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Deciphering Disruption: Inside Cathie Wood's Latest PlaysPacific Biosciences of California NASDAQ: PACB reported second-quarter revenue of $39 million, including $20 million in consumables revenue, $13 million in instrument revenue and $6 million in services revenue, CFO Jim Gibson said during the Canaccord Genuity Growth Conference.

Revenue increased sequentially, Gibson said, while services revenue declined slightly year over year following the completion of a large population genetics study in Asia. The company highlighted 67% growth in its clinical business and said clinical consumables represented a mid-teens percentage of total consumables revenue.

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Leadership transition and restructuring Strategic Buy Lights Up This Biotech Stock: Time to Invest?PacBio recently completed the transition to Mark Van Oene as chief executive officer. Gibson said Van Oene, who joined PacBio about five years ago, previously led research and development and operations and was involved in the launches of the Revio and Vega sequencing systems as well as the company’s SPRQ-Nx and original SPRQ chemistry products.

According to Gibson, Van Oene’s priorities include expanding PacBio’s clinical presence and building on growth in Europe, the Middle East and Africa, or EMEA, as well as other international markets.

The company also announced a targeted reduction in force as it manages higher compute and memory costs and a slower-than-expected transition to its SPRQ-Nx chemistry. Gibson said the restructuring substantially reduced marketing functions and removed management layers, with marketing efforts becoming more focused on clinical markets and integrated with the commercial organization.

PacBio expects the actions to reduce compensation and benefits expenses by $15 million to $20 million. Gibson also said the company expects to be past much of its major spending for a new high-throughput sequencing platform by 2027, potentially reducing spending by another $30 million to $40 million that year.

SPRQ-Nx transition affects consumables PacBio commercially launched SPRQ-Nx in May. The chemistry supports three uses per chip and carries an average selling price roughly 35% below the prior offering, Gibson said. While approximately one-third of customers had converted their software to enable the multi-use workflow, some larger service providers have continued using existing inventory before placing more orders for the new chemistry.

“We did see a slight lull in Q2” as customers worked through inventory, Gibson said, adding that usage rates remained high even when customers were not replenishing supplies.

The company expects many customers to complete that inventory transition by the latter part of 2026. PacBio also expects that lower pricing could drive increased sample volumes, though Gibson said it was too early to draw conclusions from order data. He estimated each Revio system would need to run roughly 10 to 15 more samples per month to return to revenue parity after the price reduction.

PacBio lowered its revenue outlook, with Gibson citing the slower SPRQ-Nx conversion and reduced expectations for a second-half pickup in academic and government demand for Vega systems. He said demand for Revio remains strong and that the company continues to see solid Vega placements.

Population studies and clinical opportunity Gibson said PacBio signed two notable fleet-expansion agreements with existing customers and secured a large new population genomics initiative that received five Revio systems. The company expects to provide additional details about that initiative during the third quarter.

He said large projects enabled by SPRQ-Nx are expected to become more meaningful contributors to revenue in 2027, as installations and project ramps generally take four to six months. PacBio previously announced a 100,000-sample GeneDx project, which Gibson described as the company’s largest project to date. He said the GeneDx program and the newly announced population genetics initiative are not expected to contribute substantially in 2026.

Gibson said PacBio won the GeneDx business through a competitive process in which customers prioritized data depth, coverage and reproducibility. He said researchers and clinical-oriented organizations are increasingly interested in generating more complete genomic data sets at the outset rather than potentially enriching short-read data sets years later.

In EMEA, PacBio reported more than 50% year-over-year growth, supported by rare-disease testing, favorable reimbursement conditions for whole-genome sequencing and the fit of Revio throughput at smaller hospitals and within single-payer healthcare systems. In the U.S., Gibson said larger centralized testing labs are seeking higher-throughput systems and favorable reimbursement conditions for whole-genome sequencing.

Path toward cash-flow positivity PacBio is developing an ultra-high-throughput platform that Gibson said is intended to improve price parity with short-read sequencing, support larger data sets and provide customers with more flexibility over compute requirements. The company is also working to optimize its existing systems’ use of GPUs and memory, after buying inventory to secure supply for the remainder of the year.

Gibson said PacBio’s path to cash-flow positivity in 2028 depends on successfully launching the new platform as a portfolio addition, improving compute and DRAM economics, and converting a majority of customers to SPRQ-Nx. He said the company would need to be “knocking on the door of 50%” gross margin to support that objective.

