0001299130-24-000183 | 10-Q | XBRL Viewer | Pacific Biosciences OF California INC

NET LOSS PER SHARE

9 Months Ended

Sep. 30, 2024

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 Condensed Consolidated Statements of Operations and Comprehensive Loss:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2024		2023		2024		2023
Numerator:
Net loss	$	(60,725)	$	(66,869)	$	(312,222)	$	(224,717)

Denominator:
Basic
Weighted average shares used in computing basic net loss per share	272,915		255,001		271,631		249,082
Basic net loss per share	$	(0.22)	$	(0.26)	$	(1.15)	$	(0.90)

Diluted




Weighted average shares used in computing diluted net loss per share	272,915		255,001		271,631		249,082
Diluted net loss per share	$	(0.22)	$	(0.26)	$	(1.15)	$	(0.90)

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:


	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023
Shares issuable upon conversion of convertible senior notes	31,063	31,063	31,063	31,063




Equity Awards	36,496	28,100	36,496	28,100

See Note 2. Business Acquisitions for detailed information on contingently issuable shares due upon achievement of a milestone. See Note 8. Stockholders’ Equity for detailed information on equity awards.

CONVERTIBLE SENIOR NOTES (Tables)

9 Months Ended

Sep. 30, 2024

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 Condensed Consolidated Balance Sheets as follows:


(in thousands)	September 30, 2024		December 31, 2023
Principal amount	$	441,000	$	441,000
Unamortized debt premium	471		524
Unamortized debt issuance costs	(6,197)		(6,907)
Net carrying amount	$	435,274	$	434,617

The net carrying amount of the liability for the 2028 Notes is included as convertible senior notes, net, non-current in the Condensed Consolidated Balance Sheets as follows:


(in thousands)	September 30, 2024		December 31, 2023
Principal amount	$	459,000	$	459,000
Unamortized debt issuance costs	(1,130)		(1,374)
Net carrying amount	$	457,870	$	457,626

Schedule of Interest Expense

Interest expense for the 2030 Notes was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	1,516	$	1,516	$	4,565	$	1,516
Amortization of debt issuance costs	237		229		712		229
Total interest expense	$	1,753	$	1,745	$	5,277	$	1,745

Interest expense for the 2028 Notes was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	1,721	$	1,721	$	5,163	$	8,415
Amortization of debt issuance costs	81		80		243		392
Total interest expense	$	1,802	$	1,801	$	5,406	$	8,807

- 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.

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+ Details

STOCKHOLDERS’ EQUITY - Schedule of Fair Value of Employee Stock Options (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%	0.00%
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 10 months 24 days
Expected volatility, minimum			81.00%
Expected volatility, maximum			93.00%
Expected volatility				78.00%
Risk-free interest rate, minimum			3.48%	3.73%
Risk-free interest rate, maximum			4.32%	4.21%
Dividend yield			0.00%	0.00%
Weighted average grant date fair value per share (in dollars per share)			$ 1.40	$ 7.89

SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands	Nov. 07, 2024 USD ($) d $ / shares shares	Feb. 16, 2021 USD ($) $ / shares	Sep. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 USD ($)
2028 Convertible Senior Notes
Subsequent Event [Line Items]
Principal amount			$ 459,000	$ 459,000
2028 Convertible Senior Notes \| Convertible Debt
Subsequent Event [Line Items]
Principal amount					$ 459,000
Principal amount of notes		$ 900,000			$ 441,000
Debt instrument, stated interest rate		1.50%
Debt instrument, convertible, conversion ratio		0.0229885
Conversion price per share (in dollars per share) \| $ / shares		$ 43.50
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%
2028 Convertible Senior Notes \| Convertible Debt \| Debt Conversion Terms One
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days		180 days
2028 Convertible Senior Notes \| Convertible Debt \| Debt Conversion Terms Two
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days		361 days
Minimum \| 2028 Convertible Senior Notes \| Convertible Debt
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days		181 days
Maximum \| 2028 Convertible Senior Notes \| Convertible Debt
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days		360 days
Subsequent Event
Subsequent Event [Line Items]
Lock-up period restriction	6 months
Subsequent Event \| 2028 Convertible Senior Notes \| Convertible Debt
Subsequent Event [Line Items]
Principal amount	$ 459,000
Beneficial conversion feature	$ 50,000
Threshold percentage of stock price trigger	9.90%
Subsequent Event \| 2029 Convertible Senior Notes \| Convertible Debt
Subsequent Event [Line Items]
Principal amount of notes	$ 200,000
Debt conversion, shares issued (in shares) \| shares	20,451,570
Threshold percentage of stock price trigger	150.00%
Debt instrument, stated interest rate	1.50%
Debt instrument, convertible, conversion ratio	0.2045157
Conversion price per share (in dollars per share) \| $ / shares	$ 4.89
Threshold trading days \| d	20
Threshold consecutive trading days \| d	30
Redemption price, percentage	100.00%
Debt instrument, debt default, calendar days	360 days
Subsequent Event \| 2029 Convertible Senior Notes \| Convertible Debt \| Debt Conversion Terms One
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days	180 days
Debt instrument, interest in the event of default	0.25%
Subsequent Event \| 2029 Convertible Senior Notes \| Convertible Debt \| Debt Conversion Terms Two
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days	361 days
Additional interest in the event of default	0.50%
Subsequent Event \| Minimum \| 2029 Convertible Senior Notes \| Convertible Debt \| Debt Conversion Terms Two
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days	181 days
Subsequent Event \| Maximum \| 2029 Convertible Senior Notes \| Convertible Debt \| Debt Conversion Terms Two
Subsequent Event [Line Items]
Debt instrument, debt default, calendar days	360 days

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Cash flows from operating activities
Net loss	$ (60,725,000)		$ (66,869,000)	$ (312,222,000)	$ (224,717,000)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation				10,932,000	8,487,000
Amortization of acquired intangible assets				20,558,000	1,408,000
Amortization of right-of-use assets				10,912,000	4,940,000
Share-based compensation expense				55,003,000	55,534,000
Goodwill impairment	0	$ 0	0	93,200,000	0
Merger-related compensation expense				0	3,395,000
Accretion of discount and amortization of premium on marketable securities, net				(10,663,000)	(10,088,000)
Change in the estimated fair value of contingent consideration	1,170,000		(271,000)	1,100,000	13,960,000
Loss on extinguishment of debt	0		0	0	2,033,000
Inventory provision				3,715,000	4,691,000
Deferred income taxes				0	(10,706,000)
Other				1,002,000	667,000
Changes in assets and liabilities
Accounts receivable, net				7,232,000	(11,700,000)
Inventory, net				(15,394,000)	(22,849,000)
Prepaid expenses and other assets				3,534,000	(7,287,000)
Accounts payable				(2,222,000)	1,706,000
Accrued expenses				(26,665,000)	2,055,000
Deferred revenue				875,000	(4,867,000)
Operating lease liabilities				(9,252,000)	(6,396,000)
Contingent consideration liability				0	(732,000)
Other liabilities				(7,053,000)	(1,147,000)
Net cash used in operating activities				(175,408,000)	(201,613,000)
Cash flows from investing activities
Purchase of property and equipment				(4,571,000)	(6,819,000)
Cash paid for purchase of Apton, net of cash acquired				0	(102,000)
Purchases of investments				(418,164,000)	(553,748,000)
Sales of investments				8,061,000	595,000
Maturities of investments				480,440,000	631,253,000
Net cash provided by investing activities				65,766,000	71,179,000
Cash flows from financing activities
Proceeds from issuance of common stock under equity offerings, net of issuance costs				0	189,200,000
Proceeds from issuance of common stock from equity plans				7,703,000	14,383,000
Payment of debt issuance costs				0	(7,325,000)
Payment of contingent consideration				0	(4,368,000)
Notes payable principal payoff				(490,000)	(1,397,000)
Net cash provided by financing activities				7,213,000	190,493,000
Net (decrease) increase in cash, cash equivalents, and restricted cash				(102,429,000)	60,059,000
Cash, cash equivalents, and restricted cash at beginning of period		$ 182,633,000		182,633,000	328,311,000	$ 328,311,000
Cash, cash equivalents, and restricted cash at end of period	80,204,000		388,370,000	80,204,000	388,370,000	182,633,000
Cash and cash equivalents at end of period	77,982,000		385,648,000	77,982,000	385,648,000	179,911,000
Restricted cash at end of period	2,222,000		2,722,000	2,222,000	2,722,000
Cash, cash equivalents, and restricted cash at end of period	$ 80,204,000		$ 388,370,000	$ 80,204,000	$ 388,370,000	$ 182,633,000

BUSINESS ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Business Combination

As of December 31, 2023, 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	$	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

