01—Abstract
Summary
Summary of the 8-K filed January 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Guardant Health (GH) released preliminary, unaudited results for the fourth quarter and full year ended December 31, 2023, ahead of the J.P.
Morgan Healthcare Conference. Full-year revenue is expected to be between $562 milliona and $563 million, up 25% year over year. Clinical test volume grew 39% to 172,900 tests, and biopharma test volume grew 15% to 29,900.
Fourth-quarter revenue is expected to be between $153 millionb and $154 million, up 21%, with clinical tests up 29% to 46,400 and biopharma tests up 16% to 9,500. Profitability and cash burn remain the central investor concerns. Management said the therapy selection business reached breakeven, which it attributes to tailwinds during the year.
Free cash flow was approximately negative $84 millionc in the fourth quarter and negative $347 million for the full year, compared with negative $387 million in 2022. The reconciliation shows full-year operating cash outflow of $328 million plus $19 million in capital expenditures. Cash, cash equivalents and marketable debt securities totaled $1.2 billion at year-end.
The figures are not final. Guardant has not completed its year-end close, and its independent accountants may identify items that cause final results to differ materially.
Audited results are due on the February 2024 earnings call. Management is focused on the anticipated launch of Shield IVD in 2024 following FDA approval, which it expects to be transformative for colorectal cancer screening.
02—Key points
Key Highlights
- Full-year 2023 revenue of $562–563 million, up 25%, driven by 39% growth in clinical test volume to 172,900 tests
- Fourth-quarter 2023 revenue of $153–154 million, up 21%, with clinical tests up 29% to 46,400
- Biopharma test volume grew 15% for the year to 29,900 tests and 16% in the fourth quarter to 9,500 tests
- Therapy selection business reached breakeven, which management credits to tailwinds during 2023
- Free cash flow was negative $347 million for 2023 (improved from negative $387 million in 2022) and negative $84 million in Q4 2023
- Cash, cash equivalents and marketable debt securities were $1.2 billion as of December 31, 2023
- Shield IVD launch expected in 2024 following FDA approval, a key catalyst for the screening business
03—Questions
Frequently Asked Questions
Are these 2023 results final?
No. The figures are preliminary and unaudited. Guardant has not completed its year-end close, and its independent accountants may identify items that cause final results to differ materially. Audited fourth-quarter and full-year results are expected on the February 2024 earnings call.
How much cash is the company burning?
Free cash flow was approximately negative $347 million for 2023 and negative $84 million for Q4 2023. The full-year figure consists of $328 million in net cash used in operating activities and $19 million in capital expenditures. Free cash flow improved from negative $387 million in 2022, and the company ended 2023 with $1.2 billion in cash and marketable debt securities.
What drove revenue growth in 2023?
Clinical test volume was the main driver, rising 39% for the year to 172,900 tests. Management also cited tailwinds in the therapy selection business, which it says reached breakeven. Biopharma testing grew more modestly, at 15% for the year.
Did growth slow in the fourth quarter?
Revenue growth moderated from the full-year rate. Q4 revenue rose 21% to $153–154 million, compared with 25% for the full year. Clinical test volume still grew 29% in Q4, and biopharma volume grew 16%.
What is the outlook for the Shield blood test?
Management expects the Shield IVD launch in 2024 following FDA approval and describes it as transformative for the cancer screening landscape. The filing does not provide revenue or volume guidance for the product.
04—Continue