Burning Rock Reports Fourth Quarter and Full Year 2022

GUANGZHOU, China, March 28, 2023 (GLOBE NEWSWIRE) — 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, 2022.

2022 Business Overview and Recent Updates

Corporate Listed on the Main Market of the London Stock Exchange (the “LSE”) by way of a direct listing on November 1, 2022, offering an alternative listing venue in addition to the Nasdaq Global Market.Completed profitability-driven organizational optimization. Early Detection   OverCTM Multi-Cancer Detection Blood Test (MCDBT) obtained Breakthrough Device Designation of the U.S. Food and Drug Administration (FDA) in January 2023, the third of its kind globally.THUNDER study for 6-cancer test released on Annals of Oncology in March, 2023, achieving a comparably high sensitivity of 69.1% and a specificity of 98.9% in detecting six cancers, and showing an impressive performance of ELSA-seq using cfDNA in cancer detection and origin prediction.Completed PROMISE study (2,035 participants, 9-cancer test development) in June 2022, continued to carry out PREDICT and PRESCIENT studies (17,000 participants, 22-cancer test development), launched PREVENT study (12,500 subjects, validation) in the second quarter of 2022. Therapy Selection and Minimal Residual Disease (MRD) Gained NMPA approval for a 9-gene panel, the Company’s second NMPA-approved product.Presented additional MRD datasets on colorectal and pancreatic cancers at the ASCO Gastrointestinal Cancers Symposium (ASCO GI) in January 2023. “Patient-specific tumor-informed circulating tumor DNA (ctDNA) analysis for molecular residual disease (MRD) detection in surgical patients with stages I-IV colorectal cancer (CRC)” and “Patient-specific tumor-informed circulating tumor DNA (ctDNA) assay predicts cancer recurrence in patients with resected pancreatic cancer”. Pharma Services Total value of new contracts entered into during 2022 amounted to RMB250 million, representing a 36% increase from 2021.

Fourth Quarter 2022 Financial Results

Revenues were RMB142.2 million (US$20.6 million) for the three months ended December 31, 2022, representing a 3.5% decrease from RMB147.3 million for the same period in 2021.

Revenue generated from central laboratory business was RMB72.0 million (US$10.4 million) for the three months ended December 31, 2022, representing a 16.3% decrease from RMB86.0 million for the same period in 2021, primarily attributable to the resurgence of COVID-19 pandemic that resulted in a sharp drop in the number of tests performed.Revenue generated from in-hospital business was RMB42.5 million (US$6.2 million) for the three months ended December 31, 2022, representing a 18.1% decrease from RMB51.9 million for the same period in 2021, driven by a decrease of sales volume as affected by the resurgence of COVID-19.Revenue generated from pharma research and development services was RMB27.7 million (US$4.0 million) for the three months ended December 31, 2022, representing a 193.2% increase from RMB9.5 million for the same period in 2021, primarily attributable to a further increased testing volume performed for our pharma customers.

Cost of revenues was RMB41.0 million (US$5.9 million) for the three months ended December 31, 2022, remaining relatively stable compared to RMB42.0 million for the same period in 2021.

Gross profit was RMB101.3 million (US$14.7 million) for the three months ended December 31, 2022, representing a 3.9% decrease from RMB105.4 million for the same period in 2021. Gross margin was 71.2% for the three months ended December 31, 2022, compared to 71.5% of the same period in 2021. By channel, gross margin of central laboratory business was 75.7% for the three months ended December 31, 2022, compared to 76.7% during the same period in 2021; gross margin of in-hospital business was 63.5% for the three months ended December 31, 2022, compared to 65.9% during the same period in 2021; gross margin of pharma research and development services was 71.2% for the three months ended December 31, 2022, compared to 55.0% during the same period of 2021, primarily due to an increase in test volume of higher margin projects.

Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB110.4 million (US$16.0 million) for the three months ended December 31, 2022, representing a 2.8% increase from RMB107.4 million for the same period in 2021. Non-GAAP gross margin was 77.6% for the three months ended December 31, 2022, compared to 72.9% for the same period in 2021.

