Bionano Genomics (BNGO) Q4 2023 Earnings Call Transcript

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Bionano Genomics (BNGO -1.65%)
Q4 2023 Earnings Call
Mar 05, 2024, 4:30 p.m. ET

Prepared Remarks:

Operator

Good day, and welcome to the Bionano fourth-quarter and full-year 2023 earnings conference call. Today’s conference is being recorded. At this time, I would like to turn the conference over to David Holmes from investor relations. Please go ahead.

David Holmes

Thank you, and good afternoon, everyone. Welcome to the Bionano fourth-quarter and full-year 2023 financial results conference call. Leading the call today is Dr. Erik Holmlin, CEO of Bionano.

He’s joined by Gulsen Kama, CFO of Bionano. After market closed today, Bionano issued a press release announcing its financial results for the fourth-quarter and full-year 2023. A copy of the release can be found on the Investor Relations page of the company’s website. I would like to remind everyone that certain statements made during the conference call are forward-looking, including statements about Bionano’s strategic and commercialization plans; sales pipeline; future fundraising activities and prospects; cash runway; expected cost savings initiatives and the estimated impact on annualized operating expenses; the timing of expected benefits in such initiatives; expected reductions in headcount; anticipated benefits or improvements to the Stratys, Saphyr, and Ionic purification system and their advantages over current technologies, goals, and anticipated milestones for 2024; and achievements of the ELEVATE growth strategy; our anticipated compound annual growth rate; the size of our ability to access our estimated target markets; the anticipated benefits of recent acquisitions; expectations regarding the timing; and the content study results and the anticipated benefits of these studies, driving adoption of the Stratys system, Saphyr system, and the Ionic purification system.

Such forward-looking statements are based on current expectations, and there can be no assurances that the results contemplated in these statements will be realized. Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in Bionano’s press release and Bionano’s reported — reports filing with the SEC. These forward-looking statements are based on information available to Bionano today, and the company assumes no obligation to update statements as circumstances change. In addition, to supplement Bionano’s financial results reported in accordance with the U.S.

Generally Accepted Accounting Principles, or GAAP, the company is reporting non-GAAP operating expense. This non-GAAP financial measure is not meant to be considered in isolation or as a substitute to comparable GAAP measures, should be read in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP, and has no standardized meaning prescribed by GAAP. It is not prepared under any comprehensive set of accounting rules or principles. A description of non-GAAP operating expense and reconciliation of non-GAAP operating expense to GAAP operating expense are included at the end of the company’s earnings release issued earlier today, which has been posted on the Investor Relations page of the company’s website. An audio recording and webcast replay for today’s conference call will be available online on the Investor Relations page of the company’s website.

With that, I will turn the call over to Erik.

Erik Holmlin — Chief Executive Officer

Thanks, David. Good afternoon, everyone, and thank you for joining us today. Today’s call is an important one for Bionano. We want to cover a lot of ground starting with an update on Q4 and the full-year 2023, and then we want to cover the 2024 outlook, including important progress we are making to address our capital structure and cash burn.

I would like to first turn the call over to Gulsen to cover the financial results for Q4 and full-year 2023. Gulsen?

Gulsen Kama — Chief Financial Officer

Thanks, Erik. Consistent with our pre-announcement in January, Q4 revenues were $10.7 million, which is up 30% versus Q4 2022. 2023 revenue totaled $36.1 million, which reflects an increase of 30% over 2022 revenues. Our installed base of optical genome mapping systems grew by 25 from the third to the fourth quarter of 2023 for a total of 326 on December 31st, 2023, which reflects a 36% increase from year-end 2022.

We sold 7,980 flowcells in the quarter, which reflects 67% growth over Q4 2022. For the full year, we saw 72% growth in the number of flowcells sold from 2022 to 2023 with a total of 26,444. This growth is important to note as we believe it indicates higher consumables utilization given that consumables growth is outpacing installed base growth by a factor of two. We expect utilization to increase even more as the higher throughput Stratys system becomes a larger percentage of our total installed base.

