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Perplexity Finance

PACB

Pacific Biosciences of California, Inc.

PACB

NASDAQ

Market Closed

Saturday, May 24, 2025

$0.92

-$0.02

2.09%

At close: May 23, 4:00:01 PM EDT

$0.92

$0.00

0.2%

After hours: 7:56:38 PM EDT

Change

-$0.02

2.09%

Financial Profile

Prev Close

$0.94

Market Cap

$276.62M

Day Range

$0.91 - $0.96

Open

$0.92

P/E Ratio

-0.3

52W Range

$0.91 - $2.72

24H Volume

$6.79M

Dividend Yield

0.00%

EPS

-2.74

Earnings

Report Date

May 8, 2025

Reported Revenue

37.2M

Beat +0.69%

Avg 1d Change

11.73%

Report Period

Q1 2025

Reported EPS

-0.15

Beat +21.05%

Implied Move 1d

29.24%

Transcript

11m 5s

Earlier today, we issued a press release outlining the financial results we'll be discussing on today's call. A copy of which is available on the Investors section of our website at www.pacd.com or as furnished on Form eight ks available on the Securities and Exchange Commission website at www.sec.gov. A copy of our earnings presentation is also available on the Investors section of our website. With me today are Christian Henry, President and Chief Executive Officer and Jim Gibson, Chief Financial Officer. In today's call, we will be making forward looking statements, including, among others, statements regarding predictions, estimates, expectations and guidance. You should not place undue reliance on forward looking statements because they are subject to assumptions, risks and uncertainties that could cause their actual results to differ materially from those projected or discussed. Please review our SEC filings, including our most recent Form 10 Q and 10 ks and our press releases to better understand the risks and uncertainties that could cause results to differ. We disclaim any obligation to update or revise these forward looking statements except as required by law. We will also present certain financial information on a non GAAP basis. Which is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the company's operating results as reported under U. S. GAAP.

12m 31s

Reconciliations between historical U. S. GAAP non GAAP results are presented in our earnings release, which earnings release, which is available on the Investors section of our website. For future periods, we are unable to reconcile non GAAP gross margin and non GAAP operating expenses without unreasonable effort due to the uncertainty regarding among other matters certain acquisition related items, that may arise during the year. A recording of today's call will be available shortly after the live call in the Investors section of our website. Those electing to use the replay are cautioned that forward looking statements may differ or change materially after the completion of the live call.

13m 11s

I will now turn the call over to Christian. Thank you, and good afternoon, everyone. Today, I'll share our first quarter twenty twenty five results. Highlight recent commercial and strategic progress, and outline our expectations for the remainder of the year.

13m 27s

Following my remarks, Jim Gibson, our new Chief Financial Officer will discuss our financial results and guidance in much more detail. We reported first quarter twenty twenty five revenue of 37,200,000.0 which is slightly above our preliminary estimate shared on April 9, and consistent with our internal expectations. Instrument revenue for the quarter was 11,000,000 compared lower than compared to the prior year largely reflecting increased uncertainty in academic funding particularly in The United States. In total, we shipped 12 Revio systems and 28 Vega systems bringing cumulative shipments of to two eighty two Revio systems and 35 VEGA systems. To provide more transparency into our customer dynamics, we've introduced new metrics on Slides four and five of our investor presentation which break out shipment dollars by customer type. While we don't expect to share this segmentation every quarter, we believe it offers helpful context particularly in light of the current market conditions. As shown on Slide four in our Q1 academic and research institute segment, represented the lowest percentage of instrument shipments since the Revvio launch. We believe that this is the direct result of increased funding pressures our customers are seeing with respect to capital equipment purchases. By contrast, instrument shipments to our other customer segments have remained largely stable over the past several quarters.

15m 6s

Notably, we saw growth among our hospital and clinic customers reflecting continued momentum for HiFi sequencing in clinical and translational research settings. And despite broader funding headwinds, we continue to attract new customers to PacBio. Roughly half of all Vega and Revvio systems shipped in Q1 went to new instrument customers further showing the expanding market appeal of our HiFi technology. While macroeconomic pressures weighed on system placements, consumables showed strong growth in the quarter In the first quarter of twenty twenty five, consumable revenue reached a record $20,100,000 reflecting 26% year over year growth and steady utilization across our growing base of Revvio systems. Typical fiscal year end purchasing in Japan also contributed to the strong performance. Notably, unlike instrument shipments, consumable demand from our academic and research institution customers remained stable compared to prior quarters indicating more resilience in usage driven spend versus capital purchases. Further underscoring Hi Fi adoption, total petabase output from PacBio long read sequencers increased 37% year over year.

16m 31s

Highlighting continued scaling across our installed base. Turning to our full year outlook. The macroeconomic environment remains exceptionally challenging. Since our April press release, the impact of newly implemented tariffs between The U. S. And China combined with additional pressure from proposed NIH budget reductions for fiscal year twenty twenty six, have introduced incremental risks that could have an impact on revenue in 2025. In light of these developments, we are adjusting the lower end of our previously guided revenue range by $5,000,000 We now expect full year 2025 revenue to be between 150,000,000 and 170,000,000 The environment remains dynamic and should tariff conditions or academic funding further deteriorate, we may face additional headwinds. That said, we are confident in our strategic direction anchored by strong customer interest in long read sequencing continued momentum in the adoption of HiFi and a robust innovation map. We are also committed to our plan of turning cash flow positive as we 2027 and remain focused on disciplined cost management. To reduce our cash burn. In response to ongoing market uncertainty and headwinds in the industry, we announced and executed on a restructuring plan in April designed to narrow our strategic focus and reduce our operating costs.

18m 3s

Though reductions in headcount and non headcount related expenses across all functions in our organization we expect to lower our annualized non GAAP operating expense run rate by $45,000,000 to $50,000,000 by year end. Following these cost reduction measures, we are concentrating our efforts on our highest impact long read platform initiatives. We continue to advance development programs aimed at enhancing our existing platforms, such as Revio and Vega, including the future launch of multi use smart cells. This innovation is designed to further reduce sequencing costs for our customers to unlock higher sequencing volume while simultaneously improving our consumable gross margins. The development program is progressing quickly and we've demonstrated high quality repeatable reuse results internally. Additionally, we are accelerating development efforts for ultra high throughput long read sequencing system. This next generation platform is expected expected to significantly increase throughput. Enabling human whole human genome sequencing cost at or near price parity with short read technologies. I'd also like to provide a brief update on how our restructuring initiative has impacted our short read sequencing strategy. While we continue to see strategic value in providing both long read and short read sequencing technologies to the market, the current macroeconomic conditions necessitate focusing our resources and investments.

