Original from: Guardant Health
Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology company, today reported financial results for the quarter and full year ended December 31, 2024.
Fourth Quarter 2024 Financial Highlights
For the three-month period ended December 31, 2024, as compared to the same period of 2023:
· Total revenue of $201.8 million, an increase of 30%
· Reported approximately 57,300 oncology clinical tests (excluding Shield) and approximately 11,050 biopharma tests, an increase of 24% and 16%, respectively
· Reported approximately 6,400 Shield screening tests, with revenue of $4.1 million
Full Year 2024 Financial Highlights
For the twelve-month period ended December 31, 2024, as compared to the same period of 2023:
· Total revenue of $739.0 million, an increase of 31%
· Reported approximately 206,700 oncology clinical tests (excluding Shield) and approximately 40,500 biopharma tests, an increase of 20% and 35%, respectively
· Improved full year 2024 free cash flow burn to $275 million, compared to $345 million for the full year 2023
Recent Operating Highlights
· Received Medicare coverage for Guardant Reveal on Smart Liquid Biopsy platform for colorectal cancer surveillance
· Shield selected by NIH for inclusion in the Vanguard multi cancer detection study based on strong feasibility data in predicting presence of ten cancer types and cancer site of origin
· Shield selected for a government funded population scale screening program in Abu Dhabi and surrounding regions
· Entered into a collaboration with ConcertAI to create a differentiated data-as-a-service platform that integrates comprehensive EMR records with both genomic and epigenomic tumor profiling data to accelerate cancer therapy research and development
· Entered into a strategic collaboration with Boehringer Ingelheim to develop a companion diagnostic for zongertinib to detect specific mutations in non-small cell lung cancer
· Completed a convertible debt exchange to extend the maturity on $600 million of outstanding debt
“We fired on all cylinders throughout 2024, delivering remarkable revenue growth and upgrading our products to our smart liquid biopsy platform,” said Helmy Eltoukhy, co-founder and co-CEO. “Last month, we were pleased to receive Medicare reimbursement for Guardant Reveal in the CRC surveillance setting, which was an important milestone for our MRD business. We are entering 2025 with a strong oncology product portfolio and anticipate volume acceleration across all our products this year.”
“We made strong progress with Shield during Q4, our first full quarter since commercial launch,” said AmirAli Talasaz, co-founder and co-CEO. “We screened thousands of patients with our simple blood test and are looking forward to scaling our impact quickly. Beyond CRC, the selection of Shield for the NIH Vanguard study underscores the strength of our platform and establishes our leadership in the field of multi cancer detection. With a robust pipeline of catalysts in front of us, we are excited to execute on the opportunities ahead in 2025.”
Fourth Quarter 2024 Financial Results
Revenue was $201.8 million for the fourth quarter of 2024, a 30% increase from $155.1 million for the corresponding prior year period. Precision oncology revenue grew 30%, to $184.6 million for the fourth quarter of 2024, from $142.2 million for the corresponding prior year period, driven by an increase in the volume of clinical tests (i.e., Guardant360, TissueNext, Response, and Reveal tests) and biopharma tests, which grew 24% and 16%, 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 Medicare reimbursement for our Guardant360 LDT test to $5,000, effective January 1, 2024; and an increase in both Medicare Advantage and commercial payer reimbursement. Development services and other revenue was $17.2 million for the fourth quarter of 2024, compared to $12.9 million for the corresponding prior year period. Other revenue includes $4.1 million derived from approximately 6,400 Shield screening tests reported in the fourth quarter of 2024.
Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $124.2 million for the fourth quarter of 2024, an increase of $31.7 million from $92.5 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 62%, as compared to 60% for the corresponding prior year period. Precision oncology gross margin was 62% in the fourth quarter of 2024, as compared to 60% in the prior year period. Development services and other gross margin was 53% in the fourth quarter of 2024, as compared to 60% in the prior year period.
Non-GAAP gross profit was $126.4 million for the fourth quarter of 2024, an increase of $31.8 million, from $94.5 million for the corresponding prior year period. Non-GAAP gross margin was 63% for the fourth quarter of 2024, as compared to 61% for the corresponding prior year period.
Non-GAAP gross profit excluding screening was $126.3 million for the fourth quarter of 2024, an increase of $29.0 million, from $97.3 million for the corresponding prior year period. Non-GAAP gross margin excluding screening was 64% for the fourth quarter of 2024, as compared to 63% for the corresponding prior year period.
Operating expenses (research and development expense, sales and marketing expense, and general and administrative expense) were $250.2 million for the fourth quarter of 2024, as compared to $206.6 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 same period of 2024. Non-GAAP operating expenses were $214.7 million for the fourth quarter of 2024, as compared to $183.1 million for the corresponding prior year period.
Net loss was $111.0 million for the fourth quarter of 2024, as compared to $187.0 million for the corresponding prior year period. Net loss per share was $0.90 for the fourth quarter of 2024, as compared to $1.58 for the corresponding prior year period. The year-over-year improvement in net loss was primarily due to the non-recurring $83.4 million legal accrual recorded in 2023.
Non-GAAP net loss was $77.3 million for the fourth quarter of 2024, as compared to $75.9 million for the corresponding prior year period. Non-GAAP net loss per share was $0.62 for the fourth quarter of 2024, as compared to $0.64 for the corresponding prior year period.
Adjusted EBITDA loss was $78.4 million for the fourth quarter of 2024, as compared to a $78.4 million loss for the corresponding prior year period.
Free cash flow for the fourth quarter of 2024 was $(83.4) million, as compared to $(82.8) million for the corresponding prior year period.
