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EXACT SCIENCES CORP (EXAS)·Q4 2020 Earnings Summary

Executive Summary

  • Q4 2020 revenue was $466.3M, with Screening $249.7M (+9% YoY), Precision Oncology $117.6M, and COVID testing $99.1M; GAAP gross margin 74% and non-GAAP 79% (up 2 pts sequentially). Management reported adjusted EBITDA of $87.9M and diluted EPS of $(2.79), with the net loss driven by the expensing of the Base Genomics acquisition .
  • Management declined full-year 2021 revenue guidance due to COVID; they guided OpEx higher to invest in growth (S&M $800–$850M; G&A $550–$575M; R&D $375–$400M; amortization ~$95M; CapEx ~$125M), and flagged typical seasonal Q1 screening sequential decline, modest Q1 precision oncology growth, and lower Q1 COVID testing revenue .
  • Operationally, Cologuard held up strongly despite constrained colonoscopy capacity (down ~25%) and wellness visits (~40% lower), with utilization up 9% YoY and electronic ordering approaching ~40%, expected to exceed 50% in 2021 via Epic rollouts—key structural tailwinds for Screening growth .
  • Strategic pipeline momentum: BLUE-C progressing to support FDA approval of Cologuard 2.0 (targeting 30% reduction in false positives and 5–10% revenue/COGS uplift per test), colon cancer blood test, and advancing multi-cancer screening (Thrive/CancerSEEK) and MRD (TARDIS/Ashion) programs—core to a ~$60B opportunity across cancer diagnostics .
  • Estimates context: S&P Global consensus data was unavailable due to request limits; on the call, an analyst referenced Street screening revenue around ~$255M vs management’s seasonal caution for Q1, underscoring near-term expectation resets amid COVID seasonality . SPGI estimates unavailable.

What Went Well and What Went Wrong

What Went Well

  • Cologuard demand resilience: Screening revenue rose 9% YoY to $249.7M despite wellness visit and colonoscopy headwinds; 8,000 new providers ordered in Q4 (227,000 since launch), and non-GAAP gross margin expanded to 79% (+2 pts QoQ) .
  • Structural growth drivers: Electronic ordering near ~40% of Cologuard orders and expected to exceed 50% in 2021 via Epic; physicians who order electronically typically order >50% more, setting up durable volume leverage .
  • Pipeline and platform expansion: BLUE-C advancing for stool and blood CRC screening; Cologuard 2.0 targeting 30% fewer false positives (5–10% revenue/COGS per-test uplift); multi-cancer (Thrive) and MRD (TARDIS/Ashion) capabilities integrated for long-term growth .

Management quotes:

  • “We’re confident in the long-term growth of Cologuard, Oncotype DX… including minimal residual disease, liquid biopsy and multi-cancer screening tests” .
  • “Electronic ordering in total is right around 40%… we expect it to exceed 50% as we exit the year” .
  • “Our goals with Cologuard 2.0 are to… decrease false positives by 30%… [and] improve revenue and cost of goods by 5% to 10% per test” .

What Went Wrong

  • GAAP profitability impacted by acquisition accounting: Base Genomics was expensed rather than capitalized, driving a Q4 net loss of $(436.8)M and GAAP EBITDA of $(375.5)M, despite adjusted EBITDA of $87.9M .
  • COVID-driven demand volatility: Wellness visits down meaningfully (~40% in Q4) and colonoscopy volumes down ~25%, prompting management to forego full-year revenue guidance and caution on Q1 sequential Screening decline .
  • Precision Oncology uneven recovery: Breast cancer diagnoses lagged the mammography recovery; management guided only modest sequential growth in Q1, highlighting ongoing COVID sensitivity in diagnosis-driven volumes .

Financial Results

Revenue Trend

MetricQ2 2020Q3 2020Q4 2020
Revenue ($USD Millions)$269 $408 $466.3

EPS (Diluted)

MetricQ4 2019Q4 2020
Diluted EPS ($)$0.54 $(2.79)

Margins and Profitability

MetricQ2 2020Q3 2020Q4 2020
Gross Margin (GAAP, %)63% 72% 74%
Gross Margin (Non-GAAP, %)71% 77% 79%
Adjusted EBITDA ($USD Millions)$(5) $94 $87.9

Segment Breakdown

Segment Revenue ($USD Millions)Q2 2020Q3 2020Q4 2020
Screening (Cologuard + Biomatrica)$131 $215 $249.7
Precision Oncology (Oncotype DX, global)$103 $92 $117.6
COVID-19 Testing$35 $102 $99.1

