Pacific Biosciences (PACB) Q1 2026 earnings summary

Executive summary

• Q1 2026 total revenue was $37.2 million, flat year-over-year, with record consumable revenue driven by increased clinical adoption of HiFi sequencing and major collaborations, while instrument revenue, especially Vega, was below expectations due to funding pressures and delivery challenges.

• Approximately 50% of Revio and over 85% of Vega system shipments were to new customers, indicating strong market expansion; EMEA led with 17% revenue growth, driven by clinical adoption.

• Closed the sale of high-throughput short-read sequencing assets to Illumina for $48.1 million, resulting in a $45.8 million gain and strengthening the balance sheet.

• Major collaborations include Basecamp Research's Trillion Gene Atlas and DNAstack's federated HiFi dataset, supporting the largest HiFi sequencing project to date.

• Operating loss and net loss narrowed sharply, aided by cost reductions, asset sale gains, and improved non-GAAP net loss per share to $0.12 from $0.15 year-over-year.

Financial highlights

• Consumable revenue grew 9% year-over-year to $21.8 million, while instrument revenue declined 12% to $9.7 million; service and other revenue fell 7% to $5.6 million.

• Non-GAAP gross profit was $13.8 million (37% margin), down from $15 million (40%) in Q1 2025; GAAP gross profit was $12.8 million (35% margin), up from a $1.4 million loss in Q1 2025.

• Non-GAAP operating expenses fell to $49.9 million from $61.7 million year-over-year; GAAP operating expenses were $21.2 million, including $16.3 million in litigation settlement charges and a $45.8 million gain on asset disposal.

• Net loss improved to $8.3 million (GAAP) from $426.1 million year-over-year; non-GAAP net loss was $35.9 million ($0.12/share) versus $44.4 million ($0.15/share) last year.

• Ended Q1 with $276 million in unrestricted cash, cash equivalents, and investments.

Outlook and guidance

• 2026 revenue guidance is $165–$175 million, reflecting softer Vega demand and no expected recovery in academic/government funding; sequential revenue growth is expected in Q2, with stronger growth in the second half of 2026.

• Consumables are expected to be the main growth driver, supported by clinical adoption and expansion of Revio and Vega installed base.

• Non-GAAP gross margin improvement is expected at the lower end of the prior 100–400 bps range due to rising compute costs; non-GAAP operating expenses are guided to $220–$225 million.

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