About Pacific Biosciences of California (NASDAQ:PACB)Pacific Biosciences of California, Inc develops, manufactures and sells high-performance DNA sequencing systems for genetic and genomic analysis. The company's proprietary single-molecule, real-time (SMRT) sequencing technology is designed to enable long-read sequencing, offering high accuracy for applications such as de novo genome assembly, transcriptome characterization and structural variation analysis. Pacific Biosciences markets a suite of instruments, including the Sequel and Sequel IIe systems, alongside reagents, consumables and data analysis software to support a range of life science research.

Founded in 2004 and headquartered in Menlo Park, California, Pacific Biosciences has expanded its global reach by serving academic institutions, biotechnology and pharmaceutical companies, and government research centers across North America, Europe and Asia.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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MENLO PARK, Calif., Aug. 05, 2026 (GLOBE NEWSWIRE) -- PacBio (NASDAQ: PACB) today announced financial results for the quarter ended June 30, 2026.

Recent Business Highlights

Total revenue of $39.0 million was driven by growing consumables and new Revio and Vega placements as the Company commenced its full rollout of SPRQ-Nx chemistry. Instrument revenue consisted of both single-system and multi-system orders, including an order for several Revio systems from a new population-scale customerCommenced global commercial rollout of SPRQ-Nx, delivering whole genome sequencing at $345 USD list price per genome with enhanced methylation detection and DeepConsensus, an AI-powered consensus algorithm co-developed with GoogleCommenced sequencing and sample delivery for Basecamp Research, a frontier AI lab for therapeutic design, marking a significant operational milestone for PacBio's largest population-scale program to datePublished in a landmark New England Journal of Medicine study, "Clinical Long-Read Genome Sequencing for Rare-Disease Diagnostics." The publication demonstrates that HiFi long-read sequencing is a clinically effective first-tier diagnostic test that improves diagnostic yield while simplifying the laboratory workflow, reducing turnaround time, and enhancing the overall economics of rare disease diagnosticsPublished in a Nature Genetics article, “Near-perfect genome sequencing in medical genetics.” The publication highlights long-read sequencing as a pillar of near-perfect genome sequencing (NPGS), alongside diploid genome assembly, pangenome references, and AI-driven variant interpretationContributed to a published preprint from the HiFi Solves Sub-fertility Consortium in Asia Pacific. The preprint demonstrates that PacBio HiFi whole genome sequencing can provide a more complete view of reproductive genetics in one workflowImplemented restructuring actions primarily to streamline marketing and R&D organizations, strengthen the go-to-market commercial organization, and drive greater cost discipline going forward
Second quarter results:

 Q2 2026Q2 2025Revenue (in millions)$39.0$39.8Consumable revenue (in millions)$20.1$18.9Instrument revenue (in millions)$12.8$14.2Service and other revenue (in millions)$6.1$6.7Revio™system placements2015Vega™ system placements2638Annualized Revio pull-through per system~$202,000~$219,000Ending cash, cash equivalents, and investments (in millions)$236.9$314.7    Gross profit and margin, operating expenses, net loss, and net loss per share are reported on a GAAP and non-GAAP basis. The non-GAAP measures are described below and reconciled to the corresponding GAAP measures at the end of this release.

GAAP gross profit for the second quarter of 2026 was $12.6 million compared to $14.7 million during the second quarter of 2025. Non-GAAP gross profit for the second quarter of 2026 was $13.9 million compared to $15.2 million for the second quarter of 2025. GAAP gross margin was 32% for the second quarter of 2026 compared to 37% for the second quarter of 2025. Non-GAAP gross margin was 36% for the second quarter of 2026 compared to 38% for the second quarter of 2025. The decline in non-GAAP gross margin was primarily driven by higher compute and memory costs, Vega manufacturing transition costs, and lower Revio average selling prices associated with strategic multi-system customer placements.

GAAP operating expenses totaled $57.2 million for the second quarter of 2026 compared to $59.5 million for the second quarter of 2025. Non-GAAP operating expenses totaled $56.1 million for the second quarter of 2026 compared to $58.1 million for the second quarter of 2025. GAAP and non-GAAP operating expenses for the second quarter of 2026 and the second quarter of 2025 included non-cash share-based compensation of $8.6 million and $11.0 million, respectively.

