Joseph

Joseph asked about expectations for submitting for reimbursement in 2026 for colorectal cancer (CRC) and neoadjuvant breast cancer, given the heightened focus on these areas.

Answer

Chris Hall, Chief Executive Officer and President, confirmed they are driving hard to submit for coverage for both indications this year, though exact timelines depend on publication acceptance and are not currently factored into the guidance. Joseph also inquired about the evidence generation strategy for additional cancer indications, specifically if the focus is shifting from large landmark studies to a greater quantity of smaller trials. Rich Chen, Chief Medical Officer and EVP R&D, stated they will continue working with top KOLs for baseline evidence and are expanding into clinical utility studies to influence guidelines, noting significant inbound interest. Joseph further asked about lab optimization, automation, and the company's readiness to ramp up reimbursed clinical volume. Aaron Tachibana, Chief Financial and Chief Operating Officer, explained that automation and workflow streamlining are ongoing, with continuous efforts to strip out costs and increase efficiency, and they believe they are well-positioned, with future margins also influenced by biopharma revenue and additional coverage decisions.

Joseph asked about expectations for reimbursement submission in 2026 for colorectal cancer (CRC) and neoadjuvant breast cancer. He also inquired about the strategy for evidence generation for additional cancer indications, specifically if the focus remains on large landmark studies or if smaller studies will suffice for Medicare. Finally, he asked about lab optimization and automation efforts to ramp up reimbursed clinical volume and achieve high gross margin targets.

Answer

Chris Hall, CEO and President, confirmed they are driving hard to submit for coverage for CRC and neoadjuvant breast cancer this year, dependent on publication timelines. Rich Chen, Chief Medical Officer and EVP of R&D, stated they will continue working with top KOLs for baseline evidence and are seeing inbound interest for clinical utility studies to influence guidelines. Chen also noted ongoing efforts to automate and streamline workflows, strip out costs, and be efficient as they add capacity, emphasizing that full optimization is a continuous process.

Joseph, on behalf of Matt Carranza, asked about the lower-than-expected flow-through on sales outlook for 2026, inquiring if there were incremental investments beyond footprint realignment impacting profitability.

Answer

EVP, CFO, and Treasurer Jon Douyard explained that beyond the footprint headwind, which is consistent with last year but increased towards year-end 2025, and some FX headwinds from the peso, no other significant incremental investments are expected. He noted continued progress in operational rigor and material savings.

Joseph inquired about Pathline's impact as an AUP headwind, the timeline and strategy for integrating more NGS into the Pathline lab or leveraging Pathline for NGS pull-through, and NeoGenomics' updated NGS growth target for Q4 2025 and 2026, given recent acceleration.

Answer

CFO Jeff Sherman clarified that NGS work from Pathline will be performed at other NeoGenomics sites (Florida, California) to leverage existing capacity and achieve operating leverage, while Pathline focuses on rapid turnaround tests. CEO Tony Zook emphasized Pathline's role in addressing Northeast underpenetration, with legal integration and assay validations completed, enabling a full NeoGenomics portfolio offering and driving growth in 2026+. CFO Jeff Sherman stated that a Q4 specific NGS growth guide was not provided, but continued good growth is expected.

Joseph asked about Pathline's impact on AUP and the timeline for integrating more NGS into the Pathline lab. He also inquired about the company's expectations for NGS growth in Q4 2025 and 2026, given the recent acceleration and the target of 25% or more.

Answer

CFO Jeff Sherman clarified that NGS work from Pathline would be performed at other NeoGenomics sites (Florida, California), leveraging Pathline's fast turnaround times for other tests to pull through NGS volume to existing labs, thereby gaining operating leverage. CEO Tony Zook added that Pathline's strategy is to address underpenetration in the Northeast, with legal integration and assay validations complete, leading to a healthy new customer list and expected growth in 2026 and beyond. Jeff Sherman stated that while continued good NGS growth is expected, specific Q4 2025 and 2026 targets were not being broken out.

Asked for clarification on the FY25 guidance in light of Q3's outperformance, visibility into the FY26 growth drivers, and the company's current view on the M&A market and strategy.

Answer

The FY25 guidance was narrowed and the midpoint raised slightly, reflecting some Q3 order pull-in but overall confidence. The FY26 outlook is supported by strong retailer commitments for new products post-SHOT Show. The company remains disciplined on M&A, noting potential tariff-related pauses in the market, and is focused on opportunities with recurring revenue streams.