- Earnings call transcript Q3 2022

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Operator

Hello, and welcome to the PacBio Third Quarter Fiscal Year 2022 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would like now to turn the conference over to Mr. Investor of Director Friedman, Relations. Todd Please go ahead.

Todd Friedman

on and Conference and Call. afternoon, outlining available financial be on welcome which copy a to Earnings XXXX the discussing will we Quarter the Third results call, Earlier is release a of PacBio press Good today’s today, Investor’s today issued www.pacb.com, we Chief as and at website Exchange on our Kim, are Henry, X-K and Form Susan me President Christian of Officer; Officer. section or available Financial website Executive Commission www.sec.gov. at furnished on Securities Chief With the

Onso that I today’s forward-looking timeframe. Before like predictions, intentions, regarding we begin, system would statements Revio others, including we to progress, making in remind be their and you plans, expectations, expectations guidance, on commercialization will estimates, regarding call, including statements, our

our differ. with obligation update understand recent uncertainties as except SEC, or could and law. these the on materially place cause or including that those uncertainties to results to forward-looking because not risks, assumptions, refer We in differ they most press could any discussed, file we XX-K risks the to forms commercializing XX-Q better actual cause forward-looking statements those that should in We undue documents our you to are recent from and that disclaim results statements developing subject You and inherent the new and products. including to projected and release our revise actual to required by reliance

benchmark earnings and to Reconciliations externally financial performance performance non-GAAP competitors. are financial combined between to GAAP During compare Management in the with call, tables results we non-GAAP information presented plans against US and certain release. our strategic relative provide on also within will measures, our useful GAAP and forecasts measures, basis. information non-GAAP our present believes that financial a US

the to note the audio or completion is our Investors change made materially live on today’s statements the differ electing shortly the will addition, that cautioned for after website In replay that call. available are after section audio replay being forward-looking call. Investor’s today's use call on and be may recorded the of of call please

after question that we hosting that one the follow-up Finally, be prepared question, and to analysts Christian. question-and-answer now remarks. can ask to one limit queue. please our accommodate everybody themselves turn so a call We will we I the in over will session

Christian Henry

us Good today business our Thanks as quarter discuss joining third afternoon, for results we everybody. highlights. and

Before XX. I New Investor remind begin our my we first everyone in with are to Day like November on City remarks, hosting prepared I'd that York

event XXXX, ago in Conference commercial of Society of results, product financial Q&A. find as the more shared the it in today's I'll to to in the Los be aspects our section outlined strategy our we When will in commentary we quarter of for two walk quarter. plenty during You course, there through financials discuss of always, then first of Angeles, two Susan On our the at on activity off our company will third I quarterly can will detail and, time Investors about then Human the Then more joined I'll September I provide for American the out website. we some weeks and call, announcements recap Genetics for our growth. hand important

strategy. the could two two cost, First, with is understanding our groundbreaking Revio higher well and we significantly on long-read develop need on a needed demonstrated for that more capabilities these multiomic are of at we to endeavor, we on biology question since our new solution and throughput they we that we ASHG provide that develop customers biological answer. sequencers, believe XXst, way of to our our to offered the so Onso, that achieving becoming depending we platform are new the right that customers a to At multiomic trying second, announcements critical October lower aspects much

long-read zero-mode times many sequencer. of Sequel the million current Revio has our IIe. smart up a waveguides run core expected of as redesigned IIe. our cells At simultaneously. Revio, the to XX provide four then the single million to Sequel more the output utilizes with start Revio Revio Let's DNA to XX three than XXX of is enable next-generation to every is smart molecules data XXm sequencer, sequencing times as in cell, up completely flagship more which than

indels, only up As in run. a gigabases important also XXX provides HiFi researchers SMBs data structural of and but variation result, the and single accurate see not to system epigenetic enabling to highly data, every

the time in customer in Revio the run, XX% ability reduced consumables fewer the was designed an been to just has by mind, existing with load hours. next to is the Finally, progress. run requiring while and run including XX

