PacBio outlines cost-cutting, revenue meets Q1 target

MENLO PARK, Calif. - Pacific Biosciences of California, Inc. (NASDAQ: PACB), known as PacBio, reported preliminary first-quarter revenues of $36.9 million, a slight decrease from the $38.8 million in the same quarter last year. According to InvestingPro data, this continues a concerning trend, with the company's revenue declining by 23% over the last twelve months. The company's market capitalization currently stands at $357 million, with its stock showing significant volatility as indicated by a beta of 2.03. The company, specializing in advanced sequencing solutions, saw a dip in instrument revenue from $19.0 million to $10.8 million year-over-year, while consumable revenue reached a record $20.1 million.

Despite the decline in instrument revenue, PacBio highlighted that Vega system orders picked up in the first quarter, and consumable revenue hit a company record. The Revio systems reported an annualized pull-through per system of approximately $236,000, aligning with the company's expectations. InvestingPro analysis reveals that while the company maintains a strong current ratio of 7.48, indicating solid short-term liquidity, it faces challenges with cash burn - one of several key insights available in the comprehensive Pro Research Report covering this stock.

Amidst uncertain funding from the National Institutes of Health (NIH) and broader economic challenges, PacBio is taking strategic steps to reduce its annualized non-GAAP operating expense run rate by $45 million to $50 million by the end of the year. This plan includes reducing headcount across all functions and cutting non-headcount related expenses.

Christian Henry, President and CEO of PacBio, stated, "While the funding and general macroeconomic environment is having an impact on our ability to place more instruments, particularly Revio systems at academic customers, we are encouraged by the consistent Revio utilization and annualized consumable pull-through."

The company plans to concentrate on developing its long-read platform and has reiterated its full-year 2025 revenue guidance of $155 million to $170 million. With the anticipated cost savings, PacBio now expects 2025 non-GAAP operating expenses to come in lower than the previously guided $270 million to $280 million, and the ending cash and investments balance to be higher than the earlier projection of approximately $260 million. InvestingPro subscribers can access additional insights, including analyst consensus recommendations and detailed financial health scores, helping investors make more informed decisions about PACB's future prospects.

PacBio will provide more details during its earnings call scheduled for Thursday, May 8, 2025.

This article is based on a press release statement and contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations. The preliminary financial results are unaudited and subject to revision.

In other recent news, Pacific Biosciences of California, Inc. (PacBio) reported a significant decrease in both quarterly and annual revenues for 2024, with a 33% drop in quarterly revenue to $39.2 million and a 23% decline in annual revenue to $154 million. Despite these financial challenges, the company launched new products, including the Vega system and SPRQ chemistry for the Revio system, aimed at making HiFi long-read sequencing more accessible. The company also announced the appointment of Jim Gibson as the new Chief Financial Officer, bringing extensive financial leadership experience from companies like Tesla and Netflix. In a strategic move, PacBio has secured an extended lease for its headquarters with financial benefits such as a 17-month rent abatement and a tenant improvement allowance. On the analyst front, Scotiabank lowered its price target for PacBio to $2.00 while maintaining a Sector Outperform rating, citing capital spending constraints and uncertainties in U.S. academic funding. Meanwhile, Cantor Fitzgerald reiterated its Overweight rating with a $2.50 price target, highlighting concerns over NIH funding and the company's valuation. These developments come as PacBio prepares to present at the J.P. Morgan Healthcare Conference, where more financial details will be discussed.

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