Exact Sciences Announces Fourth Quarter 2023 Results

Reports record revenue, generates positive free cash flow, expects 2024 revenue of $2.810–$2.850 billion.

Fourth quarter and 2023 highlights

• Total fourth quarter revenue of $647 million, an increase of 17%, or 18% on a core revenue basis, with Screening revenue of $487 million and Precision Oncology revenue of $160 million.
• Total 2023 revenue of $2.50 billion, an increase of 20%, or 24% on a core revenue basis, with Screening revenue of $1.865 billion and Precision Oncology revenue of $629 million.
• Fourth quarter cash provided by operating activities was $70 million and free cash flow was $35 million.

MADISON, Wis., Feb. 21, 2024 — Exact Sciences Corp. (Nasdaq: EXAS), a leading provider of cancer screening and diagnostic tests, today announced that the company generated revenue of $647 million for the fourth quarter of 2023 and $2.50 billion for the full year of 2023, both ended December 31, 2023.

“The Exact Sciences team advanced our mission to help eradicate cancer by testing a record number of patients with Cologuard® and Oncotype DX® in the fourth quarter, leading to strong financial results,” said Kevin Conroy, chairman and CEO of Exact Sciences. “Over the past decade, we have built a world-class team and unrivaled platform that is fueling predictable, profitable growth and powering the next wave of innovative cancer diagnostics to make a profound difference in the fight against cancer.”

Fourth quarter 2023 financial results

For the three-month period ended December 31, 2023, as compared to the same period of 2022 (where applicable):

• Total revenue was $646.9 million, an increase of 17 percent, or 18 percent on a core revenue basis.
• Screening revenue was $486.7 million, an increase of 21 percent.
• Precision Oncology revenue was $160.2 million, an increase of 12 percent, or 11 percent on a core revenue basis.
• Gross margin including amortization of acquired intangible assets was 70 percent, and non-GAAP gross margin excluding amortization of acquired intangible assets was 73 percent.
• Net loss was $49.8 million, or $0.27 per share, compared to a net loss of $127.7 million, or $0.72 per share.
• EBITDA was $11.7 million and adjusted EBITDA was $49.7 million.
• Cash provided by operating activities was $69.5 million and free cash flow was $34.6 million.
• Cash, cash equivalents, and marketable securities were $777.6 million at the end of the quarter.

Screening primarily includes laboratory service revenue from Cologuard tests and PreventionGenetics. Precision Oncology includes laboratory service revenue from global Oncotype DX and therapy selection tests.

2024 revenue outlook

The company anticipates revenue of $2.810–$2.850 billion during 2024, assuming:

• Screening revenue of $2.155–$2.175 billion, and
• Precision Oncology revenue of $655–$675 million.

Non-GAAP disclosure

In addition to the company’s financial results determined in accordance with U.S. GAAP, the company provides non-GAAP measures that it determines to be useful in evaluating its operating performance and liquidity. The company presents EBITDA, adjusted EBITDA, non-GAAP gross margin, non-GAAP gross profit, core revenue, and free cash flow. EBITDA and adjusted EBITDA consist of net loss after adjustment for those items shown in the table below. The company defines non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, respectively, excluding amortization of acquired intangible assets. The amortization of acquisition-related intangible assets used in the calculation of non-GAAP gross profit and non-GAAP gross margin pertains only to the amortization associated with developed technology acquired and recorded through purchase accounting transactions. The amortization of these intangible assets will recur in future periods until such intangible assets have been fully amortized.

Core revenue is calculated to adjust for recent acquisitions and divestitures, COVID-19 testing revenue, and foreign currency exchange rate fluctuations. To exclude the impact of changes in foreign currency exchange rates from the prior period under comparison, the company converts the current period non-U.S. dollar denominated revenue using the prior year comparative period exchange rates. The company considers free cash flow to be a liquidity measure and is calculated as net cash used in or provided by operating activities, reduced by purchases of property, plant, and equipment.

Management believes that presentation of non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the company’s core operating results and comparison of operating results across reporting periods. The company uses this non-GAAP financial information to establish budgets, manage the business, and set incentive and compensation arrangements. The company believes free cash flow provides useful information to management and investors since it measures the ability to generate cash from operations. Non-GAAP financial information is presented for supplemental information only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP.