to completeness enables poised per Revio genome to hosted impressions year start This to the compute makes our instrument HiFi. other is In Revio coverage, gigabase genome over take days lower This had XX of from ASHG, sequencing latest three Feedback genome for DeepConsensus whole approximately fantastic. Revio more XXX course we it data leverages conference, easier providers. calling at projects over been relative and potential demoed a $XX the addition, One transform coverage million less booth media, price. the hundreds of system genome. At customers face We thousands power all sequence the in a can than just of with at at per we and human tenfold Google large-scale customers than with increase than interpreting at to dollars over directly $X,XXX on the the NVIDIA instrument. customers several of social And enhances the genomes list at has board. per packed or XXx GAAP XX-fold times. per the believe over from on more On market. X,XXX year up GPUs the platform genomes accuracy and

around we're customer the path to shipped IIe the an we this seminal pleased to X,XXXth Revio, customers launch the another place booked upgrade customer since about field." genomics Sequel actively placed from launch will "It XXXX. with And changer system in paradigm game IIx." recently several said, dozens RS excitement its already With Illumina several orders has multisystem customers discussing surpassed are researcher programs the It's and orders from important "The multiunit order a support clearly have more. launched as transition platform sequencer shifting who comments included, have of We've it, most in Some one a PacBio loyalty already moment that in sequencer medical asked a and GA the to calling their genome sequencer Revio. be to since

others few From past of accelerate enabled some decade, assembling past hundreds of sequencing are their the long-reads the this pan-genomes the and to by the to biology most instrument combined telomere-to-telomere can't. Over planet, allowing over XXX unmatched. PacBio approximately our largest, complex on publications that have belief customers view years research of HiFi in ways genomes length reinforce to them accuracy

power With point next phase to price are attractive and of thrilled we Revio, of usher the throughput, PacBio. in the

differentiated on beta more begin accuracy to incredible technology, consistently and XX announced short-read last Revio, Onso over the sequencing scale-up beta chemistry. field. the started accurate partners. Omniome is will in sequencer SBB finalize program chemistries. systems performance based acquired and Agriscience, by complete Corteva the shipping their Onso's we the we QXX be units feedback other beta forward The Weill the has Once accurate their a we In partners Internally, development on we highly we've is year. sequencer feedback will announced who program into Broad recently the our through to highly we Institute, a valuable is more which binding levels, at Onso, activities. using months. incorporate include than mid-throughput to look few believe and demonstrated the the due we've accuracy commenced, providing partners the These We times Cornell beta of these than addition product, and the to next commercial

first to expect shipping Onso in of We XXXX. the half begin commercially

all on a for the the we've these Revio of announcements, IIe. demand that that understand Sequel financial so will suspended As our impact have we can result guidance

our Onso. Revio November Investor share we targets expect you and longer-term update XX, at However, and to on financial to response Day on our market

revenue, region. our product anticipated to results. IIe changes in Let's lab instrument than funding and that issues purchases by a foreign that a lower driving of move believe exchange deferring X% in was the rates quarter, drivers of the QX due We particularly launch on Sequel million X% Other representing with this in purchases anticipation included delays. instrument customers deferred of greater customers decline We new year-over-year Americas in in was and impact $XX.X the sales. shortfall reported space driven decline. to some The decline their we

migrate to opportunities current We expect deferred of many the Revio. and to

the we into However, advanced II’s lower IIe lower with reduced up going demand Since the XXXX. the of upgrade, we've storage XX%. to and fourth the Sequel and data ago, sustained, time anticipate IIe nearly needs significantly quarter launched for Sequel analysis platform albeit secondary four by years into

every and DNA application SARS-CoV-X seamlessly that transcriptomics. protocols released Additionally, reduced and new sequencing, input kits fivefold single-cell calling methylation launched requirements run, we integrated and on AAV, workflows several for

remains robust long-read an a customers sequencer looking IIe. price sequencing. It and entry do lower Sequel at around an built attractive we've throughput ecosystem extremely see, can to reliable you As for powerful

