Q3 2026 NeoGenomics Inc Earnings Call

October 28, 2026

Operator: Good afternoon, and welcome to the NeoGenomics Q3 2026 financial results conference call. Please be advised that today's conference is being recorded. I will now turn the call over to Andrew Brackmann, Vice President of Investor Relations.

Speaker #1: Good afternoon, and welcome to the NeoGenomics Q3 2026 financial results conference call. Please be advised that today's conference is being recorded. I will now turn the call over to Andrew Brackman, Vice President of Investor Relations.

Andrew Brackmann: Thank you, Sylvie, and good afternoon, everyone. Representing NeoGenomics here today are Tony Zook, Chief Executive Officer, Warren Stone, President and Chief Operating Officer, and Abhishek Jain, Chief Financial Officer. This call is being simultaneously webcast and a recording will be available following the conclusion at ir@neogenomics.com. During this call, we will make forward-looking statements regarding our future financial and business performance, our planned leadership transition, planned future operations and related expectations with respect to timing and performance, future financial position, future revenues, growth potential and expected growth drivers, projected costs and capital expenditures, prospects and plans, estimates of market size and position, the implementation of our new revenue cycle management platform and its anticipated benefits and effects on the timing of our collections, objectives of management and financial guidance.

Speaker #2: Thank you, Sylvie, and good afternoon, everyone. Representing NeoGenomics here today are Tony Zuck, Chief Executive Officer; Warren Stone, President and Chief Operating Officer; and Abhishek K. Jain, Chief Financial Officer.

Speaker #2: This call is being simultaneously webcast, and a recording will be available following its conclusion at ir@neogenomics.com. During this call, we will make forward-looking statements regarding our future financial and business performance, our planned leadership transition, planned future operations and related expectations with respect to timing and performance, future financial position, future revenues, growth potential and expected growth drivers, projected costs and capital expenditures, prospects and plans, estimates of market size and position, the implementation of our new revenue cycle management platform and its anticipated benefits and effects on the timing of our collections, objectives of management, and financial guidance.

Andrew Brackmann: We caution you that the actual events or results could differ materially from those expressed or implied by the forward-looking statements. These forward-looking statements made during the call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Please refer to the information disclosed on the safe harbor statement slide in the deck posted on our website, as well as the information under the heading Risk Factors in our annual report on Form 10-K, and our subsequent quarterly results on Form 10-Q, and current reports on Form 8-K filed with the SEC to identify important risks and other factors that may cause our actual results to differ materially from the forward-looking statements. These documents can be found in the investors section of our website or on the SEC's website.

Speaker #2: We caution you that the actual events or results could differ materially from those expressed or implied by the forward-looking statements. These forward-looking statements made during the call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements.

Speaker #2: Please refer to the information disclosed on the Safe Harbor Statements slide in the deck posted on our website, as well as the information under the heading "Risk Factors" in our annual report on Form 10-K, and our subsequent quarterly results on Form 10-Q and current reports on Form 8-K filed with the SEC, to identify important risks and other factors that may cause our actual results to differ materially from the forward-looking statements.

Speaker #2: These documents can be found in the Investor section of our website, or on the SEC's website. During this call, we will also refer to certain non-GAAP financial measures that involve adjustments to our GAAP results.

Andrew Brackmann: During this call, we will also refer to certain non-GAAP financial measures that involve adjustments to our GAAP results. The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity, and are unlikely to be comparable to the non-GAAP financial measures provided by other companies. Any non-GAAP financial measure referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available in the press release we issued earlier today, and in the slide deck available in the investors section of our website. I will now turn the call over to Tony.

Speaker #2: The non-GAAP financial measures presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity, and are unlikely to be comparable to the non-GAAP financial measures provided by other companies.

Speaker #2: Any non-GAAP financial measure referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available in the press release we issued earlier today, and in the slide deck available in the Investor section of our website.

Speaker #2: I will now turn the call over to Tony.

Tony Zook: Thank you, Andrew, and good afternoon, everyone. We are excited to report another strong quarter, which shows we have the right strategy in place, the right team to execute it, and we are delivering consistent results because of this. Our business is continuing to gain momentum and our Q3 results show it. Clinical revenue grew 13% year-over-year. NGS revenue grew a strong 29%, and our adjusted gross margins expanded by over 300 basis points. All of which allow for us to increase both total revenue and adjusted EBITDA guidance for the year. We made a lot of progress on key initiatives this quarter and are well-positioned to deliver a strong finish to 2026 and a continuation of these trends into 2027. Before I walk through the quarter highlights in more detail, I want to acknowledge that this will be my last earnings call as CEO of NeoGenomics.

Speaker #3: Thank you, Andrew. And good afternoon, everyone. We're excited to report another strong quarter, which shows we have the right strategy in place, the right team to execute it, and we're delivering consistent results because of this.

Speaker #3: Our business is continuing to gain momentum, and our third quarter results show it. Clinical revenue grew 13% year over year, NGS revenue grew a strong 29%, and our adjusted gross margins expanded by over 300 basis points.

Speaker #3: All of which allow us to increase both total revenue and adjusted EBITDA guidance for the year. We made a lot of progress on key initiatives this quarter and are well positioned to deliver a strong finish to 2026 and a continuation of these trends into 2027.

Speaker #3: Before I walk through the quarter highlights in more detail, I want to acknowledge that this will be my last earnings call as CEO of Neogenomics.

Tony Zook: As we announced earlier this month, effective 4 January 2027, Warren Stone, our current President and Chief Operating Officer, will become Chief Executive Officer of NeoGenomics and join our board. I will support his transition and remain actively involved as our new Executive Chair. We shared three messages at the time of transition announcement that I want to reinforce. First, these roles cement our leadership team well into the future. Warren, Abhishek, and the broader leadership team in place have helped drive our recent progress and will continue to do so. Second, this change comes from a position of strength. Succession is best done when the business is performing at or above expectations, which is exactly where we are. Warren has earned this promotion and I am confident that he is the best person to lead NeoGenomics well into the future.

Speaker #3: As we announced earlier this month, effective January 4, 2027, Warren Stone, our current President and Chief Operating Officer, will become Chief Executive Officer of Neogenomics and join our board.

Speaker #3: I'll support his transition and remain actively involved as our new Executive Chair. We shared three messages at the time of the transition announcement that I want to reinforce.

Speaker #3: First, these roles cement our leadership team well into the future. Warren, Abhishek, and the broader leadership team in place have helped drive our recent progress and will continue to do so.

Speaker #3: Second, this change comes from a position of strength. Succession is best done when the business is performing at or above expectations, which is exactly where we are.

Speaker #3: Warren has earned this promotion, and I'm confident that he's the best person to lead NeoGenomics well into the future. Finally, with our strategy firmly in place and not changing, now is the time to accelerate execution and advancement of that strategy.

Tony Zook: Finally, with our strategy firmly in place and not changing, now is the time to accelerate execution and advancement of that strategy. Warren will remain focused on the same value drivers that our team has been fixated on, and he will speak to that in a moment. As I step into the role of Executive Chair, I see great opportunity for NeoGenomics over the coming years as our business shifts to higher value, advanced testing modalities. Today, NGS represents about a third of our clinical revenue and only 10% of our clinical volumes. Over time, we expect NGS and MRD together to ultimately approach two-thirds of our revenue. With that inversion, we see the potential for durable and accelerating revenue growth, which will also drive disciplined margin expansion, just as we saw in the Q3.

Speaker #3: Warren will remain focused on the same value drivers that our team has been fixated on, and he'll speak to that in a moment. As I step into the role of Executive Chair, I see great opportunity for NeoGenomics over the coming years.

Speaker #3: As our business shifts to higher-value, advanced testing modalities, today, NGS represents about a third of our clinical revenue and only 10% of our clinical volumes.

Speaker #3: Over time, we expect NGS and MRD together to ultimately approach two-thirds of our revenue. With that inversion, we see the potential for durable and accelerating revenue growth, which will also drive disciplined margin expansion.

Speaker #3: Just as we saw in the third quarter, we'll continue to seek ways to remove operational complexity, upgrade our infrastructure, and invest where we see the highest ROI—namely, in our clinical business across the NGS and MRD franchises.

Tony Zook: We will continue to seek ways to remove operational complexity, upgrade our infrastructure, and invest where we see the highest ROI, namely in our clinical business across the NGS and MRD franchises. Now let's get into the Q3 highlights. Total revenue grew to $209 million, up 11% year-over-year and ahead of our expectations of approximately 10% growth. Our entire clinical business, which makes up roughly 93% of our revenue, is gaining momentum and exceeded our expectations. This is driven in large part by strength in NGS, with its higher margin revenue growing 29%, as strong trends across both heme and solid tumor continue. On the much smaller non-clinical side, quarterly results met our expectations, though still represented a modest headwind to total revenue growth, declining approximately 10% or $1.5 million year-over-year. As a reminder, our non-clinical business is made up of two parts.

Speaker #3: Now, let's get into the third quarter highlights. Total revenue grew to $209 million, up 11% year-over-year and ahead of our expectations of approximately 10% growth.

Speaker #3: Our entire clinical business, which makes up roughly 93% of our revenue, is gaining momentum and exceeded our expectations. This is driven in large part by strength in NGS, with this higher-margin revenue growing 29%, as strong trends across both heme and solid tumor continue.

Speaker #3: On the much smaller non-clinical side, quarterly results met our expectations, though still represented a modest headwind to total revenue growth, declining approximately 10% or 1.5 million year over year.

Speaker #3: As a reminder, our non-clinical business is made up of two parts. One, our high-margin Oncology Data Solutions business, or ODS, which is an emerging opportunity for us, selling proprietary real-world evidence to pharma customers.

Tony Zook: One, our high margin Oncology Data Solutions business, or ODS, which is an emerging opportunity for us, selling proprietary real world evidence to pharma customers. And two, our pharma service business, which supports customers through drug development and clinical trials, and historically has been comprised of legacy lower value tests. Looking ahead, as we have done in all parts of our business, we continue to evaluate the low-margin commoditized contracts in our legacy pharma testing, which are not strategic to our business. However, we remain committed to more high-value services which move us up the pharma value chain. On the margin front this quarter, we again saw significant improvement. Adjusted gross margins expanded by over 300 basis points, driven by mix shifts, strong AUP growth of 11%, and Lab of the Future initiatives. Together with operating expense discipline, this drove adjusted EBITDA to $19 million, well above our expectations.

Speaker #3: And two, our pharma service business, which supports customers through drug development and clinical trials, and historically has been comprised of legacy lower-value tests. Looking ahead, as we have done in all parts of our business, we continue to evaluate the low margin commoditized contracts in our legacy pharma testing, which are non-strategic to our business.

Speaker #3: However, we remain committed to more high-value services, which move us up the pharma value chain. On the margin front this quarter, we again saw significant improvement.

Speaker #3: Adjusted gross margins expanded by over 300 basis points, driven by mix shifts, strong AUP growth of 11%, and Lab of the Future initiatives. Together with operating expense discipline, this drove adjusted EBITDA to $19 million.

Speaker #3: Well above our expectations. Beyond our financial results, we achieved several important business milestones in the third quarter. In August, Radar ST received Mold DX coverage for immunotherapy treatment response monitoring.

Tony Zook: Beyond our financial results, we achieved several important business milestones in the Q3. In August, RaDaR ST received MolDX coverage for immunotherapy treatment response monitoring, our third Medicare-covered indication and a cornerstone of our MRD launch. We continue to expect two additional indications to be granted reimbursement by MolDX, one potentially by year-end and the other by mid-2027. Warren Stone will discuss recent customer feedback and other payer successes shortly. Separately, we continue to advance Lab of the Future initiatives and investments in digital transformation, including upgrades to sequencers in our revenue cycle management system. Lastly, our pipeline continues to advance, and we expect several tests and upgrades to move closer to clinical availability in the coming quarters and years. In the Q3, we upgraded our flagship NGS test, our Neo Comprehensive Heme Panel, to include UBA1 and to detect variants at allele fractions as low as 3%.

Speaker #3: Our third Medicare-covered indication, and a cornerstone of our MRD launch. We continue to expect two additional indications to be granted reimbursement by MolDX, one potentially by year-end, and the other by mid-2027.

Speaker #3: Warren will discuss recent customer feedback and other payer successes shortly. Separately, we continue to advance lab-of-the-future initiatives and investments in digital transformation, including upgrades to sequencers and our revenue cycle management system.

Speaker #3: Lastly, our pipeline continues to advance, and we expect several tests and upgrades to move closer to clinical availability in the coming quarters and years.

Speaker #3: In the third quarter, we upgraded our flagship NGS test, our NEO Comprehensive Heme Panel, to include UBA1 and to detect variants at allele fractions as low as 3%.

Tony Zook: These additions, along with turnaround times as fast as eight days, further differentiate the test. In MRD, our next-generation whole genome assay remains on track, with data generation expected next year and a potential clinical launch in 2029. In sum, this was another strong quarter for NeoGenomics, with our team of over 2,400 individuals delivering the consistency that investors expect. As Warren Stone takes over as CEO in January, I expect that he and the team will continue to execute on the objectives in front of them. With that, let me turn it over to Warren Stone.

Speaker #3: These additions, along with turnaround times as fast as eight days, further differentiate the test. In MRD, our next-generation whole gene assay remains on track, with data generation expected next year and a potential clinical launch in 2029.

Speaker #3: In sum, this was another strong quarter for NeoGenomics, with our team of over 2,400 individuals delivering the consistency that investors expect. And as Warren takes over as CEO in January, I expect that he and the team will continue to execute on the objectives in front of them.

Speaker #3: With that, let me turn it over to Warren.

Warren Stone: Thank you, Tony, and good afternoon, everybody. I want to begin by thanking Tony, our board, employees, and the shareholders for their confidence in me as I take over the CEO role early next year. I am excited and grateful for the opportunity to lead NeoGenomics, something I have prepared for during my time with the company. Let me start by sharing a bit about what inspires me about the opportunity ahead. At NeoGenomics, we are a pure-play precision oncology company focused on the community, where approximately 80% of patients seek treatment. Today, we estimate roughly 60% of patients are still not receiving advanced comprehensive genomic profiling, which could lead to improved treatment decisions and outcomes.

