Pacific Biosciences of California (PACB) ended the recent trading session at $1.22, demonstrating a +1.67% swing from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 2.13%. Meanwhile, the Dow experienced a rise of 1.65%, and the technology-dominated Nasdaq saw an increase of 2.61%.Shares of the maker of genetic analysis technology witnessed a loss of 18.92% over the previous month, trailing the performance of the Medical sector with its loss of 2.78% and the S ...

Core Insights - Pacific Biosciences has faced significant challenges over the past four years, with many promising developments turning out to be setbacks instead [1] Group 1: Company Challenges - The company has experienced multiple external challenges, including failed partnerships and increased competition [1] - Uncertainty in the market has further complicated the company's position [1]

Core Insights - PacBio will present at TD Cowen's 45th Annual Health Care Conference on March 4, 2025, at 3:10 PM ET in Boston, MA [1] - A live webcast of the presentation will be available on the company's investor page, with a replay accessible for at least 30 days post-event [2] Company Overview - PacBio is a leading life science technology company specializing in high-quality, accurate sequencing solutions aimed at resolving genetically complex problems [3] - The company utilizes two core technologies: HiFi long-read sequencing and SBB® short-read sequencing, focusing on accuracy, quality, and completeness [3] - PacBio's products cater to various research applications, including human germline sequencing, plant and animal sciences, infectious disease, microbiology, and oncology [3]

Core Insights - PacBio reported an adjusted loss per share of 20 cents in Q4 2024, an improvement from a loss of 27 cents in the previous year, aligning with Zacks Consensus Estimate [1] - The company's full-year adjusted loss per share was 83 cents, better than the $1.11 loss in 2023 but wider than the expected loss of 81 cents [2] Revenue Performance - PacBio's Q4 revenues were $39.2 million, down 32.8% year over year, but slightly above the Zacks Consensus Estimate by 0.1% [3] - Full-year revenues totaled $154 million, reflecting a 23.2% decrease from 2023 [3] Geographical Analysis - Revenues from the Americas were $20.2 million, down 41% year over year, impacted by academic environment and NIH funding uncertainty [4] - Asia-Pacific revenues were $8.9 million, a 33% decline year over year, with government funding challenges affecting capital expenditures [5] - EMEA region revenues were $10.1 million, down 9% year over year, although record consumables revenues were noted [6] Segmental Analysis - Product revenues were $34.1 million, down 36.9% year over year, with instrument revenues at $15.3 million, down 56.4% due to lower Revio system shipments [7] - Consumables revenues were $18.8 million, down 0.5% year over year, while service and other revenues increased by 17.7% to $5.1 million [8] Margin and Expense Trends - Adjusted gross profit decreased 14.9% year over year to $12.3 million, but adjusted gross margin expanded by 656 basis points to 31.3% [9] - Total operating expenses decreased 23.7% year over year to $69.1 million, with a total adjusted operating loss of $56.8 million [10] Financial Position - PacBio ended 2024 with cash and investments of $389.9 million, down from $631.4 million at the end of 2023 [11] Guidance - For Q1 2025, PacBio expects revenues to be lower than Q4 2024 due to seasonality and reduced Revio system and consumables revenues, with a consensus estimate of $43.6 million [12] - The company anticipates full-year revenues between $155 million and $170 million, below the consensus estimate of $189.5 million [13] Overall Assessment - Despite a narrower loss per share and better-than-expected revenues, concerns remain regarding the year-over-year decline in overall revenues and product sales [14][15] - Management noted ongoing macroeconomic pressures and uncertainties in the academic environment, particularly related to NIH funding [15]

PacBio Q4 2024 Earnings Presentation February 13, 2025 Fourth Quarter 2024 Earnings Call 1 Statement regarding use of non‐GAAP financial measures PacBio reports non‐GAAP results for basic net income and loss per share, net income, net loss, gross margins, gross profit and operating expenses in addition to, and not as a substitute for, or because it believes that such information is superior to, financial measures calculated in accordance with GAAP. PacBio believes that non-GAAP financial information, when t ...

