NEO - Earnings call transcript Q2 2022

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Operator

Good day, ladies and gentlemen, and welcome to the NeoGenomics Second Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Lynn Tetrault. Ma’am, the floor is yours.

Lynn Tetrault

Thank you, Mike, and good morning. everyone second welcome call. XXXX to like to quarter NeoGenomics’ conference I’d

Sholehvar, Clinical me our our and Chief Eidson, Bonello, David from this Pharma Financial Relations. our of Myers Dr. Joining President call Charlie Bill Services Fort Division for of President Vishal Division; Sikri, headquarters and are Officer; Director President of Investor our Inivata; our of

our of incoming phone Lab call Executive Directors. on via are and Dr. Chris Kulkarni, of Officer; the member Smith, and Operations and President Chief Chief Officer Board of Scientific Joining Shashi our

Before forward-looking we begin our this prepared used remarks, Charlie will statements discuss non-GAAP call. the and on measures

Charlie Eidson

This conference in to such uncertainties materially that anticipated our and operating projected initiatives, call results results from could and those cause risks XXXX and actual forward-looking about to subject XXXX financial performance. differ statements. outlook, is opportunities, forward-looking includes growth Each statements statement

that and the XXXX section Statements this Additional is we as to speak or we the XX-K issued filed information heading the on XX, Report Commission. year the regarding call, for morning Forward-Looking the under Form these of the factors ended release call press the date our revise appears original of only Annual in of December Risk undertake statements made no and these statements. The and Exchange forward-looking with obligation any in on risk this update of Securities Factors

this not greater GAAP, be be to non-GAAP financial certain during The adjustments by regarding should addition, presented GAAP non-GAAP involve In to that an measures press measures provide operating measures transparency measures to financial performance, GAAP be financial table are considered most on available the be comparable of to conference order release in the directly in not issued refer required referenced Any measures should financial call, financial this our financial alternative measures we non-GAAP to the to be non-GAAP results. a morning. measure considered and unlikely are call to we by other companies. reconciled provided to to liquidity, comparable in

back that our we will I the of for to morning’s Relations Investor call prepared is section shortly turning copy the Lynn, the remarks let after call this want on Before website to call be a our available completed. of making everyone know

We that that to also call. a everyone want the let person order to within are to of know has give going one for allotted to questions chance limit questions been this we one to in hour people the more ask number per

Lynn Tetrault

Charlie. you, Thank

the that of For the will call, state today’s call, I sharing leadership recent and before RaDaR initiative Bonello made XX-month our Bill since our our exciting update to performance progress company our begin we then including and it improvement update on have quarter labeled back second Project Catalyst. me review have appointments turning earnings on assay. financial an company-wide our progress by on will discuss an last results to we

Neo on Smith few Finally, during XX will chose will company’s thrilled the our that officially taking NeoGenomics months are he Monday, I he CEO, as we why plans leader. August his on job. on join perspective introduce his and new will join his provide Chris over to next Chris first and is who

employees made that plan throughout including we performance. not three pleased have leadership and to our operating our We leaders considerable still committed CEO for we a team, hiring would this all stand we we in then to of fronts. questions stabilizing improvements time key and company. CEO, I the additions on incredibly report transition, progress said am executive transition, during answers. proud are that to and key the company and will our permanent We drive developing Since have to a prior priorities: the

on embark and together as in forward. a time continue rallied move our our to business, During new people leaders, welcome Catalyst, have Project challenging talented RaDaR we

a Board to as Chris with his and experience. four caliber Board growth fit, recruited experience, orientation. strategic search Monday. our qualities the and less CEO to candidates: he exceptional a in have leader is and and of for CEO we company does a diagnostic the permanent important all a Not of criteria key incoming a CEO successfully a strong attributes that industry strong other CEO only reputation are these Chris prioritized than operational four seeking in is completed on we will track possess public but execution, months delighted an The brings start First the in foremost, CEO, that excited such record Chris of lead Smith company. cultural spades, very prior

