISIUM and XENIUM marks, however, we have not yet registered all of our trademarks in all of our current and potential markets. We own registered trademarks on 10X GENOMICS and product related brand names in the United States and worldwide.
Xenium In Situ detects and preserves the cellular localization of hundreds of RNA targets directly in a fresh frozen or FFPE tissue section without the need for conventional sequencing, providing researchers with a detailed map of gene expression patterns without sacrificing resolution or target number.
Our Xenium Analyzer instrument enables researchers to detect and preserve the cellular location of hundreds of RNA targets directly in a fresh frozen or FFPE tissue section without the need for conventional sequencing, providing researchers with a detailed map of gene expression patterns without sacrificing resolution or target number.
The Stanford Agreement is projected to expire in 2038. For the years ended December 31, 2023 and 2022, we made aggregate contingent and royalty payments under the Spatial Transcriptomics acquisition agreement, Stanford license agreement and Harvard license agreement, collectively, of approximately $15.4 million and $12.8 million, respectively.
The Stanford Agreement is projected to expire in 2038. 11 Table of Contents For the years ended December 31, 2024 and 2023, we made aggregate contingent and royalty payments under the Spatial Transcriptomics acquisition agreement, Stanford license agreement and Harvard license agreement, collectively, of approximately $9.2 million and $15.4 million, respectively. We expect such payments to decrease in 2025.
Commercial Commercial team Since launching our first product in mid-2015, we have expanded our commercial operations and now sell our products in over 50 countries. Our customers primarily include academic, government, biopharmaceutical, biotechnology and other institutions focused on life sciences research. We sell our products primarily through our own direct sales force in North America and certain regions of Europe.
Commercial organization and strategy Since launching our first product in mid-2015, we have expanded our commercial operations and now sell our products in over 50 countries. Our customers primarily include academic, government, biopharmaceutical, biotechnology and other institutions focused on life sciences research.
We changed our name to 10X Technologies, Inc. in September 2012 and to 10x Genomics, Inc. in November 2014. Our principal executive offices are located at 6230 Stoneridge Mall Road, Pleasanton, California 94588, and our telephone number is (925) 401-7300.
Corporate information We were incorporated in the State of Delaware on July 2, 2012 under the name Avante Biosystems, Inc. We changed our name to 10X Technologies, Inc. in September 2012 and to 10x Genomics, Inc. in November 2014. Our principal executive offices are located at 6230 Stoneridge Mall Road, Pleasanton, California 94588, and our telephone number is (925) 401-7300.
This provides researchers with a detailed map of gene expression patterns without sacrificing resolution or target number. Xenium uses circularizable probes specific to target transcripts followed by enzymatic amplification to create a target for fluorescent probe hybridization. On the Xenium Analyzer, microscope images of the tissue detect the location of each fluorescent probe, which is then removed.
Xenium uses circularizable probes specific to target transcripts followed by enzymatic amplification to create a target for fluorescent probe hybridization. On the Xenium Analyzer, microscope images of the tissue detect the location of each fluorescent probe, which is then removed.
As of December 31, 2023, we employed a total of 1,259 individuals, 924 of whom were employed in the United States and 335 of whom were employed outside the United States.
As of December 31, 2024, we employed a total of 1,306 individuals, 961 of whom were employed in the United States and 345 of whom were employed outside the United States.
Item 1. Business. Mission Our mission is to accelerate the mastery of biology to advance human health. Overview We are a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biology.
Item 1. Business. Overview Our mission is to accelerate the mastery of biology to advance human health. We are a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biology. Our integrated solutions include instruments, consumables and software for analyzing biological systems at a resolution and scale that matches the complexity of biology.
Companies, both established and early stage, have introduced products for, among other things, genomics analysis, single cell analysis, spatial analysis and in situ analysis. We also compete with companies that offer existing tools and technologies for life science research, such as bulk sequencing, flow cytometry, PCR, immunofluorescence, immunohistochemistry and other imaging and cell-based assays, that are replaced by our products.
We also compete with companies that offer existing tools and technologies for life science research, such as bulk sequencing, flow cytometry, polymerase chain reactions (PCR), immunofluorescence, immunohistochemistry and other imaging and cell-based assays, that are replaced by our products.
Although we currently market our products as RUO, we may in the future develop products intended to be used for clinical or diagnostic purposes, which would result in the application of a more onerous set of FDA and foreign regulatory requirements.
The FDA or foreign authorities may consider the totality of the circumstances surrounding distribution and use of an RUO product, including how the product is marketed, when determining its intended use. 10 Table of Contents Although we currently market our products as RUO, we may in the future develop products intended to be used for clinical or diagnostic purposes, which would result in the application of a more onerous set of FDA and foreign regulatory requirements.
Innovations in all of these areas have enabled our rapidly expanding suite of products, which allow our customers to interrogate biological systems at previously inaccessible resolution and scale.
We have built deep expertise across diverse disciplines including chemistry, biology, hardware and software. Innovations in all of these areas have enabled the deployment of our rapidly expanding suite of products, which allow our customers to interrogate biological systems at previously inaccessible resolution and scale.
Multidisciplinary collaboration and technological innovation are central to our product development process. We have built teams with deep expertise across diverse disciplines including chemistry, molecular biology, microfluidics, hardware, computational biology and software engineering.
We have built teams with deep expertise across diverse disciplines including chemistry, molecular biology, microfluidics, hardware, computational biology and software engineering.
Privacy and security laws, regulations and other obligations are constantly 25 Table of Contents evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings or actions that lead to significant civil and/or criminal penalties and restrictions on data processing. 26 Table of Contents Corporate information We were incorporated in the State of Delaware on July 2, 2012 under the name Avante Biosystems, Inc.
Privacy and security laws, regulations and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
Analogous to the Chromium platform, we also aim to develop additional Visium-based applications to allow spatial interrogation of a broader range of biological analytes such as DNA, immune molecules, epigenetics and proteins. 15 Table of Contents Our Xenium platform Our Xenium platform for in situ analysis is designed to give scientists the ability to not only locate and type cells in their tissue context, but also to address a variety of specific questions based on previous knowledge of their sample often discovered using our Chromium and Visium platforms.
Our Xenium platform for in situ analysis is designed to give scientists the ability not only to locate and type cells in their tissue context, but also to address a variety of specific questions based on previous knowledge of their sample potentially discovered using our Chromium and Visium platforms.
Other than payments under the Spatial Transcriptomics acquisition agreement, we expect the size of these payments to grow as our business grows. The patents we own expire beginning in 2030 and the patents we exclusively in-license expire beginning in 2028. We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost-effective.
The patents we own expire beginning in 2030 and the patents we exclusively in-license expire beginning in 2028. We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost-effective.
In our international territories, apart from standard industry-wide labor unions and compulsory collective bargaining agreements, none of our employees are represented by a labor union or subject to a collective bargaining agreement. We consider our relationship with our employees to be positive. Competition The life sciences industry is highly competitive.
In addition, none of our U.S. employees are represented by a labor union or covered under a collective bargaining agreement. In our international territories, apart from standard industry-wide labor unions and compulsory collective bargaining agreements, none of our employees are represented by a labor union or subject to a collective bargaining agreement.
We also provide education and training resources, both online and in person. Suppliers and manufacturing Our Pleasanton, California and Singapore manufacturing operations are ISO 9001:2015 certified, which covers design, development, manufacturing, distribution, service and sales, and we intend to seek similar certification for our newly acquired operations in Taiwan.
We also provide education and training resources, both online and in person. 8 Table of Contents Suppliers and manufacturing Our Pleasanton, California, Singapore and Taiwan manufacturing operations are ISO 9001:2015 certified, which covers design, development, manufacturing, distribution, service and sales. We obtain some components of our instruments and consumables from third-party suppliers.
Instruments We outsource manufacturing for our Chromium, Visium CytAssist and Xenium instruments to qualified contract manufacturers who have represented to us that they maintain ISO 13485 certification. Our Chromium Connect includes an automated workflow liquid handling robot which is manufactured by our partner. We perform optical and final assembly, instrument integration and testing of our Xenium instrument in-house.
Instruments We outsource manufacturing for our Chromium, Visium and Xenium instruments to qualified contract manufacturers who have represented to us that they maintain ISO 13485 certification. We perform optical and final assembly, instrument integration and testing of our Xenium instrument in-house. Human Capital At 10x, our success begins with our people.
Chromium enables multiomic readouts including gene expression, protein, chromatin, V(D)J, CRISPR/guide RNAs (gRNAs) and antigens, has broad sample compatibility (formalin-fixed paraffin-embedded (FFPE), fresh, frozen and paraformaldehyde (PFA) fixed tissue and whole blood) and delivers high performance including high cell recovery rates (CRE), high sensitivity, robustness and reproducibility. • Our Visium platform empowers researchers to identify where biological components are located and how they are arranged with respect to each other, otherwise referred to as “spatial analysis.” Our Visium platform uses high density DNA arrays which have DNA barcode sequences that encode the physical location of biological analytes within a sample, such as a tissue section, allowing the spatial location of the analytes to be “read out” using sequencing to create a visual map of the analytes across the sample.
Our Visium platform empowers researchers to identify where biological components are located and how they are arranged with respect to each other, otherwise referred to as “spatial analysis.” Our Visium platform uses high density DNA arrays which have DNA barcode sequences that encode the physical location of biological analytes within a sample, such as a tissue section, allowing the spatial location of the analytes to be “read out” using sequencing to create a visual map of the analytes across the sample.
Successive rounds of fluorescent probe hybridization, imaging and removal creates a unique optical signature that reveals the identity of the RNA at a location within each cell of a tissue. In the future, we expect that Xenium will allow the detection of both RNA and protein in the same tissue section, revealing complex and nuanced expression patterns.
Successive rounds of fluorescent probe hybridization, imaging and removal creates a unique optical signature that reveals the identity of the RNA at a location within each cell of a tissue.
Subject to customary termination rights, such exclusive license agreements typically will expire upon the last valid claim included in the licensed patents expires or, in some cases, upon our failure to achieve specified sales volume thresholds. Certain of these agreements also require that any products that are covered by the licensed patents be substantially manufactured in the United States.
We may also be obligated to pay our licensors certain milestones, royalties and/or other contingent payments. Subject to customary termination rights, such exclusive license agreements typically will expire upon the last valid claim included in the licensed patents expires or, in some cases, upon our failure to achieve specified sales volume thresholds.
As of December 31, 2023, our commercial organization consisted of 450 full time employees, many with PhD degrees and many with significant industry experience. We sell our products through third-party distributors in Asia, certain regions of Europe, Oceania, Central America, South America, the Middle East and Africa.
We sell our products primarily through our own direct sales force in North America and certain regions of Europe. As of December 31, 2024, our commercial organization consisted of 491 full time employees, many with PhD degrees and many with significant industry experience.
We believe that having dual sources for our components helps reduce the risk of a production delay caused by a disruption in the supply of a critical component.
While some of these components are sourced from a single supplier, we have qualified second sources for some, but not all, of our components including critical reagents, enzymes and oligonucleotides. We believe that having dual sources for our components helps reduce the risk of a production delay caused by a disruption in the supply of a critical component.
Some of these agreements grant us an exclusive right to practice the licensed intellectual property rights in a specific field and/or territory, and are subject to customary restrictions. We may also be obligated to pay our licensors certain milestones, royalties and/or other contingent payments.
Pursuant to certain license agreements, we in-license rights under certain U.S. and foreign patents and patent applications from third parties directed to our products and technology. Some of these agreements grant us an exclusive right to practice the licensed intellectual property rights in a specific field and/or territory, and are subject to customary restrictions.
Since our first product launch in 2015, we estimate that there have been more than 7,200 publications by researchers using data generated by our products. 21 Table of Contents Our sales and marketing efforts are targeted at the principal investigators, research scientists, department heads, research laboratory directors and core facility directors at leading academic institutions, biopharmaceutical companies and publicly and privately funded research institutions who control buying decisions.
Our sales and marketing efforts are targeted at the principal investigators, research scientists, department heads, research laboratory directors and core facility directors at leading academic institutions, biopharmaceutical companies and publicly and privately funded research institutions who control buying decisions.
We also expect to pursue additional opportunities that will further expand our opportunity, including new potential applications of our single cell, spatial and in situ technologies in the future. We believe the opportunity can also be assessed through the application areas of our tools and the types of questions that researchers are looking to answer.
We also expect to pursue additional opportunities that may further expand our opportunity, including new versions and potential applications of our single 7 Table of Contents cell, spatial and in situ technologies in the future. Our estimates are based on our own and third-party analyses of our potential opportunities.
Since launching our first product in mid-2015 through December 31, 2023, we have sold 5,966 instruments to researchers around the world, including academic and translational researchers and biopharmaceutical companies. We believe that we remain in the very early stages of our penetration into multiple large markets.
Our products have enabled researchers to make fundamental discoveries across multiple areas of biology, including oncology, immunology and neuroscience. Since launching our first product in mid-2015 through December 31, 2024, we have sold 7,039 instruments to researchers around the world, including academic and translational researchers and biopharmaceutical companies.
This aligns us closely with the needs of our customers and reduces our time-to-market. Our product development approach The success of our products is founded on how we approach product development. Our employees are deeply scientifically oriented, having the relevant scientific expertise embedded not only within research and development, but also within the management team and throughout the company.
Multidisciplinary, cross-functional collaboration and technological innovation are central to our product development process. Our employees are deeply scientifically oriented, having the relevant scientific expertise embedded not only within research and development, but also within the management team and throughout the company.
We currently have customers in over 50 countries. Our revenue was $618.7 million and $516.4 million for the years ended 2023 and 2022, respectively, representing a year-over-year growth rate of 20%. We generated net losses of $255.1 million and $166.0 million for the years ended 2023 and 2022, respectively. The complexity of biology Biology is staggeringly complex.
Our revenue was $610.8 million and $618.7 million for the years ended 2024 and 2023, respectively, representing a year-over-year decrease of 1%. We generated net losses of $182.6 million and $255.1 million for the years ended 2024 and 2023, respectively.
Underscoring the reach of our products, these publications cover a wide range of research and applied areas from cell biology to genetic health to neuroscience with the top three areas of publication, according to our estimates, being oncology, immunology and developmental biology.
More than 900 of these articles were published in three of the most highly regarded journals: Cell, Nature and Science . Underscoring the reach of our products, these publications cover a wide range of research and applied areas from cell biology to cardiovascular health to infectious disease to neuroscience.
In 2022, we launched the Visium CytAssist, an instrument designed to simplify the Visium solution workflow by facilitating the transfer of transcriptomic probes from standard glass slides to Visium slides.
The Visium platform includes our Spatial Gene Expression, HD Spatial Gene Expression and Spatial Gene and Protein Expression assays as well as the Visium CytAssist, an instrument designed to simplify and optimize the Visium solution workflow by facilitating the transfer of transcriptomic analytes from standard glass slides to Visium slides. 5 Table of Contents Our Xenium platform .
To this end, we plan to focus our research and development efforts on the following areas: Improve the performance of our existing solutions . We plan to improve our existing assays and software.
We plan to focus our research and development efforts on improving the performance of our existing technologies, developing new solutions and new versions of existing solutions for our portfolios, improving and developing new capabilities for our instruments, developing combined software and workflows across multiple solutions and investigating and developing new technologies.
For the years ended December 31, 2023 and 2022, no single customer, including distributors, represented greater than 10% of our business. For the years ended December 31, 2023 and 2022, sales to academic institutions represented approximately 65% and 61% of our direct sales revenue, respectively.
For the years ended December 31, 2024 and 2023, sales to academic institutions represented approximately 67% and 65% of our direct sales revenue, respectively. We expect that sales to biopharmaceutical companies will represent a growing proportion of our revenue in the future.
Finally, the barcode sequences can be used to easily tease apart information originating from different partitions. Our approach to partitioning and barcoding gives researchers the ability to measure many discrete biological materials and/or perform many different experiments in parallel, providing tremendous resolution and scale. Our Chromium platform offers comprehensive solutions to measure tissues at single cell resolution and scale.
Once biological material in each partition is barcoded, they can then be pooled and sequenced together. Partitioning and barcoding gives researchers the ability to measure many discrete biological materials and/or perform many different experiments in parallel, providing tremendous resolution and scale.
We are ambitious and focus on fundamentals. We strive to solve big challenges to enable new fundamental biology and to build technological capabilities with potential for exponential impact. We work closely with our customers, many of whom are thought leaders in genomics and medicine, to identify future frontiers and unmet needs.
