Earnings call transcript: MDxHealth Q2 2025 sees revenue growth, stock jumps

MDxHealth SA ADR, a $136 million market cap diagnostics company, reported its second-quarter 2025 earnings, revealing a strong revenue performance with a 20% increase to $26.6 million. Despite missing earnings per share (EPS) expectations with an actual EPS of -$0.15 against a forecast of -$0.1167, the company’s stock surged 11.34% in after-hours trading. According to InvestingPro data, the company has shown impressive momentum with a 47% return over the past six months, though analysts note it’s unlikely to achieve profitability this year. This positive reaction was driven by the company’s revenue growth and strategic initiatives, including the pending acquisition of ExoDx.

Key Takeaways

• Revenue for Q2 2025 reached $26.6 million, marking a 20% year-over-year growth.
• The company achieved its first quarter of adjusted EBITDA profitability at $1.4 million.
• Gross margins improved significantly to 66%.
• The stock price increased by 11.34% post-earnings and continued to rise in premarket trading.

Company Performance

MDxHealth has demonstrated consistent revenue growth, achieving a compound annual growth rate of over 50%. The company reported its first quarter of adjusted EBITDA profitability, indicating improved operational efficiency. InvestingPro analysis reveals the company maintains a healthy current ratio of 2.0 and has achieved a robust 25.46% revenue growth over the last twelve months. For deeper insights into MDxHealth’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. Despite a net loss of $7.4 million, which represents a 36% decrease from the previous year, the company remains focused on expanding its market presence, particularly in the prostate cancer diagnostic pathway.

Financial Highlights

• Revenue: $26.6 million, up 20% year-over-year
• Earnings per share: -$0.15, missing the forecast of -$0.1167
• Gross margin: 66%, up from 60% in Q2 2024
• Cash and cash equivalents: $32.8 million

Earnings vs. Forecast

MDxHealth’s actual EPS of -$0.15 was below the forecasted -$0.1167, resulting in a negative surprise of 28.53%. Despite this, the company’s robust revenue growth and strategic initiatives appear to have positively influenced investor sentiment.

Market Reaction

Following the earnings announcement, MDxHealth’s stock price rose by 11.34% to $2.75 in after-hours trading. In premarket activity, the stock continued to climb, reaching $2.90, a 5.45% increase. InvestingPro data shows strong analyst confidence, with a consensus Strong Buy rating and price targets ranging from $4.20 to $8.00, suggesting significant upside potential. The stock is currently trading at Fair Value according to InvestingPro’s proprietary valuation model, with 7 additional ProTips available to subscribers. This upward movement suggests investor confidence in the company’s growth trajectory and strategic plans, despite the EPS miss.

Outlook & Guidance

MDxHealth is projecting revenue growth of over 30% in 2026, with adjusted EBITDA margins approaching 10%. The acquisition of ExoDx is expected to contribute more than $20 million in revenue in 2026, positioning the company for continued expansion in the prostate cancer diagnostic market.

Executive Commentary

"We have delivered a revenue compound annual growth rate of greater than 50%," stated CEO Michael McGarity. He emphasized the strategic importance of the ExoDx acquisition, saying, "We are now preparing to add the ExoDx test to accelerate our growth and cement our position in the prostate cancer pathway."

Risks and Challenges

• Integration of ExoDx may pose operational challenges.
• Continued operating losses, although reduced, could impact financial stability.
• Market dynamics in the urology diagnostics sector may shift, affecting demand.

Q&A

During the earnings call, analysts inquired about cross-selling opportunities with the ExoDx customer base and the integration of ExoDx’s sales team. The company confirmed plans to align ExoDx with current market guidelines and highlighted similarities in Medicare reimbursement with existing tests.

Full transcript - MDxHealth SA ADR (MDXH) Q2 2025:

Conference Operator: Good day, ladies and gentlemen, and welcome to the MDxHealth Second Quarter of twenty twenty five Earnings Conference Call. All participants will be in listen only mode. A question and answer session will follow the formal presentation. Please note that this event is being recorded. I would now like to turn the conference over to John Francis of LifeSci Advisors.

