Fulgent Genetics Inc (FLGT) 2020 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2020 Fulgent Genetics Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the call over to your host, Ms. Nicole Borsje with Investor Relations. Please go ahead, ma'am.

Great. Thanks. Good afternoon, and welcome to the Fulgent Genetics Second Quarter 2020 Financial Results Conference Call. On the call today is Ming Hsieh, Chief Executive Officer; Paul Kim, Chief Financial Officer; and Brandon Perthuis, Chief Commercial Officer.

The company's press release discussing its financial results is available in the Investor Relations section of the company's website, fulgentgenetics.com. An audio replay of this call will be available shortly after the call concludes. Please visit the Investor Relations section of the company's website to access the audio replay.

Management's prepared remarks and answers to your questions on today's call will contain forward-looking statements. These forward-looking statements represent management's estimates based on current views and assumptions, which may prove to be incorrect. As a result, matters discussed in any forward-looking statements are subject to risks, uncertainties and changes in circumstances that may cause actual results to differ from those described in the forward-looking statements.

The company assumes no obligation to update any of the forward-looking statements it may make today to reflect actual results or changes in expectations. Listeners should not rely on any forward-looking statements as predictions of future events and should listen to management's remarks today with the understanding that actual events, including the company's actual future results, may be materially different in what is described in or implied by these forward-looking statements.

Please review the more detailed discussions related to these forward-looking statements, including the discussion of some of the risk factors that may cause results to differ from those described in these forward-looking statements contained in the company's filings with the Securities and Exchange Commission, including the previously filed 10-Q for the quarter ended March 31, 2020, which is available on the company's Investor Relations website.

Management's prepared remarks, including discussions of earnings and earnings per share, contain financial measures not prepared in accordance with accounting principles generally accepted in the United States or GAAP. Management has presented these non-GAAP financial measures because it believes they may be useful to investors for various reasons, but they should not be viewed as a substitute for or superior to the company's financial results prepared in accordance with GAAP.

Please see the company's press release discussing its financial results for the second quarter of 2020 for more information, including the description of how the company calculates non-GAAP earnings and earnings per share and a reconciliation of these financial measures to income and income per share, the most directly comparable GAAP financial measures.

With that, I'd now like to turn the call over to Ming.

Thank you, Nicole. Good afternoon, and thank you for joining our call today to discuss our second quarter 2020 results. I will review the highlights from our second quarter before handling you over to our Chief Commercial Officer, Brandon Perthuis, to provide an update on our commercial success and go-to-market strategies. And finally, Paul will discuss our financial results and outlook in detail.

Before I comment on our market strategy and business, I first want to start by saying our hearts goes to those who have been impacted by the COVID-19. We are in this together, and we are doing as much as we can to address this pandemic by offering our service, which are critical for detection and follow point of care, enable isolation and prevent further spread and provide contact and tracing information to enable authorities to implement coordinated policies.

The unforeseen demands of this year have brought the need for testing capacity into the public spotlight more than ever. Moreover, the urgency of this pandemic has pushed the limit of testing capacities across our industry. Specifically, organizations have been challenged to research and develop new integrated testing capabilities under compressed timeline while navigating the FDA approval process and scaling production on an accelerated timetable with new public health and social distancing mandates in mind. Ultimately, many companies across our industry have gone through this process to serve the greater need for the public health solutions by both governmental and commercial customers.

These same unforeseen events have also proven who Fulgent is as a company. We are a technology company with a proprietary technology platform built for massive scale. For those who have been following us from the years, we have said at the onset that our technology platform is a differentiator between ourselves and other companies in the industry. And this is now being shown in our financial and operational results. With a short time frame and a minimum investment, we're able to organically develop and launch multiple tests for COVID-19, received validation by the FDA on multiple tests and win major accounts, all of which has caused a major inflection point in our business and our outlook ahead.

Our second quarter reported test volume increased approximately 1,300% or 13-fold from our first quarter. And we anticipate continued accelerated growth for the second half of the year, which Paul will go over in detail from our guidance.

