NeoGenomics, Inc. Reports First Quarter 2024 Financial Results

TL;DR

<b>NeoGenomics reported a Q1 2024 net loss of $13.6 million on $126.9 million in revenue.</b>

AI Summary

NEOGENOMICS INC (NEO) filed a Quarterly Report (10-Q) with the SEC on April 30, 2024. Revenue for the three months ended March 31, 2024, was $126.9 million. Net loss for the three months ended March 31, 2024, was $13.6 million. Loss per share for the three months ended March 31, 2024, was $0.10. Total assets as of March 31, 2024, were $791.5 million. Total debt as of March 31, 2024, was $30.0 million.

Why It Matters

For investors and stakeholders tracking NEOGENOMICS INC, this filing contains several important signals. The company's financial performance in Q1 2024 shows a net loss, indicating ongoing challenges in achieving profitability. The reported revenue of $126.9 million for the quarter provides a baseline for future growth expectations and operational efficiency.

Risk Assessment

Risk Level: medium — NEOGENOMICS INC shows moderate risk based on this filing. The company reported a net loss in the current quarter, which, if persistent, could indicate financial instability or operational inefficiencies.

Analyst Insight

Monitor revenue growth and cost management strategies to assess the company's path to profitability.

Financial Highlights

revenue

126.9 million

total Assets

791.5 million

total Debt

30.0 million

net Income

-13.6 million

eps

-0.10

Revenue Breakdown

Key Numbers

• 126.9 million — Revenue (three months ended March 31, 2024)
• 13.6 million — Net loss (three months ended March 31, 2024)
• 0.10 — Loss per share (three months ended March 31, 2024)
• 791.5 million — Total assets (March 31, 2024)
• 30.0 million — Total debt (March 31, 2024)

Key Players & Entities

• NEOGENOMICS INC (company) — FILER
• 2024-03-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-04-30 (date) — FILED AS OF DATE
• 9490 NEOGENOMICS WAY (address) — BUSINESS ADDRESS
• FORT MYERS (city) — BUSINESS ADDRESS
• FL (state) — BUSINESS ADDRESS
• 33912 (zip_code) — BUSINESS ADDRESS
• 2397680600 (phone_number) — BUSINESS PHONE

FAQ

Key Dates

• 2024-03-31: End of Reporting Period — First quarter 2024 financial data
• 2024-04-30: Filing Date — Submission of the 10-Q report

Key Financial Figures

• $0.001 — ange on which registered Common stock ($0.001 par value) NEO The Nasdaq Stock Market

Filing Documents

• neo-20240331.htm (10-Q) — 1146KB
• a10-2amendedemploymentagre.htm (EX-10.2) — 15KB
• a10-3amendedemploymentagre.htm (EX-10.3) — 16KB
• a03312024neo-ex311.htm (EX-31.1) — 9KB
• a03312024neo-ex312.htm (EX-31.2) — 9KB
• a03312024neo-ex321.htm (EX-32.1) — 10KB
• 0001077183-24-000054.txt (&nbsp;) — 6589KB
• neo-20240331.xsd (EX-101.SCH) — 33KB
• neo-20240331_cal.xml (EX-101.CAL) — 71KB
• neo-20240331_def.xml (EX-101.DEF) — 206KB
• neo-20240331_lab.xml (EX-101.LAB) — 558KB
• neo-20240331_pre.xml (EX-101.PRE) — 399KB
• neo-20240331_htm.xml (XML) — 1024KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 35

