NEO - Earnings call 4 2023 | NeoGenomics, Inc.

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Operator

Welcome to the NeoGenomics Fourth Quarter and Full Year 2023 Financial Results Conference Call and Webcast. [Operator Instructions]. 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, Jon. Good afternoon, everyone, and welcome to the NeoGenomics Fourth Quarter and Full Year 2023 Financial Results Call. With me today to discuss the results are Chris Smith, Chief Executive Officer; and Jeff Sherman, Chief Financial Officer.

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

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Christopher Smith

everyone. Thanks and this afternoon welcome, results. go fourth and Kendra through for us to thanks, Hi, financial quarter our year joining full

with because want and daily really teammates motivates I statement on mission our our to vision always, what As basis. begin company and a our of

and always Our meeting a our reminder communities of how on in local we lives. It's end stabilize and teammates to we the and having the in patient we're families of just sales why of many do is making a has global we're at so their by shared care, and I'm at patients had their difference of impacted do, proud January we cancer what impact mission NEO them or how our improving serve. we great

Now, let's to quarter move into get Slide and highlights. fourth the X

and see, modalities strong Services you Clinical growing our had prior strong revenue year revenue volumes in another $XXX revenue per by across As increase quarter, another test. all to increased can million. driven over XX%, XX% we

as points XXX positive of QX outpaced EBITDA internal up achieved a margin well As last a the third strong in gross again plans. our the due our basis improvement grew XXX% of excess of sector clinical Adjusted quarter. Adjusted XX% in significantly our was an as took mitigate revenue. lower ADX NGS has perspective, to growth million, in represents XXXX. From $XX that a optimization comparable of XXXX XX% strong conditions to in $X EBITDA XX.X% as QX to We ADX services Pharma highlight, helped in we over in initiatives year EBITDA margin, quarter of profit clinical in a XXXX. and improved The to in was million. revenue and macro to adjusted expected progress in compared positive now QX an and representing this XXXX compared

in penetration by community prior versus the Slide higher improvements Turning volumes, Revenue management. Adjusted million, results. of and $XXX $XX.X for year adjusted full XXX% of versus million, million was was or XX% XXXX million EBITDA gross driven improvement XX.X% and higher-margin up oncology representing was full margins prior adjusted to gross for profit a the shift the year. modalities X in an to market, year revenue year, cycle positive to $X $XXX

on and the EBITDA. Notably, pleased consistent that been expect X, positive solid our as strong reaching gross the that has improvement adjusted throughout growth laid that continue that year. our in in revenue we We Now, revenue, XXXX. XXXX, XXXX and We've sequential for Slide to each built that move QX of fourth I'm throughout quarter seen adjusted adjusted momentum the and QX. into carried EBITDA momentum we've of we've continued quarter in trend foundation believe a profit growth

Slide on X. move to Let's

with am recall, marketplace may our you advanced with X cancer we growing breadth the that our creation time laid focus the in include XXXX. our teammates competitive our accelerating I of business and day. at for areas out our capabilities the passionate I single business the every culture. The more impressed tests, year, position business, unique and the diagnostics, spend and and value enhancing As a They lead profitably beginning operational of in driving more people core

are leader oncology in U.S. volume significant We share the a patient in of a with testing test

the companies databases to and extensive ourselves focus as biopharma view relationships, pathologists us allowed patient us Our and our collaborative oncology oncologists, provide and oncologists we relationships pathologists, has and serve. we and an on in hospitals deep market with testing a develop to community advantage partner

us a such market enable strong and these our by year quarterly deliver that execution strong Beyond our teammates it's full to conditions, results to stakeholders.

strengthened backgrounds group at financial and the experiences focus levels sales, lab reflects company, diversity, organization, Our hires including the on I'm of and our throughout that afternoon, contribute of key all operations, new going have teammates a functions. These varying corporate commitment highly joined inclusion. This team our hires foundation the X of our culture and year talented equity to distinguished individuals with priorities. to our to our are of we

XXX,XXX which our strong AUP more business our us execute increased patients strategy, expand growth, core grow than properly has to and commercial to as during our and this improved on continue the enabled strategy year. contributed we to volume mix. Execution of We acquire, serve protect,

continued improvement or across to Our growth all above at turnaround modalities. time rates market has contributed in

In towards test. delivery modalities per addition, the improvement the quarterly in tests in supported revenue yet of higher-value mix shift another

months, the doubled Over XX force, of we the size penetration. last have and our coverage sales increasing

who We checks software and a clinical identify patients be solutions their with as NeoSeek and to also as or eligible upfront support clinical introduced NeoAccess for inform providers in new patients to therapies biomarker benefit decisions may well trial.

