Shares of Pacific Biosciences of California (PACB) are facing a steep pre-market plunge of 11.75% on Thursday, following the release of the company's mixed third-quarter 2025 financial results. The DNA sequencing technology firm's report, which came out after Wednesday's market close, revealed both improvements and ongoing challenges that have left investors concerned.

For Q3 2025, PacBio reported revenue of $38.4 million, marking a 3.8% decline from $40.0 million in the same quarter last year and falling short of analyst expectations of $40.21 million. However, the company's adjusted earnings per share came in at -$0.12, beating the analyst estimate of -$0.15. The GAAP net loss for the quarter was $38.0 million, or $0.13 per share.

Despite the revenue decline, PacBio showed improvements in other areas. The company's non-GAAP gross margin expanded to 42%, up from 33% in Q3 2024, reflecting better operational efficiency. Operating expenses were also reduced as part of the company's cost-cutting efforts. However, investors appear to be particularly concerned about the declining cash position, which fell to $298.7 million from $471.1 million a year ago. This significant drop in cash reserves, coupled with the ongoing revenue challenges, seems to be the primary driver behind the sharp pre-market sell-off. The mixed results and cash burn rate have likely intensified worries about the company's financial stability and growth prospects in the competitive DNA sequencing market.