Cue Health Reports Strong Fourth Quarter and Full Year 2021 Financial Results

Rhea-AI Summary

In its fourth quarter and full year 2021 results, Cue Health Inc. (HLTH) reported a significant revenue increase to $192.5 million, up from $13.3 million in Q4 2020. Full year revenue reached $618.1 million, compared to $23.0 million in 2020. The company achieved a diluted EPS of $0.22 in Q4 2021, improving from a loss of $1.16 per share a year prior. Q1 FY22 revenue guidance is set between $170 million and $180 million. Cue Health ended 2021 with $409.9 million in cash and equivalents.

Positive

• Q4 2021 revenue increased to $192.5 million, up from $13.3 million in Q4 2020.
• Full year revenue for 2021 reached $618.1 million, a significant rise from $23 million in 2020.
• Net income improved to $34.2 million in Q4 2021 compared to a loss of $19.5 million in Q4 2020.
• Diluted EPS for Q4 2021 was $0.22, a recovery from a loss of $1.16 per share in 2020.
• Private Sector revenue surpassed Public Sector revenue for the first time at 54% of Q4 revenue.
• Cash and cash equivalents totaled $409.9 million at year-end, providing strong financial stability.

Negative

• Operating expenses grew to $66.3 million in Q4 2021, up from $19.0 million in Q4 2020.
• Operating expenses for the full year increased to $151.3 million compared to $53.1 million in the prior year.

SAN DIEGO--(BUSINESS WIRE)-- Cue Health Inc. (Nasdaq: HLTH), a healthcare technology company, (“Cue") today reported financial results for fourth quarter and full year 2021.

Key Highlights

• Reported total revenue of $192.5 million for the fourth quarter of 2021, compared to $13.3M in the fourth quarter of 2020
• Full year revenue of $618.1 million in 2021, compared to $23.0 million in 2020
• Diluted EPS of $0.22 for the fourth quarter of 2021, compared to a loss of $1.16 in the fourth quarter of 2020
• Full year diluted EPS of $0.59 in 2021, compared to a loss of $2.90 in 2020
• Shipped more than 230,000 Cue Readers to date, almost doubling the number of readers shipped through Q3 2021
• Today we have more than 220 directly contracted organizations as customers, up from more than 80 at the end of the third quarter 2021
• Successfully launched virtual health platform to individual consumers across the US
• Ended 2021 with cash and cash equivalents of $409.9 million
• Q1 FY22 revenue guidance range of $170 million to $180 million

“In the fourth quarter, we made great progress across our growth drivers: building and diversifying our customer base, progressing the expansion of our test menu, and introducing new digital enhancements to our platform,” said Ayub Khattak, Chief Executive Office and Co-Founder of Cue Health. “We’re driving this momentum into 2022 as we plan to launch a number of clinical studies and make multiple FDA submissions before year-end. With our growing install base of nearly a quarter million Cue Readers and the further integration of our diagnostics with virtual care capabilities, we are executing on our strategy and advancing Cue’s mission of making healthcare more timely and accessible for people around the world.”

Fourth Quarter 2021 Financial Results

Revenue was $192.5 million for the fourth quarter of 2021, an increase from $13.3 million in the fourth quarter of 2020. The growth was driven by our production capacity ramp through 2021, delivery on our U.S. Department of Defense (“U.S. DoD”) contract, and expansion of our customer base across all customer categories.

Private Sector revenue grew to 54.0%, or $104.0M, for the fourth quarter of 2021. This is the first time Private Sector revenues surpassed the Public Sector, reflecting growth in our customer base.

Public Sector revenue was $88.5 million, and accounted for 46.0% of revenues for the fourth quarter of 2021. During the quarter we completed shipment of our contract with the U.S. DoD.

Disposable test cartridge revenue was $165.4 million for the fourth quarter of 2021.

Product gross margin was 46.3% for the fourth quarter of 2021, up from 7.2% in the fourth quarter 2020 due to the scale up production and related efficiencies that resulted in more favorable absorption of fixed costs on a per unit basis in 2021.

Operating expenses for the fourth quarter of 2021 were $66.3 million, excluding cost of revenues, compared to $19.0 million for the fourth quarter of 2020. The increase was driven by growth in our overall organization, digital marketing spend, and spend related to product development.

