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Burning Rock Reports Second Quarter 2023 Financial Results

Thursday, August 31, 2023 6 min read
Key Takeaway: Burning Rock Biotech Limited reported its financial results for the second quarter of 2023, showcasing a revenue increase of 11.8% to RMB146.3 million and a gross profit rise of 21.6%, enhanced by improved gross margins across various business channels. Operating expenses also decreased notably by 32.2%, indicating effective cost control measures. However, the company still faced a net loss of RMB131.2 million, underscoring the challenges in achieving profitability amidst growing revenues.

Market Sentiment Analysis

POSITIVE FACTORS

  • Revenues increased by 11.8% compared to the same period in 2022.
  • Gross profit increased by 21.6%, leading to an improved gross margin of 68.7%.
  • Operating expenses decreased by 32.2%, indicating improved cost management.

CONCERNS & RISKS

  • The company reported a net loss of RMB131.2 million.
  • Despite revenue growth, the increase in costs related to operational activities could pose ongoing financial challenges.

Full Press Release Details

Burning Rock Reports Second Quarter 2023 Financial Results
GUANGZHOU, China, August 31, 2023 Burning Rock Biotech Limited (NASDAQ: BNR and LSE: BNR, the Company or Burning Rock ), a company
focused on the application of next generation sequencing (NGS) technology in the field of precision oncology, today reported financial results for the three months ended June 30, 2023.
Recent Business Updates
Second Quarter 2023 Financial Results
Revenues were RMB146.3 million (US$20.2 million) for the three months ended June 30, 2023, representing a 11.8% increase from RMB130.8 million
for the same period in 2022.
Cost of revenues was RMB45.8 million (US$6.3 million) for the three months ended June 30,
2023, representing a 5.0% decrease from RMB48.2 million for the same period in 2022, primarily due to a decrease in cost of central laboratory business, which was in line with the decrease in revenue generated from this business.
Gross profit was RMB100.4 million (US$13.8 million) for the three months ended June 30, 2023, representing a 21.6% increase from
RMB82.6 million for the same period in 2022. Gross margin was 68.7% for the three months ended June 30, 2023, compared to 63.1% for the same period in 2022. By channel, gross margin of central laboratory business was 78.3% for the three
months ended June 30, 2023, compared to 73.3% during the same period in 2022, and such increase was primarily due to a decrease in inventory write down and royalty fee; gross margin of in-hospital
business was 62.0% for the three months ended June 30, 2023, compared to 58.6% during the same period in 2022, and such increase was primarily due to an increase in sales volume to high margin hospitals; gross margin of pharma research and
development services was 58.0% for the three months ended June 30, 2023, compared to 27.8% during the same period of 2022, and such increase was primarily due to an increase in test volume of higher margin projects.
Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB109.4 million (US$15.1
million) for the three months ended June 30, 2023, representing a 20.3% increase from RMB90.9 million for the same period in 2022. Non-GAAP gross margin was 74.8% for the three months ended
June 30, 2023, compared to 69.5% for the same period in 2022.
Operating expenses were RMB236.1 million (US$32.6 million) for the three months
ended June 30, 2023, representing a 32.2% decrease from RMB348.1 million for the same period in 2022. The decrease was primarily driven by budget control measures and headcount reduction aimed at improving the Company s operating
Net loss was RMB131.2 million (US$18.1 million) for the three months ended June 30, 2023, compared to RMB262.1 million for the same period in
Cash, cash equivalents, restricted cash and short-term investments were RMB733.3 million (US$101.1 million) as of June 30, 2023.
Conference Call Information
Burning Rock will host a
conference call to discuss the second quarter 2023 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on August 31, 2023.
Please register in advance of the conference using the link provided below and dial in 15 minutes prior to the call, using participant dial-in numbers and unique registrant ID which would be provided upon registering.
PRE-REGISTER LINK: https://register.vevent.com/register/BI6587397828874b24931eb99fd4fb1c15.
