During its first-quarter earnings call on Thursday, 10x Genomics Inc. (NASDAQ:TXG) withdrew its full-year guidance, opting instead to provide quarterly forecasts.
What Happened: The company cited policy uncertainty stemming from recent U.S. government budget cuts for academic research as the reason for the shift.
“Approximately 40% to 50% of our revenue is supported by U.S. academic and government research funding,” CEO Serge Saxonov said as he announced the decision to move to quarterly guidance.
He says, “The U.S. policy changes have introduced increased uncertainty into purchasing behavior for many of our customers,” adding that the company is “highly exposed to ongoing uncertainty.”
Saxonov noted that in the face of actual and looming budget cuts, many of their customers have become hesitant to commit to new projects.
Saxonov did not hold back on his critique of the recent federal actions, which he says are undermining America’s leadership. He said, “We are indeed on the threshold of a golden age, but we are shooting ourselves in the foot, right when we should be pressing on the accelerator.”
Saxonov also called the National Institutes of Health (NIH) “the foundational jewel of biomedical progress” and warned that the broader U.S. research enterprise is at risk.
“Our university system is the global engine of scientific discovery and the envy of the world,” he said. “Current funding challenges risk fundamentally dismantling their ability to support research,” an outcome he described as “a tragedy.”
Why It Matters: Since the funding cuts were announced, the NIH has issued several grant termination letters, with hundreds more expected in the coming months.
France and the European Union have seized on the uncertainty to attract American researchers, announcing more than $500 million in incentives in recent months to lure talented researchers to their respective nations.
10x Genomics reported $155 million in revenue during its first quarter, up 9.92% year-over-year, with a loss of $34.35 million, or $0.28 per share, down from $59.9 million, or $0.50 per share a year ago.
Price Action: The stock was up 3.85% on Thursday, and is up another 4.28% after hours following its first quarter results.
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