Announces Plan to Reduce Annualized
Operating Expense Run Rate by $50 -
$75 Million
Q1 2024 Earnings Conference Call Scheduled
for May 9, 2024
MENLO
PARK, Calif., April 16,
2024 /PRNewswire/ – PacBio (NASDAQ: PACB) today
announced preliminary, unaudited revenue for the quarter ended
March 31, 2024.
Preliminary First Quarter Results
- Preliminary revenue of $38.8
million, roughly flat compared with $38.9 million in the prior-year period.
- Instrument revenue of $19.0
million compared with $20.7
million in the prior-year period.
- Consumables revenue of $16.0
million compared with $14.0
million in the prior-year period. Expect Revio consumables
in the first quarter of 2024 to be approximately $11.0 million.
- Service and other revenue of $3.8
million compared with $4.2
million in the prior-year period.
- Instrument revenue included 28 RevioTM sequencing
systems in the first quarter of 2024, bringing the ending installed
base to 201 systems as of March 31,
2024. Of the 28 Revio systems shipped, 16 were shipped to
new customers. Onso shipments increased sequentially as PacBio
continued to ramp up its manufacturing capacity, achieving
steady-state production levels at the end of the quarter.
- Total preliminary cash, cash equivalents, and investments
balance as of March 31, 2024 of
approximately $562 million.
Preliminary revenue for the first quarter was below the
company's expectations due to an increasing number of customers
delaying instrument purchases and softness in consumable
shipments.
All regions underperformed, with 13 Revio systems falling out of
the forecast in the last couple of weeks in the first quarter,
which the company believes primarily resulted from elongated
customer purchasing cycles. The median sales cycle for Revio
instrument purchases increased more than expected in the first
quarter of 2024. PacBio believes that these instruments continue to
be strong sales opportunities that are likely to close in 2024.
PacBio believes additional reasons for the shortfall include:
- The uncertainty surrounding the funding for new capital
equipment, particularly in the U.S. and China;
- Procurement delays;
- Small-to-mid-size existing customers yet to increase their
sample volumes to drive an upgrade to Revio; and,
- An increasing proportion of the sales pipeline was comprised of
new customers in the first quarter of 2024, which have shown they
have longer sales cycles compared to existing PacBio
customers.
- Consumable revenue was also below expectations, which the
company believes was primarily attributed to: `
- Slower-than-expected ramp-up in sequencing by our small- to
mid-sized customers, many of whom are new to PacBio. The time for
new Revio customers and new projects to reach full capacity has
been slower than previously anticipated;
- Sample delays impacting sequencing volume in the quarter at
certain large customers; and,
- Some service providers in China operating at lower utilization as a
result of the difficult funding environment.
Commentary by Christian Henry,
President and CEO of PacBio:
"Following the successful launch of the Revio system and a
record 2023, we entered the year with optimism regarding our growth
prospects. As we reached the last couple of weeks of the first
quarter, however, we saw an increasing number of customers delay
instrument purchases and we experienced some unexpected softness in
consumable shipments. As a result, the first quarter came in below
our original expectations. We expect these factors to have an
impact on our 2024 performance, and we expect to provide further
details on our full year outlook on our earnings call scheduled for
May 9, 2024."
"Looking ahead, we are focused on four strategic priorities.
First, improving commercial execution to drive adoption of both the
Revio and Onso platforms; second, continuing the development of our
benchtop long read and high throughput short-read platforms; third,
implementing projects to improve our gross margin and drive
manufacturing efficiencies; and finally, reducing annualized
run-rate operating expenses on a non-GAAP basis by $50 million to $75
million by the end of 2024 in relation to our prior guidance
of 5% operating expense growth. "
"Despite these near-term headwinds, we remain highly encouraged
by PacBio's long-term growth potential. We are continuing to see
new customers adopt Revio as evidenced by the fact that nearly 60%
of our Revio placements in the quarter were to new customers.
We are also starting to see significant traction with large-scale
projects, such as the Estonia National Biobank project announced
last month, the first Revio in Latin
America to be used for a 1,000-sample whole genome project,
and pediatric genome initiatives at hospitals in Canada and Korea. Additionally, we
expect consumables to return to sequential growth going forward
this year as we continue to grow the Revio installed base and see
encouraging trends that point toward increased sequencing on the
Revio system. It should be noted that March Revio utilization was
at an all-time high – including some of our top customers exceeding
our expectations. We have expanded the capabilities of the
Revio platform through the roll-out of v13 software upgrade which
has enabled our customers with more functionality and better
performance. We've also recently launched new reagent kits
that improve our customer workflows and launched our new Kinnex
kits to continue to drive new customer adoption."