GAAP net loss for the second quarter of 2026 was $44.7 million compared to $41.9 million for the second quarter of 2025. Non-GAAP net loss for the second quarter of 2026 was $41.9 million compared to $40.0 million for the second quarter of 2025.

GAAP net loss per share for the second quarter of 2026 was $0.14 compared to $0.14 for the second quarter of 2025. Non-GAAP net loss per share for the second quarter of 2026 was $0.14 compared to $0.13 for the second quarter of 2025.

2026 Financial Outlook

PacBio expects revenue for the full year 2026 to be in the range of $155 million to $165 million.

Quarterly Conference Call Information

Management will host a quarterly conference call today at 4:30 p.m. Eastern Time to review financial results for the second quarter ended June 30, 2026. Investors can access the call by dialing 1-888-349-0136 (or 1-412-317-0459 for international callers) and requesting to join the “PacBio Q2 Earnings Call". The call will be webcast live and available for replay at PacBio's website at https://investor.pacificbiosciences.com.

About PacBio

PacBio (NASDAQ: PACB) is a premier life science technology company that designs, develops, and manufactures advanced sequencing solutions to help scientists and clinical researchers resolve genetically complex problems. Our products and technologies, which primarily consist of our HiFi long-read sequencing systems, address solutions across a broad set of research applications, including human germline sequencing, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications. For more information, please visit www.pacb.com and follow @PacBio.

PacBio products are provided for Research Use Only. Not for use in diagnostic procedures.

Statement regarding use of non‐GAAP financial measures

PacBio reports non‐GAAP results for basic net income (loss) per share, net income (loss), gross margins, gross profit (loss) and operating expenses in addition to, and not as a substitute for, or because it believes that such information is superior to, financial measures calculated in accordance with GAAP. PacBio believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of PacBio’s non-GAAP financial measures as tools for comparison.

PacBio's financial measures under GAAP include substantial charges that are listed in the itemized reconciliations between GAAP and non‐GAAP financial measures included in this press release. PacBio excludes recurring charges from its non-GAAP financial statements, including amortization of acquired intangible assets and changes in fair value of contingent consideration, and further excludes infrequent and limited charges including impairment charges, restructuring-related expenses for discrete restructuring events, settlement charges, disposition of short-read assets, benefits from income taxes and other adjustments and rounding differences.

Management has excluded the effects of these items in non‐GAAP measures to assist investors in analyzing and assessing past and future operating performance. In addition, management uses non-GAAP measures to compare PacBio’s performance relative to forecasts and strategic plans and to benchmark its performance externally against competitors.

PacBio encourages investors to carefully consider its results under GAAP, as well as its supplemental non‐GAAP information and the reconciliation between these presentations, to more fully understand its business. A reconciliation of PacBio’s non-GAAP financial measures to their most directly comparable financial measure stated in accordance with GAAP has been provided in the financial statement tables included in this press release. PacBio is unable to reconcile future-looking non-GAAP guidance without unreasonable effort because certain items that impact this measure are out of PacBio's control and/or cannot be reasonably predicted at this time.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements relating to PacBio’s initiatives as well as the expected financial impact and timing of these plans and initiatives, including PacBio's expectations regarding long-read sequencing and SPRQ-Nx; PacBio's expectations regarding its restructuring efforts; PacBio’s financial guidance and expectations for future periods; new and continued reception of PacBio’s products and their expansion into new or existing markets; and the availability, uses, accuracy, coverage, advantages, quality or performance of, or benefits or expected benefits of using, PacBio products or technologies. Reported results and orders for any instrument system should not be considered an indication of future performance. You should not place undue reliance on forward-looking statements because they are subject to assumptions, risks, and uncertainties and could cause actual outcomes and results to differ materially from currently anticipated results, including, but not limited to, challenges inherent in developing, manufacturing, launching, marketing and selling new products, and achieving anticipated new sales; potential cancellation of existing instrument orders; assumptions, risks and uncertainties related to the ability to attract new customers and retain and grow sales from existing customers; risks related to PacBio's ability to successfully execute and realize the benefits of acquisitions; the impact of new, increased or enhanced tariffs and export restrictions; rapidly changing technologies and extensive competition in genomic sequencing; unanticipated increases in costs or expenses; high costs of computer memory components; interruptions or delays in the supply of components or materials for, or manufacturing of, PacBio products and products under development; potential product performance and quality issues and potential delays in development timelines; the possible loss of key employees, customers, or suppliers; customers and prospective customers curtailing or suspending activities using PacBio's products; third-party claims alleging infringement of patents and proprietary rights or seeking to invalidate PacBio's patents or proprietary rights; risks associated with international operations; and other risks associated with general macroeconomic conditions and global economic or political instability, including war and other international conflicts, such as the conflicts in the Middle East. Additional factors that could materially affect actual results can be found in PacBio's most recent filings with the Securities and Exchange Commission, including PacBio's most recent reports on Forms 8-K, 10-K, and 10-Q, and include those listed under the caption “Risk Factors.” These forward-looking statements are based on current expectations and speak only as of the date hereof; except as required by law, PacBio disclaims any obligation to revise or update these forward-looking statements to reflect events or circumstances in the future, even if new information becomes available.

