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NeoGenomics Reports Third Quarter 2024 Results

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NeoGenomics (NEO) reported strong Q3 2024 results with consolidated revenue increasing 10% to $168 million. Clinical Services revenue grew 14% to $146 million, while Advanced Diagnostics revenue decreased 10% to $22 million. The company achieved a 305% increase in Adjusted EBITDA to $13 million, marking its fifth consecutive quarter of positive Adjusted EBITDA. Net loss decreased 4% to $18 million. Based on strong performance, NeoGenomics raised its full-year 2024 Adjusted EBITDA guidance to $37-$40 million. Clinical test volume increased 9% year-over-year, with average revenue per test rising 5% to $463.

NeoGenomics (NEO) ha riportato risultati solidi per il terzo trimestre del 2024, con ricavi consolidati in aumento del 10% a 168 milioni di dollari. I ricavi dei Servizi Clinici sono aumentati del 14% a 146 milioni di dollari, mentre i ricavi da Diagnostica Avanzata sono diminuiti del 10% a 22 milioni di dollari. L'azienda ha registrato un incremento del 305% dell'EBITDA Rettificato, raggiungendo 13 milioni di dollari, segnando il quinto trimestre consecutivo di EBITDA Rettificato positivo. La perdita netta è diminuita del 4% a 18 milioni di dollari. Sulla base delle solide performance, NeoGenomics ha alzato le previsioni dell'EBITDA Rettificato per l'intero anno 2024 a 37-40 milioni di dollari. Il volume dei test clinici è aumentato del 9% rispetto all'anno precedente, con un ricavo medio per test che è salito del 5% a 463 dollari.

NeoGenomics (NEO) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos consolidados que aumentaron un 10% a 168 millones de dólares. Los ingresos por Servicios Clínicos crecieron un 14% hasta 146 millones de dólares, mientras que los ingresos por Diagnósticos Avanzados disminuyeron un 10% a 22 millones de dólares. La compañía logró un aumento del 305% en EBITDA Ajustado, alcanzando los 13 millones de dólares, marcando su quinto trimestre consecutivo de EBITDA Ajustado positivo. La pérdida neta se redujo un 4% a 18 millones de dólares. Con base en un desempeño sólido, NeoGenomics elevó su guía de EBITDA Ajustado para todo el año 2024 a 37-40 millones de dólares. El volumen de pruebas clínicas aumentó un 9% en comparación con el año anterior, con un ingreso promedio por prueba que subió un 5% a 463 dólares.

NeoGenomics (NEO)는 2024년 3분기 실적을 발표하며 매출이 10% 증가한 1억6800만 달러에 도달했다고 보고했습니다. 임상 서비스 매출은 14% 증가하여 1억4600만 달러에 이르렀지만, 고급 진단 서비스 매출은 10% 감소하여 2200만 달러가 되었습니다. 회사는 조정된 EBITDA에서 305% 증가를 기록하며 1300만 달러에 도달했으며, 이는 긍정적인 조정 EBITDA가 다섯 분기 연속임을 나타냅니다. 순손실은 4% 감소하여 1800만 달러가 되었습니다. 강력한 성과를 바탕으로 NeoGenomics는 2024년 전체 연도 조정 EBITDA 가이던스를 3700만에서 4000만 달러로 상향 조정했습니다. 임상 테스트 볼륨은 전년 대비 9% 증가했으며, 평균 테스트당 매출은 5% 증가하여 463달러에 달했습니다.

NeoGenomics (NEO) a annoncé de bons résultats pour le troisième trimestre de 2024, avec des revenus consolidés en hausse de 10% à 168 millions de dollars. Les revenus des Services Cliniques ont augmenté de 14% à 146 millions de dollars, tandis que les revenus des Diagnostics Avancés ont diminué de 10% à 22 millions de dollars. L'entreprise a enregistré une augmentation de 305% de l'EBITDA Ajusté, atteignant 13 millions de dollars, marquant son cinquième trimestre consécutif d'EBITDA Ajusté positif. La perte nette a diminué de 4% à 18 millions de dollars. Sur la base de performances solides, NeoGenomics a relevé ses prévisions d'EBITDA Ajusté pour l'année 2024 à 37-40 millions de dollars. Le volume des tests cliniques a augmenté de 9% d'une année sur l'autre, avec un revenu moyen par test en hausse de 5% à 463 dollars.

