Invitae Corporation

Good day, thank you for standing by and welcome to Invitae's second quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 on your telephone keypad. If you require any further assistance, please press star 0. Thank you. I would now like to hand the conference over to your speaker today, Ms. Laura D'Angelo. The floor is yours.

Thank you, operator, and good afternoon, everyone. Thank you for joining us for our second quarter 2021 financial results call. Joining us today are Sean George, our CEO, Roxy Nguyen, our CFO, Ken Knight, our COO, and Shelly Geyer, our sustainability and ESG lead. Before we begin, I'd like to remind you that various remarks that we make on this call that are not historical, including those about our future financial and operating results, our Q2 preliminary financial results, our plans and prospects, the focus of our business strategy, our plans to integrate and manage businesses we acquire, market opportunities, future product services, our product pipeline and the timing thereof, Demand for and reimbursement of our services and our investment in our infrastructure and operations constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act. It is difficult to accurately predict demand for our services, and therefore, our actual results could differ materially from our stated outlook. Statements on future company performance assume, among other things, that we don't conclude any additional business acquisitions, investments, restructurings, or legal settlements. We refer you to our most recent 10Q, in particular to the section titled Risk Factors, for additional information on factors that could cause actual results to differ materially from our current expectations. These forward-looking statements speak only as the date hereof. As you listen to today's conference call, we encourage you to have our press release available, which includes preliminary financial results as well as key growth metrics and commentary on the quarter. We are currently finalizing the accounting treatment for certain acquisition-related liabilities and stock-based compensation amounts reserved against the acquisition of ArcherDX last year. Assuming adjustments are necessary, we would expect a decrease in our recorded liability while also resulting in an increased gain in our adjustments to the fair value of contingent consideration. The primary growth metrics we are reporting include revenue, volume, ASP, cash, and any non-GAAP results are not expected to be affected by any adjustments. but we want to direct your attention to the preliminary nature of cost of revenue, operating expense, and net loss as they are not definitive as of today. To supplement our consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States, or GAAP, we monitor and consider several non-GAAP measures. We exclude from our non-GAAP operating results as applicable amortization of acquired intangible assets, acquisition-related stock-based compensation, post-combination expense related to the acceleration of equity grants or bonus payments in connection with the company's business combinations, adjustments to the fair value of certain acquisition-related assets and liabilities, including contingent consideration and acquisition-related income tax benefits. We see from our non-GAAP cash burn, as applicable, changes in marketable securities, cash received from equity financing and debt, and cash received from exercises of warrants. In this period, our non-GAAP measures include cost of revenue, gross profit, operating expense, including research and development, selling and marketing, and general and administrative, other income, expense, net, as well as net loss and net loss per share, and cash burn. We encourage you to review our GAAP to non-GAAP reconciliations, which are available in the press release and in the attendance of the earnings slide deck. With that, I will turn the call over to Shawn.

Thank you, Laura. Good afternoon, everyone. We're pleased to report another strong quarter of top line growth across the platform, demonstrating our continued progress toward meeting the immense unmet demand for the use of genetic information in mainstream medicine across all stages of life for our patients. An important milestone for us at MBTA was crossed with now over 2 million people receiving genetic information, many of whom would never have done so had we not been pursuing our mission so aggressively. With an ever-growing number of people seeking genetic information to inform health risk and medical decisions, we've committed to delivering the most comprehensive and affordable genetic information accessible to all patients at the standard of care. The rate of adoption of genetics in mainstream medicine is on the rise, as demonstrated by new data and V-day presented for multiple cancer types at the 2021 ASCO meetings. As one example, the landmark intercept study conducted at Mayo Clinic showed that nearly one in six patients with pancreatic cancer had genomic alterations and, importantly, genetic testing was associated with improved survival. This outcome is consistent with almost every study that we've done in this area, and we believe that NVTA is uniquely positioned to meet the growing need and market for combined somatic and germline genetic information across all cancer types. To headline the quarter, we continue to execute well on all our growth measures. Both revenue and billable volume showed triple-digit growth over last year's Q2, which was impacted significantly by the COVID shutdown. Demonstrating a continued exit of the COVID impact period and increasing momentum, we drove double-digit sequential growth in both revenue and billables from Q1. As to our guidance for the year, our Q2 growth and the macro trends we see have us confident that we will exceed the high end of our 50% to 60% target range for revenue growth this year. In January, we gave guidance of more than $450 million revenue for the year. Given the strong growth we've seen in the first half of the year, we're confident in our ability to deliver revenues of between $475 and $500 million, and that's including uncertainty from the recent increase in COVID cases resulting from the Delta variant spread. With that, I'm excited to introduce the newest member of our executive team. Roxy Nguyen is Invitae's newly appointed chief financial officer, and she's here with us this afternoon. We're thrilled to have her join the team to help scale this business globally. She brings a new perspective on financial management, modeling, as well as capital deployment, and, of course, supporting all of you. Roxy's decades of success as financial executive at global tech and med tech companies allows great insights into how the enormous opportunity of the convergence of these sectors can be capitalized. Roxy, maybe you can say a few words about your first few weeks before you provide some detail on the Q2 financials.