NeoGenomics Reports Fourth Quarter and Full Year 2023 Results
- NeoGenomics reported strong revenue growth in the fourth quarter and full year of 2023.
- The company's net loss decreased significantly in both the fourth quarter and full year of 2023.
- Adjusted EBITDA showed positive growth, indicating improving financial performance.
- NeoGenomics issued optimistic 2024 financial guidance, expecting significant revenue growth and improved profitability.
- The company's fourth-quarter results reflect a mixed performance with a decrease in Advanced Diagnostics revenue but overall positive financial indicators.
- Cash and cash equivalents and marketable securities totaled $415 million at the end of the fourth quarter of 2023.
- None.
Insights
The reported increase in NeoGenomics' fourth quarter and full year revenue suggests a robust performance in the oncology testing and research services market. The 20% growth in Clinical Services revenue is particularly significant, as it indicates an increasing demand for the company's clinical testing services. This could be attributed to the rising prevalence of cancer and the critical role of diagnostics in personalized medicine. The 6% increase in test volume coupled with a 13% increase in revenue per clinical test reflects strong pricing power and possibly an enhanced service mix with higher-margin tests.
However, the 17% decline in Advanced Diagnostics revenue for the quarter may raise concerns about the competitiveness and market demand for these services. Investors should monitor whether this is a temporary setback or indicative of a longer-term trend. The improvement in net loss figures and a positive Adjusted EBITDA are encouraging signs of operational efficiency and cost management, suggesting a potential trend towards profitability.
Looking ahead, the 2024 financial guidance projects revenue growth and a reduced net loss, reflecting management's optimism. However, the wide range in Adjusted EBITDA projections (600% to 700% increase) warrants scrutiny, as it suggests there may be significant variables that could impact the company's performance. Investors should consider the company's strategic initiatives and market conditions when evaluating these projections.
The performance of NeoGenomics underscores the importance of oncology diagnostics in the current healthcare landscape. The expansion in Clinical Services aligns with the industry's move towards precision medicine, where tailored treatments based on individual genetic profiles are becoming the norm. The reported increase in revenue per test is indicative of the high value placed on accurate and comprehensive diagnostic data.
However, the decline in Advanced Diagnostics revenue may point to a need for innovation or reevaluation of the company's offerings within this segment. As new technologies and competitors emerge, staying at the forefront of advanced diagnostic solutions is critical. The company's investment in people and technology, as mentioned by the CEO, will be essential to maintaining and expanding its market position.
Furthermore, the positive Adjusted EBITDA turnaround is a promising sign that the company's efforts to refine its operations and control costs are yielding results. This is a critical consideration for stakeholders, as it may influence the company's ability to invest in future growth opportunities and research initiatives.
NeoGenomics operates within the high-growth oncology testing market, which is expected to expand due to technological advancements and an aging population. The company's performance, with significant revenue growth, positions it well in a competitive landscape. The increase in clinical test volume reflects a growing market share and the potential for further expansion.
The decrease in Advanced Diagnostics revenue may suggest a strategic pivot or a shift in customer preferences. It's important to understand the market dynamics of this segment, including the competitive pressures and the introduction of new testing methodologies.
The positive Adjusted EBITDA and the projected improvement in the net loss for 2024 indicate that the company is expected to continue on a path to financial stability. This projection should be weighed against industry benchmarks and peer performance to fully grasp its significance. The company's guidance for the upcoming year reflects confidence in its business model and market strategy, which could be a positive signal to investors and industry analysts alike.
Fourth Quarter Revenue Increased
Full Year Revenue Increased
Highlights
-
Fourth quarter consolidated revenue increased
12% to$156 million 16% to$592 million -
Fourth quarter Clinical Services revenue increased
20% to$130 million 18% to$496 million -
Fourth quarter Advanced Diagnostics revenue decreased
17% to$25 million 6% to$96 million -
Fourth quarter net loss decreased
37% to$14 million 39% to$88 million -
Fourth quarter Adjusted EBITDA was positive
$9 million $11 million $3 million $51 million
“NeoGenomics’ fourth quarter and full year 2023 results show the momentum and strength of our business as we continued to deliver long-term, sustainable growth on our way to becoming the leading oncology laboratory,” said Chris Smith, CEO of NeoGenomics. “We believe 2024 will be an exciting year as we continue to invest in our people and technologies to support consistent revenue growth and profitability, while allowing us to better serve our patients and providers.”
