Burning Rock Biotech Limited (BNR) 6-K Burning Rock Reports Fourth Quarter and Full Year 2023 Financial Results

Exhibit 99.1

Burning Rock Reports Fourth Quarter and Full Year 2023 Financial Results

GUANGZHOU, China, March 29, 2024—Burning Rock Biotech Limited (NASDAQ: BNR and LSE: BNR, the “Company” or “Burning Rock”), a company focused on the application of next generation sequencing (NGS) technology in the field of precision oncology, today reported financial results for the three months and the year ended December 31, 2023.

2023 Business Overview and Recent Updates

• Corporate Updates

• Completed profitability-driven organizational optimization, execution towards profitability well underway

• Early Detection

• Following the Breakthrough Device Designation granted by the US Food and Drug Administration (FDA) for our OverC^™ Multi-Cancer Detection Blood Test (MCDBT) in January 2023, our OverC^™ MCDBT also received the Breakthrough Device Designation by China’s National Medical Products Administration (NMPA) in October 2023, making it the only test globally that has received Breakthrough Device Designation from both the FDA and the NMPA.

• Therapy Selection and Minimal Residual Disease (MRD)

• Precision oncology diagnostics product supports advancement in late-stage breast cancer treatment, with results published in the New England Journal of Medicine in June 2023. The study, CAPItello-291, sponsored by our pharma client AstraZeneca, is a phase 3 trial that assessed the efficacy and safety of Capivasertib–fulvestrant therapy in advanced breast cancer patients with hormone receptor positive (HR+), human epidermal growth factor receptor 2 negative (HER2-) cancer whose disease has progressed during or after aromatase inhibitor therapy. The study demonstrates that Capivasertib–fulvestrant combination therapy results in significantly longer progression-free survival than treatment with fulvestrant alone.

• Pharma Services

• New companion diagnostics (CDx) development for breast and prostatic cancer announced with AstraZeneca in China.

• Entered into a Master Service Agreement in Oncology Companion Diagnostics (CDx) with Boehringer Ingelheim, focusing on advancing the clinical trials related to Boehringer Ingelheim’s MDM2-p53 antagonist, brigimadlin (BI 907828), and the development of CDx products in China.

• Total value of new contracts entered into during 2023 amounted to RMB310 million, representing a 24% increase from 2022.

Fourth Quarter 2023 Financial Results

Revenues were RMB121.1 million (US$17.1 million) for the three months ended December 31, 2023, representing a 14.9% decrease from RMB142.2 million for the same period in 2022.

• Revenue generated from central laboratory business was RMB51.3 million (US$7.2 million) for the three months ended December 31, 2023, representing a 28.7% decrease from RMB72.0 million for the same period in 2022, primarily attributable to a decrease in the number of tests, as we continued to focus on our in-hospital business.

• Revenue generated from in-hospital business was RMB28.8 million (US$4.1 million) for the three months ended December 31, 2023, representing a 32.3% decrease from RMB42.5 million for the same period in 2022, primarily attributable to one-off adjustment with two hospitals. Exclude such two, revenue generated from in-hospital business for the three months ended December 31, 2023 would have remained relatively stable (decreasing by 1%) year-over-year.

• Revenue generated from pharma research and development services was RMB41.0 million (US$5.8 million) for the three months ended December 31, 2023, representing a 47.8% increase from RMB27.7 million for the same period in 2022, primarily attributable to increased development and testing services performed for our pharma customers.

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Cost of revenues remained relatively stable at RMB43.0 million (US$6.1 million) for the three months ended December 31, 2023, compared to RMB41.0 million for the same period in 2022.

Gross profit was RMB78.1 million (US$11.0 million) for the three months ended December 31, 2023, representing a 22.9% decrease from RMB101.3 million for the same period in 2022. Gross margin was 64.5% for the three months ended December 31, 2023, compared to 71.2% for the same period in 2022. By channel, gross margin of central laboratory business was 81.7% for the three months ended December 31, 2023, compared to 75.7% during the same period in 2022, primarily due to a decrease in inventory write down; gross margin of in-hospital business was 44.8% for the three months ended December 31, 2023, compared to 63.5% during the same period in 2022, primarily due to a decrease in revenue generated from two hospitals due to one-off adjustment. Exclude such two, gross margin of in-hospital business was 65.0% for the three months ended December 31, 2023, compared to 66.6% during the same period in 2022; gross margin of pharma research and development services was 56.9% for the three months ended December 31, 2023, compared to 71.2% during the same period of 2022, primarily due to a decrease in test volume of higher margin projects.

Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB87.1 million (US$12.3 million) for the three months ended December 31, 2023, representing a 21.1% decrease from RMB110.4 million for the same period in 2022. Non-GAAP gross margin was 71.9% for the three months ended December 31, 2023, compared to 77.6% for the same period in 2022.

Operating expenses were RMB244.4 million (US$34.4 million) for the three months ended December 31, 2023, representing a 23.3% decrease from RMB318.7 million for the same period in 2022. The decrease was primarily driven by budget control measures, including headcount reduction, to improve our operating efficiency.

• Research and development expenses were RMB73.1 million (US$10.3 million) for the three months ended December 31, 2023, representing an 27.5% decrease from RMB100.8 million for the same period in 2022, primarily due to (i) a decrease in the expenditure for detection research, and (ii) a decrease in staff cost resulted from the reorganization of our research and development department to improve operating efficiency.

• Selling and marketing expenses were RMB49.8 million (US$7.0 million) for the three months ended December 31, 2023, representing a 41.5% decrease from RMB85.2 million for the same period in 2022, primarily due to (i) a decrease in staff cost resulted from the reorganization of our sales department to improve operating efficiency, and (ii) a decrease in marketing and conference fee.

• General and administrative expenses were RMB121.5 million (US$17.1 million) for the three months ended December 31, 2023, representing a 8.4% decrease from RMB132.7 million for the same period in 2022, primarily due to a decrease in professional service fee.

Net loss was RMB162.2 million (US$22.8 million) for the three months ended December 31, 2023, compared to RMB216.2 million for the same period in 2022.

Cash, cash equivalents, restricted cash were RMB615.2 million (US$86.7 million) as of December 31, 2023.

Full Year 2023 Financial Results

Revenues were RMB537.4 million (US$75.7 million) for 2023, representing a 4.6% decrease from RMB563.2 million for 2022.

• Revenue generated from central laboratory business was RMB232.8 million (US$32.8 million) for 2023, representing a 26.0% decrease from RMB314.8 million for 2022, primarily attributable to a decrease in the number of tests, as we continued to focus on our in-hospital business.

• Revenue generated from in-hospital business was RMB188.7 million (US$26.6 million) for 2023, representing a 7.6% increase from RMB175.3 million for 2022, primarily due to demand from ten new contracted partner hospitals added to the Company’s in-hospital channel in 2023.

• Revenue generated from pharma research and development services was RMB115.9 million (US$16.3 million) for 2023, representing a 58.4% increase from RMB73.2 million for 2022, primarily attributable to increased development and testing services performed for our pharma customers.

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Cost of revenues was RMB174.2 million (US$24.5 million) for 2023, representing a 4.9% decrease from RMB183.2 million for 2022, primarily due to a decrease in cost of revenues for our central lab business, as we continued to focus on our in-hospital business.

Gross profit was RMB363.2 million (US$51.2 million) for 2023, representing a 4.4% decrease from RMB380.0 million for 2022. Gross margin increased to 67.6% for 2023 from 67.5% for 2022.

Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB399.4 million (US$56.3 million) for 2023, representing a 2.8% decrease from RMB411.0 million for 2022. Non-GAAP gross margin was 74.3% for 2023, compared to 73.0% for 2022.

Operating expenses were RMB1,032.5 million (US$145.4 million) for 2023, representing a 24.1% decrease from RMB1,360.4 million for 2022.

• Research and development expenses were RMB347.0 million (US$48.9 million) for 2023, representing a 17.7% decrease from RMB421.9 million for 2022, primarily due to (i) a decrease in the expenditure for detection research, (ii) a decrease in royalty and license fee, and (iii) a decrease in staff cost resulted from the reorganization of our research and development department to improve operating efficiency.

• Selling and marketing expenses were RMB247.7 million (US$34.9 million) for 2023, representing a 33.1% decrease from RMB370.3 million for 2022, primarily due to (i) a decrease in staff cost resulted from the reorganization of our sales department to improve operating efficiency, (ii) a decrease in marketing and conference fee; and (iii) a decrease in entertainment fee.

• General and administrative expenses were RMB437.8 million (US$61.7 million) for 2023, representing a 23.0% decrease from RMB568.3 million for 2022, primarily due to (i) a decrease in professional service fee; (ii) a decrease in allowance for doubtful accounts resulting from accelerated settlement with customers with long aging accounts receivable; and (iii) a decrease in staff cost resulted from the reorganization of our general and administrative department to improve operating efficiency.

