0001299130-24-000054 | 10-K | XBRL Viewer | Pacific Biosciences OF California INC

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NET LOSS PER SHARE - Antidilutive Shares Excluded From Computation Of Diluted Net Loss Income Per Share (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Shares issuable upon conversion of convertible senior notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share	31,063	20,690	20,690
Equity awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share	27,246	27,291	21,419

BALANCE SHEET COMPONENTS - Changes in Reserve for Product Warranties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance at beginning of period	$ 1,651	$ 594
Additions charged to cost of product revenue	8,227	3,199
Repairs and replacements	(5,197)	(2,142)
Balance at end of period	$ 4,681	$ 1,651

TERMINATION OF MERGER WITH ILLUMINA	12 Months Ended
TERMINATION OF MERGER WITH ILLUMINA	Dec. 31, 2023
Termination of Merger with Illumina [Abstract]
TERMINATION OF MERGER WITH ILLUMINA	TERMINATION OF MERGER WITH ILLUMINA On November 1, 2018, we entered into an Agreement and Plan of Merger (as amended, the “Illumina Merger Agreement”) with Illumina, Inc. (“Illumina”) and FC Ops Corp., a wholly owned subsidiary of Illumina (“Illumina Merger Sub”). On January 2, 2020, we, Illumina and Illumina Merger Sub, entered into an agreement to terminate the Merger Agreement (the “Termination Agreement”). Continuation Advances from Illumina As part of the Termination Agreement, Illumina paid us cash payments (“Continuation Advances”) totaling $52 million. Up to the full $52.0 million of Continuation Advances paid to us were repayable without interest to Illumina if, within two years of March 31, 2020, we entered into, or consummated a Change of Control Transaction or raised at least $100 million in a single equity or debt financing (that may have multiple closings), with the amount repayable dependent on the amount raised by us. Resulting from the issuance and sale of $900 million of 1.50% Convertible Senior Notes due February 15, 2028, $52.0 million of Continuation Advances were paid without interest to Illumina in February 2021 and recorded a non-operating expense in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2021.

BALANCE SHEET COMPONENTS - Narrative (Details) - USD ($) $ in Thousands		12 Months Ended
	Sep. 20, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Aug. 02, 2023	Sep. 30, 2021
Balance Sheet Components [Line Items]
Depreciation		$ 11,463	$ 9,480	$ 7,199
Goodwill		462,261	409,974
Amortization		8,300	900	400
Amortization of intangible assets		6,157	0	0
Deferred revenue, current		16,342	30,498
Deferred revenue, non-current		5,530	1,794
Deferred revenue, non-current		$ 2,900
Percentage of fee to prepay debt		4.00%
Term loans outstanding		$ 500
Interest expense		300
Cost Of Revenue
Balance Sheet Components [Line Items]
Amortization of intangible assets		2,000	700	300
Operating Expense
Balance Sheet Components [Line Items]
Amortization of intangible assets		6,300	200	$ 100
Omniome, Inc
Balance Sheet Components [Line Items]
Goodwill	$ 390,665	462,300	$ 410,000
Short term debt acquired	1,300
Long-term debt acquired	$ 3,000
Debt term	43 months
Stated interest rate	17.00%
In-process research and development	$ 400,000
Omniome, Inc \| In-Process Research and Development Indefinite Lived
Balance Sheet Components [Line Items]
Intangible assets include acquired IPR&D						$ 400,000
Apton
Balance Sheet Components [Line Items]
Goodwill					$ 52,287
Goodwill, acquired during period		52,300
Deferred income tax liability		11,300
In-process research and development					$ 55,000
Service
Balance Sheet Components [Line Items]
Contract with Customer, Liability		21,900
Deferred revenue, current		16,300
Deferred revenue, non-current		$ 5,600
Deferred service revenue, noncurrent, recognition period		5 years
Revenue recognized		$ 18,900

BALANCE SHEET COMPONENTS - Estimated Future Amortization Expense of Acquisition-Related Intangible Assets with Definite Lives (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Balance Sheet Components [Abstract]
2024	$ 27,412
2025	27,412
2026	27,412
2027	27,412
2028	27,412
2029 and thereafter	264,924
Net Carrying Amount	$ 401,984

STOCKHOLDERS’ EQUITY - Schedule of Fair Value of Employee Stock Options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%
Weighted average grant date fair value (in usd per share)	$ 7.32	$ 5.93	$ 18.36
Options To Purchase Common Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term in years	4 years 10 months 24 days	4 years 7 months 6 days
Risk-free interest rate, minimum	3.73%	0.41%	0.05%
Risk-free interest rate, maximum	4.60%	3.66%	1.10%
Weighted average grant date fair value (in usd per share)	$ 7.32	$ 5.93	$ 15.53
Options To Purchase Common Stock \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term in years			2 years 1 month 6 days
Expected volatility	77.00%	70.00%	67.00%
Options To Purchase Common Stock \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term in years			4 years 7 months 6 days
Expected volatility	78.00%	76.00%	80.00%

BUSINESS ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions

The major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred, based on the preliminary estimated fair values were as follows (in thousands):


Cash and cash equivalents	$	97
In-process research and development	55,000
Goodwill	52,287
Other assets, current	153
Deferred income tax liability	(11,338)
Liabilities assumed	(2,191)
Total consideration transferred	$	94,008

Unaudited Pro Forma Financial Information

The following table summarizes the unaudited pro forma financial information:


	Years Ended December 31,
(in thousands, except per share amounts)	2021		2020
Pro forma total revenue	$	130,513	$	78,893
Pro forma net (loss) income	$	(278,451)	$	17,510
Pro forma net (loss) income per share - basic and diluted	$	(1.27)	$	0.09

Total Consideration Transferred for Acquisition

Total consideration transferred for the acquisition is as follows (in thousands):


Total cash paid	$	315,703
Fair value of share consideration	249,435
Fair value of contingent consideration	168,574
Less: Share-based compensation expense excluded from consideration transferred	(18,923)
Total consideration transferred	$	714,789

Major Classes of Assets and Liabilities Allocated to Total Fair Value of The Consideration Transferred

As of December 31, 2021, the major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred were as follows (in thousands):


Cash and cash equivalents	$	15,338
Property and equipment, net	6,123
Operating lease right-of-use assets, net	18,095
In-process research and development	400,000
Goodwill	390,665
Other assets, non-current	3,203
Deferred income tax liability	(91,814)
Liabilities assumed	(26,821)
Total consideration transferred	$	714,789

The major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred were as follows (in thousands):


Cash and cash equivalents	$	987
Property and equipment, net	214
Intangible assets	11,360
Goodwill	19,309
Other assets, non-current	467
Deferred income tax liability	(2,672)
Liabilities assumed	(118)
Total consideration transferred	$	29,547

INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Taxes [Line Items]
Probability of benefit realized upon settlement uncertain tax position	50.00%
(Loss) income before taxes from U.S. operations	$ (318,900)	$ (315,700)	$ (275,400)
Valuation allowance	525,703	445,574
Net operating loss carryforwards	435,500
Research and development credit carryforward	83,900
Deferred income tax benefit	(11,424)	0	(93,649)
Accrued interest or penalties	0	0
Unrecognized tax benefits	14,554	10,410	8,335	$ 5,954
Income before taxes from foreign operations	700	$ 1,800	$ 800
Federal
Income Taxes [Line Items]
Net operating loss carryforwards	1,709,300
Operating loss carryforwards, subject to expiration	788,100
Research and development credit carryforward	57,700
State
Income Taxes [Line Items]
Net operating loss carryforwards	1,171,800
Research and development credit carryforward	$ 49,800

STOCKHOLDERS’ EQUITY - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 72,118	$ 78,613	$ 80,728
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	5,399	4,802	6,126
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	22,435	30,676	20,275
Sales, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	44,284	43,135	35,403
Merger-related expenses - stock-settled
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	0	0	6,349
Merger-related expenses - milestone
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	0	0	5,202
Share-based compensation
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	72,118	78,613	73,355
Merger-related expenses - cash-settled
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 0	$ 0	$ 7,373

BALANCE SHEET COMPONENTS - Other Liabilities, Current (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Balance Sheet Components [Abstract]
Accrued Employee Stock Purchase Plan	$ 3,715	$ 3,638
Short-term loan	490	1,842
Other	4,121	1,753
Other liabilities, current	$ 8,326	$ 7,233

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor Name	Ernst & Young LLP
Auditor Location	San Mateo, California
Auditor Firm ID	42

INCOME TAXES - Reconciliation of Federal Income Tax Rate (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Statutory tax rate	21.00%	21.00%	21.00%
State tax rate, net of federal benefit	3.00%	4.40%	5.50%
Change in valuation allowance	(20.00%)	(25.10%)	(4.90%)
Tax credits	2.00%	2.20%	2.50%
Share-based compensation	(2.10%)	(2.20%)	10.90%
Merger Expenses	(0.001)	0	(0.009)
Other	(0.20%)	(0.40%)	(0.10%)
Total	3.60%	(0.10%)	34.00%

TERMINATION OF MERGER WITH ILLUMINA - Narrative (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Mar. 31, 2020	Feb. 28, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Merger Termination [Line Items]
Loss (gain) from Continuation Advances		$ 52,000	$ 0	$ 0	$ 52,000
Possible Continuation Advances payable	$ 52,000
Period in which company must repay continuation advances if change-of-control transaction is entered into with third party	2 years
Equity or debt financing that must be raised in a single transaction	$ 100,000
Illumina, FC Ops Corp
Merger Termination [Line Items]
Loss (gain) from Continuation Advances	$ 52,000
Convertible Senior Notes
Merger Termination [Line Items]
Principal amount of notes		$ 900,000
Stated interest rate		1.50%

CONVERTIBLE SENIOR NOTES - Schedule of Net Carrying Amount (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
2030 Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount	$ 441,000	$ 0
Unamortized debt issuance costs	524	0
Unamortized debt issuance costs	(6,907)	0
Total	434,617	0
2028 Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount	459,000	900,000
Unamortized debt issuance costs	(1,374)	(3,317)
Total	$ 457,626	$ 896,683

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

BUSINESS ACQUISITIONS - Schedule of Business Acquisition (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Aug. 02, 2023	Dec. 31, 2022	Sep. 20, 2021	Jul. 20, 2021
Business Acquisition [Line Items]
Goodwill	$ 462,261		$ 409,974
Apton
Business Acquisition [Line Items]
Cash and cash equivalents		$ 97
In-process research and development		55,000
Goodwill		52,287
Other assets, current		153
Deferred income tax liability		(11,338)
Liabilities assumed		(2,191)
Total consideration transferred		$ 94,008
Omniome, Inc
Business Acquisition [Line Items]
Cash and cash equivalents				$ 15,338
In-process research and development				400,000
Goodwill	$ 462,300		$ 410,000	390,665
Deferred income tax liability				(91,814)
Liabilities assumed				(26,821)
Total consideration transferred				714,789
Property and equipment, net				6,123
Operating lease right-of-use assets, net				18,095
Other assets, non-current				$ 3,203
Circulomics, Inc
Business Acquisition [Line Items]
Cash and cash equivalents					$ 987
Goodwill					19,309
Deferred income tax liability					(2,672)
Liabilities assumed					(118)
Total consideration transferred					29,547
Property and equipment, net					214
Other assets, non-current					467
Allocation of purchase price to intangible assets					$ 11,360

BALANCE SHEET COMPONENTS - Definite-Lived Intangible Assets from Business Acquisitions (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jul. 20, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 411,539	$ 11,400
Accumulated Amortization	(9,555)
Net Carrying Amount	$ 401,984
Developed technology
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (in years)	15 years
Gross Carrying Amount	$ 411,179
Accumulated Amortization	(9,195)
Net Carrying Amount	$ 401,984
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (in years)	2 years
Gross Carrying Amount	$ 360
Accumulated Amortization	(360)
Net Carrying Amount	$ 0

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities
Net loss	$ (306,735)	$ (314,248)	$ (181,223)
Adjustments to reconcile net loss to net cash used in operating activities
Loss (gain) from Continuation Advances	0	0	52,000
Depreciation	11,463	9,480	7,199
Amortization of intangible assets	8,261	913	381
Amortization of right-of-use assets	6,810	6,925	4,005
Share-based compensation	72,118	78,613	73,355
Merger-related compensation expense	3,395	0	0
Loss on extinguishment of debt	2,033	0	0
Amortization of premium and accretion of discount on marketable securities, net	(12,840)	(244)	4,011
Change in fair value of contingent consideration	15,060	2,377	1,143
Inventory provision	10,584	6,027	678
Deferred income taxes	(11,424)	0	(93,649)
Other	1,059	918	593
Changes in assets and liabilities
Accounts receivable, net	(17,829)	5,455	(7,166)
Inventory, net	(13,841)	(33,906)	(13,109)
Prepaid expenses and other assets	(8,984)	(12,324)	(1,024)
Accounts payable	206	1,025	6,363
Accrued expenses	13,103	(3,651)	15,320
Deferred revenue	(10,420)	(3,734)	25,736
Operating lease liabilities	(8,759)	(7,724)	(4,990)
Contingent consideration liability	(14,882)	0	0
Other liabilities	2,449	887	(803)
Net cash used in operating activities	(259,173)	(263,211)	(111,180)
Cash flows from investing activities
Purchase of property and equipment	(8,843)	(16,750)	(5,931)
Purchase of intangible assets	0	(179)	0
Purchase of investments	(756,567)	(442,788)	(988,046)
Sales of investments	595	0	212,734
Maturities of investments	769,521	575,800	422,505
Net cash provided by (used in) in investing activities	4,604	116,083	(678,531)
Cash flows from financing activities
Continuation Advances	0	0	(52,000)
Proceeds from issuance of Convertible Senior Notes, net of issuance costs	0	0	895,536
Proceeds from issuance of common stock under equity offerings, net of issuance costs	189,200	0	294,845
Proceeds from issuance of common stock from equity plans	15,319	11,230	31,806
Payment of debt issuance costs	(7,375)	0	0
Payment of contingent consideration	(86,411)	0	0
Notes payable principal payoff	(1,842)	(1,608)	(361)
Other	0	0	(245)
Net cash provided by financing activities	108,891	9,622	1,169,581
Net (decrease) increase in cash, cash equivalents, and restricted cash	(145,678)	(137,506)	379,870
Cash, cash equivalents, and restricted cash at beginning of period	328,311	465,817	85,947
Cash, cash equivalents, and restricted cash at end of period	182,633	328,311	465,817
Cash and cash equivalents at end of period	179,911	325,089	460,725
Restricted cash at end of period	2,722	3,222	5,092
Supplemental disclosure of cash flow information
Interest paid	15,687	14,049	6,928
Supplemental disclosure of non-cash investing and financing activities
Convertible Senior Notes exchange	441,000	0	0
Liquidity Bonus Event
Supplemental disclosure of non-cash investing and financing activities
Issuance of common stock	2,111	0	0
Milestone Achievement
Supplemental disclosure of non-cash investing and financing activities
Issuance of common stock	84,761	0	0
Circulomics, Inc
Cash flows from investing activities
Cash paid for purchase of business acquisition, net of cash acquired	(102)	0	(319,793)
Apton And Omniome
Supplemental disclosure of non-cash investing and financing activities
Inventory transferred to property and equipment	3,984	2,812	2,586
Property and equipment transferred to inventory	(7,022)	(715)	(383)
Right-of-use asset and liability additions and modifications	0	0	2,576
Apton And Omniome \| Business Combination
Supplemental disclosure of non-cash investing and financing activities
Issuance of common stock	$ 76,642	$ 0	$ 237,885

BALANCE SHEET COMPONENTS - Components of Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Balance Sheet Components [Abstract]
Purchased materials	$ 20,168	$ 24,139
Work in process	23,436	14,062
Finished goods	13,072	12,180
Inventory, net	$ 56,676	$ 50,381

BALANCE SHEET COMPONENTS (Tables)

12 Months Ended

Dec. 31, 2023

Balance Sheet Components [Abstract]

Components of Inventory

Inventory, net, consisted of the following components:


	December 31,
(in thousands)	2023		2022
Purchased materials	$	20,168	$	24,139
Work in process	23,436		14,062
Finished goods	13,072		12,180
Inventory, net	$	56,676	$	50,381

Property and Equipment, Net

Estimated useful lives of the major classes of property and equipment are as follows:


			Estimated Useful Lives
Leasehold improvements			3 to 10 years
Lab equipment			3 to 5 years
Computer equipment			3 to 5 years
Computer software			3 years
Furniture and fixtures			3 to 5 years

Property and equipment, net, consisted of the following components:


	December 31,
(in thousands)	2023		2022
Laboratory equipment and machinery	$	44,907	$	38,998
Leasehold improvements	35,226		34,129
Computer equipment	19,528		18,438
Software	6,628		6,879
Furniture and fixtures	3,594		3,426
Construction in progress	1,343		4,698
Total	111,226		106,568
Less: Accumulated depreciation	(74,794)		(64,988)
Property and equipment, net	$	36,432	$	41,580

Definite-Lived Intangible Assets from Business Acquisitions

In addition to IPR&D, we had the following acquired definite-lived intangible assets as of December 31, 2023 (in thousands, except years):


	Estimated Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	15	$	411,179	$	(9,195)	$	401,984
Customer relationships	2	360		(360)		—
Total		$	411,539	$	(9,555)	$	401,984

Estimated Future Amortization Expense Of Acquisition-Related Intangible Assets With Definite Lives

The estimated future amortization expense of acquisition-related intangible assets with definite lives is estimated as follows (in thousands):


2024	$	27,412
2025	27,412
2026	27,412
2027	27,412
2028	27,412
2029 and thereafter	264,924
Total	$	401,984

Schedule of Accrued Expenses

Accrued expenses consisted of the following components:


	December 31,
(in thousands)	2023		2022
Salaries and benefits	$	29,337	$	17,432
Accrued interest payable	2,834		5,100
Accrued purchase commitments	2,613		3,705
Accrued product development costs	1,033		2,326
Accrued professional services and legal fees	2,641		1,005
Inventory accrual	353		332
Warranty accrual	4,681		1,651
Other	2,216		1,045
Accrued expenses	$	45,708	$	32,596

Changes in Reserve for Product Warranties

Changes in the reserve for product warranties were as follows:


	Years Ended December 31,
(in thousands)	2023		2022
Balance at beginning of period	$	1,651	$	594
Additions charged to cost of product revenue	8,227		3,199
Repairs and replacements	(5,197)		(2,142)
Balance at end of period	$	4,681	$	1,651

Future Principal Payments , Fiscal Year Maturity

As of December 31, 2023, the future principal payments remaining on term loans was the following:


(in thousands)
2024	$	490
Total	$	490

Schedule of Other Liabilities, Current

Other liabilities, current, consisted of the following components:


	December 31,
(in thousands)	2023		2022
Accrued Employee Stock Purchase Plan	$	3,715	$	3,638
Short-term loan	490		1,842
Other	4,121		1,753
Other liabilities, current	$	8,326	$	7,233

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Business Overview

We are a life science technology company that is designing, developing, and manufacturing advanced sequencing solutions that enable scientists and clinical researchers to improve their understanding of the genome and ultimately, resolve genetically complex problems. Our products and technology under development stem from two highly differentiated core technologies focused on accuracy, quality, and completeness, which include our HiFi long-read sequencing technology and our Sequencing by Binding (SBB®) technology. Our products address solutions across a broad set of applications including human genetics, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications. Our focus is on creating some of the world's most advanced sequencing systems to provide our customers 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.

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

Basis of Presentation and Consolidation

Our 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. The consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements. On an ongoing basis, we evaluate our significant estimates including, but not limited to, the valuation of inventory, the fair value of contingent consideration, the valuation of acquired intangible assets, the useful lives assigned to long-lived assets, the computation of provisions for income taxes, and the valuations related to our convertible senior notes. While the extent of the potential impact of the 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 December 31, 2023. Actual results could differ materially from these estimates.

Functional Currency

The U.S. dollar is the functional currency of our international operations. We remeasure foreign subsidiaries monetary assets and liabilities to the U.S. dollar and record net gains or losses from remeasurement in other income, net, in the consolidated statements of operations and comprehensive loss.

Cash, Cash Equivalents, Restricted Cash, and Investments

We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash equivalents may be comprised of money market funds, certificates of deposit, commercial paper, corporate bonds and notes, and government agencies’ securities.

We classify our investments in debt securities as available-for-sale and report the investments at fair value in current assets. 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. Realized gains and losses, expected credit losses, as well as interest income, on available-for-sale securities are also reported in other income, net. The cost used in the determination of gains and losses of securities sold is based on the specific identification method. The cost of marketable securities is adjusted for the amortization of premiums and discounts to expected maturity. Premium and discount amortization is recorded in other income, net.

