Delivered record revenue and cash flow,
improved adjusted EBITDA, advanced pipeline
Third quarter highlights
- Total third quarter revenue of $709 million, an increase of 13%
on a reported and core revenue basis, including Screening revenue
of $545 million and Precision Oncology revenue of $164 million
- Net loss was $38 million, adjusted EBITDA was $99 million, and
adjusted EBITDA margin increased 500 basis points to 14%
- Operating cash flow was $139 million with free cash flow of
$113 million
- Received FDA approval for the Cologuard Plus™ test, the
Company's next-generation Cologuard® test
- Presented data showing potential of its blood-based colorectal
cancer screening test, with sensitivities of 88% for colorectal
cancer and 31% for advanced precancerous lesions at 90%
specificity
- Secured acceptance from a peer reviewed journal for the first
publication on the Oncodetect™ test, its molecular residual disease
and recurrence monitoring test
Exact Sciences Corp. (Nasdaq: EXAS), a leading provider of
cancer screening and diagnostic tests, today announced that the
Company generated revenue of $709 million for the third quarter
ended September 30, 2024, compared to $628 million for the same
period of 2023.
“The Exact Sciences’ team is helping eradicate cancer while
strengthening our platform and growing our business efficiently,”
said Kevin Conroy, chairman and CEO. “During the third quarter, we
delivered test results to more patients than ever before, improved
profitability, and achieved key milestones in our pipeline of
innovative cancer diagnostics. While we have made progress, our
execution during the third quarter and updated outlook for the full
year don’t reflect our full potential. We plan to accelerate growth
in 2025, and our long-term outlook remains strong.”
Third-quarter 2024 financial results
For the three-month period ended September 30, 2024, as compared
to the same period of 2023 (where applicable):
- Total revenue was $709 million, an increase of 13 percent on a
reported and core revenue basis
- Screening revenue was $545 million, an increase of 15
percent
- Precision Oncology revenue was $164 million, an increase of 5
percent on a reported and core revenue basis
- Gross margin including amortization of acquired intangible
assets was 69 percent, and non-GAAP gross margin excluding
amortization of acquired intangible assets was 72 percent
- Other operating income was $3 million compared to $72 million,
which included a gain related to the sale of the Oncotype DX
Genomic Prostate Score Test in third-quarter 2023
- Net loss was $38 million, or $0.21 per basic and diluted share,
a reduction of $39 million, or $0.21 per basic and diluted
share
- Adjusted EBITDA was $99 million an increase of $42 million, and
adjusted EBITDA margin was 14 percent, an increase of 500 basis
points
- Operating cash flow was $139 million and free cash flow was
$113 million, increases of $114 million and $113 million,
respectively
- Cash, cash equivalents, and marketable securities were $1.02
billion at the end of the quarter
Screening primarily includes laboratory service revenue from
Cologuard tests and PreventionGenetics. Precision Oncology includes
laboratory service revenue from global Oncotype DX and therapy
selection tests.
Platform and pipeline advancements
The Company's ExactNexus™ technology platform allows Exact
Sciences to connect electronically with patients, health systems,
healthcare professionals, and payers. The digital tools and data
embedded within the ExactNexus platform enable personalized
customer experiences, creating a streamlined process for accessing
information, enhancing patient engagement, and improving health
outcomes. This approach contributed to strong growth in Cologuard
test utilization among rescreen patients and within care gap
programs during the third quarter.
Exact Sciences received FDA approval for the Cologuard Plus
test, its next-generation Cologuard test. The Cologuard Plus test
detects cancers and precancerous polyps with even greater
sensitivity than the Cologuard test while reducing false positives
by more than 30 percent. This advancement enhances the Company’s
screening capabilities and reinforces its commitment to delivering
high-quality, non-invasive options for patients. With the Cologuard
Plus test, the Company expects to secure a higher price through an
established Medicare pathway.
In the third quarter, the Company also presented data for its
blood-based colorectal cancer screening test, showcasing a
sensitivity of 88% for colorectal cancer and 31% for advanced
precancerous lesions at 90% specificity. These results show the
potential of the Company's novel marker panel to detect advanced
precancerous lesions and cancers at an attractive cost profile.
