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Guardant Health Reports Second Quarter 2024 Financial Results and Increases 2024 Revenue Guidance

Revenue growth of 29% driven by strong clinical and biopharma volume and Guardant360 ASP tailwinds

Shield approved by FDA as primary option for CRC screening and is commercially available in U.S.

Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology company, today reported financial results for the quarter ended June 30, 2024.

Second Quarter 2024 Financial Highlights

  • Revenue of $177.2 million for the second quarter of 2024, an increase of 29% over the second quarter of 2023
  • Reported 49,400 tests to clinical customers and 10,475 tests to biopharmaceutical customers in the second quarter of 2024, representing increases of 14% and 56%, respectively, over the second quarter of 2023
  • Raised 2024 annual guidance for revenue to a new range of $690 to $700 million, representing growth of 22% to 24%

Recent Operating Highlights

  • Received FDA approval for Shield as a first-line CRC screening option and initiated commercial launch of Shield IVD
  • Shield now meets the requirements for Medicare coverage for 45 million eligible individuals
  • Launched major upgrade of Guardant360 on Smart Liquid Biopsy platform, further extending best-in-class performance
  • Upgraded Guardant360 TissueNext to a 498 gene panel to identify more treatment options for patients with advanced cancer
  • Publication of COSMOS study data in Clinical Cancer Research further validates Reveal for MRD CRC surveillance testing in Stage II and III patients

“We had another strong quarter driven by solid volume growth, particularly for biopharma, and continued improvements to Guardant360 reimbursement,” said Helmy Eltoukhy, co-founder and co-CEO. “We also reached major milestones across our oncology business with the upgrades of Guardant360 onto our Smart Liquid Biopsy platform, a revolutionary platform that combines genomics with epigenomics, and of Guardant360 TissueNext to identify more treatment options for patients with advanced cancer. Additionally, our COSMOS study was recently published in Clinical Cancer Research and submitted to MolDx for Medicare reimbursement of CRC surveillance. We look forward to continuing this momentum throughout the remainder of the year as we deliver on our mission of giving us all more time free from cancer.”

“FDA approval of our Shield blood test for first-line colorectal cancer screening is a huge victory for Guardant and patients,” said AmirAli Talasaz, co-founder and co-CEO. “Commercial launch of Shield and CMS coverage make our blood-based screening option accessible to more than 45 million Medicare beneficiaries. Shield offers a more pleasant way to stay up to date with colorectal cancer screening and detect the disease early, when it is more easily treated.”

Second Quarter 2024 Financial Results

Revenue was $177.2 million for the second quarter of 2024, a 29% increase from $137.2 million for the corresponding prior year period. Precision oncology revenue grew 33%, to $166.5 million for the second quarter of 2024, from $125.2 million for the corresponding prior year period, driven by an increase in clinical and biopharma testing volume, which grew 14% and 56%, 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 $10.7 million for the second quarter of 2024, compared to $11.9 million for the corresponding prior year period.

Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $104.8 million for the second quarter of 2024, an increase of $21.5 million from $83.3 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 59%, as compared to 61% for the corresponding prior year period. Precision oncology gross margin was 61% in the second quarter of 2024, as compared to 61% in the prior year period. Development services and other gross margin was 37% in the second quarter of 2024, as compared to 62% in the prior year period.

Non-GAAP gross profit was $106.8 million for the second quarter of 2024, an increase of $21.5 million, from $85.4 million for the corresponding prior year period. Non-GAAP gross margin was 60% for the second quarter of 2024, as compared to 62% for the corresponding prior year period.

Non-GAAP gross profit excluding screening was $109.7 million for the second quarter of 2024, an increase of $22.1 million, from $87.6 million for the corresponding prior year period. Non-GAAP gross margin excluding screening was 62% for the second quarter of 2024, as compared to 64% for the corresponding prior year period.

Operating expenses were $205.4 million for the second quarter of 2024, as compared to $202.9 million for the corresponding prior year period. Non-GAAP operating expenses were $178.8 million for the second quarter of 2024, as compared to $180.5 million for the corresponding prior year period.

