PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
PACB$2.26-7.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001299130-26-000081
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001299130-26-000122
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 148 current paragraphs.
68 unchanged; 37 reworded; 32 added; 4 removed; 2 previous and 11 current paragraphs rearranged.
Tables are not compared: 13 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
Recent Developments
Current report
Restructuring
Current report
On July 30, 2026, our Board of Directors approved a restructuring plan to continue to better align our organizational structure and resources with our strategic initiatives. The restructuring includes operating expense reductions and a reduction in force (the “Reduction in Force”). These restructuring actions are expected to result in a workforce reduction of approximately 40 employees, or approximately 8% of our workforce, as we align our organizational structure with our strategic priorities. Including the Reduction in Force and related non-headcount cost actions, we expect to reduce our annualized operating expenses by $30 million to $40 million by the end of 2027.
Current report
We estimate that we will incur aggregate pre-tax charges of approximately $2.0 million in connection with the Reduction in Force, primarily consisting of severance payments, employee benefits, outplacement services and related costs. We expect that the Reduction in Force will be completed and that these charges will be incurred in the third quarter of 2026.
Current report
Appointments and Resignations
Current report
Our Board of Directors appointed Mark Van Oene as President and Chief Executive Officer and as a member of our Board of Directors, effective August 5, 2026. Mr. Van Oene succeeds Christian Henry, who stepped down as our President and Chief Executive Officer effective August 5, 2026. Mr. Henry will continue to serve as a member of our Board of Directors.
Current report
Total revenue decreased $0.8 million, or 2%, for the second quarter of 2026 compared with the same quarter of 2025.
Current report
Service and other revenue decreased $0.6 million, or 9%.
Current report
Instrument revenue decreased for the second quarter of 2026 reflecting lower Revio average selling prices associated with strategic multi-system customer placements. Instrument revenue was also impacted byvariability in customer purchasing behavior resulting from uncertainty surrounding the funding for new capital equipment, particularly among academic and research institutions.
Current report
Cost of product revenue increased $0.9 million, or 5%, in the second quarter of 2026 compared to the same quarter of 2025 primarily due to exit costs associated with a contract manufacturer, increased memory costs, product transition costs related to the disposition of assets in the first quarter of 2026, and amortization of the patent license obtained through the legal settlement with PGI. These increases were partially offset by lower Instrument volumes and a shifting Consumables product mix.
Current report
Research and development expense increased by $0.5 million, or 2%, for the second quarter of 2026, compared to the same quarter of 2025. The increase was primarily driven by higher product development costs associated with ongoing investments in future sequencing platform development, partially offset by lower personnel and related expenses, including share-based compensation expense. Research and development expense included share-based compensation expense of $2.4 million and $3.3 million during the second quarter of 2026 and 2025, respectively. We anticipate research and development expense to decrease during the remainder of 2026 in connection with our recently announced expense reduction initiatives, primarily due to headcount reductions.
Current report
Comparison of the Six Months Ended June 30, 2026 and 2025
Current report
Revenue
Current report
Total Revenue
Current report
Total revenue decreased $0.7 million, or 1%, during the six months ended June 30, 2026 compared with the same period of 2025.
Current report
Product revenue increased $0.3 million primarily due to an increase of $2.9 million, or 7%, in consumable revenue partially offset by a decrease of $2.6 million, or 10%, in instrument revenue.
Current report
Service and other revenue decreased $1.0 million, or 8%.
Current report
Consumables Revenue
Current report
Instrument Revenue
Current report
Instrument revenue decreased during the six months ended June 30, 2026 reflecting lower Revio average selling prices associated with strategic multi-system customer placements. Instrument revenue was also impacted by variability in customer purchasing behavior resulting from uncertainty surrounding the funding for new capital equipment, particularly among academic and research institutions.
Current report
Sales of Vega systems decreased during the six months ended June 30, 2026. We sold 53 units compared to 66 units in the same period of 2025. Sales of Revio systems increased with 35 units sold compared to 27 units in the same period of 2025.
Current report
Total cost of revenue decreased $12.9 million, or 20%, during the six months ended June 30, 2026, compared to the same period of 2025 primarily due to decreases in cost of product revenue, amortization of acquired intangible assets, and share-based compensation expense. We recorded $12.4 million of restructuring-related costs during the six months ended June 30, 2025, which included $3.8 million relating to loss on purchase commitments which was based on an estimate of future excess inventory related to supply agreements for which we did not expect to have related sales. See Note 5. Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about restructuring activities. Total cost of revenue included share-based compensation expense of $1.3 million and $2.1 million during the six months ended June 30, 2026 and 2025, respectively.
Current report
Cost of product revenue decreased $5.4 million, or 12%, during the six months ended June 30, 2026, compared to the same period of 2025 primarily due to the restructuring-related costs that were recorded in the prior period, lower Instrument volumes, and a shifting Consumables product mix partially offset by exit costs associated with a contract manufacturer, increased memory costs, product transition costs related to the disposition of assets in the first quarter of 2026, and amortization of the patent license obtained through the legal settlement with PGI.
