NeoGenomics, Inc. Aktie

Yes. All right. Thank you, everyone, for joining us. My pleasure to introduce the NeoGenomics team. We're glad to have you here at the Morgan Stanley Healthcare Conference this morning. Joined by Anthony Zook, Chief Executive Officer; Warren Stone, President and Chief Operating Officer; and Abhishek Jain, the Chief Financial Officer. So, thank you all for being here.

Thanks for having me.

Great. Maybe for Tony, for an investor that is not necessarily incredibly familiar with the NeoGenomics story, what is the simplest way to understand what you all do, how you fit into the precision oncology market, and now that you've been in the seat for a while, what do you think is the biggest misconception that you hear or that you encounter with investors when it comes to your company?

Sure. I guess first, NeoGenomics, pure play oncology, I think, is an important factor. We remain focused in oncology because we think it allows us to better understand and serve our customers. We focus in the community. And so, we're proud of that fact. We help bring innovation into the community setting. Why? That's where the patients are. Almost 80% of patients do seek treatment in the local community, and so we focus relentlessly on that community provider. Our genesis, while that was in diagnosis, our portfolio has continued to evolve in through therapy selection and MRD.

I would say the area that is probably not as well understood, and it is our effort to do so. We are obviously the market leader in heme. And how we leverage that heme position enables us to grow and penetrate into other market segments. And I think a lot of investors, when they step back and you look at NeoGenomics in totality, while it's only 10% of our portfolio is NGS, it's a third of our clinical revenue. And so we actually have a portfolio that is over $250 million in NGS, and it's growing at 26%. And so, we believe that there is still ample opportunity for us to continue to drive, and in fact, our future is very much dependent on how we can drive our NGS and MRD business.

And so I think sometimes people ask us the question how will you compete as if we're starting from scratch when in reality we have a $250 million business that's growing quite nicely. And so I think it's incumbent upon us to continue to educate and drive that message home.

All right. And, you know, since you've joined the company, where have you been most focused? What's been, kind of, the greatest area of change that you've looked to lead within the organization, and how should investors think about that across the different kind of high-level priorities, whether it's the indications that you're operating in, therapeutic categories, capital allocation?

Yeah, you actually hit it in the question with the focus. Where do I focus? When I joined NeoGenomics, I could tell you, there wasn't a place you couldn't point that you wouldn't see an opportunity, right? This is a company that grew primarily through acquisition, so a lot of the fundamentals weren't in place quite yet, right? It's not an organization that had invested heavily in R&D, so there was an opportunity. Then you could look to commercial, and there was an opportunity. Then you could look over to IT, and there was an opportunity.

I think for us, the biggest challenge was focus, focus, focus. Where do we want to put our resources? Where do we want to make sure that we're at our top three or four things that are going to drive value for us? And then really focus relentlessly on those. And I think that simplicity has actually unlocked a lot of value. And so today, we always talk about the midnight question. We try to boil down things at NeoGenomics to what is most important for the N, the E, and the O of Neo to be successful, and it's for our R&D team to continue to drive our next-generation portfolio, right? For our commercial team, it is how do they continue to build out their commercial organization and infrastructure to better serve their customers. And, you know, in our labs, it's the lab of the future initiatives. And so these, the simplicity of focus, is unlocking a lot of value for us.

A lot of investors, when they look at this space, I think they're more familiar with the precision oncology that's practiced in academic medical centers or in research. You all obviously have a pretty big competitive advantage in the community oncology setting. How do you want investors to understand your focus in community oncology? What do you think is underappreciated about community oncology? Why is that a structural advantage for you all?

Sure. Yes, I'll kick it off and then Warren, maybe we can drive more color. Again, I think companies are built in purpose of their pursuit, right? And I think those organizations that are built to serve academia, they focus on innovation and they have deserved their right with some of the great products that they bring to market. But in the community, that practicing physician has completely different needs. They are ground in guidelines. They're ground in practicalities. They're dealing with patient flow. They want to take out friction within the system.

And so, just like that drive on innovation can be a competitive advantage, so is a deep understanding of what your customer needs are at the community level. Simple things like how you prepare your lab reports could actually be the most important thing in their day. And so you have to be built for purpose, and we think that we are very much focused on what their needs are and for them better serving their customers with pragmatic solutions that unlock time so that they can more effectively treat their patients is something that we focus relentlessly on, everything from through our labs to our commercial to even how we position our portfolio of solutions, not a product. So I think there is a big difference in how companies are built to serve those. Warren, give me some color.

Yes, I think, and you've hit a lot of the key points there. I think most importantly, first and foremost, ASCO does a survey every year about where do patients actually want to be treated. The survey in 2026 basically indicated almost 80% of patients wanting to be treated within 50 miles of where they live. That's a pretty small radius. And why is that? They want to be treated where their family, their infrastructure is, because they're going through arguably one of the biggest events in their life, and they need support structures in order to support them through that journey, so they want to stay close to home.

So that's really the relevance with regards to the community. And also, if you think about a community practice, either that practice or in some cases even that oncologist is a generalist. So the type of patient that's walking into that practice could have any form of cancer. They could have a heme cancer, they could have a solid tumor cancer, and obviously different types. And in order to address the needs of those treating physicians who are seeing a patient every 15 to 20 minutes, a breadth of portfolio where they can standardize on their send-out partner for diagnosis, for therapy selection, for MRD, becomes critically important. Because the last thing they want to be doing in their day is thinking about who do I send this diagnostic test, or this therapy selection test, or this MRD test to?

Have they got this test, have they got this indication? And I think this is where NeoGenomics really thrives. That breadth of portfolio, the almost 500 tests that Tony referenced, the across diagnosis, therapy selection, MRD, solid tumor, and heme, we're able to address almost all of their requirements, allowing them to standardize on NeoGenomics from our perspective.

That really is one of the key differentiators. The second is we are relentlessly focused on taking friction out of the experience, making it as easy as possible to do business with NeoGenomics so they can focus on what they want to focus on, and that's treating their patients and ensuring the best possible outcomes in their patients. And you know, we spoke about this in our Q2 earnings, but we have a Net Promoter Score of 78, which is, if you know anything about NPS scores, an incredibly high indication of the experience that we provide to our customers in the community.

Maybe take us a level deeper. As you think about the relationship with a customer at the hospital level or an established hematologist relationship, how does that translate into more testing across the diagnostic continuum, you know, to comprehensive genomic profiling, ultimately, potentially into MRD? What does that look like? How do you drive that? How long does it take?

Yes. So I think first and foremost, and maybe not too, I think what I want to say first and foremost, is almost every single cancer journey starts with pathology. Pathologists' role is to diagnose cancer. That's where NeoGenomics started, that's where NeoGenomics grew up, and we've forged incredibly strong partnerships with pathology. But how does that help us in terms of understanding the sort of penetration from the cancer care continuum?

You know, the next step is, let's just use an example of a patient that's diagnosed with early-stage -- early-stage non-small cell lung cancer. And that gets diagnosed. The next step is, yes, we would want to run some therapy selection on that. And we then work with those hospitals and those oncology practices to put a care pathway in that says, as soon as that patient is diagnosed with the lung cancer, we automatically run a therapy selection test, which would then allow them to identify what sort of therapies you'd be able to put that patient on through this care pathway. Important in this particular example would be, okay, let's make sure we're also including TMB. So our PanTracer family, or whether it be tissue or liquid, would include TMB.

Why is that relevant? Because that will indicate whether they would likely benefit from an IO therapy. Great, they're going to potentially benefit from an IO therapy. We now indicate through the care pathway, let's run MRD, let's run our RaDaR ST because we now have IO as an indication that they can actually track the implications or the benefits of IO therapy for that particular patient.

So you can see how the portfolio sort of layers on each other, and you know, this was one example from early-stage small (sic) [ non-small ] lung cancer, but there's many others through the portfolio where you can see how these things just layer on top of each other starting with the pathologist. And as we implement more care pathways, more directional interfaces, the sort of decision-making with regards to what tests are used become less relevant because the care pathway actually informs that.

And Michael, another point I think that is important to understand, when anytime we talk to a physician, we don't, seldom do we bring a product solution to that physician. We're trying to bring a portfolio solution to that because we can almost with certainty say there is a need that they have for some of our products. It may not be liquid, but they're using tissue or they need this or they need that. And so we can then run that continuum. And it even figures into how we look at our portfolio development. And Warren, PanTracer Pro might be a perfect example of that.

I think that building on that's a great call, Tony. I think so earlier this year, I think it was February, we launched our PanTracer Pro, which is just a simplified ordering process and all it does is it takes the decision-making out of the hands of their treating oncologists to determine, based on this patient's, based on their cancer type, based on their stage, what tests should I order to actually inform therapy, what test should I order to inform MRD. We, from a NeoGenomics perspective, take that decision by looking at our OncoTree, by looking at guidelines, and actually determine what tests to run.

So they don't have to even think about it in their practice any longer, what test should I be running? All they need to tell us is who their patient is, you know, what cancer do they have, the stage, we take everything else from there, and we will run reflexes if need be, we'll run add-ons if need be, but they will get a report back, which will be a comprehensive report that will indicate what therapies that they should potentially put their patients on, what clinical trials are available for their patients. And it's just a comprehensive solution with literally requisitioning one test and simply indicating the patients, their disease type, and their stage.

Maybe just to add on, can you say a little bit more about, in the community oncology setting, like, why that is so important to be able to do all of that? Like, help paint the picture of what the community oncologist looks like relative to how patients are treated in an academic medical center, why that's so valuable.

Yes, look, in academia, it's always a question of what's possible, right? You know, additional information, I'll find a use for that information, right? So they're probing the what might be. In daily practice, 25, 30 patients a day, I mean, they barely have time to breathe, and just crossing the hall, they better have simplicity in the lab report that they're reading. And so anything that removes that friction or makes life easier or takes certain decisions that are just, these are decisions the physician would make ultimately had they the information, but they'd have to wait for it.

And then there would require another test request. And these types of simple things take all the friction out of the system for them and let them focus where they want to focus, which is in patient treatment. And again, it's a big difference when you're dealing, as Warren said, with generalist physicians in the community versus people that are trying to push the envelope of information in the academia center. It's night and day difference.

And maybe one more thing I'll build on there. Again, coming back to ASCO, obviously it's a very important body. They run a survey every year as well in terms of pain points and unmet needs for treating physicians. And actually, within the top five, I don't know exactly where it's at, within the top five in 2026, just the speed at which the industry is moving. The number of new therapies, the number of new tests, and the ability of physicians to keep abreast of what's happening is one of their top challenges. And with putting solutions like PanTracer Pro in place, we take that burden away from them. And we actually take that burden on, and that allows them to focus on what they want to do, and that's treating their patient and ensuring the best possible outcomes for their patients.

Right. In each of the last couple of quarters, your NGS-based testing revenue grew circa 26%. And I think today it's roughly a third of your clinical revenue. How should investors think about what's driving that underlying growth if you had to deconstruct it? Is it volume, is it pricing, is it better collections, reimbursement? Different testing modalities, what's the right way to think about that?

Let Abhishek earn some money this morning. Come on.

Yes. So on the NGS revenue growth, first, like 26% growth is what we put together in the first half of the year. We have called out the volume growth has been in the mid-teens and the remaining came from the RCM initiatives and the RCM growth. So if you were to start to parse out the volume growth, for example, on the volume, we are seeing a shift from our single-gene panels and the targeted panels to the larger panels. It basically goes back to that whole portfolio company where we have basically a sizable portfolio on the NGS side, and that basically shifts in the single gene to a larger panel test. That is also kind of impacting the volume growth. And that's the reason we started to provide this new metric that our larger panels are growing at 20% plus. So that probably is the first piece that I would want to highlight in the volume set, our volumes for the larger panel tests are growing like ahead of 20%.

The second piece is on the RCM side. As you rightly pointed out, that RCM growth of roughly 10% or so, two-thirds of that RCM growth is coming from that mix shift. Now if you were to think about it, that our volume growth is a little bit depressed because you are seeing the transition, but that is being reflected in your pricing increases because that mix shift is driving your AUP growth. So two-thirds of that 10% is coming from that mix shift, and the remaining one-third of the RCM growth is coming from various initiatives that we have under our RCM umbrella, starting from the contractual wins, the policy wins, ability to drive the price increases, your ability to drive more collections in our processes. So we're going to look for those opportunities as to how do we continue to drive the RCM benefits. So those are different pieces, and we are very pleased to see the durability of our NGS business, which is growing at a pretty decent pace.

And on the RCM point, is there anything more there to unpack for investors on how they should think about the durability of the growth from some of those initiatives?

No, absolutely, and we have shared, Mike, in the past that 2026, we will see a slightly higher proportion of our RCM benefit in our overall growth. So for example, in the first half of 2026, our clinical revenue growth was about 14%, and the volume growth was in the low single digits, whereas most of the growth came from the AUP. But generally, what the investors should be viewing, that half of our growth is going to be the volume and the other half is going to be RCM on a go-forward basis.

Now, if you were to then parse out within the RCM what's going to give us the durability or how we will continue to drive the RCM benefit, again, 2/3 of that is going to be coming from the mix shift. And here you will take the company-level approach. Then you will start to see that our NGS volumes and the NGS revenues are growing at a much more faster pace as compared to the rest of the portfolio. So that automatically gives us the RCM benefit. And we are seeing that in the other 1/3 part of the business. On the RCM side, again going back to the different initiatives, we have been able to win the IO now from the MolDX.

We have been able to drive the commercial payers on the contractual side. As well as we have called out that over 60% of our clinical revenue comes from the direct client bill. We are able to kind of get some price increases there on a yearly basis, which basically helps us drive the RCM. Last but not the least, I would want to call out in our collection efforts, there's definitely a lot more room. As the company's shifting towards more NGS testing, more MRD testing, we need to kind of improve or build on our billing infrastructure. And actually in the third quarter of 2026, we implemented a new billing system, XIFIN, and that is a big undertaking in the sense that this particular system will help us be more effective in our collections processes, as well as making us more efficient there.

And Abhishek, I think, Michael, to your question of durability, you know, we're not going to get into long-term forecast business again, right? But if we sit here today and while what we can say with confidence and our own belief in the durability of this over time. Right, we sit here today, 10% of our volume, it's represented about a third of our business is NGS and it has this mix shift element to it. You know, you go out into the future, we can see that that moves from a third of our business to over 50% of our business, right? And when you start to look at that being NGS and MRD, even if you just take industry norms relative to margin, you're going to see, over half of our business and growing is in the mid-60 plus margin range. And then you combine that with the existing base business and you can see not just revenue growth, but you can see margin growth. And we believe that that is very, very foundational to where we want to take the company.

Anything else from your perspective or from where you all sit? That is helping drive your level of confidence that NGS can, kind of, continue to grow above the market rate?

I think there's a couple of factors. So first and foremost is looking at the number of new therapies coming to market, particularly within the heme side of things. I think pharma companies have been heavily focused on solid tumor cancers from a therapy perspective, and there's still a very robust pipeline coming through which is encouraging, that'll drive demand on therapy selection on the solid tumor. However, the number of new therapies that are coming to market on the heme side of things is also very encouraging, and it's one of the reasons why we're seeing an above-market growth on the heme NGS side of things. So I think that's a very key indicator for us.

I think the other aspect is not to lose sight of is we still estimate that from a therapy selection market penetration perspective in the community, it's somewhere between 35% and 40%. So the majority of physicians are still not actively using large-panel therapy selection in their treatment monitoring simply because it's not in guidelines yet. But it's becoming more relevant in guidelines, and as it does, it's going to drive more demand from an NGS perspective. So I think there's a lot of indications that demand for large panel NGS from a volume perspective is going to continue to be robust into the future, coupled with obviously many opportunities on the RCM and the mix side of things for us. So we're very confident in terms of the outlook.

Got it. Maybe just shifting gears a little bit, you mentioned the PanTracer product earlier. There's a tissue, there's a liquid, there's PanTracer Pro. What's the right way to think about PanTracer as a product family? You know, are they distinct tests? Is it more of one continuous offering? Like, how should investors think about that?

I think I would love for investors to think about this as a solution. And it really is, it's our solution for therapy selection for solid tumor cancer. That's really what it is. And every situation actually dictates a different need at the end of the day. Within the community, because of historical guidelines which still point to sort of single gene or small panel NGS. There is still very much a tissue-first mindset within the community. And because it's been driven from the guidelines perspective. So we still very much see physicians asking for tissue first. And if we aren't able to get a result with tissue because there isn't enough tissue or the quality of the tissue might be exhausted or the quality of the tissue is not good, to then make use of liquid. In the case of lung, we see concurrent testing because that's in the guideline as well.

And then ultimately we'll reflex to liquid if we don't get a result on the solid tumor side. So we see it very much as a solution. And every situation, depending on the cancer type and the stage, actually demands a different part of that particular portfolio, which is then also coupled with various add-on IHC markers, which also helps to determine what type of therapies to put somebody on, whether it's a PD-L1 or a C-MET or a Claudin-18 or whatever the case is, we have that all within our portfolio. But we approach this from a portfolio perspective and a solutions mindset to the customer. As Tony said earlier, it's not distinct products, it's really around a workflow solution.

And what are you seeing from the standpoint of the test mix and how that's evolving, whether it's tissue, liquid, what you reflex to, if you're not able to necessarily get enough tissue sample, how has that evolved and where do you see that going?

I would say, in absolute terms, we still see a higher growth rate on the solid tumor. So, again, it's this tissue first mindset. If you look at it at a percentage perspective, yeah, liquid probably is growing faster, but it's off a smaller base at the end of the day because we only launched the product roughly a year ago. So we still see though, there is the exception always where a physician wants to go directly to liquid and there are some benefits for doing that. But that's really the exception. We anticipate for the foreseeable future that it'll still be a solid first with liquid as the alternative when I haven't got enough tissue or I actually want to run them in parallel with one another, which is becoming increasingly popular when you want to understand the tumor microenvironments.

That's where you can use liquid very effectively and when you want to understand the tumor properties as you use the solid tumor test. So that's becoming more and more relevant and we might see guidelines adapt over time to actually offer concurrent solutions in other indications like they do in lung today.

So the PanTracer Liquid, I think now has Medicare coverage. From your perspective, what do you think needs to happen for that to become a more material contributor to growth and how should everyone think about that in the context of some of the more emerging or competitive tests in the liquid biopsy space?

Simply put, time. Just time. You know, as Warren said, when we go into this, we go in as the PanTracer family, which by the way is demonstrating remarkable growth. So we're very, very happy with what we see happening with PanTracer as a family of product. When we launch a product, you know, we typically look at, first and foremost, its effect on the portfolio. And PanTracer Liquid has had a very nice halo effect on the portfolio because it complements the offering, right? It gives the physician another reason why this is a complete offering from NeoGenomics.

And so, in its own right, PanTracer Pro, PanTracer Liquid helped in the uptake on the growth curve of PanTracer tissue, right? And PanTracer as a family. And if we look longer term, go into the latter part of 2027 going into 2028, liquid in its own right will be a substantial contributor of that I'm sure, but PanTracer family will be a significant growth driver for us in 2027 and 2028.

Right. Maybe shifting gears to RaDaR and to MRD. So folks may be familiar with a coverage decision that you've got in late August, but for those that aren't, what was that? Why is it strategically important? What does it cover? And how do you see that in the context of the RaDaR platform more broadly?

So, yes, we communicated, I don't know, a month ago that we got coverage from an IO perspective. And that's really relevant for us for a couple of reasons. First and foremost, we estimate that, that represents about $4 billion from a TAM perspective, maybe slightly less than that, but around the $4 billion out of the roughly $20 billion TAM that we see from an MRD perspective. So large from that perspective. The other aspect is IO, as an indication, actually covers multiple forms of cancer. So what it actually allows us to now do is as we go to market, we can position ourselves as more of a pan-cancer solution to our physicians, which is important. It comes back to this sort of message to our physicians that I was talking about earlier, is that, you know, we're a complete solution for you.

We're not only taking certain indications, et cetera. So, that definitely rounds out the messaging from a physician perspective in the community setting. So those are two material. Size of the market that we're now able to address and the fact that we can go to a pan-cancer messaging are the two material aspects. And again, reimbursement very much in line with what's out in the marketplace from sort of the market leader and others out there. So it really does allow us to do that initial exome up front and then subsequent six time points beyond that as well, which sort of takes typical patient to this two-year monitoring cycle and really the purpose here is to actually understand how IO as a therapy is actually affecting their cancer. You know, is it being effective? Is it being effective? And do you need to adjust treatments or not is sort of how it's going to be utilized. And more and more of the therapies coming to market right now are IO-based as well.

And maybe in IO, but more broadly, MRD has obviously become very important, you know, growing large space, but also, more competitive. What would you like investors to understand about why Neo wins in this market and how are you thinking about your kind of commercial strategy or go-to-market strategy more broadly, within the context of what's happening in this space?

I think maybe I'll kick it off and then Warren can get into more detail on very specific to MRD. But I think first and foremost, as I said before, we don't look at it as a product, we look at it as a portfolio. And I think as we continue to build out our MRD portfolio, that holds true there as well, right? Physicians are looking for the robustness, a company that can handle from diagnosis to diagnosis through therapy selection to monitoring. And we believe that we have now a complement of a portfolio that achieves those objectives for them with high-quality tests.

Within MRD alone, we have now a building foundational point. And as Warren said, I think IO gives us kind of that cornerstone of a foundation to enable us to broad-based with our promotional efforts. And then when you build from that with additional indications, all of a sudden you have a competitive offering in MRD that is second to none. And then with that, we're going to add with next-gen MRD. And we're going down the path of other opportunities in MRD as well. And so this portfolio approach extends not just across the entirety of NeoGenomics, but within MRD very specifically.

I'll build on that and say, first and foremost, our RaDaR ST product is very competitive. I want to start there. We have detection limits down to as low as 1 ppm, first and foremost. So that's a key driver and meaningfully better than many products in the market. The second aspect is if you look at peer-reviewed publications, we estimate that we're #2 in the market, after the market leader in terms of the number of peer-reviewed publications out there. So data is an important driver. So that's the second point. And thirdly is the amount of tissue that you need to run our assay relative to others. Very, very competitive. So the RaDaR ST assay is very, very competitive assay. It's the first thing I want to leave you with.

Secondly, we've been investing commercially, and we communicated as part of our Q2 earnings that we've now basically optimized the structure of our commercial organization and our go-to-market strategy where we now have two distinct sales teams. One focused on pathology, one focused on oncology. Not just the sales team, but the leadership structures and the marketing support functions and the enablement functions that support that as well. So we've been investing over the years, probably for the last three, four years, to really build out our oncology sales team. And I think July of this year really became a tipping point now where we have the scale, we have the critical mass to really focus on oncology. You couple that with a portfolio, the PanTracer family, our Heme NGS solutions, and obviously now our RaDaR ST for MRD, it really rounds us out as a solutions provider to the community setting.

Right. Maybe for Abhishek, you posted solid operating cash flow for Q2. Can you talk a little bit about where you see that metric going for the full year?

Yes, sure. As we have stated previously, Mike, that our goal is to be cash flow positive by the end of this year on a full year basis. I typically always suggest that, okay, we should be looking at the cash flow generation on a full year basis because the cash flow could be impacted by some of the timing considerations. So of course, for example, in Q3, we had the DOJ settlement for which the cash was paid out in the third quarter. So it will impact the cash flow for the third quarter. The cash could also be impacted by some of your compensation cycles. So, for example, we pay on a biweekly basis to our employees. That means there are 26 paychecks.

So in one quarter you will pay six, the other quarter you will pay seven. So sometimes your cash flow is also impacted by the timing of some of the policies in the company. And the third piece, of course, is that we are really glad to implement the new billing system in the third quarter of 2026. Now this is a big undertaking, but XIFIN is a leader in the billing space and that will give us a lot of capabilities to be able to collect more cash. But on a full-year basis, as I was saying that, okay, if you were to take a full year view, our goal basically stays to be the free cash flow positive for the company.

Got it. And maybe one last question. With the majority of the 2028 convertible notes now refinanced, how should investors think about kind of capital allocation priorities from here?

Sure, I can start and then feel free to chime in there. So again on the capital allocation, I would say the first and foremost that we have a sizable portfolio. We have a really robust product portfolio with RaDaR, wins that we are seeing under our belt. So it's not that we have to do a large M&A to be able to do that, to fill certain gaps or holes, so we don't have to do that. But more specifically on the capital allocation, I think there is a lot of opportunity for us to invest in our sales organization. As Warren kind of pointed out, that okay, in the RaDaR space and the therapy selection and MRD, both of those areas, how we continue to build our sales capabilities to be able to accelerate growth. So that will definitely be one of the opportunities for capital allocation.

The second area would be our product pipeline or the innovation on the R&D side as to how we advance our clinical studies and trials so that we are able to get paid on the tests that we are actually performing. So that will be the second area where we would want to continue to invest the dollars. We would want to invest the dollars in our IT infrastructure and our product platforms. We have publicly kind of stated that we would want to be kind of moving away from the NovaSeq 6000s to the NovaSeq Xs. We need to be able to kind of invest our dollars there to be able to kind of not only so there are a couple of factors that are helping us drive the growth.

There are a couple of factors that will help us drive the profitability by being more efficient. So these are the various areas where we feel that, okay, we need to do the capital allocation. And last but not the least is the G&A line, where we would want to be as efficient as possible so that we continue to kind of reallocate our resources from the G&A line to some of the other parts and continue to drive a balanced approach in terms of driving the revenue and the profitability.

All right. Great. Well, that's all the time we have. Tony, Warren, Abhishek, thank you very much for joining us.

Thank you, Michael.

Thank you, Michael.

Good afternoon, and welcome to the NeoGenomics Second Quarter 2026 Financial Results Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I will now turn the call over to Abhishek Jain, Chief Financial Officer.

Before we begin, I would like to introduce Andrew Brackmann, who recently joined NeoGenomics as our new Vice President of Investor Relations. Andrew spent nearly a decade in sell-side equity research covering the diagnostics sector. He also covered NeoGenomics directly, giving him a deep understanding of both the company and its competitive landscape.

