Exact Sciences Announces Fourth Quarter 2023 Results
Reports record revenue, generates positive free cash flow, expects 2024 revenue of
Fourth quarter and 2023 highlights
-
Total fourth quarter revenue of
$647 million , an increase of 17%, or 18% on a core revenue basis, with Screening revenue of$487 million and Precision Oncology revenue of$160 million -
Total 2023 revenue of
$2.50 billion , an increase of 20%, or 24% on a core revenue basis, with Screening revenue of$1.865 billion and Precision Oncology revenue of$629 million -
Fourth quarter cash provided by operating activities was
$70 million and free cash flow was$35 million
“The Exact Sciences team advanced our mission to help eradicate cancer by testing a record number of patients with Cologuard® and Oncotype DX® in the fourth quarter, leading to strong financial results,” said
Fourth quarter 2023 financial results
For the three-month period ended
-
Total revenue was
$646.9 million , an increase of 17 percent, or 18 percent on a core revenue basis -
Screening revenue was
$486.7 million , an increase of 21 percent -
Precision Oncology revenue was
$160.2 million , an increase of 12 percent, or 11 percent on a core revenue basis - Gross margin including amortization of acquired intangible assets was 70 percent, and non-GAAP gross margin excluding amortization of acquired intangible assets was 73 percent
-
Net loss was
$49.8 million , or$0.27 per share, compared to a net loss of$127.7 million , or$0.72 per share -
EBITDA was
$11.7 million and adjusted EBITDA was$49.7 million -
Cash provided by operating activities was
$69.5 million and free cash flow was$34.6 million -
Cash, cash equivalents, and marketable securities were
$777.6 million at the end of the quarter
Screening primarily includes laboratory service revenue from Cologuard tests and PreventionGenetics. Precision Oncology includes laboratory service revenue from global Oncotype DX® and therapy selection tests.
2024 revenue outlook
The company anticipates revenue of
-
Screening revenue of
$2.155-$2.175 billion , and -
Precision Oncology revenue of
$655-$675 million
Non-GAAP disclosure
In addition to the company's financial results determined in accordance with
Fourth quarter conference call & webcast
Company management will host a conference call and webcast on
About Cologuard
The Cologuard test was approved by the FDA in
The Cologuard test result should be interpreted with caution. A positive test result does not confirm the presence of cancer. Patients with a positive test result should be referred for colonoscopy. A negative test result does not confirm the absence of cancer. Patients with a negative test result should discuss with their doctor when they need to be tested again. Medicare and most major insurers cover the Cologuard test. For more information about the Cologuard test, visit cologuardtest.com. Rx only.
About Exact Sciences’ Precision Oncology portfolio
Exact Sciences’ Precision Oncology portfolio delivers actionable genomic insights to inform prognosis and cancer treatment after a diagnosis. In breast cancer, the Oncotype DX Breast Recurrence Score® test is the only test shown to predict the likelihood of chemotherapy benefit as well as recurrence in invasive breast cancer. The Oncotype DX test is recognized as the standard of care and is included in all major breast cancer treatment guidelines. The OncoExTra™ test applies comprehensive tumor profiling, utilizing whole exome and whole transcriptome sequencing, to aid in therapy selection for patients with advanced, metastatic, refractory, relapsed, or recurrent cancer. With an extensive panel of approximately 20,000 genes and 169 introns, the OncoExTra test is one of the most comprehensive genomic (DNA) and transcriptomic (RNA) panels available today.
About PreventionGenetics
Founded in 2004 and located in
About
A leading provider of cancer screening and diagnostic tests,
Forward-Looking Statements
This news release contains forward-looking statements concerning our expectations, anticipations, intentions, beliefs or strategies regarding the future. These forward-looking statements are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties that could cause actual results, conditions and events to differ materially from those anticipated. Therefore, you should not place undue reliance on forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expected future operating results; expectations for development of new or improved products and services and their impacts on patients; our strategies, positioning, resources, capabilities and expectations for future events or performance; and the anticipated benefits of our acquisitions, including estimated synergies and other financial impacts.
