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GeneDx Holdings Corp. (WGS)·Q2 2025 Earnings Summary

Executive Summary

  • GeneDx delivered revenue of $102.7M, its first quarter above $100M, with adjusted gross margin at 71% and adjusted net income of $15.0M; management raised FY25 revenue guidance to $400–$415M and Exome/Genome revenue growth to 48%–52% .
  • Core Exome/Genome revenue rose 69% YoY to $85.9M on 28% volume growth and a higher average reimbursement; CFO emphasized the ASP uplift was driven by durable denial reduction and expanding Medicaid coverage, not one-time items .
  • Guidance raises and AAP’s first-tier testing recommendation for pediatric DD/ID are catalysts that expand the serviceable market and support margin trajectory into H2 and beyond .
  • Management reaffirmed profitability each quarter on an adjusted basis; cash, cash equivalents, marketable securities and restricted cash were $135.5M at quarter-end, despite $33.2M paid to acquire Fabric Genomics .
  • Sell-side consensus via S&P Global was unavailable for quarterly comparisons; investors should anchor on company-raised guidance and volume/mix trajectory for estimate resets (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Strong Exome/Genome execution: revenue up 69% YoY to $85.9M; volumes up 28% to 23,102; mix climbed to 41% of tests .
  • Margin expansion and profitability: adjusted GM reached 71% (vs. 62% in Q2’24); fourth consecutive quarter of adjusted net income ($15.0M) and positive operating cash flow .
  • Strategic tailwinds: “Crossing the $100 million revenue mark and delivering our fourth consecutive profitable quarter is a major milestone… Our strong second quarter performance was driven by our core business” — CEO Katherine Stueland ; AAP guidance and Medicaid coverage broaden addressable market .

What Went Wrong

  • Other panels and hereditary cancer continue to decline sequentially from prior highs; hereditary cancer revenue fell to $1.8M from $2.2M in Q1’25 and $3.8M in Q2’24, reflecting deprioritization and mix shift to Exome/Genome .
  • Denial rates remain a headwind even as pay rate improved to the mid‑50s; guide embeds conservatism for higher initial denials in new indications and call points (NICU, immunology, pediatrics) .
  • General pediatrics impact is minimal in 2025 as the company prioritizes core specialist growth; management expects broader pediatric volumes to materialize in 2026+ despite AAP’s guideline change .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ2 2024Q3 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$68.9 $76.6 $95.3 $87.1 $102.7
GAAP Gross Margin (%)60.9% 62.2% 69.2% 67.1% 69.0%
Adjusted Gross Margin (%)62.2% 64.4% 70.3% 68.6% 70.6%
GAAP Net Income (Loss) ($USD Millions)$(29.2) $(8.3) $5.4 $(6.5) $10.8
Adjusted Net Income ($USD Millions)$(2.0) $1.175 $16.8 $7.7 $15.0
GAAP EPS Basic ($USD)N/A¹N/A¹N/A¹$(0.23) $0.38
GAAP EPS Diluted ($USD)N/A¹N/A¹N/A¹$(0.23) $0.36
  1. Q4 2024 and Q3 2024 EPS per share were not disclosed in the 8-K; quarter-level EPS not provided in those filings .

Segment Volumes by Quarter

MetricQ2 2024Q3 2024Q4 2024Q1 2025Q2 2025
Exome/Genome Volume (tests)18,017 19,262 20,676 20,562 23,102
Hereditary Cancer (tests)5,482 4,672 3,486 2,725 2,677
Other Panels (tests)34,204 35,095 30,115 28,228 29,894
Total Tests57,703 59,029 54,277 51,515 55,673

Segment Revenue by Quarter

MetricQ2 2024Q3 2024Q4 2024Q1 2025Q2 2025
Exome/Genome ($USD Millions)$50.7 $60.0 $78.8 $71.4 $85.9
Hereditary Cancer ($USD Millions)$3.8 $3.3 $2.8 $2.2 $1.8
Other Panels ($USD Millions)$13.3 $13.8 $12.3 $12.1 $12.1
Data Information ($USD Millions)$1.1 $(0.5) $1.4 $1.4 $2.0
Fabric Genomics ($USD Millions)— — — — $0.9
Total ($USD Millions)$68.9 $76.6 $95.3 $87.1 $102.7

