UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193 For the transition period from to Commission File Number: 001-35756 NEOGENOMICS, INC. (Exact name of registrant as specified in its charter) Nevada 74-2897368 (State or other jurisdiction of incorpora ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193 For the transition period from to (Registrant's telephone number, including area code) Commission File Number: 001-35756 NEOGENOMICS, INC. (Exact name of registrant as specified in its charter) Nevada 74-2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 9490 NeoGenomics Way, Fort Myers, ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193 For the transition period from to Commission File Number: 001-35756 NE ...

Financial Data and Key Metrics Changes - First quarter revenue was $137 million, a 17% increase over the prior year, marking the highest revenue growth by quarter since Q2 of 2021 [12][34] - Adjusted EBITDA improved 63% to negative $7 million, highlighting significant improvements driven by higher gross profit and lower operating expenses [18][37] - Adjusted gross margin was 43.5%, an improvement of 670 basis points over the first quarter of last year [18] Business Line Data and Key Metrics Changes - Clinical services revenue increased 16% to $115 million, driven by a 7% increase in volume and higher revenue per test [12][74] - Pharma services revenue increased 22% to $22 million, driven by both price and higher volume in Pharma, as well as strong revenue growth from Informatics [35] - Average revenue per clinical test increased by 8% to $402, representing an improvement for the eighth consecutive quarter [17] Market Data and Key Metrics Changes - The company has a significant share of oncology patient testing volume in the U.S. and one of the largest patient oncology databases [13] - The first quarter was noted for the highest volume of tests per quarter in the history of NeoGenomics, indicating strong market demand [2] Company Strategy and Development Direction - The company aims to profitably grow its core business, accelerate advanced diagnostics, drive value creation, and enhance people and culture over the next 18 to 24 months [31] - The launch of the RaDaR assay for minimal residual disease (MRD) detection is a key strategic initiative, with plans for further indications [32][68] - The company is focused on operational efficiencies and plans to continue investing in the business to capitalize on future growth opportunities [69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to historical margins by 2026, emphasizing the importance of executing strategic initiatives [7] - The company is optimistic about the growth trajectory, citing strong revenue growth and improved operational performance [20][30] - Management acknowledged potential risks, including supply chain issues, but remains focused on long-term sustainable growth [118] Other Important Information - The company ended the first quarter with cash and marketable securities of $418 million, with a cash burn of $20 million, an improvement of over 40% from Q1 2022 [19] - The company is revising its full-year revenue guidance upward to between $555 million and $565 million, representing 9% to 11% growth [37] Q&A Session Summary Question: What are some of the things that you're watching out for in the guidance? - Management indicated that they are gaining visibility on revenue cycle initiatives and pricing success, contributing to their confidence in the guidance [24] Question: Can you provide more details on the salesforce structure and any major wins? - Management noted that they are winning more accounts than losing, indicating a positive trend in sales performance [48] Question: How do you view the competitive landscape with recent acquisitions in the market? - Management acknowledged competition but expressed confidence in their market position and the growth potential of the MRD market [72] Question: Can you elaborate on the drivers of increased volume that led to the revenue beat? - Management highlighted the impact of new hires with industry experience and improved turnaround times as key factors [110][112] Question: What are the expectations for pricing sustainability moving forward? - Management believes that the pricing improvements are sustainable and that they have under-managed pricing historically [141] Question: How do you plan to enhance your revenue cycle management? - Management is evaluating their current revenue cycle platform and plans to enhance it, with a focus on capital investment in 2024 [121]

