FORM 10-K __________________________________________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 or Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________ | __________________________________________________________ Delaware | 36-4370966 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employ ...

Financial Data and Key Metrics Changes - Total revenue in Q4 was $37.4 million, with core revenue of $36.5 million, reflecting a 10% year-over-year increase [28][29] - GAAP gross margin for Q4 was 36.2%, while non-GAAP gross margin was 40.1%, slightly below expectations due to lower margins in the risk assessment business and higher scrap expenses [31][32] - The company ended Q4 with zero debt and total cash and cash equivalents of $268 million [33] Business Line Data and Key Metrics Changes - Diagnostics revenue grew 9% year-over-year, generating $18.8 million in Q4, driven by strong order trends in the international HIV business [29][13] - Sample management solutions revenue increased 14% year-over-year, totaling $14.8 million in Q4 [29][13] - COVID-19 products contributed $1 million in revenue, consistent with expectations, while the risk assessment testing business generated $2.1 million in Q4 [30] Market Data and Key Metrics Changes - The international diagnostics business generated $41 million in revenue for 2024, with approximately 80% associated with donor-funded programs [15][16] - The company noted elevated uncertainty in the market environment due to freezes on US funding for foreign aid, impacting HIV testing programs in developing countries [15][19] Company Strategy and Development Direction - The company is focused on three strategic pillars: strengthening the foundation, elevating core growth, and accelerating profitable growth [7] - The acquisition of Sherlock Biosciences aims to expand the innovation pipeline with a molecular diagnostic platform [8][24] - The company plans to invest in innovation and expand its product portfolio, particularly in rapid diagnostics and sample management solutions [23][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong positioning despite near-term uncertainties, emphasizing the importance of investments in science and innovation [21][41] - The company is closely monitoring the impact of external factors, including changes in funding for HIV testing programs and NIH research funding [15][19] - Management anticipates that the combination of operational efficiencies and increased volumes will drive gross margin improvements towards the target of 50% [36] Other Important Information - The company generated positive cash flow from operations for the core business in Q4, indicating progress in operating efficiency and cost-saving initiatives [11][12] - The company expects to spend between $20 million and $25 million on the Sherlock acquisition, primarily for clinical trial development [95] Q&A Session Summary Question: What are the key uncertainties in the global market? - Management identified PEPFAR and academic funding as the primary areas of uncertainty, with PEPFAR being closely monitored [44][46] Question: Any updates on the Safarose blood collection device? - The device is still in the regulatory process, with expectations for approval in 2025 [50][51] Question: Can you elaborate on the BARDA contract and its funding? - The $7.5 million from BARDA is expected to be back-end loaded, with potential access to an additional $11 million based on milestones [55][56] Question: What is the outlook for gross margins and scrap expenses? - Scrap expenses were attributed to expired materials and are considered a one-time issue, with expectations for gross margins to improve through operational efficiencies [59][60] Question: How does the company view the potential downside from international government-funded markets? - Management emphasized bipartisan support for life-saving programs and the importance of public health, framing the international business as primarily donor-funded [102][106]

