NeoGenomics, Inc. Aktie

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.

Good morning, and welcome to the NeoGenomics Second Quarter 2025 Financial Results Call. [Operator Instructions] Please be advised that today's conference is being recorded. I will now turn the call over to Kendra Webster, Vice President of Investor Relations.

Thank you, Tom, and good morning, everyone. Welcome to the NeoGenomics Second 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, and we will be referring to the slide presentation that has been posted to the Investors tab on our website at ir.neogenomics.com. During this call, we will make forward-looking statements regarding our future performance, business strategy 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 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 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 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 available in the Investors section of our website. I will now turn the call over to Tony.

Thanks, Kendra. Good morning, everyone, and I thank you for joining us today. I'm pleased to lead this call having now completed my first quarter as CEO. Since becoming CEO in April, I've engaged with the business, including sales, operations and R&D and reexamined our strategic initiatives and financial targets from a more in-depth perspective than I could as a director. I've also met with existing and potential partners at various industry conferences and had conversations with many of our shareholders to better understand their perspectives. These conversations reinforce the significant opportunities to drive value for our customers, patients and shareholders.

Cancer testing continues to be a large and attractive market. Most of our business today is in diagnostic testing, though recently, we have accelerated our offerings in therapy selection with the launch of several NGS products. In addition, our RaDaR 1.1 technology and R&D work on next-generation MRD enable us to participate in a market that's underpenetrated and rapidly growing. I acknowledge that our delivery this quarter was below expectations. While I remain extremely optimistic about the future of NeoGenomics, our team and I are doubling down on our efforts to focus the business on execution excellence as we build upon our disciplined financial and operational foundation. But before we talk about our plans moving forward, let's spend time on the quarter.

We had a solid second quarter in the core clinical business, posting significant volume and share gains in key segments. However, our nonclinical revenue was below expectations. Revenue for Q2 was $181 million, slightly below our second quarter guidance range, though still representing double-digit growth of 10% year-over-year. Our clinical business continues to expand with organic growth of 13%. Strength in our clinical business was offset by continued weakness in our nonclinical revenue, driven by lower revenue from pharma and biotech customers. In the second quarter, we saw a sequential improvement in AUP, a record quarter for test volumes and NGS growth of 23%, slightly below our 25% target, but well ahead of the low to mid-teens NGS market growth rate.

We continue to capture market share and clinical revenue, but we made a conscious decision to leverage the learnings from our PanTracer liquid biopsy EAP to establish an even stronger product profile for launch. This meant we delayed our launch, which resulted in lower revenue and a lower-than-targeted NGS growth rate. I'm excited to confirm that PanTracer liquid biopsy will launch commercially tomorrow and believe that our approach to bringing this product to market will positively impact patients treated in the community and our NGS growth rate later this year. We're projecting lower-than-planned revenue from pharma customers for the remainder of the year, as well as a negative impact to revenue associated with lower-than-planned volumes for PanTracer liquid biopsy and NGS mix.

As a result, we've updated our 2025 financial guide, which Jeff will provide more insight on in a moment. I am confident that Neo can continue to achieve double-digit annual growth, fill product gaps through organic and inorganic activities and capture additional market share. The leadership team and I have drilled down to align our cost structure with revenues, reestablish our consistent execution and rebuild credibility with our shareholders. Investments we are making in operating efficiencies this year, including the LIMS project and digital pathology, position us well to achieve more operating leverage in the back half of this year. I think it's important to spend some time discussing our Q2 results and how we intend to accelerate growth and drive value.

The pharma macro environment conditions contributed to the revenue shortfall in the quarter versus our expectations. Specifically, market uncertainty surrounding NIH funding, drug pricing, patient enrollment in clinical trials and potential tariffs are leading directly to investment volatility and creating significant headwinds for both our pharmaceutical and biotech clients. This is resulting in budget restrictions, reprioritization and consolidation of assets and postponed or canceled projects specific to our pharma services line that are more pronounced than we've experienced over the last 2 years. As we have shared in past quarters, RaDaR 1.0 is a growth driver for pharma revenue and also provided a call point to sell other testing modalities.

As a result of the negotiated settlement, these RaDaR 1.0 contracts are no longer producing pharma revenue in 2025. We are adding additional testing capabilities in our portfolio to make our menu more attractive to our pharma and biotech customers, such as Paletrra, our AI-powered spatial proteomics platform, which launched in June. While we have updated our pharma go-to-market strategy and made key changes in leadership, it is taking longer than anticipated to yield results. So how do we plan to respond to these challenges? Our strategic drivers are focused on 3 areas: the customer experience, the community channel and new products.

Optimizing and winning the customer experience continues to be our competitive strength. We've earned a market leadership position in Heme through our heavy investments in community hospitals, and we continue to invest in the community oncology setting. To win the customer experience, we focus on investments in our sales force effectiveness and efficiency, bidirectional interfaces and ordering portals, as well as automation and digital pathology in the lab. Last quarter, we announced our plans for EPIC integrations, which we believe will begin to impact our revenue in late 2025. We're also continuing our multiyear process of integrating our multiple LIMS into one single LIMS, which will allow us to sunset 8 legacy systems.

We believe this will give us operational efficiency, enable us to further improve our turnaround times and further enhance our data asset to fuel more robust growth in our oncology data solutions business. In terms of enhancing our community channel strength, we leverage our business development capabilities to establish effective compelling partnerships like the one with Adaptive around delivering industry-leading Heme MRD tests to our customers, which we have started to bring to market through a control pilot earlier this month. Our pipeline of future opportunities continues to grow as we capitalize on the recognized strength and the unique brand recognition of our channel in the community space, coupled with our sales effectiveness. A key growth driver for clinical and pharma is focusing our R&D and business development efforts on new next-generation precision-guided products.

