PacBio Cuts Outlook as SPRQ-Nx Transition Slows, Targets 2028 Cash-Flow Positivity

PacBio lowered its revenue outlook as customers transition more slowly than expected to the lower-priced SPRQ-Nx chemistry and academic and government demand for Vega systems weakens. The company expects many customers to complete the inventory transition by late 2026. PacBio is restructuring to reduce costs, targeting $15 million to $20 million in annual compensation and benefits savings, with a further potential $30 million to $40 million reduction in spending in 2027 as major platform investments wind down. The company is targeting cash-flow positivity in 2028, dependent on launching its ultra-high-throughput platform, improving compute and memory economics, converting customers to SPRQ-Nx and reaching gross margins near 50%.

Pacific 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.

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.

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 ne...