Exact Sciences Corporation (NASDAQ:EXAS) Q3 2023 Earnings Conference Call November 1, 2023 5:00 PM ET Company Participants Kevin Conroy - Chairman, Chief Executive Officer Jeff Elliott - Chief Financial Officer Everett Cunningham - Chief Commercial Officer Erik Holznecht - Manager, Investor Relations Conference Call Participants Catherine Schulte - Baird Brandon Couillard - Jefferies Derik de Bruin - Bank of America Dan Brennan - TD Cowen Andrew Brackmann - William Blair Vijay Kumar - Evercore ISI Matt Syke ...

Revenue Performance - Revenue for the three months ended September 30, 2023, reached $628 million, a 20% increase compared to the same period in 2022[191] - Total revenue for the three months ended September 30, 2023, was $628.3 million, an increase of $105.3 million (20.1%) compared to $523.1 million in the same period of 2022[205] - Screening revenue increased to $472.0 million for the three months ended September 30, 2023, up $111.3 million (30.8%) from $360.8 million in 2022, driven by higher completed Cologuard tests[205] - Precision Oncology revenue rose to $156.3 million, a $4.9 million (3.2%) increase from $151.4 million in the prior year, attributed to more completed Oncotype DX tests[205] - COVID-19 testing revenue dropped to $0 million from $10.9 million, reflecting reduced demand as the pandemic subsides[205] Cash Flow and Financial Position - Positive cash provided by operating activities was $24 million for the three months ended September 30, 2023, an improvement of $65 million year-over-year[191] - Net cash provided by operating activities for the nine months ended September 30, 2023 was $86.6 million, compared to a cash used of $275.6 million for the same period in 2022[227] - As of September 30, 2023, the company had approximately $594.6 million in unrestricted cash and cash equivalents and approximately $139.8 million in marketable securities[225] - The company has an accumulated deficit of approximately $3.42 billion as of September 30, 2023[203] - The outstanding aggregate principal of all convertible notes was $2.34 billion as of September 30, 2023[233] Expenses and Investments - Research and development expenses for the three months ended September 30, 2023, totaled $111.4 million, an increase of $20.6 million (22.7%) from $90.8 million in 2022[211] - General and administrative expenses increased to $217.4 million for the three months ended September 30, 2023, up $25.4 million (13.2%) from $192.0 million in 2022[215] - The company anticipates that research and development expenses will continue to rise as it invests in advancing new tests[210] Operational Efficiency - Cost of sales as a percentage of revenue decreased to 27% for the three months ended September 30, 2023, compared to 28% in the same period of 2022, due to improved efficiency[209] - Amortization of acquired intangible assets decreased to $23.0 million for the three months ended September 30, 2023, compared to $23.5 million in the same period of 2022[215] Strategic Initiatives - Exact Sciences has delivered over 1 million test results, including a record number of Cologuard and Oncotype DX results[191] - The company plans to complete submission for FDA approval of the next-generation Cologuard test by the end of 2023[195] - Exact Sciences aims to develop a multi-cancer early detection test, Cancerguard, with a mean sensitivity of 61% and mean specificity of 98.2% for detecting cancer signals from 15 organ sites[195] - Exact Sciences is focused on improving customer relations and enhancing digital tools for providers and patients[199] - The company is integrating Resolution Bioscience and its liquid therapy selection test into its foundation[191] - Exact Sciences is committed to expanding its business by testing more people, aiming for sustainable profits and increased shareholder value[201] Other Financial Metrics - Other operating income was $72.0 million for the three and nine months ended September 30, 2023, compared to a loss of $13.2 million for the same periods in 2022[217] - Net investment income was $2.1 million for the three months ended September 30, 2023, compared to a net investment loss of $8.6 million for the same period in 2022[218] - Interest expense increased to $7.9 million for the three months ended September 30, 2023, compared to $5.2 million for the same period in 2022[219] - Income tax expense was $0.2 million for the three months ended September 30, 2023, compared to a benefit of $3.1 million for the same period in 2022[220] Risk Management - The company maintains significant amounts of cash, cash equivalents, restricted cash, and marketable securities at financial institutions that exceed federally insured limits, posing a risk of potential losses on these deposits[240] - The company had open foreign currency forward contracts with notional amounts of $33.3 million as of September 30, 2023, to mitigate foreign exchange rate exposure[243] - Substantially all of the company's revenues are recognized in U.S. dollars, minimizing material gains and losses from foreign currency translation[242] - The company does not utilize interest rate hedging agreements or other interest rate derivative instruments, which may expose it to interest rate risk[240] - A hypothetical 100 basis point decrease in market interest rates would result in immaterial potential losses in future earnings and cash flows[240] - The company is subject to risks from changes in foreign currency exchange rates, which could affect financial results due to international activities[242] - The company invests cash and marketable securities in high-quality, highly liquid investments, maintaining safety and liquidity[239] - All significant interest-bearing liabilities, except for variable rate debt, bear fixed interest rates, which may lead to higher future interest payments if market rates change[241] - The company has established investment guidelines for diversification and maturities to manage credit exposure and maintain liquidity[239]