Beyond his analytical depth, Andrew is known for building genuine long-term relationships with the people he works with. We're excited to have Andrew on board to lead and shape our Investor Relations strategy and deepen our relationships across the investor and analyst community.

Now let me turn the call over to Andrew to get us started. Andrew?

Thank you, Abhishek, and good afternoon, everyone. I am excited to be joining NeoGenomics in this role. Having covered the stock for the last 8 years during my time at William Blair, I have been inspired by the team's ability to leverage its well-earned channel strength and provide new and holistic testing solutions for patients. I see this strategy as driving durable, profitable growth that betters Neo over the long term for all stakeholders. With recent new product launches further expanding growth opportunities across large end markets, now is a great time to join the company.

In this role, it is my goal to partner with the investment community in an ongoing effort to better articulate and communicate our strategy and differentiation. This is something I believe to be a real opportunity to improve upon based on my experience on the sell side. I'm confident my skill set and experience across financial markets will be helpful in this regard.

Now let's get into today's call. Representing NeoGenomics here today are Tony Zook, Chief Executive Officer; Warren Stone, President and Chief Commercial Officer; and Abhishek Jain, Chief Financial Officer. Additional members of the management team will be available for the Q&A portion of our call. This call is being simultaneously webcast.

During this call, we will make forward-looking statements regarding our future financial and business performance, planned future operations and related expectations with respect to timing and performance, future financial position, future revenues, growth potential and expected growth drivers, projected costs and capital expenditures, prospects and plans, estimates of market size and position, and objectives of management and financial guidance. We caution you that the actual events and/or results could differ materially from those expressed or implied by the forward-looking statements.

These forward-looking statements made during this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Please refer to the information disclosed on the safe harbor statement slide in the deck posted on our website as well as the information under the heading Risk Factors in our most recent Forms 10-K, 10-Q and 8-K that were filed with the SEC to identify important risks or other factors that may cause our actual results to differ materially from the forward-looking statements. These documents can be found in the Investors section of our website or on the SEC's website.

During this call, we will also refer to certain non-GAAP financial measures that involve adjustments to GAAP results. The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measure in a table available in the press release we issued this afternoon and in the slide deck available in the Investors section of our website.

I will now turn the call over to Tony.

Well, thank you, Andrew, and welcome to the team. We're very pleased to have you join us, and good afternoon, everyone.

At NeoGenomics, our leading 25% market share across hematology diagnostics and therapy selection make us a trusted provider of oncology testing solutions for pathologists, oncologists and patients. We're leveraging this leadership position as a trusted partner in hematology by expanding our menu of solid tumor testing offerings in the large, underpenetrated markets of therapy selection and MRD, where we've recently launched new products, expanding our PanTracer Family and RaDaR ST.

Our entry into these markets is driving growth across our entire NGS business while providing halo effects to the rest of our portfolio. They're also helping to drive increases in our gross margin. In the second quarter, our strategy drove this intended effect, and we remain confident in our objective of driving durable and profitable growth over the near and long term. As it relates to the second quarter results, these reflect the consistency that investors have come to expect from this team. We're raising guidance because of these results as well as the underlying clinical strength we're seeing in the back half of this year.

Total revenue in the quarter was $201.7 million, up 11% year-over-year and ahead of the 9% growth we guided to for the quarter. Our top line performance continues to be driven by our clinical business, which grew by 14% in the quarter as AUP increased 12% and volumes exceeded our target and grew 2%. Moreover, our growth in NGS is proving to be durable with revenue growing 26% year-over-year and again, comprising 1/3 of our clinical revenue. The mix shift towards higher-value testing continues, and we believe our NGS portfolio is well positioned to drive more predictable and profitable revenue growth in the future.

Alongside this growth, our go-to-market approach continues to evolve as well. This quarter, we reorganized our commercial team into 2 dedicated ecosystems, one focused on oncology and one on pathology, sharpening accountability as we scale towards our next phase of growth. Warren will cover this in more detail shortly.

While the 14% growth in our clinical business is exceeding our expectations, our nonclinical business is falling short of expectations. In particular, our Pharma business, which accounts for roughly 5% of total revenue, continues to face headwinds even as bookings increase. The decline in Pharma was slightly offset by 17% growth in our ODS business, but still not enough to offset the weakness for our entire nonclinical business. So we're adjusting expectations for pharma revenues for the full year. Abhishek will cover the specifics, but we're taking corrective actions and remain committed to returning to year-over-year growth for our entire nonclinical segment in 2027 as we've discussed in the past.

Turning to margins. We saw significant margin improvement this quarter as we anticipated. Adjusted gross margin expansion of 260 basis points year-over-year was driven primarily by strong AUP growth of 12% as well as improvements from our Lab of the Future initiative, which spans across automation, digital pathology and instrument upgrades among other initiatives. Warren will discuss our Lab of the Future initiative in more detail momentarily. Beyond the gross margin expansion, we also maintained operating expense discipline in the quarter, helping to drive 36% growth in our adjusted EBITDA.

On the product front, this quarter was less about new launches and more about converting the launches we discussed last quarter into real commercial traction. Our PanTracer Family and RaDaR ST together address a combined $33 billion market opportunity across therapy selection and MRD and round out a portfolio that spans the cancer care continuum from initial diagnosis through recurrence monitoring.

Early feedback for these products is encouraging, and our expectations for these products in 2026 are unchanged, contributing modestly to revenue this year while driving pull-through in other areas of our portfolio. This is something unique to NeoGenomics as we have the capabilities and menu that other pure-play NGS providers don't have. As we look ahead, we continue to see more meaningful contributions from these specific products over the coming years. This is especially true for RaDaR ST, where reimbursement decisions will be key to driving future revenue.

In the quarter, we submitted an additional RaDaR ST indication to MolDX and now have 3 pending submissions. If successful in achieving these reimbursement wins as well as with commercial payers over the longer term, these reimbursement wins will significantly improve our ability to drive revenue in this large market.

Beyond the commercial traction we're seeing across our portfolio, we continue to invest in the pipeline that will sustain our growth well beyond 2026. Notably, our next-generation whole genome sequencing MRD assay remains on track, and we expect to generate data for this assay in 2027 and be ready for a potential clinical launch in 2029. Our companion diagnostics capabilities were strengthened with the recent launch of PTEN, a new FDA-approved immunohistochemistry companion diagnostic for prostate cancer. This test, which is available stand-alone or as part of our PanTracer Pro offering, identifies patients who may be eligible for AstraZeneca's newly approved TRUQAP and allows us to reach into urologic oncology, a new setting for us.

For our pharma and biopharma partners, work continued in the second quarter with new biomarker data presented at ASCO, supporting our partners who are advancing ADCs, BiTEs, bispecifics and targeted therapies. We're also developing a low sample input AML MRD Flow assay designed to deliver higher sensitivity and faster turnaround times across CLL, B-ALL and multiple myeloma.

In sum, the second quarter builds on many of the favorable trends we saw in the first, steady top line growth, expanding margins and continued scientific and pipeline progress against our 2026 priorities. Perhaps more important is that we're delivering consistent results, which underpin our confidence in our updated guidance ranges. We remain in the early stages of penetrating the solid tumor therapy selection and MRD markets and the groundwork we're laying now in our science, our lab operations and our product portfolio positions us well for the years ahead.

With that, I'll turn the call over to Warren, who will provide more detail on how we continue to win in the community and on the progress of our commercial and operational initiatives this quarter.

Thank you, Tony, and good afternoon, everybody. I want to begin with a brief update on our commercial momentum before turning to the operational progress, including our Lab of the Future initiative that is supporting the launches that Tony just discussed. Our primary focus remains in the community setting where approximately 80% of patients seek treatment. Community oncologists are guideline-driven and focus on certainty. They choose partners that reduce friction and enable confident treatment decisions under real operational and time pressure. This is precisely the value that NeoGenomics offers. That differentiation again delivered strong results in the second quarter.

Clinical revenue grew 14% year-over-year with every test modality growing at or above market, led by NGS, which grew 26%. The 5 NGS products across hematology and solid tumor that we launched since 2023 and have consistently tracked continue to drive growth across the NGS portfolio, growing over 30% and now representing 26% of our total clinical revenue. Clinical volumes increased 2%, increased -- exceeding our expectations, while NGS volume was broad-based across both heme and solid tumor testing, growing 14%.

Our large NGS panels grew well above 20% in the quarter through increased market penetration and continuous mix shifts from our targeted gene panels to these larger NGS panels.

As Tony mentioned, our leadership position in heme continues to serve as a trusted foundation from which we are expanding adoption of our broader portfolio. This proven model, combining a broad test menu, fast and reliable turnaround times, deep payer coverage and workflow integration is what differentiates us in the community. This activation of the initial Epic Aura integrations announced in April will strengthen our differentiation and has the potential to drive higher test adoption per site while supporting the rollout of our next-generation capabilities, including the PanTracer Family and MRD. We expect benefits from these integrations to begin in 2027.

Combined, our broad portfolio of testing, leading market share in heme and ability to remove friction from our customers are helping deliver the strong results I've just mentioned. They also lead to an industry-leading customer experience as evidenced by our Net Promoter Score in the high 70s across both pathology and oncology. As one of our oncology customers put it, we deliver an excellent experience that they've come to trust completely.

A recent example illustrates our differentiation in practice. A Florida Medical Center and Cancer Institute sought to accelerate decision-making for lung cancer patients, but faced workflow challenges coordinating blood collection at surgery with tissue-based diagnostic workups completed weeks later.

Our field and customer support teams work with the hospital surgery, pathology, pulmonology and oncology teams to build an integrated workflow that allows for blood-based testing to begin while tissue is in transit, delivering comprehensive molecular insights in under 10 days from diagnosis and eliminating the need for additional patient visits or blood draws. Hospital lab managers described our coordination as critical to patient care.

Turning now to new products. With RaDaR ST, we currently have 2 indications that have received Medicare reimbursement through MolDX, HPV-negative head and neck cancer and a subset of breast cancers. We previously submitted 2 additional indications to MolDX and during the second quarter, submitted a third indication. If all 5 of these indications are approved, as we anticipate, we would have access to over 40% of the total addressable market for tumor-informed MRD testing.

While it remains early in the launch, early insights are encouraging. Roughly 30% of RaDaR ST orders included another test from Neo's menu; 2/3 of all orders are for indications where we already have approved reimbursement for MolDX and 1/3 of the orders from patients on Medicare are for indications where we already have reimbursement in place.

On the scientific front, we continue to build evidence based behind RaDaR ST and at ASCO and AACR this year, we presented new clinical data across a range of tumor types. This reinforces evidence supporting our current and future reimbursement submissions.

In our PanTracer portfolio, since securing MolDX reimbursement, our PanTracer LBx in early March, we have been focusing on driving adoption throughout the year. We continue to see strong physician interest in the coordinated workflow PanTracer Pro enables, combining comprehensive genomic profiles with IHC and auxiliary tests from a single sample and requisition.

Turning to our commercial organization. We remain committed to expanding our clinical commercial organization as new products launch and gain momentum and additional RaDaR ST reimbursement approvals come through. We remain on track to exceed 160 commercial representatives during the third quarter, and we'll continue to assess the size of our commercial organization over the coming years based on market penetration rates and reimbursement wins across products like RaDaR ST and therapy selection.

With these recent commercial investments, we have achieved scale in oncology sales specialist team, allowing us to optimize our structure and organize our commercial organization around 2 dedicated ecosystems, one for pathology and one for oncology, supported by aligned marketing, medical science liaison and other teams. This sharper focus will enhance execution, strengthen accountability and better position us to sustain growth across both businesses.

As Tony mentioned, our Lab of the Future initiative is a meaningful driver of margin expansion. This program spans 6 areas: digital pathology, AI-assisted lab automation, instrument platform upgrades, our NeoLIMS implementation, strategic procurement and laboratory footprint optimization. This quarter, we closed 2 dry labs, optimized administrative footprint, further balanced volumes across our laboratory network, executed -- sorry, exited low-margin non-oncology business acquired the Pathline and captured additional AI-driven automation efficiencies.

We also completed the transition of PanTracer LBx as our first clinical assay to the NovaSeq X platform, an important milestone that we believe allows us to process liquid biopsy volumes with greater throughput, improved TAT and lower per-test cost as volume scale, supporting both our gross margin expansion goals and our ability to serve more patients. We expect continued efficiency gains from the Lab of the Future program to support gross margin expansion goals for the remainder of the year.

In summary, we're executing a clear strategy, winning the community with a broad and integrated portfolio by reducing friction and delivering actionable insights across the cancer care continuum from diagnosis to recurrence monitoring. Our ongoing investment in commercial expansion, EHR integration and customer experience delivered durable growth, while our Lab of the Future initiative contributes to improved gross margin.

With that, I'll hand over to Abhishek to walk us through the financial results.

Thank you, Warren, and good afternoon, everyone. In my remarks today, I will discuss our second quarter financial results and our updated 2026 guidance. We reported total revenue of $201.7 million, up 11% year-over-year, which exceeded our prior guidance by approximately $4 million. Clinical revenue grew a strong 14% year-over-year, driven by a 2% increase in test volumes and a 12% increase in AUP.

We are pleased to see the mix shift towards high-value testing continue to build with NGS revenue growth of 26%, driven by volume growth of 14%. Also, the mix shift towards high-value testing remained a key contributor for AUP growth of 12% year-over-year. In addition, AUP benefited from continued work on RCM initiatives, including managed care pricing gains and pull-through improvement.

Turning to our nonclinical business. We reported revenue of $14.5 million, a decline of 15% year-over-year. Pharma revenue declined 26%, which was partially offset by 17% growth in our Oncology Data Solutions business. And while Pharma revenue came below our expectations for Q2, we believe that we are near the bottom for this business.

Adjusted gross margin for the second quarter was 48.1%, an expansion of approximately 260 basis points versus the prior year period. Adjusted gross profit increased by a healthy $14.5 million or 18% over the prior year to $96.9 million. This expansion was driven by AUP growth, volume leverage and Lab of the Future efficiencies. We also absorbed the impact of higher freight costs and fuel surcharges. Gross margin expansion remains a key focus area for us, and we are pleased to see that our efforts have started to yield results on this metric.

Total operating expenses in the quarter were $101.6 million, a decrease of 3% from the prior year period adjusted for a large nonrecurring impairment expense that we recognized in the second quarter of 2025. As we stated previously, while we continue to invest in sales and R&D to drive higher clinical test volumes and AUP, we plan to offset these investments with improved G&A leverage, which we expect will continue to decline as a percent of revenue. This is exactly what we delivered in Q2.

Sales and marketing spending increased $3.2 million or 13%, reflecting continued investment in the commercial organization. Research and development spending increased $1.7 million or 19%, supporting our pipeline priorities. These increases were more than offset by an $8 million decline in general and administrative expenses, which was driven by continued expense discipline across the organization and a step down from onetime expenses incurred in the second quarter of '25.

Adjusted EBITDA was $14.4 million, up 36% year-over-year, representing revenue pull-through of approximately 19%, driven by the gross margin expansion and operating expense discipline that we just discussed.

Turning now to our balance sheet. During the quarter, we successfully raised $316 million through a convertible senior notes offering due in 2032 and used a portion of the proceeds to retire $276 million of our existing convertible senior notes due in 2028. We also entered into capped call transactions and repurchased shares of our common stock for an aggregate purchase price of $25 million intended to reduce potential dilution.

We generated approximately $20 million in operating cash in this quarter and invested $8 million in capital purchases, including our investment in NovaSeq X to move LBx on this platform. Also, as we announced last week, we reached a settlement with the DOJ regarding a legacy self-disclosed matter. As part of the settlement, we paid roughly $10 million. And while this has already been reserved for in our financials, this will impact our cash from operations in the third quarter.

We ended the quarter at a healthy $145.5 million in cash and cash equivalents while having strengthened our capital structure and extended our convert debt maturity from 2028 to 2032.

Turning now to our 2026 guidance. Considering our strong second quarter revenue performance, we are raising our full year '26 revenue guidance to a range of $802 million to $806 million, up from $797 million to $803 million discussed previously.

The key assumptions underlying the midpoint of our revised revenue guidance are as follows: First, we expect our clinical business to grow in low teens for the full year, driven by the continued strength in our NGS business. We expect our NGS business to grow in mid-20s versus our prior estimate of low 20% growth.

Second, no change in RaDaR ST or PanTracer Liquid revenue assumptions, both of which remain in the mid-single-digit millions.

Finally, we now expect our nonclinical business to be down high single digits year-over-year in '26 as compared to our earlier guidance of down low to mid-single digits.

Regarding the quarterly cadence, we suggest modeling approximately 10% revenue growth in the third quarter, up from 9% to 10% discussed previously and above 10% in the fourth quarter of 2026. For gross margin, we anticipate approximately 100 to 150 basis points of improvement for the full year 2026. We're also raising our full year '26 adjusted EBITDA guidance to a range of $56 million to $58 million versus $55 million to $57 million previously, representing year-over-year growth of over 30% at the midpoint. We are targeting adjusted EBITDA to grow in the low 30s year-over-year in the third and the fourth quarter.

With that, let me turn the call over to Tony.

Thanks, Abhishek. In closing, we view this as a very strong quarter for NeoGenomics as total revenue increased 11%, clinical revenue increased 14%, and we expanded our margins. We have achieved and remain on track for key catalysts we outlined at the beginning of this year across new product launches, reimbursement and sales force expansion. These set us up well to further deliver consistent results and drive durable and profitable revenue growth.

I'd like to thank you for your continued interest in NeoGenomics. And operator, this concludes our prepared remarks. So please open the line for questions.

[Operator Instructions] Our first question comes from David Westenberg with Piper Sandler.

Just great job on the quarter here. So I wanted to get into NGS growth. It was 26% again in the quarter. You have really liquid in the back half of the year really to get this supposed to take off. You're getting all these MRD indications. At the same time, you probably do have some tough comps. So how should we think about the back half of the year? Is there conservatism here in the NGS guide? What are you leaving room for in the guide in NGS right now in the back half of the year? And you have one more.

Yes. David, it's Tony. Thanks very much for the question. I'll kick us off on kind of the NGS bigger picture. And then Abhishek, you can also go into the guide implications in the second half of the year on NGS.

So Dave, our view of this is we think we have a very durable position with NGS now. As you said, we exited '25 at about 22% growth, and that's why we guided below 20s. Now in the first quarter of '26 -- we did 26% in Q1, and we matched that again in Q2 at 26%. That's why we're raising the guide to the mid-20s now. And if you break down that Q2, if you look at that 26%, like 14% was volume and 12% was AUP, which about 2/3 of that was mix.

And so we start to look at this at the macro level across the blended portfolio, that 14% feels pretty good to us, because remember we're driving an intentional shift from single panels to large panels. And as Warren said, the large panel is at 20% growth. And we see strong growth in heme, the 5 products growing at 30%. So we see our position going into the second half of the year as one of a position of strength. We do think there's opportunities for us in the portfolio and equally well, we think it's durable.

And so with that, Abhishek, anything about key highlights on the guidance component that Dave was asking about?

Yes, I think you have covered well, Tony. So for the second half, we are basically raising that, okay, our NGS revenue growth for the full year is going to be now in the mid-20s as compared to the low 20s that we had guided for previously. And this is predicated upon our strong performance that we have seen in the first half, particularly the larger panels that Warren kind of alluded to in his prepared remarks, those have been growing above 20%.

I think that just for the sake of clarity though, MRD is not included in NGS numbers. NGS is like-for-like. MRD as reported separately. It will be included in clinical.

Great. And then, Tony, can you give us a little bit more color on what's happening in biopharma? I mean I think everyone had it negative at high single digits, but you said you just spent time working on it. It is only 6% of revenue. Can you remind us the need for this business overall? Just it is such a small portion of the portfolio. You almost wonder like nobody owns Neo for its pharma services. So anyway, if you could just kind of remind us the importance of it and what you're going to be doing there, what's going on?

Yes. Sure, Dave. Again, maybe just to kick things off. In the quarter, we were very pleased with a lot of performance across the business, primarily on the clinical side. with revenue volumes, AUP, there was a lot to be excited about. But an area where we just didn't hit our own expectations was on the nonclinical pharma side primarily. And what I would tell you, Dave, that we liked in the quarter, bookings were up significantly in Q2.

So the new team that's in place is driving and delivering what we expected from the bookings. We just didn't see the same pull-through rate that we saw historically from the 2025 bookings that were in place. And so, that's what led to the slight downturn in expectations for the year. We're still confident that we can get this back to growth.

And then the bigger question as to why, we still believe that there's opportunity here for us to leverage that pharma experience. It gives us earlier access for some of our key products. We stay at the front edge of what's happening in the marketplace. So there's a lot of reasons to want to stay engaged. And if you look at how our portfolio will emerge over time, with whole genome in both MRD and in heme, we think that there's going to be opportunity there. So we think it's important to not lose our focus in clinical, but we still think there's opportunity there if we can [ write ] this thing going into 2027. Hope that helps.

And I'll just kind of add to what Tony said that, just taking the conversation maybe one level higher here, given the fact that pharma is 5% of our business, you're talking about a $10 million business out of $200 million of revenue. Now even $0.5 million can swing the percent by 5 points, Dave, right? So basically, you're talking about now $0.5 million impact on a $200 million business, which could be like a rounding adjustment for the overall business.

So I just want to make sure that from the focus standpoint, it's basically our clinical business. And on the pharma, yes, of course, we did not meet the expectation, but such a small portion of our overall portfolio.

The next question comes from Puneet Souda with Leerink Partners.

And following up on that, again, this business, as you pointed out, nonclinical business, pharma business is 5% overall has been under pressure. Can you talk a little bit about how core is this to NeoGenomics ultimately? Obviously, you're doing well on the clinical side and on the AUP and other product launches as well. So maybe just talk to us about sort of how core is this? And what are the plans ahead?

Yes, Puneet, again, I'll kick us off. I would say what is core to us, our clinical business. That's what's core to us. That's what's going to drive our performance and our growth. I look at pharma as more opportunistic; one that we can leverage from our R&D perspective, one that we can get early market access, one that will probably suit our emerging portfolio a lot better than it suited our existing portfolio. I do not consider it in waiting to be anywhere near of strategic importance as we see the clinical side of the business. But it's an area that we can leverage over time and one that we want to just make sure we get correct moving into 2027.

Warren, do you want to add anything else?

I think -- yes, building on that, I think one of the things you would have seen within the thoughts was increased investment from R&D perspective. We're becoming increasingly excited about the products that will come to market, more of them, more cutting edge the WGS that Tony had spoken about. We feel it's imperative that we have access into pharma to get early readouts in terms of how those products perform, get some early clinical studies, make adjustments, et cetera, before we actually bring those products to market from a clinical perspective once reimbursement is available. So we kind of see it as an enabler of our clinical business, but not an area that we're going to be making any meaningful investments in, very important.

Okay. That's helpful. And then just a quick follow-up on your AUP came in really strong versus last quarter. Again, congrats on that. Volume ahead of us, too. But maybe just on the AUP side, look, it's driven by the mix shift. I appreciate that. But given the competition dynamics in the marketplace and what's the level of sustainability for -- how sustainable is this AUP growth? How should we think about -- or the -- sort of the mix of AUP versus volume growth for clinical in the next 2 quarters? And if you can provide anything on '27, that would be helpful, too.

Sure. Quite a few questions there [ unloaded, ] Puneet. Let me take a shot at it. So on the AUP, the 12% growth, I would say that there have been like 2 pieces to it. The first piece is, of course, the RCM, the true RCM initiative, which is basically how you're able to drive the pricing gains through the managed care, through the pull-through, so on and so forth and the price increases. So that's the first component.

The second component is, as we kind of continuously seeing this mix shift towards the high-value testing -- and again, that's depending on the NGS revenue growth that we are seeing, which has been very strong. And as we know that the NGS AUP is much more higher, compared to the rest of our portfolio. Given the fact we believe that the NGS volume growth is pretty durable, we believe that we will continue to see this AUP benefit in the future quarters to come. That basically gives us a comfort.

And at the same time, I would say that there is a meaningful runway left for us on the RCM side as well because still there are opportunities for us to improve the pricing on the contracts that we currently have got. The good news is that we have 300 contracts. And just to give you an example that this past quarter, we actually were able to kind of increase the contractual price with one of the top 10 national payers. So the point being that there is still more runway left on our RCM improvement. That gives us the belief that this is durable.

Now from the Q3 and Q4 standpoint, what I'm suggesting that we will still have a more heavy AUP-led growth in the Q3 and Q4. Q3, I would suggest that we should be looking at the volume growth at about 1, 1.5 points, and that is primarily because of the same dynamics that we have discussed in the past that this high-volume, low-value contract that we exited, it basically peaked in Q3 '25. S

o you will still see the most revenue growth in the clinical would come from the AUP growth, but the mix will start to shift in 2027, where we feel that the volume growth is going to be mid-single digit or so what we used to see previously. And accordingly, you will start to see some softening on the AUP growth numbers as well.

The next question comes from Tycho Peterson with Jefferies.

Just thinking a little bit about RaDaR, the third indication here. Maybe just, first of all, are there milestones we should be tracking over the next 12 months as you expand the indication set? And how do you think about the opportunity here in terms of increased patient eligibility versus improved testing cadence? And I don't think you're changing your TAM assumptions. You're saying now over 40%. I think you said 45% previously when you have 4 indications. So I just want to make sure the TAM assumptions haven't changed either.

Tycho, let me take that.

Yes, please.

I think we're really excited about the fact that we've added a third indication. And we still believe that the 2 that we spoke about previously, we should receive reimbursement before the -- at the end of the year. And we expect somewhere in the first half -- latter part of the first half of 2027 for this third indication. Again, thinking about the sort of 12-month review cycle is what we're working on there.

And again, we've just -- we're in the process of making some commercial investments in anticipation of those additional indications becoming available and being able to expand the indications that we actively promote. And again, it's something, as I said in my prepared remarks, we continue to evaluate as new products and new reimbursement become available. So I would expect that we would further invest in our oncology sales team moving forward in 2027 and beyond.

I think from a TAM perspective, the 40% if all 5 are approved, that gives us access to the 40%, that is meaningfully up from where we were with just the prior 2 indications. So I'm not sure where that 45% came from. I don't believe that's something we publicly shared before.

