23andMe Reports FY2022 First Quarter Financial Results
23andMe Holding Co. (Nasdaq: ME) reported a 23% increase in revenue for Q1 FY2022, totaling $59 million, compared to the prior year. The company's cash balance reached $770 million following a merger with VG Acquisition Corp. Despite revenue growth, net loss widened to $42 million, influenced by escalating operating expenses due to heightened R&D and marketing efforts. The company's full-year revenue guidance is projected at $250 to $260 million with anticipated net losses of $210 to $225 million. 23andMe continues to expand its therapeutics portfolio while enhancing its customer database to 11.6 million genotyped customers.
- 23% revenue growth year-over-year, totaling $59 million.
- Strong cash balance of $770 million post-merger.
- Expanded customer database to 11.6 million genotyped customers.
- Net loss of $42 million, a decrease from a $36 million loss last year.
- Adjusted EBITDA loss increased to $27 million from $20 million year-over-year.
- Increased operating expenses of $72 million, up from $59 million.
First quarter revenue up
Strong cash balance of
Continuing to advance therapeutics portfolio to drive future revenue growth
SUNNYVALE, Calif., Aug. 13, 2021 (GLOBE NEWSWIRE) -- 23andMe Holding Co. (Nasdaq: ME) (“23andMe”), a leading consumer genetics and research company, today reported its financial results for the first quarter of its fiscal year 2022 (Q1 FY2022), which ended June 30, 2021.
“We are excited to announce our first quarterly earnings results and engage as a publicly traded company. I’m grateful to our customers, investors and employees who power our mission to help people access, understand and benefit from the human genome,” said Anne Wojcicki, CEO and Co-Founder of 23andMe. “We believe that genetic information is the future of personalized medicine. Our unique research platform enables our customers to actively participate in our efforts to make new genetic discoveries and achieve our goals of helping people live healthier lives and to further advance our drug development efforts.”
Recent Highlights
- Completed merger with VG Acquisition Corp (VGAC) and ended the quarter with cash of
$770 million . - Revenue of
$59 million for the quarter ended June 30, 2021, representing an increase of$11 million or23% from the first quarter in the prior year. Net loss was$42 million compared to a net loss of$36 million for the same period in the prior year. Adjusted EBITDA was a loss of$27 million compared to a loss of$20 million for the same period in the prior year. - Expanded customer database to 11.6 million genotyped customers.
- Launched three new reports for customers subscribed to 23andMe+, a membership service launched late last year, which offers insights and features to give members even more actionable information to live healthier lives:
- A new medication insight report with information on how a genetic variant may alter how an individual’s body processes certain commonly prescribed medications. In this new report a person’s CYP2C19 metabolizer profile for citalopram, an antidepressant, and clopidogrel, a blood thinner, were provided. 23andMe remains the first and only direct-to-consumer genetics company with FDA-authorized pharmacogenetic reports that can inform consumers about DNA variants that may influence their body’s ability to process some medications.
- A new wellness report on cat and dog allergies. It is estimated that 10 percent to 20 percent of people are allergic to dogs or cats worldwide. We use statistical modeling that utilizes thousands of genetic variants, as well as a customer’s ethnicity and sex to estimate the likelihood of developing a dog or cat allergy.
- An eczema report powered by 23andMe’s proprietary polygenic score, which is calculated using more than 2,100 genetic variants and a customer’s ethnicity and sex to estimate the likelihood of an individual having eczema.
- Reported on key genetic research findings in the quarter include breakthroughs regarding allergies, hemorrhoids, cataracts, depression, the COVID-19 pandemic’s impact on sleep and link to loss of smell, the study of rare disease and data from the largest cohort in Parkinson’s Research.
- Advanced therapeutics programs:
- Progress on CD96 (GSK6097608), an immuno-oncology program currently in a Phase 1 clinical study, was highlighted by the Company’s partner GlaxoSmithKline plc (GSK) at their Investor Day in June 2021.
- P006, a wholly owned immuno-oncology program, is on track to start its first clinical trial before the end of the Company’s fiscal year on March 31, 2022.
