Q2 2026 Biodesix Inc Earnings Call

August 5, 2026

Operator: Good day, and thank you for standing by. Welcome to the Biodesix Q2 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentations, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Chris Brinzey. Please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press *11 on your telephone.

Operator: You will hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Chris Brinzey. Please go ahead.

Speaker #1: automated message advising that your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded.

Speaker #1: Today, Chris Brinzey. Please go ahead.

Speaker #2: Thank you, operator, and good afternoon, everyone. Today, Biodesix released results from the second 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 the Q2 2026. Leading the call today will be Scott Hutton, Chief Executive Officer. He's 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 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. 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 announcing 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.

Chris Brinzey: 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. In addition, we will discuss non-GAAP financial measures on this call.

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: Descriptions 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. I'm proud to share that the Biodesix team delivered another quarter of strong growth, expanding margins and improving the strength of our commercial strategy as we continue to progress toward profitability.

Scott Hutton: Thank you, Chris, and thank you all for joining today. I am proud to share that the Biodesix team delivered another quarter of strong growth, expanding margins, and improving operating leverage, reflecting the strength of our commercial strategy as we continue to progress towards profitability. In Q2, total revenue was $26.9 million, representing 34% growth year-over-year, accompanied by strong operating discipline and execution. Starting with our diagnostic testing business, revenue grew 42%, driven by accelerating test volume growth and improved ASPs over Q2 2025. Total test volumes grew 38% year-over-year due to increased adoption from both primary care and pulmonology, which grew 133% and 31% over the prior year, respectively.

Speaker #3: In the second quarter, total revenue was operating leverage, reflecting the $26.9 million. Representing 34% growth year over year, accompanied by strong operating discipline and execution.

Speaker #3: Starting with our diagnostic testing business, revenue grew 42%, driven by accelerating test volume growth and improved ASPs over the second quarter of 2025. Total test volumes grew 38% year over year, due to increased adoption from both primary care and pulmonology, which grew 133% and 31% over the prior year respectively.

Scott Hutton: Starting with our diagnostic testing business, revenue grew 42%, driven by accelerating test volume growth and improved ASPs over Q2 2025. Total test volumes grew 38% year-over-year due to increased adoption from both primary care and pulmonology, which grew 133% and 31% over the prior year, respectively.

Speaker #3: We're pleased with the growth from both primary care and pulmonology, not only from new physicians beginning to order the notify CDT and notify XL2 test, but from increases in the number of patients tested from existing accounts.

Scott Hutton: We're pleased with the growth from both primary care and pulmonology, not only from new physicians beginning to order the Nodify CDT and Nodify XL2 tests, but from increases in the number of patients tested from existing accounts. As a reminder, since Q2 of last year, we've been ramping our efforts in the primary care market to address the approximately 50% of nodules that are managed by general practitioners. We've seen strong demand for Nodify testing in patients with smaller lung nodules. This population carries an inherently low risk of malignancy, but early detection of cancers significantly improves patient outcomes. Demand accelerated through the quarter following publication in March of the largest lung nodule biomarker validation study to date, which demonstrated that Nodify CDT can detect cancer in nodules as small as 4 millimeters while maintaining a low false positive rate.

Speaker #3: As a reminder, since the second quarter of last year, we've been ramping our efforts in the primary care market to address the approximately 50% of nodules that are managed by general practitioners.

Speaker #3: We've seen strong demand for notify testing in patients with smaller lung nodules. This population carries an inherently low risk of malignancy. But early detection of cancers significantly improves patient outcomes.

Scott Hutton: We've seen strong demand for Nodify testing in patients with smaller lung nodules. This population carries an inherently low risk of malignancy, but early detection of cancers significantly improves patient outcomes.

Speaker #3: Demand accelerated through the quarter following publication in March of the largest lung nodule biomarker validation study to date. Which demonstrated that notify CDT can detect cancer in nodules as small as 4 millimeters, while maintaining a low false positive rate.

Scott Hutton: Demand accelerated through the quarter following publication in March of the largest lung nodule biomarker validation study to date, which demonstrated that Nodify CDT can detect cancer in nodules as small as 4 millimeters while maintaining a low false positive rate.

Speaker #3: This clinical evidence drove a significant increase in notify CDT orders in smaller nodules during the quarter. Importantly, adoption within this patient population is also expanding utilization across the broader lung nodule continuum.

Scott Hutton: This clinical evidence drove a significant increase in Nodify CDT orders in smaller nodules during the quarter. Importantly, adoption within this patient population is also expanding utilization across the broader lung nodule continuum. Healthcare professionals who begin ordering Nodify CDT for smaller nodules subsequently increase their use of both Nodify CDT and Nodify XL2 for patients with larger nodules. We are seeing this pattern consistently across customer segments, including both primary care and pulmonology. In addition to the publication at the end of Q1, we continue to present and publish clinical data for our on-market test. In May, at the American Thoracic Society, or ATS, annual meeting, real-world clinical and economic data was presented, including an independent study showing an increase in stage 1 lung cancer detection after the implementation of a lung nodule program using Nodify lung testing systematically to guide clinical decisions.

Speaker #3: Healthcare professionals who begin ordering Nodify CDT for smaller nodules subsequently increased their use of both Nodify CDT and Nodify XL2 for patients with larger nodules.