Company Performance - OraSure Technologies reported a quarterly loss of $0.06 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.02, and a significant decline from earnings of $0.22 per share a year ago, representing an earnings surprise of -200% [1] - The company posted revenues of $37.45 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.27%, but down from $75.88 million in the same quarter last year [2] - Over the last four quarters, OraSure has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - OraSure shares have increased approximately 10.5% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $32.72 million, and for the current fiscal year, it is -$0.13 on revenues of $146.24 million [7] Industry Outlook - The Medical - Products industry, to which OraSure belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Revenue Performance - Q4 2024 total net revenues decreased 51% to $37.4 million from $75.9 million in Q4 2023, primarily due to a decline in COVID-19 revenues[6] - Core business revenues increased 10% year-over-year to $36.5 million in Q4 2024, with diagnostics revenues up 9% to $18.8 million and sample management solutions revenues up 14% to $14.8 million[6] - COVID-19 revenues fell 98% year-over-year to $1.0 million in Q4 2024, following the completion of a major government contract[6] - Revenue for Q4 2024 was $37.445 million, a decrease from $75.881 million in Q4 2023, representing a decline of 50.7%[24] - For Q1 2025, the company anticipates revenues between $27.5 million and $31.5 million, with core revenues expected to be $27 million to $31 million[8] Profitability and Loss - The company reported a GAAP operating loss of $12.4 million in Q4 2024, compared to an operating income of $3.9 million in Q4 2023[6] - Non-GAAP Net Income for the year 2024 was a loss of $4.230 million, compared to a profit of $66.311 million in 2023, reflecting a significant decline[24] - GAAP Net Income for the year 2024 was a loss of $19.500 million, compared to a profit of $53.655 million in 2023[24] - Non-GAAP Operating Loss for Q4 2024 was $6.745 million, compared to an operating income of $11.151 million in Q4 2023[24] - GAAP Earnings Per Share for Q4 2024 was $(0.14), down from $0.27 in Q4 2023[24] - Non-GAAP Earnings Per Share for Q4 2024 was $(0.06), compared to $0.18 in Q4 2023[24] - The company reported a GAAP Operating Loss of $12.418 million for Q4 2024, compared to an operating income of $3.898 million in Q4 2023[24] Margins - GAAP gross margin for Q4 2024 was 36.2%, down from 46.3% in Q4 2023, while non-GAAP gross margin was 40.1%, down from 46.5%[6] - GAAP Gross Margin for Q4 2024 was 36.2%, down from 46.3% in Q4 2023, indicating a decrease of 10.1 percentage points[24] Cash Flow and Assets - Cash and cash equivalents stood at $267.8 million as of December 31, 2024, with cash flow from operations at $0.1 million for Q4 2024[6] - Total assets decreased from $482,845 million in December 31, 2023 to $480,859 million in December 31, 2024, a decline of approximately 0.4%[14] - Cash and cash equivalents decreased from $290,407 million in December 31, 2023 to $267,763 million in December 31, 2024, a decrease of about 7.8%[16] - Cash provided by operating activities dropped from $141,583 million in 2023 to $27,374 million in 2024, a decrease of approximately 80.7%[16] Expenditures and Compensation - Capital expenditures decreased from $10,303 million in 2023 to $3,797 million in 2024, a reduction of about 63.2%[15] - Stock-based compensation increased from $10,729 million in 2023 to $11,920 million in 2024, an increase of approximately 11.1%[15] - Stock compensation expenses for the year 2024 amounted to $11.919 million, up from $10.729 million in 2023[24] - The company recognized a reduction in workforce severance costs of $1.366 million for the year 2024, compared to $369,000 in 2023[24] Inventory and Receivables - Accounts receivable decreased from $40,171 million in December 31, 2023 to $23,816 million in December 31, 2024, a decline of about 40.6%[14] - Inventories decreased from $47,614 million in December 31, 2023 to $34,197 million in December 31, 2024, a decrease of approximately 28.2%[14] Strategic Initiatives - The company acquired Sherlock Biosciences in December 2024 to enhance its innovation pipeline with a new molecular diagnostics platform[6] - The company plans to wind down its Risk Assessment testing business while continuing to support existing customers during the first half of 2025[12] - The company is focused on expanding its product portfolio and market presence, particularly in rapid diagnostic tests and sample management solutions[18] Impairments - The company reported a loss on impairments of $4,392 million in 2024, compared to $10,829 million in 2023, indicating a reduction in impairment losses[16]

Core Insights - OraSure Technologies reported a 51% decrease in total net revenues for Q4 2024, amounting to $37.4 million, down from $75.9 million in Q4 2023, primarily due to a significant decline in COVID-19 revenues [3][9] - Core revenues, excluding COVID-19 and Molecular Services, increased by 10% year-over-year to $36.5 million, with diagnostics revenues rising by 9% to $18.8 million and sample management solutions revenues increasing by 14% to $14.8 million [3][9] - The company made strategic advancements in 2024, including the acquisition of Sherlock Biosciences, which is expected to enhance its diagnostic capabilities [2][9] Financial Performance - For the three months ended December 31, 2024, the gross profit was $13.6 million, resulting in a gross margin of 36.2%, compared to 46.3% in the same period of 2023 [4][9] - The operating loss for Q4 2024 was $12.4 million, compared to an operating income of $3.9 million in Q4 2023, indicating a significant operational challenge [4][9] - The net loss for Q4 2024 was $10.8 million, contrasting with a net income of $20.1 million in Q4 2023, reflecting the impact of reduced revenues [4][9] Business Developments - The company received FDA approval for a labeling change to the OraQuick® HIV Self-Test, expanding its use to adolescents aged 14 and older [9] - OraSure is developing a rapid antigen test for Marburg Virus Disease, supported by a contract valued at approximately $7.5 million, with potential total value up to $11 million [9] - The company is winding down its Risk Assessment testing business while continuing to support existing customers [9] Financial Guidance - For Q1 2025, the company anticipates revenues between $27.5 million and $31.5 million, with core revenues expected to be between $27 million and $31 million [7]

