10x Genomics Q3 2026 Earnings: Margin Expansion Halves Operating Loss

10x Genomics (Nasdaq: TXG) reported Q3 2026 revenue of $150.7 million, up 1% from $149.0 million a year earlier, while diluted net loss per share narrowed to $0.15 from $0.22. Gross margin expanded to 75%, and lower operating expenses helped cut the operating loss in half despite a sharp decline in instrument revenue.

Core Financial Results

The quarter’s main development was improved profitability rather than rapid revenue growth. Gross profit increased about 13% as lower inventory write-downs and a more favorable product mix reduced cost of revenue, while operating expenses declined 3%.

Net loss improved less than operating loss because total other income and expense shifted from $4.0 million of income to $2.4 million of expense. This offset part of the operating improvement.

Business and Segment Performance

Consumables remained the principal source of revenue and offset weaker instrument sales. Total consumables revenue increased 5% to $134.3 million, representing about 89% of quarterly revenue, with most of the incremental growth coming from spatial consumables.

Instrument weakness affected both major product categories. Single Cell instrument revenue fell to $3.8 million from $4.9 million, while spatial instrument revenue declined to $3.1 million from $7.1 million. The start of Atera commercial shipments had not yet reversed the overall hardware decline during the quarter.

Geographically, growth was concentrated in the Americas. Revenue from the region rose to $85.9 million from $79.9 million, supported by U.S. revenue of $82.1 million. EMEA revenue declined about 7% to $38.8 million, while Asia-Pacific revenue fell about 6% to $26.0 million. China was nearly unchanged, but Asia-Pacific excluding China declined about 13%.

Margin Expansion, Not Revenue Growth, Drove the Loss Reduction

Cost of products and services revenue fell to $37.7 million from $48.7 million even as total revenue increased slightly. Management attributed the resulting eight-percentage-point gross margin expansion primarily to lower inventory write-downs and product mix changes.

Operating expenses also declined by $3.6 million, mainly because of lower personnel and laboratory equipment expenses, partly offset by higher litigation costs. Research and development expense fell to $52.9 million from $57.2 million, while selling, general and administrative expense edged up to $76.1 million from $75.4 million.

These changes improved operating loss by $16.2 million year over year. However, the swing in non-operating results limited the improvement at the net-income level: other expense included $7.4 million of net other expense, compared with $1.2 million a year earlier, while interest income remained near $5.0 million.

Cash and Balance Sheet

10x Genomics ended September with $526.2 million in cash and cash equivalents and $49.5 million in marketable securities, for a combined $575.7 million. That compares with a combined $523.4 million at December 31, 2025.

Inventory increased about 15% from year-end to $64.6 million, while accounts receivable rose about 18% to $55.7 million. The provided results did not include operating or free cash flow, so the increase in cash and securities cannot by itself be treated as evidence of positive operating cash generation.

Earnings Guidance

10x Genomics raised its full-year 2026 revenue outlook, increasing the midpoint by $10 million to $630 million. Excluding non-recurring license and royalty revenue associated with patent litigation settlements in both 2025 and 2026, the new range represents expected growth of 4% to 6% over 2025.

The exclusion matters because settlement-related revenue can significantly affect reported comparisons. For the first nine months of 2026, products and services revenue increased to $449.2 million from $431.0 million, but total revenue declined to $452.5 million from $476.8 million as license and royalty revenue fell to $3.3 million from $45.8 million.

Management’s View

CEO Serge Saxonov identified the start of global commercial shipments for Atera as the quarter’s main product milestone and said early demand was encouraging. Management also pointed to continued consumables strength across the broader business, though it did not provide Atera shipment, order, or customer-placement figures.

The company also introduced Sentira, a cloud analysis platform using NVIDIA accelerated computing for spatial data processing and Anthropic’s Claude for AI-based analysis of single-cell data. Its financial contribution was not quantified in the release.

Recent Insider Transactions

Reported insider activity over the preceding six months included 57,074 shares purchased across eight transactions and 278,193 shares sold across 16 transactions, producing net sales of 221,119 shares. The latest 10 reported entries consisted of nine sales and one stock gift, all involving direct ownership; the sales had a combined reported value of approximately $10.7 million.

These disclosures describe the transactions but do not establish the insiders’ reasons for buying, selling, or gifting shares.

Risks Investors Need to Watch

• Instrument revenue remains under pressure. Total instrument revenue fell 43%, including a decline of more than 50% in spatial instruments. Future Atera placements will need to translate into measurable hardware and recurring consumables revenue.
• Growth depends heavily on consumables. Consumables generated about 89% of quarterly revenue and offset the instrument decline. Slower utilization by existing customers would therefore have a direct effect on overall growth.
• Regional performance is uneven. U.S. growth offset declines in EMEA and Asia-Pacific, leaving consolidated revenue up only 1%.
• The company remains unprofitable. Margin expansion reduced the operating loss, but 10x Genomics still recorded a $19.4 million net loss, and higher other expense limited the improvement.
• Working-capital balances have increased. Inventory and accounts receivable both rose from year-end. Without cash-flow data, investors will need to monitor whether these balances convert efficiently into sales and cash collections.

Summary

10x Genomics delivered limited Q3 revenue growth, but lower inventory write-downs, a favorable product mix, and reduced operating spending materially improved gross margin and cut the operating loss in half. Consumables—especially spatial consumables—offset declining instrument revenue, while the raised full-year outlook indicates greater confidence in 2026 sales. The main issues to monitor are Atera adoption, continued consumables demand, regional weakness, and whether margin gains can move the company closer to profitability.