Net income was $34.2 million for the fourth quarter of 2021 compared to net loss of $19.5 million in the fourth quarter of 2020. Earnings per diluted share was $0.22 for the fourth quarter of 2021 compared to a loss of $1.16 per diluted share in the fourth quarter 2020.

Full Year 2021 Financial Results

Revenue was $618.1 million for the full year 2021, an increase from $23.0 million for the full year 2020.

Public Sector revenue was $385.3 million, an increase from $16.4 million for the prior year.

Private Sector revenue was $232.8 million, an increase from $6.5 million for the prior year.

Product gross margin was 55.1%, an increase from 2.9% for the prior year.

Operating expenses, excluding cost of revenues, were $151.3 million, compared to $53.1 million for the prior year.

Net income was $86.4 million, an increase from a net loss $47.4 million for the prior year. Earnings per diluted share was $0.59, compared to a loss of $2.90 for the prior year.

Adjusted net income was $164.5 million, an increase from a net loss of $47.4 million for the prior year.

Cash and cash equivalents were $409.9 million as of December 31, 2021.

Guidance

Cue Health expects first quarter 2022 revenues in the range of $170 million to $180 million.

About Cue Health

Cue Health (Nasdaq: HLTH) is a healthcare technology company that makes it easy for individuals to access health information and places diagnostic information at the center of care. Cue Health enables people to manage their health through real-time, actionable, and connected health information, offering individuals and their healthcare providers easy access to lab-quality diagnostics anywhere, anytime, in a device that fits in the palm of the hand. Cue Health’s first-of-its-kind COVID-19 test was the first FDA-authorized molecular diagnostic test for at-home and over-the-counter use without a prescription and physician supervision. Outside the United States, Cue Health has received the CE mark in the European Union, Interim Order authorization from Health Canada, regulatory approval from India’s Central Drugs Standard Control Organisation, and PSAR authorization from Singapore’s Health Sciences Authority. Cue Health was founded in 2010 and is headquartered in San Diego. For more information, please visit www.cuehealth.com.

Forward-Looking Statements

Statements in this press release about future expectations, plans and prospects, including statements related to the commencement of any clinical studies, the submission of any FDA applications, potential technology enhancements and future performance and our guidance, including first quarter 2022 guidance, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements”. The words, without limitation, “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” “develop,” “progress,” “expand” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these or similar identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those related to the expected capabilities of the new Omicron-specific genotyping Cue test, our ability to maintain customer growth rates, our ability to increase private sector revenue, our ability maintain or replace the revenue historically generated from our government contracts, our ability to effectively scale our manufacturing capacity to meet contractual obligations with our customers and market demand, and the factors discussed in the "Risk Factors" section of Cue’s Annual Report on Form 10-K for the year ended December 31, 2021 to be filed with the SEC. Any forward-looking statements contained in this press release are based on the current expectations of Cue’s management team and speak only as of the date hereof, and Cue specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

This product has not been FDA cleared or approved; but has been authorized by FDA under an Emergency Use Authorization, or EUA. This product has been authorized only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens. The emergency use of this product is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 360bbb-3(b)(1), unless the declaration is terminated or authorization is revoked sooner.

CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share data)
		Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
Revenue
Product revenue		$	191,280			$	13,263			$	615,796			$	15,391
Grant and other revenue			1,226				—				2,311				7,562
Total revenue			192,506				13,263				618,107				22,953
Operating costs and expenses:
Cost of product revenue			102,796				12,310				276,542				14,951
Sales and marketing			21,198				650				28,729				714
Research and development			21,679				1,920				42,829				28,478
General and administrative			23,452				16,478				79,788				23,936
Total operating costs and expenses			169,125				31,358				427,888				68,079
Income (loss) from operations			23,381				(18,095	)			190,219				(45,126	)
Interest expense			(57	)			(100	)			(9,809	)			(374	)
Change in fair value of redeemable convertible preferred stock warrants			—				(1,289	)			53				(1,289	)
Change in fair value of convertible notes			—				—				(59,560	)			—
Loss on extinguishment of debt			—				—				(1,998	)			(610	)
Other income (expense), net			291				(52	)			272				47
Net income (loss) before income taxes			23,615				(19,536	)			119,177				(47,352	)
Income tax expense (benefit)			(10,615	)			—				32,759				—
Net income (loss)		$	34,230			$	(19,536	)		$	86,418			$	(47,352	)
Net income (loss) per share attributable to common stockholders – basic		$	0.23			$	(1.16	)		$	0.63			$	(2.90	)
Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – basic			146,367,756				16,878,866				52,815,449				16,315,730
Net income (loss) per share attributable to common stockholders – diluted		$	0.22			$	(1.16	)		$	0.59			$	(2.90	)
Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – diluted			152,531,173				16,878,866				59,635,384				16,315,730

