GeneDx Holdings Corp (WGS) Q3 2024 Earnings Call Highlights: Record Revenue Growth and First ...

GuruFocus News
4 min read

In This Article:

  • Revenue: $76.6 million in Q3 2024, a 52% increase year-over-year and 11% sequentially.

  • Exome and Genome Revenue: $60 million, a 77% year-over-year increase and 18% sequentially.

  • Gross Margin: 64%, up from 48% a year ago and 62% last quarter.

  • Adjusted Gross Profit: $49.3 million, up 103% year-over-year and 16% sequentially.

  • Exome and Genome Test Volume: Over 19,000 tests, up 46% year-over-year and 7% sequentially.

  • Average Reimbursement Rate: Approximately $3,100, up from $2,800 last quarter and $2,600 a year ago.

  • Adjusted Operating Expense: $46.6 million for Q3 2024.

  • Adjusted Net Income: $1.2 million, marking the first positive quarter since inception.

  • Net Cash Burn: $5 million, an 88% improvement year-over-year and 17% sequentially.

  • Cash and Equivalents: $117.4 million as of September 30, 2024.

  • Full Year Revenue Guidance: Raised to between $284 million and $290 million.

  • Full Year Gross Margin Guidance: Raised to 62%.

  • Full Year Net Cash Burn Guidance: Improved to $60 million to $65 million.

Release Date: October 29, 2024

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

Positive Points

  • GeneDx Holdings Corp (NASDAQ:WGS) achieved profitability in the third quarter of 2024, marking a significant milestone for the company.

  • The company reported a 52% increase in revenues from continuing operations compared to Q3 2023, reaching $76.6 million.

  • Exome and genome revenues grew 77% year over year, contributing $60 million this quarter.

  • GeneDx has expanded its gross margins to 64%, up from 48% a year ago, benefiting from better average reimbursement rates and lower cost per test.

  • The company has sequenced over 700,000 clinical exomes and genomes, with over 100,000 completed in the last six months, demonstrating strong growth in testing volume.

Negative Points

  • Despite strong growth, GeneDx remains only 12% penetrated among pediatric neurologists, indicating a significant untapped market.

  • The company faces challenges in expanding coverage for exome and genome testing, with state-by-state Medicaid policy changes being slow and inconsistent.

  • GeneDx's guidance for the fourth quarter is cautious due to potential impacts from weather events and possible strategic decisions regarding non-exome and non-genome tests.

  • The company is still in the early stages of penetrating the outpatient specialist market, indicating that significant growth efforts are still required.

  • There is a long-term challenge in achieving broader adoption of genomic newborn screening, with a five-plus year timeframe anticipated for meaningful uptake.

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