Shares of 23andMe Holding Co. tumbled 15.8% on Thursday after the company reported a 33% decrease in sales for the fiscal third quarter. This decline was primarily driven by lower consumer services and research revenue.
According to Dow Jones Market Data, this marks the largest daily percentage decline for 23andMe shares since November 9, 2023 when they fell 21.96%. It is also the fourth-worst daily percentage decline for the stock.
In the third quarter, 23andMe’s revenue dropped to $44.7 million from $66.9 million in the same period last year. The company attributed this decrease to lower research revenue following the conclusion of its exclusive collaboration with GSK PLC in July 2023, as well as lower consumer services revenue due to a decline in sales volume of PGS (Preimplantation Genetic Screening) kits and telehealth orders. However, these declines were partially offset by higher revenue from non-recurring payments from other research partners and growth in membership services revenue.
Analysts surveyed by FactSet had forecasted sales of $54 million for this quarter.
Consumer Services Account for Majority of Revenue
Consumer services, including PGS, telehealth, and membership services, accounted for approximately 96% of 23andMe’s total third-quarter revenue. Research services made up the remaining 4%.
In terms of net loss, the company reported a loss of $278 million, or 58 cents per share, compared to a loss of $92 million, or 20 cents per share, in the same quarter last year. Analysts were expecting a loss of 14 cents per share.
Furthermore, 23andMe has revised its full-year revenue guidance to be between $215 million and $220 million, down from its previous forecast of $240 million to $250 million.
Shares Experience Significant Decline
Over the past 52 weeks, shares of 23andMe have fallen by 77.6%, in stark contrast to the S&P 500 index’s gain of 22.3%.
It is clear that 23andMe is facing challenges in generating revenue, particularly in its consumer services and research divisions. As the company continues to navigate this decline, stakeholders will closely monitor its ability to bounce back and regain profitability.