According to our estimates, the top three areas of publication are oncology, immunology and developmental biology. Research and development The success of our products is founded on how we approach product development. We work closely with our customers, many of whom are thought leaders in genomics and medicine, to identify future frontiers and unmet needs.
Our proprietary software then provides turn-key analysis pipelines and intuitive visualization tools for all of our platforms that allows researchers to easily interpret the biological data from the samples. Our Chromium platform Our Chromium platform, which includes our Chromium X Series, Chromium Connect and legacy Chromium Controller instruments, microfluidic chips and related consumables, enables high-throughput analysis of individual biological components.
Collectively, our platforms enable researchers to interrogate, understand and master biology at the appropriate resolution and scale. 3 Table of Contents Our single cell portfolio Our single cell portfolio, powered by our Chromium platform, includes microfluidic chips and related consumables and our Chromium X Series and legacy Chromium instruments. Chromium enables high-throughput analysis of individual biological components.
The large numbers of partitions generated using our Chromium products can be used for analyzing samples at high resolution and on 7 Table of Contents massive scale. We pair a partitioned sample with our proprietary gel beads bearing barcodes that allow researchers to uniquely identify the contents of each partition and distinguish them from contents of other partitions.
Our Chromium instruments serve as precisely engineered reagent delivery systems, partitioning samples into individual components which can exceed one million. Each partition is paired with proprietary gel beads bearing unique barcodes that allow researchers to identify the contents of each partition and distinguish them from contents of other partitions.
Our 22 Table of Contents Company's scientific expertise is therefore embedded within the management team and throughout the organization. We are very proud to say that some of the world-leading experts in chemistry, molecular biology, microfluidics, hardware, computational biology and software engineering work and thrive at 10x. Our employees are highly motivated by our mission.
Our Company's scientific expertise is therefore embedded within the management team and throughout the organization, and our employees are highly motivated by our mission. We emphasize employee development and training, and aim to provide employees with competitive compensation. We have never experienced a work stoppage.
We will continue to identify and acquire or in-license technologies and intellectual property rights that accelerate the development of new features and products or complement our existing features, products and technologies. Peer-reviewed scientific publications using our products To date, we estimate that more than 7,200 peer-reviewed articles have been published based on data generated using our products.
See the section titled “ Risk Factors — The size of the market for our solutions may be smaller than estimated and new opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our solutions.” Peer-reviewed scientific publications using our products To date, we estimate that more than 10,000 peer-reviewed articles have been published based on data generated using our products.
Measuring individual cells, spatial portions of tissues or molecular interactions in small numbers is insufficient. Our products enable measuring and manipulating up to millions of single cells or thousands of tissue sample positions.
Our products enable measuring up to millions of single cells or tissue sample positions. Each of our platforms is designed to interrogate a major class of biological information enabling researchers to understand the complexities of biology at a spatial and cellular level.
Removed
Our integrated solutions include instruments, consumables and software for analyzing biological systems at a resolution and scale that matches the complexity of biology. We have built deep expertise across diverse disciplines including chemistry, biology, hardware and software.
Added
In the years ended December 31, 2024 and 2023, we sold 1,073 and 1,336 instruments and 357,100 and 347,000 consumable reactions, respectively. Our portfolios Resolution and Scale are the imperatives that underlie our products and technology.
Removed
Our products have enabled researchers to make fundamental discoveries across multiple areas of biology, including oncology, immunology and neuroscience, and have helped empower the single cell revolution hailed by Science magazine as the 2018 “Breakthrough of the Year.” Our products have won many awards, including among others the technological advancements in single cell multimodal omics hailed by Nature Methods journal as the 2019 “Method of the Year” and the technological advancements in spatially resolved transcriptomics hailed by Nature Methods journal as the 2020 “Method of the Year.” Through our compatible partner program, we and our two long read sequencing company partners launched products and protocols providing the ability to obtain full-length isoforms at single cell resolution.
Added
Chromium enables multiomic readouts including gene expression, protein (cell surface and intracellular), chromatin, V(D)J, CRISPR/guide RNAs (gRNAs) and antigens, has broad sample compatibility (formalin-fixed paraffin-embedded (FFPE), fresh, fresh frozen, paraformaldehyde (PFA) fixed tissue, DSP/methanol fixed peripheral blood mononuclear cells (PBMCs) and whole blood) and delivers high performance including high cell recovery rates (CRE), high sensitivity, robustness and reproducibility. 4 Table of Contents Our spatial portfolio Our spatial portfolio is powered by our Visium and Xenium platforms and aims to bring together the worlds of histology and genomics.
Removed
This groundbreaking capability was highlighted as part of the Nature Methods 2022 “Method of the Year” Long-read sequencing. Since 2015, a total of seven 10x products have been recognized by The Scientist magazine on their annual Top 10 Innovations list, an annual list of newly released products that have the potential to generate the biggest impact on scientific research.
Added
Similar to partitioning, spatial barcoding with large numbers of oligos on an array can unlock tremendous insights, providing high resolution molecular information to visualize the whole transcriptome and protein expression, paired with same section hematoxylin and eosin (H&E) or infrared (IR) imaging data, across biological tissues.
Removed
We expect that 10x will power a “Century of Biology” in which many of humanity’s most pressing health challenges will be solved by precision diagnostics, targeted therapies and cures to currently intractable diseases. The “10x” in our name refers to our focus on opportunities with the greatest potential for exponential advances and impact.
Added
Available Xenium consumables include curated, validated and fit-for-purpose gene panels along with the ability to design custom gene sets. 6 Table of Contents Our software Our software is essential to accelerating the mastery of biology. As our portfolios unlock new levels of resolution and scale, they generate entirely new types of data at greater volumes and complexity than ever before.
Removed
We believe that the scientific and medical community currently understands only a tiny fraction of the full complexity of biology. The key to advancing human health lies in accelerating this understanding.
Added
Cell Ranger , introduced alongside our Chromium platform, has become a trusted scRNA-seq processing pipeline in scientific literature. We have extended the same principles of accessibility, scalability and reliability across all our platforms, ensuring that researchers can move from raw data to discovery with ease.
Removed
The human body consists of over 40 trillion cells, each with a genome of 3 billion DNA base pairs and a unique epigenetic program regulating the transcription of tens of thousands of different RNAs, which are then translated into tens of thousands of different proteins.
Added
Today, we provide a comprehensive and scalable software ecosystem that supports every stage of the research workflow, from experiment planning to data processing to visualization and exploration. By removing barriers to adoption, our tools help researchers generate high-quality data, achieve repeatable success and seamlessly scale their experiments.
Removed
Progress in the life sciences will require the ability to measure biological systems in a much more comprehensive fashion and to experiment on biological systems at fundamental resolutions and on massive scale, which are inaccessible with previously existing technologies.
Added
Loupe Browser (Chromium and Visium) enables intuitive single-cell, spatial and multiomic data visualization, helping researchers explore gene expression, cellular interactions and more—turning complex datasets into interactive insights that accelerate discovery. Xenium Explorer enables intuitive in situ data visualization, allowing researchers to explore subcellular gene expression, spatial organization and tissue-scale patterns with ease.
Removed
We believe that our technologies overcome these limitations, unlocking fundamental biological insights essential for advancing human health. 3 Table of Contents Our product portfolio consists of multiple integrated platforms that include instruments, consumables and software. These integrated solutions guide customers through the workflow from sample preparation to analysis and visualization.
Added
We estimate a total addressable market of more than $21 billion annually, assuming every lab or company in the global life sciences research tools market was to adopt our solutions at spend levels comparable to our existing users.
Removed
Each of our platforms is designed to interrogate a major class of biological information that is impactful to researchers at high resolution and scale: • Our Chromium platform enables high-throughput analysis of individual biological components.
Added
We estimate a serviceable addressable market of more than $13 billion annually, assuming every lab or company in the global life sciences research tools market that is currently using single cell, spatial or adjacent research techniques was to adopt our solutions at spend levels comparable to our existing users.
Removed
It is a precisely engineered reagent delivery system that divides a sample into individual components in up to a million or more partitions, enabling large numbers of parallel micro-reactions. In this manner, for example, the individual single cells of a large population of cells can be segregated so that each cell resides in its own partition.
Added
We sell our products through third-party distributors in certain regions of Asia, Europe, Oceania, Central America, South America, the Middle East and Africa. For the years ended December 31, 2024 and 2023, no single customer, including distributors, represented greater than 10% of our business.
Removed
Each partition then behaves as a micro-scale reaction vessel in which its contents are barcoded with a DNA sequence that specifically identifies those contents as being distinct from the contents of other partitions. Once biological material in each partition is barcoded, they can then be pooled and sequenced together.
Added
We consider our relationship with our employees to be positive. Competition The life sciences industry is highly competitive. Companies, both established and early stage, have introduced products for, among other things, genomics analysis, single cell analysis, spatial analysis and in situ analysis.
Removed
Similar to partitioning, spatial barcoding with large numbers of probes on an array can unlock tremendous insights, providing high resolution genomic information to visualize analytes across biological tissues. • Our Xenium platform for in situ analysis is designed to give scientists the ability not only to locate and type cells in their tissue context, but also to address a variety of specific questions based on previous knowledge of their sample often discovered using our Chromium and Visium platforms.
Added
Certain of these agreements also require that any products that are covered by the licensed patents be substantially manufactured in the United States.
Removed
Collectively, our platforms enable researchers to interrogate, understand and master biology at the appropriate resolution and scale. A summary of our solutions based on the platforms follows below. 4 Table of Contents We believe our platforms, which enable a comprehensive view of biology, target numerous market opportunities across the more than $67 billion global life sciences research tools market.
Removed
We view much of this total market opportunity as ultimately accessible to us due to our ability to answer a broad diversity of biological questions.
Removed
Based on the capabilities of our current solutions and focusing solely on cases where our current solutions offer alternative or complementary approaches to existing tools, we believe, based on our internal estimates, we could access approximately $16 billion of the global life sciences research tools market.
Removed
We believe we can further drive growth by improving or enabling new uses and applications of existing tools and technologies, as our solutions allow researchers to answer questions that may be impractical or impossible to address using existing tools.
Removed
We also expect to pursue additional opportunities that will further expand our opportunity, including new potential applications of our single cell, spatial and in situ technologies in the future. As of December 31, 2023, we employed a commercial team of 450 employees, many of whom hold PhD degrees, who help drive adoption of our products and support our vision.
Removed
We prioritize creating a superior user experience from pre-sales to onboarding through the generation of novel publishable discoveries, which drive awareness and adoption of our products.
Removed
We have a scalable, multi-channel commercial infrastructure including a direct sales force in North America and certain regions of Europe and distribution partners in Asia, certain regions of Europe, Oceania, Central America, South America, the Middle East and Africa that drives our customer growth. This is supplemented with an extensive and highly specialized customer service infrastructure with PhD-level specialists.

… 192 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

233 edited+80 added−93 removed446 unchanged
Biggest changeThese fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • fluctuations in demand for our products, which may vary significantly, our ability to accurately forecast demand, and our ability to increase penetration with our existing customers and to expand to new customers; • changes in general market conditions and other factors, including factors unrelated to our operating performance or the performance of our competitors; • the success of our recently introduced and recently announced products and new versions of existing products, and our ability to generate revenue for such products, and the introduction of new products or product enhancements by us or others in our industry including the timing of such introductions; • risks related to our business and demand for our products in China and elsewhere in the Asia-Pacific region, including competition or other factors; • the timing and magnitude of our price changes; • changes in volume and product mix, particularly from products with lower gross margins than other products that we sell, or changes in costs related to our instruments and consumables, including products which incur royalty payment obligations at higher rates than other products we sell; • changes in governmental funding of life sciences research and development or other changes that impact budgets, budget cycles or seasonal or other spending patterns of our customers; • changes in the competitive environment, including new product introductions, new versions of existing products with additional capabilities and features or pricing changes; • investment decisions we make with respect to the allocation of our resources, including regarding product development or to support our commercial organization; • differences in purchasing patterns across our customer base or across our three platforms and variances in consumables spending for each of our platforms; • our ability and the ability of our partners to successfully manufacture our instruments and consumables in necessary quantities at necessary quality, including due to the impacts of supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages; • the timing and amount of expenditures that we may incur to acquire, develop or commercialize additional products and technologies or for other purposes; • shortages, delays, production problems, distribution and quality issues with the materials we purchase for manufacturing, which could impact our ability to manufacture and ship our instruments, consumables and related components; • our inability or the inability of our customers to source our products or necessary equipment, components and materials used in our products or in conjunction with our products because of issues with suppliers, including supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages; • excess capacity expenses and higher inventory write-downs; • our dependence and the dependence of our customers on single source and sole source suppliers for some of the equipment, components and materials used in our products or in conjunction with our products; • the effects of inflation on us or our customers, manufacturers and suppliers, including increases in the cost of labor and materials; • higher than anticipated warranty costs; • the timing and amount of expenditures (including success fees) related to litigation, as well as the outcomes of and related rulings in the litigation and administrative proceedings which may vary substantially from quarter to quarter; • the outcome of any current or future litigation or governmental investigations involving us or other third parties; • changes in customer payment timing trends including potential increases in the days sales outstanding (DSO); • expenses related to our facilities and real estate; • our ability to successfully integrate personnel, technology and other assets that we acquire into our company; 29 Table of Contents • difficulties encountered by our commercial carriers in delivering our instruments or consumables, whether as a result of external factors such as weather, customs or import processes, transportation bottlenecks, port lockdowns or slowdowns or fuel shortages or internal issues such as labor disputes or difficulties hiring and retaining adequate staffing; • disruptions in customers’ on-going experiments or interruptions in the ability of our customers to complete research projects; • reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions, such as reduced or delayed spending on instruments or consumables due to reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions in which our instruments and solutions are used; • our reputation or public perception of us; • the impacts of geopolitical issues, infectious disease, epidemics or pandemics on our business operations and on the business operations of our customers, manufacturers and suppliers; and • the other factors described in this “ Risk Factors ” section.
Biggest changeThese fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • delays in, changes in terms of, or reduction of governmental funding of life sciences research, generally, or of research projects which could utilize our solutions, specifically, or other changes that impact budgets, budget cycles or seasonal or other spending patterns of our customers, including potential freezes of, reductions in or reduced availability of National Institutes of Health (NIH) or other funding for our customers; • modifications to our commercial processes and organization, including changes we made to our commercial processes and organization to increase effectiveness; • the timing and magnitude of our price changes, including the effects of potentially lowering prices for certain of our products in 2025; • the effects of competition, including competition with both new and existing companies offering products that compete or intend to compete with our products and may offer performance, price or other advantages as well as researchers developing their own solutions; • enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers, including retaliatory measures taken by trade partners; • the effects of inflation on us or our customers, manufacturers and suppliers, including increases in the cost of labor and materials, including as a result of tariffs imposed by the United States which are currently, or in the future, under consideration, proposed or enacted; • excess capacity expenses and inventory write-downs; • fluctuations in demand for our products, which may vary significantly, our ability to accurately forecast demand, and our ability to increase penetration with our existing customers and to expand to new customers; • changes in general market conditions and other factors, including factors unrelated to our operating performance or the performance of our competitors; • changes in volume and product mix, particularly from products with lower gross margins than other products that we sell, or changes in costs related to our instruments and consumables, including products which incur royalty payment obligations at higher rates than other products we sell; 14 Table of Contents • the success of our recently introduced and recently announced products and new versions of existing products, and our ability to generate revenue for such products, and the introduction of new products or product enhancements by us or others in our industry including the timing of such introductions; • disruptions in customers’ on-going experiments or interruptions in the ability of our customers to complete research projects; • investment decisions we make with respect to the allocation of our resources, including regarding product development or to support our commercial organization; • risks related to our business and demand for our products in China and elsewhere in the Asia-Pacific region, including competition or other factors; • differences in purchasing patterns across our customer base or across our two portfolios and variances in consumables spending for each of our portfolios; • higher than anticipated warranty costs; • the timing and amount of expenditures that we may incur to acquire, develop or commercialize additional products and technologies or for other purposes; • the timing and amount of expenditures (including success fees) related to litigation, as well as the outcomes of and related rulings in the litigation and administrative proceedings which may vary substantially from quarter to quarter; • the outcome of any current or future litigation or governmental investigations involving us or other third parties; • our ability and the ability of our partners to successfully manufacture our instruments and consumables in necessary quantities at necessary quality, including due to the impacts of supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages; • shortages, delays, production problems, distribution and quality issues with the materials we purchase for manufacturing, which could impact our ability to manufacture and ship our instruments, consumables and related components; • our inability or the inability of our customers to source our products or necessary equipment, components and materials used in our products or in conjunction with our products, including shortages of consumables or other components and materials used in gene sequencing (which occurred in 2024), because of issues with suppliers, including supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages; • our dependence and the dependence of our customers on single source and sole source suppliers for some of the equipment, components and materials used in our products or in conjunction with our products; • changes in customer payment timing trends including potential increases in the days sales outstanding (DSO); • expenses related to our facilities and real estate; • our ability to successfully integrate personnel, technology and other assets that we acquire into our company; • difficulties encountered by our commercial carriers in delivering our instruments or consumables, whether as a result of external factors such as weather, customs or import processes, transportation bottlenecks, port lockdowns or slowdowns or fuel shortages or internal issues such as labor disputes or difficulties hiring and retaining adequate staffing; • reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions, such as reduced or delayed spending on instruments or consumables due to reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions in which our instruments and solutions are used; • our reputation or public perception of us; • the impacts of geopolitical issues, infectious disease, epidemics or pandemics on our business operations and on the business operations of our customers, manufacturers and suppliers; and • the other factors described in this “ Risk Factors ” section.
