Q4 2024 MDxHealth SA Earnings Call
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I would now like to turn the conference over to John Francis with Life S. A I advisors. Please go ahead.
Before we begin I would like to remind everyone that the company will make forward looking statements during today's call.
Whether in prepared remarks or during the Q&A session. These forward looking statements are subject to inherent risks and uncertainties.
These risks and uncertainties are detailed in the risk factors section of the company's filings with the Securities and Exchange Commission.
Typically in the Companys annual report on form 20-F.
Speaker Change: I'll now turn the call over to Michael Mcgarrity, Chief Executive Officer of Mdx Health.
Michael McGarrity: Thanks, John.
Michael McGarrity: And thank you all for joining us for our fourth quarter and full year 2024 earnings conference call for Mdx now.
Michael McGarrity: With me today is Brian countless Chief financial Officer.
Michael McGarrity: 2024 was a transformational year for Mdx mouse.
Michael McGarrity: Each of our achievements individually and all of them collectively are rooted in and reflect our unwavering focus.
Michael McGarrity: On operating discipline and commercial execution.
Michael McGarrity: As we look at our progress.
Michael McGarrity: I would point to a number of defining milestones that reflect the talent commitment and success of the team across our organization.
Michael McGarrity: We achieved Q4 and full year revenue growth of 28%.
Michael McGarrity: And importantly, our revenue growth has been achieved without the expansion of our commercial sales organization.
Michael McGarrity: Demonstrating increased rep productivity and pathway adoption by our customers.
Michael McGarrity: Of course, none of these achievements can be realized without all of our operating groups dedication to our vision of being the most consistent growth company in the urology diagnostic space.
Good day and welcome to the M D X health fourth quarter and full year 2024 earnings call.
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Michael McGarrity: True excellence as measured by performance over time.
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Michael McGarrity: And we believe our consistent and strong performance quarter after quarter.
Michael McGarrity: It reflects that commitment to excellence.
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Michael McGarrity: Before I hand, it over to Ron for a review of our financial and operating results.
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Speaker Change: A few comments on the focus and execution of our best in class commercial team.
Speaker Change: I would now like to turn the conference over to John Francis was light S. A I advisors. Please go ahead.
Speaker Change: Q4, total billable volume was approximately 24000 tests.
Speaker Change: We begin I'd like to remind everyone that the company will make forward looking statements during today's call.
Speaker Change: Representing total test unit growth of 26%.
Speaker Change: Whether in prepared remarks or during the Q&A session. These forward looking statements are subject to inherent risks and uncertainties.
Speaker Change: Test volumes for our tissue based tests, which include confirm mdx and G. P. S came.
Speaker Change: These risks and uncertainties are detailed in the risk factors section of the Companys filings with the Securities and Exchange Commission specifically in the company's annual report on form 20-F.
Speaker Change: Came in at almost 12000 for the quarter.
Speaker Change: An increase of 50% over the prior year period.
Speaker Change: In tissue based test grew 31% for the full year.
Speaker Change: I'll now turn the call over to Michael Mcgarrity, Chief Executive Officer of Mdx Health.
Speaker Change: For a liquid based tests, which includes select mdx resolve mdx and Germline.
Speaker Change: Thanks, John.
Speaker Change: And thank you all for joining us for our fourth quarter and full year 2024 earnings conference call for Mdx now.
Speaker Change: Test volumes exceeded 12000.
Speaker Change: An increase of 10% over the prior year period.
Speaker Change: With me today is Ryan Chalcis, Chief Financial Officer.
Speaker Change: And liquid based tests grew 28% for the full year.
Speaker Change: 2024 was a transformational year for Mdx House.
Speaker Change: The growth.
Speaker Change: Celebration of our tissue based tests.
Speaker Change: Each of our achievements individually.
Speaker Change: Reflects our unique positioning in the urology market.
Speaker Change: All of them collectively are rooted in and reflect our unwavering focus.
Speaker Change: Mdx health is the only company that is able to provide a clinically actionable result.
Speaker Change: On operating discipline and commercial execution.
Speaker Change: After initial biopsy.
Speaker Change: As we look at our progress.
Speaker Change: Whether positive or negative.
Speaker Change: Would point to a number of defining milestones that reflect the talent commitment and.
Speaker Change: Upon a negative initial biopsy or confirm task can determine the patients cancer risk.
Speaker Change: Success the team across our organization.
Speaker Change: With an optimal negative predictive value.
Speaker Change: We achieved Q4 and full year revenue growth of 28%.
Speaker Change: Guiding the decision for a repeat biopsy.
Speaker Change: Or the potential to monitor with annual screening.
Speaker Change: And importantly.
Speaker Change: Our revenue growth has been achieved without the expansion of our commercial sales organization.
Speaker Change: Of equal importance and clinical significance.
Speaker Change: It bears, noting that our confirmed test independently analyzes each core of the biopsy.
Speaker Change: Construction increased rep productivity and pathway adoption by our customers.
Speaker Change: To address the estimated 30% false negative rate of initial biopsy.
Speaker Change: Of course, none of these achievements can be realized without all of our operating groups dedication.
Speaker Change: Upon positive initial biopsy or genomic prostate score or GPS test.
Speaker Change: Two our vision of being the most consistent growth company in the urology diagnostic space.
Speaker Change: Which was supported by 20 year follow up data for both adverse pathology and.
Speaker Change: True excellence as measured by performance over time.
Speaker Change: And prostate specific mortality provides a critical risk assessment that informs whether the patients should be considered for intervention.
Speaker Change: And we believe our consistent and strong performance quarter after quarter reflects that commitment to excellence.
Speaker Change: Or in active surveillance protocol.
Ron: Before I hand, it over to Ron for a review of our financial and operating results.
Speaker Change: Importantly, the GPS test requires materially less tissue than competing tests.
Ron: A few comments on the focus and execution of our best in class commercial team.
Speaker Change: Offering compelling value to our pathology partners.
Ron: Q4, total billable volume was approximately 24000 tests.
Speaker Change: Who work closely with our urology customers to preserve biopsy tissue.
Ron: Representing total test unit growth of 26%.
Speaker Change: This powerful and compelling combination is driving mdx health test adoption.
Ron: Test volumes for our tissue based tests, which include confirm mdx and GPS came.
Speaker Change: Which we believe is leading to significant improvements in how prostate cancer is diagnosed.
Ron: Came in at almost 12000 for the quarter.
Ron: An increase of 50% over the prior year period.
Speaker Change: And ultimately managed.
Speaker Change: Based on our unique positioning in the market.
Ron: Tissue based test grew 31% for the full year.
Speaker Change: We remain confident that our growth will continue to accelerate in a sustainable way.
Ron: For a liquid based tests, which includes select mdx resolve mdx and Germline.
Speaker Change: And then our goal of delivering 20% revenue growth is quite achievable.
Ron: Test volumes exceeded 12000.
Ron: An increase of 10% over the prior year period.
Speaker Change: Our focus on execution is the key to our continued success.
Ron: And liquid based tests grew 28% for the full year.
Speaker Change: The quality and strength of our commercial team, which is comprised of highly experienced molecular diagnostic sales reps and strategic account managers with support from our medical science liaisons is.
Ron: The growth acceleration of our tissue based tests.
Ron: Reflects our unique positioning in the urology market.
Ron: Mdx health is the only company that is able to provide a clinically actionable result.
Speaker Change: It's providing greater access to our tests and increased adoption among key opinion leaders and large urology group practices.
After initial biopsy.
Ron: Whether positive or negative.
Speaker Change: To be clear.