Fourth quarter conference call & webcast

Company management will host a conference call and webcast on Wednesday, February 21, 2024, at 5 p.m. ET to discuss fourth quarter and full-year 2023 results. The webcast will be available at exactsciences.com. Domestic callers should dial 888-330-2384 and international callers should dial 240-789-2701. The access code for both domestic and international callers is 4437608. A replay of the webcast will be available at exactsciences.com. The webcast, conference call, and replay are open to all interested parties.

About Cologuard

The Cologuard test was approved by the FDA in August 2014, and results from Exact Sciences’ prospective 90-site, 10,000-patient pivotal trial were published in the New England Journal of Medicine in March 2014. The Cologuard test is included in the American Cancer Society’s 2018 colorectal cancer screening guidelines and the recommendations of the U.S. Preventive Services Task Force (2021) and National Comprehensive Cancer Network (2016). The Cologuard test is indicated to screen adults 45 years of age and older who are at average risk for colorectal cancer by detecting certain DNA markers and blood in the stool. Do not use the Cologuard test if you have had precancer, have inflammatory bowel disease or certain hereditary syndromes, or have a personal or family history of colorectal cancer. The Cologuard test is not a replacement for colonoscopy in high-risk patients. The Cologuard test performance in adults ages 45–49 is estimated based on a large clinical study of patients 50 and older. The Cologuard test performance in repeat testing has not been evaluated.

The Cologuard test result should be interpreted with caution. A positive test result does not confirm the presence of cancer. Patients with a positive test result should be referred for colonoscopy. A negative test result does not confirm the absence of cancer. Patients with a negative test result should discuss with their doctor when they need to be tested again. Medicare and most major insurers cover the Cologuard test. For more information about the Cologuard test, visit cologuardtest.com. Rx only.

About Exact Sciences’ Precision Oncology portfolio

Exact Sciences’ Precision Oncology portfolio delivers actionable genomic insights to inform prognosis and cancer treatment after a diagnosis. In breast cancer, the Oncotype DX Breast Recurrence Score® test is the only test shown to predict the likelihood of chemotherapy benefit as well as recurrence in invasive breast cancer. The Oncotype DX test is recognized as the standard of care and is included in all major breast cancer treatment guidelines. The OncoExTra™ test applies comprehensive tumor profiling, utilizing whole exome and whole transcriptome sequencing, to aid in therapy selection for patients with advanced, metastatic, refractory, relapsed, or recurrent cancer. With an extensive panel of approximately 20,000 genes and 169 introns, the OncoExTra test is one of the most comprehensive genomic and transcriptomic panels available today. Exact Sciences enables patients to take a more active role in their cancer care and makes it easy for providers to order tests, interpret results, and personalize medicine by applying real-world evidence and guideline recommendations. To learn more, visit precisiononcology.exactsciences.com.

About PreventionGenetics

Founded in 2004 and located in Marshfield, Wisconsin, PreventionGenetics is a CLIA and ISO 15189:2012 accredited laboratory. PreventionGenetics delivers clinical genetic testing of the highest quality at fair prices with exemplary service to people around the world. PreventionGenetics has 25 PhD geneticists on staff and provides tests for nearly all clinically relevant genes including the comprehensive germline whole genome sequencing test, PGnome®, and whole exome sequencing test, PGxome®. PreventionGenetics was acquired by Exact Sciences in December 2021.

About Exact Sciences Corp.

Exact Sciences is a leading provider of cancer screening and diagnostic tests, giving patients and health care professionals the clarity needed to take life-changing action earlier. Building on the success of the Cologuard and Oncotype DX tests, Exact Sciences is investing in its pipeline to develop innovative solutions for use before, during, and after a cancer diagnosis. For more information, visit exactsciences.com, follow Exact Sciences on X (formerly Twitter) @ExactSciences, or find Exact Sciences on LinkedIn and Facebook.

Forward-Looking Statements

This news release contains forward-looking statements concerning our expectations, intentions, and strategies regarding the future. These statements are based on assumptions made as of the date hereof and are subject to risks and uncertainties that could cause actual results to differ materially. Important risk factors include our ability to market our products successfully, maintain reimbursement, manage competition, comply with regulations, protect intellectual property, achieve anticipated synergies from acquisitions, and retain key personnel. Other important risks and uncertainties are described in the Risk Factors sections of our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statement.

Media Contact:
Morry Smulevitz
msmulevitz@exactsciences.com
608-345-8010

Investor Contact:
Nathan Harrill
investorrelations@exactsciences.com
608-535-8659