X-point to Promoter now Score, market mentality, support which R&D, a Pharma includes our at of As Advanced increased which in patient-centric and we Diagnostics acceleration leadership services, with customer our improvement XX%. Within on of Net is we a result focus clinical experience coverage, maintained and in continue our innovation improved market division, informatics margins solid a selection, position and share ADX points to road product maintain and maintain MRD map tumor XXX development basis robust and with over in in tumor R&D. to our position leadership XXXX. We a QX competitive in gross of solid heme built therapy, gain heme. goal the the

human XX tumor On XXXX. new the R&D we in front, or solid upgraded assays launched across

clinics. The data million throughout several at in announced a heme patient data Within a with oncology year progress displayed informatics, research conferences. as X that innovation than solutions AI X,XXX we over covers lives set advance was presented and across new the more to collaboration the we

that have QX, from financial even expansion margin efficiencies focused a We and we perspective, are value operating driving we creation delivered on driving further leverage. with have enhanced pleased in

XXXX. Our yet improvement with year enterprise over operations delivered time, of XX% and has team turnaround QX of progress quarter another ending the

off the consolidation completed were platform, utilizing now will we will further kicked labs our into of transformation location. Earlier bring have We U.K. our that onto which primarily enable X separate systems digital our all acquisitions LiMS of our project Cambridge this LiMS prior strategy. year, international one that

completed of half begin see phase and the of user now XXXX. of have expect back requirements LiMS We benefits in first the to to the

to do Before to want to it litigation. regarding RaDaR. Jeff, I address I ongoing litigation policy not It's the on ongoing over our comment hand

and accomplish the I the occur pursue viable of that. We've MRD to believe XX. Neo expedited circuit committed appeal. federal hearing, an vigorously We injunction that appealed granted that patients intend on we which March, preliminary serving is have will with cancer several been say to pathways and to However, have testing, the we will

administrative In stay a we appeal Court. Circuit have That Federal for the stay and briefing from pending addition, moved February, XX. an completed was

to call Now, to our and year over full turn financials in Jeff the me review let QX detail. Jeff? more

Jeffrey Sherman

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

tests XXX% EBITDA. prior cycle positive clinical EBITDA flowed with experiencing 'XX. and to from quarter million. growth the from over revenue a operating improvements. Adjusted revenue driven a per said, growth XX% million, over Revenue volume, by shift higher-value year continuing that prior revenue to consecutive year. quarter $XXX and in we double-digit favorability through increase growth mix fifth by over improved prior the a test of revenue line business marked leverage increased revenue the Chris QX revenue to driven to significant X.X% We from increase with generated XX% test $X bottom as the EBITDA adjusted and QX prior flowing was year. Fourth year improvement adjusted was year in growth continued As

the volume. million revenue Looking driven year-over-year, our of execution effective revenue The force, resulted and a X. the per strategy increase a in along at Slide and of was XX% test of an volume in $XXX in with improvement increase Clinical sales growth. Services XX% by of growth commercial optimization higher X%

XX% Slide on XX. higher-value quarter an maintained improvement revenue to test we per $XXX, XXth management Average for tests by clinical over and the revenue increased year consecutive representing Turning cycle focus initiatives. versus as prior year to prior

NGS the shared priority for our past, strategic over clinical the accounts with total you revenue of XX% we for in a As and year. is

portfolio team fuel and continued NGS growth. to our of NGS additions New focused sales accelerated effort the

Turning to XX. Slide

$XX over the ADX forecasted prior X% Diagnostics up but in year we the versus was Advanced As calls, did grow XX% first of XXXX sequentially to X XXXX. each prior declined on revenue million. revenue of QX quarters quarterly

was strategy revenue ADX in ADX macroeconomic this performance to was sites margin and Pharma decision profitability XXXX prior focus in due further XXXX margins low-margin adjusted over spend to our QX quarter XXX see well to profitable to versus XXXX, expanding and in expanding sales we benefits our growth our The the global Similar and conditions driving with of from contracts. The clinical prior with to as gross on as XX% rationalize versus in basis However, growth organization strong and points year. R&D initiative decline are as of expected the accelerate by testing our progresses. expect revenue partially unusually ADX year year. is growth an

was EBITDA year. Adjusted Adjusted statement improvement was over margin basis the and gross in million on at positive fourth improvement profit These driven adjusted by cost improvements and quarter business. which management, significant year, prior the or of XXX% increased gross higher $XX income last points XX.X%, prior year. operating were Slide disciplined $X XX. both XXX highlight million over gross profit Looking versus leverage an XX.X% and the of the

increase marketing million $XX.X Regarding was G&A and operational $XX.X expenses, and R&D $X.X we expense million our million. sales commercial investment, as was continued was to expense

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

cash diligently up an continued QX million of are the from or our of 'XX. million We managing $XX.X improvement was from flow disciplined XXX% positive to operations oversight and on expenses. quarter, and focused operating accountability make of good Cash progress $XX in and

Slide review let's Starting results. financial on XXXX our year XX. Now, full

volume, year, revenue cost driven versus prior test a million revenue For services. Adjusted $XXX EBITDA due and management. the year, prior XX.X% gross higher and increases by revenue increased gross to we by year over clinical per profit NGS revenue in Adjusted result $XX.X improved in increased profit. to improvements as million XX% and of and revenue effective by test

due improved on upcoming Looking flow our provides Slide or strong cash securities at Cash XX% of million us marketable ended convertible in performance to with balance year from cash operations XXXX. avenues in We $XXX notes the our address $XX the sheet reducing and million. with XXXX. burn This XX. multiple from

results call. We on provide expect financial near-term QX on clarity more our maturities our to XXXX

Now, our outlook. XXXX to turning

see revenue mix NGS our an bottom product strong line. We are higher and updated very leverage and in which operating provide by continue to new tests, growth to increase and encouraged the

and our of lives. aligned necessary who investments of our saving world-class a and to with ensure patients that the we teammates made people have group We in mission are appropriate serving have

build to brick, I our by continue business ever. future in we brick confident more As than am this

