23andMe (ME)2025-02-06 21:27Financial Performance - Total revenue for the three months ended December 31, 2024, was $60.262 million, a 34.6% increase from $44.747 million in the same period of 2023[14] - Gross profit for the three months ended December 31, 2024, was $39.826 million, compared to $19.685 million in the same period of 2023, reflecting a significant improvement[14] - The net loss for the three months ended December 31, 2024, was $53.035 million, compared to a net loss of $277.976 million in the same period of 2023, indicating a substantial reduction in losses[14] - For the nine months ended December 31, 2024, the net loss was $181,538,000, compared to a net loss of $457,870,000 for the same period in 2023[18] - The company reported a loss from operations of $35.873 million for the three months ended December 31, 2024, compared to a loss of $262.934 million in the same period of 2023[14] - The company recorded a net loss attributable to common stockholders of $38.2 million for the three months ended December 31, 2024, and $181.1 million for the nine months ended December 31, 2024[164] Operating Expenses - Operating expenses totaled $75.699 million for the three months ended December 31, 2024, down from $282.619 million in the same period of 2023, primarily due to reduced restructuring charges[14] - Research and development expenses for the three months ended December 31, 2024, were $20.216 million, down from $23.897 million in the same period of 2023[14] - Stock-based compensation expense for the nine months ended December 31, 2024, was $50,467,000, down from $101,198,000 in the prior year[18] - The company’s total stock-based compensation expense from continuing operations was $9.2 million for the three months ended December 31, 2024, compared to $24.1 million for the same period in 2023[158] Cash and Assets - Cash and cash equivalents decreased to $79.350 million as of December 31, 2024, from $216.488 million as of March 31, 2024[13] - Total current assets decreased to $161.577 million as of December 31, 2024, from $255.309 million as of March 31, 2024[13] - The Company held total restricted cash of $13.9 million as of December 31, 2024, an increase from $8.4 million as of March 31, 2024[42] - The Company had total financial assets of $74.75 million as of December 31, 2024, compared to $211.0 million as of March 31, 2024[95] Liabilities and Equity - Total liabilities increased to $214.702 million as of December 31, 2024, compared to $206.647 million as of March 31, 2024[13] - As of December 31, 2024, 23andMe reported a total stockholders' equity (deficit) of $62,720,000, with an accumulated deficit of $2,354,626,000[15] - The Company recorded restructuring charges of $12.1 million and $14.1 million for the three and nine months ended December 31, 2024, respectively, related to discontinued operations[71] Strategic Initiatives - 23andMe continues to focus on expanding its telehealth platform, Lemonaid Health, to provide affordable healthcare access[20] - The Company formed a Special Committee on March 28, 2024, to explore strategic alternatives to maximize stockholder value[23] - The Company is now willing to consider third-party takeover proposals after previously stating it would not[23] - The Company has undertaken a process to explore strategic alternatives, including a possible sale or business combination[23] Operational Changes - The Company announced a reduction in force on November 8, 2024, including the closure of substantially all operations in the Therapeutics segment[27] - The Company now operates as a single segment following the discontinuation of the Therapeutics operating segment as of December 31, 2024[28] - The November 2024 Reduction Plan involved a workforce reduction of approximately 40%, aimed at aligning the workforce with the Company's current strategy and reducing operating costs[111] Compliance and Governance - The company received a deficiency letter from Nasdaq on November 10, 2023, for not maintaining a minimum bid price of $1.00 per share for 30 consecutive trading days[52] - The company regained compliance with the Nasdaq Minimum Bid Requirement on October 30, 2024, with a closing bid price of $1.00 per share or greater from October 16 to October 29, 2024[56] - The Company was notified on September 18, 2024, of non-compliance with Nasdaq Corporate Governance Requirements, and regained compliance on October 30, 2024, after appointing three independent directors[201] Cyber Incident - The Company reached a settlement agreement to pay $30.0 million related to a cyber incident disclosed in October 2023[204] - The Company incurred $19.8 million in net expenses related to the Cyber Incident during the nine months ended December 31, 2024, primarily due to $42.0 million in legal fees, partially offset by $22.2 million in probable insurance recoveries[127] - As of December 31, 2024, the Company had $41.3 million of accrued expenses related to estimated loss contingencies and legal fees from the Cyber Incident[127] Revenue Streams - Revenue from the PGS business represented approximately 55% of total revenues for the three months ended December 31, 2024, down from 78% in the same period of 2023[184] - Revenue from the telehealth business accounted for approximately 11% of total revenue during the three months ended December 31, 2024, compared to 18% in the same period of 2023[186] - The Company recognized research services revenue of $19.6 million related to the 2023 GSK Amendment during the three and nine months ended December 31, 2024, while no revenue was recognized in the same periods of 2023[88] Stock and Shareholder Information - The Company entered into an ATM program allowing for the sale of up to $150.0 million in Class A common stock, with no sales made as of December 31, 2024[134] - The Board approved a Reverse Stock Split at a ratio of one-for-twenty, effective October 16, 2024, impacting the total number of issued shares without changing the total number of authorized shares[130] - The total shares of common stock reserved for future issuance as of December 31, 2024, amounted to 9,987,362, including 3,030,595 outstanding stock options and 2,975,491 outstanding restricted stock units[133]