23andMe Holding (ME) 8 Aug 242025 Q1 Earnings call transcript

Hello, and welcome to 23andMe's Fiscal Year 2025 First Quarter Financial Results Conference Call.

As a reminder, this call is being recorded. [Operator Instructions] I would now like to turn the call over to Ian Cooney, Senior Director of Investor Relations at 23andMe, to lead up the call. Thank you. Please go ahead.

you. Thank

be quarter available I release regarding go reporting future we solely predictions Forward-Looking periods results the you now us. webcast a call our limited Please website found the SEC's note are press begin, are to forward-looking during find that investors.XXandme.com entitled our everyone A future to, of but for statements. impact for not discussion are and not applies management's on our that encourage will press in Statements XXXX. These our the available on this website. issued call. or statements first on statements encourage we based today's which certain to Also, to can to also refer We to Section made website release, financial is for please replay information including, outlook Before factors the performance. to our be our that of fiscal matters of numerous review earlier this may which historical today facts SEC filings, that to

We also our reconciliation of found on U.S. Important discuss measures. and be release. measures in non-GAAP GAAP may earnings information to our these use certain

for Low, call today Head Executive Anne Joe Jennifer will Chief and over of Joining and us on Therapeutics our to call I'd and our us Officer to Financial join Officer. are Q&A. like Accounting Co-Founder; Wojcicki, turn our Joe. Selsavage, Chief Development, now our the

call is fiscal first last what said our the the Hello, XXXX call, focus quarter Reiterating Ian. of the everyone. we you, results. Thank on on

Anne. be on on reviewing now focused to or on private call responding any matters the turn to alternatives. or like regarding company will release, its questions over this to We will earnings solely and call. This not proposals aforementioned to we potential and the call comment the process addressing strategic ongoing of is the not I'd

Hello, everyone. Joe. you, Thank

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that their can remain help also focus focused to longitudinal add We features we improving members our on to on creating membership continue services health. as our value

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is continue our over members monitor biological age their Health We the feature of time. body proprietary with offering a how to help build physiologically to aging out Total addition

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we quarter, membership from revenue saw This year. growth the meaningfully improved previous

retention member which believe LTV increased better telehealth, saw and also rates should in we all upgrade metrics, of We persist. higher

their trajectories Our sustainable help our membership also health effective while enabling time to offerings are a the way for over customers scalable, model. us most change business

by encouraged tangible of are we signs progress. So these

cancer the genetics that to lung and research patient-reported collaborated reduction genetics research, with research comprehensive XX to better study in heritable launch cancer. improve to the aims a of Through advocacy data in The over we we to care. of a the data study order in lung with detection, to database Moving open business. people to aims source lung cancer understand lung advance collectively organizations hope risk build month, and genetic cancer. Last this

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a innovation to developing the suite we data consumer models actively both On of AI enhance our are research and front, businesses.

to our about database. developing We new insights genome proprietary models continue novel unlock using significant make the human in to progress AI

target how therapeutic accelerate discovery. to These database business demonstrating XXandMe's more size initiatives better of to to diseases be recommendations genetic effective published studies, a association linked and and personalized the of research helping language to leveraged preprint interpret deliver data scale health phenotypes. leverage pinpoint large unique variety models accurately genes Our recently more can a and

ASCO April our Moving at present Therapeutics in us data saw QX to AACR business. June. both and in

the pleased to as XXME-XXX to with cancer inhibiting which be progress therapeutic of demonstrate for continues potential monotherapy, patients. continue CDXXXRX in We

present of also XXME-XXXX biomarker a care with biological and agents we for patients. with additional cancer genetics to efficacy. We by AACR therapeutic rationale the profile added at and presented of sharing benefit year. At potential combination potential as We at for points we used emerging opportunity later data on bringing this strategies standard earlier are scientific plan tolerability program the clinic. and biomarker safety in conferences AACR, monotherapy clinical also into to our which the have encouraged associated upcoming seeing continued year, this of are the commonly XXME-XXX, evidence as XXME-XXX CDXXX Further,