XX. Slide to on Moving

a in to XXXX, XX% XXXX strong momentum which year million year to $XXX range XXX% full the to representing XXX% the million For financial to summary, represented growth. In be revenues to $XX continue us growth and of we million, XX% adjusted and XXXX. to in performance, representing expect EBITDA well of of $XXX million, positions the $XX execution

sales and in investments expansion enhance will product and growth in including menu model to clinical in force and initiatives, R&D, investments to increasing our further businesses We of business continue tests. innovation invest and our ADX optimization and

EBITDA years QX each million annual and our XX% reflected range. Based over year structure, range growth will adjusted and addition, 'XX margin $XXX of revenue prior performance anticipate business, one we initiatives excluding strategic a including are making of guidance long-term our growth X% progresses. Based representing expect investments automation be XX multiple our million, are we the higher XX% consolidated platform in strong the long-range on in drive will XXXX the exceed investments in in growth expect in adjusted increasing our leverage and consolidating our will growth our EBITDA rate to over We a beyond, core outlying be and reflected the to to target from into growth. revenue In in our future strategic confidence X% on down to operating the to sequentially $XXX to These our MRD. to drive seasonality and cost and operating efficiencies, XXXX X% in LiMS initiatives year revenue targeted revenue our we as XXXX. Therefore, systems of in drive in next our XXXX plus and be business growth our in months. quarter our growth will in

Christopher Smith

team's on full priorities, and flow year XX% saw meaningful progress and growth our therefore, of guidance. XXXX cash in able our including improvement and we're of proud significant high end our QX operations. We execution the progress, and very of revenue I'm Jeff. strong raised adjusted Thanks, strategic to for EBITDA in a reach the from

support on beyond way and our becoming XXXX confidence to We our leading information decision believe company. for business. well cancer guidance testing our the Our in reflects we're and

our foundation we over the on to to connect the basis. Thanks we several for continue and past I'm Operator. will to the and of growth. quarters most today. customers build excited long-term for with I'll patients back for We daily to the taking deliver a time on have throw all, us teammates laid serve sustainable our it

Operator

[Operator the Instructions] And comes with from Alex Craig-Hallum. question Nowak first

Alexander Nowak

the to LDT, of I guess in is the and questions the potential results. on FDA digging a sure FDA wide issuing be it. there's on the Congrats call of could I'm the around around on LDT into going portfolio. have one to out But the and lot variety wanted and and, ask rules? Depending coming guidance the final Neo definition its of a an I

is we're just little but a I'm you does now, what the past, doing just curious forward team in move in to a the hey, case decide, bit So, talked what going the rule? FDA internally final into

Christopher Smith

we've or our Board, I sector it think seen Look, Yes. the I a so companies Thanks that focus team. as ago on probably I background. in in would come months bringing We're this say I closely. other on ACLA together came We a that. when we, we for from say are mean, and XX who obviously, couple progress like watching management started started of coming. Look, things. our regulated our would people

you backgrounds. come folks if about myself, call, regulated Jeff, on the FDA So, X think division has from the all this presidents, like

acquisitions way. that We moved the one. quality started all system think moved system. quality to build I and we one We took to the them to

R&D now design All under projects of our are control.

been in ruling a there's unfold if it's And probably win. like think who the there's not operate looks leading coming. a constitutional. But out, our probably industry it's things still comes all lot to of being to lot perspective, to nests from of it's prepared. kind wonders if people even once it to are we've So, for the going That we get starting said, years companies X.X these occur, have to think if I X

think lot it comes our is we will So, as I about us, in is really on. Look, But the up advantage. for competitive becoming we it think position end good companies what grandfathered in a and And not. feel marketplace. our be confident feel ability like to that we manage could a what depend on very

Operator

with question Westenberg from next comes Piper The David Sandler.

David Westenberg

Great job, guys.

specifically I specifically, like Can XX% if points basis it talk there? And update I term. the it on, right, So, I at a So, growth plan multiyear what growth. is confident Do you XXX the you that long-term trend? because This and correctly. heard big a least assuming swing really that's is not that heard about is happening updated plan? that that's just versus you long long-term feel this

Christopher Smith

It's there end. you we it a and guidance kind pretty levers we as market We year, like understand cycle mean some around when year of April think And in in new news at products. gave well I'll maybe think we've right best But the revenue our gaps end. pull and were team. of put come growth better. We something under together and was in that the much I had Yes, I'll the it a look, understand better. to over the comment business the the I of did. understand and where more. things have Jeff management long-term at then we like management Jeff the say in significantly belts, the now are accelerated last I

position, to of XX-plus that do, guided this year confident for leadership growth, XX%. But 'XX, we the dynamics, very market feel And core what the to we you business, want we're we market that so, that number. Do things add?. can XX% just because seeing the in our in

Jeffrey Sherman

Yes.

do optimization force are So team to about be more really then We've people focused adding multiple add them help that. comments made I how on sales we efficient. and would our to

technology we sales and of actually clinical team. through we a operating our leverage team both in and people, support ADX think for get back-office can in our so, our just lot And

And another so growing I market faster across the than think that's modalities. been all component. We've big

clearly on focus positive strong a are results and there. have We seeing NGS

think comfortable upon our with raise our our to that view as to as increased dollars our overall is, Chris more well market teams, I getting are growth So, and team we're position XX% the said, long-term our plus. level confidence investing based with the where in performance has XXXX our in just target

Christopher Smith

that one. especially business and And still David, double digits. And other rapidly. at mean the under-indexed, growing penetrated say see you I'd look relatively NGS, if we're is you growing can but Yes. market that solid tumor, is I incredibly

are think we a there position we factors where a good lot I that So, really are of from feel about perspective.