Speaker #3: We are seeing this pattern consistently across customer segments, including both primary care and pulmonology. In addition to the publication at the end of the first quarter, we continue to present and publish clinical data for our on-market test.

Scott Hutton: We are seeing this pattern consistently across customer segments, including both primary care and pulmonology. In addition to the publication at the end of Q1, we continue to present and publish clinical data for our on-market test.

Speaker #3: In May, at the American Thoracic Society, or ATS, annual meeting, real-world clinical and economic data was presented. Including an independent study showing an increase in stage 1 lung cancer detection after the implementation of a lung nodule program using notify lung testing systematically to guide clinical decisions.

Scott Hutton: In May, at the American Thoracic Society, or ATS, annual meeting, real-world clinical and economic data was presented, including an independent study showing an increase in stage 1 lung cancer detection after the implementation of a lung nodule program using Nodify lung testing systematically to guide clinical decisions.

Speaker #3: Two others highlighted the role of notify lung testing to overcome limitations with PET scans for nodule evaluation. The presentations at ATS continued to highlight the real-world clinical value and economic advantages of lung nodule management programs that use notify lung testing for risk stratification.

Scott Hutton: Two others highlighted the role of Nodify lung testing to overcome limitations with PET scans for nodule evaluation. The presentations at ATS continue to highlight the real-world clinical value and economic advantages of lung nodule management programs that use Nodify lung testing for risk stratification. This growing body of clinical evidence is driving deeper account penetration and increasing test utilization. The result is continued commercial expansion of the Nodify franchise and further validation of its role in addressing this significant unmet clinical need. As we are growing our top line, our team's ongoing operational focus continues to yield improvements in gross margin and operational leverage. We delivered our fifth consecutive quarter of gross margins at or above 80%. Our total revenue grew 34%, and operating expenses, excluding direct costs, only grew 7%, which included the expansion of our commercial team.

Speaker #3: This growing body of clinical evidence is driving deeper account penetration and increasing test utilization. The result is continued commercial expansion of the notify franchise and further validation of its role in addressing the significant unmet clinical need.

Scott Hutton: This growing body of clinical evidence is driving deeper account penetration and increasing test utilization. The result is continued commercial expansion of the Nodify franchise and further validation of its role in addressing this significant unmet clinical need.

Speaker #3: As we are growing our top line, our team's ongoing operational focus continues to yield improvements in gross margin and operational leverage. We delivered our fifth consecutive quarter of gross margins at or above 80%.

Scott Hutton: As we are growing our top line, our team's ongoing operational focus continues to yield improvements in gross margin and operational leverage. We delivered our fifth consecutive quarter of gross margins at or above 80%. Our total revenue grew 34%, and operating expenses, excluding direct costs, only grew 7%, which included the expansion of our commercial team. With that, let me now turn it over to Robin to review our financial performance. Robin?

Speaker #3: Our total revenue grew 34%, and operating expenses excluding direct costs only grew 7%, which included the expansion of our commercial team. With that, let me now turn it over to Robin to review our financial performance.

Scott Hutton: With that, let me now turn it over to Robin to review our financial performance. Robin?

Speaker #3: Robin?

Speaker #4: Thanks, Scott, and good afternoon, everyone. Total revenue for the second quarter was $26.9 million, representing a 34% increase over the prior year period. Diagnostic testing revenue was $25.4 million, an increase of 42% year over year.

Robin Harper Cowie: Thanks, Scott, and good afternoon, everyone. Total revenue for Q2 was $26.9 million, representing a 34% increase over the prior year period. Diagnostic testing revenue was $25.4 million, an increase of 42% year-over-year. The increase in diagnostic testing revenue was driven by growth in test volumes and higher average revenue per test. Test volumes were approximately 20,900, an increase of 38% year-over-year, supported by an average of 104 sales representatives in the field in the quarter. We plan to continue our commercial expansion and end the year with approximately 120 sales representatives in the field. Sales force productivity continues to improve across the entire sales organization, with newer representatives advancing along expected productivity curves while more tenured reps continue to expand their contribution.

Speaker #4: The increase in diagnostic testing revenue was driven by growth in test volumes and higher average revenue per test. Test volumes were approximately 20,900, an increase of 38% year over year, supported by an average of 104 sales representatives in the field in the quarter. We plan to continue our commercial expansion and end the year with approximately 120 sales representatives in the field.

Robin Harper Cowie: Test volumes were approximately 20,900, an increase of 38% year-over-year, supported by an average of 104 sales representatives in the field in the quarter. We plan to continue our commercial expansion and end the year with approximately 120 sales representatives in the field.,

Speaker #4: Salesforce productivity continues to improve across the entire sales organization, with newer representatives advancing along expected productivity curves, while more tenured reps continue to expand their contribution.

Robin Harper Cowie: Sales force productivity continues to improve across the entire sales organization, with newer representatives advancing along expected productivity curves while more tenured reps continue to expand their contribution.

Speaker #4: 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 rather than any one-time items.

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 rather than any one-time item. The difference in average revenue per test versus Q1 2026 was driven by the mix in test volumes between Nodify CDT and Nodify XL2, with average revenue per test for both Nodify XL2 and Nodify CDT improving over the prior quarter. Development services revenue for Q2 was $1.5 million as compared to $2.1 million in the prior year period, reflecting timing of project completion and revenue recognition. We currently have approximately $8.5 million in contracted business. The demand for our services remains strong. As we have discussed previously, the timing of development services project execution and revenue recognition can shift between quarters.