Upon a negative initial biopsy or confirm task can determine the patients cancer risk.
Speaker Change: It remains challenging for patients to navigate the pathway of diagnosis and potential intervention <unk> surveillance.
Ron: With an optimal negative predictive value.
Ron: The decision for a repeat biopsy or.
Speaker Change: MTX health dresses this challenge by providing patients with the most expansive menu of.
Ron: Or the potential to monitor with annual screening.
Ron: Of equal importance and clinical significance.
Speaker Change: Of clinically actionable diagnostics in the urology space.
Ron: It bears, noting that our confirmed test independently analyzes each core of the biopsy to.
Speaker Change: We are also confident that our urology and pathology customer base.
Speaker Change: Is increasingly recognizing the unique clinical value of our tests.
Ron: To address the estimated 30% false negative rate of initial biopsy.
Speaker Change: Which bring clarity to what can often be a confounding diagnostic journey for patients.
Ron: Upon positive initial biopsy or genomic prostate score or GPS test.
Speaker Change: The diagnostic value of our tests brings the potential to avoid unnecessary interventions, while also accelerating treatment when appropriate.
Ron: Which is supported by 20 year follow up data for both adverse pathology and prostate specific mortality provides a critical risk assessment that informs whether the patients should be considered for intervention oren.
Speaker Change: To summarize I believe no other company is better positioned to help improve the patient journey through prostate cancer diagnosis and treatment.
Ron: For an active surveillance protocol.
Ron: Importantly, the GPS test requires materially less tissue than competing tests.
Speaker Change: And our results continue to reflect our success in.
Speaker Change: And bringing value to this patient population.
Ron: Offering compelling value to our pathology partners, who work closely with our urology customers to preserve biopsy tissue.
Speaker Change: Based on these dynamics, we are confirming our previously announced revenue guidance of $108 million to $110 million for 2025.
Ron: This powerful and compelling combination is driving mdx health test adoption.
Speaker Change: Meeting or exceeding our 20% revenue growth goal.
Ron: Which we believe is leading to significant improvements in how prostate cancer is diagnosed and.
Speaker Change: While also crossing the adjusted EBITDA threshold.
Speaker Change: In the first half of this year.
Ron: And ultimately managed.
Speaker Change: I will follow up with closing comments and view forward, but.
Ron: Based on our unique positioning in the market.
Speaker Change: First let me turn the call over to Ron for a review of our financial and operating results for Q4.
Ron: We remain confident that our growth will continue to accelerate in a sustainable way.
Speaker Change: Brian.
Ron: Thank you Mike.
Ron: And then our goal of delivering 20% revenue growth is quite achievable.
Speaker Change: Following Mike's remarks, we're very pleased to report strong performance in the fourth quarter and full year of 2024.
Ron: Our focus on execution is the key to our continued success.
Speaker Change: Revenues for the fourth quarter ended December 31, 2024 increased by 28% to $24 $7 million.
Ron: The quality and strength of our commercial team, which is comprised of highly experienced molecular diagnostic sales reps and strategic account managers with support from our medical science liaisons.
Speaker Change: So at $19 $4 million for the fourth quarter of.
Speaker Change: 2023.
Ron: It's providing greater access to our tests and increase adoption among key opinion leaders and large urology group practices.
Speaker Change: Like the prior quarter all of this growth was organic and delivered without expansion of our sales organization.
Speaker Change: Which reflects the leverage we continue to generate from our sales channel and the greater market penetration of our full line of tests.
Ron: To be clear.
Ron: It remains challenging for patients to navigate the pathway of diagnosis and potential intervention <unk> surveillance.
Speaker Change: Moving below the revenue line, our gross profit for the fourth quarter of 2024 was $15 5 million, an increase of 22% as compared to $12 $7 million for the fourth quarter of 2023.
Ron: Mdx health dresses this challenge by providing patients with the most expansive menu of clinically actionable diagnostics in the urology space.
Ron: We are also confident that our urology and pathologic customer base.
Speaker Change: Gross margins were 62, 7% for Q4 24.
Ron: Is increasingly recognizing the unique clinical value of our tests.
Speaker Change: As compared to 65, 3% for Q4 23.
The decline in gross margins of two six percentage points, primarily attributed to our test mix and timing of payments.
Ron: Which bring clarity to what can often be a confounding diagnostic journey for patients.
The diagnostic value of our tests brings the potential to avoid unnecessary interventions, while also accelerating treatment when appropriate.
Speaker Change: Our operating loss for the fourth quarter declined 27% to $4 6 million compared to $6 $3 million for the fourth quarter of 2023.
Ron: To summarize I believe no other company is better positioned to help improve the patient journey through prostate cancer diagnosis and treatment.
Speaker Change: Primarily driven by a growth in sales and gross profit, partially offset by growth of 6% and operating expenses, which were primarily related to an increase in clinical studies.
Ron: And our results continue to reflect our success in.
Speaker Change: Our net loss decreased 36% to $6 8 million compared to $10 7 million for the prior year period drip.
Ron: And bringing value to this patient population.
Ron: Based on these dynamics, we are confirming our previously announced revenue guidance of $108 million to $110 million for 2025.
Speaker Change: Driven by our $2 $8 million increase in gross profit as well as a decrease of two point and $2 million and net financial expenses.
Ron: Meeting or exceeding our 20% revenue growth goal, while also crossing the adjusted EBITDA threshold in the first half of this year.
Speaker Change: Finally, our fourth quarter, adjusted EBITDA was negative $1 4 million or <unk>.
Speaker Change: 68% improvement over fourth quarter of 2023, adjusted EBITDA of negative $4 $4 million.
Ron: I will follow up with closing comments and view forward, but first let me turn the call over to Ron for a review of our financial and operating results for Q4.
Speaker Change: We believe that we are on track to achieving our goal of positive adjusted EBITDA in the first half of this year.
Ron: Brian.
Speaker Change: Note that a reconciliation of <unk> to non <unk> financial measures has been provided in the tables included in this press release.
Speaker Change: Thank you Mike.
Speaker Change: To follow on Mike's remarks, we're very pleased to report strong performance in the fourth quarter and full year 2024.
Speaker Change: Cash and cash equivalents as of December 31, 2024, or $46 $8 million.
Speaker Change: Revenues for the fourth quarter ended December 31, 2024 increased by 28% to $24 $7 million.
And with the pending draw of the second tranche under our Oregon that debt facility, our balance sheet will be significantly strengthened to meet our 2025 earn out obligation to exact sciences as well as support the execution of our 2025 business plan.
Speaker Change: At $19 $4 million or.
Speaker Change: For the fourth quarter of.
Speaker Change: 2023.
Speaker Change: Like the prior quarter all of this growth was organic and delivered without expansion of our sales organization, which reflects the leverage will continue to generate from our sales channel and the greater market penetration over a full line of tests.
Michael McGarrity: This concludes my overview of the results and I will now turn the call back to Mike.
Speaker Change: Thanks, Ron.
Speaker Change: I would like to take a step back and referenced the goals, we set as a company when I joined Mdx health in 2019.
Speaker Change: Moving below the revenue line, our gross profit for the fourth quarter of 2024 was $15 5 million, an increase of 22% as compared to $12 7 million for.
Speaker Change: And that was to build the highest quality growth vertical and urology diagnostics.
Speaker Change: Along the way we have taken advantage of growth opportunities through our acquisition of the Oncotype GPS tests from exact sciences.
Speaker Change: For the fourth quarter of 2023.
Speaker Change: Gross margins were 62, 7% for Q4 24 as compared to 65, 3% for Q4 'twenty three the.
