Q1 revenue increased 34% year over year driven
by clinical volume growth of 45%
Raises 2023 revenue guidance to $535 to $545
million
Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology
company focused on helping conquer cancer globally through use of
its proprietary tests, vast data sets and advanced analytics, today
reported financial results for the quarter ended March 31,
2023.
First Quarter 2023 Financial Highlights
- Revenue of $128.7 million for the first quarter of 2023, an
increase of 34% over the first quarter of 2022
- Reported 39,100 tests to clinical customers and 6,150 tests to
biopharmaceutical customers in the first quarter of 2023,
representing an increase of 45% and 21%, respectively, over the
first quarter of 2022
Recent Operating Highlights
- Delivered record clinical volumes driven by the FDA approval of
Guardant360 CDx for ESR1 mutations in metastatic breast cancer and
expanded commercial coverage to more than 300 million lives
- Received Medicare coverage for Guardant Response, the first
blood-only liquid biopsy for I-O monitoring for all solid
tumors
- Filed premarket approval (PMA) application for Shield
blood-based CRC screening, and FDA review process underway
- Presented additional data from ECLIPSE trial at Digestive
Disease Week (DDW)
- Strengthened leadership team with the appointment of Ines
Dahne-Steuber as Chief Operating Officer to drive further operating
efficiency and scale, and the promotion of Darya Chudova to Chief
Technology Officer to continue innovation of our market-leading
technology platform
“We are off to a very strong start with robust clinical volume
growth fueled by continued expansion in lung cancer and a step
change in breast cancer volumes following our recent FDA approval
of Guardant360 CDx in metastatic breast cancer,” said Helmy
Eltoukhy, co-founder and co-CEO. “With the recent coverage of
Guardant Response, we now have full Medicare coverage across our
Therapy Selection and MRD product portfolios. This coverage will
help drive continued volume growth as we approach breakeven in our
Therapy Selection core business and execute on our strategy to be
the worldwide leader in precision oncology.”
“Each quarter we are making more progress on our goal of
developing a new patient-preferred market category in CRC
screening. Shield is the first mover in this category that achieved
83% overall CRC sensitivity at 90% specificity in range with other
guideline-recommended non-invasive CRC screening tests. Based on
this study readout, our team has recently submitted the PMA, and
the FDA review is currently underway,” said AmirAli Talasaz,
co-founder and co-CEO. “Today at DDW, the study investigators
presented additional insights for the ECLIPSE trial. Sensitivity of
our test at stage I-III was 81% where cure rates are highest, and
72% in detecting localized disease that would most likely be cured
through surgical procedures. Based on our ECLIPSE results, we
believe that as a longitudinal screening test, taken every three
years, Shield will detect nearly all CRCs at a curable stage and
will save many lives.”
First Quarter 2023 Financial Results
Revenue was $128.7 million for the three months ended March 31,
2023, a 34% increase from $96.1 million for the three months ended
March 31, 2022. Precision oncology revenue grew 35%, driven
predominantly by an increase in clinical testing volume and
biopharma sample volume, which grew 45% and 21%, respectively, over
the prior year period. Development services and other revenue
increased by 28%, primarily due to revenues earned from our
partnership agreements during the three months ended March 31,
2022.
Gross profit, or total revenue less cost of precision oncology
testing and cost of development services and other, was $75.6
million for the first quarter of 2023, an increase of $11.5 million
from $64.1 million for the corresponding prior year period. Gross
margin, or gross profit divided by total revenue, was 59%, as
compared to 67% for the corresponding prior year period. Precision
oncology gross margin was 60% in the first quarter of 2023, as
compared to 64% in the prior year period. The reduction is due to
the change in mix between clinical and biopharma revenue, as well
as the year over year change in blended clinical ASP due to the
increased proportion of volume coming from Reveal, TissueNext and
Response. Development services and other gross margin was 48% in
the first quarter of 2023, as compared to 89% in the prior year
period. The change is due to a one-time cost incurred in the first
quarter of 2023 related to one of our partnership agreements and to
the inclusion of the cost of processing Shield LDT samples as part
of our screening market development activities.
Operating expenses were $209.7 million for the first quarter of
2023, as compared to $187.5 million for the corresponding prior
year period, an increase of 12%. Non-GAAP operating expenses were
$188.3 million for the first quarter of 2023, as compared to $158.7
million for the corresponding prior year period.
Net loss was $133.5 million for the first quarter of 2023, as
compared to $123.2 million for the corresponding prior year period.
