Commitments and Contingencies

12 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Non-cancelable Purchase Obligations

In the normal course of business, the Company enters into agreements containing non-cancelable purchase commitments for goods or services with various parties, which include agreements to purchase goods or services that are enforceable and legally binding to the Company. Recognition of purchase obligations occurs when products or services are delivered to the Company, generally within accounts payable, or accrued and other current liabilities. As of March 31, 2024, the Company had outstanding non-cancelable purchase obligations with a term of 12 months or longer that have not been recognized on its balance sheet as follows:


	As of March 31, 2024
	(in thousands)
Fiscal years ending March 31,
2025	$	11,740
2026	3,458
2027	1,900



Total	$	17,098

The amounts purchased under agreements with non-cancelable purchase obligations with a term of 12 months or longer were $26.2 million, $29.9 million and $34.7 million for the fiscal years ended March 31, 2024, 2023 and 2022, respectively.

Legal Matters

Cybersecurity Incident

On October 10, 2023, the Company reported that certain information was accessed from individual 23andMe.com accounts without the account users’ authorization (the “incident”).

The Company incurred $4.6 million in expenses related to the incident, offset by $2.8 million of probable insurance recoveries, during the fiscal year ended March 31, 2024, primarily consisting of technology consulting services, legal fees, and expenses of other third-party advisors. While the Company believes the investigation into this incident is complete, the Company may become aware of new or different information or information that differs from that contained in these financial statements.

As a result of the incident, multiple class action claims have been filed against the Company in federal and state courts in California, as well as in other U.S. and international jurisdictions, and the Company has received demand letters from attorneys purporting to represent customers seeking arbitration claims. The Company is also responding to inquiries from various governmental officials and agencies. Although the federal class action claims have been consolidated, as of the filing date of these financial statements, a lead plaintiffs’ counsel has not yet been appointed and the initial status conference for the consolidated case is scheduled for June 3, 2024.

The Company believes that a loss contingency related to this incident is reasonably possible and estimates that the low-end of the range of possible loss, net of probable insurance recoveries would be immaterial as of March 31, 2024. Given the litigation is at an early stage, the Company cannot reliably estimate the upper end of the range of possible loss that may be incurred, which may be material. The Company will continue to evaluate information as it becomes known, and it is possible that future results of operations or cash flows for any particular interim or annual period could be materially affected by unfavorable resolutions of this matter.

Indemnification

The Company enters into indemnification provisions under agreements with other companies in the ordinary course of business, including, but not limited to, collaborators, landlords, vendors, and contractors. Pursuant to these arrangements, the Company agrees to indemnify, defend, and hold harmless the indemnified party for certain losses suffered or incurred by the indemnified party as a result of the Company’s activities. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the fair value of these provisions is not material. The Company maintains insurance, including commercial general liability insurance and product liability insurance, to offset certain potential liabilities under these indemnification provisions. In addition, the Company indemnifies its officers, directors, and certain key employees against claims made with respect to matters that arise while they are serving in their respective capacities as such, subject to certain limitations set forth under applicable law, the Company’s Bylaws, and applicable indemnification agreements. As of March 31, 2024, the Company was not aware of any known events or circumstances that have resulted in a material claim related to these indemnification obligations.