Core Insights - The DecisionDx-SCC test significantly outperforms current staging systems in predicting local recurrence and metastasis for NCCN high-risk patients with cutaneous squamous cell carcinoma (SCC) [1][3][4] - The test provides individualized risk predictions that align with treatment decision-making for adjuvant radiation therapy (ART) and surveillance imaging [2][5] Study Findings - The first study demonstrates that DecisionDx-SCC predicts local recurrence in high-risk patients post-Mohs resection, adding a third validated use to the test [2][4] - The second study confirms that clinicians utilize test results to guide recommendations for ART and surveillance imaging based on individual patient risk [2][5] Clinical Implications - DecisionDx-SCC effectively stratifies risk among 414 NCCN high-risk SCC patients, showing three-year local recurrence-free survival rates of 95.3% for low risk (Class 1), 85.5% for higher risk (Class 2A), and 71.4% for highest risk (Class 2B) [4] - The test's predictive accuracy improves when combined with established clinicopathologic factors, enhancing risk stratification beyond traditional staging systems [4][5] Clinician Insights - A survey of 244 clinicians revealed that most recommend ART for patients with a ≥20% risk of local recurrence or metastasis and surveillance imaging for those with a ≥10% risk of metastasis [4][5] - Clinicians reported that Class 2B test results are among the most critical factors in management decisions for ART [5] Company Overview - Castle Biosciences, Inc. focuses on innovative diagnostic tests that guide patient care, with a portfolio that includes tests for skin cancers and other diseases with high clinical need [7][8] - The company aims to transform disease management by prioritizing the needs of patients, clinicians, employees, and investors [7]

Company Overview - Castle Biosciences, Inc. is scheduled to present a company overview at Baird's 2025 Global Healthcare Conference on September 10, 2025, at 10:15 a.m. Eastern time [1] - The company is a leading diagnostics firm focused on improving health through innovative tests that guide patient care [4] Upcoming Events - A live audio webcast of the company's presentation will be available on its website, with a replay accessible after the live broadcast [2] - Castle will participate in one-on-one investor meetings during the Wells Fargo 20th Annual Healthcare Conference on September 4, 2025, and the 9th Annual Lake Street Best Ideas Growth Conference on September 11, 2025 [3] Product Portfolio - Castle's current portfolio includes tests for skin cancers, Barrett's esophagus, and uveal melanoma [5] - The company is engaged in research and development for additional tests, including one aimed at guiding systemic therapy selection for patients with moderate-to-severe atopic dermatitis seeking biologic treatment [5]

Summary of Castle Biosciences (CSTL) FY Conference Call - August 12, 2025 Company Overview - Castle Biosciences specializes in dermatologic and gastrointestinal (GI) cancer tests, including DecisionDx Melanoma and TissueCypher for GI cancer [1][2] Key Financial Performance - In Q2, Castle Biosciences reported a **33% year-over-year growth in volume** and **23% revenue growth**, totaling **$276 million** in cash at the end of the quarter and generating **$21 million** in operating cash flow [4][49] Core Products and Market Penetration - **TissueCypher**: Achieved nearly **100% year-over-year growth in volume**. Current market penetration is about **10%** for patients and higher for physicians, indicating significant growth potential [6][10] - **DecisionDx Melanoma**: Expected to grow at **high single digits** year-over-year, with a strong performance in Q2 showing **4% growth** year-over-year [32][34] Strategic Initiatives - Expansion of the sales force for the GI business, with plans to increase staffing to better serve approximately **10,000 gastroenterologists** [11] - Acquisition of **Previse**, which offers the complementary **ESA Predict** test, aimed at enhancing the GI cancer testing portfolio [13][15] Pipeline Developments - Development of a new test for **atopic dermatitis**, targeting a market of approximately **24 million** diagnosed patients in the U.S., with **7.4 million** in the moderate to severe category [21][22] - The test aims to predict responses to systemic therapies, with a focus on achieving a **90% clearance** in lesions [27][29] Regulatory and Reimbursement Landscape - **DecisionDx Melanoma** received a breakthrough device designation from the FDA, which could lead to improved reimbursement and market access [35][38] - Ongoing efforts to