19m 37s

On areas where we believe we can achieve the greatest market share gains and hold the strongest competitive differentiation. Based on these criteria, we are prioritizing our HiFi technology and the long read sequencing market and have made the decision to pause development of our high throughput short read sequencing Although we have paused our development of the high throughput short read platform, we remain fully committed to selling the Onso platform and supporting our current Onso customers. Through ongoing commercial support and consumable supply. Moving on to product updates. In the first quarter, we continued to roll out our new Spark chemistry. Which significantly enhances Revio's data output and performance, while reducing the amount of DNA input required. Customer uptake has exceeded expectations with nearly 90% of our REVIO reagent kit shipments in the first quarter being Spark Chemistry. We're certainly pleased with our customers' response. Early adopters like Signios Biosciences a global leader in genetic testing services, reported yield increases of 46% relative to their experience with the Version one chemistry and emphasized how Spark's lower sample input requirements has unlocked the ability to sequence previously inaccessible samples. Similarly, the University of Bern highlighted substantial productivity and cost efficiency improvements across various genomic research applications.

21m 12s

Turning to Vega, early customer response has been very encouraging. Users are achieving strong yields. Consistently exceeding our specification of 60 gigabases of Hi Fi data per SmartCell. And deploying the platform across a wide range of applications. For example, the integrated microbiome resource at Dalhousen is using Vega for microbial genomics and eDNA amplicon sequencing for worldwide client samples. While Elagen is applying to amplicon sequencing in support of DNA synthesis workflows. We're also seeing the adoption in labs for gene editing research and targeted sequencing applications. These early use cases reflect Vega's accessibility, ease of use and versatility. Enabling us to broaden our customer base expand into new markets and bring HiFi sequencing into new labs beyond the traditional large scale whole genome application. Notably, approximately 50% of Vega shipments through Q1 were to new to PacBio instrument customers. Looking ahead, we expect to continue ramping Vega manufacturing through the second quarter and reach a run rate production in the second half of twenty twenty five. On the informatics front, we recently announced the licensing agreement with the Chinese University of Hong Kong, and the Center for Novistics to integrate advanced deep learning models into our sequencing workflow.

22m 47s

Significantly enhancing methylation detection accuracy and enabling comprehensive analysis of critical epigenetic markers such as 5mc, 6ma and native 5HMC. The ability to profile five HMC, a dynamic tissue specific marker implemented in brain development, cancer and neurodegenerative diseases, opens new opportunities in liquid biopsy cancer detection and cell free DNA analysis. Several customers including clinical customers like GeneDx, and Children's Mercy Kansas City Hospital have recently implemented methylation analysis into their tests and we believe that the addition of these new models will further strengthen our platform's leadership in epigenetic sequencing, and help enable clinical researchers to find greater [indiscernible] from HiFi Genome. Moving on to other recent highlights, we are proud to have been selected as the technology partner for the Davos Alzheimer's Collaborative's North American Dimension Dementia Registry Project. This initiative aims to build a comprehensive multiomics dataset advancing global understanding of Alzheimer's genetics. Especially within diverse and underrepresented populations. We also continue to gain momentum with our new and existing clinically focused customers in the first quarter. Especially with the hospital and clinic customer base. REVYO placements in the quarter included leading institutions such as the Lurie Children's Hospital in Chicago, Imagine Institute in France, and the Institute of Medical Genetics at the University of Zurich.

24m 32s

These institutions anticipate leveraging Revio primarily to improve genetic disease testing capabilities and solve more cases for variant detection [indiscernible] missed with other technologies. Additionally, we've established a pioneering collaboration with Chula Longkorn University in Thailand to interrogate PacBio to integrate PacBio HiFi whole genome sequencing into their national newborn screening research program. The first initiative of its kind in Southeast Asia. This groundbreaking project aims to leverage HiFi's unique capability to reveal previously undetected genetic variants significantly enhancing the precision of early life genetic screening. Finally, we are also pleased to share the initial results from our annual customer survey which shows a net promoter score of over 50 which is widely considered an excellent rating underscoring our commitment to customer satisfaction, innovative product development and exceptional customer support. We've also had the opportunity to connect directly with customers through our global Prism twenty twenty five event series. Our flagship forum for engaging the genomics community and showcasing the future of long read sequencing. Events held across Asia, Europe and The United States have brought together researchers, clinicians and partners to explore the latest PacBio innovations and share real world insights. At each stop, we've seen strong engagement and enthusiasm.

26m 8s

Particularly around the accessibility of Vega, the performance gains delivered by Spark and the expanding role of HiFi sequencing in clinical research. We look forward to concluding this year's series next week in Boston. Lastly, I'd like to introduce Jim Gibson, our new CFO, who joined PacBio on March 31. Jim brings over three decades of financial leadership experience across technology, healthcare and life sciences, including at organizations like Apple, Tesla, and Netflix. As they went through significant transformation and growth. We look forward to his leadership and financial stewardship as we continue building PacBio into a scalable profitable and cash flow positive business. With that, I will now hand the call over to Jim.

26m 56s

Jim? Thank you, Christian. I'm incredibly excited to join PacBio. The company's strategy and mission resonate deeply with me, and I believe we're just beginning to unlock the full potential of what this company can deliver to the life sciences community. I look forward to meeting our customers, partners and investors in the months ahead. Now turning to our financial results. I will be discussing non GAAP results, which include non cash stock based compensation expense, I encourage you to review the reconciliation of GAAP to non GAAP financial measures in our earnings press release. As discussed, we reported $37,200,000 in product, service and other revenue in the first quarter of twenty twenty five. Compared to $38,800,000 in the first quarter of twenty twenty four. Instrument revenue in the first quarter was 11,000,000 a decrease of 42% from $19,000,000 in the first quarter of twenty twenty four. Due to lower REVIO system shipments. We shipped 12 REVIO systems in the first quarter of twenty twenty five compared to 28 REVIO systems in the first quarter of twenty twenty four.

