PacBio — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 was $40.6 million, up from $38.4 million in Q3 2025.
• Consumable revenue was $20.8 million, down from $21.3 million in Q3 2025.
• Instrument revenue was $13.2 million, up from $11.3 million in Q3 2025.
• Service and other revenue was $6.6 million, up from $5.8 million in Q3 2025.
• GAAP gross profit was $13.5 million compared to $15.9 million in Q3 2025; GAAP gross margin was 33% compared to 41%.
• Non-GAAP gross profit was $14.6 million compared to $16.2 million in Q3 2025; Non-GAAP gross margin was 36% compared to 42%.
• GAAP operating expenses were $50.5 million, down from $54.8 million in Q3 2025.
• Non-GAAP operating expenses were $47.0 million, down from $53.9 million in Q3 2025.
• GAAP net loss was $37.8 million compared to $38.0 million in Q3 2025.
• Non-GAAP net loss was $32.8 million compared to $36.8 million in Q3 2025.
• GAAP net loss per share was $0.12 compared to $0.13 in Q3 2025; Non-GAAP net loss per share was $0.11 compared to $0.12.
• Ending cash, cash equivalents, and investments were $199.4 million, down from $298.7 million in Q3 2025.
• Revio system placements were 15, up from 13 in Q3 2025.
• Vega system placements were 35, up 9% year-over-year from 32 in Q3 2025.
• Annualized Revio pull-through per system was approximately $204,000, down from approximately $236,000 in Q3 2025.

Guidance and Future Outlook:

• Full-year 2026 revenue is now expected to be in the range of $155 million to $160 million.

Business Segments and Product Lines:

• Over half of Revio consumables revenue was tied to SPRQ-Nx adoption by the end of the quarter.
• Two-thirds of the Revio installed base opted to upgrade software for SPRQ-Nx use by the end of the quarter.
• Launched SPRQ-Nx for Vega systems in late August.
• More than 90% of the 35 new Vega systems sold were to new customers.
• Revenue reflects continued demand for instruments and consumables.

Market and Competitive Landscape:

• Partnered with GeneDx to add long-read whole genome sequencing capabilities to its portfolio, targeting rare disease and clinical work growth.
• Strengthened APAC presence through Berry Genomics' Birth Defects Project in China, positioning HiFi genome sequencing at the center of large-scale regional research.
• The Department of Veterans Affairs awarded Sampled, a high-utilization Revio customer, a five-year contract for genomics analyses using long-read whole genome sequencing for the Million Veteran Program.
• Initiated a multi-year strategic collaboration with Verily Health to combine HiFi long-read data with real-world clinical data at population scale, supporting AI model training on Verily's Workbench platform serving over 20,000 researchers.
• Announced a collaboration with TychoBio to generate full-length RNA datasets with HiFi and Kinnex sequencing to train AI models for predicting RNA therapy efficacy and off-target effects.

Risks and Challenges:

• Non-GAAP gross margin decline was driven by higher memory costs and Vega manufacturing transition costs.
• Forward-looking statements note risks including challenges in developing, manufacturing, and launching new products; potential cancellation of instrument orders; ability to attract and retain customers; risks associated with international operations; and macroeconomic conditions.
• Specific risks mentioned include high costs of computer memory components, supply interruptions, product performance issues, loss of key employees, and third-party patent claims.

Management Commentary and Tone:

• Mark Van Oene, President and CEO, stated PacBio is entering an exciting phase as technology investments unlock new opportunities.
• Management noted SPRQ-Nx is changing the economics of HiFi sequencing while growing clinical adoption.
• CEO emphasized a clear focus on sharpening execution, prioritizing key areas, and translating technology strength into sustainable growth.

Other Key Points:

• Jim Gibson stepped down as Chief Financial Officer (CFO).
• Mark Van Oene was appointed interim CFO.
• Bill Meyer was appointed Chief Accounting Officer (CAO).
• PacBio is currently engaged in a search for a new CFO.
• The company reported a gain on the disposal of short-read assets in the nine months ended September 30, 2026.
• The company incurred litigation settlement charges related to an agreement with Personal Genomics of Taiwan, Inc. during the nine months ended September 30, 2026.
• Non-GAAP measures exclude recurring charges such as amortization of acquired intangible assets, patent license amortization, interest expense related to the PGI settlement, and changes in fair value of contingent consideration.