Executive Summary

GeneDx delivered another strong quarter: revenue rose to $116.7M (+52% y/y), adjusted gross margin expanded to 74%, and adjusted net income reached $14.7M; GAAP net loss was $7.6M as non‑GAAP add‑backs (D&A, SBC, fair‑value changes, legal reserves) drove the swing to adjusted profitability .
Management raised FY25 guidance: revenue to $425–$428M (from $400–$415M), exome/genome revenue growth to 53%–55% (from 48%–52%), and adjusted gross margin to 70%–71% (from 68%–71%); volume growth ≥30% and quarterly profitability reiterated .
Execution drivers: exome/genome momentum (volumes +33% y/y to 25,702; mix up to 43%), improving reimbursement (avg collection >$3,800/test in Q3), and cost discipline, partially offset by a planned OpEx ramp to build general pediatrics and international go‑to‑market .
Strategic catalysts: FDA Breakthrough Device Designation for ExomeDx/GenomeDx, expanding Medicaid coverage (36 states covering exome/genome outpatient with Medi‑Cal), NICU channel acceleration (Epic Aura integrations), and leadership in genomic newborn screening (NIH BEACONS, Florida Sunshine Genetics Network) .
Estimate context: S&P Global consensus for Q3/Q4 2025 EPS/revenue was not available at query time; thus, no beat/miss vs. Street can be cited for this quarter.*

What Went Well and What Went Wrong

What Went Well

Volume and mix: Exome/genome test volumes grew 33% y/y to 25,702 with mix at 43% (up from 33% y/y), underpinning revenue growth and gross margin expansion .
Margin and unit economics: Adjusted gross margin expanded to 74% (GAAP 72%); CFO cited average reimbursement “over $3,800” per test in Q3 (vs. ~$3,700 in Q2 and ~$3,100 a year ago), supported by coverage expansion and reduced denials .
Strategic milestones: FDA Breakthrough Device Designation for ExomeDx/GenomeDx; leadership in gNBS via NIH BEACONS and Florida Sunshine Genetics Network; management emphasized a “new era of proactive, personalized care” .
- CEO: “Based on our momentum exiting this quarter, we're raising our 2025 revenue guidance to $425 to $428 million.”

What Went Wrong

GAAP profitability: Despite adjusted profitability, the company posted a GAAP net loss of $7.6M as non‑cash and non‑recurring items continued to weigh on reported earnings .
OpEx ramp: Adjusted total OpEx rose to $71M (61% of revenue) as GeneDx invests ahead of expected volume inflection in general pediatrics and international, implying potential near‑term pressure on EBITDA/operating margins .
Hereditary cancer wind‑down: The hereditary cancer line is being discontinued and expected to be near zero in Q4, removing ~$1–3M of quarterly revenue from the mix as focus shifts to exome/genome .

Financial Results

Consolidated P&L and Margins (chronological: oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$76.6	$95.3	$87.1	$102.7	$116.7
GAAP Gross Margin %	62.2%	69.2%	67.1%	69.0%	72.4%
Adjusted Gross Margin %	64.4%	70.3%	68.6%	70.6%	73.8%
GAAP Basic EPS ($)	$(0.31)	—	$(0.23)	$0.38	$(0.27)
Adjusted Basic EPS ($)	—	—	—	$0.52	$0.51
Adjusted Net Income ($M)	$2.0	$17.5	$7.7	$15.0	$14.7

Notes: Q3 2025 adjusted net income reconciles from GAAP net loss via add‑backs including D&A ($6.5M), SBC ($10.6M), fair‑value changes ($3.4M), and other items including legal reserves ($1.8M) .

Segment/Revenue Mix and Volumes

Metric	Q3 2024	Q2 2025	Q3 2025
Whole exome & whole genome revenue ($M)	$60.0	$85.9	$98.9
Hereditary cancer revenue ($M)	$3.3	$1.8	$1.2
Other panels revenue ($M)	$13.8	$12.1	$13.4
Data information revenue ($M)	$(0.5)	$2.0	$1.5
Software/interpretation services ($M)	—	$0.9	$1.7
Total revenue ($M)	$76.6	$102.7	$116.7
Exome/genome volumes (units)	19,262	23,102	25,702
Total volumes (units)	59,029	55,673	60,216
Exome/genome mix (%)	33%	41%	43%

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Exome/genome volumes (units)	19,262	20,676	20,562	23,102	25,702
Exome/genome mix (%)	33%	22%	40%	41%	43%
Adjusted gross margin (%)	64.4%	70.3%	68.6%	70.6%	73.8%
Adjusted total OpEx as % of revenue	62%	—	60%	56%	61%
Adjusted net income ($M)	$2.0	$17.5	$7.7	$15.0	$14.7
Avg reimbursement per test (exome/genome)	~$3,100	—	—	~$3,700	>$3,800
Cash, cash equivalents, marketable securities & restricted cash ($M)	—	—	$160.2	$135.5	$156.1

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$400–$415M	$425–$428M	Raised
Exome/genome revenue growth	FY 2025	48%–52%	53%–55%	Raised
Exome/genome volume growth	FY 2025	≥30%	≥30%	Maintained
Adjusted gross margin	FY 2025	68%–71%	70%–71%	Raised (upper end reaffirmed)
Adjusted net income	FY 2025	Positive each quarter & full year	Positive each quarter & full year	Maintained

Context: Guidance was previously raised at Q2 (to $400–$415M revenue and 48%–52% exome/genome revenue growth) and was raised again at Q3 .