STOCKHOLDERS’ EQUITY - Schedule of Fair Value of Employee Stock Purchase Plan (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%	0.00%
ESPP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected volatility, minimum			81.00%	79.00%
Expected volatility, maximum			118.00%	97.00%
Risk-free interest rate, minimum			3.88%	4.87%
Risk-free interest rate, maximum			5.27%	5.47%
Dividend yield			0.00%	0.00%
Weighted average grant date fair value per share (in dollars per share)			$ 1.53	$ 5.34
Minimum \| ESPP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term in years			6 months	6 months
Maximum \| ESPP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term in years			2 years	2 years

FINANCIAL INSTRUMENTS - Schedule of Changes in Estimated Fair Value of Contingent Consideration (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 19,550
Change in estimated fair value	1,100
Ending balance	$ 20,650

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net loss	$ (60,725)	$ (66,869)	$ (312,222)	$ (224,717)

- Definition

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

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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Reference 31: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

BALANCE SHEET COMPONENTS - Schedule of Estimated Future Amortization Expense of Acquisition-Related Intangible Assets with Definite Lives (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Components [Abstract]
Remainder of 2024	$ 6,853
2025	27,412
2026	27,412
2027	27,412
2028	27,412
2029 and thereafter	264,925
Total	$ 381,426	$ 401,984

STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

STOCKHOLDERS’ EQUITY

Equity Plans

As of September 30, 2024, the Company had share-based compensation awards outstanding under the 2020 Equity Incentive Plan (the “2020 Plan”), the 2020 Inducement Equity Incentive Plan (the “Inducement Plan”), the 2021 adopted Omniome Equity Incentive Plan of Pacific Biosciences of California, Inc. (the “Omniome Plan”) and the 2010 Employee Stock Purchase Plan, from which we issued equity awards and employee stock.

On June 18, 2024, stockholders approved an amendment to the 2020 Plan, and we reserved an additional 20 million shares of our common stock for issuance pursuant to equity awards granted under the 2020 Plan.

As of September 30, 2024, we had 26.1 million shares remaining and available for future issuance under the 2020 Plan, Inducement Plan, and the Omniome Plan. Shares remaining and available for future issuance reflect shares that may become eligible to vest upon the achievement of maximum targets for certain equity awards.

Refer to Note 10 – Stockholders' Equity, in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2023 for more information on the Company's equity plans.

Stock Options

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


(shares in thousands)	Number of shares	Weighted average exercise price
Outstanding at December 31, 2023	13,011	$	10.63
Granted	493	1.99
Exercised	(515)	3.15
Canceled	(1,474)	9.35
Expired	(287)	5.70
Outstanding at September 30, 2024	11,228	$	10.88

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

We issue RSUs for which the respective shares vest when the requisite service period is achieved. We issue PSUs for which the number of shares issuable is based on performance relative to specified revenue targets and continued employment through the vesting period. These PSU shares are issuable following the third year of the performance 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 the 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:


	Restricted Stock Units (RSU)	Performance Stock Units (PSU)	Weighted average grant date fair value
(shares in thousands)			RSU		PSU
Outstanding at December 31, 2023	11,308	541	$	12.06	$	9.43
Granted	12,604	—	5.04		—
Vested	(3,647)	—	12.33		—
Forfeited	(4,523)	(39)	8.33		9.43
Outstanding at September 30, 2024	15,742	502	$	7.45	$	9.43

Employee Stock Purchase Plan (“ESPP”)

Shares issued under our ESPP were 1,906,529 and 1,735,058 during the nine months ended September 30, 2024 and 2023, respectively. In the first quarter of 2024, an additional 4.0 million shares were reserved under the ESPP. As of September 30, 2024, 14.3 million shares of our common stock remain available for issuance under our ESPP.

Share-Based Compensation

The following table summarizes share-based compensation expense:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	1,229	$	1,125	$	4,466	$	4,251
Research and development	4,740		6,182		15,119		18,310
Sales, general and administrative	12,290		12,384		35,418		32,973
Total share-based compensation expense	$	18,259	$	19,691	$	55,003	$	55,534

Determining Fair Value

We estimate the fair value of stock options granted using the Black-Scholes valuation method and a single option award approach. When determining the current share prices underlying the stock options for calculating the grant-date fair value, we reference the observable market prices of our stock. 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 RSUs and PSUs 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 ESPP, we estimate the grant-date fair value, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model. We estimate forfeitures of stock options, RSUs and shares purchased under our ESPP which is utilized to determine the compensation expense to be recorded over the requisite service period.

•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, considering 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.

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


	Nine Months Ended September 30,
		2024	2023
Expected term in years		4.9	4.9
Expected volatility		81% - 93%	78%
Risk-free interest rate		3.48% - 4.32%	3.73% - 4.21%
Dividend yield		—	—
Weighted average grant date fair value per share		$1.40	$7.89

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


	Nine Months Ended September 30,
		2024	2023
Expected term in years		0.5 — 2.0	0.5 — 2.0
Expected volatility		81% — 118%	79% - 97%
Risk-free interest rate		3.88% — 5.27%	4.87% — 5.47%
Dividend yield		—	—
Weighted average grant date fair value per share		$1.53	$5.34

STOCKHOLDERS’ EQUITY - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 18,259	$ 19,691	$ 55,003	$ 55,534
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	1,229	1,125	4,466	4,251
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	4,740	6,182	15,119	18,310
Sales, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 12,290	$ 12,384	$ 35,418	$ 32,973

BUSINESS ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended	12 Months Ended
	Aug. 02, 2023	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2023	Sep. 30, 2024
Business Acquisition [Line Items]
Contingent consideration				$ 19,550	$ 20,650
Issuance of common stock in connection with liquidity event bonus plan		$ 2,111	$ 2,111
Apton
Business Acquisition [Line Items]
Stock issued for payment	$ 76,600
Cash payments	200
Contingent consideration	18,500
Stock-based compensation expense excluded from consideration transferred	$ 1,300
Issuance of common stock in acquisition (in shares)	6,121,571			6,300,000
Milestone revenue	$ 50,000
Anniversary	5 years
Average trading period	20 days
Costs incurred				$ 9,000
Merger-related expenses				$ 2,800
Issuance of common stock in connection with liquidity event bonus plan (in shares)				168,621
Issuance of common stock in connection with liquidity event bonus plan				$ 2,100
Increase in goodwill				$ 52,300
In-process research and development	$ 55,000
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]
Contingent consideration	$ 25,000

NET LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss Per Share

The following table presents the calculation of the basic and diluted net loss per share amounts presented in the Condensed Consolidated Statements of Operations and Comprehensive Loss:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2024		2023		2024		2023
Numerator:
Net loss	$	(60,725)	$	(66,869)	$	(312,222)	$	(224,717)

Denominator:
Basic
Weighted average shares used in computing basic net loss per share	272,915		255,001		271,631		249,082
Basic net loss per share	$	(0.22)	$	(0.26)	$	(1.15)	$	(0.90)

Diluted




Weighted average shares used in computing diluted net loss per share	272,915		255,001		271,631		249,082
Diluted net loss per share	$	(0.22)	$	(0.26)	$	(1.15)	$	(0.90)

Schedule of Antidilutive Shares Excluded From Computation of Diluted Net Loss per Share


	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023
Shares issuable upon conversion of convertible senior notes	31,063	31,063	31,063	31,063




Equity Awards	36,496	28,100	36,496	28,100

FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2024

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:


	September 30, 2024								December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	58,703	$	19,279	$	—	$	77,982	$	70,172	$	109,739	$	—	$	179,911
Investments:
Commercial paper	—		—		—		—		—		9,947		—		9,947
Corporate debt securities	—		68,178		—		68,178		—		88,579		—		88,579
U.S. government & agency securities	—		324,987		—		324,987		—		352,979		—		352,979
Total investments	—		393,165		—		393,165		—		451,505		—		451,505

Short-term restricted cash	690		—		—		690		300		—		—		300
Long-term restricted cash	1,532		—		—		1,532		2,422		—		—		2,422
Total assets measured at fair value	$	60,925	$	412,444	$	—	$	473,369	$	72,894	$	561,244	$	—	$	634,138

Liabilities
Contingent consideration	$	—	$	—	$	20,650	$	20,650	$	—	$	—	$	19,550	$	19,550
Total liabilities measured at fair value	$	—	$	—	$	20,650	$	20,650	$	—	$	—	$	19,550	$	19,550

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 five-year anniversary of the closing date of the acquisition. As of September 30, 2024, the key input used in the determination of the fair value included projected revenues of 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 6.7% to 7.1%. 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.

Changes in the estimated fair value of the contingent consideration liability for the nine months ended September 30, 2024 were as follows:


(in thousands)	Level 3
Beginning balance as of December 31, 2023	$	19,550

Change in estimated fair value	1,100

Ending balance as of September 30, 2024	$	20,650

Changes to the fair value are recorded as change in fair value of contingent consideration in the Condensed Consolidated Statement of Operations and Comprehensive Loss.