There can be no assurance that our revenue and gross profit will increase sufficiently such that our net losses decline, or we attain cash flows from operating activities in excess of our capital investment requirements on a sustained basis or attain profitability, in the future.
There can be no assurance that our revenue and gross profit will increase sufficiently such that our net losses decline, or that we attain cash flows from operating activities in excess of our capital investment requirements on a sustained basis or attain profitability, in the future.
We sell our products through third-party distributors in Asia, certain regions of Europe, Oceania, Central America, South America, the Middle East and Africa. We intend to continue to grow our business internationally and to do so we must attract additional distributors and retain existing distributors to maximize the commercial opportunity for our products.
We sell our products through third-party distributors in certain regions of Asia, Europe, Oceania, Central America, South America, the Middle East and Africa. We intend to continue to grow our business internationally and to do so we must attract additional distributors and retain existing distributors to maximize the commercial opportunity for our products.
If our guidance varies from actual results or if we fail to meet other expectations regarding our business, the market value of our common stock could decline significantly. The market price of our Class A common stock may be volatile, which could result in substantial losses for investors.
If our guidance varies from actual results or if we fail to meet other expectations regarding our business, the market value of our Class A common stock could decline significantly. The market price of our Class A common stock may be volatile, which could result in substantial losses for investors.
This means that while our directors and officers have direct insurance coverage for acts which the company is not legally required or permitted to indemnify them, the company itself does not have coverage for amounts incurred in defending, among other things, stockholder derivative or securities class action lawsuits or in the event of certain investigative actions, for amounts it must pay as a result of such suits or amounts it must pay to indemnify our directors or officers.
This means that while our directors and officers have direct insurance coverage for acts which the company is not legally required or permitted to indemnify them, the company itself does not have coverage for amounts incurred in defending, among other things, stockholder derivative or securities class action lawsuits or in the event of certain investigative actions, for amounts it must pay as a result of such suits or amounts it must pay to indemnify our directors or officers.
Due to the significant lead time involved in bringing a new product to market, we are required to make a number of assumptions and estimates regarding the technical or commercial feasibility of a new product, including assumptions and estimates regarding our or our partners’ ability to design and manufacture potential solutions, the biological analytes that researchers will want to measure, the appropriate method of measuring such analytes, how researchers intend to use the resulting data and the scope and type of data that will be most useful to researchers.
Due to the significant lead time involved in bringing a new product or version to market, we are required to make a number of assumptions and estimates regarding the technical or commercial feasibility of a new product or version, including assumptions and estimates regarding our or our partners’ ability to design and manufacture potential solutions, the biological analytes that researchers will want to measure, the appropriate method of measuring such analytes, how researchers intend to use the resulting data and the scope and type of data that will be most useful to researchers.
Any future design issues, unforeseen manufacturing problems, such as contamination of our third-party manufacturer's facilities, equipment malfunctions, aging components, quality issues with components and materials sourced from third-party suppliers, or failures to strictly follow procedures or meet specifications, may have a material adverse effect on our brand, business, financial condition and operating results and could result in us or our third-party manufacturers losing ISO quality management certifications.
Any design issues, unforeseen manufacturing problems, such as contamination of our third-party manufacturer's facilities, equipment malfunctions, aging components, quality issues with components and materials sourced from third-party suppliers, or failures to strictly follow procedures or meet specifications, may have a material adverse effect on our brand, business, financial condition and operating results and could result in us or our third-party manufacturers losing ISO quality management certifications.
In addition, while we have invested, and expect to continue to invest, significantly in research and development and the commercialization of both new products and improved versions of existing products, investment decisions we make or have made with respect to the allocation of our substantial but finite resources, including regarding product development or to support our commercial organization, may not be successful or realize their anticipated benefits.
In addition, while we have invested, and expect to continue to invest, significantly in research and development and the commercialization of both new products and new versions of existing products, investment decisions we make or have made with respect to the allocation of our substantial but finite resources, including regarding product development or to support our commercial organization, may not be successful or realize their anticipated benefits.
In addition, our restated certificate of incorporation and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • any transaction that would result in a change in control of our company requires the approval of a majority of our outstanding Class B common stock voting as a separate class; • our multi-class common stock structure provides our holders of Class B common stock with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A common stock and Class B common stock; • our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause by the affirmative vote of holders of at least two-thirds of the voting power of our then outstanding capital stock; • certain amendments to our amended and restated certificate of incorporation require the approval of stockholders holding two-thirds of the voting power of our then outstanding capital stock; • any stockholder-proposed amendment to our amended and restated bylaws requires the approval of stockholders holding two-thirds of the voting power of our then outstanding capital stock; • our stockholders are only able to take action at a meeting of stockholders and are not able to take action by written consent for any matter; • our stockholders are able to act by written consent only if the action is first recommended or approved by the board of directors; • vacancies on our board of directors are able to be filled only by our board of directors and not by stockholders; • only our chairman of the board of directors, chief executive officer or a majority of the board of directors are authorized to call a special meeting of stockholders; • certain litigation against us can only be brought in Delaware; • our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock; and • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
In addition, our restated certificate of incorporation and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • any transaction that would result in a change in control of our company requires the approval of a majority of our outstanding Class B common stock voting as a separate class; • our multi-class common stock structure provides our holders of Class B common stock with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A common stock and Class B common stock; • our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause by the affirmative vote of holders of at least two-thirds of the voting power of our then outstanding capital stock; 54 Table of Contents • certain amendments to our amended and restated certificate of incorporation require the approval of stockholders holding two-thirds of the voting power of our then outstanding capital stock; • any stockholder-proposed amendment to our amended and restated bylaws requires the approval of stockholders holding two-thirds of the voting power of our then outstanding capital stock; • our stockholders are only able to take action at a meeting of stockholders and are not able to take action by written consent for any matter; • our stockholders are able to act by written consent only if the action is first recommended or approved by the board of directors; • vacancies on our board of directors are able to be filled only by our board of directors and not by stockholders; • only our chairman of the board of directors, chief executive officer or a majority of the board of directors are authorized to call a special meeting of stockholders; • certain litigation against us can only be brought in Delaware; • our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock; and • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Such success is dependent upon several factors, including feasibility, competition among our products for Company resources and in customer purchasing decisions, functionality, competitive pricing and integration with existing and emerging technologies. The development timelines of certain potential new products may be delayed or precluded due to prioritization of other new products.
Such success is dependent upon several factors, including feasibility, competition among our products for Company resources and in customer purchasing decisions, functionality, competitive pricing and integration with existing and emerging technologies. The development timelines of certain potential new products or new versions may be delayed or precluded due to prioritization of other new products or versions.
In addition, our growth strategy involves launching new solutions and expanding sales of existing solutions into new areas in which we have limited or no experience. We also expect to pursue additional opportunities that will further expand our opportunity, including new potential applications of our single cell, spatial and in situ technologies in the future.
In addition, our growth strategy involves launching new solutions and expanding sales of existing solutions into new areas in which we have limited or no experience. We also expect to pursue additional opportunities that will further expand our opportunity, including new products and new potential applications of our single cell, spatial and in situ technologies in the future.
Current and potential customers for our current and future products, including customers interested in genomics, single cell analysis, spatial analysis or in situ solutions, are accustomed to rapid technological change and innovation. Competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements.
Existing and potential customers for our current and future products, including customers interested in genomics, single cell analysis, spatial analysis or in situ solutions, are accustomed to rapid technological change and innovation. Competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements.
Additionally, changes in our product mix may negatively affect our gross margins. We may never be able to generate sufficient revenue to achieve or sustain cash flows from operating activities in excess of our capital investment requirements or profitability and our recent and historical growth should not be considered indicative of our future performance.
Additionally, changes in our product mix may negatively affect our gross margins. We may never be able to generate sufficient revenue to achieve or sustain cash flows from operating activities in excess of our capital investment requirements or profitability and our historical growth should not be considered indicative of our future performance.
The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.
The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future prospects.
Other competitors are in the process of developing novel technologies which may lead to products that rival or replace our products. We expect new competitors to continue to emerge and the intensity of competition with both new and existing competitors to continue to increase. We also face competition from researchers developing their own solutions.
In addition, other competitors are in the process of developing novel technologies which may lead to products that rival or replace our products. We expect new competitors to continue to emerge and the intensity of competition with both new and existing competitors to continue to increase. We also face competition from researchers developing their own solutions.
If we do not sustain or successfully manage our growth and anticipated growth, our business and prospects will be harmed. We have historically experienced rapid growth and we expect that future growth will place significant strains on our management, operational and manufacturing systems and processes, financial systems and internal controls and other aspects of our business.
If we do not sustain or successfully manage our growth and anticipated growth, our business and prospects will be harmed. We have historically experienced rapid organizational growth and we expect that future growth will place significant strains on our management, operational and manufacturing systems and processes, financial systems and internal controls and other aspects of our business.
If our research and development programs were disrupted by a disaster or catastrophe or for other reasons, the launch of new products and the timing of improvements to existing products could be significantly delayed and could adversely impact our ability to compete with other available products and solutions.
If our research and development programs were disrupted by a disaster or catastrophe or for other reasons, the launch of new products or new versions of existing products and the timing of improvements to existing products could be significantly delayed and could adversely impact our ability to compete with other available products and solutions.
The risks associated with the introduction of new products include the difficulties of predicting customer demand and effectively managing inventory levels to ensure adequate supply of the new product and avoiding excess supply of the legacy product, including legacy versions of our instruments which are supplanted by new versions.
The risks associated with the introduction of new products or new versions include the difficulties of predicting customer demand and effectively managing inventory levels to ensure adequate supply of the new product or new versions and avoiding excess supply of the legacy product, including legacy versions of our instruments which are supplanted by new versions.
In addition, certain members of our management have not previously worked together for an extended period of time, do not have experience managing a public company or do not have experience managing a global business, which may affect how they manage our growth.
In addition, certain members of our management have not previously worked together for an extended period of time, do not have experience managing a public company or do not have experience managing a global business, which may affect how they manage our business.
Our success depends on our ability to develop new products and applications for our technology while improving the performance and cost-effectiveness of our existing products, in each case in ways that address current and anticipated customer requirements.
Our success depends on our ability to develop new products. new versions and applications for our technology while improving the performance and cost-effectiveness of our existing products, in each case in ways that address current and anticipated customer requirements.
Lead times for some of these components can be several months or more and in the past have been, and in the future could be again, extended due to supply chain disruptions, labor shortages or other factors.
Lead times for some of these components can be several months or more and in the past have been, and in the future could be, extended due to supply chain disruptions, labor shortages or other factors.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • others will not develop, manufacture and/or commercialize similar or alternative products or technologies that do not infringe our patents; • any patents issued to us will provide a basis for an exclusive market for our commercially viable products or technologies, will provide us with any competitive advantages or will not be challenged by third parties; • any of our challenged patents will be found to ultimately be valid and enforceable; • any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products or services; • any of our pending patent applications will issue as patents; • we will be able to successfully manufacture and commercialize our products on a substantial scale before relevant patents we may have expire; • we were the first to make the inventions covered by each of our patents and pending patent applications; • we were the first to file patent applications for these inventions; • we will develop additional proprietary technologies or products that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • others will not develop, manufacture and/or commercialize similar or alternative products or technologies that do not infringe our patents; • any patents issued to us will provide a basis for an exclusive market for our commercially viable products or technologies, will provide us with any competitive advantages or will not be challenged by third parties; • any of our challenged patents will be found to ultimately be valid and enforceable; 40 Table of Contents • any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products or services; • any of our pending patent applications will issue as patents; • we will be able to successfully manufacture and commercialize our products on a substantial scale before relevant patents we may have expire; • we were the first to make the inventions covered by each of our patents and pending patent applications; • we were the first to file patent applications for these inventions; • we will develop additional proprietary technologies or products that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
The following are examples of litigation and other adversarial proceedings or disputes that we could become a party to involving our patents or patents licensed to us: • we have initiated, and in the future may initiate, litigation or other proceedings against third parties to enforce our patent rights; • third parties have initiated, and in the future may initiate, litigation or other proceedings seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their product or technology does not infringe our patents or patents licensed to us or that such patents are invalid or unenforceable; • third parties have initiated, and in the future may initiate, oppositions, IPRs, post grant reviews or reexamination proceedings challenging the validity or scope of our patent rights, requiring us and/or licensors to participate in such proceedings to defend the validity and scope of our patents; • there are, and in the future may be, more challenges or disputes regarding inventorship or ownership of patents currently identified as being owned by or licensed to us; or 68 Table of Contents • at our initiation or at the initiation of a third-party, the USPTO may initiate an interference between patents or patent applications owned by or licensed to us and those of our competitors, requiring us and/or licensors to participate in an interference proceeding to determine the priority of invention, which could jeopardize our patent rights.
The following are examples of litigation and other adversarial proceedings or disputes that we could become a party to involving our patents or patents licensed to us: • we have initiated, and in the future may initiate, litigation or other proceedings against third parties to enforce our patent rights; • third parties have initiated, and in the future may initiate, litigation or other proceedings seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their product or technology does not infringe our patents or patents licensed to us or that such patents are invalid or unenforceable; • third parties have initiated, and in the future may initiate, oppositions, IPRs, post grant reviews or reexamination proceedings challenging the validity or scope of our patent rights, requiring us and/or licensors to participate in such proceedings to defend the validity and scope of our patents; • there are, and in the future may be, more challenges or disputes regarding inventorship or ownership of patents currently identified as being owned by or licensed to us; or • at our initiation or at the initiation of a third-party, the USPTO may initiate an interference between patents or patent applications owned by or licensed to us and those of our competitors, requiring us and/or licensors to participate in an interference proceeding to determine the priority of invention, which could jeopardize our patent rights.
Furthermore, the academic budgetary cycle similarly requires grantees to ‘use or lose’ their grant funding, which seems to be tied disproportionately to the end of the calendar year, driving sales higher during the fourth quarter.
Furthermore, the academic budgetary cycle similarly requires grantees to ‘use or lose’ their grant funding, which seems to be tied disproportionately to the end of the calendar year, historically driving sales higher during the fourth quarter.
