23andMe Reports 35% Revenue Growth to $60.3 Million in Latest Quarter

23andMe Holding Co. reported a total revenue of $60.3 million for the three months ended December 31, 2024, marking a 35% increase from $44.7 million in the same period last year. The growth was primarily driven by a significant rise in research services revenue, which increased by $18.8 million due to the recognition of $19.3 million in non-recurring revenue from a collaboration with GlaxoSmithKline (GSK). However, consumer services revenue saw a decline of $3.3 million, attributed to a decrease in personal genome service (PGS) kit sales, which fell by $6.4 million due to lower sales volume and pricing pressures from increased promotions.

For the nine months ending December 31, 2024, total revenue decreased by 7% to $144.7 million from $155.6 million in the prior year. This decline was largely due to a $16.7 million drop in consumer services revenue, which included a $21.2 million decrease in PGS kit revenue. The company also experienced reductions in telehealth services and tangible product revenue, which were impacted by lower medical visits and pharmacy sales, as well as the earlier disposition of its U.K. subsidiary, Lemonaid Health Limited.

The company reported a gross profit of $39.8 million for the quarter, a 102% increase from $19.7 million a year earlier, resulting in a gross margin of 66%. This improvement was driven by a reduction in the cost of revenue, which fell by 18% to $20.4 million. Operating expenses also saw a significant reduction, dropping 73% to $75.7 million, primarily due to the absence of a goodwill impairment charge that had impacted the previous year’s results. The net loss for the quarter was $53.0 million, a substantial decrease from a loss of $278.0 million in the prior year.

In terms of operational metrics, 23andMe reported approximately 15.5 million customers as of December 31, 2024, up from 15.1 million in March 2024. The company has also been focusing on restructuring efforts, including a significant reduction in workforce, which accounted for about 40% of its employees, as part of a strategic shift to streamline operations and reduce costs. The company’s total stockholders’ equity decreased to $62.7 million from $188.5 million at the end of the previous fiscal year, reflecting ongoing financial challenges.

Looking ahead, 23andMe has expressed concerns regarding its liquidity and ability to continue as a going concern, given its accumulated deficit of $2.4 billion and the need for additional capital to fund operations. The company is actively exploring strategic alternatives, including potential acquisitions and partnerships, to enhance its financial position. The management remains focused on expanding its product offerings and customer base, particularly through its telehealth services and new membership models, as it aims to stabilize and grow its revenue streams in the coming quarters.