We believe MRD and therapy selection NGS provide the biggest market opportunities and represent the largest associated unmet need. The $30 billion MRD market specifically represents significant unmet clinical needs, particularly in low shedding cancers. MRD has the potential to transform cancer care by enabling earlier detection of recurrence, more precise treatment decisions and better outcomes for patients. This also makes MRD highly relevant to biopharma partners to advance targeted therapies. We intend to make further progress here and evolve our product portfolio to be more comprehensive across the cancer care continuum. Simultaneously, we will continue building on our deep relationships with the community hospital pathologists and growing relationships with community oncologists, providing us with an even wider competitive moat and reinforcing our responsibility to inform treatment decisions with actionable insights.

As I mentioned at the outset of this call, I've met with many of our shareholders to better understand their perspectives. They challenged us to rethink our confidence levels and to be transparent in our guidance, incorporating the risks and uncertainties inherent in our industry and our business. We take this feedback seriously, and I want our shareholders to know they have been heard. Revising our 2025 guidance reflects the headwinds I've discussed, while at the same time, acknowledging the efforts we've implemented to best position the company for the future. I'm confident we can achieve these forecasts. And if we execute on our action plan, I'm just as confident that there is additional upside we can capture as well. We intend to prove that one quarter at a time. As a member of the Board of Directors, I approved the update to the long-range plan we communicated earlier this year.

As CEO, one of my primary objectives has been to oversee the execution of the strategy behind the plan and proactively identify opportunities to improve upon it. Here's how I think about our long-range plan. It's just that, long range. While the plan covers the company's execution of certain key metrics during the next 5 years, this does not guarantee that the plan is going to correlate exactly to our guidance for the coming year, and there will be variability from year-to-year. My confidence in the long-range plan is based on 3 key assumptions. First, we believe that the core business, which now includes Pathline, will continue to grow at a 10% plus rate even with the headwinds affecting our pharma revenue.

Second, our business development activities will add incremental revenue that materializes gradually with significant growth in the out years, but the timing will be lumpy depending on deal terms and structures. Finally, as we increase our investments in R&D and launch PanTracer liquid biopsy and future products like next-gen MRD, we expect to generate incremental revenue through consistent improvement in NGS mix and growth. Beyond that, to the extent the pharma headwinds subside, there is upside. As we progress into the back half of 2025, we will continue to monitor the impact of the recently passed federal budget bill, changes in the pharma landscape and the success of our liquid biopsy launch.

Consistent with our historical practice, we will release our 2026 guidance when we report our 2025 full-year earnings in February of 2026. Going forward, like many in our industry, we will not be providing external updates on our progress against the long-range plan and will instead focus on our near-term guidance targets. Based on my experience in these last 4 months, I'm more optimistic than ever about Neo's future. And with that, I'll hand it over to Jeff to further discuss our results from the quarter.

Thanks, Tony, and good morning. Second quarter total revenue growth accelerated from Q1 and increased 10% over prior year to $181 million. Total clinical revenue continued with double-digit growth and increased by 16% from prior year. Organic clinical revenue was $160 million, representing growth of 13%, driven by a 10% increase in test volumes and a 3% increase in AUP. In the second quarter, NGS testing accounted for 32% of total clinical revenue and grew by 23% over prior year. This strong clinical growth was partially offset by nonclinical revenue declining by 26% over prior year, driven by weakness in the pharma revenue Tony spoke about.

The second quarter was also a difficult comp with prior year pharma revenue of $18.7 million or 10% higher than the average pharma revenue per quarter in 2024. Adjusted gross profit improved by $4.6 million or 6% over prior year. Adjusted EBITDA was $10.7 million, down 2% from prior year, while delivering our eighth consecutive quarter of positive adjusted EBITDA. The decrease was due primarily to the acquisition of Pathline as the business is ramping. Excluding Pathline, adjusted EBITDA improved by $1.4 million to $12.3 million or 13% from prior year. Average revenue per clinical test increased by 2% to $461 from the prior year and increased sequentially from Q1, even with the lower AUP Pathline volume.

Excluding Pathline, AUP grew 3% over prior year due to increased ordering of higher-value tests, including NGS and strategic reimbursement initiatives. As I noted on the first quarter call, we have successfully renegotiated several managed care agreements in the second quarter, which will positively impact revenue in the second half of 2025. Q2 results include a noncash impairment charge of $20 million associated with the upcoming replacement of our IVFL test with PanTracer liquid biopsy and the write-down of Trapelo and assets held for sale. While we remain focused on 2025, our full year -- our revised full year guidance reflects the challenges of the current pharma environment and its impact on customer demand, as well as the delay in launching PanTracer liquid biopsy.

At the time of our first quarter earnings call, we believe that clinical would make up for the initially projected $7 million shortfall in pharma, but demand for services has proven to be weaker than anticipated. As a result, the $7 million gap will increase, and we no longer believe that clinical can make up the pharma services shortfall for 2025. For full year 2025, we now anticipate revenue of $720 million to $726 million, representing 9% to 10% growth for the year with adjusted EBITDA of $41 million to $44 million. The Pathline integration is on track and progressing well with the potential impact to adjusted EBITDA of negative $1 million for the remainder of the year. We remain well positioned to invest in our business and capitalize on the growth opportunities in our strategic plan.

We significantly reduced our debt in the second quarter with the retirement of the $201 million convertible notes due in May out of our existing cash. Cash flow from operations in the second quarter was a positive $20 million, an improvement of $6 million or 44% over the prior year, and we ended the quarter with cash and marketable securities of $164 million. Our balance sheet has no near-term debt maturities, and we continue to balance capital deployment between organic growth investments, business development and improving operating efficiencies. Our balanced approach towards capital generation and allocation reflects our commitment to our strategic focus areas.