On our last call, we commented that our traditional genetic testing business might be down approximately 25% to 30% in Q2. However, given the incremental business we saw from signing additional strategic customers in the quarter and rapid rebound from our existing customers during the month of June, volume ordered from our core business in Q2 was flat versus what we saw in Q1. Even with the uncertainty regarding lockdown throughout the various states, our traditional business continued to gain momentum in July, and we anticipate a healthy growth in the second half of 2020.

Our COVID-19 business has surpassed our most optimistic expectations due to the large and growing need for testing. Our quality, ability to meet and exceed customer expectations is enabling us to be an essential part of the programs and the initiatives by large organizations. We saw countless opportunities with these customers beyond COVID-19 in a wide variety of markets. They use our technology and service platforms.

I want to spend a few minutes to address the uniqueness of our technology platform, which is based on the technology from the high-throughput computing software industry. The core software team has extensive experience in developing innovative algorithms for processing power and database management. These highly complex algorithms are the core of our technology. The key engineering team is further working in the field of artificial intelligence, utilizing innovative hyper pipeline and massive computing architecture, apply data flow technology, enable high-speed computing, which is easily scalable. The team is also [well-versed] in information fusion technology, which integrates data mining and fusion.

Fusion technology includes system integration tools and techniques to integrate information from large and disparate systems. Fusion technology uses deep learning technology in advanced workflow and architecture to develop customer workflow and seamless integration of the customers' IT environment. With our technology in software engineering, fusion developed its technology platform for health care industry. Recent unforeseen events of COVID-19 and overwhelming demand for our service has the strength of our technology platform. And we are very, very pleased with the results.

We have rapidly developed and launched a test with one major customer who's seen benefit of our platform in providing greater automation, security, reliability, quality and efficiency. We have scaled up our operation from approximately 15,000 tests per quarter to 180,000 in Q2 and on track to reach over 700,000 in each coming quarters.

Our technology is now the cornerstone for all facets of our business, including cloud computing, pipeline service, record management, web portal service, clinical workflow, sequencing-as-a-service and alternate library information management system. In addition to our superior technology, we have a great team that has enabled us to succeed in this challenging environment. We have a technology team who have prior experience in developing and servicing numerous contracts exceeding $100 million each in previous time of global crisis during the attack of 9/11 in 2001.

We also have a management team who are experienced operators and have scaled the business prior to Fulgent. Our headcount has grown from almost 150 people at the beginning of 2020 to over 300 people today. We have been able to digest higher demand for our services by leaning on senior business operators who can successfully orchestrate supply chain management, operational logistics, quality control, data security and intensive customer expectations in the time of crisis and shortage.

As evidenced by our volume, we made material strides in our operation capabilities, including capacity. We also broadened our go-to-market strategy with the launch of COVID-19 at-home test. In addition, we received multiple EUAs from FDA during the quarter, have multiple EUAs pending, and more EUA applications will be filed in the near future. Moreover, we are making greater traction in the reimbursement market, which should also help fuel our traditional genetic NGS business.

I will now turn over the call to Brandon, who will cover these areas in further detail. Brandon?

Thanks, Ming. This quarter, more than ever, we've demonstrated the power of the Fulgent technology platform, and we've played a meaningful role in the fight against the COVID-19 pandemic. At this time, we've received 2 EUAs from the FDA: one for our RT-PCR test, which is administered by providers; and a second for our at-home COVID-19 test, Picture by Fulgent, which we launched in June. We have additional EUAs pending, and we'll issue updates as they become available.

At this time, Fulgent has an impressive array of COVID-19 customers with some of the largest municipalities in the United States to Fortune 100 companies, large specialty care companies with thousands of locations, large hospital systems with hundreds of locations, assisted living facilities across the United States and many more. In addition, we recently just won a competitive RFP to provide testing for student athletes for a major NCAA conference.

Clients are choosing Fulgent because we have EUA approval; our turnaround time is consistently among the top in our industry, with a median time frame and delivery of reports within 24 hours of receipt of the sample; the availability of our custom COVID-19 portal for bulk ordering and reporting; and our rapid ability to interface the HL7, API or other methods. As an example of the latter, we were able to interface with large municipalities in less than 3 days. We now have numerous clients sending thousands of COVID-19 samples per day and still have the bandwidth to serve small clinics in addition to these large organizations.

