Q1 2025 23andMe Holding Co Earnings Call

Okay.

Operator: Hello, and welcome to 23andMe's fiscal year 2025 first quarter financial results conference call. As a reminder, this call is being recorded. At this time, all participants are on listen-only mode. After the speaker's prepared remarks, there will be a question and answer session. I would now like to turn the call over to Ian Cooney, Senior Director of Investor Relations at 23andMe, to lead off the call. Thank you.

Speaker Change: Hello, and welcome to twenty-three unleash this school year, 'twenty 25 first quarter financial results Conference call.

Speaker Change: As a reminder, this call's being recorded at this time all participants on listen only mode.

Speaker Change: After the Speakers' prepared remarks, there'll be a question and answer session I would now like to turn the call over to Ian Cooney Senior director of Investor Relations at 23, and me to me off the call. Thank you. Please go ahead.

Ian Cooney: Thank you. Before we begin, I encourage everyone to go to investors.23andme.com to find the press release we issued earlier today reporting our financial results for the first quarter of fiscal 2025. A replay of today's webcast will also be available on our website. Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods, are forward-looking statements.

Speaker Change: Thank you before.

Speaker Change: Before we begin I encourage everyone to go to investors docked 23, <unk> dot com to find the press release, we issued earlier today reporting our financial results for the first quarter of fiscal 2025.

Speaker Change: A replay of today's webcast will also be available on our website.

Speaker Change: Please note that certain statements made during this call regarding matters that are not historical facts.

Speaker Change: <unk>, but not limited to management's outlook or predictions for future periods are forward looking statements.

Ian Cooney: These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in our press release, which applies to this call. Also, please refer to our SEC filings, which can be found on our website and the SEC's website, for a discussion of numerous factors that may impact our future performance. We also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliation to U.S. GAAP may be found in our earnings release.

Speaker Change: These statements are based solely on information that is now available to us.

Speaker Change: We encourage you to review the section entitled forward looking statements in our press release, which applies to this call.

Speaker Change: Also please refer to our SEC filings, which can be found on our website and the Sec's website for a discussion of numerous factors that may impact our future performance.

Speaker Change: We also discuss certain non-GAAP measures important information on our use of these measures and reconciliation to U S. GAAP may be found in our earnings release.

Ian Cooney: Joining us on our call today are Anne Wojcicki, our chief executive officer and co founder, and Joe Selsavage, our chief financial and accounting officer. Jennifer Low, our Head of Therapeutics Development, will join us for Q&A. I'd now like to turn the call over to Joe.

Speaker Change: Joining us on our call today are Andrew.

Speaker Change: <unk>, our Chief Executive Officer, and co founder and Joe cell salvage, our chief financial and Accounting Officer, Jennifer Lowe, our head of Therapeutics development will join us for Q&A.

Speaker Change: I would now like to turn the call over to Joe.

Joe Selsavage: Thank you, Ian. Hello, everyone.

Thank you Ian and Hello, everyone.

Joe Selsavage: Reiterating what we said on our last call, the focus of the call is on the first quarter fiscal 2025 results. We will not comment on the ongoing process of reviewing potential TIG private proposals or strategic alternatives. This call is focused solely on the company and its earnings release, and we will not be addressing or responding to any questions regarding the aforementioned matters on this call. I'd now like to turn the call over to Anne.

Speaker Change: Reiterating what we said on our last call.

Speaker Change: The focus of the call is on the first quarter fiscal 2025 results.

Speaker Change: We'll not comment on the ongoing process.

Speaker Change: Viewing potential take private proposals or strategic alternatives.

Speaker Change: This call is focused solely on the company and its earnings release, and we will not be addressing are responding to any questions regarding the aforementioned matters on this call.

Speaker Change: I'd now like to turn the call over to Ann.

Ann: Thank you Joe.

Anne Wojcicki: Hello everyone, the first quarter saw us achieve significant progress on our key objective of becoming a sustainably growing, profitable company while remaining committed to our vision of improving the health of millions of people worldwide. We remain focused on adding value to and prioritizing memberships in our PGS segment, driving growth in telehealth, and leveraging our data assets to create a thriving, profitable research data business. Over the past quarter, we also presented data at two major oncology conferences, the American Association for Cancer Research and the American Association of Clinical Oncology, highlighting the continued progress of our clinical stage therapeutics assets. Starting with the consumer business.

Ann: Hello, everyone. The first quarter saw us achieve significant progress on our key objective of becoming a sustainably growing profitable company, while remaining committed to our vision of improving the health of millions of people worldwide.

We remain focused on adding value to and prioritizing memberships in our Pts segment.

Speaker Change: Driving growth in telehealth, and leveraging our data assets to create a thriving profitable research data business.

Operator: Hello, and welcome to 23andMe's fiscal year 2025 First Quarter Financial Results Conference call. As a reminder, this call is being recorded at this time of participants on Listen Only Mode. After this, because prepared remarks, there will be a question and answer session.

Speaker Change: Over the past quarter. We also presented data at two major oncology conferences. The American Association for cancer Research and the American Society of clinical oncology, highlighting the continued progress of our clinical stage therapeutic assets.

Ian Cooney: I would not like to turn the call over to Ian Cooney, Senior Director of Investulations at 23andMe to meet up the call. Thank you. Please go ahead. Thank you.

Anne Wojcicki: Today we are excited to announce we have launched a large-scale research study to help identify the genetic mechanism that may drive the efficacy and potential side effects of GLP-1. Through our unique research model, we believe we can quickly scale the study through our outreach to the millions of 23andMe customers who have consented to participate in research. In conjunction with this research, we are planning to launch a GLP-1 weight loss telehealth membership on the Lemonade Health platform at the end of this month. This will enable members to be prescribed and receive brand name or compounded semaglutide medication.

Speaker Change: Starting with the consumer business today, we are excited to announce we launched a large scale research study to help identify the genetic mechanism that may drive the efficacy and potential side effects of DLP widens.

Ian Cooney: Before we begin, I encourage everyone to go to investors.23andMe.com to find the press release we issued earlier today reporting our financial results for the first quarter of fiscal 2025. A replay of today's webcast will also be available on our website.

Speaker Change: Through our unique research model. We believe we can quickly scale. This study through our outreach to the millions of 23, new customers, who have consented to participate in research.

Speaker Change: In conjunction with this research we are planning to launch a <unk> weight loss telehealth membership on the eliminated health platform at the end of this month.

Operator: Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in our Press Relief, which applies to this call. Also, please refer to our SEC filings which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance.

Speaker Change: This will enable members to be prescribed and receive brand name or compounded scenically tide medications.

Anne Wojcicki: The addition of weight loss management for our customers fits directly within our strategy of delivering services to improve an individual's health through preventive action. We also continue to add features to our membership services as we focus on creating lasting value that can help our members remain focused on improving their health. This quarter, we added another polygenic risk score report for bipolar disorder, bringing our market-leading total available PRS reports to over 30.

Speaker Change: The addition of weight loss management for our customers fits directly within our strategy of delivering services to improve and individuals' health through preventive actions.

Speaker Change: We also continue to add features to our membership services as we focus on creating longitudinal value that can help our members remained focused on improving their health.

Speaker Change: This quarter, we added another polygenic risk score report for bipolar disorder, bringing our market, leading total available Prs reports to over 30.

Operator: We also discuss certain non-GAP measures, important information on our use of these measures and reconciliation to U.S. GAP may be found in our earnings release.

Anne Wojcicki: And we have more planned rollouts in the near future. We continue to build out our total health offering with the addition of a proprietary biological age feature to help members monitor how their body is aging physiologically over time. We also recently announced a collaboration with Nightingale Health to pilot a metabolomic blood biomarker panel with a cohort of our 23andMe plus members. We believe this collaboration, if successful, can help customers access, track, and optimize their health with a new generation of biomarker products.

Speaker Change: And we have more planned rollouts in the near future.

Speaker Change: We continue to build out our total health offering with the addition of a proprietary biological age feature to help members monitor how their body is aging physiologically overtime.

Ian Cooney: Joining us on our call today are Anne Wajiski, our chief executive officer and co-founder, and Joe Sal Savage, our chief financial and accounting officer.

Ian Cooney: Jennifer Low, our head of therapeutic development, will join us for Q&A.

Speaker Change: We also recently announced a collaboration with Nightingale health to pilot a metabolomics blood biomarker panel with a cohort of our 23, new plus members.

Joe Sal Savage: I'd now like to turn the call over to Joe. Thank you, Ian.

Joe Sal Savage: Hello, everyone. Reiterating what we said on our last call, the focus of the call is on the first quarter fiscal 2025 results. We will not comment on the ongoing process of reviewing potential take-private proposals or strategic alternatives. This call is focused solely on the company and its earnings release. And we will not be addressing or responding to any questions regarding the aforementioned matters on this call.

Speaker Change: We believe this collaboration if successful can help.

Speaker Change: Customers access track and optimize their health with a new generation of biomarker products.

Anne Wojcicki: I'm happy to report that this continued focus on improving the value of our membership offerings is paying off. This quarter, we saw meaningfully improved membership revenue growth from the previous year. We also saw better member retention metrics, higher upgrade rates, and increased LTV in telehealth, all of which we believe should persist.

Speaker Change: I am happy to report that this continued focus on improving the value of our membership offerings is paying off.

Speaker Change: This quarter, we saw meaningfully improved membership revenue growth from the previous year.

Speaker Change: We also saw better member retention metrics higher upgrade rates and increased LTV and telehealth.

Joe Sal Savage: I'd now like to turn the call over to Anne. Thank you, Joe.

Anne Wojcicki: Hello, everyone. The first quarter saw us achieve significant progress on our key objective of becoming a sustainably growing, profitable company, while remaining committed to our vision of improving the health of millions of people worldwide. We remain focused on adding value to and prioritizing membership in our PGS segment, driving growth and telehealth and leveraging our data assets to create a thriving, profitable research data business. Over the past quarter, we also presented data at two major oncology conferences, the American Association for Cancer Research, and the American Society of Clinical Oncology, highlighting the continued progress of our clinical stage therapeutic assets.

Speaker Change: All of which we believe should persist.

Anne Wojcicki: Our membership offerings are the most effective way for us to help our customers change their health trajectories over time, while also enabling a scalable, sustainable business model. So we are encouraged by these tangible signs of progress. Moving to the research data business

Speaker Change: Our membership offerings are the most effective way for us to help our customers change their health trajectories over time, while also enabling a scalable sustainable business model. So we are encouraged by these tangible signs of progress.

Anne Wojcicki: Last month, we collaborated with over 20 lung cancer advocacy organizations to launch a study that aims to advance genetic research in lung cancer. The study aims to build a comprehensive open source database of heritable genetics and patient-reported data on lung cancer. Through this research, we collectively hope to better understand the genetics of people with lung cancer in order to improve detection, risk reduction, and care.

Speaker Change: Moving to the research data business last month, we collaborated with over 20 lung cancer advocacy organizations to launch a study that aims to advance genetic research in lung cancer.

Speaker Change: The study aims to build a comprehensive open source database of heritable genetics, and a patient reported data in lung cancer.

Speaker Change: Through this research, we collectively hope to better understand the genetics that people with lung cancer in order to improve detection risk reduction and care.

Anne Wojcicki: Starting with the consumer business, today we are excited to announce we launched a large-scale research study to help identify the genetic mechanism that may drive the efficacy and potential side effects of GLP1. Through our unique research model, we believe we can quickly scale the study through our outreach to the millions of 23Me customers who have consented to participate in research.

Anne Wojcicki: This quarter, we also announced the publication of research findings on the LRRK2 gene in Parkinson's disease in the journal Brain. Highlighting the power and potential of 23andMe's database, the cohort that participated in the LRRK2 study is three times bigger than any other study published, and is 23andMe's first paper to utilize longitudinal perspective data collection. I remain extremely encouraged by the potential for our research data. On the innovation front, we are actively developing a suite of AI models to enhance both our consumer and research data businesses.

Speaker Change: This quarter, we also announced the publication of research findings on the alert to gene in Parkinson's disease, and the journal brain Hi.

Speaker Change: Highlighting the power and potential of <unk> 23 in these database the cohort that participated in the alert two study is three times bigger than any other pulp study published and is 23 <unk> first paper to utilize longitudinal prospective data collection.

Anne Wojcicki: In conjunction with this research, we are planning to launch a GLP-1 weight loss telehealth membership on the Lemonade Health platform at the end of this month. This will enable members to be prescribed and receive brand name or compounded semi-glutide medications. The addition of weight loss management for our customers fits directly within our strategy of delivering services to improve an individual's health through preventive actions. We also continue to add features to our membership services as we focus on creating longitudinal value that can help our members remain focused on improving their health.

Speaker Change: I remain extremely encouraged by the potential for our research data business.

Speaker Change: On the innovation front, we are actively developing a suite of AI model to enhance both our consumer and research data businesses.

Anne Wojcicki: We continue to make significant progress in developing new AI models to unlock novel insights about the human genome using our proprietary database. For example, our research data business recently published a preprint demonstrating how large language models can be leveraged to better interpret genetic association studies, helping to more accurately pinpoint genes linked to a variety of diseases and phenotypes.

Speaker Change: We continue to make significant progress in developing new AI models to unlocking novel insights about the human genome using our proprietary database.

Speaker Change: Our research data business recently published a preprint demonstrating how large language models can be leveraged to better interpret genetic association studies, helping to more accurately pinpoint genes linked to a variety of diseases and phenotype.

Anne Wojcicki: This quarter, we added another polygenic riskor report for bipolar disorder, bringing our market leading total available PRS reports to over 30 and we have more plans we will allow in the near future. We continue to build out our total health offering with the addition of a proprietary biological age feature to help members monitor how their body is aging physiologically over time.

Anne Wojcicki: These initiatives leverage the size and scale of 23andMe's unique database to deliver more effective personalized health recommendations and accelerate therapeutic target discovery. Moving to our Therapeutics business, Q1 saw us present data at both AACR in April and ASCO in June.

Speaker Change: These initiatives leverage the size and scale of <unk> 23 in these unique database to deliver more effective personalized health recommendations and accelerate therapeutic target discovery.

Speaker Change: Moving to our therapeutics business Q1 saw us present data at both ACR in April and <unk> in June.

Anne Wojcicki: We also recently announced a collaboration with Nightingale Health to pilot a metabolomics blood biomarker panel with a cohort of our 23-Me plus members. We believe this collaboration, if successful, can help customers access, track and optimize their health with a new generation of biomarker products.

Anne Wojcicki: We continue to be pleased with the progress of 23andMe 610 as monotherapy, which continues to demonstrate therapeutic potential for inhibiting CD200R1 in cancer patients. We are also seeing evidence of CD200 emerging as a potential biomarker associated with 23andMe 610 monotherapy efficacy. In addition, we are encouraged by the continued safety and tolerability profile of 23andMe 610, which, as presented at AACR earlier this year, points to potential combination strategies with commonly used standard of care agents for added therapeutic benefit in cancer patients.

