Executive Summary

Q4 2024 revenue rose 64% year over year to $95.3M and 24% sequentially, driven by exome/genome revenue up 101% YoY to $78.8M; adjusted gross margin expanded to 70% and adjusted net income reached $16.8M .
Management issued FY 2025 guidance: revenue $350–$360M, adjusted gross margin 65–67%, and adjusted net income positive each quarter and full-year; exome/genome volume and revenue growth of at least 30% .
Exome/genome volume hit 20,676 tests, representing 38% of all test results (up from 33% in Q3), supported by reduced denials and expanding Medicaid coverage (32 states outpatient, 14 states NICU) and underlying reimbursement improving to ~$3,500/test in Q4 excluding discrete benefit .
Key catalysts: launch of ultraRapid Whole Genome Sequencing (48-hour turnaround) and Epic Aura integration to embed ordering/results into health-system workflows, plus a planned 2025 exit of hereditary cancer to focus capital on exome/genome NICU/outpatient growth .

What Went Well and What Went Wrong

What Went Well

Exome/genome mix shift and pricing discipline: exome/genome tests accounted for 38% of total volume in Q4 (33% in Q3) with underlying reimbursement improving to ~$3,500/test (ex-denial true-ups), up from ~$3,100 in Q3 and ~$2,500 in Q4 2023; management emphasized reduced denials and policy wins driving better payment rates .
Margin and profitability: adjusted gross margin expanded to 70% (64% in Q3) and adjusted net income reached $16.8M (second consecutive profitable quarter), reflecting cost-per-test reductions and operating rigor; GAAP net income was $5.4M .
Strategic product and channel progress: launch of ultraRapid WGS (48-hour TAT), enhancements to WGS (cheek swabs, content additions), and Epic Aura live with first site (UNC) to accelerate NICU and enterprise ramp in 2H 2025 .

Quotes:

“Our fourth quarter results surpassed expectations with revenues exceeding $95 million and gross margins expanding to 70%.” — Katherine Stueland, CEO .
“Average reimbursement… after all denials was approximately $3,500… up from $3,100 last quarter and… ~$2,500 a year ago.” — Kevin Feeley, CFO .

What Went Wrong

Discrete benefit and non-core contribution: Q4 results include $6.8M discrete appeal recovery (benefiting revenue, margins, adjusted net income), which is non-recurring; GAAP vs adjusted results diverge due to non-GAAP adjustments and one-time items .
Hereditary cancer exit: business to be exited in 2025 (≈40% gross margin) reduces revenue contribution; while accretive to focus, it removes a revenue stream and heightens reliance on exome/genome execution .
Operating expense step-up: management flagged a ~$5M annual OpEx increase for Epic Aura and broader investments in commercial and automation, tempering near-term operating leverage even as they commit to adjusted profitability each quarter .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$68.9	$76.6	$95.3
GAAP Net Income ($USD Millions)	$(29.2)	$(8.3)	$5.4
Adjusted Net Income ($USD Millions)	$(2.7)	$1.2	$16.8
Adjusted Gross Margin %	62%	64%	70%
GAAP Gross Margin %	61%	62%	69%
Exome/Genome Volume (units)	18,017	19,262	20,676
Exome/Genome Mix (%)	31%	33%	38%
GAAP EPS ($USD)	$(1.10)	$(0.31)	N/A (not provided in Q4 8‑K)

Segment breakdown (Revenue):

Segment ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Whole Exome/Genome	$50.7	$60.0	$78.8
Hereditary Cancer	$3.8	$3.3	$2.8
Other Panels	$13.3	$13.8	$12.3
Data Information	$1.1	$(0.5)	$1.4
Total	$68.9	$76.6	$95.3

KPIs:

KPI	Q2 2024	Q3 2024	Q4 2024
Adjusted Total OpEx ($USD Millions)	$45.0	$46.6	$49.0
Cash, Cash Equivalents, Marketable Securities & Restricted Cash ($USD Millions)	$107.8	$117.4	$142.2
Underlying Exome/Genome Reimbursement Rate (approx, $/test)	N/A	~$3,100	~$3,500
Discrete Appeal Recovery Benefit ($USD Millions)	N/A	N/A	$6.8

Notes: Q4 results include a discrete $6.8M appeal recovery (allocated $5.8M to exome/genome and $1.0M to other tests), which benefited revenue, margins, and adjusted net income . Reimbursement rates cited by management are approximate .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2024	$255–$265M (Q2)	$284–$290M (Q3)	Raised
Adjusted Gross Margin %	FY 2024	≥60% (Q2)	≥62% (Q3)	Raised
Net Cash Use ($USD Millions)	FY 2024	$65–$70M (Q2)	$60–$65M (Q3)	Improved (lower)
Revenue ($USD Millions)	FY 2025	N/A	$350–$360M	New
Adjusted Gross Margin %	FY 2025	N/A	65–67%	New
Adjusted Net Income	FY 2025	N/A	Positive each quarter and full-year	New
Business Mix	FY 2025	N/A	Exit hereditary cancer in 2025	Strategic shift

