Pacific Biosciences (PACB) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $40M, up 11% sequentially but down from $55.7M year-over-year, with growth in consumables and services offsetting lower instrument sales.

• Launched SPRQ chemistry for Revio, increasing data output by 33% and reducing sequencing costs, and introduced the Vega benchtop sequencer, shipping Q1 2025.

• Record Onso system placements, with two-thirds to new customers; 45-46% of Revio shipments year-to-date were to new customers.

• Continued focus on cost reduction, cash burn management, and strengthening the balance sheet, including a major convertible debt exchange with SoftBank.

• Committed to achieving cash flow positivity by end of 2026.

Financial highlights

• Q3 2024 revenue was $40M, down from $55.7M in Q3 2023, but up 11% sequentially; consumables revenue grew 10% year-over-year to $18.5M.

• Instrument revenue was $16.8M, down 52% year-over-year; service and other revenue grew 13% year-over-year to $4.7M.

• Non-GAAP gross margin was 33% in Q3 2024, compared to 32% in Q3 2023; non-GAAP gross profit was $13M.

• Non-GAAP operating expenses dropped 31% year-over-year to $62.4M, lowest since Q3 2021.

• Non-GAAP net loss was $46M ($0.17/share), improved from $67.9M ($0.27/share) in Q3 2023.

• Cash and investments at quarter-end were $471M, down from $631.4M at year-end 2023.

Outlook and guidance

• Q4 2024 revenue expected to be flat to slightly up from Q3; full-year revenue below prior $170M estimate.

• Full-year non-GAAP gross margin expected between 34%-35%; operating expenses guided to $285M-$290M.

• Cash and investments projected at $385M at year-end, reflecting $50M payment for SoftBank note exchange.

• Committed to achieving cash flow positivity by end of 2026, with further cost reductions and margin expansion planned.

• Management expects a return to growth in 2025, driven by new products and cost improvements.