Pacific Biosciences Reports Q1 Earnings Miss, Shares Drop 16%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy PACB?
Source: seekingalpha
- Earnings Decline: Pacific Biosciences reported a Q1 non-GAAP EPS of -$0.12, beating estimates by $0.01, but revenue only rose 0.1% year-over-year to $37.2M, missing consensus expectations, which led to a 16% drop in shares.
- Margin Pressure: The company's non-GAAP gross margin fell to 37% from 40% a year earlier, primarily due to rising computing component costs, temporary promotional activities related to Vega products, and inventory and warranty-related charges, indicating significant profitability challenges.
- Revised Revenue Outlook: PacBio narrowed its full-year 2026 revenue outlook to $165M-$175M from a previous range of $165M-$180M, with the updated midpoint of $170M falling below the analyst consensus estimate of approximately $174.4M, reflecting concerns about future growth.
- Market Reaction: The disappointing earnings report raised investor concerns about the company's future performance, resulting in a significant stock price decline, highlighting worries about Pacific Biosciences' profitability and growth potential in a competitive biotech landscape.
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Analyst Views on PACB
Wall Street analysts forecast PACB stock price to rise
5 Analyst Rating
3 Buy
2 Hold
0 Sell
Moderate Buy
Current: 1.650
Low
2.00
Averages
2.40
High
3.00
Current: 1.650
Low
2.00
Averages
2.40
High
3.00
About PACB
Pacific Biosciences of California, Inc. is a life science technology company. The Company designs, develops, and manufactures sequencing solutions. Its products and technology include HiFi long-read sequencing technology, which addresses a set of applications including human germline sequencing, plant and animal sciences, infectious disease, microbiology, oncology, and other applications. Its sequencing technology supports oncology research by enabling analysis of both deoxyribonucleic acid (DNA) and ribonucleic acid (RNA), providing researchers with insight into cancer biology. It focuses on creating sequencing systems to provide customers with a view of genomes, transcriptomes, and epigenomes. Its customers include academic and governmental research institutions, commercial testing and service laboratories, genome centers, public health labs, hospitals and clinical research institutes, contract research organizations (CROs), pharmaceutical companies, and agricultural companies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pacific Biosciences Reports Q1 Earnings Miss, Shares Drop 16%
- Earnings Decline: Pacific Biosciences reported a Q1 non-GAAP EPS of -$0.12, beating estimates by $0.01, but revenue only rose 0.1% year-over-year to $37.2M, missing consensus expectations, which led to a 16% drop in shares.
- Margin Pressure: The company's non-GAAP gross margin fell to 37% from 40% a year earlier, primarily due to rising computing component costs, temporary promotional activities related to Vega products, and inventory and warranty-related charges, indicating significant profitability challenges.
- Revised Revenue Outlook: PacBio narrowed its full-year 2026 revenue outlook to $165M-$175M from a previous range of $165M-$180M, with the updated midpoint of $170M falling below the analyst consensus estimate of approximately $174.4M, reflecting concerns about future growth.
- Market Reaction: The disappointing earnings report raised investor concerns about the company's future performance, resulting in a significant stock price decline, highlighting worries about Pacific Biosciences' profitability and growth potential in a competitive biotech landscape.
See More
Pacific Biosciences Q1 2026 Earnings Highlights
- Revenue Growth and Challenges: In Q1 2026, total revenue reached $37.2 million, falling short of analysts' expectations of $39.98 million; however, consumable revenue hit $21.8 million, reflecting over 100% year-over-year growth, indicating strong demand in the clinical market.
- Strategic Adjustments and Asset Sale: The company generated approximately $48.1 million in cash from the sale of high-throughput short-read sequencing assets to Illumina, aiming to sharpen its focus on long-read sequencing technology while resolving litigation with personal genomics in Taiwan, thereby clarifying its strategic direction.
- Outlook Downgrade: Management lowered the high end of its 2026 revenue outlook by $5 million, now expecting revenue in the range of $165 million to $175 million, reflecting a cautious stance due to ongoing pressure on academic and government funding.
- Margin Pressure: Although the non-GAAP gross margin was reported at 37%, management indicated that rising compute component costs and a one-time promotional event impacted margins, with expectations for improvement in the second quarter.
See More
Pacific Biosciences Q1 Earnings Report Highlights
- Earnings Beat: Pacific Biosciences reported a Q1 non-GAAP EPS of -$0.12, beating expectations by $0.01, indicating some improvement in cost management despite ongoing losses.
- Revenue Miss: The company generated $37.2 million in revenue for Q1, a slight increase of 0.1% year-over-year, but fell short of market expectations by $2.78 million, reflecting weak market demand and intensified competition.
- 2026 Financial Outlook: PacBio anticipates full-year revenue for 2026 to range between $165 million and $175 million, suggesting a cautiously optimistic outlook from management despite industry challenges.
