Q1 2026 Biodesix Inc Earnings Call

May 4, 2026

Speaker #2: All lines have been placed on mute to prevent any background noise. After this speaker's remarks, there will be a question-and-answer session. To ask a question, simply press star 1 on your telephone keypad.

Speaker #2: To withdraw your question, press star 1 again. It is now my pleasure to turn the call over to Chris Brinzey, Investor Relations. You may begin.

Speaker #2: Thank you, operator, and good afternoon, everyone. Today, Biodesix released results from the first quarter of 2026. Leading the call today will be Scott Hutton, Chief Executive Officer.

Chris Brinzey: Thank you, operator, and good afternoon, everyone. Today, Biodesix released results from Q1 2026. Leading the call today will be Scott Hutton, Chief Executive Officer. He is joined by Robin Harper Cowie, Chief Financial Officer. An audio recording of today's call and the press release announcement with the quarterly results can be found in the investor relations section of the company's website at biodesix.com. As today's call includes forward-looking statements, we encourage you to review the statements contained in today's press release and the risks and uncertainties described in our SEC filing, which identify certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in the forward-looking statements made on today's webcast. In addition, we will discuss non-GAAP financial measures on this call.

Christopher Brinzey: Thank you, operator, and good afternoon, everyone. Today, Biodesix released results from Q1 2026. Leading the call today will be Scott Hutton, Chief Executive Officer. He is joined by Robin Harper Cowie, Chief Financial Officer. An audio recording of today's call and the press release announcement with the quarterly results can be found in the investor relations section of the company's website at biodesix.com. As today's call includes forward-looking statements, we encourage you to review the statements contained in today's press release and the risks and uncertainties described in our SEC filing, which identify certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in the forward-looking statements made on today's webcast. In addition, we will discuss non-GAAP financial measures on this call.

Speaker #2: He is joined by Robin Harper Cowie, Chief Financial Officer. An audio recording of today's call and the press release announcement with the quarterly results can be found in the Investor Relations section of the company's website at BIODESIX.com.

Speaker #2: As today's call includes forward-looking statements, we encourage you to review the statements contained in today's press release and the risks and uncertainties described in our SEC filings, which identify certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in the forward-looking statements made on today's webcast.

Speaker #2: In addition, we will discuss non-GAAP financial measures on this call. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release.

Chris Brinzey: Description of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release. I would now like to turn the call over to Scott Hutton, Chief Executive Officer. Scott?

Christopher Brinzey: Description of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release. I would now like to turn the call over to Scott Hutton, Chief Executive Officer. Scott?

Speaker #2: I would now like to turn the call over to Scott Hutton, Chief Executive Officer. Scott?

Speaker #3: Thank you, Chris, and thank you all for joining today. Biodesix delivered an exceptional start to 2026, with first quarter results that demonstrate continued momentum across our commercial, operational, and strategic priorities. Revenue growth accelerated, margins expanded, and we continued to demonstrate operating leverage as we progressed towards profitability.

Scott Hutton: Thank you, Chris, and thank you all for joining today. Biodesix delivered an exceptional start to 2026, with Q1 results that demonstrate continued momentum across our commercial, operational, and strategic priorities. Revenue growth accelerated, margins expanded, and we continued to demonstrate operating leverage as we progress towards profitability. As a reminder, our focus in 2026 centers on 3 objectives: driving top line growth, improving operational efficiency and leverage, and advancing our pipeline to support long-term expansion. In Q1, we made meaningful progress across all 3 objectives. Total revenue for the quarter was $25.6 million, representing 42% growth year over year, accompanied by strong operating discipline and execution. Starting with our diagnostic testing business, revenue grew 37%, driven by accelerating test volume growth and improved ASPs over Q1 of 2025.

Speaker #3: As a reminder, our focus in 2026 centers on three objectives: driving top-line growth, improving operational efficiency and leverage, and advancing our pipeline to support long-term expansion.

Speaker #3: In the first quarter, we made meaningful progress across all three objectives. Total revenue for the quarter was $25.6 million, representing 42% growth year over year, accompanied by strong operating discipline and execution.

Speaker #3: Starting with our diagnostic testing business, revenue grew 37%, driven by accelerating test volume growth and improved ASPs over the first quarter of 2025. Total test volumes grew 29% year over year, due to increased adoption from both pulmonology and primary care.

Scott Hutton: Total test volumes grew 29% year over year due to increased adoption from both pulmonology and primary care, with test volumes from primary care now representing 15% of total tests delivered in the quarter. In support of both healthcare provider and payer adoption, we continue to present and publish clinical data for our on-market test. Specifically, Nodify Lung Testing, which is used by pulmonologists and primary care providers to triage patients by risk of lung cancer, helping determine who needs intervention versus surveillance and allowing higher-risk patients to be prioritized for prompt follow-up. In February, we announced the publication of the largest lung nodule biomarker clinical validation study that included over 1,100 patients, leveraging our ongoing real-world evidence study, CLARIFY.

Speaker #3: With test volumes from primary care now representing 15% of total tests delivered in the quarter, in support of both healthcare provider and payer adoption, we continue to present and publish clinical data for our on-market test.

Speaker #3: Specifically, notify lung testing, which is used by pulmonologists and primary care providers, to triage patients by risk of lung cancer. Helping determine who needs intervention, versus surveillance.

Speaker #3: And allowing higher-risk patients to be prioritized for prompt follow-up. In February, we announced the publication of the largest lung nodule biomarker clinical validation study, that included over 1,100 patients, leveraging our ongoing real-world evidence study, Clarify.

Speaker #3: The study demonstrated consistently strong notify CDT test performance, with high specificity, or low false positive rates. Regardless of nodule size or other patient risk factors.

Scott Hutton: The study demonstrated consistently strong Nodify CDT test performance with high specificity or low false-positive rates regardless of nodule size or other patient risk factors. Recent data on patients without biomarker testing reported that 40% of malignant nodules had progressed in tumor size between the time of the first detection and the time of initiation of definitive treatment, underscoring the urgent clinical need for tests like Nodify Lung to expedite diagnosis and enable earlier intervention when outcomes are most favorable for the patient. Turning to development services, revenue in the quarter nearly doubled year-over-year. This reflects execution on contracted programs as well as continued success securing new agreements, reinforcing the strength and differentiation of our development platform. The depth and breadth of our offering was recently highlighted with several presentations at AACR in April.