Specifically, our investments will be focused on filling gaps in our broad menu, including ultrasensitive MRD, liquid biopsy and whole genome sequencing solutions. We have improved the financial health of our business dramatically over the last several years, and we continue to progress in Q2. We are focused on executing our plan to achieve long-term sustainable and profitable growth and delivering shareholder value. To illustrate our confidence in our strategy and path forward, I, along with Tony, Warren, and additional management team members as several -- as well as several directors on our Board recently purchased additional shares. Now I will hand it back to Tony to wrap up.

Thanks, Jeff. To recap, we have strong relationships in the community setting where 80% of cancer patients are treated, operational capacity and network footprint and financial discipline and flexibility to expand our reach and generate value for our patients and shareholders alike. We will remain guided by our strategic drivers and committed to our mission and vision while focusing on generating meaningful growth and enhancing value while improving patient care. Thank you for your continued interest in NeoGenomics. And now I'll pass it over to Kendra for questions.

Thanks, Tony. All right, Tom, let's go ahead and open the line for questions.

[Operator Instructions] And our first question this morning is coming from Andrew Brackmann from William Blair.

Tony, maybe to start on setting guidance. We've seen several updates on both near- and long-term guidance updates so far this year. This is yet another one. So from a high-level perspective, and now that you're 4 months into the CEO seat, can you maybe just sort of talk about the process and philosophy for setting guidance, maybe how that's changed? And I guess maybe even more pointed here, what are some of the things that you're committed to doing to rebuild credibility with the investor base?

Yes. Thanks, Andrew. I do appreciate the question. First off, I guess, what have been my learnings now that I've had the opportunity, as you say, to sit in the chair. I will tell you, there is a big difference in seeing the company at a 10,000-feet view as a director versus the opportunity to dig deep as a CEO. And I have had a significant amount of learning. I've had the opportunity to do deep dives with R&D, with our business development teams, with R&D operations and our commercial groups and with the management team as well to be able to construct, reconstruct, deconstruct the budgets and long-range plans to understand all of the key pieces that underpin that, Andrew.

So that -- I certainly have a deeper understanding of that. I've had the opportunity to meet with a lot of our investors and get their own feedback. And I can tell you, they have not been shy about sharing their own thoughts with us and made it very clear that just hitting a guide is insufficient. That's the same as a miss. And we need to be more realistic, a more balanced approach to how we can fade the business. I've been told that it is absolutely appropriate to speak with confidence on the underpinnings of your core assumptions and to express other areas as upsides. So I think that was a great learning for me as well. So I take that very seriously to heart. I've had the opportunity as well to speak with a number of our partners and potential partners. At ASCO, for example, I could tell you that there have been a real inflood of opportunistic advances by companies to see if we can work together to leverage our strength to combine with theirs.

And so it certainly has been a learning. As far as what do I need to do, I think I need to speak with confidence and be transparent with how we view the business and to share that openly with people. And the biggest thing, Andrew, we now need to deliver. We missed our revenue guide this quarter. It's unacceptable. We understand that and take responsibility for it. And now moving forward, we just have to hit and exceed our goals quarter-on-quarter. Does that help?

That's very helpful. Maybe your comments on talking about the underpinnings of core assumptions, maybe as it relates to 2025 guidance, can you maybe just talk about some of the levers towards the guide down? Maybe just bridge the prior guidance to this guidance in terms of kind of the key areas that you talked about?

Yes. I will focus primarily on 2 of them, Andrew. I mean, mix is always an issue with a company of our size with the portfolio of our breadth, right? So when you're trying to manage 500 products across a landscape, you are going to see subtle shifts in mix. So that's always an issue for us to manage. But I would say that there were probably 2 large areas that are reflected in the guide. First and foremost, the pharma side, the impact of the macro environment came at a speed that I don't think we fully accounted for relative to our original guide. The combination of tariffs with pricing challenges, with NIH funding declines, all of those things factored into an environment for our pharma and biotech customers that created uncertainty.

And I think that, in large part, translated into a delay in projects or reassessment of projects and sometimes stopping of projects. And so I would tell you that, that is probably the single largest contributor to the change in guidance for the year, probably representing almost 2/3 of it. As I said in my opening comments as well, we made a conscious decision to leverage our PanTracer liquid biopsy EAP learnings. And by doing so, I'm glad we did it. I believe we end up with a better product profile. And I believe we took the right requirements to improve that product profile moving forward. But not having PanTracer in the portfolio in May as opposed to our opportunity to start the commercial launch tomorrow. We're excited by the launch tomorrow, but that is a 3-month delay, Andrew.

And so that does affect our overall mix and revenue for the year. And then I guess maybe a final piece is we are quite proud of our NGS penetration rate. We did 23% growth for the month -- for the quarter, but it's still a little bit behind the 25%. And we acknowledge all those factors, I think, in the guide moving forward, not least of which was as well the feedback from some of our shareholders saying, speak with confidence, what can you deliver? And if there's opportunity for upside, then surprise us later.

Your next question is coming from Yuko Oku from Morgan Stanley.

Given the focus around rolling out the PanTracer lineup and NGS tests in general being a growth driver of the company, do you see opportunities for portfolio pruning? How do you balance being one-stop shop for your customers versus focusing on allocating your resources to the most profitable products?

I'm sorry, could you just repeat the last part?

How do you balance being one-stop shop for your customers versus allocating your resources to the most profitable products?

Okay. It's a great question. First, let's start with PanTracer liquid biopsy. As you say, we are looking forward to the launch tomorrow. We believe we have a very competitive product to bring to market. It's one that our customers have actually asked us for because it complements that our family of PanTracer products. It will be a comprehensive panel over 500 genes that will include TMB and MSI that guides immunotherapies. We've been able to lower our input requirements so that we get better collection methods and yielding strong -- very strong QNS profile.

