Revenue growth of 31% driven by strong clinical
and biopharma volume and Guardant360 ASP tailwinds
Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology
company, today reported financial results for the quarter ended
March 31, 2024.
First Quarter 2024 Financial Highlights
- Revenue of $168.5 million for the first quarter of 2024, an
increase of 31% over the first quarter of 2023
- Reported 46,900 tests to clinical customers and 8,450 tests to
biopharmaceutical customers in the first quarter of 2024,
representing increases of 20% and 37%, respectively, over the first
quarter of 2023
- Reduced free cash flow to $(37.2) million in the first quarter
of 2024, compared to $(82.0) million in the prior year
- Raised 2024 annual guidance for revenue to a new range of $675
to $685 million, representing growth of 20% to 21%
- Improved annual free cash flow guidance to $(275) to $(285)
million, a reduction of $60 to $70 million compared to 2023
Recent Operating Highlights
- Validated the strength and quality of ECLIPSE clinical data
with the study publication in The New England Journal of
Medicine
- Launched new service at The Royal Marsden to test advanced
NSCLC patients in England through an expanded NHS study
- Presented new data demonstrating the value of epigenomic
analysis and methylation sequencing using the Smart Liquid Biopsy
platform at the 2024 AACR Annual Meeting
- Surpassed 500 peer-reviewed publications highlighting Guardant
Health technology in scientific literature
“We started the year off very strongly with first quarter
revenue growing 31%, driven by both solid volume growth and
significant improvements to Guardant360 reimbursement,” said Helmy
Eltoukhy, co-founder and co-CEO. “In addition to strong topline
performance, this was the first quarter of generating positive cash
flow in our Therapy Selection business. We also recently surpassed
a significant milestone with over 500 peer-reviewed publications
highlighting our technology in scientific literature, demonstrating
the impact our innovative suite of products have on both patients
and the scientific community.”
“The publication of ECLIPSE data in The New England Journal of
Medicine, one of the world’s leading medical journals, underscores
the quality of our clinical data,” said AmirAli Talasaz, co-founder
and co-CEO. “Our team has worked incredibly hard and is now
well-prepared for the upcoming FDA Advisory Committee review on May
23. We are eagerly anticipating the launch of Shield IVD shortly
after the expected FDA approval in 2024 and are confident this test
is well positioned for rapid adoption.”
First Quarter 2024 Financial Results
Revenue was $168.5 million for the first quarter of 2024, a 31%
increase from $128.7 million for the corresponding prior year
period. Precision oncology revenue grew 38%, to $156.2 million for
the first quarter of 2024, from $113.4 million for the
corresponding prior year period, driven by an increase in clinical
and biopharma testing volume, which grew 20% and 37%, respectively,
over the prior year period. The increase in precision oncology
revenue was also attributable to an increase in reimbursement for
our tests, due to an increase in the Medicare reimbursement rate
for our Guardant360 LDT test to $5,000, effective January 1, 2024,
and an increase in reimbursement received from commercial payers.
Development services and other revenue was $12.3 million for the
first quarter of 2024, compared to $15.3 million for the
corresponding prior year period.
Gross profit, or total revenue less cost of precision oncology
testing and cost of development services and other, was $103.2
million for the first quarter of 2024, an increase of $27.6 million
from $75.6 million for the corresponding prior year period. Gross
margin, or gross profit divided by total revenue, was 61%, as
compared to 59% for the corresponding prior year period. Precision
oncology gross margin was 62% in the first quarter of 2024, as
compared to 60% in the prior year period. Development services and
other gross margin was 51% in the first quarter of 2024, as
compared to 48% in the prior year period.
Non-GAAP gross profit was $105.3 million for the first quarter
of 2024, an increase of $27.6 million, from $77.7 million for the
corresponding prior year period. Non-GAAP gross margin was 63% for
the first quarter of 2024, as compared to 60% for the corresponding
prior year period.
Non-GAAP gross profit excluding screening was $108.0 million for
the first quarter of 2024, an increase of $26.9 million, from $81.1
million for the corresponding prior year period. Non-GAAP gross
margin excluding screening was 64% for the first quarter of 2024,
as compared to 63% for the corresponding prior year period.
Operating expenses were $202.9 million for the first quarter of
2024, as compared to $209.7 million for the corresponding prior
year period. Non-GAAP operating expenses were $176.5 million for
the first quarter of 2024, as compared to $188.3 million for the
corresponding prior year period.