David Westenberg

a That's because I second into launching one great and you're segment a think liquid.

So, could solid what or given liquid into malignancies like and in been accelerated has market going line we tumor, expect you're now really fast. just you a an doing transfer right which time traction that into hematological then

Christopher Smith

Vishal, lot and you, but we're what of disclosed? let a group going me Let you anything we've development. and to under R&D want sits that with kind with doing some that obviously, products just have the share of of kind the on, Vishal in you liquid

Vishal Sikri

question. for David, your thanks Yes,

plan to which because that lot spread with they to an we're place the launch particular, liquid on both acceleration side, So, pharma also going in enough testing think along just towards we're pharma they will a biopsy XXXX second the I accelerate Pharma market, clinical clinical side, side we'll into for from half see the will liquids hearing on of that into. But on CGP in a all is liquid in the assay the don't for tissue probably terms side, penetration there have into looking we companies do. XXXX, the want that the do to of especially but and

the from choose really or solid gives opportunity liquid that perspective. So, to this them both

Christopher Smith

in and in probably late And moving of clinical that half into Yes. see year then the XXXX. Pharma you'll in

Operator

Puneet Leerink Up next, have with Partners. we Souda

Puneet Souda

questions of can I'll Maybe into congrats we wrap what the on Obviously, you into X that my elaborate sort NeoGenomics think changed today. growth, to XX% LRP guide? I again, number is volume at has NGS used in grow to about question sort the that in growth the mix one. at ought here. here. increase long-term There's point, that mean, but one know I more clinical of

then clinical 'XX. AUP has clinical XXXX? and throughout could growth year the should how this year maybe for continued you about the the think that? in So, we elaborate And The AUP to on volume in ramp

how So, just of sort that 'XX. for think should wondering we about

Christopher Smith

our that Maybe look, and think a the business take Yes. effect. of really But a is throw way little portfolio it Jeff. I'll bit to we about

it, you factors. we've have those informatics, if we so, have we into at And think we all clinical. And guidance, we account look have both Pharma, out obviously, building years' about when outline taken

is of its lot We other lot significantly the think you those the is industry units group. whole, have specifically get on right? We're X Jeff, else we and AUP, will the anything paid levers amount mix, which you though, more more will is runway one you becoming a that Jeff revenue are at cycle. have is look give -- or I think say, driving selling to probably is of ability identifying we that And But where it's just different And the down not our on AUP. masterful do broken in But NGS. things it's on? this the doing. I a but team when levers, our as have within think woeful thing a more XX work the I for really

Jeffrey Sherman

on we mean, ADX as that we think, Chris we AUP. or when given our did and the growth. as going original positioning I revenue specific we volume we're side, to good sales our and haven't our that Yes. didn't force feel gave said, certainly anticipated clinical achieve But on disclosed additions as both disclose I well guidance, execution

is driving think things NGS I said, as this a increase last AUP. per the XX% there's the for Chris over driving of in revenue I quarter, AUP, the few on that. mix, said In quarter, that test

see factor, cycle the NGS initiatives. were stepping then the upside is revenue in you other specific year throughout said, driving that revenue in up to can test. and And meaningful volume continue accelerate the just Chris So, as per XXXX. And also

initiatives where saw work of XXXX. And the where pricing well, specific The to in we're there's improvement We some just historically getting that. in first side a good as paid on doing, ours. drive also we're been strength a in of price then hasn't for getting having success that lot increases the is that

So, drivers hit again, paces drivers, going we have and to have and they're mixed going intervals we think throughout get growth our different the the about time. is revenue volume we side different way I have year, of we us RCM overall to have And think those the the I is, drivers, pricing to over but combination revenue drivers.

Operator

next with comes The Sachs. Goldman from Sykes question Matt

Matthew Sykes

on able see and the them a NGS get of you on think the a Maybe you the into Congrats harder, guys as mix you lot it Or groups a to where time? just Jeff. switch of to just of or just NGS was just mix kind over just quarter. of clearly continue drive following customer of 'XX? for my mix about talked do runway Obviously, shift, this where course in shift market them. easier year for that's and the that. But the mix the of up on NGS then, shift you to have you're there's runway part, probably focusing lack terms about, Does side lot like And into Puneet's to second question, one but over of it. driving that mix think, quick wondering I'm awareness

outlook margin gross 'XX on Just, any guide? views the within that for

Christopher Smith

think, as big solid on time. And, expanding this increased and should that because versus as sales gotten able know to for we've be business Thanks, pathologists that believe be be I and business, one is ability really look, to one think of really look And and more, well, force to maybe very at our Matt. is well market of you NGS? And we you under year and we're of as go shift. the the hospitals the and think just that NGS earning mix on Warren calls going this did some both and a as the points I is tumor. think total think the us company I much one the out oncology, very that revenue second here, that better community so, indexed, our you is there's that XX% there Look, spend the I going focus door to the as probably oncologists things like come that percentage in to we revenue could for say of a when do of in be and say strongly, in I'd I up solid, but to for using even lever heme give maybe I Warren shouldn't leader opener more? argue we're that

