Natera Reports Fourth Quarter and Full Year 2023 Financial Results
- Natera reported total revenues of $311.1 million in Q4 2023, a 43.2% increase from Q4 2022.
- Product revenues grew by 44.3% in Q4 2023 compared to the same period in 2022.
- The company processed approximately 2,496,100 tests in 2023, a 20.8% increase from 2022.
- Natera achieved a gross margin of 51.4% in Q4 2023, up from 41.4% in Q4 2022.
- The company expects 2024 total revenue of $1.32 billion-$1.35 billion and aims for a cash flow breakeven quarter in 2024.
- Natera acquired Invitae’s reproductive health assets and received Medicare coverage for Signatera in two new indications, ovarian cancer and neoadjuvant breast cancer.
- None.
Insights
The reported financial results by Natera, Inc. demonstrate significant growth, with a 43.2% increase in quarterly revenues and a 32.0% increase in annual revenues. This growth is underpinned by both an increase in test volumes and improvements in average selling price, which is a strong indicator of the company's pricing power and market acceptance of its products. The expansion of gross margins to 51.4% for the quarter suggests efficiency improvements and successful cost management strategies, which are critical for a company in the biotechnology sector where the cost of goods sold can heavily impact profitability.
However, despite the revenue growth and margin expansion, the company still reported a net loss, though it has narrowed from the previous year. This indicates ongoing investments in R&D and SG&A to support new product offerings, which are essential for long-term growth but can strain short-term profitability. The anticipation of achieving a cash flow breakeven quarter in 2024 is a positive sign for investors, as it suggests a path towards financial sustainability. The acquisition of reproductive health assets from Invitae could be seen as a strategic move to expand its product portfolio, potentially opening new revenue streams.
The increase in oncology test volumes by 73.5% year-over-year is a significant development, reflecting the company's growing presence in the cancer diagnostics market. The Medicare coverage for Signatera in new indications such as ovarian cancer and neoadjuvant breast cancer is a pivotal milestone. This not only broadens the potential user base but also enhances the credibility and clinical acceptance of Natera's tests. For stakeholders, this development could signal an increased addressable market and potentially higher future revenues. The clinical implications of these expanded indications could mean earlier detection and more personalized treatment plans, which are at the forefront of modern oncology.
Natera's performance must be contextualized within the competitive landscape of the cell-free DNA testing market. The company's growth outpaces the industry average, indicating strong market share capture and competitive positioning. The guidance for 2024, projecting revenues of up to $1.35 billion, sets an optimistic tone for the company's trajectory. However, it is essential to monitor how this growth aligns with market trends, such as reimbursement changes, regulatory developments and competitive pressures, which can affect the company's performance.
Investors should also consider the broader economic environment, including potential shifts in healthcare spending and consumer behavior, which could influence the demand for genetic testing services. The company's cash and debt positions provide a cushion for operational flexibility, although the level of debt should be watched closely for its potential impact on future financial health.
Recent Strategic and Financial Highlights
-
Generated total revenues of
$311.1 million $217.3 million 43.2% . Product revenues grew44.3% over the same period. -
Generated total revenues of
$1,082.6 million $820.2 million 32.0% . Product revenues grew34.0% over the same period. -
Generated gross margins of
51.4% in the fourth quarter of 2023, compared to gross margins of41.4% in the fourth quarter of 2022. -
Processed approximately 2,496,100 tests in the full year 2023, compared to approximately 2,066,500 tests in 2022, an increase of
20.8% . -
Performed approximately 97,500 oncology tests in the fourth quarter of 2023, compared to approximately 64,000 in the fourth quarter of 2022, an increase of
52.3% . -
Performed approximately 340,700 oncology tests in the full year 2023, compared to approximately 196,400 in 2022, an increase of
73.5% . -
Guiding 2024 total revenue of
$1.32 billion -$1.35 billion 50% to53% , and reiterating expectations to achieve a cash flow breakeven quarter in 2024. - Acquired Invitae’s reproductive health assets.
- Received Medicare Coverage for Signatera in two new indications, ovarian cancer and neoadjuvant breast cancer.
“We are really pleased with our performance in the quarter and with the continued positive impact we make on patient care,” said Steve Chapman, chief executive officer of Natera. “We believe we are in an excellent position to continue this momentum into 2024.”
Fourth Quarter and Year Ended December 31, 2023 Financial Results
Total revenues were
In the fourth quarter of 2023, Natera recognized revenue on approximately 619,800 tests for which results were reported to customers in the period (tests reported), including approximately 604,200 tests reported from its laboratory, compared to approximately 519,200 tests reported, including approximately 504,500 tests reported from its laboratory, in the fourth quarter of 2022, an overall increase of
Total revenues in 2023 were approximately
For the full year 2023, Natera recognized revenue on approximately 2,388,200 tests reported, including approximately 2,323,400 tests reported from its laboratory, compared to approximately 1,919,600 tests reported, including approximately 1,861,000 tests reported from its laboratory, in 2022, an overall increase of
Gross profit* for the three months ended December 31, 2023 and 2022 was
Loss from operations for the fourth quarter of 2023 was
Natera reported a net loss for the fourth quarter of 2023 of
At December 31, 2023, Natera held approximately
Financial Outlook
Natera anticipates 2024 total revenue of
* Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.
