Full-year 2023 revenue of $220 million, an
increase of 60% compared to 2022 and above previously reported
guidance
Delivered 70,429 total test reports in 2023, an
increase of 59% compared to 2022
Year-end 2023 cash, cash equivalents and
marketable investment securities of $243 million
Two critical peer-reviewed publications in 2023
demonstrating an association with DecisionDx®-Melanoma testing and
improved patient outcomes
Conference call and webcast today at 4:30 p.m.
ET
Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving
health through innovative tests that guide patient care, today
announced its financial results for the fourth quarter and year
ended Dec. 31, 2023.
“2023 was another exceptional year, with strong top-line growth
and test report volume growth, driven in large part by consistent
execution by the entire Castle team,” said Derek Maetzold,
president and chief executive officer of Castle Biosciences. “I am
extremely pleased with the continued success we saw from careful
investments in our initiatives. We expanded our body of evidence,
with data further demonstrating the potential of our tests to
improve patient outcomes, including increased survival. In
addition, our foundational dermatology business continued to expand
solidly, and growth in our TissueCypher® Barrett’s Esophagus test
outpaced our expectations.
“In our commitment to ongoing evidence development, we are
exceptionally proud of the progress we have made regarding
DecisionDx-Melanoma. The independent risk-stratification provided
by this test has already been demonstrated in numerous
retrospective and prospective studies, is supported with 50
peer-reviewed publications, and has been studied in more than
10,000 patients. In 2023, there were two critical peer-reviewed
publications demonstrating an association with DecisionDx-Melanoma
testing and improved patient outcomes. The first study demonstrated
that testing with DecisionDx-Melanoma was associated with lower
melanoma-specific and overall mortality relative to untested
patients (Bailey et al.), and the second demonstrated that patients
who received routine imaging after high-risk DecisionDx-Melanoma
test scores had an earlier recurrence diagnosis with lower tumor
burden, leading to better clinical outcomes, including improved
overall survival (Dhillon et al.). DecisionDx-Melanoma is the only
melanoma prognostic test shown to be associated with improved
patient survival.
“We are optimistic about continued commercial momentum in 2024
and will continue to focus on the needs of the patients and
clinicians who drive our business.”
Twelve Months Ended Dec. 31, 2023, Financial and Operational
Highlights
- Revenues were $219.8 million, a 60% increase compared to $137.0
million in 2022. Included in revenue for the year were revenue
adjustments related to tests delivered in prior periods. These
prior period revenue adjustments for the twelve months ended Dec.
31, 2023, were $4.5 million of net negative revenue adjustments,
compared to $2.0 million of net negative revenue adjustments for
2022.
- Adjusted revenues, which exclude the effects of revenue
adjustments related to tests delivered in prior periods, were
$224.3 million, a 61% increase compared to $139.0 million in
2022.
- Delivered 70,429 total test reports in 2023, an increase of 59%
compared to 44,419 in 2022:
- DecisionDx-Melanoma test reports delivered in 2023 were 33,330,
compared to 27,803 in 2022, an increase of 20%.
- DecisionDx®-SCC test reports delivered in 2023 were 11,442,
compared to 5,967 in 2022, an increase of 92%.
- MyPath® Melanoma and DiffDx®-Melanoma test reports delivered in
2023 were 3,962, compared to 3,561 in 2022, an increase of
11%.
- TissueCypher Barrett’s Esophagus test reports delivered in 2023
were 9,100, compared to 2,128 in 2022, an increase of 328%.
- IDgenetix® test reports delivered in 2023 were 10,921, compared
to 3,249 in 2022, an increase of 236%.
- DecisionDx®-UM test reports delivered in 2023 were 1,674,
compared to 1,711 in 2022, a decrease of 2%.
- Gross margin for 2023 was 75%, and adjusted gross margin was
80%, compared to 71% and 77%, respectively, for the same periods in
2022.
- Net cash used in operations was $5.6 million, compared to $41.7
million in 2022.
- Net loss for 2023, which includes non-cash stock-based
compensation expense of $51.2 million, was $57.5 million, compared
to $67.1 million in 2022.
- Adjusted EBITDA for 2023 was $(4.4) million, compared to
$(42.6) million in 2022.