secure Medicare coverage for **SooDx SCC**, with a valid reconsideration request submitted to both Novitas and MolDX [40][44] Investor Insights - Castle Biosciences has demonstrated a **CAGR of 52%** since going public in July 2019, positioning itself as a strong performer in the diagnostic space [49][50] - The company is well-positioned for near-term and mid-term growth, with multiple product lines showing promise and a healthy cash flow [50] Conclusion - Castle Biosciences is focusing on expanding its market presence in both dermatologic and GI cancer testing, with strong financial performance and strategic acquisitions supporting its growth trajectory. The company is also navigating regulatory challenges while preparing for new product launches in the near future [52]

Core Insights - Castle Biosciences significantly outperformed Wall Street expectations in Q2 2025, reporting GAAP EPS of $0.15 and non-GAAP revenue of $86.2 million, both exceeding analyst estimates [1][2] - The company raised its full-year 2025 revenue guidance to a range of $310 million to $320 million, reflecting stronger-than-expected adoption of key tests [10] Financial Performance - GAAP revenue for Q2 2025 was $86.2 million, nearly flat compared to $87.0 million in Q2 2024, with a year-over-year change of -0.9% [2] - Non-GAAP EPS was $0.16, down 51.6% from $0.31 in Q2 2024 [2] - Adjusted EBITDA fell to $10.4 million, a decrease of 51.6% compared to $21.5 million in Q2 2024 [2] - Gross margin decreased from 80.7% in Q2 2024 to 77.3% in Q2 2025, reflecting rising expenses and a less favorable sales mix [2][9] Business Overview - Castle Biosciences specializes in molecular diagnostics, focusing on tests that provide actionable information for managing skin, gastrointestinal, and mental health diseases [3] - The company aims to expand its test portfolio through launches and acquisitions while ensuring reimbursement coverage to support test adoption [4] Recent Developments - Total test volumes reached 26,574 in Q2 2025, a 6% increase year-over-year, primarily driven by core offerings like DecisionDx-Melanoma and TissueCypher [5] - DecisionDx-Melanoma received FDA's Breakthrough Device designation in Q2 2025, indicating regulatory recognition for its innovation [5] - TissueCypher test report volume increased by 117% year-over-year in Q1 2025, attributed to expanded sales force coverage and rising clinical demand [6] - The company discontinued the IDgenetix test due to reimbursement challenges, aiming to streamline operations and improve profitability [8] Strategic Focus - Management is refocusing commercial efforts towards melanoma tests following the loss of Medicare coverage for DecisionDx-SCC, which has significantly impacted revenue [7] - The acquisition of Previse aims to broaden the gastrointestinal segment's potential, although it is not expected to contribute meaningfully to 2025 financial results [6]

分组1 - Castle Biosciences, Inc. reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of a loss of $0.51 per share, representing an earnings surprise of +129.41% [1] - The company posted revenues of $86.19 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 16.64%, although this is a slight decrease from year-ago revenues of $87 million [2] - Castle Biosciences has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times during the same period [2] 分组2 - The stock has underperformed the market, losing about 45% since the beginning of the year, while the S&P 500 has gained 6.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.63 on revenues of $66.56 million, and -$2.29 on revenues of $295.13 million for the current fiscal year [7] 分组3 - The Zacks Industry Rank indicates that the Medical - Biomedical and Genetics sector is currently in the bottom 43% of over 250 Zacks industries, suggesting potential underperformance compared to the top 50% of ranked industries [8] - The estimate revisions trend for Castle Biosciences was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