Operating expenses were RMB318.7 million (US$46.2 million) for the three months ended December 31, 2022, representing a 10.9% decrease from RMB357.5 million for the same period in 2021. The decrease was primarily driven by budget control measures and headcount reduction to improve the Company’s operating efficiency.

Research and development expenses were RMB100.8 million (US$14.6 million) for the three months ended December 31, 2022, representing a 10.6% decrease from RMB112.7 million for the same period in 2021, primarily due to (i) a decrease in the expenditure for early cancer detection research, and (ii) a decrease in research and development personnel’s staff cost, partially offset by an increase in amortized expense on share-based compensation to constantly motivate staff.Selling and marketing expenses were RMB85.2 million (US$12.3 million) for the three months ended December 31, 2022, representing a 17.5% decrease from RMB103.2 million for the same period in 2021, primarily due to (i) a decrease in staff cost resulted from the reorganization of the selling department and improvement in operating efficiency; (ii) a decrease in amortized expense on share-based compensation; and (iii) a decrease in advertising and marketing fee.General and administrative expenses were RMB132.7 million (US$19.2 million) for the three months ended December 31, 2022, representing a 6.3% decrease from RMB141.6 million for the same period in 2021, primarily due to (i) a decrease in general and administrative personnel’s staff cost; (ii) a decrease in allowance for credit loss in relation to accounts receivables; and (iii) an increase in depreciation expenses for new buildings.

Net loss was RMB216.2 million (US$31.4 million) for the three months ended December 31, 2022, compared to RMB251.1 million for the same period in 2021.

Cash, cash equivalents, restricted cash and short-term investments were RMB925.3 million (US$134.2 million) as of December 31, 2022.

Full Year 2022 Financial Results

Revenues were RMB563.2 million (US$81.7 million) for 2022, representing a 10.9% increase from RMB507.9 million for 2021.

Revenue generated from central laboratory business was RMB314.8 million (US$45.6 million) for 2022, remaining relatively stable compared to RMB319.4 million for 2021.Revenue generated from in-hospital business was RMB175.3 million (US$25.4 million) for 2022, representing a 6.2% increase from RMB165.1 million for 2021, primarily due to (i) increased demand from existing hospitals and (ii) demand from eight new contracted partner hospitals added to the Company’s in-hospital channel in 2022.Revenue generated from pharma research and development services was RMB73.2 million (US$10.6 million) for 2022, representing a 212.8% increase from RMB23.4 million for 2021, primarily attributable to increased development and testing services performed for our pharma customers.

Cost of revenues was RMB183.2 million (US$26.6 million) for 2022, representing a 27.5% increase from RMB143.7 million for 2021, primarily due to an increase in cost of revenues for our in-hospital business and pharma research and development services.

Gross profit was RMB380.0 million (US$55.1 million) for 2022, representing a 4.4% increase from RMB364.1 million for 2021. Gross margin decreased to 67.5% for 2022 from 71.7% for 2021.

Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB411.0 million (US$59.6 million) for 2022, representing a 11.6% increase from RMB368.2 million for 2021. Non-GAAP gross margin was 73.0% for 2022, compared to 72.5% for 2021.

Operating expenses were RMB1,360.4 million (US$197.2 million) for 2022, representing a 17.2% increase from RMB1,161.2 million for 2021.

Research and development expenses were RMB421.9 million (US$61.2 million) for 2022, representing a 14.7% increase from RMB367.9 million for 2021, primarily due to (i) an increase in expenditure for early cancer detection research, (ii) an increase in depreciation expenses for new buildings; and (iii) an increase in amortized expense on share-based compensation.Selling and marketing expenses were RMB370.3 million (US$53.7 million) for 2022, representing a 22.2% increase from RMB303.1 million for 2021, primarily due to (i) an increase in staff cost of sales and marketing personnel in anticipation of the commercialization of our early detection products and pharma research and development services; (ii) an increase in conference fee and marketing fees; and (iii) an increase in amortized expense on share-based compensation.General and administrative expenses were RMB568.3 million (US$82.4 million) for 2022, representing a 15.9% increase from RMB490.3 million for 2021, primarily due to (i) an increase in depreciation expenses for new buildings, and (ii) an increase in allowance for credit loss in relation to accounts receivables; and (iii) an increase in amortized expense on share-based compensation.

