Exact Sciences Corp. (NASDAQ: EXAS), a trailblazer in the field of cancer screening and diagnostic tests, has a lot to celebrate. In the recently concluded third quarter, the company marked several achievements.
Robust Revenue Growth: For the third quarter that ended on September 30, 2023, Exact Sciences reported revenue of $628.3 million, marking a solid increase of 20% from the previous year's figure of $523.1 million. The core revenue, which stands at $624.8 million, saw an even more impressive jump of 23%.
Milestone in Test Deliveries: The company achieved a new record by delivering over 1 million test results. This includes notable figures for their Cologuard® and Oncotype DX® tests.
Uplifted Yearly Guidance: Based on the current performance, Exact Sciences is optimistic about the future. It has increased its full-year 2023 revenue guidance midpoint by $28 million and its adjusted EBITDA guidance midpoint by $25 million.
Screening and Precision Oncology Show Strength: Screening revenue, which majorly includes income from Cologuard tests and PreventionGenetics, touched $472.0 million, up by a significant 31%. Precision Oncology, on the other hand, which constitutes laboratory service revenue from global Oncotype DX and therapy selection tests, recorded a revenue of $156.3 million. This reflects a growth of 3%, or 5%, when considering core revenue.
Operational Highlights: There are other noteworthy financial details from the quarter:
The company saw other operating income of $72.0 million, buoyed by the sale of the Oncotype DX Genomic Prostate Score Test.
Exact Sciences' gross margin stood at 70%, but when excluding the amortization of acquired intangible assets, the non-GAAP gross margin was 73%.
The company managed to turn things around by reporting a net income of $0.8 million. This contrasts sharply with the net loss of $148.8 million they suffered in the same period the previous year.
EBITDA for the quarter was $61.2 million, and adjusted EBITDA was $56.3 million.
Looking Ahead to 2023
Exact Sciences predicts its revenue for 2023 to lie between $2.476 billion to $2.486 billion. This forecast has been revised upwards from the previous range of $2.441 billion to $2.466 billion.
Kevin Conroy, the CEO and chairman of Exact Sciences, expressed his pride in the company's unwavering dedication to enhancing global cancer care. He commended his team's efforts in reaching more patients than ever before and emphasized the company's mission to make their tests the go-to choice for both patients and healthcare professionals worldwide.
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Why This Is Important for Retail Investors
Indicator of Company Health: The robust growth in revenue, coupled with the company's ability to deliver a record number of test results, signals that Exact Sciences is in a strong financial position. For retail investors, this could indicate a potentially stable stock value in the near term.
Turnaround from Previous Losses: The company's transition from a net loss in the previous year to a net income in this quarter showcases its ability to bounce back and manage its operations effectively. This resilience is a positive sign for investors looking for companies with sound management and recovery strategies.
Uplifted Yearly Guidance: Exact Sciences' decision to raise its full-year guidance indicates its confidence in sustained growth. This can be a green light for retail investors, hinting at the company's bullish outlook for the rest of the year.
Diversified Revenue Streams: The substantial revenue from both Screening and Precision Oncology sectors suggests that the company is not reliant on a single income stream. A diversified revenue base can often mean reduced risk, making the company a potentially safer bet for retail investors.
Company's Growth Trajectory: With the revised and increased forecast for 2023, it's evident that Exact Sciences is on an upward trajectory. Investing in companies with strong growth potential can lead to significant returns for retail investors in the future.
Read What Others Are Saying
Exact Sciences: Q3 Press Release