Speaker #4: The difference in average revenue per test versus the first quarter of 2026 was driven by the mix in test volumes between Notify CDT and Notify XL2, with average revenue per test for both Notify XL2 and Notify CDT improving over the prior quarter.

Speaker #4: Development services revenue for the second quarter was $1.5 million, as compared to $2.1 million in the prior year period, reflecting timing of project completion and revenue recognition.

Speaker #4: We currently have approximately $8.5 million in contracted business, and the demand for our services remains strong. As we've discussed previously, the timing of development services project execution and revenue recognition can shift between quarters.

Speaker #4: Gross margin for the second quarter was 82%, a 200 basis point improvement over the second quarter of 2025. Margin improvement and strength with group driven by growth in lung diagnostic testing improvements in average revenue per test versus the prior year, and decrease in average cost per test.

Robin Harper Cowie: Gross margin for Q2 was 82%, a 200 basis point improvement over Q2 2025. Margin improvement and strength was driven by growth in lung diagnostic testing, improvements in average revenue per test versus the prior year, and decrease in average cost per test. Operating expenses, excluding direct costs and expenses, were $27.4 million, an increase of 7% year-over-year, supporting a 34% revenue growth delivered during the quarter. The increase in operating expenses was driven by an 8% increase in sales, marketing, and general administrative expenses due to our planned commercial organization expansion, partially offset by a 4% decrease in research and development costs in the quarter. The company expects continued operating leverage as our expanded sales team advances along the productivity curve and converts growing experience into sustained performance, combined with our focus on operational leverage and efficiencies.

Speaker #4: Operating expenses excluding direct costs and expenses were $27.4 million, an increase of 7% year over year, supporting the 34% revenue growth delivered during the quarter.

Speaker #4: The increase in operating expenses was driven by an 8% increase in sales marketing and general administrative expenses due to our planned commercial organization expansion, partially offset by a 4% decrease in research and development costs in the quarter.

Speaker #4: The company expects continued operating leverage as our expanded sales team advances along the productivity curve and converts growing experience into sustained performance, combined with our focus on operational leverage and efficiencies.

Speaker #4: Net loss for the quarter was $7.3 million, a 37% improvement compared to the prior year period. Adjusted EBITDA, which excludes non-cash and other one-time items, was a loss of $3.2 million, representing a 56% improvement over the second quarter of 2025.

Robin Harper Cowie: Net loss for the quarter was $7.3 million, a 37% improvement compared to the prior year period. Adjusted EBITDA, which excludes non-cash and other one-time items, was a loss of $3.2 million, representing a 56% improvement over Q2 2025. We ended the quarter with $30 million in unrestricted cash and cash equivalents, a 17% increase compared to Q1, which included $6.5 million of at-the-market net proceeds raised during the quarter. Excluding the ATM proceeds, net cash used in the quarter was $2.1 million versus cash use of $6.9 million in Q2 2025, a 70% improvement over last year. We believe current cash, expected growth in revenue, and ongoing operational leverage provide sufficient liquidity to execute our growth strategy.

Speaker #4: We ended the quarter with $30 million in unrestricted cash and cash equivalents, a 17% increase compared to the first quarter, which included $6.5 million of at-the-market net proceeds raised during the quarter.

Speaker #4: Excluding the ATM proceeds, net cash used in the quarter was $2.1 million, versus cash use of $6.9 million in the second quarter of 2025—a 70% improvement over last year.

Speaker #4: We believe current cash, expected growth in revenue, and ongoing operational leverage provide sufficient liquidity to execute our growth strategy. Looking ahead to the remainder of 2026, in addition to our planned headcount expansion, we expect sales productivity to continue to improve as our sales team gain experience and tenure, and our team continues their cost discipline operational focus.

Robin Harper Cowie: Looking ahead to the remainder of 2026, in addition to our planned headcount expansion, we expect sales productivity to continue to improve as our sales team gain experience and tenure and our team continues their cost discipline operational focus. As a result, we expect continued progress towards sustained adjusted EBITDA profitability, and we remain confident maintaining our previously raised full-year revenue outlook of $108 million to $114 million. With that, I will turn it back to Scott for some closing thoughts before we begin the Q&A.

Speaker #4: As a result, we expect continued progress towards sustained adjusted EBITDA profitability, and we remain confident maintaining our previously raised full year revenue outlook of $108 million to $114 million.

Speaker #4: With that, I'll turn it back to Scott for some closing thoughts before we begin the Q&A.

Speaker #3: Thank you, Robin. Each year, August 1 marks World Lung Cancer Day. It is a day of importance for the Biodesix team to help raise awareness of the world's deadliest cancer.

Scott Hutton: Thank you, Robin. Each year, 1 August marks World Lung Cancer Day. It is a day of importance for the Biodesix team to help raise awareness of the world's deadliest cancer and to expand society's understanding of the prevention, early detection, and treatment of this terrible disease that kills almost as many people annually as breast, colon, and prostate cancers combined. With the broadest portfolio of tests targeting lung disease and the largest lung-focused commercial team, it is our mission to transform patient care and improve outcomes through personalized diagnostics. We see significant opportunities to impact many more patients as clinical adoption expands, as our additional clinical and economic evidence reinforces the value of Biodesix tests, and as 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: And to expand society's understanding of the prevention, early detection, and treatment of this terrible disease that kills almost as many people annually as breast, colon, and prostate cancers combined.

