Pacific Biosciences of California, Inc. Q2 FY2025 earnings call

• Financial progress: Delivered year-over-year and sequential revenue growth, reduced quarterly cash burn. Reported $39.8M revenue, up 7% QOQ and 10% YOY. Non-GAAP gross margin 38.3% due to favorable product mix. Ended quarter with ~$315M in cash and investments.
• Segment details: Instrument revenue $14.2M (down YOY, up QOQ); consumables revenue $18.9M (up YOY). Shipped 15 Revio and 38 Vega systems; cumulative installed base 297 Revio and 73 Vega.
• International and clinical progress: APAC and EMEA regions combined up 45% YOY. Collaborations like 1,000 Genomes Long-Read Project. Clinical uses with Quest Diagnostics and Haorui Gene.
• Technology innovation: Development of multi-use SMRT Cell capability to reduce cost per genome and improve gross margin.

In Q2 2025, PacBio reported $39.8 million in revenue. Instrument revenue was $14.2 million, down 4% year-over-year but up sequentially. Consumables revenue totaled $18.9 million, up 11% year-over-year. Instrument revenue contributed approximately 35.7% of the total revenue ($14.2M / $39.8M), while consumables contributed approximately 47.5% ($18.9M / $39.8%). International growth was strong, with APAC and EMEA regions combined seeing a 45% increase compared to Q2 2024.

• Revenue: Maintaining midpoint of $155M-$165M, narrowing range. Consumables revenue expected to grow mid-teens; instrument revenue expected to decline mid-teens.
• Gross margin: Raising guidance range to 37%-40%, expecting to exit 2025 above 40%.
• Q3 outlook: Expected to be roughly flat sequentially and YOY, with APAC seeing slight sequential decline post-strong Q2.

• Tariff uncertainty in China, which continues to be difficult to predict.
• Government funding headwinds, particularly for U.S. academic institutions facing NIH-related uncertainty.
• Volatility in trade policy impacting business operations.

Q: Good job on the quarter. Tough macro situation in the U.S., impact on instruments and consumables?

A: Instruments affected by NIH funding; most Revio placements in Q2 to commercial providers. Consumables utilization healthy but some experiments put off due to NIH uncertainty.

Q: Vega dynamics, new customers?

A: 60% of Vega shipments to new customers. Vega fits applications like microbial, small amplicon, etc., cheaper than low-throughput short-read sequencers.

Q: Clinical customer adoption, rough estimate of consumables from clinical?

A: Roughly 15% of consumables from clinical customers, growing.

Q: Instrument placements going forward, Vega sales cycle?

A: Vega sales cycle faster than Revio. Expect growth in back half, with Vega dependent on NIH funding and international opportunities.