2 1st Quarter Clinical Services Revenue per Test • 8th Consecutive Quarter of Revenue per Test Growth • Revenue per Test Increased 8% over Prior Year to $402 • Focused on Higher-Value Tests • Positive Contributions from Strategic Reimbursement Initiatives Q2 Q3 Q4 Q1 • Gross Margin Improved 620 bps, representing the Third Consecutive Quarter of 500 bps+ of Improvement • Revenue: Highest Revenue Growth by Quarter Since Q2 of 2021. Drivers are increases in revenue per test, volume and Pharma Services revenue. ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) NeoGenomics is a specialized oncology diagnostics company providing a comprehensive range of cancer testing services through its global network of laboratories [Overview and Testing Services](index=4&type=section&id=Item%201.%20Business-Overview%20and%20Testing%20Services) NeoGenomics operates a network of cancer-focused laboratories offering a wide array of oncology diagnostic services to a global client base - The company operates a network of **CAP-accredited and CLIA-certified laboratories** in the United States, Europe, and Asia[16](index=16&type=chunk)[17](index=17&type=chunk) - NeoGenomics provides a comprehensive suite of oncology testing services, including cytogenetics, Fluorescence In-Situ Hybridization (FISH), flow cytometry, Immunohistochemistry (IHC), advanced molecular testing (such as PCR and NGS), and morphologic analysis[18](index=18&type=chunk) [Reportable Segments](index=5&type=section&id=Item%201.%20Business-Reportable%20Segments) The company operates through two segments, with Clinical Services accounting for 82% of 2022 revenue and Pharma Services accounting for the remaining 18% Revenue by Segment (FY 2022) | Segment | Revenue Percentage | | :--- | :--- | | Clinical Services | 82% | | Pharma Services | 18% | - The Clinical Services segment offers testing to community-based pathologists, oncologists, and hospitals, and is a leading provider of Molecular and NGS testing, including liquid biopsy assays like InVisionFirst®-Lung and RaDaR®[22](index=22&type=chunk)[23](index=23&type=chunk) - The Pharma Services segment supports pharmaceutical companies throughout the drug development process, from biomarker discovery to clinical trials and commercialization of companion diagnostics (CDx)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Markets and Strategy](index=6&type=section&id=Item%201.%20Business-Markets%20and%20Strategy) The company operates in the high-growth Genetic and Molecular testing market, with a 2023 strategy focused on core business growth, advanced diagnostics, and profitability - The company operates mainly in the **Genetic and Molecular testing market**, which is the fastest-growing segment due to the rise of predictive testing for personalized medicine[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - Key market growth drivers include an aging population, new targeted drug development requiring companion diagnostics, increased patient and payer awareness, and decreasing testing costs[36](index=36&type=chunk) - The company's 2023 focus areas are: 1) **Profitably Grow Core Business**, 2) **Accelerate Advanced Diagnostics** (launch clinical RaDaR™ and new NGS offerings), and 3) **Improve Profitability** (increase efficiency, manage spending)[37](index=37&type=chunk) [Competition, Suppliers, and Payer Mix](index=9&type=section&id=Item%201.%20Business-Competition%2C%20Suppliers%2C%20and%20Payer%20Mix) NeoGenomics faces intense competition, relies on key suppliers, and has a clinical payer mix dominated by client direct billing at 67% in 2022 - Competitors in the Clinical Services segment include major national labs (Quest, LabCorp) and specialized genomics companies (Guardant, Natera), while the Pharma Services segment competes with large CROs[47](index=47&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - The company relies on certain suppliers for specific reagents and equipment and experienced some supply chain disruptions in 2021 and 2022[51](index=51&type=chunk) Net Clinical Revenue Payer Mix | Payer Type | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Client direct billing | 67% | 63% | 63% | | Commercial insurance | 17% | 19% | 20% | | Medicare and other government | 16% | 18% | 17% | [Human Capital and Government Regulation](index=10&type=section&id=Item%201.