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    NEO
    Earnings call· Jun 2026(Q2 FY26)

    NEOGENOMICS Q2 FY26 earnings call NEO

    Jul 28, 2026 Source

    Executive summary

    NeoGenomics Q2 FY26 — Strong Clinical Growth and Margin Expansion Drive Raised Guidance

    NeoGenomics delivered a strong second quarter, marked by robust clinical revenue growth and significant margin expansion, leading to an upward revision of full-year guidance. While the nonclinical Pharma segment faced headwinds, the company's strategic focus on high-value NGS testing and operational efficiencies continues to drive durable and profitable growth, with new product launches and pipeline advancements positioning it for future expansion.

    Highlights

    5

    • Total revenue increased 11% year-over-year to $201.7 million, exceeding prior guidance.

    • Clinical revenue grew 14% year-over-year, driven by a 12% increase in AUP and 2% volume growth.

    • NGS revenue grew 26% year-over-year, comprising 1/3 of clinical revenue.

    • Adjusted gross margin expanded 260 basis points year-over-year to 48.1%.

    • Adjusted EBITDA increased 36% year-over-year to $14.4 million.

    Concerns

    3

    • Nonclinical business revenue declined 15% year-over-year to $14.5 million, with Pharma revenue down 26%.

    • Full-year nonclinical business guidance revised to down high single digits from low to mid-single digits.

    • A $10 million DOJ settlement payment will impact Q3 operating cash.

    Guidance & targets

    17
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $802 million to $806 million
    high materiality
    High
    Full-year 2026 Clinical Business Growth
    low teens
    medium materiality
    High
    Full-year 2026 NGS Business Growth
    mid-20s
    high materiality
    High
    Full-year 2026 RaDaR ST or PanTracer Liquid Revenue
    mid-single-digit millions
    low materiality
    High
    Full-year 2026 Nonclinical Business Growth
    down high single digits
    medium materiality
    High
    Q3 2026 Revenue Growth
    approximately 10%
    medium materiality
    High
    Q4 2026 Revenue Growth
    above 10%
    medium materiality
    High
    Full-year 2026 Gross Margin Improvement
    approximately 100 to 150 basis points
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $56 million to $58 million
    high materiality
    High
    Q3 and Q4 2026 Adjusted EBITDA Growth
    low 30s year-over-year
    medium materiality
    High
    Nonclinical segment year-over-year growth
    return to growth
    medium materiality
    Medium
    Next-generation whole genome sequencing MRD assay data generation
    generate data
    medium materiality
    High
    Next-generation whole genome sequencing MRD assay clinical launch
    potential clinical launch
    high materiality
    Medium
    RaDaR ST additional indications approval
    before the end of the year
    high materiality
    High
    RaDaR ST third indication approval
    somewhere in the first half -- latter part of the first half of 2027
    high materiality
    Medium
    Commercial representatives count
    exceed 160
    low materiality
    High
    G&A as percent of revenue
    lower than 30%
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Clinical Business
    Driven by strong AUP growth and volume increase, with NGS being a significant contributor and mix shift towards higher-value testing.
    AUP growth: 12%Test volumes growth: 2%NGS revenue growth: 26%NGS revenue as % of clinical revenue: 33%5 NGS products (since 2023) growth: 30%5 NGS products (since 2023) as % of total clinical revenue: 26%Large NGS panels growth: >20%
    		—14%——
    Nonclinical Business
    Weakness in Pharma business partially offset by ODS growth, leading to a decline in the overall nonclinical segment.
    Pharma revenue decline: 26%Oncology Data Solutions (ODS) growth: 17%Pharma revenue as % of total revenue: 5%
    		$14.5 million-15%——

    Operational metrics

    25
    Total Revenue
    $201.7 millionup 11% year-over-year
    Q2 FY26

    Exceeded prior guidance by approximately $4 million.

    Adjusted Gross Margin
    48.1%expansion of approximately 260 basis points versus prior year
    Q2 FY26

    Absorbed impact of higher freight costs and fuel surcharges.