Fourth Quarter Results
Consolidated revenue for the fourth quarter of 2023 was
Consolidated gross profit for the fourth quarter of 2023 was
Operating expenses for the fourth quarter of 2023 were
Net loss for the quarter was
Adjusted EBITDA(2) was positive
Cash and cash equivalents and marketable securities totaled
Full Year Results
Consolidated revenue for 2023 was
2024 Financial Guidance
The Company also issued 2024 guidance(3) today (in millions).
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FY 2023 |
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FY 2024 Guidance |
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YOY % Change from FY 2023 |
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Actual |
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Low |
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High |
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Low |
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High |
Consolidated revenue |
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Net loss |
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Adjusted EBITDA |
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(1) |
Clinical testing excludes requisitions, tests, revenue and costs of revenue for Advanced Diagnostics. |
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(2) |
The Company has provided adjusted financial information that has not been prepared in accordance with GAAP, including Adjusted EBITDA, Adjusted Gross Profit Margin, Adjusted Net Loss, and Adjusted Diluted EPS. Each of these measures is defined in the section of this report entitled “Use of Non-GAAP Financial Measures.” See also the tables reconciling such measures to their closest GAAP equivalent. |
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(3) |
The Company reserves the right to adjust this guidance at any time based on the ongoing execution of its business plan. Current and prospective investors are encouraged to perform their own due diligence before buying or selling any of the Company’s securities, and are reminded that the foregoing estimates should not be construed as a guarantee of future performance. |
Conference Call
The Company has scheduled a webcast and conference call to discuss its fourth quarter and full year 2023 results on Tuesday, February 20, 2024 at 4:30 PM EDT. Interested investors should dial (888) 506-0062 (domestic) and (973) 528-0011 (international) at least five minutes prior to the call. The participant access code provided for this call is 822624. The webcast will be archived and available for replay shortly after the conclusion of the call. It may be accessed under the Investor Relations section of our website at ir.neogenomics.com.
About NeoGenomics, Inc.
NeoGenomics, Inc. specializes in cancer genetics testing and information services, providing one of the most comprehensive oncology-focused testing menus in the world for physicians to help them diagnose and treat cancer. The Company’s Advanced Diagnostics Division serves pharmaceutical clients in clinical trials and drug development.
NeoGenomics is committed to connecting patients with life altering therapies and trials. We believe that, together, with our partners, we can help patients with cancer today and the next person diagnosed tomorrow. In carrying out these commitments, NeoGenomics adheres to relevant data protection laws, provides transparency and choice to patients regarding the handling and use of their data through our Notice of Privacy Practices, and has invested in leading technologies to secure the data we maintain.
Headquartered in
Forward Looking Statements
This press release includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “would,” “may,” “will,” “believe,” “estimate,” “forecast,” “goal,” “project,” “guidance,” “plan,” “potential” and other words of similar meaning, although not all forward-looking statements include these words. This press release includes forward-looking statements. These forward-looking statements address various matters, including statements regarding improving operational efficiency, returning to profitable growth and its ongoing executive recruitment process. Each forward-looking statement contained in this press release is subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, the Company's ability to identify and implement appropriate financial and operational initiatives to improve performance, to identify and recruit executive candidates, to continue gaining new customers, offer new types of tests, integrate its acquisitions and otherwise implement its business plan, and the risks identified under the heading "Risk Factors" contained in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and the Company's other filings with the Securities and Exchange Commission.
We caution investors not to place undue reliance on the forward-looking statements contained in this press release. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this document (unless another date is indicated), and we undertake no obligation to update or revise any of these statements. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.