%20Business-Human%20Capital%20and%20Government%20Regulation) The company employed approximately 2,100 people at year-end 2022 and is subject to extensive governmental regulation, including potential FDA oversight of LDTs - As of year-end 2022, the company had approximately **2,100 full-time equivalent employees** and a medical/scientific team of about 170 MDs and PhDs[58](index=58&type=chunk)[59](index=59&type=chunk) - The company reports a diverse workforce, with **women making up 58% of global employees** and 68% of the top two management tiers, while ethnically diverse individuals comprise 54% of the workforce[61](index=61&type=chunk) - The company is subject to extensive regulation, including **CLIA** for laboratory certification, the **Stark Law** and **Anti-Kickback Statute** governing relationships with referral sources, the **False Claims Act** for billing, and **HIPAA** for patient data privacy[66](index=66&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk)[85](index=85&type=chunk) - The regulatory framework for Laboratory Developed Tests (LDTs) remains uncertain, with potential for increased FDA oversight through legislation like the proposed **VALID Act**, which could increase regulatory burdens and costs[72](index=72&type=chunk)[73](index=73&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, financial, and regulatory risks, including technological change, price competition, debt obligations, and evolving LDT regulations [Risks Relating to Our Business](index=18&type=section&id=Item%201A.%20Risk%20Factors-Risks%20Relating%20to%20Our%20Business) Business risks stem from rapid scientific change, intense price competition, reliance on third-party payers, and the vulnerability of IT systems to cyber-attacks - The genetic testing market is characterized by **rapid scientific developments**, and new tests from competitors could prove superior and replace existing offerings[100](index=100&type=chunk) - The company faces **intense price competition** from larger laboratories, which could negatively impact net earnings and cash flows[102](index=102&type=chunk)[103](index=103&type=chunk) - The business depends on information technology systems that are **susceptible to cyber-attacks**, which could lead to increased costs, lost revenue, and legal or regulatory penalties[118](index=118&type=chunk)[119](index=119&type=chunk) [Risks Related to Our Common Stock and Indebtedness](index=23&type=section&id=Item%201A.%20Risk%20Factors-Risks%20Related%20to%20Our%20Common%20Stock%20and%20Indebtedness) The company's stock price is volatile, and its significant convertible note obligations pose a risk to cash flow and could dilute stockholder ownership - The company has **significant debt** from its 2025 and 2028 Convertible Notes, and its ability to make scheduled payments depends on future performance and factors beyond its control[126](index=126&type=chunk) - The company may not have enough available cash to repurchase the Convertible Notes upon a fundamental change or to settle conversions in cash, which could lead to a **default**[127](index=127&type=chunk) - **Conversion of the Convertible Notes** may dilute the ownership interests of existing stockholders and could depress the price of the common stock[130](index=130&type=chunk) [Risks Relating to Government Regulation and Reimbursement](index=25&type=section&id=Item%201A.%20Risk%20Factors-Risks%20Relating%20to%20Government%20Regulation%20and%20Reimbursement) The company faces substantial regulatory risks from potential FDA oversight of LDTs, reimbursement pressures under PAMA, and strict compliance with fraud and abuse laws - Proposed government regulation of **Laboratory Developed Tests (LDTs)** could require additional clinical trials, increase costs, and delay or prevent regulatory approvals, harming the business[131](index=131&type=chunk)[133](index=133&type=chunk) - Changes in laws and payer policies, such as the **Protecting Access to Medicare Act of 2014 (PAMA)**, may adversely affect coverage and reimbursement for diagnostic services, potentially decreasing revenues[139](index=139&type=chunk)[142](index=142&type=chunk) - Failure to comply with fraud and abuse laws, including the **Anti-Kickback Statute (AKS)** and the **Stark Law**, could result in substantial penalties and exclusion from Medicare/Medicaid; the company disclosed an ongoing internal investigation related to compliance[163](index=163&type=chunk)[168](index=168&type=chunk)[171](index=171&type=chunk) - Non-compliance with federal, state, and international data privacy and security laws (e.g., **HIPAA, GDPR, CCPA**) could result in significant fines, penalties, and reputational damage[176](index=176&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [General Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors-General%20Risk%20Factors) General