Speaker Change: <unk> of our resolve test.
Speaker Change: And the Internet introduction of our hereditary Germline testing all can see dove.
Speaker Change: The decline in gross margins of two six percentage points, primarily attributed to our test mix and timing of payments.
Speaker Change: And fueled by rigor in our diligence process.
Speaker Change: The strength of our channel and relationships as.
Speaker Change: Our operating loss for the fourth quarter declined 27% to $4 6 million.
Speaker Change: As well as the access and trust that we have garner from our urology customer base.
Speaker Change: Compared to $6 3 million for the fourth quarter of 2023.
Speaker Change: That trust is only earned through a combination of not only the highest quality sales representatives.
Speaker Change: Primarily driven by a growth in sales and gross profit, partially offset by growth of 6% and operating expenses, which were primarily related to an increase in clinical studies.
Speaker Change: But also the world class customer support across our organization.
Speaker Change: All believing quality first.
Speaker Change: Customers always.
Speaker Change: Our net loss decreased 36% to $6 8 million.
Speaker Change: I would suggest that the evidence for our view is supported by the fact that our five year revenue compound annual growth rate or CAGR has exceeded 50%.
Speaker Change: Compared to $10 7 million for the prior year period.
Speaker Change: Given by our $2.8 million increase in gross profit as well as a decrease of $2 2 million in net financial expenses.
Speaker Change: Whether in the sales force laboratory operations revenue cycle management client services patient advocacy quality and regulatory.
Speaker Change: Finally, our fourth quarter, adjusted EBITDA was negative $1 4 million or 68% improvement over fourth quarter of 2023, adjusted EBITDA of negative $4 4 million.
Speaker Change: Our entire Mdx health team operates under the mission.
Speaker Change: But there is a patient and family.
Speaker Change: We believe that we are on track to achieving our goal of positive adjusted EBITDA in the first half of this year.
Speaker Change: Other side of every sample we receive.
Speaker Change: That is what drives our customer base to trust Mdx health as their laboratory partner for.
Speaker Change: Note that a reconciliation of <unk> to non <unk> financial measures has been provided in the tables included in this press release.
Speaker Change: These critical diagnostic tests that informed patient pathways.
Speaker Change: Cash and cash equivalents as of December 31, 2024, or $46 $8 million.
Speaker Change: Additionally.
Speaker Change: As we came into 2024, we set the goal of exiting the year on a $100 million revenue run rate with clear visibility to operating profitability.
Speaker Change: And with a pending draw of the second tranche under our Oregon that debt facility, our balance sheet will be significantly strengthened to meet our 2025 earn out obligation to exact sciences as well as support the execution over 2025 business plan.
Speaker Change: And we were confident we would achieve this goal without adding additional sales representatives.
Speaker Change: Moreover, we met or exceeded these goals, while controlling our operating expense, which increased at a fraction of our revenue growth rate.
Mike: This concludes my overview of the results and I will now turn the call back to Mike.
Mike: Thanks, Ron.
Speaker Change: I would like to take a step back and referenced the goals, we set as a company when I joined Mdx health in 2019.
Speaker Change: We have delivered on our 2024 goals and are confident that our long term mission set in 2019.
Mike: And that was to build the highest quality growth vertical and urology diagnostics.
Speaker Change: It's taken shape.
Speaker Change: And put us in a position to become the clear leading growth company.
Mike: Along the way we have taken advantage of growth opportunities through our acquisition of the Oncotype GPS tests from exact sciences.
Because solely into our target urology market.
Speaker Change: As a final comment.
Mike: The launch of our resolve test.
Speaker Change: This urology vertical market that I referenced is expected to grow at an annual rate of 5% to 10% over the coming years based on multiple factors <unk>.
Mike: And the introduction of our hereditary Germline testing, all can see dove and fueled by rigor in our diligence process.
Mike: The strength of our channel and relationships.
Speaker Change: Including the increasing rate of prostate cancer the aging population.
Mike: As well as the access and trust that we have garnered from our urology customer base.
Speaker Change: And the lingering effects of the pandemic, where prostate cancer screenings were estimated to be down 50% over.
Mike: That trust is only earned through a combination of not only the highest quality sales representatives.
Over a two to three year period.
Mike: But also the world class customer support across our organization.
Speaker Change: I believe it is also fair to say that prostate cancer is where breast cancer was 25 years ago.
Mike: All believing quality first.
Mike: Customers always.
Speaker Change: In that the awareness of men's health and screening of men beginning at an earlier age has made the face of prostate cancer more public is the leading cancer risk for men.
Mike: I would suggest that the evidence for reviews supported by the fact that our five year revenue compound annual growth rate or CAGR has exceeded 50%.
Mike: Whether in the sales force laboratory operations revenue cycle management client services.
Speaker Change: From the start we have emphasized two key elements of our operating approach.
Speaker Change: Focus and execution.
Mike: <unk> advocacy quality and regulatory or.
Speaker Change: We are certain we have built a culture, where focus and execution are creating a unique and trusted brand in the urology market.
Mike: Our entire Mdx health team operates under the mission.
Mike: But there is a patient and family on.
Mike: On the other side of every sample we receive.
Speaker Change: Our reputation is built upon provide an exceptional level of service.
Mike: That is what drives our customer base to trust Mdx Health is no laboratory partner.
Speaker Change: And the quality and mission of our people has cemented a foundation of trust that we.
Mike: For these critical diagnostic tests that informed patient pathways.
Speaker Change: We strive to earn it every day in neurology community.
Mike: Additionally, as.
Speaker Change: And as always we carry a great deal of responsibility to provide value for all of our stakeholders include.
Mike: As we came into 2024, we set the goal of exiting the year on a $100 million revenue run rate with clear visibility to operating profitability.
Speaker Change: Including patients customers payers and shareholders.
Mike: And we were confident we would achieve this goal without adding additional sales representatives.
Speaker Change: Thank you for your interest in and support of Mdx House.
Speaker Change: I'll turn the call back over to the operator for questions.
Mike: Moreover, we met or exceeded these goals, while controlling our operating expense, which increased at a fraction of our revenue growth rate.
Speaker Change: We will now begin the question and answer session.
Speaker Change: A question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
Mike: We have delivered on our 2024 goals and are confident that our long term mission set in 2019.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.
Mike: Taken shape.
Mike: And put us in a position to become the clear leading growth company focused solely into our target urology market.
Our first question.
Thomas Flaten: Comes from Thomas Flaten with Lake Street. Please go ahead.
Mike: As a final comment.
Mike: This urology vertical market that I referenced is expected to grow at an annual rate of 5% to 10% over the coming years based on multiple factors, including.
Speaker Change: Hey, good afternoon, Thanks, Mike and Ron for taking the questions.
Speaker Change: Just curious if you could give us some some quality qualified or I'm, sorry, some qualitative ideally.
Mike: Including the increasing rate of prostate cancer.
Speaker Change: Or quantitative.
Speaker Change: Thoughts on how you would expect germ line to contribute to the 2025 growth rate that you've laid out with your guidance.
Mike: The aging population and the lingering effects of the pandemic, where prostate cancer screenings.
Thomas Flaten: Hey, Thomas.
Mike: Estimated to be down 50% over a two to three year period.
Speaker Change: We're confident that.
Speaker Change: Our germline offering will begin to contribute in 2025 as we've noted.
Mike: I believe it is also fair to say that prostate cancer is where breast cancer was 25 years ago.
Speaker Change: Say two things.
Speaker Change: As we've discussed we're very conservative with the initial introductions revenue recognition how your experience.