Cash, Cash Equivalents and Marketable Investment
Securities
As of Dec. 31, 2023, the Company’s cash, cash equivalents and
marketable investment securities totaled $243.1 million.
Fourth Quarter Ended Dec. 31, 2023, Financial and Operational
Highlights
- Revenues were $66.1 million, a 72% increase compared to $38.3
million during the same period in 2022. Included in revenue for the
period were revenue adjustments related to tests delivered in prior
periods. These prior period revenue adjustments for the quarter
were $4.1 million of net negative revenue adjustments, compared to
$0.8 million of net positive revenue adjustments for the same
period in 2022.
- Adjusted revenues, which exclude the effects of revenue
adjustments related to tests delivered in prior periods, were $70.2
million, an 87% increase compared to $37.5 million for the same
period in 2022.
- Delivered 20,284 total test reports, an increase of 60%
compared to 12,644 in the same period of 2022:
- DecisionDx-Melanoma test reports delivered in the quarter were
8,591, compared to 7,301 in the fourth quarter of 2022, an increase
of 18%.
- DecisionDx-SCC test reports delivered in the quarter were
3,530, compared to 1,845 in the fourth quarter of 2022, an increase
of 91%.
- MyPath Melanoma test reports delivered in the quarter were
1,018, compared to 822 MyPath Melanoma and DiffDx-Melanoma
aggregate test reports in the fourth quarter of 2022, an increase
of 24%.
- TissueCypher Barrett’s Esophagus test reports delivered in the
quarter were 3,441, compared to 1,030 in the fourth quarter of
2022, an increase of 234%.
- IDgenetix test reports delivered in the quarter were 3,299,
compared to 1,214 in the fourth quarter of 2022, an increase of
172%.
- DecisionDx-UM test reports delivered in the quarter were 405,
compared to 432 in the fourth quarter of 2022, a decrease of
6%.
- Gross margin was 78%, and adjusted gross margin was 82%,
compared to 69% and 75%, respectively, for the same periods in
2022.
- Net cash provided by operations was $18.6 million, compared to
net cash used in operations of $6.0 million for the same period in
2022.
- Net loss, which includes non-cash stock-based compensation
expense of $11.8 million, was $2.6 million, compared to a net loss
of $20.6 million for the same period in 2022.
- Adjusted EBITDA was $9.4 million, compared to $(10.4) million
for the same period in 2022.
2024 Outlook
The Company anticipates generating between $235-240 million in
total revenue in 2024.
Fourth Quarter and Recent Accomplishments and
Highlights
Dermatology
- DecisionDx-Melanoma: In December 2023, the Company announced
the publication of a study in the Journal of the Advanced
Practitioner in Oncology that assessed the viewpoints of nurse
practitioners and physician assistants (NPs/PAs) toward the
clinical use of DecisionDx-Melanoma in patients diagnosed with
cutaneous melanoma (CM). The study found that more than 90% of the
NPs/PAs who completed a survey about DecisionDx-Melanoma believe
that prognostic (i.e., risk-stratification) information about a
patient’s melanoma is valuable and improves patient care. See the
Company’s news release from Dec. 1, 2023, for more
information.
- DecisionDx-Melanoma: In February 2024, the Company announced
the publication of a study in Cancers demonstrating that
DecisionDx-Melanoma provided significantly better risk
stratification than American Joint Committee on Cancer 8th Edition
(AJCC8) staging in patients with stage I CM. This study reports the
results of two large stage I cohorts, including 5,561 patients from
the National Cancer Institute’s Surveillance, Epidemiology and End
Results (SEER) Program Registries. It supports incorporating the
DecisionDx-Melanoma test into clinical practice to help clinicians
and patients with stage I melanoma obtain more precise information
about a patient’s risk of disease progression to inform more
personalized, risk-aligned treatment and surveillance management
plans.
- DecisionDx-SCC: In January 2024, the Company announced the
publication of a new study in the Journal of Clinical and Aesthetic
Dermatology (JCAD), which found that guiding adjuvant radiation
treatment (ART) using DecisionDx-SCC results can lead to
substantial Medicare healthcare savings of up to approximately $972
million annually. This cost reduction is primarily attributed to
avoiding direct costs of unnecessary ART in patients with low-risk
DecisionDx-SCC profiles and the appropriate selection of patient
treatment based on molecular risk assessment. Additionally,
integrating the objective DecisionDx-SCC test into the management
of ART-eligible high-risk cutaneous squamous cell carcinoma (SCC)
can identify those who may safely avoid ART who would, therefore,
have reduced complications, a net improvement in health outcomes
and reduced cost in the Medicare population. See the Company’s news
release from Jan. 18, 2024, for more information.