Financial Data and Key Metrics Changes - The company reported revenue of $86.2 million for Q2 2025, a decrease of $800,000 or 1% compared to Q2 2024, primarily due to a $12.5 million decrease in revenue from dermatological tests, offset by an $11.7 million increase from non-dermatological tests [18][19] - Adjusted revenue for Q2 2025 was $86.2 million, also a decrease of 1% compared to the previous year [19] - The gross margin for Q2 2025 was 77.3%, down from 80.7% in Q2 2024, while adjusted gross margin was 79.5%, compared to 83.2% in the same period last year [20][22] - Net income for Q2 2025 was $4.5 million, compared to $8.9 million in Q2 2024, with diluted earnings per share of $0.15 versus $0.31 in the prior year [22] Business Line Data and Key Metrics Changes - For DecisionDx Melanoma, the company delivered 9,981 test reports in Q2 2025, a sequential increase of approximately 16% compared to Q1 2025 and a year-over-year increase of about 4% compared to Q2 2024 [8][9] - DecisionDx SCC test reports totaled 4,762 in Q2 2025, with reimbursement challenges noted due to a local coverage determination policy that went into effect on April 24, 2025 [11][12] - Tissue Cypher test reports reached 9,170 in Q2 2025, representing a 92% year-over-year growth compared to Q2 2024 [13] Market Data and Key Metrics Changes - The company expects continued solid growth in the second half of 2025, reiterating expectations for high single-digit volume growth for DecisionDx Melanoma for the full year [9] - The collaboration with the National Cancer Institute's SEER program is ongoing, enhancing the clinical evidence for DecisionDx Melanoma [10] Company Strategy and Development Direction - The company is focused on investing in near-term growth initiatives, including expanding clinical evidence and optimizing the commercial team [7] - The strategy includes pursuing M&A opportunities that complement the existing portfolio and drive mid- to long-term value creation [24] - The company is also developing a diagnostic test for atopic dermatitis in collaboration with Sybase, targeting a significant unmet clinical need [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the clinical value of their tests and the strength of their balance sheet, which positions the company well for future investments [7][8] - The management acknowledged the challenges posed by the reimbursement environment but remains optimistic about the growth potential of their tests [24] Other Important Information - The company raised its total revenue guidance for 2025 to $310 million to $320 million, up from a previous range of $287 million to $297 million [19] - The company has a strong cash position, ending Q2 2025 with $275.9 million in cash, cash equivalents, and marketable securities [23] Q&A Session Summary Question: Plans for FDA approval after breakthrough designation for DecisionDx Melanoma - Management confirmed they are moving forward with plans for FDA submission but did not disclose specific timing [28][29] Question: Payment status for DecisionDx SCC volume - Management indicated they receive episodic payments on commercial claims but noted it is not a significant percentage [30][31] Question: Insights on GI sales rep productivity - Management stated that the sales team is expected to reach full productivity in the third and fourth quarters of the year [34] Question: Reimbursement outlook for atopic dermatitis products - Management is pursuing multiple reimbursement avenues and expects to launch the test by the end of 2025, with significant revenue impact anticipated in 2027 and beyond [40][41] Question: Continuation of DecisionDx SCC offering - Management confirmed they will continue to offer the SCC test while awaiting reconsideration outcomes, emphasizing patient care [44] Question: Drivers for revenue guidance increase - Management noted strong drivers across the business and historical seasonal trends affecting revenue [46] Question: Tissue Cypher growth expectations - Management expects continued growth in Tissue Cypher volumes, with no specific guidance for 2026 yet [52][54]

Financial Data and Key Metrics Changes - The company reported revenue of $86.2 million for Q2 2025, a decrease of $800,000 or 1% compared to Q2 2024, primarily due to a $12.5 million decrease in revenue from dermatological tests, offset by an $11.7 million increase from non-dermatological tests [17][18] - Adjusted revenue for Q2 2025 was $86.2 million, also a decrease of 1% compared to the previous year [18] - The gross margin for Q2 2025 was 77.3%, down from 80.7% in Q2 2024, while adjusted gross margin was 79.5% compared to 83.2% in the same period last year [19] - Net income for Q2 2025 was $4.5 million, compared to $8.9 million in Q2 2024, with diluted earnings per share at $0.15 versus $0.31 in the prior year [22] Business Line Data and Key Metrics Changes - For DecisionDx Melanoma, the company delivered 9,981 test reports in Q2 2025, a sequential increase of approximately 16% compared to Q1 2025 and a year-over-year increase of about 4% compared to Q2 2024 [7][8] - DecisionDx SCC test reports totaled 4,762 in Q2 2025, with revenue from this test estimated at just above $15 million [10][17] - Tissue Cypher test reports reached 9,170 in Q2 2025, representing a 92% year-over-year growth compared