27m 57s

Additionally, we shipped 28 Vega systems in the first quarter of twenty twenty five. We ended the quarter with two eighty two cumulative Revio system shipments, and 35 cumulative VEGA system shipments. Turning to consumables, Revenue of $20,100,000 in the first quarter increased 26% from $16,000,000 in the first quarter of last year.

28m 20s

With annualized revenue pull through per system of approximately $236,000 Finally, service and other revenue was $6,000,000 in the first quarter of twenty twenty five. Compared to $3,800,000 in the first quarter of twenty twenty four driven by an increase in service contract revenue related to Revio. From a regional perspective, each region reported year over year growth in consumable revenue offset by instrument headwinds. Americas revenue of $16,300,000 decreased 8% compared to the first quarter of twenty twenty four, with the region continuing to be impacted by government funding headwinds and NIH funding uncertainty. For Asia Pacific, revenue of $11,600,000 decreased 9% compared to the first quarter of twenty twenty twenty four. Consumables were particularly strong in the region as REVIO system utilization increased to a highest level since its launch. Complementing the increased utilization, customers in Japan received their typical fiscal year end stocking orders and some customers in China made purchases ahead of potential tariffs. Finally, EMEA revenue of approximately $9,300,000 increased 11% compared to the first quarter of twenty twenty four.

29m 29s

Europe in particular saw strong REVIO placements in the hospital and clinic customer base.

29m 35s

Moving down the P and L, first quarter twenty twenty five non GAAP gross profit of 15,000,000 represented a non GAAP gross margin of 40%, compared to a non GAAP gross profit of 12,600,000.0 or a non GAAP gross margin of 33% in the first quarter of last year.

29m 52s

Non GAAP gross margin increased year over year due to improved product mix.

29m 56s

As consumables, have higher gross margins, represented 54% of total revenue in the first quarter of twenty twenty five. Compared to 41% of total revenue in the first quarter of twenty twenty four.

30m 8s

In addition, we realized per unit cost savings from both REVIO instrument and REVIO consumables. Non GAAP operating expenses were $61,700,000 in the first quarter of twenty twenty five.

30m 20s

Representing a 29% decrease from non GAAP operating expenses of $87,200,000 in the first quarter of twenty twenty Operating expenses in the first quarter included non cash share based comp of 8,000,000 compared to $17,400,000 in the first quarter of last year. The decrease in both non GAAP operating expenses and non cash stock based compensation was primarily due to the restructuring initiative we implemented in the second quarter of twenty twenty Regarding headcount, ended the quarter with five seventy employees compared to five seventy five at the end 2024. And seven eighty seven at the end of the first quarter of twenty twenty four.

31m

As a result of our restructuring announced on April 9, we expect second quarter ending headcount to be approximately 500. Non GAAP net loss was 44,400,000.0 representing $0.15 per share in the first quarter of twenty twenty five.

31m 16s

Compared to non GAAP net loss of $71,400,000 representing $0.26 per share in the first quarter of twenty twenty four. We ended the first quarter with $343,100,000 unrestricted cash and investments. Compared with $389,900,000 at 12/31/2024. First quarter twenty twenty five cash payments included a $5,000,000 license payment. In the first quarter, we recorded several items related to our restructuring that impacted our GAAP results. Our GAAP gross loss of 1,400,000.0 included $4,300,000 related to the amortization of acquired intangible assets, dollars 4,100,000.0 for a loss on purchase commitments and $7,700,000 related to inventory adjustments related to restructuring. Additionally, we recorded GAAP operating expenses of 4 and 27,600,000.0 which included $381,800,000 of restructuring charges comprised primarily of 359,300,000.0 of accelerated amortization of acquired intangible assets and $15,000,000 of impairment charges. GAAP operating expenses also included an $18,700,000 decrease the change in the fair value of the contingent consideration. It is important to note that the amortization of acquired intangible assets and impairment charges are non cash accounting adjustments. And do not impact our liquidity operations or ability to execute on our long term strategy. Now turning to guidance. As we've discussed earlier, we now expect revenues to be in the range of $150,000,000 to 170,000,000 At the midpoint, this represents a growth rate of approximately 4% compared to 2024.

32m 56s

As Christian indicated earlier, we lowered the bottom end of our range by $5,000,000 as a result of uncertainty surrounding our ability to ship new instruments into China without significant tariffs.

33m 7s

However, this continues to be an extremely dynamic macro environment. Especially with respect to trade policy and uncertainty surrounding future NIH funding. Our guidance midpoint still assumes a decline in revenue shipments from 2024. However, this is offset with growth in Vega and consistent with the first quarter, we expect annual pull through for Rebio Systems to in the low to mid $200,000 In The Americas, our guidance continues to assume significant uncertainty in the broader academic research community. Especially in the near term with accelerating activity in the clinical market anticipated to offset some of the potential headwinds. For Asia Pacific, we anticipate growth in the region in 2025, the funding dynamics in several countries continue to affect capital purchasing timelines for the Revio platform. Additionally, recently enacted tariffs may increase headwinds further in the region We continue to expect EMEA to be the fastest growing region in 2025 as population sequencing programs scale, whole genome sequencing in a clinical setting grows and we expand our customer base with Vega. Looking at Q2, we are forecasting limited sales in China after April 10. And as a result, we expect revenue in the second quarter of twenty twenty five to be flat compared to the first quarter of twenty twenty five.

34m 27s

Moving down the P and L, we continue to expect the 2025 non GAAP gross margin to be between 3540%. Representing an improvement of over 400 basis points compared to 2024. And we expect to exit the year above 40%. We continue to expect cost improvements in both the REVIO system and REVIO consumables. Additionally, we expect Vega cost of goods sold per unit to improve as the platform platform moves from the pilot manufacturing line to the full production line later this year. We do not directly import any of our materials or components from China although we do expect that our suppliers have some exposure.

