GeneDx Reports Fourth Quarter and Full Year 2023 Financial Results and Issues Guidance for Full Year 2024

Reported fourth quarter 2023 revenue from continuing operations1 of $58.1M with more than 68% year-over-year growth of exome and genome test revenue

Expanded fourth quarter 2023 adjusted gross margins2 from continuing operations to 56%

Narrowed fourth quarter 2023 adjusted net loss2 to $17.8M and delivered 51% year-over-year cash burn reduction

Issued guidance to deliver between $220M and $230M in FY 2024 revenue and reiterate path to profitability in 2025

GeneDx to host conference call today at 4:30 p.m. ET

STAMFORD, Conn., Feb. 20, 2024 (GLOBE NEWSWIRE) — GeneDx Holdings Corp. (NASDAQ:WGS), a leader in delivering improved health outcomes through genomic and clinical insights, today reported its financial results for the fourth quarter and full year of 2023.

“Our strong fourth quarter results were a product of our relentless focus on exome and genome revenue growth, uplift from gross margin expansion, and continued efforts to meaningfully reduce our cash burn,” said Katherine Stueland, Chief Executive Officer of GeneDx. “With our focus and disciplined approach to delivering on our goals in 2024, we are confident in our ability to continue to execute and reach profitability in 2025.”

Fourth Quarter and Full Year 2023 Financial Results (Unaudited)1,2,3

Revenues

Fourth quarter 2023:

Revenues from continuing operations grew to $58.1 million, an increase of 27% year-over-year and 15% sequentially.

Total company revenues were $57.4 million.

Exome and genome test revenue grew to $39.2 million, an increase of 68% year-over-year and 15% sequentially.

Full year 2023:

Revenues from continuing operations grew to $194.4 million, an increase of 59% year-over-year and 14% year-over-year on a pro-forma basis3.

Total company revenues were $202.6 million.

Exome and genome test revenue grew to $124.3 million, an increase of 43% year-over-year on a pro-forma basis3.

Exome and genome volume

Fourth quarter 2023:

Exome and genome test results volume grew to 15,663, an increase of 99% year-over-year and 19% sequentially.
Exome and genome represented 27% of all test results, up from 16% in the fourth quarter of 2022 and up from 23% in the third quarter of 2023.

Full year 2023:

Exome and genome test results volume grew to 49,439, an increase of 62% year-over-year on a pro-forma basis3.
Exome and genome represented 22% of all test results, up from 17% for the full year 2022 on a pro-forma basis3.

Gross margin

Fourth quarter 2023:

Adjusted gross margin from continuing operations expanded to 56%, up from 41% in the fourth quarter of 2022 and up from 48% in the third quarter of 2023.

Total company gross margin was 53.6%.

Exome and genome adjusted gross margin operated in excess of 60%.

Full year 2023:

Adjusted gross margin from continuing operations expanded to 45%, up from 39% for full year 2022.

Total company gross margin was 44.4%.

Exome and genome adjusted gross margin operated in excess of 60%.

Operating expenses

Fourth quarter 2023:

Adjusted total operating expenses reduced to $48.3 million, a decrease of 36% year-over-year.

Total GAAP operating expenses were $54.4 million.

Full year 2023:

Adjusted total operating expenses reduced to $216.3 million, a decrease of 33% year-over-year.

Total GAAP operating expenses were $253.0 million.

Net loss

Fourth quarter 2023:

Adjusted net loss narrowed to $17.8 million, an improvement of 76% year-over-year and 16% sequentially.

GAAP net loss was $25.8 million.

Full year 2023:

Adjusted net loss narrowed to $126.3 million, an improvement of 53% year-over-year.

GAAP net loss was $175.8 million.

Cash burn and cash position

Excluding one-time items, representative continuing operations cash burn was $23.9 million in the fourth quarter of 2023. Total net use of cash, excluding net financing proceeds, was $32.9 million in the fourth quarter of 2023, an improvement of 51% year-over-year and 22% sequentially. The use of cash in the fourth quarter included $5 million in scheduled payments under the Legacy Sema4 payer settlement entered into in 2022, $3 million to discharge operating payables for the exited reproductive health business and $1 million in severance payments related to the previously announced cost reduction initiative.
Cash, cash equivalents, marketable securities and restricted cash was $131.1 million as of December 31, 2023.

