Joseph

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.