NeoGenomics (NEO) Q2 FY26 earnings call: guidance and Q&A

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

What is happening in the biopharma segment, given its decline and small contribution to total revenue? What is its strategic importance, and what are the plans to return it to growth?

Pharma revenue missed expectations due to lower pull-through from 2025 bookings, despite Q2 2026 bookings being at all-time highs. Management sees it as opportunistic for early market access and R&D leverage, not core to the main clinical business. It's a small part of the portfolio, so small swings have a large percentage impact. Committed to returning to growth in 2027.

“But an area where we just didn't hit our own expectations was on the nonclinical pharma side primarily. And what I would tell you, Dave, that we liked in the quarter, bookings were up significantly in Q2. So the new team that's in place is driving and delivering what we expected from the bookings.”

asked by David Westenberg · answered by Anthony Zook

How sustainable is the strong AUP growth (12% in Q2), given market competition? What is the expected mix of AUP vs. volume growth for clinical in H2 FY26 and FY27?

AUP growth is driven by RCM initiatives (managed care pricing, pull-through) and mix shift to high-value NGS testing. NGS volume growth is durable, supporting AUP. Significant RCM runway remains. H2 FY26 will still be AUP-led due to the exit of a high-volume, low-value contract in Q3 FY25. Mix will shift in FY27, with volume growth returning to mid-single digits and AUP growth softening.

“Given the fact we believe that the NGS volume growth is pretty durable, we believe that we will continue to see this AUP benefit in the future quarters to come. That basically gives us a comfort. And at the same time, I would say that there is a meaningful runway left for us on the RCM side as well because still there are opportunities for us to improve the pricing on the contracts that we currently have got.”

asked by Puneet Souda · answered by Abhishek Jain

What are the milestones for RaDaR ST indication expansion in the next 12 months? How does increased patient eligibility impact testing cadence? Clarify TAM assumptions for 40% vs. prior 45% with 4 indications.

Expect reimbursement for 2 additional indications by year-end 2026, and the third submitted indication in H1 2027. Commercial investments will follow approvals. The 40% TAM access (if all 5 indications are approved) is a significant increase from prior 2 indications. The 45% figure was not previously shared by management.

“And we still believe that the 2 that we spoke about previously, we should receive reimbursement before the -- at the end of the year. And we expect somewhere in the first half -- latter part of the first half of 2027 for this third indication.”

asked by Tycho Peterson · answered by Warren Stone

How will the company achieve G&A leverage given increased S&M and R&D investments? Is the 250-300 bps operating expansion algorithm still viable?

G&A is a focus area, targeting low 30s as a percent of revenue this year, and potentially below 30% in 2027, which is higher than peers. This leverage will fund S&M and R&D investments. Other enterprise efficiencies, particularly from the Lab of the Future, will also contribute to bottom-line performance.

“When we look at the numbers, we feel that our G&A spend as compared to some of our peer groups is definitely higher. And when I look at the G&A only, it was like, what, 38% or so as a percent of revenue in '25. We are targeting low 30s this year. And we hope that the number, the percent on the G&A will continue to reduce further in the outer years, perhaps lower than 30% in 2027.”

asked by Tycho Peterson · answered by Abhishek Jain

How is the early experience with PanTracer Liquid going? Is it being used as an alternative to solid tumor testing, or are oncologists ordering liquid and tissue together, or serially? What is the potential upside from increased blood-based test usage?

PanTracer Liquid is contributing to robust category growth. Seeing growth from new liquid users, share gains from competitors, and increased concurrent ordering of liquid and solid tests (mid-to-high teens attachment rate). Serial testing is small but growing. It also serves as a reflex test for QNS/TNP tissue samples.

“We started to see an increased attachment rate as well, where we're seeing liquid and solid coming in concurrently. So that increased a little in the second quarter, and we're sort of mid- to high teens percentage rate there as well. So that's also starting to gain traction.”

asked by Daniel Brennan · answered by Warren Stone

How should investors think about CapEx plans for NovaSeq X, the transition timeline, and expected gross margin benefit for this year or next?

PanTracer LBx is the first liquid platform transition. The more significant heme transition to NovaSeq X will take several quarters into early 2027. No significant gross margin benefit from the liquid transition this year due to its small portion. Gross margin expansion related to NovaSeq for heme will start in the latter part of 2027.

“So this is basically our first transition to the NovaSeq X on the liquid platform. We are now going to be starting our most important piece, which is the heme transition to the NovaSeq X, which is going to take a few quarters and in the early parts of 2027.”

asked by Subbu Nambi · answered by Abhishek Jain

What is the size of the pathology business relative to oncology, and what steps are being taken to ensure continuity after reorganizing the commercial team into dedicated oncology and pathology ecosystems?

The company now has sufficient scale, with about 60+ people in each team, allowing for the reorganization. This move addresses the different sales cadences and motions required for the market-leading pathology business vs. the penetrating oncology business. It aims to sharpen focus, improve targeting, and lead to better outcomes by providing distinct supporting structures for each ecosystem.

“So we're actually now with the investments that we made leading up to this quarter and we'll make this quarter, we're about equally balanced, and you could think about sort of 60-plus people in each of those teams now.”

asked by Mark Massaro · answered by Warren Stone