23andMe shares slide more than 15% as lower services revenue hits Q3 results

By James Rogers

23andMe also lowered its full year revenue outlook

Shares of 23andMe Holding Co. fell 15.8% Thursday after the DNA-testing company fiscal third-quarter sales declined 33%, weighed down by lower consumer services and research revenue.

The stock's performance puts 23andMe (ME) shares on pace for their biggest daily percentage decline since Nov. 9, 2023, they fell 21.96%, according to Dow Jones Market Data. The stock is also on pace for its fourth-worst daily percentage decline.

23andMe's third-quarter revenue was $44.7 million, down from $66.9 million in the prior year's quarter. The company said this was due to lower research revenue after the conclusion of its exclusive GSK PLC AR (GSK) collaboration in July 2023 and lower consumer services revenue driven mainly by lower PGS (Preimplantation Genetic Screening) kit sales volume and telehealth orders. These decreases were partially offset by higher revenue from non-recurring payments from other research partners as well as growth in 23andMe's membership services revenue, the company said. Analysts surveyed by FactSet were looking for sales of $54 million.

Related: 23andMe to offer clients personalized action plans based on genetic and other health data

Revenue from consumer services, which includes PGS, telehealth and membership services, accounted for approximately 96% of 23andMe's total third-quarter revenue, the company said. Research services revenue accounted for approximately 4% of 23andMe's total revenue.

The company reported a net loss of $278 million, or a loss of 58 cents a share, compared to a net loss of $92 million, or a loss of 20 cents a share, in the year-ago quarter. Analysts surveyed by FactSet were expecting a loss of 14 cents a share.

23andMe also lowered its full-year revenue guidance to between $215 million and $220 million, from its prior forecast of $240 million to $250 million.

Related: 23andMe confirms hackers accessed ancestry data of 6.9 million people

Shares of 23andMe have fallen 77.6% in the last 52 weeks, compared with the S&P 500 index's SPX gain of 22.3%.

-James Rogers

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02-08-24 1030ET

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