to Q2 2024 [12] Market Data and Key Metrics Changes - The company expects continued solid growth in the second half of 2025, reiterating expectations for high single-digit volume growth for DecisionDx Melanoma for the full year [8] - The collaboration with the National Cancer Institute's SEER program is ongoing, enhancing the clinical management of melanoma patients [9] Company Strategy and Development Direction - The company is focused on investing in near-term growth initiatives, including expanding clinical evidence and optimizing the commercial team [6] - The M&A strategy aims to complement the existing portfolio to drive mid- to long-term value creation, with a focus on tests that have established reimbursement and high clinical value [24] - The company is pursuing a multi-omics approach for improved test value in Barrett's esophagus and other GI diseases [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the clinical value of their tests and the ability to create value for shareholders in the near and long term [26] - The company is optimistic about the potential for their atopic dermatitis test and expects to launch it by the end of 2025 [14][44] - Management acknowledged challenges in the reimbursement environment but remains committed to providing innovative tests that significantly impact patient care [47] Other Important Information - The company ended Q2 2025 with $275.9 million in cash, cash equivalents, and marketable securities, positioning it well for future investments [6][23] - The company has submitted reconsideration requests for DecisionDx SCC to Novitas and MolDx, with expectations of a response from MolDx by Labor Day [58][59] Q&A Session Summary Question: Plans for FDA approval after breakthrough designation for DecisionDx Melanoma - Management is moving forward with efforts to seek FDA submission but did not disclose specific timing [30] Question: Payment status for DecisionDx SCC volume - The company receives episodic payments on commercial claims, but these are not significant percentages [31][33] Question: Insights on GI sales rep productivity - The sales team is expected to reach full productivity in the third and fourth quarters of 2025 [36] Question: Reimbursement outlook for atopic dermatitis test - The company is pursuing multiple reimbursement avenues and expects limited revenue impact in 2026 [44] Question: Continuation of DecisionDx SCC offering - The company plans to keep the test available in the marketplace while moderating volume due to educational sales efforts [46] Question: Drivers for revenue guidance increase - The company raised its revenue guidance due to strong business drivers and historical seasonal trends [48] Question: Growth expectations for Tissue Cypher - The company anticipates continued growth in Tissue Cypher volumes without significant seasonality expected [56] Question: Progress with private payers for DecisionDx Melanoma - The company continues to generate data to support payer engagement, despite resistance from the payer community [102]

Financial Performance & Growth - Q2 2025 total test reports for core revenue drivers (DecisionDx-Melanoma, TissueCypher) increased by 33% year-over-year compared to Q2 2024[14, 61] - Gross Margin for Q2 2025 was 77%, while Adjusted Gross Margin reached 80%, slightly lower than the 81% and 83% respectively in the same period of 2024[14] - Net cash provided by operations in Q2 2025 was $20.8 million, a decrease from $24.0 million in Q2 2024[14] - As of June 30, 2025, the company's cash, cash equivalents, and marketable investment securities totaled $275.9 million[14] - Net income for Q2 2025 was $4.5 million, and Adjusted EBITDA was $10.4 million[14] Strategic Initiatives - The company aims to achieve operating cash flow positivity by the end of 2025[4, 60] - The company closed its acquisition of Previse, a gastrointestinal health company, focusing on chronic acid reflux related diseases, including esophageal cancer[14] - The company entered into a collaboration and license agreement with SciBase to develop diagnostic tests for dermatologic diseases[14] Market Penetration & Clinical Utility - DecisionDx-Melanoma clinical use is associated with improved patient survival, with a 29% lower 3-year melanoma-specific mortality and a 17% lower 3-year overall mortality in tested patients compared to untested patients[38] - DecisionDx-SCC Class results predict an SCC patient's individual metastatic risk and individual benefit of ART[44] - TissueCypher is the strongest independent predictor of progression to HGD or EAC in Barrett's esophagus patients, detecting 62% of progressors[51, 