What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-08 · 155 added, 100 removed, 612 unchanged (29% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value) March 31,

(In thousands, except par value) June 30,

2026 December 31,

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Total assets $ 751,850 $ 784,083

Liabilities and Stockholders’ Equity

Liabilities and Stockholders’ (Deficit) Equity

Current liabilities

11 unchanged sentences

Commitments and contingencies

Stockholders’ equity

Stockholders’ (deficit) equity

Preferred stock, $ 0.001 par value:

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Authorized 1,000,000 shares;

issued and outstanding 310,487 and 301,956 shares at March 31, 2026 and December 31, 2025, respectively

issued and outstanding 310,810 and 301,956 shares at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital 2,715,297 2,699,892

1 unchanged sentence

Accumulated deficit ( 2,748,318 ) ( 2,695,302 )

Total stockholders’ equity 2,366 5,349

Total liabilities and stockholders’ equity $ 782,365 $ 784,083

Total stockholders’ (deficit) equity ( 33,213 ) 5,349

Total liabilities and stockholders’ (deficit) equity $ 751,850 $ 784,083

See accompanying notes to the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands, except per share amounts) 2026 2025 2026 2025

6 unchanged sentences

Amortization of acquired intangible assets

183 183 366 4,528

Loss on purchase commitment

Total cost of revenue 26,369 25,082 50,706 63,606

Gross profit (loss)

12,841 ( 1,371 )

Gross profit 12,638 14,684 25,479 13,313

Operating Expense:

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Income tax provision (benefit)

58 35 242 ( 267 )

Net loss ( 44,741 ) ( 41,930 ) ( 53,016 ) ( 468,005 )

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PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three Months Ended March 31, 2026

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY

Three Months Ended June 30, 2026

Common Stock Additional

Capital Accumulated

Comprehensive Loss Accumulated

Deficit Total

Stockholders'

(Deficit) Equity

(In thousands)

Shares Amount

Balance at March 31, 2026 310,487 $ 311 $ 2,705,779 $ ( 147 ) $ ( 2,703,577 ) $ 2,366

Net loss — — — — ( 44,741 ) ( 44,741 )

Other comprehensive loss

— — — ( 356 ) — ( 356 )

Issuance of common stock in conjunction with equity plans 323 — 255 — — 255

Share-based compensation expense — — 9,263 — — 9,263

Balance at June 30, 2026 310,810 $ 311 $ 2,715,297 $ ( 503 ) $ ( 2,748,318 ) $ ( 33,213 )

Six Months Ended June 30, 2026

Common Stock Additional

Capital Accumulated

Comprehensive Income (Loss)

1 unchanged sentence

Stockholders'

(Deficit) Equity

(In thousands)

6 unchanged sentences

Share-based compensation expense — — 13,722 — — 13,722

Balance at June 30, 2026 310,810 $ 311 $ 2,715,297 $ ( 503 ) $ ( 2,748,318 ) $ ( 33,213 )

Three Months Ended June 30, 2025

Common Stock Additional

Capital Accumulated

Comprehensive Income

Deficit Total

Stockholders'

(In thousands)

Shares Amount

Balance at March 31, 2025 300,041 $ 300 $ 2,665,958 $ 381 $ ( 2,575,001 ) $ 91,638

Three Months Ended March 31, 2025

Net loss — — — — ( 41,930 ) ( 41,930 )

Other comprehensive loss

— — — ( 114 ) — ( 114 )

Issuance of common stock in conjunction with equity plans 309 — — — — —

Share-based compensation expense — — 11,895 — — 11,895

Balance at June 30, 2025 300,350 $ 300 $ 2,677,853 $ 267 $ ( 2,616,931 ) $ 61,489

Six Months Ended June 30, 2025

Common Stock Additional

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Share-based compensation expense — — 21,096 — — 21,096

Balance at March 31, 2025 300,041 $ 300 $ 2,665,958 $ 381 $ ( 2,575,001 ) $ 91,638

Balance at June 30, 2025 300,350 $ 300 $ 2,677,853 $ 267 $ ( 2,616,931 ) $ 61,489