NeoGenomics (NEO) meldete für das dritte Quartal 2024 starke Ergebnisse mit konsolidierten Einnahmen, die um 10% auf 168 Millionen Dollar gestiegen sind. Die Einnahmen aus klinischen Dienstleistungen wuchsen um 14% auf 146 Millionen Dollar, während die Einnahmen aus fortgeschrittener Diagnostik um 10% auf 22 Millionen Dollar sanken. Das Unternehmen erzielte einen Anstieg des bereinigten EBITDA um 305% auf 13 Millionen Dollar und markierte damit das fünfte aufeinanderfolgende Quartal mit positivem bereinigtem EBITDA. Der Nettoverlust verringerte sich um 4% auf 18 Millionen Dollar. Basierend auf den starken Leistungen hob NeoGenomics seine Prognose für das gesamte Jahr 2024 für das bereinigte EBITDA auf 37-40 Millionen Dollar an. Das Volumen klinischer Tests stieg im Vergleich zum Vorjahr um 9%, wobei der durchschnittliche Umsatz pro Test um 5% auf 463 Dollar anstieg.

Positive
  • Consolidated revenue increased 10% to $168 million
  • Clinical Services revenue grew 14% to $146 million
  • Adjusted EBITDA increased 305% to $13 million
  • Average revenue per clinical test increased 5% to $463
  • Gross profit increased 20.2% year-over-year
  • Raised full-year 2024 Adjusted EBITDA guidance to $37-$40 million
  • Strong cash position with $388 million in cash and marketable securities
Negative
  • Net loss of $18 million in Q3 2024
  • Advanced Diagnostics revenue decreased 10% to $22 million
  • Operating expenses increased 11% to $96 million
  • Lower RaDaR® revenue reported

Insights

NEO delivered a robust Q3 with notable financial improvements. $168M consolidated revenue represents a 10% YoY growth, driven by Clinical Services' 14% increase to $146M. The 305% surge in Adjusted EBITDA to $13M marks the fifth consecutive profitable quarter, demonstrating operational efficiency.

Key metrics show strengthening fundamentals: 9% clinical test volume growth and 5% increase in revenue per test to $463 indicate improved pricing power. The revised FY2024 guidance raising Adjusted EBITDA to $37-40M reflects management's confidence in sustained momentum.

Despite the $18M net loss, the 4% YoY improvement and positive Adjusted Net Income of $7M suggest progress toward profitability. Strong liquidity with $388M cash position provides financial flexibility for growth initiatives.

Adjusted EBITDA Improves 305%; Fifth Consecutive Quarter of Positive Adjusted EBITDA; Increasing FY Guidance to $37-$40 Million

FORT MYERS, Fla.--(BUSINESS WIRE)-- NeoGenomics, Inc. (NASDAQ: NEO) (the Company), a leading oncology testing services company, today announced its third-quarter results for the period ended September 30, 2024.

Third Quarter 2024 Highlights As Compared To Third Quarter 2023

 
  • Consolidated revenue increased 10% to $168 million
  • Clinical Services revenue increased 14% to $146 million
  • Advanced Diagnostics revenue decreased 10% to $22 million
  • Net loss decreased 4% to $18 million
  • Adjusted EBITDA increased 305% to positive $13 million

“We delivered a strong third quarter, again growing revenue by double digits and increasing adjusted EBITDA by over 300%, all while serving a record number of patients,” said Chris Smith, Chief Executive Officer of NeoGenomics. “Our results demonstrate our teammates' commitment to executing on our strategic priorities. This disciplined approach has enabled us to increase our adjusted EBITDA expectations for the year while continuing to position the Company for long term, sustainable growth.”

