Q2 2024 NeoGenomics Inc Earnings Call

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Operator: Please continue to hold. Your conference will begin momentarily. [inaudible] Welcome to the Neogenomics Second Quarter 2024 Financial Results Conference Call and Webcast. This time, all participants are in a listen-only mode.

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Speaker Change: Thank you.

Unknown Executive: Welcome to the Neogenomics second quarter, 2024 financial results conference call on webcast. At this time, all participants are in a listen-only mode. Please know this call is being recorded, and an audio replay will be available on the company's website.

Kendra Sweeney: Welcome to the Neogenomics Second Quarter 2024 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Please note, this call is being recorded and an audio replay will be available on the company's website. Kendra Sweeney, Vice President of Investor Relations, you may begin your conference.

Operator: Please note, this call is being recorded, and an audio replay will be available on the company's website. Kendra Sweeney, Vice President of Investor Relations, you may begin your presentation. Thank you, John. Good afternoon, everyone, and welcome to the Neogenomics Second Quarter 2024 Financial Results Call. With me today to discuss the results are Chris Smith, Chief Executive Officer, and Jeff Sherman, Chief Financial Officer. Additional members of the management team are available for Q&A, including Warren Stone, Chief Commercial Officer, Melody Harris, Chief Operations Officer and President of Informatics, Dr. Nate Montgomery, Head of Medical, and Kareem Saad, Head of Strategy and Transformation. This call is being simultaneously webcast.

Kendra Sweeney: Kendra Sweeney, Vice President of Investor Relations; you may begin your conference.

Unknown Executive: Thank you, John.

Kendra Sweeney: Good afternoon, everyone, and welcome to the NeoGenomics second quarter, 2024 financial results call. With me today to discuss the results are Chris Smith, Chief Executive Officer, and Jess Sherman, Chief Financial Officer. Additional members of the management team are available for Q&A, including Warren Stone, Chief Commercial Officer, Melody Harris, Chief Operations Officer, and President of Informatics, Dr. Nate Montgomery, Head of Medical, and Karin Soud, Head of Strategy and Transformation. This call is being simultaneously webcast. We'll be referring to a slide presentation that has been posted to the Investors tab on our website at ir.neogenomics.com. Starting on slide two, during this call, we will make forward-looking statements regarding our anticipated future performance.

Kendra Sweeney: Thank you, John . Good afternoon, everyone, and welcome to the Neogenomics Second Quarter 2024 Financial Results Call.

Speaker Change: With me today to discuss the results are Chris Smith, Chief Executive Officer, and Jeff Sherman, Chief Financial Officer. Additional members of the management team are available for Q&A, including Warren Stone, Chief Commercial Officer, Melody Harris, Chief Operations Officer and President of Informatics,

Speaker Change: Dr. Nate Montgomery, Head of Medical, and Kareem Saad, Head of Strategy and Transformation. This call is being simultaneously webcast. We'll be referring to a slide presentation that has been posted to the Investors tab on our website at ir.neogenomics.com.

Kendra Sweeney: We'll be referring to a slide presentation that has been posted to the Investors tab on our website at ir.neogenomics.com. Starting on slide two, during this call, we will make forward-looking statements regarding our anticipated future performance. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially.

Speaker Change: Starting on slide 2, during this call, we will make forward-looking statements regarding our anticipated future performance. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially.

Kendra Sweeney: We caution you that such statements reflect our best judgment based on factors currently known to us, and that actual events or results could differ materially. Please refer to our most recent forms, 10-K, 10-Q, and 8-K. 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. The forward-looking statements made during this call speak only as of the original date of the call, and we undertake no obligation to update or revise any of these statements. During this call, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results.

Kendra Sweeney: Please refer to our most recent forms 10-K, 10-Q, and 8-K 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. The forward-looking statements made during this call speak only as of the original date of the call, and we undertake no obligation to update or revise any of these statements. 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 and are unlikely to be comparable to non-GAAP financial measures provided by other companies.

Speaker Change: Please refer to our most recent forms 10-K, 10-Q, and 8-K 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.

Speaker Change: The forward-looking statements made during this call speak only as of the original date of the call, and we undertake no obligation to update or revise any of these statements.

Speaker Change: During this call, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results.

Kendra Sweeney: The non-GAAP financial measures presented should not be considered in an alternative to the financial measures required by GAAP and are unlikely to be comparable to non-GAAP financial measures provided by other companies.

Speaker Change: The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP and are unlikely to be comparable to non-GAAP financial measures provided by other companies.

Kendra Sweeney: 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. I will now turn the call over to Chris Smith, Chief Executive Officer of Neogenomics. Thanks, Kendra.

Kendra Sweeney: Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures and a table available in a press release issued this afternoon.

Speaker Change: 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. I will now turn the call over to Chris Smith, Chief Executive Officer of Neogenomics.

Kendra Sweeney: I will now turn the call over to Chris Smith, Chief Executive Officer of NeoGenomics.

Christopher Smith: Thanks, Kendra. Good afternoon, everyone, and thanks for joining us today. On today's call, we'll discuss the highlights of our strong second-quarter performance and provide an update on the progress made in accelerating profitable revenue growth.

Christopher Michael Smith: Good afternoon, everyone, and thanks for joining us today. On today's call, we'll discuss the highlights of our strong second quarter performance and provide an update on the progress made in accelerating profitable revenue growth. Before we discuss our financial results, I want to thank all of our NEO teammates for their continued commitment to our mission and vision. Together, we are serving patients and saving lives. Let's get into the highlights on the next slide.

Christopher Michael Smith: Thanks, Kendra. Good afternoon, everyone, and thanks for joining us today. On today's call, we'll discuss the highlights of our strong second quarter performance and provide an update on the progress made in accelerating profitable revenue growth.

Christopher Smith: Before we discuss our financial results, I want to thank all of our NEO teammates for their continued commitment to our mission and vision. Together, we are serving patients and saving lives. West. Let's get into the highlights on the next slide. We continue to execute on our goal to deliver double-digit year-over-year growth. Include to revenue grew 12% as compared to the second quarter last year. To achieve this result, we grew both volume and revenue per test and expanded gross margin. NGS continues to be a key driver for growth, increasing approximately 40% and representing 30% of our total clinical revenue.

Christopher Michael Smith: Before we discuss our financial results, I want to thank all of our NEO teammates for their continued commitment to our mission and vision. Together we are serving patients and saving lives.

Christopher Michael Smith: We continue to execute on our goal to deliver double-digit year-over-year growth. In Q2, revenue grew 12% as compared to the second quarter last year. To achieve this result, we grew both volume and revenue per test and expanded gross margin. NGS continues to be a key driver for growth, increasing approximately 40% and representing 30% of our total clinical revenue. We are also proud that we have delivered the fourth consecutive quarter of positive adjusted EBITDA and are generating even more leverage in the business. On the operational front, the alignment of our clinical and pharma teams into a single commercial group is taking hold as the pharma business begins to stabilize.

Christopher Michael Smith: Let's get into the highlights on the next slide. We continue to execute on our goal to deliver double-digit year-over-year growth. In Q2, revenue grew 12% as compared to the second quarter last year. To achieve this result, we grew both volume and revenue per test and expanded gross margin.

Christopher Michael Smith: NGS continues to be a key driver for growth increasing approximately 40% and representing 30% of our total clinical revenue.

Christopher Smith: We are also proud that we have delivered the fourth consecutive quarter of positive adjusted EBITDA and are generating even more leverage in the business. On the operational front, the alignment of our clinical and pharma teams into a single commercial group is taking hold as pharma business begins to stabilize. Our LIMS project reached a key milestone this quarter and has on track to support several aspects of lab automation and improved efficiencies as we grow volumes with new product launches in the second half of this year and into 2025. All of this puts us in a great position to raise our revenue guide for the year and to significantly increase our adjusted EBITDA type.

Christopher Michael Smith: We are also proud that we have delivered the fourth consecutive quarter of positive adjusted EBITDA and are generating even more leverage in the business.

Christopher Michael Smith: On the operational front, the alignment of our clinical and pharma teams into a single commercial group is taking hold as pharma business begins to stabilize.

Christopher Michael Smith: Our LIMS project reached a key milestone this quarter and is on track to support several aspects of lab automation and improved efficiencies as we grow volumes with new product launches in the second half of this year and into 2025. All of this puts us in a great position to raise our revenue guide for the year and to significantly increase our adjusted EBITDA guide. Turning now to our progress on our strategic priorities, these priorities are directly aligned with our goal to grow revenue by double digits, expand gross margins, and generate long-term sustainable earnings growth.

Christopher Michael Smith: Our LIMS project reached a key milestone this quarter and is on track to support several aspects of lab automation and improved efficiencies as we grow volumes with new product launches in the second half of this year and into 2025.

Christopher Michael Smith: All of this puts us in a great position to raise our revenue guide for the year and to significantly increase our adjusted EBITDA guide.

Christopher Smith: Turning now to our progress on our strategic priorities, these priorities are directly aligned with our goal to grow revenue double digits, expand gross margins, and generate long-term sustainable earnings growth. Today, I'm going to focus on our three financial pillars: probably grow the core business, accelerate advanced diagnostics and innovation, and drive value creation. Our clinical business continues to execute on our commercial strategy to deliver volume growth, increase AUP, and improve mixed room by strengthening NGS. We continue to increase our presence in market leadership in HEM. We will launch a rapid AML test in the second half of the year, and this combined with our exceptional customer service continues to position us well in this space.

Christopher Michael Smith: Turning now to our progress on our strategic priorities, these priorities are directly aligned with our goal to grow revenue double digits, expand gross margins, and generate long-term sustainable earnings growth.

Christopher Michael Smith: Today, I'm going to focus on our three financial pillars, profitably grow the core business, accelerate advanced diagnostics and innovation, and drive value creation. Our clinical business continues to execute on our commercial strategy to deliver volume growth, increase AUP, and improve mix driven by strength and NGS. We continue to increase our presence in market leadership in HEME. We will launch a rapid AML test in the second half of the year, and this, combined with our exceptional customer service, continues to position us well in this space.

Christopher Michael Smith: Today I'm going to focus on our three financial pillars, profitably grow the core business, accelerate advanced diagnostics and innovation, and drive value creation.

Christopher Michael Smith: Our clinical business continues to execute on our commercial strategy to deliver volume growth, increase AUP, and improve mix driven by strength and NGS.

Christopher Michael Smith: We continue to increase our presence and market leadership in HEIM. We will launch a rapid AML test in the second half of the year, and this, combined with our exceptional customer service, continues to position us well in this space.

Christopher Smith: Through our CM initiatives, we're continuing to expand our commercial coverage and having success in reducing denials to ensure we're getting paid for the work that we do. The combination of the large cancer market opportunity with our continued commercial success enables us to accelerate our investment in the commercial team to capitalize on this opportunity in the outlying years. Our January 24 expansion is beginning to show positive return on investment, and as we look to 2025 with the launch of new products and our goal to further expand our reach deeper into community oncology segment, we will continue to expand our commercial resources before you're in.

Christopher Michael Smith: Through RCM initiatives, we're continuing to expand our commercial coverage and have had success in reducing denials to ensure that we're getting paid for the work that we do. The combination of the large cancer market opportunity with our continued commercial success enables us to accelerate our investment in the commercial team to capitalize on this opportunity in the coming years. Our January 24 expansion is beginning to show a positive return on our investment. And as we look to 2025 with the launch of new products and our goal to further expand our reach deeper into the community oncology segment, we will continue to expand our commercial resources before year end. The effectiveness of our sales force, meaning the time they spend on high-impact selling activities, continues to improve quarter over quarter through the use of digital tools and strategic targeting informed by proprietary CRM data.

Christopher Michael Smith: Through RCM initiatives, we're continuing to expand our commercial coverage and having success in reducing denials to ensure we're getting paid for the work that we do.

Christopher Michael Smith: The combination of the large cancer market opportunity with our continued commercial success enables us to accelerate our investment in the commercial team to capitalize on this opportunity in the outlying years.

Christopher Michael Smith: Our January 24 expansion is beginning to show positive return on our investment, and as we look to 2025 with the launch of new products and our goal to further expand our reach deeper into the community oncology segment, we will continue to expand our commercial resources before year-end.

Christopher Smith: The effectiveness of our sales force, meaning time they spend on high impact selling activities, continues to improve quarter over quarter through the use of digital tools and strategic targeting informed by proprietary CRM data. Productivity will continue to increase over the next years as we incorporate guided selling AI tools and other enabling investments.

Christopher Michael Smith: The effectiveness of our sales force, meaning time they spend on high-impact selling activities, continues to improve quarter-over-quarter through the use of digital tools and strategic targeting informed by proprietary CRM data.

Christopher Michael Smith: Productivity will continue to increase over the next few years as we incorporate guided selling, AI tools, and other enabling investments. The Advanced Diagnostics and Innovation Pillar looks to the future of the industry with new technologies and data. Utilizing our current resources and executing on the right opportunities positions us well for long-term sustainable growth.

Christopher Michael Smith: Productivity will continue to increase over the next few years as we incorporate guided selling, AI tools, and other enabling investments.

Christopher Smith: The advanced diagnostics and innovation pillar looks to the future of the industry with new technologies and data, utilizing our current resources and executing on the right opportunities, positioned as well for long-term sustainable growth. We believe innovation is a turbo charge for growth, so we'll continue to focus on bringing in new innovative products to the market to enhance patient care. We operate in a growing attractive market; we know cancer incidence prevalence are on the rise. Statistically, one in two men and one in three women will develop cancer in their lifetime. They will can part of a patient population that is seeking answers from oncology testing that will give them the best opportunity for positive outcomes.

Christopher Michael Smith: The Advanced Diagnostics and Innovation Pillar looks to the future of the industry with new technologies and data.

Christopher Michael Smith: Utilizing our current resources and executing on the right opportunities position us well for long-term sustainable growth.

Christopher Michael Smith: We believe innovation is a turbocharger for growth, so we'll continue to focus on bringing new, innovative products to the market to enhance patient care. We operate in a growing, attractive market. We know cancer incidence and prevalence are on the rise. Statistically, one in two men and one in three women will develop cancer in their lifetime.

Christopher Michael Smith: We believe innovation is a turbocharger for growth, so we'll continue to focus on bringing in new, innovative products to the market to enhance patient care.

Christopher Michael Smith: We operate in a growing attractive market.

Speaker Change: We know cancer incidence and prevalence are on the rise. Statistically, one in two men and one in three women will develop cancer in their lifetime. They will become part of a patient population that is seeking answers from oncology testing that will give them the best opportunity for positive outcomes.

Christopher Michael Smith: They will become part of a patient population that is seeking answers from oncology testing that will give them the best opportunity for positive outcomes. We are focused on developing innovative tests in the diagnostic and therapy selection markets that will provide actionable insights to inform patients on their Cancer Journey. Our breadth of menu, with over 600 tests, is a key differentiator for the oncology customer segments that we serve, and we are committed to expanding our product offering by adding new tests to help deliver innovative care for patients and a more seamless experience for physicians that care for these patients.

Christopher Smith: We are focused on developing innovative test and diagnostic and therapy selection markets that will provide actionable insights to inform patient cancer journey. Our breadth of menu with over 600 tests is a key differentiator for the oncology customer segments that we serve, and we are committed to expanding our product offering by adding new tests to help deliver innovative care for patients and a more seamless experience for physicians that care for these patients. We have three innovative NGS tests in the late stage development and are targeting a launch of two of these tests over the next six months.

Speaker Change: We are focused on developing innovative tests and diagnostic and therapy selection markets that will provide actionable insights to inform patient cancer journey.