See accompanying notes to the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2026 2025

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Amortization of right-of-use assets 1,513 2,162

Amortization of patent license 516 —

Share-based compensation expense 13,722 21,096

1 unchanged sentence

Gain on disposal of assets ( 48,100 ) —

Accretion of discount and amortization of premium on marketable securities, net ( 295 ) ( 1,706 )

Accretion of discount on marketable securities, net ( 515 ) ( 2,982 )

Change in the estimated fair value of contingent consideration — ( 18,700 )

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Purchases of intangible assets ( 5,000 ) ( 5,000 )

Purchase of patent license ( 2,056 ) —

Purchases of investments ( 57,547 ) ( 117,992 )

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Net cash provided by financing activities 1,692 1,959

Net (decrease) increase in cash, cash equivalents, and restricted cash

( 7,395 ) 3,137

Net decrease in cash, cash equivalents, and restricted cash ( 2,652 ) ( 957 )

Cash, cash equivalents, and restricted cash at beginning of period 65,259 57,592

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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.

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, pharmaceutical companies, and agricultural companies.

References in this report to “PacBio,” “we,” “us,” the “Company,” and “our” refer to Pacific Biosciences of California, Inc.

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Our unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or U.S.

GAAP, as set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC.

GAAP and applicable rules and regulations of the SEC regarding interim financial reporting and do not contain all information that is included in the annual financial statements and notes thereto of the Company.

The unaudited condensed consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries.

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On an ongoing basis, we evaluate our significant estimates, including those relating to the valuation of inventory, fair value of contingent consideration, valuation of acquired intangible assets, useful lives assigned to finite-lived assets, asset impairment assessments, computation of provisions for income taxes, and valuations related to our convertible senior notes.

While the extent of the potential impact of current macroeconomic conditions on our business is highly uncertain, we considered information available related to assumptions and estimates used to determine the results reported and asset valuations as of March 31, 2026.

Actual results could differ materially from these estimates.

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We evaluate our available-for-sale investments in unrealized loss positions and assess whether the unrealized loss is credit-related.

Unrealized gains and losses that are not credit-related are recognized in accumulated other comprehensive income (loss) in stockholders’ equity.

Unrealized gains and losses that are not credit-related are recognized in accumulated other comprehensive income (loss) in stockholders’ (deficit) equity.

Realized gains and losses, expected credit losses, as well as interest income, on available-for-sale securities are reported in other income, net.

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We have the ability to hold, and do not intend to sell investments in unrealized loss positions before the recovery of their amortized cost bases.

Our investment portfolio at any point in time contains investments in cash deposits, money market funds, commercial paper, corporate debt securities and U.S.

Our investment portfolio at any point in time contains investments in cash deposits, money market funds, corporate debt securities and U.S.

government and agency securities with high credit ratings.

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Restricted cash is primarily comprised of cash pledged under letters of credit.

Concentration and Other Risks

Financial instruments that potentially subject us to credit risk consist principally of interest-bearing investments and trade receivables.

We maintain cash, cash equivalents, and investments with various major financial institutions.

The counterparties to the agreements relating to our investment securities consist of various major corporations, financial institutions, municipalities, and government agencies of high credit standing.

As of June 30, 2026, most of our cash was deposited with U.S.

financial institutions.

Our investment policy generally restricts the amount of credit exposure to any one issuer.

There is no limit to the percentage of the portfolio that may be maintained in securities issued by the U.S.

Treasury and U.S.

Government Agencies, or other securities fully backed by U.S.

Treasury or Government agencies.

We have not experienced significant credit losses from financial institutions.

We perform credit evaluations of our customers and generally require no collateral.

We have not experienced significant credit losses on our financial instruments or trade receivables to date, although our exposure to credit losses may increase if our customers are adversely affected by economic pressures or other customer-specific factors.

For the three and six months ended June 30, 2026 and 2025, no customer accounted for 10% or more of our total revenue.

As of June 30, 2026 and December 31, 2025, 42 % and 40 % of our accounts receivable were from domestic customers, respectively.

