Pacific Biosciences of California (NASDAQ:PACB) reported fourth-quarter and full-year 2025 results that management said exceeded expectations, driven by record consumables revenue and stronger instrument placements for its Revio and Vega sequencing platforms. On the call, President and CEO Christian Henry said the company exited 2025 with momentum it expects to carry into 2026, supported by continued clinical adoption of HiFi long-read sequencing and planned product launches aimed at improving customer economics and PacBio’s gross margins.
Fourth-quarter growth led by consumables and instrument placements
PacBio posted fourth-quarter revenue of $44.6 million, up 14% year-over-year and 16% sequentially. Henry attributed the sequential increase to higher Revio and Vega sales and record consumables revenue, which he said reflects traction across a range of clinical sequencing applications.
Instrument revenue increased 13% year-over-year to $17.3 million, which Gibson said was primarily driven by higher Vega shipments. In the quarter, PacBio shipped 21 Revio systems and 42 Vega systems, bringing cumulative shipments to 331 Revio systems and 147 Vega systems.
Clinical market strength offset academic funding pressure
Henry said growth in clinical and hospital customers was a key offset to pressure in the academic funding environment that weighed on instrument sales during 2025. He highlighted 55% growth in consumables for clinical and hospital customers in 2025, driven by whole genome sequencing in rare disease and targeted applications using the company’s PureTarget kit.
He also described continued momentum in Europe, where he said customers are shifting “from pilot testing to broader clinical adoption.” In the fourth quarter, PacBio reported year-over-year regional revenue growth of 3% in the Americas, 4% in Asia Pacific, and 45% in EMEA. Gibson said EMEA’s performance reflected increased Vega shipments and higher Revio consumables as clinical customers moved into broader adoption.
In Asia Pacific, Gibson pointed to increased sales tied to Berry Genomics following regulatory approval for clinical long-read sequencing in China, supporting routine hospital testing for thalassemia, alongside higher Vega sales that partially offset lower Revio shipments.
Full-year results: consumables up, instruments down, margins improved
For full-year 2025, PacBio reported total revenue of $160 million, up 4% from 2024. Consumables revenue increased 16% to $82 million, while instrument revenue declined 18% to $53.8 million. Gibson said lower instrument revenue was primarily due to fewer Revio shipments, partially offset by increased Vega shipments as the platform scaled after initial shipments began in late 2024. Service and other revenue rose 36% to $24.2 million, driven by higher Revio service contract revenue.
Profitability metrics improved. Non-GAAP gross margin was 40% in the fourth quarter, up from 31% a year earlier, and was 40% for the full year, up from 33% in 2024. Gibson said the improvement reflected a higher mix of consumables, cost-reduction initiatives for Revio and Vega, and continued high yields for Revio SMRT Cells.
Non-GAAP operating expenses fell to $56.2 million in the fourth quarter from $68.6 million a year earlier, which Gibson attributed mainly to lower headcount from restructuring and lower stock-based compensation. For the full year, non-GAAP operating expenses declined to $229.9 million from $289.2 million in 2024. PacBio ended 2025 with 485 employees, down 16% from 575 at the end of 2024.
Non-GAAP net loss narrowed to $37.6 million ($0.12 per share) in the fourth quarter from $55.3 million ($0.20 per share) in the prior-year quarter. For full-year 2025, non-GAAP net loss was $158.8 million ($0.53 per share), compared with $228 million ($0.83 per share) in 2024.
PacBio finished the year with $279.5 million in unrestricted cash, cash equivalents, and investments, down from $389.9 million at the end of 2024. Henry added that the company recently sold its short-read sequencing assets for net proceeds of approximately $48 million, a move he said strengthens the balance sheet and extends cash runway as PacBio sharpens its focus on long-read sequencing. He said the company will continue commercial support and consumable supply for Onso customers through this year.
SparkNex chemistry and multi-use Smart Cells key to 2026 strategy
A major theme of the call was SparkNex, PacBio’s next-generation consumable chemistry built around “multi-use smart cells.” Henry said SparkNex is intended to lower customers’ price per genome by enabling Smart Cell reuse and to expand PacBio’s gross margins by amortizing a historically expensive workflow component across multiple runs.
Henry said SparkNex is designed to enable whole-genome HiFi sequencing “at scale for less than $300 per genome” and to increase throughput with approximately 25% higher output per Smart Cell based on customer-generated beta data. PacBio plans to expand the beta program to more domestic and international customers in the coming weeks and launch SparkNex broadly later in the year, with Gibson expecting SparkNex to contribute to margin improvement in the second half of 2026.
On the Q&A, Henry said he expects SparkNex to support higher system utilization and market share gains, with Revio pull-through still expected to remain in a similar range over time (he cited roughly $225,000 to $250,000). He acknowledged potential short-term “dislocations” depending on adoption timing and said the company is using a controlled early access rollout to help align favorable pricing with available samples.
2026 outlook: revenue growth expected despite muted academic spending
PacBio guided for 2026 revenue of $165 million to $180 million, implying approximately 8% growth at the midpoint of $172 million. Gibson said the outlook assumes consumables remain the primary growth driver, supported by increasing utilization among clinical and hospital customers and continued expansion of the Revio and Vega installed base.
Management said it is not anticipating a significant improvement in academic funding. Gibson noted that while the company is encouraged by recent NIH budget updates, customers remain cautious due to uncertainty around funding visibility and grant timing, and the company’s outlook assumes muted academic spending continues, particularly in the Americas.
For profitability, PacBio expects a 100 to 400 basis-point improvement in non-GAAP gross margin in 2026, supported by higher consumables mix and the introduction of SparkNex in the second half. Gibson flagged potential headwinds from compute component costs—particularly memory—given “significant volatility,” which he said is reflected in the company’s guidance range.
Gibson said non-GAAP operating expenses are expected to “slightly improve” versus 2025 as the company manages spending while investing in its next-generation sequencing platform. Henry said the company is also focused on cost reductions through production initiatives such as insourcing and being selective on marketing and event spending, while noting the company expects some incremental litigation spending and plans to modestly expand its sales organization to pursue commercial opportunities.
Looking ahead, Henry outlined five initiatives for 2026 aimed at making HiFi “the sequencing standard of care,” including launching SparkNex, accelerating clinical adoption in rare disease, oncology, and carrier screening, enabling population-scale sequencing studies, scaling informatics and AI applications, and continuing platform innovation. He said the company plans to provide updates throughout the year, including at upcoming industry conferences.
About Pacific Biosciences of California (NASDAQ:PACB)
Pacific Biosciences of California, Inc develops, manufactures and sells high-performance DNA sequencing systems for genetic and genomic analysis. The company’s proprietary single-molecule, real-time (SMRT) sequencing technology is designed to enable long-read sequencing, offering high accuracy for applications such as de novo genome assembly, transcriptome characterization and structural variation analysis. Pacific Biosciences markets a suite of instruments, including the Sequel and Sequel IIe systems, alongside reagents, consumables and data analysis software to support a range of life science research.
Founded in 2004 and headquartered in Menlo Park, California, Pacific Biosciences has expanded its global reach by serving academic institutions, biotechnology and pharmaceutical companies, and government research centers across North America, Europe and Asia.