Full Year 2024 Financial Results
Revenue was $739.0 million for 2024, a 31% increase from $563.9 million for the corresponding prior year period. Precision oncology revenue grew 34%, to $687.9 million for 2024, from $514.2 million for the corresponding prior year period, driven by an increase in the volume of clinical tests (i.e., Guardant360, TissueNext, Response, and Reveal tests) and biopharma tests, which grew 20% and 35%, 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 Medicare reimbursement for our Guardant360 LDT test to $5,000, effective January 1, 2024; an increase in both Medicare Advantage and commercial payer reimbursement; and an approximately $22 million non-recurring, out of period revenue upside for 2024 resulting from better than expected cash collections from prior years. Development services and other revenue was $51.1 million for 2024, compared to $49.7 million for the corresponding prior year period. Other revenue includes $5.1 million derived from Shield screening tests reported in 2024 following the FDA approval.
Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $449.2 million for 2024, an increase of $112.3 million from $336.9 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 61%, as compared to 60% for the corresponding prior year period. Precision oncology gross margin was 62% in the year of 2024, as compared to 60% in the prior year period. Development services and other gross margin was 43% in the year of 2024, as compared to 57% in the prior year period.
Non-GAAP gross profit was $459.6 million for 2024, an increase of $114.7 million, from $344.9 million for the corresponding prior year period. Non-GAAP gross margin was 62% for 2024, as compared to 61% for the corresponding prior year period.
Non-GAAP gross profit excluding screening was $466.9 million for 2024, an increase of $111.2 million, from $355.7 million for the corresponding prior year period. Non-GAAP gross margin excluding screening was 64% for 2024, as compared to 63% for the corresponding prior year period.
Operating expenses (research and development expense, sales and marketing expense, and general and administrative expense) were $892.8 million for 2024, as compared to $818.2 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 2024. Non-GAAP operating expenses were $757.3 million for 2024, as compared to $729.2 million for the corresponding prior year period.
Net loss was $436.4 million for 2024, as compared to $479.4 million for the corresponding prior year period. Net loss per share was $3.56 for 2024, as compared to $4.28 for the corresponding prior year period. The year-over-year improvement in net loss was primarily due to the non-recurring $83.4 million legal accrual recorded in 2023, $37.7 million year-over-year improvement in loss from operations, excluding the legal accrual impact, $29.1 million of impairment recorded for our non-marketable equity security investments and other related assets in 2023 and $18.3 million increase in interest income, partially offset by $124.1 million negative change in fair value adjustments recorded for our marketable equity security investment in Lunit, Inc.
Non-GAAP net loss was $247.2 million for 2024, as compared to $352.3 million for the corresponding prior year period. Non-GAAP net loss per share was $2.01 for 2024, as compared to $3.15 for the corresponding prior year period.
Adjusted EBITDA loss was $257.5 million for 2024, as compared to a $344.2 million loss for the corresponding prior year period.
Free cash flow for 2024 was $(274.9) million, as compared to $(345.5) million for the corresponding prior year period.
Cash, cash equivalents, restricted cash and marketable debt securities were $944.2 million as of December 31, 2024. In addition, the aggregate principal amount of the 2027 Convertible Senior Notes (the “2027 Notes”) was $1.15 billion as of December 31, 2024.
In February 2025, Guardant Health entered into privately negotiated exchange agreements with certain holders of the outstanding 0% 2027 Notes, pursuant to which Guardant Health issued $600.0 million aggregate principal amount of 1.25% Convertible Senior Notes due 2031 (the “New Notes”) in exchange for the retirement of $659.3 million aggregate principal amount of the 2027 Notes (the “Transaction”). Total transaction costs related to the issuance of the New Notes were approximately $12.4 million. In connection with the Transaction, Guardant Health repurchased $45.0 million of shares of its common stock from certain participants in the Transaction through a financial intermediary at a price of $46.09 per share, which was the last reported sale price of its common stock on February 6, 2025 (the “Stock Repurchase”). As of December 31, 2024, pro forma for the Transaction and the Stock Repurchase, cash, cash equivalents, restricted cash and marketable debt securities would have been $886.8 million, and the aggregate principal amount of the 2027 Notes would have been $490.7 million, and the aggregate principal amount of the New Notes would have been $600.0 million, respectively.
2025 Guidance
Guardant Health expects full year 2025 revenue to be in the range of $850 to $860 million, representing growth of 15% to 16% compared to full year 2024. Excluding non-recurring, out of period revenue recorded in 2024, this range implies total revenue growth of 19% to 20% in 2025.
Within this revenue range,
· Oncology revenue is expected to grow approximately 15% year over year in 2025. Excluding non-recurring, out of period revenue recorded in 2024, this range implies oncology revenue growth of approximately 20%. Oncology clinical volume is expected to accelerate to approximately 25% growth in 2025 compared to 20% growth in 2024.
· Screening revenue is expected to be in the range of $25 to $30 million, driven by 45,000 to 50,000 Shield test volume.
· Biopharma & data revenue growth is expected to be in the low double-digit range.
Guardant Health expects full year 2025 non-GAAP gross margin to be in the range of 62% to 63%, compared to 62% in 2024. Guardant Health expects total non-GAAP operating expenses to be in the range of $815 to $825 million, representing an 8 to 9% increase compared to 2024, due to the commercial ramp to support Shield while both R&D and G&A are expected to be approximately flat year over year. Guardant Health expects free cash flow burn to be in the range of $225 to $235 million in 2025, an improvement compared to $275 million for the full year 2024. This includes approximately $200 million of screening net cash burn. Guardant Health expects the remainder of the business excluding screening to reach free cash flow breakeven in the fourth quarter of 2025.
China Association of In-vitro Diagnostics
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