NeoGenomics(NEO) - 2025 Q4 - Annual Report

Financial Performance - Revenue increased by 10.1% compared to 2024[258] - Adjusted EBITDA rose by 9.5% or $3.7 million to $43.4 million compared to 2024[258] - Consolidated revenue for the year ended December 31, 2025, was $727.3 million, representing a 10.1% increase from $660.6 million in 2024, primarily driven by increased test volumes and strategic reimbursement initiatives[284] - The net loss for 2025 was $108.0 million, compared to a net loss of $78.7 million in 2024, with a basic net loss per share of $(0.84)[307] - For the year ended December 31, 2025, NeoGenomics reported a net loss of $108.0 million, compared to a net loss of $78.7 million in 2024, reflecting a year-over-year increase of 37.3% in losses[312] - Adjusted EBITDA for 2025 was $43.4 million, an increase of 9.0% from $39.6 million in 2024, indicating improved operational performance despite the net loss[312] Expenses and Costs - Cost of revenue for 2025 was $413.0 million, up 11.5% from $370.5 million in 2024, with gross profit of $314.3 million and a gross profit margin of 43.2%, down from 43.9% in 2024[286][288] - General and administrative expenses increased by $13.6 million to $273.3 million in 2025, accounting for 37.6% of revenue, compared to 39.3% in 2024[290] - Research and development expenses rose 19.0% to $37.1 million in 2025, representing 5.1% of revenue, driven by increased compensation and benefits costs[292] - Sales and marketing expenses increased by $7.4 million to $92.0 million in 2025, accounting for 12.6% of revenue, compared to 12.8% in 2024[295] - Impairment charges for 2025 were $27.8 million, including an $11.4 million impairment on InVisionFirst®-Lung intangible assets and a $15.9 million impairment on Trapelo's assets[300] Cash Flow and Liquidity - Cash provided by operating activities decreased to $5.2 million in 2025 from $7.0 million in 2024, a decline of 25.7% primarily due to higher cash used from operating results[313] - Cash used in investing activities was $12.3 million in 2025, a significant shift from cash provided of $12.9 million in 2024, driven by a $33.9 million decrease in proceeds from marketable securities[314] - Cash used in financing activities surged to $200.3 million in 2025, compared to cash provided of $4.6 million in 2024, primarily due to the repayment of the 2025 Convertible Notes[315] - As of December 31, 2025, NeoGenomics had $159.6 million in cash and cash equivalents, sufficient to support operational liquidity needs for at least the next 12 months[316] Strategic Initiatives - The acquisition of Pathline was completed in April 2025[258] - The company aims to drive targeted product launches in therapy selection and MRD through its launch excellence program[259] - Continued expansion into the community oncology market is planned, leveraging established strategic positions with community hospitals[259] - The company expects to maintain operational efficiency through automation and process improvements[259] - The company is focused on enhancing its test menu and driving down testing costs through investments in technology and automation[255] - The company anticipates an increase in research and development expenditures as it continues to invest in innovation projects and new tests[293] - The company anticipates continued growth opportunities in key markets despite an increasingly uncertain macroeconomic environment in fiscal year 2026[320] Regulatory and Market Environment - The FDA's evolving regulatory framework for Laboratory Developed Tests (LDTs) may impact compliance obligations and costs[263] - NeoGenomics is a leading provider of Heme oncology diagnostic testing and solid tumor NGS testing solutions in the U.S.[254] - The company operates under a single segment encompassing a comprehensive range of oncology diagnostic services[265] - NeoGenomics has operations in the UK, exposing it to foreign currency exchange risks, primarily in British Pounds, but currently does not hedge these risks[324] - The company issued $345.0 million in 2028 Convertible Notes with a fixed annual interest rate of 0.25%, which mitigates economic interest rate exposure[323] Interest Income and Expense - Interest income decreased by 50.8% to $9.1 million in 2025, primarily due to a reduction in the average balance of invested cash and lower interest rates[302] - Interest expense decreased by 43.3% to $3.8 million in 2025, reflecting the maturity and settlement of the Company's 2025 Convertible Notes[305]