CONDENSED BALANCE SHEETS
(In thousands, except share amounts and share data)
		December 31, 2021				December 31, 2020
Assets
Current assets:
Cash and cash equivalents		$	409,873			$	121,578
Restricted cash			13,837				6,000
Accounts receivable, net			104,589				4,168
Inventory			88,388				36,842
Prepaid expenses			45,889				13,847
Other current assets			7,446				1,263
Total current assets			670,022				183,698
Restricted cash, non-current			—				1,677
Property and equipment, net			177,456				103,683
Prepaid rent			1,567				16,771
Operating lease right-of-use assets			79,474				8,281
Intangible assets, net			7,673				2,038
Other non-current assets			3,868				180
Total assets		$	940,060			$	316,328
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	37,208			$	23,847
Accrued liabilities and other current liabilities			29,498				8,822
Income taxes payable			8,297				—
Deferred revenue, current			82,165				115,747
Debt, current			—				5,434
Operating lease liabilities, current			7,147				797
Finance lease liabilities, current			2,621				1,249
Total current liabilities			166,936				155,896
Redeemable convertible preferred stock warrant liabilities			—				1,331
Deferred revenue, net of current portion			10,283				67,349
Operating leases liabilities, net of current portion			46,464				10,472
Finance lease liabilities, net of current portion			3,271				1,857
Other non-current liabilities			6,356				4,500
Total liabilities			233,310				241,405
Commitments and contingencies
Total redeemable convertible preferred stock			—				176,323
Stockholders’ Equity (Deficit)
Preferred stock, $0.00001 par value; 50,000,000 and no shares authorized, no shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively			—				—
Common stock, $0.00001 par value; 500,000,000 and 129,030,355 shares authorized, 146,402,991 and 27,995,780 issued and outstanding at December 31, 2021 and December 31, 2020, respectively			1				—
Additional paid-in-capital			730,767				9,036
Accumulated deficit			(24,018	)			(110,436	)
Total stockholders’ equity (deficit)			706,750				(101,400	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)		$	940,060			$	316,328

Non-GAAP Net Income (Loss)
(In thousands, except share data)
		Year Ended December 31,
		2021								2020
		Dollar Amount				Per Diluted Share				Dollar Amount				Per Diluted Share
Net income (loss)/diluted EPS		$	86,418				0.59			$	(47,352	)			(2.90	)
Fair value adjustments of convertible notes			59,560				0.47				—				—
Banking and financing-related items			7,998				0.07				—				—
Forgiveness of promissory notes			12,880				0.10				—				—
Tax effects			(2,315	)			(0.02	)			—				—
Adjusted net income (loss)/adjusted diluted EPS		$	164,541			$	1.21			$	(47,352	)		$	(2.90	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220329005938/en/

ICR Westwicke

Caroline Corner

ir@cuehealth.com

(415) 202-5678

Cue Health

press@cuehealth.com

Source: Cue Health Inc.

FAQ

What were Cue Health's earnings for Q4 2021?

Cue Health reported earnings of $192.5 million for Q4 2021.

How did Cue Health perform financially in 2021?

Cue Health achieved full year revenue of $618.1 million in 2021.

What is Cue Health's EPS for Q4 2021?

The diluted EPS for Q4 2021 was $0.22.

What are Cue Health's revenue projections for Q1 FY22?

Cue Health expects Q1 FY22 revenues in the range of $170 million to $180 million.

What was Cue Health's net income in 2021?

Cue Health reported a net income of $86.4 million for the full year 2021.