10-QPeriod: Q1 FY2020

Guardant Health, Inc. Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 7, 2020For Securities:GH

Summary

Guardant Health, Inc. reported a significant increase in revenue for the first quarter of 2020, driven primarily by a substantial rise in precision oncology testing, which grew by 109% year-over-year. This growth was fueled by increased test volumes from both clinical customers and biopharmaceutical clients, alongside an improved average selling price per test, partly due to new Medicare reimbursement for certain solid tumor cancers. Despite strong top-line performance, the company continued to incur net losses, with a loss of $31.8 million for the quarter, an increase from $21.4 million in the prior year's comparable period. This widening loss is attributed to significant investments in research and development, sales and marketing, and general administrative expenses, including a substantial charge for in-process research and development from a patent license acquisition. The company highlighted its strong liquidity position with over $758 million in cash, cash equivalents, and marketable securities as of March 31, 2020, which it believes is sufficient to fund operations for at least the next 12 months. However, Guardant Health also cautioned about the ongoing impact of the COVID-19 pandemic, which is disrupting operations, sales efforts, and clinical trials, leading to fewer samples being tested and a potential adverse impact on revenue and results of operations. The company is exploring the development of a COVID-19 test, though the outcome remains uncertain.

Financial Highlights

48 data points
Beta

Revenue

$67.51M

Net Income

-$27.73M

-41.1% Net Margin

EPS (Diluted)

$-0.29

Total Assets

$948.17M

Cash & Equivalents

$152.24M

Free Cash Flow

-$22.88M

Financial Statements
Beta
Revenue$67.51M
R&D Expenses$37.02M
Operating Expenses$102.42M
Operating Income-$34.91M
Interest Expense$12K
Net Income-$27.73M
EPS (Basic)$-0.29
Shares Outstanding (Basic)94.38M

Key Highlights

  • 1Total revenue increased by 84% to $67.5 million in Q1 2020 compared to $36.7 million in Q1 2019.
  • 2Precision oncology testing revenue surged by 109% to $60.2 million, driven by higher volumes and average selling prices.
  • 3Net loss widened to $31.8 million in Q1 2020 from $21.4 million in Q1 2019, due to increased operating expenses.
  • 4Research and development expenses more than doubled to $37.0 million, including an $8.5 million charge for in-process R&D.
  • 5The company maintained a strong liquidity position with $758.3 million in cash, cash equivalents, and marketable securities as of March 31, 2020.
  • 6Guardant Health anticipates ongoing negative impacts from the COVID-19 pandemic on its operations, revenue, and clinical studies.
  • 7The company is exploring the feasibility of developing and launching a COVID-19 test.

Frequently Asked Questions

Guardant Health reported a total revenue of $67.5 million for the first quarter of 2020, an 84% increase compared to $36.7 million in the same period of 2019. The primary driver of this growth was precision oncology testing, which saw a 109% increase to $60.2 million.

No, Guardant Health continued to incur net losses. The net loss for the first quarter of 2020 was $31.8 million, an increase from the $21.4 million net loss reported in the first quarter of 2019. This widening loss was largely due to increased operating expenses, particularly in research and development.

The company stated that the COVID-19 pandemic has disrupted its operations, sales efforts, and clinical studies. This has resulted in fewer samples being tested since late March 2020 and is expected to adversely affect revenue and future results. The full impact remains uncertain.

As of March 31, 2020, Guardant Health had a strong liquidity position with $152.2 million in cash and cash equivalents and $606.1 million in marketable securities, totaling over $758 million. The company believes this is sufficient to meet its operating needs for at least the next 12 months.