This innovation is expected to provide average-risk patients with
another screening option, reinforcing the power of the Company’s
unique scientific approach.
Exact Sciences secured acceptance from a peer-reviewed journal
for its first publication on the Oncodetect test, its molecular
residual disease and recurrence monitoring test. These data are
currently under embargo and are expected to be shared in January
2025. With nearly 6 million cancer survivors in the U.S. who could
benefit from residual and recurrent disease testing, the need is
urgent - yet less than 5% are currently receiving the vital testing
today. This recognition highlights the scientific rigor behind the
product and positions the Oncodetect test as a leading solution for
monitoring residual disease and cancer recurrence.
The Company also shared evidence supporting its blood-based
multi-cancer screening test, assessing organ-specific performance
of methylation and protein biomarkers in a prospectively collected
cohort of samples from its ASCEND 2 study. The analysis indicated
an overall sensitivity of 55% in cancers without standard-of-care
screening options (excluding lung), and 64% in the six most
aggressive cancers with the shortest survival rates, with a
specificity of 98.5%. These findings highlight the potential
clinical value of using multiple biomarkers to detect various
cancer types, including the most aggressive and those without
recommended screening options.
2024 outlook
The Company has updated its full-year 2024 revenue and adjusted
EBITDA guidance:
Prior guidance
November 5 update
Total revenue
$2.810 - $2.850 billion
$2.730 - $2.750 billion
Screening
$2.155 - $2.175 billion
$2.080 - $2.095 billion
Precision Oncology
$655 - $675 million
$650 - $655 million
Adjusted EBITDA
$335 - $355 million
$310 - $320 million
Third-quarter 2024 conference call & webcast
Company management will host a conference call and webcast on
Tuesday, November 5, 2024, at 5 p.m. ET to discuss third-quarter
2024 results. The webcast will be available at exactsciences.com.
Domestic callers should dial 888-330-2384 and international callers
should dial +1-240-789-2701. The access code for both domestic and
international callers is 4437608. A replay of the webcast will be
available at exactsciences.com. The webcast, conference call, and
replay are open to all interested parties.
Non-GAAP disclosure
In addition to the Company’s financial results determined in
accordance with U.S. GAAP, the Company provides non-GAAP measures
that it determines to be useful in evaluating its operating
performance and liquidity. The Company presents core revenue,
non-GAAP gross margin, non-GAAP gross profit, adjusted EBITDA,
adjusted EBITDA margin, adjusted cost of sales (exclusive of
amortization of acquired intangible assets), adjusted research and
development expenses, adjusted sales and marketing expenses,
adjusted general and administrative expenses, adjusted amortization
of acquired intangible assets, adjusted impairment of long-lived
assets, adjusted other operating income (loss), adjusted operating
income (loss), and free cash flow. Core revenue is calculated to
adjust for recent acquisitions and divestitures, COVID-19 testing
revenue and foreign currency exchange rate fluctuations. To exclude
the impact of change in foreign currency exchange rates from the
prior period under comparison, the Company converts the current
period non-U.S. dollar denominated revenue using the prior year
comparative period exchange rates. The Company defines non-GAAP
gross profit and non-GAAP gross margin as GAAP gross profit and
GAAP gross margin, respectively, excluding amortization of acquired
intangible assets. The amortization of acquisition-related
intangible assets used in the calculation of non-GAAP gross profit
and non-GAAP gross margin pertain only to the amortization
associated with developed technology acquired and recorded through
purchase accounting transactions. The amortization of these
intangible assets will recur in future periods until such
intangible assets have been fully amortized. Adjusted EBITDA,
adjusted cost of sales (exclusive of amortization of acquired
intangible assets), adjusted research and development expenses,
adjusted sales and marketing expenses, adjusted general and
administrative expenses, adjusted amortization of acquired
intangible assets, adjusted impairment of long-lived assets,
adjusted other operating income (loss), and adjusted operating
income (loss) consist of the applicable GAAP measure after
adjustment for those items shown in the reconciliations below.