For the nine months ended September 30, 2024, 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.

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


	As of September 30, 2024
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
Cash and cash equivalents	$	77,980	$	2	$	—	$	77,982
Investments:

Corporate debt securities	67,563		620		(5)		68,178
U.S. government & agency securities	324,052		962		(27)		324,987
Total investments	391,615		1,582		(32)		393,165
Total cash, cash equivalents and investments	$	469,595	$	1,584	$	(32)	$	471,147

Short-term restricted cash	$	690	$	—	$	—	$	690
Long-term restricted cash	$	1,532	$	—	$	—	$	1,532


	As of December 31, 2023
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
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

The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of September 30, 2024:


(in thousands)	Fair Value
Due in one year or less	$	321,789
Due after one year through five years	90,655
Total	$	412,444

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

Investment income included in other income, net on the Condensed Consolidated Statement of Operations and Comprehensive Loss was $6.0 million and $19.8 million for the three and nine months ended September 30, 2024, respectively, and $9.2 million and $25.0 million for the three and nine months ended September 30, 2023, respectively.

CONVERTIBLE SENIOR NOTES - Schedule of Net Carrying Amount (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
2030 Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount	$ 441,000	$ 441,000
Unamortized debt premium	471	524
Unamortized debt issuance costs	(6,197)	(6,907)
Net carrying amount	435,274	434,617
2028 Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount	459,000	459,000
Unamortized debt issuance costs	(1,130)	(1,374)
Net carrying amount	$ 457,870	$ 457,626

- 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

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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

FINANCIAL INSTRUMENTS - Schedule of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 469,595	$ 631,197
Gross unrealized gains	1,584	864
Gross unrealized losses	(32)	(645)
Fair Value	471,147	631,416
Short-term restricted cash	690	300
Long-term restricted cash	1,532	2,422
Cash and cash equivalents
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	77,980	179,958
Gross unrealized gains	2	13
Gross unrealized losses	0	(60)
Fair Value	77,982	179,911
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		9,947
Gross unrealized gains		0
Gross unrealized losses		0
Fair Value		9,947
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	67,563	88,263
Gross unrealized gains	620	373
Gross unrealized losses	(5)	(57)
Fair Value	68,178	88,579
U.S. government & agency securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	324,052	353,029
Gross unrealized gains	962	478
Gross unrealized losses	(27)	(528)
Fair Value	324,987	352,979
Investments:
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	391,615	451,239
Gross unrealized gains	1,582	851
Gross unrealized losses	(32)	(585)
Fair Value	$ 393,165	$ 451,505

BALANCE SHEET COMPONENTS - Schedule of Changes in Reserve for Product Warranties (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance at beginning of period	$ 3,462	$ 2,862	$ 4,681	$ 1,651
Additions charged to cost of product revenue	1,414	2,825	4,787	5,675
Repairs and replacements	(1,610)	(1,722)	(6,202)	(3,361)
Balance at end of period	$ 3,266	$ 3,965	$ 3,266	$ 3,965

REVENUE (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Geographic Location

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Americas	$	20,107	$	28,978	$	58,542	$	71,480
Europe, Middle East and Africa	9,119		10,994		24,497		29,594
Asia-Pacific	10,741		15,719		31,751		41,090
Total	$	39,967	$	55,691	$	114,790	$	142,164

Schedule of Revenue by Category

A summary of our revenue by category is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Instrument revenue	$	16,788	$	34,694	$	50,491	$	85,317
Consumable revenue	18,508		16,868		51,560		44,554
Product revenue	35,296		51,562		102,051		129,871
Service and other revenue	4,671		4,129		12,739		12,293
Total revenue	$	39,967	$	55,691	$	114,790	$	142,164

RESTRUCTURING

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

RESTRUCTURING

During the nine months ended September 30, 2024, we implemented an expense reduction initiative that included workforce reductions, the closing of our San Diego office, and other actions to reduce annualized run-rate operating expenses.

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


(in thousands)	Three Months Ended September 30, 2024		Cumulative amount incurred to date
Employee separation costs	$	—	$	10,051
Other costs	6,701		14,678
Total restructuring charges(1)	$	6,701	$	24,729

(1) For the three months ended September 30, 2024, $6.9 million was recorded in sales, general and administrative expense.

Cumulative charges incurred to date include $14.4 million in sales, general and administrative expense; $5.9 million in research and development expense; and $4.4 million in cost of revenue.

Cumulative charges incurred to date include employee separation costs comprised of approximately $5.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification (WARN) Act and approximately $4.5 million of severance costs.

Other costs in the three months ended September 30, 2024 and cumulative charges incurred to date are primarily related to accelerated amortization and depreciation of $5.1 million and $8.1 million respectively, for the right-of-use asset, leasehold improvements, and furniture and fixtures relating to the abandonment of the San Diego office. We also incurred cumulative charges to date for excess inventory of $3.6 million primarily relating to a decrease in internal demand resulting from the expense reduction initiatives which were recognized in cost of product revenues. The accelerated amortization and depreciation, which was recognized in sales, general and administrative expense, was determined as a result of the Company's change in estimate pertaining to its remaining useful life of the San Diego office utilizing the estimated date on which it planned to abandon the San Diego office. The lease liability pertaining to the San Diego office was also remeasured during the three months ended June 30, 2024 resulting in a reduction in the operating lease liability balance of $4.4 million, which was offset against the right-of-use asset on the Condensed Consolidated Balance Sheets. We fully exited our San Diego office in September 2024.

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


(in thousands)	Employee Separation Costs		Other Costs		Total
Expense recorded in YTD 2024	$	10,051	$	2,321	$	12,372
Cash paid during YTD 2024	(10,008)		(2,049)		(12,057)
Amount recorded in current liabilities as of September 30, 2024	$	43	$	272	$	315

Estimated total restructuring costs to still be incurred	$	—	$	2,074	$	2,074

The table above excludes noncash activities and amounts incurred relating to the San Diego office lease liability. The ending balance of the San Diego office lease liability as of September 30, 2024 is $3.4 million, and is included in operating lease liabilities, current on the Condensed Consolidated Balance Sheets.

The other restructuring costs are expected to be incurred and paid by the end of 2025.

BUSINESS ACQUISITIONS - Schedule of Business Acquisition (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Aug. 02, 2023
Business Acquisition [Line Items]
Goodwill	$ 369,061	$ 462,261
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

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

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+ Details

RESTRUCTURING - Schedule of Restructuring Reserve by Type of Cost (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 12,372
Payments for restructuring	(12,057)
Restructuring reserve	315
Estimated total restructuring costs to still be incurred	2,074
Employee separation costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	10,051
Payments for restructuring	(10,008)
Restructuring reserve	43
Estimated total restructuring costs to still be incurred	0
Other costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	2,321
Payments for restructuring	(2,049)
Restructuring reserve	272
Estimated total restructuring costs to still be incurred	$ 2,074

- 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

REVENUE - Schedule of Revenue by Category (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 39,967	$ 55,691	$ 114,790	$ 142,164
Instrument revenue
Disaggregation of Revenue [Line Items]
Total revenue	16,788	34,694	50,491	85,317
Consumable revenue
Disaggregation of Revenue [Line Items]
Total revenue	18,508	16,868	51,560	44,554
Product revenue
Disaggregation of Revenue [Line Items]
Total revenue	35,296	51,562	102,051	129,871
Service and other revenue
Disaggregation of Revenue [Line Items]
Total revenue	$ 4,671	$ 4,129	$ 12,739	$ 12,293

- 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

- Definition

Amount, excluding 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.

