- Total Revenue of $71.0 million
- Core Revenue grows 5% year-over-year to $70.2 million
- Reiterates Full Year 2024 Core Revenue Guidance of $280
million, Improves Earnings Per Share Guidance for 2024
Fulgent Genetics, Inc. (NASDAQ: FLGT) (“Fulgent,” or the
“Company”), a technology-based company with a well-established
laboratory services business and a therapeutic development
business, today announced financial results for its second quarter
ended June 30, 2024.
Second Quarter 2024 Results:
- Total Revenue of $71.0 million
- Core Revenue1 grew 5% year-over-year to $70.2 million
- GAAP loss of $8.7 million, or ($0.29) per share
- Non-GAAP income of $4.7 million, or $0.15 per share
- Adjusted EBITDA loss of $727,000
- Cash from operations of $4.3 million
- Cash, cash equivalents, and investments in marketable
securities of $837.9 million as of June 30, 2024
Note:
1) Core Revenue is revenue calculated in
accordance with GAAP minus revenue from COVID-19 testing products
and services including COVID-19 NGS testing revenue, each as
calculated in accordance with GAAP.
Non-GAAP income (loss), non-GAAP income (loss) per share,
adjusted EBITDA income (loss), non-GAAP gross profit and margin,
and non-GAAP operating income (loss) and margin, are described
below under “Note Regarding Non-GAAP Financial Measures” and are
reconciled to the most directly comparable GAAP financial measure,
GAAP income (loss), GAAP gross profit and margin, and GAAP
operating income (loss) and margin, in the accompanying tables.
Ming Hsieh, Chairperson of the Board of Directors and Chief
Executive Officer, said, “Laboratory Services continue to be a
source of strength for Fulgent, fueling our initiatives and
business model, with momentum in Precision Diagnostics. In
Therapeutics Development, we are off to a good start with initial
enrollment of our Phase 2 trial of FID-007 in Head and Neck Cancer,
and we continue to move our next candidate, FID-022, through
preclinical studies toward an Investigational New Drug (IND)
application by the end of 2024. In the meantime, with our projected
revenue from Laboratory Services, we believe we are well-positioned
to execute our strategy.”
Paul Kim, Chief Financial Officer, said, “We continue to be on
track with the operational objectives we set at the beginning of
2024, remaining in an enviable cash position with flexibility to
execute.”
Outlook:
For the full year 2024, Fulgent expects:
- Core Revenue of approximately $280 million
- GAAP loss improvement from approximately ($2.25) per share to
approximately ($1.95) per share
- Non-GAAP loss improvement from approximately ($1.05) per share
to approximately ($0.30) per share
- Cash, cash equivalents, and investments in marketable
securities of approximately $800 million as of December 31,
2024*
*Cash expenditures may be higher or lower than currently
estimated due to a variety of factors and circumstances, including
as a result of the Company’s ongoing stock repurchase program or
other expenditures outside the ordinary course of business.
Conference Call Information
Fulgent will host a conference call for the investment community
today at 8:30 AM ET (5:30 AM PT) to discuss its second quarter 2024
results. The call may be accessed through a live audio webcast in
the Investor Relations section of the Company’s website,
http://ir.fulgentgenetics.com. An audio replay will be available at
the same location.