Speaker #2: Thank you, Tony, and good afternoon, everybody. I want to begin by thanking Tony, our board, employees, and the shareholders for their confidence in me as I take over the COO role early next year.

Speaker #2: I'm excited and grateful for the opportunity to lead Neogenomics. Something I have prepared for during my time with the company. Let me start by sharing a bit about what inspires me about the opportunity ahead.

Speaker #2: At NeoGenomics, we're a pure-play precision oncology company focused on the community, where approximately 80% of patients seek treatment. Today, we estimate that roughly 60% of patients are still not receiving advanced comprehensive genomic profiling, which could lead to improved treatment decisions and outcomes.

Warren Stone: We have the opportunity to be the company that bring these tests to more patients through our leadership in hematology, our trusted position in the community providers, a broad test menu that spans diagnosis to recurrence monitoring, and our growing oncology sales force. Now it is about leveraging our strength and momentum to advance the execution of our strategy and accelerate value creation. Our focus areas remain consistent, delivering durable NGS growth, driving MRD uptake with RaDaR ST, and investing in our business while driving profitability through operational excellence. I will briefly touch on each of these today. First, let me begin with NGS, which we view as our key value driver. In the quarter, NGS grew 29% and volumes grew 17%, with large panel volumes growing above 25%. We really view these trends as durable based on new product launches, mix shifts to higher-value tests, and our integrated portfolio offerings.

Speaker #2: We have the opportunity to be the company that brings these tests to more patients. Through our leadership in hematology, our trusted position in the community providers, a broad test menu that spans diagnosis to recurrence monitoring, and our growing oncology field force.

Speaker #2: Now, there's about leveraging our strengths and momentum to advance the execution of our strategy and accelerate value curation. Our focus areas remain consistent. Delivering durable NGS growth, driving MRD uptake with Radar ST, and investing in our business while driving profitability through operational excellence.

Warren Stone: Our focus areas remain consistent, delivering durable NGS growth, driving MRD uptake with RaDaR ST, and investing in our business while driving profitability through operational excellence. I will briefly touch on each of these today. First, let me begin with NGS, which we view as our key value driver. In the quarter, NGS grew 29% and volumes grew 17%, with large panel volumes growing above 25%. We really view these trends as durable based on new product launches, mix shifts to higher-value tests, and our integrated portfolio offerings.

Speaker #2: I'll briefly touch on each of these today. First, let me begin with NGS, which we view as our key value driver. In the quarter, NGS grew 29% and volumes grew 17%, with large panel volumes growth above 25%.

Speaker #2: We view these trends as durable, based on new product launches, mixed shifts, or higher value tests, and our integrated portfolio offerings. In hematology, new therapies are driving demand for our tests, and we have upgraded our flagship NEO comprehensive Haine panel as we continue to drive deliver industry competitive turnaround times.

Warren Stone: In hematology, new therapies are driving demand for our tests, and we have upgraded our flagship Neo Comprehensive Heme Panel as we continue to deliver industry-competitive turnaround times. In solid tumor, PanTracer family, inclusive of Pro, Tissue, and LBx, are seeing strong uptake while driving halo effects across the entire portfolio. LBx in particular, is seeing increasing utilization and managed care reimbursement tailwinds following the MolDX reimbursement decision earlier this year. In total, we estimate large panel therapy selection penetration in the community setting to be around 35% to 40%, leaving substantial room for our business to grow. As we drive more wins with commercial payers and deliver more integrated testing solutions across the entire testing journey, our momentum should grow. As we view it, our NGS therapy selection and expanding portfolio provides us unique opportunity to differentiate ourselves.

Speaker #2: In Solid Tumor, Pantry is a family inclusive of Pro, Tissue, and LVX, which are seeing strong uptake, while driving halo effects across the entire portfolio.

Speaker #2: LVX in particular is seeing increasing utilization and managed care reimbursement tailwinds following the MoldX reimbursement decision earlier this year. In total, we estimate large panel therapy selection penetration in the community setting to be around 35% to 40%, leaving substantial room for our business to grow.

Speaker #2: As we drive more wins with commercial payers and deliver more integrated testing solutions across the entire testing journey, our momentum should grow. As we view it, our NGS therapy selection and expanding portfolio provide us a unique opportunity to differentiate ourselves.

Warren Stone: This becomes even more true now that we are promoting RaDaR ST for immunotherapy or IO monitoring. A recent customer experience highlights the power of our comprehensive offering. A community oncologist in Texas, frustrated by ordering from multiple vendors for a single patient, worked with our team to standardize testing on NeoGenomics given our breadth of primary diagnosis through surveillance. Now, new patients at this practice start with PanTracer Pro and PanTracer Liquid for therapy selection, followed by RaDaR ST for MRD. A single vendor also allows for faster turnaround time and better tissue preservation. It is a strong example of how our integrated menu sets us apart in the community oncology channel and drives multi-product adoption. Next, in MRD, we are confident in the opportunity and the foundation that we are setting. Early launch indications are encouraging. Over 30% of RaDaR ST orders are accompanied by other NeoGenomics tests.

Speaker #2: This becomes even more true now that we're promoting Radar ST for immunotherapy, or IO, monitoring. A recent customer experience highlights the power of our comprehensive offering.

Speaker #2: The community oncologist in Texas, frustrated by ordering from multiple vendors for a single patient, worked with our team to standardize testing on NeoGenomics, given our breadth of primary diagnosis through surveillance.

Warren Stone: Now, new patients at this practice start with PanTracer Pro and PanTracer Liquid for therapy selection, followed by RaDaR ST for MRD. A single vendor also allows for faster turnaround time and better tissue preservation. It is a strong example of how our integrated menu sets us apart in the community oncology channel and drives multi-product adoption. Next, in MRD, we are confident in the opportunity and the foundation that we are setting. Early launch indications are encouraging. Over 30% of RaDaR ST orders are accompanied by other NeoGenomics tests.

Speaker #2: Now, new patients at this practice start with pantry is a pro and pantry is a liquid for therapy selection followed by Radar ST for MRD.

Speaker #2: A single vendor also allows for foster turnaround time and better tissue preservation. It's a strong example of how an integrated menu sets us apart in the community oncology channel and drives multi-product adoption.

Speaker #2: Next, in MRD, we are confident in the opportunity and the foundation that we are setting. Early launch indications are encouraging. Over 30% of Radar ST orders are accompanied by other Neogenomics tests.

Warren Stone: Approximately two-thirds are in indication, and about 20% are in indication orders for patients on Medicare. Clinical RaDaR ST volumes continue to improve on a month-over-month basis following the August decision by MolDX to reimburse RaDaR ST for IO monitoring in late-stage cancer patients. IO monitoring is a critical piece of our foundation for a successful RaDaR ST launch, with what we estimate to be a US market opportunity of just under $4 billion, including several hundred thousand stage 4 patients, of which approximately 40% are on Medicare. Looking ahead, we expect further progress on the reimbursements, with two additional indications for RaDaR ST currently under review by MolDX. If approved, these additional indications would expand our access to over 40% of the total addressable market for tumor-informed MRD testing. Moreover, a leading regional commercial plan has informed us that effective 15 December, it will cover RaDaR ST for all MolDX reimbursed indications.

Speaker #2: Approximately two-thirds are an indication, and about 20% are indication orders for patients on Medicare. Clinical Radar ST volumes continue to improve on a month-over-month basis following the August decision by MolDx to reimburse Radar ST for IO monitoring and late-stage cancer patients.

Speaker #2: IO monitoring is a critical piece of our foundation for a successful Radar ST launch. With what we estimate to be a US market opportunity of just under $4 billion, including several hundred thousand stage four patients, of which approximately 40% are on Medicare.

Warren Stone: Looking ahead, we expect further progress on the reimbursements, with two additional indications for RaDaR ST currently under review by MolDX. If approved, these additional indications would expand our access to over 40% of the total addressable market for tumor-informed MRD testing. Moreover, a leading regional commercial plan has informed us that effective 15 December, it will cover RaDaR ST for all MolDX reimbursed indications.

Speaker #2: Looking ahead, we expect further progress on the reimbursements, with two additional indications for Radar ST currently under review by Mold X. If approved, these additional indications would expand our access to over 40% of the total addressable market for tumor-informed MRD testing.

Speaker #2: Moreover, a leading regional commercial plan is informed us that effective December 15, it will cover Radar ST for all mold X reimbursed indications. While clinical revenue will take time to ramp, as we further unlock commercial opportunities over time, we are encouraged by the recent volume trends in oncologist receptivity to the test and expect growing momentum in 2027 to support more meaningful revenue contributions in 2028 and beyond.

Warren Stone: While clinical revenue will take time to ramp as we further unlock commercial opportunities over time, we are encouraged by the recent volume trends and oncologists' receptivity to the test and expect growing momentum in 2027 to support more meaningful revenue contributions in 2028 and beyond. Finally, we are instilling operational excellence initiatives across our enterprise that will free up dollars for growth investments. These efforts will help fuel investments into high ROI areas like commercial, Lab of the Future initiatives, and product pipelines. In commercial, we ended the quarter at over 160 sales resources, consistent with prior commitments. Given the strength of our NGS business and recent reimbursement wins for RaDaR ST, we plan to further expand our sales force in a disciplined manner in Q4 and into 2027. In addition, we are investing in our vision of delivering a differentiated customer experience.

Speaker #2: Finally, we're instilling operational excellence initiatives across our enterprise that will free up dollars for growth investments. These efforts will help fuel investments into high ROI areas like commercial, lab with future initiatives, and product pipelines.

Speaker #2: In Commercial, we ended the quarter with over 160 sales resources, consistent with prior commitments. Given the strength of our NGS business and recent reimbursement wins for RADAR ST, we plan to further expand our sales force in a disciplined manner in the fourth quarter and into 2027.

Speaker #2: In addition, we're investing in our vision of delivering a differentiated customer experience. This quarter, we released a real-time order status tracker, which provides improved visibility to expected completion timing of test results to support downstream workflows and patient scheduling.

Warren Stone: This quarter, we released a real-time order status tracker, which provides improved visibility to expected completion timing of test results to support downstream workflows and patient scheduling. We also continue to improve EMR connectivity through Epic Aura integrations and, in the near future, integrations with Flatiron. Progress on our Lab of the Future initiatives also continued this quarter. We remain on track to transition our heme NGS portfolio, the largest revenue component of our NGS business, to the NovaSeq X platform in H1 2027. Separately, we recently expanded our digital pathology partnership with Indica Labs to prepare for AI's growing role in cancer diagnosis and therapy selection. In closing, I am excited about the future. We have a tremendous opportunity ahead to deepen the penetration of precision oncology in the community, setting while delivering consistent, durable, profitable revenue growth.

Speaker #2: We also continue to improve EMR connectivity through Epic OR integrations, and, in the near future, integrations with Flatiron. Progress on our lab, with future initiatives, also continued this quarter.

Speaker #2: We remain on track to transition our Haine NGS portfolio, the largest revenue component of our NGS business, to the NovaSeq X platform in the first half of 2027.

Speaker #2: Separately, we recently expanded our digital pathology partnership with Indica Labs to prepare for AI's growing role in cancer diagnosis and therapy selection. In closing, I'm excited about the future.

Speaker #2: We have a tremendous opportunity ahead to deepen the penetration of precision oncology in the community setting, while delivering consistent, durable, profitable revenue growth. And with that, I'll hand the call over to Abhishek.

Warren Stone: With that, I will hand the call over to Abhishek.

Abhishek Jain: Thank you, Warren, and good afternoon, everyone. In my remarks today, I will discuss our Q3 financial results and our updated 2026 guidance. We reported total revenue of $209 million, up 11% year-over-year. Clinical revenue grew 13% to $195 million, driven by a 2% increase in test volumes and an 11% increase in AUP. NGS revenue grew a strong 29% year-over-year, driven by 17% volume growth, and above 25% volume growth of our large PAMA NGS tests. As Warren noted, we are pleased with the consistent, durable growth in our NGS portfolio and are excited about the opportunities ahead, driven by product upgrades across both heme and solid tumor, as well as growing adoption of our large PAMA tests. This mix shift towards high-value testing is also the primary driver of the increase in AUP, with the balance coming from our RCM initiatives, including managed care pricing gains with payers.

Speaker #3: Thank you, Warren, and good afternoon, everyone. In my remarks today, I will discuss our third quarter financial results and our updated 2026 guidance. We reported total revenue of $209 million, up 11% year over year.

Speaker #3: Clinical revenue grew 13% to $195 million, driven by a 2% increase in test volumes and an 11% increase in AUP. NGS revenue grew a strong 29% year-over-year, driven by 17% volume growth and above 25% volume growth of our large panel NGS tests.

Speaker #3: As Warren noted, we are pleased with the consistent, durable growth in our NGS portfolio and are excited about the opportunities ahead driven by product upgrades across both Haine and Solid Tumor as well as growing adoption of our large panel tests.

Speaker #3: This mix shift towards high-value testing is also the primary driver of the increase in AUP, with a balance coming from our initiatives, including managed care pricing gains with payers.

Abhishek Jain: Turning to our non-clinical business, we reported revenue of $15 million in line with our expectations, representing a decline of approximately 10% year-over-year. We continue to see compelling opportunities across our high-margin ODS business, though legacy pharma remains a headwind for us as we evaluate low-margin commoditized contracts while staying committed to offering high-value pharma services. Adjusted gross margin for the Q3 was 49%, an expansion of over 300 basis points versus the prior year period. Our adjusted gross profit increased by $16 million or 19% to $102 million. This was driven by AUP growth, a higher mix of NGS revenue, and continued lab efficiencies driven by our Lab of the Future initiative. We continue to invest in the areas that will help us drive the growth margin expansion.

Speaker #3: Turning to our non-clinical business, we reported revenue of $15 million in line with our expectations representing a decline of approximately 10% year over year.