Financial Data and Key Metrics Changes - In Q4 2024, the company reported revenue of $39.2 million, a decrease of 33% from $58.4 million in Q4 2023 [43] - For the full year, total revenue was $154 million, reflecting 97 Revio shipments [9] - Non-GAAP net loss for Q4 2024 was $55.3 million, or $0.20 per share, compared to a loss of $72.5 million, or $0.27 per share in Q4 2023 [48] - Cash and investments at the end of Q4 2024 totaled $389.9 million, down from $441 million at the end of Q3 2024 [48] Business Line Data and Key Metrics Changes - Instrument revenue in Q4 2024 was $15.3 million, a 56% decrease from $35.1 million in Q4 2023, primarily due to lower Revio system shipments [43] - Consumable revenue was approximately $18.8 million in Q4 2024, remaining roughly flat year-over-year [44] - Service and other revenue increased to $5.1 million in Q4 2024 from $4.4 million in Q4 2023, driven by an increase in service contract revenue related to Revio [44] Market Data and Key Metrics Changes - Revenue from the Americas decreased by 41% to $20.2 million in Q4 2024, impacted by academic and NIH funding uncertainty [44] - Asia Pacific revenue was approximately $8.9 million, down 33% year-over-year, with government funding headwinds affecting capital expenditures [45] - EMEA revenue decreased by 9% to $10.1 million, although consumables revenue reached record levels due to growing Revio utilization [46] Company Strategy and Development Direction - The company aims to achieve sustained double-digit revenue growth as long-range sequencing expands genomic applications [15] - Key priorities include expanding HiFi sequencing adoption, enhancing Revio's value with Spark Chemistry, and providing turnkey bioinformatics solutions [15][17] - The company anticipates turning cash flow positive by the end of 2027, with a focus on lowering cash burn and maintaining financial flexibility [17][58] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic pressures are expected to persist, extending sales cycles for higher CapEx life science instrumentation [12] - The company expects 2025 revenue to range between $155 million and $170 million, reflecting a 6% year-over-year growth at the midpoint [13][52] - Management highlighted the importance of navigating an uncertain funding environment, particularly in the U.S. academic research community [53] Other Important Information - The company successfully launched the Vega Benchtop platform and Spark Chemistry for Revio in 2024, enhancing its product portfolio [18] - The company reduced annualized non-GAAP operating expenses by over $75 million, aligning spending with strategic priorities [37] - A convertible note exchange reduced debt by $259 million and extended the maturity of 2028 notes by 18 months [38] Q&A Session Summary Question: What specifically have you baked in for NIH disruption in the near term? - Management acknowledged the dynamic funding environment and indicated that significant headwinds were contemplated in their guidance, particularly for the first half of the year [64][65] Question: Why are Revio shipments declining this year? - Management clarified that the decline is primarily driven by funding concerns rather than product fading or cannibalization by Vega [84][86] Question: What is the magnitude of the assumed NIH funding cut? - Management indicated that NIH revenue historically represents about 20% of total revenue, but the exact impact of funding cuts is complex and varies by institution [95] Question: Can you talk about the progress on gross margin? - Management expressed optimism about gross margin improvements, citing resolved yield issues and cost reductions from in-sourcing manufacturing [105][106] Question: How is the company addressing customer concentration risk? - Management noted that while there are large-scale programs with key customers, efforts are being made to diversify the customer base and mitigate risks [120][122]

