Cologuard keeps delivering for Exact Sciences.

The multi-omics diagnostic leader turned in a solid second-quarter 2023 performance at first glance. The business generated the highest quarterly operating cash flow since the final three months of 2020, when COVID-19 testing revenue surged and non-cash charges helped to inflate the number. It has now delivered positive operating cash flow for three consecutive quarters.

One blemish that stands out: general and administrative expenses (excluding sales, so this isn't to be confused with SG&A) are growing rapidly. Exact Sciences reported $238 million in G&A expenses during the second quarter. That follows a first-quarter total of $217.3 million and $193.9 million in the fourth quarter of last year. The recent increases have eaten any benefit from growing revenue -- in the last three months, anyway. It's a metric to watch going forward, listen for on the quarterly conference call, and search for in regulatory documents.

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Full-year revenue guidance was raised for each segment -- even COVID-19 testing (it's still immaterial).

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Despite the increased guidance, Solt DB Invest still expects higher revenue in full-year 2023. This is from our 2023 model that was shared in May 2023 and has not been updated to reflect second-quarter 2023 results. We may update our models after digging into the data further, although a quick glance at the numbers suggest Exact Sciences is on pace to almost exactly hit our modeled revenue for each segment.

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I'll listen in on a recorded version of the earnings call and pore over SEC filings (if published) ahead of the weekly update on Friday.

Further Reading

• August 2023 press release announcing second-quarter 2023 results
• June 2023 research note discussing disappointing BLUE-C data
• May 2023 research note from Solt DB Invest discussing first-quarter 2023 results

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