Chris’s We prepared introduce remarks. in in him greater will the when we later discuss background detail

addition of pleased to our Officer be to able team we the our addressing two technology Commercial Vishal a CEO, excellent Services priority traditional President stabilizing toward Vishal skillset and veteran more of businesses a innovative services were experience a Pharma both made to in highly and progress May in and diagnostic and as companies. In new number President recruiting recruit whole. workforce leadership unique We as Sikri Division industry serve Inivata. leading with pharma oriented brings both to Chief

joining to and Dr. leaders Board bringing and each with Kulkarni pleased experience are Dr. have NeoGenomics. leadership hit that in is the David the March and and New ground Sholehvar I since Shashi running the

previously last we as of Chief functions, policies we interim and leader our General a been Compliance appointed week, lawyer. endorsement leader legal the Officer has and and programs. the and with Ali March, talented Hashemi, in oversight Hutan Chris is company a have compliance Secretary. Ali Counsel, Counsel Together years Smith, of General confirmed appointment of and served three with with the excellent as very we as Corporate for Olivo Just experienced whom

our that have confident the am to our six leadership stabilized, The leadership months, has organization met meaningful team We leadership reins and have team entire than and the organization is he I is Chris added on and and Monday. of prioritized people talent leadership last motivated, they levels. as the that engagement and work beginning some with personally our to team and very exceptional all leadership team excited the over takes executive visible are at aligned stronger ever. the with him I

priority causes have to third to develop to improve underperformance improvements performance. over and have we next drive of Catalyst, months. the plans diagnose to a worked Project April, operational was XX Since Our developed the plan,

are type that We as have I already would changes that necessary. describe taken several new would near-term actions any agree executive no-regrets

initiatives, more Smith results. financial be we comprehensive launch Bill after Project will in detail involved. As the more I CEO will incoming Catalyst heavily describe reviews Project Chris Catalyst

to progress of an RaDaR, future. on Bill, the I which like important update you part of Before I remains hand the call our over to would

for types We that combination ASCO submission that will cancer continue and to presented we in the recently to submission latest last indication. resubmitted of for was being cancer coverage that to We to coming have pursuing are believe Clinical showcased second CRC our published In additional RaDaR’s a of anticipate breast productive cancer CHiRP Journal needed MolDx criteria for able at hopeful of months. orally initial parallel, garner file in colorectal specificity and the meets this the we HR+/HERX- in we concurrently study breast in sensitivity and half submission and XXXX. elite in Oncology month. our The the reimbursement this first reimbursement receive discussions and with MolDx are indication for we

we RaDaR we evidence data ongoing bolster studies make believe We further continue generating set. to for will several progress our and have that

across will session The call these we We with making cancer negotiations. who to sign the and highlighting studies are two now progress standing in turn coming discussions the ovation, significant, RaDaR into over received finalizing Bill plenary are incorporate stage late RaDaR of confident several are Bonello I with for companies types will was in ASCO review we to buzz BioPharma many opportunities multiple RaDaR quarters. the their a will a that value clinical quarter including and financials. that at

Bill Bonello

an call. factors are last a targeted discussed panels include Thank our challenges but volume you, by on Revenue and revenue offerings. smaller, X% to be we to operational impact X% Lynn. more down year-over-year market increased to from sequentially, continues dynamics year-over-year. test Volume short-term earnings services was service ongoing larger, the that having Clinical year-over-year on X% increased comprehensive to customer $XXX million. These million. increased impacted $XXX that Clinical shift growth X%

we and rate Medicare are of upgrade in our a to starting which revenue effect Average working up the X% to and the product areas. this year. $XXX the cuts at XX% We than $XX million services bookings beginning backlog was progress reimbursement quarter with sequentially contributions both were more ended We $XXX. into year-over-year Pharma year-over-year. are our make efforts went NGS which QX. million, in offset increased of operations to from offering X% improve ongoing strategic our Positive test lab and per

million, increased X% While was year-over-year. revenue down $XX services X% pharma revenue to sequentially

have trends to not We are satisfied and revenue growth. been conversion obviously current taking with action drive our increased revenue

Our sales emphasis our in earlier project revenue life-cycle a shorter a management conversion force cycles project. with implementing placing revenue and on through is to team projects the processes pull is greater of

emphasis we companion clinical opportunities. will our studies backlog large increase will While continue and of near-term also on we our revenue diagnostic to out growth, build

is clip. rapid reported in continues Our revenue, which services informatics a grow pharma at to

decline XXX was was gross initiatives. margin amortization was about XX%. basis those related logistics supply are expense, excludes Adjusted which costs, excited margin We the by driven year-over-year. gross Inivata wage margin, The higher and gross points XX.X%. costs. of declined year-over-year increasing progress GAAP non-cash inflation, Adjusted

sequentially to We both XXX higher able margin to AUP. that volume points report as improved and gross basis leverage were are pleased we

