Pacific Biosciences of California, Inc. Q3 FY2025 earnings call

• Top line: Revenue $38.4M, slightly below expectations due to fewer Vega shipments and lower ASPs, but consumable revenue at all-time high of $21.3M. • Regional: EMEA fastest-growing region with 18% Y/Y growth; Americas funding challenging; Asia Pacific met revenue forecast. • Products: Shipped 13 Revio and 32 Vega systems; Revio ASPs lower but expected to recover in Q4; Vega placements delayed in Europe but POs received. • Consumables: Grew 15% Y/Y to $21.3M, supporting high sequencing output; Revio annualized pull-through near high end of range. • Clinical: Sequel II CNDx system approved in China; HiFi sequencing studies published; new PureTarget portfolio launched. • Technology: Unveiled SPRQ-Nx chemistry for lower sequencing costs and multi-use SMRT Cells; partnerships with EpiCypher and seqWell expanded applications.

Revenue for the third quarter was $38.4 million. Instrument revenue was $11.3 million, a 33% decrease year-over-year. Consumable revenue reached a record $21.3 million, up 15% year-over-year. Service and other revenue was $5.8 million, up 25% year-over-year. Regionally, EMEA saw 18% year-over-year growth, Americas had challenges due to funding, and Asia Pacific met revenue forecast though at lower ASPs. Revio shipments were 13 systems, Vega shipments were 32 systems, with Vega placements delayed in Europe.

• Full-year 2025 revenue guidance narrowed to $155M to $160M. • Q4 expected to grow ~10% sequentially. • Cash burn for 2025 expected to be ~$115M, an improvement of over $70M vs 2024. • Aim to reach cash flow breakeven by end of 2027.

• Funding environment challenges, especially for academic and government research customers. • Procurement delays for Vega instruments in Europe. • Potential tariff impacts on Vega system not material enough to pass to customers yet. • Impact of U.S. government shutdown on order volumes, though currently muted.

Q: On instruments, Revio ASPs lower and Vega placements delayed. Talk about Revio ASPs going forward and Vega placements pushed out.

A: Revio ASPs expected to recover in Q4; Vega placements in Europe had ~half dozen instruments stuck in procurement, some already POs and to be shipped in Q4.

Q: On gross margin, strong in quarter. Bucket out mix and other factors. Outlook for 2026.

A: Gross margin outperformance due to strength in consumables and production cost improvements; 2026 gross margins expected to improve as consumables grow.

Q: Funding environment for 2026. Instrument environment.

A: Funding environment challenging, especially academic; pivoting to clinical applications with strong traction.

Q: Consumables, Vega pull-through, SPRQ-Nx beta testing.

A: Vega pull-through not commented yet; Revio pull-through high; SPRQ-Nx has over 100 customers interested, beta testing starting soon.

Q: SPRQ chemistry rollout, PureTarget applications.

A: SPRQ-Nx to drive revenue growth; PureTarget used in carrier screening, single-gene disorders, etc.

Q: Population scale programs funnel, Revio ASPs in 2026.

A: Funnel expanding due to SPRQ-Nx; Revio ASPs expected stable in first half 2026.

Q: AI approach, SPRQ-Nx timeline.

A: Measured approach to SPRQ-Nx rollout, ensuring customer experience; multi-use SMRT Cells sold alongside single-use.

Q: U.S. government shutdown impact on orders.

A: No material impact yet; longer shutdown could affect Q1/Q2, but revenue not heavily dependent on NIH-funded sources.

Q: 2026 revenue growth, geographic Revio placements.

A: 2026 growth expected, not flat; Revios balanced geographically, mostly in commercial/clinical accounts.

Q: 2026 growth factors, China impact.

A: Qualitative growth expected; China market strong with Berry partnership, unaffected by Illumina ban.