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Pacific Biosciences Q4 Revenues Fall 24 Percent

NEW YORK – Pacific Biosciences reported after the close of the market on Thursday that its fourth quarter 2022 revenues fell 24 percent year over year due to lower instrument demand in anticipation of the firm's new Revio long-read sequencer.

The firm also said it expects full-year 2023 revenues in the range of $165 million to $180 million, representing 29 percent to 40 percent growth over 2022 revenues of $128.3 million. Company officials announced the new guidance on a call with investors following the release of the firm's fourth quarter and full-year 2022 financial results.

PacBio's Q4 revenues of $27.4 million fell 24 percent year over year because of lower instrument demand as customers wait for the release of Revio, and narrowly beat the consensus Wall Street estimate of $26.2 million. Full-year revenues were down 2 percent from $130.5 million in 2021, just beating the analysts' average estimate of $127.5 million.

The results were in line with a preliminary Q4 revenue estimate of $27.3 million provided by the company last month. At that time, the firm announced that customers had ordered 76 Revio sequencers in Q4. On Thursday's call, CEO Christian Henry added that the firm plans to ship at least 25 Revios by the end of Q1 and is on track to hit its "full planned production rate" by the end of Q2.

He called 2023 a "year of product transition" and warned that there may be variability in consumables revenues as customers migrate to the new instrument. CFO Susan Kim said the low end of guidance assumes a reduction in Sequel II and IIe consumables sales "from faster-than-expected ramp-down," while the high end assumes "flat to slightly higher consumables" sales amid strong Revio consumables orders. PacBio expects service revenues to decline as customers decommission Sequel II and IIe instruments.

"There was some fear management wouldn't [provide guidance] at all, given uncertainty over Sequel roll off and new launch trajectories," Cowen Analyst Dan Brennan wrote in a note to investors, "but thankfully a sensible revenue range was provided."

Product revenues for Q4 totaled $22.8 million, down 27 percent from $31.2 million in Q4 2021, while service and other revenues fell 6 percent to $4.6 million from $4.9 million. Instrument revenues totaled $6.1 million, less than half the $16.2 million tallied in the prior-year period, and consumables revenues were $16.7 million, up from $15.0 million.

By region, revenues from the Americas were down 26 percent year over year to $12.0 million; Asia-Pacific revenues grew 23 percent to $10.2 million; and Europe, the Middle East, and Africa revenues fell 43 percent to $5.2 million. Currency fluctuations lowered revenues in Europe by 7 percent, Kim said.

During the quarter, PacBio placed 18 Sequel II or IIe systems, bringing its total installed base for that product line up to 512 instruments as of Dec. 31. Sequel II and IIe systems accounted for 94 percent of consumables revenues, PacBio said.

The firm's net loss in Q4 was $84.4 million, or $.37 per share, compared to a loss of $69.3 million, or $.31 per share, in Q4 of 2021. On an adjusted basis, net loss was $.35 per share, beating the analysts' average estimate for a loss of $.36 per share.

The firm's Q4 R&D expenses were flat at $42.6 million, while SG&A expenses grew 21 percent to $45.0 million from $37.3 million.

Product revenues fell 4 percent to $108.7 million from $113.5 million a year ago, and service and other revenues increased 15 percent to $19.6 million from $17.0 million. Instrument revenues were $48.7 million, down from $61.3 million in 2021, and consumables revenues were $60.0 million, up from $52.2 million the year before.

The company's net loss in 2022 totaled $314.2 million, or $1.40 per share, compared to a net loss of $181.2 million, or $.89 per share, in 2021. Adjusted loss per share was $1.38, narrowly beating analysts' consensus estimate for a net loss of $1.39 per share.

PacBio's full-year 2022 R&D expenses jumped 71 percent to $193.0 million from $112.9 million in 2021. SG&A expenses grew 30 percent to $160.9 million from $124.1 million in 2021.

As of Dec. 31, PacBio had $772.3 million in cash and investments. Last month, the firm raised approximately $201 million in gross proceeds in a public offering of common stock.

In Friday morning trading on the Nasdaq, shares of PacBio were down almost 7 percent at $10.08.

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