Speaker #3: Recent data on patients without biomarker testing reported that 40% of malignant nodules had progressed in tumor size between the time of the first detection and the time of initiation of definitive treatment.

Speaker #3: Underscoring the urgent clinical need for tests like Notify Lung to expedite diagnosis and enable earlier intervention, when outcomes are most favorable for the patient.

Speaker #3: Turning to development services, revenue in the quarter nearly doubled year over year. This reflects execution on contracted programs, as well as continued success securing new agreements.

Speaker #3: Reinforcing the strength and differentiation of our development platform. The depth and breadth of our offering was recently highlighted with several presentations at AACR in April.

Speaker #3: It is especially exciting to see our multi-omic technologies, combined with advanced data informatics, translating into meaningful clinical impact on our pipeline product concepts and fueling strong interest in our development services offering.

Scott Hutton: It is especially exciting to see our multi-omic technologies combined with advanced data informatics translating into meaningful clinical impact on our pipeline product concepts and fueling strong interest in our development services offering. Additional data on our pipeline products, including our genomic and proteomic MRD and ROR test, the VeriStrat test clinical utility in prostate cancer, and our new AI-based digital diagnostic test will be shared at upcoming conferences and events throughout the course of the year. Gross margin for the quarter was 84% on a GAAP basis and 82% excluding a one-time sales and use tax recovery, representing a 300 basis point improvement year over year. Margin expansion continues to be driven by scale and diagnostic testing, improved pricing realization, and ongoing workflow optimization in the laboratory, resulting in decreasing cost per test.

Speaker #3: Additional data on our pipeline products, including our genomic and proteomic MRD and ROR tests, the VeriStrat test clinical utility and prostate cancer, and our new AI-based digital diagnostic test, will be shared at upcoming conferences and events throughout the course of the year.

Speaker #3: Gross margin for the quarter was 84% on a GAAP basis and 82% excluding a one-time sales and use tax recovery. Representing a 300 basis point improvement year over year.

Speaker #3: Margin expansion continues to be driven by scale and diagnostic testing, improved pricing realization, and ongoing workflow optimization in the laboratory, resulting in decreasing cost per test.

Speaker #3: We are encouraged by the consistency of these trends and strong revenue growth and operating leverage. And believe they reinforce the scalability of our model.

Scott Hutton: We are encouraged by the consistency of these trends in strong revenue growth and operating leverage and believe they reinforce the scalability of our model. As a result of the performance across both diagnostic testing and development services in Q1 and our continued progress towards profitability, we are raising our full year 2026 revenue outlook. With that, let me turn it over to Robin to review our financial performance. Robin?

Speaker #3: As a result of the performance across both diagnostic testing and development services in Q1, and our continued progress towards profitability, we are raising our full year 2026 revenue outlook.

Speaker #3: With that, let me turn it over to Robin to review our financial performance. Robin?

Speaker #2: Thanks, Scott, and good afternoon, everyone. Total revenue for the first quarter was $25.6 million, representing a 42% increase over the prior year period. Diagnostic testing revenue was $22.3 million, an increase of 37% year over year.

Robin Harper Cowie: Thanks, Scott, good afternoon, everyone. Total revenue for Q1 was USD 25.6 million, representing a 42% increase over the prior year period. Diagnostic testing revenue was USD 22.3 million, an increase of 37% year-over-year. The increase in lung diagnostics revenue was driven by growth in test volumes and higher average revenue per test. Test volumes were approximately 17,800, an increase of 29% year-over-year, supported by an average of 100 sales representatives in the field in Q1. We expect to continue our commercial expansion as described in prior calls at a cadence of about 6 representatives per quarter through 2026.

Robin Cowie: Thanks, Scott, good afternoon, everyone. Total revenue for Q1 was USD 25.6 million, representing a 42% increase over the prior year period. Diagnostic testing revenue was USD 22.3 million, an increase of 37% year-over-year. The increase in lung diagnostics revenue was driven by growth in test volumes and higher average revenue per test. Test volumes were approximately 17,800, an increase of 29% year-over-year, supported by an average of 100 sales representatives in the field in Q1. We expect to continue our commercial expansion as described in prior calls at a cadence of about 6 representatives per quarter through 2026.

Speaker #2: The increase in lung diagnostics revenue was driven by growth in test volumes and high average revenue per test. Test volumes were approximately 17,800, an increase of 29% year over year, supported by an average of 100 sales representatives in the field in the quarter, and we expect to continue our commercial expansion as described in prior calls at a cadence of about six representatives per quarter through 2026.

Speaker #2: Improvements in average revenue per test over the prior year were primarily driven by additional payer coverage and improvements to revenue cycle management, continuing the trend that began in the third quarter of 2025.

Robin Harper Cowie: Improvements in average revenue per test over the prior year were primarily driven by additional payer coverage and improvements to revenue cycle management, continuing the trend that began in Q3 2025. We believe recent improvements in average revenue per test reflect durable changes in payer coverage and revenue cycle execution rather than discrete or one-time effects. Development services revenue for Q1 was $3.3 million, an increase of 99% year-over-year, driven by delivery against our contracted programs and the addition of new development services agreements. We finished the quarter with approximately $10.4 million in contracted business following accelerated revenue conversion velocity in the quarter. We continue to see strong demand and visibility across our development services pipeline and do not expect the timing of these completions to impact our full year expectations.

Robin Cowie: Improvements in average revenue per test over the prior year were primarily driven by additional payer coverage and improvements to revenue cycle management, continuing the trend that began in Q3 2025. We believe recent improvements in average revenue per test reflect durable changes in payer coverage and revenue cycle execution rather than discrete or one-time effects. Development services revenue for Q1 was $3.3 million, an increase of 99% year-over-year, driven by delivery against our contracted programs and the addition of new development services agreements. We finished the quarter with approximately $10.4 million in contracted business following accelerated revenue conversion velocity in the quarter. We continue to see strong demand and visibility across our development services pipeline and do not expect the timing of these completions to impact our full year expectations.

