Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Adaptive Biotechnologies (ADPT) - ADPT currently holds a Momentum Style Score of A, indicating strong momentum potential [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4] Performance Metrics - Over the past week, ADPT shares increased by 24.56%, significantly outperforming the Zacks Medical - Biomedical and Genetics industry, which rose by 2.14% [6] - In the last month, ADPT's price change was 20%, compared to the industry's 10.14% [6] - Over the past quarter, ADPT shares rose by 8.8%, and over the last year, they surged by 160.39%, while the S&P 500 experienced declines of -5.75% and gains of 10.63%, respectively [7] Trading Volume - ADPT's average 20-day trading volume is 2,969,478 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the last two months, three earnings estimates for ADPT have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from -$0.92 to -$0.87 [10] - For the next fiscal year, two estimates have moved up, while one has been revised down [10] Conclusion - Given the strong performance metrics and positive earnings outlook, ADPT is recommended as a solid momentum pick for investors [12]

Group 1 - Shares of Adaptive Biotechnologies (ADPT) have increased by 5.1% over the past four weeks, closing at $8.81, with a mean price target of $11.14 indicating a potential upside of 26.5% [1] - The average price targets from analysts range from a low of $9 to a high of $13, with a standard deviation of $1.57, suggesting a variability in estimates; the lowest estimate indicates a 2.2% increase, while the highest points to a 47.6% upside [2] - Analysts show strong agreement in revising earnings estimates higher for ADPT, which correlates with potential stock price movements, as the Zacks Consensus Estimate for the current year has increased by 5.5% over the past month [4][12] Group 2 - ADPT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential upside in the near term [13] - The consensus price target, while not entirely reliable, suggests a positive direction for ADPT's price movement, supported by the recent upward revisions in earnings estimates [11][13]

Group 1 - Adaptive Biotechnologies (ADPT) is outperforming its peers in the Medical sector, gaining about 47% year-to-date compared to the sector's average loss of 4.8% [4] - The Zacks Rank for Adaptive Biotechnologies is 2 (Buy), indicating a positive earnings outlook and strong analyst sentiment, with a 5.5% increase in the consensus estimate for full-year earnings [3][4] - The Medical group ranks 3 within the Zacks Sector Rank, which evaluates 16 different sector groups based on the average Zacks Rank of individual stocks [2] Group 2 - Adaptive Biotechnologies is part of the Medical - Biomedical and Genetics industry, which has seen an average loss of 8% this year, further highlighting ADPT's strong performance [6] - Another outperforming stock in the Medical sector is Centene (CNC), which has gained 3.9% year-to-date, with a Zacks Rank of 2 (Buy) and a 4.4% increase in the consensus EPS estimate [5][7] - The Medical - HMOs industry, where Centene belongs, has experienced a decline of 14% since the beginning of the year, contrasting with the performance of Adaptive Biotechnologies [7]

Core Insights - Adaptive Biotechnologies reported a revenue of $52.44 million for the quarter ended March 2025, marking a year-over-year increase of 25.3% [1] - The earnings per share (EPS) for the same period was -$0.20, an improvement from -$0.33 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $43.15 million by 21.53%, and the EPS also surpassed the consensus estimate of -$0.28 by 28.57% [1] Performance Metrics - The ClonoSEQ test volume was reported at 23,117, slightly below the three-analyst average estimate of 23,468 [4] - Total Minimal Residual Disease (MRD) revenues reached $43.72 million, significantly above the three-analyst average estimate of $34.61 million, reflecting a year-over-year increase of 34% [4] - Total Immune Medicine revenues were $8.72 million, slightly above the estimated $8.50 million, but showed a year-over-year decline of 5.7% [4] Stock Performance - Shares of Adaptive Biotechnologies have decreased by 7.3% over the past month, compared to a decline of 0.7% in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Adaptive Biotechnologies reported a quarterly loss of $0.20 per share, better than the Zacks Consensus