In October 2023, we completed an $80 million financing of convertible notes and warrants, and we ended the fourth quarter with $102.3 million in cash, cash equivalents, and available-for-sale securities, of which $35.5 million was subject to some restrictions. On February 28th, 2024, we announced an important restructuring of the convertible notes, which lowered the minimum available liquidity covenant from 50 million to 25 million; lowered the restricted cash covenant from 35 million to 25 million, which can be further reduced as remaining principal is retired, cancel the March partial redemption payment, and delay the April partial redemption payment to April 20th; and redeemed $27.7 million in principal, leaving the outstanding debt at $24.3 million. This restructuring effectively unlocked $30 million with the potential to free up an additional $25 million as further principal is retired. Regarding operating expense, GAAP gross margin for the fourth quarter of 2023 was 23%, which is slightly higher than the 22% GAAP gross margin reported for the fourth quarter of 2022. Full-year 2023 total gross margin was 26%, up from 21% in full-year 2022. Fourth-quarter 2023 GAAP operating expense was $27.4 million, compared to $39.3 million in the fourth quarter of 2022.

The year-over-year decrease was primarily due to a decrease in the fair value of contingent consideration of period-end milestones and reduced headcount-related expense partly attributed to the cost savings initiatives outlined in our Q2 2023 and Q3 2023 earnings releases. Fourth-quarter 2023 non-GAAP operating expense was $27.3 million, compared to $30.6 million in the fourth quarter of 2022. Full-year 2023 GAAP operating expense was $224.8 million, and non-GAAP operating expense was $127.3 million. Full-year 2023 non-GAAP operating expense excludes a one-time impairment charge of $77.3 million, $14.5 million in stock-based compensation, and $7.2 million in amortization of intangibles, partially offset by a $1.5 million in reductions of contingency-based obligations. Since joining Bionano, I have been focused on driving increased discipline to our spending while we work to extend our cash runway. In October 2023, we announced the cost savings initiative that we believe, together with reductions that began in May, will save approximately $33 million annually, including a reduction in headcount of approximately 83 employees and reductions in discretionary spending on various projects.

Some of those savings were evident in our fourth-quarter opex. But for timing of employee expenses coming off the books, we expect to see the full benefit of the reductions starting in the first quarter of 2024. Today, Erik and I are announcing that we’re implementing new plans that will further reduce expenses. Streamlining operations is possible because of the product launches behind us and address of the current equity capital environment for tools and diagnostics companies, which is requiring companies to become much more efficient with resources and to reduce cash burn. With this 2024 initiative, our goal will be reducing annualized operating expense by another estimated $35 million to $40 million, including a potential reduction in headcount by an additional 110 to 125 employees, bringing the total number of employees down to approximately 200 from approximately 324 today.

Overall, since May 2023, through the completion of the initiatives announced today, we aim to have reduced headcount by approximately 200 people and reduced annualized operating expenses by about $65 million to $75 million. We expect the savings initiatives we’re announcing today to have associated costs. We will provide that information, as appropriate, once we have more completely finalized the cost associated with these plans. As we streamline our operating structure, we believe we’re cementing the path forward now. Our core product development is mostly completed, and we’re targeting segments of the genome analysis market where we believe we face no direct competition, seeking to replace the classical cytogenetics methods with a single assay, in contrast to the sequencing and spatial genomics markets which have become incredibly crowded.

With that, I will turn the call back to Erik to discuss our 2024 anticipated business plans before we take your questions. Erik?

Erik Holmlin — Chief Executive Officer

Thanks, Gulsen. 2023 was one of Bionano’s most successful years ever with solid revenue growth and achievement of all our publicly stated ELEVATE milestones. Despite the challenging backdrop from macroeconomic headwinds facing the industry overall, we believe 2023 set the stage for a bright future for OGM and the impact our products can make in healthcare. We believe the evidence is clear, ELEVATE is working. We saw a substantial increase in OGM publications in 2023 with over 5,000 clinical genomes published and the highest recorded quarter to date with 88 publications in the fourth quarter of 2023.

OGM studies, including our own clinical studies program, have now moved beyond showing concordance to focusing on demonstrations of the incremental value of OGM over classical methods. Our product development teams brought two new transformative products to the market, which are key to the end-to-end solution for OGM: VIA software and the Stratys system. VIA software makes the visualization, interpretation, and reporting of OGM data incredibly fast, automated, and easy to digest. It also enables analysis of chromosomal microarray and next-generation sequencing data together with OGM, which is a feature that is totally unique in the market. The Stratys system increases the throughput of OEM data generation by as much as fourfold compared to the Saphyr system, and we have a road map to further increase that throughput over time. Stratys was released in an early access program in Q4, and demand exceeded our planned supply of ten systems.

