Genomics company Pacific Biosciences of California (NASDAQ: PACB) fell short of the market’s revenue expectations in Q1 CY2026, with sales flat year on year at $37.18 million. Its non-GAAP loss of $0.12 per share was 8.7% above analysts’ consensus estimates.
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PacBio (PACB) Q1 CY2026 Highlights:
- Revenue: $37.18 million vs analyst estimates of $40 million (flat year on year, 7.1% miss)
- Adjusted EPS: -$0.12 vs analyst estimates of -$0.13 (8.7% beat)
- Adjusted EBITDA: -$8.17 million (-22% margin, 80.3% year-on-year growth)
- Operating Margin: -22.5%, up from -1,155% in the same quarter last year
- Market Capitalization: $530.9 million
“We continue to see increasing clinical adoption of HiFi which contributed to another record quarter for consumable revenue. However, instrument revenue, particularly Vega, was lower than we had expected," said Christian Henry, President and Chief Executive Officer.
Company Overview
Pioneering what scientists call "HiFi long-read sequencing," recognized as Nature Methods' method of the year for 2022, Pacific Biosciences (NASDAQ: PACB) develops advanced DNA sequencing systems that enable scientists and researchers to analyze genomes with unprecedented accuracy and completeness.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, PacBio’s 11.6% annualized revenue growth over the last five years was decent. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. PacBio’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 10.6% over the last two years. 
This quarter, PacBio’s $37.18 million of revenue was flat year on year, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 12.6% over the next 12 months, an improvement versus the last two years. This projection is noteworthy and suggests its newer products and services will spur better top-line performance.
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Adjusted Operating Margin
PacBio’s high expenses have contributed to an average adjusted operating margin of negative 148% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.
On the plus side, PacBio’s adjusted operating margin rose by 85.4 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 68 percentage points on a two-year basis.
This quarter, PacBio generated a negative 22.5% adjusted operating margin.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Although PacBio’s full-year earnings are still negative, it reduced its losses and improved its EPS by 10.7% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.
In Q1, PacBio reported adjusted EPS of negative $0.12, up from negative $0.15 in the same quarter last year. This print beat analysts’ estimates by 8.7%. Over the next 12 months, Wall Street expects PacBio’s full-year EPS of negative $0.49 to stay about the same.
Key Takeaways from PacBio’s Q1 Results
It was good to see PacBio beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed. Overall, this was a weaker quarter. The stock traded down 3.3% to $1.60 immediately after reporting.
PacBio underperformed this quarter, but does that create an opportunity to invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