Speaker Change: We continue to be pleased with the progress of 23, <unk> <unk> as monotherapy, which continues to demonstrate therapeutic potential for inhibiting <unk> 200, or one in cancer patients.

Speaker Change: We are also seeing evidence of CB 200, emerging as a potential biomarker associated with 23 and me 610 monotherapy efficacy.

Anne Wojcicki: I'm happy to report that this continues focus on improving the value of our membership offerings is paying off. This quarter we saw meaningfully improved membership revenue growth from the previous year. We also saw better member retention metrics, higher upgrade rates and increased LTV in telehealth, all of which we believe should persist. Our membership offerings are the most effective way for us to help our customers change their health trajectories over time while also enabling a scalable, sustainable business model. So we are encouraged by these tangible signs of progress.

Speaker Change: Further we are encouraged by the continued safety and Tolerability profile of 23, <unk>, which as presented at ACR earlier this year points to potential combination strategies with commonly used standard of care agents for added therapeutic benefit in cancer patients.

Anne Wojcicki: We plan on sharing additional clinical and biomarker data at upcoming scientific conferences later this year. At AACR, we also have the opportunity to present the genetic and biological rationale for bringing our 23andMe 1473 program into the clinic. As we have previously disclosed, we have initiated our phase one clinical trial in solid tumor oncology, and we look forward to sharing the results of that study in 2025. Finally, I'd like to acknowledge the 8K we put out this afternoon, announcing that Bill Richards is stepping down as head of Therapeutics Discovery and the elimination of our Therapeutics Discovery group.

Speaker Change: We plan on sharing additional clinical and biomarker data at upcoming scientific conferences later this year.

Speaker Change: At ACR, we also have the opportunity to present, the genetics and biological rationale for bringing our 23 and me $14 73 program into the clinic.

Anne Wojcicki: Moving to the research data business, last month we collaborated with over 20 lung cancer advocacy organizations to launch a study that aims to advance genetic research in lung cancer. The study aims to build a comprehensive, open source database of heritable genetics and the patient reported data in lung cancer. Through this research we collectively hope to better understand the genetics of people with lung cancer in order to improve detection, risk reduction and care.

Speaker Change: As we have previously disclosed we have initiated our phase one clinical trial in solid tumor oncology and we look forward to sharing the results of that study in 2025.

Speaker Change: Finally, I'd like to acknowledge the 8-K, we put out this afternoon announcing that bill Richard is stepping down as head of Therapeutics discovery and the elimination of our Therapeutics Discovery group.

Anne Wojcicki: Our Therapeutics Discovery Team has identified hundreds of new targets leveraging our unique database, and they were the original foundation upon which we launched our 23andMe Therapeutics organization. I want to truly thank them for all their hard work and dedication. I also want to make it clear that today's news does not impact our ability to pursue collaborations that leverage our database for discovery and other therapeutic insights or the therapeutics development team led by Jennifer Low, or indicate any change in enthusiasm for our two clinical assets.

Speaker Change: Our therapeutics discovery team has identified hundreds of new targets leveraging our unique database and they were the original foundation upon which we launched our <unk> Therapeutics organization.

Anne Wojcicki: This quarter we also announced the publication of research findings on the Lurk 2 gene in Parkinson's disease in the journal Brain. Highlighting the power and potential of 23 MUSE database, the cohort that participating in the Lurk 2 study is three times bigger than any other study published and is 23 MUSE It's first paper to utilize longitudinal perspective data collection. I remain extremely encouraged by the potential for our research data business. On the innovation front, we are actively developing a suite of AI models to enhance both our consumer and research data businesses.

Speaker Change: Want to truly thank them for all their hard work and dedication.

Speaker Change: I also want to make it clear that today's news does not impact our ability to pursue collaborations that leverage our database for discovery and other therapeutic insights or the therapeutics development team led by Jennifer low or indicate any change and enthusiasm for our two clinical assets.

Anne Wojcicki: We're still moving forward in the clinic and exploring optimal development and funding paths for these apps. Overall, in Q1, we made meaningful progress on multiple strategically important initiatives. I am encouraged by the positive returns on our investments in improving our membership offerings. I'm very excited about the potential to help customers and improve the profitability and growth of Lemonade, and I am optimistic that our longstanding investments in AI are enabling rapid progression in drug discovery, customer engagement, and operational efficiency. And with that, I'll turn the call over to Joe to review our financial results for the quarter.

Speaker Change: We're still moving both forward in the clinic and exploring optimal development and funding path for these assets.

Anne Wojcicki: We continue to make significant progress in developing new AI models to unlock novel insights about the human genome using our proprietary database. Our research data business recently published a preprint demonstrating how large language models can be leveraged to better interpret genetic association studies, helping to more accurately pinpoint genes linked to a variety of diseases and phenotypes. These initiatives leverage the size and scale of 23andMe's unique database to deliver more effective personalized health recommendations and accelerate therapeutic target discovery.

Speaker Change: Overall in Q1, we made meaningful progress on multiple strategically important initiatives.

Speaker Change: Encouraged by the positive returns on our investments in improving our membership offerings I'm very excited about the potential to help customers and improve the profitability and growth of lemonade and I am optimistic that our long standing investments in AI are enabling rapid progression in drug discovery, because customer engagement and.

Speaker Change: <unk> efficiencies.

Speaker Change: And with that I'll turn the call over to Joe to review, our financial results for the quarter.

Joe Selsavage: Thank you, Anne. I'd like to reiterate Anne's optimism about our recent progress in all areas of the business, and I'm proud of our ability to execute while maintaining cost discipline amid our shift toward a more sustainable operating profile. Revenue for the quarter was $40 million, a 34% decrease over the same period in the prior year. Similar to the last few quarters, the year-over-year decrease in revenue was primarily due to the conclusion of the exclusive discovery term under our GSK collaboration in July 2023, as well as lower consumer services revenue in our PGF kit and telehealth businesses.

Joe: Thank you Ann I'd like to reiterate and optimism about our recent progress in all areas of the business and I am proud of our ability to execute while maintaining cost discipline amid our shift toward a more sustainable operating profile.

Anne Wojcicki: Moving to our therapeutic business, Q1 saw us present data at both AACR in April and ASCO in June. We continue to be pleased with the progress of 23andMe 610 as monotherapy, which continues to demonstrate therapeutic potential for inhibiting CD200R1 in cancer patients. We are also seeing evidence of CD200 emerging as a potential biomarker associated with 23andMe 610 monotherapy efficacy. Further, we are encouraged by the continued safety and tolerability profile of 23andMe 610, which, as presented at AACR earlier this year, points to potential combination strategies with commonly used standard of care agents for added therapeutic benefit in cancer patients.

Joe: Revenue for the quarter was $40 million, 34% decrease over the same period in the prior year.

Joe: Similar to the last few quarters year over year decrease in revenue was primarily due to the conclusion.

Joe: With discovery term under our GSK collaboration in July 2023.

Joe: As well as lower consumer services revenue and our PGS kit and telehealth businesses.

Joe Selsavage: The decrease in consumer revenue was driven by our focus on marketing efficiency and membership sales, both of which have resulted in improved unit economics, margin, and customer lifetime value. We expect that these decisions will continue providing benefits to our gross margins and bottom line over the short and longer term, and are encouraged that the revenue decreases were partially offset by the continued growth in our membership service. Looking at the composition of our revenue, consumer services revenue represented 97% of total revenue for the quarter, and research data revenue, which was primarily derived from other research partners, accounted for approximately 3% of total revenue for the same period. As a reminder, we expect to begin recognizing revenue in the second half of the fiscal year 2025 from the GSK data license announced last October.

Joe: The decrease in consumer revenue was driven by our focus on marketing efficiency and membership sales both of which have resulted in improved unit economics margin and <unk>.

Anne Wojcicki: We plan on sharing additional clinical and biomarker data at upcoming scientific conferences later this year. At AACR, we also have the opportunity to present the genetics and biological rationale for bringing our 23andMe 1473 program into the clinic. As we have previously disclosed, we have initiated our Phase I clinical trial in Solitude Moroncology and we look forward to sharing the results of that study in 2025.

Joe: Customer lifetime value.

Joe: We expect that these decisions will continue providing benefits to our gross margins and bottom line over the short and longer term.

Joe: And are encouraged that the revenue decreases were partially offset by the continued growth in our membership services.

Joe: Looking at the composition of our revenue consumer services revenue represented 97% of total revenue for the quarter and research data revenue.

Joe: Which was primarily derived from other research partners accounted for approximately 3% of total revenue for the same period.

Anne Wojcicki: Finally, I'd like to acknowledge the 8K we put out this afternoon announcing that Bill Richards is stepping down as head of therapeutic discovery in the elimination of our therapeutic discovery group. Our therapeutic discovery team has identified hundreds of new targets leveraging our unique database and they were the original foundation upon which we launched our 23andMe therapeutic organization. I want to truly thank them for all their hard work and dedication. I also want to make it clear that today's news does not impact our ability to pursue collaborations that leverage our database for discovery and other therapeutic insights or the therapeutic development team led by Jennifer Low or indicate any change in enthusiasm for our two clinical assets. We are still moving both forward in the clinic and exploring optimal development and funding paths for these assets.

Joe: As a reminder, we expect to begin recognizing revenue in the second half of the fiscal year 2025 from the GSK data license announced last October.

Joe Selsavage: Our gross profit for the quarter was $21 million, representing a 33% decrease over the same period in the prior year. The decrease was driven primarily by lower research data revenue, but by improvements in membership revenue and telehealth margins, helping to offset the declines from research services margins. Turning to our expenses, total operating expenses for the three months ended June 30, 2024 were $92 million, compared to $141 million for the same period in the prior year.

Joe: Our gross profit for the quarter was $21 million, representing a 33% decrease over the same period in the prior year.

Joe: The decrease was driven primarily by lower research data revenue.

Joe: By improvements in membership revenue and telehealth margins, helping to offset the declines from research services margins.

Joe: Turning to our expenses total operating expenses for the three months ended June 32024 was $92 million compared to $141 million for the same period in the prior year.

Joe Selsavage: A decrease in operating expenses for the quarter was driven by lower personnel-related expenses following workforce reductions in prior quarters and lower therapeutics-related R&D spend due to a significant reduction in GSK collaboration programs. There was also a reduction of $22 million from a non-cash stock-based compensation expense taken in the prior year quarter as a result of the departure of a former Lemonade office.

Joe: The decrease in operating expenses for the quarter, which was driven by lower personnel related expenses following workforce reductions in prior quarters, and lower therapeutics related R&D spending due to a significant reduction in GSK collaboration programs.

Anne Wojcicki: Overall, in Q1, we made meaningful progress on multiple strategically important initiatives. I am encouraged by the positive returns on our investment in improving our membership offering. I'm very excited about the potential to help customers and improve the profitability and growth of lemonade. And I am optimistic that our long-standing investments in AI are enabling rapid progression and drug discovery, because customer engagement and operational efficiency.

Joe: There was also a reduction of $22 million from our noncash stock based compensation expense taken in the prior year quarter as a result of the departure of our former Lemonade officer.

Joe Selsavage: We are pleased with our efforts to more tightly manage our cost base and continue to look at areas to drive efficiencies in our spend in coming quarters. Looking at the bottom line, our net loss for the quarter was $69 million compared to a net loss for the same period in the prior year of $105 million. The improvement in the first quarter net loss was driven mainly by the stock-based compensation expense taken in the prior year and a significant reduction in GSK collaboration programs, as mentioned earlier.

Joe: We are pleased with our efforts to more tightly manage our cost base and continue to drive efficiencies in our spend in coming quarters.

Joe Sal Savage: And with that, I'll turn the call over to Joe to review our financial results for the quarter. Thank you, Anne. I'd like to reiterate Hans optimism about our recent progress in all areas of the business. And I'm proud of our ability to execute while maintaining cost discipline amid our shift toward a more sustainable operating profile.

Joe: Looking at the bottom line net loss for the quarter was $69 million compared to a net loss for the same period in the prior year of $105 million.

Joe: The improvement in the first quarter net loss was driven mainly by the stock based compensation expense taken in the prior year and a significant reduction in GSK collaboration programs as mentioned previously.

Joe Sal Savage: Revenue for the quarter was 40 million, a 34 percent decrease over the same period in the prior year. Similar to the last few quarters, a year over year decrease in revenue was primarily due to the conclusion of the discovery term under RGSK collaboration in July 2023. As well as lower consumer services revenue and our PGS kit and telehealth businesses. The decrease in consumer revenue was driven by our focus on marketing efficiency and membership sales, both of which have resulted in improved unit economic margin and customer lifetime value.

Joe Selsavage: Next, our adjusted EBITDA. For details on how we define adjusted EBITDA, as well as the corresponding reconciliations to GAP, please see our earnings press release. Total adjusted EBITDA deficit for the first quarter was $35 million, compared to a $50 million deficit for the same period in the prior year.

Joe: Next.

Joe: Our adjusted EBITDA.

Joe: For details on how we define adjusted EBITDA as well as the corresponding reconciliations to GAAP. Please see our earnings press release.

Joe: Our adjusted EBITDA deficit for the first quarter was $35 million compared to a $50 million.

Speaker Change: <unk> for the same period in the prior year. Despite the decline in revenue. We are pleased with our ability to drive meaningful adjusted EBITDA leverage through cost discipline and investment prioritization.

Joe Selsavage: Despite the decline in revenue, we are pleased with our ability to drive meaningful adjusted e-vital leverage through cost discipline and investment prioritization. Achieving adjusted EBITDA profitability remains a key companywide goal, and while we are encouraged by our progress, we are also focused on and working diligently to find opportunities to improve margins. We end the quarter with $170 million in cash and cash equivalents, compared to $216 million as of March 31, 20

Joe Sal Savage: We expect that these decisions will continue providing benefits to our gross margins and bottom line over the short and longer term and are encouraged that the revenue decreases were partially offset by the continued growth in our membership services.

Joe: <unk> adjusted EBIT profitability remains a key company wide goal.

Joe: While we are encouraged by our progress. We're also focused on and working diligently to find opportunities to improve margins.

Joe: We ended the quarter with $170 million in cash and cash equivalents compared to $216 million as of March 31 2024.

Joe Sal Savage: Looking at the composition of our revenue, consumer services revenue represented 97 percent of total revenue for the quarter and research state of revenue, which was primarily derived from other research partners, accounted for approximately 3 percent of total revenue for the same period. As a reminder, we expect to begin recognizing revenue in the second half of the fiscal year 2025 from the GSK data license announced last October.

Joe Selsavage: We continue to be judicious with our cash usage and believe the current level of cash supports 23andMe's plans for targeted investment in high ROI growth initiatives. Wrapping up, we are pleased with the progress made in the first quarter. We continue to add value and innovation to our services, are seeing improvements in our membership metrics, and we are better managing our costs. I am incredibly optimistic about the future of the company and our ability to help people access, understand, and benefit from the human genome. With that, let's open it up to questions.

