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Decline in Research Services, Kit Sales Drive 33 Percent Revenue Drop for 23andMe in Fiscal Q3

NEW YORK – 23andMe reported after the close of the market on Wednesday a 33 percent year-over-year decline in revenues for its fiscal third quarter of 2024.

The South San Francisco-based company finished the three months ended Dec. 31 with $44.7 million in revenues compared to $66.9 million for the same quarter in 2022, falling short of analysts' average estimate of $54.0 million. 

The firm attributed much of the decrease to lower research service revenue after the conclusion of a collaboration exclusivity term with GlaxoSmithKline in July 2023 and lower Personal Genome Service kit sales volumes.

The firm has since announced a one-year, nonexclusive data license deal with GSK for novel drug target discovery and other research, for which 23andMe received a $20 million upfront payment.

23andMe's Q3 R&D spending fell approximately 27 percent to $41.7 million from $57.2 million a year ago, while its SG&A expenses shrank 16 percent to $59.1 million from $70.6 million a year ago. Total operating expenses, however, rose to $301 million, compared to $128 million for the same period in the prior year, due to a $198.8 million noncash goodwill impairment charge taken in Q3, as well as $1.5 million in restructuring and other charges.

Third quarter net loss increased to approximately $278.0 million, or $.58 per share, from $93.9 million, or $.20 per share, in the same quarter a year ago.

23andMe ended the quarter with $242.4 million in cash and cash equivalents and $1.4 million in restricted cash.

The company adjusted its full-year revenue guidance, saying it now anticipates full-year 2024 revenue between $215 million and $220 million and a full-year net loss between $520 million and $525 million.