Operationally, it's been an impressive overhaul. We are now running 24 hours a day, 7 days a week. As Ming mentioned, we've doubled our company headcount in the last 3 months to over 300. We've scaled COVID-19 capacity from a couple of thousand tests per day to 10,000 per day and now 30,000 per day. Our plan is continue to scale to meet the existing and future demand for testing.

To support this capacity, we have secured guaranteed contracts with key suppliers. While managing such a dynamic supply chain has been a challenge, we've had 0 supply chain constraints as a result of our contract and strong relationships with our vendors. We have accomplished this while still maintaining and delivering one of the largest genetic testing menus in the industry, now over 18,000 tests strong.

A challenging area that our high-volume customers have identified have been managing the logistics and the reporting. This has been the case for drive-through testing sites as well as large corporations who want to do routine testing of their employees. To help our clients and to allow Fulgent to be a more integrated part of the process, we have rolled out 3 end-to-end web-based solutions.

The first solution is Fulgent Community COVID-19 platform. This is a complete solution for managing drive-through and walk-up testing sites from the patients visiting our website, picking a location, scheduling an appointment, completing test questionnaire, et cetera. This new solution allows the administrators of the site to set the number of lanes, the number of available time slots and manage the collection process. On the back end, we are a reporting solution that delivers reports directly to patients' mobile phones. This also includes heat maps and contact tracing functionality. To date, San Bernardino County, Los Angeles County, the city of Long Beach, Santa Clara County and Orange County are all using this new platform to run their drive-through and walk-up testing sites.

The second solution is the Fulgent Enterprise COVID-19 screening platform. This is an end-to-end solution for companies who want to do routine repeat testing. We have built a solution where Fulgent provides locations with our new platform, a barcode scanner, pre-barcoded tubes and collection materials. An employee can simply approach the testing station, scan their employee badge or other identifier, self-administer a simple nasal swab and drop into a collection box to be sent to Fulgent. A mobile version of this solution is also available, which allows the same operation to be completed using mobile device either online or offline. 24 hours later, the reports are electronically delivered to the employees.

The third solution is Picture COVID-19 for partners. This solution is based on the FDA EUA home collection COVID-19 test. Organizations can order Picture COVID-19 tests in bulk, and they can manage the bulk order and results via the Picture COVID-19 partner portal. This solution is particularly suited for schools where students need to be tested before returning to campus.

We believe these solutions are powerful examples of our technology platform and our ability to rapidly develop new solutions and products. We look forward to using these platforms to drive deep relationships with our clients.

The demand for COVID-19 services is strong, and the pipeline for additional customers is quite remarkable. In addition to our clinical COVID-19 clients, we are seeing traction for our Picture at-home COVID-19 test. Patients are appreciating the convenience of an at-home test, and it's a great resource to conserve valuable physician time and PPE.

We initially launched this service at $119 cash price. However, we have recently started to accept insurance and are only charging $39 out of pocket, which covers the cost of the kit and the bidirectional shipping. This new insurance component includes an upfront automated verification of benefits, and is integrated with our revenue cycle management system for simplified filing of insurance claims. This is yet another example of how the integrated Fulgent technology platform drives efficiencies across our entire organization. We believe this reduced price and the convenience factor will drive continued adoption.

In addition to COVID-19 testing, we continue to offer multiple tests through our Picture platform, including Picture Newborn, an expanded newborn screening product; Picture Parenting, a carrier test for those looking to start or add to their family; and Picture Wellness, a test for those who want to learn more about their genes linked to medically actionable conditions. We see Picture as a platform to make genetic testing easier and faster to access, and we believe it will be a powerful delivery model in the future.

Over the last few months, much has changed regarding our go-to-market strategy but it has been incremental to the business and focus we have had over the last year. During Q2, we added significant number of new accounts for rare disease, reproductive health, hereditary cancer and cardiovascular genetics. These new opportunities are a result of our increased commercial strength, rapidly expanding test menu and competitive pricing and turnaround times.