NeoGenomics, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands) |
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As of December 31, |
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2023 |
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2022 |
||||
ASSETS |
|
|
|
|
||||
Current Assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
342,488 |
|
$ |
263,180 |
||
Marketable securities, at fair value |
|
|
72,715 |
|
|
|
174,809 |
|
Accounts receivable, net |
|
|
131,227 |
|
|
|
119,711 |
|
Inventories |
|
|
24,156 |
|
|
|
24,277 |
|
Prepaid assets |
|
|
17,987 |
|
|
|
15,237 |
|
Other current assets |
|
|
8,239 |
|
|
|
8,077 |
|
Total current assets |
|
|
596,812 |
|
|
|
605,291 |
|
Property and equipment (net of accumulated depreciation of |
|
|
92,012 |
|
|
|
102,499 |
|
Operating lease right-of-use assets |
|
|
91,769 |
|
|
|
96,109 |
|
Intangible assets, net |
|
|
373,128 |
|
|
|
408,260 |
|
Goodwill |
|
|
522,766 |
|
|
|
522,766 |
|
Other assets |
|
|
4,742 |
|
|
|
5,109 |
|
Total non-current assets |
|
|
1,084,417 |
|
|
|
1,134,743 |
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Total assets |
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$ |
1,681,229 |
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|
$ |
1,740,034 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities |
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Accounts payable and other current liabilities |
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$ |
90,694 |
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$ |
83,278 |
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Current portion of equipment financing obligations |
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|
— |
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|
|
70 |
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Current portion of operating lease liabilities |
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|
5,610 |
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|
|
6,584 |
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Total current liabilities |
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96,304 |
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|
89,932 |
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Long-term liabilities |
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Convertible senior notes, net |
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538,198 |
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535,322 |
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Operating lease liabilities |
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|
67,871 |
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|
68,952 |
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Deferred income tax liabilities, net |
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|
24,285 |
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|
34,750 |
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Other long-term liabilities |
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|
13,034 |
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|
13,055 |
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Total long-term liabilities |
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643,388 |
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|
652,079 |
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Total liabilities |
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|
739,692 |
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|
|
742,011 |
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Stockholders’ equity |
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Total stockholders’ equity |
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|
941,537 |
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|
|
998,023 |
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Total liabilities and stockholders’ equity |
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$ |
1,681,229 |
|
|
$ |
1,740,034 |
|
NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share amounts) |
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Three Months Ended December 31, |
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Years Ended December 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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NET REVENUE |
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Clinical Services |
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$ |
130,058 |
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$ |
108,166 |
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$ |
495,636 |
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$ |
418,754 |
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Advanced Diagnostics |
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|
25,494 |
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|
30,539 |
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|
|
96,007 |
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|
|
90,974 |
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Total net revenue |
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|
155,552 |
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|
|
138,705 |
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|
591,643 |
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|
|
509,728 |
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COST OF REVENUE |
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87,964 |
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|
81,880 |
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347,039 |
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|
321,832 |
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GROSS PROFIT |
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67,588 |
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56,825 |
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244,604 |
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|
187,896 |
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Operating expenses: |
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General and administrative |
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59,758 |
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57,855 |
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243,101 |
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243,356 |
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Research and development |
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7,127 |
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6,675 |
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|
|
27,309 |
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|
|
30,326 |
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Sales and marketing |
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|
18,072 |
|
|
|
17,142 |
|
|
|
70,842 |
|
|
|
67,321 |
|
Restructuring charges |
|
|
1,205 |
|
|
|
1,536 |
|
|
|
11,088 |
|
|
|
4,516 |
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Total operating expenses |
