Exact Sciences Announces Third-Quarter 2023 Results

Reports record revenue, delivers more than a million test results, raises full-year guidance

Third-quarter 2023 highlights

• Total third quarter revenue of $628 million, an increase of 20%, or 23% on a core revenue basis.
• Delivered more than 1 million test results, including a record for Cologuard® and Oncotype DX® tests.
• Full-year 2023 revenue and adjusted EBITDA guidance midpoints raised by $28 million and $25 million, respectively.

MADISON, Wis., November 1, 2023 — Exact Sciences Corp. (Nasdaq: EXAS), a leading provider of cancer screening and diagnostic tests, today announced that the company generated revenue of $628.3 million for the third quarter ended September 30, 2023, compared to $523.1 million for the same period of 2022.

“Exact Sciences' third-quarter results reflect our unwavering dedication to improving cancer care on a global scale,” said Kevin Conroy, chairman and CEO. “Our team delivered answers to more patients than ever before, giving us confidence to raise our full-year revenue and adjusted EBITDA guidance. To achieve our mission to eradicate cancer, we’ll continue to focus on making our current and future tests the top choice for patients and healthcare professionals globally.”

Third-quarter 2023 financial results

For the three-month period ended September 30, 2023, as compared to the same period of 2022 (where applicable):

• Total revenue was $628.3 million, an increase of 20 percent.
• Core revenue was $624.8 million, an increase of 23 percent.
• Screening revenue was $472.0 million, an increase of 31 percent.
• Precision Oncology revenue was $156.3 million, an increase of 3 percent, or 5 percent on a core revenue basis.
• Other operating income (loss) was $72.0 million, which includes a gain related to the sale of the Oncotype DX Genomic Prostate Score Test.
• 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 income was $0.8 million, or $0.00 per basic and diluted share, compared to a net loss of $148.8 million, or $0.84 per basic and diluted share.
• EBITDA was $61.2 million and adjusted EBITDA was $56.3 million.
• Cash provided by operating activities was $24.4 million and free cash flow was ($0.8) million, including a one-time payment of $32.5 million for a previously disclosed and reserved legal matter.
• Cash, cash equivalents, and marketable securities were $734.4 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.

2023 outlook

The company anticipates revenue of $2.476–$2.486 billion during 2023, assuming:

• Screening revenue of $1.848–$1.853 billion,
• Precision Oncology revenue of $622–$627 million, and
• COVID-19 testing revenue of $6 million.

Revenue guidance has been raised from the previously expected range of $2.441–$2.466 billion, which assumed:

• Screening revenue of $1.820–$1.835 billion,
• Precision Oncology revenue of $615–$625 million, and
• COVID-19 testing revenue of $6 million.

Third-quarter 2023 conference call & webcast

Company management will host a conference call and webcast on Wednesday, November 1, 2023, at 5 p.m. ET to discuss third-quarter 2023 results. The webcast will be available at exactsciences.com. Domestic callers should dial 888-330-2384 and international callers should dial +1-240-789-2701. The access code for both domestic and international callers is 4437608.

An archive of the webcast will be available at exactsciences.com. A replay of the conference call will be available by calling 800-770-2030 domestically or +1-647-362-9199 internationally. The access code for the replay of the call is 4437608. The webcast, conference call, and replay are open to all interested parties.

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 company’s business, and set incentive and compensation arrangements. The company believes free cash flow provides useful information to management and investors since it measures our ability to generate cash from business operations. Non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, 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.

About Cologuard

The Cologuard test was approved by the FDA in August 2014, and results from Exact Sciences’ prospective 90-site, point-in-time, 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 (DNA) and transcriptomic (RNA) 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 powerful and 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.

A leading provider of cancer screening and diagnostic tests, Exact Sciences gives patients and healthcare professionals the clarity needed to take life-changing action earlier. Building on the success of the Cologuard® and Oncotype® 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 known as Twitter) @ExactSciences, or find Exact Sciences on LinkedIn and Facebook.

Forward-Looking Statements

This news release contains forward-looking statements concerning our expectations, intentions, beliefs, or strategies regarding the future. These forward-looking statements are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties that could cause actual results, conditions, and events to differ materially from those anticipated. Therefore, you should not place undue reliance on forward-looking statements. Examples of forward-looking statements include, among others, statements regarding expected future operating results, development of new or improved products and services, strategies, capabilities, and anticipated benefits of acquisitions, including estimated synergies and other financial impacts.

Important factors that could cause actual results, conditions, and events to differ materially from those indicated in the forward-looking statements include, among others: our ability to market our products successfully; acceptance of our products and services by patients and healthcare providers; our ability to meet demand; reliance on certain suppliers; willingness of payers to reimburse; competition; changes in legislation or regulation; outcomes of validation studies and trials; ability to manage international expansion; macroeconomic conditions such as inflation or currency fluctuation; integration of acquisitions; litigation outcomes; and retention of key personnel. Additional risks are described in the Risk Factors sections of our most recent Annual Report on Form 10-K and 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
Erik Holznecht
investorrelations@exactsciences.com
608-800-6605