Executive Summary

Q2 2025 revenue grew 10% year over year to $181.3M, but came in slightly below prior Q2 guidance; GAAP diluted EPS was a loss of $0.35 as impairment and litigation costs weighed on profitability .
Management reduced FY 2025 guidance: revenue to $720–$726M (from $747–$759M), adjusted EBITDA to $41–$44M (from $55–$58M), and GAAP net loss widened to $(116)–$(108)M, citing persistent pharma weakness and a three‑month delay to PanTracer LBx launch .
Clinical revenue grew 16% y/y (13% organic); NGS accounted for 32% of clinical revenue and grew 23% y/y, while non‑clinical revenue declined 26% y/y; average revenue per clinical test increased to $461–$465 depending on mix .
Liquidity remained solid: cash and marketable securities were $164M; the company retired $201M of May 2025 converts; Q2 cash from operations was +$20M, supporting continued investment and strengthening the balance sheet .

What Went Well and What Went Wrong

What Went Well

Clinical strength: Clinical revenue +16% y/y (13% organic), driven by 10% test volume growth and 2–3% AUP increases; NGS revenue +23% y/y and now 32% of clinical revenue .
Commercial and product execution: Record test volumes; pricing and reimbursement initiatives contributed to AUP uplift; PanTracer LBx commercial launch commenced on July 30 with a seven‑day TAT and >500 genes, including MSI and bTMB, expanding CGP access when tissue is limited .
Cash discipline: Retired $201M convert out of cash; Q2 operating cash flow +$20M; ended Q2 with $164M cash and marketable securities .

Quote: “In the second quarter clinical revenue increased by 16% driven by sequential improvement in AUP, a record quarter for volumes, and NGS growth of 23%” — Tony Zook (CEO) .
Quote: “PanTracer Liquid Biopsy will launch commercially tomorrow… turnaround time… less than seven days” — Tony Zook (CEO) .

What Went Wrong

Pharma revenue headwinds: Non‑clinical revenue declined 26% y/y amid market uncertainty (NIH funding, drug pricing, patient trial enrollment, tariffs), and loss of RaDaR 1.0 pharma contract revenue in 2025; management reduced FY revenue and EBITDA guidance accordingly .
Product timing: Delay of PanTracer LBx launch by ~3 months reduced expected NGS revenue mix in Q2 and contributed to guidance cut .
Profitability pressure: $20.0M impairment (IVFL intangible, Trapelo assets held for sale) and higher IP litigation costs drove GAAP net loss to $45.1M and GAAP gross margin to 42.6% (vs 44.1% y/y); adjusted EBITDA was flat y/y at $10.7M .

Financial Results

Summary Financials vs Prior Periods and Prior Year

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$172.0	$168.0	$181.3
GAAP Gross Margin (%)	44.9%	43.6%	42.6%
Adjusted Gross Margin (%)	48.0%	46.8%	45.4%
GAAP Diluted EPS ($)	$(0.12)	$(0.20)	$(0.35)
Adjusted Diluted EPS ($)	$0.04	—	$0.03
Adjusted EBITDA ($USD Millions)	$11.9	$7.1	$10.7

Actual vs Consensus (Q2 2025)

Metric	Q2 2025 Actual	Q2 2025 Consensus
Revenue ($USD Millions)	$181.3	N/A*
Primary EPS ($)	$(0.35)	N/A*

*Consensus via S&P Global was unavailable for this period. Values would have been retrieved from S&P Global.

Segment/KPI Detail

KPI	Q2 2024	Q2 2025	Comment
Clinical tests (excl. Pathline)	311,670	343,005	+10.1% y/y
Avg revenue/test (excl. Pathline) ($)	454	465	+2.4% y/y
Clinical tests (incl. Pathline)	311,670	356,630	+14.4% y/y
Avg revenue/test (incl. Pathline) ($)	454	461	+1.5% y/y
NGS % of clinical revenue	—	32%	NGS revenue +23% y/y
Non‑clinical revenue growth y/y	—	(26%)	Pharma weakness

Cash, Balance Sheet, and Cash Flows

Cash and marketable securities: $164M at Q2 end .
Retired $201M convertible notes due May 2025 from cash .
Q2 operating cash flow: +$20M (up 44% y/y) .

