Natera, Inc. (NASDAQ: NTRA), a global leader in cell-free DNA
and genetic testing, today reported its financial results for the
second quarter ended June 30, 2024.
Recent Strategic and Financial Highlights
- Generated total revenues of $413.4 million in the second
quarter of 2024, compared to $261.4 million in the second quarter
of 2023, an increase of 58.1%. Product revenues grew 59.3% over the
same period.
- Generated a gross margin of 58.8% in the second quarter of
2024, compared to a gross margin of 45.2% in the second quarter of
2023.
- Processed approximately 760,300 tests in the second quarter of
2024, compared to approximately 617,200 tests in the second quarter
of 2023, an increase of 23.2%.
- Performed approximately 125,400 oncology tests in the second
quarter of 2024, compared to approximately 83,500 in the second
quarter of 2023, an increase of 50.2%.
- Achieved positive cash flow of approximately $3.3 million1 in
the second quarter of 2024.
- Launched a new feature for ProsperaTM Heart, enhancing
detection of rejection in heart transplant patients.
- Published several peer-reviewed papers on SignateraTM in top
journals.
- Presented new data at the American Society of Clinical Oncology
(ASCO) 2024 Annual Meeting across a variety of indications,
including breast cancer, colorectal cancer, lung cancer, melanoma,
esophageal cancer, and urothelial cancer.
“Our second quarter financial results exceeded our expectations
with incredibly strong performance in volume, revenue and gross
margin,” said Steve Chapman, chief executive officer of Natera. “We
look forward to continuing this positive momentum in the second
half of 2024 and supporting our patients with cutting-edge science,
an innovative product portfolio, and excellent service that is core
to our mission.”
Second Quarter Ended June 30, 2024 Financial Results
Total revenues were $413.4 million in the second quarter of 2024
compared to $261.4 million in the second quarter of 2023, an
increase of 58.1%. The increase in total revenues was driven
primarily by a 59.3% increase in product revenues, which were
$411.4 million in the second quarter of 2024 compared to $258.3
million in the second quarter of 2023. The increase in product
revenues was primarily driven by an increase in volume, average
selling price improvements, as well as cash receipts during the
quarter related to tests delivered in prior periods that were fully
collected.
Natera processed approximately 760,300 tests in the second
quarter of 2024, including approximately 744,000 tests accessioned
in its laboratory, compared to approximately 617,200 tests
processed, including approximately 599,000 tests accessioned in its
laboratory, in the second quarter of 2023.
In the second quarter of 2024, Natera recognized revenue on
approximately 725,200 tests for which results were reported to
customers in the period (tests reported), including approximately
709,800 tests reported from its laboratory, compared to
approximately 594,900 tests reported, including approximately
578,200 tests reported from its laboratory, in the second quarter
of 2023, an increase of 21.9% from the prior period.
Gross profit2 for the three months ended June 30, 2024 and 2023
was $243.2 million and $118.3 million, respectively, representing a
gross margin of 58.8% and 45.2%, respectively. Natera had higher
gross margin in the second quarter of 2024 primarily as a result of
higher revenues, continuous progress in reducing cost of goods sold
associated with tests processed, as well as incremental cash
receipts during the quarter associated with tests delivered in
prior periods that were fully collected. Total operating expenses,
representing research and development expenses and selling, general
and administrative expenses, for the second quarter of 2024 were
$287.1 million, compared to $230.7 million in the same period of
the prior year, an increase of 24.4%. The increase was primarily
driven by headcount growth to support new product offerings as well
as increases in consulting and legal expenses.
Loss from operations for the second quarter of 2024 was $43.9
million compared to $112.4 million for the same period of the prior
year.
Natera reported a net loss for the second quarter of 2024 of
$37.5 million, or ($0.30) per diluted share, compared to a net loss
of $110.8 million, or ($0.97) per diluted share, for the same
period in 2023. Weighted average shares outstanding were
approximately 122.9 million in the second quarter of 2024 compared
to 113.7 million in the second quarter of the prior year.
At June 30, 2024, Natera held approximately $887.1 million in
cash, cash equivalents, short-term investments and restricted cash,
compared to $879.0 million as of December 31, 2023. As of June 30,
2024, Natera had a total outstanding debt balance of $364.0
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 $283.6 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 June 30, 2024.
Financial Outlook
Natera anticipates 2024 total revenue of $1.49 billion to $1.52
billion; 2024 gross margin to be approximately 54% to 56% of
revenues; selling, general and administrative costs to be
approximately $700 million to $750 million; research and
development costs to be $350 million to $375 million; and net cash
(outflow) inflow to be ($25) million to $25 million3.
