Caris Life Sciences (CAI) Q4 FY25 earnings call: guidance and Q&A

Can you provide a breakdown of the 20% volume growth between tissue and blood, and give color on Q1 revenue pacing?

The 20% volume growth is expected to be low teens for tissue and high 50s/low 60s for blood, similar to Q4 FY25. Q1 total revenue is projected to be in the 70% to 74% growth range.

“Yes. So Dan, so on a total volume basis, we guided to the 20%. The 20% is broken up very similar to Q4. So lower teens for tissue and then high 50s, lower 60s for blood from a growth standpoint. And then on the revenue outlook for Q1, right now, we're in that 70% to 74% growth range for total revenue.”

asked by Dan Brennan · answered by Unknown Executive

Elaborate on Bobby Hill's role, the size of the sales force previously, planned headcount additions, strategy, and the expected revenue/volume contribution from new hires in 2026.

Bobby Hill transitioned to lead commercial operations after successful reimbursement efforts. The sales force will increase by 20-25% to about 300 people. While the expense is incorporated, the 20% volume guidance for 2026 does not assume a significant volume uptick from new reps until the second half of the year, as productivity typically takes about 6 months.

“Yes, yes. So I can definitely take that, and then I'll let Bobby chime in on. So effectively, Bobby joined us, obviously, to lead our reimbursement efforts, knowing that Bobby also has additional expertise that would transition into the commercial operating role in the future. So from that standpoint, Bobby, obviously, has been here kind of 1 year, 1.5 years right now and done excellent work, as you can see in our results with the reimbursement. So as we go forward and what we're planning for 2026, we announced at JPMorgan that we were about 250 salespeople, and we wanted to increase it about 20% to 25%.”

asked by Dan Brennan · answered by Unknown Executive

Can you define the asymptomatic screening and undiagnosed populations in the ACHIEVE-1 specificity data, and explain the significance for clinical, regulatory, reimbursement, and commercial aspects?

In the higher-risk population, a 7% undiagnosed cancer rate was observed, which would lead to a lower specificity estimate than in a general population. The 'clean cohorts' with longitudinal outcome data reflect specificity in a general healthy screening population, while the high-risk group reflects what's expected in high-risk clinics. The clinical context of the patient is crucial for characterizing test performance across various populations.

“Yes. So in the higher-risk population, what we saw was that there was a 7% undiagnosed cancer rate. And so -- now if 7% of your control samples are actually positive for cancer, then it's going to lead to a lower estimate of specificity than what you would see in a general population where the incidence rate is much, much lower.”

asked by Subhalaxmi Nambi · answered by Unknown Executive

The FY26 tissue ASP guidance of $4,200 seems conservative compared to past discussions of reaching higher ranges. How much conservatism is built in, and what is the line of sight for commercial true-ups?

Management purposely launched My Cancer Seek at the start of 2025 to capture a full year of activity and true-ups. While there is headroom for tissue ASP, the $4,200 guidance for FY26 is a measured approach, with confidence in reaching $4,000 in Q1 based on signed contracts. Further progress and additional contracts are expected, but the current guidance is considered solid.

“Yes. So the answer to true-up questions. Like we purposely launch my cancer seek at the start of 2025, knowing that we'd get the full 12 months of the activity. So we could get all the kind of true-ups incorporated as much as possible in 2025. A Because, again, I always take a measured approach when it comes to ASP, I'd like to see the history play out. And now that we have that -- it's a good starting point as we go in and knowing that we'll get to the 4,000 based on the contracts we signed that kick in at the start of the year.”

asked by Michael Ryskin · answered by Unknown Executive

Why is blood ASP guided lower for FY26, and what is the rationale for the OpEx step-up, particularly regarding sales force productivity and the market's focus on volume growth?

Blood ASP guidance of $2,400-$2,500 is cautious due to case mix fluctuations, but potential upside exists. The OpEx step-up is driven by a 30% increase in sales and marketing (for new reps) and R&D (for ACHIEVE-2). New sales reps typically take about 6 months to become productive, and the 2026 volume guidance does not assume a large uptick from new reps until the second half of the year. The company sees significant market opportunity and is investing aggressively in technology and commercial resources.

“Yes. So I'll go first and then I can let team obviously chime in as well. So yes, it's definitely including the OpEx standup step up like 30% growth in sales and marketing. So that's kind of the #1 key area. The other -- the second key area, too, is in R&D and having that other 30% step up in R&D again, as Pat walked through with the C1, like we're extremely excited about that, and we want to keep pressing ahead with the ACHIEVE-2 data.”

asked by Vijay Kumar · answered by Luke Power

Can you provide more color on the PPV for Caris Detect, and how does the strong data validate the $3,500 price point?

PPV cannot be calculated from a case-control study as it depends on the patient population and incidence rate. The $3,500 price point is justified because the test works effectively, unlike other technologies, and represents a superior technology (whole genome sequencing) replacing inferior ones like methylation-based tests.

“Yes. So -- you can't really calculate PPB because it's still a case control study, where it's about 1/3 cancer patients to 2/3 controls. And PPD is dependent upon the patient population and the incidence rate. Mean in that high-risk setting, right, having a 7% undiagnosed cancer rate is pretty high, and that's indicative of that enrichment that we did.”

asked by Kyle Mikson · answered by Unknown Executive