Q4 2023 Fulgent Genetics Inc Earnings Call
Participants
Melanie Solomon; Managing Director; Fulgent Genetics Inc
Ming Hsieh; Chairman of the Board, President, Chief Executive Officer; Fulgent Genetics Inc
Brandon Perthuis; Chief Commercial Officer; Fulgent Genetics
Paul Kim; Chief Financial Officer; Fulgent Genetics Inc
David Westenberg; Analyst; Piper Sandler & Co.
Andrew Cooper; Analyst; Raymond James & Associates, Inc.
Presentation
Operator
Greetings, and welcome to the Fulgent Genetics fourth quarter and full-year 2023 conference call and webcast. (Operator Instructions) As reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Melanie Solomon, Investor Relations for Fulgent Genetics. Please go ahead.
Melanie Solomon
Thank you. Good morning, and welcome to the Fulgent fourth quarter and full-year 2023 financial results conference call. On the call are Ming Hsieh, Chief Executive Officer; Paul Kim, Chief Financial Officer; and Brandon Perthuis, Chief Commercial Officer.
The company's press release discussing the financial results is available on the Investor Relations section of the company's website, www.fulgentgenetics.com. A replay of this call will be available shortly after the call concludes on the Investor Relations section of the company website.
Management's prepared remarks and answers to your questions on today's call contain forward-looking statements. These forward-looking statements represent management's estimates based on current views and assumptions which may prove to be incorrect. As a result, matters discussed in any forward-looking statements are subject to risks, uncertainties, and changes in circumstances that may cause actual results to differ from those described in the forward-looking statements. The company assumes no obligation to update any of the forward-looking statements that may be made today to reflect actual results or changes in expectations.
Listeners should not rely on any forward-looking statements as predictions of future events and to listen to management's remarks today with the understanding that actual events, including the company's actual future results, may be materially different in what is described in or implied by these forward-looking statements. Please review the more detailed discussions related to these forward-looking statements, including the discussions of some of the risk factors that may cause results to differ from those described in the forward-looking statements contained in the company's filings with the Securities and Exchange Commission, including the previously filed 10-K for the year ended December 31, 2022, and subsequently filed reports, which are available on the company's Investor Relations website.
Management's prepared remarks including discussions of earnings and earnings per share contain financial measures not prepared in accordance with accounting principles generally accepted in the United States or GAAP. Management has presented these non-GAAP financial measures because it believes they may be useful to investors for various reasons, but these measures should not be viewed as a substitute for or superior to the company's financial results prepared in accordance with GAAP.
Please see the company's press release discussing its financial results for the fourth quarter and full-year 2023 for more information, including the description of how the company calculates non-GAAP income or loss, earnings or loss per share, and adjusted EBITDA, and a reconciliation of these financial measures to income or loss and earnings or loss per share, the most directly comparable GAAP financial measures.
With that, I'd now like to turn the call over to Ming.
Ming Hsieh
Thank you, Mary.
Good morning and thank you for joining our call today. I will start with some comments on the fourth quarter and year ended December 31st, 2023. Then Brendan will review our product and go-to-market updates from the fourth quarter, and Paul will conclude with the financials and the 2024 outlook.
Before we take your questions.
We are pleased with our results in the first quarter with $70 million of total revenue. Due to our successful collection efforts, we recognized 4 million of revenue on previously billed COVID-19 tests as you'll see in our 10 K, we are now reporting our business in two segments. One, our laboratory service business, which we will previous through, refer as our chemical analysis business and second, our therapeutic development business. We have renamed our clinical diagnostic businesses to better represent the inclusion of technical laboratory services and the professional interpretation of a lab result by licensed physicians. This would now be coded laboratory service. As a reminder, core revenue is the total laboratory services revenue from the Company without COVID-19 test revenue. Fourth quarter core revenue of $66 million was driven by the momentum in precision diagnostics and <unk>, better than expected revenue from anatomical pathology and biopharma services. After raising our full year guidance twice in 2023, we outperformed the full year by 2 million in the core revenue funnel. The latest raise in guidance was a positive impact on margins and earnings.