Speaker #2: We believe recent improvements in average revenue per test reflect durable changes in payer coverage and revenue cycle execution, rather than discrete or one-time effects.

Speaker #2: Development services revenue for the first quarter was $3.3 million, an increase of 99% year over year, driven by delivery against our contracted program and the addition of new development services agreements.

Speaker #2: We finished the quarter with approximately $10.4 million in contracted business, following accelerated revenue conversion velocity in the quarter. We continue to see strong demand and visibility across our development services pipeline and do not expect the timing of these completions to impact our full-year expectations.

Speaker #2: Gross margin for the first quarter was 84%, which included a one-time recovery of $0.4 million related to previously paid sales and use taxes. Excluding the one-time recovery, gross margins were 82%, representing a 300 basis point improvement over the prior year period.

Robin Harper Cowie: Gross margin for Q1 was 84%, which included a one-time recovery of $0.4 million related to previously paid sales and use taxes. Excluding the one-time recovery, gross margins were 82%, representing a 300 basis point improvement over the prior year period. Year over year margin expansion was driven by growth in lung diagnostic testing, improvements in average revenue per test, and decrease in average cost per test. Gross margins continue to reflect Biodesix's strong operational efficiency and execution. Operating expenses, excluding direct costs and expenses, were $27.6 million, an increase of 18% year over year, supporting the 42% revenue growth delivered during the quarter. The increase in operating expenses is driven by a 19% increase in sales, marketing, and general administrative expenses due to our planned commercial organization expansion.

Robin Cowie: Gross margin for Q1 was 84%, which included a one-time recovery of $0.4 million related to previously paid sales and use taxes. Excluding the one-time recovery, gross margins were 82%, representing a 300 basis point improvement over the prior year period. Year over year margin expansion was driven by growth in lung diagnostic testing, improvements in average revenue per test, and decrease in average cost per test. Gross margins continue to reflect Biodesix's strong operational efficiency and execution. Operating expenses, excluding direct costs and expenses, were $27.6 million, an increase of 18% year over year, supporting the 42% revenue growth delivered during the quarter. The increase in operating expenses is driven by a 19% increase in sales, marketing, and general administrative expenses due to our planned commercial organization expansion.

Speaker #2: Year over year margin expansion was driven by growth in lung diagnostic testing, improvements in average revenue per test, and decrease in average cost per test.

Speaker #2: Gross margins continue to reflect file desic's strong operational efficiency and execution. Operating expenses excluding direct costs and expenses were $27.6 million, an increase of 18% year over year, supporting the 42% revenue growth delivered during the quarter.

Speaker #2: The increase in operating expenses is driven by a 19% increase in sales, marketing, and general administrative expenses due to our planned commercial organization expansion.

Speaker #2: The company expects continued operating leverage as our expanded sales team advances along the productivity curve and converts growing experience into sustained performance. R&D expense for the quarter was $3.3 million, representing a 14% increase over the prior year period.

Robin Harper Cowie: The company expects continued operating leverage as our expanded sales team advances along the productivity curve and converts growing experience into sustained performance. R&D expense for the quarter was $3.3 million, representing a 14% increase over the prior year period. R&D investment reflects continued clinical studies supporting adoption of our lung diagnostic tests and progress across our pipeline. Net loss for the quarter was $7.8 million, a 30% improvement compared to the prior year period. Adjusted EBITDA, which excludes non-cash and other one-time items, was a loss of $4.1 million, representing a 35% improvement over Q1 2025. We also strengthened our balance sheet, ending the quarter with $25.6 million in unrestricted cash and cash equivalents, a 35% increase compared to Q4, providing solid runway to support our growth initiatives.

Robin Cowie: The company expects continued operating leverage as our expanded sales team advances along the productivity curve and converts growing experience into sustained performance. R&D expense for the quarter was $3.3 million, representing a 14% increase over the prior year period. R&D investment reflects continued clinical studies supporting adoption of our lung diagnostic tests and progress across our pipeline. Net loss for the quarter was $7.8 million, a 30% improvement compared to the prior year period. Adjusted EBITDA, which excludes non-cash and other one-time items, was a loss of $4.1 million, representing a 35% improvement over Q1 2025. We also strengthened our balance sheet, ending the quarter with $25.6 million in unrestricted cash and cash equivalents, a 35% increase compared to Q4, providing solid runway to support our growth initiatives.

Speaker #2: R&D investment reflects continued clinical studies supporting adoption of our lung diagnostic tests and progress across our pipeline. Net loss for the quarter was $7.8 million, a 30% improvement compared to the prior year period.

Speaker #2: Adjusted EBITDA, which excludes non-cash and other one-time items, was a loss of $4.1 million, representing a 35% improvement over the first quarter of 2025.

Speaker #2: We also strengthened our balance sheet, ending the quarter with $25.6 million in unrestricted cash and cash equivalents, a 35% increase compared to the fourth quarter, providing a solid runway to support our growth initiatives.

Speaker #2: The change in cash balance includes $15.8 million of at-the-market net proceeds, raised during the quarter, partially offset by planned cash outflows that occur annually during the first quarter.

Robin Harper Cowie: The change in cash balance includes $15.8 million of at-the-market net proceeds raised during the quarter, partially offset by planned cash outflows that occur annually during Q1. Looking ahead to the remainder of 2026, in addition to our planned headcount expansion, we expect sales productivity to continue to improve as our various sales cohorts gain experience and tenure, which remains a key driver of operating leverage through 2026. Following the strong Q1 performance and improved visibility into demand and execution, we are raising our full year revenue guidance to $108 to 114 million. The increased midpoint re-represents 25% growth over 2025, which reflects the strength of Q1 while remaining consistent with our full year planning assumptions.

Robin Cowie: The change in cash balance includes $15.8 million of at-the-market net proceeds raised during the quarter, partially offset by planned cash outflows that occur annually during Q1. Looking ahead to the remainder of 2026, in addition to our planned headcount expansion, we expect sales productivity to continue to improve as our various sales cohorts gain experience and tenure, which remains a key driver of operating leverage through 2026. Following the strong Q1 performance and improved visibility into demand and execution, we are raising our full year revenue guidance to $108 to 114 million. The increased midpoint re-represents 25% growth over 2025, which reflects the strength of Q1 while remaining consistent with our full year planning assumptions.

