Pacific Biosciences (PACB) investor relations material

Executive summary

• Achieved record consumable revenue for the third consecutive quarter, driven by increased clinical adoption of HiFi sequencing and strong progress on strategic objectives, including major AI-related projects with Basecamp Research and DNAstack.

• Instrument revenue, especially Vega, was below expectations due to academic funding pressures and delivery challenges, but market expansion continued with a high percentage of new customer placements.

• Closed the sale of short-read sequencing assets to Illumina for $48.1 million, generating net cash proceeds and resolving litigation, sharpening focus on long-read sequencing.

Financial highlights

• Q1 2026 total revenue was $37.2 million, flat year-over-year; consumables revenue grew 9% to $21.8 million, while instrument revenue declined 12% to $9.7 million.

• Non-GAAP gross profit was $13.8 million (37% margin), down from $15.0 million (40%) in Q1 2025; GAAP gross profit was $12.8 million (35% margin).

• Non-GAAP net loss improved to $35.9 million ($0.12/share) from $44.4 million ($0.15/share) year-over-year.

• Ended Q1 with $276 million in cash and investments, reflecting proceeds from the Illumina asset sale.

Outlook and guidance

• 2026 revenue guidance lowered to $165–$175 million, with growth driven by consumables and clinical adoption; no recovery assumed in academic/government funding.

• Non-GAAP gross margin expected to improve but toward the lower end of the previously communicated 100–400 bps range due to rising compute costs.

• Non-GAAP operating expenses projected at $220–$225 million, down from 2025.

• Plans for broad commercial rollout of SPRQ-Nx to all Revio customers later in Q2 2026.