Note Regarding Non-GAAP Financial Measures
Certain information set forth in this press release and/or to be
discussed on the Company’s earnings call, including non-GAAP income
(loss), non-GAAP income (loss) per share, adjusted EBITDA income
(loss), non-GAAP gross profit and margin, and non-GAAP operating
income (loss) and margin are non-GAAP financial measures. Fulgent
believes this information is useful to investors because it
provides a basis for measuring the performance of the Company’s
business, excluding certain income or expense items that management
believes are not directly attributable to the Company’s operating
results. Fulgent defines non-GAAP income (loss) as net income
(loss) calculated in accordance with accounting principles
generally accepted in the United States of America, or GAAP, plus
amortization of intangible assets, plus equity-based compensation
expenses, plus or minus the non-GAAP tax effect, and plus or minus
other charges or gains, as identified, that management believes are
not representative of the Company’s operations. For the three and
six months ended June 30, 2023, the non-GAAP tax effect was
calculated by applying the statutory corporate tax rate on the
amortization of intangible assets and equity-based compensation
expenses. For the three and six months ended June 30, 2024, the
non-GAAP tax effect was calculated by excluding from the GAAP
provision the impact of the amortization of intangible assets and
equity-based compensation expenses. Fulgent defines adjusted EBITDA
income (loss) as GAAP income (loss) plus or minus interest
(expense) income, plus or minus provisions (benefits) for income
taxes, plus equity-based compensation expenses, plus depreciation
and amortization, and plus or minus other charges or gains, as
identified, that management believes are not representative of the
Company’s operations. Fulgent defines non-GAAP gross profit as
gross profit calculated in accordance with GAAP plus equity-based
compensation included in cost of revenue as shown in the table
below. Fulgent defines non-GAAP gross margin by taking non-GAAP
gross profit and dividing it by GAAP revenue. Fulgent defines
non-GAAP operating profit (loss) by taking GAAP operating profit
(loss) and adding equity-based compensation and amortization of
intangible assets. Non-GAAP operating margin is calculated by
taking non-GAAP operating profit (loss) and dividing by GAAP
revenue. Fulgent may continue to incur expenses similar to the
items added to or subtracted from GAAP income (loss) to calculate
non-GAAP income (loss) and adjusted EBITDA income (loss);
accordingly, the exclusion of these items in the presentation of
these non-GAAP financial measures should not be construed as an
implication that these items are unusual, infrequent or
non-recurring. Management uses these non-GAAP financial measures
along with the most directly comparable GAAP financial measure of
net income (loss), gross profit and margin, and operating income
(loss) and margin, in evaluating the Company’s operating
performance. Non-GAAP financial measures should not be considered
in isolation from, or as a substitute for, financial information
presented in conformity with GAAP, and non-GAAP financial measures
as reported by Fulgent may not be comparable to similarly titled
metrics reported by other companies.
About Fulgent
Fulgent is a technology-based company with a well-established
laboratory services business and a therapeutic development
business. Fulgent’s laboratory services business, which was
formerly referred to as the clinical diagnostic business, includes
technical laboratory services and professional interpretation of
laboratory results by licensed physicians. Fulgent’s therapeutic
development business is focused on developing drug candidates for
treating a broad range of cancers using a novel nanoencapsulation
and targeted therapy platform designed to improve the therapeutic
window and pharmacokinetic profile of new and existing cancer
drugs. The Company aims to transform from a genomic diagnostic
business into a fully integrated precision medicine company.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Examples of forward-looking statements in this press release
include statements about, among other things: future performance;
guidance regarding expected quarterly and annual financial results,
core revenues, GAAP loss, non-GAAP loss, and cash, cash equivalents
and investments in marketable securities; evaluations and judgments
regarding the stability of certain revenue sources, the Company’s
cash position and sufficiency of its resources, momentum,
trajectory, vision, future opportunities and future growth of the
Company’s testing and laboratory services, technologies and
expansion; the Company’s research and development efforts,
including any implications that the results of earlier clinical
trials will be representative or consistent with later clinical
trials, the expected timing of enrollment and regulatory filings
for these trials and the availability of data or results of these
trials, including any implication that interim or preliminary data
will be representative of final data; the Company’s identification
and evaluation of opportunities and its ability to capitalize on
opportunities, capture market share, or expand its presence in
certain markets; and the Company’s ability to continue to grow its
business.
Forward-looking statements are statements other than historical
facts and relate to future events or circumstances or the Company’s
future performance, and they are based on management’s current
assumptions, expectations, and beliefs concerning future
developments and their potential effect on the Company’s business.