Net loss per share was $1.30 for the first quarter of 2023, as
compared to $1.21 for the corresponding prior year period. Non-GAAP
net loss was $108.5 million for the first quarter of 2023, as
compared to $93.2 million for the corresponding prior year period.
Non-GAAP net loss per share was $1.06 for the first quarter of
2023, as compared to $0.91 for the corresponding prior year
period.
Adjusted EBITDA loss was $101.0 million for the first quarter of
2023, as compared to a $86.6 million loss for the corresponding
prior year period.
Free cash outflow for the first quarter of 2023 was $82.0
million. Cash, cash equivalents and marketable debt securities were
$937.0 million as of March 31, 2023.
2023 Guidance
Guardant Health expects full year 2023 revenue to be in the
range of $535 million to $545 million, representing growth of 19%
to 21% compared to full year 2022. This compares to its previous
guidance range of $525 million to $540 million. Guardant Health
continues to expect full year 2023 operating expenses to be below
full year 2022, driven by efficiency measures and continued
leverage of its existing infrastructure, and free cash outflow to
be approximately $350 million in 2023.
Webcast Information
Guardant Health will host a conference call to discuss the first
quarter and full year 2023 financial results after market close on
Tuesday, May 9, 2023 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 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, changes in estimated fair value of
noncontrolling interest liability, contingent consideration,
acquisition related expenses, amortization of intangible assets,
fair value adjustments on marketable equity securities, impairment
of non-marketable securities and other 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 (benefit from) income taxes; depreciation and amortization
expense; stock-based compensation expense and related employer
payroll tax payments; changes in estimated fair value of
noncontrolling interest liability; adjustments relating to
contingent consideration; and, if applicable in a reporting period,
acquisition-related expenses, and other non-recurring items. Free
cash flow is defined as net cash used in operating activities in
the period less purchases 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 other items because we
believe that these income (expenses) do not reflect expected future
operating expenses. 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 oncology company focused
on helping conquer cancer globally through use of its proprietary
tests, vast data sets and advanced analytics. The Guardant Health
oncology platform leverages capabilities to drive commercial
adoption, improve patient clinical outcomes and lower healthcare
costs across all stages of the cancer care continuum. Guardant
Health has commercially launched Guardant360®, Guardant360 CDx,
Guardant360 TissueNext™, Guardant360 Response™, and GuardantOMNI®
tests for advanced stage cancer patients, and Guardant Reveal™ for
early-stage cancer patients. The Guardant Health screening
portfolio, including the Shield™ test, aims to address the needs of
individuals eligible for cancer screening.
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, 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, 2022, 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,
2023
2022
Revenue:
Precision oncology testing
$
113,393
$
84,136
Development services and other
15,321
11,963
Total revenue
128,714
96,099
Costs and operating expenses:
Cost of precision oncology testing
45,106
30,684
Cost of development services and other
7,967
1,297
Research and development expense
93,128
81,757
Sales and marketing expense
76,123
64,432
General and administrative expense
40,445
41,267
Total costs and operating expenses
262,769
219,437
Loss from operations
(134,055
)
(123,338
)
Interest income
3,060
778
Interest expense
(644
)
(644
)
Other income (expense), net
(1,654
)
(48
)
Loss before provision for (benefit from)
income taxes
(133,293
)
(123,252
)
Provision for (benefit from) income
taxes
240
(24
)
Net loss
$
(133,533
)
$
(123,228
)
Net loss per share, basic and diluted
$
(1.30
)
$
(1.21
)
Weighted-average shares used in computing
net loss per share, basic and diluted
102,663
101,853
Guardant Health, Inc.
Condensed Consolidated Balance
Sheets
(unaudited)
(in thousands, except share
and per share data)
March 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
223,640
$
141,647
Short-term marketable debt securities
713,380
869,584
Accounts receivable, net
87,204
97,256
Inventory, net
46,474
51,598
Prepaid expenses and other current assets,
net
33,762
31,509
Total current assets
1,104,460
1,191,594
Property and equipment, net
163,229
167,920
Right-of-use assets, net
170,651
174,001
Intangible assets, net
11,047
11,727
Goodwill
3,290
3,290
Other assets, net
58,954
61,453
Total Assets
$
1,511,631
$
1,609,985
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
190,534
$
175,817
Deferred revenue
13,621
17,403
Total current liabilities
204,155
193,220
Convertible senior notes, net
1,138,034
1,137,391
Long-term operating lease liabilities
204,857
210,015
Other long-term liabilities
9,136
9,179
Total Liabilities
1,556,182
1,549,805
Stockholders’ (deficit) equity:
Common stock, par value of $0.00001 per
share; 350,000,000 shares authorized as of March 31, 2023 and
December 31, 2022; 102,708,305 and 102,619,383 shares issued and
outstanding as of March 31, 2023 and December 31, 2022,
respectively
1
1
Additional paid-in capital
1,763,544
1,742,114
Accumulated other comprehensive loss
(12,150
)
(19,522
)
Accumulated deficit
(1,795,946
)
(1,662,413
)
Total Stockholders’ (Deficit) Equity
(44,551
)
60,180
Total Liabilities and Stockholders’
(Deficit) Equity
$
1,511,631
$
1,609,985
Guardant Health, Inc.