Okay. Yes, the 45% when you have 4 indications. But one for Abhishek then, just thinking about the gives and takes on OpEx. So you're bringing up SG&A with new hires, R&D with the innovation funnel. And I know you've talked about reductions to G&A over the next 12 to 24 months. So maybe just talk about where you'll get the leverage on G&A, and is the algorithm of a 250 to 300 basis points operating expansion still viable under the new framework?

No, that's a great question. And in fact, probably one of the focus areas for us is to drive the operating leverage in the G&A, Tycho. When we look at the numbers, we feel that our G&A spend as compared to some of our peer groups is definitely higher. And when I look at the G&A only, it was like, what, 38% or so as a percent of revenue in '25. We are targeting low 30s this year. And we hope that the number, the percent on the G&A will continue to reduce further in the outer years, perhaps lower than 30% in 2027.

So given the fact that G&A, we do have more opportunities as we kind of start to get the benefit of some of the work that the team has been doing, we would basically have the opportunity to invest back into our sales organization and in advancing our pipeline initiatives through the R&D programs. Those are -- this is how we basically kind of see as to how this whole thing is going to pan out. And we'll see as to, okay, what is the right level of investment because we do think that there are a lot of growth opportunities, and we just want to make sure that we are balancing the need to put the money back for the growth and then dropping to the bottom line.

Tycho, the only thing I would add to Abhishek's comments is that our focus, while it's on the G&A area right now, we think there are other efficiencies across the enterprise that we're going to be able to drive rather significantly. And we'll probably do a better job of highlighting those for you and your colleagues going into 2027.

And when you start to really look at some of the work that Warren is doing in the Lab of the Future and his teams, there's ample opportunity for us to drive efficiencies that we think can help the bottom line performance as well as offset some of the investments we want to make in sales and the development side of the business, so.

Okay. And then last one, just you submitted comments to CMS on prior authorization. I'm just curious how we think about any progress there?

On CMS?

Yes. Just on the challenges around prior authorizations, I mean, is that something we should see some traction on?

Yes. Well, we looked at all the initiatives that are being discussed at this point, Tycho, PAMA, CRASH, ACA, all of these various issues. We continue to study all of them because, as you know, there's multiple potential iterations of these things. But our view hasn't really fundamentally changed that much. We've assessed them. We continue to work with ACLA, and we look at our portfolio, and we don't see a=some --- anything here that would be a significant impact to our business in 2027. So we'll continue to stay close to it. We'll work with ACLA, but it's not something we're anticipating to be significant.

The next question comes from Bill Bonello with Craig-Hallum.

I want to revisit one of the questions sort of about the mix shift, but maybe with a longer-term point of view than what happens in the next 2 quarters. You did mention some of the strong NGS revenue growth coming from legacy customers transitioning, obviously, from targeted panels to CGP, which we see in the ASP. Can you just give us some sense of maybe how much runway you still have on that front? Not specifically where ASP is going to go, but what percent of your customers maybe aren't using CGP testing right now are still ordering targeted panels, maybe rarely use liquid biopsy? And kind of maybe the same thing on MRD, even though you say that wasn't in the numbers. But just to give us some sense of how long this path can continue.

And then just part 2 of that would be to the extent that you are seeing competitive takeaways, maybe you could talk about what's driving that.

Thanks, Bill. I'll take that question. I think maybe before I talk specifically about NGS, the opportunity for mix shift does not only exist within NGS. We have a unique opportunity because of our broad portfolio, and we see mix shift happening across other modalities as well. It's probably most notable, though, within NGS and exactly what you just articulated, targeted panels moving to CGP, et cetera. So yes, I'd say the runway is still robust.

We have a fairly broad-based targeted panel portfolio, and it's well covered throughout the community setting because that's what's in guidelines today. And we're sort of proactively targeting customers and driving that shift, and it's part of how we target our commercial organization. So this is an opportunity that has runway well beyond 2026 and probably into a few years beyond that as well. But again, I want to reiterate, it's not just with regards to NGS, there's other opportunities with other modalities as well.

In terms of competitive -- you asked the question with regards to takeaways. It's pretty difficult to track that specifically. We've learned over the years as we've done life cycle management in terms of how to do it effectively. The key success factor here is workflow integration.

The next question comes from Dan Brennan with TD Cowen.

Congrats on the quarter. Maybe could you just dig in a little on PanTracer liquid this quarter? Just give us some color on what you're seeing from the launch. I think when you discussed it in the past, I think you've discussed it as really an alternative to solid tumor testing in maybe cases where they don't have access or it's more specific to the tumor type. But we've heard through oncologists like there's just a lot of ordering liquid and tissue together or using liquid serially later in the cancer types. So I'm just wondering how the early experience is going and kind of what's assumed as you -- is there a potential upside as you maybe see more use of a blood-based test?

Thanks, Dan. I'll take the question. So first and foremost, let's say, again, part of the liquid strategy was to round out our PanTracer Family. And we're seeing category growth, very, very robust category growth overall and liquid is a contributor of that growth as well. And we're seeing growth coming through multiple channels. We're certainly market penetration, identifying oncologists within the community that aren't using liquid that are starting to use liquid. That's attractive for us. We're also seeing some share gains as well from certain competitors where we have a strong position within workflow and customers on the heme side as well. So that's working out really, really nicely.

We started to see an increased attachment rate as well, where we're seeing liquid and solid coming in concurrently. So that increased a little in the second quarter, and we're sort of mid- to high teens percentage rate there as well. So that's also starting to gain traction. And obviously, that's an opportunity where we've now got 2 high-value tests that have been run on a single patient.

The serial testing question that you actually posed is something we're starting to track and we actually are starting to see some uptick there, although that's still relatively small at this particular point, and we see that as an opportunity. And naturally, the other big opportunity that we're tapping into is the reflex when on the tissue side of things where we get QNS/TNP, this is a natural opportunity. But this is slotted in nicely within our PanTracer Family.

Got it. And then maybe just back to the kind of volumes, which you discussed kind of the pace in the back half. Can you just remind us how much that high-volume, low-value contract was a weight this quarter, kind of what's baked in for the back half of the year because core clinical volumes were a bit lighter what we were thinking [ ex-NVS ] but I think that's likely because of this factor. So I'm just trying to tease out the drag in Q3 and/or Q4 and kind of when that lapses and what it means?

Yes, sure, Dan. So what we had basically said previously that this high-volume, low-value contract made up about 3% to 4% of our volumes in 2025. If you were to take the midpoint, that's almost like 50,000 tests for 2025. And it kind of grew from Q1 to Q2 to Q3 and Q3 was the peak quarter. And then, of course, in the Q4, we had called out that we were exiting from this particular contract. And that's where the compares for the Q3 '26 for us will be the difficult most. And that's the reason why we are calling this particular piece out. Excluding this particular dynamic, we have basically typically been in the mid-single digit on the volume growth, and we would have been pretty similar if we were to adjust for this time.

Next question comes from Subbu Nambu (sic) [ Subbu Nambi ] with Guggenheim Securities.

This is Subbu Nambi. You guys called out the $8 million in NovaSeq X transition. So I'm curious to know how should we think about CapEx plans into the second half? What's the transition time line? Any expected gross margin benefit either to this year or next year? How should we think about those things?

So I can start, and then, of course, I will leave Warren to kind of opine on a few other pieces. So this is basically our first transition to the NovaSeq X on the liquid platform. We are now going to be starting our most important piece, which is the heme transition to the NovaSeq X, which is going to take a few quarters and in the early parts of 2027. So from the gross margin benefit perspective, given the fact that liquid is a very small portion, we are not going to be getting the benefit on the gross margin expansion for this transition as of right now.

And similarly, for the heme movement of the transition, we will start to see the gross margin expansion related to the NovaSeq transition in 2027 latter part. I'll put it this way, if there's something else, Warren that you want to add?

No, I think you've hit the key, the salient points there, Abhishek.

Okay. And Warren for you, for accounts you are integrated with, but who utilize a competitive MRD test, what percent of those accounts do you feel you'll be able to capture in the indications that are applicable? And how should we think about share win over the course of this year and longer term? I know it's sort of an unfair question, but anything that you could tell us to be helpful.

Yes. I think what's important here is right now, we're only actively promoting RaDaR ST for the 2 indications that we have reimbursement for, simply because we're trying to manage the cost and profitability dynamic. And I do -- I'm very confident of the fact that when we get the additional indications, particularly the 2 that are due this year, that's going to significantly expand the indications and the TAM that we can address. And I think that's going to allow us to be much more competitive in terms of taking share simply because there is a desire for more of a sort of pan-cancer solution from these larger users.

So right now, we're very satisfied with how things are progressing, continue to be laser focused on the 2 indications that we have. And as we said earlier, 2/3 of the incoming volume is for those indications. And we expect volumes to increase nicely once we get further indications approved later on in the year.

Yes, Subi (sic) [ Subbu, ] I guess the only thing I would add to that is we've always maintained that RaDaR ST, we're excited about it because we see it extending our continuum, right, from diagnosis to therapy selection to recurrence monitoring. We look at ourselves as an oncology diagnostics company and not just only an MRD company. So we're not, at this point, just taking all comers or really casting a really wide net here. We want to get that balance right and our gating impact is going to be the indications. And so as we secure those indications by year-end, that's when we become much more aggressive in reaching frequency and messaging.

The next question comes from Mason Carrico with Stephens.

A question on pharma. Does returning to growth next year rely on you guys booking additional projects beyond what's in the backlog today? I guess, what's giving you confidence or what visibility do you have into that segment of the business returning to growth next year?

So the answer is yes, Mason. It is very much dependent on us continuing to drive incremental bookings. The confidence that we have comes from this quarter, while we didn't hit our revenue goal from the pull-through from '25, the actual bookings were all-time highs for us in Q2, right? So we feel very, very good about what it means for us potentially for '27 and beyond. But now we just need to execute and pull through the '25 as well as continue to drive the bookings.

So it's dependent on bookings. We are seeing bookings increase, and we're going to continue to push hard for that by the end of the year.

Got it. And then last year, I think you highlighted that Northeast revenue grew maybe 1.5x faster than the national average. Could you frame up how that segment performed in Q2 and whether that dynamic continued?

Yes, I can. So [ obviously ] Q1 sort of indication we put out there. So we're seeing a very similar trend. The only addition that I'll add to that is we're now seeing nice improvement in sort of NGS pull-through as well. So the idea was to get those shorter turnaround time testing first that creates an access point into the customer, then pull through a higher-value testing, and we're now seeing that higher value testing coming through as well. So overall, still about 50% above the average, but seeing high-value testing now, too.

The next question comes from Mike Matson with Needham.

So good to see the progress with the Medicare coverage of RaDaR, but I was just curious if you could give us any insight into the process and timing for getting some private insurer coverage of the test.

Yes, I can take that question, Mike. And as you know that we actually have a fairly wide coverage. For a lot of our tests, we have like 300-plus contracts across the company. Now it's a matter of as to, how do we kind of include some of the newer tests that we are basically launching to the same contract. The good news is that we have a foot in the door and we are able to kind of start to have these conversations. But at the same time, I'll say that it does take a lot of effort to move the needle in terms of getting first the policy and then the coverage through the contract, and then making sure that you have the right amount of pricing when you're discussing the contract.

I just want to basically highlight that I just said that we actually won one of the top 10 national accounts this particular quarter where the contractual rate was fairly small for our liquid products, and we were able to successfully negotiate a fairly sizable increase in that particular pricing. Now of course, we'll start to see the impact on our financials as we basically ramp up the volumes, but that's the kind of effort that the team has been doing on the managed care side to drive the policy and the coverage.

Okay. And then just a quick one on the new convertible or the rollover, I guess, of the convert. So is there any material change in the interest expense related from the refinancing?

Yes. There's a little bit of a change in the interest rate. Our new senior notes, the convert senior notes is at 75 basis points. And previously, we had 25 basis points. So there's a 50 basis point differential between the 2 converts at a high level.

And our next question comes from Mark Massaro with BTIG.

The first one is on the decision to reorg the commercial team splitting oncology and pathology. Maybe can you just remind us the size of your pathology business relative to the oncology business? And what steps are you taking to ensure that there's continuity in that decision?

Yes. Thanks, Mark. I'll take that question. So we've wanted to get to this point for quite some time. We just didn't have sufficient scale on oncology sales specialist side of things. So we're actually now with the investments that we made leading up to this quarter and we'll make this quarter, we're about equally balanced, and you could think about sort of 60-plus people in each of those teams now. It's basically given us the scale. And we've always had a pathologist that, what we call TBM Territory Business Manager and oncology sales specialist, but they rolled up to a generalist manager. And ultimately, we were seeing that generalist manager was struggling with the difference in sales cadence, sales rhythms, et cetera. We've got the pathology business where we're a market leader, looking to sort of protect and grow. We're trying to penetrate oncology with new products where we're not the market leader and in some cases, a later entrant.

So there's just 2 different sales motions, and we felt it would make sense for us to structure the organization through 2 distinct ecosystems, one for pathology, which is the same sales team and sales management, but also distinct supporting structure. So you think about messaging and positioning, it's all targeted towards pathology, the same on the oncology side of things. And I think this is going to sharpen our focus. It's going to improve our targeting. And I think ultimately, it's going to result in better outcomes, which is going to allow us to sustain the growth.

Fantastic. And then on the RaDaR ST launch, I recognize it's early days since you launched clinically in February. But can you just give us any sense for perhaps account wins, number of ordering clinicians? Are you encouraged at what you're seeing with breast? Or do you think that you will get a greater uptake when you have expansion of breast? And how should we think about that business inflecting? Is that something that you think can materially inflect in 2027? Or could that take a little bit longer?

So we are seeing -- coming back to account wins, and then we'll talk about the sort of growth and inflection. So we're seeing quite a large array of different types of wins. We certainly are penetrating in the community, which is where we focus. And it's a combination of new users of MRD that are coming on board, which came on board through EAP programs and other programs and then also through competitive takeaways in some large group oncology practices as well. So it's pretty a broad array of orders that are coming in. And it's largely because this is a very competitive product.

We have indicated -- we are able to detect down to as low as 1 part per million. So it's a very, very competitive product. We continue to see great attachment rates, about 30% of incoming RaDaR ST orders actually come in with other testing from here, largely NGS, but some auxiliary testing as well. So that's very attractive.

And we're getting a lot of in indication, 2/3 of the orders today are coming with in indication. And that's really what we're promoting. So I'm optimistic as these additional indications become available and we're able to cover a much larger portion of the TAM that we're going to see acceleration. So we definitely see a meaningful uptick in 2027 and acceleration in the latter part of '27 into '28.

And Mark, we'll be able to better position -- the final part of your question about '27, '28, I think when we see the indication flow and how the year-end closes. So we'll talk '27 in '27, but we'll note that question for next time.

We have reached the end of the question-and-answer session, and I will now turn the call over to Tony Zook for closing remarks.

Well, first off, I'd again just like to thank everybody for joining us on the call. I'd also like to thank our roughly 2,400 teammates for their continued hard work and unwavering commitment to our mission.

With meaningful progress on our therapy selection and MRD test offerings during the second quarter, I'm excited for the remainder of the year as well as 2027 and beyond as these high-value tests represent a growing portion of our clinical business.

I look forward to our next quarterly update in October, and thank you again, and have a great day.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Good afternoon, and welcome to the NeoGenomics First Quarter 2026 Financial Results Call. Please be advised that today's conference is being recorded.

I will now turn the call over to Priya Vedaraman, Senior Vice President of Finance.

Thank you, Matthew, and good afternoon, everyone. Welcome to NeoGenomics First Quarter 2026 Financial Results Call. With me today to discuss the results are Tony Zook, Chief Executive Officer; Abhishek Jain, Chief Financial Officer; and Warren Stone, President and Chief Operating Officer. Additional members of the management team will be available for the Q&A portion of our call.

This call is being simultaneously webcast. You will note that we will be advancing through a brief slide presentation to accompany today's call, and we have also made the presentation available on the Investors tab of our website at ir.neogenomics.com.

During this call, we will make forward-looking statements regarding our future financial and business performance, planned future operations and related expectations with respect to timing and performance, future financial position, future revenue, growth potential and expected growth drivers, projected cost and capital expenditures, prospects and plans, estimated market size and position and objectives of management and financial guidance.

We caution you that the actual events or results could differ materially from those expressed or implied by the forward-looking statements. The forward-looking statements made during the call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements.

Please refer to the information disclosed on the safe harbor statement slide in the deck posted on our website as well as the information under the heading Risk Factors in our most recent Forms 10-K, 10-Q, 8-K that we filed with the SEC to identify important risks and other factors that may cause our actual results to differ materially from the forward-looking statements. These documents can be found in the Investors section of our website or on the SEC's website.

During this call, we also refer to certain non-GAAP financial measures that involve adjustments to GAAP results. The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies.

Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available in the press release we issued this afternoon and in the slide deck available in the Investors section of our website.

I will now turn the call over to Tony.

Thank you, Priya, and welcome, everyone. For those of you who are relatively new to the NeoGenomics story, let me review our investment thesis. We're a pure-play oncology solutions company, leveraging our strong heritage in hematology with pathologists and community hospitals, where we enjoy a leading 25% share across diagnostics and therapy selection.

We believe we're highly differentiated from large reference labs as well as specialty diagnostic companies in two regards: the depth and breadth of our portfolio and a relentless focus in the community setting.

We believe in the power of our portfolio and see it as a point of competitive distinction and advantage. We reentered the MRD space with RaDaR ST, which we will discuss momentarily, allowing us to address a $20 billion market opportunity where we will continue to leverage our ambition to be a partner of choice among community practices. And importantly, we believe we're well poised to deliver consistent double-digit revenue growth.

As mentioned, it's our desire to be a partner of choice in the community from diagnosis to recurrence monitoring. Our foundation and strength in hematology and diagnostic testing affords us a strong platform for growth. We have and will continue to be purposeful with our portfolio transformation as evidenced by our product launches, enabling our penetration into the $13 billion therapy selection market. And now with RaDaR ST, we've reentered the $20 billion MRD market, both of which are enjoying robust growth but are still relatively modest in penetration rates.

This portfolio transformation is evident in our selling performance. The 5 NGS products we launched in 2023 that we have consistently tracked contributed 25% of our clinical revenue in Q1. So with that, let's highlight some of our key performance metrics for Q1.

During the first quarter, we again delivered double-digit revenue growth, reflecting our ability to generate consistent and predictable sales. Total revenue for Q1 was $186.7 million, representing 11% growth year-over-year, exceeding our guidance.

Adjusted EBITDA of $9 million increased 27% over the first quarter of 2025, and the adjusted EBITDA margin increased approximately 60 basis points year-over-year.

Our clinical business continued its robust growth with revenue increasing 14% year-over-year to $171 million. Clinical performance was driven by effective execution of our commercial strategy, enabling volume growth and share gains in all segments of our business. In this quarter, we again saw an improvement in AUP, which reflected an 8% year-over-year growth and volumes growing 6% year-over-year.

Turning to NGS. Revenue grew 26%, well ahead of the NGS market growth rate, driven by strong volume and AUP growth. Our NGS business now represents about 1/3 of our total Clinical revenue. Moving forward, we believe the addition of PanTracer liquid biopsy to the PanTracer Family, combined with ongoing investments in our field force size and capabilities will help us to sustain above-market growth for this part of our portfolio.

The momentum with which we exited 2025 continued into the first quarter. As we have shared, we continue to see above-market growth with our non-NGS clinical business, which should continue to grow in the mid-single-digit range as we take share across all modalities. Importantly, and in line with our overall strategy, our NGS business is scaling at a rate that is 3 to 4x faster than our core clinical business.

We're often asked, how do we win in the community setting and is the growth sustainable. I'm going to ask Warren to step you through our commercial strategy and give you some insight into our early launch experiences with the PanTracer Family and RaDaR ST.

Thank you, Tony, and good afternoon, everybody. Our primary focus is the community setting where approximately 80% of patients seek treatment so they are close to their support structure. Additionally, most patients live an hour or more from the nearest NCI designated cancer center.

To start, we believe that community oncologists prioritize historic patient management and prioritize certainty over possibility. Guidelines drive their decision-making and ensure actionability. With large patient volumes and resource constraints, we choose partners that reduce friction and support confidence treatment decisions.

Secondly, our leadership in hematology, where we hold greater than a 25% market share provides trusted access and create strong foundation to expand adoption of our broader portfolio. Third, rapid test results directly impact patient outcomes. And our balanced lab network enables industry-leading turnaround times. The Pathline acquisition strengthened our Northeast presence and grew at 1.5x our national average, demonstrating the power of local scale to drive service and growth.

Finally, our portfolio spans over 500 tests across diagnosis, therapy selection and MRD, positioning us as a true partner in patient management. We have developed over 330 interfaces, including the recently announced Epic Aura, which for published third-party research could drive a 20% to 30% increase in test adoption per site.

This position is also supported by a broad commercial payer network of more than 300 contracts, also minimizing friction for both providers and patients. In summary, we simplify the complexity of oncology diagnostics so physicians can focus on delivering the best possible patient care.

Turning now to RaDaR ST, our circulating tumor DNA assay with exceptional sensitivity for early detection of molecular residual disease. In late February, we announced the full clinical launch of RaDaR ST, which has detection as low as 1 ppm. The launch targets 2 approved indications, HPV-negative head and neck cancer and a subset of breast cancer. In addition, we have submitted to MolDX for reimbursement in 2 additional cancer indications, which, if granted, would more than double our market opportunity.

Early insights from the RaDaR ST launch to date are very encouraging. Approximately 29% of customers who previously used RaDaR 1.0 have ordered RaDaR ST since launch. Additionally, 34% of RaDaR ST orders received include additional NEO tests.

All test results to date have been delivered faster than our published turnaround time. RaDaR ST represents a very important advancement in MRD testing. And with its clinical launch, we now offer a comprehensive solid tumor solution, spanning diagnosis profiling, therapy selection and MRD.

Looking ahead, we are focused on targeted R&D investments in whole genome sequencing, including our next-generation MRD assay and whole genome solution for heme. The strengthening of our pipeline increases durability and positions us effectively to address future market needs. Our next-generation MRD platform is progressing well, with data generation expected next year and a potential launch as early as 2028.

In parallel, we're advancing our nonclinical portfolio to meet the evolving needs of the pharma. This includes expanding our MRD offering with an off-the-shelf single tube AML flow panel designed for broader applications across CLL, BALL and multiple myeloma as well as enhancing our IHC menu with 5 new CDx relevant markers.

Turning to our PanTracer portfolio, our integrated solution for solid tumor therapy selection, designed to combine tissue and liquid testing to deliver confident actionable insights for real-time treatment decisions.

PanTracer Liquid is a noninvasive blood-based test that analyzes circulating tumor DNA to identify key genomic alterations that inform treatment decisions in patients with advanced stage tumors. With MolDX reimbursement received, we expect revenue contributions to ramp throughout the year.

The expansion of PanTracer Family and PanTracer Pro turns a very fragmented tumor physician -- sorry, tumor physician work into a coordinated and accelerated workflow from a single sample. It fully integrates the therapy selection workflow by combining comprehensive genomic profiling with immunohistochemistry and other auxiliary tests, allowing oncologists to manage the entire cancer diagnostic workflow from a single requisition and sample. This allows for faster test turnaround and a more timely clinical decision-making.

Slide 13 illustrates a typical PanTracer workflow. After the test requisition is received, the pathology report is reviewed and an ovarian cancer diagnosis is confirmed. The Oncotree then identifies the guideline relevant add-on tests. In this case, 5 medically necessary assays, including the recently launched PD-L1 22C3 FDA for ovarian carcinomas are included. The slides are then prepared and the test is performed. The add-on results reported to the physician by day 4 and the NGS results reported on by day 8.

As part of our go-to-market strategy, we have expanded our sales force to increase reach and frequency and accelerate penetration in therapy selection and MRD markets. The commercial expansion, coupled with the only MolDX-approved HPV-negative test currently available positions us to accelerate adoption. We plan to add roughly 25 sales resources by the third quarter of this year to support the launch and penetration of RaDaR ST in 2 new indications, which we have submitted to MolDX.

In summary, we are very pleased with our performance, both financially and strategically in the first quarter, and we are excited for the business levers that are available for us to drive improved and accelerated financial performance in the future.

With that, I'll hand over to Abhishek to further discuss our results for the quarter.

Thank you, Warren, and good afternoon, everyone. In my remarks today, I will discuss our first quarter financial results and revised 2026 guidance.

We reported total revenue of $186.7 million, up 11% year-over-year, driven by clinical revenue of $171.2 million, which grew a strong 14%. This performance was driven by healthy underlying demand with volumes up 6% and AUP increasing 8% as compared to the same quarter last year. Same-store revenue, excluding Pathline was $167.9 million, representing 12% growth versus the prior year period, driven by a 3% increase in test volumes and a 9% increase in AUP.

Importantly, both Cincight test volumes and AUP growth performed at the high end of our expectations despite the anticipated impact of strategically exiting high volume, low-value contract. Most encouraging is the ongoing mix shift towards the high-value testing driven by strong performance in our NGS business that was up 26% year-over-year and now represents approximately 1/3 of our Clinical revenue. Our targeted investments in the sales team are tangible results and supporting this continued momentum in our NGS.

Further, this favorable mix shift towards high-value testing is also contributing meaningfully to drive AUP growth of 8% year-over-year. AUP increase was also supported by our RCM initiatives, including managed care pricing gains and improved pull-through.

Turning to our nonclinical business. We reported $15.5 million in revenue, a decline of 15% year-over-year, primarily driven by expected softness in pharma. Our ODS business delivered double-digit growth that helped partially offset the declines in pharma. We believe that we are near the bottom for this business and expect to see sequential growth in the back half of the year.

Adjusted gross profit improved by $7 million or 9% over the prior year and adjusted gross margin was 46%, down 80 basis points as compared to last year. As expected, the decline in the gross margin in the first quarter was primarily driven by the dilutive impact of Pathline acquisition and the launch of PanTracer Liquid prior to MolDX approval.

