NeoGenomics(NEO) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights NeoGenomics saw strong Q2 2025 revenue growth from clinical volumes, but net loss surged due to impairment charges, while strategically expanding Second Quarter 2025 Financial Highlights NeoGenomics saw Q2 2025 revenue rise 10% to $181 million, driven by clinical growth, but net loss increased significantly due to impairment charges Second Quarter 2025 Key Financial Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :--------------------- | :------------------ | :------------------ | :--------- | | Consolidated Revenue | $181 | $164.5 | 10% | | Net Loss | $(45) | $(19) | 142% | | Adjusted EBITDA | $10.7 | $10.9 | -1.8% | - Consolidated gross profit increased by 7% to $77 million, with an Adjusted Gross Profit Margin of 45%[4] - Operating expenses rose by 32% to $125 million, largely due to $20 million in impairment charges related to the planned sale of Trapelo and the InVisionFirst®-Lung intangible asset, as well as $4.4 million in higher compensation and benefit costs[4][6] Operational & Strategic Overview Clinical business grew strongly, particularly NGS, despite pharma revenue pressure and PanTracer™ launch delays, with future focus on R&D and partnerships - Clinical revenue increased by 16% (13% excluding Pathline), driven by sequential improvement in Average Unit Price (AUP), record volumes, and 23% growth in NGS[1][2] - Challenges included continuing pressure in pharma revenue and a delay in the commercial launch of PanTracer™ Liquid Biopsy, impacting expected NGS revenue[2] - Future strategic initiatives include enhancing R&D for new therapy selection and next-gen MRD products, preparing for the commercial launch of PanTracer Liquid Biopsy, growing the sales team, increasing efficiencies, and pursuing partnerships[2] Second-Quarter Financial Results Q2 2025 financial results show increased revenue but a higher net loss due to impairment charges, alongside reduced cash and convertible debt repayment Condensed Consolidated Balance Sheets Total assets decreased by June 30, 2025, mainly from reduced cash, while total liabilities also fell due to convertible senior notes repayment Key Balance Sheet Items (in thousands) | Item | June 30, 2025 (thousands) | December 31, 2024 (thousands) | | :------------------------ | :------------------------ | :---------------------------- | | Cash and cash equivalents | $154,723 | $367,012 | | Total current assets | $392,553 | $596,019 | | Total assets | $1,393,950 | $1,638,038 | | Total current liabilities | $100,120 | $301,241 | | Convertible senior notes | $341,095 | $340,335 | | Total liabilities | $539,910 | $735,699 | | Total stockholders' equity| $854,040 | $902,339 | - Assets held for sale increased to $8,956 thousand as of June 30, 2025, from zero at year-end 2024[19] - The current portion of convertible senior notes decreased from $200,777 thousand to zero, indicating a significant repayment[19] Condensed Consolidated Statements of Operations Q2 2025 net revenue increased 10.2% to $181.3 million, but higher operating expenses, mainly impairment charges, led to a significant net loss Q2 2025 vs Q2 2024 Statements of Operations (in thousands) | Metric | Q2 2025 (thousands) | Q2 2024 (thousands) | Change (%) | | :---------------------- | :------------------ | :------------------ | :--------- | | Net Revenue | $181,330 | $164,502 | 10.2% | | Cost of Revenue | $104,072 | $92,008 | 13.1% | | Gross Profit | $77,258 | $72,494 | 6.6% | | Total Operating Expenses| $124,886 | $94,435 | 32.2% | | Loss From Operations | $(47,628) | $(21,941) | 117.1% | | Net Loss | $(45,092) | $(18,642) | 142.0% | | Basic EPS | $(0.35) | $(0.15) | 133.3% | - Impairment charges of $20,041 thousand were recorded in Q2 2025, significantly contributing to the increase in operating expenses and net loss, compared to no such charges in Q2 2024[21] Condensed Consolidated Statements of Cash Flows YTD June 30, 2025, experienced net cash outflows across all activities, primarily from convertible debt repayment, leading to a substantial cash decrease YTD June 30, 2025 vs 2024 Cash Flows (in thousands) | Cash Flow Activity | YTD June 30, 2025 (thousands) | YTD June 30, 2024 (thousands) | | :----------------------------- | :---------------------------- | :---------------------------- | | Net cash used in operating activities | $(4,997) | $(12,023) | | Net cash (used in) provided by investing activities | $(5,754) | $21,838 | | Net cash (used in) provided by financing activities | $(201,484) | $2,782 | | Net change in cash and cash equivalents | $(212,289) | $12,597 | | Cash and cash equivalents, end of period | $154,723 | $355,085 | - The significant cash outflow from financing activities was primarily driven by the repayment of $201,250 thousand in convertible debt[23] - Investing activities