Joe: We continue to be judicious with our cash usage and believe the current level of cash supports 23 <unk> plans for targeted investments in high ROI growth initiatives.

Joe: Wrapping up we are pleased with the progress made in the first quarter, we continue to add value and innovation to our services are seeing improvements in our membership metrics and we're better managing our cost base I'm incredibly optimistic about the future of the company and our ability to help people access understand and benefit from the human gene.

Joe Sal Savage: Our gross profit for the quarter was 21 million, representing a 33 percent decrease over the same period in the prior year. The decrease was driven primarily by lower research data revenue. But the current prime improvement in membership revenue and telehealth margins, helping to offset the declines from research services margins.

Speaker Change: And then.

Speaker Change: With that let's open it up for questions.

Operator: Thank you. Ladies and gentlemen, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To join a question, simply press star 1 1 again. Please stand by while we compile the Q&A roster. And we have a question from the line of David Lebowitz with Citi. Your line is open.

Speaker Change: Thank you, ladies and gentlemen to ask a question you will need to press star one on your telephone and wait plan needs to be announced.

Speaker Change: So with China question simply press Star one again.

Joe Sal Savage: Turning to our expenses, total operating expenses for the three months ended June 30, 2024 was 92 million, compared to 141 million for the same period in the prior year. A decrease in operating expenses for the quarter was driven by lower personnel related expenses, following workforce reductions in prior quarters, and lower therapeutics related R&D spend due to a significant reduction in GSK collaboration programs. There was also a reduction of 22 million from a non cash stock based compensation expense taken in the prior year quarter as a result of the departure of a former lemonade officer. We are pleased with our efforts to more tightly manage our cost base and continue to look at areas to drive efficiencies in our spend incoming quarters.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: And we have a question from the line of David Lebowitz with Citi. Your line is open.

David Lebowitz: Hi guys, John here for David. Thanks for taking our questions. We have got a few on our end.

Joe: Hi, guys John on for David Thanks for taking our questions.

Speaker Change: Got a few on our end.

Speaker Change: So starting with total health in terms of loss of total hall.

Speaker Change: Can you just give us a status update on weather.

Speaker Change: Whether or not this is it.

Joe: Has been launched to existing customers and if not what else needs to be done and when that might be ready to rollout.

Speaker Change: Yes, I can take that one.

Unknown Speaker: So starting with Total Health, in terms of launching Total Health, can you just give us a status update on whether or not this has been launched to existing customers? And if not, what else needs to be done? And when that might be ready to roll out?

Speaker Change: I'll take that one.

Speaker Change: Total health is not rolled out to existing customers yet it is something that is definitely in the works that we are working on.

Unknown Speaker: I'll take that one. Total Health has not rolled out to existing customers yet. It is something that is definitely in the works that we are working on. If you remember when we originally planned to launch Total Health, that overlapped with our cyber incident, so it has been really a soft launch. And it's something that we're thinking about for the fall, about how we relaunch it.

Speaker Change: If you remember when we originally planned to launch total health that overlapped with our cyber incident.

Joe Sal Savage: Looking at the bottom line, net loss for the quarter was 69 million, compared to a net loss for the same period in the prior year of 105 million. The improvement in the first quarter net loss was driven mainly by the stock based compensation expense taken in the prior year. And a significant reduction in GSK collaboration programs, as mentioned previously.

Speaker Change: So it has been really a soft launch and that's something that we're thinking about for the fall about how we relaunch it.

Unknown Speaker: Okay, and at this point, is it more of just an engineering hurdle, as was previously highlighted? Or is there anything else that needs to be done? I mean, there are engineering hurdles. It's just also a question of what we have. We have a number of priorities and a number

Speaker Change: Okay and at this point is it more of just an engineering hurdle as was previously highlighted or is there anything else that needs to be I mean, there is engineering hurdles. It's just also a question of we have we have a number of priorities and the number of launches coming up so isn't about just.

Unknown Speaker: I mean, there are engineering hurdles. It's just also a question of whether we have we have a number of priorities.

Unknown Executive: Leslie.

Unknown Executive: Next, our adjusted EBITDA.

Joe Sal Savage: For details on how we define the adjusted EBITDA, as well as the corresponding reconciliations to debt, please see our earnings press release. So we'll adjust the EBITDA deficit for the first quarter was 35 million. Compared to a 50 million deficit for the same period in the prior year, despite the decline in revenue, we are pleased with our ability to drive meaningful adjusted EBITDA leverage to cross discipline and investment prioritization. Achieving adjusted EBITDA profitability remains a key company wide goal.

Speaker Change: Finding the right priorities and the right time.

Speaker Change: Got it.

Unknown Speaker: Okay, great. And in terms of margin expansion, I know you've also previously highlighted marketing efficiency and membership sales resulting in better unit economics. I was just wondering, is there any space left to continue pushing price at all? Or is that lever sort of maxed out at this point?

Speaker Change: Okay great.

Speaker Change: In terms of margin expansion.

Speaker Change: I know you've also previously headed marketing efficiency and membership sales, resulting in better unit economics. I was just wondering is there any space left to also continue pushing price at all or is that lever sort of maxed out at this point.

Unknown Speaker: I think, you know, we've actually increased the pricing on our subscriptions from $29 to $69 for 23andMe Plus. I mean, we're really pleased with the retention that we've seen and the upgrades and uptake on that subscription product, even with the increased pricing. We've also worked on increasing, you know, the ASP on our kits as well, and we'll continue to look for efficiencies in our marketing spend going forward. I think we see some good opportunities there for margins. And I also want to highlight some of your products, really, they're, you know, extremely high margins for us and will help us improve overall margins in the business.

Speaker Change: I think we have actually increased the pricing on our subscriptions and $29 to $69 for 2020 plus.

Speaker Change: We're really pleased with the retention and that we've seen in the brain.

Joe Sal Savage: And while we are encouraged by our progress, we are also focused on and working diligently to find opportunities to improve margins. We ended the quarter with 170 million in cash and cash equivalents compared to 216 million as of March 31st, 2024. We continue to be judicious with our cash usage and believe the current level of cash supports 23 means plans for target investment and high ROI growth initiatives.

Speaker Change: It's an uptick on that subscription product even with the increased pricing. We've also worked on increasing asps on our kits as well and we'll continue to look for efficiencies in our marketing spend going forward.

Speaker Change: I think we see some good opportunities there and mark good for margins.

Speaker Change: And I also want to highlight.

Speaker Change: Yes, it really is.

Speaker Change: Extremely high margin for us.

Joe Sal Savage: Wrapping up, we are pleased with the progress made in the first quarter. We continue to add value and innovations or services are seeing improvements in our membership metrics and we are better managing our cost base.

Speaker Change: And help us improve overall margins in the business.

Unknown Speaker: Got it. So to the extent that you can say, and I know you don't give official guidance on this, but you know, as you look ahead to the rest of fiscal year 2025, can we get a sense of how much margins can grow year over year? net net, with given all these different variables?

Speaker Change: Got it so to the extent that you can say and I know you don't give official guidance on this but as you look ahead to the rest of fiscal year 2025.

Joe Sal Savage: I am incredibly optimistic about the future of the company and our ability to help people access, understand and benefit from the human genome.

Speaker Change: Can we get a sense of how much.

Speaker Change: Margins can grow year over year.

Speaker Change: Net net with given all these different variables.

Operator: With that, let's open it up to questions.

Unknown Speaker: No, we are not at this time giving any guidance, you know, but I can say that, you know, basically, we did see our margins in this quarter grow year over year by four percentage points in the PGS business. So I think that was significant for us.

Unknown Speaker: Yeah.

Speaker Change: No.

Operator: Thank you. Ladies and gentlemen, as a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Speaker Change: We are at this time, not giving any guidance, but I can say that basically we did see our margins in this quarter grow over year over year up four percentage points in the <unk> business. So I think that was significant for us.

Operator: Do we join a question? Simply press star 11 again. Please stand by while we compile the county roster.

Speaker Change: Got it thanks.

Unknown Speaker: In terms of, you know, you mentioned that the therapeutics discovery group will be winding down; what sort of impact does this have on your go-forward decisions and the strategy for your two internal tasks?

Unknown Attendee: And we have a question from Delano.

Speaker Change: In terms of you mentioned that the therapeutic discovery group will be winding down what sort of impact does this have on your go forward decisions and your strategy for your your.

Unknown Attendee: David, what city on this open?

Unknown Attendee: Hi guys, John on for David. Thanks for taking our questions. Got a few on our end.

Speaker Change: Two internal assets.

Unknown Attendee: So starting with total health.

Speaker Change: I can I can take that one.

Unknown Attendee: In terms of launch of total health, can you just give us a status update on whether or not this has been launched to existing customers and if not, what else needs to be done and when that might be ready to roll out?

Unknown Speaker: doesn't impact it. Those were two pretty different groups.

Speaker Change: It doesn't impact that those were two pretty different groups.

Speaker Change: Our two clinical assets continues to be run by Jennifer Lowe.

Unknown Speaker: We have our two clinical assets that continue to be run by Jennifer Low. And Jennifer is continuing to develop those and, you know, and has a team that is also looking at whether there are other opportunities out there for us to continue to grow our immuno-oncology portfolio, but it is an area we've been pretty committed to saying what we are going to fund. And we're committed to funding these now through phase two and phase one and continuing to look at opportunities for us to fund these programs.

Speaker Change: And Jennifer is continuing to develop those and.

Speaker Change: It has a team that is also looking at are there other opportunities out there.

Unknown Attendee: Yeah, I can take that one. I'll take that one.

Unknown Attendee: Total health is not rolled out to existing customers yet. It is something that is definitely in the works that we are working on. If you remember, when we originally planned to launch total health that overlapped with our cyber incidents, so it has been really a soft launch and it's something that we're thinking about for the fall, about how we relaunch it. Okay. And at this point, is it more of just an engineering hurdle as was previously highlighted or is there anything else that needs to be?

Speaker Change: For us to continue to grow our immuno oncology.

Speaker Change: Portfolio, but it is an area we've been pretty committed to thing what we are going to fund and we're committed to funding. These now through the phase II and the phase one and continuing to look at opportunities for us to fund these programs and.

Unknown Speaker: Unknown Attendee, Poon Mah, Joseph Selsavage, Joseph Arron, Jennifer Low, 23andMe Discovery Team

Speaker Change: And potentially grow it so no other impact from.

Speaker Change: The downsizing of our <unk>.

Unknown Attendee: I mean, there's engineering hurdles. It's just also a we have a number of priorities and a number of launches coming up. So it's about just finding the right priorities in the right time. Got it. Okay, great.

Speaker Change: Discovery team.

Unknown Speaker: Okay, got it. So speaking of those internal assets, on 610, you know, you highlighted the favorable safety and tolerability profile and that that might position it well for potential combination strategies. Given that you've shown a partial response in neuroendocrine tumors at ASCO, what are your thoughts on a potential combination with a tyrosine kinase inhibitor, such as CABO, which is filing an NDA to treat neuro

Speaker Change: Okay got it so speaking of those internal assets on <unk>.

Speaker Change: You've highlighted the favorable safety and tolerability profile on that.

Unknown Attendee: In terms of margin expansion, I know you've also previously highlighted marketing efficiency and membership sales resulting in better unit economics.

Speaker Change: My position it well for potential combination strategies.

Speaker Change: Given that you've shown a partial response of neuroendocrine tumors at <unk> what are your thoughts on a potential combination with a terrace.

Unknown Attendee: I was just wondering, is there any space left to also continue pushing price at all or is that leverage sort of maxed out at this point? I think, you know, we have actually increased the pricing on our subscriptions from $29 to $69 for 23andMe Plus. I mean, we're really pleased with the retention and that we've seen and the upgrades and the uptake on that subscription product even with the increased pricing. We've also worked on increasing, you know, the ASP on our kits as well, and we'll continue to look for efficiencies and our marketing spend going forward. I think we've seen some good opportunities there and market for margins.

Speaker Change: Curious in kinase inhibitors, such as Chicago, which is filing an NDA to treat neuroendocrine tumors.

Speaker Change: Yeah, Jennifer do you want to add.

Unknown Speaker: Yes, that's consistent with the data that we showed preclinically at ACR, and we are actively looking at that. We will also plan on presenting additional data from that study later this year, and I think what you'll see is a theme and a pattern emerging in terms of what's possible for this drug.

Jennifer Lowe: Yes, that's consistent with the data that we've shown pre clinically at ACR and we are actively looking at that.

Speaker Change: We are also planning to on.

Speaker Change: Presenting additional data from that study later this year and I think what Youll see is up.

Speaker Change: Theme at a pattern emerging in terms of what's what's possible for this drug.

Unknown Speaker: And I guess to that point, and this is my last question. I think it was mentioned that the next data readout could be at ESMO. But for that longer-term follow-up data, can you just help frame expectations for that readout, and you know what the benchmark for success would look like at that point?

Speaker Change: And I guess to that point and this is my my last question.

Unknown Attendee: And you also want to highlight an offer on your product. Yes, it's really extremely high margin for us. And we'll help us improve overall margins in the business. Got it.

Speaker Change: I think it was mentioned the next data readout could get as now.

Speaker Change: Hopefully that longer term follow up data can you just help frame expectations for that readout and what the benchmark for success would look like at that point.

Unknown Attendee: So to the extent that you can say, and I know you don't give official guidance on this, but you know, as you look ahead to the rest of fiscal year 2025, can we get a sense of how much margins can grow year by year? Met net with given all these different variables? No, we are at the time not giving any guidance, you know, but I can say that, you know, basically, we did see our margins in this quarter grow over year by year up 4% is points in the PGS business. So I think that was significant for us. Got it.

Unknown Speaker: As you know, information around our upcoming presentations is embargoed, so I can't comment on that, but we do remain optimistic and feel that the data that we presented at ASCO is reflective of the overall program.

Speaker Change: As you know information around our our upcoming presentations. This embargo so I can't comment on that but we do remain optimistic and build out the data that we presented at ESCO.

Unknown Attendee: Thanks.

Speaker Change: Is reflective of the overall program.

Unknown Speaker: Thank you so much for taking time to answer all of my questions.

Speaker Change: Got it. Thank you so much for taking all my questions.

Speaker Change: Thank you.

Unknown Speaker: Now I'll turn it over to Ian for any further questions.

Speaker Change: Now I'll turn it over to Ian for any further questions.

Unknown Attendee: In terms of, you know, you mentioned that the therapeutic discovery group will be winding down.

Ian Cooney: Yeah, thank you. I'll read the top few questions here from our same

Ian Cooney: Yes. Thank you.

Ian Cooney: A few questions here from our same technology and Q&A platform.

Unknown Attendee: What sort of impact does this have on your go forward decisions and your strategy for your, your two internal assets?

