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Personalis, Inc. (PSNL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue of $17.2M (-24% YoY) missed Street consensus and management’s Q2 outlook, driven by a $5.6M expected decline from Natera and softer biopharma translational projects; gross margin compressed to 27.6% on unreimbursed clinical test costs .
  • Strong clinical momentum: 3,478 clinical tests delivered (+59% QoQ) and ordering physicians now exceed 600; Tempus collaboration expanded to colorectal cancer (CRC), broadening access and exclusivity through 2028/2029 .
  • Guidance cut: FY25 total revenue lowered to $70–$80M (from $80–$90M); pharma tests/services lowered to $52–$58M (from $62–$64M); reimbursed clinical revenue narrowed to $3–$6M (from $3–$10M); Q3 revenue guided to $12–$14M .
  • Management expects Medicare coverage decisions for two indications in Q4 and cites ~12 pts of gross margin headwind from unreimbursed tests (GM would be ~40% ex those costs), providing a path to >50% margins post-coverage .
  • Near-term stock narrative likely pivots on reimbursement timing and biopharma project push-outs; management maintains confidence in MRD biopharma growth (300–400% YoY) and two $5M+ MRD biopharma customers, with a stronger Q4 seasonality historically .

What Went Well and What Went Wrong

What Went Well

  • “Win-in-MRD” execution: 3,478 clinical tests in Q2 (+59% QoQ), with >600 ordering physicians, reflecting accelerating adoption of NeXT Personal’s ultrasensitive MRD performance .
  • Strategic expansion: Tempus exclusivity broadened to CRC and extended through 2028/2029, scaling commercial reach across breast, lung, CRC, and IO monitoring .
  • Clinical evidence: ASCO data in breast cancer (PREDICT, SCANDARE) and cervical cancer (CALLA) underscored ultrasensitivity and early detection advantages; management emphasized: “nearly half of all positive detections were found in the ultra-sensitive range” .

What Went Wrong

  • Top-line miss and guide-down: Q2 revenue $17.2M missed Street and prior Q2 outlook ($19.5–$20.5M); FY25 revenue cut to $70–$80M on biopharma timing variability and sample receipts .
  • Margin pressure: Gross margin fell to 27.6% (from 35.6% YoY) on unreimbursed clinical test costs and customer mix; CFO quantified ~12-pt headwind in Q2 .
  • Biopharma softness: Translational projects delayed 2–4 quarters amid sector R&D headwinds, tariffs/macro uncertainty; Moderna revenue down YoY as expected, Natera winding down by end of Q3 .

Financial Results

Key P&L Metrics (actuals)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$16.8M $20.605M $17.203M
Gross Margin %32.0% FY 2024 reference 35.0% 27.6%
Net Loss ($USD)$(16.425)M $(15.750)M $(20.056)M
Diluted EPS ($)$(0.23) $(0.18) $(0.23)
Cash & ST Investments ($USD)$185.0M (12/31/24) $185.7M (3/31/25) $173.2M (6/30/25)

Actuals vs Wall Street Consensus (S&P Global)

MetricQ1 2025Q2 2025Q3 2025 (next)
Revenue Consensus Mean ($USD)$17.415M*$20.114M*$13.307M*
Revenue Actual ($USD)$20.605M $17.203M $14.495M (company Q3 actual proxy not available yet; use guidance)
EPS Consensus Mean ($)$(0.25)*$(0.244)*$(0.274)*
EPS Actual ($)$(0.18) $(0.23) N/A

Values marked with * retrieved from S&P Global.

Notes:

  • Q2 revenue missed consensus by ~$2.9M and EPS modestly better than consensus by ~$0.01 (actual $(0.23) vs $(0.244) estimated) . Values retrieved from S&P Global.

Segment Revenue Breakdown

Segment ($USD)Q4 2024Q1 2025Q2 2025
Pharma tests & services$12.232M $13.594M $11.023M
Enterprise sales$4.170M $2.465M $2.315M
Population sequencing$0.219M $4.213M $3.308M
Clinical diagnostic$0.176M $0.308M $0.469M
Other$0.003M $0.025M $0.088M
Total Revenue$16.800M $20.605M $17.203M

