Pacific Biosciences’ Earnings Call Highlights Growth and Challenges

Pacific Biosciences ((PACB)) has held its Q2 earnings call. Read on for the main highlights of the call.

Pacific Biosciences’ recent earnings call painted a picture of robust international growth and successful technological adoption, despite facing domestic challenges. The sentiment was largely positive, with the company highlighting its strong performance in international markets and the successful launch of new technologies. However, the U.S. market continues to face hurdles due to funding constraints and broader economic uncertainties.

Revenue Growth

PacBio reported a revenue of $39.8 million for Q2 2025, marking a 7% sequential increase and a 10% year-over-year growth. This impressive performance was primarily driven by strong international growth, showcasing the company’s expanding global footprint.

International Expansion

The company saw significant revenue increases in the APAC and EMEA regions, with a combined growth of 45% compared to Q2 2024. The EMEA region experienced a 35% increase, while the APAC region surged by 53%, underscoring the effectiveness of PacBio’s international strategies.

Consumables and Product Mix

PacBio’s consumables revenue reached $18.9 million, up 11% year-over-year. The favorable product mix contributed to a non-GAAP gross margin of 38.3%, highlighting the company’s strategic focus on high-margin products.

Adoption of SPRQ Chemistry

The introduction of SPRQ chemistry has been a significant growth driver, enhancing HiFi adoption by increasing throughput by up to 33% and reducing DNA input requirements four-fold. This innovation is expected to continue propelling the company’s growth.

Clinical and Translational Research Footprint

The company expanded its presence in clinical applications, with 15% of consumables revenue now coming from clinical customers. Notable partnerships with Quest Diagnostics and Target ALS are part of this strategic expansion.

Vega Platform Success

The Vega platform has been well-received, with nearly 60% of shipments going to new PacBio customers. This has brought over 40 new laboratories into the PacBio ecosystem since its launch, indicating strong market acceptance.

Financial Discipline

PacBio demonstrated financial discipline with an 18% year-over-year decrease in non-GAAP operating expenses, totaling $58.1 million. This reflects the company’s commitment to cost management and restructuring efforts.

Instrument Revenue Decline

Despite overall growth, instrument revenue declined by 4% year-over-year to $14.2 million. This was largely due to funding constraints affecting academic and government customers.

Challenges in U.S. Market

Revenue in the Americas decreased by 15% year-over-year, primarily due to government funding headwinds and uncertainties surrounding NIH funding, highlighting the challenges in the U.S. market.

Macro-Economic Headwinds

The company continues to face macroeconomic uncertainties, particularly concerning tariffs in China and academic funding in the U.S., which could impact future performance.

Forward-Looking Guidance

PacBio provided a detailed outlook for the remainder of the year, expecting revenue to range between $155 million and $165 million, representing a 1% to 7% growth over 2024. The company anticipates mid-teen growth in consumables revenue, offset by a mid-teen decline in instrument revenue due to macroeconomic factors. Strategic initiatives and technological advancements, such as the SPRQ chemistry and multi-use SMRT Cell capability, are expected to bolster the company’s market position and drive long-term growth.

In summary, Pacific Biosciences’ earnings call highlighted a strong international performance and successful adoption of new technologies, despite facing challenges in the U.S. market. The company’s strategic initiatives and focus on innovation position it well for future growth, although macroeconomic uncertainties remain a concern.