Castle Biosciences FY Conference Summary Company Overview - **Company**: Castle Biosciences (NasdaqGM:CSTL) - **Date**: November 19, 2025 - **Key Speaker**: Derek Maetzold, CEO Key Points Financial Performance - **Q3 Revenue Growth**: Normalized pro forma revenue grew by 36% year-over-year, matching the test volume growth of 36% for core TissueCypher and melanoma tests [4][5] - **Cash Position**: Ended the quarter with approximately $289 million in cash or cash equivalents, indicating a strong balance sheet [5] - **Year-End Guidance**: Raised guidance by $16 million, now projected between $327 million and $335 million [5] Product Performance - **DecisionDx-Melanoma**: Growth reaccelerated by 12% in Q3, attributed to a sales team refocus towards melanoma tests [6] - **Clinician Engagement**: 1,816 clinicians ordered DecisionDx-Melanoma tests in Q3, indicating strong market penetration [6] - **Market Penetration**: Estimated at around 30%, with ongoing efforts to drive adoption among clinicians [8] Clinical Studies and Data - **Influential Studies**: Key studies published have shown that patients who avoided sentinel lymph node biopsy based on low-risk results from DecisionDx-Melanoma had zero recurrences, supporting the test's clinical utility [11][12] - **Histological Subtyping**: Data presented at the Fall Clinical Dermatology meeting indicated that patients with low-risk results from the test had a 98.5% chance of being alive at five years [14] Regulatory and Reimbursement Insights - **FDA Breakthrough Designation**: Received earlier in the year, with plans for submission in early 2026 [16] - **Reimbursement Potential**: Anticipated improvements in coverage eligibility under state biomarker laws post-FDA approval [17][18] Market Dynamics - **Atopic Dermatitis Test Launch**: Targeting approximately 13 million patients with moderate to severe atopic dermatitis, aiming to identify JAK inhibitor responders [46][47] - **Market Research Feedback**: Positive responses from dermatologists regarding the test's ability to reduce trial and error in treatment [52] Growth Opportunities - **TissueCypher Expansion**: Plans to enhance the test with multi-omics capabilities and a non-endoscopic self-collection device [31][33] - **Sales Team Expansion**: Increased reach in the GI market, with a focus on improving touchpoints and frequency within existing areas [30] Financial Outlook - **Gross Margin Projections**: Expected to be in the mid-70% range on an adjusted basis, with potential pressure from the atopic dermatitis launch [56] - **Operating Leverage**: Anticipated growth in revenue and profitability as the company continues to expand its product offerings [58] Strategic Initiatives - **Capital Allocation**: Plans to invest in commercial activities, clinical studies, and pipeline opportunities, including collaborations with other companies [62] Misunderstood Elements - **Market Perception**: The focus on squamous cell carcinoma coverage overshadowed the healthy growth of the overall business, particularly in the TissueCypher segment [67] Conclusion Castle Biosciences is positioned for continued growth with strong financial performance, innovative product offerings, and strategic regulatory initiatives. The company is actively working to expand its market presence and improve patient outcomes through its diagnostic tests.