- DecisionDx-SCC: In February 2024, the Company announced the
publication of an expert consensus article in JCAD related to its
DecisionDx-SCC test. The expert multidisciplinary panel included
radiation oncologists and dermatologists/Mohs micrographic surgeons
with expertise in SCC management and provides risk-based clinical
recommendations and a workflow for use of ART in patients with
high-risk SCC to control disease progression. The suggested
workflow integrates DecisionDx-SCC testing and AJCC8 staging, based
on clinicopathologic risk factors, with the current National
Comprehensive Cancer Network (NCCN) guidelines to improve precision
in ART recommendations based on which patients are at the highest
risk for metastasis and most likely to benefit from treatment.
- In February 2024, the Company was notified that a new study,
titled “Inconsistent associations between risk factor profiles and
adjuvant radiation therapy (ART) treatment in patients with
cutaneous squamous cell carcinoma and utility of the 40-gene
expression profile to refine ART guidance,” was accepted for
publication in Dermatology and Therapy. The study shows that
including tumor biology-based risk stratification from the
DecisionDx-SCC test in ART decisions can refine risk and identify
appropriate SCC patients who are likely to benefit from ART
treatment, as well as those who can consider deferring it.
- In February 2024, the Company was notified that a new study,
titled “Integrating the 40-gene expression profile (40-GEP) test
improves metastatic risk-stratification within clinically relevant
subgroups of high-risk cutaneous squamous cell carcinoma (cSCC)
patients,” was accepted for publication in Dermatology and Therapy.
The study of 897 patients analyzed the independent performance of
DecisionDx-SCC from risk factors and staging systems, and
demonstrated improved predictive accuracy when integrated with the
NCCN, Brigham and Women’s Hospital (BWH) and AJCC8
clinicopathologic risk assessment systems to significantly enhance
risk-aligned treatment for patients.
Gastroenterology
- In October 2023, the Company announced new data demonstrating
the significant clinical utility of its TissueCypher Barrett’s
Esophagus test in guiding risk-aligned upstaging of care for
patients with non-dysplastic Barrett’s esophagus (BE) at a higher
risk of progression to high-grade dysplasia or esophageal
adenocarcinoma than indicated by their clinicopathologic risk
factors. See the Company’s news release from Oct. 2, 2023, for more
information.
Mental Health
- In November 2023, the Company announced data from a
single-site, open-label study demonstrating the consistent impact
of IDgenetix on medication response and remission rates in patients
with major depressive disorder (MDD). The study found that
real-world patient outcomes were strongly aligned to the results of
a previously published randomized controlled trial that
demonstrated IDgenetix-guided medication management significantly
improved response and remission rates for patients with MDD. See
the Company’s news release from Nov. 8, 2023, for more
information.
Pipeline Initiatives
- Uveal Melanoma: In November 2023, the Company announced new
discovery data from an ongoing study exploring the potential for
developing a minimally invasive test, complementary to
DecisionDx-UM, to evaluate small, suspicious lesions of uncertain
malignant potential in patients’ eyes. See the Company’s news
release from Nov. 3, 2023, for more information.
- Inflammatory Skin Disease: In November 2023, the Company
announced new data showing the ability of its pipeline test in
development to distinguish between responders and non-responders to
an atopic dermatitis (AD) therapy and also distinguish between AD,
psoriasis (PSO) and mycosis fungoides (MF) skin lesions. Additional
updates regarding development of this pipeline program are expected
in 2024. See the Company’s news release from Nov. 2, 2023, for more
information.
Corporate
- In November 2023, the Company announced that it was named a
Houston Chronicle Top Workplace for the third year in a row and
awarded three new Culture Excellence awards, recognizing the
Company in the areas of Employee Appreciation, Employee Well-Being
and Professional Development. See the Company’s news release from
Nov. 13, 2023, for more information.