Reconciliation of Selected
GAAP Measures to Non-GAAP Measures
(unaudited)
(in thousands, except per
share data)
Three Months Ended March
31,
2023
2022
GAAP cost of precision oncology
testing
$
45,106
$
30,684
Amortization of intangible assets
(148
)
(148
)
Stock-based compensation expense and
related employer payroll tax payments
(1,218
)
(1,176
)
Non-GAAP cost of precision oncology
testing
$
43,740
$
29,360
GAAP cost of development services and
other
$
7,967
$
1,297
Amortization of intangible assets
$
(201
)
$
—
Stock-based compensation expense and
related employer payroll tax payments
$
(476
)
$
—
Non-GAAP cost of development services
and other
$
7,290
$
1,297
GAAP research and development
expense
$
93,128
$
81,757
Stock-based compensation expense and
related employer payroll tax payments
(8,748
)
(5,410
)
Contingent consideration
(570
)
(2,120
)
Non-GAAP research and development
expense
$
83,810
$
74,227
GAAP sales and marketing
expense
$
76,123
$
64,432
Stock-based compensation expense and
related employer payroll tax payments
(7,543
)
(5,570
)
Non-GAAP sales and marketing
expense
$
68,580
$
58,862
GAAP general and administrative
expense
$
40,445
$
41,267
Amortization of intangible assets
(331
)
(332
)
Stock-based compensation expense and
related employer payroll tax payments
(4,468
)
(12,835
)
Contingent consideration
300
(2,390
)
Acquisition related expenses
—
(63
)
Non-GAAP general and administrative
expense
$
35,946
$
25,647
GAAP loss from operations
$
(134,055
)
$
(123,338
)
Amortization of intangible assets
680
480
Stock-based compensation expense and
related employer payroll tax payments
22,453
24,991
Contingent consideration
270
4,510
Acquisition related expenses
—
63
Non-GAAP loss from operations
$
(110,652
)
$
(93,294
)
GAAP net loss
$
(133,533
)
$
(123,228
)
Amortization of intangible assets
680
480
Stock-based compensation expense and
related employer payroll tax payments
22,453
24,991
Contingent consideration
270
4,510
Acquisition related expenses
—
63
Unrealized gains on marketable equity
securities
(3,882
)
—
Impairment of non-marketable equity
securities
5,485
—
Non-GAAP net loss
$
(108,527
)
$
(93,184
)
GAAP net loss per share, basic and
diluted
$
(1.30
)
$
(1.21
)
Non-GAAP net loss per share, basic and
diluted
$
(1.06
)
$
(0.91
)
Weighted-average shares used in
computing GAAP and Non-GAAP net loss per share, basic and
diluted
102,663
101,853
Guardant Health, Inc.
Reconciliation of GAAP Net
Loss to Adjusted EBITDA
(unaudited)
(in thousands)
Three Months Ended March
31,
2023
2022
GAAP net loss
$
(133,533
)
$
(123,228
)
Interest income
(3,060
)
(778
)
Interest expense
644
644
Other (income) expense, net
1,654
48
Provision for (benefit from) income
taxes
240
(24
)
Depreciation and amortization
10,345
7,201
Stock-based compensation expense and
related employer payroll tax payments
22,453
24,991
Contingent consideration
270
4,510
Acquisition related expenses
—
63
Adjusted EBITDA
$
(100,987
)
$
(86,573
)
Reconciliation of Free Cash
Flow to Net Cash Used in Operating Activities
(unaudited)
(in thousands)
Three Months Ended March
31,
2023
2022
Net cash used in operating activities
$
(74,441
)
$
(28,619
)
Purchase of property and equipment
(7,524
)
(22,700
)
Free cash flow
$
(81,965
)
$
(51,319
)
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Investor Contact:
investors@guardanthealth.com
Media Contact:
press@guardanthealth.com
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