Additionally, a live and archived webcast of the conference call will also be available on the company s investor relations website at
http://ir.brbiotech.com or through link https://edge.media-server.com/mmc/p/t4sgbsfb.
A replay of the webcast will be available for 12
months via the same link above.
Burning Rock Biotech Limited (NASDAQ: BNR and LSE: BNR), whose mission is to guard life via science, focuses on the application of next generation sequencing
(NGS) technology in the field of precision oncology. Its business consists of i) NGS-based therapy selection testing for late-stage cancer patients, and ii) cancer early detection, which has moved beyond proof-of-concept R&D into the clinical validation stage.
information about Burning Rock, please visit: ir.brbiotech.com.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will,
expects, anticipates, future, intends, plans, believes, estimates, target, confident and similar statements. Burning Rock may also make
written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements about Burning Rock s beliefs and expectations, are forward-looking statements. Such statements are based upon management s current expectations and current market and operating
conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Burning Rock s control. Forward-looking statements involve risks,
uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. All information provided in this press release is as of the date of this press release, and Burning Rock does not
undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
In evaluating the business, the company considers and uses non-GAAP measures, such as
non-GAAP gross profit and non-GAAP gross margin, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the
United States of America ( U.S. GAAP ). The company defines non-GAAP gross profit as gross profit excluding depreciation and amortization. The company defines
non-GAAP gross margin as gross margin excluding depreciation and amortization.
The company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The company believe non-GAAP gross profit and non-GAAP gross margin excluding non-cash impact of depreciation and amortization reflect the company s ongoing business operations in a manner that allows more meaningful
period-to-period comparisons.
Contact: IR@brbiotech.com
Selected Operating Data
For the three months ended
June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023
Central Laboratory Channel:
Number of patients tested 8,060 7,989 6,419 6,139 6,585
Number of ordering physicians (1) 767 897 797 792 725
Number of ordering hospitals (2) 264 257 238 241 225
As of
June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023
In-hospital Channel:
Pipeline partner hospitals (1) 25 22 28 29 30
Contracted partner hospitals (2) 43 47 49 49 50
Total number of partner hospitals 68 69 77 78 80
Selected Financial Data
For the three months ended
Revenues June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023
(RMB in thousands)
Central laboratory channel 78,597 89,992 71,970 61,804 66,239
In-hospital channel 34,177 49,636 42,526 51,561 53,835
Pharma research and development channel 18,072 15,003 27,741 29,151 26,194
Total revenues 130,846 154,631 142,237 142,516 146,268
For the three months ended
Gross profit June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023
(RMB in thousands)
Central laboratory channel 57,575 69,991 54,507 48,090 51,876
In-hospital channel 20,012 31,593 26,999 34,409 33,353
Pharma research and development channel 5,015 7,010 19,757 16,273 15,193
Total gross profit 82,602 108,594 101,263 98,772 100,422
For the three months ended
Share-based compensation expenses June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023
(RMB in thousands)
Cost of revenues 441 481 496 353 627
Research and development expenses 11,923 13,978 14,673 13,612 15,301
Selling and marketing expenses 2,158 2,346 2,247 1,606 3,389
General and administrative expenses 62,615 61,041 74,232 62,595 18,502
Total share-based compensation expenses 77,137 77,846 91,648 78,166 37,819
Burning Rock Biotech Limited
Unaudited Condensed Statements of Comprehensive Loss
(in thousands, except for number of shares and per share data)
For the three months ended
June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 June 30, 2023
RMB RMB RMB RMB RMB US$
Revenues 130,846 154,631 142,237 142,516 146,268 20,172
Cost of revenues (48,244 ) (46,037 ) (40,974 ) (43,744 ) (45,846 ) (6,323 )
Gross profit 82,602 108,594 101,263 98,772 100,422 13,849