- In January 2024, the Company announced that its chief operating
officer, Kristen Oelschlager, was named to The Healthcare
Technology Report’s Top 25 Women Leaders in Biotechnology of 2023.
The honorees “stand as a driving force, ensuring diverse
perspectives on scientific breakthroughs and groundbreaking
therapies,” according to the publication. See the Company’s news
release from Jan. 9, 2024, for more information.
Conference Call and Webcast Details
Castle Biosciences will hold a conference call on Wednesday,
Feb. 28, 2024, at 4:30 p.m. Eastern time to discuss its fourth
quarter and full-year 2023 results and provide a corporate
update.
A live webcast of the conference call can be accessed here:
https://events.q4inc.com/attendee/610272350 or via the webcast link
on the Investor Relations page of the Company’s website,
https://ir.castlebiosciences.com/overview/default.aspx.
Please access the webcast at least 10 minutes before the conference
call start time. An archive of the webcast will be available on the
Company’s website until March 20, 2024.
To access the live conference call via phone, please dial 833
470 1428 from the United States, or +1 404 975 4839
internationally, at least 10 minutes prior to the start of the
call, using the conference ID 036526.
There will be a brief Question & Answer session following
management commentary.
Use of Non-GAAP Financial Measures (UNAUDITED)
In this release, we use the metrics of Adjusted Revenues,
Adjusted Gross Margin and Adjusted EBITDA, which are non-GAAP
financial measures and are not calculated in accordance with
generally accepted accounting principles in the United States
(GAAP). Adjusted Revenues and Adjusted Gross Margin reflect
adjustments to GAAP net revenues to exclude net positive and/or net
negative revenue adjustments recorded in the current period
associated with changes in estimated variable consideration related
to test reports delivered in previous periods. Adjusted Gross
Margin further excludes acquisition-related intangible asset
amortization. Adjusted EBITDA excludes from net loss: interest
income, interest expense, income tax expense (benefit),
depreciation and amortization expense, stock-based compensation
expense, change in fair value of contingent consideration and
acquisition related transaction costs.
We use Adjusted Revenues, Adjusted Gross Margin and Adjusted
EBITDA internally because we believe these metrics provide useful
supplemental information in assessing our revenue and operating
performance reported in accordance with GAAP, respectively. We
believe that Adjusted Revenues, when used in conjunction with our
test report volume information, facilitates investors’ analysis of
our current-period revenue performance and average selling price
performance by excluding the effects of revenue adjustments related
to test reports delivered in prior periods, since these adjustments
may not be indicative of the current or future performance of our
business. We believe that providing Adjusted Revenues may also help
facilitate comparisons to our historical periods. Adjusted Gross
Margin is calculated using Adjusted Revenues and therefore excludes
the impact of revenue adjustments related to test reports delivered
in prior periods, which we believe is useful to investors as
described above. We further exclude acquisition-related intangible
asset amortization in the calculation of Adjusted Gross Margin. We
believe that excluding acquisition-related intangible asset
amortization may facilitate gross margin comparisons to historical
periods and may be useful in assessing current-period performance
without regard to the historical accounting valuations of
intangible assets, which are applicable only to tests we acquired
rather than internally developed. We believe Adjusted EBITDA may
enhance an evaluation of our operating performance because it
excludes the impact of prior decisions made about capital
investment, financing, investing and certain expenses we believe
are not indicative of our ongoing performance. However, these
non-GAAP financial measures may be different from non-GAAP
financial measures used by other companies, even when the same or
similarly titled terms are used to identify such measures, limiting
their usefulness for comparative purposes.
These non-GAAP financial measures are not meant to be considered
in isolation or used as substitutes for net revenues, gross margin
or net loss reported in accordance with GAAP; should be considered
in conjunction with our financial information presented in
accordance with GAAP; have no standardized meaning prescribed by
GAAP; are unaudited; and are not prepared under any comprehensive
set of accounting rules or principles. In addition, from time to
time in the future, there may be other items that we may exclude
for purposes of these non-GAAP financial measures, and we may in
the future cease to exclude items that we have historically
excluded for purposes of these non-GAAP financial measures.
