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Renalytix plc (RNLX)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 FY2024 delivered continued operational progress but modest revenue, with $0.535M revenue, gross loss of $0.066M, and diluted EPS of $(0.08) . Operational cash burn fell to $4.9M, nearly 40% lower than Q2 and 50% lower YoY, reflecting substantial cost discipline .
  • Commercial catalysts advanced: KDIGO guideline inclusion (only biomarker test for prognostic risk assessment), a draft Medicare LCD (NGS) for kidneyintelX.dkd, April FDA De Novo-authorized launch, and U.S. GWAC listing at $950 per reportable result .
  • Test volumes were 806 in Q3 with 82% billable, and independent primary care physician orders up 33% QoQ, highlighting early traction in direct-to-physician channels .
  • Formal strategic sale process initiated; subsequent CFO transition (May 28) signals continued alignment toward a sales/marketing-led execution phase .
  • Wall Street consensus (S&P Global) estimates unavailable due to mapping limitations; thus, no beat/miss determination versus Street for Q3 FY2024.

What Went Well and What Went Wrong

What Went Well

  • KDIGO guideline inclusion: “KidneyIntelX included as only biomarker test for prognostic risk assessment in landmark update of international clinical practice guidelines” .
  • Reimbursement momentum: Draft Medicare LCD for kidneyintelX.dkd issued by NGS and a GWAC listing at $950 per reportable result, expanding public-sector addressability .
  • Cost execution: Operating cash burn down to $4.9M (−40% QoQ, −50% YoY), and headcount down ~50% YoY with ~40% lower total operating costs, improving financial resilience .

What Went Wrong

  • Revenue softness: Q3 revenue of $0.535M declined vs Q2’s $0.709M and prior-year Q3’s $0.724M, while gross profit reverted to a small loss .
  • Persisting net losses: Q3 net loss of $(7.743)M, despite cost actions, underscores the need for accelerated adoption and reimbursement broadening .
  • Mixed quarterly volume trajectory: Q3 total tests (806) trailed Q1 (1,297), though billable mix improved to 82% and primary care orders rose 33% QoQ; sustained volume ramp remains a priority .

Financial Results

Metric (USD)Q1 FY2024Q2 FY2024Q3 FY2024
Revenues ($ Thousands)459 709 535
Gross Profit ($ Thousands)(43) 229 (66)
Total Operating Expenses ($ Thousands)8,846 8,870 6,487
Net Loss ($ Thousands)(10,154) (8,485) (7,743)
Diluted EPS ($)(0.11) (0.09) (0.08)
Cash & Equivalents ($ Thousands)13,891 5,619 4,704

KPIs

KPIQ1 FY2024Q2 FY2024Q3 FY2024
Total Test Volume1,297 — (billable 734, 69% of all tests) 806
Billable % of Tests56% 69% 82%
Independent Primary Care Physician Orders (QoQ)——+33% QoQ
GWAC Price per Reportable Result——$950
Operating Cash Burn——$4.9M (−40% QoQ; −50% YoY)

Notes:

  • Q2 provides billable tests (734) and billable mix (69%) but does not give total tests in the press release .
  • No S&P Global estimate comparison due to unavailability (see “Estimates Context”).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 FY2024None provided in prior releases None provided Maintained (no guidance)
Operating Cash BurnQ3 FY2024Target: ~33% less than prior quarter and ~50% less than Q1 FY2024 (stated as goal entering Q3) Actual: $4.9M; −40% QoQ; −50% YoY Achieved/Improved vs targets
OpEx/HeadcountFY2024 trendCost-cut plan underway Headcount −50% YoY; total costs ~−40% Lowered
ReimbursementCY2024Proposed LCD (Feb 8); CMS fee schedule at $950 Draft LCD (NGS) for kidneyintelX.dkd; expecting final issuance near term Progressing
Product LaunchQ2–Q3 FY2024FDA De Novo authorization late 2023 Formal launch of kidneyintelX.dkd in April 2024 Initiated

No guidance provided for margins, OI&E, tax, segment specifics, or dividends in the reviewed documents .