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached $83 million, with a total revenue guidance for 2025 raised to $327-$335 million from the previous range of $310-$320 million [18][19] - Gross margin for Q3 2025 was 74.7%, down from 79.2% in Q3 2024, while adjusted gross margin was 76.8% compared to 81.9% in the same period last year [19] - Net loss for Q3 2025 was $0.5 million, compared to net income of $2.3 million in Q3 2024, with diluted loss per share at $0.02 versus diluted earnings per share of $0.08 in the prior year [21] Business Line Data and Key Metrics Changes - Total test report volume for Q3 2025 was 26,841, with core revenue drivers growing 36% year-over-year [12] - DecisionDx-Melanoma reports reached 10,459, marking a 12% year-over-year increase and surpassing 10,000 reports in a single quarter for the first time [12] - DecisionDx-SCC delivered 4,186 test reports in Q3 2025, maintaining high volume without proactive marketing [13] - TissueCypher achieved 10,609 test reports in Q3 2025, representing 75% year-over-year growth [16] Market Data and Key Metrics Changes - The target patient population for Advanced AD TX is estimated at approximately 13.2 million individuals aged 12 and older with moderate to severe atopic dermatitis, representing a $33 billion total addressable market opportunity in the US [9][10] - Approximately 80% of clinicians sampled indicated they would likely use Advanced AD TX, highlighting its potential value [10] Company Strategy and Development Direction - The launch of Advanced AD TX is aimed at implementing precision medicine in atopic dermatitis management, with plans for phased clinical availability throughout 2026 [11] - The company is focused on leveraging existing laboratory, logistics, and commercial infrastructure to efficiently introduce Advanced AD TX [10] - Continued emphasis on building education and awareness for TissueCypher to drive adoption and utilization [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the operating model and strategic initiatives, reinforcing the commitment to improving patient care [12][23] - The company expects to maintain positive net cash flow from operations for 2025, supported by strong top-line performance and disciplined expense management [22] Other Important Information - The company is pursuing multiple reimbursement pathways for Advanced AD TX, recognizing the need to build a new market [10] - New peer-reviewed evidence further validates the clinical utility of DecisionDx-SCC, enhancing its role in patient care [14][15] Q&A Session Summary Question: Addressable patient population for Advanced AD TX - Management estimated that around 10-20% of the 13.2 million patients with moderate to severe atopic dermatitis could be of Medicare age [24] Question: Reimbursement pathways for Advanced AD TX - Management indicated that they are exploring various reimbursement options but did not provide specific details at this time [25] Question: Timing and likelihood of SCC reconsideration requests - Management noted that the timing for reconsideration decisions is uncertain and depends on the pace of Medicare contractors [28] Question: Volume outlook for DecisionDx-Melanoma - Management reiterated expectations for high single-digit volume growth for DecisionDx-Melanoma for the full year 2025 [31] Question: Market penetration for TissueCypher - Management acknowledged that they are in the early growth phase for TissueCypher, with ongoing efforts to educate the market and increase adoption [35] Question: FDA approval impact on DecisionDx-Melanoma - Management does not anticipate a change in the Medicare rate due to FDA approval but sees potential long-term benefits from state biomarker laws [39][40]

Empowering people, informing care decisions November 2025 ©2025 Castle Biosciences 1 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. These forward-looking statements include, but are not limited to, statements concerning: our positioning for continued grow ...

Financial Performance - Company reported Q3 2025 revenue of $83 million, a decrease from $85.8 million in Q3 2024 [5][9] - Non-dermatologic revenue increased by 67% compared to Q3 2024 [1] - Total test reports for core revenue drivers (DecisionDx-Melanoma, TissueCypher) increased by 36% over Q3 2024 [1] - Company raised full-year 2025 revenue guidance to $327-335 million from $310-320 million [1][8] Operational Highlights - Total test reports delivered in Q3 2025 were 26,841, compared to 26,010 in Q3 2024 [5] - DecisionDx-Melanoma test reports delivered were 10,459, up from 9,367 in Q3 2024 [5] - TissueCypher Barrett's Esophagus test reports delivered were 10,609, compared to 6,073 in Q3 2024 [5] - DecisionDx-SCC test reports delivered were 4,186, slightly down from 4,195 in Q3 2024 [5] New Product Launch - Company announced the launch of AdvanceAD-Tx™, a test designed to guide systemic treatment decision-making in patients with moderate-to-severe atopic dermatitis [1][12] Gross Margin and Adjusted Metrics - Gross margin for Q3 2025 was 75%, down from 79% in Q3 2024 [5] - Adjusted gross margin was 77%, compared to 82% in the same period of 2024 [5] - Adjusted EBITDA for Q3 2025 was $9.2 million, down from $21.6 million in Q3 2024 [9] Cash and Investments - As of September 30, 2025, the company's cash, cash equivalents, and marketable investment securities totaled $287.5 million [7]

Core Insights - Castle Biosciences is expected to report Q3 2025 results on November 3, 2025, with anticipated earnings of ($0.35) per share and revenue of $71.062 million [1][2] - The company previously reported Q2 2025 earnings of $0.15 per share, exceeding estimates by $0.66, with revenue of $86.18 million, surpassing expectations of $71.53 million [3] - Analysts project a $0 EPS for the current fiscal year and a $-2 EPS for the next fiscal year [3] Financial Performance - Castle Biosciences has a market capitalization of $739.76 million, with a price-to-earnings ratio of -72.86 and a beta of 1.13 [4] - The stock has fluctuated between a fifty-two week low of $14.59 and a high of $35.84, with a current stock price of $25.50 [4] - The company maintains a debt-to-equity ratio of 0.02, a quick ratio of 6.69, and a current ratio of 6.85 [4] Insider Activity - Insider Derek J. Maetzold sold 1,339 shares at an average price of $22.44, totaling $30,047.16, resulting in a 2.08% decrease in his position [5] - Following the sale, Maetzold holds 62,988 shares valued at approximately $1.41 million [5] Institutional Holdings - Institutional investors own 92.60% of Castle Biosciences, with notable increases in holdings from several firms, including a 10,592% increase from Jones Financial Companies [6] - Other significant increases include a 256.9% boost from Tower Research Capital and a 15,811.5% increase from Amundi [6] Analyst Ratings - Weiss Ratings issued a "sell (d-)" rating, while Wall Street Zen upgraded the stock from "sell" to "hold" [7] - Canaccord Genuity maintains a "buy" rating with a price target of $37.00, and Zacks Research upgraded the stock to "strong-buy" [7][8] - The consensus rating is "Moderate Buy" with an average target price of $36.57 [8] Company Overview - Castle Biosciences specializes in molecular diagnostics, providing testing solutions for dermatologic cancers, Barrett's esophagus, uveal melanoma, and mental health conditions [9] - Key products include DecisionDx-Melanoma, DecisionDx-SCC, MyPath Melanoma, and TissueCypher, which assist in risk stratification and diagnosis [9]

