Executive Summary

Q4 FY2024 revenue was $64.0M, down 31% YoY, with sequential improvement vs Q3; adjusted EBITDA loss improved to $33.2M from $38.7M in Q3 as cost controls took hold .
A $152.9M non-cash goodwill impairment drove a net loss of $208.8M; full-year non-cash impairment totaled $351.7M across Q3–Q4 .
The Board formed a Special Committee to review strategic alternatives, and the Company disclosed the CEO is considering acquiring all outstanding shares; the Company withdrew guidance given the review, a key near-term stock catalyst alongside upcoming ASCO data from 23ME-00610 (June 1 and 3) .
Membership revenue grew 41% YoY to $20M and retention improved in Q4; management emphasized profitable growth in membership, telehealth, and AI-driven research monetization into FY2025 .

What Went Well and What Went Wrong

What Went Well

Membership momentum: “retention rates in Q4 improved from the previous 3 quarters, while membership revenue grew by 41% year-over-year to $20 million” .
Telehealth unit economics improving: telehealth generated positive gross margins while advertising spend decreased, improving bottom-line trajectory .
GSK relationship extended: 1-year non-exclusive data license with $20M upfront highlights the value of the database and diversifies research revenue opportunities .

What Went Wrong

Revenue contraction: Q4 revenue down ~31% YoY as GSK exclusivity ended in July 2023 and lower kit volumes/telehealth orders weighed on consumer services .
Large non-cash impairments: $153M in Q4 goodwill impairment (Lemonaid-related) and $199M in Q3 drove elevated net losses; adjusted EBITDA loss widened FY24 vs FY23 .
Listing pressure: Company received an additional 180 days to regain NASDAQ minimum bid compliance, highlighting capital markets constraints (considering reverse split under certain circumstances) .

Financial Results

Quarterly P&L Snapshot

Metric	Q2 FY2024	Q3 FY2024	Q4 FY2024
Revenue ($USD Millions)	$50.0	$44.7	$64.0
Gross Profit ($USD Millions)	$21.7	$19.9	$27.0
Net Loss ($USD Millions)	$(75.3)	$(278.0)	$(208.8)
Adjusted EBITDA ($USD Millions)	$(45.1)	$(47.7)	$(33.2)
Diluted EPS ($)	$(0.16)	$(0.58)	$(0.43)

Notes:

Q4 sequential improvements in revenue and adjusted EBITDA reflect higher ASPs, subscription growth, and telehealth margin gains despite research revenue headwinds .

Revenue Mix (% of Total)

Category	Q2 FY2024	Q3 FY2024	Q4 FY2024
Consumer Services	97%	96%	99%
Research Services	3%	4%	1%

Segment Adjusted EBITDA

Segment ($USD Millions)	Q2 FY2024	Q3 FY2024	Q4 FY2024
Consumer & Research Services	$(6.7)	$(20.6)	$(3.9)
Therapeutics	$(26.2)	$(16.5)	$(17.1)
Unallocated Corporate	$(12.2)	$(10.6)	$(12.2)
Total Adjusted EBITDA	$(45.1)	$(47.7)	$(33.2)

KPIs and Balance Sheet

KPI / Balance Item	Q3 FY2024	Q4 FY2024
Membership Revenue ($USD Millions)	—	$20.0
Customers (PGS cumulative)	—	15 million milestone
Cash & Cash Equivalents ($USD Millions)	$242.4	$216.5
Deferred Revenue (Current, $USD Millions)	$80.5	$64.8
Goodwill Impairment (Quarter, $USD Millions)	$198.8	$152.9

Discrepancy note: On the Q4 call, management stated “we ended the year with $26 million in cash and cash equivalents,” whereas the 8-K and balance sheet show $216.5M at March 31, 2024; we anchor to the filed figures and flag the transcript inconsistency .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2024	$240–$250M (as of Nov 8, 2023)	$215–$220M (as of Feb 7, 2024)	Lowered
Net Loss	FY2024	$(325)–$(345)M (as of Nov 8, 2023)	$(520)–$(525)M (as of Feb 7, 2024)	Lowered (wider loss)
Adjusted EBITDA	FY2024	$(160)–$(180)M (as of Nov 8, 2023)	$(180)–$(185)M (as of Feb 7, 2024)	Slightly lowered
Any Guidance	FY2025	—	No guidance provided (May 23, 2024)	Withdrawn