International operations entail a variety of other risks, including, without limitation: • variances in demand for our products across regions, including in China and elsewhere in the Asia-Pacific region; • challenges in staffing and managing foreign operations, including executing our commercial goals and our dependence on our distributors in certain regions; • currency fluctuations ; 34 Table of Contents • potentially longer sales cycles and more time required to engage and educate customers on the benefits of our products outside of the United States; • complexities associated with managing third-party contract manufacturers and suppliers located outside of the United States; • United States and foreign government trade restrictions, including those which may impose restrictions on the importation, exportation, re-exportation, sale, shipment or other transfer of programming, technology, components and/or services to foreign persons or entities; • reduced protection for intellectual property rights in some countries and practical difficulties of enforcing intellectual property or other legal rights abroad; • changes in diplomatic and trade relationships, including new tariffs, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers; • tariffs or other restrictions imposed by the United States on goods from other countries and tariffs or other restrictions imposed by other countries on United States goods, or increases in existing tariffs; • deterioration of political relations between the United States and China, the United States and Russia or other nations or political organizations, which could have a material adverse effect on our sales and operations in these countries; • the potential need for localized software, documentation and post-sales support; • changes in social, political and economic conditions or in laws, regulations and policies governing foreign trade, manufacturing, development and investment both domestically as well as in the other countries and jurisdictions into which we sell our products, including as a result of the United Kingdom’s exit from the European Union; • difficulties in obtaining export licenses or in overcoming other trade barriers and restrictions resulting in delivery delays or our inability to manufacture or sell our products in certain countries; • natural disasters, infectious diseases, conflict, geopolitical turmoil, war, civil unrest, epidemics, pandemics or major catastrophic events; • increased financial accounting and reporting burdens and complexities; • higher levels of credit risk and payment fraud and longer payment cycles associated with, and increased difficulty of payment collections from certain international customers; and • significant taxes or other burdens of complying with a variety of foreign laws, including laws relating to privacy and data protection such as the European Union General Data Protection Regulation (“GDPR”).
International operations entail a variety of other risks, including, without limitation: • variances in demand for our products across regions, including in China and elsewhere in the Asia-Pacific region; • challenges in staffing and managing foreign operations, including executing our commercial goals and our dependence on our distributors in certain regions; • tariffs or other restrictions imposed by the United States on goods from other countries and tariffs or other restrictions imposed by other countries on United States goods, or increases in existing tariffs; • changes in diplomatic and trade relationships, including new or enhanced tariffs or duties, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers; • currency fluctuations ; • potentially longer sales cycles and more time required to engage and educate customers on the benefits of our products outside of the United States; 24 Table of Contents • complexities associated with managing third-party contract manufacturers and suppliers located outside of the United States; • United States and foreign government trade restrictions, including those which may impose restrictions on the importation, exportation, re-exportation, sale, shipment or other transfer of programming, technology, components and/or services to foreign persons or entities; • reduced protection for intellectual property rights in some countries and practical difficulties of enforcing intellectual property or other legal rights abroad; • deterioration of political relations between the United States and China, the United States and Russia or other nations or political organizations, which could have a material adverse effect on our sales and operations in these countries; • changes in social, political and economic conditions or in laws, regulations and policies governing foreign trade, manufacturing, development and investment both domestically as well as in the other countries and jurisdictions into which we sell our products; • difficulties in obtaining export licenses or in overcoming other trade barriers and restrictions resulting in delivery delays or our inability to manufacture or sell our products in certain countries; • natural disasters, infectious diseases, conflict, geopolitical turmoil, war, civil unrest, epidemics, pandemics or major catastrophic events; • increased financial accounting and reporting burdens and complexities; • the potential need for localized software, documentation and post-sales support; • higher levels of credit risk and payment fraud and longer payment cycles associated with, and increased difficulty of payment collections from certain international customers; and • significant taxes or other burdens of complying with a variety of foreign laws, including laws relating to privacy and data protection such as the European Union General Data Protection Regulation (“GDPR”).
We intend to launch additional new products and new versions of existing products in the near future. Further development and commercialization of our current and future products are key elements of our growth strategy.
We intend to launch additional new products and new versions of existing products in the near future. Further development and commercialization of our current and future products are key elements of our strategy.
In addition to the factors discussed in this “ Risk Factors ” section and elsewhere in this report, these factors include: • the timing of our launch of future products and degree to which the launch and commercialization thereof meets the expectations of securities analysts and investors; • changes in the structure or funding of research at academic and research laboratories and institutions, including changes that would affect their ability to purchase our instruments or consumables; • the success of existing or new competitive businesses or technologies; • announcements about new research programs or products of our competitors; • general economic, industry and market conditions; • volatility and variations in market conditions in the life sciences sector generally, or the genomics sector specifically; • whether our financial results meet our publicly announced expectations or the expectations of securities analysts or investors; • actual or anticipated changes in our estimates as to our financial results or development timelines, variations in our financial results or those of companies that are perceived to be similar to us or changes in estimates or recommendations by securities analysts, if any, that cover our Class A common stock or companies that are perceived to be similar to us; • investor perceptions of us or our industry; • the level of expenses related to any of our research and development programs or products; • litigation and governmental investigations involving us, our industry or both; • the outcomes of and related rulings in the litigation and administrative proceedings in which we are currently or may in the future become involved; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • regulatory or legal developments in the United States and other countries; • the announcement or expectation of additional financing efforts; 71 Table of Contents • stock-based compensation expense; • the failure or discontinuation of any of our product development and research programs; • sales of our Class A common stock or Class B common stock by us, our insiders or other stockholders; • natural disasters, infectious diseases, conflict, war, civil unrest, epidemics or pandemics such as COVID-19 outbreaks or resurgences or major catastrophic events; and • the other factors described in this “ Risk Factors ” section.
In addition to the factors discussed in this “ Risk Factors ” section and elsewhere in this report, these factors include: • the timing of our launch of future products and degree to which the launch and commercialization thereof meets the expectations of securities analysts and investors; • changes in the structure or funding of research at academic and research laboratories and institutions, including changes that would affect their ability to purchase our instruments or consumables; • the success of existing or new competitive businesses or technologies; • announcements about new research programs or products of our competitors; • general economic, industry and market conditions; • volatility and variations in market conditions in the life sciences sector generally, or the genomics sector specifically; • whether our financial results meet our publicly announced expectations or the expectations of securities analysts or investors; • actual or anticipated changes in our estimates as to our financial results or development timelines, variations in our financial results or those of companies that are perceived to be similar to us or changes in estimates or recommendations by securities analysts, if any, that cover our Class A common stock or companies that are perceived to be similar to us; • investor perceptions of us or our industry; • the level of expenses related to any of our research and development programs or products; • litigation and governmental investigations involving us, our industry or both; • the outcomes of and related rulings in the litigation and administrative proceedings in which we are currently or may in the future become involved; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • regulatory or legal developments in the United States and other countries; • the announcement or expectation of additional financing efforts; • stock-based compensation expense; • the failure or discontinuation of any of our product development and research programs; • sales of our Class A common stock or Class B common stock by us, our insiders or other stockholders; • natural disasters, infectious diseases, conflict, war, civil unrest, epidemics or pandemics or resurgences or major catastrophic events; and • the other factors described in this “ Risk Factors ” section.
Additionally, we compete with both companies that may have greater financial resources than we do and early stage companies that promise short-term growth opportunities. We may not be able to attract, retain, train or motivate qualified employees in the future and our inability to do so could materially harm our operating results and growth prospects.
Additionally, we compete with both companies that may have greater financial resources than we do and early stage companies that promise short-term growth opportunities. We may not be able to attract, retain, train or motivate qualified employees in the future and our inability to do so could materially harm our operating results and prospects of success.
The summary risk factors described above should be read together with the text of the full risk factors below in this section entitled “ Risk Factors ” and the other information set forth in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.
The summary risk factors described above should be read together with the text of the full risk factors below in this section titled “ Risk Factors ” and the other information set forth in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.
Our previous acquisitions and any future transactions could be material to our financial condition and operating results and expose us to many risks, including: 44 Table of Contents • increases in our expenses and reductions in our cash available for operations and other uses; • difficulties integrating acquired personnel, technologies and operations into our existing business; • failure to realize anticipated benefits or synergies from such a transaction; • unanticipated costs of or legal exposure related to complying with existing and future laws and regulations, including land use, environmental or antitrust-related laws and regulations; • disruption in our relationships with customers, distributors, manufacturers, suppliers or other third parties as a result of such a transaction; • unanticipated liabilities related to acquired real estate or companies, including liabilities related to acquired intellectual property or litigation relating thereto; • diversion of management time and focus from operating our business; • possible write-offs or impairment charges relating to acquired businesses; and • potential higher taxes if our tax positions relating to certain acquisitions were challenged.
Our previous acquisitions and any future transactions could be material to our financial condition and operating results and expose us to many risks, including: • increases in our expenses and reductions in our cash available for operations and other uses; • difficulties integrating acquired personnel, technologies and operations into our existing business; • failure to realize anticipated benefits or synergies from such a transaction; • unanticipated costs of or legal exposure related to complying with existing and future laws and regulations, including land use, antitrust, environmental or hazardous waste-related laws and regulations; • disruption in our relationships with customers, distributors, manufacturers, suppliers or other third parties as a result of such a transaction; • unanticipated liabilities related to acquired real estate or companies, including liabilities related to acquired intellectual property or litigation relating thereto; • diversion of management time and focus from operating our business; • possible write-offs or impairment charges relating to acquired businesses; and • potential higher taxes if our tax positions relating to certain acquisitions were challenged.
Because there can be a considerable delay between the launch of a new life sciences product or a new application of an existing life science product and publication of research using such product, new life sciences products or applications do not generally contribute a meaningful amount of revenue in the year they are introduced.
Because there can be a considerable delay between the launch of a new life sciences product, new version or a new application of an existing life science product and publication of research using such product, new life sciences products, versions or applications do not generally contribute a meaningful amount of revenue in the year they are introduced.
Accordingly, further deterioration in military, political and economic relations between China and Taiwan, as well as the ongoing geopolitical and economic uncertainty between the U.S. and China and other geopolitical risks with respect to China and Taiwan, may cause disruptions in our ability to source products from China Taiwan, including which may, directly or indirectly, harm our business.
Accordingly, further deterioration in military, political and economic relations between China and Taiwan, as well as the ongoing geopolitical and economic uncertainty between the U.S. and China and other geopolitical risks with respect to China and Taiwan, may cause disruptions in our ability to source products or materials from or to China and Taiwan, which may, directly or indirectly, harm our business.
Labor shortages, logistics, shipping or other distribution operations difficulties or disruption in the supply of equipment, materials or components could impair our ability to sell our products and meet customer demand, and also could delay the launch of new products, any of which could harm our business and results of operations.
Labor shortages, logistics, shipping or other distribution operations difficulties or disruption in the supply of equipment, materials or components could impair our ability to sell our products and meet customer demand, and also could delay the launch of new products or new versions of existing products, any of which could harm our business and results of operations.
Factors that could impact our suppliers’ willingness and ability to continue to provide us with the required equipment, materials and components include shortages, alternative priorities, logistics, shipping or other distribution difficulties, disruption at or affecting our suppliers’ facilities, such as difficulties hiring and retaining adequate staffing, work stoppages or natural disasters, infectious disease, epidemics or pandemics, adverse weather or other conditions that affect their supply, the financial condition of our suppliers, disagreements, disputes or deterioration in our relationships with these suppliers or the decision by such suppliers to introduce products that compete directly with our solutions.
Factors that could impact our suppliers’ willingness and ability to continue to provide us with the required equipment, materials and components include shortages, alternative priorities, logistics, tariffs or other trade restrictions impacting our suppliers, shipping or other distribution difficulties, disruption at or affecting our suppliers’ facilities, such as difficulties hiring and retaining adequate staffing, work stoppages or natural disasters, infectious disease, epidemics or pandemics, adverse weather or other conditions that affect their supply, the financial condition of our suppliers, disagreements, disputes or deterioration in our relationships with these suppliers or the decision by such suppliers to introduce products that compete directly with our solutions.
Changes in patent law could diminish the value of our patents in general, thereby impairing our ability to protect our current and future products, services or technologies, and could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our current or future patents.
Changes in patent law or the organizational changes to the USPTO could diminish the value of our patents in general, thereby impairing our ability to protect our current and future products, services or technologies, and could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our current or future patents.
Such issues, issues with our manufacturing processes or the manufacturing processes of our third-party manufacturers, shipping issues, inaccurate demand forecasts or other production issues could result in our inability to produce our products in sufficient volumes and at sufficient quality to meet demand, supply our products to our customers and for our research and development 38 Table of Contents needs, backorders, insufficient inventory, excess inventory, shipping delays, product deficiencies or other operational failures.
Such issues, issues with our manufacturing processes or the manufacturing processes of our third-party manufacturers, shipping issues, inaccurate demand forecasts or other production issues could result in our inability to produce our products in sufficient volumes and at sufficient quality to meet demand, supply our products to our customers and for our research and development needs, backorders, insufficient inventory, excess inventory, shipping delays, product deficiencies or other operational failures.
While we have the right to opt our patents out of the UPC over the first seven years of the court’s existence, doing so may preclude us from realizing the benefits of the UPC. 57 Table of Contents Moreover, the decision whether to opt-in or opt-out of Unitary Patent status will require coordinating with co-applicants, if any, adding complexity to any such decision.
While we have the right to opt our patents out of the UPC over the first seven years of the court’s existence, doing so may preclude us from realizing the benefits of the UPC. Moreover, the decision whether to opt-in or opt-out of Unitary Patent status will require coordinating with co-applicants, if any, adding complexity to any such decision.
In a patent or other intellectual property infringement proceeding, a court may decide that a patent or other intellectual property right of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims or other intellectual property narrowly or refuse to stop the other party from using the technology at issue on the 53 Table of Contents grounds that our patents or other intellectual property do not cover the technology in question.
In a patent or other intellectual property infringement proceeding, a court may decide that a patent or other intellectual property right of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims or other intellectual property narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents or other intellectual property do not cover the technology in question.
Although we possess insurance for damage to our property and the disruption of our business, this insurance may not be sufficient 42 Table of Contents to cover all of our potential losses, may not cover every potential type of loss event (including earthquakes as we do not carry earthquake insurance coverage) and may not continue to be available to us on acceptable terms, or at all.
Although we possess insurance for damage to our property and the disruption of our business, this insurance may not be sufficient to cover all of our potential losses, may not cover every potential type of loss event (including earthquakes as we do not carry earthquake insurance coverage) and may not continue to be available to us on acceptable terms, or at all.
If any of our intellectual property rights or confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.
If any of our intellectual property rights or confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such 43 Table of Contents information was independently developed by a competitor, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.
In recent years, stock markets in general, and the market for life sciences technology companies in particular (including companies in the genomics, biotechnology, diagnostics and related sectors), have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations.
In recent years, stock markets in general, and the market for life sciences technology companies in particular (including companies in the genomics, biotechnology, diagnostics and related sectors), have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose 56 Table of Contents stock is experiencing those price and volume fluctuations.
For example, we consummated two acquisitions in each of 2018 and 2020, one in 2021 and another in 2023, and we intend to continue to make investments that meet management’s criteria to expand or add key technologies that we believe will facilitate the commercialization of new products or new versions of existing products in the future.
For example, we consummated two acquisitions in each of 2018 and 2020, one in 2021 and another in 2023, and we intend to continue to make investments that meet management’s criteria to expand or add key technologies that we believe 28 Table of Contents will facilitate the commercialization of new products or new versions of existing products in the future.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property rights. We may also be subject to claims that our former employees, contractors or collaborators, or other third parties have an ownership interest in our current or future patents, patent applications, or other intellectual property rights, including as an inventor or co-inventor.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property rights. 41 Table of Contents We may also be subject to claims that our former employees, contractors or collaborators, or other third parties have an ownership interest in our current or future patents, patent applications, or other intellectual property rights, including as an inventor or co-inventor.
Significant interruptions to our research and development programs could cause us to delay the introduction of new products or improvements to existing products, which could adversely impact our business, our results of operations and the competitiveness of our products.
Significant interruptions to our research and development programs could cause us to delay the introduction of new products or new versions of existing products, which could adversely impact our business, our results of operations and the competitiveness of our products.
In the event that the FDA or foreign authorities requires us to obtain marketing authorization or certification of our RUO products in the 48 Table of Contents future, there can be no assurance that these authorities will grant any clearance, approval or certification requested by us in a timely manner, or at all.
In the event that the FDA or foreign authorities requires us to obtain marketing authorization or certification of our RUO products in the future, there can be no assurance that these authorities will grant any clearance, approval or certification requested by us in a timely manner, or at all.
A third party that perceives us to be a 54 Table of Contents competitor may be unwilling to assign or license its intellectual property rights to us. In addition, the licensing or acquisition of third-party intellectual property rights is a competitive area, and other companies may also pursue similar strategies to license or acquire such third party’s intellectual property rights.
A third party that perceives us to be a competitor may be unwilling to assign or license its intellectual property rights to us. In addition, the licensing or acquisition of third-party intellectual property rights is a competitive area, and other companies may also pursue similar strategies to license or acquire such third party’s intellectual property rights.
