PACIFIC BIOSCIENCES OF CALIFORNIA, INC. has recently released its latest 10-Q report. The company designs and manufactures sequencing systems and consumables used to analyze complex genetic material, with a focus on HiFi long-read sequencing. Its products include Revio, Vega, and Sequel instruments, along with reagent and preparation kits used in sequencing workflows, and it sells to research institutions, clinical labs, genome centers, public health labs, hospitals, CROs, pharmaceutical companies, and agricultural companies.
For the three months ended March 31, 2026, PacBio reported revenue of $37.2 million, essentially unchanged from $37.2 million a year earlier. Product revenue rose 1% to $31.5 million, led by a 9% increase in consumables revenue to $21.8 million, while instrument revenue slipped 12% to $9.7 million and service and other revenue fell 7% to $5.6 million. The company said Revio system sales increased to 15 units from 12, while Vega system sales edged down to 27 units from 28.
Gross profit improved to $12.8 million from a gross loss of $1.4 million in the prior-year quarter. Total cost of revenue fell 37% to $24.3 million, helped by a $6.4 million drop in product cost and the absence of roughly $12.0 million of restructuring charges recorded in the year-earlier period. Cost of product revenue declined to $20.0 million from $26.3 million.
Operating expenses dropped sharply to $21.2 million from $427.6 million a year earlier. The prior-year quarter included $381.8 million of restructuring and strategic-shift costs, including $359.3 million of accelerated amortization of acquired intangibles, $15.0 million of impairment charges, and $4.6 million of employee separation costs. In the latest quarter, operating expenses included $15.4 million of litigation settlement expenses and were partly offset by a $45.8 million gain on disposal of assets to Illumina Cambridge Limited.
The company’s operating loss narrowed to $8.4 million from $428.9 million, and net loss improved to $8.3 million from $426.1 million. Cash, cash equivalents, and investments were $276.0 million at March 31, 2026, down 1% from $279.5 million at December 31, 2025. PacBio said it received about $48.1 million in net cash proceeds tied to the asset disposal during the quarter.
Management said demand for instruments, particularly Vega, remained constrained by the U.S. funding environment, which has lengthened sales cycles and, in some cases, delayed orders. The company said it expects second-quarter 2026 revenue to grow by approximately single digits to low double digits sequentially, with stronger revenue in the second half of 2026 driven by clinical adoption, SPRQ-Nx consumable growth, and revenue from the Basecamp Research program. It also said it is continuing development of a high-throughput HiFi sequencer that it believes could launch in 2027. As a result of these announcements, the company's shares have moved -14.54% on the market, and are now trading at a price of $1.41. For more information, read the company's full 10-Q submission here.
