01—Abstract
Summary
Summary of the 8-K filed November 12, 2024. Cited figures are marked; the original filing is the authoritative source.
Natera, Inc. (NASDAQ: NTRA) reported third-quarter 2024 results on November 12, 2024, as furnished in Exhibit 99.1 and an investor presentation in Exhibit 99.2.
Total revenues were $439.8 milliona, up from $268.3 million in the third quarter of 2023, an increase of 63.9%, driven primarily by a 64.4% rise in product revenues to $436.1 million. Gross margin expanded to 61.8% from 45.1%, and the company processed approximately 775,800 tests, up 23.9% year over year. Oncology tests reached approximately 137,100, an increase of 54.4%.
Natera reported a net loss of $31.6 millionb, or $(0.26) per diluted share, for the quarter, compared with a net loss of $109.0 million, or $(0.95) per diluted share, a year earlier. Loss from operations narrowed to $39.3 million from $111.0 million. The company reported approximately $34.5 million of positive cash flow for the quarter, its third consecutive cash-flow-positive quarter as described in the presentation, and held approximately $922.3 million in cash, cash equivalents, short-term investments and restricted cash at September 30, 2024.
Management raised its 2024 guidance to total revenue of $1.61 billion to $1.64 billionc, gross margin of 58% to 61%, and a net cash inflow of $50 million to $75 million. The company also stated that all outstanding convertible senior notes were redeemed or converted on October 11, 2024.
02—Key points
Key Highlights
- Total revenues of $439.8 million in Q3 2024, up 63.9% from $268.3 million in Q3 2023
- Gross margin of 61.8% versus 45.1% in the prior-year quarter
- Net loss narrowed to $31.6 million ($0.26 per diluted share) from $109.0 million ($0.95 per diluted share)
- Approximately 775,800 tests processed, up 23.9%; approximately 137,100 oncology tests, up 54.4%
- Approximately $34.5 million positive cash flow in the quarter, as defined by the company
- 2024 guidance raised: total revenue of $1.61–$1.64 billion, gross margin of 58%–61%, net cash inflow of $50–$75 million
- All outstanding convertible senior notes were redeemed or converted on October 11, 2024
03—Questions
Frequently Asked Questions
What drove the growth in revenue this quarter?
The company attributed the increase primarily to a 64.4% rise in product revenues, driven by higher test volume, average selling price improvements, and cash receipts collected during the quarter for tests delivered in prior quarters that were fully collected.
Why did gross margin improve so significantly?
Management cited higher revenues, continued progress in reducing cost of revenues associated with tests processed, and incremental cash receipts during the quarter associated with tests delivered in prior periods that were fully collected.
How did operating expenses change?
Total operating expenses for research and development and selling, general and administrative costs were $311.1 million, up 34.0% from $232.0 million a year earlier, primarily due to headcount growth to support new product offerings and higher consulting and legal expenses.
What is the company's updated outlook for 2024?
Natera raised its 2024 outlook to total revenue of $1.61 billion to $1.64 billion, gross margin of approximately 58% to 61%, selling, general and administrative costs of $775 million to $825 million, research and development costs of $375 million to $400 million, and net cash inflow of $50 million to $75 million.
What happened to the company's convertible debt?
At September 30, 2024, the convertible senior notes had a gross principal balance of $287.5 million. The company stated that all outstanding convertible senior notes were redeemed or converted on October 11, 2024.
04—Continue