risks include public health crises, dependence on key personnel, challenges in integrating acquisitions, and potential failure of cost reduction efforts - The **COVID-19 pandemic** has caused significant volatility in testing volumes and may continue to adversely affect operations and financial condition[187](index=187&type=chunk) - The company's performance is substantially dependent on its **senior management and key technical personnel**, and the loss of their services could have a material adverse effect[190](index=190&type=chunk) - The company may be unable to realize the estimated benefits from its **cost reduction and restructuring efforts**, which could hurt profitability[197](index=197&type=chunk) - **Integrating future acquisitions** presents significant challenges, and failure to do so successfully could mean that anticipated benefits, such as cost synergies, are not realized[198](index=198&type=chunk)[201](index=201&type=chunk) [Unresolved Staff Comments](index=39&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments - None[207](index=207&type=chunk) [Properties](index=39&type=section&id=Item%202.%20Properties) NeoGenomics operates an international network of leased laboratories and offices, with its largest facilities located in Florida and California Major Facilities by Square Footage | Location | Square Footage | | :--- | :--- | | Fort Myers, Florida | 150,000 | | Aliso Viejo, California | 112,700 | | Houston, Texas | 32,800 | | Carlsbad, California | 28,600 | | San Diego, California | 25,400 | - Certain locations exclusively serve either the Clinical Services segment (e.g., Nashville, Tampa) or the Pharma Services segment (e.g., Rolle, Singapore, Suzhou), while others serve both[209](index=209&type=chunk)[210](index=210&type=chunk) [Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company is engaged in legal proceedings from time to time, with details provided in Note 18 of the Consolidated Financial Statements - The company is engaged in various legal proceedings; for further information, refer to **Note 18, Commitments and Contingencies**, in the notes to the Consolidated Financial Statements[211](index=211&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[212](index=212&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on Nasdaq as "NEO," it has never paid dividends, and it has authorized securities for issuance under equity compensation plans - The company's common stock is listed on The Nasdaq Stock Market LLC under the symbol **"NEO"**[214](index=214&type=chunk) - The company has **never declared or paid cash dividends** and intends to retain all future earnings to finance operations and growth[215](index=215&type=chunk) Securities Authorized for Issuance under Equity Compensation Plans (as of Dec 31, 2022) | Plan Category | Number of securities to be issued upon exercise | Weighted average exercise price | Number of securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 3,271,004 | $17.67 | 5,577,305 | | Equity compensation plans not approved by security holders (Inducement Awards) | 943,613 | $12.36 | — | | **Total** | **4,214,617** | | **5,577,305** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew 5.2% in 2022, but a higher net loss of $144.3 million was reported due to increased operating expenses and restructuring charges [2022 Overview and Company Outlook](index=44&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-2022%20Overview%20and%20Company%20Outlook) In 2022, the company grew revenue by 5.2% and initiated restructuring, with a 2023 outlook focused on core growth, advanced diagnostics, and profitability - Key achievements in 2022 include a **5.2% consolidated revenue increase**, strengthening the executive leadership team, and initiating a significant cost-reduction restructuring effort[233](index=233&type=chunk) - The company's 2023 critical success factors are: **Profitably Grow Core Business**, **Accelerate Advanced Diagnostics** (e.g., RaDaR™ launch), and **Improve Profitability** through efficiency and cost management[233](index=233&type=chunk)[234](index=234&type=chunk)[236](index=236&type=chunk) - The regulatory environment for LDTs remains uncertain, with the VALID Act's future unclear, but the company does not anticipate significant revenue changes in 2023 from known regulatory shifts[237](index=237&type=chunk)[238](index=238&type=chunk) [Critical Accounting Policies and Estimates](index=48&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies requiring significant judgment include revenue recognition, business combinations, and