Important factors that could cause actual results, conditions and events to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to successfully and profitably market our products and services; the acceptance of our products and services by patients and healthcare providers; our ability to meet demand for our products and services; our reliance upon certain suppliers, including suppliers that are the sole source of certain supplies and products used in our test and operations; approval and maintenance of adequate reimbursement rates for our products and services within and outside the
Selected Unaudited Financial Information Condensed Consolidated Statements of Operations (Amounts in thousands, except per share data) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
646,885 |
|
|
$ |
552,995 |
|
|
$ |
2,499,766 |
|
|
$ |
2,084,279 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Cost of sales (exclusive of amortization of acquired intangible assets) |
|
171,865 |
|
|
|
147,152 |
|
|
|
654,248 |
|
|
|
574,394 |
|
Research and development |
|
114,922 |
|
|
|
94,274 |
|
|
|
425,882 |
|
|
|
393,418 |
|
Sales and marketing |
|
190,477 |
|
|
|
210,211 |
|
|
|
727,090 |
|
|
|
846,011 |
|
General and administrative |
|
220,551 |
|
|
|
193,894 |
|
|
|
893,204 |
|
|
|
737,304 |
|
Amortization of acquired intangible assets |
|
23,311 |
|
|
|
22,914 |
|
|
|
92,160 |
|
|
|
97,450 |
|
Impairment of long-lived assets |
|
— |
|
|
|
3,432 |
|
|
|
621 |
|
|
|
15,969 |
|
Total operating expenses |
|
721,126 |
|
|
|
671,877 |
|
|
|
2,793,205 |
|
|
|
2,664,546 |
|
|
|
|
|
|
|
|
|
||||||||
Other operating income (loss) |
|
6,400 |
|
|
|
— |
|
|
|
78,427 |
|
|
|
(13,244 |
) |
Loss from operations |
|
(67,841 |
) |
|
|
(118,882 |
) |
|
|
(215,012 |
) |
|
|
(593,511 |
) |
|
|
|
|
|
|
|
|
||||||||
Other income (expense) |
|
|
|
|
|
|
|
||||||||
Investment income (loss), net |
|
25,330 |
|
|
|
(5,635 |
) |
|
|
32,713 |
|
|
|
(19,425 |
) |
Interest expense |
|
(7,865 |
) |
|
|
(5,410 |
) |
|
|
(19,447 |
) |
|
|
(19,634 |
) |
Total other income (expense) |
|
17,465 |
|
|
|
(11,045 |
) |
|
|
13,266 |
|
|
|
(39,059 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss before tax |
|
(50,376 |
) |
|
|
(129,927 |
) |
|
|
(201,746 |
) |
|
|
(632,570 |
) |
|
|
|
|
|
|
|
|
||||||||
Income tax benefit (expense) |
|
610 |
|
|
|
2,182 |
|
|
|
(2,403 |
) |
|
|
9,064 |
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
$ |
(49,766 |
) |
|
$ |
(127,745 |
) |
|
$ |
(204,149 |
) |
|
$ |
(623,506 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per share—basic and diluted |
$ |
(0.27 |
) |
|
$ |
(0.72 |
) |
|
$ |
(1.13 |
) |
|
$ |
(3.54 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding—basic and diluted |
|
181,114 |
|
|
|
177,584 |
|
|
|
180,144 |
|
|
|
176,351 |
|
Selected Unaudited Financial Information Condensed Consolidated Balance Sheets (Amounts in thousands) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
605,378 |
|
$ |
242,493 |
||
Marketable securities |
|
172,266 |
|
|
389,564 |
||
Accounts receivable, net |
|
203,623 |
|
|
158,043 |
||
Inventory |
|
127,475 |
|
|
118,259 |