Warren Stone

I think mean ratio the XX% you now I that XXX%. the communicated agree right we've with roughly of I everything said, business. is

was think, increases, I fact So It midyear take harder. last as by that some gets ratio launched time probably discount traction the were But wouldn't marginally products I see year. have new certainly, the it we place. that we starting to

a mix new products us. NGS year, that segment, the can community last to drive sales that's of that believe which the continued said, will in penetration which certainly invested oncology provide will we particularly in those in Chris we the then from are another were And annualization launched as NGS, support shift. that related, those resources is benefit looking for one into, So, lot we've is why of incremental reason growth where opportunity

Jeffrey Sherman

Then gross XXX over to year, on range the XXXX. margin side, adjusted I would a next in margins Matt, over increasing basis points at XXX look of

Operator

Brackmann We have with Andrew William Blair.

Andrew Brackmann

with sort about inorganic time? talk be guys about? you dynamic to appetite can balancing you Maybe adding just the profitability, guess we Any sort on of bag that here on sort front, your over the making are thinking should of for increasing as of here progress that I considerations

Christopher Smith

thing got said. first and I Andrew, to tell you the Yes, you, very missed

Andrew Brackmann

growth. Inorganic

Christopher Smith

scenario the much I Look, Yes. and that that. and very accelerating we versus missed looks I to Sorry, on grow business believe unique you at on has a it's invest, growth how digits mid-teens line bottom think plus you low put revenue much profitability. when do unique a opportunity a company do double this how on

ROI. us, going think dollars a invest can for think that we long-term where at we are to we the I look give

spend in lot talking we initiatives of a we when them. about as leadership strategically what are to are So, and team these going a invest time

of force. a So, expanding example, Last the clinical the one wins. year, year, for this sales big ones one is was big

we think revenue is profit can our and So, either think to have fast, that. it's do Like not run or always our you that and. And to that believe operating want business says, grow fastest. I that And gross margins Jeff balance. faster view I we we it's

So financial we to But about a want good I perspective? really you think do that from balance. get feel Jeff,

Jeffrey Sherman

Yes.

just well significantly I to think actually confidence our burn ourselves change and actually in the cash produce our as other to structure capital thing our cash really XXXX. gives position for is us starting ability and that

just think to for we're clear And used investment, where investments being pay which in more time we for the positive over and I that then having rigor rigor time. in think, to be the doing clearly, going investing we've are a over Chris themselves us projects process, and with strategic I gives are I discipline really, that over EBITDA had have expect going we the 'XX, think fashion 'XX. And confidence the we we've discipline an for that made. and think, in said, the having to So, as adjusted last I drive to lot ROI and dollars business. And, how path certainly, of it's a all months

Operator

Up next, BTIG. with have Massaro Mark we

Mark Massaro

out I the on about know And question informatics. is I on and revenue. your predecessors quarter. a side. my services. big that's monetizing company oncology sizable of clinical Pharma talked Pharma progress great data lot some precision Lots with is large there services there pretty a guess Congrats on more the

us doing some just of big forward. on give curious, that give monetize guys you going growth I'm Maybe Services are an the the out? So, maybe for revenue us of just update and shaping growing you profitability. How great see can And you're how how business like just about Pharma just a thinking a data? sense job business the you

Christopher Smith

when we decision first that it is a not Yes. I we made Look, a had came I I lot were think profitable. to in, think pieces conscious of that that, thing the very mean, business

Pharma, that And in company, house margin get order. there. let's this in you see whole And our moving. progress And get gross so this had talked was, and we've we've can great the especially the in about focus in but let's

about we front Pharma companies tip it's the spear do because example, well technology innovations new technology for we I on from of saw the of so business, think we new clinical go think perspective MRD. believe when the and in of in Pharma the kind that, a

year, before and So company spent 'XX like in can baseline start the do, think it now we have but could expanding things about. and felt and to all to was there first. On be look money I the and lot to the let what the more to, we heard becoming But about had data? in come Vishal especially referring more of We're expanding kind think And time about for runway, got want I of at But that -- clinical Melody lot pharma last there's that's we We've of all able maybe a perform it's because informatics. there's I'll ship portfolio. of like be. the was priority. informatics, to a we had the it's again, we our that right but Jeff, sales force. it's data the we to in we sales of to is opportunities there, significant do. And of the as but believe Do think clinical now that I feel you're we you And points the informatics priority, of great patients test. together the growth a force we and of and growth, Vishal more ADX. one to informatics probably right talk get we But a because not you top about and us, the work step place kind of that our accelerating talk

Vishal Sikri

whereas have Yes, I at time. data NGS. NGS the at portfolio, the our company, what others will have that the it within about of we as our grow maybe product modalities, But also across one our grow data data has things is we will all look as nice think we of in the primarily NEO same

are data allow way, structure much the offerings So, going side. that, the what to that us which we make we're a is couple top to in informatics on us can whole. terms our the of to as will LiMS of the of than today for in different will get years where we a right data also And investment in be doing, successful

important But for today. with data as the X think we're So, mean, the right that altogether, years the a build long we one more do how and next where to couple still I we to next we are have is in have from of years, for way that building can it now getting go year right I to we steps. out there.

