Q2 2026 MDxHealth SA Earnings Call

August 13, 2026

Operator 2: Hello, and welcome everyone joining today's MDxHealth Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note this call is being recorded, and we are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to John Fraunces with LifeSci Advisors. Please go ahead.

Operator: Hello, and welcome everyone joining today's MDxHealth Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note this call is being recorded, and we are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to John Fraunces with LifeSci Advisors. Please go ahead.

Speaker #2: Hello and welcome, everyone, joining today's MDxHealth second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions.

Speaker #2: During the question and answer session, to register to ask a question at any time, please press star 1 on your telephone keypad. Please note, this call is being recorded, and we are standing by should you need any assistance.

Speaker #2: It is now my pleasure to turn the meeting over to John Frances, with LifeSci advisors. Please go ahead.

Speaker #3: Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties.

John Fraunces: Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call, whether in prepared remarks or during the Q&A session. These forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the risk factor section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F. I will now turn the call over to Michael McGarrity, Chief Executive Officer.

Speaker #3: These risks and uncertainties are detailed in the risk factor section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20F.

Speaker #3: I'll now turn the call over to Michael McGarrity, Chief Executive Officer.

Speaker #4: Thanks, John. And thank you all for joining us for our second quarter 2026 earnings conference call. With me today is Ron Calfas, Interim Chief Financial Officer.

Michael McGarrity: Thanks, John, and thank you all for joining us for our Q2 2026 earnings conference call. With me today is Ron Kalfus, Interim Chief Financial Officer. Q2 was a pivotal quarter for MDxHealth. Following the unanticipated reimbursement developments related to our Resolve test in April, our Q2 results reflect the strength of our core business, which was precisely what we committed to deliver with our sales force focused solely on this significant market opportunity. More specifically, we communicated that we expected sequential revenue acceleration from Q1 to Q2. We generated a 14% sequential revenue increase for $3.3 million, representing the largest quarter-over-quarter revenue acceleration in our company's history. We also anticipated a recovery in our tissue-based business following the expected impact in Q4 and Q1 post-integration and sales force restructuring from the ExoDx acquisition. We delivered that recovery with a sequential increase of greater than 1,400 tissue-based tests.

Speaker #4: Q2 was a pivotal quarter for MDxHealth. Following the unanticipated reimbursement developments related to our Resolve test in April, our Q2 results reflect the strength of our core business—which was precisely what we committed to deliver with our salesforce focused solely on this significant market opportunity.

Speaker #4: More specifically, we communicated that we expected sequential revenue acceleration from Q1 to Q2. We generated a 14% sequential revenue increase or 3.3 million dollars, representing the largest quarter-over-quarter revenue acceleration in our company's history.

Speaker #4: We also anticipated a recovery in our tissue-based business following the expected impact in Q4 and Q1 post-integration and Salesforce restructuring from the ExoDX acquisition.

Speaker #4: We delivered that recovery with the sequential increase of greater than 1,400 tissue-based tests. We aggressively set a goal to transition all of our resolve customers by the end of Q2.

Michael McGarrity: We aggressively set a goal to transition all of our Resolve customers by the end of Q2, an objective that we achieved while also building deep credibility with our customer base through the unwavering dedication and support of our sales and client services teams. Based on our revenue growth expectations, coupled with exceptional operating discipline, we are now firmly on track to return to positive adjusted EBITDA as we exit 2026. Following the discontinuation of Resolve UTI testing, we completed the cessation of our Plano, Texas, lab operations and eliminated the USD 10.4 million contingent liability to Novitas from our corporate structure as a discontinued operation through an organized wind down of that independently operated entity. Finally, we strengthened our balance sheet and cash position through a registered direct financing that generated USD 20 million in proceeds priced at the market with no discount or warrant structure.

Speaker #4: An objective that we achieved while also building deep credibility with our customer base. Through the unwavering dedication and support of our sales and client services teams, and based on our revenue growth expectations, coupled with exceptional operating discipline, we are now firmly on track to return to positive adjusted EBITDA as we exit 2026.

Speaker #4: Following the discontinuation of resolve UTI testing, we completed the cessation of our Plano, Texas lab operations and eliminated the 10.4 million dollar contingent liability to Novitas from our corporate structure, as a discontinued operation through an organized wind-down of that independently operated entity.

Speaker #4: And finally, we strengthened our balance sheet and cash position through a registered direct financing that generated $20 million in proceeds, priced at the market with no discount or warrant structure.

Speaker #4: I want to express my sincere gratitude to our entire organization for their professionalism and perseverance over these challenging 90 days. In my experience, you are defined not by what happens to you, but by how you respond.

Michael McGarrity: I want to express my sincere gratitude to our entire organization for their professionalism and perseverance over these challenging 90 days. In my experience, you are defined not by what happens to you, but by how you respond. Our entire team, from sales and client services through revenue cycle management and laboratory operations, demonstrated incredible character, professionalism, and commitment to our customers and to each other. I am immensely proud to stand alongside such a resilient group of professionals who stepped up when it mattered most. I would also like to specifically thank our Plano, Texas, team for their unwavering commitment to serving our customers through their final day of operations on 30 June. Their professionalism and dedication to our patients was extraordinary, and our entire organization owes them a debt of gratitude for their integrity and service. This company did not suddenly forget how to operate and execute.

Speaker #4: Our entire team, from sales and client services to revenue cycle management and laboratory operations, demonstrated character, professionalism, and commitment to our customers and to each other.

Speaker #4: I am immensely proud to stand alongside such a resilient group of professionals who stepped up when it mattered most. I would also like to specifically thank our Plano, Texas team for their unwavering commitment to serving our customers through their final day of operations on June 30.

Speaker #4: Their professionalism and dedication to our patients was extraordinary, and our entire organization owes them a debt of gratitude for their integrity and service. This company did not suddenly forget how to operate next quarter.

Speaker #4: While our operational strength was clearly on display in Q2, we are confident that our growth trajectory will return to the performance we have consistently delivered over the last number of years, as we move through the remainder of 2026 and beyond.

