Grail, Inc.(GRAL) - 2025 Q2 - Quarterly Results

Q2 2025 Financial and Business Highlights GRAIL reported strong Q2 2025 financial improvements with increased revenue and a significantly reduced net loss, alongside key operational advancements in Galleri test adoption and positive clinical study results Q2 2025 Financial Performance GRAIL reported an 11% year-over-year increase in total revenue to $35.5 million for Q2 2025, with U.S. Galleri revenue growing 21% to $34.2 million. The net loss significantly improved by 93% to $114.0 million, largely due to lower impairment charges compared to the prior year | Metric | Q2 2025 (Millions) | YoY Change | | :-------------------------------- | :------------------ | :--------- | | Total Revenue | $35.5 | +11% | | Galleri Revenue | $34.4 | +22% | | U.S. Galleri Revenue | $34.2 | +21% | | Net Loss | $(114.0) | +93% (Improvement) | | Gross Loss | $(17.8) | +1% (Improvement) | | Non-GAAP Adjusted Gross Profit | $16.1 | +1% (Increase) | | Non-GAAP Adjusted EBITDA | $(78.3) | +44% (Improvement) | - Cash, cash equivalents, restricted cash, and short-term marketable securities totaled $606.1 million as of June 30, 2025[3] Q2 2025 Operational Highlights GRAIL achieved significant operational milestones in Q2 2025, including a 29% year-over-year increase in Galleri tests sold to over 45,000. Positive top-line results from the PATHFINDER 2 study were announced, showing substantially greater additional cancer detection and higher positive predictive value compared to the first PATHFINDER study. The company also expanded access to Galleri through a new collaboration with Everlywell and adoption by Rush University System for Health - Galleri tests sold grew 29% year-over-year to more than 45,000 in Q2 2025[1][2] - Positive top-line performance and safety results from the PATHFINDER 2 study (first 25,578 participants) were announced in June, demonstrating substantially greater additional cancer detection and a higher positive predictive value (PPV) than the first PATHFINDER study. Specificity and cancer signal origin (CSO) accuracy were consistent with previous findings (99.5% and 88%, respectively), with no serious safety concerns[2][8] - Detailed results from the first 25,000 enrolled in PATHFINDER 2 are planned for submission for presentation at ESMO 2025 in October[1][2] - Entered a new collaboration with Everlywell to expand access to the Galleri test, making it available for request directly on everlywell.com via prescription[8] - Rush University System for Health became the first health system in the Chicago-area market to offer the Galleri test in July[8] - Data presented at ASCO Annual Meeting in May included a 5-year follow-up analysis of the Circulating Cell-free Genome Atlas (CCGA) study, showing Galleri's preferential detection of aggressive, clinically meaningful cancers[8] Company and Product Information This section details GRAIL's mission in early cancer detection, the functionality and intended use of its Galleri multi-cancer early detection test, and its laboratory's regulatory certifications About GRAIL GRAIL is a healthcare company dedicated to early cancer detection, leveraging next-generation sequencing, large-scale clinical studies, and advanced machine learning to identify multiple cancer types at earlier, more treatable stages - GRAIL's mission is to detect cancer early when it can be cured[1][6] - The company uses next-generation sequencing, population-scale clinical studies, and state-of-the-art machine learning, software, and automation[6] - GRAIL's targeted methylation-based platform supports multi-cancer early detection, risk stratification, minimal residual disease detection, biomarker subtyping, and treatment/recurrence monitoring[6] About Galleri® Test The Galleri multi-cancer early detection test is a proactive blood-based screening tool that identifies DNA shed by cancer cells, helping to detect cancers that currently lack recommended screenings. It is intended for adults aged 50 or older with an elevated risk for cancer and should be used in conjunction with standard screenings - The Galleri test is a multi-cancer early detection test that uses a simple blood draw to identify DNA shed by cancer cells[9] - It helps screen for deadly cancers without recommended screenings, such as pancreatic, esophageal, ovarian, and liver cancers[9] - The test is recommended for adults with an elevated risk for cancer, such as those aged 50 or older, and should be used in addition to recommended cancer screenings[9] Laboratory and Regulatory Information GRAIL's clinical laboratory is certified under CLIA and accredited by the College of American Pathologists. While the Galleri test was developed by GRAIL for clinical purposes, it has not received clearance or approval from the U.S. Food and Drug Administration - GRAIL's clinical laboratory is certified under CLIA (Clinical Laboratory Improvement Amendments of 1988) and accredited by the College of American Pathologists[11] - The Galleri test has not been cleared or approved by the U.S. Food and Drug Administration[11] - The Galleri test is intended for clinical purposes and is regulated under CLIA for high-complexity testing[11] Condensed Consolidated Financial Statements This section provides GRAIL's condensed consolidated balance sheets and statements of operations, highlighting asset and liability changes and detailed revenue and expense figures for Q2 2025 Condensed Consolidated Balance Sheets As of June 30, 2025, GRAIL reported total assets of $2.70 billion, a decrease from $2.98 billion at December 31, 2024. This change was primarily driven by a reduction in cash and cash equivalents and short-term marketable securities | Asset/Liability/Equity (Thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Assets: | | | | Cash and cash equivalents | $127,427 | $214,234 | | Short-term marketable securities | $475,327 | $549,236 | | Total current assets | $651,844 | $819,861 | | Intangible assets, net | $1,919,723 | $2,016,890 | | Total assets | $2,702,551 | $2,983,307 | | Liabilities: | | | | Total current liabilities | $70,639 | $76,925 | | Total liabilities | $387,908 | $479,902 | | Stockholders'/Member's Equity: | | | | Accumulated deficit | $(10,023,528) | $(9,803,330) | | Total stockholders'/member's equity | $2,314,643 | $2,503,405 | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, GRAIL's total revenue increased to $35.5 million from $32.0 million in the prior year. The net loss significantly narrowed to $114.0 million, a substantial improvement from $1.59 billion in Q2 2024, primarily due to a much lower goodwill and intangible assets impairment charge | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Screening revenue | $34,379 | $28,163 | $63,512 | $51,702 | | Development services revenue | $1,165 | $3,807 | $3,869 | $6,989 | | Total revenue | $35,544 | $31,970 | $67,381 | $58,691 | | Cost of screening revenue | $19,346 | $15,789 | $36,469 | $29,511 | | Cost of development services revenue | $501 | $621 | $1,672 | $2,057 | | Cost of revenue — amortization of intangible assets | $33,472 | $33,472 | $66,944 | $66,944 | | Research and development | $46,626 | $94,196 | $100,251 | $195,821 | | Sales and marketing | $28,539 | $40,989 | $63,518 | $87,808 | | General and administrative | $37,914 | $67,258 | $82,988 | $124,327 | | Goodwill and intangible assets impairment | $28,000 | $1,420,936 | $28,000 | $1,420,936 | | Total costs and operating expenses | $194,398 | $1,673,261 | $379,842 | $1,927,404 | | Loss from operations | $(158,854) | $(1,641,291) | $(312,461) | $(1,868,713) | | Net loss | $(113,985) | $(1,585,337) | $(220,198) | $(1,804,251) | | Net loss per share — Basic and Diluted | $(3.18) | $(51.06) | $(6.28) | $(58.11) | Non-GAAP Financial Measures Reconciliation This section explains GRAIL's use of non-GAAP financial measures, Adjusted Gross Profit and Adjusted EBITDA, and provides detailed reconciliations to their most directly comparable GAAP measures Non-GAAP Disclosure GRAIL uses non-GAAP financial measures, Adjusted Gross Profit (Loss) and Adjusted EBITDA, to provide investors with a clearer view of its operational and financial performance by excluding certain non-recurring or non-cash items, such as amortization of intangible assets and acquisition-related costs - Adjusted Gross Profit (Loss) is used to assess operational performance, reflecting gross profitability by excluding amortization of intangible assets and stock-based compensation allocated to cost of revenue[12] - Adjusted EBITDA is used to assess financial performance and for internal planning, providing a comparable overview across historical periods by excluding interest, taxes, depreciation, impairment, acquisition-related legal fees, restructuring charges, and stock-based compensation[12][13] Adjusted Gross Profit Reconciliation For Q2 2025, Adjusted Gross Profit was $16.1 million, a slight increase from $16.0 million in Q2 2024. This was calculated by adjusting the GAAP gross loss of $(17.8) million by adding back amortization of intangible assets and stock-based compensation | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross loss | $(17,775) | $(17,912) | $(37,704) | $(39,821) | | Amortization of intangible assets | $33,472 | $33,472 | $66,944 | $66,944 | | Stock-based compensation | $417 | $463 | $1,179 | $944 | | Adjusted Gross Profit | $16,114 | $16,023 | $30,419 | $28,067 | Adjusted EBITDA Reconciliation GRAIL's Adjusted EBITDA for Q2 2025 was $(78.3) million, a significant improvement from $(139.4) million in Q2 2024. This improvement is largely attributed to the substantial reduction in goodwill and intangible impairment charges compared to the prior year | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(113,985) | $(1,585,337) | $(220,198) | $(1,804,251) | | Interest income | $(6,809) | $(2,805) | $(14,588) | $(5,706) | | Benefit from income tax expense | $(38,871) | $(53,144) | $(79,070) | $(58,709) | | Amortization of intangible assets | $34,583 | $34,583 | $69,167 | $69,167 | | Depreciation | $4,592 | $4,805 | $9,287 | $10,218 | | Goodwill and intangible impairment | $28,000 | $1,420,936 | $28,000 | $1,420,936 | | Illumina/GRAIL merger & divestiture legal and professional services costs | — | $15,624 | — | $21,932 | | Stock-based compensation | $14,168 | $25,947 | $30,379 | $55,053 | | Restructuring | — | — | $(34) | — | | Adjusted EBITDA | $(78,322) | $(139,391) | $(177,057) | $(291,360) | Additional Information This section provides details on GRAIL's Q2 2025 conference call, important disclaimers regarding forward-looking statements, and contact information for corporate communications and investor relations Conference Call and Webcast GRAIL hosted a conference call and webcast on August 12, 2025, to discuss its Q2 2025 financial results, with a replay available on its investor relations website for 30 days - A webcast and conference call were held on August 12, 2025, at 1:30 p.m. PT / 4:30 p.m. ET[4] - Access to the conference call and webcast replay is available on the investor relations section of GRAIL's website (investors.grail.com)[4][5] Forward-Looking Statements The press release contains forward-looking statements subject to various risks, uncertainties, and assumptions, including future financial performance, product development, and regulatory compliance. Readers are cautioned that actual results may differ materially, and GRAIL undertakes no obligation to update these statements - Statements are forward-looking and subject to risks, uncertainties, and assumptions, including future financial performance, tests, patient awareness, clinical studies, and regulatory compliance[15] - Important factors could cause actual results to differ materially and adversely from those expressed, as discussed in the 'Risk Factors' sections of the Annual Report on Form 10-K and Quarterly Report on Form 10-Q[16] - GRAIL undertakes no obligation to update any forward-looking statements after the date of the press release, except as required by law[17] GRAIL Contacts Contact information for GRAIL's corporate communications and investor relations teams is provided for inquiries - Corporate Communications contacts are Kristen Davis and Trish Rowland (pr@grail.com)[18] - Investor Relations contacts are Alex Dobbin and Alexis Tosti (ir@grail.com)[18]