Operator

The next Mike & from Needham with question comes Company. Matson

Michael Matson

Just LiMS wanted on to project. ask the one

second that could of you mentioned the of start see the you some half. So, to in benefits

curious all be? Is Is mean benefits what of I pro could the just it above? it share turnaround is it or So, margins? time? those market

Christopher Smith

to all think I call of Jeff, above. the Melody's you as And lot, then it's do can financial maybe a Look, take Yes. about talk well. on probably there's but want Melody, stuff, you Melody? the that initially?

Melody Harris

I the think operational around and in it's first and really productivity foremost, lab. efficiency Mike,

So, see hoping and Jeff, overall lot far really multiple with obviously, data currently to and structure? on and better, a us. are to the causes is eliminate. we're and our expecting that, of for LiMS system cutting I better back-end of the cost the our leveraging there as LiMS ERP use of billing that to that patients, platforms really connectivity because connectivity pickup of on that for we're big also to our it's systems. And start to leverage we're then an working that architecture things a the enterprise to systems lot that. But Vishal EMR, connectivity But we ability mentioned better better our like pacing comments think all driver digital different regard we're various for and into the

Jeffrey Sherman

give I process tests and service thing where our perspective other I us would the it mean process. client are in where are better well. the on add a And as just one self-service on visibility tests in from will Yes. allow really for

making and have with client over next will are process. up-to-date I think the expenses capital giving X where investments them then So, And are that the that with operating helps some we we years. and it our testing communication

that think client expenses improve So, as those those as have investments this we start pay the our as one operating time, into dividends. Melody over standpoint. top side have in is an benefits margin well I our guidance. noted side efficiency factored I We'll seeing And think it is going again, service. we from long-term And to could of it gross on

Christopher Smith

as Yes. interesting, spending And to much you this, we're us as far in we think component business for as can I maybe, experience Warren, talk lens are get got just we go, to on we I to to customer serve where and and we've got to the the And on patient. experience, think, on doing you want win we're to what to on look, this as but probably it's digitization. And the customer win the platform? to digitization give want the ultimately the on ability

Warren Stone

protect tests us to an today our something for providing from transformation. important to to real what strategy. it on additionally, a allows the a water be increase we're the digital in which will allow terms to and which start of LiMS the sort self-service. be will is platform we're many customers, ultimately, building the in is to building element expand front missing foundational us. And calling Yes, It digital is customers of will time, customers, stickiness being status us track to investing This certainly commercial what for the platform of our block in acquire for that those element said

something to that part value latter we So, the else expect in look of XXXX. see to

Operator

from Stephens, Inc. comes Our next Carrico with question Mason

Mason Carrico

that some business, So facing low-margin called some business sites, well the out you're macro as for framed you quarters conditions. in up rationalizing headwinds you'd ADX testing the you previous -- had as it be facing

is, I guess that start an are forward? lap each into you in of about of year? the much I of ahead you of And kind buckets out, we year, going break as this low-margin those this accelerating you have? think could how guess, do X thinking growth business business impact And really, So, question kind look how to rationalizing we when this

Christopher Smith

mean pick we Yes. don't can up I that it Why took contracts decision, it up? take time. and but made I then those front Vishal some

see start the probably start in to I kick So, that second piece the think year. half you'll of to in

new other give why the haven't the and broken strategically more impact the maybe doing But you is. think growth. and your that all why the out that's things We even and of I just NGS relatively confidence talk importantly, about acceleration modalities Vishal, is where team in still

Vishal Sikri

Yes.

heavily until modalities movement not bread we're trend we from look to moving trend. We as the to seeing to oncology that We're traditional moving and Chris what what fish products clinical, like X an perspective. side, at in of NGS. to that see what right X That's example, we is have as and a If seeing coming years already And as and call, we're in is didn't launched you mentioned, investing particular, we in an usually, going ahead last technologies, year. pharma Pharma That's our them for, us from butter. But our new the in still I products Pharma IHC. modalities, up our NGS launch right? anywhere

in for to more starting also and into that have we're that matter. higher So, which cases see movement NGS, AUPs more usage

invested team that that sales team. we're also on the a XXXX. and We lot the from now and We're sure So, clinical us investing perspective. to a BD making expertise our allow we ADX in in investing the that side tools rebuilding side BD in grow and will have

Christopher Smith

Maybe talk that's be going because biopsy to about Liquid [indiscernible].

Vishal Sikri

the that earlier, what side, built tumor to our as will is the But approached offering to right we which allow us. solid tumor where of Yes. lot the CGP, Chris because biopsy that and give Liquid on especially mentioned testing make biopsy the tissue they have our time launching for mix. And is, is which now, don't underpenetrated liquid we're we're solid didn't Pharma to a we've on. to something very from now, Pharma, do liquid on we tissue business get all much product side us right have we

have For sitting example, been old X XX clinical that from X, completed. years to been trials around have that

planning we're offering of launch actually that back go business this to and some with that able get new to we're our So, try and year.