Together, these factors represented approximately 150 basis points of headwind in Q1 '26. In addition, we were impacted by higher freight costs and fuel surcharges due to the geopolitical situation. These headwinds were partially offset by the gross margin expansion primarily driven by AUP increase and lab efficiency.

Looking ahead, we continue to expect gross margin expansion of approximately 100 basis points year-over-year in 2026, driven by our Lab of the Future initiatives, which includes strategic sourcing, digital pathology, lab automation and platform upgrade. We also expect margin progression to benefit from easier compares in the coming quarters.

Total operating expenses in the quarter were $99 million, a decrease of $2 million or 2% from prior year. We plan to make targeted investments in our sales and R&D functions to drive clinical test volumes and higher AUP while continue to improve leverage in G&A, which we expect to continue to decline as a percentage of revenue.

Adjusted EBITDA was $9 million, up 27% year-over-year and the adjusted EBITDA margin expanded 60 basis points. This margin expansion was driven by operating leverage in our G&A function that more than offset the headwinds from adjusted gross margin reduction.

Cash used in operations was $8.1 million in the quarter, down from approximately $25.3 million in the same quarter last year. We ended the quarter with total cash of $146 million. Our goal continues to be free cash flow positive this year.

Turning now to our 2026 guidance. Considering our strong first quarter revenue performance and earlier than assumed MolDX approval of PanTracer Liquid in March, we are increasing our full year revenue guidance to a range of $797 million to $803 million, up from $793 million to $801 million previously.

The key assumptions underlying the midpoint of our revenue guidance are as follows: First, no change in RaDaR ST revenue assumption, which remains in the mid-single digit millions. Second, we expect PanTracer Liquid revenue to be mid-single-digit millions following MolDX approval in early March. Third, no change in revenue assumptions for our nonclinical business, which we expect to be down low to mid-single digits year-over-year in 2026.

Regarding quarterly cadence, we now suggest modeling approximately 9% year-over-year growth in the second quarter, up from 8% to 9% range previously discussed, followed by 9% to 10% growth in the third quarter and above 10% in the fourth quarter of 2026.

Turning to gross margin, no change in our guidance, and we expect approximately 100 basis points of gross margin expansion in 2026 driven by a combination of factors we discussed earlier. We are maintaining and reiterating our full year 2026 adjusted EBITDA guidance of $55 million to $57 million, representing year-over-year growth of approximately 27% to 31%.

As discussed previously, adjusted EBITDA was impacted by higher freight costs and fuel surcharges due to geopolitical environment. We have taken actions to offset these pressures while remaining committed to our previously communicated adjusted EBITDA guidance.

With that, let me turn the call over to Tony.

Thanks, Abhishek. Reviewing the significant catalysts for the year, I'm very pleased with our progress to date. We launched RaDaR ST in head and neck in a subset of breast cancers and received MolDX reimbursement for PanTracer Liquid Biopsy, and we continue to drive NGS growth well ahead of market growth rates.

Looking out to the remainder of the year, we anticipate MolDX reimbursement decisions for 2 additional RaDaR ST indications, which, if granted, would double the population of patients eligible for this advanced MRD test. We're also advancing plans to expand our sales force by the third quarter to capture these additional opportunities that are emerging in advanced cancer testing. Taken together, I believe these catalysts form a solid foundation from which to drive future growth.

I'll close by outlining how we're driving accelerated financial performance through disciplined execution across our key business levers. The launch of RaDaR ST and MolDX approval for liquid biopsy have opened up large addressable markets, and we're focused on driving adoption alongside continued expansion into new indications and advancement of our next-generation MRD programs.

Commercial initiatives across sales, pricing and payer coverage are improving access and monetization, while ongoing investments in automation, platform upgrades and lab optimization are enhancing efficiency and scalability. Together, these efforts position us well for sustained growth in 2026 and beyond.

Thank you for your continued interest in NeoGenomics. And operator, this concludes our prepared remarks. So please open up the line for questions.

[Operator Instructions] Your first question is coming from David Westenberg from Piper Sandler.

Congrats on all the growth. So I want to focus on the positive here. The NGS growth has been robust. You've been tracking in the mid-20s for a long time, but you are facing difficult comps.

As we model the durability of the growth algorithm, can you talk about NGS predicated on -- or growth predicated on PanTracer Liquid versus tissue? How should we see that mix growth? Can that help you sustain kind of that 20% range? And then secondly, how do we think about the AUP over the next couple of years as this starts to ramp? And I'll ask one small follow-up.

Okay, Dave. So thanks for the question. I'll kick us off and then Warren can fill in some color as well. First, on the sustainability of the NGS, I appreciate the question, right? I mean we are showing really good growth in NGS, as we said, 26% revenue growth, and that was driven by 16% volume growth.

If you turn back the hands of time, we closed last year, I think 23% in the quarter of Q4, and we did 22% for the year. And at the time, we said we thought that we were able to be able to sustain that at a minimum, if not even beat it with the addition of PanTracer LBx. And so we look at where we sit right now, Dave, we feel very good. The early products that we mentioned before, they were up to 25% of our clinical revenue in the quarter. Early days of PanTracer are showing really good signs for us. Warren can go into a bit more detail on PanTracer LBx.

But even PanTracer Pro, which was introduced in the mid of February, we're seeing it now almost cover 10% of PanTracer volume, which is exciting because it's captured 15% of new users. So we absolutely do think that it's sustainable. And with the addition of Liquid Biopsy to the Family, we think it can go even further. And with that, maybe I'll turn it over to Warren to a little bit more color on LBx, and then we'll get to the AUP.

You covered a lot of ground. I'd say this that the PanTracer Family for us, we really look at the category growth overall because the tissue and the liquid get used sort of concurrently or certainly as a reflex to TMP that might take place on tissue or as a stand-alone.

So it is really, really versatile. And we are encouraged by the attractive growth that we're seeing from the category overall, including liquid.

And if we look to you would have seen a graph in the presentation, which showed 16% volume growth and a 26% revenue growth. And that acceleration in revenue growth is coming because we're moving towards the larger PGP. That's driving the growth, and that's also helping the AUP. So to your question on the sustainability to stay above those sort of the 20% mark, it certainly PanTracer Liquid but PanTracer Family as a whole is going to be a key driver for us.

Dave, on AUP, again, very, very strong performance there. We were up 8% year-over-year. And I would say that's indicative of the strategy, right? We've been very purposeful saying that we are going to drive growth with that NGS portfolio of ours. And so increasing it as a percentage of our business, which is now up to 1/3 of our business and we're growing it, that's going to have a big contributing factor to AUP.

But I would say as well, about half of it is driven by the great work that the team does behind the scenes on the RCM initiatives. So like we talk about the 300 contracts. We look at those contracts all the time, every opportunity we have to increase price there, do direct price increases and all of those initiatives add up.

And so we believe the AUP is also sustainable this year. And again, about half of that is driven by mix and the increased volume in NGS and about half is just good work behind the scenes.

But maybe one final point just as kind of the icing on the cake with AUP. While NGS is the big driver there, David, and I know that's how you were focused the question. Good news is we're seeing AUP increased contributions across all of the modalities. And so it's not just NGS that's contributing, it's the portfolio.

Your next question is coming from Tycho Peterson from Jefferies.

Maybe one for Abhishek, just on the guidance raise. In the past, you've gotten over your skis with raising guidance to cut later. I guess, why not bank the beat and de-risk the remainder of the year? Or conversely, can you point to what's trending more positive with the April data points, the new launches, obviously, you've talked to. But maybe get us comfortable that guidance is still conservative and beatable here?

Yes, sure. I'd be happy to. And again, I'll let Abhishek jump in on the details. Relative to the guidance, Tycho, you're right, we want to maintain the philosophy that we shared with you, right?

And that is when we issue our guide, you asked us to only speak with a high degree of confidence, not just with the center point of that guide and making sure we can get to the upper end of that guide at a minimum. And we've taken those factors into consideration with this guide.

What are the positives? What do we look towards? Well, again, 11% revenue, but it was driven by 14% clinical revenue growth. And so that is certainly a driver and the NGS is a driver for us to be certain.

And so based on the middle of that guide, where do we see potential opportunity and where is there some risk, I would say the opportunity is certainly with the NGS portfolio with emphasis on PanTracer LBx, getting another quarter of opportunity to drive revenue, getting out in front with commercial payers.

If we can plow that field well, we think there is probably upside opportunity associated with the guide relative to PanTracer LBx. We think that there is potential opportunity as well in our nonclinical business. It's way too early despite the pitfall there, which is why we still want to be relatively conservative.

But we're seeing early signs that, in fact, we're planning and hitting what we said, which would be kind of that low single-digit erosion on the nonclinical side. So there's some risk there, but we think that it's taken into account at this point.

I guess the other area of opportunity for us could be even better uptake with RaDaR ST. But again, we're playing this one right down in the middle, Tycho, with single millions in the middle of the guide. And I guess the additional indications were to come on board sooner than we thought, that could represent some upside.

And so we do see some potential risk, which would be on the nonclinical side. That's not a new story to you. But we see the rate of decline of that business beginning to slow and activity beginning to pick up. And so on balance, we would say there's probably more opportunity than downside against what we've shared with you today. Does that help?

That does. That does. Another question as you lap Pathline next quarter, I guess, how do we think about the volume growth as you lap that? You grew volumes 2.8% ex Pathline. Is that kind of the right run rate for the business? You're rolling off big lab contracts. So how do we think about just lapping Pathline?

I think the most important element, and I'll ask Abhishek, you can get into the very specific question on the volumes. I've got to the point, Tycho, I probably look less at the actual volumes associated with just pure Pathline because I look at more the Northeast because that was the strategic purpose of having it.

And what we have seen is our growth rate in the Northeast region was 1.5x faster than the other regions, and that's a first for us. And so we see the strategic benefit of serving those customers coming through.

So our total value associated with Pathline in the Northeast region is absolutely increasing on plan, albeit the actual volumes might be down just a little bit because of the non-oncology. I'll let Abhishek take some of that.

Yes. Let me also kind of talk about the overall volume picture there, Tycho, right? Because we basically guided low single digit for the full year, we came in at about 6% growth for the first quarter. And as for the guidance, what we are saying that the second quarter is going to be flattish year-over-year growth standpoint.

But what will start to happen from now onwards that we'll start to see a sequential growth in our volume in Q2 onwards. So that's a good part, right? But a lot of the work that the revenue growth is going to come from the AP in our remaining quarters for the year.

We are basically trying to kind of absorb exiting this high volume, low-value contract as we kind of look into Q2 and Q3. Q3 '25 was a peak quarter for this particular one contract, and that's the reason we'll have those headwinds in Q2 and Q3.

But overall cases from the overall revenue growth standpoint, as Tony pointed out, on the clinical revenue, we are growing a strong 14% in the current quarter. And our guide basically still keeps us about 11% above growth for our clinical business for the rest of the year.

Okay. last quick one, Abhishek, just on the convert, you burned $14 million in cash. You have $146 million in cash and $342 million convert due January 2028. Can you maybe just quickly touch on plans for that and then I'll hop off.

Absolutely, Tycho. So we are actually discussing with many of the leading banks on the convert refinancing, and everybody has told me that this has been a good market, 2025 and what we have seen in 2026.

We are hearing that there will not be any challenge in terms of refinancing the convert. We are trying to basically make sure that we are able to get the currency of our stock, which we believe is highly underappreciated, kind of come back to a level where we feel that this is the right time for us to kind of do the refinancing.

But in any case, our plan is to get the refinancing done in the second half of the year. We do not want to leave this open failure late in the game.

Your next question is coming from Puneet Souda from Leerink.

So first one, I just wanted to see if there was any weather impact in the quarter and if you're expecting any -- as a result, expecting anything in 2Q for that? And also on the NGS side, how should we think about the ceiling?

It's 1/3 of your business. It's growing rapidly in the community setting. Just trying to understand overall NGS, what's the ceiling there? And I assume that NGS is all of the solid tumors. Can you clarify the boundaries of NGS? What includes -- what is included in NGS and what is not?

Sure. So Warren, you'll take a crack at the NGS one. And on the weather, just to be clear, Puneet, when we issued the guide, as you rightly pointed out, for the first quarter, we had already indicated what we anticipated to be the weather impact, and it came in pretty much as we expected. And so we don't see any drag or any issues moving forward through Q2. And relative to the NGS question?

Yes. So I mean how we're defining NGS is simply it's NGS for our heme cancers and it's NGS for solid tumor, largely fitting within the therapy selection vertical. At the moment, even though MRD runs on an NGS background, we're probably going to carve that out. So the 26% growth that you see that excludes any MRD.

In terms of the outlook, I mean, I'd said we'd be disappointed that in the midterm, this is not north of 40% is sort of how you need to think about that. This is definitely the growth engine of our business. You can see the trajectory since 2022. And the portfolio that we've added in 2023 and continue to add is going to continue to fuel that growth in the sort of 20% mark.

Got it. And then just a follow-up on -- there's obviously a lot of discussions about repeat use of CGP liquid. There's trials, AdComs, other things are taking center stage.

When you think about the setting you're serving, when do you think you can start to see some benefit from that just given sort of the timing it takes for your test to be recognized by the market you're serving?

Yes. So I think interesting enough, we've already seen some repeat testing on liquid biopsy already. So that's encouraging. And I think as the scale continues to grow in the second half of the year, as we outlined, we expect to see some repeat testing here as well, which is encouraging. And we also anticipate that as we put more and more patient programs in place to support RaDaR ST that we can obviously also layer some of those workflows and those applications into liquid biopsy as well. So this is certainly part of that growth assumption that you asked about earlier that will help to continue the momentum.

Your next question is coming from Bill Bonello from Craig-Hallum.

I wanted to ask a little bit about the PanTracer Pro program and just kind of how that works and what you're seeing on that front. So am I understanding this right that somebody checks that box and then based on what you see in sort of maybe an AI-driven algorithm along with the pathologists experience, you make a decision about follow-on tests that should be ordered or what complete set of tests should be ordered.

And can you give us -- you showed a little illustration where you showed one example, but can you give us a sense of comparison and maybe value when physicians are ordering that option versus when they're just selecting a straight-up panel?

So I think you've outlined the workflow pretty well. But I think coming back to one of the things that we try and do is we try to take friction out of the system. We want to make that sort of ordering experience as easy as possible. And whether you choose to requisition this through a bidirectional interface a portal or paper, it's exactly that. It's a one tick, and that's it. And the requisition will arrive in our lab.

And again, this is in the therapy selection vertical. So there's typically a diagnosis that's taken place already, that's the path report that gets read and this algorithm then determines based on guidelines and what's medically necessary, this is a key aspect, what additional add-on testing should be performed based on that specific diagnosis.

So what add-on testing will vary based on the diagnosis. And the example I shared was ovarian and we add on 5 additional tests, including that new PD-L1 for ovarian carcinomas. So the system does that automatically.

We then run -- we cut the slides appropriately because the number of slides that you cut will be dependent on the number of add-on tests. We will do the testing. We report out the results for the add-on testing as soon as that is available, and that's typically before NGS.

And the reason why that's valuable is you can get the first indication around what therapies you may want to put somebody on. And then once the NGS is available, which is typically 3 or 4 days thereafter, we'll submit the NGS results to the physician as well so that they have a complete package and they can make a more holistic informed decision from a treatment perspective.

So in the past, a physician could have done that themselves. They could have figured out using that ovarian situation. They could have figured out that I want PanTracer tissue and I want these 5 markers. They could have done that manually. But the reality is in the community setting, very few actually have -- they see so many different patients with different indications. They don't know that, that well.

So they would typically send PanTracer in and then potentially send that separate requisition at a later stage to do some add-on testing. So that just takes longer. It exhausts more sample.

So this really has a lot of efficiencies. And it also does typically result in additional add-on testing, which has a revenue component attached to it. But I want to stress it's only what's driven by guidelines and what's medically necessary.

Your next question is coming from Mason Carrico from Stephens.

This is Ben on for Mason. Could you help us bridge Q1 reported AUP to the underlying core AUP after adjusting for that low-value contract? I believe some remaining volumes of that contract were expected to flow through in the first quarter here.

Yes. I will take that one question, Ben. So we basically grew our AUP by 8 percentage and year-over-year. Excluding Pathline, the number was 9%.

And if you were to exclude the impact of the high-volume, low-value contract, then I would say that it did not impact the AUP change as much because the number of tests basically became a smaller number and there was a little bit of growth in the AUP that we have seen as we had moved away as we progress in 2025 from Q1 onwards.

So the impact for the high-volume low-value test, about 1 point or so in the overall AUP growth. Our AUP growth was primarily driven by, as Puneet pointed out, because of the high mix of our high-value testing, which has been part of our strategy, the NGS growth as well as the impact of our RCM work that we have done.

Got it. That makes sense. And then on the 2 additional RaDaR MolDX submissions, has anything changed there in your confidence or the expected timing of when you could get those decisions? Is prior to year-end the right way to think about those?

It is, yes. And that's been a consistent assumption that we've shared with you. So yes, we submitted at the close of last year. We anticipate those to be available to us by the close of this year, which is why we're gearing up the sales force in anticipation of being able to address those in the second half of the year.

Your next question is coming from Subbu Nambi from Guggenheim.

What percentage of liquid biopsy orders today are Medicare versus commercial? And what's the realistic time line for getting meaningful private payer rates? The reason I ask is the $3,289 fully loaded cost to deliver, how much would it -- is it accretive to gross margins from day 1?

Or is there a scale threshold you need to hit first? And I have the same question for RaDaR ST as well, the impact on gross margin from day 1 to like when it ramps?

Yes, Subbu, let me take this question. For the liquid because we have not seen all the volumes since our soft launch, I would say, in the second half of the year last year, we are going to basically push on all cylinders to push the volume tissue to provide you that payer mix.

So we basically have between the Medicare and the about 40% that you will basically get paid and then about 10 points of Medicare Advantage and the other 50 commercial payers. And to your point, what we believe that we will start to get paid on the 40% that I talked and Medicare. And on the commercial, this is a process, right?

As you know, what we have seen how this process plays out, there will be a time which it will take some time as we start to get the coverage and the policy. My sense is that given the fact that we already have contracts with like 300 of these payers, that will definitely give us like a feet on the table and we'll be able to push through this one relatively faster, but this will take some time.

Coming to the RaDaR, the mix is slightly different. I would say that Medicare is about 20% to 25% and then you have Medicare Advantage, which will be 10% to 15%, and the rest would be commercial and the Medicaid a little bit of tail there.

So that's where this plays out. So the overall payment rate for RaDaR as in any other competitor that has seen this space, they are going to be starting to get paid on the Medicare and then we'll have to start to build the coverage for the commercial payers.

And Abhishek, just to put all the numbers together, the low contracts that you guys had the rationalized volumes, were they largely Pathline volumes or this has got nothing to do with Pathline volumes, these were just other contracts?

No, not Pathline volumes Subbu, because what I called out that our overall volumes in 2025, roughly 1.35 million, we basically said that this high volume, low-value contract was about 3% to 4% of the overall volumes. Pathline is much more smaller, right, from that standpoint. So I would -- so this was a different contract.

Your next question is coming from Dan Brennan from TD Cowen.

Maybe first one, just on the guide. Could you just speak to a little bit for Q2 and for the year? Just I think for the year, you kind of spoke to it, but just NGS, ex NGS, kind of what are we expecting for Q2? And how does it look for the full year?

So what we are guiding for the full year is $800 million at the midpoint. And for Q2, the revenue growth is going to be 9% year-over- as compared to the 8% to 9% that we had guided the last time. We're basically adding more dollars in Q2 because of the MolDX approval for liquid that's the reason the guide goes up for the second quarter.

For NGS, we have basically called out, excluding liquid, we are going to be in line with what we have in 2025, which is about 22%. So that's a part of the NGS. Now if I were to step back and what Tony was saying that this is a guide, this basic gives us a high degree of confidence to be able to kind of hit the midpoint of the guide.

But at the same time, we believe that we should be able to come in better as compared to the mid-single-digit million from the liquid will be disappointed internally if we don't actually do better there.

So there are some upside there as well as I would say on the NGS that we have been growing at 25%, 26% and our guidance basically 22%, 23%. If we are able to kind of see the similar kind of growth on the NGS, then that would be another upside. So again, my takeaway on this one is that from the guide midpoint standpoint, this is prudent, but it gives us the opportunity to be able to kind of come in ahead if what we are anticipating internally were to go on our way.

Got it. So 2Q NGS should be 22 just like it is for the full year.

I would yes. That's right.

Okay. Okay. You called out in the prepared remarks about Epic Aura and the upside that other players maybe have seen or I forget how you termed experience the volume uplift. But just remind us where you are, what are you seeing so far? What's baked in? And what would get you to see that kind of uplift like what needs to happen?

We launched -- we went live with our first customer earlier this month. So -- and the beauty of Epic Aura allows for a significantly faster implementation with customers. So we are targeting the Epic Aura implementations for therapy selection and MRD. And we've got a robust pipeline of accounts that we're looking to activate with Epic Aura in quarter 2 all the way through the year.

So certainly hoping to expecting to see that uptick as the year progresses. And this is one of the key levers in terms of sustaining this high NGS growth rate that we've been talking about and also will help to drive demand for RaDaR ST as well because the simplified workflow that it will bring.

Got it. So some of the benefit is baked into the guide. It's not like there's potentially upside if you're successful with these account activations. Is that the right way to think about it?

I would say that if we're able to accelerate the implementations based on what we put in the guide, there's upside there as well. We also -- if the pull-through is as significant as what was articulated in the independent studies that we've done, I think there's upside there as well. We didn't assume that we would see that radical uplift, but there certainly are studies that point to that.

Your next question is coming from Michael Ryskin from Bank of America.

A couple of quick ones. One is maybe as part of your answer to Dan just now, sort of your comments on growth expectations through the year, both in NGS and non-NGS. What's the implicit contribution from some of the sales force expansion?

And just maybe wondering if you could comment on the sales force addition more broadly, is that playing a role in the second half? Is that more of a '27 benefit? Just how to think about that?

Well, I think about the sales force as being actually quite productive for us, Michael. I think if you look at the size of our sales force and the size of our spend, we're probably relatively under-indexed versus many of our competitors. We got the sales and marketing ratio is probably somewhere around 13%.

And if we look to just the oncology, the OSS team being in the 50s, that is a relatively low number, but yet they have proven to be quite productive, right? So the share gains that you have seen with the NGS portfolio is driven in large part by that increased penetration into the community oncology space.

And so we do see the sales force as one of the levers for us to continue to drive growth. We also see it as an opportunity for us. You take a product like RaDaR ST and you see a relatively low market penetration rates, we think we can contribute there. And so we do see the sales force as an ever-increasing opportunity for us to continue to drive growth. And we will be selective in how we continue to expand and grow that side of the business because we think it is a large revenue driver opportunity for us.

What we always have to balance, Michael, is not overly disrupting customer relationships that are established as well. So we tend to take kind of a very thoughtful process as to when we add them and how we add them, but they are clearly a growth driver for us. I don't think we'd be where we are today with the 26% growth had it not been for that investment that was made a year ago.

Okay. All right. And for my follow-up, I kind of want to make sure I'm doing the math right. We're kind of calculating like direct Pathline contribution. It continues to step down and kind of step down a little bit more this quarter.

I heard what you called out on the call in terms of the benefit in the Northeast and the more broad uplift to the portfolio. But just anything specific to call out there? I mean, do we expect that to continue? Or is that the weather impact in the quarter? I'm just sort of taking the Pathline ASP, Pathline volumes, doing the math right?

Well, listen, I'll start off and then Warren, Abhishek can jump in. Again, it shouldn't be a surprise that there might have been a slight step down in the volumes associated with Pathline because we were exiting some of that non-oncology business. And so that certainly had an effect.

And then, of course, we're doing a lot of work here on load balancing. We want to make sure that the tests go not necessarily -- they don't always have to go through Pathline. They can be ordered and can be run down through Fort Myers or AV. And so load balancing comes into play. And that's why, honestly, I don't put a lot of stock into what is directly attributed just to Pathline.

It certainly delivered what we expected in its range of revenue, but the growth driver that we see in the Northeast, that is the catalyst. And so Warren can maybe add a little bit more comment on that.

The certain aspect that you didn't touch on is the Northeast was probably the area that was most affected by weather in the first quarter. So that's the third factor. So you've got weather. The non-oncology business that we have no interest in entertaining so we're stepping out of that business.

And then the third dynamic is we're leveraging our lab network to provide the best possible turnaround time, but also drive scale where possible. So some of the testing that was historically done in the Rye lab, lab has moved to other parts of our network.

Overall, we're very pleased with the development we're seeing so far that 1.5x market growth in the Northeast is really encouraging, particularly based on some of the trends we have seen historically.

Our next question comes from Mike Matson from Needham.

So I thought I heard you guys say that in the -- within the NGS business, there is some price benefit. So obviously, I mean, I know that the NGS is growing as a part of the overall mix and driving price. But like is there some positive pricing mix happening within that NGS business and what's driving it?

No, absolutely. So on the NGS business, what we have called out that this business grew 26%, 16% of that was driven by volume and the other 10% came from the increase in the AUP. And as we were discussing that AUP increase has been on account of some of the initiatives that we have put in place. But at the same time, we are seeing the increase in the CGP panel in the NGS business as we move from the single gene test. So that is basically kind of moving towards the high-value testing, which is helping us drive the higher.

Okay. And then the $20 billion MRD market, when you get these additional 2 indications covered and you're at 4, and I think you said that would double the available market to you. So what portion of that $20 billion will you be covering?

Based on -- again, this is obviously somewhat subjective, but based on the analysis that we've done will be north of 45% of the market across those four indications.

That concludes our Q&A session. I'll now hand the conference back to Tony Zook for closing remarks. Please go ahead.

Well, first off, I'd just like to thank everybody for joining us on the call. I'd also like to thank our roughly 2,400 teammates at Neo for their continued hard work and unwavering commitment to our mission.

With meaningful additions to our therapy selection and MRD test offerings during the first quarter, I'm very excited for the year ahead as well as 2027 and beyond as these high-value tests represent a growing portion of our clinical business.