Speaker #3: We continue to see compelling opportunities across our high-margin ODS business, though legacy pharma remains a headwind for us as we evaluate low-margin, commoditized contracts, while staying committed to offering high-value pharma services.

Speaker #3: Adjusted gross margin for the third quarter was 49%, representing an expansion of over 300 basis points versus the prior year period. Adjusted gross profit increased by $16 million, or 19%, to $102 million.

Speaker #3: This was driven by AUP growth, a higher mix of NGS revenue, and continued lab efficiencies, driven by our Lab of the Future initiative. We continue to invest in the areas that will help us drive gross margin expansion.

Abhishek Jain: We bought new sequencers and data servers for over $5 million in capital expenditures as part of NovaSeq X transition in this quarter. Also, we upgraded our revenue cycle management platform to XiFin, as Tony noted. XiFin is one of the leading RCM platforms for its ability to streamline and automate workflows, improve collection rates, and reduce bad debt. With a platform transition of this size, we saw a temporary impact on our receivables that we expect to normalize toward the Q4 and into early 2027. Over time, we believe XiFin will help us continue to drive AUP improvement and greater efficiencies. Moving down to P&L. Total operating expenses in the quarter were $105 million. Sales and marketing expenses grew 27% year-over-year as we continue to invest in our sales team to help accelerate growth.

Speaker #3: We bought new sequencers and data servers for over $5 million in capital expenditure as part of the NovaSeq X transition in this quarter. Also, we upgraded our revenue cycle management platform to Zyphin, as Tony noted.

Speaker #3: Zyphin is one of the leading RCM platforms. For its ability to streamline and automate workflows, improve collection rates, and reduce bed debt. With a platform transition of this size, we saw a temporary impact on our receivables that we expect to normalize towards the fourth quarter and into early 2027.

Speaker #3: Over time, we believe Zyphin will help us continue to drive AUP improvement and greater efficiencies. Moving down the P&L, total operating expenses in the quarter were $105 million. Sales and marketing expenses grew 27% year-over-year, as we continue to invest in our sales team to help accelerate growth.

Abhishek Jain: R&D increased 13% year-over-year as our team works to upgrade our own market tests and advance next-generation products. These increases were funded in part by decreases in G&A spend, which declined by 4% year-over-year. This decline reflects our commitment to reduce G&A expenses as a percent of revenue and an intentional shift in capital allocation within operating expense line. Adjusted EBITDA was $18.7 million for the quarter, up 53% year-over-year, reflecting strong operating performance and disciplined investments. Turning to balance sheet, we ended the quarter with $139 million in cash and cash equivalents, down $6 million as compared to last quarter. Cash flow in this quarter reflects three discrete items, the payment of roughly $10 million for the DOJ settlement that we reserved for and discussed last quarter, transient effects from the XiFin implementation, and our continued investment in modernizing and scaling our infrastructure.

Speaker #3: R&D increased 13% year over year, as our team works to upgrade our own market tests and advance next-generation products. These increases were funded in part by decreases in GNS spend, which declined by 4% year over year.

Speaker #3: This decline reflects our commitment to reduce G&A expenses as a percent of revenue and an intentional shift in capital allocation within operating expense lines.

Speaker #3: Adjusted EBITDA was $18.7 million for the quarter, up 53% year over year, reflecting strong operating performance and disciplined investments. Turning to the balance sheet, we ended the quarter with $139 million in cash and cash equivalents, down $6 million compared to the last quarter.

Speaker #3: Cash flow in this quarter reflects three discrete items: the payment of roughly $10 million for the DOJ settlement that we reserved for and discussed last quarter, transient effects from the Zyphin implementation, and our continued investment in modernizing and scaling our infrastructure.

Abhishek Jain: Now turning to our 2026 guidance. Given our strong Q3, we are raising our full-year 2026 revenue guidance to a range of $807 to $809 million, up from $802 to $806 million discussed previously, and representing full-year revenue growth of approximately 11% at the midpoint. The key assumptions underlying the midpoint of our revised revenue guidance are as follows. First, our clinical business to grow in the low teens for the full year, reflecting strong Q3 performance. Second, we expect NGS revenue to grow more than 25% for the full year, approaching approximately $250 million in 2026. Third, no change to our PanTracer Liquid or RaDaR ST revenue assumptions. Finally, we now expect our non-clinical business to be down low double digits year-over-year. For Q4, this implies revenue growth of approximately 11%, slightly ahead of our prior commentary.

Speaker #3: Now turning to our 2026 guidance. Given our strong third quarter, we are raising our full-year 2026 revenue guidance to a range of $807 million to $809 million, up from $802 million to $806 million discussed previously.

Speaker #3: And representing full-year revenue growth of approximately 11% at the midpoint. The key assumptions underlying the midpoint of our revised revenue guidance are as follows:

Speaker #3: First, our clinical business to grow in the low teens for the full year reflecting strong Q3 performance. Second, we expect NGS revenue to grow more than 25% for the full year approaching approximately $250 million in 2026.

Speaker #3: Third, no change to our pancreas or liquid or Radar estate revenue assumptions. Finally, we now expect our non-clinical business to be down low double digits year over year.

Speaker #3: For the fourth quarter, this implies revenue growth of approximately 11%, slightly ahead of our prior commentary. Turning to gross margin, we now anticipate well over 150 basis points of adjusted gross margin improvement for the full year.

Abhishek Jain: Turning to gross margin, we now anticipate well over 150 basis points of adjusted gross margin improvement for the full year, implying Q4 gross margin of approximately 48%. Finally, we are raising our full-year 2026 adjusted EBITDA guidance to approximately $60 million versus $56 to $58 million discussed previously, representing year-over-year growth of approximately 40%. With that, let me turn the call back over to Tony.

Speaker #3: Implying fourth quarter gross margin of approximately 48%. Finally, we are raising our full year 26 adjusted EBITDA guidance to approximately $60 million, versus $56 to $58 million discussed previously.

Speaker #3: Representing year-over-year growth of approximately 40%. With that, let me turn the call back over to Tony.

Tony Zook: Thanks, Abhishek. We are making great progress in 2026 and expect a strong finish to the year. Four of the five growth catalysts we outlined for 2026 are now behind us, and the fifth, expanded RaDaR ST reimbursement, is well underway with IO monitoring secured and two additional submissions pending. Our priorities from here are clear: deliver a strong Q4, drive durable NGS growth, uptake in MRD, and disciplined margin expansion through operational excellence. We are looking forward to exiting 2026 with momentum, and we are excited about 2027. Thank you for your continued interest in NeoGenomics. With that operator, this concludes our prepared remarks, so you can please open up the line for questions.

Speaker #2: Thanks, Abhishek. We're making great progress in 2026 and expect a strong finish to the year. Four of the five growth catalysts we outlined for 2026 are now behind us, and the fifth—expanding radar ST reimbursement—is well underway.

Speaker #2: With IO monitoring secured and two additional submissions pending, our priorities from here are clear: deliver a strong fourth quarter, drive durable NGS growth, increase uptake in MRD, and achieve disciplined margin expansion through operational excellence.

Speaker #2: We're looking forward to exiting 2026 with momentum, and we're excited about 2027. Thank you for your continued interest in NeoGenomics. And with that, operator, this concludes our prepared remarks, so please open up the line for questions.

Operator: Thank you. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star one. If listening on speakerphone, please pick up your handset while asking your question to provide optimal sound quality. We also ask that out of consideration to other callers on the line today and time allotted, to please limit yourself to one question and one follow-up. Thank you. Once again, please press star one on your phone at this time to join the queue to ask a question. Your first question will be from Dave Westenberg at Piper Sandler. Please go ahead.

Speaker #1: Thank you. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star one.

Speaker #1: And if you are listening on speakerphone, please pick up your handset while asking your question to provide optimal sound quality. We also ask that, out of consideration for other callers on the line today and the time allotted, you please limit yourself to one question and one follow-up.

Speaker #1: Thank you. Once again, please press star one on your phone at this time to join the queue to ask a question. Your first question will be from Dave Westenberg at Piper Sandler.

Speaker #1: Please go ahead.

Dave Westenberg: All right. Thank you for taking the question, and congrats on Warren on taking over, and congrats on Tony on being the new board member. Well, you have already, sorry, Chairman of the Board. I think I just kind of want to ask broadly about the management transition here. I think all of us that follow Neo very well think that Warren is the obvious successor and clearly this is 100% who we would all want to be CEO. Saying that, I think Neo's transition and leadership have not always been seamless. The business does not appear to be broken, so can you just talk about some of the timing on this, why we made this decision now?

Speaker #4: All right, thank you for taking the question. And congrats to Warren on taking over, and congrats to Tony on being the new board member.

Speaker #4: So well, you've already sorry, chairman of the board. Yeah. You know, I think I just kind of want to ask, you know, broadly, we're about the management transition here.

Speaker #4: You know, I think all of us that follow NEO very well think that Warren is the, I guess, obvious successor and, you know, clearly this is a, you know, 100% who we would all want to be CEO.

Speaker #4: Now, saying that, you know, I think NEO's transition and leadership haven't always been seamless. The business doesn't appear to be broken. So, you know, can you just talk about, you know, some of the timing on this?

Speaker #4: You know, why this is natural fit you know, why we made this decision now? And then just some of the questions directly for Warren, you know, can you talk about some of the things that you've been involved with in terms of the management decision over the last couple of years?

Dave Westenberg: Then just some of the questions directly for Warren, can you talk about some of the things that you have been involved with in terms of the management decision over the last couple of years? As you step into the role, how you are going to kind of communicate the long-term ambition versus keeping things in check. I know during the transition from Chris to Tony, there was a little bit of maybe not the best communication of the long-term ambition of the company. Last, was there any lessons from that transition from Chris to Tony? I know there is a lot, but I think a lot of us want to know about this Tony to Warren transition.

Speaker #4: And as you step into the role, how you're going to kind of communicate the long-term ambition versus, you know, keeping things in check. I know during the transition from Chris to Tony, you know, there's a little bit of a, you know, maybe not the best communication of the long-term ambition of the company.

Speaker #4: And then last, you know, was there any lessons from that transition from Chris to Tony? I know there's a lot, but, you know, I think a lot of us want to know about, you know, this Tony to Warren transition.

Tony Zook: Sure. Dave, I will kick it off and then Warren, turn it over to you.

Speaker #2: Sure. Sure, Dave. I'll kick it off and then Warren turn it over to you.

Dave Westenberg: Thanks.

Tony Zook: I would say there were a lot of lessons learned, Dave, and I think that has benefited us as we have done this transition. I would say first and foremost, relative to the timing of the transition, this was the result of what I thought was actually really good succession planning. There were no guarantees given to anybody. If you recall, when I came on board, the first thing I did was appoint Warren to his current role where he would move from leading just the commercial organization to also include lab operations and demonstrate enterprise leadership across multiple functions, as well representing almost 75% of our employee population. I will tell you, Dave, that Warren did a marvelous job there. The degree of innovation and change within the labs today is literally amazing, and we continue to gain momentum in what we are doing across the commercial front.

Speaker #4: Thanks.

Speaker #2: I would say there were a lot of lessons learned, Dave, and I think that's benefited us as we've done this transition. I would say, first and foremost, relative to the timing of the transition, this was the result of what I thought was actually really good succession planning.

Speaker #2: There were no guarantees given to anybody. And if you recall, when I came on board, the first thing I did was appoint Warren to his current role, where he would move from leading just the commercial organization to also include lab operations.

Speaker #2: And demonstrate enterprise leadership across multiple functions, as well as representing almost 75% of our employee population. And I will tell you, Dave, that Warren did a marvelous job there.

Speaker #2: The degree of innovation and change within the labs today is literally amazing, and we continue to gain momentum in what we're doing across the commercial front.

Tony Zook: I would say without any hesitation, through my eyes as well as the board, Warren earned the opportunity. Once we knew that we had the right person for the future, then it became a question of what is the right time? We just believe that we are doing this from a position of strength. By making the transition now, we get continuity for me going back to the board as executive chair, so there is not going to be, with Lynn stepping out and not seeking re-election, there will not be a new chairperson coming in that might challenge strategy. It just seemed the perfect opportune time for us to do it. Second, by doing it when we did it earlier in the month, it gave us the opportunity to get in front of all of our leaders, because we already had a senior leadership team scheduled.

Speaker #2: And so I would say without any hesitation, through my eyes as well as the board, Warren earned the opportunity. And so once we knew that we had the right person for the future, then it became a question of what's the right time.

Speaker #2: And we just believe that, you know, we're doing this from a position of strength by making the transition now. We get continuity from me going back to the board as Executive Chair.

Speaker #2: So there's not going to be—with Lynn stepping out and not seeking reelection—there won't be a new chairperson coming in that might challenge strategy.

Speaker #2: So it just seemed like a perfect, opportune time for us to do it. Second, by doing it when we did, earlier in the month, it gave us the opportunity to get in front of all of our leaders because we already had a senior leadership team meeting scheduled.

Tony Zook: There, we were able to guarantee that there would be no disruption from the change, and everybody is fully aligned internally around what we are doing. I would say the key lessons learned as well is that Warren and I have been working closely together over the last few years, and we continue to do so. We are joined at the hip relative to the strategy. We will be very much aligned as we go through the budget process in the final quarter, and I think those were the big lessons learned. I was basically handed a budget that I did not have the same insights that I would have liked to have had. Warren will be able to own this budget himself due to the timing. That is kind of the macro why's, and then Warren, you can give your own perspective.

Speaker #2: And there, we were able to guarantee that there would be no disruption from the change, and everybody is fully aligned internally around what we're doing.

Speaker #2: And so, I would say the key lesson learned as well is that Warren and I have been working closely together over the last few years, and we continue to do so.

Speaker #2: You know, we're joined at the hip relative to the strategy. We'll be very, very much aligned as we go through the budget process and the final quarter.

Speaker #2: And I think those were the big lessons learned. I was basically handed a budget, but I didn't have the same insights that I would have liked to have had.

Speaker #2: Warren will be able to own this budget himself due to the timing. So that's kind of the macro-wise. And then, Warren, you can give your own perspectives.