Speaker #3: With the broadest portfolio of tests targeting lung disease, and the largest lung-focused commercial team, it is our mission to transform patient care and improve outcomes through personalized diagnostics.

Speaker #3: We see significant opportunities to impact many more patients as clinical adoption expands, as our additional clinical and economic evidence reinforces the value of Biodesix tests, and as our commercial organization continues to mature.

Speaker #3: 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.

Scott Hutton: In closing, I want to thank the entire Biodesix team for their continued focus, discipline, and commitment to our mission and culture. Let us now move to questions. Operator, you may start the Q&A session.

Speaker #3: Let's now move to questions. Operator, you may start the Q&A session.

Speaker #2: Thank you. At this time, we will conduct the Q&A session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. At this time, we will conduct the Q&A session. As a reminder, to ask a question, you will need to press * one one on your telephone and wait for your name to be announced. To withdraw your question, please press * one one again. Please stand by while we compile the Q&A roster. Our first question today is from Kyle Mikson with Canaccord Genuity. Your line is open.

Speaker #2: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question today is from Kyle Mikeson with Canaccord Genuity.

Speaker #2: Your line is open.

Alex Vukasin: Hi, this is Alex Vukasin. I'm on for Kyle Mikson. Thank you for taking our questions, and congratulations again on the quarter. It was great to see continued strength in diagnostics. You noted a few different things here. You benefited from that recent publication supporting the utility of Nodify testing with small nodules and also healthcare professionals ordering Nodify CDT for small nodules, subsequently increasing their ordering of Nodify CDT and Nodify XL2 for larger nodules as well. My question here is, do you believe this could remain a relatively meaningful test volume growth driver in the near term and potentially medium term? Thanks.

Speaker #5: Hi, this is Alex DCason. I'm on for Kyle Mikeson. Thank you for taking our questions. And congratulations again on the quarter. So it was great to see continued strength in diagnostics just you noted a few different things here.

Speaker #5: So you benefited from that recent publication supporting the utility of modified testing with small nodules and also healthcare professionals ordering modified CDT for small nodules subsequently increasing their ordering of modified CDT and XL2 for larger nodules as well.

Alex Vukasin: You benefited from that recent publication supporting the utility of Nodify testing with small nodules and also healthcare professionals ordering Nodify CDT for small nodules, subsequently increasing their ordering of Nodify CDT and Nodify XL2 for larger nodules as well. My question here is, do you believe this could remain a relatively meaningful test volume growth driver in the near term and potentially medium term? Thanks.

Speaker #5: So my question here is, do you believe this could remain a relatively meaningful test volume growth driver in the near term and potentially medium term?

Speaker #5: Thanks.

Speaker #3: Hi, Alex. Great question. Yes, we do. We think post-publication, what we've seen here is kind of the new trend and trajectory. The one thing that we know is that early detection and diagnosis matters.

Scott Hutton: Hi, Alex. Great question. Yes, we do. We think post-publication, what we've seen here is kind of the new trend and trajectory. The one thing that we know is that early detection and diagnosis matters. That was where that interest in the smaller nodules really originated. We've seen great traction both for new customers and existing customers in adopting both.

Speaker #3: That was where that interest in the smaller nodules really originated. And we've seen great traction both for new customers and existing customers in adopting both.

Speaker #5: Thank you. And one more from me. So, we're seeing some signs of recovery in biopharma and biotech. Has this translated to additional contracted revenue and new deal flow coming in for you?

Alex Vukasin: Thank you. One more from me. We're seeing some signs of recovery in biopharma and biotech. Has this translated to additional contracted revenue and new deal flow coming in for you? Thanks.

Speaker #5: Thanks.

Speaker #3: Yeah, great question, Alex. ASCO is really the largest meeting where you have an opportunity to sit with the major pharmaceutical companies. We noted that we had a strong ASCO this year.

Scott Hutton: Yeah, great question, Alex. ASCO is really the largest meeting where you have an opportunity to sit with the major pharmaceutical companies. We noted that we had a strong ASCO this year. We've continued to see great interest. As the team continues to formalize those agreements and sign those agreements, we'll give updates, but we feel confident that that pipeline will continue to be robust for quite some time.

Speaker #3: And we've continued to see great interest. As the team continues to formalize those agreements and sign those agreements, we'll give updates. But we feel confident that that pipeline will continue to be robust for quite some time.

Alex Vukasin: Got it. Thank you. One last one from me. You noted there was cost improvement during the quarter. Could you just elaborate on it a bit? Are these efforts largely ongoing and we could see continued meaningful improvement, or has the lion's share of the benefits already kind of been realized there? Thanks.

Speaker #5: Got it. Thank you. And one last one from me. So you noted there was cause improvement during the quarter. Could you just elaborate on that a bit?

Speaker #5: Are these efforts largely ongoing? I mean, you could see continued meeting for improvement, or has the line share of the benefits already kind of been realized there?

Speaker #5: Thanks.

Speaker #4: Yeah, great question. Thank you. We are constantly working on operational improvements, trying to increase our efficiency and efficacy. But with gross margins already above 80%, it's hard to drive it too much higher.

