MDxHealth SA(MDXH) - 2025 Q2 - Quarterly Report

Financial Performance - Revenue for the six months ended June 30, 2025, increased by 21% to $50.9 million compared to $42.0 million for the same period in 2024[2] - Gross profit rose by 30% to $33.1 million, with gross margins improving to 65% from 60.4% in the prior year[3] - Operating loss decreased by 54% to $6.5 million, down from $14.0 million in the previous year, driven by higher revenues and gross profit[4] - Net loss for the period was $16.6 million, a 17% reduction from $20.0 million in the prior year[4] - Basic and diluted loss per share improved by 55% to $(0.33) from $(0.73) year-over-year[2] - Tissue-based revenue increased to $43.2 million in the first half of 2025, up from $33.7 million in the same period of 2024, representing a growth of 28%[29] Cash and Liquidity - As of June 30, 2025, the company had cash and cash equivalents of $32.8 million, indicating sufficient liquidity for at least the next twelve months[7] - Cash and cash equivalents decreased to $32.8 million as of June 30, 2025, down from $46.8 million at the beginning of the period[17] - The company expects to continue incurring net losses and significant cash outflows for at least the next twelve months[5] - The company expects continued losses and negative operating cash flows in the coming twelve months, but believes it has sufficient cash to continue operations for at least the next twelve months[25] Debt and Liabilities - The company entered into a $100 million Credit Agreement, with $55 million already advanced and additional amounts contingent on revenue requirements[9] - Total liabilities as of June 30, 2025, were $141.5 million, slightly down from $142.5 million at the end of 2024[15] - The company incurred a net cash outflow from operating activities of $4.2 million for the first half of 2025, compared to $9.8 million in the same period of 2024[17] - The company has an accumulated deficit of $386.1 million as of June 30, 2025[5] - The company’s accumulated deficit increased to $386.1 million as of June 30, 2025, from $369.5 million at the end of 2024[16] Expenses - The cost of sales for the first half of 2025 was $17.8 million, compared to $16.6 million in the same period of 2024[32] - For the six months ended June 30, 2025, research and development expenses decreased by $0.5 million, or 10%, primarily due to lower consulting, labor, and reagent costs[34] - Selling and marketing expenses decreased by $0.9 million, or 4%, primarily due to lower commission expenses for the same period[35] - General and administrative expenses increased by $0.9 million, or 8%, primarily due to stock-based compensation and overall business growth[36] Financial Adjustments and Acquisitions - Financial income for the period ended June 30, 2025, decreased by $0.5 million, or 32%, primarily due to the absence of a $1.0 million gain from fair value adjustments related to Exact Sciences warrants[39] - Total financial expenses increased by $3.8 million, or 50%, primarily from increases in loan and lease interest expense of $2.1 million and a $4.4 million increase in the fair value of GPS contingent consideration[40] - As of June 30, 2025, the contingent consideration related to the acquisition of GPS was assessed at $44.8 million, down from $67.3 million as of December 31, 2024[48] - The Company made its first earnout payment to Exact Sciences of $28.0 million on April 30, 2025, reducing the aggregate undiscounted amount due from $82.5 million to $54.5 million[47] - The Company signed an agreement to acquire Exosome Diagnostics, Inc. for a total consideration of $15 million, including $5 million in stock at closing and $2.5 million annually over the next four years[65] Contingent Consideration and Fair Value - The ending balance of contingent consideration liabilities as of June 30, 2025, was $45.5 million, down from $67.9 million at the end of 2024[56] - The fair value of the Company's option to prepay the OrbiMed Loan Facility was valued at $0.6 million as of June 30, 2025[55] - As of June 30, 2025, the fair value of the contingent consideration payable to Exact Sciences was adjusted to $54.5 million, down from $82.5 million after a $28.0 million earn-out payment[55] - The Company recorded a financial charge of $5.4 million and an additional charge of $0.1 million to other operating expenses as of June 30, 2025, due to fair-value adjustments[55] - The total fair value of granted warrants is estimated at $3.4 million, with an expense of $1.1 million recorded for the six months ended June 30, 2025[64] Warrants and Options - As of June 30, 2025, there are 6,210,976 warrants outstanding, with 1,699,431 vested warrants[60] - The Company used a discount rate of 20.69% for variable earnouts as of June 30, 2025[55] - The beginning balance of the OrbiMed prepayment option was $434,000 as of June 30, 2025, increasing to $625,000 by the end of the period[54] - The Company recorded a fair value change through profit and loss of $191,000 for the OrbiMed prepayment option during the first half of 2025[54]