23andMe Holding Co. reported its financial results for the three and six months ended September 30, 2024, revealing a decline in total revenue and ongoing challenges in profitability. Total revenue for the quarter was $44.1 million, a decrease of 12% from $50.0 million in the same period of 2023. For the six months, revenue fell 24% to $84.5 million from $110.9 million in the prior year. The decline was primarily attributed to a significant drop in revenue from Personal Genome Service (PGS) kits, which saw a $6.9 million decrease due to lower sales volume and reduced average selling prices.

Despite the revenue decline, the company reported a slight increase in gross profit for the quarter, rising to $22.4 million from $21.7 million in 2023, resulting in a gross margin improvement from 43% to 51%. Operating expenses decreased by 17% to $83.6 million for the quarter, contributing to a net loss of $59.1 million, an improvement from a net loss of $75.3 million in the same period last year. For the six months, the net loss was $128.5 million, down from $179.9 million in 2023.

The company’s accumulated deficit worsened to $2.3 billion as of September 30, 2024, and total current assets decreased to $188.8 million from $255.3 million at the end of the previous fiscal year. Cash and cash equivalents also fell to $126.6 million, down from $264.8 million in 2023. The company has expressed substantial doubt about its ability to continue as a going concern, indicating a need for additional liquidity to meet its financial commitments over the next 12 months.

Strategically, 23andMe has been restructuring its operations, including a significant reduction in workforce. On November 8, 2024, the company announced a plan to lay off approximately 223 employees, representing about 40% of its workforce, primarily affecting its Therapeutics segment. This reduction is expected to result in annualized payroll savings of over $35 million. The company also executed a one-for-twenty reverse stock split effective October 16, 2024, to regain compliance with Nasdaq's Minimum Bid Requirement.

In terms of product offerings, 23andMe launched the 23andMe+ Total Health membership in November 2023, which aims to enhance customer retention and expand its market presence. The company continues to focus on evolving its product offerings and managing operational expenses to improve its financial condition.