Speaker Change: Our breadth of menu, with over 600 tests, is a key differentiator for the oncology customer segments that we serve, and we are committed to expanding our product offering by adding new tests to help deliver innovative care for patients and a more seamless experience for physicians that care for these patients.

Christopher Michael Smith: We have three innovative NGS tests in late stage development and are targeting to launch two of these tests over the next six months. If you turn to slide 10, the HEIMS segment comprises approximately 20% of the opportunity and is growing approximately 11% annually. NEO has traditionally been viewed as a market leader in this segment, and we intend to continue leading with a differentiated suite of products and an integrated superior customer experience, which our customers have come to expect from us.

Speaker Change: We have three innovative NGS tests in the late stage development and are targeting to launch two of these tests over the next six months.

Christopher Smith: 1% of the opportunity is growing approximately 11% annually. Neo has traditionally been viewed as a market leader in this segment, and we intend to continue leading with a differentiated suite of products and the integrated superior customer experience, which our customers have come to expect from us. A liquid biopathy CGP test will launch commercially for pharma this quarter, and a rapid AML test will launch by year end.

Speaker Change: If you turn to slide 10, the HEMES segment comprises approximately 20% of the opportunity and is growing approximately 11% annually.

Speaker Change: NEO has traditionally been viewed as a market leader in this segment, and we intend to continue leading with a differentiated suite of products and an integrated superior customer experience, which our customers have come to expect from us.

Christopher Michael Smith: A liquid biopsy CGP test will launch commercially for pharma this quarter, and a rapid AML test will launch by year-end. Let me take a minute to talk about why I think these tests are important. There are over 20,000 cases of acute myeloid leukemia that will be diagnosed this year, and we have a strong presence in this market. Our new NeoAML Express is an enhanced NGS panel that detects DNA and RNA biomarkers for AML that are most relevant to diagnosis, therapy selection, and clinical trial options.

Speaker Change: A liquid biopsy CGP test will launch commercially for pharma this quarter, and a rapid AML test will launch by year-end.

Christopher Smith: Let me take a minute to talk about why I think these tests are important. There are over 20,000 cases of acute myeloid leukemia that will be diagnosed this year, and we have a strong presence in this market. Our new Neo AML Express is an enhanced NGS panel that detects DNA and RNA biomarkers for AML that are most relevant to diagnosis, therapy selection, and critical clinical trial options. Most importantly, Neo AML Express has a rapid two to three day turnaround time, up to two days faster than any other tests on the market, including our own industry leading test.

Speaker Change: Let me take a minute.

Speaker Change: to talk about why I think these tests are important.

Speaker Change: There are over 20,000 cases of acute myeloid leukemia that will be diagnosed this year and we have a strong presence in this market.

Speaker Change: Our new NeoAML Express is an enhanced NGS panel that detects DNA and RNA biomarkers for AML that are most relevant to diagnosis, therapy selection, and clinical trial options.

Christopher Michael Smith: Most importantly, NeoAML Express has a rapid two- to three-day turnaround time, up to two days faster than any other test on the market, including our own industry-leading test. This means an AML patient who is admitted to the hospital and waiting for their diagnosis could be tested using AML Express and begin their treatment up to 48 hours sooner than with other tests.

Speaker Change: Most importantly...

Speaker Change: NeoAML Express has a rapid 2-3 day turnaround time.

Christopher Smith: This means an AML patient who is admitted to the hospital and waiting for their diagnosis could be tested using AML Express and begin their treatment up to 48 hours sooner than with other tests. In pharma setting, AML Express delivers a rapid and detailed insights that means stratified patients by prospective clinical trials within 72 hours. We anticipate this test will launch in both clinical and pharma segments in Q4. The Neo Pancer liquid biopsy is a large panel NGS assay for genomic profiling from whole blood samples. The panel detects all major variant classes as well as signatures, including MSI and TMB.

Speaker Change: Up to two days faster than any other test on the market, including our own industry-leading test. This means an AML patient who is admitted to the hospital and waiting for their diagnosis could be tested using AML-Express and begin their treatment up to 48 hours sooner than with other tests.

Christopher Michael Smith: In a pharma setting, AML Express delivers rapid and detailed insights that can be stratified by prospective clinical trials within 72 hours. We anticipate this test will launch in both clinical and pharmaceutical segments in Q4. The neopancer liquid biopsy is a large panel NGS assay for genomic profiling from whole blood samples. The panel detects all major variant classes, as well as signatures, including MSI and TMB. It provides genomic profiling results from ctDNA even when sufficient tissue samples are unavailable.

Speaker Change: In pharma setting, AML Express delivers a rapid and detailed insight, saving stratified patients by prospective clinical trials within 72 hours.

Speaker Change: We anticipate this test will launch in both clinical and pharma segments in Q4.

Speaker Change: The neopancer liquid biopsy is a large-panel NGS assay for genomic profiling from whole blood samples.

Speaker Change: The panel detects all major variant classes, as well as signatures, including MSI and TMB. It provides genomic profiling results from ctDNA, even when sufficient tissue samples are unavailable.

Christopher Smith: It provides genomic profiling results from ctDNA even when sufficient tissue samples are unavailable. We believe this assay has the potential to be differentiator for pharma because of its large panel size, minimal sample input, and highly competitive sensitivity and specificity. In the clinical setting, Neo pan tracer will be one of the most comprehensive and highly sensitive liquid biopsy panels on the market, complementing traditional tissue testing for therapy selection and advanced state solid tumors. The results will be available in as few as seven days, which is appealing to providers as it accelerates the speed at which they can treat their patients.

Christopher Michael Smith: We believe this assay has the potential to be a differentiator for pharma because of its large panel size, minimal sample input, and highly competitive sensitivity and specificity. In the clinical setting, Neopantracer will be one of the most comprehensive and highly sensitive liquid biopsy panels on the market, complementing traditional tissue testing for therapy selection in advanced stage solid tumors. The results will be available in as few as seven days, which is appealing to providers as it accelerates the speed at which they can treat their patients.

Speaker Change: We believe this assay has the potential to be a differentiator for pharma because of its large panel size, minimal sample input, and highly competitive sensitivity and specificity.

Speaker Change: In the clinical setting, Neopantracer will be one of the most comprehensive and highly sensitive liquid biopsy panels on the market.

Speaker Change: complementing traditional tissue testing for therapy selection in advanced stage solid tumors.

Speaker Change: The results will be available in as few as seven days, which is appealing to providers as it accelerates the speed at which they can treat their patients.

Christopher Smith: We are targeting the clinical early access launch for lung in Lake Q4 and the pan cancer in Q1 2025. Beyond providing insights to optimize patient care in the clinical setting, these new tests will help improve operating margins in our pharma business as well as continue the transformation of that business. As well as deliver more robust and valuable real-world data to fuel our informatics business.

Christopher Michael Smith: We're targeting the clinical early access launch for lung in late Q4 and for pancancer in Q1 2025. Beyond providing insights to optimize patient care in the clinical setting, these new tests will help improve operating margins in our pharma business as well as continue the transformation of that business, as well as deliver more robust and valuable real-world data to fuel our informatics business. Speaking of the informatics business, let me give you a quick update on where we are today.

Speaker Change: We are targeting the clinical early access launch for lung in late Q4 and the pan-cancer in Q1 2025.

Speaker Change: Beyond providing insights to optimize patient care in the clinical setting, these new tests will help improve operating margins in our pharma business, as well as continue the transformation of that business, as well as deliver more robust and valuable real-world data to fuel our informatics business.

Christopher Smith: Speaking of informatics business, let me give you a quick update on where we are today. If you take a step back and think about the number of tests we've run over the last few years across the cancer continuum for over half a million patients annually, you see we are sitting on a valuable asset of oncology diagnostic data. Even more so, we are using multiple testing modalities with digitized images for most solid tumor samples and creating depth in that data. Farma uses our diagnostic results in a combination with raw data to enhance the biomarker discovery, expand R&D to drive their pipeline, support regulatory filings, and ultimately advance their commercialization.

Christopher Michael Smith: If you take a step back and think about the number of tests we've run over the last few years across the cancer continuum for over half a million patients annually, you see we are sitting on a valuable asset of oncology diagnostic data. Even more so, we are using multiple testing modalities with digitized images for most solid tumor samples and creating depth in that data.

Speaker Change: Speaking of informatics business, let me give you a quick update on where we are today. If you take a step back and think about the number of tests we've run over the last few years across the cancer continuum for over half a million patients annually, you see we are sitting on a valuable asset of oncology diagnostic data.

Speaker Change: Even more so, we are using multiple testing modalities with digitized images for most solid tumor samples and creating depth in that data.

Christopher Michael Smith: PhRMA uses our diagnostic results in combination with raw data to enhance biomarker discovery, expand R&D to drive their pipeline, support regulatory filings, and ultimately advance their commercialization. So as we increase the volume of our testing from our clinical business, we likewise expand the breadth and depth of our data assets, which increases our monetization of capacity for our informatics data customers. To further drive operating efficiencies, we continue to optimize our lab footprint and invest in productivity. For example, our lab in Loya has been decommissioned, and other sites have been validated for testing specimens that were historically routed there.

Speaker Change: PhRMA uses our diagnostic results in a combination with raw data to enhance the biomarker discovery, expand R&D to drive their pipeline, support regulatory filings, and ultimately advance their commercialization.

Christopher Smith: So as we increase the volume of our testing from our clinical business, we likewise expand the breadth and depth of our data assets, which increases our monetization of capacity for our informatics data customer. To further drive operating efficiencies, we continue to optimize our lab footprint and invest in productivity. Our lab in Loya has been decommissioned, and other sites have been validated for testing specimens that were historically routed there. Meanwhile, the expansion of our rally lab is well underway. Automation and increased productivity are leading to improvements in turnaround time and margin expansion. Our digital transformation is well underway through the implementation of our new LIMS system, which will include a customer digital portal and enhanced enterprise-wide technical architecture.

Speaker Change: So as we increase the volume of our testing from our clinical business, we likewise expand the breadth and depth of our data assets, which increases our monetization of capacity for our informatics data customers.

Speaker Change: To further drive operating efficiencies, we continue to optimize our lab footprint and invest in productivity.

Speaker Change: Our lab in Loya has been decommissioned and other sites have been validated for testing specimens that were historically routed there.

Christopher Michael Smith: Meanwhile, the expansion of our Raleigh lab is well underway. Automation and increased productivity are leading to improvements in turnaround time and margin expansion. Our digital transformation is well underway through the implementation of our new LIMS system, which will include a customer digital portal and Enhanced Enterprise-Wide Technical Architecture.

Speaker Change: Meanwhile, the expansion of our Raleigh lab is well underway.

Speaker Change: Automation and increased productivity are leading to improvements in turnaround time and margin expansion.

Speaker Change: Our digital transformation is well underway through the implementation of our new LIMS system, which will include a customer digital portal and enhanced enterprise-wide technical architecture.

Christopher Smith: This enables us to further improve stickiness and increase our focus on integrations with our customers' EMRs. Finally, our new LIMS and digital transformation are being implemented in a way that positions us well to comply with future regulations of lab development.

Christopher Michael Smith: This enables us to further improve stickiness and increase our focus on integrations with our customers' EMRs. Finally, our new limbs and digital transformation are being implemented in a way that positions us well to comply with future regulations on lab development. From a legal perspective, we remain committed to ensuring patients will once again have access to our radar technology. On June 6th, Moldex granted approval for reoccurrence monitoring and respectable HPV negative head and neck cancer. Radar is currently the only MRD test with MOLDEX approval for this indication.

Speaker Change: This enables us to further improve stickiness and increase our focus on integrations with our customers' EMRs.

Speaker Change: Finally, our new limbs and digital transformation are being implemented in a way that positions us well to comply with future regulations of lab-developed tests.

Christopher Smith: From a legal perspective, we remain committed to ensuring patients will once again have access to our radar technology. On June 6, Moldex granted approval for reoccurrence monitoring and respectable HPV negative edded neck cancer. Radar is currently the only MRD test with Moldex approval for this indication. On July 12, the appeals court upheld the preliminary injunction against radar, but did lay out the possibility for Neo to go back to the district court to modify the injunction to carve out head and neck cancer. With this news, we are evaluating our options. We will continue to vigorously defend our technology in the district court for the benefit of all cancer patients.

Speaker Change: From a legal perspective, we remain committed to ensuring patients will once again have access to our radar technology.

Speaker Change: On June 6th, Moldex granted approval for reoccurrence monitoring and resectable HPV negative head and neck cancer.

Speaker Change: Radar is currently the only MRD test with MOLDEX approval for this indication.

Christopher Michael Smith: On July 12, the appeals court upheld the preliminary injunction against RADAR but did lay out the possibility for NEO to go back to the district court to modify the injunction to carve out head and neck cancer. With this news, we are evaluating our; we will continue to vigorously defend our technology in the district court for the benefit of all cancer patients. Beyond the litigation pathway, we continue to develop new MRD assays, as well as evaluate opportunities for in-licensing or strategic partnership arrangements to enhance and bolster our efforts to drive innovation and bring optionality to patients who can benefit from MRD testing.

Speaker Change: On July 12, the appeals court upheld the preliminary injunction against RADAR, but did lay out the possibility for NEO to go back to the district court to modify the injunction to carve out head and neck cancer.

Speaker Change: With this news, we are evaluating our options.

Speaker Change: We will continue to vigorously defend our technology in the district court for the benefit of all cancer patients.

Christopher Smith: Beyond litigation pathway, we continue to develop new MRD assays, as well as evaluate opportunities for in-licensing or strategic partnership arrangements to enhance and bolster our efforts to drive innovation and bring optionality to patients who can benefit from MRD testing. As we've stated in the past, we are committed to being in the MRD market and supporting patients through their cancer journey from diagnosis to monitoring.

Speaker Change: Beyond litigation pathway, we continue to develop new MRD assays, as well as evaluate opportunities for in-licensing or strategic partnership arrangements to enhance and bolster our efforts to drive innovation and bring optionality to patients who can benefit from MRD testing.

Christopher Michael Smith: As we've stated in the past, we are committed to being in the MRD market and supporting patients through their cancer journey from diagnosis to monitoring. Now, let me hand it over to Jeff, so he can go through a little more detail on our financial results. Thanks, Chris.

Speaker Change: As we've stated in the past, we are committed to being in the MRD market and supporting patients through their cancer journey from diagnosis to monitoring. Now let me hand it over to Jeff so he can go through in a little more detail our financial results.

Jeffrey Sherman: Now, let me hand it over to Jeff so he can go through a little more detail on our financial results.

Jeffrey Sherman: Thanks, Chris. I'll start with a little more detail on our operating results for the quarter. We delivered a strong overall performance in Q2, led by yet another quarter of double-digit revenue growth, increasing 12% over the prior year to 165 million. The combination of clinical test volume growth, the ongoing shift to higher value tests, and improvements in revenue per test due to RCM initiatives continue to drive revenue growth. Adjust the growth profit was up 20% to 78 million, and adjust the growth margins improved by 320 basis points to 47.3%. Adjust the EBITDA improved 630% from prior year to positive $11 million.

Jeffrey S. Sherman: I'll start with a little more detail on our operating results for the quarter. We delivered a strong overall performance in Q2, led by yet another quarter of double-digit revenue growth, increasing 12% over the prior year to $165 million. The combination of clinical test volume growth, the ongoing shift to higher-value tests, and improvements in revenue per test due to RCM initiatives continue to drive revenue growth. Adjusted gross profit was up 20% to $78 million, and adjusted gross margins improved by 320 basis points to 47.3%. Adjusted EBITDA improved 630% from the prior year to a positive $11 million.