Current report
Research and Development Expense
Current report
Research and development expense decreased by $9.0 million, or 17%, during the six months ended June 30, 2026, compared to the same period of 2025. The decrease was primarily driven by lower personnel and related expenses, including share-based compensation expense, partially offset by an increase in product development costs associated with ongoing investments in future sequencing platform development. We also recorded $2.7 million of restructuring-related charges during the six months ended June 30, 2025. Research and development expense included share-based compensation expense of $1.6 million and $5.9 million during the six months ended June 30, 2026 and 2025, respectively. We anticipate research and development expense to decrease during the remainder of 2026 in connection with our recently announced expense reduction initiatives, primarily due to headcount reductions.
Current report
Sales, General, and Administrative Expense
Current report
Sales, general and administrative expense decreased by $11.8 million, or 15%, during the six months ended June 30, 2026, compared to the same period of 2025. The decrease was primarily due to a decrease in personnel and related expenses, including share-based compensation expense, and lower marketing expense, partially offset by legal expenses related to the settlement with PGI. We also recorded $5.4 million of restructuring-related charges during the six months ended June 30, 2025. Sales, general, and administrative expense included share-based compensation expense of $10.7 million and $13.1 million during the six months ended June 30, 2026 and 2025, respectively. We anticipate sales, general, and administrative expense to decrease during the remainder of 2026 in connection with our recently announced expense reduction initiatives, primarily due to headcount reductions.
Current report
Amortization of Acquired Intangible Assets
Current report
Interest Expense
Current report
Interest expense during the six months ended June 30, 2026 and 2025 was primarily comprised of interest on the convertible senior notes. Interest expense for the six months ended June 30, 2026 also included interest related to the liability recorded for the license and settlement agreement with PGI.
Current report
Other Income, Net
Current report
During the third quarter of 2026, we announced a restructuring plan to continue to better align our organizational structure and resources with our strategic initiatives. These restructuring actions are expected to result in a workforce reduction of approximately 40 employees, or approximately 8% of our workforce, as we align our organizational structure with our strategic priorities. Including the Reduction in Force and related non-headcount cost actions, we expect to reduce our annualized operating expenses by $30 million to $40 million by the end of 2027.
Removed paragraphs (4)
Previous report
Total revenue was relatively flat for the first quarter of 2026 compared with the same quarter of 2025.
Previous report
Service and other revenue decreased $0.4 million, or 7%.
Previous report
Cost of product revenue decreased $6.4 million, or 24%, in the first quarter of 2026 compared to the same quarter of 2025 primarily due to cost reductions related to our instrument platforms.
Previous report
Research and development expense decreased by $9.4 million, or 33%, for the first quarter of 2026, compared to the same quarter of 2025. The decrease was primarily driven by decreases in personnel and related expenses, including share-based compensation. We also recognized approximately $2.7 million of restructuring charges during the first quarter of 2025. Research and development expense included net negative share-based compensation expense of $0.8 million during the first quarter of 2026 due to the Company's estimated forfeitures and share-based compensation expense of $2.6 million during the first quarter of 2025.
Reworded paragraphs (37)
Previous wording
•Progress our clinical strategy to improve outcomes and create durability. Revio is increasingly being adopted in laboratory-developed test ("LDT") and clinical research settings, supporting consolidation of multiple tests, addressing complex genetic challenges, and driving sustained utilization of HiFi sequencing. This includes in the Americas, where we continue to aggressively shift our strategy to clinical and commercial accounts where we believe the funding dynamics are more favorable.
Current wording
•Progress our clinical strategy to improve outcomes and create durability. Revio is increasingly being adopted in laboratory-developed test ("LDT") and clinical research settings, supporting consolidation of multiple tests, addressing complex genetic challenges, and driving sustained utilization of HiFi sequencing. This includes in the Americas, where we continue to aggressively shift our strategy to clinical and commercial accounts where we believe the funding dynamics are more favorable and HiFi sequencing can provide meaningful improvements in diagnostic yield, particularly in rare disease cohorts, resolution of previously unsolved Mendelian disease cases, characterization of repeat expansion disorders, and structural variant detection, among others, relative to currently known short-read sequencing technologies.
Previous wording
Key highlights of the three months ended March 31, 2026 consolidated financial results include the following:
Current wording
Key highlights of the six months ended June 30, 2026 consolidated financial results include the following:
Previous wording
•Revenue was comprised of $9.7 million in instrument revenue, $21.8 million in consumables revenue and $5.6 million in service and other revenue during the three months ended March 31, 2026. Revenue was comprised of $11.0 million in instrument revenue, $20.1 million in consumables revenue and $6.0 million in service and other revenue during the three months ended March 31, 2025. An increase in Consumable revenue and higher Revio unit sales were offset by lower Vega unit sales and a decrease in service and other revenue.
