INTERPACE BIOSCIENCES, INC. (IDXG)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue grew 13% year over year to $11.515M with gross margin expanding to 64% (from 62%), and operating income more than 60% higher to $1.829M; Adjusted EBITDA rose to $2.096M, reflecting continued efficiency gains and collections execution .
• Management initiated FY 2025 revenue guidance of approximately $38M, explicitly accounting for the loss of PancraGEN® reimbursement after May 2, 2025; the company expects to remain profitable as a thyroid-focused business, supported by record thyroid revenue ($8.0M, +19% YoY) and volume (+16% YoY) in Q1 .
• A material accounting restatement was disclosed on March 6, 2025 to reverse previously accrued royalty expenses (no material effect expected on revenues/cash flow), and a related material weakness in controls was identified—an overhang to monitor as remediation progresses .
• No Wall Street consensus estimates (S&P Global) were available for Q1 revenue or EPS; trading catalysts revolve around the PancraGEN reimbursement termination, new FY25 revenue guide, and the restatement/control update .

What Went Well and What Went Wrong

• What Went Well

  • Record thyroid performance: thyroid revenue reached $8.0M (+19% YoY) with test volume up 16% YoY, driving overall growth and mix resilience as PancraGEN winds down .
  • Collections and profitability: cash collections hit $11.3M (+10% YoY), gross margin expanded to 64% (from 62%), operating income rose to $1.829M, and Adjusted EBITDA reached $2.096M .
  • Strategic execution and automation: “The cash position of the Company allowed for additional investments in lab operational efficiency, driven by our AI and automation digital strategy, while simultaneously improving income from continuing operations.” — CFO Chris McCarthy .

• What Went Wrong

  • PancraGEN reimbursement eliminated: CMS/Novitas finalized an LCD ending PancraGEN reimbursement; Interpace stopped accepting specimens after May 2, 2025 and is restructuring around thyroid—management still expects profitability, but test portfolio diversification declines near term .
  • Accounting restatement and control weakness: the company will restate prior periods to reverse accrued royalty expenses and reported a material weakness in ICFR related to accrual assessment—an optics and governance headwind until remediation is complete .
  • Dilution overhang: diluted weighted average shares surged to 27.704M vs 4.384M a year ago, dragging diluted EPS from continuing operations to $0.06 despite strong operating progress (basic EPS from continuing ops was $0.40) .

Financial Results

Income statement: YoY comparison (Q1 2024 → Q1 2025)

Recent trend (last available prior quarter and current)

Notes: Q4 2024 detailed results were not available in the corpus; sequential comparison uses the last reported quarter (Q3 2024) for directional context .

Revenue mix (Q1 2025)

Key KPIs

Balance sheet (selected)

Non‑GAAP reconciliation highlights: Q1 2025 Adjusted EBITDA includes add-backs for D&A ($0.095M), stock comp ($0.015M), severance ($0.168M), taxes ($0.018M), interest ($0.078M) and fair value change of note payable ($-0.025M), net of interest income ($-0.007M) .

Guidance Changes

Context: Guidance was set “despite the loss of PancraGEN revenue after May 2, 2025,” and management expects to remain profitable focused on thyroid testing .

Earnings Call Themes & Trends

Management Commentary

• “The cash position of the Company allowed for additional investments in lab operational efficiency, driven by our AI and automation digital strategy, while simultaneously improving income from continuing operations… Based on our Q1 performance and current outlook, despite the loss of PancraGEN revenue after May 2, 2025, we are initiating full-year 2025 revenue guidance of approximately $38 million.” — Chris McCarthy, CFO .
• “Despite the uncertainty of PancraGEN reimbursement, Q1 2025 represented another quarter of year-over- year double digit volume and revenue growth… These historical trends have established a new foundation and expectation for companies in the diagnostics industry and the patients they serve.” — Tom Burnell, President & CEO .
• “We believe the Company is sustainable without PancraGEN and we expect that our testing franchise for indeterminate thyroid nodules, ThyGeNEXT + ThyraMIR v2, will allow us to continue to remain profitable in 2025 and beyond.” — Tom Burnell, President & CEO .

Q&A Highlights

• Earnings call transcript for Q1 2025 was not available in the document corpus; no Q&A highlights to report based on primary sources reviewed [ListDocuments results showing none].

Estimates Context

• S&P Global/Wall Street consensus estimates for Q1 2025 revenue and EPS were not available for IDXG at the time of review; accordingly, no beat/miss analysis versus consensus can be provided [GetEstimates returned no data].

Key Takeaways for Investors

• Core growth intact: Record thyroid revenue ($8.0M, +19% YoY) and volume (+16% YoY) underscore a durable growth engine as the business pivots away from PancraGEN .
• Margin execution: Gross margin expanded to 64% (from 62%), operating income rose to $1.829M, and Adjusted EBITDA to $2.096M—demonstrating operating leverage and collections-driven efficiency .
• Guidance signals impact from PancraGEN exit: Annualizing Q1 revenue implies a ~$46M run-rate, but FY25 revenue guidance is ~$38M—management is proactively resetting expectations to account for PancraGEN reimbursement loss while aiming to remain profitable as a thyroid-focused business .
• Accounting overhang: Restatement of accrued royalties and a material weakness in internal controls introduce governance risk; management indicates no material revenue or cash flow impact expected, but remediation milestones will matter for sentiment .
• Balance sheet trending better but liquidity tight: Cash fell to $1.196M at quarter-end, while current and total liabilities declined, reflecting continued debt paydown; monitor cash generation consistency and financing flexibility .
• Dilution sensitivity: The large gap between basic and diluted share counts (4.420M vs 27.704M) depresses diluted EPS, a factor to incorporate in per-share modeling and potential future capital actions .
• Near-term trading setup: Expect focus on thyroid growth durability, execution on AI/automation efficiencies, and visibility on restatement remediation; LCD resolution and FY25 revenue guide are the dominant narrative drivers near term .

Appendix: Additional Data and Disclosures

• Q3 2024 snapshot: Revenue $12.295M, operating income $1.905M, Adjusted EBITDA $2.076M, gross margin ~61%—showing multi-quarter profitability momentum heading into Q1 2025 .
• PancraGEN LCD timing: CMS/Novitas finalized LCD on April 24, 2025; Interpace accepted specimens without reimbursement through May 2, 2025, then ceased acceptance; restructuring underway .
• Restatement scope: Overstatement of accrued royalties across 2023–2024; restatement to be reflected in the FY 2024 10-K; no material impact to revenue or cash flows expected; material weakness to be addressed .