MDXH - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the MDxHealth Second Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded.

Before we begin, I would like to remind everyone that we will make forward-looking statements during today's call, whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 10 -- Form 20-F.

I would now like to turn the call over to Michael McGarrity, CEO. Michael. you, Thank

begin. You may

Michael McGarrity

and our thank MDxHealth. joining Paul, Financial all me you quarter XXXX for Officer. Chief second Kalfus, for is us earnings today Thanks Ron for conference With call

that report in with over performance quarter revenue to pleased of second am our continued and strong the of to half first XXXX. XX%, business and growth financial generate XXXX, respectively, I XX%,

and continued discipline sustainable our reflect focus XXXX which growth believe results execution operating on Our and drive we will through beyond. commercial

last proved case our a growth. support trajectory highlights our brief QX. But of factors greater noted creating multiple strategy results help our our key On view from that the provide in that call, performance. our first, to detail drive I a sources And of is growth strong that on moment, will few sustainable. of again That I the some be in our

$XX.X prior stated, note, increase quarter We an of million, second X have we as over XX% growth. and of levers revenue reported revenue Of period. I've of year consistently

The up price. team team, adoption coverage, customer shows our Urology managed average our second driving and market driving sales first the with from base; care is which unit our is selling in our access

underscore In balance neurology test addressable lies market, diagnostics. test XX,XXX opportunity precision for in expand growth commercial clearly as with tests, market-leading X and clearly that unit These on $X representing menu ahead a our precision and sustainable of team growth total U.S. QX, the we the and total our offering our time both us metrics build in billion we levers important total delivered execution billable of approximately of XX%.

second and to year-over-year to in and expansion to growth GPS, XX% of for rates in growth menu good achieved continuing segment. the test our volume are with Volume our of our to the ASP accelerate. visibility Based quarter, clearly provide menu, by consisting now effort test in disclosing tissue-based Confirm we on for the business an market, continue

growth Our of recently over liquid-based begin consist last year tests of Select introduced unit this we to test contribute the in Resolve and hereditary menu. germline our to provided in QX XX% growth to segment and expect

refresh predictive our think technology our biopsy a characterize test. value only of XX% Confirm biopsy, and growth, value value. context and is test a our on analyzes I of of driving the which delivers the appropriate performed the menu with negative expanded For core each proprietary mdx is to a tissue-based negative result methylation test that after the with a each

harboring of a test positive prostate time. identify is Confirm up ] which can [ the to patients Additionally, cancer XX% undetected, regrettably, clinically significant biopsies

We Confirm and negative urology the are our a for seeing and the understanding advocating after by of cytologists this by value customers importance of biopsy. increasing test

or of provide other pathology, we clear, mortality To follow-up Our the the adverse whether advanced than the tissue cancer-specific gene side we following which company GPS urologists stratification, for are Test market, other requires biopsy, the tumor should tissue prostate only multiplex interrogate highly critical initial test directing in stakeholders. be our negative. any that on patients. noted It positive tests XX-year which risk by in that decision-making less clinically be Test pathology materially actionable actionable data a to from again a for providing GPS and informed is and has can follow-up is initial diagnostic the positive biopsy on for an

And our laboratory to laboratory the operations Credit this Exact lab City on complexity technology partner here organization for information integration Sciences. the update, additional lab Redwood Exact importantly, GPS midyear sales to the completed an completed post our we as and I've the in of of on MDxHealth in acquisition groups XXXX. Irvine. Test transition We now have the Exact complex integration a carve-out the commented As from as completing the from field transition. our

will confident growth has diagnostic cementing the We show our and acquisition are for in to value prostate menu and that is continue trajectory, pathway diligence of our thesis offering of our most cancer. of realized been the comprehensive the this

unnecessary side, is to the Select associated negative liquid-based On value, our after elevated and potentially risk XX% test predictive can patients. mdx PSA utilized deliver and avoiding biopsies

with Resolve a also organisms, profile UTI highly multiplex present drug right more of is importantly, present pathogens bug. clinicians, that whom cases to of effectively test and a recurrent mdx DNA additional We provides urine-based test can for consistent transparency that annually, XX again, growth It a of and broad susceptibility getting Our provides of and XX% view business. comprehensive this lead complex for the a right the million urology. is, treating our granular our to across and a infections to believe