The unaudited condensed consolidated financial statements that follow should be read in conjunction with the notes set forth in PacBio's Quarterly Report on Form 10-Q when filed with the Securities and Exchange Commission.

Contacts

Investors:
[email protected]

Media:
[email protected]

  Pacific Biosciences of California, Inc.
Unaudited Condensed Consolidated Statements of Operations
   Three Months Ended(in thousands, except per share amounts)June 30,
2026 March 31,
2026 June 30,
2025Revenue:     Product revenue$32,950  $31,534  $33,083 Service and other revenue 6,057   5,644   6,683 Total revenue 39,007   37,178   39,766 Cost of Revenue:     Cost of product revenue (1) (2) (3) 20,944   19,972   20,022 Cost of service and other revenue 5,242   4,182   4,853 Amortization of acquired intangible assets 183   183   183 Loss on purchase commitment (1) —   —   24 Total cost of revenue 26,369   24,337   25,082 Gross profit 12,638   12,841   14,684 Operating Expense:     Research and development 23,022   19,608   22,529 Sales, general and administrative (1) (2) 33,393   31,153   36,175 Settlement charges (2) —   15,400   — Gain on disposal of assets (3) —   (45,796)  — Amortization of acquired intangible assets 833   833   833 Total operating expense 57,248   21,198   59,537 Operating loss (44,610)  (8,357)  (44,853)Interest expense (4) (2,110)  (1,740)  (1,738)Other income, net 2,037   2,006   4,696 Loss before income taxes (44,683)  (8,091)  (41,895)Income tax provision 58   184   35 Net loss$(44,741) $(8,275) $(41,930)      Net loss per share:     Basic$(0.14) $(0.03) $(0.14)Diluted$(0.14) $(0.03) $(0.14)      Weighted average shares outstanding used in calculating net loss per share:     Basic 310,405   305,819   300,162 Diluted 310,405   305,819   300,162              (1)  Balances for the three months ended June 30, 2025 include restructuring costs. Refer to the Reconciliation of Non-GAAP Financial Measures table below for additional information on such costs and related amounts.

(2)  Balances for the three months ended June 30, 2026 and March 31, 2026 include litigation settlement charges and related legal fees in connection with the agreement entered into with Personal Genomics of Taiwan, Inc. Refer to the Reconciliation of Non-GAAP Financial Measures table below for additional information on such costs and related amounts.

(3)  Balances for the three months ended June 30, 2026 and March 31, 2026 include amounts related to the disposition of short-read assets, including the gain on the sale of certain assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies, and related non-recurring customer transition costs. Refer to the Reconciliation of Non-GAAP Financial Measures table below for additional information on such costs and related amounts.

(4)  Balance for the three months ended June 30, 2026 includes interest expense related to the Personal Genomics of Taiwan, Inc. settlement liability.

