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

Good afternoon. I want to welcome all of you to the 2021 Annual Meeting of Stockholders of 10x Genomics, Inc. and call this meeting to order. I'm Serge Saxonov of Co-Founder and 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 the secretary of the meeting. In addition, I'm pleased to welcome Dan Coleman, a representative of Ernst & Young, our external auditing firm, who is here to answer any appropriate questions. Finally, I'd like to welcome Kris Veaco, a representative of Broadridge Financial Solutions, who has taken her oath and been important to act as our inspector of election.

Hello. I'm Justin McAnear, Chief Financial Officer of 10x Genomics. This meeting is the company's second Annual Meeting of Stockholders as a public company and is also our second annual meeting conducted via live webcast. We believe in engaging our stockholders and maximizing their ability to meaningfully engage with us. Today's virtual annual meeting 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, Justin. 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. 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. A word about voting. The polls for voting are open now, and we'll close after a brief discussion of the proposals scheduled to be voted on today. If you've already voted and you do not wish to change your vote, you do not need to do anything. 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-hand side of your virtual shareholder meeting screen. A word about the proposals. We have 3 proposals scheduled to be voted on today. Serge will introduce each of these 3 proposals. We'll then pause for questions on the proposals, and then we'll close the polls. The polls for each matter upon which stockholders will vote at this meeting will remain open until we announce the polls are closed. No ballots or proxies or revocations or changes or 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 2021 Annual Meeting of Stockholders. The proposal is 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 15, 2021. Since no such proposals were submitted with respect to this annual meeting, no such proposals will be considered at this meeting. We will provide the preliminary results of the voting based on a preliminary report from Ms. Veaco, who was mentioned by Serge, 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 this meeting. We will then adjourn the meeting. It is possible in our discussion at today's meeting, including some of our comments and responses to your questions, they 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 expressly 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. Unless 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 2020 and in our quarterly report on Form 10-Q for the first quarter of fiscal year 2021. As such, risks, uncertainties and factors may be updated in the company's periodic filings with the SEC. And with that, I'll now turn it back over to Serge.

Thank you, James. Broadridge Financial Solutions has delivered an affidavit of distribution that shows the appropriate advanced notice of this meeting and distribution of these documents was given to our stockholders of record as of the close of business on April 15, 2021, 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 asset debit affidavit of distribution will be incorporated into the minutes of this meeting. All stockholders of record at the close of business on April 15, 2021 are entitled to vote at this meeting -- 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 purposes of transacting business. Ms. Veaco, do you have a report?

Yes. The stockholders list shows that the holders of 87,174,072 shares of Class A common stock and 22,531,465 shares of Class B common stock of the company for a combined total of 312,488,722 votes are entitled to vote at this meeting. They are represented in person or by proxy at this meeting, a combined total of 289,806,295 votes, representing approximately 92.74% of the voting power of the Class A and Class B shares entitled to vote at this meeting.

Thank you. Because holders of a 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 transactional 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 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 2 Class II director nominees to serve a 3-year term expiring at our 2024 Annual Meeting of Stockholders or until their successors have been duly elected and qualified. The Board of Directors recommends the election of Kim Popovits and Brian Roberts as Class II directors of the company. Because we have an advanced 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, 2021. The Board of Directors recommends that stockholders vote in favor of this proposal. And finally, the last proposal is to consider a nonbinding advisory resolution, commonly known as a say-on-frequency proposal to determine whether nonbinding advisory votes to approve the compensation of our named executive officers, should be held every 1, 2 or 3 years. With respect to this proposal, the Board of Directors recommends the stockholders vote for a frequency 1 year.

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

Thanks, Serge and Justin. At this time, no questions have been submitted by stockholders. Having not received any questions, I'm going to proceed with the voting. As noted previously, if you've already voted and do not wish to change your vote, you don't need to do anything. If you haven't voted or if you voted previously, but want to change your vote, may do so now online by clicking the red vote here button on the right-hand side of your virtual shareholder meeting screen. The polls are open now, but we'll be closing shortly. [Voting]

Now the time has been given to vote and is 1:41 p.m. Pacific, and I hereby declare the polls closed for voting.

At this time, I will ask James to report the preliminary results of the voting.

The preliminary report of the inspector of election indicates that each of Kim Popovits and Brian Roberts has been duly elected to our Board of Directors. That the appointment of Ernst & Young LLP as independent registered public accounting firm for fiscal year 2021 has been ratified and that our stockholders have approved a resolution on a nonbinding advisory basis, determining that an annual vote is the preferred frequency of advisory votes to approve the compensation paid to our named executive officers. The final voting results will be contained in a Form 8-K that will be filed with the SEC within 4 business days following this meeting. This concludes the formal business of the meeting.

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.

I declare the meeting adjourned at 1:43 p.m. Pacific Time, June 11, 2021. Again, thank you for your time today and for your interest in 10x Genomics.