||
Prepaid expenses and other current assets |
|
85,627 |
|
|
73,898 |
||
Property, plant and equipment, net |
|
698,354 |
|
|
684,756 |
||
Operating lease right-of-use assets |
|
143,708 |
|
|
167,003 |
||
|
|
2,367,120 |
|
|
2,346,040 |
||
Intangible assets, net |
|
1,890,396 |
|
|
1,956,240 |
||
Other long-term assets, net |
|
177,387 |
|
|
90,577 |
||
Total assets |
$ |
6,471,334 |
|
$ |
6,226,873 |
||
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities |
$ |
514,701 |
|
$ |
412,747 |
||
Convertible notes, net |
|
2,314,276 |
|
|
2,186,106 |
||
Long-term debt, less current portion |
|
— |
|
|
50,000 |
||
Other long-term liabilities |
|
335,982 |
|
|
352,459 |
||
Operating lease liabilities, less current portion |
|
161,070 |
|
|
182,399 |
||
Total stockholders’ equity |
|
3,145,305 |
|
|
3,043,162 |
||
Total liabilities and stockholders’ equity |
$ |
6,471,334 |
|
$ |
6,226,873 |
Selected Unaudited Financial Information Reconciliation of Core Revenue (Amounts in thousands) |
||||||||||||||||||||||
|
|
GAAP |
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended |
|
|
|
|
|
|
||||||||||||||
|
|
2023 |
|
2022 |
|
% Change |
|
|
|
|
|
|
||||||||||
Screening |
|
$ |
486,706 |
|
|
$ |
403,528 |
|
|
21 |
% |
|
|
|
|
|
|
|||||
Precision Oncology |
|
|
160,179 |
|
|
|
143,430 |
|
|
12 |
% |
|
|
|
|
|
|
|||||
COVID-19 Testing |
|
|
— |
|
|
|
6,037 |
|
|
(100 |
)% |
|
|
|
|
|
|
|||||
Total |
|
$ |
646,885 |
|
|
$ |
552,995 |
|
|
17 |
% |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Non-GAAP |
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended |
|
|
||||||||||||||||||
|
|
2023 (1) |
|
2022 (1) |
|
% Change |
|
Foreign Currency Impact (2) |
|
Core Revenue (3) |
|
% Change (3) |
||||||||||
Screening |
|
$ |
486,706 |
|
|
$ |
403,528 |
|
|
21 |
% |
|
$ |
— |
|
|
$ |
486,706 |
|
21 |
% |
|
Precision Oncology |
|
|
157,223 |
|
|
|
140,714 |
|
|
12 |
% |
|
|
(620 |
) |
|
|
156,603 |
|
11 |
% |
|
Total |
|
$ |
643,929 |
|
|
$ |
544,242 |
|
|
18 |
% |
|
$ |
(620 |
) |
|
$ |
643,309 |
|
18 |
% |
|
|
GAAP |
|
|
|
|
|
|
||||||||||||||
|
|
Twelve Months Ended |
|
|
|
|
|
|
||||||||||||||
|
|
2023 |
|
2022 |
|
% Change |
|
|
|
|
|
|
||||||||||
Screening |
|
$ |
1,864,701 |
|
|
$ |
1,424,703 |
|
|
31 |
% |
|
|
|
|
|
|
|||||
Precision Oncology |
|
|
629,110 |
|
|
|
601,488 |
|
|
5 |
% |
|
|
|
|
|
|
|||||
COVID-19 Testing |
|
|
5,955 |
|
|
|
58,088 |
|
|
(90 |
)% |
|
|
|
|
|
|
|||||
Total |
|
$ |
2,499,766 |
|
|
$ |
2,084,279 |
|
|
20 |
% |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Non-GAAP |
|
|
|
|
|
|
||||||||||||||
|
|
Twelve Months Ended |
|
|
||||||||||||||||||
|
|
2023 (1) |
|
2022 (1) |
|
% Change |
|
Foreign Currency Impact (2) |
|
Core Revenue (3) |
|
% Change (3) |
||||||||||
Screening |
|
$ |
1,864,701 |
|
|
$ |
1,424,703 |
|
|
31 |
% |
|
$ |
— |
|
|
$ |
1,864,701 |
|
31 |
% |
|
Precision Oncology |
|
|
619,948 |
|
|
|
574,012 |
|
|
8 |
% |
|
|
(1,228 |
) |
|
|
618,720 |
|
8 |
% |
|
Total |
|
$ |
2,484,649 |
|
|
$ |
1,998,715 |
|
|
24 |
% |
|
$ |
(1,228 |
) |
|
$ |
2,483,421 |
|
24 |
% |