Current wording
•Revenue was comprised of $22.6 million in instrument revenue, $41.9 million in consumables revenue and $11.7 million in service and other revenue during the six months ended June 30, 2026. Revenue was comprised of $25.2 million in instrument revenue, $39.0 million in consumables revenue and $12.7 million in service and other revenue during the six months ended June 30, 2025. Lower Vega unit sales and a decrease in service and other revenue were partially offset by an increase in consumables revenue and higher Revio unit sales.
Previous wording
•We recorded a gross profit of $12.8 million during the three months ended March 31, 2026 compared to a gross loss of $1.4 million during the same period of 2025. We recorded approximately $12.0 million of restructuring charges during the three months ended March 31, 2025. See Note 5. Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Gross margins may be affected by product mix, manufacturing efficiencies, changes in warranty costs, average selling price fluctuations, product promotions, future product launches, changes to inventory reserves, costs of raw materials, computing costs, specifically memory, and tariffs.
Current wording
•We recorded a gross profit of $25.5 million during the six months ended June 30, 2026 compared to $13.3 million during the same period of 2025. We recorded approximately $12.4 million of restructuring charges during the six months ended June 30, 2025. See Note 5. Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Gross margins may be affected by product mix, manufacturing efficiencies, changes in warranty costs, average selling price fluctuations, product promotions, future product launches, changes to inventory reserves, costs of raw materials, increased computing component costs, specifically memory, and tariffs.
Previous wording
•Loss from operations decreased $420.6 million during the three months ended March 31, 2026, compared with the same period of 2025, primarily due to a $406.4 million decrease in operating expenses. Operating expenses of $21.2 million for the three months ended March 31, 2026 included litigation settlement expenses of $15.4 million. Operating expenses were mostly offset by a $45.8 million gain on disposal of assets to Illumina Cambridge Limited due to the Asset Sale. See Note 2. Financial Instruments in Part I, Item I of this Quarterly Report on Form 10-Q for more information. Operating expenses of $427.6 million during the three months ended March 31, 2025 included $381.8 million of costs incurred in connection with the restructuring and strategic shift, which included $359.3 million of accelerated amortization of acquired intangibles, $15.0 million of impairment charges, and $4.6 million of employee separation costs, partially offset by an $18.7 million decrease in the change in the fair value of the contingent consideration.
Current wording
•Loss from operations decreased $420.8 million during the six months ended June 30, 2026, compared with the same period of 2025, primarily due to a $408.7 million decrease in operating expenses. Operating expenses of $78.4 million for the six months ended June 30, 2026 included litigation settlement expenses of $15.4 million. Operating expenses were partially offset by a $45.8 million gain on disposal of assets to Illumina Cambridge Limited due to the Asset Sale. See Note 2. Financial Instruments in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information. Operating expenses of $487.1 million during the six months ended June 30, 2025 included $382.4 million of costs incurred in connection with the restructuring and strategic shift, which primarily included $359.3 million of accelerated amortization of acquired intangibles, $15.0 million of impairment charges, and $4.8 million of employee separation costs, partially offset by an $18.7 million decrease in the change in the fair value of the contingent consideration.
Previous wording
•Cash, cash equivalents, and short-term investments were $276.0 million at March 31, 2026, which represents a 1% decrease compared to the balance at December 31, 2025. During the three months ended March 31, 2026 we received net cash proceeds of approximately $48.1 million in conjunction with the gain on disposal of assets discussed above.
Current wording
•Cash, cash equivalents, and investments were $236.9 million at June 30, 2026, which represents a 15% decrease compared to the balance at December 31, 2025. During the six months ended June 30, 2026 we received net cash proceeds of approximately $48.1 million in conjunction with the gain on disposal of assets discussed above. We also paid $8.0 million related to the settlement agreement with Personal Genomics of Taiwan, Inc. (“PGI”). See Note 3. Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details regarding the settlement with PGI.
Previous wording
We believe that demand for our instruments (particularly Vega) remains constrained due to, among other reasons, the funding environment in the United States, contributing to elongated sales cycles, or in certain cases, customers not placing instrument orders. Additionally, sales cycles have been and continue to be impacted by, among other reasons, continued capital funding constraints in academic and research markets, procurement timing considerations, and longer adoption cycles among new customers, which have affected the timing of certain instrument orders. We believe these challenges will impact second quarter 2026 revenue with approximately single-digit to low double-digit sequential revenue growth. However, we believe that revenues will be greater in the back half of 2026, which we expect will be driven by continued clinical adoption, SPRQ-Nx consumable growth, and revenue associated with the Basecamp Research program, which we believe will start to materialize in the second and third quarters of 2026. We are continuing development of a high-throughput, HiFi sequencer, which we believe could launch in 2027.
Current wording
We believe that demand for our instruments (particularly Vega) remains constrained due to, among other reasons, the funding environment in the United States, contributing to elongated sales cycles, or in certain cases, customers not placing instrument orders. Additionally, sales cycles have been and continue to be impacted by, among other reasons, continued capital funding constraints in academic and research markets, procurement timing considerations, and longer adoption cycles among new customers, which have affected the timing of certain instrument orders. However, we believe that revenues will be greater in the second half of 2026, which we expect will be driven by continued clinical adoption, SPRQ-Nx consumable growth, and revenue associated with the Basecamp Research program.