I look forward to our next quarterly update in July when we report our second quarter results. Thank you again and have a great day.

Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.

Good morning, and welcome to the NeoGenomics Fourth Quarter and Full Year 2025 Financial Results Call. Please be advised that today's conference is being recorded.

I will now turn the call over to Kendra Webster with NeoGenomics. The floor is yours.

Thank you, Kelly, and good morning, everyone. Welcome to the NeoGenomics Fourth Quarter and Full Year 2025 Financial Results Call. With me today to discuss the results are Tony Zook, Chief Executive Officer; Jeff Sherman, Chief Financial Officer; and Abhishek Jain, EVP of Finance. Additional members of the management team will be available for the Q&A portion of our call.

This call is being simultaneously webcast. For reference, concurrent with today's call, we posted a short slide presentation to the Investors tab on our website at ir.neogenomics.com.

During this call, we will make forward-looking statements regarding our future financial and business performance, business strategy, the timing and outcome of reimbursement decisions and financial guidance. We caution you that the actual events or results could differ materially from those expressed or implied by the forward-looking statements. These forward-looking statements made during the call speak only as of the original date of the call, and we undertake no obligation to update or revise any of these statements.

Please refer to the information disclosed on the safe harbor statement slide in the deck posted on our website as well as the information under the heading Risk Factors in our most recent Forms 10-K, 10-Q and 8-K that we filed with the SEC to identify important risks and other factors that may cause our actual results to differ materially from the forward-looking statements. These documents can be found in the Investors section of our website or on the SEC's website.

During this call, we also refer to certain non-GAAP financial measures that include adjustments to GAAP results. The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available in the press release we issued this morning and in the slide deck available in the Investors section of our website.

I will now turn the call over to Tony.

Thanks, Kendra. Well, good morning, everyone. Thank you for joining us today. As been our practice, I'll begin with a discussion of Q4 highlights and key business growth drivers before turning the call over to Jeff, for a deep dive into our 2025 financial results. Our new EVP and incoming CFO, Abhishek Jain, will then introduce our 2026 guidance. Afterwards, we'll open up the call for your questions.

Our mission and vision guided us through 2025 to deliver improving results throughout the year. Let's get into the recent highlights. As we covered in our preannouncement, during the fourth quarter of 2025, we delivered record revenues while making meaningful progress advancing our NGS and MRD long-term growth initiatives including preparing for a full clinical launch of our RaDaR ST MRD assay this month. I'll cover these initiatives in more detail shortly.

Total revenue for Q4 was $190 million, representing double-digit growth of 11% year-over-year. Our clinical business continued its robust growth with revenue increasing 16% year-over-year. The clinical performance was driven by effective execution of our key commercial strategy. enabling volume and share gains in key segments. In the fourth quarter, we again saw a sequential improvement in AUP, continued growth in test bonds and NGS revenue growth of 23%, well ahead of NGS market growth rate. The 5 NGS products launched in 2023 contributed 23% of clinical revenue in the quarter.

We continue to see demand for our non-NGS modalities as well with all modalities continuing to grow at above market growth. Our full year total revenue was $727 million, which represents 10% growth over full year 2024. We ended the year with significant momentum, and I attribute this to several factors. One, we're a pure-play oncology solutions provider driving rapid dissemination and adoption of innovation through our best-in-class commercial organization in the community setting. Studies have shown that as much as 80% of all cancer care is now delivered in the community setting, which has historically lagged NCI-designated cancer centers when it comes to introducing the latest in cancer testing innovation.

How are we winning in the community? We believe community oncologists are guidelines driven and focused on certainty, not possibility, and they choose partners to remove friction and enable confident treatment decisions under operational, economic and time pressures. Reimbursement coverage also is critical. The results of several meetings of our scientific advisory board as well as independent market research that we commissioned, revealed several reasons why community oncologists look to us. NeoGenomics offers ease of ordering, simple to interpret test reports, fast and consistent test turnaround times, access to medical expertise, and most importantly, our comprehensive test menu spanning diagnosis, therapy selection at MRD. Our Net Promoter Score of 79 reflects strong physician satisfaction among our current customer base with our NPS score continuing to improve in '25 even with record test volumes.

Two, we enjoy a leadership position in the hematology testing market with greater than 25% share across diagnostics and therapy selection. And as pathologists and oncologists consolidate the number of vendors they use, we are successfully leveraging this team leadership position to create enhanced test demand, particularly in high-value areas such as therapy selection and MRD. In fact, in 2025, we saw 14% growth in the total number of pathologists and oncologists ordering 5 or more tests from Neo. On top of that, we estimate that approximately 40% of all active pathologists and oncologists have ordered 5 or more test of ours during the year. While we're proud of that reach, it also means that over half of practicing providers are still available to us to bring over to Neo.

Three, we built a geographically balanced lab network that allows us to be responsive to customer needs, including offering some of the fastest test turnaround times in the industry. When faster, more accurate treatment decisions can have a material impact on patient outcomes. This network was further strengthened by our acquisition of New Jersey-based cat line last year. which gives us a meaningful presence in the #3 cancer market in the country. We're on track to capture operational efficiencies and synergies from the Path line acquisition that we anticipate will be accretive to profitability beginning this year.

And four, we have one of the broadest cancer test menus in the industry, spanning diagnosis to therapy selection to MRD for both heme and solid tumor cancers including over 300 commercial payer contracts, which enables us to be the partner of choice among community hospitals and community oncologists. We're highly differentiated from both large reference labs as well as specialty oncology labs. And this optimally positions us to address underpenetrated markets in therapy selection and MRD in excess of $30 billion, while potentially improving outcomes for patients as they advance along the cancer care journey for enabling precision oncology in the community setting.

Turning now to RaDaR ST. In November, we presented new research for the RaDaR ST assay for circulating tumor DNA detection across solid tumor types. The data from this bridging study showed that RaDaR ST demonstrated 97% concordance and maintained equivalent sensitivity with RaDaR 1.0. This bridging study was used to secure multi-X reimbursement in the 2 previously approved indications, HPV-negative head and neck cancer and a subset of breast cancers. This decision paves the way for us to broadly commercialize RaDaR ST formally RaDaR 1.1. To that end, we're on track to execute a full clinical launch of RaDaR ST by the end of this month.

As part of our go-to-market strategy, we're expanding our sales force to help us penetrate the head and neck market. We believe adding feet on the ground will help us penetrate this market with the only MolDx approved HPV negative test currently available to patients. To ensure that we're well positioned to capture more of this large and rapidly growing MRD market, we have also submitted 2 additional solid tumor cancer indications for MolDx for approval. While we're not disclosing these cancer types yet for competitive reasons, we believe that upon securing coverage, we will effectively double the market opportunity of patients eligible for RaDaR ST testing.

To expand our reach, as we secure additional MolDX approvals, we expect to add more than 25 oncology sales specialists for [indiscernible] by the third quarter. From a financial perspective, we believe 2026 will see modest revenue contributions from RaDaR ST as adoption ramps, and we gained reimbursement approval in the additional indications. We expect revenue growth to accelerate in '27 and beyond.

In parallel with our RaDaR ST launch preparedness activities and efforts to gain coverage for additional indications, we also continue to focus our R&D investment in next-generation MRD. This assay will be an ultrasensitive whole genome solution for lower setting cancer types. We're working on product development now with data generation and MolDx submissions slated for next year and a potential clinical launch as early as 2028.

Turning now to our PanTracer portfolio of products for solid tumor therapy selection. PanTracer is designed -- is designed for solid and liquid to work together empowering oncologists with actionable genomic insights for component real-time treatment decisions. The test can be ordered independently or with complementary tests depending on the patient's individual needs. PanTracer LBx is a noninvasive blood-based test that analyzes a circulating tumor DNA to identify key genomic alterations that inform treatment decisions in patients with advanced-stage solid tumors.

Importantly, PanTracer LBx fills a gap in our portfolio that providers have been asking for, allowing them to further consolidate the number of labs they use. We have submitted to MolDx for clinical reimbursement coverage to the LBx test and are awaiting a decision. Assuming a favorable decision, we anticipate that LBx will contribute modestly to revenue in 2026 as adoption ramps throughout the year. Another product on the PanTracer family, PanTracer tissue had strong growth throughout 2025.

We doubled the volume of tests ordered from '23 to '24 and then nearly doubled again from '24 to '25 while continuing to grow AUPs. This represents another proof point of our ability to pull higher value tests through our community channel, leveraging our [indiscernible] leadership position. 75% of community oncologists who were new to Neo in 2025 ordered 5 or more tests, a strong leading indicator of our continued growth and success penetrating the community channel.

I'm pleased to share today that PanTracer portfolio is growing. Last week, we launched PanTracer Pro as part of the expanded solid tumor therapy selection portfolio. The test integrates broad genomic profiling with diagnosis directed IHC and ancillary testing, intelligently selected based on tumor type and clinical context to provide oncologists with actionable insights for therapy selection in a single order. PanTracer Pro rounds out the portfolio, and it will help streamline the ordering and testing process, delivering timely, relevant results, helping clinicians personalize treatment strategies and improved patient outcomes.

At the end of 2024 and moving into 2025, we invested in our commercial organization, specifically our oncology sales specialists. We added 35 people to this group who target community oncologists. And as these individuals mature in their roles, we're seeing a continued uptake in NGS testing accounting for a larger portion of our total clinical revenue as we increase our reach and frequency. This penetration speaks to the strength of our commercial channel as well.

We have launched 5 the [indiscernible] products since March of 2023. And even though we were later to market than some of our peers with these products, we are still seeing very good uptake. PanTracer tissue highlighted earlier was one of the 5 products, which reflects the breadth and strength of our menu and our ability to capture market share when we introduce new products. With the success of our NGS products, we now have the opportunity to be more selective with the volumes that we prioritized. We are intentionally shifting testing capacity towards more therapy guided and higher-value testing which is expected to make AUP expansion a more significant driver of revenue growth relative to volume.

And with that, I'll hand it over to Jeff to further discuss our results for the quarter and full year.

Thanks, Tony, and good morning. Fourth quarter total revenue increased by 11% over prior year to $190 million. Total clinical revenue continued with strong double-digit growth and increased 16% from prior year. As expected, nonclinical revenue declined by over 25% in the fourth quarter. Adjusted gross profit improved by $5.8 million or 7% over prior year, and adjusted EBITDA was $13.4 million, up 10%. Q4 was the tenth consecutive quarter of positive earnings with adjusted EBITDA and margins improving sequentially each quarter in 2025.

Clinical volumes and revenues continued with robust growth in the quarter. Public test volumes increased by 11% in the fourth quarter with AUP growth of 5%. The Same-store revenue without pipeline was $170 million, representing growth of 14% driven by a 6% increase in test volumes and a 7% increase in AUP. Volumes were negatively impacted in the fourth quarter as we intentionally rationalized our exposure to higher volume, lower value test clients. We are continuing to see strength across our portfolio with above-market growth rates across modalities we offer.

NGS revenues grew by 23% over prior year in the quarter and accounted for around 1/3 of total clinical revenue. Average revenue per clinical test increased sequentially from Q3 by $12 or 3% and was up 5% from prior year. Excluding pipeline, AUP increased by $15 or 3% from Q3 and was up 7% over prior year. A larger percentage of higher value tests, including NGS as well as recent managed care pricing increases and RCM initiatives are helping to drive higher AUP.

Total operating expenses in the quarter were $97 million, an increase of $1 million or 1% over prior year. Cash flow from operations was a positive $1 million in the quarter and we ended the quarter with total cash of $160 million, down slightly from Q3. Our balance sheet and expected cash flow will enable us to continue to invest in our business to drive organic growth through new product development and sales force expansion while also increasing operating efficiencies through investments in technology, and automation.

Turning to full year 2025 results. Revenue was up 10% versus prior year to $727 million, driven by deeper penetration into the community setting, a continuing shift to higher-margin modalities and execution of revenue cycle management initiatives. Total clinical revenue increased 15% and growth was 13%, excluding potline. Nonclinical revenue declined 24% for the year, in line with our revised expectations. Adjusted gross profit increased $23 million or 8% to $335 million. This represents an adjusted gross margin of 46% or a decline of 111 basis points mostly driven by path line, the decline in nonclinical revenue and the operating cost of the clinical liquid biopsy launch.

Cash flow from operations was positive $5 million in 2025 with free cash flow improving by over 35% as compared to 2024. Adjusted EBITDA increased by $4 million to positive $43.4 million, an improvement of 9% over prior year.

And now I'll hand it over to Abhishek to introduce our 2026 guidance.

Thank you, Jeff. I would like to begin by thanking my colleagues at Neo for their warm welcome. Over the past month, I spent time with investors and analysts attended our global sales meeting visited our labs and gained deeper insights into our strategy and the opportunities ahead. It has been a productive and energizing first month. With that context, let me share our 2026 guidance.

For the full year, we expect revenues of $793 million to $801 million. The midpoint of our 2026 revenue guidance assumes rate our ST revenue in mid-single digit millions for our approved indications. A modest revenue contribution from PanTracer liquid and sustained softness in nonclinical through the year exiting 2026 down low to mid-single digits. While we do not provide quarterly guidance, let me provide some color on quarterly cadence that is impacted by the Pathline acquisition and revenue assumptions for RaDaR ST and PanTracer liquid, which are weighted towards the back half of the year. I suggest modeling approximately 10% year-over-year growth in the first quarter, 8% to 9% in the second, 9% to 10% in the third and slightly above 10% in the fourth quarter of 2026.

Regarding the extreme weather throughout the country so far this year, we know some providers had to close their offices and appointments have been rescheduled. As a result, there will be some impact on volumes and revenue for Q1, this has been contemplated in our full year 2026 guide and cadence by quarter. We expect adjusted EBITDA to be in the range of $55 million to $57 million or 22 representing year-over-year growth of approximately 27% to 31%. We expect adjusted EBITDA to grow by low 20% year-over-year in the first and the second quarter and low 30% year-over-year in the third and the fourth quarter, respectively.

We will continue to take a balanced approach to investments, strategically increasing sales and marketing and R&D spend for new product initiatives and clinical programs that support payer reimbursement and drive top line growth while improving liquidity with the goal of becoming free cash flow positive this year.

Now let me turn the call back to Tony.

Thanks, Abhishek, and welcome to the team. To recap, during the fourth quarter, we again delivered very strong clinical volumes and revenue, while advancing NGS and MRD initiatives that we believe will contribute to accelerating our growth for years to come. Looking forward to 2026, in our clinical business, the focus is on strategic, profitable growth driven by continued expansion of NGS revenues and market penetration for the Pantraser family and radars TV.

Simultaneously, we're implementing tools and solutions we believe will enhance the productivity of the entire sales organization and working to enhance customer workflows through solutions like our Epic [indiscernible] integration. In parallel with our product and service offerings to grow revenue, we are making targeted investments to drive top line growth and margin expansion. There is a very strong financial discipline embedded throughout the organization, and we're going to build on that as we continue to grow revenue and improve operating efficiencies and margins.

Thank you for your continued interest in NeoGenomics. And operator, this concludes our prepared remarks, so please open the line for questions.

[Operator Instructions] Your first question is coming from David Westenberg with Piper Sandler.

So I'll just ask one question, but it will be kind of on the longer side, I'll just ask it upfront. You talked about the intimate launch of RaDaR SD. Can you pride a little bit more specific. You mentioned specific -- submissions to MolDx. Can you give us more specific timing? I get that this is trying to predict government. But is this end of the year, is this potentially dragged into the next year, et cetera?

And then you mentioned also '25 sales reps, I just want a clarification that is specific to MRD or esoteric tests in general. And then on those sales reps, do you plan on just going after the head and neck, the subindications of breast? Or are you actually, in fact, thinking about some of those future multi exhibitions that you have there? And then lastly, I get this is really long, but just talk about the complementarity with PanTracer liquid.

Okay. So Dave, there's a lot to unpack there. Why don't I -- I'll try and start it and kick us off and then look to Warren to address perhaps follow-up questions 6, 7 and 8. Okay, Warren, so get ready for that.

Relative to RaDaR ST, Dave, you are right, that the attention is we go out at the end of this month for our full launch relative to focus. It will be focused, Dave, on the initial indications of head and neck and the subsets of breast that we have articulated, HPV negative and the HR HER2 negative breast. So that will remain the focal point for the initial launch activity. So that was one of your questions.

As far as additional indication flow, as you say, all we can do is submit and put the best packages forward that we believe are possible for MolDx to work their way through. For all the assumptions, we believe, Dave, that those additional indications would be available in the latter half of this year for us. And so we still [indiscernible], but that would be upside against our [indiscernible]. We're not counting on those and certainly will help fuel additional robust growth going into 2027.

Relative to the actual field force expansion, I'm going to turn that over to Warren because what we wanted to do, Dave, was do 2 things. First and foremost, we wanted to take advantage of the HPV negative indication because we believe we'll be the only MolDX approved product for HPV negative. And it's a very specialized group of physicians that account for that bulk of that business and there's a fairly clear road map to how we can get to those. And so Warren's team is initially now expanding to cover that group and then we'll build the additional reps over time for the added indications that we have. And yes, Dave, they were intended to be complementary to MRD and NGS. They won't be specific only to MRD. So Warren, maybe a little bit more color on the coverage aspect.

Absolutely. Thanks, Tony, and Dave. So yes, the expansion is taking place. There's an initial expansion happening sort of as we speak. That is to really address the RaDaR ST launch in particularly head and neck HPV negative. And the reason why we felt we needed to do a small initial expansion is one of the primary call points for head and neck HPV negative is the ENT and there hasn't been a traditional core point for us up until now.

So we actually are investing in a small team dedicated towards ENTs, and they will be almost exclusively focused on the RaDaR head and neck indication. They will have an option to represent other parts of the portfolio, but we feel that their focus will be largely focused on the RaDaR ST.

The -- as we've done in the past and very successfully, I might add, as we expect new products and in this case, demunications to come to market, we do expand our sales force because we want to increase reach and frequency. And we will be doing that in quarter 2 and in quarter 3 in anticipation of the additional indications that we expect from MolDX. Again, these team members will be oncology sales specialists, they will be responsible for selling our oncology portfolio, which is therapy selection for and solid tumor as well as MRD. It's probably a bundle of about 12 or 14 tests if you really look at it, but we see a 100% core point overlap between our portfolio for therapy selection as well as MRD.

And today, based on our size of our sales team, we feel a bit more value by consolidating sales activities within one resource versus having specialized sales teams although we will get some good lessons from our dedicated ENT group that we're establishing as we speak.

Your next question is coming from Bill Bonello with Craig-Hallum.

Hoping to sneak in a couple, but the first would be just on the clinical volume. Any chance you could quantify the impact of exiting the low-value business? And then maybe clarify whether there's more business that you will still be exiting in future quarters so we can have some sense of how to think about volume growth as we progress through the year.

Sure, Bill. I'll kick that off. And again, if I -- I'll look to Abhishek or Jeff to add in any additional color. So Bill, if you just step back and you look at us historically, right? And if you look at how the revenue models were built, volume represented for us typically this upper to single digit growth. And AEP was more in the low single-digit growth.

There's 2 factors that are driving our thinking now. First of those is this constant and purposeful penetration into therapy selection in MRD. With that, we will be the beneficiaries of higher AUPs and therefore, a better impact on our margins and business overall. So that's point number one. We expect our AUPs to continue to grow. And then the second point, Bill, was this idea, we want to make sure we secure the right call. We want to be a business that's growing our revenue as well as our margins over time.

And you'll recall that we had -- we talked about a contract throughout last year that was a high volume, low value-added opportunity for us. The A&Ps bill in that were like in the low $200 range. We entered into that with the potential opportunity to secure longer-term growth into higher value tests. But if they don't materialize, we had to look at it in the macro sense. And for us, we believe the better course of judgment here was to say, our resources are better used and focused in the areas where we're seeing higher margin opportunities and higher growth. And so the model now kind of inverts a little bit, what you should be expecting is AUP now in the upper single-digit range with volume in the lower to mid-single-digit range.

But that being said, I just want to make sure we clarify on this, Bill, because it's an important point. we're still growing all the right volumes, right? We're going to continue to grow by modality. We have no desire to pull back in that area. We continue to expect NGS to have robust growth as well. And so that's going to continue. We saw robust NGS volume and AUP growth in 2025, we would expect similar results in 2026, and so the right volume will come through. And on that NGS business, again, it's now over 1/3 of our clinical business.

And an interesting fact, Bill, is that 1/3 of our clinical revenue is actually being supported with only 9% to 10% of our volume. And so it's the right volume that's generated these kinds of growing numbers. So I would expect most of this to be evident through Q1 and Q2. And then from that point on, we will be back to kind of normal growth trends. Does that help, Bill?

It does. And I mean, should we think even a bit lower perhaps as we get into Q2 and Q3, just then on the volume growth. It sounds like maybe a little to still come? Or is this a pretty good proxy?

So let me take that one, Bill. So we are -- like for example, what you have seen in Q4 results, our sequential volume growth was slightly down and we are anticipating as we kind of go in Q1, our numbers will be sequentially down in a similar way as we kind of start to focus on these high-margin, high-value tests. And this is very intentional from our strategy standpoint, and that's the reason we are moving in that direction.

But as we get into Q2, we'll basically be year-over-year flattish, and that's where we will start to grow our volumes in Q3 and Q4 on a year-over-year as well as on the sequential basis.

Your next question is coming from Andrew Brackmann with William Blair.

Maybe just also a similar line of questioning to Bill's here, just sort of around guidance. by my math, it looks like the core clinical business, when I exclude Patin and some of these new contributions from LBx and MRD, it looks like that core is called the sort of grow in that high single digit to maybe 10% year-over-year. Can you maybe just unpack some of the underlying assumptions there for the export book of business? And I guess, in particular, just sort of reconciling that to the -- I think you did 14% same-store sales growth in Q4. So just sort of reconciling to that high single to 10% growth.

Yes, Andrew, again, I'll kick it off and I'll look to Abhishek and Jeff to add additional color. So yes, in 2025, we saw expat line, we were about 13% growth. on the clinical side. And we are anticipating double-digit growth on the clinical. And so what's within there. First, there will be a full year path line that will be built into the numbers as well. As I just mentioned with Bill, that 1 contract that we exited, that has an impact in the totality of the clinical side.

And then of course, in the guide itself, Andrew, just to be clear, we want to be prudent relative to the back half with LBx. Since we still do not have LBx approval in hand, we thought it better to only pack in revenue for the second half of the year at a modest rate. And so we don't really see the benefits of that coming through in the current guide. If we, in fact, get DX support for LBx earlier than that, then it would represent upside in our total growth, and of course, that will be on the back of the total clinical business. And so again, I hope that gives you some color and Abhishek and Jeff, if I missed any key points if you just call out for Andrew.

No, I think you have covered it well, Tony. And Andrew, we are expecting the clinical business to be growing at about 11 points based on our low to mid-single digit on the nonclinical side. So it's kind of in the range that we have been expecting the company to be growing in at about 10 points that's what we have called out. And that's where our midpoint currently is $797 million is pretty close to that 10%. I think the guide is pretty prudent to the extent that it gives us a very high degree of confidence to be able to meet these numbers. And then we will, of course, see if the [indiscernible] were to pan out as we are anticipating, it gives us some room to actually do better than the expectation.

That helped Andrew?

That's helpful. And then -- yes, that's very, very helpful. And then just on the LIMS rollout here. Obviously, that's a multiyear process for that rollout. But anything you can maybe share with respect to how that might be impacting the model or sort of just sort of the workflow in 2026.

Yes. Great question. Thank you for that. As you know, historically, we were built for effectiveness, not necessarily for efficiency. And moving to a common limb system, we think, is foundational for us to continue to advance towards ever improving margins and efficiencies for the company.

What we will see through the course of 2026, Andrew, you know, we have these 8 existing LIMS systems, we'll be on a path to migrating to 1 common system. What we wanted to do, though, is manage that effectively over time. And so we are going modality by modality site by site. We're not going to just do kind of a big bang theory put any risk at all into the business. And so that means the benefits of wins only start to become evident for us in the latter part of this year.

Now there are some natural efficiencies that Warren's team are already seeing, and I'll look to him to add some of that added color for you but the more pronounced impact will be in '27 and '28 as we can retire all of the legacy systems and build upon the existing LIMS architecture.

So Warren, any added color.

Yes. Thanks, Tony. Andrew, I think in terms of sort of technical debt benefit, that's coming in 2027, to be clear. But as we put the limb system in now, we're actually not just replacing our existing LIMS or the new LIMS. We're actually looking at the workflows and optimizing the workflows based on how we understand the business and how it's likely to develop over time. So as we get each modality in place or in each site, start to see workflow efficiency there. So that's sort of -- well, saying that will start to come through in operational efficiency.

I think the other big benefit that we're getting is far greater capabilities from analytics and insight point of view to really understand where inefficiencies lie within our workflows. And that analytics and sort of transparency will also help us translate a better customer experience by providing visibility to real-time sample tracking, et cetera, which is one of our key initiatives for 2026.

And I would say, Andrew, again, this is foundational for us because it affords us then the opportunity to build on that which is why I maintained it. We're still in the early engines relative to gross margin expansion opportunities for ourselves. So growing limbs and you looked out of the platform opportunities like DX things that Warren and his team can do the digital pathology and automation. We believe that the gross margins are in early and we'll continue to build once revenue, but margin expansion as well.

Your next question is coming from Subu Nambi with Guggenheim.

Thank you for all the color in different businesses. Given some longer selling cycles and maybe some easing of the funding pressure, where do you see pharma ordering playing out this year between first half and second half? And what products do you expect to lead the order book from Pharma?

Could you repeat the second half of the question, please?

What products do you expect to lead the order book for Pharma?

Okay. Got it. So relative to Pharma, I would say that my view certainly have not changed from where we were about to 8 months ago. We anticipated that the erosion that we were experiencing on the pharma side of the business would continue into 2026, albeit at the same rate that we saw in 2025. So I've always been of the belief that it would be 2027 before we would see a return to growth for that book of business. And that's how we built the guide. So we expect still to see modest erosion in the Pharma book of business for 2026. Certainly, it will be much reduced from where it was, but still in that mid- to upper 5% to 10% range for the pharma side of business.