Adjusted EBITDA margin is calculated as adjusted EBITDA divided by
total revenue. The Company considers free cash flow to be a
liquidity measure and is calculated as net cash used in or provided
by operating activities, reduced by purchases of property, plant
and equipment. Management believes that presentation of non-GAAP
financial measures provides useful supplemental information to
investors and facilitates the analysis of the Company’s core
operating results and comparison of operating results across
reporting periods. The Company uses this non-GAAP financial
information to establish budgets, manage the Company’s business,
and set incentive and compensation arrangements. The Company
believes free cash flow provides useful information to management
and investors since it measures our ability to generate cash from
business operations. Non-GAAP financial information, when taken
collectively, may be helpful to investors because it provides
consistency and comparability with past financial performance.
However, non-GAAP financial information is presented for
supplemental information purposes only, has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for financial information presented in accordance with
U.S. GAAP. For example, non-GAAP gross margin and non-GAAP gross
profit exclude the amortization of acquired intangible assets
although such measures include the revenue associated with the
acquisitions. Additionally, adjusted EBITDA and other adjusted
operating result metrics exclude a number of expense items that are
included in net loss. As a result, positive adjusted EBITDA or
adjusted operating income may be achieved while a significant net
loss persists. For a reconciliation of these non-GAAP measures to
GAAP, see below “Reconciliation of Core Revenue”, “Non-GAAP Gross
Profit and Non-GAAP Gross Margin Reconciliations”, “Adjusted EBITDA
Reconciliations”, “Reconciliation of U.S. GAAP to Non-GAAP
Measures”, and “Condensed Consolidated Statements of Cash Flows and
Reconciliation of Free Cash Flow”. The Company presents certain
forward-looking statements about the Company’s future financial
performance that include non-GAAP measures. These non-GAAP measures
include adjustments like stock-based compensation, acquisition and
integration costs including gains and losses on contingent
consideration, and other significant charges or gains that are
difficult to predict for future periods because the nature of the
adjustments pertain to events that have not yet occurred.
Additionally management does not forecast many of the excluded
items for internal use. Information reconciling forward-looking
non-GAAP measures to U.S. GAAP measures is therefore not available
without unreasonable effort, and is not provided. The occurrence,
timing, and amount of any of the items excluded from GAAP to
calculate non-GAAP could significantly impact the Company’s GAAP
results.
About the Cologuard® and Cologuard Plus™ tests:
Developed in collaboration with Mayo Clinic, the Cologuard and
Cologuard Plus tests are non-invasive colorectal cancer (CRC)
screening options for the 110 million U.S. adults ages 45 or older
who are at average risk for the disease.
The Cologuard test revolutionized CRC screening by detecting
specific DNA markers and blood associated with cancer and precancer
in stool, allowing patients to use the test at home without special
preparation or time off. It is covered by Medicare and included in
national screening guidelines from both the American Cancer Society
(2018) and the U.S. Preventive Services Task Force (2021). Since
its launch in 2014, the Cologuard test has been used to screen for
CRC 17 million times.
Building on this success, the FDA-approved Cologuard Plus test
raises the performance bar even further and features novel
biomarkers, improved laboratory processes, and enhanced sample
stability. The Cologuard Plus test is expected to reduce false
positives by more than 30%, to help minimize unnecessary follow-up
colonoscopies. Both tests demonstrate Exact Sciences’ commitment to
improving CRC screening access and outcomes. Exact Sciences expects
to launch the Cologuard Plus test with Medicare coverage and
guideline inclusion in 2025.
About Exact Sciences’ Precision Oncology portfolio
Exact Sciences’ Precision Oncology portfolio delivers actionable
genomic insights to inform prognosis and cancer treatment after a
diagnosis. In breast cancer, the Oncotype DX Breast Recurrence
Score® test is the only test shown to predict the likelihood of
chemotherapy benefit as well as recurrence in invasive breast
cancer. The Oncotype DX test is recognized as the standard of care
and is included in all major breast cancer treatment guidelines.