** Cash consumption is calculated as the sum of GAAP net cash used by operating activities (estimated for 2024 to be up to
Test Volume Summary |
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Unit |
Q4 2023 |
Q4 2022 |
FY 2023 |
FY 2022 |
Definition |
Tests processed |
626,800 |
559,700 |
2,496,100 |
2,066,500 |
Tests accessioned in our laboratory plus units processed outside of our laboratory |
Tests accessioned |
610,100 |
543,900 |
2,426,500 |
2,004,000 |
Test accessioned in our laboratory |
Tests reported in our laboratory |
604,200 |
504,500 |
2,323,400 |
1,861,000 |
Total tests reported in our laboratory less units reported outside of our laboratory |
Tests reported |
619,800 |
519,200 |
2,388,200 |
1,919,600 |
Total tests reported |
About Natera
Natera™ is a global leader in cell-free DNA testing, dedicated to oncology, women’s health, and organ health. We aim to make personalized genetic testing and diagnostics part of the standard of care to protect health and enable earlier, more targeted interventions that help lead to longer, healthier lives. Natera’s tests are validated by more than 150 peer-reviewed publications that demonstrate high accuracy. Natera operates ISO 13485-certified and CAP-accredited laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA) in
Conference Call Information
Event: |
Natera's Fourth Quarter and Full Year 2023 Financial Results Conference Call |
Date: |
Wednesday, February 28, 2024 |
Time: |
1:30 p.m. PT (4:30 p.m. ET) |
Live Dial-In: |
(888) 770-7321, Domestic |
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(929) 201-7107, International |
Conference ID: |
7684785 |
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Webcast Link: |
Forward-Looking Statements
This press release contains forward-looking statements under the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts, including the company’s financial guidance for fiscal 2024, its market opportunity, anticipated products and launch schedules, reimbursement coverage and product costs, commercial and strategic partnerships and acquisitions, user experience, clinical trials and studies, and its strategies, goals and general business and market conditions, are forward-looking statements. Any forward-looking statements contained in this press release are based upon Natera’s current plans, estimates, and expectations, as of the date of this release, and are not a representation that such plans, estimates, or expectations will be achieved.
These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face numerous uncertainties and challenges in achieving our financial projections and goals; we may be unable to further increase the use and adoption of our products through our direct sales efforts or through our laboratory partners; we have incurred losses since our inception and we anticipate that we will continue to incur losses for the foreseeable future; our quarterly results may fluctuate from period to period; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate; we may be unable to compete successfully with existing or future products or services offered by our competitors; we may engage in acquisitions, dispositions or other strategic transactions that may not achieve our anticipated benefits and could otherwise disrupt our business, cause dilution to our stockholders or reduce our financial resources; we may not be successful in commercializing our cloud-based distribution model; our products may not perform as expected; the results of our clinical studies, including our SNP-based Microdeletion and Aneuploidy Registry, or SMART, Study, may not be compelling to professional societies or payors as supporting the use of our tests, particularly for microdeletions screening, or may not be able to be replicated in later studies required for regulatory approvals or clearances; if either of our primary CLIA-certified laboratories becomes inoperable, we will be unable to perform our tests and our business will be harmed; we rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers; if we are unable to successfully scale our operations, our business could suffer; the marketing, sale, and use of Panorama and our other products could result in substantial damages arising from product liability or professional liability claims that exceed our resources; we may be unable to expand, obtain or maintain third-party payer coverage and reimbursement for our tests, and we may be required to refund reimbursements already received; third-party payers may withdraw coverage or provide lower levels of reimbursement due to changing policies, billing complexities or other factors; if the FDA were to begin actively regulating our tests, we could incur substantial costs and delays associated with trying to obtain premarket clearance or approval and incur costs associated with complying with post-market controls; litigation or other proceedings, resulting from either third party claims of intellectual property infringement or third party infringement of our technology, is costly, time- consuming and could limit our ability to commercialize our products or services; any inability to effectively protect our proprietary technology could harm our competitive position or our brand; and we cannot guarantee that we will be able to service and comply with our outstanding debt obligations or achieve our expectations regarding the conversion of our outstanding convertible notes.
Additional risks and uncertainties that could affect our financial results are included under the captions, "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our most recent filings on Forms 10-K and 10-Q and in other filings that we make with the SEC from time to time. These documents are available on our website at www.natera.com under the Investor Relations section and on the SEC’s website at www.sec.gov.
In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Natera assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.