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+ Details

FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Investments, All Other Investments [Abstract]

Schedule 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:


	September 30, 2024								December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	58,703	$	19,279	$	—	$	77,982	$	70,172	$	109,739	$	—	$	179,911
Investments:
Commercial paper	—		—		—		—		—		9,947		—		9,947
Corporate debt securities	—		68,178		—		68,178		—		88,579		—		88,579
U.S. government & agency securities	—		324,987		—		324,987		—		352,979		—		352,979
Total investments	—		393,165		—		393,165		—		451,505		—		451,505

Short-term restricted cash	690		—		—		690		300		—		—		300
Long-term restricted cash	1,532		—		—		1,532		2,422		—		—		2,422
Total assets measured at fair value	$	60,925	$	412,444	$	—	$	473,369	$	72,894	$	561,244	$	—	$	634,138

Liabilities
Contingent consideration	$	—	$	—	$	20,650	$	20,650	$	—	$	—	$	19,550	$	19,550
Total liabilities measured at fair value	$	—	$	—	$	20,650	$	20,650	$	—	$	—	$	19,550	$	19,550

Schedule of Changes in the Estimated Fair Value of Contingent Consideration Liability

Changes in the estimated fair value of the contingent consideration liability for the nine months ended September 30, 2024 were as follows:


(in thousands)	Level 3
Beginning balance as of December 31, 2023	$	19,550

Change in estimated fair value	1,100

Ending balance as of September 30, 2024	$	20,650

Schedule of Cash, Cash Equivalents and Investments

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


	As of September 30, 2024
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
Cash and cash equivalents	$	77,980	$	2	$	—	$	77,982
Investments:

Corporate debt securities	67,563		620		(5)		68,178
U.S. government & agency securities	324,052		962		(27)		324,987
Total investments	391,615		1,582		(32)		393,165
Total cash, cash equivalents and investments	$	469,595	$	1,584	$	(32)	$	471,147

Short-term restricted cash	$	690	$	—	$	—	$	690
Long-term restricted cash	$	1,532	$	—	$	—	$	1,532


	As of December 31, 2023
(in thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses		Fair Value
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

The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of September 30, 2024:


(in thousands)	Fair Value
Due in one year or less	$	321,789
Due after one year through five years	90,655
Total	$	412,444

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481800/320-10-50-3

+ Details

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	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
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	273,812,000	267,744,000
Common stock, shares outstanding (in shares)	273,812,000	267,744,000

STOCKHOLDERS’ EQUITY - Schedule of Stock Option Activity (Details) - Time-based stock option shares in Thousands	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Number of shares
Outstanding, beginning (in shares) \| shares	13,011
Granted (in shares) \| shares	493
Exercised (in shares) \| shares	(515)
Canceled (in shares) \| shares	(1,474)
Expired (in shares) \| shares	(287)
Outstanding, ending (in shares) \| shares	11,228
Weighted average exercise price
Beginning, outstanding (in dollars per share) \| $ / shares	$ 10.63
Granted (in dollars per share) \| $ / shares	1.99
Exercised (in dollars per share) \| $ / shares	3.15
Canceled (in dollars per share) \| $ / shares	9.35
Expired (in dollars per share) \| $ / shares	5.70
Ending, outstanding (in dollars per share) \| $ / shares	$ 10.88

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
Total revenue	$ 39,967,000	$ 55,691,000	$ 114,790,000	$ 142,164,000
Cost of Revenue:
Amortization of acquired intangible assets	3,201,000	184,000	7,172,000	550,000
Loss on purchase commitment	0	0	998,000	0
Total cost of revenue	29,963,000	37,789,000	87,566,000	98,955,000
Gross profit	10,004,000	17,902,000	27,224,000	43,209,000
Operating Expense:
Research and development	25,516,000	47,514,000	107,456,000	142,626,000
Sales, general and administrative	43,746,000	43,431,000	133,376,000	123,822,000
Goodwill impairment	0	0	93,200,000	0
Merger-related expenses	0	8,979,000	0	8,979,000
Amortization of acquired intangible assets	3,649,000	741,000	13,377,000	741,000
Change in fair value of contingent consideration	1,170,000	(271,000)	1,100,000	13,960,000
Total operating expense	74,081,000	100,394,000	348,509,000	290,128,000
Operating loss	(64,077,000)	(82,492,000)	(321,285,000)	(246,919,000)
Loss on extinguishment of debt	0	0	0	(2,033,000)
Interest expense	(3,538,000)	(3,588,000)	(10,655,000)	(10,772,000)
Other income, net	6,890,000	8,505,000	19,718,000	24,301,000
Loss before benefit from income taxes	(60,725,000)	(77,575,000)	(312,222,000)	(235,423,000)
Benefit from income taxes	0	(10,706,000)	0	(10,706,000)
Net loss	(60,725,000)	(66,869,000)	(312,222,000)	(224,717,000)
Other comprehensive income:
Unrealized gain on investments	2,076,000	846,000	1,334,000	2,925,000
Comprehensive loss	$ (58,649,000)	$ (66,023,000)	$ (310,888,000)	$ (221,792,000)
Net loss per share:
Basic (in dollars per share)	$ (0.22)	$ (0.26)	$ (1.15)	$ (0.90)
Diluted (in dollars per share)	$ (0.22)	$ (0.26)	$ (1.15)	$ (0.90)
Weighted average shares outstanding used in calculating net loss per share:
Basic (in shares)	272,915	255,001	271,631	249,082
Diluted (in shares)	272,915	255,001	271,631	249,082
Product revenue
Revenue:
Total revenue	$ 35,296,000	$ 51,562,000	$ 102,051,000	$ 129,871,000
Cost of Revenue:
Cost of revenue	23,278,000	33,551,000	68,808,000	87,147,000
Service and other revenue
Revenue:
Total revenue	4,671,000	4,129,000	12,739,000	12,293,000
Cost of Revenue:
Cost of revenue	$ 3,484,000	$ 4,054,000	$ 10,588,000	$ 11,258,000

RESTRUCTURING - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023
Restructuring Cost and Reserve [Line Items]
Worker Adjustment and Retraining Notification (WARN) Act and other employee benefits	$ 5,500
Severance costs	4,500
Inventory provision			$ 3,715	$ 4,691
Decrease in operating lease liability			9,252	$ 6,396
San Diego Office
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation	5,100		8,100
Inventory provision			3,600
Decrease in operating lease liability		$ 4,400
Operating lease, liability	$ 3,400		$ 3,400

- 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

FINANCIAL INSTRUMENTS - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Assets
Cash and cash equivalents	$ 77,982	$ 179,911
Short-term restricted cash	690	300
Long-term restricted cash	1,532	2,422
Total assets measured at fair value	473,369	634,138
Liabilities
Contingent consideration	20,650	19,550
Total liabilities measured at fair value	20,650	19,550
Investments:
Assets
Investments:	393,165	451,505
Commercial paper
Assets
Investments:	0	9,947
Corporate debt securities
Assets
Investments:	68,178	88,579
U.S. government & agency securities
Assets
Investments:	324,987	352,979
Level 1
Assets
Cash and cash equivalents	58,703	70,172
Short-term restricted cash	690	300
Long-term restricted cash	1,532	2,422
Total assets measured at fair value	60,925	72,894
Liabilities
Contingent consideration	0	0
Total liabilities measured at fair value	0	0
Level 1 \| Investments:
Assets
Investments:	0	0
Level 1 \| Commercial paper
Assets
Investments:	0	0
Level 1 \| Corporate debt securities
Assets
Investments:	0	0
Level 1 \| U.S. government & agency securities
Assets
Investments:	0	0
Level 2
Assets
Cash and cash equivalents	19,279	109,739
Short-term restricted cash	0	0
Long-term restricted cash	0	0
Total assets measured at fair value	412,444	561,244
Liabilities
Contingent consideration	0	0
Total liabilities measured at fair value	0	0
Level 2 \| Investments:
Assets
Investments:	393,165	451,505
Level 2 \| Commercial paper
Assets
Investments:	0	9,947
Level 2 \| Corporate debt securities
Assets
Investments:	68,178	88,579
Level 2 \| U.S. government & agency securities
Assets
Investments:	324,987	352,979
Level 3
Assets
Cash and cash equivalents	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	20,650	19,550
Total liabilities measured at fair value	20,650	19,550
Level 3 \| Investments:
Assets
Investments:	0	0
Level 3 \| Commercial paper
Assets
Investments:	0	0
Level 3 \| Corporate debt securities
Assets
Investments:	0	0
Level 3 \| U.S. government & agency securities
Assets
Investments:	$ 0	$ 0

BALANCE SHEET COMPONENTS - Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Components [Abstract]
Purchased materials	$ 30,697	$ 20,168
Work in process	18,292	23,436
Finished goods	16,748	13,072
Inventory, net	$ 65,737	$ 56,676

STOCKHOLDERS’ EQUITY - Narrative (Details) - shares		3 Months Ended			9 Months Ended
STOCKHOLDERS’ EQUITY - Narrative (Details) - shares	Jun. 18, 2024	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Dividend yield		0.00%		0.00%	0.00%	0.00%
2020 Plan, Inducement Plan, And The Omniome Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Additional common stock reserved for issuance (in shares)	20,000,000
Common stock remain available for issuance (in shares)		26,100,000			26,100,000
ESPP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Additional common stock reserved for issuance (in shares)			4,000,000
Common stock remain available for issuance (in shares)		14,300,000			14,300,000
Shares issued (in shares)					1,906,529	1,735,058
Dividend yield					0.00%	0.00%
Time Based Restricted Stock Units PSU
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Amount eligible to vest upon achievement of goal		200.00%			200.00%