"I am confident in our ability to create value for all our
stockholders and stakeholders. PacBio has some of the world's most
advanced sequencing technology and our customers continue to
uncover insights into the genome unimaginable with other
technologies."
Updated Guidance and Financial Outlook
Revenue in the first quarter was significantly lower than
expected, and as a result, PacBio now expects 2024 revenue to be in
the range of $170 million to
$200 million. The company
believes that second quarter revenue will improve over the first
quarter and that the second half of the year will improve
sequentially as consumables return to sequential growth and the
company closes some of the deals that were delayed in the first
quarter. At the midpoint of $185
million, the company believes that total Revio shipments for
2024 will be around 120 systems. At the midpoint of the
revised guidance, the company expects that consumable revenue will
be around $80 million and consumable
pull-through on the Revio system will be around $290,000 per system.
Given the company's lowered outlook for 2024, PacBio believes it
is unlikely to achieve its long-term revenue guidance of at least
$500 million in 2026 and is
reevaluating the timing of achieving it. The company expects to
provide more details on its financial performance and outlook on
its earnings call scheduled on May 9,
2024.
With the reduced revenue forecast and the planned cost reduction
initiatives, PacBio currently expects to end 2024 with cash,
cash equivalents, and investments balance in the range of
$435 million to $450 million.
The preliminary unaudited financial information set forth above
is subject to revision and is anticipated to be finalized in May
2024. PacBio's financial results could differ materially from
the preliminary estimates above, which are not a comprehensive
statement of PacBio's financial results and are not necessarily
indicative of the results to be expected as of or for the fiscal
period ended March 31, 2024, or any
future period. Accordingly, you should not place undue
reliance on these preliminary estimates.
Quarterly Conference Call Information
PacBio will hold its quarterly conference call on Thursday, May 9, 2024, at 5:00 p.m. Eastern Time to discuss its first
quarter 2024 financial results. The call will be webcast and may be
accessed at PacBio's website at
https://investor.pacificbiosciences.com/.
Date: Thursday, May 9, 2024, at
5:00 pm ET (2:00 pm PT)
Listen live via internet or replay:
https://investor.pacificbiosciences.com/
Toll-free: 1-888-349-0136
International: 1-412-317-0459
If using the dial-in option, please dial into the call ten
minutes prior to start time using the appropriate number above and
ask to join the "PacBio Q1 Earnings Call."
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
stem from two highly differentiated core technologies focused on
accuracy, quality and completeness which include our HiFi long-read
sequencing and our SBB® short-read sequencing technologies. Our
products 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
This press release refers to non-GAAP operating expenses, which
PacBio reports in addition to, and not as a substitute for,
financial measures calculated in accordance with GAAP. For more
information on how PacBio defines non-GAAP operating expenses, see
the tables included with our fourth quarter 2023 earnings press
release dated February 15, 2024.
PacBio is unable to reconcile the non-GAAP operating expense
numbers included in this press release because certain items that
impact this measure are out of PacBio's control and/or cannot be
reasonably predicted at this time.
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 information is not superior to financial measures
calculated in accordance with GAAP, 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.
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 statements relating to
PacBio's preliminary unaudited financial information as of and for
the periods ended March 31, 2024; the
availability or timing of PacBio's final financial results as of
and for the periods ended March 31,
2024; PacBio's expectations for future operating results,
revenue and guidance; PacBio's cost-saving plans and initiatives as
well as the expected financial impact and timing of these plans and
initiatives; risks that the operating expense reductions may have
an adverse impact on PacBio's business and results of operations;
risks that charges associated with the Company's operating expense
reductions may be greater than anticipated; the availability, uses,
accuracy, coverage, advantages, quality or performance of, or
benefits or expected benefits of using, PacBio products or
technologies; anticipated demand for PacBio's products and
technologies in future periods. 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 that could cause actual outcomes and results to
differ materially from currently anticipated results. These risks
include, but are 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 lengthening sales cycles;
risks related to PacBio's ability to successfully execute and
realize the benefits of acquisitions; the estimated size and
estimated growth for the markets for PacBio's products may be
smaller than expected; the impact of U.S. export restrictions on
the shipment of PacBio products to certain countries; rapidly
changing technologies and extensive competition in genomic
sequencing; unanticipated increases in costs or expenses;
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 and commercialization 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 geopolitical
instability. 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, including PacBio's preliminary unaudited financial
information and PacBio's financial guidance, 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.
Contacts
Investors:
Todd
Friedman
650.521.8450
ir@pacb.com
Media:
Lizelda
Lopez
pr@pacb.com
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SOURCE Pacific Biosciences of California, Inc.