Operating expenses:
Research and development expenses (92,112 ) (109,433 ) (100,827 ) (94,417 ) (95,779 ) (13,209 )
Selling and marketing expenses (105,634 ) (90,275 ) (85,174 ) (64,774 ) (70,842 ) (9,770 )
General and administrative expenses (150,316 ) (143,530 ) (132,705 ) (128,039 ) (69,525 ) (9,588 )
Total operating expenses (348,062 ) (343,238 ) (318,706 ) (287,230 ) (236,146 ) (32,567 )
Loss from operations (265,460 ) (234,644 ) (217,443 ) (188,458 ) (135,724 ) (18,718 )
Interest income 2,685 2,001 2,838 3,144 5,255 725
Interest expenses (29 ) 12
Other income (expense), net 127 (189 ) (84 ) 599 (118 ) (16 )
Foreign exchange (loss) gain, net 624 1,337 365 (116 ) (210 ) (29 )
Loss before income tax (262,053 ) (231,483 ) (214,324 ) (184,831 ) (130,797 ) (18,038 )
Income tax expenses (84 ) (1,901 ) (422 ) (445 ) (61 )
Net loss (262,137 ) (231,483 ) (216,225 ) (185,253 ) (131,242 ) (18,099 )
Net loss attributable to Burning Rock Biotech Limited s shareholders (262,137 ) (231,483 ) (216,225 ) (185,253 ) (131,242 ) (18,099 )
Net loss attributable to ordinary shareholders (262,137 ) (231,483 ) (216,225 ) (185,253 ) (131,242 ) (18,099 )
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted (2.50 ) (2.23 ) (2.11 ) (1.81 ) (1.28 ) (0.18 )
Class B ordinary shares - basic and diluted (2.50 ) (2.23 ) (2.11 ) (1.81 ) (1.28 ) (0.18 )
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted 87,532,539 86,585,322 85,051,882 85,065,585 85,151,052 85,151,052
Class B ordinary shares - basic and diluted 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments 29,715 20,646 (5,950 ) (5,659 ) 14,829 2,045
Total comprehensive loss (232,422 ) (210,837 ) (222,175 ) (190,912 ) (116,413 ) (16,054 )
Total comprehensive loss attributable to Burning Rock Biotech Limited s shareholders (232,422 ) (210,837 ) (222,175 ) (190,912 ) (116,413 ) (16,054 )
Burning Rock Biotech Limited
Unaudited Condensed Statements of Comprehensive Loss
(in thousands, except for number of shares and per share data)
For the six months ended
June 30, 2022 June 30, 2023 June 30, 2023
RMB RMB US$
Revenues 266,370 288,784 39,825
Cost of revenues (96,188 ) (89,590 ) (12,355 )
Gross profit 170,182 199,194 27,470
Operating expenses:
Research and development expenses (211,608 ) (190,196 ) (26,229 )
Selling and marketing expenses (194,845 ) (135,616 ) (18,702 )
General and administrative expenses (292,049 ) (197,564 ) (27,245 )
Total operating expenses (698,502 ) (523,376 ) (72,176 )
Loss from operations (528,320 ) (324,182 ) (44,706 )
Interest income 4,517 8,399 1,158
Interest expenses 90
Other income, net 425 481 67
Foreign exchange loss, net (153 ) (326 ) (45 )
Loss before income tax (523,441 ) (315,628 ) (43,526 )
Income tax expenses (84 ) (867 ) (120 )
Net loss (523,525 ) (316,495 ) (43,646 )
Net loss attributable to Burning Rock Biotech Limited s shareholders (523,525 ) (316,495 ) (43,646 )
Net loss attributable to ordinary shareholders (523,525 ) (316,495 ) (43,646 )
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted (5.00 ) (3.09 ) (0.43 )
Class B ordinary shares - basic and diluted (5.00 ) (3.09 ) (0.43 )
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted 87,357,120 85,108,555 85,108,555
Class B ordinary shares - basic and diluted 17,324,848 17,324,848 17,324,848
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments 26,650 9,170 1,265
Total comprehensive loss (496,875 ) (307,325 ) (42,381 )
Total comprehensive loss attributable to Burning Rock Biotech Limited s shareholders (496,875 ) (307,325 ) (42,381 )
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets
As of
December 31, 2022 June 30, 2023 June 30, 2023
RMB RMB US$
ASSETS
Current assets:
Cash and cash equivalents 905,451 732,568 101,026
Restricted cash 19,817 710 98
Accounts receivable, net 109,954 143,322 19,765
Contract assets, net 41,757 58,813 8,111
Inventories, net 130,321 101,625 14,015
Prepayments and other current assets, net 51,462 52,998 7,309
Total current assets 1,258,762 1,090,036 150,324
Non-current assets:
Equity method investment 690 505 70
Convertible note receivable 5,105 5,105 704
Property and equipment, net 251,829 191,017 26,342
Operating right-of-use assets 48,205 31,037 4,280
Intangible assets, net 1,986 1,204 166
Other non-current assets 20,890 11,852 1,634
Total non-current assets 328,705 240,720 33,196
TOTAL ASSETS 1,587,467 1,330,756 183,520
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets (Continued)
As of
December 31, 2022 June 30, 2023 June 30, 2023
RMB RMB US$
