Q3 2025 Exact Sciences Corp Earnings Call

Speaker #2: Hello, and welcome to the EXACT SCIENCES 3rd QUARTER 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Speaker #2: And if you would like to ask a question, please press *1 on your telephone keypad. I would now like to turn the conference over to Derek Leckow. You may begin.

Speaker #3: Thank you for joining us for Exact Sciences' 3rd Quarter 2025 conference call. Today, November 3rd, 2025. On the call today are Kevin Conroy, the company's Chairman and CEO, and Aaron Bloomer, our Chief Financial Officer.

Speaker #3: Earlier this afternoon, EXACT SCIENCES issued a news release detailing our 3rd QUARTER financial results. This news release and today's presentation are available on our website at EXACT SCIENCES.com.

Speaker #3: During today's call, we will make forward-looking statements based on current expectations. Our actual results may be materially different from such statements. Discussions of non-GAAP figures and reconciliations to GAAP figures are included in our earnings press release, and descriptions of the risks and uncertainties associated with Exact Sciences are included in our SEC filings.

Speaker #3: Both can be accessed through our website. I will now turn the call over to Kevin.

Speaker #4: Thanks, Derek. The EXACT SCIENCES team delivered record results in the 3rd quarter. Thanks to the team's execution, we're raising our full year 2025 revenue and adjusted EBITDA guidance.

Speaker #4: A few highlights from the quarter include growing revenue 20% to $851 million, the highest quarterly growth rate in over two years. This was driven by Cologuard's strong brand awareness, inspiring commercial execution, accelerating health systems integrations, and a record number of ordering providers.

Speaker #4: Screening a quarter of a million more people in the 3rd quarter versus last year, deepening our relationships with payers and health systems by helping close gaps in guideline-recommended cancer screening, and launching cancer guard, our multi-cancer early detection test.

Speaker #4: Our team is focused on continued commercial effectiveness, expanding access to Cologuard Plus, and driving adoption of our new test to close a strong year.

Speaker #4: I will now pass the call to Aaron to discuss our financial results.

Speaker #5: Thanks, Kevin, and good afternoon, everyone. Total revenue grew 20% year over year to $851 million, 43 million above the midpoint of our guidance. Growth was led by screening, which increased 22% year over year to $666 million.

Speaker #5: We saw a broad-based Cologuard growth, led by strong execution from the commercial organization, care gap programs, and rescreens. Precision Oncology revenue increased 12% year over year on a core basis, to $183 million.

Speaker #5: Growth was led by continued Oncotype DX expansion internationally, U.S. Oncotype DX volumes, and partner revenues. We generated $135 million in adjusted EBITDA, an increase of 37 million dollars, or 37% year over year.

Speaker #5: Adjusted EBITDA margins expanded 200 basis points to 16%, driven by continued efficiency efforts across our lab, supply chain, G&A, and support functions. Non-GAAP gross margins were 71%.

Speaker #5: Down 100 basis points versus last year. The reduction was driven by record care gap shipments, which can cause a temporary timing difference between cost of goods and revenue.

Speaker #5: Free cash flow was 190 million during the quarter, an increase of 77 million dollars. This was driven by increased receivables collections following the Cologuard Plus launch and continued working capital improvements.

Speaker #5: Year-to-date free cash flow is $236 million, an increase of 173 million dollars, or 270% year over year. We ended the quarter with cash and securities of just over $1 billion.

Speaker #5: Turning to guidance, we are raising total full-year revenue to between $3.22 billion and $3.235 billion, an increase of $78 million at midpoint.

Speaker #5: This includes screening revenue between $2.51 billion and $2.52 billion, or 20% growth at midpoint. And Precision Oncology revenue between $710 million and $715 million, or 9% growth at midpoint.

Speaker #5: We are raising our adjusted EBITDA guidance to between 470 and 480 million dollars for the full year, or 14.7% adjusted EBITDA margins at midpoint.

Speaker #5: Guidance at midpoint implies more than 47% adjusted EBITDA growth, or about 300 basis points of adjusted EBITDA margin expansion. As stated on our last call, our adjusted EBITDA guidance does not reflect any potential impact from the freenome licensing agreement.

Speaker #5: The upfront payment of $75 million will be expensed to R&D upon clearance of HSR, and it will not be an add-back to adjusted EBITDA.

Speaker #5: Overall, this quarter marks an inflection point in our business. Momentum is building across the company, operating leverage is expanding, and cash generation continues to strengthen.

Speaker #5: We are well positioned to achieve our 2027 financial targets and create long-term value, back to you, Kevin.

Speaker #4: Thanks, Aaron. Strong Cologuard performance was driven by the trust, patience, healthcare providers, and health systems have in the Cologuard brand and our commercial organization.

