Sema4 Reports Third Quarter 2022 Financial Results and New Strategic Direction
Sema4 Holdings Corp. (Nasdaq: SMFR) announced a strategic pivot towards its pediatric and rare disease business, highlighting strong growth metrics from its diagnostics and data platforms. For Q3 2022, pro forma revenue surged by 21% year-over-year to $83.2 million, with testing volumes increasing 19%. The company aims for annual revenue growth exceeding 20% and adjusted gross margins over 50% by 2025. Key developments include exiting the reproductive health market and substantial partnerships to enhance data capabilities.
- Pro forma revenue in Q3 2022 was $83.2 million, a 21% year-over-year increase.
- Pediatric and rare disease revenue grew over 50% in Q3 2022.
- Pro forma testing volumes increased by 19% in Q3 2022.
- Adjusted gross margins in the pediatric and rare disease segment exceeded 40%.
- Company expects over 20% annual revenue growth over the next several years.
- Net loss in Q3 2022 was $77.6 million, a larger adjusted loss compared to previous year.
- Company announced a reduction in workforce of approximately 500 employees.
- Gross margin in Q3 2022 was only 16%, indicating pressures on overall profitability.
Company will focus on its high growth, high margin pediatric and rare disease business, powered by whole exome/genome diagnostic testing and analysis and data-driven insights from Centrellis®
Sema4 to host a conference call today at 8:30 a.m. ET
STAMFORD, Conn., Nov. 14, 2022 (GLOBE NEWSWIRE) -- Sema4 Holdings Corp. (Nasdaq: SMFR) (“Sema4”), a health insights company, today announced business highlights and financial results for the third quarter ended September 30, 2022.
Additionally, Sema4 announced its decision to pursue a new strategic direction focused on a
- Annual revenue growth in excess of
20% over the next several years - An adjusted gross margin profile in excess of
50% in the near-term - A turn to profitability in 2025
The foundation for this growth is strengthened by the GeneDx exome and whole genome sequencing and interpretation services and the Centrellis data platform. The company will be focused on delivering personalized, actionable health insights that help clinicians, researchers, health systems, pharmaceutical companies, and payors improve the patient experience and advance population health. Sema4 will enhance the healthcare experience and improve patients’ quality of life for generations by sequencing once and analyzing for a lifetime.
“As we look ahead, I am excited by the performance of the business representing our future. Our pediatric and rare disease franchise is setting new internal records, generating over
Business Highlights
- Signed 2 data partnerships with biopharma companies utilizing the company’s proprietary clinical and genomic database
- Announced partnership in the recently launched GUARDIAN genomic newborn screening study, the largest of its kind in North America, to improve population health by identifying more than 250 preventable and treatable conditions, many of which are not covered today by standard newborn screening
- Announced results from Phase 1 of SeqFirst Study, demonstrating broad utility of rapid whole genome sequencing for critically ill newborns
- Presented research on autism spectrum disorders (ASD) at the Child Neurology Society (CNS) annual meeting, underscoring the positive outcomes of exome analysis for individuals with ASD
- Announced an exit from reproductive health testing, including closing down its Stamford, CT laboratory and a reduction in force of approximately 500 employees. Customers will be notified that the company is accepting samples through December 14, 2022
- Combining its prior year-to-date restructuring efforts and the exit from its reproductive health testing business announced today, the company expects total headcount of 1,100 compared to approximately 1,700 exiting the third quarter of 2022
- Appointed industry veteran, Kevin Feeley, as Chief Financial Officer
Third Quarter & Recent Highlights
“We are pleased with our third quarter results, especially the volume growth and gross margins in our GeneDx pediatrics and rare disease business. We have seen consistent double-digit volume growth in this business throughout this year and efforts across revenue cycle management and menu optimization have helped drive favorable pricing trends in key areas of focus. Efforts implemented by our commercial team late last year are driving results,” continued Ms. Stueland. “Additionally, with the exit of our reproductive health businesses, we are very excited to enter the next chapter at Sema4 enabled by Centrellis as a health intelligence platform fueled by GeneDx’s genomic services and clinical data.”
