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Pacific Biosciences Q4 Revenues More Than Double as Firm Lays off 6 Percent of Workforce

NEW YORK – Pacific Biosciences said on Thursday that its fourth quarter revenues grew 113 percent year over year. The company also disclosed that it laid off roughly 6 percent of its workforce during the quarter.

In a conference call recapping the financial results, PacBio CFO Susan Kim told investors that the company reduced its headcount to 796 employees, down from 844 at the end of Q3. The workforce reduction was a result of a reorganization primarily in the company's R&D department, Kim said, and affected approximately 50 positions.

For the three months ended Dec. 31, PacBio booked $58.4 million in revenues, compared to $27.4 million in Q4 2022, beating the consensus Wall Street estimate of $57.5 million. The result was in line with the company’s preliminary fourth-quarter revenues announced in January.

Q4 product revenues totaled $54.0 million, up 137 percent from $22.8 million in Q4 2022, while service and other revenues dipped 4 percent to $4.4 million from $4.6 million.

Instrument revenues totaled $35.1 million, increasing more than fivefold from $6.1 million in Q2 2022, driven by continued adoption of the Revio platform. Consumables revenues were $18.9 million, a record for the company, up 13 percent from $16.7 million. Approximately $12.4 million of consumables revenues came from the Revio systems, Kim noted.

During Q4, the company shipped 44 Revio instruments, bringing its installed base at the end of the year to 173 systems.

CEO Christian Henry said during the call that the company is "especially pleased" with the number of new customers adopting the Revio system, as nearly 30 percent of orders in the fourth quarter were from new customers. He also noted that the company is making "solid progress" on converting existing PacBio customers to Revio, as about one-third of Sequel II and IIe system owners have now ordered a Revio.

Henry also noted that the company has "gradually ramped up" its manufacturing capacity for Onso, PacBio’s short-read sequencing platform that was launched last year, and grew shipments sequentially in the fourth quarter.

During Q4, PacBio saw business growth across the globe. Revenues from the Americas were $33.9 million, a 182 percent increase compared to Q4 2022. The region's record quarter was driven by continued growth in instruments and consumables sales to both new and existing customers, Kim told investors. Asia-Pacific revenues grew 31 percent year over year to $13.4 million, while revenues derived from Europe, the Middle East, and Africa were $11.1 million, more than doubling from the year-ago period.

The firm's net loss in Q4 was $82.0 million, or $.31 per share, compared to a net loss of $84.4 million, or $.37 per share, in Q4 of 2022, exceeding analysts' average estimate for a loss of $.28 per share.

For full-year 2023, PacBio revenues were $200.5 million, a 56 percent increase from $128.3 million in 2022 and in line with preliminary results. Revenues just exceeded analysts' average estimate of $199.4 million.

Full-year product revenues jumped 69 percent to $183.9 million from $108.7 million a year ago, while service and other revenues declined 15 percent to $16.6 million from $19.6 million.

Instrument revenues were $120.5 million, more than doubling from $48.7 million in 2022, and consumables revenues were $63.4 million, up 6 percent from $60.0 million the year before.

By market application, human genomics was the largest portion of PacBio’s business in 2023, Henry said, accounting for approximately 40 percent of total revenues. Plant, animal, and agriculture genomics were the second largest segment, making up approximately 25 percent of revenues. Microbiology and infectious disease made up about 20 percent of the company’s business, while cancer genomics contributed roughly 10 percent. Lastly, approximately 5 percent of the company’s revenues came from other and emerging markets, which included biopharma and gene editing customers.

The company's net loss in 2023 totaled $306.7 million, or $1.21 per share, compared to a net loss of $314.2 million, or $1.40 per share, in 2022 and exceeding analysts' consensus estimate for a net loss of $1.17 per share.

As of Dec. 31, PacBio had $631.4 million in cash and investments and $2.7 million in restricted cash.

In 2024, PacBio expects between $230.0 million and $250.0 million in revenues, still driven by Revio sales, Kim said. This represents a growth rate of approximately 15 percent to 25 percent, which the company believes to be "well above the sequencing market growth rate," she added.

At the midpoint of the guidance range, PacBio anticipates the number of Revio systems shipped to be flat or slightly higher than the 173 units shipped in 2023.

In forming the guidance, the company considered serval macroeconomic factors that are impacting purchases of capital equipment, including the funding environment in China, which is impacting the company’s "ability to further expand [its] Revio installed base in the country," Kim said.

"We do see funding challenges in China that are making it difficult for the smaller labs to dive into Revio," Henry said. "As a result, in our guidance, we significantly took down our forecast for China for the year — it's actually one of the biggest areas of challenge for us as we look into 2024."

In Friday morning trading on the Nasdaq, PacBio shares were down 6 percent to $6.30.