Speaker #4: The iconic Cologuard brand is recognized by more than 90% of consumers. This brand awareness is driving increased adoption of Cologuard among the 55 million Americans who are not up to date with colorectal cancer screening.

Speaker #4: To have a trusted diagnostics brand, you need to have best-in-class performance. Cologuard Plus raised the bar for non-invasive CRC screening tests, demonstrating 95% sensitivity and 94% specificity.

Speaker #4: This performance leads to a 40% reduction in false positives compared to the original Cologuard. A recent modeling study published in the Journal of the National Cancer Institute showed that Cologuard Plus was the only non-invasive screening option shown to be efficient at guideline-recommended intervals in age ranges.

Speaker #4: We continue to make progress, expanding patient access to Cologuard Plus, including positive coverage decisions from each of the top 10 payers. In the 3rd quarter, we also signed contracts with Aetna and Highmark to bring the added value of Cologuard Plus to their members.

Speaker #4: Backing the Cologuard brand is our patient-centered technology platform, Exact NEXUS. We've spent over a decade building a platform that is deeply integrated within primary care, workflows, our platform connects tens of millions of patient records and integrates access and awareness to accelerate adoption of new tests.

Speaker #4: Broad insurance coverage, deep provider engagement, health system integrations, and proven product quality allow us to deliver innovative diagnostics efficiently and at scale. The power of the Cologuard brand and our Exact NEXUS platform is driving triple-digit growth in a new patient demographic.

Speaker #4: Customer-initiated orders, or CIO. This enables individuals to easily request tests ordered online, via telehealth provider, directly from their phones. Exact NEXUS is eliminating friction points for individuals who know they want to get screened with Cologuard.

Speaker #4: Our commercial engine continues to deliver strong results. The sales team is energized by territory realignments, AI-powered efficiency tools, and new products. Cologuard Plus and CancerGuard.

Speaker #4: The changes we made are working. In the 3rd quarter, we had over 12,000 providers order a Cologuard test for the first time. The greatest number in over five years.

Speaker #4: We also saw the number of active ordering providers climb to over 200,000, a new record. Our commercial team is firing on all cylinders, and they're just getting started.

Speaker #4: All these efforts will have a lasting impact and fuel momentum in Cologuard re-screens. Re-screens represent the growing base of patients that rely on Cologuard every three years to stay up to date on colon cancer screening.

Speaker #4: Today, these patients make up more than a quarter of our total screening volume. In the 3rd quarter, we launched CancerGuard, our multi-cancer early detection test.

Speaker #4: With a blood draw, CancerGuard screens for more than 50 cancer types and subtypes. This launch is a major step forward in our mission to help eradicate cancer through earlier detection.

Speaker #4: Today, only 14% of cancers are found through screening. CancerGuard will help address this problem. We are bringing CancerGuard to patients through many channels to maximize patient adoption, including primary care physicians, health systems, concierge practices, and our CIO platform.

Speaker #4: We are leveraging our large sales force to educate providers about CancerGuard. In the third quarter, we trained the first group of sales reps on CancerGuard.

Speaker #4: We plan to train our entire screening and precision oncology commercial teams in the U.S. by the end of the year. On October 1st, we launched our Consumer-initiated ordering platform that allows people to request a CancerGuard test directly from our website, and builds on the learnings of Cologuard CIO capability.

Speaker #4: Starting in the 4th quarter, we are investing in direct-to-consumer marketing, including social media campaigns to drive awareness of CancerGuard. Drawing on a decade of consumer marketing experience with Cologuard, these efforts leverage our trusted brand with the message that CancerGuard comes from the makers of Cologuard.

Speaker #4: We are excited about the launch and we look forward to sharing more over the next few quarters. Our precision oncology team continues to be a global platform for growth.

Speaker #4: Oncotype DX delivered solid order growth globally in the 3rd quarter. The strong summer was supported by effective commercial execution and the recent expansion in screening guidelines to include younger age groups.

Speaker #4: We are seeing positive momentum across our precision oncology portfolio, including OncoExtra, RiskGuard, and our recently launched MRD test OncoDetect. The OncoDetect launch is progressing well.

Speaker #4: We're seeing encouraging utilization in colorectal cancer and meaningful traction in breast cancer driven by synergies with Oncotype DX. Turning to our pipeline, one of our guiding R&D principles is to invest in areas where we can help patients the most.

Speaker #4: We have broad technological capabilities through our multi-omic platform, including our proprietary PCR and also deep. Next-generation sequencing capabilities. These technologies form the backbone of our novel tests.

Speaker #4: Our platform allows us to advance multiple single cancer screening tests in areas of significant need, such as liver, esophageal, and endometrial cancers. Current screening methods for these cancers are outdated and lack effectiveness.

Speaker #4: Next week at the liver meeting, the flagship international congress hosted by the American Association for the Study of Liver Diseases, we will present Oncoguard liver data from the ALTUS study, A-L-T-U-S.