52]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements for Q2 and H1 2025 show a **$21.3 million net loss** for the six months, driven by increased amortization of intangible assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $82,233 | $119,709 | | Marketable investment securities | $193,697 | $173,421 | | Accounts receivable, net | $52,311 | $51,218 | | Total current assets | $348,668 | $360,154 | | Total assets | $544,729 | $531,235 | | **Liabilities & Equity** | | | | Total current liabilities | $50,890 | $49,392 | | Long-term debt | $8,096 | $9,745 | | Total liabilities | $89,353 | $75,400 | | Total stockholders' equity | $455,376 | $455,835 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $86,188 | $87,002 | $174,176 | $159,976 | | Total operating expenses | $90,439 | $81,990 | $206,355 | $160,435 | | Operating (loss) income | $(4,251) | $5,012 | $(32,179) | $(459) | | Net income (loss) | $4,523 | $8,920 | $(21,325) | $6,386 | | Diluted EPS | $0.15 | $0.31 | $(0.74) | $0.22 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,785 | $17,163 | | Net cash used in investing activities | $(50,809) | $(41,118) | | Net cash (used in) provided by financing activities | $(1,452) | $10,686 | | **Net change in cash and cash equivalents** | **$(37,476)** | **$(13,269)** | - In Q1 2025, the company discontinued its IDgenetix test, leading to an accelerated amortization expense of approximately **$20.1 million** as the related intangible asset was fully amortized by March 31, 2025[77](index=77&type=chunk) - In May 2025, the company acquired Capsulomics, Inc. for **$28.2 million**, accounted for as an asset acquisition with a 12-year useful life for the developed technology[34](index=34&type=chunk)[78](index=78&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses an **8.9% increase in H1 2025 net revenues** to **$174.2 million**, offset by a **$21.3 million net loss** due to accelerated amortization and the discontinuation of IDgenetix, alongside capital uses for operations and a new headquarters [Overview and Test Portfolio](index=29&type=section&id=Overview%20and%20Test%20Portfolio) Castle Biosciences, a molecular diagnostics company, discontinued its IDgenetix test in May 2025, focusing on dermatologic cancers, Barrett's esophagus, and uveal melanoma, with DecisionDx-Melanoma and DecisionDx-SCC as primary revenue drivers - The company's portfolio includes **five proprietary multi-analyte assays** with algorithmic analysis (MAAA) tests across dermatology, gastroenterology, and ophthalmology[121](index=121&type=chunk) - The IDgenetix pharmacogenomic test for mental health conditions was discontinued in **May 2025** after careful assessment[129](index=129&type=chunk)[152](index=152&type=chunk) - In July 2025, the FDA granted **Breakthrough Device designation** to the DecisionDx-Melanoma test, aiming to expedite its development and review[149](index=149&type=chunk) [Reimbursement and Test Reports](index=30&type=section&id=Reimbursement%20and%20Test%20Reports) Reimbursement is critical, with DecisionDx-SCC losing Medicare coverage in April 2025, yet overall test report volume grew **10.8%** in H1 2025, driven by a **102.2% increase** in TissueCypher volumes - Novitas finalized non-coverage for the DecisionDx-SCC test, effective **April 24, 2025**, following similar recommendations from Palmetto and Noridian in 2024[122](index=122&type=chunk)[138](index=138&type=chunk) Test Reports Delivered | Test | 6 Months 2025 | 6 Months 2024 | % Change | | :--- | :--- | :--- | :--- | | DecisionDx-Melanoma | 18,602 | 17,969 | +3.5% | | DecisionDx-SCC | 9,137 | 7,854 | +16.3% | | TissueCypher | 16,602 | 8,211 | +102.2% | | IDgenetix (discontinued) | 3,605 | 8,981 | -59.9% | | **Grand Total** | **50,976** | **45,990** | **+10.8%** | [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q2 2025 revenues decreased **0.9%** to **$86.2 million**, with H1 revenues up **8.9%** to **$174.2 million**, but a **$21.3 million net loss** resulted from a **$25.8 million increase** in amortization expense due to the IDgenetix write-off Revenue Disaggregation (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Dermatologic | $56,297 | $68,828 | $119,259 | $128,163 | | Non-Dermatologic | $29,891 | $18,174 | $54,917 | $31,813 | | **Total net revenues** | **$86,188** | **$87,002** | **$174,176** | **$159,976** | Gross Margin Comparison | Period | Gross Margin % 2025 | Gross Margin % 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | 77.3% | 80.7% | | Six Months Ended June 30 | 63.1% | 79.4% | - Amortization of acquired intangible assets increased by **$25.8 million** for the six months ended June 30, 2025, primarily due to the full