Genomics company Pacific Biosciences of California (NASDAQ:PACB) fell short of the market’s revenue expectations in Q2 CY2026, with sales falling 1.9% year on year to $39.01 million. Its non-GAAP loss of $0.14 per share was 10.4% below analysts’ consensus estimates.
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PacBio (PACB) Q2 CY2026 Highlights:
- Revenue: $39.01 million vs analyst estimates of $39.91 million (1.9% year-on-year decline, 2.3% miss)
- Adjusted EPS: -$0.14 vs analyst expectations of -$0.13 (10.4% miss)
- Operating Margin: -114%, down from -113% in the same quarter last year
- Market Capitalization: $447.3 million
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
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, PacBio’s 8.5% 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.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. PacBio’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 8.2% over the last two years. 
This quarter, PacBio missed Wall Street’s estimates and reported a rather uninspiring 1.9% year-on-year revenue decline, generating $39.01 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 14.2% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will fuel 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 151% 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 86.4 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 51.2 percentage points on a two-year basis.
PacBio’s adjusted operating margin was negative 114% this quarter.
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 11.6% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.
In Q2, PacBio reported adjusted EPS of negative $0.14, down from negative $0.13 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects PacBio to improve its earnings losses. Analysts forecast its full-year EPS will improve from negative $0.50 to negative $0.48.
Key Takeaways from PacBio’s Q2 Results
We struggled to find many positives in these results. Its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 1.1% to $1.28 immediately following the results.
The latest quarter from PacBio’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).