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Introduction & Market Context
Adaptive Biotechnologies (NASDAQ:ADPT) delivered strong second-quarter results that exceeded analyst expectations, with its Minimal Residual Disease (MRD) business reaching a significant profitability milestone. The company’s shares rose 1.37% to $10.98 in aftermarket trading following the announcement, reflecting investor confidence in its growth trajectory.
The biotechnology company has positioned itself as a leader in immune-driven medicine, with its clonoSEQ assay gaining traction across multiple lymphoid malignancies. Recent regulatory developments, including updated NCCN guidelines in Multiple Myeloma and a positive opinion from EMA’s CHMP supporting MRD testing as an endpoint in clinical trials, have strengthened the company’s market position.
Quarterly Performance Highlights
Adaptive Biotechnologies reported total revenue of $58.9 million for Q2 2025, representing a 36% increase year-over-year and exceeding analyst expectations. The company’s MRD business, which accounted for approximately 85% of total revenue, grew by 42% year-over-year to reach $49.9 million.
A key highlight from the quarter was the MRD business achieving positive adjusted EBITDA, marking a significant milestone in the company’s path to profitability. This achievement came alongside improved operational efficiency, with total operating expenses decreasing by 7% year-over-year.
As shown in the company’s quarterly highlights, Adaptive made substantial progress across multiple strategic initiatives while simultaneously improving its financial position:
MRD Business Growth
The clinical testing segment showed remarkable growth, with revenue increasing by 57% year-over-year in Q2 2025. This growth was driven by continued expansion of clonoSEQ test volumes, which reached 25,321 total tests in Q2 2025, with 24,624 tests in the US market.
The company’s bar chart illustrates the consistent quarterly growth in test volumes since Q1 2024, demonstrating strong market adoption:
Several metrics highlight the broadening adoption of clonoSEQ testing:
- 44% of MRD tests were performed using blood samples in Q2 2025
- Community setting test volumes grew 16% quarter-over-quarter
- 3,718 healthcare providers ordered tests in Q2 2025, a 35% increase year-over-year
- 18,033 unique patients were tested in Q2 2025, representing 40% growth year-over-year
The pharmaceutical partnership side of the MRD business also showed strength, with 20% year-over-year revenue growth including milestones. The company recognized $5.5 million in milestone revenue during the quarter and noted approximately 175 global active clinical trials utilizing their technology.
Strategic Initiatives
A key strategic focus for Adaptive has been integrating clonoSEQ into Electronic Medical (TASE:BLWV) Record (EMR) systems to streamline workflows and accelerate adoption. The company made significant progress in this area during Q2, with 154 total EMR-integrated sites now operational.
The following slide details the company’s EMR integration progress, highlighting the potential for accelerated growth:
The nationwide launch of Flatiron OncoEMR integration on July 1st represents a significant milestone, as mature EPIC-integrated sites are growing approximately twice as fast as non-integrated business. This integration strategy appears to be creating a competitive advantage, with the company noting that it helps "build a scalable competitive moat."
Adaptive has also made progress on other strategic priorities, including the launch of NovaSEQ X Plus and phase 1 of its collaboration with NeoGenomics (NASDAQ:NEO). The company’s execution against its 2025 strategic goals shows several achievements already completed:
Financial Analysis
Adaptive’s financial performance showed improvement across multiple metrics in Q2 2025. Total (EPA:TTEF) gross margin reached 69%, while sequencing gross margin improved significantly to 64%, representing a 14 percentage point increase year-over-year.
The company maintained a strong cash position of $222 million while reducing its quarterly cash burn to approximately $11 million, a 36% decrease compared to Q2 2024. This improved financial discipline is reflected in the detailed segment performance:
The MRD segment achieved an adjusted EBITDA of $1.9 million, representing a 117% improvement year-over-year and marking the transition to profitability for this business unit. Meanwhile, the Immune Medicine segment showed a 14% improvement in adjusted EBITDA, though it remained negative at -$6.1 million.
Forward-Looking Statements
Based on the strong first-half performance, Adaptive Biotechnologies has raised its full-year 2025 revenue guidance for the MRD business to between $190 million and $200 million, up from the previous range of $180 million to $190 million. This updated guidance represents 31-37% year-over-year growth.
The company also lowered its expected cash burn for the full year to between $45 million and $55 million, down from the previous guidance of $50 million to $60 million, reflecting improved operational efficiency:
Adaptive remains focused on executing its strategic priorities for both the MRD and Immune Medicine businesses. For the MRD business, key goals include increasing the percentage of orders through EMR-integrated sites to approximately 50% by year-end and expanding blood-based testing to more than 45% of all clonoSEQ testing.
In the Immune Medicine segment, the company continues to develop digital TCR-antigen prediction models and generate pre-clinical data in its lead autoimmune indication, while maintaining disciplined spending with a targeted cash burn of $25-30 million for this segment.
With its strong performance in the first half of 2025, Adaptive Biotechnologies appears well-positioned to maintain its growth momentum while progressing toward overall profitability, building on the milestone achievement of positive adjusted EBITDA in its core MRD business.
Full presentation:
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