Mike: In that the awareness of men's health and screening of men beginning at an earlier age.
Speaker Change: Anyway, we took resolve to market is the path we are following with Germline.
Mike: Made the face of prostate cancer more public.
Mike: As the leading cancer risk for a man.
Speaker Change: Do expect it to contribute in 2025, and we will expect to update that quarter by quarter I would just say that.
Mike: From the start we have emphasized two key elements of our operating approach.
Speaker Change: You know our guidance is not contingent on.
Mike: Focus and execution.
Speaker Change: Significant contributions from our Germline, but were very confident the same diligence and rigor I noted that we.
Mike: We are certain we have built a culture, where focus and execution are creating a unique and trusted brand in the urology market.
Speaker Change: Applied any growth opportunities it was applied here and we're confident that it fits.
Mike: Our reputation is built upon provide an exceptional level of service and.
Speaker Change: Very very well with our prostate cancer menu.
Mike: And the quality and mission of our people has cemented a foundation of trust that we strive to earn every day in the urology community.
Speaker Change: And the way my comment about breast cancer. The way the market is just paying attention to not only the diagnostics puts us hereditary risks.
Mike: And as always we carry a great deal of responsibility to provide value for all of our stakeholders.
Speaker Change: Thank you and then one more and I'll hop back into queue up Ron how should we be thinking about gross margins moving forward, particularly in light of Mike's comments that germ line might not be a significant contributor this year.
Mike: Including patients customers payers and shareholders.
Mike: Thank you for your interest in and support of Mdx House.
Speaker Change: Well, we don't give.
Speaker Change: Guidance on gross margin, specifically, but I think we've said in the past that we expect gross margins to be in the let's start with a sex and be somewhere around in the mid sixties for.
Mike: And I'll turn the call back over to the operator for questions.
Mike: We will now begin the question and answer session.
Speaker Change: Hum.
Speaker Change: Just a few quarters.
Speaker Change: Got it I appreciate taking the questions. Thank you.
Mike: Ask a question you May press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
Speaker Change: And the next question comes from Andrew Brachman with William Blair. Please go ahead.
Mike: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.
Andrew Brachman: Hey, guys. Good afternoon extra taking the question maybe to pick up where you just left off on the outlook for adjusted EBITDA can you, maybe just sort of remind us how we should be thinking about opex here over the next handful of quarters, and then I guess bigger picture as you cross the chasm to our adjusted EBITDA positivity does that change any of your sort of.
Alright first question.
Speaker Change: Comes from Thomas Flaten with Lake Street. Please go ahead.
Speaker Change: Hey, good afternoon, Thanks, Mike and Rob for taking the questions.
Speaker Change: Just curious if you could give us some some quality qualified George.
Speaker Change: Some qualitative ideally.
Andrew Brachman: Views on how you sort of think about investments or sort of maybe being more aggressive on the spend a few graphs that ah crap that milestone.
Speaker Change: Or quantitative.
Thoughts on how you would expect germ line to contribute to the 2025 growth rate that you've laid out with your guidance.
Andrew Brachman: Yes, I'll take that Andrew So I think the important point on.
Thomas Flaten: Hi, Thomas.
Andrew Brachman: The gross margin is that it's where we expected it to be and it's where it.
Speaker Change: We're confident that.
Speaker Change: Our germline offering will begin to contribute in 2025 as we've noted.
Andrew Brachman: Our target was to flip.
Andrew Brachman: Positive so we're very confident that the.
Speaker Change: I'd say two things.
Andrew Brachman: P&L and you're seeing what we anticipated the decline in adjusted EBITDA. We've been we reported it for Q4 to give a basis for the progress we've made.
Speaker Change: As we've discussed we're very conservative with the initial introductions revenue recognition.
Speaker Change: Her experience.
Speaker Change: Same way, we took resolve to market is the path for filing with Germline. We do expect it to contribute in 2025, and we will expect to update that quarter by quarter I would just say that.
Andrew Brachman: And the path that we have to flip here as far as the second part of your question.
Andrew Brachman: Well that catalyze additional investments I think that our growth strategy remains the same as it has over the last number of years right.
Speaker Change: Our guidance is not contingent.
Andrew Brachman: Our becoming more obvious as a potential partner for.
Speaker Change: Significant contributions from our Germline, but were very confident the same diligence and rigor I noted that we.
Andrew Brachman: For growth opportunities in this space based on the strength of our channel and our access and influence over our urology and pass algae group customer base, but we're going to be very.
Speaker Change: Apply to any growth opportunities. It was applied here and we're confident that it fits.
Speaker Change: Very very well with our prostate cancer menu.
Andrew Brachman: I'll go back to the German rigorous and evaluating these and I think we have a really good.
Speaker Change: And the way my comment about breast cancer the way the market is who's paying attention to not only the diagnostics puts us hereditary risk associated with it.
Andrew Brachman: A model for how we look at opportunities and how we execute on them I think unlikely to be transformative M&A, but if you look at the way we've put together a menu.
Speaker Change: Thank you and then one more and I'll hop back into queue of Ron how should we be thinking about gross margins moving forward, particularly in light of Mike's comments that germline might not be a significant contributor this year.
Andrew Brachman: We have visibility to opportunities.
Andrew Brachman: We'll look at them as we go but no no material change to our strategy I think the business begins the fund itself as we cross.
Speaker Change: Well, we don't guide.
Speaker Change: Guidance on gross margin, specifically, but I think we've said in the past that we expect gross margins to be in the mid.
Andrew Brachman: Operating profitability.
Andrew Brachman: And that really ensures that we were very confident.
Speaker Change: To start with a six and be somewhere around in the mid sixties for.
Andrew Brachman: Our ability to operate execute deliver results.
Over the next few quarters.
Andrew Brachman: It would be funded as a company to drive that growth and meet all of our obligations.
Speaker Change: Got it I appreciate you taking the questions. Thank you.
Speaker Change: And the next question comes from Andrew Brachman with William Blair. Please go ahead.
Michael McGarrity: Great that's perfect color and then Mike as my follow up here Theres been a lot of chatter around sort of the MTN guideline.
Andrew Brachman: Hey, guys. Good afternoon. Thanks for taking the questions maybe just pick up where you just left off on the outlook for adjusted EBITDA can you, maybe just sort of remind us how we should be thinking about opex here over the next handful of quarters, and then I guess bigger picture as you cross the chasm to adjusted EBITDA positivity does that change any of your sort.
Speaker Change: Guidelines that were published in December for GPS, maybe just big picture. How has this impacted your business if at all over the last few months since I came out and then.
Speaker Change: Separately, how should we be thinking about the potential for you to generate level one evidence there. Thanks.
Speaker Change: Yeah, I'll take the back part first so we communicated publicly that we.
Andrew Brachman: Views on how do you sort of think about investments or sort of maybe being more aggressive on the stent graft.
Speaker Change: We have a plan based on our partnership with Oxford.
Andrew Brachman: Okay.
Two.
Andrew Brachman: Yes, I'll take that Andrew So I think the important point.
Speaker Change: No drive our data and access level one coverage. It's important to note that I think with regard to the NCC guidelines I think you've noted appropriately that I think.
Andrew Brachman: The gross margin is that it's where we expected it to be and it's where.
Andrew Brachman: Our target was to flip EBITDA positive. So we're very confident that the.
Speaker Change: It created more confusion than directed behavior I think are our results with our tissue based tests reflect that I think as you look at Q4, our growth is actually accelerating through.
Andrew Brachman: P&L and you're seeing what we anticipated the decline in adjusted EBITDA.
