Pacific Biosciences of California Inc.

05/08/2026 | Press release | Distributed by Public on 05/08/2026 15:28

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with (i) our unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and (ii) our 2025 Annual Report filed with the U.S. Securities and Exchange Commission, or the SEC, on February 25, 2026. This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. The words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "might," "plans," "potential," "predicts," "projects," "seeks," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those discussed in the section entitled "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q, and you should not place undue reliance on our forward-looking statements. We do not assume any obligation to update any forward-looking statements. In preparing this Management's Discussion and Analysis ("MD&A"), we presume that readers have access to and have read the MD&A in our 2025 Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K.
Our MD&A is organized into the following sections:
•Overview and Outlook
•Results of Operations
•Liquidity and Capital Resources
•Critical Accounting Policies and Estimates
•Recent Accounting Pronouncements
•Off Balance Sheet Arrangements
OVERVIEW AND OUTLOOK
About PacBio
We are a premier life science technology company that designs, develops, and manufactures advanced sequencing solutions that enable scientists and clinical researchers to improve their understanding of the genome and ultimately, resolve genetically complex problems.
Our products and technology, which primarily consist of our HiFi long-read sequencing systems, address a broad set of applications including human germline sequencing, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications.
Our focus is on creating some of the world's most advanced sequencing systems to provide our customers with the most complete and accurate view of genomes, transcriptomes, and epigenomes.
Our customers include academic and governmental research institutions, commercial testing and service laboratories, genome centers, public health labs, hospitals and clinical research institutes, contract research organizations ("CROs"), pharmaceutical companies, and agricultural companies.
Q1 Fiscal 2026 Form 10-Q
Strategic Objectives
Our 2026 main objectives are to grow revenue and expand gross margins through the following five activities. These initiatives are designed to improve the economics of HiFi sequencing, expand adoption across clinical and research markets, and drive durable growth across our platform portfolio.
•Accelerate samples onto the Revio platform through SPRQ-Nx chemistry and application kits. SPRQ-Nx is designed to lower the cost of sequencing and improve sequencing efficiency, which we believe will support higher throughput, increased sample volumes, and broader adoption of HiFi sequencing in large-scale research studies and clinical applications.
•Expand the capabilities of the Vega benchtop platform to broaden our market reach. We plan to enable faster run times and enhanced user experience through software improvements, which are intended to support broader adoption and improve the overall economics of HiFi sequencing.
•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.
•Advance data-driven interpretation through scalable HiFi datasets and analytics. We are focused on leveraging the accuracy of HiFi sequencing and growing datasets to support advanced data analysis and AI-assisted interpretation approaches. Collaborative initiatives such as the HiFi Solves Global Consortium are designed to aggregate large, well-characterized HiFi datasets, which we believe can support improved understanding of complex genetic variation and disease biology while maintaining expert oversight.
•Invest in future product launches to drive platform innovation. We continue to develop sequencing solutions designed to increase throughput, simplify workflows, lower the cost to sequence a genome, and enhance downstream data analysis and interpretation capabilities, which we believe will allow us to address a larger portion of the market.
We continue to believe that with the capabilities of our technology, we can be a market leader in whole-genome clinical sequencing. Leading institutions have adopted our products to study rare and inherited disease. We believe the market opportunity for clinical sequencing is significant and could drive substantial revenue growth for the Company. We plan to continue to pursue partner collaborations where the technologies being developed or applications being considered extend beyond whole-genome clinical sequencing. Collaborative arrangements add to the awareness of our products and service offerings and may drive new applications for use of our technology.
Q1 Fiscal 2026 Form 10-Q
Financial Overview
Key highlights of the three months ended March 31, 2026 consolidated financial results include the following:
Revenue of
Gross profit of
Operating loss of
Cash, cash equivalents, and investments of
$37.2 M
$12.8 M
$8.4 M
$276.0 M
compared to $37.2 M during the same period of 2025
compared to gross loss of $1.4 M during the same period of 2025
compared to $428.9 M during the same period of 2025
compared to $279.5 M at December 31, 2025
•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.
•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.
•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.
•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.
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.
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
Q1 Fiscal 2026 Form 10-Q
operations in future periods; however, the magnitude and duration of these impacts is highly uncertain and inherently unpredictable.
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.
See the Risk Factors section for further discussion.
RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 2026 and 2025
Three Months Ended March 31,
(In thousands, except percentages)
2026 2025 $ Change % Change
Revenue:
Product revenue $ 31,534 $ 31,113 $ 421 1 %
Service and other revenue 5,644 6,040 (396) (7 %)
Total revenue 37,178 37,153 25 - %
Cost of Revenue:
Cost of product revenue 19,972 26,333 (6,361) (24 %)
Cost of service and other revenue 4,182 3,778 404 11 %
Amortization of acquired intangible assets
183 4,345 (4,162) (96 %)
Loss on purchase commitment
- 4,068 (4,068) (100 %)
Total cost of revenue 24,337 38,524 (14,187) (37 %)
Gross profit (loss)
12,841 (1,371) 14,212 (1037 %)
Operating Expense:
Research and development 19,608 29,053 (9,445) (33) %
Sales, general and administrative 31,153 40,168 (9,015) (22) %
Impairment charges - 15,000 (15,000) (100) %
Settlement charges
15,400 - 15,400 -
Gain on disposal of assets (45,796) - (45,796) -
Amortization of acquired intangible assets 833 362,042 (361,209) (100) %
Change in fair value of contingent consideration - (18,700) 18,700 (100) %
Total operating expense 21,198 427,563 (406,365) (95 %)
Operating loss (8,357) (428,934) 420,577 (98) %
Interest expense (1,740) (1,737) (3) - %
Other income, net 2,006 4,294 (2,288) (53 %)
Loss before income taxes
(8,091) (426,377) 418,286 (98 %)
Income tax provision (benefit)
184 (302) 486 (161 %)
Net loss $ (8,275) $ (426,075) $ 417,800 (98 %)
Q1 Fiscal 2026 Form 10-Q
Revenue
Total Revenue
Total revenue was relatively flat for the first quarter of 2026 compared with the same quarter of 2025.
