I'll also walk through recent business developments before handing it over to Adam for the financial review and outlook. Total revenue for the second quarter was $173 million during the quarter. We settled our worldwide patent litigation with Bruker on favorable terms and recognized an upfront payment of $68 million that we allocated to both operating expenses and license and royalty revenue. We continue to see solid signs of underlying single cell demand on the consumable side.
While revenue was down year-over-year, Chromium reaction volumes grew both year-over-year and sequentially, an indicator of increasing demand for our solutions and single cell more broadly. This growth was driven by robust adoption of our latest products, including GEM-X Flex and Universal On-Chip Multiplex, which have been instrumental in lowering cost barriers, enabling larger scaling, and opening up new applications. Additionally, we saw meaningful year-over-year and sequential growth in spatial consumables, revenue, and volume. Within spatial, Xenium consistently serves as a strong driver of growth and performance.
Spending remains conservative, and capital equipment spending continues to be a significant challenge both in the U.S. Customers are facing increased scrutiny on purchases, longer approval timelines, and in many cases, new restrictions on capital spending and staffing within their labs. Our conversations with customers reinforce our conviction that single cell and spatial biology are the most promising areas of growth in life science tools. Built to dramatically increase throughput and streamline workloads, Flex v2 provides ultimate flexibility for customers when designing their experiments.
| Metric | Period | Current guidance |
|---|---|---|
| Q3 2025 revenue | Q3 2025 | $140M-$144M, reflecting ~$4M China pull-forward into Q2 and continued cautious spending; ex pull-forward, broadly in line with Q2 |
| Spatial instrument revenue | Q3 2025 | anticipated to look fairly similar to Q2 |
| Q4 2025 instruments (preliminary) | Q4 2025 | no formal guide; no reason to expect meaningfully different from Q3 aside from typical seasonal Q3-to-Q4 CapEx uptick |
| China revenue | Q3 2025 | expected to be lower in Q3 due to the one-quarter tariff pull-forward, then bounce back to recent strength into Q4 |
| Scale Biosciences acquisition impact | Remainder of 2025 | no material impact on revenue or operating expenses; near-term revenue impact minimal |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +13% ($172.9M); -5% to $145.6M excluding settlement license/royalty revenue | Bruker settlement license/royalty revenue boosted the reported figure; underlying business reflected cautious spending. |
| Total consumables revenue | -1% ($122.2M) | Spatial consumables growth offset by lower Chromium consumables. |
| Chromium consumables revenue | -9% ($85.8M) | Primarily lower average reaction prices, despite year-over-year and sequential reaction volume growth. |
| Spatial consumables revenue | +24% ($36.4M) | Primarily Xenium consumables, with growing per-instrument utilization. |
| Total instrument revenue | -39% ($14.5M) | Chromium instruments -35% on lower ASPs; spatial instruments -42% on fewer instruments sold; global CapEx headwinds. |
| Services revenue | +47% ($8.5M) | Increase in Xenium service plans. |
| Gross margin | 72% vs 68% prior year (67% excluding settlement) | Higher license and royalty revenue from the settlement; ex-settlement margin was 67%. |
| Operating income | $30.1M vs $41.7M operating loss prior year (-$37.9M ex-settlement) | Gain on settlement; ex-settlement operating loss of $37.9 million. |
| Americas revenue | -15% ($78.9M; +7% sequentially) | U.S. academic and government funding pressure; CapEx headwinds. |
| EMEA revenue | -7% ($34.7M; +9% sequentially) | Ongoing CapEx headwinds, partly offset by solid consumables. |
| APAC revenue | +41% ($32M; -1% sequentially) | Strong China growth (~40% ex pull-forward) plus a ~$4M tariff-driven pull forward from Q3 into Q2. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Single-cell pricing elasticity | Staged price reductions driving volume | Reaction volumes growing year-over-year and sequentially; reaching net positive revenue growth will take longer given macro challenges; price per reaction needs to be in hundreds, not thousands | — |
| Scale Biosciences acquisition | — | Definitive agreement to acquire for $30M upfront cash and stock plus contingent consideration; a technology acquisition (combinatorial indexing, Quantum Barcoding) to broaden the portfolio, minimal near-term revenue impact | — |
| Spatial / Xenium leadership | Best-in-class platform | Continues to set Xenium apart on data quality, accuracy, robustness, throughput and ease of use; large translational studies (Genome Institute of Singapore TISHUMAP) highlighted | — |
| Product roadmap | Visium HD, GEM-X Flex | Shipped Visium HD 3-prime and HD cell segmentation; preparing Visium HD XL, Xenium RNA+protein, and Flex v2 plate-based product for large-scale perturbation and biopharma | — |
| AI / virtual cell and translational | Emerging | Two key trends: large translational studies using Xenium and large-scale single-cell perturbation experiments to train AI models / build virtual cells | — |