As of June 30, 2026 and December 31, 2025, no customer represented 10% or more of our net accounts receivable.

We currently purchase several key parts and components used in the manufacture of our products from a limited number of suppliers.

Generally, we have been able to obtain an adequate supply of such parts and components but in certain instances have incurred additional costs to secure a supply of constrained material.

An extended interruption in the supply of parts and components currently obtained from our suppliers could adversely affect our business and condensed consolidated financial statements.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In November 2024, the FASB issued ASU 2024-04, Debt—Debt With Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments .

This new standard clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt.

The standard was effective for us and we adopted prospectively beginning in the first quarter of 2026.

The adoption of this new standard did not have a material impact on the consolidated financial statements and related disclosures.

Accounting Pronouncements Pending Adoption

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Disaggregation of Income Statement Expenses .

This new standard requires a company to provide disaggregated disclosures, within the notes to the financial statements, of specified categories of expenses that are included in line items on the face of the income statement.

Q2 Fiscal 2026 Form 10-Q

standard requires a company to provide disaggregated disclosures, within the notes to the financial statements, of specified categories of expenses that are included in line items on the face of the income statement.

The standard will be effective for us beginning in 2027, and interim periods within 2028, with early adoption permitted.

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This new standard provides guidance on the recognition, measurement, and presentation of government grants.

The standard will be effective for us beginning in the first quarter of fiscal year 2029, with early adoption permitted, and can be applied using a modified prospective, modified retrospective or full

Q1 Fiscal 2026 Form 10-Q

retrospective transition approach.

We are currently evaluating the impact of ASU 2025-10 on the consolidated financial statements.

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Assets and liabilities measured at fair value are classified in their entirety based on the lowest level input that is significant to the fair value measurement.

Our assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability.

The carrying amount of our accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other liabilities, current, approximate fair value due to their short maturities.

Our assessment of the significance of a particular input to the entire

Q2 Fiscal 2026 Form 10-Q

fair value measurement requires management to make judgments and consider factors specific to the asset or liability.

The carrying amount of our accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other liabilities, current, approximate fair value due to their short maturities.

Assets Measured at Fair Value on a Recurring Basis

The following table sets forth the fair value of our financial assets that were measured on a recurring basis:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(In thousands)

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Cash and cash equivalents $ 61,003 $ — $ — $ 61,003 $ 60,496 $ 3,211 $ — $ 63,707

Commercial paper — — — — — — — —

Corporate debt securities — 20,203 — 20,203 — 23,250 — 23,250

4 unchanged sentences

Total assets measured at fair value $ 62,607 $ 175,870 $ — $ 238,477 $ 62,048 $ 219,010 $ — $ 281,058

During the three months ended March 31, 2026, there were no transfers between Level 1, Level 2, or Level 3 assets reported at fair value on a recurring basis, and our valuation techniques did not change compared to the prior year.

During the six months ended June 30, 2026, there were no transfers between Level 1, Level 2, or Level 3 assets reported at fair value on a recurring basis, and our valuation techniques did not change compared to the prior year.

Contingent Consideration

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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 M 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.

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.

The contingent consideration was accounted for as a liability at fair value, with changes during each reporting period recognized in our condensed consolidated statements of operations and comprehensive loss.

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Estimates and assumptions used in the Monte Carlo simulation include risk-adjusted forecasted revenues for products and services leveraging Apton's technology and an estimated credit spread.

As of March 31, 2025, primarily due to management's decision to cease development of the high-throughput short-read system, and the resulting changes in the expected future revenues, among other factors, and as the milestone event needed to occur prior to the five-year anniversary of the closing date of the acquisition, the estimated fair value of the contingent consideration liability was $ 0 , resulting in a change in fair value for the

Q2 Fiscal 2026 Form 10-Q

first quarter of 2025 of $ 18.7 million.

Changes to the fair value are recorded as change in fair value of contingent consideration in the condensed consolidated statements of operations and comprehensive loss.