the annual impairment testing of goodwill - Critical accounting policies involve significant management judgment and include **Business Combinations, Accounts Receivable, Goodwill, Contingencies, Stock-based Compensation, Revenue Recognition, and Deferred Taxes**[250](index=250&type=chunk) - For Clinical Services revenue, the company estimates **implicit price concessions** based on negotiated discounts, historical collection experience, and anticipated payer denials to determine the amount expected to be collected[259](index=259&type=chunk) - **Goodwill** is evaluated for impairment annually; a quantitative analysis as of June 30, 2022, triggered by a sustained stock price decline, showed no impairment, but risk remains if performance declines[254](index=254&type=chunk)[256](index=256&type=chunk) [Results of Operations (2022 vs. 2021)](index=51&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Results%20of%20Operations%20(2022%20vs.%202021)) Consolidated revenue increased 5.2% to $509.7 million in 2022, but gross margin declined and the net loss widened significantly to $144.3 million Consolidated Revenue (in thousands) | Segment | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Clinical Services | $418,754 | $404,172 | 3.6% | | Pharma Services | $90,974 | $80,157 | 13.5% | | **Total net revenue** | **$509,728** | **$484,329** | **5.2%** | - **Gross profit margin decreased by 1.7 percentage points** to 36.9% in 2022, primarily due to the amortization of acquired Inivata developed technology intangibles and higher payroll-related costs[278](index=278&type=chunk) - General and administrative expenses **increased by $22.0 million (9.9%)** in 2022, driven by expenses from acquired subsidiaries, increased stock-based compensation, severance costs, and investments in technology[280](index=280&type=chunk) - The company recorded **restructuring charges of $4.5 million** in 2022, related to severance, facility optimization, and consulting costs, with no such charges in 2021[285](index=285&type=chunk)[286](index=286&type=chunk) Net Loss and EPS | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net loss | $(144,250) | $(8,347) | | Diluted net loss per share | $(1.16) | $(0.07) | [Non-GAAP Measures](index=55&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Non-GAAP%20Measures) The company uses non-GAAP measures like Adjusted EBITDA, which showed a loss of $48.0 million in 2022 compared to a $4.2 million loss in 2021 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | 2022 | 2021 | | :--- | :--- | :--- | | **NET LOSS (GAAP)** | **$ (144,250)** | **$ (8,347)** | | EBITDA (non-GAAP) | $ (88,406) | $ 43,359 | | Further Adjustments to EBITDA | $ 40,396 | $ (47,520) | | **ADJUSTED EBITDA (non-GAAP)** | **$ (48,010)** | **$ (4,161)** | [Liquidity and Capital Resources](index=56&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Liquidity%20and%20Capital%20Resources) The company ended 2022 with $263.2 million in cash and believes it has sufficient liquidity for the next 12 months despite increased cash used in operations Summary of Cash Flows (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in Operating activities | $ (65,993) | $ (26,723) | | Net cash provided by (used in) Investing activities | $ 517 | $ (632,367) | | Net cash provided by Financing activities | $ 11,829 | $ 725,285 | - As of December 31, 2022, the company had **$263.2 million in cash and cash equivalents** and $174.8 million in marketable securities[301](index=301&type=chunk) - Total contractual obligations as of December 31, 2022, amount to **$633.2 million**, with the largest components being principal payments on long-term debt ($535.3 million) and operating lease obligations ($96.8 million)[303](index=303&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk affecting its convertible notes and investment portfolio, and to unhedged foreign currency exchange risk - The company has fixed annual interest rates on its 2025 and 2028 Convertible Notes, so it does not have economic interest rate exposure on the debt itself, but the **fair value of the notes is exposed to interest rate risk**[308](index=308&type=chunk) - The investment portfolio is exposed to market risk from interest rate fluctuations, but this is minimized by investing in **short-term, high-quality securities**[309](index=309&type=chunk) - The company is exposed to **foreign currency exchange rate fluctuations** against the U.S. dollar from its operations in the UK, Switzerland, Singapore, and China, but does not currently hedge this