Please go ahead.

John Francis, LifeSci Advisors Representative, LifeSci Advisors: Before we begin, I would like to remind everyone that the company will make forward looking statements during today’s call. Whether in prepared remarks or during the Q and A session, these forward looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of the company’s filings with the Securities and Exchange Commission, specifically in the company’s annual report on Form 20 F. I’ll now turn the call over to Michael McGarity, Chief Executive Officer.

Michael McGarity, Chief Executive Officer, MDxHealth: Thanks, Jen, and thank you all for joining us for our Q2 twenty twenty five earnings conference call for MDxHealth. With me today is Scott McMahon, Interim Chief Financial Officer. We are quite excited to provide an update that reflects our unwavering focus on growth, operating discipline and commercial execution. Each of these results, both individually and collectively, demonstrate our progress in becoming the growth vertical focused solely into urology in the molecular diagnostic space. We believe MDxHealth has clearly established a reputation for consistent growth and execution as demonstrated by the highlights from our Q2 results that we announced today.

Our Q2 revenue of $26,600,000 represents 20% growth and marks our seventeenth consecutive quarter of 20% or greater revenue growth. Our Q2 adjusted EBITDA of $1,400,000 represents our first quarter of adjusted EBITDA profitability, which we anticipated and guided to at the beginning of twenty twenty four. Our ability to project and deliver expected results throughout our P and L demonstrate our consistent execution across our operating disciplines led by our best in class sales team. We are currently in our fifth straight year of unbroken 20% quarterly growth. In fact, we have doubled our revenue over the past three years with the same number of reps we had post the GBS acquisition in 2022.

In my experience, this only happens when our sales team has full command of their territories and an understanding of the adoption profile of their customers. The result is sustainable adoption and forecast accuracy, which is difficult to establish, but powerful when institutionalized within a sales team. And finally, we are pleased to announce our pending acquisition of the EksoDx business from Bio Techne Corporation. We are confident that this will be a transformative acquisition for MDxHealth that is expected to provide accelerated top line revenue growth and immediate accretion to our EBITDA operating profitability. It is important to note that we applied the same rigor in our evaluation process for ExoDx as we did for our ResolveMDx and GPS tests, both of which continue to be highly successful in our end markets.

By applying the same rationale, diligence and business case thesis for all of our potential strategic growth opportunities, I believe MDxHealth will retain its position as the sole provider of answers at every point in the diagnostic pathway of prostate cancer. While the Select test has been included in the MDX Health menu since well before my arrival, a number of developments have created a market shift away from this test as an ideal solution for post PSA pre biopsy diagnostics. These factors include Select’s requirement for a digital rectal exam, as well as the pandemic associated advent of home testing kits. As we assess these evolving market dynamics, we identified ExoDx as the best in class alternative to Select from both an accuracy and ease of use perspective. And we have long respected the position that ExoDx has garnered in the market.

We also now have the opportunity to consider collaboration for distribution into the primary care setting with the DRE no longer limiting the viability of this market opportunity. With the addition of EksoDx to our menu, we will significantly strengthen our pathway solution, while also accelerating our revenue scale and growth potential. We expect this acquisition to be accretive to our now positive adjusted EBITDA in the fourth quarter post the closing of this acquisition, which is expected in September. In addition to the media benefits to our P and L, we’re also excited about the broader strategic implications from this acquisition. As part of our due diligence process, we have prospectively identified multiple cross selling opportunities made possible from this acquisition as the existing EksoDx customer base creates overlap opportunity with our customers currently utilizing Confirm and GPS tests.