disclosed, XXXX. I Phase we in of trial tumor previously have we have sharing study we in look solid to our initiated results that As forward the clinical and oncology,

to our the the Discovery afternoon Therapeutics out Finally, Richards group. elimination acknowledge this I'd as that X-K put Discovery Bill and announcing is of stepping we like of Therapeutics Head down

the has organization. which for team collaborations or change our news in dedication. I does other clear hard insights they Low that Jennifer truly enthusiasm hundreds Therapeutics we targets, Discovery any for XXandMe that or development want and our I to thank Therapeutics pursue X ability discovery led impact team launched clinical today's indicate it database, unique our our Our identified to leverage them leveraging database therapeutic by and original foundation not assets. make Therapeutics and also our work for new their of want to upon were the all

customers investments potential the both still our encouraged in forward positive clinic progress quarter. funding on customer am are efficiencies. profitability in QX, strategically turn the returns with review multiple engagement AI to moving and our operational in and offerings. optimal optimistic And very call to exploring for our that, we and growth about help financial discovery, am for important paths I'll improve are meaningful of Lemonaid, the results We and long-standing initiatives. and membership these by our in the that the I'm and in excited development over drug made investments assets. Overall, Joe rapid on progression to I improving the enabling I

same in July XXXX, the focus in which have businesses. GSK shift The few marketing to quarters, toward value. of primarily conclusion and well operating maintaining improved decrease decrease and to to our as unit the the in telehealth due business, million, of Thank amid Similar sustainable execute cost decrease more year. about XX% a progress and under was term sales, in all prior customer revenue over resulted recent of lower for in year-over-year services ability driven I'm the to last collaboration while was period revenue our of optimism the lifetime reiterate quarter our $XX I'd the profile. Revenue a efficiency both the revenue consumer exclusive in like you, PGS our economics, discipline proud areas Anne's by the was membership margin and as Anne. consumer our discovery on kit our and

longer to decisions that will We gross the and bottom over our margins short were our benefits that and expect and decreases membership in are line continued the services. term by revenue partially offset these growth encouraged providing continue the

Looking accounted primarily same for revenue from for revenue revenue the which quarter. revenue, XX% revenue, total at our derived Research the of partners, composition X% Consumer of research total the of period. represented Services was Data for other approximately

recognizing license we October. reminder, the revenue XXXX the data second from fiscal to half year a begin in last expect As the announced of GSK

revenue, year. the was quarter in gross was by driven XX% offset to decrease representing margins. for decrease research Services declines a Research data in helping the primarily period and [indiscernible] revenue from by $XX membership improvements telehealth same the lower Our million, profit prior over the The margins,

million in expenses following a driven the compensation quarter, reductions ended Turning lower to operating XXXX, and a expenses in from our was reduction the as was for $XX of in same officer. the which $XXX Therapeutics-related a Lemonaid a collaboration to lower prior of expenses. the There quarter GSK and also in former expenses Total a the personnel-related prior reduction result by in months for June to prior taken due million noncash quarters X spend year, departure expense period for was workforce a stock-based year decrease operating XX, of programs. $XX the R&D significant million compared

cost with drive continue pleased efficiencies in [ areas our tightly are for to look manage to coming to more We quarters. our our spend and efforts ] in base

loss driven the net the $XX the bottom Net collaboration GSK a as compensation previously. line. prior was the mentioned of for the mainly million. significant loss same taken and programs, improvement The at a period prior in stock-based the year for Looking loss in net quarter reduction was compared quarter first by expense million the $XXX in in year to

EBITDA. Next, adjusted our

adjusted with how on our a same define $XX period ability pleased as to focused compared adjusted we adjusted EBITDA $XXX XX, EBITDA million and compared in a was quarter the and details ended Total EBITDA discipline profitability as revenue, in our And release. million, For to company-wide we $XX meaningful cash EBITDA in first we with Achieving drive are prioritization. cost while remains as find on decline to GAAP, and key quarter press to working encouraged the the the also Despite diligently the earnings to we leverage well are prior for cash million deficit investment progress, of reconciliations through for to the equivalents XXXX. $XXX see our million please opportunities improve deficit adjusted corresponding margins. We year. goal. March are by

in We our first of be and the targeted are XXandMe's we level investment quarter. cash believe ROI the in judicious with up, growth high the made progress to initiatives. Wrapping pleased plans continue current usage cash with for supports

we in the value base. access, to and future incredibly about to add questions. and our company to ability open and human our the services, that, it continue seeing With let's up improvements of to from membership better understand benefit cost metrics, our and I'm We our are optimistic genome. people the are innovation help managing