 Pacific Biosciences of California, Inc.
Unaudited Condensed Consolidated Statements of Operations
     Three Months Ended Six Months Ended(in thousands, except per share amounts)June 30,
2026 June 30,
2025 June 30,
2026 June 30,
2025Revenue:       Product revenue$32,950  $33,083  $64,484  $64,196 Service and other revenue 6,057   6,683   11,701   12,723 Total revenue 39,007   39,766   76,185   76,919 Cost of Revenue:       Cost of product revenue (1) (3) (4) 20,944   20,022   40,916   46,355 Cost of service and other revenue 5,242   4,853   9,424   8,631 Amortization of acquired intangible assets 183   183   366   4,528 Loss on purchase commitment (1) —   24   —   4,092 Total cost of revenue 26,369   25,082   50,706   63,606 Gross profit 12,638   14,684   25,479   13,313 Operating Expense:       Research and development (1) 23,022   22,529   42,630   51,582 Sales, general and administrative (1) (3) 33,393   36,175   64,546   76,343 Impairment charges (2) —   —   —   15,000 Settlement charges (3) —   —   15,400   — Gain on disposal of assets (4) —   —   (45,796)  — Amortization of acquired intangible assets (5) 833   833   1,666   362,875 Change in fair value of contingent consideration (6) —   —   —   (18,700)Total operating expense 57,248   59,537   78,446   487,100 Operating loss (44,610)  (44,853)  (52,967)  (473,787)Interest expense (2,110)  (1,738)  (3,850)  (3,475)Other income, net 2,037   4,696   4,043   8,990 Loss before income taxes (44,683)  (41,895)  (52,774)  (468,272)Income tax provision 58   35   242   (267)Net loss$(44,741) $(41,930) $(53,016) $(468,005)        Net loss per share:       Basic$(0.14) $(0.14) $(0.17) $(1.57)Diluted$(0.14) $(0.14) $(0.17) $(1.57)        Weighted average shares outstanding used in calculating net loss per share:       Basic 310,405   300,162   308,250   298,519 Diluted 310,405   300,162   308,250   298,519                  (1)  Balances for the three and six months ended June 30, 2025 include restructuring costs. Refer to the Reconciliation of Non-GAAP Financial Measures table below for additional information on such costs and related amounts.

(2)  In-process research and development ("IPR&D") impairment charge during the six months ended June 30, 2025 was driven primarily by macroeconomic factors and restructuring initiatives, including the focus on long-read innovation, resulting in changes to the timing and amounts of cash flows.

(3)  Balances for the three and six months ended June 30, 2026 include litigation settlement charges and related legal fees in connection with the agreement entered into with Personal Genomics of Taiwan, Inc. Refer to the Reconciliation of Non-GAAP Financial Measures table below for additional information on such costs and related amounts.

(4)  Balances for the three and six months ended June 30, 2026 include amounts related to the disposition of short-read assets, including the gain on the sale of certain assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies, and related non-recurring customer transition costs. Refer to the Reconciliation of Non-GAAP Financial Measures table below for additional information on such costs and related amounts.

(5)  Balance for the six months ended June 30, 2025 includes accelerated amortization of acquired intangible assets related to restructuring initiatives. Refer to the Reconciliation of Non-GAAP Financial Measures table below for additional information on such costs and related amounts.

(6)  Change in fair value of contingent consideration during the six months ended June 30, 2025 was due to fair value adjustments of milestone payments payable upon the achievement of a milestone event.