Andrew Brachman: We reported it for Q4 to give a basis for a the progress we've made.
Speaker Change: Through that period and.
Speaker Change: I'll be careful here, but I think a lot of positions.
Andrew Brachman: And the path that we have to flip here as far as the second part of your question.
Speaker Change: I've been overplayed.
Speaker Change: With regard to.
Andrew Brachman: Well that catalyze additional investments I think that our growth strategy remains the same as it has over the last number of years right.
Speaker Change: That.
Speaker Change: Communication and the immediate response, we're very very confident in us.
Speaker Change: Our channel checks our relationships with the way clinicians are customer base as well as our target customer base.
Andrew Brachman:
Andrew Brachman: Becoming more obvious as a potential partner.
Andrew Brachman: For growth opportunities in this space based on the strength of our channel and our access and influence over our urology and pathology group customer base, but we're going to be very.
Speaker Change: More of that information and makes clinical decisions about which tests to use for which patient population.
Speaks to our air results.
Andrew Brachman: I will go back to the chairman rigorous and evaluating these and I think we have a really good.
Speaker Change: And so we're very confident that.
Andrew Brachman: Model for how we look at opportunities.
Speaker Change:
Speaker Change: We were very confident in our position with regard to the guidelines.
Andrew Brachman: We execute on them I think unlikely to be transformative M&A, but if you look at the way we've put together a menu.
Speaker Change: I think maybe more importantly.
Speaker Change: Our understanding of the way discuss are adopted and if you look at GPS in particular.
Andrew Brachman: We have visibility to opportunities.
Andrew Brachman: We will look at them as we go but no material change to our strategy I think the business begins to fund itself as we cross.
Speaker Change: Would put our data.
Speaker Change: And positioning.
Speaker Change: In the patient population that we serve most.
Andrew Brachman: Operating profitability.
Speaker Change: It is not only compelling but.
Andrew Brachman: And that really ensures that we were very confident in our ability to operate execute deliver results.
Speaker Change: First in class so.
Speaker Change: We continue to be confident that the results that we're presenting today reflect that position.
Andrew Brachman: It would be funded as a company.
Andrew Brachman: To drive that growth and meet all of our obligations.
Speaker Change: And obviously inform our view forward for 2025 for sure.
Andrew Brachman: Great.
Speaker Change: For color and then Mike as my follow up here Theres been a lot of chatter around sort of the <unk> guideline guide.
Speaker Change: Our ability to continue to drive and deliver this thing.
Speaker Change: Great. Thanks, guys.
Speaker Change: The guidelines that were published in December for GPS, maybe just big picture. How has this impacted the business if at all over the last few months that came out and then.
Speaker Change: And the next question comes from Thomas O'brien, Kim with KBC Securities. Please go ahead.
Thomas O'brien: Alright, thanks for taking my questions.
Definitely how should we be thinking about the potential for you to generate level one evidence there. Thanks.
Speaker Change: Maybe to start off I wanted to jump on a previous question.
Speaker Change: Yes, I'll take the back part first so we communicated publicly that we.
Speaker Change: I'm, Mike how do you think about the breadth of test menu at this point in time should we potentially anticipate any new destinations for 2025.
Speaker Change: We have a plan based on our partnership with Oxford.
Speaker Change: Two.
Speaker Change: No drive our data and access level one coverage. It's important to note that I think with regard to the NCC guidelines I think you've noted appropriately that I think.
Speaker Change: Well I'll.
Speaker Change: I'll hit it again Thomas maybe.
Speaker Change: Frame to the way I addressed the first time I think it's important to note that our.
Speaker Change: Our current menu.
Speaker Change: It created more confusion than directed behavior I think are our results with our tissue based tests reflect that I think as we look at Q4, our growth is actually accelerating.
Speaker Change: And the market opportunity associated with that would allow us to meet our growth objectives for the foreseeable future.
Speaker Change: Our growth rates are speaking to.
Speaker Change: Back that we are driving growth through both market conversion.
Speaker Change: Through that period.
Speaker Change: I'll be careful here, but I think a lot of positions been overplayed.
Speaker Change: And market share.
Speaker Change: With regard to.
Speaker Change: That.
Speaker Change: Particularly when you look at our tissue based test.
Speaker Change: Communication and the immediate response, we're very very confident in is our.
Our growth rate has accelerated through Q4.
That can only happen when those two factors are working but the most important point is <unk>.
Speaker Change: Our channel checks.
Speaker Change: Our relationships with the way clinicians are customer base as well as our target customer base.
Speaker Change: Absent any additional growth opportunities that we would take advantage of.
Speaker Change: Absorb that information it makes clinical decisions about which test to use for which patient population.
Speaker Change: Our view on our growth being.
Speaker Change: Very sustainable.
Speaker Change: Is clear.
Speaker Change: I think speaks to our air results.
Speaker Change: We would look at it the same way I've commented before that we'll be opportunistic.
Speaker Change: And so.
Speaker Change: We're very confident that.
Speaker Change: Well I'll refer back to my comment that.
Speaker Change: We were very confident in our position with regard to the guidelines.
Speaker Change: In my view over the last five years, we had to do two things with our business, we have to Derisk the business and we have to become more obvious I think that we have done the former.
Speaker Change: And I think maybe more importantly.
Speaker Change: Our understanding of the way. These tests are adopted and if you look at GBS in particular.
Speaker Change: I think the latter is is taking shape.
Speaker Change: We would put our data.
Speaker Change: We're confident that.
Speaker Change: And positioning.
Speaker Change: Positioning.
Speaker Change: I'll reserve any comments on the current market.
Speaker Change: The patient population that we serve most.
Speaker Change: The evaluation other than to say.
Speaker Change: It is not only compelling but.
Speaker Change: We are very confident that we focus and execute and deliver results quarter after quarter.
Speaker Change: And class so.
Speaker Change: We continue to be confident that the results that we're presenting today reflect that position.
Speaker Change: The business begins to fund itself, we like our balance sheet position.
Speaker Change: Going forward that that will all sulfur itself and.
Speaker Change: Obviously inform our view forward for 2025 for sure.
Speaker Change: That's what everybody here on the team is.
Speaker Change: Our ability to continue to drive and deliver this type of growth.
Speaker Change: We would update on additional growth opportunities as they present themselves to us and we execute on them but.
Speaker Change: Great. Thanks, guys.
Speaker Change: And the next question comes from Thomas <unk> with KBC Securities. Please go ahead.
Speaker Change: We are our guidance does not contemplate any additional growth opportunities through 2025.
Speaker Change: Alright, thanks for taking my questions.
Speaker Change: Maybe to start off I want to build on the previous question.
Speaker Change: Okay.
Speaker Change: And I also wanted to quickly check in with regards to select a it's been a couple of quarters now since our since Medicare reimbursement has been put in place do you see any impact of any consequences from that on the on the on the commercial coverage side as well do you see that picking up or what's the sentiment there or what are the trends there.
Speaker Change: Mike How do you currently think about the breadth of test menu at this point in time should we potentially anticipate any new destinations for 2025.
Speaker Change: Well.
Speaker Change: I'll hit it again, Thomas maybe referring to the way I addressed the first time I think it's important to note that our current menu.
Speaker Change: Yes, I think across our menu if you look at our our unit and revenue growth.
Speaker Change: And the market opportunity associated with that would allow us to meet our growth objectives for the foreseeable future.
Speaker Change: As they complement each other we've clearly seen.
Speaker Change: The unit growth.
Speaker Change: And I think our growth rates are speaking to.