Highlights include:
- Testing volumes on a pro forma basis were up
19% in the third quarter of 2022 compared to the same period of 2021, with 128,262 tests resulted (excluding COVID-19 tests)1 - Testing volumes in pediatric and rare disease were up
20% on a pro forma basis - Gross margin of
16% and adjusted gross margin of20% in the third quarter of 2022, with our pediatric and rare disease franchise generating an adjusted gross margin in excess of40% in the quarter
Total revenue for the third quarter of 2022 was
Gross margin in the third quarter of 2022 was
Net loss in the third quarter of 2022 was (
Total cash and cash equivalents and restricted cash were
“During the third quarter, we experienced encouraging growth in test volumes across the total company, especially in the pediatric and rare disease business of GeneDx, where we experienced
Full Year 2022 Guidance
Sema4 is maintaining the previously issued full year and second half 2022 reported revenue guidance of
Sema4 is also maintaining the previously issued full-year and second-half 2022 adjusted gross margin guidance of 4
Webcast and Conference Call Details
Sema4 will host a conference call today, November 14, 2022, at 8:30 a.m. Eastern Time. Interested parties may access the live teleconference by dialing (866) 374-5140, followed by PIN 44463501#. A live and archived webcast of the event will be available on the “Events” section of the Sema4 investor relations website at https://ir.sema4.com
1 Pro forma metrics consolidate GeneDx operating results for the entirety of the compared periods and excludes COVID-19 revenue. Pro forma metrics are presented for illustrative purposes only and are not necessarily indicative of the results that would have occurred had the GeneDx acquisition been completed prior to January 1, 2021 or that may occur in the future. See Appendix for Historical Sema4 & GeneDx Resulted Volumes & Revenue.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our future performance and our market opportunity, including our expected full year and second half 2022 reported revenue and adjusted gross margin guidance, our expectations regarding our annual revenue growth rates over the next several years, our gross margin profile in the near-term and our path to profitability in 2025, our expectations regarding our annual cash burn in 2023, our expectations for our growth and future investment in our business, our expectations regarding our plans to pursue new strategic direction, exit our reproductive health testing business and our ability to scale to profitability, our other restructuring plans and the associated cost savings and impact on our gross margins, and our expectations of the anticipated benefits and synergies of the recently completed GeneDx acquisition. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the ability to implement business plans, goals and forecasts, and identify and realize additional opportunities, (ii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, (iii) the size and growth of the market in which we operate, and (iv) our ability to pursue our new strategic direction, exit our reproductive health testing business, implement our other restructuring plans and achieve the associated cost savings and impact on our gross margins, (v) the risk that the anticipated benefits of the GeneDx acquisition may not be fully realized, if at all. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 14, 2022 and other documents filed by us from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.
About Sema4
Sema4 is a patient-centered health intelligence company dedicated to advancing healthcare through data-driven insights. Sema4 is transforming healthcare by applying AI and machine learning to multidimensional, longitudinal clinical and genomic data to build dynamic models of human health and defining optimal, individualized health trajectories. Centrellis®, our innovative health intelligence platform, is enabling us to generate a more complete understanding of disease and wellness and to provide science-driven solutions to the most pressing medical needs. Sema4 believes that patients should be treated as partners, and that data should be shared for the benefit of all.
For more information, please visit sema4.com and connect with us on LinkedIn, Twitter, Facebook, and Instagram.