Core Viewpoint - OraSure Technologies, Inc. is set to hold its earnings conference call for the fourth quarter of 2024 on February 25, 2025, at 5 p.m. ET, to discuss financial results and business developments [1]. Company Overview - OraSure Technologies, Inc. focuses on transforming health through actionable insights and enhancing access to healthcare via innovative testing and sample management solutions [3]. - The company, along with its subsidiaries DNA Genotek Inc. and Sherlock Biosciences, Inc., is a leader in developing, manufacturing, and distributing rapid diagnostic tests and sample collection devices [3]. - OraSure's products are sold globally to various sectors, including clinical laboratories, hospitals, physician's offices, public health organizations, research institutions, government agencies, and pharmaceutical companies [3].

Core Viewpoint - OraSure Technologies (OSUR) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for OraSure is projected at $0.08 per share for the fiscal year ending December 2024, reflecting a year-over-year decline of 92.3% [9]. - Over the past three months, analysts have increased their earnings estimates for OraSure by 6.2% [9]. Zacks Rating System - The Zacks rating system is based solely on changes in a company's earnings picture, making it a reliable tool for investors [2][3]. - The system classifies stocks into five groups, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [10][11]. Market Implications - The upgrade to Zacks Rank 1 suggests that OraSure's improving earnings outlook could lead to increased buying pressure and a rise in its stock price [4][6]. - The correlation between earnings estimate revisions and stock price movements highlights the importance of tracking these revisions for investment decisions [7].

Core Viewpoint - The article emphasizes the importance of value investing and highlights OraSure Technologies (OSUR) as a strong value stock based on its metrics and rankings [3][6]. Value Investing - Value investing is a popular strategy that focuses on identifying undervalued stocks using fundamental analysis and established metrics [2]. - The Zacks Rank system is utilized to find winning stocks, with a specific focus on earnings estimates and revisions [1]. Company Metrics - OraSure Technologies (OSUR) has a Zacks Rank of 1 (Strong Buy) and an "A" grade for Value, indicating it is among the best value stocks currently available [3]. - OSUR's Price-to-Sales (P/S) ratio is 1.29, which is lower than the industry average of 1.59, suggesting it may be undervalued [4]. - The Price-to-Cash Flow (P/CF) ratio for OSUR is 12.54, significantly lower than the industry average of 39.25, indicating a favorable valuation based on cash flow [5]. - Over the past 12 months, OSUR's P/CF has fluctuated between 6.11 and 14.08, with a median of 8.39, further supporting its undervaluation [5][6].

Company Overview - OraSure Technologies, Inc. is a leader in point-of-need and home diagnostic tests and sample management solutions [1] - The company aims to transform health through actionable insights and improve access, quality, and value of healthcare with innovative testing solutions [3] - OraSure's product portfolio includes rapid diagnostic tests and sample collection devices, sold globally to various healthcare entities [3] Upcoming Event - OraSure's management team will participate in the 43rd Annual J.P. Morgan Healthcare Conference [1] - The presentation is scheduled for January 16, 2025, at 9:00 a.m. PT [1] - A live webcast and replay of the presentation will be available on OraSure's investor relations website [2]

Core Viewpoint - The article emphasizes the importance of value investing and highlights OraSure Technologies (OSUR) as a strong value stock based on various financial metrics [2][3][6] Company Analysis - OraSure Technologies (OSUR) currently holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating it is considered a strong value stock [3] - The company's price-to-sales (P/S) ratio is 1.24, which is lower than the industry average of 1.72, suggesting that OSUR may be undervalued [4] - OSUR's price-to-cash flow (P/CF) ratio stands at 11.81, significantly lower than the industry's average of 37.04, indicating a favorable cash outlook for the company [5] - Over the past 52 weeks, OSUR's P/CF has fluctuated between 6.11 and 14.08, with a median of 8.27, further supporting the notion of its current undervaluation [5][6] Industry Insights - Value investing remains a preferred strategy for identifying strong stocks across various market conditions, relying on traditional valuation metrics [2] - The P/S ratio is favored by some investors as it is less susceptible to manipulation compared to earnings figures, making it a potentially more reliable performance indicator [4]