Operator

with Andrew James. have Raymond we next, Up Cooper

Andrew Cooper

of being can focusing sense on to from of just and more expect we that's once for RCM just is kind stabilized in I the a that stabilized? a little price? increase you or us XX% Or ask or apples-to-apples there is the how on maybe another it what contribute yearly basis, for Maybe can of kind mix about AUP, on I an say, we come here bit that first price give runway basis in should a mix where way, think in scenario much

Jeffrey Sherman

mean, I driving NGS we earlier, specifics, without about said Yes. into XX%. granular was kind getting of

as is improvement in AUP business, the a We test driving revenue which of seeing or component per mix other well. aspects of are still

that I think for terms pricing of paid a just us. where is type to we're getting think think expect And opportunity. for we the of initiatives, also paid the initiatives in multiyear are what opportunity increasing be is the we we revenue a amounts multiyear

and what between gap we expected paid. And said multiple are what records year continue I mean opportunity think that authorizations dealing bit is we're calls, identifiable the And again, aspects, prior the we're it be I have So, to as which being to close a I've multifaceted. paid there's medical in other with necessity prior tests. some to or we the clearly with. particularly of or larger harder, little are then are policy panel areas there payer medical

we state not some as the or also biomarker not over time, reimbursed improved reimbursed gets we're test that the may so, a close of gap for where specific and help yet approved being fully. will gets legislation be And today

think So to have and have that multiyear different identified a teams there's see of runway. on I we again, that a areas working that we close lot gap

Andrew Cooper

maybe just And then more. one

frame that about margins EBITDA adjusted beyond growth? be the 'XX maybe even time out for bit great do laid EBITDA the context does whether you that little for doesn't where that a any in April of update, obviously, the see bit margin go or higher that event just that in back number and we On of to little think to can might what maybe revenue kind how faster expectations LRP or

Jeffrey Sherman

Yes.

in it high by above margins So, said ago will high to that we help to year we high the mid- to be end don't EBITDA know when think expected it was, mid- that. I the meaningfully a I teens, achieve XXXX. that to that in we teens almost changes of what ability of accelerate but growth, going it time period as XXXX. Obviously, range, positive also Obviously, said think and think, XXXX. generate forward, off we expected a time initially adjusted EBITDA well. And our operating pull will leverage we that we over revenue the help EBITDA achieved I I just in to that be could growth it to adjusted

that almost again, year somewhat a forward on So front. probably pulling

look margin benefit I basis. revenue ability and EBITDA at our long-range generate will clearly as our adjusted So, growth, we to operating from think leverage plan it on an adjusted gross the

Christopher Smith

and to Andrew, Yes, business. on multiple I the we, and leverage this think seen as the like ability talked to is, pull the get we've levers I ones about earlier pull-through

our growth You of saw amount significant that into a the drop bottom year this line.

confidence so, these things. of think in some of that's our And enhanced I kind

to margins capture still $XX value $XX XXX we gross where go leverage to to want by million margin like have We program million from a we gross improve get things want anywhere basis and get year. fundamental. her But those on are all about in I think place, now, can see I the you detailed plans we that. has now when on she points mean like and Melody every think half. side Now, operation, the

ability of sense has think it to it. a confidence I greater just So, given deliver our us in

Operator

The America. De Bank next from question of Bruin with comes Derik

John Kim

the to this you details XXXX the going clinical and services have Is guide to other guide try one could update here. that Derik diagnostics. split? share what and going on to it I'm ask Any to You advanced long-term time. Kim on to more for here. hear the Great John be between the

would think but I sales, talked that of about be know bigger you be services thoughts how have. the would a additional any the it previously portion to you might clinical yes, helpful

Jeffrey Sherman

Yes.

have. We

view when earlier, really an on portfolio said guide we a as Chris overall portfolio As basis. it we

in expect guidance. broken out We breaking both out year. We individually. and do just the haven't don't So, plan out grow it to on we them haven't broken of that in our

John Kim

impact so December. about top ruling want ask I expecting the financial And line RaDaR know or bottom patent when included But expectations impact to that the of have you it, guidance, getting the on there this if in on any the to could what think that not resolved? against rid bottom infringement in in comes was the it's not line. get terms any I did it line? Or like of might

Christopher Smith

Yes, questions, to live address X the points. going I'm quick but let Ali

one. in do not But number believe number it, we does important. So include our MRD guide X, is any RaDaR

through and Ali let So, side put it how then just to to that legal I'll of walk is. her kind the throw I'll

Alicia Olivo

know was, we've We we've an that expedited the Chris scheduled and any timing. as have is visibility Sure. XX. that requested hearing the expedition to we granted don't hearing What for March been is said, and

kind to the on on the decision prejudges. factors of a Appeals presidential, of contribute various there's whether Circuit including is decision, panel whether or a the opinion Court so, of Federal And not timing dispensing

fully We have also today. motion made a motion like Chris of for a stay pending said briefed appeal. that the as And was

a sort on That's of what timing is know terms so, of And we in appeal. timing that the within of weeks. couple on

the in North has matters for of As stage. XXXX. Delaware March case set far and the those trial set been for The XXXX ongoing district of discovery Carolina and been infringement in as the in case are has trial are in court, October