The OncoExTra® test applies comprehensive tumor profiling,
utilizing whole exome and whole transcriptome sequencing, to aid in
therapy selection for patients with advanced, metastatic,
refractory, relapsed, or recurrent cancer. With an extensive panel
of approximately 20,000 genes and 169 introns, the OncoExTra test
is one of the most comprehensive genomic (DNA) and transcriptomic
(RNA) panels available today. Exact Sciences enables patients to
take a more active role in their cancer care and makes it easy for
providers to order tests, interpret results, and personalize
medicine. To learn more, visit
precisiononcology.exactsciences.com.
About PreventionGenetics
Founded in 2004 and located in Marshfield, Wisconsin,
PreventionGenetics is a CLIA and ISO 15189:2012 accredited
laboratory. PreventionGenetics delivers clinical genetic testing of
the highest quality at fair prices with exemplary service to people
around the world. PreventionGenetics has 25 PhD geneticists on
staff and provides tests for nearly all clinically relevant genes
including the powerful and comprehensive germline whole genome
sequencing test, PGnome® and whole exome sequencing test, PGxome®.
PreventionGenetics was acquired by Exact Sciences in December
2021.
About Exact Sciences Corp.
A leading provider of cancer screening and diagnostic tests,
Exact Sciences gives patients and health care professionals the
clarity needed to take life-changing action earlier. Building on
the success of the Cologuard and Oncotype DX tests, Exact Sciences
is investing in its pipeline to develop innovative solutions for
use before, during, and after a cancer diagnosis. For more
information, visit ExactSciences.com, follow Exact Sciences on X
@ExactSciences, or find Exact Sciences on LinkedIn and
Facebook.
Forward-Looking Statements
This news release contains forward-looking statements concerning
our expectations, anticipations, intentions, beliefs or strategies
regarding the future. These forward-looking statements are based on
assumptions that we have made as of the date hereof and are subject
to known and unknown risks and uncertainties that could cause
actual results, conditions and events to differ materially from
those anticipated. Therefore, you should not place undue reliance
on forward-looking statements. Examples of forward-looking
statements include, among others, statements we make regarding
expected future operating results; expectations for development of
new or improved products and services and their impacts on
patients; our strategies, positioning, resources, capabilities and
expectations for future events or performance; and the anticipated
benefits of our acquisitions, including estimated synergies and
other financial impacts.
Important factors that could cause actual results, conditions
and events to differ materially from those indicated in the
forward-looking statements include, among others, the following:
our ability to successfully and profitably market our products and
services; the acceptance of our products and services by patients
and healthcare providers; our ability to meet demand for our
products and services; our reliance upon certain suppliers,
including suppliers that are the sole source of certain supplies
and products used in our tests and operations; approval and
maintenance of adequate reimbursement rates for our products and
services within and outside of the U.S.; the amount and nature of
competition for our products and services; the effects of any
judicial, executive or legislative action affecting us or the
healthcare system; recommendations, guidelines and quality metrics
issued by various organizations regarding cancer screening or our
products and services; our ability to successfully develop and
commercialize new products and services and assess potential market
opportunities; our ability to effectively enter into and utilize
strategic partnerships and acquisitions; our success establishing
and maintaining collaborative, licensing and supplier arrangements;
our ability to obtain and maintain regulatory approvals and comply
with applicable regulations; our ability to protect and enforce our
intellectual property; the results of our validation studies and
clinical trials, including the risks that the results of future
studies and trials may differ materially from the results of
previously completed studies and trials; our ability to manage an
international business and our expectations regarding our
international expansion and opportunities; our ability to raise the
capital necessary to support our operations or meet our payment
obligations under our indebtedness; the potential effects of
changing macroeconomic conditions, including the effects of
