Burning Rock Reports Fourth Quarter and Full Year 2023 Financial Results

2024-03-28

财报临床3期突破性疗法

GUANGZHOU, China, March 28, 2024 (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, 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 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.

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.

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.

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

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.

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 channel74,211 78,597 89,992 71,970 61,804 66,239 53,481 51,288 In-hospital channel48,957 34,177 49,636 42,526 51,561 53,835 54,496 28,809

Pharma research and development channel12,356 18,072 15,003 27,741 29,151 26,194 19,589 40,988 Total revenues135,524 130,846 154,631 142,237 142,516 146,268

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 channel50,574 57,575 69,991 54,507 48,090 51,876 41,487 41,886

In-hospital channel33,396 20,012 31,593 26,999 34,409 33,353 35,459 12,910

Pharma research and development channel3,610 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 revenues365 441 481 496 353 627 680 654

Research and development expenses12,299 11,923 13,978 14,673 13,612 15,301 12,161 12,401 Selling and marketing expenses1,774 2,158 2,346 2,247 1,606 3,389 2,848 1,816 General and administrative expenses65,715 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

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 RMBRMBRMBRMBRMBRMBRMBRMBUS$Revenues135,524 130,846 154,631 142,237 142,516 146,268 127,566 121,085 17,054 Cost of revenues(47,944) (48,244) (46,037) (40,974) (43,744) (45,846) (41,646) (42,972) (6,052) Gross profit87,580 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 income1,932 2,656 2,013 2,838 3,144 5,255 4,018 5,539 780 Other income (expense), net298 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 diluted87,179,752 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 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 (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)

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 RMBRMBUS$Revenues563,238 537,435 75,696 Cost of revenues(183,199) (174,208) (24,536) Gross profit380,039 363,227 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 income9,356 17,956 2,529 Interest expenses102 - - Other income, net152 484 68 Foreign exchange gain (loss), net1,549 (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 diluted86,584,100 85,071,691 85,071,691 Class B ordinary shares - basic and diluted17,324,848 17,324,848 17,324,848 Other comprehensive income, net of tax of nil: Foreign currency translation adjustments41,346 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)

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 equivalents905,451 615,096 86,634 Restricted cash19,817 120 17 Accounts receivable, net109,954 126,858 17,868 Contract assets, net41,757 22,748 3,204 Inventories, net130,321 69,020 9,721 Prepayments and other current assets51,462 50,254 7,078 Total current assets 1,258,762 884,096 124,522 Non-current assets: Equity method investment690 337 47 Convertible note receivable5,105 5,320 749 Property and equipment, net251,829 131,912 18,579 Operating right-of-use assets48,205 12,284 1,730 Intangible assets, net1,986 964 136 Other non-current assets20,890 5,088 717 Total non-current assets 328,705 155,905 21,958 TOTAL ASSETS 1,587,467 1,040,001 146,480

Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets (Continued)

(in thousands) As of December 31,

2022 December 31,

2023 December 31,

2023 RMB RMBUS$LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable50,947 18,061 2,544 Deferred revenue147,633 130,537 18,386 Accrued liabilities and other current liabilities173,832 104,935 14,780 Customer deposits1,803 1,197 169 Current portion of operating lease liabilities37,236 8,634 1,216 Total current liabilities 411,451 263,364 37,095 Non-current liabilities: Non-current portion of operating lease liabilities13,551 3,690 520 Other non-current liabilities4,124 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 shares117 116 16 Class B ordinary shares21 21 3 Additional paid-in capital4,582,790 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’ equity1,158,341 768,410 108,229 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY1,587,467 1,040,001 146,480

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 RMBUS$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 period1,014,006 636,749 89,684 Cash, cash equivalents and restricted cash at the end of period925,268 615,216 86,651

For the year ended December 31, 2022December 31, 2023December 31, 2023 RMB RMBUS$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 cash36,665 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 period1,439,112 925,268 130,321 Cash, cash equivalents and restricted cash at the end of period925,268 615,216 86,651

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 channel50,574 57,575 69,991 54,507 48,090 51,876 41,487 41,886 In-hospital channel33,396 20,012 31,593 26,999 34,409 33,353 35,459 12,910 Pharma research and development channel3,610 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 channel2,553 2,545 3,138 3,609 2,567 2,645 2,550 2,414 In-hospital channel93 1,428 2,479 2,449 2,582 2,637 2,751 2,728 Pharma research and development channel2,493 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 channel53,127 60,120 73,129 58,116 50,657 54,521 44,037 44,300 In-hospital channel33,489 21,440 34,072 29,448 36,991 35,990 38,210 15,638 Pharma research and development channel6,103 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 channel71.6% 76.5% 81.3% 80.8% 82.0% 82.3% 82.3% 86.4% In-hospital channel68.4% 62.7% 68.6% 69.2% 71.7% 66.9% 70.1% 54.3% Pharma research and development channel49.4% 51.7% 65.4% 82.3% 69.5% 72.0% 65.5% 66.2% Total non-GAAP gross margin68.4% 69.5% 75.7% 77.6% 75.7% 74.8% 74.5% 71.9%

Burning Rock Biotech Limited

Reconciliations of GAAP and Non-GAAP Results For the year ended

December 31,

2022 December 31,

2023 (RMB in thousands)

RMBGross profit:

Central laboratory channel232,647 183,339 In-hospital channel112,000 116,131 Pharma research and development channel35,392 63,757 Total gross profit

380,039 363,227 Add: depreciation and amortization: Central laboratory channel11,845 10,176 In-hospital channel6,449 10,699 Pharma research and development channel12,690 15,310 Total depreciation and amortization included in cost of revenues

30,984 36,185 Non-GAAP gross profit： Central laboratory channel244,492 193,515 In-hospital channel118,449 126,830 Pharma research and development channel48,082 79,067 Total non-GAAP gross profit 411,023 399,412 Non-GAAP gross margin： Central laboratory channel77.7% 83.1%In-hospital channel67.6% 67.2%Pharma research and development channel65.7% 68.2%Total non-GAAP gross margin73.0% 74.3%