[Operator And a have the with of line question Lebowitz from Citi. Instructions] we David

David. for I on few a our on John It's end. got

with starting So Health. Total

us whether might out? of what if roll a has and needs to be you on not is not, -- when to or existing Total launching can terms this Health, give to And ready that else customers? just been launched update In done status be

that customers yet. Yes, I'll take I not are out is has something to rolled is that working Total works It we that. definitely existing one. in the can that Health on. take

remember, you If planned we Total with to that our Health, cyber overlapped when incident. originally launch

something it's about So about it for the and it. we relaunch fall we're has launch, thinking been really a soft how that

else engineering was anything point, be... hurdle just highlighted? Okay. is more previously an is to there this And at Or as that needs it

a have there's and also mean It's engineering number question we up. I launches of just a hurdles. coming -- a priorities of of number

right So right in about finding it's just the priorities time. the

Got it.

economics. Okay. sort membership Great. of space was at highlighted also point? I at terms of maxed all? efficiency better there out expansion, also any is left know Or and pushing marketing price sales And in that continue in lever margin this to unit the resulting is just previously I you've wondering,

that to I pleased Maybe we've think going increasing retention increased well, and we and our subscription on on product forward. worked $XX subscriptions ASPs on for to with on pricing and efficiencies for XXandMe+. we'll the our that even with the continue the $XX have as uptick We've from actually the seen marketing spend also upgrades our pricing. and kits look really we're increased

I margins think opportunities improve it to subscription highlight the good high us for I margin market we overall see [ margins. really help extremely us and want is and some there Yes, for product business. will our ]. in also

it. Got

of get you year-over-year? But can we year -- you rest given much ahead say and these So different all don't extent the XXXX, I -- as official this. to sense a can you the with how Net-net fiscal to margins know grow of give variables? can on guidance look that

giving We can this our business. X points in time, I year-over-year, but this over are, percentage that we guidance, at did the margins up grow, PGS say basically, not any in quarter see

significant think for that was I So us.

Got it.

on the -- strategy down. winding group have your terms be Therapeutics will your mentioned internal What sort X does impact your of you assets? In and of for go-forward that decisions Discovery this

take that one. can I

impact doesn't groups. Those So X it. it pretty were different

at, and us by has X there there to develop assets for continue it. also But committed and fund grow our the and continuing to have fund, to funding to portfolio. out it to We and opportunities is to to to an what programs Jennifer clinical look area pretty we're opportunities and team for other now Phase and be continuing immuno-oncology these through to we've that continues is run are looking grow Low, a saying those our been Jennifer Phase is we going us committed at potentially these II I the are

our So team. no Discovery other impact from the downsizing of

it. Got Okay.

strategies. XXX, on So favorable those and well of combination safety position internal might speaking tolerability it that, the profile and assets, you've potential highlighted that for

response is treat inhibitors which what a [ combination filing you've ], a tumors? potential Given your tyrosine shown ASCO, that in such a partial to an thoughts with as tumors neuroendocrine cabo on neuroendocrine are at kinase NDA

Jennifer, want Yes, do that? you take to

at Yes. That's preclinically actively with showed data consistent we AACR, the are that. at looking that and we

is year. what think terms data study will in later from a this possible plan a pattern on also and additional theme We of presenting what's emerging that this for I And you'll see drug.