As Ming mentioned, even with the unprecedented disruption our country has faced, our core business orders were essentially flat with Q1 as a result of the rebound in orders in June and the addition of several new accounts. And with our increased customer base and opportunities, we expect a return to growth in the traditional genetic testing business as the country continues to slowly reopen.

The other area of our business that continues to gain momentum is our sequencing-as-a-service. This has also seen a boost from COVID-19 next-generation sequencing test as many organizations look to sequence the genome of SARS-CoV-2.

We also see material positive developments on the reimbursement coverage from commercial payers. And this is being driven by the validation of our test, quality of offerings, push recovery by our customers, tremendous volume trajectory in our business and capabilities. Over the coming months, we will remain laser-focused on delivering quality COVID-19 testing, expanding our COVID-19 capabilities and maintaining a 24-hour turnaround time while continuing to expand our non-COVID-19 business with the acquisition of new clients, expanded test usage from existing genetic testing clients, leveraging our expanded go-to-market strategy, including at-home testing, and additional coverage from commercial insurance payers.

I'll now turn the call over to Paul to provide the details on our financial performance in the second quarter as well as provide an update on our outlook. Paul?

Thanks, Brandon. Second quarter revenues totaled $17.3 million, an increase of 105% compared to the second quarter of 2019. Our U.S. business remains the most significant driver of our momentum. Revenues from the U.S. grew 141% year-over-year in the second quarter, representing 93% of total revenues in the quarter.

Billable tests in the quarter totaled 180,500, growing 1,003% over Q2 of last year. The vast majority of the volume was our business related to COVID-19. Our ASP in the quarter was $96, decreasing 84% from the first quarter. Cost per test for the quarter was $43 on a GAAP basis and $41 excluding equity-based compensation of $270,000.

Our gross margin improved 8 points sequentially, and non-GAAP gross margin improved 6 percentage points sequentially. The primary reasons for the decrease in cost per test were due to the heavy mix of COVID-19 volume. However, even with the heavy investment in our operations, including equipment, personnel, our gross margins improved notably from the prior quarter due to the utilization of our technology platform.

Now turning to operating expenses, non-GAAP operating margin improved approximately 34 percentage points to a sequentially -- to positive 21.5%. Though we made aggressive investments across the board in all facets of our organization, including operations, sales, marketing and G&A, the power of our technology platform proved to be extreme leverage within our business model. We believe this leverage is just the beginning of what's in store for the remainder of the year.

Our total GAAP operating expenses were $6.9 million for the second quarter, up from $5.6 million in the first quarter. Non-GAAP operating expenses totaled $6.1 million, up from $4.9 million in the last quarter. In a single quarter, we have already fully recovered the investments that we've made in our COVID-19 test research, development and offering. And since the beginning of the year, we look forward to the handsome returns on these investments going forward.

Adjusted EBITDA for the second quarter was $4.3 million compared to $1.5 million in the second quarter of 2019. On a non-GAAP basis and excluding equity-based compensation expense, income for the quarter was $4 million or $0.17 per share based on a 22.9 million weighted average diluted common shares outstanding.

Turning to the balance sheet, we remain comfortable with our cash and liquidity position. We ended the second quarter with $66.4 million in cash, cash equivalents and marketable securities with no debt.

Now moving on to our outlook, we see this quarter as an inflection point in our overall business. We see the strength in our traditional genetic testing and opportunities in sequencing-as-a-service business. We see good traction from reimbursement, and we see high demand for our Picture platform. And we see very high demand for our COVID products and services. Most of all, we are seeing our customers appreciating our clear differentiation by the application of our technology platform.

We made overall testing more affordable with average ASPs now below $100. Combined with our robust offering and quality, which is creating more demand, and due to our technology platform, we're able to exponentially ramp up capacity, maintain turnaround time within 24 hours and operate a business which is generating returns for the shareholders. As Ming mentioned, the recent global crisis has stress-tested the viability of many business models, and the same stress has elevated Fulgent technology and science to the forefront as a shining differentiator.