We ended up with orders for 11 early access Stratys systems, 70% of which went to new customers. We’re excited to introduce Stratys live to the market at the upcoming ACMG meeting in Toronto, March 13th through the 16th, including at a pre-conference scientific event hosted by Bionano on March 12th where Stratys users will present their progress, and at a reception for conference attendees on March 13th. The next component of the streamlined end-to-end solutions to come out is isotachophoresis, or ITP, for OGM on the Ionic system, which is currently in pre-commercial evaluation in the field now. And we expect ITP for OGM to be released commercially in the second half of this year. Looking ahead to executing ELEVATE in 2024, with a further streamlined operating structure, we’re aiming to limit the impact of downsizing on revenue growth in the core OGM products.

As part of that streamlining, however, we have made the difficult decision to phase out some of our clinical services products that we sell directly to physicians, namely our FirstStep and NextStep Dx products and our Fragile X tests, which are legacy non-OGM tests. In 2023, these products generated around $7 million of the overall $36.1 million in revenues. Therefore, after taking into account discontinued products, we are guiding full-year 2024 revenues to be in the range of $37 million to $41 million and first-quarter 2024 revenues to be between $8.25 million and $8.75 million. We expect to install between 80 and 100 new optical genome mapping systems in 2024, but we think the net increase to the installed base may reflect some Saphyr to Stratys upgrades. So, we expect — we expect the OGM install base by the end of 2024 to be in the range of 381 to 401 systems. Regarding next steps on the path to OGM reimbursement, Bionano Labs submitted the dossier for local coverage determination coverage policy for heme malignancies from MolDX Palmetto in the fourth quarter of 2023.

And the application was accepted, which is the first step in the process. Bionano Labs is working with other OGM users to seek local coverage determinations from other Medicare administrative contractors, or MACs, in the U.S. In the meantime, customers continue to be successful in obtaining and using PLA codes to get reimbursement for OGM applications. We believe a category 1 CPT code is a more general solution to reimbursement coding for OGM in the U.S. According to the AMA website, an application for a category 1 CPT code for OGM in the 2024 cycle has been submitted.

The process is confidential, and we are not able to confirm if it is one of our users in the U.S. as the applicant’s name is not public information. Widespread utilization of OGM is one criterion that the AMA will use in the evaluation of a CPT code application. And we believe it will be more meaningful if OGM users are able to directly speak to the utility of the workflow.

The CPT code application process unfolds over the next few months, and so we’re hopeful of a good outcome toward the end of the second quarter of 2024. In 2024, our clinical studies programs will focus mainly on heme malignancies in an effort to support the medical guidelines and reimbursement decisions connected to this application for OGM going forward. We will also maintain efforts to address regulatory requirements, where they represent opportunities to clear the path for adoption. In closing, I want to emphasize that, while we are facing challenges from the situation related to equity capital markets, our core business is healthy. Reducing expenses is a difficult but important step in addressing our financing overhang as we continue our mission to transform the way the world sees the genome.

With that, operator, we are ready to take questions.

Questions & Answers:

Operator

(Operator instructions) Our first question comes from Sung Ji Nam with Scotiabank. Your line is now open.

Sung Ji Nam — Scotiabank — Analyst

Hi, thanks for taking the questions. So, just a clarification to start off. For the $7 million, the revenue that’s being discontinued from the NextStep and FirstStep and Fragile X, are they all coming from the — the service revenue segment? And then, would you be able to kind of comment on kind of what the growth rate has been for that business over the years?

Erik Holmlin — Chief Executive Officer

Yes, those are coming from what would be services. And they’ve been growing a little bit, but our expectations, as we were looking ahead to 2024 before making the decision to discontinue them, was that they would be mostly flat.

Sung Ji Nam — Scotiabank — Analyst

Got you. OK. And then, Erik, great to hear kind of your focus on heme malignancies this year, but could you give us kind of an update in terms of all the clinical studies underway, preclinical — I’m sorry, prenatal postnatal team and also solid tumor, and what the statuses are and kind of what the next steps are for — for all of them?

Erik Holmlin — Chief Executive Officer

Yeah, sure. So, you know, we’ve really made tremendous progress across all areas, perhaps with the exception of solid tumor, although we — we have the study which has been IRB approved. And we’re really waiting to just — you know, actually have really more bandwidth to spend time on that particular study. In both prenatal and postnatal, we had landmark publications that came out over the course of the year in 2023, really demonstrating the concordance with traditional methods and beginning to show some of the incremental benefits in diagnostic yield, especially for the postnatal study.

