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November, 04, 2021

Guardant Health Reports Third Quarter 2021 Financial Results

Achieved record revenue of $94.8 million

Growth of 35% and 58% year over year in clinical and biopharma volumes, respectively

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology company focused on helping conquer cancer globally through use of its proprietary tests, vast data sets and advanced analytics, today reported financial results for the quarter ended September 30, 2021.

Recent Highlights

  • Revenue of $94.8 million for the third quarter of 2021, an increase of 27% over the corresponding period of 2020
  • Reported 22,806 tests to clinical customers and 4,839 tests to biopharmaceutical customers in the third quarter of 2021, representing an increase of 35% and 58%, respectively, over the third quarter of 2020
  • Initiated ORACLE study to evaluate performance of Guardant Reveal™ to predict recurrence across eleven early-stage cancers
  • Presented data at ACG showing LUNAR-2 blood test is highly sensitive in detecting early-stage colorectal cancer
  • Announced SHIELD study to validate the performance of blood-based assay in lung cancer screening, with enrollment beginning in December of 2021
  • Added Myrtle Potter, CEO of Sumitovant Biopharma, to Board of Directors

“We delivered solid results this quarter as we continue to build on our strong foundation as the liquid biopsy leader in oncology, despite the continued impact of COVID,” said Helmy Eltoukhy, co-founder and co-CEO. “We have continued our strong cadence of data supporting our Guardant360® products and are making solid progress towards our multi-cancer goal for MRD with the initiation of our ORACLE study. We are dedicated to offering healthcare providers a complete portfolio of oncology products that will provide clinically actionable information to guide patient care.”

“At Guardant, we are focused on developing a highly accurate blood test to screen for multiple cancers where lives can be saved,” said AmirAli Talasaz, co-founder and co-CEO. “Guardant’s differentiated core technology platform has the potential to significantly improve our ability to detect many cancers at their earliest stages. Successful readouts of ECLIPSE and SHIELD, as well as future studies, will unlock the tremendous opportunity for blood-based cancer screening.”

Third Quarter 2021 Financial Results

Revenue was $94.8 million for the three months ended September 30, 2021, a 27% increase from $74.6 million for the three months ended September 30, 2020. Precision oncology revenue grew 31% driven predominantly by an increase in clinical testing revenue which grew 27% over the prior year period. There were 22,806 clinical tests and 4,839 biopharmaceutical tests performed during the third quarter of 2021. Development services and other revenue increased 9% primarily due to progression of collaboration projects from biopharmaceutical customers for companion diagnostic development services during the three months ended September 30, 2021.

Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $64.0 million for the third quarter of 2021, an increase of $10.6 million from $53.4 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 67%, as compared to 72% for the corresponding prior year period.

Operating expenses were $171.3 million for the third quarter of 2021, as compared to $127.6 million for the corresponding prior year period, an increase of 34%. Non-GAAP operating expenses were $135.1 million for the third quarter of 2021, as compared to $71.8 million for the corresponding prior year period.

Net loss attributable to Guardant Health, Inc. common stockholders was $107.5 million for the third quarter of 2021, as compared to $77.7 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $1.06 for the third quarter of 2021, as compared to $0.78 for the corresponding prior year period. Non-GAAP net loss was $70.5 million for the third quarter of 2021, as compared to $15.4 million for the corresponding prior year period. Non-GAAP net loss per share was $0.70 for the third quarter of 2021, as compared to $0.15 for the corresponding prior year period.

Adjusted EBITDA loss was $65.2 million for the third quarter of 2021, as compared to a $14.1 million loss for the corresponding prior year period.

Cash, cash equivalents and marketable securities were $1.7 billion as of September 30, 2021.

2021 Guidance

Guardant Health expects full year 2021 revenue to be in the range of $360 million to $370 million, representing 26% to 29% growth over full year 2020.

Webcast Information

Guardant Health will host a conference call to discuss the third quarter 2021 financial results after market close on Thursday, November 4, 2021 at 1:30 pm Pacific Time / 4:30 pm Eastern Time. A webcast of the conference call can be accessed at http://investors.guardanthealth.com. The webcast will be archived and available for replay for at least 90 days after the event.

Non-GAAP Measures

Guardant Health has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP cost of precision oncology testing, non-GAAP research and development expense, non-GAAP sales and marketing expense, non-GAAP general and administrative expense, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to Guardant Health, Inc., common stockholders, non-GAAP net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted, and Adjusted EBITDA.

We define our non-GAAP measures as the applicable GAAP measure adjusted for the impacts of stock-based compensation and related employer payroll tax payments; changes in estimated fair value redeemable noncontrolling interest; contingent consideration; acquisition related expenses, amortization of intangible assets, and other non-recurring items.

