10-QPeriod: Q3 FY2021

Guardant Health, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 4, 2021For Securities:GH

Summary

Guardant Health, Inc. (GH) reported a 27% increase in total revenue for the nine months ended September 30, 2021, reaching $265.5 million, compared to $208.4 million in the prior year period. This growth was primarily driven by a 26% increase in precision oncology testing revenue, which rose to $215.6 million, fueled by higher sample volumes from both clinical and biopharmaceutical customers. Despite revenue growth, the company continued to experience significant net losses, with a net loss of $312.5 million for the nine months ended September 30, 2021, compared to $153.2 million in the same period last year. This widening loss is attributed to substantial increases in research and development (R&D) and sales and marketing (S&M) expenses, which grew by 74% and 76%, respectively, as the company invests heavily in product development, clinical studies, and commercial expansion. The company maintains a strong liquidity position with $1.7 billion in cash, cash equivalents, and marketable securities as of September 30, 2021.

Financial Highlights

50 data points
Beta

Revenue

$94.78M

Net Income

-$107.53M

-113.4% Net Margin

EPS (Diluted)

$-1.06

Total Assets

$2.23B

Cash & Equivalents

$832.69M

Free Cash Flow

-$75.29M

Financial Statements
Beta
Revenue$94.78M
R&D Expenses$70.97M
Operating Expenses$202.07M
Operating Income-$107.29M
Interest Expense$644K
Net Income-$107.53M
EPS (Basic)$-1.06
EPS (Diluted)$-1.06
Shares Outstanding (Basic)101.42M
Shares Outstanding (Diluted)101.42M

Key Highlights

  • 1Total revenue increased by 27% year-over-year to $265.5 million for the first nine months of 2021.
  • 2Precision oncology testing revenue grew by 26% to $215.6 million, driven by increased sample volumes.
  • 3Net loss widened significantly to $312.5 million for the first nine months of 2021, up from $153.2 million in the prior year.
  • 4Research and Development (R&D) expenses increased by 74% to $190.2 million, reflecting ongoing investment in innovation and clinical studies.
  • 5Sales and Marketing (S&M) expenses surged by 76% to $132.3 million, supporting commercial expansion efforts.
  • 6The company ended the period with a robust cash position of $1.7 billion, providing ample liquidity.
  • 7Guardant Health exercised its call right to purchase all shares of its joint venture with SoftBank, expected to close by Q2 2022.

Frequently Asked Questions

Guardant Health's revenue growth is primarily driven by its precision oncology testing segment, which saw a 26% increase in revenue for the first nine months of 2021. This growth is attributed to a higher volume of tests performed for both clinical customers and biopharmaceutical companies.

The significant increase in net loss is primarily due to substantial investments in research and development (R&D) and sales and marketing (S&M) to support new product development, clinical trials, and commercial expansion. These operating expenses more than doubled compared to the prior year's comparable period.

Guardant Health maintains a strong liquidity position. As of September 30, 2021, the company had $1.7 billion in cash, cash equivalents, and marketable securities, which it believes is sufficient to fund its operating plan for more than 12 months.

Guardant Health exercised its right to purchase all shares of its joint venture with SoftBank. This strategic move aims to consolidate its international operations and is expected to close by the second quarter of 2022, signaling a move towards greater control over its global commercialization efforts.