We therefore believe this acquisition provides us with the opportunity to build an even higher level of strategic and comprehensive partnerships with new and existing customers as MDxHealth becomes increasingly viewed as the main provider of a full pathway of precision solutions for prostate cancer patients. Following our anticipated close in September, I plan to provide a more granular view of 2026 contributions to our P and L. But for now, I am confident in saying that we expect the additional revenue contribution from ExoDx in 2026 to exceed $20,000,000 Finally, as part of the acquisition, we are also bringing over a significant library of potential applications of the exosome technology with broad IP and clinical scientific data in multiple cancers, including prostate. We look forward to evaluating strategic opportunities from this platform, either within MDxHealth or through strategic partnering opportunities as they may present themselves. Although we have not yet provided formal guidance for 2026, based on our continued momentum and initial assessment of the impact from the ExoDx test for a full year, we believe that revenue growth for 2026 could exceed 30%, while our adjusted EBITDA margins could approach 10%.

As we get additional color on customer transition as well as organizational and operating structure detail post acquisition, we anticipate providing more detail on the financial impact for the remainder of 2025 from the ExoDx acquisition on our Q3 results call and release in November. To summarize, I believe no other company is better positioned to help improve the patient journey through prostate cancer diagnosis and treatment, and our results continue to reflect our success in bringing value to this patient population. I will follow-up with closing comments and a view forward. But first, let me turn the call over to Scott McMahon for a review of our financial and operating results for the second quarter.

Scott McMahon, Interim Chief Financial Officer, MDxHealth: Scott? Thank you, Mike. To follow on Mike’s remarks, we are very pleased to report strong performance in the 2025. Starting off with volumes. Q2 total billable volume was approximately 26,000 tests, split roughly evenly between tissue and liquid based tests and representing total unit growth of 21% versus the prior year quarter.

Volumes for our tissue based tests, which include ConfirmMDx and GPS increased approximately 26% over the prior year period. Volumes for our liquid based tests, which includes SelectMDx, ResolveMDx and Germline increased approximately 18% over the prior year quarter. Revenues for the second quarter ended 06/30/2025 increased by 20% to $26,600,000 versus $22,200,000 for the prior year quarter. As we had indicated on our Q1 twenty twenty five call, our growth this quarter remained organic and was delivered without expansion of our sales organization, reflecting the leverage we continue to generate from our sales channel and the greater market penetration of our tests. Moving below the revenue line, our gross profit for the quarter was $17,600,000 an increase of 32% as compared to $13,300,000 for the 2024.

Gross margins were 66% compared to 60% for Q2 twenty twenty four, an increase of six percentage points, primarily attributed to our test mix and improved efficiencies in our operations. Our operating loss for the quarter declined 74% to $1,900,000 compared to $7,400,000 for the 2024, primarily driven by our growth in sales and gross profit and decrease in operating expenses. Our net loss decreased 36% to $7,400,000 compared to $11,500,000 for the prior year, primarily driven by the decrease of 5,500,000 in operating losses, partially offset by a net increase of $1,800,000 in financial expenses. Finally, I’m happy to report that we have achieved our positive adjusted EBITDA milestone in the second quarter and are reporting a $1,400,000 positive adjusted EBITDA. Note that a reconciliation of IFRS to non IFRS financial measures has been provided in the tables included in this press release.

Cash and cash equivalents as of 06/30/2025 were $32,800,000 This concludes my overview of the results. I will now turn the call back to Mike.

Michael McGarity, Chief Executive Officer, MDxHealth: Thanks, Scott. I’d like to take a moment to highlight the progress of our company, driven by the focus and execution of our operating and commercial teams. In 2019, when I joined MDxHealth, we had one revenue generating test, our Confirm test, with $11,000,000 in annual revenue. At that time, we set a goal to build out our menu and establish MDxHealth as the leader in precision diagnostics focused in the urology. Our progress can be measured by a number of key milestones and initiatives we have undertaken to put us in today’s leadership position.

We have delivered a revenue compound annual growth rate of greater than 50%. We have taken our gross margin up from zero initially into the 30s and now to mid-60s through our menu expansion and operating focus on COGS and ASP accretion fueled by our expanded coverage from payers targeted by our market access managed care team. We have expanded our menu through a combination of MDxHealth developed tests, channel growth opportunities with our RESOLVE test and M and A with our acquisition of the Oncotype GPS test from Exact Sciences. We are now preparing to add the ExoDx test to accelerate our growth and cement our position in the prostate cancer pathway with an unmatched menu of clinically actionable tests. All of this has been executed with a tightly controlled OpEx structure, which is only feasible when every team in the organization is committed to growth based on focus and execution and in building a culture of performance and operating discipline.