Investor Relations Contact:
Joel Kaufman
investors@sema4.com
Media Contact:
Radley Moss
radley.moss@sema4.com
Historical Pro Forma Resulted Volume and Revenue1
| 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | |||||||||
| Volumes2 | |||||||||||||||
| Complex Reproductive Health | 46,052 | 50,155 | 49,475 | 61,741 | 67,907 | 73,288 | 68,109 | ||||||||
| Whole Exome, Whole Genome & NICU | 3,344 | 6,698 | 6,162 | 6,619 | 7,395 | 7,572 | 7,480 | ||||||||
| Other Diagnostic Testing (Excluding COVID) | 49,230 | 54,412 | 51,780 | 53,387 | 51,057 | 51,802 | 52,673 | ||||||||
| Total | 98,626 | 111,265 | 107,417 | 121,747 | 126,359 | 132,662 | 128,262 | ||||||||
| Sema4 (Excluding COVID) | 66,945 | 72,083 | 69,895 | 82,966 | 84,925 | 87,094 | 83,348 | ||||||||
| GeneDx | 31,681 | 39,182 | 37,522 | 38,781 | 41,434 | 45,568 | 44,914 | ||||||||
| Total1 | 98,626 | 111,265 | 107,417 | 121,747 | 126,359 | 132,662 | 128,262 | ||||||||
| Revenue2 | |||||||||||||||
| Complex Reproductive Health | $ | 46.5 | $ | 41.3 | $ | 37.6 | $ | 46.2 | $ | 48.3 | $ | 8.2 | $ | 36.8 | |
| Whole Exome, Whole Genome & NICU | $ | 8.4 | $ | 13.5 | $ | 14.2 | $ | 15.3 | $ | 18.4 | $ | 21.1 | $ | 26.9 | |
| Other Diagnostic Testing (Excluding COVID) | $ | 14.8 | $ | 15.7 | $ | 15.2 | $ | 15.7 | $ | 17.9 | $ | 16.5 | $ | 17.7 | |
| COVID | $ | 15.9 | $ | 3.8 | $ | 4.2 | $ | 10.5 | $ | 3.8 | $ | 0.3 | $ | 0.0 | |
| Pharma | $ | 1.4 | $ | 2.2 | $ | 1.8 | $ | 2.4 | $ | 1.6 | $ | 2.3 | $ | 1.7 | |
| Total2 | $ | 87.0 | $ | 76.7 | $ | 73.0 | $ | 90.1 | $ | 90.1 | $ | 48.3 | $ | 83.2 | |
| 2Q 2022 Prior Period Revenue Adjustment3 | - | - | - | - | - | ($ | 30.1 | ) | - | ||||||
| Adjusted Total | $ | 87.0 | $ | 76.7 | $ | 73.0 | $ | 90.1 | $ | 90.1 | $ | 78.4 | $ | 83.2 | |
| Adjusted Total Excluding COVID | $ | 71.1 | $ | 72.8 | $ | 68.8 | $ | 79.6 | $ | 86.3 | $ | 78.1 | $ | 83.2 | |
| Sema4 | $ | 64.2 | $ | 47.0 | $ | 43.2 | $ | 57.8 | $ | 53.9 | $ | 10.0 | $ | 37.7 | |
| Sema4 Diagnostic Testing (Excluding COVID) | $ | 46.9 | $ | 41.0 | $ | 37.3 | $ | 45.9 | $ | 48.7 | $ | 8.1 | $ | 36.1 | |
| Sema4 COVID Testing | $ | 15.9 | $ | 3.8 | $ | 4.2 | $ | 10.5 | $ | 3.8 | $ | 0.3 | $ | 0.0 | |
| Sema4 Pharma | $ | 1.4 | $ | 2.2 | $ | 1.7 | $ | 1.4 | $ | 1.4 | $ | 1.7 | $ | 1.6 | |
| GeneDx | $ | 22.8 | $ | 29.6 | $ | 29.8 | $ | 32.3 | $ | 36.1 | $ | 38.3 | $ | 45.6 | |
| Total2 | $ | 87.0 | $ | 76.7 | $ | 73.0 | $ | 90.1 | $ | 90.1 | $ | 48.3 | $ | 83.2 | |
| 2Q 2022 Prior Period Revenue Adjustment3 | - | - | - | - | - | ($ | 30.1 | ) | - | ||||||
| Adjusted Total | $ | 87.0 | $ | 76.7 | $ | 73.0 | $ | 90.1 | $ | 90.1 | $ | 78.4 | $ | 83.2 | |
| Adjusted Total excluding COVID | $ | 71.1 | $ | 72.8 | $ | 68.8 | $ | 79.6 | $ | 86.3 | $ | 78.1 | $ | 83.2 | |
Historical Pro forma GeneDx Revenue & Volume + Combined Company Pharma1
| 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | ||||||||