amortization of IDgenetix's remaining carrying value by March 31, 2025[206](index=206&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company maintained strong liquidity with **$82.2 million** in cash and **$193.7 million** in marketable securities, with a new **$44.2 million corporate headquarters** under construction and access to a **$25.0 million line of credit** - As of June 30, 2025, the company held **$82.2 million** in cash and cash equivalents and **$193.7 million** in marketable investment securities[210](index=210&type=chunk) - A new corporate headquarters, estimated to cost **$44.2 million**, is under construction with **$14.0 million** spent in 2025, expected completion in early 2026[213](index=213&type=chunk) - The company has an undrawn **$25.0 million line of credit** available until September 30, 2025[210](index=210&type=chunk)[225](index=225&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate fluctuations on its **$10.0 million floating-rate term debt**, inflationary pressures on costs, and equity price volatility from its **$3.3 million equity securities portfolio** - The company is exposed to interest rate risk through its **$10.0 million term loan**, which bears a floating interest rate tied to the WSJ Prime Rate[240](index=240&type=chunk) - As of June 30, 2025, the company held equity securities with a fair value of **$3.3 million**, exposing it to equity price risk[242](index=242&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during Q2 2025 - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[244](index=244&type=chunk) - No material changes in internal control over financial reporting occurred during Q2 2025[245](index=245&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is cooperating with a subpoena from the U.S. Department of Health and Human Services, Office of Inspector General, regarding federal healthcare program claims from 2015-2024, with the outcome and financial impact currently unknown - On February 1, 2024, the company received a subpoena from the Department of Health and Human Services, Office of Inspector General, concerning claims submitted for payment under federal healthcare programs[98](index=98&type=chunk)[246](index=246&type=chunk) - The company is cooperating with the government's request but cannot predict the outcome or estimate any potential loss from this matter[99](index=99&type=chunk)[246](index=246&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) Key risks include a history of net losses and an accumulated deficit of **$221.5 million**, heavy revenue dependence on DecisionDx-Melanoma and TissueCypher after losing Medicare coverage for DecisionDx-SCC, and ongoing regulatory uncertainty for Laboratory Developed Tests (LDTs) - The company has a history of net losses and an accumulated deficit of **$221.5 million** as of June 30, 2025, raising concerns about sustained profitability[249](index=249&type=chunk) - Revenue is heavily dependent on DecisionDx-Melanoma and TissueCypher tests, as DecisionDx-SCC revenue is expected to decline significantly following the loss of Medicare coverage effective **April 24, 2025**[251](index=251&type=chunk) - The regulatory landscape for Laboratory Developed Tests (LDTs) remains a risk, despite a federal court vacating the FDA's final rule to regulate LDTs as medical devices, as future changes could still impose extensive FDA requirements[260](index=260&type=chunk)[266](index=266&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There has been no material change in the planned use of net proceeds from the company's July 2019 IPO, with proceeds remaining invested in cash, cash equivalents, or highly liquid investment securities as of June 30, 2025 - As of June 30, 2025, the company has not used any net proceeds from its 2019 IPO, keeping them invested in cash equivalents or liquid securities[290](index=290&type=chunk) [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) On May 8, 2025, CEO Derek Maetzold adopted a Rule 10b5-1 trading plan for the sale of up to **48,204 common shares** and **48,919 RSU-settled shares**, active from August 2025 to February 2026 - On May 8, 2025, CEO Derek Maetzold adopted a Rule 10b5-1 trading arrangement for the sale of company stock, scheduled from approximately **August 14, 2025, to February 13, 2026**[293](index=293&type=chunk)

