23andMe stock falls on widening loss

23andMe Holding Co. ME stock,

Slumped nearly 7% in after-hours trading after the genetic testing company saw its loss for the fiscal fourth quarter widening and issued guidance that expects the loss to widen further.

The company reported a loss of $69.5 million for the three months ended March 31, compared to $67 million a year earlier. The company said its loss was 16 cents a share compared to 59 cents a share a year earlier. During that period, the number of outstanding shares used to calculate net loss has nearly quadrupled.

Revenue rose 14% to $100.6 million. The increase was primarily due to the company’s acquisition of Lemonaid Health as well as higher research services revenue.

The company noted that the company prioritizes minimizing cash burn over revenue growth in its existing consumer personal genome service and telemedicine businesses.

“In the coming fiscal year, we plan to be more cautious overall in our use of cash, prioritizing the launch of our next-generation genomic health service and advancing our therapeutic efforts,” Steve Schoch, chief financial officer of 23andMe, said in a statement.

The company expects after-sales to be between $260 million and $280 million for fiscal 2023, which will end March 31, 2023. The company had revenue of $271.9 million in fiscal 2022.

23andMe expects a net loss of between $350 million and $370 million for fiscal 2023, up from $217.5 million for fiscal 2022.

The stock fell almost 7% in after-hours trading to $2.70 a share. The stock is down more than 70% over the past 12 months.

23andMe shares began trading in June last year after merging with a special purpose vehicle backed by British billionaire Richard Branson’s Virgin Group. 23andMe stock falls on widening loss

Brian Lowry

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