\nNatera, Inc. (NASDAQ: NTRA), a global leader in cell-free DNA testing, today reported financial results for the first quarter ended March 31, 2023.<\/p>\n
Recent Strategic and Financial Highlights<\/b><\/p>\n \n\u201cWe are off to an excellent start in 2023,\u201d said Steve Chapman, Natera\u2019s Chief Executive Officer. \u201cWe published important new data sets in the women\u2019s health and oncology settings, received the first commercial coverage policies for Signatera, and secured Medicare reimbursement for Prospera in heart transplantation. Our performance demonstrates the strength of our technology, and we look forward to helping millions of additional patients and advancing our mission to transform the management of disease.\u201d<\/p>\n First Quarter Ended March 31, 2023 Financial Results<\/b><\/p>\n \nTotal revenues were $241.8 million in the first quarter of 2023, compared to $194.1 million for the first quarter of 2022, an increase of 24.5%. Product revenues were $237.8 million in the first quarter of 2023, compared to $190.0 million in the first quarter of 2022, an increase of 25.2%. The growth in product revenues was driven by an increase in test volumes compared to the first quarter of 2022.<\/p>\n \nNatera processed approximately 626,200 tests in the first quarter of 2023, including approximately 607,700 tests accessioned in its laboratory. This compares to approximately 489,300 tests processed in the first quarter of 2022, including approximately 473,200 tests accessioned in its laboratory, an increase of 28.0%.<\/p>\n \nIn the three months ended March 31, 2023, Natera recognized revenue on approximately 583,400 tests for which results were reported to customers in the period (tests reported), including approximately 566,000 tests reported from its laboratory, compared to approximately 456,100 tests reported, including approximately 440,900 tests reported from its laboratory, in the first quarter of 2022, an increase of 27.9% for the quarter.<\/p>\n \nGross profit* for the three months ended March 31, 2023 and 2022 was $93.6 million and $90.9 million, respectively, representing a gross margin of 38.7% and 46.8%. Natera had lower margins in the first quarter of 2023 compared to the first quarter of 2022 primarily due to increased labor, overhead costs, and third-party services driven by volume growth and product support.<\/p>\n \nTotal operating expenses, representing research and development expenses and selling, general and administrative expenses, for the first quarter of 2023 were $231.9 million, compared to $228.0 million in the same period of the prior year, an increase of 1.7%. The increase was primarily driven by additional headcount to support the Company\u2019s expansion, volume growth, and product development. Loss from operations for the first quarter of 2023 was $138.3 million, compared to $137.1 million for the same period of the prior year.<\/p>\n \nThe Company reported a net loss for the first quarter of 2023 of $136.9 million, or ($1.23) per diluted share, compared to a net loss of $138.6 million, or ($1.45) per diluted share, for the same period in 2022. Weighted average shares outstanding were approximately 111.8 million in the first quarter of 2023, compared to 95.6 million in the first quarter of the prior year.<\/p>\n \nAs of March 31, 2023, Natera held approximately $812.0 million in cash, cash equivalents, short-term investments and restricted cash, compared to $898.4 million as of December 31, 2022. As of March 31, 2023, Natera had a total outstanding debt balance of $362.4 million, comprised of $80.4 million including accrued interest under its line of credit with UBS at a variable interest rate of 30-day SOFR plus 121 basis points and a net carrying amount of $282.0 million under its seven-year convertible senior notes issued in April 2020. The gross principal balance outstanding for the convertible senior notes was $287.5 million as of March 31, 2023.<\/p>\n Financial Outlook<\/b><\/p>\n \nNatera is raising its expectations for 2023 total revenue from $980 million to $1.0 billion to a new range of $995 million to $1.015 billion, and continues to expect 2023 gross margin to be approximately 41% to 44% of revenues; selling, general and administrative costs to be approximately $510 million to $540 million; research and development costs to be $325 million to $345 million, and net cash consumption to be approximately $300 million to $325 million**.<\/p>\n \n* Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.<\/p>\n \n** Cash consumption is calculated as the sum of GAAP net cash used by operating activities (estimated for 2023 to be approximately $250 million to $275 million) and GAAP net purchases of property and equipment (estimated for 2023 to be approximately $50 million).<\/p>\n\n
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