Precipio (PRPO) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw the company surpass 10,000 cases for the year, up from 8,000 in 2023, reflecting significant growth and impact in cancer diagnostics.

• Focused on cancer diagnostics, leveraging proprietary technology and CLIA labs to develop and commercialize products for improved diagnostic accuracy and workflow.

• Operates clinical labs in Connecticut and Nebraska, with a commercial team partnered with major distributors for national reach.

• Experienced significant operational disruption in early 2024 due to a Change Healthcare cyberattack, impacting billing and cash flow.

• The company is on track to achieve break-even in 2024, marking a shift toward financial independence and shareholder value creation.

Financial highlights

• Net sales for Q3 2024 were $5.2M, up 15% year-over-year; nine-month net sales were $13.1M, up 20%.

• Pathology division revenues exceeded the break-even point for the second consecutive quarter, reaching $4.5 million, an 18% increase over Q2.

• Products division revenues grew 13% over Q2, reaching $680,000, with expectations for further growth as key customers onboard.

• Gross profit for Q3 2024 was $2.3M (44% margin), and for nine months was $4.9M (38% margin).

• Cash burn reduced by 75% year-over-year, from $1 million in Q3 2023 to $226,000 in Q3 2024.

Outlook and guidance

• Management expects to maintain break-even and avoid further capital raises, focusing on organic growth and building cash reserves.

• Substantial doubt remains about ability to continue as a going concern over the next 12 months without additional financing.

• Company is pursuing additional equity sales under an existing $5.8M at-the-market agreement, with $3.7M remaining availability.

• Plans to provide future guidance on revenues and EBITDA, and to increase investor visibility through conferences and analyst coverage.

• Expects continued net losses and negative cash flow as it invests in product development and commercialization.