Fulgent Reports Third Quarter 2023 Financial Results
-
Core Revenue of
$66 million represents Growth of 17% Year-over-Year -
Additional Reimbursement from COVID-19 Test Sales yields Revenue of
$19 million , for Total Revenue of$85 million -
Reiterates Full Year 2023 Core Revenue Guidance of
$260 million
Third Quarter 2023 Results:
-
Total Revenue of
$85 million -
Core Revenue1 grew 17% year-over-year to
$66 million -
GAAP loss of
$13.1 million , or$0.44 per share -
Non-GAAP loss of
$11.7 million , or$0.39 per share -
Adjusted EBITDA of
$18.1 million -
Generated cash flow from operations of
$10.2 million -
Cash, cash equivalents, and investments in marketable securities of
$851 million as ofSeptember 30, 2023
Note:
1) Core Revenue excludes revenue from COVID-19 testing products and services including COVID-19 NGS testing revenue.
Non-GAAP income (loss), non-GAAP income (loss) per share, and adjusted EBITDA income (loss) are described below under “Note Regarding Non-GAAP Financial Measures” and are reconciled to the most directly comparable GAAP financial measure, GAAP income (loss), in the accompanying tables.
Commenting on the results,
Outlook
For the full year 2023, Fulgent expects:
-
Core Revenue of approximately
$260 million -
GAAP loss of approximately
$2.15 per share -
Non-GAAP loss of
$0.95 per share -
Cash, cash equivalents, and investments in marketable securities of approximately
$830 million as ofDecember 31, 2023 *
*Cash expenditures may be higher or lower than currently estimated due to a variety of facts and circumstances, including as a result of the Company’s ongoing stock repurchase program or other expenditures outside of ordinary course.
Conference Call Information
Fulgent will host a conference call for the investment community today at
Note Regarding Non-GAAP Financial Measures
Certain information set forth in this press release, including non-GAAP income (loss), non-GAAP income (loss) per share, and adjusted EBITDA income (loss) are non-GAAP financial measures. Fulgent believes this information is useful to investors because it provides a basis for measuring the performance of the Company’s business, excluding certain income or expense items that management believes are not directly attributable to the Company’s operating results. Fulgent defines non-GAAP income (loss) as net income (loss) calculated in accordance with accounting principles generally accepted in
About Fulgent
Fulgent is a technology-based company with a well-established clinical diagnostic business and a therapeutic development business. Fulgent’s clinical diagnostic business offers molecular diagnostic testing services, comprehensive genetic testing, and high-quality anatomic pathology laboratory services designed to provide physicians and patients with clinically actionable diagnostic information to improve the quality of patient care. Fulgent’s therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. The Company aims to transform from a genomic diagnostic business into a fully integrated precision medicine company.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements in this press release include statements about, among other things: future performance; guidance regarding expected quarterly and annual financial results, core revenues, GAAP loss, and non-GAAP loss; evaluations and judgments regarding the stability of certain revenue sources, the Company’s cash position and sufficiency of its resources, momentum, trajectory, vision, future opportunities and future growth of the Company’s testing services and technologies and expansion; the Company’s research and development efforts, including any implications that the results of earlier clinical trials will be representative or consistent with later clinical trials and the expected timing of enrollment for these trials or the availability of data or results of these trials; the Company’s identification and evaluation of opportunities and its ability to capitalize on opportunities, capture market share, or expand its presence in certain markets; and the Company’s ability to continue to grow its business.
Forward-looking statements are statements other than historical facts and relate to future events or circumstances or the Company’s future performance, and they are based on management’s current assumptions, expectations, and beliefs concerning future developments and their potential effect on the Company’s business. These forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking statements. These risks and uncertainties include, among others: the market potential for, and the rate and degree of market adoption of, the Company’s tests, including its Beacon787 panel; its ability to maintain turnaround times and otherwise keep pace with rapidly changing technology; the Company’s ability to maintain the low internal costs of its business model; the Company’s ability to maintain an acceptable margin; risks related to volatility in the Company’s results, which can fluctuate significantly from period to period; risks associated with the composition of the Company’s customer base, which can fluctuate from period to period and can be comprised of a small number of customers that account for a significant portion of the Company’s revenue; the Company’s level of success in obtaining coverage and adequate reimbursement and collectability levels from third-party payors for its tests and testing services; the Company’s level of success in establishing and obtaining the intended benefits from partnerships, strategic investments, joint ventures, acquisitions, or other relationships; the success of the Company’s development efforts, including the Company’s ability to progress its candidates through clinical trials on the timelines expected; the Company’s compliance with the various evolving and complex laws and regulations applicable to its business and its industry; and the Company’s ability to protect its proprietary technology and intellectual property. As a result of these risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events.