single-cell we the expression what to to and an IIe's steadily catalyze customers to onboarded the about XX-fold its expand research. XXx wave XX% kit and also over customers potential next genetic being customer consumable know sales. about technology we workflow our because the XX% third new million, we further Iso-Seq Despite have we still component users pull-through launched allows IIe fewer attracting will of record customers. for sequencing increase in Although Outside shipments our approximately understanding of instrument EMEA to consumables report MAS-Seq compared continue in our increased new cell increase us the them record a as in PacBio little quarters, length. than new of of their library. of customers $XX.X leverages to with the economic, perhaps were In quarter XX single-cell achieve transcriptomics new utilization full success we are gives to booked in an is quarter, of short-read variation recently customers. that at in We In Revio so kit year-over-year. new throughput excited platforms, and most PacBio. past sequencing shipped pleased we genomics disease, regular and game-changing throughput, This China in even instrument of increase saw confidence improvements instruments were forecasting, isoforms the base Sequel customers limitations sequentially and four important Sequel single new

transcriptomics panel to in customers years, deliver technology include to including go-to sequencing cost response spinal, in single-cell medically throughput improvement MAS-Seq, we An of with Twist provided HiFi improvement combination understanding XXX HiFi in are and a target de be is tied will past methods, muscular that, of Revio, collaboration by to investigator broadening regions been coupled gold genes difficult for diseases. he that told Alzheimer's, XX-fold Bioscience. off-the-shelf panels university clear the a next that turnkey major Over collaborations we've with atrophy, solution using become the couple launch, long-read the the principal In believe that long-read facto nearly this from standard for transcriptomics. release panels of and few the our sequence the With biology. cardiovascular genes to in These short-read will us research." the enrichment relevant in example believes "It with sequencing years, the covering is

tandem target characterize in to and Genetic such many of ALS, offering across we neurological also human linked and to regions in genes. pharmacogenomic sequence genomics. tandem TRGT, repeat Huntington's across to genome XX status By the genome. has the tool, or of Further, customers can also address panels repeat targeted whole as panel X. disorders workflows, capture been the are repeats launched a We addition scientists to disease set broader to tandem genotyping and intellectual another allow fully we methylation variation providing Fragile

which the applications, IIes Sequel one-third in again to for product commercial delivered to additional QX a population of large in their represented sequencing highlights. over project multiple revenue, we In customers in our germline States. United Turning support genome human our scale

launch Middle shipped competitive to we large in the multiple Sequel a planning a in IIes scale Additionally, population to a program. customer East deal

Revio transition to year expect to volume. the customer accelerated to We sample next this over

use their for Diagnostics, who on some As Avero Korea, mentioned, DTC control thousands could new its provide continue platforms to purchased And microbiome DNA Link offering year. expect PacBio to system previously HiFi disease Sequel like and we customers test Sequel of scale potentially tens a sequencing to to Sequel sequence to quarter the SARS-CoV-X in to agency IIe the plans a Korea customer per viral IIe the a prevention begin and XX,XXX genomes. in who support and IIe purchased tests third of sequencing

also applications to Sequel of to quarter, addition We the this the customers the expect sequencing continue third with shipped area. to IIe AAV several IIes use Sequel in in application

accomplished many of direction delighted PacBio's hear product our had I'd road University, Jody in platforms and feedback what our Dr. and These critical Dr. Lastly, past created Shendure be genomics SAB's in the and to for new first to of I newly believe enthusiasm Euan was provide We applications. renowned like and week, chemistry the diverse welcome Ashley this map. and will Stanford leaders members Advisory can meeting they of Dr. to from the the University Washington. Board. Puglisi biology and Jay Scientific

the that, detail. with about results to in Susan hand call over Susan? our talk to I'll financial Now, more

Susan Kim

you, Thank Christian.

million XXXX. in Sequel IIe $XX.X we $XX.X the Entrant in revenue revenue II in We systems represented quarter million the growing base September quarter XXXX. XXXX, third of product and from third Sequel As of a the X% XX of the of discussed, XXX QX, to third in and as third reported quarter million $XX.X quarter XX% was $XX.X which of million, systems a XX, from the in service decrease installed during XXXX. delivered of decrease IIe

partially quarter base million $XX.X $XXX,XXX. third and the third approximately consumables pull-through approximately Sequel the PacBio. of of was on to auxiliary being ramp pleased sample has nitrogen the a per total a ramp to with consumable Annualized revenue improve, supply in by customers reasons of older which quarter be offset quarter instrument and the our one an rest was on customers consumables. time, II newer Revio installed PacBio represented other global Revenue in system of consumables. related year China impact for new note, lack will systems a IIe new revenue dealing in IIe last Of continued grew from we're certain to the third and Sequel to million with of with installation, requirement platform. noted constraints at slower was the II XX% time in in third Turning record other and to delays. equipment say and the $XX.X the chain had of from Consumable our quarter not and XX%