We've been able to support a turnaround time that we believe will be less than 7 days and think that factors into a pretty good value proposition for our customers. And as you say, we look to the depth of the portfolio. And we believe we have solid offerings, not just in the PanTracer liquid biopsy family of products, but across the spectrum of products. Warren, any comment?

Yes. Let me add to that. So first and foremost, I'd say that our broad portfolio is absolutely a strength. When we think about labs sending out their oncology testing, they're looking to consolidate vendors that they want to send their testing to. And this puts NeoGenomics in a very unique position that we're able to address most of their needs. Having said that, yes, our strategy is to protect our position on the diagnosis side, but invest significantly in therapy selection and MRD, which are the areas where we see faster growth, larger TAMs.

So with that, we definitely see opportunities to simplify the portfolio, which we have done in 2025 and we'll continue to do for the rest of the year and into the future. But our strategy is to provide a holistic solution to our oncology physicians from a diagnosis perspective, therapy selection and MRD point of view.

And then I would say from an overall portfolio perspective, you should expect we're continuing to evaluate the whole portfolio. And as Warren said, it's an ongoing process of pruning and refining based upon customer needs.

Great. And then as a follow-up question, could you also provide us with an update regarding RaDaR RD litigation? I think there was a recent order on motion to expedite. What does it mean for the trial expected to occur, I think, in the October time frame?

Yes. First, relative to the litigation, again, you can appreciate this. I'm not going to go into detail nor members of the team with any ongoing litigation. What I can update you on is that the trial is slated for October. Either way, I can tell you, though, we are committed to the MRD space. As you've seen, we are partnering with Adaptive to bring forward a great MRD Heme product into the marketplace, and we're proud to do that. We get benefit from that by being in the marketplace and taking those learnings and the added benefit to the rest of our portfolio. We're going to continue to invest in our next-gen MRD. So that is built into our R&D plans moving forward. We have done our preparatory work behind the scenes.

So we have completed and submitted our bridging study to MolDX. And we are doing all the prep work we need for launch. And so I will tell you that we are prepared and ready. Now recently, Natera has filed a motion for a bench trial. We opposed that motion. We believe that we have a constitutional right under the seventh amendment for jury trial. And the court has yet to rule on that motion. So I would tell you, stay tuned. You'll know when we know, but we are coming into this space, and we are committed to the space.

Your next question is coming from Subu Nambi from Guggenheim Securities.

This is Thomas VonDerVellen on for Subu. Just to start, can you get us comfortable with the second half ramp, specifically with NGS now that PanTracer was delayed a bit and also with the continued pharma pressures, where do you feel the guide is most aggressive still? And where is it most derisked?

I actually think that we have a much more confident and balanced guide in the second half. I would tell you the greatest risk to the guide was on the pharma side. And so we have further reduced the pharma business plan. And by the way, not just in revenue, we've also taken some hard decisions relative to the cost base associated with pharma as well. So I would tell you that was the largest risk to the plan. As far as the biggest growth drivers in the plan for the second half, as you know, we've invested in our selling force, and we monitor that very, very closely.

We expect to see increased effectiveness and efficiency with that investment in the sales force to help us further penetrate the NGS segment. Certainly, PanTracer liquid biopsy plays a big role in the second half in addition to just the normal back half year increase that we see historically. The Adaptive partnership is also an opportunity for us in the second half of the year. And I would also tell you that we are well on plan with our Pathline integration. And that started first and foremost with just getting the integration correct, getting it done right and making sure that there were no hiccups along the way. But as you will recall, that was a more strategic value to us. And we want to see the opportunity to further drive share of our ongoing business in the second half of the year up into the Northeast.

And so Beth and Warren on their commercial teams are focusing hard there. And then finally, we are working hard on interfaces with our customer base. We think that, that has an opportunity for us in the second half of the year as well because when those interfaces go live, you have a better opportunity for increased penetration because it just makes it so much easier for customers to do business across our portfolio. So thanks for the question.

And then just for my follow-up, last quarter, you talked about, I think it was 5 products meaningfully contributing to NGS revenue. Did you have a similar concentration this quarter? And can you talk about if you expect that to evolve at all over the balance of the year?

Yes. We -- thanks again for the follow-up. We do expect it to evolve. We expect it to evolve and increase. The 5 concentrated products that we spoke to, we've talked about their ability that they represented almost 21% of our clinical revenue. That has continued to grow. And we saw in this quarter, that's up to about 23%. And relative to the broader business, all of our NTS products are now -- have eclipsed about 30% of our total revenue. And so this is an important growth driver for us. We monitor it closely, and it's one of the biggest opportunities for us over the medium and long term as well. So thanks for the follow-up.

Your next question is coming from Mike Matson from Needham & Company.

So just want to clarify the comments on the long-range plan. So you're talking about double-digit growth now. So does that -- just to be clear, are you backing off the 12% to 13% target that you set earlier this year? And so you're expecting kind of 10% plus over the next few years?

Yes, Mike, thanks for the question. What I'm -- first off, we are not backing off of our long-range plan. But what I am trying to do, Mike, is create added transparency so that there is no ambiguity of what is in it and how I view the business. And so that's why I'm trying to drive for more clarity. In my conversations with investors, they ask for that because what's in, what's out and how do you get there from here was a big question for them. So let me once again just reiterate it, if you don't mind, so that everybody can be clear. I look at this as our base business today.