Revenue and gross margin results from continuing operations, which we believe are representative of our ongoing business strategy exclude any revenue and cost of goods sold of the exited Legacy Sema4 diagnostic testing business. Total company results include GeneDx’s continuing operations and the financial impacts of exited Legacy Sema4 business activities.
Adjusted gross margin, adjusted total operating expenses and adjusted net loss are non-GAAP financial measures. See appendix for a reconciliation of GAAP to Non-GAAP figures presented.
Volume and revenue comparison for full year 2022 are on a pro forma basis assuming Legacy GeneDx and the Company were combined for the entirety of 2022.

GeneDx Full Year 2024 Guidance

Management expects GeneDx to:

Drive full year 2024 revenues between $220 and $230 million;
Expand full year 2024 adjusted gross margin profile to at least 50%;
Use $75 to $80 million of net cash for full year 2024;
Turn profitable in 2025.

2023 Business Highlights

Driving sustainable growth and market leadership

Presented new data at the American Epilepsy Society Annual Meeting demonstrating that exome sequencing outperforms multi-gene panels for patients with epilepsy
Announced that Genetics in Medicine, the official journal of the American College of Medical Genetics and Genomics (ACMG), published a peer-reviewed research analysis involving GeneDx that concluded that variants of unknown significance (VUS) are reported more frequently on multi-gene panels than exome and genome sequencing
Reached a milestone of over 1,000 publications in peer-reviewed journals, demonstrating GeneDx’s leadership in furthering scientific discoveries and innovation in the commercial laboratory space
Worked closely with state Medicaid programs, including Florida, Arizona, and Utah, to expand coverage of rapid genetic testing in the NICU
Announced partnership program with the New York Center for Rare Diseases (NYCRD) at Montefiore, PacBio and Google Health to deliver genetic diagnoses for Bronx families living with rare diseases
Continued to support the GUARDIAN study, which continued to offer data and insights on the benefits and potential for genetic diagnoses through newborn screening – a retrospective analysis of GeneDx data showed that more than 20% of individuals could have identified their genetic disease, on average, 7 to 11 years sooner had they received genome sequencing at birth
Launched research collaboration with the University of Washington and PacBio to study the capabilities of long-read whole genome sequencing (WGS) to increase diagnostic rates in pediatric patients with genetic conditions
Refined the strategic direction for biopharma and partnerships efforts and aligned the team within the Commercial organization, offering enhanced integration between our testing and data businesses
Evolved the management team to include Melanie Duquette as Chief Growth Officer and Eric Olivares as Chief Product Officer

Strengthening our financial health and path to profitability

On October 30, 2023, the Company announced a continued strategic realignment of its organization to key priorities which included the elimination of approximately 50 positions impacted on August 23, 2023 and approximately 35 positions impacted on October 30, 2023. Together these actions reduced the size of the Company’s workforce by 10% from the total number that existed at the time of the August reduction in force. In total, the Company announced cost saving initiatives, including but not limited to these reductions in force, that are expected to amount to approximately $40 million in annual cost reduction.
Entered into a new, five-year senior secured credit facility with Perceptive Advisors. The agreement provides access of up to $75 million, consisting of an initial tranche of $50 million, and a subsequent tranche for an additional $25 million, subject to certain timelines and other defined criteria.

Interest is payable in cash on the outstanding principal amount at a rate per annum equal to the sum of the applicable secured overnight financing rate (SOFR), plus 7.5%.
Under the terms of the agreement, Perceptive was issued warrants to purchase 800,000 shares of the Company’s Class A common stock on the closing date, with an exercise price equal to $3.18. Upon the borrowing of the subsequent tranche, Perceptive will be issued warrants to purchase an additional 400,000 shares of Class A common stock.