KPIs and Operational Metrics

KPIQ2 2020Q3 2020Q4 2020
New HCPs ordering Cologuard~5,000 —~8,000
Total HCPs since launch~211,000 ~220,000 ~227,000
Electronic ordering (% of Screening orders)~35–38% —~40%; >50% expected in 2021
Cologuard utilization YoY—Modest YoY growth +9% YoY
Colonoscopy volumes vs prior≤ ~−66% (less than one-third of pre-COVID) > −20% ~−25%
Wellness visits vs normal——~−40%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Screening revenue (sequential)Q1 2021Not providedDown sequentially vs Q4 due to holidays/COVID impacts N/A
Precision Oncology revenue (sequential)Q1 2021Not providedModest sequential growth N/A
COVID testing revenue (sequential)Q1 2021Not providedDown sequentially; WI demand down ~50% from peak; cases down ~90% N/A
Sales & Marketing expenseFY 2021Not provided$800–$850M Raised investment
G&A expenseFY 2021Not provided$550–$575M (pre-integration) Raised investment
R&D expenseFY 2021Not provided$375–$400M (incl. ~$50M TARDIS license) Raised investment
Intangible amortizationFY 2021Not provided~$95M New
CapExFY 2021Not provided~$125M New
Rescreen revenueFY 2021Not provided>$100M expected New
45–49 age revenueFY 2021Not providedAt least ~$40M expected New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2020)Trend
COVID impact on ScreeningCologuard back near pre-COVID by June; colonoscopy down 30–40%; telehealth and DTC initiatives accelerated Wellness visits ~−40%; colonoscopy ~−25%; Cologuard +9% YoY; caution on Q1 seasonality Improving demand for at-home screening; seasonal Q1 dip expected
Electronic ordering / EpicElectronic ordering ~35–38%; Epic rollout starting; electronic orders drive >50% higher physician ordering ~40% of orders; expected >50% by YE 2021 via Epic upgrade Structural adoption tailwind accelerating
BLUE-C (Cologuard 2.0 and CRC blood)BLUE-C re-initiated; goal: higher specificity with maintained/↑ sensitivity BLUE-C advancing; Cologuard 2.0 targeting 30% fewer false positives & 5–10% revenue/COGS uplift per test; blood test included Execution momentum toward FDA pathways
Multi-cancer screening (Thrive/CancerSEEK)Thrive acquisition announced; plan for large pivotal (~80k) and assay optimization combining methylation/mutation/protein Combining Exact methylation with Thrive mutation/protein; randomized pivotal targeted next year; LDT role possible for evidence generation Platform consolidation; pathway clarity
MRD (TARDIS/Ashion)MRD seen as a key pillar; pipeline broadening MRD clinical trials/samples underway; product configuration/performance updates in coming quarters Building toward commercialization
45–49 guideline shiftEarly traction; payer coverage expanding (e.g., Aetna, Humana) Expect mid-year USPSTF finalization; campaign targeting 19M eligible; initial 2021 revenue ≥$40M Emerging incremental demand wave

Management Commentary

  • Strategic scope: “We plan to extend our leadership throughout the cancer continuum… combined total opportunity of $60 billion” .
  • Cologuard 2.0 impact: “Decrease false positives by 30%… improve revenue and cost of goods by 5% to 10% per test” .
  • Demand dynamics: “Colonoscopy screening was down 25%, Cologuard utilization was up 9% year-over-year” .
  • 2021 investment posture: “We plan to increase our investment in growth… sales and marketing $800–$850M… G&A $550–$575M… R&D $375–$400M… CapEx ~$125M” .

Q&A Highlights

  • Seasonal Q1 screening decline: CFO reinforced a typical Q1 sequential decline due to holiday timing and 30-day lag from order-to-completion, with COVID year-end spike amplifying seasonality; Street screening expectations (~$255M) were above management’s caution .
  • Growth catalysts: Rescreening (> $100M in 2021), 45–49 age cohort (≥ $40M in 2021), and electronic ordering/EPIC rollout (>50% of orders exiting 2021) were highlighted as material tailwinds .
  • Pipeline clarity: BLUE-C to support FDA approval for stool and blood CRC tests; multi-cancer randomized pivotal planned next year; MRD advancing with TARDIS/Ashion; liver test coming in H1 2021 .
  • Competitive framing: Management reiterated stool testing’s sensitivity advantages for adenoma detection vs blood, and the challenge for blood tests to match FIT’s ~24% advanced adenoma sensitivity at very low cost .
  • Field access and salesforce: Primary care rep access <50% vs pre-COVID, but ramping; women’s health team addition and Pfizer field normalization expected through the year .

Estimates Context

  • S&P Global consensus (EPS/revenue) could not be retrieved due to request limits; therefore, explicit beat/miss vs SPGI cannot be presented. On the call, Evercore ISI referenced Street screening revenue around ~$255M for Q1 versus management’s seasonal guidance, implying potential downward revisions near term .
  • Values retrieved from S&P Global were unavailable due to API limits; comparisons to consensus are therefore not included.

Key Takeaways for Investors

  • Screening durability: Cologuard delivered +9% YoY in Q4 despite wellness/colonoscopy headwinds, with non-GAAP GM improving to 79%; expect seasonal Q1 dip, then re-acceleration as wellness visits and Epic ordering recover .
  • Structural tailwinds: Epic-enabled electronic ordering (>50% target), rescreening (> $100M in 2021), and 45–49 cohort (≥ $40M in 2021) should support sustained Screening growth regardless of near-term COVID noise .
  • Pipeline catalysts: BLUE-C readouts and the FDA path for Cologuard 2.0/CRC blood test, MRD progress, and multi-cancer pivotal setup are medium-term value inflections; Cologuard 2.0’s 5–10% per-test revenue/COGS uplift is a noteworthy economic lever .
  • Profitability optics: GAAP losses reflect acquisition accounting (Base Genomics expensed); investors should focus on adjusted EBITDA ($87.9M in Q4) and gross margin trajectory as better indicators of the core unit economics .
  • Near-term modeling: Trim Q1 Screening sequentially (holiday lag/COVID), modest up for Precision Oncology, down for COVID testing; maintain higher 2021 OpEx for growth, with salesforce, DTC, and IT spending as key drivers .
  • Strategic thesis: Exact is executing an end-to-end oncology diagnostics platform spanning screening→MRD→therapy selection; the breadth of lab/IT/commercial infrastructure and payer/provider connectivity should drive multi-year compounding as new assays scale .

All information above is sourced from Exact Sciences’ Q4 2020 press release (Form 8-K) and earnings call transcripts: .