I think the big part to return to growth here is based on RaDaR ST. That will be one of the key growth drivers for us in that book of business. There, we've had pretty good conversations. We've been well received. We're back at the table with RaDaR ST. There seems to be a really good sense of interest in it. and that portfolio of opportunities continues to grow. And so relative to the year, again, the guide would still anticipate modest erosion in the pharma side of the business. If we can get that back to flat, that would then represent upside opportunity for us.

Warren, I know the long lead cycle times, but perhaps if you talk about RaDaR ST and how that's being received?

Yes. So maybe a couple of comments there. So first and foremost, in terms of the focus, a little bit like on the clinical side. Really, our focus is to protect our position in diagnosis, but really look to grow in therapy selection in MRD. We look at form in a very similar way. We're very well known from an IHC perspective and we continue to focus on IHC because it's very relevant for pharma from an antibody drug conjugate perspective. And it's a good [indiscernible] for us, but expect our focus to really lie towards therapy selection and MRD. So there's a strong a strong alignment here between what we're doing in clinical and with pharma. As Tony said, robust opportunity pipeline that's developing with regards to RaDaR ST and Pharma some legacy users and many new users and expect first bookings to materialize shortly.

And I do appreciate the question. This gives us the opportunity to clarify it. The other thing, I guess, would remind the group, this is a relatively small portion of our overall business, talking is about 5% to 6% of our overall business. And so we continue to put the primary focus and energies on the clinical side of the business with the intent to stabilize this business and return to growth in '27. So thanks for the question.

Absolutely. Thank you for clarifying this. Can you talk about the framework from LIMS integration this year? What's being finished, what's left to go? And then maybe how that will show up in earnings in 2026.

So I'd say where our focus is today. So we've completed flow. So one about our key modalities. Our next step right now is around accessioning and NGS is really where our focus is, again, aligning to our strategic priority, looking to be able to provide increased value, both from an efficiency perspective and customer trifability those would certainly be things that you would look to conclude in 2026, probably for other modalities as well rolling into that. But we can certainly take that offline and provide more granular detail, if you like. But those are the key focus areas for us from 2026 is molecular and accession.

Next question is coming from Mike Matson with Needham.

This is Joseph on for Mike. Just, I guess, in terms of the guide for RaDaR for 2026 in the mid-single-digit millions, I'm just kind of wondering framing up your guys' confidence and the ability to hit that mid-single-digits number. And I guess just trying to understand how much of that is the clinical side versus the biopharma side maybe for both of those, which do you see to have the higher potential to drive upside to that mid-single-digit number?

Yes. Thanks for the question. I would say, first and foremost, we do have a high degree of confidence in that. That's why it's in the guide at the midpoint level. So we do have a high degree of confidence there. Relative to the mix, I think it would be fair to say in the early part of the launch, you would expect a heavier component of that to probably be more on the Pharma side. than the clinical side only because the clinical launch just takes time to build, right?

We'll have the indications of head and neck and breast, and then you'll build and you'll start to see a slow build of that activity and just with the lead time of the product you start to see the clinical effect of that probably in the latter part of the year, whereas pharma, you have the opportunity to take on a little bit more of a pan orientation and can secure pricing sooner.

And then as we build the indications over time, you're going to see the clinical side of the business certainly accelerate, and that would be the largest of the drivers moving into the outer years with RaDaR ST.

But Abhishek, anything else of...

No, I think Tony, you have covered it very well. As I basically discussed in our prepared remarks, we are actually launching, our RaDaR ST by the end of this month, and that gives us a very high degree of confidence of the numbers that we are putting in our guidance.

Okay. Yes. Great. And then maybe just one more quick one. Can you maybe just talk about the potential for continued ASP growth? I think you guys kind of talking about high single digits or upper single digits, maybe for 2026. But the potential for that to continue without any additional reimbursement announcement. So what is currently approved and reimbursed in your pipeline, NGS products, PanTracer as it stands today without LBx.

Yes, I'll start and Abhishek can join, this is Jeff. So I think, look, the continued shift in NGS is going to be -- continue to be the big driver of our AUP growth as it was in 2025 as well. So I think that is one factor. We expect to continue to have success with direct client build pricing increases, which still going in the first quarter of the year. And we also are continuing to have success with managed care pricing increases, which started in the back half of last year.

We're expecting a full year impact of those to hit in '26 as well as new agreements and new increases approved. And then finally, we're still working on other RCM initiatives to kind of close that gap between what we expect to be paid and what we are being paid. And so that AUP growth will come for those drivers to the extent we get additional indications or tests approved, that will be incremental on top of that.

Your next question is coming from Tycho Peterson with Jefferies.

Maybe one for Warren. Just on the sales force. I appreciate your color on go-forward additions. But as we look back over the last year, obviously, ramping the sales force was a big focus. Maybe with that cohort matured, can you just talk about where they are in terms of productivity. I think you called out over 5 tests ordered on providers, but maybe just any other metrics we can look to track the scaling up of the sales force over the last year? And then separately, are you baking anything in for adaptive related revenues this year and any metrics you can provide there?

Thanks, Tycho. Yes, absolutely. As you pointed out, we did expand our sales force late '24 and into the beginning of 2025. We kind of see that sort of 6- to 9-month ramp-up period and I would say that that's sort of maturing or that productivity of those resources was a big contributor to our success in 2025. And we anticipate that that's going to be a tailwind for us and in the first half of the year for sure as that sort of momentum continues to annualize into this year.

Again, the focus of those resources, they are oncology sales specialists, they're really focusing in on therapy selection and they're going to be supporting our launch from a RaDaR ST perspective in MRD. So that's where the focus is. I would say that those resources are at productivity now, so sort of in strike. The positive is we've seen very, very low attrition as well. So it's not like there's been a high churn or anything.

So I feel we're executing well, and we're starting to see general increased productivity across our entire sales team, not just the 35 that we brought on board in 2025, the sort of entire 140 or so that we have within our complement today.

And Tycho, the only other few points I'll be a little bright for Warren and his team, who may be a little humble here. I think if you look at how that expansion has taken place, there are some proof points that we can look to I mean, first and foremost, you do got to look at that NPS score, right? To have an NPS score of 79, which is a step up from where it was already, and that had to be based with feedback from oncologists. So I think that is a really positive sign that reaching frequency model is beginning to have an effect.

And then within the subsegments of our own data, when you start to see over 14% of oncologists and pathologists are not wording 5 or more neo tests. I mean I think that's another proof point that this model is taking effect, and we have now over 40% we estimate of oncologists, pathologists prescribing the 5 or more tests. I think these things are what's fueling the NGS growth opportunities for us. And I think to take the sales force on that journey over the past 12 to 16 months has been an incredible one and one we're proud of and what we're going to continue to build on.

And then relative to your second question, I would say that from a revenue perspective, we look at the adaptive partnership, much probably more strategically than economically. We see it as an offering that we can offer our customers that offers them then an expansive portfolio of opportunities for us. Over time, we will see -- we'll be a company that can offer flow MRD, we can we'll have RaDaR ST, we'll have next-gen MRD. And so that whole speed of product, we think, is an important one to offer and to have an outstanding partner like Adaptive is more strategic than I would say it's economic at least for us. but we're going to continue to work and manage that relationship to the best of our ability. Thanks for the question.

Your next question is coming from Dan Brennan with TD Cowen.

Maybe just to start off, just on PanTracer tracer. I understand the conservatism there. Just any more color about kind of the back and forth. It sounds like it's imminent. But the blood market is growing a lot faster than the tissue CGP market. So you've had really good success on tissue volumes. Just -- is it just conservatism? Or like what do you expect once that's really dialed in for that penetrate of liquid to grow it from a volume basis?

Yes. I'll kick us off and then Abhishek and Warren could add a little bit more. So yes, Dan, we have responded to all the questions that MolDX had relative to LBx. And so we're just kind of in a waiting or response mode. Now what we have seen is across -- it's not just us, but across the sector, it's averaging about 4 to 5 turns through MolDx for new offerings. And so that puts us right around 4 turns right around the 12-month mark. And so that's kind of where we sit today. So we are confident. We see this as a when we get it, not and if you get it. And then that's why we thought, yes, it was prudent to not include revenue for the first half of the year and then just kind of a modest and slow build in the second half of the year. Anything that would come before that will then be opportunistic upside for us.

Relative to kind of modeling at the high level, again, you called it out tissue is ensuing robust growth. We highlighted before the volumes for '23 to '24 doubled. We saw the same, almost nearly doubling in we're think that's probably a decent predicate as a way to look at LBx over time. And so we look to our total portfolio, of which the PanTracer family is a big driver of that to experience a robust growth again in 2026 and beyond. It's certainly in line with 2025 and then depending on MolDX time, it could be better than 2025. So hopefully, that gives you a little bit more color.

And Warren, don't know if you want to get anything more specific to how you're seeing with LBx and tissue.

Yes. I'd say the point. I think, Dan, you're right that the liquid market is growing faster. But since the launch of Pantracliquid, we've actually seen a good acceleration across the category. We saw increase in utilization of PanTracer tissue. And we've seen attractive uptake of Pantry and liquid as well. And we feel -- and actually, we launched PanTracer Pro very late last week and expect that to be another inflection point in terms of how this solution for solid tumor therapy selection is positioned for the market.

So we're -- I'm very confident in terms of the outlook here it's really just around unknowns with regard to MolDx reimbursement timing, I think, is what you're seeing within the thought process from a guy's point of view.

Yes. We launched PanTracer tissue in end of Q1 in '23 and started to build throughout '23, I mean we really saw a big uptake in the first and second quarter. And that was a big driver of our NGS growth over that time.

Your next question is coming from Puneet Souda with Leerink.

So just clarifying, given the guide here, is the long-term LRP that you had put out earlier, I believe, 12% to 13%. Is that still in consideration or is that off the table? And then if I look at the same-store sales versus new tests, a 5% revenue per test growth reported versus 7% same-store sales. Can you elaborate on how do you expect to convert these new customers to sort of higher-value test? And how long would that take for us to start to see an impact there.

Okay. So first on the first question, we're not talking to LRP. We've tried to make it clear as we can that taking our feet and firmly planting them in the year we are in. And so I am not projecting it out. I would simply say that I believe that we will this guide, we are very confident in. I think we will end the year in a very strong position with an accelerated growth opportunities as we head into '27, we would start to then see the full benefit of RaDaR ST and PanTracer LBx coming through the system. So -- but I won't go into any more relative to an LRP discussion.

The second question?

Yes. From an AUP perspective, with the guy going on, I think adding those tests and coming in the back half of the year, you should expect AUP will grow as we add those incremental tests over time. And I think that's is kind of a good example of that.

Yes. No, my sense is also that AUP we kind of move into these high-value tests right because in any case, these are going to be priced at a much better rate, and we expect the AUP will grow as we move in this direction.

And as you said, Puneet, so the same store, excluding top line was higher, it was in the mid-single digit in the quarter. And I think over time, adding these tests in the back half of '26 will help drive AUP growth as well.

And please, maybe building on this sort of opportunity to penetrate and how long -- again, coming back to the commercial strategy to protect expand, acquire done a really good job at protecting that sort of hole in the bucket is really something that has improved significantly and the NPS score sort of helps to drive that. But the expand elements of the strategy is very much around taking new products and sell into existing customers. That's an active part of the strategy. And we do that both on the pathology side of the business, for the TBMs were relevant, but very specifically, on the oncology side as well with the oncology cell specialists.

And as we bring on more and more new oncology practices, we typically lead in with a heme solution because that's where we differentiated. And then we use that as a basis to expand into solid tumor. It's difficult to give you a finite example of exactly how long it takes because every practice is different. But sales cycles here are relatively quick and as soon as we can put sort of interfaces in place to streamline workflows introduced things like PanTracer Pro, we expect that acceleration to -- or the speed to accelerate through '26 and into '27 as well. So the active part of the strategy, I'm very confident in our ability to pull that through based on past experiences.

And just very quickly on the leading with him and then entering with solid tumor into those accounts, could you just elaborate on sort of what do you see as the competitive landscape in tissue today and also liquid obviously, significant penetration in the market, multiple competitors out there. Maybe just give us a sense of how you think you're positioned today in the community setting versus the competition that you're seeing in the community study.

Puneet, I'd say that -- we haven't seen a marked change in terms of what's happening from a landscape perspective on the solid tumor side of things in the community setting where we are focused. As we've said before, we tend to bump into most of the normal competitors in different parts of the country, et cetera. We find our portfolio to be very well received based on the fact that we focused on actionability and a high degree of service. And that Tony shared earlier that 75% or 3 out of 4 new oncologists that try out tend to stay with us. And that's not only unique in the heme side of things that happens through on the solid tumor side of things as well.

So certainly, it is a competitive landscape, but I can't say I've seen any material changes. And we're seeing success on the liquid side of things as well, despite the fact that we're a late entrants. And I put that down to the fact that we have a broad portfolio and physician practices are looking to simplify their workflows and standardize on vendors, and that places genomics in a very favorable position.

Your next question is coming from Mason Carrico with Stephens Inc.

On MRD for the 2 indications that you submitted you plan on launching RaDaR for those indications ahead of MolDx approval to start building that volume stream? Or do you plan on launching [indiscernible] coverage?

Yes. As I tried to convey earlier, we're going to stay focused on the 2 initial indications of head and neck and the subsets of breast in the initial launch period. And then we will expand accordingly as we get MolDX coming through the system. There certainly would be enough on our plate in the short term with just those 2, and then we'll build in the latter half of the year.

Got it. And then on the 23% NGS growth in the quarter, could you provide any additional detail, I guess, on how much of that maybe came from the core existing business versus pull-through tied to the path line acquisition?

The bulk of it would still be the existing business with top line starting to ramp is how I would characterize it.

We're certainly seeing increased activity and penetration in the Northeast, but just the central gravity lies towards the other business. So therefore, that's where the lion's share is still coming from.

Your next question is coming from Mark Massaro with BTIG.

I'll keep it to one. Can you just speak about how we should think about gross margins in 2026? 2025 was obviously down when we put sort of the different increase in NextGen, I could see how there could be a path to gross margins increasing in '26, but -- however, there are some other headwinds as well. So can you just give us a sense if you think gross margins can grow this year? And any ability to quantify that would be helpful.

Sure. Absolutely, Mark, let me take this question. So most of our adjusted EBITDA margin expansion in the current year in 2026 is going to be coming from the gross margin. So we are anticipating the gross margins to expand at about like 100 basis points, and that's going to basically drop to the adjusted EBITDA margin expansion as well. And there are multiple reasons, of course, on the gross margin expansion as we kind of look at our price increases as well as we rationalize our portfolio to the high value, high margin products as well as the work that our labs are doing to be more efficient, being there.

So the gross margin is expected to improve at about 100 to 120 basis points in 2026, and most of that is going to be drop into our bottom line on the adjusted EBITDA.

Your next question is coming from Andrew Cooper with Raymond James.

Maybe first, Tony, I think you said you expected NGS growth to look pretty similar in 2016 to 2025. I know the target is 25%. You were almost there but not quite you have some of these tailwinds when we think about an tracer liquid coming on at least in the back half. I don't know if you'll count MRD in kind of that bucket with NGS when you think about the target, but how do we think about that trending through the year, especially in context of a sales force that will be essentially tripled or quadrupled by the time you're done adding?

Yes. I think as you rightly put it out, we showed about 23% for the quarter, about 22% year-over-year for NGS growth. I would expect that we should be able to do that. in 2026, if not, we do at slightly better than that. And that's going to be driven, as we say, by the momentum of the sales force that we have, the addition of into the portfolio PanTracer Pro. So we expect that we should do at least as well as we did in 2025. We opportunity debate PEP slightly. And much of that will be dependent on the timing of MolDX. And so I think that's a safe something we take into the year.

Okay. That's helpful. And then -- maybe just lastly for Jeff or Abishek or Tony, if you want to chime in as well. But when we think about that shift of growth being heavier volume versus ASP to the other way around and more ASP or AUP driving that growth? How does that change the way you think about that margin drop through over the longer term? It sounds like when we think about '26, there's certainly some reinvestment that's probably eating up a bit of the flow through that would be there otherwise. But how does that change the way you think about sort of the long-term trajectory from a margin perspective, if at all?

Yes, great question.

No, that's a great question, Andrew. And that's, I think, the key strategic question that we have with Neo that we have a broad range of portfolio here we have tested like $100, $200 AUP and then we had very high value tests on the NGS side. Now that also basically kind of differentiates us from some of the other specialty diagnostic labs as to how we are thinking about our volumes. Now when you look at our capacity when we're looking at our portfolio, we would definitely would want to be selling to the customers that are giving us the business, which is not only the low value, but also either there's a portfolio which combines the low-value test with a high-value testing and then that becomes more positive for us.

But if the client is only giving us a low order value trend, this is a natural shift that we do not want to be kind of taking those that particular business. And that's where you're looking at more carefully as okay, what are those tests that you would want to be in. So from the margin standpoint, in the long term, as we kind of shift towards a high-value, high-margin test, that will definitely be accretive to our gross margins as we kind of also going to be able to improve our operational efficiencies using our lab infrastructure.

This does conclude today's question-and-answer session. I'd now like to turn the floor back over to Tony Zook.

I'd just like to thank everybody for joining us on the call. And I'd also like to thank our roughly 2,400 teammates for their unwavering commitment to our mission and their hard work throughout all 2025. I'm very excited for the year ahead for our company, our oncology position customers and their patients. I look forward to our next quarterly update in April, we will report our first quarter results. Thank you again, and have a great day.

Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

Hello, everyone. Thank you for joining us today. My name is Zach Conte. I'm with JPMorgan's Healthcare Investment Banking team. It is my pleasure to introduce NeoGenomics. They'll be presenting. We're going to have a short presentation followed by a short Q&A. And I'll hand it over to CEO, Tony Zook.

Ready to begin? Well, welcome, everyone, and thank you very much for joining us here today to hear a little bit more about what's happening at NeoGenomics. With me today is Jeff Sherman, our CFO; and Warren Stone, our Chief Operating Officer. And what I'd like to share at the beginning, at Neo, I think we have a mission that drives our people to come to work each and every day with a degree of passion that I haven't seen across many organizations. We're a team of over 2,500 strong. We show up every day with this personal connection to cancer, determined to make it better for those who are currently in the fight because the truth is essentially everybody in this room will have a personal connection with cancer at some point in your life.

And we can make a significant impact on patients' lives when they're going through this very tough and trying time, and we take that responsibility very seriously. We truly appreciate that behind every test is a real patient going through a real challenge. And for us, we take the pride in being able to give them and their physician the information they need to plan the right course moving forward.

Now before I go any further, this session will be recorded. It will be available on our Investors portion of our website. And I'll start with the safe harbor. It's available on the Investors portion of our website if you'd like to read through it, but I'll be making forward-looking statements today. Actual results could differ materially from the forward-looking statements. We're all aware of that, which are subject to risks and the uncertainties discussed in our SEC filings, which are posted on our website as well.

So let's take a look first at Neo very broadly, and then we'll drill down further. First and foremost, what do you need to know? We are a pure-play oncology diagnostics provider and lab. Cancer testing, it's our sole focus. It's what we do. And as a result, we're able to deliver a best-in-class customer experience. We've earned a market leadership position in heme, which creates enhanced testing demand as pathologists and oncologists are looking to consolidate the number of labs that they work with. We focus exclusively in the community setting, where approximately 80% of patients are treated because patients want to remain close to their personal support structures.

We do have a comprehensive test menu spanning the cancer care continuum from diagnosis through to MRD, which we believe makes us a partner of choice among hospitals and community practices driven by operational simplicity that this can bring them. Our offerings across the continuum are evolving as we are now poised to enter the $20 billion-plus MRD market with RaDaR ST. And we have a strong financial profile that supports our growth initiatives. We delivered double-digit revenue growth and 9 consecutive quarters of positive adjusted EBITDA through Q3 of 2025.

So why do we focus exclusively in oncology? Well, look around the room. This is a startling statistic, but one that we should all be aware of. 1 in 2 men, 1 in 3 women are expected to develop cancer in their lifetime. Think about that. The good news is that with improved diagnostic capabilities, testing and therapy selection, recurrence monitoring, people are living longer than ever before with their diagnosis and even more people are being cured. The market is highly relevant. It's attractive. And unfortunately, because of this statistic, it's growing.

Now within the market, when you think about oncology testing, you might think of the big NCI-designated cancer centers, things like Memorial Sloan Kettering, MD Anderson. And for those of us who live in big cities, this might be an option for you to be able to access those types of centers for your treatment. But really, 80% of cancer treatment happens in the community. Why? Because patients choose to be treated near their homes. They're closer to their support system, cutting down on their commuting time, easily able to commute with their providers. And it's because of this preference to be treated in the community that we believe we're uniquely positioned to win in the oncology diagnostics segment. Our ambition at Neo is to enable physicians who practice in the community to deliver NCI-level care by providing exceptional diagnostic testing and services right where they practice.

Now historically, our market and our business has been focused in the diagnostic testing segment. This is where the breadth of our test menu has been, and it serves us very, very well. Despite the high penetration, we continue to grow market share in all applicable modalities within diagnostics. But to further accelerate growth, we're leveraging our position in diagnosis to penetrate and win in therapy selection and GS segments. That's estimated to be about a $13 billion market, which is only about 35% penetrated. So there continues to be ample runway for where NGS can grow and our products as a result.

And this year, we're entering the $20 billion-plus MRD market with our clinical launch of RaDaR ST, which we're going to talk about just a little bit later on. We're starting to see this MRD market evolve and the adoption ramp continue to grow. But most of our growth in 2026 will continue to come from our penetration into therapy selection.

Now big picture. Cancer prevalence is on the rise. The market is massive and growing. That's been established. So what do we, NeoGenomics, have to do to deliver long-term sustainable growth. We have 3 strategic pillars for success. The first, to leverage our leadership position in hematology diagnostics to expand into the solid tumor therapy selection and MRD markets. Second, we want to continue to evolve to meet the needs of our pathologists and oncologists in the community setting because, as I said earlier, this is where 80% of patients are going to be treated. And third, we will be making targeted investments to drive top line growth and margin expansion.

So let's drive into the first pillar just a little bit more, how do we leverage our leadership position in heme. Now before becoming CEO, I was on the Board for Neo for a few years. And we always talked about this leadership position in heme. But it wasn't until I joined as CEO and spent time in the field that I really began to appreciate how strong this relationship has been over years because we grew up in the community setting with community hospitals and pathologists, and it becomes a point of leverage for us moving forward.

From a market share perspective, our labs account for over 25% of heme testing across diagnostics and therapy selection, 25%. We like to say we grew up in hospitals, which is why we have these strong established relationships and connections with hospital pathologists and oncologists. Today, we have over 4,000 ordering accounts. And year-over-year, we saw a 15% growth in the number of physicians ordering 5 or more Neo tests. We estimate that approximately 40% of all active pathologists and oncologists have ordered 5 or more tests of Neo's. So while we're proud of that reach, it still means that over half of practicing providers are still available to us to bring over to the Neo platform.

Now to further strengthen our position in heme, we've launched the PanTracer family for therapy selection. This portfolio is designed for solid and liquid to work together, empowering oncologists with actionable genomic insights for confident real-time treatment decisions. Tests can be ordered independently or as complementary tests based on a patient's unique needs. But most importantly, from a business perspective, our new liquid biopsy test fills a gap in our portfolio that providers ask for, allowing them to further consolidate their vendors.

I think the most impressive thing about PanTracer tissue, the first test launched in the family, is the rapid growth in volumes. You'll see we doubled the volume from '23 to '24 and then again from '24 to '25 while continuing to grow AUP. The success of the PanTracer tissue demonstrates our ability to pull higher-value tests through the community channel.

Now we're preparing to equip our team with another tool in their bag. Following a favorable legal outcome, giving us freedom to operate, we're launching RaDaR ST later this quarter, tapping into a $20 billion-plus and rapidly growing MRD market. RaDaR ST has 2 indications approved for MolDx reimbursement, and we have submitted 2 additional indications. We believe approval for the additional indications, as you can see here, will double the number of patients eligible for RaDaR ST monitoring. At the same time, we're working our whole genome next-generation MRD assay. The IP for NextGen is entirely separate from RaDaR ST. We're working on product development now, and we believe we'll be generating data and a MolDx submission slated for next year and a potential clinical launch as early as 2028.

Not only do we focus in oncology, as I said, we focus in the community setting. To continue to expand our reach, we're evolving to meet the needs of pathologists and oncologists in this unique setting. We believe our offerings are appealing to the community oncologists as they choose to partner with partners that remove friction and enable confident treatment decisions under time, economic and operational challenges. We offer ease of ordering, especially as we ramp our EMR integrations, including Epic Aura, easy to interpret test reports, competitive turnaround times, easy-to-access medical expertise through our professional component offerings and our broad test menu spanning much of the cancer care continuum. We have a steadfast focus on our offerings and commitment to an exceptional customer experience. Our Net Promoter Score of 78 reflects strong physician satisfaction, and we're always aiming to improve.

At the end of 2024 and moving into 2025, we invested in our commercial organization, specifically our oncology sales specialists or OSSs. We added 35 people to this group who really target the community oncologists. And as these individuals got up to speed, we're seeing a quick uptake in NGS testing, accounting for a larger portion of our total clinical revenue as we increase our reach and frequency. Now the penetration does speak to the strength of our commercial channel as well. We launched 5 NGS products in the last 2 years. And even though we were a bit late to market than some of our peers with these products, we've still seen very strong uptake. PanTracer tissue highlighted earlier, was 1 of the 5 products. So I think this speaks to our breadth and strength of our menu and further to our ability to capture market share when we introduce new products.

We expect to add additional selling resources in 2026 to increase our reach and frequency and to support the additional indications for RaDaR ST that I highlighted earlier before. Simultaneously, we're implementing tools and solutions we believe will enhance the productivity of the entire sales organization. Now in parallel with our product and service offerings to grow revenue, we are making targeted investments to drive top line growth and margin expansion. I think there is a very strong financial discipline embedded throughout the organization. We're going to build on that, and we see plenty of opportunities for us to continue to reduce cost, grow revenue and improve margins. These are inherent in our operating leverage in our business today with a fixed cost footprint. Our only true linear cost is supplies. We have ample capacity throughout our labs for additional volume growth.