Michael McGarrity: While our operational strength was clearly on display in Q2, we are confident that our growth trajectory will return to the performance we have consistently delivered over the last number of years as we move through the remainder of 2026 and beyond. This confidence is rooted in our high-growth market opportunity, our strong competitive position, and our unparalleled suite of clinically actionable diagnostics, supporting clinicians and patients across the entire prostate cancer continuum. Our foundational commitment to focus, execution, and growth has never been more evident than during our navigation of Q2, and we look forward to continuing that momentum. Before turning the call over to Ron, I want to thank our shareholders who stepped up to support our mission, as well as our customers and stakeholders for their continued trust and confidence in MDxHealth.

Speaker #4: This confidence is rooted in our high-growth market opportunity and our strong competitive position, and our unparalleled suite of clinically actionable diagnostics supporting clinicians and patients across the entire prostate cancer continuum.

Speaker #4: Our foundational commitment to focus, execution, and growth has never been more evident than during our navigation of Q2. We look forward to continuing that momentum.

Speaker #4: Before turning the call over to Ron, I want to thank our shareholders, who stepped up to support our mission, as well as our customers and stakeholders for their continued trust and confidence in MDxHealth.

Speaker #4: We are incredibly proud of our team's commitment, not only to our operational and financial performance, but to what matters most, the patient and family on the other side of every single sample we receive.

Michael McGarrity: We are incredibly proud of our team's commitment not only to our operational and financial performance, but to what matters most, the patient and family on the other side of every single sample we receive. I will follow up with some closing comments and view forward, but first, let me turn the call over to Ron to walk through our Q2 financial results. Ron?

Speaker #4: I will follow up with some closing comments and view forward, but first, let me turn the call over to Ron to walk through our second quarter financial results.

Speaker #4: Ron?

Speaker #5: Thank you, Mike. Before I dive into the financial results, I want to briefly frame our Q2 presentation. As detailed in our press release, we have successfully completed the wind-down of our resolve UTI business in Q2, with a permanent cessation of operations of our Delta laboratory subsidiary and its Plano, Texas laboratory, prior to June 30, 2026.

Ron Kalfus: Thank you, Mike. Before I dive into the financial results, I want to briefly frame our Q2 presentation. As detailed in our press release, we have successfully completed the wind down of our Resolve UTI business in Q2 with the permanent cessation of operations of our Delta Laboratories subsidiary and its Plano, Texas, laboratory prior to 30 June 2026. Having met the requisite accounting criteria, the Resolve business is now formally classified as a discontinued operation. As such, all current and prior year financial metrics reflect only our continuing core operations with the historical results of the Resolve business fully excluded. Our revenue for the second quarter ended 30 June 2026 was $27.2 million, an increase of 16% over the second quarter of 2025. Revenue in the second quarter of 2026 was comprised of 73% from tissue-based tests, compared to 96% for the same period last year.

Speaker #5: Having met the requisite accounting criteria, the Resolve business is now formally classified as a discontinued operation. As such, all current and prior-year financial metrics reflect only our continuing core operations, with the historical results of the Resolve business fully excluded.

Speaker #5: Our revenue for the second quarter ended June 30, 2026, was 27.2 million dollars, an increase of 16% over the second quarter of 2025. Revenue in the second quarter of 2026 was comprised of 73% from tissue-based tests compared to 96% for the same period last year.

Speaker #5: Moving below the revenue line, our gross profit for the quarter was $17.9 million, an increase of 11% compared to $16.1 million for the second quarter of 2025.

Ron Kalfus: Moving below the revenue line, our gross profit for the quarter was $17.9 million, an increase of 11% as compared to $16.1 million for the second quarter of 2025. Gross margins were 65.7% compared to 68.6% for Q2 2025, a decrease of 2.9 percentage points primarily attributed to tissue versus liquid mix. Our operating loss for the quarter increased to $5.1 million compared to $1.5 million for the second quarter of 2025, primarily driven by increases in headcount and other operating expenses related to the ExoDx acquisition, which were not present at this time last year. Our net loss increased 36% to $9.5 million compared to $7 million for the prior year, primarily driven by operating expenses related to the ExoDx acquisition.

Speaker #5: Gross margins were 65.7% compared to 68.6% for Q2 '25, a decrease of 2.9 percentage points primarily attributed to tissue versus liquid mix. Our operating loss for the quarter increased to 5.1 million dollars compared to 1.5 million dollars for the second quarter of 2025, primarily driven by increases in headcount and other operating expenses related to the ex-ODX acquisition, which were not present at this time last year.

Speaker #5: Our net loss increased 36% to $9.5 million, compared to $7 million for the prior year, primarily driven by operating expenses related to the ex-ODX acquisition.

Speaker #5: We are confident that our guidance and associated revenue growth will absorb this increase in acquired operating expenses and return us to our trend of adjusted EBITDA profitability as we exit this year.

Ron Kalfus: We are confident that our guidance and associated revenue growth will absorb this increase in acquired operating expenses and return to our trend of adjusted EBITDA profitability as we exit this year. Adjusted EBITDA for the second quarter was a negative $2.3 million, compared to a positive $1.1 million for the second quarter of 2025. Note that a reconciliation of IFRS to non-IFRS financial measures has been provided in the tables included in this press release. Finally, cash and cash equivalents as of 30 June 2026, total $19.2 million. In addition, on 11 August, we executed a $20 million registered direct placement with existing shareholders. After taking this transaction into account, our pro forma cash balance as of 30 June 2026 would have been $39.2 million. This concludes my overview of the financial results, and I will now turn the call back to Mike.

Speaker #5: Adjusted EBITDA for the second quarter was a negative 2.3 million dollars, compared to a positive 1.1 million dollars for the second quarter of 2025.

Speaker #5: Note that a reconciliation of IFRS to non-IFRS financial measures has been provided in the tables included in this press release. Finally, cash and cash equivalents as of June 30, 2026, total 19.2 million dollars.

Speaker #5: In addition, on August 11, we executed a $20 million registered direct placement with existing shareholders. After taking this transaction into account, our pro forma cash balance as of June 30, 2026, would have been $39.2 million.