risk[311](index=311&type=chunk) [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the audited consolidated financial statements for FY2022 and the unqualified opinion from the independent auditor, Deloitte & Touche LLP [Report of Independent Registered Public Accounting Firm](index=62&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data-Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on the financial statements and internal controls, identifying revenue recognition and goodwill impairment as critical audit matters - The auditor, Deloitte & Touche LLP, issued an **unqualified opinion**, stating the financial statements are presented fairly in all material respects[317](index=317&type=chunk) - A critical audit matter was the **estimation of implicit price concessions** for clinical services revenue, which required significant auditor judgment to evaluate management's assumptions[322](index=322&type=chunk)[324](index=324&type=chunk) - A second critical audit matter was the **goodwill impairment test** for the Clinical and Pharma reporting units, involving complex judgments on discount rates and future revenues[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk) [Consolidated Financial Statements](index=65&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data-Consolidated%20Financial%20Statements) The company's total assets were $1.74 billion as of December 31, 2022, and it reported a net loss of $144.3 million for the year Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $1,740,034 | $1,869,778 | | Goodwill | $522,766 | $527,115 | | Total Liabilities | $742,011 | $761,501 | | Convertible senior notes, net | $535,322 | $532,483 | | Total Stockholders' Equity | $998,023 | $1,108,277 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total net revenue | $509,728 | $484,329 | $444,448 | | Gross Profit | $187,896 | $187,060 | $185,893 | | Loss from Operations | $(157,623) | $(118,754) | $(13,992) | | Net (Loss) Income | $(144,250) | $(8,347) | $4,172 | [Notes to Consolidated Financial Statements](index=71&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data-Notes%20to%20Consolidated%20Financial%20Statements) The notes detail acquisitions, debt instruments, and a significant regulatory contingency for which an $11.2 million reserve has been accrued - In 2021, the company acquired Trapelo Health for $64.8 million and the remaining equity of Inivata Limited for a total fair value of **$552.8 million**[416](index=416&type=chunk)[424](index=424&type=chunk) - The company has two outstanding series of convertible senior notes: **$201.3 million of 1.25% notes due 2025** and **$345.0 million of 0.25% notes due 2028**[456](index=456&type=chunk)[469](index=469&type=chunk)[472](index=472&type=chunk) - The company is involved in a regulatory matter after voluntarily notifying the OIG and DOJ of an internal investigation; an **$11.2 million reserve** for potential damages has been accrued[528](index=528&type=chunk) Segment Gross Profit (in thousands) | Segment | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Clinical Services | $157,012 | $159,812 | $166,808 | | Pharma Services | $30,884 | $27,248 | $19,085 | | **Total gross profit** | **$187,896** | **$187,060** | **$185,893** | [Controls and Procedures](index=108&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2022 - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2022[539](index=539&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2022, based on the COSO framework[542](index=542&type=chunk) - The independent registered public accounting firm, Deloitte & Touche LLP, audited and issued an **unqualified opinion on the effectiveness** of the company's internal control over financial reporting as of December 31, 2022[543](index=543&type=chunk)[546](index=546&type=chunk) Part III [Directors, Executive Officers, Compensation, Security Ownership, and Accountant Fees](index=110&type=section&id=Items%2010-14) Information for Items 10-14 is incorporated by reference from the company's upcoming Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the registrant's upcoming 2023 Annual Meeting Proxy Statement[555](index=555&type=chunk)[556](index=556&type=chunk)[557](index=557&type=chunk)[558](index=558&type=chunk)[559](index=559&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=110&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed with the Form 10-K, noting that financial statement schedules are omitted as they are not applicable - The Consolidated Financial Statements of the Company are included in Part II, Item 8 of the Annual Report[561](index=561&type=chunk) - All financial