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Introduction & Market Context
NeoGenomics Inc. (NASDAQ:NEO) presented its third quarter 2025 financial results on October 28, showcasing 12% year-over-year revenue growth driven by strong clinical volume performance. The cancer diagnostics provider’s stock responded positively, surging 8.07% in pre-market trading to $10.98 following the earnings announcement that beat analyst expectations.
The company reported earnings per share of $0.03, exceeding the forecasted $0.02, while revenue reached $188 million against market expectations of $183.74 million. This performance reflects NeoGenomics’ continued execution of its strategy to become "the world’s leading provider of comprehensive cancer testing, data and solutions."
Quarterly Performance Highlights
NeoGenomics delivered strong results across its clinical business, with particularly robust growth in next-generation sequencing (NGS) services. The company highlighted three key achievements in its quarterly presentation: strong clinical performance, strategic wins with its RaDaR technology, and acceleration in NGS adoption.
As shown in the following summary of key quarterly metrics, the company achieved double-digit growth in several important areas:
Clinical volume grew 15% year-over-year to 361,000 tests, with 10% growth on a same-store basis (excluding the Pathline acquisition). This volume growth, combined with a 3% increase in revenue per test, drove an 18% increase in clinical revenue (15% on a same-store basis).
The following charts illustrate NeoGenomics’ consistent growth trajectory in clinical metrics over the past five quarters:
NGS revenue growth was particularly impressive at 24% year-over-year, now representing approximately one-third of the company’s clinical revenue. This acceleration in higher-value testing reflects the company’s strategic shift toward more advanced diagnostic capabilities.
Detailed Financial Analysis
NeoGenomics reported total revenue of $187.8 million for the third quarter, representing an 11.9% increase from $167.8 million in the same period last year. Despite this growth, adjusted EBITDA declined 8.5% to $12.2 million, marking the ninth consecutive quarter of positive earnings but reflecting some margin pressure.
The company’s detailed financial overview reveals mixed profitability trends:
Adjusted gross profit increased 6.6% to $85.4 million, but adjusted gross margin contracted by 228 basis points to 45.5%. Similarly, adjusted EBITDA margin declined by 146 basis points to 6.5%. This suggests that while NeoGenomics is successfully growing its top line, it faces challenges in maintaining profitability margins during its expansion.
The following breakdown shows how the company calculates its adjusted gross margin:
Cash position decreased significantly year-over-year, with cash and cash equivalents totaling $164.1 million compared to $361.9 million in the third quarter of 2024. This 57.7% reduction in total cash and marketable securities reflects the company’s investments in growth initiatives and acquisitions. Operating cash flow remained positive at $8.9 million for the quarter.
The company’s adjusted EBITDA calculation bridges the gap between its GAAP net loss and non-GAAP profitability measures:
Strategic Initiatives
NeoGenomics highlighted several strategic achievements during the quarter that position the company for future growth. Most notably, the company secured a victory in RaDaR patent litigation, strengthening its intellectual property position in the minimal residual disease (MRD) testing market.
The company also launched its RaDaR ST (solid tumor) test with pharmaceutical clients and received MolDx approval for the test, paving the way for broader commercial adoption. According to the earnings call, a full clinical launch of the RaDaR ST assay is planned for Q1 2026.
"We believe we have one of the most sensitive assays in the market," stated Warren during the earnings call, highlighting the company’s competitive edge in MRD testing. CEO Tony Zook added, "We are well positioned to capitalize on this lucrative market," emphasizing NeoGenomics’ strategic positioning.
The company’s key achievements reflect its focus on clinical growth and technological advancement:
Forward-Looking Statements
NeoGenomics affirmed its full-year 2025 guidance, projecting revenue between $720 million and $726 million, representing 9-10% year-over-year growth. The company also maintained its adjusted EBITDA guidance of $41-$44 million, representing 3-10% growth.
Management expressed confidence in continued clinical volume growth, with NGS and MRD testing identified as key drivers for 2026. While the company currently operates at a GAAP net loss, analysts expect NeoGenomics to achieve profitability this year, according to consensus forecasts.
The company faces several challenges, including market penetration for MRD cancer surveillance remaining below 10%, integration risks associated with the Pathline acquisition, and potential economic uncertainties that could impact healthcare spending. However, management remains optimistic about NeoGenomics’ competitive positioning and growth trajectory.
"Our unwavering focus on delivering a superior customer experience is resonating in the marketplace," noted CEO Tony Zook, highlighting the company’s commitment to service excellence alongside technological innovation.
With nine consecutive quarters of positive adjusted EBITDA and continued revenue growth, NeoGenomics appears well-positioned to capitalize on expanding opportunities in cancer diagnostics, particularly in the high-growth NGS and MRD segments, despite near-term margin pressures.
Full presentation:
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