Speaker #5: This concludes my overview of the financial results, and I will now turn the call back to Mike.

Speaker #4: Thanks, Ron. When speaking with stakeholders following our Q1 results, I noted that while the decision to discontinue resolve was unfortunate, I believe it would likely end up being a blessing in disguise, one that would manifest as an absolute singular focus on the vertical we have built in the urology market, in our prostate cancer franchise in particular.

Michael McGarrity: Thanks, Ron. When speaking with stakeholders following our Q1 results, I noted that while the decision to discontinue Resolve was unfortunate, I believed it would likely end up being a blessing in disguise, one that would manifest as an absolute singular focus on the vertical we have built in the urology market and our prostate cancer franchise in particular. Our Q2 performance represents the first clear evidence of that promise and potential being realized. From a focus perspective, the peer-reviewed publication of data from our Oxford ProMPT study is already being recognized and embraced by our urology customers. Furthermore, we see clear visibility into the potential of our landmark Oxford ProtecT study to transform the market landscape, particularly for patients in the active surveillance setting.

Speaker #4: Our Q2 performance represents the first clear evidence of that promise and potential being realized. From a focused perspective, the peer-reviewed publication of data from our Oxford prompt study is already being recognized and embraced by our urology customers.

Speaker #4: Furthermore, we see clear visibility into the potential of our landmark Oxford PROTEC study to transform the market landscape, particularly for patients in the active surveillance setting.

Speaker #4: Our vision is to establish GPS as the only diagnostic test with NCCN level one evidence in this critical patient population. Which represents the majority of patients in the prostate cancer diagnostic pathway.

Michael McGarrity: Our vision is to establish GPS as the only diagnostic test with NCCN Level 1 evidence in this critical patient population, which represents the majority of patients in the prostate cancer diagnostic pathway. Additionally, we continue to advance our AI initiatives, which will deliver meaningful incremental value to both new and existing customers across our urology and pathology stakeholders. Over the past two years, our efforts to establish and expand our reach with pathology partners alongside the urologists they serve have paid significant dividends. We are confident that both Confirm and GPS will continue to resonate strongly with this key constituency through their unique clinical features, benefits, and supporting data. All of this progress in Q2 reinforces our commitment to and confidence in meeting or exceeding our full year guidance of $110 to $115 million in revenue while returning to adjusted EBITDA profitability as we exit this year.

Speaker #4: Additionally, we continue to advance our AI initiatives which will deliver meaningful incremental value to both new and existing customers across our urology and pathology stakeholders.

Speaker #4: Over the past two years, our efforts to establish and expand our reach with pathology partners alongside the urologists they serve have paid significant dividends.

Speaker #4: We are confident that both Confirmed and GPS will continue to resonate strongly with this key constituency through their unique clinical features, benefits, and supporting data.

Speaker #4: All of this progress in Q2 reinforces our commitment to and confidence in meeting or exceeding our full-year guidance of 110 to 115 million dollars in revenue.

Speaker #4: While returning to adjusted EBITDA profitability as we exit this year, our culture of "quality first and customers always" continues to drive our growing reputation for excellence across the urology market.

Michael McGarrity: Our culture of quality first and customers always continues to drive our growing reputation for excellence across the urology market. We remain steadfast in our commitment to delivering growth and value, cementing MDxHealth's position as the leading precision diagnostics company focused exclusively on our high-growth urology market opportunity. As always, we carry a profound responsibility to create long-term value for all of our stakeholders, including patients, clinicians, payers, and shareholders. Thank you for your continued interest in and support of MDxHealth. I will now turn the call back over to the operator to open the line for questions.

Speaker #4: We remain steadfast in our commitment to delivering growth and value cementing MDxHealth position as the leading precision diagnostics company focused exclusively on our high-growth urology market opportunity.

Speaker #4: As always, we carry a profound responsibility to create long-term value for all of our stakeholders, including patients, clinicians, payers, and shareholders. Thank you for your continued interest in and support of MDxHealth.

Speaker #4: I will now turn the call back over to the operator to open the line for questions.

Speaker #1: Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question.

Operator 2: Thank you. If you'd like to ask a question, press star 1 on your keypad. To leave the queue at any time, press star 2. Once again, that is star 1 to ask a question. We'll take our first question from Thomas Flaten with Lake Street. Your line is open.

Operator: Thank you. If you'd like to ask a question, press star 1 on your keypad. To leave the queue at any time, press star 2. Once again, that is star 1 to ask a question. We'll take our first question from Thomas Flaten with Lake Street. Your line is open.

Speaker #1: And we'll take our first question from Thomas Flatten with Lake Street. Your line is open.

Speaker #5: Hey, Mike and Ron, congrats on a nice rebound quarter. Two questions from me. Given the sequential increase on the tissue side, do you think we can conclude that the challenges were internal, rather than there being any competitive dynamics that were impacting volumes previously?

Thomas Flaten: Hey, Mike and Ron. Congrats on a nice rebound quarter. Two questions from me. Given the sequential increase on the tissue side, do you think we can conclude that the challenges were internal rather than there being any competitive dynamics that were impacting volumes previously?

Speaker #2: Yeah, Thomas, I think we were ahead of that a little bit. I kind of signaled we expected Q4 and Q1 to be a little choppy, really a function of the restructuring of the sales organization, right?

Michael McGarrity: Yeah, Thomas. I think we were ahead of that a little bit. I kind of signaled we expected Q4 and Q1 to be a little choppy, really a function of the restructuring of the sales organization. We had a territory reorganization and then cross-training of the new reps, remapping of the customer base, the combined businesses, and that is really what we saw. So we did not see it, and hopefully Q2 is the beginning of evidence of that it would disrupt our position in the market, just more create a little diversion of the focus for that quarter or two and we are confident that Q2 signals that we are back to the full sales force focused on our core menu.

Speaker #2: We had a territory reorganization and then cross-training of the new reps remapping of the customer base, the combined businesses, and that's really what we saw.

