Cue’s 2Q22 Results Show COVID-19 Testing Demand Is Erratic

It’s probably next to impossible to take an accurate gauge of the COVID-19 testing space. A look at Cue Health’s recent earnings and measures shows how the market is erratic.

The San Diego, CA-based company reported phenomenal 2Q22 earnings based on its COVID-19 testing but in late June the company said it was reducing its manufacturing workforce by 170 people. Cue cited economic challenges and the government’s recent decision to reduce funding for COVID-19 testing as the reasons for the layoffs.

Revenue in 2Q22 was $87.7 million which exceeded Cue’s guidance due to stronger than anticipated COVID-19 testing orders from existing customers.  A breakdown of sales shows private sector revenue was $80.5 million, or 91.8% of total revenue, an increase of $48.1 million over last year. Public sector revenue was 8.2% of total revenue or $7.2 million. Disposable test cartridge revenue was $82.9 million in the second quarter of 2022.

“We achieved stronger-than-expected revenue performance in the quarter and continued to deliver on our pipeline programs,” said Ayub Khattak, Chairman and CEO of Cue Health. “We are very excited about our upcoming full launch of Cue Care, closing the virtual health care loop by allowing customers to conduct a molecular diagnostic test, consult a medical professional, and get treatment delivered, all within the Cue Health platform. With the addition of e-prescription fulfillment and delivery to our product offerings, Cue has taken another important step forward on our mission to enable personalized, proactive, and informed healthcare that empowers people to live their healthiest lives."

Cue said it expects 3Q22 revenues to be in the range of $55 to $60 million, excluding any adjustment to deferred revenue held on the balance sheet.

The company went public through an IPO that raised $200 million in September of 2021.