Jeff: Thanks Chris. I'll start with a little more detail on our operating results for the quarter. We delivered a strong overall performance in Q2 led by yet another quarter of double-digit revenue growth increasing 12% over the prior year to 165 million.

Jeff: The combination of clinical test volume growth, the ongoing shift to higher value tests, and improvements in revenue per test due to RCM initiatives continue to drive revenue growth.

Jeff: Adjusted gross profit was up 20% to $78 million and adjusted gross margins improved by 320 basis points to 47.3 percent.

Jeff: Adjusted EBITDA improved 630% from prior year to positive $11 million. As Chris said, Q2 was our fourth consecutive quarter of positive Adjusted EBITDA.

Jeffrey S. Sherman: As Chris said, Q2 was our fourth consecutive quarter of positive adjusted EBITDA. Clinical services revenue of $141 million was an increase of 15% over the prior year driven by a 9% increase in revenue per test due to a mix in pricing and a 6% increase in volume. Salesforce penetration into the community oncology setting is increasing adoption of NGS testing and driving higher volume growth. The strong demand for NGS testing and the insights it provides continues to fuel revenue growth and earnings.

Jeffrey Sherman: As Chris said, Q2 was our fourth consecutive quarter of positive adjusted EBITDA. Clinical services revenue of $141 million was an increase of 15% over prior year, driven by a 9% increase in revenue per test due to mix and pricing, and a 6% increase in volume. Salesforce penetration into the community oncology setting is increasing adoption of NGS testing and driving higher volume growth. The strong demand for NGS testing and the insights it provides continues to fuel revenue growth and earnings. As a reminder, we saw rapid growth in our NGS business in 2023, including the introduction of the large panel on the O Comprehensive Solid Tumor at the end of Q1 and my Lloyd Disorders testing Q3 of last year.

Christopher Michael Smith: Clinical services revenue of $141 million was an increase of 15% over prior year, driven by a 9% increase in revenue per test due to mix in pricing and a 6% increase in volume.

Speaker Change: Salesforce penetration into the community oncology setting is increasing adoption of NGS testing and driving higher volume growth. The strong demand for NGS testing and the insights it provides continues to fuel revenue growth and earnings.

Jeffrey S. Sherman: As a reminder, we saw rapid growth in our NGS business in 2023, including the introduction of the large panel neocomprehensive solid tumor at the end of Q1 and myeloid disorders testing in Q3. While we continue to expect strong growth in our NGS business in the back half of this year, the annualization effect of these tests will result in tougher comps as the year progresses. We delivered the 13th consecutive quarter of improvement in revenue per test, up 9% over the prior year to $454. NGS testing and RCM initiatives, including improved pricing, remain the biggest contributors to these improvements.

Speaker Change: As a reminder, we saw rapid growth in our NGS business in 2023, including the introduction of the large-panel neocomprehensive solid tumor at the end of Q1 and myeloid disorders testing Q3 of last year.

Jeffrey Sherman: While we continue to expect strong growth in our NGS business in the back half of this year, the annualization effect of these tests will result in tougher comps as the year progresses. We delivered the 13th consecutive quarter of improvement, and revenue protests up 9% over prior year to $454. NGS testing and RCM initiatives, including improved pricing, remain the biggest contributors to these improvements.

Speaker Change: While we continue to expect strong growth in our NGS business in the back half of this year, the annualization effect of these tests will result in tougher comps as the year progresses.

Speaker Change: We delivered the 13th consecutive quarter of improvement in revenue per test, up 9% over prior year to $454. NGS testing and RCM initiatives, including improved pricing, remain the biggest contributors to these improvements.

Jeffrey Sherman: Last quarter, we announced the restructuring of our commercial organization, leveraging the success of the clinical business as a blueprint for the farmer commercial business. Under Warren's leadership, this segment is stabilizing and delivered a quarter better than we forecasted. With Melody taking the reins for informatics, the business is developing a comprehensive plan to further expand the monetization opportunity of our data assets. With farmer and informatics combined into advanced diagnostics, revenue declined 3% over the prior year to 23.1 million, but did increase sequentially by 1.4 million or 6.5% over Q1. The year-over-year decline was primarily driven by international site closures, restructuring activities, and other macro-form and market conditions.

Jeffrey S. Sherman: Last quarter, we announced the restructuring of our commercial organization, leveraging the success of the clinical business as a blueprint for the pharma commercial business. Under Warren's leadership, this segment is stabilizing and delivered a quarter better than we forecast. With Melody taking the reins for informatics, the business is developing a comprehensive plan to further expand the monetization opportunity of our data assets. With pharma and informatics combined into advanced diagnostics, revenue declined 3% over the prior year to $23.1 million but did increase sequentially by $1.4 million, or 6.5% over Q1. The year-over-year decline was primarily driven by international site closures, restructuring activities, and other macro-pharma market conditions.

Speaker Change: Last quarter, we announced the restructuring of our commercial organization, leveraging the success of the clinical business as a blueprint for the pharma commercial business. Under Warren's leadership, this segment is stabilizing and delivered a quarter better than we forecasted.

Melody: With Melody taking the reins for Informatics, the business is developing a comprehensive plan to further expand the monetization opportunity of our data assets.

Melody: With pharma and informatics combined into advanced diagnostics, revenue declined 3% over the prior year to $23.1 million, but did increase sequentially by $1.4 million, or 6.5% over Q1.

Melody: The year-over-year decline was primarily driven by international site closures, restructuring activities, and other macro-pharma market conditions.

Jeffrey Sherman: However, our plan to optimize margins continues to improve ADX adjusted growth margins by 470 basis points over prior year, and we believe the businesses are now in the right track towards resuming year-over-year growth. Looking at the income statement, adjusted growth profit increased by 20% over prior year as a result of revenue growth and operating leverage generating higher adjusted growth profit and margins. Adjusted growth margin was 47.3%, and improvement of 320 basis points over the second quarter of last year. Regarding operating expenses, sales and marketing expense was 22 million, R&D expense was 8 million, and G&A expense was 63 million.

Jeffrey S. Sherman: However, our plan to optimize margins continues to improve ADX adjusted gross margins by 470 basis points over the prior year, and we believe the business is now on the right track towards resuming year-over-year growth. Looking at the income statement, adjusted gross profit increased by 20 percent over the prior year as a result of revenue growth and operating leverage, generating higher adjusted gross profit and margin. The adjusted gross margin was 47.3%, an improvement of 320 basis points over the second quarter of last year.

Melody: However, our plan to optimize margins continues to improve ADX adjusted growth margins by 470 basis points over prior year, and we believe the business is now on the right track towards resuming year-over-year growth.

Melody: Looking at the income statement, adjusted gross profit increased by 20% over prior year as a result of revenue growth and operating leverage generating higher adjusted gross profit and margins.

Melody: Adjusted gross margin was 47.3%, an improvement of 320 basis points over the second quarter of last year.

Jeffrey S. Sherman: Regarding operating expenses, sales and marketing expense was $22 million, R&D expense was $8 million, and G&A expense was $63 million. As a highlight, Adjusted EBITDA improved 630%, or $13 million versus the prior year, to $11 million as we work to generate additional leverage in the business. Turning to the balance sheet, we ended the second quarter with cash and marketable securities of $388 million.

Melody: Regarding operating expenses, sales and marketing expense was $22 million, R&D expense was $8 million, and G&A expense was $63 million.

Jeffrey Sherman: And as a highlight, adjusted EBITDA improved 630% or 13 million versus prior year to 11 million as we worked to generate additional leverage in the business. Turning to the balance sheet, we ended the second quarter with cash and marketable securities of 388 million. Cash flow from operations was a positive 14 million and improvement of 15 million or 997% as we recovered from payment delays primarily driven from the change health care data breach in the first quarter. Our May 2025 convertible notes with the principal balance of 201 million are now presented as current liabilities on our balance sheet.

Melody: And as a highlight, Adjusted EBITDA improved 630%, or $13 million versus prior year, to $11 million as we work to generate additional leverage in the business.

Melody: Turning to the balance sheet, we ended the second quarter with cash and marketable securities of $388 million.

Jeffrey S. Sherman: Cash flow from operations was a positive $14 million, an improvement of $15 million, or 997%, as we recovered from payment delays primarily driven from the changed healthcare data breach in the first quarter. Our May 2025 convertible notes, with a principal balance of $201 million, are now presented as current liabilities on our balance sheet. Given our strong cash position and liquidity profile, we plan to use our existing cash and marketable securities to retire the 2025 notes in May.

Melody: Cash flow from operations was a positive $14 million, an improvement of $15 million, or 997%, as we recovered from payment delays primarily driven from the changed health care data breach in the first quarter.

Melody: Our May 2025 convertible notes, with a principal balance of $201 million, are now presented as current liabilities on our balance sheet.

Jeffrey Sherman: Given our strong cash position and liquidity profile, we plan to use our existing cash and marketable securities to retire the 2025 notes in May.

Melody: Given our strong cash position and liquidity profile, we plan to use our existing cash and marketable securities to retire to 2025 notes in May.

Jeffrey Sherman: Now let's move on to our revised guidance. Given our strong performance in the first half of the year with revenue growth of 13% and our expectations for continued momentum, along with our Salesforce expansion and new product launches later this year, we are in a position to raise our revenue guide for the year. And significantly increase our adjusted EBITDA guide. Previously, the revenue guide was 650 to 660 million. We are now expecting revenue in the range of 655 to 667 million, representing 11 to 13% growth. The pacing of the second half revenue growth will be more heavily weighted in the fourth quarter, with new product introductions, securing new business and the final stages of closing, and the continued success of our Salesforce optimization and expansion efforts.

Jeffrey S. Sherman: Now let's move on to our revised guidance. Given our strong performance in the first half of the year, with revenue growth of 13 percent and our expectations for continued momentum, along with our Salesforce expansion and new product launches later this year, we are in a position to raise our revenue guide for the year and significantly increase our adjusted EBITDA guide. Previously, the revenue guide was $650 to $660 million. We are now expecting revenue in the range of $655 to $667 million, representing 11% to 13% growth.

Melody: Now let's move on to our revised guidance.

Melody: Given our strong performance in the first half of the year, with revenue growth of 13%,

Melody: And our expectations for continued momentum, along with our Salesforce expansion and new product launches later this year, we are in a position to raise our revenue guide for the year and significantly increase our adjusted EBITDA guide.

Melody: Previously the revenue guide was 650 to 660 million. We are now expecting revenue in the range of 655 to 667 million, representing 11 to 13 percent growth.

Jeffrey S. Sherman: The pacing of the second half revenue growth will be more heavily weighted in the fourth quarter with new product introductions, securing new business in the final stages of closing, and the continued success of our Salesforce optimization and expansion efforts. The previous adjusted EBITDA guide was $21 to $24 million.

Melody: The pacing of the second half revenue growth will be more heavily weighted in the fourth quarter with new product introductions, securing new business in the final stages of closing, and the continued success of our Salesforce optimization and expansion efforts.

Jeffrey Sherman: The previous adjusted EBITDA guide was 21 to 24 million; we are now completely resetting that range with our revised guidance range of 33 to 37 million, representing growth of over 1,000% versus last year, and a 55% improvement from the original guidance at the midpoint.

Christopher Michael Smith: We are now completely resetting that range with our revised guidance range of $33 to $37 million, representing growth of over 1,000% versus last year and a 55% improvement from the original guidance at the midpoint. And with that, I'll hand it back to Chris to wrap up. Thanks, Jeff. It's been a great quarter, and I'm proud of our teammates for working so hard to sustain performance that delivers these results.

Melody: The previous adjusted EBITDA guide was $21-24 million. We are now completely resetting that range with our revised guidance range of $33-37 million, representing growth of over 1,000% versus last year and a 55% improvement from the original guidance at the midpoint.

Christopher Smith: And with that, I'll hand it back to Chris to wrap up.

Christopher Smith: Thanks, Jeff. It's been a great quarter, and I'm proud of our teammates for working so hard to sustain performance that delivers the results. We plan on launching three exciting products over the next 12 months to further strengthen our strong position in hospitals with pathologists and better position us with community oncologists.

Melody: And with that, I'll hand it back to Chris to wrap up. Thanks, Jeff. It's been a great quarter, and I'm proud of our teammates for working so hard to sustain performance that delivers these results.

Operator: We plan on launching three exciting products over the next 12 months to further strengthen our strong position in hospitals with pathologists and better position us with community oncologists. In addition, we continue to gain operating leverage on the business as we execute our priorities. With all these things, we're confident in the remainder of 2024 and therefore raising guidance. We'll end our prepared remarks there and open it up for questions and turn it back over to the operator.

Christopher Michael Smith: We plan on launching three exciting products over the next 12 months to further strengthen our strong position in hospitals with pathologists and better position us with community oncologists. In addition, we continue to gain operating leverage on the business as we execute our priorities. With all these things, we're confident in the remainder of 2024 and therefore are raising guidance.

Christopher Smith: In addition, we continue to gain operating leverage on the business as we execute our priorities. With all these things, we’re confident in the remainder of 2024 and therefore raising guidance.

Unknown Executive: We'll end our prepared remarks there and open it up for questions and turn it back over to the operator.

Speaker Change: We'll end our prepared remarks there and open it up for questions and turn it back over to the operator.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.

Unknown Executive: Thank you.

Unknown Executive: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tunnel indicates your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Once again, please press star one if you have a question or comment.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Once again, please press Star 1 if you have a question or a comment. And our first question comes from Andrew Brackmann with William Blair. Please proceed. Andrew.

Speaker Change: One moment please while we poll for questions. Once again, please press star 1 if you have a question or a comment.

Andrew Brackmann: And our first question comes from Andrew Brackman with William Blair. Please proceed. Andrew, thank you for taking the questions. Maybe if we could start just on the NGS side of things, obviously another nice quarter of growth there in Q2. But I guess, as we sort of think about the growth levels there, is there any color that you can share on the mix to that business between solid tumor and EAM today? And I guess related to that, how are you sort of thinking about the strength and EAM creating a bit of halo effect across not just solid tumor but the entire rest of the setting of menu error.

Speaker Change: And our first question comes from Andrew Brackmann with William Blair. Please proceed.

Andrew Frederick Brackmann: Hey, good afternoon. Thanks for taking the questions. Maybe if we could start just on the NGS side of things, obviously, another nice quarter of growth there in Q2. But I guess as we sort of think about the growth levers there, is there any color that you can share on the mix of that business between solid tumor and heme today? And I guess, related to that, how are you sort of thinking about the strength and heme creating a bit of a halo effect across not just the solid tumor but the entire rest of the body? We move forward.

Andrew Frederick Brackmann: Hey Andrew. Hey guys.

Andrew Frederick Brackmann: Hey, good afternoon. Thanks for taking the questions.

Andrew Frederick Brackmann: Maybe if we could start just on the NGS side of things, obviously another nice quarter of growth there in Q2, but...

Andrew Frederick Brackmann: I guess as we sort of think about the growth levers there, is there any color that you can share on the mix of that business between solid tumor and heme today? And I guess related to that, how are you sort of thinking about the strength in heme creating a bit of halo effect across, not just solid tumor, but the entire rest of the testing menu here as we move forward?

Christopher Smith: As we move forward. Thanks. Yeah, well, I think we definitely view it as a portfolio. And I think without question, EAM has enabled us to I think gain better presence in the solid because of our market leadership.

