23andMe (ME) Q1 2025 earnings summary

Executive summary

• Q1 revenue was $40.4 million, down 34% year-over-year, mainly due to the end of the GSK collaboration and lower consumer services revenue.

• Net loss narrowed to $69.4 million from $104.6 million in the prior year, reflecting lower operating expenses.

• Adjusted EBITDA loss improved to $35.2 million from $49.8 million year-over-year.

• Launched a large-scale GLP-1 research study and announced a GLP-1 weight loss telehealth membership.

• CEO submitted a preliminary proposal to acquire all outstanding shares not owned by her at $0.40 per share.

Financial highlights

• Service revenue was $34.7 million and product revenue $5.7 million, both declining year-over-year.

• Gross profit was $20.5 million, down 33% year-over-year.

• Operating expenses for Q1 were $92 million, down from $141 million year-over-year, due to workforce reductions and lower R&D spend.

• Cash and cash equivalents were $170 million at quarter-end, down from $216 million at March 31, 2024.

• Net loss per share was $0.14, compared to $0.23 in the prior year quarter.

Outlook and guidance

• Expect continued benefits to gross margins and bottom line from improved marketing efficiency and membership sales.

• Anticipate recognizing revenue from the GSK data license in the second half of fiscal 2025.

• Current cash resources are expected to fund operations for at least 12 months.

• The company is pursuing strategic alternatives, including a potential go-private transaction.