Likewise, we may determine to modify the nature of adjustments to
arrive at these non-GAAP financial measures. Because of the
non-standardized definitions of non-GAAP financial measures, the
non-GAAP financial measure as used by us in this press release and
the accompanying reconciliation tables have limits in their
usefulness to investors and may be calculated differently from, and
therefore may not be directly comparable to, similarly titled
measures used by other companies. Accordingly, investors should not
place undue reliance on non-GAAP financial measures.
Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measures are presented in the
tables at the end of this release.
About Castle Biosciences
Castle Biosciences (Nasdaq: CSTL) is a leading diagnostics
company improving health through innovative tests that guide
patient care. The Company aims to transform disease management by
keeping people first: patients, clinicians, employees and
investors.
Castle’s current portfolio consists of tests for skin cancers,
Barrett’s esophagus, mental health conditions and uveal melanoma.
Additionally, the Company has active research and development
programs for tests in other diseases with high clinical need,
including its test in development to help guide systemic therapy
selection for patients with moderate-to-severe, atopic dermatitis,
psoriasis and related conditions. To learn more, please visit
www.CastleBiosciences.com and connect
with us on LinkedIn, Facebook, X and Instagram.
DecisionDx-Melanoma, DecisionDx-CMSeq, DecisionDx-SCC, MyPath
Melanoma, DiffDx-Melanoma, TissueCypher, IDgenetix, DecisionDx-UM,
DecisionDx-PRAME and DecisionDx-UMSeq are trademarks of Castle
Biosciences, Inc.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are subject to the “safe harbor” created by those
sections. These forward-looking statements include, but are not
limited to, statements concerning our expectations regarding: (i)
the potential of our tests to improve patient outcomes, including
increased survival; (ii) our continued commercial momentum in 2024;
(iii) the ability of DecisionDx-Melanoma to provide prognostic
information about a patient’s melanoma and improve patient care;
(iv) the ability of DecisionDx-SCC to lead to substantial Medicare
healthcare savings and to provide benefits related to reduced
complications, a net improvement in health outcomes, reduced cost
in the Medicare population and improved stratification of
metastatic risk; (v) the ability of our TissueCypher BE test to
guide risk-aligned upstaging of care; (vi) the ability of
IDgenetix-guided medication management to significantly improve
response and remission rates for patients with MDD; (vii) the
potential for developing a minimally invasive test, complementary
to DecisionDx-UM, to evaluate small, suspicious lesions of
uncertain malignant potential in patients’ eyes; and (viii) the
ability of our pipeline test in development to distinguish between
responders and non-responders to an AD therapy and also distinguish
between AD, psoriasis and mycosis fungoides skin lesions. The words
“anticipate,” “can,” “could,” “expect,” “goal,” “may,” “plan” and
similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. We may not actually achieve the plans,
intentions, or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our
forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in
the forward-looking statements that we make. These forward-looking
statements involve risks and uncertainties that could cause our
actual results to differ materially from those in the
forward-looking statements, including, without limitation: our
assumptions or expectations regarding continued reimbursement for
our DecisionDx-SCC test at the current rate and reimbursement for
our other products and subsequent coverage decisions, our estimated
total addressable markets for our products and product candidates
and the related expenses, capital requirements and potential needs
for additional financing, the anticipated cost, timing and success
of our product candidates, and our plans to research, develop and
commercialize new tests and our ability to successfully integrate
new businesses, assets, products or technologies acquired through
acquisitions, the effects of macroeconomic events and conditions,
including inflation and monetary supply shifts, labor shortages,
liquidity concerns at, and failures of, banks and other financial
institutions or other disruptions in the banking system or
financing markets and recession risks, supply chain disruptions,
outbreaks of contagious diseases and geopolitical events (such as
the ongoing Israel-Hamas War and Ukraine-Russia conflict), among
others, on our business and our efforts to address its impact on
our business; subsequent study or trial results and findings may
contradict earlier study or trial results and findings or may not
support the results discussed in this press release, including with
respect to the tests discussed in this press release; our planned
installation of additional equipment and supporting technology
infrastructures and implementation of certain process efficiencies
may not enable us to increase the future scalability of our
TissueCypher Test; actual application of our tests may not provide
the aforementioned benefits to patients; our newer gastroenterology
and mental health franchises may not contribute to the achievement
of our long-term financial targets as anticipated; and the risks
set forth under the heading “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2023, each filed or to be
filed with the SEC, and in our other filings with the SEC. The
forward-looking statements are applicable only as of the date on
which they are made, and we do not assume any obligation to update
any forward-looking statements, except as may be required by
law.
