Core Viewpoint - Myriad Genetics, Inc. reported a narrower adjusted loss in Q1 2025 compared to the previous year, but total revenues fell short of expectations and decreased year-over-year, leading to a significant drop in share price after the announcement [1][3][10]. Financial Performance - The adjusted loss per share was 3 cents, which was 40% better than the Zacks Consensus Estimate, while the GAAP EPS remained flat compared to a loss of 29 cents in the prior year [1][2]. - Total revenues decreased by 3.1% year-over-year to $195.9 million, missing the Zacks Consensus Estimate by 2% [3]. - Testing volumes increased by 1% year-over-year [3]. Revenue Breakdown - Hereditary Cancer testing revenues fell by 2% year-over-year to $86.3 million [4]. - Pharmacogenomics testing revenues decreased by 20% year-over-year to $31 million [4]. - Tumor Profiling testing revenues declined by 5% year-over-year to $29.3 million [4]. - Prenatal testing revenues increased by 11% year-over-year to $49.3 million [4]. Margin and Expense Analysis - Gross margin improved by 45 basis points to 68.5%, despite a 4.5% decrease in the cost of revenues [5]. - Research and development expenses rose by 10.4% year-over-year to $27.5 million, while SG&A expenses slightly decreased by 0.3% to $69 million [5]. - The adjusted operating loss was $29 million, compared to a loss of $27.9 million in the previous year [5]. Financial Position - At the end of Q1 2025, cash and cash equivalents were $91.8 million, down from $102.4 million at the end of Q4 2024 [6]. - Long-term debt increased to $59.3 million from $39.6 million at the end of Q4 2024 [6]. - Cumulative net cash outflow from operating activities was $16.3 million, an improvement from $18.6 million in the prior year [6]. Guidance and Outlook - The company revised its 2025 revenue guidance to a range of $807-$823 million, down from the previous estimate of $840-$860 million, reflecting challenges in the pharmacogenomics and hereditary cancer testing segments [7]. - Adjusted EPS guidance was also lowered to a loss of 2 cents to earnings of 2 cents, compared to the previous range of 7-11 cents [8]. Business Developments - The decline in GeneSight revenues was attributed to changes in UnitedHealthcare's coverage policy and a reallocation of marketing spend [10]. - The hereditary business faced challenges due to slower-than-expected electronic medical record integrations [10]. - Positive developments included growth in Prenatal testing and the upcoming commercial launch of an AI-driven prostate cancer test in partnership with PATHOMIQ by the end of 2025 [11].

Revenue Performance - Total revenue for the three months ended March 31, 2025, was $195.9 million, a decrease of $6.3 million (3.1%) compared to $202.2 million in the same period of 2024[90]. - Hereditary Cancer revenue decreased by $1.8 million (2.0%) to $86.3 million, while Prenatal revenue increased by $5.0 million (11.3%) to $49.3 million[90][94]. - Pharmacogenomics revenue fell by $7.9 million (20.3%) to $31.0 million, primarily due to a 22% decrease in average revenue per test[91]. Cost and Expenses - Cost of revenue decreased by $2.9 million (4.5%) to $61.7 million, with cost of revenue as a percentage of total revenue slightly improving to 31.5%[95]. - Research and development expenses increased by $2.6 million (10.4%) to $27.5 million, reflecting the company's commitment to innovation[96]. - Total operating expenses were $163.2 million, a decrease of $2.3 million (1.4%) compared to $165.5 million in the prior year[96]. Other Income and Tax - Other income (expense), net decreased by $2.4 million (120.0%) to $(0.4) million, primarily due to a prior period gain from the Precise Tumor acquisition[97]. - Income tax benefit for Q1 2025 was $29.3 million, with an effective tax rate of 99.7%, compared to an expense of $0.1 million and a rate of (0.4)% in Q1 2024[99]. - The effective tax rate for Q1 2025 was influenced by the release of unrecognized tax benefits related to tax refund claims[99]. Cash Flow and Financing - Cash and cash equivalents decreased by $10.6 million from $102.4 million as of December 31, 2024, to $91.8 million as of March 31, 2025, primarily due to $16.3 million used in operations[109]. - Cash flows used in operating activities improved by $2.3 million in Q1 2025, totaling $(16.3) million compared to $(18.6) million in Q1 2024[110]. - Cash flows from financing activities increased by $22.4 million in Q1 2025, primarily due to $19.5 million in incremental borrowings from the ABL Facility[113]. - As of March 31, 2025, the company had $60.0 million outstanding under the ABL Facility, with $41.9 million available for borrowing[105]. - The company expects to receive a tax refund of approximately $13 million during 2025, including interest, following the review of tax refund claims related to the CARES Act[103]. - The company experienced a decrease in cash flows from investing activities, which increased by $1.2 million to $(8.3) million in Q1 2025, primarily due to higher expenditures for internal-use software[112]. Leadership and Strategy - New leadership appointments include Samraat Raha as President and CEO, effective April 30, 2025[92]. - The company plans to continue investing in clinical evidence development to support existing products and the launch of new products like FirstGene and Precise Liquid[86]. - The company aims to enhance customer experience and expand sales channels, particularly into large health systems[86]. Risk Factors - The company is subject to covenants under the ABL Facility that may limit its ability to incur additional indebtedness[106]. - Approximately 7% of the company's revenue for Q1 2025 was denominated in currencies other than the U.S. dollar, primarily Japanese yen, exposing it to foreign currency exchange risks[117].

