Fulgent Reports Third Quarter 2024 Financial Results
-
Total Revenue of
$71.7 million -
Core Revenue grows 9% year-over-year to
$71.7 million -
Reiterates Full Year 2024 Core Revenue Guidance of
$280 million , Improves Earnings Per Share Guidance for 2024
Third Quarter 2024 Results:
-
Total Revenue of
$71.7 million -
Core Revenue1 grew 9% year-over-year to
$71.7 million -
GAAP loss of
$14.6 million , or ($0.48 ) per share -
Non-GAAP income of
$9.4 million , or$0.31 per share -
Adjusted EBITDA income of
$0.4 million -
Cash, cash equivalents, restricted cash, and investments in marketable securities of
$815.4 million as ofSeptember 30, 2024
| Note: | |
|
1) Core Revenue is revenue calculated in accordance with GAAP minus revenue from COVID-19 testing products and services including COVID-19 NGS testing revenue, each as calculated in accordance with GAAP. |
|
Non-GAAP income (loss), non-GAAP income (loss) per share, adjusted EBITDA income (loss), non-GAAP gross profit and margin, and non-GAAP operating income (loss) and margin, are described below under “Note Regarding Non-GAAP Financial Measures” and are reconciled to the most directly comparable GAAP financial measure, GAAP income (loss), GAAP gross profit and margin, and GAAP operating income (loss) and margin, in the accompanying tables.
Outlook:
For the full year 2024, Fulgent expects:
-
Core Revenue of approximately
$280 million -
GAAP loss improvement from approximately (
$1.95 ) per share to approximately ($1.70 ) per share -
Non-GAAP loss improvement from approximately (
$0.30 ) loss per share to approximately$0.33 income per share -
Cash, cash equivalents, and investments in marketable securities of approximately
$800 million as ofDecember 31, 2024 *
*Cash expenditures may be higher or lower than currently estimated due to a variety of factors and circumstances, including as a result of the Company’s ongoing stock repurchase program or other expenditures outside the ordinary course of business.
Conference Call Information
Fulgent will host a conference call for the investment community today at
Note Regarding Non-GAAP Financial Measures
Certain information set forth in this press release and/or to be discussed on the Company’s earnings call, including non-GAAP income (loss), non-GAAP income (loss) per share, adjusted EBITDA income (loss), non-GAAP gross profit and margin, and non-GAAP operating income (loss) and margin are non-GAAP financial measures. Fulgent believes this information is useful to investors because it provides a basis for measuring the performance of the Company’s business, excluding certain income or expense items that management believes are not directly attributable to the Company’s operating results. Fulgent defines non-GAAP income (loss) as net income (loss) calculated in accordance with accounting principles generally accepted in
About Fulgent
Fulgent is a technology-based company with a well-established laboratory services business and a therapeutic development business. Fulgent’s laboratory services business, which was formerly referred to as the clinical diagnostic business, includes technical laboratory services and professional interpretation of laboratory results by licensed physicians. Fulgent’s therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. The Company aims to transform from a genomic diagnostic business into a fully integrated precision medicine company.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements in this press release include statements about, among other things: future performance; guidance, including guidance regarding expected quarterly and annual financial results, core revenues, GAAP loss, non-GAAP loss, and cash, cash equivalents and investments in marketable securities; evaluations and judgments regarding the stability of certain revenue sources, the Company’s cash position and sufficiency of its resources, momentum, trajectory, vision, future opportunities and future growth of the Company’s testing and laboratory services, technologies and expansion; the Company’s research and development efforts, including any implications that the results of earlier clinical trials will be representative or consistent with later clinical trials, the expected timing of enrollment and regulatory filings for these trials and the availability of data or results of these trials, including any implication that interim or preliminary data will be representative of final data; the Company’s identification and evaluation of opportunities and its ability to capitalize on opportunities, capture market share, or expand its presence in certain markets; and the Company’s ability to continue to grow its business.