Unknown Speaker: our state technologies Q&A platform from investors and shareholders. Question number one for Joe, what are the plans to regain NASDAQ and compliance? And is there still a plan to take the company private? Unknown Speaker

Ian Cooney: Investors and shareholders.

Ian Cooney: Question number one for Joe what are the plans to regained NASDAQ listing compliance.

Unknown Attendee: I can, I can take that one. So it doesn't impact it. Those were two pretty different groups.

Speaker Change: And is there still a plan to take the company private.

Unknown Attendee: We have our two clinical assets continues to be run by Jennifer Lowe and Jennifer is continuing to develop those. And, you know, and has a team that is also looking at are there other opportunities out there for us to continue to grow our immunology portfolio. But it is an area we've been pretty committed to saying what we are going to fund and we're committed to funding these now through the phase two and the phase one and continuing to look at opportunities for us to fund these programs and and essentially grow it. So no other impact from, you know, the downsizing of our discovery team. Okay.

Joe Selsavage: On the first part of the question, you know, we received a 180-day extension from NASDAQ to become compliant with the listing requirements, which expires on November 4th. We've been focusing on improving the overall operating profile of the company through execution and focusing operating momentum to become re-compliant. But in the event that we cannot achieve compliance by November 4th, prior to that, we are seeking shareholder approval for a reverse stock split at our annual meeting of stockholders in late August.

Joe: Okay. The first part of the question. We received 180 day extension from NASDAQ to become compliant with the listing requirements, which expires on November 4th.

Unknown Attendee: Got it.

Speaker Change: We've been focusing on improving the overall operating profile of the company to execution and focusing operating momentum to become re compliant.

Speaker Change: But in the event that we cannot achieve.

Speaker Change: Compliance by the November four and prior to that we are seeking shareholder approval for a reverse stock split at our annual meeting of stockholders in late August and as necessary. We want this to be an option available to the board to ensure that we actually can become compliant with the NASDAQ requirements before November four.

Joe Selsavage: And if necessary, we want this to be an option available to the board to ensure that we actually can become compliant with the NASDAQ requirements before November 4th. On is there still a plan to take the company private? You know, we can't comment at this time on that matter until we have another material update.

Speaker Change: And is there still plan to take the company private we don't cannot comment at this time on that matter until we have another material update.

Unknown Attendee: So speaking of those internal assets on 610, you know, you've highlighted the favorable safety and tolerability profile and that that might position it well for potential combination strategies.

Speaker Change: Alright, Thank you Joe.

Joe Selsavage: Thank you, Joe. One more for you. What is the plan to address the upcoming...

Speaker Change: One more for you what is the plan to address upcoming liquidity challenges.

Jennifer Low: Given that you've shown a partial response to neuroendocrine tumors at ASCO, what are your thoughts on a potential combination with a cherishing Chinese inhibitor such as Cabo, which is filing an NDA to treat neuroendocrine tumors? Jennifer, you want to go? Yeah, that's consistent with the data that we showed preclinically at a CR and we are actively looking at that. We will also plan on presenting additional data from that study later this year. And I think what you'll see is a theme and a pattern emerging in terms of what's possible for this drug.

Joe Selsavage: Upcoming Liquidity Challenges. What are the operational milestones that investors can watch for? And, you know, how should we sort of track that we're executing on our plan?

Speaker Change: What are the operational milestones that investors can watch for.

Speaker Change: And.

Speaker Change: How should we sort of track that we're executing on our plan.

Joe Selsavage: So we're actively discussing the most effective ways to increase our cash runway and intend to continue to drive efficiencies that, you know, we've shown and, you know, our operating results to date. And, you know, we're also looking at how to continue to drive growth in our revenue and, especially, margin. And also, finally, we are discussing potential financing options. As for the milestones, we think that membership growth is extremely important and continue to look for ways to drive growth in our PGS and lemonade businesses as we continue to drive meaningful revenue from our research data businesses.

Speaker Change: So we're actively discussing the most effective ways to increase our cash runway and intend to continue to drive efficiencies that we've shown and our operating results to date and we're also looking at how to continue to drive growth in our revenue and especially margin and also finally are discussing potential financing options.

Speaker Change: As the milestones we think that membership growth is extremely important and continue to look for ways to drive growth in our PGS eliminate businesses.

Unknown Attendee: And I guess to that point, and this is my last question. I think it was mentioned the next data readout could get as no.

Speaker Change: As we continue to drive meaningful revenue also from our research data businesses.

Unknown Speaker: Great, thank you. And this one's for you. Are there plans to engage with pharmaceutical stakeholders?

Speaker Change: Great. Thank you and then some for you are there plans to engage with pharmaceutical stakeholders to facilitate clinical trials or other.

Unknown Attendee: But for that longer term follow-up data, can you just help frame expectations for that readout and what the benchmark for success would look like at that point? As you know, information around our upcoming presentations is in Margo, so I can't comment on that. But we do remain optimistic and feel that the data that we presented at ASCO is reflective of the overall program.

Unknown Speaker: All stakeholders to facilitate clinical trials or other types of businesses in that area.

Speaker Change: I think the businesses in that area.

Unknown Speaker: Yep, great question. Clinical trials are definitely an exciting area to apply genetics and, particularly, the data that 23andMe has. So we definitely look at a couple of options. One is recruiting individuals who have a specific and probably a rare genotype for clinical trials. So that is something that we have done quite a bit, and we know how to do, and we've been executing on. The other area that's quite interesting is using polygenic risk scores to help understand how clinical trials could be or should be designed and what are the right patient populations to be recruiting. So both of those are areas, you know, one recruiting individuals and then second, helping think about what's going on in those areas that are exciting for us to do in particular.

Speaker Change: Great question.

Speaker Change: Clinical trials is definitely an exciting area to apply genetics and particularly at the data that 23 in the house. So we definitely look at a couple of options. One is recruiting individuals who have a specific and probably a rare genotype four clinical trials. So that is something that we have done quite a bit that.

Unknown Attendee: Thank you so much for taking all of my questions. Thank you.

Speaker Change: We know how to do and we've been executing on that.

Speaker Change: The other area that's quite interesting is using polygenic risk scores to help understand how clinical trials could be or should be designed and what are the right patient populations to be recruiting. So both of those are areas. One recruiting individuals and then second helping to think about.

Ian Cooney: Now I'll turn it over to Ian for any further questions. Yeah, thank you.

Ian Cooney: I'll read the top few questions here from our state technology Q&A platform from investors and shareholders.

Unknown Speaker: Unknown Speaker, Unknown Speaker, Unknown Speaker,

Speaker Change: Yes.

Joe Sal Savage: Question number one for Joe, what are the plans to regain that good thing of client, and is there still a plan to become the private? On the first part of the question, you know, we received an 180 day extension from Nasdaq to become compliant with the listing requirements, which expires on November 4th. We've been focusing on improving the overall operating profile of the company to execution and focusing operating momentum to become recompliant.

Speaker Change: <unk>.

Speaker Change: Starting from scratch.

Speaker Change: Pharmaceutical partners.

Speaker Change: And we.

Speaker Change: You broke up there a little bit.

Joe Sal Savage: But in the event that we cannot achieve a compliance by the November 4th, prior to that, we are seeking shareholder approval for a reverse stock split at our annual meeting of stockholders in late August. And if necessary, we want this to be an option available to the board to ensure that we actually can become compliant with the Nasdaq requirements before November 4th.

Speaker Change: Do you hear me now sorry about that.

Speaker Change: Yes.

Unknown Speaker: So I was saying that for pharmaceutical clinical trials, there are really two areas. One is being able to recruit patients with specific genotypes out of our data set. So we are able to identify people who have potentially rare genotypes and recruit them for studies. The second area is to really help partners, pharmaceutical partners, think about who are the right patients to be recruiting for their studies. And what is the right kind of clinical trial design that they should be using; how could they better be using genetics to improve their clinical trial design? So both of those are areas where we have been focused with pharmaceutical partners.

Speaker Change: So I was saying is that for the pharmaceutical clinical trials, there's really the two areas one is being able to recruit patients with specific genotype out of our dataset. So we are able to identify people who have potentially rare genotype and recruit them four studies. The second area is to really help.

Speaker Change: Partners pharmaceutical partners think about who are the right patients to be recruiting for their study and what is the right kind of clinical trial design that they should be how could they better be using genetics to improve their clinical trial design. So both of those are areas, where we have been focused with pharmaceutical partners.

Unknown Speaker: Great, last one. We're given some color on, you know, kind of how

Joe Sal Savage: And is there still plans to take company private? You know, we don't cannot comment, you know, at this time on that matter until we have another material update.

Speaker Change: Okay last one.

Speaker Change: <unk> given some color on kind of our starting to develop AI that can you give some more detail on kind of what the plans would be to.

Unknown Speaker: kind of how we're starting to develop AI. But can you give some more detail on kind of what the plans would be for how we'll deploy AI and how it will impact the business?

Joe Sal Savage: Thank you, Joe.

Joe Sal Savage: One more for you. What is the plan to address upcoming liquidity challenges? What are the operational milestones that investors can watch for and, you know, how should we sort of track that we're executing on our plan?

Speaker Change: How we will deploy AI and how it will impact the business.

Unknown Speaker: Definitely, AI is going to be an exciting part of our future. As a company that was set up to have data, you know, set up to become one of the world's largest healthcare data companies. We are in a great position now to be able to think about how we can actually use all the data that our customers have contributed to really improve our understanding of, you know, basic science and human biology, as well as disease prevention or disease management.

Speaker Change: Definitely AI is going to be an exciting part of our future.

Speaker Change: As a company that was set up to have data.

Speaker Change: Set up to be.

Speaker Change: A one of the world's largest health care data companies.

Joe Sal Savage: So we're actively discussing the most effective ways to increase our cash runway and intend to continue to drive efficiencies that, you know, we've shown in, you know, our operating results to date. And, you know, we're also looking at how to continue to drive growth in our revenues, and especially margin, and also finally are discussing potential financing options.

Speaker Change: We are in a great position now to be able to think about how we can actually use all the data that our customers have contributed four really improving our understanding of basic science and human biology, as well as disease prevention or disease management.

Joe Sal Savage: As the milestones, we think that membership growth is extremely important and continue to look for ways to drive growth in our PGS and lemonade businesses. And as we continue to drive meaningful revenue also from our research data businesses. Great.

Unknown Speaker: And as well as, can we actually use all of our data and AI to be improving the therapeutics discovery process? So we have our first preprint that came out, and we referenced that in the press release and in earnings. There's a lot

Speaker Change: As well as can we actually use all of our data and AI to be improving the therapeutics discovery process. So we have our first pre print that came out and we referenced that in the press release.

Speaker Change: And and earnings.

Anne Wojcicki: Thank you, and this ones for you. Are there plans to engage with pharmaceutical stakeholders to facilitate clinical trials or other types of businesses in that area? That's a great question. Clinical trials is definitely an exciting area to apply genetics, and particularly the data that 23 may have. So we definitely look at a couple options. One is recruiting individuals who have a specific and probably a rare genotype for clinical trials. So that is something that we have done quite a bit that we know how to do and we've been executing on the other area that's quite interesting is using polygenic risk force to help understand how clinical trials could be or should be designed.

Speaker Change: Closing.

Speaker Change: There's a lot of the claims potential for housing data is going to take that one.

Unknown Speaker: Unknown Attendee, Poon Mah, Joseph Selsavage, Joseph Arron, Jennifer Low, 23andMe

Speaker Change: Alright understood.

Speaker Change: Now type.

Speaker Change: <unk> therapeutic developments here.

Anne Wojcicki: And what are the right patient populations to be recruiting. So both of those are areas, you know, one recruiting individuals, and then second helping think about the bottom of the bottom. And we broke up there a little bit. Oh, do you hear me now? Sorry about that. Yeah. So I was saying is that for the pharmaceutical clinical trials, there's really the two areas. One is being able to recruit patients with specific genotypes out of our data set.

Speaker Change: You cut out there at the end of that there are a lot of sense in the last couple of sentences.

Speaker Change: Alright.

Speaker Change: I think that is going to be an exciting time to see how.

Unknown Speaker: The art of AI is going to impact human health, and we are all learning more about disease. It is going to help us understand who we are, the genome, and what it all means, and how we can apply genomics to meaningfully improve the outcomes of clinical trials.

Speaker Change: It's going to impact.

Speaker Change: Learn more about it is it's going to help us understand how we are.

Speaker Change: And actually what it all means and how we can apply genomic go to meaningfully improve outcomes of clinical trials.

Unknown Speaker: improve the outcomes of the whole drug discovery process.

Speaker Change: So as a whole drug discovery process.

Unknown Speaker: We lost you a bit there, but I think we got the gist of it. I think that's all the questions we have from say Technologies Operator.

Speaker Change: We launched here a bit there, but I think we got the gist of it I think thats all the questions. We have from say technologies operator.

Operator: Thank you. And ladies and gentlemen, thanks for joining us. This concludes today's conference call. Thank you all for participating. You may now disconnect. Everyone have a great day. Goodbye. The Poon Mah, Joseph Selsavage, Ian Cooney, Unknown Executive, Unknown Attendee, Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe The Poon Mah, Joseph Selsavage, Ian Cooney, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe, [music] David Lebowitz, Unknown Attendee, Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Unknown, Steve Cote, Ian Cooney, Unknown Executive, Unknown Attendee, Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Thank you for watching!

Speaker Change: Okay.

Speaker Change: Thank you.

Operator: And ladies and gentlemen, thanks for joining us. This concludes today's conference call. Thank you all for participating. You may now disconnect. Everyone have a great day. Goodbye.

Ian Cooney: These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in our press release, which applies to this call. Also, please refer to our SEC filings, which can be found on our website and the SEC's website, for a discussion of numerous factors that may impact our future performance. We also discussed certain non-GAAP measures. Important information on our use of these measures and reconciliation to U.S. GAAP may be found in our earnings release.

Speaker Change: And ladies and gentlemen, thanks for joining US. This concludes today's conference call. Thank you all for participating you may now disconnect.

Speaker Change: Have a great day.

Speaker Change: Goodbye.

Unknown Speaker: [music] Lebowitz, Anne Wojcicki, Ian Cooney, Unknown Executive, Unknown Attendee, Poon Mah, Joseph Selsavage, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe [music] Unknown Speaker 0, Thanks for watching, and don't forget to like, share, and subscribe to our channel. [music] Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Unknown Attendee, Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Unknown Attendee, [inaudible] [music] Hello, and welcome to 23andMe's Fiscal Year 2025 First Quarter Financial Results Conference Call.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Anne Wojcicki: So we are able to identify people who have potentially rare genotypes and recruit them for studies. The second area is to really help partners pharmaceutical partners think about who are the right patients to be recruiting for their study. And what is the right kind of clinical trial design that they should be how could they better be using genetics to improve their clinical trial design. So both of those are areas where we have been focused with pharmaceutical partners.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Anne Wojcicki: Okay, last one. We're given some color on, you know, kind of how we're starting to develop AI.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Hum.