Core Insights - Myriad Genetics reported $195.9 million in revenue for the quarter ended March 2025, reflecting a year-over-year decline of 3.1% and an EPS of -$0.03 compared to -$0.01 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $199.96 million by 2.03%, while the EPS exceeded the consensus estimate of -$0.05 by 40% [1] Revenue Performance by Product - Prenatal revenue reached $49.30 million, surpassing the estimated $44.69 million, marking a year-over-year increase of 59.6% [4] - Hereditary Cancer revenue was $86.30 million, below the average estimate of $92.46 million, representing a year-over-year decline of 2% [4] - Pharmacogenomics revenue totaled $31 million, slightly below the estimated $32.46 million, with a year-over-year decrease of 20.3% [4] - Tumor Profiling revenue was $29.30 million, compared to the average estimate of $30.66 million, indicating a year-over-year decline of 5.2% [4] Stock Performance - Myriad's shares have returned -4.6% over the past month, contrasting with the Zacks S&P 500 composite's increase of 11.5% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Group 1 - Myriad Genetics reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.05, and compared to a loss of $0.01 per share a year ago, indicating a 40% earnings surprise [1] - The company posted revenues of $195.9 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.03%, and down from $202.2 million year-over-year [2] - Myriad shares have declined approximately 43.8% since the beginning of the year, contrasting with the S&P 500's decline of 3.9% [3] Group 2 - The earnings outlook for Myriad is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend for estimate revisions for Myriad is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $210.73 million, and for the current fiscal year, it is $0.09 on revenues of $845.32 million [7] Group 3 - The Medical - Biomedical and Genetics industry, to which Myriad belongs, is currently in the top 31% of over 250 Zacks industries, indicating a favorable outlook for stocks in this sector [8] - Wave Life Sciences, another company in the same industry, is expected to report a quarterly loss of $0.27 per share, reflecting a year-over-year change of -12.5%, with revenues anticipated to be $13.97 million, up 11.4% from the previous year [9][10]

Financial Data and Key Metrics Changes - The company reported Q1 revenue of $196 million, a decline of 3% year over year, at the lower end of the target range [7][10] - Excluding certain impacts, Q1 revenue grew 5% year over year [9][22] - Average revenue per test decreased by 4%, while test volume increased by 1% [22][23] - Gross margin improved by 50 basis points to 69% due to lab efficiencies [23][24] - The company updated its 2025 revenue guidance, lowering it by $35 million from the prior midpoint [10][28] Business Line Data and Key Metrics Changes - Prenatal testing revenue grew by 11% year over year, with strong demand for carrier screening and NIPS tests [12][18] - Oncology revenue declined by 2%, with MiRisk test volume growing by 11% year over year [15][16] - GeneSight revenue decreased by 20% year over year, primarily due to UnitedHealthcare's policy change [19][20] - Women's health revenue increased by 4%, driven by prenatal testing, but was partially offset by weakness in unaffected hereditary cancer testing [18][19] Market Data and Key Metrics Changes - The company faced challenges in the unaffected hereditary cancer testing market due to slower EMR integrations and workflow disruptions [13][14] - The overall demand for oncology tests remains consistent with 2024 trends, despite some confusion over updated NCCN guidelines [17][18] - The company continues to see positive momentum from breast cancer risk assessment programs, although they are not yet at scale [14][19] Company Strategy and Development Direction - The company is focusing on oncology as a cornerstone of its strategy, aiming to serve the continuum of cancer care [29][40] - Plans are in place to reduce overall projected spending while prioritizing investments in high-value new product development [10][11] - The management team is committed to simplifying the business narrative and focusing on core growth areas [38][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2025 and emphasized the importance of oncology in the company's future [29][39] - The company is optimistic about addressing workflow disruptions and improving test volume growth in the coming quarters [14][39] - Management expressed confidence in the potential for sustained profitable growth and market share increase [30][39] Other Important Information - The company plans to launch several new products, including a combined carrier screening and NIPS assay, and