inflation, interest rate and foreign currency exchange rate
fluctuations, and geopolitical conflict; the possibility that the
anticipated benefits from our business acquisitions will not be
realized in full or at all or may take longer to realize than
expected; the possibility that costs or difficulties related to the
integration of acquired businesses’ operations or the divestiture
of business operations will be greater than expected and the
possibility that integration or divestiture efforts will disrupt
our business and strain management time and resources; the outcome
of any litigation, government investigations, enforcement actions
or other legal proceedings; and our ability to retain and hire key
personnel. The risks included above are not exhaustive. Other
important risks and uncertainties are described in the Risk Factors
sections of our most recent Annual Report on Form 10-K and any
subsequent Quarterly Reports on Form 10-Q, and in our other reports
filed with the Securities and Exchange Commission. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Condensed Consolidated
Statements of Operations
(Amounts in thousands, except
per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenue
$
708,655
$
628,338
$
2,045,443
$
1,852,881
Operating expenses
Cost of sales (exclusive of amortization
of acquired intangible assets)
196,070
168,526
556,019
482,383
Research and development
100,101
111,446
331,593
310,960
Sales and marketing
194,653
173,159
572,288
536,613
General and administrative
217,201
217,393
662,174
672,653
Amortization of acquired intangible
assets
24,435
22,992
71,057
68,849
Impairment of long-lived assets
18,698
—
31,296
621
Total operating expenses
751,158
693,516
2,224,427
2,072,079
Other operating income
3,100
72,027
6,632
72,027
Income (loss) from operations
(39,403
)
6,849
(172,352
)
(147,171
)
Other income (expense)
Investment income, net
11,582
2,065
29,596
7,383
Interest expense
(9,607
)
(7,871
)
(17,439
)
(11,582
)
Total other income (expense)
1,975
(5,806
)
12,157
(4,199
)
Net income (loss) before tax
(37,428
)
1,043
(160,195
)
(151,370
)
Income tax expense
(808
)
(249
)
(4,077
)
(3,013
)
Net income (loss)
$
(38,236
)
$
794
$
(164,272
)
$
(154,383
)
Net income (loss) per share—basic
$
(0.21
)
$
0.00
$
(0.89
)
$
(0.86
)
Net income (loss) per share—diluted
$
(0.21
)
$
0.00
$
(0.89
)
$
(0.86
)
Weighted average common shares
outstanding—basic
184,795
180,649
183,823
179,817
Weighted average common shares
outstanding—diluted
184,795
184,075
183,823
179,817
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Condensed Consolidated Balance
Sheets
(Amounts in thousands)
September 30, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
588,830
$
605,378
Marketable securities
432,301
172,266
Accounts receivable, net
264,819
203,623
Inventory
136,987
127,475
Prepaid expenses and other current
assets
110,180
85,627
Property, plant and equipment, net
690,332
698,354
Operating lease right-of-use assets
122,452
143,708
Goodwill
2,367,450
2,367,120
Intangible assets, net
1,864,399
1,890,396
Other long-term assets, net
170,821
177,387
Total assets
$
6,748,571
$
6,471,334
Liabilities and stockholders’
equity
Convertible notes, net, current
portion
$
249,038
$
—
Current liabilities
474,624
514,701
Convertible notes, net, less current
portion
2,319,490
2,314,276
Other long-term liabilities
332,213
335,982
Operating lease liabilities, less current
portion
162,695
161,070
Total stockholders’ equity
3,210,511
3,145,305
Total liabilities and stockholders’
equity
$
6,748,571
$
6,471,334
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Reconciliation of Core
Revenue
(Amounts in thousands)
GAAP
Three Months Ended September
30,
2024
2023
% Change
Screening
$
544,901
$
472,013
15
%
Precision Oncology
163,754
156,325
5
%
Total
$
708,655
$
628,338
13
%
Non-GAAP
Three Months Ended September
30,
2024 (1)
2023 (1)
% Change
Foreign Currency Impact
(2)
Core Revenue (3)
% Change (3)
Screening
$
544,901
$
472,013
15
%
$
—
$
544,901
15
%
Precision Oncology
162,819
154,451
5
%
(810
)
162,009
5
%
Total
$
707,720
$
626,464
13
%
$
(810
)
$
706,910
13
%
GAAP
Nine Months Ended September
30,
2024
2023
% Change
Screening
$
1,551,305
$
1,377,995
13
%
Precision Oncology
494,138
468,931
5
%
COVID-19 Testing
—
5,955
(100
)%
Total
$
2,045,443
$
1,852,881
10
%
Non-GAAP
Nine Months Ended September
30,
2024 (1)
2023 (1)
% Change
Foreign Currency Impact
(2)
Core Revenue (3)
% Change (3)
Screening
$
1,551,305
$
1,377,995
13
%
$
—
$
1,551,305
13
%
Precision Oncology
486,518
462,725
5
%
(672
)
485,846
5
%
Total
$
2,037,823
$
1,840,720
11
%
$
(672
)
$
2,037,151
11
%
(1) Excludes revenue from COVID-19 testing, the divested
Oncotype DX Genomic Prostate Score test, and the Resolution
Bioscience acquisition.