Key KPIs

KPIQ2 2024Q3 2024Q4 2024Q1 2025Q2 2025
Exome/Genome Mix (% of tests)31% 33% 38% 40% 41%
Exome/Genome ASP ($ per test)N/AN/AN/A≈$3,400 $3,718
Adjusted OpEx ($USD Millions)N/AN/A$49.0 $52.3 $57.8
Adjusted OpEx (% of Revenue)N/AN/AN/A60% 56%
Cash, Cash Equivalents, Mkt Securities & Restricted Cash ($USD Millions)N/AN/A$142.2 $160.2 $135.5
Cash from Operations ($USD Millions)N/AN/A$12.4 (Q4 includes $6.8M appeal) $4.1 $10.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2025$360–$375 $400–$415 Raised
Exome/Genome Revenue Growth (%)FY 2025≥30% 48%–52% Raised
Exome/Genome Volume Growth (%)FY 2025≥30% 30% Maintained
Adjusted Gross Margin (%)FY 202566%–68% 68%–71% Raised
Adjusted Net IncomeFY 2025Positive each quarter and FY Positive each quarter and FY Maintained
Exome/Genome Revenue ($USD Millions)FY 2025N/A$345–$355 (math implied by CFO) New detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
ASP / Denial ReductionAppeal recovery benefited Q4; process refinements ongoing ASP $3,718; uplift driven by durable denial reduction and Medicaid policy expansion; not one-time Improving, sustainable
Medicaid Coverage32 states (Q4); 33 states outpatient/14 rapid NICU (Q1) 35 outpatient; 17 rapid NICU states; added CO, ME, VA, OH, OK Expanding
NICU Penetration & Epic AuraEpic Aura launched (Q1) 3 health systems live; ≥12 expected in H2; H2 contribution weighted to Q4 Building into Q4
New IndicationsCerebral palsy and immunology launched (Q1) Early contribution; stronger impact expected in H2 from CP & pediatric immunologists Accelerating
General Pediatrics (AAP)Anticipated guideline update (Q4 narrative) AAP recommends exome/genome first-tier for DD/ID; 2025 impact minimal; ramp 2026+ Structural long-term tailwind
AI / TechnologyMultiscore AI tool; Fabric acquisition announced (Q1) Fabric integration to optimize dry lab algorithms, lower COGS, scale interpretation Enhancing platform
Biopharma/DataGeneDx Discover launch; pharma partnerships (Q4) Data information revenue increased; same-store sales and new contracts in data biz Healthy

Management Commentary

  • “Crossing the $100 million revenue mark and delivering our fourth consecutive profitable quarter is a major milestone for GeneDx… Our strong second quarter performance was driven by our core business” — Katherine Stueland, CEO .
  • “Average reimbursement rate for Exome and Genome was over $3,700 a test… There’s nothing I would call out… as unique or one-time. We’re driving sustainable reimbursement rate improvements” — Kevin Feeley, CFO .
  • “AAP now recommends exome and genome sequencing as first-tier tests for children with global developmental delay or intellectual disability… This is a sea change” — Katherine Stueland .
  • “We’re raising our top-line total revenue guidance to between $400 and $415 million for full year 2025… Exome and Genome revenue guidance to deliver between 48% and 52% growth” — Kevin Feeley .

Q&A Highlights

  • ASP dynamics: CFO affirmed Q2 ASP $3,718 and said uplift reflects ongoing denial reduction across payers; guide embeds conservatism for higher initial denials in new indications/call points .
  • Volume bridge to H2: Outpatient specialists remain primary driver; NICU Epic Aura onboarding contributes more meaningfully in Q4; H2 test volumes implied ~33% YoY to hit ≥30% full-year growth .
  • Denial rate context: Paid rate now mid‑50s, up several hundred bps sequentially; room to run remains, with payer “boxing match” better armed by the team .
  • General pediatrics timing: Minimal 2025 volume impact despite AAP; focus maintained on ped neuro and specialists; broader pediatric adoption expected in 2026+ .
  • Fabric Genomics: Integration tracking to plan; early international sales hiring and use cases for decentralized interpretation and standardized newborn screening highlighted .

Estimates Context

  • S&P Global consensus for revenue, EPS, and EBITDA for Q3 2025–Q2 2026 was unavailable at time of retrieval; therefore, no vs-estimate beat/miss analysis is provided. Investors should recalibrate models to reflect raised FY25 revenue ($400–$415M) and adjusted GM (68%–71%) guidance, and Exome/Genome revenue growth (48%–52%) .

Key Takeaways for Investors

  • Guidance raise is material; the top-line bump to $400–$415M and GM to 68%–71% supports upward estimate revisions and multiple support given profitability cadence .
  • Exome/Genome momentum is robust, with mix at 41%, ASP $3,718, and 28% volume growth; drivers include denial reduction and expanding Medicaid coverage (35 outpatient; 17 rapid NICU states) .
  • Near-term growth remains outpatient specialist-led; NICU will contribute increasingly in Q4 as Epic Aura sites scale; general pediatrics is a 2026+ ramp .
  • Margin levers should persist: mix shift, reimbursement, and dry lab optimization via Fabric’s algorithms point to structural COGS improvements .
  • Data business and biopharma partnerships provide diversified revenue streams with growing same-store sales; watch for incremental contracts .
  • Liquidity remains solid at $135.5M despite $33.2M Fabric cash outlay; business is generating positive operating cash flow while investing for growth .
  • Trading implications: a “clean” quarter with guidance raises and structural tailwinds (AAP, coverage expansion). Monitor H2 volumes (33%+ YoY implied), ASP sustainability, and cadence of Epic Aura go-lives to gauge Q4 acceleration .