Our investment portfolio at any point in time contains investments in cash deposits, money market funds, commercial paper, corporate debt securities, and U.S. government and agency securities with high credit ratings. We have established guidelines regarding diversification and maturities of investments with the objectives of maintaining safety and liquidity, while maximizing yield.

Restricted cash includes cash that is not readily available for use in the Company’s operating activities. 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. At December 31, 2023, 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.

Our trade receivables are derived from revenue to customers and distributors located in the United States and other countries. We perform credit evaluations of our customers’ financial condition and, generally, require no collateral from our customers. The allowance for credit losses is based on our assessment of the collectability of customer accounts. We regularly review our trade receivables including consideration of factors such as historical experience, the age of the accounts receivable balances, customer creditworthiness, customer industry, and current and forecasted economic conditions that may affect a customer’s ability to pay. We have not experienced any significant credit losses to date.

Although we have historically not experienced significant credit losses, our exposure to credit losses may increase if our customers are adversely affected by changes in economic pressures or uncertainty associated with local or global economic recessions, or other customer-specific factors.

For the year ended December 31, 2023, no single customer accounted for 10% or greater of our total revenue. For the years ended December 31, 2022 and 2021, one customer accounted for approximately 12%, and 13% of our total revenue, respectively.

As of December 31, 2023 and 2022, 49% and 57% of our accounts receivable were from domestic customers, respectively. As of December 31, 2023, one customer represented approximately 10% of our net accounts receivable. As of December 31, 2022, one customer represented approximately 10% 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 consolidated financial statements.

Inventory, Net

Inventories are stated at the lower of cost or net realizable value on a first-in, first-out (“FIFO”) method. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess or obsolete balances. Cost includes depreciation, labor, material, and overhead costs, including product and process technology costs. Determining net realizable value of inventories involves numerous judgements, including projecting future average selling prices, sales volumes, and costs to complete products in work in process inventories.

We make inventory purchases and commitments to meet future shipment schedules based on forecasted demand for our products. The business environment in which we operate is subject to rapid changes in technology and customer demand. We perform a detailed assessment of inventory each period, which includes a review of, among other factors, demand requirements, product life cycle and development plans, component cost trends, product pricing, product expiration, and quality issues. Based on our analysis, we record adjustments to inventory for potentially excess, obsolete, or impaired goods, when appropriate, to report inventory at net realizable value. Inventory adjustments may be required if actual demand, component costs, supplier arrangements, or product life cycles differ from our estimates. Any such adjustments would result in a charge to our results of operations.

Property and Equipment, Net

Property and equipment are stated at cost, reviewed regularly for impairment, and depreciated over the estimated useful lives of the assets, using the straight-line method. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the related asset. Major improvements are capitalized, while maintenance and repairs are expensed as incurred. Transfers of assets between property and equipment, net, and inventory are transferred at standard cost and recognized at carrying value.

Estimated useful lives of the major classes of property and equipment are as follows:


			Estimated Useful Lives
Leasehold improvements			3 to 10 years
Lab equipment			3 to 5 years
Computer equipment			3 to 5 years
Computer software			3 years
Furniture and fixtures			3 to 5 years

Operating Leases

We record operating lease right-of-use assets and liabilities on our consolidated balance sheets for all leases with a term of more than 12 months. The operating lease right-of-use assets and liabilities are calculated as the present value of remaining minimum lease payments over the remaining lease term using our estimated secured incremental borrowing rates at the commencement date. Lease payments included in the measurement of the lease liability comprise the fixed rent per the term of the Lease. Operating lease expense is recognized on a straight-line basis over the lease term, with variable lease payments, such as common area maintenance fees, recognized in the period incurred.

Business Combinations

Under the acquisition method of accounting, we allocate the fair value of the total consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. These valuations require us to make estimates and assumptions, especially with respect to intangible assets. We record the excess consideration over the aggregate fair value of tangible and intangible assets, net of liabilities assumed, as goodwill. Costs that we incur to complete the business combination, such as legal and other professional fees, are expensed as they are incurred.

In connection with certain acquisitions, contingent consideration can be earned by the sellers upon completion of certain future performance milestones. In these cases, a liability is recorded on the acquisition date for an estimate of the acquisition date fair value of the contingent consideration. These estimates require significant management judgment, including probabilities of achieving certain future milestones. Changes in the fair value of the contingent consideration subsequent to the acquisition date are recognized in operating expense in our consolidated statements of operations and comprehensive loss.

If the initial accounting for a business combination is incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. We record these adjustments to the provisional amounts with a corresponding offset to goodwill. Any adjustments identified after the measurement period are recorded in the consolidated statements of operations and comprehensive loss.

Goodwill, Intangible Assets, and Other Long-Lived Assets

Assets acquired, including intangible assets and capitalized in-process research and development (“IPR&D”), and liabilities assumed are measured at fair value as of the acquisition date. Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of the net assets acquired. Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project (i.e., upon commercialization), the IPR&D asset is assessed for impairment and then amortized over its estimated useful life. If the relevant research and development project is abandoned, the IPR&D asset is expensed in the period of abandonment.

Goodwill and IPR&D are not amortized; however, they are reviewed for impairment at least annually. We perform annual impairment testing of goodwill in the second quarter of each year, or more frequently if indicators of potential impairment exist. We generally perform annual impairment testing of IPR&D in the fourth quarter of each year, or more frequently if indicators of potential impairment exist.

We perform our goodwill impairment analysis at the reporting unit level. We have one reporting unit, which aligns with our reporting structure and availability of discrete financial information. During the goodwill impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair values of our reporting unit is less than the carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and our overall financial performance. If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair value of our reporting unit is less than the carrying amount, then no additional assessment is deemed necessary. Otherwise, we proceed to compare the estimated fair value of the reporting unit with the carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the fair value, we record an impairment loss based on the difference. We may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative goodwill impairment test.

During the IPR&D impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than the carrying amount. The qualitative factors include, but are not limited to, macroeconomic conditions, industry-specific conditions, and company-specific conditions. If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair value of the IPR&D is less than the carrying amount, then no additional assessment is deemed necessary. Otherwise, we proceed to compare the estimated fair value of the IPR&D with the carrying value. If the carrying amount of the IPR&D exceeds the fair value, we record an impairment loss based on the difference. We may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative impairment test.

Finite-lived intangibles assets include our acquired developed technology and customer relationships. We capitalize finite-lived intangibles assets and generally amortize them on a straight-line basis over the estimated useful lives. We regularly review the carrying amount and useful lives of our finite-lived assets to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. If indicators of impairment exist, an impairment test is performed to assess the recoverability of the affected assets by determining whether the carrying amount of such assets exceeds the undiscounted expected future cash flows. If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value of the assets exceeds the fair value. Factors that may indicate potential impairment include a significant decline in our stock price and market capitalization compared to the net book value, significant changes in the ability of a particular asset to generate positive cash flows for our strategic business objectives, and the pattern of utilization of a particular asset.

Revenue Recognition

Our revenue is generated primarily from the sale of products and services. Product revenue primarily consists of sales of our instruments and related consumables; service and other revenue consist primarily of revenue earned from product maintenance agreements.

We account for a contract with a customer when there is a legally enforceable contract between us and the customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Revenues are recognized when control of the promised goods are transferred to our customers, or services are performed, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We may enter into contracts with customers that include a combination of promised products and services, resulting in arrangements containing multiple performance obligations. We determine whether each product or service is distinct, in order to identify the performance obligations in the contract and allocate the contract transaction price among the distinct performance obligations. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. Therefore, instrument revenue is recognized upon transfer of control of the asset to the customer, which is generally upon delivery for sales made to our non-distributor customers and upon shipment for sales made to our distributor customers.

The consideration for contracts with multiple performance obligations is allocated between separate performance obligations based on their individual standalone selling price. We determine the best estimate of standalone selling price using average selling prices over a 12-month period combined with an assessment of current market conditions. If the standalone selling price is not directly observable, we rely on estimates by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, internal costs, profit objectives, pricing practices, and other observable inputs. We recognize revenues as performance obligations are satisfied by transferring control of the product or service to the customer or over the term of a product maintenance agreement with a customer. Our revenue arrangements generally do not provide a right of return. Revenue is recorded net of discounts and sales taxes collected on behalf of governmental authorities.

Certain of our agreements provide options to customers which can be exercised at a future date, such as the option to purchase our product at discounted prices, among others. In accounting for customer options, we determine whether an option is a material right and this requires us to exercise significant judgment. If a contract provides the customer an option to acquire additional goods or services at a discount that exceeds the range of discounts that we typically give for that product or service for the same class of customer, or if the option provides the customer certain additional goods or services for free, the option may be considered a material right. If the contract gives the customer the option to acquire additional goods or services at their normal standalone selling prices, we would likely determine that the option is not a material right and, therefore, account for it when the customer exercises the option. If the standalone selling price of the option is not directly observable, an estimated standalone selling price is utilized which considers adjustments for discounts that the customer could receive without exercising the option and the likelihood that the option will be exercised. We may also utilize the alternative approach to estimate the standalone selling price, available pursuant to the applicable accounting guidance, to the extent we conclude the applicable criteria for using the alternative approach has been met. We update the transaction price for expected consideration, subject to constraint, each reporting period if our estimate of future goods to be ordered by customers change.

Additionally, we generally provide a one-year warranty on instruments. We accrue the cost of the assurance warranty when revenue of the instrument is recognized. Employee sales commissions are generally recorded as selling, general, and administrative expense when incurred as the amortization period for such costs, if capitalized, would have been one year or less.

Cost of Revenue

Cost of revenue reflects the direct cost of product components, third-party manufacturing services, and our internal manufacturing overhead and customer service infrastructure costs incurred to produce, deliver, maintain, and support our instruments, consumables, and services.

Manufacturing overhead is predominantly comprised of labor and facility costs. We capitalize manufacturing overhead into inventory based on a standard cost model that approximates actual costs.

Service costs include the direct costs of components used in support, repair and maintenance of customer instruments as well as the cost of personnel, materials, shipping and support infrastructure necessary to support our installed customer base.

Research and Development

Research and development expense consists primarily of expenses for personnel engaged in the development of our core technology, the design and development of our future products and current product enhancements. These expenses also include prototype-related expenditures, development equipment and supplies, partner development costs, facilities costs, and other related overhead. We expense research and development costs during the period in which the costs are incurred. We defer and capitalize non-refundable advance payments made for research and development activities until the related goods are received or the related services are rendered.

Credit Losses

Trade accounts receivable

The allowance for credit losses is based on our assessment of the collectability of customer accounts. We regularly review the allowance by considering factors such as the age of the accounts receivable balances, customer creditworthiness, customer industry, and current and forecasted economic conditions that may affect a customer’s ability to pay. Credit loss expense was immaterial for the years ended December 31, 2023, 2022, and 2021.

Available-for-sale debt securities

Our investment portfolio contains investments in cash deposits, money market funds, commercial paper, corporate debt securities and U.S. government and agency securities. We regularly assess whether our securities in an unrealized loss position are credit related. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income. Unrealized losses that are not credit related are included in accumulated other comprehensive income (loss). The unrealized losses on our investments are mainly attributable to government securities, including U.S. government and U.S. agency bond securities, impacted by movements in market rates and not due to issuer credit risk. We have the ability to hold and do not intend to sell the investments in unrealized loss positions before the recovery of their amortized cost bases.

Income Taxes

We account for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of our assets and liabilities and the amounts reported in the financial statements. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards. The effect of a change in tax rates on the deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. A full valuation allowance is provided against our net deferred tax assets as it is more likely than not that the deferred tax assets will not be fully realized.

We regularly review our positions taken relative to income taxes. To the extent our tax positions are more likely than not going to result in additional taxes, we accrue the estimated amount of tax related to such uncertain positions.

Share-based Compensation

We recognize share-based compensation expense for share-based payments, including stock options, restricted stock units, performance stock units and stock issued under our employee stock purchase plan ("ESPP") based on the grant-date fair value. We estimate the fair value of stock options and ESPP using an option-pricing model. See Note 10. Stockholders’ Equity for further information regarding share-based compensation.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) is comprised of unrealized gains (losses) on our investment securities.

Shipping and Handling

Costs related to shipping and handling are included in cost of revenues for all periods presented.

Earnings per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding and potential shares assuming the dilutive effect of outstanding stock options, restricted stock units, and common stock issuable pursuant to our ESPP, using the treasury stock method.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In October 2021, the FASB issued Accounting Standards Update ("ASU") No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU provides specific guidance on how to recognize contract assets and contract liabilities related to revenue contracts with customers acquired in a business combination. This amendment improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. We adopted this ASU on January 1, 2023. The adoption of this guidance did not have a material effect on our consolidated financial statements.

Accounting Pronouncements Pending Adoption

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires entities to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. This authoritative guidance will be effective for us in fiscal year 2025, with early adoption permitted. The Company is currently evaluating the impact of the ASU but does not expect any material impacts upon adoption.

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Jan. 31, 2023	Dec. 31, 2022	Oct. 31, 2010
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001		$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	50,000,000		50,000,000	50,000,000
Preferred stock, shares issued (in share)	0		0
Preferred stock, shares outstanding (in shares)	0		0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	1,000,000,000		1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	267,744,000		226,505,000
Common stock, shares outstanding (in shares)	267,744,000		226,505,000

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Amount, Timing and Uncertainty of Cash Flows from Operating Leases

As of December 31, 2023, the maturities of our operating lease liabilities were as follows:


(in thousands)
2024	$	12,082
2025	12,307
2026	12,412
2027	9,930
2028	—
Thereafter	—
Total undiscounted operating lease payments	46,731
Less: imputed interest	(5,534)
Present value of operating lease liabilities	$	41,197

Balance Sheet Classification
Operating lease liabilities, current	$	9,591
Operating lease liabilities, non-current	31,606
Total operating lease liabilities	$	41,197

BUSINESS ACQUISITIONS

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

BUSINESS ACQUISITIONS

Apton Biosystems

On August 2, 2023, we acquired Apton Biosystems, Inc. (“Apton”), a California-based genomics company focused on developing a high throughput short-read sequencer using highly differentiated optics and image processing, paired with novel clustering and chemistry (the “Apton acquisition”).

In connection with the Apton acquisition, all outstanding equity securities of Apton were cancelled in exchange for shares of our common stock with a fair value of $76.6 million, cash of $0.2 million, and contingent consideration with a preliminary estimated fair value of $18.5 million. Excluded from consideration transferred was $1.3 million attributable to accelerated share-based compensation expense. The fair value of the 6,121,571 common shares issued was determined based on the closing market price of our common stock on the acquisition date.

In connection with the Apton acquisition, contingent consideration of $25.0 million, which we may elect to pay in cash, shares of our common stock or a combination of cash and shares of our common stock, is due upon the achievement of a milestone, defined as the achievement of $50.0 million in revenue associated with Apton's technology, provided that the milestone event occurs prior to the 5-year anniversary of the closing date of the acquisition. At this time, the number of shares, if any, to be issued in connection with the achievement of the specified milestone is not known and will be calculated based on the daily volume-weighted average price of our common stock for the twenty trading days ending on and including the fifth trading day immediately prior to the occurrence of the specified milestone. Upon achievement of the milestone, we may pay cash in lieu of our common stock to ensure that the issuance of our common stock does not exceed 19.9% of our outstanding shares of common stock then outstanding.

The contingent consideration is accounted for as a liability at fair value, with changes during each reporting period recognized in our consolidated statements of operations and comprehensive loss. The fair value of the contingent consideration liability is calculated, with the assistance from a third-party valuation firm, using a Monte Carlo Simulation to estimate the volatility and systematic relative risk of revenues subject to sales milestone payments and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate.

We allocated the consideration transferred to the identifiable assets acquired and liabilities assumed based on preliminary estimates of their respective fair values at the date of the completion of the Apton acquisition, and such allocation is subject to adjustment for up to one year after the close of the acquisition as additional

information is obtained. The major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred, based on the preliminary estimated fair values were as follows (in thousands):


Cash and cash equivalents	$	97
In-process research and development	55,000
Goodwill	52,287
Other assets, current	153
Deferred income tax liability	(11,338)
Liabilities assumed	(2,191)
Total consideration transferred	$	94,008

The purchase price allocation is preliminary, primarily due to the pending finalization of review of various tax attributes. We continue to collect information regarding certain estimates and assumptions, including potential liabilities and contingencies. We will record adjustments to the fair value of the assets acquired, liabilities assumed and goodwill within the twelve months measurement period, if necessary. During the year ended December 31, 2023, we recorded a measurement period adjustment of $1.6 million to decrease goodwill, and a corresponding $2.0 million increase in intangible assets and $0.4 million decrease in the deferred tax liability on the consolidated balance sheets, and a $0.7 million increase to our benefit from income taxes on the consolidated statements of operations and comprehensive loss. The measurement period adjustment was due to new information that became available to us upon the completion of the valuation assessment of the in-process research and development and the tax provision.

We incurred costs related to the Apton acquisition of approximately $9.0 million during the year ended December 31, 2023, which are included in merger-related expenses on the consolidated statement of operations and comprehensive loss. Merger-related expenses include $2.8 million relating to a liquidity event bonus plan that was treated as a separate transaction and included the issuance of 168,621 shares of common stock that were issued with a fair value of $2.1 million based on the closing market price of our common stock on the acquisition date. As a result, the total shares issued in connection with the Apton acquisition were 6.3 million shares of common stock.

The excess of the value of consideration paid over the aggregate fair value of those net assets has been recorded as goodwill. We recognized goodwill of $52.3 million, based on preliminary estimates, which is primarily attributable to the synergies expected to occur from the integration of Apton and is not deductible for income tax purposes. We preliminarily allocated $55.0 million of the purchase price to acquired in-process research and development ("IPR&D"). The fair value of the IPR&D was determined, with the assistance of a third-party valuation firm, using an income approach based on a forecast of expected future cash flows. Expected future cash flows utilize significant assumptions such as assumed revenue projections and discount rate.

Omniome, Inc.

On September 20, 2021, we completed our acquisition of Omniome, Inc. (“Omniome”), a San Diego-based company, to obtain their proprietary short-read DNA sequencing platform capable of delivering high accuracy (the “Omniome acquisition”).

In connection with the Omniome acquisition, all outstanding equity securities of Omniome were cancelled in exchange for approximately $315.7 million in cash, 8,911,580 shares of our common stock with a fair value of $249.4 million and contingent consideration with a fair value of $168.6 million. The fair value of the 8,911,580 common shares issued was determined based on the closing market price of PacBio’s common shares on the acquisition date.

In addition, approximately $18.9 million, comprised of $7.4 million of cash, 226,811 shares of our common stock with a fair value of $6.3 million, and $5.2 million related to contingent consideration, was accounted for as a one-time post-acquisition share-based compensation expense. This share-based compensation expense was due to accelerated vesting of Omniome stock awards in connection with the acquisition.

In connection with the acquisition the contingent consideration of $200 million (composed of $100 million in cash and $100 million in shares of our common stock) is due upon the achievement of a milestone, defined as the first commercial shipment to a customer of a nucleotide sequencing platform, comprising both an instrument and related consumables, that utilizes SBB technology. The number of shares of stock to be issued will be determined using the volume-weighted average of the trading prices of our common stock for the twenty trading days ending with and including the trading day that is two days immediately prior to the achievement of the milestone. Of the $100 million in shares of our common stock to be issued as part of the milestone, $4.1 million was attributable to stock options issued by PacBio in replacement of Omniome’s unvested options as part of the transaction. Upon achievement of the milestone, shares will be issued not in excess of an amount equal to 19.9% of our outstanding shares of common stock on the date of closing (prior to the issuance of any shares issued in connection with the transaction or the related private placement), less 11,500,000 shares.

The contingent consideration is accounted for as a liability at fair value, with changes during each reporting period recognized in our Consolidated Statements of Operations and Comprehensive Loss. The fair value of the contingent consideration liability is calculated, with the assistance from a third-party valuation firm, using a scenario-based method that considers a range of possible outcomes and their assigned probabilities of occurrence. The potential outcomes are discounted to present value at a discount rate equal to the sum of the term-matched risk-free-interest rate plus PacBio’s credit spread. On September 20, 2023, we achieved the commercial milestone in connection with the acquisition of Omniome. See Note 5. Financial Instruments for additional information on amounts paid and shares issued to former Omniome securityholders during the year ended December 31, 2023.