have for improvement. by encouraged still While improvement we margin, are room in we significant gross the sequential

over gross cost and to we evaluating completed. We we efficiency as part as Catalyst we of improvements time drive have these of plans a continue a margin can long believe are list process are projects and Project

been are that half will to increases anticipate see costs we price to of during second some benefit the we that the able year. have passthrough inflation we the incurring from of higher and some We due

that expense testing. recurrence G&A residual was and a this We The to increased full our Inivata, primary a absorbing expense new area was July Catalyst in quarter, costs. leading Also, are RaDaR, opportunities loss expenses improvement of last for on of number another supporting which increase is to pleased report from have $XX decreased what we minimal year-over-year to a already year. $X reduce is from million believe Myers in significant quarter focus QX. identified to operating expense acquired have QX. million. XX last Adjusted Fort at clinical investments sequentially moved of of we the facility. our lab and make $X driver G&A June operation continued from EBITDA $XX Reducing million for we is for assay million of also a disease Operating previous our million $X testing officially Project to we which

balance with time range. to like two we a to cash DSOs of sequentially marketable a spend would are little and of and Turning year. I sheet, discussing the exited days million the our securities. improvement quarter XX outlook consistent in the our for remainder represent $XXX normalized four-day with

with XXXX conjunction a CEO, our As guardrails we in guidance provide reminder, the do our EBITDA we again in our And departure revenue did will some of withdrew we on QX March and call. so but today. previous

We come thus as rebuilding view improve primary time. in a We strongest could a current modestly standpoint revenue full clinical seasonality QX lay year will profitable evidence From flat expect of is focus efficiency, where and on over XXXX a modestly growth our continue QX operational now up year, sustainable, to is that be support drive of quarter to year-over-year in foundation product basis. to our the typically support it’s a QX. revenue our generate below year RaDaR, possible offering, to that

QX in profitability, greater EBITDA be the In we we adjusted QX. loss similar or what terms of reported to expect modestly to than

has to to We we of chance forward see to his introducing Chris the business currently to around back where provide I who Smith. get our headed. around report before QX. incoming to QX Chris Project details call guidance had once and has now will arms We expect a We in reinstate continue are will improvement to look Lynn sense reinstating better a turn February. CEO, the we more guidance earnings in when expect Catalyst

Lynn Tetrault

Bill. Thank you,

This member initiative Catalyst, As or encompasses competitive people that insights an mentioned, pillars, Project have focus. end of executive analytics. to of XXXX. an our plan entire leadership optimization, business we engaged organization capabilities, and through improve our the four appropriate led and the I pillar with take XX-month us will and growth recent of lab Each areas, is our key by of team. launch

these drive all the months, Over effectiveness initiatives engaged past key efficiency, to to in identify and have employees areas. two improvements we at in levels

We have identified a led each an by agent”. critical projects number of “change internal

associated leadership plans We implementation estimated with team have net evaluating each time prioritizing in The important and order and benefit most conducted is and initiatives analysis the initiative. to determine project the and a develop detailed timing.

are already that will we well in months. the outpace the discussed underway, kick from million these Some the projects quarter. benefits off coming $XX last others We and that benefit will initiatives anticipate

We a into provide target new updated expect once his to is an bit settled more Chris role.

While is a and internally. Project of implementation, the team of about we significant we Catalyst for in stages around are engagement the level early excited initiative have focus the our

have over improve examples We forward efficiency already to I to expect to updates. of and time better progress two kinds look “No illustrate to undertaken performance providing our In margins. efforts, the of to the we laboratory and our translate into we our Regrets” improving share specific within want changes future meantime,

with testing. process faster instances duplicated specific been of at our to procedure. later for early but readout particular is one There part are is gene an time certain changes made this our that scaled customer, tests a these time methodology had one evolved where This a become have a to from a of ancillary has readout in include One on early sense process may standard as panel. turnaround larger

technology As due incurring are duplicate we corresponding instances. not without bill early has readout to for but become only costs ability both less evolved, unnecessary also to and tests that multiple running the impactful, has

changes and both testing started and will efficiency that quality. instances while retaining have ancillary over processes margin process lab We time improve removing our the already our high anticipate the of of from

a also are dry share our that intelligence back-end taking where Cytogenetics to processes opportunities automation new our will software in to laboratory We introduce efficiency implemented artificial are company-wide. laboratory expect we we we and into excited analysis possible have that improve

