23andMe Holding Co (ME) Q2 2024 Earnings Call Highlights: Navigating Challenges with Strategic ...

GuruFocus.com11-13

Revenue: $44 million, a decrease of approximately 12% year-over-year. Gross Profit: $22 million, representing a 3% increase over the prior year. Operating Expenses: $84 million, down from $101 million...

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GuruFocus has detected 6 Warning Signs with ME.\n\nRelease Date: November 12, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\n23andMe Holding Co (NASDAQ:ME) has reconstituted its board of directors with three new independent directors, fulfilling NASDAQ listing standards.\nThe company is undertaking a business restructuring to streamline operations and reduce costs, which is expected to save at least $35 million annually.\n23andMe has launched new initiatives in preventive health, including a comprehensive longevity platform and weight management studies.\nThe company has increased its recurring revenue streams, with more than 21% of total revenue in Q2 being recurring, up from 9% in the prior year.\nSignificant progress has been made in genetic research, including a large study on sickle cell traits and promising data from clinical stage immuno-oncology programs.\n\n Negative Points \n\nRevenue for the quarter decreased by approximately 12% compared to the same period in the prior year, primarily due to lower consumer services and research services revenue.\nThe company is discontinuing further development of all therapeutic programs and reducing its workforce by approximately 40%.\n23andMe's financial statements include a going concern disclosure, indicating the need for additional liquidity to fund expenditures and commitments.\nThe company reported a net loss of $59 million for the quarter, although this was an improvement from the $75 million loss in the prior year.\nCash and cash equivalents decreased significantly from $216 million as of March 31, 2024, to $127 million at the end of the quarter.\n\n Q & A Highlights \nQ: What is the plan for recovery? A: Anne Wojcicki, CEO, explained that the company is focusing on regaining compliance with NASDAQ, becoming more sustainable by deprioritizing therapeutics, cutting expenses, and growing the business through subscriptions and database opportunities.\nQ: Why was the 1-for-20 reverse stock split necessary? A: Joseph Selsavage, Interim CFO, stated that the reverse stock split was necessary to regain compliance with NASDAQ's listing requirement of a minimum $1 per share bid price, which was approved by stockholders.\nQ: What steps are being taken to make the company profitable? A: Joseph Selsavage highlighted the focus on prioritizing subscription products with recurring revenue, growing research partnerships, reducing costs through restructuring, and pausing therapeutic assets to achieve significant annual cost savings.\nQ: What goals are you looking to complete in 2025? A: Anne Wojcicki outlined goals including growing subscriptions, developing the database business to enhance genetic utilization in clinical trials, and out-licensing therapeutic programs for continued development.\nQ: How is 23andMe addressing the financial challenges it faces? A: Joseph Selsavage mentioned that the company is managing operational expenses, implementing cost-cutting measures, and considering raising additional capital to improve its financial condition and liquidity position.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483402855"}