Forward-looking statements are statements other than historical facts and relate to future events or circumstances or the Company’s future performance, and they are based on management’s current assumptions, expectations, and beliefs concerning future developments and their potential effect on the Company’s business. These forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking statements. These risks and uncertainties include, among others: the market potential for, and the rate and degree of market adoption of, the Company’s tests; its ability to maintain turnaround times and otherwise keep pace with rapidly changing technology; the Company’s ability to maintain the low internal costs of its business model; the Company’s ability to maintain an acceptable margin; risks related to volatility in the Company’s results, which can fluctuate significantly from period to period; risks associated with the composition of the Company’s customer base, which can fluctuate from period to period and can be comprised of a small number of customers that account for a significant portion of the Company’s revenue; the Company’s level of success in obtaining coverage and adequate reimbursement and collectability levels from third-party payors for its tests and testing services; the Company’s level of success in establishing and obtaining the intended benefits from partnerships, strategic investments, joint ventures, acquisitions, or other relationships; the success of the Company’s development efforts, including the Company’s ability to progress its candidates through clinical trials on the timelines expected; the Company’s compliance with the various evolving and complex laws and regulations applicable to its business and its industry; and the Company’s ability to protect its proprietary technology and intellectual property. As a result of these risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events.
The forward-looking statements made in this press release speak only as of the date of this press release, and the Company assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes in expectations, except as otherwise required by law.
The Company’s reports filed with the
|
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|||||||||
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Condensed Consolidated Balance Sheet Data |
|||||||||
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|
|||||||||
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(in thousands) |
|||||||||
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
|
ASSETS: |
|
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
58,042 |
|
|
|
$ |
97,473 |
|
|
Investments in marketable securities |
|
|
757,259 |
|
|
|
|
750,252 |
|
|
Accounts receivable, net |
|
|
57,315 |
|
|
|
|
51,132 |
|
|
Property, plant, and equipment, net |
|
|
106,810 |
|
|
|
|
83,464 |
|
|
Other assets |
|
|
254,337 |
|
|
|
|
253,007 |
|
|
Total assets |
|
$ |
1,233,763 |
|
|
|
$ |
1,235,328 |
|
|
LIABILITIES & EQUITY: |
|
|
|
|
|
||||
|
Accounts payable, accrued liabilities and other liabilities |
|
$ |
98,865 |
|
|
|
$ |
102,042 |
|
|
Total stockholders’ equity |
|
|
1,134,898 |
|
|
|
|
1,133,286 |
|
|
Total liabilities & equity |
|
$ |
1,233,763 |
|
|
|
$ |
1,235,328 |
|
|
|
||||||||||||||||
|
Condensed Consolidated Statement of Operations Data |
||||||||||||||||
|
Three and Nine Months Ended |
||||||||||||||||
|
(in thousands, except per share data) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
