Executive Summary

Q1 revenue fell to $24.8M as COVID testing volumes normalized, delivering within prior Q4 guidance ($20–$25M); GAAP net loss was $94.2M (-$0.62 EPS) and Adjusted EBITDA was -$47.6M .
Mix shifted almost entirely to private sector (98% of revenue) with $22.4M disposable cartridge revenue; GAAP product gross margin was -63% due to a $12M disputed vendor charge; adjusted product gross margin was -14% .
Management executed sizable cost actions: ~23% sequential reduction in GAAP opex (ex-COGS) to $80.8M and an annualized run-rate savings target increased to $150M; quarter-end cash was $178.2M with no debt .
Guidance reset lower: Q2 2023 revenue guided to $8–$10M, citing a shift to seasonal respiratory testing patterns; key near-term catalysts are guidance reset and cost-down progress, while medium-term catalysts hinge on regulatory approvals and menu expansion (RSV de novo, Flu+COVID EUA, Strep, CT/GC) .

What Went Well and What Went Wrong

What Went Well

Cost discipline: Achieved ~$100M annualized savings in Q1 and raised run-rate target to $150M; adjusted opex fell to $72.9M from $94.6M in Q4 (-23%) .
Product/menu progress: Received FDA EUA for Mpox molecular test; submitted RSV de novo; ongoing Strep and CT/GC clinical studies; Flu + COVID multiplex and Flu A/B submissions under review .
Management tone focused on execution and platform expansion: “We are executing our strategic plan including expanding the menu on the Cue Health Monitoring System as well as expanding the offering for the Cue Integrated Care Platform. We have cut our annualized costs by an expected $150 million…” — Ayub Khattak, CEO .

What Went Wrong

Steep YoY revenue decline and negative gross margin: Revenue fell to $24.8M from $179.4M in Q1’22; GAAP product gross margin was -63% (adjusted -14%) due to a disputed vendor payment .
Losses remain material: GAAP net loss of $94.2M; adjusted net loss of $74.3M; Adjusted EBITDA -$47.6M .
Near-term demand reset: Q2 revenue guidance cut to $8–$10M, signaling a seasonal step-down in COVID testing volumes and a slower topline near term .

Financial Results

P&L and Profitability vs prior periods and estimates

Metric	Q1 2022	Q3 2022	Q4 2022	Q1 2023
Revenue ($M)	$179.4	$69.6	$146.8	$24.8
GAAP Product Gross Margin %	51%	24%	38%	-63%
Operating Expenses (GAAP, ex-COGS) ($M)	N/A	$86.4	$94.6	$80.8
Net Income (Loss) ($M)	$2.8	$(66.3)	$(31.5)	$(94.2)
Diluted EPS ($)	$0.02	$(0.45)	$(0.21)	$(0.62)
Adjusted EBITDA ($M)	$29.5	$(37.2)	$(54.0)	$(47.6)
Adjusted Diluted EPS ($)	N/A	$(0.43)	$(0.50)	$(0.48)
Consensus Revenue ($M)	N/A (S&P Global unavailable)	N/A (S&P Global unavailable)	N/A (S&P Global unavailable)	N/A (S&P Global unavailable)
Consensus EPS ($)	N/A (S&P Global unavailable)	N/A (S&P Global unavailable)	N/A (S&P Global unavailable)	N/A (S&P Global unavailable)
Note: S&P Global consensus estimates were unavailable for HLTH during Q1 2023; therefore, no estimate comparisons are shown.

Segment/Mix and KPIs

Metric	Q1 2022	Q3 2022	Q4 2022	Q1 2023
Private Sector Revenue ($M)	N/A	$65.9	$52.4	$24.2
Public Sector Revenue ($M)	N/A	$3.7	$94.4 (incl. $92.4M deferred)	$0.6
Disposable Test Cartridge Revenue ($M)	N/A	$61.4	$50.5	$22.4
Adjusted Product Gross Margin %	N/A	28%	18%	-14%
Cash & Cash Equivalents ($M)	N/A	$304.7	$241.5	$178.2

Non-GAAP adjustments: Q1 2023 product margin adjusted for a $12M disputed vendor payment; Q4 2022 adjusted for $92.4M DoD deferred revenue release and inventory reserve adjustments; Q3 2022 adjusted for inventory reserves .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2023	$20M–$25M (given on Mar 15, 2023)	Actual: $24.8M	Delivered within prior range
Revenue	Q2 2023	N/A	$8M–$10M	New guidance; sequentially lower vs Q1 actual