Previous wording
Macroeconomic dynamics that have impacted and could continue to impact the Company include rising inflation, higher computing component costs, specifically memory, which may result in material cost pressures and supply constraints in future periods, geopolitical tensions, including recent conflicts in the Middle East (including Iran), volatile capital markets, tariffs, uncertainty in the United States related to NIH and academic funding, and fluctuating exchange rates. These factors could continue to impact our revenues and results of
Current wording
Macroeconomic dynamics that have impacted and could continue to impact the Company include rising inflation, higher computing component costs, specifically memory, which has resulted in material cost pressures and supply constraints, geopolitical tensions, including recent conflicts in the Middle East (including Iran), volatile capital markets, tariffs, uncertainty in the United States related to NIH and academic funding, and fluctuating exchange rates. These factors could continue to impact our revenues and results of operations in future periods; however, the magnitude and duration of these impacts is highly uncertain and inherently unpredictable.
Previous wording
On an ongoing basis, we evaluate our significant estimates, including those related to the valuation of goodwill, indefinite-lived and finite-lived assets. However, these estimates could change in future periods based on events or changes in circumstances, which could result in material future impairment charges. We recorded $15.0 million of impairment charges during the three months ended March 31, 2025. See additional discussion below in Results of Operations, as well as Note 3. Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information. Additionally, refer to the Critical Accounting Policies and Estimates section of our 2025 Annual Report for further discussion on the Company's asset impairment assessments.
Current wording
On an ongoing basis, we evaluate our significant estimates, including those related to the valuation of goodwill, indefinite-lived and finite-lived assets. However, these estimates could change in future periods based on events or changes in circumstances, which could result in material future impairment charges. We recorded $15.0 million of impairment charges during the six months ended June 30, 2025. See additional discussion below in Results of Operations, as well as Note 3. Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information. Additionally, refer to the Critical Accounting Policies and Estimates section of our 2025 Annual Report for further discussion on the Company's asset impairment assessments.
Previous wording
Product revenue increased $0.4 million, or 1%, primarily due to an increase of $1.7 million, or 9%, in consumable revenue, partially offset by a decrease of $1.3 million, or 12%, in instrument revenue.
Current wording
Product revenue decreased $0.1 million primarily due to a decrease of $1.3 million, or 9%, in instrument revenue partially offset by an increase of $1.2 million, or 6%, in consumable revenue.
Previous wording
The increase in consumables revenue for the first quarter of 2026 was primarily driven by higher Revio consumables sales, reflecting the continued expansion of the Revio instrument installed base, partially offset by some customers delaying consumable shipments in anticipation of the SPRQ-Nx commercial launch.
Current wording
The increase in consumables revenue for the second quarter of 2026 was primarily driven by higher Revio consumables sales, reflecting the continued expansion of the Revio instrument installed base. We also launched SPRQ-Nx during the second quarter of 2026.
Previous wording
Shipments of Vega consumables also contributed modestly during the period, and we anticipate increased contributions as customers continue ramping usage of the Vega platform and the installed base expands.
Current wording
Shipments of Vega consumables also contributed to the increase in consumables revenue during the period, and we anticipate increased contributions as customers continue ramping usage of the Vega platform and the installed base expands.
Previous wording
Looking ahead, we expect continued growth in consumables revenue as adoption of the Revio and Vega platforms expands, along with increased demand in connection with the expected commercial launch of SPRQ-Nx kits in May 2026. This anticipated growth reflects increasing instrument placements, improving consumable utilization, broadening addressable applications for our platforms, and further expanding adoption across our research, clinical and commercial customers.
Current wording
Looking ahead, we expect continued growth in consumables revenue as Revio and Vega installed bases continue to grow, along with increased demand in connection with the recent launch of SPRQ-Nx. This anticipated growth reflects increasing instrument placements, improving consumable utilization, broadening addressable applications for our platforms, and further expanding adoption across our research, clinical and commercial customers.
Previous wording
Instrument revenue decreased for the first quarter of 2026, primarily due to lower selling prices, including with respect to our Vega promotional pricing through the end of the first quarter. Sales of Revio systems increased—15 units compared to 12 units in the same quarter of 2025. Sales of Vega systems decreased—27 units compared to 28 units in the same quarter of 2025. We expect that instrument revenue may fluctuate quarter-to-quarter based on timing of customer purchasing decisions, sales mix, promotional activities, and funding dynamics.
Current wording
Sales of Vega systems decreased for the second quarter of 2026. We sold 26 units compared to 38 units in the same quarter of 2025. Sales of Revio systems increased with 20 units sold compared to 15 units in the same quarter of 2025.