Net loss was $115.0 million for the first quarter of 2024, as
compared to $133.5 million for the corresponding prior year period.
Net loss per share was $0.94 for the first quarter of 2024, as
compared to $1.30 for the corresponding prior year period. The
year-over-year decrease in net loss is primarily due to a $34.4
million year over year improvement in loss from operations, and a
$11.8 million increase in interest income, partially offset by a
$33.9 million increase in unrealized losses recorded for our
investment in Lunit, Inc.
Non-GAAP net loss was $56.4 million for the first quarter of
2024, as compared to $108.5 million for the corresponding prior
year period. Non-GAAP net loss per share was $0.46 for the first
quarter of 2024, as compared to $1.06 for the corresponding prior
year period.
Adjusted EBITDA loss was $61.1 million for the first quarter of
2024, as compared to a $101.0 million loss for the corresponding
prior year period.
Free cash flow for the first quarter of 2024 was $(37.2)
million, as compared to $(82.0) million for the corresponding prior
year period. Cash, cash equivalents, and restricted cash were $1.1
billion as of March 31, 2024.
2024 Guidance
Guardant Health now expects full year 2024 revenue excluding
screening to be in the range of $675 to $685 million, representing
growth of 20% to 21% compared to full year 2023 This compares to
the prior range of $655 to $670 million, representing growth of 16%
to 19%. Guardant Health now expects full year 2024 non-GAAP gross
margin excluding screening to be in the range of 61% to 63%,
compared to the prior range of 60% to 62%. Guardant Health now
expects total non-GAAP operating expenses to be in the range of
$720 to $730 million, representing a flat to 1% decrease compared
to 2023, an improvement compared to the prior range of $740 to $750
million. Guardant Health now expects free cash flow to be in the
range of $(275) to $(285) million in 2024, an improvement compared
to the prior range of $(320) to $(330) million.
Webcast Information
Guardant Health will host a conference call to discuss the first
quarter 2024 financial results after market close on Thursday, May
9, 2024 at 1:30 pm Pacific Time / 4:30 pm Eastern Time. A webcast
of the conference call can be accessed at
http://investors.guardanthealth.com. The webcast will be archived
and available for replay for at least 90 days after the event.
Non-GAAP Measures
Guardant Health has presented in this release certain financial
information in accordance with U.S. Generally Accepted Accounting
Principles (GAAP) and also on a non-GAAP basis, including non-GAAP
cost of precision oncology testing, non-GAAP cost of development
services and other, non-GAAP cost of screening, non-GAAP gross
profit, non-GAAP gross profit excluding cost of screening, non-GAAP
research and development expense, non-GAAP sales and marketing
expense, non-GAAP general and administrative expense, non-GAAP loss
from operations, non-GAAP net loss, non-GAAP net loss per share,
basic and diluted, adjusted EBITDA, and free cash flow.
We define our non-GAAP measures as the applicable GAAP measure
adjusted for the impacts of stock-based compensation and related
employer payroll tax payments, contingent consideration,
amortization of intangible assets, fair value adjustments on
marketable equity securities, impairment of non-marketable equity
securities and other related assets, and other non-recurring
items.
Adjusted EBITDA is defined as net loss adjusted for interest
income; interest expense; other income (expense), net; provision
for income taxes; depreciation and amortization expense;
stock-based compensation expense and related employer payroll tax
payments; contingent consideration; and other non-recurring items.
Free cash flow is defined as net cash used in operating activities
in the period less purchase of property and equipment in the
period.
We believe that the exclusion of certain income and expenses in
calculating these non-GAAP financial measures can provide a useful
measure for investors when comparing our period-to-period core
operating results, and when comparing those same results to that
published by our peers. We exclude certain items because we believe
that these income and expenses do not reflect expected future
operating performance. Additionally, certain items are inconsistent
in amounts and frequency, making it difficult to perform a
meaningful evaluation of our current or past operating performance.
We use these non-GAAP financial measures to evaluate ongoing
operations, for internal planning and forecasting purposes, and to
manage our business.
These non-GAAP financial measures are not intended to be
considered in isolation from, as substitute for, or as superior to,
the corresponding financial measures prepared in accordance with
GAAP. There are limitations inherent in non-GAAP financial measures
because they exclude charges and credits that are required to be
included in a GAAP presentation, and do not present the full
measure of our recorded costs against its revenue. In addition, our
definition of the non-GAAP financial measures may differ from
non-GAAP measures used by other companies.