While we believe our assumptions and the data underlying our estimates of the total annual addressable market for our solutions are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates, or those underlying the third-party data we have used, may change at any time, thereby reducing the accuracy of our estimates.
While we believe our assumptions and the data underlying our market estimates for our solutions are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates, or those underlying the third-party data we have used, may change at any time, thereby reducing the accuracy of our estimates.
Our current product roadmap calls for the introduction of new products and new versions of existing products, which may require that we utilize manufacturers with which we have little or no prior manufacturing experience and the risk of manufacturing defects or quality control issues could increase as a result.
Our current product roadmap calls for the introduction of new products and new versions of existing products, which may require that we utilize manufacturers with which we have little or no prior manufacturing experience, which could increase the risk of manufacturing defects or quality control issues.
These suppliers may not indemnify us in the event that a third party alleges the use of such components infringes its intellectual property rights. 64 Table of Contents Any lawsuits relating to intellectual property rights could subject us to significant liability for damages and invalidate our intellectual property.
These suppliers may not indemnify us in the event that a third party alleges the use of such components infringes its intellectual property rights. Any lawsuits relating to intellectual property rights could subject us to significant liability for damages and invalidate our intellectual property.
In addition to the litigation discussed above, we may in the future be a party to other litigation or legal proceedings to protect, enforce or defend our patents or other intellectual property, which, if resolved adversely to us, could invalidate or render unenforceable our intellectual property or generally preclude us from restraining, enjoining or otherwise seeking to exclude competitors from commercializing products using technology developed or used by us.
In addition to the litigation in Note 7, we may in the future be a party to other litigation or legal proceedings to protect, enforce or defend our patents or other intellectual property, which, if resolved adversely to us, could invalidate or render unenforceable our intellectual property or generally preclude us from restraining, enjoining or otherwise seeking to exclude competitors from commercializing products using technology developed or used by us.
In addition, the Inflation Reduction Act of 2022 recently became law and imposes a minimum tax on certain corporations with book income of at least $1 billion, subject to certain adjustments, and a 1% excise tax on certain stock buybacks and similar corporate actions.
In addition, the Inflation Reduction Act of 2022 recently became law and imposes a minimum tax on certain corporations with book income of at least $1 billion, subject to certain adjustments, and a 1% excise tax on certain stock buybacks and similar corporate actions. With the change in the U.S.
The typical development cycle of new life sciences products can be lengthy and complicated and may require new scientific discoveries or advancements and complex technology and engineering.
The typical development cycle of new life sciences products or new versions of existing products can be lengthy and complicated and may require new scientific discoveries or advancements and complex technology and engineering.
In addition, as we have increased, and expect in the future we will increase, manufacturing capacity, we have needed, and in the future may need, also to make corresponding improvements to other operational functions, such as our customer service and billing systems, compliance programs and our internal quality assurance programs.
In addition, as we increase manufacturing capacity, we have needed, and in the future may need, also to make corresponding improvements to other operational functions, such as our customer service and billing systems, compliance programs and our internal quality assurance programs.
Our failure to effectively manage product transitions or accurately forecast customer demand could result in excess or obsolete inventory and resulting charges. Because the market for our products is characterized by rapid technological advances, we frequently introduce new products with improved ease-of-use, improved performance or additional features and functionality.
Our failure to effectively manage product transitions or accurately forecast customer demand could result in excess or obsolete inventory and resulting charges. Because the market for our products is characterized by rapid technological advances, we frequently introduce new products or new versions of existing products designed for improved ease-of-use, improved performance or additional features and functionality.
We cannot predict the number, timing or size of future investments, acquisitions or dispositions or the effect that any such transactions might have on our operating results. Seasonality may cause fluctuations in our revenue and results of operations.
We cannot predict the number, timing or size of future investments, acquisitions or dispositions or the effect that any such transactions might have on our operating results. 33 Table of Contents Seasonality may cause fluctuations in our revenue and results of operations.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the 60 Table of Contents sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
As a result, we would be more vulnerable to general adverse economic, industry and capital markets conditions in addition to the risks associated with indebtedness described in this risk factor. Risks related to our regulatory environment and taxation Our products could become subject to more onerous regulation by the U.S.
As a result, we would be more vulnerable to general adverse economic, industry and capital markets conditions in addition to the risks associated with indebtedness described in this risk factor. 36 Table of Contents Risks related to our regulatory environment and taxation Our products could become subject to more onerous regulation by the U.S.
Developing and launching new products and innovating and improving our existing products have required us to hire and retain additional scientific, sales and marketing, software, manufacturing, distribution and quality assurance personnel. As a result, we have experienced rapid headcount growth from 110 employees as of December 31, 2015 to 1,259 employees as of December 31, 2023.
Developing and launching new products and innovating and improving our existing products have required us to hire and retain additional scientific, sales and marketing, software, manufacturing, distribution and quality assurance personnel. As a result, we have experienced rapid headcount growth from 110 employees as of December 31, 2015 to 1,306 employees as of December 31, 2024.
There can be no assurance that we will receive the required approvals, clearances or certifications for any new products or for modifications to our existing products on a timely basis or that any approval, clearance or certification will not be subsequently withdrawn or conditioned upon extensive post-market study requirements.
There can be no assurance that we will receive the required approvals, clearances or certifications for any new products or for modifications to our existing products on a timely basis or that any approval, clearance or certification will not be subsequently withdrawn or conditioned upon 37 Table of Contents extensive post-market study requirements.
We do not maintain key person life insurance for an y of our employees. Additionally, we have not entered into fixed term contracts with almost any of our employees and as a result, almost any of our employees could leave our company with little or no prior notice which could harm our business.
We do not maintain key person life insurance for an y of our employees. Additionally, we have not entered into fixed term contracts with almost any of our employees, including Drs. Saxonov and Hindson, and as a result, almost any of our employees could leave our company with little or no prior notice which could harm our business.
If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products, 52 Table of Contents services and technology.
If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products, services and technology.
If we 36 Table of Contents or our third-party manufacturers fail to manufacture products without defects that meet our specifications or maintain ISO quality management certifications, our customers might choose not to purchase products from us. Furthermore, we or our third-party manufacturers may not be able to increase manufacturing to meet anticipated demand or may experience downtime.
If we or our third-party manufacturers fail to manufacture products without defects that meet our specifications or maintain ISO quality management certifications, our customers might choose not to purchase products from us. Furthermore, we or our third-party manufacturers may not be able to increase manufacturing to meet anticipated demand or may experience downtime.
If too few researchers describe the use of our products, too many researchers shift to a competing product and publish research outlining their use of that product or too many researchers negatively describe the use or usability of our products in publications, it may drive existing and potential customers away from our products, which could harm our operating results.
If too few researchers describe the use of our products, too many researchers shift to a competing product and publish research outlining their use of that product or too many researchers negatively describe the use or usability of our products in publications, our existing and potential customers may be driven away from our products, which could harm our operating results.
The Bayh-Dole Act also provides that the Patent Owner manufacture products embodying the respective Government Funded Inventions domestically in accordance with certain requirements. If this domestic manufacturing requirement is not met, the government agency that funded the relevant grant is entitled to exercise March-In Rights.
The Bayh-Dole Act also provides that the Patent Owner manufacture products embodying the respective Government Funded Inventions domestically in accordance with certain requirements. If this domestic manufacturing requirement is not met, the government agency that funded 50 Table of Contents the relevant grant is entitled to exercise March-In Rights.
Shortages of materials or interruptions in production and transportation systems, labor strikes, work stoppages, infectious disease, epidemics or pandemics, geopolitical issues, conflict, war, civil unrest, acts of terrorism or other interruptions to or difficulties in the employment of labor or transportation that adversely impact equipment, materials and components we require for the production of our products, may adversely affect our ability to maintain production of our products and generate revenue.
Shortages of materials or interruptions in production and transportation systems, labor strikes, work stoppages, infectious disease, epidemics or pandemics, geopolitical issues (including tariffs, trade disputes and other trade restrictions), conflict, war, civil unrest, acts of terrorism or other interruptions to or difficulties in the employment of labor or transportation that adversely impact equipment, materials and components we require for the production of our products, may adversely affect our ability to maintain production of our products and generate revenue.
As we introduce new products and e nhance existing products, we expect utilization of our customer service teams to increase. In particular, the introduction of new or improved products that utilize different workflows or variations on existing workflows may require additional customer service efforts to ensure customers use such products correctly and efficiently.
As we introduce new products and new versions of existing products , we expect utilization of our customer service teams to increase. In particular, the introduction of new products or new versions that utilize different workflows or variations on existing workflows may require additional customer service efforts to ensure customers use such products correctly and efficiently.
In addition, various other countries where we do business have implemented or plan to implement the “Pillar Two” global corporate minimum tax rate in 2024 and are also actively considering changes to their tax laws 50 Table of Contents to adopt certain parts of the OECD’s proposals.
In addition, various other countries where we do business have implemented or plan to implement the “Pillar Two” global corporate minimum tax rate and are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals.
Many other factors could cause production or shipping delays or interruptions, including difficulties in transporting materials, equipment, raw material or other shortages, raw material failures, spoilage, equipment malfunctions, facility contamination, labor problems, natural disasters, infectious disease, conflict, war, civil unrest, epidemics or pandem ics , disruption in utility services, terrorist activities or circumstances beyond our control.
Many other factors could cause production or shipping delays or interruptions, including difficulties in transporting materials, equipment, raw material or other shortages, raw material failures, spoilage, equipment malfunctions, facility contamination, labor problems, natural disasters, tariffs, trade disputes and other trade restrictions, infectious disease, conflict, war, civil unrest, epidemics or pandem ics , disruption in utility services, terrorist activities or circumstances beyond our control.
The facilities and the equipment we and our third-party manufacturers use to manufacture our instruments and consumables and that we use in our research and development programs would be costly to replace and could require substantial lead times to repair or replace. Our facilities are vulnerable to natural disasters and catastrophic events.
The facilities 30 Table of Contents and the equipment we and our third-party manufacturers use to manufacture our instruments and consumables and that we use in our research and development programs would be costly to replace and could require substantial lead times to repair or replace. Our facilities are vulnerable to natural disasters and catastrophic events.
Depending on actions by the United States Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we own or that we might obtain or license in the future.
Depending on actions by the United States Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken 44 Table of Contents our ability to obtain new patents or to enforce patents that we own or that we might obtain or license in the future.
The processing of sensitive personal data, such as physical health conditions, may impose heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators.
The processing of sensitive personal data, 47 Table of Contents such as physical health conditions, may impose heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators.
Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process, and our guidance or the other expectations we set may not ultimately be accurate and has in the past been inaccurate in certain respects.
Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process, and our guidance or the other expectations we set may not ultimately 55 Table of Contents be accurate and has in the past been inaccurate in certain respects.
Our security measures may not prevent an employee, 55 Table of Contents consultant or other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
Our security measures may not prevent an employee, consultant or other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
We are significantly dependent upon revenue generated from the sale of our Chromium solutions, and in particular our Single Cell Gene Expression solutions. We currently generate the majority of our revenue from the sale of our instruments and consumables for our Chromium platform.
We are significantly dependent upon revenue generated from the sale of our Chromium solutions, and in particular our Universal Gene Expression solutions. We currently generate the majority of our revenue from the sale of our instruments and consumables for our Chromium platform.
As we have grown, our employees have become more geographically dispersed. We may face challenges integrating, developing and motivating our rapidly growing and increasingly dispersed employee base, including as a result of certain of our employees working remotely.
As we have grown, our employees have become more geographically dispersed. We may face challenges integrating, developing and motivating our employee base, including as a result of certain of our employees working remotely.
If our management fails to review other relevant information or change or substitute the key business metrics they review as our business grows and we introduce new products, their ability to accurately formulate financial projections and make strategic decisions may be compromised and our business, financial results and future growth prospects may be adversely impacted.
If our management fails to review other relevant information or change or substitute the key business metrics they review as our business evolves and we introduce new products or new versions of existing products, their ability to accurately formulate financial projections and make strategic decisions may be compromised and our business, financial results and future growth prospects may be adversely impacted.
As a result, our estimates of the annual total addressable market for our solutions may be incorrect.
As a result, our estimates of the annual total addressable market and annual serviceable addressable market for our solutions may be incorrect.
Conversely, if genome sequencing falls out of favor as a preferred approach for genomic research, whether through the development of alternative solutions or real or perceived problems with sequencing itself or if our products are not compatible with third-party sequencers used by our customers or potential customers, the utility of our products which are used in conjunction with third- 32 Table of Contents party sequencers could be significantly impacted.
Conversely, if genome sequencing falls out of favor as a preferred approach for genomic research, whether through the development of alternative solutions or real or perceived problems with sequencing itself or if our Chromium and Visium products are not compatible with third-party sequencers used by our customers or potential customers, the utility of our products which are used in conjunction with third-party sequencers could be significantly impacted.
We believe that these metrics are representative of our current business; however, these metrics may not accurately reflect all aspects of our business and we anticipate that these metrics may change or may be substituted for additional or different metrics as our business grows and as we introduce new products.
We believe that these metrics are representative of our current business; however, these metrics may not accurately reflect all aspects of our business and we anticipate that these metrics may change or may be substituted for additional or different metrics as our business evolves and as we introduce new products and new versions of existing products.
For example, we are subject to the risk that employees may inadvertently share Confidential Information with unintended third parties, or that departing employees may take, or create their own information based on, our Confidential Information upon leaving the company.
For example, we are subject to the risk that employees may inadvertently share Confidential Information with unintended 49 Table of Contents third parties, or that departing employees may take, or create their own information based on, our Confidential Information upon leaving the company.

… 326 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+1 added−4 removed3 unchanged
Biggest changeOur cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational and financial risk areas. 73 Table of Contents Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services and our broader enterprise information technology environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers and vendors who have access to our critical systems and information.
Biggest changeKey elements of our cybersecurity risk management program include, but are not limited to, the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. Our management team, including our Chief Legal Officer, Chief Information Officer, President, Chief Financial Officer and Vice President of Data Analytics and Information Security is responsible for assessing and managing our material risks from cybersecurity threats.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. Our management team, including our Chief Legal Officer, President, Chief Financial Officer and Vice President of Data Analytics and Information Security is responsible for assessing and managing our material risks from cybersecurity threats.
For more information, see the section titled “ Risk Factor—Risks related to our intellectual roperty, information technology and data security—If we or our critical third-party providers experience a significant disruption in our information technology systems or breaches of data security, our business could be adversely affected. ” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
For more information, see the section titled “ Risk Factor—Risks related to our intellectual property, information technology and data security—If we or our critical third-party providers experience a significant disruption in our information technology systems or breaches of data security, our business could be adversely affected. ” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
The Audit Committee oversees management’s implementation of our cybersecurity risk management program. The Audit Committee receives periodic reports from management on our cybersecurity risks, including written reports. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
The Audit Committee oversees management’s implementation of our cybersecurity risk management program. 58 Table of Contents The Audit Committee receives periodic reports from management on our cybersecurity risks, including written reports. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition. In March 2020, we experienced a ransomware attack in which cybercriminals were able to access our information technology systems.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
Our Chief Information Officer has served in various roles in information technology for almost 20 years and has been with us since 2013. He holds undergraduate and postgraduate degrees in computer science from Harvard University. Our Vice President of Data Analytics and Information Security has served in various roles in information technology and information security for more than 10 years.
Our Vice President of Data Analytics and Information Security has served in various roles in information technology and information security for more than 10 years. He holds an undergraduate degree in engineering science from Harvard University and postgraduate degrees in computer science from Massachusetts Institute of Technology.
Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large technology companies. 74 Table of Contents Our management team supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our information technology environment.
He holds an undergraduate degree in engineering science from Harvard University and postgraduate degrees in computer science from Massachusetts Institute of Technology. Our Chief Legal Officer has over 25 years of experience managing risks, including risks arising from cybersecurity threats, at several large publicly-traded technology companies.
Our Chief Legal Officer has over 25 years of experience managing risks, including risks arising from cybersecurity threats, at several large publicly-traded technology companies. Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large technology companies.
Removed
While we isolated the source of the attack and restored normal operations with no material day-to-day impact to us or our ability to access our data, we believe confidential information was stolen.
Added
Our cybersecurity risk management program is integrated into our overall risk management program which includes insurance coverage for cybersecurity incidents and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational and financial risk areas.