Total consideration transferred for the acquisition is as follows (in thousands):


Total cash paid	$	315,703
Fair value of share consideration	249,435
Fair value of contingent consideration	168,574
Less: Share-based compensation expense excluded from consideration transferred	(18,923)
Total consideration transferred	$	714,789

The acquisition was accounted for as a business combination and, accordingly, the total fair value of the consideration transferred was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. As of December 31, 2021, the major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred were as follows (in thousands):


Cash and cash equivalents	$	15,338
Property and equipment, net	6,123
Operating lease right-of-use assets, net	18,095
In-process research and development	400,000
Goodwill	390,665
Other assets, non-current	3,203
Deferred income tax liability	(91,814)
Liabilities assumed	(26,821)
Total consideration transferred	$	714,789

During the year ended December 31, 2021, we recorded a measurement period adjustment of $1.6 million to decrease goodwill and a corresponding $0.4 million to decrease the deferred tax liability on the Consolidated Balance Sheet, and a $1.2 million decrease to our benefit from income taxes on the Consolidated Statements of Operations and Comprehensive (Loss) Income. The measurement period adjustment was due to new information that became available to us upon the completion of the IRC Section 382 Tax Study, where we identified additional net operating losses that are available to us from acquired assets. Refer to Note 9 – Income Taxes, in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2021 for more information. There were no measurement period adjustments recorded in the year ended December 31, 2022.

The goodwill recognized was primarily attributable to the assembled workforce and synergies that are expected to occur from the integration of Omniome and is not deductible for income tax purposes.

We incurred costs related to the Omniome acquisition of approximately $12.0 million during the twelve months ended December 31, 2021, which are included in merger-related costs on the Consolidated Statement of Operations and Comprehensive (Loss) Income. No significant merger-related costs were incurred during the twelve months ended December 31, 2022.

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if Omniome had been acquired as of the beginning of 2020, giving effect on a pro forma basis to the purchase accounting adjustments such as $12.0 million of PacBio acquisition-related costs, $18.9 million of share-based compensation expense related to acceleration of certain Omniome stock options not attributable to pre-combination service, and a $91.0 million one-time income tax benefit from the reduction of our deferred tax asset valuation allowance resulting from the Omniome acquisition, as well as a pro forma adjustment to reflect $16.7 million of Omniome’s acquisition-related costs.

The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of the consolidated results of the combined business had the acquisition actually occurred at the beginning of 2020 or the results of future operations of the combined business.

The following table summarizes the unaudited pro forma financial information:


	Years Ended December 31,
(in thousands, except per share amounts)	2021		2020
Pro forma total revenue	$	130,513	$	78,893
Pro forma net (loss) income	$	(278,451)	$	17,510
Pro forma net (loss) income per share - basic and diluted	$	(1.27)	$	0.09

Our consolidated financial statements include the results of operations for Omniome beginning September 20, 2021. Revenues of $0 and a net loss of $15.6 million from the acquired Omniome business have been included in our Consolidated Statement of Operations and Comprehensive (Loss) Income for the twelve months ended December 31, 2021.

Circulomics, Inc.

On July 20, 2021, we acquired Circulomics Inc. (“Circulomics”), a Maryland-based biotechnology company focused on delivering highly differentiated sample preparation products that enable genomic workflows (the “Circulomics acquisition”).

We paid $29.5 million in cash in exchange for all outstanding shares of common stock of Circulomics. We allocated the consideration transferred to the identifiable assets acquired and liabilities assumed based on their respective fair values at the date of the completion of the Circulomics acquisition. The major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred were as follows (in thousands):


Cash and cash equivalents	$	987
Property and equipment, net	214
Intangible assets	11,360
Goodwill	19,309
Other assets, non-current	467
Deferred income tax liability	(2,672)
Liabilities assumed	(118)
Total consideration transferred	$	29,547

The excess of the value of consideration paid over the aggregate fair value of those net assets has been recorded as goodwill. We recognized goodwill of $19.3 million, which is primarily attributable to the synergies expected from capabilities in extraction and sample preparation and is not deductible for income tax purposes. We recorded $11.4 million for the fair value of acquired intangible assets, which consists of developed technology and customer relationships.

INCOME TAXES - Reconciliation of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Net operating loss carryforwards	$ 435,488	$ 400,629
Research and development credits	83,922	71,526
Capitalized research and experimental expenses	63,196	34,863
Accruals and reserves	16,872	13,830
Cancellation of indebtedness income and interest expense	14,907	4,587
Share-based compensation	18,584	17,117
Operating lease liability	9,510	11,537
Total deferred tax assets	642,479	554,089
Less: Valuation allowance	(525,703)	(445,574)
Total deferred tax assets:	116,776	108,515
Intangibles	(109,488)	(98,931)
Fixed assets	(548)	(1,262)
Operating lease right-of-use assets	(7,491)	(9,157)
Total deferred tax liabilities	(117,527)	(109,350)
Deferred tax liabilities, net	$ (751)	$ (835)

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Leases

We record operating lease right-of-use assets and liabilities on our consolidated balance sheets for all leases with a term of more than 12 months. In connection with the acquisition of Omniome, we acquired $18.1 million in right-of-use assets and liabilities on our consolidated balance sheets. The operating lease right-of-use assets and liabilities are calculated as the present value of remaining minimum lease payments over the remaining lease term using our estimated secured incremental borrowing rates at the commencement date. Lease payments included in the measurement of the lease liability comprise the fixed rent per the term of the Lease. All of our leases are operating leases. Lease payments comprise the base rent per the term of the Lease. Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease payments, such as common area maintenance fees, recognized in the period those payments are incurred.

We often have options to renew lease terms for buildings. In addition, certain lease arrangements may be terminated prior to their original expiration date at our discretion. We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors.

As of December 31, 2023, the maturities of our operating lease liabilities were as follows:


(in thousands)
2024	$	12,082
2025	12,307
2026	12,412
2027	9,930
2028	—
Thereafter	—
Total undiscounted operating lease payments	46,731
Less: imputed interest	(5,534)
Present value of operating lease liabilities	$	41,197

Balance Sheet Classification
Operating lease liabilities, current	$	9,591
Operating lease liabilities, non-current	31,606
Total operating lease liabilities	$	41,197

We use our incremental borrowing rate to determine the present value of lease payments, as the implicit rates in our leases are not readily determinable. The weighted-average discount rate used to measure our operating lease liabilities was 6.8%. The weighted-average remaining lease term for our operating leases as of December 31, 2023 was 3.8 years.

Cash Flows

Cash paid for amounts included in the present value of operating lease liabilities was $12.1 million and $11.2 million for the years ended December 31, 2023 and 2022, respectively, and were included in operating cash flows.

Operating Lease Costs

Operating lease costs were $10.4 million and $10.5 million for the years ended December 31, 2023 and 2022, respectively.

Contingencies

We may become involved in legal proceedings, claims and assessments from time to time in the ordinary course of business. We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

We do not believe that the ultimate outcome of any such pending matters is probable or reasonably estimable, or that these matters will have a material adverse effect on our business; however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of litigation and settlement costs, diversion of management resources, and other factors.

Please see subsection titled Legal Proceedings, in Part I, Item 3 of this Annual Report on Form 10-K.

Indemnification

Pursuant to Delaware law and agreements entered into with each of our directors and officers, we may have obligations, under certain circumstances, to hold harmless and indemnify each of our directors and officers against losses suffered or incurred by the indemnified party in connection with their service to us, and judgements, fines, settlements and expenses related to claims arising against such directors and officers to the fullest extent permitted under Delaware law, our bylaws and our certificate of incorporation. We also enter and have entered into indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law. In addition, we may have obligations to hold harmless and indemnify third parties involved with our fundraising efforts and their respective affiliates, directors, officers, employees, agents or other representatives against any and all losses, claims, damages and liabilities related to claims arising against such parties pursuant to the terms of agreements entered into between such third parties and us in

connection with such fundraising efforts. 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 December 31, 2023.

Purchase Commitments

In the normal course of business, we enter into agreements to purchase goods or services or license intellectual property, certain of which are not cancellable without penalty. For those agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities or pricing as of the reporting date. Licensing agreements under which we commit to ongoing minimum royalty payments, some of which are subject to adjustment, may be terminated under certain circumstances.

Our purchase orders and contractual obligations are approximately $109.9 million as of December 31, 2023, which consist of open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers for which we have not received the goods or services. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.

We recognized a loss on purchase commitment of $3.4 million for the year ended December 31, 2023, which was recorded as part of accrued expenses on the consolidated balance sheet and is included in the aforementioned purchase orders and contractual obligations amount. The purchase commitment loss is based on an estimate of future excess inventory related to a supply agreement with a third-party vendor, for which we do not expect to have related sales.

We have a long-term supply agreement, which was amended in October 2022 (the “Supply Agreement”), for the purchase of certain products with a semiconductor manufacturer (“Supplier”). The Supply Agreement provides for minimum purchase commitments through 2026 on our part in exchange for guaranteed capacity at Supplier. We are responsible for providing certain materials to allow our Supplier to perform its obligations under the contract.

We paid our Supplier a deposit of $9.0 million in November 2022 and an additional deposit of $6.0 million in 2023, for a total of $15.0 million (the “Deposit”). The Deposit is fully refundable to us, in accordance with the Supply Agreement, if we meet the minimum volume purchase commitment for the applicable year. As of December 31, 2023, $3.0 million related to the Deposit was included in prepaid expenses and other current assets in the consolidated balance sheets and $12.0 million related to the Deposit was included in other long-term assets in the consolidated balance sheets, as we believe it is probable the minimum volume purchase commitment level will be achieved.

- Definition

The entire disclosure for loss and gain contingencies. Describes any existing condition, situation, or set of circumstances involving uncertainty as of the balance sheet date (or prior to issuance of the financial statements) as to a probable or reasonably possible loss incurred by an entity that will ultimately be resolved when one or more future events occur or fail to occur, and typically discloses the amount of loss recorded or a range of possible loss, or an assertion that no reasonable estimate can be made.

+ References + Details

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Reconciliation of Federal Income Tax Rate

Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax loss as follows:


	Years ended December 31,
	2023		2022		2021
Statutory tax rate	21.0	%	21.0	%	21.0	%
State tax rate, net of federal benefit	3.0		4.4		5.5
Change in valuation allowance	(20.0)		(25.1)		(4.9)
Tax credits	2.0		2.2		2.5
Share-based compensation	(2.1)		(2.2)		10.9
Merger Expenses	(0.1)		—		(0.9)
Other	(0.2)		(0.4)		(0.1)
Total	3.6	%	(0.1)	%	34.0	%

Reconciliation of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands):


	December 31,
	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	435,488	$	400,629
Research and development credits	83,922		71,526
Capitalized research and experimental expenses	63,196		34,863
Accruals and reserves	16,872		13,830
Cancellation of indebtedness income and interest expense	14,907		4,587
Share-based compensation	18,584		17,117
Operating lease liability	9,510		11,537
Total deferred tax assets	642,479		554,089
Less: Valuation allowance	(525,703)		(445,574)
Total deferred tax assets:	116,776		108,515
Intangibles	(109,488)		(98,931)
Fixed assets	(548)		(1,262)
Operating lease right-of-use assets	(7,491)		(9,157)
Total deferred tax liabilities	(117,527)		(109,350)
Deferred tax liabilities, net	$	(751)	$	(835)

Reconciliation of Unrecognized Tax Benefit Accounts

As of December 31, 2023, our total unrecognized tax benefit was $14.6 million. A reconciliation of the beginning and ending unrecognized tax benefit balance is as follows (in thousands):


Balance as of December 31, 2020	$	5,954
Increase in balance related to tax positions taken in prior year	189
Increase in balance related to tax positions taken during current year	2,192
Balance as of December 31, 2021	8,335
Decrease in balance related to tax positions taken in prior year	(10)
Increase in balance related to tax positions taken during current year	2,085
Balance as of December 31, 2022	10,410
Increase in balance related to tax positions taken in prior year	2,044
Increase in balance related to tax positions taken during current year	2,100
Balance as of December 31, 2023	$	14,554

Schedule of Components of Income Tax Expense (Benefit)

The provision (benefit) for income taxes consists of the following (in thousands):


	Years ended December 31,
	2023		2022		2021
Total Current	$	—	$	—	$	—

Deferred:
Federal	(9,956)		—		(83,742)
State	(1,468)		—		(9,907)
Foreign	—		—		—
Total Deferred	(11,424)		—		(93,649)
(Benefit) Provision for Income Taxes	$	(11,424)	$	—	$	(93,649)

SEGMENT AND GEOGRAPHIC INFORMATION Summary of Revenue by Category (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 200,521	$ 128,304	$ 130,513
Product revenue
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	183,872	108,699	113,505
Instrument revenue
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	120,451	48,719	61,324
Consumable revenue
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	63,421	59,980	52,181
Service and other revenue
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 16,649	$ 19,605	$ 17,008

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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-Topic 606
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 22
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (b)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

BUSINESS ACQUISITIONS - Narrative (Details)					12 Months Ended
BUSINESS ACQUISITIONS - Narrative (Details)	Sep. 20, 2023 USD ($) shares	Aug. 02, 2023 USD ($) d shares	Sep. 20, 2021 USD ($) shares	Jul. 20, 2021 USD ($)	Dec. 31, 2023 USD ($) shares	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($) shares
Business Acquisition [Line Items]
Issuance of common stock in connection with Apton liquidity event bonus plan					$ 2,111,000
Merger-related expenses					9,042,000	$ 0	$ 31,129,000
Total share-based compensation expense					72,118,000	78,613,000	$ 80,728,000
Gross Carrying Amount				$ 11,400,000	$ 411,539,000
Common Stock
Business Acquisition [Line Items]
Issuance of common stock in acquisition (in shares) \| shares					6,121,000		8,912,000
Issuance of common stock in connection with liquidity event bonus plan (in shares) \| shares					169,000
Apton
Business Acquisition [Line Items]
Fair value of share consideration		$ 76,600,000
Total cash paid		200,000
Fair value of contingent consideration		18,500,000			$ 19,550,000	0
Less: Share-based compensation expense excluded from consideration transferred		$ (1,300,000)
Issuance of common stock in acquisition (in shares) \| shares		6,121,571			6,300,000
Milestone revenue		$ 50,000,000
Anniversary		5 years
Average trading period \| d		20
Decrease to goodwill					$ 1,600,000
Increase in intangible assets					2,000,000
Decrease in deferred tax liability					400,000
Decrease (increase) to our benefit from income taxes					(700,000)
Merger related transaction costs					9,000,000
Merger-related expenses					2,800,000
Issuance of common stock in connection with Apton liquidity event bonus plan					2,100,000
Goodwill, acquired during period					$ 52,300,000
In-process research and development		$ 55,000,000
Apton \| Common Stock
Business Acquisition [Line Items]
Issuance of common stock in connection with liquidity event bonus plan (in shares) \| shares					168,621
Apton \| Maximum
Business Acquisition [Line Items]
Percentage of outstanding shares of common to be issued in merger		19.90%
Apton \| Achievement of Milestone
Business Acquisition [Line Items]
Fair value of contingent consideration		$ 25,000,000
Omniome, Inc
Business Acquisition [Line Items]
Fair value of share consideration			$ 249,435,000
Total cash paid	$ 100,900,000		$ 315,703,000
Fair value of contingent consideration					$ 0	$ 172,094,000
Issuance of common stock in acquisition (in shares) \| shares	9,000,000		8,911,580
Decrease to goodwill							$ 1,600,000
Decrease in deferred tax liability							400,000
Decrease (increase) to our benefit from income taxes							1,200,000
In-process research and development			$ 400,000,000
Fair value of contingent consideration			168,574,000
Total consideration transferred			714,789,000
Merger-related expenses							12,000,000
Total share-based compensation expense			18,923,000
Income tax benefit from reduction in deferred tax assets valuation allowance			91,000,000
Pro forma adjustment related to acquiree's acquisition-related costs			16,700,000
Since the date of acquisition, revenues							0
Since the date of acquisition, net loss							$ 15,600,000
Omniome, Inc \| Omniome Stock Awards Related to Acquisition
Business Acquisition [Line Items]
Fair value of share consideration			6,300,000
Total cash paid			$ 7,400,000
Issuance of common stock in acquisition (in shares) \| shares			226,811
Fair value of contingent consideration			$ 5,200,000
Total consideration transferred			18,900,000
Omniome, Inc \| Achievement of Milestone
Business Acquisition [Line Items]
Fair value of share consideration			100,000,000
Total cash paid			100,000,000
Fair value of contingent consideration			$ 200,000,000
Percentage of outstanding shares of common to be issued in merger			19.90%
Stock options issued			$ 4,100,000
Issuance of common stock in Private Placement, net of issuance costs			$ 11,500,000
Circulomics, Inc
Business Acquisition [Line Items]
Total cash paid				$ 29,500,000

NET LOSS PER SHARE

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding and potential shares assuming the dilutive effect of the convertible senior notes, using the if-converted method, and outstanding equity awards using the treasury stock method.

The following table presents the calculation of the basic and diluted net loss per share amounts presented in the consolidated statements of operations and comprehensive loss (in thousands, except per share amounts):


	Years Ended December 31,
	2023		2022		2021
Numerator:
Net loss	$	(306,735)	$	(314,248)	$	(181,223)

Denominator:
Basic
Weighted-average shares used in computing basic net loss per share	253,629		224,550		204,136
Basic net loss per share	$	(1.21)	$	(1.40)	$	(0.89)
Diluted




Weighted-average shares used in computing diluted net loss per share	253,629		224,550		204,136
Diluted net loss per share	$	(1.21)	$	(1.40)	$	(0.89)

The following shares issuable upon conversion of the convertible senior 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 (in thousands):


	Years Ended December 31,
(in thousands)	2023	2022	2021
Shares issuable upon conversion of convertible senior notes	31,063	20,690	20,690
Equity awards	27,246	27,291	21,419

As described in Note 2. Business Acquisitions, the contingently issuable shares would be due upon the achievement of a milestone. See Note 10. Stockholders’ Equity for detailed information on RSUs with time-based vesting and RSUs with performance-based vesting.

CONVERTIBLE SENIOR NOTES (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Net Carrying Amount

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


	December 31,
	2023		2022
Principal amount	$	441,000	$	—
Unamortized debt premium	$	524	$	—
Unamortized debt issuance costs	$	(6,907)	$	—
Net carrying amount	$	434,617	$	—

The net carrying amount of the liability for the 2028 Notes is included as convertible senior notes, net, non-current in the consolidated balance sheets as follows (in thousands):


	December 31,
	2023		2022
Principal amount	$	459,000	$	900,000
Unamortized debt issuance costs	(1,374)		(3,317)
Net carrying amount	$	457,626	$	896,683

Schedule of Interest Expense

Interest expense for the 2030 Notes for the years ended December 31, 2023, 2022, and 2021 was as follows:


	Years Ended December 31,
(in thousands)	2023		2022		2021
Contractual interest expense	$	3,032	$	—	$	—
Amortization of debt issuance costs	463		—		—
Total interest expense	$	3,495	$	—	$	—

Interest expense for the 2028 Notes was as follows for the years ended December 31, 2023, 2022, and 2021:


	Years Ended December 31,
(in thousands)	2023		2022		2021
Contractual interest expense	$	10,133	$	13,500	$	11,812
Amortization of debt issuance costs	472		617		532
Total interest expense	$	10,605	$	14,117	$	12,344

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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+ Details

STOCKHOLDERS’ EQUITY - Summary of Stock Option Activity (Details)	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Time-Based Stock Option
Number of shares
Beginning balance (in shares) \| shares	14,618,000
Granted (in shares) \| shares	419,000
Exercised (in shares) \| shares	(1,119,000)
Canceled (in shares) \| shares	(910,000)
Ending balance (in shares) \| shares	13,008,000
Weighted-average exercise price
Beginning balance (in usd per share) \| $ / shares	$ 10.60
Granted (in usd per share) \| $ / shares	11.26
Exercised (in usd per share) \| $ / shares	4.74
Canceled (in usd per share) \| $ / shares	17.71
Ending balance (in usd per share) \| $ / shares	$ 10.63
Performance Stock Units (PSUs)
Number of shares
Granted (in shares) \| shares	0
Exercised (in shares) \| shares	(251,000)
Weighted-average exercise price
Granted (in usd per share) \| $ / shares	$ 0
Exercised (in usd per share) \| $ / shares	$ 4.71
Performance Stock Units (PSUs) \| Omniome Plan
Number of shares
Beginning balance (in shares) \| shares	258,000
Canceled (in shares) \| shares	(4,000)
Ending balance (in shares) \| shares	3,000
Weighted-average exercise price
Beginning balance (in usd per share) \| $ / shares	$ 4.71
Canceled (in usd per share) \| $ / shares	4.71
Ending balance (in usd per share) \| $ / shares	$ 4.74

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Estimated Useful Lives of The Major Classes of Property and Equipment

Estimated useful lives of the major classes of property and equipment are as follows:


			Estimated Useful Lives
Leasehold improvements			3 to 10 years
Lab equipment			3 to 5 years
Computer equipment			3 to 5 years
Computer software			3 years
Furniture and fixtures			3 to 5 years

Property and equipment, net, consisted of the following components:


	December 31,
(in thousands)	2023		2022
Laboratory equipment and machinery	$	44,907	$	38,998
Leasehold improvements	35,226		34,129
Computer equipment	19,528		18,438
Software	6,628		6,879
Furniture and fixtures	3,594		3,426
Construction in progress	1,343		4,698
Total	111,226		106,568
Less: Accumulated depreciation	(74,794)		(64,988)
Property and equipment, net	$	36,432	$	41,580

SEGMENT AND GEOGRAPHIC INFORMATION - Schedule of Revenue by Geographic Location (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 200,521	$ 128,304	$ 130,513
Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	105,410	69,561	64,521
Europe, Middle East, and Africa
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	40,658	22,598	30,271
Asia-Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 54,453	$ 36,145	$ 35,721

- Definition

+ References

+ Details

INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

We are subject to income taxes both in the United States and certain foreign jurisdictions in which we operate, and we use estimates in determining our provisions for income taxes. Significant management judgement is required in determining our provision for income taxes, deferred tax assets and liabilities, and valuation allowances recorded against net deferred tax assets in accordance with U.S. GAAP. These estimates and judgements occur in the calculation of tax credits, benefits, and deductions, and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions. Significant changes to these estimates may result in an increase or decrease to our tax provision in the current or subsequent period.

We assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we will determine whether the factors underlying the sustainability assertion have changed and the amount of the recognized tax benefit is still appropriate.

We account for Global Intangible Low-taxed Income as a period cost.

During the years ended December 31, 2023, 2022, and 2021 income/(loss) before taxes from U.S. operations were ($318.9) million, ($315.7) million, and ($275.4) million, respectively, and income/(loss) before taxes from foreign operations was $0.7 million, $1.8 million, and $0.8 million, respectively.

Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes consists of the following (in thousands):


	Years ended December 31,
	2023		2022		2021
Total Current	$	—	$	—	$	—

Deferred:
Federal	(9,956)		—		(83,742)
State	(1,468)		—		(9,907)
Foreign	—		—		—
Total Deferred	(11,424)		—		(93,649)
(Benefit) Provision for Income Taxes	$	(11,424)	$	—	$	(93,649)

Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax loss as follows:


	Years ended December 31,
	2023		2022		2021
Statutory tax rate	21.0	%	21.0	%	21.0	%
State tax rate, net of federal benefit	3.0		4.4		5.5
Change in valuation allowance	(20.0)		(25.1)		(4.9)
Tax credits	2.0		2.2		2.5
Share-based compensation	(2.1)		(2.2)		10.9
Merger Expenses	(0.1)		—		(0.9)
Other	(0.2)		(0.4)		(0.1)
Total	3.6	%	(0.1)	%	34.0	%

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands):


	December 31,
	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	435,488	$	400,629
Research and development credits	83,922		71,526
Capitalized research and experimental expenses	63,196		34,863
Accruals and reserves	16,872		13,830
Cancellation of indebtedness income and interest expense	14,907		4,587
Share-based compensation	18,584		17,117
Operating lease liability	9,510		11,537
Total deferred tax assets	642,479		554,089
Less: Valuation allowance	(525,703)		(445,574)
Total deferred tax assets:	116,776		108,515
Intangibles	(109,488)		(98,931)
Fixed assets	(548)		(1,262)
Operating lease right-of-use assets	(7,491)		(9,157)
Total deferred tax liabilities	(117,527)		(109,350)
Deferred tax liabilities, net	$	(751)	$	(835)

At December 31, 2023, we maintained a valuation allowance against our net deferred tax assets which totaled $525.7 million, including net operating loss carryforwards and research and development credits of $435.5 million and $83.9 million, respectively.

A valuation allowance is recorded when it is more likely than not that all or some portion of the deferred income tax assets will not be realized. We regularly assess the need for a valuation allowance against our deferred income tax assets by considering both positive and negative evidence related to whether it is more likely than not that our deferred income tax assets will be realized. In evaluating our ability to recover our deferred income tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. A deferred income tax benefit of $11.4 million for the year ended December 31, 2023, is related to the release of the valuation allowance for deferred tax assets due to the recognition of deferred tax liabilities in connection with the Apton acquisition. We maintain a valuation allowance on the net deferred tax assets of our U.S. entities as we have concluded that it is more likely than not that we will not realize our deferred tax assets. Accordingly, this benefit from income taxes is reflected on our consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

For the year ended December 31, 2023, the Company's valuation allowance increased to $525.7 million, primarily because of an increase in our net operating losses, credits, and capitalized research and experimental expenses that were fully offset by a valuation allowance. For the year ended December 31, 2022, the Company's valuation allowance increased to $445.6 million, primarily because of an increase in our net operating losses, credits, and capitalized research and experimental expenses that were fully offset by a valuation allowance.

As of December 31, 2023, we had a net operating loss carryforward for federal income tax purposes of approximately $1,709.3 million, of which $788.1 million is subject to expiration beginning in 2024. We had a total state net operating loss carryforward of approximately $1,171.8 million, which are subject to annual expirations. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization.

We have federal credits of approximately $57.7 million, which will begin to expire in 2024 if not utilized and state research credits of approximately $49.8 million, which have no expiration date. These tax credits are subject to the same limitations discussed above.

As of December 31, 2023, our total unrecognized tax benefit was $14.6 million. A reconciliation of the beginning and ending unrecognized tax benefit balance is as follows (in thousands):


Balance as of December 31, 2020	$	5,954
Increase in balance related to tax positions taken in prior year	189
Increase in balance related to tax positions taken during current year	2,192
Balance as of December 31, 2021	8,335
Decrease in balance related to tax positions taken in prior year	(10)
Increase in balance related to tax positions taken during current year	2,085
Balance as of December 31, 2022	10,410
Increase in balance related to tax positions taken in prior year	2,044
Increase in balance related to tax positions taken during current year	2,100
Balance as of December 31, 2023	$	14,554

Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2023 and 2022, we had no accrued interest or penalties due to our net operating losses available to offset any tax adjustment. If total unrecognized tax benefits were realized in the future, it would not result in any tax benefit as we currently have a full valuation allowance. We file U.S. federal and various state income tax returns. For U.S. federal and state income tax purposes, the statute of limitations currently remains open for the years ending December 31, 2020 to present and December 31, 2019 to present, respectively. In addition, all the net operating losses and research and development credit carryforwards that may be utilized in future years may be subject to examination. We are not currently under examination by income tax authorities in any jurisdiction.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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+ Details

FINANCIAL INSTRUMENTS - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Aug. 02, 2023	Dec. 31, 2022
Assets
Total cash and cash equivalents	$ 179,911		$ 325,089
Total investments	451,505		447,229
Short-term restricted cash	300		300
Long-term restricted cash	2,422		2,922
Total assets measured at fair value	634,138		775,540
Liabilities
Total liabilities measured at fair value	19,550		172,094
Omniome, Inc
Liabilities
Contingent consideration	0		172,094
Apton
Liabilities
Contingent consideration	19,550	$ 18,500	0
Cash and money market funds
Assets
Total cash and cash equivalents	70,172		137,636
Commercial paper
Assets
Total cash and cash equivalents	0		166,453
U.S. government & agency securities
Assets
Total cash and cash equivalents	109,739		21,000
Commercial paper
Assets
Total investments	9,947		127,302
Corporate debt securities
Assets
Total investments	88,579		49,491
U.S. government & agency securities
Assets
Total investments	352,979		270,436
Level 1
Assets
Total cash and cash equivalents	70,172		137,636
Total investments	0		0
Short-term restricted cash	300		300
Long-term restricted cash	2,422		2,922
Total assets measured at fair value	72,894		140,858
Liabilities
Total liabilities measured at fair value	0		0
Level 1 \| Omniome, Inc
Liabilities
Contingent consideration	0		0
Level 1 \| Apton
Liabilities
Contingent consideration	0		0
Level 1 \| Cash and money market funds
Assets
Total cash and cash equivalents	70,172		137,636
Level 1 \| Commercial paper
Assets
Total cash and cash equivalents	0		0
Level 1 \| U.S. government & agency securities
Assets
Total cash and cash equivalents	0		0
Level 1 \| Commercial paper
Assets
Total investments	0		0
Level 1 \| Corporate debt securities
Assets
Total investments	0		0
Level 1 \| U.S. government & agency securities
Assets
Total investments	0		0
Level 2
Assets
Total cash and cash equivalents	109,739		187,453
Total investments	451,505		447,229
Short-term restricted cash	0		0
Long-term restricted cash	0		0
Total assets measured at fair value	561,244		634,682
Liabilities
Total liabilities measured at fair value	0		0
Level 2 \| Omniome, Inc
Liabilities
Contingent consideration	0		0
Level 2 \| Apton
Liabilities
Contingent consideration	0		0
Level 2 \| Cash and money market funds
Assets
Total cash and cash equivalents	0		0
Level 2 \| Commercial paper
Assets
Total cash and cash equivalents	0		166,453
Level 2 \| U.S. government & agency securities
Assets
Total cash and cash equivalents	109,739		21,000
Level 2 \| Commercial paper
Assets
Total investments	9,947		127,302
Level 2 \| Corporate debt securities
Assets
Total investments	88,579		49,491
Level 2 \| U.S. government & agency securities
Assets
Total investments	352,979		270,436
Level 3
Assets
Total cash and cash equivalents	0		0
Total investments	0		0
Short-term restricted cash	0		0
Long-term restricted cash	0		0
Total assets measured at fair value	0		0
Liabilities
Contingent consideration	19,550		172,094
Total liabilities measured at fair value	19,550		172,094
Level 3 \| Omniome, Inc
Liabilities
Contingent consideration	0		172,094
Level 3 \| Apton
Liabilities
Contingent consideration	19,550		0
Level 3 \| Cash and money market funds
Assets
Total cash and cash equivalents	0		0
Level 3 \| Commercial paper
Assets
Total cash and cash equivalents	0		0
Level 3 \| U.S. government & agency securities
Assets
Total cash and cash equivalents	0		0
Level 3 \| Commercial paper
Assets
Total investments	0		0
Level 3 \| Corporate debt securities
Assets
Total investments	0		0
Level 3 \| U.S. government & agency securities
Assets
Total investments	$ 0		$ 0

Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2020		192,294,000
Beginning balance at Dec. 31, 2020	$ 335,491	$ 192	$ 1,372,083	$ 85	$ (1,036,869)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(181,223)				(181,223)
Other comprehensive (loss) income	(1,172)			(1,172)
Issuance of common stock in conjunction with equity plans (in shares)		8,557,000
Issuance of common stock in conjunction with equity plans	31,806	$ 9	31,797
Issuance of common stock in Private Placement/Underwritten Public Offering, net of issuance costs (in shares)		11,215,000
Issuance of common stock in Private Placement/Underwritten Public Offering, net of issuance costs	294,845	$ 11	294,834
Issuance of common stock in acquisition (in shares)		8,912,000
Issuance of common stock in acquisition	237,885	$ 9	237,876
Share-based compensation expense	73,355		73,355
Ending balance at Dec. 31, 2021	790,987	$ 221	2,009,945	(1,087)	(1,218,092)
Ending balance (in shares) at Dec. 31, 2021		220,978,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(314,248)				(314,248)
Other comprehensive (loss) income	(3,678)			(3,678)
Issuance of common stock in conjunction with equity plans (in shares)		5,527,000
Issuance of common stock in conjunction with equity plans	11,230	$ 6	11,224
Share-based compensation expense	78,613		78,613
Ending balance at Dec. 31, 2022	$ 562,904	$ 227	2,099,782	(4,765)	(1,532,340)
Ending balance (in shares) at Dec. 31, 2022	226,505,000	226,505,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (306,735)				(306,735)
Other comprehensive (loss) income	4,984			4,984
Issuance of common stock in conjunction with equity plans (in shares)		5,836,000
Issuance of common stock in conjunction with equity plans	15,319	$ 6	15,313
Issuance of common stock in Private Placement/Underwritten Public Offering, net of issuance costs (in shares)		20,125,000
Issuance of common stock in Private Placement/Underwritten Public Offering, net of issuance costs	189,200	$ 20	189,180
Issuance of common stock in acquisition (in shares)		6,121,000
Issuance of common stock in acquisition	76,642	$ 6	76,636
Share-based compensation expense	$ 72,118		72,118
Issuance of common stock following milestone achievement (in shares)	8,988,391	8,988,000
Issuance of common stock following milestone achievement	$ 84,761	$ 9	84,752
Issuance of common stock in connection with liquidity event bonus plan (in shares)		169,000
Issuance of common stock in connection with Apton liquidity event bonus plan	2,111		2,111
Ending balance at Dec. 31, 2023	$ 701,304	$ 268	$ 2,539,892	$ 219	$ (1,839,075)
Ending balance (in shares) at Dec. 31, 2023	267,744,000	267,744,000

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenue:
Total revenue	$ 200,521	$ 128,304	$ 130,513
Cost of Revenue:
Amortization of acquired intangible assets	1,983	733	306
Loss on purchase commitment	3,436	3,705	0
Total cost of revenue	147,741	79,269	71,653
Gross profit	52,780	49,035	58,860
Operating Expense:
Research and development	187,170	193,000	112,899
Sales, general and administrative	169,818	160,854	124,124
Merger-related expenses	9,042	0	31,129
Change in fair value of contingent consideration	15,060	2,377	1,143
Amortization of acquired intangible assets	6,157	0	0
Total operating expense	387,247	356,231	269,295
Operating loss	(334,467)	(307,196)	(210,435)
Loss from Continuation Advances from Illumina	0	0	(52,000)
Loss on extinguishment of debt	(2,033)	0	0
Interest expense	(14,343)	(14,690)	(12,530)
Other income, net	32,684	7,638	93
Loss before benefit from income taxes	(318,159)	(314,248)	(274,872)
Benefit from income taxes	(11,424)	0	(93,649)
Net loss	(306,735)	(314,248)	(181,223)
Other comprehensive income (loss):
Unrealized gain (loss) on investments	4,984	(3,678)	(1,172)
Comprehensive loss	$ (301,751)	$ (317,926)	$ (182,395)
Net loss per share:
Basic (in usd per share)	$ (1.21)	$ (1.40)	$ (0.89)
Diluted (in usd per share)	$ (1.21)	$ (1.40)	$ (0.89)
Earnings Per Share, Basic, Other Disclosure [Abstract]
Basic (in shares)	253,629	224,550	204,136
Diluted (in shares)	253,629	224,550	204,136
Product revenue
Revenue:
Total revenue	$ 183,872	$ 108,699	$ 113,505
Cost of Revenue:
Cost of product revenue	127,568	60,932	56,358
Service and other revenue
Revenue:
Total revenue	16,649	19,605	17,008
Cost of Revenue:
Cost of service and other revenue	$ 14,754	$ 13,899	$ 14,989

BALANCE SHEET COMPONENTS - Future Principal Payments , Fiscal Year Maturity (Details) - Omniome, Inc $ in Thousands	Dec. 31, 2023 USD ($)
Long-Term Debt, Fiscal Year Maturity [Abstract]
2024	$ 490
Total	$ 490

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 179,911	$ 325,089
Investments	451,505	447,229
Accounts receivable, net	36,615	18,786
Inventory, net	56,676	50,381
Prepaid expenses and other current assets	17,040	10,289
Short-term restricted cash	300	300
Total current assets	742,047	852,074
Property and equipment, net	36,432	41,580
Operating lease right-of-use assets, net	32,593	39,763
Long-term restricted cash	2,422	2,922
Intangible assets, net	456,984	410,245
Goodwill	462,261	409,974
Other long-term assets	13,274	10,528
Total assets	1,746,013	1,767,086
Current liabilities
Accounts payable	15,062	12,028
Accrued expenses	45,708	32,596
Deferred revenue, current	16,342	30,498
Operating lease liabilities, current	9,591	8,886
Other liabilities, current	8,326	7,233
Contingent consideration liability, current	0	172,094
Total current liabilities	95,029	263,335
Deferred revenue, non-current	5,530	1,794
Contingent consideration liability, non-current	19,550	0
Operating lease liabilities, non-current	31,606	41,070
Convertible senior notes, net, non-current	892,243	896,683
Other liabilities, non-current	751	1,300
Total liabilities	1,044,709	1,204,182
Commitments and contingencies
Stockholders’ equity
Authorized 50,000 shares; No shares issued or outstanding	0	0
Authorized 1,000,000 shares; issued and outstanding 267,744 and 226,505 shares at December 31, 2023 and December 31, 2022, respectively	268	227
Additional paid-in capital	2,539,892	2,099,782
Accumulated other comprehensive income (loss)	219	(4,765)
Accumulated deficit	(1,839,075)	(1,532,340)
Total stockholders’ equity	701,304	562,904
Total liabilities and stockholders’ equity	$ 1,746,013	$ 1,767,086

BALANCE SHEET COMPONENTS

12 Months Ended

Dec. 31, 2023

Balance Sheet Components [Abstract]

BALANCE SHEET COMPONENTS

Inventory, Net

Inventory, net, consisted of the following components:


	December 31,
(in thousands)	2023		2022
Purchased materials	$	20,168	$	24,139
Work in process	23,436		14,062
Finished goods	13,072		12,180
Inventory, net	$	56,676	$	50,381

Property and Equipment, Net

Property and equipment, net, consisted of the following components:


	December 31,
(in thousands)	2023		2022
Laboratory equipment and machinery	$	44,907	$	38,998
Leasehold improvements	35,226		34,129
Computer equipment	19,528		18,438
Software	6,628		6,879
Furniture and fixtures	3,594		3,426
Construction in progress	1,343		4,698
Total	111,226		106,568
Less: Accumulated depreciation	(74,794)		(64,988)
Property and equipment, net	$	36,432	$	41,580

Construction in progress consists of capitalizable costs that have been incurred for the construction of long-lived assets and is primarily comprised of amounts that will be classified as lab equipment.

Depreciation expense during the years ended December 31, 2023, 2022, and 2021 was $11.5 million, $9.5 million, and $7.2 million, respectively.

Goodwill and intangible Assets

Goodwill

As of December 31, 2023 and 2022, the goodwill balance was $462.3 million and $410.0 million, respectively. Goodwill preliminarily increased by $52.3 million, due to the Apton acquisition, of which $11.3 million relates to a deferred income tax liability. Goodwill is reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment. We performed our annual assessment for goodwill impairment in the second quarter of 2023, noting no impairment.

Acquired Intangible Assets

Intangible assets include acquired IPR&D of $55.0 million as a result of the Apton acquisition in August 2023. As of December 31, 2023, the research and development project had not been completed or abandoned and, therefore, the IPR&D intangible asset is not currently subject to amortization. During the year ended December 31, 2023, acquired IPR&D of $400.0 million as a result of the Omniome acquisition in September 2021 was completed and became subject to amortization. IPR&D is reviewed for impairment at least annually, or more frequently if an event occurs indicating the potential for impairment. We performed our annual assessment for IPR&D impairment in the third quarter of 2023, noting no impairment.

In addition to IPR&D, we had the following acquired definite-lived intangible assets as of December 31, 2023 (in thousands, except years):


	Estimated Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	15	$	411,179	$	(9,195)	$	401,984
Customer relationships	2	360		(360)		—
Total		$	411,539	$	(9,555)	$	401,984

Amortization expense of intangibles was $8.3 million, $0.9 million and $0.4 million for the years ended December 31, 2023, 2022, and 2021, respectively. For the years ended December 31, 2023, 2022, and 2021 amortization expense of intangibles in cost of revenue was $2.0 million, $0.7 million, and $0.3 million, respectively. For the years ended December 31, 2023, 2022, and 2021, amortization expense of intangibles in operating expenses was $6.3 million, $0.2 million, and $0.1 million, respectively.

Amortization of intangible assets is included within our cost of revenue if the costs and expenses related to the intangible assets are attributable to revenue generating activities. Amortization expense for intangible assets that are not directly related to sales generating activities are amortized to operating expenses. For developed technology intangible assets that are utilized in both revenue generating activities and in research and development activities, we allocate the amortization expense between cost of revenue and operating expenses. The definite-lived intangible assets are amortized using the straight-line method over their estimated useful lives.

The estimated future amortization expense of acquisition-related intangible assets with definite lives is estimated as follows (in thousands):


2024	$	27,412
2025	27,412
2026	27,412
2027	27,412
2028	27,412
2029 and thereafter	264,924
Total	$	401,984

Accrued Expenses

Accrued expenses consisted of the following components:


	December 31,
(in thousands)	2023		2022
Salaries and benefits	$	29,337	$	17,432
Accrued interest payable	2,834		5,100
Accrued purchase commitments	2,613		3,705
Accrued product development costs	1,033		2,326
Accrued professional services and legal fees	2,641		1,005
Inventory accrual	353		332
Warranty accrual	4,681		1,651
Other	2,216		1,045
Accrued expenses	$	45,708	$	32,596

Product Warranties

We generally provide a one-year warranty on instruments. In addition, we provide a limited warranty on consumables. At the time revenue is recognized, an accrual is established for estimated warranty costs based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated

costs to be incurred. Warranty expense is recorded as a component of cost of product revenue. There were no material changes in estimates for the periods presented below.