last to guess I -- point And that and this my question. is

be that like it think data you was at readout frame data, follow-up and benchmark I could ESMO. point? help for readout But would for at the that for what longer-term mentioned success look expectations the can next just that

reflective that on around know, that. is remain As do feel presentations ASCO embargoed, overall our of information the I is we you optimistic But the so can't comment data and that presented upcoming program. at we

any Now for I'll questions. to Ian it over turn further

platform are here from plans company few plan top the read the And private? Question still shareholders. What our there I'll listing is from regain for questions number Say and compliance? NASDAQ a take X you. to Joe. the Thank investors Yes. to Technologies Q&A

want to in NASDAQ that necessary, with ensure still But we split re-compliant. stock of that Prior material to in operating private, execution On And don't take requirements Stockholders shareholder become X. been XXX-day the Annual we until first overall can X. On time we November option to seeking August. cannot of we late improving be the at to with listing compliant the to November question, requirements, Board there focusing compliance from available and Meeting received to which compliant that, this we by achieve comment extension reverse November the on actually we momentum part an this if cannot approval at the NASDAQ profile the is the the operating company We've our plans a before have matter update. we through the become expires become X. for company -- another that -- on on of a are focusing to event to

you. Joe. that of And that plan we're should address watch What Great. One plan? track are operational on executing our can liquidity is upcoming challenges? how the for? to sort What milestones Thank investors for the more you, we

discussing At look our options. that we especially we most and our revenue intend margin also drive to our businesses. actively from to Lemonaid financing increase we're efficiencies drive potential as continue to and PGS research runway continue how to growth we've discussing revenue to shown ways effective also the our are and we're data So drive growth to meaningful operating growth in drive extremely results cash continue And milestones, think finally, continue ways businesses looking is and in that at in to important the and date. for also, to our membership to

stakeholders for other or Anne, Are area? that plans you. to Great. this one's pharmaceutical trials businesses to there clinical engage types with in of facilitate

has. a That's genetics to Clinical exciting definitely the apply and data an trials particularly question. that great XXandMe is area

So look recruiting genotype One probably individuals trials. couple a rare who clinical a of we for at and definitely a is options. specific have

So something with that how we been that deal have on. know a and to that done is quite we we've executing bit

risk recruiting. are quite to be and that's could is area designed clinical understand should populations scores be other the or what using patient right how trials help to be The polygenic interesting

both are are about think then that [indiscernible] recruiting of So to areas those us for partners. one, individuals [indiscernible] areas, exciting helping and second, pharmaceutical

little bit. a there up broke you Anne,

me you Sorry now? Do that. hear about

Yes.

there's able of One to set. is with out the data patients being that clinical areas. for pharmaceutical was specific recruit I our genotypes really saying trials, is So the X

them recruit and studies. potentially who for able we are genotypes So to people identify have rare

pharmaceutical of their right the recruiting clinical for be about they that improve right The their to help be they second could be how trial what trial is study. think better partners who partners, clinical to kind design. And design are using the should patients area -- is to genetics really

where with have focused pharmaceutical partners. those of So both been are we areas

Last Great. one.

color to develop more how we'll some starting AI, on what Given how be on impact deploy we're would the give of how kind to kind some detail AI it the but business? can of you and will plans

an to as world's going that -- companies. our set part a the data of up to data of care have Definitely. set one company is health up future to AI become largest a be was exciting

biology be customers able position improving the we And human that We of management. improving to really as use and disease use our can science contributed for or have as we are in actually disease of well and our our the how process. about understanding therapeutics prevention a great well as AI to think to all as can data discovery data all now actually basic be

preprint our that came in earnings. referenced we So in We press that have release and first the out.

understand So entire the of a it even [indiscernible] able there's and exciting development to potential in genome lot be going [indiscernible]. helps how for is to the therapeutic

end at that. out cut You there couple of last The the of sentences.

I -- us human is [indiscernible] whole the impact AI process. drug time genomics just that see [indiscernible] how trials ] exciting health we help [ it's an understand are clinical I going outcomes think can improve to apply how the and to meaningfully going be Sorry. how discovery to of to we and

I but it. gist We bit we lost you got there, the of a think

think we Say all Operator? I from the that's Technologies. have questions

all participating. today's thanks conference call. This Thank you joining you. us. Thank and for concludes And for ladies gentlemen,

great have now a may Everyone, You day. Goodbye. disconnect.