Christopher Michael Smith: Yeah, well, I think we definitely view it as a portfolio. And I think, without question, HEIM has enabled us to, I think, gain a better presence in the solid because of our market leadership. I'll ask Warren here as well as Jeff, but we don't break it out by HEIM or solid. But do you want to talk any more about, Andrew, good afternoon. Great question.

Speaker Change: Yeah, well, I think we definitely view it as a portfolio, and I think without question HEIM has enabled us to, I think, gain better presence in the solid because of our market leadership. I'll ask Warren here, as well as Jeff, but we don't break it out by HEIM or solid, but do you want to talk any more about that?

Warren Stone: I'll ask Warren's here as well as Jeff, but we don't break it out by EAM or solid, but do want to talk any more about that or start.

Warren Stone: So I would say the following that certainly we've had a presence in the NGS for a significant amount of time, and that has a much larger revenue base associated with it. Certainly a product that we use as an entry strategy into the community, and using that as a basis to drive growth into solid tumor NGS. I'd say that's working very effectively for us. And as a percentage growth, obviously, we see the solid tumor growing at a faster rate.

Warren Stone: So, Andrew, good afternoon. Great question. So I would say the following: that certainly we've had a presence from the NGS to speak to him. Obviously, a significant amount of time and that has a much larger revenue based associated with it. Certainly, a product that we use as an entry strategy into the community and using that as a basis to drive growth into solid tumor NGS. I said that's working very effectively for us. And as a percentage growth, obviously we see solid tumor growing at a faster rate. And we do have team, but an absolute term team still is growing at a foster rate.

Warren: Andrew, good afternoon. Great question. So I would say the following that certainly we've had a presence from an NGS perspective for obviously a significant amount of time and that has a much larger revenue base associated with it.

Speaker Change: Certainly a product that we use as an entry strategy into the community.

Speaker Change: And using that as a basis to drive growth into solid tumor NGS, I'd say that's working very effectively for us, and as a percentage growth, obviously, we see solid tumor growing at a foster rate, and we do heme, but in absolute terms, heme still is growing at a foster rate.

Jeffrey S. Sherman: [inaudible] Yeah, I think we've seen a good uptick throughout 2023 in the solid tumor panel, which I noted at the end of Q1, and then the myeloid panel we introduced in Q3, we saw a good uplift as well. So I think those new products are helping to drive more NGS growth. Great, I'll keep it to one.

Warren Stone: Yeah, and I think we've seen good uptake throughout 2023 in the solid tumor panel. I noted at the end of Q1. And then the myeloid panel we introduced in Q3, we saw a good uplift as well. So I think those new products are helping to drive more NGS growth.

Speaker Change: Yeah, and I think we've seen good uptick throughout 2023 in the solid tumor panel I noted at the end of Q1, and then the myeloid panel we introduced in Q3, we saw a good uplift as well. So I think those new products are helping to drive more NGS growth.

Unknown Executive: Great, I'll keep it to one. Thanks, guys.

Daniel Brennan: Thanks. The next question comes from Dan Brennan with PD Cowan. Please proceed. Great, Dan. Great, thanks for, hey Chris, how you doing? Thanks for, thanks for the questions here. Maybe one on the margins and the guide. So obviously, as I think you discussed, Jeff, kind of a complete reset of the EBITDA outlook here. So it was like mid-single-digit margin. I think we had you guys somewhat barely profitable. Just kind of what, you discussed a lot what's driving it, like better payments, sales force traction, maybe top line growth.

Daniel Gregory Brennan: Thanks, guys. The next question comes from Dan Brennan with TD Cowan. Please proceed. Hey, Dan. Great. Thanks for asking... Hey, Chris. How are you doing?

Speaker Change: Great. I'll keep it to one. Thanks, guys.

Speaker Change: Thank you.

Speaker Change: The next question comes from Dan Brennan with TD Cowan. Please proceed.

Daniel Gregory Brennan: Hey, Dan. Great. Thanks for... Hey, Chris. How are you doing? Thanks for answering the questions here. Maybe one on the margins and the guide. So obviously, as I think you discussed, Jeff, kind of just a complete reset of the EBITDA outlook here. So what, like mid-single-digit margin?

Christopher Michael Smith: Thanks for answering the questions here. Maybe one on the margins and the guide. So, obviously, as I think you discussed, Jeff, kind of just a complete reset of the EBITDA outlook here. So, what, like, mid-single-digit margin versus I think we had you guys, you know, somewhat barely profitable. Just kind of what... You discussed a lot what's driving it, like better payments, you know, sales force traction, maybe top-line growth. Can you just speak to kind of the durability of that and how we think about the pace of improvement that's possible as we look out beyond 2024 now that you've had this big acceleration?

Speaker Change: First, I think we had you guys, you know, somewhat fairly profitable, just kind of what

Speaker Change: You discussed a lot what's driving it, like better payments, you know, sales force traction, maybe top line growth. Can you just speak to kind of the durability of that and how we think about the pace of improvement that's possible as we look out beyond 2024 now that you've had this big acceleration?

Jeffrey Sherman: Can you just speak to kind of the durability of that and how we think about the pace and improvement that's possible as we look out beyond 2024 now that you've had this big acceleration? Yeah, I think it's been multifaceted, and we always talk about we have multiple drivers, you know, to drive the business. Certainly, the volume growth in the mix and revenue for tests are all helping to drive growth, margin improvement, and adjust the EBITDA proof. I would also say we've done a lot of work with lab optimization in terms of our footprint, how we're operating, and we've done a lot of work on productivity as well, just how we're stopping the business.

Christopher Michael Smith: Yeah, I think it's been multifaceted, and we always talk about how we have multiple drivers, you know, to drive the business. Certainly, the volume growth in the mix and revenue per test are all helping to drive gross margin improvement and adjusted EBIT improvement. But I would also say we've done a lot of work with lab optimization in terms of our footprint, how we're operating, and we've done a lot of work on productivity as well, just how we're staffing the business. As both the clinical and pharma operations, you know, have fallen under Melody, I think we have optimized the lab and how we're working there.

Speaker Change: Yeah, I think it's been multifaceted and we always talk about we have multiple drivers, you know, to drive the business. Certainly, the volume growth in the mix and revenue per test are all helping to drive gross margin improvement and adjusted EBIT improvement. But I would also say we've done a lot of work with lab optimization in terms of our footprint, how we're operating, and we've done a lot of work on productivity as well, just how we're staffing the business. As both the clinical and pharma operations have fallen under Melody, I think we have optimized the lab and how we're working there. The LIMS, we believe, is going to further help us do that as well. And then I'd say on the IT side, I think we've done a lot of work as well.

Jeffrey Sherman: As both the clinical and pharma operations have fallen under Melody, I think we have optimized the lab and how we're working there. The limbs, we believe, is going to further help us do that as well. And then I'd say in the IT side, I think we've done a lot of work as well, rationalizing IT systems. And again, I think the limbs will allow us to retire some redundant systems as well. And so I think there's a lot of activity. Finally, I would say in the procurement side, you know, we really, I think, been more rigorous and disciplined on the procurement side over the last year.

Jeffrey S. Sherman: The LIMS, we believe, is going to further help us do that as well. And then, on the IT side, I think we've done a lot of work as well, rationalizing IT systems. And again, I think the LIMS will allow us to retire some redundant systems as well. So I think there's a lot going on.

Speaker Change: Rationalizing IT Systems, and again, I think the LIMS.

Speaker Change: will allow us to retire some redundant systems as well. And so I think there's a lot of activity. Finally, I would say in the procurement side, you know, we've really, I think, been more rigorous and disciplined on the procurement side over the last year, and that would include logistics as well. So I think we have teams of people kind of looking at cost infrastructure across the company and are using technology to get better. And so as we think about, you know, durability, we still think that's a multi-year opportunity to continue to get better and see margin improvement, you know, and over the next couple years continuing to improve and getting operating leverage, therefore, on the gross margin and the adjustability line.

Jeffrey S. Sherman: Finally, I would say on the procurement side, you know, we've really, I think, been more rigorous and disciplined on the procurement side over the last year, and that would include logistics as well. So I think we have teams of people kind of looking at cost infrastructure across the company and are using technology to get better. And so as we think about, you know, durability, we still think that's a multi-year opportunity to continue to get better and see margin improvement, and over the next couple of years, improving and getting operating leverage, therefore, on the gross margin and the adjusted EBIT alone. And I think the other thing is that we continue to shift our mix more towards NGS. That's obviously a big driver for that as well.

Jeffrey Sherman: And that would include logistics as well. So I think we have, we have teams of people kind of looking at cost infrastructure across the company and are using technology to get better. And so, as we think about durability, we still think that the multi-year opportunity to continue to get better and see margin improvement, you know, and over the next couple of years, continuing to improve and getting operating leverage, therefore, on the growth margin and adjust the EBITDA line. And I think the other thing is we continue to shift our mix more towards NGS. That's obviously a big driver for that as well.

Speaker Change: And I think the other thing is we continue to shift our mix more towards NGS. That's obviously a big driver for that as well.

Unknown Executive: Got it.

Daniel Gregory Brennan: Got it. And then maybe as a follow-up just on NGS, just on Pantracer, can you speak a little bit about how you size that opportunity? I'm sure you've got a pretty good handle on what the market dynamics are and what your customers are currently using today. So what kind of impact do you think Pantracer could have? And you talked about turnaround time being a key differentiator to any other color you can give about the product profile. Yeah, Dan, I'll let Warren take that one.

Unknown Executive: And maybe the follow-up just on NGS.

Unknown Executive: Just on the pan tracer, can you speak a little bit to how, like, you size that opportunity? I'm sure you've got a pretty good handle on what the market dynamics are and what your customers are currently using today. So what kind of impact do you think Pan Tracer could have? And you talked about turnaround times, a key difference or any other color you can give about the product profile? Yeah, the other one's a good one. Yeah, so I mean, as Chris articulated again, so you know, a product that we believe would be very competitive. It's a pound size over 500 genes, and it's got indels, SMBs, CNBs, and sitting limits of detection are very, very competitive and coupled with less than seven days turnaround time.

Speaker Change: Got it. And maybe as a follow-up, just on NGS, just on the Pantracer, can you speak a little bit to...

Speaker Change: How like you size that opportunity? I'm sure you've got a pretty good handle on what the market dynamics are and what your customers are currently using today So what kind of impact do you think Pantracer could have? And you talked about turnaround time is a key differentiator to any other color you can give about the about the product profile

Warren Stone: Yeah, so, as Chris articulated, Dan, certainly a product that we believe will be very competitive. It's a panel size of over 500 genes, and it's got indels, SNBs, CNBs, TMBs, and certainly limited detection is very, very competitive, and coupled with the less than seven days turnaround time, we feel that it'll be very well placed in the market to compete with competitors out there. It'll be a big upgrade over the panel we have today, the IVFL, which is just a lung panel.

Speaker Change: Yeah, I'll let Warren take that one.

Warren: A product that we believe will be very competitive. It's a panel size over 500 genes and it's got indels, SNBs, CNBs, TMBs.

Warren: and certainly limited detection of very, very competitive and coupled with the less than seven days turnaround time, we feel it'll be very well placed.

Warren Stone: We feel that it'll be very well placed in the market to compete with competitors out there. It'll be a big upgrade over the panel. We have today the IDFL, which is just a lung panel. So we feel that we can leverage the expertise and knowledge that we believe from from IDFL to an expanded pan cancer solution. It'll also allow us to sort of play into what's becoming more and more popular in terms of concurrent testing, and especially as we launch our pan tracer solar tumour, which is later for next year. That'll really allow us to offer sort of a pan pan tumour testing solution from a concurrent perspective as well.

Warren: in the market to compete with competitors out there. It'll be a big upgrade over the panel we have today, the IVFL, which is just a lung panel. So we feel that we can leverage the expertise and knowledge that we've gleaned from IVFL to an expanded pan-cancer solution. It'll also allow us to sort of play into what's becoming more and more popular in terms of concurrent testing, and especially as we launch our pan-tracer solid tumor, which is slated for next year, that'll really allow us to offer sort of a pan-tumor

Warren Stone: So, we feel that we can leverage the expertise and knowledge that we've gleaned from IVFL into an expanded pan-cancer solution. It'll also allow us to sort of play into what's becoming more and more popular in terms of concurrent testing, and especially as we launch our pan-tracer solid tumor, which is slated for next year, that'll really allow us to offer sort of a pan-tumor testing solution from a concur We recognize that there are other players in the market, but we still feel, with our footprint, both within the hospital setting, but also as it's growing in the community setting through the expanded sales force, we can make a significant difference with this product. Great, I'll keep you to two. Thanks a lot.

Warren Stone: We recognize that there are other players in the market, but we still feel with our footprints both within the hospital setting, but also as it's growing in the community setting through the expanded sales force that we feel we can make a significant difference through this product.

Warren: testing solution from a concurrency perspective as well.

Warren: We recognize that there are other players in the market, but we still feel with our footprint, both within the hospital setting, but also as it's growing in the community setting, through the expanded sales force, that we feel we can make a significant emergency with this product.

Unknown Executive: Great, I'll keep it to two.

Tejas Savant: Thanks. The next question comes from Tejas Savant with Morgan Stanley. Please proceed.

Tejas Rajeev Savant: Thanks. The next question comes from Tejas Savant with Morgan Stanley; please proceed. Hey. Hi. Hi, this is Madison on behalf of Tejas. How are you?

Speaker Change: Great, I'll keep you to two. Thanks a lot. Thanks.

Speaker Change: The next question comes from Tejas Savant with Morgan Stanley . Please proceed.

Madison Pasterchick: Hi, this is Madison, I'm for Tejas, how are you? Thanks for taking the question. I just want to start out, you know, congrats on the quarter. It looks like the top on guide has been raised for the B plus an additional couple, maybe three million.

Madison: Thanks for taking the question. I just wanted to start out, you know, congrats on the quarter. It looks like the top-line guide has been raised for the B plus an additional couple, like maybe three million. So I was just wondering there if you could kind of parse out what are the main drivers you're seeing playing out better in the second half than you had initially expected when you set the guide? Yeah, it is.

Speaker Change: Hi, this is Madison on for Tejas. How are you?

Speaker Change: [inaudible]

Madison: Thanks for taking the question. I just wanted to start out, you know, congrats on the quarter, it looks like the top line guide has been raised for the B plus an additional

Jeffrey Sherman: So just wondering there, if you could kind of parse out what are the main drivers you're seeing playing out better in the second half and you had initially expected when you set the guide? Yeah, it is. I think it's continued, you know, continued volume performance. The mix continues to be strong as Chris said earlier, so we're getting, getting good leverage on the NGS growth that we're seeing. And then I think we're continuing to manage that. And it's cross well. So again, I don't think it's any one factor; I think it's a combination of factors, you know, that are giving us the confidence that the improved performance will be sustained in the back half of the year.

Speaker Change: A couple, like maybe three million, so I was just wondering there if you could kind of parse out what are the main drivers you're seeing playing out better in the second half than you had initially expected when you set the guide?

Jeffrey S. Sherman: I think it's continued, you know, continued volume performance. The mix continues to be strong, as Chris said earlier. So we're getting good leverage on the NGS growth that we're seeing, and then I think we're continuing to manage costs well. So again, I don't think it's any one factor. I think it's a combination of factors, you know, that are giving us the confidence that improved performance will be sustained. Awesome. Okay, if I could just squeeze one more in.

Speaker Change: Yeah, it is. I think it's continued volume performance. The mix continues to be strong, as Chris said earlier, so we're getting good leverage on the NGS growth that we're seeing. And then I think we're continuing to manage costs well. So, again, I don't think it's any one factor. I think it's a combination of factors that are giving us the confidence that improved performance will be sustained in the back half of the year.

