Sign in
GI

GRAIL, Inc. (GRAL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue grew 11% YoY to $35.5M, with U.S. Galleri revenue +21% YoY to $34.2M and >45,000 tests sold, while development services revenue softened; adjusted EBITDA improved materially YoY, but total revenue modestly missed S&P Global consensus and EPS beat .
  • Management lowered 2025 cash burn guidance to “no more than $310M” (from $320M) and reaffirmed U.S. Galleri revenue growth of 20–30% for FY25, citing demand strength and efficiencies from the automated platform .
  • Scientific momentum: top-line PATHFINDER 2 and NHS-Galleri results indicate substantially higher PPV and greater additional cancer detection vs the first PATHFINDER, with specificity and CSO accuracy consistent; detailed PATHFINDER 2 results targeted for ESMO Oct-2025 and PMA submission in H1 2026 .
  • Operational notes: a 6% ASP decline and higher reprocessing costs from the new automated platform pressured quarterly gross metrics; net loss included a $28M intangible impairment tied to the Illumina acquisition .

What Went Well and What Went Wrong

What Went Well

  • Strong U.S. demand: U.S. Galleri revenue reached $34.2M (+21% YoY), with more than 45,000 tests sold in Q2 and repeat testing rising to >25%; CEO emphasized expanding access and growing awareness of MCED .
  • Evidence strength: PATHFINDER 2 top-line showed substantially greater additional cancer detection and substantially higher PPV vs the first PATHFINDER; specificity and CSO accuracy remained consistent, reinforcing the targeted methylation approach .
  • Efficiency and cash: Adjusted EBITDA improved to $(78.3)M (YoY improvement of ~$61M), and FY25 cash burn guidance was reduced to ≤$310M; CFO reiterated cash runway into 2028 .
    • Quote: “We are pleased with Galleri’s growing uptake in the U.S., with more than 45,000 Galleri tests sold in the second quarter…” — Bob Ragusa, CEO .
    • Quote: “We are updating the guidance to cash burn of no more than $310,000,000 for the full year of 2025…” — Aaron Freidin, CFO .

What Went Wrong

  • Pricing/mix and processing headwinds: Cost of screening revenue as a percent of revenue was impacted by a ~6% ASP decline and higher reprocessing costs associated with the new automated platform rollout, partially offset by lower variable costs .
  • Development services softness: Development services revenue fell to $1.2M (vs $2.7M in Q1), weighing on total revenue trajectory sequentially .
  • Non-cash impairment: Q2 net loss included a $28M impairment of acquisition-related intangible assets, following large impairments in 2024; gross loss stayed negative .

Financial Results

Key P&L Metrics by Quarter

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$38.252 $31.837 $35.544
Net Loss ($USD Millions)$(97.066) $(106.213) $(113.985)
Net Loss per Share (Basic & Diluted)$(2.89) $(3.10) $(3.18)
Adjusted Gross Profit ($USD Millions)$17.936 $14.305 $16.114
Adjusted EBITDA ($USD Millions)$(84.031) $(98.735) $(78.322)
Cash, Cash Equivalents, Restricted Cash & ST Securities ($USD Millions)$766.8 $677.9 $606.1

Segment Revenue Breakdown

MetricQ4 2024Q1 2025Q2 2025
Screening Revenue ($USD Millions)$31.551 $29.133 $34.379
Development Services Revenue ($USD Millions)$6.701 $2.704 $1.165
Total Revenue ($USD Millions)$38.252 $31.837 $35.544

KPIs

KPIQ4 2024Q1 2025Q2 2025
Galleri Tests Sold (Units)N/A>37,000 >45,000
U.S. Galleri Revenue ($USD Millions)N/A$28.7 $34.2
Repeat Testing Rate (%)N/A>20% (prior) >25%
Cash Position ($USD Millions)$766.8 $677.9 $606.1

Actuals vs S&P Global Consensus (Q2 2025)

MetricConsensusActualResult
Revenue ($USD)$36.90M*$35.54M Bold miss: revenue below consensus*
Primary EPS ($USD)$(3.64)*$(3.18) Bold beat: EPS less negative than consensus*
EBITDA ($USD)$(89.25)M*$(91.68)M (Adj. EBITDA proxy) Slight miss vs consensus*