And so, you know, we feel like we’ve created a really solid momentum for those studies, and it’s going to be fine to let them sort of, you know, filter into the market and for people to digest those data. There’s a — there are, you know, really large data sets that show the — the — the value of optical genome mapping as a replacement for traditional methods. And then, hematologic malignancies study has also progressed significant publications, including peer-reviewed publications, over the course of 2023. And our focus going forward there will be really to continue to pursue all of the endpoints that we intend to measure, which include the incremental benefits of optical genome mapping over traditional methods. We’ve seen a little bit of that in some of the early studies and early publications, but we’re going to continue to dig deeply into that.

And then, we also want to be able to show changes in how cases are managed as a result of the information that comes out of these studies, as well as a variety of health economic benefits. And so, you know, some of those endpoints for prenatal and postnatal might be a little bit delayed, and we’ll get them for heme first. But I think that the clinical trials program had developed such incredible momentum that a lot of the work will continue independently of, you know, our efforts, and that will allow us to focus the resources that we have on heme.

Sung Ji Nam — Scotiabank — Analyst

Got you. Great. That’s super helpful. And then, just the last one for Gulsen, could you maybe talk about the — your expectations for gross margin cadence for this year? Good to see, you know, continuous improvement there last — throughout last year.

I was wondering, given the — the full commercial launch of Stratys as well as the discontinuation of certain product lines, should we anticipate some disruptions on the margin side at least for the early part of the year?

Gulsen Kama — Chief Financial Officer

I don’t think so. If anything, I think some of the cost reductions that we announced will actually have an impact even on cost of revenues. So, just because of that, I think there will be an improvement.

Sung Ji Nam — Scotiabank — Analyst

Got it. Great. Thank you so much.

Erik Holmlin — Chief Executive Officer

Thank you, Sung Ji.

Operator

Thank you. One moment for our next question. Our next question comes from Mark Massaro with BTIG. Your line is now open.

Mark Massaro — BTIG — Analyst

Hey, guys, thank you for the questions, and congrats on a strong 2023. Maybe just starting with the headcount reductions, so it looks like, you know, you’re talking about a potential reduction number. I guess, have you — I mean, you obviously provided the number, so I — can you just give us a sense for what would move that from potential to, you know, moving — moving forward? And how should we think about the timing? And then, related to that, I know, Erik, you don’t want to impact revenue-generating activities, but you know, that is a large number of folks. So, maybe just walk us through whether or not you think you’re able to withhold cuts to commercial activities.

Erik Holmlin — Chief Executive Officer

Sure. So, I think with regard to the language that we’re using, I think a fair takeaway is that we’re seeking to come from about 324, which is the headcount that we’re at now, down to 200. And our experience when we did reductions in the fourth quarter was that, for a variety of reasons, a few people here and there had to be taken in and moved out of the plan. So, we want to leave some room around the 200, but you know, that’s certainly the target that we’re aiming for. So, that would suggest a reduction right around 125 people.

And, you know, as has been pointed out, as we discussed these steps with, you know, our incredible employees, and as you can imagine, it’s such a difficult decision to make to reduce these costs. Those — you know, that — that sort of magnitude, you know, exceeds a third of the company. And so, essentially, all areas of the company will be impacted. And one of the reasons that we decided to discontinue the services products was that, you know, there are a fair number of people associated with generating those revenues.

And so, that allows us to meet part of that headcount target in a — in a single move. The other — the other reason is that — you know, is important is that product flow is and the samples coming in the door and, you know, they provide some benefit to the advancement of OGM overall. They’re not really core. And so, a key driver, as we think about going forward, is that we really want to be deeply focused on optical genome mapping and have all of our management resources dedicated to that. So, that helps with some of the numbers.

And then, you know, in order to address, you know, the — the remaining, you know, we recognize that we’ve gone through some significant product developments. VIA software is in the market. The Stratys system is in the market. And so, the incredible people who have helped us get to this point, you know, we don’t need as many of them going forward. So, that’s a part of the transition.

And then, you know, commercially, we do have some impact across sales and marketing. And the way that we’re balancing that is to really leverage, you know, where we have distribution partners and third parties that support our products in the market. You know, we’re really going to lean on them, and they’re going to have to — they’re going to have to deliver. And so, what you’ll see is that maybe we’re not going to be as ambitious about, you know, growing our commercial footprint, globally and internationally across APAC and rest of world. And we’ll maintain our very successful focus in Europe and, you know, United States and Canada.

So, it’s — it’s — you know, we are certainly going to impact headcount there, but we want to — we want to keep the momentum in place that — that we’ve built so far.

