The following is a summary of the Fulgent Genetics, Inc. (FLGT) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Total Q3 revenue was $71.7 million, a decrease from $84.7 million in the third quarter of 2023.

• GAAP gross margin was 37.3%, with a non-GAAP gross margin of 40%.

• Non-GAAP operating margin increased approximately 2 percentage points sequentially to minus 6%.

• Adjusted EBITDA income for Q3 was approximately $400,000, compared to an income of $18.1 million in Q3 2023.

• Projected improvement in GAAP EPS loss from $1.95 to approximately $1.70 per share for the full year.

Business Progress:

• Expanded carrier screening and hereditary cancer screening tests are in high demand.

• Established a new $99 million contract over five years with VA hospitals for hereditary cancer and other germline tests.

• Introduced KNOVA, a novel NIPT test, and received MoIDX approval for multiple hereditary cancer panels in the third quarter.

Opportunities:

• Continued growth in core business areas: precision diagnostics, anatomic pathology, and pharma services.

• The ability to further compete for biopharma service projects due to a larger test portfolio, including new platforms like 10x Genomics and Akoya.

• Expanded presence in digital pathology, with 80% of slides digitized, enhancing operational efficiency and potential for integrating AI technologies in the future.

Risks:

• Revenue from COVID-19 testing is now negligible, implying a pivot to more sustainable core business offerings.

• A projected operating margin of approximately minus 12% for the year highlights operational risks tied to investments for growth.

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