Net loss was $102.6 million for the second quarter of 2024, as compared to $72.8 million for the corresponding prior year period. Net loss per share was $0.84 for the second quarter of 2024, as compared to $0.67 for the corresponding prior year period. The year-over-year increase in net loss is primarily due to a $79.5 million increase in unrealized losses recorded for our equity security investment, partially offset by a $23.6 million impairment for our non-marketable equity security investments and other related assets recorded during the corresponding prior year period, a $19.0 million year over year improvement in loss from operations, and a $7.2 million increase in interest income.

Non-GAAP net loss was $58.5 million for the second quarter of 2024, as compared to $88.7 million for the corresponding prior year period. Non-GAAP net loss per share was $0.48 for the second quarter of 2024, as compared to $0.82 for the corresponding prior year period.

Adjusted EBITDA loss was $61.9 million for the second quarter of 2024, as compared to a $85.2 million loss for the corresponding prior year period.

Free cash flow for the second quarter of 2024 was $(99.1) million, as compared to $(100.5) million for the corresponding prior year period. Cash, cash equivalents, and restricted cash were $1.0 billion as of June 30, 2024.

2024 Guidance

Guardant Health now expects full year 2024 revenue excluding screening to be in the range of $690 to $700 million, representing growth of 22% to 24% compared to full year 2023. This compares to the prior range of $675 to $685 million, representing growth of 20% to 21%. Guardant Health continues to expect full year 2024 non-GAAP gross margin excluding screening to be in the range of 61% to 63% and total non-GAAP operating expenses to be in the range of $720 to $730 million, representing a flat to 1% decrease compared to 2023. Guardant Health continues to expect free cash flow to be in the range of $(275) to $(285) million in 2024, representing an improvement of $60 million to $70 million compared to 2023.

Webcast Information

Guardant Health will host a conference call to discuss the second quarter 2024 financial results after market close on Wednesday, August 7, 2024 at 1:30 pm Pacific Time / 4:30 pm Eastern Time. A webcast of the conference call can be accessed at http://investors.guardanthealth.com. The webcast will be archived and available for replay for at least 90 days after the event.

Non-GAAP Measures

Guardant Health has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP cost of precision oncology testing, non-GAAP cost of development services and other, non-GAAP cost of screening, non-GAAP gross profit, non-GAAP gross profit excluding cost of screening, non-GAAP research and development expense, non-GAAP sales and marketing expense, non-GAAP general and administrative expense, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share, basic and diluted, adjusted EBITDA, and free cash flow.

We define our non-GAAP measures as the applicable GAAP measure adjusted for the impacts of stock-based compensation and related employer payroll tax payments, contingent consideration, amortization of intangible assets, fair value adjustments on marketable equity securities, impairment of non-marketable equity securities and other related assets, and other non-recurring items.

Adjusted EBITDA is defined as net loss adjusted for interest income; interest expense; other income (expense), net; provision for income taxes; depreciation and amortization expense; stock-based compensation expense and related employer payroll tax payments; contingent consideration; and other non-recurring items. Free cash flow is defined as net cash used in operating activities in the period less purchase of property and equipment in the period.

We believe that the exclusion of certain income and expenses in calculating these non-GAAP financial measures can provide a useful measure for investors when comparing our period-to-period core operating results, and when comparing those same results to that published by our peers. We exclude certain items because we believe that these income and expenses do not reflect expected future operating performance. Additionally, certain items are inconsistent in amounts and frequency, making it difficult to perform a meaningful evaluation of our current or past operating performance. We use these non-GAAP financial measures to evaluate ongoing operations, for internal planning and forecasting purposes, and to manage our business.

These non-GAAP financial measures are not intended to be considered in isolation from, as substitute for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. There are limitations inherent in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation, and do not present the full measure of our recorded costs against its revenue. In addition, our definition of the non-GAAP financial measures may differ from non-GAAP measures used by other companies.

