Natera, Inc. (NASDAQ: NTRA), a global leader in cell-free DNA
testing, today reported its financial results for the fourth
quarter and year ended December 31, 2023.
Recent Strategic and Financial Highlights
- Generated total revenues of $311.1 million in the fourth
quarter of 2023, compared to $217.3 million in the fourth quarter
of 2022, an increase of 43.2%. Product revenues grew 44.3% over the
same period.
- Generated total revenues of $1,082.6 million in the full year
2023 compared to $820.2 million in 2022, an increase of 32.0%.
Product revenues grew 34.0% over the same period.
- Generated gross margins of 51.4% in the fourth quarter of 2023,
compared to gross margins of 41.4% in the fourth quarter of
2022.
- Processed approximately 2,496,100 tests in the full year 2023,
compared to approximately 2,066,500 tests in 2022, an increase of
20.8%.
- Performed approximately 97,500 oncology tests in the fourth
quarter of 2023, compared to approximately 64,000 in the fourth
quarter of 2022, an increase of 52.3%.
- Performed approximately 340,700 oncology tests in the full year
2023, compared to approximately 196,400 in 2022, an increase of
73.5%.
- Guiding 2024 total revenue of $1.32 billion-$1.35 billion,
gross margin of 50% to 53%, and reiterating expectations to achieve
a cash flow breakeven quarter in 2024.
- Acquired Invitae’s reproductive health assets.
- Received Medicare Coverage for Signatera in two new
indications, ovarian cancer and neoadjuvant breast cancer.
“We are really pleased with our performance in the quarter and
with the continued positive impact we make on patient care,” said
Steve Chapman, chief executive officer of Natera. “We believe we
are in an excellent position to continue this momentum into
2024.”
Fourth Quarter and Year Ended December 31, 2023 Financial
Results
Total revenues were $311.1 million in the fourth quarter of 2023
compared to $217.3 million in the fourth quarter of 2022, an
increase of 43.2%. The increase in total revenues was driven
primarily by a 44.3% increase in product revenues, which were
$307.3 million in the fourth quarter of 2023 compared to $212.9
million in the fourth quarter of 2022. The increase in product
revenues was driven by average selling price improvements as well
as an increase in test volumes. Natera processed approximately
626,800 tests in the fourth quarter of 2023, including
approximately 610,100 tests accessioned in its laboratory, compared
to approximately 559,700 tests processed, including approximately
543,900 tests accessioned in its laboratory, in the fourth quarter
of 2022.
In the fourth quarter of 2023, Natera recognized revenue on
approximately 619,800 tests for which results were reported to
customers in the period (tests reported), including approximately
604,200 tests reported from its laboratory, compared to
approximately 519,200 tests reported, including approximately
504,500 tests reported from its laboratory, in the fourth quarter
of 2022, an overall increase of 19.4% from the prior period.
Total revenues in 2023 were approximately $1,082.6 million
compared to $820.2 million in 2022, which represents an increase of
32.0%. The increase in total revenues was driven primarily by a
34.0% increase in product revenues, which were $1,068.5 million in
the full year 2023 compared to $797.3 million in 2022. The increase
in product revenues was driven by an increase in test volumes as
well as average selling price improvements compared to 2022. For
the full year 2023, Natera processed approximately 2,496,100 tests,
including approximately 2,426,500 tests accessioned in its
laboratory, compared to approximately 2,066,500 tests processed in
2022, including approximately 2,004,000 tests accessioned in its
laboratory.
For the full year 2023, Natera recognized revenue on
approximately 2,388,200 tests reported, including approximately
2,323,400 tests reported from its laboratory, compared to
approximately 1,919,600 tests reported, including approximately
1,861,000 tests reported from its laboratory, in 2022, an overall
increase of 24.4%.