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|
86,162 |
|
|
|
83,208 |
|
|
|
352,340 |
|
|
|
345,519 |
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LOSS FROM OPERATIONS |
|
|
(18,574 |
) |
|
|
(26,383 |
) |
|
|
(107,736 |
) |
|
|
(157,623 |
) |
Interest income |
|
|
(4,845 |
) |
|
|
(2,677 |
) |
|
|
(16,902 |
) |
|
|
(6,075 |
) |
Interest expense |
|
|
1,681 |
|
|
|
1,817 |
|
|
|
6,907 |
|
|
|
7,581 |
|
Other expense (income), net |
|
|
(124 |
) |
|
|
1 |
|
|
|
(644 |
) |
|
|
213 |
|
Loss before taxes |
|
|
(15,286 |
) |
|
|
(25,524 |
) |
|
|
(97,097 |
) |
|
|
(159,342 |
) |
Income tax benefit |
|
|
(960 |
) |
|
|
(2,837 |
) |
|
|
(9,129 |
) |
|
|
(15,092 |
) |
NET LOSS |
|
$ |
(14,326 |
) |
|
$ |
(22,687 |
) |
|
$ |
(87,968 |
) |
|
$ |
(144,250 |
) |
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NET LOSS PER SHARE |
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|
|
|
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Basic |
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$ |
(0.11 |
) |
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$ |
(0.18 |
) |
|
$ |
(0.70 |
) |
|
$ |
(1.16 |
) |
Diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.70 |
) |
|
$ |
(1.16 |
) |
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
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|
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|
|
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||||||||
Basic |
|
|
125,929 |
|
|
|
124,714 |
|
|
|
125,502 |
|
|
|
124,217 |
|
Diluted |
|
|
125,929 |
|
|
|
124,714 |
|
|
|
125,502 |
|
|
|
124,217 |
|
NeoGenomics, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) |
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Years Ended December 31, |
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|
|
2023 |
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2022 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
Net loss |
|
$ |
(87,968 |
) |
|
$ |
(144,250 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
|
|
37,450 |
|
|
|
35,372 |
|
Amortization of intangibles |
|
|
35,133 |
|
|
|
34,058 |
|
Non-cash stock-based compensation |
|
|
24,633 |
|
|
|
24,672 |
|
Non-cash operating lease expense |
|
|
9,235 |
|
|
|
9,775 |
|
Amortization of convertible debt discount and debt issue costs |
|
|
2,876 |
|
|
|
2,839 |
|
Loss on disposal of assets |
|
|
292 |
|
|
|
2,858 |
|
Gain on sale of assets held for sale |
|
|
— |
|
|
|
(2,048 |
) |
Impairment of long-lived assets |
|
|
1,703 |
|
|
|
718 |
|
Other adjustments |
|
|
186 |
|
|
|
1,714 |
|
Changes in assets and liabilities, net: |
|
|
(25,493 |
) |
|
|
(31,701 |
) |
Net cash used in operating activities |
|
$ |
(1,953 |
) |
|
$ |
(65,993 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES |
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|
|
|
||||
Purchases of marketable securities |
|
|
(6,756 |
) |
|
|
(97,605 |
) |
Proceeds from sales and maturities of marketable securities |
|
|
112,215 |
|
|
|
116,915 |
|
Purchases of property and equipment |
|
|
(28,752 |
) |
|
|
(30,891 |
) |
Proceeds from assets held for sale |
|
|
— |
|
|
|
12,098 |
|
Net cash provided by investing activities |
|
$ |
76,707 |
|
|
$ |
517 |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
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|
|
|
||||
Repayment of equipment financing obligations |
|
|
(70 |
) |
|
|
(758 |
) |
Issuance of common stock, net |
|
|
4,624 |
|
|
|
12,587 |
|
Net cash provided by financing activities |
|
$ |
4,554 |
|
|
$ |
11,829 |
|
Net change in cash and cash equivalents |
|
$ |
79,308 |
|
|
$ |
(53,647 |
) |
|
|
|
|
|
||||
Cash and cash equivalents, beginning of year |
|
|
263,180 |
|
|
|
316,827 |
|
Cash, cash equivalents and restricted cash, end of year |
|
$ |
342,488 |
|
|
$ |
263,180 |
|
Use of Non-GAAP Financial Measures
In order to provide greater transparency regarding our operating performance, the financial results and financial guidance in this press release refer to certain non-GAAP financial measures that involve adjustments to GAAP results. Non-GAAP financial measures exclude certain income and/or expense items that management believes are not directly attributable to the Company’s core operating results and/or certain items that are inconsistent in amounts and frequency, making it difficult to perform a meaningful evaluation of our current or past operating performance. Management believes that the presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors by facilitating the analysis of the Company’s core test-level operating results across reporting periods and when comparing those same results to those published by our peers. These non-GAAP financial measures may also assist investors in evaluating future prospects. Management also uses non-GAAP financial measures for financial and operational decision making, planning and forecasting purposes and to manage the business. These non-GAAP financial measures do not replace the presentation of financial information in accordance with
Definitions of Non-GAAP Measures
Non-GAAP Adjusted EBITDA
“Adjusted EBITDA” is defined by NeoGenomics as net (loss) income from continuing operations before: (i) interest income and expense, (ii) tax (benefit) or expense, (iii) depreciation and amortization expense, (iv) non-cash stock-based compensation expense, and, if applicable in a reporting period, (v) acquisition and integration related expenses, (vi) CEO transition costs, (vii) restructuring costs, and (viii) other significant or non-operating expenses, net.
Non-GAAP Adjusted Cost of Revenue, Adjusted Gross Profit and Adjusted Gross Profit Margin
“Adjusted cost of revenue” is defined by NeoGenomics as cost of revenue before amortization expense of acquired intangible assets.
“Adjusted gross profit” is defined by NeoGenomics as total revenue less adjusted cost of revenue.
“Adjusted gross profit margin” is defined by NeoGenomics as adjusted cost of revenue divided by total revenue.
Non-GAAP Adjusted Net (Loss) Income
“Adjusted net (loss) income” is defined by NeoGenomics as net (loss) income from continuing operations plus: (i) non-cash amortization of intangible assets, (ii) non-cash stock-based compensation expense, and, if applicable in a reporting period, (iii) acquisition and integration related expenses, (iv) CEO transition costs, (v) restructuring costs, and (vi) other significant or non-operating expenses, net. If GAAP net (loss) income is negative and adjusted net (loss) income is positive, adjusted net (loss) income will also be adjusted to reverse any recognized interest expense (including any amortization of discounts) on the convertible notes using the if-converted method unless the effect of this adjustment on both the adjusted net (loss) income and weighted average diluted common shares outstanding would be anti-dilutive. If GAAP net (loss) income is positive and adjusted net (loss) income is negative, adjusted net (loss) income will also be adjusted to reverse any recognized interest expense (including any amortization of discounts) on the convertible notes using the if-converted method.