Mark Massaro — BTIG — Analyst

OK. And then, maybe a clarification on the install base and the guidance. Looks like you’re expecting a range of 80 to 100 systems this year. You did indicate you expect some conversions from Saphyr to Stratys.

Is it right that, you know, if I just do the math, you might have, let’s see, an increase of 65 systems overall, but the delta between the 65 and the — the 90 at the midpoint would be the conversions? I mean, is that based on — you know, is that math right? And then, is that based on conversations you’re having with customers? And then, maybe lastly, can you talk about mix between capital and reagent rental, how you think that might play out this year?

Erik Holmlin — Chief Executive Officer

Sure. Yeah, I think that your — your sort of math is correct there. And, you know, we feel — we feel confident about, you know, this — this 80 to 100 new installs. And, you know, there’s the potential to get past that.

But, you know, we — you know, we want to make sure that we deliver against what we’re signing up for here. And these conversions or upgrades, if you will, we have some visibility into that. But I think aside from the early access program, we’re only about 45 days into the full commercial release of Stratys. And so, the information that we’re getting is — is — is fairly new.

And so, the 25 upgrades is — is an estimate. And — and so we’ll just have to see how things play out going forward.

Mark Massaro — BTIG — Analyst

OK, the last question for me is, it’s nice to see you submit the dossier to Palmetto MolDX. Is it your expectation that, you know, 2024 is a year, obviously, for them to review it, maybe come up with a draft decision? Do you think that might hit by year-end and then maybe go final next year? Maybe just help us think about how you’re thinking about timing.

Erik Holmlin — Chief Executive Officer

Yeah, so I can share some additional information that we’ve learned as part of the process, you know, kind of pre-submission and then subsequently, is that, you know, there needs to be, you know, a determination as to whether this application is a — you know, ultimately treated as a request for a — a completely new coverage policy or if it can be attached to any of the existing ones. And we’re fairly certain that it’s likely to be a new policy. And so, for our own thinking and our own planning purposes, we treat it that way. And I think it’s reasonable to expect that it could take, you know, all of 2024 for a new draft coverage policy to come out. So, the earliest that we would see it, you know, I think it’s safe to say that we would see the draft policy early 2025 and with the potential for it to become final in 2025.

Maybe that — maybe — maybe the folks working on it beat that, but I think that’s a safe estimate.

Mark Massaro — BTIG — Analyst

Yeah, that makes sense. All right. Thanks for all the time.

Erik Holmlin — Chief Executive Officer

Thank you, Mark.

Operator

Thank you. (Operator instructions) Our next question comes from Jeff Cohen with Ladenburg Thalmann. Your line is now open.

Jeffrey Cohen — Ladenburg Thalmann — Analyst

So, good afternoon, and thanks for taking our questions. I wanted to follow up on Mark’s previous question. Could you comment a little bit on the current 1 CPT code in the AMA from what you know currently and how might that play out over ’24? And if that plays out well, then when would that take effect?

Erik Holmlin — Chief Executive Officer

Sure. Thanks, Jeff. So, I think in contrast to prior years where Bionano has led the process to apply for the CPT code, I think what we learned in that process is that, as the manufacturer of the technology, it’s — it’s difficult for us to really provide the information. And so, we were pleased to see that an application for a CPT code has been made this year. And what we know with — with certainty is that we were not the applicant.

And so, it’s reasonable to conclude that the applicant is a — a user. And as we sort of indicated in our prepared remarks, we’re not able to sort of confirm their identity because it’s a confidential process. Having said that, the process is, you know, standardized and plays out over the next two or three months. And so, I think that, you know, what we’re likely to see is the application proceeding. And, you know, the applicant will know sometime in late May, early June, where it stands.

And then, us as observers from the outside, we will know, you know, if the code is advanced into the agenda of the final meetings, which take place in June. That agenda is published shortly before the meeting. So, I think we’ll all be watching very closely, over the next couple of months, to see how the situation unfolds.

Jeffrey Cohen — Ladenburg Thalmann — Analyst

OK, got it. That’s helpful. Could you talk a little bit about the Stratys placements? I know it’s a real action plan, but you mentioned seven out of 10 were new customers. Can you walk us through perhaps the methodology or the — the thinking there as far as those customers wanting a higher throughput system and perhaps some flavor as far as what types of accounts they were?