Changes in the reserve for product warranties were as follows:


	Years Ended December 31,
(in thousands)	2023		2022
Balance at beginning of period	$	1,651	$	594
Additions charged to cost of product revenue	8,227		3,199
Repairs and replacements	(5,197)		(2,142)
Balance at end of period	$	4,681	$	1,651

Deferred Revenue

As of December 31, 2023, we had a total of $21.9 million of deferred revenue, $16.3 million of which was recorded as deferred revenue, current and primarily relates to future performance obligations under the Amended and Restated Agreement with Invitae, as described in Note 3. Invitae Collaboration, as well as deferred service contract revenues. The deferred revenue, non-current balance of $5.6 million primarily relates to future performance obligations under the Amended and Restated Agreement with Invitae and deferred service contract revenues and is scheduled to be recognized in the next 5 years. The deferred revenue, non-current balance includes $2.9 million that was reclassified from deferred revenue, current to deferred revenue, non-current following receipt of a non-cancellable order from Invitae during the year ended December 31, 2023 for partial utilization of the available credits, which is expected to be recognized in revenue after 12 months from December 31, 2023. Revenue recorded in the year ended December 31, 2023 includes $18.9 million of previously deferred revenue that was included in deferred revenue, current as of December 31, 2022.

Term Loans

In connection with the acquisition of Omniome, we acquired $1.3 million in short-term debt and $3.0 million in long-term debt relating to a term loan facility that Omniome obtained in April 2020. Borrowings on the term loan facility were used to fund Omniome’s purchases of equipment, which serves as collateral. Each term loan has a term of 43 months and bears a fixed interest rate of approximately 17% annually. The fee for the elective option to prepay all, but not less than all, of the borrowed amounts at any time after the 24th month and before the 43rd month after the commencement date, is 4% of the outstanding loan balance. Payments are made in equal monthly installments including principal and interest.

As of December 31, 2023, the carrying value of term loans outstanding was $0.5 million, recorded as part of other liabilities, current on the consolidated balance sheet. The interest expense was $0.3 million for the year ended December 31, 2023, which was included as part of interest expense in the consolidated statements of operations and comprehensive loss.

As of December 31, 2023, the future principal payments remaining on term loans was the following:


(in thousands)
2024	$	490
Total	$	490

Other Liabilities, Current

Other liabilities, current, consisted of the following components:


	December 31,
(in thousands)	2023		2022
Accrued Employee Stock Purchase Plan	$	3,715	$	3,638
Short-term loan	490		1,842
Other	4,121		1,753
Other liabilities, current	$	8,326	$	7,233

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

STOCKHOLDERS’ EQUITY - Narrative (Details) $ / shares in Units, $ in Thousands					1 Months Ended			12 Months Ended
	May 22, 2022 shares	Nov. 22, 2021 shares	Sep. 20, 2021 USD ($) $ / shares shares	Apr. 18, 2021 shares	Jan. 31, 2023 USD ($) $ / shares shares	Nov. 30, 2020 USD ($) $ / shares shares	Aug. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) period $ / shares vote offering shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares offering shares	Dec. 02, 2020 shares	Oct. 31, 2010 $ / shares shares
Stockholders' Equity [Line Items]
Common stock, shares authorized (in shares)								1,000,000,000	1,000,000,000			1,000,000,000
Common stock, par value (in dollars per share) \| $ / shares					$ 0.001			$ 0.001	$ 0.001			$ 0.001
Preferred stock, shares authorized (in shares)								50,000,000	50,000,000			50,000,000
Preferred stock, par value (in dollars per share) \| $ / shares								$ 0.001	$ 0.001			$ 0.001
Preferred stock, shares issued (in share)								0	0
Preferred stock, shares outstanding (in shares)								0	0
Common stock, dividends declared (in usd per share) \| $ / shares								$ 0
Voting right of common stock share holders								one
Voting right of common stock share holders, number of votes \| vote								1
Public offering (in shares)					17,500,000
Common stock offering price (in usd per share) \| $ / shares					$ 10.00
Public offering, option to purchase additional shares, period					30 days
Public offering, option to purchase additional shares (in shares)					2,600,000
Commissions, percentage of gross proceeds					5.75%
Proceeds from issuance of common stock from underwritten public equity offerings, net of issuance costs \| $					$ 189,700
Payments of offering expense \| $					$ 500
Common stock, shares issued (in shares)								267,744,000	226,505,000
Proceeds from issuance of common stock from equity plans \| $								$ 15,319	$ 11,230	$ 31,806
Vested and exercisable options (in shares)								30,000,000
Weighted average remaining contractual term								5 years 2 months 12 days
Vested and expected to vest, aggregate intrinsic value \| $								$ 31,600
Vested and expected to vest, weighted average exercise price (in usd per share) \| $ / shares								$ 10.81
Vested and expected to vest, weighted average remaining contractual life								5 years 9 months 18 days
Intrinsic value \| $								$ 8,800	$ 5,000	$ 146,100
Weighted average grant date fair value (in usd per share) \| $ / shares								$ 7.32	$ 5.93	$ 18.36
Stock-based compensation cost capitalized in inventory \| $								$ 600	$ 700
Dividend yield								0.00%	0.00%	0.00%
Public Stock Offering
Stockholders' Equity [Line Items]
Common stock, par value (in dollars per share) \| $ / shares						$ 0.001	$ 0.001
Public offering (in shares)						6,096,112	19,430,000
Common stock offering price (in usd per share) \| $ / shares						$ 14.25	$ 4.47
Public offering, option to purchase additional shares, period						30 days	30 days
Public offering, option to purchase additional shares (in shares)						914,416	2,914,500
Issuance of common stock in Private Placement, net of issuance costs (in shares)						7,000,000	22,300,000			29,400,000
Commissions, percentage of gross proceeds						6.00%	6.00%
Proceeds from issuance of common stock from underwritten public equity offerings, net of issuance costs \| $						$ 93,900	$ 93,900			$ 187,200
Offering costs \| $						$ 300	$ 300
Number of offerings \| offering								2		2
Price per share (in usd per share) \| $ / shares										$ 6.40
Shelf Offering
Stockholders' Equity [Line Items]
Shares issued (in shares)					20,100,000
Options To Purchase Common Stock
Stockholders' Equity [Line Items]
Stock price (in usd per share) \| $ / shares								$ 9.81
Weighted average grant date fair value (in usd per share) \| $ / shares								$ 7.32	$ 5.93	$ 15.53
Proceeds from stock options exercised \| $								$ 6,500	$ 3,400	$ 25,400
Total unrecognized compensation expense \| $								101,900
Time-Based and Performance-Based Options
Stockholders' Equity [Line Items]
Intrinsic value \| $								$ 31,800
Period for recognition								5 years 10 months 24 days
Options, exercisable, number (in shares)								10,039,742
Options expired, weighted average exercise price (in usd per share) \| $ / shares								$ 9.70
Vested and expected to vest, outstanding (in shares)								13,026,464
Restricted Stock Units (RSUs)
Stockholders' Equity [Line Items]
Ratio of number of shares into which the share instrument may be converted								1
Award vesting period								4 years
Weighted average grant date fair value, granted (in usd per share) \| $ / shares								$ 9.67
Restricted Stock Units (RSUs) \| Share-based Compensation Award, Tranche One, Two, Three and Four
Stockholders' Equity [Line Items]
Vesting percentage								25.00%
Time Based Restricted Stock Units PSU
Stockholders' Equity [Line Items]
Amount eligible to vest upon achievement of goal								2
Time Based Restricted Stock Units RSUs and Performance Units
Stockholders' Equity [Line Items]
Total fair value of shares vested related to RSUs \| $								$ 39,300	$ 39,200	$ 9,200
Weighted average grant date fair value, granted (in usd per share) \| $ / shares								$ 9.65	$ 10.15	$ 35.33
2020 Equity Incentive Plan
Stockholders' Equity [Line Items]
Additional common stock reserved for issuance (in shares)	18,000,000
2020 Inducement Equity Incentive Plan
Stockholders' Equity [Line Items]
Shares authorized (in shares)											2,500,000
Additional common stock reserved for issuance (in shares)		360,000		750,000
Common stock remain available for issuance (in shares)								12,800,000
Omniome Plan
Stockholders' Equity [Line Items]
Shares authorized (in shares)			2,494,128
Exchange ratio			0.259204639
2010 Plan
Stockholders' Equity [Line Items]
Common stock remain available for issuance (in shares)								29,500,000
ESPP
Stockholders' Equity [Line Items]
Common stock, shares issued (in shares)								4,000,000
Common stock remain available for issuance (in shares)								12,197,447
Weighted average grant date fair value, granted (in usd per share) \| $ / shares								$ 5.34	$ 4.28	$ 25.07
Number of purchase periods \| period								4
Purchase period of ESPP								6 months
Percentage of fair market value at which stock can be purchased								85.00%
Percentage of outstanding common stock used to determine annual plan increase								2.00%
Common stock purchased under plan (in shares)								1,735,058	1,878,168	1,913,968
Proceeds from stock options exercised \| $								$ 8,800	$ 7,800	$ 6,400
Private Placement of Common Stock
Stockholders' Equity [Line Items]
Price per share (in usd per share) \| $ / shares			$ 26.75
Common stock, shares issued (in shares)			11,214,953
Proceeds from issuance of common stock from equity plans \| $			$ 300,000
Common Stock
Stockholders' Equity [Line Items]
Issuance of common stock in Private Placement, net of issuance costs (in shares)								20,125,000		11,215,000
Common Stock \| Options To Purchase Common Stock
Stockholders' Equity [Line Items]
Period for recognition								2 years 2 months 12 days

Cover - USD ($)	12 Months Ended
Cover - USD ($)	Dec. 31, 2023	Jan. 31, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-34899
Entity Registrant Name	Pacific Biosciences of California, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	16-1590339
Entity Address, Address Line One	1305 O’Brien Drive
Entity Address, City or Town	Menlo Park
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94025
City Area Code	650
Local Phone Number	521-8000
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PACB
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 3,323,701,933
Entity Common Stock, Shares Outstanding		267,951,880
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement relating to its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
Document Fiscal Period Focus	FY
Entity Central Index Key	0001299130
Amendment Flag	false
Document Fiscal Year Focus	2023

INCOME TAXES - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Total Current	$ 0	$ 0	$ 0
Deferred:
Federal	(9,956)	0	(83,742)
State	(1,468)	0	(9,907)
Foreign	0	0	0
Deferred income taxes	(11,424)	0	(93,649)
(Benefit) Provision for Income Taxes	$ (11,424)	$ 0	$ (93,649)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

STOCKHOLDERS’ EQUITY - Summary of RSUs and PSUs Activity (Details) shares in Thousands	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Restricted Stock Units (RSUs)
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding, beginning (in shares) \| shares	8,535
Granted (in shares) \| shares	7,141
Vested (in shares) \| shares	(2,730)
Forfeited (in shares) \| shares	(1,638)
Outstanding, ending (in shares) \| shares	11,308
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning, outstanding (in dollars per share) \| $ / shares	$ 15.16
Weighted average grant date fair value, granted (in usd per share) \| $ / shares	9.67
Vested (in dollars per share) \| $ / shares	14.41
Forfeited (in dollars per share) \| $ / shares	13.86
Ending, outstanding (in dollars per share) \| $ / shares	$ 12.06
Performance Stock Units (PSUs)
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding, beginning (in shares) \| shares	0
Granted (in shares) \| shares	564
Vested (in shares) \| shares	0
Forfeited (in shares) \| shares	(23)
Outstanding, ending (in shares) \| shares	541
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning, outstanding (in dollars per share) \| $ / shares	$ 0
Weighted average grant date fair value, granted (in usd per share) \| $ / shares	9.43
Vested (in dollars per share) \| $ / shares	0
Forfeited (in dollars per share) \| $ / shares	9.43
Ending, outstanding (in dollars per share) \| $ / shares	$ 9.43

FINANCIAL INSTRUMENTS - Changes in Estimated Fair Value of Contingent Consideration (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Additions	$ 18,450
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Change in fair value of contingent consideration
Change in estimated fair value	$ 15,060
Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance as of December 31, 2022	172,094
Achievement of milestone	186,054
Ending balance as of December 31, 2023	$ 19,550

STOCKHOLDERS’ EQUITY (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity

The following table summarizes time-based stock option activity for all of our equity compensation plans for the year ended December 31, 2023 (in thousands, except per share amounts):


	Number of shares	Weighted-average exercise price
Outstanding at December 31, 2022	14,618	$	10.60
Granted	419	$	11.26
Exercised	(1,119)	$	4.74
Canceled	(910)	$	17.71
Outstanding at December 31, 2023	13,008	$	10.63

The following table summarizes performance-based stock option activity for all of our equity compensation plans for the year ended December 31, 2023 (in thousands, except per share amounts):


	Number of shares	Weighted-average exercise price
Outstanding at December 31, 2022	258	$	4.71
Granted	—	$	—
Exercised	(251)	$	4.71
Canceled	(4)	$	4.71
Outstanding at December 31, 2023	3	$	4.74

Summary of Time-Based RSUs Activity

The following table summarizes the time-based RSUs and PSUs activity for the year ended December 31, 2023 (shares in thousands):


			Weighted-average grant date fair value
	Restricted Stock Units (RSUs)	Performance Stock Units (PSUs)	RSU		PSU
Outstanding at December 31, 2022	8,535	—	$	15.16	$	—
Granted	7,141	564	9.67		9.43
Vested	(2,730)	—	14.41		—
Forfeited	(1,638)	(23)	13.86		9.43
Outstanding at December 31, 2023	11,308	541	$	12.06	$	9.43

Schedule of Stock-Based Compensation Expense

Total share-based compensation expense consists of the following (in thousands):


	Years Ended December 31,
	2023		2022		2021
Cost of revenue	$	5,399	$	4,802	$	6,126
Research and development	22,435		30,676		20,275
Sales, general and administrative	44,284		43,135		35,403
Merger-related expenses - stock-settled	—		—		6,349
Merger-related expenses - milestone	—		—		5,202
Share-based compensation	72,118		78,613		73,355
Merger-related expenses - cash-settled	—		—		7,373
Total share-based compensation expense	$	72,118	$	78,613	$	80,728

Schedule of Fair Value of Employee Stock Options

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


	Years Ended December 31,
	2023		2022		2021
Expected term in years	4.9		4.6		2.1 - 4.6
Expected volatility	77% - 78%		70% - 76%		67% - 80%
Risk-free interest rate	3.73% – 4.60%		0.41% – 3.66%		0.05% – 1.10%
Dividend yield	—		—		—
Weighted-average grant date fair value per share	$	7.32	$	5.93	$	15.53

Schedule of Fair Value of Employee Stock Purchase Plan

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


	Years Ended December 31,
	2023		2022		2021
Expected term in years	0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Expected volatility	79% - 97%		70% - 97%		67% - 68%
Risk-free interest rate	4.9% - 5.5%		0.6% - 3.5%		0.1% - 0.2%
Dividend yield	—		—		—
Weighted-average grant date fair value per share	$	5.34	$	4.28	$	25.07

INVITAE COLLABORATION - Narrative (Details) - USD ($) $ in Thousands		12 Months Ended
	Jun. 03, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Development and Commercialization of Significant Agreements Transactions [Line Items]
Revenue		$ 200,521	$ 128,304	$ 130,513
Deferred revenue, current		16,342	30,498
Deferred revenue, non-current		5,530	1,794
Product revenue
Development and Commercialization of Significant Agreements Transactions [Line Items]
Revenue		183,872	108,699	$ 113,505
Invitae Corporation
Development and Commercialization of Significant Agreements Transactions [Line Items]
Amount of agreement payment received upon execution	$ 23,500
Revenue		10,500	$ 3,700
Deferred revenue, current		$ 8,000

- Definition

+ References

+ Details

FINANCIAL INSTRUMENTS - Summary of Contractual Maturities of Cash Equivalents and Available-for-Sale Investments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Investments, All Other Investments [Abstract]
Due in one year or less	$ 465,181
Due after one year through 5 years	96,063
Total investments	$ 561,244

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of The Major Classes of Property and Equipment (Details)	Dec. 31, 2023
Computer software
Property, Plant and Equipment [Line Items]
Useful life	3 years
Minimum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Useful life	3 years
Minimum \| Lab equipment
Property, Plant and Equipment [Line Items]
Useful life	3 years
Minimum \| Computer equipment
Property, Plant and Equipment [Line Items]
Useful life	3 years
Minimum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Useful life	3 years
Maximum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Useful life	10 years
Maximum \| Lab equipment
Property, Plant and Equipment [Line Items]
Useful life	5 years
Maximum \| Computer equipment
Property, Plant and Equipment [Line Items]
Useful life	5 years
Maximum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Useful life	5 years

BALANCE SHEET COMPONENTS - Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 111,226	$ 106,568
Less: Accumulated depreciation	(74,794)	(64,988)
Property and equipment, net	36,432	41,580
Laboratory equipment and machinery
Property, Plant and Equipment [Line Items]
Property and equipment, gross	44,907	38,998
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	35,226	34,129
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	19,528	18,438
Computer software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	6,628	6,879
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,594	3,426
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,343	$ 4,698

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($)	1 Months Ended	12 Months Ended		14 Months Ended
	Nov. 30, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Sep. 20, 2021
Commitments and Contingencies [Line Items]
Operating lease right-of-use assets, net		$ 32,593,000	$ 39,763,000	$ 32,593,000
Weighted average discount rate		6.80%		6.80%
Weighted average remaining lease term		3 years 9 months 18 days		3 years 9 months 18 days
Rent payments		$ 12,100,000	11,200,000
Operating lease cost		10,400,000	$ 10,500,000
Additional liability associated with indemnification obligations		0		$ 0
Purchase obligation		109,900,000		109,900,000
Operating Lease, Liability		41,197,000		41,197,000
Loss on purchase commitment		3,400,000
Payments for deposits to Supplier	$ 9,000,000	6,000,000		15,000,000
Deposits, current		3,000,000		3,000,000
Deposits		$ 12,000,000		$ 12,000,000
Omniome, Inc
Commitments and Contingencies [Line Items]
Operating lease right-of-use assets, net					$ 18,100,000
Operating Lease, Liability					$ 18,100,000

Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

STOCKHOLDERS’ EQUITY

Preferred Stock

Our Certificate of Incorporation, as amended and restated in October 2010 in connection with the closing of our initial public offering, authorizes us to issue 1,000,000,000 shares of $0.001 par value common stock and 50,000,000 shares of $0.001 par value preferred stock. As of December 31, 2023 and 2022, there were no shares of preferred stock issued or outstanding.

Common Stock

Common stockholders are entitled to dividends when and if declared by our board of directors. There have been no dividends declared to date. The holder of each share of common stock is entitled to one vote.

Underwritten Public Equity Offerings

In August 2020, we entered into an underwriting agreement, relating to the public offering of 19,430,000 shares of our common stock, $0.001 par value per share, at a price to the public of $4.47 per share. Under the terms of the underwriting agreement, we also granted the underwriters a 30-day option to purchase up to an additional 2,914,500 shares of our common stock, which was subsequently exercised in full, and the offering including the sale of shares of common stock subject to the underwriters’ option, closed in August 2020. In total, we sold 22.3 million shares of our common stock. We paid a commission equal to 6% of the gross proceeds from the sale of shares of our common stock. The total net proceeds to us from the offering after deducting the underwriting discount were approximately $93.9 million, excluding approximately $0.3 million of offering expenses.

In November 2020, we entered into an underwriting agreement, relating to the public offering of 6,096,112 shares of our common stock, $0.001 par value per share, at a price to the public of $14.25 per share. Under the terms of the underwriting agreement, we also granted the underwriters a 30-day option to purchase up to an additional 914,416 shares of our common stock, which was subsequently exercised in full, and the offering including the sale of shares of common stock subject to the underwriters’ option, closed in November 2020. In total, we sold 7.0 million shares of our common stock. We paid a commission equal to 6% of the gross proceeds from the sale of shares of our common stock. The total net proceeds to us from the offering after

deducting the underwriting discount were approximately $93.9 million, excluding approximately $0.3 million of offering expenses.

In total, for the year ended December 31, 2021, we issued 29.4 million shares of our common stock through our two underwritten public offerings with an average offering price of $6.40. The total net proceeds to us from the two offerings, after deducting the underwriting commission and offering expenses, were approximately $187.2 million.

