Financial Data and Key Metrics Changes - Exact Sciences delivered a record 1,300,000 test results, with core revenue growth accelerating to 16% year over year, generating an all-time high of $138,000,000 in adjusted EBITDA [3][4] - Adjusted EBITDA increased by 26%, with a margin expansion of 130 basis points, driven by pricing and productivity gains [5] - GAAP net income was negative $1,000,000, including $15,000,000 in one-time costs related to operational efficiency [5] - Free cash flow reached $47,000,000, bringing year-to-date free cash flow to $46,000,000, an increase of $95,000,000 compared to the same period last year [5][6] Business Line Data and Key Metrics Changes - Screening revenue increased by 18% to $628,000,000, with growth driven by rescreens, CareGAP programs, and improved commercial execution [4] - Precision Oncology revenue grew by 9% to $179,000,000, led by international adoption of Oncotype DX [4][5] - Revenue from sublicensing Twin Strands technology contributed $7,500,000 [5] Market Data and Key Metrics Changes - Cologuard brand awareness reached all-time highs, with top-of-mind awareness matching or exceeding colonoscopy [12] - The colon cancer screening landscape is shifting towards a Cologuard-first approach, as indicated by recent advocacy from the AGA work group [12][13] - Cologuard's momentum is evident, with the company delivering its twenty millionth result, doubling from ten million in just three years [11] Company Strategy and Development Direction - The company is raising total revenue guidance for the year to between $3,130,000,000 and $3,170,000, reflecting a $55,000,000 increase at midpoint [7][8] - A multi-year productivity plan aims for $150,000,000 in annual savings by 2026, focusing on operational efficiencies and AI integration [9][10] - The company reaffirms its long-term target of 15% compounded revenue growth and over 20% adjusted EBITDA margins by 2027 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing strong commercial execution and brand awareness as key drivers [11][12] - The company anticipates increased cash flow in the second half of the year as accounts receivable from Cologuard Plus claims are paid [6] - Management acknowledged challenges in blood-based colorectal cancer screening but remains optimistic about future developments and the potential of the Phrenome acquisition [14][15] Other Important Information - The company has secured Medicare coverage for OncoDetect, enhancing its precision oncology offerings [3][21] - The launch of CancerGuard, a blood-based multi-cancer early detection test, is set for next month, targeting a $25,000,000,000 addressable market [19][20] Q&A Session Summary Question: Strategic fit of the Phrenome agreement - Management highlighted that the agreement adds a blood-based option to their portfolio, complementing existing tests and enhancing market leadership [26][27] Question: Factors contributing to strong growth - Management attributed growth to the successful launch of Cologuard Plus and improvements in commercial execution, with strong performance across all business segments [32][34] Question: Blood test performance and FDA submission timeline - Management stated that the Phrenome test showed promising sensitivity and specificity, with the final module submitted to the FDA, but did not provide a specific timeline for approval [39][40] Question: Concerns about resource allocation and strategic prioritization - Management disagreed with the notion that past acquisitions were unsuccessful, emphasizing the impact of Cologuard and the potential of the blood-based screening market [49][50] Question: Market share expectations for blood-based testing - Management projected that blood-based testing could capture 5% to 10% of the market, depending on future guideline recommendations [88][90]

[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) This section presents the company's financial statements, management's discussion and analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ended June 30, 2025, show a 16.0% year-over-year revenue increase to $811.1 million for the second quarter, driven by growth in both Screening and Precision Oncology, with a significantly narrowed net loss [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $5.80 billion, a slight decrease from year-end 2024, while total liabilities decreased to $3.33 billion, largely due to convertible notes settlement Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Item | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 1,507,859 | 1,571,423 | | Cash and cash equivalents | 657,099 | 600,889 | | Marketable securities | 201,336 | 437,137 | | **Total Assets** | **5,797,365** | **5,928,139** | | **Total Current Liabilities** | 521,933 | 732,187 | | Convertible notes, net, current portion | — | 249,153 | | **Total Liabilities** | **3,327,951** | **3,525,890** | | **Total Stockholders' Equity** | **2,469,414** | **2,402,249** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue grew 16.0% to $811.1 million, with a significantly reduced net loss of $1.2 million, while six-month revenue increased 13.5% to $1.52 billion Condensed Consolidated Statements of Operations - Q2 (in thousands, except EPS) | Metric (in thousands, except EPS) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | $811,085 | $699,264 | +16.0% | | **Gross Profit** | $562,453 | $488,316 | +15.2% | | **Loss from Operations** | $(2,148) | $(26,257) | +91.8% | | **Net Loss** | $(1,185) | $(15,808) | +92.5% | | **Net Loss Per Share** | $(0.01) | $(0.09) | +88.9% | Condensed Consolidated Statements of Operations - H1 (in thousands, except EPS) | Metric (in thousands, except EPS) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | $1,517,870 | $1,336,788 | +13.5% | | **Gross Profit** | $1,063,000 | $934,639 | +13.7% | | **Loss from Operations** | $(98,158) | $(132,949) | +26.2% | | **Net Loss** | $(102,400) | $(126,036) | +18.8% | | **Net Loss Per Share** | $(0.55) | $(0.69) | +20.3% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities significantly improved to $119.8 million, with cash and cash equivalents increasing by $50.5 million Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $119,826 | $24,754 | | **Net cash provided by (used in) investing activities** | $190,458 | $(318,567) | | **Net cash provided by (used in) financing activities** | $(260,685) | $221,601 | | **Net increase (decrease) in cash** | $50,463 | $(73,658) | - The primary use of cash in financing activities was a **$249.2 million** payment for the settlement of convertible notes that matured in January 2025[23](index=23&type=chunk)[98](index=98&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue recognition, debt, and collaborations, highlighting strong Screening revenue growth, convertible notes settlement, and a new collaboration with Freenome Revenue by Source (in thousands) | Revenue Source (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Screening** | $628,481 | $531,606 | +18.2% | | **Precision Oncology** | $182,604 | $167,658 | +8.9% | | **Total Revenue** | **$811,085** | **$699,264** | **+16.0%** | - In January 2025, the company settled its 2025 Convertible Notes with a cash payment of **$250.4 million** upon maturity[98](index=98&type=chunk) - On July 22, 2025, the company initiated a restructuring plan expected to result in approximately **$30 million** in costs through 2026, primarily for employee termination and consulting fees[167](index=167&type=chunk) - On August 4, 2025, the company entered into a collaboration and license agreement with Freenome, involving a **$75.0 million** upfront payment and up to **$700.0 million** in potential milestone payments for developing and commercializing blood-based colorectal cancer screening tests[169](index=169&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 2025 revenue growth to increased Cologuard and Oncotype DX test volumes, with new product launches and a multi-year productivity plan targeting over $150 million in annual savings by 2026 - Key milestones in Q2 2025 include delivering over **1.3 million** test results, obtaining Medicare reimbursement for the Oncodetect MRD test, and entering an exclusive license agreement with Freenome for blood-based CRC screening[177](index=177&type=chunk) - The company launched its next-generation Cologuard Plus test in late March 2025 and its Oncodetect MRD test in April 2025, with plans to launch its Cancerguard multi-cancer early detection test in Q3 2025[182](index=182&type=chunk) - A multi-year productivity plan is expected to deliver over **$150 million** in annual savings by 2026, primarily from general and administrative efficiencies, with expected restructuring costs of **$105 million to $120 million** through 2026[189](index=189&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Screening revenue grew 18.2% in Q2 2025 due to higher Cologuard test volume, while Precision Oncology revenue increased 8.9% driven by Oncotype DX adoption and sublicense revenue, with R&D expenses decreasing due to non-recurring items - The increase in Screening revenue was primarily due to a higher number of completed Cologuard tests, driven by increases in rescreen rates, care gap programs, and growth in new ordering providers[196](index=196&type=chunk) - Precision Oncology revenue growth was driven by an increase in Oncotype DX breast cancer tests, particularly in Japan, and recognition of **$7.5 million** in sublicense revenue[197](index=197&type=chunk) - Research and development expenses decreased by **10.1% YoY** for the quarter, primarily because Q2 2024 included a **$25.8 million** expense for a license agreement termination[202](index=202&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held $657.1 million in cash and cash equivalents and $201.3 million in marketable securities, with a new undrawn $500.0 million revolving credit agreement, sufficient to fund operations for at least the next 12 months - The company had **$657.1 million** in cash and cash equivalents and **$201.3 million** in marketable securities as of June 30, 2025[214](index=214&type=chunk) - In January 2025, the company entered into a new **$500.0 million** senior secured revolving credit agreement, which was undrawn as of June 30, 2025[212](index=212&type=chunk) - A material cash requirement was met in January 2025 with a **$250.4 million** payment to settle the 2025 Notes upon maturity[221](index=221&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures relate to interest rate risk on its cash, cash equivalents, and marketable securities, and foreign currency risk from its international operations, managed through conservative investment policies and forward contracts - Market risk is primarily confined to cash, cash equivalents, and marketable securities, which are invested in high-quality, investment-grade instruments[227](index=227&type=chunk) - The company uses foreign currency forward contracts to mitigate exchange rate risk, with open contracts having a notional value of **$50.8 million** as of June 30, 2025[231](index=231&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no significant changes in internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[232](index=232&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[233](index=233&type=chunk) [Part II - Other Information](index=47&type=section&id=Part%20II%20-%20Other%20Information) This section covers legal proceedings, risk factors, and other significant corporate events [Item 1. Legal Proceedings](index=47&type=section&id=Legal%20Proceedings) The company is involved in ongoing intellectual property litigation with Geneoscopy, Inc., concerning patent infringement and false advertising, with recent PTAB decisions impacting patent validity - The company is in a legal dispute with Geneoscopy, Inc. over alleged patent infringement of the '781 and '746 patents and violations of the Lanham Act[153](index=153&type=chunk) - On July 9, 2025, the Patent Trial and Appeals Board (PTAB) found all claims of the '781 Patent unpatentable, with a notice of appeal potentially filed by September 10, 2025[154](index=154&type=chunk) [Item 1A. Risk Factors](index=47&type=page&id=Item%201A.%20Risk%20Factors) The company faces key risks including reliance on strategic collaborations, dependence on single-source suppliers, and uncertainties from potential healthcare reforms and evolving reimbursement policies - The company relies on strategic collaborations, such as with Mayo and the new Freenome agreement, and faces risks if these agreements are not maintained or if anticipated benefits are not realized[237](index=237&type=chunk) - Dependence on single-source suppliers like Phillips-Medisize (Cologuard kits), Illumina (sequencing platforms), and Hamilton (lab equipment) poses a significant operational risk[240](index=240&type=chunk)[241](index=241&type=chunk) - Uncertainty related to healthcare reform, including legal challenges to the ACA and changes in Medicare reimbursement under PAMA, could adversely affect coverage and profitability[246](index=246&type=chunk)[247](index=247&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Not applicable [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Defaults%20Upon%20Senior%20Securities) Not applicable [Item 4. Mine Safety Disclosures](index=50&type=section&id=Mine%20Safety%20Disclosures) Not applicable [Item 5. Other Information](index=50&type=section&id=Other%20Information) This section details significant corporate events including a collaboration with Freenome, amendments to executive employment agreements, and a Board of Directors resignation - On August 4, 2025, the company entered into a Collaboration and License Agreement with Freenome to develop and commercialize blood-based CRC screening products, which includes a **$75 million** upfront payment and potential milestones[255](index=255&type=chunk) - On August 5, 2025, the company amended the employment agreements for executives Brian Baranick, Aaron Bloomer, Sarah Condella, and Jake Orville, modifying the acceleration of equity vesting upon certain termination events[259](index=259&type=chunk) - Daniel Levangie resigned from the Board of Directors on August 5, 2025, due to his retirement[261](index=261&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Exhibits) This section lists the documents filed as part of the Form 10-Q, including amendments to employment agreements, certifications, and iXBRL data files