Net loss was RMB653.7 million (US$92.1 million) for 2023, compared to RMB971.2 million for 2022.

2024 Financial Guidance

We currently expect to achieve breakeven (measured by non-GAAP gross profit minus non-GAAP SG&A) in the first half of 2024.

Non-GAAP gross profit refers to gross profit excluding depreciation and amortization. Non-GAAP SG&A refers to selling and marketing expenses and general and administrative expenses, both excluding their respective share-based compensation and depreciation and amortization.

Conference Call Information

Burning Rock will host a conference call to discuss the fourth quarter and full year 2023 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on March 29, 2024.

Please register in advance of the conference using the link provided below and dial in 15 minutes prior to the call, using participant dial-in numbers and unique registrant ID which would be provided upon registering.

PRE-REGISTER LINK:https://register.vevent.com/register/BIa8b469b65e8e428e942decdf0c4c6687.

Additionally, a live and archived webcast of the conference call will also be available on the company’s investor relations website at http://ir.brbiotech.com or through link https://edge.media-server.com/mmc/p/hrphgr99.

A replay of the webcast will be available for 12 months via the same link above.

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About Burning Rock

Burning Rock Biotech Limited (NASDAQ: BNR and LSE: BNR), whose mission is to guard life via science, focuses on the application of next generation sequencing (NGS) technology in the field of precision oncology. Its business consists of i) NGS-based therapy selection testing for late-stage cancer patients, and ii) cancer early detection, which has moved beyond proof-of-concept R&D into the clinical validation stage.

For more information about Burning Rock, please visit: ir.brbiotech.com.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “confident” and similar statements. Burning Rock may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Burning Rock’s beliefs and expectations, are forward-looking statements. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Burning Rock’s control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. All information provided in this press release is as of the date of this press release, and Burning Rock does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Non-GAAP Measures

In evaluating the business, the company considers and uses non-GAAP measures, such as non-GAAP gross profit and non-GAAP gross margin, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The company defines non-GAAP gross profit as gross profit excluding depreciation and amortization. The company defines non-GAAP gross margin as gross margin excluding depreciation and amortization.

The company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The company believe non-GAAP gross profit and non-GAAP gross margin excluding non-cash impact of depreciation and amortization reflect the company’s ongoing business operations in a manner that allows more meaningful period-to-period comparisons.

Contact: IR@brbiotech.com

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Selected Operating Data

	As of
	March 31, 2022		June 30, 2022		September 30, 2022		December 31, 2022		March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023
In-hospital Channel:
Pipeline partner hospitals(1)		24		25		22		28		29		30		29		28
Contracted partner hospitals(2)		41		43		47		49		49		50		55		59
Total number of partner hospitals		65		68		69		77		78		80		84		87

⁽¹⁾  Refers to hospitals that are in the process of establishing in-hospital laboratories, laboratory equipment procurement or installation, staff training or pilot testing using the Company’s products.

⁽²⁾  Refers to hospitals that have entered into contracts to purchase the Company’s products for use on a recurring basis in their respective in-hospital laboratories the Company helped them establish. Kit revenue is generated from contracted hospitals.

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Selected Financial Data

	For the three months ended
Revenues	March 31, 2022		June 30, 2022		September 30, 2022		December 31, 2022		March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023
	(RMB in thousands)
Central laboratory channel		74,211		78,597		89,992		71,970		61,804		66,239		53,481		51,288
In-hospital channel		48,957		34,177		49,636		42,526		51,561		53,835		54,496		28,809
Pharma research and development channel		12,356		18,072		15,003		27,741		29,151		26,194		19,589		40,988
Total revenues		135,524		130,846		154,631		142,237		142,516		146,268		127,566		121,085

	For the three months ended
Gross profit	March 31, 2022		June 30, 2022		September 30, 2022		December 31, 2022		March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023
	(RMB in thousands)
Central laboratory channel		50,574		57,575		69,991		54,507		48,090		51,876		41,487		41,886
In-hospital channel		33,396		20,012		31,593		26,999		34,409		33,353		35,459		12,910
Pharma research and development channel		3,610		5,015		7,010		19,757		16,273		15,193		8,974		23,317
Total gross profit		87,580		82,602		108,594		101,263		98,772		100,422		85,920		78,113