About Guardant Health

Guardant Health is a leading precision oncology company focused on guarding wellness and giving every person more time free from cancer. Founded in 2012, Guardant is transforming patient care and accelerating new cancer therapies by providing critical insights into what drives disease through its advanced blood and tissue tests, real-world data and AI analytics. Guardant tests help improve outcomes across all stages of care, including screening to find cancer early, monitoring for recurrence in early-stage cancer, and treatment selection for patients with advanced cancer. For more information, visit guardanthealth.com and follow the company on LinkedIn, X (Twitter) and Facebook.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including statements relating to Guardant Health’s future results, regulatory approval for products or regarding the potential benefits and advantages of Guardant Health’s platforms, assays and tests, which involve risks and uncertainties that could cause Guardant Health’s actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions, and actual outcomes and results could differ materially from these statements due to a number of factors. These and additional risks and uncertainties that could affect Guardant Health’s financial and operating results and cause actual results to differ materially from those indicated by the forward-looking statements made in this press release include those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in its Annual Report on Form 10-K for the year ended December 31, 2023, and any current and periodic reports filed with or furnished to the Securities and Exchange Commission thereafter. The forward-looking statements in this press release are based on information available to Guardant Health as of the date hereof, and Guardant Health disclaims any obligation to update any forward-looking statements provided to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. These forward-looking statements should not be relied upon as representing Guardant Health’s views as of any date subsequent to the date of this press release.

 

Guardant Health, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Precision oncology testing

$

166,518

 

 

$

125,244

 

 

$

322,747

 

 

$

238,637

 

Development services and other

 

10,717

 

 

 

11,906

 

 

 

22,979

 

 

 

27,227

 

Total revenue

 

177,235

 

 

 

137,150

 

 

 

345,726

 

 

 

265,864

 

Costs and operating expenses:

 

 

 

 

 

 

 

Cost of precision oncology testing

 

65,715

 

 

 

49,357

 

 

 

125,021

 

 

 

94,463

 

Cost of development services and other

 

6,706

 

 

 

4,491

 

 

 

12,696

 

 

 

12,458

 

Research and development expense

 

83,102

 

 

 

90,359

 

 

 

166,904

 

 

 

183,487

 

Sales and marketing expense

 

81,867

 

 

 

71,043

 

 

 

162,292

 

 

 

147,166

 

General and administrative expense

 

40,463

 

 

 

41,516

 

 

 

79,114

 

 

 

81,961

 

Total costs and operating expenses

 

277,853

 

 

 

256,766

 

 

 

546,027

 

 

 

519,535

 

Loss from operations

 

(100,618

)

 

 

(119,616

)

 

 

(200,301

)

 

 

(253,671

)

Interest income

 

13,913

 

 

 

6,727

 

 

 

28,781

 

 

 

9,787

 

Interest expense

 

(645

)

 

 

(645

)

 

 

(1,290

)

 

 

(1,289

)

Other income (expense), net

 

(15,145

)

 

 

41,259

 

 

 

(44,265

)

 

 

39,605

 

Loss before provision for income taxes

 

(102,495

)

 

 

(72,275

)

 

 

(217,075

)

 

 

(205,568

)

Provision for income taxes

 

133

 

 

 

496

 

 

 

538

 

 

 

736

 

Net loss

$

(102,628

)

 

$

(72,771

)

 

$

(217,613

)

 

$

(206,304

)

Net loss per share, basic and diluted

$

(0.84

)

 

$

(0.67

)

 

$

(1.78

)

 

$

(1.95

)

Weighted-average shares used in computing net loss per share, basic and diluted

 

122,447

 

 

 

108,808

 

 

 

122,080

 

 

 

105,752

 

 

Guardant Health, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share data)

 

 

June 30, 2024

 

December 31, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash, cash equivalents and restricted cash

$

1,035,239

 

 

$

1,133,537

 

Short-term marketable debt securities

 

 

 

 

35,097

 

Accounts receivable, net

 

100,519

 

 

 

88,783

 

Inventory, net

 

66,984

 

 

 

61,948

 

Prepaid expenses and other current assets, net

 

87,232

 

 

 

27,741

 

Total current assets

 

1,289,974

 

 

 

1,347,106

 

Property and equipment, net

 

132,317

 

 

 

145,096

 

Right-of-use assets, net

 

146,111

 

 

 

157,616

 

Intangible assets, net

 

7,742

 

 

 

8,979

 

Goodwill

 

3,290

 

 

 

3,290

 

Other assets, net

 

29,906

 

 

 

124,334

 

Total Assets

$

1,609,340

 

 

$

1,786,421

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

42,447

 

 

$

51,741

 

Accrued compensation

 

59,067

 

 

 

72,736

 

Accrued expenses

 

70,680

 

 

 

63,475

 

Deferred revenue

 

29,375

 

 

 

17,965

 

Total current liabilities

 

201,569

 

 

 

205,917

 

Convertible senior notes, net

 

1,141,256

 

 

 

1,139,966

 

Long-term operating lease liabilities

 