Changes to the fair value are recorded as change in fair value of contingent consideration in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

Cash, Cash Equivalents, Restricted Cash, and Investments

The following tables summarize our cash, cash equivalents, restricted cash, and investments:

As of March 31, 2026

As of June 30, 2026

(In thousands)

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Long-term restricted cash $ 1,532 $ — $ — $ 1,532

The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of March 31, 2026:

The following table summarizes the contractual maturities of our available-for-sale investments as of June 30, 2026:

(In thousands)

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Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

Investment income included in other income, net on the condensed consolidated statements of operations and comprehensive loss was $ 2.5 million for the three months ended March 31, 2026 and $ 3.9 million for the three months ended March 31, 2025, respectively.

Q2 Fiscal 2026 Form 10-Q

Investment income included in other income, net on the condensed consolidated statements of operations and comprehensive loss was $ 2.2 million and $ 4.7 million for the three and six months ended June 30, 2026, respectively and $ 3.4 million and $ 7.3 million for the three and six months ended June 30, 2025, respectively.

BALANCE SHEET COMPONENTS

6 unchanged sentences

Finished goods 12,503 10,306

Inventory, gross 79,923 81,398

Inventory reserve ( 28,901 ) ( 32,113 )

Inventory, net $ 61,084 $ 49,285

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We completed our annual goodwill impairment assessment on April 1, 2026 and noted no impairment.

Based primarily on the decline in our stock price and overall market capitalization during the first quarter of 2025, driven in part by macroeconomic uncertainties, as well as our updated strategic plans and restructuring initiatives that prioritized accelerating adoption of HiFi sequencing and ceasing development of our high-throughput short-read platform, we concluded that changes to the timing and amount of expected future cash flows, among other factors, indicated that it was more likely than not that the fair value of the reporting unit was less than its carrying amount, requiring an interim goodwill impairment assessment.

As a result of the quantitative interim impairment test performed as of March 31, 2025, we concluded that there was no impairment, as the estimated fair value of the entity-level reporting unit exceeded the carrying value.

Changes in our future operating results, cash flows, share price, market capitalization or discount rates used when conducting future goodwill impairment tests could affect the implied fair value of goodwill and may result in additional impairment charges in the future.

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We have the following acquired finite-lived intangible assets:

As of March 31, 2026 As of December 31, 2025

As of June 30, 2026 As of December 31, 2025

(In thousands, except years)

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As a result of the change in estimate, during the three months ended March 31, 2025, we recognized accelerated amortization of $ 359.3 million within amortization of acquired intangible assets in operating expenses, reflecting our revised estimate that the asset will no longer generate economic benefit beyond March 31, 2025.

This expense had a negative impact on basic and diluted net loss per share of $ 1.21 for the three months ended March 31, 2025.

This expense had a negative impact on basic and diluted net loss per share of $ 1.20 for the six months ended June 30, 2025.

We review finite-lived intangible assets for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets.

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In connection with the settlement, PGI granted the Company a non-exclusive, royalty-free, worldwide license to certain patents and patent applications and provided a covenant not to sue the Company and its affiliates for patent infringement for a specified period.

Under the fixed payment structure, 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 .

Under the fixed payment structure, the Company paid PGI $ 8.0 million in the second quarter of 2026 and will pay $ 5.0 million in the first quarter of each of 2027, 2028 and 2029, with the payment in 2027 increasing by $ 1.0 million if the Company’s 2026 revenue is at least $ 165.0 million and another $ 1.0 million if it is at least $ 180.0 million.

The Company accounted for the transaction as a settlement of litigation combined with a license to patents.

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The remaining portion of the consideration was recorded as a litigation settlement charge.

The Company recorded $ 0.5 million of settlement charges within cost of product revenue in the condensed consolidated statements of operations and $ 15.4 million of settlement charges within operating expenses in the condensed consolidated statements of operations and comprehensive loss.

In the first quarter of 2026, the Company recorded $ 0.5 million of settlement charges within cost of product revenue in the condensed consolidated statements of operations and comprehensive loss and $ 15.4 million of settlement charges within operating expenses in the condensed consolidated statements of operations and comprehensive loss.

