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— Continued to execute against realignment plan and portfolio optimization initiatives —
— Reported revenue of $133.5 million, a 16.7% YoY increase —
— Cash, cash equivalents, restricted cash and marketable securities of $596 million as of 9/30 —
— On track to achieve planned cash burn reduction of approximately $326 million, to be fully realized by 2023 —
— 2022 cash burn guidance lowered; maintained other financial targets —
— Conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time —
SAN FRANCISCO, Nov. 8, 2022 /PRNewswire/ -- Invitae (NYSE: NVTA), a leading medical genetics company, today announced financial and operating results for the third quarter ended September 30, 2022.
"In the third quarter, we continued to deliver positive results as the organizational realignment and expense controls we put in place resulted in another quarter of improvements in our non-GAAP gross margin and operating expense, as well as our cash burn. There are also early signs demonstrating that the steps we've taken to drive higher-quality revenue are taking hold, driven by our portfolio optimization efforts and a focus on operational excellence," said Ken Knight, president and chief executive officer of Invitae. "We continue to be optimistic about the vitality of Invitae's many strengths, including our great assets, capabilities, and a comprehensive, synergistic set of solutions serving the current and future needs of our patients and partners. I am pleased with the momentum, and our energy is targeting significant market opportunities."
Third Quarter 2022 Highlights
Total operating expense, which excludes cost of revenue, for the third quarter of 2022 was $306.5 million, which includes items related to the strategic realignment. As a result, GAAP operating expense as a percentage of revenue was 230%. Non-GAAP operating expense was $150.0 million for the third quarter of 2022. Non-GAAP operating expense as a percentage of revenue was 112%, which consistently improved as compared with 146% in the second quarter of 2022 and 176% in the third quarter of 2021.
Net loss for this year's third quarter was $301.2 million, or a $1.27 net loss per share, compared to net loss of $198.2 million, or net loss per share of $0.91, for the third quarter of 2021. Non-GAAP net loss for the third quarter of 2022 was $100.8 million, or a $0.42 non-GAAP net loss per share, compared to a net loss of $175.9 million, or an $0.81 non-GAAP net loss per share, for the third quarter of 2021.
Financial Guidance
Invitae is reiterating its revenue and non-GAAP gross margin financial guidance. The company expects a low double-digit growth rate for its full year 2022 revenue over 2021. Non-GAAP gross margins are expected to be in the range of 42-43% for full year 2022.
Invitae is reducing its full year 2022 cash burn guidance to $585-625 million, an improvement from its previous guidance of $600-650 million. This guidance includes cash to be used for realignment activities and severance of up to $75 million in 2022, which remained unchanged from the previous estimate.
Webcast and Conference Call Details
Management will host a conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss financial results and recent developments. To access the conference call, please register at the link below:
Upon registering, each participant will be provided with call details and a conference ID.
The live webcast of the call and slide deck may be accessed here or by visiting the investors section of the company's website at ir.invitae.com. A replay of the webcast will be available shortly after the conclusion of the call and will be archived on the company's website.
About Invitae
Invitae Corporation (NYSE: NVTA) is a leading medical genetics company whose mission is to bring comprehensive genetic information into mainstream medicine to improve healthcare for billions of people. Invitae's goal is to aggregate the world's genetic tests into a single service with higher quality, faster turnaround time, and lower prices. For more information, visit the company's website at invitae.com.
Safe Harbor Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the expected impact, benefits, parameters, details and timing of the company's strategic business realignment or various aspects thereof; the company's beliefs regarding the potential of its business, and its business priorities; the company's future financial and operating results, including estimated annual cost savings, cash runway, guidance for 2022 and beyond, and the drivers of future financial results; the company's beliefs regarding its roadmap and business going forward; and the company's focus for the remainder of 2022. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: the ability of the company to successfully execute its strategic business realignment and achieve the intended benefits thereof on the expected timeframe or at all; unforeseen or greater than expected costs associated with the strategic business realignment; the risk that the disruption that may result from the realignment may harm the company's business, market share or its relationship with customers or potential customers; the impact of COVID-19 on the company, and the effectiveness of the efforts it has taken or may take in the future in response thereto; the impact of inflation and the economic environment on the company's business; the company's ability to grow its business in a cost-effective manner; the company's history of losses; the company's ability to compete; the company's failure to manage growth effectively; the company's need to scale its infrastructure in advance of demand for its tests and to increase demand for its tests; the risk that the company may not obtain or maintain sufficient levels of reimbursement for its tests; the ability of the company to obtain regulatory approval for its tests; the applicability of clinical results to actual outcomes; the company's failure to successfully integrate or fully realize the anticipated benefits of acquired businesses; risks associated with litigation; the company's ability to use rapidly changing genetic data to interpret test results accurately and consistently; laws and regulations applicable to the company's business; and the other risks set forth in the company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. These forward-looking statements speak only as of the date hereof, and Invitae Corporation disclaims any obligation to update these forward-looking statements.