The forward-looking statements made in this press release speak only as of the date of this press release, and the Company assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes in expectations, except as otherwise required by law.
The Company’s reports filed with the
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Condensed Consolidated Balance Sheet Data |
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(in thousands) |
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2023 |
2022 |
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ASSETS: |
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Cash and cash equivalents |
$ |
84,076 |
$ |
79,506 |
|
|
Investments in marketable securities |
|
767,385 |
|
773,377 |
|
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Accounts receivable, net |
|
49,277 |
|
52,749 |
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Property, plant, and equipment, net |
|
85,265 |
|
81,353 |
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Other assets |
|
372,395 |
|
399,068 |
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Total assets |
$ |
1,358,398 |
$ |
1,386,053 |
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LIABILITIES & EQUITY: |
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Accounts payable, accrued liabilities and other liabilities |
$ |
96,564 |
$ |
116,178 |
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Total stockholders’ equity |
|
1,261,834 |
|
1,269,875 |
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Total liabilities & equity |
$ |
1,358,398 |
$ |
1,386,053 |
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Condensed Consolidated Statement of Operations Data |
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Three and Nine Months Ended |
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(in thousands, except per share data) |
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(unaudited) |
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenue |
$ |
84,687 |
|
|
$ |
105,655 |
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|
$ |
218,708 |
|
|
$ |
551,264 |
|
Cost of revenue (1) |
|
44,843 |
|
|
|
59,560 |
|
|
|
139,481 |
|
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|
197,350 |
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Gross profit |
|
39,844 |
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|
46,095 |
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|
79,227 |
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|
353,914 |
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Operating expenses: |
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Research and development (1) |
|
10,014 |
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|
7,507 |
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|
29,488 |
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|
20,401 |
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Selling and marketing (1) |
|
10,161 |
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|
9,859 |
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|
30,967 |
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|
28,665 |
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General and administrative (1) |
|
17,498 |
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|
26,266 |
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|
57,293 |
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|
82,281 |
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Amortization of intangible assets |
|
1,957 |
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|
2,006 |
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|
|
5,887 |
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|
|
4,487 |
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Restructuring costs |
|
— |
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|
105 |
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|
|
— |
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|
|
3,001 |
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Total operating expenses |
|
39,630 |
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|
45,743 |
|
|
|
123,635 |
|
|
|
138,835 |
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Operating income (loss) |
|
214 |
|
|
|
352 |
|
|
|
(44,408 |
) |
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|
215,079 |
|
Interest and other income, net |
|
6,646 |
|
|
|
1,405 |
|
|
|
15,519 |
|
|
|
2,408 |
|
Income (loss) before income taxes |
|
6,860 |
|
|
|
1,757 |
|
|
|
(28,889 |
) |
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|
217,487 |
|
Provision for income taxes |
|
20,326 |
|
|
|
414 |
|
|
|
12,016 |
|
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|
51,488 |
|
Net (loss) income from consolidated operations |
|
(13,466 |
) |
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|
1,343 |
|
|
|
(40,905 |
) |
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|
165,999 |
|
Net loss attributable to noncontrolling interests |
|
359 |
|
|
|
376 |
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|
1,229 |
|
|
|
1,236 |
|
Net (loss) income attributable to Fulgent |
$ |
(13,107 |
) |
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$ |
1,719 |
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$ |
(39,676 |
) |
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$ |
167,235 |
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Net (loss) income per common share attributable to Fulgent: |
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Basic |
$ |
(0.44 |
) |
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$ |
0.06 |
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$ |
(1.33 |
) |
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$ |
5.53 |
|
Diluted |
$ |
(0.44 |
) |
|
$ |
0.06 |
|
|
$ |
(1.33 |
) |
|
$ |
5.38 |
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Weighted average common shares: |