The Company recorded the liability at its present value of $ 21.4 million as of March 31, 2026.

1 unchanged sentence

The liability for the settlement obligation is classified between current and non-current portions based on the timing of expected payments.

As of March 31, 2026, $ 13.4 million is included in accrued expenses in the condensed consolidated balance sheets and $ 8.0 million is included in other liabilities, non-current in the condensed consolidated balance sheets.

As of June 30, 2026, $ 5.6 million is included in accrued expenses and $ 8.2 million is included in other liabilities, non-current in the condensed consolidated balance sheets.

Deferred Revenue

As of March 31, 2026, we had a total of $ 19.9 million of deferred revenue, $ 16.3 million of which was recorded as deferred revenue, current, and $ 3.6 million of which was recorded as deferred revenue, non-current, which primarily relates to deferred service contract revenues and is scheduled to be recognized in the next five years .

Revenue recorded in the three months ended March 31, 2026 includes $ 5.0 million that was included in deferred revenue as of December 31, 2025.

As of June 30, 2026, we had a total of $ 19.4 million of deferred revenue, $ 16.1 million of which was recorded as deferred revenue, current, and $ 3.3 million of which was recorded as deferred revenue, non-current, which primarily relates to deferred service contract revenues and is scheduled to be recognized in the next six years .

Revenue recorded in the three and six months ended June 30, 2026 includes $ 3.7 million and $ 8.7 million, respectively, that was included in deferred revenue as of December 31, 2025.

Q2 Fiscal 2026 Form 10-Q

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Most performance obligations are generally satisfied within a year of the contract execution date.

As of March 31, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 46.6 million, of which approximately 78 % is expected to be converted to revenue over the next twelve months , approximately 17 % in the following twelve months , and the remainder thereafter.

As of June 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 47.9 million, of which approximately 79 % is expected to be converted to revenue over the next twelve months , approximately 17 % in the following twelve months , and the remainder thereafter.

Product Warranties

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Changes in the reserve for product warranties were as follows for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands)

2026 2025 2026 2025

Balance at beginning of period $ 2,821 $ 2,859 $ 3,046 $ 3,100

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Following the closing of the 2024 Exchange Transaction, no amounts were outstanding on the 2028 Notes.

The carrying amount of the liability for the 2029 Notes as of March 31, 2026 is $ 210.5 million, of which $ 207.5 million is included as convertible senior notes, net, non-current, and $ 3.0 million is included as accrued expenses on our condensed consolidated balance sheets.

The carrying amount of the liability for the 2029 Notes as of June 30, 2026 is $ 210.5 million, of which $ 207.5 million is included as convertible senior notes, net, non-current, and $ 3.0 million is included as accrued expenses on our condensed consolidated balance sheets.

Q2 Fiscal 2026 Form 10-Q

Changes to the 2029 Notes during the three months ended March 31, 2026 were as follows:

Changes to the 2029 Notes during the six months ended June 30, 2026 were as follows:

(In thousands)

1 unchanged sentence

Contractual interest expense ( 1,500 )

Carrying amount as of March 31, 2026

As of March 31, 2026, the estimated fair value (Level 2) of the 2029 Notes was $ 171.1 million.

Carrying amount as of June 30, 2026

As of June 30, 2026, the estimated fair value (Level 2) of the 2029 Notes was $ 182.9 million.

The fair value of the 2029 Notes is estimated using a binomial lattice model that is primarily affected by the trading price of our common stock, market interest rates and volatility.

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The 2030 Indenture also includes customary covenants for convertible notes of this type.

To the extent we elect, the sole remedy for an event of default relating to our failure to comply with certain of our reporting obligations shall, for the first 360 calendar days after the occurrence of such an event of default, consist exclusively of the right to receive additional interest on the 2030 Notes at a rate equal to (i) 0.25 % per annum of the principal amount of the 2030 Notes outstanding for each day during the first 180 calendar days of the 360 -day period after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived) and (ii) 0.50 % per annum of the principal amount of the 2030 Notes outstanding for each day from, and including, the 181 st calendar day to, and including, the 360 th calendar day after the occurrence of such an event of default during which such event

Q2 Fiscal 2026 Form 10-Q

of default is continuing (or, if earlier, the date on which such event of default is cured or waived as provided for in the 2030 Indenture).

and including, the 360 th calendar day after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived as provided for in the 2030 Indenture).