Earnings Call Themes & Trends

Topic	Q1 2025 (prior)	Q2 2025 (prior)	Q3 2025 (current)	Trend
AI/technology & “Infinity” data	Launched Multiscore AI tool; emphasized data moat	Published additional AI/healthecon data; Fabric Genomics acquisition closes	Infinity powers speed/accuracy; ongoing automation to lower COGS	Strengthening
NICU strategy	Launched ultraRapid WGS; Epic Aura integration	17 states cover rapid genome; NICU underpenetrated	One of fastest‑growing channels; targeting ~2,000 incremental H2 units; ≥12 Epic Aura integrations by YE	Scaling
General pediatrics & AAP	—	AAP update recommends exome/genome first‑tier for DD/ID	Doubling sales force; 18–24 months to meaningful adoption; building “one‑minute order” CX	Building for 2026
Reimbursement/coverage	33 states cover exome/genome outpatient	35 states cover outpatient; 17 cover rapid NICU	Medi‑Cal adds genome coverage (36th state); higher avg reimbursement	Positive tailwind
Regulatory	—	—	FDA Breakthrough Device Designation for ExomeDx/GenomeDx	Positive
Portfolio mix	Hereditary cancer still contributing	De‑emphasized in mix	Exiting hereditary cancer; near zero in Q4	Focus on core
Fabric Genomics (decentralized model)	Announced acquisition plan	Closed; sets hybrid centralized/decentralized model	Software/interpretation revenue emerging in mix	Integration underway

Management Commentary

CEO (prepared remarks): “Based on our momentum exiting this quarter, we're raising our 2025 revenue guidance to $425 to $428 million.”
CFO: “Adjusted total operating expenses were $71 million…primarily early investments we expect will drive volume growth mid‑2026 and beyond…every dollar is meant to build high‑quality, durable future revenues.”
COO: “We reported over 25,000 cases this quarter, and nearly 2/3 of those were parent‑child trios…this quarter alone, we actually sequenced more than 55,000 individuals…Infinity…increases speed and turnaround time.”
CEO on pediatrics timeline: “We expect it will take 18 to 24 months from the June update before we see real adoption.”
CFO on reimbursement: “The third quarter average reimbursement rate was over $3,800…up from approximately $3,700 last quarter and $3,100 a year ago.”

Q&A Highlights

ASP and gross margin sustainability: CFO guided modest near‑term ASP variability (~$100 down in Q4) as new call points onboard at initially lower rates; raised full‑year adjusted gross margin guide to 70%–71% while retaining conservatism for Q4 variability .
NICU ramp and Epic Aura: NICU is one of the fastest‑growing channels; tracking ~2,000 incremental units in H2 with most in Q4; ≥12 Epic Aura integrations by year‑end to streamline ordering and broaden clinician access .
General pediatrics: Sales force buildout underway; expect meaningful adoption 18–24 months post‑AAP update (June 2025); prioritizing “one‑minute” ordering experience and education to reduce barriers .
Coverage expansion: Medi‑Cal to cover whole genome; CFO expects transition from “zeros” to paid claims with ~80% Medicaid payment consistency in covered states; focus remains on securing remaining states through health‑economic data .
FDA Breakthrough path: Management views designation as validation and an accelerator with the FDA working alongside on an expedited path using legacy data; not expected to limit access or reimbursement .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2025 and Q4 2025 EPS/revenue was unavailable in our S&P Global data pull at this time; as a result, we cannot quantify beat/miss vs. consensus for the quarter.*
Implications: Given the revenue outperformance cadence and another guidance increase, analysts may revisit top‑line and margin trajectories, but the near‑term OpEx investment cycle and the hereditary cancer exit should be considered in revising EBITDA/EPS paths .

*Values retrieved from S&P Global.

Key Takeaways for Investors

Mix‑led growth: Exome/genome remains the economic engine—driving faster volume growth, higher mix, and elevated adjusted gross margins (74% in Q3), supported by rising avg reimbursement and lower COGS via automation/scale .
Guidance momentum: FY25 revenue raised to $425–$428M and adjusted gross margin to 70%–71% underscores confidence; continued quarterly adjusted profitability targeted despite investment ramp .
Near‑term trade‑off: Expect elevated OpEx through 2026 as the company builds general pediatrics, NICU, and international presence; management signaled EBITDA margin could dip in interim while remaining adjusted profitable .
Coverage/regulatory tailwinds: Medi‑Cal coverage (36th state) and FDA Breakthrough should support adoption and reimbursement durability, particularly in outpatient pediatrics and NICU .
Channel catalysts: NICU contributions accelerating (Epic Aura integrations; rapid genome), while general pediatrics represents a 2026+ adoption curve (18–24 months), supported by streamlined ordering and education .
Portfolio focus: Hereditary cancer exit removes a small revenue stream but tightens focus on core exome/genome diagnostics and software/interpretation services via Fabric Genomics .
Minor disclosure nuance: Press release cites ~$8.8M Q3 free cash flow while CFO referenced ~$9M—an immaterial rounding difference that does not change the cash trajectory ($156.1M cash & securities at Q3) .

Appendix: Non‑GAAP Adjustments (Q3 2025)

Reconciliation from GAAP net loss ($7.6M) to adjusted net income ($14.7M) includes D&A ($6.5M), SBC ($10.6M), change in fair value of financial liabilities ($3.4M) and “Other” ($1.8M, includes legal reserves) .

Other Q3 2025 Press Releases

The 8‑K furnished the primary press release (Exhibit 99.1) and an earnings presentation (Exhibit 99.2) covering financial and strategic updates (including FDA Breakthrough, BEACONS and Sunshine Genetics Network) . No additional company‑issued operational press releases were identified in the period beyond these furnished exhibits.

Citations: All tables and statements above reference the Q3 2025 8‑K press release and presentation [4:], earnings call transcript [1:], and prior 8‑K materials for Q2 and Q1 2025 [16:] [32:].

GeneDx Holdings Corp. (WGS)·Q3 2025 Earnings Summary