Summary of Castle Biosciences Conference Call Company Overview - Castle Biosciences is a diagnostic services company focused on guiding patient care and improving outcomes through a portfolio of tests, including MyPath Melanoma, DecisionDx-Melanoma, DecisionDx-SCC, and TissueCypher for Barrett's esophagus [3][4][5] Key Products and Services - **MyPath Melanoma**: A genomic test for identifying or ruling out melanoma in indeterminate biopsy samples [3] - **DecisionDx-Melanoma and DecisionDx-SCC**: Tests providing risk scores for skin cancers, aiding in treatment decisions [4] - **TissueCypher**: A spatial protein test for assessing the risk of Barrett's esophagus progressing to esophageal cancer, with a five-year mortality rate of 85% for esophageal cancer [4] - **ESOPredict**: Recently acquired test with similar utility to TissueCypher, aimed at identifying Barrett's esophagus [5] - **Atopic Dermatitis Program**: Collaboration with Cybase to identify flares of atopic dermatitis [3][5] Financial Performance - The company reported strong growth in its portfolio and maintained a high gross margin, with approximately $275 million in cash at year-end, positioning it well for future opportunities [5][6] Market Penetration and Growth Potential - Current testing penetration for melanoma is estimated at 30-31% of suitable patients, with significant room for growth as melanoma is underreported [9][10] - Approximately 55-60% of eligible clinicians have used Castle's dermatology tests, indicating potential for increased adoption [10] - Long-term growth is expected to be in the high single digits, with seasonal variations impacting volume [13][15] Reimbursement and Coverage - The company received acceptance for reconsideration requests for its squamous cell carcinoma test from Medicare contractors, which is seen as a positive administrative milestone [20][21] - Significant publications supporting the clinical utility of the SCC test suggest potential cost savings for Medicare, which could influence future coverage decisions [23][24] Strategic Direction - Castle Biosciences aims to identify clinical questions that lack adequate answers and develop tests to address these needs, with a focus on both dermatology and gastroenterology [26][30] - The company has expanded its sales force to enhance market penetration, particularly in the GI space, and is focused on maintaining strong relationships with physicians [36][39] Future Outlook - The company anticipates continued strong growth for its tests, particularly TissueCypher, with an expanding patient pool and positive physician response [40][41] - There is an ongoing emphasis on R&D to enhance existing tests and develop new ones, ensuring the company remains competitive in the diagnostic testing market [7][34] Additional Insights - The company has made strategic acquisitions, such as Previse, to enhance its product offerings and address unmet clinical needs [31][32] - The focus on automation and efficiency in lab processes has contributed to maintaining attractive gross margins despite varying profitability across different test types [34][35]

Core Insights - Castle Biosciences significantly outperformed Wall Street expectations in Q2 2025, reporting GAAP EPS of $0.15 and non-GAAP revenue of $86.2 million, both exceeding analyst estimates [1][2] - The company raised its full-year 2025 revenue guidance to a range of $310 million to $320 million, reflecting stronger-than-expected adoption of key tests [10] Financial Performance - GAAP revenue for Q2 2025 was $86.2 million, nearly flat compared to $87.0 million in Q2 2024, with a year-over-year change of -0.9% [2] - Non-GAAP EPS was $0.16, down 51.6% from $0.31 in Q2 2024 [2] - Adjusted EBITDA fell to $10.4 million, a decrease of 51.6% compared to $21.5 million in Q2 2024 [2] - Gross margin decreased from 80.7% in Q2 2024 to 77.3% in Q2 2025, reflecting rising expenses and a less favorable sales mix [2][9] Business Overview - Castle Biosciences specializes in molecular diagnostics, focusing on tests that provide actionable information for managing skin, gastrointestinal, and mental health diseases [3] - The company aims to expand its test portfolio through launches and acquisitions while ensuring reimbursement coverage to support test adoption [4] Recent Developments - Total test volumes reached 26,574 in Q2 2025, a 6% increase year-over-year, primarily driven by core offerings like DecisionDx-Melanoma and TissueCypher [5] - DecisionDx-Melanoma received FDA's Breakthrough Device designation in Q2 2025, indicating regulatory recognition for its innovation [5] - TissueCypher test report volume increased by 117% year-over-year in Q1 2025, attributed to expanded sales force coverage and rising clinical demand [6] - The company discontinued the IDgenetix test due to reimbursement challenges, aiming to streamline operations and improve profitability [8] Strategic Focus - Management is refocusing commercial efforts towards melanoma tests following the loss of Medicare coverage for DecisionDx-SCC, which has significantly impacted revenue [7] - The acquisition of Previse aims to broaden the gastrointestinal segment's potential, although it is not expected to contribute meaningfully to 2025 financial results [6]

