Executive Summary

Q3 revenue and EPS beat: revenue $14.50M vs $13.31M consensus*, EPS -$0.24 vs -$0.27 consensus*, but gross margin compressed to 13.2% (Q2: 27.6%, Q3’24: 34.0%) as unreimbursed clinical test costs weighed on mix .
FY25 guidance cut again: total revenue to $68–$73M (from $70–$80M), with pharma/all-other to $50–$54M (from $52–$58M) and clinical reimbursed to $1.5–$2.0M (from $3–$6M); GM 22–24% and ~$(85)M net loss maintained .
Clinical traction strong: 4,388 clinical tests delivered (+26% q/q, +364% y/y) and 700+ ordering physicians as NeXT Personal adoption rises; however, biopharma translational project timing and customs-related sample delays increased near-term variability .
Q4 guide implies reacceleration: revenue $15.7–$20.7M, with $12.0–$17.0M pharma/all-other and ~$3.7M pop seq/enterprise; mix shift continues toward MRD .
Post-quarter catalyst: Medicare coverage secured for ultrasensitive NeXT Personal in breast cancer surveillance (Stage II–III, all major subtypes) — a key commercial inflection for clinical revenue and estimate revisions .

What Went Well and What Went Wrong

What Went Well
- Clinical adoption: 4,388 clinical tests (+26% q/q; +364% y/y) with 700+ physicians ordering; CEO: “364% year-over-year growth in our clinical test volume is a powerful indicator of physician enthusiasm for NeXT Personal” .
- Evidence momentum: Positive Phase 3 NeoADAURA neoadjuvant lung data; ESMO LAURA data showed ~5-month lead to imaging; launched CATE breast utility study with Yale .
- Strategic MRD focus: Two large prospective biopharma trials signed; MRD biopharma revenue “set to grow approximately 300% year-over-year,” reinforcing long-run revenue mix shift .
What Went Wrong
- Top-line and margin pressure: Revenue declined 44% y/y to $14.5M; gross margin fell to 13.2% (from 34.0%) due to lower volume absorption and ~18% impact from unreimbursed clinical tests; ex these, GM ~31% .
- Biopharma/translational variability: Ongoing delays in translational projects and customs-related sample holdups (Q4 timing risk), adding lumpiness to near-term revenue .
- Guide reductions: FY25 revenue trimmed to $68–$73M; clinical reimbursed lowered to $1.5–$2.0M with reimbursement milestone timing shift later in 2025 .

Financial Results

Overall financials and estimate comparison (USD):

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$20.61	$17.20	$14.50
Revenue Consensus Mean ($M)	$17.41*	$20.11*	$13.31*
Gross Margin %	35.0%	27.6%	13.2%
Net Loss ($M)	$(15.8)	$(20.1)	$(21.7)
GAAP EPS	$(0.18)*	$(0.23)	$(0.24)
EPS Consensus Mean	$(0.25)*	$(0.24)*	$(0.27)*

Values with asterisks (*) retrieved from S&P Global.

Segment revenue breakdown (USD thousands):

Segment	Q3 2024	Q2 2025	Q3 2025
Pharma tests and services (incl. other customers)	$15,698	$11,023	$13,137
Enterprise sales	$5,264	$2,315	$650
Population sequencing	$4,431	$3,308	$234
Clinical diagnostic	$271	$469	$384
Other	$45	$88	$90
Total Revenue	$25,709	$17,203	$14,495

KPIs and balance sheet:

KPI	Q1 2025	Q2 2025	Q3 2025
Clinical tests delivered (units)	2,184	3,478	4,388
Ordering physicians	600+	600+	700+
Cash, cash equivalents, and ST investments ($M)	$185.7	$173.2	$150.5
Cash usage in quarter ($M)	$20.5	$13.2	$23.4
Gross margin %	35.0%	27.6%	13.2%

Notes:

Q3’25 y/y revenue decline primarily from expected Natera decline ($4.6M), lower population sequencing ($4.2M), and lower pharma/services ($2.5M) .
Prior-year net loss included $26.0M non-cash Tempus warrant expense, inflating the y/y compare .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total revenue	FY 2025	$70–$80M	$68–$73M	Lowered
Pharma tests/services & all other	FY 2025	$52–$58M	$50–$54M	Lowered
Population sequencing + enterprise	FY 2025	$15–$16M	$16.5–$17.0M	Raised
Clinical reimbursed revenue	FY 2025	$3–$6M	$1.5–$2.0M	Lowered
Gross margin	FY 2025	22–24%	22–24%	Maintained
Net loss	FY 2025	~$(85)M	~$(85)M	Maintained
Cash usage	FY 2025	~$75M	~$75M	Maintained
Total revenue	Q4 2025	n/a	$15.7–$20.7M	New
Pharma/services & all other	Q4 2025	n/a	$12.0–$17.0M	New
Population sequencing & enterprise	Q4 2025	n/a	~$3.7M	New