      Pacific Biosciences of California, Inc.
Unaudited Condensed Consolidated Balance Sheets
      (in thousands) June 30,
2026 December 31,
2025
Assets     Cash and investments $236,873  $279,506 Accounts receivable, net  31,104   35,448 Inventory, net  61,084   49,285 Prepaid expenses and other current assets  9,545   10,793 Property and equipment, net  26,972   24,146 Operating lease right-of-use assets, net  40,331   41,695 Restricted cash  1,604   1,552 Intangible assets, net  13,084   15,124 Goodwill  317,761   317,761 Other long-term assets  13,492   8,773 Total Assets $751,850  $784,083       Liabilities and Stockholders' (Deficit) Equity     Accounts payable $19,224  $20,770 Accrued expenses  30,322   33,646 Deferred revenue  19,442   19,865 Operating lease liabilities  61,795   57,040 Convertible senior notes, net  644,332   645,382 Other liabilities  9,948   2,031 Stockholders' (deficit) equity  (33,213)  5,349 Total Liabilities and Stockholders' (Deficit) Equity $751,850  $784,083           Pacific Biosciences of California, Inc.
Reconciliation of Non-GAAP Financial Measures
       Three Months Ended Six Months Ended(in thousands, except per share amounts) June 30,
2026 March 31,
2026 June 30,
2025 June 30,
2026 June 30,
2025GAAP net loss $(44,741) $(8,275) $(41,930) $(53,016) $(468,005)Change in fair value of contingent consideration (1)  —   —   —   —   (18,700)Settlement charges (2)  284   16,804   —   17,088   — Amortization of acquired intangible assets  1,016   1,016   1,016   2,032   8,144 Amortization of patent license (3)  516   —   —   516   — Disposition of short-read assets (4)  611   (45,490)  —   (44,879)  — Interest expense (5)  369   —   —   369   — Income tax benefit (6)  —   —   —   —   (546)Restructuring (7)  —   —   963   —   394,751 Non-GAAP net loss $(41,945) $(35,945) $(39,951) $(77,890) $(84,356)           GAAP basic net loss per share $(0.14) $(0.03) $(0.14) $(0.17) $(1.57)Change in fair value of contingent consideration (1)  —   —   —   —   (0.06)Settlement charges (2)  —   0.05   —   0.06   — Amortization of acquired intangible assets  —   —   —   0.01   0.03 Disposition of short-read assets (4)  —   (0.15)  —   (0.15)  — Restructuring (7)  —   —   —   —   1.32 Other adjustments and rounding differences  —   0.01   0.01   —   — Non-GAAP basic net loss per share $(0.14) $(0.12) $(0.13) $(0.25) $(0.28)           GAAP gross profit $12,638  $12,841  $14,684  $25,479  $13,313 Settlement charges (2)  —   500   —   500   — Amortization of acquired intangible assets  183   183   183   366   4,528 Amortization of patent license (3)  516   —   —   516   — Disposition of short-read assets (4)  611   306   —   917   — Restructuring (7)  —   —   348   —   12,375 Non-GAAP gross profit $13,948  $13,830  $15,215  $27,778  $30,216            GAAP gross profit %  32%  35%  37%  33%  17%           Non-GAAP gross profit %  36%  37%  38%  36%  39%           GAAP total operating expense $57,248  $21,198  $59,537  $78,446  $487,100 Change in fair value of contingent consideration (1)  —   —   —   —   18,700 Settlement charges (2)  (284)  (16,304)  —   (16,588)  — Amortization of acquired intangible assets  (833)  (833)  (833)  (1,666)  (3,616)Disposition of short-read assets (4)  —   45,796   —   45,796   — Restructuring (7)  —   —   (615)  —   (382,376)Non-GAAP total operating expense $56,131  $49,857  $58,089  $105,988  $119,808                       (1)  Change in fair value of contingent consideration during the six months ended June 30, 2025 was due to fair value adjustments of milestone payments payable upon the achievement of a milestone event.

(2)  Balances for the three months ended June 30, 2026 and March 31, 2026 and the six months ended June 30, 2026 include litigation settlement charges and related legal fees in connection with the agreement entered into with Personal Genomics of Taiwan, Inc.

(3)  Balances for the three and six months ended June 30, 2026 include amortization of a patent license acquired in connection with the agreement entered into with Personal Genomics of Taiwan, Inc.

(4)  Balances for the three months ended June 30, 2026 and March 31, 2026 and the six months ended June 30, 2026 include amounts related to the disposition of short-read assets, including the gain on the sale of certain assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies, and related non-recurring customer transition costs.

(5)  Interest expense for the three and six months ended June 30, 2026 is related to the liability incurred in connection with the agreement entered into with Personal Genomics of Taiwan, Inc.

(6)  A deferred income tax benefit during the six months ended June 30, 2025 is primarily related to the change in the deferred tax liability balance resulting from the accelerated amortization of acquired intangible assets and IPR&D impairment.

(7)  Restructuring-related costs incurred in connection with the 2025 plan during the three and six months ended June 30, 2025 consist primarily of costs included in cost of revenue related to excess inventory and purchase commitment losses, as well as costs included in operating expenses related to employee separation, accelerated depreciation, IPR&D impairment, and accelerated amortization of acquired intangibles.

Key Takeaways PacBio gains from product development and a Q1 earnings beat despite funding challenges.PACB's SPRQ-Nx chemistry boosts yields and targets sub-$300 genome sequencing at scale.PacBio sees research funding uncertainty weighing on Revio and Vega demand through 2026. Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio, has been gaining from its continued product development. The optimism, led by strong first-quarter results, is expected to contribute further. However, concerns about funding headwinds persist.

In the year-to-date period, this Zacks Rank #2 (Buy) company’s shares have lost 11.2% compared with the 12.4% decline of the industry. The S&P 500 Composite has improved 9.4% in the said time frame.