Third-Quarter Results

Consolidated revenue for the third quarter of 2024 was $168 million, an increase of 10% over the same period in 2023. Clinical Services revenue of $146 million increased year-over-year by 14%. Clinical test volume(1) increased by 9% year-over-year. Average revenue per clinical test (“revenue per test”) increased by 5% to $463. These increases in Clinical Services reflect higher value tests, including NGS, and strategic reimbursement initiatives. Advanced Diagnostics revenue decreased by 10% to $22 million compared to the third quarter of 2023 primarily driven by international site closures, restructuring activities and lower RaDaR® revenue.

Consolidated gross profit for the third quarter of 2024 was $74.9 million, an increase of 20.2% compared to the third quarter of 2023. This increase was primarily due to an increase in revenue partially offset by higher compensation and benefit costs. Consolidated gross profit margin, including amortization of acquired intangible assets and stock-based compensation expense, was 44.6%. Adjusted Gross Profit Margin(2), excluding amortization of acquired intangible assets and stock-based compensation expense, was 47.8%.

Operating expenses for the third quarter of 2024 were $96 million, an increase of $10 million, or 11%, compared to the third quarter of 2023. Operating expenses included higher compensation and benefit costs as well as an increase in legal and professional fees including a settlement payment for IP litigation. These increases were partially offset by a decrease in restructuring activities.

Net loss for the quarter decreased $1 million, or 4%, to $18 million compared to net loss of $19 million for the third quarter of 2023.

Adjusted EBITDA(2) increased $10 million, or 305%, to positive $13 million compared to positive $3 million in the third quarter of 2023. Adjusted Net Income(2) was $7 million compared to Adjusted Net Loss(2) of $0.3 million in the third quarter of 2023.

Cash and cash equivalents and marketable securities totaled $388 million at quarter end.

2024 Financial Guidance(3)

The Company again revised its full-year 2024 guidance(3), as previously revised on July 29, 2024.

 

 

FY 2023

 

Previously Revised
FY 2024 Guidance

 

Revised
FY 2024 Guidance(3)

 

YOY % Change from
FY 2023

(in millions)

 

Actual

 

Low

 

High

 

Low

 

High

 

Low

 

High

Consolidated revenue

 

$

592

 

 

$

655

 

 

$

667

 

 

$

655

 

 

$

667

 

 

11

%

 

13

%

Net loss

 

$

(88

)

 

$

(88

)

 

$

(81

)

 

$

(81

)

 

$

(78

)

 

8

%

 

11

%

Adjusted EBITDA

 

$

3

 

 

$

33

 

 

$

37

 

 

$

37

 

 

$

40

 

 

1133

%

 

1233

%

______________________________________

(1)

 

Clinical testing excludes tests and revenue for Advanced Diagnostics.

(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) Income, 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.

(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 third quarter 2024 results on Tuesday, November 5, 2024 at 8:30 a.m. Eastern Time. To access the live call via telephone, interested investors should dial (888) 506-0062 (domestic) or (973) 528-0011 (international) at least five minutes prior to the call. The participant access code provided for this call is 676597. The live webcast may be accessed by visiting the Investor Relations section of our website at ir.neogenomics.com. A replay of the webcast will be available shortly after the conclusion of the call and will be archived on the Company’s website.

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 Fort Myers, FL, NeoGenomics operates CAP accredited and CLIA certified laboratories for full-service sample processing in Fort Myers, Florida; Aliso Viejo and Carlsbad, California; Research Triangle Park, North Carolina; and Houston, Texas; and a CAP accredited full-service, sample-processing laboratory in Cambridge, United Kingdom. NeoGenomics also has several, small, non-processing laboratory locations across the United States for providing analysis services. NeoGenomics serves the needs of pathologists, oncologists, academic centers, hospital systems, pharmaceutical firms, integrated service delivery networks, and managed care organizations throughout the United States, and a pharmaceutical firm in Europe.