35m 3s

Could The U. S. Enact tariffs on certain countries in our supply chain we could face incremental pressure to our cost of goods the second half of this year. As of now, our guidance does not factor in a material increase in COGS related to tariffs. Looking at Q2, we expect non GAAP gross margin to be lower compared to Q1 primarily due to product mix as we expect instrument revenue to make up a greater portion of total revenue. As a result of our restructuring, we now expect non GAAP operating expenses to decline 14% to 17% compared to 2024 and be in the range of $240,000,000 to $250,000,000 We expect to continue to realize savings in 2026 and as such anticipate 2026 non GAAP operating expenses to be lower than in 2025.

35m 49s

We continue to expect interest and other income to be between $12,000,000 in 2025. And the weighted average share count for EPS for the full year to be approximately $99,000,000 Additionally, following our restructuring, we expect our ending cash balance of cash and investments to be higher than previously anticipated and now expect to end the year with approximately $270,000,000 When excluding the $5,000,000 licensing payment in Q1, this implies $115,000,000 cash burn in 2025.

36m 20s

Or an improvement of $72,000,000 in adjusted cash burn. Compared to 2024. We remain on track towards our plan to achieve cash flow positive by the end of twenty twenty and believe we're at $343,000,000 in cash and investments as of March 31, will fund us through this transition. Will now hand it back to Christian for some final remarks.

36m 42s

In closing, we had a nice start to the year. Though we remain cautious given the current macroeconomic environment. Including uncertainty around academic funding, and the potential impact of trade policy development. By proactively implementing our recent restructuring initiatives, we have emerged as a leaner, more focused organization positioned to successfully navigate these near term challenges and execute on our long term strategy. As we look ahead, our strategic priorities remain clear. First, we are committed to expanding the adoption of HiFi sequencing by building on the strong early enthusiasm for our Vega benchtop platform and by continuing to enhance our Revvio platform through the ongoing rollout of Spark Chemistry. Vega expands Hi Fi's accessibility into a broader and more diverse customer base, while Spark, allows Revio users to extract more data from their sequencing runs using significantly less DNA input. Second, we remain dedicated to innovation through future product launches such as enabling multi use chip functionality to further reduce sequencing costs. Concurrently, are advancing our next generation ultra high throughput long read sequencing technology. These initiatives aim to deliver HiFi sequencing at or near price parity with short read sequencing. Significantly broadening our market potential. Finally, we are progressing our clinical strategy to improve outcomes and build long term durability into our business.

38m 18s

This includes expanding our kitted solutions like Pure Target to genetic testing labs and continuing to drive adoption at hospitals and medical centers around the world. With these clearly defined priorities, a streamlined organizational structure and an increased focus on long read innovation, we are very well positioned to deliver sustained growth over the coming years and achieve our goal of turning cash flow positive as we exit 2027. Thank you again for your continued support We look forward to updating you on our progress in the quarters ahead. With that, I'll turn the call back to the operator to begin the Q and A session. Ladies and Our first question today comes from Matthew Sykes Goldman Sachs. Please go ahead with your question. This is Jake on for Matt. Could you guys talk a little more about the clinical opportunity ahead of you and how much of this can offset some of the concerns academic and government, particularly throughout the rest of this year? Thank you. Yes. Hi, Jake. Thanks for the question. It is really an exciting opportunity and it really started in 2024 as we got the pure target panel out into the market and had significant customers like Quest and and Myriad Genetics and others start to adopt that technology.

40m 8s

And what we're seeing is that the ability to see parts of the genome that short read sequencers can't see has been really appealing to these companies. And they're developing LDT tests that sit alongside sit alongside the short read workflows and are eliminating other legacy type tests and technologies in their workflow. So first and foremost, these tests allow them to do things they couldn't do before using sequencing and they make it more economical. And so when you look at where we are today we're expanding that, we're continuing to add more genes to these panels. Increase the level of multiplex And what that does is it makes it more appealing to more of these diagnostic type customers where we think we can get more durable revenue. And so we do think that's an area where we're effectively doubling down and really focusing on because we think the revenue opportunity there is significant not just in 2025, but over the next several years. The second aspect of this is in the rare disease world where we continue to see remarkable results using Revvio and now with the Spark chemistry, And we're seeing expansions of clinicians and clinical researchers use Revvio in the hospital setting to look at to do, research and looking at these rare disease, those rare disease populations and patients.

41m 53s

And so, we're seeing that we're really seeing that grow aggressively in Europe where we're seeing in The Netherlands and Sweden, Denmark, other countries and you just look at our placements in the first quarter of Revio, a lot of them went to that segment And so we do see this as a way to make up for [indiscernible] potential uncertainty around NIH funding in particular.

42m 28s

Jacob, we'll take the next question.

42m 30s

Our next question comes from Jack Meehan from Nephron Research. Please go ahead with your question.

42m 37s

Thank you and good afternoon.

42m 41s

I had two questions. The first is within the 2025 guidance, if you could just share any rough expectations for what that might imply for REVIO and Vega placements, like what you'd be willing to share?

42m 57s

And then second is, [indiscernible] the the swift actions you're taking As it pertains to the short read assets, I was curious if this is something I know you're going to support Anso, but is this something you would consider monetizing? Is that something you're evaluating just any thoughts on that would be great. Thank you.

43m 20s

Yes, thanks. Thanks for the question. Certainly, won't give the specific unit numbers associated with where we see Revvio and Vega, but we did say in the prepared remarks that we do expect Revvio shipments to be down in unit terms year over year And we do think Vega Vega has a very significant opportunity to grow And I think the timing of Vega was right, was spot on in the sense that having desktop platform with a lower capital cost in a challenging macroeconomic environment really has given us a lot of great opportunity and we've seen we've seen the funnel continue to grow. And so I do fully expect Vega to grow in unit placements perhaps every quarter, but certainly over Q1 levels as we grow in Q2 and we'll kind of update it as we get into the back half. Additionally, we're seeing of course is that we're as we achieve manufacturing scale up the gross margin associated with Vega will improve over the course of the year which is great for us. Because we will have a significant cost reduction as we get to production scale. Moving from the R and D or prototype production line to the to the operational manufacturing line.