These forward-looking statements are subject to a number of risks
and uncertainties, which may cause the forward-looking events and
circumstances described in this press release to not occur, and
actual results to differ materially and adversely from those
described in or implied by the forward-looking statements. These
risks and uncertainties include, among others: the market potential
for, and the rate and degree of market adoption of, the Company’s
tests; its ability to maintain turnaround times and otherwise keep
pace with rapidly changing technology; the Company’s ability to
maintain the low internal costs of its business model; the
Company’s ability to maintain an acceptable margin; risks related
to volatility in the Company’s results, which can fluctuate
significantly from period to period; risks associated with the
composition of the Company’s customer base, which can fluctuate
from period to period and can be comprised of a small number of
customers that account for a significant portion of the Company’s
revenue; the Company’s level of success in obtaining coverage and
adequate reimbursement and collectability levels from third-party
payors for its tests and testing services; the Company’s level of
success in establishing and obtaining the intended benefits from
partnerships, strategic investments, joint ventures, acquisitions,
or other relationships; the success of the Company’s development
efforts, including the Company’s ability to progress its candidates
through clinical trials on the timelines expected; the Company’s
compliance with the various evolving and complex laws and
regulations applicable to its business and its industry; and the
Company’s ability to protect its proprietary technology and
intellectual property. As a result of these risks and
uncertainties, forward-looking statements should not be relied on
or viewed as predictions of future events.
The forward-looking statements made in this press release speak
only as of the date of this press release, and the Company assumes
no obligation to update publicly any such forward-looking
statements to reflect actual results or to changes in expectations,
except as otherwise required by law.
The Company’s reports filed with the U.S. Securities and
Exchange Commission, or the SEC, including its annual report on
Form 10-K for the fiscal year ended December 31, 2023, filed with
the SEC on February 28, 2024, and the other reports it files from
time to time, including subsequently filed annual, quarterly and
current reports, are made available on the Company’s website upon
their filing with the SEC. These reports contain more information
about the Company, its business and the risks affecting its
business, as well as its results of operations for the periods
covered by the financial results included in this press
release.
FULGENT GENETICS, INC.
Condensed Consolidated Balance Sheet
Data
June 30, 2024 and December 31,
2023
(in thousands)
June 30, 2024
December 31, 2023
ASSETS:
Cash and cash equivalents
$
65,111
$
97,473
Investments in marketable securities
772,758
750,252
Accounts receivable, net
56,573
51,132
Property, plant, and equipment, net
93,368
83,464
Other assets
244,429
253,007
Total assets
$
1,232,239
$
1,235,328
LIABILITIES & EQUITY:
Accounts payable, accrued liabilities and
other liabilities
$
103,391
$
102,042
Total stockholders’ equity
1,128,848
1,133,286
Total liabilities & equity
$
1,232,239
$
1,235,328
FULGENT GENETICS, INC.
Condensed Consolidated Statement of
Operations Data
Three and Six Months Ended June 30,
2024 and 2023
(in thousands, except per share
data)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue
$
71,028
$
67,853
$
135,513
$
134,021
Cost of revenue (1)
44,537
47,281
86,918
94,638
Gross profit
26,491
20,572
48,595
39,383
Operating expenses:
Research and development (1)
13,486
9,692
24,920
19,474
Selling and marketing (1)
8,595
10,723
17,584
20,806
General and administrative (1)
21,326
17,993
42,815
39,795
Amortization of intangible assets
1,990
1,962
3,980
3,930
Total operating expenses
45,397
40,370
89,299
84,005
Operating loss
(18,906
)
(19,798
)
(40,704
)
(44,622
)
Interest and other income, net
7,692
5,098
15,317
8,873
Loss before income taxes
(11,214
)
(14,700
)
(25,387
)
(35,749
)
Benefit from income taxes
(2,124
)
(3,110
)
(2,451
)
(8,310
)
Net loss from consolidated operations
(9,090
)
(11,590
)
(22,936
)
(27,439
)
Net loss attributable to noncontrolling
interests
380
361
764
870
Net loss attributable to Fulgent
$
(8,710
)
$
(11,229
)
$
(22,172
)
$
(26,569
)
Net loss attributable to Fulgent:
Basic
$
(0.29
)
$
(0.38
)
$
(0.74
)
$
(0.90
)
Diluted
$
(0.29
)
$
(0.38
)
$
(0.74
)
$
(0.90
)
Weighted-average common shares:
Basic
30,098
29,813
29,933
29,675
Diluted
30,098
29,813
29,933
29,675
(1) Equity-based compensation expense was
allocated as follows:
Cost of revenue
$
1,999
$
2,359
$
4,008
$
4,753
Research and development
4,136
3,670
7,980
7,118
Selling and marketing
1,002
1,094
2,052
2,455
General and administrative
4,498
3,200
9,113
6,262
Total equity-based compensation
expense
$
11,635
$
10,323
$
23,153
$
20,588
FULGENT GENETICS, INC.