| Volumes | ||||||||||||||
| Whole Exome, Whole Genome & NICU | 3,344 | 6,698 | 6,162 | 6,619 | 7,395 | 7,572 | 7,480 | |||||||
| Other Diagnostic Tests | 28,337 | 32,484 | 31,360 | 32,162 | 34,039 | 37,996 | 37,434 | |||||||
| Total | 31,681 | 39,182 | 37,522 | 38,781 | 41,434 | 45,568 | 44,914 | |||||||
| Revenue | ||||||||||||||
| Whole Exome, Whole Genome & NICU | $ | 8.4 | $ | 13.5 | $ | 14.2 | $ | 15.3 | $ | 18.4 | $ | 21.1 | $ | 26.9 |
| Other Diagnostic Tests | $ | 14.4 | $ | 16.1 | $ | 15.5 | $ | 17.0 | $ | 17.7 | $ | 17.2 | $ | 18.6 |
| Pharma | $ | 1.4 | $ | 2.2 | $ | 1.8 | $ | 2.4 | $ | 1.6 | $ | 2.3 | $ | 1.7 |
| Total Revenue | $ | 24.2 | $ | 31.8 | $ | 31.5 | $ | 34.7 | $ | 37.8 | $ | 40.6 | $ | 47.3 |
1 Pro forma volume and revenue metrics assume GeneDx was owned for the entirety of the applicable quarter and are calculated based on the sum of each of Sema4’s and GeneDx’s historical volumes or revenues, as applicable. Pro forma metrics are presented for illustrative purposes only and are not necessarily indicative of the results that would have occurred had the GeneDx acquisition been completed on such dates or that may occur in the future.
2 Represents aggregated Resulted Volume and Revenue from GeneDx and Sema4.
3
Sema4 Holdings Corp.
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
| September 30, 2022 (unaudited) | December 31, 2021 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 191,360 | $ | 400,569 | |||
| Accounts receivable, net | 42,669 | 26,509 | |||||
| Due from related parties | 1,194 | 54 | |||||
| Inventory, net | 44,173 | 33,456 | |||||
| Prepaid expenses | 17,516 | 19,154 | |||||
| Other current assets | 9,698 | 3,802 | |||||
| Total current assets | $ | 306,610 | $ | 483,544 | |||
| Operating lease right-of-use assets | 44,033 | — | |||||
| Property and equipment, net | 84,369 | 62,719 | |||||
| Intangible assets, net | 190,156 | — | |||||
| Goodwill | 181,468 | — | |||||
| Restricted cash | 14,370 | 900 | |||||
| Other assets | 7,968 | 6,930 | |||||
| Total assets | $ | 828,974 | $ | 554,093 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued expenses | $ | 86,884 | $ | 64,801 | |||
| Due to related parties | 1,828 | 2,623 | |||||
| Contract liabilities | — | 473 | |||||
| Short-term lease liabilities | 4,996 | — | |||||
| Other current liabilities | 68,623 | 33,387 | |||||
| Total current liabilities | $ | 162,331 | $ | 101,284 | |||
| Long-term debt, net of current portion | 10,651 | 11,000 | |||||
| Long-term lease liabilities | 62,336 | — | |||||
| Other liabilities | 20,200 | 21,907 | |||||
| Deferred taxes | 2,603 | — | |||||
| Warrant liability | 5,059 | 21,555 | |||||
| Earn-out contingent liabilities | 4,500 | 10,244 | |||||
| Total liabilities | $ | 267,680 | $ | 165,990 | |||
| Commitments and contingencies (Note 10) | |||||||
| Stockholders’ equity: | |||||||