	For the three months ended
Share-based compensation expenses	March 31, 2022		June 30, 2022		September 30, 2022		December 31, 2022		March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023
	(RMB in thousands)
Cost of revenues		365		441		481		496		353		627		680		654
Research and development expenses		12,299		11,923		13,978		14,673		13,612		15,301		12,161		12,401
Selling and marketing expenses		1,774		2,158		2,346		2,247		1,606		3,389		2,848		1,816
General and administrative expenses		65,715		62,615		61,041		74,232		62,595		18,502		57,704		56,472
Total share-based compensation expenses		80,153		77,137		77,846		91,648		78,166		37,819		73,393		71,343

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Burning Rock Biotech Limited

Unaudited Condensed Statements of Comprehensive Loss

(in thousands, except for number of shares and per share data)

	For the three months ended
	March 31, 2022			June 30, 2022			September 30, 2022			December 31, 2022			March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			December 31, 2023
	RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			US$
Revenues		135,524			130,846			154,631			142,237			142,516			146,268			127,566			121,085			17,054
Cost of revenues		(47,944	)		(48,244	)		(46,037	)		(40,974	)		(43,744	)		(45,846	)		(41,646	)		(42,972	)		(6,052	)
Gross profit		87,580			82,602			108,594			101,263			98,772			100,422			85,920			78,113			11,002
Operating expenses:
Research and development expenses		(119,496	)		(92,112	)		(109,433	)		(100,827	)		(94,417	)		(95,779	)		(83,701	)		(73,119	)		(10,299	)
Selling and marketing expenses		(89,211	)		(105,634	)		(90,275	)		(85,174	)		(64,774	)		(70,842	)		(62,310	)		(49,785	)		(7,012	)
General and administrative expenses		(141,733	)		(150,316	)		(143,530	)		(132,705	)		(128,039	)		(69,525	)		(118,724	)		(121,533	)		(17,118	)
Total operating expenses		(350,440	)		(348,062	)		(343,238	)		(318,706	)		(287,230	)		(236,146	)		(264,735	)		(244,437	)		(34,429	)
Loss from operations		(262,860	)		(265,460	)		(234,644	)		(217,443	)		(188,458	)		(135,724	)		(178,815	)		(166,324	)		(23,427	)
Interest income		1,932			2,656			2,013			2,838			3,144			5,255			4,018			5,539			780
Other income (expense), net		298			127			(189	)		(84	)		599			(118	)		(157	)		160			23
Foreign exchange (loss) gain, net		(777	)		624			1,337			365			(116	)		(210	)		423			(517	)		(73	)
Loss before income tax		(261,388	)		(262,053	)		(231,483	)		(214,324	)		(184,831	)		(130,797	)		(174,531	)		(161,142	)		(22,697	)
Income tax expenses		—			(84	)		—			(1,901	)		(422	)		(445	)		(450	)		(1,071	)		(151	)
Net loss		(261,388	)		(262,137	)		(231,483	)		(216,225	)		(185,253	)		(131,242	)		(174,981	)		(162,213	)		(22,848	)
Net loss attributable to Burning Rock Biotech Limited’s shareholders		(261,388	)		(262,137	)		(231,483	)		(216,225	)		(185,253	)		(131,242	)		(174,981	)		(162,213	)		(22,848	)
Net loss attributable to ordinary shareholders		(261,388	)		(262,137	)		(231,483	)		(216,225	)		(185,253	)		(131,242	)		(174,981	)		(162,213	)		(22,848	)
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted		(2.50	)		(2.50	)		(2.23	)		(2.11	)		(1.81	)		(1.28	)		(1.71	)		(1.58	)		(0.22	)
Class B ordinary shares - basic and diluted		(2.50	)		(2.50	)		(2.23	)		(2.11	)		(1.81	)		(1.28	)		(1.71	)		(1.58	)		(0.22	)
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares -basic and diluted		87,179,752			87,532,539			86,585,322			85,051,882			85,065,585			85,151,052			85,000,869			85,071,360			85,071,360
Class B ordinary shares - basic and diluted		17,324,848			17,324,848			17,324,848			17,324,848			17,324,848			17,324,848			17,324,848			17,324,848			17,324,848
Other comprehensive (loss) income, net of tax of nil:
Foreign currency translation adjustments		(3,065	)		29,715			20,646			(5,950	)		(5,659	)		14,829			(1,955	)		(3,026	)		(426	)
Total comprehensive loss		(264,453	)		(232,422	)		(210,837	)		(222,175	)		(190,912	)		(116,413	)		(176,936	)		(165,239	)		(23,274	)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders		(264,453	)		(232,422	)		(210,837	)		(222,175	)		(190,912	)		(116,413	)		(176,936	)		(165,239	)		(23,274	)

