Executive Summary

Q3 2025 delivered a material beat and inflection to profitability: revenue $216.83M (+113% y/y) and diluted EPS $0.08, with gross margin at 68.0% and Adjusted EBITDA $51.17M; management highlighted a $37.9M revenue true-up and underlying gross margin ~61% ex true-ups .
Wall Street consensus for Q3: revenue ~$174.22M and EPS -$0.136; actuals were a significant beat on both, and EBITDA materially exceeded consensus as well (see Estimates Context) [*].
Guidance raised: FY25 revenue to $720–$730M (from $675–$685M) and clinical therapy selection volume growth to 21–22%; management also pointed to Q4 revenue of $200–$210M and mid-60s gross margin, with Q4 OpEx in the “higher $120M” range .
Key drivers: strong clinical ASPs (total ASP $4,089 vs $3,256 in Q2), continued volume growth (50,763 cases), Caris Assure blood adoption (7,537 cases; 40% attachment to tissue), and lab efficiency (TAT: tissue 8 days, blood 7 days) .
Catalysts into Q4–2026: expected pharma R&D revenue step-up in Q4 ($20–$30M), progress on MRD reimbursement (CRC submission underway), early detection readouts (Achieve One 1H26) and potential LDT launch, and New York State approval for blood assay in process .

What Went Well and What Went Wrong

What Went Well

Profitable quarter and strong operating leverage: gross margin expanded to 68.0% (+2,432 bps y/y), Adjusted EBITDA $51.17M, net income $24.33M; “We delivered another record quarter… achieving positive net income” — CEO David D. Halbert .
ASP strength and reimbursement progress: total ASP rose to $4,089; management noted “stronger-than-expected collections… resulted in a $37.9M revenue true-up” and base tissue ASP reached ~$3,500, with Q4 base guide ~$3,600; goal >$4,000 in 1H26 — CFO Luke Power .
Pipeline momentum: MRD colorectal data showed 96.3% PPA and 100% NPA vs a third-party assay; early detection studies (Achieve One complete enrollment; Achieve Two >15,600 enrolled) and incorporation of whole genome; “We’ll read out Achieve One in the first half of next year” — President David Spetzler .

What Went Wrong

True-up dependence and underlying margins: excluding the Q3 true-up, underlying gross margin was ~61%, highlighting reliance on collections catch-ups; management emphasized they do not forecast true-ups .
Pharma R&D sequential softness in Q3: revenue declined sequentially with projects shifting into Q4; guide implies $20–$30M in Q4, underscoring lumpiness and timing risk .
OpEx expected higher in Q4: management flagged Q4 OpEx in the “higher $120M” range due to investment in early detection and commercial readiness, moderating near-term margin trajectory despite profitability .

Financial Results

Consolidated P&L and Cash Metrics (oldest → newest)

Metric	Q3 2024	Q2 2025	Q3 2025
Total Revenue ($M)	$101.62	$181.40	$216.83
Gross Margin (%)	43.7%	62.7%	68.0%
Operating Expenses ($M)	$105.25	$131.67	$114.86
Operating Income (Loss) ($M)	$(60.84)	$(17.99)	$32.64
Net Income (Loss) ($M)	$(67.73)	$(71.79)	$24.33
Diluted EPS ($)	$(2.59)	$(7.97)	$0.08
Adjusted EBITDA ($M)	$(45.59)	$16.71	$51.17
Free Cash Flow ($M)	$(71.26)	$5.90	$55.33
Net Cash from Ops ($M)	$(69.43)	$7.29	$62.43

Segment Revenue Breakdown ($M)

Segment	Q3 2024	Q2 2025	Q3 2025
Molecular Profiling Services	$93.80	$162.92	$207.59
Pharma R&D Services	$7.82	$18.47	$9.25

KPIs: Volume, ASP, Efficiency

KPI	Q3 2024	Q2 2025	Q3 2025
Total Clinical Case Volume	42,956	50,032	50,763
MI Profile (Tissue) Volume	38,409	42,886	43,226
Caris Assure (Blood) Volume	4,547	7,146	7,537
Total Clinical ASP ($)	2,184	3,256	4,089
MI Profile ASP ($)	2,241	3,379	4,273
Assure ASP ($)	1,697	2,519	3,034
TAT (Tissue/Blood, days)	—	—	8 / 7
Blood-Tissue Attachment Rate	—	~35%	~40%
Covered Lives (MI Cancer Seek)	—	~170M (incl. Medicare)	>200M

vs Estimates (Q3 2025)

Metric	Consensus	Actual	Surprise
Revenue ($M)	174.22*	216.83	Beat
Primary EPS ($)	-0.136*	0.08	Beat
EBITDA ($M)	7.20*	37.51*	Beat

