Full year 2023 revenue growth of 25% driven by
clinical volume growth of 39%
Expects full year 2024 revenue to be in the
range of $655 to $670 million
Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology
company, today reported financial results for the quarter and full
year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
- Revenue of $155.1 million for the fourth quarter of 2023, an
increase of 22% over the fourth quarter of 2022
- Reported 46,400 tests to clinical customers and 9,500 tests to
biopharmaceutical customers in the fourth quarter of 2023,
representing increases of 29% and 16%, respectively, over the
fourth quarter of 2022
Full Year 2023 Financial Highlights
- Revenue of $563.9 million for the full year 2023, an increase
of 25% over the full year 2022
- Reported 172,900 tests to clinical customers and 29,900 tests
to biopharmaceutical customers in the full year 2023, representing
an increase of 39% and 15%, respectively, over the full year
2022
- Lowered full year 2023 operating expenses and improved free
cash flow compared to full year 2022
- Ended the year with $1.2 billion in cash, cash equivalents and
marketable debt securities
Recent Operating Highlights
- Improved ASPs with Guardant360 LDT CMS reimbursement increased
from $3,500 to $5,000 effective January 1, 2024
- Published first paper for Shield™ demonstrating improved
adherence with blood-based CRC screening
- Collaborated with US Oncology Network and leading community
oncology practices to increase the use of biomarker testing to
identify patients who would benefit from therapies
- Appointed Terilyn Juarez Monroe as chief people officer
“2023 marked another strong year for Guardant. This was
underscored by our team’s exceptional execution to deliver strong
clinical volumes, which grew nearly 40%,” said Helmy Eltoukhy,
co-founder and co-CEO. “We also surpassed an important milestone by
achieving cash flow breakeven in our Therapy Selection business by
year-end. Looking ahead to 2024, we are well positioned for
continued growth across our oncology product portfolio and have a
strong foundation to deliver long-term shareholder value.”
“We are continuing to make steady progress with FDA on our PMA
submission for Shield and look forward to the upcoming Advisory
Committee Panel as the next phase of the review process,” said
AmirAli Talasaz, co-founder and co-CEO. “2024 will be a pivotal
year for our screening business as we prepare to launch our Shield
IVD test following expected FDA approval. We are excited to see the
impact our test will have to CRC screening when it is broadly
launched later this year.”
Fourth Quarter 2023 Financial Results
Revenue was $155.1 million for the fourth quarter of 2023, a 22%
increase from $126.9 million for the corresponding prior year
period. Precision oncology revenue grew 25%, to $142.2 million for
the fourth quarter of 2023, from $113.8 million for the
corresponding prior year period, driven predominantly by an
increase in clinical and biopharma testing volume, which grew 29%
and 16%, respectively, over the prior year period. Development
services and other revenue was $12.9 million for the fourth quarter
of 2023, compared to $13.1 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 $92.5
million for the fourth quarter of 2023, an increase of $12.8
million from $79.8 million for the corresponding prior year period.
Gross margin, or gross profit divided by total revenue, was 60%, as
compared to 63% for the corresponding prior year period. Precision
oncology gross margin was 60% in the fourth quarter of 2023, as
compared to 62% in the prior year period. The reduction is
primarily due to changes in product mix. Development services and
other gross margin was 60% in the fourth quarter of 2023, as
compared to 74% in the prior year period. The change is primarily
due to the cost of processing an increased volume of Shield LDT
tests, for which we are currently booking minimal revenue.
Operating expenses (research and development expense, sales and
marketing expense, and general and administrative expense) were
$206.6 million for the fourth quarter of 2023, as compared to
$225.9 million for the corresponding prior year period. Other
operating expense was $83.4 million for the fourth quarter of 2023,
related to a non-recurring legal accrual. No such other operating
expense was recorded for the corresponding prior year period.
Non-GAAP operating expenses were $183.1 million for the fourth
quarter of 2023, as compared to $201.2 million for the
corresponding prior year period.
Net loss was $187.0 million for the fourth quarter of 2023, as
compared to $139.9 million for the corresponding prior year period.
Net loss per share was $1.58 for the fourth quarter of 2023, as
compared to $1.36 for the corresponding prior year period. The
year-over-year increase in net loss is primarily due to the
non-recurring $83.4 million legal accrual, partially offset by a
$32.0 million year over year improvement in loss from operations,
excluding the legal accrual impact, and a $11.7 million increase in
interest income.
Non-GAAP net loss was $75.9 million for the fourth quarter of
2023, as compared to $119.6 million for the corresponding prior
year period. Non-GAAP net loss per share was $0.64 for the fourth
quarter of 2023, as compared to $1.17 for the corresponding prior
year period.