$X.X purchases grew XXXX, of to and of Finally, launch. region funding sample million compared IIe orders lower space service customers $X.X with take ramp. due primarily limitations in Sequel sequencer million due the quarter utilization delayed base. Americas in newer shortages and The as longer as $XX.X lower our to also placements the quarter other as million to perspective, anticipation of to XX% certain to customers revenue potential regional the of a and reflecting revenue new experienced customers third lab dealt quarter From deferred declined compared driven a installed XXXX, the by third growing third

prior of revenue grew post The Asia-Pacific growth nearly a consumables. region quarter million lockdown. the posted five primarily by offset X% its instrument the years, partially highest in lower recovery ASPs $X.X in year, consumable over driven China in

with regain prior currency XX% as lower FX, XXXX. which plant fluctuations and a sterling in quarter, headwind animal region to most record a EMEA region sequencing The X% and large approximately the by of XX% The Finally, represented pound euro affected compared driving project momentum. posted driving a consumables $X.X particularly revenue the QX period, to the compared was year was million in headwind.

$XX.X XX%. gross third a margin GAAP XXXX, of of represented profit the Moving down the of million quarter in gross P&L.

non-GAAP third a non-GAAP $XX.X Excluding of were $XX.X and the a XXXX, represented quarter change of lower partially $XX.X interim third million intangible the increase quarter by the were million a a in of expenses intangible quarter third of value non-GAAP of the operating excluding continued quarter instrument gross non-GAAP amortization in This million, of operating The the operating GAAP driven profit amortization fair higher assets, quarter expenses the XX%, margin offset of to XX% $X.X lower of or of year. consideration million partially of consumable of year, XXXX by gross of profit assets, volumes. million. represents XX% full in last $XX.X and year quarter $XX.X was operating in from last to from Omniome reflecting third million last headcount. gross of expenses compared decrease volumes increased expenses ASPs, and third compared

to quarter $XX.X of the terms end with compared in year. million, quarter stock-based the non-cash employees expenses the quarter at XXX third In third headcount, last ended million of included compensation we $XX.X compared to the total Operating in XXX XXXX. of of

in XXXX of compensation. expenses, GAAP $X.XX was of quarter the million merger-related non-GAAP $XX.X Excluding XXXX third net operating share. per the of quarter million, or expenses included $XX.X loss non-cash third in stock-based

amortization acquired of of $XX.X per GAAP Excluding $XX.X compared net of million, contingent change in a net loss $X.XX value to and net representing million million, share. non-GAAP share, $XX.X consideration, loss intangibles fair was of per a and $X.XX income representing non-GAAP

XXXX. of the the $XX.X million the our the XX at to third with million quarter days. to cash of the with we $XX.X XXXX, reflects turning $XXX of and in increased shipments. compared compared to representing at $XXX compared reflecting second in $XX.X turns the $XX.X and days of fill million, inventory third second Now, end in the of of inventory X.X XXXX, quarter XX quarter receivable at investments The the million million of unrestricted second third inventory DSO of increase quarter DSO with quarter quarter sheet, IIe a end of representing Sequel X.X on purchases balances end inventory, lower-than-expected balance million, with ended Accounts revenue reflecting coupled a in inventory turns. primarily the The decreased with

result financial as the announcement guidance. XXth We high-throughput long-read sequencing with quarter that, we turn Day we guidance, you our XXXX expected to look financial to additional Christian. system prior on withdrew to back will next week providing call where our XXXX, connecting our of a at to of plan longer-range outlook. in details York, With the on first latest forward ship Moving related of Revio, to I in New our Investor Christian? all November

Christian Henry

to Thank exciting months field the We're we away from PacBio in for It's genomics. outlook you the time financial an our see to will Revio hope the first now Day. products, Operator? begin. we you, all week in operator. into long-read represents at dive Investor what and strategy, We technological sequencing. the the next as our believe of Susan. call inaugural milestones been to and markets, shipments from back biggest deeper I turn

Operator

very you much. Thank

first will question Morgan Savant question-and-answer We ahead. session. Tejas Please from now comes Today's go Instructions] be with [Operator Stanley.