Non-GAAP financial measures
To supplement Invitae's consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP), the company is providing several non-GAAP measures. These non-GAAP financial measures exclude certain items that are required by GAAP. In addition, these non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-GAAP financial measures are useful to investors in evaluating the company's ongoing operating results and trends. Management uses such non-GAAP information to manage the company's business and monitor its performance.
Other companies, including companies in the same industry, may not use the same non-GAAP measures or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-GAAP measures as comparative measures. Because of these limitations, the company's non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the non-GAAP reconciliations provided in the tables below and on the company's website.
INVITAE CORPORATION
Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$ 217,029
$ 923,250
Marketable securities
368,936
122,121
Accounts receivable
89,130
66,227
Inventory
29,902
33,516
Prepaid expenses and other current assets
24,679
33,691
Total current assets
729,676
1,178,805
Property and equipment, net
113,878
114,714
Operating lease assets
109,971
121,169
Restricted cash
10,027
10,275
Intangible assets, net
1,041,185
1,187,994
Goodwill
—
2,283,059
Other assets
21,518
23,551
Total assets
$ 2,026,255
$ 4,919,567
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$ 10,727
$ 21,127
Accrued liabilities
83,116
106,453
Operating lease obligations
14,199
12,359
Finance lease obligations
5,279
4,156
Total current liabilities
113,321
144,095
Operating lease obligations, net of current portion
138,167
124,369
Finance lease obligations, net of current portion
4,848
5,683
Debt
120,097
113,391
Convertible senior notes, net
1,469,108
1,464,138
Deferred tax liability
9,181
51,696
Other long-term liabilities
12,667
37,797
Total liabilities
1,867,389
1,941,169
Stockholders' equity:
Common stock
24
23
Accumulated other comprehensive loss
(898)
(7)
Additional paid-in capital
4,889,064
4,701,230
Accumulated deficit
(4,729,324)
(1,722,848)
Total stockholders' equity
158,866
2,978,398
Total liabilities and stockholders' equity
$ 2,026,255
$ 4,919,567
INVITAE CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Revenue:
Test revenue
$ 128,839
$ 111,676
$ 381,518
$ 322,448
Other revenue
4,697
2,719
12,331
11,880
Total revenue
133,536
114,395
393,849
334,328
Cost of revenue
116,956
87,741
324,412
252,563
Research and development
87,177
97,511
330,559
284,323
Selling and marketing
49,193
55,501
172,086
163,705
General and administrative
44,939
86,820
149,071
197,640
Asset impairments
6,708
—
2,324,572
—
Change in fair value of contingent consideration
—
(19,866)
(1,850)
(386,836)
Restructuring
118,514
—
118,514
—
Total cost and operating expenses
423,487
307,707
3,417,364
511,395
Loss from operations
(289,951)
(193,312)
(3,023,515)
(177,067)
Other income, net
1,872
3,357
19,637
9,846
Interest expense
(14,145)
(14,069)
(42,149)
(35,869)
Net loss before taxes
(302,224)
(204,024)
(3,046,027)
(203,090)
Income tax benefit
(1,068)
(5,848)
(39,551)
(29,208)
Net loss
$ (301,156)
$ (198,176)
$ (3,006,476)
$ (173,882)
Net loss per share, basic and diluted
$ (1.27)
$ (0.91)
$ (12.91)
$ (0.85)
Shares used in computing net loss per share, basic and diluted
237,974
218,384
232,889
205,587
INVITAE CORPORATION
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended September 30,
2022
2021
Cash flows from operating activities:
Net loss
$ (3,006,476)
$ (173,882)
Adjustments to reconcile net loss to net cash used in operating activities:
Asset impairments
2,324,572
—
Losses on asset disposals
48,792
—
Depreciation and amortization
104,726
56,848
Stock-based compensation
164,314
131,768
Amortization of debt discount and issuance costs
11,676
10,352
Remeasurements of liabilities associated with business combinations
(17,516)
(396,015)
Benefit from income taxes
(39,551)
(29,215)