Unknown Executive: Awesome. Okay.

Madison: I know you mentioned NGS mix in the quarter was about 30%. I'm just wondering how much of that growth is being driven by adoption in the community setting versus the hospital setting? Yeah, we look at it from both segments, obviously, but we don't break out as far as which segment is going into which market. Understand. Thank you.

Unknown Executive: I could just squeeze one more in. I know you mentioned NGS mix and quarter was by, I think, 30%. I'm just wondering how much of that growth is being driven by adoption, the community setting versus hospital setting. Yeah, we look at, I think it's coming from both segments, obviously, but we don't break out as far as which segment is going into which market. I understand.

Speaker Change: Awesome. Okay, if I could just squeeze one more in. I know you mentioned NGS mix and quarter was about, I think, 30%. I'm just wondering how much of that growth is being driven by adoption in the community setting versus hospital setting?

Speaker Change: Yeah we look at I think it's coming from from both segments obviously but we don't break out as far as which segment is going into which market.

Unknown Executive: Thank you.

Joseph Conway: The next question comes from Mike Mattson with Needham and Company, please proceed. Hey, my guys, this is Joseph on from Mike. Thanks for taking our questions. I'm sure on the, on the AML Express, you guys have talked about two-day turnaround for that. I'm just kind of wondering, is that, you know, that turnaround time, can that be, you know, transferred to other tests? Is this kind of specifically for AML that gives you that rapid turnaround time or just kind of wondering what's the drivers of that and if we can see any turnaround time improvement in other tests?

Michael Stephen Matson: The next question comes from Mike Matson with Needham and Company. Please proceed. Hey, Mike, guys, this is Joseph on for Mike.

Speaker Change: Understood. Thank you.

Speaker Change: The next question comes from Mike Matson with Needham and Company. Please proceed.

Joseph: Thanks for taking our questions. Sure, on the AML Express, you guys have talked about two day turnaround for that. I'm just kind of wondering, is that you know, that turnaround time? Can that be? Transcribed by https://otter.ai. Just kind of wondering what the drivers of that are.

Michael Stephen Matson: For sure, on the AML Express, you guys have talked about a two-day turnaround for that.

Michael Stephen Matson: I'm just kind of wondering, is that, you know, that turnaround time, can that be...

Michael Stephen Matson: you know, transfer it to other tests? Is this kind of specifically for AML that gives you that rapid turnaround time or?

Michael Stephen Matson: Just kind of wondering what's the drivers of that and if we can see any turnaround time improvement in other tests.

Christopher Michael Smith: And if we can see any turnaround time improvement and other tests? Yeah, I'm gonna bring in Dr. Nate Montgomery, you guys I don't think have met him, but he runs medical, and let him talk a little bit about that. So I think in the near term, we expect this to be specific to ovarian cancer. In the long term, the sorts of technologies that we're talking about here will apply to other tumor types. Today, where we are, speed usually means a little bit smaller of a footprint of the assay in terms of how many genes were tested.

Nathan Montgomery: Yeah, I'm going to bring in Dr. Name of Gunner. You guys, I don't think it's a legend, but he runs medical and let you talk a little bit about that. So I think in the near term, we expect this to be specific to AML. Longer term, the sorts of technologies that we're talking about here will apply to other tumor types. Today, where we are, speed usually means a little bit smaller of a footprint of the assays in terms of how many genes were testing. So if this isn't something immediately, that would be applicable to all hematologic legacies or solid tumor.

Speaker Change: Yeah, I'm going to bring in Dr. Nate Montgomery. You guys I don't think have met him, but he runs medical and let him talk a little bit about that test.

Nate Montgomery: So I think in the near term we expect this to be specific to AML.

Speaker Change: Longer-term, the sorts of technologies that we're talking about here...

Speaker Change: will apply to other tumor types. Today where we are, speed usually means a little bit smaller of a footprint of the assay in terms of how many genes we're testing.

Dr. Nate Montgomery: So if this isn't something that would be applicable to all hematologic malignancies or solid tumors, but we do see opportunities growing in the rapid panel format. Okay, that's helpful. Um, yeah, I think we'll just keep it to one this time. But thank you for that question.

Speaker Change: So if this isn't something immediately that would be applicable to all hematologic malignancies or solid tumor, but we do see opportunities growing in the rapid panel format for many indications.

Nathan Montgomery: But we do see opportunities growing in the rapid panel format for many indications.

Unknown Executive: Okay, that's hopeful.

Unknown Executive: Yeah, I think we'll just keep it to one this time, but thank you.

Speaker Change: Okay, that's helpful. Yeah, I think we'll just keep it to one this time, but thank you for taking the question.

David Westenberg: Okay, the next question comes from David Westenberg with Piper Sandler. Please proceed. Hey, David. Hey, how's it going, Chris? Great, great.

Joseph: Okay, the next question comes from David Westenberg with Piper Sandler. Please proceed. Hey, David.

Speaker Change: Okay, the next question comes from David Westenberg with Piper Sandler. Please proceed.

David Michael Westenberg: Hey, how's it going, Chris? Great, great. So, I'm going to shift actually. I just wanted to ask Jeff, you talked about the three products that you're launching. Was that previously in guidance, or was that always, or did you get maybe some timing on that?

David Michael Westenberg: Hey David?

David Westenberg: So I'm a shift actually as one of the Jeff, you talked about the three products that you're launching. Was that previously in guidance, or was that always, or did you get maybe some timing on that? And then, just in terms, I think you also mentioned a new customer win. Can you give us some color on what that new customer win would look like? And don't worry, we won't get too crazy with modeling next year, but I mean, shouldn't these be next year drivers as well. Yeah, I'll share this. So look, we've talked about probably more about the large solid tumor.

David Michael Westenberg: Hey, how's it going, Griff?

David Michael Westenberg: Great, great. So I'm going to shift actually ask one to Jeff. You talked about the three products that you're launching. Was that previously in guidance or was that always or did you get maybe some timing on that?

Christopher Michael Smith: And then, just in terms, I think you also mentioned a new customer win. Can you give us some color on what that new customer win would look like? And don't worry, we won't get too crazy with modeling next year, but, I mean, shouldn't these be next year's drivers as well? Yeah, I'll, I'll show you.

David Michael Westenberg: And then just in terms, I think you also mentioned a new customer win. Can you give us some color on what that new customer win would look like? And don't worry, we won't get too crazy with modeling next year. But I mean, shouldn't these be next year drivers as well?

Christopher Michael Smith: So look, we've talked about probably more about the large Solid Tumor. And so I don't know that I would say that we guided, but we've talked openly about the products. And I think we had a lot of questions between Q1 and Q2, and we just thought it was better to give some more clarity, especially since we're further in the development cycle of those products. So think about three big products coming out over the really next 12 months, one kind of in Q3, Q4, one in kind of Q4, Q1, and then one kind of at the end of Q1 into Q2.

Speaker Change: Yeah, I'll share that.

Christopher Michael Smith: And we think all three of those will be major products for us, but we had not, I would say that we've not given the level of detail that we gave today. Look, as far as customer wins, I think, as you know, in this business, I think when you go through the process and start to win a count, it does take a timeline to have those counts onboarded. And I think what Jeff was referring to, and Jeff can chime in here, but I think what Jeff was referring to is that we were looking at the second half, and a lot of that stuff's happening on that account in Q4, so that it was a little bit, our second half's kind of weighted a little bit more towards Q4 than Q3. Yeah, and I would add that we did have some, you know, initial product launches in the original guide, and they were always happening towards the end of the year anyway.

Christopher Smith: And so I don't know that I would say that we guided, but we've talked openly about the product. And I think we just, we had a lot of questions in between Q1 and Q2. We just thought it was better to give some more clarity, especially since we're further in the development cycle of those products. So, you know, think about three big products coming out over really the next 12 months, one kind of in Q3, Q4. One and kind of Q4 Q1 and then one kind of at the end of Q1 into Q2. And we think all three of those will be, you know, major products for us.

Speaker Change: Solid Tumor. I think, and so I don't know that I would say that we guided, but we've talked openly about the product, and I think we just, we had a lot of questions in between Q1 and Q2, and we just thought it was better to give some more clarity, especially since we're further in the development cycle of those products.

Speaker Change: So, you know, think about three big products coming out over, really, the next 12 months. One kind of in Q3, Q4, one in kind of Q4, Q1, and then one kind of at the end of Q1 into Q2.

Jeffrey Sherman: But we had not; I would say that we've not given the level of detail that we gave today.

Speaker Change: And we think all three of those will be, you know, major products for us, but we had not, I would say that we've not given the level of detail that we gave.

Jeffrey Sherman: Look, as far as, you know, customer wins. I think, as you know, in this business, I think when you go through the process and start to win accounts, it does take a timeline to add, you know, have those counts on board it. And I think what Jeff was referring to, and Jeff can chime in here. But I think what Jeff was referring to is we were looking at the second half, and a lot of that stuff happening on that account is Q4, so that it was a little bit, our second half kind of waited a little bit more towards Q4 than Q3.

Jeff: Today, look, as far as, you know, customer wins, I think, as you know, in this business, I think when you go through the process and start to win a count, it does take a timeline to have, you know, have those counts onboarded. And I think what Jeff was referring to, and Jeff can chime in here, but I think what Jeff was referring to is we were looking at the second half, and a lot of that stuff's happening on that account is Q4, so that it was a little bit, our second half's kind of weighted a little bit more towards Q4 than Q3.

Jeffrey S. Sherman: So, you know, some impact, new business wins will drive revenue in Q4 as well. And so we would expect, you know, Q3 to be, you know, higher than Q2, a little bit higher than Q2. And then more, more of that earnings growth will come in the fourth quarter as we look at the back half of the year, but things we have pretty good line of sight on. Got it.

Jeffrey Sherman: Yeah. And I would, so I would add, so we did have some, you know, initial product launches in the original guide, and they were always happening towards the end of the year anyway. So, you know, some, some impact new business wins will drive revenue in Q4 as well. And so we would expect, you know, Q3 to be, you know, higher than Q2, a little bit higher than Q2 and then more, more of that earnings growth coming the fourth quarter as we look at the back half the year. But, but things we have pretty good line of sight on.

Jeff: Yeah, and I would, so I would add, so we did have some, you know, initial product launches in the original guide, and they were always happening towards the end of the year anyway, so, you know, some impact, new business wins will drive revenue in Q4 as well, and so we would expect, you know, Q3 to be, you know, higher than Q2, a little bit higher than Q2, and then more, more of that earnings growth come in the fourth quarter as we look at the back half of the year, but things we have a pretty good line of sight on.

Jeffrey Sherman: Got it. And I know from a volume standpoint, NGS is not that high, but you did cite 30% revenue. Where do we kind of think that could peak at in terms of percent of revenue? And again, you know, I know you have a long-term guidance of 10%. You know, you, you, you know, you, you can't keep going with this teens forever in that clinical growth business, but you know, just trying to get a, you know, a sense for that peak. Yeah. Well, look, I look at a couple, you know, things I think to think about it.

David Michael Westenberg: And I know from a volume standpoint, NGS is not that high, but you did cite 30% revenue. Where do we kind of think that could peak in terms of percent of revenue? And again, you know, I know you have a long-term guidance of 10%. You can't keep going with these teens forever and that clinical growth business, but you know, just trying to get a sense for that.

Speaker Change: Got it. And I know from a volume standpoint, NGS is not that high, but you did cite 30% revenue. Where do we kind of think that could peak at in terms of percent of revenue? And again, I know you have a long-term guidance of 10%. You can't keep going with this teens forever and that clinical growth business, but just try to get a sense for that peak.

Christopher Michael Smith: Yeah, well, look, I look at a couple of things I think. Think about it, it's 30% of the clinical business, and the base business of that clinical side is still growing as well outside of NGS. But if you look at a lot of our competitors, you know, 80% of their revenues or 90% of revenues come from NGS. So we think there's a ton of runway. Now, I'm not saying that, you know, we're going to be at that level.

Christopher Smith: It's 30% of the clinical business, and the base business of that clinical size is still growing as well outside of NGS. But if you look at a lot of our competitors, you know, 80% of their revenues, 90% of the revenue is coming from NGS. So we think there's a ton of runway. Now I'm not saying that, you know, we're going to be at that level, but you can see this going significantly more than 50% of the clinical revenue. So we think that again, there continues to be a lot of runway. Yeah. Especially as we go into community oncology.

Speaker Change: Yeah, well, look, a couple, you know, things I think to think about it, it's 30% of the clinical business and the base business of that clinical side is still growing as well outside of NGS.

Speaker Change: But if you look at a lot of our competitors, you know, 80% of their revenues, or 90% of their revenues is coming from NGS, so we think there's a ton of runway. Now, I'm not saying that, you know, we're going to be at that level, but you can see this going significantly more than 50% of the clinical revenue. So, we think, again, there continues to be a lot of runway.

Christopher Michael Smith: But you can see this going significantly more than 50% of clinical revenue. So we think that, again, there continues to be a lot of runway. Yeah, especially as we go into community oncology. And I think, you know, it's a focus of ours. It's a higher revenue, higher margin profile. We're clearly, from a sales perspective, focusing on it as well. And we're seeing the results of that focus right through from a revenue perspective and from a margin and earnings perspective.

Christopher Smith: And I think, you know, it's a focus of ours; you know, it's a higher revenue, a higher margin profile. We're clearly from the sales, you know, perspective focusing on it as well. And we're seeing the results of that focus right through from a revenue perspective and from a margin and earnings perspective. Yeah. That's why we're; I think we're expanding the field sooner than we've probably had talked about in prior quarters. We're getting a lot of sales force optimization and efficiency, but at the same time, we have a relatively, you know, on the size of our sales force, you know, compared to what the opportunity is, we just need to continue to invest.

Speaker Change: Yeah. Especially as we go into community oncology.

Speaker Change: And I think, you know, it's a focus of ours, you know, it's a higher revenue, higher margin profile. We're clearly, from a sales, you know, perspective, focusing on it as well. And we're seeing the results of that focus drive through from a revenue perspective and from a margin and earnings perspective.

Speaker Change: Yeah, that's why we're, I think we're expanding the field sooner than we probably had talked about in prior quarters. We're getting a lot of Salesforce optimization and efficiency, but at the same time, we have a relatively, you know, the size of our Salesforce, you know,

Christopher Smith: And that's why we're going to accelerate that investment.

Unknown Executive: Thank you.

Speaker Change: Compared to what the opportunity is, we just need to continue to invest, and that's why we're going to accelerate that investment.

Unknown Executive: Okay, the next question comes from Matt Sykes with Goldman Sachs. Matt, please proceed. Hey, Matt. Good afternoon. Hey, thanks for taking my questions. Congrats on the quarter. Um, maybe just two quick ones. I'll ask them both up front. Just on revenue per test, you guys have had a pretty impressive record of getting the revenue per test up. I know you cited, you know, focus on higher value test, price mix, and also revenue cycle management. I know the answer is all the above, but would love to hear, like, of those areas, where's the most runway for you guys?

Christopher Michael Smith: Yeah, that's why we're, I think we're expanding the field sooner than we probably had talked about in prior quarters; we're getting a lot of Salesforce optimization and a lot of efficiency. But at the same time, we have a relatively small, you know, the size of our Salesforce platform, compared to what the opportunity is, we just need to continue to invest. And that's why we're going to accelerate that investment. Thank you. Okay, the next question comes from Matt Sykes with Goldman Sachs. Matt, please proceed. Hey Matt,

Speaker Change: Thank you.