Gross profit* for the three months ended December 31, 2023 and
2022 was $159.9 million and $90.0 million, respectively,
representing a gross margin of 51.4% and 41.4%, respectively. Gross
profit for the year ended December 31, 2023 and 2022 was $492.7
million and $364.0 million, respectively, representing a gross
margin of 45.5% and 44.4%, respectively. Natera had higher gross
margin in the fourth quarter of 2023 and for the full year 2023
primarily as a result of higher revenues and continuous progress in
reducing cost of goods sold associated with tests processed. Total
operating expenses, representing research and development expenses
and selling, general and administrative expenses, for the fourth
quarter of 2023 were $244.4 million, compared to $231.7 million in
the same period of the prior year, an increase of 5.5%. Total
operating expenses for the full year 2023 were $939.0 million,
compared to $905.0 million in 2022, an increase of 3.8%. The
increases for both periods were primarily driven by headcount
growth to support new product offerings.
Loss from operations for the fourth quarter of 2023 was $84.5
million compared to $141.8 million for the same period of the prior
year. Loss from operations for the full year 2023 was $446.2
million compared to $541.0 million in 2022.
Natera reported a net loss for the fourth quarter of 2023 of
$78.0 million, or ($0.65) per diluted share, compared to a net loss
of $142.6 million, or ($1.37) per diluted share, for the same
period in 2022. Weighted average shares outstanding were
approximately 119.3 million in the fourth quarter of 2023 compared
to 104.3 million in the fourth quarter of the prior year. Natera’s
net loss for the full year 2023 was $434.8 million, or ($3.78) per
diluted share, compared to a net loss of $547.8 million, or ($5.57)
per diluted share, in 2022. Weighted average shares outstanding
were 115.0 million in 2023 compared to 98.4 million in 2022.
At December 31, 2023, Natera held approximately $879.0 million
in cash, cash equivalents, short-term investments and restricted
cash, compared to $898.4 million as of December 31, 2022. As of
December 31, 2023, Natera had a total outstanding debt balance of
$363.3 million, comprised of $80.4 million including accrued
interest under its line of credit with UBS at a variable interest
rate of 30-day SOFR plus 50 bps and a net carrying amount of $282.9
million under its seven-year convertible senior notes issued in
April 2020. The gross principal balance outstanding for the
convertible senior notes was $287.5 million as of December 31,
2023.
Financial Outlook
Natera anticipates 2024 total revenue of $1.32 billion to $1.35
billion; 2024 gross margin to be approximately 50% to 53% of
revenues; selling, general and administrative costs to be
approximately $630 million to $650 million; research and
development costs to be $325 million to $345 million, and net cash
consumption to be $50 million to $75 million**.
* Gross profit is calculated as GAAP total revenues less GAAP
cost of revenues. Gross margin is calculated as gross profit
divided by GAAP total revenues.
** Cash consumption is calculated as the sum of GAAP net cash
used by operating activities (estimated for 2024 to be up to $25
million) and GAAP net purchases of property and equipment
(estimated for 2024 to be up to $50 million).
Test Volume Summary
Unit
Q4 2023
Q4 2022
FY 2023
FY 2022
Definition
Tests processed
626,800
559,700
2,496,100
2,066,500
Tests accessioned in our laboratory plus
units processed outside of our laboratory
Tests accessioned
610,100
543,900
2,426,500
2,004,000
Test accessioned in our laboratory
Tests reported in our laboratory
604,200
504,500
2,323,400
1,861,000
Total tests reported in our laboratory
less units reported outside of our laboratory
Tests reported
619,800
519,200
2,388,200
1,919,600
Total tests reported
About Natera
Natera™ is a global leader in cell-free DNA testing, dedicated
to oncology, women’s health, and organ health. We aim to make
personalized genetic testing and diagnostics part of the standard
of care to protect health and enable earlier, more targeted
interventions that help lead to longer, healthier lives. Natera’s
tests are validated by more than 150 peer-reviewed publications
that demonstrate high accuracy. Natera operates ISO 13485-certified
and CAP-accredited laboratories certified under the Clinical
Laboratory Improvement Amendments (CLIA) in Austin, Texas and San
Carlos, California. For more information, visit www.natera.com.
