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Why Invitae's Q4 Results Didn't Fire Up Investors

By Keith Speights - Feb 18, 2021 at 6:05AM

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The company's revenue soared, but so did its expenses.

Invitae (NVTA -9.47%) delivered a sizzling performance in 2020, with its shares skyrocketing 159%. That sizzle fizzled somewhat last month, though, after the medical genetics company announced a dilution-causing stock offering.

The company reported its fourth-quarter results after the market closed on Wednesday. The healthcare stock slipped a little in after-hours trading. Here are the highlights from Invitae's latest quarterly update.

Scientists in front of computer screens with DNA displayed on one screen

Image source: Getty Images.

By the numbers

Invitae reported revenue in the fourth quarter of $100.4 million, a 51% year-over-year jump. This result topped the Wall Street consensus estimate of $98.4 million.

The company announced a net loss in the fourth quarter of $241 million, or $1.34 per share, based on generally accepted accounting principles (GAAP). In the prior-year period, Invitae posted a GAAP net loss of $76.9 million, or $0.79 per share.

Invitae's bottom line looked somewhat better on an adjusted non-GAAP basis. The company recorded a Q4 adjusted net loss of $113.1 million, or $0.63 per share. In the prior-year period, Invitae's net loss totaled $61 million. Analysts had projected a Q4 net loss of $0.55 per share.

Behind the numbers

The company reported 659,000 in billable test volume for full-year 2020. More than 36% of that total (238,000) came in the fourth quarter.

There's no secret behind much of Invitae's growth. The medical genetics company completed the acquisition of ArcherDX on Oct. 5, 2020. This deal gave Invitae a broader offering of testing services.

However, the ArcherDX transaction was also largely responsible for Invitae's big increase in expenses during the fourth quarter. The company's general and administrative expenses soared more than tenfold year over year to $242.6 million. Most of this increase was directly related to the ArcherDX acquisition.

Invitae's research and development costs and selling and marketing expense also jumped significantly compared to the prior-year period. Again, the ArcherDX deal was a key factor behind these increases.

Looking ahead

The company continues to project revenue growth of between 50% and 60% annually over the next few years. Invitae looks for full-year 2021 revenue of more than $450 million.

CEO Sean George stated that Invitae is "committed to maintaining the pace [the company has] set, making it ever-easier to integrate genetic information into healthcare decision-making by clinicians and patients at all stages of life." With the genetic testing market growing, Invitae should have strong growth prospects for the foreseeable future.

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