NeoGenomics(NEO) - 2024 Q4 - Annual Report

Revenue and Financial Performance - Revenue increased by 11.6% compared to 2023[248] - Consolidated revenue for the year ended December 31, 2024, was $660,566,000, representing an increase of 11.6% compared to $591,643,000 in 2023[273] - Net revenue for 2024 reached $660,566, an increase of 11.7% from $591,643 in 2023[329] - Gross profit for 2024 was $290,100,000, with a gross profit margin of 43.9%, up from 41.3% in 2023[275] - The net loss for 2024 was $78,726, a reduction from the net loss of $87,968 in 2023, indicating improved financial performance[329] - Adjusted EBITDA improved by $36.1 million to positive $39.6 million compared to 2023[248] - Adjusted EBITDA for 2024 was $39,608,000, significantly higher than $3,486,000 in 2023, reflecting improved operational performance[296] Operational Efficiency and Cost Management - Cost of revenue for 2024 was $370,466,000, which is 56.1% of revenue, down from 58.7% in 2023, indicating improved efficiency[275] - General and administrative expenses increased to $259,737,000 in 2024, accounting for 39.3% of revenue, down from 41.1% in 2023[279] - Research and development expenses rose to $31,159,000 in 2024, representing 4.7% of revenue, compared to 4.6% in 2023[281] - Sales and marketing expenses increased to $84,652,000 in 2024, which is 12.8% of revenue, up from 12.0% in 2023[283] - Restructuring charges decreased to $6,658,000 in 2024, representing 1.0% of revenue, down from 2.0% in 2023[286] - The company is committed to improving operational efficiency and achieving positive cash flow from operations[249] Cash Flow and Liquidity - For the year ended December 31, 2024, cash provided by operating activities was $7.0 million, a $9.0 million increase compared to cash used of $2.0 million in 2023, primarily driven by an improvement in gross profit of $45.5 million[299] - Cash provided by investing activities was $12.9 million for the year ended December 31, 2024, a significant decrease from $76.7 million in 2023, due to a $58.3 million decrease in sales and maturities of marketable securities[300] - As of December 31, 2024, the company had $367.0 million in cash and cash equivalents, along with $19.8 million in marketable securities, sufficient to support operational liquidity needs for at least the next 12 months[302] - The net change in cash and cash equivalents for the year ended December 31, 2024, was $24.5 million, compared to a net change of $79.3 million in 2023[298] - The company experienced a $16.1 million reduction in cash used by operating activities year-over-year, attributed to improved operating results[299] Investments and Future Plans - The company plans to invest in information technology and automation to drive down testing costs[247] - The company anticipates capital expenditures for the year ended December 31, 2025, to be in the range of $30 million to $35 million, following approximately $41.1 million spent on capital equipment, software, and leasehold improvements in 2024[305] Market and Regulatory Environment - The FDA announced a final rule on the regulation of Laboratory Developed Tests (LDTs) on April 29, 2024, impacting the regulatory landscape[252] - Inflation did not have a material effect on the company's business during the years ended December 31, 2024, 2023, and 2022, but ongoing inflationary pressures may impact future financial results[307] - The company does not hedge foreign currency exchange risks, which primarily involve operations in the United Kingdom, and currently does not consider these risks significant[311] Segment Performance - The combined segment accounted for 100% of consolidated revenue in 2024, with Clinical Services contributing 84% and Advanced Diagnostics 16% in 2023[264] - The company simplified its operational approach by consolidating its two primary segments into a single segment in Q4 2024[1] Stock and Debt Management - The Company adopted the 2023 Equity Incentive Plan, allowing for the issuance of up to 29.6 million shares of common stock for equity incentives[436] - The Company completed the sale of $201.3 million of 2025 Convertible Senior Notes at a stated interest rate of 1.25%, with net proceeds of approximately $194.5 million after discounts and expenses[426] - The effective interest rate on the 2025 Convertible Notes is 1.96%, which includes the interest and amortization of the debt discount and issuance costs[434] - As of December 31, 2024, the total long-term debt, net, is $340.335 million, compared to $538.198 million in 2023, indicating a significant reduction in long-term debt[412]