Financial Performance - Q2 2025 - Total revenue reached $811 million in Q2 2025, a 16% year-over-year increase[5] - Adjusted EBITDA for Q2 2025 was $138 million, up 26% year-over-year[5] - Core revenue also grew by 16% in Q2 2025[7] - Screening revenue increased by 18% from $532 million in Q2 2024 to $628 million in Q2 2025[8] - Precision Oncology core revenue increased by 9% from $165 million in Q2 2024 to $179 million in Q2 2025[8] Profitability and Cash Flow - Adjusted EBITDA margin improved to 17% in Q2 2025, an increase of 130 basis points[11] - Free cash flow was $46 million[11] Updated 2025 Guidance - Total revenue guidance updated to $3.13 billion - $3.17 billion, an increase of $55 million at the midpoint[13] - Screening revenue guidance updated to $2.44 billion - $2.47 billion, an increase of $48 million at the midpoint[13] - Adjusted EBITDA guidance updated to $455 million - $475 million, an increase of $25 million at the midpoint[13] Cost Savings Initiatives - A multi-year productivity program aims for $150 million in annual run-rate cost savings by 2026[16, 17]

[Second Quarter 2025 Financial & Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20%26%20Operational%20Highlights) Exact Sciences reported record Q2 2025 revenue of $811 million, a 16% year-over-year increase, driven by strong growth in Screening and Precision Oncology, significantly reducing net loss to $1 million and boosting adjusted EBITDA by 26% to $138 million, alongside key operational advancements Q2 2025 Financial Performance vs. Q2 2024 | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$811 million** | **$699 million** | **+$112 million** | **+16%** | | Screening Revenue | $628 million | - | - | +18% | | Precision Oncology Revenue | $183 million | - | - | +9% | | Net Loss | ($1 million) | ($16 million) | +$15 million | -94% | | Net Loss per Share | ($0.01) | ($0.09) | +$0.08 | -89% | | Adjusted EBITDA | $138 million | $110 million | +$28 million | +26% | | Operating Cash Flow | $89 million | - | - | - | | Free Cash Flow | $47 million | - | - | - | - The company raised its full-year 2025 revenue guidance midpoint by **$55 million** and its adjusted EBITDA guidance midpoint by **$25 million**[4](index=4&type=chunk) - Strategic initiatives in the quarter included an exclusive license agreement with Freenome for blood-based colorectal cancer screening tests and gaining Medicare coverage for the Oncodetect™ molecular residual disease test[4](index=4&type=chunk) - A multi-year productivity plan was announced, targeting **$150 million** in annual savings by 2026[4](index=4&type=chunk) [Platform and Pipeline Advancements](index=2&type=section&id=Platform%20and%20Pipeline%20Advancements) The company advanced its product pipeline with the April 2025 launch of the Oncodetect™ test, which gained Medicare coverage for colorectal cancer patients, and plans to launch the Cancerguard™ multi-cancer screening test in September 2025, alongside an exclusive licensing agreement with Freenome for blood-based colorectal cancer screening - Launched the Oncodetect™ test in April 2025 for molecular residual disease (MRD) and recurrence monitoring, which recently received Medicare coverage for stage II, III, and resectable stage IV colorectal cancer (CRC) patients[6](index=6&type=chunk) - Plans to launch the Cancerguard™ multi-cancer screening test as a laboratory-developed test in September 2025[7](index=7&type=chunk) - In August 2025, acquired exclusive rights to Freenome's current and future blood-based colorectal cancer screening tests and underlying technology[7](index=7&type=chunk) [2025 Outlook](index=2&type=section&id=2025%20Outlook) Exact Sciences raised its full-year 2025 guidance, now expecting total revenue between $3.13 billion and $3.17 billion, representing 14% year-over-year growth at the midpoint, and adjusted EBITDA between $455 million and $475 million, a 44% increase at the midpoint Updated Full-Year 2025 Guidance | Metric | Prior Guidance (Billions/Millions) | August 6 Update (Billions/Millions) | Change at Midpoint (Millions) | Y/Y Growth Rate | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$3.070 - $3.120 billion** | **$3.130 - $3.170 billion** | **+$55.0 million** | **14%** | | Screening Revenue | $2.390 - $2.425 billion | $2.440 - $2.470 billion | +$47.5 million | 17% | | Precision Oncology Revenue | $680 - $695 million | $690 - $700 million | +$7.5 million | 6% | | **Adjusted EBITDA** | **$425 - $455 million** | **$455 - $475 million** | **+$25.0 million** | **44%** | [Product Portfolio Overview](index=3&type=section&id=Product%20Portfolio%20Overview) The company's portfolio