Q2 2024 revenue increased 74% over Q2 2023 to $87 million
Q2 2024 total test reports increased 49% over Q2 2023
Raising full-year 2024 revenue guidance to $275-300 million from $255-265 million
Conference call and webcast today at 4:30 p.m. ET
FRIENDSWOOD, Texas–(BUSINESS WIRE)–Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced its financial results for the second quarter and six months ended June 30, 2024.
“We achieved another quarter of exceptional performance, thanks to the hard work of our talented team and strength of our innovative test portfolio,” said Derek Maetzold, president and chief executive officer of Castle Biosciences. “We were especially pleased with the substantial top-line growth as well as growth in test report volumes across our therapeutic areas.”
“Regarding our DecisionDx®-SCC test, we were also pleased to see the publication of our first study evaluating the use of DecisionDx-SCC to guide adjuvant radiation therapy (ART) recommendations in patients diagnosed with high-risk cutaneous squamous cell carcinoma (SCC). This study, which is the largest study to evaluate the effectiveness of ART in SCC, found that the DecisionDx-SCC test can identify patients who are considering ART under traditional clinicopathologic risk features and have a low likelihood of metastasis and a low likelihood of a receiving a clinical benefit from ART – thus enabling deferral of radiation therapy and avoidance of complications and associated impacts on the patient’s quality of life. This study was published in the American Society for Radiation Oncology’s flagship journal, International Journal of Radiation Oncology, Biology, Physics (also known as the Red Journal).
“Regarding our TissueCypher® Barrett’s Esophagus test, the American Gastroenterological Association (AGA) recently recognized in its Clinical Practice Guideline that there is a high-risk subset of non-dysplastic Barrett’s esophagus patients who may benefit from early intervention with endoscopic eradication therapy (EET) and importantly, acknowledged that tissue-based biomarker testing, including the tissue systems pathology test (i.e., TissueCypher, also known as TSP-9) can help identify these patients.
“We believe we are well-positioned for near- and long-term success, supported by the potential for continued growth across our portfolio, as well as by our robust balance sheet and proven track record of strong execution. I am proud of what we have accomplished, and we will continue to work to operate with speed and agility to deliver value to patients, clinicians and stockholders alike.”
Second Quarter Ended June 30, 2024, Financial and Operational Highlights
Six Months Ended June 30, 2024, Financial and Operational Highlights
Cash, Cash Equivalents and Marketable Investment Securities
As of June 30, 2024, the Company’s cash, cash equivalents and marketable investment securities totaled $259.7 million.
2024 Outlook
Based upon revenue generated through June 30, 2024, the Company is increasing its guidance for anticipated total revenue in 2024 to between $275–300 million, compared to the previously provided guidance of between $255–265 million.
Second Quarter and Recent Accomplishments and Highlights
Dermatology
Gastroenterology
Mental Health
Uveal Melanoma
Corporate
Conference Call and Webcast Details
Castle Biosciences will hold a conference call on Monday, August 5, 2024, at 4:30 p.m. Eastern time to discuss its second quarter 2024 results and provide a corporate update.
A live webcast of the conference call can be accessed here: https://events.q4inc.com/attendee/952012940 or via the webcast link on the Investor Relations page of the Company’s website, https://ir.castlebiosciences.com/overview/default.aspx. Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until August 26, 2024.
To access the live conference call via phone, please dial 833 470 1428 from the United States, or +1 404 975 4839 internationally, at least 10 minutes prior to the start of the call, using the conference ID 802518.
There will be a brief Question & Answer session following management commentary.
Use of Non-GAAP Financial Measures (UNAUDITED)
In this release, we use the metrics of Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to GAAP net revenues to exclude net positive and/or net negative revenue adjustments recorded in the current period associated with changes in estimated variable consideration related to test reports delivered in previous periods. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted EBITDA excludes from net income (loss): interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense, change in fair value of contingent consideration and acquisition related transaction costs.
We use Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and operating performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors’ analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition-related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which are applicable only to tests we acquired rather than internally developed. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.
These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin or net income (loss) reported in accordance with GAAP; should be considered in conjunction with our financial information presented in accordance with GAAP; have no standardized meaning prescribed by GAAP; are unaudited; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this release.
About Castle Biosciences
Castle Biosciences (Nasdaq: CSTL) is a leading diagnostics company improving health through innovative tests that guide patient care. The Company aims to transform disease management by keeping people first: patients, clinicians, employees and investors.
Castle’s current portfolio consists of tests for skin cancers, Barrett’s esophagus, mental health conditions and uveal melanoma. Additionally, the Company has active research and development programs for tests in other diseases with high clinical need, including its test in development to help guide systemic therapy selection for patients with moderate-to-severe, atopic dermatitis, psoriasis and related conditions. To learn more, please visit www.CastleBiosciences.com and connect with us on LinkedIn, Facebook, X and Instagram.