- 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

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Oct. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		273,863,544
Entity Central Index Key	0001299130
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation Our unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or U.S. GAAP, as set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC. The unaudited condensed consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. Certain information and footnote disclosures typically included in our audited financial statements have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements have been prepared on a consistent basis with the December 31, 2023 audited consolidated financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state our financial position, results of operations, comprehensive loss, and cash flows for the period, but are not necessarily indicative of the results to be expected for the entire year or any future periods. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform to 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 those relating to the valuation of inventory, fair value of contingent consideration, valuation of acquired intangible assets, useful lives assigned to finite-lived assets, asset impairment assessments, computation of provisions for income taxes, and valuations related to our convertible senior notes. While the extent of the potential impact of current macroeconomic conditions on our business is highly uncertain, we considered information available related to assumptions and estimates used to determine the results reported and asset valuations as of September 30, 2024. Actual results could differ materially from these estimates.
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.
Investments	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 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 (expense), 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 (expense), net. We have the ability to hold, and do not intend to sell investments in unrealized loss positions before the recovery of their amortized cost bases. Our investment portfolio at any point in time contains investments in cash deposits, money market funds, commercial paper, corporate debt securities and U.S. 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	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.
Recent Accounting Pronouncements	Recent Accounting Pronouncements 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 impact 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. Assets and Liabilities Measured at Fair Value on a Recurring Basis

REVENUE

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Americas	$	20,107	$	28,978	$	58,542	$	71,480
Europe, Middle East and Africa	9,119		10,994		24,497		29,594
Asia-Pacific	10,741		15,719		31,751		41,090
Total	$	39,967	$	55,691	$	114,790	$	142,164

A summary of our revenue by category is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Instrument revenue	$	16,788	$	34,694	$	50,491	$	85,317
Consumable revenue	18,508		16,868		51,560		44,554
Product revenue	35,296		51,562		102,051		129,871
Service and other revenue	4,671		4,129		12,739		12,293
Total revenue	$	39,967	$	55,691	$	114,790	$	142,164

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: 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://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

BALANCE SHEET COMPONENTS (Tables)

9 Months Ended

Sep. 30, 2024

Balance Sheet Components [Abstract]

Schedule of Inventory

Our inventory, net, consisted of the following components:


(in thousands)	September 30, 2024		December 31, 2023
Purchased materials	$	30,697	$	20,168
Work in process	18,292		23,436
Finished goods	16,748		13,072
Inventory, net	$	65,737	$	56,676

Schedule of Goodwill

Changes to goodwill during the nine months ended September 30, 2024 were as follows:


(in thousands)
Balance as of December 31, 2023	$	462,261
Impairment	(93,200)
Balance as of September 30, 2024	$	369,061

Schedule of Definite-Lived Intangible Assets From Business Acquisitions

In addition to IPR&D, finite-lived intangible assets included the following:


		As of September 30, 2024						As of December 31, 2023
(in thousands, except years)	Estimated Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	15	$	411,179	$	(29,753)	$	381,426	$	411,179	$	(9,195)	$	401,984
Customer relationships	2	360		(360)		—		360		(360)		—
Total		$	411,539	$	(30,113)	$	381,426	$	411,539	$	(9,555)	$	401,984

Schedule of Estimated Future Amortization Expense of Acquisition-Related Intangible Assets with Definite Lives

The estimated future amortization expense of intangible assets with definite lives is as follows:


(in thousands)
Remainder of 2024	$	6,853
2025	27,412
2026	27,412
2027	27,412
2028	27,412
2029 and thereafter	264,925
Total	$	381,426

Schedule of Changes in Reserve for Product Warranties

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Balance at beginning of period	$	3,462	$	2,862	$	4,681	$	1,651
Additions charged to cost of product revenue	1,414		2,825		4,787		5,675
Repairs and replacements	(1,610)		(1,722)		(6,202)		(3,361)
Balance at end of period	$	3,266	$	3,965	$	3,266	$	3,965

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482573/350-20-50-2

+ Details

NET LOSS PER SHARE - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net loss	$ (60,725)	$ (66,869)	$ (312,222)	$ (224,717)
Basic
Weighted average shares used in computing basic net loss per share (in shares)	272,915	255,001	271,631	249,082
Basic net loss per share (in dollars per share)	$ (0.22)	$ (0.26)	$ (1.15)	$ (0.90)
Diluted
Weighted average shares used in computing diluted net loss per share (in shares)	272,915	255,001	271,631	249,082
Diluted net loss per share (in dollars per share)	$ (0.22)	$ (0.26)	$ (1.15)	$ (0.90)

- Definition

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

+ References

+ Details

- Definition

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.

+ References

+ Details

- 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	9 Months Ended
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES 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 (SBBTM) short-read sequencing 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 with the most complete and accurate view of genomes, transcriptomes, and epigenomes. Our customers include academic and governmental research institutions, commercial testing and service laboratories, genome centers, public health labs, hospitals and clinical research institutes, contract research organizations (CROs), pharmaceutical companies, and agricultural companies. 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 unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or U.S. GAAP, as set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC. The unaudited condensed consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. Certain information and footnote disclosures typically included in our audited financial statements have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements have been prepared on a consistent basis with the December 31, 2023 audited consolidated financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state our financial position, results of operations, comprehensive loss, and cash flows for the period, but are not necessarily indicative of the results to be expected for the entire year or any future periods. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform to current period presentation. The financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2023. 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 those relating to the valuation of inventory, fair value of contingent consideration, valuation of acquired intangible assets, useful lives assigned to finite-lived assets, asset impairment assessments, computation of provisions for income taxes, and valuations related to our convertible senior notes. While the extent of the potential impact of current macroeconomic conditions on our business is highly uncertain, we considered information available related to assumptions and estimates used to determine the results reported and asset valuations as of September 30, 2024. Actual results could differ materially from these estimates. 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 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 (expense), 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 (expense), net. We have the ability to hold, and do not intend to sell investments in unrealized loss positions before the recovery of their amortized cost bases. Our investment portfolio at any point in time contains investments in cash deposits, money market funds, commercial paper, corporate debt securities and U.S. 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 For the three months ended September 30, 2024, one customer accounted for 10% of total revenue during the period. For the three months ended September 30, 2023, no customer accounted for 10% or more of total revenue during the period. For the nine months ended September 30, 2024 and 2023, no customer accounted for 10% or more of total revenue during the respective periods. As of September 30, 2024, 37% of our accounts receivable were from domestic customers, compared to 49% as of December 31, 2023. As of September 30, 2024, no customer represented 10% or more of our net accounts receivable, while one customer represented 10% of our net accounts receivable as of December 31, 2023. Recent Accounting Pronouncements 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 impact upon adoption. Significant Accounting Policies There have been no changes to our significant accounting policies as disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Additional liability associated with indemnification obligations	$ 0	$ 0

NET LOSS PER SHARE - Schedule of Antidilutive Shares Excluded From Computation of Diluted Net Loss per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
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 (in shares)	31,063	31,063	31,063	31,063
Equity Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)	36,496	28,100	36,496	28,100

CONVERTIBLE SENIOR NOTES - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
2030 Convertible Senior Notes
Debt Instrument [Line Items]
Contractual interest expense	$ 1,516	$ 1,516	$ 4,565	$ 1,516
Amortization of debt issuance costs	237	229	712	229
Total interest expense	1,753	1,745	5,277	1,745
2028 Convertible Senior Notes
Debt Instrument [Line Items]
Contractual interest expense	1,721	1,721	5,163	8,415
Amortization of debt issuance costs	81	80	243	392
Total interest expense	$ 1,802	$ 1,801	$ 5,406	$ 8,807

- 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

FINANCIAL INSTRUMENTS - Schedule of Contractual Maturities of Cash Equivalents and Available-for-Sale Investments (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Investments, All Other Investments [Abstract]
Due in one year or less	$ 321,789
Due after one year through five years	90,655
Total	$ 412,444

FINANCIAL INSTRUMENTS - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
FINANCIAL INSTRUMENTS - Narrative (Details) $ in Millions	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Business Acquisition [Line Items]
Business acquisition, anniversary	5 years		5 years
Investment income, net	$ 6.0	$ 9.2	$ 19.8	$ 25.0
Minimum \| Measurement Input, Risk Free Interest Rate \| Valuation, Income Approach
Business Acquisition [Line Items]
Discount rates	0.067		0.067
Maximum \| Measurement Input, Risk Free Interest Rate \| Valuation, Income Approach
Business Acquisition [Line Items]
Discount rates	0.071		0.071