We are very proud of our growing reputation for meeting or exceeding expectations and delivering on our commitments to patients, customers and the market, Whether in the sales force, laboratory operations, revenue cycle management, client services, patient advocacy, quality, regulatory, our entire MDx team operates under the mission that there is a patient and family on the other side of every sample we receive. That is what drives our customer base to trust MDxHealth as their laboratory partner for critical diagnostic tests that inform patient pathways. We will continue to strive to deliver on our commitments of growth and value while positioning MDxHealth as the leading growth precision diagnostics company focused solely into our high growth target urology market. And as always, we carry a great deal of responsibility to provide value to all of our stakeholders, including patients, customers, payers and shareholders. So thank you for your interest in and support of MDxHealth.

And now I’ll turn the call back over to the operator for questions.

Conference Operator: Thank you, sir. A confirmation tone will indicate that a one is in the question queue. You may press star and then two to leave the question queue. For participants making use of speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We will pause a moment while we wait for the question queue to bold.

Our first question comes from Thomas Platton of Lake Street. Please go ahead.

John Francis, LifeSci Advisors Representative, LifeSci Advisors: Thank you. Good afternoon, guys. Congrats on the quarter and the deal. Mike, just a follow-up on a comment you made about cross selling opportunities. Could you maybe dive in a little deeper into what that what those Venn diagrams look like between your customer base and the customer base that ExoDx has?

Michael McGarity, Chief Executive Officer, MDxHealth: Yes, Thomas. I think it’s very similar to our view on the GPS acquisition. So our view with that was that there were a number of GPS customers that were not currently at the time using Confirm and vice versa. I think what you’ve seen and we’ve demonstrated is our ability to leverage that mix of customer base. So new, I think access to that customer base that came over as well as being able to drive cross utilization for our current customers, we view the same opportunity in front of us with ExoDx.

So they’ve built a significant customer base. And as you would anticipate, the crossover match is not exact, right? So as we look at the opportunity to build full adoption of our menu, which is the focus of our sales organization, Thomas, I think we see significant opportunity there for our reps from an access relationship perspective to really build on what we’ve done with GPS and Confirm. When you look at the growth of our tissue based test, that’s clearly been proven to work within our sales channel. We see the same in driving that same efforts and growth acceleration with our liquid and tissue now crossed over with what we believe to be the best in class test in each of the categories.

John Francis, LifeSci Advisors Representative, LifeSci Advisors: Got it. And then kind of picking up on something you mentioned there with respect to sales reps. Are there is there a commercial team coming with the test? Or is it literally just the test itself?

Michael McGarity, Chief Executive Officer, MDxHealth: Yes. So part we of the acquisition, we’re acquiring the CLIA laboratory based in Massachusetts. And we’ll provide more detail on the full integration of potential sales reps coming over, but we’re very confident that in my statement related to the leverage it provides on the top line, while also continuing to drive and develop our EBITDA accretion as we go forward. So we want to get to close in September and provide more detail on that. But you can assume that we will take over a number of sales reps that will fit right into our channel opportunity and that the acquisition unlike the GPS, we’re acquiring the CLIA lab.

So we will not have some of the challenges over time with integration were related to the TSA agreement we have with Exact Sciences and the fact that they ran the test for us for a period of two years and we had to transfer and bring up live in our laboratory. We see this as a much more straightforward and seamless acquisition and integration. We’ll follow-up on the structural details as we proceed through close in September and release our Q3 results.

John Francis, LifeSci Advisors Representative, LifeSci Advisors: Got it. And then just one quick final one. Will Select continue to be offered? Or will you discontinue that at some point?