Values retrieved from S&P Global.*

Notes: Adjusted EBITDA per company was $51.17M; SPGI’s EBITDA “actual” reflects their standard definition, not company-adjusted .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY 2025	$675–$685M	$720–$730M	Raised
Clinical Therapy Selection Volume Growth	FY 2025	19–21%	21–22%	Raised
Q4 Total Revenue	Q4 2025	—	$200–$210M (management assumption)	New detail
Gross Margin (Full Year)	FY 2025	~60% (goal)	~62% (updated view)	Raised
OpEx	Q4 2025	$115–$120M per quarter (2H25)	“Higher $120M” in Q4	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
ASP/Reimbursement	Q2: Tissue ASP $3,256; Medicare catch-ups; commercial covered lives ~170M; ASP guided to rise; true-ups included	Base tissue ASP ~$3,500; Q4 base ~$3,600; >200M covered lives; $37.9M true-up; goal >$4,000 in 1H26	Improving ASP trajectory; strong payer adoption
Gross Margin/Profitability	Q2: 62.7% GM; Adjusted EBITDA positive; FY GM goal ~60%	68.0% GM; ~61% ex true-up; FY GM ~62%; net income positive	Structural margin expansion with operating leverage
Caris Assure (Blood) Adoption	Q2: 7,146 cases; ~35% attachment; NY State approval pending	7,537 cases; 40% attachment; blood ASP $2,377 base; Q4 guide $2,300–$2,400	Steady adoption, rising attachment, ASP gains
MRD (CRC) and Reimbursement	Q2: submission plan to MolDX; initial data sets, broader study pipeline	MRD CRC shows 96.3% PPA/100% NPA; submission data ready; commercialization can leverage existing channel	Advancing validation; poised for coverage dialogue
Early Detection	Q2: strategy to start with breast; strong initial performance; self-pay launch contemplated	Achieve One complete; Achieve Two >15.6k enrolled; adding whole genome; readout 1H26; LDT launch considered before Achieve Two readout	Scaling clinical studies; nearer-term LDT path
Pharma R&D	Q2: +49% y/y; pipeline more weighted to Q4	Q3 sequential dip; Q4 guide $20–$30M; focus on multi-year data partnerships and CDx	Timing-driven; expecting Q4 step-up
New York State Approval (Blood)	Q2: pending, catalyst for volume	Reiterated as a volume catalyst	Still pending; potential upside

Q-1 column is N/A due to lack of public Q1 earnings call/press release found.

Management Commentary

CEO vision: “We delivered another record quarter for revenue and clinical volume, achieving positive net income… toward delivering the next generation of personalized solutions through our exciting pipeline in MRD and early detection” — David D. Halbert .
CFO on true-ups and ASP trajectory: “Stronger-than-expected collections… resulted in a $37.9M revenue true-up… base tissue ASP ~$3,500 in Q3… we still expect Q4 base ASP… around $3,600… goal… above $4,000 ASP for tissue” — Luke Power .
President on MRD data: “We demonstrated 96.3% PPA and 100% NPA… the separation with p<0.005 supports the test’s ability to accurately distinguish recurrence risk” — David Spetzler .
Efficiency gains: “Turnaround time for tissue down to eight days and blood at seven days… demonstrates significant progress on lab efficiencies” — Luke Power .
Strategic posture: “We’re not going above 30% adjusted EBITDA… we want to reinvest… early detection… MRD” — Luke Power .

Q&A Highlights

ASP and margins ex true-ups: Management does not forecast true-ups; underlying Q3 gross margin ~61% excluding true-up, indicating strong core profitability trend .
MRD commercialization: Existing oncology sales force can scale MRD without material headcount expansion; pricing discussions with MolDX expected, not price-sensitive initially .
Early detection cadence and LDT: Achieve One readout 1H26; LDT launch considered before Achieve Two readout; whole genome backbone added for early detection .
Pharma R&D outlook: Q4 revenue guide implies a sizable step-up ($20–$30M), with emphasis on long-term data partnerships and CDx; timing drives quarterly lumpiness .
OpEx investment: Q4 OpEx guided to “higher $120M” to support pipeline and commercial readiness, balancing reinvestment with sustained profitability .
Blood attachment and NY approval: Blood attachment rose to ~40% (from ~35% in Q2); NY State approval remains a key catalyst to expand volumes .

Estimates Context

Q3 2025 consensus vs actuals: revenue ~$174.22M vs actual $216.83M; EPS -$0.136 vs actual $0.08; EBITDA ~$7.20M vs actual ~$37.51M — material beats on all three. Expect upward revisions to FY25 revenue and EPS following the guidance raise and profitability inflection [*].
FY25 trajectory: With full-year revenue guidance raised to $720–$730M and gross margin now expected at ~62%, consensus likely to recalibrate higher on revenue, margins, and EPS; Q4 pharma step-up and ASP resilience are supportive .