Moving to our therapeutics development business. We are continue to make good progress with the Fusion from our now or Nemo in separation. Technology includes over 40 issued or active patents and the active patent applications and a target therapeutic platform designed to improve.
Third is the window and the pharmaco kinetic profile of both new and existing drug cancer drugs. Our lead drug candidate, FIDO. seven has shown promising results in clinical trials to date for the treatment of numerous cancers, including head and neck, ambulatory pancreatic with a manageable safety profile observed in trials performed to date, an abstract on preliminary head neck cancer clinical trial results from our Phase Ib study has been submitted for the 2024 Asco annual meetings, which will be held in the second quarter.
Our Phase two clinical protocol for the second-line treatment of head-and-neck cancer has been accepted by the FDA, and we expect to enroll the first patient early in the second quarter of this year. We are excited about other reaching this next milestones for the farmer and bring the FIDO. seven two more patients in the clinical centers. In addition, using the same that no drug delivery platform, we are also advancing our second drug candidate, DFIDO. two financial encapsulated as in 38, very rapidly and expect to file an IND or investigational new drug application by the end of the year.
While Erin taken a pro-drug of for Asentar, DA has been approved by the FDA for colon cancer treatment formulations using active components and even 38 have not been successfully 12 so far, primary due to poor drug tolerability and toxicity safety issues. We believe our Nanot drug delivery platform has the potential to address these challenges on the R&D front, building up our clinically proven nano particle technology, while also developing a next-generation antibody drug conjugate technology platform data could potentially prove that even broader, keeping to was a heterogeneous cancer cells than those ADC.
With the bystander killing effect, our ADC platform is not target dependent and that could potentially be applied to many different targeted ADCs, particularly for new targets with low antigen expression where existing ADC player from have failed to show effectiveness. Overall, we believe we have been good stewards of cash and maintain a strong balance sheet with which to execute our strategy. I'd like to thank our employees, partners and stakeholders for your loyalty during the past year. We look forward to a strong year in 2024 and capitalizing on the momentum we see ahead.
I'll now turn the call over to Brent and it to our Chief Commercial Officer to talk about our laboratory services business results during the fourth quarter. Brandon?
Brandon Perthuis
Thank you, Ming. It was a solid year for Fulgent, slightly exceeding our overall core revenue guidance, ending the year at $262 million, shattering our 2022 record by $81 million, an increase of 44% year over year. These numbers exclude any COVID-19 testing revenue.
We hit many new company milestones in 2023, which I will reflect on momentarily. At a high level, precision diagnostics continue to be the main growth driver, and it's precision diagnostics where our technology shines the brightest. Precision diagnostics performed well in 2023, contributing $132 million to the business. The main product outperforming what our Beacon expanded carrier screen. Beacon has proven to be a very well received product in the IVF space, offering gene content flexibility up to 787 genes in rapid turnaround time of approximately two weeks on average.
In addition, using our in-house developed informatics databases and pipelines, we are able to deliver reliable detection rates in difficult genes such as pseudo genes or genes with high sequence homology. Our mix of clients for carrier screening services at this time is mostly IVF clinics as well as robust B2B partnerships. A few months ago, we announced the new Beacon seven eight seven expanded carrier screening panel, and we recently followed that up with launching the new Beacon preconception panel Beacon preconception includes an additional focus on manifesting carriers in mild disease compared to standard BEACON panels, making it a better fit for some clients working with gaming donors or in the IVF clinic. We see Beacon continuing to be an important growth driver in 2024 as a result of additional market shakeup as well as sales and R&D execution.
Recently, we announced a new partnership with CooperSurgical, a global leader in fertility and Women's Health to offer exclusive newborn genetic screening panel to Cord Blood Registry families utilizing our Picture Genetics platform, CBR., the largest private newborn stem cell bank in the world now offers a range of testing options to its families, including CBR snapshot, which screening children for over 250 genes related to metabolic disorders, blood disorders, cancers, cardiovascular disorders, hearing loss and vision loss snapshot focuses on screening for conditions where early detection provides actionable information. It may be managed with medication diet or other therapies.