Previous wording
Cost of Revenue and Gross Profit (Loss)
Current wording
Cost of Revenue and Gross Profit
Previous wording
Total cost of revenue decreased $14.2 million, or 37%, in the first quarter of 2026 compared to the same quarter of 2025. We recorded approximately $12.0 million of restructuring charges during the three months ended March 31, 2025. Total cost of revenue included share-based compensation expense of $0.6 million and $1.2 million during the first quarter of 2026 and 2025, respectively.
Current wording
Total cost of revenue increased $1.3 million, or 5%, in the second quarter of 2026 compared to the same quarter of 2025. Total cost of revenue included share-based compensation expense of $0.7 million and $0.9 million during the second quarter of 2026 and 2025, respectively.
Previous wording
We recorded a gross profit of $12.8 million during the three months ended March 31, 2026 compared to a gross loss of $1.4 million during the same period of 2025. The change was driven primarily by relatively flat revenue and the lower cost of revenue described above. During the first quarter of 2026, gross margin was affected by higher computing component costs, specifically memory, inventory adjustments, certain incremental warranty charges, as well as a limited time Vega promotion, which resulted in lower first quarter average selling prices for the product. We expect Vega average selling prices to normalize in the second quarter of 2026. While higher consumables mix and the introduction of SPRQ-Nx remain important drivers of margin expansion, rising compute costs will temper the pace of margin improvement in the near term. Gross margins may be affected by product mix, manufacturing efficiencies, changes in warranty costs, average selling price fluctuations, including promotional pricing, future product launches, changes to inventory reserves, costs of raw materials and computing costs, specifically memory, which may result in material cost pressures and supply constraints in future periods, and tariffs.
Current wording
Gross profit decreased $2.0 million, or 14%, during the second quarter of 2026 compared to the same period of 2025. The decrease was driven primarily by slightly lower revenue and the increase in cost of revenue described above. While higher consumables mix and the introduction of SPRQ-Nx remain important drivers of margin expansion, rising computing component costs will temper the pace of margin improvement in the near term. Gross margins may be affected by product mix, manufacturing efficiencies, changes in warranty costs, average selling price fluctuations, including promotional pricing, future product launches, changes to inventory reserves, costs of raw materials and increased computing component costs, specifically memory, which may result in material cost pressures and supply constraints in future periods, and tariffs.
Previous wording
Sales, general and administrative expense decreased by $9.0 million, or 22%, for the first quarter of 2026, compared to the same quarter of 2025. The decrease was primarily driven by decreases in personnel and related expenses, including share-based compensation. We also recognized approximately $4.8 million of restructuring charges during the first quarter of 2025. Sales, general, and administrative expense included share-based compensation expense of $4.6 million and $5.4 million during the first quarter of 2026 and 2025, respectively.
Current wording
Sales, general and administrative expense decreased by $2.8 million, or 8%, for the second quarter of 2026, compared to the same quarter of 2025. The decrease was primarily driven by lower personnel and related expenses, including share-based compensation. We also recorded $0.6 million of restructuring-related charges in the second quarter of 2025. Sales, general, and administrative expense included share-based compensation expense of $6.2 million and $7.7 million during the second quarter of 2026 and 2025, respectively. We anticipate sales, general, and administrative expense to decrease during the remainder of 2026 in connection with our recently announced expense reduction initiatives, primarily due to headcount reductions.
Previous wording
Interest expense for the first quarter of 2026 and 2025 was comprised of interest on the convertible senior notes.
Current wording
Interest expense for the second quarter of 2026 and 2025 was primarily comprised of interest on the convertible senior notes. Interest expense for the second quarter of 2026 also included interest related to the liability recorded for the license and settlement agreement with PGI.
Previous wording
Other income, net for the first quarter of 2026 decreased compared to the same quarter of 2025 primarily driven by lower investment income due to lower cash and investment balances.
Current wording
Other income, net for the second quarter of 2026 decreased compared to the same quarter of 2025 primarily driven by lower investment income due to lower cash and investment balances.
Previous wording
We recorded impairment charges of $15.0 million during the first quarter of 2025, related to in-process research and development (“IPR&D”). These charges resulted from an interim impairment assessment performed in response to identified indicators of impairment during the period. The impairment test concluded that the fair value of our IPR&D assets was $0. See Note 3. Balance Sheet Components in Part I, Item I of this Quarterly Report on Form 10-Q for further details.
Current wording
We recorded impairment charges of $15.0 million during the six months ended June 30, 2025, related to in-process research and development (“IPR&D”). These charges resulted from an interim impairment assessment performed in response to identified indicators of impairment during the period. The impairment test concluded that the carrying amount of our IPR&D assets exceeded their estimated fair value. See Note 3. Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Previous wording
In the first quarter of 2026, the Company entered into a license and settlement agreement with PGI in connection with the PGI Settlement. Under the fixed payment structure pursuant to the agreement, the Company paid PGI $8,000,000 in the second quarter of 2026, and will pay $5,000,000 in the first quarter of each of 2027, 2028 and 2029, with the payment in 2027 increasing by $1,000,000 if the Company’s 2026 revenue is at least $165,000,000 and another $1,000,000 if it is at least $180,000,000. See Note 3. Balance Sheet Components in Part I, Item I of this Quarterly Report on Form 10-Q for further details.