Speaker #2: So, we didn't see it in, hopefully, Q2 as the beginning of evidence of that—that it would disrupt our position in the market. Just more create a little diversion of the focus for that quarter or two, and we're confident that Q2 signals that we're back to the full sales force focused on our core menu.

Speaker #5: Excellent. And then as we kind of go from first half to second half towards your guidance range, do you expect the revenue progression to be pretty linear or should we expect some type of fluctuation between Q3 and Q4?

Thomas Flaten: Excellent. As we go from H1 to H2 towards your guidance range, do you expect the revenue progression to be pretty linear, or should we expect some type of fluctuation between Q3 and Q4?

Speaker #2: Yeah, Thomas, I would say generally linear. Q3 is always a little bit of a wild card. With some seasonality, just based on patients and clinician flow through our urology customer base.

Michael McGarrity: Yeah, Thomas, I would say, generally linear. Q3 is always a little bit of a wild card with some seasonality just based on patients and clinician flow through our urology customer base. So that being the only potential factor to affect Q3, we would expect acceleration in Q3 and Q4 in linear-ish.

Speaker #2: So that being the only potential factor to affect Q3, we would expect acceleration in Q3 and Q4 and linear-ish.

Speaker #5: Great. I appreciate that. Thank you.

Thomas Flaten: Great. I appreciate that. Thank you.

Speaker #2: Thanks, Thomas.

Michael McGarrity: Thanks, Thomas.

Operator 2: We'll take our next question from Dan Brennan with TD Cowen. Your line is open.

Operator: We'll take our next question from Dan Brennan with TD Cowen. Your line is open.

Speaker #1: We'll take our next question from Dan Brennan with TD Cowan. Your line is open.

Speaker #6: Hey guys, thanks for the questions. Maybe just the first one. So that it's nice to hear that liability, I think that was there from the Texas Medica case is kind of off the books now, I guess, because you closed the lab.

Dan Brennan: Hey, guys. Thanks for the questions. Maybe just the first one, it's nice to hear that liability, I think that was there from the Texas Medica case, is off the books now, I guess, because you closed the lab. Just wanted to confirm, I guess. Had you guys discussed that at Q1, like this ability to remove that given these actions? Because it sounds like it's a nice removal on your part.

Speaker #6: Just wanted to confirm, I guess—had you guys discussed that at one Q, like this ability to kind of remove that given these actions?

Speaker #6: Because it sounds like it's a nice kind of a nice removal on your part.

Speaker #2: Yeah, Dan, thanks. I didn't want to get ahead of that. There was obviously a lot of work to occur with all of our outside counsels and advisors on setting that up, and consent from our lending partner, but it came together as we anticipated.

Michael McGarrity: Well, Dan, thanks. I did not want to get ahead of that. There was obviously a lot of work to occur with all of our outside counsels and advisors on setting that up and consent from our lending partner, but it came together as we anticipated. We believed the structure, the way we set that entity up, allowed for that. We just wanted to make sure that we had it all tight and we were able to close that up here for this communication. So we believe that is a significant de-risking element to our business as we go forward.

Speaker #2: We believed the structure the way we set that entity up allowed for that. We just wanted to make sure that we had it all tight and we were able to close that up here for this communication.

Speaker #2: So we believe that is a significant de-risking element to our business as we go forward.

Dan Brennan: Good stuff. Then the raise, obviously getting it done kind of at the market, it was attractive. Just wondering, can you speak to a little bit how that sets you up? Obviously, your adjusted EBITDA positive exiting the year, which is nice to hear. You have this $20 million of additional capital. As we look ahead, I know you've got the debt and you have some payments from Exact Sciences still out the next couple of years. Just how do we think about the need for further capital versus internally generated cash flow?

Speaker #6: Good stuff. And then the raise, obviously getting it done kind of at market, it was attractive. Just wondering, can you speak a little bit to how that sets you up?

Speaker #6: Obviously, your EBITDA positive exiting the year, which is nice to hear. You have this $20 million of additional capital. As we look ahead, I know you've got the debt and you have some payments from Exact still out the next couple of years.

Speaker #6: How do we think about the need for further capital versus internally generated cash flow?

Speaker #2: Yeah, I think it's I think your last statement is key, right? So we anticipate that based on the scale of our business and leverage we have in the P&L, one of the key execution items we focused on is significant and consistent top line growth while holding our opex really straight away for the past three years.

Michael McGarrity: Yeah, I think your last statement is key. We anticipate that based on the scale of our business and the leverage we have in the P&L. One of the key execution items we've focused on is significant and consistent top-line growth while holding our OpEx really straight away for the past three years. We expect both those to continue, and that leverage generates meaningful progress in the business beginning to fund itself from an operating basis. So we're confident that that gives us pretty strong leverage as we go forward. This capital, our balance sheet position obviously provides significant runway for the business. We've demonstrated, I think, with our partner, Exact Sciences, Abbott, flexibility on that. So all those options remain in front of us, but the two key points and also the equity option on that, they are stakeholders in the company as well.

Speaker #2: We expect both those to continue and that leverage generates meaningful progress in the business beginning to fund itself from an operating basis. So we're confident that that gives us pretty strong leverage as we go forward.

Speaker #2: This capital, our balance sheet position, obviously provides significant runway for the business. And we've demonstrated, I think, with our partner, Exact, a bit of flexibility on that.

Speaker #2: So all those options remain in front of us. But the two key points—and also the equity option on that—they are stakeholders in the company as well.

Speaker #2: So we're really counting on the business progress and growth continuing to really begin to fund some of those obligations. But we have clear runway through that period right now.

Michael McGarrity: We're really counting on the business progress growth continuing that really begins to fund some of those obligations. But we have clear runway through that period right now.

Speaker #6: Terrific. Okay, guys, thanks a lot.

Dan Brennan: Terrific. Okay, guys. Thanks a lot.

Speaker #2: Thank you, Dan.

Michael McGarrity: Thank you, Dan.

Speaker #1: We'll take our next question from Bill Bonello with Craig Hallum. Your line is open.

Operator 2: We will take our next question from Bill Bonello with Craig-Hallum. Your line is open.

Operator: We will take our next question from Bill Bonello with Craig-Hallum. Your line is open.