quarter's In addition, reflects as that comp and understanding of quarter both execution. value as QX growth of proposition, revenue believe the we this unit business, well and sales team's year our last was for strongest over our customer the

growth covered provides the test Our by guidelines. NCCN drivers and our menu in multiple of with included core our cancer Medicare technology prostate

is million the we for the line closing In of on growth, financial of year. moment, well as review greater provided to million than guidance our to $XX it this menu for results will we first, comments our the our expanded for view and Ron? provide year-over-year sustainable but $XX brief goal. forward, our new over a beginning operating view as me $XX execution to and So a represents as at recently from to QX. considerable raised I serve revenue as a million progress $XX This the XXXX long-term XX% which have that Ron guidance initial basis made the million, top some turn call let

Ron Kalfus

increased very by quarter XXXX, million of million To a XX, the Revenues on second performance for follow robust report $XX.X quarter ended $XX.X Mike. for of to XX% quarter remarks, you, the are XXXX. to Mike's Thank first second in strong we pleased June XXXX. versus the

and generating this penetration of was our from market. and U.S. expansion testament which of billion of organic addressable we of our the our delivered sales organization, $X without sales line tests full greater growth market reflects are the leverage into is channel a to All

from XXXX our not be our the to year. Revenue stated we quarter, revenue. It XX% revenues tissue-based of of recently second approximately contribute did test contribute our expect QX to for half that should second hereditary the our begin previously, test in it made the the to noted and as up introduced germline to growth

below Moving the line. revenue

second margins X%, Operating Mike. Gross compared reduction my $XX.X now for margins million line results, million, XXXX XXXX, call gross to for compared quarter quarter Our XX.X% $X.X to quarter brief discipline. equivalents overview the the growth, second gross of of second back were million by of $XX.X continued was million Cash the of improved an driven XXXX, XXXX, cash the XX, compared million. This and for for XX% of concludes was the quarter representing June second to for profit turn top operating will of second were a XXXX. and XX% of and the for loss of of as quarter quarter as increase I second $X.X to XXXX. the as the $XX

Michael McGarrity

Thanks, Ron.

company quarter diagnostics from to breadth of strength significant positioning in of include the Our and for positive growth. with offering, we XX% underlying precision are incomparable health course, that for tests, menu relationships second precision have diagnostics care our the technology, business the that the opportunity factors factors recognized of growth for reimbursement multiple long-term markets. driving our our of top the speaks our the line extraordinary our network These growth revenue providers, end built and of expanded and

to on is friends sample family in and if every the is and you including mission that cancer, being family menu navigated prostate for want on of clear better carry adoption patients, informed side of that Each our What a all pass other the and our and that have the receive. accelerating, prostate and custom confounding we you to only decisions. believe personalized and year, both make comment take the long-term more are technology enabling we and high-growth full our to patients is is stop. their responsibility effectively them mind, and That growing that built inside positioned diagnostics Our these of change potential has value member there trends for test. fundamentally advantage is number clinicians to sustainable and With front-to-back, precision the we always, stakeholders, been will family and up diagnosis be our in a is a as patient complex payers or shareholders. of customers, menu to market. I of of provide a treatment pathway, cancer again help uncommonly patients. great urology worked we And we physicians of deal is friend

and turn to in now thank of So the interest you questions. Paul for support MDxHealth, your and call over for back I'll

Operator

first [Operator with question from Brackmann Instructions] Our Blair. William Andrew is

Andrew Brackmann

the seeing sort back compliance about of in are furthering of Maybe sort things. you of of do this 'XX? you about of here, of nice But in account the you just And towards seeing I What can of that what the liquid into both side business of half this obviously to overall drivers talk start sides pickups the you're level? on sort how along are and volume tissue some on terms the guess, in of -- think menu? year maybe sort and the the

Michael McGarrity

more our strong showing pathology, influence, thanks, and a are in our believe of embracing we use It I engagement the the and really Yes, you a our this really seeing our ago, feel access, lot that right? having then. is and becomes our is things. we I Andrew. urology. it trying sustainable. pathway, One, Because it term reps previously becoming say material but up if advanced number a Well, network with would as where right? in think urology was would -- what's tests I our and our that two compliance follow-up. of customers numbers base, our of And We've is as we years relationships, really change, pathway to what were driven was to pathology probably note docs we customer a