Removed
We believe it is possible that the ransomware attack could lead to the disclosure of our trade secrets or other intellectual property, or could lead to the exposure of personal information of our employees.
Removed
The release of any of this information could have, but is not reasonably likely to have, a material adverse effect on our business, operations, business strategy, results of operations or financial condition.
Removed
The March 2020 ransomware attack has not, but it is possible that it could, result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could, but is not reasonably likely to, result in significant judgements against us, penalties and fines.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−2 removed0 unchanged
Biggest changeItem 2. Properties. Our global corporate headquarters, research and development facilities, and manufacturing and distribution centers are located in Pleasanton, California, where we lease approximately 338,000 square feet of space under leases expiring between December 2024 and June 2033, as well as a manufacturing and distribution center in Singapore and a manufacturing center in Taiwan.
Biggest changeOur global corporate headquarters, research and development facilities, and manufacturing and distribution centers are located in Pleasanton, California, where we own approximately 148,000 square feet of space and lease approximately 300,000 square feet of space under leases expiring between June 2025 and June 2033, as well as a manufacturing and distribution center in Singapore and a manufacturing center in Taiwan.
We believe that our current and planned facilities are sufficient to meet our ongoing needs and that, if we require additional space, we will be able to obtain additional facilities on commercially reasonable terms.
Including the Pleasanton leases, we lease approximately 410,000 square feet globally. We believe that our current and planned facilities are sufficient to meet our ongoing needs and that, if we require additional space, we will be able to obtain additional facilities on commercially reasonable terms.
Removed
Including the Pleasanton leases, we lease approximately 470,000 square feet globally. In 2023, we vacated some of our leased office space located in Pleasanton, California comprising of approximately 43,000 square feet for the remaining lease term through 2026 and entered into agreements to sublease some of the vacated office space.
Removed
In January 2021, we completed the acquisition of certain real property located in Pleasanton, California for an aggregate cash purchase price of $29.4 million which become operational in April 2023. The property is comprised of approximately 150,000 square feet to support our manufacturing and operations functions.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+5 added−0 removed1 unchanged
Biggest changeFor further discussion of the risks relating to intellectual property and our pending litigation, see the section titled “ Risk Factors—Risks related to litigation and our intellectual property ” under Item 1A. Item 4. Mine Safety Disclosures. Not applicable. 75 Table of Contents PART II
Biggest changeThere are inherent uncertainties in these legal matters, some of which are beyond management’s control, making the ultimate outcomes difficult to predict. For further discussion of the risks relating to intellectual property and our pending litigation, see the section titled “ Risk Factors—Risks related to litigation and our intellectual property ” under Item 1A. Item 4. Mine Safety Disclosures.
Added
We are 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 we may become subject to additional types of lawsuits, claims, arbitration proceedings, administrative actions, government investigations and legal and regulatory proceedings in the future and as our business grows, including proceedings related to product liability or our acquisitions, securities issuances or our business practices, including public disclosures about our business.
Added
Our success depends in part on our non-infringement of the patents or proprietary rights of third parties. In the past, third parties have asserted and may in the future assert that we are employing their proprietary technology without authorization.
Added
We have been involved in multiple patent litigation matters and other proceedings in the past and we expect that given the litigious history of our industry and the high profile of operating as a public company, third parties may claim that our products infringe their intellectual property rights.
Added
We have also initiated litigation to defend our technology including technology developed through our significant investments in research and development. It is our general policy not to out-license our patents but to protect our sole right to own and practice them.
Added
Not applicable. 59 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 75 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 76 Item 6. [Reserved] 77 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 78 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 90 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 59 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 60 Item 6. [Reserved] 61 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 74 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−0 removed8 unchanged
Biggest changeThe stockholder returns shown on the graph below are based on historical results and are not indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 76 Table of Contents COMPARISON OF CUMULATIVE TOTAL RETURN among 10x Genomics, Inc., the Nasdaq Composite Index and the Nasdaq Biotechnology Composite Index Cumulative Total Return September 12, 2019 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 10x Genomics, Inc. $ 100 $ 144.55 $ 268.44 $ 282.39 $ 69.08 $ 106.09 Nasdaq Composite Index 100 109.50 157.28 190.92 127.73 183.19 Nasdaq Biotechnology Composite Index $ 100 $ 115.79 $ 145.53 $ 144.61 $ 128.83 $ 133.65 Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2023.
Biggest changeThe stockholder returns shown on the graph below are based on historical results and are not indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 60 Table of Contents COMPARISON OF CUMULATIVE TOTAL RETURN among 10x Genomics, Inc., the Nasdaq Composite Index, the Nasdaq Biotechnology Composite Index and the Russell 3000 Medical Equipment and Services Sector Index Cumulative Total Return December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 10x Genomics, Inc. $ 100 $ 185.70 $ 195.36 $ 47.79 $ 73.39 $ 18.83 Nasdaq Composite Index 100 143.64 174.36 116.65 167.30 215.22 Nasdaq Biotechnology Composite Index 100 126.42 126.45 113.65 118.87 118.20 Russell 3000 Medical Equipment and Services Sector Index $ 100 $ 124.71 $ 150.60 $ 117.11 $ 122.95 $ 130.71 Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2024.
An investment of $100 is assumed to have been made in our Class A common stock and each index at market close on September 12, 2019 (the first day of trading of our Class A Common Stock on the Nasdaq Global Select Market) and its relative performance is tracked through December 31, 2023.
An investment of $100 is assumed to have been made in our Class A common stock and each index at market close on September 12, 2019 (the first day of trading of our Class A Common Stock on the Nasdaq Global Select Market) and its relative performance is tracked through December 31, 2024.
Market Information Our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “TXG.” Holders of Common Stock As of January 31, 2024, there were 38 holders of record of our Class A common stock and 19 holders of record of our Class B common stock.
Market Information Our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “TXG.” Holders of Common Stock As of January 31, 2025, there were 32 holders of record of our Class A common stock and 19 holders of record of our Class B common stock.
The following graph compares the cumulative total return to stockholder return on our Class A common stock relative to the cumulative total returns of the Nasdaq Composite Index and the Nasdaq Biotechnology Composite Index.
The following graph compares the cumulative total return to stockholder return on our Class A common stock relative to the cumulative total returns of the Nasdaq Composite Index, the Nasdaq Biotechnology Composite Index and the Russell 300 Medical Equipment and Services Sector Index.
Added
The Nasdaq Composite Index and Nasdaq Biotechnology Composite Index have been included in the Stock Performance Graph of our Annual Reports in prior years, but we added the Russell 300 Medical Equipment and Services Sector Index to the Stock Performance Graph for the first time in this Annual Report because upon the completion of the applicable performance period, potential achievement of certain equity awards granted to certain of the Company’s executives in 2024 shall be determined in part based on the Company’s performance compared to members of such index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

79 edited+18 added−34 removed38 unchanged
Biggest changeFor a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022. 83 Table of Contents Year Ended December 31, (in thousands) 2023 2022 2021 Revenue $ 618,727 $ 516,409 $ 490,490 Cost of revenue 209,414 120,386 74,091 Gross profit 409,313 396,023 416,399 Operating expenses: Research and development 270,332 265,667 211,752 In-process research and development 60,980 — — Selling, general and administrative 343,330 298,300 257,560 Accrued contingent liabilities — — (660) Total operating expenses 674,642 563,967 468,652 Loss from operations (265,329) (167,944) (52,253) Other income (expense): Interest income 16,906 6,647 206 Interest expense (33) (476) (866) Other expense, net (307) (198) (802) Total other income (expense) 16,566 5,973 (1,462) Loss before provision for income taxes (248,763) (161,971) (53,715) Provision for income taxes 6,336 4,029 4,508 Net loss $ (255,099) $ (166,000) $ (58,223) Revenue Year Ended December 31, Change 2023 2022 $ % Instruments Chromium $ 47,866 $ 58,552 $ (10,686) (18) % Spatial 75,605 13,844 61,761 446 % Total instruments revenue 123,471 72,396 51,075 71 % Consumables Chromium 420,316 400,433 19,883 5 % Spatial 59,237 35,155 24,082 69 % Total consumables revenue 479,553 435,588 43,965 10 % Services 15,703 8,425 7,278 86 % Total revenue $ 618,727 $ 516,409 $ 102,318 20 % Revenue increased $102.3 million, or 20%, for the year ended December 31, 2023 as compared to year ended December 31, 2022.
Biggest changeYear Ended December 31, (in thousands) 2024 2023 2022 Revenue $ 610,785 $ 618,727 $ 516,409 Cost of revenue 196,303 209,414 120,386 Gross profit 414,482 409,313 396,023 Operating expenses: Research and development 264,698 270,332 265,667 In-process research and development — 60,980 — Selling, general and administrative 344,343 343,330 298,300 Total operating expenses 609,041 674,642 563,967 Loss from operations (194,559) (265,329) (167,944) Other income (expense): Interest income 18,448 16,906 6,647 Interest expense (4) (33) (476) Other expense, net (1,585) (307) (198) Total other income 16,859 16,566 5,973 Loss before provision for income taxes (177,700) (248,763) (161,971) Provision for income taxes 4,927 6,336 4,029 Net loss $ (182,627) $ (255,099) $ (166,000) 67 Table of Contents Revenue Year Ended December 31, Change 2024 2023 $ % Instruments Chromium $ 35,212 $ 47,866 $ (12,654) (26) % Spatial 57,503 75,605 (18,102) (24) % Total instruments revenue 92,715 123,471 (30,756) (25) % Consumables Chromium 372,308 420,316 (48,008) (11) % Spatial 121,124 59,237 61,887 104 % Total consumables revenue 493,432 479,553 13,879 3 % Services 24,638 15,703 8,935 57 % Total revenue $ 610,785 $ 618,727 $ (7,942) (1) % Revenue decreased $7.9 million, or 1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Investing activities The net cash provided by investing activities of $133.5 million in the year ended December 31, 2023 was due to the proceeds from sales and maturities of marketable securities of $100.2 million and $82.8 million, respectively, partially offset by purchases of property and equipment and intangible assets of $48.6 million and $0.9 million, respectively.
The net cash provided by investing activities of $133.5 million in the year ended December 31, 2023 was due to the proceeds from sales and maturities of marketable securities of $100.2 million and $82.8 million, respectively, partially offset by purchases of property and equipment and intangible assets of $48.6 million and $0.9 million, respectively.
Financing activities The net cash provided by financing activities of $13.7 million in the year ended December 31, 2023 was primarily from proceeds of $19.5 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases partially offset by payments on financing arrangements of $5.8 million.
The net cash provided by financing activities of $13.7 million in the year ended December 31, 2023 was primarily from proceeds of $19.5 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases partially offset by payments on financing arrangements of $5.8 million.
The revenue contribution from these and other consumable products has varied and is expected to vary on a quarterly basis due to several factors, including the publication of scientific papers demonstrating the value of the consumables, the availability of grants to fund research, budgetary timing, our introduction of new product features and new consumables offerings and our own manufacturing capacity or the capacity of our partners.
The revenue contribution from these and other consumable products has varied and is expected to vary on a quarterly basis due to several factors, including the publication of scientific papers demonstrating the value of the consumables, the availability of grants to fund research, budgetary timing, our introduction of new product features or configurations and new consumables offerings and our own manufacturing capacity or the capacity of our partners.
Stock-based compensation Our stock-based compensation relates to stock options, restricted stock units (“RSUs”), market-based performance stock awards ("PSAs") including performance stock options and performance RSUs granted pursuant to equity incentive plans and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). Stock-based compensation expense for stock-based awards are based on their grant date fair value.
Stock-based compensation Our stock-based compensation relates to stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), market-based performance stock awards ("PSAs") including performance stock options and performance RSUs granted pursuant to equity incentive plans, and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). Stock-based compensation expense for stock-based awards are based on their grant date fair value.
As a result of these and other initiatives, we expect selling, general and administrative expenses to vary from period to period as a percentage of revenue and increase in absolute dollars in future periods. We expect our stock-based compensation expense allocated to cost of revenue, research and development expenses and selling, general and administrative expenses to increase in absolute dollars.
As a result of these and other initiatives, we expect selling, general and administrative expenses to vary from period to period as a percentage of revenue and increase in absolute dollars in future periods. We expect our stock-based compensation expense allocated to cost of revenue, research and development expenses and selling, general and administrative expenses to decrease in absolute dollars.
Our gross profit and gross margins in future periods are expected to fluctuate from quarter to quarter and will depend on a variety of factors, including: market conditions that may impact our pricing; sales mix changes among consumables, instruments and services; product mix changes between established products and new products; impacts of inflation and increased supply chain costs; excess and obsolete inventories; royalties; our cost structure for manufacturing operations relative to volume; and product warranty obligations.
Our gross profit and gross margins in future periods are expected to fluctuate from quarter to quarter and will depend on a variety of factors, including: market conditions that may impact our pricing; sales mix changes among consumables, instruments and services; product mix changes between established products and new products and new versions of existing products; impacts of inflation and increased supply chain costs; excess and obsolete inventories; royalties; our cost structure for manufacturing operations relative to volume; and product warranty obligations.
In connection with the acquisition, we recognized an in-process research and development intangible asset of $61.0 million which did not have alternative future use and therefore was recognized as an expense during the period. See Note 4 to the consolidated financial statements for further details. There were no similar purchases in year ended December 31, 2022.
In connection with the acquisition, we recognized an in-process research and development intangible asset of $61.0 million which did not have alternative future use and therefore was recognized as an expense during the period. See Note 4 to the consolidated financial statements for further details. There were no similar purchases in year ended December 31, 2024.
We sell additional instruments and launch additional consumables solutions, some of which do not require the use of a 10x instrument, to drive increased consumables usage by our existing customers and to gain new customers. Consumables revenue on an absolute basis is expected to increase over time and remain the bulk of our revenue.
We sell additional instruments and launch additional consumables solutions, some of which do not require the use of a 10x instrument, and adjust prices of our consumables to drive increased consumables usage by our existing customers and to gain new customers. Consumables revenue on an absolute basis is expected to increase over time and remain the bulk of our revenue.
Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described under the heading “ Risk Factors .” 79 Table of Contents Instrument sales Management focuses on instrument sales as an indicator of current business success and a leading indicator of likely future sales of consumables.
Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described under the heading “ Risk Factors .” 63 Table of Contents Instrument sales Management focuses on instrument sales as an indicator of current business success and a leading indicator of likely future sales of consumables.
We also believe the timing of unit sales has been impacted and will continue to be impacted by the timing of product introductions and transitions which can either accelerate or delay demand of existing and new products depending on the needs of individual researchers to conclude existing studies or to use new and improved product capabilities.
We also believe the timing of unit sales has been impacted and will continue to be impacted by the timing of product introductions and transitions which can either accelerate or delay demand of existing and new products or new versions of existing products depending on the needs of individual researchers to conclude existing studies or to use capabilities of new products or versions.
We make assumptions about future demand, market conditions and the release of new products that may supersede old ones. However, if actual market conditions are less favorable than anticipated, additional inventory write-downs could be required.
We make assumptions about future demand, market conditions and the release of new products and new versions of existing products that may supersede old ones. However, if actual market conditions are less favorable than anticipated, additional inventory write-downs could be required.
In addition, cost of revenue includes royalty costs for licensed technologies included in our products, warranty costs, provisions for slow-moving and obsolete inventory and personnel and related costs and component costs incurred in connection with our obligations under our instrument service agreements. We record royalty accruals relating to sales of majority of our products as cost of revenue.
In addition, cost of revenue includes royalty costs for licensed technologies included in our products, warranty costs, provisions for slow-moving and obsolete inventory and personnel and related costs and component costs incurred in connection with our obligations under our instrument service agreements. When applicable, we record royalty accruals relating to sales of our products as cost of revenue.
Upon the close of the transaction on July 14, 2023, we paid additional cash consideration of $10.0 million upon acquiring the assets. Under the agreement, we are obligated to provide additional cash consideration if certain technology development milestones are met. As of December 31, 2023, we have paid $21.3 million relating to the completion of development milestones.
Upon the close of the transaction on July 14, 2023, we paid additional cash consideration of $10.0 million upon acquiring the assets. Under the agreement, we are obligated to provide additional cash consideration if certain technology development milestones are met. As of December 31, 2024, we have paid $41.3 million relating to the completion of development milestones.
Revenue from the sale of instrument service agreements are recognized ratably over the coverage period. 81 Table of Contents Cost of revenue, gross profit and gross margin Cost of revenue.