Bill Bonello: Hey, guys. Thanks a lot. I want to sort of go back on a couple of the topics that have been talked about, I guess, first again on tissue. So it was great to see the sequential increase, but it looks like volume is still down on a year-over-year basis, yet competitors still growing in the mid-teens. You did have one competitor talk about weakness in the low-risk segment of the market. However, I guess I am just trying to get a sense of if things are sort of back to functioning on the sales force front without sort of distraction. Why would not we think of that being a business that should be growing faster year over year? I know you talked about acceleration, but maybe give us some sense of what you think the potential is for that business in a more normalized year-over-year growth.

Speaker #7: Hey, guys, thanks a lot. I want to circle back on a couple of the topics that have been talked about. I guess first, again, on tissue.

Speaker #7: So it was great to see the sequential increase, but it looks like volumes still down on a year-over-year basis. Competitors still growing in the mid-teens.

Speaker #7: You did have one competitor talk about weakness in the low-risk segment of the market. However, I guess I'm just trying to get a sense of if things are sort of back to functioning on the sales force front without sort of destruction to distraction, not destruction, why wouldn't we think of that being a business that should be growing faster year over year and I know you talked about acceleration, but maybe give us some sense of what you think the potential is for that business in a more normalized year-over-year growth.

Speaker #2: Yeah, Bill, I absolutely get the question. I think the risk of pointing to a Q2 of last year was our highest tissue-based quarter. But I don't want to lean too much on that.

Michael McGarrity: Yeah, Bill, I absolutely get the question. I think, at the risk of pointing to a comp Q2 of last year was our highest tissue-based quarter. I do not want to lean too much on that. I think, one other note of Q2 when I commented with Thomas on tissue in Q4 and Q1. Q2, one of the things that I was, I do not want to say concerned about, but required a lot of focus was our sales organization also in a 6-week period in the back half of the quarter, had to focus on transitioning all of our Resolve customers. While we did not disclose the number, that was hundreds of customers and thousands of urologists that were using that test. So that lift was significant, probably equal to or more than the restructuring of the sales organization based on the time.

Speaker #2: I think one other note of Q2, when I commented with Thomas on tissue in Q4 and Q1, Q2, one of the things that I was I don't want to say concerned about, but required a lot of focus was our sales organization also in a six-week period on the back half in the back half of the quarter had to focus on transitioning all of our resolved customers and while we didn't disclose the number that was hundreds of customers and thousands of urologists, that were using that test.

Speaker #2: So that lift was significant, probably equal to or more than the restructuring of the sales organization based on the time and they completed that with all of our customers being successfully transitioned to their acceleration.

Michael McGarrity: And they completed that with all of our customers being successfully transitioned to their acceptance while driving that sequential acceleration. I get it, the flat year-over-year, we are not celebrating that on a go-forward basis, but our guidance as it is set up requires a return to year-over-year growth that we were seeing prior to this. Our current guide at USD 110 million to USD 115 million contemplates 20% to 26% growth, which would suggest that if you look at our 2026 for tissue by quarters, we would be down 12 flat and then up accelerated. I guess hopefully that is a fair answer that we expect as we post and discuss Q3 and post and discuss Q4. We would agree, we do think our position in that lower risk category, the active surveillance population we reference, is really gaining strength, and we will continue to count on that.

Speaker #2: And I get at the flat year-over-year, we're not celebrating that on a go forward basis, but our guidance says it's set up requires a return to year-over-year growth that we're seeing prior to this.

Speaker #2: Our current guide at 110 to 115 contemplates 20 to 26 percent growth, which would suggest that if you look at our 2026 for tissue by quarters, we'd be down 12 flat and then up accelerated up accelerated.

Speaker #2: So I guess hopefully that's a fair answer that we expect as we post and discuss Q3 and post and discuss Q4. We would agree we do think our position in that lower risk category, the active surveillance population, we reference is really gaining strength.

Speaker #2: And we'll continue to count on that. That's what our sales force will be focused on. But I give a lot of credit to the team for doing two things at once, right?

Michael McGarrity: That is what our sales force will be focused on. But I give a lot of credit to the team for doing two things at once, right? Driving the recovery in the business and taking care of all those customers. It is important to note, virtually all of those Resolve mdx customers are prostate cancer customers, so it required real focus and goodwill working with our customers to obviously not upset our base, and we think we successfully achieved that.

Speaker #2: Driving the recovery in the business and taking care of all those customers. And it's important to note, virtually all of those resolved customers are prostate cancer customers.

Speaker #2: So it required real focus and goodwill working with our customers to, obviously, not upset our base. And we think we successfully achieved that.

Bill Bonello: That is helpful. Just to be crystal clear, as we thought through the implications for you and low risk, we sort of could have envisioned one of two scenarios. One, you are seeing similar maybe macro level decline in utilization, or two, you are taking share. It sounds like from your answer, you are not necessarily seeing any kind of headwind in terms of the utilization. Is that fair, or I am putting words in your mouth?

Speaker #7: And that's helpful. And just to be crystal clear, were you—because as we thought through the implications for you in low risk, we sort of could have envisioned one of two scenarios.

Speaker #7: One, you're seeing a similar, maybe macro-level, decline in utilization, or two, you're taking share. It sounds like from your answer you're not necessarily seeing any kind of headwind in terms of utilization.

Speaker #7: Is that fair, or am I putting words in your mouth?

Speaker #2: No, I think that's fair. When we refer to our growth on the tissue side, particularly with GPS, I often reference two drivers of growth.

Michael McGarrity: No, I think that is fair. When we refer to our growth on the tissue side, particularly with GPS, I often reference two drivers of growth. One is market conversion. In other words, still, Bill, as you know, a significant part of that market opportunity is there for urologists that do not currently use biomarker testing in the active surveillance population and share. I think our growth trajectory over the past couple of years has been driven by both, and we expect that to continue. So it is kind of comparing to the two competitors in that space and how they report, it is a combination of are we taking share from them or are we converting the market? I think the ProMPT data today and the ProtecT data ultimately really help with both. But particularly on that conversion side, hopefully that holds together for you.