Tejas Savant

Good Hey guys. evening.

Christian for Can early a XX the particularly high Revio? customer headwinds? worsening the and point for of months, price sort just maybe over And here one perspective So, degree you of see just in some trade-in feedback the you how on relatively and macro on you. discounting some play next FX the light out share the of

Christian Henry

Sure. Thanks Tejas.

what lot -- a high a didn't So, price pushback point. to be on get you on call I really the of

scale. with getting and sequencing than and the a long-read genomes opportunity at value I and G $XX people associated $XX, lower think for list incredible at saw that

hardly any pushback really all. didn't I at So, get

in quarter that do about have the were and XXXX very there's bought third the transition, just put thoughtful and of end as that always -- that we any we at bought with customers people or and so give get customer them Now, loyalty Revio out some aggressive available for Revio them. power pretty opportunity is until of get IIe discounts would a that still and to into account Sequel an the to broadly together them product

system. you're bought tried so basically really did the said, if in loyalty a it bought we recognize was And discount what to that get you XXXX, in XXXX, to if newness you bigger than the of going

far, we scheme. had that much discounting And so on pushback haven't

as less discounting but -- for I the program. of very very and see so not that I a And going base a we what trade-ins, long good see do that to -- be was loyalty market the customers IIe, the but discounts, possible. recently but so run, not upgrade quickly you're we clear. the larger you will installed the that the base, a The with is It's to than to most loyalty strategy discount want price. because that trade-in enable discounts installed will think happy we And for in Sequel to could trade, bought as get Revio we're go that part to

Tejas Savant

Revio? consumables color line it on in on can mid curious like fair low you down theoretical some then winding down of year these the about XXX,XXX to one it. you in share Got visibility to helpful. consumables of in Sequel line, IIe? at for you But multiple the just the legacy that have think pull-through I’m about flight. studies much particularly there you given that, the sort single-digit on platforms? the sure That's of thinking moment. are of a the some And consumables, How a as at not the that coverage then and the of it larger on XXx side maximum saw you Sequel already think are on how other ramp as Is And the

Christian Henry

go -- obviously, Yes. will to on how about right. yes, It probably just backwards, depend people think coverage. I've that's

and some projects, genetics, on if large doing talking population as about what that with you coverage you high about on the it of understanding, and been long-read kind of year HiFi XXx. depends talking We as XXx. anything, using found, scale of some And we your anywhere One relative could this go we've metrics. really traditional But to application. work XXx is customers from as lot things XXx need the see doing a you're

talk think kind the to right about run multiple even you Sequel When being what's XXx way the you to opportunity, think time. that think in about an I about paradigm. XX-hour perspective, you math. scale do max can think it. of But IIe, It's increase a relative that's could you a So about said, of from the that pull-through a

probably that you do weeks can a for the enough to system multiply per just price you math price out. with to apply expect you're -- so want amount with probably for But I Revio, that continued list discount we IIe and the here, down, already. of the and way we've we will use up you be figure to we respect Sequel had used and the start a will XX whatever have using can quite And have be to -- genome and metric incredible ramp scaling interest you then to think and from give a long be will suspect year we will an

their we will upgrading have would like to in of that specifically, half. kind but than consumables what look of in systems. too And customers that the the down lot year ramp a early ramp might probably It's gauge occur so front more down of half back next

never things a and shipped people we more is product world that's color the a get And samples quite nuanced to I and launched Investor frankly. new next before. why scale-up And then it's week of are how on quarters that as a we'll so here their imagining because And try detailed they so that could the excited about right, provide projects, thing people at and for the do be Revio, convert few to Because some thing Day, about. see going we playing of talk on think out. itself bit to one you're that's kind to

Tejas Savant

for on one Omniome. one last it. me Got And

Just that on the price that you've inside in past question. prop talked about sort of per value