The renowned global provider of sequencing systems has a market capitalization of $521.8 million. The company projects 22.6% growth for 2026 and expects to maintain its strong performance in the future. PacBio’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 29.8%.

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Factors Favoring PACB’s GrowthSequencing Technologies Strengthen Market Leadership: PacBio differentiates itself in the genomics industry through its proprietary HiFi long-read sequencing, based on Single-Molecule Real-Time (SMRT) technology. This technology enables the high-accuracy, real-time detection of complex genomic structures, such as structural variations, haplotypes and epigenetic modifications.

Per a report by Data Bridge Market Research, the global SMRT market size was valued at $2.88 billion in 2024 and is projected to reach $4.36 billion by 2032, at a CAGR of 5.3%. Additionally, PacBio has expanded its offerings by integrating Sequencing by Binding chemistry with the launch of its Onso system in 2022, a short-read platform delivering ≥90% of bases at Q40+ accuracy, 15 times more precise than traditional sequencing methods. By providing both long-read and short-read technologies, PacBio uniquely serves diverse research and clinical applications while driving down costs and enhancing variant detection.

Robust Product Portfolio Driving Growth: PacBio continues to strengthen its competitive position through innovation in its HiFi sequencing platform. The company's SPRQ-Nx chemistry is gaining traction, delivering higher sequencing yields and enabling human whole-genome sequencing costs below $300 at scale through reusable SMRT Cells. Management plans to extend the technology to the Vega platform later this year, enhancing throughput and workflow efficiency.

PacBio is also advancing its next-generation ultra-high-throughput sequencing platform to target large-scale clinical and population genomics opportunities. Additionally, its collaboration with Basecamp Research to sequence roughly 100,000 metagenomic samples highlights the expanding role of HiFi sequencing in AI-driven biological research and underscores the technology's growing adoption across emerging applications.

Strong Q1 Results: PacBio exited the first quarter of 2026 with mixed results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same. Stable top-line performance, despite softer instrument sales, reflected continued strength in consumables demand and improving utilization trends across the installed base.

Growth in consumables revenues, expansion across the EMEA region and disciplined expense management were encouraging. The company also reported a significantly narrower operating loss year over year, supported by lower operating expenses and continued restructuring benefits.

A Factor That May Offset PACB’s GainsFunding Headwinds Continue to Weigh on Instrument Demand: PacBio continues to face funding-related headwinds that are weighing on instrument demand, particularly across academic and government research markets. Uncertainty around grant funding and cautious capital spending have pressured purchases of both Revio and Vega systems, with Vega being more exposed to academic budget constraints.

While the company is seeing growing interest from clinical and commercial customers, management does not anticipate a meaningful recovery in research funding through 2026 and recently lowered the high end of its annual revenue outlook due in part to weaker instrument demand. Although the upcoming commercial launch of SPRQ-Nx chemistry could improve the attractiveness of PacBio’s sequencing platforms by lowering costs and boosting throughput, near-term instrument growth is expected to remain dependent on expanding clinical adoption rather than a broad recovery in research spending.

Estimate TrendPacBio has been witnessing a stable estimate revision trend for 2026. Over the past 30 days, the Zacks Consensus Estimate for its adjusted loss per share has remained stable at 41 cents.

The Zacks Consensus Estimate for 2026 revenues is pegged at $165.8 million, indicating a 3.6% increase from the year-ago reported numbers.

Other Key PicksSome other top-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , West Pharmaceutical (WST - Free Report) and Intuitive Surgical (ISRG - Free Report) .

Globus Medical, currently carrying a Zacks Rank #2, reported a first-quarter 2026 adjusted earnings per share (EPS) of $1.12 per share, which surpassed the Zacks Consensus Estimate by 22.1%. Revenues of $759.9 million beat the Zacks Consensus Estimate by 4.0%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GMED has an estimated long-term earnings growth rate of 10.2% compared with the industry’s 12.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 26.3%.

West Pharmaceutical, currently carrying a Zacks Rank #2, reported first-quarter 2026 EPS of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%. 

WST has an estimated long-term earnings growth rate of 13.9% compared with the industry’s 9.5% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%.

Intuitive Surgical, carrying a Zacks Rank #2 at present, reported first-quarter 2026 adjusted EPS of $2.50, which beat the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%.

ISRG has a long-term estimated growth rate of 14.6% compared with the industry’s 12.6% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.