Personalis(PSNL) - 2022 Q1 - Quarterly Report

Financial Performance - Revenue for Q1 2022 was $15,227,000, a decrease of 27% compared to $20,881,000 in Q1 2021[123] - The net loss for Q1 2022 was $28,209,000, compared to a net loss of $12,404,000 in Q1 2021, representing a 128% increase in losses[123] - Total revenue for the first quarter of 2022 was $15.2 million, a decrease of 27% compared to $20.9 million in the same period of 2021[125] - Revenue from VA MVP decreased by $9.7 million to $3.5 million, a decline of 73% year-over-year, while revenue from all other customers increased by 53% to $11.7 million[125][126] - Total costs and expenses increased by 30% to $43.5 million in Q1 2022, compared to $33.4 million in Q1 2021[130] Expenses - Cost of revenue for Q1 2022 was $10,949,000, down from $13,454,000 in Q1 2021, reflecting a 19% decrease[123] - Research and development expenses increased to $17,098,000 in Q1 2022, up 80% from $9,496,000 in Q1 2021[123] - Selling, general and administrative expenses rose to $15,486,000 in Q1 2022, compared to $10,421,000 in Q1 2021, marking a 48% increase[123] - Research and development expenses rose by 80% to $17.1 million, primarily due to new service and product development and increased hiring[132] Cash and Investments - Cash and cash equivalents, along with short-term investments, totaled $266.5 million as of March 31, 2022, down from $287.1 million at the end of 2021[138] - The company incurred a net loss of $28.2 million in Q1 2022, with cash used in operating activities amounting to $11.4 million[143] - As of March 31, 2022, the company had cash and cash equivalents of $91.6 million and short-term marketable debt securities of $175.0 million[157] - The company plans to seek additional funding through equity offerings or debt financing if cash flow from operations is insufficient to meet liquidity requirements[140] Capital Expenditures - Capital expenditures are expected to be between $50 million and $55 million in 2022, primarily for facility renovations and laboratory equipment[148] Revenue Sources - The cumulative value of task orders from the VA MVP is approximately $186 million, with $181.6 million recognized as revenue as of March 31, 2022[105] - Revenue from Natera, Inc. contributed $3.9 million to the increase in revenue from all other customers, driven by strong demand for NeXT Platform services[128] - The company anticipates that revenue from all other customers will constitute the majority of total revenue in fiscal year 2022[129] Operational Capacity - The company has sequenced over 250,000 human samples, including more than 150,000 whole human genomes[104] - The company has the capacity to sequence and analyze approximately 200 trillion bases of DNA per week, which is larger than most cancer genomics companies[104] - The company plans to focus primarily on cancer, given the strong growth experienced in this sector in 2021 and early 2022[106] Headquarters and Expansion - The new headquarters in Fremont, California, will support expansion in laboratory capacity and research and development efforts[107] Financial Policies - There have been no material changes to the company's critical accounting policies and estimates compared to the previous fiscal year[154] - The company’s critical accounting policies include revenue recognition, stock-based compensation, and leases, which have the greatest potential impact on financial statements[153] - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions that may differ from actual results[152] Interest Rate and Currency Risk - A hypothetical 100 basis point increase in interest rates would result in an approximate $0.9 million decline in the fair value of marketable debt securities[157] - The company does not enter into investments for trading purposes and has not used derivative financial instruments to manage interest rate risk exposure[158] - The majority of the company's revenue and expenses are transacted in U.S. dollars, with minimal impact from foreign currency movements to date[159] Customer Deposits and Loans - Customer deposits amounted to approximately $3.4 million as of March 31, 2022, with $2.8 million from a single customer[151] - The company entered into two noninterest bearing loans totaling $5.6 million for the purchase of computer hardware and software, with payments of $1.86 million due in 2022 and 2023[151]