Warren Stone: Yeah. Thanks, Tony. First, Dave, thank you for the kind words. Appreciate that. I think to your earlier question, how involved have I been, I think that is a critical question. I have just come up on four years in the age of genomics, and I would say my first two years, I was very involved in most things. Over the last two years since Tony transitioned into CEO, I would say I was acutely involved in practically all decisions, certainly those that related to people and strategy. I really consider myself as one of the architects of the strategy. I say that because it is important. I think we have momentum in the business right now, and I hope the results that we have just reported here in Q3 actually demonstrate that.

Speaker #3: Yeah, thanks, Tony. So first, Dave, thank you for the kind words. I appreciate that. You know, I think to answer your question, sort of how involved am I being?

Speaker #3: I think that's a critical question. And I've just come up on sort of four years at Neogenomics. And I'd say in my first two years, I was very involved in most things.

Speaker #3: And over the last two years since Tony transitioned into CEO, I'd say I was acutely involved in practically all decisions, certainly those that related to people and strategy.

Speaker #3: So, I already consider myself as sort of one of the architects of the strategy, and I say that because it's important. I think we have momentum in the business right now.

Speaker #3: And I hope the results that we've just reported here in the third quarter actually demonstrate that. And what we want to do is not only maintain that momentum, but obviously accelerate that momentum.

Warren Stone: What we want to do is not only maintain that momentum, but obviously accelerate that momentum. Continuity in the strategy is critically important, and maintaining continuity within the leadership is important as well. The fact that I have been heavily involved in that process, I feel very confident we are able to achieve that. To that point, I think in terms of what is changing, I think maybe the ambition in terms of the value that we can deliver from the strategy as we transition into this next chapter. Lastly, your point is how are we going to keep the community informed around our ambitions and the future? I think what we certainly are planning on doing outside of investor comps like JP Morgan is to have an investor day in H1 2027.

Speaker #3: So continuity in the strategy is critically important, and maintaining continuity within the leadership is important as well. So, the fact that I've been heavily involved in that process, I feel very confident we're able to achieve that.

Speaker #3: So to that point, I think in terms of this sort of what is changing, I think maybe the ambition in terms of the value that we can deliver from the strategy as we transition into this next chapter.

Speaker #3: And I think lastly, your point is, how are we going to keep the community sort of informed around our ambitions and the future? I think what we certainly are planning on doing outside of investor comms, like JP Morgan, is to have an investor day in the first half of 2027.

Warren Stone: There is a lot of exciting things to share from a portfolio perspective, from a commercial expansion point of view, operational excellence, and we feel it has been four years since the last opportunity. It is time for us to do the same again.

Speaker #3: There are a lot of exciting things to share from a portfolio perspective, from a commercial expansion point of view, and operational excellence. We feel it's been four years since the last opportunity, and it's time for us to do the same again.

Dave Westenberg: Got it. No, thank you very much. Since that was a long answer, I will keep it kind of short. Abhishek Jain, I just wanted to know about what MRD and liquid contribution would be in Q4, if you have any, just given the fact that you gave it on the year, there is technically only one quarter in the year. Honestly, we are just trying to get kind of a run rate for 2027. I know you are not going to give 2027 guidance, so I am going to try my best with kind of looking at that. Thank you.

Speaker #4: Got it. Now, thank you very much. And since that was a long answer, I'll keep it kind of short. Abhishek, I just wanted to know about what MRD and liquid contribution would be in Q4 if you have any just, you know, given the fact that you gave it on the year, there's technically only one quarter in the year.

Speaker #4: Honestly, we're just trying to get kind of a run-rate for '27. I know you're not going to give '27 guidance, so I'm going to try my best by kind of looking at that.

Speaker #4: Thank you.

Tony Zook: We would expect nothing less from you, Dave.

Speaker #2: We would expect nothing less from you, Dave.

Abhishek Jain: Yeah, no, again, I think we are not breaking it down to the quarter level for now, Dave. Sorry to disappoint you on that one. We will provide more color in our Q4 call for that one. But overall, for both liquid and the MRD, our guidance that we gave in the beginning of the year, we are tracking well to those numbers.

Speaker #3: Yeah, no, again, I think we're not breaking it down at a quarter level for now, Dave. Sorry to disappoint you on that one. We'll provide more color in our Q4 call for that one.

Speaker #3: But overall, for both Liquid and the MRD, our guidance that we gave at the beginning of the year—we are tracking well to those numbers.

Tony Zook: Operator, let's go to the next question.

Speaker #4: Operator, let's go to the next question.

Operator: Next question will be from Puneet Souda at Leerink. Please go ahead.

Speaker #1: Next question will be from Pumitsuda at Lyrinc. Please go ahead.

Puneet Souda: Yeah. Hi, guys. Thanks for the questions. Warren, congrats. Well deserved and excited to have you in the spot. Tony, really solid job as you came into the seat and executed. First one from my side is really, again, AUP growth is a very important part of the story. Came in, again, slightly even ahead of the pre-announcements as we looked at it. Maybe could you elaborate just how should we think about that and the sustainability of that into 2027? I know you're not giving 2027, but just the volume growth, 17% NGS, really great, 25% on the larger panels as well. But just wanted to get a sense of the AUP growth sustainability of that.

Speaker #4: Yeah. Hi, guys. Thanks for the questions. And Warren, congrats—well deserved, and excited to have you on the spot. And Tony, really solid job as you came into the seat and executed.

Speaker #4: First one, you know, first one from my side is really, again, AUP growth is a very important part of the story. It came in, again, slightly even ahead of the pre-announcements as we looked at it.

Speaker #4: Maybe could you elaborate, you know, just how should we think about that and the sustainability of that into 2027? I know you're not giving '27, but just to, you know, the volume growth, 17% NGS, really great, 25% large on the panels on the larger panels as well, but just wanted to get a sense of the AUP growth sustainability of that.

Abhishek Jain: No, sure, Puneet, I can take that question. AUP growth came in at 11% for the current quarter, as we reported in our numbers this quarter. We had guided in the beginning of the year that overall AUP growth is going to be in the high single digits, and the volume growth is going to be in the low single digits. The reason for the AUP growth to be higher and volume growth to be lower was primarily because of this exit of the high-volume, low-value test. One particular customer that basically kind of had a run of pretty high volumes in 2025.

Speaker #3: No, sure, Police. I can take that question. So AUP growth came in at 11% for the current quarter as we reported in our numbers this quarter.

Speaker #3: And we had guided in the beginning of the year that overall AUP growth is going to be the high single digit. And the volume growth is going to be in the low single digit.

Speaker #3: The reason for the AUP growth to be higher and volume growth to be lower was primarily because of this exit of the high volume, low value test.

Speaker #3: One particular customer that basically kind of had a run of pretty high volumes in 2025. So what we are basically suggesting that once we kind of kind of stabilize out of this particular like dynamic of exiting this high volume, low value contracts, what we have guided that the volume in the AUP should track back to the mid single digit, which we have been in the past.

Abhishek Jain: So what we are basically suggesting that, once we stabilize out of this particular dynamic of exiting this high volume, low-value contract, what we have guided that the volume in the AUP should track back to the mid-single digits, which we have been in the past. So that's the first piece of the question, that AUP growth should, in the normal environment, be around mid-single digits. Now, on the 11% AUP growth, and from the durability perspective, I would say that we feel that there's a lot of room for us to continue to deliver on the AUP numbers. The reason, number one, is the mix of the two-third of the AUP growth is coming from us driving the high margin, high-value NGS product.

Speaker #3: So that's the first piece of the question that AUP growth should in a normal environment be around mid single digit. Now, on the 11% AUP growth and from the durability perspective, I would say that we feel that there's a lot of room for us to continue to deliver on the AUP numbers.

Speaker #3: The reason, number one, is the mix. Two-thirds of the AUP growth is coming from us driving the high-margin, high-value NGS products.

Abhishek Jain: And given the fact that our larger panels are even growing strongly within the NGS family, that is actually helping us drive the AUP growth. Now, the second piece of the AUP is the RCM initiatives. RCM initiatives, as we called out in our prepared remarks, we are actually encouraged by seeing some of the recent wins in the commercial payers, and that is basically helping us drive the RCM of the real AUP benefits that we are seeing now. So those two pieces actually help us continue to drive the AUP growth.

Speaker #3: And given the fact that our larger panels are even growing strongly within the NGS family, that is actually helping us drive the AUP growth.

Speaker #3: Now, the second piece of the AUP is the RCM initiators. Now, RCM initiative, as we kind of called out in our prepared remarks, we are actually encouraged by seeing some of the recent wins in the commercial pairs.

Speaker #3: And that is basically helping us drive the RCM, the real AUP benefits that we are seeing now. So those two pieces kind of actually help us continue to drive the AUP growth.

Puneet Souda: Got it. Super. And then, just briefly on the NGS volume growth itself.

Speaker #4: Got it. Super. And then just briefly on the NGS volume growth itself, wondering if you could qualify that, you know, how much of that is sort of new store sales or same store sales essentially?

Puneet Souda: I'm wondering if you could qualify that. How much of that is new store, sales or same store sales, essentially I'm trying to get to is, are you taking share or how much of this is just market growth, versus taking share? Again, competition in this space, as you know well, is there, but you have a very strong position in the community setting. So I just wanted to get a sense of how you're winning there.

Speaker #4: I'm trying to get to is, you know, are you taking share or how much of this is just market growth? We're just taking share, again, competition in this space is, as you know well, is there.

Speaker #4: So, but you have a very strong position in the community setting. So I just wanted to get a sense of how you're winning there.

Warren Stone: Yeah, Puneet, again, firstly, thanks for your kind remarks up front. I would say I don't have the data specifically broken down. I can tell you that this is not just with regards to growth in existing customers. We're certainly seeing robust new customer acquisition, which is supporting this growth, as well as incremental volumes that are coming in from existing customers, enabled by our bi-directional interfaces that we've put in place to support a simpler workflow and better customer experience.

Speaker #3: Yeah. Again, firstly, thanks for kind remarks up front. I would say I don't have the data specifically broken out. I can tell you that this is not just with regards to growth at existing customers.

Speaker #3: We certainly see robust new customer acquisition, which is supporting this growth, as well as incremental volumes that are coming in from existing customers, enabled by our bidirectional interfaces that we've put in place to support a simpler workflow and better customer experience.

Abhishek Jain: Thanks, Puneet.

Speaker #4: Thank you, Puneet.

Operator: Next question will be from Bill Bonello at Craig-Hallum. Please go ahead, Bill.

Speaker #1: Next question will be from Bill Barnell at Craig Hallam. Please go ahead, Bill.

Bill Bonello: Hey, guys. Thanks a lot. I want to come at the growth, maybe, hopefully, I'm not asking the exact same question that everybody else has been asking, but, obviously, the NGS growth was especially strong this quarter. When I think about it, there's a lot of drivers, including the expanded sales force. You implemented the specialized oncology sales team, and then obviously the new products. I'm just wondering if you can give us some sense of the relative importance of those factors. What I'm really trying to get at is to what extent the new products are already truly kicking in and adding growth or is most of the growth still coming from those other factors and the growth from the new products is largely in front of us?

Speaker #5: Hey guys, thanks a lot. I want to come at the growth — maybe, hopefully, I'm not asking the exact same question that everybody else has been asking, but obviously the NGS growth was especially strong this quarter.

Speaker #5: When I think about it, there's a lot of drivers, including the expanded sales force, you implemented the specialized oncology sales team, and then obviously the new products.

Speaker #5: I'm just wondering if you can give us some sense of the relative importance of those factors. What I'm really trying to get at is, you know, to what extent the new products are already truly kicking in and adding growth or, you know, is most of the growth still coming from those other factors and the growth from the new products is largely in front of us.

Bill Bonello: That 25% number you gave, it actually sounded a little bit low to me, and I do not have a base to put it on. Anyway, I think you get the gist of what I am asking, and then hopefully a follow-up.

Speaker #5: I just, that 25% number you gave, I'm, it actually sounded a little bit low to me. And I, you know, I don't have a base to put it on.

Speaker #5: So anyway, I think you get the gist of what I'm asking and then hopefully a follow-up.

Abhishek Jain: Yeah, Bill, I will kick it off and then Warren, please drill down a little bit more. I think you were right in your initial talking about the sales force expansion and product introductions, all these things contribute. I think when you look across the spectrum, I think actually some of the product upgrades and new therapies were certainly additive to the overall growth rate. What is also nice is that we are seeing it is broad-based. It is across heme as well as solid tumor. Heme being a larger portion of the business, it is still showing very good, robust growth and solid tumor is beginning to kick in. It is on a smaller number, but that does help fuel growth trajectory as well. You mentioned the mix shift to the larger panels and 25% volume growth is really, really strong, especially when you consider the mix shift effect.

Speaker #4: Yeah, Bill, I'll kick it off and then Warren, please drill down a little bit more. I think you were right in your initial talking about, you know, the Salesforce expansion and product introductions, all these things contribute.

Speaker #4: I think, you know, when you look across the spectrum, I think actually, you know, some of the product upgrades and new therapies are certainly were additive to the overall growth rate.

Speaker #4: What is also nice is that we're seeing its broad base. It's across HEME as well as solid tumor. You know, HEME being a larger portion of the business, it's still showing very good robust growth.

Speaker #4: And solid tumor, it's beginning to kick in. It's on a smaller number, but that does help fuel growth trajectory as well. You mentioned the mix shift to the larger panels.

Speaker #4: And, you know, 25% volume growth is really, really strong, especially when you consider the mix shift effect. And then, of course, there is, as you mentioned before, the Salesforce expansion.

Abhishek Jain: Of course, there is what you mentioned before, the sales force expansion. But any other color, Warren?

Speaker #4: But any other color, Warren,?

Warren Stone: Yeah, I think, again, I would say there is no one single factor. If we go back to the five products that we launched in 2023, that is contributing about 25% of revenue today, and the actual growth of those five products was north of that, well north of that 25%. They are all large panels that we introduced in 2023, well north of that 25% that we articulated. So there is definitely still a lot of opportunity in the products. Secondly, yeah, certainly field force expansion is something that we continue to see as a really attractive investment. We are getting good returns there that is substantiating the growth, and that is why in my prepared remarks, I indicated that we are going to make further investments into the commercial organizations for NGS and MRD that is coming as well. Just our work around customer experience.