With our 5 new products, we have the opportunity now rather than grow volumes at any cost to say, let's grow the right volumes. We don't need to be dependent on high-volume, low-value tests. With our penetration of NGS now approaching 1/3 of our portfolio and RaDaR MRD testing coming online, we have the ability to be much more selective because we're seeing these really strong growth rates. We believe our 22% NGS revenue growth in 2025, even without PanTracer liquid biopsy indicates this should be a growth driver for us for the foreseeable future.

We're also getting price increases, which -- for our tests and seeing RCM initiatives take hold that help us get paid for the work that we do. And that's, of course, 100% accretive to revenue, gross margin and adjusted EBITDA. And then we have the operating efficiencies that we're working on like our LIMS improvement, which will allow us to have one common LIMS and retiring up to 8 legacy systems. There's opportunities for us to do the same thing in a number of different areas through automation and digital pathology. We're in the early stages of capitalizing on the LIMS integration and investing in automation and expect to see these benefits last for several years. So in summary, there's still ample opportunity for Neo to deliver accelerated revenue growth, improve gross margins and reduce our operating costs.

So let me summarize for you what we see as our core growth drivers. Our North Star will be continued execution on above-market NGS growth. We see this market growing in the mid-teens, and we're working to outpace market growth. We expect to do this through securing reimbursement for and ramping volume for PanTracer liquid biopsy. We also plan to launch RaDaR ST later this quarter, which will enable us to gain share in the clinical MRD market. And we'll work to expand on our 2 approved RaDaR ST indications with additional submissions to MolDx.

We also plan to grow our non-NGS modalities as well. As a pure-play oncology lab, we're working to see FISH, flow, cyto, IHC, all these core testing modalities continue to grow at least at market rate. Following the investments we've made in our sales force, we're going to leverage our new OSSs to further penetrate the community oncology audience segment with a focus on NGS products. We plan to use our acquisition of Pathline to increase our penetration in the Northeast region and drive share and pull through additional high-value NGS testing. And last, we'll continue our RCM initiatives to capture price benefits and make sure we're getting paid for the work that we do.

Now yesterday, at the start of this conference, we shared our preliminary Q4 and full year 2025 revenue. I'm really proud of the work that our team has done to execute on our strategy and to deliver these results. Preliminary Q4 revenue is in the range of approximately $190 million, representing 11% growth year-over-year and preliminary full year 2025 revenue in the range of $727 million, representing 10% growth.

So to wrap it up, we believe our unwavering focus on delivering a superior customer experience in the community setting, it's resonating in the marketplace. We continue to expand our menu of tests. Community oncologists and pathologists will continue to view us as a partner of choice for their cancer testing and send out consolidation needs. We do remain committed to innovation and operational excellence, which we believe will drive sustainable, profitable growth for our company and improve outcomes for patients.

So with that, I thank you for your continued interest in NeoGenomics and turn it over for questions.

Thank you for the powerful presentation. It's great to hear you guys had a great year and a lot of exciting news over the past year. First, I'd like to just kind of hit off on where you summarized at the end. You showed you had tremendous growth in Q4 and also 2025 overall. Do you see this continuing to drive in Q1 and in the foreseeable future?

Yes. We do see a lot of the growth drivers that we had in 2025 continue to be the same growth drivers in 2026 with a couple of additions. First and foremost, we do believe that we can continue to drive above-market growth with NGS. That is pivotal to success. We think the introduction of PanTracer liquid biopsy will enable that, and we see that as a ramp through the course of 2026. Obviously, the introduction of RaDaR ST into the MRD segment gives us another solid growth driver. That will be a build through '26, and that will really become more evident in '27 and '28 as you start to see that grow.

I've mentioned before, the strategic acquisition of a lab up in the New Jersey Pathline. We always said that, that would be an opportunity for us to grow our share and our presence in the Northeast because we can then offer our customers the response they want on their rapid tests, while at the same time, getting operational efficiencies for NGS pull-through through Fort Myers and our AV lab. So we continue to see that as a driver.

The maturation of our sales force. Now we'll get the full benefit of a year of them. So we think they'll continue to enable that growth that we've seen across the portfolio. And then the introduction of new OSS, I think will better prepare us for future launches of indications within RaDaR ST. And then the outstanding work that Jeff's team continues to do with RCM and price, we see all of these still as levers and growth drivers for us in '26. So we feel well positioned as we sit here today, and we see the opportunity to really perform well in 2026.

Perfect. And then kind of touching back on that for drivers in '25, like would you say that it was more volume or AUP that kind of helped drive the growth in 2025?

Yes, I would say it was actually both. So I would say we had very strong volume growth, both on reported volume and on a same-store basis throughout 2025. We also have continued to see our AUPs increasing. And so as we move more into NGS, we've seen good improvement on a sequential basis in AUPs throughout the year, continuing to focus on the RCM initiatives as well as helping to drive AUP. So it's really, I think, a combination of the organic growth, incremental volume from Pathline and then some of the RCM initiatives were all helping to drive growth throughout the year.

Perfect. And then you kind of touched on NGS right there. You said I think it was about 1/3 of your revenue. How do you see that going in the future?

We said before that we want to leverage our position in diagnostics, right? That is where our core strengths come from and that heritage of a strong presence in heme enables us to really serve the community oncology audience as we build and add to the portfolio. I think that has afforded us this really nice growth where we have seen these 5 products continue to grow and now representing about 20%, 25% of our business with just those 5 and NGS now more of 1/3 of our clinical revenue. And so when we look to what we believe we can do with above-market growth in NGS, you marry that with the addition of an outstanding product like PanTracer LBx, we think that, that is a growth driver for the foreseeable future for us. And so we would expect our penetration and ultimately, the result being a higher percentage of our portfolio from NGS and then you throw in MRD, we'll see that constant shift. And that is going to benefit us in a number of ways from AUP to margins to operational efficiencies that Warren and his team can drive throughout the labs.

Yes. We also noted on our total addressable market slide that the penetration rates are still relatively low. So penetration rate in the mid-30s for therapy selection and less than 10% for MRD. So I think just as the penetration rates increase, we're going to capture market share. Adding new products will allow us to capture market share. And I think our whole commercial strategy with our breadth of menu is going to allow us to continue to drive market share as well.

I think maybe just maybe last bullet point on that also drives a significant amount of operational simplicity because those 5 products, which 20%, 25% of revenue, represents a significantly smaller volume base. So that just drives simplicity from an operational perspective and obviously, simplicity drives increased gross margins and profits.

And then you had mentioned exciting launches upcoming in the new year. I believe it was Q1 for RaDaR. What else needs to be done ahead of that launch? And I guess, is there anything that you want to highlight before that?

Well, I'll let Warren color in the lines. I think that for us, penetration of the MRD market was another imperative for us. We saw that opportunity and believe it would provide a market for long-term sustainable growth. So obviously, with RaDaR ST coming in, we have already introduced it within the pharma segment of our business. We're now preparing for the launch in the clinical side. I think what Warren's team has been doing is preparing for making sure that this will be seamless for customers that we can, in fact, handle the volume in a very seamless way as we move forward. Obviously, all the training and capability work that happens behind the scenes preparing for a launch meeting with the sales force. So there's been no lack of work that Warren's team has been building. And I think something else that he's done extremely well over the last few years, we've created this framework that we refer to as operational excellence. And it wasn't evident at Neo in the past, where now we have very clear direction, very clear metrics of what we're looking for, everything from the product's target product profile to how it will be positioned to the launch metrics and execution to what Warren and his team expect from which decile to customers. So there's been a tremendous amount going on, and Warren could add additional flavor to that.

I'm not sure I can add too much to that. I think you covered a lot of the bases. I will say that I joined NeoGenomics 2022 and the launch of RaDaR was something I was super excited about. And obviously, it's taken us a little longer to get you for various reasons, but it represents a material opportunity for NeoGenomics in 2026 and beyond, not only with the 2 indications that we will launch with in head and neck HPV negative and a subset of breast, but also in terms of the additional indications that we've already submitted to MolDX. And hopefully, we'll see approval towards the back end of this year, too. I think it's a real inflection point for NeoGenomics.

And would you say that it's -- more of the revenue is going to come from clinical or from pharma?

Yes. I think in 2026, I think there'll be both clinical and pharma revenue and probably in a similar type of range as the clinical volume starts to ramp. As we get to '27 and '28, we clearly think it's going to be much more clinically driven.

And then there was a successful PanTracer launch. Do you see that, I guess, liquid biopsy will follow this route? Or do you have any color on that?

I think we're taking a very similar playbook in terms of how we've launched PanTracer liquid. I think the first thing I'd say is we actually introduced PanTracer liquid largely because a lot of the customers that use the tissue assay actually asked for the assay. They felt it was a meaningful gap within our portfolio within the community as they saw the utility for liquid starting to really manifest in cases where there was insufficient sample and no sample on the solid tumor cancer side of things. So that was really the -- one of the key drivers as to why we launched the product.

We followed a very similar playbook. We feel we have got a very competitive product with TMB and MSI and early indications have been very positive in terms of how both existing customers and how new customers actually adopted the assay. And one of the reasons for showing the sort of the trend from a PanTracer tissue perspective on the earlier slide that Tony showed was to give you some kind of an indication in terms of how we would think that the liquid assay would ramp as well. I think maybe the last comment...

Word on the concordance.

Yes. Maybe 2 comments I would make is, interestingly enough, we have seen the category as a PanTracer family. And so it's our solution for solid tumor therapy selection. We've seen the category as a whole group. Since we've launched liquid, we've seen an inflection point in terms of the growth rates of our solid tumor tissue as well, maybe showing the benefits of the portfolio effect and a lot of very, very positive feedback, certainly in lung applications where it's been used concurrently and strong concordance across the liquid and the solid tumor assay because it has the same backbone.

And then kind of taking a step back from a more macro perspective, do you feel like pharma will rebound in the upcoming year? How do you feel like the overall market will be going forward?

Yes. When we gave our guide in 2025, it was driven in large part when we had to give the revised guide on the erosion rate that we had seen in our pharma business. While it represents a relatively small portion, nonetheless, it was not insignificant, and it was a rapid erosion more than we had anticipated. And it masks in many ways the outstanding performance on the clinical side. Once again, we'll see that our clinical business, mid-teen growth. And it doesn't get the attention because we focus so much on that. And so we purposely saw this, and we said that's why we had to lower, and that's why we set the expectation of around 10%.

I believe that some of the macroeconomic issues, they're starting to get a little bit better, right? And there's not quite the same severity of headwinds that we had seen in the past. But nonetheless, there's still relatively long selling cycles here. And so I think the prudent, more conservative position would be that we should expect some continued erosion on the pharma side, perhaps not as significant as we saw in 2025, but it will still be there. And that means why -- we still look at this as kind of a 10% kind of growth story in the shorter term. And if, in fact, we see stabilization of pharma and due in large part to now the introduction of RaDaR ST, that could represent an upside for us. And so we want to speak with confidence. And so when we give our guide for '26 in February, we'll make sure to call these areas out. And so the investment community will be very aware of how we see our core assumptions and what we see as upside opportunities versus risk to the business.

Understood. And then could you touch on your Adaptive partnership? Is there -- how has that been going so far?

Yes, I'll go high and then Warren can get into more detail. One of the things that I've always believed that this is a tremendous strategic partnership for us. We see great value in being able to represent an outstanding heme MRD product. We often talk about the breadth of our portfolio and its ability to span the continuum of care. When we can represent an outstanding product like that from Adaptive, there is a halo effect to how customers see us and the offerings we make available. It also means that over time, our suite of products within MRD continues to grow. So we'll be in the unique position of having flow MRD. We have heme MRD with Adaptive. We'll have RaDaR ST. We'll have our next-generation ultrasensitive MRD. And all of these things become of great value to us, but one of the things we wanted to do is make sure we did it right, right? It had to work for customers. It had to work for Adaptive, it had to work for Neo. And that's what Warren and his team have been working on through these pilots. So perhaps you can speak in more detail to that.

Yes. I think the -- I think both organizations have been laser-focused on the customer experience here, sort of understanding the importance of that from a success perspective. And as a result, we've spent the better part of the second half of last year working through pilots, et cetera, initiated a number of them, both in terms of portal and paper-based requisition forms, but also through bidirectional interfaces. And we're starting to see some very positive traction. I think from a NeoGenomics perspective, one of the things that we look at other than sort of feedback from customers is the portfolio effect, particularly within COMPASS because that's the product that we're thinking because of the commonality from a sample type being bone marrow. And there's massive patient benefits in that they only have to be subjected to a single sample extraction versus 2, 1 for diagnosis and 1 for clonoSEQ. And that's been a massive improvement. And we have seen -- in the quarter 4 of 2025, we have seen improvements in sort of growth rates of couples. So there's some good leading indicators, particularly within customers that we've run the pilot with.

And then kind of touching one question on financials. Could you talk about your strategy for your '28 convertible notes?

Yes. So clearly, they're due in January of '28. So we're really focused on having a plan in place that we can execute when we think the market timing is appropriate in 2026. So we finished the third quarter with over $160 million of cash. We expect to be producing positive free cash flow in 2026. So we think we'll be well prepared to deal with the convert throughout 2026 as we look to have a plan in place with that, that we can execute on when we think the timing is right for that 2028 maturity date.

It's clearly top of mind for us. It's top of mind for the Board as well. And so we will have the plan. And as Jeff said, we'll be ready to execute when we think the time is right.

Yes. Any questions from the crowd? Well, I guess on that, is there any closing words that you guys have to say, and this has been a very powerful presentation and a lot of great news for NeoGenomics.

Yes. I would say for us, again, I mentioned it earlier, but our strategic levers for us, we're very focused on what we need to achieve. And that, first and foremost, we need to leverage our strong position in heme to enable even additional growth in therapy selection and MRD. Those markets are strategic imperatives for us. I could tell you that every day, we wake up with the ambition of winning the customer experience each and every day. We don't take that lightly. We know that you earn that confidence from your customers every day. And so we tend to look at the world through the eyes of a practicing community oncologist and what can we do to take friction out of the system, make life easier for them, everything from ordering to reports, whatever it takes for us to continue to win because that for us is where we drive our competitive stickiness. It's a combination of the portfolio and that customer experience, and that becomes watchword #1 for us.

And we are in a position now, I think because of all the hard work that the team has done in the past, we're well positioned now to make selective investments where we can drive growth. And so getting that balance right that we continue our financial discipline that don't miss the opportunity that's ahead of us for additional indication growth, for example, with RaDaR ST or for next-gen MRD. So selective targeted investments to drive additional growth and the sales force expansion as well. So we're excited about what's ahead of us. We're looking forward to it, and we appreciate the time.

Thank you all. Thank you very much.

Thank you.

Thank you.

Good morning, everyone, and welcome to the NeoGenomics Third Quarter 2025 Financial Results Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Priya Vedaraman, Senior Vice President of Finance at NeoGenomics. The floor is yours.

Thank you, Jenny, and good morning, everyone. Welcome to the NeoGenomics Third Quarter 2025 Financial Results Call. With me today to discuss the results are Tony Zook, Chief Executive Officer; and Jeff Sherman, Chief Financial Officer. Additional members of the management team will be available for the Q&A portion of our call.

This call is being simultaneously webcast. For reference, concurrent with today's call, we posted a short slide presentation in the Investor tab on our website at ir.neogenomics.com. During this call, we will make forward-looking statements regarding our future financial and business performance, business strategy, the timing and outcome of reimbursement decisions and financial guidance.

We caution you that the actual events or results could differ materially from those expressed or implied by the forward-looking statements. These forward-looking statements made during the call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Please refer to the information disclosed on the safe harbor statement slide in the deck posted on our website as well as the information under the heading Risk Factors in our most recent Forms 10-K, 10-Q, and 8-K that we filed with the SEC to identify important risks and other factors that may cause our actual results to differ materially from the forward-looking statements. These documents can be found in the Investors section of our website or on the SEC's website.

During this call, we will also refer to certain non-GAAP financial measures that involve adjustments to GAAP results. The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available in the press release we issued this morning and in the slide deck available in the Investors section of our website.

I will now turn the call over to Tony.

Thanks, Priya. Well, good morning, everyone. Thank you for joining us today. I'll begin with a discussion of Q3 highlights and key business growth drivers before turning the call over to Jeff for a deep dive into the financials. We'll then open the call for your questions.

During the third quarter of 2025, we again delivered record clinical volumes and revenues while making meaningful progress advancing our NGS and MRD long-term growth initiatives, including securing a favorable court ruling in our ongoing litigation with Natera that paves the way for a full clinical launch of our RaDaR ST MRD assay. I'll cover these initiatives in more detail shortly.

Taking a step back, for those who may be new to the story, having spent much of my first 2 quarters as CEO, engaged in conversations with key stakeholders, I am as optimistic as ever about the significant opportunities that are in front of us as a leader in cancer testing. Importantly, we continue to differentiate ourselves in the community setting with both hospitals and oncologists, where approximately 80% of all cancer care is delivered.

We've built a geographically balanced lab network that allows us to be responsive to customer needs, including offering some of the fastest test turnaround times in the industry when faster, more accurate treatment decisions can have a material impact on patient outcomes.

Our recent acquisition of Pathline, a New York State-approved lab based in New Jersey, gives us a meaningful presence in the Northeast, which is the #3 cancer care market in the U.S. We believe the addition of Pathline allows us to offer significantly faster turnaround times, a larger and relevant New York State-approved test menu and an enhanced physician experience in the Northeast region, where we have historically been underpenetrated.

The integration continues to proceed according to the plan that we communicated when we announced the transaction in March, including the validation of critical turnaround time-sensitive assays, which was completed during the third quarter. We remain positive about the impact that the acquisition will have in accelerating our growth in the Northeast, and we're on track to capture operational efficiencies and synergies that we anticipate will be accretive to profitability beginning in 2026.

Together with our world-class commercial team, we have deep relationships with hospitals, cancer centers, and oncologists across the country. We're winning the customer experience by enabling precision oncology in the community setting, where adoption of next-generation testing has historically lagged behind NCI-designated cancer centers.

Our customers increasingly view us as the partner of choice for all of their testing needs as their patients advance along their cancer care journey. We offer one of the broadest menus in the industry with more than 500 tests focused solely on oncology. Our menu spans everything from diagnostics to next-generation sequencing for therapy selection to MRD for cancer recurrence and monitoring. This makes Neo an ideal partner for institutions and practices who are looking to consolidate send-out testing to simplify operational workflows and improve patient experience.

The therapy selection and MRD markets represent more than $40 billion of addressable market opportunity, both of which are growing rapidly and are relatively underpenetrated. Needless to say, the ongoing investments that we make in R&D as well as the potential BD partnerships are focused on these areas. This is particularly true of MRD, where we think we can create significant value while introducing innovation to the cancer testing market where it's needed most in the community setting.

We also remain committed to our next-gen MRD research program, focused on generating IP that is entirely separate and distinct from our RaDaR portfolio. Given our broad menu and strong brand recognition in the community setting, coupled with a competitive MRD test, we believe we will capture market share over time as we add additional indications to this modality.

While Jeff will provide a detailed review of our financials in a moment, I'd like to hit a few highlights from our third quarter. Our clinical business continued to perform well, driven by volume and share gains in key segments. As expected, nonclinical revenue declined in the quarter due to lower revenue from pharma and biotech customers.

Total revenue for Q3 was $188 million, representing double-digit growth of 12% year-over-year. Our clinical business continued its robust growth, generating revenue growth of 15%, excluding the Pathline acquisition. The clinical performance was driven by effective execution of our commercial strategy: Protect, expand and acquire.

In the third quarter, we again saw a sequential improvement in AUP, a record quarter for test volumes and NGS revenue growth of 24%, well ahead of the low to mid-teens NGS market growth rate. The 5 NGS products launched in 2023 contributed 24% of clinical revenue in the quarter. We continue to see demand for our non-NGS modalities as well with all modalities growing above market, which represented -- which resulted in record volumes, up 10.4% versus prior year on a same-store basis.

The nonclinical portion of our business accounted for less than 9% of our total revenue in the third quarter and was down from the prior year, consistent with our expectations.

Turning now to our RaDaR ST test. In August, the District Court for the Middle District of North Carolina granted our motion for summary judgment that all of Natera's asserted patent claims are invalid for claiming an eligible subject matter. The court dismissed Natera's claims against NeoGenomics with prejudice and entered a declaratory judgment of invalidity of both of Natera's asserted patents. The ruling paves the way for us to broadly commercialize RaDaR ST, formerly RaDaR 1.1.

We launched RaDaR ST for biopharma customers in Q3. And while some of these efforts could result in bookings in Q4 of '25, the lead times necessary to obtain samples make it more likely that we'll begin recognizing revenue from biopharma customers in 2026. We have received MolDX approval for RaDaR ST in subsets of head and neck and breast cancer. We're preparing for a robust launch of this important assay in the clinical oncology setting in Q1 of 2026.

We estimate that MRD cancer surveillance and monitoring represents a $30 billion addressable market, growing at a 30% CAGR. And with the market penetration of less than 10%, we believe we are well positioned as the cancer testing partner of choice in the community setting to capitalize on this lucrative market and deliver a differentiated and integrated MRD solution to our oncology customers.

In parallel with our RaDaR ST launch preparedness activities, we continue to focus our R&D investments in next-generation MRD, demonstrating our long-term commitment to the MRD space as well as complementary targeted partnerships that allow us to fill in MRD product gaps that we don't currently address in an effort to deliver a unique industry-leading MRD portfolio to the market.

Now turning to PanTracer LBx, our liquid biopsy genomic profiling test that delivers comprehensive clinically actionable insights from a simple blood draw. PanTracer LBx is a noninvasive blood-based test that analyzes circulating tumor DNA to identify key genomic alterations that inform treatment decisions in patients with advanced stage solid tumors.

PanTracer LBx, together with our PanTracer tissue test, form a comprehensive portfolio, capable of delivering a holistic genomic picture of the patient in support of therapy selection. With an average turnaround time of just 7 days, PanTracer LBx empowers real-time decision-making.

Recall that last quarter, we elected to delay the commercial launch of PanTracer LBx so that we could incorporate learnings from our evaluation assessment program to improve the product profile. In preparation for a full clinical launch, we allowed select physicians to use the assay on a limited basis ahead of commercial availability. The EAP, which was very well subscribed and help us further enhance the assay clinically and optimize the launch by testing and identifying the opportunities to streamline logistics, reporting, and customer support.

With the benefit of valuable lessons we garnered from our EAP, we launched the product in late July, 3 months later than expected. Based on the interest we're seeing, I believe the delay allowed us to introduce a better product, which will further support the strong NGS volumes we are capturing this year and position us well for continued growth in 2026. We continue to work with MolDx on our PanTracer LBx submission, and we'll provide additional updates as they become available.

As it pertains to our full year 2025 guidance, based on the strength in our clinical business and expected performance in our nonclinical business that I just reviewed, we are reiterating the revised guidance for consolidated revenue, adjusted EBITDA, and net loss that we provided last quarter.

I'm incredibly optimistic about our future, particularly as we continue to innovate in the large and rapidly growing NGS and MRD markets and further leverage our leading presence in the community setting, where as much as 80% of cancer care is delivered to patients.

And with that, I'll hand it over to Jeff to further discuss our results from the quarter.

Thanks, Tony, and good morning. Third quarter total revenue grew sequentially by 4% from Q2 and increased by 12% over prior year to $188 million. Total clinical revenue continued with strong double-digit growth and increased by 18% from prior year. This strong clinical growth was partially offset by nonclinical revenue climbing by 27% versus the prior year, driven by weakness in the pharma revenue Tony spoke about.

Adjusted gross profit improved by $5.2 million or 7% over prior year. Adjusted EBITDA was $12.2 million, the ninth consecutive quarter of positive earnings. Clinical volumes and revenues continued with robust growth in the quarter. Total test volumes increased by 15% in the third quarter with AUP growth of 3%. Same-store revenue without contribution from Pathline was $167 million, representing growth of 15%, driven by a 10% increase in test volumes and a 4% increase in AUP.

We are continuing to see strength across our portfolio with above-market growth rates across the modalities we offer. NGS revenues grew by 24% over prior year in the quarter and accounted for 33% of total clinical revenue. Year-to-date NGS revenues grew by 22% over prior year.

Average revenue per clinical test increased sequentially from Q2 by $15 or 3% and was up by 3% from prior year. Excluding Pathline, AUP increased by $17 or 4% from Q2 and was also up 4% over prior year. A larger percentage of higher-value tests, including NGS as well as recent managed care pricing increases are helping to drive higher AUP.

Total operating expenses in the quarter were $107 million, an increase of $11 million or 12%. We recorded an additional $7 million in impairment charges related to the planned sale of Trapelo with the balance of the cost increase due to higher compensation costs driven by the expansion of the commercial sales team.

Cash flow from operations was a positive $9 million in the quarter, and we ended the quarter with total cash of $164 million, up slightly from Q2. Our balance sheet and expected cash flow will enable us to continue to invest in our business to drive organic growth, increase operating efficiencies, and fund future business development opportunities, including licensing and partnerships.

We continue to see traction from the investments we have made to expand and enhance our commercial organization with our strong test volume growth. The LIMS project remains on track, and we expect to deliver operating efficiencies in 2026 and 2027 through the consolidation of multiple LIMS systems and reduction in redundant operating costs as well as streamlining our lab operations. We remain committed to driving long-term shareholder value through targeted investments in the business and improved operational execution.

As Tony noted, we are reiterating our full year guidance that we updated in the second quarter. We expect full year consolidated revenue will be in the range of $720 million to $726 million, representing growth of 9% to 10% over full year 2024. We anticipate adjusted EBITDA to be in the range of $41 million to $44 million, representing growth of 3% to 10%. And we expect full year net loss to be in the range of $116 million to $108 million, representing an increase of 37% to 47% as compared to our full year 2024 net loss of $79 million. We will release our 2026 guidance when we report our full 2025 full year earnings in February 2026.