gone we with implementation for software. in already the days live early productivity still have seeing sites gains While are that

further the as we testing We process look similar efficiencies. across tools are in evaluating for of of modalities other

future CEO We have are would Catalyst we look like introduce Chris of development date providing initiatives to Regrets” on to call, progress. progress our discussion our updates the on exciting and Smith. project excited made about the incoming the the to to “No Shifting most I forward

individuals, diagnostic background, impressive Before I attracted search underscore industry. competitive, share prioritizing candidates from Board to Culture I a want our Officer Chris’ the Search interested few of details Chief members would like finalist candidates. and After CEO that several and all and candidates, Chris and Committee why. explain about was the our interviewed without process many I ten interviewed thorough then nearly was the question and opportunity first to choice the the list

brings served XXXX. record CEO very a as the XXXX delivery a of May a Neo successful to Diagnostics Clinical from CEO track impressive He to in background as Chris First, Ortho of diagnostic industry. and

that During med-tech of of $X.XX this CEO with publically year. improved his served Cochlear, Quidel growth achieved XXXX leadership, to raising Chris combination the in successfully closed completed company Ortho alongside initial through also a public accelerated from revenue as Clinical an profitability. traded company, also offering, XXXX. successfully guided billion, He a and May

Chris improvement in oversaw profitability. tenure, and revenue his XX% During annual organic increased

and candidates the people over to coupled success that started and how now are welcome delivery, Neo. Chris to addition the style. culture mission would excited past profitable and because fit through we note culture. complete has I growth is, Chris this of the turn to leading not to the CEO. others from is his Please yet, because shareholder a over to NeoGenomics next for the search with operational driven us like to and several years, of out portion officially the impressed he proven process in creation Chris passion participate call in In leadership have value, patient away as and The we him confidence the and board and very Chris I Chris best Chris Q&A of out call. our his will that his the focused himself. of introduce is of especially What for not stood all inspiring the dynamic in in concluded We CEO met of far for

Chris Smith

Lynn. will myself from excitement to brief Thanks keep my the did but I I and echo introduce comments side. want my

clear leader testing to play critical in role in market had market, patients. of cancer lives and a NeoGenomics the As information cancer a millions has the of

a longstanding biopsy pathologists I relationships technology combining remains value in the community Inivata’s information, see most. with and it world care platform. business liquid strong company’s Given capabilities, needed to believe clinical oncologists, Informatics and the bring Neo I positioned Strategically with to meaningful Pharma Services class ideally cancer where is

a that The part in patients to such culture. NeoGenomics Just a a a oncology has and the be mission company join. was first of mission decision important as an puts important, central my company space a in driven factor to very ability with is

am I a months now Monday, to with market business. prepared our started. customers, I to Lynn NeoGenomics both As out turn of and spend on join the the to few laboratories patients, conclude in excited officially teammates to field plan the our to will the back in understanding and of deep the next I call flow remarks. get gain I our the in

Lynn Tetrault

our rallied a to Chris. time during move our Project embark people continue Thank forward. on have together RaDaR you, welcome as talented Catalyst, In and in summary, leaders, new challenging we business,

exceptional announcement Chris of On the talent by leadership Monday. our front, some on highlighted we who joins over six CEO the incoming months Smith have added last the

And to thrilled Directors, role and new CEO. an terrific future Interim team to bright in am the well organization leadership the NeoGenomics during I incredibly lead the welcome thank and an us for cancer ever the positioned rewarding the I I and diagnostics of provided I Q&A. been We execution as ahead our resume of have to we improving more to opportunity for transition. our confident market to experience. you me entire has Board Chairwoman a Eidson would under the will to support now this Charlie team and over and as NeoGenomics. leadership. through the to now take as in call independent leadership hand have Chris honor my CEO than compelling strategic are position am this Board for like Serving

Charlie Eidson

submit at for us we email like At are point, this to to to the via and would matter question, Incidentally, listeners. a free the like please already at this our listening session you only to call feel if during open questions conference call-in call end we webcast questions. addressed if subject the hasn’t address and your Q&A will charlie.eidson@neogenomics.com the been by would

As mentioned within their you like limit at call keep may to hear that for this allotted each this the up call, questions. the would questions so call. Operator, now open may to everyone ask beginning to and one hour of person still we we for from the

Operator

from comes do first We Instructions] from William it questioner [Operator have Weinstein Blair. Brian our and