Net loss was RMB971.2 million (US$140.8 million) for 2022, compared to RMB796.7 million for 2021.

2023 Financial Guidance

We currently expect our full year 2023 revenues to grow approximately 20% over 2022.

Silicon Valley Bank Event

The Company promptly transferred its cash deposits at Silicon Valley Bank to its accounts with other major financial institutions as a result of the Company’s regular risk assessment process. No loss was incurred to such deposits. We maintain bank accounts with a diversified set of financial institutions.

Conference Call Information

Burning Rock will host a conference call to discuss the fourth quarter and full year 2022 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on March 28, 2023.

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/BI1cc3eb383ecf42c6969319f9e9cdd02c.

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/tx2a7ju9.

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

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.

   For the three months ended    March 31,
2021 June 30,
2021 September
30, 2021 December 31,
2021 March 31,
2022 June 30,
2022 September
30, 2022 December
31, 2022Central Laboratory Channel:               Number of patients tested7,716 8,155
 7,808 8,235 7,743 8,060 7,989 6,419Number of ordering physicians(1)1,082 1,013 920 917 994 767 897 797Number of ordering hospitals(2)303 300 287 306 318 264 257 238

(1) Represents physicians who on average order at least one test from us every month during a relevant period in the central laboratory channel.
(2) Represents hospitals whose residing physicians who on average order at least one test from us every month during a relevant period in the central laboratory channel.

   As of    March
31, 2021 June 30,
2021 September
30, 2021 December
31, 2021 March
31, 2022 June
30, 2022 September
30, 2022 December
31, 2022In-hospital Channel:               Pipeline partner hospitals(1)22 22 24 23 24 25 22 28Contracted partner hospitals(2)32 34 34 41 41 43 47 49Total number of partner hospitals 54 56 58 64 65 68 69  77

(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.

Selected Financial Data

 For the three months ended
Revenues

March 31,
2021 June 30,
2021 September
30, 2021 December
31, 2021 March 31,
2022 June 30,
2022 September 30,
2022 December 31,
2022 (RMB in thousands) Central laboratory channel74,561 79,999 78,817 85,976 74,211 78,597 89,992 71,970In-hospital channel28,994 40,502 43,714 51,906 48,957 34,177 49,636 42,526Pharma research and development channel3,068 6,778 4,084 9,463 12,356 18,072 15,003 27,741Total revenues106,623 127,279 126,615 147,345 135,524 130,846 154,631 142,237    For the three months ended   Gross profitMarch 31,
2021 June 30,
2021 September
30, 2021 December 31,
2021 March 31,
2022 June 30,
2022 September
30, 2022 December
31, 2022 (RMB in thousands) Central laboratory channel55,212 58,681 58,387 65,985 50,574 57,575 69,991 54,507In-hospital channel20,070 29,426 31,111 34,194 33,396 20,012 31,593 26,999Pharma research and development channel1,658 2,124 2,098 5,200 3,610 5,015 7,010 19,757Total gross profit
76,940 90,231 91,596 105,379 87,580  82,602 108,594  101,263    For the three months ended   Share-based compensation expensesMarch 31,
2021 June 30,
2021 September
30, 2021
 December 31,
2021
 March 31,
2022 June 30,
2022 September
30, 2022 December
31, 2022 (RMB in thousands) Cost of revenues339 406 267  492  365 441 481 496Research and development expenses22,404 20,825 (9,559) (4,033) 12,299 11,923 13,978 14,673Selling and marketing expenses2,633 2,809 2,044  2,126  1,774 2,158 2,346 2,247General and administrative expenses59,382 59,369 60,803  62,126  65,715 62,615 61,041 74,232Total share-based compensation expenses
84,758 83,409 53,555  60,711  80,153 77,137 77,846  91,648