Revenue from the sale of instrument service agreements are recognized ratably over the coverage period. 65 Table of Contents Cost of revenue, gross profit and gross margin Cost of revenue.
We currently anticipate making aggregate capital expenditures of between approximately $20 million and $25 million during the next 12 months, which we expect to include, among other expenditures, equipment to be used for manufacturing and research and development.
We currently anticipate making aggregate capital expenditures of between approximately $12 million and $17 million during the next 12 months, which we expect to include, among other expenditures, equipment to be used for manufacturing and research and development.
The PSAs consist of three separate tranches and the vesting of each tranche is subject to the Class A common stock closing price being maintained at or above certain 89 Table of Contents predetermined share price goals for each tranche.
The PSAs consist of three separate tranches and the vesting of each tranche is subject to the Class A common stock closing price being maintained at or above certain predetermined share price goals for each tranche.
We plan to grow our instrument sales in the coming years through multiple strategies including expanding our sales efforts globally and continuing to enhance the underlying technology and applications for life sciences research.
We plan to grow our instrument sales in the coming years through multiple strategies including expanding our sales efforts globally, adjusting prices for our instruments and continuing to enhance the underlying technology and applications for life sciences research.
Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
As such, consumable reactions sold is an appropriate metric for assessing trends in our business. The figures in the table above (rounded to the nearest hundred) represent the total consumable reactions for the years ended December 31, 2023 and 2022.
As such, consumable reactions sold is an appropriate metric for assessing trends in our business. The figures in the table above (rounded to the nearest hundred) represent the total consumable reactions, by product platform and in total, for the years ended December 31, 2024, 2023 and 2022.
Total consumables reactions sold Year ended December 31, 2023 2022 Chromium 312,500 290,900 Visium 29,300 28,300 Xenium 5,200 100 Total consumable reactions 347,000 319,300 A consumable reaction is the reagent setup needed to perform an experiment using one of our solutions. Reactions represent the unit volumes that we sell when a researcher purchases our consumables.
Total consumables reactions sold Year ended December 31, 2024 2023 2022 Chromium 310,900 312,500 290,900 Visium 35,400 29,300 28,300 Xenium 10,800 5,200 100 Total consumable reactions 357,100 347,000 319,300 A consumable reaction is the reagent setup needed to perform an experiment using one of our solutions. Reactions represent the unit volumes that we sell when a researcher purchases our consumables.
Other expense, net increased by $0.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022 and was driven by realized and unrealized losses from foreign currency rate measurement fluctuations.
Other expense, net increased by $1.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 and was driven by realized and unrealized losses from foreign currency rate measurement fluctuations.
Selling, general and administrative. Selling, general and administrative expense primarily consists of costs related to the selling and marketing of our products, including sales incentives and advertising expenses and costs associated with our finance, accounting, legal (excluding accrued contingent liabilities), human resources and administrative personnel.
Selling, general and administrative expense primarily consists of costs related to the selling and marketing of our products, including sales incentives and advertising expenses and costs associated with our finance, accounting, legal, human resources and administrative personnel.
We have generated negative cumulative cash flows from operations since inception through the year ended December 31, 2023, and we have generated losses from operations since inception as reflected in our accumulated deficit of $1.3 billion.
We have generated negative cumulative cash flows from operations since inception through the year ended December 31, 2024, and we have generated losses from operations since inception as reflected in our accumulated deficit of $1.5 billion.
We expect to incur additional selling, general and administrative expenses due to continued investment in our sales, marketing and customer service efforts to support the anticipated growth of our business and increased legal costs to support the protection of our intellectual property portfolio. We expect infrastructure costs including allocated facilities and information technology costs to remain flat in absolute dollars.
We expect to incur additional selling, general and administrative expenses due to continued investment in our sales, marketing and customer service efforts to support the anticipated growth of our business. We expect infrastructure costs including allocated facilities and information technology costs to remain flat in absolute dollars.
Acquisitions of key technologies We have made, and intend to continue to make, investments that meet management’s criteria to expand or add key technologies that we believe will facilitate the commercialization of new products in the future.
Acquisitions of key technologies 64 Table of Contents We have made, and intend to continue to make, investments that meet management’s criteria to expand or add key technologies that we believe will facilitate the commercialization of new products and new versions of existing products in the future.
We regularly solicit feedback from our customers and focus our research and development efforts on enhancing the fleet of 10x instruments and enabling their ability to use additional applications that address their needs, which we believe in turn helps to drive additional sales of our instruments and consumables.
We regularly solicit feedback from our customers and focus our research and development efforts on enhancing the fleet of 10x instruments and enabling their ability to use additional applications that address their needs, and we believe that these efforts help to drive sales of our instruments and consumables.
In September 2020, we completed a public offering of our Class A common stock for aggregate proceeds of $482.3 million, net of offering costs, underwriting discounts and commissions.
In September 2019, we completed our initial public offering for aggregate proceeds of $410.8 million, net of offering costs, underwriter discounts and commissions. In September 2020, we completed a public offering of our Class A common stock for aggregate proceeds of $482.3 million, net of offering costs, underwriting discounts and commissions.
As cost of revenue, operating expenses and capital expenditures fluctuate over time, we may experience short-term, negative impacts to our results of operations and cash flows, but we are undertaking such investments in the belief that they will contribute to long-term growth.
Excluding acquisitions, we do not expect our operating expenditures to meaningfully increase in 2025. As cost of revenue, operating expenses and capital expenditures fluctuate over time, we may experience short-term, negative impacts to our results of operations and cash flows, but we are undertaking such investments in the belief that they will contribute to long-term growth.
In-process research and development. In-process research and development consists of costs incurred to acquire intellectual property for research and development. We expect these costs to be recognized, in most cases, only in periods during which we complete an acquisition of assets comprised in whole or part of intellectual property for research and development. We periodically evaluate acquisitions of this nature.
We expect these costs to be recognized, in most cases, only in periods during which we complete an acquisition of assets comprised in whole or part of intellectual property for research and development. We periodically evaluate acquisitions of this nature. Selling, general and administrative.
Our Chromium Controller, Chromium X Series and Visium CytAssist instruments are user installable and do not require in-person training. Our Chromium Connect and Xenium instruments require installation and we offer in-person training for their use. We believe cumulative instruments sold is one of the indicators of our ability to drive customer adoption of our products.
Our Chromium and Visium CytAssist instruments are user installable and do not require in-person training. Our Xenium instrument requires installation and we offer in-person training for its use. We believe cumulative instruments sold is one of the indicators of our ability to drive customer adoption of our products.
Our Chromium, Xenium and Visium Spatial Proteogenomics consumables require the use of a 10x Genomics instrument, while use of a 10x instrument is optional for our Visium Spatial Gene Expression solution. Our instruments and consumables are generally sold without the right of return. Revenue is recognized as instruments and consumables are shipped.
Our Chromium, Xenium and Visium consumables require the use of a 10x Genomics instrument, with the exception of our Spatial Gene Expression v1 solution. Our instruments and consumables are generally sold without the right of return. Revenue is recognized as instruments and consumables are shipped.
We determine 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, we rely upon prices set by management, adjusted for applicable discounts.
The transaction price is allocated to each performance obligation in proportion to its standalone selling price. We determine 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, we rely upon prices set by management, adjusted for applicable discounts.
We believe that these metrics are representative of our current business; however, we anticipate these may change or may be substituted for additional or different metrics as our business grows and as we introduce new products. 78 Table of Contents Cumulative instruments sold As of December 31, 2023 2022 2021 Chromium 5,180 4,411 3,511 Visium 531 211 — Xenium 255 8 — Cumulative instruments sold 5,966 4,630 3,511 Our products are sold to academic and translational researchers and biopharmaceutical companies.
We believe that these metrics are representative of our current business; however, we anticipate these may change or may be substituted for additional or different metrics as our business grows and as we introduce new products or new versions of existing products. 62 Table of Contents Cumulative instruments sold As of December 31, 2024 2023 2022 Chromium 5,808 5,180 4,411 Visium CytAssist 810 531 211 Xenium 421 255 8 Cumulative instruments sold 7,039 5,966 4,630 Our products are sold to academic and translational researchers and biopharmaceutical companies.
The increase was primarily due to interest income generated from our cash equivalents and marketable securities during the year ended December 31, 2023 reflecting an increase in interest rates.
The increase was primarily due to interest income generated from our investments in marketable securities and an increase in interest rates during the year ended December 31, 2024.
Selling, general and administrative expenses increased $45.0 million, or 15%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Selling, general and administrative expenses increased $1.0 million, or 0.3%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
We expect our instrument sales to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.
We expect the number of cumulative instruments sold to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.
Our ability to utilize such carryforwards for income tax savings is subject to certain conditions and may be subject to certain limitations in the future due to ownership changes. As such, there can be no assurance that we will be able to utilize such carryforwards.
In addition, we had state tax credit carryforwards of $68.3 million, which carry forward indefinitely. Our ability to utilize such carryforwards for income tax savings is subject to certain conditions and may be subject to certain limitations in the future due to ownership changes. As such, there can be no assurance that we will be able to utilize such carryforwards.
As these early adopters successfully perform experiments and publish scientific articles using our solutions, the utility of these solutions is more broadly understood and the solutions are then subsequently adopted by the larger research community.
As each of our solutions has been introduced, they have been initially purchased by a small number of early adopters. As these early adopters successfully perform experiments and publish scientific articles using our solutions, the utility of these solutions is more broadly understood and the solutions are then subsequently adopted by the larger research community.
Cash flow summary The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net cash (used in) provided by: Operating activities $ (15,197) $ (33,606) Investing activities 133,492 (350,887) Financing activities 13,669 15,817 Effect of exchange rates changes on cash, cash equivalents, and restricted cash (33) (44) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 131,931 $ (368,720) 87 Table of Contents Operating activities The net cash used in operating activities of $15.2 million for the year ended December 31, 2023 was due primarily to a net loss of $255.1 million, partially offset by stock-based compensation expense of $167.0 million, depreciation and amortization of $35.5 million, net cash inflow from changes in operating assets and liabilities of $17.3 million, asset impairment charges of $9.8 million, amortization of leased right-of-use assets of $8.1 million, realized losses on sale of marketable securities of $1.7 million and other non-cash expenses of $0.4 million.
Cash flow summary The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Net cash provided (used in) by: Operating activities $ 6,664 $ (15,197) Investing activities (32,631) 133,492 Financing activities 10,914 13,669 Effect of exchange rates changes on cash, cash equivalents, and restricted cash (164) (33) Net (decrease) increase in cash, cash equivalents, and restricted cash $ (15,217) $ 131,931 71 Table of Contents Operating activities The net cash provided by operating activities of $6.7 million for the year ended December 31, 2024 was due primarily to a net loss of $182.6 million, partially offset by stock-based compensation expense of $140.7 million, depreciation and amortization of $35.9 million, net cash inflow from changes in operating assets and liabilities of $1.3 million, lease and asset impairment charges of $3.1 million, amortization of leased right-of-use assets of $7.8 million, and other non-cash expenses of $0.5 million.
The net cash outflow from operating assets and liabilities was partially offset by an increase in accounts payable of $5.9 million due to timing of vendor payments, an increase in deferred revenue of $3.4 million, an increase in accrued expenses and other current liabilities of $3.3 million, an increase in accrued compensation and other related benefits of $1.1 million and a decrease in other noncurrent assets of $0.9 million.
The net cash inflow from operating assets and liabilities was partially offset by a decrease in accrued expenses and other current liabilities of $12.7 million, a decrease of $12.5 million due to payment of operating lease liabilities, an increase in inventory of $9.8 million, a decrease in accounts payable of $3.4 million due to timing of vendor payments, an increase in prepaid expenses and other current assets of $1.9 million, and an increase in other noncurrent assets of $1.1 million.
During the years ended December 31, 2023 and 2022, we issued market-based performance stock awards ("PSAs") comprising of performance stock options and performance restricted stock units.
During the years ended December 31, 2023 and 2022, we issued market-based PSAs comprising performance restricted stock units (and in one case a performance stock option).
In addition, should prevailing economic, financial, business or other factors adversely affect our ability to meet our operating cash requirements, we could be required to obtain funding though traditional or alternative sources of financing. We cannot be certain that additional funds would be available to us on favorable terms when required, or at all.
In addition, should prevailing economic, financial, business or other factors adversely affect our ability to meet our operating cash requirements, we could be required to obtain funding though traditional or alternative sources of financing.
As of December 31, 2023, we had federal net operating loss (“NOL”) carryforwards of $672.3 million and federal tax credit carryforwards of $77.3 million. Our federal NOLs generated after December 31, 2017, which total $665.9 million, are carried forward indefinitely, while all of our other federal NOL and tax credit carryforwards expire beginning in 2033.
Our federal NOLs generated after December 31, 2017, which total $632.9 million, are carried forward indefinitely, while all of our other federal NOL and tax credit carryforwards expire beginning in 2033. As of December 31, 2024, we had state NOL carryforwards of $424.5 million, which primarily expire beginning in 2033.
Research and development expense primarily consists of personnel and related costs, independent contractor costs, laboratory supplies, equipment maintenance prototype and materials expenses, amortization of developed technology and intangibles and allocated costs including facilities and information technology. We plan to continue to invest in our research and development efforts to enhance existing products and develop new products.
Research and development expense primarily consists of personnel and related costs, independent contractor costs, laboratory supplies, equipment maintenance prototype and materials expenses, amortization of developed technology and intangibles and allocated costs including facilities and information technology.
Provision for Income Taxes The Company’s provision for income taxes was $6.3 million and $4.0 million, respectively, for the year ended December 31, 2023 and 2022. The provision for income taxes increased by $2.3 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily due to higher foreign income.
Provision for Income Taxes The Company’s provision for income taxes was $4.9 million and $6.3 million, respectively, for the years ended December 31, 2024 and 2023. The provision for income taxes decreased by $1.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease was primarily due to lower foreign income.
Each of our consumables solutions is designed to allow researchers to study a different aspect of biology, such as DNA, RNA, protein or epigenetics, at a resolution and scale that may be impractical or impossible using previously existing tools. As each of our solutions has been introduced, they have been initially purchased by a small number of early adopters.
There have been fluctuations in the mix between instruments and consumables and amongst our consumables. Each of our consumables solutions is designed to allow researchers to study a different aspect of biology, such as RNA, protein or epigenetics, at a resolution and scale that may be impractical or impossible using previously existing tools.
The net cash provided by financing activities of $15.8 million in the year ended December 31, 2022 was primarily from proceeds of $21.2 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases partially offset by payments on financing arrangements of $5.4 million.
Financing activities The net cash provided by financing activities of $10.9 million in the year ended December 31, 2024 was primarily from proceeds of $10.9 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases.
Furthermore, we expect to pay cash consideration tied to future sales milestones if such milestones are met. We expect to continue to incur operating losses for the foreseeable future.
Up to $15.0 million of cash consideration is due if an additional technology development milestone is met. Furthermore, we expect to pay cash consideration tied to future sales milestones if such milestones are met. We expect to continue to incur operating losses for the foreseeable future.
The increase was primarily driven by an increase in personnel expenses of $15.0 million, including $13.6 million in stock-based compensation expense and higher costs for facilities and information technology of $4.6 million including a lease impairment charge of $2.1 million.
The decrease was primarily driven by a decrease in allocated costs for facilities and information technology of $2.7 million, a decrease in personnel expenses of $2.5 million, including a $6.5 million reduction in stock-based compensation expense, a decrease in depreciation and amortization of $1.4 million, partially offset by an increase in other expenses of $0.8 million.
Our commercial product portfolio leverages our Chromium X Series and Chromium Connect instruments, which we refer to as “Chromium instruments,” our Visium CytAssist, an instrument designed to simplify the Visium solution workflow by facilitating the transfer of transcriptomic probes from standard glass slides to Visium slides, and our Xenium Analyzer, an instrument designed for fully automated high-throughput analysis of cells in their tissue environment, which we refer to as “Spatial instruments,” and our proprietary microfluidic chips, slides, reagents and other consumables for our Chromium, Visium and Xenium 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 commercial product portfolio leverages our Chromium instruments and our Visium CytAssist and our Xenium Analyzer, which we refer to as “Spatial instruments,” and our proprietary microfluidic chips, slides, reagents and other consumables for our Chromium, Visium and Xenium 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 contracts with our customers generally do not include rights of return or a significant financing component. We regularly enter 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.