Context: Withdrawal tied to strategic alternatives review by Special Committee and CEO’s potential take-private proposal .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 and Q3)	Current Period (Q4)	Trend
Membership strategy	Introduced Total Health; moving to subscription; price increases to improve margins	Membership revenue +41%; retention improved; continued feature rollouts (Historical Matches, PRS cancer reports)	Improving retention and ARPU via subscription model
Telehealth economics	Margin expansion focus; UK disposal; reduced ads	Positive gross margins with lower ads; new OTC options and STENDRA launch	Improving economics, product breadth expanding
Research monetization	Non-exclusive GSK data license ($20M upfront); majority revenue recognized FY25	Reinforces database value; pursuing additional partners; AI models in development	Building pipeline of data licenses; AI-led insights
Therapeutics	23ME-00610 Phase I/IIa positive safety/prelim efficacy; 23ME-01473 IND accepted	Presenting 00610 data at ASCO June 1 & 3; dosing first 01473 patient; Phase I underway	Clinical progress continues; near-term readouts
Pricing & demand	Raised kit/subscription prices; holiday volumes impacted	Monitoring retention post price increases; renewals from May onward	Balancing margin vs volume
NASDAQ compliance	—	180-day extension to regain minimum bid; reverse split considered if appropriate	Regulatory listing overhang persists
Cybersecurity	Incident discussed; 2FA required; costs ~$2.7M offset by ~$1.7M insurance	Continued security emphasis and transparency	Operational risk being managed
AI initiatives	Focus on data + AI for drug discovery, consumer risk prediction	Building DNA language models; personalized recommendations; partner interest	Strategic enabler across segments

Management Commentary

“We are focusing on driving profitable growth in high-return uses of cash…prioritizing memberships…driving growth in telehealth and leveraging our data assets…” .
“Retention rates in Q4 improved…membership revenue grew by 41% year-over-year to $20 million…telehealth business has generated positive gross margins while decreasing advertising spend” .
“We are excited by recent advances in deep learning…train DNA language models…predict disease and provide compelling personalized health recommendations” .
“We will be presenting safety, efficacy and biomarker data…at ASCO…we’ve moved our second immuno-oncology asset, 23ME-01473 into the clinic” .
Financial discipline: “total adjusted EBITDA deficit for the fourth quarter was $33 million…we continue to be judicious with our cash usage” .

Q&A Highlights

Pricing and retention: Renewals post price increases expected from May onward; retention to be monitored in subsequent quarters .
Total Health rollout: Engineering-led upgrade path; broader launch to existing customers targeted for calendar Q3 .
Cash burn: Commitment to fund 00610 Phase IIa and 01473 Phase I while maintaining cost discipline and extending runway .
NASDAQ compliance: Focus on organic execution; reverse split contemplated under right conditions with approvals .
Partnerships/AI: Actively pursuing pharma collaborations leveraging the database; AI models aimed at better risk prediction and target discovery .

Estimates Context

S&P Global consensus estimates for Q4 FY2024 (Revenue, Primary EPS) were unavailable via our data connection for ME at the time of analysis; as a result, we cannot quantify beats/misses vs Wall Street (SPGI) for this quarter. If/when available, we will anchor comparisons on S&P Global consensus and update accordingly.
Given the absence of consensus, directional commentary centers on YoY declines (post-GSK exclusivity) and sequential improvements in adjusted EBITDA attributable to cost actions and unit economics .

Key Takeaways for Investors

Sequential improvement in adjusted EBITDA and gross profit with tight cost controls; watch for continued subscription-led mix shift and telehealth margin gains in FY2025 .
Strategic alternatives review and CEO’s potential take-private proposal are material stock catalysts; guidance withdrawn pending review .
Near-term clinical catalysts: ASCO data for 23ME-00610 (June 1 & 3) and ongoing 23ME-01473 Phase I enrollment; any supportive signals can reset therapeutics sentiment .
Research monetization: GSK non-exclusive data license validates database value; revenue recognition largely FY2025—track additional partners to diversify research services income .
Consumer pricing strategy: Higher ASPs and reduced ads lift margins but can pressure volumes; retention trends and membership ARPU will be key to sustainable growth .
Listing overhang persists with NASDAQ minimum bid extension; corporate actions (e.g., reverse split) possible later this year if conditions permit .
Data privacy/security management is ongoing with 2FA and costs partly insured; continued transparency mitigates customer trust risk .

23andMe Holding Co. (ME)·Q4 2024 Earnings Summary