Speaker #2: Looking ahead to the remainder of 2026, and in addition to our planned headcount expansion, we expect sales productivity to continue to improve as our various sales cohorts gain experience and tenure, which remains a key driver of operating leverage through 2026.

Speaker #2: Following the strong first quarter performance and improved visibility into demand and execution, we are raising our full-year revenue guidance to $108 to $114 million.

Speaker #2: The increased midpoint represents 25% growth over 2025, which reflects the strength of the first quarter while remaining consistent with our full-year planning assumptions. We also expect continued progress towards sustained adjusted EBITDA profitability driven by increasing sales productivity, expanded clinical evidence supporting the notify lung test, growth in the development services pipeline, and demonstrated operating leverage.

Robin Harper Cowie: We also expect continued progress towards sustained Adjusted EBITDA profitability driven by increasing sales productivity, expanded clinical evidence supporting the Nodify Lung test, growth in the development services pipeline, and demonstrated operating leverage. With that, I'll turn it back to Scott for some closing thoughts before we begin the Q&A.

Robin Cowie: We also expect continued progress towards sustained Adjusted EBITDA profitability driven by increasing sales productivity, expanded clinical evidence supporting the Nodify Lung test, growth in the development services pipeline, and demonstrated operating leverage. With that, I'll turn it back to Scott for some closing thoughts before we begin the Q&A.

Speaker #2: With that, I'll turn it back to Scott for some closing thoughts before we begin the Q&A.

Speaker #3: Thank you, Robin. In April, BIODESIX was recognized as a top workplace for the third consecutive year. This recognition reflects who we are at our core.

Scott Hutton: Thank you, Robyn. In April, Biodesix was recognized as a top workplace for the third consecutive year.

Scott Hutton: Thank you, Robin. In April, Biodesix was recognized as a top workplace for the third consecutive year.

Scott Hutton: This recognition reflects who we are at our core, a team built on trust, collaboration, growth, and shared ownership of results. Our culture here at Biodesix is not aspirational, it is operational. Our Q1 performance reflects that discipline and reinforces our confidence in the scalability and durability of our business model. We continue to see significant opportunities ahead as adoption expands, clinical evidence grows, and our commercial organization continues to mature. We remain focused on executing with discipline, improving capital efficiency, and delivering meaningful value to patients, providers, partners, and shareholders. In closing, I want to thank the entire Biodesix team for their continued focus, discipline, and commitment to our mission and culture. Let's now move to questions. Operator, let's start the Q&A session.

Speaker #3: A team built on trust, collaboration, growth, and shared ownership of results. Our culture here at BIODESIX is not aspirational. It is operational. Our first quarter performance reflects that discipline and reinforces our confidence in the scalability and durability of our business model.

Speaker #3: We continue to see significant opportunities ahead as adoption expands, clinical evidence grows, and our commercial organization continues to mature. We remain focused on executing with discipline, improving capital efficiency, and delivering meaningful value to patients, providers, partners, and shareholders.

Speaker #3: In closing, I want to thank the entire Biodesix team for their continued focus, discipline, and commitment to our mission and culture. Let's now move to questions.

Speaker #3: Operator, let's start the Q&A session.

Operator: At this time, I would like to remind everyone, in order to ask a question, simply press star one on your telephone keypad. Our first question is from the line of Andrew Brackmann with William Blair. Please go ahead.

Speaker #4: At this time, I would like to remind everyone: in order to ask a question, simply press *1 on your telephone keypad. And our first question is from the line of Andrew Brackman with William Blair.

Speaker #4: Please go ahead.

Speaker #5: Hi, Scott. Hi, Robin. Good afternoon. Thanks for taking the questions. I wanted to focus on the commercial team. I think you called out about 15% of volumes were coming from the primary care channel there.

Andrew Brackmann: Scott and Robin, good afternoon. Thanks for taking the questions. I wanted to focus on the commercial team. I think you called out about 15% of volumes were coming from the primary care channel there. Clearly something's working. I guess as you sort about, you know, some of the learnings or successes in some territories that are driving a lot of that volume growth, how transferable are those to other territories? I guess where are we in the process of amplifying these learnings just sort of across the entire sales force? Thanks.

Speaker #5: So clearly, something's working. So I guess, as you sort of think about some of the learnings or successes in some territories that are driving a lot of that volume growth, how transferable are those to other territories?

Speaker #5: And I guess, where are we in the process of amplifying these learnings, just sort of across the entire Salesforce? Thanks.

Speaker #6: Yeah, thanks, Andrew. Great question. It's been about three quarters since we brought on that first sales cohort focused on primary care physicians. So you nailed it.

Scott Hutton: Yeah. Thanks, Andrew. Great question. It's been about three quarters since we brought on that first sales cohort, focused on Primary Care Physicians. You know, you nailed it. We continue to learn, but we had some immediate learnings that we've been able to apply. We had our national sales meeting at the end of February, which is a great opportunity for us to share best practices and to roll that out. You know, what we've learned is still that starting with the pulmonologist, building a really strong relationship, allowing them to help us with introductions into their referral network really aids in a smooth transition. It allows the pulmonologist to track those patients through that referral process. We're continuing to see that growth across the United States.

Speaker #6: We continue to learn, but we had some immediate learnings that we've been able to apply. We had our national sales meeting at the end of February, which is a great opportunity for us to share best practices and to roll that out.

Speaker #6: What we've learned is still that starting with the pulmonologist building a really strong relationship, allowing them to help us with introductions into their referral network, really aids in a smooth transition.

Speaker #6: It allows the pulmonologist to track those patients through that referral process. And we're continuing to see that growth across the United States. We really started more in the Northeast when we first had our initial hires, and we're seeing that transition and progress more westward.