Speaker Change: Across our menu for the year in both liquid.
Speaker Change: Fact that we are driving growth through both market conversion.
Speaker Change: And tissue.
Speaker Change: And our pricing is holding or accelerating across our menu. We don't obviously report that test by test.
Speaker Change: And market share.
Speaker Change: Particularly when you look at our tissue based test.
Speaker Change: But our market access managed care teams.
Speaker Change: Has done a really nice job of continuing to drive expansion of coverage across our menu with commercial and private payers.
Speaker Change: Our growth rate has accelerated through Q4, and I think that can only happen when those two factors are working but the most important point is.
Speaker Change: And we expect that to continue so R. R.
Speaker Change: Absent any additional growth opportunities that we would take advantage of.
Speaker Change: <unk> growth as you can see.
Speaker Change: The unit growth drives the day, but we are seeing.
Speaker Change: Our view on our growth being.
Speaker Change: Really solid footing on the on the pricing side, we would expect that to continue yeah, no heroics required on the pricing side to drive.
Speaker Change: Very sustainable.
Speaker Change: As is clear.
Speaker Change: We would look at it the same way I've commented before that we will be opportunistic.
Speaker Change: Our 2025 revenue view.
Speaker Change: I'll refer back to my comment that.
Speaker Change: But were confident that well.
Speaker Change: In my view over the last five years, we had to do two things with our business, we had to Derisk the business and we have to become more obvious I think that we have done the former.
Speaker Change: Operate and execute on both of those.
Okay. That's fair thank you very much.
Thomas: Thank you Thomas.
Speaker Change: And the next question comes from Jason Bednar with Piper Sandler. Please go ahead.
Speaker Change: I think the latter is is taking shape.
Speaker Change: We're confident that.
Speaker Change: I'll reserve any comments on the current market.
Jason Bednar: Hey, good afternoon, guys I'm going to pull in some threads that have already been talked about here, but.
Speaker Change: Evaluation other than to say.
Speaker Change: We are very confident that we focus and execute and deliver results quarter after quarter.
Speaker Change: As we think about the phasing of the performance throughout the year, but then the 'twenty, 22% revenue growth.
Speaker Change: The business begins to fund itself, we like our balance sheet position.
Speaker Change: I think it sounds like the phasing of the year is probably similar to how we've seen past years to play out no unique timing factors or anything.
Speaker Change: Going forwards.
Speaker Change: Paul I'll sulfur itself.
Speaker Change: That's what everybody here on the team as possible.
Speaker Change: Germline helps a bit more in the second half versus first half but I.
Speaker Change: We would update on additional growth opportunities as they present themselves to us and we execute on them but.
Speaker Change: Is there anything you'd call out and sequentially as we think throughout the year and model revenue.
Speaker Change: We are our guidance does not contemplate any.
Speaker Change: Any additional growth opportunities through 2025 for sure.
Speaker Change: Again <unk>.
Speaker Change: Again, any just anything you would call out to make sure. Our models are all in the right spot here getting go into 'twenty five.
Speaker Change: Okay.
Speaker Change: And I also wanted to quickly check in with regards to select a it's been a couple of quarters now since since Medicare reimbursement has been put in place do you see any impact or any consequences on that on the on the commercial coverage side as well do you see that picking up or whats the sentiment there or what are the trends there.
Jason Bednar: Yes, Jason I think.
Jason Bednar: I don't think I would call out anything specific as we go through the year in history with in form.
Jason Bednar:
Jason Bednar: No Q1.
Jason Bednar: In Q3 can always be a little bit of Wildcards with regard to.
Jason Bednar: Payer mix and seasonality, but I would say that.
Speaker Change: Yes, I think across our menu if you look at our unit and revenue growth.
Jason Bednar: We feel really good about.
Jason Bednar: Where we are and the uptake in the sustainable adoption I think that's one of the.
Speaker Change: As they complement each other we've clearly seen.
Speaker Change: The unit growth.
Jason Bednar: The main.
Speaker Change: Across our menu for the year in both liquid.
Jason Bednar: Progress we've made over the last two to three years, where I think quarter by quarter was a little bit more getting a solidified with our customer base I think what we're seeing today and hopefully our results reflected as.
Speaker Change: In tissue.
Speaker Change: And our pricing is holding or accelerating across our menu. We don't obviously report that test by test.
Speaker Change: But our market access managed care team.
Speaker Change: He has done a really nice job of continuing to drive expansion of coverage across our menu with commercial and private payers.
Jason Bednar: As well as our view for it is that.
I don't want to refer to it as compliance to our pathway, but we really.
Speaker Change: And we expect that to continue so are our revenue growth as you can see.
Jason Bednar: The programs, we've put in place with our customer base.
Jason Bednar: Now for really sticky sustainable adoption of our menu and when you think about.
Speaker Change: Unit growth drives the day, but we are seeing.
Speaker Change: Really solid footing on the on.
Jason Bednar: Large urology group practices you know the reason.
Speaker Change: On the pricing side, we would expect that to continue again, no heroics required on the pricing side to drive.
Jason Bednar: I think we've been able to drive.
Jason Bednar: The growth without expanding our sales organization at <unk>.
Speaker Change: Our 2025 revenue view.
Jason Bednar: Only happens if.
Speaker Change: But we're confident that we'll have.
Jason Bednar: The adoption.
Jason Bednar: Is sustainable within a practice in some of these large urology group practices that have.
Speaker Change: Operate and execute on both those fronts.
Speaker Change: Okay. That's fair thank you very much.
Jason Bednar: 510, 15 2025 urologists.
Speaker Change: Thank you Thomas.
Speaker Change: And the next question comes from Jason Bednar with Piper Sandler. Please go ahead.
Jason Bednar: In the practice.
Jason Bednar: That begins to really drive growth.
Jason Bednar: A function of driving adoption within that practice so.
Jason Bednar: Hey, good afternoon guys.
Speaker Change: You can pull on some threads that have already been talked about here.
Jason Bednar: I don't think Theres anything, we don't measure metric or analyze.
Jason Bednar: Got it.
Jason Bednar: As we think about the phasing of the performance throughout the year.
Jason Bednar: And our sales organization and our adoption profiles from our customer.
Jason Bednar: But then the 2022% revenue growth.
Jason Bednar: Customer base, I should say and.
Jason Bednar: I think it sounds like the phasing of the year is probably similar to how we have seen past years to play out no unique timing factors or anything.
Jason Bednar: So we like that the way that looks as 2025 unfolds.
Jason Bednar: We will look forward to reporting our.
Jason Bednar: Germline helps a bit more in the second half versus first half but.
Jason Bednar: Our Q1 results along the way I think your assumption on DRAM that is a fair one.
Jason Bednar: Is there anything you'd call out.
Jason Bednar: I mean, that's that's the point I made it I'm sorry.
Jason Bednar: Sequentially as we think throughout the year and model revenue.
Jason Bednar: So our guidance isn't counting on significant contribution there, but we do expect that.
Jason Bednar: Again <unk>.
Jason Bednar: Well and.
Jason Bednar: Again, any just anything you would call out to make sure. Our models are all in the right spot here getting go in in 'twenty five.
Jason Bednar: But I think back half of the year is it reasonable.
Jason Bednar: Okay, all right perfect and just as a follow up.
Jason Bednar: Yes, Jason I think.
Jason Bednar: Maybe combining a couple here, but yeah.
Jason Bednar: I don't think I would call out anything specific as we go through the year in history with reform.
Jason Bednar: Since we're basically on the cusp of seeing you guys turn.