Secondly, CBR portrait screening children for over 600 genes covering everything and CBR. snapshot, along with additional genes related to hearing loss, actionable epilepsy, immunodeficiency, heart conditions and neonatal diabetes. Cbr portrayed includes more than twice as many genes as CBR snapshot and may identify more rare causes of these conditions. And if negative results further reduce the likelihood that a patient has the conditions included on the test.
Lastly, CBR. landscape screening children for over 1,500 genes in more than 1,000 conditions and includes a pharmaco genetic component component that identify the potential for adverse reactions to more than 100 medications.
Switching to AP, while anatomic pathology is critical to our mission of being a one-stop shop for physicians and contributes meaningfully to our overall revenue. We are seeing some headwinds in the business. That said, we have recently expanded our commercial footprint plan to continue to layer on new sales hires, and we are committed to growing the business.
In addition, we are making significant investments in operations, digital digital pathology and AI to improve our efficiency. We estimate seeing these investments beginning to pay off late in 2024. Previously, we reported on pharma services when we provided a breakout of revenue for clarity purposes, we have renamed this breakout of revenue to biopharma services to include any revenue related to clinical testing for pharma, biotech, CRO or research organizations, of which approximately 4 million had been previously classified under precision diagnostics in 2023.
Regarding biopharma services, we exited 2022 with tremendous momentum, and 2023 took off at a very fast pace. However, unrelated to Fulgent. Some of our biopharma clients have had issues, and some of those projects have either pulled way back or been terminated altogether. Unfortunately, this did affect two of our larger clients. That said, we believe our biopharma services capabilities are stronger today than ever, offering an impressive multiomics platform, including technology for single-cell multiomics, rounding out our capabilities in whole genome whole exome RNA sequencing, tumor profiling, methylation sequencing, liquid biopsy, single-cell sequencing, Spatial Biology and Pathology.
The focus for 2024 is to forge new relationships and expand on existing ones. We'd like to thank all of our employees who have dedicated so much energy into making pulls and a great success. We have an amazing team as one of our important clients recently said, quote, Fulgent seems to have a magic wand. If we don't, it would certainly be easier if we did. But we do have an absolutely amazing team that's at 2023 has come to pass. And now our focus and energy shift to 2024 is a fast-paced dynamic market, and we look forward to keeping our investors updated throughout the year.
I'll now turn the call over to Paul Kim, our Chief Financial Officer. Paul?
Paul Kim
Thanks, Brandon. Revenue in the fourth quarter totaled $70 million compared to $68 million in the fourth quarter of 2022. $4 million came from COVID-19 testing in Q4, which was not part of our guidance. Revenue from our core business totaled $66 million, which slightly exceeded our guidance of $64 million and grew 21% year over year. Gross margin was 36%. The increase in gross margin year over year is primarily related to $4 million of COVID-19 revenue recognized on previously billed test due to successful insurance collections in the current year and to charges which resulted from the wind down of COVID-19 business in Q4 of the prior year, including inventory reserves (techincal difficulty) equipment depreciation.
Before turning to operating expenses, I would like to explain an impairment charge we took this quarter. We incurred a one-time noncash goodwill impairment charge of $120 million. This charge resulted from a sustained decline in our share price and associated market capitalization compared to the book value of our equity as of quarter end, I want to reiterate that the non-cash goodwill impairment charge was due to generally accepted accounting principles. Given the current market capitalization, it's important to note that the goodwill impairment charge does not affect the Company's cash position, and we do not believe it will have any impact on our future operations.
And we remain highly encouraged with the momentum we see ahead. As discussed earlier by Brandon, the GAAP operating expenses were $176.4 million in the fourth quarter increase from $39.6 million in the third quarter of 2023. Non-gaap operating expenses totaled $45.1 million, increased from $29.4 million in the third quarter of 2023. Non-gaap operating margin decreased 40 percentage points sequentially to a negative 24.8%, primarily due to lower COVID-19 testing revenue recognized higher bad debt reserve and onetime legal fees.
Adjusted EBITDA loss for the fourth quarter was $6.8 million compared to $15.1 million in the fourth quarter of 2022 on a non-GAAP basis and excluding equity-based compensation expense, goodwill impairment loss and intangible asset amortization income for the quarter was $8.3 million or $0.2 per share on 30 million weighted average shares outstanding.