CASTLE BIOSCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
NET REVENUES
$
66,120
$
38,338
$
219,788
$
137,039
OPERATING EXPENSES AND OTHER OPERATING
INCOME
Cost of sales (exclusive of amortization
of acquired intangible asset)
12,423
9,520
44,982
32,009
Research and development
12,994
11,309
53,618
44,903
Selling, general and administrative
44,090
38,426
180,152
143,003
Amortization of acquired intangible
assets
2,271
2,215
9,013
8,266
Change in fair value of contingent
consideration
—
(300
)
—
(18,287
)
Total operating expenses, net
71,778
61,170
287,765
209,894
Operating loss
(5,658
)
(22,832
)
(67,977
)
(72,855
)
Interest income and other non-operating
income
3,119
2,275
10,623
3,968
Interest expense
(2
)
(4
)
(11
)
(17
)
Loss before income taxes
(2,541
)
(20,561
)
(57,365
)
(68,904
)
Income tax expense (benefit)
39
57
101
(1,766
)
Net loss
$
(2,580
)
$
(20,618
)
$
(57,466
)
$
(67,138
)
Loss per share, basic and diluted
$
(0.10
)
$
(0.78
)
$
(2.14
)
$
(2.58
)
Weighted-average shares outstanding, basic
and diluted
27,030
26,400
26,802
26,054
Stock-Based Compensation Expense
Stock-based compensation expense is included in the condensed
consolidated statements of operations as follows (in
thousands):
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
Cost of sales (exclusive of amortization
of acquired intangible assets)
$
1,219
$
1,030
$
4,938
$
3,755
Research and development
2,364
2,028
10,119
7,635
Selling, general and administrative
8,219
6,865
36,162
24,931
Total stock-based compensation expense
$
11,802
$
9,923
$
51,219
$
36,321
CASTLE BIOSCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
Net loss
$
(2,580
)
$
(20,618
)
$
(57,466
)
$
(67,138
)
Other comprehensive loss:
Net unrealized gain (loss) on
available-for-sale securities
207
(192
)
517
(381
)
Comprehensive loss
$
(2,373
)
$
(20,810
)
$
(56,949
)
$
(67,519
)
CASTLE BIOSCIENCES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
December 31, 2023
December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents
$
98,841
$
122,948
Marketable investment securities
144,258
135,677
Accounts receivable, net
38,302
23,476
Inventory
7,942
3,980
Prepaid expenses and other current
assets
6,292
6,207
Total current assets
295,635
292,288
Long-term accounts receivable, net
1,191
1,087
Property and equipment, net
25,433
14,315
Operating lease assets
12,306
12,181
Goodwill and other intangible assets,
net
117,335
126,348
Other assets – long-term
1,440
1,110
Total assets
$
453,340
$
447,329
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current Liabilities
Accounts payable
$
10,268
$
4,731
Accrued compensation
28,945
24,358
Operating lease liabilities
1,137
1,777
Other accrued and current liabilities
7,317
5,262
Total current liabilities
47,667
36,128
Noncurrent operating lease liabilities
14,173
11,533
Deferred tax liability
206
428
Other liabilities
25
90
Total liabilities
62,071
48,179
Stockholders’ Equity
Common Stock
27
27
Additional paid-in capital
609,477
560,409
Accumulated deficit
(218,371
)
(160,905
)
Accumulated other comprehensive income
(loss)
136
(381
)
Total stockholders’ equity
391,269
399,150
Total liabilities and stockholders’
equity
$
453,340
$
447,329
CASTLE BIOSCIENCES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
December 31,
2023
2022
OPERATING ACTIVITIES
Net loss
$
(57,466
)
$
(67,138
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
12,330
10,543
Stock-based compensation expense
51,219
36,321
Change in fair value of contingent
consideration
—
(18,287
)
Deferred income taxes
(223
)
(1,877
)
Accretion of discounts on marketable
investment securities
(5,491
)
(1,368
)
Other
635
158
Change in operating assets and
liabilities:
Accounts receivable
(14,930
)
(6,218
)
Prepaid expenses and other current
assets
(435
)
(1,224
)
Inventory