Earnings Call Themes & Trends

TopicQ1 FY2024 MentionsQ2 FY2024 MentionsQ3 FY2024 Current PeriodTrend
Regulatory/ReimbursementCMS pricing recommended at $950; NCD application submitted; contractor payments resuming CMS fee schedule at $950; proposed LCD published; NGS resumed consistent payment under ICR Draft LCD for kidneyintelX.dkd; KDIGO guideline inclusion; expectation of near-term final LCD Strengthening pathway to broad coverage
Commercial AdoptionEPIC roll-out progressing; new hospital launches; focus on sales alignment Billable mix improved (69%); Medicare payments resuming; continued payer gains 806 tests; 82% billable; +33% QoQ in independent PCP orders; formal product launch Building early traction in PCP channel
Cost Discipline/Cash RunwayHeadcount and SG&A reductions underway; financing discussions OpEx down; targeted cash burn reduction Operating cash burn down 40% QoQ; headcount −50% YoY; total costs −40% Material improvement
Strategic Alternatives——Strategic sale process initiated; multiple potential acquirers in discussions New strategic track
Organization/LeadershipSales focus via organizational changes —CFO transition post-call (May 28); moving into sales/marketing execution phase Aligning leadership with GTM focus
Product Performance/OutcomesOutcomes evidence submitted/published (ADA) Continued real-world evidence; contractor payments Launch of FDA-authorized test and KDIGO inclusion; new evidence noted Validation supports adoption narrative

Earnings call sources: Seeking Alpha transcript (May 15, 2024) , Marketscreener transcript , GuruFocus summary .

Management Commentary

  • Prepared remarks emphasized multi-pronged progress: “The Company made continued progress towards commercial adoption… Formal launch of the FDA-authorized kidneyintelX.dkd in April 2024… U.S. government added… GWAC at $950 per reportable result… Total volume of 806 tests during the quarter, of which 82% were billable” .
  • On cost and phase of execution: “We are pleased with the breadth of cost reductions… We are fortunate to have crossed all the key milestones necessary to become a standard of care… we are now well-positioned to become a sales and marketing play in a large and open market space.” — James McCullough (May 28 management change release) .

Q&A Highlights

  • Reimbursement timeline: Management reiterated expectation of near-term final LCD following the NGS draft issuance for kidneyintelX.dkd ; see Q3 call transcript sources .
  • Commercial traction and channel focus: Highlighted 33% QoQ increase in independent PCP orders and emphasis on streamlined ordering and access, consistent with a sales-led execution phase .
  • Cost trajectory and cash discipline: Discussed sustained OpEx reductions and improved cash burn versus prior quarters; reinforced alignment with commercial ramp .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 FY2024 EPS and revenue was unavailable due to missing CIQ mapping for RNLX in the SPGI dataset at the time of request. As a result, we cannot provide a beat/miss comparison versus Street. We attempted retrieval via S&P Global but received a mapping error.
  • Consequently, investors should anchor on reported actuals and qualitative catalysts until estimates are available for comparison . Values retrieved from S&P Global were unavailable due to mapping constraints.

Key Takeaways for Investors

  • Reimbursement and guideline catalysts are converging (KDIGO inclusion, NGS LCD draft, CMS/GWAC pricing), supporting adoption and potential payer expansion; monitor final LCD timing as a near-term stock catalyst .
  • Cost actions are materially reducing cash burn and OpEx; sustaining this trajectory improves runway and reduces financing needs, but scale requires accelerating billable volumes and payer breadth .
  • Early PCP traction (+33% QoQ orders) and 82% billable mix in Q3 show initial commercial progress; watch for sustained multi-quarter momentum and hospital systems integration milestones .
  • Strategic sale process introduces optionality; leadership changes (CFO transition) align with commercial execution; any transaction indications could be a significant driver .
  • Revenue remains modest relative to expense base; the thesis hinges on reimbursement clarity and adoption velocity post-FDA De Novo authorization and guideline inclusion .
  • Without Street estimates, focus on internal KPIs (test volumes, billable %, cash burn) and reimbursement milestones to gauge trajectory; re-rate potential tied to proof of commercial scalability .
  • Near-term trading implication: headlines around final LCD and strategic alternatives; medium-term thesis: operating leverage via higher volumes and payer coverage turning gross losses into sustained positive gross profit .

Sources:

  • Q3 FY2024 8-K and Exhibit 99.1 press release, statements of operations, balance sheet, cash flows .
  • Q2 FY2024 8-K and Exhibit 99.1 press release .
  • Q1 FY2024 8-K and Exhibit 99.1 press release .
  • Management change announcement (May 28, 2024) .
  • External press release and call hosting links: GlobeNewswire , Renalytix IR event page , Renalytix site press release .
  • Earnings call transcripts: Seeking Alpha , Marketscreener , GuruFocus summary .