Turning to the balance sheet, we ended the fourth quarter with approximately $848 million in cash. Cash equivalents and marketable securities. We were active with our share repurchase program. During the fourth quarter of 2023, we repurchased approximately 873,000 shares of our common stock at an aggregate cost of 22.9 million at an average price of $26.15 under the stock repurchase program announced in March of 2022. As of December 31st, 2023, a total of approximately 150.7 million remained available for future repurchases of our common stock under the stock repurchase program.
Now moving on to our outlook for 2024. Starting with revenue, we may have some minimal revenue from COVID-19 testing in 2024, but we'll be guiding to core revenue, which is total laboratory services revenue for the Company. Without COVID-19 testing, we expect total core revenues to be approximately 280 million for 2024, representing a core growth of 7% year over year.
Breaking down the guidance between precision diagnostics, anatomic pathology in biopharma services, the expected 2024 revenue is estimated as flow as follows 173 million from precision diagnostics, 96 million from anatomic pathology and the remaining 11 million from biopharma services on precision diagnostics, which includes all of our clinical NGS revenue, oncology, reproductive services, rare disease, neuro genetics, B2B relationships with labs and our joint venture in China continues to be the highest growth area for the Company. In 2024. As Brandon discussed, we have seen strength in reproductive services from our BEACON product line. Given the timing of certain lab arrangements, there may be variability quarter to quarter to quarter health, anatomic pathology and biopharma services continue to be the major contributors to revenue in 2024.
However, we are expecting a decline in both these revenue streams in 2024 as compared to 2023. For anatomic pathology, which includes the business we have integrated from informed diagnostics, pricing pressure and lower contract rates are impacting revenue biopharma services, which includes sequencing as a service, which we sell to pharmaceutical businesses and as dependent on these partners have been impacted by projects that have terminated or have scaled back significantly, there is no revenue from our therapeutic development business and have anticipated for 2024 guidance.
Turning to expected margins in 2024, excluding COVID-19 revenue and stock-based compensation We expect non-GAAP gross margins to improve as we see the efficiencies of our integration efforts take effect, reaching the mid 30% range and positioning us to approach our target of 40% by the end of the year. We expect to see lower non-GAAP operating margins in the quarters ahead as we further invest resources to grow our business with operating margin of approximately minus 20% for the year. We remain focused on managing our spend and continue to believe that our foundational technology platform supports a long term long term, strong margin profile.
We expect associated cash burn for our therapeutics business of about 15 to 17 million this year, which is contemplated in our EPS and our cash guidance provided today for the full year 2020 for utilizing non-GAAP tax provision and average share count of 31 million. We expect that our non-GAAP loss to be approximately $1.5 per share for our shareholders, excluding the stock-based compensation and amortization of intangible assets as well as any one-time charges.
Moving on to cash, our cash position remains strong. We expect to have significant cash outlay of over 15 million this year as we build out and move into our brand-new 96,500 square foot facility in the Dallas area. This facility will have state-of-the-art operations, which include both pathology, neuro pathology and the NGS lab, will broaden our diagnostics reach as well as further streamline our clinical operations, excluding any stock repurchases or any other expenditures. Outside ordinary course, we still anticipate ending 2024 with approximately 800 million of cash, cash equivalents and investments and marketable securities. Overall, we see strength in our core business, which has grown organically and through strategic acquisitions. And we see good momentum ahead.
Thank you for joining our call today. Operator, now you may open it up for questions.
Question and Answer Session
Operator
(Operator Instructions) David Westenberg, Piper Sandler.
David Westenberg
I thank you for taking the question and good job in Q4 on. So just a couple of different things here. So let's just start with on expectations for expanded carrier screening on. Is that going to impact? Or do you anticipate still anticipate that being a front half of the year on a cog recommendation, how fast is that? And would that impact your revenue? And on just given the fact that you are, I think mainly working in IVF, would that would that kind of thing, capitalize maybe on further investments in the sales force in order to to look at that opportunity outside of the broader markets?
Brandon Perthuis
I think, Dave, it's Brendan. Appreciate the question, Bill, it's hard to comment on the timing of a COD policy changes, but certainly we see trending in that direction. We are participating in some of those discussions and advocating for better policy statements.