Post-combination expense for acceleration of unvested equity and deferred stock compensation
4,980
7,870
Amortization of premiums and discounts on investment securities
603
5,155
Non-cash lease expense
6,832
1,861
Other
536
320
Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable
(22,903)
(8,900)
Inventory
3,614
1,397
Prepaid expenses and other current assets
9,012
(15,273)
Other assets
2,740
(2,915)
Accounts payable
(6,345)
2,581
Accrued expenses and other long-term liabilities
(540)
24,151
Net cash used in operating activities
(410,934)
(383,897)
Cash flows from investing activities:
Purchases of marketable securities
(789,622)
(325,957)
Proceeds from maturities of marketable securities
541,313
228,043
Acquisition of businesses, net of cash acquired
—
(239,836)
Purchases of property and equipment
(48,385)
(35,533)
Other
—
(1,300)
Net cash used in investing activities
(296,694)
(374,583)
Cash flows from financing activities:
Proceeds from public offerings of common stock, net
9,658
434,263
Proceeds from issuance of common stock
6,267
15,810
Proceeds from issuance of convertible senior notes, net
—
1,116,427
Finance lease principal payments
(4,184)
(2,833)
Settlement of acquisition obligations
(10,582)
(4,758)
Net cash provided by financing activities
1,159
1,558,909
Net (decrease) increase in cash, cash equivalents and restricted cash
(706,469)
800,429
Cash, cash equivalents and restricted cash at beginning of period
933,525
131,480
Cash, cash equivalents and restricted cash at end of period
$ 227,056
$ 931,909
Reconciliation of GAAP to Non-GAAP Cost of Revenue
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Cost of revenue
$ 116,956
$ 87,741
$ 324,412
$ 252,563
Amortization of acquired intangible assets
(27,711)
(13,422)
(73,618)
(34,578)
Acquisition-related stock-based compensation
(146)
(80)
(425)
(2,320)
Acquisition-related post-combination expense
(162)
(579)
(1,053)
(579)
Fair value adjustments to acquisition-related assets
—
—
—
(3,148)
Restructuring-related retention bonuses
(170)
—
(170)
—
Inventory and prepaid write-offs
(16,467)
—
(16,467)
—
Non-GAAP cost of revenue
$ 72,300
$ 73,660
$ 232,679
$ 211,938
Reconciliation of GAAP to Non-GAAP Gross Profit
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Revenue
$ 133,536
$ 114,395
$ 393,849
$ 334,328
Cost of revenue
116,956
87,741
324,412
252,563
Gross profit
16,580
26,654
69,437
81,765
Amortization of acquired intangible assets
27,711
13,422
73,618
34,578
Acquisition-related stock-based compensation
146
80
425
2,320
Acquisition-related post-combination expense
162
579
1,053
579
Fair value adjustments to acquisition-related assets
—
—
—
3,148
Restructuring-related retention bonuses
170
—
170
—
Inventory and prepaid write-offs
16,467
—
16,467
—
Non-GAAP gross profit
$ 61,236
$ 40,735
$ 161,170
$ 122,390
Reconciliation of GAAP to Non-GAAP Research and Development Expense
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Research and development
$ 87,177
$ 97,511
$ 330,559
$ 284,323
Amortization of acquired intangible assets
(306)
(528)
(1,338)
(1,588)
Acquisition-related stock-based compensation
(18,695)
(1,658)
(65,719)
(20,703)
Acquisition-related post-combination expense
(1,962)
(2,391)
(7,186)
(3,449)
Restructuring-related retention bonuses
(646)
—
(646)
—
Restructuring-related accelerated depreciation
(3,311)
—
(3,311)
—
Non-GAAP research and development
$ 62,257
$ 92,934
$ 252,359
$ 258,583
Reconciliation of GAAP to Non-GAAP Selling and Marketing Expense
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Selling and marketing
$ 49,193
$ 55,501
$ 172,086
$ 163,705
Amortization of acquired intangible assets
(1,610)
(1,685)
(4,856)
(5,062)
Acquisition-related stock-based compensation
(806)
—
(2,374)
(2,696)
Acquisition-related post-combination expense
—
—
—
(38)
Restructuring-related retention bonuses
(115)
—
(115)
—
Non-GAAP selling and marketing
$ 46,662
$ 53,816
$ 164,741
$ 155,909
Reconciliation of GAAP to Non-GAAP General and Administrative Expense