KPIs

KPIQ4 2024Q1 2025Q2 2025
Clinical tests delivered1,441 2,184 3,478
Gross Margin %32% FY ref 35.0% 27.6%
Cash usage (Ops + CapEx)$46.8M FY 2024 $20.5M Q1 $13.2M Q2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$80–$90M $70–$80M Lowered
Pharma + Other Customers RevenueFY 2025$62–$64M $52–$58M Lowered
Population + Enterprise RevenueFY 2025$15–$16M $15–$16M Maintained
Clinical Reimbursed RevenueFY 2025$3–$10M $3–$6M Narrowed lower
Gross MarginFY 202522–24% (raised from 21–23% in Q1) 22–24% (below 32% FY24 actual) Maintained (context lower vs FY24)
Net LossFY 2025~$83M ~$85M Increased
Cash UsageFY 2025~$75M (decreased from $75–$80M) ~$75M Maintained
Total RevenueQ3 2025N/A$12–$14M New
Pharma + Other CustomersQ3 2025N/A$11–$13M New
Population + EnterpriseQ3 2025N/A~$1M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Clinical MRD adoptionQ4: ramp to 1,441 tests; submitted breast dossier . Q1: 2,184 tests (+52% QoQ), strong physician retention .3,478 tests (+59% QoQ), >600 physicians; CRC added to Tempus exclusivity .Accelerating adoption; broader indications.
Biopharma demandQ4: Merck $50M, Moderna extension; ImmunoID NeXT leader . Q1: MRD biopharma revenue growth targeted at 300–400% YoY; two $5M+ customers .Translational projects delays (2–4 quarters); MRD biopharma still robust; two $5M+ customers on track .Mixed: translational softness; MRD strong.
Reimbursement (Medicare)Q4: submitted breast; plan lung & IO . Q1: confident in at least two indications in 2025 .IO dossier submitted; lung dossier on track; expectation two indications in Q4; Palmetto engagement .On-track, timing likely Q4.
Margins & cost structureQ1: GM 35.0%; ~8-pt unreimbursed headwind (ex would be ~43%) .GM 27.6%; ~12-pt unreimbursed headwind; ex ~40%; >50% GM post-coverage .Near-term pressure; path to scale post-coverage.
Competitive landscapeQ1: building evidence; TRACERx, VHIO .Saga Pathlight breast coverage seen as validating path; Personalis confident its evidence clears bar .Validated category; focus on differentiation via ultrasensitivity.
Tempus collaborationQ4: expanded to biopharma; leveraging large salesforce . Q1: metering efforts pre-coverage; CGP pull-through in own channel .Exclusivity extended, CRC added; EMR integration and logistics advantages .Deepening channel leverage.

Management Commentary

  • “Our second quarter was defined by outstanding execution… test volume growing 59% sequentially. We delivered nearly 3,500 clinical results in Q2 and today our base of ordering physicians has expanded to over 600.”
  • “Achieving Medicare reimbursement in two indications this year remains a top priority and is on track… we’ve submitted our IO monitoring dossier… lung cancer dossier is on track.”
  • “Gross margin was 27.6%… we saw an impact of approximately 12% to our gross margin from the unreimbursed clinical test costs. Excluding those expenses, gross margin would have been approximately 40%.”
  • “We own the Q2 revenue shortfall… we’re pushing hard on the levers we can control to finish the year strong.”
  • “We believe we have plenty of cash to get us not only to the other side of reimbursement, but to get us to cash flow breakeven… no plans contemplated to having to raise money.”

Q&A Highlights

  • Reimbursement timing and guide: Clinical reimbursed revenue narrowed to $3–$6M for FY25 as timing converges to two cancer types in Q4; engagement with Palmetto ongoing and confidence in meeting coverage bar .
  • Biopharma push-outs vs cancellations: Translational delays largely timing-related, 2–4 quarters; MRD biopharma demand robust with two $5M+ customers on track; Moderna PCV program baseline expectations intact .
  • Margin mechanics: ~12-pt GM headwind from unreimbursed tests in Q2; >50% GM targeted post coverage and scale .
  • Tempus channel operations: Tempus EMR/logistics strengths drive physician experience; Personalis adds select field reps, especially for academic/KOL coverage; exclusivity across breast/lung/CRC/IO .
  • Cash runway: ~$173.2M cash/ST investments with no plans to raise capital; runway to coverage and breakeven per CFO .

Estimates Context

  • Q2 actuals vs consensus: Revenue $17.203M vs $20.114M* (miss), EPS $(0.23) vs $(0.244)* (slight beat). EBITDA $(19.273)M vs $(20.525)M* (better than consensus). Values retrieved from S&P Global.
  • Forward setup: Q3 consensus revenue $13.307M* and EPS $(0.274)* alongside company Q3 guide of $12–$14M, suggesting estimates broadly align with guided range. Values retrieved from S&P Global.
  • Annual: FY25 revenue consensus ~$69.9M* consistent with lowered company outlook ($70–$80M); FY25 EBITDA consensus approximately $(79.6)M*. Values retrieved from S&P Global.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term revenue and margin headwinds came from biopharma translational push-outs and unreimbursed clinical tests; expect operating leverage post Medicare coverage and scale .
  • Strong clinical adoption is increasingly de-risking the MRD thesis: 3,478 tests in Q2 (+59% QoQ), >600 physicians, and Tempus channel expansion to CRC supports sustained volume growth into coverage .
  • Reimbursement is the central catalyst: IO dossier submitted; lung on track; management targets two indications in Q4; stock likely sensitive to any coverage decisions or delays .
  • MRD biopharma remains a bright spot despite macro softness: 300–400% YoY growth targeted, two $5M+ customers on track; Q4 historically strongest quarter .
  • Liquidity sufficient to bridge to breakeven: ~$173.2M cash/ST investments; no plans to raise capital; investment focus on evidence generation and commercial capabilities .
  • Trading lens: Expect near-term estimate revisions reflecting guide-down; upside optionality tied to timely Medicare coverage and Q4 MRD biopharma ramp .
  • Watch for additional data readouts/publications (breast, IO, CRC) that can widen coverage and support pricing/mix longer term .