Michael McGarity, Chief Executive Officer, MDxHealth: Yes. We’ll comment more on the transition there as we go forward as well, Thomas. So we’re very confident that our current Select users as well as the ExoDx ExoDx users match very well, as I stated, with our current customer base and the growth opportunity in front of us. And we’ll provide detail as far as how we see that developing with that liquid biopsy based test post PSA pre biopsy.

John Francis, LifeSci Advisors Representative, LifeSci Advisors: Got it. Appreciate you taking the questions. Thank you.

Michael McGarity, Chief Executive Officer, MDxHealth: Thanks, Thomas.

Conference Operator: The next question comes from Andrew Brackmann of William Blair and Co. Please go ahead.

Kate, Analyst, William Blair and Co.: Hi, guys. This is Kate on for Andrew. Just as it relates to the quarter in particular, you mentioned the transaction should be accretive to adjusted EBITDA. Could you talk just to us a little bit more about the underlying assumptions for that from a gross margin and OpEx perspective?

Michael McGarity, Chief Executive Officer, MDxHealth: Yes, Kate. We want to provide a detail, as I noted, with expectations updating our view for Q4 and full year 2026 on the other side of closing. But what we’re confident in our diligence and the financial analysis associated with this acquisition is that the top line growth will be clear. I’ll comment more as we go forward on the gross margin impact, but you can assume and I think that would be a reasonable assumption that we have favorable margin accretion with the addition of Vistas. And our OpEx discipline that we’ve demonstrated, we expect to continue with the absorption of some of the people coming over from ExoDx and Bio Techne as well.

So very confident that that all fits in with our current positive adjusted EBITDA that we reported for this quarter and that it’s sustainable through closing integration and as we head into 2026. So we’re very excited about the fact that from the top to the bottom of the P and L, we think this is really transformative to our business. But most importantly, in the field with our customer base, we think it really, as I noted, cements our position as the sole provider from beginning to end of the diagnostic pathway of prostate cancer. So you can imagine our diligence was rigorous around the full P and L and very confident that it sets up very well going forward.

Kate, Analyst, William Blair and Co.: Okay, great. Thanks. And then just as my follow-up as it relates to the quarter, the tissue based volumes continued to grow nicely. How should we think about the levers there both on a per test basis, but also perhaps on a customer account basis as well? Thanks.

Michael McGarity, Chief Executive Officer, MDxHealth: Yes, Kate, we’re very encouraged by the continued sustainable growth of our tissue based tests. And as I always comment, while we group GPS and Confirm together, when we report unit growth on the tissue side, we’re seeing very consistent growth there, right? So it’s not that one of them is carrying the day. And it’s really reflected in the way our adoption profile is setting up, right? We want to be the provider post biopsy, whether that biopsy is negative positive.

We’re the only company or sales representative that can partner with our urology customers with that answer on the other side of initial biopsy. And that adoption is clearly taking hold, as you’ve seen over the last number of quarters with our tissue based growth. Very, very confident that that is sustainable. And we view the liquid side being significantly bolstered with this acquisition. And so now we look forward to providing very balanced growth within each segment, tissue and liquid.

And our sales team continuing to drive that 20% or greater growth rate in a very sustainable way as we go forward for the foreseeable future. And my view of next year that our revenue could accelerate to 30% or greater, we have good visibility and confidence in that as well. So hopefully that answers your question, Caden. Very excited about what this does for our business and really for our customers and ultimately the patients as the sole provider of these answers.

Kate, Analyst, William Blair and Co.: Yes, very helpful. Thanks for the questions.

Michael McGarity, Chief Executive Officer, MDxHealth: Thanks, Kate.

Conference Operator: The next question comes from Bill Bonello of Craig Hallum. Please go ahead.

Bill Bonello, Analyst, Craig Hallum: Hey guys, thanks a lot. Handful of follow-up questions here. Where does ExoDx fit sort of in terms of market leadership for this kind of test? And then maybe you can just talk to us about reimbursement and guidelines. I know Select as an LCD and is in some guidelines.

Does that hold for this test too?