Non-GAAP Adjusted Diluted EPS
“Adjusted diluted EPS” is defined by NeoGenomics as adjusted net (loss) income divided by adjusted diluted shares outstanding. If GAAP net (loss) income is negative and adjusted net (loss) income is positive, adjusted diluted shares outstanding will also include any options or restricted stock that would be outstanding as dilutive instruments using the treasury stock method and the weighted average number of common shares that would be outstanding if the convertible notes were converted into common stock on the original issue date based on the number of days such common shares would have been outstanding in the reporting period, until the effect of these adjustments are anti-dilutive. If GAAP net (loss) income is positive and adjusted net (loss) income is negative, adjusted diluted shares outstanding will exclude any options or restricted stock that would be outstanding as dilutive instruments using the treasury stock method and the weighted average number of common shares that would be outstanding if the convertible notes were converted into common stock on the original issue date based on the number of days such common shares would have been outstanding in the reporting period.
Reconciliation of GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA (Unaudited, in thousands) |
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Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net loss (GAAP) |
$ |
(14,326 |
) |
|
$ |
(22,687 |
) |
|
$ |
(87,968 |
) |
|
$ |
(144,250 |
) |
Adjustments to net loss: |
|
|
|
|
|
|
|
||||||||
Interest income |
|
(4,845 |
) |
|
|
(2,677 |
) |
|
|
(16,902 |
) |
|
|
(6,075 |
) |
Interest expense |
|
1,681 |
|
|
|
1,817 |
|
|
|
6,907 |
|
|
|
7,581 |
|
Income tax benefit |
|
(960 |
) |
|
|
(2,837 |
) |
|
|
(9,129 |
) |
|
|
(15,092 |
) |
Depreciation |
|
9,578 |
|
|
|
9,478 |
|
|
|
37,450 |
|
|
|
35,372 |
|
Amortization of intangibles |
|
8,783 |
|
|
|
8,588 |
|
|
|
35,133 |
|
|
|
34,058 |
|
EBITDA (non-GAAP) |
|
(89 |
) |
|
|
(8,318 |
) |
|
|
(34,509 |
) |
|
|
(88,406 |
) |
Further adjustments to EBITDA: |
|
|
|
|
|
|
|
||||||||
Acquisition and integration related expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,479 |
|
CEO transition costs |
|
— |
|
|
|
— |
|
|
|
500 |
|
|
|
4,518 |
|
Non-cash stock-based compensation expense |
|
6,990 |
|
|
|
4,662 |
|
|
|
24,633 |
|
|
|
24,672 |
|
Restructuring charges |
|
1,205 |
|
|
|
1,536 |
|
|
|
11,088 |
|
|
|
4,516 |
|
Other significant expenses (income), net(4) |
|
1,242 |
|
|
|
952 |
|
|
|
1,774 |
|
|
|
4,211 |
|
Adjusted EBITDA (non-GAAP) |
$ |
9,348 |
|
|
$ |
(1,168 |
) |
|
$ |
3,486 |
|
|
$ |
(48,010 |
) |
_________________ |
||
(4) |
For the three months ended December 31, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the three months ended December 31, 2022, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the year ended December 31, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the year ended December 31, 2022, other significant (income) expenses, net, includes fees related to a regulatory matter, moving costs, a gain on the sale of a building and other non-recurring items. |
|
Reconciliation of Segment and Consolidated GAAP Cost of Revenue, Gross Profit and Gross Profit Margin to Non-GAAP Adjusted Cost of Revenue, Adjusted Gross Profit and Adjusted Gross Profit Margin (Unaudited, dollars in thousands) |
||||||||||||||||||||||
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||||||||
|
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||||||
Clinical Services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue (GAAP) |
|
$ |
130,058 |
|
|
$ |
108,166 |
|
|
20.2 |
% |
|
$ |
495,636 |
|
|
$ |
418,754 |
|
|
18.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue (GAAP) |
|
$ |
74,027 |
|
|
$ |
64,180 |
|
|
15.3 |
% |
|
$ |
287,059 |
|
|
$ |
261,742 |
|
|
9.7 |
% |
Adjustments to cost of revenue(5) |
|
|
(4,489 |
) |
|
|
(4,264 |
) |
|
|
|
|
(17,280 |
) |
|
|
(17,054 |
) |
|
|
||
Adjusted cost of revenue (non-GAAP) |
|
$ |
69,538 |
|
|
$ |
59,916 |
|
|
16.1 |
% |
|
$ |