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
General and administrative
$ 44,939
$ 86,820
$ 149,071
$ 197,640
Acquisition-related stock-based compensation
(3,438)
(11)
(6,656)
(21,261)
Acquisition-related post-combination expense
—
(31,716)
—
(35,463)
Restructuring-related retention bonuses
(300)
—
(300)
—
Restructuring-related accelerated depreciation
(111)
—
(111)
—
Non-GAAP general and administrative
$ 41,090
$ 55,093
$ 142,004
$ 140,916
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Research and development
$ 87,177
$ 97,511
$ 330,559
$ 284,323
Selling and marketing
49,193
55,501
172,086
163,705
General and administrative
44,939
86,820
149,071
197,640
Asset impairments
6,708
—
2,324,572
—
Change in fair value of contingent consideration
—
(19,866)
(1,850)
(386,836)
Restructuring
118,514
—
118,514
—
Operating expenses
306,531
219,966
3,092,952
258,832
Amortization of acquired intangible assets
(1,916)
(2,213)
(6,194)
(6,650)
Acquisition-related stock-based compensation
(22,939)
(1,669)
(74,749)
(44,660)
Acquisition-related post-combination expense
(1,962)
(34,107)
(7,186)
(38,950)
Fair value adjustments to acquisition-related liabilities
—
19,866
1,850
386,836
Asset impairments
(6,708)
—
(2,324,572)
—
Restructuring
(118,514)
—
(118,514)
—
Restructuring-related retention bonuses
(1,061)
—
(1,061)
—
Restructuring-related accelerated depreciation
(3,422)
—
(3,422)
—
Non-GAAP operating expenses
$ 150,009
$ 201,843
$ 559,104
$ 555,408
Reconciliation of Other Income, Net to Non-GAAP Other Income (Expense), Net
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Other income, net
$ 1,872
$ 3,357
$ 19,637
$ 9,846
Fair value adjustments to acquisition-related liabilities
527
(3,427)
(15,666)
(9,179)
Non-GAAP other income (expense), net
$ 2,399
$ (70)
$ 3,971
$ 667
Reconciliation of Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share
(in thousands, except per share data)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Net loss
$ (301,156)
$ (198,176)
$ (3,006,476)
$ (173,882)
Amortization of acquired intangible assets
29,627
15,635
79,812
41,228
Acquisition-related stock-based compensation
23,085
1,749
75,174
46,980
Acquisition-related post-combination expense
2,124
34,686
8,239
39,529
Fair value adjustments to acquisition-related assets and liabilities
527
(23,293)
(17,516)
(392,867)
Asset impairments
6,708
—
2,324,572
—
Restructuring
118,514
—
118,514
—
Restructuring-related retention bonuses
1,231
—
1,231
—
Restructuring-related accelerated depreciation
3,422
—
3,422
—
Inventory and prepaid write-offs
16,467
—
16,467
—
Acquisition-related income tax benefit
(1,390)
(6,520)
(40,195)
(30,607)
Non-GAAP net loss
$ (100,841)
$ (175,919)
$ (436,756)
$ (469,619)
Net loss per share, basic and diluted
$ (1.27)
$ (0.91)
$ (12.91)
$ (0.85)
Non-GAAP net loss per share, basic and diluted
$ (0.42)
$ (0.81)
$ (1.88)
$ (2.28)
Shares used in computing net loss per share, basic and diluted
237,974
218,384
232,889
205,587
Reconciliation of Net Decrease in Cash, Cash Equivalents and Restricted Cash to Cash Burn
(in thousands)
(unaudited)
Three Months Ended
Nine Months Ended
March 31, 2022
June 30, 2022
September 30, 2022
September 30, 2022
Net cash used in operating activities
$ (147,543)
$ (134,689)
$ (128,702)
$ (410,934)
Net cash (used in) provided by investing activities
(449,456)
108,965
43,797
(296,694)
Net cash (used in) provided by financing activities
(920)
3,770
(1,691)
1,159
Net decrease in cash, cash equivalents and restricted cash
(597,919)
(21,954)
(86,596)
(706,469)
Adjustments:
Net changes in investments
428,608
(125,087)
(55,212)
248,309
Proceeds from public offering of common stock, net
—
—
(9,658)
(9,658)
Cash burn
$ (169,311)
$ (147,041)
$ (151,466)
$ (467,818)
• Cash burn for the three months ended September 30, 2022 includes $29.1 million of restructuring-related cash payments and $14.1 million of acquisition-related payments.
Contact for Invitae:
Hoki Luk
ir@invitae.com
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SOURCE Invitae Corporation