Speaker Change: Okay, the next question comes from Matt Sykes with Goldman Sachs. Matt, please proceed.

Matthew Carlisle Sykes: Good afternoon. Hey, thanks for taking my questions. Congratulations on the quarter. Maybe just two quick ones.

Matthew Carlisle Sykes: Good afternoon. Hey, thanks for taking my questions. Congrats on the quarter. Maybe just two quick ones. I'll ask them both up front.

Matthew Carlisle Sykes: I'll ask them both up front. Just on revenue per test, you guys have had a pretty impressive track record of getting revenue per test up. And I know you've cited focus on higher-value tests, price mix, and also revenue cycle management. I know the answer's all of the above, but we'd love to hear, like, in those areas, where's the most runway for you guys, do you feel, to continue to drive that revenue per test up? And then the second question is just, Jeff, a quick one.

Matthew Carlisle Sykes: Just on revenue per test, you guys have had a pretty impressive record of getting the revenue per test up. And I know you've cited, you know, focus on higher value test, price mix, and also revenue cycle.

Speaker Change: Management. I know the answer is all the above, but we'd love to hear like of those areas.

Matthew Sykes: You feel to continue to drive that revenue per test up?

Jeffrey Sherman: And then second question is just Jeff, a quick one, off X for the balance of the year, you've been kind of growing it. I think mid single digits, is that what we should be assuming for the balance of the year on the opposite side. Thanks.

Speaker Change: Where's the most runway for you guys do you feel to continue to drive that revenue protest up and then?

Jeffrey S. Sherman: OPEX for the balance of the year, you've been kind of growing it, I think mid-single digits. Is that what we should be assuming for the balance of the year on the OPEX side? I'm going to let Jeff take both of those, Matt.

Speaker Change: Second question is just Jeff, a quick one, OPEX for the balance of the year, you've been kind of growing it, I think mid-single digits, is that what we should be assuming for the balance of the year on the OPEX side? Thanks.

Jeffrey Sherman: I'm going to let Jeff take both of those. Yeah, I think on the opposite side, that's a reasonable assumption, Matt, for the back half of the year. Um, I just do a blank on the first half of the first part of question, revenue per test. Oh, revenue. Yeah, so, so revenue per test, the drivers, you know, the NGS mix continues to be, you know, a big part of that. And, you know, I've said over 60, 60 plus percent, um, and we did introduce several new tests, as we've said in 2023. And so we are starting to annualize on those.

Jeffrey S. Sherman: Yeah, I think on the op-ed side, that's a reasonable assumption, Matt, for the back half, of the year, and just do a blank on the first part of the question. Revenue per test, the drivers, the NGS mix continues to be a big part of that, and I've said over 60 plus percent, and we did introduce several new tests, as we've said, in 2023, and so we are starting to annualize on those, and so both Q1 and Q3 we had some new tests, so while we expect that's going to continue to grow, I think you'll see that pace in terms of that revenue per test percentage growth will slow, but we still think it's going to go up.

Jeff: I'm gonna let Jeff take both of those, Matt. Yeah, I think on the OPEC side, that's a reasonable assumption, Matt, for the back half of the year. I'll just do a blank on the first half, on the first part of the question.

Rupert Newt: Rupert Newt

Speaker Change: Revenue per test, the drivers, the NGS mix continues to be a big part of that, and I've said over 60 plus percent, and we did introduce several new tests, as we've said, in 2023, and so we are starting to annualize on those, and so both Q1 and Q3 we had some new tests, so while we expect that's going to continue to grow, I think you'll see that pace, in terms of that revenue per test percentage growth, you know, will slow, but we still think it's going to go up. On the revenue cycle side, I still think there's a lot of opportunities there. You know, our biggest challenge there continues to be the large panel tests.

Jeffrey Sherman: And so, both Q1 and Q3, we had some new tests.

Jeffrey Sherman: So, so we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things, and we're going to be able to do a lot of things.

Jeffrey S. Sherman: On the revenue cycle side, I still think there are a lot of opportunities there. Our biggest challenge there continues to be the large panel tests, and state biomarker legislation is getting momentum in terms of the number of states approving biomarker legislation. However, once a state approves it, it's not a flip that switch that, you know, payers are going to automatically start paying.

Speaker Change: And the state biomarker legislation, I would say, is getting momentum in terms of the number of states approving biomarker legislation. However, once a state approves it, it's not a flip that switches that, you know, payers are going to automatically start paying. We still have a lot of work to do to get payers to pay, even when the states say they are supposed to pay or Medicare is paying. So I think we continue to look at that as an opportunity, and I would say we believe it's a multi-year opportunity to continue to drive higher payments for work we're already doing. I think we have a lot of focused effort on it. I do think there's momentum from a legislative perspective to help us there, but it's still, you know, I would say down in the trenches.

Jeffrey Sherman: But it's not a flip that switches that, you know, payers are going to automatically start paying. We still have a lot of work to do to get payers to pay, even when the states say they're supposed to pay or Medicare. Medicare is paying. So I think we continue to look at that as an opportunity, and I would say it's, we believe it's a multi-year opportunity to continue to drive higher payments for work we're already doing. And I think we have a lot of focus suffered on it. I do think there's momentum from a legislative perspective to help us there, but it's still, you know, I would say down in the trenches work to work with the payers to get those payments, but we are seeing continued success there.

Jeffrey S. Sherman: We still have a lot of work to do to get payers to pay, even when the states say they are supposed to pay, or Medicare is paying, so I think we continue to look at that as an opportunity, and I would say we believe it's a multi-year opportunity to continue to drive higher payments for work we're already doing, and I think we have a lot of focused effort on it. I do think there's momentum from a legislative perspective to help us there, but it's still, you know, I would say down in the trenches work to work with the payers to get those payments, but we are seeing continued success there. Thank you.

Speaker Change: his work to work with the payers to get those payments. But we are seeing continued success there.

Michael Ryskin: Thank you. Okay, the next question comes from Michael Riskin with Bank of America. Please proceed. Hey, Michael. Hey, good afternoon.

Michael Leonidovich Ryskin: Okay, the next question comes from Michael Ryskin with Bank of America. Please proceed. Hey, good afternoon. This is John Kim for Michael.

Speaker Change: Thank you.

Speaker Change: Okay, the next question comes from Michael Ryskin with Bank of America. Please proceed.

John Kim: This is John Kim for Michael. Hey. So the sales force, you guys obviously made a lot of investments, and you guys are starting to bear the fruit of your labor there. But are you looking to expand that further, and should we think about incremental costs in the second half and in 25? And separately, I think you guys talked about the 40% of the sales force time being focused on the community oncology setting versus the balance in the hospital setting. How is that looking? Has that balance shifted at all? Yeah, so we did talk about that we're expanding the field organization, so that's kind of in the slides and in the script.

Michael Riskin: Hey, Michael.

John Kim: Hey. So Salesforce, you guys obviously made a lot of investments, and you guys are starting to bear the fruit of your labor there, but are you looking to expand that further? And should we think about incremental costs in the second half and 25? And separately, I think you guys talked about that. How is the 40% of the salesforce time being focused on the community oncology setting versus the balance in the hospital setting? Has that balance shifted at all?

Michael Riskin: Hey. So the Salesforce, you guys obviously made a lot of investments and you guys are starting to bear the fruit of your labor there, but is...

Michael Riskin: Are you looking to expand that further and should we think about incremental costs in the second half and in 25?

Speaker Change: And separately, I think you guys talked about the 40% of the salesforce time being focused on the community oncology setting versus the balance in the hospital setting. How is that looking? Has that balance shifted at all?

Christopher Michael Smith: Yeah, so we did talk about that we're expanding the field organization. So that's kind of in the slides and in the script. And when you think about it, we are getting a return.

Speaker Change: Yeah, so we did talk about that we're expanding the field organization, so that's kind of in the slides and in the script. And when you think about it, we are getting a return, and so we're going quicker. So there would definitely be costs, though, associated with it in the back half of the year, as well as in the 25. But that is built into...

John Kim: And when you think about it, we are getting a return, and so we're going quicker. So there would definitely be costs, though, associated with it in the back half of the year as well as into 25, but that is built into, you know, into the guidance. Yeah, and as far as we've never said specifically the amount of time that we're spending really in one place or the other, we have two separate sales forces. One group focuses primarily on the hospital, and the other group focuses primarily on the community on colleges, and so both of those are continuing, but we see the big growth opportunity with the community oncology segment.

Christopher Michael Smith: And so we're going quicker. So there would definitely be costs associated with it in the back half of the year, as well as in the 25. But that is built into, I, you know, into the gutter. Yeah, and as far as we've never said specifically the amount of time that we spend really in one place or the other, we have two separate sales forces. One group focuses primarily on the hospital pathologist, and the other group focuses primarily on the community oncologist.

Speaker Change: You know, into the gutter.

Speaker Change: Yeah, and as far as we've never said specifically the amount of time that we're spending really in one place or the other. We have two separate sales forces. One group focuses primarily on the hospital pathologist and the other group focuses primarily on the community oncologist. And so both of those.

Christopher Michael Smith: And so both of those are continuing, but we see a big growth opportunity with the community oncology sector. Yeah, and I would say, you know, we're having success with this commercial expansion, and it has been a growth driver, you know, and our adjusted EBITDA growth has been faster than we expected, both last year and this year. So we look at that as enabling us to continue to invest in the Salesforce expansion and optimization efforts to really drive growth over the next several years.

Speaker Change: are continuing, but we see the big growth opportunity with the community oncology segment.

Christopher Smith: Yeah, and I would say, you know, we're having success with this commercial expansion, and it has been a growth driver. You know, in our adjusted EBITDA growth has been faster than we expected both last year and this year, so we look at that as enabling us to continue to invest in the sales force expansion and optimization efforts, you know, really to drive growth over the next several years. So I think that's the way we're thinking about it. We've said we're going to be measured and measure investment, you know, with revenue and earnings growth, and as we do better, we have the opportunity to invest more.

Christopher Michael Smith: So I think that's the way we're thinking about it. We've said we're going to be measured and measure investment, you know, with revenue and earnings growth. And as we do better, we have the opportunity to invest more. And that is how we're thinking about it as we go into the back half of this year and into 2025. Got it. Thank you for that. And then if I could just squeeze in one more.

Speaker Change: Yeah, and I would say, you know, we're having success with this commercial expansion and it has been a growth driver.

Speaker Change: And our adjusted EBITDA growth has been faster than we expected, both last year and this year. So we look at that as enabling us to continue to invest in the Salesforce expansion and optimization efforts, you know, really to drive growth over the next several years. So I think that's the way we're thinking about it. We've said we're going to be measured and measure investment, you know, with revenue and earnings growth. And as we do better, we have the opportunity to invest more. And that is how we're thinking about it as we go in the back half of this year and into 2025.

Christopher Smith: And that is how we're thinking about it as we go in the back half this year and in the 2025.

John Kim: Got it. Thank you. Thank you for that. And then, if I could just squeeze in one more on the radar, I think you guys mentioned that you would be pursuing both the legal strategy and the internal R&D. Are you still considering any sort of tech transfer or licensing, or a full acquisition?

John Kim: On the radar, I think you guys mentioned that you would be pursuing both the legal strategy and internal R&D. Are you still considering any sort of tech transfer or licensing or a full acquisition? Yeah, I'm gonna assume that you guys have not met Kareem.

Speaker Change: Got it.

Speaker Change: Thank you for that. And then if I could just squeeze in one more. On the radar, I think you guys mentioned that you would be pursuing both the legal strategy and the internal R&D. Are you still considering any sort of tech transfer or licensing or a full acquisition?

Ali Olivo: Yeah, I'm going to you guys have not met Cream. I'm going to introduce cream and kind of runs with Ali and also strategy to come in and kind of talk about that. But obviously, the answer to the first part is R&D. Absolutely. But do you want to talk a little bit? Yeah. Hey, John. So, as we mentioned, we are looking at the full spectrum of part potential partnerships and in-licensing opportunity. So more on that to come, but we're not leaving any sort of stone unturned, but both internal development, but also in licensing on partnership. Got it.

Christopher Michael Smith: I'm going to introduce Kareem, who kind of runs BD with Ali, and also strategy to come in and kind of talk about that. But obviously, the answer to the first part is R&D. Absolutely. But do you want to talk a little bit? Yeah, yeah. Hey, John.

Speaker Change: Yeah, I'm gonna, you guys have not met Kareem, I'm gonna introduce Kareem, he kind of runs...

Kareem Saad: BD with Ali and also strategy to come in and kind of talk about that, but obviously the answer to the first part is R&D. Absolutely. But do you want to talk a little bit? Yeah. Yeah. Hey, John . So, as we mentioned, we are looking at the full spectrum of potential partnerships and licensing opportunities. So,

Kareem Saad: More on that to come, but we're not leaving any sort of stone unturned, both internal development, but also in licensing and partnership.

Ali Olivo: Thank you.

Mark Massaro: Okay, the next question comes from Mark Massaro with BTIG. Please proceed. Hey, Mark. Hey guys. Hey, how's it going, Chris? Thanks for taking the questions and cream. Welcome to Neo. Good to hear from you again. Yeah, so I guess the first question, you know, you guys continue to grow really in a robust way in NGS. And so I have to imagine you are taking share in NGS. Can you just maybe touch on any specific indications where you're getting the strongest traction from?

Kareem Saad: As we mentioned, we are looking at the full spectrum of potential partnerships and licensing opportunities. So more on that to come. But we're not leaving any sort of stone unturned, both in internal development and also in licensing for partnerships. Got it, thank you. Okay, the next question comes from Mark Massaro with BTIG. Please proceed. Hey Mark. Hey guys. Hey, how's it going, Chris? Thanks for taking the questions. And Kareem, welcome to NEO.

John: Got it. Thank you.

Speaker Change: Okay, the next question comes from Mark Massaro with BTIG. Please proceed.

Mark Anthony Massaro: Good to hear from you again. Yeah, so I guess the first question is, you guys continue to grow, really, in a robust way in NGS. And so I have to imagine you are taking share in NGS. Can you just maybe touch on any specific indications where you're getting the strongest traction from and then outside of NGS, you know, in areas like flow fish, IHC, how do you see those sort of sub segments growing over the next couple of years? Yeah, so maybe start with the back and then take the front.

Speaker Change: Hey, Mark. Hey, guys. Hey, how's it going, Chris? Thanks for taking the questions, and Kareem, welcome to NEO. Good to hear from you again. Thank you, Mark.

Mark Anthony Massaro: Yeah, so I guess the first question, you know, you guys continue to grow really in a robust way in NGS and so I have to imagine you are taking share in NGS. Can you just maybe touch on any specific

Christopher Smith: And then outside of NGS, you know, in areas like flow, FISH, IHC, how do you see those sort of sub segments growing over the next couple of years? Yeah, so maybe start with the back and then take the front. So if you look at it, we show that slide that kind of shows that diagnostics business growing, you know, approximately 5%. You know, I think we've said publicly that historically grow to the core, but we're still seeing nice, really nice growth there, well above market in some of those modalities. And I think it kind of leads to your next one, is where we would potentially be moving to share.

Speaker Change: Indications where you're you're getting the strongest traction from and then outside of NGS you know in areas like flow, fish, IHC, how do you see those sort of sub segments growing over the next

Christopher Michael Smith: So if you look, we show that slide that kind of shows the diagnostics business growing, you know, approximately 5%. I think we've said publicly, they historically grow two to four, but we're still seeing nice, really nice growth there, well above market in some of those modalities. And I think it kind of leads to your next question, which is where we would potentially be moving share. And I think part of it is the difference between us and some of these large reference labs and hospitals and the ability to come in and really kind of provide an end-to-end solution for their cancer patients and do the testing.

