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FG

Fulgent Genetics, Inc. (FLGT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $84.1M (+17% YoY; +2.8% QoQ) with GAAP gross margin 42.2% and non-GAAP gross margin 44.3%; non-GAAP EPS was $0.14 and GAAP EPS was ($0.21) .
  • The company raised FY25 guidance: revenue to $325M (from $320M core), GAAP EPS loss to approximately ($1.70) (from ($2.10)), and non-GAAP EPS to +$0.30 (from a loss of ($0.35)); non-GAAP GM >40% and non-GAAP operating margin improving to ~(-10%) for the year .
  • Results beat S&P Global consensus: Revenue $84.1M vs $81.43M* and non-GAAP EPS $0.14 vs ($0.224)*; operating expense discipline and stronger collections aided margins and profitability surprise .
  • Strategic catalysts: launch of ultra-rapid whole genome sequencing for NICU, expansion of Beacon carrier screening to 1,000 genes (“Beacon K”), and proprietary digital pathology IMS (EZOPath); therapeutics (FID-007) showed encouraging Phase II data, with potential Phase III scale in 2026 .

What Went Well and What Went Wrong

  • What Went Well
    • Sequential and YoY growth with improving margins: non-GAAP GM 44.3% (vs 44.2% in Q2 and 40.0% in Q3’24) driven by efficiency and centralized operations .
    • Product momentum: launch of ultra-rapid WGS for NICU and expansion of Beacon to 1,000 genes (Beacon K), positioning for faster TAT and broader detection in reproductive health; “turnaround time remains exceptional, averaging just 8.8 days” .
    • Raised FY25 guide across revenue and EPS; CFO cited reduced advertising/marketing and improved precision diagnostics collections as drivers of lower opex and better operating margin trajectory .
  • What Went Wrong
    • Anatomic pathology (AP) down $2.1M QoQ (-7.6%) due to collections timing tied to a billing software change (expected to normalize); still +$1.8M YoY (+7.2%) .
    • Non-GAAP EPS of $0.14 was below Q3’24 ($0.31) despite stronger revenue, reflecting higher operating costs and mix; GAAP operating expenses rose vs Q3’24 ($50.9M vs $43.9M) .
    • Biopharma services momentum remains “lumpy” by nature of wins and program timing despite broader capabilities expansion .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$71.743 $81.803 $84.069
GAAP EPS ($)($0.48) ($0.62) ($0.21)
Non-GAAP EPS ($)$0.31 $0.07 $0.14
GAAP Gross Margin (%)37.3% 42.1% 42.2%
Non-GAAP Gross Margin (%)40.0% 44.2% 44.3%
Adjusted EBITDA ($USD Millions)$0.351 ($2.992) $0.708
GAAP Operating Expenses ($USD Millions)$43.850 $54.148 $50.862
Non-GAAP Operating Expenses ($USD Millions)$32.877 $43.856 $40.727
  • Estimates vs actuals (S&P Global):
    • Revenue: Consensus* $81.43M vs Actual $84.07M; surprise +$2.64M (~+3.2%). Values retrieved from S&P Global.
    • EPS (Primary, non-GAAP basis): Consensus* ($0.224) vs Actual $0.14; surprise +$0.364. Values retrieved from S&P Global.
      Sources for actuals:

Segment performance (Laboratory Services)

SegmentQoQ Change ($M)YoY Change ($M)Notes
Precision Diagnostics+$3.4+$7.2Stronger demand; expanded WGS and reproductive health portfolio
BioPharma Services+$1.0+$3.3Capabilities expansion beyond NGS broadened addressable market; still “lumpy”
Anatomic Pathology($2.1)+$1.8QoQ decline from collections timing due to billing software transition; improving

Key performance indicators (balance sheet and cash flow)

KPIQ2 2025Q3 2024Q3 2025
Cash, Cash Equivalents & Investments ($USD Millions)$777.5 —$787.7
Accounts Receivable, Net ($USD Millions)$77.190 —$71.187
Weighted Avg Diluted Shares (Millions)30.724 30.679 31.312
Stock Repurchases in Quarter ($USD Millions)$2.2 —$0.0
Cumulative Buybacks Since 3/2022 ($USD Millions)$110.4 —$110.4
Remaining Authorization ($USD Millions)——$139.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$320M Core Revenue $325M Total Revenue Raised
GAAP EPSFY 2025(~$2.10) (~$1.70) Raised (smaller loss)
Non-GAAP EPSFY 2025(~$0.35) loss +$0.30 Raised (from loss to profit)
Non-GAAP Gross MarginFY 2025—>40% Introduced/maintained above 40%
Non-GAAP Operating MarginFY 2025~(-15%) (implied prior)~(-10%) Raised
YE Cash & Investments12/31/2025~$770M ~$800M (assumes ~$106M tax refunds; may be delayed by gov’t shutdown) Raised