Speaker #4: This readout underscores the test's potential to transform liver cancer surveillance for at-risk populations. During the 4th quarter, we will share data supporting OncoDetect's use in triple-negative breast cancer.

Speaker #4: In 2026, we also look forward to sharing clinical validation data in launching the next-generation version of OncoDetect. That leverages our Maestro technology. We are investing in MRD evidence generation to support reimbursement and adoption.

Speaker #4: We have over 10 clinical validation studies planned over the next few years, including four key studies in breast cancer, colorectal cancer, and PAN tumor indications.

Speaker #4: I'm very proud of the strong 3rd quarter the EXACT SCIENCES team delivered. Our best-in-class products, trusted brands, patient-centered platform, and commercial execution provide a foundation for long-term growth as we continue to make transformative new tests available to physicians and their patients who need them.

Speaker #4: We're now happy to answer your questions.

Speaker #1: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.

Speaker #1: We ask that you please limit yourself to one question. Thank you. Your first question comes from Vijay Kumar with Evercore ISI. Your line is open.

Speaker #2: Hi, Kevin. Thanks for taking my question, and congrats on a nice spring here. My one question is on just the performance in the Q3.

Speaker #2: Quite remarkable here for screening. Can you talk about what drove the speed? Was this care gap versus free screens versus first-time rescreens? And related to that, I think the streets looking at like 14% screening growth for 2026.

Speaker #2: You guys have done 20% year-to-date. So I'm curious on how any early comments on 2026. Thank you.

Speaker #3: Sure. Thank you, Vijay. And I'll let Aaron take a second part of that. But the first part, let's go back a year ago, when we had a challenging quarter.

Speaker #3: The team really came together. I'm incredibly proud of the work that they did to deepen our relationships with health systems, to design territories allowing us to have total ownership of those territories, making more calls with better targeting, stronger messaging.

Speaker #3: So that you could really bring the Cologuard brand, which is known for its high, strong test performance, sensitivity, and specificity. Through our EXACT NEXUS platform and then also bringing new products.

Speaker #3: So this was a total commitment on the part of leadership and really more so on the part of our frontline sales force: our team members, who are out there every day doing important work.

Speaker #3: And that's both on the screening side and the precision oncology side. So, we could not be more proud of the work that is done, and we think that this sets us up for lasting growth and a flywheel effect so we can get those 50 million Americans who are not up to date with screening screened.

Speaker #2: And And then Vijay, specific to your comment on 2026, I think it's important to keep in mind the long term. Guide that we have sitting out there, which is a 15% compound annual growth rate from 2022 through 2027.

Speaker #2: As you referenced, we're obviously accelerating in growth here through the back half of the year. The full year guide for screening is at 20%.

Speaker #2: The back half of the year is obviously even north of that. And so obviously, we're pacing ahead. Of our long-term goal, but it's important to note our normal practice would be to provide our 2026 guidance at our next earnings call as we review the 4th quarter and look ahead to next year.

Speaker #2: Obviously, as Kevin alluded to, really pleased with the progress on the commercial side, the momentum that we have with care gaps. And then there's a lot of work we have to do in the coming months on Cologuard plus contracting as well.

Speaker #1: The next question comes from Taiko Peterson with Jefferies. Your line is open.

Speaker #4: Hey, thanks. Two hopefully quick ones. Aaron, maybe just on the care gap strength, how should we think about that continuing and then impact on margins going forward?

Hey guys thank you for taking the question. Um Kevin maybe to stay on screening side. Can you just update us the latest on the timeline around 3? You know. I know Z2 is looming um the FDA would love just to update on some of those timelines and then on that same topic just how you're thinking about your internal program. I know you kind of keep it going uh you know maybe just an update on how you're thinking about the 2 combined their appreciate it.

Really, uh, thanks for the question. Uh, really no changes there at all in terms of the uh, free know. And V2 timelines, we expect that data to be presented in conjunction with a um, scientific conference sometime in the next few months, in terms of our internal program, yes, that continues. We haven't given more of an update there.

Other than to say the free gnome test is now the exact tests we're really looking forward to making that available to Physicians and patients through our. Our deep network of providers that we have a relationship with over 200,000 ordering in the last quarter over 250,000 total and our incredible commercial reach. So we're um, excited about bringing our blood test, you know, subject to regulatory approvals to

Uh, clinicians into patients.

Next question.

Taking the question.

I just wanted to hear about kind of the color guard, the colour guard plus, Sunset plan, you know, would imagine, you know, it sounds like you're more aligned with pairs than ever, uh, in pairs would want to have their members on the better test. So just wanted to kind of hear about how you're thinking of pacing. Thank you.