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Burning Rock Biotech Limited

Unaudited Condensed Statements of Comprehensive Loss

(in thousands, except for number of shares and per share data)

	For the year ended
	December 31, 2022			December 31, 2023			December 31, 2023
	RMB			RMB			US$
Revenues		563,238			537,435			75,696
Cost of revenues		(183,199	)		(174,208	)		(24,536	)
Gross profit		380,039			363,227			51,160
Operating expenses:
Research and development expenses		(421,868	)		(347,016	)		(48,876	)
Selling and marketing expenses		(370,294	)		(247,711	)		(34,889	)
General and administrative expenses		(568,284	)		(437,821	)		(61,666	)
Total operating expenses		(1,360,446	)		(1,032,548	)		(145,431	)
Loss from operations		(980,407	)		(669,321	)		(94,271	)
Interest income		9,356			17,956			2,529
Interest expenses		102			—			—
Other income, net		152			484			68
Foreign exchange gain (loss), net		1,549			(420	)		(59	)
Loss before income tax		(969,248	)		(651,301	)		(91,733	)
Income tax expenses		(1,985	)		(2,388	)		(336	)
Net loss		(971,233	)		(653,689	)		(92,069	)
Net loss attributable to Burning Rock Biotech Limited’s shareholders		(971,233	)		(653,689	)		(92,069	)
Net loss attributable to ordinary shareholders		(971,233	)		(653,689	)		(92,069	)
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted		(9.35	)		(6.38	)		(0.90	)
Class B ordinary shares - basic and diluted		(9.35	)		(6.38	)		(0.90	)
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted		86,584,100			85,071,691			85,071,691
Class B ordinary shares - basic and diluted		17,324,848			17,324,848			17,324,848
Other comprehensive income, net of tax of nil:
Foreign currency translation adjustments		41,346			4,189			590
Total comprehensive loss		(929,887	)		(649,500	)		(91,479	)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders		(929,887	)		(649,500	)		(91,479	)

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Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

	As of
	December 31, 2022		December 31, 2023		December 31, 2023
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		905,451		615,096		86,634
Restricted cash		19,817		120		17
Accounts receivable, net		109,954		126,858		17,868
Contract assets, net		41,757		22,748		3,204
Inventories, net		130,321		69,020		9,721
Prepayments and other current assets		51,462		50,254		7,078
Total current assets		1,258,762		884,096		124,522
Non-current assets:
Equity method investment		690		337		47
Convertible note receivable		5,105		5,320		749
Property and equipment, net		251,829		131,912		18,579
Operating right-of-use assets		48,205		12,284		1,730
Intangible assets, net		1,986		964		136
Other non-current assets		20,890		5,088		717
Total non-current assets		328,705		155,905		21,958
TOTAL ASSETS		1,587,467		1,040,001		146,480

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Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets (Continued)

(in thousands)

	As of
	December 31, 2022			December 31, 2023			December 31, 2023
	RMB			RMB			US$
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		50,947			18,061			2,544
Deferred revenue		147,633			130,537			18,386
Accrued liabilities and other current liabilities		173,832			104,935			14,780
Customer deposits		1,803			1,197			169
Current portion of operating lease liabilities		37,236			8,634			1,216
Total current liabilities		411,451			263,364			37,095
Non-current liabilities:
Non-current portion of operating lease liabilities		13,551			3,690			520
Other non-current liabilities		4,124			4,537			636
Total non-current liabilities		17,675			8,227			1,156
TOTAL LIABILITIES		429,126			271,591			38,251
Shareholders’ equity:
Class A ordinary shares		117			116			16
Class B ordinary shares		21			21			3
Additional paid-in capital		4,582,790			4,849,337			683,015
Treasury stock		(58,919	)		(65,896	)		(9,281	)
Accumulated deficits		(3,199,946	)		(3,853,635	)		(542,773	)
Accumulated other comprehensive loss		(165,722	)		(161,533	)		(22,751	)
Total shareholders’ equity		1,158,341			768,410			108,229
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		1,587,467			1,040,001			146,480

10

Burning Rock Biotech Limited

Unaudited Condensed Statements of Cash Flows

(in thousands)