Speaker #3: Yeah, I think, and again, I'd say, well, there's no one single factor. If we go back to the five products that we launched in 2023, you know, those, that's contributing about 25% of our revenue today.

Speaker #3: And the actual growth of those five products was north of that, well north of that 25%. They're all large panel that we introduced in 2023, well north of that 25% that we articulated.

Speaker #3: So, there's definitely still a lot of opportunity in the products. And then, secondly, field force expansion is something that we continue to see as a really attractive investment.

Speaker #3: We're getting good returns there. That's substantiating the growth. And that's why my prepared remarks indicated that we're going to make further investments into the commercial organization to support NGS and MRD.

Speaker #3: That's coming as well. And then, you know, just our work around customer experience, I will maybe just call that out both in terms of just taking friction out.

Warren Stone: I will maybe just call that out, both in terms of just taking friction out and our bidirectional interfaces. That channel continues to work very effectively for us, so that's helping accelerate the growth. The only comment that I will make is the upgraded PAMA that Tony Zook spoke about, our heme PAMA. That happened very late in the quarter and probably has very little to do with the results that we've actually articulated.

Speaker #3: And our bidirectional interfaces, that channel continues to work very effectively for us. So that's helping accelerate the growth. The only comment that I will make is the upgraded panel that Tony spoke about, our HEME panel, that happened very late in the quarter and probably has very little to do with the results that we've actually articulated.

Tony Zook: Bill Bonello, I guess maybe just to capstone on this, I guess, as an organization, you can do anything you want, you just can't do everything you want. This organization is focused relentlessly on driving our key growth drivers, which NGS is the biggest short-term driver that we have. So it is an organizational focus point for all of us. Maybe the final thing is, and Warren Stone's made this apparent in previous conversations, moving from a product mindset to a portfolio mindset. We look for connectivity across the portfolio, and that is certainly having an effect.

Speaker #4: Good, Bill. I guess maybe just to capstone on this, I guess, you know, as an organization, you can do anything you want. You just can't do everything you want.

Speaker #4: And, you know, this organization is focused relentlessly on driving our key growth drivers, with NGS being the biggest short-term driver that we have. So it is an organizational focus point for all of us.

Speaker #4: And maybe the final thing is, and Warren's made this apparent in previous conversations, moving from a product mindset to a portfolio mindset, we look for connectivity across the portfolio.

Speaker #4: And that is certainly having an effect.

Bill Bonello: Thank you. That's really helpful. Just as the quick follow-up, I know that the focus is on NGS growth, but we have had a little bit of a drag from discontinuing the high-volume, low-margin customer. Can you just remind us when we should start to see that annualize and maybe what a normalized growth rate for the non-NGS portion of the business is on a volume standpoint?

Speaker #5: That thank you. That's really helpful. And just as the quick follow-up, and I know that the focus is on NGS growth, but, you know, we have had a little bit of a drag from discontinuing the low margin customer, the high volume low margin customer.

Speaker #5: Can you just remind us when we should start to see that annualize? And maybe would a normalized growth rate for the non-NGS portion of the businesses on a volume standpoint?

Abhishek Jain: No, absolutely, Bill Bonello. What we have generally called out this high-volume, low-value customer peak in Q3 of 2025. So we basically had the toughest compare in this particular quarter. This will start to taper off into Q4, which I would say that it will basically start to kind of get muted as we go in Q1 and Q2 of next year. But the whole idea here is that if we were to strip out basically this particular dynamic and a little bit of the baseline, the non-oncology testing that we exited, when I do my math, the volumes are growing in the mid-single digits, very similar to how we have seen in the past. So my sense is that we will start to see the volume to uptick. For example, the Q4 volume growth is anticipated to be about 3%.

Speaker #4: No, absolutely, Bill. And what we have generally called out, this high volume low value customer take in Q3 of '25. So we basically had the toughest compare with one in this particular quarter.

Speaker #4: And then this will start to taper off in the Q4, which I would say that it will basically start to kind of get muted as we go in Q1 and Q2 of next year.

Speaker #4: But the whole idea here is that if we were to strip out basically this particular dynamic, and a little bit of the path line, the non-oncology testing that we exited, when I drew my map, the volumes are growing in the mid-signal region, very similar to how we have seen in the past.

Speaker #4: So, my sense is that we will start to see the volume uptake. For example, the Q4 volume growth is anticipated to be about 3%.

Abhishek Jain: So we were at, say, zero in Q2. We came there about 2% this quarter, and we're going to be growing at 3%. So you will start to see that the volume will start to normalize in the H2 of 2027.

Speaker #4: So we were at, say, zero in Q2. We came in at about 2% this quarter, and we're going to be growing at 3%.

Speaker #4: So you will start to see that the volume will start to normalize in the back half of 2027.

Bill Bonello: Thanks. That is super helpful. Thank you very much.

Speaker #5: Thanks. That's super helpful. Thank you very much.

Tony Zook: Thanks, Bill.

Speaker #4: Thanks, Bill.

Operator: Next question comes from Mark Massaro at BTIG. Please go ahead.

Speaker #1: Next question comes from Mark Massaro at BTIG. Please go ahead.

Mark Massaro: Hey, guys. Thank you for taking the questions. Tony and Warren, congrats on your new roles. In some of our recent doc call diligence, we found that there are clinicians ordering RaDaR ST in indications that you do not have reimbursement yet. Can you maybe talk about the strategy there? I recognize the volumes are probably small here, but maybe just remind us, I believe RaDaR is a pan-cancer test, so I am just curious if you can speak to whether or not some of the indications that they are ordering in your view, are close to reimbursement, or is this perhaps part of a strategy to increase interest in the platform, pan-cancer, ahead of the reimbursement?

Speaker #6: Hey guys, thank you for taking the questions, and Tony and Warren, congrats on your new roles. In some of our recent doc calls and diligence, we found that there are clinicians ordering Radar ST, and indications that you don't have reimbursement yet.

Speaker #6: Can you maybe talk k about the strategy there? I recognize the volumes are probably small here, but maybe just remind us. I believe radar is a pan-cancer test.

Speaker #6: So I'm just curious if you can speak to whether or not some of the indications that they're ordering in, in your view, are close to reimbursement, or is this perhaps part of a strategy to increase interest in the platform pan-cancer ahead of the reimbursement?

Warren Stone: Yeah. Mark, thank you, and thank you for your kind words as well. I think a couple of points I would like to highlight there. First and foremost, we are actively promoting RaDaR ST for any indication of volumes at this particular point. But IO actually covers a lot of different indications where it is relevant. So it actually has allowed us to proactively broaden our message in the market. Not that we are taking all comers, so to speak, but we can take many more indications than we could before, and that has really helped to drive adoption. We have seen a meaningful uptick there as well. Then I think your other point is that we are taking orders for indications that we are anticipating because we obviously understand the timing for those, and we are trying to prime the pump there as well, even though we are not actively promoting at this stage.

Speaker #3: Yeah, Mark, thank you, and thank you for your kind words as well. I think a couple of points I'd like to highlight there. First and foremost, we are actively promoting RADAR-ST for any indication volumes at this particular point.

Speaker #3: But, you know, I/O actually covers a lot of different indications where it's relevant. So it has allowed us to proactively broaden our message in the market—not that we're taking all comers, so to speak, but we can take many more indications than we could before.

Warren Stone: Not that we are taking all comers, so to speak, but we can take many more indications than we could before, and that has really helped to drive adoption. We have seen a meaningful uptick there as well. Then I think your other point is that we are taking orders for indications that we are anticipating because we obviously understand the timing for those, and we are trying to prime the pump there as well, even though we are not actively promoting at this stage.

Speaker #3: And that's really helped to drive adoption. We've seen a meaningful uptake there as well. And then I think your other point is that we are taking orders for indications that we are anticipating because we obviously understand the timings of those and we're starting to prime the pump there as well, even though we're not actively promoting at this stage.

Warren Stone: If you go back to the prepared remarks, two-thirds of our volume today is in indication, one-third is not.

Speaker #3: And if you go back to the prepared remarks, two-thirds of our volume today is in indication; one-third isn't.

Tony Zook: Yeah. Mark, again, this was a conscious effort on our part, too. When we initially had the good opportunity to re-enter the market, we basically had head, neck, and a subset of breast. So the reality is, while we were excited, it is still onesies and twosies with an individual doctor. They are not going to start to embed you in workflows and broader use until you have a more expansive indication base. That is why IO was so important to us, because for the first time, we could start to position the product more broadly. As Warren said, with the other two indications that we anticipate, all of a sudden, you are now talking more to 40% of the TAM, and we no longer have to settle for the onesies and twosies. We can go after workflow.

Speaker #6: Yeah.

Speaker #4: Yeah. And Mark, again, this was a conscious effort on our part. You know, when we initially had the good opportunity to re-enter the market, you know, we basically had head and neck in a subset of breasts.

Speaker #4: And so it's the reality is while we were excited, it's still one season two season with an individual doctor. They're not going to start to embed you in workflows and broader use until you have a more expansive indication base.

Speaker #4: And that's why I/O was so important to us because for the first time we can start to position the product more broadly. And as Warren said, with the other two indications that we anticipate, all of a sudden you're now, you know, talking north of 40% of the TAM and we no longer have to settle for the one season two season.

Tony Zook: That is why it is such an essential element to secure those as we then head into 2027 from a position of strength. Mark.

Speaker #4: It can go after workflow, and that's why it's such an essential element to secure those as we then head into 2027 from a position of strength.

Mark Massaro: Okay.

Speaker #3: Yeah, Mark. Because it's annual. Just one other thing I had mentioned here is just the halo effect that we're seeing, right? One of the things that Warren said in his remarks was we're seeing about a 30% attached rate from orders with radar.

Andrew Brackmann: It is Andrew. Just one other thing I had mentioned here is just the halo effect that we are seeing. One of the things that Warren Stone said in his remarks was we are seeing about 30% attach rate from orders with RaDaR ST. I think that is sort of what we are seeing across the portfolio. It is less about the single product, single indication in these early days, but more about the broad portfolio effect that we are seeing here with RaDaR ST as an entrance market.

Speaker #3: I think that's sort of what we're seeing across the portfolio, right? It's less about the single product, single indication in these early days, but more about the broad portfolio effect that we're seeing here with radar as that enters the market.

Warren Stone: I think maybe to build on that, the greater majority of that attachment is actually NGS as well. So there is a halo effect you are starting to see come through very clearly.

Speaker #2: And I think maybe to build on that, the greater majority of that attachment is actually NGS as well. So there's a halo effect you're starting to see come through very clearly.

Mark Massaro: Okay, perfect. Then my follow-up. In your press release, you indicated that you expanded agreements with multiple commercial payers in some of your new techs. Are any of these with large national health plans, and can you speak to any progress either with PanTracer Liquid or with RaDaR ST?

Speaker #6: Okay, perfect. And then my follow-up, in your press release, you indicated that you expanded agreements with multiple commercial payers in some of your new techs.

Speaker #6: Are any of these with large national health plans and can you speak to any progress either with Pantrace or Liquid or with radar ST?

Abhishek Jain: Yeah, I can basically say, Mark, that we are not providing that level of detail. There have been a handful of wins in the last one quarter, and I would say the majority of the wins that we are seeing, they are coming in the PanTracer Liquid and for RaDaR ST.

Speaker #4: Yeah, I can basically say, Mark, that we are not providing that level of detail. There have been a handful of wins in the last one quarter.

Speaker #4: And I would say the majority of the wins that we are seeing, they are coming in the Pantrace or Liquid and the N4 radar.

Warren Stone: But yeah, we are not providing more details other than that, but we are very interested to see the trend with many of these tests.

Speaker #4: But yeah, we are not providing like more details other than that, but we are very encouraged to see these wins. With many of these bets.

Tony Zook: Thanks, Mark.

Mark Massaro: Great. Thanks, guys.

Speaker #6: Thanks, Mark. Great. Thanks, guys.

Warren Stone: Thank you.

Speaker #4: Thank you.

Operator: Next question comes from Matt Larew at William Blair. Please go ahead.

Speaker #1: Next question comes from Matt Leroux at William Blair. Please go ahead.

Matt Larew: Hi, good afternoon. You called out improving month-over-month RaDaR volumes following the MolDX decision. Just curious what you are seeing from physicians that gives you confidence this is a sign of real early adoption perhaps versus initial trialing, and would be curious, both Andrew and Warren Stone's comments around attach, just where you are finding the most attach and kind of workflow synergy. I know, Warren, you briefly addressed it in your response there, but would love to hear a bit more.

Speaker #7: Hi, good afternoon. You called out improving month over month radar volumes following the Muldex decision. Just curious what you're seeing from physicians that gives you confidence this is a sign of real early adoption perhaps versus initial trialing and would be curious both to Andrew and Warren's comments around attach.

Speaker #7: Just where you're finding the most attach and kind of workflow synergy. And Warren, you briefly addressed it in your response there, but would love to hear a bit more.

Warren Stone: Yeah. So maybe just, I think what gives us confidence is, I think one of the things that we track is not only new physician adoption, i.e., how many new physicians are coming on board, how many people are coming back multiple times, and we are in the past sort of looked at somebody who reorders a test five or six times creates a bit of a stickiness. We saw this when we were trying to drive adoption for NGS solid tumor previously, driving a similar sort of metric here on RaDaR ST. And we are seeing more and more physicians, particularly now in IO setting, that are actually seem to be sending to us on a regular occurrence. So consider that as sort of sticky and adopted versus trialing, would be what I would describe.

Speaker #3: Yeah, so maybe just I think what gives us confidence is I think one of the things that we track is not only new physician adoption, i.e., how many new physicians are coming on board, how many people are coming back multiple times, and we're in the past of sort of locked at somebody who reorders a test five or six times to create a bit of a stickiness.

Speaker #3: We saw this when we were trying to drive adoption for NGS solid tumor previously. Driving a similar sort of metric here on radar ST and we're seeing more and more physicians, particularly now with NIO setting that are actually seem to be sending to us on a regular occurrence.