About Guardant Health
Guardant Health is a leading precision medicine company focused
on guarding wellness and giving every person more time free from
cancer. Founded in 2012, Guardant is transforming patient care by
providing critical insights into what drives disease through its
advanced blood and tissue tests, real-world data and AI analytics.
Guardant tests help improve outcomes across all stages of care,
including screening to find cancer early, monitoring for recurrence
in early-stage cancer, and helping doctors select the best
treatment for patients with advanced cancer. For more information,
visit guardanthealth.com and follow the company on LinkedIn, X
(Twitter) and Facebook.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal securities laws, including statements
relating to Guardant Health’s future results, regulatory approval
for products or regarding the potential benefits and advantages of
Guardant Health’s platforms, assays and tests, which involve risks
and uncertainties that could cause Guardant Health’s actual results
to differ materially from the anticipated results and expectations
expressed in these forward-looking statements. These statements are
based on current expectations, forecasts and assumptions, and
actual outcomes and results could differ materially from these
statements due to a number of factors. These and additional risks
and uncertainties that could affect Guardant Health’s financial and
operating results and cause actual results to differ materially
from those indicated by the forward-looking statements made in this
press release include those discussed under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operation” and elsewhere in its Annual
Report on Form 10-K for the year ended December 31, 2023, and any
current and periodic reports filed with or furnished to the
Securities and Exchange Commission thereafter. The forward-looking
statements in this press release are based on information available
to Guardant Health as of the date hereof, and Guardant Health
disclaims any obligation to update any forward-looking statements
provided to reflect any change in its expectations or any change in
events, conditions, or circumstances on which any such statement is
based, except as required by law. These forward-looking statements
should not be relied upon as representing Guardant Health’s views
as of any date subsequent to the date of this press release.
Guardant Health, Inc.
Condensed Consolidated
Statements of Operations
(unaudited)
(in thousands, except per
share data)
Three Months Ended March
31,
2024
2023
Revenue:
Precision oncology testing
$
156,229
$
113,393
Development services and other
12,262
15,321
Total revenue
168,491
128,714
Costs and operating expenses:
Cost of precision oncology testing
59,306
45,106
Cost of development services and other
5,990
7,967
Research and development expense
83,802
93,128
Sales and marketing expense
80,425
76,123
General and administrative expense
38,651
40,445
Total costs and operating expenses
268,174
262,769
Loss from operations
(99,683
)
(134,055
)
Interest income
14,868
3,060
Interest expense
(645
)
(644
)
Other income (expense), net
(29,120
)
(1,654
)
Loss before provision for income taxes
(114,580
)
(133,293
)
Provision for income taxes
405
240
Net loss
$
(114,985
)
$
(133,533
)
Net loss per share, basic and diluted
$
(0.94
)
$
(1.30
)
Weighted-average shares used in computing
net loss per share, basic and diluted
121,712
102,663
Guardant Health, Inc.
Condensed Consolidated Balance
Sheets
(unaudited)
(in thousands, except share
and per share data)
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash, cash equivalents and restricted
cash
$
1,129,257
$
1,133,537
Short-term marketable debt securities
—
35,097
Accounts receivable, net
84,562
88,783
Inventory, net
62,991
61,948
Prepaid expenses and other current assets,
net
31,736
27,741
Total current assets
1,308,546
1,347,106
Property and equipment, net
138,387
145,096
Right-of-use assets, net
151,881
157,616
Intangible assets, net
8,294
8,979
Goodwill
3,290
3,290
Other assets, net
94,200
124,334
Total Assets
$
1,704,598
$
1,786,421
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
37,603
$
51,741
Accrued compensation
92,639
72,736
Accrued expenses
67,211
63,475
Deferred revenue
22,556
17,965
Total current liabilities
220,009
205,917
Convertible senior notes, net
1,140,611
1,139,966
Long-term operating lease liabilities
178,907
185,848
Other long-term liabilities
96,786
96,006
Total Liabilities
1,636,313
1,627,737
Stockholders’ equity:
Common stock, par value of $0.00001 per
share; 350,000,000 shares authorized as of March 31, 2024 and
December 31, 2023; 121,787,297 and 121,629,861 shares issued and
outstanding as of March 31, 2024 and December 31, 2023,
respectively
1
1
Additional paid-in capital
2,329,930
2,304,220
Accumulated other comprehensive loss
(4,799
)
(3,675
)
Accumulated deficit
(2,256,847
)
(2,141,862
)
Total Stockholders’ Equity
68,285
158,684
Total Liabilities and Stockholders’
Equity
$
1,704,598
$
1,786,421
Guardant Health, Inc.