Current wording
In the first quarter of 2026, the Company entered into a license and settlement agreement with PGI in connection with the PGI Settlement. Under the fixed payment structure pursuant to the agreement, the Company paid PGI $8.0 million in the second quarter of 2026, and will pay $5.0 million in the first quarter of each of 2027, 2028 and 2029, with the payment in 2027 increasing by $1.0 million if the Company’s 2026 revenue is at least $165.0 million and another $1.0 million if it is at least $180.0 million. See Note 3. Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.
Previous wording
On January 30, 2026, we completed a disposition of certain assets to Illumina Cambridge Limited (the “Buyer”) pursuant to an Asset Purchase Agreement dated January 30, 2026. Under the agreement, Buyer acquired certain intellectual property and other assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies. In consideration, Buyer paid $50.0 million in cash, assumed certain liabilities, and granted us a non-exclusive license to certain intellectual property included in the purchased assets. During the first quarter of 2026, in connection with the Asset Sale, Buyer paid, at our direction, 4% of the net cash proceeds to the former equity holders of Apton Biosystems, Inc. in connection with the waiver of remaining milestone obligations from our August 2023 acquisition of Apton. As a result, we received approximately $48.1 million in net cash proceeds from the Asset Sale. In connection with the transaction, the Company incurred transaction costs of $2.3 million in the first quarter of 2026 that are offset against the gain on disposal of assets on our condensed consolidated statements of operations and comprehensive loss. See Note 2. Financial Instruments in Part I, Item I of this Quarterly Report on Form 10-Q for further details.
Current wording
On January 30, 2026, we completed a disposition of certain assets to Illumina Cambridge Limited (the “Buyer”) pursuant to an Asset Purchase Agreement dated January 30, 2026. Under the agreement, Buyer acquired certain intellectual property and other assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies. In consideration, Buyer paid $50.0 million in cash, assumed certain liabilities, and granted us a non-exclusive license to certain intellectual property included in the purchased assets. During the first quarter of 2026, in connection with the Asset Sale, Buyer paid, at our direction, 4% of the net cash proceeds to the former equity holders of Apton Biosystems, Inc. ("Apton") in connection with the waiver of remaining milestone obligations from our August 2023 acquisition of Apton. As a result, we received approximately $48.1 million in net cash proceeds from the Asset Sale. In connection with the transaction, the Company incurred transaction costs of $2.3 million in the first quarter of 2026 that are offset against the gain on disposal of assets on our condensed consolidated statements of operations and comprehensive loss. See Note 2. Financial Instruments in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.
Previous wording
Amortization of acquired intangible assets included in operating expenses for the first quarter of 2026 and 2025 consists of amortization expense attributable to acquired intangible assets that are not directly related to sales generating activities. Amortization of acquired intangible assets for the first quarter of 2025 included $359.3 million of accelerated amortization recorded during the first quarter of 2025 which was related to developed technology from the 2021 Omniome acquisition, reflecting our revised estimate that the asset will no longer generate economic benefit.
Current wording
Amortization of acquired intangible assets included in operating expenses during the six months ended June 30, 2025 included $359.3 million of accelerated amortization related to developed technology from the 2021 Omniome, Inc. acquisition, reflecting our revised estimate that the asset will no longer generate economic benefit beyond March 31, 2025.
Previous wording
As of March 31, 2026, we had cash, cash equivalents and investments of $276.0 million compared to $279.5 million as of December 31, 2025. We believe that our existing cash, cash equivalents and investments will be sufficient to fund our projected operating requirements beyond the next 12 months from the date of filing of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
Current wording
As of June 30, 2026, we had cash, cash equivalents and investments of $236.9 million compared to $279.5 million as of December 31, 2025. We believe that our existing cash, cash equivalents and investments will be sufficient to fund our projected operating requirements beyond the next 12 months from the date of filing of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.
Previous wording
We approved and implemented certain efficiency and expense reduction initiatives during 2025 and 2024. These expense reduction initiatives included workforce reductions, facilities downsizing and a refined pipeline of development programs.
Current wording
We estimate that we will incur aggregate pre-tax charges of approximately $2.0 million in connection with the Reduction in Force, primarily consisting of severance payments, employee benefits, outplacement services and related costs. We expect that the Reduction in Force will be completed and that these charges will be incurred in the third quarter of 2026. We also approved and implemented certain efficiency and expense reduction initiatives during 2025 and 2024. These expense reduction initiatives included workforce reductions, facilities downsizing and a refined pipeline of development programs.
Previous wording
In the first quarter of 2026, the Company entered into a license and settlement agreement with PGI in connection with the PGI Settlement. Under the fixed payment structure pursuant to the agreement, the Company paid PGI $8,000,000 in the second quarter of 2026, and will pay $5,000,000 in the first quarter of each of 2027, 2028 and 2029, with the payment in 2027 increasing by $1,000,000 if the Company’s 2026 revenue is at least $165,000,000 and another $1,000,000 if it is at least $180,000,000. See Note 3. Balance Sheet Components in Part I, Item I of this Quarterly Report on Form 10-Q for further details.