What do we have in our bag to sell to bring to our customers now. That is a proven. I have it. That base business, in my mind, that is a 10% growth business over the planning period. So that is our anchor position. Now you've heard us talk time and time again, we are not standing still as we sit here today. We are investing. We're doing it responsibly, but we are investing in R&D. We do plan to have more products in therapy selection and MRD. And those opportunities create incremental value above that base plan, and I'm acknowledging that, that comes later in the cycle, right? That's -- there's a lot of things we can do. I can't compress the time continuum. And so those just come later in the cycle. And then the other area that we're not going to stand still on is business development.

We believe that there are plenty of opportunities for us to supplement our portfolio. We have seen that they can add incremental growth into our business in top and bottom line performance, but I also acknowledge that they're lumpy. You can't predict the exact time of those. And so from my vantage point, the long-range plan starts with your anchor position of the 10% growth in our current portfolio. We build from there with business development and, of course, new product development. And that's the plan. I also want to just reemphasize that to me, the long-range plan is just that. It's a long-range plan.

It is never intended to be a forecasting vehicle for any given year. And I plan to deemphasize these conversations around the long-range plan, just like our peers do. I'm going to focus our energies on our short-term delivery, what can we deliver quarter-over-quarter and in that given year and not be focusing our energies and discussion points around a long-range plan. Is that helpful?

Yes, that definitely makes a lot clear. And then just on the nonclinical business, I mean, given the steep declines we're seeing now, I mean, would it be possible to exit that business? Is there some kind of synergies with the clinical side? And then what would that -- how profitable is that part of the business? Is it maybe an issue where it's more profitable than the clinical side and then you'd be giving -- you'd be hitting the bottom line too hard if you were to exit it?

Yes. Thanks again for the follow-up, Mike. Are there synergies across the lines, the answer for the operations team is yes. There are opportunities for that. But I think the bigger question is, are we committed to the space, right? And I can tell you that we are. We do believe in the space. It is of strategic value to us. It provides the opportunity for us to identify and to validate biomarkers early. It provides the possibility in the development of companion diagnostics. It keeps us at the forefront of emerging technologies so that we can stay not just current, but a step ahead of where we might take our own activities.

It also does play a role, Mike, in accelerating the launch of new products, right? You don't have the same reimbursement hurdles in that space that you might across other parts of the business. And so we believe in the pharma space over time that it does help create value, but I also need to be reflective of the short-term impact to that, and we have adjusted our revenue lines there. And I do not personally anticipate that these changes in the environment are going to subside anytime soon, and we reflected that in our business plan moving forward.

Yes. And I would add to that. I think we still have excess capacity in our footprint as well as continuing, as we've talked about, our LIMS integration, which will allow us to increase our operating efficiencies with our pharma business as well. We don't break it out separately now, but we used to break out advanced diagnostics previously in prior periods, and it had a lower margin profile overall than the company. But as we look at excess capacity, the business development and R&D opportunities, as Tony spoke about, and then the LIMS work, we still think it's going to be a viable business for us going forward, and we think there will be a plateauing out at some point in the future, which we can build upon from a growth perspective.

Your next question is coming from Mark Massaro from BTIG.

This is [indiscernible] [Vivian] on for Mark. So maybe just one on Pathline. Just help us understand how the contribution in the quarter was tracking relative to your internal expectations. And then I know you've cited an intended benefit of cross-selling the broader portfolio with Pathline customers in the past. So just curious how you're seeing that dynamic play out.

Sure. I'd be happy to start that, and Warren can jump in any time. As far as the integration and the intended results versus actual, we are right on plan with the Pathline integration. The revenues were right in line with our expectations. And so we feel very, very good about the shape of that acquisition and the shape of the business. As you rightfully say, it's not just a business benefit relative to Pathline alone, there was strategic value associated with the acquisition.

We saw the opportunity to enhance our footprint and therefore, our speed of delivery to key customers in certain segments of our market in the Northeast. And so it is our plan to continue to drive the current Pathline business, but as well take advantage of our more in-depth portfolio and bring NGS products up and through into the Northeast with greater rigor and speed. That was always intended to take place in the latter half of this year with that benefit being more realized in 2026. And of course, we will do everything in our power to pull as much of that forward as possible. And I'll look to Warren, if you want to add some additional color.

Yes. Thanks, Tony. I think you covered most of the key points. I think one of the key elements for us to really enable this capability in the Northeast was to further validate tests within this lab. And that was always planned to take place in the second quarter. And again, just to remind everybody, we closed this acquisition in the early part of the second quarter as well. So we've actually concluded the validation requirements for these additional tests that we wanted to move into the Northeast to round out the portfolio that's required in that lab. And now we are actively addressing sort of these opportunities to drive additional share of wallet and pull-through.

The sort of opportunity funnel looks robust and certainly expect to see many of those come to fruition in the second half of the year. And as Tony said, that would be an upside for us in the second half and certainly some that would drive material value for us in 2026 and beyond.

Your next question is coming from David Westenberg from Piper Sandler.

So I actually wanted to talk about the 10% volume growth, and that was organic, I believe. Can you talk about what that might mean for share gains versus the market? Can you give us any context to what historical volume growth is in the market? Help us really evaluate the overall strength in the business?

Well, I would say, first and foremost, as you rightfully note, the growth was 10% across our business. We have made good growth across all the various modalities. So we continue a storyline that while our focus has been in NGS and making sure that we grow that important segment of our business, in fact, across all of our modalities, we continue to make great progress, and we see share gains across all the modalities. And so it's quite a positive for us moving forward.

As you also rightfully have seen in the earnings release, it's also record high volumes for us across the business. And so for us, we see the opportunity to continue to grow volume. We do see the opportunity to grow share in our key segments, and that is what we are focused in doing.

And I would say, if you look at it from a modality perspective, we're seeing growth rates depending on the modality in the 2% to 3% to 5% range. And I would say kind of across the board, we're growing significantly faster than that.