Speaker Change: No Q1.
Jason Bednar: EBITDA profitable or adjusted EBITDA profitable, what's the next K P. I are mile marker you want the investment community to focus on Mike and then.
Speaker Change: In Q3 can always be a little bit of a wildcard with regard to.
Speaker Change: Our payer mix and seasonality.
Jason Bednar: Yeah for the Opex spend I I heard the comment on not needing any sales any additional sales investments to hit the targets last year.
Speaker Change: I would say that we.
Speaker Change: We feel really good about.
Speaker Change: Where we are in the uptake into sustainable adoption I think that's one of the.
Speaker Change: The main.
Jason Bednar: I didn't.
Speaker Change: Progress we've made over the last two to three years, where I think quarter by quarter was a little bit more getting a solidified with our customer base I think what we're seeing today and hopefully our results reflect it.
Jason Bednar: Willing to make the same comment for 25, if you did I'm sorry, if I missed it.
Jason Bednar: Can you just kind of trying to figure out where what functional areas are consuming incremental opex spend here this year.
Jason Bednar: Yes, Jason I think your.
Speaker Change: As well as our view forward as that.
Jason Bednar: Your assumption is correct.
Speaker Change: I don't want to refer to it as compliance to our pathway, but we really brought to the programs we've put in place with our customer base.
Jason Bednar: Feel like our.
Jason Bednar: Sales channel.
Jason Bednar: Actually I'll be together here next week, it's probably my favorite few days of the year, but we feel very good about.
Speaker Change: Allow for really sticky sustainable adoption of our menu and when you think about <unk>.
Jason Bednar: Our sales organization individually and collectively they will be the group to take us through 25. So we're very confident we can deliver that.
Speaker Change: Large urology group practices the reason I.
Speaker Change: I think we've been able to drive.
Speaker Change: The growth without expanding our sales organization.
Jason Bednar: Far as broadly on the P&L Opex investment.
Speaker Change: That only happens if.
Jason Bednar: Haven't cut our way here.
Speaker Change: The adoption.
Speaker Change: Is sustainable within a practice in some of these large urology group practices that have.
Jason Bednar: And we don't anticipate.
Jason Bednar: Cutting our way going forward, but what I would say is that when you look at our business.
Speaker Change: 510, 15, 2025 urologists in the practice.
Jason Bednar: Based on what we've put in place and the productivity across our organization, but particularly with the sales channel.
Speaker Change: That begins to really drive growth.
Jason Bednar: It really begins to provide a leverage really are our opex spansion.
Speaker Change: A function of driving adoption within that practice so.
Speaker Change: I don't think Theres anything, we don't measure metric or analyze.
Jason Bednar: As largely scale.
Jason Bednar: Through our laboratory and <unk>.
Speaker Change: And our sales organization and our adoption profiles of our customer.
Jason Bednar: RCM group.
So we would expect.
Speaker Change: Customer base I should say.
You know our P&L just to continue to prove for the business to begin to fund itself and that will be.
Speaker Change: So we like that the way that looks as 2025 unfolds.
Jason Bednar: Very prudent with growth opportunities, but again, our mark our current market opportunity and we're very confident.
Speaker Change: We will look forward to reporting our Q1 results along that way I think your assumption on drill that is a fair one.
Jason Bednar: We can build.
Speaker Change: But that's that's the point that many of them.
Jason Bednar: To build a high growth vertical entity.
Speaker Change: So our guidance is and counting.
Speaker Change: Significant contribution there, but we do expect that.
Speaker Change: Alright, and anything on the Kpis you want us to have in mind mic or you want to.
Speaker Change: Okay.
Speaker Change: But I think back half of the year is a reasonable assumption.
Jason Bednar: Hold off on that until you get past this.
Speaker Change: Okay Alright perfect.
Speaker Change: You can get to EBITDA profitability.
Speaker Change: As a follow up.
Speaker Change: I think I will look to follow up with you over the coming quarters I think the only thing I would say is what we feel.
Speaker Change: Maybe combine a couple here but.
Speaker Change: Since we're basically on the cusp of seeing you guys turn.
Speaker Change: Get the question often is there some.
Speaker Change: Something coming some value, creating milestone that we can look to.
Speaker Change: EBITDA profitable or adjusted EBITDA profitable, what's the next Kpis Mile-marker you want the investment community to focus on Mike and then.
So we view positively that we don't have a binary event coming in that.
Speaker Change: We're counting on to drive.
Speaker Change: Yes for the Opex spend.
Speaker Change: I heard the comment on not needing any sales any additional sales investments to hit the targets last year.
You have our ability to.
Speaker Change: Accelerated from a growth perspective and build value.
Speaker Change: Are you willing to make the same comment for 25, if you did sorry, if I missed it.
Speaker Change: It's an asset for the company.
Speaker Change: I think that's that's.
Speaker Change: That's the way we view it.
Speaker Change: And then just kind of trying to figure out where what functional areas are consuming incremental opex spend here this year. Thanks.
Speaker Change: Alright, perfect. Thank you.
Speaker Change: Thank you.
Unidentified Moderator: And the next question comes from Mark Massaro with BTG. Please go ahead.
Jason Bednar: Yes, Jason I think.
Jason Bednar: Your assumption is correct, we feel like our.
Speaker Change: Okay.
Speaker Change: Mike.
Jason Bednar: Sales channel.
Speaker Change: Questions.
Speaker Change: So just one on T P F.
Jason Bednar: Actually I'll be together here next week, it's probably my favorite a few days of the year, but we feel very good about.
Seem to be pretty healthy growth.
Michael McGarrity: From my understanding it's a bit more of a mccarry path.
Jason Bednar: Our sales organization individually and collectively they will be the group to take us through 25. So we're very confident we can deliver that as far as broadly on the P&L Opex investment.
Speaker Change: How should we think about current levels of penetration there.
Michael McGarrity: And any potential default looking at 2025.
Speaker Change: Okay.
Speaker Change: Also before.
Speaker Change: Yeah.
Speaker Change: Well I think when we look at the market opportunity for G. P. S O and I made a comment that were seeing growth.
Jason Bednar: Haven't cut our way here.
Jason Bednar: And we don't anticipate.
Jason Bednar: Cutting our way going forward, but what I would say is that when you look at our business.
Speaker Change: Two ways market conversion.
Speaker Change: And market share and when I speak to market conversion you know when you look at.
Jason Bednar: Based on what we've put in place and the productivity across our organization, but particularly with the sales channel.
Speaker Change: The market.
Speaker Change: Or G.
Speaker Change: GPS type testing and the diagnostic pathway of prostate cancer, it's probably.
Jason Bednar: It really begins to provide a leverage really are our opex expansion.
Jason Bednar: It is largely scale through our laboratory and <unk>.
Speaker Change: Plus or minus 40%.
Speaker Change: And I traded.
Jason Bednar: RCM group.
Speaker Change: And so when I speak to the two levers of growth its market penetration and market share.
Jason Bednar: So we would expect.
Jason Bednar: You know our P&L just to continue to prove the business to begin to fund itself and yes, it will be.
Speaker Change: The market penetration is driving.
Speaker Change: That market penetration up.
Jason Bednar: Very prudent with growth opportunities, but again, our current market opportunity and we're very confident.
Speaker Change: Those tests, which were which were seeing particularly with G. P. S.
Speaker Change: Oh, very low low intermediate risk patient population that we serve.
Jason Bednar: We can build.
Jason Bednar: To build a high growth vertical entity.
Speaker Change: And.
Speaker Change: Alright anything on the Kpis you want us to have in mind mic or you want to.