Speaker #3: So consider that as sort of sticky and adopted versus trialing would be what I would describe. In terms of the attach rate, there I was actually doing some due diligence on this before the call and there isn't a particular trend that is linked to a certain indication where if it's a specialist or a generous oncologist, it's pretty broad-based where a single oncologist may have an attachment, one patient, but not for the next two.

Warren Stone: In terms of the attach rate, I was actually doing some due diligence on this before the call, and it is not a particular trend that is linked to a certain indication where if it is a specialist or a generalist oncologist. It is pretty broad-based, where a single oncologist may have an attachment with one patient, but not for the next two. They seem to be using it very selectively at this stage, but equating out to about 30%, which has remained consistent from when we reported it after the first quarter of launch. At the end of the Q2, we were at about 30%. We are still there, and volumes increased meaningfully.

Speaker #3: And then for the so they seem to be using it very selectively at this stage, but it's equating out to about 30%, which has remained consistent.

Speaker #3: From when we reported it after the first quarter of launch, at the end of the second quarter, we're at about 30%. We're still there.

Speaker #3: And volumes increased meaningfully.

Tony Zook: Matt, I think you were asking also something there on workflow integration too across our portfolio, where it might be interesting to talk sort of about from diagnosis through markets, right?

Speaker #6: Matt, I think you were asking also something there on workflow integration too across our portfolio. Warren, it might be interesting to talk sort of about from diagnosis through monitoring.

Warren Stone: Yeah, I think great call. I think one of the biggest values that we bring, particularly in a community setting, is that we have this sort of workflow that starts with the primary diagnosis where we actually get to see the patient or the patient sample first because they need the primary diagnosis. That kicks off all of the downstream work. We get that first, and more and more of the work that we are doing, particularly with PanTracer Pro, is trying to actually drive an automatic ordering of downstream workflow requirements. This is a lot of our philosophy is sort of trying to leverage the fact that we get to see the patient first from the primary diagnosis and how can we then attach other downstream testing from that initial testing that we do.

Speaker #3: Yeah, I think that's a great call. So I think one of the biggest values that we bring, particularly in the community setting, is that we have this sort of workflow that starts with the primary diagnosis, where we actually get to see the patient or the patient sample first, because they need the primary diagnosis.

Speaker #3: That kicks off all of the downstream work, so we get that first. And more and more of the work that we're doing, particularly with Pantrace and Pro, is trying to actually drive and automate ordering of downstream workflow requirements.

Speaker #3: So this is a lot of our philosophy is sort of trying to leverage the fact that we get to see the patient first from a primary diagnosis and how can we then attach other downstream testing from that initial testing that we do.

Matt Larew: Yeah, that is really helpful and not to distract from the main stage here, but just on the non-clinical side, it sounds like you are thinking about approaching that differently, and there might be some decisions made about areas that are worth pursuing versus those that are not. Just curious, do you think that is a business that remains attractive for you long term and that you could be well-positioned to grow in at some point, perhaps again, after you have gone through some portfolio rationalization?

Speaker #7: Yeah, that's really helpful. And not to distract from the main stage here, but just on the non-clinical side, it sounds like you're thinking about approaching that differently and there might be some decisions made about areas that are worth pursuing versus those that are not.

Speaker #7: Just curious, do you think that's a business that remains attractive for you long-term and that you can be well positioned to grow in at some point, perhaps again after you've gone through some portfolio rationalization?

Tony Zook: I think it's a great question. I would tell you that again, where is our focus? Our focus long term has to be on what our growth drivers are, and our growth drivers are molecular. I mean, they're NGS, they're MRD, they'll be whole genome. We do think that the pharma segment overall, longer term, can be an enabler of that growth, because it's a kind of a product, that emerging portfolio that they would find attractive, and it fits nicely into what is our biggest driver, which is our clinical business and those very specific technologies. When you look at our emerging database with ODS and what that could look like with a community-based whole genome data set, that could be attractive. When we see how they could enable longer-term growth with launch products in NGS and MRD and whole genome, that's attractive.

Speaker #4: I think it's a great question. I would tell you that, again, whereas our focus, our focus long-term has to be on what our growth drivers are.

Speaker #4: And our growth drivers are molecular, right? I mean, they're NGS, they're MRD, they'll be whole genome. We do think that the pharma segment overall, longer term, can be an enabler of that growth, right?

Speaker #4: Because it's kind of a product that emerging portfolio that they would find attractive. And it fits nicely into what is our biggest driver, which is our clinical business and those very specific technologies.

Speaker #4: And so when you look at our emerging database with ODS and what that could look like with a community-based whole genome data set, that could be attractive.

Speaker #4: When we see how they could enable longer-term growth with launch products, and NGS, and MRD, and whole genome, that's attractive. I just don't believe, just like we looked at with our clinical business, we want to continue to pursue the kind of commodity-based, bespoke solutions that really aren't going to be supportive of long-term growth and margins.

Tony Zook: I just don't believe, just like we looked at with our clinical business, we want to continue to pursue the kind of commodity-based bespoke solutions that really aren't going to be supportive of long-term growth and margins. I think we just need to refocus our energies there. Longer term, it's still an area that we want to be supportive and grow through the value chain on pharma, especially the higher tech part.

Speaker #4: And so, I think we just need to refocus our energies there. But longer term, it's still an area that we want to be supportive and grow through the value chain on pharma, especially the higher-tech part.

Matt Larew: Okay, appreciate it. Thank you.

Speaker #7: Okay, I appreciate it. Thank you.

Operator: Next question comes from Mason Carrico at Stephens. Please go ahead.

Speaker #1: Next question comes from Mason Caracal at Stevens. Please go ahead.

Mason Carrico: Hey, guys. Thanks for taking the questions here. I guess the first one, how are you thinking about the potential impact of the preliminary 2027 rates on the clinical business? Have you guys sized up the headwinds? Do you still think you could grow ASPs in the mid-single digits next year if those were finalized?

Speaker #6: Hey guys, thanks for taking the questions here. I guess the first one: How are you thinking about the potential impact of the preliminary 2027 rates on the clinical business?

Speaker #6: Have you guys sized up the headwinds? Do you still think you could grow ASPs in the mid-single digits next year if those were finalized?

Tony Zook: Yeah, Mason, I'll kick that one off, and Abby, sure you could dive in if you'd like. I think relative to PAMA, when we looked at the preliminary rates that came across, for us, our PAMA exposure, it's relatively low. It's low to mid-single digit millions because we enjoy a book of our business that's more client bill. We have not quite the same exposure that some other companies would have. Knowing that it's in that mid-single digit million, we're confident that we continue to show growth in AUP and other areas of the ASPs over time. The area that we'll obviously have to sharpen our pencils on is that while it's only been single digit millions, and we can absorb a lot of that, it does drop down to EBITDA and through gross margins.

Speaker #4: Yeah, Mason, I'll keep that one off and have a certainly you could dive in if you'd like. I think relative to Pamela, when we looked at the preliminary rates that came across, for us, our NEO exposure, it's relatively low.

Speaker #4: It's low to mid-single digit millions. Because we enjoy a book of our business that's more client bill. So we have not quite the same exposure that some other companies would have.

Speaker #4: So knowing that it's in that mid-single digit million, we're confident that we can continue to show growth in AUP and other areas in the ASPs over time.

Speaker #4: The area that will obviously have to sharpen our pencils on is that while it's only mid-single digit millions and we can absorb a lot of that, it does drop down to EBITDA and through gross margin.

Tony Zook: We'll have to get creative in our expense base and making sure that we're making the right investments. But it is not a big headwind for us as we envision it today.

Speaker #4: So we'll have to get creative in our expense base and making sure that we're making the right investments. But it is not a big headwind for us as we envision it today.

Abhishek Jain: I think you've covered it all, Tony. I think I'll only add to that one, Nathan, that at the end of the day, if our AUP growth is mid-single digit, this basically represents a very small portion of that. Overall, it will not be meaningful, from the AUP growth perspective. It's just that the overall number for the adjusted EBITDA, we will have to basically kind of make up for this number that you would have basically seen as a higher either basically a flow through to the adjusted EBITDA, or would have to basically say, "Okay, do we need to make some conscious choices on our investments?

Speaker #2: I think you've covered it all, Tony. I think I only add to that on Mason that at the end of the day, if our AUP growth is mid-single digit, this basically represents a very small portion of that, right?

Speaker #2: So overall, it will not be meaningful from the AUP growth perspective. It's just that the overall number for the adjusted EBITDA, we will have to basically kind of make up for this number.

Speaker #2: That you would have basically seen as a higher either basically a flow through to the adjusted EBITDA or we'll have to basically see, okay, do we need to make some conscious choices on our investments?

Mason Carrico: Got it. Okay. That makes sense. Maybe for Warren, first, congrats on the new role. I think it was maybe you who touched on this at a past conference or earnings call, but you have talked about a PanTracer Liquid halo effect on PanTracer Tissue. I was wondering if you could be able to quantify that to some degree, I guess. Are you seeing faster tissue order growth in accounts that have adopted PanTracer Liquid versus those that have not yet?

Speaker #6: Got it. Okay, that makes sense. And maybe for Warren, first, congrats on the new role. I think it was maybe you who touched on this at a past conference or earnings call, but you've talked about a halo effect.

Speaker #6: From Pantrace or Liquid on Pantrace or Tissue, I was wondering if you could be able to quantify that to some degree. I guess, are you seeing faster tissue order growth in accounts that have adopted Pantrace or Liquid versus those that have not yet?

Warren Stone: I do not have the answer to that question off the top of my head. I would have to look at that. I can take a stab at it. Okay. Because I was looking at some data yesterday. So what we are seeing that, okay, now based on the PanTracer Pro, now you can actually reflect to a liquid test automatically, right? So what we are clearly seeing that our PanTracer Pro orders are going through the roof, and that basically gives us the optionality that if you are not able to perform the tissue, then we are able to reflect on the liquid. So that is the good part. Maybe I will say not going through the roof. Let us go back to our guidance on the liquid. So basically, we are doing as we have expected on the liquid side of the house.

Speaker #3: I don't have the answer to that question off the top of my head. I'd have to look at that.

Speaker #2: I can take a stab at it because I was looking at some data yesterday. So what we are seeing that, okay, now based on the Pantrace or Pro, now you can actually reflect to a liquid test automatically, right?

Speaker #2: So, what we are clearly seeing is that our Pantrace or Pro orders are going through the roof. And that basically gives us the optionality—basically, that gives us the optionality that if you're not able to perform the tissue, then we are able to reflect on the liquid.

Speaker #2: So that's the good part. And maybe I'll say not going through the roof. Go back to our guidance of the liquid. So basically we are doing as we have expected on the liquid side of the house.

Warren Stone: I mean, basically, this is what happens when finance talks about the growth rate in NGS through the roof. I would not quite quantify it through the roof. It is doing very well, though. We see more the other way around. We seem to start from tissue, and when tissue, we do not have enough tissue or tissue fails, we just reflect the liquid. Yes, we have isolated situations where we have customers that are just using us for liquid and not actually using us for solid yet. We actually, obviously work with to try and drive adoption of tissue in that particular case. We do see this as a growth opportunity in terms of the portfolio. When physicians ordering one not the other, we obviously actively promote against the other test as well.

Speaker #3: I mean, basically, and this has been finance talks about the growth rate in NGS through the roof. I wouldn't like to quantify this through the roof.

Speaker #3: It's doing very well though. We actually see it's more the we see more the other way around. We seem to start from tissue and when tissue, we don't have enough tissue or tissue fails, we get reflex to liquid.

Speaker #3: Yes, we have isolated situations where we have customers that are just using us for liquid and not actually using us for solid chat. And we actually obviously working to try and drive adoption of tissue in that particular case.

Speaker #3: But we do see this as a growth opportunity in terms of the portfolio when a physician is ordering one and not the other, we obviously actively promote against the other test as well.

Warren Stone: PanTracer Pro is our key vehicle here, and it gives them optionality as to where they start.

Speaker #3: But Pantrace or Pro is our key vehicle here. And it gives them optionality as to where they start.

Mason Carrico: Got it. Thank you, guys.

Speaker #6: Got it. Thank you guys.

Tony Zook: Thank you.

Speaker #4: Thank you.

Operator: Next question comes from Tycho Peterson at Jefferies. Please go ahead.

Speaker #1: Next question comes from Tycho Peterson at Jefferies. Please go ahead.

Tycho Peterson: Hey, thanks. I want to probe a little bit on gross margins. I understand you are obviously taking it up here above 150 basis for the year. You have had really two strong back-to-back quarters here. Could you maybe just talk on where you see a ceiling for margins as the Lab of the Future efficiency scale? Anything you can quantify on what X is going to do on margins? In prior quarters, I think you talked about clinical AUP growth was aided by MCO pricing gains. Is any of the portion of the margin expansion you are seeing now tied to structural payer contract improvements that will not repeat next year?

Speaker #6: Hey, thanks. I want to probe a little bit on gross margins. I understand you're obviously taking it up here above 150 basis for the year.

Speaker #6: I mean, you’ve had really two strong back-to-back quarters here. Can you maybe just talk about where you see a ceiling for margins as the Lab of the Future efficiency scales?

Speaker #6: Anything you can quantify on what X is going to do on margins? And then on prior quarters, I think you talked about clinical AUP growth was aided by MCO pricing gains.

Speaker #6: So is any of the portion of the margin expansion you're seeing now tied to structural payer contract improvements that won't repeat next year?

Abhishek Jain: Yeah. On the adjusted gross margin, Tycho, we are seeing a solid growth there of 300 basis point increase year over year. We finished the quarter at adjusted EBITDA margin of 49%. What we are seeing is the benefit of the AUP growth, which is primarily driven by the strong uptick in our NGS revenue, which is a high-margin business. That's the first one. Of course, the second piece stays the RCM, where the benefit will be a direct pull-through to the adjusted gross profit dollars. The third piece is the Lab of the Future, as you called out. I would say that most of the Lab of the Future benefits are driven by the sourcing and the efficiencies within the lab.