Estimate of a loss of $0.28, and an improvement from a loss of $0.33 per share a year ago, resulting in an earnings surprise of 28.57% [1] - The company achieved revenues of $52.44 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 21.53%, and up from $41.87 million year-over-year [2] - The stock has increased approximately 22.8% since the beginning of the year, contrasting with a -5.3% decline in the S&P 500 [3] Earnings Outlook - The future performance of Adaptive Biotechnologies' stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - Current consensus EPS estimate for the upcoming quarter is -$0.24 on revenues of $47.91 million, and for the current fiscal year, it is -$0.92 on revenues of $213.24 million [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Adaptive Biotechnologies belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $52.4 million, representing a 25% growth from the same period last year [22] - MRD revenue grew 34% year-over-year to $43.7 million, with clinical and pharma contributions of 65% and 35% respectively [22] - Sequencing gross margin improved by 17 percentage points year-over-year to 62% [8][22] - Operating expenses decreased by 9% to $82 million, driven by lower R&D spending [23] - Cash burn for the quarter was $23 million, a 38% improvement compared to the same period last year [8] Business Line Data and Key Metrics Changes - ClonoSEQ clinical revenue grew 55% year-over-year, with test deliveries reaching over 23,000, a 36% increase [10] - Average selling price (ASP) for ClonoSEQ tests in the US increased by 14% to over $1,220 per test [13] - MRD Pharma revenue grew 11% year-over-year, with $4.5 million recognized in regulatory milestones [14] Market Data and Key Metrics Changes - The number of ordering healthcare providers grew 31% year-over-year, now exceeding 3,400 [12] - Blood-based testing contributed 44% of MRD tests in the US, up from 39% a year ago [11] Company Strategy and Development Direction - The company is focused on increasing the lifetime value of each clonoSEQ Medicare patient and expanding its market presence through EMR integrations [9][12] - Strategic goals include achieving over 45% of clonoSEQ testing done in blood and launching new initiatives in the second half of the year [16] - The company aims to be adjusted EBITDA positive in the second half of the year [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving raised full-year guidance due to strong first-quarter performance and sustained momentum [29] - The company has minimal exposure to tariffs and NIH funding pressures, providing a solid cash position of $233 million [9] Other Important Information - The company is on track to lower its full-year total operating expense guidance to a range of $335 million to $345 million [26] - Full-year cash burn guidance has been lowered to a range of $50 million to $60 million [27] Q&A Session Summary Question: Specific indications seeing growth and contribution trends - Management noted strong sequential growth across all indications, particularly in lymphoma indications like DLBCL and MCL [32] Question: Updates on EMR integration and larger accounts - Management reported significant growth in accounts integrated for over a year, with some larger accounts showing an average quarter-over-quarter growth of 27% [37] Question: Drivers of clonoSEQ volume growth - Management indicated that growth was driven by non-Hodgkin's lymphoma indications and the acceleration of EMR integrations [42] Question: Milestone payments and funnel growth - Management confirmed that more milestones are becoming available, providing clarity and confidence in the 2025 outlook [48] Question: Pricing and contracting discussions - Management emphasized a disciplined approach to pricing, ensuring contracted rates are close to Medicare rates [51] Question: Frequency of testing in clinical trials - Management acknowledged increased interest in more frequent testing, particularly in multiple myeloma trials [58] Question: Operational efficiencies from EMR integrations - Management noted potential operational efficiencies from EMR integrations, with significant reductions in callbacks reported by integrated accounts [68] Question: NeoGenomics partnership progress - Management provided updates on the partnership, focusing on optimizing the broader national launch based on insights gained from phase one accounts [115]