And serve group multiple practices. some of these pathology urology groups

futures, limited that the Preserving all biopsy tissue and for that candidly. that is difference, right? pathologists, confident the a Test. really ways, made And GPS confirming finite the biopsy, GPS X% I of the generating pointed both deal a tissue real the by but leverage and from characteristics of big that the very urology understanding have has we're not right? a understanding the And the which and I of So of the pathology of prostate. limitations tissue the less confirmed think from misread value of by that it's engagement a pathology think than pathologists, samples the there. And It's sampling and between I we're some to both of is they requirement GPS important

So we're it pathology. When a it from in why compelling of sales a kind together has our you strong hold team with seeing coming urology to both holds ways, this have all continuing. got building -- strong rate be driver that see growth a really we and both

Andrew Brackmann

the of And side on things. Perfect. pricing maybe then just

out revenue You coverage left us to just for even cycle market But decisions ASPs move obviously much higher can portfolio, access around maybe color little you more how you your called a that efforts market and the is access room from give management? further do improved bit just be or and there. think

Michael McGarrity

and to to -- network revenue we but with both, GPS, have, And a room, coverage. then ability get cycle there So difference. right? even well often with Our And go we a broader fact, So we our lot our ASP we private management's have coverage and Medicare if made has policies. out of associated Yes, have both, Andrew, payer drive -- coverage right? they decision, big we've our to the rates room Confirm compliance contracts as as we'll for not seen right? and a medical of in commercial it's they're

that payer. there payers, coverage be can shows of by to the in certain even So X-step up acceleration by a process ASP and the

a rate becomes and when in payer, rate it policy, get a that more make favorable. So we contract then we

there. room each have we're So of our it tests. across we we seeing And believe

of but team, managed sales So levers speak value all team, the our are when working. care the the to I also

Operator

Our is next with from question Mark Massaro BTIG.

Vidyun Bais

have guess I different the just while. This any Can just of been little give I quarter? color a had. the for you resolve us strength we buckets volumes, bit qualitative on on Mark. us understand is particular, for relative areas for that the breakout volume in beating than in Vidyun a

you if had curious just there. call to anything So out

Michael McGarrity

when good But Yes, we for so visibility way unit of couple it's visibility. that clearly is test, Vidyun, is look to from reasons. and tissue liquid-based into for, builds, would discussed, a Test the revenue materially So it's feel we versus which menu this driven right? at the move better provide by really our gives we things. One different, think base the pricing market like probably you competitive we've you by more better of

our as growth unit QX the over rate, to again, of far comp QX I As would last point year.

growth think our these of the very are sustainable we rates So very, acceleration across menu. revenue and

rates the Resolve. higher are correspondingly significantly So for GPS Confirm Select from our a perspective, ASPs and and Medicare tissue than and

are we of our So the lot in those continued Resolve. each part seeing we have of menu most markets. growth And across for room a in

as up how which that to our So purposes guidance perspective. comparison better a I detail gives confident this revenue importantly, from we've is uncommon, and forward better our just menu as expanded for think somewhat we're forward in builds go contributes it, on visibility we reported and view the as

Vidyun Bais

margins gross assume for well one a it to on is the Okay. little margin? nitpicky, by call gross test follow-up. mix, other I Perfect. be was has a as bigger that but would down Understood. any just bit out as This drop driven just to And it quarter didn't variables it Thanks revenue-wise, but the just the historically. seem the a but color.