Financial Data and Key Metrics - Q2 2023 revenue grew 19% YoY to $622 million, with core revenue (excluding COVID testing, prostate business sale, and FX) up 24% to $617 million [8] - Screening revenue increased 31% to $463 million, driven by broad-based momentum in Cologuard adoption [8] - Precision Oncology revenue grew 2% to $157 million (7% excluding prostate business sale and FX) [9] - COVID testing revenue declined 84% to $2 million, and the company discontinued COVID testing in July [9][10] - GAAP gross margin was 71%, while non-GAAP gross margin (excluding amortization of acquired intangibles) was 75% [9] - Adjusted EBITDA improved by $113 million YoY to $67 million, driven by better-than-expected revenue, gross margin, and operating expense discipline [10] - Free cash flow improved by $190 million YoY to $66 million, with cash and securities totaling $776 million at quarter-end [10] Business Line Performance - Cologuard adoption continues to grow, with over 9,000 new healthcare professionals ordering the test in Q2 and more than 321,000 since launch [9] - Approximately 75% of US primary care physicians have ordered Cologuard, with 10% penetration among eligible patients [23][24] - The company implemented 40 new electronic connections with large US health systems in 2023, bringing the total to nearly 300 [8] - Precision Oncology growth was driven by a 26% increase in international revenue, with Oncotype DX Breast test securing reimbursement in Japan [14][62] Market Performance - The US market remains the primary driver, with significant opportunities in colorectal cancer screening, as 60 million Americans are not up-to-date with screening [13] - Japan represents a major opportunity for Oncotype DX, with 90,000 women diagnosed with breast cancer annually, half of whom are eligible for the test [14] - The company is focusing on molecular residual disease (MRD) and multi-cancer early detection as key growth areas, with collaborations with the Broad Institute and Baylor Scott & White [6][15] Strategic Direction and Industry Competition - The company is advancing next-generation Cologuard, which achieved a 30% improvement in specificity and enhanced sensitivity for cancer and pre-cancer detection [12] - FDA submission for next-gen Cologuard is expected by year-end, with potential approval in early 2025 [13] - The company is investing in MRD and multi-cancer early detection platforms, with partial results from the ASCEND 2 trial expected in fall 2023 [16] - The company raised full-year revenue guidance by $54 million and adjusted EBITDA guidance by $63 million, reflecting strong execution and market opportunities [7][11] Management Commentary on Operating Environment and Future Outlook - Management highlighted the company's commitment to eradicating cancer through innovative diagnostics and strong commercial execution [5][6] - The company expects long-term double-digit revenue growth and margin improvement, supported by its scalable platform [7][11] - Management emphasized the importance of next-gen Cologuard in reducing false positives and improving screening outcomes, which will drive future growth [12][13] Other Important Information - The company is working on a blood-based CRC test, with data expected by mid-2024, targeting patients who refuse frontline screening tests [79][80] - The care gap program, which targets hard-to-screen patients, is a key initiative to improve screening rates and strengthen relationships with payers and health systems [52][53] Q&A Session Summary Question: OpEx trends and Cologuard 2.0 impact [18] - OpEx is expected to increase in the mid-single-digit range for the year, with accelerated investments in MRD and hiring in H2 [19][20] - Cologuard 2.0 will target physicians who previously objected to the false positive rate, leveraging data and analytics for targeted outreach [21] Question: Strategy for deepening Cologuard penetration [22] - The company focuses on increasing frequency and consistency of messaging to drive higher Cologuard orders, despite 75% of primary care physicians already ordering the test [23][24] Question: Profitability and G&A leverage [25] - Adjusted EBITDA margins are improving, with a $320 million YoY improvement expected for 2023 [26] - G&A growth was 2% excluding one-time items, with further leverage expected over time [27] Question: Cologuard drivers and rescreen trends [28] - Rescreens are a key driver, with a temporary headwind from COVID-related declines in 2020 orders, but growth is expected to rebound in 2024 [29][30] - The 45-49 age group now accounts for nearly 20% of Cologuard revenue, driven by guideline changes [31] Question: Oncotype DX in Japan and cash collections [34] - Oncotype DX in Japan is expected to contribute $25-30 million annually, with a small impact in 2023 [35] - Improved cash collections contributed over $10 million in H1, with $5 million expected in H2 [36][37] Question: Seasonality and Q3 guidance [38] - Q3 screening revenue is expected to be flat due to COVID-related rescreen headwinds, but full-year growth remains strong at 28% [41][42] Question: MRD Oncodetect launch timing [43] - The MRD test is expected to launch in late Q4 2023, with Medicare coverage likely by mid-2025 [44] Question: Next-gen Cologuard timeline [45] - FDA submission for next-gen Cologuard is expected by year-end, with approval likely in 9-12 months [47] Question: Gross margin trends and Cologuard 2.0 cost savings [48] - Full-year gross margin guidance is raised to 73.5%-74%, with Cologuard 2.0 expected to reduce costs by at least 5% [49][51] Question: Health system electronic connections [54] - Electronic ordering accounts for 65% of Cologuard orders, with plans to connect 60 more health systems in H2 [55][57] Question: Physician feedback on next-gen Cologuard [58] - Early feedback from KOLs and payers on next-gen Cologuard is positive, with expectations of smooth adoption and reimbursement [59][60] Question: Precision Oncology revenue breakdown [61] - International Precision Oncology revenue grew 26% in Q2, with strong momentum in the global breast franchise [62] Question: MRD technology and Broad Institute collaboration [65] - The Broad Institute's MAESTRO technology will enhance the next-gen MRD test, improving sensitivity and specificity [66] Question: Health system backlog and screening capacity [67] - Health systems are partnering with the company to address colonoscopy backlogs and improve screening rates [68][70] Question: Margin profile and COVID rescreen headwind [71] - The $50 million COVID rescreen headwind is temporary, with margins expected to improve as the headwind lifts in 2024 [72] Question: International expansion learnings [73] - The company is leveraging its US experience to explore opportunities for Cologuard in international markets, particularly Europe [74][75] Question: Cologuard blood test timeline [78] - Data for the CRC blood test is expected by mid-2024, targeting patients who refuse frontline screening tests [79][80]