(2) Foreign currency impact is calculating the change in current
period non-U.S. dollar denominated revenue using the prior year
comparative period exchange rates.
(3) Excludes revenue from COVID-19 testing, the divested
Oncotype DX Genomic Prostate Score test, the impact of foreign
currency exchange rate fluctuations, and the Resolution Bioscience
acquisition.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Non-GAAP Gross Profit and
Non-GAAP Gross Margin Reconciliations
(Amounts in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenue
$
708,655
$
628,338
$
2,045,443
$
1,852,881
Cost of sales (exclusive of amortization
of acquired intangible assets)
196,070
168,526
556,019
482,383
Amortization of acquired intangible assets
(1)
21,100
20,781
63,300
62,216
Gross profit
$
491,485
$
439,031
$
1,426,124
$
1,308,282
Gross margin
69
%
70
%
70
%
71
%
Amortization of acquired intangible assets
(1)
21,100
20,781
63,300
62,216
Non-GAAP gross profit
$
512,585
$
459,812
$
1,489,424
$
1,370,498
Non-GAAP gross margin
72
%
73
%
73
%
74
%
(1) Includes only amortization of intangible assets identified
as developed technology assets through purchase accounting
transactions, which otherwise would have been allocated to cost of
sales.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Adjusted EBITDA
Reconciliations
(Amounts in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net income (loss)
$
(38,236
)
$
794
$
(164,272
)
$
(154,383
)
Interest expense (1)
9,607
7,871
17,439
11,582
Income tax expense
808
249
4,077
3,013
Investment income
(11,582
)
(2,065
)
(29,596
)
(7,383
)
Depreciation and amortization
54,771
52,254
161,712
152,436
Stock-based compensation (2)
57,219
72,089
197,143
204,752
Acquisition and integration costs (3)
5,310
(4,395
)
2,836
(8,146
)
Impairment of long-lived assets (4)
18,698
—
31,296
621
Gain on sale of asset and divestiture
related costs (5)
(3,100
)
(70,522
)
(6,632
)
(70,522
)
Restructuring and business transformation
(6)
8,736
—
11,671
907
License agreement termination (7)
—
—
25,843
—
Legal settlement (8)
(3,500
)
—
(3,500
)
36,186
Adjusted EBITDA
$
98,731
$
56,275
$
248,017
$
169,063
Adjusted EBITDA margin
14
%
9
%
12
%
9
%
Refer below the Reconciliations of U.S. GAAP to Non-GAAP
Measures section for endnote descriptions.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Reconciliation of U.S. GAAP to
Non-GAAP Measures
(Amounts in thousands)
Three Months Ended September
30, 2024
Cost of Sales (9)
Research & Development
Expenses
Sales & Marketing
Expenses
General & Administrative
Expenses
Amortization of acquired
intangible assets
Impairment of Long- Lived
Assets
Other Operating Income
Income (Loss) from
Operations
Reported
$
196,070
$
100,101
$
194,653
$
217,201
$
24,435
$
18,698
$
3,100
$
(39,403
)
Amortization of acquired intangible
assets
—
—
—
—
(24,435
)
—
—
24,435
Acquisition and integration costs (3)
—
—
—
(5,310
)
—
—
—
5,310
Impairment of long-lived assets (4)
—
—
—
—
—
(18,698
)
—
18,698
Gain on sale of asset and divestiture
related costs (5)
—
—
—
—
—
—
(3,100
)
(3,100
)
Restructuring and business transformation
(6)
—
(4,181
)
—
(4,555
)
—
—
—
8,736
Legal settlement (8)
—
—
—
3,500
—
—
—
(3,500
)
Adjusted
$
196,070
$
95,920
$
194,653
$
210,836
$
—
$
—
$
—
$
11,176