| Preferred Stock | — | — | |||||
| Class A common stock | 38 | 24 | |||||
| Additional paid-in capital | 1,376,916 | 963,520 | |||||
| Accumulated deficit | (815,660 | ) | (575,441 | ) | |||
| Total stockholders’ equity | 561,294 | 388,103 | |||||
| Total liabilities and stockholders’ equity | $ | 828,974 | $ | 554,093 | |||
Sema4 Holdings Corp.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
(unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
| 2022 | 2021 (1) | 2022 | 2021 (1) | ||||||||||||
| Revenue: | |||||||||||||||
| Diagnostic test revenue | $ | 81,490 | $ | 41,410 | $ | 167,989 | $ | 148,973 | |||||||
| Other revenue | 1,744 | 1,768 | 5,355 | 5,421 | |||||||||||
| Total revenue | 83,234 | 43,178 | 173,344 | 154,394 | |||||||||||
| Cost of services | 69,685 | 51,487 | 183,768 | 168,190 | |||||||||||
| Gross profit (loss) | 13,549 | (8,309 | ) | (10,424 | ) | (13,796 | ) | ||||||||
| Research and development | 13,354 | 17,831 | 61,837 | 82,916 | |||||||||||
| Selling and marketing | 37,451 | 28,152 | 103,116 | 82,092 | |||||||||||
| General and administrative | 51,863 | 33,125 | 162,681 | 148,033 | |||||||||||
| Related party expenses | 1,697 | 847 | 4,712 | 3,532 | |||||||||||
| Loss from operations | (90,816 | ) | (88,264 | ) | (342,770 | ) | (330,369 | ) | |||||||
| Other income (expense), net: | |||||||||||||||
| Change in fair market value of warrant and earn-out contingent liabilities | 12,978 | 122,171 | 54,350 | 122,171 | |||||||||||
| Interest income | 996 | 27 | 1,405 | 57 | |||||||||||
| Interest expense | (806 | ) | (683 | ) | (2,404 | ) | (2,128 | ) | |||||||
| Other income | 2 | (520 | ) | 58 | 5,064 | ||||||||||
| Total other income | 13,170 | 120,995 | 53,409 | 125,164 | |||||||||||
| (Loss) Income before income taxes | $ | (77,646 | ) | $ | 32,731 | $ | (289,361 | ) | (205,205 | ) | |||||
| Income tax benefit | 65 | — | 49,142 | — | |||||||||||
| Net (loss) income and comprehensive (loss) income | $ | (77,581 | ) | $ | 32,731 | $ | (240,219 | ) | $ | (205,205 | ) | ||||
| Weighted average shares outstanding of Class A common stock | 380,764,176 | 185,680,394 | 321,461,266 | 63,121,738 | |||||||||||
| Weighted average shares outstanding of Class A common stock for diluted earnings | 380,764,176 | 210,330,946 | 321,461,266 | 63,121,738 | |||||||||||
| Basic net (loss) income per share, Class A common stock | $ | (0.20 | ) | $ | 0.18 | $ | (0.75 | ) | $ | (3.25 | ) | ||||
| Diluted net (loss) income per share, Class A common stock | $ | (0.20 | ) | $ | 0.16 | $ | (0.75 | ) | $ | (3.25 | ) | ||||
(1) As previously disclosed in Note 2, “Summary of Significant Accounting Policies” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, certain adjustments were made to reclassify certain expenses between cost of services and operating expenses. The adjustments are reflected as disclosed.
Sema4 Holdings Corp.
