Pacific Biosciences of California(PACB) - 2023 Q2 - Quarterly Report

Revenue Performance - Revenue increased by $17.8 million, or 26$86.5 million for the six months ended June 30, 2023, compared to $68.6 million for the same period in 2022[115]. - Instrument revenue for the three months ended June 30, 2023, increased by$14.3 million, or 92%, to $29.9 million, primarily due to the sale of 45 Revio systems[125]. - Product revenue increased by$19.9 million, or 34%, to $78.3 million for the six months ended June 30, 2023, compared to$58.4 million for the same period in 2022[136]. - Instrument revenue increased by $19.5 million, or 62$50.6 million for the six months ended June 30, 2023, primarily due to the sale of 77 Revio systems[138]. - Consumables revenue increased by $0.4 million, or 2$27.7 million for the six months ended June 30, 2023, driven by higher Revio consumables sales[139]. - Consumables revenue decreased by $0.8 million, or 6$13.7 million for the three months ended June 30, 2023, due to lower Sequel consumable sales[126]. - Service and other revenue decreased by $1.4 million, or 26$3.9 million for the three months ended June 30, 2023, primarily due to changes in warranty terms[127]. Profitability and Expenses - Gross profit margin decreased to 29% for the six months ended June 30, 2023, down from 44% for the same period in 2022, attributed to instrument mix and higher initial manufacturing costs[115]. - Gross profit decreased by $5.0 million, or 17$25.3 million for the six months ended June 30, 2023, with a gross margin of 29%, down from 44% in the same period in 2022[142]. - Loss from operations increased by $18.9 million, or 13$164.4 million for the six months ended June 30, 2023, compared to $145.5 million for the same period in 2022[122]. - Research and development expense decreased by$8.2 million, or 8%, to $95.1 million for the six months ended June 30, 2023, compared to$103.3 million for the same period in 2022[143]. - Sales, general and administrative expense increased by $1.3 million, or 2$80.4 million for the six months ended June 30, 2023, compared to $79.1 million for the same period in 2022[144]. - Change in fair value of contingent consideration increased by$14.2 million during the six months ended June 30, 2023, related to a $200 million liability contingent on achieving a milestone[145]. Cash Flow and Investments - Cash, cash equivalents, and short-term investments were$829.9 million at June 30, 2023, representing a 7% increase compared to December 31, 2022[122]. - As of June 30, 2023, the company had cash, cash equivalents, and investments totaling $829.9 million, an increase from$772.3 million as of December 31, 2022[154]. - Cash used in operating activities for the six months ended June 30, 2023, was $136.4 million, compared to$139.6 million for the same period in 2022[156][159]. - Cash used in investing activities for the six months ended June 30, 2023, was $171.1 million, significantly higher than$18.2 million in 2022[156][161]. - Cash provided by financing activities during the six months ended June 30, 2023, was $191.3 million, primarily from the issuance of common stock[162]. - The company reported a net decrease in cash, cash equivalents, and restricted cash of$116.3 million for the six months ended June 30, 2023[156]. - The company invested in cash equivalents and marketable securities, with a total of $830 million as of June 30, 2023[171]. - A hypothetical 100 basis-point increase or decrease in interest rates would have affected the fair value of the company's investment portfolio by approximately$2.9 million[172]. - The company’s investing activities included $476.9 million in purchases of investments during the six months ended June 30, 2023[160]. - The company did not have any off-balance sheet arrangements as of June 30, 2023[167]. Mergers and Acquisitions - The company entered into a merger agreement to acquire Apton Biosystems, closing the transaction on August 2, 2023[120]. - The company anticipates operating expenses to increase slightly for the remainder of the year, primarily due to changes in the fair value of contingent consideration related to the Omniome acquisition[122]. Net Loss - The net loss for the six months ended June 30, 2023, was$157.8 million, which included non-cash items such as share-based compensation of $35.8 million[158]. - Loss on extinguishment of debt was$2.0 million during the six months ended June 30, 2023, due to the difference in fair value of the 2030 Notes and the principal[146]. - Other income (expense), net for the six months ended June 30, 2023, was $15.8 million compared to$23,000 for the same period in 2022, primarily due to investment income[148].