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February, 23, 2022

Guardant Health Reports Fourth Quarter 2021 Financial Results and Provides 2022 Outlook

Q4 clinical and biopharma volumes up 48% and 36% year over year

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 and year ended December 31, 2021.

Recent Highlights

  • Revenue of $108 million for the fourth quarter of 2021 and $374 million for the full year 2021, an increase of 38% and 30% over the corresponding period of 2020
  • Reported 25,600 tests to clinical customers and 6,600 tests to biopharmaceutical customers in the fourth quarter of 2021, representing an increase of 48% and 36%, respectively, over the fourth quarter of 2020
  • Reached enrollment of 12,750 patients in ECLIPSE pivotal study for its Guardant Shield blood test to detect colorectal cancer
  • Enrolled first patient in SHIELD study to validate the performance of blood-based assay in lung cancer screening
  • Successfully finalized a $25 million settlement plus royalty-bearing licensing agreement with Foundation Medicine

“2021 was a transformative year for Guardant and our team continued to push the boundaries to deliver a new paradigm of cancer care,” said Helmy Eltoukhy, co-founder and co-CEO. “Our commercial team continued to deliver strong growth during the fourth quarter with clinical volumes increasing 48% year over year. This growth was particularly strong in the community setting where Guardant360 CDx grew twice as fast as in the academic centers. Looking ahead to 2022, we are bringing to fruition our vision for providing clinically differentiated offerings that will span the entire continuum of cancer care, including treatment selection, response monitoring, MRD and screening.”

“We believe the promise of blood-based cancer screening is quickly becoming a reality and Guardant is well-positioned to fill this critical need,” said AmirAli Talasaz, co-founder and co-CEO. “A successful readout of ECLIPSE will open up a $20 billion screening opportunity in colorectal cancer by bringing high-performance life-saving tests to millions of people, and SHIELD Lung, along with other future studies, will open up opportunities in lung and additional cancer types, paving the way towards a total addressable screening market of more than $50 billion.”

Fourth Quarter 2021 Financial Results

Revenue was $108.1 million for the three months ended December 31, 2021, a 38% increase from $78.3 million for the three months ended December 31, 2020. Precision oncology revenue grew 37% driven predominantly by an increase in clinical testing revenue which grew 40% over the prior year period. There were 25,600 clinical tests and 6,600 biopharmaceutical tests performed during the fourth quarter of 2021. Development services and other revenue increased 43% primarily due to royalty revenues earned pursuant to a settlement and license agreement entered into in December 2021, and the progression of collaboration projects with biopharmaceutical customers for companion diagnostic development services during the three months ended December 31, 2021.

Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $74.7 million for the fourth quarter of 2021, an increase of $24.8 million from $49.9 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 69%, as compared to 64% for the corresponding prior year period.

Operating expenses were $172.9 million for the fourth quarter of 2021, as compared to $141.1 million for the corresponding prior year period, an increase of 23%. Non-GAAP operating expenses were $146.2 million for the fourth quarter of 2021, as compared to $84.7 million for the corresponding prior year period.

Other income (expense) net increased to $25.9 million for the fourth quarter of 2021, from $1.2 million for the corresponding prior year period, primarily due to $25.0 million income pursuant to a settlement and license agreement entered into in December 2021.

Net loss attributable to Guardant Health, Inc. common stockholders was $90.9 million for the fourth quarter of 2021, as compared to $93.7 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $0.89 for the fourth quarter of 2021, as compared to $0.94 for the corresponding prior year period. Non-GAAP net loss was $70.4 million for the fourth quarter of 2021, as compared to $36.7 million for the corresponding prior year period. Non-GAAP net loss per share was $0.69 for the fourth quarter of 2021, as compared to $0.37 for the corresponding prior year period.

Adjusted EBITDA loss was $64.6 million for the fourth quarter of 2021, as compared to a $29.7 million loss for the corresponding prior year period.

Full Year 2021 Financial Results

Revenue was $373.7 million for the year ended December 31, 2021, a 30% increase from $286.7 million for the year ended December 31, 2020. Precision oncology revenue grew 29% driven predominantly by an increase in clinical testing revenue which grew 38% over the prior year period. There were 87,600 clinical tests and 18,600 biopharmaceutical tests performed during 2021. Development services and other revenue increased 38%.

Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $250.7 million for 2021, an increase of $56.5 million from $194.2 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 67%, as compared to 68% for the corresponding prior year period.

Operating expenses were $661.7 million for 2021, as compared to $449.1 million for the corresponding prior year period, an increase of 47%. Non-GAAP operating expenses were $506.8 million for 2021, as compared to $295.2 million for the corresponding prior year period.

Other income (expense) net increased to $25.2 million for the year ended December 31, 2021, from $3.6 million for the year ended December 31, 2020, primarily due to $25.0 million income pursuant to a settlement and license agreement entered into in December 2021.

Net loss attributable to Guardant Health, Inc. common stockholders was $405.7 million for 2021, as compared to $253.8 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $4.00 for 2021, as compared to $2.60 for the corresponding prior year period. Non-GAAP net loss was $251.7 million for 2021, as compared to $91.0 million for the corresponding prior year period. Non-GAAP net loss per share was $2.48 for 2021, as compared to $0.93 for the corresponding prior year period.

Adjusted EBITDA loss was $231.5 million for 2021, as compared to a $84.4 million loss for the corresponding prior year period.

Cash, cash equivalents and marketable securities were $1.6 billion as of December 31, 2021.

2022 Guidance

Guardant Health expects full year 2022 revenue to be in the range of $460 million to $470 million, representing 23% to 26% growth over full year 2021.

Webcast Information

Guardant Health will host a conference call to discuss the fourth quarter 2021 financial results after market close on Wednesday, February 23, 2022 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 redeemable 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 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 any current and periodic reports filed with the Securities and Exchange Commission thereafter. 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
December 31,

 

Twelve Months Ended
December 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

Revenue:

 

 

 

 

Precision oncology testing

$

88,707

 

$

64,703

 

$

304,312

 

$

236,324

 

Development services and other

 

19,401

 

 

13,613

 

 

69,341

 

 

50,406

 

Total revenue

 

108,108

 

 

78,316

 

 

373,653

 

 

286,730

 

Costs and operating expenses:

 

 

 

 

Cost of precision oncology testing

 

32,254

 

 

22,070

 

 

110,396

 

 

74,769

 

Cost of development services and other

 

1,168

 

 

6,337

 

 

12,516

 

 

17,766

 

Research and development expense

 

73,021

 

 

40,282

 

 

263,221

 

 

149,862

 

Sales and marketing expense

 

59,599

 

 

31,288

 

 

191,881

 

 

106,513

 

General and administrative expense

 

40,274

 

 

69,505

 

 

206,640

 

 

192,770

 

Total costs and operating expenses

 

206,316

 

 

169,482

 

 

784,654

 

 

541,680

 

Loss from operations

 

(98,208

)

 

(91,166

)

 

(411,001

)

 

(254,950

)

Interest income

 

653

 

 

1,900

 

 

3,930

 

 

10,171

 

Interest expense

 

(643

)

 

(4,736

)

 

(2,577

)

 

(4,766

)

Other income (expense), net

 

25,898

 

 

1,220

 

 

25,178

 

 

3,641

 

Loss before provision for income taxes

 

(72,300

)

 

(92,782

)

 

(384,470

)

 

(245,904

)

Provision for income taxes

 

11

 

 

263

 

 

300

 

 

379

 

Net loss

 

(72,311

)

 

(93,045

)

 

(384,770

)

 

(246,283

)

Adjustment of redeemable noncontrolling interest

 

(18,600

)

 

(700

)

 

(20,900

)

 

(7,500

)

Net loss attributable to Guardant Health, Inc. common stockholders

$

(90,911

)

$

(93,745

)

$

(405,670

)

$

(253,783

)

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

$

(0.89

)

$

(0.94

)

$

(4.00

)

$

(2.60

)

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

 

101,697

 

 

100,018

 

 

101,314

 

 

97,504

 

 

Guardant Health, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands, except share and per share data)

 

December 31, 2021

December 31, 2020

ASSETS

 

 

Current assets:

 

 

Cash and cash equivalents

$

492,202

 

$

832,977

 

Short-term marketable securities

 

440,546

 

 

961,903

 

Accounts receivable, net

 

97,652

 

 

53,299

 

Inventory

 

30,674

 

 

22,716

 

Prepaid expenses and other current assets, net

 

53,052

 

 

17,466

 

Total current assets

 

1,114,126

 

 

1,888,361

 

Long-term marketable securities

 

698,034

 

 

246,597

 

Property and equipment, net

 

124,461

 

 

62,782

 

Right-of-use assets

 

189,443

 

 

37,343

 

Intangible assets, net

 

14,207

 

 

16,155

 

Goodwill

 

3,290

 

 

3,290

 

Other assets, net

 

60,938

 

 

17,253

 

Total Assets

$

2,204,499

 

$

2,271,781

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

 

 

Current liabilities:

 

 

Accounts payable

$

17,580

 

$

7,340

 

Accrued compensation

 

42,496

 

 

28,280

 

Accrued expenses

 

45,285

 

 

22,639

 

Noncontrolling interest liability

 

78,000

 

 

 

Deferred revenue

 

11,326

 

 

8,550

 

Total current liabilities

 

194,687

 

 

66,809

 

Convertible senior notes, net

 

1,134,821

 

 

806,292

 

Long-term operating lease liabilities

 

226,053

 

 

41,565

 

Other long-term liabilities

 

3,933

 

 

1,520

 

Total Liabilities

 

1,559,494

 

 

916,186

 

Redeemable noncontrolling interest

 

 

 

57,100

 

Stockholders’ equity:

 

 

Common stock, par value of $0.00001 per share; 350,000,000 shares authorized as of December 31, 2021 and December 31, 2020; 101,767,446 and 100,213,985 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

 

1

 

 

1

 

Additional paid-in capital

 

1,657,593

 

 

1,902,389

 

Accumulated other comprehensive (loss) income

 

(4,764

)

 

2,697

 

Accumulated deficit

 

(1,007,825

)

 

(606,592

)

Total Stockholders’ Equity

 

645,005

 

 

1,298,495

 

Total Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity

$

2,204,499

 

$

2,271,781

 

Guardant Health, Inc.

Reconciliation of Selected GAAP Measures to Non-GAAP Measures

(unaudited)

(in thousands)

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

GAAP cost of precision oncology testing

$

32,254

 

$

22,070

 

$

110,396

 

$

74,769

 

Amortization of intangible assets

 

(152

)

 

(301

)

 

(601

)

 

(442

)

Stock-based compensation expense and related employer payroll tax payments

 

(1,174

)

 

(727

)

 

(3,623

)

 

(1,893

)

Non-GAAP cost of precision oncology testing

$

30,928

 

$

21,042

 

$

106,172

 

$

72,434

 

 

 

 

 

 

GAAP research and development expense

$

73,021

 

$

40,282

 

$

263,221

 

$

149,862

 

Amortization of intangible assets

 

 

 

 

 

 

 

(43

)

Stock-based compensation expense and related employer payroll tax payments

 

(5,696

)

 

(2,716

)

 

(19,370

)

 

(10,219

)

Acquisition related expenses

 

 

 

 

 

 

 

(8,500

)

Non-GAAP research and development expense

$

67,325

 

$

37,566

 

$

243,851

 

$

131,100

 

 

 

 

 

 

GAAP sales and marketing expense

$

59,599

 

$

31,288

 

$

191,881

 

$

106,513

 

Stock-based compensation expense and related employer payroll tax payments

 

(5,208

)

 

(3,032

)

 

(15,762

)

 

(9,406

)

Non-GAAP sales and marketing expense

$

54,391

 

$

28,256

 

$

176,119

 

$

97,107

 

 

 

 

 

 

GAAP general and administrative expense

$

40,274

 

$

69,505

 

$

206,640

 

$

192,770

 

Amortization of intangible assets

 

(339

)

 

(189

)

 

(1,347

)

 

(1,270

)

Stock-based compensation expense and related employer payroll tax payments

 

(14,951

)

 

(50,428

)

 

(116,105

)

 

(123,387

)

Change in fair value of contingent consideration

 

(535

)

 

 

 

(2,380

)

 

120

 

Acquisition related expenses

 