DecisionDx-Melanoma, DecisionDx-CMSeq, DecisionDx-SCC, MyPath Melanoma, DiffDx-Melanoma, TissueCypher, IDgenetix, DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq are trademarks of Castle Biosciences, Inc.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our expectations regarding: (i) our 2024 total revenue guidance of $275-300 million; (ii) the potential of our tests to improve patient outcomes, including increased survival; (iii) our continued commercial momentum in 2024; (iv) our ability to continue to develop evidence to support the clinical utility of our tests; and (v) our ability to achieve near- and long-term success and the continued growth of our portfolio. The words “anticipate,” “can,” “could,” “expect,” “goal,” “may,” “plan” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: our assumptions or expectations regarding continued reimbursement for our DecisionDx-SCC test at the current rate and reimbursement for our other products and subsequent coverage decisions, our estimated total addressable markets for our products and product candidates and the related expenses, capital requirements and potential needs for additional financing, the anticipated cost, timing and success of our product candidates, and our plans to research, develop and commercialize new tests and our ability to successfully integrate new businesses, assets, products or technologies acquired through acquisitions, the effects of macroeconomic events and conditions, including inflation and monetary supply shifts, labor shortages, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets and recession risks, supply chain disruptions, outbreaks of contagious diseases and geopolitical events (such as the ongoing Israel-Hamas War and Ukraine-Russia conflict), among others, on our business and our efforts to address its impact on our business; subsequent study or trial results and findings may contradict earlier study or trial results and findings or may not support the results discussed in this press release, including with respect to the tests discussed in this press release; our planned installation of additional equipment and supporting technology infrastructures and implementation of certain process efficiencies may not enable us to increase the future scalability of our TissueCypher Test; actual application of our tests may not provide the aforementioned benefits to patients; our newer gastroenterology and mental health franchises may not contribute to the achievement of our long-term financial targets as anticipated; and the risks set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, each filed or to be filed with the SEC, and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, except as may be required by law.
CASTLE BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data)
|
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
NET REVENUES |
$ |
87,002 |
|
|
$ |
50,138 |
|
|
$ |
159,976 |
|
|
$ |
92,175 |
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
||||||||
Cost of sales (exclusive of amortization of acquired intangible asset) |
|
14,519 |
|
|
|
11,058 |
|
|
|
28,413 |
|
|
|
21,240 |
|
Research and development |
|
14,136 |
|
|
|
13,308 |
|
|
|
27,945 |
|
|
|
27,701 |
|
Selling, general and administrative |
|
51,088 |
|
|
|
44,681 |
|
|
|
99,583 |
|
|
|
91,443 |
|
Amortization of acquired intangible asset |
|
2,247 |
|
|
|
2,248 |
|
|
|
4,494 |
|
|
|
4,470 |
|
Total operating expenses, net |
|
81,990 |
|
|
|
71,295 |
|
|
|
160,435 |
|
|
|
144,854 |
|
Operating income (loss) |
|
5,012 |
|
|
|
(21,157 |
) |
|
|
(459 |
) |
|
|
(52,679 |
) |
Interest income |
|
3,144 |
|
|
|
2,399 |
|
|
|
6,140 |
|
|
|
4,735 |
|
Interest expense |
|
(270 |
) |
|
|
(3 |
) |
|
|
(284 |
) |
|
|
(7 |
) |
Income (loss) before income taxes |
|
7,886 |
|
|
|
(18,761 |
) |
|
|
5,397 |
|
|
|
(47,951 |
) |
Income tax (benefit) expense |
|
(1,034 |
) |
|
|
16 |
|
|
|
(989 |
) |
|
|
30 |
|
Net income (loss) |
$ |
8,920 |
|
|
$ |
(18,777 |
) |
|
$ |
6,386 |
|
|
$ |
(47,981 |
) |
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.32 |
|
|
$ |
(0.70 |
) |
|
$ |
0.23 |
|
|
$ |
(1.80 |
) |
Diluted |
$ |
0.31 |
|
|
$ |
(0.70 |
) |
|
$ |
0.22 |
|
|
$ |
(1.80 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
27,646 |
|
|
|
26,733 |
|
|
|
27,566 |
|
|
|
26,670 |
|
Diluted |
|
28,738 |
|
|
|
26,733 |
|
|
|
28,542 |
|
|
|
26,670 |
|
|
|
|
|
|
|
|
|
Contacts
Investor Relations Contact:
Camilla Zuckero
czuckero@castlebiosciences.com
281-906-3868
Media Contact:
Allison Marshall
amarshall@castlebiosciences.com
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