Company: TXG
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001770787-25-000013
Chunk: 141

Company: 10x Genomics, Inc.
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 141
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izable value and frequently review such determinations. We write down specifically identified unusable, obsolete, slow-moving or known unsalable inventory and inventory otherwise carried above the net realizable value in the period that it is first recognized by using a number of factors including product expiration dates, open and unfulfilled orders and sales forecasts. Any write-down of inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest that the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded to cost of revenue on our consolidated statements of operations. We make assumptions about future demand, market conditions and the release of new products and new versions of existing products that may supersede old ones. However, if actual market conditions are less favorable than anticipated, additional inventory write-downs could be required. For example, we recorded charges of $11.3 million and $7.8 million in the years ended December 31, 2024 and 2023, respectively, related to excess and obsolete inventory.

Stock-based compensation

Our stock-based compensation relates to stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), market-based performance stock awards ("PSAs") including performance stock options and performance RSUs granted pursuant to equity incentive plans, and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). Stock-based compensation expense for stock-based awards are based on their grant date fair value. We determine the fair value of RSUs based on the closing price of our stock price, which is listed on Nasdaq Stock Market LLC, at the date of the grant. We estimate the fair value of stock option awards under an equity incentive plan and stock purchase right under an ESPP on the grant date using the Black-Scholes option-pricing model. The fair values of stock-based awards, excluding PSAs, are recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur. 

The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include the per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield and the expected stock price volatility over the expected term. We calculate the expected term using the simplified method, which is the mid-point between the vesting and contractual term. We determine expected volatility using the historical volatility of the stock price of similar publicly traded