Condensed Consolidated Statement of Cash Flows
(unaudited, in thousands)
| Nine months ended September 30, | |||||||
| 2022 | 2021 (1) | ||||||
| Operating activities | |||||||
| Net loss | $ | (240,219 | ) | $ | (205,205 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization expense | 25,269 | 16,012 | |||||
| Stock-based compensation expense | 41,553 | 182,454 | |||||
| Change in fair value of warrant and earn-out contingent liabilities | (54,350 | ) | (122,171 | ) | |||
| Income tax benefit | (49,176 | ) | — | ||||
| Loss on debt extinguishment | — | 301 | |||||
| Provision for excess and obsolete inventory | 732 | 1,122 | |||||
| Non-cash lease expense | 1,112 | 1,174 | |||||
| Amortization of deferred debt issuance costs | 387 | — | |||||
| Change in operating assets and liabilities, net of effects from purchase of business: | |||||||
| Accounts receivable | 5,491 | 10,787 | |||||
| Inventory | (5,239 | ) | (7,334 | ) | |||
| Prepaid expenses and other current assets | 5,153 | (15,710 | ) | ||||
| Due to/from related parties | (1,935 | ) | (124 | ) | |||
| Other assets | (1,355 | ) | (17 | ) | |||
| Accounts payable and accrued expenses | 28,557 | 4,927 | |||||
| Contract liabilities | (473 | ) | (1,290 | ) | |||
| Other current liabilities | (10,008 | ) | (3,375 | ) | |||
| Net cash used in operating activities | (254,501 | ) | (138,449 | ) | |||
| Investing activities | |||||||
| Purchase of business, net of cash acquired | (127,004 | ) | — | ||||
| Purchases of property and equipment | (4,990 | ) | (4,344 | ) | |||
| Development of internal-use software assets | (6,494 | ) | (8,749 | ) | |||
| Net cash used in investing activities | (138,488 | ) | (13,093 | ) | |||
| Financing activities | |||||||
| Proceeds from Business Combination PIPE Investment | — | 350,000 | |||||
| Proceeds from Acquisition PIPE Investment, net of issuance costs | 197,659 | — | |||||
| Proceeds from equity infusion from the merger, net of redemptions | — | 442,684 | |||||
| Legacy Sema4 Shareholder payout | — | (230,665 | ) | ||||
| Payment of deferred transaction costs | — | (51,760 | ) | ||||
| Stock Appreciation Rights payout | — | (3,795 | ) | ||||
| Repayment of long-term debt | — | (8,741 | ) | ||||
| Finance lease principal payments | (2,632 | ) | (2,960 | ) | |||
| Long-term debt principal payments | — | (1,000 | ) | ||||
| Exercise of stock options | 2,223 | 995 | |||||
| Net cash provided by financing activities | 197,250 | 494,758 | |||||
| Net decrease in cash, cash equivalents and restricted cash | (195,739 | ) | 343,216 | ||||
| Cash, cash equivalents and restricted cash, at beginning of period | 401,469 | 118,960 | |||||
| Cash, cash equivalents and restricted cash, at end of period | $ | 205,730 | $ | 462,176 | |||
(1) As previously disclosed in Note 2, “Summary of Significant Accounting Policies” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, certain adjustments were made to certain liability accounts previously reported in the condensed balance sheets as of September 30, 2021. The adjustments are reflected accordingly as disclosed.
Sema4 Holdings Corp.
Reconciliation of Revenue to our Adjusted Gross Profit & Adjusted EBITDA
(unaudited, in thousands)
| Three months ended September 30, | |||||||
| 2022 | 2021 | ||||||
| (in thousands) | |||||||
| Revenue | |||||||
| Diagnostic test revenue | $ | 81,490 | $ | 41,410 | |||
| Other Revenue | 1,744 | 1,768 | |||||
| Total Revenue | 83,234 | 43,178 | |||||
| Cost of Service | 69,685 | 51,487 | |||||
| Gross (Loss) Profit | $ | 13,549 | $ | (8,309 | ) | ||
| Gross Margin | 16 | % | (19 | )% | |||
| Stock-based compensation | $ | 1,477 | $ | 1,779 | |||
| Restructuring costs | 1,497 | — | |||||
| Adjusted Gross (Loss) Profit | 16,759 | (6,530 | ) | ||||
| Adjusted Gross Margin | 20 | % | (15 | )% | |||
| Research & Development | 13,354 | 17,831 | |||||
| Stock-based compensation | 8,164 | (3,160 | ) | ||||
| Restructuring costs | (1,362 | ) | — | ||||
| Adjusted Research & Development | $ | 20,156 | $ | 14,671 | |||
| Selling & Marketing | 37,451 | 28,152 | |||||
| Stock-based compensation | (2,337 | ) | (4,183 | ) | |||
| Amortization of intangibles | (1,067 | ) | — | ||||
| Restructuring costs | (1,863 | ) | — | ||||
| Adjusted Selling & Marketing | $ | 32,184 | $ | 23,969 | |||
| General & Administrative & Related Party Expense | 53,560 | 33,972 | |||||
| Stock-based compensation | (5,623 | ) | (8,889 | ) | |||
| Amortization of intangibles | (2,440 | ) | — | ||||
| Transaction, acquisition, and restructuring costs | (4,271 | ) | (391 | ) | |||
| Adjusted General & Administrative & Related Party | $ | 41,226 | $ | 24,692 | |||
| Total Adjusted Operating Expenses | 93,566 | 63,332 | |||||
| Loss from Operations | (90,816 | ) | (88,264 | ) | |||
| Stock-based compensation | 1,273 | 18,011 | |||||
| Amortization of intangibles | 3,507 | — | |||||
| Transaction, acquisition, and restructuring costs | 8,993 | 391 | |||||
| Adjusted loss from operations | $ | (77,043 | ) | $ | (69,862 | ) | |
Sema4 Holdings Corp.