To to report of all covered, uh, colon. So they've issued a positive policy decision that colag guard plus is, um, uh, covered. And now, we're in discussions with 6 of the remaining 10 to contract. So, for our contracted 6, uh, remain and the, there's a, a long list of additional smaller payers that we are focused on as well. And at some point next year, we will sunset colog guard so that colgard plus will be the tests available to all patients. We think that's the right thing to do. It's incredible technology, it's differentiated and it's good for patients.

Sheltie with beard, your line is open.

Hey guys, thanks for the question. Um, maybe just on your overall portfolio. You have some new products now, with Ango Detect now covered by Medicare and Cancer Guard launching. You know, are either of those material contributors in 2025? And how should we think about measurements for success as those ramp in 2026?

Thanks, Katherine. We do have these wonderful new products. As we've said from the beginning of the year, we don't expect them to be material in terms of the overall mix of revenues over time. We expect them to be very material, and those are big markets. They take time to penetrate, and we are pleased with how they are progressing.

Uh cancer guard, of course, just launched within the last couple of months and uh, as a result, that's that's Nation. But we're excited about what we're seeing and the growth that we have seen not only a week over a week, but day over day and we have a big expectations there and with anko detect and I'm sure there will be more questions, more in depth there. But we, we are doing all of the things you need to do in terms of of getting the scientific evidence to secure a broad base of coverage, so that we can go out there and serve patients in this large and growing opportunity. It's uh we're excited about it.

The next question comes from Brandon kouli with Wells. Fargo, your line is open.

Thanks, good afternoon. Um, Aaron, could you give us a sense of what color guard plus, contributed to screening growth in the quarter and where you see that mix exiting the year and Kevin, it'd be great to get an update just on care, Gap, compliance and how that's playing out. And if you've been able to move the needle, a little more, using your compliance engine, maybe relative to to where you were 12 months ago. Thanks,

Hey Brandon, thanks for the questions on the first part as it relates to Color Guard plus. So, what we originally did in the guide for the year was to expect a couple of points in terms of contribution to growth coming from Color Guard plus, pricing, and mix. What we saw in the third quarter, just giving some of the progress we had made and updated everybody on the last call.

With Medicare and 2 of the top 10 pairs. Uh, we were kind of in the 2 to 300 basis, points, range in terms of price impact, uh, on overall screening growth rates with now, having 4 of the top 10 plus Medicare. Uh, we would expect kind of in the 3 to 400 basis points impact on growth in terms of the fourth quarter and you kind of package that all together, those 4 pairs plus Medicare represent, approximately 30% of our volume, which is where we will be exiting, then as we head into 2026 and it's Kevin alluded to earlier, obviously, inactive discussions with their

Remaining top pairs as well.

Thanks, Brandon, in terms of care Gap, compliance. Let me first just remind folks, what care Gap, uh, is care. Gap is what we refer to, um, payers who are approaching us to help them improve their, uh, CRC screening rates within their their membership. And unfortunately, again about half of the population in the US eligible for colon cancer. Screening is not up to date, and payers care about it Health Systems also care deeply about getting more of their member, screening and capacity is limited with geez, uh, having pretty much full capacity across the country.

in terms of total volumes, we're seeing a significant year-over-year increase

As you may know fit programs care gap program. Started about 20 years ago that has been, um, the predominant way to to fill those care gaps,

Many payers, and now health systems, are converting to Cologuard because they see an opportunity to secure a longer duration of somebody being screened and therefore getting three years of credit versus one year of credit. And then also, they have fallen in love with our compliance engine, our ability to engage with patients. But the patients that we get are typically people who have refused screening over and over again. So, I think it's just going to take more work for us to get the uplift. We know we can with care gap compliance.

We're pleased with the volume increase in the people we're getting screened. Over time, we think this can be even more impactful.

From Punic Essay with Lee Rink Partners, your line is open.

Uh, yeah. Hi. Um, guys, thanks for taking my questions. Um, uh, first I just wanted to understand, um, the six commercial pairs that are not in, um, paying for Cologuard under the contracted rate. Uh, when do you think they will be contracted? Uh, if you can provide some timeline on that, and just wondering, Kevin, on, um, CRC blood, how are you thinking about pricing? Um, and if the data was positive for V2, how are you thinking about pricing there? Thank you.

So in, in terms of the Contracting, for col guard, plus, with the remaining top 10, all I can say, Pune, is that we continue to work with those payers eventually, we will sunset Cola guard and move, all payers, uh, really move all patients to the the newer and better tests, we have great relationships with the payers and I, uh, you know, we have high hopes for getting that done sooner rather than later. So we won't be providing timelines there, but it's, we're making strong progress. And then in terms of CRC blood pricing, we haven't decided that yet. Um, our philosophy around

Up um, how we price? Our tests is to secure the broadest access and impact. If you look at the effectiveness of a screening program, it equals the sensitivity of a test times the um access that people have uh for the tests and compliance.

