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GRAIL, Inc. (GRAL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue grew 26% year over year to $38.3M, with Galleri screening revenue up 39% to $31.6M; non-GAAP adjusted EBITDA improved to $(84.0)M and adjusted gross profit to $17.9M . Net loss narrowed to $(97.1)M (vs. $(187.5)M in Q4’23), aided by cost controls and scale benefits .
  • Strategic catalysts: TRICARE added Galleri as a covered benefit for elevated-risk adults ≥50, and Galleri is now integrated into Quest’s nationwide ordering and draw network—streamlining physician ordering and patient access across ~7,400 locations .
  • Operationally, management rolled out an enhanced Galleri assay with a reduced panel and full lab automation to lower COGS and expand throughput; no incremental near-term capex is anticipated for expected volumes .
  • Balance sheet and runway: year-end “cash, cash equivalents, restricted cash and short-term marketable securities” totaled $766.8M; management guides 2025 cash burn of “no more than $320M” and maintains runway into 2028, supporting pivotal readouts and a modular PMA submission targeted for 1H’26 .

What Went Well and What Went Wrong

  • What Went Well

    • Strong topline and Galleri momentum: Q4 revenue +26% YoY to $38.3M; screening revenue +39% YoY to $31.6M; ~137,000 Galleri tests sold in 2024 and “more than 40,000” in Q4, driven by volume growth .
    • Cost and efficiency actions: Adjusted EBITDA improved to $(84.0)M (from $(123.5)M in Q4’23) and adjusted gross profit rose to $17.9M, with management citing revenue mix and scale benefits; new assay expected to reduce variable COGS and increase throughput (≈4x samples per flow cell) .
    • Access tailwinds: TRICARE coverage decision and Quest ordering integration should lower friction in test adoption and expand availability across ~7,400 access points; >500,000 providers use Quest’s connectivity system .

  • What Went Wrong

    • Development services softness: Q4 development services revenue fell 13% YoY to $6.7M and declined for the full year (−6% to ~$17.0M), partially offsetting screening gains .
    • Persistent GAAP losses: Q4 gross loss was $16.0M and GAAP net loss $(97.1)M; FY24 net loss was $(2.03)B driven by goodwill/intangible impairments and amortization related to the Illumina acquisition .
    • Legislative/reimbursement uncertainty: Management remains encouraged by bipartisan MCED legislation but cannot predict timing; potential pricing alignment to stool-based tests would require continued cost reductions and scale to achieve attractive margins .

Financial Results

Headline P&L (USD Millions unless noted)

MetricQ4 2023Q3 2024Q4 2024
Total Revenue ($M)$30.326 $28.652 $38.252
Screening Revenue ($M)$22.655 $25.374 $31.551
Development Services Revenue ($M)$7.671 $3.278 $6.701
Gross Profit (Loss) ($M)$(18.650) $(22.233) $(15.968)
Adjusted Gross Profit ($M)$15.344 $11.818 $17.936
Adjusted EBITDA ($M)$(123.477) $(108.156) $(84.031)
GAAP Net Loss ($M)$(187.527) $(125.688) $(97.066)
GAAP Diluted EPS ($)$(6.04) $(3.94) $(2.89)

Notes: Adjusted metrics are non-GAAP as defined and reconciled in company materials .

Segment Revenue Breakdown (USD Millions)

SegmentQ4 2023Q3 2024Q4 2024
Screening$22.655 $25.374 $31.551
Development Services$7.671 $3.278 $6.701
Total$30.326 $28.652 $38.252

Quarterly KPIs

KPIQ3 2024Q4 2024
Galleri Tests Sold (units)~32,600 “>40,000”
Adjusted Gross Profit ($M)$11.818 $17.936
Adjusted EBITDA ($M)$(108.156) $(84.031)
Cash Position (definition per disclosure)$853.6M cash & equiv. as of 9/30/24 $766.8M cash, cash equiv., restricted cash & ST marketable securities as of 12/31/24

Full-Year 2024 Highlights (for context)

MetricFY 2024
Total Revenue ($M)$125.6
Galleri Revenue ($M)$108.6
Galleri Tests Sold (units)~137,000
Adjusted Gross Profit ($M)$57.8
Adjusted EBITDA ($M)$(483.5)
GAAP Net Loss ($M)$(2,027.0) (includes $1.4B impairments)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent UpdateChange
Galleri screening revenue growthFY 202440%–50% growth (narrowed in fall) Achieved +45% (Galleri revenue $108.6M) Achieved
Cash burnFY 2025≈$325M (Q3 commentary) ≤$320M (mid-Jan guide reiterated on Q4 call) Lowered
Cash runwayMulti‑yearInto 2028 (post‑restructure) Into 2028 reaffirmed Maintained
2025 outlook after Quest/TRICAREFY 2025Not quantified“No change to ’25 guidance” despite Quest/TRICARE Maintained