included $11,060 thousand from maturities of marketable securities and $10,823 thousand for purchases of property and equipment, along with $5,991 thousand for business acquisition (net of cash acquired)[23] Business Developments NeoGenomics expanded its Northeastern US presence and capabilities through the strategic acquisition of Pathline, LLC in April 2025 Pathline, LLC Acquisition NeoGenomics completed the acquisition of Pathline, LLC in April 2025, expanding its presence and capabilities in the Northeastern US - The acquisition of Pathline, LLC, a CLIA/CAP/NYS-certified laboratory, was completed on April 4, 2025[9] - The purchase price included an initial cash consideration of $8.0 million and contingent consideration of $1.0 million[9] - This acquisition aligns with NeoGenomics' strategic objective to expand its presence, capabilities, and offerings in the Northeastern United States[9] Financial Guidance NeoGenomics revised FY 2025 guidance, lowering revenue and increasing net loss projections, while maintaining a stable Adjusted EBITDA outlook Full Year 2025 Guidance Update NeoGenomics revised FY 2025 guidance, lowering consolidated revenue and increasing projected net loss, with a slight adjustment to Adjusted EBITDA Full Year 2025 Financial Guidance (in millions) | Metric | FY 2024 Actual (Millions) | Previously Revised FY 2025 Guidance (Low-High, Millions) | Current FY 2025 Guidance (Low-High, Millions) | YOY % Change from FY 2024 (Low-High) | | :----------------- | :------------------------ | :------------------------------------------------------- | :-------------------------------------------- | :----------------------------------- | | Consolidated revenue | $661 | $747 - $759 | $720 - $726 | 9% - 10% | | Net loss | $(79) | $(85) - $(77) | $(116) - $(108) | 47% - 37% | | Adjusted EBITDA | $40 | $55 - $58 | $41 - $44 | 3% - 10% | - The company's net loss guidance for FY 2025 was significantly increased, now projected to be between $(116) million and $(108) million, compared to the previous guidance of $(85) million to $(77) million[10] - Consolidated revenue guidance was slightly lowered to a range of $720 million to $726 million, from the previous range of $747 million to $759 million[10] Non-GAAP Financial Measures NeoGenomics uses non-GAAP measures and reconciliations for transparency into core operating performance, excluding non-recurring or non-operational items Use and Definitions Non-GAAP measures offer transparency into operating performance by excluding non-core or inconsistent items, assisting internal decisions and investor evaluation - Non-GAAP measures exclude certain income/expense items not directly attributable to core operating results or inconsistent in amounts and frequency, facilitating analysis of core test-level operating results[24] - Adjusted EBITDA is defined as net (loss) income before interest, tax, depreciation, amortization, stock-based compensation, and other specific non-operating items[25] - Adjusted Gross Profit Margin, Adjusted Net (Loss) Income, and Adjusted Diluted EPS are also defined with specific adjustments to GAAP figures[26][27][28] Reconciliation of GAAP to Non-GAAP Measures Detailed reconciliations from GAAP net loss to non-GAAP metrics are provided for Q2, YTD, and full-year guidance, highlighting adjustments like impairment and stock-based compensation EBITDA and Adjusted EBITDA Reconciliation Q2 2025 GAAP net loss increased significantly, leading to negative EBITDA, but Adjusted EBITDA remained stable after key adjustments Q2 2025 vs Q2 2024 EBITDA and Adjusted EBITDA (in thousands) | Metric | Q2 2025 (thousands) | Q2 2024 (thousands) | | :----------------- | :------------------ | :------------------ | | Net loss (GAAP) | $(45,092) | $(18,642) | | EBITDA (non-GAAP) | $(29,882) | $(3,836) | | Adjusted EBITDA (non-GAAP) | $10,675 | $10,869 | - Key adjustments for Q2 2025 included $20,041 thousand in impairment charges and $12,215 thousand in stock-based compensation expense[29] Gross Profit and Adjusted Gross Profit Margin Reconciliation GAAP gross profit margin slightly decreased, but Adjusted Gross Profit Margin, excluding amortization and stock-based compensation, showed stable Q2 2025 performance Q2 2025 vs Q2 2024 Gross Profit and Margin (in thousands) | Metric | Q2 2025 (thousands) | Q2 2024 (thousands) | Change (%) | | :------------------------- | :------------------ | :------------------ | :--------- | | Gross Profit (GAAP) | $77,258 | $72,494 | 6.6% | | Adjusted Gross Profit (non-GAAP) | $82,372 | $77,761 | 5.9% | | Gross Profit Margin (GAAP) | 42.6% | 44.1% | -1.5 pp | | Adjusted Gross Profit Margin (non-GAAP) | 45.4% | 47.3% | -1.9 pp | - Adjustments to cost of revenue for Q2 2025 included $4.8 million of amortization of acquired intangible assets and $0.3 million of stock-based compensation[33] Net