Values retrieved from S&P Global.*

Forward Consensus Snapshot

MetricQ3 2025 ConsensusQ4 2025 Consensus
Revenue ($USD)$35.40M*$42.17M*
Primary EPS ($USD)$(3.48)*$(3.24)*
EBITDA ($USD)$(82.55)M*$(82.60)M*
Target Price (Mean, $USD)$96.67*$96.67*
# of Estimates (Rev / EPS)3 / 3*3 / 3*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash BurnFY 2025≤$320M (Jan guide) ≤$310M Lowered
U.S. Galleri Revenue GrowthFY 202520%–30% 20%–30% Maintained
PMA Modular Submission TimingRegulatoryH1 2026 (planned) H1 2026 Maintained
FDA Approval Timing (post-PMA)Regulatory~1 year post-submission (advisory panel) ~Mid-2027 Clarified
Other Financial Guidance (Margins, OpEx, OI&E, Tax Rate, Dividends)FY 2025Not providedNot providedN/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
AI/technology & automationScaling Galleri; integration with Quest to reduce friction New industrial-scale automated platform improves efficiency but drove reprocessing costs for a subset of samples; fix in progress Improving platform capabilities with near-term operational noise
Supply chain & tariffs/macroNo major tariff impacts noted previouslyNo major tariff impacts; most lab ops and suppliers in U.S. Neutral
Product performance (PPV, specificity, CSO)PATHFINDER & real-world evidence consistent; NHS prevalent round showed higher PPV PATHFINDER 2 top-line: substantially higher PPV, greater additional cancer detection; specificity and CSO accuracy consistent Strengthening evidence
Commercial channels & partnershipsQuest EHR connectivity; athenahealth integration Everlywell collaboration; Rush University System for Health offering Galleri; Quest orders rising (7% of Q2 orders) Expanding access
Regional trends (U.S.)U.S. Galleri revenue growth 45% YoY in 2024 U.S. Galleri revenue +21% YoY; seasonality with higher Q2/Q4 volumes Healthy demand with seasonality
Regulatory/legalSeparation from Illumina complete; impairments in 2024 $28M intangible impairment; PMA H1 2026; likely advisory panel and ~1-year approval timeline Regulatory path clarified
R&D execution & trialsNHS-Galleri prevalent round higher PPV; PMA in process PATHFINDER 2 details for ESMO Oct-2025; NHS-Galleri final clinical utility mid-2026 Multiple near-term catalysts
Health features & repeat testingEducation initiatives; >20% repeat Repeat testing >25%; Quest cohort prescribers more productive Improving loyalty/retention

Management Commentary

  • Strategic focus: “We remain on track for continued commercial growth in 2025… we began the use of a new version of Galleri… intended to enable us to scale more efficiently with future demand.” — Bob Ragusa, CEO .
  • Evidence base: “Adding Galleri to standard of care screening in PATHFINDER 2 demonstrated substantially greater additional cancer detection… substantially higher positive predictive value… specificity and CSO accuracy were consistent.” — Joshua Ofman, President .
  • Financial discipline: “We are updating the guidance to cash burn of no more than $310,000,000 for the full year of 2025… our cash runway extends into 2028.” — Aaron Freidin, CFO .
  • Regulatory timing: “The timeline for our PMA submission is 2026… we believe… approval will be about a one year process… first half 2027.” — Bob Ragusa, CEO .

Q&A Highlights

  • Cash burn cadence: H1 burn ~$160M; management expects lower burn in H2 driven by higher volumes and more automation throughput; FY25 cap at ≤$310M .
  • PPV normalization: PPV currently reported within each study’s population; plan to ultimately normalize for incidence and case mix as analyses mature .
  • Channel amplification: Everlywell and Function Health expected to accelerate demand via large customer bases; Quest integrations reduced friction and drove ~7% of Q2 orders with ~500 HCPs ordering via Quest YTD .
  • PMA and support infrastructure: Building customer-facing teams and pursuing efficiencies ahead of PMA; anticipating advisory panel and ~1-year review .
  • NHS-Galleri powering: Primary endpoint statistically powered to show reduction in late-stage cancers (Stages III/IV), first at 12 high-mortality cancers then all cancers; meaningful benefit tied to significant late-stage reduction .

Estimates Context

  • Q2 2025 vs consensus: Revenue missed ($35.54M vs $36.90M), EPS beat ($(3.18) vs $(3.64)), EBITDA slightly below consensus ($(91.68)M vs $(89.25)M)*, reflecting pricing/reprocessing headwinds offset by volume growth and lower variable costs .
  • FY25 trajectory: Reaffirmed 20–30% U.S. Galleri revenue growth; lowered cash burn cap to ≤$310M, which may prompt modestly positive revisions to cash burn/EBITDA outlook; revenue estimates may stay conservative given development services variability and ASP mix .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Demand remains robust: >45k tests sold and U.S. Galleri revenue +21% YoY; Q2 seasonality and expanding channels (Quest, Everlywell, Rush) support H2 volume .
  • Scientific catalysts: ESMO Oct-2025 PATHFINDER 2 details and NHS-Galleri clinical utility mid-2026 could be stock-moving evidence events; PMA completion planned H1 2026 .
  • Near-term margin watch: 6% ASP decline and higher reprocessing costs pressured gross performance; the fix is in progress, with automation expected to reduce variable unit costs .
  • Cash discipline: FY25 cash burn cap lowered to ≤$310M and runway into 2028 de-risks execution through inflection milestones; adjusted EBITDA improved materially YoY .
  • Estimates: Expect analysts to fine-tune revenue (development services variability) and EBITDA (automation offsets) while increasing confidence in regulatory/timing assumptions (advisory panel and ~1-year review) .
  • Trading setup: Into ESMO, sentiment likely to hinge on detailed PPV/cancer detection metrics and operational updates on platform reprocessing; watch for additional channel integrations to sustain sequential order growth .
  • Medium-term thesis: If registrational data and NHS utility confirm earlier findings, Galleri’s targeted methylation approach and low false positive rate could underpin broader adoption and reimbursement, expanding TAM with improving unit economics .