Non‑GAAP Adjustments (Q2 2025)

Impairment charges: $20.041M .
IP litigation costs: $4.460M .
Stock‑based compensation: $12.215M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2025	$747–$759 (Apr 29)	$720–$726 (Jul 29)	Lowered
Adjusted EBITDA ($USD Millions)	FY 2025	$55–$58 (Apr 29)	$41–$44 (Jul 29)	Lowered
GAAP Net Loss ($USD Millions)	FY 2025	$(85)–$(77) (Apr 29)	$(116)–$(108) (Jul 29)	Lowered (more loss)
Adjusted Diluted EPS ($)	FY 2025	$0.16–$0.20 (recon)	$0.08–$0.12 (recon)	Lowered

Drivers of change: persistent pharma weakness, delayed PanTracer LBx revenue contribution, and mix effects within NGS modalities .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 & Q1 2025)	Current Period (Q2 2025)	Trend
Pharma macro headwinds	Q1: Expect pharma decline, tariffs/NIH budget pressure, RaDaR 1.0 contracts ended	Non‑clinical revenue −26% y/y; guide de‑risked; expect similar H2 performance with ODS upside in Q4	Deteriorated vs plan; de‑risked
NGS growth & mix	2024 NGS +34%; Q1 NGS +18% vs tough comp; target ~25% for 2025	NGS +23% y/y; 32% of clinical revenue; slight short of 25% target; PanTracer LBx now launched	Improving H2 outlook
PanTracer LBx launch	Q1: validation complete; MolDX submission; EAP oversubscribed	Commercial launch 7/30; 7‑day TAT; >500 genes; MSI/bTMB	Positive execution post‑delay
MRD strategy	Q1: RaDaR 1.1 validated; bridging study to MolDX; Adaptive clonoSEQ partnership pilot; next‑gen MRD targeting 2027	H2 pilots with Adaptive; trial vs Natera slated Oct; committed to MRD pathway	Building optionality; legal overhang
Operations/LIMS & digital pathology	Q1: LIMS consolidation; EPIC integrations; automation focus	Emphasized operating leverage in H2 via LIMS, interfaces	Execution underway
Pathline integration & Northeast expansion	Q1: $12–$14M FY revenue; initial EBITDA drag; validations needed	On track; contribution slightly ahead of expectations; cross‑sell to ramp into 2026	Early contribution; larger benefits in 2026

Management Commentary

“We missed our revenue guide this quarter. It’s unacceptable… Now moving forward, we just have to hit and exceed our goals quarter on quarter.” — Tony Zook (CEO) .
“We have further reduced the pharma business plan… we have taken some hard decisions relative to the cost base associated with pharma.” — Tony Zook (CEO) .
“Cash flow from operations in the second quarter was a positive $20 million… we ended the quarter with cash and marketable securities of $164 million.” — Jeff Sherman (CFO) .
“PanTracer Liquid Biopsy will launch commercially tomorrow… comprehensive panel, over 500 genes… turnaround time less than seven days.” — Tony Zook (CEO) .

Q&A Highlights

Guidance philosophy and credibility: CEO emphasized transparency, de‑risking assumptions (pharma and product timing) and commitment to consistent execution after missing Q2 guide .
Pharma trajectory: Expect H2 similar to H1 with potential Q4 ODS uptick; competitive position constrained by RaDaR 1.0 settlement and long sales cycles; portfolio additions (Paletrra) are longer‑dated .
PanTracer LBx reimbursement and ramp: Active MolDX dialogue; EAP learnings improved QNS and TAT; no specific ramp disclosed; launch plan resumes post‑delay .
NGS concentration and mix: Five key products now ~23% of clinical revenue; overall NGS >30% of total revenue; mix across blood vs tissue can affect revenue trajectory .
Pathline: Slight outperformance vs internal expectations; validations complete; cross‑sell funnel robust; larger pull‑through into 2026 .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2025 revenue and EPS was unavailable; management indicated Q2 revenue was “slightly below our second quarter guidance range” and subsequently lowered FY 2025 revenue and EBITDA guidance .
Implication: Street models likely need to reflect lower FY revenue ($720–$726M) and adjusted EBITDA ($41–$44M) with more conservative non‑clinical assumptions and tempered NGS mix until PanTracer LBx contribution materializes .
Note: S&P Global consensus data was unavailable for citation; values would have been retrieved from S&P Global.

Key Takeaways for Investors

Clinical momentum intact; NGS growth and AUP initiatives are working, but H2 execution will need PanTracer LBx ramp and continued sales force productivity to offset pharma drag .
Guidance reset reduces near‑term bar; with de‑risked pharma assumptions and product launch underway, upside could emerge if MRD legal outcomes and LBx adoption outperform in H2 .
Watch operating leverage: LIMS consolidation, EPIC interfaces, and automation initiatives should support H2 margin resilience despite Pathline’s near‑term EBITDA drag .
Balance sheet de‑risked: retiring $201M convert and positive Q2 cash from ops bolster liquidity for R&D and tuck‑ins; management signaled confidence via insider share purchases .
Near‑term trading catalysts: PanTracer LBx uptake (orders, reimbursement milestones), October MRD litigation developments, Q4 ODS performance, and any pharma stabilization .
Medium‑term thesis: Broader CGP portfolio (tissue + liquid), MRD optionality (Adaptive, RaDaR 1.1, next‑gen MRD), and Northeast expansion via Pathline position NEO for double‑digit revenue growth over time with improving operating efficiency .

Citations: Press release and 8‑K (Q2 2025): ; Earnings call (Q2 2025): ; Prior quarters (Q1 2025, Q4 2024): .

NEOGENOMICS INC (NEO)·Q2 2025 Earnings Summary