Robin Harper Cowie: Yeah, great question. Thank you. We are constantly working on operational improvements

Robin Harper Cowie: Trying to increase our efficiency and efficacy. With gross margins already above 80%, it's hard to drive it too much higher. We are continuously working to strengthen our already best-in-class margins. I don't expect huge increases, which is why we were reiterating margin guides right around 80 or just above 80.

Speaker #4: But we are continuously working to strengthen our already best-in-class margins, so I don't expect huge increases. Which is why we were reiterating the margin guide right around 80, or just above 80.

Speaker #5: Thank you very much.

Alex Vukasin: Thank you very much.

Speaker #2: Thank you. Our next question is from Thomas Flaten with Lake Street Capital Markets. Your line is open.

Operator: Thank you. Our next question is from Thomas Flaten with Lake Street Capital Markets. Your line is open.

Speaker #6: Good afternoon, guys. Congrats on that great quarter. Just on the sales team dynamics—you added maybe a couple of heads fewer than I was expecting, but it seems like you're going to ramp hiring in the second half of the year.

Thomas Flaten: Good afternoon, guys. Congrats on that great quarter. On the sales team dynamics, you guys added maybe a couple of heads fewer than I was expecting, but it seems like you're going to ramp hiring in the H2 of the year. Can you just walk us through some of those dynamics, including how you're splitting it between pulmonology and PCP?

Speaker #6: Can you just walk us through some of those dynamics, including how you're splitting it between pulmonology and PCP?

Speaker #3: Yeah, great question, Thomas. You're spot on. We're approximately too short of maybe what you would have modeled most of that is just timing. As you know, when we share total rep count, it really is based upon them being hired, completing their training, and being actively in the field and positively contributing.

Scott Hutton: Yeah. Great question, Thomas. You're spot on. We're approximately two short of maybe what you would've modeled. Most of that is just timing. As you know, when we share total rep count, it really is based upon them being hired, completing their training, and being actively in the field and positively contributing. We're continuously recruiting and bringing on the best team members that we possibly can. We haven't given great clarity on the split between primary care and pulmonology-focused sales reps to date because we're going to hire opportunistically. Again, some of that is based upon the progress we make in pulmonology, and then those pulmonologists subsequently introducing Nodify Testing into their referral network and those primary care physicians. As that scales, then opportunistically, we'll bring in somebody to support the primary care call point.

Speaker #3: So we're continuously recruiting and bringing on the best team members that we possibly can. We haven't given great clarity on the split between primary care and pulmonology-focused sales reps to date.

Speaker #3: Because we're going to hire opportunistically. And again, some of that is based upon the progress we make in pulmonology, and then those pulmonologists subsequently introducing Nodify testing into their referral network.

Speaker #3: And those primary care physicians. So, as that scales, then opportunistically we'll bring in somebody to support the primary care call point. To date this year, the majority of those new hires have been primary care-focused.

Scott Hutton: To date this year, the majority of those new hires have been primary care focused.

Thomas Flaten: Got it. Looking ahead to the balance of the year, anything we should be expecting relative to more publications and then importantly, any news from the development pipeline?

Speaker #5: Got it. And then looking ahead, to the balance of the year, anything we should be expecting relative to more publications and then importantly, any news from the development pipeline?

Speaker #3: Yeah, great question. We're always focused on data development. We think that's critically important as we continue to build this market. We have a number of papers that we have submitted and so until they're actually accepted and published, we can't really share much on that.

Scott Hutton: Yeah, great question. We're always focused on data development. We think that's critically important as we continue to build this market. We have a number of papers that we have submitted, and so until they're actually accepted and published, we can't really share much on that. We'll be giving news there. The CHEST meeting, which is the annual American College of Chest Physicians society meeting, occurs every year at the end of October, beginning of November. We usually target that for posters, presentations, and publications also. More to come as we receive notice on those publications and presentations. You definitely should be expecting more. We're very excited about our clinical efforts. Last year, we really highlighted the progress we'd made with CLARIFY. Couple of things have been submitted out of CLARIFY, so we're eager to start sharing that data. More to come there.

Speaker #3: So we'll be giving news there. The CHEST meeting, which is the annual American College of Chest Physicians Society meeting, occurs every year at the end of October, beginning of November.

Speaker #3: We usually target that for posters, presentations, and publications also. So more to come. As we receive notice on those publications and presentations, but you definitely should be expecting more.

Speaker #3: We're very excited about our clinical efforts. Last year, we really highlighted the progress we'd made with Clarify. A couple of things have been submitted out of Clarify, so we're eager to start sharing that data.

Speaker #3: But more to come there. On the R&D side, you may recall last year, around the AMP meeting, we did a development partner and R&D update.

Scott Hutton: On the R&D side, you may recall last year around the AMP meeting, we did a development partner and R&D update. We plan on doing another one of those this year, so in the November timeframe. We're eager to share some of the progress we've made. We think that we've made meaningful progress that'll positively impact that pipeline and future revenue streams in years to come.

Speaker #3: We plan on doing another one of those this year, so in the November timeframe, and we're eager to share some of the progress we've made.

Speaker #3: We think that we've made meaningful progress that'll positively impact that pipeline and future revenue streams and years to come.

Speaker #5: And if you could just help me Scott or Robin with some quick math. I know you said that PCP volumes grew 133%, but approximately what percent of your total testing volume now comes from PCP?

Thomas Flaten: If you could just help me, Scott or Robin, with some quick math. I know you said that PCP volumes grew 133%. Approximately what percent of your total testing volume now comes from PCP? I think it was 15% last Q.