So look, our expanded carrier screening is standard of care today in medical practice, doctors realize that they treated as such, an the guidelines are just sometimes lagging in that area. But when they align and when they catch up, good things happen. So any positive movement in those guidelines would be just additional tailwinds around reimbursement and coverage I don't think those guidelines change adoption too much, but really what you know, perhaps to have some positive impact on reimbursements and things like that.
And in terms of investing in the sales team in addressing the broader market. And you are correct. A lot of our Beacon expanded carrier screening today is coming from the IVF clinics, and we've yet to penetrate the OB/GYN market. We believe there's some sort of ancillary and parallel products that are needed on the bundle with Beacon before we really can can penetrate that OB/GYN market. And we do have some development in those areas and and is certainly an area we want to expand into. So we think once we have that product portfolio ready to go to market we could invest significantly in the sales team to address that broader market.
David Westenberg
We got to take it out as a great answer on.
So just on maybe on on COVID testing, I mean, if you just back out, you get 4 million of COVID testing in Q4. I mean, we are kind of in the heart of respiratory disease areas with only $4 million in revenue, would it make strategic sense to just flat-out exit that business and or on medium? I mean, I think you guys already are deemphasizing it just talking about strategies around that?
Thank you.
Brandon Perthuis
Yes, for all intents and purposes, we have exited the business. I mean, is the amount of new testing we're doing. It is tiny. The revenue you're seeing is a result of our efforts to collect on tests that we've run in the past. So we have a phenomenal revenue cycle management team and they're tenacious. We fight for every dollar that we can and what you're seeing is results of our team collecting on tests that we had previously run. So the amount of new testing new revenue practically zero I mean, like I said, it's pretty much a completely deemphasize at the Company. But again, we want to collect on every dollar that we're owed makes a lot of sense.
David Westenberg
But just quickly in a month for my last one, just want to talk about capital deployment. A lot of share repurchases in 2023. Is that still the kind of the game plan in 2024 or you can look at maybe some acquisitions, particularly like with the I mean, I'm guessing in the market, we're going to see some on adjacent on market opportunity from companies that are exiting going under on selling themselves, et cetera?
Yes.
Ming Hsieh
Thank you, David, for the questions. I think we do see more opportunities available in the market and the variations will be give you more sense, but it still has a way of looking for the business, which is there profound in terms of there is a long-term business plan. And also we're looking for the companies that we see fewer as the that broaden our distribution channel or adding additional technology to make us even more efficient or more advanced in the in the testing area. So there isn't more opportunity we're looking for now and definitely up at the current environment. I think we're in a good position to be conservative.
David Westenberg
Thank you.
Operator
Thank you. Our next question comes from the line of Andrew Cooper with Raymond James. Please proceed with your question.
Andrew Cooper
Hey, everybody, thanks for the question. And maybe just first kind of real simply, it sounds like there's some moving parts around moving, I think you said 4 million from from PDX down to biopharma service system. Can you maybe just help level set where each subsegment came in for 2023? And then also just in 4Q, sort of what the growth looked like in each on an apples to apples basis so that we can have sort of the right the right expectation into 2024.
Paul Kim
Yes, sure.
So I'll first, I'll first comment on the numbers, and then I'll turn it over to Brandon, who can give some color on where we see the decline and where we see the most amount are in our growth and the momentum. So for the fourth quarter, we had revenues of $70 million, approximately $4 million was coming. That came from COVID, 35.5 million came from precision diagnostics. Biopharma Services was $4.7 million and anatomic pathology was $26.3 million. For the balance of 2023, we had 104.7 million of revenues from anatomic pathology, 25.4 million from biopharma services and EUR132 million from precision diagnostics. We also had, as we previously discussed on COVID revenues, 27.1 million come from COVID. So the total revenues for 2023 was $289.2 million, of which revenue, excluding COVID or core was 262 million for the 280 million guide that we're doing for 2024. That does not include any COVID of the projected are as follows In the three revenue categories for anatomic pathology as 96.3 million, biopharma services is 10 points, $7 million and precision diagnostics is $173.3 million. So as you can see when you compare these categories versus 2023, we had a slight decline projected that we're anticipating for 2020 for an anatomic pathology. We had a significant decline projected and for biopharma services, and we see a lot of momentum behind precision diagnostics. And I'll turn it over to Brandon, who can give some color into the variability for each of those three areas?
