Exact Sciences(EXAS)2023-10-31 16:00Revenue 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]