Castle Biosciences Reports Fourth Quarter and Full-Year 2024 Results
Castle Biosciences Reports Fourth Quarter and Full-Year 2024 Results
Full-year 2024 revenue of $332 million, an increase of 51% compared to 2023 and above previously reported guidance
Delivered 96,071 total test reports in 2024, an increase of 36% compared to 2023
Year-end 2024 cash, cash equivalents and marketable investment securities of $293 million, a $50 million increase compared to 2023
Anticipate generating between $280-295 million in total revenue in 2025
Conference call and webcast today at 4:30 p.m. ET
FRIENDSWOOD, Texas--(BUSINESS WIRE)--$CSTL #diagnostics--Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced its financial results for the fourth quarter and year ended December 31, 2024.
“Castle delivered an outstanding fourth quarter that rounded out an exceptional 2024, including 51% revenue growth and 36% test report volume growth compared to 2023,” said Derek Maetzold, president and chief executive officer of Castle Biosciences. “I am incredibly proud of our team's hard work in achieving these results, including achieving our previously provided 2025 revenue guidance range one year ahead of expectations.
“We are extremely pleased with the progress we made across our initiatives in 2024 in the areas of our core growth drivers, including a 17% increase in our dermatologic test reports (DecisionDx®-Melanoma and DecisionDx®-SCC combined) and a 130% increase in our TissueCypher® Barrett’s Esophagus test reports, over 2023. We believe this was driven largely by the clinical value of our tests, strong execution on our commercial strategy and expansion of our clinical evidence base.
“Building on our momentum and successes, we expect to continue to focus on delivering operational excellence. Further, sound capital allocation remains a priority, including pursuing strategic opportunities, aimed at driving stockholder value in 2025 and beyond.”
Twelve Months Ended December 31, 2024, Financial and Operational Highlights
- Revenues were $332.1 million, a 51% increase compared to $219.8 million in 2023.
- Adjusted Revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $333.8 million, a 49% increase compared to $224.3 million in 2023.
- Delivered 96,071 total test reports in 2024, an increase of 36% compared to 70,429 in 2023: DecisionDx-Melanoma test reports delivered in 2024 were 36,008, compared to 33,330 in 2023. DecisionDx-SCC test reports delivered in 2024 were 16,348, compared to 11,442 in 2023. MyPath® Melanoma test reports delivered in 2024 were 3,909, compared to 3,962 MyPath Melanoma and DiffDx®-Melanoma aggregate test reports in 2023. TissueCypher Barrett’s Esophagus test reports delivered in 2024 were 20,956, compared to 9,100 in 2023. IDgenetix® test reports delivered in 2024 were 17,151, compared to 10,921 in 2023. DecisionDx®-UM test reports delivered in 2024 were 1,699, compared to 1,674 in 2023.
- Gross margin for 2024 was 79%, and Adjusted Gross Margin was 82%, compared to 75% and 80% respectively for the same periods in 2023.
- Net cash provided by operations was $64.9 million, compared to net cash used in operations of $5.6 million in 2023.
- Net income for 2024, which includes non-cash stock-based compensation expense of $50.3 million, was $18.2 million, compared to a net loss of $57.5 million in 2023.
- Adjusted EBITDA for 2024 was $75.0 million, compared to $(4.4) million in 2023.
Cash, Cash Equivalents and Marketable Investment Securities
As of December 31, 2024, the Company’s cash, cash equivalents and marketable investment securities totaled $293.1 million.
Fourth Quarter Ended December 31, 2024, Financial and Operational Highlights
- Revenues were $86.3 million, a 31% increase compared to $66.1 million during the same period in 2023.
- Adjusted Revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $85.8 million, a 22% increase compared to $70.2 million for the same period in 2023.
- Delivered 24,071 total test reports, an increase of 19% compared to 20,284 in the same period of 2023: DecisionDx-Melanoma test reports delivered in the quarter were 8,672, compared to 8,591 in the fourth quarter of 2023. DecisionDx-SCC test reports delivered in the quarter were 4,299, compared to 3,530 in the fourth quarter of 2023. MyPath Melanoma test reports delivered in the quarter were 879, compared to 1,018 in the fourth quarter of 2023. TissueCypher Barrett’s Esophagus test reports delivered in the quarter were 6,672, compared to 3,441 in the fourth quarter of 2023. IDgenetix test reports delivered in the quarter were 3,125, compared to 3,299 in the fourth quarter of 2023. In late 2024, the Company made modifications to its promotional investments for IDgenetix, shifting resources to inside sales and non-personal promotion. DecisionDx-UM test reports delivered in the quarter were 424, compared to 405 in the fourth quarter of 2023.
- Gross margin was 76%, and Adjusted Gross Margin was 81%, compared to 78% and 82% respectively for the same periods in 2023.
- Net cash provided by operations was $24.4 million, compared to $18.6 million for the same period in 2023.