- Added three new board members:
- Dr. Valerie Montgomery Rice, President and Dean of Morehouse School of Medicine
- Evan Lovell, Chief Investment Officer of the Virgin Group
- Peter Taylor, President of the ECMC Foundation
“We began our 2022 financial year with a solid first quarter. Our revenue growth of
FY2022 First Quarter Financial Results
Total revenue was
The increase in consumer services revenue was partially offset by a decline in research services revenue due primarily to a decline in non-GSK revenue. Consumer services revenue represented
Operating expenses for the quarter ended June 30, 2021 were
Net loss for the quarter ended June 30, 2021 was
Adjusted EBITDA loss for the quarter ended June 30, 2021 for the Consumer & Research Services segment was
Balance Sheet
23andMe ended the first quarter with cash of
FY2022 Financial Guidance
Full year revenue for fiscal 2022, which will end on March 31, 2022, is projected to be in the range of
Conference Call Webcast Information
The company will host a conference call at 11:00 a.m. Eastern Time on Friday, August 13, 2021 to discuss the quarter’s financial results and report on business progress. The webcast can be accessed on the day of the event at https://investors.23andme.com/news-events/events-presentations. A webcast replay will be available at the same address for a limited time within 24 hours after the event.
About 23andMe
23andMe, headquartered in Sunnyvale, CA, is a leading consumer genetics and research company. Founded in 2006, the company’s mission is to help people access, understand, and benefit from the human genome. 23andMe has pioneered direct access to genetic information as the only company with multiple FDA authorizations for genetic health risk reports. The company has created the world’s largest crowdsourced platform for genetic research, with approximately 80 percent of its customers electing to participate. The 23andMe research platform has generated more than 180 publications on the genetic underpinnings of a wide range of diseases, conditions, and traits. The platform also powers the 23andMe Therapeutics group, currently pursuing drug discovery programs rooted in human genetics across a spectrum of disease areas, including oncology, respiratory, and cardiovascular diseases, in addition to other therapeutic areas. More information is available at www.23andMe.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the future performance of 23andMe’s businesses in consumer genetics and therapeutics and the growth and potential of its proprietary research platform. All statements, other than statements of historical fact, included or incorporated in this press release, including statements regarding 23andMe’s strategy, financial position, funding for continued operations, cash reserves, projected costs, plans, and objectives of management, are forward-looking statements. The words "believes," "anticipates," "estimates," "plans," "expects," "intends," "may," "could," "should," "potential," "likely," "projects," "continue," "will," “schedule,” and "would" or, in each case, their negative or other variations or comparable terminology, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are predictions based on 23andMe’s current expectations and projections about future events and various assumptions. 23andMe cannot guarantee that it will actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements and you should not place undue reliance on 23andMe’s forward-looking statements. These forward-looking statements involve a number of risks, uncertainties (many of which are beyond the control of 23andMe), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. All forward-looking statements included in this release are made as of the date hereof, and are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in the 23andMe’s Current Report on Form 8-K filed on June 21, 2021, including the audited consolidated financial statements of 23andMe as of March 31, 2021 and 2020 filed as Exhibit 99.1 thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included therein, and otherwise in the Company’s filings and reports filed with Securities and Exchange Commission. Except as required by law, 23andMe does not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financial Measure
To supplement the Company’s unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets, which are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), this press release also includes references to Adjusted EBITDA, which is a non-GAAP financial measure that the Company defines as net income before net interest expense (income), net other expense (income), which includes changes in the fair value of the warrants, depreciation and amortization of fixed assets, amortization of internal use software, non-cash stock-based compensation expense, and expenses related to restructuring and other charges, if applicable for the period. The Company evaluates the performance of each segment of its business based on Adjusted EBITDA and has provided a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA at the end of this press release.
Adjusted EBITDA is a key measure used by management and the board of directors to understand and evaluate operating performance and trends, to prepare and approve the Company’s annual budget and to develop short and long-term operating plans. The Company provides Adjusted EBITDA because the Company believes it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry and it facilitates comparisons on a consistent basis across reporting periods. Further, the Company believes it is helpful in highlighting trends in its operating results because it excludes items that are not indicative of the Company’s core operating performance. In particular, we believe that the exclusion of the items eliminated in calculating Adjusted EBITDA provides useful measures for period-to-period comparisons of the Company’s business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating operating results in the same manner as the Company’s management and board of directors.
Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company may in the future incur expenses similar to the adjustments in the presentation of Adjusted EBITDA. In particular, the Company expects to incur meaningful share-based compensation expense in the future. Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures.
In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that future results will be unaffected by these expenses or any unusual or non-recurring items. Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. Other companies, including companies in the same industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. There are a number of limitations related to the use of these non-GAAP financial measures rather than net loss, which is the most directly comparable financial measure calculated in accordance with GAAP. When evaluating the Company’s performance, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and other U.S. GAAP results.