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Q2 2025 revenue was $86.2 million, a slight decrease, with core test volume growth and raised full-year guidance [Second Quarter Ended June 30, 2025](index=1&type=section&id=Second%20Quarter%20Ended%20June%2030%2C%202025) Q2 2025 revenues were $86.2 million, a slight decrease, impacted by coverage decisions, with total test reports up 6% Q2 2025 Key Financial Metrics (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $86.2M | $87.0M | -0.9% | | Adjusted Revenues | $86.2M | $86.6M | -0.5% | | Gross Margin | 77% | 81% | -4 pp | | Adjusted Gross Margin | 80% | 83% | -3 pp | | Net Income | $4.5M | $8.9M | -49.2% | | Diluted EPS | $0.15 | $0.31 | -51.6% | | Adjusted EBITDA | $10.4M | $21.5M | -51.8% | Q2 2025 Test Report Volume | Test | Q2 2025 Reports | Q2 2024 Reports | Change | | :--- | :--- | :--- | :--- | | Total Test Reports | 26,574 | 25,102 | +6% | | DecisionDx-Melanoma | 9,981 | 9,585 | +4% | | TissueCypher | 9,170 | 4,782 | +92% | | DecisionDx-SCC | 4,762 | 4,277 | +11% | | IDgenetix | 1,027 | 4,903 | -79% | - Revenue and test volume were **negatively impacted** by the Novitas LCD deeming DecisionDx-SCC noncovered and the discontinuation of the IDgenetix test[4](index=4&type=chunk) [Six Months Ended June 30, 2025](index=2&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025) H1 2025 revenues increased 9% to $174.2 million, with total test reports up 11%, but a net loss of $21.3 million due to amortization H1 2025 Key Financial Metrics (in millions) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $174.2M | $160.0M | +9% | | Adjusted Revenues | $176.2M | $159.0M | +11% | | Net (Loss) Income | ($21.3M) | $6.4M | N/A | | Diluted (Loss) EPS | ($0.74) | $0.22 | N/A | | Adjusted EBITDA | $23.4M | $32.1M | -27% | H1 2025 Test Report Volume | Test | H1 2025 Reports | H1 2024 Reports | Change | | :--- | :--- | :--- | :--- | | Total Test Reports | 50,976 | 45,990 | +11% | | DecisionDx-Melanoma | 18,602 | 17,969 | +4% | | TissueCypher | 16,602 | 8,211 | +102% | | DecisionDx-SCC | 9,137 | 7,854 | +16% | | IDgenetix | 3,605 | 8,981 | -60% | [Cash Position and 2025 Outlook](index=3&type=section&id=Cash%20Position%20and%202025%20Outlook) The company held **$275.9 million** in cash and raised full-year 2025 revenue guidance to **$310-320 million** - The company held **$275.9 million** in cash, cash equivalents, and marketable investment securities as of June 30, 2025[8](index=8&type=chunk) - Full-year 2025 revenue guidance was raised to **$310-320 million** from the prior range of $287-297 million[1](index=1&type=chunk)[9](index=9&type=chunk) [Business Accomplishments and Highlights](index=3&type=section&id=Second%20Quarter%20and%20Recent%20Accomplishments%20and%20Highlights) The company achieved significant milestones, including FDA Breakthrough Device designation for DecisionDx-Melanoma and the acquisition of Previse [Dermatology](index=3&type=section&id=Dermatology) DecisionDx-Melanoma received FDA Breakthrough Device designation, and DecisionDx-SCC saw new studies and a reconsideration request - DecisionDx-Melanoma was granted **Breakthrough Device designation** by the U.S. FDA[12](index=12&type=chunk) - A real-world study showed DecisionDx-Melanoma was associated with a **32% reduction in mortality risk** compared to untested patients[12](index=12&type=chunk) - A reconsideration request was submitted for the Novitas LCD regarding DecisionDx-SCC, with two new studies supporting its clinical utility[12](index=12&type=chunk)[13](index=13&type=chunk) [Gastroenterology](index=4&type=section&id=Gastroenterology) The acquisition of Previse was completed, expected to expand GI offerings for Barrett's esophagus and other GI diseases - The acquisition of Previse (Capsulomics, Inc.) was completed, expected to **expand Castle's GI offerings** for Barrett's esophagus[14](index=14&type=chunk) [Uveal Melanoma](index=4&type=section&id=Uveal%20Melanoma) New data supports adding PRAME gene expression to DecisionDx-UM to refine metastatic risk prediction for uveal melanoma - New data from an independent validation study supports adding PRAME gene expression to DecisionDx-UM to **refine metastatic risk prediction**[15](index=15&type=chunk) [Pipeline Initiatives](index=4&type=section&id=Pipeline%20Initiatives) A collaboration with SciBase was initiated to develop a diagnostic test for predicting flares in atopic dermatitis patients - A collaboration and license agreement was signed with SciBase to develop a diagnostic test for predicting flares in atopic dermatitis[16](index=16&type=chunk) [Corporate](index=4&type=section&id=Corporate) CEO Derek Maetzold received a Lifetime Achievement Award, and the company earned multiple Top Workplaces awards - CEO Derek Maetzold received a **Lifetime Achievement Award** and was named a 2025 Most Admired CEO[18](index=18&type=chunk)[19](index=19&type=chunk) - The company earned several 2025 Top Workplaces awards for its healthcare industry ranking