Maybe I want to build on that just from a commercial execution perspective. And I think the development from a volume perspective is testament to a strong commercial strategy well executed. And coming back to the fact that we have our territory business managers that are looking at the pathology business and the oncology sales specialists looking more at the community oncologists from a therapy selection point of view, that really drives towards providing a solution to these ordering physicians.

And although we do prioritize certain products, it's very much around providing a holistic solution across their needs. And this is what's driving the incremental volume across all modalities. And we're seeing growth greater than market, as Jeff and Tony said, against each of the modalities. But we do over-index on NGS because of the desire to move to the right into therapy selection as well. And we do that through sort of incentive compensation and other focusing mechanisms. But it really is the testament of a strong commercial strategy being well executed that's seeing this volume growth across all modalities.

And I think seeing 23% NGS growth without our liquid biopsy product is, again, continuing to see very strong growth there, above-market growth there and now adding what we believe to be a very new and important product is going to help drive more growth in the back half of the year.

Perfect. And then as we -- I mean, I know you're not giving second -- 2026 guidance, but if you can maybe talk long term, Tony, about how you think about operating margins in '26 and beyond. Is there any kind of planning on growing EBITDA faster than revenue in the years out? Is that kind of the mission here? And then back to Jeff, can you talk about some of this cash flow and operating margin seasonality that you kind of see in the business? And I'll take it from there.

Well, I will obviously wait for '26 to talk about '26, which we will do in February. But to just give you a sense over the longer-term plan, do we still see that there is operating leverage for us as an organization? The answer to that is yes. We will continue to make the right investments in our operations sites. We have made a really good progress with the LIMS project, and we look forward to having a one common LIMS system, and we can retire 8 legacy systems.

There are opportunities for us to do the same thing in a number of different areas through automation, through digital pathology. So we do expect that we can increase efficiencies and effectiveness in our margins, and that, in turn, will lead to solid growth over time. And we also believe that there are going to be some midterm opportunities for us that we'll talk about in more detail that we can create more value for the company. So we have a strong financial discipline embedded in the company. We're going to build on that, and we do see plenty of opportunities for us to continue to cost reduce, find efficiencies and improve margins.

Yes. And I would add to that, and I would still characterize we think we're in the early innings of really capitalizing on both the LIMS integration as well as investing in automation and really think we have an opportunity to drive operating efficiencies there. And then from a cash flow perspective, generally, Q1 is our biggest cash burn and that played out again this year, and we start building from there.

So we had a very strong cash flow quarter. We're actually free cash flow positive this quarter. And as I said in my prepared remarks, cash flow from operations was up over 40% in the second quarter. We are still very focused on revenue cycle management and making sure we're collecting what we generate from a revenue perspective and expect that cash balance will build as the year progresses with the normal seasonality with the back half growth we're expecting that we've seen historically.

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

Maybe just one to start on the nonclinical business. It's been a kind of continued weak spot for you. I think it was down -- I think you said 26% in the second quarter. I know you don't break out guidance, but just to ideally remove or minimize the risk that kind of more shortfalls here, kind of depressed results in the back half of the year and/or the stock, it is down 40%, 50%? Like how -- can you help us frame any sense of how we think about the back half of the year, kind of what's baked into the new guidance? Like if we punch in down 50%, we would get to the midpoint of your range, not changing our clinical assumptions. I'm just wondering if you can help us do that bridge.

Yes. I think on the pharma side, I would expect a similar performance as we had in the first half of the year. We generally see a little bit stronger performance in the fourth quarter in our data business, our ODS business. So I would expect that as well. But pretty consistent with the first half with some upside in our ODS business in the fourth quarter is how I'd characterize what we're contemplating.

Okay. And then on the PanTracer side, did you -- and I'm sorry if I missed this, did you give an update on where reimbursement stands? And I know you talked about you delayed the launch due to learning from the EAP. So could you share any insights from that?

Dan, what I would tell you is that we are in ongoing conversations with MolDx, and we will share the final outcomes of those. We are confident in our path forward towards reimbursement, and that's why we are launching tomorrow.

Got it. And anything on the learnings in terms of the EAP, Tony? And did you guys break out how to think about kind of what you've put in the contribution for the back half of the year? Ideally, it's kind of modest to give you room for beats, but just kind of wondering on those 2 factors.

Yes. We haven't given a specific forecast for PanTracer in the second half of the year. Relative to the learnings, Dan, I think we found that there was opportunity for us to improve the profile of the product. We're excited by it. We'll have a very low QNS profile. We have verified a really exciting turnaround time that our customers are going to welcome. And we believe that we have a very comprehensive test that we bring forward. And so for us, it was the right decision to take and we feel more confident about when PanTracer hits the market. But as far as specific ramp-ups, I don't think we're going to be talking about that directly.

Other than I would just add, it's a new product, so it will incorporate a new product ramp.

Yes. And Dan, maybe just adding to it, I think once we -- the sort of the revised EAP that we went live with [Fed] probably a month ago or so, the demand that we saw with the revised target product profile was significant and very encouraging in terms of what we expect to see post the commercial launch tomorrow.

Got it. And I know there was one question on MRD. I know you discussed Natera looking to have a jury trial. Could you just remind us, would you mind just kind of zooming out since the next quarter and the back half of the year, we're going to get some of these key events on your MRD strategy, whether or not you can kind of launch with your existing platform to move on. Just kind of could you just reframe how to think about the various outcomes as we move into the back half of the year on MRD?

Well, again, what I would tell you, there are some things that are more concrete than others, right? What we will definitely be doing in the second half of the year is our Adaptive partnership with Heme MRD. We are in the early days of a pilot with Adaptive. We want to make sure that the partnership is seamless to our customers and that we've tested everything end-to-end.