Erik Holmlin — Chief Executive Officer

Yeah, you know, across the board, our accounts — and I think that this has been a consistent pattern now for a while and we should start emphasizing it more — but, you know, these are all either academic medical centers like hospitals or, you know, regional reference labs or, you know, commercial labs. And we also have systems going to pharmaceutical companies. So, what we don’t see anymore — and I think that this is a really important transition that we’ve undergone — we don’t see the academic research centers who are buying optical genome mapping to create the next reference genome for this species or that species. There’s a little bit of genetic and genomic mechanistic work going on, but just about, you know, substantially all of our adoption is really in our target markets of routine use in hematologic malignancies, research, constitutional genetic disease research, and then applications in cell and gene therapy. So, you know, super pleased about that.

And then, when we look at the Stratys system and the folks who have raised their hands, without a doubt, they see it as the — the thing that they’ve been waiting for that provides them new, higher throughput. There are also other characteristics of the Stratys system that make it attractive to users, which include really a lot of flexibility coming to introducing samples into the system and generating data. For example, the Stratys system can run 12 samples at a time but also accommodate up to three additional samples in a — you know, just-in-time sort of fashion where you can jump the queue and get ahead and run, you know, urgent samples. And so, the flexibility in the workflow, coupled with the higher throughput, is something that labs are finding, you know, very interesting and very attractive. And something else that we’re seeing is that, you know, accounts that had been in our pipeline and in the process of purchasing optical genome mapping are making the shift from Saphyr to Stratys. And I don’t know if Mark is still on, but he had also asked about the kind of distribution of rentals to capital purchases. And, you know, for a while now, we’ve seen a very rough 50-50 distribution, but we’re actually seeing a little bit more of purchases with Stratys, and that’s — that’s encouraging.

Jeffrey Cohen — Ladenburg Thalmann — Analyst

That’s helpful. And then, finally, for us, for Gulsen, in particular, when we talk about the opex reductions for ’24, if we do some quick math off the ’23 numbers, less the impairment and what you’re leaning toward, we’re getting, call it, about 115 and 120 for full-year ’24. And could you maybe comment on that, and then perhaps give us a little insight into how you see that breaking down between R&D and SG&A?

Gulsen Kama — Chief Financial Officer

Yeah. So, in terms of 2024 impacts, specifically, not the annualized savings numbers which is what we announced, it will take some time to implement the savings initiatives. So, we’ll most likely see a partial-year impact as a result of the most recent announcements. The ones that we announced in October should be in full effect by now.

So, you know, the number that you mentioned, I would at least divide by two, I guess, in terms of the impact in 2024 specifically. And I’m sorry, what was the second part of your question?

Jeffrey Cohen — Ladenburg Thalmann — Analyst

Just if you could give us a sense of the the ramifications on the R&D and SG&A.

Gulsen Kama — Chief Financial Officer

R&D and SG&A?

Jeffrey Cohen — Ladenburg Thalmann — Analyst

Yeah.

Gulsen Kama — Chief Financial Officer

Yeah. I think, as Erik mentioned, it’s both new product development with — with Stratys already rolled out, but it’s also on the commercial side. So, for now, again, I — I can get back to you, but I would expect equal split, almost.

Jeffrey Cohen — Ladenburg Thalmann — Analyst

Got it. OK. That’s super helpful. Thanks for our questions.

Congrats on the quarter.

Erik Holmlin — Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Jason McCarthy with Maxim Group. Your line is now open.

Michael Okunewitch — Maxim Group — Analyst

Hey, guys, this is Michael Okunewitch on the line for Jason. Thank you so much for taking my questions today.

Erik Holmlin — Chief Executive Officer

Hi, Michael.

Michael Okunewitch — Maxim Group — Analyst

So, I guess — I guess, just first question, I just want to get a point of clarification. Is the — the full-year ’24 revenue guidance, fully factoring in the removal of the legacy — legacy tests, I’m trying to understand if it’s appropriate to consider the core growth rate there to be like 27 to 40%.

Erik Holmlin — Chief Executive Officer

Yes, it is fully factoring in the reduction — or removal of those revenues. We’re probably going to see a little bit of them in the first quarter. So, I think at the high end of that range, we’re — we’re really aiming to get to 30% growth in the core.

Operator

Thank you. I’m showing no further questions at this time. I would now like to turn it back to Erik Holmlin for closing remarks.

Erik Holmlin — Chief Executive Officer

OK, thank you, Daniel. And I want to thank everybody for joining in the call, and we look forward to updating you shortly on our progress here in the first quarter of 2024. Thank you very much.

Operator

(Operator signoff)

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