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 the Company's 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
(in thousands)

 

 

 

September 30, 2024
(unaudited)

 

December 31, 2023

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

361,992

 

$

342,488

Marketable securities, at fair value

 

 

25,821

 

 

72,715

Accounts receivable, net

 

 

151,428

 

 

131,227

Inventories

 

 

24,457

 

 

24,156

Prepaid assets

 

 

18,235

 

 

17,987

Other current assets

 

 

8,308

 

 

8,239

Total current assets

 

 

590,241

 

 

596,812

Property and equipment, net

 

 

93,038

 

 

92,012

Operating lease right-of-use assets

 

 

81,442

 

 

91,769

Intangible assets, net

 

 

348,042

 

 

373,128

Goodwill

 

 

522,766

 

 

522,766

Other assets

 

 

5,582

 

 

4,742

Total non-current assets

 

 

1,050,870

 

 

1,084,417

Total assets

 

$

1,641,111

 

$

1,681,229

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable and other current liabilities

 

$

92,266

 

$

90,694

Current portion of operating lease liabilities

 

 

3,716

 

 

5,610

Current portion of convertible senior notes, net

 

 

200,424

 

 

Total current liabilities

 

 

296,406

 

 

96,304

Long-term liabilities

 

 

 

 

Operating lease liabilities

 

 

62,172

 

 

67,871

Convertible senior notes, net

 

 

339,956

 

 

538,198

Deferred income tax liabilities, net

 

 

22,771

 

 

24,285

Other long-term liabilities

 

 

11,596

 

 

13,034

Total long-term liabilities

 

 

436,495

 

 

643,388

Total liabilities

 

$

732,901

 

$

739,692

Stockholders’ equity

 

 

 

 

Total stockholders’ equity

 

$

908,210

 

$

941,537

Total liabilities and stockholders’ equity

 

$

1,641,111

 

$

1,681,229

NeoGenomics, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

2023

 

2024

 

2023

NET REVENUE

 

 

 

 

 

 

 

 

Clinical Services

 

$ 145,783

 

$ 127,553

 

$ 421,706

 

$ 365,578

Advanced Diagnostics

 

22,041

 

24,401

 

66,860

 

70,513

Total net revenue

 

167,824

 

151,954

 

488,566

 

436,091

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

92,944

 

89,643

 

275,723

 

259,075

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

74,880

 

62,311

 

212,843

 

177,016

Operating expenses:

 

 

 

 

 

 

 

 

General and administrative

 

66,969

 

61,486

 

196,094

 

183,343

Research and development

 

7,684

 

5,285

 

23,190

 

20,182

Sales and marketing

 

20,415

 

17,610

 

62,313

 

52,770

Restructuring charges

 

1,009

 

2,125

 

4,951

 

9,883

Total operating expenses

 

96,077

 

86,506

 

286,548

 

266,178

LOSS FROM OPERATIONS

 

(21,197)

 

(24,195)

 

(73,705)

 

(89,162)

Interest income

 

(4,673)

 

(4,525)

 

(14,099)

 

(12,057)

Interest expense

 

1,642

 

1,685

 

4,993

 

5,226

Other (income) expense, net

 

(317)

 

96

 

(52)

 

(520)

Loss before taxes

 

(17,849)

 

(21,451)

 

(64,547)

 

(81,811)

Income tax benefit

 

(150)

 

(2,935)

 

(1,145)

 

(8,169)

NET LOSS

 

$ (17,699)

 

$ (18,516)

 

$ (63,402)

 

$ (73,642)

 

 

 

 

 

 

 

 

 

NET LOSS PER SHARE

 

 

 

 

 

 

 

 

Basic

 

$ (0.14)

 

$ (0.15)

 

$ (0.50)

 

$ (0.59)

Diluted

 

$ (0.14)

 

$ (0.15)

 

$ (0.50)

 

$ (0.59)

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

Basic

 

126,953

 

125,687

 

126,491

 

125,358

Diluted

 

126,953

 

125,687

 

126,491

 

125,358

NeoGenomics, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

 

 

Nine Months Ended September 30,

 

 

2024

 

2023

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net loss

 

$

(63,402

)

 

$

(73,642

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation

 

 

29,274

 

 

 

27,872

 

Amortization of intangibles

 

 

25,085

 

 

 

26,350

 

Stock-based compensation

 

 

25,085

 

 

 

17,643

 

Non-cash operating lease expense

 

 

7,022

 

 

 

6,860

 

Amortization of convertible debt discount and debt issue costs

 

 

2,182

 

 

 

2,154

 

Impairment of assets

 

 

333

 

 

 

1,703

 

Loss on disposal of assets, net

 

 

63

 

 

 

334

 

Other adjustments

 

 

141

 

 

 

122

 

Changes in assets and liabilities, net

 

 

(28,560

)

 

 

(29,133

)

Net cash used in operating activities

 

 

(2,777

)

 

 

(19,737

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Purchases of marketable securities

 

 

 

 

 

(6,756

)

Proceeds from maturities of marketable securities

 

 

47,784

 

 

 

87,963

 

Purchases of property and equipment

 

 

(29,462

)

 

 

(21,695

)

Net cash provided by investing activities

 

 

18,322

 

 

 

59,512

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Repayment of equipment financing obligations

 

 

 

 

 

(66

)

Issuance of common stock, net

 

 

3,959

 

 

 

3,350

 

Net cash provided by financing activities

 

 

3,959

 

 

 

3,284

 

Net change in cash and cash equivalents

 

 

19,504

 

 

 

43,059

 

Cash and cash equivalents, beginning of period

 

 

342,488

 

 

 

263,180

 

Cash and cash equivalents, end of period

 

$

361,992

 

 

$

306,239

 

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 U.S. GAAP financial results, should not be considered measures of liquidity, and are unlikely to be comparable to non-GAAP financial measures provided by other companies.

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, (ii) interest expense, (iii) tax (benefit) or expense, (iv) depreciation and amortization expense, (v) stock-based compensation expense, and, if applicable in a reporting period, (vi) restructuring charges, (vii) intellectual property (“IP”) litigation costs, (viii) CEO transition costs, and (ix) other significant or non-operating (income) or 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: (i) amortization of acquired intangible assets, and, if applicable in a reporting period, (ii) stock-based compensation expense.

“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) amortization of intangible assets, (ii) stock-based compensation expense, and, if applicable in a reporting period, (iii) restructuring charges, (iv) IP litigation costs, (v) CEO transition costs, and (vi) other significant or non-operating (income) or 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
(in thousands)
(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2024

 

2023

 

2024

 

2023

Net loss (GAAP)

$

(17,699

)

 

$

(18,516

)

 

$

(63,402

)

 

$

(73,642

)

Adjustments to net loss:

 

 

 

 

 

 

 

Interest income

 

(4,673

)

 

 

(4,525

)

 

 

(14,099

)

 

 

(12,057

)

Interest expense

 

1,642

 

 

 

1,685

 

 

 

4,993

 

 

 

5,226

 

Income tax benefit

 

(150

)

 

 

(2,935

)

 

 

(1,145

)

 

 

(8,169

)

Depreciation

 

9,623

 

 

 

9,349

 

 

 

29,274

 

 

 

27,872

 

Amortization of intangibles

 

8,362

 

 

 

8,784

 

 

 

25,085

 

 

 

26,350

 

EBITDA (non-GAAP)

$

(2,895

)

 

$

(6,158

)

 

$

(19,294

)

 

$

(34,420

)

Further adjustments to EBITDA:

 

 

 

 

 

 

 

CEO transition costs

 

 

 

 

 

 

 

 

 

 

500

 

Stock-based compensation expense

 

8,470

 

 

 

7,180

 

 

 

25,085

 

 

 

17,643

 

Restructuring charges

 

1,009

 

 

 

2,125

 

 

 

4,951

 

 

 

9,883

 

IP litigation costs(4)

 

6,113

 

 

 

 

 

 

12,356

 

 

 

 

Other significant expenses, net(5)

 

677

 

 

 

158

 

 

 

4,637

 

 

 

532

 

Adjusted EBITDA (non-GAAP)

$

13,374

 

 

$

3,305

 

 

$

27,735

 

 

$

(5,862

)

_________________

(4)

 

For the three and nine months ended September 30, 2024, IP litigation costs include a legal fees and a settlement payment. There were no such amounts for the three and nine months ended September 30, 2023.