44m 50s

And so would expect not only placements to grow, but profitability or gross margin per system to grow over the course of the year as well. So we're pretty excited about that. With respect to Short Reads, it is a challenge, it is difficult given the environment to keep advancing both the long and the short read at the same time. And so we did make the tough decision to really double down on long read where we have very significant competitive advantages. And so we are evaluating all our alternatives with respect to the the short read platform. We continue to support our Onco customers in the field and with the high throughput system, we have made a lot of progress with getting that system developed. And so it is in a state now where it could be valuable. And so we'll explore that. And as we as we have more information, we'll certainly share it with you guys. Next question. Our next question comes from Kyle Mixam from Canaccord Genuity. Please go ahead with your question. Hi, everyone. This is Alex on the line for Kyle Nixon. Thanks for taking my question.

46m 15s

I think one place to start would be if you could just kind of discuss what exactly you factored into your decision to pause the development of the high throughput short read sequencer Essentially, it's just a mix of competition as well as the poor funding environment. Thanks.

46m 31s

Yes. Thank you for the question. I mean, certainly, we in making the decision we had to consider several things. First, the macroeconomic environment and where where our revenues revenues and margins that are needed to fund development are. That was one thing we had to consider Second, we had to consider where are we strongest in the market and where do we see the biggest opportunities when you're evaluating your resources, you want to put them up against projects where you believe you have the the best chance to win and the most certainty around winning. And so that was something we considered And then the third thing very, very importantly the progress we've made in R and D on the long read side has just been frankly breathtaking over the last twelve to eighteen months. You saw that we launched the Spark chemistry last year. In my prepared remarks, we talked about one customer that's seeing 46% increase in throughput [indiscernible] that we're seeing consistent improvement across the board relative to where customers were before Spark Chemistry. And so we see the opportunity to add more value to that platform. And so we certainly want to keep investing And then when we start to look at the advances we continue to make in preparing for the ultra high throughput long replatform Things like multi use things like advances in our next generation SmartCell programs, things have gone perhaps faster than we expected.

48m 18s

Which means that we could get a new platform to market sooner And in all of our conversations, with our core customers, there's not a single customer that I talk to that says, gosh, I want I would like more throughput and more and better pricing and we think that our next generation of products here with progress that we've made will get us close to price parity with short read genomes and provide very significant amounts of throughput so that even the highest scaled labs in the world could consider long read sequencing as in germline genomics in particular. And we believe that we we certainly have the technical capability and the market presence to win a significant portion of that germline genetics business say over the next five years. And so those were the decisions those were the factors that went into the decision. It's never an easy decision. We were encouraged by what we've done on the short read side. But when you're sitting in an environment like this right now, you being lean, being focused and prioritizing is absolutely essential and that's what we did.

49m 40s

Question. Thank you very much. One last one for me. So we're essentially six months post Vega launch announcement, can you just discuss if there's been any cannibalization of Revio by Vega? And then importantly, what is your level of confidence in being able to eventually transition Vega customers into more revenue placements? Thank you.

50m 6s

Yes, that's a good question. And so you're right, we announced we announced Vega at back in November, I believe. Early November and we started shipping the product in December and and we've seen very strong demand from funnel building as well as in this environment place the number of systems we did in Q1, was actually quite quite pleased with that And I think what we're seeing is we're not seeing cannibalization of Revvio from Vega, but we are seeing situations where a customer may want is certainly wants a Vega but they don't have the funds right now and so they decide to buy a Vega instead. And we've seen that in several cases in Q1 and we continue to see that a bit.

51m

But it's not I wouldn't call it cannibalization that hey, I've decided that Vega is all I need and not Revio. It's I need Revvio but I can't afford Revvio right now for funding considerations but I can get started with Vega and we're seeing that. So I believe that those customers over the next few years as the funding environment improves, we'll we'll see revios sitting right alongside Vegas and vice versa. In fact, we are seeing customers that have revios by Vegas for and the reason why they do that is for kind of rapid turnaround or their big is already fully occupied and they want to have additional sequencing capacity available to them. And so I do think they're symbiotic. They're not really cannibalizing so we really haven't seen that And then I think the last thing is, just would mention, if you look at the funnel, I think our funnel is well over 50% new customers. And so the strategy of broadening our reach through Vega and then ultimately transitioning to getting those customers to transition to Revvio over time, is certainly working at this point particularly in this challenging macroeconomic climate. Thanks, Alex.

52m 34s

Thank you.

52m 37s

Our next question comes from Masso Currico from Stephens. Please go ahead with your question. Great. This is Harrison on for Mason.

52m 47s

Good afternoon and thanks for taking the questions. I wanted to start with how much visibility you think you have into the Vega funnel? And how does your confidence in the outlook there compared to that of revenue?

53m 2s

Are there error bars there around [indiscernible] the bake up placements more narrow?

53m 10s

Okay. We'll start there with visibility. Now it's interesting when you have a lower cost capital instrument, you have many, many more units that are sitting in the funnel. So that gives you many more shots on goal in any given quarter to achieve the unit numbers. And and as a result, the revenue. And so I do think the quarter to quarter visibility is pretty reasonable right now in the near term. As you get further out, of course, it becomes you know, they become more these are conversations and they progress from quarter to quarter. And so overall, I would say our visibility is pretty strong. We've just had these Prism events that I discussed in my prepared remarks and in the Asia Pacific which meeting held in Vietnam, there were several several POs that or PO commitments that were that came in right during the meeting. And another thing is we've had Bluebird kind of deals come in for Vegas systems that no one was expecting and they just are coming in. And so I think that that's additive to improving your visibility around how you're forecasting. And if you are thoughtful in how you put your forecast together, you certainly have enough to get some reasonable confidence that you can achieve your forecast numbers.

54m 48s

And so I feel pretty good about it right now. I think we are just like all of our peers, we're wrestling with with trade policy and tariffs and what does that mean for demand outside The United States as I think most of you know, about half of our revenue comes a little more than half of the revenue comes from outside The United States. And so we've done a lot of work on thinking about tariffs from the revenue perspective as well as from the the cost perspective. And as we put our guidance together, we tried to certainly consider all of those dynamics.

55m 27s

Got it.

