GeneDx Holdings Corp. Q3 FY2024 earnings call

• Third quarter was exceptionally strong with over $76 million in revenue, 64% gross margin, and tenth consecutive quarter of cash burn reduction, achieving profitability. • Raised full-year 2024 revenue guidance to $284M-$290M. • 80% U.S. exome market share; shifted commercial focus to pediatric neurologists with 12% penetration. • Sequenced over 700,000 clinical exomes/genomes, with over 100,000 in last six months. • Partnership with Epic Aura to integrate testing into health systems, expecting orders in first half 2025 and revenue ramp in second half. • Genomic newborn screening opportunity with potential to screen over 450 actionable conditions.

Revenue from continuing operations for Q3 2024 reached $76.6 million, a 52% increase from Q3 2023 and 11% sequentially. Exome and genome revenues grew 77% year-over-year and 18% sequentially, contributing $60 million. Adjusted gross profit was $49.3 million, up 103% year-over-year and 16% sequentially, with a gross margin of 64%. Exome and genome tests accounted for 33% of all tests this quarter, up from 23% a year ago.

• Raised full-year 2024 revenue guidance to between $284 million to $290 million. • Adjusted gross margin guidance to 62% for the full year. • Improved net cash burn guidance to $60 million to $65 million for the full year of 2024, excluding financing cost.

Q: Dan Brennan of TD Cowen asked about fourth quarter guidance, volume, price of exomes and genomes, and CMS program impact.

A: Kevin Feeley responded on seasonality, impact of weather on early fourth quarter, and CMS guidance being reinforcement not enforcement.

Q: William Bonello of Craig-Hallum Capital Group asked about initiatives to drive pediatric neurologist penetration and penetration potential, and NICU penetration ramp.

A: Katherine Stueland discussed education efforts, current 12% penetration, and NICU efforts including partnership with Epic and blocking/tackling in health systems.

Q: Mark Massaro of BTIG asked about Guardian study funding, commercial launch of newborn exome product, payer strategy, ASPs on exome/genome, and adult studies.

A: Kevin Feeley explained in-kind collaboration in Guardian study; Katherine Stueland talked about commercial launch timing and payer strategy; Kevin Feeley discussed ASP progress and future potential; Katherine Stueland mentioned adult neurodegenerative conditions as future focus.

Q: Matthew Sykes of Goldman Sachs asked about prior period collections impact on profitability and non-genome/testing business.

A: Kevin Feeley discussed prior period collections as true-ups and outperformance; Katherine Stueland talked about winding down non-genome tests to focus on exome and genome.

Q: Brandon Couillard of Wells Fargo asked about incremental investments and gross margin profile.

A: Katherine Stueland talked about discrete investments for ROI; Kevin Feeley discussed OpEx rigor and margin improvement levers.

Q: Matthew Stanton of Jefferies asked about gross margin drivers and state coverage impact.

A: Kevin Feeley discussed gross margin drivers and state coverage impact with lag of one to two quarters for impact.