and culture excellence[18](index=18&type=chunk) [Financial Statements (Unaudited)](index=8&type=section&id=Financial%20Statements%20(Unaudited)) Unaudited financial statements show a H1 2025 net loss of $21.3 million, total assets of $544.7 million, and positive operating cash flow [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) H1 2025 net revenues grew to $174.2 million, but a $30.3 million amortization expense led to a $21.3 million net loss Condensed Consolidated Statements of Operations (in thousands) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net Revenues** | **$174,176** | **$159,976** | | Total operating expenses, net | $206,355 | $160,435 | | *Amortization of acquired intangible assets* | *$30,286* | *$4,494* | | Operating (loss) income | ($32,179) | ($459) | | **Net (loss) income** | **($21,325)** | **$6,386** | | **Diluted (loss) earnings per share** | **($0.74)** | **$0.22** | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached $544.7 million, with liabilities at $89.4 million and equity stable at $455.4 million Condensed Consolidated Balance Sheet Highlights (in thousands) | | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $82,233 | $119,709 | | Marketable investment securities | $193,697 | $173,421 | | **Total Assets** | **$544,729** | **$531,235** | | **Total Liabilities** | **$89,353** | **$75,400** | | **Total Stockholders' Equity** | **$455,376** | **$455,835** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow was $14.8 million, but investing activities led to a $37.5 million decrease in cash Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,785 | $17,163 | | Net cash used in investing activities | ($50,809) | ($41,118) | | Net cash (used in) provided by financing activities | ($1,452) | $10,686 | | **Net Change in Cash and Cash Equivalents** | **($37,476)** | **($13,269)** | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP metrics show Q2 2025 Adjusted Revenues of $86.2 million and Adjusted EBITDA of $10.4 million [Reconciliation of Adjusted Revenues, Gross Margin, and Net Income Per Share](index=12&type=section&id=Reconciliation%20of%20Adjusted%20Revenues%2C%20Gross%20Margin%2C%20and%20Net%20Income%20Per%20Share) H1 2025 Adjusted Revenues were $176.2 million, with a $20.1 million amortization adjustment leading to a $1.2 million Adjusted Net Loss Reconciliation of Key Non-GAAP Metrics (Q2 2025 vs Q2 2024) (in thousands) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net revenues (GAAP) | $86,188 | $87,002 | | **Adjusted Revenues (Non-GAAP)** | **$86,182** | **$86,639** | | Gross Margin percentage (GAAP) | 77.3% | 80.7% | | **Adjusted Gross Margin percentage (Non-GAAP)** | **79.5%** | **83.2%** | - For H1 2025, a **$20.1 million one-time adjustment** for accelerated amortization of IDgenetix significantly impacted GAAP net loss[44](index=44&type=chunk)[45](index=45&type=chunk) [Reconciliation of Adjusted EBITDA](index=13&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA was $10.4 million, a decrease from Q2 2024, with H1 2025 Adjusted EBITDA at $23.4 million Reconciliation of Adjusted EBITDA (in thousands) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $4,523 | $8,920 | ($21,325) | $6,386 | | Adjustments | $5,848 | $12,619 | $44,711 | $25,697 | | **Adjusted EBITDA (Non-GAAP)** | **$10,371** | **$21,539** | **$23,386** | **$32,083** | [Supplementary Information](index=5&type=section&id=Supplementary%20Information) This section provides conference call details, company overview, and forward-looking statements with associated risk factors [Conference Call and Webcast Details](index=5&type=section&id=Conference%20Call%20and%20Webcast%20Details) A conference call and webcast are scheduled for August 4, 2025, at 4:30 p.m. ET to discuss Q2 2025 results - A conference call is scheduled for **August 4, 2025, at 4:30 p.m. ET** to discuss Q2 2025 results[20](index=20&type=chunk) [About Castle Biosciences](index=6&type=section&id=About%20Castle%20Biosciences) Castle Biosciences is a diagnostics company focused on innovative tests for skin cancers, Barrett's esophagus, and uveal melanoma - The company's portfolio includes tests for skin cancers, Barrett's esophagus, and uveal melanoma, with ongoing R&D[29](index=29&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements, including revenue guidance, with a caution that actual results may differ due to risks - The press release includes forward-looking statements concerning 2025 revenue guidance and product developments[31](index=31&type=chunk) - Investors are cautioned that actual results may differ materially due to various risks detailed in SEC filings[32](index=32&type=chunk)