Our contracts with our customers generally do not include rights of return or a significant financing component. We regularly enter into contracts that include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. The recognition of revenue can be complex due to the volume of sales transactions including multiple performance obligations.
We define cumulative instruments sold as the cumulative number of Chromium instruments, including the Chromium X Series, the Chromium Connect and the legacy Chromium Controller, Visium CytAssist instruments and Xenium instruments sold since inception.
We define cumulative instruments sold as the cumulative number of Chromium instruments, Visium CytAssists and Xenium Analyzers sold since inception.
Our future capital requirements will depend on many factors including our revenue growth rate, research and development efforts, investments in or acquisitions of complementary or enhancing technologies or businesses, the timing and extent of additional capital expenditures to invest in existing and new facilities, the expansion of sales and marketing and international activities, legal costs associated with defending and enforcing intellectual property rights and the introduction of new products. 86 Table of Contents We take a long-term view in growing and scaling our business and we regularly review acquisition and investment opportunities, and we may in the future enter into arrangements to acquire or invest in businesses, real estate, services and technologies, including intellectual property rights, and any such acquisitions or investments could significantly increase our capital needs.
Our future capital requirements will depend on many factors including our revenue growth rate, research and development efforts, investments in or acquisitions of complementary or enhancing technologies or businesses, the timing and extent of additional capital expenditures to invest in existing and new facilities, the expansion of sales and marketing and international activities, legal costs associated with defending and enforcing intellectual property rights and the introduction of new products and new versions of existing products.
Provision for income taxes Our provision for income taxes consists primarily of foreign taxes. As we expand the scale and scope of our international business activities, any changes in the U.S. and foreign taxation of such activities may increase our overall provision for income taxes in the future.
As we expand the scale and scope of our international business activities, any changes in the U.S. and foreign taxation of such activities may increase our overall provision for income taxes in the future. As of December 31, 2024, we had federal net operating loss (“NOL”) carryforwards of $638.7 million and federal tax credit carryforwards of $88.5 million.
Our integrated solutions include instruments, consumables and software for analyzing biological systems at resolution and scale that matches the complexity of biology. We have launched multiple products that enable researchers to understand and interrogate biological analytes in their full biological context.
Our integrated solutions include instruments, consumables and software for analyzing biological systems at resolution and scale that matches the complexity of biology.
While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations.
Key factors affecting our performance We believe that our financial performance has been and in the foreseeable future will continue to be primarily driven by the following factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to grow and improve our results of operations.
The net cash used in operating activities of $33.6 million for the year ended December 31, 2022 was due primarily to a net loss of $166.0 million, net cash outflow from changes in operating assets and liabilities of $39.4 million, partially offset by stock-based compensation expense of $136.8 million, depreciation and amortization of $25.4 million, amortization of leased right-of-use assets of $7.6 million, loss on disposal of property and equipment of $1.1 million and amortization of premium and accretion of discount on marketable securities, net of $0.9 million.
The net cash used in operating activities of $15.2 million for the year ended December 31, 2023 was due primarily to a net loss of $255.1 million, partially offset by stock-based compensation expense of $167.0 million, depreciation and amortization of $35.5 million, net cash inflow from changes in operating assets and liabilities of $17.3 million, asset impairment charges of $9.8 million, amortization of leased right-of-use assets of $8.1 million, realized losses on sale of marketable securities of $1.7 million and other non-cash expenses of $0.4 million.
The net cash used in investing activities of $350.9 million in the year ended December 31, 2022 was due to purchases of marketable securities of $282.9 million, purchases of property and equipment of $131.7 million and payment of acquisition-related holdback cash and contingent consideration of $4.0 million, partially offset by proceeds from sales and maturities of marketable securities of $49.1 million and $18.5 million, respectively.
Investing activities The net cash used in investing activities of $32.6 million in the year ended December 31, 2024 was due to the purchase of marketable securities of $48.9 million, purchases of property and equipment and intangible assets of $12.4 million and $1.0 million, respectively, partially offset by the proceeds from sales and maturities of marketable securities of $3.9 million and $25.8 million, respectively.
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 $255.1 million and $166.0 million for the years ended December 31, 2023 and 2022, respectively.
Customers purchase instruments and 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.
Given the variability of our sales cycle, we have in the past experienced, and likely will in the future experience, fluctuations in our instrument sales on a period-to-period basis. Recurring consumable revenue We regularly assess trends relating to recurring consumable revenue based on our product offerings, our customer base and our understanding of how our customers use our products.
Recurring consumable revenue We regularly assess trends relating to recurring consumable revenue based on our product offerings, our customer base and our understanding of how our customers use our products.
Interest income Interest income consists of interest earned on our cash and cash equivalents which are invested in bank deposits, money market funds and marketable securities. 82 Table of Contents Other income (expense), net Other income (expense), net primarily consists of realized and unrealized gains and losses related to foreign exchange rate remeasurements.
Interest income Interest income consists of interest earned on our cash and cash equivalents which are invested in bank deposits, money market funds and marketable securities.
Operating Expenses Year Ended December 31, Change (dollars in thousands) 2023 2022 $ % Research and development $ 270,332 $ 265,667 $ 4,665 2 % In-process research and development 60,980 — 60,980 N/A Selling, general and administrative 343,330 298,300 45,030 15 % Total operating expenses $ 674,642 $ 563,967 $ 110,675 20 % Research and development expense increased $4.7 million, or 2%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Operating Expenses Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Research and development $ 264,698 $ 270,332 $ (5,634) (2) % In-process research and development — 60,980 (60,980) N/A Selling, general and administrative 344,343 343,330 1,013 — % Total operating expenses $ 609,041 $ 674,642 $ (65,601) (10) % Research and development expense decreased $5.6 million, or 2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
While we expect the mix of direct sales as compared to sales through distributors to remain relatively constant in the near term, we are evaluating increasing our direct sales capabilities in certain geographies. 80 Table of Contents We expect our gross margin will continue to trend lower due in part to change in product mix with newly introduced products, the impacts of inflation including, among other impacts, employee compensation and benefits, increased supply chain costs and increased costs due to expanding our operations infrastructure.
We expect our gross margin to trend lower due in part to change in product mix with newly introduced products and product versions, lower prices of our products and the impacts of inflation including, among other impacts, employee compensation and benefits and increased supply chain costs.
Critical Accounting Estimates Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures.
Critical Accounting Policies and Estimates Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report are prepared in accordance with GAAP. We believe that our accounting policies related to revenue recognition are important in understanding our consolidated financial position and results of operations.
The increase was primarily driven by increases in outside legal expenses of $18.1 million, personnel expenses of $14.4 million, including $14.7 million in stock-based compensation expense, $6.4 million for facilities and information technology including lease impairment charges of $2.8 million, $4.5 million of impairment charges relating to the discontinuance of a product line, and higher consulting and professional services of $1.8 million.
The increase was primarily driven by an increase in outside legal expenses of $21.2 million, an increase in allocated costs for facilities and information technology to support operational expansion of $1.7 million, partially offset by a decrease in personnel expenses of $18.6 million, including a $21 million reduction in stock-based compensation expense, and a decrease in other expenses of $4.4 million.
Consumables revenue increased $44.0 million, or 10%, to $479.6 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily driven by growth in both Chromium and Spatial consumables sales. 84 Table of Contents Cost of revenue, Gross Profit and Gross Margin Year Ended December 31, Change (dollars in thousands) 2023 2022 $ % Cost of revenue $ 209,414 $ 120,386 $ 89,028 74 % Gross profit $ 409,313 $ 396,023 $ 13,290 3 % Gross margin 66 % 77 % Cost of revenue increased $89.0 million, or 74%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Service revenue increased $8.9 million, or 57%, for the year ended December 31, 2024 as compared to year ended December 31, 2023, primarily driven by increased service plans for both Chromium and Spatial instruments. 68 Table of Contents Cost of Revenue, Gross Profit and Gross Margin Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Cost of revenue $ 196,303 $ 209,414 $ (13,111) (6) % Gross profit $ 414,482 $ 409,313 $ 5,169 1 % Gross margin 68 % 66 % Cost of revenue decreased $13.1 million, or 6%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Our margins are generally higher for those instruments and consumables that we sell directly to customers as compared to those that we sell through distributors.
For each of the years ended December 31, 2024, 2023 and 2022, our Chromium Universal Gene Expression consumables were our highest selling consumables products. Our margins are generally higher for those instruments and consumables that we sell directly to customers as compared to those that we sell through distributors.
As a result of these and other initiatives, we expect research and development expense will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue. Having completed the expansion of our global headquarters in Pleasanton in 2023, we expect allocated facilities and information technology costs to remain relatively flat in 2024.
As a result of these and other initiatives, we expect research and development expense will modestly increase in absolute dollars in future periods and vary from period to period as a percentage of revenue. In-process research and development. In-process research and development consists of costs incurred to acquire intellectual property for research and development.
Also, the timing of our price increases, typically at the beginning of a new calendar year, can pull forward additional volume to the quarter before. We therefore believe that an annual representation of cumulative instruments sold is most appropriate for assessing trends in our business.
We therefore believe that an annual representation of cumulative instruments sold is most appropriate for assessing trends in our business.
Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. 72 Table of Contents For further information, see Note 2 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Furthermore, the Company expects to pay cash consideration tied to future sales milestones if such milestones are met. See Note 4 to the consolidated financial statements for further details. Liquidity and Capital Resources As of December 31, 2023, we had approximately $388.7 million in cash and cash equivalents, and marketable securities which were primarily held in U.S. banks.
Liquidity and Capital Resources As of December 31, 2024, we had approximately $393.4 million in cash and cash equivalents, and marketable securities which were primarily held in U.S. banks.
Instruments revenue increased $51.1 million, or 71%, to $123.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to higher volume of Spatial instruments sold. The revenues for the years ended December 31, 2023 and 2022 included twelve and three months of sales of Xenium instruments, respectively.
Instruments revenue decreased $30.8 million, or 25%, to $92.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to lower volume of Chromium and Spatial instruments sold.
As of December 31, 2023, we had an accumulated deficit of $1.3 billion and cash and cash equivalents and marketable securities totaling $388.7 million. We expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term.
Our net losses were $182.6 million and $255.1 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $1.5 billion and cash and cash equivalents and marketable securities totaling $393.4 million.
We intend to continue to make focused investments to increase revenue and scale operations to support the growth of our business and therefore expect expenses in this area to increase. We have invested, and will continue to invest, in our manufacturing capabilities and commercial infrastructure.
Continued investment in growth Historically, our revenue growth has been driven by the development of new solutions and quick adoption of our solutions by our customer base. We intend to continue to make focused investments to support the growth of our business and therefore expect expenses to increase.
In addition, we expect increased legal costs in 2024 to support the protection of our intellectual property portfolio. 85 Table of Contents Other Income (Expense), Net Year Ended December 31, Change (dollars in thousands) 2023 2022 $ % Interest income $ 16,906 $ 6,647 $ 10,259 154 % Interest expense (33) (476) 443 (93) % Other expense, net (307) (198) (109) 55 % Total other income (expense) $ 16,566 $ 5,973 $ 10,593 177 % Interest income increased by $10.3 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Other Income (Expense), Net Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Interest income $ 18,448 $ 16,906 $ 1,542 9 % Interest expense (4) (33) 29 (88) % Other expense, net (1,585) (307) (1,278) 416 % Total other income $ 16,859 $ 16,566 $ 293 2 % 69 Table of Contents Interest income increased by $1.5 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The net cash outflow from operating assets and liabilities was primarily due to an increase in inventory of $21.2 million due to anticipated demand including new product introductions and supply chain management, an increase in accounts receivable of $18.9 million primarily due to increase in revenue and timing of collections, a decrease of $6.4 million due to payment of operating lease liabilities, an increase in prepaid expenses and other current assets of $4.5 million and a decrease in other noncurrent liabilities of $2.9 million.
The net cash inflow from operating assets and liabilities was primarily due to a decrease in accounts receivable of $27.0 million primarily due to reduced revenue, an increase in deferred revenue of $11.2 million, an increase in accrued compensation and other related benefits of $3.7 million, and an increase in other noncurrent liabilities of $0.8 million.
Sources of liquidity Since our inception, we have financed our operations and capital expenditures primarily through sales of convertible preferred stock and common stock, revenue from sales of our products and the incurrence of indebtedness. In September 2019, we completed our initial public offering for aggregate proceeds of $410.8 million, net of offering costs, underwriter discounts and commissions.
We cannot be certain that additional funds would be available to us on favorable terms when required, or at all. 70 Table of Contents Sources of liquidity Since our inception, we have financed our operations and capital expenditures primarily through sales of convertible preferred stock and common stock, revenue from sales of our products and the incurrence of indebtedness.
Revenue mix and gross margin Our revenue is derived from sales of our instruments, consumables and services. There have been fluctuations in the mix between instruments and consumables and amongst our consumables.
We expect to lower prices for certain of our products in 2025 and expect sales of our instruments and consumables to increase over time as a result of introducing lower prices for our instruments and consumables. Revenue mix and gross margin Our revenue is derived from sales of our instruments, consumables and services.
Removed
Our products cover a wide variety of applications and allow researchers to analyze biological systems at fundamental resolutions and on massive scale, such as at the single cell level for millions of cells. Customers purchase instruments and consumables from us for use in their experiments.

… 51 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−1 removed6 unchanged
Biggest changeThe fair market value of our fixed rate securities may be adversely impacted by increases in interest rates. For example, market interest rates increased during 2022, which contributed to unrealized losses on our cash equivalents and marketable securities.
Biggest changeThe fair market value of our fixed rate securities may be adversely impacted by increases in interest rates. For example, in 2024 we maintained our portfolio of fixed income investments with short-term maturities to reduce risk and impact from rate changes.
We have performed a sensitivity analysis as of December 31, 2023 and as of December 31, 2022, using a modeling technique that measures the change in the amount of non-U.S. dollar monetary assets arising from a hypothetical 10% movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
We have performed a sensitivity analysis as of December 31, 2024 and 2023, using a modeling technique that measures the change in the amount of non-U.S. dollar monetary assets arising from a hypothetical 10% movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
In addition, for our price lists denominated in foreign currencies, if the value of the U.S. dollar increases relative to the foreign currencies, the value of the revenue transactions when translated or remeasured to our U.S. dollar reporting currency will be lower. We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies.
In addition, for our price lists 74 Table of Contents denominated in foreign currencies, if the value of the U.S. dollar increases relative to the foreign currencies, the value of the revenue transactions when translated or remeasured to our U.S. dollar reporting currency will be lower. We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies.
Historically, most of our revenue is denominated in U.S. dollars, although we sell our products and services in local currency outside of the United States, principally the euro, Great British pound and Japanese yen. For the years ended December 31, 2023 and 2022, approximately 23% and 18%, respectively, of our sales were denominated in currencies other than U.S. dollars.
Historically, most of our revenue is denominated in U.S. dollars, although we sell our products and services in local currency outside of the United States, principally the euro, Great British pound and Japanese yen. For the years ended December 31, 2024 and 2023, approximately 27% and 23%, respectively, of our sales were denominated in currencies other than U.S. dollars.
A hypothetical 100 basis-point (one percentage point) increase in interest rates compared to rates at December 31, 2023 and December 31, 2022 would have adversely affected the fair value of our investment portfolio by approximately $0.1 million and $1.4 million, respectively.
A hypothetical 100 basis-point (one percentage point) increase in interest rates compared to rates at December 31, 2024 and December 31, 2023 would have adversely affected the fair value of our investment portfolio by approximately $0.2 million and $0.1 million, respectively.
The sensitivity analysis indicated that a hypothetical 10% movement in foreign currency exchange rates would change the amount of cash and cash equivalents and accounts receivable that we would report in U.S. Dollars as of December 31, 2023 and December 31, 2022 by approximately $3.8 million and $6.0 million, respectively. 90 Table of Contents
The sensitivity analysis indicated that a hypothetical 10% movement in foreign currency exchange rates would change the amount of cash and cash equivalents and accounts receivable that we would report in U.S. Dollars as of December 31, 2024 and December 31, 2023 by approximately $4.2 million and $3.8 million, respectively. 75 Table of Contents
Removed
In 2023, we reduced our marketable securities portfolio which decreased our unrealized losses from the impact of further increases in interest rates during the year.

Other TXG 10-K year-over-year comparisons