And and those factors are the factors that that impact. Uh, screening in Access is so important. You know, commercial payers are sensitive to price and they look at the performance of a test as part of that mix. So uh, that's been our philosophy, how we end up pricing a blood test is probably going to be within our greater philosophy of bringing value to patients and to payers in the greater uh, Healthcare ecosystem. We think it's 1 of the reasons colgard has been such a, a wonderful success is because of where we priced it relative to colonoscopy,

The next question comes from Jack Meehan with Nephron Research. Your line is open.

Thank you and good afternoon. Um, just had a couple of financial ones wanted to ask. Um first is just more color on the 150 million dollar cost Savings Program. You've talked about in the past just house that progressing and how you think that steps up in the 2026

um, and then last quarter you had um,

The accounts receivable stepped up because of uh the timing of the the call guard plus payments was just wondering if you're fully caught up on that it looked like yes. But uh wanted confirmation. Thank you.

We now expect approximately 85 million.

In terms of 1 time expenses, uh, for this year. So uh, making good progress in the team is executing against that nicely, um, as it pertains to the are. Yes. All of the are from Q2 related to col guard plus. Um, has now been collected on in the third quarter and maybe just take a step back on. Just the progress that the teams have made across exact, uh, to really lean in and, um, deliver record amounts of free cash flow, uh, for the company on a year-to-date basis. You know, we're at 236 million and obviously the strength and the third quarter.

Obviously came from, um, collecting on the color guard plus came claims but also all of the progress that the teams have really, uh, made in terms of working Capital Improvements. So uh, inventory optimization as well as renegotiation, um, of payment terms with suppliers. So, really, really pleased with the progress that the team has made across the company.

The next question comes from Dan Brennan with Cohen, your line is open.

Great. Thanks for the uh thanks for the questions. Congrats on the quarter. Um maybe just 1. I know Aaron in the past, you've typically updated in terms of the contribution uh within the screening guide between the different buckets, whether it's first-time users or

Care Gap or rescreen. You've given some call. I wonder if you can kind of disaggregate that, like how you're thinking about that for the year and maybe for the fourth quarter. And then just any comment on Opex. You know, sales and marketing kind of was below our expectation, while R&D was above. Just wondering kind of moving pieces as we head into the fourth quarter, how we think about the different buckets with Opex. Thank you.

Thanks Dan. So we saw a broad growth, uh, in the third quarter, uh, really across all lines of business, and no matter which way you cut it, uh, 50 plus 45 to 49. Um, rescreens care gaps. CIO all elements of the business was growing, you know, north of double digits. Uh, so really pleased with the progress, all of the commercial improvements that Kevin alluded to earlier. Uh, we're really seeing that flow through, not only in in the leading indicators and the sales rep productivity, but now obviously also, uh, into volumes, I think we talked at length already about care Gap and the record amount of volume, uh, that we're seeing there as well. Um, just in terms of some of the Opex items. Uh, yes. Uh, R&D spend did step up a little bit in Q3 we would expect similar levels of spending in Q4.

More. A lot of that is tied to all of the clinical evidence generation and the work we're doing to continue to improve our EncoDetect test and get additional cancer indications on that into the future.

In terms of sales and marketing. Uh, Kevin talked about that, uh, earlier as well. But we would expect and are investing in our cancer guard launched particularly as it pertains to marketing and you'll probably start to see, um, whether you're watching on YouTube or, or Netflix, or any of the other social channels, you'll start to see some cancer guard ads. Uh, start to take flight here as as soon as this week.

The next question comes from Doug Shankle with wolf research. Your line is open.

Hey, good afternoon guys. Um, just a couple of quick questions. So first on seasonality, um, the fourth quarter has typically been a seasonally weaker quarter due to the holiday season. Obviously, your guidance implies, this is not the case this year. Um, some of that I think is just the assumption that asps are going to increase sequentially. I think the balance of that is care Gap. Um do I have that right? And if so is is that probably the right way to think about your business you know moving forward meaning not just this year.

and then my, my second question is,

On CRC blood, it it may be too early but I'll I'll ask. Anyway, I'm just wondering if you have a good handle on how to manage that launched in a way where there's no Channel conflict. And you know, as we think about the p&l at least in terms of gross profit per test is, is there a way to price that test in a way where you know? There's there's you know we're going to we're going to see you know, the same level of growth growth. Gross profitability. Um, whether it's stool or blood, um, again it's early but just just curious if you guys have given uh, any thought to that that you'd be willing to share. Thank you.

A larger part of our business. And again given the lumpy nature that those programs have.

And for the second part of the question, Doug around CRC blood and our launch of the uh our our CRC blood test, that we licensed from freenome, we will take lessons from the launch of Colo guard and the launch of col guard plus and our unbelievable analytics around.