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Basic |
|
30,013 |
|
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|
30,174 |
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|
29,789 |
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|
30,256 |
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Diluted |
|
30,013 |
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|
30,867 |
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|
29,789 |
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|
31,107 |
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(1) Equity-based compensation expense was allocated as follows: |
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Cost of revenue |
$ |
2,621 |
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$ |
2,475 |
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|
$ |
7,374 |
|
|
$ |
6,183 |
|
Research and development |
|
3,782 |
|
|
|
2,687 |
|
|
|
10,900 |
|
|
|
7,110 |
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Selling and marketing |
|
1,189 |
|
|
|
1,243 |
|
|
|
3,644 |
|
|
|
3,148 |
|
General and administrative |
|
3,310 |
|
|
|
2,567 |
|
|
|
9,572 |
|
|
|
6,177 |
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Total equity-based compensation expense |
$ |
10,902 |
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$ |
8,972 |
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$ |
31,490 |
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$ |
22,618 |
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Non-GAAP Income (Loss) Reconciliation |
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Three and Nine Months Ended |
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(in thousands, except per share data) |
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Three Months Ended |
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Nine Months Ended |
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|
2023 |
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|
2022 |
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|
2023 |
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|
2022 |
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Net (loss) income attributable to Fulgent |
$ |
(13,107 |
) |
|
$ |
1,719 |
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|
$ |
(39,676 |
) |
|
$ |
167,235 |
|
|
Amortization of intangible assets |
|
1,957 |
|
|
|
2,006 |
|
|
|
5,887 |
|
|
|
4,487 |
|
|
Restructuring costs |
|
— |
|
|
|
105 |
|
|
|
— |
|
|
|
3,001 |
|
|
Acquisition-related costs |
|
— |
|
|
|
166 |
|
|
|
— |
|
|
|
6,575 |
|
|
Equity-based compensation expense |
|
10,902 |
|
|
|
8,972 |
|
|
|
31,490 |
|
|
|
22,618 |
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Non-GAAP tax effect (1) |
|
(11,402 |
) |
|
|
(3,150 |
) |
|
|
(18,267 |
) |
|
|
(10,271 |
) |
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Non-GAAP (loss) income attributable to Fulgent |
$ |
(11,650 |
) |
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$ |
9,818 |
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|
$ |
(20,566 |
) |
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$ |
193,645 |
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||||
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Net (loss) income per common share attributable to Fulgent: |
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||||
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Basic |
$ |
(0.44 |
) |
|
$ |
0.06 |
|
|
$ |
(1.33 |
) |
|
$ |
5.53 |
|
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Diluted |
$ |
(0.44 |
) |
|
$ |
0.06 |
|
|
$ |
(1.33 |
) |
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$ |
5.38 |
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Non-GAAP (loss) income per common share attributable to Fulgent: |
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||||
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Basic |
$ |
(0.39 |
) |
|
$ |
0.33 |
|
|
$ |
(0.69 |
) |
|
$ |
6.40 |
|
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Diluted |
$ |
(0.39 |
) |
|
$ |
0.32 |
|
|
$ |
(0.69 |
) |
|
$ |
6.23 |
|
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Weighted average common shares: |
|
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|
|
|
|
|
|
|
|
||||
|
Basic |
|
30,013 |
|
|
|
30,174 |
|
|
|
29,789 |
|
|
|
30,256 |
|
|
Diluted |
|
30,013 |
|
|
|
30,867 |
|
|
|
29,789 |
|
|
|
31,107 |
|
|
|
|
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(1) Tax rates as follows: |
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||||
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Corporate tax rate of 28% for the three and nine months ended |
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||||
|
Non-GAAP Adjusted EBITDA Reconciliation |
|
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||||
|
Three and Nine Months Ended |
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(in thousands) |
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|
||||
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|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
Net (loss) income attributable to Fulgent |
$ |
(13,107 |
) |
|
$ |
1,719 |
|
|
$ |
(39,676 |
) |
|
$ |
167,235 |
|
|
Interest income, net |
|
(6,402 |
) |
|
|
(1,452 |
) |
|
|
(15,177 |
) |
|
|
(1,587 |
) |
|
Provision for income taxes |
|
20,326 |
|
|
|
414 |
|
|
|
12,016 |
|
|
|
51,488 |
|
|
Restructuring costs |
|
— |
|
|
|
105 |
|
|
|
— |
|
|
|
3,001 |
|
|
Acquisition-related costs |
|
— |
|
|
|
166 |
|
|
|
— |
|
|
|
6,575 |
|
|
Equity-based compensation expense |
|
10,902 |
|
|
|
8,972 |
|
|
|
31,490 |
|
|
|
22,618 |
|
|
Depreciation and amortization |
|
6,419 |
|
|
|
9,820 |
|
|
|
19,610 |
|
|
|
22,860 |
|
|
Adjusted EBITDA |
$ |
18,138 |
|
|
$ |
19,744 |
|
|
$ |
8,263 |
|
|
$ |
272,190 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20231103381079/en/
Source: