Earnings call transcript Q2 2023

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Operator

Welcome to the NeoGenomics Second Quarter 2023 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Please note this call is being recorded, and an audio replay will be available on the company’s website. Kendra Sweeney, Vice President of Investor Relations, you may begin your conference.

Kendra Sweeney

Thank you, Jenny. welcome NeoGenomics and results quarter everyone call. morning to second the financial Good to are the Executive me discuss With today results Jeff Chief Officer; Sherman, Chris Financial Officer. and Chief Smith,

for the is webcast. team of of being Diagnostics; President Harris, simultaneously and Stone, Clinical Warren Vishal Operations. President members Additional of Advanced are available Enterprise Sikri, Q&A, management President Services; Melody of including This call

presentation at that tab will has posted a be We Investors website referring to on slide our ir.neogenomics.com. to the been

Slide on Starting X.

best During and forward-looking future and strategies this for and results. currently statements regarding performance, that such and our factors we caution that on will known products, call, make and to assumptions financial effects our as financial our us related opportunities, events our anticipated differ our suggestions, operating materially. outlook, based operational could judgment that or and results for on reflect We our outlooks actual you such statements

suggested XX-Q Fort our statements. actual during important Please call risks original made any revise cause only forward-looking forward-looking statements statements. this undertake factors the call, by date may to as refer or of differ and the identify or to that we and and to update recent the speak our other XX-K results of with we and SEC The obligation X-K in no of these most from the contained those materially filed to the

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

the now Executive call Chief Smith, of turn Chris I’ll NeoGenomics. over to Officer

Chris Smith

and begin it’s Thanks, this our to company or teammates we us everyone. morning do, every like second-quarter what Thanks mission to our through it’s daily basis. presentation results. investors, our financial joining teammates, our our We motivates and whether Kendra, statement go our to with vision and on a customers, because welcome, for

mission patients that care. our to Our I to every we on want And all is dive day. they patient thank make single impact improving the for stabilize in, by before teammates

and the had Now to second from let’s X as move Slide quarter financial momentum get we quarter strong QX. continued We into into QX the another highlights.

over revenue Second volumes was in the modalities ninth by was increase consecutive per our quarter quarterly prior XX%, year. $XXX Notably, XX% second across revenue the increased strong revenue versus test. year revenue per driven in test. million, the service prior increase an and the Clinical an increase quarter

addition, target. revenue our we significant growth above had well internal XX% In NGS stated

a the ramp-up by and prior $X the and Adjusted which informatics, of adjusted million, core profit revenue, over XX% from informatics, million, strength and increase business, Diagnostics pharma year, driven negative gross Advanced XX% a in a $XX includes improved our increased to margin the services year. was pharma prior EBITDA and XX% representing RaDaR. XX%

Turning to Slide X.

strong to numbers the of Our for second-quarter financial XXXX. first half results contributed

$X over $XXX profit or million, $XX of XXXX. year up EBITDA adjusted increase the XX% was of improvement $XXX prior revenue. Adjusted was the gross an margin million, and an XX%. to driven half a gross versus revenue was half, by both XX% of million an representing advanced diagnostics the Adjusted clinical For in first million, negative

the individual company our mission XXX,XXX During capacity of we testament to and operational served labs. leading year, a patients, is within the of first half over our well of the a the indicator which improved

back Slide next X. the QX to on Going

improvement in delivered margin, sustained and adjusted quarter second revenue, The EBITDA. gross performance

our We demand the well our existing are and proud by of of new the teammates this as year-over-year accelerated our Neo for growth direct products a from because growing clients execution strong it’s as customers. result

Our and initiatives to the to half in have implemented the to XXXX beyond. continue half operating second business cycle and improvement enable of we the second and we ability in the of accelerated growth, throughout revenue continue XXXX believe drive

priorities diagnostics, remind probably you drive As year, laid we of to business, and Slide the enhance accelerate the creation, and culture. X, move advanced value strategic at people out we of me the let the grow beginning core

it’s As we these the to execution, team deliver continues our at and transforming against and initiatives. strategic business, look about collaboration, focus, results

team great this critical and team a strong is mission-driven and long-term enhance success. to our NeoGenomics, at have We our to continuing culture

While much won’t we outside else for everything of do the is this foundational this of be visible organization, work operationally.

morning, our I’m focus This priorities. to going other on X

a priorities on quarter. these highlights the X, strategic few Slide to Turning from for me touch let

strong modalities. in see volumes across to continue growth all We clinical

product revenue growth significant test. Our well and force optimization in per growth as our continue offering deliver as revenue to sales NGS

core to our number growth. in processes of lab record our We the test to continue business operations. refine the in we the laboratory quarter, and teammates for Additionally, internal set support who thanks an this

grow we faster these continue volume. trends, with revenue than Even strong volume to

more growth decision of second improvement breast the quarters in cancer. we saw for Following In of and Medicare with aligned volume. coverage in received a in we time, quarter, July, improvement X% the our our normal first radar last significant turnaround THREE significant

certain believe in this decision is breast a cancer. are patient supporting our would Following sensitivity major milestone program’s effective care HERX-negative We MolDX This and following and we outcomes, with covered U.S. the patients of XX, as and met for RaDaR’s acquisition us of improve HR-positive evidence and clinical which is specificity XXXX, assay high for RaDaR retroactively that approval, the enhance coverage. superior standard the for now March always Innovata. is Medicare thrilled

are progress our indications additional MolDX submitting of RaDaR coverage by as received two commercial a This for the breast Shield Blue assay is decision well pan-cancer plan its first June, on as year-end. remain indication of good California. to In industry in expanded as the we Additionally, indicator the across which by beginning acknowledge MRD commercial economic our is types, payers clinical and making and of breadth various the highlights cancer the coverage are believe of we we pan-cancer a setting. data RaDaR The utility differentiator. to key

opportunities Looking rest we of the to forward indications. the are think there year, with expand additional coverage to

abstract settings. types June highlighted of use its breast current ASCO care compelling published These with long standards RaDaRs’ presentations one sensitivity on in head We and and over and oral neck at and posters cancers. poster and five accuracy and across tumor data

in indications we where payer pursue additional coverage. complete data or progress can have in We

QX We focused and have further revenue that we from are creation have driving on have bottom value a operating even expansion perspective from delivered margin leverage as favorability significant generated through and line. fell to financial pleased the

their excellent of against and confident Neo Directors. we enhance planning. insights our that and backgrounds, skills that directors varied month, accomplishments to three added professional our provide strategic will priorities execution will I’m long-range our Board Last experience, with additional and

financial Now me Jeff? let turn Jeff in our to over to results the detail. more call review

Jeff Sherman

a everyone. the quarter. on and Thanks, for operating I’ll begin good detail morning, with results little more Chris, our

over accelerated we As Advanced year double-digit clinical prior Chris with year. both experiencing said, Diagnostics growth revenue continued the and in

generated a increase to QX growth was of in complexity was shift volume, driven in $XXX year ‘XX. Second bottom improvement from year. tests, prior per from XX% by the EBITDA We $XX.X the year increase increased test. million, negative quarter Revenue as million favorability marks test prior clinical adjusted continuing and and to improved million. that revenue line. Adjusted an from third X.X% the leverage growth revenue fell higher over a revenue EBITDA significant to quarter prior QX $X through consecutive operating

well client as $XXX an force growth our oncologists and of driven Slide within demonstrates us sales an by an and year-over-year, to strategies driven increase continue at new in revenue test. that existing XX% Looking X% Higher show million optimization is Clinical sales X% revenue progress. XX. Services volume our reach in and increase volume increase per by was of to as enabling pathologists base

the by $XXX, XXX on cycle over an initiatives. revenue Slide by and million to driven and increased for to price Turning in as growth gross tests as revenue revenue. higher $XX well prior to second year. ninth or prior our as the revenue clinical X% of Pharma quarter at XX, the higher-value margin quarter test improvement improvement management increased the consecutive representing both more to of informatics year On basis Adjusted we XX% XXXX, maintain representing consecutive legacy Diagnostics points, NGS per compared XX. basis Advanced points quarter XXX volume focus radar in versus improved and Slide by Average fourth

profitability to our our At with in our in business. we relating Investor shared advanced strategy Day and growth diagnostics April, you

walking contracts, also deliver smaller accelerate profitable to testing plan the of away from rationalization of our some our didn’t and revenue. was ways meant global that sites contracts of One we growth through which meaningful unprofitable

As XXXX. strategy, pullback projects we of begin towards year and the execute take a especially pharma on on what the latter temporary into half this on, in the we half see to we revenue first new of

confident long company. this growth to sustainable don’t will short We profitable this the term. and term, that are guide We overall importantly, growth us projections will most the material believe to the be and midterm, in the for

of second the XXXX. Adjusted Looking over the the at an quarter EBITDA negative by were on operating These both XX.X%, year. highlight over gross $X improvement and points in significant leverage was of of improvement was XX. driven the gross X% or million Adjusted margin million statement $XX.X Slide basis the and income quarter profit XXX higher second or improvements revenue business. last

marketing $XX.X expense was invest expansion million. in Regarding and as was $X.X R&D expense force. we continue operating million sales was $XX.X G&A and sales, of expenses, the our million, to

the leverage. quarter in footprint restructuring was to capture which there addition, is previously million value part program costs restructuring to gain organizational and our In of operating announced $X.X the optimization, in related

on We marketable of quarter to sheet million. with cash second Slide balance Turning securities ended and the $XXX the XX.

of managing basis, from XX% to improved year-to-date flow from by on Cash or continue oversight in We of XX%. cash accountability $XX diligently focused On good a burn and or and improved $XX disciplined flow make cash operations expenses. ‘XX. QX our million progress operations from operating million are

us Our continue objectives. position provides strong the our strategic and financial achieve financial and the business flexibility to invest to financial in

for revising QX adjusted the guidance financial and on continued progress strategic are our year. and our priorities, EBITDA Given revenue executing we our performance

Turning X% We at previously to representing revenues XXXX. had to $XXX to $XXX in million XX% Slide growth XX. million,

year, Advanced upward expect $XXX XXXX profitable more for between revenue slower are the revenue and total the contracts. to XX% the million for performance in and second half the of quarter revenue growth $XXX growth. revising in We fourth million range the that expectation now the Diagnostics representing includes XX% to and the XXXX business strong of very in of of due repositioning This

to negative representing improvement. now negative million $XX negative a to to negative XX% million $XX million $XX was million, and EBITDA Adjusted is $XX XX%

We opportunities continue and encouraged line. which to tests, see very the product and other the NGS are increase for RaDaR strong an and new revenue bottom accelerated in to provide leverage growth mix by

we but stated will goes foundation year teammates As the the as our difficult dedicated a we year-over-year at believe year, financial and have get strong of comparisons results. to the beginning more deliver on, we

continue to to business continue also driving focused future we be While on operational on the invest will we to growth our opportunities. capitalize in efficiencies,

remains strategic sustainable focus to growth. deliver Our long-term

turn I’ll Chris. back that, With to it over

Chris Smith

Jeff. Thanks,

with and approval pan-cancer improvement EBITDA. and have expanded commercial the including our meaningful progress strong cancer, Medicare the raising additional are XX% our guidance generating priorities, year-over-year now in our in revenue We and full-year progress, significant radar results. coverage, very are We we first We of saw payer, and and growth first pleased HR-positive our future. adjusted in our for support breast strategic execution that in of HERX-negative the we’re therefore, data coverage will

our decision are We the on information well testing way leading cancer support company. becoming to and

several the will long-term build foundation our our to deliver sustainable for serve excited on most all, of a growth. for daily past customers We we the I’m basis. patients over continue that laid and, have teammates to and the on quarters we

turn it back to for for I’ll Q&A. operator your and time, the now over Thanks

Operator

Thank Thank [Operator Instructions] Chris. you, you.

of line Brennan is Dan first Dan, live. Cowen. is question Your from your TD coming

Chris Smith

Hey, Dan.

Dan Brennan

like looking for How you had and clinical unpack full-year about the Chris. at in could called the raise. questions. have, back which on Congrats baking comps, just bit the got you obviously doing? nice think Maybe Hey, in excited Thanks success Maybe do of the a it half maybe of you here a year? You in cushion people we diagnostics but quarter. the kind tough how back you guidance, and feels out still you’re are advanced guys the of of year. the just half the some

you help can of us think your guidance? Just through kind of half the back

Chris Smith

cushion. I’ve raise just we But to mean, RaDaR as it we in big you of to QX here. early and I is, outstanding all, think think it, to I year in about a a last way unpack that Warren a me in got had we the Shaw your first lot and Look got pharma pharma. calling of the know,

a got comp pharma. big we’ve So in

bookings places In it, not like a are And seeing projects. prior and we Vishal was weren’t took and small, and think, in and this over about calls had on Singapore addition, business, that focus big opened a talked and we there unprofitable, booking into – when revenue, we pull-through. China up I labs in just that the there I was think dug we

that meant unprofitable projects. cut strategy think we read the to loose that to those of had I kind So of which smaller transform some business, was

and and and really field focusing have the done the And so pharma. think on job rebuilding I organization kind team them top a Michel fantastic that Dennis XX of of

I is, get still So QX slow bit, going we we’ll recovery comparable a what then we go nice into you’ll transformation see this a of half and through, as I the year. nice but you’ll between see little next it they’re in will of growth, think mean, second think and kind the

in If performance look, than is difference things the and the a business, a had and off is really clinical at I ‘XX. much in business growing say coming you of faster that low very at beginning the ‘XX would happening there I are rate originally the of we faster think projected, look side

a And growth. know don’t kind on – field that continued the you I conversion of focus NGS our but... just you think optimization, and guys so But I driving the do the threw NGS expansion we think I and to – us growth, want of force, I good lot, gives

Warren Stone

second the first how very a probably that half trajectory year. already kind year Chris. half summarized it you the the what of perspective the say of from the clinical to I’d in similar looks seeing in we’re if of It’s get

Vishal Sikri

was lot after. accounts high-margin strong we’ve as had, that of the refocus QX And we’ve been our revenue ‘XX with I more think a going we’ve for strategic think I very to us. quarter that a been

Dan Brennan

the surveillance. Great. Congrats It the post Maybe probably RaDaR. on kind X-year like based looks coverage. study that on just one of was on MolDX TRIP given the

you. that Just think either about could help indications can talked you looks have I And know kind kind submitting. you you’ve opportunity data or secondarily, perspective? then breast you. other of that speak a then have us other you just you can wondering in bit shed from what a on year through that you like for breast wondering, filed Thank forthcoming any for And indications. little some insight you’re what’s I’m of the this two you to if later

Chris Smith

kind that to Yes. timelines? Look, on highlight getting approval. want what’s do we’re obviously, excited going your in you about Vishal, of But

Vishal Sikri

Yes.

plan future. more perspective, breast breast the coverage. MolDx did on to it to cancer, two yet, we’re that broken through is and coverage haven’t And yet it now shows beyond want get additional cancer understand listed risk by expand So we that the applying breast but data that we the the near with initial TERP We will out but study go what that use that our other the to our the from then to we takes go in quarter to on coverage haven’t for we we in expand applications really through. really down our come

Warren Stone

add would Yes. I would I that. to say

to reformatted I plan is our we I coverage are previous learned MolDx to to expected our we we track for breast. we think MolDx be on takeaway where as Quebec with from and think the submissions,

Dan Brennan

guys. very Great, you Thank much.

Chris Smith

you. Thank

Operator

Thank you.

question from is Your Andrew Andrew, Blair. next line Brackmann coming from your is live.

Chris Smith

Andrew. Hi,

Unidentified Analyst

is for guys. Andrew. questions. Dustin for actually, Hi, on Thanks Thais our taking

the on start segment. to Just Diagnostics Advanced

the costs? those the Just clinical to stands how fee-for-service reduce does And wondering ability then trial does pipeline stack in versus business today? competition? where RaDaR that the radar how up secondarily, have much And the

Chris Smith

Yes.

of a So couple things.

pharma do of what not the break we out is revenue So percent RaDaR. on pharma individually the

moving probably before getting there think know coverage. a clinical year really you started we I

that So last say that really thing think just that’s to I’d about process started year. we is one

any that out changed clinical that in obviously, have But I has On side, clear don’t that though coverage. the think our is view selling we even it we’ve we’re building material our and the we’ve gotten been not pretty long-term. mean, plan, and coverage. there’s revenue I for we’re

of built was clinical we have brick-by-brick, strategy a of And and so is kind raise the going our on, but say into still would we program I not that. think any evaluation

don’t helping want far you it I and offset, Vishal, to As the trials clinical if know, to... as

Vishal Sikri

Yes. we MRD different FDA are a obviously looked their there’s of companies is into and discussions a and to still, at, going how ongoing. but lot clinical clinical trials, even it’s of with lot in I early pharma discussions that an from mean, biomarker be surrogate a the relatively building perspective, from perspective,

process. say on So at would I we’re still early with time, that this

Unidentified Analyst

Understood.

next is question on Our neo-comprehensive.

general a the there. Just has how community feedback been uptake update you. on panel the the that and from Thank on

Chris Smith

Yes.

I fantastic as felt I we’ve tumors. like in probably were continue know, heme. And think do leader I solid think heme. on the behind you So we mean, We market on we to been

will brought our I already product say come next-generation would out. we’re that out. So tumor, that we developing which solid

growing is above at whole really what or that portfolio. in the on XX% and clinical thinking we And is grow that. we’re that target pharma. portfolio want we focused Our a that it of next tumor of competitive that is I above year in side to now that NGS QX, of think market QX probably really in a we’re business that the way is offering because have that And earlier the the about above solid or

a out business in we prepared growing script have or customers new the in look, where in that new in out where of had that, we’re had getting we didn’t it’s hadn’t than heme stated think lost individually solid or we it’s really tumor years like competitive remarks as So lot offering. I a we And comprehensive, significantly our or but times, much the a much how product don’t in front prior because possibly it how in I faster we’re of customers. break just think we

Warren Stone

are we elements, to And maybe access terms sort of just sorts proving in which which also of near the building tools, was the oncologists, existing new new positive digital which of which addition aspect, tech the customers really near product, amongst both on is and SEQ, the in enabling which the that the some acquiring strategy etcetera, be to was of physical obviously of customers portfolio. the portfolio very for this of customers, launched are part

Unidentified Analyst

Appreciate you. there. it. the Got response Thank

Chris Smith

Thanks.

Operator

very Thank you much.

is Nowak from open. Your coming line next of Craig-Hallum question Alex, Group. Alex is Capital your

Alex Nowak

the Good a breast just could occurs? get With years patients Great. through regards can sample Medicare, many call how tumor of by the to of time logistics Just access morning, tissue indication and the patients walk longer you actually RaDaR diagnosis? X it, everyone. recurring that you diagnosis to in still kind after samples after

Chris Smith

Vishal, do to that? take you want

Vishal Sikri

that perspective. going and And Alex, were things call can we’ve energies after I in our what we program that we a in out that. on since – now March, evaluation we we’ve been the clinical so Medicare from we a program. the take box evaluation know applications clinical there reimbursement focused Yes. of started one

tissue as tissue test RaDaR is evaluation us things these are the educating to here? program, the clinical surveillance. we in to type of I which for oncologists hasn’t our of the been of access getting one to challenge say we did how with to posted the point that this that access relationships the And is because a has as it have, hospitals hard been would in that and to getting we are the door this value at, biggest the that through at even look this samples of setting, more So actually, get the

Alex Nowak

regulatory in have And proposal to if great another to out then talk been development even hear. the talking even go or putting Excellent. many it to comes final. final. there’s But bit, more little us proposal, push about maybe that Neal us how the about out And plan as has. That’s today? a And LDTs see regulated which the just obviously pathway, FDA to sell would team’s will that lab go game if we’ll recently any it proposal some Okay. through rough ultimately how internally remind on preempt a

Chris Smith

Yes.

mean, So to ACLA lot back lot board. look, think there’s that I close us a the dialogue on forth. industry that, is and And think as of I you of probably a in I and pretty are going know,

an I that think is influence going that is definitely belief to this industry. in FDA our have the

we quality brought And about to a regulatory in as of think all leadership someone side ago, so when I FDA a that business kind experience. together we got run our of year team had the

internally And the so already with belief that things we’ve started that process are coming.

long to I have want think carved going been don’t university on because late to been think, ready a I around when going we’re think We to or that last around get I we’re of the stuff come something So it out? view time, – lot in does over NGS? a begin old for something our has to for X Is months really to this August our hospitals react. think have there out prepare I grandfathered, that be to look, speculations again, And occur, September. speculate been tests whether is waiting.

Alex Nowak

update. the Appreciate Thank Excellent. you. Alright.

Chris Smith

Thank Alex. Alright. you,

Operator

much. Thank very you

Delahunt from David, David is coming Goldman is from question next live. line Sachs. your Your

Chris Smith

Hi, David.

David Delahunt

Hi, on strong the guys. Congrats quarter.

point? like it at monitoring And therapy Are broader the to breast. pleased some see pursue the decision for help going coverage for look of what understand you you’re more this definition I could really later you us a like sounds to I’m purpose. coverage year. could if believe that to MolDx pursue curious going surveillance is coverage said So you first this positive response

Chris Smith

Yes.

development you a now, in in it pretty turn two lot is I like probably So products of right going only under competitive hit things. know, market. I’m not and, Vishal. a then people MRD, to places over lot Look, and have activity as this to there of obviously, or think, hit, a I’ll the NGS.

details, really we forward. of don’t disclose think thinking coverage about more about how so you going I And probably but can Vishal we’re the stuff give kind

Vishal Sikri

if a and into now things. really is one to that tool aspect these being coverage about is help mean, adjuvant what’s very about setting at it’s I of can lot if in X the are neoadjuvant a women to where look at we X obviously And years you And provide is utilized, of and another such post attention in close Yes. that as setting, are place nice that years. well. going area right? we’re Surveillant that effort. MRD looking do But where studies the So into working Surveillant women recur oncologists worried paying and you toward going is

which with settings you’ll that. publications very the see coming now at focus in out the being MRD same I setting. in neoadjuvant the So time, other years, post think adjuvant I But also, the but think is where used, our much is commercializing X and in is

David Delahunt

gross Thanks. and it’s to increased the automation margin. Florida? efforts updates Is give you us and any see the And in California Great. there profitability good about lab could

Chris Smith

is the automation. that would driving lab, we value capture. A you when on I longer-term about those process? we mean of I would formed around say mean, bigger, kind I on of Melody, the some I add are and of to lot around talked color. that we of call operating last was of can have in into what there’s say back this kind the call, within want update we kind that think I initiatives the were initially do where – summer lab. a But level Mel’s depending Yes. additional automation. efficiencies think Mel Catalyst rolled I

Melody Harris

Yes, sure. In product particular, newer we’re NGS. focusing lines on the around

call And in of of so opportunistic the I bit are would what process automation. a little adding we

liquid and those we’re So lines. adding handlers into things

just wider us effort off an coming in from and kicking that seeing the that are automation, you’ll will quarters. that’s something be We end-to-end explore

Chris Smith

Melody. Thanks,

David Delahunt

guys. Thanks, Great.

Operator

you. Thank

coming Sandler. from question line is Piper from David is next your open. Your Westenberg David,

Chris Smith

Hi, David.

Unidentified Analyst

I am for for taking on question. actually, David. the John Thanks

gaining utilization for was industry high you’re What’s got if the you sense your that So quarter. in the the sense across share?

Chris Smith

Yes. think I winning that are losing. I been quarter, – think talked we’re that’s I mean, than Look, about this more that believe an we we’ve think I important each indicator. And we we’ve

modalities, And other those think at growing if X% the digits. at were are per thing a you single X% pretty right our or to is to lot double of high modalities up they look I all close year.

growing Obviously, than we than we’re significantly So faster more NGS, grew market. the XX%.

So share. we bit our little belief comment is are moving to Warren, do want a more? you that

Warren Stone

back that’s growth driving highlights, of results. grew, are we And and the disciplined legacy think well those both of I think on the Chris the above as some sorts came far combination a our of as Cherito execution it was all market I then concerned. it remains strategy focus brought said, to it’s two really or NGS. And mobilities the from the – of as modalities and traditional

Unidentified Analyst

you. Great, Okay. thank

Chris Smith

Thank you.

Operator

Thank you so much.

coming Your is of open. Mark next question from BTIG. Massaro line Mark, is your

Chris Smith

Hi, Mark.

Mark Massaro

quarter. a on Hey, Chris, great congrats

just you us they them. in in of commentary might would QX? general think sense some QX? And can Neo And just factors product give into RaDaR those launched also an one about those myeloid disorders. clinic. might comprehensive gating give of benefited update would which X about I and So as the Neo course, launched tumor how you Can guys months what comprehensive have contributed But maybe lines be ago, a and to have of be, would you us of for you you reimbursement the solid

Chris Smith

you as of about to good but comprehensive, there more going to reimbursement was opposed the Warren take talk color? kind want we know I’m launch do some do that let this really because Yes, do to of give Neo I portfolio, but

Warren Stone

Yes.

part said latter touched So products earlier, things NGS we how really on it’s and perspective, reimbursement quarter ultimately, terms at very aggregation, around pleased has I internal the the I focused. that we launched of call actually a are products them that was we in at Chris on collectively within in ahead it it RaDaR working – if to one, of of point. we developing, think, all already. suite of Vishal of and And were one, again, in as and towards you only think of that we’re set performance look covered reimbursement expectations the particular launched we where And a that From they’re ourselves. quarter suite that that

from seen first of the products road – which have products led the sort we suite the for some do the enhancement perspective that that we part launched, in develop see addition, reimbursement these some was strategy place. down of around of we opportunity some actually In further us a to

Vishal Sikri

Yes. I relatively new ramping. mean, And they’re I would products, the add, so

So some impact, quarter. in but huge the a impact second not

the We’re quarters expecting as to more progress. see

Mark Massaro

the what’s think you Neo about some growth? for Okay. the to Great. do XXXX? your hasn’t imagine get how products questions generally – NGS sense then when have from for for kick been over starting don’t the see wanted that focus been question even occasionally, of just as driving probably you here. panels. I NGS to a I giving it’s maybe continuing But in But which sense just get And us understand volume investors know a grow. see a because I smaller I second bigger to a years. maybe I you the think we it panels

Vishal Sikri

a question. great Again,

as se, obviously, the So the where and smaller above a a how of if that, And space. still very more, as in a of per obviously, off would space. in we’re I but ones obviously Jeff look solid seeing on the is we ourselves growing The leader classify market earlier heme growth in in at The as I despite are, heme’s ramp. solid been the traditional And a the market are the growth have year. market we continue more, portfolios that attractive base. launch we minutes probably that percentage, products those And both exponentially tumor. we this terms portfolio and say, NGS in think define heme were suite few ago, those did it’s rates to tumor said the we

so new products, strong also test that very benefiting is have heme So we coming where access again growth in strong we we’re side supplemented Neos. above the by which some things, really the from conjunction, launched supported from those and on from by solutions solid near a NGS being of base, demand

Chris Smith

Yes, Mark, of a think things to think couple I about.

And highlighted, we behind, think NGS. there’s been I candidly, you think focus. think a were on I significant I

people. a really kind unique if especially think hired the of payer President that portfolio reimbursement you it’s the side, I think where a of about and Vice NGS, the on to solid time and expanding Vishal quarter, right President hired for two now, spending our And R&D. years I think we’re in relations come. Global of Vice We new

expectations internally high be new look, I we we need So behind. that to market bringing think, to because innovations are there’s,

I there’s was in would getting say solid of and So that a we’re going organization making where share. our we believe focus kind than sure the back to getting huge there more

the I this on patients that’s easy we around the touched with which and other that, it’s we’re but that the do and was really it I it service would that offering stuff can on think always about we’ve that I service a Warren experience. get run to business, was. result, thing how I services. is an make even talking them, there’s while I business test really all customer Neo, focused customer say everybody a think to experience it about and these wraparound don’t products do really mean, know today, under-talked And of about is and NGS that this

the So that I think would other that’s helping us. be thing

Mark Massaro

so Alright. Thanks much.

Chris Smith

Thank you.

Operator

you. Thank

Savant Your next live. question line Stanley. is is your Tejas from coming Tejas, Morgan from

Tejas Savant

one here. strong quarter on to for Hi, you, Vishal. as the ADX well. good in Feel free morning. and And on Chris, chime congrats Maybe

talked in heading do anything of back you see here backdrop pushback some light unfolding that in tougher on and that profitability the half tougher budget-conscious for customers? how you’re of headwinds? baking your half year-end in in macro from perhaps pursuit guide ‘XX. of is the You the about sort the in into And there those first But of more comps pricing

Chris Smith

know ever that it I feel know, pricing in years don’t we I business I a I’ve been wasn’t. mean, in Look, Yes. where time XX and think, have I challenge, healthcare, impacted I that. obviously, been a I like mean, I by don’t right? is not or believe think a

pricing increases, certain that we pretty we a perspective. cases open did price and that I from the were we been and about market believe of think do we’ve in out honest

that thing a love the I it So a it, customer. creates about conversation with

internally increase, may get a not those something on price we may we And set that, conversations. all have target have a we so get but why of we and

bit that kind know revenue the taken in that Vishal I going – don’t about I I macro. tough a Vishal pharma we the let here will all got business, international we you say on made of and pharma So that’s impact. that account when raised locations Tasman our feel little want impacted on we and has a of been But had and into in I growth. when decision. big like comment knew Do closing going the what’s to some guidance has more that these

Vishal Sikri

Yes.

I what me that have, one look mean, tell is the our of that just some the competitors which of we not this Let us, offering offering at way doing. I is broad we’re because are test,

offer, tests We we all balance we NGS. where say, IAC. IAC, about potentially let’s in focusing where CyTOFs past, having think It’s have where an on, So right? we general, heavily were see it’s multiple the I that in whether that

actually have margins Now that side NGS we more better the we’re things so of on accordingly. focusing can

really So balance. it’s this

can’t we come So, right because right, you really offering able testing competitors. lot clinical, cancer with in are all I manage broad to is think your a our which of you can accordingly. Neo have we the Which do needs, now, meet we that similar think and that and the strategy to a of that

Tejas Savant

grow hundreds, margins, exit line approaching is we of of done next that last think follow-up ‘XX. fair on XX%, a to is And I of I in why it. sort XXXX? the Got year? be terrific few can’t have here. mean Chris, basis, reason wouldn’t yardstick some range and full-year sort Obviously, in the Gross sort able – there a quarters trends you continue up low top certainly, there the on sort that the it but of had in you teens quick ‘XX several a you about have as any then like progress over to use mean

Chris Smith

be let to I about is a there and ability going think focus our not believe business. we am but Jeff opportunity I execution. this, see are of specifics. tests. And of It in talk it a significant to look, utilize also is my our about highlight but broad that remarks. And I was prepared that’s just really think if kind couple in we I had But this Yes. oncologists, our really pathologists through multiple commercial to of starting pull organization footprint focused what also on lab, able and you to this

us revenue. So, think I the on helping that’s

diligent efficiencies then If about gross more profit you that really operating of the it about think and OpEx. margin side, improving being is consistently the on

I of out than a of that revenue candidly control several think we were business. kind look, spending I the lot ago faster years was growing. hurt think and And

about a publicly. diligence So, as I of and far as to you want I have far But lot this talked is think we comment, know Jeff, go, this around execution. do how can you

Jeff Sherman

Yes.

think performance. the we pull-through going are the this and say, would we bottom on focused have strong seen strong are And on we what seen very revenue I are levers to operating line. growth, drive of that first year, I So, all, our very have

are being as the gross margin on to on another through the operating and is line is side drive automation on well. growth things some OpEx of really margin and certainly one, leverage that revenue adjusted top-line gross then So, and more getting Melody the working efficient her team

we would think business. into had not XXXX good So, to but yet, say going we get momentum I in I are the

are We top-line from our to growth. benefit to continue we are force, the there. going seeing that resources the clearly in to being revenue added We invest and continuing you think are see sales on

we really drive improved are that what again going levers those are it’s look as at to so XXXX, about performance. margin And

So, it’s we higher-margin to continuing tests, growth. on a management operating this improvements, leverage which cycle and then growth, see It’s year, line from management side. revenue cost benefited NGS revenue from top focusing getting have

will good team of to to we we XXXX, trajectory, QX continue the and exit think we I certainly more So, next have we into next a talk as capitalize we we that we improvement on expect continued go about go into opportunities that guidance and on feels a are good we for year. and to think as see year. give But as lot

Chris Smith

Yes.

unit, lot look, together X% things you You margins. at covers NGS, to we think old this look above look, remember are our stumps. growing, a I I kind when if that’s especially market higher from especially, of I creates in where it And of huge a in like pick number, a high driving water was, life think revenue market, X% have which opportunities, like

that’s driving is a think been I So, growth. on ours revenue big focus

Tejas Savant

color. the Appreciate guys. helpful Very

Chris Smith

Thank you. Take care.

Operator

Thank you much. very

is from Bank Bruin question next line your live. America. Derik, Your Derik De of coming of is

Chris Smith

Hey Derik.

Derik De Bruin

question. Hi. Good for Thanks my morning. taking

a the companies pricing on on of is with it? On competitive are a sort market. are terms of heme is in of are there of dynamic that some you up the obviously, introducing panels less? the asking. are on since lot things lot that on just doing or little mean peers, is Just of of What’s out that thing? there and pricing how or tumor following have that Tejas you sort I pricing in solid dynamic curious par bit was am a the price, I companies that there

Chris Smith

Warren, that? to do take want you

Warren Stone

I there going in think are a terms in share don’t gaining here. difference after significant market is of price how we

those We build in how are are meaning band. very when our in price be a build very different ballpark. as etcetera. a it that also various bill know, competition much on very to And obviously, or similar client it’s panels any depends we you we into look customers, It’s if the whether positioning people the third-party that can’t a from payers, competing I at compared with. and larger to to that is we way, narrow But in we say

Chris Smith

Yes.

I sales, getting it’s I so we about not we in what it being price strategic really years sure but but and us. of on industry, this surprised is impact, I are building huge for talking pricing. a the the how – that many I And the that’s they a that’s work cycle the with up we think our talk paid call we a organization revenue huge out that do. are say, am think people pull-through doing. only been say the paid look, to we are making And building Derik, getting commercial innovative initiatives, would helping there And And in we and peers, my just for lot that has not been for initiative and on would our go have that work reimbursement. management

As we get paid.

Derik De Bruin

Yes.

pushback out the next And on my what lot companies sort you, obviously, what just offset of and or that? But like when preempted Obviously, in right? do actually these value how one you the to go this is NGS there paid, dynamic. is you payers started And of on they a doing terms question don’t to the testing. the get is there, pay payer there from is You don’t pushback? in of

Chris Smith

is mean whole of I a there host issues.

a Sometimes it’s it’s there prior necessity, medical authorization, records. sometimes sometimes is medical

we may have even not sometimes a And so I – think and contract.

we host more the process. say information And start a are down would is automation, on I so all And for there using upfront even driving think testing we us. getting those I reasons of of kind of focusing before

And been area of last team is and really tests on just a it’s in market we still there, side, how the progress focus it’s It’s covered think well. back I half pricing. starting good to getting covered pricing about getting have of isn’t there go seen throughout then runway. year, of as lot managed we tests really this So, the a care and our year think

individual-specific some have us we XXX that is and thing contracts our And – only gain over contracts tests. of us competitors And is a one to have get different over added coverage have payers. expertise think so not bit of we we resources the contracts, for a little from help Yes. some I with lot but with

you contract a I contract. is a without that contracts. strategic we probably that’s GPO we And test versus when contracts think So, have I will And I think helping will it’s a well. decision as lot running that’s have you us are and been have a think a different

Derik De Bruin

you Thank very much. Great.

Chris Smith

Derik. Thanks

Operator

Thank you.

is your Mike, coming Your & from Company. next is from Mike Needham question live. line Matson

Chris Smith

Hey Mike.

Unidentified Analyst

Hey off with taken everyone. been few This the it’s up is S&M, Joseph on quarters. for starting Maybe Mike. last

think RaDaR. like, out I – could you But soft that, won’t selectively. I received reimbursement this, start for as as giving private indication you but more be decision You you to that launch guess, from is are kind the are we it a way ramp-up? expense ramping give out seeing the have free, or say is Medicare do more, more payer, of before idea breast another you and you then one start covered bit expanded of that had mentioned or you believe maybe in

Chris Smith

openly That’s adding about built expansion pretty of half more had I talked talked about, think into in second this our have we Look, resources we field plan the that year the the year. and guide.

So, what the we organization. has have guided in field expansion that on additional that you

about, into think call efficiently not as talked ‘XX, this I industry does a we or perspective that very operate from also we have I sales think there, what optimization. from go sales we look, force

lot resources tools efficient. and to field current a our so focus of more organization on make significantly And

a so activity. And that spending things doing that’s time aren’t really not ‘XX And revenue. driving

market go see we to to have that So, to we and a get you because can ‘XX the what expansion we get significantly efficient with more got won’t believe to want huge to. in get numbers we

Unidentified Analyst

wanted the have reason that. all in guys since on get on had XXXX? any Investor XXXX. to I success margins why detailed your guys And call But operating top today. helpful. given just maybe come comp by plus far there expectation That’s you thoughts Is to Okay. the Day, line then seen milestone the leverage that the at you to historical sooner, the the yes, and return Maybe couldn’t the so say,

Chris Smith

Yes.

ahead be a We lot and were room. of where to this going said we year, we for are we of clearly see

improve help said, team are As the drivers I lot of on is have And a going focused to that. clearly the performance. company’s

more any into we direction. But I this think, headed guidance point. right get at to going look, are not the are in long-term We

momentum. We have good

so where guidance pretty expect levers started see now would are materially performance of we ahead of on, lot year. continue and raised Day are and thought be the clearly to we executing quarters to Investor and have a the we have from improve, we We at we two where we

So, continued where expected progress, expect and definitely are I we see we would of ahead yes, we to at Day. say, be Investor to

Unidentified Analyst

great Thank Okay. on Congrats the quarter. you.

Chris Smith

Thank you.

Operator

very much. you Thank

Stephens. is live. Mason question next Your is Mason, Carrico your from line from coming

Chris Smith

Hey Mason.

Mason Carrico

couple Hi on Chris. Maybe a quick cancer for ones just here the of breast me indication.

oncologists seeing follow-up no follow-up? First to level, like what’s post-diagnosis, often their what off, compliance this generally? for population? does like a years And look look X these that active patient high in are just patients, demand schedule How disease

Chris Smith

Yes.

mean we cases. up which XX%, look it breast the most the we of if breast of XX% at itself, get population cancer, subtype cancer right? approximately in common makes I all did So,

large And XX% they oncologists If you will and at over do women have that at basis regular is the telling us concerns all of have looking they because right a imaging. breast years, with on of with oncologists a go that living are that years percentage see survivors post-X they have only have look is do they this that these the a population – primary their one you tool now personal of recur history. cancer tool post-X and

with help. them So, we can effort to provide does tool help that any

testing oncologist. got. that from imaging frequent once is perspective, coverage the in occur. is on is mimicked typically And the will So, that we depending And we what twice shown that how as the year, a that really based have or also off done to

Jeff Sherman

it’s breast and doing data think early you more. days RaDaR at reality health, is, MRD. it’s than Yes. think I population if picks still checking the with these the I people start we more significantly whether I think look at or prostate up are life presented, of And aging if preventative But checks, to imaging. all sooner of or it annual that And and look you whatever look, is it going

And said, it’s early days. so we have look, like

other MolDX felt and in a wanted approval. indication the is to through we think get that get I thing like certain we

is this brick-on-brick process. a think I

we, in don’t I think colorectal think where we strategic made a approach. had I is mistake a

the to the So, expanding will a are year. of like want as stopping I do we we be end towards on not just portal, Vishal submit clear, mentioned, with

basis. So, not one-and-done. just ongoing it It’s is an

Mason Carrico

How that opportunity for this Any have plan there? it. pricing And Got for sense. filing? ADLT indication? do thinking do that? No, the makes on when are color If about you you you do, you

Chris Smith

Yes.

other just ADLT will at difficult more this but applications this than indication. particular, be think indication were for in I looking we

Mason Carrico

Thanks guys. it. Got

Chris Smith

you. Thank

Operator

[Operator Andrew line Cooper your Instructions] Your from is James. next question Andrew, of is Raymond live. coming

Andrew Cooper

Hi been already in. has everybody. asked. me for sneaking A Thanks lot

ASP mix trends this one understanding versus start, revenue So, like to is get maybe trying an to of just driven on of cycle you how collections, much earlier, Chris, the mentioned, better success. better

driving So, what in can a of you give of sense kind a ASPs? us what’s for bit

Chris Smith

Yes. Look, pricing, units think but portfolio think and reason And talk like don’t break because I a it individually. effect. is the I we out we is about

think And you I its multiple. just one really speak… so isn’t to do it Jeff, But driving want thing

Jeff Sherman

And the would will I Yes, we change but that’s think growth it. I driving NGS say right. seeing quarter-to-quarter, think mix I from are strong

a we and payer seeing pricing We our direct client are some both are contracts, for increases bill and cycle. our of revenue seeing

as this those and focusing about, hadn’t there continue more would I into a and much think next now. the on focused think So, will opportunities year years – help on just shift this back and but say, opportunities the really, come, And increases I as pricing we quarter-to-quarter, of offset three from change are of said, teams as we got half we historically, the see all I can and we year, overall that cycle company. we effectively year those into as Chris have and to done and experienced to into cost increases think it to revenue

Andrew Cooper

days the that Great. of of you more of touched respective front had time or early that’s but these RaDaR launches. sort little force of now specifically And that Neo of in of it’s anything optimization changed anything for one a comprehensive, of out they’re Anything the and then send where think where been that more, the folks each maybe about already kind just you of coverage. oncologists just terms with way selling surprised that with on into focusing, the really and you with recently in your as you on, them, build-out that bit sales field, RaDaR

Chris Smith

Yes.

assumptions lot And experience than have obviously started. be think had certainly getting I held we true. we’ll changed some a more our have think now slightly. I of before what we Others

etcetera. much One obviously had access we of the be may space had it’s transparency, haven’t that what a hospitals, as in we as areas where

little bit So, access more challenging. to has proven a be

with targeting of challenges. data reasons to could to of So that we so equipping Also, we’re some so team sort and speak very the much more with address the additional clear we specific call, relationships through challenge people looking as to sure second that a way getting is as making to people we’re address look investment, the the we’re recruit well. those access access

So the one. that’s

is organizations second selling received the what buying take of maybe some or the think maybe than starting before. also the to place I that is of within significantly higher some we’ve

an looking say technologies, But only to important but where I’d was forward. introducing sort assumptions not the a and we’re maybe So top-down strategy our held have of of when is moving strategy, majority focusing on an as we’ve opportunity, you’re emerging the also bottom-up true. well, area which calibrate new identified

Warren Stone

that And like different and NPS, NPS higher, our our we – talked it’s it’s why used than I you’ve buying we think the just but higher... is is a about maybe to cycle other one about overall

Jeff Sherman

good quarter. maybe Thanks, a So Chris. that’s

of for the – community oncology a our our a as a we perceived delta how hospitals. process of we’ve got sort buying very here we’re to the The some classical setting where what processes. target product strong about and streamlines that little processes with and decisions is spoke versus been big feedback that’s taken cross-section maybe that that. broad to us the other understand hospital here lot community ordering because a and do and the do accommodate definitely processes process and traditional things there I of actually information and setting, segment of are we buying Neo segment provides Neo between it’s get customers of to is certainly access with NPS to a certainly segment. bit One regularly access from that wealth we and in adjusting our that the to And how their lever experience in internal relevant with customers the a earlier oncology do see is we is to And

segments. we again, cater our So to for processes are internally different adjusting market

Chris Smith

learned pace not this we the expansion – Yes. we and And we the thing I of going field. to other talked kind is by we think the of that about that were did when it,

one hiring we’ve out is going the done I and And that so we’ve we’ve think everybody, adapted. than of rather and learned things

For sales our and example, it’s training. whole is had where organization, all-around we we just Neo which University, field the meeting brought summer in

the we’re got buying of out making learn, of and what by Kendra benefit. meeting is strategies. to going just adapt to we’ll the I going I you’re see going everybody that’s goals we’re circumstance we’re I decisions, is the and and make a think of things about that But And keep which and the kind sales to you And do moving told more think the So going intense at forward. learning time. how that does pomp this training. cycle to and year, we is end And this look, was set we’re

everybody, spending moving Take the is anyway, appreciate dialing little and really forward we hearing bit and talking forward, how time today. business for everybody a So thanks, the in of to you time to soon. We look care.

Operator

conference you, Thank today’s everybody. conclude call. does This

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

NeoGenomics (NEO) 8 Aug 232023 Q2 Earnings call transcript