Ming Hsieh
Yes.
Brandon Perthuis
Certainly, we talked a little bit about it in the script, but on the AP side, anatomic pathology shop side has really been a mix of issues. We've had some physician clients enter retirement. We've had practices be acquired. We had practices merge with other groups. We had clients during Super groups and those supergroup usually have their own laboratory. For example, we did mention some limited pressure on reimbursement. I mean there is a little bit there, but he's really been a mix of things on the AP side. However, it's really nothing out of the sort of ordinary for the industry. And that said, I mean, we need to outpace that. So it's our goal to build a best in class sales team and find new opportunities to return a PE to growth. I think if you're looking at are that division, we have the turnaround time, the quality subspecialty trained pathologist and the connectivity. We have what it takes to win and we intend to do that. But we like I mentioned, we continue to invest in digital pathology and AI in our operations. We want we want to become more efficient in that area as well. So and we do intend to address some of those losses by finding and forging new client relationships.
On the pharma side, it's a little bit more of a centralized issue with affecting a couple of clients. So I think on the on the pharma headwinds, it really boils down to a couple or maybe just a very few significant sized clients that wind down their projects. And this is mostly related to some of their financial stress and not related to any service issues with Fulgent. We mentioned that our biopharma services have really expanded and now is our goal to drive deeper relationships with our existing clients, but also continue to go find new clients. We do believe there is demand for the types of products and services we've built. But I think the takeaway from that even with the divisional headwinds in AP. and pharma, we're still forecasting growth in 2024 from around 30% growth in precision diagnostics. And this is the area where we can sort of best leverage in our technology platform.
Paul Kim
Okay.
Melanie Solomon
Super.
Paul Kim
Super helpful.
Andrew Cooper
Appreciate that. And maybe just kind of dialing in a little bit on AP. If we go back to the deal announcement and sort of the first couple of quarters post. I think a lot of the logic was this was a strategic move, I think in large part on being able to roll some of the contracts across the broader Fulgent business. I guess what you just mentioning at least part of the headwind being a little bit lower contract rates, anything changed there substantially or is it more like you just said, Brandon, kind of normal course of business in the industry, a little bit of pressure, but nothing that changes the way you view that broader opportunity?
Brandon Perthuis
You are correct, normal course of business and these are normal sort of constraints on contract pricing. It's what we've seen for forever. Nothing at a macro level that would affect our ability to leverage these contracts across the organization. Actually, that's going quite well.
I mean, I think I think the thing to really know because we're talking about these categories as the power and the momentum that we're seeing from the percentage mix, meaning that if you kind of take a step back and these are all organic numbers in 2022 for precision diagnostics that we did, $97.3 million for 2023. That 97.3 million is 131.1 million. And for the projected in 2024, we're anticipating precision diagnostics to be in excess of $173 million that that's over a 31% organic growth in that part of the business. So we'll how the company was constructed, where we were founded, which is full sequencing and NGS. And that is having tremendous momentum in 2023, and we anticipate that momentum to continue in 2024.
Ming Hsieh
Yes, I do both. Brenda and Paul's comments. I think in terms of when we purchased the assets, we issue we talk about the insurance occurs because those insurance coverage, we feel that our growth for the precision diagnostics such as the carrier screening business but in terms of the in general, the AP., it is a pretty in January is not that that is the pricing for the in terms of margins strongly depends on the labor and we have been starting in print our cost cutting process. You will see the improvement of operating margins from the AP business. However, the AP that business is one of the areas has its lack of technology investments. We heavily invest in the infrastructure and technology. You will see the turnaround in the AP business or maybe it doesn't. It won't but the areas that really drive the future of our digital AI, our innovation. So our see that is that we have it taken us about two years until three years, tried to turn that business around. But we also see that a lot of potentials for us make it the technology innovation in that area.
Paul Kim
Okay, super helpful.