Core Insights - Pacific Biosciences of California (PACB) reported a revenue of $39.22 million for the quarter ended December 2024, reflecting a decline of 32.8% year-over-year [1] - The earnings per share (EPS) for the quarter was -$0.20, an improvement from -$0.27 in the same quarter last year [1] - The reported revenue slightly exceeded the Zacks Consensus Estimate of $39.2 million by 0.06%, while the EPS met the consensus estimate [1] Revenue Breakdown - Revenue from Product - Instrument was $15.30 million, falling short of the estimated $16.94 million by analysts, representing a year-over-year decline of 56.4% [4] - Revenue from Product was $34.10 million, below the estimated $36.10 million [4] - Revenue from Service and other was $5.13 million, surpassing the average estimate of $4.88 million, showing a year-over-year increase of 17.7% [4] - Revenue from Product - Consumable was $18.80 million, slightly below the estimated $19.17 million, with a year-over-year change of -0.5% [4] Stock Performance - Shares of Pacific Biosciences have decreased by 22.1% over the past month, contrasting with a 3.9% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Results - Pacific Biosciences reported preliminary financial results for the quarter and year ended December 31, 2024, with expectations for revenue estimates to be disclosed in the upcoming finalized report[4] - The company emphasized that the financial statements for the mentioned periods are unaudited and subject to change, indicating potential material differences from the preliminary information[8] Business Update - The press release dated January 14, 2025, serves as a business update and includes preliminary cash, cash equivalents, and investments balance as of December 31, 2024[6]

Core Insights - PacBio reported financial results for the fourth quarter and fiscal year ended December 31, 2024, highlighting a challenging year with significant changes in revenue and expenses [1][11]. Financial Performance - The company achieved a GAAP gross margin of 26% in Q4 2024, up from 16% in Q4 2023, while the non-GAAP gross margin increased to 31% from 19% [3]. - GAAP operating expenses for Q4 2024 totaled $161.9 million, compared to $97.1 million in Q4 2023. Non-GAAP operating expenses were $68.6 million, down from $88.4 million in the same period [4]. - GAAP net income for Q4 2024 was $3.6 million, a significant improvement from a net loss of $82.0 million in Q4 2023. Basic net income per share was $0.01 compared to a loss of $0.31 per share in the prior year [6]. - Total revenue for Q4 2024 was $39.2 million, representing a 33% decrease from $58.4 million in Q4 2023. Instrument revenue fell to $15.3 million from $35.1 million, while consumables revenue remained relatively stable at $18.8 million [9]. Strategic Developments - The company accelerated the launch of its Vega benchtop sequencing platform, which aims to broaden access to HiFi long-read sequencing [10]. - A clinical collaboration with Berry Genomics was established, delivering Vega systems to support prenatal health and screening programs in China [10]. - The introduction of SPRQ chemistry allows for sub-$500 HiFi long-read human genome sequencing, significantly reducing DNA input requirements and increasing sample throughput [10]. Financial Position - As of December 31, 2024, cash, cash equivalents, and investments totaled $389.9 million, down from $631.4 million a year earlier [7]. - The company executed a convertible note exchange, reducing the outstanding principal balance by $259 million, which included replacing $459 million in convertible notes due 2028 with $200 million in new notes due August 2029 [16]. Impairment Charges - The financial results included estimated preliminary non-cash impairment charges of approximately $90.1 million related to goodwill and in-process research and development, driven by macroeconomic headwinds [5][32].

Company Performance - Pacific Biosciences of California (PACB) closed at $1.44, reflecting a -1.37% change from the previous day, underperforming the S&P 500's gain of 0.72% [1] - The stock has decreased by 26.63% over the past month, contrasting with the Medical sector's gain of 4.51% and the S&P 500's gain of 1.02% [1] Earnings Outlook - The company is expected to release its earnings on February 13, 2025, with a projected EPS of -$0.20, indicating a 25.93% increase compared to the same quarter last year [2] Analyst Estimates - Recent changes to analyst estimates for Pacific Biosciences should be monitored, as they reflect short-term business trends and analyst sentiment regarding the company's profitability [3] - The Zacks Consensus EPS estimate has increased by 1.18% over the last 30 days, but the company currently holds a Zacks Rank of 4 (Sell) [5] Industry Context - The Medical - Instruments industry, which includes Pacific Biosciences, has a Zacks Industry Rank of 89, placing it in the top 36% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]