In January 2023, we entered into an underwriting agreement, relating to the public offering of 17.5 million shares of our common stock, $0.001 par value per share, at a price to the public of $10.00 per share. Under the terms of the underwriting agreement, we also granted the underwriters a 30-day option to purchase up to an additional 2.6 million shares of our common stock, which was subsequently exercised in full, and the offering, including the sale of shares of common stock subject to the underwriters' option, closed in January 2023. In total, we sold 20.1 million shares of our common stock. We paid a commission equal to 5.75% of the gross proceeds from the sale of shares of our common stock. The total net proceeds to us from the offering after deducting the underwriting discount were approximately $189.7 million, excluding approximately $0.5 million of offering expenses.

Private Placement of Common Stock

On July 19, 2021, in connection with the Omniome acquisition, we entered into a purchase agreement with certain qualified institutional buyers and institutional accredited investors, pursuant to which we agreed to sell an aggregate of 11,214,953 shares of common stock, at a price of $26.75 per share, for aggregate gross proceeds of approximately $300 million. The transaction closed on September 20, 2021. We registered the private placement shares for resale following the closing of the merger.

Equity Plans

The 2020 Equity Incentive Plan (the “2020 Plan”), the 2020 Inducement Equity Incentive Plan (the “Inducement Plan”), and the 2021 adopted Omniome Equity Incentive Plan of Pacific Biosciences of California, Inc. (the “Omniome Plan”) allow for the issuance of stock options, restricted units and awards, and performance-based awards.

On December 2, 2020, the Board of Directors (the “Board”) adopted the Inducement Plan and reserved 2,500,000 shares of our common stock for issuance pursuant to equity awards granted under the Inducement Plan. On April 18, 2021 and November 22, 2021, the Board amended the Inducement Plan to reserve an additional 750,000 and 360,000 shares, respectively.

On September 20, 2021, in connection with the acquisition of Omniome, we adopted the Omniome Equity Incentive Plan of Pacific Biosciences of California, Inc. (the “Omniome Plan”). Under the Omniome Merger Agreement, each unvested option to purchase Omniome common stock, granted under the Omniome Plan held by employees continuing with us, was assumed by PacBio and converted into an option to purchase shares of our common stock. The terms and conditions of the converted options are substantially the same (including vesting and exercisability), except that (A) the assumed options cover shares of PacBio’s common stock; (B) the number of shares of our common stock subject to the assumed option is equal to the product of (i) the number of shares of Omniome common stock subject to the corresponding unvested option, multiplied by (ii) the exchange ratio (as defined below), with any resulting fractional share rounded down to the nearest whole share; and (C) the exercise price per share of the assumed options is equal to the quotient of (i) the exercise price per share of the corresponding unvested option to purchase shares of Omniome common stock, divided by (ii) the exchange ratio (as defined below), with any resulting fractional cent rounded up to the nearest whole cent. The exchange ratio was equal to 0.259204639. We reserved 2,494,128 shares of our common stock for issuance pursuant to equity awards under the Omniome Plan.

On May 25, 2022, stockholders approved an amendment to the 2020 Plan, and we reserved an additional 18,000,000 shares of our common stock for issuance pursuant to equity awards granted under the 2020 Plan.

As of December 31, 2023, we had 12.8 million shares remaining and available for future issuance under the 2020 Plan, Inducement Plan, and the Omniome Plan.

Stock Options

Time-based stock options

The following table summarizes time-based stock option activity for all of our equity compensation plans for the year ended December 31, 2023 (in thousands, except per share amounts):


	Number of shares	Weighted-average exercise price
Outstanding at December 31, 2022	14,618	$	10.60
Granted	419	$	11.26
Exercised	(1,119)	$	4.74
Canceled	(910)	$	17.71
Outstanding at December 31, 2023	13,008	$	10.63

Performance-based stock options

The following table summarizes performance-based stock option activity for all of our equity compensation plans for the year ended December 31, 2023 (in thousands, except per share amounts):


	Number of shares	Weighted-average exercise price
Outstanding at December 31, 2022	258	$	4.71
Granted	—	$	—
Exercised	(251)	$	4.71
Canceled	(4)	$	4.71
Outstanding at December 31, 2023	3	$	4.74

The performance condition was achieved during the year ended December 31, 2023.

The aggregate intrinsic value of the outstanding options presented in the tables above as of December 31, 2023, totaled $31.8 million, and had a weighted-average remaining contractual life of 5.9 years.

The aggregate intrinsic value of outstanding options represents the total pre-tax intrinsic value (i.e. the difference between $9.81, our closing stock price on the last trading day of our fourth quarter of 2023 and the option exercise price multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2023. The aggregate intrinsic value changes at each reporting date based on the fair market value of our common stock.

The vested and exercisable options as of December 31, 2023, totaled 10,039,742 shares, had an aggregate intrinsic value of $30.0 million, a weighted-average exercise price per share of $9.70, and a weighted-average remaining contractual life of 5.2 years.

The vested and expected to vest options as of December 31, 2023, totaled 13,026,464 shares, had an aggregate intrinsic value of $31.6 million, a weighted-average exercise price per share of $10.81, and a weighted-average remaining contractual life of 5.8 years.

The total intrinsic value of stock options exercised during the years ended December 31, 2023, 2022, and 2021 was $8.8 million, $5.0 million, and $146.1 million, respectively. The total intrinsic value of options exercised represents the difference between our closing stock price on the exercise date and the option exercise price, multiplied by the number of in-the-money options exercised.

The weighted-average grant-date fair value of all options granted was $7.32 in 2023, $5.93 in 2022, and $18.36 in 2021, each determined by the Black-Scholes option valuation method.

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

Each Restricted Stock Unit (RSU) represents one equivalent share of our common stock to be issued after satisfying the applicable continued service-based vesting criteria over a specified period. These RSUs are time-based and vest over four years at a rate of 25% annually. The RSUs do not entitle participants to the rights of holders of common stock, such as voting rights, until the shares are issued. The fair value of these RSUs is

based on the closing price of our common stock on the date of grant. We measure compensation expense for these RSUs at fair value on the date of grant and recognize the expense over the expected vesting period on a straight-line basis. RSUs that are expected to vest are net of estimated future forfeitures.

We issue PSUs for which the number of shares issuable in the third year of the performance period is based on performance relative to specified revenue targets and continued employment through the vesting period. Maximum achievement of the revenue goal under the PSUs will result in up to 200% of the target number of shares subject to the PSUs to become eligible to vest, while not meeting the minimum achievement of the revenue goal under PSUs will result in no shares subject to the PSUs becoming eligible to vest.

The following table summarizes the time-based RSUs and PSUs activity for the year ended December 31, 2023 (shares in thousands):


			Weighted-average grant date fair value
	Restricted Stock Units (RSUs)	Performance Stock Units (PSUs)	RSU		PSU
Outstanding at December 31, 2022	8,535	—	$	15.16	$	—
Granted	7,141	564	9.67		9.43
Vested	(2,730)	—	14.41		—
Forfeited	(1,638)	(23)	13.86		9.43
Outstanding at December 31, 2023	11,308	541	$	12.06	$	9.43

The total fair value of shares vested related to RSUs and PSUs during the years ended December 31, 2023, 2022, and 2021 was $39.3 million, $39.2 million, and $9.2 million, respectively.

The weighted-average grant-date fair value of all RSUs and PSUs granted was $9.65 in 2023, $10.15 in 2022, and $35.33 in 2021.

Employee Stock Purchase Plan

As of December 31, 2023, a total of 29.5 million shares of our common stock have been reserved for issuance under our 2010 Employee Stock Purchase Plan (the “ESPP”). The ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Each offering period will generally consist of four purchase periods, each purchase period being approximately six months. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or at the end of a purchase period. If the stock price at the end of the purchase period is lower than the stock price at the beginning of the offering period, that offering period will be terminated and a new offering period will come into place. The ESPP provides for an annual increase to the shares available for issuance at the beginning of each fiscal year equal to the lesser of 2% of the common shares then outstanding, 4,000,000 shares, or an amount determined by the ESPP’s administrator.

For the years ended December 31, 2023, 2022, and 2021, 1,735,058 shares, 1,878,168 shares, and 1,913,968 shares of common stock were purchased under the ESPP, respectively. As of December 31, 2023, 12,197,447 shares of our common stock remain available for issuance under our ESPP.

Share-based Compensation

Total share-based compensation expense consists of the following (in thousands):


	Years Ended December 31,
	2023		2022		2021
Cost of revenue	$	5,399	$	4,802	$	6,126
Research and development	22,435		30,676		20,275
Sales, general and administrative	44,284		43,135		35,403
Merger-related expenses - stock-settled	—		—		6,349
Merger-related expenses - milestone	—		—		5,202
Share-based compensation	72,118		78,613		73,355
Merger-related expenses - cash-settled	—		—		7,373
Total share-based compensation expense	$	72,118	$	78,613	$	80,728

As of December 31, 2023 and 2022, $0.6 million and $0.7 million of share-based compensation cost was capitalized in inventory, net, on our consolidated balance sheets, respectively.

The tax benefit of share-based compensation expense was immaterial for the years ended December 31, 2023, 2022, and 2021.

Determining Fair Value

We estimate the fair value of share options granted using the Black-Scholes valuation method and a single option award approach. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair market value of RSU awards granted is the closing price of our shares on the date of grant and is generally recognized as compensation expense on a straight-line basis over the respective vesting period. For shares purchased under our Employee Stock Purchase Plan, or ESPP, we estimate the grant-date fair value, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model.

Expected Term – The expected term used in the Black-Scholes valuation method represents the period that the stock options are expected to be outstanding and is determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock options and vesting schedules.

Expected Volatility – The expected volatility used in the Black-Scholes valuation method is derived from the implied volatility related to our share price over the expected term.

Expected Dividend – We have never paid dividends on our shares and, accordingly, the dividend yield percentage is zero for all periods.

Risk-Free Interest Rate – The risk-free interest rate used in the Black-Scholes valuation method is the implied yield currently available on U.S. Treasury constant maturities issued with a term equivalent to the expected terms.

Stock Options

We estimated the fair value of employee stock options using the Black-Scholes option pricing model. The fair value of employee stock options is amortized on a straight-line basis over the requisite service period of the awards.

When determining the current share prices underlying the stock options for calculating the grant-date fair value, we reference observable market prices of similar or identical instruments in active markets.

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


	Years Ended December 31,
	2023		2022		2021
Expected term in years	4.9		4.6		2.1 - 4.6
Expected volatility	77% - 78%		70% - 76%		67% - 80%
Risk-free interest rate	3.73% – 4.60%		0.41% – 3.66%		0.05% – 1.10%
Dividend yield	—		—		—
Weighted-average grant date fair value per share	$	7.32	$	5.93	$	15.53

Cash received from option exercises for the years ended December 31, 2023, 2022, and 2021 was $6.5 million, $3.4 million and $25.4 million, respectively.

ESPP

We estimate the fair value of shares to be issued under the ESPP using the Black-Scholes option pricing model. The fair value of shares to be issued under the ESPP was estimated using the following assumptions:


	Years Ended December 31,
	2023		2022		2021
Expected term in years	0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Expected volatility	79% - 97%		70% - 97%		67% - 68%
Risk-free interest rate	4.9% - 5.5%		0.6% - 3.5%		0.1% - 0.2%
Dividend yield	—		—		—
Weighted-average grant date fair value per share	$	5.34	$	4.28	$	25.07

Cash received through the ESPP for the years ended December 31, 2023, 2022, and 2021 was $8.8 million, $7.8 million, and $6.4 million, respectively.

As of December 31, 2023, $101.9 million of total unrecognized compensation expense related to stock options, restricted stock, and ESPP shares was expected to be recognized over a weighted-average period of 2.2 years.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Paragraph 13
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (g)
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
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-Section 50
-Paragraph 13
-Subparagraph (i)
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Paragraph 14
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

NET LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Loss Per Share


	Years Ended December 31,
	2023		2022		2021
Numerator:
Net loss	$	(306,735)	$	(314,248)	$	(181,223)

Denominator:
Basic
Weighted-average shares used in computing basic net loss per share	253,629		224,550		204,136
Basic net loss per share	$	(1.21)	$	(1.40)	$	(0.89)
Diluted




Weighted-average shares used in computing diluted net loss per share	253,629		224,550		204,136
Diluted net loss per share	$	(1.21)	$	(1.40)	$	(0.89)

Antidilutive Shares Excluded from Computation of Diluted Net Loss per Share


	Years Ended December 31,
(in thousands)	2023	2022	2021
Shares issuable upon conversion of convertible senior notes	31,063	20,690	20,690
Equity awards	27,246	27,291	21,419

CONVERTIBLE SENIOR NOTES - Narrative (Details) $ / shares in Units, $ in Thousands				12 Months Ended
	Jun. 30, 2023 USD ($) $ / shares	Feb. 16, 2021	Feb. 09, 2021 USD ($) $ / shares	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Feb. 28, 2021 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt				$ 2,033	$ 0	$ 0
2028 Convertible Senior Notes
Debt Instrument [Line Items]
Debt issuance costs				1,500
Aggregate outstanding balance				457,626	896,683
2028 Convertible Senior Notes \| Convertible Debt
Debt Instrument [Line Items]
Stated interest rate	1.50%		1.50%
Principal amount of notes	$ 441,000		$ 900,000
Debt instrument, convertible, conversion ratio	0.0229885
Conversion price per share (in dollars per share) \| $ / shares			$ 43.50
Debt redemption, percentage of conversion price			150.00%
Debt redemption, trading days			20 days
Debt redemption, consecutive trading days			30 days
Redemption price, percentage			100.00%
Debt instrument, debt default, calendar days		360 days
Debt instrument, interest in the event of default		0.25%
Additional interest in the event of default		0.50%
Debt issuance costs				$ 4,500
Debt instrument, effective interest rate				1.60%
Aggregate outstanding balance				$ 459,000
Fair value of convertible debt				395,400
2028 Convertible Senior Notes \| Convertible Debt \| Minimum
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days		181 days
2028 Convertible Senior Notes \| Debt Conversion Terms One \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days		180 days
2028 Convertible Senior Notes \| Debt Conversion Terms Two \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days		361 days
2030 Convertible Senior Notes
Debt Instrument [Line Items]
Debt issuance costs				7,300
Aggregate outstanding balance				$ 434,617	$ 0
2030 Convertible Senior Notes \| Convertible Debt
Debt Instrument [Line Items]
Stated interest rate	1.375%
Principal amount of notes	$ 441,000
Debt instrument, convertible, conversion ratio	0.046512
Conversion price per share (in dollars per share) \| $ / shares	$ 21.50
Debt redemption, percentage of conversion price	150.00%
Debt redemption, trading days	20 days
Debt redemption, consecutive trading days	30 days
Redemption price, percentage	100.00%
Debt instrument, debt default, calendar days	360 days
Debt instrument, interest in the event of default	0.25%
Additional interest in the event of default	0.50%
Debt instrument, effective interest rate				1.60%
Fair value of convertible debt				$ 410,500
2030 Convertible Senior Notes \| Convertible Debt \| Minimum
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days	181 days
2030 Convertible Senior Notes \| Debt Conversion Terms One \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days	180 days
2030 Convertible Senior Notes \| Debt Conversion Terms Two \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days	361 days
Exchange Transaction
Debt Instrument [Line Items]
Loss on extinguishment of debt				2,000
Exchange Transaction \| Convertible Debt
Debt Instrument [Line Items]
Paid accrued but unpaid interest				$ 2,500
Convertible Senior Notes
Debt Instrument [Line Items]
Stated interest rate							1.50%
Principal amount of notes							$ 900,000

CONVERTIBLE SENIOR NOTES

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

CONVERTIBLE SENIOR NOTES

2030 Convertible Senior Notes

In June 2023, we entered into a privately negotiated exchange agreement with a holder of our outstanding 1.50% Convertible Senior Notes due 2028 (the “2028 Notes”), pursuant to which we issued $441.0 million in aggregate principal amount of our 1.375% Convertible Senior Notes due 2030 (the “2030 Notes”) in exchange for $441.0 million principal amount of the 2028 Notes (the “Exchange Transaction”), pursuant to exemptions from registration under the Securities Act of 1933, as amended, and the rules and regulations thereunder. The 2030 Notes were issued on June 30, 2023.

The 2030 Notes are governed by an indenture (the “2030 Indenture”) between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes bear interest at a rate of 1.375% per annum. Interest on the 2030 Notes is payable semi-annually in arrears on June 15 and December 15, commencing on December 15, 2023. The 2030 Notes will mature on December 15, 2030, subject to earlier conversion, redemption or repurchase.

The 2030 Notes are convertible at the option of the holder at any time until the second scheduled trading day prior to the maturity date, including in connection with a redemption by the Company. The 2030 Notes are convertible into shares of our common stock based on an initial conversion rate of 46.5116 shares of common stock per $1,000 principal amount of the 2030 Notes (which is equal to an initial conversion price of $21.50 per share of common stock), in each case subject to customary anti-dilution and other adjustments as a result of certain extraordinary transactions. Upon conversion of the 2030 Notes, we may elect to settle such conversion obligation in shares of our common stock, cash or a combination of shares of our common stock and cash.

On or after June 20, 2028, the 2030 Notes will be redeemable by the Company in the event that the closing sale price of our common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice at a redemption price of 100% of the principal amount of such 2030 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date.

Upon the occurrence of a Fundamental Change (as defined in the 2030 Indenture), the holders of the 2030 Notes may require that we repurchase all or part of the principal amount of the 2030 Notes at a purchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest up to, but excluding, the fundamental change repurchase date, and all unpaid interest from the fundamental change repurchase date thereon, but excluding, the maturity date.

The 2030 Indenture includes customary “events of default,” which may result in the acceleration of the maturity of the 2030 Notes under the 2030 Indenture. 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 181st calendar day to, and including, the 360th 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 361st 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 361st day), the 2030 Notes shall be subject to acceleration as provided for in the 2030 Indenture.

The 2030 Notes are accounted for in accordance with the authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. Under ASU 2020-06, the guidance requires that debt with an embedded conversion feature is accounted for in its entirety as a liability and no portion of the proceeds from the issuance of the convertible debt instrument is accounted for as attributable to the conversion feature unless the conversion feature is required to be accounted for separately as an embedded derivative or the conversion feature results in a substantial premium. The conversion feature of the 2030 Notes is not accounted for as an embedded derivative because it is considered to be indexed to our common stock, and the 2030 Notes were not issued at a substantial premium; therefore, the 2030 Notes are accounted for in their entirety as a

liability. 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.

The additional interest feature in the event of our failure to comply with certain reporting obligations is also considered an embedded derivative requiring bifurcation under ASC 815. However, due to the nature and terms of the reporting obligations, the value of the embedded derivative is immaterial.

The Exchange Transaction was accounted for as an extinguishment driven by the change in fair value of the embedded conversion option. We recorded a loss on extinguishment of debt of approximately $2.0 million in connection with the Exchange Transaction during the year ended December 31, 2023, which represents the difference between the fair value and the principal amount of the 2030 Notes of the debt at the modification date, plus unamortized debt issuance costs of $1.5 million related to the respective portion of the 2028 Notes.

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 consolidated balance sheets and 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%. We also paid accrued but unpaid interest of $2.5 million on the 2028 Notes in connection with the Exchange Transaction on June 30, 2023.

We did not receive any cash proceeds from the Exchange Transaction. In exchange for issuing the 2030 Notes pursuant to the Exchange Transaction, we received and cancelled the exchanged 2028 Notes. Following the closing of the Exchange Transaction, $459.0 million in aggregate principal amount of 2028 Notes remained outstanding with terms unchanged.

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


	December 31,
	2023		2022
Principal amount	$	441,000	$	—
Unamortized debt premium	$	524	$	—
Unamortized debt issuance costs	$	(6,907)	$	—
Net carrying amount	$	434,617	$	—

Interest expense for the 2030 Notes for the years ended December 31, 2023, 2022, and 2021 was as follows:


	Years Ended December 31,
(in thousands)	2023		2022		2021
Contractual interest expense	$	3,032	$	—	$	—
Amortization of debt issuance costs	463		—		—
Total interest expense	$	3,495	$	—	$	—

As of December 31, 2023, the estimated fair value (Level 2) of the 2030 Notes was $410.5 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.

2028 Convertible Senior Notes

On February 9, 2021, we entered into an investment agreement (the “Investment Agreement”) with SB Northstar LP (the “Purchaser”), a subsidiary of SoftBank Group Corp., relating to the issuance and sale to the Purchaser of $900.0 million in aggregate principal amount of the 2028 Notes. The 2028 Notes were issued on February 16, 2021. As discussed above, in June 2023 we completed an exchange of $441.0 million in aggregate principal amount of our 2028 Notes for $441.0 million aggregate principal amount of the 2030 Notes, leaving approximately $459.0 million in aggregate principal amount of 2028 Notes outstanding.

The 2028 Notes are governed by an indenture (the “2028 Indenture”) between the Company and U.S. Bank National Association, as trustee. The 2028 Notes bear interest at a rate of 1.50% per annum. Interest on the

2028 Notes is payable semi-annually in arrears on February 15 and August 15 and commenced on August 15, 2021. The 2028 Notes will mature on February 15, 2028, subject to earlier conversion, redemption, or repurchase.