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 77,982	$ 179,911
Investments	393,165	451,505
Accounts receivable, net	29,383	36,615
Inventory, net	65,737	56,676
Prepaid expenses and other current assets	17,277	17,040
Short-term restricted cash	690	300
Total current assets	584,234	742,047
Property and equipment, net	31,952	36,432
Operating lease right-of-use assets, net	17,344	32,593
Long-term restricted cash	1,532	2,422
Intangible assets, net	436,426	456,984
Goodwill	369,061	462,261
Other long-term assets	9,503	13,274
Total assets	1,450,052	1,746,013
Current liabilities
Accounts payable	12,064	15,062
Accrued expenses	19,183	45,708
Deferred revenue, current	17,292	16,342
Operating lease liabilities, current	10,675	9,591
Other liabilities, current	783	8,326
Total current liabilities	59,997	95,029
Deferred revenue, non-current	5,455	5,530
Contingent consideration liability, non-current	20,650	19,550
Operating lease liabilities, non-current	16,933	31,606
Convertible senior notes, net, non-current	893,144	892,243
Other liabilities, non-current	751	751
Total liabilities	996,930	1,044,709
Commitments and contingencies
Stockholders’ equity
Preferred stock	0	0
Common stock	274	268
Additional paid-in capital	2,602,592	2,539,892
Accumulated other comprehensive income	1,553	219
Accumulated deficit	(2,151,297)	(1,839,075)
Total stockholders’ equity	453,122	701,304
Total liabilities and stockholders’ equity	$ 1,450,052	$ 1,746,013

CONVERTIBLE SENIOR NOTES - Narrative (Details) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 07, 2024 USD ($) $ / shares shares	Jun. 30, 2023 USD ($) $ / shares	Feb. 16, 2021 USD ($) $ / shares	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt				$ 0	$ 0	$ 0	$ 2,033
2028 Convertible Senior Notes
Debt Instrument [Line Items]
Debt issuance costs		$ 1,500
Aggregate outstanding balance				457,870		457,870		$ 457,626
Principal amount				459,000		459,000		459,000
2028 Convertible Senior Notes \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, stated interest rate			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				399,100		399,100
Principal amount		459,000
2028 Convertible Senior Notes \| Convertible Debt \| Subsequent Event
Debt Instrument [Line Items]
Principal amount	$ 459,000
Beneficial conversion feature	$ 50,000
2028 Convertible Senior Notes \| Convertible Debt \| Minimum
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days			181 days
2028 Convertible Senior Notes \| Convertible Debt \| Maximum
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days			360 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				435,274		435,274		434,617
Principal amount				441,000		441,000		441,000
2030 Convertible Senior Notes \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, stated interest rate		1.375%
Principal amount of notes		$ 441,000
Debt instrument, convertible, conversion ratio		0.0465116
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				$ 347,100		$ 347,100
2030 Convertible Senior Notes \| Convertible Debt \| Minimum
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days		181 days
2030 Convertible Senior Notes \| Convertible Debt \| Maximum
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days		360 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]
Principal amount of notes		$ 441,000
Paid accrued but unpaid interest		$ 2,500
2029 Convertible Senior Notes \| Convertible Debt \| Subsequent Event
Debt Instrument [Line Items]
Debt instrument, stated interest rate	1.50%
Principal amount of notes	$ 200,000
Debt instrument, convertible, conversion ratio	0.2045157
Conversion price per share (in dollars per share) \| $ / shares	$ 4.89
Redemption price, percentage	100.00%
Debt instrument, debt default, calendar days	360 days
Debt conversion, shares issued (in shares) \| shares	20,451,570
2029 Convertible Senior Notes \| Debt Conversion Terms One \| Convertible Debt \| Subsequent Event
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days	180 days
Debt instrument, interest in the event of default	0.25%
2029 Convertible Senior Notes \| Debt Conversion Terms Two \| Convertible Debt \| Subsequent Event
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days	361 days
Additional interest in the event of default	0.50%
2029 Convertible Senior Notes \| Debt Conversion Terms Two \| Convertible Debt \| Minimum \| Subsequent Event
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days	181 days
2029 Convertible Senior Notes \| Debt Conversion Terms Two \| Convertible Debt \| Maximum \| Subsequent Event
Debt Instrument [Line Items]
Debt instrument, debt default, calendar days	360 days

BALANCE SHEET COMPONENTS - Narrative (Details) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Aug. 02, 2023	Apr. 30, 2020
Balance Sheet Components [Line Items]
Goodwill impairment	$ 0		$ 0	$ 0	$ 93,200,000	$ 0
Goodwill impairment, discount rate		12.00%
Increase in basis point discount rate		0.0100
Additional goodwill impairment		$ 85,000,000
Deferred revenue	22,800,000				22,800,000
Deferred revenue, current	17,292,000				17,292,000		$ 16,342,000
Revenue recognized	4,800,000				10,200,000
Deferred revenue, non-current	5,455,000				$ 5,455,000		$ 5,530,000
Standard product warranty, period					1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Balance Sheet Components [Line Items]
Remaining performance obligation	$ 5,500,000				$ 5,500,000
Remaining performance obligation period	5 years				5 years
Term Loans
Balance Sheet Components [Line Items]
Amounts outstanding	$ 0				$ 0
Apton
Balance Sheet Components [Line Items]
In-process research and development								$ 55,000,000
Apton \| In Process Research and Development
Balance Sheet Components [Line Items]
Impairment of intangible assets	$ 0
Omniome, Inc
Balance Sheet Components [Line Items]
Short term debt acquired									$ 1,300,000
Long-term debt acquired									$ 3,000,000.0

RESTRUCTURING - Schedule of Pre-Tax Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2024
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 12,372
San Diego Office
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 6,701
Cumulative amount incurred to date	24,729
Restructuring Charges, Excluding Adjustments	6,900
Sales, general and administrative \| San Diego Office
Restructuring Cost and Reserve [Line Items]
Cumulative amount incurred to date	14,400
Research and development \| San Diego Office
Restructuring Cost and Reserve [Line Items]
Cumulative amount incurred to date	5,900
Cost of revenue \| San Diego Office
Restructuring Cost and Reserve [Line Items]
Cumulative amount incurred to date	4,400
Employee separation costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		10,051
Employee separation costs \| San Diego Office
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0
Cumulative amount incurred to date	10,051
Other costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 2,321
Other costs \| San Diego Office
Restructuring Cost and Reserve [Line Items]
Restructuring charges	6,701
Cumulative amount incurred to date	$ 14,678

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES The Company has entered into various operating lease agreements, primarily relating to our corporate offices. See Note 8 – Commitments and Contingencies, subsection titled “Leases”, in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2023 for information regarding the Company’s maturity of lease liabilities under its lease agreements. 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 II, Item 1 of this Quarterly Report on Form 10-Q. 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 September 30, 2024 and December 31, 2023.

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 720
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483359/720-20-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 5.Y.Q4)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480102/450-20-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 5.Y.Q2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480102/450-20-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483049/450-30-50-1

+ Details

STOCKHOLDERS’ EQUITY - Schedule of Time-Based RSUs Activity (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Restricted Stock Units (RSU)
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding, beginning (in shares) \| shares	11,308
Granted (in shares) \| shares	12,604
Vested (in shares) \| shares	(3,647)
Forfeited (in shares) \| shares	(4,523)
Outstanding, ending (in shares) \| shares	15,742
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	$ 12.06
Weighted average grant date fair value per share (in dollars per share) \| $ / shares	5.04
Vested (in dollars per share) \| $ / shares	12.33
Forfeited (in dollars per share) \| $ / shares	8.33
Ending, outstanding (in dollars per share) \| $ / shares	$ 7.45
Performance Stock Units (PSU)
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding, beginning (in shares) \| shares	541
Granted (in shares) \| shares	0
Vested (in shares) \| shares	0
Forfeited (in shares) \| shares	(39)
Outstanding, ending (in shares) \| shares	502
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	$ 9.43
Weighted average grant date fair value per share (in dollars per share) \| $ / shares	0
Vested (in dollars per share) \| $ / shares	0
Forfeited (in dollars per share) \| $ / shares	9.43
Ending, outstanding (in dollars per share) \| $ / shares	$ 9.43

REVENUE - Schedule of Revenue by Geographic Location (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 39,967	$ 55,691	$ 114,790	$ 142,164
Americas
Disaggregation of Revenue [Line Items]
Total revenue	20,107	28,978	58,542	71,480
Europe, Middle East and Africa
Disaggregation of Revenue [Line Items]
Total revenue	9,119	10,994	24,497	29,594
Asia-Pacific
Disaggregation of Revenue [Line Items]
Total revenue	$ 10,741	$ 15,719	$ 31,751	$ 41,090

- 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

- Definition

+ References

+ Details

STOCKHOLDERS’ EQUITY (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

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


(shares in thousands)	Number of shares	Weighted average exercise price
Outstanding at December 31, 2023	13,011	$	10.63
Granted	493	1.99
Exercised	(515)	3.15
Canceled	(1,474)	9.35
Expired	(287)	5.70
Outstanding at September 30, 2024	11,228	$	10.88