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,
2021
 June 30,
2021
 September 30, 2021
 December 31,
2021
 March 31, 2022
 June 30, 2022
 September 30, 2022
 December 31, 2022
 December 31, 2022 RMBRMBRMBRMBRMBRMBRMBRMBUS$Revenues106,623  127,279  126,615   147,345  135,524   130,846   154,631   142,237   20,622 Cost of revenues(29,683) (37,048) (35,019) (41,966) (47,944) (48,244) (46,037) (40,974) (5,940)Gross profit76,940  90,231  91,596   105,379  87,580   82,602  108,594  101,263   14,682  Operating expenses:         Research and development expenses(77,414) (108,071) (69,649) (112,724) (119,496) (92,112) (109,433) (100,827) (14,619)Selling and marketing expenses(55,130) (68,058) (76,687) (103,221) (89,211) (105,634) (90,275) (85,174) (12,349)General and administrative expenses(116,259) (116,130) (116,304) (141,563) (141,733) (150,316) (143,530) (132,705) (19,240)Total operating expenses(248,803 ) (292,259) (262,640) (357,508) (350,440) (348,062) (343,238) (318,706) (46,208)Loss from operations (171,863 ) (202,028) (171,044) (252,129) (262,860) (265,460) (234,644) (217,443) (31,526)Interest income787  681  958  1,031  1,832  2,685  2,001  2,838  411 Interest expenses(510) (565) (367) (94) 119  (29) 12  –  – Other income (expense), net118  433  20  (372) 298  127  (189) (84) (12)Foreign exchange gain (loss), net57  (560) 380  (731) (777) 624  1,337  365  53 Loss before income tax(171,411 ) (202,039) (170,053) (252,295) (261,388) (262,053) (231,483) (214,324) (31,074)Income tax (expenses) benefits-  (1,626) (424) 1,151  –  (84) –  (1,901) (276)Net loss(171,411 ) (203,665) (170,477) (251,144) (261,388) (262,137) (231,483) (216,225) (31,350)Net loss attributable to Burning Rock Biotech Limited’s shareholders(171,411) (203,665) (170,477) (251,144) (261,388) (262,137) (231,483) (216,225) (31,350)Net loss attributable to ordinary shareholders(171,411 ) (203,665) (170,477) (251,144) (261,388) (262,137) (231,483) (216,225) (31,350)Loss per share for class A and class B ordinary shares:         Class A ordinary shares – basic and diluted(1.65) (1.96) (1.64) (2.40) (2.50) (2.50) (2.23) （2.11） （0.31）Class B ordinary shares – basic and diluted(1.65) (1.96) (1.64) (2.40) (2.50) (2.50) (2.23) （2.11） （0.31）Weighted average shares outstanding used in loss per share computation:          Class A ordinary shares – basic and diluted86,721,263  86,764,260  86,908,975  87,128,297  87,179,752  87,532,539  86,585,322  85,051,882  85,051,882 Class B ordinary shares – basic and diluted17,324,848  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 income (loss), net of tax of nil:         Foreign currency translation adjustments14,080  (34,980) 6,146  (24,726) (3,065) 29,715  20,646  (5,950) (863)Total comprehensive loss(157,331 ) (238,645) (164,331) (275,870) (264,453) (232,422) (210,837) (222,175) (32,213)Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders(157,331) (238,645) (164,331) (275,870) (264,453) (232,422) (210,837) (222,175) (32,213)