The 2028 Notes are convertible at the option of the holder at any time until the second scheduled trading day prior to the maturity date, including in connection with a redemption by the Company. The 2028 Notes are convertible into shares of our common stock based on an initial conversion rate of 22.9885 shares of common stock per $1,000 principal amount of the 2028 Notes (which is equal to an initial conversion price of $43.50 per share of common stock), in each case subject to customary anti-dilution and other adjustments as a result of certain extraordinary transactions. Upon conversion of the 2028 Notes, we may elect to settle such conversion obligation in shares of our common stock, cash or a combination of shares of our common stock and cash.

On or after February 20, 2026, the 2028 Notes will be redeemable by the Company in the event that the closing sale price of our common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice at a redemption price of 100% of the principal amount of such 2028 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date.

Upon the occurrence of a Fundamental Change (as defined in the 2028 Indenture), the holders of the 2028 Notes may require that we repurchase all or part of the principal amount of the 2028 Notes at a purchase price of par plus unpaid interest up to, but excluding, the maturity date.

The 2028 Indenture includes customary “events of default,” which may result in the acceleration of the maturity of the 2028 Notes under the 2028 Indenture. The 2028 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 2028 Notes at a rate equal to (i) 0.25% per annum of the principal amount of the 2028 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 2028 Notes outstanding for each day from, and including, the 181st calendar day to, and including, the 360th 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 2028 Indenture). On the 361st 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 361st day), the 2028 Notes shall be subject to acceleration as provided for in the 2028 Indenture.

The 2028 Notes are accounted for in accordance with the authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. Under ASU 2020-06, the guidance requires that debt with an embedded conversion feature is accounted for in its entirety as a liability and no portion of the proceeds from the issuance of the convertible debt instrument is accounted for as attributable to the conversion feature unless the conversion feature is required to be accounted for separately as an embedded derivative or the conversion feature results in a substantial premium. The conversion feature of the 2028 Notes is not accounted for as an embedded derivative because it is considered to be indexed to our common stock, and the 2028 Notes were not issued at a premium; therefore, the 2028 Notes are accounted for in their entirety as a liability. 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 2028 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 a Fundamental Change occurring during the applicable periods, the value of the embedded derivative is immaterial.

We incurred issuance costs related to the 2028 Notes of approximately $4.5 million, which were recorded as debt issuance cost and are presented as a reduction to the 2028 Notes on our consolidated balance sheets and

are amortized to interest expense using the effective interest method over the term of the 2028 Notes, resulting in an effective interest rate of 1.6%.

The net carrying amount of the liability for the 2028 Notes is included as convertible senior notes, net, non-current in the consolidated balance sheets as follows (in thousands):


	December 31,
	2023		2022
Principal amount	$	459,000	$	900,000
Unamortized debt issuance costs	(1,374)		(3,317)
Net carrying amount	$	457,626	$	896,683

Interest expense for the 2028 Notes was as follows for the years ended December 31, 2023, 2022, and 2021:


	Years Ended December 31,
(in thousands)	2023		2022		2021
Contractual interest expense	$	10,133	$	13,500	$	11,812
Amortization of debt issuance costs	472		617		532
Total interest expense	$	10,605	$	14,117	$	12,344

As of December 31, 2023, the estimated fair value (Level 2) of the 2028 Notes was $395.4 million. The fair value of the Notes is estimated using a pricing model that is primarily affected by the trading price of our common stock and market interest rates.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

NET LOSS PER SHARE - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Numerator:
Net loss	$ (306,735)	$ (314,248)	$ (181,223)
Basic
Weighted-average shares used in computing basic net (loss) income per share (in shares)	253,629	224,550	204,136
Basic net (loss) income per share (in usd per share)	$ (1.21)	$ (1.40)	$ (0.89)
Diluted
Weighted-average shares used in computing diluted net (loss) income per share (in shares)	253,629	224,550	204,136
Diluted net (loss) income per share (in usd per share)	$ (1.21)	$ (1.40)	$ (0.89)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Section 50
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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Investments, All Other Investments [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table sets forth the fair value of our financial assets and liabilities that were measured on a recurring basis as of December 31, 2023 and December 31, 2022, respectively:


	December 31, 2023								December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents:
Cash and money market funds	$	70,172	$	—	$	—	$	70,172	$	137,636	$	—	$	—	$	137,636
Commercial paper	—		—		—		—		—		166,453		—		166,453
U.S. government & agency securities	—		109,739		—		109,739		—		21,000		—		21,000
Total cash and cash equivalents	70,172		109,739		—		179,911		137,636		187,453		—		325,089
Investments:
Commercial paper	—		9,947		—		9,947		—		127,302		—		127,302
Corporate debt securities	—		88,579		—		88,579		—		49,491		—		49,491
U.S. government & agency securities	—		352,979		—		352,979		—		270,436		—		270,436
Total investments	—		451,505		—		451,505		—		447,229		—		447,229

Short-term restricted cash	300		—		—		300		300		—		—		300
Long-term restricted cash	2,422		—		—		2,422		2,922		—		—		2,922
Total assets measured at fair value	$	72,894	$	561,244	$	—	$	634,138	$	140,858	$	634,682	$	—	$	775,540

Liabilities
Contingent consideration - Omniome acquisition	$	—	$	—	$	—	$	—	$	—	$	—	$	172,094	$	172,094
Contingent consideration - Apton acquisition	$	—	$	—	$	19,550	$	19,550	$	—	$	—	$	—	$	—
Total liabilities measured at fair value	$	—	$	—	$	19,550	$	19,550	$	—	$	—	$	172,094	$	172,094

Changes in The Estimated Fair Value of Contingent Consideration Liabilities

Changes in the estimated fair value of the contingent consideration liability for the year ended December 31, 2023 were as follows:


(in thousands)	Level 3
Beginning balance as of December 31, 2022	$	172,094
Additions	18,450
Change in estimated fair value	15,060
Achievement of milestone	(186,054)
Ending balance as of December 31, 2023	$	19,550

Summary of Cash, Cash Equivalents and Investments

The following table summarizes our cash, cash equivalents, restricted cash, and investments:


	December 31, 2023
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
Cash and cash equivalents:
Cash and money market funds	$	70,172	$	—	$	—	$	70,172

U.S. government & agency securities	109,786		13		(60)		109,739
Total cash and cash equivalents	179,958		13		(60)		179,911
Investments:
Commercial paper	9,947		—		—		9,947
Corporate debt securities	88,263		373		(57)		88,579
U.S. government & agency securities	353,029		478		(528)		352,979
Total investments	451,239		851		(585)		451,505
Total cash, cash equivalents, and investments	$	631,197	$	864	$	(645)	$	631,416

Short-term restricted cash	$	300	$	—	$	—	$	300
Long-term restricted cash	$	2,422	$	—	$	—	$	2,422

	December 31, 2022
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
Cash and cash equivalents:
Cash and money market funds	$	137,636	$	—	$	—	$	137,636
Commercial paper	166,514		—		(61)		166,453
U.S. government & agency securities	20,994		6		—		21,000
Total cash and cash equivalents	325,144		6		(61)		325,089
Investments:
Commercial paper	127,626		9		(333)		127,302
Corporate debt securities	49,998		—		(507)		49,491
U.S. government & agency securities	274,315		1		(3,880)		270,436
Total investments	451,939		10		(4,720)		447,229
Total cash, cash equivalents, and investments	$	777,083	$	16	$	(4,781)	$	772,318

Short-term restricted cash	$	300	$	—	$	—	$	300
Long-term restricted cash	$	2,922	$	—	$	—	$	2,922

Summary of Contractual Maturities of Cash Equivalents and Available-for-Sale Investments

The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of December 31, 2023:


(in thousands)	Fair Value
Due in one year or less	$	465,181
Due after one year through 5 years	96,063
Total investments	$	561,244

CONVERTIBLE SENIOR NOTES - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
2030 Convertible Senior Notes
Debt Instrument [Line Items]
Contractual interest expense	$ 3,032	$ 0	$ 0
Amortization of debt issuance costs	463	0	0
Total interest expense	3,495	0	0
2028 Convertible Senior Notes
Debt Instrument [Line Items]
Contractual interest expense	10,133	13,500	11,812
Amortization of debt issuance costs	472	617	532
Total interest expense	$ 10,605	$ 14,117	$ 12,344

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

BUSINESS ACQUISITIONS - Total Consideration Transferred for The Acquisition (Details) - USD ($) $ in Thousands			12 Months Ended
	Sep. 20, 2023	Sep. 20, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Less: Share-based compensation expense excluded from consideration transferred			$ (72,118)	$ (78,613)	$ (80,728)
Omniome, Inc
Business Acquisition [Line Items]
Total cash paid	$ 100,900	$ 315,703
Fair value of share consideration		249,435
Fair value of contingent consideration		168,574
Less: Share-based compensation expense excluded from consideration transferred		(18,923)
Total consideration transferred		$ 714,789

FINANCIAL INSTRUMENTS - Summary of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 561,244
Total cash, cash equivalents, and investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	631,197	$ 777,083
Gross unrealized gains	864	16
Gross unrealized losses	(645)	(4,781)
Fair Value	631,416	772,318
Cash and cash equivalents:
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	179,958	325,144
Gross unrealized gains	13	6
Gross unrealized losses	(60)	(61)
Fair Value	179,911	325,089
Cash and money market funds
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	70,172	137,636
Gross unrealized gains	0	0
Gross unrealized losses	0	0
Fair Value	70,172	137,636
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		166,514
Gross unrealized gains		0
Gross unrealized losses		(61)
Fair Value		166,453
U.S. government & agency securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	109,786	20,994
Gross unrealized gains	13	6
Gross unrealized losses	(60)	0
Fair Value	109,739	21,000
Investments:
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	451,239	451,939
Gross unrealized gains	851	10
Gross unrealized losses	(585)	(4,720)
Fair Value	451,505	447,229
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	9,947	127,626
Gross unrealized gains	0	9
Gross unrealized losses	0	(333)
Fair Value	9,947	127,302
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	88,263	49,998
Gross unrealized gains	373	0
Gross unrealized losses	(57)	(507)
Fair Value	88,579	49,491
U.S. government & agency securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	353,029	274,315
Gross unrealized gains	478	1
Gross unrealized losses	(528)	(3,880)
Fair Value	352,979	270,436
Short-term restricted cash
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	300	300
Fair Value	300	300
Long-term restricted cash
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,422	2,922
Fair Value	$ 2,422	$ 2,922

BUSINESS ACQUISITIONS - Unaudited Pro Forma Financial Information (Details) - Omniome, Inc - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Business Acquisition, Pro Forma Revenue	$ 130,513	$ 78,893
Business Acquisition, Pro Forma Net Income (Loss)	$ (278,451)	$ 17,510
Pro forma net (loss) income per share - basic (in usd per share)	$ (1.27)	$ 0.09
Pro forma net (loss) income per share - diluted (in usd per share)	$ (1.27)	$ 0.09

SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) - 12 months ended Dec. 31, 2023	unit	segment
Segment Reporting [Abstract]
Number of reportable segments	1	1

INCOME TAXES - Reconciliation of Unrecognized Tax Benefit Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning balance	$ 10,410	$ 8,335	$ 5,954
Increase in balance related to tax positions taken in prior year	2,044		189
Increase in balance related to tax positions taken during current year	2,100	2,085	2,192
Decrease in balance related to tax positions taken in prior year		(10)
Ending balance	$ 14,554	$ 10,410	$ 8,335

FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2023

Investments, All Other Investments [Abstract]

FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy established under GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows:

•Level 1: quoted prices in active markets for identical assets or liabilities;

•Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our non-performance risk, or that of our counterparty, is considered in determining the fair values of liabilities and assets, respectively.

We classify our cash deposits and money market funds within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. We classify our investments as Level 2 instruments based on market pricing and other observable inputs. We did not classify any of our investments within Level 3 of the fair value hierarchy.

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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table sets forth the fair value of our financial assets and liabilities that were measured on a recurring basis as of December 31, 2023 and December 31, 2022, respectively:


	December 31, 2023								December 31, 2022
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents:
Cash and money market funds	$	70,172	$	—	$	—	$	70,172	$	137,636	$	—	$	—	$	137,636
Commercial paper	—		—		—		—		—		166,453		—		166,453
U.S. government & agency securities	—		109,739		—		109,739		—		21,000		—		21,000
Total cash and cash equivalents	70,172		109,739		—		179,911		137,636		187,453		—		325,089
Investments:
Commercial paper	—		9,947		—		9,947		—		127,302		—		127,302
Corporate debt securities	—		88,579		—		88,579		—		49,491		—		49,491
U.S. government & agency securities	—		352,979		—		352,979		—		270,436		—		270,436
Total investments	—		451,505		—		451,505		—		447,229		—		447,229

Short-term restricted cash	300		—		—		300		300		—		—		300
Long-term restricted cash	2,422		—		—		2,422		2,922		—		—		2,922
Total assets measured at fair value	$	72,894	$	561,244	$	—	$	634,138	$	140,858	$	634,682	$	—	$	775,540

Liabilities
Contingent consideration - Omniome acquisition	$	—	$	—	$	—	$	—	$	—	$	—	$	172,094	$	172,094
Contingent consideration - Apton acquisition	$	—	$	—	$	19,550	$	19,550	$	—	$	—	$	—	$	—
Total liabilities measured at fair value	$	—	$	—	$	19,550	$	19,550	$	—	$	—	$	172,094	$	172,094

We classify contingent consideration, which was incurred in connection with the acquisition of Apton, within Level 3 as factors used to develop the estimate of fair value include unobservable inputs that are not supported by market activity and are significant to the fair value. 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.

We estimate the fair value of the contingent consideration liability based on the simulated revenue of the Company through the 5-year anniversary of the closing date of the acquisition. As of December 31, 2023, the key input used in the determination of the fair value included projected revenues of the Company relating to the high-throughput short-read products and services leveraging Apton's technology. A decrease in the projected revenues would result in a decrease in the fair value of the liability. The discount rates used are the sum of the U.S. risk-free rate and the estimated subordinated credit spread for B- credit rating, which ranges from 7.8% to 8.2%. Changes in our estimated subordinated credit spread can result in changes in the fair value of the contingent consideration liability, where a lower credit spread may result in an increased liability valuation.

On September 20, 2023, we achieved the commercial milestone in connection with the acquisition of Omniome. Consequently, former Omniome securityholders were entitled to receive as milestone consideration, among other things, an aggregate of approximately $100.9 million in cash and approximately 9.0 million shares of our common stock, representing $95.9 million divided by the volume-weighted average of the trading prices of our common stock for the twenty trading days ending with and including the trading day that was two days

immediately prior to the achievement of the milestone. The $95.9 million represents the $100.0 million that was to be paid in shares of our common stock offset by $4.1 million attributable to stock options issued by PacBio in replacement of Omniome’s unvested options as part of the transaction, pursuant to the terms of the Omniome merger agreement.

Following the achievement of the commercial milestone, $101.3 million of the contingent consideration, which includes certain payroll taxes, was paid during the year ended December 31, 2023. Additionally, 8,988,391 shares were issued at a value of $84.8 million to the former Omniome securityholders.

As a result of the achievement of the milestone, the contingent consideration liability incurred in connection with the acquisition of Omniome was no longer considered a Level 3 liability at December 31, 2023. There were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis for the year ended December 31, 2023, and our valuation techniques did not change compared to the prior year.

Changes in the estimated fair value of the contingent consideration liability for the year ended December 31, 2023 were as follows:


(in thousands)	Level 3
Beginning balance as of December 31, 2022	$	172,094
Additions	18,450
Change in estimated fair value	15,060
Achievement of milestone	(186,054)
Ending balance as of December 31, 2023	$	19,550

Changes to the fair value are recorded as the Change in fair value of contingent consideration in the consolidated statement of operations and comprehensive loss.

For the year ended December 31, 2023, there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and our valuation techniques did not change compared to the prior year.

Cash, Cash Equivalents, Restricted Cash, and Investments

The following table summarizes our cash, cash equivalents, restricted cash, and investments:


	December 31, 2023
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
Cash and cash equivalents:
Cash and money market funds	$	70,172	$	—	$	—	$	70,172

U.S. government & agency securities	109,786		13		(60)		109,739
Total cash and cash equivalents	179,958		13		(60)		179,911
Investments:
Commercial paper	9,947		—		—		9,947
Corporate debt securities	88,263		373		(57)		88,579
U.S. government & agency securities	353,029		478		(528)		352,979
Total investments	451,239		851		(585)		451,505
Total cash, cash equivalents, and investments	$	631,197	$	864	$	(645)	$	631,416

Short-term restricted cash	$	300	$	—	$	—	$	300
Long-term restricted cash	$	2,422	$	—	$	—	$	2,422

	December 31, 2022
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
Cash and cash equivalents:
Cash and money market funds	$	137,636	$	—	$	—	$	137,636
Commercial paper	166,514		—		(61)		166,453
U.S. government & agency securities	20,994		6		—		21,000
Total cash and cash equivalents	325,144		6		(61)		325,089
Investments:
Commercial paper	127,626		9		(333)		127,302
Corporate debt securities	49,998		—		(507)		49,491
U.S. government & agency securities	274,315		1		(3,880)		270,436
Total investments	451,939		10		(4,720)		447,229
Total cash, cash equivalents, and investments	$	777,083	$	16	$	(4,781)	$	772,318

Short-term restricted cash	$	300	$	—	$	—	$	300
Long-term restricted cash	$	2,922	$	—	$	—	$	2,922

The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of December 31, 2023:


(in thousands)	Fair Value
Due in one year or less	$	465,181
Due after one year through 5 years	96,063
Total investments	$	561,244

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 consolidated statement of operations and comprehensive loss was $32.8 million and $9.2 million for the years ended December 31, 2023 and 2022, respectively.