Speaker Change: Yes.

Speaker Change: [music].

Unknown Speaker: As a reminder, this call is being recorded. At this time, all participants are on listen-only mode. After the speaker's prepared remarks, there will be a question and answer session. I would now like to turn the call over to Ian Cooney, Senior Director of Investor Relations at 23andMe, to lead off the call. Thank you.

Speaker Change: Okay.

Speaker Change: [music].

Anne Wojcicki: But can you give some more detail on kind of what the plans would be to help how we'll deploy AI and how we'll attack the business? Definitely AI is going to be an exciting part of our future as a company that was set up to have data, you know, set up to become a one of the world's largest healthcare data companies. We are in a great position now to be able to think about how we can actually use all the data that our customers have contributed for really improving our understanding of, you know, basic science and human biology as well as disease prevention or disease management.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: <unk>.

Speaker Change: Yes.

Anne Wojcicki: And as well as can we actually use all of our data and AI to be improving the therapeutics discovery process. So we have our first preprints that came out. We referenced that in the press release and in the in earnings. I think there's a lot of essential potential for how the data is going to be able to make sure that human health are understood in between all of the intact therapeutics development sector.

Anne Wojcicki: You cut out there at the end of that answer. Oh, sorry. I just think that it's going to be an exciting time to see how AI is going to impact our health. We're going to have more of a disease to help us understand how we are going to know and actually what it all means and how we can apply genomic to meaningfully improve the outcomes of clinical trials.

Speaker Change: [music].

Ian Cooney: Joining us on our call today are Anne Wojcicki, our chief executive officer and co founder, and Joe Selsavage, our chief financial and accounting officer. Jennifer Low, our Head of Therapeutics Development, will join us for Q&A. I'd now like to turn the call over to Joe.

Joe Selsavage: Thank you, Ian. Hello, everyone.

Joe Selsavage: Reiterating what we said on our last call, the focus of the call is on the first quarter fiscal 2025 results. We will not comment on the ongoing process of reviewing potential takeover private proposals or strategic alternatives. This call is focused solely on the company and its earnings release, and we will not be addressing or responding to any questions regarding the aforementioned matters on this call. I'd now like to turn the call over to Anne.

Speaker Change: [music].

Ian Cooney: Thank you. Before we begin, I encourage everyone to go to investors.23andme.com to find the press release we issued earlier today reporting our financial results for the first quarter of fiscal 2025. A replay of today's webcast will also be available on our website. Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods, are forward-looking statements.

Speaker Change: [music].

Anne Wojcicki: Hello everyone, the first quarter saw us achieve significant progress on our key objective of becoming a sustainably growing, profitable company while remaining committed to our vision of improving the health of millions of people worldwide. We remain focused on adding value to and prioritizing memberships in our PGS site, driving growth in telehealth, and leveraging our data assets to create a thriving, profitable research data business. Over the past quarter, we also presented data at two major oncology conferences, the American Association for Cancer Research and the American Society of Clinical Oncology, highlighting the continued progress of our clinical stage therapeutics assets. Starting with the consumer business.

Speaker Change: Hello, and welcome to 23 and me stick School year 2025 first quarter financial results Conference call. As a reminder, this call is being recorded at this time all participants on listen only mode.

Speaker Change: After the Speakers' prepared remarks, there'll be a question and answer session.

Anne Wojcicki: Today we are excited to announce we have launched a large-scale research study to help identify the genetic mechanism that may drive the efficacy and potential side effects of GLP-1. Through our unique research model, we believe we can quickly scale the study through our outreach to the millions of 23andMe customers who have consented to participate in research. In conjunction with this research, we are planning to launch a GLP-1 weight loss telehealth membership on the Lemonade Health platform at the end of this month. This will enable members to be prescribed and receive brand name or compounded semiglutide medication.

Ian <unk>: I'd now like to turn the call over to Ian <unk> Senior director of Investor Relations at 23, and me to lead off the call. Thank you. Please go ahead.

Anne Wojcicki: The addition of weight loss management for our customers fits directly within our strategy of delivering services to improve an individual's health through preventive action. We also continue to add features to our membership services as we focus on creating lasting value that can help our members remain focused on improving their health. This quarter, we added another polygenic risk score report for bipolar disorder, bringing our market-leading total available PRS reports to over 30.

Speaker Change: Thank you.

Speaker Change: Before we begin I encourage everyone to go to investors dot twenty-three in the dot com to find the press release, we issued earlier today reporting our financial results for the first quarter of fiscal 2025.

Speaker Change: A replay of today's webcast will also be available on our website.

Speaker Change: Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods are forward looking statements.

Speaker Change: These statements are based solely on information that is now available to us.

Speaker Change: We encourage you to review the section entitled forward looking statements in our press release, which applies to this call.

Speaker Change: Also please refer to our SEC filings, which can be found on our website and the Sec's website for a discussion of numerous factors that may impact our future performance.

Speaker Change: We also discuss certain non-GAAP measures important information on our use of these measures and reconciliation to U S. GAAP may be found in our earnings release.

Anne Wojcicki: And we have more planned rollouts in the near future. We continue to build out our total health offering with the addition of a proprietary biological age feature to help members monitor how their body is aging physiologically over time. We also recently announced a collaboration with Nightingale Health to pilot a metabolomics blood biomarker panel with a cohort of our 23andMe plus members. We believe this collaboration, if successful, can help customers access, track, and optimize their health with a new generation of biomarker products.

Speaker Change: Joining us on our call today are.

Speaker Change: And what <unk>, our Chief Executive Officer, and co founder and just sell Savage, our chief financial and Accounting Officer, Jennifer Lowe, our head of Therapeutics development will join us for Q&A.

Speaker Change: I'd now like to turn the call over to Joe.

Anne Wojcicki: I'm happy to report that this continued focus on improving the value of our membership offerings is paying off. This quarter, we saw meaningfully improved membership revenue growth from the previous year. We also saw better member retention metrics, higher upgrade rates, and increased LTV in telehealth, all of which we believe should persist.

Joe: Thank you Ian and Hello, everyone.

Speaker Change: Reiterating what we said on our last call. The focus of the call is on the first quarter fiscal 2025 results.

Speaker Change: We'll not comment on the ongoing process of reviewing potential take private proposals or strategic alternatives.

Unknown Attendee: Sorry, I have to hold right to every process.

Speaker Change: This call is focused solely on the company and its earnings release, and we will not be addressing are responding to any questions regarding the aforementioned matters on this call.

Speaker Change: I would now like to turn the call over to Ann.

Ann: Thank you Joe.

Anne Wojcicki: Our membership offerings are the most effective way for us to help our customers change their health trajectories over time, while also enabling a scalable, sustainable business model. So we are encouraged by these tangible signs of progress. Moving to the research data business

Ann: Hello, everyone. The first quarter saw us achieve significant progress on our key objective of becoming a sustainably growing profitable company, while remaining committed to our vision of improving the health of millions of people worldwide.

Speaker Change: We remain focused on adding value to and prioritizing membership in our Pts segment.

Speaker Change: Driving growth in telehealth, and leveraging our data assets to create a thriving profitable research data business.

Speaker Change: Over the past quarter. We also presented data at two major oncology conferences. The American Association for cancer Research and the American Society of clinical oncology, highlighting the continued progress of our clinical stage therapeutic assets.

Operator: I think that's all the questions we have from the technology operator. Thank you.

Operator: Ladies and gentlemen, thanks for joining us.

Operator: This concludes today's conference call. Thank you all for participating. You may not disconnect.

Speaker Change: Starting with the consumer business today, we are excited to announce we launched a large scale research study to help identify the genetic mechanism that may drive the efficacy and potential side effects of G. L. P widened.

Operator: Everyone have a great day.

Operator: Good bye. Thank you. David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian Cooney,[inaudible] Anne Wojcicki, Ian Cooney, Anne Wojcicki, Ian Cooney, Anne Wojcicki, Ian Cooney, David Lebowitz, Anne Wojcicki, Ian Cooney, David Lebowitz,[inaudible] Anne Wojcicki,[inaudible] . .

You Hello, and welcome to 22andMe's Fixed School Year, 2025, first quarter financial results conference call. As a reminder, this call is being recorded at this time of participants on listen only mode. After the speakers prepared remarks, there will be a question and answer session. I would not like to turn the call over to Ian Cooney, Senior Director of Investulations at 23andMe to meet up the call. Thank you, please go ahead. Thank you.

Speaker Change: Through our unique research model. We believe we can quickly scale. This study through our outreach to the millions of 23, new customers, who have consented to participate in research.

Before we begin, I encourage everyone to go to investors.23andMe.com to find the press release we issued earlier today reporting our financial results for the first quarter of fiscal 2025. A replay of today's webcast will also be available on our website. Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is now available to us.

Speaker Change: In conjunction with this research we are planning to launch a G. L. P. One weight loss telehealth membership on the eliminated health platform at the end of this month.

Speaker Change: This will enable members to be prescribed and receive brand name or compounded semi blue tide medications.

Speaker Change: The addition of weight loss management for our customers fits directly within our strategy of delivering services to approve an individual's health through preventive actions.

We encourage you to review the section entitled forward-looking statements in our press release, which applies to this call. Also, please refer to our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. We also discuss certain non-GAP measures, important information on our use of these measures and reconciliation to USGAP may be found in our earnings release. Joining us on our call today are Anne Wajiski, our chief executive officer and co-founder, and Joe Sal Savage, our chief financial and accounting officer.

Speaker Change: We also continue to add features to our membership services as we focus on creating longitudinal value that can help our members remained focused on improving their health.

Speaker Change: This quarter, we added another polygenic risk score report for bipolar disorder, bringing our market, leading total available Prs reports to over 30.

Speaker Change: And we have more planned rollouts in the near future.

Speaker Change: We continue to build out our total health offering with the addition of a proprietary biological age feature to help members monitor how their body is aging physiologically overtime.

Jennifer Low, our head of therapeutic development, will join us for Q&A. I'd now like to turn the call over to Joe. Thank you, Ian. Hello, everyone. Reiterating what we said on our last call, the focus of the call is on the first quarter fiscal 2025 results. We will not comment on the ongoing process of reviewing potential take-private proposals or strategic alternatives. This call is focused solely on the company and its earnings release and we will not be addressing or responding to any questions regarding the aforementioned matters on this call.

Speaker Change: We also recently announced a collaboration with Nightingale help to pilot a metabolomics blood biomarker panel with a cohort of our 23 million plus members.

Speaker Change: We believe this collaboration if successful can help.

Speaker Change: Customers access track and optimize their health with a new generation of biomarker product.

Speaker Change: I am happy to report that this continued focus on improving the value of our membership offerings is paying off.

Speaker Change: This quarter, we saw meaningfully improved membership revenue growth from the previous year.

Speaker Change: We also saw better member retention metrics higher upgrade rates and increased LTV and telehealth all.

I'd now like to turn the call over to Anne. Thank you, Joe. Hello everyone. The first quarter saw us achieve significant progress on our key objective of becoming a sustainably growing possible company while remaining committed to our vision of improving the health of millions of people worldwide. We remain focused on adding value to and prioritizing membership in our PGS segment, driving growth and telehealth and leveraging our data assets to create a thriving, profitable research data business.

Speaker Change: All of which we believe should persist.

Speaker Change: Our membership offerings are the most effective way for us to help our customers change their help trajectory over time, while also enabling a scalable and sustainable business model. So we are encouraged by these tangible signs of progress.

Anne Wojcicki: Last month, we collaborated with over 20 lung cancer advocacy organizations to launch a study that aims to advance genetic research in lung cancer. The study aims to build a comprehensive open source database of heritable genetics and patient-reported data on lung cancer. Through this research, we collectively hope to better understand the genetics of people with lung cancer in order to improve detection, risk reduction, and care.

Speaker Change: Moving to the research data business last month, we collaborated with over 20 lung cancer advocacy organization to launch a study that aims to advance genetic research in lung cancer.

Over the past quarter, we also presented data at two major oncology conferences, the American Association for Cancer Research and the American Society of Clinical Oncology, highlighting the continued progress of our clinical stage therapeutic assets. Starting with the consumer business, today we are excited to announce we launched a large scale research study to help identify the genetic mechanism that may drive the efficacy and potential side effects of GLP ones. Through our unique research model, we believe we can quickly scale the study through our outreach to the millions of 23 me customers who have consented to participate in research.

Speaker Change: The study aims to build a comprehensive open source database of heritable genetics and the patient reported data in lung cancer.

Speaker Change: Through this research, we collectively hope to better understand the generics of people with lung cancer in order to improve detection risk reduction and care.

Anne Wojcicki: This quarter, we also announced the publication of research findings on the LRRK2 gene in Parkinson's disease in the journal Brain. Highlighting the power and potential of 23andMe's database, the cohort that participated in the LRK2 study is three times bigger than any other study published, and is 23andMe's first paper to utilize longitudinal perspective data collection. I remain extremely encouraged by the potential for our research data. On the innovation front, we are actively developing a suite of AI models to enhance both our consumer and research data businesses.

Speaker Change: This quarter, we also announced the publication of research findings on the alert to gene in Parkinson's disease, and the journal brain Hi.

Speaker Change: Highlighting the power and potential of <unk> 23 in these database the cohort that participated and alert to study is three times bigger than any other pulp study published and is 23 <unk> first paper to utilize longitudinal prospective data collection.

In conjunction with this research, we are planning to launch a GLP one weight loss telehealth membership on the lemonade health platform at the end of this month. This will enable members to be prescribed and receive brand name or compounded semi-glutite medications. The addition of weight loss management for our customers fits directly within our strategy of delivering services to improve and individual health through preventive actions. We also continue to add features to our membership services as we focus on creating longitudinal value that can help our members remain focused on improving their health.

Speaker Change: I remain extremely encouraged by the potential for our research data business.

Speaker Change: On the innovation front, we are actively developing a suite of AI model to enhance both our consumer and research data businesses.

Anne Wojcicki: We continue to make significant progress in developing new AI models to unlock novel insights about the human genome using our proprietary database. For example, our research data business recently published a preprint demonstrating how large language models can be leveraged to better interpret genetic association studies, helping to more accurately pinpoint genes linked to a variety of diseases and phenotypes.

Speaker Change: We continue to make significant progress in developing new AI models to unlocking novel insights about the human genome using our proprietary database.

Speaker Change: Our research data business recently published a preprint demonstrating how large language model can be leveraged to better interpret genetic association studies, helping to more accurately pinpoint genes linked to a variety of diseases and phenotype.

This quarter, we added another polygenic risk or report for bipolar disorder, bringing our market leading total available PRS reports to over 30 and we have more plans will allow us in the near future. We continue to build out our total health offering with the addition of a proprietary biological age feature to help members monitor how their body is aging physiologically over time. We also recently announced a collaboration with Nightingale Health to pilot a metabolomics blood biomarker panel with a cohort of our 23 me plus members.