Reconciliation of Revenue to our Adjusted Gross Profit & Adjusted EBITDA
(unaudited, in thousands)
| Nine months ended September 30, | |||||||
| 2022 | 2021 | ||||||
| (in thousands) | |||||||
| Revenue | |||||||
| Diagnostic test revenue | $ | 167,989 | $ | 148,973 | |||
| Other Revenue | 5,355 | 5,421 | |||||
| Total Revenue | 173,344 | 154,394 | |||||
| Cost of Service | 183,768 | 168,190 | |||||
| Gross (Loss) Profit | $ | (10,424 | ) | $ | (13,796 | ) | |
| Gross Margin | (6 | )% | (9 | )% | |||
| Stock-based compensation | 4,668 | 19,948 | |||||
| Restructuring costs | 1,808 | — | |||||
| Adjusted Gross (Loss) Profit | (3,948 | ) | 6,152 | ||||
| Adjusted Gross Margin | (2 | )% | 4 | % | |||
| Research & Development | 61,837 | 82,916 | |||||
| Stock-based compensation | (2,692 | ) | (40,977 | ) | |||
| Restructuring costs | (2,368 | ) | — | ||||
| Adjusted Research & Development | $ | 56,777 | $ | 41,939 | |||
| Selling & Marketing | 103,116 | 82,092 | |||||
| Stock-based compensation | (6,647 | ) | (23,936 | ) | |||
| Amortization of intangibles | (1,884 | ) | — | ||||
| Restructuring costs | (4,503 | ) | — | ||||
| Adjusted Selling & Marketing | $ | 90,082 | $ | 58,156 | |||
| General & Administrative & Related Party Expense | 167,393 | 151,565 | |||||
| Stock-based compensation | (27,546 | ) | (97,593 | ) | |||
| Amortization of intangibles | (3,960 | ) | — | ||||
| Transaction, acquisition, and restructuring costs | (23,311 | ) | (5,496 | ) | |||
| Adjusted General & Administrative & Related Party | $ | 112,576 | $ | 48,476 | |||
| Total Adjusted Operating Expenses | 259,435 | 148,571 | |||||
| Loss from Operations | (342,770 | ) | (330,369 | ) | |||
| Stock-based compensation | 41,553 | 182,454 | |||||
| Amortization of intangibles | 5,844 | — | |||||
| Transaction, acquisition, and restructuring costs | 31,990 | 5,496 | |||||
| Adjusted loss from operations | $ | (263,383 | ) | $ | (142,419 | ) | |
| Three months ended September 30, | |||||||
| 2022 | 2021 | ||||||
| (in thousands) | |||||||
| Net (loss) income | $ | (77,581 | ) | $ | 32,731 | ||
| Interest expense, net (1) | (190 | ) | 656 | ||||
| Income tax benefit | (65 | ) | — | ||||
| Depreciation and amortization | 10,502 | 5,491 | |||||
| Stock-based compensation expense | 1,273 | 18,011 | |||||
| Transaction, acquisition costs, and business integration costs (2) | — | 391 | |||||
| Restructuring (3) | 8,993 | — | |||||
| Change in fair market value of financial liabilities (4) | (12,978 | ) | (122,171 | ) | |||
| Other income | — | 343 | |||||
| Adjusted EBITDA | $ | (70,046 | ) | $ | (64,548 | ) | |
| Net (loss) income | (77,581 | ) | 32,731 | ||||
| Stock-based compensation expense | 1,273 | 18,011 | |||||
| Amortization of Acquisition Intangibles | 3,507 | — | |||||
| Change in fair market value of warrant and earn-out contingent liabilities | (12,978 | ) | (122,171 | ) | |||
| Transaction, acquisition, and restructuring costs | 8,993 | 391 | |||||
| Adjusted Net loss | (76,786 | ) | (71,038 | ) | |||
(1) Represents the total of interest expense related to our finance leases and interest-bearing loans and interest income earned on money market funds. This also includes the unused line fee and amortization of deferred transaction costs related to the loan and security agreement entered into with Silicon Valley Bank.