Loss and EPS to Adjusted Net Loss and Adjusted EPS Reconciliation Q2 2025 reconciliation highlights a significant difference between GAAP and Adjusted net loss/EPS, mainly from excluding impairment, stock-based compensation, and amortization Q2 2025 vs Q2 2024 Net Loss and EPS Reconciliation (in thousands, except per share) | Metric | Q2 2025 (thousands) | Q2 2024 (thousands) | | :------------------------- | :------------------ | :------------------ | | Net loss (GAAP) | $(45,092) | $(18,642) | | Adjusted net income (non-GAAP) | $3,589 | $4,424 | | Diluted EPS (GAAP) | $(0.35) | $(0.15) | | Adjusted diluted EPS (non-GAAP) | $0.03 | $0.03 | - Significant adjustments for Q2 2025 included $20,041 thousand for impairment charges and $12,215 thousand for stock-based compensation expense[36] Financial Guidance Reconciliation FY 2025 guidance reconciliation shows the substantial impact of non-GAAP adjustments, like amortization and stock-based compensation, in converting GAAP net loss to positive Adjusted metrics FY 2025 Financial Guidance Reconciliation (in thousands, except per share) | Metric | Low Range (thousands) | High Range (thousands) | | :------------------------- | :-------------------- | :--------------------- | | Net loss (GAAP) | $(116,000) | $(108,000) | | Adjusted net income (non-GAAP) | $10,000 | $15,000 | | Adjusted EBITDA (non-GAAP) | $41,000 | $44,000 | | Net loss per diluted share (GAAP) | $(0.91) | $(0.84) | | Adjusted diluted EPS (non-GAAP) | $0.08 | $0.12 | - Key adjustments for FY 2025 guidance include $32,000 thousand for amortization of intangibles, $43,000-$46,000 thousand for stock-based compensation, and $48,000 thousand for other one-time expenses[39] Supplemental Information This section provides additional details on clinical test volumes and revenue, highlighting growth in both tests performed and average revenue per test Clinical Tests Performed and Revenue NeoGenomics reported strong Q2 2025 growth in clinical tests and average revenue per test, indicating increased volume and higher-value testing Q2 2025 Clinical Tests Performed and Revenue | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----------------------------------- | :-------- | :-------- | :--------- | | Clinical excluding Pathline: Number of tests performed | 343,005 | 311,670 | 10.1% | | Clinical excluding Pathline: Average revenue/test | $465 | $454 | 2.4% | | Clinical including Pathline: Number of tests performed | 356,630 | 311,670 | 14.4% | | Clinical including Pathline: Average revenue/test | $461 | $454 | 1.5% | - The average revenue per clinical test increased by 2.4% (excluding Pathline) and 1.5% (including Pathline) in Q2 2025, reflecting higher value tests, including NGS, and strategic reimbursement initiatives[3][41] Corporate Information This section provides an overview of NeoGenomics, includes forward-looking statement disclaimers, and offers contact details for investor and media relations About NeoGenomics, Inc. NeoGenomics is a premier cancer diagnostics company specializing in genetics testing and information services, offering a comprehensive oncology-focused menu - NeoGenomics is a premier cancer diagnostics company specializing in cancer genetics testing and information services[12] - The company offers one of the most comprehensive oncology-focused testing menus, serving oncologists, pathologists, hospital systems, academic centers, and pharmaceutical firms[12] - NeoGenomics operates CAP-accredited and CLIA-certified laboratories throughout the US and a CAP-accredited full-service laboratory in Cambridge, United Kingdom[12] Forward-Looking Statements This section provides a standard disclaimer for forward-looking statements, cautioning investors about inherent risks that could cause actual results to differ from projections - Forward-looking statements address matters such as 2025 financial guidance, seasonality impacts, and long-range strategic objectives[15] - These statements are subject to risks and uncertainties, including the company's ability to implement initiatives, gain customers, offer new tests, integrate acquisitions, manage seasonality, and execute strategic priorities[15] - Investors are cautioned not to place undue reliance on these statements and are encouraged to review the company's SEC filings for a discussion of risks[16] Investor Relations & Media This section provides contact information for investor relations and media inquiries, plus details for accessing the Q2 2025 results webcast and conference call - A webcast and conference call to discuss Q2 2025 results was scheduled for Tuesday, July 29, 2025, at 8:30 a.m. Eastern Time[11] - Investor contact information is provided for Kendra Webster at InvestorRelations@neogenomics.com[17] - Media contact information is provided for Andrea Sampson at asampson@sampsonprgroup.com[17]