statement schedules have been omitted because they are not applicable or the required information is already present in the financial statements or accompanying notes[562](index=562&type=chunk) [Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable, and no summary is provided - None[571](index=571&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q4 2022 was $139 million, a 10% increase year-over-year and an 8% sequential increase, marking the fourth consecutive quarter of sequential growth [7] - For the full year 2022, revenue was $510 million, a 5% increase compared to the previous year [18] - GAAP gross margin was 41%, while adjusted gross margin improved to 44.5%, a 460 basis point increase year-over-year [11] - Adjusted EBITDA loss for the full year was $48 million, with expectations for adjusted EBITDA growth to exceed revenue growth in 2023 [18][48] Business Line Data and Key Metrics Changes - Clinical Services and Pharma Services both contributed to revenue growth, with Pharma Services showing a 41% revenue increase in Q4 compared to the prior year [19] - RaDaR for Pharma experienced over 300% growth year-over-year in Q4, highlighting strong demand and performance [10] - Adjusted gross profit for the full year was $207 million, representing an adjusted gross margin of 41% [18] Market Data and Key Metrics Changes - The company served over 625,000 patients and processed over 1 million test orders in 2022, indicating strong market presence [18] - Days Sales Outstanding (DSO) improved to 79.4 days by the end of the year, reflecting better cash flow management [23] Company Strategy and Development Direction - The company initiated an organizational restructuring, including the integration of the Inivata business, expected to yield approximately $25 million in annualized operating savings [8] - A renewed focus on NGS MRD technologies, including RaDaR and Neo Comprehensive, is aimed at maintaining leadership in the oncology market [26] - The company plans to optimize its field organization and expand its oncology sales force to enhance customer experience and operational efficiency [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing revenue growth and operational improvements into 2023, with a revenue guidance of $545 million to $555 million, representing 7% to 9% growth [47] - The management team emphasized the importance of sustainable long-term growth rather than short-term earnings, indicating a strategic focus on reinvestment for future profitability [73] - Management acknowledged past market share losses but noted recovery efforts through field expansion and improved sales strategies [36] Other Important Information - The company is focusing on operational efficiencies and has integrated its R&D functions to capitalize on innovation opportunities [51] - The Advanced Diagnostics division is expected to drive significant growth through new product launches and a comprehensive data strategy [52] Q&A Session Summary Question: What are the growth expectations for NGS and turnaround times? - Management indicated strong growth in NGS and a competitive turnaround time of 10 days for the new Neo Comprehensive offering, with ongoing improvements expected [93] Question: How does the company view the Pharma Services market? - Management noted that while there are macro headwinds, they believe their strong relationships and focus on earlier-stage studies will drive continued growth in Pharma Services [144][149] Question: What is the outlook for RaDaR and its reimbursement strategy? - Management confirmed plans to submit for reimbursement for breast cancer in the first half of the year and colorectal cancer in the second half, emphasizing the importance of strong data for approval [142][163]

Sequential Improvement in Revenue Growth, • Adjusted EBITDA. Improved $8.6 million versus prior year due to improvement in gross profit and lower operating expenses. Balance Sheet In $Millions Dec-22 Sep-22 Total Assets 1,740.0 1,755.6 Accounts payable and other current liabilities 83.3 78.5 Current portion of equipment financing obligations 0.1 0.1 Current portion of operating lease liabilities 6.6 6.4 Total stockholders' equity 998.0 1,013.0 • Financial Flexibility to Make Needed Investments to Drive Long ...

Saving lives by improving patient care. 3 rd Quarter 2022 Earnings Results November 8th, 2022 1 2 Forward looking statement This presentation has been prepared by NeoGenomics, Inc. ("we," "us," "our," "NeoGenomics" or the "Company") and is made for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to r ...