 

 

 

 

 

 

(1,207

)

Non-GAAP general and administrative expense

$

24,449

 

$

18,888

 

$

86,808

 

$

67,026

 

 

 

 

 

 

GAAP loss from operations

$

(98,208

)

$

(91,166

)

$

(411,001

)

$

(254,950

)

Amortization of intangible assets

 

491

 

 

490

 

 

1,948

 

 

1,755

 

Stock-based compensation expense and related employer payroll tax payments

 

27,029

 

 

56,903

 

 

154,860

 

 

144,905

 

Change in fair value of contingent consideration

 

535

 

 

 

 

2,380

 

 

(120

)

Acquisition related expenses

 

 

 

 

 

 

 

9,707

 

Non-GAAP loss from operations

$

(70,153

)

$

(33,773

)

$

(251,813

)

$

(98,703

)

 

 

 

 

 

GAAP net loss

$

(72,311

)

$

(93,045

)

$

(384,770

)

$

(246,283

)

Amortization of intangible assets

 

491

 

 

490

 

 

1,948

 

 

1,755

 

Stock-based compensation expense and related employer payroll tax payments

 

27,029

 

 

56,903

 

 

154,860

 

 

144,905

 

Change in fair value of contingent consideration

 

535

 

 

 

 

2,380

 

 

(120

)

Acquisition related expenses

 

 

 

 

 

 

 

9,707

 

Non-recurring other income

 

(26,100

)

 

(1,000

)

 

(26,100

)

 

(1,000

)

Non-GAAP net loss

$

(70,356

)

$

(36,652

)

$

(251,682

)

$

(91,036

)

 

 

 

 

 

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

$

(90,911

)

$

(93,745

)

$

(405,670

)

$

(253,783

)

Amortization of intangible assets

 

491

 

 

490

 

 

1,948

 

 

1,755

 

Stock-based compensation expense and related employer payroll tax payments

 

27,029

 

 

56,903

 

 

154,860

 

 

144,905

 

Change in fair value of contingent consideration

 

535

 

 

 

 

2,380

 

 

(120

)

Acquisition related expenses

 

 

 

 

 

 

 

9,707

 

Non-recurring other income

 

(26,100

)

 

(1,000

)

 

(26,100

)

 

(1,000

)

Adjustments relating to redeemable non-controlling interest

 

18,600

 

 

700

 

 

20,900

 

 

7,500

 

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

$

(70,356

)

$

(36,652

)

$

(251,682

)

$

(91,036

)

 

 

 

 

 

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

$

(0.89

)

$

(0.94

)

$

(4.00

)

$

(2.60

)

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

$

(0.69

)

$

(0.37

)

$

(2.48

)

$

(0.93

)

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

 

101,697

 

 

100,018

 

 

101,314

 

 

97,504

 

 

Guardant Health, Inc.

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

(unaudited)

(in thousands)

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

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

$

(90,911

)

$

(93,745

)

$

(405,670

)

$

(253,783

)

Interest income

 

(653

)

 

(1,900

)

 

(3,930

)

 

(10,171

)

Interest expense

 

643

 

 

4,736

 

 

2,577

 

 

4,766

 

Other (income) expense, net

 

(25,898

)

 

(1,220

)

 

(25,178

)

 

(3,641

)

Provision for income taxes

 

11

 

 

263

 

 

300

 

 

379

 

Depreciation and amortization

 

6,090

 

 

4,603

 

 

22,271

 

 

16,065

 

Stock-based compensation expense and related employer payroll tax payments

 

27,029

 

 

56,903

 

 

154,860

 

 

144,905

 

Change in fair value of contingent consideration

 

535

 

 

 

 

2,380

 

 

(120

)

Acquisition related expenses

 

 

 

 

 

 

 

9,707

 

Adjustments relating to redeemable non-controlling interest

 

18,600

 

 

700

 

 

20,900

 

 

7,500

 

Adjusted EBITDA

$

(64,554

)

$

(29,660

)

$

(231,490

)

$

(84,393

)

 

Investor Contact:
Carrie Mendivil
investors@guardanthealth.com

Media Contact:
Michele Rest
press@guardanthealth.com

Source: Guardant Health, Inc.

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