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Pay vs Performance Disclosure
Net loss	$ (306,735)	$ (314,248)	$ (181,223)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policy)	12 Months Ended
	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation Our 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. The consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements. On an ongoing basis, we evaluate our significant estimates including, but not limited to, the valuation of inventory, the fair value of contingent consideration, the valuation of acquired intangible assets, the useful lives assigned to long-lived assets, the computation of provisions for income taxes, and the valuations related to our convertible senior notes. While the extent of the potential impact of the 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 December 31, 2023. Actual results could differ materially from these estimates.
Functional Currency	Functional Currency The U.S. dollar is the functional currency of our international operations. We remeasure foreign subsidiaries monetary assets and liabilities to the U.S. dollar and record net gains or losses from remeasurement in other income, net, in the consolidated statements of operations and comprehensive loss.
Cash, Cash Equivalents, Restricted Cash, and Investments	Cash, Cash Equivalents, Restricted Cash, and Investments We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash equivalents may be comprised of money market funds, certificates of deposit, commercial paper, corporate bonds and notes, and government agencies’ securities. We classify our investments in debt securities as available-for-sale and report the investments at fair value in current assets. 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. Realized gains and losses, expected credit losses, as well as interest income, on available-for-sale securities are also reported in other income, net. The cost used in the determination of gains and losses of securities sold is based on the specific identification method. The cost of marketable securities is adjusted for the amortization of premiums and discounts to expected maturity. Premium and discount amortization is recorded in other income, net. Our investment portfolio at any point in time contains investments in cash deposits, money market funds, commercial paper, corporate debt securities, and U.S. government and agency securities with high credit ratings. We have established guidelines regarding diversification and maturities of investments with the objectives of maintaining safety and liquidity, while maximizing yield. Restricted cash includes cash that is not readily available for use in the Company’s operating activities. Restricted cash is primarily comprised of cash pledged under letters of credit.
Concentration and Other Risks	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. At December 31, 2023, 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. Our trade receivables are derived from revenue to customers and distributors located in the United States and other countries. We perform credit evaluations of our customers’ financial condition and, generally, require no collateral from our customers. The allowance for credit losses is based on our assessment of the collectability of customer accounts. We regularly review our trade receivables including consideration of factors such as historical experience, the age of the accounts receivable balances, customer creditworthiness, customer industry, and current and forecasted economic conditions that may affect a customer’s ability to pay. We have not experienced any significant credit losses to date. Although we have historically not experienced significant credit losses, our exposure to credit losses may increase if our customers are adversely affected by changes in economic pressures or uncertainty associated with local or global economic recessions, or other customer-specific factors. For the year ended December 31, 2023, no single customer accounted for 10% or greater of our total revenue. For the years ended December 31, 2022 and 2021, one customer accounted for approximately 12%, and 13% of our total revenue, respectively. As of December 31, 2023 and 2022, 49% and 57% of our accounts receivable were from domestic customers, respectively. As of December 31, 2023, one customer represented approximately 10% of our net accounts receivable. As of December 31, 2022, one customer represented approximately 10% 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 consolidated financial statements.
Inventory, Net	Inventory, Net Inventories are stated at the lower of cost or net realizable value on a first-in, first-out (“FIFO”) method. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess or obsolete balances. Cost includes depreciation, labor, material, and overhead costs, including product and process technology costs. Determining net realizable value of inventories involves numerous judgements, including projecting future average selling prices, sales volumes, and costs to complete products in work in process inventories. We make inventory purchases and commitments to meet future shipment schedules based on forecasted demand for our products. The business environment in which we operate is subject to rapid changes in technology and customer demand. We perform a detailed assessment of inventory each period, which includes a review of, among other factors, demand requirements, product life cycle and development plans, component cost trends, product pricing, product expiration, and quality issues. Based on our analysis, we record adjustments to inventory for potentially excess, obsolete, or impaired goods, when appropriate, to report inventory at net realizable value. Inventory adjustments may be required if actual demand, component costs, supplier arrangements, or product life cycles differ from our estimates. Any such adjustments would result in a charge to our results of operations.
Property and Equipment, Net	Property and Equipment, Net Property and equipment are stated at cost, reviewed regularly for impairment, and depreciated over the estimated useful lives of the assets, using the straight-line method. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the related asset. Major improvements are capitalized, while maintenance and repairs are expensed as incurred. Transfers of assets between property and equipment, net, and inventory are transferred at standard cost and recognized at carrying value.
Operating Leases	Operating Leases We record operating lease right-of-use assets and liabilities on our consolidated balance sheets for all leases with a term of more than 12 months. The operating lease right-of-use assets and liabilities are calculated as the present value of remaining minimum lease payments over the remaining lease term using our estimated secured incremental borrowing rates at the commencement date. Lease payments included in the measurement of the lease liability comprise the fixed rent per the term of the Lease. Operating lease expense is recognized on a straight-line basis over the lease term, with variable lease payments, such as common area maintenance fees, recognized in the period incurred.
Business Combinations	Business Combinations Under the acquisition method of accounting, we allocate the fair value of the total consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. These valuations require us to make estimates and assumptions, especially with respect to intangible assets. We record the excess consideration over the aggregate fair value of tangible and intangible assets, net of liabilities assumed, as goodwill. Costs that we incur to complete the business combination, such as legal and other professional fees, are expensed as they are incurred. In connection with certain acquisitions, contingent consideration can be earned by the sellers upon completion of certain future performance milestones. In these cases, a liability is recorded on the acquisition date for an estimate of the acquisition date fair value of the contingent consideration. These estimates require significant management judgment, including probabilities of achieving certain future milestones. Changes in the fair value of the contingent consideration subsequent to the acquisition date are recognized in operating expense in our consolidated statements of operations and comprehensive loss. If the initial accounting for a business combination is incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. We record these adjustments to the provisional amounts with a corresponding offset to goodwill. Any adjustments identified after the measurement period are recorded in the consolidated statements of operations and comprehensive loss.
Goodwill, Intangible Assets, and Other Long-Lived Assets	Goodwill, Intangible Assets, and Other Long-Lived Assets Assets acquired, including intangible assets and capitalized in-process research and development (“IPR&D”), and liabilities assumed are measured at fair value as of the acquisition date. Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of the net assets acquired. Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project (i.e., upon commercialization), the IPR&D asset is assessed for impairment and then amortized over its estimated useful life. If the relevant research and development project is abandoned, the IPR&D asset is expensed in the period of abandonment. Goodwill and IPR&D are not amortized; however, they are reviewed for impairment at least annually. We perform annual impairment testing of goodwill in the second quarter of each year, or more frequently if indicators of potential impairment exist. We generally perform annual impairment testing of IPR&D in the fourth quarter of each year, or more frequently if indicators of potential impairment exist. We perform our goodwill impairment analysis at the reporting unit level. We have one reporting unit, which aligns with our reporting structure and availability of discrete financial information. During the goodwill impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair values of our reporting unit is less than the carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and our overall financial performance. If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair value of our reporting unit is less than the carrying amount, then no additional assessment is deemed necessary. Otherwise, we proceed to compare the estimated fair value of the reporting unit with the carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the fair value, we record an impairment loss based on the difference. We may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative goodwill impairment test. During the IPR&D impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than the carrying amount. The qualitative factors include, but are not limited to, macroeconomic conditions, industry-specific conditions, and company-specific conditions. If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair value of the IPR&D is less than the carrying amount, then no additional assessment is deemed necessary. Otherwise, we proceed to compare the estimated fair value of the IPR&D with the carrying value. If the carrying amount of the IPR&D exceeds the fair value, we record an impairment loss based on the difference. We may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative impairment test. Finite-lived intangibles assets include our acquired developed technology and customer relationships. We capitalize finite-lived intangibles assets and generally amortize them on a straight-line basis over the estimated useful lives. We regularly review the carrying amount and useful lives of our finite-lived assets to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. If indicators of impairment exist, an impairment test is performed to assess the recoverability of the affected assets by determining whether the carrying amount of such assets exceeds the undiscounted expected future cash flows. If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value of the assets exceeds the fair value. Factors that may indicate potential impairment include a significant decline in our stock price and market capitalization compared to the net book value, significant changes in the ability of a particular asset to generate positive cash flows for our strategic business objectives, and the pattern of utilization of a particular asset.
Revenue Recognition	Revenue Recognition Our revenue is generated primarily from the sale of products and services. Product revenue primarily consists of sales of our instruments and related consumables; service and other revenue consist primarily of revenue earned from product maintenance agreements. We account for a contract with a customer when there is a legally enforceable contract between us and the customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Revenues are recognized when control of the promised goods are transferred to our customers, or services are performed, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We may enter into contracts with customers that include a combination of promised products and services, resulting in arrangements containing multiple performance obligations. We determine whether each product or service is distinct, in order to identify the performance obligations in the contract and allocate the contract transaction price among the distinct performance obligations. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. Therefore, instrument revenue is recognized upon transfer of control of the asset to the customer, which is generally upon delivery for sales made to our non-distributor customers and upon shipment for sales made to our distributor customers. The consideration for contracts with multiple performance obligations is allocated between separate performance obligations based on their individual standalone selling price. We determine the best estimate of standalone selling price using average selling prices over a 12-month period combined with an assessment of current market conditions. If the standalone selling price is not directly observable, we rely on estimates by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, internal costs, profit objectives, pricing practices, and other observable inputs. We recognize revenues as performance obligations are satisfied by transferring control of the product or service to the customer or over the term of a product maintenance agreement with a customer. Our revenue arrangements generally do not provide a right of return. Revenue is recorded net of discounts and sales taxes collected on behalf of governmental authorities. Certain of our agreements provide options to customers which can be exercised at a future date, such as the option to purchase our product at discounted prices, among others. In accounting for customer options, we determine whether an option is a material right and this requires us to exercise significant judgment. If a contract provides the customer an option to acquire additional goods or services at a discount that exceeds the range of discounts that we typically give for that product or service for the same class of customer, or if the option provides the customer certain additional goods or services for free, the option may be considered a material right. If the contract gives the customer the option to acquire additional goods or services at their normal standalone selling prices, we would likely determine that the option is not a material right and, therefore, account for it when the customer exercises the option. If the standalone selling price of the option is not directly observable, an estimated standalone selling price is utilized which considers adjustments for discounts that the customer could receive without exercising the option and the likelihood that the option will be exercised. We may also utilize the alternative approach to estimate the standalone selling price, available pursuant to the applicable accounting guidance, to the extent we conclude the applicable criteria for using the alternative approach has been met. We update the transaction price for expected consideration, subject to constraint, each reporting period if our estimate of future goods to be ordered by customers change. Additionally, we generally provide a one-year warranty on instruments. We accrue the cost of the assurance warranty when revenue of the instrument is recognized. Employee sales commissions are generally recorded as selling, general, and administrative expense when incurred as the amortization period for such costs, if capitalized, would have been one year or less.
Cost of Revenue and Shipping and Handling	Cost of Revenue Cost of revenue reflects the direct cost of product components, third-party manufacturing services, and our internal manufacturing overhead and customer service infrastructure costs incurred to produce, deliver, maintain, and support our instruments, consumables, and services. Manufacturing overhead is predominantly comprised of labor and facility costs. We capitalize manufacturing overhead into inventory based on a standard cost model that approximates actual costs. Service costs include the direct costs of components used in support, repair and maintenance of customer instruments as well as the cost of personnel, materials, shipping and support infrastructure necessary to support our installed customer base. Shipping and Handling Costs related to shipping and handling are included in cost of revenues for all periods presented.
Research and Development	Research and Development Research and development expense consists primarily of expenses for personnel engaged in the development of our core technology, the design and development of our future products and current product enhancements. These expenses also include prototype-related expenditures, development equipment and supplies, partner development costs, facilities costs, and other related overhead. We expense research and development costs during the period in which the costs are incurred. We defer and capitalize non-refundable advance payments made for research and development activities until the related goods are received or the related services are rendered.
Credit Losses	Credit Losses Trade accounts receivable The allowance for credit losses is based on our assessment of the collectability of customer accounts. We regularly review the allowance by considering factors such as the age of the accounts receivable balances, customer creditworthiness, customer industry, and current and forecasted economic conditions that may affect a customer’s ability to pay. Credit loss expense was immaterial for the years ended December 31, 2023, 2022, and 2021. Available-for-sale debt securities Our investment portfolio contains investments in cash deposits, money market funds, commercial paper, corporate debt securities and U.S. government and agency securities. We regularly assess whether our securities in an unrealized loss position are credit related. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income. Unrealized losses that are not credit related are included in accumulated other comprehensive income (loss). The unrealized losses on our investments are mainly attributable to government securities, including U.S. government and U.S. agency bond securities, impacted by movements in market rates and not due to issuer credit risk. We have the ability to hold and do not intend to sell the investments in unrealized loss positions before the recovery of their amortized cost bases. Although we have historically not experienced significant credit losses, our exposure to credit losses may increase if our customers are adversely affected by changes in economic pressures or uncertainty associated with local or global economic recessions, disruptions associated with the evolution of COVID-19 or other epidemics or pandemics, or other customer-specific factors.
Income Taxes	Income Taxes We account for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of our assets and liabilities and the amounts reported in the financial statements. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards. The effect of a change in tax rates on the deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. A full valuation allowance is provided against our net deferred tax assets as it is more likely than not that the deferred tax assets will not be fully realized. We regularly review our positions taken relative to income taxes. To the extent our tax positions are more likely than not going to result in additional taxes, we accrue the estimated amount of tax related to such uncertain positions.
Share-based Compensation	Share-based Compensation We recognize share-based compensation expense for share-based payments, including stock options, restricted stock units, performance stock units and stock issued under our employee stock purchase plan ("ESPP") based on the grant-date fair value. We estimate the fair value of stock options and ESPP using an option-pricing model. See Note 10. Stockholders’ Equity for further information regarding share-based compensation.
Other Comprehensive Income (Loss)	Other Comprehensive Income (Loss) Other comprehensive income (loss) is comprised of unrealized gains (losses) on our investment securities.
Earnings per Share	Earnings per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding and potential shares assuming the dilutive effect of outstanding stock options, restricted stock units, and common stock issuable pursuant to our ESPP, using the treasury stock method.
Recently Adopted Accounting Standards	Recent Accounting Pronouncements Recently Adopted Accounting Standards In October 2021, the FASB issued Accounting Standards Update ("ASU") No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU provides specific guidance on how to recognize contract assets and contract liabilities related to revenue contracts with customers acquired in a business combination. This amendment improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. We adopted this ASU on January 1, 2023. The adoption of this guidance did not have a material effect on our consolidated financial statements.
Accounting Pronouncements Pending Adoption	Accounting Pronouncements Pending Adoption In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires entities to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. This authoritative guidance will be effective for us in fiscal year 2025, with early adoption permitted. The Company is currently evaluating the impact of the ASU but does not expect any material impacts upon adoption.
Fair Value of Financial Instruments	We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our non-performance risk, or that of our counterparty, is considered in determining the fair values of liabilities and assets, respectively. We classify our cash deposits and money market funds within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. We classify our investments as Level 2 instruments based on market pricing and other observable inputs. We did not classify any of our investments within Level 3 of the fair value hierarchy. 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.

STOCKHOLDERS’ EQUITY - Schedule of Fair Value of Employee Stock Purchase Plan (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%
ESPP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Risk-free interest rate, minimum	4.90%	0.60%	0.10%
Risk-free interest rate, maximum	5.50%	3.50%	0.20%
Weighted average grant date fair value, granted (in usd per share)	$ 5.34	$ 4.28	$ 25.07
ESPP \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term in years	6 months	6 months	6 months
Expected volatility	79.00%	70.00%	67.00%
ESPP \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term in years	2 years	2 years	2 years
Expected volatility	97.00%	97.00%	68.00%

FINANCIAL INSTRUMENTS - Narrative (Details) $ in Thousands				12 Months Ended
FINANCIAL INSTRUMENTS - Narrative (Details) $ in Thousands	Sep. 20, 2023 USD ($) shares	Aug. 02, 2023 USD ($) d shares	Sep. 20, 2021 USD ($) shares	Dec. 31, 2023 USD ($) shares	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Financial Instruments [Line Items]
Business acquisition, anniversary				5 years
Issuance of common stock in acquisition				$ 76,642		$ 237,885
Issuance of common stock following milestone achievement (in shares) \| shares				8,988,391
Issuance of common stock following milestone achievement				$ 84,761
Investment income, net				32,800	$ 9,200
Omniome, Inc
Financial Instruments [Line Items]
Total cash paid	$ 100,900		$ 315,703
Issuance of common stock in acquisition (in shares) \| shares	9,000,000		8,911,580
Issuance of common stock in acquisition	$ 95,900
Milestone revenue				$ 101,300
Omniome, Inc \| Common Stock
Financial Instruments [Line Items]
Issuance of common stock in acquisition	100,000
Omniome, Inc \| Employee Stock Option
Financial Instruments [Line Items]
Issuance of common stock in acquisition	$ 4,100
Apton
Financial Instruments [Line Items]
Total cash paid		$ 200
Issuance of common stock in acquisition (in shares) \| shares		6,121,571		6,300,000
Average trading period \| d		20
Minimum \| Valuation, Income Approach \| Measurement Input, Risk Free Interest Rate
Financial Instruments [Line Items]
Discount rates				0.078
Maximum \| Valuation, Income Approach \| Measurement Input, Risk Free Interest Rate
Financial Instruments [Line Items]
Discount rates				0.082

INVITAE COLLABORATION	12 Months Ended
INVITAE COLLABORATION	Dec. 31, 2023
Invitae Collaboration Arrangement [Abstract]
INVITAE COLLABORATION	INVITAE COLLABORATION On June 24, 2022, we entered into an Amended and Restated Development and Commercialization Agreement (the “Amended and Restated Agreement”) with Invitae Corporation (“Invitae”). The Amended and Restated Agreement amended and restated the existing Development and Commercialization Agreement, effective as of January 12, 2021, as amended by Amendment No. 1 to Development and Commercialization Agreement, entered into on June 3, 2021, by and between us and Invitae (together, the “Original Agreement”). Unless otherwise agreed in writing or terminated in accordance with the Amended and Restated Agreement, the term of the Amended and Restated Agreement shall continue until June 30, 2028 (“Term”). Pursuant to the Original Agreement, Invitae provided certain funding to us to develop products relating to production-scale high-throughput sequencing (“Program Products”). If Program Products were to become commercially available, Invitae had the right to purchase the Program Products at preferred pricing. Under the Amended and Restated Agreement, we will continue to receive feedback, input and insight from Invitae in connection with the intended development of our new sequencing systems; however, such feedback will not be contractually required, and Invitae has no contractual right to participate in decisions regarding the development program for such new sequencing systems. Our development plans for such new sequencing systems will be at our discretion and pursuant to our own internal processes and programs. Invitae will not be contractually obligated to reimburse us for development costs under the Amended and Restated Agreement. There can be no assurances that the in-development sequencing systems will continue to be developed, be successfully developed or become available for commercial sale. In consideration of the non-refundable payments received from Invitae pursuant to the Original Agreement of $23.5 million, we will provide Invitae with credits in connection with Invitae’s anticipated purchase of certain currently sequencing systems (instruments, consumables and service contracts). The credits will expire on June 30, 2025 (“Credit Expiration Date”). Subject to certain conditions, Invitae will also be entitled to most favored pricing for the Company’s Sequel IIe systems and certain in-development systems through the Term. We and Invitae may terminate the Amended and Restated Agreement if the other party remains in material breach of the Amended and Restated Agreement following a cure period to remedy the material breach. The Amended and Restated Agreement was deemed a contract modification and accounted for on a prospective basis in accordance with ASC Topic 606. We will recognize proportionate amounts of the transaction price, including payments made by Invitae to us pursuant to the Original Agreement, in revenue as the remaining performance obligations are satisfied, which is when Invitae places purchase orders for certain sequencing platforms and the associated goods or services are delivered. Any remaining unused credits will be recognized when they expire. Invitae purchased certain instruments and consumables under the terms of the Amended and Restated Agreement, for which $10.5 million and $3.7 million of revenue was recognized as product revenue during the years ended December 31, 2023 and 2022, respectively, on the consolidated statements of operations and comprehensive loss. As of December 31, 2023, $8.0 million of deferred revenue, current, and $2.9 million of deferred revenue, non-current, is recorded on the consolidated balance sheet relating to all future performance obligations under the Amended and Restated Agreement.

BALANCE SHEET COMPONENTS - Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Balance Sheet Components [Abstract]
Salaries and benefits	$ 29,337	$ 17,432
Accrued interest payable	2,834	5,100
Accrued purchase commitments	2,613	3,705
Accrued product development costs	1,033	2,326
Accrued professional services and legal fees	2,641	1,005
Inventory accrual	353	332
Warranty accrual	4,681	1,651
Other	2,216	1,045
Accrued expenses	$ 45,708	$ 32,596

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES- Narrative (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2023 unit	Dec. 31, 2023 segment	Dec. 31, 2022	Dec. 31, 2021
Summary Of Significant Accounting Policies [Line Items]
Number of reportable segments			1	1
Product warranty period	1 year
Sales Revenue, Net \| Customer One \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage					12.00%	13.00%
Accounts Receivable \| Customer One \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		10.00%			10.00%
Accounts Receivable \| Domestic Customers \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		49.00%			57.00%

COMMITMENTS AND CONTINGENCIES - Schedule of Amount, Timing and Uncertainty of Cash Flows from Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Maturity of Lease Liabilities
2024	$ 12,082
2025	12,307
2026	12,412
2027	9,930
2028	0
Thereafter	0
Total undiscounted operating lease payments	46,731
Less: imputed interest	(5,534)
Present value of operating lease liabilities	41,197
Balance Sheet Classification
Operating lease liabilities, current	9,591	$ 8,886
Operating lease liabilities, non-current	31,606	$ 41,070
Total operating lease liabilities	$ 41,197

SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

We are organized as, and operate in, one reportable segment: the development, manufacturing, and marketing of an integrated platform for genetic analysis. Our chief operating decision-maker is our Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for the purposes of evaluating financial performance and allocating resources, accompanied by information about revenue by geographic regions. Our assets are primarily located in the United States of America and not allocated to any specific region, and we do not measure the performance of geographic regions based upon asset-based metrics. Therefore, geographic information is presented only for revenue.

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


	Years Ended December 31,
(in thousands)	2023		2022		2021
Americas	$	105,410	$	69,561	$	64,521
Europe, Middle East, and Africa	40,658		22,598		30,271
Asia-Pacific	54,453		36,145		35,721
Total	$	200,521	$	128,304	$	130,513

A summary of our revenue by category is as follows:


	Years Ended December 31,
(in thousands)	2023		2022		2021
Instrument revenue	$	120,451	$	48,719	$	61,324
Consumable revenue	63,421		59,980		52,181
Product revenue	183,872		108,699		113,505
Service and other revenue	16,649		19,605		17,008
Total revenue	$	200,521	$	128,304	$	130,513

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 40
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of Revenue by Geographic Location

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


	Years Ended December 31,
(in thousands)	2023		2022		2021
Americas	$	105,410	$	69,561	$	64,521
Europe, Middle East, and Africa	40,658		22,598		30,271
Asia-Pacific	54,453		36,145		35,721
Total	$	200,521	$	128,304	$	130,513

Summary of Revenue by Category

A summary of our revenue by category is as follows:


	Years Ended December 31,
(in thousands)	2023		2022		2021
Instrument revenue	$	120,451	$	48,719	$	61,324
Consumable revenue	63,421		59,980		52,181
Product revenue	183,872		108,699		113,505
Service and other revenue	16,649		19,605		17,008
Total revenue	$	200,521	$	128,304	$	130,513