an AI-enabled test by the end of the year [11][12] - An income tax benefit of $29.3 million was recognized in Q1, expected to result in cash tax refunds [25][26] Q&A Session Summary Question: Concerns about the complexity of the company's situation - Management acknowledged the complexity and indicated that it would take several months to simplify the narrative and focus on core growth areas [36][39] Question: Update on GeneSight's revenue headwind - Management confirmed a $10 million revenue headwind in Q1 due to UnitedHealthcare's coverage change, with no expected impact from other payers [46][52] Question: Coverage updates from other payers - Management stated that there have been no indications of coverage changes from other payers and noted some recent wins in coverage [53][54] Question: Impact of UnitedHealthcare on prescription patterns - Management reported no significant changes in provider behavior regarding GeneSight prescriptions despite the coverage changes [55] Question: Details on EMR integration challenges - Management explained that EMR integration for unaffected testing requires additional features and workflows, which take time to implement [68][70] Question: Market growth expectations for Polaris - Management indicated that the market for Polaris is expected to grow at low double-digit rates, with ongoing efforts to enhance competitive positioning [78][79]

Financial Performance - Q1 2025 - Total revenue decreased by 3% year-over-year (YOY) [6, 24], but increased by 5% YOY excluding specific factors like UNH GeneSight impact, EndoPredict divestiture, and a one-time retroactive coverage benefit from Q1 2024 [6] - Adjusted Gross Margin increased by 50 basis points YOY [24], reaching 69% in Q1 2025 [24, 40] - Adjusted Operating Expenses increased by 1% YOY [7, 24], with $140.6 million in Q1 2025 compared to $139.1 million in Q1 2024 [42] - Adjusted EPS was $(0.03) in Q1 2025, compared to $(0.01) in Q1 2024 [24, 45] - Adjusted EBITDA was $(0.1) million in Q1 2025, a decrease from $4 million in Q1 2024 [29, 47] - Adjusted free cash flow was $(18.7) million in Q1 2025, compared to $(17.9) million in Q1 2024 [30, 49] Segment Performance - Q1 2025 - Hereditary Cancer testing (HCT) revenue decreased by 2% YOY [11, 12], while HCT affected population revenue and volume grew by 0% and 5% YOY, respectively [12] - MyRisk with RiskScore testing revenue and volume in the affected population grew by 4% and 11% YOY, respectively [12, 15] - Prenatal revenue increased by 11% YOY [10], driven by Foresight and Prequel (+10% volume growth) [6, 18] - GeneSight testing revenue decreased by 20% YOY [12], while testing volume grew by 2% YOY [12] Updated 2025 Financial Guidance - Total revenue guidance lowered to a range of $807 million - $823 million [32], a $35 million reduction at the midpoint [7] - Adjusted operating expenses guidance moderated to a range of $555 million - $565 million [32], a $25 million reduction at the midpoint [7] - Adjusted EPS guidance midpoint is at breakeven, ranging from $(0.02) to $0.02 [7, 32]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $196 million, a decline of 3% year over year, at the lower end of the target range [5][20] - Excluding certain impacts, total Q1 revenue grew 5% year over year [6][23] - Average revenue per test decreased by 4%, while test volume increased by 1% [20][21] - Gross margin improved by 50 basis points to 69% due to lab efficiencies [21][22] - The company updated its 2025 financial guidance, lowering annual revenue expectations by $35 million and operational expenses by $25 million [7][25] Business Line Data and Key Metrics Changes - Prenatal testing revenue grew by 11% year over year, while hereditary cancer revenue declined by 2% [10][21] - GeneSight revenue decreased by 20% year over year, primarily due to changes in UnitedHealthcare's coverage policy [12][17] - MiRisk test volume grew by 11% year over year, contributing positively to oncology revenue, which declined by 2% overall [12][13] - Women's health revenue reached $87 million, a 4% increase year over year, driven by strong prenatal testing performance [15][16] Market Data and Key Metrics Changes - The company faced headwinds from UnitedHealthcare's policy changes affecting GeneSight, resulting in a $10 million revenue impact in Q1 [43][44] - The overall market for unaffected hereditary cancer testing is projected to grow, but the company is currently experiencing slower ramp-up due to EMR integration challenges [11][64] - The company remains optimistic about the potential for growth in the hereditary cancer market, which is valued at approximately $4.5 billion [54] Company Strategy and Development Direction - The company is focusing on oncology