Brian Weinstein

Chris, I you. your if Hi been and Lynn, lifted off shoulders. deep weight heard like aboard still of side you’re It has of a listening, welcome from sounds relief a

on point, level some the, higher So process. near really but questions here. into kind bit of dig a the at dynamics you have kind congratulations of little this term to completing We’ll wanted of to

that front that sort in anything backs and just, nice on in can on that, specific? heard talk bit have in Can down what’s of side volumes this – ASP guys there. a at side a little there also we you been So you’re time kind going NeoGenomics Was seeing when is you they there space. forward? any was unit on in the sequentially, anything, we can Thanks kind look clinical if second about continued of just the you other like going may look you companies obviously or what there terms dynamics the one And benefited be we’ve you in or talk a of more pick about testing ASPs how guys. about and that should that on of nature, maybe year-over-year. to of up quarter, the market Are of seeing anything terms obviously from that, weakness think

Lynn Tetrault

the Thanks, a then and on build first part ASP. going of Brian. question ask comment to David the I’m on to comment

David Sholehvar

not Thanks Great. the, so as All that Yes, right. we come Thanks expected has had Lynn. no the back, doubt mean, following for question. COVID. volume I there’s

for is there, more think to as to service but what we it’s our the that really the is continue improve NGS levels So, that panel. as around move we hangover operational And of probably internal. I see there, really well comprehensive I most work think on there and some offering that to impacting volume the

believe So business that and our hangover not mostly volume is we’re control trying improve a we our to from parts decline but discounting that in of on. COVID, the actively

Lynn Tetrault

Bill? David. Thanks,

Bill Bonello

the for Thanks question, Yes. Brian.

are team we’re that overall benefits in improvements really strategic has seeing our AUP and We’re absolutely taken we with what efforts from on pricing. side in pleased the getting terms reimbursement of the our

we the that forward we that we do through. should think to we As some increase to price at of takes the a from modest continue beginning while have look benefit effect into July, put flow

quarter-to-quarter And is AUP level. bit little from in relatively we confident sustainable feel around but going this a that to always is a bounce general, so

Operator

Our Nowak Craig-Hallum. next from question from comes Alex

Alex Nowak

NeoGenomics. now in and One’s Chris, making, the two indications. a monitoring. got until welcome expand hoping at touch recurrence on here adjuvant bit market decision tests making these with Hi RaDaR. I regarding the got you tests, other’s there’s out recurrence decision then we both maybe the adjuvant resubmission why Can different MolDX could two on was to

approach when So going after you’re what RaDaR is a the anticipated for informed with MolDX tumor I guess temperature? label,

Lynn Tetrault

Thanks, to questions. Alex. take Vishal I’ll ask those

Vishal Sikri

thanks Alex. Yes,

based MolDX. out were led whole resubmission So And with with for obviously our And some some discussions which around the information find to sequencing with the of able data, ongoing MolDX next this. them, met and have for months, asked criteria additional our we them we’ll our, through that’s had for they that to quite discussions the what resubmission were we we couple and exome on to provide. off the confident in approval the colorectal,

believe market, we at positioned other and not well cancer feel are through perspective, the as of, those indications colorectal, at technology monitoring and of shine, in recurrence, we on, so RaDaR from the looking both, cancer, go at well. on a looking breast terms for, that especially will that as we cancer assays lung the like looking In the a just but types, value neoadjuvant other clinical we’re in which

Alex Nowak

you. Thank Excellent.

Operator

hear Piper David Sandler. from Westenberg now from We

David Westenberg

Hi. the actually here, the Thanks expected and team, congrats of whole taking I’m a softball Is to questions and hires terms kind real, for and in All that Chris Lynn the here. all you I of just the there have seats good ask but feel am like need make? curious a and, a and of right. team in real still have customer you service have thought a any made that’s, really solid that, the management comfortable do, layers you that do that at always place stable, it team we’re the to yet you. that to orientation be. Thank with Neo kind steady we’ve looking you you below

Lynn Tetrault

David. Thanks,

the said I in think prepared remarks would have added talent team. as I that to we So say, the significant I firstly,

the team of we are said, we company for now, the team in and the to senior the needs obviously the going really Monday I and forward. have motivated he Chris and That joining determine filled team. and business, committed so those to needs Smith have think, get And and get as learn a on roles know what are

of on team. on team to as executive I the want to we met do and time him all has leaders the we mentioned, that, give appreciates but space them the have and So he great

really we as strength bench over of the continued add the additions. well about In feel of leaders have below, some number good I past to And months. terms great those

think on the put in, always Chris I imprint strengthen as and we strengthen. where in business can capabilities as that will would continue I can want own to he any organization. expect with comes company, to to the his look certain we

think I confidence take can we you are that stable. So

going really group a to that continue leaders have and we’ll levels at forward. all of We strengthen committed

