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PacBio (PACB) Tops on Q2 Earnings, Raises FY23 Revenue View
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Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio, delivered an adjusted loss per share of 26 cents in second-quarter 2023, narrower than the year-ago loss and the Zacks Consensus Estimate of a loss of 34 cents per share.
The company’s GAAP loss per share was 28 cents in the quarter, narrower than the year-ago loss of 32 cents.
Revenues in Detail
PacBio registered revenues of $47.6 million in the second quarter, up 34.1% year over year. The figure surpassed the Zacks Consensus Estimate by 17.9%.
The top line benefited from the year-over-year uptick in product revenues.
Geographical Analysis
PacBio’s revenues from the Americas were $24 million, up 10% year over year. This figure outpaced our second-quarter projection of $21.2 million.
In the Asia-Pacific region, PacBio recorded revenues of $12.9 million, reflecting a 61% uptick year over year. Strong performances from all regions were recorded, along with China achieving record revenues in the quarter. This figure compares to our second-quarter projection of $10.7 million.
Europe, the Middle East and Africa region registered revenues of $10.7 million, which grew 87% year over year. This figure compares to our second-quarter projection of $7.2 million.
Segmental Analysis
Product revenues amounted to $43.7 million, up 44.7% from the prior-year quarter. The figure outperformed our estimate of $33.9 million.
PacBio shipped 47 sequencing systems in the second quarter, including 45 Revio systems and 2 Sequel IIe systems. This brought the company’s installed base to 77 Revio systems as of Jun 30, 2023.
Instrument revenues were $29.9 million, up 91.7% year over year. This primarily resulted from the continued momentum of Revio systems in the quarter. Our model estimated $21.3 million for this metric.
Consumables revenues for the second quarter of 2023 were $13.7 million, down 5.7% from the prior-year quarter. Our projection was $12.6 million.
Service and other revenues totaled $3.9 million, down 25.9% year over year. This figure lagged our projection of $5.3 million.
Pacific Biosciences of California, Inc. Price, Consensus and EPS Surprise
In the quarter under review, PacBio’s adjusted gross profit fell 3.9% to $15.7 million. Adjusted gross margin contracted a huge 1311 basis points to 33.1%.
Sales, general and administrative expenses rose 3.4% to $40.6 million. Research and development expenses decreased 8.3% year over year to $46.2 million. Adjusted total operating expenses of $86.7 million declined 3.2% year over year.
Adjusted total operating loss was $71 million in the reported quarter compared with the prior-year quarter’s $73.2 million.
Financial Position
PacBio exited second-quarter 2023 with cash, cash equivalents and investments (excluding short-term and long-term restricted cash) of $829.9 million compared with $874.9 million at the end of first quarter.
Guidance
PacBio has raised its revenue outlook for 2023.
The company now expects to achieve revenues in the range of $185 million-$190 million (representing growth rate of 44-48% from 2022 figures), up from the earlier guided range of $170-$185 million (indicating growth of 33-44% from 2022 numbers). The Zacks Consensus Estimate is pegged at $177.3 million.
Our Take
PacBio exited the second quarter of 2023 with better-than-expected results. PACB saw a robust increase in its overall top line, including strong Product and Instrument revenues. Solid geographical performances were also encouraging. Continued strong prospects in the Revio and Onso systems, with customers placing orders for these, looked promising for the stock.
This month, PacBio announced its entry into an agreement to acquire Apton Biosystems with plans to integrate its Sequencing by Binding short-read chemistry with Apton's high throughput instrument. In June, PacBio’s Revio was implemented by Bioscientia. These raise optimism about the stock.
Yet, dismal bottom-line results were disappointing. The year-over-year fall in Consumables revenues and Service and other revenues was concerning. The contraction of adjusted gross margin added to the woes. The year-over-year operating loss was another area of concern.
Zacks Rank and Key Picks
PacBio currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported second-quarter 2023 adjusted earnings per share (EPS) of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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PacBio (PACB) Tops on Q2 Earnings, Raises FY23 Revenue View
Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio, delivered an adjusted loss per share of 26 cents in second-quarter 2023, narrower than the year-ago loss and the Zacks Consensus Estimate of a loss of 34 cents per share.