172,194

 

 

 

185,848

 

Other long-term liabilities

 

95,934

 

 

 

96,006

 

Total Liabilities

 

1,610,953

 

 

 

1,627,737

 

Stockholders’ equity:

 

 

 

Common stock, par value of $0.00001 per share; 350,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 122,969,580 and 121,629,861 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

 

1

 

 

 

1

 

Additional paid-in capital

 

2,363,501

 

 

 

2,304,220

 

Accumulated other comprehensive loss

 

(5,640

)

 

 

(3,675

)

Accumulated deficit

 

(2,359,475

)

 

 

(2,141,862

)

Total Stockholders’ (Deficit) Equity

 

(1,613

)

 

 

158,684

 

Total Liabilities and Stockholders’ (Deficit) Equity

$

1,609,340

 

 

$

1,786,421

 

 

Guardant Health, Inc.

Reconciliation of Selected GAAP Measures to Non-GAAP Measures

(unaudited)

(in thousands, except per share data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

GAAP cost of precision oncology testing

$

65,715

 

 

$

49,357

 

 

$

125,021

 

 

$

94,463

 

Amortization of intangible assets

 

(150

)

 

 

(149

)

 

 

(299

)

 

 

(297

)

Stock-based compensation expense and related employer payroll tax payments

 

(1,309

)

 

 

(1,225

)

 

 

(2,587

)

 

 

(2,443

)

Non-GAAP cost of precision oncology testing

$

64,256

 

 

$

47,983

 

 

$

122,135

 

 

$

91,723

 

 

 

 

 

 

 

 

 

GAAP cost of development services and other

$

6,706

 

 

$

4,491

 

 

$

12,696

 

 

$

12,458

 

Amortization of intangible assets

 

(67

)

 

 

(201

)

 

 

(267

)

 

 

(402

)

Stock-based compensation expense and related employer payroll tax payments

 

(498

)

 

 

(478

)

 

 

(997

)

 

 

(954

)

Non-GAAP cost of development services and other

$

6,141

 

 

$

3,812

 

 

$

11,432

 

 

$

11,102

 

 

 

 

 

 

 

 

 

GAAP gross profit

$

104,814

 

 

$

83,302

 

 

$

208,009

 

 

$

158,943

 

Amortization of intangible assets

 

217

 

 

 

350

 

 

 

566

 

 

 

699

 

Stock-based compensation expense and related employer payroll tax payments

 

1,807

 

 

 

1,703

 

 

 

3,584

 

 

 

3,397

 

Non-GAAP gross profit

$

106,838

 

 

$

85,355

 

 

$

212,159

 

 

$

163,039

 

 

 

 

 

 

 

 

 

GAAP cost of screening

$

3,459

 

 

$

2,966

 

 

$

6,788

 

 

$

7,031

 

Amortization of intangible assets

 

(67

)

 

 

(201

)

 

 

(267

)

 

 

(402

)

Stock-based compensation expense and related employer payroll tax payments

 

(498

)

 

 

(478

)

 

 

(997

)

 

 

(954

)

Non-GAAP cost of screening

$

2,894

 

 

$

2,287

 

 

$

5,524

 

 

$

5,675

 

Non-GAAP gross profit excluding cost of screening

$

109,732

 

 

$

87,642

 

 

$

217,683

 

 

$

168,714

 

 

 

 

 

 

 

 

 

GAAP research and development expense

$

83,102

 

 

$

90,359

 

 

$

166,904

 

 

$

183,487

 

Stock-based compensation expense and related employer payroll tax payments

 

(10,001

)

 

 

(8,518

)

 

 

(20,065

)

 

 

(17,266

)

Contingent consideration

 

(110

)

 

 

(531

)

 

 

(485

)

 

 

(1,101

)

Non-GAAP research and development expense

$

72,991

 

 

$

81,310

 

 

$

146,354

 

 

$

165,120

 

 

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

81,867

 

 

$

71,043

 

 

$

162,292

 

 

$

147,166

 

Stock-based compensation expense and related employer payroll tax payments

 

(7,258

)

 

 

(5,977

)

 

 

(14,587

)

 

 

(13,520

)

Non-GAAP sales and marketing expense

$

74,609

 

 

$

65,066

 

 

$

147,705

 

 

$

133,646

 

 

 

 

 

 

 

 

 