Conference Call Information
Event:
Natera's Fourth Quarter and Full Year 2023
Financial Results Conference Call
Date:
Wednesday, February 28, 2024
Time:
1:30 p.m. PT (4:30 p.m. ET)
Live Dial-In:
(888) 770-7321, Domestic
(929) 201-7107, International
Conference ID:
7684785
Webcast Link:
https://events.q4inc.com/attendee/656023681
Forward-Looking Statements
This press release contains forward-looking statements under the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical facts, including
the company’s financial guidance for fiscal 2024, its market
opportunity, anticipated products and launch schedules,
reimbursement coverage and product costs, commercial and strategic
partnerships and acquisitions, user experience, clinical trials and
studies, and its strategies, goals and general business and market
conditions, are forward-looking statements. Any forward-looking
statements contained in this press release are based upon Natera’s
current plans, estimates, and expectations, as of the date of this
release, and are not a representation that such plans, estimates,
or expectations will be achieved.
These forward-looking statements are subject to known and
unknown risks and uncertainties that may cause actual results to
differ materially, including: we face numerous uncertainties and
challenges in achieving our financial projections and goals; we may
be unable to further increase the use and adoption of our products
through our direct sales efforts or through our laboratory
partners; we have incurred losses since our inception and we
anticipate that we will continue to incur losses for the
foreseeable future; our quarterly results may fluctuate from period
to period; our estimates of market opportunity and forecasts of
market growth may prove to be inaccurate; we may be unable to
compete successfully with existing or future products or services
offered by our competitors; we may engage in acquisitions,
dispositions or other strategic transactions that may not achieve
our anticipated benefits and could otherwise disrupt our business,
cause dilution to our stockholders or reduce our financial
resources; we may not be successful in commercializing our
cloud-based distribution model; our products may not perform as
expected; the results of our clinical studies, including our
SNP-based Microdeletion and Aneuploidy Registry, or SMART, Study,
may not be compelling to professional societies or payors as
supporting the use of our tests, particularly for microdeletions
screening, or may not be able to be replicated in later studies
required for regulatory approvals or clearances; if either of our
primary CLIA-certified laboratories becomes inoperable, we will be
unable to perform our tests and our business will be harmed; we
rely on a limited number of suppliers or, in some cases, single
suppliers, for some of our laboratory instruments and materials and
may not be able to find replacements or immediately transition to
alternative suppliers; if we are unable to successfully scale our
operations, our business could suffer; the marketing, sale, and use
of Panorama and our other products could result in substantial
damages arising from product liability or professional liability
claims that exceed our resources; we may be unable to expand,
obtain or maintain third-party payer coverage and reimbursement for
our tests, and we may be required to refund reimbursements already
received; third-party payers may withdraw coverage or provide lower
levels of reimbursement due to changing policies, billing
complexities or other factors; if the FDA were to begin actively
regulating our tests, we could incur substantial costs and delays
associated with trying to obtain premarket clearance or approval
and incur costs associated with complying with post-market
controls; litigation or other proceedings, resulting from either
third party claims of intellectual property infringement or third
party infringement of our technology, is costly, time- consuming
and could limit our ability to commercialize our products or
services; any inability to effectively protect our proprietary
technology could harm our competitive position or our brand; and we
cannot guarantee that we will be able to service and comply with
our outstanding debt obligations or achieve our expectations
regarding the conversion of our outstanding convertible notes.
Additional risks and uncertainties that could affect our
financial results are included under the captions, "Risk Factors"
and "Management’s Discussion and Analysis of Financial Condition
and Results of Operations" in our most recent filings on Forms 10-K
and 10-Q and in other filings that we make with the SEC from time
to time. These documents are available on our website at
www.natera.com under the Investor Relations section and on the
SEC’s website at www.sec.gov.