If consumable some volume enabling thoughts you do on expect of the think some inflect offset higher will can depth lower the that means you sample of sort accuracy pull-through, what of there? sort that just that about coverage, share to for of dynamic you enough or

Christian Henry

customer they so think clearly pull-through, the in I throughput, to volume a are that deeper system. kind there. for what Well, that it's platform it other the with kind it use game impact doing do If on will early think I way will to result if sequencing. will they even sample to variants – And coverage, of today, really because it's more but But the out to how too that of find big going they result more with just a or do that depend they have in decides find the use can't to samples. any in they that less the want

to way, in so samples and system. the coming pointing us means opportunity And for platform that a the unique either area Onso it we're the

as so can. will to those actual of how provide we'll color leverage as accuracy. And it closer to we'll get our get shipments, where major in we be things to see then try as one And we much customers this advancement

Tejas Savant

Very helpful. time. the Thanks, Appreciate guys.

Christian Henry

Yep.

Operator

The go Julia question Qin from comes next JPMorgan. Please with ahead.

Julia Qin

afternoon. Hi. Thanks taking for question. Good a

placed of so I between plant genome, human your applications, Christian, the expectations? animal? mix So what's And you does Revio, you wondering of a the compare orders on regarding how that different was share if looking book PropSeek, instrument terms far? in the color like number could bit more versus And the order

Christian Henry

at completeness, so weeks had week showed last just ago demand that's picture, at a busy a We new But it's in some about Investor bearing to million going how and several the is themselves future of me I is of far honestly the to the or that more whole be multiunit there share the think, I messages details impressions our for this demand And whole of sales already sequencing, a company. team incredible and paradigm that's really – And the be us of much not next new just even at think to I've see. was share the those truth. away, conference, much ASHG seeing curve paradigm will all to – it then, facts new resonate. indication those early you mean, to for and expectations all for out. seem the that's how setting seem there long-read orders on demand trajectory of – When we has $XX media Day. we extremely probably about do expectations really is think the be which blown was building books. I my Well, two all have to We – said, – week honest, as the social the details I'm today.

Julia Qin

Got for the of residual an as about demand Great. as should idea you'll still And mix how should platform, how forward? think and to going that of long-read Is here? the versus then legacy Sequel maybe instrument thinking customers? mix keep know the easier the you about point entry IIe we it. demand And we be the terms Revio new in legacy

Christian Henry

Julia. Yes. That's a good question,

So platform, still get of like prepared and you power there remarks, a some things be color frankly, give you in -- to nice where little get quite applications great scientific some we will using on we and, IIe isoform fact get there's the that on a the the adequate Sequel really sequencing, Maf really can the -- kit you even tried results. you the AAV nice quite

for platform And so, applications sell will though over IIe be predominant -- to become do probably there as useful. consistent expect, kind talk as we about expect of Revio And And A, Sequel demand about out far now do the I we IIe level are the going be but We in kind that to of where right XXXX. platform. throughout very that's want will that of smaller Sequel XXXX.

all and to and but for platform robust the it going definitely it big existing Revio. a do, and all who happy customers it, in things market keep push there is of our are sure we're doing certainly demand needs the using So making to is strong keep supporting

Julia Qin

for about Got term? lastly Revio helpful. And it. near in ramp how talk the could you about respectively? That's your manufacturing also think me, from capacity to the And and

Christian Henry

Yes.

of agenda question I the Day items come. would knew at one operations, actually, because is So, Investor this

our Goloubef, what Mike will of of But managing give Manufacturing lot with executives. more much Operations assured years, over and that so detail a of SVP next on this we've experience platform of the had can team And you week. transitions be is, you

for so scaling up Revio are both can demand. the And that appropriately so, meet we ready getting and Onso, we

quarter. doing of and very and into words, need ready we in smooth supply the have market units, we launch. ship hard we've a there. the it's other getting very, they want want at do worked robust for sure And from However, broad really when sure what on beginning, and all we We In likely chain bolus they ship we demand necessarily get will scale make start then to the to commercialization. of don't make to the a one are

one about sequencing Julia. think companies emerging to that's now, that's I to I of probably want over, the key competitive of we meet demand. And particularly have the it say all the all right advantages

Julia Qin

Got very you you. Thank Helpful. much.