(5)

 

For the three months ended September 30, 2024, other significant (income) expenses, net, includes site closure costs, and fees related to non-recurring legal matters. For the three months ended September 30, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the nine months ended September 30, 2024, other significant (income) expenses, net, includes site closure costs, severance costs, and fees related to non-recurring legal matters. For the nine months ended September 30, 2023, other significant (income) expenses, net, fees related to a regulatory matter 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
(dollars in thousands)
(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

2023

 

% Change

 

2024

 

2023

 

% Change

Clinical Services:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue (GAAP)

 

$

145,783

 

 

$

127,553

 

 

14.3

%

 

$

421,706

 

 

$

365,578

 

 

15.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (GAAP)

 

$

80,058

 

 

$

73,994

 

 

8.2

%

 

$

234,996

 

 

$

213,032

 

 

10.3

%

Adjustments to cost of revenue(6)

 

 

(4,561

)

 

 

(4,264

)

 

 

 

 

(13,720

)

 

 

(12,792

)

 

 

Adjusted cost of revenue (non-GAAP)

 

$

75,497

 

 

$

69,730

 

 

8.3

%

 

$

221,276

 

 

$

200,240

 

 

10.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (GAAP)

 

$

65,725

 

 

$

53,559

 

 

22.7

%

 

$

186,710

 

 

$

152,546

 

 

22.4

%

Adjusted gross profit (non-GAAP )

 

$

70,286

 

 

$

57,823

 

 

21.6

%

 

$

200,430

 

 

$

165,338

 

 

21.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit margin (GAAP)

 

 

45.1

%

 

 

42.0

%

 

 

 

 

44.3

%

 

 

41.7

%

 

 

Adjusted gross profit margin (non-GAAP)

 

 

48.2

%

 

 

45.3

%

 

 

 

 

47.5

%

 

 

45.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Diagnostics:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue (GAAP)

 

$

22,041

 

 

$

24,401

 

 

(9.7

)%

 

$

66,860

 

 

$

70,513

 

 

(5.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (GAAP)

 

$

12,886

 

 

$

15,649

 

 

(17.7

)%

 

$

40,727

 

 

$

46,043

 

 

(11.5

)%

Adjustments to cost of revenue(7)

 

 

(702

)

 

 

(589

)

 

 

 

 

(2,115

)

 

 

(1,768

)

 

 

Adjusted cost of revenue (non-GAAP)

 

$

12,184

 

 

$

15,060

 

 

(19.1

)%

 

$

38,612

 

 

$

44,275

 

 

(12.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (GAAP)

 

$

9,155

 

 

$

8,752

 

 

4.6

%

 

$

26,133

 

 

$

24,470

 

 

6.8

%

Adjusted gross profit (non-GAAP )

 

$

9,857

 

 

$

9,341

 

 

5.5

%

 

$

28,248

 

 

$

26,238

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit margin (GAAP)

 

 

41.5

%

 

 

35.9

%

 

 

 

 

39.1

%

 

 

34.7

%

 

 

Adjusted gross profit margin (non-GAAP)

 

 

44.7

%

 

 

38.3

%

 

 

 

 

42.2

%

 

 

37.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue (GAAP)

 

$

167,824

 

 

$

151,954

 

 

10.4

%

 

$

488,566

 

 

$

436,091

 

 

12.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (GAAP)

 

$

92,944

 

 

$

89,643

 

 

3.7

%

 

$

275,723

 

 

$

259,075

 

 

6.4

%

Adjustments to cost of revenue(6)(7)

 

 

(5,263

)

 

 

(4,853

)

 

 

 

 

(15,835

)

 

 

(14,560

)

 

 

Adjusted cost of revenue (non-GAAP)

 

$

87,681

 

 

$

84,790

 

 

3.4

%

 

$

259,888

 

 

$

244,515

 

 

6.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (GAAP)

 

$

74,880

 

 

$

62,311

 

 

20.2

%

 

$

212,843

 

 

$

177,016

 

 

20.2

%

Adjusted gross profit (non-GAAP )

 

$

80,143

 

 

$

67,164

 

 

19.3

%

 

$

228,678

 

 

$

191,576

 

 

19.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit margin (GAAP)

 

 

44.6

%

 

 