What patients have refused uh colog guard or even colonoscopy over time so that we can get the right test to the right patient at the right time. And that right tests may be, uh, a blood test for a patient, who is consistently refused colonoscopy or a stool test.

So that's important. It's uh, there are a huge number of people that uh, are in that refuser, uh, camp and getting them tested with a, a test that has lower performance, is, uh, better than no test at all. For sure, we will price that in a way so that, um, you know, we can maintain, uh, margins as, uh, much as possible. But we just don't see a conflict here because we're we'll be out there. Educating Physicians clinicians, Pas, nurses about what, uh, patient population is appropriate for each test. So, we think of this as expansive, the way we think about, uh, this program is expansive to, uh, where we are today with growth. And because of the fact, there are 50 million people, not up to date with screening. There's plenty of room for growth. Um, significant growth with color guard and with our zrc blood test.

William Blair, your line is open.

Hi guys. Good afternoon. Thanks for taking the question. Um, Kevin I think you you made a comment that you're seeing encouraging signals with the with the mrd launch and in particular in the breast uh indication anything more, you can share with respect to how you're sort of thinking about the halo effect that anko type brings to that indication. In particular, uh any any signals or color that you can provide to thanks.

Yeah, thanks Andrew. It's it's been 21 years of of Ana type depth in among oncologist, surgical oncologist Pathologists. They uh they the customer trusts us with that tissue block. They trust us in the breast cancer space. So as you think about the adoption curve, uh, in breast cancer, we think that is a natural starting point for us. Also, our strength in colon cancer is also a natural starting point the studies that we are doing in, um, in breast cancer include what we call the exact DNA 003 tests, which is, uh, or study. That's a study enrolling over, 1800 participants with the, uh, in conjunction, with nsabp. And then, um, also we are enrolling a pan tumor study that has enrolled across 10, different tumor types and

Including uh lung cancer. And so we the evidence is going to mature and as we get breast cancer coverage, we expect to be able to really start to more deeply penetrate that customer base.

And we're excited about the ability to do that. The, um, the other thing that will unlock value is the Maestro technology, which is the whole genome approach for our next version. We expect that to launch in 2026; it will be used to support other indications. It's important to start with breast. Um, the ability to look broadly across these thousands of different mutations while reducing the sequencing depth.

And achieving this ultra low limit of both potentially below 1, 1 part per million at a, at an attractive cost. Point is a differentiator

Traded at the current time. And we think that our commercial organization and reputation among oncologists will be a great starting point.

Comes from Dan Eras with Stifel. Your line is open.

Afternoon guys. Thanks Aaron. Maybe just following up on rescreening. What? What percentage penetration are you assuming that you'll be able to achieve their this year?

I know you were thinking mid-50s as a percent back in the starting at the start of the year, that feels a little light, just giving the strength to your butt. Would love to know. Just, um, you know, what an updated view would be and whether you think that number should move higher next year,

So rescreens continue to kind of be in that mid mid 50s to high 50s. Uh, We've continued to make progress on that throughout the year. Dan, I think, if you take a step back 1 of the things that we're really trying to do is automate the rescreen process and there's a number of different things that we have in flight to be able to do that. Uh, and what we have said, is that over time, we think that we can get that uh, up into the, you know, 70 or 75%. And the reason for that is is because we know that the key to getting people rescreened is getting that prescription and that once we get the prescription and ship the kit to back to that patient, we know that the compliance rate is anywhere from 80 to 95% and so that's what we're

Laser focused on right now. Uh, no no more to update on that. We'll keep you all posted as to what that means. For future Financial guidance.

Yeah, the goal really is to automate the screening process so that people get screened and stay screened throughout the duration of the recommended screening time period. That's important. It's one of the unique things that we can do with Cologuard in the Exact NEXUS platform that we have invested so heavily in over the last decade.

The next question.

Melo with Craig Hallam, your line is open.

Hey guys, thanks a lot.

I wanted to follow up on the tea health comment that you made about consumers for patients being able to order directly. Um, can you just talk a little bit about how that then integrates with a primary care physician? If you have that information or are able to get that information, does that information get channeled back to the PCP? Will the PCP still get quality credit for that patient being screened? Is there any potential conflict there if the test is ordered via you rather than being prescribed by their PCP? How do we think about that?

Well, thanks, Bill. Yes, that's something that we're really sensitive to, as we rolled out. Not only CIO this customer initiated ordering, uh, but also rescreen and Care Gap, programs, and 1 of the beautiful things about the exact Nexus platform and the power, uh, which is powered by epic. Um, is that the MyChart account gets, uh, integrated ultimately. And we're, uh, that, that may take the, the next couple of years to really, uh, bring that to, um, its Maximum Impact that allows patients and Physicians to see any type of test. That is performed anywhere. Ultimately gets back into 1 single electronic medical record

We uh so so that then enables a physician to get full credit for all of the screening regardless of whether they initiated it and allows payers which are on uh the moving to the payer platform that allows them to see that as well. It's a powerful tool.