With that, I'll turn the call back to Tony.

Thanks, Jeff. To recap, during the third quarter, we again delivered strong clinical volumes and revenue while advancing NGS and MRD initiatives that we believe will contribute to accelerating growth in 2026 and beyond. We believe our unwavering focus on delivering a superior customer experience in the community setting is resonating in the marketplace. And as we continue to expand our menu of tests, community oncologists and pathologists will continue to view us as a partner of choice for their cancer testing and send-out consolidation needs. We remain committed to innovation and operational excellence, which we believe will drive sustainable and profitable growth for our company and improve outcomes for patients.

Thank you for your continued interest in NeoGenomics. Operator, this concludes our prepared remarks, so please open the line for questions.

[Operator Instructions] Your first question is coming from David Westenberg of Piper Sandler.

Congrats on a strong quarter, particularly with that clinical revenue growth. So how do you feel -- I'm going to start with Jeff. How comfortable do you feel with the guidance? And can you remind us what's the latest on PanTracer liquid? Is there any chance you could see some revenue from it this year? And I just want to confirm that, that was removed from the guidance, so if we do get revenue from it this year, it would be upside to your estimates.

Yes. Thanks, Dave. So we gave thoughtful guidance for the year in Q2. We believe we had a good third quarter and believe we're in a good position to meet Q4 expectations. In terms of liquid, Tony was pretty clear that last quarter, that we did not need approval for liquid biopsy from MolDX to hit our guide, and that is still the case as we look at our performance now in the fourth quarter.

And now I know you're not giving '26, but you gave a lot of good commentary on MRD and you hinted that you will be a contributor to revenue in '26. Can you give us a sense for when you expect certain reimbursements? I mean I know there's some competitive stuff you want to be a little bit careful with. But just in the sense of the magnitude and timing of some of those, what you're going to get in MRD?

And then can you give us a sense on how much commercial muscle you'll put behind these launches? And just as a reminder, I mean, I think with breast, you have a lot of expansion indications. Do you think could you get expansion in that indication this year, so -- next year? And again, congrats, and I'll hop off after this.

Thanks, David. It's Tony. I'll take a crack at a couple of these, and then certainly, I can look to Warren to add a little bit more color as well. First, on '26, as you appropriately say, we'll talk '26 in 2026, but I will give you a sense of what we see as some of the growth drivers that we anticipate for 2026. And then I will pull that back to your conversation around liquid biopsy and RaDaR ST.

So at the highest level, you should expect the growth drivers for '26 to be in large part, quite similar to what we had in 2025. We expect our ongoing strong clinical performance relative to volumes to continue. And so that will certainly be a growth driver for us. We expect ongoing NGS growth rate. As Jeff commented in his remarks, we had 24% growth in revenue in NGS, and that without the full ability of PanTracer LBx included within that mix. And so we have every expectation that NGS will continue to be a growth driver for us.

As you rightfully mentioned, PanTracer LBx combined with the PanTracer family, we believe, will be drivers moving forward. I can't really speculate as to the timing of LBx reimbursement. But nonetheless, we see early signs of a positive uptake for the product. And we believe once reimbursement is secured, that will be a growth driver for us. We'll see revenue build through the course of the year with obviously more of that becoming evident in the second half.

The sales force that you mentioned, we are beginning to see the full benefit of now the sales force expansion efforts that we have put in place, and we expect that to be a continued driver for us. And then on the RaDaR ST front, we've already launched RaDaR ST in the pharma sector. We're having good early conversations with that. As you might expect, the lead times on that book of business takes considerably longer. So we would expect kind of a slow revenue build in 2026 and most of that revenue becoming evident in the back half of 2026.

And with MolDX approval with the current indications, we expect a full launch of RaDaR ST in the clinical setting in Q1. That will also be a build for us through the course of the year. And of course, there's still Pathline in our RCM initiatives. And so we still see a healthy list of growth drivers for us in '26.

And relative to sales force, I think Warren and Beth Eastland and their teams have done a phenomenal job at onboarding the existing representatives that we have. I will tell you that we still believe that that is the right size for the indication mix that we have. But as we continue to invest and we will invest in new indication flow, you should probably believe that we will be looking at options to upsize that sales force as it is under-indexed, especially in the oncology side of our sales force. But we don't anticipate that coming on too early.

That will be, again, a build probably more in the latter half, indicative of the new indications that we will be submitting and when they might come online, which will be more than likely second half. So that's kind of a high level of the drivers. And again, we'll get more detail on these things in '26 when we talk around February time. Okay, Dave?

Our next question is coming from Andrew Brackmann of William Blair.

Maybe on the NGS side of things, so the growth rates here imply that you're obviously taking share or growing the market or some combination of both. Can you maybe just sort of talk to us about where you're seeing the most win on the customer side of things? What types of accounts where you're winning? And then also on the product side, what products are you leading with? Where you're able to sort of capture share and begin to capture some share there?

Yes. Thanks, Andrew. Certainly, as you said, the growth rate of 24% implies a pretty meaningful share capture. Most of that business in quarter 3 was coming out of the community setting and largely from the oncology practice. Certainly, we still see opportunity within the community hospital setting. But as we onboard new practices, bring on new oncology ordering physicians and we see repeat order rates, we're seeing a compounding effect. So largely coming from that community oncology setting.

In terms of focus areas, certainly, the PanTracer Family has been a core focus for us. We've launched liquid, as we've mentioned, but at the same time, we've introduced the PanTracer family, which includes PanTracer Tissue, PanTracer Tissue plus HRD and obviously, PanTracer Liquid, which is our solution for therapy selection on the solid tumor side, and we're seeing really strong growth within that category as we make that a priority. But we're certainly not losing sight of sort of what got us here, which is our heme NGS portfolio, and that continues to grow very effectively as well. But there's a subset of 5 to 7 products, which are ultimately our key focus area from a therapy selection perspective, and all of them are seeing attractive growth.

And then just from a potential expand and acquire perspective, from an acquirer, new oncologists coming on board, we're seeing a good lift from recently brought on oncologists. In 2025, we track that closely, and we're seeing reorder rates and higher penetration amongst that. So we are seeing success in the acquire aspect of our strategy as well.

I guess, Andrew, the last tap-off point, I think Warren was just hitting on it towards the end. NGS just strategic for us, is extremely important that we continue that penetration into the therapy selection markets. As Warren highlighted, the top 5 products now represent almost 1/4 of our clinical revenue and NGS in totality is almost 1/3 of our total clinical revenue. And so it aids us in AUP and a whole lot of other areas. And so it's going to be a continued point of emphasis for us moving forward. So thanks for the call.

And then if I could follow-up, just as one other question here. On the LIMS rollout, and I also think that you're integrating with Epic in some accounts. Obviously, those are multiyear processes to roll out here. But anything you can maybe share with respect to benefits that we should start to see from these initiatives into 2026, just in practical terms, what does this do for your business?

Yes. Warren and I will tag team on that one, Andrew. I would say, first, from an organizational perspective, you're going to hear me speak quite a bit about ongoing need for simplification across the organization. I think that the model that we have today with multiple locations and, unfortunately, multiple LIMS systems, it works against us in that regard.

And so moving towards a common LIMS program, it aids certainly within the organization, not just the lab team, where they'll be able to be able to see where a particular testing at any given time along the continuum. Organizationally, as you say, we can retire 8 LIMS systems that were in place prior to that. So there's certainly a cost benefit. And then across other parts of the organization as well because in order to kind of offset the complication of multiple LIMS systems, we do a lot of things in other organizations that require a bit of a heavy lift that I think the LIMS system provide some efficiencies for as well.

And so I think the early view is we should start to see some of these efficiencies coming through in the latter part of '26 and the later -- the better benefit being more evident in '27 and '28 and beyond. But it is just one step of many relative to simplification that we think could help us from a contribution perspective. And now Warren to give a little added color.

Yes. So let me start with the Epic, Andrew. So first of all, I will start by saying we have over 340 interfaces in place already today. Some of them with Epic already, but we're establishing the Epic Aura solution, and that will go live towards the end of this year, and we'll see fairly rapid customer onboarding in early part of 2026 and beyond.

So excited about the acceleration nature that the Epic Aura solution will bring to us. And we've seen very strong sort of revenue growth and ongoing adoption when we put interfaces in place in general, and we believe it will be the same with Epic Aura. So certainly, that's a key strategy for us moving forward and enables growth and stickiness.

Coming back to the LIMS side of things, as Tony said, I think a strategy to simplify, we have sort of 5 key priorities, operational simplification, and margin expansion, one of which is being LIMS. I'll touch on 2 of the benefits that I anticipate us seeing value in 2026.

The first one is our ability to be able to proactively equip physicians, ordering physicians and practices to understand sort of test status and more particularly the ability to do add-ons, et cetera, that they can do themselves versus having to come to customer service. So just ultimately creating a more seamless experience for the ordering physician or the practice, so to speak. That's one area.

The second one is the LIMS system we're putting in place has sort of AI integrated into it, and it will allow us to identify areas of, I'm going to call it, leakage, productivity leakage within our workflows, and we can identify this and obviously look to streamline the workflow to iron out those areas that sort of lack or have opportunity for productivity. So it really is going to deliver insights to our workflow that we don't have today that will allow for further productivity.

Our next question is coming from Mason Carrico of Stephens.

On your NGS business, you've called out share gains. You guys often quote NGS revenue growth. But I was curious if you'd be willing to give us a bit of insight into how NGS volume growth has trended, just to give us a better view on gains. So when we look at NGS revenue growth, 24% this quarter, I think 23% last quarter. How much has been driven by volume versus ASP? Because I assume you guys are benefiting from ASP to some degree as coverage expands for those assays.

Yes. We haven't disclosed the volume per se, but I would say it is more volume driven. There is some AUP growth, but it's more volume-driven than AUP growth. And I think as we're continuing to see penetration there and getting the ability to be -- access our strong commercial channel, I think that's where we're seeing that volume uptick. I think bringing on the liquid, we're actually seeing good uptick between the 2 of them as well, liquid and solid. And so I think we're well positioned to continue to get those gains.

And when you think about revitalizing growth within your pharma business, could you just talk about how much of that is in your control versus how much relies on a snapback in spend across the broader sector? I guess what do you view as kind of the key internal initiatives that you'll need to execute on to reaccelerate growth in that segment?

Yes. Mason, I'll take a crack and then Warren again could add additional detail. I would say that for us, a big part of the opportunity lies in the portfolio and bringing that portfolio forward. And so we have now the opportunity to represent products like Paletrra. We have RaDaR ST now available to us within the Pharma segment and of course, the liquid biopsy and PanTracer family. It affords us opportunities to have conversations and get a little bit more relevant in those conversations as well.

As I said to you before, I think a lot of those conversations are generating interest, but because of the lag times, I would still expect that some of the challenges that we see in our business in '25 will continue into 2026. And so we see a return to growth opportunity in '27 and anything that would lead that to happen a bit faster would represent upside.

As far as things in our control, there are things still in our control, and that's a heavy focus on execution excellence, and we have onboarded a leadership team that is taking the bull by the horns. And I think that part is very much in our control to drive the right conversations with the right customers. And that, I think, is something that we acknowledge that we had to improve upon. I'm pleased to see that that action is taking root across the organization. With that, I'll turn to Warren to add any other color.

I think, Tony hit most of the high points. I'd say that certainly, we're preparing our execution so that we can offer an attractive value proposition to our target customers in the biopharma space. Certainly, the inclusion of RaDaR has made us a significantly more attractive partner, which is enabling access for us to focus on both RaDaR, but other sort of high-value products, NGS, Paletrra, et cetera.

So we're certainly gearing our commercial organization around that focus, coupled with underpinning that with a sound customer experience, which is, again, a key buying driver for pharma sponsors. From a market perspective, certainly, we're going to continue to work to execute effectively. As the market rebounds, we feel that there will be a compounding effect in the recovery of the business.

But this is a long sales cycle product area. And so just to reiterate what Tony said last quarter, we expect pharma to be soft in Q4 as well as throughout 2026 as well.

Our next question is coming from Dan Brennan of TD Cowen.

This is Tom on for Dan. Congrats on the quarter. Just a question now on what is driving the acceleration in your base clinical business? It looks like it's ticked up on a volumes basis this year versus prior years. The base clinical -- the non-NGS business. What is driving that? Is that better bundling? Is that better turnaround times to your point? This is a business that everyone thought would be kind of cannibalized quite aggressively by NGS. So I just want to understand how you're driving that growth and how sustainable that acceleration kind of could be going forward?

Tom, thanks for the question. I think a couple of facets I'll highlight here. First of all, I would again come back to effective execution of our protect, expand, and acquire strategy. We continue to do a great job of protecting existing customers. And that's sort of driven to just continuous focus on customer experience, whether that be from an operational perspective or just end-to-end as we look at it from requisition to results. So protect has really been a key factor. But we're seeing accelerated wins on the expand side and the acquire side of things.

And I attribute that to 2 aspects. First and foremost, it's new products that we're bringing into the portfolio, and we speak significantly, obviously, about the NGS side of things, but don't forget about products like Claudin 18 and c-MET, which have been critical sort of pillars to actually round out our offering. So new products is certainly a key driver.

And I think lastly and very importantly, we communicated in Q4 of last year around the sales force expansion and sort of said that this was going to be a 6 to 9 months sort of ramp to productivity. And what you're seeing right now is just follow through on exactly what we had said.

We're starting to see increased productivity from those added sales resources, which are focused on the protect, expand, acquire strategy and the new products we're bringing to market. And these things are operating in concert with one another, delivering the type of numbers that you reflected on.

Yes. The only thing I would add to that is even with record volumes, our operational execution and turnaround times continue to improve. So that remains kind of a vital component of our go-to-market strategy for retaining and growing and expanding business.

Great. And then just one follow-up on kind of the launch of PanTracer into next year and just trying to scope out the potential for acceleration there. So should we be treating this as kind of 2023 all over again? Or is the sales force now appreciably larger? Should we expect a larger acceleration given this is quite a hot area in general in oncology diagnostics? So just anything to help frame your expectations versus your kind of solid tissue launch in 2023 would be really helpful.

Yes, certainly. As an organization, we've matured since 2023. We've also expanded commercially as well. And so I think using 2023 as sort of a proxy would probably be a good starting point at this junction and probably layering on some additional factors like the sales force expansion would be a way to look at it.

And the majority of the sales force expansion was in the community segment. So that really positions us well to have the coverage we need for these new products.

Our next question is coming from Subu Nambi of Guggenheim Securities.

This is Thomas on for Subu. Maybe I can ask both upfront. So first, are you still expecting stronger performance in the data business on the nonclinical side in fourth quarter? And maybe just some color on why that should show strength based on what you've seen so far this year? What you're seeing in the funnel to be comfortable with that?

And then second, can you just talk specifically for clinicians in the community setting on how RaDaR has been received following the favorable summary judgment? What's the chatter like there?

Yes. On the data business, Q4 is historically the strongest quarter in that business. That business actually did grow in the third quarter, double-digit growth in the third quarter. And so we are expecting that business to see sequential growth over Q3 and the fourth quarter.

Yes. Again, I just want to reiterate that we have not clinically launched RaDaR as yet in the clinical setting. However, obviously, the news with regards to the outcome of the summary judgment has certainly circulated through the community oncology setting. And I'd say the vibe is increasingly positive about the fact that we can reenter the market. Again, it comes back to the fact that we believe we have one of the most sensitive assays in the market, but also the portfolio effect, the ability to consolidate all of your needs within the community oncology setting within a single vendor. So this helps round out that sort of value proposition for us.

Yes. I think that's an important point, just to reinforce. We've always said this preferred partner of choice in the community setting, and that speaks to a balance of breadth of portfolio and innovation as well. And we look at that breadth of portfolio beyond just heme of solid tumor and MRD, we look at breadth of portfolio at MRD as well.

And so for us to be in a position to be able to offer Flow MRD, have an outstanding NGS partner MRD with Adaptive and now RaDaR ST. And don't forget, we're going to continue to invest in our next-gen MRD program. So it's a suite of products that also fits well into our overall strategy. So I believe as that becomes more evident to our customers, the chatter will increase. Thanks for the question.

Our next question is coming from Yuko Oku of Morgan Stanley.

Given that IMvigor011 trial demonstrated how incorporating MRD testing can enhance probability of trial success, are you seeing an uptick in interest from pharma partners in integrating MRD into their clinical trial designs?

And then a separate follow-up. Could you provide an update on an Adaptive partnership? And what are some of the key learnings and feedback from the pilot so far?

Yes. So coming back to sort of pharma interest, I would say that pharma interest has been robust ever since we launched the product back in August of this year. Certainly, our first targets were prior users of the assay because of their familiarity, et cetera. But we've rapidly expanded that. We were recently at the ESMO conference, which was in Germany late last month or early this month. And again, very, very strong interest with regards to the assay for multiple purpose, but also from an endpoint perspective, as you articulated. So we're encouraged by the early signs in terms of the pharma sponsor interest with regards to MRD.

Sorry, what was your second question?

Adaptive.

Adaptive. Yes. So we continue to progress very favorably with Adaptive. We started a pilot initiative in the third quarter. And really, this was just to sort of understand the operational workflows, et cetera, because both organizations are very focused on delivering a sound customer experience, and we continue to expand that pilot into -- in 3 distinct phases. We're rolling out the first phase of the 3-phase initiative now holistically in the fourth quarter and Phase II and Phase III will happen quickly in 2026.

Our next question is coming from Tycho Peterson of Jefferies.

This is Lauren on for Tycho. Just going back a little bit to the rebounding growth in the pharma and nonclinical setting, likely more of a '27 event. For '26, how are you seeing RaDaR adoption evolving in pharma partnerships versus the clinical setting? And then in terms of kind of the phrasing of partner of choice you've been using for community oncologists, what are some of the specific investments or initiatives that are kind of reinforcing that position?

So I think we are -- we're certainly expecting to see revenue on the MRD side of things in the pharma space for 2026. And certainly, that would sort of go a long way to address some of the other sort of headwinds we've been experiencing. We'll obviously look to quantify that as part of the guide when we speak about that next year, but certainly expecting pharma revenue for MRD.

In terms of your second question, it's multiple factors. I think first and foremost, it is around the portfolio and making sure that as we look to be the partner of choice to the community setting, it's having the most relevant portfolio, which a big focus of ours has been on ensuring we've got the right therapy selection portfolio. And we believe that the PanTracer family brings that to the table now, along with key sort of add-on sort of testing, c-MET, Claudin 18 that sort of rounds out our larger portfolio across diagnosis and therapy selection. Now we have MRD as well. And as Tony mentioned, it's not just RaDaR ST, it's the partnership with Adaptive. It's the fact that we have Flow MRD on the heme side as well.

But in addition to that, it's the work that we're doing from a bidirectional interface perspective. It's the work we're doing around customer experience because those are the 2 areas which are sort of critical buying drivers. We hear over and over again that these community oncology practices are looking to remove friction from their practices, so they can focus on sort of top of license type activities and they look for vendors that offer this frictionless experience. And we believe the combination of consolidating the oncology send-out requirements to a single lab along with best-in-class customer experience makes for a very, very attractive value proposition.

Yes. I just think overall, from -- if you go back historically, when we were on the market for a few years with RaDaR Pharma, we hit $6 million, $7 million a year after a couple of years. So there will be a ramp for pharma in RaDaR as we're kind of reengaging in the market.

And our next question is coming from Puneet Souda from Leerink.

How are you thinking about the AUP with -- as you bring this MRD on board? And then maybe just elaborate to us sort of as you think about -- looking at the competitive landscape, CGP has continued to grow for a number of companies that are serving products in the marketplace. So are you seeing anything different competitively in the NGS side of the business?

So I'll start with AUP and then let Warren talk about the competitive dynamics. Puneet, so I think obviously, getting MolDX approval was a good first step for RaDaR. We're also working to get commercial approval as well. And as is the challenge with some larger panel tests, that will take time to get commercial coverage for RaDaR as well. Others being in the space and having more overall acceptance, I think, is a positive. So I think it will be a driver for AUP over time, but probably more starting in the back half of next year and into '27.

I think in terms of are we seeing anything different in sort of therapy selection in NGS, Puneet, I mean, we certainly -- the competitors that we've continuously come up against in the community oncology setting remain very present. It's certainly a hotly contested environment. But we feel that the -- certainly the round out of our portfolio, which was sort of requested by many of these oncologists in the community has been very well received. And it's not just the volume increases that we've seen across the liquid biopsy test that we launched, we're seeing across the category.

And actually, for interesting information, some of our what we call NeoTYPE, which are cancer-specific panels for breast or for lung or for brain, we're seeing actually renewed growth in those panels as well. So again, it comes back to this comprehensive offering that we have both across solid tumor and heme that creates the differentiation for us in the marketplace.

And then just on the COGS side, can you talk a bit about the levers you have to reduce the COGS? As you bring on these new assays, there's obviously a push and pull there. So just wondering how are you thinking about the overall cost per test?

Yes. Thanks, Puneet. I think even in Q3, we've got some LBx volume and limited reimbursement. So we're actually covering the COGS in Q3 for LBx. As our volume increases from some of these larger panel tests, we will see operating cost efficiencies just by the number of tests we can do at one time.

I think a few of the other things we've talked about today will also be drivers of COGS. The LENS consolidation, consolidating multiple LENS systems, streamlining the lab. We have a dedicated process on lab automation. And so the ability to automate processes and use technology and newer lab equipment to drive efficiencies is well underway, and we see good uptick there. Being able to digitize more lab processes to improve the customer experience as well.

And then digital pathology, we see efficiencies and revenue opportunities with digital pathology. And finally, look, we still have a fair amount of capacity in our lab footprint. So we've got the lab in Fort Myers. We've got a new lab we expanded in North Carolina, RTP. We have new lab in the Northeast. So just incremental volume coming in, we can get operating efficiencies on a relatively large fixed cost footprint. So we have a multiyear opportunity to drive margins there.

I'd add maybe 2 points to substantiate what Jeff was saying about larger volume and the leverage there. So I mean, we've always focused on turnaround time because that's a differentiator for us. And as a result, we hadn't moved to largest flow panels and we hadn't moved to the NovaSeq X. Those are both initiatives that we have in focus for us in 2026. So there are 2 real tangible examples in terms of how incremental volume can help to drive down cost.

Yes. And the last piece I would say is from a cost per test perspective, Pathline has a higher overall cost per test than legacy Neo because of that lack of incremental volume. So the ability to streamline Pathline and actually pump incremental volume in there will bring down that cost per test as well. So early.

Our next question is coming from Mark Massaro of BTIG.

This is Vidyun on for Mark. I'll just keep it to one on RaDaR. Could you just remind us what indications you're pursuing here in addition to head and neck and breast cancer? And any cadence of reimbursement that you're expecting there? Any further milestones we should be looking for out to '26?

Well, as you mentioned, the 2 indications that we have secured have been subsets of head and neck, which is HPV-negative adjuvant and surveillance. And in breast, it's HR-positive and HER2-negative surveillance 5 years out. So those are the 2 that we go to market.

Relative to new indication areas, I will tell you, we have every intention. We have done -- we have been doing ongoing work in R&D. And so we will be making additional submissions for indications, expansion for RaDaR ST. I won't go into the specifics about those for relatively obvious reasons, but we plan to be moving forward with those. And as well, we are continuing our next-gen MRD program as well.

And we see the necessity of having both RaDaR ST and Next-Gen because having an ultrasensitive option for low-shedding cancers is going to be an important aspect as well. And so we see the indication flow a little bit different for our Next-Gen program that we would with RaDaR ST. So we're trying to avoid redundancy and overlap in spend relative to those indications. So you should expect us to add indication submissions in the short term, which we believe could be manifest in the second half of 2026.

And our next question is coming from Mike Matson of Needham.

This is Joseph on for Mike. I guess just 2 from me. Just looking at pricing, AUP, obviously, you guys have seen many consecutive quarters of improvement there. While small Pathline is a headwind there. And I did hear what you guys said concerning just volume coming through at a higher rate will improve COGS. But I know NGS, bringing NGS into there is the plan or was the plan. I was just kind of curious if you could remind us on the time line for that. Is that a 2026 plan? Or is that already in the works to bring NGS or more NGS into the Pathline lab?

Yes. So just to be clear, on the Pathline lab, so the NGS is going to be done at our other sites. So the fast turnaround tests enable us to capture more NGS work. The time lines for doing that NGS work enable us to send those out to our other labs in Florida and California and still meet our time frame. So we're actually going to gain operating leverage by pumping more volume into our existing sites as a pull-through through the Pathline site.

Yes. And just as a follow-up, on that Pathline, as we said, the strategy there was always to give us opportunity to deal with the under-penetration in the Northeast, and we have made really good progress there. So all the legal integration and the assay validations have been completed. And so now we can offer a more complete complement of the Neo portfolio and take advantage of the Pathline site for the more rapid turnaround testing needs that are up there, but as Jeff said, taking advantage of our footprint and the efficiencies we gain in our other lab sites.

And so we're confident. I know our selling team is excited about the prospects that they are generating. We see a healthy new customer list beginning to emerge, and that's why we are of the belief that it will be a growth driver for us in '26 and beyond.

I guess maybe just one quick one. NGS growth specifically, I know the target there is 25% or more, very near that target, obviously, above market growth right now. But we have seen acceleration there in NGS growth the last 2 quarters. I'm just curious how you're thinking of the next quarter, 4Q '25 and 2026? Is it back on that target of over 25%? Is the target more just above 20% at this point? I'm just kind of curious your guys' thoughts there.

Yes. So we gave guide for the back half of the year. We didn't give a Q4 specific guide. We expect to see continued good growth in NGS, but we haven't broken out the specifics on that.

Well, that does conclude our question-and-answer session. I would now like to turn the floor back to Tony Zook for closing comments.

Well, again, I'd just like to thank everybody for joining us on the call. As we said, it was a good quarter. We have focused on operational excellence, and I'm pleased to say that the teams in both our commercial organization and our lab have performed extremely well, and we're very proud of all the work people at Neo are doing to advance cancer care for all the patients in the community. Once again, thank you for your time, everyone, and we'll look forward to some one-on-one follow-ups.

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.