Operator

Puneet next from Securities. questions Our Souda SVB

Puneet Souda

guys, the question. Yes. Hi for thanks taking

bit versus it strong for So we pharma, on that and just a before. then was just sort NGS. have softer one the On on seen pharma of briefly backlog me,

was provide dynamics the the contribution. in the uptake what us you So if part business? of also talk you. you in Maybe that could as in could sort of talked ASP the wondering bit NGS that happening you a contribution elaborate was prior NGS what’s on well. that to quarter share And there and shift of have the about quarter, just about part NGS Thank us in

Lynn Tetrault

the then ask Vishal Dave. to and I’ll comment part Okay. on first

Vishal Sikri

Okay.

So on the great continues pharma we there. it grow, to backlog, see positive and for which is growth us,

do the and seeing a at are We some we’ve it a and detail now, of something we we’re addressing getting. it, that lot And the that addressing on believe of makeup has lot revenue trials right in softness looking the conversion, clinical we’re that’s to with it. this sample from different been

So that’s something where we see from bookings to revenue conversion. That’s that Dave? we’re addressing.

Lynn Tetrault

Dave?

David Sholehvar

Yes.

more a continue we to in have we for value I that comprehensive the mean, panel. NGS, So see

at with and validate NGS panel a few current broader QX on our the our the evaluated we a I’ll start and ASP depending state, for are call, Since solutions perspective, the market. mix is those future on favorable launch. as seeing to actually our that. of And some are NGS identified perspective, our rate AUP not So from have continue favorability. and we mix seeing your we acronym, driving as And ASP, But of an actually there. offering some growth AUP of part is

Puneet Souda

Thanks, Got it. guys.

Operator

Dan have from Brennan Cowen. now We

Dan Brennan

Thanks. Great.

to follow-up the wanted I multi-part, on NGS. So

you just high-single about sense clinical could So historically growth. talked you’ve businesses a it digit core give type as a your of us

the still like seeing high-single impact digit last on to And second begun maybe more base since beginning is NGS this where talk Molecular, impact on wondering about appropriate? you’ve you are Just the then your and just that I’m business, biggest wondering quarter, the basis. half of IHC, kind FISH, revenue maybe right, kind why as low-single and outlook of Thanks. you’re degree maybe of to Bill, would a now like that digits Is math, high-single fair like on as decline implying if it digits I’m that much QX, doing down occur? Flow, looks

Lynn Tetrault

Dan. first of part comment on the Thanks, question. Dave have Okay. I’ll the

David Sholehvar

Yes.

the where it modalities. well below of when business But we think at them talked in volume where back the is for lab, we for rates historically. things is mean, operational are when decline we’ve that is sure. in those we that the think we I modalities, majority And for a the just that main have lab modalities, I’ll NGS But our there to the we think look general I take that is core I – so core don’t there like think comment are specific the that about we NGS. the an growth and get part don’t of We So before, the market mean, to offering we which the we on do that. keep operations as as challenges back two

Lynn Tetrault

Thanks, Bill? Dave.

Bill Bonello

Dan. Thanks, Yes.

I sort think the that the that QX basis. expectation specifics, is through QX our of would offline our necessarily don’t – sequentially that, QX relative on down walk now We on could be a call think did year. of down I the we on say basis, it’s QX year-over-year because to can is be a quarter strongest but sequential

Operator

Andrew Our Cooper next Raymond question is James. from

Andrew Cooper

like comment you the said, you’d well. I exiting would high and think the not XXXX. And sounds for question thinking about Chris welcome, thanks the level it improve Bill, one, know breakeven case. just historically that’s financials little and on a quarter-over-quarter, the a bit, commented prior EBITDA about about don’t EBITDA necessarily Maybe as XQ, Hey, thinking I now

on moving program. guess, be the to rate pathway of that XXXX I the XX-month and table through the still there, profitability parts the walk thinking how is just whether should about improving we through some So exit Catalyst kind maybe Project of

Lynn Tetrault

ask Thanks, Andrew. to I’ll Bill comment.