Speaker #4: Yeah, on the adjusted gross margin, again, Tycho, we are seeing a solid growth there, a 300 basis point increase year over year. We finished the quarter at the adjusted EBITDA margin of 49%.

Speaker #4: And what we are seeing is a benefit of the AUP growth, which is primarily driven by the strong uptake in our NGS revenue, which is a high margin business.

Speaker #4: So that's the first one. And of course, the second piece stays the RCM, where the benefit will be a direct pull through to the adjusted gross profit dollars.

Speaker #4: And the third piece is the lab of the future, as you called out. I would say the most of the lab of the future benefits are driven by the sourcing.

Speaker #4: And the efficiencies within the lab. We have not yet started to see the impact of the Nova Seek X transition because we just moved our one of the liquid, the liquid portfolio has moved to the Nova Seek X, but that's a relatively small revenue.

Abhishek Jain: We have not yet started to see the impact of the NovaSeq X transition because the liquid portfolio has moved to the NovaSeq X, but that's a relatively small revenue in the overall scheme of things. We are excited about the transition of the heme portfolio that we're anticipating will take the H1 of the next year. We should start to see the impact of the NovaSeq X transition in the H2 of 2027. As we roll out the remaining portfolio of the NovaSeq X in the H2 of 2027, early 2028, I would say 2028 would become the year when we will start to see a more benefit of the transition to the NovaSeq X.

Speaker #4: In the overall scheme of things, but we are excited about the transition of the Heme portfolio that we are anticipating will take the first half of the next year.

Speaker #4: So we should start to see the impact of the Nova Seek X transition in the second half of 2027. And as we roll out the remaining portfolio on the Nova Seek X in the second half of 2027, early 2028, I would say 2028 would become the year when we will start to see a more benefit of the transition to the Nova Seek X.

Warren Stone: Tycho, only thing that I would say is, although I would consider ourselves in the fairly early innings in terms of Lab of the Future initiatives, et cetera, probably innings 3 or something. We have a great sort of outlook in terms of how gross margins can expand. In the short term, the one offset really cognizant of is just we are running a lot of MRD where we're not likely to get reimbursed, and that'll be a headwind from a gross margin perspective.

Speaker #2: Tycho, anything that I would say is although I would consider ourselves in the fairly early innings in terms of lab of the future initiatives, etc., probably in these three or something.

Speaker #2: And we have a great sort of outlook in terms of how gross margins can expand. In the short term, the one-off set incongruences are this: we're running a lot of MRD where we're not likely to get reimbursed, and that'll be a headwind from a gross margin perspective.

Tycho Peterson: Okay. That's helpful. Follow-up, you had a number of questions on the exit of kind of high volume, low value tests. I'm wondering just practically how you're handling that in the community channel, just in terms of retention of the community level relationships where you have account level relationships and you're no longer offering the high volume commodity tests that those practices need for broader patient population. How are you kind of managing that practically in the channel?

Speaker #6: Okay. That's helpful. Follow up, you had a number of questions on the exit of kind of high volume, low value test. I'm wondering just practically how you're handling that in the community channel, just in terms of retention of the community level relationships where you have account level relationships and you're no longer offering the high volume commodity test that those practices need for broader patient populations.

Speaker #6: So how are you kind of managing that practically in the channel?

Warren Stone: Tycho, the high-volume, low-value business that we were exiting was actually not a product that we were exiting, it was one customer that we secured about a year ago, maybe 15, 18 months ago. We decided to no longer do that business with that customer because it wasn't profitable. Those tests are still readily available within our portfolio, and the community channel are actively using them. So this was a one customer scenario, not an overall product discontinuation.

Speaker #3: Tycho, the high volume, low value business that we're exiting was actually not a product that we're exiting. It was one customer. That we secured about a year ago, maybe 15, 18 months ago.

Speaker #3: We decided to no longer do business with that customer because it wasn't profitable. Those tests are still readily available within our portfolio, and the community channel is actively using them.

Speaker #3: So this was a one-customer scenario, not an overall product discontinuation.

Tycho Peterson: Okay. Lastly, just on pharma, you had the question earlier on longer-term strategic value of that business. In the near term, has that segment bottomed? I guess, just touch on the corrective actions you're taking that could allow it to return to growth next year.

Speaker #6: Okay. And then lastly, just on pharma, you had the question earlier on longer term, strategic value of that business. I'm just in the near term, has that segment bottomed and I guess just touch on the corrective actions you're taking that could allow it to return to growth next year.

Tony Zook: Yeah. I would say, Tycho, our view relative to 2027 hasn't really fundamentally changed, right? We still see that we want to prioritize the key growth drivers that I've mentioned before, the NGS, MRD, and whole genome. We don't just want to pursue new kind of low value bespoke solutions within that segment. But I would say in general, we still see the potential for return to growth to be slightly positive in 2027. We still see our growth coming from the NGS segment. That's showing really good quality revenue. But I would say, the legacy pharma would be low single digit kind of decline, but net-net, it would be slightly up. Tycho, again, I would probably just say in general, it's not material really to the 2027 guide because to be up positive growth, we're talking a difference of 1 or 2 million.

Speaker #4: Yeah. I would say Tycho, our view relative to 2027 hasn't really fundamentally changed, right? We still see that we want to prioritize the key growth drivers that I've mentioned before, the NGS, MRD, and whole genome.

Speaker #4: We don't just want to pursue new kind of low value bespoke solutions within that segment, but I would say in general, we still see the potential for return to growth to be slightly positive in 2027.

Speaker #4: We still see our growth coming from the ODS segment. That's showing really good quality revenue. But I would say the legacy pharma would be low single-digit kind of decline that net net it would be slightly up.

Speaker #4: Tycho, again, I would probably just say in general, it's not really material that the 2027 guide, because to be up positive growth, we're talking a difference of one or two million.

Tony Zook: If you miss the number, it's by 1 or 2 million, it's probably not going to be material to how we view the business in 2027. The real opportunity for the pharma piece is how it can help drive our revenues in 2028 and beyond as we bring out things like next gen MRD and whole genome and things like that.

Speaker #4: If you miss the number, it's by one or two million. It's probably not going to be material to how we view the business in 2027.

Speaker #4: And the real opportunity for the pharma piece is how it can help drive our revenues in 2028 and beyond, as we bring out things like next-gen MRD and whole genome, and things like that.

Tycho Peterson: Okay. Thank you.

Speaker #6: Okay. Thank you.

Tony Zook: Yep.

Speaker #4: Yeah.

Operator: Next question comes from Dan Brennan at TD Cowen. Please go ahead.

Speaker #1: Next question comes from Dan Brennan at TD Cowan. Please go ahead.

Dan Brennan: Great. Thank you.

Tony Zook: Hey, Dan.

Dan Brennan: Thanks for the questions. Tony, congrats, and obviously, Warren Stone, congrats.

Speaker #6: Great. Thank you. Thanks for the questions. Hey, Tony, congrats. And obviously, Warren, congrats. Maybe just one on just starting MRD. What mid-single-digit revenue guide was for this year, right?

Tony Zook: Good to have you.

Dan Brennan: Maybe just one on, just starting MRD, what mid-single digit revenue guide was for this year, right? So any color what it was actually in the quarter, and just thinking through with IO being such a larger market than the first two that you have, as Tony Zook alluded to, I would think doubling

Speaker #6: So any color what it was actually in the quarter and just thinking through with IO being such a larger market than the first two that you have as Tony alluded to, I would think doubling from 5 million is not a big Herculean task in 2027.

Tony Zook: Yeah

Dan Brennan: from $5 million is not a big Herculean task in 2027. Any way to think about how much that IO opportunity can mean in 2027?

Speaker #6: Any way to think about how much that IO opportunity can mean in 2027?

Tony Zook: Yeah. We will definitely go into 2027 in 2027, Dan. You know my view on that, right? We have got to keep both our feet in this quarter, and we still have a quarter to deliver. Relative to the mid-single digit millions we posted for RaDaR and LBx, I would tell you that in totality, we are pretty much in line with those expectations to be maybe even slightly positive. On RaDaR, very specifically, that was broken, if you remember, there were two parts of that. There was clinical as well as pharma. I would say on the clinical side, Dan, we like what we are seeing relative to the volumes. Those plans seem to be moving in the direction that we anticipated relative to that key assumption. Now the key is just pulling it through, right? Continuing to beat down the commercial side and securing additional indications would also go a long way.

Speaker #4: Yeah. We'll definitely go with the 2027 in 2027, Dan. You know my view on that, right? We've got to keep both our feet in this quarter, and we still have a quarter to deliver.

Speaker #4: Relative to the mid-single-digit millions, we posted for radar and LBX. I would tell you that in totality, we're pretty much in line with those expectations.

Speaker #4: To be maybe even slightly positive. On radar, very specifically, that was broken if you remember, there were two parts of that. It was clinical as well as pharma.

Tony Zook: There was clinical as well as pharma. I would say on the clinical side, Dan, we like what we are seeing relative to the volumes. Those plans seem to be moving in the direction that we anticipated relative to that key assumption. Now the key is just pulling it through, right? Continuing to beat down the commercial side and securing additional indications would also go a long way.

Speaker #4: I would say on the clinical side, Dan, we like what we're seeing relative to the volumes. Those plans seem to be moving in the direction that we anticipated relative to that key assumption.

Speaker #4: Now the key is just pulling it through, right? Continuing to beat down the commercial side and securing additional indications would also go a long way.

Tony Zook: Pretty much in line there. The pharma adjustment that we said lows double digits, that did include a little bit of what was in there for RaDaR, and that was more of contract timing. I would again say on the clinical side, it is pretty much right where we thought we would be. Pharma may be just a hair behind, and that is more on the timing, but in totality between RaDaR as well as LBx, we are on it, not slightly ahead of that mid-single digit million number. Okay?

Speaker #4: So pretty much in line there. The pharma, adjustment that we said lows double digits, that did include a little bit of what was in there for radar, and that was more a contract timing.

Speaker #4: So I would again say on the clinical side, it's pretty much right where we thought we would be. Pharma maybe just a hair behind, and that's more on the timing.

Speaker #4: But in totality, between RADAR as well as LBX, we're on, if not slightly ahead of, that mid-single-digit million number. Okay.

Dan Brennan: Great. Thanks for that, Tony. Obviously NGS, very clearly ringing through is the future growth, future margins.

Speaker #6: Great, thanks, Tony. And then obviously, NGS—very clearly ringing through is the future growth, future margins. You mentioned the penetration opportunity in CGP, but when you talk to all the large CLIA labs, I mean, they're obviously going after this market extremely hard, and the community is important.

Tony Zook: Yeah.

Dan Brennan: You mentioned the penetration opportunity in CGP, but when you talk to all the large CLIA labs, they are obviously going after this market extremely hard and the community is important. Can you just give some color about, I know there was a question from Puneet earlier about trying to disaggregate maybe same store sales growth versus new clients, but is there a way to discuss how often you run into large CLIA labs? What is the overlap of your customers versus theirs? Have you guys discussed any kind of win rates versus them? If you have, how have those been trending, steady, up, down? Anything of that nature. Thank you.

Speaker #6: So any can you just give some color about I know there's a question from Puneet earlier about trying to disaggregate maybe same source sales growth versus new clients, but there's a way to discuss kind of how often you run into large clay labs.

Speaker #6: What's the overlap of your customers versus theirs? And have you guys discussed any kind of win rates versus them? And if you have, how have those been trending steady, up, down?

Speaker #6: Anything of that nature. Thank you.

Warren Stone: Again, it's a complicated analysis. We obviously see most of the large CLIA labs in most of our customers. Seldom that we don't at the end of the day. It's very regionalized in terms of who we bump into. A lot of our business is certainly take away from a number of those players based on our portfolio opportunity, from diagnosis and therapy selection, not MRD. Those discounts affect that we have a foot in the door all the time from the heme side of things. That creates a unique position for us. We always have that seat at the table, and that's a leverage point for us. They're typically sending high volumes to us. We have couriers arriving every single day to collect samples, and our workflow simplification is really a key driver for us. That's why we're winning.

Speaker #3: Dan, it's a complicated analysis. I mean, we obviously see most of the large clay labs in most of our customers are seldom that we don't at the end of the day.

Speaker #3: It's very regionalized in terms of who we bump into. A lot of our business is certainly takeaway from a number of those players, based on our portfolio opportunity.

Speaker #3: From diagnosis and therapy selection, now MRD, those discounts affect that we have a foot in the door all the time from the heme side of things that creates a unique position for us.

Speaker #3: So we always have that seat at the table. And that's a leverage point for us. They typically send high volumes to us. We have couriers arriving every single day to collect samples.

Speaker #3: And it just our workflow simplification is really a key driver for us. So that's why we're winning. That's why we differentiate exactly what the win rate is.

Warren Stone: That's why we differentiate exactly what the win rate is relative to different competition, I don't have that data.

Speaker #3: I don't have relative to different competition. I don't have that data.

Dan Brennan: Great. Thank you.

Speaker #6: Great. Thank you.

Tony Zook: Thanks, Dan.

Speaker #4: Thanks, Dan.

Operator: Next question will be from Subbu Nambi at Guggenheim. Please go ahead.

Speaker #1: Next question will be from Subunambi at Guggenheim. Please go ahead.

Subbu Nambi: Hey, guys. Thank you for taking my question. I have a slightly different question on NGS. What share of NGS volume is now comprehensive panels versus targeted, and where do you expect that mix to settle? How much AUP runway is left from the mix shift alone?

Speaker #5: Hey, guys. Thank you for taking my question. I have a slightly different question on NGS. What share of NGS volume is now comprehensive panels versus targeted?

Speaker #5: And where do you expect that mix to settle? How much AUP runway is left from the mix shift alone?

Warren Stone: We from a. So are you talking from a volume perspective or revenue perspective?

Speaker #3: We're talking from a volume perspective or revenue perspective?

Subbu Nambi: Let's start with volume.

Speaker #5: Let's start with volume.