Scott Hutton: We really started more in the Northeast, when we first had our initial hires, and we're seeing that transition and progress more westward. It has been transferable. You know, we feel good about the progress we've made, and I think you know, we knew with a high level of confidence based upon our early pilot experience, that this was the right decision. We think this confirms that we've made the right decision. We've still got a lot of opportunity to grow. I'll just remind everybody, what it really did was opened up the addressable market that was serviceable to us. We knew that about 49% of those patients with incidentally found nodules are stuck in primary care. We think that we've begun tapping into that.

Speaker #6: And so it has been transferable. We feel good about the progress we've made. And I think we knew with a high level of confidence based upon our early pilot experience that this was the right decision.

Speaker #6: And so we think this confirms that we've made the right decision. We've still got a lot of opportunity to grow, and I'll just remind everybody what it really did was opened up the addressable market that was serviceable to us.

Speaker #6: And so we knew that about 49% of those patients with incidentally found nodules are stuck in primary care. So we think that we've begun tapping into that.

Speaker #6: And we're really confident that over time, what it'll start to show is that we're getting to patients earlier. And we know in this scenario, earlier detection and diagnosis is going to lead to better outcomes.

Scott Hutton: We're really confident that over time, what it'll start to show is that we're getting to patients earlier. We know in this scenario, earlier detection and diagnosis is gonna lead to better outcomes.

Speaker #3: Perfect. I appreciate all that color. And then just on the evidence front, Scott, you caught out the publication of the validation study in February.

Andrew Brackmann: Perfect. Appreciate all that color. Just on the evidence front, Scott, you called out the publication of the validation study in February. Can you maybe just sort of talk about what that publication, what impact it's had on the field? I think in particular, you sort of mentioned across that study, there's low false positives regardless of the nodule size. Are you seeing an increase in the use of Nodify in the smaller nodules? I guess how big of an opportunity is that for you in the grand scheme? Thanks.

Speaker #3: Can you maybe just sort of talk about what that publication—what impact it's had on the field? And I think, in particular, you sort of mentioned across that study, there's low false positives regardless of the nodule size.

Speaker #3: Are you seeing an increase in the use of Nodify in those smaller nodules? And I guess, how big of an opportunity is that for you in the grand scheme?

Speaker #3: Thanks.

Speaker #6: Yeah, for us, it really is about data development. I think there's a continued opportunity for us to educate and empower pulmonologists and primary care physicians to utilize notify testing.

Scott Hutton: Yeah. You know, for us it really is about data development. I think there's a continued opportunity for us to educate and empower pulmonologists and primary care physicians to utilize Nodify testing. The more we can publish and present, it gives us opportunities to put new data out in front of healthcare professionals. That's what this did. You nailed it. We know that not only do physicians wanna get to these patients earlier, but they wanna be bolder than they've been in the past. Something has to change because we haven't seen a significant change in screen detection over the last 10 to 15 years.

Speaker #6: So the more we can publish and present and give us opportunities to put new data out in front of healthcare professionals, and that's what this did.

Speaker #6: You nailed it. We know that not only do physicians want to get to these patients earlier, but they want to be bolder than they've been in the past.

Speaker #6: Something has to change because we haven't seen a significant change in screen detection over the last 10 to 15 years. And so we are seeing an increase in smaller nodules.

Scott Hutton: We are seeing an increase in smaller nodules, but that goes hand in hand with the advent of robotic bronchoscopies, where these interventional pulmonologists feel more confident that they can get to some of the smaller nodules that they wouldn't have been able to get to, easily and successfully in the past. We thought the time was right. We're excited to get that data out. I would add that, you know, additionally, whenever we see strong performance in a real world environment, it really starts to show that these tests are durable, that our growth is sustainable, and that we're gonna continue to have a significant impact with the healthcare professionals that we serve.

Speaker #6: But that goes hand in hand with the advent of robotic bronchoscopies. Where these interventional pulmonologists feel more confident that they can get to some of the smaller nodules that they wouldn't have been able to get to easily.

Speaker #6: And successfully in the past, and so we thought the time was right. We're excited to get that data out. And I would add that additionally, whenever we see strong performance in a real-world environment, it really starts to show that these tests are durable, that our growth is sustainable, and that we're going to continue to have a significant impact with the healthcare professionals that we serve.

Speaker #3: Great. I'll keep it at two. Thanks, guys.

Andrew Brackmann: Great. I'll keep it to two. Thanks, guys.

Speaker #6: Thanks, Andrew.

Scott Hutton: Thanks, Andrew.

Speaker #4: Our next question comes from the line of Thomas Flaten with Lake Street. Please go ahead.

Operator: Our next question comes from the line of Thomas Flaten with Lake Street. Please go ahead.

Speaker #3: Hey, Scott and Robin. Just a question to follow up on the PCPs. I'm just curious what you're hearing anecdotally from the PCPs— their level of comfort at retaining these patients with this test result in hand.

Thomas Flaten: Hey, Scott and Robin. Just a question to follow up on the PCPs. I'm just curious what you're hearing anecdotally from the PCPs, their level of comfort at retaining these patients with this test result in hand. Do they feel comfortable with the referral networks? I get that having it come from the pulmonologist is probably helpful. Anything you can share on their experience that they've had. I know it's only been 3 quarters, but I'm just curious if there's anything you can share.

Speaker #3: Do they feel comfortable with the referral networks? I get that having it come from the pulmonologist is probably helpful, but anything you can share on their experience that they've had?

Speaker #3: I know it's only been three quarters, but I'm just curious if there's anything you can share.

Speaker #6: Yeah, thanks, Thomas. It's a great question. Speaking on behalf of that those healthcare professionals and the primary care setting, one of the things that we anticipated and we've confirmed is they've gotten an abundance of patients that are eligible for notify testing.

Scott Hutton: Yeah. Thanks, Thomas Flaten. It's a great question. You know, speaking on behalf of those healthcare professionals in the primary care setting. You know, one of the things that we anticipated and we've confirmed is they've got an abundance of patients that are eligible for Nodify testing. They still have questions as to how to take those and interpret those test results and defining who they refer on versus who they keep to monitor or surveil. What we've seen is through our brochures and materials, sharing of publications and data, they've become very comfortable with how those test results can better inform what they do with those patients, building that confidence. You know, one of the things we have seen in primary care is they're very comfortable with diagnostic testing. It's what they do. They understand it.

