TXG Q3 Deep Dive: Spatial Biology and Consumables Drive Outperformance Amid Macro Uncertainty

Biotech company 10x Genomics (NASDAQ:TXG) beat Wall Street’s revenue expectations in Q3 CY2025, but sales fell by 1.7% year on year to $149 million. On top of that, next quarter’s revenue guidance ($156 million at the midpoint) was surprisingly good and 3.5% above what analysts were expecting. Its GAAP loss of $0.22 per share was 22.7% above analysts’ consensus estimates.

Is now the time to buy TXG? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

10x Genomics delivered results in Q3 that exceeded Wall Street’s expectations, driven by robust demand in spatial biology and a steady performance in single-cell consumables. Management attributed the outperformance to strong adoption of the Xenium platform, which saw double-digit consumable growth, as well as the successful launch of new single-cell assays like Flex and On-Chip Multiplexing. CEO Serge Saxonov highlighted that despite continued macroeconomic challenges and cautious customer spending, both the number of runs and average spend per run increased, particularly in spatial, while ongoing cost controls improved operating margins.

Looking ahead, management’s positive outlook for the next quarter is underpinned by continued momentum in spatial consumables and new product rollouts, including the next-generation Chromium Flex and Xenium protein solutions. CFO Adam Taich noted that guidance anticipates a higher mix of instrument revenue and incorporates potential impacts from government funding uncertainties. Saxonov stated, “We remain focused on advancing our innovation road map and driving greater adoption of our products,” emphasizing that the company’s strong balance sheet enables it to invest in both near-term execution and longer-term opportunities such as translational and clinical applications.

Key Insights from Management’s Remarks

Management credited Q3 performance to increased demand for spatial biology platforms, expanded product offerings, and effective cost management supporting margin improvement.

• Spatial consumables momentum: Xenium consumables experienced double-digit year-over-year revenue growth, with increased usage per instrument and higher price per run, driven by adoption of the 5K panel and applications in translational research.
• Product innovation pipeline: The company launched the next generation Chromium Flex assay, offering enhanced automation and scalability, as well as Xenium protein, which enables simultaneous RNA and protein detection in a single tissue section, simplifying workflows for researchers.
• Elasticity strategy for single-cell: Management continued to lower average reaction prices for single-cell assays, expanding the customer base and use cases. Increasing volume growth has partially offset pricing headwinds, aligning with the company’s strategy to drive adoption through affordability.
• Geographic trends: Europe and Asia-Pacific showed sequential growth, with Europe benefiting from strong spatial consumable sales and Asia-Pacific rebounding after a Q2 pull-forward. The Americas were impacted by ongoing U.S. academic and government funding uncertainty.
• Cost discipline and cash position: Operating expenses declined year-over-year due to lower personnel and legal costs. The company ended the quarter with $482 million in cash and equivalents, providing flexibility to continue investing in strategic priorities.

Drivers of Future Performance

10x Genomics expects near-term growth to be driven by new product launches, continued spatial consumables adoption, and careful cost management despite ongoing funding headwinds.

• Sustained spatial platform adoption: Management believes demand for Xenium and related spatial platforms will remain strong, supported by growing customer preference for image-based analysis and ongoing expansion into translational and clinical research markets.
• Instrument and assay innovation: The company anticipates the next generation Chromium Flex assay and new workflow automation features will increase accessibility and drive broader adoption, particularly for large-scale and AI-driven experiments, though pricing pressures and customer validation timelines may affect near-term uptake.
• Macro and funding headwinds: Management cautioned that persistent uncertainty in academic, government, and pharma R&D spending, along with potential effects from government shutdowns, could weigh on purchasing patterns and limit visibility into 2026.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will focus on (1) the adoption pace of next-generation Chromium Flex and Xenium protein offerings, (2) sustained volume and pricing trends in spatial consumables, especially as translational research use cases expand, and (3) signs of stabilization or improvement in academic, government, and pharma R&D funding. Execution on product innovation and customer workflow integration will also be key to monitoring.

10x Genomics currently trades at $14.59, up from $12.99 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

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