Financial Performance - Total revenue for Q1 2025 was $52.4 million, a 25% increase year-over-year compared to $41.9 million in Q1 2024[23] - MRD (Minimal Residual Disease) revenue reached $43.7 million in Q1 2025, representing a 34% year-over-year growth[8, 23] - Excluding milestones, MRD revenue grew by 39% year-over-year[8] - Immune Medicine revenue was $8.7 million in Q1 2025, a 6% decrease compared to Q1 2024[23] - Total operating expenses decreased by 9% year-over-year[8, 23] - The company's Q1 2025 cash burn was approximately $23 million, a 38% reduction compared to Q1 2024[8] - The company had a strong cash position with approximately $233 million in cash, cash equivalents, and marketable securities as of March 31, 2025[8] MRD Business - Clinical testing revenue increased by 55% year-over-year in Q1 2025[11] - clonoSEQ US volume reached 22,368 in Q1 2025[12] - Ordering HCPs (Healthcare Professionals) increased by 31% year-over-year in Q1 2025[12] Guidance - The company increased its FY 2025 MRD revenue guidance to between $180 million and $190 million, compared to the previous guidance of $175 million to $185 million[26]

Financial Performance - Revenue for Q1 2025 was $52,443,000, representing a 25.5% increase from $41,873,000 in Q1 2024[13] - Net loss for Q1 2025 was $29,830,000, a reduction of 37.4% compared to a net loss of $47,533,000 in Q1 2024[21] - Operating expenses for Q1 2025 totaled $82,047,000, down 9.6% from $90,635,000 in Q1 2024[13] - Total shareholders' equity decreased to $190,221,000 as of March 31, 2025, down from $202,485,000 at the end of 2024, a decline of 6.0%[11] - Total revenue for the three months ended March 31, 2025, was $52.443 million, a 25.1% increase from $41.873 million in the same period of 2024[41] - The company reported a net cash used in operating activities of $28,484,000 for Q1 2025, compared to $38,353,000 in Q1 2024, a reduction of 25.7%[21] - Total share-based compensation expense for the three months ended March 31, 2025, was $12.1 million, down from $14.3 million in 2024, representing a 15% reduction[99] Revenue Breakdown - MRD revenue for the three months ended March 31, 2025, was $43.721 million, up from $32.626 million in the prior year, representing a 34.0% increase[41] - Immune Medicine revenue decreased to $8.722 million in Q1 2025 from $9.247 million in Q1 2024, a decline of 5.7%[41] - The company recognized $2.0 million in MRD service revenue related to Medicare reimbursements during Q1 2025, compared to $1.5 million in Q1 2024[41] - MRD revenue increased by $11,095,000 (34%) to $43,721,000, driven by a $9,900,000 increase in revenue from clonoSEQ reports and a $1,000,000 increase from MRD sample testing services[139] - clonoSEQ test volume rose by 36% to 23,117 tests delivered in Q1 2025, up from 17,040 tests in Q1 2024[139] Expenses and Costs - Research and development expenses were $24,203,000 in Q1 2025, a decrease of 19.9% from $30,245,000 in Q1 2024[13] - Cost of revenue decreased by $1,072,000 (6%) to $16,979,000, with cost of materials down by $1,200,000 and labor and overhead costs reduced by $1,400,000[141] - Research and development expenses decreased by $6,042,000 (20%) to $24,203,000, representing 46% of total revenue compared to 72% in the prior year[142] - General and administrative expenses decreased by $2.2 million, mainly due to a $2.2 million reduction in personnel costs[146] Assets and Liabilities - Total current assets decreased to $256,489,000 as of March 31, 2025, down from $283,752,000 at the end of 2024, a decline of 9.6%[11] - Cash and cash equivalents increased to $50,646,000 from $47,920,000, reflecting a growth of 5.1%[11] - Total liabilities decreased to $320,631,000 as of March 31, 2025, down from $336,891,000 at the end of 2024, a decrease of 4.8%[11] - The company reported a restricted cash balance of $2.7 million as of March 31, 2025[30] - Total financial assets as of March 31, 2025, amounted to $213.6 million, including $31.5 million in money market funds and $161.2 million in U.S. government treasury securities[56] Future Prospects and Collaborations - The company has the potential to receive up to $412.0 million in future milestone payments contingent on regulatory approvals for therapeutics related to MRD data[42] - Under the Genentech collaboration agreement, the company may receive up to $1.8 billion in additional payments, including $65.0 million for