Schedule of Time-Based RSUs Activity

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


	Restricted Stock Units (RSU)	Performance Stock Units (PSU)	Weighted average grant date fair value
(shares in thousands)			RSU		PSU
Outstanding at December 31, 2023	11,308	541	$	12.06	$	9.43
Granted	12,604	—	5.04		—
Vested	(3,647)	—	12.33		—
Forfeited	(4,523)	(39)	8.33		9.43
Outstanding at September 30, 2024	15,742	502	$	7.45	$	9.43

Schedule of Stock-Based Compensation Expense

The following table summarizes share-based compensation expense:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	1,229	$	1,125	$	4,466	$	4,251
Research and development	4,740		6,182		15,119		18,310
Sales, general and administrative	12,290		12,384		35,418		32,973
Total share-based compensation expense	$	18,259	$	19,691	$	55,003	$	55,534

Schedule of Fair Value of Employee Stock Options

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


	Nine Months Ended September 30,
		2024	2023
Expected term in years		4.9	4.9
Expected volatility		81% - 93%	78%
Risk-free interest rate		3.48% - 4.32%	3.73% - 4.21%
Dividend yield		—	—
Weighted average grant date fair value per share		$1.40	$7.89

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:


	Nine Months Ended September 30,
		2024	2023
Expected term in years		0.5 — 2.0	0.5 — 2.0
Expected volatility		81% — 118%	79% - 97%
Risk-free interest rate		3.88% — 5.27%	4.87% — 5.47%
Dividend yield		—	—
Weighted average grant date fair value per share		$1.53	$5.34

BALANCE SHEET COMPONENTS - Schedule of Goodwill (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Goodwill [Roll Forward]
Balance as of December 31, 2023		$ 462,261,000		$ 462,261,000
Impairment	$ 0	$ 0	$ 0	(93,200,000)	$ 0
Balance as of September 30, 2024	$ 369,061,000			$ 369,061,000

- Definition

+ References

+ Details

BALANCE SHEET COMPONENTS - Schedule of Definite-Lived Intangible Assets From Business Acquisitions (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 411,539	$ 411,539
Accumulated Amortization	(30,113)	(9,555)
Total	$ 381,426	401,984
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (in years)	15 years
Gross Carrying Amount	$ 411,179	411,179
Accumulated Amortization	(29,753)	(9,195)
Total	$ 381,426	401,984
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (in years)	2 years
Gross Carrying Amount	$ 360	360
Accumulated Amortization	(360)	(360)
Total	$ 0	$ 0

- 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

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [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 an 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 five-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 Condensed 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.

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, 2023, 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	$	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

We have finalized the purchase price allocation for the Apton acquisition. There were no material adjustments from those amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

We incurred costs related to the Apton acquisition of approximately $9.0 million during the year ended December 31, 2023. 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, which is primarily attributable to the synergies expected to occur from the integration of Apton and is not deductible for income tax purposes. We 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 growth, discount rate and obsolescence factors.

RESTRUCTURING (Tables)

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Schedule of Pre-Tax Restructuring Charges

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


(in thousands)	Three Months Ended September 30, 2024		Cumulative amount incurred to date
Employee separation costs	$	—	$	10,051
Other costs	6,701		14,678
Total restructuring charges(1)	$	6,701	$	24,729

(1) For the three months ended September 30, 2024, $6.9 million was recorded in sales, general and administrative expense.

Cumulative charges incurred to date include $14.4 million in sales, general and administrative expense; $5.9 million in research and development expense; and $4.4 million in cost of revenue.

Schedule of Restructuring Reserve by Type of Cost

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


(in thousands)	Employee Separation Costs		Other Costs		Total
Expense recorded in YTD 2024	$	10,051	$	2,321	$	12,372
Cash paid during YTD 2024	(10,008)		(2,049)		(12,057)
Amount recorded in current liabilities as of September 30, 2024	$	43	$	272	$	315

Estimated total restructuring costs to still be incurred	$	—	$	2,074	$	2,074

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
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

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - Customer Concentration Risk	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer Benchmark \| Customer One
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	10.00%
Accounts Receivable \| Domestic Customers
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		37.00%	49.00%
Accounts Receivable \| Customer One
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage			10.00%

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2022		226,505
Beginning balance at Dec. 31, 2022	$ 562,904	$ 227	$ 2,099,782	$ (4,765)	$ (1,532,340)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(224,717)				(224,717)
Other comprehensive income	2,925			2,925
Shares issuable following milestone achievement	84,761		84,761
Issuance of common stock in acquisition of Apton (in shares)		6,121
Issuance of common stock in acquisition of Apton	76,642	$ 6	76,636
Issuance of common stock in connection with liquidity event bonus plan (in shares)		169
Issuance of common stock in connection with liquidity event bonus plan	2,111		2,111
Issuance of common stock from Underwritten Public Equity Offering, net of issuance costs (in shares)		20,125
Issuance of common stock from Underwritten Public Equity Offering, net of issuance costs	189,200	$ 20	189,180
Issuance of common stock in conjunction with equity plans (in shares)		5,454
Issuance of common stock in conjunction with equity plans	14,383	$ 5	14,378
Share-based compensation expense	55,534		55,534
Ending balance (in shares) at Sep. 30, 2023		258,374
Ending balance at Sep. 30, 2023	763,743	$ 258	2,522,382	(1,840)	(1,757,057)
Beginning balance (in shares) at Dec. 31, 2022		226,505
Beginning balance at Dec. 31, 2022	$ 562,904	$ 227	2,099,782	(4,765)	(1,532,340)
Ending balance (in shares) at Dec. 31, 2023	267,744	267,744
Ending balance at Dec. 31, 2023	$ 701,304	$ 268	2,539,892	219	(1,839,075)
Beginning balance (in shares) at Jun. 30, 2023		250,473
Beginning balance at Jun. 30, 2023	641,999	$ 250	2,334,623	(2,686)	(1,690,188)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(66,869)				(66,869)
Other comprehensive income	846			846
Shares issuable following milestone achievement	84,761		84,761
Issuance of common stock in acquisition of Apton (in shares)		6,121
Issuance of common stock in acquisition of Apton	76,642	$ 6	76,636
Issuance of common stock in connection with liquidity event bonus plan (in shares)		169
Issuance of common stock in connection with liquidity event bonus plan	2,111		2,111
Issuance of common stock in conjunction with equity plans (in shares)		1,611
Issuance of common stock in conjunction with equity plans	4,562	$ 2	4,560
Share-based compensation expense	19,691		19,691
Ending balance (in shares) at Sep. 30, 2023		258,374
Ending balance at Sep. 30, 2023	$ 763,743	$ 258	2,522,382	(1,840)	(1,757,057)
Beginning balance (in shares) at Dec. 31, 2023	267,744	267,744
Beginning balance at Dec. 31, 2023	$ 701,304	$ 268	2,539,892	219	(1,839,075)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(312,222)				(312,222)
Other comprehensive income	1,334			1,334
Issuance of common stock in conjunction with equity plans (in shares)		6,068
Issuance of common stock in conjunction with equity plans	7,703	$ 6	7,697
Share-based compensation expense	$ 55,003		55,003
Ending balance (in shares) at Sep. 30, 2024	273,812	273,812
Ending balance at Sep. 30, 2024	$ 453,122	$ 274	2,602,592	1,553	(2,151,297)
Beginning balance (in shares) at Jun. 30, 2024		272,491
Beginning balance at Jun. 30, 2024	492,700	$ 272	2,583,523	(523)	(2,090,572)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(60,725)				(60,725)
Other comprehensive income	2,076			2,076
Issuance of common stock in conjunction with equity plans (in shares)		1,321
Issuance of common stock in conjunction with equity plans	812	$ 2	810
Share-based compensation expense	$ 18,259		18,259
Ending balance (in shares) at Sep. 30, 2024	273,812	273,812
Ending balance at Sep. 30, 2024	$ 453,122	$ 274	$ 2,602,592	$ 1,553	$ (2,151,297)

BALANCE SHEET COMPONENTS

9 Months Ended

Sep. 30, 2024

Balance Sheet Components [Abstract]

BALANCE SHEET COMPONENTS

Inventory, net

Our inventory, net, consisted of the following components:


(in thousands)	September 30, 2024		December 31, 2023
Purchased materials	$	30,697	$	20,168
Work in process	18,292		23,436
Finished goods	16,748		13,072
Inventory, net	$	65,737	$	56,676

Goodwill and Intangible Assets

Goodwill

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 2024, as of the beginning of April 2024, noting no impairment. Based primarily on the sustained decrease in our stock price during the second quarter and overall market capitalization as of the end of the second quarter of 2024 as well as other factors, we concluded that there was an indicator that it was more likely than not that the fair value of the reporting unit was less than its carrying amount that required an interim impairment test be performed on goodwill. As a result of the interim impairment test performed as of June 30, 2024, we concluded that the carrying amount of the entity-level reporting unit exceeded fair value and recorded a $93.2 million goodwill impairment charge. The impairment charge is included in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2024.

