GeneDx Reports Third Quarter 2024 Financial Results and Business Highlights

Achieved profitability milestone with third quarter adjusted net income¹ of $1.2M

Reported third quarter 2024 revenues² of $76.6M with 77% year-over-year growth of exome and genome test revenue

Expanded third quarter 2024 adjusted gross margins² to 64%

Raising guidance to deliver between $284M and $290M in FY 2024 revenue

GeneDx to host conference call today at 8:30 a.m. ET

STAMFORD, Conn.--(BUSINESS WIRE)--GeneDx Holdings Corp. (Nasdaq: WGS), a leader in delivering improved health outcomes through genomic insights, today reported its financial results for the third quarter of 2024.

“We delivered 77% growth on exome and genome revenues in Q3 and have reached the point of profitability, a significant milestone in our company’s history,” said Katherine Stueland, CEO of GeneDx. “Our advancements in genomics are redefining the standard of care, setting new industry standards for clinical utility and economic efficiency, and shortening the time to a diagnosis for thousands of families. With an ever-growing number of families eligible for our services, our growth outlook is healthy and sustainable. We continue to bring life-changing impact to the pediatric outpatient and NICU settings, and we are now establishing the foundation for clinically-actionable, responsible, and scalable genomic newborn screening.”

“Once again, our quarterly performance exceeded our top and bottom-line expectations. The third quarter marked our 10th consecutive quarter of cash flow improvement and we achieved positive adjusted net income ahead of our prior target,” said Kevin Feeley, CFO of GeneDx. “With our industry-leading technology and a massive market opportunity ahead, GeneDx will continue to couple financial discipline with strategic investment to accelerate the business and provide answers for even more families in need.”

Third Quarter 2024 Financial Results (Unaudited)^1,2

Revenues

• Revenues from continuing operations grew to $76.6 million, an increase of 52% year-over-year and 11% sequentially.
  • Total company revenues were $76.9 million.
• Exome and genome test revenue grew to $60.0 million, an increase of 77% year-over-year and 18% sequentially.

Exome and genome volume

• Exome and genome test results volume grew to 19,262, an increase of 46% year-over-year and 7% sequentially.
• Exome and genome represented 33% of all test results, up from 23% in the third quarter of 2023 and up from 31% in the second quarter of 2024.

Gross margin

• Adjusted gross margin from continuing operations expanded to 64%, up from 48% in the third quarter of 2023 and up from 62% in the second quarter of 2024.
  • Total company gross margin was 62%.

Operating expenses

• Adjusted total operating expenses were $46.6 million, a decrease of 2% year-over-year and an increase of 4% sequentially.
  • Total GAAP operating expenses were $54.8 million.

Net Income (Loss)

• Adjusted net income improved to $1.2 million, an improvement of 106% year-over-year and 143% sequentially.
  • GAAP net loss was $8.3 million.

Cash burn and cash position

• Total net use of cash was $5.0 million in the third quarter of 2024, an improvement of 88% year-over-year and 17% sequentially.
• Cash, cash equivalents, marketable securities and restricted cash was $117.4 million as of September 30, 2024, inclusive of proceeds of $14.6 million, net of fees, from the issuance of 418,653 shares of Class A common stock in connection with sales pursuant to our “at-the-market” offering during the third quarter of 2024.

GeneDx Full Year 2024 Guidance

GeneDx has updated full year 2024 guidance. Management expects GeneDx to:

• Drive full year 2024 revenues² between $284 and $290 million (previous guidance was between $255 and $265 million);
• Expand full year 2024 adjusted gross margin² profile to at least 62% (previous guidance was at least 60%);
• Use between $60 to $65 million of net cash for full year 2024 (previous guidance was between $65 to $70 million)

1. Adjusted gross margin, adjusted total operating expenses and adjusted net income (loss) are non-GAAP financial measures. See appendix for a reconciliation of GAAP to Non-GAAP figures presented.
2. Revenue and gross margin results from continuing operations, which we believe are representative of our ongoing business strategy exclude any revenue and cost of goods sold of the exited Legacy Sema4 diagnostic testing business for the current and all comparative periods. Total company results are labeled accordingly and include GeneDx’s continuing operations and the financial impacts of exited Legacy Sema4 business activities for the current and all comparative periods.