55m 28s

And sticking to your guidance there, given the fluid market backdrop, could you just speak to some of the upside and downside scenarios of revenue pull through this year? I know there's lots of moving parts there, but what's really baked in into the bolt through guide this year? Does it rely on any large scale projects starting up in the back half? And if so, how much visibility do you have into this?

55m 55s

Yes. We've taken a very conservative approach where most of the most large type projects would be upside to our forecast. I think that that's certainly the right way to play that. And the reason why we do that is because the timing of when a large project gets agreed to, contracted, the systems installed and the samples starting to flow. Can be highly variable. And so when you start to think about it in the context of your financial guidance, you would much rather see that as kind of upside as opposed to core. And so we've generally taken that approach. One of the things we pointed out in our deck is that that consumable revenue with principally and that's really Revio at this point. Has been pretty consistent across our customer base. So each customer segment we haven't seen dramatic changes in in consumable usage. [indiscernible] And so when you think about our assumptions on the guidance with respect to pull through, we've been using that low 200s to kind of mid 200s pull through assumption in preparing our guidance. And of course, we go a lot more granular than that. We look in each territory, we We try to look evaluate different account types and as we as continue to place more revios into commercial accounts, diagnostic accounts, clinical accounts, they're pretty consistent users of the product and they're not as project driven.

57m 42s

And so that can give you better confidence and certainty around around the utilization pull through levels. And so we tried to tried to show a little bit about that If you look at our revenue picture, the challenge is really on instrument placements in uncertain in an uncertain time. The second challenge is of course China where right now we're able to ship reagents into the country but without significant burden of tariffs. But But instruments are are subject to tariff right now and certainly that's had an impact. And so that will be something that we'll be monitoring and it's the real reason why we lowered the bottom end of the guidance. If China stays shut off and and NIH the NIH budget has a hard time getting getting approved or or have such a massive cut that it will force most people to pause those could certainly have an impact on us. We tried to consider it. When we gave our original guidance, for the year, we gave a pretty wide range. Knowing this uncertainty and that's why we feel we felt comfortable that we didn't to make significant change to our guidance. The upsides upsides to our plan would be certainly more more clinically driven placements of revios, maybe a little bit higher utilization than than what we're forecasting.

59m 18s

And then of course being able to ship instruments into China would be a positive would certainly be a positive tailwind for us.

59m 28s

Thank you. Great. That all makes sense.

59m 32s

Yes. Our next question comes from David Wastenburg from Piper Sandler. Please go ahead with your question. All right. Close enough. Thank you very much for taking the question. So let me maybe just talk about the some of the pull through. It's been kind of in that mid 2,000 range. Obviously, the theoretical max is higher than that.

59m 54s

And I think you have a lot of good amount of customers that are doing that. So you can talk about maybe some of the strategic plans on getting it up to maybe above $300,000 a placement. And what that could do with adjusted some of the gross margins, if you were able to kind of get that up? And I got a couple more. Thanks.

1h 15s

Yes. Well, I mean, first and foremost, obviously, this is fundamental to the business. You saw gross margins were much higher than expectation in the quarter and that's for a couple of reasons. The first reason is that the product mix is improving and this is what we've talked about over and over again that as consumables become a greater proportion of revenues, we will see significant lift up in gross margins. And so going from the mid-200s to 300,000 plus is front and center and there's probably two or fundamental things that we need to do. Number one, we need to continue to make make the product easier to use out of the gate. So a new customer doesn't take three to six months to really get up to speed and running at some level of capacity. If we can do that, every little bit will accelerate. In fact, Todd what we really need is one more run per customer per month to change to go from say the the mid-200s to 300,000 plus. So that's what we're talking about. One more run per customer per month 12 more runs per customer per year and we're there. So it's driving the early phases of adoption, driving to customers that are high utilization customers like the diagnostic, like the Quest, LabCorp's Myriad's of the world [indiscernible] rare disease in the hospitals.

1h 1m 58s

In other words, [indiscernible] more and more samples accessible And then the last piece of course we did some of it last year by significantly reducing DNA input We opened up Revio to effectively millions of samples that we could not sequence before because we required too much DNA. And so that's that was important because that enabled more projects to get on. And then it's enabling more applications. So for example, at our Prism conference yesterday, they showed great results using FFPE FFPE samples on our sequencers, which many people thought that that wasn't really feasible. And as at the conference, there was a talk yesterday that showed fantastic FFPE. So adding more applications will drive more opportunities to use the system. O ring DNA input allows more samples to get on. Proving the execution and the ease of use to make it easier and then selling to those customers that are really the high runners all of those aspects can contribute to one more run per customer per month and now you're over $300,000 in pull through And of course, the gross margins are already higher than the in instruments. So, that will certainly drive the whole picture.

1h 3m 27s

So it's very doable. We're making we are making progress on all the key points. Now we just need to see we need some time to see it manifest.

1h 3m 39s

Got it. I'll just ask maybe a quick one on tariffs here. Has this been able have you had any problems with maybe some of the inputs or or cost reductions or see that coming in? Can you remind us U. S.-based manufacturing versus where you are outside The U. S? And then with regards another regard to tariffs, you know, I I do know that one of your competitors has, had a tariff surcharge or plans on implementing one. Is there any opportunity assuming you do have more U. S. Manufacturing won't be subject to much to kind of compete a little bit more on price? Thank you, and I'll take it off the line from there.

1h 4m 18s

Yes. I think that so we've been evaluating tariffs from every direction like all of our peers. I'm certainly I'm certainly sure they have been. And at this point, we certainly could implement a surcharge. We've at this point, we feel like our supply chain is in a position where where we don't think there's a significant impact and therefore we don't need to burden our customers with a price increase unless we really start to feel the effects. When you think about where our supply chain on chips on smart cells, that's a long supply chain. So we carry a fair bit of inventory that that won't be subject to tariff for quite a while here. We have most of our inbound products, we don't source a lot from China. So perhaps some of our suppliers do and we will ultimately see some some impact for that. But so far, we haven't seen a dramatic impact and if we do, we may have to implement a surcharge like others might. But we want to make sure that we continue to grow our opportunity And one of the things we've been trying to do is make the system more economical.

