Company: PACB
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001299130-25-000102
Chunk: 241

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 241
---
 2025 compared with the same quarter of 2024 primarily due to $7.7 million of charges for excess inventory due to our updated strategy to prioritize long-read technology and decrease in demand for short-read related inventory partially offset by lower per unit costs to manufacture our products. Total cost of revenue included share-based compensation expense of $1.2 million and $2.1 million during the first quarter of 2025 and 2024, respectively.

We recorded a gross loss of $1.4 million for the first quarter of 2025, compared to a gross profit of $11.3 million in the same quarter of 2024, primarily driven by the increase in cost of revenue from restructuring activities and the decrease in revenue described above. See Note 5. Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about restructuring activities. Gross margins may be affected by product mix, manufacturing efficiencies, warranty cost improvements, average selling price fluctuations, future product launches, changes to inventory reserves, costs of raw materials and tariffs.

Research and Development Expense

Research and development expense decreased by $14.4 million, or 33%, for the first quarter of 2025, compared to the same quarter of 2024. The decrease was primarily driven by a decrease in personnel and related expenses due to prior year restructuring activities, as well as the transition of launched products from development to commercialization. Research and development expense included share-based compensation expense of $2.6 million and $5.8 million during the first quarter of 2025 and 2024, respectively.

Sales, General, and Administrative Expense

Sales, general and administrative expense decreased by $3.6 million, or 8%, for the first quarter of 2025, compared to the same quarter of 2024. The decrease was primarily due to a net decrease in personnel and related expenses due to restructuring activities. Sales, general, and administrative expense included share-based compensation expense of $5.4 million and $11.6 million during the first quarter of 2025 and 2024, respectively.

Impairment Charges

We identified indicators of impairment during the first quarter of 2025 and performed an interim impairment assessment. Impairment testing demonstrated that the carrying value of our in-process research and development ("IPR&D") exceeded its estimated fair value. As a result, we recorded $15.0 million of impairment charges for the first quarter of 2025. See Note 3