Warren Stone: Yeah. So we're quickly approaching a 50/50 mark now between large and targeted panels, from a volume perspective. Slightly higher volumes on the large panel on the heme side, and slightly smaller, lower volumes on the large panel on the solid tumor side is how the mix is actually breaking out. But the growth rate in terms of large panel, as we indicated, north of 25%, we quickly see the shift taking place. That's part of what's helping from a mix shift perspective and supporting higher AUPs.

Speaker #3: Yeah, so we're quickly approaching sort of a 50/50 mark now between large and targeted panels. From a volume perspective, slightly so—with slightly higher volumes on the large panel on the heme side and slightly lower volumes on the large panel on the solid tumor side—is sort of how the mix is actually breaking out.

Speaker #3: But the growth rates in terms of large panel as we indicated north of 25%, we are quickly see the shift taking place. And that's part of what's helping from a mix shift perspective and supporting higher AUPs.

Subbu Nambi: So there should be much more AUP runway left even next year as the mix shift continues, right?

Speaker #5: And so there should be much more AUP runway left even next year as the mix shift continues, right?

Warren Stone: Yes.

Tony Zook: Yes.

Warren Stone: Yeah. Yes.

Speaker #3: Yes. Yeah. Yes.

Subbu Nambi: Perfect. On pricing, how many of the 300 contracts that you have renegotiated since Q2, how much of that uplift is still ahead of you in 2027?

Speaker #5: Perfect. And then on pricing, how many of the 300 contracts that you have renegotiated since 2Q, how much of that uplift is still ahead of you in 2027?

Warren Stone: I am not sure which 300 contracts are you referring to, Subbu?

Speaker #4: I'm not sure if we switch or 300 contracts are you referring to, Subu?

Subbu Nambi: That you guys spoke about renegotiating since Q2, that you were revisiting all the accounts and that is how you found out this high volume, low contract customer that you exited. Or do I have that?

Speaker #5: That you guys spoke about renegotiating since 2Q. You were revisiting all the accounts and that's how you found out this high volume, low contract customer that you exited.

Tony Zook: No.

Speaker #5: Or do I have that right? Do I have that wrong?

Subbu Nambi: Do I have that wrong?

Tony Zook: Actually, maybe, Subbu, we do not recall the 300 contracts comment.

Speaker #4: Actually, maybe Subu, we do not recall the 300 contracts comment.

Subbu Nambi: Okay. No worries. You noted a 30% attachment rate of RaDaR ST to other NeoGenomics tests. What is the internal goal for attachment, and how do you plan to get there? That will be it. Thank you, guys.

Speaker #5: Okay. Okay. No worries. You noted a 30% attachment rate of radar SD to other neo test. What's the internal goal for attachment and how will you how do you plan to get there?

Speaker #5: That would be it. Thank you, guys.

Tony Zook: Thank you.

Speaker #4: Thank you.

Warren Stone: I think we did set ourselves a goal, and we are actually in the midpoint of our goal at this particular point, from an attachment rate perspective. So we are actually seeing quite an encouraging uplift. As you said, at 30%, we are in the mid-range of the goal. However, we have identified a few other opportunities whereby we feel over time we can increase that attach rate further. Not necessarily MRD attached to NGS, it is also the other way around. If you are now doing the NGS, you may have a TMB high outcome. Logically, you are a candidate for RaDaR ST with IO, and how can we actually attach from NGS to RaDaR ST? So we are thinking about attachments from both ways. The 30% that we called out is just RaDaR ST to other testing where we feel we can also drive it in the other direction, if that makes sense.

Speaker #3: I think the we did set ourselves a goal and reaction in the midpoint of our goal at this particular point from an attachment rate perspective.

Speaker #3: So we're actually seeing quite an encouraging uplift. As we said, a 30%. We're in the mid-range of the goal. However, we have identified a few other opportunities whereby we feel over time we can increase that attach rate further.

Speaker #3: But not necessarily MRD attached to NGS. It's also the other way around. You're now doing the NGS, you may have a team with a high outcome.

Speaker #3: Logically, you're a candidate for RADAR SD with IO. And how can we actually attach from RADAR from NGS to RADAR? So we're thinking about attachments from both ways.

Speaker #3: The 30% that we called out is just radar to other testing where we feel we can also drive it in the other direction if that makes sense.

Subbu Nambi: Definitely. Thank you so much, and congratulations again, Warren.

Speaker #5: Definitely. Thank you so much, and congratulations again, Martin.

Warren Stone: Thank you, Subbu.

Tony Zook: Thanks, Subbu.

Speaker #3: Thank you, Subu.

Speaker #4: Thank you, Subu.

Operator: Next question comes from Lu Li at Bank of America. Please go ahead.

Speaker #1: Next question comes from Luli at Bank of America. Please go ahead.

Lu Li: Great. Thank you for squeezing me in. I will keep the question short. I guess I think you mentioned you are going to increase the MRD investment, including the sales force. I am wondering, can you give a little bit more color in terms of the size of the investment, and then maybe specific areas that you are going to invest? Then just another quick one. In terms of Oncology Data Solutions that you see as emerging opportunities, I wonder, you do have a large data for a while. I guess, what kind of strategy that you are planning to monetize that asset? Thank you.

Speaker #5: Great. Thank you for squeezing me in. So I will keep the question short. I guess I think you mentioned you're going to increase the MRD investment, including the Salesforce.

Speaker #5: Wondering, can you give a little bit more color in terms of the size of the investment and then maybe specific areas that you're going to invest?

Speaker #5: And then just another quick one. In terms of oncology data that you see as emerging opportunities, I wonder—you do have a large dataset for a while.

Speaker #5: So I guess, what kind of strategy are you planning to use to monetize those assets? Thank you.

Tony Zook: Yeah, maybe just on the first one, and then Warren, you can take the second. Relative to the investment areas for us now and moving into the future, we will get more specific and give you some metrics for 2027 in 2027. But the areas that we would continue to invest would certainly be on the sales force side. We are still a little under indexed. There is more opportunity for us there. So Warren and his team, and Kristi, they have nicely ramped up the selling resources available to us today, but there is probably more opportunity there. We are not talking doubling or anything of that nature. So it would be a really disciplined expansion on the sales force side that we would be happy to share when we get into the February session.

Speaker #4: Yeah, maybe just on the first one and then where you could take the second. Relative to the investment areas for us now and moving into the future, we'll get more specific and give you some metrics for 27 in 27.

Speaker #4: But the areas that we would continue to invest in would certainly be on the Salesforce side. We're still a little under-indexed, and there's more opportunity for us there.

Speaker #4: So Warren and his team and Christine, they nicely ramped up the selling resources available to us today. But there's probably more opportunity there. We're not talking doubling or anything of that nature.

Speaker #4: So it would be a really disciplined expansion on the Salesforce size that we'll be happy to share when we get into the February session.

Tony Zook: Likewise, we will continue to invest in the R&D side of our house because any indication growth that we can get for our portfolio serves us not just in revenue growth, but also bad debt because we can start to collect some money back on these things. So expect R&D to go from what was in that 4% to 5% range we are talking now, 7%. So, a step up, but it will not be crazy. We will also continue to invest in Lab of the Future initiatives where we see that we can be really good with our investments and drive margin. So those will be the areas that we will continue to look to invest. But I would tell you there will be some offsets as well, right? We are going to continue to get smart in G&A. We want to continue to drive that down.

Speaker #4: Likewise, we'll continue to invest in the R&D side of our house because any indication growth that we can get for our portfolio serves us not just in revenue growth, but also bad debt because we can start to collect some money back on these things.

Speaker #4: So expect R&D to go from what was in that 4% to 5% range. We're talking now about 7% ish. So it's a step up, but it won't be crazy.

Speaker #4: We'll also continue to invest in Lab of the Future initiatives, where we see that we can be really good with our investments and drive margins.

Speaker #4: So those will be the areas that we'll continue to look to invest. But I would tell you there'll be some offsets as well. Right?

Speaker #4: We're going to continue to get smarter in G&A. We want to continue to drive that down. We have a number of efficiency goals across the organization as well.

Tony Zook: We have a number of efficiency goals across the organization as well, so it will not be all additive because we still want to have a disciplined approach to EBITDA. So that is kind of a high level of where we are going. Warren, on the second part.

Speaker #4: So it won't be all additive because we still want to have a disciplined approach to EBITDA. So that's kind of the high level of where we're going and Warren on the second part.

Warren Stone: Yeah, I think on the data side of things, you are absolutely right. We have been generating data from the testing that we have been doing for many years. Up until recently and probably the 2023 timeframe, most of our data was image data. It was not genomics data. So, maybe in terms of what pharma is looking for today, less valuable, the image data than it is genomics data. So, since 2000 C, we started to develop quite a robust database, and we expect that database to grow significantly as we launch the WGS portfolios in 2028 and beyond. So, this is an attractive business for us. It is growing in the double digits, and it is very high margin business, so we are going to continue to invest in there. Actually the raw material, so to speak, is going to continue to grow at a compounded rate based on our NGS growth rate.

Speaker #3: Yeah, I think on the data side of things, you're absolutely right. We've been generating data from the testing that we've been doing for many years.

Speaker #3: Up until recently and probably the 2023 timeframe, most of our data was image data. It wasn't genomics data. So maybe in terms of what farmers are looking for today, less bad, less valuable, the image data than it is genomics data.

Warren Stone: So, since 2000 C, we started to develop quite a robust database, and we expect that database to grow significantly as we launch the WGS portfolios in 2028 and beyond. So, this is an attractive business for us. It is growing in the double digits, and it is very high margin business, so we are going to continue to invest in there. Actually the raw material, so to speak, is going to continue to grow at a compounded rate based on our NGS growth rate.

Speaker #3: So since 2003, we started to develop quite a robust database and we expect that database to grow significantly as we launch the WGS portfolios in 2028 and beyond.

Speaker #3: So this is an attractive business for us. It's growing in the double digits and it's very, very high margin business. So we're going to continue to invest in there and actually the raw material, so to speak, is going to continue to grow to compounded rate based on our NGS growth rate.

Lu Li: Thank you.

Speaker #5: Thank you.

Warren Stone: Thank you.

Speaker #4: Thank you.

Operator: Next question will be from Mike Matson at Needham. Please go ahead.

Speaker #1: Next question will be from Mike Madsen at Needham. Please go ahead.

[Analyst] (Needham): Hey, guys.

Warren Stone: Hey, Mike.

[Analyst] (Needham): I really appreciate you getting us on. This is actually Joseph on for Mike. I will just keep it to one, just given that it is late in the call. Maybe just on the Indica Labs partnership. Was wondering if you could give some more color on the breadth of what is being collaborated there. Is this something that maybe we should expect development of an AI pathology tool for specifically in clinical diagnostics, or is this likely to stay in the research side of it for the time being?

Speaker #6: Hey, guys. Really appreciate you getting us on. This is actually Joseph on for Mike. I'll just keep it to one, just given that it's late in the call.

Speaker #6: Maybe just on the indicate labs partnership. I was wondering if you could give some more color on the breadth of what's being collaborated there.

Speaker #6: Is this something that maybe we should expect—the development of an AI pathology tool specifically in clinical diagnostics—or is this likely to stay in kind of the research side of it for the time being?

Warren Stone: No. We have had a partnership with Indica Labs for a number of years. We actually started this back in 2016, and it is the reason why we have so many images that we actually sell on the ODS side of things right now because they were digitized all the way back to 2016. We have expanded that. We like Indica Labs because it is an open system, different to other providers. Ultimately, we see two primary areas where we are going to get a lot of efficiency. One is operational efficiency, and it is all AI driven at the end of the day, where we can use AI interpretation of digital images. That is going to be a big area of focus for us.

Speaker #3: No, so we've had a partnership with Neolabs for a number of years. We actually started this back in 2016, and it's the reason why we have so many images that we sell on the ODS side of things right now, because they were digitized all the way back to 2016.

Speaker #3: So we've expanded that. We like Indica Labs because it's an open system. Different to other providers. And ultimately, we see two primary areas where we're going to get a lot of efficiency.

Speaker #3: The one is this operational efficiency and it's all AI-driven at the end of the day where we can use AI interpretation of digital images.

Speaker #3: So that's going to be a big area of focus for us. It's one of the lab initiative lab of the future initiatives that's going to help and it's particularly going to free up capacity on the doctor side of things where they do the sign-outs.

Warren Stone: It is one of the Lab of the Future initiatives that is going to help, and it is particularly going to free up capacity on the doctor side of things where they do the sign out. Absolutely, these are going to be AI algorithms which will ultimately be tested to support diagnosis and therapy selection decisions. We see it both commercially and operationally creating value for us.

Speaker #3: And then, absolutely, these are going to be AI algorithms which will ultimately be tested to support diagnosis and therapy selection decisions. So we set both commercially and operationally, creating value for us.

[Analyst] (Needham): Okay. Very helpful. Congrats on your strong quarter, you guys.

Speaker #6: Okay, very helpful. Congrats on the strong quarter, you guys.

Warren Stone: Thank you very much. Appreciate it.

Speaker #3: Thank you very much. I appreciate it.

Operator: At this time, we have no other questions. I would like to turn the call over to Tony Zook.

Speaker #1: At this time, we have no other questions. I would like to turn the call over to Tony Zuk.

Tony Zook: I would like to thank everybody for joining us on the call, and I want to personally thank my NeoGenomics teammates for their unwavering commitment to our mission. It has been a privilege to lead this company, and I leave this role with great confidence in Warren, our leadership team, and our strategy. We will look forward to updating you on our Q4 results and 2027 outlook in February with Warren leading the call. Thank you again, and have a great day, everybody.

Speaker #4: I'd like to thank everybody for joining us on the call, and I want to personally thank my NeoGenomics teammates for their unwavering commitment to our mission.

Speaker #4: It's been a privilege to lead this company, and I leave this role with great confidence in Warren, our leadership team, and our strategy. We'll look forward to updating you on our fourth quarter results and 2027 outlook in February, with Warren leading the call.

Speaker #4: Thank you again and have a great day, everybody.

Operator: Thank you. This does conclude today's conference call. You may now disconnect your lines at this time. Thank you again for your participation.