as a cornerstone of its strategy, aiming to enhance its offerings across the cancer care continuum [26][36] - Plans are in place to prioritize investments in high-value new product development, including AI-enabled tests and MRD testing [8][26] - The management team is committed to simplifying the business narrative and focusing on core growth areas [35][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging first quarter but expressed optimism about addressing operational challenges and improving performance [5][26] - The company is actively working on strategies to increase test volumes for GeneSight and MiRisk, despite projecting softer volumes for these tests [7][11] - Management emphasized the importance of execution excellence and the need for a compelling strategy to drive future growth [26][36] Other Important Information - The company recognized a one-time income tax benefit of $29.3 million in Q1, expected to result in cash tax refunds [22] - The company is on track to launch several new products, including a combined carrier screening and NIPS assay and an AI-enabled test by the end of the year [8][26] Q&A Session Summary Question: Concerns about the complexity of the company's situation - Management acknowledged the complexity and indicated that it would take several months to simplify the narrative and focus on key growth metrics [33][36] Question: Update on GeneSight's revenue headwind - Management confirmed a $10 million revenue headwind in Q1 due to UnitedHealthcare's coverage changes, with no expected impact from other payers [43][44] Question: Coverage updates from other payers - Management stated that there have been no indications of coverage changes from other payers and noted recent wins in incremental coverage for GeneSight [48] Question: Changes in provider prescription patterns - Management reported no significant changes in provider behavior regarding GeneSight prescriptions, despite the coverage challenges [50] Question: Portfolio evaluation and potential divestitures - Management emphasized a thorough evaluation of the portfolio, with a focus on oncology, while remaining open to strategic adjustments [52][54] Question: EMR integration challenges - Management explained that EMR integration for unaffected testing is complex and requires time to implement effectively [64] Question: Market growth expectations for Polaris - Management indicated that the market for Polaris is expected to grow at low double-digit rates, with ongoing efforts to enhance competitive positioning [72]

Financial Performance - First quarter 2025 revenue was $196 million, a decline of 3% year-over-year, but increased by 5% when excluding headwinds of $16 million[5]. - Revenue for the three months ended March 31, 2025, was $195.9 million, a decrease of 3.1% compared to $202.2 million in the same period of 2024[25]. - Prenatal revenue grew by 11% year-over-year, while Pharmacogenomics revenue declined by 20% due to UnitedHealthcare's reduced coverage of GeneSight[5]. - The Oncology business generated revenue of $77.7 million in the first quarter of 2025, with hereditary cancer testing volume growing by 5% year-over-year[11]. - The company reported a GAAP net loss of $0.1 million, or $0.00 EPS, with an adjusted EPS of $(0.03) for the first quarter 2025[5]. - The net loss for the three months ended March 31, 2025, was $0.1 million, a significant improvement compared to a net loss of $26.0 million in the prior year[25]. - Adjusted EBITDA for Q1 2025 was $(0.1) million, down from $4.0 million in Q1 2024, reflecting challenges in operational performance[58]. - Adjusted Free Cash Flow for Q1 2025 was $(18.7) million, slightly worse than $(17.9) million in Q1 2024, indicating ongoing cash flow pressures[64]. Margins and Expenses - First quarter 2025 gross margin was 69%, an increase of 40 basis points year-over-year, attributed to greater laboratory efficiencies[5]. - Gross profit for the same period was $134.2 million, down from $137.6 million, resulting in a gross margin of 68.4%[25]. - Adjusted gross profit for the period was $135.1 million, with an adjusted gross margin of 69.0%, compared to 68.5% in the previous year[40]. - Operating expenses for the first quarter of 2025 were $163.2 million, a decrease of $2.3 million year-over-year, while adjusted operating expenses increased to $140.6 million[8]. - Total operating expenses decreased to $163.2 million from $165.5 million year-over-year, with research and development expenses increasing to $27.5 million from $24.9 million[25]. - Real estate optimization costs for Q1 2025 were $4.0 million, down from $6.2 million in Q1 2024, showing improved cost management[64]. - Equity compensation expenses decreased to $9.5 million in