|
Revenue |
$ |
71,743 |
|
$ |
84,687 |
|
$ |
207,256 |
|
$ |
218,708 |
|
||||
|
Cost of revenue (1) |
|
44,972 |
|
|
44,843 |
|
|
131,890 |
|
|
139,481 |
|
||||
|
Gross profit |
|
26,771 |
|
|
39,844 |
|
|
75,366 |
|
|
79,227 |
|
||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Research and development (1) |
|
11,783 |
|
|
10,014 |
|
|
36,703 |
|
|
29,488 |
|
||||
|
Selling and marketing (1) |
|
9,124 |
|
|
10,161 |
|
|
26,708 |
|
|
30,967 |
|
||||
|
General and administrative (1) |
|
20,950 |
|
|
17,498 |
|
|
63,765 |
|
|
57,293 |
|
||||
|
Amortization of intangible assets |
|
1,993 |
|
|
1,957 |
|
|
5,973 |
|
|
5,887 |
|
||||
|
Total operating expenses |
|
43,850 |
|
|
39,630 |
|
|
133,149 |
|
|
123,635 |
|
||||
|
Operating (loss) income |
|
(17,079 |
) |
|
214 |
|
|
(57,783 |
) |
|
(44,408 |
) |
||||
|
Interest income |
|
8,090 |
|
|
6,472 |
|
|
23,181 |
|
|
15,802 |
|
||||
|
Interest expense |
|
(14 |
) |
|
(70 |
) |
|
210 |
|
|
(625 |
) |
||||
|
Impairment of available-for-sale debt securities |
|
(10,073 |
) |
|
— |
|
|
(10,073 |
) |
|
— |
|
||||
|
Other income, net |
|
544 |
|
|
244 |
|
|
554 |
|
|
342 |
|
||||
|
Total other (expense) income, net |
|
(1,453 |
) |
|
6,646 |
|
|
13,872 |
|
|
15,519 |
|
||||
|
(Loss) income before income taxes |
|
(18,532 |
) |
|
6,860 |
|
|
(43,911 |
) |
|
(28,889 |
) |
||||
|
(Benefit from) provision for income taxes |
|
(3,838 |
) |
|
20,326 |
|
|
(6,281 |
) |
|
12,016 |
|
||||
|
Net loss from consolidated operations |
|
(14,694 |
) |
|
(13,466 |
) |
|
(37,630 |
) |
|
(40,905 |
) |
||||
|
Net loss attributable to noncontrolling interests |
|
46 |
|
|
359 |
|
|
810 |
|
|
1,229 |
|
||||
|
Net loss attributable to Fulgent |
$ |
(14,648 |
) |
$ |
(13,107 |
) |
$ |
(36,820 |
) |
$ |
(39,676 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net loss per common share attributable to Fulgent: |
|
|||||||||||||||
|
Basic |
$ |
(0.48 |
) |
$ |
(0.44 |
) |
$ |
(1.22 |
) |
$ |
(1.33 |
) |
||||
|
Diluted |
$ |
(0.48 |
) |
$ |
(0.44 |
) |
$ |
(1.22 |
) |
$ |
(1.33 |
) |
||||
|
Weighted-average common shares: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
30,416 |
|
|
30,013 |
|
|
30,095 |
|
|
29,789 |
|
||||
|
Diluted |
|
30,416 |
|
|
30,013 |
|
|
30,095 |
|
|
29,789 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
(1) Equity-based compensation expense was allocated as follows: |
|
|||||||||||||||
|
Cost of revenue |
$ |
1,940 |
|
$ |
2,621 |
|
$ |
5,948 |
|
$ |
7,374 |
|
||||
|
Research and development |
|
3,583 |
|
|
3,782 |
|
|
11,563 |
|
|
10,900 |
|
||||
|
Selling and marketing |
|
931 |
|
|
1,189 |
|
|
2,983 |
|
|
3,644 |
|
||||
|
General and administrative |
|
4,466 |
|
|
3,310 |
|
|
13,579 |
|
|
9,572 |
|
||||
|
Total equity-based compensation expense |
$ |
10,920 |
|
$ |
10,902 |
|
$ |
34,073 |
|
$ |
31,490 |
|
||||
|
|
||||||||||||||||
|
Non-GAAP Income (Loss) Reconciliation |
||||||||||||||||
|
Three and Nine Months Ended |
||||||||||||||||
|
(in thousands, except per share data) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
|
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
Net loss attributable to Fulgent |
$ |
(14,648 |
) |
$ |
(13,107 |
) |
$ |
(36,820 |
) |
$ |
(39,676 |
) |
||||
|
Amortization of intangible assets |
|
1,993 |
|
|
1,957 |
|
|
5,973 |
|
|
5,887 |
|
||||
|
Equity-based compensation expense |
|
10,920 |
|
|
10,902 |
|
|
34,073 |
|
|
31,490 |
|
||||
|
Impairment of available-for-sale debt securities |
|
10,073 |
|
|
— |
|
|
10,073 |
|
|
— |
|
||||