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable 50,947 24,568 3,388
Deferred revenue 147,633 147,313 20,315
Accrued liabilities and other current liabilities 173,832 156,526 21,586
Customer deposits 1,803 1,197 165
Current portion of operating lease liabilities 37,236 23,400 3,227
Total current liabilities 411,451 353,004 48,681
Non-current liabilities:
Non-current portion of operating lease liabilities 13,551 7,128 983
Other non-current liabilities 4,124 3,016 416
Total non-current liabilities 17,675 10,144 1,399
TOTAL LIABILITIES 429,126 363,148 50,080
Shareholders equity:
Class A ordinary shares 117 117 16
Class B ordinary shares 21 21 3
Additional paid-in capital 4,582,790 4,705,734 648,950
Treasury stock (58,919 ) (65,271 ) (9,001 )
Accumulated deficits (3,199,946 ) (3,516,441 ) (484,938 )
Accumulated other comprehensive loss (165,722 ) (156,552 ) (21,590 )
Total shareholders equity 1,158,341 967,608 133,440
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 1,587,467 1,330,756 183,520
Burning Rock Biotech Limited
Unaudited Condensed Statements of Cash Flows
For the three months ended
June 30, 2022 June 30, 2023 June 30, 2023
RMB RMB US$
Net cash used in operating activities (109,274 ) (79,204 ) (10,923 )
Net cash generated from (used in) investing activities 30,729 (2,928 ) (404 )
Net cash used in financing activities (69,559 ) (1,003 ) (138 )
Effect of exchange rate on cash, cash equivalents and restricted cash 26,279 13,271 1,831
Net decrease in cash, cash equivalents and restricted cash (121,825 ) (69,864 ) (9,634 )
Cash, cash equivalents and restricted cash at the beginning of period 1,274,875 803,142 110,758
Cash, cash equivalents and restricted cash at the end of period 1,153,050 733,278 101,124
For the six months ended
June 30, 2022 June 30, 2023 June 30, 2023
RMB RMB US$
Net cash used in operating activities (253,634 ) (192,347 ) (26,526 )
Net cash generated from (used in) investing activities 17,718 (6,987 ) (964 )
Net cash used in financing activities (73,493 ) (1,035 ) (143 )
Effect of exchange rate on cash, cash equivalents and restricted cash 23,347 8,379 1,157
Net decrease in cash, cash equivalents and restricted cash (286,062 ) (191,990 ) (26,476 )
Cash, cash equivalents and restricted cash at the beginning of period 1,439,112 925,268 127,600
Cash, cash equivalents and restricted cash at the end of period 1,153,050 733,278 101,124
Burning Rock Biotech Limited
Reconciliations of GAAP and Non-GAAP Results
For the three months ended
June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023
(RMB in thousands)
Gross profit:
Central laboratory channel 57,575 69,991 54,507 48,090 51,876
In-hospital channel 20,012 31,593 26,999 34,409 33,353
Pharma research and development channel 5,015 7,010 19,757 16,273 15,193
Total gross profit 82,602 108,594 101,263 98,772 100,422
Add: depreciation and amortization:
Central laboratory channel 2,545 3,138 3,609 2,567 2,645
In-hospital channel 1,428 2,479 2,449 2,582 2,637
Pharma research and development channel 4,327 2,805 3,065 3,974 3,665
Total depreciation and amortization included in cost of revenues 8,300 8,422 9,123 9,123 8,947
Non-GAAP gross profit:
Central laboratory channel 60,120 73,129 58,116 50,657 54,521
In-hospital channel 21,440 34,072 29,448 36,991 35,990
Pharma research and development channel 9,342 9,815 22,822 20,247 18,858
Total non-GAAP gross profit 90,902 117,016 110,386 107,895 109,369
Non-GAAP gross margin:
Central laboratory channel 76.5 % 81.3 % 80.8 % 82.0 % 82.3 %
In-hospital channel 62.7 % 68.6 % 69.2 % 71.7 % 66.9 %
Pharma research and development channel 51.7 % 65.4 % 82.3 % 69.5 % 72.0 %
Total non-GAAP gross margin 69.5 % 75.7 % 77.6 % 75.7 % 74.8 %

Frequently Asked Questions

What were Burning Rock's Q2 2023 revenues?

Revenues in Q2 2023 were RMB146.3 million (US$20.2 million), an 11.8% increase.

How much did Burning Rock's operating expenses decrease?

Operating expenses dropped by 32.2% to RMB236.1 million in Q2 2023.

What is Burning Rock's gross margin for Q2 2023?

The gross margin for Q2 2023 was 68.7%, up from 63.1% in Q2 2022.

What was the net loss for Burning Rock in Q2 2023?

The net loss for Q2 2023 was RMB131.2 million (US$18.1 million).

When will Burning Rock discuss its Q2 results on a conference call?

Burning Rock will hold a conference call on August 31, 2023, at 8:00 a.m. ET.

Tags: BNR Viatris Investor Conferences Healthcare Burning Rock financial results revenue growth precision oncology
Last updated: Aug 31, 2023