We aim to eradicate cancer with tests that help prevent it, detect it earlier, and guide treatment. Second-quarter 2023 earnings call August 1, 2023 EXACT SCIENCES 1 Safe harbor and non-GAAP disclosures This presentation 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 t ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-35092 EXACT SCIENCES CORPORATION (Exact name of registrant as specified in its charter) (Address of principal executive offices) (Zip Code) (608) 535-8815 ...

We aim to eradicate cancer with tests that help prevent it, detect it earlier, and guide treatment. First quarter 2023 earnings call May 9, 2023 EXACT SCIENCES Safe harbor and non-GAAP disclosures This presentation 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 t ...

Exact Sciences Corporation (NASDAQ:EXAS) Q1 2023 Earnings Conference Call May 9, 2023 5:00 PM ET Company Participants Megan Jones - IR Kevin Conroy - Chairman & CEO Jeffrey Elliott - CFO & COO Everett Cunningham - Chief Commercial Officer Conference Call Participants Brandon Couillard - Jefferies Catherine Schulte - Baird Vijay Kumar - Evercore ISI Andrew Brackmann - William Blair Jack Meehan - Nephron Research Daniel Arias - Stifel Derik De Bruin - Bank of America Matt Sykes - Goldman Sachs Dan Brennan - C ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-35092 EXACT SCIENCES CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Del ...

Exact Sciences Corporation (NASDAQ:EXAS) Q4 2022 Earnings Conference Call February 21, 2023 5:00 PM ET Company Participants Megan Jones - Investor Relations Kevin Conroy - Chairman and Chief Executive Officer Jeff Elliott - Chief Financial Officer and Chief Operating Officer Everett Cunningham - Chief Commercial Officer Conference Call Participants Derik De Bruin - Bank of America Andrew Brackmann - William Blair Dan Brennan - Cowen Vijay Kumar - Evercore ISI Catherine Schulte - Baird Brandon Couillard - Je ...

Making earlier cancer detection a routine part of medical care Fourth quarter 2022 earnings call February 21, 2023 EXACT SCIENCES 1 Safe harbor and non-GAAP disclosures This pre ...