Financial Performance & Growth - Q2 2025 total test reports for core revenue drivers (DecisionDx-Melanoma, TissueCypher) increased by 33% year-over-year compared to Q2 2024[14, 61] - Gross Margin for Q2 2025 was 77%, while Adjusted Gross Margin reached 80%, slightly lower than the 81% and 83% respectively in the same period of 2024[14] - Net cash provided by operations in Q2 2025 was $20.8 million, a decrease from $24.0 million in Q2 2024[14] - As of June 30, 2025, the company's cash, cash equivalents, and marketable investment securities totaled $275.9 million[14] - Net income for Q2 2025 was $4.5 million, and Adjusted EBITDA was $10.4 million[14] Strategic Initiatives - The company aims to achieve operating cash flow positivity by the end of 2025[4, 60] - The company closed its acquisition of Previse, a gastrointestinal health company, focusing on chronic acid reflux related diseases, including esophageal cancer[14] - The company entered into a collaboration and license agreement with SciBase to develop diagnostic tests for dermatologic diseases[14] Market Penetration & Clinical Utility - DecisionDx-Melanoma clinical use is associated with improved patient survival, with a 29% lower 3-year melanoma-specific mortality and a 17% lower 3-year overall mortality in tested patients compared to untested patients[38] - DecisionDx-SCC Class results predict an SCC patient's individual metastatic risk and individual benefit of ART[44] - TissueCypher is the strongest independent predictor of progression to HGD or EAC in Barrett's esophagus patients, detecting 62% of progressors[51, 52]

Core Insights - Castle Biosciences reported Q2 2025 revenue of $86 million, a slight decrease from $87 million in Q2 2024, while total test reports for core revenue drivers increased by 33% year-over-year [1][4] - The company raised its full-year 2025 revenue guidance to a range of $310-320 million from the previous range of $287-297 million, reflecting strong performance in its core tests [7] Financial Highlights - Q2 2025 revenues were $86.2 million, compared to $87.0 million in Q2 2024, with adjusted revenues of $86.2 million, slightly down from $86.6 million in the same period last year [4] - Total test reports delivered in Q2 2025 were 26,574, a 6% increase from 25,102 in Q2 2024 [4] - Gross margin for Q2 2025 was 77%, with an adjusted gross margin of 80%, compared to 81% and 83% in Q2 2024, respectively [4] - Net cash provided by operations was $20.8 million, down from $24.0 million in Q2 2024 [4] Operational Highlights - The company delivered 9,981 DecisionDx-Melanoma test reports in Q2 2025, up from 9,585 in Q2 2024, and 9,170 TissueCypher Barrett's Esophagus test reports, significantly up from 4,782 in the same period last year [4] - The DecisionDx-SCC test reports delivered were 4,762, compared to 4,277 in Q2 2024, despite the impact of the Novitas local coverage determination [4] - The company discontinued its IDgenetix test offering in May 2025, which affected test report volumes [4] Strategic Developments - Castle Biosciences completed the acquisition of Previse and announced a collaboration with SciBase, aimed at enhancing its gastrointestinal offerings and developing new diagnostic tests [3][10] - The company is focused on executing its current test portfolio while investing in future growth initiatives [3] Market Position and Future Outlook - The company anticipates continued growth in test volumes and revenue, supported by the clinical value of its tests [2] - The DecisionDx-Melanoma test has received Breakthrough Device designation from the FDA, which may enhance its market position [13] - The company aims to create a multiomics approach for improved patient care in Barrett's esophagus through its acquisition of Previse [10]

Empowering people, informing care decisions First Quarter 2025 May 5, 2025 ©2025 Castle Biosciences 1 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. These forward-looking statements include, but are not limited to, statements concerning: our positioning f ...