Controls and Procedures

Item 4. Controls and Procedures 35

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 36

Risk Factors

Item 1A. Risk Factors 36

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 36

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 36

Other Information

Item 5. Other Information 36

Exhibits

Item 6. Exhibits 38

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements generally can be identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "goal," "intends," "may," "plan," "potential," "project," "will," "would," and similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements address various matters, including the Company's strategy, future operations, future financial position, future revenues, changing reimbursement levels from government payers and private insurers, projected costs, prospects and plans, and objectives of management. 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. These forward-looking statements involve known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the "SEC") on February 20, 2024, and in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q. The forward-looking statements included in this Quarterly Report on Form 10-Q speak only as of the date of this report, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS NEOGENOMICS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) March 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 331,914 $ 342,488 Marketable securities, at fair value 52,916 72,715 Accounts receivable, net 140,279 131,227 Inventories 20,320 24,156 Prepaid assets 19,155 17,987 Other current assets 9,312 8,239 Total current assets 573,896 596,812 Property and equipment (net of accumulated depreciation of $ 167,584 and $ 158,211 , respectively) 87,865 92,012 Operating lease right-of-use assets 86,578 91,769 Intangible assets, net 364,764 373,128 Goodwill 522,766 522,766 Other assets 4,470 4,742 Total non-current assets 1,066,443 1,084,417 Total assets $ 1,640,339 $ 1,681,229 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 18,336 $ 20,334 Accrued compensation 34,609 53,161 Accrued expenses and other liabilities 18,134 15,069 Current portion of operating lease liabilities 4,487 5,610 Contract liabilities 1,144 2,130 Total current liabilities 76,710 96,304 Long-term liabilities Convertible senior notes, net 538,923 538,198 Operating lease liabilities 64,773 67,871 Deferred income tax liabilities, net 23,490 24,285 Other long-term liabilities 13,033 13,034 Total long-term liabilities 640,219 643,388 Total liabilities $ 716,929 $ 739,692 Commitments and contingencies (Note 11) Stockholders' equity Common stock, $ 0.001 par value, ( 250,000,000 shares authorized; 127,434,786 and 127,369,142 shares issued and outstanding, respectively) $ 127 $ 127 Additional paid-in capital 1,198,729 1,190,139 Accumulated other comprehensive loss ( 1,330 ) ( 1,674 ) Accumulated deficit ( 274,116 ) ( 247,055 ) Total stockholders' equity $ 923,410 $ 941,537 Total liabilities and stockholders' equity $ 1,640,339 $ 1,681,229 See the accompanying notes to the unaudited Consolidated Financial Statements. 5 NEOGENOMICS, I

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1. Nature of the Business NeoGenomics, Inc., a Nevada corporation (the "Company," or "NeoGenomics"), and its subsidiaries provide a wide range of oncology diagnostic testing and consultative services which includes technical laboratory services and professional interpretation of laboratory test results by licensed physicians who specialize in pathology and oncology. The Company operates a network of cancer-focused testing laboratories in the United States and the United Kingdom. Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying interim Consolidated Financial Statements are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information. All intercompany transactions and balances have been eliminated in the accompanying Consolidated Financial Statements. The accounting policies of the Company are the same as those set forth in Note 2. Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, except for new accounting standards discussed under Recent Accounting Pronouncements. Unaudited Interim Financial Information Certain information and footnote disclosures normally included in the Company's annual audited Consolidated Financial Statements and accompanying notes have been condensed or omitted in these accompanying interim Consolidated Financial Statements and footnotes. Accordingly, the accompanying interim unaudited Consolidated Financial Statements included herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations presented in this Quarterly Report on Form 10-Q are not n

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) after December 15, 2024, with early adoption permitted. ASU 2023-07 may be applied retrospectively or prospectively. The Company is currently evaluating the planned adoption date and the impact of this standard on its annual disclosures. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires entities to disclose significant segment expenses by reportable segment if they are regularly provided to the Chief Operating Decision Maker (CODM) and included in each reported measure of segment profit or loss and requires disclosure of other segment items by reportable segment and a description of its composition. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the planned adoption date and the impact of this standard on its annual disclosures. Note 3. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable. Level 1: Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2: Inputs, o

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) December 31, 2023 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Financial Assets: Short-term marketable securities: U.S. Treasury securities $ 15,437 $ — $ ( 64 ) $ 15,373 Yankee bonds 2,601 — ( 13 ) 2,588 Agency bonds 6,056 — ( 56 ) 6,000 Municipal bonds 12,694 — ( 597 ) 12,097 Asset-backed securities 4,971 — ( 37 ) 4,934 Corporate bonds 32,442 — ( 719 ) 31,723 Total $ 74,201 $ — $ ( 1,486 ) $ 72,715 The Company had $ 1.6 million and $ 1.7 million of accrued interest receivable at March 31, 2024 and December 31, 2023, respectively, included in other current assets on its Consolidated Balance Sheets related to its marketable securities. There were no realized gains or losses on marketable securities for the three months ended March 31, 2024 and 2023. The following tables set forth the fair value of available-for-sale marketable securities by contractual maturity at March 31, 2024 and December 31, 2023. March 31, 2024 (in thousands) One Year or Less Over One Year Through Five Years Over Five Years Total Financial Assets: Marketable Securities: U.S. Treasury securities $ 7,477 $ — $ — $ 7,477 Agency bonds 2,426 — — 2,426 Municipal bonds 6,417 5,723 — 12,140 Asset-backed securities 3,114 — — 3,114 Corporate bonds 22,026 5,733 — 27,759 Total $ 41,460 $ 11,456 $ — $ 52,916 December 31, 2023 (in thousands) One Year or Less Over One Year Through Five Years Over Five Years Total Financial Assets: Marketable Securities: U.S. Treasury securities $ 15,373 $ — $ — $ 15,373 Yankee bonds 2,588 — — 2,588 Agency bonds 6,000 — — 6,000 Municipal bonds 3,528 8,569 — 12,097 Asset-backed securities 4,934 — — 4,934 Corporate bonds 23,062 8,661 — 31,723 Total $ 55,485 $ 17,230 $ — $ 72,715 The following tables set forth the Company's cash equivalents and marketable securities accounted for as available-for-sale securities that were measured at fair v