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,
2021
 December 31,
2022
 December 31,
2022
 RMBRMBUS$Revenues507,862  563,238   81,662 Cost of revenues (143,716) (183,199) (26,561)Gross profit 364,146  380,039   55,101 Operating expenses:   Research and development expenses(367,858) (421,868) (61,165)Selling and marketing expenses(303,096) (370,294) (53,688)General and administrative expenses(490,256) (568,284) (82,393)Total operating expenses (1,161,210
) (1,360,446) (197,246)Loss from operations (797,064) (980,407) (142,145)Interest income3,457  9,356  1,356 Interest expenses(1,536) 102  15 Other income, net199  152  22 Foreign exchange loss, net(854) 1,549  225 Loss before income tax(795,798) (969,248) (140,527)Income tax expenses(899) (1,985) (288)Net loss(796,697) (971,233) (140,815)Net loss attributable to Burning Rock Biotech Limited’s shareholders(796,697) (971,233) (140,815)Net loss attributable to ordinary shareholders(796,697) (971,233) (140,815)Loss per share for class A and class B ordinary shares:   Class A ordinary shares – basic and diluted(7.65) (9.35) (1.36)Class B ordinary shares – basic and diluted(7.65) (9.35) (1.36)Weighted average shares outstanding used in loss per share computation:    Class A ordinary shares – basic and diluted86,883,011  86,584,100  86,584,100 Class B ordinary shares – basic and diluted17,324,848  17,324,848  17,324,848 Other comprehensive income (loss), net of tax of nil:   Foreign currency translation adjustments(39,480) 41,346  5,995 Total comprehensive loss(836,177) (929,887) (134,820)Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders(836,177) (929,887) (134,820)         

Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 As of December
31, 2021 December
31, 2022 December
31, 2022 RMB RMB US$ASSETS     Current assets:     Cash and cash equivalents1,431,317 905,451 131,278Restricted cash7,795 19,817 2,873Short-term investments63,757 – -Accounts receivable, net92,197 109,954 15,942Contract assets, net42,391 41,757 6,054Inventories, net123,210 130,321 18,895Prepayments and other current assets, net60,279 51,462 7,462Total current assets1,820,946 1,258,762 182,504Non-current assets:     Equity method investment910 690 100Convertible note receivable- 5,105 740Property and equipment, net325,438 251,829 36,512Operating right-of-use assets81,007 48,205 6,989Intangible assets, net5,150 1,986 288Other non-current assets45,136 20,890 3,029Total non-current assets457,641 328,705 47,658TOTAL ASSETS2,278,587 1,587,467 230,162      

Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets (Continued)

(in thousands)

 As of December 31,
2021
 December 31,
2022
 December 31,
2022
 RMB RMBUS$LIABILITIES AND SHAREHOLDERS’ EQUITY   Current liabilities:   Accounts payable63,080  50,947  7,387 Deferred revenue142,871  147,633  21,405 Accrued liabilities and other current liabilities127,892  173,832  25,203 Customer deposits972  1,803  261 Short-term borrowing2,370  –  – Current portion of operating lease liabilities34,999  37,236  5,399 Total current liabilities372,184   411,451    59,655  Non-current liabilities:   Non-current portion of operating lease liabilities49,316  13,551  1,965 Other non-current liabilities11,776  4,124  598 Total non-current liabilities61,092   17,675    2,563  TOTAL LIABILITIES433,276   429,126    62,218  
Shareholders’ equity:   Class A ordinary shares116  117  17 Class B ordinary shares21  21  3 Additional paid-in capital4,280,956  4,582,790  664,442 Treasury stock-  (58,919) (8,542)Accumulated deficits(2,228,713) (3,199,946) (463,949)Accumulated other comprehensive loss(207,069) (165,722) (24,027)Total shareholders’ equity1,845,311  1,158,341   167,944  TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY2,278,587  1,587,467   230,162           

Burning Rock Biotech Limited

Unaudited Condensed Statements of Cash Flows

(in thousands)