Webcast and Conference Call Details

GeneDx will host a conference call today, February 20, 2024, at 4:30 p.m. Eastern Time. Investors interested in listening to the conference call are required to register online. A live and archived webcast of the event will be available on the “Events” section of the GeneDx investor relations website at https://ir.genedx.com/.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our future performance and our market opportunity, including our expected full year 2024 reported revenue guidance, our expectations regarding our adjusted gross margin profile in 2024, our use of net cash in 2024 and our turning profitable in 2025, the expected annual cost reduction from our cost savings initiatives. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) our ability to implement business plans, goals and forecasts, and identify and realize additional opportunities, (ii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, (iii) the size and growth of the market in which we operate, (iv) our ability to pursue our new strategic direction, and (vi) our ability to enhance our artificial intelligence tools that we use in our clinical interpretation platform. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2023 and other documents filed by us from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.

About GeneDx

GeneDx (NASDAQ:WGS) delivers personalized and actionable health insights to inform diagnosis, direct treatment and improve drug discovery. The company is uniquely positioned to accelerate the use of genomic and large-scale clinical information to enable precision medicine as the standard of care. GeneDx is at the forefront of transforming healthcare through its industry-leading exome and genome testing and interpretation, fueled by one of the world’s largest rare disease data sets. For more information, please visit genedx.com and connect with us on LinkedIn, Facebook, Twitter and Instagram.

Investor Relations Contact:
Investors@GeneDx.com

Media Contact:
Press@GeneDx.com

Volume and revenue in the table below include the combination of the Legacy GeneDx diagnostic business with the data and information business of Legacy Sema4.

Volume & Revenue

 
4Q23
 
3Q23
 
2Q23
 
1Q23
 
4Q22
 
2023 YTD
 
2022 YTD1

Volumes
 
 
 
 
 
 
 
 
 
 
 
 
 

Whole exome, whole genome
 
15,663
 
 
13,216
 
 
11,855
 
 
8,705
 
 
7,862
 
 
49,439
 
 
30,560

Exome based panels
 
2,606
 
 
2,922
 
 
3,472
 
 
3,136
 
 
3,013
 
 
12,136
 
 
11,767

Hereditary cancer
 
8,240
 
 
8,556
 
 
7,142
 
 
7,120
 
 
6,069
 
 
31,058
 
 
25,334

Other individual gene tests and multi-gene disease panels
 
31,086
 
 
32,939
 
 
32,459
 
 
33,817
 
 
31,891
 
 
130,301
 
 
112,711

Total
 
57,595
 
 
57,633
 
 
54,928
 
 
52,778
 
 
48,835
 
 
222,934
 
 
180,372

 
 
 
 
 
 
 
 
 
 
 
 
 
 

Revenue ($ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 

Whole exome, whole genome
$
39.2
 
$
34.0
 
$
28.7
 
$
22.4
 
$
23.3
 
$
124.3
 
$
86.8

Exome based panels
 
1.7
 
 
1.7
 
 
2.0
 
 
2.1
 
 
2.0
 
 
7.5
 
 
9.1

Hereditary cancer
 
5.5
 
 
4.5
 
 
3.8
 
 
4.3
 
 
4.4
 
 
18.1
 
 
14.4

Other individual gene tests and multi-gene disease panels
 
9.5
 
 
8.9
 
 
8.6
 
 
10.6
 
 
14.2
 
 
37.6
 
 
53.0

Data information
 
2.2
 
 
1.3
 
 
2.1
 
 
1.3
 
 
1.9
 
 
6.9
 
 
7.7

Total
$
58.1
 
$
50.4
 
$
45.2
 
$
40.7
 
$
45.8
 
$
194.4
 
$
171.0

1 Volume and revenue comparison for full year 2022 are on a pro forma basis as if Legacy GeneDx and the Company were combined for the entirety of 2022.