encompasses leading non-invasive screening tests like Cologuard® and Cologuard Plus™, advanced diagnostic tests such as Oncotype DX® and Oncodetect™ for therapy selection and recurrence monitoring, comprehensive genetic testing services via PreventionGenetics, and the upcoming Cancerguard™ multi-cancer screening test in its pipeline - **Cologuard® and Cologuard Plus™:** Non-invasive, stool-based colorectal cancer (CRC) screening tests for adults 45+, with the new Cologuard Plus test, launched in Q1 2025, expected to reduce false positives by nearly **40%**[16](index=16&type=chunk)[18](index=18&type=chunk) - **Oncodetect™:** A tumor-informed molecular residual disease (MRD) test that detects circulating tumor DNA (ctDNA) in the blood to guide therapy decisions and monitor for cancer recurrence[19](index=19&type=chunk) - **Cancerguard™:** A multi-cancer early detection test in development, designed to detect multiple cancers from a single blood draw with high specificity[20](index=20&type=chunk)[21](index=21&type=chunk) - **Precision Oncology Portfolio:** Includes the Oncotype DX Breast Recurrence Score® test, a standard of care for predicting chemotherapy benefit, and the OncoExTra® test for comprehensive tumor profiling to aid therapy selection in advanced cancers[22](index=22&type=chunk) - **PreventionGenetics:** An acquired CLIA-accredited laboratory providing clinical genetic testing for nearly all clinically relevant genes, including whole genome and exome sequencing[23](index=23&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) The unaudited financial statements for the three and six months ended June 30, 2025, detail a significant reduction in net loss, a stable asset base with total equity of $2.47 billion, and positive operating and free cash flow for the quarter [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, revenue increased to $811.1 million, gross profit grew to $562.5 million, and the company significantly narrowed its loss from operations to $2.1 million, resulting in a net loss of just $1.2 million Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Line Item | Three Months Ended June 30, 2025 (Thousands) | Three Months Ended June 30, 2024 (Thousands) | | :--- | :--- | :--- | | Revenue | $811,085 | $699,264 | | Gross Profit | $562,453 | $488,316 | | Total Operating Expenses | $564,601 | $518,373 | | Loss from Operations | $(2,148) | $(26,257) | | Net Loss | $(1,185) | $(15,808) | | Net Loss per Share | $(0.01) | $(0.09) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company held $858.4 million in cash and marketable securities, with total assets at $5.80 billion, total liabilities at $3.33 billion, and total stockholders' equity increasing to $2.47 billion Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Thousands) | December 31, 2024 (Thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $657,099 | $600,889 | | Marketable securities | $201,336 | $437,137 | | Total Assets | $5,797,365 | $5,928,139 | | Total Liabilities | $3,327,951 | $3,525,890 | | Total Stockholders' Equity | $2,469,414 | $2,402,249 | [Cash Flow Statement](index=15&type=section&id=Cash%20Flow%20Statement) For Q2 2025, net cash provided by operating activities was $89.0 million, resulting in positive free cash flow of $46.7 million after capital expenditures, a decrease from $71.2 million in the prior year period Cash Flow Summary (in thousands) | Metric | Three Months Ended June 30, 2025 (Thousands) | Three Months Ended June 30, 2024 (Thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $89,017 | $107,065 | | Purchases of property, plant and equipment | $(42,342) | $(35,866) | | **Free Cash Flow** | **$46,675** | **$71,199** | [Non-GAAP Financial Measures & Reconciliations](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) The company provides non-GAAP measures like Core Revenue and Adjusted EBITDA for supplemental performance insights, with Q2 2025 core revenue growth at 16% and Adjusted EBITDA increasing 26% to $138.2 million, alongside detailed reconciliations for various adjustments [Core Revenue Reconciliation](index=8&type=section&id=Core%20Revenue%20Reconciliation) The core revenue reconciliation, adjusting for divestitures and foreign currency impacts, shows Q2 2025 total core revenue of $807.8 million, representing 16% year-over-year growth consistent with reported GAAP revenue Q2 2025 Core Revenue Reconciliation (in thousands) | Segment | GAAP Revenue (Thousands) | Non-GAAP 2024 Base (Thousands) | Foreign Currency Impact (Thousands) | Core Revenue (Thousands) | Core % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Screening | $628,481 | $531,606 | $0 | $628,481 | 18% | | Precision Oncology | $182,604 | $165,111 | $(3,278) | $179,326 | 