__________________
(1) Excludes revenue from COVID-19 testing, the divested Oncotype DX Genomic Prostate test, and the Resolution Bioscience acquisition. |
|
(2) Foreign currency impact is calculating the change in current period non- |
|
(3) Excludes revenue from COVID-19 testing, the divested Oncotype DX Genomic Prostate Score test, the impact of foreign currency exchange rate fluctuations, and the Resolution Bioscience acquisition. |
Selected Unaudited Financial Information Non-GAAP Gross Profit and Non-GAAP Gross Margin Reconciliations (Amounts in thousands) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
646,885 |
|
|
$ |
552,995 |
|
|
$ |
2,499,766 |
|
|
$ |
2,084,279 |
|
Cost of sales (exclusive of amortization of acquired intangible assets) |
|
171,865 |
|
|
|
147,152 |
|
|
|
654,248 |
|
|
|
574,394 |
|
Amortization of acquired intangible assets (1) |
|
21,100 |
|
|
|
20,717 |
|
|
|
83,316 |
|
|
|
86,967 |
|
Gross profit |
$ |
453,920 |
|
|
$ |
385,126 |
|
|
$ |
1,762,202 |
|
|
$ |
1,422,918 |
|
Gross margin |
|
70 |
% |
|
|
70 |
% |
|
|
70 |
% |
|
|
68 |
% |
|
|
|
|
|
|
|
|
||||||||
Amortization of acquired intangible assets (1) |
|
21,100 |
|
|
|
20,717 |
|
|
|
83,316 |
|
|
|
86,967 |
|
Non-GAAP gross profit |
$ |
475,020 |
|
|
$ |
405,843 |
|
|
$ |
1,845,518 |
|
|
$ |
1,509,885 |
|
Non-GAAP gross margin |
|
73 |
% |
|
|
73 |
% |
|
|
74 |
% |
|
|
72 |
% |
__________________
(1) Includes only amortization of intangible assets identified as developed technology assets through purchase accounting transactions, which otherwise would have been allocated to cost of sales. |
Selected Unaudited Financial Information EBITDA and Adjusted EBITDA Reconciliations (Amounts in thousands) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(49,766 |
) |
|
$ |
(127,745 |
) |
|
$ |
(204,149 |
) |
|
$ |
(623,506 |
) |
Interest expense (1) |
|
7,865 |
|
|
|
5,410 |
|
|
|
19,447 |
|
|
|
19,634 |
|
Depreciation and amortization |
|
54,172 |
|
|
|
49,481 |
|
|
|
206,608 |
|
|
|
197,558 |
|
Income tax (benefit) expense |
|
(610 |
) |
|
|
(2,182 |
) |
|
|
2,403 |
|
|
|
(9,064 |
) |
EBITDA |
$ |
11,661 |
|
|
$ |
(75,036 |
) |
|
$ |
24,309 |
|
|
$ |
(415,378 |
) |
Stock-based compensation (2) |
|
66,466 |
|
|
|
50,789 |
|
|
|
271,218 |
|
|
|
239,092 |
|
Investment loss (income) |
|
(25,330 |
) |
|
|
5,635 |
|
|
|
(32,713 |
) |
|
|
19,425 |
|
Acquisition and integration costs (3) |
|
(3,616 |
) |
|
|
1,175 |
|
|
|
(11,762 |
) |
|
|
(53,297 |
) |
Reduction-in-force severance (4) |
|
— |
|
|
|
18,886 |
|
|
|
907 |
|
|
|
33,499 |
|
Impairment of long-lived assets (5) |
|
— |
|
|
|
3,432 |
|
|
|
621 |
|
|
|
15,969 |
|
(Gain) loss on sale of asset and divestiture related costs (6) |
|
(4,311 |
) |
|
|
53 |
|
|
|
(74,833 |
) |
|
|
17,309 |
|
Legal settlement (7) |
|
— |
|
|
|
— |
|
|
|
36,186 |
|
|
|
— |
|
Restructuring (8) |
|
4,837 |
|
|
|
— |
|
|
|
4,837 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
49,707 |
|
|
$ |
4,934 |
|
|
$ |
218,770 |
|
|
$ |
(143,381 |
) |
__________________
(1) Interest expense for the twelve months ended |
|
(2) Represents stock-based compensation expense and 401(k) match expense. The Company matches a portion of |