On the 361 st day after such event of default (if the event of default relating to our failure to comply with its obligations is not cured or waived prior to such 361 st day), the 2030 Notes shall be subject to acceleration as provided for in the 2030 Indenture.

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Because we may elect to settle any conversions entirely in shares, and because settlement in shares is the default settlement method, the liability is classified as non-current.

The requirement to repurchase the 2030 Notes, including unpaid interest to the maturity date in the event of a Fundamental Change, is considered a put option for certain periods requiring bifurcation under ASC 815 – Derivatives and Hedging.

However, given the low probability of such a Fundamental Change occurring during the applicable periods, the value of the embedded derivative is immaterial.

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However, due to the nature and terms of the reporting obligations, the value of the embedded derivative is immaterial.

We incurred issuance costs related to the 2030 Notes of approximately $ 7.3 million, which were recorded as debt issuance costs and are presented as a reduction to the 2030 Notes on our condensed consolidated balance sheets.

We incurred issuance costs related to the 2030 Notes of approximately $ 7.3 million, which were recorded as debt issuance costs and are presented as a reduction to the 2030 Notes in convertible senior notes, net, non-current on our condensed consolidated balance sheets.

The debt issuance costs are amortized to interest expense using the effective interest method over the term of the 2030 Notes, resulting in an effective interest rate of 1.6 %.

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The net carrying amount of the liability for the 2030 Notes is included as convertible senior notes, net, non-current in the condensed consolidated balance sheets as follows:

(In thousands)

(In thousands) June 30,

2026 December 31,

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Interest expense for the 2030 Notes was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2026 2025 2026 2025

2 unchanged sentences

Total interest expense $ 1,759 $ 1,756 $ 3,518 $ 3,511

As of March 31, 2026, the estimated fair value (Level 2) of the 2030 Notes was $ 313.2 million.

As of June 30, 2026, the estimated fair value (Level 2) of the 2030 Notes was $ 324.4 million.

The fair value of the 2030 Notes is estimated using a binomial lattice model that is primarily affected by the trading price of our common stock, market interest rates and volatility.

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A summary of the pre-tax restructuring charges are as follows:

(In thousands)

Three Months Ended March 31, 2026 Cumulative amount incurred to date

(In thousands) Cumulative amount incurred to date

Employee separation costs $ 4,787

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(1) Cumulative charges incurred to date include $ 3.8 million in sales, general and administrative expense and $ 2.1 million in research and development expense.

Charges included employee separation costs comprised of approximately $ 2.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification (WARN) Act and approximately $ 2.3 million of severance costs.

Charges included employee separation costs comprised of approximately $ 2.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification Act and approximately $ 2.3 million of severance costs.

Charges included in other costs are primarily related to legal expenses incurred in connection with employee separation matters.

In connection with the restructuring and strategic shift, we incurred an additional $ 389.9 million in costs.

These include $ 359.3 million of accelerated amortization of certain intangible assets, $ 15.0 million of IPR&D impairment charges, $ 8.1 million related to excess inventory due to decreased external demand and $ 3.9 million for estimated losses on purchase commitments tied to anticipated future excess inventory included in cost of revenue, and $ 3.1 million of accelerated depreciation of fixed assets.

These primarily include $ 359.3 million of accelerated amortization of certain intangible assets, $ 15.0 million of IPR&D impairment charges, charges of $ 8.1 million related to excess inventory due to decreased external demand, $ 3.9 million for estimated losses on purchase commitments tied to anticipated future excess inventory included in cost of revenue, and $ 3.1 million of accelerated depreciation of fixed assets.

Balance Sheet Components for additional information on the IPR&D impairment assessment and the change in estimated useful life of the intangible asset and accelerated amortization.