Speaker #5: I think it was 15% last quarter.

Speaker #4: Yeah, it's very consistent with last quarter. Right around that 15%.

Robin Harper Cowie: Yeah, it's very consistent with last Q, right around that 15%.

Speaker #5: Excellent. Excellent. Appreciate that. Thanks, guys.

Thomas Flaten: Excellent. Appreciate that. Thanks, guys.

Speaker #3: Thanks, Thomas.

Scott Hutton: Thanks, Thomas.

Speaker #2: Thank you. Our next question is from William Benello with Craig Holland Capital Group. Your line is open.

Operator: Thank you. Our next question is from William Bonello with Craig-Hallum Capital Group. Your line is open.

Speaker #7: Hey, guys. Thanks for taking my call here. So it's been your strategy we should seem really prudent to us and the market seems to be appreciating to grow at sort of a responsible pace, I think, is probably how you'd describe it, Scott.

William Bonello: Hey, guys. Thanks for taking my call here. It's been your strategy, which it's seemed really prudent to us and the market seems to be appreciating to grow at sort of a responsible pace, I think is probably how you'd describe it, Scott. Being sure that you're able to drive leverage from your top-line growth, not getting out too far over your skis. I'm just wondering if your opinion on that changes at all in light of a couple of things. One, the really positive response that you are seeing from the paper that was published in the spring, and two, the response that you're seeing from your PCP efforts.

Speaker #7: And being sure that you're able to drive leverage from your top-line growth, not getting out too far over your skis. I'm just wondering if your opinion on that changes at all in light of a couple of things.

Speaker #7: One, the really positive response that you are seeing from the paper that was published in the spring, and two, the response that you're seeing from your PCP efforts.

Speaker #3: Yeah, Bill, it's a great question. We continually assess what it may look like to opportunistically expand the sales force more rapidly. But you nailed it.

Scott Hutton: Yeah, Bill, it's a great question. We continually assess what it may look like to opportunistically expand the sales force more rapidly. You nailed it. We're very cost-conscious. We're mindful of where we are on that path to profitability. We think that's critically important and have noted that there's not an abundance of diagnostic companies that have gotten to profitability and then stayed there. We think that's important not only for investors and shareholders, but also our team. Yeah, we're going to continue to be mindful about when and where we spend money. We want to ensure that we've got great line of sight to an immediate return on that investment. We'll maintain that six to eight hiring cadence per quarter, and currently estimating that we'll end the year right around 120 sales professionals.

Speaker #3: We're very cost-conscious. We're mindful of where we are on that path to profitability. We think that's critically important. And I've noted that there's not an abundance of diagnostic companies that have gotten to profitability and then stayed there.

Speaker #3: We think that's important not only for investors and shareholders, but also our team. So yeah, we're going to continue to be mindful about when and where we spend money.

Speaker #3: We want to ensure that we've got great line of sight to an immediate return on that investment. And so we'll maintain that six to eight hiring cadence per quarter.

Speaker #3: And currently estimating that we'll end the year right around 120 sales professionals.

Speaker #7: Okay, that's really helpful. And then you probably tired of getting this question every year, but as long as around the corner, any updated thoughts on activity around guidelines?

William Bonello: Okay, that's really helpful. You're probably tired of getting this question every year, but as Lung is around the corner, any updated thoughts on activity around guidelines?

Speaker #3: Yeah, Bill, it's a really good question. We never get tired of that question because we think it's important that we talk about it. For those that may not understand what Bill was referencing, the ACCP or the American College of Chest Physicians have not updated their relevant guidelines in over 12 years.

Scott Hutton: Yeah, Bill, it's a really good question. We never get tired of that question because we think it's important that we talk about it. For those that may not understand what Bill was referencing, the ACCP, or the American College of Chest Physicians, have not updated their relevant guidelines in over 12 years. As we all know, there have been significant advances in almost all avenues of healthcare and medicine. There is not currently any reference to blood-based biomarkers, we feel that we've built a really strong data package. We think it's compelling. We'll continue to publish, present that data in hopes that when they update, that we have a favorable response. CHEST went on record two years ago, they acknowledged they were behind. They stated that they had assigned a team to update those.

Speaker #3: And so, as we all know, there have been significant advances in almost all avenues of healthcare and medicine. So, there is not currently any reference to blood-based biomarkers.

Speaker #3: And so we feel that we've built a really strong data package. We think it's compelling. And so we'll continue to publish, present that data, in hopes that when they update, that we have a favorable response. Just went on record two years ago, and they acknowledged they were behind.

Speaker #3: They stated that they had assigned a team to update those. The last CHEST meeting passed and they said that they had moved their target to updating those guidelines this year, being 2026.

Scott Hutton: The last CHEST meeting passed, they said that they had moved their target to updating those guidelines this year, being 2026. To your point, Bill, as we head into October, and we all fly to Phoenix this year for that meeting, we'll be eager to see what updates they provide.

Speaker #3: So, to your point, Bill, as we head into October and all fly to Phoenix this year for that meeting, we'll be eager to see what updates they provide.

Speaker #7: Okay. Thanks. And then just one last one that's sort of a two-parter, but the PCP test growth is obviously really strong. Just curious, sort of what you're seeing on the PCP front, how that growth is kind of breaking out between adding new providers, and providers ordering more tests, and then along with that, I know you'd been doing some of these kind of special seminars around nodule clinics and management programs and whatnot.