- Net income, which includes non-cash stock-based compensation expense of $11.4 million, was $9.6 million, compared to a net loss of $2.6 million for the same period in 2023.
- Adjusted EBITDA was $21.3 million, compared to $9.4 million for the same period in 2023.
2025 Outlook
The Company anticipates generating between $280-295 million in total revenue in 2025.
Fourth Quarter and Recent Accomplishments and Highlights
Dermatology
- DecisionDx-Melanoma: Findings from a prospective, multicenter study demonstrating the significant impact of the DecisionDx-Melanoma test on sentinel lymph node biopsy (SLNB) decision-making for patients with melanoma were recently published in the World Journal of Surgical Oncology; further, no patient with a DecisionDx-Melanoma-predicted risk of SLN positivity of less than 5% who decided to have an SLNB procedure had a positive node.
- DecisionDx-Melanoma: The Company announced the publication of a new independent meta-analysis in Cancers assessing the efficacy of its DecisionDx-Melanoma test in predicting melanoma patient outcomes. The article, titled “The Prognostic Value of the 31-Gene Expression Profile Test in Cutaneous Melanoma: A Systematic Review and Meta-Analysis,” concluded that DecisionDx-Melanoma consistently provides improved risk stratification over staging alone to inform personalized management strategies for patients with cutaneous melanoma (CM). This recently published meta-analysis encompassed 13 peer-reviewed publications involving thousands of patients and affirmed the powerful risk stratification provided by DecisionDx-Melanoma and its potential to significantly improve care for patients with CM. See the Company’s news release from Dec. 12, 2024, for more information.
- DecisionDx-Melanoma: The Company announced the latest data from a prospective, multicenter study exploring the impact of integrating DecisionDx-Melanoma test results into SLNB decision-making for patients recently diagnosed with melanoma. The updated findings demonstrated the power of the test’s results to accurately identify patients with a low risk of metastasis who can safely forgo SLNB, thereby reducing unnecessary SLNB procedures and the associated costs and risks of complications that accompany them. The data was presented in a poster and oral presentation at The European Congress on Dermato-Oncology (Dermato-Onco2024) recently held in Vienna, Austria. See the Company’s news release from Nov. 6, 2024, for more information.
- DecisionDx-SCC: The Company announced that its poster on DecisionDx-SCC was selected as a “Late Breakers” top five finalist for the Akamai Award, recognizing the best posters at Maui Derm Hawaii 2025. Specifically, the poster shared new data from a study involving Castle’s largest cohort of patients with cutaneous squamous cell carcinoma (SCC) to date (n=1,408). This study demonstrated improved risk stratification of patients with SCC tumors located on the head or neck when the test’s results are combined with Brigham and Women’s Hospital (BWH) staging. See the Company’s news release from Jan. 17, 2025, for more information.
Gastroenterology
- The Company announced that it received assay approval from the New York State Department of Health (NYSDOH) for its TissueCypher Barrett’s Esophagus (BE) test. With this approval, all of the tests in Castle’s dermatology, gastroenterology and ophthalmology portfolios, as well as its clinical laboratories in Phoenix and Pittsburgh, are now approved by the state of New York. See the Company’s news release from Jan. 6, 2025, for more information.
Corporate
- The Company announced that it was named a Houston Top Workplace for 2024 by the Houston Chronicle. This was the fourth consecutive year the Company was ranked among the Houston metro area’s top workplaces. Castle also earned three Culture Excellence awards in the areas of Employee Appreciation, Employee Well-Being and Professional Development. See the Company’s news release from Nov. 19, 2024, for more information.
Conference Call and Webcast Details
Castle Biosciences will hold a conference call on Thursday, Feb. 27, 2025, at 4:30 p.m. Eastern time to discuss its fourth quarter and full-year 2024 results and provide a corporate update.
A live webcast of the conference call can be accessed here: https://events.q4inc.com/attendee/686536610 or via the webcast link on the Investor Relations page of the Company’s website, https://ir.castlebiosciences.com/overview/default.aspx. Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until March 20, 2025.
To access the live conference call via phone, please dial 833 470 1428 from the United States, or +1 404 975 4839 internationally, at least 10 minutes prior to the start of the call, using the conference ID 944585.
There will be a brief Question & Answer session following management commentary.
Use of Non-GAAP Financial Measures (UNAUDITED)
In this release, we use the metrics of Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to GAAP net revenues to exclude net positive and/or net negative revenue adjustments recorded in the current period associated with changes in estimated variable consideration related to test reports delivered in previous periods. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted EBITDA excludes from net loss: interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense and change in fair value of trading securities.
We use Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and operating performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors’ analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition-related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which are applicable only to tests we acquired rather than internally developed. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.
These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin or net loss reported in accordance with GAAP; should be considered in conjunction with our financial information presented in accordance with GAAP; have no standardized meaning prescribed by GAAP; are unaudited; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this release.