    Adjusted Gross Profit
    $96.9 millionincreased 18% over prior year
    Q2 FY26
    Total Operating Expenses
    $101.6 milliondecrease of 3% from prior year period adjusted for nonrecurring impairment expense in Q2 2025
    Q2 FY26
    Sales and Marketing Spending
    $3.2 millionincreased 13%
    Q2 FY26

    Reflecting continued investment in the commercial organization.

    Research and Development Spending
    $1.7 millionincreased 19%
    Q2 FY26

    Supporting pipeline priorities.

    General and Administrative Expenses
    $8 milliondecline
    Q2 FY26

    Driven by continued expense discipline and step down from one-time expenses in Q2 2025.

    Adjusted EBITDA Pull-through
    19%
    Q2 FY26

    Representing revenue pull-through, driven by gross margin expansion and operating expense discipline.

    Capital Purchases
    $8 million
    Q2 FY26

    Including investment in NovaSeq X to move LBx on this platform.

    Cash and Cash Equivalents
    $145.5 million
    Q2 FY26
    Convertible Senior Notes Interest Rate
    75 basis points
    current

    New offering.

    Convertible Senior Notes Interest Rate
    25 basis points
    prior

    Prior notes.

    DOJ Settlement Payment
    $10 million
    Q3 FY26 impact

    Already reserved for in financials, but will impact cash from operations in Q3.

    Pharma Bookings
    up significantly
    Q2 FY26

    All-time highs for Q2.

    Net Promoter Score
    high 70s
    Q2 FY26
    Commercial Representatives
    60+
    current

    Equally balanced in each team after investments.

    RaDaR ST Orders with other tests
    30%
    early launch

    Included another test from Neo's menu.

    RaDaR ST Orders for MolDX reimbursed indications
    2/3
    early launch

    Of all orders are for indications where we already have approved reimbursement for MolDX.

    RaDaR ST Medicare Orders for reimbursed indications
    1/3
    early launch

    Of the orders from patients on Medicare are for indications where we already have reimbursement in place.

    PanTracer LBx attachment rate
    mid- to high teens
    Q2 FY26

    Increased in Q2, for liquid and solid coming in concurrently.

    G&A as percent of revenue
    38%
    FY25

    Compared to some peer groups, it is higher.

    G&A as percent of revenue
    low 30s
    FY26

    Target for the current year.

    High-volume, low-value contract volume impact
    3% to 4%
    FY25

    Made up of total volumes in 2025, approximately 50,000 tests at midpoint.

    High-volume, low-value contract peak quarter
    Q3 FY25
    Q3 FY25

    Grew from Q1 to Q2 to Q3, then exited in Q4.

    Northeast revenue growth vs. national average
    50%
    Q2 FY26

    Still about 50% above the average, seeing high-value testing pull-through.

    Industry KPIs

    1
    MetricValueDetails
    Adjusted EPS EBITDA leverage guidance$14.4 millionUSD

    Product announcements

    1
    ProductTypeDetails
    PTENlaunch

    Deals & partnerships

    1
    Epic AuraWorkflow integration

    Initial integrations announced in April, expected benefits to begin in 2027.

    Risks & headwinds

    4
    Pharma business declineQ2 FY26 and full-year FY26

    down 26% in Q2 FY26; full-year guidance revised to down high single digits

    Mitigation: Taking corrective actions, committed to returning to year-over-year growth in 2027, Q2 bookings at all-time highs.

    Higher freight costs and fuel surchargesQ2 FY26

    impacted gross margin

    Mitigation: Offset by AUP growth, volume leverage, and Lab of the Future efficiencies.

    DOJ settlement cash impactQ3 FY26

    $10 million payment

    Mitigation: Already reserved for in financials.

    Policy and regulatory changes (PAMA, CRASH, ACA)2027

    not anticipated to be significant impact

    Mitigation: Assessing initiatives, working with ACLA, portfolio assessment.

