Castle Biosciences (CSTL) Q4 2022 earnings summary

Executive summary

• 2022 revenue rose 45.7% to $137.0 million, reaching the top end of guidance; delivered test reports increased 58% to 44,419.

• Growth reflected expanded commercial teams, higher test volumes and the additions of TissueCypher and IDgenetix; net loss widened to $67.1 million as operating investment increased.

Financial highlights

• Net revenues were $137.039 million versus $94.085 million in 2021; dermatologic revenue was $124.809 million and other revenue was $12.230 million.

• Operating loss was $72.855 million versus $40.079 million; net loss was $67.138 million versus $31.292 million.

• Basic and diluted loss per share was $2.58 versus $1.24; weighted-average shares were 26.054 million versus 25.137 million.

• Operating expenses, net, increased 56.4% to $209.894 million, including R&D of $44.903 million and SG&A of $143.003 million.

Outlook and guidance

• Existing cash, cash equivalents, marketable securities and anticipated product sales were expected to fund operations for at least 12 months and the foreseeable future.

• Near-term gross margin percentage was expected to remain below prior periods as laboratory staffing and capacity expand ahead of report growth and reimbursement coverage.

• R&D and commercial expenses were expected to rise with evidence development, pipeline work, sales expansion and support for current and acquired tests.

• The inflammatory skin disease pipeline test remained targeted for launch by end-2025; the 4,800-patient IDENTITY study had 507 enrolled and 54 committed sites as of February 2, 2023.