Test Volume Summary
Unit
Q2 2024
Q2 2023
Definition
Tests processed
760,300
617,200
Tests accessioned in our laboratory plus
units processed outside of our laboratory
Tests accessioned
744,000
599,000
Test accessioned in our laboratory
Tests reported
725,200
594,900
Total tests reported
Tests reported in our laboratory
709,800
578,200
Total tests reported in our laboratory
less units reported outside of our laboratory
About Natera
Natera™ is a global leader in cell-free DNA and genetic 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 200 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 Second Quarter 2024
Financial Results Conference Call
Date:
Thursday, August 8, 2024
Time:
1:30 p.m. PT (4:30 p.m. ET)
Live Dial-In:
1-888-596-4144 (Domestic)
1-646-968-2525 (International)
Conference ID:
7684785
Webcast Link:
https://events.q4inc.com/attendee/455235752
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; 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, if and when the FDA begins actively
regulating our tests pursuant to recently enacted FDA regulations;
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.
References
- Positive cash flow for the quarter ended June 30, 2024, is
derived from the GAAP Statement of Cash Flows as follows: net cash
provided by operating activities of $4.0 million, net cash provided
by financing activities of $11.0 million, offset by net cash used
in investing activities for purchases of property and equipment and
acquisition of an asset of $11.7 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 (outflow) inflow is calculated as the sum of GAAP net cash
provided by (used in) operating activities, GAAP net cash provided
by (used in) financing activities, and GAAP net cash provided by
(used in) investing activities for purchases of property and
equipment and acquisition of assets.
Natera, Inc.
Consolidated Balance
Sheets
(Unaudited)
(in thousands, except shares)
June 30,
December 31,
2024
2023
(1)
Assets
Current assets:
Cash, cash equivalents and restricted
cash
$
796,798
$
642,095
Short-term investments
90,299
236,882
Accounts receivable, net of allowance of
$7,021 and $6,481 at June 30, 2024 and December 31, 2023,
respectively
335,936
278,289
Inventory
40,985
40,759
Prepaid expenses and other current assets,
net
37,798
60,524
Total current assets
1,301,816
1,258,549
Property and equipment, net
133,280
111,210
Operating lease right-of-use assets
52,582
56,537
Other assets
29,311
15,403
Total assets
$
1,516,989
$
1,441,699
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
33,100
$
14,998
Accrued compensation
41,487
45,857
Other accrued liabilities
141,231
149,405
Deferred revenue, current portion
18,367
16,612
Short-term debt financing
80,389
80,402
Total current liabilities
314,574
307,274
Long-term debt financing
283,604
282,945
Deferred revenue, long-term portion and
other liabilities
21,066
19,128
Operating lease liabilities, long-term
portion
61,225
67,025
Total liabilities
680,469
676,372
Commitments and contingencies
Stockholders’ equity:
Common stock (2)
12
11
Additional paid-in capital
3,320,365
3,145,837
Accumulated deficit
(2,482,499
)
(2,377,436
)
Accumulated other comprehensive loss
(1,358
)
(3,085
)
Total stockholders’ equity
836,520
765,327
Total liabilities and stockholders’
equity
$
1,516,989
$
1,441,699
(1)
The consolidated balance sheet at December
31, 2023 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, 2023.
(2)
As of June 30, 2024 and December 31, 2023,
there were approximately 123,365,000 and 119,581,000 shares of
common stock issued and outstanding, respectively.
Natera, Inc.
Consolidated Statements of
Operations and Comprehensive Loss
(Unaudited)
(in thousands, except per share
data)
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
Revenues
Product revenues
$
411,364
$
258,256
$
776,036
$
496,053
Licensing and other revenues
1,987
3,148
5,056
7,107
Total revenues
413,351
261,404
781,092
503,160
Cost and expenses
Cost of product revenues
169,850
142,808
328,683
290,562
Cost of licensing and other revenues
329
341
636
711
Research and development
89,109
78,173
177,746
160,479
Selling, general and administrative
197,965
152,508
392,243
302,135
Total cost and expenses
457,253
373,830
899,308
753,887
Loss from operations
(43,902
)
(112,426
)
(118,216
)
(250,727
)
Interest expense
(3,127
)
(3,177
)
(6,251
)
(6,238
)
Interest and other income, net
10,457
4,518
20,724
9,103
Loss before income taxes
(36,572
)
(111,085
)
(103,743
)
(247,862
)
Income tax (expense) benefit
(892
)
282
(1,320
)
122
Net loss
$
(37,464
)
$
(110,803
)
$
(105,063
)
$
(247,740
)
Unrealized gain on available-for-sale
securities, net of tax
834
2,595
1,727
7,159
Comprehensive loss
$
(36,630
)
$
(108,208
)
$
(103,336
)
$
(240,581
)
Net loss per share:
Basic and diluted
$
(0.30
)
$
(0.97
)
$
(0.86
)
$
(2.20
)
Weighted-average number of shares used in
computing basic and diluted net loss per share:
Basic and diluted
122,853
113,690
121,834
112,734
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808269305/en/
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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