Non-GAAP Income (Loss)
Reconciliation
Three and Six Months Ended June 30,
2024 and 2023
(in thousands, except per share
data)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net loss attributable to Fulgent
$
(8,710
)
$
(11,229
)
$
(22,172
)
$
(26,569
)
Amortization of intangible assets
1,990
1,962
3,980
3,930
Equity-based compensation expense
11,635
10,323
23,153
20,588
Non-GAAP tax effect (1)
(224
)
(3,440
)
(539
)
(6,865
)
Non-GAAP income (loss) attributable to
Fulgent
$
4,691
$
(2,384
)
$
4,422
$
(8,916
)
Net loss per common share attributable to
Fulgent:
Basic
$
(0.29
)
$
(0.38
)
$
(0.74
)
$
(0.90
)
Diluted
$
(0.29
)
$
(0.38
)
$
(0.74
)
$
(0.90
)
Non-GAAP income (loss) per common share
attributable to Fulgent:
Basic
$
0.16
$
(0.08
)
$
0.15
$
(0.30
)
Diluted
$
0.15
$
(0.08
)
$
0.15
$
(0.30
)
Weighted average common shares:
Basic
30,098
29,813
29,933
29,675
Diluted
30,371
29,813
30,271
29,675
(1) Tax rates as follows:
During the three and six months ended June
30, 2024, the Company calculated an income tax provision on a
non-GAAP basis. For the three and six months ended June 30, 2023,
the Company calculated the non-GAAP tax effect by applying the
statutory corporate tax rate on the amortization of intangible
assets and equity-based compensation expenses for a tax rate of
28%.
FULGENT GENETICS, INC.
Non-GAAP Adjusted EBITDA
Reconciliation
Three and Six Months Ended June 30,
2024 and 2023
(in thousands, except per share
data)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net loss attributable to Fulgent
$
(8,710
)
$
(11,229
)
$
(22,172
)
$
(26,569
)
Interest income, net
(7,681
)
(5,003
)
(15,315
)
(8,775
)
Benefit from income taxes
(2,124
)
(3,110
)
(2,451
)
(8,310
)
Equity-based compensation expense
11,635
10,323
23,153
20,588
Depreciation and amortization
6,153
6,312
12,816
13,191
Adjusted EBITDA
$
(727
)
$
(2,707
)
$
(3,969
)
$
(9,875
)
FULGENT GENETICS, INC.
Non-GAAP Operating Margin
Three and Six Months Ended June 30,
2024 and 2023
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue
$
71,028
$
67,853
$
135,513
$
134,021
Cost of revenue
44,537
47,281
86,918
94,638
Gross profit
26,491
20,572
48,595
39,383
Gross margin
37.3
%
30.3
%
35.9
%
29.4
%
Equity-based compensation included in cost
of revenue
1,999
2,359
4,008
4,753
Non-GAAP gross profit
28,490
22,931
52,603
44,136
Non-GAAP gross margin
40.1
%
33.8
%
38.8
%
32.9
%
Operating expenses
45,397
40,370
89,299
84,005
Equity-based compensation included in
operating expenses
9,636
7,964
19,145
15,835
Amortization of intangible assets
1,990
1,962
3,980
3,930
Non-GAAP operating expenses
33,771
30,444
66,174
64,240
Non-GAAP operating loss
$
(5,281
)
$
(7,513
)
$
(13,571
)
$
(20,104
)
Non-GAAP operating margin
-7.4
%
-11.1
%
-10.0
%
-15.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801327697/en/
Investor Relations Contact: The Blueshirt Group Melanie
Solomon, melanie@blueshirtgroup.com
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