Adjusted EBITDA loss was $78.4 million for the fourth quarter of
2023, as compared to a $109.8 million loss for the corresponding
prior year period.
Free cash flow for the fourth quarter of 2023 was negative $82.8
million, as compared to negative $100.8 million for the
corresponding prior year period. Cash, cash equivalents and
marketable debt securities were $1.2 billion as of December 31,
2023.
Full Year 2023 Financial Results
Revenue was $563.9 million for 2023, a 25% increase from $449.5
million for the corresponding prior year period. Precision oncology
revenue grew 31%, to $514.2 million for 2023, from $392.0 million
for the corresponding prior year period, driven predominantly by an
increase in clinical and biopharma testing volume, which grew 39%
and 15%, respectively, over the prior year period. Development
services and other revenue decreased by 14%, to $49.7 million for
2023, from $57.5 million for the corresponding prior year period,
primarily due to the timing and amount of milestones related to our
companion diagnostics collaboration projects and other service
agreements with biopharmaceutical customers, and a reduction in
royalty revenue.
Gross profit, or total revenue less cost of precision oncology
testing and cost of development services and other, was $336.9
million for 2023, an increase of $43.7 million from $293.2 million
for the corresponding prior year period. Gross margin, or gross
profit divided by total revenue, was 60%, as compared to 65% for
the corresponding prior year period. Precision oncology gross
margin was 60% in the year of 2023, as compared to 62% in the prior
year period. The reduction is primarily due to changes in product
mix. Development services and other gross margin was 57% in the
year of 2023, as compared to 86% in the prior year period. The
change is primarily due to the inclusion of the full year 2023 cost
of processing Shield LDT samples as part of our screening market
development activities, for which we are currently booking minimal
revenue, compared to the inclusion of the fourth quarter only cost
in 2022.
Operating expenses (research and development expense, sales and
marketing expense, and general and administrative expense) were
$818.2 million for 2023, as compared to $837.6 million for the
corresponding prior year period. Other operating expense was $83.4
million for 2023, related to the non-recurring legal accrual
discussed above. No such other operating expense was recorded for
the corresponding prior year period. Non-GAAP operating expenses
were $729.2 million for 2023, as compared to $736.6 million for the
corresponding prior year period.
Net loss was $479.4 million for 2023, as compared to $654.6
million for the corresponding prior year period. Net loss per share
was $4.28 for 2023, as compared to $6.41 for the corresponding
prior year period. The year-over-year improvement in net loss is
primarily due to a $99.8 million fair value adjustment related to
the Joint Venture acquisition recorded in 2022, a $87.5 million
positive change in unrealized gains and losses, a $63.1 million
year over year improvement in loss from operations, excluding the
legal accrual impact, and a $29.3 million increase in interest
income, partially offset by the $83.4 million legal accrual
discussed above, and a $23.8 million increase in impairment on
non-marketable equity securities.
Non-GAAP net loss was $352.3 million for 2023, as compared to
$435.4 million for the corresponding prior year period. Non-GAAP
net loss per share was $3.15 for 2023, as compared to $4.26 for the
corresponding prior year period.
Adjusted EBITDA loss was $344.2 million for 2023, as compared to
a $403.4 million loss for the corresponding prior year period.
Free cash flow for 2023 was negative $345.5 million, as compared
to negative $386.9 million for the corresponding prior year
period.
2024 Guidance
Guardant Health expects full year 2024 revenue excluding
screening to be in the range of $655 to $670 million, representing
growth of 16% to 19% compared to full year 2023, and full year 2024
non-GAAP gross margin excluding screening to be in the range of 60%
to 62%. Guardant Health expects total non-GAAP operating expenses
to be in the range of $740 to $750 million, representing a 1% to 3%
increase compared to full year 2023, and free cash flow to be in
the range of negative $320 to $330 million in 2024, an improvement
compared to the full year 2023.