Michael McGarity, Chief Executive Officer, MDxHealth: Yes, Bill. So we’re very confident in the position that ExoDx has taken both in the market as well as from a guideline. And I think I would say that they the data and clinical scientific data associated with the EgsoDx probably surpasses that of Select as well as guideline inclusion, to your point, as far as reimbursement goes, so the laboratory is based in Massachusetts. So we’re in the NGS MAC. But I think it would be safe to assume that as we go forward that the Medicare reimbursement rate is similar to our select test, albeit in a different Medicare MAC.

Bill Bonello, Analyst, Craig Hallum: Okay. And I guess I just wasn’t clear, sorry, on the guidelines. Are you saying it is in the guidelines or the data is there that you could get it in the guidelines?

Michael McGarity, Chief Executive Officer, MDxHealth: No, it is in the guidelines, both NCCN and Hague Way.

Bill Bonello, Analyst, Craig Hallum: Okay. So it’s probably

Michael McGarity, Chief Executive Officer, MDxHealth: a stronger arguably a stronger position than Slack currently has in the market. And sorry, because embedded in your question was from market share or penetration or leadership position in that sector. We, as I noted, have really long respected their position and the progress they’ve made over the past few years. Candidly, they’ve been successful in some of our select accounts based on some of the dynamics that I made clear with the lack of a DRE requirement and their opportunistic capture of the viability of home testing kits for their tests without the D area requirements. So this is something that we’ve seen in the market over the past number of years.

And the fact that we were able to capitalize on this opportunity, I think puts us in a very, very strong position.

Bill Bonello, Analyst, Craig Hallum: And just on the reimbursement front, just so I’m crystal clear here. I mean, assume that they’ve been getting paid by Medicare, you know what the Medicare reimbursement experience for them has been?

Michael McGarity, Chief Executive Officer, MDxHealth: That is correct. And that’s what I’m saying. So our very similar to our slide from a reimbursement rate. And that was my comment as far as the contribution to the P and L. I didn’t comment specifically on the gross margin profile, but we’re confident it’s accretive.

Bill Bonello, Analyst, Craig Hallum: Okay. That’s really helpful. And then just a question, I know you’re going to give more on the financials once you close the deal and whatnot, but you did you threw out this $20,000,000 plus revenue contribution. Should we think of that as sort of a is that a net contribution after any select revenue might roll off? Or is it are you saying more like this is a $20,000,000 revenue run rate product?

Michael McGarity, Chief Executive Officer, MDxHealth: We expect the ExoDx contribution to our revenue to exceed $20,000,000 next year.

Bill Bonello, Analyst, Craig Hallum: Okay. Maybe I’ll follow-up.

Michael McGarity, Chief Executive Officer, MDxHealth: No, I don’t want to duck your question if you’re asking is that Select and Exo combined? Or do we expect an incremental contribution from ExoDS revenue of 9 Right. Dollars or It is the latter.

Bill Bonello, Analyst, Craig Hallum: Okay, perfect. That’s really helpful. And then just I know you take a while to think about synergies and whatnot, but you are acquiring a lab over time. Is there opportunity for lab consolidation? Or do you really need multiple labs to perform all your tests?

Michael McGarity, Chief Executive Officer, MDxHealth: Well, won’t comment on that. I don’t think either is necessarily the case, right? Whether we need multiple labs to run our tests is not the question. We believe that we have now three laboratories that are world class that operate in a setting that allows for reimbursement, customer service. Our laboratory in Texas was somewhat designed around the required turnaround times for Resolve.

Irvine is our legacy laboratory here at MDxHealth. And we view ExoDx lab in Massachusetts as operating to that same standard. We don’t see any need to change that.

Bill Bonello, Analyst, Craig Hallum: Excellent. Thank you very much.

Michael McGarity, Chief Executive Officer, MDxHealth: Bill, thank you.

Conference Operator: Ladies and gentlemen, we have reached the end of the question and answer session. And this concludes today’s event. Thank you for attending, and you may now disconnect your lines.

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