Speaker Change: couple of years.

Speaker Change: Yeah, so maybe start with the back and then take the front. So if you look, we show that slide that kind of shows that diagnostics business growing approximately 5%. I think we've said publicly, they historically grow two to four, but we're still seeing nice, really nice growth there, well above market.

Speaker Change: and some of those.

Christopher Smith: And I think part of it is the difference between us and some of these large reference labs in hospitals and the ability to come in and really kind of provide an end-to-end solution for their cancer patients and doing the testing. So I don't think we've gone out and said specifically any one company to market share perspective. And it's really because every territory is every territory, right? It depends on the geography of the country who's stronger, and how we do things.

Christopher Michael Smith: So I don't think we've gone out and said specifically any one company from a market share perspective. And it's really because every territory is every territory, right? It depends on the geography of the country, who's stronger, and how we do things.

Speaker Change: really kind of provide an end-to-end solution for their cancer.

Speaker Change: Patients and doing the testing so why we you know, we I don't think we've gone out and said specifically any one company market share perspective

Speaker Change: And it's really because every territory is every territory, right? It depends on the geography of the country, who's stronger and...

Christopher Smith: But without question, our team has helped us really, I think, get a quicker entree into some of these other modalities than we probably, early days, thought.

Speaker Change: and how we do things. But without question, our team has helped us really, I think, get a quicker entree into some of these other modalities than we probably early days thought.

Christopher Smith: Okay, and then for my follow-up, can you give us a sense for, you know, when we can expect to see data on pan-tracer liquid and maybe just walk us through, I know you touched on less than seven-day turnaround time, I think the market leader is around that time as well. So can you just give us a sense for, you know, when we might see some data and then walk us through your expectations around Medicare and how you're going about in planning to obtain Medicare coverage in the clinic. Yeah, so look, I think we're doing a couple different things there.

Christopher Michael Smith: But without question, our team has helped us really, I think, get a quicker entree into some of these other modalities than we probably thought in the early days. Okay, and then for my follow-up, can you give us a sense for when we can expect to see data on Pantracer liquid? And maybe just walk us through, I know you touched on, the less than seven day turnaround time. I think the market leader is around that time as well.

Speaker Change: Okay, and then for my follow-up, can you give us a sense for, you know, when we can expect to see data on Pantracer liquid? And maybe just walk us through, I know you touched on

Speaker Change: Less than seven day turnaround time. I think the market leader is around that time as well. So can you just give us a sense for, you know, when we might see some data and then walk us through your expectations around Medicare and how you're going about and planning to

Christopher Michael Smith: So can you just give us a sense for when we might see some data and then walk us through your expectations around Medicare and how you're going about and planning to obtain Medicare coverage in the clinic? Yeah, so look, I think we're doing a couple different things there. I would say that we're running what I would consider more traditional clinical trials, you know, with head-to-head to be able to come out and show some data.

Speaker Change: obtain Medicare coverage in the clinic.

Christopher Smith: I would say that we're running what I would consider more traditional clinical trials, you know, with head to head to be able to come out and show some data. And, you know, obviously I mentioned this on the call, we're going to start with lung and then move into pan cancer, but I think you'll start seeing early data in Q1. Obviously, this is a process from a multi-exit. We've got to go through clinical trial, and that is already underway. And so I think, again, I would say, you know, maybe late Q1. I think the question becomes is how we release that product at, you know, at some point in the Q1, whether we wait for multi-ex or just we're seeing traction in the early kind of clinical release. You know, we'll do kind of a soft market launch to get early clinical data with key customers, and depending on that, we'll make a bigger decision as far as the timing of multi-ex and that data.

Speaker Change: Yeah, so look, I think we're doing a couple different things there. I would say that we're running what I would consider more traditional clinical trials, you know, with head-to-head to be able to come out and show some data.

Christopher Michael Smith: And, you know, obviously, I mentioned this on the call, we're going to start with lung cancer and then move into pain and cancer, but I think you'll start seeing early data in Q1. Obviously, this is a process with MOL-DX that we have to go through a clinical trial, and that is already underway. And so I think, again, I would say, you know, maybe late Q1. I think the question becomes how we release that product at some point in Q1, whether we wait for MOL-DX or just see traction in the early kind of clinical release.

Speaker Change: and you know obviously I mentioned this on the call we're going to start with lung and then move into to pan cancer but I think you'll start seeing early data in Q1 obviously this is a process from a moldy exit we've got to go through

Speaker Change: Clinical trial, and that is already underway. And so I think, again, I would say

Speaker Change: You know, maybe late Q1, I think the question becomes is how we release that product, you know, at some point in the Q1, whether we wait for Mold-DX or just we're seeing traction in the early kind of

Christopher Michael Smith: You know, we'll do kind of a soft market launch to get early clinical data with key customers, and then, depending, that will make a bigger decision as far as the timing of Maldi-X and that data. But I'd say Mark is probably going to be the latter part.

Speaker Change: Clinical release, you know, we'll do kind of a soft market launch to get early clinical data with key customers, and then depending on that, we'll make a bigger decision as far as the timing of Maldi-X and that data. But I'd say market's probably going to be latter part of Q1.

Unknown Executive: But I think the same market is probably going to be latter part of Q1. Okay, great.

Unknown Executive: Thanks, guys.

Matthew Hewitt: Okay, next we have Matt Hewitt with Craig Hallum Capital Group. Please proceed. Good afternoon, and thank you for taking the questions. Maybe first up last quarter you had mentioned that there was some disruptions because of the change health care situation. I'm just curious if that has all been reconciled at this point you've gotten caught up there. Yeah, so we estimated about a $5 million impact coming out of Q1 in terms of collection shortfalls. We've collected most of that through Q2; probably another, probably it was probably a million and a half set that's floating the Q3, but I would say at this point we are caught up now on that shortfall.

Christopher Michael Smith: Okay, great. Thanks, guys. Okay, up next we have Matt Hewitt with Craig Hallam Capital Group. Please proceed. Maybe first up, last quarter, you had mentioned that there were some disruptions because of the changing healthcare situation. I'm just curious if that has all been reconciled. At this point, you've gotten caught up there.

Speaker Change: Okay, great. Thanks, guys.

Speaker Change: Okay, up next we have Matt Hewitt with Craig Hallam Capital Group. Please proceed.

Matthew Carlisle Sykes: Good afternoon and thank you for taking the questions. Maybe first up, last quarter you had mentioned that there was some disruptions because of the changed healthcare situation. I'm just curious if that has all been reconciled at this point, you've gotten caught up there?

Matthew Carlisle Sykes: Yeah, so we estimated about a $5 million impact coming out of Q1 in terms of collection shortfalls. We've collected most of that through Q2, probably another, probably a million and a half that flowed into Q3, but I would say, as of this point, we are caught up now on that shortfall. Got it. And then, regarding the Pantracer test that you plan to launch, what will be the key differentiator there versus the alumina panel? Is it the turnaround time? Just any differentiation there would be helpful.

Speaker Change: Yeah, so we estimated about a $5 million impact coming out of Q1 in terms of collection shortfalls. We've collected most of that through Q2, probably another, probably it was probably a million, million and a half.

Speaker Change: that float in the Q3, but I would say, as of this point, we are caught up now on that shortfall.

Jeffrey Sherman: Got it.

Jeffrey Sherman: And then regarding the pan tracer test that you plan to launch. What will be the key differentiator there versus the aluminum panel? Is it the turnaround time just any differentiation there would be helpful. Thank you. Yeah, so look, we are using an aluminum platform, but it's really the bioinformatics, which would be the big key differentiator that we're developing internally. And so I think the turnaround time; think about that more against other competitors, and that's where we're kind of targeting that seven day to make sure that we're at or better than the other competitors on the market.

Speaker Change: Got it. And then regarding the Pantracer test that you plan to launch, what will be the key differentiators there versus the alumina panel? Is it the turnaround time? Just any differentiation there would be helpful. Thank you.

Matthew Carlisle Sykes: Thank you. Yeah, so look, we are using the Illumina platform, but it's really the bioinformatics, which would be the big key differentiator that we're developing, you know, internally. And so I think the turnaround time, think about that more against other competitors. And that's where we're kind of targeting that seven day to make sure that we're at or better than other competitors. Got it. Thank you very much. Okay, the next question comes from Mike Matson. Do you need them?

Speaker Change: Yes, so look, we are using Illumina platform, but it's really the bioinformatics which would be the big key differentiator that we're developing, you know, internally.

Speaker Change: And so I think the turnaround time, think about that more against other competitors and that's where we're kind of targeting that seven day to make sure that we're at or better than the other competitors on the market.

Jeffrey Sherman: Got it.

Unknown Executive: Thank you very much.

Joseph Conway: Okay, the next question comes from Mike Madison with Needham. Please proceed. Hey, just one more follow-up, maybe for Warren, I guess a lot of the increase in the commercial team has kind of been focused on the clinical side. Warren, I think you did say that ADX is kind of on the right track to resume year-over-year growth. So I guess in apologies if you already stated this, but did you add any sales reps on the farm aside in ADX side in the quarter? You know, what are the plans for increasing headcount there? I think last we had heard it was around 10, but I could be wrong on that.

Speaker Change: Got it. Thank you very much.

Speaker Change: Okay, the next question comes from Mike Matson with Needham. Please proceed.

Michael Stephen Matson: Please proceed. Hey, just one more follow-up, maybe for Warren, I guess. I guess a lot of the increase in the commercial team has kind of been focused on the clinical side. Warren, I think you did say that ADX is kind of on the right track to resume year-over-year growth. So I guess, and apologies if you already stated this, but did you add any sales reps on the pharma side and ADX side in the quarter? You know, what are the plans for increasing headcount there? I think the last time we heard it was around 10, but I could be wrong on that.

Michael Stephen Matson: Hey, just one more follow up, maybe for Warren, I guess.

Warren: I guess a lot of the increase in the commercial team has kind of been focused on the clinical side.

Warren: Warren, I think you did say that ADX is kind of on the right track to resume year-over-year growth.

Speaker Change: So I guess, and apologies if you already stated this, but did you add any sales reps on the pharma side and ADX side in the quarter? You know, what are the plans for increasing headcount there? I think last we had heard it was around 10, but I could be wrong on that.

Warren Stone: Yeah, so I think your estimations there are accurate, and certainly I think we've got to a point where we've stabilized the form of business now, and in the short term it's not intention to add any incremental head to that business, but more we focus, as I've looked at the business more closely, our prior approach was maybe quite fragmented, and our strategy moving forward is a much more focused approach. I think we can therefore gain significantly more leverage with the resources we have, and as we start to gain traction in that business again, we'll then look to make further investments. But in the short term, I use the risk of this here not planning on making any further investment, but we can capitalise as we set our prepare remarks on the commercial enable and infrastructure that was built on the clinical team is now, you know, being also utilized for the foreign revenue as well, okay great. Yeah, that makes sense.

Warren Stone: Yeah, so I think your estimations there are accurate. And certainly, I think we've got to a point where we've stabilized the farmer business now. And in the short term, it's not our intention to add any incremental heads to that business but rather to refocus it. We act, as I've looked at the business more closely, our prior approach was maybe quite fragmented, and our strategy moving forward is a much more focused approach. I think we can therefore gain significantly more leverage with the resources we have. And as we start to gain traction in that business again, we'll then look to make further investments. But in the short term, i.e. for the rest of this year, I am not planning on making any investments.

Speaker Change: Yes, I think your estimations there are accurate and certainly I think we've got to a point where we've stabilized the form of business now.

Speaker Change: And in the short term, it's not our intention to add any incremental heads to that business.

Speaker Change: But more refocused. As I've looked at the business more closely, our prior approach was maybe quite fragmented, and our strategy moving forward is a much more focused approach.

Speaker Change: I think we can therefore gain significantly more leverage with the resources we have and as we start to gain traction in that business again, we'll then look to make further investments. But in the short term, i.e. for the rest of this year, not planning on making any further investments.

Warren Stone: But we can capitalize, as we said in our prepared remarks, on the commercial enablement infrastructure that was built for the clinical team is now being utilized for the pharma team as well. Oh, okay, great. Yeah, that makes sense. Thank you very much.

Speaker Change: But we can capitalize, as we said in our prepared remarks, on the commercial enablement infrastructure that was built on the clinical team is now being also utilized for the pharma team as well.

Warren Stone: Thank you very much.

Speaker Change: Yeah.

Speaker Change: Oh, okay, great. Yeah, that makes sense. Thank you very much.

Christopher Smith: Okay, the next question comes from Bonita with Lyric Partners. Please proceed. Hey, Bonita. Hey, Chris, thanks for the questions here. So first one is on the head count increase. You know, can you, you know, provide us a little bit more into that? And what would you think the head count needs to be eventually, and then how long will it take for some of these reps to be fully productive? Yeah, so look, I think one of the things, because I know when you think about head count, I mean, I think the first thing that pops to mind is the object, but a lot of, I would say, you know, when we came in and looked at this business, it wasn't so much the amount of money we were spending, is what we were spending it on.

Puneet Souda: Okay, the next question comes from Puneet Souda with Lyric Partners. Please proceed. Hey, Puneet.

Speaker Change: Okay, the next question comes from Puneet Souda with Lyric Partners. Please proceed.

Puneet Souda: Hey, Chris, and thanks for the questions here. So, the first one is on the headcount increase. Can you, you know, provide us with a little bit more on that? And where do you think the headcount needs to be eventually? And then how long will it take for some of these reps to be fully productive?

Puneet Souda: Hey, Puneet. Hi.

puneet: Hey, Chris, and thanks for the questions here. So the first one is on the headcount increase, you know, can you, you know, provide us a little bit more into that? And what do you think the headcount needs to be eventually? And then how long will it take for some of these reps to be fully productive?

Christopher Michael Smith: Yeah, so look, I think one of the things, because when you think about hedge count, I mean, I think the first thing that pops to mind is the OPEX. But a lot of I would say, you know, when we came in and looked at this business, it wasn't so much the amount of money we were spending, it's what we were spending it on. And I think what you're seeing is that we're getting efficiencies in other areas of the business.

Speaker Change: Yeah, so look, I think one of the things, because I know when you think about hedge count, I mean, I think the first thing that pops to mind is the OPEX, but a lot of, I would say, you know, when we came in and looked at this business, it wasn't so much the amount of money we were spending, it's what we were spending it on.

Christopher Smith: And I think what you're seeing is we're getting efficiencies in other areas of the business. And then being able to release some of those resources into the commercial organization, which we believe was, we were under indexed. And so I think that when you look at it, I think that's really, you know, we're looking at driving it, and it's in the back half, guy. I think a couple of factors; I mean, as a commercial guy, I went with the right number. Yeah, it may fail to. Never enough. Exactly. You've been never aligning too. Now, however, we have done numerous field expansions over the last 18 months.

Speaker Change: And I think what you're seeing is we're getting efficiencies in other areas of the business.

Christopher Michael Smith: And then being able to release some of those resources into the commercial organization, which we believe was under indexed. And so I think that when you look at it, I think that's really, you know, we're looking at driving it, and it's in the back half, guys. I think a couple of factors. I mean, as a commercial guy, I wouldn't estimate what the right number is. You may fail to. It's never enough.

Speaker Change: And then being able to release some of those resources into the commercial organization, which we believe was, we were under indexed. And so I think that when you look at it, I think that's really, you know, we're looking at driving it and it's in the back half.