Us being on Epic 1 of the nodes of Epic really creates the ability for us to do some pretty unique things in terms of managing the health at a population level. This is one of those, um, really positive stories.

The next question comes from Mike, Riskin with Bank of America, your line is open.

Follow up at the same time, um, just want to bridge the the revenue raised to Evita, um, you know, really solid beat obviously a nice raise. But um, even it didn't come up quite as much. Is that the gross margin impact. That's the difference there or maybe some of the incremental R&D Investments you're talking about earlier. I think when, um, Dan Brennan was asking him to hop back, just kind of talk about the the, you know, the lines between GM and Ava, thanks.

There's a lot of questions there, Mike, I'm gonna do my best to, to unpack all of those. So on on the gross margin piece that we saw in the third quarter. Yes, it was. It was exclusively limited to just kind of the, the record demand that we saw, uh, within our care Gap programs. We would actually expect 4 q, gross margins to step up. And if you look at uh kind of where consensus gross margins are in the fourth quarter, um it does imply a step up and and we certainly would expect that as well. And the reason for that is because we don't actually ship as many care Gap programs out in the fourth quarter as we do in the third quarter or the second quarter. And the reason for that is because the the the payers, again really want to try to get patients screened through their PCP, uh, early on, in the year. And then kind of turn to these larger care Gap programs. As you get into the middle part uh, of the year as they want to ensure that they achieve uh, their quality score. And so then

And we would expect an uplift in 4 q as well as then in 1 Q of 2026.

On your question, uh, as it relates to the flow through and and the ebita guide. I think it's an important Point 2 to just kind of take a step back, which is, this is going to be our our second consecutive year with nearly 50% adjusted Eva to growth

You know, margins in the back half of the year are going to be in the 16% to 17% range, and we're well on our way to achieving the long-term goal that we have of 20%.

If you look kind of down the, the p&l line where we're seeing the most amount of Leverage right now continues to be from GNA, we've talked about the the productivity plan, uh, GNA as it stands already, right now, it will be down about 700 basis points on adjusted basis versus where we were 2 years ago. Um but we have said that this year was going to be a year of investment. Um some of on the R&D side Kevin just talked about some of the areas we're investing as it pertains to mrd and the clinical evidence generation that we want to generate uh in that very very large underpenetrated Market.

And then, uh, in the back half of the year, really on sales and marketing expenses, specifically marketing for Cancer Guard. Again, a very, very large market. We don't have to add salespeople to be able to get after that, but we really want to tap into this large market that exists. And we're putting our full back behind that and look forward to sharing updates in the incoming quarters and years on how that launch is progressing.

The next question comes from subu nambi with Guggenheim, your line is open.

Hey guys. Um, a couple of model cleanup questions and then, 1 topic on cancer guard, uh, what were the color code asps? This quarter, will they up quarter over quarter. And did I hear you? Write the color card volumes were grew 250,000 tests year over year that's 1 and um on the topic of cancer God you have an unparalleled PCP commercial infrastructure that said given this is a largely a cash Pay Market at this point. I'm curious how impactful you expect the PCP commercial infrastructure advantage to be.

On your first point, Subu, ASP was up sequentially from Q3 versus Q2, and we would expect them to be up sequentially again in Q4 versus Q3. And yes, we screened more than a quarter of a million people more.

Believe we're seeing that happen already. It is you, you're bringing up a good point. It's not easy to in the US Health System to get people to pay out of pocket for a novel technology but something that's important is a multi-cancer screening tests. We believe We will see uptake here, it will take some time just like Color Guard did we're we're pleased here in the early uh, month or 2, the early days of this launch. And we think that a, a significant Advantage will not only be our Frontline sales reps, but also the relationships that we have with Health Systems, we're trusted because

They trust us with the quality of the tests that we developed and bring to them the ability to electronically order and get resulted for a test, our customer service. They know that they can call us anytime day or night and and get an answer that is needed. So all of this ecosystem, our human capability, our systems capabilities are important. Another part of our company that is important is do you remember back when we acquired genomic Health? 1 of the 3 Things We Said that was important that we loved about genomic Health was their International reach

Color guard has much broader applicability outside the U.S. than even inside the U.S., which is pretty significant in the U.S. and the team. We just got back from our international headquarters, where the team laid out their plans for launching ColorGuard around the world. They’re revving up their teams to be able to deliver this, and we’re excited about that aspect of the platform, the Exact Sciences platform as well.

Next question comes from Mark, mesero with btig. Your line is open.

Hey guys. Uh, congrats on the strong uh 22% growth in screening this quarter. Um but I wanted to ask about the enco detect, mrd test. Um, you know, uh I appreciate the commentary about um, you know, you know, the meaningful lift in breast cancer in the encouraging.