 For the three months ended December 31,
2021
 December 31,
2022
 December 31,
2022 RMB RMB  US$Net cash used in operating activities(112,349) (67,707) (9,817)Net cash used in investing activities(66,970) (5,033) (730)Net cash used in financing activities(6,781) (10,074) (1,461)Effect of exchange rate on cash, cash equivalents and restricted cash(24,498) (5,924) (859)Net decrease in cash, cash equivalents and restricted cash (210,598) (88,738) (12,867)Cash, cash equivalents and restricted cash at the beginning of period1,649,710  1,014,006  147,018 Cash, cash equivalents and restricted cash at the end of period 1,439,112   925,268   134,151        For the year ended December 31,
2021
 December 31,
2022
 December 31,
2022 RMB RMBUS$Net cash used in operating activities(477,886) (456,808) (66,231)Net cash generated from (used in) investing activities81,697  (7,463) (1,082)Net cash used in financing activities(52,899) (86,238) (12,503)Effect of exchange rate on cash, cash equivalents and restricted cash(37,006) 36,665  5,316 Net decrease in cash, cash equivalents and restricted cash (486,094) (513,844) (74,500)Cash, cash equivalents and restricted cash at the beginning of period1,925,206  1,439,112  208,651 Cash, cash equivalents and restricted cash at the end of period 1,439,112   925,268   134,151  

Burning Rock Biotech Limited

Reconciliations of GAAP and Non-GAAP Results

  For the three months ended   March 31,
2021
 June 30,
2021  September
30, 2021  December 31,
2021  March 31,
2022  June 30,
2022  September
30, 2022  December
31, 2022   (RMB in thousands) Gross profit:    Central laboratory channel55,212 58,681 58,387 65,985 50,574 57,575 69,991 54,507In-hospital channel20,070 29,426 31,111 34,194 33,396 20,012 31,593 26,999Pharma research and development channel1,658 2,124 2,098 5,200 3,610 5,015 7,010 19,757Total gross profit76,940 90,231 91,596 105,379 87,580  82,602 108,594 101,263Add: depreciation and amortization:         Central laboratory channel117 284 1,254 995 2,553 2,545 3,138 3,609In-hospital channel79 113 109 130 93 1,428 2,479 2,449Pharma research and development channel10 40 19 856 2,493 4,327 2,805 3,065Total depreciation and amortization included in cost of revenues
206   437   1,382   1,981   5,139   8,300  8,422  9,123 Non-GAAP gross profit：        Central laboratory channel55,329 58,965 59,641 66,980 53,127 60,120 73,129 58,116In-hospital channel20,149 29,539 31,220 34,324 33,489 21,440 34,072 29,448Pharma research and development channel1,668 2,164 2,117 6,056 6,103 9,342 9,815 22,822Total non-GAAP gross profit 77,146   90,668   92,978   107,360   92,719  90,902 117,016 110,386 Non-GAAP gross margin：        Central laboratory channel74.2% 73.7% 75.7% 77.9% 71.6% 76.5% 81.3% 80.8%In-hospital channel69.5% 72.9% 71.4% 66.1% 68.4% 62.7% 68.6% 69.2%Pharma research and development channel54.4% 31.9% 51.8% 64.0% 49.4% 51.7% 65.4% 82.3%Total non-GAAP gross margin72.4% 71.2% 73.4% 72.9% 68.4% 69.5% 75.7% 77.6%

Burning Rock Biotech Limited

Reconciliations of GAAP and Non-GAAP Results

 For the year ended
 December 31,
2021
December 31,
2022 (RMB in thousands)
RMBGross profit:
  Central laboratory channel238,265232,647In-hospital channel114,801112,000Pharma research and development channel11,08035,392Total gross profit
364,146 380,039 Add: depreciation and amortization:   Central laboratory channel2,65011,845In-hospital channel4316,449Pharma research and development channel92512,690Total depreciation and amortization included in cost of revenues
4,006 30,984 Non-GAAP gross profit：  Central laboratory channel240,915244,492In-hospital channel115,232118,449Pharma research and development channel12,00548,082Total non-GAAP gross profit 368,152 411,023 Non-GAAP gross margin：  Central laboratory channel75.4%77.7%In-hospital channel69.8%67.6%Pharma research and development channel51.3%65.7%Total non-GAAP gross margin72.5%73.0%