269,779 |
|
|
$ |
244,688 |
|
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit (GAAP) |
|
$ |
56,031 |
|
|
$ |
43,986 |
|
|
27.4 |
% |
|
$ |
208,577 |
|
|
$ |
157,012 |
|
|
32.8 |
% |
Adjusted gross profit (non-GAAP) |
|
$ |
60,520 |
|
|
$ |
48,250 |
|
|
25.4 |
% |
|
$ |
225,857 |
|
|
$ |
174,066 |
|
|
29.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit margin (GAAP) |
|
|
43.1 |
% |
|
|
40.7 |
% |
|
|
|
|
42.1 |
% |
|
|
37.5 |
% |
|
|
||
Adjusted gross profit margin (non-GAAP) |
|
|
46.5 |
% |
|
|
44.6 |
% |
|
|
|
|
45.6 |
% |
|
|
41.6 |
% |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advanced Diagnostics: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue (GAAP) |
|
$ |
25,494 |
|
|
$ |
30,539 |
|
|
(16.5 |
)% |
|
$ |
96,007 |
|
|
$ |
90,974 |
|
|
5.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue (GAAP) |
|
$ |
13,937 |
|
|
$ |
17,700 |
|
|
(21.3 |
)% |
|
$ |
59,980 |
|
|
$ |
60,090 |
|
|
(0.2 |
)% |
Adjustments to cost of revenue(6) |
|
|
(590 |
) |
|
|
(590 |
) |
|
|
|
|
(2,358 |
) |
|
|
(2,358 |
) |
|
|
||
Adjusted cost of revenue (non-GAAP) |
|
$ |
13,347 |
|
|
$ |
17,110 |
|
|
(22.0 |
)% |
|
$ |
57,622 |
|
|
$ |
57,732 |
|
|
(0.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit (GAAP) |
|
$ |
11,557 |
|
|
$ |
12,839 |
|
|
(10.0 |
)% |
|
$ |
36,027 |
|
|
$ |
30,884 |
|
|
16.7 |
% |
Adjusted gross profit (non-GAAP) |
|
$ |
12,147 |
|
|
$ |
13,429 |
|
|
(9.5 |
)% |
|
$ |
38,385 |
|
|
$ |
33,242 |
|
|
15.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit margin (GAAP) |
|
|
45.3 |
% |
|
|
42.0 |
% |
|
|
|
|
37.5 |
% |
|
|
33.9 |
% |
|
|
||
Adjusted gross profit margin (non-GAAP) |
|
|
47.6 |
% |
|
|
44.0 |
% |
|
|
|
|
40.0 |
% |
|
|
36.5 |
% |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue (GAAP) |
|
$ |
155,552 |
|
|
$ |
138,705 |
|
|
12.1 |
% |
|
$ |
591,643 |
|
|
$ |
509,728 |
|
|
16.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue (GAAP) |
|
$ |
87,964 |
|
|
$ |
81,880 |
|
|
7.4 |
% |
|
$ |
347,039 |
|
|
$ |
321,832 |
|
|
7.8 |
% |
Adjustments to cost of revenue(5)(6) |
|
|
(5,079 |
) |
|
|
(4,854 |
) |
|
|
|
|
(19,638 |
) |
|
|
(19,412 |
) |
|
|
||
Adjusted cost of revenue (non-GAAP) |
|
$ |
82,885 |
|
|
$ |
77,026 |
|
|
7.6 |
% |
|
$ |
327,401 |
|
|
$ |
302,420 |
|
|
8.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit (GAAP) |
|
$ |
67,588 |
|
|
$ |
56,825 |
|
|
18.9 |
% |
|
$ |
244,604 |
|
|
$ |
187,896 |
|
|
30.2 |
% |
Adjusted gross profit (non-GAAP) |
|
$ |
72,667 |
|
|
$ |
61,679 |
|
|
17.8 |
% |
|
$ |
264,242 |
|
|
$ |
207,308 |
|
|
27.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit margin (GAAP) |
|
|
43.5 |
% |
|
|
41.0 |
% |
|
|
|
|
41.3 |
% |
|
|
36.9 |
% |
|
|
||
Adjusted gross profit margin (non-GAAP) |
|
|
46.7 |
% |
|
|
44.5 |
% |
|
|
|
|
44.7 |
% |
|
|
40.7 |
% |
|
|
||
_________________ |
||
(5) |
Clinical Services cost of revenue adjustments for the three months ended December 31, 2023 and 2022 include |
|
(6) |
Advanced Diagnostics cost of revenue adjustments for the three months ended December 31, 2023 and 2022 include |
|
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Loss and GAAP EPS to Non-GAAP Adjusted EPS (Unaudited, in thousands, except per share amounts) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net loss (GAAP) |
$ |
(14,326 |
) |
|
$ |
(22,687 |
) |
|
$ |
(87,968 |
) |
|
$ |
(144,250 |
) |
Adjustments to net loss: |
|
|
|
|
|
|
|
||||||||
Amortization of intangibles |
|
8,783 |
|
|
|
8,588 |
|
|
|
35,133 |
|
|
|
34,058 |
|
Acquisition and integration related expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,479 |
|
CEO transition costs |
|
— |
|
|
|
— |
|
|
|
500 |
|
|
|
4,518 |
|
Non-cash stock-based compensation expense |
|
6,990 |
|
|
|
4,662 |
|
|
|
24,633 |
|
|
|
24,672 |
|
Restructuring charges |
|
1,205 |
|
|
|
1,536 |
|
|
|
11,088 |
|
|
|
4,516 |
|
Other significant expenses (income), net(7) |
|
1,242 |
|
|
|
952 |
|
|
|
1,774 |
|
|
|
4,211 |
|
Adjusted net (loss) income (non-GAAP) |
$ |
3,894 |
|
|
$ |
(6,949 |
) |
|
$ |
(14,840 |
) |
|
$ |