Nine Months Ended September
30, 2024
Cost of Sales (9)
Research & Development
Expenses
Sales & Marketing
Expenses
General & Administrative
Expenses
Amortization of acquired
intangible assets
Impairment of Long- Lived
Assets
Other Operating Income
Income (Loss) from
Operations
Reported
$
556,019
$
331,593
$
572,288
$
662,174
$
71,057
$
31,296
$
6,632
$
(172,352
)
Amortization of acquired intangible
assets
—
—
—
—
(71,057
)
—
—
71,057
Acquisition and integration costs (3)
—
—
—
(2,836
)
—
—
—
2,836
Impairment of long-lived assets (4)
—
—
—
—
—
(31,296
)
—
31,296
Gain on sale of asset and divestiture
related costs (5)
—
—
—
—
—
—
(6,632
)
(6,632
)
Restructuring and business transformation
(6)
(200
)
(6,574
)
(222
)
(4,675
)
—
—
—
11,671
License agreement termination (7)
—
(25,843
)
—
—
—
—
—
25,843
Legal settlement (8)
—
—
—
3,500
—
—
—
(3,500
)
Adjusted
$
555,819
$
299,176
$
572,066
$
658,163
$
—
$
—
$
—
$
(39,781
)
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Reconciliation of U.S. GAAP to
Non-GAAP Measures
(Amounts in thousands)
Three Months Ended September
30, 2023
Cost of Sales (9)
Research & Development
Expenses
Sales & Marketing
Expenses
General & Administrative
Expenses
Amortization of acquired
intangible assets
Impairment of Long- Lived
Assets
Other Operating Income
Income (Loss) from
Operations
Reported
$
168,526
$
111,446
$
173,159
$
217,393
$
22,992
$
—
$
72,027
$
6,849
Amortization of acquired intangible
assets
—
—
—
—
(22,992
)
—
—
22,992
Acquisition and integration costs (3)
—
(492
)
—
4,887
—
—
—
(4,395
)
Gain on sale of asset and divestiture
related costs (5)
—
—
—
(1,505
)
—
—
(72,027
)
(70,522
)
Adjusted
$
168,526
$
110,954
$
173,159
$
220,775
$
—
$
—
$
—
$
(45,076
)
Nine Months Ended September
30, 2023
Cost of Sales (9)
Research & Development
Expenses
Sales & Marketing
Expenses
General & Administrative
Expenses
Amortization of acquired
intangible assets
Impairment of Long- Lived
Assets
Other Operating Income
Income (Loss) from
Operations
Reported
$
482,383
$
310,960
$
536,613
$
672,653
$
68,849
$
621
$
72,027
$
(147,171
)
Amortization of acquired intangible
assets
—
—
—
—
(68,849
)
—
—
68,849
Acquisition and integration costs (3)
—
(492
)
—
8,638
—
—
—
(8,146
)
Impairment of long-lived assets (4)
—
—
—
—
—
(621
)
—
621
Gain on sale of asset and divestiture
related costs (5)
—
—
—
(1,505
)
—
—
(72,027
)
(70,522
)
Restructuring and business transformation
(6)
—
(723
)
—
(184
)
—
—
—
907
Legal settlement (8)
—
—
—
(36,186
)
—
—
—
36,186
Adjusted
$
482,383
$
309,745
$
536,613
$
643,416
$
—
$
—
$
—
$
(119,276
)
(1) Interest expense includes net gains recorded of $10.3
million and $10.3 million for the nine months ended September 30,
2024 and September 30, 2023, respectively, from the settlement of
convertible notes. The gains represent the difference between (i)
the fair value of the consideration transferred and (ii) the sum of
the carrying value of the debt at the time of the exchange.
(2) Represents stock-based compensation expense and 401(k) match
expense. The Company matches a portion of Exact Sciences employees’
contributions annually in the form of the Company’s common
stock.
(3) Represents acquisition and related integration costs
incurred as a result of the Company’s business combinations.