(2) Represents professional service costs incurred in connection with pursuing the business combination transaction that did not meet the requirement for capitalization in 2021.
(3) Represents costs incurred for restructuring activities, which include severance packages offered to impacted employees and third party consulting costs incurred in the third quarter of 2022.
(4) Represents the change primarily in fair market value of the liabilities associated with our Milestone Payments contingent liability based on the achievement of GeneDx revenue-based milestones of
| Nine months ended September 30, | |||||||
| 2022 | 2021 | ||||||
| (in thousands) | |||||||
| Net loss | $ | (240,219 | ) | $ | (205,205 | ) | |
| Interest expense, net (1) | 999 | 2,071 | |||||
| Income tax benefit | (49,142 | ) | — | ||||
| Depreciation and amortization | 25,269 | 16,012 | |||||
| Stock-based compensation expense | 41,553 | 182,454 | |||||
| Transaction, acquisition costs, and business integration costs (2) | 13,436 | 5,496 | |||||
| Restructuring (3) | 18,554 | — | |||||
| Change in fair market value of financial liabilities (4) | (54,350 | ) | (122,171 | ) | |||
| Other income (5) | (56 | ) | (5,241 | ) | |||
| Adjusted EBITDA | $ | (243,956 | ) | $ | (126,584 | ) | |
| Net loss | (240,219 | ) | (205,205 | ) | |||
| Stock-based compensation expense | 41,553 | 182,454 | |||||
| Amortization of Acquisition Intangibles | 5,844 | — | |||||
| Change in fair market value of warrant and earn-out contingent liabilities | (54,350 | ) | (122,171 | ) | |||
| Transaction, acquisition, and restructuring costs | 31,990 | 5,496 | |||||
| Adjusted Net loss | (215,182 | ) | (139,426 | ) | |||
(1) Represents the total of interest expense related to our finance leases and interest-bearing loans and interest income earned on money market funds. This also includes the unused line fee and amortization of deferred transaction costs related to the loan and security agreement entered into with Silicon Valley Bank.
(2) Represents professional service costs incurred in connection with pursuing the business combination transaction that did not meet the requirement for capitalization in 2021. For the period of 2022, this represents professional service costs incurred in connection with the Acquisition transaction, which include due diligence, legal and business integration costs.
(3) Represents costs incurred for restructuring activities, which include severance packages offered to impacted employees and third party consulting costs incurred in the period of 2022.
(4) Represents the change primarily in fair market value of the liabilities associated with our Milestone Payments contingent liability based on the achievement of GeneDx revenue-based milestones of
(5) For the nine months ended September 30, 2021, the amount represents funding received under the CARES Act Provider Relief Fund in the first quarter of 2021.
FAQ
What are Sema4's financial results for Q3 2022?
What strategic changes did Sema4 announce for its business?
What is Sema4's growth outlook?
How did Sema4's testing volumes change in Q3 2022?
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