So that is going to happen. We are working through those pilots now, and we look forward to a more complete launch when both companies are satisfied that our customers see this as a great partnership. And that should be closer to the back half of the year. Relative to the RaDaR litigation, I would tell you that right now, the trial is slated for October. I can't speculate on what the results will be or when they will be. I can tell you that we have done all the back office work in preparation to be able to launch. So our bridging work and everything has been submitted. So all of that is on track. I would remind everyone that we didn't have any of those RaDaR revenues in our guide nor in our plan. So if we are successful there, that represents upside. And another area that we are doing, Dan, we are investing in next-generation MRD with Andrew and his team.

We said that this would be a year where we're really specking those out. '26 would be a year of more active product development, and we look forward to those market opportunities in '27 and beyond. So that's kind of what I can give to you relative to MRD landscape times.

Your next question is coming from Tycho Peterson from Jefferies.

This is [Lauren] on for Tycho. A quick one for me, going back to the NGS growth. You guys talked about how you achieved 23% regardless of the delay in the commercial launch with PanTracer. Could you talk a little bit about how much of that is being driven by test mix shift versus true market expansion and kind of how sustainable that cadence is into 2026?

The majority of it is true market expansion. I mean, naturally, there is a mix benefit, and I think it's common knowledge that the NGS has a higher AUP than the rest of our portfolio. But if we look at true sort of volume growth, that remains significantly higher than what we're experiencing from what we're seeing from a market growth perspective. And really, again, this comes back to the commercial strategy where we have our dedicated sales team of oncology sales specialists who spend the majority of their time focused on the sale of NGS-related products within the therapy selection part of the business. And again, we're gaining traction in this space, and this is really what's driving the share gains that we are seeing, and we believe the addition of PanTracer liquid as of tomorrow will further accentuate that.

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

I got just a couple of small follow-ups on topics that people touched on before. So hopefully, really rapid fire. One is on PanTracer, just kind of confirming that no change to your planned ramp or planned execution in the first couple of months or first couple of quarters out of the gate. Yes, there's a delay, but the plan going forward is the same and nothing has really changed on that.

Yes. From point of launch, the plan remains the same. But of course, that point of launch had experienced about a 3-month delay.

Okay. Okay. Just making sure. Then on the pharma services, I mean, I totally hear you on what you're seeing in the end market. And yes, not surprising given what we've seen elsewhere, but still the results have lagged some of the others in the space a little bit, and we just haven't seen the same extent of weakness and it is a little bit more protracted. So I was just wondering if you could comment on your competitive positioning there. It is a relatively crowded market, and there's more and more players offering some of these services. So could you just sort of analyze your portfolio and your offerings and maybe there's something there that you're missing on pharma services or maybe from the commercial side?

Yes. Relative to pharma, I think, as I had mentioned earlier, I think portfolio does play a role. Our inability to sell RaDaR certainly led to -- RaDaR 1.0 has certainly led to some of this falloff in revenue and our inability to have a kind of a launch point within those discussions, I think, is real. And so portfolio does have a role, and that's why we were excited to bring Paletrra into the marketplace. But Michael, we also recognize that these are long selling cycles.

And so while there might be some early signs there that look encouraging, I don't believe that they're going to meaningfully impact our shape for the short term. And as you talk with other companies, yes, I would tell you that there will be differences by companies. A lot depends on what are the services that they are bringing forward.

Some companies have CROs. Some companies do different types of mixes. I can only react to our portfolio. And in our portfolio, I see risk in that pharma business this year, and I don't anticipate that we're going to see any leveraging or any deleveraging of those issues for the remainder of this year and into 2026.

Okay. And then the last one, if I could squeeze one more in, would be on the cash balance and just sort of future use of cash. I know you used the $200 million intra-quarter to pay down the current part of the converts as you previously talked about, but you still got a sizable chunk of the convert going forward. And now you've got this revised fiscal year guide. I know there's a near-term versus long-term dynamic. Just talk us through cash balance going forward, just confidence in the run rate for the next couple of years as you get to that -- the remaining $350 million on the convert.

Yes. We expect that we'll be generating free cash flow next year still, and the cash balance will grow consistent with our earnings growth over the plan. So certainly, we have a lot of confidence that we will continue to delever as our earnings increase, and we'll be in a very strong position in the future to deal with the 2028 converts from a position of strength.

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

Two for me here. One, it seems like Pathline may have outperformed slightly in the quarter. And sorry if I missed this in the first question, but could you update us on your expectations for Pathline revenue this year and whether the contribution built into guidance has changed at all?

Yes, we haven't -- I would say Pathline, I would say, performed slightly ahead of our initial expectations, but we haven't -- we're not changing the overall guidance for Pathline.

Got it. And then on the pharma side, how much visibility do you typically have in that business in terms of revenue flowing through? Is it a single quarter, 2 quarters? How has that visibility changed given the backdrop? And could you just talk to your confidence in that segment being adequately derisked this year?

Yes. I think I'll add to that. I think the -- it is a challenging space, especially with a big part of our business U.S.-based and lots of uncertainty with regards to patient enrollment within the U.S. for clinical trials, and that really limits the line of sight that we've got. So it's less than a quarter, believe it or not, in terms of you want a high degree of accuracy, and it rapidly erodes if you go beyond that. And I think that's why we've taken a pretty conservative or prudent approach to the forecast for the remainder of this year for the Pharma Services business.

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

A lot is already asked. So maybe just a little more kind of diving into the guidance math. I think, Tony, you talked about a $30 million revenue cut, about 2/3 or almost 2/3 from pharma. So there's an incremental $10 million or $12 million that's coming from -- that's coming from clinical, part presumably PanTracer, but I know that's not the full amount. So is there anything else explicit to think about in terms of that step back? Or is this, hey, we really just want to derisk. We want to make sure we're in a good spot as the second half of the year plays out?