Acquisition costs represent legal and professional fees incurred to
execute the transaction. There were no acquisition costs incurred
for the three and nine months ended September 30, 2024 and there
was an insignificant amount incurred for the three and nine months
ended September 30, 2023 related to the acquisition of Resolution
Bioscience, Inc. Integration related costs represent expenses
incurred outside regular business operations, specifically relating
to the integration of businesses acquired through a business
combination. This includes any gain or loss on contingent
consideration liabilities, severance and accelerated vesting of
stock awards, and professional services. The remeasurement of the
contingent consideration liabilities resulted in an expense of $5.3
million and a gain of $2.3 million for the three and nine months
ended September 30, 2024, respectively. The remeasurement of the
contingent consideration liabilities resulted in a gain of $8.4
million and $13.1 million for the three and nine months ended
September 30, 2023, respectively. The Company also incurred
severance costs and professional service fees which were not
significant for the three and nine months ended September 30, 2024
and 2023. The majority of the professional service fees relate to
the integration of information technology systems.
(4) Represents impairment charges on the Company’s long-lived
assets. For the three and nine months ended September 30, 2024, the
Company recorded impairment charges related to certain of our
domestic facilities. For the nine months ended September 30, 2023,
the Company recorded an insignificant impairment to building leases
that were vacated during the year.
(5) Relates to the sale of the intellectual property and
know-how related to the Company’s Oncotype DX Genomic Prostate
Score® (“GPS”) test to MDxHealth SA (“MDxHealth”) in August 2022
and the subsequent Second Amendment to the Asset Purchase Agreement
related to the sale in August 2023. For the three and nine months
ended September 30, 2024, this represents the remeasurement of the
associated contingent consideration. For the three and nine months
ended September 30, 2023, this represents a gain of $3.1 million
from additional cash and equity consideration received, a $68.9
million contingent consideration gain, and $1.5 million in legal
and professional service fees.
(6) Includes costs associated with the Company's business
transformation program intended to consolidate operations, achieve
targeted cost reductions, and focus resources on its key strategic
priorities. For the three and nine months ended September 30, 2024,
this primarily includes severance costs and accelerated stock-based
compensation expense related to the closure of domestic facilities
and related consulting services. For the nine months ended
September 30, 2023, this primarily includes accelerated stock-based
compensation expense and severance costs related to the Company's
international workforce.
(7) The Company terminated its license and sponsored research
agreements with The Translational Genomics Research Institute
related to its Targeted Digital Sequencing technology, which
resulted in the recognition of termination related charges in the
second quarter of 2024.
(8) The Company reached settlements with counterparties related
to the Medicare Date of Service Rule Investigation and the Federal
Anti-Kickback Statute and False Claims Act qui tam lawsuit.
(9) Represents Cost of sales (exclusive of amortization of
acquired intangible assets) from the Company's condensed
consolidated statement of operations.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Condensed Consolidated
Statements of Cash Flows and Reconciliation of Free Cash
Flow
(Amounts in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
138,719
$
24,361
$
163,473
$
86,570
Net cash provided by (used in) investing
activities
(81,716
)
(32,969
)
(400,283
)
116,446
Net cash provided by (used in) financing
activities
(226
)
92
221,375
149,729
Effects of exchange rate changes on cash
and cash equivalents
1,873
(1,235
)
427
(626
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
58,650
(9,751
)
(15,008
)
352,119
Cash, cash equivalents and restricted
cash, beginning of period
536,017
604,660
609,675
242,790
Cash, cash equivalents and restricted
cash, end of period
$
594,667
$
594,909
$
594,667
$
594,909
Reconciliation of free cash flow:
Net cash provided by operating
activities
$
138,719
$
24,361
$
163,473
$
86,570
Purchases of property, plant and
equipment
(26,158
)
(25,187
)
(99,673
)
(89,268
)
Free cash flow
$
112,561
$
(826
)
$
63,800
$
(2,698
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241105076239/en/
Investor Contact: Erik Holznecht Exact Sciences Corp.
investorrelations@exactsciences.com 608-535-8659
Media Contact: Steph Spanos Exact Sciences Corp.
sspanos@exactsciences.com 608-556-4380
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