Michael McGarrity

mix other mix the far comes No variables. again expanded as only menus relevant and the mix gross also becomes its as mix margin, not the Strictly quarter-by-quarter but timing the payer as our and that across. more of

by menu material there. and So mix quarter, a change permutation it's of no but expanded payer

Operator

with Vranken KBC Our Securities. is Thomas from next question

Thomas Vranken

growth Maybe nice side. two the my from rates on Congrats again. questions

a also bit back at that testing let's ago needed maybe next is need of pick couple you additional as be are What testing? to stand regards first opportunities has to the additional current I give that outlook one to a insight and HX? And rest expand that and reach contribution year your of the more secondly, the with whether you that revenue of The a months you exactly to year into, up then comment looking taken made us to is what could where or opportunities? steps of integration the on germline are wanted to the evaluating with added, the potentially the given test with fact been adding or menu, regards now that say,

Michael McGarrity

engage to to way we germline, these confirm where and and organization Thanks, we communicated, and twofold. is which want far in launch, Thomas. able a really new as the roll to our Yes, opportunities as that's take some the out. to diligence we limited experience a limited be sales launch I get with our

that So we're in QX. phase now in

We have samples. received

with to of mix you quarter know, and Even about year. historical some did Thomas, of same payments. we with get history Medicare, a also as payer We like the last coverage history thing Select get, of

fact to then come with forward. we, But And sure, offering. second the Resolve, right? All it whether we So fit menu from contributes came feel unlike I point or and able again, would and like the how better the people overall field, concept, our the customers, that from year again, to visibility that. in be begin of as reps customers, good our this to our it like example our that's us good be a not to the ideas give to revenue for probably contribution we'll report to you a in of to half view

we process As I'll opportunities. I've have right? growth provide far a question, before, as there, growth detail, think the them, second As run I I'm the here. part So we I of mean careful your strategy commented but right?

for and take to always I that that with our consequence our looking more clinician, where to our inbound. of today used and last exercise out looking started We And of if candidly the the base to having I've someone engage from a to to think these sort opportunities accomplished dashboard partnership. I'll on where side haven't, we okay recent us any opportunities. But our years, can don't where and and that in customer our the but make our [indiscernible] think communicated even evaluate, we direction practitioner menu market of there we Board It's of we current process we the opportunities. Both outbound opinion as saw competitively X And not is that very to partnership miss before have group, has I an clearly and in rigorous comment supporting our influence something. our distribution relationship unintended Segal. process you out also diligence our market we but already from who or anything build channel careful think leaders, of with, offering key flipped the the having team an see strategic it what's made or like we're an the we say sure interesting. and more always credibility one assumption, focused our have it's for over where but are strength But that Sandy on somebody but addition be the with and new market that is you be, beyond they goes, for and only I and our would make marketing that and and headed. access you'd

look questions, there. And think different X had where that's the different you we X assumption. that our X your answers now, as I Tom. that does reasonable Hopefully, menu assumption a if setup we generating So prior like years make our test will years very it rather, from

Operator

Our Piper Bednar next question Sandler. Jason from with is

Jason Bednar

hear you okay? me Can

Michael McGarrity

Jason. Yes,

Jason Bednar

Great.

volume to very first to want to in the well wanted second your ask things with across I kind background of volumes if front the could the And quarter, here that industry? And question, informs sorry back weakening just of or and you just of the question. any the two in have half. noise. at half see to quarter? And Obviously doing the remind both just just are second if during testing year. the pretty a there's respect normal here, So ask any view then wanted up us to the or we're on across I'll just stable where questions. activity how strengthening ask pace and getting separate But for

operations, expect half Now that GPS we there the second consolidated year? of fully that can efficiency in benefits the we to see are the

Michael McGarrity

part second the on comment I'll Yes. Jason. first. Thanks,

Exact GPS, So we obviously, for modeled the running us. test was the

were for it's each believe with go we some to as solve other associated our the that -- there with that. economics test. they live We So staffed laboratory GPS

vacations, So material we for a any the sustainable. unfavorable year, the as P&L. And yes, QX any cautious guess, with seasonality QX wild second little with not favorable post mean I regard or any don't I in but even to material from change from pandemic perspective, even absent more, probably far perspective. the say, QX would a patient impact of always I or half as the would to staffing see change bit in it our of you without seasonality we little card. growth view as a view is expect a very for material trajectory downturn with I a

message that's we're So delivering. the

that a reflected guidance or that very, way. our sustainable drive XX% I comment it's we internally, believe growth made the think revenue our we in greater in that very I view can and

Operator

are concludes further today's at questions time. call. There conference no this This

at your lines You participation. for time. your Thank this you may disconnect

MDxHealth (MDXH) 21 Aug 242024 Q2 Earnings call transcript