Speaker #6: They still have questions as to how to take those and interpret those test results and defining who they refer on versus who they keep to monitor or surveil.

Speaker #6: And so what we've seen is, through our brochures and materials, sharing of publications and data, they become very comfortable with how those test results can better inform what they do with those patients.

Speaker #6: Building that confidence. One of the things we have seen in primary care is they're very comfortable with diagnostic testing. It's what they do. They understand it.

Speaker #6: They have phlebotomy services on site, and so from a workflow, kind of implementation, we've actually found primary care to be really accessible and receptive of Notify testing.

Scott Hutton: They have phlebotomy services on site. From a workflow kind of implementation, we've actually found Primary Care to be really accessible and, you know, receptive of Nodify testing. You know, we're excited to continue to help educate them. One of the things that we really focus on is ensuring that when those patients are referred on, that they stay in contact with that pulmonologist, right? That Primary Care Physician will always be that patient's Primary Care Physician. They over time will gain additional confidence as they see what ends up happening for those patients. Hopefully we're able to see a state shift and we're starting to see patients live longer, which will build even more confidence within the Primary Care community.

Speaker #6: So we're excited to continue to help educate them. One of the things that we really focus on is ensuring that when those patients are referred on, they stay in contact with that pulmonologist.

Speaker #6: That primary care physician will always be that patient's primary care physician. So they over time will gain additional confidence as they see what ends up happening for those patients.

Speaker #6: And hopefully, we're able to see a state shift and we're starting to see patients live longer, which will build even more confidence within the primary care community.

Speaker #3: And then just sticking with this theme, you called out in a prior response that what are the PCPs going to do with the incidentally identified nodules, but you didn't mention the screening nodules.

Thomas Flaten: Then just sticking with this theme, you called out in a prior response that, you know, what are the PCPs gonna do with the incidentally identified nodules, but you didn't mention the screening nodules. I'm curious what you're hearing from the PCPs in not necessarily that having a bit access to your test is gonna help them get more patients in the screening, but if they've shared anything anecdotal about pushing the high-risk patients into the screening programs, and by that I mean low-dose CT, and maybe more broadly, if you've seen any change in the trends there in number of patients getting pushed into that screening protocol.

Speaker #3: I'm curious what you're hearing from the PCPs in not necessarily that having access to your test is going to help them get more patients in the screening, but if they've shared anything anecdotal about pushing the high-risk patients into the screening programs and by that, I mean low-dose CT and maybe more broadly, if you've seen any change in the trends there in number of patients getting pushed into that screening protocol.

Speaker #6: Yeah, it's been one of the challenges, regardless of whether you talk to pulmonology or primary care physicians. Ten years ago, lung cancer screening compliance for those screen-eligible patients was in the low to mid single digits.

Scott Hutton: Yeah. It, you know, it's been one of the challenges regardless of whether you talk to pulmonology or Primary Care Physicians. You know, 10 years ago, lung cancer screening compliance for those screen-eligible patients was low to mid-single digits. We've seen improvements in the last 5 to 10 years. You know, most of the reports out there will still state that it's less than 15% to 20% of the screen-eligible patient population. You know, we've come a long way. We still have a significant room to grow and improve. One of the beauties of Nodify testing is our test works not only in incidentally found nodules, but also in screen detection. As we see more support and compliance with screening programs, it will only increase this opportunity for us.

Speaker #6: We've seen improvement in the last 5 to 10 years, but most of the reports out there will still state that it's less than 15 to 20 percent of the screen-eligible patient population.

Speaker #6: So, we've come a long way. We still have significant room to grow and improve. One of the beauties of Notify testing is our test works not only in incidentally found nodules, but also in screen detection.

Speaker #6: So as we see more support and compliance with screening programs, it will only increase this opportunity for us. So we have seen that a little bit.

Scott Hutton: We have seen that a little bit, but we're still not there. I do think the advent of blood-based screening tests in lung cancer will help, and we think this will benefit Nodify testing in the Biodesix team.

Speaker #6: But we're still not there. I do think the advent of blood-based screening tests in lung cancer will help. And we think this will benefit notify testing in the biodetics team.

Speaker #3: Got it. Appreciate that. Thanks, guys.

Thomas Flaten: Got it. Appreciate that. Thanks, guys.

Speaker #6: Thanks, Thomas.

Scott Hutton: Thanks, Thomas.

Speaker #4: Your next question comes from the line of John Wilken with Craig Hallowan. Please go ahead.

Operator: Your next question comes from the line of John Wilkins with Craig-Hallum. Please go ahead.

Speaker #6: Hi, guys. Thanks for taking the questions. Just a couple of questions on the guide. Wondering if you can break out a little bit just in terms of how much is baked into the guidance for development services versus testing revenue.

John Wilkins: Hi, guys. Thanks for taking the questions. Just a couple questions on the guide. Wondering if you can break out a little bit, just in terms of how much is baked into the guidance for development services versus testing revenue. I know Q1 came in really strong. Just trying to get a sense of what you're expecting with that business for the remainder of the year.

John Wilkin: Hi, guys. Thanks for taking the questions. Just a couple questions on the guide. Wondering if you can break out a little bit, just in terms of how much is baked into the guidance for development services versus testing revenue. I know Q1 came in really strong. Just trying to get a sense of what you're expecting with that business for the remainder of the year.

Speaker #6: I know Q1 came in really strong. And just trying to get a sense of what you're expecting with that business for the remainder of the year.

Speaker #4: Yeah, absolutely. We're anticipating that the development services revenues for the full year remains consistent with where we had expected it to be. We had a little bit of a pull forward in the quarter.

Robin Harper Cowie: Yeah, absolutely. We're anticipating that the development services revenues for the full year remains consistent with where we had expected it to be. We had a little bit of a pull forward in the quarter, so we're able to recognize more revenue earlier in the year. We expect the services business to remain consistent with those expectations and the majority of the increase is included in the lung diagnostics revenues.

