Executive Summary

Q2 FY2025 revenue declined 12% year-over-year to $44.071M, while gross profit increased 3% to $22.407M; GAAP net loss improved 21% to $59.103M and adjusted EBITDA loss improved 26% to $33.412M .
Management launched GLP-1 weight-loss telehealth membership (thousands enrolled) and rolled out “Total Health” broadly; recurring membership revenue share more than doubled to 21% of total vs 9% a year ago .
Company announced a major restructuring: discontinuing Therapeutics development and reducing workforce ~40%, targeting ≥$35M annualized cost savings with ~$12M one-time charges; 10‑Q includes a going concern disclosure pending liquidity actions .
Regained Nasdaq compliance following a 1‑for‑20 reverse stock split and board reconstitution; near-term stock catalysts include cost-cutting execution, GLP-1 traction, and revenue recognition from the GSK data license in H2 FY2025 .

What Went Well and What Went Wrong

What Went Well

Membership monetization accelerated: recurring membership revenue reached 21% of total (vs 9% YoY), with CEO noting “we’ve more than doubled our membership services revenue from the prior year quarter” .
New products and AI features: GLP-1 telehealth membership launched (thousands enrolled) and first AI assistant “DaNA” released for customer insights, strengthening higher-margin, engagement-driven offerings .
Gross profit and adjusted EBITDA improved YoY on lower R&D and personnel costs and better consumer services gross profit .

What Went Wrong

Top line pressure: revenue fell 12% YoY, driven by lower PGS kit volumes, telehealth orders, and reduced research services after the GSK exclusivity term ended .
Liquidity and risk disclosures: 10‑Q flagged going concern, stating the company will need additional liquidity for the 12 months following the filing unless restructuring and capital raise plans succeed .
Legal/incident costs: cybersecurity settlement and related expenses increased G&A (insurance recoveries partially offset), with $30M proposed settlement and additional costs recognized across Q1–Q2 .

Financial Results

Metric	Q4 FY2024 (oldest)	Q1 FY2025	Q2 FY2025 (newest)
Revenue ($USD Millions)	$64.028	$40.414	$44.071
Gross Profit ($USD Millions)	$27.031	$20.514	$22.407
Gross Margin (%)	—	50%	51%
Operating Expenses ($USD Millions)	$238.895	$92.469	$83.575
Net Loss ($USD Millions)	$(208.835)	$(69.400)	$(59.103)
Adjusted EBITDA ($USD Millions)	$(33.209)	$(35.162)	$(33.412)
Cash & Equivalents ($USD Millions, period end)	$216.488	$169.971	$126.601
EPS, Basic & Diluted ($)	$(0.43)	$(0.14)	$(2.32) (reflects 1‑for‑20 split)

Segment / Category Breakdown

Category Revenue ($USD Millions)	Q1 FY2025	Q2 FY2025
PGS	$32.506	$37.167
Telehealth	$6.647	$6.423
Research Services	$1.261	$0.481
Total	$40.414	$44.071

KPIs

KPI	Q4 FY2024 (oldest)	Q1 FY2025	Q2 FY2025 (newest)
PGS Customers (Millions)	15.1	15.3	15.4
Consenting Customers (%)	—	>80%	>80%
Membership Revenue Share (%)	—	19%	21%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance / Update	Change
Revenue recognition (GSK data license)	H2 FY2025	Not specified	License effective Oct 28, 2024; revenue recognized over license term to Oct 27, 2025	New update
Operating expenses savings	FY2025 onward	Not specified	Annualized cost savings ≥$35M; one-time restructuring costs ~$11.7–$12M (severance & equity)	New update
Therapeutics development	FY2025	Continue programs	Discontinuing further development of all programs; exploring out-licensing/alternatives	Lowered/ceased
Formal financial guidance	FY2025	None	None (no revenue/EPS/margin guidance provided)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY2024)	Previous Mentions (Q1 FY2025)	Current Period (Q2 FY2025)	Trend
AI/technology initiatives	Focus on LLMs to power risk prediction and partner use cases	Preprint on LLMs for genetic associations; building AI models	Launched “DaNA” AI assistant for customers	Expanding deployments
Membership/Total Health	Membership revenue +41% YoY in Q4; Total Health rollout targeted for fall	Improved retention, upgrade rates, LTV; GLP-1 study planned with membership	Total Health available broadly; membership share at 21%	Strengthening recurring mix
GLP-1 initiatives	—	Launched study; GLP-1 membership planned end of month	GLP-1 membership live, thousands enrolled	Rapid execution
Therapeutics strategy	Advancing 23ME-00610 and 23ME-01473; data presentations scheduled	Continued clinical progress; considering combinations	Ceasing development; pursuing out-licensing	Strategic pivot
Nasdaq listing/compliance	Extension granted to Nov 4, 2024; reverse split option	Prepared for reverse split if needed	1‑for‑20 reverse split; regained compliance	Resolved
Cybersecurity legal resolution	Q4 impairment overshadowed; incident pending	Proposed $30M settlement; costs recorded	Additional incident costs recorded; insurance recoveries noted	Progressing to resolution

Management Commentary

“We are making significant progress to ensure the long-term success of the business…we’ve more than doubled our membership services revenue from the prior year quarter…We will continue to prioritize driving recurring revenue through our subscription business” — Anne Wojcicki, CEO .
“We expect annualized cost savings of at least $35 million per year, and we expect to incur approximately $12 million in cost and expenses, primarily related to one-time severance, transition and termination-related costs” — Joseph Selsavage, CFO .
“Net loss for the quarter was $59 million…improvement…driven mainly by savings in operating expenses” — CFO .
“Under this restructuring, we are discontinuing further development of all therapeutic programs and reducing our workforce by approximately 40%” — CEO .
“Our financial statements for this quarter include a going concern disclosure…The company will need additional liquidity…we are considering raising additional capital” — CFO .

Q&A Highlights

Pricing and margins: 23andMe+ subscription price increased from $29 to $69; retention and upgrades remained strong; focus on margin efficiency and higher ASPs .
Total Health rollout: rollout to existing customers shifted to fall; engineering/path enablement prioritized, now available broadly in Q2 .
Nasdaq compliance & reverse split: reverse split used as a tool; company regained compliance post-split .
Liquidity and runway: management pursuing cost cuts, growth initiatives, and potential financing to extend runway .
Therapeutics combinations: exploration of combinations (e.g., with TKIs) consistent with prior data; now shifting to out-licensing and discontinuation of in-house development .

Estimates Context

S&P Global consensus estimates for EPS and revenue were unavailable due to missing CIQ mapping for ME; therefore we cannot provide a beat/miss analysis from Wall Street consensus at this time. If mapping becomes available, we can update with S&P Global comparisons.

Key Takeaways for Investors

Execution pivot to subscriptions and telehealth is driving mix shift toward recurring, higher-margin revenue; track membership share (now 21%) and GLP-1 membership adoption .
Restructuring should materially reduce operating expenses (≥$35M annualized savings), but monitor one-time charges and liquidity actions given the going concern disclosure .
Research services revenue to benefit from GSK data license recognition in H2 FY2025; watch timing and magnitude as the license term runs to late October 2025 .
Nasdaq compliance risk has been mitigated via the 1‑for‑20 reverse split and board reconstitution; governance and listing stability improved .
Legal overhang from the cybersecurity incident is progressing toward resolution with a proposed settlement; insurance recoveries partially offset costs .
Near-term trading may key off evidence of sustained subscription engagement, GLP-1 momentum, and delivery of announced cost savings; medium-term thesis hinges on converting the large customer base and data assets into recurring revenue and partner-driven research economics .

23andMe Holding Co. (ME)·Q2 2025 Earnings Summary