Earnings Call Themes & Trends

TopicQ2 2024 (Aug)Q3 2024 (Nov)Q4 2024 (Feb)Trend
Assay/COGS & automationAnnounced next‑gen Galleri; focus on scale & cost; RTP lab capacity; restructure to extend runway Transition to new assay by year‑end; near‑term variable COGS down; fixed cost leverage later New assay live (Dec); 4× samples/flow cell; workflow fully automated; no near‑term capex Improving efficiency; COGS tailwind building
Reimbursement policy (MCED Act)Stakeholder push; timing uncertain Unanimous House Ways & Means markup; bipartisan support but timing uncertain Reintroduction; bipartisan, bicameral support; potential pricing aligned to stool tests Constructive but timing/pricing still uncertain
PMA/FDA timelinePMA submission targeted 1H’26 1H’26 PMA; expect AdCom; implies 1H’27 FDA approval target 1H’26 modular PMA target reaffirmed Steady path to PMA
Commercial/go‑to‑marketStreamlining commercial; focus on productive territories Continue moderated commercial spend; build ecosystem readiness Quest ordering integration to broaden access; TRICARE coverage adds payer channel Access friction declining
Volumes & demand~35.2k Q2 tests; >215k since launch (cumul.) ~32.6k Q3 tests; >250k since launch (cumul.) >40k Q4 tests; ~137k in 2024 Growing sequentially
Cash burn & runwayRestructure to extend runway into 2028; FY25 burn ~ $325M Reiterated burn reduction; narrowed 2H’24 burn to ~$220M FY25 burn ≤$320M; runway into 2028 Improving OpEx discipline

Management Commentary

  • “We grew U.S. Galleri revenue 45% year-over-year selling more than 137,000 Galleri tests… excited to progress initiatives to make it easier for physicians to order the test, including our recent integration into Quest Diagnostics” (CEO) .
  • “We rolled [an] enhanced version [of Galleri] out… reduced panel size… approximately 4x the number of samples on every flow cell… workflow… fully automated and integrated… do not anticipate any additional CapEx… expect to see COGS improvements as we continue to scale” (President) .
  • “In January, we guided… cash burn for the full year 2025 to be no more than $320M… our cash runway extends into 2028… enabling us to achieve major milestones such as readouts… and completion of our modular PMA submission” (CFO) .

Q&A Highlights

  • Pricing elasticity and COGS: Management emphasized near-term variable COGS reductions from the new assay and future fixed-cost leverage at scale; no elasticity testing yet—platform designed to support population‑scale pricing over time .
  • Quest/TRICARE in guidance: Both considered in planning; no change to 2025 guidance following these developments .
  • MCED legislation: Bipartisan/bicameral support persists; timing uncertain; recent drafts contemplate reimbursement timing and pricing analogous to stool-based tests—consistent with internal cost roadmap .
  • PATHFINDER 2 endpoints: Evaluating safety and performance (specificity, sensitivity, predictive values) and standard screening adherence; readout included in final modular PMA submission timeline (1H’26) .
  • Cash runway sensitivity: Company believes runway into 2028 includes buffer for potential FDA/PMA timing variability .

Estimates Context

  • Wall Street consensus via S&P Global Capital IQ for Q4 2024 revenue/EPS was unavailable at the time of this analysis due to API request limits; as a result, we are not presenting beat/miss vs. estimates. We will update with S&P Global consensus when accessible.

Key Takeaways for Investors

  • Commercial momentum continued: Q4 revenue +26% YoY to $38.3M with Galleri screening +39% YoY to $31.6M; adjusted EBITDA improved meaningfully to $(84.0)M .
  • Access and adoption catalysts: TRICARE coverage and Quest integration reduce ordering friction and expand access to ~7,400 draw sites—potentially accelerating physician adoption in 2025+ .
  • Cost structure inflecting: New assay and automation raise throughput (≈4x per flow cell) and cut variable COGS; management expects further benefits as volumes scale .
  • De-risked funding path: $766.8M year-end liquidity and FY25 burn ≤$320M support runway into 2028—through key inflections including PATHFINDER 2 (’25), NHS‑Galleri (’26), and targeted PMA filing (1H’26) .
  • Policy and regulatory milestones remain pivotal: MCED legislation timing/pricing and FDA PMA review are key swing factors for reimbursement and unit economics; management signals bipartisan momentum but timing uncertainty persists .
  • Near-term setup: Expect continued volume growth aided by lower friction and modest COGS benefits, while operating discipline should contain burn; upside from legislative progress or earlier‑than‑expected payer coverage .

Appendix: Additional Q4 Detail and Non‑GAAP Notes

  • Q4 GAAP net loss $(97.1)M includes ~$34.6M amortization of acquisition-related intangibles; FY24 net loss $(2.03)B includes ~$1.4B impairments and ~$138.3M amortization .
  • Non‑GAAP measures: Adjusted Gross Profit and Adjusted EBITDA exclude items including intangible amortization, stock‑based compensation, impairments, and certain legal/restructuring costs; reconciliations provided in exhibits -.