Webcast Information
Guardant Health will host a conference call to discuss the
fourth quarter and full year 2023 financial results after market
close on Thursday, February 22, 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
other operating 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, fair value adjustments of
noncontrolling interest liability, 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; contingent consideration; fair value
adjustments of noncontrolling interest liability; 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 oncology 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 December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Revenue:
Precision oncology testing
$
142,189
$
113,797
$
514,249
$
392,049
Development services and other
12,865
13,094
49,699
57,489
Total revenue
155,054
126,891
563,948
449,538
Costs and operating expenses:
Cost of precision oncology testing
57,417
43,706
205,528
148,199
Cost of development services and other
5,100
3,415
21,524
8,126
Research and development expense
89,856
106,578
367,194
373,807
Sales and marketing expense
79,127
81,423
295,227
299,828
General and administrative expense
37,665
37,888
155,800
163,956
Other operating expense
83,400
—
83,400
—
Total costs and operating expenses
352,565
273,010
1,128,673
993,916
Loss from operations
(197,511
)
(146,119
)
(564,725
)
(544,378
)
Interest income
13,888
2,150
35,365
6,069
Interest expense
(645
)
(644
)
(2,578
)
(2,577
)
Other income (expense), net
(3,316
)
5,281
53,174
(12,778
)
Fair value adjustments of noncontrolling
interest liability
—
—
—
(99,785
)
Loss before provision for income taxes
(187,584
)
(139,332
)
(478,764
)
(653,449
)
(Benefit from) provision for income
taxes
(541
)
602
685
1,139
Net loss
$
(187,043
)
$
(139,934
)
$
(479,449
)
$
(654,588
)
Net loss per share, basic and diluted
$
(1.58
)
$
(1.36
)
$
(4.28
)
$
(6.41
)
Weighted-average shares used in computing
net loss per share, basic and diluted
118,508
102,516
111,988
102,178
Guardant Health, Inc.
Condensed Consolidated Balance
Sheets
(unaudited)
(in thousands, except share
and per share data)
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,133,537
$
141,647
Short-term marketable debt securities
35,097
869,584
Accounts receivable, net
88,783
97,256
Inventory, net
61,948
51,598
Prepaid expenses and other current assets,
net
27,741
31,509
Total current assets
1,347,106
1,191,594
Property and equipment, net
145,096
167,920
Right-of-use assets, net
157,616
174,001
Intangible assets, net
8,979
11,727
Goodwill
3,290
3,290
Other assets, net
124,334
61,453
Total Assets
$
1,786,421
$
1,609,985
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
187,952
$
175,817
Deferred revenue
17,965
17,403
Total current liabilities
205,917
193,220
Convertible senior notes, net
1,139,966
1,137,391
Long-term operating lease liabilities
185,848
210,015
Other long-term liabilities
96,006
9,179
Total Liabilities
1,627,737
1,549,805
Stockholders’ equity:
Common stock, par value of $0.00001 per
share; 350,000,000 shares authorized as of December 31, 2023 and
December 31, 2022; 121,629,861 and 102,619,383 shares issued and
outstanding as of December 31, 2023 and December 31, 2022,
respectively
1
1
Additional paid-in capital
2,304,220
1,742,114
Accumulated other comprehensive loss
(3,675
)
(19,522
)
Accumulated deficit
(2,141,862
)
(1,662,413
)
Total Stockholders’ Equity
158,684
60,180
Total Liabilities and Stockholders’
Equity
$
1,786,421
$
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 December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
GAAP cost of precision oncology
testing
$
57,417
$
43,706
$
205,528
$
148,199
Amortization of intangible assets
(151
)
(351
)
(599
)
(933
)
Stock-based compensation expense and
related employer payroll tax payments
(1,164
)
(1,793
)
(4,727
)
(5,575
)
Non-GAAP cost of precision oncology
testing
$
56,102
$
41,562
$
200,202
$
141,691
GAAP cost of development services and
other
$
5,100
$
3,415
$
21,524
$
8,126
Amortization of intangible assets
(201
)
—
(804
)
—
Stock-based compensation expense and
related employer payroll tax payments
(466
)
—
(1,857
)
—
Non-GAAP cost of development services
and other
$
4,433
$
3,415
$
18,863
$
8,126
GAAP gross profit
$
92,537
$
79,770
$
336,896
$
293,213
Amortization of intangible assets
352
351
1,403
933
Stock-based compensation expense and
related employer payroll tax payments
1,630
1,793
6,584
5,575
Non-GAAP gross profit
$
94,519
$
81,914
$
344,883
$
299,721
GAAP cost of screening