Operations and Services - As of September 30, 2022, NeoGenomics operates CAP accredited and CLIA certified laboratories across multiple locations in the U.S., Europe, and Asia, enhancing its service capabilities[144]. - NeoGenomics is a leading provider of Molecular and NGS testing for oncology, with NGS panels being one of the fastest-growing testing areas, allowing for quicker treatment decisions[148]. - The acquisition of Inivata has expanded NeoGenomics' capabilities in oncology Liquid Biopsy technology, including the InVisionFirst®-Lung assay for non-small cell lung cancer[148]. - The Pharma Services segment supports pharmaceutical firms with comprehensive testing services throughout the drug development process, from discovery to commercialization[152]. - NeoGenomics employs approximately 180 MDs and PhDs, providing a depth of medical expertise that differentiates it from smaller laboratories[161]. - The company aims to maintain industry-leading turnaround times for test results, which is crucial for timely patient treatment[160]. - NeoGenomics focuses on sustainable growth through innovation, aiming to transform patient care and maintain excellence in service and performance[158]. - The company is committed to developing informatics and data-related tools to enhance clinical decision support and patient engagement in precision medicine[155]. - Key focus areas for 2022 include clinical trials and research, validation laboratory services, and informatics[156]. Financial Performance - Consolidated revenues increased by $7.4 million, or 6.1%, year-over-year[172]. - Clinical Services revenue for the three months ended September 30, 2022, increased by $3.9 million, or 3.8%, compared to the same period in 2021[171]. - Pharma Services revenue for the three months ended September 30, 2022, increased by $3.5 million, or 18.3%, compared to the same period in 2021[173]. - Gross profit margin for the three months ended September 30, 2022, was 38.0%, a decrease of 0.9% from 38.9% in the same period of 2021[177]. - General and administrative expenses for the three months ended September 30, 2022, were $64.3 million, an increase of 0.7% from $63.8 million in the same period of 2021[179]. - Cost of revenue for the three months ended September 30, 2022, was $79.9 million, representing 62.0% of total revenue, compared to 61.1% in the same period of 2021[176]. - Loss from operations for the three months ended September 30, 2022, was (30.7)%, an improvement from (32.7)% in the same period of 2021[171]. - Clinical Services cost of revenue for the three months ended September 30, 2022, was $65.3 million, an increase of 9.6% from $59.6 million in the same period of 2021[176]. - Total operating expenses for the three months ended September 30, 2022, were 68.7% of revenue, down from 71.6% in the same period of 2021[171]. - The company reported a net loss of $121.6 million for the nine months ended September 30, 2022, compared to a net income of $33.4 million in the same period in 2021[188]. - Adjusted EBITDA for the nine months ended September 30, 2022, was $(46.8) million, compared to $5.6 million in the same period in 2021[192]. Expenses and Cash Flow - General and administrative expenses increased by $29.5 million for the nine months ended September 30, 2022, compared to the same period in 2021, driven by acquisitions and increased payroll costs[180]. - Research and development expenses rose by $10.3 million for the nine months ended September 30, 2022, primarily due to the Inivata subsidiary, representing a 77.0% increase year-over-year[181]. - Sales and marketing expenses increased by $3.5 million (7.5%) for the nine months ended September 30, 2022, reflecting higher payroll costs from the expansion of the precision medicine sales team[183]. - Cash used in operating activities was $62.3 million for the nine months ended September 30, 2022, a significant increase from $6.9 million in the same period in 2021[194]. - Cash provided by investing activities was $1.6 million for the nine months ended September 30, 2022, a turnaround from $622.8 million used in the same period in 2021[195]. - Cash provided by financing activities decreased significantly to $10.0 million for the nine months ended September 30, 2022, compared to $722.8 million in the same period in 2021, primarily due to the absence of convertible debt or equity offerings[196]. - The end of period cash, cash equivalents, and restricted cash was $266.1 million as of September 30, 2022, down from $343.7 million at the end of the same period in 2021[193]. - As of September 30, 2022, the company had $266.1 million in unrestricted cash and cash equivalents and $177.4 million in marketable securities, sufficient to fund operational liquidity needs for at least the next 12 months[197]. - Capital expenditures for the year ending December 31, 2022, are anticipated to be in the range of $30.0 million to $40.0 million, with approximately $26.4 million spent on capital equipment, software, and leasehold improvements during the nine months ended September 30, 2022[199]. Debt and Financial Risks - The company issued $201.3 million in 2025 Convertible Notes with a fixed interest rate of 1.25% and $345.0 million in 2028 Convertible Notes with a fixed interest rate of 0.25%, with no economic interest rate exposure[207]. - The company invests in highly liquid and high-quality U.S. government and other highly credit-rated debt securities, minimizing exposure to interest rate fluctuations[208]. - The company operates in multiple countries, exposing it to foreign currency exchange risks, but does not currently hedge these risks[209]. - The company performed a qualitative assessment of goodwill as of June 30, 2022, indicating potential impairment due to a decline in stock price from $12.15 to $8.15 per share[204]. - The company anticipates an increase in research and development expenditures in future quarters to support innovation projects and new test developments[182].