Management context: Q3 biopharma variability exacerbated by customs delays; timing risk may push samples from Q4 to Q1 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Clinical test growth	Q1: 2,184 tests; +650% y/y; focus breast/lung/IO; ramp via Tempus . Q2: 3,478 tests; +59% q/q; added CRC to Tempus; 600+ physicians .	4,388 tests; +26% q/q; 700+ physicians; metered to balance margin/cash .	Improving (high retention; controlled pacing)
Reimbursement (MolDX)	Target ≥2 indications in 2025; breast filed; IO & lung to follow on publication .	Three dossiers under review (breast, IO, lung); still targeting two decisions in 2025 . Post-quarter: Medicare coverage for breast .	Positive inflection (coverage win in breast)
Biopharma MRD	Q1: MRD biopharma on track +300–400% y/y; new $5M+ customers . Q2: MRD demand robust despite translational delays .	MRD demand strong; two large prospective trials signed; sample logistics created near-term variability .	Mixed near term; strong medium term
Translational biopharma	Q1/Q2: Sector headwinds, project delays, $3–$5M timing impact .	Continued delays; customs disruptions widen Q4 range .	Persistent headwind
Evidence pipeline	Q1: VICTORI CRC interim (100% pre-imaging detection; 87% landmark sensitivity) . Q2: PREDICT/SCANDARE breast; CALLA cervical; CRC added to Tempus scope .	NeoADAURA neoadjuvant lung and ESMO LAURA data; CATE breast utility study launch .	Expanding evidence base
Pricing/economics	Q1: Model assumes incumbent reimbursement; 60% GM target at scale . Q2: Similar framing; leverage Tempus S&M .	GM hit 13.2% given unreimbursed costs; ex-unreimbursed ~31%; long-term >50% with coverage/scale .	Near-term pressure; long-term positive

Management Commentary

“Our third-quarter results demonstrate clear progress in our strategy to Win-in-MRD… 364% year-over-year growth in our clinical test volume is a powerful indicator of physician enthusiasm for NeXT Personal.” — Chris Hall, CEO .
“Gross margin was 13.2%… primarily due to the 44% lower revenue volume… and an increase in clinical test costs in advance of reimbursement… excluding those [unreimbursed] expenses, gross margin would have been approximately 31%.” — Aaron Tachibana, CFO/COO .
“We now have three dossiers under review with MolDX… we continue to target coverage for two indications by the end of the year.” — Chris Hall, CEO .
“We finished the third quarter with… $150.5 million [cash & ST investments]… expect to end the year with more than $130 million of cash.” — Aaron Tachibana, CFO/COO .
“We signed two major prospective clinical trials this quarter… MRD biopharma revenue is set to grow approximately 300% year-over-year.” — Chris Hall, CEO .

Q&A Highlights

Project timing/customs: Management widened Q4 range as some cohorts were delayed at customs; slips would push revenue into Q1; not indicative of demand .
Metering volume: Q3 +26% q/q was deliberate to manage margin/cash; typical Q3 seasonality; target exit run-rate already achieved .
MolDX process: 60-day cycles of questions/answers; active dialogue across breast, IO, lung; still aiming for two decisions in 2025 .
Natera cleanup: Residual revenue minimal going forward; revenue base now diversified across biopharma customers .
Publication roadmap: TRACERx lung study publication expected “next quarter”; CRC evidence path to follow after study maturation/publication .

Estimates Context

Q3 2025 beat: Revenue $14.50M vs $13.31M consensus*; EPS -$0.24 vs -$0.27 consensus* — helped by better-than-guided top-line and clinical volume strength despite margin dilution .
Prior trend: Q2 2025 missed revenue ($17.20M vs $20.11M*), consistent with translational delays; Q1 2025 beat both revenue ($20.61M vs $17.41M*) and EPS (-$0.18 vs -$0.25*) .
Post-quarter, Medicare coverage for breast should drive upward revisions to clinical revenue trajectories; FY25 company guide trimmed to $68–$73M likely anchors near-term Street numbers .