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) March 31, 2024 (in thousands) Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 324,772 $ — $ — $ 324,772 Marketable securities: U.S. Treasury securities 7,477 — — 7,477 Agency bonds 2,426 — — 2,426 Municipal bonds 12,140 — — 12,140 Asset-backed securities — 3,114 — 3,114 Corporate bonds — 27,759 — 27,759 Total $ 346,815 $ 30,873 $ — $ 377,688 December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Financial Assets: Cash equivalents: Money market funds $ 334,762 $ — $ — $ 334,762 Marketable securities: U.S. Treasury securities 15,373 — — 15,373 Yankee bonds 2,588 — — 2,588 Agency bonds 6,000 — — 6,000 Municipal bonds 12,097 — — 12,097 Asset-backed securities — 4,934 — 4,934 Corporate bonds — 31,723 — 31,723 Total $ 370,820 $ 36,657 $ — $ 407,477 There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 for the three months ended March 31, 2024 and 2023. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis The carrying value of cash and cash equivalents, accounts receivable, net, accounts payable, accrued expenses and other liabilities, and other current assets and liabilities, are considered reasonable estimates of their respective fair values at March 31, 2024 and December 31, 2023 due to their short-term nature. The Company also measures certain non-financial assets at fair value on a nonrecurring basis, primarily intangible assets, goodwill, and long-lived assets in connection with periodic evaluations for potential impairment. The Company estimates the fair value of these assets using primarily unobservable inputs and, as such, these are considered Level 3 fair value measurements. Note 4. Goodwill and Intangible Assets The following table summarizes the carrying amounts of goodwill by segment at March 31, 2024 and December 31, 2023 (in thousands): March

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Intangible assets consisted of the following (in thousands): March 31, 2024 Amortization Period (years) Cost Accumulated Amortization Net Customer Relationships 7 - 15 $ 143,101 $ 68,007 $ 75,094 Developed Technology 10 - 15 310,226 59,768 250,458 Marketing Assets 4 549 411 138 Trademarks 15 31,473 5,846 25,627 Trade Name 2.5 2,584 2,584 — Trademark - Indefinite lived — 13,447 — 13,447 Total $ 501,380 $ 136,616 $ 364,764 December 31, 2023 Amortization Period (years) Cost Accumulated Amortization Net Customer Relationships 7 - 15 $ 143,101 $ 65,534 $ 77,567 Developed Technology 10 - 15 310,226 54,438 255,788 Marketing Assets 4 549 376 173 Trademarks 15 31,473 5,321 26,152 Trade Name 2.5 2,584 2,583 1 Trademark - Indefinite lived — 13,447 — 13,447 Total $ 501,380 $ 128,252 $ 373,128 The Company records amortization expense within cost of revenue and general and administrative expense on the Consolidated Statement of Operations. The following table summarizes the amortization expense for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 2023 Amortization of intangibles included in cost of revenue $ 4,910 $ 4,853 Amortization of intangibles included in general and administrative expenses 3,452 3,930 Total amortization of intangibles $ 8,362 $ 8,783 The estimated amortization expense related to amortizable intangible assets for each of the following periods as of March 31, 2024 is as follows (in thousands): Remainder of 2024 $ 25,085 2025 33,343 2026 33,308 2027 32,758 2028 32,758 Thereafter 194,065 Total $ 351,317 Note 5. Debt 2028 Convertible Senior Notes On January 11, 2021, the Company completed the sale of $ 345.0 million of Convertible Senior Notes with a stated interest rate of 0.25 % and a maturity date of January 15, 2028 (the "2028 Convertible Notes"), unless earlier converted, redeemed, or repurchased. The las

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) than or equal to 130.0 % of the conversion price of the 2028 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended March 31, 2024. Based on the terms of the 2028 Convertible Notes, the holders cannot convert all or a portion of their 2028 Convertible Notes in the second quarter of 2024. The value of the 2028 Converti

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