The decline in the fair value of the reporting unit below its carrying value in the second quarter of 2024 resulted primarily from the decline in our stock price and changes in the timing of expected future cash flows as compared to our initial long-term plan due to continued impact of longer than expected median sales cycles resulting from various factors. We performed our impairment test using a combination of an income and a market approach to determine the fair value of goodwill. The income approach utilized estimated discounted cash flows, while the market approach utilized comparable company information. Significant assumptions used in the income approach included revenue growth expectations and a selected discount rate of 12.0%. The discount rate was based on the weighted average cost of capital, determined using market, industry data, and related risk factors. The assessment is a level 3 measurement due to its reliance on certain unobservable inputs and significant management judgment. The assumptions used were inherently subject to uncertainty and small changes in these assumptions could have had a significant impact on the concluded value. An increase of 100 basis points to the discount rate used in our assessment would have resulted in additional goodwill impairment of approximately $85 million. The assessed fair value was deemed reasonable based on a market capitalization reconciliation and a supportable control premium.

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

Changes to goodwill during the nine months ended September 30, 2024 were as follows:


(in thousands)
Balance as of December 31, 2023	$	462,261
Impairment	(93,200)
Balance as of September 30, 2024	$	369,061

Intangible Assets

Intangible assets include acquired IPR&D of $55.0 million as a result of the Apton acquisition in August 2023. The IPR&D will remain on our Consolidated Balance Sheet as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development activities. During the development period following the acquisition, IPR&D is not amortized, but instead is tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Upon completion of the development, we will amortize the asset over the life of the product or record an impairment charge if the asset is determined to be impaired. We performed our annual assessment of IPR&D in the third quarter of 2024 noting no impairment.

In addition to IPR&D, finite-lived intangible assets included the following:


		As of September 30, 2024						As of December 31, 2023
(in thousands, except years)	Estimated Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	15	$	411,179	$	(29,753)	$	381,426	$	411,179	$	(9,195)	$	401,984
Customer relationships	2	360		(360)		—		360		(360)		—
Total		$	411,539	$	(30,113)	$	381,426	$	411,539	$	(9,555)	$	401,984

The estimated future amortization expense of intangible assets with definite lives is as follows:


(in thousands)
Remainder of 2024	$	6,853
2025	27,412
2026	27,412
2027	27,412
2028	27,412
2029 and thereafter	264,925
Total	$	381,426

Amortization of acquired 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 finite-lived intangible assets are amortized using the straight-line method over their estimated useful lives.

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

Deferred Revenue

As of September 30, 2024, we had a total of $22.8 million of deferred revenue, $17.3 million of which was recorded as deferred revenue, current, and $5.5 million of which was recorded as deferred revenue, non-current, which primarily relates to deferred service contract revenues and is scheduled to be recognized in the next five years. Revenue recorded in the three and nine months ended September 30, 2024 includes $4.8 million and $10.2 million, respectively, that was included in deferred revenue as of December 31, 2023.

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. Warranties are recorded as part of accrued expenses on the Condensed Consolidated Balance Sheets and warranty expense is recorded as a component of cost of product revenue in the Condensed Consolidated Statements of Operations and Comprehensive Loss. There were no material changes in estimates for the periods presented below.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Balance at beginning of period	$	3,462	$	2,862	$	4,681	$	1,651
Additions charged to cost of product revenue	1,414		2,825		4,787		5,675
Repairs and replacements	(1,610)		(1,722)		(6,202)		(3,361)
Balance at end of period	$	3,266	$	3,965	$	3,266	$	3,965

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. As of September 30, 2024, no amounts were outstanding on the term loans. Interest expense was not material for the three and nine months ended September 30, 2024, and was included as part of interest expense in the Condensed Consolidated Statement of Operations and Comprehensive Loss.

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS 2028 Convertible Senior Notes Exchange On November 7, 2024, we entered into an exchange agreement with SBN, pursuant to which we have agreed to exchange the remaining approximately $459.0 million in aggregate principal amount of 2028 Notes outstanding for $200.0 million aggregate principal amount of notes due August 15, 2029 (the “2029 Notes”) as well as the issuance of 20,451,570 shares of common stock (the “Exchange Shares”) and $50.0 million of cash. The exchange and issuances are expected to close on or about November 21, 2024 (the “Closing Date”). The 2029 Notes, the Exchange Shares, and shares of common stock issuable upon conversion of the 2029 Notes are subject to certain lock-up restrictions for a six-month period (the “Lock-Up Period”) beginning on the Closing Date of the Exchange Transaction; the lock-up restrictions will terminate immediately prior to the consummation of any change in control of the Company. Upon any conversion of the 2029 Notes, SBN will not be entitled to be issued a number of shares of the Company’s common stock which would cause SBN's beneficial ownership of common stock to exceed either 9.9% of the total number of issued and outstanding shares of common stock or 9.9% of the combined voting power of all of the securities of the Company, in each case, following such conversion. The 2029 Notes will be governed by an indenture (the “2029 Indenture”) between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2029 Notes will bear interest at a rate of 1.50% per annum. Interest on the 2029 Notes will be payable semi-annually in arrears on February 15 and August 15 and will commence on the Closing Date. The 2029 Notes will mature on August 15, 2029, subject to earlier conversion, redemption or repurchase. The 2029 Notes will be convertible at the option of the holder at any time from the expiration of the Lock-Up Period until the second scheduled trading day prior to the maturity date, including in connection with a redemption by the Company. The 2029 Notes will be convertible into shares of our common stock based on an initial conversion rate of 204.5157 shares of common stock per $1,000 principal amount of the 2029 Notes (which is equal to an initial conversion price of $4.89 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 2029 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 August 20, 2027, the 2029 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 2029 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date. Upon the occurrence of a Fundamental Change (as defined in the 2029 Indenture), the holders of the 2029 Notes may require that we repurchase all or part of the principal amount of the 2029 Notes at a purchase price of par plus unpaid interest up to, but excluding, the maturity date. The 2029 Notes will be subject to certain debt and lien covenants as well as springing guarantees, in each case, the terms of which will to be set forth in a second letter agreement between the Company and SBN to be entered into in connection with the Indenture. The 2029 Indenture will include customary “events of default,” which may result in the acceleration of the maturity of the 2029 Notes under the 2029 Indenture. The 2029 Indenture will also include 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 will, 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 2029 Notes at a rate equal to (i) 0.25% per annum of the principal amount of the 2029 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 2029 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 2029 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 2029 Notes will be subject to acceleration as will be provided for in the 2029 Indenture.

CONVERTIBLE SENIOR NOTES

9 Months Ended

Sep. 30, 2024

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 Condensed Consolidated Balance Sheets. The debt issuance costs are amortized to interest expense using the effective interest method over the term of the 2030 Notes, resulting in an effective interest rate of 1.6%. 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 Condensed Consolidated Balance Sheets as follows:


(in thousands)	September 30, 2024		December 31, 2023
Principal amount	$	441,000	$	441,000
Unamortized debt premium	471		524
Unamortized debt issuance costs	(6,197)		(6,907)
Net carrying amount	$	435,274	$	434,617

Interest expense for the 2030 Notes was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	1,516	$	1,516	$	4,565	$	1,516
Amortization of debt issuance costs	237		229		712		229
Total interest expense	$	1,753	$	1,745	$	5,277	$	1,745

As of September 30, 2024, the estimated fair value (Level 2) of the 2030 Notes was $347.1 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 (“SBN”), a subsidiary of SoftBank Group Corp., relating to the issuance and sale to SBN 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 such 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 costs and are presented as a reduction to the 2028 Notes on our Condensed Consolidated Balance Sheets. The debt issuance costs are amortized to interest expense using the effective interest method over the term of the 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 Condensed Consolidated Balance Sheets as follows:


(in thousands)	September 30, 2024		December 31, 2023
Principal amount	$	459,000	$	459,000
Unamortized debt issuance costs	(1,130)		(1,374)
Net carrying amount	$	457,870	$	457,626

Interest expense for the 2028 Notes was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	1,721	$	1,721	$	5,163	$	8,415
Amortization of debt issuance costs	81		80		243		392
Total interest expense	$	1,802	$	1,801	$	5,406	$	8,807

As of September 30, 2024, the estimated fair value (Level 2) of the 2028 Notes was $399.1 million. The fair value of the 2028 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.

As discussed below under Note 11. Subsequent Events, on November 7, 2024, we entered into an exchange agreement with SBN, pursuant to which we have agreed to exchange the remaining approximately $459.0 million in aggregate principal amount of 2028 Notes outstanding for $200.0 million aggregate principal amount of notes due August 15, 2029 as well as the issuance of 20,451,570 shares of common stock and $50.0 million of cash.

- 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
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Reference 2: 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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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

+ Details