|
(3) Represents acquisition and related integration costs incurred as a result of the Company's business combinations. Acquisition costs represent legal and professional fees incurred to execute the transaction. Acquisition costs for the three and twelve months ended |
|
(4) The Company took proactive measures to address the impact of inflation and market volatility, and also simplify the organizational structure and prioritize programs that will have the greatest impact on improving cancer care. This resulted in a reduction of the Company's workforce in the second and fourth quarters of 2022, and international operations were impacted in the first quarter of 2023. The adjustment to EBITDA represents personnel expenses incurred as a result of these proactive measures, a majority of which includes severance and accelerated stock-based compensation expense. |
|
(5) Represents impairment charges on the Company’s long-lived assets. For the twelve months ended |
|
(6) Relates to the sale of the intellectual property and know-how related to the Oncotype DX Genomic Prostate Score® ("GPS") test to MDxHealth SA ("MDxHealth") in |
|
(7) The Company reached settlements with the counterparties related to the Medicare Date of Service Rule Investigation ("DOS Rule Matter") and the Federal Anti-Kickback Statute and False Claims Act qui tam lawsuit during the third quarter of 2023. The Company previously accrued |
|
(8) Includes costs associated with the consolidation of operations related to the closure of one of the Company's domestic laboratory facilities. For the three and twelve months ended |
Selected Unaudited Financial Information Condensed Consolidated Statements of Cash Flows and Reconciliation of Free Cash Flow (Amounts in thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by (used in) operating activities |
|
$ |
69,549 |
|
|
$ |
52,037 |
|
|
$ |
156,119 |
|
|
$ |
(223,559 |
) |
Net cash provided by (used in) investing activities |
|
|
(66,767 |
) |
|
|
(58,159 |
) |
|
|
49,679 |
|
|
|
74,066 |
|
Net cash provided by financing activities |
|
|
10,037 |
|
|
|
10,103 |
|
|
|
159,766 |
|
|
|
76,485 |
|
Effects of exchange rate changes on cash and cash equivalents |
|
|
1,947 |
|
|
|
3,206 |
|
|
|
1,321 |
|
|
|
30 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
14,766 |
|
|
|
7,187 |
|
|
|
366,885 |
|
|
|
(72,978 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
594,909 |
|
|
|
235,603 |
|
|
|
242,790 |
|
|
|
315,768 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
609,675 |
|
|
$ |
242,790 |
|
|
$ |
609,675 |
|
|
$ |
242,790 |
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of free cash flow: |
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities |
|
$ |
69,549 |
|
|
$ |
52,037 |
|
|
$ |
156,119 |
|
|
$ |
(223,559 |
) |
Purchases of property, plant and equipment |
|
|
(34,922 |
) |
|
|
(72,876 |
) |
|
|
(124,190 |
) |
|
|
(214,462 |
) |
Free cash flow |
|
$ |
34,627 |
|
|
$ |
(20,839 |
) |
|
$ |
31,929 |
|
|
$ |
(438,021 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221510454/en/
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