Investor Relations Contact: investors@23andme.com
Media Contact: press@23andMe.com
23andMe Holding Co.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
(unaudited)
| Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Revenue (related party amounts of | $ | 59,239 | $ | 48,057 | ||||
| Cost of revenue (related party amounts of | 28,542 | 25,563 | ||||||
| Gross profit | 30,697 | 22,494 | ||||||
| Operating expenses: | ||||||||
| Research and development (related party amounts of | 44,232 | 34,370 | ||||||
| Sales and marketing | 15,419 | 10,655 | ||||||
| General and administrative | 12,596 | 14,191 | ||||||
| Total operating expenses | 72,247 | 59,216 | ||||||
| Loss from operations | (41,550 | ) | (36,722 | ) | ||||
| Other income (expense): | ||||||||
| Interest income | 44 | 74 | ||||||
| Other (expense) income, net | (520 | ) | 878 | |||||
| Net and comprehensive loss | $ | (42,026 | ) | $ | (35,770 | ) | ||
| Net loss per share of Class A and Class B common stock attributable to common stockholders, basic and diluted: | ||||||||
| Basic and diluted | $ | (0.25 | ) | $ | (0.38 | ) | ||
| Weighted-average shares used to compute net loss per share: | ||||||||
| Basic and diluted | 168,191,762 | 93,577,307 | ||||||
23andMe Holding Co.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| June 30, | March 31, | |||||||
| 2021 | 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 769,938 | $ | 282,489 | ||||
| Restricted cash | 1,399 | 1,399 | ||||||
| Accounts receivable, net | 9,404 | 2,481 | ||||||
| Inventories | 15,272 | 6,239 | ||||||
| Deferred cost of revenue | 6,118 | 5,482 | ||||||
| Prepaid expenses and other current assets | 12,532 | 15,485 | ||||||
| Total current assets | 814,663 | 313,575 | ||||||
| Property and equipment, net | 57,700 | 60,884 | ||||||
| Operating lease right-of-use assets | 59,996 | 63,122 | ||||||
| Restricted cash, noncurrent | 6,974 | 6,974 | ||||||
| Internal-use software, net | 7,132 | 6,889 | ||||||
| Other assets | 553 | 654 | ||||||
| Total assets | $ | 947,018 | $ | 452,098 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable (related party amounts of | $ | 17,684 | $ | 12,271 | ||||
| Accrued expenses and other current liabilities (related party amounts of | 33,029 | 31,953 | ||||||
| Deferred revenue (related party amounts of | 66,103 | 71,255 | ||||||
| Operating lease liabilities | 5,853 | 6,140 | ||||||
| Total current liabilities | 122,669 | 121,619 | ||||||
| Operating lease liabilities, noncurrent | 84,670 | 87,582 | ||||||
| Other liabilities | 1,188 | 1,165 | ||||||
| Warrant Liabilities | 75,949 | — | ||||||
| Total liabilities | $ | 284,476 | $ | 210,366 | ||||
| Redeemable convertible preferred stock | ||||||||
| Redeemable convertible preferred stock, | — | 837,351 | ||||||
| Stockholders' equity (deficit) | ||||||||
| Common Stock - Class A shares, par value | 41 | — | ||||||
| Additional paid-in capital | 1,681,765 | 381,619 | ||||||
| Accumulated deficit | (1,019,264 | ) | (977,238 | ) | ||||
| Total stockholders’ equity (deficit) | 662,542 | (595,619 | ) | |||||
| Total liabilities and stockholders’ equity (deficit) | $ | 947,018 | $ | 452,098 | ||||
23andMe Holding Co.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (42,026 | ) | $ | (35,770 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 4,093 | 5,058 | ||||||
| Amortization and impairment of internal-use software | 545 | 474 | ||||||
| Stock-based compensation expense | 9,637 | 11,361 | ||||||
| Changes in fair value of warrant liabilities | 534 | — | ||||||
| Gain on lease termination | (15 | ) | (876 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (6,923 | ) | 1,881 | |||||
| Inventories | (9,033 | ) | 2,846 | |||||
| Deferred cost of revenue | (638 | ) | (542 | ) | ||||
| Prepaid expenses and other current assets | (1,057 | ) | 4,529 | |||||
| Operating lease right-of-use assets | 1,812 | 5,021 | ||||||
| Other assets | 101 | 162 | ||||||
| Accounts payable (related party amounts of | 5,721 | (6,724 | ) | |||||
| Accrued expenses and other current liabilities (related party amounts of | (286 | ) | (6,929 | ) | ||||