Current wording
In the first quarter of 2026, the Company entered into a license and settlement agreement with PGI in connection with the PGI Settlement. Under the fixed payment structure pursuant to the agreement, the Company paid PGI $8.0 million in the second quarter of 2026, and will pay $5.0 million in the first quarter of each of 2027, 2028 and 2029, with the payment in 2027 increasing by $1.0 million if the Company’s 2026 revenue is at least $165.0 million and another $1.0 million if it is at least $180.0 million. See Note 3. Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.
Previous wording
Cash used in operating activities during the three months ended March 31, 2026 of $44.7 million was due primarily to an $8.3 million net loss that included non-cash items such as amortization of acquired intangible assets of $1.0 million, share-based compensation of $4.5 million, depreciation expense of $2.2 million, and $3.2 million in net changes to operating assets and liabilities, which were offset by a $48.1 million gain on disposal of assets. Cash flow impact from changes in net operating assets and liabilities was primarily driven by a decrease in accounts receivable as well as an increase in other liabilities. These sources of cash were partially offset by an increase in inventory and a decrease in accounts payable.
Current wording
Cash used in operating activities during the six months ended June 30, 2026 of $80.3 million was due primarily to a $53.0 million net loss that included non-cash items such as share-based compensation of $13.7 million, depreciation expense of $4.5 million, and amortization of acquired intangible assets of $2.0 million, which were offset by a $48.1 million gain on disposal of assets and $2.8 million in net changes to operating assets and liabilities. Cash flow impact from changes in net operating assets and liabilities was primarily driven by an increase in inventory and a decrease in accrued expenses. These uses of cash were partially offset by increases in other liabilities and operating lease liabilities as well as a decrease in accounts receivable.
Previous wording
Cash used in operating activities during the three months ended March 31, 2025 of $44.1 million was due primarily to a $426.1 million net loss that included non-cash items such as amortization of acquired intangible assets of $366.4 million, an impairment charge of $15.0 million, share-based compensation of $9.2 million, $7.7 million of inventory adjustments, depreciation expense of $5.1 million, and $2.4 million in net changes to operating assets and liabilities, partially offset by an $18.7 million decrease in the change in the fair value of the contingent consideration. Cash flow impact from changes in net operating assets and liabilities was primarily driven by an increase in accrued expenses partially offset by an increase in accounts receivable.
Current wording
Cash used in operating activities during the six months ended June 30, 2025 of $73.4 million was due primarily to a $468.0 million net loss that included non-cash items such as amortization of acquired intangible assets of $367.4 million, an impairment charge of $15.0 million, share-based compensation of $21.1 million, $8.5 million of inventory adjustments, depreciation expense of $7.8 million, and $6.3 million in net changes to operating assets and liabilities, partially offset by an $18.7 million decrease in the change in the fair value of the contingent consideration. Cash flow impact from changes in net operating assets and liabilities was primarily driven by increases in accounts receivable and inventory, as well as decreases in accrued expenses and operating lease liabilities. These uses of cash were partially offset by a decrease in prepaid expenses and other assets.
Previous wording
Our investing activities consist primarily of capital expenditures and investment purchases, sales, and maturities.
Current wording
Our investing activities consist primarily of capital expenditures and investment purchases and maturities.
Previous wording
Cash provided by investing activities during the three months ended March 31, 2026 was primarily from $48.3 million of maturities of investments and $50.0 million of gross proceeds from a disposal of assets partially offset by $52.4 million of purchases of investments and $5.0 million in purchases of intangible assets.
Current wording
Cash provided by investing activities during the six months ended June 30, 2026 was primarily from $97.0 million of maturities of investments and $50.0 million of gross proceeds from a disposal of assets partially offset by $57.5 million of purchases of investments, $5.0 million of purchases of intangible assets, and $4.6 million of purchases of property and equipment.
Previous wording
Cash provided by investing activities during the three months ended March 31, 2025 was primarily from $113.4 million of maturities of investments partially offset by $61.8 million of purchases of investments and $5.0 million in purchases of intangible assets.
Current wording
Cash provided by investing activities during the six months ended June 30, 2025, was primarily from $195.4 million of maturities of investments partially offset by $118.0 million of purchases of investments and $5.0 million in purchases of intangible assets.
Previous wording
Cash provided by financing activities during the three months ended March 31, 2026 resulted from $1.4 million of proceeds from the issuance of common stock through our equity compensation plans.
Current wording
Cash provided by financing activities during the six months ended June 30, 2026 resulted from $1.7 million of proceeds from the issuance of common stock through our equity compensation plans.
Previous wording
Cash provided by financing activities during the three months ended March 31, 2025 resulted from $2.0 million from the issuance of common stock through our equity compensation plans.