Andrew Cooper
Maybe just one last quick one. Just an update on the beginning of the more national rollout for Fulgent oncology with a little bit of sort of what happened in the fourth quarter and what you've learned if anything new and what the trajectory looks like from your perspective there?
Ming Hsieh
Yes.
Brandon Perthuis
Certainly, thanks for the question. Well, recently, we've seen some tremendous momentum from recently as in sort of January and February. So it will be maybe talking more about this in detail on the next call, but we have had some significant wins in the fours and oncology division as we mentioned previously, we secured very robust multi extra reimbursement for those assays, both north of $22,200 for our solid tumor profile in our hematological malignancy profile so yes, great momentum, expanded the sales team, some still pretty small, but we're sort of walking before we run approach to things. But we think the opportunities there, the clients seem to be very happy with our turnaround time. Our quality report layout and in our Q & S rate, which is fantastic, was just very, very good in terms of our ability to process small amounts of tumor tissue. So yes, the business has momentum, and I think next quarter we'll be giving more color break up.
Andrew Cooper
Thanks for time.
Operator
Liu Lee with UBS.
Melanie Solomon
Please proceed with your question.
Great.
Thank you, and we're taking my questions. So I guess I wanted to touch a little bit on carrier screening. I think in the prepared remarks, you mentioned market share golf in the whole space. I'm just wondering, can you give like any color in terms of where do you see share gain opportunity in that will come back into the guide?
Brandon Perthuis
Thank you for the question. And we certainly benefited from the market shakeup in 2023 with one of the larger players exiting this space entirely. We gained significant market share during that event, a similar but different situation sort of happening in real time. And we are gaining clients from that shakeup as well. So I think as I mentioned, you know, clients are looking for stability and our BEACON product is performing incredibly well. It has the right gene content, the right turnaround time, our ability to custom design these panels do merge a couple reporting for calculating residual risk. We have what it takes to win. And so as these clients whose lives have been disrupted by these events. Look for a new lab partner, I think we rank pretty high with them. So in 2024, actually, we are living in real time, we are seeing the sales sort of pipeline and funnel PHIL up with new opportunities around carrier screening.
Paul Kim
Got it.
Operator
Pushing that.
I think second question coming back to the guidance, do you see any like potential upside or downside while we always see upside to the guide?
If you remember, last year, we raised our guidance twice.
Paul Kim
We first started off at 240 million of revenue.
We raised that and then recently it was up to 60, and I'm just talking about the core and it came in at two 62. We also anticipated that the cash burn for 2023 would be somewhat more meaningful than what we anticipated from. But the ending cash and that's including buying back about $25 million worth of stock was a lot better than I think the general consensus that was out there. So we reserve the right to raise our guidance in 2024. And we also reserve the right to have our cash balance be better and then on the approximate 800 million.
Operator
Okay.
I think I missed some of the part, I think the line is not likely, but we can definitely go offline on desks.
I guess the final question on any update on the RBT and have you heard anything? And then when should we see that we saw anything any color would be great.
Brandon Perthuis
Are you are you asking about the FDA.'s potential oversight of laboratory-developed tests?
Yes, yes, we haven't seen too much probably we've seen what you've seen some of the write-ups that have been published from the FDA warming up to the idea that they do have jurisdictional discretionary jurisdictional oversight of laboratory developed tests. Look, I mean, they're going to do what they're going to do. And there's been a lot of pushback from industry leaders that this is not the right approach and that it could limit patient access to really important tests, but ultimately, they'll do what they're going to do and we will react accordingly.
Right.
If if we need to put a high risk genetic testing through their process to get it approved, we'll do that. We have the quality systems in place. We have the infrastructure and that could be a benefit to us, actually, not maybe some of the other labs don't have the ability to get some of these things approved. So whichever way they go, if they continue to exercise jurisdictional discretion. We will continue to operate as LDT.s. If they do give us a list of perhaps high risk test, they wanted to focus on putting through a five 10 K process, then we'll do that either way. I think we have what it takes to still and performing in that new environment.
Operator
I appreciate it. Thank you. That concludes our question and answer session, and this concludes our call today. We thank you for your interest and participation. You may now disconnect.