Bill Bonello

Sure.

decline do So me function pressure revenue, see standpoint. through be simply we on the wouldn’t a QX. That’s of that to – atypical or see profitability sequential start flow it then the typical let with in a if

So call, the continue, on as more We normal do I of expect of that’s initiatives calendarization. drive we said these just improvement as into hold. kind of move do on and take a to QX some catalyst

make the we have that in that we improvement think accelerating of take at going been new investments places a exiting terms and But is to coming we think look he’s to about what obviously, XXXX. to or have working a the growth. towards want Monday cost about on absolutely In and XXXX business the between profitability, need and CEO tradeoffs and

to this at And just don’t XXXX any to we think metrics. so I want point, commit

Andrew Cooper

Okay. Thanks.

Operator

Mark from Massaro hearing We’re from BTIG.

Mark Massaro

can a a for And this side the on in welcome questions. DNA, the Maybe you’ve bit on side. the couple selection to therapy more the the labs is other about what be of terms larger competitive panels. thinking about terms looking to Thanks on – in to guess, you guys. past, you’re MRD I more perhaps RNA I side. little broader precision know Chris, in NeoGenomics. space essentially of the oncology in expand expanding Hey, with actually on talked

finally, broader tissue ask then product? you to can based year? And test InVisionFirst-Lung then So later seen a we also liquid. on I have want to uptake expect be the launched this And in any

Lynn Tetrault

first I’ll Thanks, comment. let Dave Okay. Mark.

David Sholehvar

Yes.

we panel, call, as have validating at I So the a of are broader we recognize candidates QX mentioned the do mean, for evaluated, now. the and right we we need couple actually

year a the offering. of by timing, say we to want I end but are that know candidates don’t the as more next validating or year for early competitive a actively I So

Lynn Tetrault

IVFL?

David Sholehvar

Yes.

right on activity as modest And part So the small gearing is IVFL of are up numbers. IVFL, with now RaDaR we actually seeing well. growth

So both be that in running we’re will them or lab both the of running of in. them same

IVFL as operationally. modest also up growth, we gearing but are showing So for is well, RaDaR

Mark Massaro

Okay. Thank you.

Operator

from question next of Bank is America. Our Derik de Bruin

Derik de Bruin

my Chris welcome and morning. Thank well. you taking for question as good Hi,

the of you’re year? in follow-up, in your XQ back and so then are half if if pharma services does growth to just that guidance Just the clarify, yet to I to your the imply – extent. still services I stable to growing see expecting being clinical ASPs mean, mean, does imply – not

services the Dan pharma question, half? be expecting back down you I back are going to in mean, Brennan’s to So

Lynn Tetrault

I’ll Derik. to Bill ask Thanks, respond.

Bill Bonello

Yes.

services of couple to think guardrails. issued be second down year. lines tried And revenue quarter things a some for where year. to the haven’t first going we So specifics any in I we the to quarter individual get crystal guidance was clear our And at the in this again that we’ll don’t pharma down business into saw of point, was the of as be. you it we’re provide official of the discussing of kind want I you

time a be in yet the doesn’t mean try accelerate that actions but achieving and to to it That’s are taking growth, to that those the necessarily effective of third outcomes determined. We be at quarters we’ll year. fourth of number impact and

shy the we We’re confident any want long-term, short-term over but to guidance. really giving that can grow from we away

Derik de Bruin

you. Thank

Operator

Tejas Savant We now have from Morgan Stanley.

Yuko Oku

Hello, this Tejas. you is on Thank Yuko for questions. for taking our

accelerated view, First, commit here take company to newer on to company the needs is to mandate slower an Or focuses portfolio NGS to needs more that is overtime. pivot near-term NGS with the the Lynn, approach based the conservative to on pivot with Chris that commit modalities. to profitability your conversations is the view –

Lynn Tetrault

Thanks for the question.