About Castle Biosciences
Castle Biosciences (Nasdaq: CSTL) is a leading diagnostics company improving health through innovative tests that guide patient care. The Company aims to transform disease management by keeping people first: patients, clinicians, employees and investors.
Castle’s current portfolio consists of tests for skin cancers, Barrett’s esophagus, mental health conditions and uveal melanoma. Additionally, the Company has active research and development programs for tests in these and other diseases with high clinical need, including its test in development to help guide systemic therapy selection for patients with moderate-to-severe atopic dermatitis seeking biologic treatment. To learn more, please visit www.CastleBiosciences.com and connect with us on LinkedIn, Facebook, X and Instagram.
DecisionDx-Melanoma, DecisionDx-CMSeq, i31-SLNB, i31-ROR, DecisionDx-SCC, MyPath Melanoma, DiffDx-Melanoma, TissueCypher, IDgenetix, DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq are trademarks of Castle Biosciences, Inc.
CASTLE BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
Three Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
2024
2023
(unaudited)
(unaudited)
NET REVENUES
$
86,311
$
66,120
$
332,069
$
219,788
OPERATING EXPENSES AND OTHER OPERATING INCOME
Cost of sales (exclusive of amortization of acquired intangible assets)
16,183
12,423
60,205
44,982
Research and development
11,773
12,994
52,041
53,618
Selling, general and administrative
49,965
44,090
200,047
180,152
Amortization of acquired intangible assets
4,340
2,271
11,106
9,013
Total operating expenses, net
82,261
71,778
323,399
287,765
Operating income (loss)
4,050
(5,658
)
8,670
(67,977
)
Interest income
3,372
3,119
12,916
10,623
Changes in fair value of trading securities
555
—
555
—
Interest expense
(92
)
(2
)
(577
)
(11
)
Income (loss) before income taxes
7,885
(2,541
)
21,564
(57,365
)
Income tax (benefit) expense
(1,705
)
39
3,319
101
Net income (loss)
$
9,590
$
(2,580
)
$
18,245
$
(57,466
)
Earnings (loss) per share:
Basic
$
0.34
$
(0.10
)
$
0.66
$
(2.14
)
Diluted
$
0.32
$
(0.10
)
$
0.62
$
(2.14
)
Weighted-average shares outstanding:
Basic
28,126
27,030
27,776
26,802
Diluted
30,200
27,030
29,255
26,802
Stock-Based Compensation Expense
Stock-based compensation expense is included in the condensed consolidated statements of operations as follows (in thousands):
Three Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
2024
2023
(unaudited)
(unaudited)
Cost of sales (exclusive of amortization of acquired intangible assets)
$
1,350
$
1,219
$
5,529
$
4,938
Research and development
1,987
2,364
9,598
10,119
Selling, general and administrative
8,102
8,219
35,193
36,162
Total stock-based compensation expense
$
11,439
$
11,802
$
50,320
$
51,219
CASTLE BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
2024
2023
(unaudited)
(unaudited)
Net income (loss)
$
9,590
$
(2,580
)
$
18,245
$
(57,466
)
Other comprehensive (loss) income:
Net unrealized (loss) gain on debt securities held as available-for-sale
(243
)
207
94
517
Comprehensive income (loss)
$
9,347
$
(2,373
)
$
18,339
$
(56,949
)
CASTLE BIOSCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
December 31, 2024
December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents
$
119,709
$
98,841
Marketable investment securities
173,421
144,258
Accounts receivable, net
51,218
38,302
Inventory
8,135
7,942
Prepaid expenses and other current assets
7,671
6,292
Total current assets
360,154
295,635
Long-term accounts receivable, net
918
1,191
Property and equipment, net
51,122
25,433
Operating lease assets
11,584
12,306
Goodwill and other intangible assets, net
106,229
117,335
Other assets – long-term
1,228
1,440
Total assets
$
531,235
$
453,340
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable
$
6,901
$
10,268
Accrued compensation
32,555
28,945
Operating lease liabilities
1,665
1,137
Current portion of long-term debt
278
—
Other accrued and current liabilities
7,993
7,317
Total current liabilities
49,392
47,667
Long term debt
9,745
—
Noncurrent operating lease liabilities
14,345
14,173
Noncurrent finance lease liabilities
311
25
Deferred tax liability
1,607
206
Total liabilities
75,400
62,071
Stockholders’ Equity
Common stock
28
27
Additional paid-in capital
655,703
609,477
Accumulated deficit
(200,126
)
(218,371
)
Accumulated other comprehensive income
230
136
Total stockholders’ equity
455,835
391,269
Total liabilities and stockholders’ equity
$
531,235
$
453,340
Contacts
Investor Relations Contact
Camilla Zuckero [email protected] 281-906-3868
Media Contact
Allison Marshall [email protected]
Read full story here