Based on the explosive demand we're seeing from the market and the quality of our customers, we continue to see the upward trajectory and transformation of our business continuing for the balance of 2020. We now project test volumes for the year to be over 1.3 million, which translates into over $120 million in revenues. With the extreme leverage in our model, that translates into expanding GAAP net income, and excluding stock-based compensation, that is non-GAAP income of approximately $25 million or approximately $1 per share for our shareholders in fiscal 2020.

Because of the transfer rates of expansion of our business and our expected outlook ahead, we recently entered into a purchase agreement for a 62,000 square foot building for approximately $15.4 million in El Monte. This building is on the same street and less than a mile away from our Temple City building. For several years, we have leased a few floors in the El Monte location for our software engineering and administrative departments. So we're very familiar with this building.

With more than double the space of our Temple City building, the extra room and configuration should bolster capacity and efficiency in our operations by a factor of at least 200% compared to our Temple City building, translating into an eventual 60,000 tests per day in total. We will maintain our lab in Temple City, which currently has a capacity of 30,000 tests per day. Hence, the El Monte building will be an expansion of our footprint in the Los Angeles area.

Aside from our previous experience -- as an aside from our previous experience as business operators, Ming, myself and our COO have been through a similar situation at our prior company, Cogent Inc. Post events of 9/11, we utilized software to differentiate and leverage our business in a time of crisis and stress. We implemented numerous systems for global clients, well in excess of $100 million per implementation. We had 20-plus quarters of profits and returns for that business, consistently delivering operating margins of approximately 25% to 30%, which generated over $0.25 billion of cash to our balance sheet at that former company.

As a final note, we appreciate our patient shareholders who have had faith in us over the last 4 years since going public. And we look forward to sharing updates to our business in the future quarters.

Thank you for joining our call today. Operator, you can now open it up for questions.

(Operator Instructions) Your first question comes from the line of Sung Ji Nam with BTIG.

Congratulations on a phenomenal quarter, and also thank you for everything you guys are doing around COVID testing. Maybe just a few questions on COVID testing. Was curious about just the different offerings you have, the 3 end-to-end web-based solutions. As you look out for the balance of the year and beyond, how do you see those -- the mix of the 3 different types of, I guess, sources for testing opportunities? Will it be a pretty evenly split situation? Or do you anticipate more volumes through one of those more than others?

Brandon, why don't you take the COVID first?

Yes, certainly. Thank you, Sung Ji. It's a great question. We actually probably have more than 3 different options at this point. But let's focus on sort of the 3 main modalities, which is sort of the professionally administered test like from a household or a clinic, the drive-throughs and the walk-ups, and the at-home testing, and we'll add sort of the back-to-school and back-to-work programs.

So currently, we're seeing a lot of volume from the drive-through testing facilities, which are being run amazingly by these municipalities and giving a lot of people access to the testing they need. But looking forward, as the country continues to reopen, we're seeing tremendous demand and necessity for back-to-work and back-to-school testing. So we've actually developed 2 platforms to assist that.

Here at Fulgent, we test our employees every day on one of those platforms. It's extremely convenient. So I think the back-to-work and the back-to-school is probably going to be one of the larger growth areas for COVID-19 testing going forward. We think that's incredibly important to continue to fight this pandemic for contact tracing, for monitoring. We're seeing large corporations that want to test their employees once a week, sometimes 3 times a week. And these solutions that we've built make it so easy for them to do that. You walk up to a test station, scan your employee badge, scan the tube, swab yourself, walk away. Less than a minute per employee.

So I think we're really excited to continue to help with the back-to-work and the back-to-school, helping our teachers, helping our students. And let's maybe turn back to Ming if he has any additional comments.

I think in addition, we do offer the IgG, IgM serology-type test for the laboratories. We also continue to enhance our NGS capabilities for the research organizations as well as the pharmaceuticals. So we see a lot of opportunities ahead of us in the pandemic to fighting this pandemic. Of course, we continue adding our capabilities, and we will update the Wall Street about our new initiatives.