Natera, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except shares) |
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December 31, |
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December 31, |
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2023 |
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2022 |
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(1) |
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Assets |
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Current assets: |
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Cash, cash equivalents and restricted cash |
|
$ |
642,095 |
|
|
$ |
466,091 |
|
Short-term investments |
|
|
236,882 |
|
|
|
432,301 |
|
Accounts receivable, net of allowance of |
|
|
278,289 |
|
|
|
244,385 |
|
Inventory |
|
|
40,759 |
|
|
|
35,406 |
|
Prepaid expenses and other current assets, net |
|
|
60,524 |
|
|
|
33,634 |
|
Total current assets |
|
|
1,258,549 |
|
|
|
1,211,817 |
|
Property and equipment, net |
|
|
111,210 |
|
|
|
92,453 |
|
Operating lease right-of-use assets |
|
|
56,537 |
|
|
|
71,874 |
|
Other assets |
|
|
15,403 |
|
|
|
18,330 |
|
Total assets |
|
$ |
1,441,699 |
|
|
$ |
1,394,474 |
|
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
|
$ |
14,998 |
|
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$ |
31,148 |
|
Accrued compensation |
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|
45,857 |
|
|
|
44,010 |
|
Other accrued liabilities |
|
|
149,405 |
|
|
|
144,214 |
|
Deferred revenue, current portion |
|
|
16,612 |
|
|
|
10,777 |
|
Short-term debt financing |
|
|
80,402 |
|
|
|
80,350 |
|
Total current liabilities |
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|
307,274 |
|
|
|
310,499 |
|
Long-term debt financing |
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|
282,945 |
|
|
|
281,653 |
|
Deferred revenue, long-term portion |
|
|
19,128 |
|
|
|
20,001 |
|
Operating lease liabilities, long-term portion |
|
|
67,025 |
|
|
|
76,577 |
|
Total liabilities |
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676,372 |
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|
688,730 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Common stock (2) |
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|
11 |
|
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|
11 |
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Additional paid in capital |
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3,145,837 |
|
|
|
2,664,730 |
|
Accumulated deficit |
|
|
(2,377,436 |
) |
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(1,942,635 |
) |
Accumulated other comprehensive loss |
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|
(3,085 |
) |
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(16,362 |
) |
Total stockholders’ equity |
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765,327 |
|
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|
705,744 |
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Total liabilities and stockholders’ equity |
|
$ |
1,441,699 |
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|
$ |
1,394,474 |
|
| (1) | The consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
| (2) | As of December 31, 2023 and 2022, there were approximately 119,581,000 and 111,255,000 shares of common stock issued and outstanding, respectively. |
Natera, Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (in thousands, except per share data) |
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Year ended December 31, |
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2023 |
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2022 |
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2021 |
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Revenues |
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Product revenues |
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$ |
1,068,522 |
|
|
$ |
797,307 |
|
|
$ |
580,080 |
|
|
Licensing and other revenues |
|
|
14,049 |
|
|
|
22,915 |
|
|
|
45,406 |
|
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Total revenues |
|
|
1,082,571 |
|
|
|
820,222 |
|
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|
625,486 |
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Cost and expenses |
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Cost of product revenues |
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|
588,564 |
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|
453,632 |
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|
315,195 |
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Cost of licensing and other revenues |
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|
1,267 |
|
|
|
2,624 |
|
|
|
3,223 |
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Research and development |
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|
320,678 |
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|
316,415 |
|
|
|
264,208 |
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Selling, general and administrative |
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|
618,307 |
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|
588,591 |
|
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|
511,034 |
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Total cost and expenses |
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|
1,528,816 |
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|
|
1,361,262 |
|
|
|
1,093,660 |
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Loss from operations |
|
|
(446,245 |
) |
|
|
(541,040 |
) |
|
|
(468,174 |
) |
|
Interest expense |
|
|
(12,638 |
) |
|
|
(9,319 |
) |
|
|
(8,305 |
) |
|
Interest and other income, net |
|
|
24,353 |
|
|
|
3,538 |
|
|
|
5,381 |
|
|
Loss before income taxes |
|
|
(434,530 |
) |
|
|
(546,821 |
) |
|
|
(471,098 |
) |
|
Income tax expense |
|
|
(271 |
) |
|
|
(978 |
) |
|
|
(618 |
) |
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Net loss |
|
$ |
(434,801 |
) |
|
$ |
(547,799 |
) |
|
$ |
(471,716 |
) |
|
Unrealized gain (loss) on available-for-sale securities, net of tax |
|
|
13,277 |
|
|
|
(14,075 |
) |
|
|
(6,546 |
) |
|
Comprehensive loss |
|
$ |
(421,524 |
) |
|
$ |
(561,874 |
) |
|
$ |
(478,262 |
) |
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Net loss per share: |
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Basic and diluted |
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$ |
(3.78 |
) |
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$ |
(5.57 |
) |
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$ |
(5.21 |
) |
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Weighted-average number of shares used in computing basic and diluted net loss per share: |
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Basic and diluted |
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114,997 |
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98,408 |
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|
|
90,558 |
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|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228987949/en/
Natera, Inc.
Investor Relations
Mike Brophy, CFO, Natera, Inc., 510-826-2350
Media
Lesley Bogdanow, VP of Corporate Communications, Natera, Inc., pr@natera.com
Source: Natera, Inc.
FAQ
What were Natera's total revenues in Q4 2023 compared to Q4 2022?
How much did Natera's product revenues grow in Q4 2023?
How many tests did Natera process in 2023?
What was Natera's gross margin in Q4 2023?
What is Natera's revenue outlook for 2024?
What strategic moves did Natera make recently?