Speaker #2: One is market conversion. In other words, still, Bill, as you know, a significant part of that market opportunity is there for urologists that do not currently use biomarker testing in the active surveillance population.

Speaker #2: And share. I think our growth trajectory over the past couple of years has been driven by both. And we expect that to continue. So it's kind of two comparing to the two competitors in that space and how they report, it's a combination of are we taking share from them or are we converting the market?

Speaker #2: And I think the prompt data today and the protect data ultimately really help with both. But particularly on that conversion side, hopefully that holds together for you.

Speaker #2: But that's an important point that we see is the opportunity.

Michael McGarrity: That's an important point that we see as the opportunity.

Bill Bonello: That's super helpful. Then just one last one. Is it possible to give us any sense of what the liquid volume growth looked like on a pro forma basis so that we have some sense of what the underlying, because obviously a big boost from the acquisition, but so we have some sense of what the underlying growth is?

Speaker #7: That's super helpful. And then just one last one. Is it possible to give us any sense of what the liquid volume growth looked like on a pro forma basis, so that we have some sense of what the underlying growth is? Because obviously there was a big boost from the acquisition, but we'd like to understand what the underlying growth was.

Michael McGarrity: I'm not sure I. Yeah, go ahead.

Speaker #2: I'm not sure. Yeah, go ahead.

Speaker #3: Bill, I don't think we can because pro forma would be comparing exodus select, but we stopped selling select, so we can't really compare one to the other.

Ron Kalfus: Bill, I don't think we can because pro forma would be comparing ExoDx to Select mdx, but we stopped selling Select mdx, so we can't really compare one to the other. It's not like we're selling both.

Speaker #3: It's not like we're selling both entirely.

Bill Bonello: I was trying to think of Exo last year versus Exo this year.

Speaker #7: I was trying to think of exo last year versus exo this year.

Michael McGarrity: Oh, I see.

Speaker #2: Oh, I see. I see. Yeah. Yeah. I get it now. Yeah, we're not doing that. It wasn't our as-reported numbers, but we've seen—we're confident that we'll be continuing to drive growth into the Exo product line.

Bill Bonello: As opposed to this year.

Michael McGarrity: Yeah. I get it now. Yeah, we're not doing that. It wasn't our as reported numbers. We're confident that we'll be continuing to drive growth into the Exo product line, and really we're, again, with the integration, we're a couple quarters in. The majority of the Exo business that began to be covered by us was covered by legacy MDxHealth reps. We're confident that this is really the quarter where we begin to see that, and Q4 will be the first where we have actual year-over-year comps for a quarter on an Exo volume.

Speaker #2: And really, again, with the integration, we're a couple of quarters in. The majority of the Exo business that began to be covered by us was covered by legacy MDxHealth reps.

Speaker #2: And so we're confident that this is really the quarter where we begin to see that. And the Q4 will be the first where we have actual year-over-year comps for a quarter on exo volume.

Speaker #7: Okay. Thank you very much.

Bill Bonello: Okay. Thank you very much.

Speaker #2: Thank you, Bill.

Michael McGarrity: Thank you, Bill.

Operator 2: We will take our next question from Mark Massaro with BTIG US Bank. Your line is open.

Operator: We will take our next question from Mark Massaro with BTIG US Bank. Your line is open.

Speaker #1: We'll take our next question from Mark Massaro with BTIG U.S. Bank. Your line is open.

Speaker #4: Hey guys, thank you for taking the questions. Since we are in the month of August and we're tidying up our models, I was wondering if you could react to your confidence in perhaps growing 20% in 2027, and if you could just walk us through some of the puts and takes as to how you're thinking about the next full year.

Mark Massaro: Hey, guys. Thank you for taking the questions. Since we are in the month of August and we are tidying up our models, I was wondering if you could react to your confidence in perhaps growing 20% in 2027. If you could just walk us through some of the puts and takes as to how you are thinking about the next full year.

Speaker #2: Sure, Mark. Probably premature to provide visibility to guidance for 2027, but I get the question. We would expect we think that there's significant opportunity for growth with the exo business as we go forward.

Michael McGarrity: Sure, Mark. Probably premature to provide visibility to guidance for 2027, but I get the question. We would expect, we think that there's significant opportunity for growth with the ExoDx business as we go forward. On the tissue side, I'll provide more detail around our AI initiative there as well, which obviously would drive largely Genomic Prostate Score. We're very, very confident that that can and will begin to contribute in 2027. The third arm of that would be the ProMPT data in the active surveillance population. When you look at the data from that peer-reviewed publication, we expect it to mirror what will come out in the Landmark ProtecT. I think our urologists today are noting that. That coupled with the AI initiatives we have going, that we would expect to be supportive as we come out of this year and the next.

Speaker #2: And then on the tissue side, I'll provide more detail around our AI initiative there as well, which obviously would largely drive GPS. But we're very, very confident that that can and will begin to contribute in 2027.

Speaker #2: And then the third arm of that would be the prompt data in the active surveillance population when you look at the data from that peer-reviewed publication, we expected to mirror what will come out in the landmark protect.

Speaker #2: So I think our urologists today are noting that. That coupled with the AI initiatives we have going that we would expect to be supportive as we come out of this year and the next.

Speaker #2: We think we'll have a basis to provide a good growth trajectory for 2027 and beyond.

Michael McGarrity: We think we'll have a basis to provide good growth trajectory 2027 and beyond.

Speaker #4: That's super helpful. And congratulations on the raise. I guess, as Dan mentioned, you do have some puts and takes with the balance sheet.

Mark Massaro: That's super helpful. Congrats on the raise. I guess as Dan mentioned, you do have some puts and takes with the balance sheet. I wanted to get a sense for, in recent years, you've brought in some assets and now you've divested some assets. How are you thinking about the portfolio going forward? I know you're talking about some internal development. With the USD 20 million of cash coming in, how are you thinking about exploring potential tuck-ins? I know in the past you've been able to bolt on things at really rational and reasonable valuations. I'm just curious how you're thinking about the potential for inorganic growth from here.