- Historical Performance Review: Historical earnings data for Pacific Biosciences indicates that while facing short-term pressures, the company retains long-term growth potential, necessitating investor attention on future strategic adjustments and market responses.
See More
PacBio Partners with Lucid Genomics to Enhance Genomic Analysis
- Partnership Announcement: PacBio and Lucid Genomics have joined forces in the PacBio Compatible partner program to optimize tertiary analysis of long-read sequencing data, enhancing the biological and clinical relevance of genomic data, thereby enabling laboratories to transition more efficiently from sequencing to actionable insights.
- Interoperability of Technology: Lucid Genomics' platform seamlessly integrates with PacBio's HiFi sequencing technology, supporting a range of analysis tasks including variant calling and structural variant detection, ensuring laboratories can leverage the high fidelity of long-read information to improve accuracy and throughput in data analysis.
- Cloud-Native Platform: Lucid Genomics offers a cloud-native platform that provides laboratories using PacBio systems with a scalable, production-ready pathway for tertiary analysis, allowing users to confidently access workflows designed for compatibility with PacBio data standards, reducing integration risks and accelerating time to insight.
- Market Expansion: This collaboration not only strengthens PacBio's ecosystem of compatible solutions but also has the potential to support the global community of HiFi sequencing users through joint customer engagements, technical enablement resources, and co-marketing initiatives, driving innovation and development in the genomics field.
See More
PacBio and Covaris Develop Joint HiFi Sequencing Workflow
- Joint Workflow: PacBio and Covaris have developed a collaborative workflow that integrates Covaris' truXTRAC® FFPE extraction technology with PacBio's Kinnex™ library preparation, aimed at enhancing HiFi sequencing quality from formalin-fixed, paraffin-embedded (FFPE) tissue samples, thereby advancing cancer research.
- Efficient Extraction Technology: The workflow utilizes Covaris' Adaptive Focused Acoustics (AFA) technology to recover DNA fragments up to 5,000 base pairs from FFPE tissues, significantly improving sequencing efficiency and data quality, helping researchers overcome the limitations of traditional short-read sequencing.
- Significant Data Output: In studies involving brain, kidney, and uterine tumor samples, the workflow produced over 100 million HiFi reads per sample, with mean read lengths of 750-1,500 base pairs, enabling the detection of over 11,000 structural variants and more than 5 million small variants, with approximately 60% phased, showcasing its potential clinical advantages.
- Broad Market Prospects: The introduction of this technology not only offers clinical researchers a significantly lower cost per genome but also allows previously challenging samples to be revisited, ultimately accelerating progress in oncology and driving innovation in genomics.
See More
PacBio Appoints New Board Member
- New Board Member: PacBio has appointed Dr. Christopher Gibson, co-founder of Recursion, to its Board of Directors, whose extensive experience in AI-driven drug discovery is expected to enhance PacBio's strategic development in genomics.
- Technological Integration Advantage: Under Dr. Gibson's leadership at Recursion, the successful integration of large-scale biological data with machine learning improved drug discovery efficiency, a capability that will directly support PacBio's data-driven discovery in high-throughput genomics.
- Biological Data Platform Development: At Recursion, Dr. Gibson developed a proprietary platform capable of generating and analyzing multimodal datasets, which will provide crucial support for PacBio in accelerating clinical development and patient selection, enhancing its market competitiveness.
- Future Development Vision: Dr. Gibson emphasized that PacBio's high-quality long-read sequencing technology will provide a rich foundation for biological data analysis, and combined with AI-driven analytics, it will accelerate discoveries and diagnostics in healthcare, showcasing significant market potential.
See More
Pacific Biosciences Reports Q1 Earnings Miss, Shares Drop 16%
- Earnings Decline: Pacific Biosciences reported a Q1 non-GAAP EPS of -$0.12, beating estimates by $0.01, but revenue only rose 0.1% year-over-year to $37.2M, missing consensus expectations, which led to a 16% drop in shares.
- Margin Pressure: The company's non-GAAP gross margin fell to 37% from 40% a year earlier, primarily due to rising computing component costs, temporary promotional activities related to Vega products, and inventory and warranty-related charges, indicating significant profitability challenges.
- Revised Revenue Outlook: PacBio narrowed its full-year 2026 revenue outlook to $165M-$175M from a previous range of $165M-$180M, with the updated midpoint of $170M falling below the analyst consensus estimate of approximately $174.4M, reflecting concerns about future growth.
- Market Reaction: The disappointing earnings report raised investor concerns about the company's future performance, resulting in a significant stock price decline, highlighting worries about Pacific Biosciences' profitability and growth potential in a competitive biotech landscape.
See More
Pacific Biosciences Q1 2026 Earnings Highlights
- Revenue Growth and Challenges: In Q1 2026, total revenue reached $37.2 million, falling short of analysts' expectations of $39.98 million; however, consumable revenue hit $21.8 million, reflecting over 100% year-over-year growth, indicating strong demand in the clinical market.