Unaudited Select Financial Information (in thousands)

 
Three months ended December 31, 2023
 
Three months ended December 31, 2022

 
GeneDx
 
Legacy Sema4
 
Total
 
GeneDx
 
Legacy Sema4
 
Total

Revenue
$58,107
 
 
$(689
)
 
$57,418
 
 
$45,824
 
 
$15,526
 
 
$61,350
 

Adjusted cost of services
 
25,626
 
 
 
—
 
 
 
25,626
 
 
 
27,000
 
 
 
30,153
 
 
 
57,153
 

Adjusted gross profit (loss)
$32,481
 
 
$(689
)
 
$31,792
 
 
$18,824
 
 
$(14,627
)
 
$4,197
 

Adjusted gross margin %
 
55.9
%
 
 
(100.0
)%
 
 
55.4
%
 
 
41.1
%
 
 
(94.2
)%
 
 
6.8
%

 
Year ended December 31, 2023
 
Year ended December 31, 2022

 
GeneDx
 
Legacy Sema4
 
Total
 
GeneDx
 
Legacy Sema4
 
Total

Revenue
$194,376
 
 
$8,190
 
 
$202,566
 
 
$122,234
 
 
$112,460
 
 
$234,694
 

Adjusted cost of services
 
106,983
 
 
 
2,305
 
 
 
109,288
 
 
 
74,213
 
 
 
148,897
 
 
 
223,110
 

Adjusted gross profit (loss)
$87,393
 
 
$5,885
 
 
$93,278
 
 
$48,021
 
 
$(36,437
)
 
$11,584
 

Adjusted gross margin %
 
45.0
%
 
 
71.9
%
 
 
46.0
%
 
 
39.3
%
 
 
(32.4
)%
 
 
4.9
%

 
Three months ended September 30, 2023

 
 

 
GeneDx
 
Legacy Sema4
 
Total

 
 

Revenue
$50,350
 
 
$2,953
 
 
$53,303
 
 

Adjusted cost of services
 
26,079
 
 
 
225
 
 
 
26,304
 
 

Adjusted gross profit (loss)
$24,271
 
 
$2,728
 
 
$26,999
 
 

Adjusted gross margin %
 
48.2
%
 
 
92.4
%
 
 
50.7
%
 

 
For the three months ended December 31, 2023

 
Reported
 
Depreciation and amortization
 
Stock-based compensation expense
 
Restructuring costs
 
Change in FV of financial liabilities
 
Charges related to business exit
 
Other
 
Adjusted

Diagnostic test revenue
$
55,214
 
 
$
—
 
 
$
—
 
 
$
—
 
 
$
—
 
 
$
—
 
 
$
—
 
$
55,214
 

Other revenue
 
2,204
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
2,204
 

Total revenue
 
57,418
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
57,418
 

Cost of services
 
26,664
 
 
 
(915
)
 
 
(123
)
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
25,626
 

Gross profit (loss)
 
30,754
 
 
 
915
 
 
 
123
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
31,792
 

Gross margin
 
53.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
55.4
%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Research and development
 
12,248
 
 
 
(919
)
 
 
2,320
 
 
 
(1,300
)
 
 
—
 
 
 
—
 
 
 
—
 
 
12,349
 

Selling and marketing
 
15,559
 
 
 
(1,225
)
 
 
1,071
 
 
 
(487
)
 
 
—
 
 
 
—
 
 
 
—
 
 
14,918
 

General and administrative
 
26,626
 
 
 
(3,035
)
 
 
(2,356
)
 
 
(197
)
 
 
—
 
 
 
—
 
 
 
—
 
 
21,038
 

Impairment loss
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
—
 

Other, net
 
1,964
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
(1,277
)
 
 
—
 
 
687
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Loss from operations
 
(25,643
)
 
 
6,094
 
 
 
(912
)
 
 
1,984
 
 
 
—
 
 
 
1,277
 
 
 
—
 
 
(17,200
)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Interest income (expense), net
 
(978
)
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
(978
)

Other income (expense), net
 
437
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
(485
)
 
 
—
 
 
 
48
 
 
—
 

Income tax benefit
 
411
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
 
411
 

Net loss
$
(25,773
)
 
$
6,094
 
 
$
(912
)
 
$
1,984
 
 
$
(485
)
 
$
1,277
 
 
$
48
 
$
(17,767
)

 
For the three months ended December 31, 2022

 
Reported
 
Depreciation and amortization
 
Stock-based compensation expense
 
Restructuring costs
 
Change in FV of financial liabilities
 
Charges related to business exit
 
Adjusted

Diagnostic test revenue
$
59,345