First Chris hasn’t of yet. all, started

up I time the his to I the make it So we perspective and sure business. ample to say, would him into business, want with of on get own come learn give as that to deliver product and continue areas we continue the be invest time. those offering in value be are over now, competitive to right to very in that marketplace, an going will NGS committed that

the for he into Chris stay more So as business. from tuned gets

Yuko Oku

preclinical a of industry follow earlier more cases delayed to the understood. stage a number reporting with some business, to as project quickly. as more now are then seeing decision that up, Okay, efforts And pipeline commit the enter secure also to some your that Are convert well? reducing and project that you underway of peers

Lynn Tetrault

Vishal let me let Yes, that. on comment

Vishal Sikri

of seeing Yes, of getting particular, because oncology of I COVID delays the definitely in stage we things. enrollment side project the mean, still space the are later terms out of in for in

to to these we early know and from samples stage and However, are get revenue. conversion get that that opportunities do trials going there the

is in but accelerating space. focus become So where that also continuing starting our to actually, that’s

Yuko Oku

you. Thank

Operator

We now Sachs. from have Delahunt David Goldman

David Delahunt

think to looking hear any again. should color versus Great guys. starting of clinical Hey we forward you how do to how On Monday, about anticipate give biopharma? you working is RaDaR, on him with additional can the mix and Chris volume

Lynn Tetrault

Thanks, comment. David. to ask Vishal I’ll

Vishal Sikri

the plenary on ASCO the pharma in at positive. So we’re that and say on provide recognizing We have there, works that data where the starting was guidance value volume cancers think extremely and there, seen to numbers RaDaR and with the technology across interest we ovation really that. can was from in ASCO, it will would going types have the I the cancer not multiple exact across I wise, but multiple exact site, say shown pharma that it’s session, is the particular. been

our to is So, quarters, of announce next over and couple get goal some of signed these deals those. the

side, I’ll the David. pass On clinical to

David Sholehvar

Yes.

thanks, So Vishal.

already I result and within to MolDX, geared manager, launch this the the positive On hopefully pending have it feedback resubmission the with assuming that reps we’re the look fourth we’re clinical already. the We’ve positive sales we’ve year into the up we a training we’ll quarter from gearing previously. a market, for and completed MolDX, medicine side, planned up, the precision for had mean, we

actually doubling the training. down, refreshing we’re and Now,

to we’re ready the is when So, go MolDX approved.

David Delahunt

guys. Great. Thanks

Operator

next Needham. questioner Mike is Matson, Our

Mike Matson

into that, fact to well service on that mostly thanks lab, but you’ve you’re morning, gone to about lab, that in declines been one, margin Is factored new it for much my as how through and the transition one the how that issues? that factor much Good in questions. and done, that’s you’ve challenges like those the sounds did seen? old Yes. the the want ask new transition you’ve new into of has taking gross now you built it’s this, like has the in that lead improvement a fully the this this that as I sounds some had should – from level

Lynn Tetrault

Bill Thanks Mike. that have address to want to I question.

Bill Bonello

Yes.

that it operations don’t that service see our on improvement wasn’t levels gross into So the margin the in duplicative future. and a the our that. But impacted quantifying redundant of our Certainly be operations meaningful will to factors Mike, should costs think gross impact way of of not one really an contributors. that, one had or were that margin it sort allow the I probably us

Mike Matson

Okay. Got it. Thanks.

Operator

Our from Stephens, Mason Carrico next is Inc. questioner

Mason Carrico

to for guys, you Hi biopharma seeing most RaDaR backlog? demand Maybe how of just RaDaR, terms that you average going from any timelines the the to compare of Can for provide for? your revenue currently pharma timelines type thanks projects on projects of in these one And backlog the in guys demand quick taking what on maybe for here. do you’re have one additional question. services projects color

David Sholehvar

Yes.

pharma, at with which initially seeing now to interest RaDaR revenue stage particular in conversion goal the obviously But then more our RaDaR, what later the early to ASCO. we’re happening the with also trials. And look should faster. is get out with state So this with site, as data that’s on at

interest seeing also more that. We’re in

trials future and X the initial be stage that Phase in then X, the So early trials. revenue on placed will focus be on the the recognition, stage more would later faster trial, Phase

Mason Carrico

guys. it. Got Thanks

Operator

no thoughts. to our floor There back to would are like questions Lynn, final further direct currently time, this in host queue. At the the I for

Lynn Tetrault

Thank you.

X,XXX end I oncology and you we your NeoGenomics the the company. dedication NeoGenomics in around morning. like world-class world building for team, our this diagnostics to to As call, recognize joining want the behalf thank members information of for On us I’d time a team to over commitment their and

or our are considering you. that of company. those investment for in you listening your and support investors you are For interest we Thank an in NeoGenomics, thank

Operator

does conclude conference and ladies call. Thank gentlemen, today’s this you,

wonderful this your lines for And You may disconnect time. phone day. participation. have at a your Thank you

NeoGenomics (NEO) 9 Aug 222022 Q2 Earnings call transcript