Eric Caldwell

Eric Caldwell asked for clarification on the margin profile's moving pieces in Q3 and Q4, specifically sizing Project Nova and other investments relative to last year or original expectations, and their potential impact into 2026.

Answer

CFO Sam Samad stated that initial investment spend for the year was roughly $30 million ($10 million for LDT regs/QARA, $20 million for Project Nova). Most of the QARA spend occurred, but a significant portion of the $20 million for Nova was pushed to Q4 due to timing, not impacting 2026 negatively. He reiterated the 6-7 year implementation of Nova, with an expected total investment of $250-$310 million (OpEx and CapEx), consistent with prior guidance. He emphasized the ability to control the pace of these investments based on PAMA and macro conditions.

Eric Caldwell asked for clarification on the magnitude of Project Nova and other investment impacts on the Q4 margin profile, including any slippage from Q3, and how these investments might play out year-over-year in 2026 compared to original expectations.

Answer

CFO Sam Samad explained that initial investment spend for the year was roughly $30 million ($10 million for LDT regs, $20 million for Project Nova). Most of the LDT regs spend occurred, but a significant portion of the $20 million for Nova was pushed into Q4 due to timing, without a negative bleed-over effect into 2026. He reiterated the 6-7 year, $250-$310 million total investment for Nova (OpEx and CapEx) is consistent with prior expectations, and the pace of these investments can be controlled based on business headwinds like PAMA.