Fulgent Genetics ((FLGT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Fulgent Genetics’ recent earnings call revealed a mixed sentiment, with the company showcasing robust revenue growth and advancements in clinical trials and partnerships. Despite these positive developments, the company reported a GAAP loss and anticipates lower operating margins due to ongoing investments in growth. Nevertheless, Fulgent remains optimistic about its future prospects and growth potential.
Record Fourth Quarter Growth
Fulgent Genetics reported a remarkable fourth-quarter revenue growth of 14% year over year and 6% sequentially, surpassing their annual core revenue guidance of $280 million. This growth underscores the company’s strong performance and strategic execution in the final quarter of the year.
Successful Clinical Trials
In 2024, Fulgent Genetics initiated a phase two clinical trial of FID-007, yielding promising preliminary results. Additionally, they submitted an Investigational New Drug (IND) application for FID-022, which received FDA clearance. The first patient enrollment for this trial is anticipated in Q2 2025, marking a significant milestone in their clinical development pipeline.
Strong Biopharma Services Growth
The company’s biopharma services segment experienced substantial growth, increasing by 56% quarter over quarter. Revenue rose from $3.9 million in Q3 to $6.1 million in Q4, reflecting the expanding demand for Fulgent’s biopharma offerings.
Significant Partnerships
Fulgent Genetics announced a strategic partnership with Foundation Medicine to launch two tests utilizing Fulgent’s proprietary technology. This collaboration is expected to enhance their market presence and drive future growth.
Improved Operational Efficiency
To bolster operational efficiency, Fulgent Genetics relocated their laboratory to Coppell, Texas, and consolidated their New York lab. These strategic moves are aimed at streamlining operations and reducing costs.
GAAP Loss for 2024
The company reported a GAAP loss of $42.7 million, equating to a loss of $1.41 per share for the year. This financial setback highlights the challenges Fulgent faces as it continues to invest in growth initiatives.
Lower Operating Margins Expected
Fulgent anticipates non-GAAP operating margins to decrease to approximately minus 15% for 2025, as the company prioritizes investments in growth and expansion.
Seasonal and Weather Impacts
The company expects Q1 2025 revenue to decline slightly from Q4 2024 levels due to healthcare benefit resets and adverse weather conditions in Texas, which could impact operations.
Forward-Looking Guidance
Fulgent Genetics provided guidance for 2025, projecting a 10% year-over-year growth in core revenue, totaling approximately $310 million. The company expects non-GAAP gross margins to slightly exceed 40% and anticipates a GAAP EPS loss of about $1.95 per share. They also forecast a cash burn of $25 million for their therapeutics development business. Despite these challenges, Fulgent is optimistic about its clinical pipeline and strategic partnerships, which are expected to drive future growth.
In summary, Fulgent Genetics’ earnings call highlighted a blend of strong revenue growth and strategic advancements, tempered by financial challenges and anticipated lower margins. The company’s commitment to growth through clinical trials and partnerships remains a focal point, with optimism for future opportunities. Investors will be keenly watching how Fulgent navigates these dynamics in the coming year.