The company’s GAAP loss per share was 28 cents in the quarter, narrower than the year-ago loss of 32 cents.
Revenues in Detail
PacBio registered revenues of $47.6 million in the second quarter, up 34.1% year over year. The figure surpassed the Zacks Consensus Estimate by 17.9%.
The top line benefited from the year-over-year uptick in product revenues.
Geographical Analysis
PacBio’s revenues from the Americas were $24 million, up 10% year over year. This figure outpaced our second-quarter projection of $21.2 million.
In the Asia-Pacific region, PacBio recorded revenues of $12.9 million, reflecting a 61% uptick year over year. Strong performances from all regions were recorded, along with China achieving record revenues in the quarter. This figure compares to our second-quarter projection of $10.7 million.
Europe, the Middle East and Africa region registered revenues of $10.7 million, which grew 87% year over year. This figure compares to our second-quarter projection of $7.2 million.
Segmental Analysis
Product revenues amounted to $43.7 million, up 44.7% from the prior-year quarter. The figure outperformed our estimate of $33.9 million.
PacBio shipped 47 sequencing systems in the second quarter, including 45 Revio systems and 2 Sequel IIe systems. This brought the company’s installed base to 77 Revio systems as of Jun 30, 2023.
Instrument revenues were $29.9 million, up 91.7% year over year. This primarily resulted from the continued momentum of Revio systems in the quarter. Our model estimated $21.3 million for this metric.
Consumables revenues for the second quarter of 2023 were $13.7 million, down 5.7% from the prior-year quarter. Our projection was $12.6 million.
Service and other revenues totaled $3.9 million, down 25.9% year over year. This figure lagged our projection of $5.3 million.
Pacific Biosciences of California, Inc. Price, Consensus and EPS Surprise
Pacific Biosciences of California, Inc. price-consensus-eps-surprise-chart | Pacific Biosciences of California, Inc. Quote
Margin Trend
In the quarter under review, PacBio’s adjusted gross profit fell 3.9% to $15.7 million. Adjusted gross margin contracted a huge 1311 basis points to 33.1%.
Sales, general and administrative expenses rose 3.4% to $40.6 million. Research and development expenses decreased 8.3% year over year to $46.2 million. Adjusted total operating expenses of $86.7 million declined 3.2% year over year.
Adjusted total operating loss was $71 million in the reported quarter compared with the prior-year quarter’s $73.2 million.
Financial Position
PacBio exited second-quarter 2023 with cash, cash equivalents and investments (excluding short-term and long-term restricted cash) of $829.9 million compared with $874.9 million at the end of first quarter.
Guidance
PacBio has raised its revenue outlook for 2023.
The company now expects to achieve revenues in the range of $185 million-$190 million (representing growth rate of 44-48% from 2022 figures), up from the earlier guided range of $170-$185 million (indicating growth of 33-44% from 2022 numbers). The Zacks Consensus Estimate is pegged at $177.3 million.
Our Take
PacBio exited the second quarter of 2023 with better-than-expected results. PACB saw a robust increase in its overall top line, including strong Product and Instrument revenues. Solid geographical performances were also encouraging. Continued strong prospects in the Revio and Onso systems, with customers placing orders for these, looked promising for the stock.
This month, PacBio announced its entry into an agreement to acquire Apton Biosystems with plans to integrate its Sequencing by Binding short-read chemistry with Apton's high throughput instrument. In June, PacBio’s Revio was implemented by Bioscientia. These raise optimism about the stock.
Yet, dismal bottom-line results were disappointing. The year-over-year fall in Consumables revenues and Service and other revenues was concerning. The contraction of adjusted gross margin added to the woes. The year-over-year operating loss was another area of concern.
Zacks Rank and Key Picks
PacBio currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported second-quarter 2023 adjusted earnings per share (EPS) of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.