10x Genomics, Inc. (TXG) Earnings Call Transcript & Summary

Good afternoon. I want to welcome all of you to the 2020 Annual Meeting of Stockholders of 10x Genomics and call this meeting to order. I'm Serge Saxonov, Co-Founder, Chief Executive Officer and a member of the Board of Directors of 10x Genomics, and I will act as Chairperson of the meeting. Justin McAnear, our Chief Financial Officer, joins me in welcoming you today. I would also like to welcome the members of our Board of Directors and our executive team who are present at today's meeting. James Bryant, 10x's Director of Legal, will act as secretary of the meeting. In addition, I'm pleased to welcome Rick Shunn, a representative of Ernst & Young, our external auditing firm, who is here to answer any appropriate questions. And finally, I'd like to welcome Kris Veaco, a representative of Broadridge Financial Solutions, who has taken her oath and has been appointed to act as our inspector of elections.

I'm Justin McAnear, Chief Financial Officer of 10x Genomics, Inc. This meeting is the company's first Annual Meeting of Stockholders as a public company, and it is also a virtual meeting conducted via live webcast. We believe in engaging our stockholders and maximizing their ability to meaningfully engage with us. Virtual meetings are one of the ways we are doing this. Today's session allows our stockholders to participate in the meeting regardless of their location. Stockholders are also permitted to submit questions and vote their shares online before the polls close. I will now turn the meeting over to Mr. Bryant who will explain certain procedures for today's meeting.

Thank you, Mr. McAnear. Before we get started, I'd like to cover a few administrative matters. Today's meeting has been duly called and is being conducted in conformity with the laws of the State of Delaware and the company's charter and bylaws. The rules of conduct and procedures for this meeting are available by clicking the rules of conduct link on the right side of your virtual shareholder meeting screen. The polls for voting are open and will close after a brief discussion of the proposals scheduled to be voted on today, in approximately 10 minutes. If you've already voted and you do not wish to change your vote, you don't need to do anything. But if you haven't voted or if you voted previously but want to change your vote, you may do so now online by clicking the red vote here button on the right side -- right-hand side of your virtual shareholder meeting screen. We have 2 proposals scheduled to be voted on today. Dr. Saxonov will introduce each of these 2 proposals, and we'll then pause for questions on the proposals before closing the polls. The polls for each matter upon which the stockholders will vote at this meeting will remain open until we announce that the polls are closed. No ballots or proxies or revocations or changes of proxies will be accepted after the polls are closed. Under Section 2.03 of the company's bylaws, in order for a stockholder proposal to have been properly brought before this 2020 Annual Meeting of Stockholders, the proposal was required to be submitted to the company's secretary not later than the close of business on the 90th day and not earlier than the close of business on the 120th day prior to June 1 of this year. Since no such proposals were submitted with respect to this annual meeting, no such proposal will be considered at this annual meeting. We will provide the preliminary results of voting based on a preliminary report from Ms. Veaco who, as mentioned by Dr. Saxonov, has been appointed to act as inspector of election and is present at the meeting today. [Operator Instructions] In order to ensure that the business of the meeting proceeds in an orderly fashion, we ask that you please observe the meeting rules and only submit questions directly related to the business of the meeting. We'll then adjourn the meeting. It is possible our discussion at today's meeting, including some of our comments and responses to your questions, may include forward-looking statements, which are predictions, projections or other statements about future events. These statements are not historical facts and are subject to known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from such anticipated results, performance or achievements expressed or implied by such forward-looking statements. Accordingly, such forward-looking statements should not be relied upon, and except to the extent required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, and thus it should not be assumed that our silence over time means that actual events are occurring as expressed or implied in such forward-looking statements. Please refer to our discussions set forth under the forward-looking statements section of our earnings release as well as under the caption Risk Factors in our annual report on Form 10-K for fiscal year 2019 and in our quarterly report on Form 10-Q for the first quarter of fiscal year 2020, as such risks, uncertainties and factors may be updated in the company's periodic filings with the SEC. With that, I'll now turn it back over to Dr. Saxonov.

Thank you, James. I present the following documents: a notice of this meeting, proxy cards and a proxy statement. Broadridge Financial Solutions has delivered an affidavit of distribution that shows that appropriate advance notice of this meeting and distribution of these documents was given to our shareholders -- stockholders of record as of the close of business on April 20, 2020, the date fixed by our Board of Directors as the record date for the determination of stockholders entitled to receive notice of and to vote at this meeting. A copy of the notice of this meeting and the affidavit of distribution will be incorporated into the minutes of this meeting. All stockholders of record at the close business on April 20, 2020, are entitled to vote at this annual meeting. And the list of stockholders of record is available for your review by clicking the link at the bottom of the virtual shareholder meeting page. Our first item of business is to determine whether we have a quorum for the purpose of tracking -- of transacting business. Ms. Veaco, do you have a report?

Yes. The stockholders list shows that holders of 56,306,412 shares of Class A common stock and 41,995,417 shares of Class B common stock of the company are entitled to vote at this meeting. At this time, there are represented in person or by proxy approximately 75% of all the votes entitled to vote at this meeting.

Thank you. Because holders of the majority of the voting power of the shares entitled to vote at this meeting are present in person or by proxy, we have a quorum for the transaction of business, and this meeting is duly convened. The next item of business is a description of the matters to be voted on at today's meeting. After all of the proposals have been presented, we will answer questions submitted by our stockholders. The polls will close after this discussion. The first proposal is the election of 3 Class I director nominees to serve a 3-year term expiring at our 2023 Annual Meeting of Stockholders or until their successors have been duly elected and qualified. Those 3 nominees receiving the highest number of votes of shares present in person or by proxy will be elected as directors. The Board of Directors recommends the election of Serge Saxonov, Benjamin Hindson and John Stuelpnagel as Class I directors of the company. Because we have an advance notice provision in our bylaws, all further nominations are closed. The next proposal is the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for our fiscal year ending December 31, 2020. The Board of Directors recommends that stockholders vote in favor of this proposal.

This concludes our presentation of the proposals at this meeting. Does anyone have any questions related to any of the proposals?

Thanks, Dr. Saxonov and Mr. McAnear. At this time, no questions have been submitted by stockholders. Having not received any questions, I'm now going to proceed with the voting. At this time, stockholders, I ask that you please complete your ballot for each of the proposals if you have not already done so, after which the polls will be closed. We'll take a break now for voting. [Voting]

Now that time has been given to vote, it is 1:41 p.m. Pacific, and I hereby declare the polls closed for voting. We'll now have a brief pause while we confirm with the inspector of election that the ballots have been counted.

At this time, I will ask Mr. Bryant to report the results of the voting.

The preliminary report of the inspector of election indicates that each of Serge Saxonov, Benjamin Hindson and John Stuelpnagel have been elected to our Board of Directors and that the appointment of Ernst & Young as independent registered public accounting firm for fiscal year 2020 has been ratified. The final voting results will be contained in a Form 8-K that will be filed by us with the SEC within 4 business days following this meeting. This concludes the formal business of the meeting. Mr. McAnear?

Thank you for attending today's meeting. We will now entertain questions from stockholders. Representatives from E&Y are also available to answer appropriate questions from stockholders. Please be mindful of the meeting rules.

Okay. No questions. So I declare the meeting adjourned at 1:44 p.m. Pacific Time, June 15, 2020. Again, thank you for your time today and for your interest in 10x Genomics.

This now concludes the meeting. Thank you for joining, and have a pleasant day.