In light of the significant uncertainties in these
forward-looking statements, you should not regard these statements
as a representation or warranty by us or any other person that we
will achieve our objectives and plans in any specified time frame,
or at all. Natera assumes no obligation to, and does not currently
intend to, update any such forward-looking statements after the
date of this release.
Natera, Inc.
Consolidated Balance
Sheets
(Unaudited)
(in thousands, except shares)
December 31,
December 31,
2023
2022
(1)
Assets
Current assets:
Cash, cash equivalents and restricted
cash
$
642,095
$
466,091
Short-term investments
236,882
432,301
Accounts receivable, net of allowance of
$6,481 in 2023 and $3,830 in 2022
278,289
244,385
Inventory
40,759
35,406
Prepaid expenses and other current assets,
net
60,524
33,634
Total current assets
1,258,549
1,211,817
Property and equipment, net
111,210
92,453
Operating lease right-of-use assets
56,537
71,874
Other assets
15,403
18,330
Total assets
$
1,441,699
$
1,394,474
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
14,998
$
31,148
Accrued compensation
45,857
44,010
Other accrued liabilities
149,405
144,214
Deferred revenue, current portion
16,612
10,777
Short-term debt financing
80,402
80,350
Total current liabilities
307,274
310,499
Long-term debt financing
282,945
281,653
Deferred revenue, long-term portion
19,128
20,001
Operating lease liabilities, long-term
portion
67,025
76,577
Total liabilities
676,372
688,730
Commitments and contingencies
Stockholders’ equity:
Common stock (2)
11
11
Additional paid in capital
3,145,837
2,664,730
Accumulated deficit
(2,377,436
)
(1,942,635
)
Accumulated other comprehensive loss
(3,085
)
(16,362
)
Total stockholders’ equity
765,327
705,744
Total liabilities and stockholders’
equity
$
1,441,699
$
1,394,474
(1)
The consolidated balance sheet at
December 31, 2022 has been derived from the audited consolidated
financial statements at that date included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2022.
(2)
As of December 31, 2023 and 2022,
there were approximately 119,581,000 and 111,255,000 shares of
common stock issued and outstanding, respectively.
Natera, Inc.
Consolidated Statements of
Operations and Comprehensive Loss
(Unaudited)
(in thousands, except per share
data)
Year ended December
31,
2023
2022
2021
Revenues
Product revenues
$
1,068,522
$
797,307
$
580,080
Licensing and other revenues
14,049
22,915
45,406
Total revenues
1,082,571
820,222
625,486
Cost and expenses
Cost of product revenues
588,564
453,632
315,195
Cost of licensing and other revenues
1,267
2,624
3,223
Research and development
320,678
316,415
264,208
Selling, general and administrative
618,307
588,591
511,034
Total cost and expenses
1,528,816
1,361,262
1,093,660
Loss from operations
(446,245
)
(541,040
)
(468,174
)
Interest expense
(12,638
)
(9,319
)
(8,305
)
Interest and other income, net
24,353
3,538
5,381
Loss before income taxes
(434,530
)
(546,821
)
(471,098
)
Income tax expense
(271
)
(978
)
(618
)
Net loss
$
(434,801
)
$
(547,799
)
$
(471,716
)
Unrealized gain (loss) on
available-for-sale securities, net of tax
13,277
(14,075
)
(6,546
)
Comprehensive loss
$
(421,524
)
$
(561,874
)
$
(478,262
)
Net loss per share:
Basic and diluted
$
(3.78
)
$
(5.57
)
$
(5.21
)
Weighted-average number of shares used in
computing basic and diluted net loss per share:
Basic and diluted
114,997
98,408
90,558
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228987949/en/
Natera, Inc. Investor
Relations Mike Brophy, CFO, Natera, Inc., 510-826-2350
Media Lesley Bogdanow, VP of Corporate
Communications, Natera, Inc., pr@natera.com
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