$
3,453
$
2,017
$
13,476
$
2,017
Amortization of intangible assets
(201
)
—
(804
)
—
Stock-based compensation expense and
related employer payroll tax payments
(466
)
—
(1,857
)
—
Non-GAAP cost of screening
$
2,786
$
2,017
$
10,815
$
2,017
Non-GAAP gross profit excluding cost of
screening
$
97,305
$
83,931
$
355,698
$
301,738
GAAP research and development
expense
$
89,856
$
106,578
$
367,194
$
373,807
Stock-based compensation expense and
related employer payroll tax payments
(9,409
)
(8,071
)
(35,286
)
(26,928
)
Contingent consideration
(450
)
(2,577
)
(2,082
)
(5,229
)
Non-GAAP research and development
expense
$
79,997
$
95,930
$
329,826
$
341,650
GAAP sales and marketing
expense
$
79,127
$
81,423
$
295,227
$
299,828
Amortization of intangible assets
—
—
—
(201
)
Stock-based compensation expense and
related employer payroll tax payments
(6,438
)
(7,399
)
(25,095
)
(25,666
)
Non-GAAP sales and marketing
expense
$
72,689
$
74,024
$
270,132
$
273,961
GAAP general and administrative
expense
$
37,665
$
37,888
$
155,800
$
163,956
Amortization of intangible assets
(339
)
(339
)
(1,345
)
(1,346
)
Stock-based compensation expense and
related employer payroll tax payments
(7,081
)
(6,240
)
(25,098
)
(37,282
)
Contingent consideration
120
(110
)
(110
)
(4,305
)
Non-GAAP general and administrative
expense
$
30,365
$
31,199
$
129,247
$
121,023
GAAP other operating expense
$
83,400
$
—
$
83,400
$
—
Non-recurring other operating expense
(83,400
)
—
(83,400
)
—
Non-GAAP other operating
expense
$
—
$
—
$
—
$
—
GAAP loss from operations
$
(197,511
)
$
(146,119
)
$
(564,725
)
$
(544,378
)
Amortization of intangible assets
691
690
2,748
2,480
Stock-based compensation expense and
related employer payroll tax payments
24,558
23,503
92,063
95,451
Contingent consideration
330
2,687
2,192
9,534
Non-recurring other operating expense
83,400
—
83,400
—
Non-GAAP loss from operations
$
(88,532
)
$
(119,239
)
$
(384,322
)
$
(436,913
)
GAAP net loss
$
(187,043
)
$
(139,934
)
$
(479,449
)
$
(654,588
)
Amortization of intangible assets
691
690
2,748
2,480
Stock-based compensation expense and
related employer payroll tax payments
24,558
23,503
92,063
95,451
Contingent consideration
330
2,687
2,192
9,534
Non-recurring other operating expense
83,400
—
83,400
—
Unrealized losses (gains) on marketable
equity securities
4,803
(5,437
)
(79,710
)
7,793
Impairment of non-marketable equity
securities and other related assets
—
—
29,054
5,261
Fair value adjustments of noncontrolling
interest liability
—
—
—
99,785
Non-recurring other income
(2,631
)
(1,100
)
(2,631
)
(1,100
)
Non-GAAP net loss
$
(75,892
)
$
(119,591
)
$
(352,333
)
$
(435,384
)
GAAP net loss per share, basic and
diluted
$
(1.58
)
$
(1.36
)
$
(4.28
)
$
(6.41
)
Non-GAAP net loss per share, basic and
diluted
$
(0.64
)
$
(1.17
)
$
(3.15
)
$
(4.26
)
Weighted-average shares used in
computing GAAP and Non-GAAP net loss per share, basic and
diluted
118,508
102,516
111,988
102,178
Guardant Health, Inc.
Reconciliation of GAAP Net
Loss to Adjusted EBITDA
(unaudited)
(in thousands)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
GAAP net loss
$
(187,043
)
$
(139,934
)
$
(479,449
)
$
(654,588
)
Interest income
(13,888
)
(2,150
)
(35,365
)
(6,069
)
Interest expense
645
644
2,578
2,577
Other expense (income), net
3,316
(5,281
)
(53,174
)
12,778
(Benefit from) provision for income
taxes
(541
)
602
685
1,139
Depreciation and amortization
10,868
10,169
42,881
35,962
Stock-based compensation expense and
related employer payroll tax payments
24,558
23,503
92,063
95,451
Contingent consideration
330
2,687
2,192
9,534
Non-recurring other operating expense
83,400
—
83,400
—
Fair value adjustments of noncontrolling
interest liability
—
—
—
99,785
Adjusted EBITDA
$
(78,355
)
$
(109,760
)
$
(344,189
)
$
(403,431
)
Reconciliation of Free Cash
Flow to Net Cash Used in Operating Activities
(unaudited)
(in thousands)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Net cash used in operating activities
$
(78,728
)
$
(90,749
)
$
(324,975
)
$
(309,463
)
Purchase of property and equipment
(4,077
)
(10,001
)
(20,486
)
(77,461
)
Free cash flow
$
(82,805
)
$
(100,750
)
$
(345,461
)
$
(386,924
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221850021/en/
Investor Contact:
investors@guardanthealth.com
Media Contact: Melissa
Marasco press@guardanthealth.com +1 650-647-3711
Guardant Health (NASDAQ:GH)
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Guardant Health (NASDAQ:GH)
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