Castle Biosciences(CSTL) - 2025 Q2 - Quarterly Results

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