Robin Cowie: Yeah, absolutely. We're anticipating that the development services revenues for the full year remains consistent with where we had expected it to be. We had a little bit of a pull forward in the quarter, so we're able to recognize more revenue earlier in the year. We expect the services business to remain consistent with those expectations and the majority of the increase is included in the lung diagnostics revenues.

Speaker #4: So we're able to recognize more revenue earlier in the year. So we expect the services business to remain consistent with those expectations. And the majority of the increase is included in the lung diagnostics revenues.

Speaker #3: Perfect. That's super helpful. And then on the lung side, how much if any additional ASP expansion are you guys factoring in for the remainder of the year?

John Wilkins: Perfect. That's super helpful. On the lung side, how much, if any, additional ASP expansion are you guys factoring in for the remainder of the year, and is that something that we should expect to see continued progress on, or is growth at least embedded in the guide more skewed towards the volume side?

John Wilkin: Perfect. That's super helpful. On the lung side, how much, if any, additional ASP expansion are you guys factoring in for the remainder of the year, and is that something that we should expect to see continued progress on, or is growth at least embedded in the guide more skewed towards the volume side?

Speaker #3: And is that something that we should expect to see continued progress on? Or is growth, at least embedded in the guide, more skewed towards the volume side?

Speaker #4: Growth in the guide is absolutely weighted towards volume. We do anticipate that we'll see a little bit better ASP versus the first quarter. I anticipate somewhere like what we saw mid-year last year. Fourth quarter was skewed higher due to the one-time collections that we had in that quarter.

Robin Harper Cowie: Growth in the guide is absolutely weighted towards volume. We do anticipate that we'll see a little bit better ASP versus Q1. I anticipate somewhere like what we saw mid-year last year. Q4 was skewed higher due to the one-time collections that we had in that quarter. While we anticipate a little bit improvement in ASP, we're very pleased with where we are right now and the improvements made both through coverage contracting and revenue cycle management. Volumes should be the growth driver.

Robin Cowie: Growth in the guide is absolutely weighted towards volume. We do anticipate that we'll see a little bit better ASP versus Q1. I anticipate somewhere like what we saw mid-year last year. Q4 was skewed higher due to the one-time collections that we had in that quarter. While we anticipate a little bit improvement in ASP, we're very pleased with where we are right now and the improvements made both through coverage contracting and revenue cycle management. Volumes should be the growth driver.

Speaker #4: So while we anticipate a little bit improvement in ASP, we're very pleased with where we are right now and the improvements made both through coverage contracting and revenue cycle management.

Speaker #4: So volumes should be the growth driver.

Speaker #3: Perfect. That's all for me. Thanks so much.

John Wilkins: Perfect. That's all for me. Thanks so much.

John Wilkin: Perfect. That's all for me. Thanks so much.

Speaker #6: Thanks, John.

Scott Hutton: Thanks, John.

Speaker #4: Your next question comes from the line of Kyle Mixon with Canaccord Ingenuity.

Operator: Your next question comes from the line of Kyle Mikson with Canaccord Genuity.

Speaker #5: Yeah, you guys, thanks for the questions. Congrats on the quarter. It looked like the I think that you did better on the pharma front this quarter.

Kyle Mikson: Yeah. Hey, guys. Thanks for the questions. Gonna ask on the quarter. It looks like the... I think that you did better on the pharma front this quarter. Could you maybe talk about the pipeline funnel there? Yeah, I wanted to start there. Maybe like specifically what's, you know, like what's most attractive with your portfolio, relative to maybe prior years that's helping you succeed on that front?

Speaker #5: Could you maybe talk about the pipeline and the funnel there? And yeah, I wanted to start there. Maybe specifically what's the most attractive with your portfolio relative to maybe prior years that's helping you succeed on that front?

Speaker #6: Yeah, Kyle, great question. This was more of a kind of a cadence or timing scenario. We had a number of retrospective samples that came in earlier than we anticipated and forecasted.

Scott Hutton: Yeah, Kyle, great question. You know, this was more of a kind of a cadence or timing scenario. We had a number of retrospective samples that came in earlier than we anticipated and forecasted. We were able to pull a couple of those forward, those contracts. We don't see it changing kind of what our long-term performance is. Just as a reminder, this has historically been about 8% to 10% of our total annual revenue. We continue to see great progress and momentum within the biopharma services and development services front. You may have noticed that we exited the quarter with $10.4 million in contracted dollars out there to be recognized over the coming months and quarters.

Speaker #6: So we were able to pull a couple of those forward, those contracts. So we don't see it changing kind of what our long-term performance is, and just as a reminder, this has historically been about 8% to 10% of our total annual revenue.

Speaker #6: We continue to see great progress and momentum, within the biopharma services and development services front. And you may have noticed that we exited the quarter with 10.4 million in contracted dollars out there to be recognized over the coming months and quarters.

Speaker #6: We've stayed above that $10 million mark for quite some time now, so that gives us a lot of confidence about what the future looks like.

Scott Hutton: We've stayed above that 10 million mark for quite some time now. That gives us a lot of confidence about what the future looks like. It really isn't a shift or a change. This momentum has been building over the last few years. It's really interest across our portfolio on the genomic side and the proteomic side, right? Being a company that is focused on multi-omics solutions, resonates with our biopharma services partners. Our team continues to do a great job on that front. We're excited about the rest of the year. We just finished AACR, and we've got ASCO upcoming. Those two meetings usually set us up for a strong H2.

Speaker #6: And it really isn't a shift or a change. This momentum has been building over the last few years. And it's really interesting across our portfolio on the genomic side and the proteomic side.

Speaker #6: Right? Being a company that is focused on multi-omic solutions, resonates with our biopharma services partners and so our team continues to do a great job on that front.

Speaker #6: And we're excited about the rest of the year. We've got—we just finished AACR, and we've got ASCO upcoming. And so those two meetings usually set us up for a strong second half.

Speaker #3: Perfect. And then you had a great top line beat and your gross margin has been really solid the past few quarters. Did you specify how you're going to reinvest those dollars in Salesforce, new products, new markets, just how do you guys think about that?

Kyle Mikson: Perfect. You had a great top-line beat, and your gross margin has been really solid the past few quarters. Can you just specify how you're going to reinvest those $, in sales force, new products, new markets? You know, just how do you guys think about that? With respect to the EBITDA, you know, kind of positivity going forward, how does that affect that kind of pathway?