Anne Wojcicki: These initiatives leverage the size and scale of 23andMe's unique database to deliver more effective personalized health recommendations and accelerate therapeutic target discovery. Moving to our therapeutics business, Q1SAWS presents data at both AACR in April and ASCO in June.

Speaker Change: These initiatives leverage the size and scale of <unk> 23, and me as unique database to deliver more effective personalized health recommendations and accelerate therapeutic target discovery.

Speaker Change: Moving to our therapeutics business Q1 saw us present data at both ACR in April and <unk> in June.

Anne Wojcicki: We continue to be pleased with the progress of 23andMe 610 as monotherapy, which continues to demonstrate therapeutic potential for inhibiting CD200R1 in cancer patients. We are also seeing evidence of CB200 emerging as a potential biomarker associated with 23andMe 610 monotherapy efficacy. In addition, we are encouraged by the continued safety and tolerability profile of 23andMe 610, which, as presented at AACR earlier this year, points to potential combination strategies with commonly used standard of care agents for added therapeutic benefit in cancer patients.

Speaker Change: We continue to be pleased with the progress of 23, <unk> 610, as mono therapy, which continues to demonstrate therapeutic potential for inhibiting CV 200, or one in cancer patients.

We believe this collaboration if successful can help customers access track and optimize their health with a new generation of biomarker products. I'm happy to report that this continued focus on improving the value of our membership offerings is paying off. This quarter, we saw meaningfully improved membership revenue growth from the previous year. We also saw better member retention metrics higher upgrade rates and increased LTV in telehealth all of which we believe should persist.

Speaker Change: We are also seeing evidence of CD 200, emerging as a potential biomarker associated with 23 and me 610 monotherapy efficacy.

Speaker Change: Further we are encouraged by the continued safety and Tolerability profile of 23, <unk>, which as presented at ACR earlier this year points to potential combination strategies with commonly used standard of care agents for added therapeutic benefit in cancer patients.

Anne Wojcicki: We plan on sharing additional clinical and biomarker data at upcoming scientific conferences later this year. At AACR, we also have the opportunity to present the genetic and biological rationale for bringing our 23andMe 1473 program into the clinic. As we had previously disclosed, we have initiated our phase one clinical trial in solid tumor oncology, and we look forward to sharing the results of that study in 2025. Finally, I'd like to acknowledge the 8K we put out this afternoon, announcing that Bill Richards is stepping down as head of Therapeutics Discovery and the elimination of our Therapeutics Discovery group.

Our membership offerings are the most effective way for us to help our customers change their health trajectories over time will also enabling a scalable sustainable business model. So we are encouraged by these tangible signs of progress. Moving to the research data business, last month we collaborated with over 20 lung cancer advocacy organizations to launch a study that aims to advance genetic research in lung cancer. The study aims to build a comprehensive open source database of heritable genetics and the patient reported data in lung cancer.

Speaker Change: We plan on sharing additional clinical and biomarker data at upcoming scientific conferences later this year.

Speaker Change: At ACR, we also have the opportunity to present, the genetics and biological rationale for bringing our twenty-three Amy $14 73 program into the clinic.

Speaker Change: As we have previously disclosed we have initiated our phase one clinical trial in solid tumor oncology and we look forward to sharing the results of that study in 2025.

Speaker Change: Finally, I'd like to acknowledge the 8-K, we put out this afternoon announcing that bill Richard is stepping down as head of Therapeutics discovery and the elimination of our Therapeutics Discovery group.

Through this research, we collectively hope to better understand the genetics of people with lung cancer in order to improve detection, risk reduction, and care. This quarter, we also announced the publication of research findings on the Lurk2 gene in Parkinson's disease in the journal Brain. Highlighting the power and potential of 23andMe's database, the cohort that participating in the Lurk2 study is three times bigger than any other study published and is 23andMe's first paper to utilize longitudinal perspective data collection.

Anne Wojcicki: Our Therapeutics Discovery Team has identified hundreds of new targets leveraging our unique database, and they were the original foundation upon which we launched our 23andMe Therapeutics organization. I want to truly thank them for all their hard work and dedication. I also want to make it clear that today's news does not impact our ability to pursue collaborations that leverage our database for discovery and other therapeutic insights or the therapeutics development team led by Jennifer Low, or indicate any change in enthusiasm for our two clinical assets.

Speaker Change: Our therapeutics discovery team has identified hundreds of new targets leveraging our unique database and they were the original foundation upon which we launched our 23 in the Therapeutics organization.

Speaker Change: Want to truly thank them for all their hard work and dedication.

Speaker Change: I also want to make it clear that today's news does not impact our ability to pursue collaborations that leverage our database for discovery and other therapeutic insights or death.

I remain extremely encouraged by the potential for our research data business. On the innovation front, we are actively developing a suite of AI models to enhance both our consumer and research data businesses. We continue to make significant progress in developing new AI models to unlock novel insights about the human genome using our proprietary database. Our research data business recently published a preprint demonstrating how large language models can be leveraged to better interpret genetic association studies, helping to more accurately pinpoint genes linked to a variety of diseases and phenotypes.

Speaker Change: <unk> Therapeutics development team led by Jennifer Lowe.

Speaker Change: Or indicate any change and enthusiasm for our two clinical assets.

Anne Wojcicki: We're still moving forward in the clinic and exploring optimal development and funding paths for these apps. Overall, in Q1, we made meaningful progress on multiple strategically important initiatives. I am encouraged by the positive returns on our investments in improving our membership offerings. I'm very excited about the potential to help customers and improve the profitability and growth of Lemonade, and I am optimistic that our longstanding investments in AI are enabling rapid progression in drug discovery, customer engagement, and operational efficiency. And with that, I'll turn the call over to Joe to review our financial results for the quarter.

Speaker Change: We're still moving both forward in the clinic and exploring optimal development and funding path for these assets.

Speaker Change: Overall in Q1, we made meaningful progress on multiple strategically important initiatives.

Speaker Change: Encouraged by the positive returns on our investments in improving our membership offering I'm very excited about the potential to help customers and improve the profitability and growth of lemonade and I am optimistic that our long standing investments in AI are enabling rapid progression in drug discovery, because customer engagement and <unk>.

These initiatives leverage the size and scale of 23andMe's unique database to deliver more effective personalized health recommendations and accelerate therapeutic targets discovery. Moving to our therapeutic business, Q1 saw us present data at both AACR in April and ASCO in June. We continue to be pleased with the progress of 23andMe's 610 as monotherapy, which continues to demonstrate therapeutic potential for inhibiting CD200R1 in cancer patients. We are also seeing evidence of CD200 emerging as a potential biomarker associated with 23andMe's 610 monotherapy efficacy.

Speaker Change: Operational efficiencies.

Speaker Change: And with that I'll turn the call over to Joe to review, our financial results for the quarter.

Joe Selsavage: Thank you, Anne. I'd like to reiterate Anne's optimism about our recent progress in all areas of the business, and I'm proud of our ability to execute while maintaining cost discipline amid our shift toward a more sustainable operating profile. Revenue for the quarter was $40 million, a 34% decrease over the same period in the prior year. Similar to the last few quarters, the year-over-year decrease in revenue was primarily due to the conclusion of the exclusive discovery term under our GSK collaboration in July 2023, as well as lower consumer services revenue in our PGF kit and telehealth businesses.

Joe: Thank you Ann I'd like to reiterate and optimism about our recent progress in all areas of the business and I am proud of our ability to execute while maintaining cost discipline amid our shift toward a more sustainable operating profile.

Joe: Revenue for the quarter was 40 million, 34% decrease over the same period in the prior year.

Speaker Change: Similar to the last few quarters the year over year decrease in revenue was primarily due to the conclusion of the disc.

Speaker Change: Discovery term under our GSK collaboration in July 2023 as.

Further, we are encouraged by the continued safety and tolerability profile of 23andMe's 610, which as presented at AACR earlier this year, points to potential combination strategies with commonly used standard of care agents for added therapeutic benefit in cancer patients. We plan on sharing additional clinical and biomarker data at upcoming scientific conferences later this year. At AACR, we also have the opportunity to present the genetics and biological rationale for bringing our 23andMe 1473 program into the clinic.

Speaker Change: As well as lower consumer services revenue and our PGS and telehealth businesses.

Joe Selsavage: The decrease in consumer revenue was driven by our focus on marketing efficiency and membership sales, both of which have resulted in improved unit economics, margin, and customer lifetime value. We expect that these decisions will continue providing benefits to our gross margins and bottom line over the short and longer term, and are encouraged that the revenue decreases were partially offset by the continued growth in our membership service. Looking at the composition of our revenue, consumer services revenue represented 97% of total revenue for the quarter, and research data revenue, which was primarily derived from other research partners, accounted for approximately 3% of total revenue for the same period. As a reminder, we expect to begin recognizing revenue in the second half of the fiscal year 2025 from the GSK data license announced last October.

Speaker Change: The decrease in consumer revenue was driven by our focus on marketing efficiency and membership sales.

Speaker Change: Of which have resulted in improved unit economics margin and customer lifetime value.

Speaker Change: We expect that these decisions will continue providing benefits to our gross margins and bottom line over the short and longer term.

Speaker Change: And are encouraged that the revenue decreases were partially offset by the continued growth in our membership services.

Speaker Change: Looking at the composition of our revenue consumer services revenue represented.

As we have previously disclosed, we have initiated our Phase I clinical trial in Solitude Moroncology, and we look forward to sharing the results of that study in 2025. Finally, I'd like to acknowledge the 8K we put out this afternoon announcing that Bill Richards is stepping down as head of therapeutic discovery and the elimination of our therapeutic discovery group. Our Therapeutics Discovery team has identified hundreds of new targets leveraging our unique database and they were the original foundation upon which we launched our 23andMe Therapeutics organization.

Speaker Change: 97% of total revenue for the quarter and research data revenue, which was primarily derived from other research partners accounted for approximately 3% of total revenue for the same period.

Speaker Change: As a reminder, we expect to begin recognizing revenue in the second half of the fiscal year 2025 from the GSK data license announced last October.

Joe Selsavage: Our gross profit for the quarter was $21 million, representing a 33% decrease over the same period in the prior year. The decrease was driven primarily by lower research data revenue, but by improvements in membership revenue and telehealth margins, helping to offset the declines from research services margins. Turning to our expenses, total operating expenses for the three months ended June 30, 2024 were $92 million, compared to $141 million for the same period in the prior year.

Speaker Change: Our gross profit for the quarter was $21 million, representing a 33% decrease over the same period in the prior year.

I want to truly thank them for all their hard work and dedication. I also want to make it clear that today's news does not impact our ability to pursue collaborations that leverage our database for discovery and other therapeutic insights. Or the Therapeutics development team led by Jennifer Low, or indicate any change in enthusiasm for our two clinical assets. We are still moving both forward in the clinic and exploring optimal development and funding paths for these assets.

Speaker Change: The decrease was driven primarily by lower research data revenue.

Speaker Change: Quarter inch by improvement in membership revenue and telehealth margins, helping to offset the declines from research services margins.

Speaker Change: Turning to our expenses total operating expenses for the three months ended June 32024 was $92 million compared to 141 million for the same period in the prior year.

Joe Selsavage: A decrease in operating expenses for the quarter was driven by lower personnel-related expenses following workforce reductions in prior quarters and lower therapeutics-related R&D spend due to a significant reduction in GSK collaboration programs. There was also a reduction of $22 million from a non-cash stock-based compensation expense taken in the prior year quarter as a result of the departure of a former Lemonade office.

Speaker Change: The decrease in operating expenses for the quarter, which was driven by lower personnel related expenses following workforce reductions in prior quarters, and lower therapeutics related R&D spending due to a significant reduction in GSK collaboration programs.

Overall, in Q1, we made meaningful progress on multiple strategically important initiatives. I am encouraged by the positive returns on our investment in improving our membership offering. I'm very excited about the potential to help customers and improve the profitability and growth of lemonade. And I am optimistic that our longstanding investments in AI are enabling rapid progression and drug discovery, customer engagement and operational efficiencies. And with that, I'll turn the call over to Joe to review our financial results for the quarter.

Speaker Change: There was also a reduction of $22 million from our noncash stock based compensation expense taken in the prior year quarter as a result of the departure of our former Lemonade officer.

Joe Selsavage: We are pleased with our efforts to more tightly manage our cost base and continue to look at areas to drive efficiencies in our spend in coming quarters. Looking at the bottom line, our net loss for the quarter was $69 million compared to a net loss for the same period in the prior year of $105 million. The improvement in the first quarter net loss was driven mainly by the stock-based compensation expense taken in the prior year and a significant reduction in GSK collaboration programs, as mentioned previously.

Speaker Change: We are pleased with our efforts to more tightly manage our cost base and continue.

Speaker Change: To drive efficiencies in our spend in coming quarters.

Thank you, Anne. I'd like to reiterate hands optimism about our recent progress in all areas of the business. And I am proud of our ability to execute while maintaining cost discipline amid our shift toward a more sustainable operating profile. Revenue for the quarter was 40 million, a 34 percent decrease over the same period in the prior year. Similar to the last few quarters, a year over year decrease in revenue was primarily due to the conclusion of the discovery term under RGSK collaboration in July 2023.

Speaker Change: Looking at the bottom line net loss for the quarter was $69 million compared to a net loss for the same period in the prior year of $105 million.

Speaker Change: The improvement in the first quarter net loss was driven mainly by the stock based compensation expense taken in the prior year and a significant reduction in GSK collaboration programs as mentioned previously.

Joe Selsavage: Next, our adjusted EBITDA. For details on how we define adjusted EBITDA, as well as the corresponding reconciliations to GAP, please see our earnings press release. Trouble adjusted EBITDA deficit for the first quarter was $35 million, compared to a $50 million deficit for the same period in the prior year.

Speaker Change: Net.

Speaker Change: Our adjusted EBITDA.

Speaker Change: For details on how we define adjusted EBITDA as well as the corresponding reconciliations to GAAP. Please see our earnings press release.

As well as lower consumer services revenue in our PGS kit and telehealth businesses. The decrease in consumer revenue was driven by our focus on marketing efficiency and membership sales, both of which have resulted in improved unit economic margin and customer lifetime value. We expect that these decisions will continue providing benefits to our gross margins and bottom line over the short and longer term and are encouraged that the revenue decreases were partially offset by the continued growth in our membership services.

Speaker Change: Our adjusted EBITDA deficit for the first quarter was $35 million.

Speaker Change: <unk> to $50 million.

Joe Selsavage: Despite the decline in revenue, we are pleased with our ability to drive meaningful, adjusted, and even leveraged cost discipline and investment prioritization. Achieving adjusted EBITDA profitability remains a key companywide goal, and while we are encouraged by our progress, we are also focused on and working diligently to find opportunities to improve margins. We ended the quarter with $170 million in cash and cash equivalents, compared to $216 million as of March 31, 2024.