A summary of the liabilities related to the restructuring is as follows:

(In thousands, excluding non-cash activities)

(In thousands) Other Costs

Amount recorded in current liabilities as of December 31, 2025 $ 389

Cash paid during YTD 2026

Amount recorded in current liabilities as of March 31, 2026

Cash paid during 2026 ( 389 )

Amount recorded in current liabilities as of June 30, 2026 $ —

Estimated total restructuring costs to still be incurred $ —

During the six months ended June 30, 2026 no further restructuring charges related to the 2025 restructuring were incurred.

2024 Restructuring

In the second quarter of 2024, we implemented an expense reduction initiative that included workforce reductions, the closing of our San Diego office, and other actions to reduce annualized run-rate operating expenses.

We recognized approximately $ 1 million of expense related to the 2024 restructuring during the three months ended March 31, 2026.

We recognized approximately $ 0.9 million of expense related to the 2024 restructuring during the six months ended June 30, 2025.

See Note 6 – Restructuring in Part II, Item 8 of the 2025 Annual Report for information regarding the 2024 restructuring initiative.

During the six months ended June 30, 2026 no further restructuring charges related to the 2024 restructuring were incurred.

Q2 Fiscal 2026 Form 10-Q

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To the extent that any such indemnification obligations apply to the lawsuits described above, any associated expenses incurred are included within the related accrued litigation expense amounts.

No additional liability associated with such indemnification obligations has been recorded as of March 31, 2026 and December 31, 2025.

No additional liability associated with such indemnification obligations has been recorded as of June 30, 2026 and December 31, 2025.

EQUITY PLANS AND SHARE-BASED COMPENSATION

As of March 31, 2026, the Company had share-based compensation awards outstanding under the 2020 Equity Incentive Plan (the “2020 Plan”), the 2020 Inducement Equity Incentive Plan (the “Inducement Plan”), the 2021 adopted Omniome Equity Incentive Plan of Pacific Biosciences of California, Inc.

(the “Omniome Plan”) and the 2010 Employee Stock Purchase Plan, from which we issued equity awards and employee stock.

As of March 31, 2026, we had 25.7 million shares remaining and available for future issuance under the 2020 Plan, Inducement Plan, and the Omniome Plan.

As of June 30, 2026, the Company had share-based compensation awards outstanding under the 2020 Equity Incentive Plan (as amended, the "2020 Plan"), the 2020 Inducement Equity Incentive Plan (the “Inducement Plan”), the 2021 adopted Omniome Equity Incentive Plan of Pacific Biosciences of California, Inc.

(the “Omniome Plan”) and the 2010 Employee Stock Purchase Plan ("ESPP"), from which we issued equity awards and employee stock.

On June 3, 2026, our stockholders approved an amendment to the 2020 Plan to reserve an additional 16 million shares of our common stock for issuance pursuant to equity awards granted under the 2020 Plan.

As of June 30, 2026, we had 24.1 million shares remaining and available for future issuance under the 2020 Plan, Inducement Plan, and Omniome Plan.

Shares remaining and available for future issuance reflect shares that may become eligible to vest upon the achievement of maximum targets for certain equity awards.

3 unchanged sentences

The following table summarizes stock option activity for time-based awards:

(shares in thousands)

(shares in thousands) Number

of shares Weighted

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Expired ( 442 ) $ 8.93

Outstanding at March 31, 2026 20,330 $ 5.14

Outstanding at June 30, 2026 21,804 $ 4.75

Restricted Stock Units ("RSU") and Performance Stock Units ("PSU")

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The following table summarizes the time-based RSUs and PSUs activity:

Restricted Stock Units (RSU) Performance Stock Units (PSU) Weighted average grant date

RSU PSU Weighted average grant date

(shares in thousands)

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Forfeited ( 1,121 ) ( 392 ) $ 2.49 $ 9.43

Outstanding at March 31, 2026 19,226 — $ 2.60 $ —

Employee Stock Purchase Plan ("ESPP")

Shares issued under our ESPP wer e 1,266,217 and 1,752,417 durin g the three months ended March 31, 2026 and 2025, respectively.