Operator

Savant we have Stanley. next, [Operator Morgan Instructions] Up Tejas with

Tejas Savant

you terms we've was the of an that your resort pivot there. in comments short a us right? at were in And just if a the industry remarks well? the in perhaps order. curious curious, that of give of for you to seen you that Chris, questioning a new And how about options Can available on was moment workaround quickly RaDaR wanted other sense prepared option as the relatively peers push was here, to made is version litigation? similar your as in exploring for that I So, could something actively to I line you I

Christopher Smith

say Look, that a first all options exploring actively would we the that believe around from I situation position we're our [indiscernible] MRD with legal. about

they additional started. XX being have before mean, that's where beginning for I So even products have we obviously, months been said, we're in probably going. That MRD development

of patient that I team and that's sense any us, believe a perspective sensitivity. And IT a that from haven't especially to would say at from of they're commercialization just it's in ongoing. but the incredible say But like just say bring continue to a need it's incredible for products operate urgency market, would lines products R&D an that, we not it would urgency. And given I a the time a we're from it. there's we operating improve looking from lot perspective, on been sense with But So, technology perspective, that we I trying we're that an of think perspective. that an Vishal to with with

Tejas Savant

then given Can me here the out, one currently tests benefit what biomarker passed proportion commercial lay quick from could the And bill. think incremental you just on for that the coverage you payer Chris, legislation? even follow-up have states your of

Christopher Smith

genes. reimbursement That's where or a come test, limited. which third-party today, the any So very panel value is clearly, larger where NGS quite we is a on will believe from payer of XX is perspective

that's So, where see we benefit. the

business, of In what et actually I is, our cetera, haven't of terms we on. portion think that that commented

Jeffrey Sherman

in one one of talk And is larger QX. NEO more strategic 'XX about panel. when together is launch we our get we'll the X.X, things a of significantly some But the after them comprehensive priorities to which of Yes.

that And be important will an so us. tool obviously, for

Operator

with TD from Cowen. comes question Dan Brennan next The

Daniel Brennan

framing liquid about on think reimbursement Maybe to from a question can we we And like back what the just Any offering. type color revenue potential of should opportunity how the a expect? perspective?

Christopher Smith

Talk the in bit about market? take to Do you want little a that? what's going on

Jeffrey Sherman

Yes.

similar in here you from a news XXXX, of for something get I saw there that, things what status is depending higher with reality changes tissue good or see guidelines liquid perspective, to at we on where established especially the dollar we at each side mean, be in expect similar we And in test. tissue that being independent same amount same that's the what tissue would see the kind it And or being Medicare as to just the NCCN So, on potential a cancer on is time of least with time. the the tissue reimbursement lung what available, see is of you with reimbursement space other. on from we late that at lung the get not also this. But done updated for

also the of helps reimbursement changing, So, clinical are story and adoption, community-based and especially you're I think seeing in whole course, the setting. that the with guidelines the

a So, going us for be I growth. widespread think is to having critical is liquid offering for that commercial

Daniel Brennan

XX%. on maybe probably then market growing speaking of And Clinical north volumes just NGS.

legacy number much, that community Just test exact how maybe, about wondering forward are of a market NGS? versus for of your could your customers converting and like I'm for volume far the growth, wondering just but NGS, say, us to these your kind is for hospitals the some growth distill how customers big that each, and towards like give you're just driver for you thinking along you sense more a I vectors not your to going of know bringing from,

Christopher Smith

all. from little we let distinct I'll compensation a on they're to really X about what's and going remember, do But want it. Warren, perspective, have on bit focus a we field take on? that incentivized Yes. Warren strategies you talk

Warren Stone

Yes.

that taking be place. motion. of first couple Certainly, may using of today customers That's not are into data I think that got that kind there's more we're different a moving we've dynamics the a NGS. NGS using

and have haven't new larger customers then removing have obviously, that customers panels now this available of And the number community past we is, the single a to gene relevant oncology customers that smaller in dynamic the setting. we're is we particularly been these in and which panels. And Second addressing. are of

those of in from of plays drive of into wallet growth NGS the elements X kind expanding different not share the supported gaining moving X, the around offerings, but existing sort which using customers X So past. larger to an a identify our using thirdly, customers, kind NGS which which target those our to is strategy, then panel it of is analysis which be areas it's NGS single sort panel. And with small And could where new or acquired perspective. secondly, gap or protecting to of been which see a strategy, commercial near of strategies of into we again, are we with NGS customers, of haven't really various commercial where

Christopher Smith

by months time until third hadn't where biggest customers, the the And about new just oncologists. been opportunity community starting toughest is we but one which getting obviously spending far is it's those the XX ago,

Operator

for over of remarks. will We the Chris call question-and-answer closing the the now turn session. Smith have And to reached I end

Christopher Smith

get some on is going the think the to good Look, the the time I we of heading. just incredibly business. on talk and appreciate where is get more the business. We kind business everybody and where I about state taking the And color together about inside business what's of feel

more think of we each I we continue I care. time go this into insight we'll today ahead to continue think we're give thought to thanks long-term your early as quarter, and being. the try how business forward are plans where the for we you and build take And to sustainable growth. Again,

Operator

for lines disconnect you your this at and you This your today's Thank participation. conference, concludes time. may

NeoGenomics (NEO) 20 Feb 242023 Q4 Earnings call transcript