Adjusted EBITDA is defined as net loss attributable to Guardant Health, Inc. common stockholders adjusted for interest income; interest expense; other income (expense), net, provision for (benefit from) income taxes; depreciation; and amortization expense; stock-based compensation expense and related employer payroll tax payments; adjustments relating to non-controlling interest and contingent consideration and, if applicable in a reporting period, acquisition-related expenses and other non-recurring items.

We believe that the exclusion of certain income and expenses in calculating these non-GAAP financial measures can provide a useful measure for investors when comparing our period-to-period core operating results, and when comparing those same results to that published by our peers. We exclude certain other items because we believe that these income (expenses) do not reflect expected future operating expenses. Additionally, certain items are inconsistent in amounts and frequency, making it difficult to perform a meaningful evaluation of our current or past operating performance. We use these non-GAAP financial measures to evaluate ongoing operations, for internal planning and forecasting purposes, and to manage our business.

These non-GAAP financial measures are not intended to be considered in isolation from, as substitute for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. There are limitations inherent in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation, and do not present the full measure of our recorded costs against its revenue. In addition, our definition of the non-GAAP financial measures may differ from non-GAAP measures used by other companies.

About Guardant Health

Guardant Health is a leading precision oncology company focused on helping conquer cancer globally through use of its proprietary tests, vast data sets and advanced analytics. The Guardant Health oncology platform leverages capabilities to drive commercial adoption, improve patient clinical outcomes and lower healthcare costs across all stages of the cancer care continuum. Guardant Health has commercially launched Guardant360®, Guardant360 CDx, Guardant360 TissueNext™, Guardant360 Response™, and GuardantOMNI® tests for advanced stage cancer patients, and Guardant Reveal™ for early-stage cancer patients. These tests fuel development of its LUNAR screening program, which aims to address the needs of asymptomatic individuals eligible for cancer screening.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including statements relating to Guardant Health’s future results, or regarding the potential benefits and advantages of Guardant Health’s platforms, assays and tests, which involve risks and uncertainties that could cause Guardant Health’s actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions, and actual outcomes and results could differ materially from these statements due to a number of factors. These and additional risks and uncertainties that could affect Guardant Health’s financial and operating results and cause actual results to differ materially from those indicated by the forward-looking statements made in this press release include those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in its Annual Report on Form 10-K for the year ended December 31, 2020, and in its other reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are based on information available to Guardant Health as of the date hereof, and Guardant Health disclaims any obligation to update any forward-looking statements provided to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. These forward-looking statements should not be relied upon as representing Guardant Health’s views as of any date subsequent to the date of this press release.

Guardant Health, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Precision oncology testing

$

79,272

 

 

 

$

60,384

 

 

 

$

215,605

 

 

 

$

171,621

 

 

Development services and other

15,507

 

 

 

14,185

 

 

 

49,940

 

 

 

36,793

 

 

Total revenue

94,779

 

 

 

74,569

 

 

 

265,545

 

 

 

208,414

 

 

Costs and operating expenses:

 

 

 

 

 

 

 

Cost of precision oncology testing

29,665

 

 

 

16,699

 

 

 

78,142

 

 

 

52,699

 

 

Cost of development services and other

1,151

 

 

 

4,488

 

 

 

11,348

 

 

 

11,429

 

 

Research and development expense

70,968

 

 

 

36,245

 

 

 

190,200

 

 

 

109,580

 

 

Sales and marketing expense

50,228

 

 

 

25,095

 

 

 

132,282

 

 

 

75,225

 

 

General and administrative expense

50,055

 

 

 

66,294

 

 

 

166,366

 

 

 

123,265

 

 

Total costs and operating expenses

202,067

 

 

 

148,821

 

 

 

578,338

 

 

 

372,198

 

 

Loss from operations

(107,288

)

 

 

(74,252

)

 

 

(312,793

)

 

 

(163,784

)

 

Interest income

689

 

 

 

2,313

 

 

 

3,277

 

 

 

8,271

 

 

Interest expense

(644

)

 

 

(8

)

 

 

(1,934

)

 

 

(30

)

 

Other income (expense), net

(187

)

 

 

345

 

 

 

(720

)

 

 

2,421

 

 

Loss before provision for income taxes

(107,430

)

 

 

(71,602

)

 

 

(312,170

)

 

 

(153,122

)

 

Provision for income taxes

96

 

 

 

68

 

 

 

289

 

 

 

116

 

 

Net loss

(107,526

)

 

 

(71,670

)

 

 

(312,459

)

 

 

(153,238

)

 

Adjustment of redeemable noncontrolling interest

 

 

 

(6,000

)

 

 

(2,300

)

 

 

(6,800

)

 

Net loss attributable to Guardant Health, Inc. common stockholders

$

(107,526

)

 

 

$

(77,670

)

 

 

$

(314,759

)

 

 

$

(160,038

)

 

Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted

$

(1.06

)

 

 

$

(0.78

)

 

 

$

(3.11

)

 

 

$

(1.66

)

 

Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted

101,420

 

 

 

99,554

 

 

 

101,184

 

 

 

96,659

 

 

Guardant Health, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands, except share and per share data)

 

 

September 30, 2021

 

December 31, 2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

832,370

 

 

 

$

832,977

 

 

Short-term marketable securities

653,601

 

 

 

961,903

 

 

Accounts receivable, net

60,744

 

 

 

53,299

 

 

Inventory

24,739

 

 

 

22,716

 

 

Prepaid expenses and other current assets, net

21,958

 

 

 

17,466

 

 

Total current assets

1,593,412

 

 

 

1,888,361

 

 

Long-term marketable securities

250,226

 

 

 

246,597

 

 

Property and equipment, net

106,156

 

 

 

62,782

 

 

Right-of-use assets

196,436

 

 

 

37,343

 

 

Intangible assets, net

14,698

 

 

 

16,155

 

 

Goodwill

3,290

 

 

 

3,290

 

 

Other assets, net

61,316

 

 

 

17,253

 

 

Total Assets

$

2,225,534

 

 

 

$

2,271,781

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

15,674

 

 

 

$

7,340

 

 

Accrued compensation

38,838

 

 

 

28,280

 

 

Accrued expenses

40,475

 

 

 

22,639

 

 

Deferred revenue

7,317

 

 

 

8,550

 

 

Total current liabilities

102,304

 

 

 

66,809

 

 

Convertible senior notes, net

1,134,180

 

 

 

806,292

 

 

Long-term operating lease liabilities

216,806

 

 

 

41,565

 

 

Other long-term liabilities

3,424

 

 

 

1,520

 

 

Total Liabilities

1,456,714

 

 

 

916,186

 

 

Redeemable noncontrolling interest

59,400

 

 

 

57,100

 

 

Stockholders’ equity:

 

 

 

Common stock, par value of $0.00001 per share; 350,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 101,623,257 and 100,213,985 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

1

 

 

 

1

 

 

Additional paid-in capital

1,626,926

 

 

 

1,902,389

 

 

Accumulated other comprehensive income

(593

)

 

 

2,697

 

 

Accumulated deficit

(916,914

)

 

 

(606,592

)

 

Total Stockholders’ Equity

709,420

 

 

 

1,298,495

 

 

Total Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity

$

2,225,534

 

 

 

$

2,271,781

 

 

Guardant Health, Inc.

Reconciliation of Selected GAAP Measures to Non-GAAP Measures

(unaudited)

(in thousands)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

GAAP cost of precision oncology testing

$

29,665

 

 

 

$

16,699

 

 

 

$

78,142

 

 

 

$

52,699

 

 

Amortization of intangible assets

(152

)

 

 

 

 

 

(449

)

 

 

(141

)

 

Stock-based compensation expense and related employer payroll tax payments

(762

)

 

 

(450

)

 

 

(2,449

)

 

 

(1,166

)

 

Non-GAAP cost of precision oncology testing

$

28,751

 

 

 

$

16,249

 

 

 

$

75,244

 

 

 

$

51,392

 

 

 

 

 

 

 

 

 

 

GAAP research and development expense

$

70,968

 

 

 

$

36,245

 

 

 

$

190,200

 

 

 

$

109,580

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

(43

)

 

Stock-based compensation expense and related employer payroll tax payments

(4,624

)

 

 

(2,474

)

 

 

(13,674

)

 

 

(7,503

)

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

(8,500

)

 

Non-GAAP research and development expense

$

66,344

 

 

 

$

33,771

 

 

 

$

176,526

 

 

 

$

93,534

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

50,228

 

 

 

$

25,095

 

 

 

$

132,282

 

 

 

$

75,225

 

 

Stock-based compensation expense and related employer payroll tax payments

(4,127

)

 

 

(2,379

)

 

 

(10,554

)

 

 

(6,374

)

 

Non-GAAP sales and marketing expense

$

46,101

 

 

 

$

22,716

 

 

 

$

121,728

 

 

 

$

68,851

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative expense

$

50,055

 

 

 

$

66,294

 

 

 

$

166,366

 

 

 

$

123,265

 

 

Amortization of intangible assets

(339

)

 

 

(503

)

 

 

(1,008

)

 

 

(1,081

)

 

Stock-based compensation expense and related employer payroll tax payments

(26,044

)

 

 

(50,397

)

 

 

(101,154

)

 

 

(72,959

)

 

Change in fair value of contingent consideration

(970

)

 

 

(70

)

 

 

(1,845

)

 

 

120

 

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

(1,207

)

 

Non-GAAP general and administrative expense

$

22,702

 

 

 

$

15,324

 