Speaker #4: But I wanted to get a sense for, in recent years, you've brought in some assets and now you've divested some assets. How are you thinking about the portfolio going forward?

Speaker #4: I know you're talking about some internal development. With the $20 million of cash coming in, how are you thinking about exploring potential tuck-ins? I know in the past you've been able to bolt on things at really rational and reasonable valuations.

Speaker #4: So I'm just curious how you're thinking about the potential for inorganic growth from here.

Speaker #2: Yeah, I guess I would answer that two ways. One, per your previous question—and hopefully my answer—we're very positive and confident on our current market opportunity.

Michael McGarrity: Yeah, I guess I would answer that two ways. One, per your previous question and hopefully my answer, we're very positive and confident on our current market opportunity. We believe it can support our growth for the foreseeable future based on our initiatives, our discipline on the operating side, and our sales force execution. With that said, we're a growth company. I think I've shared with you and everybody that we run a growth strategy process here. We are always looking out. I would say that that's flipped significantly where, I think, and please take this the right way, it's not meant to be self-serving, but anybody who's looking for partner or opportunity or channel or infrastructure into the urology vertical, we're an obvious first stop. I want to be careful here.

Speaker #2: We believe it can support our growth for the foreseeable future, based on our initiatives and our discipline on the operating side, as well as in our sales force execution.

Speaker #2: But that said, we're a growth company. And I think I've shared with you and everybody that we run a growth strategy process here. We are always looking out. I would say that that's flipped significantly where I think—please take this the right way.

Speaker #2: It's not meant to be self-serving, but anybody who's looking for partner or opportunity or channel or infrastructure into the urology vertical, we're an obvious first stop.

Speaker #2: So I want to be careful here. I think you and I once discussed, don't get too far ahead with potential opportunities for growth, but we'll be very disciplined as we have in the past.

Michael McGarrity: I think you and I want to discuss, don't get too far ahead with potential opportunities for growth, but we'll be very disciplined as we have in the past. For right now, in the near term for sure, we are focused on execution of the opportunity we have in front of us in clearing what I said this Resolve development was probably a two to three quarter setback from our previous trajectory. We've got one quarter posted. We look forward to posting Q3 and Q4. Then I think 2027 and beyond comes more clear, and then we can revisit how we think about growth. But definitely opportunity is there. We just want to be disciplined.

Speaker #2: And for right now, in the near term for sure, we are focused on execution of the opportunity we have in front of us in clearing what I said, this resolve development was, was probably a two to three-quarter setback from our previous trajectory.

Speaker #2: We've got one quarter posted. We look forward to posting Q3 and Q4. And then I think 2027 and beyond becomes more clear, and then we can revisit how we think about growth.

Speaker #2: But definitely opportunities there. We just want to be disciplined.

Speaker #4: That makes perfect sense. If I can squeeze one more in, I wanted to ask: some of the other lab testing companies have seen benefits from revenue cycle management initiatives.

Mark Massaro: That makes perfect sense. If I can squeeze one more in, I wanted to ask, some of the other lab testing companies have seen benefits from revenue cycle management initiatives, collecting claims from prior periods. Other companies have been winning some additional commercial payer coverage and the like. I know there's a lot of focus on volume growth, but I just wanted to get a sense for, is there any juice to squeeze on the ASP side?

Speaker #4: Collecting claims from prior periods and other companies have been sort of winning some additional commercial payer coverage and the like. I know there's a lot of focus on volume growth, but I just wanted to get a sense for is there any juice to squeeze on the ASP side?

Speaker #2: Well, as I think you know, but just to be clear, our projections—the way we build our model—is based on our expectation of unit growth.

Michael McGarrity: Well, as I think you know, but just to be clear, our projections, the way we build our model is based on our expectation of unit growth. But we view our market access managed care team and our RCM team as productivity engines for the business as well. While I'm not guiding to pick up there, I think we've seen stability in our ASPs. I guess based on some of the dynamics in the reimbursement landscape across the industry, unrelated to Resolve, but just in general, we're confident that we've got good discipline there. Yeah, we consistently, the data helps, Mark, as you know.

Speaker #2: But we view our Market Access Managed Care team and our RCM team as productivity engines for the business as well. So while I'm not guiding to a pickup there, I think we've seen stability in our ASPs.

Speaker #2: And I guess for based on some of the dynamics in the reimbursement landscape across the industry, unrelated to resolve, but just in general, we're confident that we've got good discipline there.

Speaker #2: And yeah, I mean, we consistently—the data helps, Mark, as you know, right? So I think when you look at some of the initiatives that we have, even our AI initiatives, there’s some opportunity there from both the prompt protect as well as the way we’ll end up positioning our AI to support that aspect of our business, but nothing to project to right now.

Michael McGarrity: I think when you look at some of the initiatives that we have, even our AI initiatives, there's some opportunity there from both the ProMPT ProtecT as well as the way we'll end up positioning our AI to support that aspect of our business. But nothing to project to right now.

Speaker #4: That sounds good. Thanks for your time.

Mark Massaro: That sounds good. Thanks for the time.

Speaker #2: Thank you, Mark.

Michael McGarrity: Thank you, Mark.

Speaker #1: And once again, for your questions, that is star one. We'll move next to Matt LaRue with William Blair. Your line is open.

Operator 2: Once again, for your questions, that is star 1. We'll move next to Matt Larew with William Blair. Your line is open.

Operator: Once again, for your questions, that is star 1. We'll move next to Matt Larew with William Blair. Your line is open.

Speaker #5: Hi, good afternoon. Mike, you've referenced both last quarter and this quarter the notion sort of of blessing in disguise. And it's also last quarter, made quite a bit of progress on the EXO integration certainly the sequential improvement and revenue maybe is the obvious KPI that would be a mark of that.

Matt Larew: Hi, good afternoon. Mike, you've referenced both last quarter and this quarter the notion of a blessing in disguise. You've also last quarter made quite a bit of progress on the ExoDx integration. Certainly the sequential improvement in revenue maybe is the obvious KPI that would be a mark of that. Just curious in terms of other internal KPIs, whether it's sales force productivity, account touchpoints, utilization, anything else that you're seeing underneath the hood that suggests to you those things are moving in the right direction and perhaps that's what's giving you additional confidence on the ramp of the back half of the year?