41.0

%

 

 

 

 

43.6

%

 

 

40.6

%

 

 

Adjusted gross profit margin (non-GAAP)

 

 

47.8

%

 

 

44.2

%

 

 

 

 

46.8

%

 

 

43.9

%

 

 

_______________

(6)

 

Clinical Services cost of revenue adjustments for the three months ended September 30, 2024 includes $4.3 million of amortization of acquired intangible assets and $0.2 million of stock-based compensation. Clinical Services cost of revenue adjustments for the three months ended September 30, 2023 includes $4.3 million of amortization of acquired intangible assets. Clinical Services cost of revenue adjustments for the nine months ended September 30, 2024 includes $13.0 million of amortization of acquired intangible assets and $0.7 million of stock-based compensation. Clinical Services cost of revenue adjustments for the nine months ended September 30, 2023 includes $12.8 million of amortization of acquired intangible assets. There were no stock-based compensation amounts recorded for the three and nine months ended September 30, 2023.

(7)

 

Advanced Diagnostics cost of revenue adjustments for the three months ended September 30, 2024 includes $0.6 million of amortization of acquired intangible assets and $0.1 million of stock-based compensation. Advanced Diagnostics cost of revenue adjustments for the three months ended September 30, 2023 includes $0.6 million of amortization of acquired intangible assets. Advanced Diagnostics cost of revenue adjustments for the nine months ended September 30, 2024 includes $1.8 million of amortization of acquired intangible assets and $0.3 million of stock-based compensation. Advanced Diagnostics cost of revenue adjustments for the nine months ended September 30, 2023 includes $1.8 million of amortization of acquired intangible assets. There were no stock-based compensation amounts recorded for the three and nine months ended September 30, 2023.

Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Loss and GAAP EPS to Non-GAAP Adjusted EPS
(in thousands, except per share amounts)
(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2024

 

2023

 

2024

 

2023

Net loss (GAAP)

$

(17,699

)

 

$

(18,516

)

 

$

(63,402

)

 

$

(73,642

)

Adjustments to net loss, net of tax:

 

 

 

 

 

 

 

Amortization of intangibles

 

8,362

 

 

 

8,784

 

 

 

25,085

 

 

 

26,350

 

CEO transition costs

 

 

 

 

 

 

 

 

 

 

500

 

Stock-based compensation expense

 

8,470

 

 

 

7,180

 

 

 

25,085

 

 

 

17,643

 

Restructuring charges

 

1,009

 

 

 

2,125

 

 

 

4,951

 

 

 

9,883

 

IP litigation costs(8)

 

6,113

 

 

 

 

 

 

12,356

 

 

 

 

Other significant expenses, net(9)

 

677

 

 

 

158

 

 

 

4,637

 

 

 

532

 

Adjusted net income/(loss) (non-GAAP)

$

6,932

 

 

$

(269

)

 

$

8,712

 

 

$

(18,734

)

 

 

 

 

 

 

 

 

Net loss per common share (GAAP)

 

 

 

 

 

 

 

Diluted EPS

$

(0.14

)

 

$

(0.15

)

 

$

(0.50

)

 

$

(0.59

)

Adjustments to diluted loss income per share:

 

 

 

 

 

 

 

Amortization of intangibles

 

0.07

 

 

 

0.07

 

 

 

0.20

 

 

 

0.21

 

CEO transition costs

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

0.07

 

 

 

0.06

 

 

 

0.20

 

 

 

0.14

 

Restructuring charges

 

0.01

 

 

 

0.02

 

 

 

0.04

 

 

 

0.08

 

IP litigation costs(8)

 

0.05

 

 

 

 

 

 

0.10

 

 

 

 

Other significant expenses, net(9)

 

 

 

 

 

 

 

0.04

 

 

 

 

Rounding and impact of diluted shares in adjusted diluted shares(10)

 

(0.01

)

 

 

 

 

 

(0.01

)

 

 

0.01

 

Adjusted diluted EPS (non-GAAP)

$

0.05

 

 

$

 

 

$

0.07

 

 

$

(0.15

)

 

 

 

 

 

 

 

 

Weighted average shares used in computation of adjusted diluted EPS:

 

 

 

 

 

 

 

Diluted common shares (GAAP)

 

126,953

 

 

 

125,687

 

 

 

126,491

 

 

 

125,358

 

Dilutive effect of options, restricted stock, and converted shares(11)(12)

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted shares outstanding (non-GAAP)

 

126,953

 

 

 

125,687

 

 

 

126,491

 

 

 

125,358

 

_______________

(8)

 

For the three and nine months ended September 30, 2024, IP litigation costs include legal fees and a settlement payment. There were no such amounts for the three and nine months ended September 30, 2023.