|
Non-GAAP tax effect (1) |
|
1,100 |
|
|
(11,402 |
) |
|
569 |
|
|
(18,267 |
) |
||||
|
Non-GAAP income (loss) attributable to Fulgent |
$ |
9,438 |
|
$ |
(11,650 |
) |
$ |
13,868 |
|
$ |
(20,566 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net loss per common share attributable to Fulgent: |
|
|||||||||||||||
|
Basic |
$ |
(0.48 |
) |
$ |
(0.44 |
) |
$ |
(1.22 |
) |
$ |
(1.33 |
) |
||||
|
Diluted |
$ |
(0.48 |
) |
$ |
(0.44 |
) |
$ |
(1.22 |
) |
$ |
(1.33 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-GAAP income (loss) per common share attributable to Fulgent: |
|
|||||||||||||||
|
Basic |
$ |
0.31 |
|
$ |
(0.39 |
) |
$ |
0.46 |
|
$ |
(0.69 |
) |
||||
|
Diluted |
$ |
0.31 |
|
$ |
(0.39 |
) |
$ |
0.46 |
|
$ |
(0.69 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average common shares: |
|
|||||||||||||||
|
Basic |
|
30,416 |
|
|
30,013 |
|
|
30,095 |
|
|
29,789 |
|
||||
|
Diluted |
|
30,679 |
|
|
30,013 |
|
|
30,404 |
|
|
29,789 |
|
||||
|
(1) Tax rates as follows: |
|
|
During the three and nine months ended |
|
|
|
||||||||||||||||
|
Non-GAAP Adjusted EBITDA Reconciliation |
||||||||||||||||
|
Three and Nine Months Ended |
||||||||||||||||
|
(in thousands) |
|
|||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
|
Net loss attributable to Fulgent |
$ |
(14,648 |
) |
$ |
(13,107 |
) |
$ |
(36,820 |
) |
$ |
(39,676 |
) |
||||
|
Interest income, net |
|
(8,076 |
) |
|
(6,402 |
) |
|
(23,391 |
) |
|
(15,177 |
) |
||||
|
(Benefit from) provision for income taxes |
|
(3,838 |
) |
|
20,326 |
|
|
(6,281 |
) |
|
12,016 |
|
||||
|
Equity-based compensation expense |
|
10,920 |
|
|
10,902 |
|
|
34,073 |
|
|
31,490 |
|
||||
|
Depreciation and amortization |
|
5,920 |
|
|
6,419 |
|
|
18,736 |
|
|
19,610 |
|
||||
|
Impairment of available-for-sale debt securities |
|
10,073 |
|
|
— |
|
|
10,073 |
|
|
— |
|
||||
|
Adjusted EBITDA |
$ |
351 |
|
$ |
18,138 |
|
$ |
(3,610 |
) |
$ |
8,263 |
|
||||
|
|
||||||||||||||||
|
Non-GAAP Operating Margin |
||||||||||||||||
|
Three and Nine Months Ended |
||||||||||||||||
|
(in thousands) |
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
|
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
Revenue |
$ |
71,743 |
|
$ |
84,687 |
|
$ |
207,256 |
|
$ |
218,708 |
|
||||
|
Cost of revenue |
|
44,972 |
|
|
44,843 |
|
|
131,890 |
|
|
139,481 |
|
||||
|
Gross profit |
|
26,771 |
|
|
39,844 |
|
|
75,366 |
|
|
79,227 |
|
||||
|
Gross margin |
|
37.3 |
% |
|
47.0 |
% |
|
36.4 |
% |
|
36.2 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Equity-based compensation included in cost of revenue |
|
1,940 |
|
|
2,621 |
|
|
5,948 |
|
|
7,374 |
|
||||
|
Non-GAAP gross profit |
|
28,711 |
|
|
42,465 |
|
|
81,314 |
|
|
86,601 |
|
||||
|
Non-GAAP gross margin |
|
40.0 |
% |
|
50.1 |
% |
|
39.2 |
% |
|
39.6 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating expenses |
|
43,850 |
|
|
39,630 |
|
|
133,149 |
|
|
123,635 |
|
||||
|
Equity-based compensation included in operating expenses |
|
8,980 |
|
|
8,281 |
|
|
28,125 |
|
|
24,116 |
|
||||
|
Amortization of intangible assets |
|
1,993 |
|
|
1,957 |
|
|
5,973 |
|
|
5,887 |
|
||||
|
Non-GAAP operating expenses |
|
32,877 |
|
|
29,392 |
|
|
99,051 |
|
|
93,632 |
|
||||
|
Non-GAAP operating loss |
$ |
(4,166 |
) |
$ |
13,073 |
|
$ |
(17,737 |
) |
$ |
(7,031 |
) |
||||
|
Non-GAAP operating margin |
|
-5.8 |
% |
|
15.4 |
% |
|
-8.6 |
% |
|
-3.2 |
% |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107037183/en/
Investor Relations Contact:
Source: