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August, 04, 2022

Guardant Health Reports Second Quarter 2022 Financial Results

Q2 clinical and biopharma volumes up 40% and 65% year over year

PALO ALTO, 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 June 30, 2022.

Recent Highlights

  • Revenue of $109.1 million for the second quarter of 2022, an increase of 19% over the corresponding period of 2021
  • Reported 29,300 tests to clinical customers and 6,000 tests to biopharmaceutical customers in the second quarter of 2022, representing an increase of 40% and 65%, respectively, over the second quarter of 2021
  • Received Medicare Coverage for Guardant Reveal™, the first blood-only liquid biopsy test for molecular residual disease testing now covered for certain fee-for-service Medicare patients in the US with stage II or III colorectal cancer
  • Completed the purchase of the Guardant Health AMEA Joint Venture, creating a unified organization to expand commercialization of Guardant Health's industry-leading liquid biopsy technology across the region
  • Executed a strategic partnership agreement to offer comprehensive genomic profiling tests to biopharmaceutical companies in China with Adicon, a leading independent clinical laboratory company
  • The Company’s Shield LDT launch was well received by clinicians and patients and with early activity exceeding expectations
  • Expect both ECLIPSE readout and PMA submission for Shield assay during the second half of the year

“We ended the second quarter with record revenue for Guardant Health with strong volume growth in Clinical Oncology while growing and strengthening our base of biopharma partners. We were pleased to receive Medicare coverage for Guardant Reveal™, providing stage II or III colorectal cancer patients and their doctors greater access to an easy to use blood-based test for molecular residual disease testing. We expect this to help fuel continued expansion as we look ahead to future product launches in the second half of the year,” said Helmy Eltoukhy, co-founder and co-CEO.

“We have had an exciting second quarter with the recent launch of our Shield LDT screening test. We have observed strong adherence to our blood-based screening test, and better than expected uptake by early clinical adopters,” said AmirAli Talasaz, co-founder and co-CEO. “We continue to progress our pivotal ECLIPSE trial. We remain confident in our ambition to develop Shield into the leading non-invasive CRC screening methodology with future expansion into high-sensitivity multi-cancer screening.”

Second Quarter 2022 Financial Results

Revenue was $109.1 million for the three months ended June 30, 2022, a 19% increase from $92.1 million for the three months ended June 30, 2021. Precision oncology revenue grew 27%, driven predominantly by an increase in clinical testing volume and biopharma sample volume, which grew 40% and 65%, respectively, over the prior year period. Development services and other revenue decreased 12%, owing to multiple factors. The primary drivers were the change in collaboration projects with biopharmaceutical customers for companion diagnostic development and regulatory approval services, and the discontinuation of our Guardant-19 tests in August 2021. These factors were partially offset by revenues earned from licensing our technologies during the three months ended June 30, 2022.

Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $72.4 million for the second quarter of 2022, an increase of $10.2 million from $62.2 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 66%, as compared to 68% for the corresponding prior year period.

Operating expenses were $202.7 million for the second quarter of 2022, as compared to $159.8 million for the corresponding prior year period, an increase of 27%. Non-GAAP operating expenses were $176.2 million for the second quarter of 2022, as compared to $124.7 million for the corresponding prior year period.

Net loss attributable to Guardant Health, Inc. common stockholders was $229.4 million for the second quarter of 2022, as compared to $97.6 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $2.25 for the second quarter of 2022, as compared to $0.96 for the corresponding prior year period. Non-GAAP net loss was $101.8 million for the second quarter of 2022, as compared to $61.4 million for the corresponding prior year period. Non-GAAP net loss per share was $1.00 for the second quarter of 2022, as compared to $0.61 for the corresponding prior year period.

Adjusted EBITDA loss was $94.3 million for the second quarter of 2022, as compared to a $56.4 million loss for the corresponding prior year period.

Cash, cash equivalents and marketable securities were $1.2 billion as of June 30, 2022.

2022 Guidance

Guardant Health continues to expect 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 second quarter 2022 financial results after market close on Thursday, August 4, 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 of noncontrolling interest liability, adjustments relating to 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, changes in estimated fair value of noncontrolling interest liability, adjustments relating to redeemable noncontrolling 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. The Guardant Health screening portfolio, including the Shield™ test, aims to address the needs of 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, 2021, 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 June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Precision oncology testing

$

92,062

 

 

$

72,604

 

 

$

176,198

 

 

$

136,333

 

Development services and other

 

17,082

 

 

 

19,497

 

 

 

29,045

 

 

 

34,433

 

Total revenue

 

109,144

 

 

 

92,101

 

 

 

205,243

 

 

 

170,766

 

Costs and operating expenses:

 

 

 

 

 

 

 

Cost of precision oncology testing

 

34,375

 

 

 

24,887

 

 

 

65,059

 

 

 

48,477

 

Cost of development services and other

 

2,352

 

 

 

5,040

 

 

 

3,649

 

 

 

10,197

 

Research and development expense

 

85,455

 

 

 

63,724

 

 

 

167,212

 

 

 

119,232

 

Sales and marketing expense

 

73,603

 

 

 

47,716

 

 

 

138,035

 

 

 

82,054

 

General and administrative expense

 

43,680

 

 

 

48,376

 

 

 

84,947

 

 

 

116,311

 

Total costs and operating expenses

 

239,465

 

 

 

189,743

 

 

 

458,902

 

 

 

376,271

 

Loss from operations

 

(130,321

)

 

 

(97,642

)

 

 

(253,659

)

 

 

(205,505

)

Interest income

 

1,387

 

 

 

1,037

 

 

 

2,165

 

 

 

2,588

 

Interest expense

 

(645

)

 

 

(644

)

 

 

(1,289

)

 

 

(1,290

)

Other income (expense), net

 

378

 

 

 

(243

)

 

 

330

 

 

 

(533

)

Fair value adjustments of noncontrolling interest liability

 

(99,785

)

 

 

 

 

 

(99,785

)

 

 

 

Loss before provision for income taxes

 

(228,986

)

 

 

(97,492

)

 

 

(352,238

)

 

 

(204,740

)

Provision for income taxes

 

446

 

 

 

83

 

 

 

422

 

 

 

193

 

Net loss

 

(229,432

)

 

 

(97,575

)

 

 

(352,660

)

 

 

(204,933

)

Adjustment of redeemable noncontrolling interest

 

 

 

 

 

 

 

 

 

 

(2,300

)

Net loss attributable to Guardant Health, Inc. common stockholders

$

(229,432

)

 

$

(97,575

)

 

$

(352,660

)

 

$

(207,233

)

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

$

(2.25

)

 

$

(0.96

)

 

$

(3.46

)

 

$

(2.05

)

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

 

102,047

 

 

 

101,172

 

 

 

101,950

 

 

 

101,064

 

 

Guardant Health, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands, except share and per share data)

 

 

June 30, 2022

 

December 31, 2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

215,169

 

 

$

492,202

 

Short-term marketable securities

 

638,521

 

 

 

440,546

 

Accounts receivable, net

 

95,276

 

 

 

97,652

 

Inventory

 

59,890

 

 

 

30,674

 

Prepaid expenses and other current assets, net

 

28,283

 

 

 

53,052

 

Total current assets

 

1,037,139

 

 

 

1,114,126

 

Long-term marketable securities

 

382,575

 

 

 

698,034

 

Property and equipment, net

 

163,362

 

 

 

124,461

 

Right-of-use assets, net

 

183,703

 

 

 

189,443

 

Intangible assets, net

 

13,108

 

 

 

14,207

 

Goodwill

 

3,290

 

 

 

3,290

 

Other assets, net

 

70,560

 

 

 

60,938

 

Total Assets

$

1,853,737

 

 

$

2,204,499

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

36,971

 

 

$

17,580

 

Accrued compensation

 

38,672

 

 

 

42,496

 

Accrued expenses

 

77,157

 

 

 

45,285

 

Noncontrolling interest liability

 

 

 

 

78,000

 

Deferred revenue

 

14,955

 

 

 

11,326

 

Total current liabilities

 

167,755

 

 

 

194,687

 

Convertible senior notes, net

 

1,136,105

 

 

 

1,134,821

 

Long-term operating lease liabilities

 

221,503

 

 

 

226,053

 

Other long-term liabilities

 

9,287

 

 

 

3,933

 

Total Liabilities

 

1,534,650

 

 

 

1,559,494

 

Stockholders’ equity:

 

 

 

Common stock, par value of $0.00001 per share; 350,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 102,186,856 and 101,767,446 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

1

 

 

 

1

 

Additional paid-in capital

 

1,703,832

 

 

 

1,657,593

 

Accumulated other comprehensive loss

 

(24,261

)

 

 

(4,764

)

Accumulated deficit

 

(1,360,485

)

 

 

(1,007,825

)

Total Stockholders’ Equity

 

319,087

 

 

 

645,005

 

Total Liabilities and Stockholders’ Equity

$

1,853,737

 

 

$

2,204,499

 

 

Guardant Health, Inc.

Reconciliation of Selected GAAP Measures to Non-GAAP Measures

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

GAAP cost of precision oncology testing

$

34,375

 

 

$

24,887

 

 

$

65,059

 

 

$

48,477

 

Amortization of intangible assets

 

(149

)

 

 

(149

)

 

 

(297

)

 

 

(297

)

Stock-based compensation expense and related employer payroll tax payments

 

(1,229

)

 

 

(888

)

 

 

(2,405

)

 

 

(1,687

)

Non-GAAP cost of precision oncology testing

$

32,997

 

 

$

23,850

 

 

$

62,357

 

 

$

46,493

 

 

 

 

 

 

 

 

 

GAAP research and development expense

$

85,455

 

 

$

63,724

 

 

$

167,212

 

 

$

119,232

 

Stock-based compensation expense and related employer payroll tax payments

 

(6,191

)

 

 

(4,659

)

 

 

(11,601

)

 

 

(9,050

)

Contingent consideration

 

(177

)

 

 

 

 

 

(2,297

)

 

 

 

Non-GAAP research and development expense

$

79,087

 

 

$

59,065

 

 

$

153,314

 

 

$

110,182

 

 

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

73,603

 

 

$

47,716

 

 

$

138,035

 

 

$

82,054

 

Amortization of intangible assets

 

(134

)

 

 

 

 

 

(134

)

 

 

 

Stock-based compensation expense and related employer payroll tax payments

 

(6,054

)

 

 

(3,493

)

 

 

(11,624

)

 

 

(6,427

)

Non-GAAP sales and marketing expense

$

67,415

 

 

$

44,223

 

 

$

126,277

 

 

$

75,627

 

 

 

 

 

 

 

 

 

GAAP general and administrative expense

$

43,680

 

 

$

48,376

 

 

$

84,947

 

 

$

116,311

 

Amortization of intangible assets

 

(336

)

 

 

(336

)

 

 

(668

)

 

 

(669

)

Stock-based compensation expense and related employer payroll tax payments

 

(12,252

)

 

 

(25,735

)

 

 

(25,087

)

 

 

(75,110

)

Contingent consideration

 

(1,415

)

 

 

(875

)

 

 

(3,805

)

 

 

(875

)

Acquisition related expenses

 

63

 

 

 

 

 

 

 

 

 

 

Non-GAAP general and administrative expense

$

29,740

 

 

$

21,430

 

 

$

55,387

 

 

$

39,657

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(130,321

)

 

$

(97,642

)

 

$

(253,659

)

 

$

(205,505

)

Amortization of intangible assets

 

619

 

 

 

485

 

 

 

1,099

 

 

 

966

 

Stock-based compensation expense and related employer payroll tax payments

 

25,726

 

 

 

34,775

 

 

 

50,717

 

 

 

92,274

 

Contingent consideration

 

1,592

 

 

 

875

 

 

 