 

 

$

62,359

 

 

 

$

48,138

 

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(107,288

)

 

 

$

(74,252

)

 

 

$

(312,793

)

 

 

$

(163,784

)

 

Amortization of intangible assets

491

 

 

 

503

 

 

 

1,457

 

 

 

1,265

 

 

Stock-based compensation expense and related employer payroll tax payments

35,557

 

 

 

55,700

 

 

 

127,831

 

 

 

88,002

 

 

Change in fair value of contingent consideration

970

 

 

 

70

 

 

 

1,845

 

 

 

(120

)

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

9,707

 

 

Non-GAAP loss from operations

$

(70,270

)

 

 

$

(17,979

)

 

 

$

(181,660

)

 

 

$

(64,930

)

 

 

 

 

 

 

 

 

 

GAAP net loss

$

(107,526

)

 

 

$

(71,670

)

 

 

$

(312,459

)

 

 

$

(153,238

)

 

Amortization of intangible assets

491

 

 

 

503

 

 

 

1,457

 

 

 

1,265

 

 

Stock-based compensation expense and related employer payroll tax payments

35,557

 

 

 

55,700

 

 

 

127,831

 

 

 

88,002

 

 

Change in fair value of contingent consideration

970

 

 

 

70

 

 

 

1,845

 

 

 

(120

)

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

9,707

 

 

Non-GAAP net loss

$

(70,508

)

 

 

$

(15,397

)

 

 

$

(181,326

)

 

 

$

(54,384

)

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to Guardant Health, Inc. common stockholders

$

(107,526

)

 

 

$

(77,670

)

 

 

$

(314,759

)

 

 

$

(160,038

)

 

Amortization of intangible assets

491

 

 

 

503

 

 

 

1,457

 

 

 

1,265

 

 

Stock-based compensation expense and related employer payroll tax payments

35,557

 

 

 

55,700

 

 

 

127,831

 

 

 

88,002

 

 

Change in fair value of contingent consideration

970

 

 

 

70

 

 

 

1,845

 

 

 

(120

)

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

9,707

 

 

Adjustments relating to non-controlling interest

 

 

 

6,000

 

 

 

2,300

 

 

 

6,800

 

 

Non-GAAP net loss attributable to Guardant Health, Inc. common stockholders

$

(70,508

)

 

 

$

(15,397

)

 

 

$

(181,326

)

 

 

$

(54,384

)

 

 

 

 

 

 

 

 

 

GAAP net loss per share attributable to Guardant Health, Inc., common stockholders, basic and diluted

$

(1.06

)

 

 

$

(0.78

)

 

 

$

(3.11

)

 

 

$

(1.66

)

 

Non-GAAP net loss per share attributable to Guardant Health, Inc., common stockholders, basic and diluted

$

(0.70

)

 

 

$

(0.15

)

 

 

$

(1.79

)

 

 

$

(0.56

)

 

Weighted-average shares used in computing GAAP and Non-GAAP net loss per share, basic and diluted

101,420

 

 

 

99,554

 

 

 

101,184

 

 

 

96,659

 

 

Guardant Health, Inc.

Reconciliation of GAAP Net Loss Attributable to Guardant Health, Inc. Common Stockholders

to Adjusted EBITDA

(unaudited)

(in thousands)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to Guardant Health, Inc. common stockholders

$

(107,526

)

 

 

$

(77,670

)

 

 

$

(314,759

)

 

 

$

(160,038

)

 

Interest income

(689

)

 

 

(2,313

)

 

 

(3,277

)

 

 

(8,271

)

 

Interest expense

644

 

 

 

8

 

 

 

1,934

 

 

 

30

 

 

Other (income) expense, net

187

 

 

 

(345

)

 

 

720

 

 

 

(2,421

)

 

Provision for income taxes

96

 

 

 

68

 

 

 

289

 

 

 

116

 

 

Depreciation and amortization

5,544

 

 

 

4,353

 

 

 

16,181

 

 

 

11,462

 

 

Stock-based compensation expense and related employer payroll tax payments

35,557

 

 

 

55,700

 

 

 

127,831

 

 

 

88,002

 

 

Change in fair value of contingent consideration

970

 

 

 

70

 

 

 

1,845

 

 

 

(120

)

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

9,707

 

 

Adjustments relating to non-controlling interest

 

 

 

6,000

 

 

 

2,300

 

 

 

6,800

 

 

Adjusted EBITDA

$

(65,217

)

 

 

$

(14,129

)

 

 

$

(166,936

)

 

 

$

(54,733

)

 

 

Investor Contact:
Carrie Mendivil
investors@guardanthealth.com

Media Contact:
Michele Rest
press@guardanthealth.com

Julie Johnson
julie.johnson@uncappedcommunications.com

Source: Guardant Health, Inc.

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