Exact Sciences(US:EXAS)2025-11-03 23:00Financial Data and Key Metrics Changes - Total revenue grew 20% year over year to $851 million, exceeding guidance by $43 million [4] - Adjusted EBITDA increased by $37 million, or 37% year over year, reaching $135 million, with adjusted EBITDA margins expanding by 200 basis points to 16% [4][6] - Free cash flow for the quarter was $190 million, an increase of $77 million, with year-to-date free cash flow at $236 million, up 270% year over year [5] Business Line Data and Key Metrics Changes - Screening revenue increased 22% year over year to $666 million, driven by strong Cologuard growth [4] - Precision oncology revenue rose 12% year over year to $183 million, supported by Oncotype DX expansion [4] Market Data and Key Metrics Changes - Cologuard brand awareness is recognized by over 90% of consumers, contributing to increased adoption among the 55 million Americans not up to date with colorectal cancer screening [8] - Cologuard Plus demonstrated 95% sensitivity and 94% specificity, leading to a 40% reduction in false positives compared to the original Cologuard [8] Company Strategy and Development Direction - The company is focused on expanding access to Cologuard Plus and driving adoption of CancerGuard, a multi-cancer early detection test [3][11] - The strategy includes deepening relationships with payers and health systems to close gaps in cancer screening [3][9] - The company plans to sunset Cologuard in favor of Cologuard Plus, which is recognized as a superior test [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 financial targets, citing strong momentum and operational leverage [7] - The company is raising full-year revenue guidance to between $3.22 billion and $3.235 billion, reflecting a positive outlook for growth [5][6] - Management noted that the current quarter marks an inflection point for the business, with expectations for continued growth [7] Other Important Information - The company is investing in direct-to-consumer marketing for CancerGuard, leveraging its established brand [12] - The launch of CancerGuard is expected to address the low screening rates for various cancers, with plans for extensive provider education [11][12] Q&A Session Summary Question: What drove the strong screening performance in Q3? - Management attributed the performance to improved relationships with health systems, targeted messaging, and strong execution from the sales team [19] Question: What is the outlook for 2026? - Management indicated that guidance for 2026 will be provided in the next earnings call, but noted a long-term growth target of 15% CAGR from 2022 to 2027 [21] Question: How will care gap strength impact margins? - Management expects an uptick in gross margins in Q4 due to fewer care gap shipments compared to Q3 [24] Question: What is the strategy for CancerGuard with payers? - Management emphasized a long-term approach to securing coverage with payers, focusing on the positive impact of screening [25] Question: What is the status of the Freedom test timelines? - Management confirmed no changes to the Freedom V2 timelines, with data expected to be presented at a scientific conference soon [28] Question: How is the Cologuard Plus contributing to growth? - Management noted that Cologuard Plus contributed approximately 2-300 basis points to overall screening growth in Q3, with expectations for 3-400 basis points in Q4 [37] Question: What are the expectations for OncoDetect and CancerGuard in 2026? - Management does not expect OncoDetect to be a material contributor in 2025 but anticipates significant growth potential in the future [34]