Speaker #5: But just curious, in terms of other internal KPIs, whether it's Salesforce productivity, account touchpoints, utilization, anything else that you're seeing kind of underneath the hood that suggests to you those things are moving in the right direction and perhaps that's what's giving you additional confidence on the ramp of the back half of the year?

Speaker #2: Yeah, Matt, I think— I don't want to— I think there's nothing we don't metric and measure here with regard to the way our business builds our opportunity. And I don't want to disclose all those, but we look at everything from the way our physicians adopt our menu, with the goal of selling our full pathway solution.

Michael McGarrity: Yeah, Matt. I think there's nothing we don't metric and measure here with regard to the way our business builds our opportunity. I don't want to disclose all those, but we look at everything from the way our physicians adopt our menu with the goal of selling our full pathway solution to the way they adopt within a large group practice. In other words, you get a few of them to buy into our pathway in a reliable way where it's internally, we call it compliance to our pathway. The other component to it is what I noted in my prepared comments, which is the influence and impact of pathology, which really has made a difference. I'll just be brief here, but there's a couple features of GPS in particular that really resonate with pathology, right? It requires significantly less tissue than the two competing tests.

Speaker #2: To the way they adopt within a large lug puck in other words, you get a few of them to buy into our pathway in a reliable way where it's internally we call it compliance to our pathway.

Speaker #2: And then the other component to it is what I noted in my prepared comments, which is the influence and impact of pathology, which really has made a difference.

Speaker #2: There's I'll just be brief here, but there's a couple of features of GPS in particular that really resonate with pathology, right? It requires significantly less tissue than the two competing tests.

Speaker #2: And once pathology understands the value, it's clear that it's not about proving their pathology read was wrong—it's about the limitations of biopsy. So all those things work with what we track to say, yeah, we're getting pickup here.

Michael McGarrity: Once pathology understands the value of Confirm, that it's not proving their pathology read was wrong, it's the limitations of biopsy. So all those things work with what we track to say, "Yeah, we're getting pick up here. It's sustainable, it's sticky," and it helps actually create the model for our sales organization, our medical science liaison team. We have pathology supporting our resources that all work together to give us the data that suggests really helps us build our model and definitely our forecast as we go through this year.

Speaker #2: It's sustainable, it's sticky, and it actually helps create the model for our sales organization. Our Medical Science Liaison team, we have pathology supporting our resources, all work together to give us the data that really helps us build our model and definitely our forecast as we go through this year.

Speaker #5: Okay, thanks. And then just on Protect, just the way you described it today—the notion of clear visibility into that—I'm just wondering if there's anything that you're seeing that's giving you more confidence.

Matt Larew: Okay. Thanks, Aman. Just on ProtecT, just the way you described it today, the notion of clear visibility into that, just wondering if there's anything that you're seeing that's giving you more confidence. I think that is reading out early next year, but I guess maybe just confirm that's still the timeline, and what you anticipate the response might be from the physician community once you get that out there.

Speaker #5: And I think that is reading out early next year, but I guess maybe just confirm that that's still the timeline. And kind of what you anticipate the response might be from the physician committee once you get that out there.

Speaker #2: Yeah. So I think I've hesitated to give timelines there, but what I would say is we are in our clinical scientific affairs team works directly with Oxford.

Michael McGarrity: Yeah. I think I've hesitated to give timelines there, but what I would say is our clinical scientific affairs team works directly with Oxford. We have consistent regular updates with them. They're almost a project management team, coupled with our CSA and project management teams working in collaboration. So it gives us confidence every month that we're making progress there. It's difficult to handicap the timing of the readout. The secondary benefit would be the guideline work that we'll do on the other side of that. So based on our KOL network that group has established, our somewhat influencer reach into the NCCN, and the reputation and sway of Dr. Hamby and the Oxford team, that gives us our confidence. Each quarter I'll provide Matt better visibility as to how we think that comes planning-wise.

Speaker #2: I mean, we have consistent regular updates with them. They're almost a project management team coupled with our CSA and project management teams working in collaboration.

Speaker #2: So it gives us confidence every month that we're making progress there. It's difficult to handicap timing of the readout. And then the secondary benefit would be the guideline work that we'll do on the other side of that.

Speaker #2: So we're based on our KOL network that that group has established, our somewhat influence or reach into the NCCN, and the reputation and sway of Dr. Hamdi and the Oxford team.

Speaker #2: That gives us our confidence. Each quarter, I'll provide Matt better visibility as to how we think that comes timing-wise. But I think the last comment I'll make on that is that getting the prompt published in a peer-reviewed manner does provide a really good foundational view of, 'this is what we expected.'

Michael McGarrity: But I think the last comment I will make on that is that getting the ProMPT published in a peer-reviewed manner does provide really good foundational view of this is what we expected. This is what they somewhat mandated that we do the ProMPT first before they turn on the ProtecT cohort, which is the most valuable one in the world. In hindsight, that was the right thing to do because it gave us confidence, them confidence, that GPS was and is the right test to prove that out.

Speaker #2: This is what they somewhat mandated that we do the prompt first before they turned on the protect cohort, which is the most valuable one in the world.

Speaker #2: In hindsight, that was the right thing to do because it gave us confidence and I'm confident that GPS is was and is the right test to prove that up.

Speaker #5: Okay. Thank you.

Matt Larew: Okay. Thank you.

Speaker #2: Thank you, Matt.

Michael McGarrity: Thank you, Matt.

Speaker #1: And it does appear that there are no further questions at this time. Thank you. This brings us to the end of today's meeting. We appreciate your time and participation.

Operator 2: And it does appear that there are no further questions at this time. Thank you. This brings us to the end of today's meeting. We appreciate your time and participation, and you may now disconnect.

Operator: And it does appear that there are no further questions at this time. Thank you. This brings us to the end of today's meeting. We appreciate your time and participation, and you may now disconnect.