(9)

 

For the three months ended September 30, 2024, other significant (income) expenses, net, includes site closure costs, and fees related to non-recurring legal matters. For the three months ended September 30, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the nine months ended September 30, 2024, other significant (income) expenses, net, includes site closure costs, severance costs, and fees related to non-recurring legal matters. For the nine months ended September 30, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items.

(10)

 

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.

(11)

 

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.

(12)

 

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
(in thousands, except per share amounts)
(unaudited)

GAAP net loss in 2024 will be impacted by certain charges, including: (i) expense related to the amortization of intangible assets, (ii) stock-based compensation, (iii) restructuring charges, and (iv) other one-time expenses. 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)

$

(81,000

)

 

$

(78,000

)

Amortization of intangibles

 

33,000

 

 

 

33,000

 

Stock-based compensation expenses

 

33,000

 

 

 

33,000

 

Restructuring charges

 

6,000

 

 

 

6,000

 

Other one-time expenses

 

19,000

 

 

 

19,000

 

Adjusted net income (non-GAAP)

 

10,000

 

 

 

13,000

 

Interest and taxes

 

(12,000

)

 

 

(12,000

)

Depreciation

 

39,000

 

 

 

39,000

 

Adjusted EBITDA (non-GAAP)

$

37,000

 

 

$

40,000

 

 

 

 

 

Net loss per diluted share (GAAP)

$

(0.64

)

 

$

(0.61

)

Adjustments to net loss per diluted share:

 

 

 

Amortization of intangibles

 

0.26

 

 

 

0.26

 

Stock-based compensation expenses

 

0.26

 

 

 

0.26

 

Restructuring charges

 

0.05

 

 

 

0.05

 

Other one-time expenses

 

0.15

 

 

 

0.15

 

Rounding and impact of diluted shares in adjusted diluted shares(13)

 

 

 

 

(0.01

)

Adjusted diluted EPS(14) (non-GAAP)

$

0.08

 

 

$

0.10

 

 

 

 

 

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(14)

 

 

 

 

 

Adjusted diluted shares outstanding (non-GAAP)

 

127,000

 

 

 

127,000

 

_________________

(13)

 

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.

(14)

 

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 September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

% Change

 

2024

 

2023

 

% Change

Clinical(15):

 

 

 

 

 

 

 

 

 

 

 

Number of tests performed

 

314,564

 

 

289,637

 

8.6

%

 

 

927,061

 

 

870,229

 

6.5

%

Average revenue/test

$

463

 

$

440

 

5.2

%

 

$

455

 

$

420

 

8.3

%

_________________

(15)

 

Excludes tests and revenue for Advanced Diagnostics.

 

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 NeoGenomics (NEO) revenue growth in Q3 2024?

NeoGenomics reported a 10% increase in consolidated revenue to $168 million in Q3 2024 compared to Q3 2023.

How much did NeoGenomics (NEO) Adjusted EBITDA improve in Q3 2024?

NeoGenomics' Adjusted EBITDA increased 305% to $13 million in Q3 2024 compared to $3 million in Q3 2023.

What is NeoGenomics (NEO) updated guidance for FY 2024?

NeoGenomics raised its FY 2024 Adjusted EBITDA guidance to $37-$40 million, with consolidated revenue expected between $655-$667 million.

What was NeoGenomics (NEO) Clinical Services performance in Q3 2024?

Clinical Services revenue increased 14% to $146 million, with test volume up 9% and average revenue per test increasing 5% to $463.

NeoGenomics, Inc.

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