10-QPeriod: Q1 FY2023

Guardant Health, Inc. Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 9, 2023For Securities:GH

Summary

Guardant Health, Inc. reported a total revenue of $128.7 million for the first quarter of 2023, a significant increase of 34% compared to the same period in 2022. This growth was primarily driven by the precision oncology testing segment, which saw a 35% increase in revenue, fueled by higher test volumes from both clinical customers and biopharmaceutical partners. Despite the robust revenue growth, the company continued to incur substantial operating losses, with a net loss of $133.5 million for the quarter, an increase from the $123.2 million net loss in the prior year. This widening loss is attributable to increased costs in cost of revenue and operating expenses, particularly in research and development and sales and marketing, as the company invests in product development and market expansion. As of March 31, 2023, Guardant Health maintained a strong liquidity position with approximately $937.0 million in cash, cash equivalents, and marketable debt securities, which the company believes is sufficient to fund operations for more than 12 months.

Financial Statements
Beta
Revenue$128.71M
R&D Expenses$93.13M
Operating Expenses$262.77M
Operating Income-$134.06M
Interest Expense$644K
Net Income-$133.53M
EPS (Basic)$-1.30
EPS (Diluted)$-1.30
Shares Outstanding (Basic)102.66M
Shares Outstanding (Diluted)102.66M

Key Highlights

  • 1Total revenue increased by 34% year-over-year to $128.7 million, driven by strong performance in precision oncology testing.
  • 2Precision oncology testing revenue grew by 35% to $113.4 million, primarily due to increased test volumes from clinical and biopharmaceutical customers.
  • 3Net loss widened to $133.5 million from $123.2 million in the prior year's quarter, reflecting increased operating expenses.
  • 4Research and development expenses increased by 14% to $93.1 million, indicating continued investment in innovation and clinical studies.
  • 5Sales and marketing expenses rose by 18% to $76.1 million, supporting commercial infrastructure and marketing initiatives.
  • 6The company ended the quarter with a healthy cash and marketable securities balance of $937.0 million, providing a runway for future operations.
  • 7Significant progress reported in the development of the Shield LDT test for colorectal cancer screening, including meeting co-primary endpoints in the ECLIPSE study and submitting a premarket approval application to the FDA.

Frequently Asked Questions

Guardant Health's primary revenue driver is its precision oncology testing segment. For the first quarter of 2023, this segment generated $113.4 million in revenue, an increase of 35% compared to the prior year's quarter. This growth was fueled by a 39% increase in revenue from clinical customers and a 20% increase from biopharmaceutical customers, largely due to higher test volumes.

Guardant Health is currently not profitable, reporting a net loss of $133.5 million for the first quarter of 2023, an increase from $123.2 million in the same period last year. This widening loss is primarily due to increased operating expenses. Key areas of increased spending include Research and Development (up 14% to $93.1 million) and Sales and Marketing (up 18% to $76.1 million), reflecting the company's strategic investments in developing new products, conducting clinical studies, and expanding its commercial reach.

Guardant Health maintains a strong liquidity position. As of March 31, 2023, the company had approximately $937.0 million in cash, cash equivalents, and marketable debt securities. Management believes this liquidity is sufficient to fund its current operating plan for more than 12 months. While the company expects to continue incurring operating losses in the near future, its strong cash reserves provide a buffer for ongoing investments and operational needs.

Guardant Health is making significant progress with its Shield LDT test for colorectal cancer screening. The ECLIPSE study, evaluating the test in average-risk adults, met its co-primary endpoints, demonstrating 83% sensitivity for detecting colorectal cancer and 90% specificity. Based on these results, the company submitted a premarket approval application to the FDA in March 2023. The company also plans to expand its early detection efforts with an investigational Shield assay for lung cancer screening.