Fantastic. You guys answered a lot of my questions on COVID, but maybe one follow-up on the routine testing. It sounds like there's a lot of variability in terms of how different organizations, institutions are implementing that. Is that the case in terms of -- are there a lot of variability across different routine testing strategies? Is there -- are there recommendations in terms of what's ideal? If you could kind of walk through that, that would be helpful.

Yes, that's a great question. I think there are some sort of general practice guidelines that are out there. But we're seeing a lot of variability. Some companies want to test every day. Some want to test 3 times a week, once a week. So we see some variability there.

One of the things that's really been differentiated at here at Fulgent is the fact that we do have one of the only FDA-approved at-home tests. So not only can we test the employees at their place of work, employees that work from home or perhaps employees that have tested positive in the past, if we need to mail a kit to their house for routine monitoring until they get a negative result, we can do that.

So I still think the country is trying to figure out perhaps the best testing protocol, how often to test, how to administer it. But I think most importantly, we've developed multiple different platforms and solutions to make essentially all of them much easier.

And Sung Ji, we also work with our partners. We are not the only one, we are 1 of 2, as I recall, to offer the fully end-to-end at-home test, collection, the processing and sending the results back. We also have partners. They are individually certified with their at-home test kits. And those organizations are also partnering us. We provide the back-end service. We provide the laboratory processing for several customers in that field. And Everlywell as an example, we filed the EUA application together. They do the front-end collection, we do the back-end processing.

Fantastic. And then just lastly from me -- it's great to hear about the capacity expansion given the significant demand in testing. I was wondering kind of -- I don't know if it's premature to think about it, but how do you guys see the sustainability of COVID-19 testing beyond this year? And as you are building out the capacity, are there strategies in terms of -- obviously, it sounds like there has been a pretty minimal investment on your part. But at the same time, as you look out further, are there strategies to redeploy the capacity that you have for other applications in the future? Just kind of curious what you guys are thinking at this point.

Sung Ji, that is a good question. Technology has enabled us to do many opportunities. We are ready for the -- currently the processing of the COVID-19. As the infection rate decreases, we could do similar pooling effects as some of the other large labs to try to resolve the capacity issue. Currently, we do not have capacity issues. We could be easily expanding our capacity.

A, we do not come to any single vendor in our supply chain. We do not have a material shortage. We do not have reagent short shortage issues. And as a matter of fact, majority of the reagent we produce ourselves, okay? So that's one area.

The second thing is just given the COVID-19 and this variation could come and also potential other infectious diseases coming, we have to be prepared for the worst before we figure out something better. In those events, we have a new technology. We're finding more EUAs to prepare for fighting those potential outbreaks.

But in terms of -- in general, our technology is ready. You can see that the people in this industry spend hundreds of millions of dollars trying to open up for the insurance contracts because admittedly, they are worse than the Las Vegas slot machines. At least in the slot machine, you throw $100 in, okay, for a few cycles, you come back, you still probably have $0.50 coming back. But certainly the companies in this market, you throw $100 in, you don't get anything come up. That's the fact.

But our technology during this pandemic, we have the insurance industry. They knew whose operator who can efficiently operate in this space, produce quality results and with a sustainable business model. At $70 million, we generated close to 20% operating margin. We continue to forecast our business will improve our operating management because of our technology.

So we're confident in this space. If the genetics is important and crucial to the health care industry, Fulgent Genetics will be leading the way. We are not only the leader in the technology, but we also demonstrate the business model of sustainability and give the money returns back to our shareholders, unlike the people that waste investors' money.

Fantastic; thank you so much.

(Operator Instructions) Our next question comes from the line of Steven Mah with Piper Sandler.

Great. Congratulations on the good quarter. Good stuff there. Okay. So maybe just start off with a non-COVID-19 question. But it sounds like your core genetic testing business has hung in there. It's gone back up to kind of normal levels. Has there been any disruptions with -- because I know it's this complicated testing, and you guys have hired a lot of employees. Have there been any disruptions in getting out your core genetic tests? I know there seems to be a kind of big rush to get the COVID-19 results out. But has there been any impact on the core genetic testing business?

Yes, Steven, it's a very good question. The answer is no, okay? We have been maintaining our TATs for our traditional genetics business. And we have initiated our production lines for the COVID-19-related business. We see those traditional business TATs as important as our commitment for the COVID-19-related business. Do you have anything?

