23andMe (ME)2025-01-28 22:18Financial Performance - Total revenue for Q3 FY25 was $60.3 million, a 34% increase from $44.7 million in the same period last year, primarily due to $19.3 million in non-recurring research services revenue[8] - Consumer services revenue decreased by 8% year-over-year to $39.6 million, driven by a $6.4 million decline in PGS revenue and a $1.5 million decrease in telehealth revenue[9] - Net loss for Q3 FY25 was $26.8 million, an improvement from a net loss of $259.7 million in the prior year quarter[12] - Non-GAAP Adjusted EBITDA for Q3 FY25 was a loss of $13.0 million, compared to a loss of $32.5 million in the prior year quarter, reflecting improved revenue and reduced expenses[13] - Total revenue for the three months ended December 31, 2024, was $60,262,000, a 34.7% increase from $44,747,000 in the same period of 2023[25] - Gross profit for the nine months ended December 31, 2024, was $82,492,000, compared to $71,149,000 for the same period in 2023, reflecting a 15.9% increase[25] - The net loss from continuing operations for the three months ended December 31, 2024, was $26,775,000, a substantial improvement from a loss of $259,700,000 in the same period of 2023[25] - Adjusted EBITDA from continuing operations for the three months ended December 31, 2024, was $(12,999,000), an improvement from $(32,484,000) in the same period of 2023[31] - The company had a total comprehensive loss of $45,535,000 for the three months ended December 31, 2024, compared to a loss of $277,976,000 in the same period of 2023[25] Operating Expenses and Cost Management - Operating expenses for Q3 FY25 were $68.2 million, significantly lower than $282.6 million in the prior year, mainly due to a prior year non-cash goodwill impairment charge[11] - Operating expenses for the three months ended December 31, 2024, totaled $68,199,000, significantly lower than $282,619,000 in the same period of 2023, indicating a reduction in costs[25] - The company implemented a 40% reduction in force, expected to save over $35 million annually, and discontinued its Therapeutics business to cut costs[9] Cash and Liquidity - Cash and cash equivalents at the end of Q3 FY25 were $79.4 million, down from $126.6 million at the end of Q2 FY25 and $216.5 million at the end of FY24[4] - Cash and cash equivalents as of December 31, 2024, were $79,350,000, down from $216,488,000 as of March 31, 2024[27] - Total current assets decreased to $161,577,000 as of December 31, 2024, from $255,309,000 as of March 31, 2024[27] - The company reported a net cash used in operating activities of $128,854,000 for the nine months ended December 31, 2024, compared to $138,535,000 for the same period in 2023[29] Strategic Concerns - The company has substantial doubt about its ability to continue as a going concern without raising additional capital or entering into a strategic transaction[5] - 23andMe is actively seeking to improve its financial condition through capital raising and cost-cutting measures, including negotiating lease terminations[6] - The previously disclosed $30 million settlement related to a cyber incident was not unconditionally approved, complicating efforts to resolve claims from affected U.S. customers[9] Accumulated Deficit - The accumulated deficit as of December 31, 2024, was $(2,347,126,000), an increase from $(2,173,088,000) as of March 31, 2024[27]