9% | | **Total** | **$811,085** | **$696,717** | **$(3,278)** | **$807,807** | **16%** | [Adjusted EBITDA Reconciliation](index=9&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for Q2 2025 was $138.2 million, an increase from $110.1 million in Q2 2024, with the reconciliation from net loss of $1.2 million including major adjustments for stock-based compensation, depreciation, amortization, and restructuring costs Q2 2025 Adjusted EBITDA Reconciliation (in thousands) | Line Item | Amount (Thousands) | | :--- | :--- | | Net loss | $(1,185) | | Interest, Tax, Depreciation & Amortization | $65,118 | | Stock-based compensation | $64,939 | | Acquisition and integration costs | $4,910 | | Restructuring and business transformation | $15,240 | | Other adjustments | $(11,926) | | **Adjusted EBITDA** | **$138,224** | [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains standard safe harbor language, cautioning investors that forward-looking statements regarding future operating results, product development, and strategic initiatives are subject to material risks and uncertainties, directing readers to SEC filings for detailed risk discussions - The report contains forward-looking statements about future operating results, product launches (new or improved), commercialization efforts, and benefits from acquisitions and licensing deals[25](index=25&type=chunk) - Investors are cautioned not to place undue reliance on these statements as they are subject to known and unknown risks, including market acceptance of products, competition, reimbursement rates, and regulatory changes[25](index=25&type=chunk)[26](index=26&type=chunk) - A comprehensive list of risks is available in the Risk Factors sections of the company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q[27](index=27&type=chunk)

Core Viewpoint - Keros Therapeutics, Inc. (KROS) is currently more attractive to value investors compared to Exact Sciences (EXAS) based on various valuation metrics and analyst outlooks [1][3]. Valuation Metrics - KROS has a forward P/E ratio of 70.11, significantly lower than EXAS's forward P/E of 303.06 [5]. - The PEG ratio for KROS is 2.62, while EXAS has a much higher PEG ratio of 10.35, indicating KROS may be undervalued relative to its expected earnings growth [5]. - KROS's P/B ratio stands at 0.81, compared to EXAS's P/B of 3.82, further suggesting KROS is more favorably valued [6]. Analyst Ratings - KROS holds a Zacks Rank of 1 (Strong Buy), while EXAS has a Zacks Rank of 2 (Buy), indicating a stronger earnings estimate revision activity for KROS [3][7]. - The Value grade for KROS is B, whereas EXAS has a Value grade of C, reflecting KROS's superior valuation metrics [6].

Industry Overview - The cancer diagnostics market is experiencing steady growth due to increasing demand for early cancer detection, technological advancements, and the importance of personalized medicine [1] - Companies like Hologic and Exact Sciences are gaining investor attention for their strong positioning in the cancer diagnostics space [1] Hologic Analysis - Hologic's growth is driven by a combination of organic and inorganic innovation, particularly in its Diagnostics division led by the Molecular Diagnostics unit [3] - The company holds nearly 80% of the U.S. market share in Breast Health with its 3D Genius mammography machine [4] - Hologic's Surgical division is expanding internationally, supported by market development efforts and acquisitions [5] - The company reported a 30% operating margin in Q2 of fiscal 2025, despite challenges such as tariff-related inventory cost increases [7] - Hologic's revenue outlook for China has been trimmed to reduce geopolitical risk exposure [6] Exact Sciences Analysis - Exact Sciences is undergoing a transformative phase in 2025, with its Cologuard CRC screening test gaining momentum [8] - The company is advancing its innovation pipeline, including the launch of Cologuard Plus and Oncodetect, which have secured Medicare coverage [10] - Exact Sciences reported a 61% year-over-year increase in adjusted EBITDA, supported by productivity and cost-cutting initiatives [11] - The company is focused on boosting free cash flow, although high debt levels remain a concern [12] Financial Projections - Hologic's fiscal 2025 EPS is estimated to improve by 2.7% to $4.19, with estimates trending downward in the last 90 days [13] - Exact Sciences has a consensus EPS estimate of 16 cents for 2025, reflecting a 169.6% improvement, with bullish trends in analyst estimates [14] Price Performance & Valuation - Over the past year, Hologic shares have decreased by 15.9%, while Exact Sciences shares have increased by 7.4% [15] - Hologic's forward price-to-sales ratio is 3.47X, lower than the industry average of 4.34X, while Exact Sciences' ratio is 2.76X [16] Conclusion - Hologic's diversified business model and strong balance sheet support its long-term growth outlook, despite potential economic pressures [18] - Exact Sciences is benefiting from Cologuard adoption and a strong innovation pipeline, making it a more appealing investment option at present [19]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to complement the Zacks Rank, aiding investors in selecting stocks likely to outperform the market in the short term [2] Zacks Style Scores Overview - Stocks are rated from A to F based on value, growth, and momentum characteristics, with A being the highest score [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - Evaluates a company's financial health and future potential through projected earnings and sales growth [4] Momentum Score - Targets stocks with upward or downward price trends, utilizing recent price changes and earnings estimate shifts [5] VGM Score - Combines the three Style Scores to identify stocks with the best overall value, growth, and momentum [6] Zacks Rank Integration - The Zacks Rank leverages earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically outperformed the S&P 500, with an average annual return of +23.62% since 1988 [8] Stock Selection Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with lower ranks but high Style Scores may still present risks due to declining earnings forecasts [11] Company Spotlight: Exact Sciences (EXAS) - Exact Sciences is a molecular diagnostics firm specializing in cancer detection and prevention, focusing on colorectal cancer screening and multi-cancer tests [12] - The company holds a Zacks Rank of 2 (Buy) and a VGM Score of B, indicating strong potential [12] - Forecasts suggest a remarkable year-over-year earnings growth of 169.6% for the current fiscal year, with a recent upward revision in earnings estimates [13]

Core Viewpoint - Exact Sciences (EXAS) shows potential for significant upside, with a mean price target of $68.55 indicating a 26.2% increase from the current price of $54.3 [1] Price Targets and Analyst Consensus - The average price target consists of 22 estimates ranging from $54.00 to $90.00, with a standard deviation of $7.85, indicating variability in analyst predictions [2] - The lowest estimate suggests a minor decline of 0.6%, while the highest indicates a potential upside of 65.8% [2] - A low standard deviation signifies strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about EXAS's earnings prospects, as evidenced by a strong consensus in revising EPS estimates higher [11] - Over the past 30 days, one estimate has increased, leading to a Zacks Consensus Estimate rise of 255.6% [12] - EXAS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors [13] Caution on Price Targets - Solely relying on price targets for investment decisions may not be prudent, as analysts' ability to set accurate targets has been questioned [3][7] - Analysts often set optimistic price targets due to business incentives, which can lead to inflated estimates [8] - While price targets should not be ignored, they should be approached with skepticism and not be the sole basis for investment decisions [10]

Core Insights - Investors in the Medical - Biomedical and Genetics sector should consider Qiagen (QGEN) and Exact Sciences (EXAS) for potential value opportunities [1] Valuation Metrics - Both QGEN and EXAS currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] - QGEN has a forward P/E ratio of 20.46, significantly lower than EXAS's forward P/E of 345.69, suggesting QGEN may be undervalued [5] - The PEG ratio for QGEN is 2.44, while EXAS has a much higher PEG ratio of 11.81, indicating QGEN's expected earnings growth is more favorable [5] - QGEN's P/B ratio is 3.13 compared to EXAS's P/B of 4.35, further supporting QGEN as the more attractive value option [6] - Based on various valuation metrics, QGEN holds a Value grade of B, while EXAS has a Value grade of C, reinforcing QGEN's position as the superior value stock [6]

Core Viewpoint - Exact Sciences (EXAS) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook for the company's earnings potential and stock price movement [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is influenced by changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to institutional investors adjusting their valuations, resulting in buying or selling actions that affect stock prices [4]. Company Performance and Outlook - Exact Sciences is projected to earn $0.16 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Exact Sciences has increased by 127%, reflecting a positive trend in earnings estimates [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating [9][10]. - The upgrade of Exact Sciences to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].