10-QPeriod: Q3 FY2022

Guardant Health, Inc. Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 3, 2022For Securities:GH

Summary

Guardant Health, Inc. reported a significant increase in revenue for the nine months ended September 30, 2022, reaching $322.6 million, up 22% year-over-year. This growth was primarily driven by its Precision Oncology testing segment, which saw a 29% increase in revenue, largely due to higher sample volumes from both clinical and biopharmaceutical customers. The company continues to invest heavily in research and development, with R&D expenses increasing by 40% for the nine-month period, reflecting its commitment to innovation and clinical studies crucial for market adoption and payer coverage. Despite revenue growth, Guardant Health continued to incur substantial net losses, with a net loss of $514.7 million for the nine months ended September 30, 2022. The company's cash position remains robust, with approximately $1.1 billion in cash, cash equivalents, and marketable debt securities as of September 30, 2022, providing sufficient runway for at least the next 12 months. However, investors should note the significant increase in sales and marketing expenses (up 65%), indicating aggressive market expansion efforts, and the ongoing legal proceedings which pose potential financial and operational risks.

Financial Highlights

50 data points
Beta

Revenue

$117.40M

Net Income

-$161.99M

-138.0% Net Margin

EPS (Diluted)

$-1.58

Total Assets

$1.70B

Cash & Equivalents

$158.31M

Free Cash Flow

-$99.89M

Financial Statements
Beta
Revenue$117.40M
R&D Expenses$100.02M
Operating Expenses$262.00M
Operating Income-$144.60M
Interest Expense$644K
Net Income-$161.99M
EPS (Basic)$-1.58
EPS (Diluted)$-1.58
Shares Outstanding (Basic)102.29M
Shares Outstanding (Diluted)102.29M

Key Highlights

  • 1Total revenue increased by 22% to $322.6 million for the nine months ended September 30, 2022.
  • 2Precision Oncology testing revenue grew by 29% year-over-year for the nine months ended September 30, 2022, driven by increased sample volumes.
  • 3Research and Development expenses increased by 40% to $267.2 million for the nine months ended September 30, 2022, reflecting continued investment in product development and clinical studies.
  • 4Sales and marketing expenses saw a significant increase of 65% to $218.4 million for the nine months ended September 30, 2022, signaling an aggressive push for market penetration.
  • 5The company reported a net loss of $514.7 million for the nine months ended September 30, 2022.
  • 6Cash, cash equivalents, and marketable debt securities stood at $1.1 billion as of September 30, 2022, providing ample liquidity.
  • 7The company is involved in several material legal proceedings, including intellectual property disputes and a civil investigative demand, which present potential financial and operational risks.

Frequently Asked Questions

Guardant Health reported total revenue of $322.6 million for the nine months ended September 30, 2022, a 22% increase compared to $265.5 million in the same period last year. The Precision Oncology testing segment was the primary driver of this growth, with revenue increasing by 29% year-over-year.

While Guardant Health incurred a net loss of $514.7 million for the nine months ended September 30, 2022, its robust liquidity position provides a buffer. As of September 30, 2022, the company had $1.1 billion in cash, cash equivalents, and marketable debt securities, which is expected to be sufficient to fund its operating plan for more than 12 months. The company continues to focus on revenue growth and operational efficiencies to eventually reach profitability.

Guardant Health is significantly increasing its investment in Research and Development, with a 40% rise for the nine-month period, supporting new product development and clinical studies. Additionally, Sales and Marketing expenses increased by 65%, indicating a strong focus on market expansion and customer acquisition. These investments are crucial for the company's long-term growth strategy.

Yes, Guardant Health is involved in several legal proceedings, including intellectual property disputes with companies like TwinStrand Biosciences and Illumina, and a false advertising lawsuit with Natera. The company also received a Civil Investigative Demand from the U.S. Attorney's Office regarding billing practices for certain genetic tests. These matters present potential financial and operational risks that investors should monitor.