William Bonello: Okay. Thanks. Just one last one that's sort of a two-parter, the PCP test growth is obviously really strong. Just curious what you're seeing on the PCP front, how that growth is kind of breaking out between adding new providers and providers ordering more tests. Along with that, I know you'd been doing some of these kind of special seminars around nodule clinics and management programs and whatnot, I'm just wondering if those are continuing to happen and how they're going.

Speaker #7: And I'm just wondering if those are continuing to happen and how they're going.

Speaker #3: Yeah, Bill, we see strong momentum in growth kind of in new ordering physicians in primary care. And then those that began ordering a few months ago, we see them continue to increase and improve.

Scott Hutton: Yeah, Bill, we see strong momentum in growth, kind of in new ordering physicians in primary care, and then those that began ordering a few months ago, we see them continue to increase and improve. It's a nice balanced approach across both. You highlighted it, we've got first-mover status. We take that both as a privilege and an honor that we're out there educating, training, and building this market. We highlighted the lack of updates to the guidelines. We also have noted that pulmonologists don't have a long track record with biomarkers. What you're referencing is educational events that we may sponsor or host. Our whole goal there is to put physicians in front of physicians so that there's peer-to-peer experience sharing, knowledge sharing, and we think that that's the responsible way to help build this market, and we'll continue to do so.

Speaker #3: So it's a nice balanced approach across both. And you highlighted it. We've got first mover status. We take that both as a privilege and an honor that we're out there educating, training, and building this market.

Speaker #3: We highlighted the lack of updates to the guidelines. We also have noted that pulmonologists don't have a long track record with biomarkers. And so what you're referencing is educational events that we may sponsor or host.

Speaker #3: Our whole goal there is to put physicians in front of physicians so that there's peer-to-peer experience sharing, knowledge sharing, and we think that that's a responsible way to help build this market.

Speaker #3: And we'll continue to do so. When we do those programs, we definitely see a number of physicians leave that having a better understanding of how nodule management tools like Notify Lung can help positively impact early detection and diagnosis.

Scott Hutton: When we do those programs, we definitely see a number of physicians leave that having a better understanding of how nodule management tools like Nodify Lung can help positively impact early detection and diagnosis, hopefully increasing the likelihood of an earlier diagnosis, which we know leads to a higher likelihood of a positive outcome.

Speaker #3: Hopefully, increasing the likelihood of an earlier diagnosis—which we know leads to a higher likelihood of a positive outcome.

Speaker #7: Excellent. Thanks a lot.

William Bonello: Excellent. Thanks a lot.

Speaker #3: Thanks, Bill.

Scott Hutton: Thanks, Bill.

Speaker #1: Thank you very much. Our next question is from Max Masucci with Ross Capital Partners, excuse me. Your line is open.

Operator: Thank you very much. Our next question is from Max Masucci with Roth Capital Partners. Your line is open.

Max Masucci: Hi, good afternoon. Nice quarter. Great to see the momentum in the core business. H1, 38% year-over-year growth in revenue. If you look at the full year range, it implies H2 growth like around 16% at the midpoint, 22% at the high end. I know you're comping up against a much stronger H2, but it would be great to understand just about the approach you're taking with guidance, just as you really try to balance what appears to be a nice multi-year growth acceleration with continuing to set achievable targets. More simply, what has to go right to land above the implied range in the H2?

Speaker #5: Hi, good afternoon. Nice quarter. Great to see the momentum in the core business. So first half, 38% year over year growth in revenue. If you look at the full year range, it implies second half growth like around 16% at the midpoint, 22% at the high end.

Speaker #5: So, I know you're coming up against a much stronger second half, but it would be great to understand the approach you're taking with guidance, as you really try to balance what appears to be a nice multi-year growth acceleration with continuing to set achievable targets.

Speaker #5: So more simply, what has to go right to land above the implied range in the second half?

Speaker #3: Yeah, thanks, Max. Our outlook is based on continued growth of our commercial team, an improved sales rep productivity, especially those hired in the second half of 2025 as they gain tenure and experience in the field.

Scott Hutton: Thanks, Max. Our outlook is based on continued growth of our commercial team and improved sales rep productivity, especially those hired in the H2 of 2025 as they gain tenure and experience in the field. We want to demonstrate continued ASP stability from payers, and we fully expect that. The anticipated volume growth across both pulmonology and primary care. We've already referenced that there will be new evidence generation. We'll continue to share that. We think these factors are in our control. They're repeatable and sustainable in 2026, we're excited to go out and demonstrate that. The one thing that we have seen over time is that biopharma services, those partnerships, that there can be a seasonality and a lumpiness to those. We want to be mindful of setting ourselves up for success.

Speaker #3: We want to demonstrate continued ASP stability from payers. And we fully expect that. And the anticipated volume growth across both pulmonology and primary care.

Speaker #3: We've already referenced that there will be new evidence generation. We'll continue to share that. We think these factors are in our control. They're repeatable and sustainable in 2026.

Speaker #3: And we're excited to go out and demonstrate that. The one thing that we have seen over time is that that biopharma services, those partnerships that there can be a seasonality and a lumpiness to those.

Speaker #3: And we want to be mindful of setting ourselves up for success.