(3,962
)
(1,680
)
Operating lease assets
(258
)
991
Other assets
(330
)
618
Accounts payable
5,707
582
Operating lease liabilities
852
(608
)
Accrued compensation
4,587
8,495
Other accrued and current liabilities
2,139
(963
)
Net cash used in operating activities
(5,626
)
(41,655
)
INVESTING ACTIVITIES
Purchases of property and equipment
(13,621
)
(5,632
)
Asset acquisitions, net of cash and cash
equivalents acquired
—
547
Acquisition of business, net of cash and
cash equivalents acquired
—
(26,966
)
Proceeds from sale of property and
equipment
13
195
Purchases of marketable investment
securities
(189,075
)
(134,689
)
Proceeds from maturities of marketable
investment securities
186,500
—
Net cash used in investing activities
(16,183
)
(166,545
)
FINANCING ACTIVITIES
Proceeds from exercise of common stock
options
269
833
Payment of employees’ taxes on vested
restricted stock units
(5,134
)
(1,688
)
Proceeds from contributions to the
employee stock purchase plan
2,709
2,492
Repayment of principal portion of finance
lease liabilities
(142
)
(122
)
Net cash (used in) provided by financing
activities
(2,298
)
1,515
NET CHANGE IN CASH AND CASH
EQUIVALENTS
(24,107
)
(206,685
)
Beginning of year
122,948
329,633
End of year
$
98,841
$
122,948
CASTLE BIOSCIENCES, INC.
Reconciliation of Non-GAAP Financial
Measures (UNAUDITED)
The table below presents the reconciliation of adjusted revenues
and adjusted gross margin, which are non-GAAP financial measures.
See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for
further information regarding the Company's use of non-GAAP
financial measures.
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
(in thousands)
Adjusted
revenues
Net revenues (GAAP)
$
66,120
$
38,338
$
219,788
$
137,039
Revenue associated with test reports
delivered in prior periods
4,086
(806
)
4,476
1,987
Adjusted revenues (Non-GAAP)
$
70,206
$
37,532
$
224,264
$
139,026
Adjusted gross
margin
Gross margin (GAAP)1
$
51,426
$
26,603
$
165,793
$
96,764
Amortization of acquired intangible
assets
2,271
2,215
9,013
8,266
Revenue associated with test reports
delivered in prior periods
4,086
(806
)
4,476
1,987
Adjusted gross margin (Non-GAAP)
$
57,783
$
28,012
$
179,282
$
107,017
Gross margin percentage (GAAP)2
77.8
%
69.4
%
75.4
%
70.6
%
Adjusted gross margin percentage
(Non-GAAP)3
82.3
%
74.6
%
79.9
%
77.0
%
_____________
1.
Calculated as net revenues (GAAP)
less the sum of cost of sales (exclusive of amortization of
acquired intangible assets) and amortization of acquired intangible
assets.
2.
Calculated as gross margin (GAAP)
divided by net revenues (GAAP).
3.
Calculated as adjusted gross
margin (Non-GAAP) divided by adjusted revenues (Non-GAAP).
The table below presents the reconciliation of adjusted EBITDA,
which is a non-GAAP financial measure. See "Use of Non-GAAP
Financial Measures (UNAUDITED)" above for further information
regarding the Company's use of non-GAAP financial measures.
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
(in thousands)
Adjusted
EBITDA
Net loss
$
(2,580
)
$
(20,618
)
$
(57,466
)
$
(67,138
)
Interest income
(3,119
)
(2,275
)
(10,623
)
(3,968
)
Interest expense
2
4
11
17
Income tax expense (benefit)
39
57
101
(1,766
)
Depreciation and amortization expense
3,224
2,841
12,330
10,543
Stock-based compensation expense
11,802
9,923
51,219
36,321
Change in fair value of contingent
consideration
—
(300
)
—
(18,287
)
Acquisition related transaction costs
—
—
—
1,711
Adjusted EBITDA (Non-GAAP)
$
9,368
$
(10,368
)
$
(4,428
)
$
(42,567
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228282145/en/
Investor Relations Contact: Camilla Zuckero czuckero@castlebiosciences.com 281-906-3868
Media Contact: Allison Marshall amarshall@castlebiosciences.com
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