PacBio Q2 Earnings Meet Estimates, Revenues Miss, 2026 Sales View Cut

PacBio’s Q2 Revenues in Detail

PacBio registered total revenues of $39 million, down 2% year over year. The figure missed the Zacks Consensus Estimate by 4.2%. Consumables growth and higher Revio placements were offset by weaker instrument sales and a sharp revenue decline in Asia Pacific.

Shares of the company lost around 1.5% during yesterday’s after-hours trading. Year to date, the stock has declined 30.5% compared with the industry’s fall of 10%. However, the broader S&P 500 Index has increased 12.8% in the same time frame.

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PACB's Geographical Results Remain Uneven

Americas revenues were $17.6 million, down 0.6% year over year. Continued uncertainty surrounding NIH, academic and government funding weighed on capital purchasing, though clinical and commercial customer activity remained resilient.

Asia-Pacific revenues totaled $7 million, down 45% year over year. The decrease reflected the completion of a significant population-sequencing program, weaker academic and government demand and lower consumables purchases as customers prepared for the SPRQ-Nx transition.

EMEA revenues increased 52% year over year to $14.4 million. Growth was driven by clinical customers moving from pilot programs into routine production, stronger Vega demand and a strategic multi-system Revio placement supporting a national genomics initiative.

PacBio’s Q2 Segmental Analysis

In the quarter under review, total Product revenues amounted to $32.9 million, down 0.4% from the year-ago quarter.

Within the Product segment, Instrument revenues were $12.8 million, down 9.9% year over year. The decline reflected a lower average selling price, including strategic Revio placements at key accounts, and fewer Vega shipments amid academic and government funding constraints. Instrument revenues in the quarter included 20 Revio sequencing systems and 26 Vega sequencing systems.

PACB ended the quarter with 366 cumulative Revio system shipments and 200 cumulative Vega system shipments.

Consumables revenues for the quarter were $20.1 million, up 6.3% from the prior-year quarter, supported by installed-base expansion and continued Revio utilization. Shipments to clinical customers increased 67% and represented a mid-teens percentage of total consumables shipments. Annualized Revio pull-through per system was approximately $202,000 in the quarter.

Growth was partly tempered by customers using existing inventory and validating workflows ahead of broader SPRQ-Nx adoption.

Service and other revenues totaled $6.1 million, down 9.4% year over year.

PacBio's Margin Trend

In the quarter under review, PacBio’s adjusted gross profit decreased 8.3% year over year to $13.9 million. The adjusted gross margin contracted 200 basis points to 36%.

Sales, general and administrative expenses declined 7.7% year over year to $33.4 million. Research and development expenses increased 2.2% year over year to $23 million. Adjusted total operating expenses of $56.1 million decreased 3.4% year over year.

Total operating loss was $44.6 million in the reported quarter compared with the prior-year quarter’s $44.9 million.

PacBio’s Financial Position

PacBio exited the second quarter of 2026 with cash and investments of $236.9 million compared with $275.9 million at the end of the first quarter of 2026.

PACB Lowers 2026 Revenue Outlook

PacBio reduced its 2026 revenue guidance to $155-$165 million from the prior range of $165-$175 million. The Zacks Consensus Estimate is pegged at $165.8 million.

The company now expects an adjusted gross margin of 35%-37%. Adjusted operating expenses are projected at $215-$220 million, down $5 million from the previous guidance range.

PACB’s Innovation and Clinical Momentum Drive Growth

PacBio exited the second quarter of 2026 with mixed results, wherein adjusted earnings met the Zacks Consensus Estimate while revenues missed the same. Growth in consumables revenues, strong clinical demand and an increase in EMEA revenues were encouraging. Gains were partly offset by softer instrument revenues, funding constraints in the Americas and a sharp revenue decline in Asia Pacific.

PacBio advanced the global commercial rollout of SPRQ-Nx chemistry, which lowers the U.S. list price of a HiFi whole genome to $345 through multi-use SMRT Cells. The chemistry enhances methylation detection and incorporates DeepConsensus, an AI-powered algorithm co-developed with Google. More than one-third of the installed base had opted for SPRQ-Nx by June, while the company will launch SPRQ-Nx on the Vega platform in August to expand throughput to 90 gigabases per run.

Commercial momentum included multi-system Revio orders, a new population-scale customer and continued sample delivery for Basecamp Research. PacBio gained scientific validation through publications in the New England Journal of Medicine and Nature Genetics, along with a HiFi Solves subfertility preprint. The company’s growth strategy centers on replicating EMEA’s clinical success globally, expanding population-scale sequencing and operating with a leaner cost structure.

However, PacBio continues to face funding-related weakness in the Americas and Asia-Pacific, slower-than-expected SPRQ-Nx adoption as customers complete workflow validation and cost pressures from memory, compute and Vega manufacturing transition. These factors prompted the company to lower its 2026 revenue and gross margin guidance while pushing its cash flow breakeven target to 2028.

PACB’s Zacks Rank & Key Picks

PacBio currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%.

McKesson reported a first-quarter fiscal 2027 adjusted EPS of $9.93, which beat the Zacks Consensus Estimate by 5.2%. Revenues of $105.4 billion surpassed the Zacks Consensus Estimate by 0.95%.

McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 4.3%.

Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.

Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 10.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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