Yahoo Finance NeoGenomics Inc (NEO) Q1 2024 Earnings Call Transcript Highlights: Strategic Growth and ...
Revenue: $156 million, a 14% increase over the previous year.
Clinical Services Revenue: $135 million, up 17% from the previous year.
Advanced Diagnostics Revenue: Decreased by 3% due to macroeconomic conditions and margin optimization initiatives.
Adjusted Gross Profit: Increased by 19% to $71 million.
Adjusted EBITDA: Improved by 149% to a positive $3 million.
Net Income: Specific figures not provided, but significant improvements noted in adjusted EBITDA and gross profit.
Gross Margin: Adjusted gross margin improved by 180 basis points to 45.3%.
Revenue Per Test: Increased by 11% to $447 per clinical test.
NGS Revenue: Now approaching 30% of total clinical revenue, with over 50% growth.
Cash and Marketable Securities: Ended the quarter with $385 million.
2024 Full Year Revenue Guidance: Reiterated at $650 million to $660 million.
2024 Adjusted EBITDA Guidance: Expected to be at the high end of the $21 million to $24 million range.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Congrats on a strong quarter in Q1. So I heard some interesting commentary about, I think, that you're starting to evaluate M&A opportunities. And then I heard that you're planning to participate in the MRD market one way or another, if those are my words, not yours. But can you just give us a sense for maybe your confidence about RaDaR litigation? And then can you speak to maybe the types of things you're looking at? Are you looking at partnerships or potential all-out acquisitions? And just give us a sense for what you're seeing in the marketplace. It appears to me that valuations are pretty depressed. So maybe an outright acquisition could make some sense. A: Yes, Mark. I'm going to hit a high level, and then I'll let Ali kind of take it, because she is our General Counsel but also leads BD. So she can hit it. But look, I think all along we talked about that the first 12 to 18 months, we're going to be very internally focused on getting the house back in order, and starting to put wins on the board. And that really to us, is really delivering double-digit growth and improving the operating earnings at a faster rate.
Q: So just one on the clinical beat that you had. It's really great to see AUP continues to work, so congrats there. But you came in $7 million ahead of us and the street number, I believe, as well. But you're not raising the full year guide. So just wondering, where's the moderation? Is it on the pharma business or on the clinical side? I know you talked about a weaker pharma environment. Obviously, we're seeing that on the pharma side. But just wondering what, are some things that we ought to consider? A: Yes, I'm going to let Jeff kind of hit it, getting into the detail. But look, at a high level, you did hear me talk about not only kind of the macro issues in pharma, but also kind of some operational challenges in that business. And look - I would say from a strategic perspective, bringing Warren over to lead that business, and I think some of the strategies that we've implemented in clinical around sales force optimization, and our go-to-market have worked significantly well.
Q: Can you speak a little bit just to the core clinical business? Just wondering, ex-NGS, kind of, what you guys saw in the quarter, looks like the results are okay there. And kind of how you're thinking about the progression of maybe volume, and price as we look out in the Q2 and beyond? A: Yes, look, I mean, I did mention in our prepared remarks that we did grow in all modalities, but Warren's here. So maybe I can let Warren kind of give you the high level piece of it. And then maybe Jeff kind of around more specifics in the detail. Do you want to?
Q: Maybe on Neo Comprehensive, I think it's been just over a year since you launched that product. Can you maybe just give us a sense of the scale for that business, and that product line? And I guess just related to that, any color you can provide on sort of success rate, with cross-selling initiatives, or sort of - what accounts you're really seeing a lot of uptake in? Thanks. A: Yes, Andrew, I'll take it high level, then I'm going to let Warren kind of get into detail to it. But remember, we've talked a lot about this, that from a team perspective, we're a market leader in NGS. But from a solid tumor, we would have very low double-digit share. So, we knew that when we launched kind of that product. But let me maybe have Warren give more.
Q: Hi, guys. Good morning. So maybe just to kick things off, Chris, you raised your long-term targets to north of 10% on the last earnings call. Three years out, where do you expect NGS test mix to be in terms of your clinical revenue? It's about 25% today. Just given the growth you're seeing here, is there a scenario in your mind where over the course of those long-term targets, NGS mix could essentially be approaching 50% on an ex MRD basis? A: Well look, I think when you think of it, Tejas, and you talk about it over the timeline that you mentioned, we will be launching other products along the way. So for example, we're really excited about this liquid product that we're going to be launching. So, there'll be new products that will come in. But without question, we believe we have a ton of runway on NGS.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