Reconciliation of Selected
GAAP Measures to Non-GAAP Measures
(unaudited)
(in thousands, except per
share data)
Three Months Ended March
31,
2024
2023
GAAP cost of precision oncology
testing
$
59,306
$
45,106
Amortization of intangible assets
(149
)
(148
)
Stock-based compensation expense and
related employer payroll tax payments
(1,278
)
(1,218
)
Non-GAAP cost of precision oncology
testing
$
57,879
$
43,740
GAAP cost of development services and
other
$
5,990
$
7,967
Amortization of intangible assets
(200
)
(201
)
Stock-based compensation expense and
related employer payroll tax payments
(499
)
(476
)
Non-GAAP cost of development services
and other
$
5,291
$
7,290
GAAP gross profit
$
103,195
$
75,641
Amortization of intangible assets
349
349
Stock-based compensation expense and
related employer payroll tax payments
1,777
1,694
Non-GAAP gross profit
$
105,321
$
77,684
GAAP cost of screening
$
3,329
$
4,065
Amortization of intangible assets
(200
)
(201
)
Stock-based compensation expense and
related employer payroll tax payments
(499
)
(476
)
Non-GAAP cost of screening
$
2,630
$
3,388
Non-GAAP gross profit excluding cost of
screening
$
107,951
$
81,072
GAAP research and development
expense
$
83,802
$
93,128
Stock-based compensation expense and
related employer payroll tax payments
(10,064
)
(8,748
)
Contingent consideration
(375
)
(570
)
Non-GAAP research and development
expense
$
73,363
$
83,810
GAAP sales and marketing
expense
$
80,425
$
76,123
Stock-based compensation expense and
related employer payroll tax payments
(7,329
)
(7,543
)
Non-GAAP sales and marketing
expense
$
73,096
$
68,580
GAAP general and administrative
expense
$
38,651
$
40,445
Amortization of intangible assets
(336
)
(331
)
Stock-based compensation expense and
related employer payroll tax payments
(8,164
)
(4,468
)
Contingent consideration
(120
)
300
Non-GAAP general and administrative
expense
$
30,031
$
35,946
GAAP loss from operations
$
(99,683
)
$
(134,055
)
Amortization of intangible assets
685
680
Stock-based compensation expense and
related employer payroll tax payments
27,334
22,453
Contingent consideration
495
270
Non-GAAP loss from operations
$
(71,169
)
$
(110,652
)
GAAP net loss
$
(114,985
)
$
(133,533
)
Amortization of intangible assets
685
680
Stock-based compensation expense and
related employer payroll tax payments
27,334
22,453
Contingent consideration
495
270
Unrealized losses (gains) on marketable
equity securities
30,054
(3,882
)
Impairment of non-marketable equity
securities and other related assets
—
5,485
Non-GAAP net loss
$
(56,417
)
$
(108,527
)
GAAP net loss per share, basic and
diluted
$
(0.94
)
$
(1.30
)
Non-GAAP net loss per share, basic and
diluted
$
(0.46
)
$
(1.06
)
Weighted-average shares used in
computing GAAP and Non-GAAP net loss per share, basic and
diluted
121,712
102,663
Reconciliation of GAAP Net
Loss to Adjusted EBITDA
(unaudited)
(in thousands)
Three Months Ended March
31,
2024
2023
GAAP net loss
$
(114,985
)
$
(133,533
)
Interest income
(14,868
)
(3,060
)
Interest expense
645
644
Other expense (income), net
29,120
1,654
Provision for income taxes
405
240
Depreciation and amortization
10,712
10,345
Stock-based compensation expense and
related employer payroll tax payments
27,334
22,453
Contingent consideration
495
270
Adjusted EBITDA
$
(61,142
)
$
(100,987
)
Reconciliation of Free Cash
Flow to Net Cash Used in Operating Activities
(unaudited)
(in thousands)
Three Months Ended March
31,
2024
2023
Net cash used in operating activities
$
(30,284
)
$
(74,441
)
Purchase of property and equipment
(6,934
)
(7,524
)
Free cash flow
$
(37,218
)
$
(81,965
)
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Investor Contact:
investors@guardanthealth.com
Media Contact: Melissa
Marasco press@guardanthealth.com +1 650-647-3711
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