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2022, Q4 2022)	Current Period (Q1 2023)	Trend
Menu expansion & regulatory	Submitted Flu A/B (de novo), Flu+COVID (EUA); RSV studies started; Strep/CT-GC development progressing . Q4 confirmed submissions and Mpox EUA plan .	Mpox EUA obtained; RSV de novo submitted; Strep and CT/GC studies ongoing .	Continued progress; broader menu nearing regulatory milestones
Cost reductions	Initiated restructuring; opex at $86.4M in Q3 .	Opex down to $80.8M GAAP; run-rate savings target to $150M; adjusted opex $72.9M .	Accelerating cost takeout
Demand/Revenue mix	Private dominated (95%+); $69.6M revenue in Q3 .	Private 98% of revenue; total revenue $24.8M as volumes normalize .	Mix remains private-heavy; volumes down
Cash runway	$304.7M cash at Q3 end ; $241.5M at year-end .	$178.2M cash; no debt; commentary of >12 months runway on call .	Runway adequate but declining cash
Integrated care platform	Cue Care launch (test-to-treat) in Q3 .	Launched Cue Pharmacy and Cue Lab; expect contribution in H2 .	Platform expanding; early monetization targeted

Management Commentary

“We reached several significant milestones including launching Cue Pharmacy, Cue Lab, and receiving authorization for the Cue Mpox test, our second FDA authorization… We have cut our annualized costs by an expected $150 million to weather the macroeconomic climate as we make significant progress on our plan.” — Ayub Khattak, CEO .
“Q1 total adjusted operating expenses were $72.9 million… down 23% from Q4 operating expenses of $94.6 million… We expect these actions to result in a total of $150 million in annualized run rate cost savings.” — Aasim Javed, CFO (call) .
“Cue Health expects second quarter 2023 revenues in the range of $8 million to $10 million reflecting an expected shift to a seasonal respiratory pattern for COVID testing volumes.” — Company guidance .

Q&A Highlights

Near-term outlook and guidance: Management reiterated Q2 revenue guide of $8–$10M tied to seasonal COVID testing dynamics and did not provide guidance beyond Q2 .
Cost structure and runway: On the call, management emphasized realized and targeted savings (~$150M run-rate) and indicated more than 12 months of cash on hand at current trajectory .
Growth levers in H2: Expected initial revenue contribution from Cue Care, Cue Lab, and Cue Pharmacy in the back half as menu expands and regulatory decisions arrive .
R&D focus: Spend prioritized toward respiratory and sexual health clinical studies (RSV, Strep, CT/GC), aligning with menu expansion timelines .

Estimates Context

S&P Global consensus estimates for Q1 2023 revenue and EPS were unavailable for HLTH at the time of analysis; therefore, we do not present a beat/miss analysis vs consensus. We anchor estimate comparisons on S&P Global by default when available.
Implication: With management cutting near-term revenue guidance to $8–$10M for Q2, Street models (where available) likely need to move lower near term; any upside will depend on H2 traction from menu expansion and integrated care services .

Key Takeaways for Investors

Near-term revenue reset: Q2 guide to $8–$10M signals another step down in quarterly revenue as COVID testing normalizes; expect top-line pressure until new tests/services contribute .
Cost-out is the key buffer: Rapid reduction of opex and a $150M run-rate savings target are critical to extending cash runway and narrowing losses through 2023 .
Menu expansion is the pivotal catalyst: Regulatory outcomes for RSV (de novo), Flu + COVID (EUA), Strep, and CT/GC could expand the installed base utility and open new demand pools .
Mix durability in private channel: 98% private mix underscores enterprise/provider reliance; reacceleration requires broader non-COVID menu and payer/provider uptake .
Margin recovery depends on normalization of one-time items and scale: Adjusted product margin (-14%) already benefits from excluding a $12M disputed charge; sustainable improvement hinges on volume recovery and mix from higher-margin tests .
Cash runway manageable but trending down: $178.2M cash and no debt provides room to execute, but continued losses necessitate tight cost control and commercialization progress in H2 .
Trading setup: Stock narrative near term is dominated by lowered revenue guide and cost reductions; medium-term inflection tied to FDA decisions and early adoption of new tests and integrated care services .

Source Documents

Q1 2023 8-K/Press Release and financial tables (May 10, 2023)
Q4 2022 8-K/Press Release and financial tables (Mar 15, 2023)
Q3 2022 8-K/Press Release and financial tables (Nov 9, 2022)
Q1 2023 Earnings Call Transcript excerpts (secondary sources): Yahoo/InsiderMonkey summary of call; includes CFO commentary on opex and runway ; Seeking Alpha/MarketScreener transcript listings .

Notes:

S&P Global consensus data for HLTH was unavailable via our estimates tool at this time; therefore, no beat/miss vs consensus is shown.

Cue Health Inc. (HLTH)·Q1 2023 Earnings Summary