Outstanding at June 30, 2026 18,984 — $ 2.57 $ —

Shares issued under our ESPP wer e 1,266,217 and 1,752,417 durin g the six months ended June 30, 2026 and 2025, respectively.

In the first quarter of 2026, an additional 4.0 million shares were reserved under the ESPP.

As of March 31, 2026, 17.9 million shares of our common stock remain avai lable for issuance under our ESPP.

As of June 30, 2026, 17.9 million shares of our common stock remain avai lable for issuance under our ESPP.

Share-based Compensation

The following table summarizes share-based compensation expense:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2026 2025 2026 2025

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The fair value of employee stock options was estimated using the following assumptions:

Three Months Ended March 31,

Six Months Ended June 30,

Expected term in years 4.9 4.9

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The fair value of shares to be issued under the ESPP was estimated using the following assumptions:

Three Months Ended March 31,

Six Months Ended June 30,

Expected term in years 0.5 — 2.0

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The following table presents the calculation of the basic and diluted net loss per share amounts presented in the condensed consolidated statements of operations and comprehensive loss:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands, except per share amounts) 2026 2025 2026 2025

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Weighted average shares used in computing basic net loss per share 310,655 300,162 308,250 298,519

305,819 296,858

Basic net loss per share $ ( 0.14 ) $ ( 0.14 ) $ ( 0.17 ) $ ( 1.57 )

Weighted average shares used in computing diluted net loss per share 310,655 300,162 308,250 298,519

305,819 296,858

Diluted net loss per share $ ( 0.14 ) $ ( 0.14 ) $ ( 0.17 ) $ ( 1.57 )

The following shares issuable upon conversion of the Notes and outstanding equity awards were excluded from the computation of diluted net loss per share for the periods presented because the effect of including such shares would have been antidilutive:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2026 2025 2026 2025

Shares issuable upon conversion of convertible senior notes 61,415 61,415 61,415 61,415

61,415 61,415

Equity awards 46,451 44,643 46,451 44,643

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A summary of the segment profit or loss, including significant segment expenses is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2026 2025 2026 2025

9 unchanged sentences

Amortization of acquired intangible assets 833 833 1,666 362,875

Other income, net 266 2,557

Operating loss ( 44,610 ) ( 44,853 ) ( 52,967 ) ( 473,787 )

Other (expense) income, net ( 73 ) 2,958 193 5,515

Loss before income taxes ( 44,683 ) ( 41,895 ) ( 52,774 ) ( 468,272 )

Income tax provision (benefit) 58 35 242 ( 267 )

Consolidated net loss ( 8,275 ) ( 426,075 )

Net loss $ ( 44,741 ) $ ( 41,930 ) $ ( 53,016 ) $ ( 468,005 )

A summary of our revenue by geographic location is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2026 2025 2026 2025

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A summary of our revenue by category is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2026 2025 2026 2025

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Q2 Fiscal 2026 Form 10-Q

SUBSEQUENT EVENTS

Restructuring

On July 30, 2026, our Board of Directors approved a restructuring plan to continue to better align our organizational structure and resources with our strategic initiatives.

The restructuring includes operating expense reductions and a reduction in force (the “Reduction in Force”).

These restructuring actions are expected to result in a workforce reduction of approximately 40 employees, or approximately 8 % of our workforce, as we align our organizational structure with our strategic priorities.

We estimate that we will incur aggregate pre-tax charges of approximately $ 2.0 million in connection with the Reduction in Force, primarily consisting of severance payments, employee benefits, outplacement services and related costs.

We expect that the Reduction in Force will be completed and that these charges will be incurred in the third quarter of 2026.

Appointments and Resignations

Our Board of Directors appointed Mark Van Oene as President and Chief Executive Officer and as a member of our Board of Directors, effective August 5, 2026.

Van Oene succeeds Christian Henry, who stepped down as our President and Chief Executive Officer effective August 5, 2026.

Henry will continue to serve as a member of our Board of Directors.

Q2 Fiscal 2026 Form 10-Q

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements