Pacific Biosciences of California(PACB) - 2024 Q1 - Quarterly Results

Q1 2024 Performance Summary PacBio's Q1 2024 revenue was nearly flat at $38.8 million due to delayed instrument purchases, though gross margin improved and net loss narrowed Q1 2024 Revenue Breakdown (vs. Q1 2023) | Revenue Category | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Instrument Revenue | $19.0M | $20.7M | -8.2% | | Consumables Revenue | $16.0M | $14.0M | +14.3% | | Service & Other Revenue | $3.8M | $4.2M | -9.5% | | Total Revenue | $38.8M | $38.9M | -0.3% | Q1 2024 Key GAAP Financials (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Gross Profit | $11.3M | $9.8M | | Gross Margin | 29% | 25% | | Operating Expenses | $92.6M | $101.0M | | Net Loss | $(78.2)M | $(88.0)M | | Net Loss Per Share | $(0.29) | $(0.36) | Q1 2024 Key Non-GAAP Financials (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Non-GAAP Gross Profit | $12.6M | $9.9M | | Non-GAAP Gross Margin | 33% | 26% | | Non-GAAP Operating Expenses | $87.2M | $88.7M | | Non-GAAP Net Loss | $(71.4)M | $(75.5)M | | Non-GAAP Net Loss Per Share | $(0.26) | $(0.31) | - Key operational updates include the selection of the Revio system by the University of Tartu for a 10,000-genome project, the launch of the PureTarget repeat expansion panel for neurological disorder research, and the initiation of a significant cost reduction program[10] Management Commentary Management attributed Q1 revenue miss to delayed instrument purchases, focusing on commercial execution, product pipeline, and a cost-reduction plan for positive cash flow by 2026 - Management cited delayed instrument purchases as the primary reason for missing revenue expectations, although consumables revenue grew 15% year-over-year[11] - Strategic priorities include improving commercial execution and developing new products such as a benchtop long-read platform and high-throughput short-read and long-read platforms[11] - The company has taken swift action to reduce its cost structure, including a headcount reduction of 195 employees. This is expected to lower the non-GAAP annualized expense run rate by more than $75 million by the end of 2024[11] - These cost-saving measures are part of a broader plan to achieve positive cash flows by the end of 2026, consistent with the company's long-term guidance[11] Financial Statements This section presents unaudited condensed consolidated financial statements for Q1 2024, including the Statement of Operations, Balance Sheets, and GAAP to non-GAAP reconciliations Unaudited Condensed Consolidated Statement of Operations Q1 2024 total revenue was $38.8 million, with gross profit improving to $11.3 million, and net loss narrowing to $78.2 million Q1 2024 Statement of Operations Highlights (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $38,810 | $38,900 | | Gross Profit | $11,282 | $9,761 | | Total Operating Expense | $92,644 | $101,013 | | Operating Loss | $(81,362) | $(91,252) | | Net Loss | $(78,178) | $(88,015) | | Net Loss Per Share (Basic) | $(0.29) | $(0.36) | Unaudited Condensed Consolidated Balance Sheets As of March 31, 2024, PacBio reported $561.9 million in cash and investments, with total assets at $1.67 billion and liabilities at $1.02 billion Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and investments | $561,914 | $631,416 | | Inventory, net | $67,343 | $56,676 | | Total Assets | $1,669,920 | $1,746,013 | | Convertible senior notes, net | $892,545 | $892,243 | | Total Stockholders' Equity | $649,017 | $701,304 | Reconciliation of Non-GAAP Financial Measures This section reconciles GAAP to non-GAAP figures, showing a Q1 2024 non-GAAP net loss of $71.4 million after adjustments Q1 2024 GAAP to Non-GAAP Net Loss Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP net loss | $(78,178) | | Change in fair value of contingent consideration | $(70) | | Amortization of acquired intangible assets | $6,849 | | Non-GAAP net loss | $(71,399) | Q1 2024 GAAP to Non-GAAP Gross Profit Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP gross profit | $11,282 | | Amortization of acquired intangible assets | $1,343 | | Non-GAAP gross profit | $12,625 | Disclosures This section explains PacBio's use of non-GAAP measures for comparability and internal planning, alongside forward-looking statements detailing risks and uncertainties - PacBio reports non-GAAP measures because it believes they provide consistency and comparability with past financial performance, and uses them for internal forecasting and strategic planning[14][15] - The report contains forward-looking statements concerning cost-saving plans, financial guidance, and new product impacts. These are subject to risks such as competition, supply chain interruptions, and potential product performance issues[17]