No, I think your first response, Ming, was -- no, the answer is no, Steven. It hasn't. So the processes are quite a bit different, as you can imagine. And we've done a really good job automating the process in COVID-19. But the short answer is no. I mean we've continued to meet our turnaround times, continued to see a rebound in our core business, a combination of some pent-up demand and bringing on several new customers and good execution by the business and the sales team.

So the lab here is -- it's operated in just an incredibly impressive manner. I mean we did 180,000 tests in Q2 with almost no hiccups whatsoever and I think arguably the best turnaround time for COVID-19 in the United States. So I mean I'm just really proud of the lab, really proud of the operations and look forward to continuing to leverage the technology to continuing to do this type of testing.

No, that's great. And then -- okay. So maybe pivoting over to capacity. So yes, you noted that you're purchasing a new building. You said you can scale eventually to 60,000 tests per day. How long should we think about the new building getting up to in terms of getting up to speed? I know you have to get -- it has to be CLIA lab certified. Can you just give us a sense on the timing?

Yes. I'll turn it over to Paul in just a second, but I'll comment on the CLIA license. They've actually done a wonderful job expediting CLIA licenses for COVID-19 laboratories. So actually, it's just a matter of days at this point, if you have an EUA, you're doing COVID-19 testing. So I really applaud them for cutting the red tape and allowing us to get CLIA licenses in an expedited manner. But in terms of the timing of the new facility, I'll let Paul take that question.

So Steven, starting from the Temple City location, that location has a capacity of up to 30,000 tests per day. With the new El Monte building, we believe that, that has an eventual capacity of up to 60,000 tests per day. But that's not going to happen all at one time. We think that by the end of the year, we'll be able to calibrate the El Monte lab to have -- process up to 30,000 tests per day, growing to 60,000 as we calibrate and expand that lab.

Okay. No, that's helpful. And -- okay. And then on the test breakdown, I don't know if you can share this with us, but can you give us a breakdown of sort of the mix of the COVID-19 tests, RT-PCR versus at-home versus NGS?

Yes. So I'll give you a breakdown. So out of that $17.3 million, right, of revenues that we've had, we have about a 60-40 split, 60% of that being COVID and 40% -- roughly 40% being non-COVID. And then within the 60%, the vast, vast majority is RT-PCR. The at-home, the Picture, it is getting tremendous demand. We actually think that the growth for that platform might even be higher than what we see for traditional RT-PCR. And then for the NGS, we do have some business for that, but it's a very, very small piece. We think that that will grow over time as we make our capabilities known with the pharma organization.

Okay. All right. That's helpful. And then as you talk about your outlook -- and apologies, but I've had a bad connection. I think you said, Paul, you have contracts for 1.3 million tests in 2020. Did I hear that right?

No. So what you -- what -- we have secured the supply chain from all angles, right? So capacity as well as supply is not an issue for the company. As far as our outlook for the year, what we said was we project us to do over 1.3 million tests for the balance of 2020, which translates into more than $120 million of top line revenues for the company.

So in other words, if you add up Q1 and Q2, right, we did roughly $25 million of revenues. So that leaves a delta of $95 million for the year for us to make the $120 million. So we anticipate doing close to $100 million of business for Q3 -- Q3 and Q4, right, combined. And if you wanted to get a little bit more flavor on how the trajectory is going to look, at this point in time, we see Q4 being approximately 10% higher than Q3.

Okay. Okay. And on the contracts you guys are signing, school, health care facilities, can you give us a sense of how long these contracts are for?

Yes. Steven, this is Brandon. They range anywhere between 3 months to 18 months. It was a pretty large variety in there.

Okay. Okay. Yes. Yes, that makes sense. So what I've been hearing from others and that people are wanting to lock down their testing, so okay. So that makes sense. Okay. Those are all the questions I have. I appreciate you guys taking the time and congratulations again.

We have no further questions at this time. Ladies and gentlemen, this concludes today's conference. Thank you for your participation. Have a wonderful day. You may disconnect.