GAAP general and administrative expense

$

40,463

 

 

$

41,516

 

 

$

79,114

 

 

$

81,961

 

Amortization of intangible assets

 

(335

)

 

 

(336

)

 

 

(671

)

 

 

(667

)

Stock-based compensation expense and related employer payroll tax payments

 

(8,659

)

 

 

(6,755

)

 

 

(16,823

)

 

 

(11,223

)

Contingent consideration

 

(300

)

 

 

(310

)

 

 

(420

)

 

 

(10

)

Non-GAAP general and administrative expense

$

31,169

 

 

$

34,115

 

 

$

61,200

 

 

$

70,061

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(100,618

)

 

$

(119,616

)

 

$

(200,301

)

 

$

(253,671

)

Amortization of intangible assets

 

552

 

 

 

686

 

 

 

1,237

 

 

 

1,366

 

Stock-based compensation expense and related employer payroll tax payments

 

27,725

 

 

 

22,953

 

 

 

55,059

 

 

 

45,406

 

Contingent consideration

 

410

 

 

 

841

 

 

 

905

 

 

 

1,111

 

Non-GAAP loss from operations

$

(71,931

)

 

$

(95,136

)

 

$

(143,100

)

 

$

(205,788

)

 

 

 

 

 

 

 

 

GAAP net loss

$

(102,628

)

 

$

(72,771

)

 

$

(217,613

)

 

$

(206,304

)

Amortization of intangible assets

 

552

 

 

 

686

 

 

 

1,237

 

 

 

1,366

 

Stock-based compensation expense and related employer payroll tax payments

 

27,725

 

 

 

22,953

 

 

 

55,059

 

 

 

45,406

 

Contingent consideration

 

410

 

 

 

841

 

 

 

905

 

 

 

1,111

 

Unrealized losses (gains) on marketable equity securities

 

15,485

 

 

 

(63,997

)

 

 

45,539

 

 

 

(67,879

)

Impairment of non-marketable equity securities and other related assets

 

 

 

 

23,569

 

 

 

 

 

 

29,054

 

Non-GAAP net loss

$

(58,456

)

 

$

(88,719

)

 

$

(114,873

)

 

$

(197,246

)

 

 

 

 

 

 

 

 

GAAP net loss per share, basic and diluted

$

(0.84

)

 

$

(0.67

)

 

$

(1.78

)

 

$

(1.95

)

Non-GAAP net loss per share, basic and diluted

$

(0.48

)

 

$

(0.82

)

 

$

(0.94

)

 

$

(1.87

)

Weighted-average shares used in computing GAAP and Non-GAAP net loss per share, basic and diluted

 

122,447

 

 

 

108,808

 

 

 

122,080

 

 

 

105,752

 

 

Reconciliation of GAAP Net Loss to Adjusted EBITDA

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

GAAP net loss

$

(102,628

)

 

$

(72,771

)

 

$

(217,613

)

 

$

(206,304

)

Interest income

 

(13,913

)

 

 

(6,727

)

 

 

(28,781

)

 

 

(9,787

)

Interest expense

 

645

 

 

 

645

 

 

 

1,290

 

 

 

1,289

 

Other expense (income), net

 

15,145

 

 

 

(41,259

)

 

 

44,265

 

 

 

(39,605

)

Provision for income taxes

 

133

 

 

 

496

 

 

 

538

 

 

 

736

 

Depreciation and amortization

 

10,623

 

 

 

10,631

 

 

 

21,335

 

 

 

20,976

 

Stock-based compensation expense and related employer payroll tax payments

 

27,725

 

 

 

22,953

 

 

 

55,059

 

 

 

45,406

 

Contingent consideration

 

410

 

 

 

841

 

 

 

905

 

 

 

1,111

 

Adjusted EBITDA

$

(61,860

)

 

$

(85,191

)

 

$

(123,002

)

 

$

(186,178

)

 

Reconciliation of Free Cash Flow to Net Cash Used in Operating Activities

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

$

(94,002

)

 

$

(94,015

)

 

$

(124,286

)

 

$

(168,456

)

Purchase of property and equipment

 

(5,077

)

 

 

(6,513

)

 

 

(12,011

)

 

 

(14,037

)

Free cash flow

$

(99,079

)

 

$

(100,528

)

 

$

(136,297

)

 

$

(182,493

)

 

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