• Revenue: $68.9 million in Q2 2024, up 52% year-over-year and 12% sequentially.

• Exome and Genome Revenue: $50 million, up 77% year-over-year and 15% sequentially.

• Adjusted Gross Profit: $42.8 million, up 153% year-over-year and 13% sequentially.

• Adjusted Gross Margin: 62%, up from 37% a year ago and 61% in the previous quarter.

• Test Volume: Over 18,000 tests, up 52% year-over-year and 9% sequentially.

• Average Reimbursement Rate: Approximately $2,800 for exome and genome tests, up from $2,600 last quarter.

• Adjusted Operating Expense: $45 million, reduced by 24% year-over-year and 1% sequentially.

• Adjusted Net Loss: $2.7 million, improved by 93% year-over-year and 68% sequentially.

• Net Cash Burn: $6.1 million, improved by 89% year-over-year and 65% sequentially.

• Cash and Equivalents: $108 million as of June 30, 2024.

• Revenue Guidance: Raised to $255 million to $265 million for full year 2024.

• Adjusted Gross Margin Guidance: 60% or higher for full year 2024.

• Net Cash Burn Guidance: $65 million to $75 million for full year 2024.

• Warning! GuruFocus has detected 5 Warning Signs with WGS.

Release Date: July 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• GeneDx Holdings Corp (NASDAQ:WGS) reported a significant revenue increase of 52% year-over-year, reaching $68.9 million in Q2 2024.

• The company achieved a gross margin expansion to 62%, up from 37% a year ago, indicating improved operational efficiency.

• GeneDx has successfully reduced its cash burn for nine consecutive quarters, demonstrating strong financial discipline.

• The company raised its full-year revenue guidance to $255 million to $265 million, reflecting confidence in continued growth.

• GeneDx's partnership with Epic aims to integrate health system workflows, potentially enhancing provider and patient experiences.

Negative Points

• GeneDx incurred a one-time litigation charge of approximately $13 million, impacting its financial results.

• Despite progress, the company still faces a denial rate of nearly 50% for insurance claims, indicating challenges in reimbursement processes.

• The transition to whole genome sequencing is still in its early stages, with a small percentage of current business attributed to it.

• The company anticipates a lighter Q3 due to seasonality, which could affect sequential revenue growth.

• GeneDx is still not profitable, with an adjusted net loss of $2.7 million in Q2 2024, although it is close to breakeven.

Q & A Highlights

Q: Can you discuss the momentum and spending on biopharma partnerships, and how much of it is data versus new program additions? A: Katherine Stueland, President and CEO: We added several new programs this quarter, including repeat business from existing partners. These programs connect biopharma partners with providers for clinical trials. We also launched a program for epilepsy exome testing, ensuring no patient faces barriers to testing. This approach is expected to be the most representative commercial strategy for the data business over the next 18 months.