Utilization and CRC. Um, Kevin I'm just curious. Do you think that uh anko detect could become, you know, at least a material contributor to your Precision oncology business in 2026? You know, you did put up double digit or 12% growth in Poteau. I'm just trying to figure out, um, how much of that strong growth this quarter came from anko extra versus anko detect. And any thoughts about 26? Thank you.

Mark, it's too early really to give much color in terms of 2026. And as we said, anko detect is not Material uh to this year's uh Revenue. But over the long call. And we really tried to, uh, it's been core to who we are thinking about the long term when we develop COA Garden, we developed when um, genomic Health developed Anka type. Those were long-term Investments that over time. You're able to win because you do things the right way. And, um, I'm I'm proud that the team is doing things the right way. In terms of gaining, the evidence needed to, then go to the customers, show them that evidence, and convince them that our tests are, is the best test for their patient. And, and so, I, we love what we're seeing so far. And we expect to be able to demonstrate that quantitatively in the future and then just in terms of the, then within the third quarter, uh, and and obviously, we are really pleased with with what the

Poo team delivered in in a third quarter as well double digit growth in our Precision oncology business. Uh that didn't come from from ACO detect, as Kevin said it was it's still early days. Um but it does speak to the strength of Anka type DX and so Anka. Type DX continues to expand and penetrate in international markets and we also saw a nice uptick in volume uh in OCA type DX uh in the us as well.

Next question, comes from Luke sergot with Barkley's, your line is open.

Great, thanks for the questions here. Just a quick cleanup on the, um,

On the Freedom simple screen, the FDA jumped on here a little late. I don't know if you guys gave an update of when you expect.

The FDA to kind of give you any feedback there or any type of feedback you've gotten and the types of updates you guys need to do. Um, and then I guess more long-term, as you think about the launch of.

Screening database, and, you know, for whatever reason or not, whether it's, you know, a failed or, or a cola guard test, or just shipping tests out. Realizing patients, don't want to do that, you know, it

That seems like a pretty low-hanging fruit to me as you kind of launch and think about commercializing this test. Can you use that? Also, as you think about EM said going forward too.

Thanks Luke. Yeah, to that, last question. Yes, the the our relationship with well, with over 30 million patients and, uh, more than 250,000 primary care, physicians and then oncologists and Beyond you have GIS and OBGYNs.

There were a source of trust in terms of

our CRC blood test.

That we plan to bring to clinicians and to patients we have the ability to meet what the nccn and um who else was it? ASG a recommended in terms of the the blood tests are are cooked. They're not as effective as colgard colgard Plus or colonoscopy. They're just not

But you have the right test for the right patient, at the right time. Somebody who doesn't get screened at all for colon cancer. Well, we know who 10 million of those people are because we've sent them a Cologuard kit and they haven't returned it. Now, that's over 11 years, and over time, that base of customers builds. So we're able to work.

Hand and glove with Health Systems to identify patients, who would be appropriate for the for a blood test? If that patient comes into the office, okay? They've tried to get a colonoscopy order. They have tried to get a cold guard test. Now, how about a blood test? We are in a unique position. There to help that patient. Get screened, and nothing is is more important than getting patients screened.

The next question.

Kyle Mixon with canaccord. Your line is open.

Hey guys, thanks for the questions. Congrats on the quarter. So, on the CRC blood partnership, just a couple.

That's on the data.

That's due early next year, is that the V2 data that will ultimately trigger the 100 million dollar opt-in payment upon um, FDA approval or is that, you know, data set related to that payment coming later in the year later in 26. And secondly, it's something that's kind of come up in. Like, my conversations. For example, is, how do you prevent the partner from Gaining access to your accounts in certain scenarios like such as if the provider opts in for the fdm set version and the ownership of

That kind of switches to the partner. Thanks.

So in terms of the free, free gnome V2 data, let's be clear about this. There is a data that is kind of concept data. Uh, and then there is a pivotal study that is uh, that will be underway.

The initial data is the data that will be forthcoming and sometime in the next few months.

The pivotal data is data that would come next year.

and we don't know exactly when that data would come next year, but it's the pivotal data that will be used to submit to the FDA, and that's

Uh, that's the important thing in terms of FDA approval. That will be on the V1 data, which was submitted in August, and it takes about a year. In terms of any confusion about who gets the credit for CRC screening, we have the exclusive right to market the CRC screening test. And Free intends to launch a lung screening test and eventually a multi-cancer screening test. But the CRC blood screening test is ours, exclusively to market.

This concludes the question-and-answer session. I'll turn the call over to Kevin Conroy for closing remarks.

Thank you all for joining today, and to the Exact Sciences dedicated team for their commitment to deliver on our mission of eradicating cancer. Thank you.

This concludes today's conference call, thank you for joining. You may now disconnect

Please wait; the conference will begin shortly.