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2, Q3)	Current Period (Q4)	Trend
AI/automation and cost/TAT	Reinvesting in genome; reducing rWGS TAT to 5 days; automation plans (Q2)	UltraRapid WGS (48 hours) and coupling clinically enriched data with AI/ML/automation to further reduce costs/TAT	Improving (accelerating)
Payor coverage / reimbursement	EPSDT and expanding Medicaid coverage; 28–30 states exome/genome; 14 states rWGS (Q2/Q3)	32 states outpatient exome/genome; 14 states NICU; underlying reimbursement ~$3,500/test; denials still ~50% but improving	Improving (coverage and realized rates)
NICU product/channel	rWGS improvements; Epic Aura planned H1’25 (Q3)	UltraRapid WGS launch; NICU TAM ≈$1B; Epic Aura live at UNC and pipeline building	Ramping (2H2025)
Outpatient neurology expansion	Focus on epilepsy, autism, ID/DD (Q2/Q3)	New indications targeted: cerebral palsy, hearing loss; build inside sales for productivity	Broadening
Newborn screening (gNBS)	GUARDIAN presented in JAMA; >14k infants screened (Q3)	Findings in JAMA: 3.2% true positives; 92% not detected by traditional NBS; >17k screened to date	Advancing evidence base
Business mix optimization	Genome-first focus (Q2/Q3)	Exit hereditary cancer in 2025 to concentrate capital on exome/genome	Refocusing

Management Commentary

“Fueled by our 2024 and early 2025 momentum, we're setting guidance for 2025 to a range of $350 million to $360 million in revenue with at least 30% growth in exome and genome volume and revenue.” — Katherine Stueland .
“Average reimbursement… was approximately $3,500… up from $3,100 last quarter and… ~$2,500… last year. Our work to refine insurance-specific workflow… and activation of additional state Medicaid policies… are both contributing.” — Kevin Feeley .
“We did deliver the Epic Aura integration ahead of schedule… expect a second half ramp in the NICU… turning on new indications… cerebral palsy… hearing loss.” — Kevin Feeley .
“Hereditary cancer is a noncore fit… we are exiting in 2025.” — Kevin Feeley .

Q&A Highlights

Pricing/reimbursement trajectory: Management sees rates “stable” with room to go higher as denials are reduced; Q4 underlying reimbursement ~$3,500/test excluding discrete benefit .
Profitability/OpEx cadence: OpEx will step up (Epic ≈$5M/year), but management is committed to adjusted net income positive each quarter; Q1 near breakeven then ramp through the year .
NICU and new indications: NICU ramp expected in 2H 2025; additional outpatient indications (cerebral palsy, hearing loss) to drive same-store growth .
Epic Aura rollout: First site UNC live; subsequent sites expected to integrate in ~2–3 weeks each, improving bedside ordering/results workflow .
Business mix: Exit hereditary cancer (~40% GM) to focus resources on exome/genome growth .

Estimates Context

Wall Street consensus estimates via S&P Global were unavailable at the time of query due to data access limits, so we cannot provide vs-consensus comparisons for Q4 2024 results or FY guidance (Values were not retrievable from S&P Global).
In the absence of consensus, directional inference: Q4 exceeded internal expectations per management narrative; however, formal beat/miss vs Street cannot be determined from available data .

Key Takeaways for Investors

Exome/genome engine is scaling: rapid volume growth, mix shift to 38% of results, and improved realized reimbursement underpin expanding margins and adjusted profitability momentum into 2025 .
Structural growth catalysts: ultraRapid WGS and Epic Aura unlock NICU and enterprise workflows; outpatient indications broaden beyond neurology, supporting 2H weighted ramp in 2025 .
Focused portfolio: exit of hereditary cancer re-allocates capital to core exome/genome businesses, likely accretive to growth/margin trajectory despite revenue runoff from non-core tests .
Non-GAAP adjustments matter: Q4 included a $6.8M discrete appeal recovery; investors should normalize for one-time benefits when assessing run-rate margins and net income .
Policy tailwinds: expanding Medicaid coverage (32 states outpatient, 14 NICU) and reduced denials support sustained reimbursement rate improvement and cash conversion .
Execution watchpoints: OpEx rising for Epic and scale investments, but management reiterates adjusted net income positive each quarter; monitor automation benefits and NICU adoption curve .
Near-term trading: 2H 2025 ramp narrative (NICU, Epic installs) and continued reimbursement improvements are key stock catalysts; absence of consensus comparisons suggests focusing on sequential growth/margin trajectory and pipeline milestones .

GeneDx Holdings Corp. (WGS)·Q4 2024 Earnings Summary