    What to watch in Q3 FY26

    5

    RaDaR ST MolDX Indications Approval

    by year-end 2026
    Current2 indications approved; 2 submitted prior to Q2; 1 submitted in Q2
    TargetApproval of 2 additional indications

    Why it matters

    These approvals are key to expanding the addressable market for RaDaR ST and driving future revenue acceleration, particularly in 2027 and beyond.

    And we still believe that the 2 that we spoke about previously, we should receive reimbursement before the -- at the end of the year.

    Q&A highlights

    8

    Given strong Q1/Q2 NGS growth (26%), how should investors think about H2, considering new product launches and potential tough comps? Is the mid-20s guidance conservative?

    Management believes NGS growth is durable, driven by intentional shift to large panels and strong performance of 5 key products. The mid-20s guidance reflects strong H1 performance. NGS volume growth was 14% and AUP growth was 12% in Q2.

    “So Dave, our view of this is we think we have a very durable position with NGS now. As you said, we exited '25 at about 22% growth, and that's why we guided below 20s. Now in the first quarter of '26 -- we did 26% in Q1, and we matched that again in Q2 at 26%. That's why we're raising the guide to the mid-20s now.”

    asked by David Westenberg · answered by Anthony Zook

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Clinical Performance and NGS Momentum

    NeoGenomics' clinical business demonstrated robust growth of 14% year-over-year, significantly exceeding expectations. This performance was primarily fueled by a 12% increase in average unit price (AUP) and a 2% rise in test volumes. Next-generation sequencing (NGS) revenue was a key driver, growing 26% year-over-year and now constituting one-third of total clinical revenue, reflecting a successful strategic shift towards higher-value testing.

    02

    Nonclinical Business Headwinds and Strategic Reassessment

    The nonclinical segment, particularly the Pharma business, faced continued headwinds, resulting in a 15% year-over-year decline in revenue. While Pharma bookings showed significant improvement in Q2, the pull-through rate from prior bookings was lower than anticipated, leading to a revised full-year guidance for the nonclinical segment. Management views the Pharma business as opportunistic, providing early market access and R&D leverage, but emphasizes that the clinical business remains the core strategic focus.

    03

    Significant Margin Expansion and Operational Efficiencies

    The company achieved substantial margin improvement, with adjusted gross margin expanding by 260 basis points year-over-year to 48.1%. This was driven by strong AUP growth, volume leverage, and efficiencies gained from the "Lab of the Future" initiative. This program encompasses digital pathology, AI-assisted lab automation, instrument upgrades, and footprint optimization, including the successful transition of PanTracer LBx to the NovaSeq X platform for improved throughput and cost efficiency.

    04

    Product Launches and Pipeline Advancements

    NeoGenomics is actively converting recent product launches, such as the PanTracer Family and RaDaR ST, into commercial traction. These products target a combined $33 billion market opportunity in therapy selection and MRD. Early feedback is encouraging, with RaDaR ST orders showing strong attachment rates to other NeoGenomics tests. The pipeline continues to advance, including a next-generation whole genome sequencing MRD assay on track for 2027 data generation and a potential 2029 clinical launch, and the recent FDA-approved PTEN companion diagnostic for prostate cancer.

    05

    Commercial Reorganization and Customer Experience

    The commercial team has been reorganized into two dedicated ecosystems, one for oncology and one for pathology, to enhance focus and accountability. This strategic shift aims to optimize sales motions for different market dynamics, leveraging the company's strong leadership in hematology to expand its broader portfolio. The company maintains an industry-leading Net Promoter Score in the high 70s, reflecting its commitment to customer experience and workflow integration, as demonstrated by a recent lung cancer patient workflow optimization.

    06

    Strengthened Capital Structure and Financial Discipline

    NeoGenomics successfully raised $316 million through a convertible senior notes offering, extending debt maturity from 2028 to 2032 and repurchasing $25 million of common stock to reduce potential dilution. The company generated $20 million in operating cash and ended the quarter with $145.5 million in cash and cash equivalents. Operating expense discipline, particularly an $8 million decline in G&A, contributed to a 36% increase in adjusted EBITDA, supporting continued investment in sales and R&D.

    AI-generated summary of the company’s earnings call. Not investment advice.