	For the three months ended
	December 31, 2022			December 31, 2023			December 31, 2023
	RMB			RMB			US$
Net cash used in operating activities		(67,707	)		(16,019	)		(2,256	)
Net cash used in investing activities		(5,033	)		(328	)		(46	)
Net cash used in financing activities		(10,074	)		(1,909	)		(269	)
Effect of exchange rate on cash, cash equivalents and restricted cash		(5,924	)		(3,277	)		(462	)
Net decrease in cash, cash equivalents and restricted cash		(88,738	)		(21,533	)		(3,033	)
Cash, cash equivalents and restricted cash at the beginning of period		1,014,006			636,749			89,684
Cash, cash equivalents and restricted cash at the end of period		925,268			615,216			86,651

	For the year ended
	December 31, 2022			December 31, 2023			December 31, 2023
	RMB			RMB			US$
Net cash used in operating activities		(456,808	)		(255,783	)		(36,026	)
Net cash used in investing activities		(7,463	)		(9,300	)		(1,310	)
Net cash used in financing activities		(86,238	)		(48,832	)		(6,878	)
Effect of exchange rate on cash, cash equivalents and restricted cash		36,665			3,863			544
Net decrease in cash, cash equivalents and restricted cash		(513,844	)		(310,052	)		(43,670	)
Cash, cash equivalents and restricted cash at the beginning of period		1,439,112			925,268			130,321
Cash, cash equivalents and restricted cash at the end of period		925,268			615,216			86,651

11

Burning Rock Biotech Limited

Reconciliations of GAAP and Non-GAAP Results

	For the three months ended
	March 31, 2022			June 30, 2022			September 30, 2022			December 31, 2022			March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023
				(RMB in thousands)
Gross profit:
Central laboratory channel		50,574			57,575			69,991			54,507			48,090			51,876			41,487			41,886
In-hospital channel		33,396			20,012			31,593			26,999			34,409			33,353			35,459			12,910
Pharma research and development channel		3,610			5,015			7,010			19,757			16,273			15,193			8,974			23,317
Total gross profit		87,580			82,602			108,594			101,263			98,772			100,422			85,920			78,113
Add: depreciation and amortization:
Central laboratory channel		2,553			2,545			3,138			3,609			2,567			2,645			2,550			2,414
In-hospital channel		93			1,428			2,479			2,449			2,582			2,637			2,751			2,728
Pharma research and development channel		2,493			4,327			2,805			3,065			3,974			3,665			3,863			3,808
Total depreciation and amortization included in cost of revenues		5,139			8,300			8,422			9,123			9,123			8,947			9,164			8,950
Non-GAAP gross profit:
Central laboratory channel		53,127			60,120			73,129			58,116			50,657			54,521			44,037			44,300
In-hospital channel		33,489			21,440			34,072			29,448			36,991			35,990			38,210			15,638
Pharma research and development channel		6,103			9,342			9,815			22,822			20,247			18,858			12,837			27,125
Total non-GAAP gross profit		92,719			90,902			117,016			110,386			107,895			109,369			95,084			87,063
Non-GAAP gross margin:
Central laboratory channel		71.6	%		76.5	%		81.3	%		80.8	%		82.0	%		82.3	%		82.3	%		86.4	%
In-hospital channel		68.4	%		62.7	%		68.6	%		69.2	%		71.7	%		66.9	%		70.1	%		54.3	%
Pharma research and development channel		49.4	%		51.7	%		65.4	%		82.3	%		69.5	%		72.0	%		65.5	%		66.2	%
Total non-GAAP gross margin		68.4	%		69.5	%		75.7	%		77.6	%		75.7	%		74.8	%		74.5	%		71.9	%

12

Burning Rock Biotech Limited

Reconciliations of GAAP and Non-GAAP Results

	For the year ended
	December 31, 2022			December 31, 2023
	(RMB in thousands)
Gross profit:
Central laboratory channel		232,647			183,339
In-hospital channel		112,000			116,131
Pharma research and development channel		35,392			63,757
Total gross profit		380,039			363,227
Add: depreciation and amortization:
Central laboratory channel		11,845			10,176
In-hospital channel		6,449			10,699
Pharma research and development channel		12,690			15,310
Total depreciation and amortization included in cost of revenues		30,984			36,185
Non-GAAP gross profit:
Central laboratory channel		244,492			193,515
In-hospital channel		118,449			126,830
Pharma research and development channel		48,082			79,067
Total non-GAAP gross profit		411,023			399,412
Non-GAAP gross margin:
Central laboratory channel		77.7	%		83.1	%
In-hospital channel		67.6	%		67.2	%
Pharma research and development channel		65.7	%		68.2	%
Total non-GAAP gross margin		73.0	%		74.3	%

13