(69,796 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per diluted share (GAAP) |
|
|
|
|
|
|
|
||||||||
Diluted EPS |
$ |
(0.11 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.70 |
) |
|
$ |
(1.16 |
) |
Adjustments to net loss per diluted share: |
|
|
|
|
|
|
|
||||||||
Amortization of intangibles |
|
0.07 |
|
|
|
0.07 |
|
|
|
0.28 |
|
|
|
0.27 |
|
Acquisition and integration related expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.02 |
|
CEO transition costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
Non-cash stock-based compensation expense |
|
0.06 |
|
|
|
0.04 |
|
|
|
0.20 |
|
|
|
0.20 |
|
Restructuring charges |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.09 |
|
|
|
0.04 |
|
Other significant expenses (income), net(7) |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.03 |
|
Rounding and impact of diluted shares in adjusted diluted share(8) |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
Adjusted diluted EPS (non-GAAP) |
$ |
0.03 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.56 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used in computation of adjusted diluted EPS: |
|
|
|
|
|
|
|
||||||||
Diluted common shares (GAAP) |
|
125,929 |
|
|
|
124,714 |
|
|
|
125,502 |
|
|
|
124,217 |
|
Dilutive effect of options, restricted stock, and converted shares(9)(10) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted diluted shares outstanding (non-GAAP) |
|
125,929 |
|
|
|
124,714 |
|
|
|
125,502 |
|
|
|
124,217 |
|
_________________ |
||
(7) |
For the three months ended December 31, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the three months ended December 31, 2022, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the year ended December 31, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the year ended December 31, 2022, other significant (income) expenses, net, includes fees related to a regulatory matter, moving costs, a gain on the sale of a building and other non-recurring items. |
|
(8) |
This adjustment is for rounding and, in those periods in which GAAP net (loss) income is negative and adjusted net (loss) income is positive or GAAP net (loss) income is positive and adjusted net (loss) income is negative, also compensates for the effects of additional diluted shares included or excluded in adjusted diluted shares outstanding for the treasury stock impact of outstanding stock options and restricted stock and the if-converted impact of convertible notes. |
|
(9) |
In those periods in which GAAP net (loss) income is negative and adjusted net (loss) income is positive, this adjustment includes any options or restricted stock that would be outstanding as dilutive instruments using the treasury stock method and the weighted average number of common shares that would be outstanding if the convertible notes were converted into common stock on the original issue date based on the number of days such common shares would have been outstanding in the reporting period, until the effect of these adjustments are anti-dilutive. |
|
(10) |
In those periods in which GAAP net (loss) income is positive and adjusted net (loss) income is negative, this adjustment excludes any options or restricted stock that would be outstanding as dilutive instruments using the treasury stock method and the weighted average number of common shares that would be outstanding if the convertible notes were converted into common stock on the original issue date based on the number of days such common shares would have been outstanding in the reporting period. |
|
Reconciliation of Non-GAAP Financial Guidance to Corresponding GAAP Measures (Unaudited, in thousands, except per share amounts) |
|||||||
GAAP net loss in 2024 will be impacted by certain charges, including: (i) expense related to the amortization of intangible assets, (ii) non-cash stock based compensation and (iii) restructuring charges. These charges have been included in GAAP net loss available to stockholders and GAAP net loss per share; however, they have been removed from adjusted net loss and adjusted diluted net loss per share. |
|||||||
The following table reconciles the Company’s 2024 outlook for net loss and EPS to the corresponding non-GAAP measures of adjusted net loss, adjusted EBITDA, and adjusted diluted EPS: |
|||||||
|
Year Ended December 31, 2024 |
||||||
|
Low Range |
|
High Range |
||||
Net loss (GAAP) |
$ |
(72,000 |
) |
|
$ |
(65,000 |
) |
Amortization of intangibles |
|
35,000 |
|
|
|
35,000 |
|
Non-cash stock-based compensation |
|
27,000 |
|
|
|
26,000 |
|
Restructuring charges |
|
7,000 |
|
|
|
6,000 |
|
Acquisition and integration related expenses |
|
— |
|
|
|
— |
|
Other one-time expenses |
|
3,000 |
|
|
|
3,000 |
|
Adjusted net loss (non-GAAP) |
|
— |
|
|
|
5,000 |
|
Interest and taxes |
|
(20,000 |
) |
|
|
(20,000 |
) |
Depreciation |
|
41,000 |
|
|
|
39,000 |
|
Adjusted EBITDA (non-GAAP) |
$ |
21,000 |
|
|
$ |
24,000 |
|
|
|
|
|
||||
Net loss per diluted share (GAAP) |
$ |
(0.57 |
) |
|
$ |
(0.51 |
) |
Adjustments to net loss per diluted share: |
|
|
|
||||
Amortization of intangibles |
|
0.28 |
|
|
|
0.28 |
|
Non-cash stock-based compensation expenses |
|
0.21 |
|
|
|
0.20 |
|
Restructuring charges |
|
0.06 |
|
|
|
0.05 |
|
Other one-time expenses |
|
0.02 |
|
|
|
0.02 |
|
Rounding and impact of diluted shares in adjusted diluted shares(11) |
|
— |
|
|
|
— |
|
Adjusted diluted EPS(12) (non-GAAP) |
$ |
— |
|
|
$ |
0.04 |
|
|
|
|
|
||||
Weighted average assumed shares outstanding in 2024: |
|
|
|
||||
Diluted shares (GAAP) |
|
127,000 |
|
|
|
127,000 |
|
Options, restricted stock, and converted shares not included in diluted shares(12) |
|
— |
|
|
|
— |
|
Adjusted diluted shares outstanding (non-GAAP) |
|
127,000 |
|
|
|
127,000 |
|
_________________ |
||
(11) |
This adjustment is for rounding and, in those periods in which GAAP net (loss) income is negative and adjusted net (loss) income is positive, also compensates for the effects of additional diluted shares included in adjusted diluted shares outstanding for the treasury stock impact of outstanding stock options and restricted stock and the if-converted impact of convertible notes. |
|
(12) |
For those periods in which GAAP net (loss) income is negative and adjusted net (loss) income is positive, this adjustment includes any options or restricted stock that would be outstanding as dilutive instruments using the treasury stock method and the weighted average number of shares that would be outstanding if the convertible notes were converted into common stock on the original issue date based on the number of days such shares would have been outstanding in the reporting period, until the effect of these adjustments are anti-dilutive. |
|
Supplemental Information Clinical(13) Tests Performed and Revenue (Unaudited) |
|||||||||||||||||||||
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||||||||
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||||||
Clinical(13): |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of tests performed |
|
294,850 |
|
|
278,089 |
|
6.0 |
% |
|
|
1,165,079 |
|
|
1,088,055 |
|
7.1 |
% |
||||
Average revenue/test |
$ |
441 |
|
|
$ |
389 |
|
|
13.4 |
% |
|
$ |
425 |
|
|
$ |
385 |
|
|
10.4 |
% |
_________________ |
||
(13) |
Excludes tests and revenue for Advanced Diagnostics. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240220629069/en/
NeoGenomics, Inc.
Kendra Sweeney
Vice President, Investor Relations and ESG
kendra.sweeney@neogenomics.com
T: +1-239-877-7474
Source: NeoGenomics, Inc.
FAQ
What was the percentage increase in fourth-quarter revenue for NeoGenomics in 2023?
How much was the full-year revenue increase for NeoGenomics in 2023?
What was the percentage decrease in Advanced Diagnostics revenue in the fourth quarter of 2023 for NeoGenomics?
What was the percentage decrease in net loss for NeoGenomics in the fourth quarter of 2023?
What was the percentage increase in Adjusted EBITDA for NeoGenomics in the fourth quarter of 2023?
What is NeoGenomics' 2024 financial guidance for consolidated revenue?
What is the participant access code for NeoGenomics' conference call to discuss its fourth quarter and full year 2023 results?