Third Quarter 2024 Business Highlights

Driving sustainable growth and expanding access for more patient populations

• Achieved over 700,000 clinical exomes and genomes sequenced, with over 100,000 completed in the last six months alone
• Accelerated adoption of whole exome sequencing (WES) and whole genome sequencing (WGS) coverage by state Medicaid programs, bringing total states covering exome or genome sequencing in the pediatric outpatient setting to 30
  • Indiana - WES and WGS (July 2024)
  • Connecticut - WGS (July 2024)
  • Texas - WGS (September 2024)
  • Florida - WGS (October 2024)
• The Centers for Medicare & Medicaid Services issued “historic guidance” to state Medicaid agencies, underscoring their obligation to provide all medically necessary services under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit
  • Under EPSDT, every Medicaid-enrolled child under 21 is entitled to services that meet their unique medical needs. This includes diagnostics like exome and genome sequencing - some of the most powerful tools we have to unlock appropriate care, treatments, and crucial support systems for these children.
• Expanded the Epilepsy Partnership Program, a first-of-its-kind patient access program that is increasing access to exome and genome sequencing for pediatric epilepsy patients, by including an additional biopharma partner
• Collaborated with researchers from Wellcome Sanger Institute to release data from the largest and most diverse study to date, with data from more than 30,000 patients, on how recessive genetic changes contribute to developmental disorders in children
  • On September 23, 2024, findings from the study were published in Nature Genetics, showcasing that most new recessive developmental disorder diagnoses lie within known genes.
  • The publication is further evidence of our commitment to the important role of diversity in genomics and belief that serving a more diverse patient population drives more definitive diagnoses for patients of all backgrounds.

Demonstrating genome leadership in the neonatal inventive care unit (NICU)

• Launched improvements to our rapid whole genome sequencing product, including cheek swabs for more accessible sample collection, and shortened turnaround times to as soon as five days
• Progressed initiative to launch Epic Aura in the first half of 2025, which will seamlessly integrate GeneDx exome and genome testing into the ordering and resulting workflows of many of the largest health systems across the country

Leaders in genomic newborn screening (gNBS)

• Conducted more gNBS than any other lab in the United States and successfully executed multi-site implementation strategies across diverse patient populations, positioning GeneDx as the clear leader set to revolutionize the standard approach to NBS
  • On October 8, 2024, data was presented at the International Conference on Newborn Sequencing (ICoNS) showcasing that GeneDx has now provided genomic newborn screenings for more than 14,000 infants through its participation in the groundbreaking GUARDIAN and Early Check research studies. Today, that number exceeds 15,000.
• Revealed limitations of traditional newborn screening methods and showcased the promise of advanced genomic technology to deliver equitable health care for all children
  • On October 24, 2024, findings from the GUARDIAN study were published in JAMA (Journal of the American Medical Association), a leading peer-reviewed medical journal.
  • GUARDIAN goes beyond the typical newborn screening panel of about 60 conditions to now over 450-early onset genetic conditions with established effective interventions.
  • Over the initial 11-month period, 4,000 newborns were enrolled and 3.7% of newborns had positive screenings.
  • By referencing our internal database, one of the largest of its kind enriched for rare disease, we find that the average age of diagnosis for children with these same conditions ranges from 7-11 years.
  • Of the newborns with true positive findings, 92% had a confirmed diagnosis for a condition not included in traditional NBS.
  • The study highlights the wide acceptance of more advanced and modernized NBS, with 72% of families approached for the study consenting to participate.

Webcast and Conference Call Details

GeneDx will host a conference call today, October 29, 2024, at 8:30 a.m. Eastern Time. Investors interested in listening to the conference call are required to register online. A live and archived webcast of the event will be available on the “Events” section of the GeneDx investor relations website at https://ir.genedx.com/.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our future performance and our market opportunity, including our expected full year 2024 reported revenue guidance, our expectations regarding our adjusted gross margin profile in 2024, and our use of net cash in 2024. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) our ability to implement business plans, goals and forecasts, and identify and realize additional opportunities, (ii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, (iii) the size and growth of the market in which we operate, (iv) our ability to pursue our new strategic direction, and (v) our ability to enhance our artificial intelligence tools that we use in our clinical interpretation platform. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 23, 2024 and other documents filed by us from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.

About GeneDx

At GeneDx (Nasdaq: WGS), we believe that everyone deserves personalized, targeted medical care—and that it all begins with a genetic diagnosis. Fueled by one of the world’s largest rare disease data sets, our industry-leading exome and genome tests translate complex genomic data into clinical answers that unlock personalized health plans, accelerate drug discovery, and improve health system efficiencies. It all starts with a single test. For more information, please visit genedx.com and connect with us on LinkedIn, X, Facebook, and Instagram.

Volume and revenue in the table below include the combination of the Legacy GeneDx diagnostic business with the data and information business of Legacy Sema4.

Volume & Revenue

Unaudited Select Financial Information (in thousands)

Contacts

Investor Relations Contact:
Investors@GeneDx.com

Media Contact:
Press@GeneDx.com

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