Earnings Call Themes & Trends

TopicQ1 2025 (Q-2)Q2 2025 (Q-1)Q3 2025 (Current)Trend
AI/Digital Pathology—Company had been investing (per prior calls) Launched proprietary EZOPath IMS; integrating in-house/3rd-party AI for speed/quality Positive adoption; margin enablement
Genomics Product ExpansionCore revenue +16% YoY; reiterated core guide Introduced enhanced WGS incl. RNA (per Q3 commentary) Launched ultra-rapid WGS for NICU; Beacon expanded to 1,000 genes (Beacon K) Accelerating pipeline and RH breadth
Reimbursement/Macro——Payers moving ahead of ACOG on expanded carrier screening; broader reimbursement progress Improving access tailwinds
Biopharma Services—Capabilities expanding beyond NGS (per Q3 commentary) Broader test menu expanding RFP eligibility; still “lumpy” Broadening TAM; variable cadence
Anatomic Pathology Collections——QoQ decline tied to billing software change; collections already improving Transitory headwind
Therapeutics (FID-007/022)Pipeline progressing —FID-007 Phase II prelim: ORR 44–59% by arm (51% overall); PFS 7.8–9.2m vs 2.3m historical; Phase III planning; FID-022 Phase I dose escalation progressing Increasing optionality and visibility

Management Commentary

  • “We continued to build momentum in our laboratory services business and advancing our clinical trials for the Therapeutic Development business…preliminary data [FID-007] further demonstrated meaningful efficacy…” — Ming Hsieh, CEO .
  • “Gross margins have improved year-over-year due to streamlined operations and enhanced efficiency as a result of our investments in scaling and centralizing lab operations.” — Paul Kim, CFO .
  • “We’re pleased to announce the launch of our ultra-rapid whole genome sequencing service…primary focus is the NICU…[and] the launch of Beacon K…expands our panel to 1,000 genes.” — Brandon Perthuis, CCO .
  • “We have developed and launched our own proprietary [digital pathology] IMS, EZOPath…to enable the deployment and integration of AI tools.” — Brandon Perthuis .
  • “We are revising our full year 2025 revenue outlook upward to $325 million…we continue to expect non-GAAP gross margins for the full year to exceed 40%…non-GAAP operating margins to improve from minus 15% to minus 10%.” — Paul Kim .

Q&A Highlights

  • Margins trajectory: Non-GAAP GM sustained at 44.3% without prior capitalization benefit; drivers include automation and policy streamlining; AI/digital pathology should support further improvement over time .
  • Anatomic Pathology: QoQ revenue dip was a timing/collections issue tied to a billing software change; collections already improving; no fundamental demand weakness .
  • Product adoption and RH bundling: Beacon (carrier) and Nova (NIPT) are frequently ordered together clinically but billed separately; Beacon remains a core growth driver; Nova not yet a meaningful revenue contributor .
  • Reimbursement: Payers increasingly recognizing value of expanded carrier screening ahead of potential ACOG update; broader reimbursement progress across tests .
  • Therapeutics spend and path: FID-007 Phase III could involve ~300 patients and cost roughly ~$60M; 2025 therapeutics cash spend expected below ~$25M; Phase II enrollment targeted by YE25 with major data in 2026 .

Estimates Context

  • Q3 2025 S&P Global consensus vs actuals:
    • Revenue: $81.43M* vs $84.07M actual; beat (~+3.2%). Values retrieved from S&P Global. Actual: .
    • Primary EPS (non-GAAP): ($0.224)* vs $0.14 actual; significant beat. Values retrieved from S&P Global. Actual: .
  • Implications: Street likely raises FY25 revenue/EPS forecasts following higher company guidance and sustained >40% non-GAAP GM, while factoring opex discipline and improved collections .

Key Takeaways for Investors

  • Positive print: topline beat, non-GAAP EPS turned meaningfully positive vs consensus, and FY25 guidance moved higher across revenue and EPS metrics; non-GAAP operating margin trajectory improving toward (10%) for FY25 .
  • Mix and efficiency tailwinds: >40% non-GAAP GM sustained on centralized operations and automation; digital pathology (EZOPath) plus AI integration provide structural margin levers into 2026 .
  • Product catalysts: ultra-rapid WGS for NICU and Beacon K expansion should support pediatric and reproductive health growth with favorable institutional billing dynamics and rapid TAT .
  • Transitory headwind: AP softness was a collections timing/billing software issue, already improving; watch for Q4 normalization .
  • Therapeutics optionality: FID-007 Phase II prelim data are encouraging; Phase III design under way with ~$60M expected cost; platform approach (FID-022) expands oncology pipeline potential .
  • Capital strength: ~$787.7M cash and investments at Q3; YE target ~$800M (subject to ~$106M tax refunds timing given government shutdown) supports reinvestment and optionality (M&A/buybacks) .
  • Trading lens: Near-term sentiment supported by raised guide and estimate beats; watch reimbursement updates (ACOG), NICU WGS adoption, AP collections normalization, and therapeutics milestones as stock catalysts .

Appendix: Additional Relevant Press Releases

  • EU CE Mark for FulgentExome and PLM (more than 4,600 genes validated): expands European clinical adoption and potential reimbursement pathways under IVDR .
  • Upcoming investor conferences (UBS, Piper Sandler) provide venues for incremental disclosures and investor engagement .

Notes:

  • Items with an asterisk (*) are consensus values. Values retrieved from S&P Global.