1h 5m 39s

And so to the extent we can manage our gross margins within the ranges that we expect and we can ship our products globally around the world. We're going to really support our customers here and continue to grow our business But if we do see if we do seem some real challenges, we may have to implement something like that. Down the road, but we're just going to keep monitoring. At this point, we feel pretty good about what we're doing.

1h 6m 13s

Thank you. For the question, Dave. Yeah.

1h 6m 19s

And our next question comes from Dan Brennan from TD Cowen. Please go ahead with your question.

1h 6m 25s

Hi, this is William Ruby on for Dan. Thank you for the questions.

1h 6m 29s

I've got two questions. One would just be if you could just kind of walk through your demand trends in EMEA and your funnel there. And then just a broader question on your long term plans to get to free cash flow positive. What are the key drivers for this? What has to happen for this to happen? And how is the current environment impacting your ability to get there? Thank you. Yeah. Good questions, William. First, EMEA, we expect EMEA to be our fastest growing region for the year. And that's really driven by by the rare disease market. We're seeing great uptake in REVIO in EMEA because that's where they really are leading the rare disease charge and leveraging the power of HiFi to drive rare disease and we're seeing that in The Netherlands, we're seeing in Sweden, we're seeing in Denmark, I believe Zurich an order from Zurich This quarter came in for that exact reason. We're seeing it in Germany. So it's a pretty broad institute in France this quarter had a in Q1 had a revio as well. So it's being it seems as though that's accelerating. And if you look at if you look at the demand I think that's in Europe in particular, that's really where we're seeing some strong revenue opportunities.

1h 7m 53s

But we're also seeing big opportunities with the smaller with the smaller customers, new customers in The UK, which has traditionally been driven by Sanger as our biggest customer, but now we're we're getting traction across the board there. So I think EMEA we do expect it to be our fastest growing region for the year. And and we'll see how that's going. With respect to free cash flow, what has to happen for us to get to cash flow breakeven in 2027 there's really a couple of fundamental things. First, we do have to grow from here on the top line. So So Revio has to continue growing consumables have to continue growing Just Just to reiterate, right, we had an all time record Q1 quarter $20,000,020,100,000 in consumables that's going to really help us as we see consistent consumable usage growing in that area So I think that has to keep going. Second, we have to continue to drive innovation to make Revvio more valuable so we can continue to drive placements. Which will improve our top line And then third, we do expect that the high the ultra high throughput short long read system will start to contribute to revenue in this horizon and so it's important to get revenue from that as well.

1h 9m 23s

So we need to see our revenues grow We do need to see our gross margin expand from where we were in 2024 and we do think we have a very strong pathway to make that happen. And you saw Q1, we're off to a great start there, at over 40%. So I'm actually really proud of that And then we have to be tight and manage expenses. You saw we had a significant reduction in spending last year. Have another significant spending this year. We'll get the full benefit of the restructuring in April. [indiscernible] through the remainder of this year, but really the whole benefit will be felt in 2026. And I think the combo of those is really what sets us up to to get the cash flow breakeven by the end of the end of Q4 of twenty twenty seven. You saw that our cash burn this year is roughly what $115,000,000 for guidance. Our guided cash burn And so we've made dramatic strides in improving our cash burn and we will continue to do so. And so we have a lot of there's a lot of excitement We have to grow our revenues from here in order to make all of this work.

1h 10m 43s

There's no doubt about that. But we have the products, we have the innovation, and I do think even in this challenging environment, customers are using their sequencers. And those sequencers are driving consumable revenue which is good gross margin. [indiscernible] hopefully that helps. Thank you. Yes. Cool.

1h 11m 5s

We're at the bottom of the hour here, so we'll wrap up the call. Thank you everybody for joining. Looking forward to connecting with you all at the conferences and meetings ahead this quarter. And have a good day. Bye bye.

1h 11m 21s

Ladies and gentlemen, with that we'll conclude today's call and presentation. We thank you for joining. You may now disconnect your lines.

Key Insights

Q1 2025 revenue was $37.2M, slightly above preliminary estimates; instrument revenue declined 42% YoY to $11M due to lower Revio shipments and academic funding uncertainty, but consumables revenue hit a record $20.1M, up 26% YoY.
Full-year 2025 revenue guidance was adjusted to $150M–$170M (midpoint ~4% growth vs. 2024), lowering the bottom end by $5M due to new US-China tariffs and NIH budget risks; Q2 revenue expected to be flat vs. Q1, with limited China sales.
Non-GAAP gross margin improved to 40% in Q1 (vs. 33% prior year), driven by higher consumables mix and cost savings; full-year 2025 non-GAAP gross margin expected at 35–40%, exiting the year above 40%.
Restructuring in April is expected to reduce annualized non-GAAP operating expenses by $45M–$50M by year-end, with 2025 non-GAAP opex guided at $240M–$250M (14–17% YoY decline); cash burn for 2025 guided at ~$115M, with year-end cash/investments expected at ~$270M.
Strategic focus is on long-read HiFi sequencing (Revio and Vega platforms), pausing high-throughput short-read development; strong clinical and hospital demand is expected to offset academic/government headwinds, and the company remains on track to achieve cash flow positive by end of 2027.

Recent Transcripts

PacBio Q1 2025 revenue met expectations, driven by record consumables growth despite instrument headwinds.

PacBio guides for modest 2025 growth amid funding headwinds, prioritizing margin expansion and efficiency.

Feb 13

Q4 2024

Revenue

$154M FY24, $39.2M Q4

2025 Guidance

$155–170M (+6% midpoint)

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$79M	$131M	$128M	$201M	$154M
Cost of Revenue	$46M	$72M	$79M	$148M	$117M
Gross Profit	$33M	$59M	$49M	$53M	$37M
Gross Profit %	41%	45%	38%	26%	24%
R&D Expenses	$64M	$113M	$193M	$187M	$135M

2020

2021

2022

2023

2024

Revenue

$79M

$131M

$128M

$201M

$154M

Cost of Revenue

$46M

$72M

$79M

$148M

$117M

Gross Profit

$33M

$59M

$49M

$53M

$37M

Gross Profit %

41%

45%

38%

26%

24%

R&D Expenses

$64M

$113M

$193M

$187M

$135M

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$29M	-$181M	-$314M	-$307M	-$310M
Dep. & Amort.	$9.3M	$12M	$17M	$27M	$53M
Def. Tax	-$107K	-$94M	$0	-$11M	-$205K
Stock Comp.	$18M	$81M	$79M	$72M	$71M
Chg. in WC	-$3.3M	$21M	-$54M	-$59M	-$41M

2020

2021

2022

2023

2024

Net Income

$29M

-$181M

-$314M

-$307M

-$310M

Dep. & Amort.