Christian Henry

Yes.

Operator

ahead. from The Dan question with next go Cowen. Please, comes Brennan

Dan Brennan

questions. for Thanks to next forward taking Look week. Great. the

here mean not it reasonable to dramatically saying point. annualized pull-through, lot starting obviously, seems the Just could or product? Sequel potential you're And juncture as that early II, pull-through. using upside starts of on over at actual theoretical the just base what a regular the certainly pull-through times it with two gate, is several of we'll I at running Christian, and onset, next back sounds the but on out obviously question like But the installed like sounds like approximate seeing higher threefold, the to Tejas' the more $X week. I hear a this Sequel million

Christian Henry

that Dan, not think, I today. we're to going we on comment Well, --

number much product of what time like mix. change portion. look larger on will going a run because see But the relative it's pull-through a an nor today's to things where over incredible being become us call, And to seven gives to a in story smart that not hours on have actually we speculate opportunity. the that think is gross to a XX to I unfold. MAS terms days really revenue four week mix exactly margin driving able going the will time, consumables cells really, Obviously, important we're day, at how

afford that us -- learned what course consumables doubt that a least no confidence we've think doubt the you, -- kind no career, the watch a I demands in others short to handle. pull-through can going they and to reads see projects come from there and nail elasticity is. can at samples, I've new -- new they going you spots. long market transitioning that long-read of reads they for the before have that that at an come you the point. also is such to are economics there's of, down several from can They're is have scale two there's whole that transitioning the for for over Revio gives that can inflection But demand And learned to quarters new for my because they're economics from picture of

plenty that for think us transitions. how to there's samples world of see the and I go in So, we'll after,

beginning, launch, we quarters the out It's at said that you when helps that and four you Dan. how a point. -- at not the right look right say, metric. let's doing as little, that's really really Hopefully, from You're are

Dan Brennan

kind point expanded base playbook they it installed one now really factor, have maybe throw and with penetrate to the then we SX opportunities And old number maybe RS because in Yes, definitely. SX the placements twofold, terms have SX look into not new the and and if of that at like box to SX, the one But the and that other you maybe can couldn't tapping linear, occurred out of what a just like the say happened. the really when each and you're to a at and new at pull-through where even SX. you in long a guess new you're successive you that's of occurred, I whole you installed by company. we RS, talk but base are for markets by growth window about maybe a the way look the trajectory saying, that how fair of like is -- it's the the

Christian Henry

Yes.

different for I think do for that is playbook, new a -- think reasons. sure, it couple of I a that

spent the to of that out as new in past. tenure underestimated. what prepared the is the here done part has reason that whole my hit commercial can't The a the I first is opposed company first that infrastructure market immediately to we think building And be

-- first got really multiproduct a this a laid consistent of you and and demonstrate the could was very build is portfolio of another with from strategy strategy power build commercial the part everyone is that this infrastructure, well just that out this day that. so of others I of here, I've the all HiFi, for All then collaborate with

much organization the past. And market us happened been. so to that bigger give leverage what's do in itself is to than fully I ever a that than stronger the it's so commercial expect the also And I inflection think

where the structural research translate in are into be completeness then durability. and all long-term get particular, research which interest so and to -- disease HiFi is really so actual to accurate because and clinical the And and and that benefits variation it in translational important provides going of we application, all of epigenetics,

And you've so changed playbook, the do I to think significantly. yeah, think we've change I the – pretty got company because

Dan Brennan

Great. Thanks, Christian.

Christian Henry

Yeah.

Operator

go The Kyle Please Cantor. ahead. next question with comes from Mikson

Kyle Mikson

to Canaccord. and it's Thanks with going Kyle first I questions. the Mikson from just for quarter new the products. Hey, guess, then starting fourth guys the

So just or XQ that XXXX like you on on to qualitative comments, any Christian, any convert in or will customers XQ, funnel full even XQ, like were have Revio signal like to converted think that your order guidance.

the delayed do much is quarter, fourth purchases? you the shortfall, how it a don't for it you expect be instrument live I for that strong, macro sure. will there So of be could versus mean be slight if guess, pressures could

Christian Henry

question, Great Kyle. Yeah.