- Strategic Adjustments and Asset Sale: The company generated approximately $48.1 million in cash from the sale of high-throughput short-read sequencing assets to Illumina, aiming to sharpen its focus on long-read sequencing technology while resolving litigation with personal genomics in Taiwan, thereby clarifying its strategic direction.
- Outlook Downgrade: Management lowered the high end of its 2026 revenue outlook by $5 million, now expecting revenue in the range of $165 million to $175 million, reflecting a cautious stance due to ongoing pressure on academic and government funding.
- Margin Pressure: Although the non-GAAP gross margin was reported at 37%, management indicated that rising compute component costs and a one-time promotional event impacted margins, with expectations for improvement in the second quarter.
See More
Pacific Biosciences Q1 Earnings Report Highlights
- Earnings Beat: Pacific Biosciences reported a Q1 non-GAAP EPS of -$0.12, beating expectations by $0.01, indicating some improvement in cost management despite ongoing losses.
- Revenue Miss: The company generated $37.2 million in revenue for Q1, a slight increase of 0.1% year-over-year, but fell short of market expectations by $2.78 million, reflecting weak market demand and intensified competition.
- 2026 Financial Outlook: PacBio anticipates full-year revenue for 2026 to range between $165 million and $175 million, suggesting a cautiously optimistic outlook from management despite industry challenges.
- Historical Performance Review: Historical earnings data for Pacific Biosciences indicates that while facing short-term pressures, the company retains long-term growth potential, necessitating investor attention on future strategic adjustments and market responses.
See More
PacBio Partners with Lucid Genomics to Enhance Genomic Analysis
- Partnership Announcement: PacBio and Lucid Genomics have joined forces in the PacBio Compatible partner program to optimize tertiary analysis of long-read sequencing data, enhancing the biological and clinical relevance of genomic data, thereby enabling laboratories to transition more efficiently from sequencing to actionable insights.
- Interoperability of Technology: Lucid Genomics' platform seamlessly integrates with PacBio's HiFi sequencing technology, supporting a range of analysis tasks including variant calling and structural variant detection, ensuring laboratories can leverage the high fidelity of long-read information to improve accuracy and throughput in data analysis.
- Cloud-Native Platform: Lucid Genomics offers a cloud-native platform that provides laboratories using PacBio systems with a scalable, production-ready pathway for tertiary analysis, allowing users to confidently access workflows designed for compatibility with PacBio data standards, reducing integration risks and accelerating time to insight.
- Market Expansion: This collaboration not only strengthens PacBio's ecosystem of compatible solutions but also has the potential to support the global community of HiFi sequencing users through joint customer engagements, technical enablement resources, and co-marketing initiatives, driving innovation and development in the genomics field.
See More
PacBio and Covaris Develop Joint HiFi Sequencing Workflow
- Joint Workflow: PacBio and Covaris have developed a collaborative workflow that integrates Covaris' truXTRAC® FFPE extraction technology with PacBio's Kinnex™ library preparation, aimed at enhancing HiFi sequencing quality from formalin-fixed, paraffin-embedded (FFPE) tissue samples, thereby advancing cancer research.
- Efficient Extraction Technology: The workflow utilizes Covaris' Adaptive Focused Acoustics (AFA) technology to recover DNA fragments up to 5,000 base pairs from FFPE tissues, significantly improving sequencing efficiency and data quality, helping researchers overcome the limitations of traditional short-read sequencing.
- Significant Data Output: In studies involving brain, kidney, and uterine tumor samples, the workflow produced over 100 million HiFi reads per sample, with mean read lengths of 750-1,500 base pairs, enabling the detection of over 11,000 structural variants and more than 5 million small variants, with approximately 60% phased, showcasing its potential clinical advantages.
- Broad Market Prospects: The introduction of this technology not only offers clinical researchers a significantly lower cost per genome but also allows previously challenging samples to be revisited, ultimately accelerating progress in oncology and driving innovation in genomics.
See More
PacBio Appoints New Board Member
- New Board Member: PacBio has appointed Dr. Christopher Gibson, co-founder of Recursion, to its Board of Directors, whose extensive experience in AI-driven drug discovery is expected to enhance PacBio's strategic development in genomics.
- Technological Integration Advantage: Under Dr. Gibson's leadership at Recursion, the successful integration of large-scale biological data with machine learning improved drug discovery efficiency, a capability that will directly support PacBio's data-driven discovery in high-throughput genomics.
- Biological Data Platform Development: At Recursion, Dr. Gibson developed a proprietary platform capable of generating and analyzing multimodal datasets, which will provide crucial support for PacBio in accelerating clinical development and patient selection, enhancing its market competitiveness.
- Future Development Vision: Dr. Gibson emphasized that PacBio's high-quality long-read sequencing technology will provide a rich foundation for biological data analysis, and combined with AI-driven analytics, it will accelerate discoveries and diagnostics in healthcare, showcasing significant market potential.
See More