Speaker Change: Deficit for the same period in the prior year. Despite the decline in revenue. We are pleased with our ability to drive meaningful adjusted EBITDA leverage through cost discipline and investment prioritization.

Speaker Change: <unk> adjusted EBIT profitability remains a key company wide goal and while we are encouraged by our progress. We're also focused on and working diligently to find opportunities to improve margins.

Speaker Change: We ended the quarter with $170 million in cash and cash equivalents compared to $216 million as of March 31 2024.

Looking at the composition of our revenue, consumer services revenue represented 97 percent of total revenue for the quarter and research data revenue, which was primarily derived from other research partners, accounted for approximately 3 percent of total revenue for the same period. As a reminder, we expect to begin recognizing revenue in the second half of the fiscal year 2025 from the GSK data license announced last October. Our gross profits of the quarter was 21 million, representing a 33 percent decrease over the same period in the prior year.

Joe Selsavage: We continue to be judicious with our cash usage and believe the current level of cash supports 23andMe's plans for targeted investment in high ROI growth initiatives. Wrapping up, we are pleased with the progress made in the first quarter. We continue to add value and innovation to our services, are seeing improvements in our membership metrics, and we are better managing our costs. I am incredibly optimistic about the future of the company and our ability to help people access, understand, and benefit from the human genome. With that, let's open it up to questions.

Speaker Change: We continue to be judicious with our cash usage and believe the current level of cash supports 23 meters plans for targeted investments in high ROI growth initiatives.

Speaker Change: Wrapping up we are pleased with the progress made in the first quarter, we continue to add value and innovation to our services are seeing improvements in our membership metrics and we're better managing our cost base.

Speaker Change: Incredibly optimistic about the future of the company and our ability to help people access understand and benefit from the human genome.

The decrease was driven primarily by lower research data revenue. [inaudible] John Turning to our expenses, total operating expenses for the three months and at June 30, 2024 was 92 million, compared to 141 million for the same period in the past year. A decrease in operating expenses for the quarter was driven by lower personnel related expenses, following workforce reductions in product quarters, and lower therapeutics related to R&D spend due to a significant reduction in GSK collaboration programs.

Speaker Change: With that let's open it up for questions.

Operator: Thank you. Ladies and gentlemen, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again. Please stand by while we compile the Q&A list. And we have a question from the line of David Lebowitz with Citi. Your line is open.

Speaker Change: Thank you, ladies and gentlemen to ask a question you will need to press star one on your telephone and wait planned name to be announced.

Speaker Change: To withdraw your question simply press Star one again.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: And we have a question from the line of David Lebowitz with Citi. Your line is open.

David Lebowitz: Hi guys, John Arthur, David, thanks for taking our questions. We've got a few on our end.

There was also a reduction of 22 million from a non-cash stock-based compensation expense taken in the prior year quarter as a result of the departure of a former lemonade officer. We are pleased with our efforts to more tightly manage our cost base and continue to look at areas to drive efficiencies in our spend incoming quarters. Looking at the bottom line, net loss for the quarter was 69 million, compared to a net loss for the same period in the prior year of 105 million.

Speaker Change: Hi, guys John on for David Thanks for taking our questions.

Speaker Change: Got a few on our end.

Speaker Change: Starting with total health in terms of loss of total hall.

Speaker Change: Can you just give us a status update on <unk>.

Speaker Change: Whether or not this is it.

Speaker Change: <unk> has been launched to existing customers and if not what else needs to be done and when that might be ready to rollout.

Speaker Change: Yes, I can take that one.

Unknown Speaker: So starting with Total Health, in terms of launching Total Health, can you just give us a status update on whether or not this has been launched to existing customers? And if not, what else needs to be done? And when that might be ready to roll out?

Speaker Change: I'll take that one.

Speaker Change: Total health is not rolled out to existing customers yet it is something that is definitely in the works that we are working on.

Unknown Speaker: I'll take that one. Total Health has not rolled out to existing customers yet. It is something that is definitely in the works that we are working on. If you remember when we originally planned to launch Total Health, that overlapped with our cyber incident, so it has been really a soft launch. And it's something that we're thinking about for the fall, about how we relaunch it.

Speaker Change: If you remember when we originally planned to launch total health that overlapped with our cyber incident.

Speaker Change: So it has been really a soft launch and it's something that we're thinking about for the fall about how we relaunch it.

The improvement in the first quarter net loss was driven mainly by the stock-based compensation expense taken in the prior year and a significant reduction in GSK collaboration programs, as mentioned previously. Next, our adjusted EBITDA. For details on how we define the adjusted EBITDA, as well as the corresponding reconciliations to debt, please see our earnings press release. So we'll adjust the EBITDA deficit for the first quarter was 35 million, compared to a 50 million deficit for the same period in the prior year.

Unknown Speaker: Okay, and at this point, is it more of just an engineering hurdle, as was previously highlighted? Or is there anything else that needs to be? I mean, there are engineering hurdles. It's just also a question of what we have. We have a number of priorities and a number

Speaker Change: Okay and at this point is it more of just an engineering hurdles, which previously highlighted or is there anything else that needs to be I mean, there's engineering hurdles. It's just also a question of we have we have a number of priorities and the number of launches coming up so isn't about Jeff.

Unknown Speaker: I mean, there are engineering hurdles. It's just also a question of whether we have we have a number of priorities.

Speaker Change: Finding the right priorities and the right time.

Speaker Change: Got it.

Unknown Speaker: Okay, great. And in terms of margin expansion, I know you've also previously highlighted marketing efficiency and membership sales resulting in better unit economics. I was just wondering, is there any space left to continue pushing price at all? Or is that lever sort of maxed out at this point?

Speaker Change: Okay great.

Speaker Change: In terms of margin expansion.

Speaker Change: I know you've also previously headed marketing efficiency and membership sales, resulting in better unit economics I'm. Just wondering is there any space left to also continue pushing price at all or is that leverage sort of maxed out at this point.

Despite the decline in revenue, we are pleased with our ability to drive meaningful adjusted EBITDA leverage to cost discipline and investment prioritization. Achieving adjusted EBITDA profitability remains a key company wide goal, and while we are encouraged by our progress, we are also focused on and working diligently to find opportunities to improve margins. We ended the quarter with 170 million in cash and cash equivalents, compared to 216 million as of March 31st, 2024.

Unknown Speaker: I think, you know, we've actually increased the pricing on our subscriptions from $29 to $69 for 23andMe Plus. I mean, we're really pleased with the retention that we've seen and the upgrades and uptake on that subscription product, even with the increased pricing. We've also worked on increasing, you know, the ASP on our kits as well, and we'll continue to look for efficiencies in our marketing spend going forward. I think we see some good opportunities there and the market for margin. And I also want to highlight, I know some of your product is, yes, it's really, it's, you know, extremely high margin for us and will help us improve overall margins in the business.

Speaker Change: I think we have actually increased the pricing on our subscriptions from $29 to $69 for 2020 plus.

Speaker Change: We're really pleased with the retention and that we've seen.

Speaker Change: That's an uptick on that subscription product even with the increased pricing. We've also worked on increasing asps on our kits as well and we will continue to look for efficiencies in our marketing spend going forward.

We continued to be judicious with our cash usage, and believed the current level of cash supports 23 meat plans for targeted investment in high ROI growth initiatives. Rapping up, we are pleased with the progress made in the first quarter. We continue to add value and innovations to our services, are seeing improvements in our membership metrics, and we are better managing our cost base. I am incredibly optimistic about the future of the company and our ability to help people access, understand, and benefit from the human genome.

Speaker Change: I think we see some good opportunities there in the market for margins.

Speaker Change: And I also want to highlight.

Speaker Change: Yes, it really is.

Speaker Change: Extremely high margin for us.

Speaker Change: And help us with group overall margins in the business.

Unknown Speaker: Got it. So to the extent that you can say, and I know you don't give official guidance on this, but you know, as you look ahead to the rest of fiscal year 2025, can we get a sense of how much margins can grow year over year? net net, with given all these different variables?

Speaker Change: Got it so to the extent that you can say and I know you don't give official guidance on this but as you look ahead to the rest of fiscal year 2025.

Speaker Change: Can we get a sense of how much.

Speaker Change: Margins can grow year over year.

Speaker Change: Net net with given all these different variables.

With that, let's open it up to questions. Thank you. Please, gentlemen, as a question, you will need to press star 111 on your telephone and wait for your name to be announced. Do we draw a question? Simply press star 111 again. Please stand by while we complicate on your roster. We have a question from Delano. David, what city on the open? Hi, John on for David, thanks for taking our questions. We have a few on our end.

Unknown Speaker: No.

Unknown Speaker: No, we are not at this time giving any guidance, you know, but I can say that, you know, basically, we did see our margins in this quarter grow year over year by four percentage points in the BGS business. So I think that was significant for us.

Speaker Change: No.

Speaker Change: We are at this time, not giving any guidance but.

Speaker Change: I can say that basically we did see our margins in this quarter grow over year over year up four percentage points in the <unk> business. So I think that was significant for us.

Speaker Change: Got it thanks.

Unknown Speaker: In terms of, you know, you mentioned that the therapeutics discovery group will be winding down; what sort of impact does this have on your go-forward decisions and the strategy for your two internal assets?

Speaker Change: In terms of you mentioned that the therapeutic discovery group will be winding down what sort of impact does this have on your go forward decisions and your strategy for your your.

Speaker Change: Two internal assets.

Starting with total health, in terms of launch total health, can you just give us a status update on whether or not this has been launched to existing customers, and if not, what else needs to be done and when that might be ready to roll out? Yeah, I can take that one. I'll take that one. Total health is not rolled out to existing customers yet. It is something that is definitely in the works that we are working on.

Speaker Change: I can I can take that one.

Unknown Speaker: Impacted, those were two pretty different groups. We have our two clinical assets, which continue to be run by Jennifer Low, and Jennifer is continuing to develop those and, you know, and has a team that is also looking at whether there are other opportunities out there for us to continue to grow our immuno-oncology portfolio, but it is an area we've been pretty committed to saying what we are going to fund.

Speaker Change: It doesn't impact that those were two pretty different groups. We have our two clinical assets continues to be run by Jennifer Lowe.

Speaker Change: And Jennifer is continuing to develop those and and has a team that is also looking at are there other opportunities out there.

Speaker Change: For us to continue to grow our immuno oncology.

Speaker Change: Portfolio, but it is an area we've been pretty committed to thing what we are going to fund and we're committed to funding. These now through the phase II and the phase one and continuing to look at opportunities for us to fund these programs and.

If you remember, when we originally planned to launch total health that overlapped with our cyber incidents. So it has been really a soft launch and it's something that we're thinking about for the fall about how we relaunch it. Okay. And at this point is it more of just an engineering hurdle, which previously highlighted or is there anything else that needs to be. I mean, there's engineering hurdle. It's just also a question of we have we have a number of priorities and a number of launches coming up.

Unknown Speaker: Anne Wojcicki, Ian Cooney, Unknown Attendee, Poon Mah, Joseph Selsavage, Joseph Arron, Unknown Discovery Team

Speaker Change: And potentially grow it so no other impact travel.

Speaker Change: The downsizing of our <unk>.

Speaker Change: Discovery team.

Unknown Speaker: Okay, got it. So speaking of those internal assets, on 610, you know, you highlighted the favorable safety and tolerability profile and that that might position it well for potential combination strategies. Given that you've shown a partial response in neuroendocrine tumors at ASCO, what are your thoughts on a potential combination with a tyrosine kinase inhibitor such as Cicabo, which is following an NDA to treat neuro

Speaker Change: Okay got it so speaking of that is.

So it's about just, you know, finding the right priorities in the right time. Got it. Okay. Great. And in terms of margin expansion. I know you've also previously hired marketing efficiency and membership sales resulting in better unit economics. I was just wondering, is there any space left to also continue pushing price at all, or is that lever sort of max at this point. I think, you know, we have actually increased the pricing on our subscriptions from $29 to $69 for 23 and the plus.

Speaker Change: Internal asset <unk>.

Speaker Change: You've highlighted the favorable safety and tolerability profile on that that might position it well for potential combination strategies.

Speaker Change: Given that you've shown a partial response in neuroendocrine tumors at <unk>, what are your thoughts on a potential combination with a.

Speaker Change: Jason kinase inhibitor, such as Chicago, which is filing an NDA to treat neuroendocrine tumors.

Speaker Change: Yes, Jennifer you want to take that.

Unknown Speaker: Yeah, that's consistent with the data that we showed pre-clinical at ACR, and we are actively looking at that. We will also plan on presenting additional data from that study later this year, and I think what you'll see is a theme and a pattern emerging in terms of what's possible for this drug.

Jennifer Lowe: Yes, that's consistent with the data that we've shown pre clinically at ACR and we are actively looking at that.

I mean, we're really pleased with the retention and that we've seen and the upgrades and updates on that subscription product even with the increased pricing. We've also worked on increasing, you know, the ASP on our kits as well. And we'll continue to look for efficiencies and our marketing spend going forward. I think we've seen some good opportunities there and market for margins. And I also want to highlight an opportunity product. Yes, it's really it's extremely high margin for us and we'll help us improve overall margins in the business.

Speaker Change: We are also planned.

Speaker Change: Presenting additional data from that study later this year and I think what Youll see is that.

Speaker Change: Theme at a pattern emerging in terms of on what's what's possible for this drug.

Unknown Speaker: And I guess to that point, and this is my last question. I think it was mentioned the next data readout could be at ESMO, but for that longer-term follow-up data, can you just help frame expectations for that readout, and you know what the benchmark for success would look like at that point?

Speaker Change: And I guess to that point and this is my last question.

Speaker Change: I think it was mentioned the next data readout cadet as now.

Speaker Change: Both of that longer term follow up data can you just help frame expectations for that readout and what the benchmark for success would look like at that point.

Got it. So to the extent that you can say, and I know you don't give official guidance on this, but, you know, as you look ahead to the rest of fiscal year 2025. Can we get a sense of how much margins can grow year by year net net was given all these different variables. No, we are at the time not giving any guidance, you know, but I can say that, you know, basically, we did see our margins in this quarter of bro over year by four percentage points in the BGS business.

Unknown Speaker: As you know, information around our upcoming presentations is embargoed, so I can't comment on that, but we do remain optimistic and feel that the data that we presented at ASCO is reflective of the overall program.

Speaker Change: As you know information around our our upcoming.

Speaker Change: <unk> presentation. This embargo so I can't comment on that but we do remain optimistic and buildup of the data that we presented at <unk>.

Speaker Change: It's reflective of the overall program.

Unknown Speaker: Thank you so much for taking time to answer all of my questions.

Speaker Change: Got it. Thank you so much for taking all my questions.

So I think that was significant for us. Got it. Thanks. In terms of, you know, you mentioned that the therapeutics discovery group will be winding down. What sort of impact does this have on your go forward decisions and your strategy for your, your two internal assets? I can, I can take that one. So it doesn't impact it. Those were two pretty different groups. We have our two clinical assets continues to be run by Jennifer Low.