– Revio, capital that, back – how today trying of Revio. did if think purchase I find our the has the say they to weeks is people can start And it I see quarter look are the so capital to fourth the does find ago. can would they many additional versus additional going that two I'll funnel with everyone kind or

the real stage were our a to I so ready there We – was quoting They to not an macro QX, at soon still think in demand all it's rates for they and whether I the we lot. venture. to lots close expect quotes night When and There IIe predominant Sequel IIe, obviously of but a as – fourth that backdrop. already, which about got testament Sequel across close quarter we I gone out that line in confident have lots go there think already. kind we demand effectively were the we're – pretty Revio. novo, pretty every quarter, Revio of the there. we're commercial and that of we'll funnel QX, got and is negative of have And cool. as de a is we group. IIe, on we're have this base inflation is for a go get We've new pretty still interest still in under impact Sequel seeing and as tiers still a And up have But level operations line doing

out really that's Americas – ready that. was that products could to their QX, would the were early knew felt announce around for and manage we the their so wasn't more going for on time are that of it as day all whisper in horizon, pointed expensive So principally and new a wasn't in challenged getting we them. the give get that to leasing for we quarter great in remarks, budgets – very to if products Europe strongly be macroeconomic and people had continues Susan just us people in even for her in that kind next systems, QX QX that, to new We come, and year.

of behind was a to we lot do if strategy QX, how could. figuring So out in there this

are. And so that's we where

it in still your but of circuitous question I macro a is be going think overhanging kind a I factors way, to of us. combo answered pretty

spot there But about there's well think demand bright I talked I back-up. question Revio I next strong one do strong no into China don't is in is consumables APAC, year. open about that. think to really definitely see it. starting and for We

that So we'll see how goes.

Kyle Mikson

since like I the two for Revio there of that Christian. you demand, then think kind Okay. like on was base? and lot respect and to the help mentioned of announcement, get you legacy Revio has for I of how does excitement II door And last of types better. Onso, Sequel at like just that how Thanks dynamic with user you a the And guess, the just unlocked of beyond APAC, kind can Onso. about weeks was for That the in synergies with great, kind talk the that. customer Based the

previously? you point of for have wouldn't been touch a platform customers that So are users any incremental like like of obvious Onso these a

Christian Henry

part I we're take population mean, our that think specific the can space. reach that everything. game a ever it's our be bigger generally should bit contemplated across are even than being of that either be now in thought should of little underway a examples I broadening of just if scale the I at Wow, footprint basically, PacBio pretty or or But we'd Revio and they be all. a programs maybe

turnarounds, points, of translational faster continued So disease, this and research say, area. really gives more exciting think kind better that in do one price would better, that's rare I I data. undiagnosed

pretty two And that Revio, think so IIe the Sequel we opportunity. We'll Revio, customers Onso see program plays that to a we have, that in and people lot and into shipments. it's And can think I cool then about how IIe. Onso long don't excitement I our what's Sequel But view us definitely And And that get get there. lost company systems wow, actually larger of because actually we best-of-breed that's We've of on a itself out customers. it's that's there and some short-term think actual I a at bundle, had The list of, have closer opportunities in best-of-breed it But a than that. can one Revio, get had some that. the is you price, as so intriguing in that from ask see about interest gives things. still about bundle. there's interest if a capabilities Revo, reads. of I competitors' also real cheaper they have -- I lot the short is solutions

Kyle Mikson

Perfect.

Christian. it. Okay. Thanks, Appreciate

Christian Henry

Kyle. you, Thank Yes.

Operator

conference back This Todd concludes the remarks. to like session. turn for to our closing any would Friedman question-and-answer I over

Todd Friedman

Thank you.

New website and of seeing us. section today, replay Thank a joining York. call our you. you at available for Thank this reminder, week Day a will to – you website. the we our investor be in our This look of call on forward concludes As Investor next

Operator

concluded. attending for now you has Thank conference today's presentation. The

You may now disconnect.

Pacific Biosciences of California (PACB) 7 Nov 222022 Q3 Earnings call transcript