Pacific Biosciences of California (NASDAQ:PACB) no doubt made many investors happy in 2020, as its shares more than quintupled in value. The genetic sequencing systems stock is off to a great start in 2021 as well, with a year-to-date gain of 80%.
The good times should keep rolling for PacBio. The company announced its fourth-quarter results after the market closed on Wednesday. Here are the highlights from PacBio's Q4 update.
By the numbers
PacBio's top line went in the wrong direction in the fourth quarter. Revenue fell 3% year over year to $27.1 million. However, this result still topped the average analyst estimate of $25.4 million.
The picture looked better with the company's bottom line. PacBio reported Q4 net income of $74.9 million, or $0.37 per share, based on generally accepted accounting principles (GAAP). That was a significant improvement from the net loss of $91,000 in the prior-year period. It also easily beat the Wall Street consensus earnings estimate of $0.32 per share.
PacBio ended the fourth quarter with cash, cash equivalents, and investments totaling $318.8 million. This was an increase from the $208.6 million on hand as of Sept. 30, 2020.
Behind the numbers
The COVID-19 pandemic hurt PacBio in 2020. Many of the company's customers shut down operations temporarily. However, CEO Christian Henry said that the pandemic didn't make a significant impact on PacBio's business in the fourth quarter.
PacBio reported that it placed 35 Sequel II/IIe systems in Q4. This brought the company's total installed base to 203 as of the end of 2020. The company's product revenue, which stems from sequencing system and consumables sales, fell nearly 4% year over year to $23.6 million. However, this total reflected a 50% increase from product revenue recorded in the third quarter of 2020.
Service and other revenue rose nearly 4% year over year to $3.5 million. This revenue was more than 5% higher than the amount generated in the previous quarter.
PacBio's cash position was boosted in the fourth quarter by a public stock offering that closed in November. This offering generated net proceeds of $93.6 million.
Probably the main wild card for the healthcare stock going forward is the COVID-19 pandemic. There's still a possibility that PacBio's business could be disrupted by recent spikes in infection rates.
However, the company's long-term prospects are improving. PacBio announced a multiyear deal with Invitae in January. Invitae will use the company's HiFi sequencing for its whole genome testing. Also, PacBio revealed earlier in the day on Wednesday that SoftBank Group is investing $900 million in convertible senior notes. This funding will support PacBio's initiatives for fueling future growth.