Current wording
Cash provided by financing activities during the six months ended June 30, 2025 resulted from $2.0 million from the issuance of common stock through our equity compensation plans.
Previous wording
We presented our contractual obligations at December 31, 2025 in our 2025 Annual Report. There were no material changes outside the ordinary course of business to our contractual obligations during the three months ended March 31, 2026.
Current wording
We presented our contractual obligations at December 31, 2025 in our 2025 Annual Report. There were no material changes outside the ordinary course of business to our contractual obligations during the six months ended June 30, 2026.
Previous wording
There have been no changes to our significant accounting policies as disclosed in our 2025 Annual Report.
Current wording
There have been no changes to our significant accounting policies and estimates as disclosed in our 2025 Annual Report.
Previous wording
We also enter and have entered into indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law. In addition, we may have obligations to hold harmless and indemnify third parties involved with our fundraising efforts and their respective affiliates, directors, officers, employees, agents or other representatives against any and all losses, claims, damages and liabilities related to claims arising against such parties pursuant to the terms of agreements entered into between us and such third parties in connection with such fundraising efforts. To the extent that such indemnification obligations apply to the lawsuits described in Note 6. Commitments and Contingencies in Part I, Item 1 of this Quarterly Report on Form 10-Q, any associated expenses incurred are included within the related accrued litigation expense amounts. No additional liability associated with such indemnification agreements has been recorded as of March 31, 2026.
Current wording
We also enter and have entered into indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law. In addition, we may have obligations to hold harmless and indemnify third parties involved with our fundraising efforts and their respective affiliates, directors, officers, employees, agents or other representatives against any and all losses, claims, damages and liabilities related to claims arising against such parties pursuant to the terms of agreements entered into between us and such third parties in connection with such fundraising efforts. To the extent that such indemnification obligations apply to the lawsuits described in Note 6. Commitments and Contingencies in Part I, Item 1 of this Quarterly Report on Form 10-Q, any associated expenses incurred are included within the related accrued litigation expense
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
We expect that instrument revenue may fluctuate quarter-to-quarter based on timing of customer purchasing decisions, sales mix, promotional activities, and funding dynamics.
Current report — wording carried from elsewhere
Amortization of acquired intangible assets included in operating expenses for the second quarter of 2026 and 2025 consists of amortization expense attributable to acquired intangible assets that are not directly related to sales generating activities.
Current report — wording carried from elsewhere
The increase in consumables revenue during the six months ended June 30, 2026 was primarily driven by higher Revio consumables sales, reflecting the continued expansion of the Revio instrument installed base. We also launched SPRQ-Nx during the second quarter of 2026.
Current report — wording carried from elsewhere
Shipments of Vega consumables also contributed to the increase in consumables revenue during the period, and we anticipate increased contributions as customers continue ramping usage of the Vega platform and the installed base expands.
Current report — wording carried from elsewhere
Looking ahead, we expect continued growth in consumables revenue as Revio and Vega installed bases continue to grow, along with increased demand in connection with the recent launch of SPRQ-Nx. This anticipated growth reflects increasing instrument placements, improving consumable utilization, broadening addressable applications for our platforms, and further expanding adoption across our research, clinical and commercial customers.
Current report — wording carried from elsewhere
We expect that instrument revenue may fluctuate quarter-to-quarter based on timing of customer purchasing decisions, sales mix, promotional activities, and funding dynamics.
Current report — wording carried from elsewhere
Cost of Revenue and Gross Profit
Current report — wording carried from elsewhere
Gross profit increased $12.2 million, or 91%, during the six months ended June 30, 2026, compared to the same period of 2025 in line with the decrease in total cost of revenue described above and relatively flat revenue. While higher consumables mix and the introduction of SPRQ-Nx remain important drivers of margin expansion, rising computing component costs will temper the pace of margin improvement in the near term. Gross margins may be affected by product mix, manufacturing efficiencies, changes in warranty costs, average selling price fluctuations, including promotional pricing, future product launches, changes to inventory reserves, costs of raw materials and increased computing component costs, specifically memory, which may result in material cost pressures and supply constraints in future periods, and tariffs.
Current report — wording carried from elsewhere
Amortization of acquired intangible assets included in operating expenses for the six months ended June 30, 2026 and 2025 consists of amortization expense attributable to acquired intangible assets that are not directly related to sales generating activities.
Current report — wording carried from elsewhere
Other income, net during the six months ended June 30, 2026 decreased compared to the same period of 2025 primarily driven by lower investment income due to lower cash and investment balances.
Current report — wording carried from elsewhere
amounts. No additional liability associated with such indemnification agreements has been recorded as of June 30, 2026.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
operations in future periods; however, the magnitude and duration of these impacts is highly uncertain and inherently unpredictable.
Previous report — wording carried elsewhere
During the first quarter of 2026, in connection with the Asset Sale, Buyer paid at our direction 4% of the net proceeds from the Purchase Price to the former equity holders of Apton related to the waiver of all remaining milestone obligations associated with our purchase of Apton in August 2023. See Note 2. Financial Instruments in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.