| Deferred revenue (related party amounts of | (5,152 | ) | (10,409 | ) | ||||
| Operating lease liabilities | (1,868 | ) | (3,008 | ) | ||||
| Other liabilities | 22 | 21 | ||||||
| Net cash used in operating activities | (44,533 | ) | (32,905 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (666 | ) | (3,539 | ) | ||||
| Proceeds from sale of property and equipment | — | 606 | ||||||
| Capitalized internal-use software costs | (721 | ) | (1,015 | ) | ||||
| Net cash used in investing activities | (1,387 | ) | (3,948 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | 2,720 | 1,026 | ||||||
| Payments of deferred offering costs | (29,071 | ) | — | |||||
| Proceeds from issuance of common stock upon Merger | 309,720 | — | ||||||
| Proceeds from PIPE (related party amounts of | 250,000 | — | ||||||
| Net cash provided by financing activities | 533,369 | 1,026 | ||||||
| Net increase (decrease) in cash and restricted cash | 487,449 | (35,827 | ) | |||||
| Cash and restricted cash—beginning of period | 290,862 | 216,316 | ||||||
| Cash and restricted cash—end of period | 778,311 | 180,489 | ||||||
| Supplemental disclosures of non-cash investing and financing activities: | ||||||||
| Purchases of property and equipment during the period included in accounts payable and accrued expenses | 777 | 12 | ||||||
| Stock-based compensation capitalized for internal-use software costs | 168 | 143 | ||||||
| Reclassification of deferred offering costs | 3,971 | — | ||||||
| Vesting of related party early exercised stock options | — | 4,241 | ||||||
| Assumption of merger warrants liability | 75,415 | — | ||||||
| Deferred offering costs during the period included in accounts payable and accrued expenses | 1,571 | — | ||||||
| Conversion of redeemable convertible preferred stock to common stock | 837,351 | — | ||||||
| Reconciliation of cash and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above: | ||||||||
| Cash | 769,938 | 172,116 | ||||||
| Restricted cash, current | 1,399 | 1,399 | ||||||
| Restricted cash, noncurrent | 6,974 | 6,974 | ||||||
| Total cash and restricted cash | $ | 778,311 | $ | 180,489 | ||||
23andMe Holding Co.
Segment Information and Reconciliation of Non-GAAP Financial Measures
(in thousands)
(unaudited)
| Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Segment Revenue | ||||||||
| Consumer and Research Services | $ | 59,239 | $ | 48,009 | ||||
| Therapeutics | — | 48 | ||||||
| Total Revenue | $ | 59,239 | $ | 48,057 | ||||
| Segment adjusted EBITDA | ||||||||
| Consumer and Research Services adjusted EBITDA | $ | (505 | ) | $ | (4,236 | ) | ||
| Therapeutics Adjusted EBITDA | (18,303 | ) | (9,394 | ) | ||||
| Unallocated Corporate | (8,467 | ) | (6,199 | ) | ||||
| Total adjusted EBITDA | $ | (27,275 | ) | $ | (19,829 | ) | ||
| Reconciliation of net loss to adjusted EBITDA | ||||||||
| Net Loss | $ | (42,026 | ) | $ | (35,770 | ) | ||
| Adjustments | ||||||||
| Interest (income), net | (44 | ) | (74 | ) | ||||
| Other (income) / expense, net | 520 | (878 | ) | |||||
| Depreciation and amortization | 4,638 | 5,532 | ||||||
| Stock-based compensation expense | 9,637 | 11,361 | ||||||
| Total adjusted EBITDA | $ | (27,275 | ) | $ | (19,829 | ) | ||
23andMe Holding Co.
Reconciliation of GAAP Net Income Outlook to non-GAAP Adjusted EBITDA Outlook
(in millions)
(unaudited)
| Outlook for the Year Ended March 31, 2022 | ||||||||
| as of August 13, 2021 | ||||||||
| Low | High | |||||||
| Reconciliation of estimated net loss to adjusted EBITDA | ||||||||
| GAAP Net Loss outlook | $ | (225 | ) | $ | (210 | ) | ||
| Adjustments | ||||||||
| Estimated interest (income), net | (0 | ) | (0 | ) | ||||
| Estimated other (income) / expense, net | 1 | 1 | ||||||
| Estimated depreciation and amortization | 19 | 19 | ||||||
| Estimated stock-based compensation expense | 47 | 47 | ||||||
| Non-GAAP adjusted EBITDA outlook | $ | (158 | ) | $ | (143 | ) | ||
FAQ
What was 23andMe's revenue for Q1 FY2022?
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What is 23andMe's cash position after the merger?
What is 23andMe's financial guidance for FY2022?