Speaker Change: Thank you.

Ian Cooney: Now I'll turn it over to Ian for any further questions.

Speaker Change: Now I'll turn it over to Ian for any further questions.

Ian Cooney: Yeah, thank you. I'll read the top few questions here from our State Technologies.

Ian: Yes. Thank you.

Ian: The top few questions here from our safety technology in Q&A platform.

Unknown Speaker: Technology's Q&A platform from investors and shareholders. Question number one for Joe: what are the plans to regain NASDAQ and compliance? And is there still a plan to take the company private? David Lebowitz, Anne Wojcicki,

Ian: Investors and shareholders.

Speaker Change: Number one for Joe what are the plans to regained NASDAQ listing compliance and is there still a plan to take the company private.

And Jennifer is continuing to develop those and, you know, and has a team that is also looking at are there other opportunities out there for us to continue to grow our communal oncology portfolio, but it is an area we've been pretty committed to saying what we are going to fund and we're committed to funding these now through the phase two and the phase one and continuing to look at opportunities for us to fund these programs. And potentially grow it.

Joe Selsavage: On the first part of the question, you know, we received a 180-day extension from NASDAQ to become compliant with the listing requirements, which expires on November 4th. We've been focusing on improving the overall operating profile of the company through execution and focusing operating momentum to become re-compliant. But in the event that we cannot achieve compliance by November 4th, prior to that, we are seeking shareholder approval for a reverse stock split at our annual meeting of stockholders in late August.

Speaker Change: Okay.

Joe: The first part of the question. We received 180 day extension from NASDAQ to become compliant with the listing requirements, which expires on November four.

Speaker Change: <unk> been focusing on improving the overall operating profile of the company.

Speaker Change: Two through execution and focusing operating momentum to become compliant.

Speaker Change: But.

Speaker Change: Event that we cannot achieve.

Speaker Change: Lyons by the November four and prior to that we are seeking shareholder approval for a reverse stock split at our annual meeting of stockholders in late August and if necessary. We want this to be an option available to the board to ensure that we actually can become compliant with the NASDAQ requirements before November four.

Joe Selsavage: And if necessary, we want this to be an option available to the board to ensure that we actually can become compliant with the NASDAQ requirements before November 4th. On is there still a plan to take the company private? You know, we can't comment at this time on that matter until we have another material update.

So no other impact from, you know, the downsizing of our discovery team. Okay, got it. So speaking of those internal assets, on 610, you know, you've highlighted the favorable safety and tolerability profile and that that might position it well for potential combination strategies, given that you've shown a partial response to neuroendocrine tumors at ASCO. What are your thoughts on a potential combination with a cherishing Chinese inhibitor, such as the Cabo, which is filing an NDA to treat neuroendocrine tumors?

Speaker Change: And is there still plan to take the company private we don't cannot comment at this time on that matter.

Speaker Change: So we have another material update.

Unknown Speaker: Thank you, Joe. One more for you. What is the plan to address...

Speaker Change: Alright, Thank you Joe.

Speaker Change: One more for you what is the plan to address upcoming liquidity challenges.

Unknown Speaker: Facebook Messenger lieberowitz16 Please PLEASE English Please please le 2021 l 21 KM a What are the operational milestones that investors can watch for? And, you know, how should we sort of track that we're executing on our plan?

Speaker Change: What are the operational milestones that investors can watch for.

Speaker Change: And.

Speaker Change: How should we sort of track that we're executing on our plan.

Joe Selsavage: So we're actively discussing the most effective ways to increase our cash runway and intend to continue to drive efficiencies that, you know, we've shown and, you know, our operating results to date. And, you know, we're also looking at how to continue to drive growth in our revenue and, especially, margin. And also, finally, we are discussing potential financing options. As for the milestones, we think that membership growth is extremely important and continue to look for ways to drive growth in our PGS and lemonade businesses. And as we continue to drive meaningful revenue from our research data businesses,

Yeah, Jennifer, you want to take that? Yeah, that's consistent with the data that we showed preclinically at ACR and we are actively looking at that. We will also plan on presenting additional data from that study later this year and I think what you'll see is a theme and a pattern emerging in terms of on what's possible for this drug. And I guess to that point, and this is my last question, I think it was mentioned the next data readout could be at ASMO, but for that longer term follow-up data, can you just help frame expectations for that readout and you know what the benchmark for success would look like at that point?

Speaker Change: So we're actively discussing the most effective ways to increase our cash runway and intend to continue to drive efficiencies that.

Speaker Change: Sharon and operating results to date.

Speaker Change: And we're also looking at how to continue to drive growth in our revenue and especially margin and also finally are discussing potential financing options at.

Speaker Change: The milestones we think that membership growth is extremely important and continue to look for ways to drive growth in our PGS eliminate businesses.

Speaker Change: As we continue to drive meaningful revenue also from our research data businesses.

Unknown Speaker: Great, thank you. Anne, this one's for you.

Speaker Change: Great. Thank you.

Speaker Change: For you are there plans to engage with pharmaceutical stakeholders to facilitate clinical trials or other types of businesses in that area.

Unknown Speaker: Are there plans to engage with pharmaceutical stakeholders?

Speaker Change: Great question.

As you know, information around our upcoming presentations is in Margot, so I can't comment on that, but we do remain optimistic and feel that the data that we presented at ASCO is reflective of the overall program. Thank you so much for taking all of my questions. Thank you. Now I'll turn it over to Ian for any further questions. Yeah, thank you. I'll read the top few questions here from our state technology Q&A platform from investors and shareholders.

Speaker Change: Clinical trials is definitely an exciting area to apply genetics and particularly at the data that <unk> 23 in the house. So we definitely look at a couple of options. One is recruiting individuals who have a specific can probably a rare genotype four clinical trials.

Unknown Speaker: stakeholders to facilitate clinical trials or other types of businesses in that area.

Unknown Speaker: Yep, great question. Clinical trials are definitely an exciting area to apply genetics and, particularly, the data that 23andMe has. So we definitely look at a couple of options. One is recruiting individuals who have a specific and probably a rare genotype for clinical trials. So that is something that we have done quite a bit; we know how to do, and we've been executing on. The other area that's quite interesting is using polygenic risk scores to help understand how clinical trials could be or should be designed and what are the right patient populations to be recruiting. So both of those are areas, you know, one recruiting individuals and then second, helping think about what's going on in those areas that are exciting for us to do.

Speaker Change: That is something that we have done quite a bit.

Speaker Change: We know how to do and we've been executing on and the other area. That's quite interesting is using polygenic risk scores to help understand how clinical trials could be or should be designed and what are the right patient population to be recruiting so both of those are areas.

Speaker Change: On recruiting individuals and then second helping to think about.

Unknown Speaker: Unknown Speaker, Unknown Speaker, Unknown Attendee, Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron, Jennifer Low, 23andMe

Speaker Change: Those areas.

Question number one for Joe, what are the plans to regain Nasdaq with the compliance and is there still a plan to take to become the private? I'm on the first part of the question, you know, we received a 180-day extension from Nasdaq to become compliant with the listing requirements, which expires on November 4th. We've been focusing on improving the overall operating profile of the company to the execution and focusing operating momentum to become recompliant.

Speaker Change: Thanks, Greg.

Greg: Medical partners.

Speaker Change: And we.

Speaker Change: You broke up there a little bit yet.

But in the event that we cannot achieve a compliance by the November 4th, prior to that we are seeking shareholder approval for a reverse stock split at our annual meeting of stockholders in late August. And if necessary, we want this to be an option available to the board to ensure that we actually can become compliant with the Nasdaq requirements before November 4th. On, is there still plans to take company private? You know, we don't cannot comment, you know, at this time on that matter until we have another material update.

Speaker Change: Do you hear me now sorry about that.

Speaker Change: Yes.

Unknown Speaker: So, I was saying that for pharmaceutical clinical trials, there are really two areas. One is being able to recruit patients with specific genotypes out of our data set. So we are able to identify people who have potentially rare genotypes and recruit them for studies. The second area is to really help partners, pharmaceutical partners, think about who are the right patients to be recruiting for their studies. And what is the right kind of clinical trial design that they should be using? How could they better be using genetics to improve their clinical trial design? So, both of those are areas where we have been focused with pharmaceutical partners.

Speaker Change: So I was saying is that for the pharmaceutical clinical trials, there's really the two areas one is being able to recruit patients with specific genotype to out of our dataset. So we are able to identify people who have potentially rare genotype and recruit them four studies the second areas to really help part.

Speaker Change: <unk> pharmaceutical partners think about who are the right patients to be recruiting for their study and what is the right kind of clinical trial design that they should be how could they better be using genetics to improve their clinical trial design. So both of those are areas, where we have been focused with pharmaceutical partners.

Unknown Speaker: Great, last one. We're given some color on, you know, kind of how we're

Speaker Change: Okay last one.

Speaker Change: We've given some color on kind of our starting to develop AI, but can you give some more detail on kind of what the plans would be to how.

Unknown Speaker: of how we're starting to develop AI. But can you give some more detail on kind of what the plans would be for how we'll deploy AI and how it will impact the business?

Great. Thank you, Joe. One more for you. What is the plan to address upcoming liquidity challenges? What are the operational milestones that investors can watch for? And, you know, how should we sort of track that we're executing on our plan? So we're actively discussing the most effective ways to increase our cash runway and intend to continue to drive efficient fees that, you know, we've shown in, you know, our operating results to date.

Speaker Change: How we'll deploy AI and how it will impact.

Speaker Change: Business.

Unknown Speaker: Definitely, AI is going to be an exciting part of our future. As a company that was set up to have data, you know, set up to become one of the world's largest healthcare data companies. We are in a great position now to be able to think about how we can actually use all the data that our customers have contributed to really improve our understanding of, you know, basic science and human biology, as well as disease prevention or disease management, and as well as how can we actually use all of our data and AI to improve the therapeutics discovery process? So we have our first preprint that came out; we referenced that in the press release.

Speaker Change: Definitely AI is going to be an exciting part of our future.

Speaker Change: As a company that was set up to have data set.

Speaker Change: Set up to be become a one of the world's largest health care data companies.

Speaker Change: We are in a great position now to be able to think about how we can actually use all the data that our customers have contributed four really improving our understanding of basic science and human biology, as well as disease prevention or disease management.

And, you know, we're also looking at how to continue to drive growth in our revenues, and especially margin, and also finally are discussing potential financing options. And at the milestones, we think that membership growth is extremely important and continue to look for ways to drive growth in our PGS and lemonade businesses. And as we continue to drive meaningful revenue, also from our research data businesses. Great, thank you. Anne, this one's for you.

Speaker Change: As well as can we actually use all of our data and AI to be improving the therapeutics discovery process. So we have our first pre print that came out we referenced that in the press release.

Unknown Speaker: Unknown Speaker, Unknown Speaker, Unknown Speaker

Unknown Speaker: Unknown Attendee, Poon Mah, Joseph Selsavage, Unknown Attendee, Poon Mah, Joseph Arron

Speaker Change: And earnings.

Speaker Change: Closing.

Are there plans to engage with pharmaceutical stakeholders to facilitate clinical trials or other types of businesses in that area? Great question. Clinical trials is definitely an exciting area to apply genetics, and particularly the data that 23andMe has. So we definitely look at a couple options. One is recruiting individuals who have a specific and probably a rare genotype for clinical trials. So that is something that we have done quite a bit that we know how to do and we've been executing on the other area that's quite interesting is using polygenic risk for us to help understand how clinical trials could be or should be designed.

Speaker Change: There's a lot of the claims potential for housing data is going to be.

Unknown Speaker: Unknown Attendee, Poon Mah, Joseph Selsavage, Joseph Arron, Jennifer Low, 23andMe

Speaker Change: Alright understood.

Speaker Change: The entire therapeutic developments Tiger.

Speaker Change: You cut out there at the end of that.

Speaker Change: I'll ask them to the last couple of sentences.

Speaker Change: Sorry.

Speaker Change: So.

Speaker Change: I think that is going to be an exciting time.

Speaker Change: It's going to impact.

Speaker Change: Learn more.

Speaker Change: It is going to help us understand how we are.

Speaker Change: Let's see what it all means and how we can apply genomics to meaningfully improve outcomes clinical trial.

Unknown Speaker: improve the outcomes of the whole drug discovery process.

Speaker Change: Sorry of the whole drug discovery process.

And what are the right patient populations to be recruiting. So both of those are areas, you know, one recruiting individuals, and then second helping think about. And we broke up there a little bit. Oh, do you hear me now? Sorry about that. Yeah. So I was saying is that for the pharmaceutical clinical trials, there's really the two areas. One is being able to recruit patients with specific genotypes out of our data set.

Speaker Change: Yeah.

Unknown Speaker: We lost you a bit there, but I think we got the gist of it. I think that's all the questions we have from the technology operator.

Speaker Change: We lost you a bit there, but I think we got the gist of it I think thats all the questions. We have from say technologies operator.

Speaker Change: Okay.

Operator: Thank you. And ladies and gentlemen, thanks for joining us. This concludes today's conference call. Thank you all for participating. You may now disconnect. Everyone have a great day.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, thanks for joining US. This concludes today's conference call. Thank you all for participating you may now disconnect everyone have a great day.

So we are able to identify people who have potentially rare genotypes and recruit them for studies. The second area is to really help partners pharmaceutical partners think about who are the right patients to be recruiting for their study and what is the right kind of clinical trial design that they should be, how could they better be using genetics to improve their clinical trial design. So both of those are areas where we have been focused with pharmaceutical partners.

Okay, last one. We're given some color on, you know, kind of how we're starting to develop AI that can you give some more detail on kind of what the plans would be to help how we'll deploy AI and how we'll attack the business. Definitely AI is going to be an exciting part of our future as a company that was set up to have data, you know, set up to become a one of the world largest healthcare data companies.

We are in a great position now to be able to think about how we can actually use all the data that our customers have contributed for really improving our understanding of, you know, basic science and human biology as well as disease prevention or disease management. And as well as can we actually use all of our data and AI to be improving the therapeutic discovery process. So we have our first pre-prince that came out, we referenced that in the press release and in the earnings.

There's a lot of essential potential for how the data is going to be able to make sure that human health are understood in the community and the entire therapeutic development sector. You cut out there at the end of that answer. Sorry, I just think that it's going to be an exciting time to see how AI is going to impact ourselves. We're going to have more of a series to help us understand how we are that you know and actually what it all means and how we can apply.

Genome access to meaningfully improve the outcomes of clinical trials. Sorry, of the whole drug discovery process. We'll ask you a bit there, but I think we got the gist of it. I think that's all the questions we have from the technology operator. Thank you. And ladies and gentlemen, thanks for joining us. This concludes today's conference call. Thank you all for participating. You may not disconnect. Everyone have a great day.