Speaker #3: And then with respect to the EBITDA kind of positivity going forward, how does that affect that kind of pathway?

Speaker #4: Yeah, we're obviously very pleased with the gross margins and the continued improvement that we've seen over the last several quarters. The team works very, very hard to not only improve our ASPs, but also gain real efficiencies and productivity improvements within our operations to drive down the average cost per test.

Robin Harper Cowie: Yes. We're obviously very pleased with the gross margins and the continued improvements that we've seen over the last several quarters. The team works very, very hard to not only improve our ASPs, but also gain real efficiencies and productivity improvements within our operations to drive down the average cost per test. The dollars that are coming in through those gross margins go to support the business, and our main focus is our commercial expansion, growing the top-line revenue, and then getting to Adjusted EBITDA, sustained Adjusted EBITDA positivity and cash flow positivity. I guess the dollars really are going towards commercial. We're still on track. We are executing to plan and on the path to profitability.

Robin Cowie: Yes. We're obviously very pleased with the gross margins and the continued improvements that we've seen over the last several quarters. The team works very, very hard to not only improve our ASPs, but also gain real efficiencies and productivity improvements within our operations to drive down the average cost per test. The dollars that are coming in through those gross margins go to support the business, and our main focus is our commercial expansion, growing the top-line revenue, and then getting to Adjusted EBITDA, sustained Adjusted EBITDA positivity and cash flow positivity. I guess the dollars really are going towards commercial. We're still on track. We are executing to plan and on the path to profitability.

Speaker #4: The dollars that are coming in through those gross margins go to support the business and our main focus is our commercial expansion, growing the top line revenue, and then getting to adjusted EBITDA sustained adjusted EBITDA positivity and cash flow positivity.

Speaker #4: So I guess the dollars really are going towards commercial. And we're still on track. We are executing to plan. And on the path to profitability.

Speaker #3: And then on that note, anything additional to pipeline investment, just give because I feel like Salesforce is kind of an obvious one that you're going to be consistent with the I guess several reps or almost all the digital reps for quarter, but anything on the pipeline maybe going forward or maybe partnerships perhaps that you can kind of accelerate with this extra money?

Kyle Mikson: On that note, anything additional to, like, pipeline investment? I feel like sales force is kind of an obvious one, and you're gonna be consistent with the, you know, I guess several reps or almost double-digit reps per quarter. Anything on the pipeline maybe going forward or maybe partnerships perhaps that you can kind of accelerate with this extra money?

Speaker #6: Yeah. Well, we hope so, right? As we look towards the remainder of 2026, we think we've got great opportunities to highlight progress being made, investments in the return on those investments, and hopefully additional partnership and collaboration opportunities.

Scott Hutton: Yeah, yeah. Well, we hope so, right? As we look towards the remainder of 2026, we think we've got great opportunities to highlight progress being made, investments, and the return on those investments and hopefully additional partnership and collaboration opportunities. We'll look forward to sharing those when we get there. You know, for us, it really is about control, what we can control. We've worked long and hard to build what we believe is the strongest and best pulmonology-focused sales team in the market, and we wanna continue to give them an opportunity to flex and demonstrate that we can continue to build this market. Last year in the beginning of the Q4, we had an R&D day.

Speaker #6: We'll look forward to sharing those when we get there. But for us, it really is about control what we can control. We've worked long and hard to build what we believe is the strongest and best pulmonology-focused sales team in the market.

Speaker #6: And we want to continue to give them an opportunity to flex and demonstrate that we can continue to build this market. Last year, in the beginning of the fourth quarter, we had an R&D day.

Speaker #6: We'll look forward to providing more on kind of our R&D and development services front in the second half. But anything that happens between now and then, we're going to share that broadly and celebrate it.

Scott Hutton: We'll look forward to providing more on kind of our R&D and development services front in H2. Anything that happens between now and then, we're gonna share that broadly and celebrate it.

Speaker #3: Great. Thanks, guys. Congrats again.

Kyle Mikson: Great. Thanks, guys, for us again.

Scott Hutton: Thanks, Kyle.

Speaker #4: Thank you. Okay, and once again, to ask a question, please press star one on your telephone keypad. Our next question comes from the line of Dan Brennan with TD Cowen.

Robin Harper Cowie: Thanks.

Robin Cowie: Thanks.

Operator: Okay. Once again, to ask a question, press star one on your telephone keypad. Our next question comes from the line of Dan Brennan with TD Cowen. Please go ahead.

Speaker #4: Please go ahead.

Speaker #7: Hi. Pradeep Ambrose on behalf of Dan Brennan. Can you quantify how much quarter one revenue is impacted by weather versus typical seasonality?

Philippe Ambrose: Hi, Philippe Ambrose on behalf of Dan Brennan. Can you quantify how much Q1 revenue was impacted by weather versus typical seasonality?

Speaker #4: Yeah, it's a great question. Like everybody else, particularly those in the areas of the country that were impacted by the series of storms, we were as well.

Robin Harper Cowie: Yes, it's a great question. Like everybody else, particularly those in the areas of the country that were impacted by the series of storms, we were as well. It was a pretty significant impact to us in the late January, early February timeframe, as the FedEx hubs across the country were impacted. We were very pleased with how the team responded and clearly finished the quarter strong to end with a nice strong beat for the quarter.

Robin Cowie: Yes, it's a great question. Like everybody else, particularly those in the areas of the country that were impacted by the series of storms, we were as well. It was a pretty significant impact to us in the late January, early February timeframe, as the FedEx hubs across the country were impacted. We were very pleased with how the team responded and clearly finished the quarter strong to end with a nice strong beat for the quarter.

Speaker #4: It was a pretty significant impact to us in the late January/early February timeframe, as the FedEx hubs across the country were impacted. But we were very pleased with how the team responded and clearly finished the quarter strong to end with a nice, strong beat for the quarter.

Speaker #3: Awesome. Thank you.

Philippe Ambrose: Awesome. Thank you.

Operator: With no further questions in queue, this does conclude today's conference call. You may now disconnect.