regulatory milestones and $300.0 million for development milestones[44] - The company anticipates long-term growth in MRD revenue through increased clinical testing volume and optimized payor coverage[123] - Immune Medicine revenue is expected to grow as therapies advance to commercialization, although it may fluctuate due to various factors including collaboration expenses[124] Stock and Equity - The weighted-average shares used in computing net loss per share increased to 149,195,028 in Q1 2025 from 145,787,527 in Q1 2024[13] - As of March 31, 2025, the total shares of common stock reserved for future issuance amounted to 45,862,767[80] - The total shares available for grant decreased from 18,018,312 at December 31, 2024 to 10,957,287 at March 31, 2025[83] - Stock options outstanding as of March 31, 2025 totaled 11,936,635, with a weighted average exercise price of $15.37[85] Accounting and Compliance - The company’s financial statements are prepared in accordance with GAAP, and interim results may not be indicative of full-year performance[28] - The company has prepared unaudited condensed consolidated financial statements in accordance with GAAP, requiring estimates and judgments that may differ materially from actual results[176] - The company's disclosure controls and procedures were deemed effective as of March 31, 2025, with no changes that materially affected internal control over financial reporting during the three months ended[180] - There have been no material changes to the critical accounting policies and estimates as previously disclosed in the Annual Report for the year ended December 31, 2024[177] Risks and Legal Matters - The company operates in a rapidly changing environment with various risks that could materially affect its business and financial condition, with no material changes to risk factors since the last report[184] - The company is not currently involved in any legal proceedings that would have a material adverse effect on its business or financial condition[183]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $52.4 million, representing a 25% growth from the same period last year [19] - MRD revenue grew 34% year-over-year to $43.7 million, with clinical and pharma contributions of 65% and 35% respectively [19] - Sequencing gross margin improved by 17 percentage points year-over-year to 62% [6][21] - Operating expenses decreased by 9% to $82 million, driven by lower R&D spending [21] - Cash burn for the quarter was $23 million, a 38% improvement compared to the same period last year [6] Business Line Data and Key Metrics Changes - ClonoSEQ clinical revenue grew 55% year-over-year, with test volume reaching over 23,000, a 36% increase [8] - Blood-based testing contributed 44% of MRD tests in the US, up from 39% a year ago [9] - MRD Pharma revenue grew 11% year-over-year, with $4.5 million recognized in regulatory milestones [12] - Immune medicine revenue was $8.7 million, down 6% from a year ago, primarily due to a decrease in Genentech amortization [20] Market Data and Key Metrics Changes - The number of ordering healthcare providers grew 31% year-over-year, now exceeding 3,400 [10] - EMR integrations accelerated, with 27 live integrations including five of the top 10 accounts [10] - The contribution of DLBCL and MCL in MRD tests increased to 12% from 10% a year ago [9] Company Strategy and Development Direction - The company is focused on increasing the lifetime value of each clonoSEQ Medicare patient and expanding its market presence in blood-based testing [6][14] - Strategic goals include achieving over 45% of clonoSEQ testing done in blood, launching Onco EMR with Flatiron, and beginning phase one testing with NeoGenomics [14] - The company aims to be adjusted EBITDA positive in the second half of the year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving raised full-year guidance due to strong first-quarter performance and sustained momentum [24] - The company anticipates approximately 30% growth in clonoSEQ test volumes for 2025 compared to 2024 [22] - Management noted minimal exposure to tariffs and NIH funding pressures, highlighting a solid cash position of $233 million [7] Other Important Information - The company is raising its full-year MRD revenue guidance to a range of $180 million to $190 million [22] - Operating expense guidance has been lowered to a range of $335 million to $345 million [23] - Cash burn guidance has also been reduced to a range of $50 million to $60 million [23] Q&A Session Summary Question: Specific indications seeing growth and contribution trends - Management noted strong sequential growth across all indications, particularly in lymphoma indications like DLBCL and MCL [26][27] Question: Updates on EMR integration and growth quantification - Management reported significant growth in accounts that have been live for at least a year, with six of seven accounts exceeding 75% year-over-year growth [30][31] Question: Drivers of clonoSEQ volume growth and weather impact - Management confirmed no notable weather impacts and attributed growth to DLBCL and MCL, along with EMR integrations [36][37] Question: Milestone payments and funnel growth - Management indicated that more milestones are becoming available, providing clarity and confidence in the 2025 outlook [41][43] Question: Pricing and contracting discussions - Management emphasized discipline in pricing, ensuring contracted rates are close to Medicare rates [45][46] Question: Multiple myeloma trials and testing intervals - Management acknowledged increased interest in more frequent testing, particularly in multiple myeloma and other indications [50][52] Question: Technology improvements and addressing market adjacencies - Management is actively looking for ways to enhance technology and improve sensitivity in assays [54][56] Question: EMR integration and operational efficiencies - Management noted potential operational efficiencies from EMR integrations, with significant reductions in callbacks reported [60][61] Question: NeoGenomics partnership progress - Management provided updates on the selection of phase one accounts and preparations for the pilot launch in the second half of the year [106][108]

Revenue Performance - Revenue for Q1 2025 was $52.4 million, a 25% increase from Q1 2024[5] - MRD revenue was $43.7 million, representing a 34% increase year-over-year, contributing 83% of total revenue[8] - Total revenue for Q1 2025 was $52,443 thousand, up from $41,873 thousand in Q1 2024, representing a year-over-year increase of approximately 25%[26] - The revenue from the MRD segment in Q1 2025 was $43,721 thousand, compared to $32,626 thousand in Q1 2024, marking an increase of approximately 34%[26] - The Immune Medicine segment reported a revenue of $8,722 thousand in Q1 2025, compared to $9,247 thousand in Q1 2024, indicating a decline of about 5.7%[26] Operating Expenses - Operating expenses decreased by 9% to $82.0 million from $90.6 million in Q1 2024[6] - Operating expenses for Q1 2025 totaled $82,047 thousand, a decrease from $90,635 thousand in Q1 2024, showing a reduction of about 9%[26] - Share-based compensation expense in Q1 2025 was $12,147 thousand, down from $14,298 thousand in Q1 2024, reflecting a decrease of approximately 15%[25] - The company reported no restructuring expenses in Q1 2025, compared to $1,044 thousand in Q1 2024, indicating a strategic shift in operational focus[25] Financial Performance - Net loss for Q1 2025 was $29.8 million, an improvement from a net loss of $47.5 million in the same period last year[7] - The net loss attributable to Adaptive Biotechnologies Corporation decreased to $(29,852) thousand in Q1 2025 from $(47,507) thousand in Q1 2024, indicating a significant improvement in financial performance[25] - Adjusted EBITDA loss was $12.7 million, compared to a loss of $28.2 million in Q1 2024[9] - Adjusted EBITDA for Q1 2025 was $(12,748) thousand, an improvement from $(28,180) thousand in Q1 2024, reflecting a reduction in net loss[25] - The total adjusted EBITDA for the Immune Medicine segment in Q1 2025 was $(5,446) thousand, an improvement from $(6,927) thousand in Q1 2024[26] Guidance and Projections - Full year 2025 MRD revenue guidance raised to $180 million to $190 million, implying annual growth of 24% to 31%[8] - Full year total company operating expenses guidance updated to $335 million to $345 million[10] - Expected full year total company cash burn reduced to $50 million to $60 million[11] Cash Position - Cash, cash equivalents, and marketable securities totaled $232.8 million as of March 31, 2025[9] Test Volume - clonoSEQ test volume grew 36% to 23,117 tests delivered compared to Q1 2024[8] Interest Expense - Interest expense for Q1 2025 was $2,905 thousand, slightly down from $2,993 thousand in Q1 2024[25]