Adaptive Biotechnologies Corp (ADPT)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $52.4M (+25% y/y) with MRD revenue $43.7M (+34% y/y); Immune Medicine revenue was $8.7M (-6% y/y). Adjusted EBITDA loss improved to $12.7M from $28.2M y/y, and net loss narrowed to $29.8M from $47.5M y/y .
• Management raised FY25 MRD revenue guidance to $180–$190M, lowered total OpEx to $335–$345M, and reduced cash burn to $50–$60M; sequencing gross margin reached 62% (+17pp y/y), supporting margin trajectory .
• clonoSEQ test volume hit a record 23,117 (+36% y/y), with blood-based testing at 44% of U.S. MRD tests and expanded Medicare coverage for MCL recurrence monitoring (CLFS $2,007/test) acting as catalysts for volume and ASP uplift .
• Versus S&P Global consensus, ADPT delivered a revenue beat ($52.4M vs $42.7M*) and an EPS beat (-$0.20 vs -$0.31*), driven by clinical volume momentum and MRD milestones; guidance implies continued sequential growth and potential upside from milestones and EMR integrations .
• Near-term stock reaction catalysts: raised guidance, strong clinical volumes, expanded Medicare coverage in MCL, and visibility on EMR/Flatiron integration and NovaSeq X margin benefits in 2H25 .

What Went Well and What Went Wrong

What Went Well

• “We had a strong start to 2025 with 34% MRD revenue growth,” with clonoSEQ volumes at 23,117 (+36% y/y), highlighting scalable MRD execution and pricing discipline .
• Sequencing gross margin improved to 62% (+17pp y/y), reflecting lower overhead, stable direct labor, and pricing gains; MRD Adjusted EBITDA loss improved to -$4.1M from -$17.3M y/y .
• Expanded Medicare coverage for clonoSEQ in MCL recurrence monitoring at $2,007/test and payer contracting wins (Aetna, Humana, Anthem, Horizon, BCBS plans) support ASP uplift toward ~$1,300 in FY25 .

What Went Wrong

• Immune Medicine revenue declined 6% y/y to $8.7M, reflecting lower Genentech amortization despite growth in pharma/academic services; segment Adjusted EBITDA loss remained at -$5.4M .
• Interest expense ($2.9M) from the revenue interest agreement offset interest income ($2.7M), and total net loss was still sizable at -$29.8M (EPS -$0.20) despite improvements .
• Management maintained caution on timing of MRD milestones and operational savings from EMR integrations, highlighting dependencies on FDA dynamics and account-side IT resources (limiting near-term operating leverage recognition) .

Financial Results

Summary vs prior quarter and prior year

Margins (calculated)

Note: Net Income Margin % calculated from reported net loss and revenue; citations reference source values.

Segment Breakdown

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “We are raising our full year MRD revenue guidance while lowering our operating expenses and cash burn targets,” emphasizing MRD scalability and disciplined execution .
• CFO: “Sequencing gross margin…was 62% for the quarter…a significant improvement of 17 percentage points versus prior year,” with MRD revenue mix 65% clinical / 35% pharma and milestones $4.5M .
• CCO MRD: “We now have 27 live [EMR] integrations…we are seeing a notable lift…growth in integrated accounts is outpacing growth in nonintegrated accounts,” supporting adoption and operating efficiency over time .
• CEO: Cash position of ~$233M provides “ample runway…without the need to raise additional capital,” underpinning execution on MRD profitability and IM programs .

Q&A Highlights

• Volume trajectory: Management expects sequential growth in clonoSEQ volumes through FY25, with particular strength in DLBCL and MCL; community accounts and EMR integrations materially contributing .
• Milestones outlook: Funnel expanding post-ODAC; more milestones becoming available earlier, but guidance remains prudent given FDA timing considerations .
• EMR efficiencies: Anecdotal 90% reduction in callbacks at largest integrated account; operational savings not yet in FY25 guide, potential medium-term leverage and faster time-to-cash .
• Gross margin and NovaSeq X: NovaSeq X still on track for 2H25; reiterated 5–8pp GM improvement in first 12 months post launch; long-term target 70%+ gross margin at scale .
• Pricing discipline: Contracts set near Medicare rates; multiple national payer wins support ASP progression toward ~$1,300/test .

Estimates Context

Values retrieved from S&P Global.
Interpretation: Strong top-line and EPS beats vs consensus driven by clinical volume momentum, ASP improvement, and MRD milestones recognition .

Key Takeaways for Investors

• Raised FY25 MRD revenue guidance ($180–$190M) and lowered OpEx/cash burn signal improving unit economics and margin trajectory; NovaSeq X offers incremental GM upside in 2H25/2026 .
• Clinical momentum is broad-based with DLBCL/MCL strength, community penetration, and EMR integrations accelerating adoption; sequential volume growth expected through FY25 .
• Pricing tailwinds (CLFS $2,007/test, payer contracts) and ASP uplift support revenue quality; disciplined contracting near Medicare rates reduces pricing risk .
• Milestone funnel expanding post-ODAC in MM with earlier recognition potential, but timing prudence remains; guidance already raised for MRD milestones to $8–$9M .
• Cash of ~$232.8M provides runway to execute without near-term capital needs; focus on MRD profitability and targeted IM R&D spend ($25–$30M) .
• Near-term trading implications: Positive setup from beats and guidance raise; watch 2H catalysts (Flatiron OncoEMR, NovaSeq X, NeoGenomics pilot) and incremental payer wins for ASP expansion .
• Medium-term thesis: Scalable MRD platform with improving gross margins, expanding clinical indications, and pharma milestone visibility; AI-enabled IM programs could add option value with disciplined cash burn .

* S&P Global consensus values marked with asterisks; all actuals cited to company documents.