Speaker Change: Share anything.

Speaker Change: I think a couple of factors, I mean, as a commercial guy, I won't estimate what the right number is, I may fail to. Never enough. Exactly, we never align internally. However, we have done numerous field expansions over the last 18 months, and I feel, you know, we've got the back office infrastructure in place now from a learning development perspective as well as tool point of view. So the speed to productivity post hiring is narrowing, and I think this is...

Warren Stone: Exactly; we never align internally. However, we have done numerous field expansions over the last 18 months. And I feel, you know, we've got the back office infrastructure in place now from a learning development perspective, and a sales tool point of view. So the speed to productivity post hiring is narrowing. And I think this is attractive for us. Again, you know, I also think the labor market is starting to become a little bit more attractive.

Christopher Smith: And I feel, you know, we've got the back office infrastructure in place now from a learning environment. It's expected that there was two point of view. So the speech productivity post hiring is narrowing. And I think this is attractive for us. Again, you know, I think also the labor market is going to come a little bit more attractive to the time to hire is also reducing. So I think we feel confident in that we can reduce the amount of time from the time we make the decision to when somebody is actually productive significantly from when we started this 18 months ago.

Speaker Change: This is attractive for us, again, you know, I think also the labor market is starting to become a little bit more attractive, so the time to hire is also reducing, so I think we feel confident in that we can reduce the amount of time from the time we make the decision to when somebody's actually productive significantly from when we started this 18 months ago.

Warren Stone: So the time to hire is also reducing. So I think we feel confident that we can reduce the amount of time from the time we make the decision to when somebody is actually productive significantly from when we started this 18 month program. We are probably within that sort of six month range now end to end is what I probably, Got it.

Unknown Executive: And we probably within that for the six month range now into end is what I'll probably estimate. Got it. That's helpful.

Speaker Change: And we're probably within that sort of six-month range now, end-to-end is what I'd probably estimate.

Puneet Souda: That's helpful. And then, you know, when you talked a bit about informatics, and can you elaborate a bit on where you're using AI, but where you're using informatics to drive, you know, deeper into the accounts, it just appears that there's more competition on that front, or at least the perception of competition or new products that are emerging that are integrating more with the oncology EMRs and other approaches. So just wanted to understand your approach there overall to informatics and how it integrates with the NGS assays.

Warren Stone: And then, you know, when we talked a bit about informatics. And can you elaborate a bit on where you're using AI, but where you're using informatics to drive, you know, more deeper into the accounts. It just appears that there's more competition on that front, at least perception of competition or new products that are emerging that are integrating more with oncology EMRs and another approaches. So just wanted to understand your approach there overall on informatics and how it integrates with the NGS assays. Yeah, I think when I talked about that, we were talking about the new limb system, which I think is going to enhance, or even better enable us to create that pathway with hospitals and during the EMR. Do you want to talk a little bit about what's happening and how we've accelerated that?

Speaker Change: Got it. That's helpful. And then, you know, when you talked a bit about informatics, and can you elaborate a bit on where you're using AI, but where you're using informatics to drive, you know, more deeper into the accounts, it just appears that there's more

Speaker Change: Competition on that front, or at least perception of competition, or new products that are emerging that are integrating more with the oncology EMRs and other approaches. So I just wanted to understand your approach there overall on informatics and how it integrates with the NGS assays.

Puneet Souda: Yeah, I think when I talked about that, we were talking about the new LIMS system, which I think is going to enhance or even better enable us to create that pathway with hospitals during the EMR. Do you want to talk a little bit about what's, Yeah, so I think that to answer your question, there are a few things we can talk about and also let Manny talk about informatics in general. But I think integrations with customers through the AMR system is a strategic focus area for us, and certainly bi-directional. So they can place orders with us, we can transfer reports and data to them, and allow them to interrogate data, etc.

Speaker Change: Yeah, I think when I talked about that, we were talking about the new LIMS system, which I think is going to enhance or even better enable us.

Speaker Change: to create that pathway with.

Speaker Change: Hospitals. During the EMR, do you want to talk a little bit about what's happening and how we've accelerated that? Yeah, so I think, to answer your question, I think there's a few things we can talk about and also let Manny talk about informatics in general, but I think integrations with customers through the EMR system is a strategic focus area for us and certainly bi-directionally, so they can place orders with us, we can transfer reports and data to them and allow them to interrogate data, etc. So that's an integral part of the strategy, whether we're talking in the hospital setting or in the community setting, and I think the benefit there is that sort of frictionless experience and also really helping to improve patient care by getting the information, whether it be...

Warren Stone: Yeah, so I think it's a few things we can talk about, and also let me talk about informatics in general. But I think integrations with customers through the AMR system is a strategic focus area for us, and certainly by directionally, so they can place orders of us, we can transfer reports and data to them, and allow them to interrogate data, etc. So that's an integral part of the strategy, whether we're talking in the hospital setting or in the community setting. I think the benefit there is that sort of frictionless experience and also really helping to improve sort of patient care by getting the information, whether it be a report or data, to the practicing position as quickly as possible.

Warren Stone: So that's an integral part of the strategy, whether we're talking in the hospital setting or in the community setting. And I think the benefit there is that sort of frictionless experience and also really helping to improve patient care by getting the information, whether it be a report or data, to the practicing physician as quickly as possible. So that inherently is one of the key strategies that we've got and investing to accelerate that.

Warren Stone: So they're inherently is one of the key strategies that we've gotten and investing to accelerate that because it's, frankly, it's becoming a demand from our customers. The secondary areas also certainly just there with desires have access to the raw data, so they can look for trends within their patient populations, etc. We see this as something that's becoming more of a day-to-day type of ask, and sort of Neo-Axis provides a near future; they provide the solution there where oncologists can actually interrogate their data and look for trends within their patient populations. Man, it is anything you want to talk about generally from an informatics perspective.

Speaker Change: Unknown Executive, Dr. Michael Massaro, Daniel Brennan, Michael Ryskin, David Westenberg, Joseph Conte, Andrew Cooper, Matthew Sweeney, Warren Stone, Kendra Sweeney, Ali Olivo, Neogenomics Inc. The second area is also certainly just their desire to have access to the raw data so they can look for trends within their patient populations, etc. We see that as something that's becoming more of a day-to-day type ask and

Warren Stone: The second area is certainly just their desire to have access to the raw data so they can look for trends within their patient population. We see that as something that's becoming more of a day-to-day type of question, and Neoaccess and Neoseqsus provide the solution where oncologists can actually interrogate that data and look for trends within their field.

Speaker Change: So the neo-access provides a neo-seeker, they provide the solution there where oncologists can actually interrogate that data and look for trends within their patient populations.

Melody Harris: Ma'am, if there's anything you want to talk about generally from an MPI point of view... On the informatics side, that's our revenue-producing, licensing of data into the pharma industry. And so there, you know, we're growing, productizing a little bit better, and expect to see some good growth on that in the back half, but different than the digital transformation piece that Warren was just referring to on the clinical side But the mix of our business into more large panel NGS testing is going to give us more data, ultimately to capitalize on from our informatics side. Got it. Helpful guys. That's great.

Jeffrey Sherman: On the informatics side, that's our revenue producing licensing of data into the pharma industry, and so they're, you know, we're growing productizing a little bit better and expect to see some good growth on that and back after. But different than the digital transformation piece that Warren was just referring to on the clinical site. But the mix of our business into more large panel in GS testing is going to give us more data ultimately to capitalize on from an informatics side over time. Got it helpful guys. That's great.

Speaker Change: Man, if there's anything you want to talk about generally from an informatics perspective.

Speaker Change: On the informatics side, that's our revenue-producing licensing of data into the pharma industry, and so there, you know, we're growing, productizing a little bit better.

Speaker Change: and expect to see some good growth on that in the back half, but different than the digital transformation piece that Warren was just referring to on the clinical side. But the mix of our business into more large panel NGS testing is going to give us more data, ultimately, to capitalize on from an informatics side over time.

Unknown Executive: Thank you.

Tom Deborsi: Once again, if there are any remaining questions, please indicate so by pressing star one. Next is Tom Deborsi with Nephron. Please proceed. Hi, thanks for taking the question. I just had a follow up on I guess your MRD strategy and radar in the context of I guess the preliminary junction being upheld. You know, I realize HPV negative hadn't that cancer might be carved out, but I guess, you know, one concern of ours is really, I guess the size of the potential liability that I realize you can't really articulate. But you know, how do you think about making an additional acquisition?

Speaker Change: Got it. Helpful, guys. That's great. Thank you.

Puneet Souda: Thank you. Once again, if there are any remaining questions, please indicate so by pressing star 1. Up next is Tom DeBorsey with Nefron.

Speaker Change #100: Once again, if there are any remaining questions, please indicate so by pressing star 1. Up next is Tom DeBorsey with Nefron. Please proceed.

Tom Deborsey: Please proceed. Thanks, Tom. Hi, thanks for taking the question. I just had a follow-up, I think. Your MRD strategy and radar in the context of, I guess, the preliminary junction being upheld, you know, I realize HPV negative head and neck cancer might be carved out, but. I guess, you know, one concern of ours is really the size of the potential liability that I realize you can't really articulate. But, you know, how do you think about making an additional acquisition, you know, where, obviously, this is a four-year time, but Innovato was acquired for $415 million.

Speaker Change #100: [inaudible]

Tom Deborsey: Hi, thanks for taking the question. I just had a follow-up, I guess,

Tom Deborsey: Your MRD strategy and radar in the context of, I guess, the preliminary junction being upheld. You know, I realize HPV negative head and neck cancer might be carved out, but...

Speaker Change #102: I guess, you know, one concern of ours is really, I guess, the size of the potential liability that I realize you can't really articulate, but, you know, how do you think about making an additional acquisition?

Tom Deborsi: You know, where, you know, obviously this is before your time, but in Nevada was acquired for $4 and $15 million. So doing an additional acquisition in MRD when I guess maybe the size of the potential legal liability around radar still may not be known.

Speaker Change #103: You know, obviously this is before your time, but Innovato was acquired for $415 million, so doing an additional acquisition in MRD when I guess maybe the size of the potential legal liability around radar still may not be known.

Tom Deborsey: So doing an additional acquisition in MRD when, I guess, maybe the size of the potential legal liability around radar still may not be known. Yeah, so for a couple of things. So, as a company, we don't publicly discuss any ongoing lawsuits. But Ali is here, who's our PC, and can kind of maybe provide some more information.

Ali Olivo: Yeah, so for a couple of things, so as a company, we don't publicly discuss any ongoing lawsuits, but Ali is here and who's our PC and can kind of maybe provide some more information. But do you want to? Yeah, I mean, I'm not sure I understand your question if it's around goodwill impairment or something like that, which we're not going to address. I mean, my question is really around how do you justify making an additional acquisition when you still don't know the size of potential liability that Radar may be, you know, maybe owed to the Tarot.

Speaker Change #103: Yes, so for a couple of things, so as a company, we don't publicly discuss any ongoing lawsuits, but Ali is here, who's our TC, and can kind of maybe provide some more information, but...

Tom Deborsey: Yeah, I mean, I'm not sure I understand your question if it's around goodwill impairment or something like that, which we're not going to address. I can't clarify. My question is really around how do you justify making an additional acquisition when you still don't know the size of the potential liability that Radar may be, you know, may be owed to the tariff?

Ali: Do you want to? Yeah, I mean, I'm not sure I understand your question if it's around

Ali: Goodwill impairment or something like that which

Speaker Change #106: We're not going to address. I could clarify. I mean, my question is really around.

Speaker Change #105: How do you justify making an additional acquisition when you still don't know the size of potential liability that Radar may be owed to Natera?

Ali Olivo: We have, well, first of all, we have not said we would need additional acquisition; we discussed tech transfer, like in-licensing and strategic partnerships, is what we're looking at right now. And then regarding our R&D, we have multiple MRD products in the development stage, one through feasibility that we're planning to validate early next year and one not far along behind it, so we continue to develop MRD products with the resources that we acquired from in Nevada. In our prepared comments, we said we have multiple pathways, and that's, you know, basically one of the multiple pathways we have.

Ali Olivo: We have, well, first of all, we have not said we would make an additional acquisition. We discussed tech transfer, like, in licensing, and strategic partnerships are what we're looking at right now. And then regarding our R&D, we have multiple MRD products in the development stage, one through feasibility that we're planning to validate early next year, and one not far along behind it. So we continue to develop MRD products with the resources that we acquired from Innovata.

Speaker Change #107: We have, well, first of all, we have not said we would make additional acquisition. We discussed tech transfer, like, in licensing and strategic partnerships is what we're looking at right now.

Speaker Change #107: And then regarding our R&D, we have multiple MRD products in the development stage, one through feasibility that we're planning

Speaker Change #107: to validate early next year and one not far along behind it.

Speaker Change #107: So we continue to develop MRT products with the resources that we acquired from Innovata.

Ali Olivo: In our prepared comments, we said we have multiple pathways, and that's, you know, basically one of the multiple pathways we have. Thank you. And I think that's the way to think about it, right?

Speaker Change #107: In our prepared comments, we said we have multiple pathways, and that's basically one of the multiple pathways we have. Yeah.

Christopher Smith: Yeah. Thank you. I think that's the way to think about it, right? There's really three avenues. One is litigation; we're in the middle of it, and we feel very strong about our position. We continue to go down that path. Second is we've always been doing R&D around MRD, knowing that radar from a sensitivity perspective, we would need a next generation. And third is we probably have one of the best distribution systems in the country for cancer, and there's a lot of innovative technologies from a licensing perspective; they're looking for avenues. So look, we're going down three paths, but we're really not disclosing much more than that at this point.

Christopher Michael Smith: There are really three avenues. One is litigation, which we're in the middle of, and we feel very strong about our position, and we continue to go down that path. Second, we've always been doing R&D around MRD, knowing that radar, from a sensitivity perspective, we need it. We would need a next generation. And third, we probably have one of the best distribution systems in the country for cancer. And there are a lot of innovative technologies from a licensing perspective they're looking for avenues.

Speaker Change #107: Thank you. I think that's the way to think about it, right? There's really three avenues. One is litigation, which we're in the middle of, and we feel very strong about our position and we continue to go down that path. Second is we've always been doing R&D around MRD, knowing that radar from a sensitivity perspective, we need it, we would need a next generation. And third is we probably have one of the best distribution systems.

Speaker Change #107: in the country for cancer. And there's a lot of innovative technologies from a licensing perspective that are looking for avenues. So look, we're going down three paths, but we're really not disclosing much more than that at this point.

Christopher Michael Smith: So look, we're going down three paths, but we're really not disclosing much more than that at this point. Okay. Thank you. I think we're near the end of time.

Christopher Smith: Okay. Thank you.

Christopher Michael Smith: So, operator, I appreciate it. Everybody on the call, thanks for taking the time today to catch up. It was a great quarter.

Unknown Executive: I think we're near the end of time, so operator, appreciate it. Everybody on the call. Thanks for taking the time today to catch up. It was a great quarter, really happy with how things turn out and we'll look forward to catching up with everybody soon. Take care. Thank you.

Operator: I'm really happy with how things turned out, and we'll look forward to catching up with everybody soon. Take care. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker Change #107: Okay.

Speaker Change #107: Thank you. I think we're near the end of time, so operator, appreciate it. Everybody on the call, thanks for taking the time today to catch up. It was a great quarter, really happy with how things turned out, and we'll look forward to catching up with everybody soon. Take care.

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

Speaker Change #108: Thank you. This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.