Q1 2025 from $11.9 million in Q1 2024, indicating a reduction in non-cash compensation[53]. Cash Flow and Liquidity - Cash flow used in operations was $16.3 million, with adjusted cash flow used in operations at $10.4 million, a decrease of $1.1 million year-over-year[9]. - The company reported a net cash used in operating activities of $16.3 million, an improvement from $18.6 million in the same period last year[30]. - Cash and cash equivalents at the end of the period were $101.0 million, down from $105.6 million at the end of March 2024[30]. Debt and Assets - Long-term debt increased to $59.3 million from $39.6 million year-over-year, indicating a rise in financial leverage[28]. - Total assets decreased to $1,006.1 million from $1,027.6 million, reflecting a reduction in overall company resources[28]. Future Outlook - Updated financial guidance for 2025 includes revenue expectations of $807 - $823 million and adjusted EPS range of $(0.02) - $0.02[5][16]. - The company plans to commercially launch its first AI-driven prostate cancer test by the end of 2025, in partnership with PATHOMIQ[11][32]. Shareholder Impact - Weighted average shares outstanding increased to 91.4 million in Q1 2025 from 89.9 million in Q1 2024, reflecting potential dilution[53]. - The company recognized an uncertain tax benefit of $(28.7) million in Q1 2025, which was not present in Q1 2024, impacting net loss calculations[53]. Other Adjustments - The company reported $1.9 million in other adjustments for Q1 2025, compared to $1.2 million in Q1 2024, indicating increased one-time expenses[64]. - Capital expenditures for Q1 2025 were $5.3 million, down from $6.7 million in Q1 2024, reflecting a reduction in investment spending[64]. - Adjusted Operating Loss for Q1 2025 was $5.5 million, compared to $0.6 million in Q1 2024, indicating a significant increase in losses[48].

Core Insights - Myriad Genetics reported a challenging first quarter of 2025, with mixed performance across its product lines, leading to a reduction in its financial guidance for the year [3][5][17] Financial Performance - First quarter 2025 revenue was $196 million, a decline of 3% year-over-year, but a 5% increase when excluding $16 million in headwinds [5] - Gross margin for the first quarter was 69%, an increase of 40 basis points year-over-year, attributed to improved laboratory efficiencies [5] - The company reported a GAAP net loss of $0.1 million, or $0.00 EPS, influenced by a $29 million tax benefit, while adjusted EPS was $(0.03) [5][12] Product Volumes and Revenue - Total product volumes increased by 1% year-over-year to 385,000 tests, with notable growth in prenatal testing volumes, which rose by 11% [6][5] - Hereditary cancer testing revenue decreased by 2% year-over-year to $86.3 million, while tumor profiling revenue fell by 5% to $29.3 million [5][24] - Pharmacogenomics revenue saw a significant decline of 20% year-over-year, primarily due to UnitedHealthcare's reduction in coverage for GeneSight tests [5][15] Updated Financial Guidance - The updated financial guidance for 2025 includes a revenue range of $807 - $823 million, down from the initial guidance of $840 - $860 million [17] - Adjusted EPS guidance was revised to a range of $(0.02) - $0.02, reflecting the current business outlook [17] Cash Flow and Liquidity - Cash flow used in operations for the first quarter was $16.3 million, with adjusted cash flow used in operations at $10.4 million, a decrease of $1.1 million year-over-year [8] - As of March 31, 2025, the company had cash and cash equivalents of $92 million, with an additional $42 million available under its asset-based credit facility [9] Business Segment Performance - The Oncology segment generated revenue of $77.7 million, while the Women's Health segment contributed $87.2 million in revenue for the first quarter of 2025 [10][11] - MyRisk testing volume in the affected population grew by 11% year-over-year, indicating a positive trend in hereditary cancer testing despite revenue challenges [13] Operational Highlights - Operating expenses for the first quarter were $163.2 million, a slight decrease from the previous year, while adjusted operating expenses increased to $140.6 million [12] - The company is focusing on reducing overall expenditures while prioritizing investments in new product development and revenue growth initiatives [3][5]

Group 1 - Myriad Genetics (NASDAQ: MYGN) is initiated at a Buy rating, indicating a favorable investment opportunity at current stock levels [1] - The stock is trading near multi-year lows around $7, suggesting an attractive risk/reward profile [1] - The valuation implies under 1× forward sales despite the company experiencing double-digit revenue growth [1]