$9.3M

$12M

$17M

$27M

$53M

Def. Tax

-$107K

-$94M

-$11M

-$205K

Stock Comp.

$18M

$81M

$79M

$72M

$71M

Chg. in WC

-$3.3M

$21M

-$54M

-$59M

-$41M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$82M	$461M	$325M	$180M	$55M
ST Investments	$237M	$584M	$447M	$452M	$335M
Cash & ST Inv.	$319M	$1B	$772M	$631M	$390M
Receivables	$17M	$24M	$19M	$37M	$28M
Inventory	$14M	$25M	$50M	$57M	$59M

2020

2021

2022

2023

2024

Cash

$82M

$461M

$325M

$180M

$55M

ST Investments

$237M

$584M

$447M

$452M

$335M

Cash & ST Inv.

$319M

$1B

$772M

$631M

$390M

Receivables

$17M

$24M

$19M

$37M

$28M

Inventory

$14M

$25M

$50M

$57M

$59M

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $277M
IPO Date: 10/27/10
CEO: Mr. Christian O. Henry M.B.A.
Fulltime Employees: 575
Sector: Healthcare
Industry: Medical - Devices
Country: US
Exchange: NASDAQ Global Select

Peers

Twist Bioscience Corporation

$28.26

TWST

0.36%

Intellia Therapeutics, Inc.

$9.16

NTLA

3.17%

CRISPR Therapeutics AG

$36.86

CRSP

1.79%

Editas Medicine, Inc.

Watchlist

Earnings

Report Date

May 8, 2025

Reported Revenue

37.2M

Beat +0.69%

Avg 1d Change

11.73%

Report Period

Q1 2025

Reported EPS

-0.15

Beat +21.05%

Implied Move 1d

29.24%

Transcript

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Europe in particular saw strong REVIO placements in the hospital and clinic customer base.

29m 35s

29m 52s

Non GAAP gross margin increased year over year due to improved product mix.

29m 56s

As consumables, have higher gross margins, represented 54% of total revenue in the first quarter of twenty twenty five. Compared to 41% of total revenue in the first quarter of twenty twenty four.

30m 8s

In addition, we realized per unit cost savings from both REVIO instrument and REVIO consumables. Non GAAP operating expenses were $61,700,000 in the first quarter of twenty twenty five.

30m 20s

31m

31m 16s

32m 56s

As Christian indicated earlier, we lowered the bottom end of our range by $5,000,000 as a result of uncertainty surrounding our ability to ship new instruments into China without significant tariffs.

33m 7s

34m 27s

35m 3s

35m 49s

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36m 42s

38m 18s

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41m 53s

42m 28s

Jacob, we'll take the next question.

42m 30s

Our next question comes from Jack Meehan from Nephron Research. Please go ahead with your question.

42m 37s

Thank you and good afternoon.

42m 41s

42m 57s

43m 20s

44m 50s

46m 15s

46m 31s

48m 18s

49m 40s

50m 6s

51m

52m 34s

Thank you.

52m 37s

Our next question comes from Masso Currico from Stephens. Please go ahead with your question. Great. This is Harrison on for Mason.

52m 47s

53m 2s

Are there error bars there around [indiscernible] the bake up placements more narrow?

53m 10s

54m 48s

55m 27s

Got it.

55m 28s

55m 55s

57m 42s

59m 18s

And then of course being able to ship instruments into China would be a positive would certainly be a positive tailwind for us.

59m 28s

Thank you. Great. That all makes sense.

59m 32s

59m 54s

1h 15s

1h 1m 58s

1h 3m 27s

So it's very doable. We're making we are making progress on all the key points. Now we just need to see we need some time to see it manifest.

1h 3m 39s

1h 4m 18s

1h 5m 39s

1h 6m 13s

Thank you. For the question, Dave. Yeah.

1h 6m 19s

And our next question comes from Dan Brennan from TD Cowen. Please go ahead with your question.

1h 6m 25s

Hi, this is William Ruby on for Dan. Thank you for the questions.

1h 6m 29s

1h 7m 53s

1h 9m 23s

1h 10m 43s

1h 11m 5s

1h 11m 21s

Ladies and gentlemen, with that we'll conclude today's call and presentation. We thank you for joining. You may now disconnect your lines.

Key Insights

Q1 2025 revenue was $37.2M, slightly above preliminary estimates; instrument revenue declined 42% YoY to $11M due to lower Revio shipments and academic funding uncertainty, but consumables revenue hit a record $20.1M, up 26% YoY.
Full-year 2025 revenue guidance was adjusted to $150M–$170M (midpoint ~4% growth vs. 2024), lowering the bottom end by $5M due to new US-China tariffs and NIH budget risks; Q2 revenue expected to be flat vs. Q1, with limited China sales.
Non-GAAP gross margin improved to 40% in Q1 (vs. 33% prior year), driven by higher consumables mix and cost savings; full-year 2025 non-GAAP gross margin expected at 35–40%, exiting the year above 40%.
Restructuring in April is expected to reduce annualized non-GAAP operating expenses by $45M–$50M by year-end, with 2025 non-GAAP opex guided at $240M–$250M (14–17% YoY decline); cash burn for 2025 guided at ~$115M, with year-end cash/investments expected at ~$270M.
Strategic focus is on long-read HiFi sequencing (Revio and Vega platforms), pausing high-throughput short-read development; strong clinical and hospital demand is expected to offset academic/government headwinds, and the company remains on track to achieve cash flow positive by end of 2027.

Earnings

Report Date

Reported Revenue

Avg 1d Change

Report Period

Reported EPS

Implied Move 1d

Transcript

Key Insights

Recent Transcripts

Income Statement

Cash Flow

Balance Sheet

Go Deeper

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Report Date

Reported Revenue

Avg 1d Change

Report Period

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Transcript

Key Insights