Speaker Change: But also you know I think our growth rate would suggest that we're also.
Jason Bednar: Hold off on that until you get past this.
Speaker Change: Driving growth on the.
Speaker Change: You can get to EBITDA profitability.
Speaker Change: And then on the share side.
Speaker Change: I think I will look to follow up with you over the coming quarters I think the only thing I would say is what we feel.
Speaker Change: We actually view significant.
Speaker Change: <unk> opportunity for growth and cheap gas in doing that.
Speaker Change: I get the question often is there some.
Speaker Change: As mature or decelerating as we go forward I don't think we could.
Speaker Change: Something coming some value, creating milestone that we can look to.
Speaker Change: Provide a view of 20% or greater growth not only for this year, but our goal is to have that'd be very sustainable without both of those.
Speaker Change: No we view positively that we don't have a binary event coming in that.
Speaker Change: We're counting on to drive.
Speaker Change: Our view of our ability to continue to see.
Speaker Change: Opportunities in front of us to drive.
Speaker Change: Our market conversion.
Speaker Change: <unk> from a growth perspective and build value.
Speaker Change: Sure.
Speaker Change: As an asset for the company.
Speaker Change: Okay very helpful color.
Speaker Change: I think that's that's.
Speaker Change: That's the way we view it.
Speaker Change: And then just one on the I'm.
Okay.
Speaker Change: Alright, perfect. Thank you.
Speaker Change: Hum.
Jason Bednar: Jason Thank you.
Speaker Change: And think about that.
Speaker Change: And the next question comes from Mark Massaro with BTG. Please go ahead.
Speaker Change: 125 mm Rod Thank you Paul.
Speaker Change: Can you just remind us about Samsung.
Jason Bednar: Okay.
Speaker Change: Title.
Speaker Change: Thank you.
Jason Bednar: Questions.
Speaker Change: Yeah, there there's nothing.
Jason Bednar: So just one of them.
Jason Bednar: <unk> GPS that question.
Speaker Change: Between us and flipping adjusted EBITDA positive here in the first half which is.
Jason Bednar: Some pretty healthy growth.
Jason Bednar: From my understanding a bit more of a mature Todd.
Q1 or Q2.
Jason Bednar: Just how should we think about current levels of penetration there.
Speaker Change: And we don't need to.
Speaker Change: To make any changes to the way we're operating investing.
Jason Bednar: Any potential DSL looking at 2025.
Jason Bednar: Okay. Thanks, that's helpful.
Speaker Change: It's continued execution, which.
Jason Bednar: Okay.
Speaker Change: I hope you're getting a sense.
Speaker Change: Well I think when we look at the market opportunity for GPS.
Speaker Change: We have high confidence.
Jason Bednar: Made a comment that were seeing growth.
Speaker Change: Okay, great. Thanks for taking my question.
Jason Bednar: Two ways market conversion.
Speaker Change: Thanks Vivian.
Jason Bednar: And market share and when I speak to market conversion you know when you look at.
Speaker Change: And the next question comes from Dan Brennan with TD Cowen. Please go ahead.
Jason Bednar: The market.
Jason Bednar: For <unk>.
Speaker Change: Hi, Thank you.
Jason Bednar: GBS type testing and the diagnostic pathway of prostate cancer, it's probably.
Speaker Change: My first question is yes.
Jason Bednar: Plus or minus 40%.
Speaker Change: As far as exact sciences, what is baked into your expectations. This year regarding your earn out to exact sciences.
Jason Bednar: And our trade it.
Speaker Change: And then can you provide any update on potential timing of when that first earn out payment comes due this year.
Jason Bednar: And so when I speak to the two levers of growth its market penetration and market share.
Jason Bednar: The market penetration is driving.
Speaker Change: Yes, I'm, sorry, as the standard Kyle I'm sorry.
Jason Bednar: That market penetration up.
Jason Bednar: Those tests, which were which were seeing particularly with GPS.
Speaker Change: Dan.
Speaker Change: Okay.
Speaker Change: Oh, very low low intermediate risk patient population that we serve.
Speaker Change: Hey, there.
Speaker Change: Yeah.
Speaker Change: Exact earn out.
Jason Bednar: And.
Speaker Change: As 'twenty five 'twenty six 'twenty seven payment will likely fall in Q2 each year.
Jason Bednar: But also I think our growth rate would suggest that we're also.
Jason Bednar: Driving growth.
Speaker Change: So we'll continue to update therefore, we're confident that.
Jason Bednar: On the share side, so we actually view significant continued opportunity for growth in GPS and do not view.
Speaker Change: Our setup allows.
Speaker Change: It allows for a meeting between.
Speaker Change: Our debt facility.
Speaker Change: The business the operating cash flow of the business, which commences here this year.
Jason Bednar: Are you at as mature or decelerating as we go forward I don't think we could.
Speaker Change: As we go forward so.
Jason Bednar: <unk> of you are 20% or greater growth not only for this year, but our goal is to have that'd be very sustainable without both of them.
Speaker Change: Obligation.
Speaker Change: An earn out is incorporated into our full view forward as a company.
Jason Bednar: <unk>.
Speaker Change: For our growth.
Jason Bednar: Opportunities in front of us to drive.
Speaker Change: Yeah.
Jason Bednar: Market conversion.
Speaker Change: Thank you.
Jason Bednar: Sure.
Speaker Change: This concludes our question and answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Jason Bednar: Okay very helpful color.
Jason Bednar: Just one on the adjusted EBITDA of the company.
Jason Bednar: Think about that.
Jason Bednar: 125.
Jason Bednar: Thank you Paul.
Jason Bednar: Can you just remind us about that assumption.
Jason Bednar: Sure.
Jason Bednar: Title.
Jason Bednar: Yes, there is nothing.
Jason Bednar: Between us and flipping adjusted EBITDA positive here in the first half which is clear.
Jason Bednar: Clearly Q1 or Q2.
Jason Bednar: And we don't need.
Speaker Change: To make any changes to the way we're operating investing.
Jason Bednar: It's continued execution, which.
Speaker Change: I hope you're getting a sense.
Jason Bednar: We have high confidence.
Speaker Change: Okay, great. Thanks for taking the question.
Vivian: Thanks Vivian.
Speaker Change: And the next question comes from Dan Brennan with Cowen. Please go ahead.
Dan Brennan: Hi, Thank you.
Dan Brennan: My first question is.
Dan Brennan: As far as exact sciences, what is baked into your expectations. This year regarding your earn out to exact sciences.
Dan Brennan: Can you provide any update on potential timing of when that first earn out payment comes due this year.
Speaker Change: Yes, I'm, sorry, as the standard Kyle I'm sorry.
Dan Brennan: Dan.
Dan Brennan: Okay.
Dan Brennan: Hey, there.
Dan Brennan: Yes.
Dan Brennan: Exact earn out.
Dan Brennan: Is 25 26 27 P.
Dan Brennan: Payment will likely fall in Q2 each year.
Dan Brennan: So we'll continue to update therefore, we're confident that.
Dan Brennan: Our setup.
Dan Brennan: It allows for a meeting between.
Dan Brennan: Our debt facility.
Dan Brennan: The business the operating cash flow of the business, which commences here this year.
Dan Brennan: As we go forward so that public.
Dan Brennan: Obligation.
Dan Brennan: An earn out is incorporated into our full view forward as a company.
Dan Brennan: For our growth.
Dan Brennan: Do you know.
Dan Brennan: Thank you.
Dan Brennan: This concludes our question and answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Dan Brennan: Yes.