NEW YORK – 23andMe said on Tuesday that its fiscal second quarter revenues fell 12 percent year over year a day after announcing a massive restructuring that will cut its workforce by 40 percent.
The Sunnyvale, California-based consumer genetics company finished the three months ending Sept. 30 with $44.1 million in total revenues compared to $50 million for the same quarter in FY 2024.
The firm attributed this decrease to lower consumer services, largely on account of falling PGS kit sales and telehealth orders.
In a premarket call with investors, Joe Selsavage, 23andMe's chief financial and accounting officer, said that the falling services revenue was slightly mitigated by growth in membership services, subscription upgrades, and sustained growth in customer renewal rates.
Revenue from consumer services, which includes PGS, telehealth, and membership services, represented approximately 99 percent of total revenue" for Q2 of fiscal year 2025 Q2, Selsavage said. He added that the firm expects to begin realizing revenue from a data licensing deal with GlaxoSmithKline in the second half of the fiscal year.
The two companies ended an exclusive five-year drug discovery partnership early last year but have continued to collaborate since then.
On Monday afternoon 23andMe announced plans to lay off over 200 employees and cease further development of its therapeutics programs as part of a broad restructuring meant to streamline operations and reduce costs.
23andMe hopes that this restructuring will help it achieve annualized savings of over $35 million after an estimated $12 million in expenses related to one-time severance, transition, and termination-related costs.
The restructuring follows several tumultuous months defined by conflict between Wojcicki, who has expressed the desire to take the company private, and the company's former independent board of directors, all of whom resigned in September.
The board's resignation triggered a warning of Nasdaq listing noncompliance, which the company was able to regain following the appointment of new board members.
Throughout the process, Wojcicki has maintained that she views taking the company private as the best path forward and has not been open to alternate deals.
Alongside discontinuing its therapeutics division and winding down all ongoing clinical trials, the company continues to seek out ways to maximize the value of ongoing therapeutics programs through licensing agreements, asset sales, or other transactions. The firm had already shuttered its therapeutics discovery business earlier this year.
Investigational therapies currently being evaluated in clinical trials include 23ME-00610 and ULBP6, both antibodies meant to help restore the immune system's cancer-fighting potential by blocking proteins used by cancer cells to weaken the immune system.
23andMe trimmed its Q2 net loss to $59.1 million, or $2.32 per share, from a net loss of $74.3 million, or $3.17 per share in the same quarter last year.
"The improvement in second quarter net loss was driven mainly by savings in operating expenses," Selsavage said.
23andMe's R&D spending fell 25 percent to $41 million from $54.6 million a year ago, while its SG&A expenses dipped 8 percent to $40.3 million from $43.6 million.
The decrease in operating expenses was driven by lower personnel expenses, including non-cash stock-based compensation expenses following workforce reductions in the current and prior quarters, the disposition of Lemonaid Health in the UK in August 2023, and lower therapeutics R&D spending.
On the investor call, CEO Ann Wojcicki said that in addition to deprioritizing its therapeutics business, the company's plan for continued sustainability comprises "dramatically" reducing costs across all business areas, growing subscriptions, and continuing to pursue research partnerships and collaborations, particularly within the pharmaceutical industry.
"We see an increasing interest from the therapeutics world on using genetics in discovery and in clinical trials," she said.
23andMe ended the quarter with approximately $126.6 million in cash and cash equivalents, and $1.5 million in restricted cash.