Yes. I would say, Andrew, we certainly have heard and we want to make sure that we give you with confidence what we believe we can deliver. And so that does factor in. But I would tell you that the pharma, as you mentioned, rightfully so, the delay in PanTracer liquid biopsy, that does contribute to that remaining piece. And then there is a slight mix effect that also would be there. And I'll ask Jeff if he wants to add anything.

Yes. Just within NGS, the mix of testing between blood versus solid tumor can change from quarter-to-quarter. And so I think we're seeing growth with some lower modalities from the NGS side, lower growth modalities. So I think that's just that mix element. Hard to predict quarter-to-quarter, but with the overall growth growing 23%, I still think we're going to see good growth there, but the mix will impact the revenue as well as we play out the rest of the year.

Okay. And then maybe just lastly, I think Dan tried to ask on this, but can you give us sort of an explicit what the updated PanTracer LBx looks like relative to the initial product that you did in that first EAP? Is it the turnaround time that improved? Is it QNS? Is it both? And kind of how we think about -- are you matching what's out there competitively? Do you feel like this latest iteration puts you ahead? And if so, on what particular metrics?

Yes. So I'll build on that. I think there was a number of benefits. First of all, we were able to lower our sort of input threshold that allowed us to reduce the QNS TMP levels that we were experiencing. In addition to that, by optimizing the workflow, we're able to accelerate turnaround time. So we're able to offer a significant below the published turnaround time through the EAP, which was really encouraging. And we also got feedback from select customers through the EAP that we were picking up certain genes that were being missed by a number of sort of peers or competitors out in the marketplace. So really a lot of very positive insights that came from that. And as Tony said, we believe the 3-month delay is going to be well worth in the long run.

Your next question is coming from John Wilkin from Craig-Hallum.

I'll try and keep this really quick. But if my math is right, it looks like your volume per clinical, excluding NGS and excluding Pathline, actually accelerated a little bit in the quarter. So just wondering if you could talk at all about what's driving that, if there's anything underappreciated in that.

Again, I think it comes back to a commercial strategy that's being effectively executed, seeing the value of the commercial investments that we've made and some productivity ramps. We did speak about early in the first quarter that there was a few new client wins that we had recorded. And obviously, those have ramped through the last quarter or so. And that covers the entire portfolio that we are making available to us, which, again, I think speaks to the value of NeoGenomics and the breadth of portfolio.

Your next question is coming from Puneet Souda from Leerink.

So first one, could you elaborate a bit on the size of the oncology sales force now? And how do you -- what's your strategy in continuing to compete in that market? How much of the NGS sales is sort of coming from the oncologist channel versus the pathologist channel? Maybe just help us understand that and largely because the competition here is only rising when it comes to therapy selection. You have one competitor that raised capital in the public offering. You have liquid competitors that are now launching tissue and then there are existing incumbents there. So just given all the landscape of that market, what's your NGS growth longer term? And then could you elaborate on the oncology sales force side.

Warren, do you want to just talk a little bit about size? I would like to address the stickiness question.

Yes. I think -- so we have executed against exactly the plan that we had spoken about in late last year and beginning of this year, getting our sales team to roughly that 135 people and sort of 40% of those resources fall within the oncology sales specialist side of things. The greater majority of the growth that we're seeing actually is being driven by that sales team, so coming from the therapy selection side of the business.

There is some that comes through the pathology channel, et cetera, but that's the minority portion. And actually, when we speak about these new products that contributed 23% of the business in Q2, the majority of that business, too, is coming from the OSS side of the business. So despite the increasing competitive landscape, we certainly continue to penetrate effectively, and we believe the sort of 25-or-so percent growth rate that we put out there still is very much attainable, especially when we launch PanTracer liquid tomorrow.

Yes. I'd just build on [Lauren's] point with -- you had mentioned that these are competitive markets and others have invested in those markets. And we are not naive to that. We truly appreciate that. The innovators do have a degree of stickiness because they were able to get into the market first. But I was at one of the recent conferences, and I reminded people that there are other ways to create stickiness, too. And that is we bring to the dance a broad portfolio. We meet customer needs across a number of different areas.

We continue to invest in those relationships, and we continue to invest in making it easy to do business with NeoGenomics. And that also comes with a degree of stickiness. And so we respect our competitors. We respect their innovation, but we also are hungry to get into those segments. And we have demonstrated over time that if we have a competitive profile product that we bring to market, even if it lags in time, we have been able to sufficiently grow those businesses. And so we believe in the profile that we have with PanTracer and the PanTracer family and respect our competitors, but believe we can grow in that environment.

And then the focus on operational execution and turnaround time continuing to improve as well, I think, has allowed us to grow and retain market share.

Got it. That's helpful. And then on the OpEx side, if I could, could you clarify if you're expecting -- and I apologize if I missed this, if you're expecting any OpEx cuts in the guide for this year? And I don't know if you can talk about next year yet.

Yes. We're not talking about next year yet, Puneet. I think we continue to achieve operating efficiencies and expect, we'll see some operating efficiencies in the back half of the year. And I think there's -- we have, I'd say, a high focus on continuing to see improvements there.

This does conclude today's question-and-answer session. I would now like to turn the floor back to Tony Zook for closing comments.

I would just like to thank everybody for joining us on the call. I do appreciate the direct questions and the opportunity to present our results and as well our direction moving forward. I would like to remind everyone, though, that we did do a pretty good job on that clinical side. We grew that business 16%. We had a record quarter for volumes, really exciting NGS growth rate, and we are poised to continue to drive performance in the second half of the year. And as Andrew opened the call, I will close it. It's up to us to now deliver quarter-on-quarter and regain that confidence in our delivery. So thank you for the time, and we look forward to other conversations.

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