6,102

 

 

 

875

 

Acquisition related expenses

 

(63

)

 

 

 

 

 

 

 

 

 

Non-GAAP loss from operations

$

(102,447

)

 

$

(61,507

)

 

$

(195,741

)

 

$

(111,390

)

 

 

 

 

 

 

 

 

GAAP net loss

$

(229,432

)

 

$

(97,575

)

 

$

(352,660

)

 

$

(204,933

)

Amortization of intangible assets

 

619

 

 

 

485

 

 

 

1,099

 

 

 

966

 

Stock-based compensation expense and related employer payroll tax payments

 

25,726

 

 

 

34,775

 

 

 

50,717

 

 

 

92,274

 

Contingent consideration

 

1,592

 

 

 

875

 

 

 

6,102

 

 

 

875

 

Acquisition related expenses

 

(63

)

 

 

 

 

 

 

 

 

 

Fair value adjustments of noncontrolling interest liability

 

99,785

 

 

 

 

 

 

99,785

 

 

 

 

Non-GAAP net loss

$

(101,773

)

 

$

(61,440

)

 

$

(194,957

)

 

$

(110,818

)

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

$

(229,432

)

 

$

(97,575

)

 

$

(352,660

)

 

$

(207,233

)

Amortization of intangible assets

 

619

 

 

 

485

 

 

 

1,099

 

 

 

966

 

Stock-based compensation expense and related employer payroll tax payments

 

25,726

 

 

 

34,775

 

 

 

50,717

 

 

 

92,274

 

Contingent consideration

 

1,592

 

 

 

875

 

 

 

6,102

 

 

 

875

 

Acquisition related expenses

 

(63

)

 

 

 

 

 

 

 

 

 

Fair value adjustments of noncontrolling interest liability

 

99,785

 

 

 

 

 

 

99,785

 

 

 

 

Adjustment of redeemable noncontrolling interest

 

 

 

 

 

 

 

 

 

 

2,300

 

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

$

(101,773

)

 

$

(61,440

)

 

$

(194,957

)

 

$

(110,818

)

 

 

 

 

 

 

 

 

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

$

(2.25

)

 

$

(0.96

)

 

$

(3.46

)

 

$

(2.05

)

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

$

(1.00

)

 

$

(0.61

)

 

$

(1.91

)

 

$

(1.10

)

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

 

102,047

 

 

 

101,172

 

 

 

101,950

 

 

 

101,064

 

 

Guardant Health, Inc.

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

to Adjusted EBITDA

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

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

$

(229,432

)

 

$

(97,575

)

 

$

(352,660

)

 

$

(207,233

)

Interest income

 

(1,387

)

 

 

(1,037

)

 

 

(2,165

)

 

 

(2,588

)

Interest expense

 

645

 

 

 

644

 

 

 

1,289

 

 

 

1,290

 

Other (income) expense, net

 

(378

)

 

 

243

 

 

 

(330

)

 

 

533

 

Provision for income taxes

 

446

 

 

 

83

 

 

 

422

 

 

 

193

 

Depreciation and amortization

 

8,785

 

 

 

5,627

 

 

 

15,986

 

 

 

10,637

 

Stock-based compensation expense and related employer payroll tax payments

 

25,726

 

 

 

34,775

 

 

 

50,717

 

 

 

92,274

 

Contingent consideration

 

1,592

 

 

 

875

 

 

 

6,102

 

 

 

875

 

Acquisition related expenses

 

(63

)

 

 

 

 

 

 

 

 

 

Fair value adjustments of noncontrolling interest liability

 

99,785

 

 

 

 

 

 

99,785

 

 

 

 

Adjustment of redeemable noncontrolling interest

 

 

 

 

 

 

 

 

 

 

2,300

 

Adjusted EBITDA

$

(94,281

)

 

$

(56,365

)

 

$

(180,854

)

 

$

(101,719

)

 

Investor Contact:
investors@guardanthealth.com

Media Contact:
press@guardanthealth.com

Source: Guardant Health, Inc.

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