Speaker #2: And Max, you're exactly right. The comps there's a pretty strong step up in the second half of 2025. So the comps get a little bit closer decreasing that year over year estimated growth.

Robin Harper Cowie: Max, you're exactly right. The comps, there's a pretty strong step-up in the H2 of 2025, the comps get a little bit closer, decreasing that year-over-year estimated growth. Just as a reminder, we did have about $1 million from back pay collections in that time period as well. If you extract that, the year-over-year growth looks a little closer to the H1.

Speaker #2: And just as a reminder, we did have about a million dollars from back pay collections in that time period as well. So if you extract that, then the year over year growth looks a little closer to the first half.

Speaker #5: Yep, that absolutely makes sense. So, second one—I mean, fourth straight quarter of accelerating test volume growth, also very strong sequential growth off of Q1.

Max Masucci: That absolutely makes sense. Second one, Q4 straight quarter of accelerating test volume growth. Also, very strong sequential growth off of Q1, a bit above the normal Q2 step-up that we see. Just curious, how much of the growth acceleration can be attributed to the expanded PCP targeting, versus other factors like rising productivity across the broader sales force? Final one, just any catch-up in Q2 from the weather disruption last quarter?

Speaker #5: You have a bit above the normal Q2 step up that we see. So just curious, how much of the growth acceleration can be attributed to the expanded PCP targeting versus other factors like rising productivity, across the broader sales force?

Speaker #5: And then final one, just any catch-up from in Q2 from the weather disruption last quarter?

Speaker #3: Yeah, great question. Maybe it'll take that in reverse order. We highlighted last quarter that we did not see a significant or material weather impact.

Scott Hutton: Yeah. Great question. Maybe I'll take that in reverse order. We highlighted last quarter that we did not see a significant or material weather impact. We saw minor impacts, but over time, for us, with our really rapid turnaround times, we track the traceability of those orders coming in, and we haven't seen an impact. We had a strong quarter last quarter on that front, and we hope to continue to do so. Robin, anything you would add on that?

Speaker #3: We saw minor impacts, but over time, for us, with our really rapid turnaround times, we track that the traceability of those orders coming in, and we haven't seen an impact.

Speaker #3: So we had a strong quarter last quarter on that front. And we hope to continue to do so. Robin, anything you would add on that?

Speaker #2: Yeah, I think the timing of the weather in the first quarter was middle of the quarter. So such that we had time to catch up interquarter.

Robin Harper Cowie: Yeah, I think, the timing of the weather in Q1 was middle of the quarter, such that we had time to catch up inter-quarter. That was good. We didn't have anything roll into the next one.

Speaker #2: So that was good. We didn't have anything roll into the next one.

Speaker #5: Got it. That's it for me. Thanks.

Max Masucci: Got it. That's it for me. Thanks.

Speaker #3: Thanks, Max.

Scott Hutton: Thanks, Max.

Speaker #1: Thank you. Our next question comes from Ye Chen with HC Winright & Company. Your line is open.

Operator: Thank you. Our next question comes from Yi Chen with H.C. Wainwright & Co. Your line is open.

Speaker #6: Thank you for taking my questions. So with operating expenses increasing just 7%, how are you balancing the accelerated commercial investment and also the pipeline development against the objective of sustained profitability?

Yi Chen: Thank you for taking my questions. With operating expenses increasing just 7%, how are you balancing the accelerated commercial investment and also the pipeline development against the objective of sustained profitability? What level of expense growth is embedded in H2 of this year?

Speaker #6: And what level of expense growth is embedded in the second half of this year?

Speaker #2: Thank you for your question. We are very pleased with the leverage we're gaining with we've built a strong infrastructure and team internally here that can help support that accelerating revenue growth without having to grow our expenses at the same level.

Robin Harper Cowie: Thank you for your question. We're very pleased with the leverage we're gaining. We've built a strong infrastructure and team internally here that can help support that accelerating revenue growth without having to grow our expenses at the same level. Our number one priority is growing top-line revenue. Our number two priority is getting to profitability, as you mentioned. We are very focused on maintaining expenses and growing the internal infrastructure only as needed. We anticipate that we'll see pretty steady operating expense from where we are now across the rest of the year, with moderate step-ups due to the increase in the commercial team.

Speaker #2: Our number one priority is growing top-line revenue. Our number two priority is getting to profitability, as you mentioned. So, we are very, very focused on maintaining expenses and growing the internal infrastructure only as needed.

Speaker #2: We anticipate that we'll see pretty steady operating expenses from where we are now across the rest of the year, with moderate step-ups due to the increase in the commercial team.

Speaker #2: And we're working diligently with our partners in a cost-effective manner to advance our pipeline products without having to do massive investments to get the data that you've been seeing over the last couple of quarters.

Robin Harper Cowie: We're working diligently with our partners in a cost-effective manner to advance our pipeline products without having to do massive investments to get the data that you've been seeing over the last couple of quarters on those pipeline products and to keep advancing that towards commercialization.

Speaker #2: On those pipeline products and to keep advancing that towards commercialization.

Yi Chen: Got it. Thank you.

Speaker #6: Got it. Thank you.

Speaker #3: Thank you, Lee.

Scott Hutton: Thank you, Yi.

Speaker #1: Thank you. I am showing no further questions at this time. Thank you for your participation. And today's conference, this does conclude the program. You may now disconnect.

Operator: Thank you. I am showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Q2 2026 Biodesix Inc Earnings Call

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