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.
Service and other revenue decreased $0.4 million, or 7%.
Instrument Revenue
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.
Consumables Revenue
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.
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.
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.
Q1 Fiscal 2026 Form 10-Q
Cost of Revenue and Gross Profit (Loss)
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.
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.
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.
Research and Development Expense
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.
Sales, General, and Administrative Expense
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.
Impairment Charges
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.
Q1 Fiscal 2026 Form 10-Q
Settlement Charges
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.
Gain on Disposal of Assets
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.
Amortization of Acquired Intangible Assets
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.
Change in Fair Value of Contingent Consideration
During the first quarter of 2025 we recognized a change in fair value of contingent consideration of $18.7 million, resulting in a contingent consideration liability of $0. This was primarily due to management's decision to cease development of the high-throughput short-read system, the associated changes in expected future revenues, and the requirement that the milestone event occur prior to the five-year anniversary of the acquisition closing date.
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.
Interest Expense
Interest expense for the first quarter of 2026 and 2025 was comprised of interest on the convertible senior notes.
Other Income, Net
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.
Q1 Fiscal 2026 Form 10-Q
LIQUIDITY AND CAPITAL RESOURCES
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.
Our primary sources of liquidity, other than our holdings of cash, cash equivalents, and investments, have primarily been through the issuance of debt or equity securities, together with cash flow from operating activities. We have historically incurred, and expect to continue to incur, operating losses and generate negative cash flows from operations on an annual basis, and as a result, we may require additional capital resources to execute our strategic initiatives to grow our business.
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.
PGI License and Settlement
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.
Convertible Senior Notes
As of March 31, 2026, we had outstanding approximately $200.0 million aggregate principal amount of our 2029 Notes and $441.0 million aggregate principal amount of our 2030 Notes. The 2029 Notes will mature on August 15, 2029, subject to earlier conversion, redemption or repurchase, including upon a fundamental change. The 2030 Notes will mature on December 15, 2030, subject to earlier conversion, redemption or repurchase, including upon a fundamental change. See Note 4. Convertible Senior Notes in Part I, Item I of this Quarterly Report on Form 10-Q for further details.
Our future capital requirements and the adequacy of our available funds will depend on many factors, including:
•our ability to successfully commercialize products and solutions that address customer needs;
•the pace of adoption of our products and our ability to obtain new customers in markets;
•the progress of our research and development programs and our ability to initiate or expand research programs;
•the effectiveness of our expense reduction initiatives;
•the purchase of patent licenses;
•the costs involved in preparing, filing, prosecuting, defending and enforcing intellectual property rights;
•our ability to manage manufacturing and production costs, especially costs related to the compute requirements of our instrument platforms, including purchase obligations; and
•the extent to which we engage in collaborations with partners and acquire other businesses or technologies.
Q1 Fiscal 2026 Form 10-Q
If economic, financial, business, or other factors adversely affect our ability to fund our projected operating cash requirements, we may be required to obtain funding through traditional or alternative sources of financing. Raising additional funds may result in dilution to existing shareholders. We cannot be certain that funds will be available on favorable terms, or at all. If we are required and unable to raise additional capital when desired, our business, operating results, and financial condition may be adversely affected. See our risk factor captioned "We are not cash flow positive and may not have sufficient cash to make required payments under the terms of our debt or fund our long-term planned operations" in Part II, Item 1A of this Quarterly Report on Form 10-Q for more information.
Cash Flow Summary
Three Months Ended March 31,
(In thousands) 2026 2025
Net cash used in operating activities $ (44,691) $ (44,056)
Net cash provided by investing activities 35,859 45,234
Net cash provided by financing activities 1,437 1,959
Net (decrease) increase in cash, cash equivalents, and restricted cash
$ (7,395) $ 3,137
Operating Activities
Our primary uses of cash in operating activities include the development of future products and product enhancements, manufacturing, and support functions related to our sales, general and administrative activities.
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.
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.
Investing Activities
Our investing activities consist primarily of capital expenditures and investment purchases, sales, and maturities.
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.
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.
Financing Activities
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.
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.
Q1 Fiscal 2026 Form 10-Q
Contractual Obligations
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.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with the rules and regulations of the SEC. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We evaluate our critical accounting policies and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no changes to our significant accounting policies as disclosed in our 2025 Annual Report.
RECENT ACCOUNTING PRONOUNCEMENTS
Please see Note 1. Organization and Significant Accounting Policies, subsection titled "Recent Accounting Pronouncements", in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding applicable recent accounting pronouncements.
OFF-BALANCE SHEET ARRANGEMENTS
As of March 31, 2026, we did not have any off-balance sheet arrangements.
In the ordinary course of business, we enter into standard indemnification arrangements. Pursuant to these arrangements, we indemnify, hold harmless, and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology, or from claims relating to our performance or non-performance under a contract, any defective products supplied by us, or any acts or omissions, or willful misconduct, committed by us or any of our employees, agents or representatives. The term of these indemnification agreements is generally perpetual after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these agreements is not determinable because it involves claims that may be made against us in future periods but have not yet been made. To date, we have not incurred costs to defend lawsuits or settle claims related to these indemnification agreements.
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.
Q1 Fiscal 2026 Form 10-Q
Pacific Biosciences of California Inc. published this content on May 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 08, 2026 at 21:28 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]