Hello, everyone. Thank you for joining us today. My name is Zach Conte. I'm with JPMorgan's Healthcare Investment Banking team. It is my pleasure to introduce NeoGenomics. They'll be presenting. We're going to have a short presentation followed by a short Q&A, and I'll hand it over to CEO Tony Zook.
Ready to begin? Welcome, everyone, and thank you very much for joining us here today to hear a little bit more about what's happening at NeoGenomics. With me today is Jeff Sherman, our CFO, and Warren Stone, our Chief Operating Officer. What I'd like to share at the beginning, at Neo, I think we have a mission that drives our people to come to work each and every day with a degree of passion that I haven't seen across many organizations. We're a team of over 2,500 strong. We show up every day with this personal connection to cancer, determined to make it better for those who are currently in the fight, because the truth is, essentially everybody in this room will have a personal connection with cancer at some point in your life.
We can make a significant impact on patients' lives when they're going through this very tough and trying time. We take that responsibility very seriously. We truly appreciate that behind every test is a real patient going through a real challenge. For us, we take the pride in being able to give them and their physician the information they need to plan the right course moving forward. Now, before I go any further, the session will be recorded. It'll be available on our investors' portion of our website. I'll start with the Safe Harbor. It's available on the investors' portion of our website if you'd like to read through it, but I'll be making forward-looking statements today. Actual results could differ materially from the forward-looking statements.
We're all aware of that, which are subject to risks and the uncertainties discussed in our SEC filings, which are posted on our website as well. So let's take a look first at Neo very broadly, and then we'll drill down further. First and foremost, what do you need to know? We are a pure play oncology, diagnostics, provider, and lab. Cancer testing, it's our sole focus. It's what we do. And as a result, we're able to deliver a best-in-class customer experience. We've earned a market leadership position in HEME, which creates enhanced testing demand as pathologists and oncologists are looking to consolidate the number of labs that they work with. We focus exclusively in the community setting, where approximately 80% of patients are treated because patients want to remain close to their personal support structures.
We do have a comprehensive test menu spanning the cancer care continuum from diagnosis through to MRD, which we believe makes us a partner of choice among hospitals and community practices driven by operational simplicity that this can bring them. Our offerings across the continuum are evolving as we are now poised to enter the $20 billion-plus MRD market with RaDaR-ST. And we have a strong financial profile that supports our growth initiatives. We've delivered double-digit revenue growth and nine consecutive quarters of positive adjusted EBITDA through Q3 of 2025. So why do we focus exclusively in oncology? Well, look around the room. This is a startling statistic, but one that we should all be aware of. One in two men, one in three women are expected to develop cancer in their lifetime. Think about that.
The good news is that with improved diagnostic capabilities, testing and therapy selection, recurrence monitoring, people are living longer than ever before with their diagnosis, and even more people are being cured. The market is highly relevant. It's attractive and unfortunately, because of this statistic, it's growing. Now, within the market, when you think about oncology testing, you might think of the big NCI-designated cancer centers, things like Memorial Sloan Kettering, M.D. Anderson, and for those of us who live in big cities, this might be an option for you to be able to access those types of centers for your treatment, but really, 80% of cancer treatment happens in the community. Why? Because patients choose to be treated near their homes. They're closer to their support system, cutting down on their commuting time, easily able to commute with their providers.
It's because of this preference to be treated in the community that we believe we're uniquely positioned to win in the oncology diagnostic segment. Our ambition at Neo is to enable physicians who practice in the community to deliver NCI-level care by providing exceptional diagnostic testing and services right where they practice. Now, historically, our market and our business has been focused in the diagnostic testing segment. This is where the breadth of our test menu has been, and it serves us very, very well. Despite the high penetration, we continue to grow market share in all applicable modalities within diagnostics. But to further accelerate growth, we're leveraging our position in diagnosis to penetrate and win in therapy selection and NGS segments. That's estimated to be about a $13 billion market, which is only about 35% penetrated.
So there continues to be ample runway for where NGS can grow and our products as a result. And this year, we're entering the $20 billion-plus MRD market with our clinical launch of RaDaR-ST, which we're going to talk about just a little bit later on. We're starting to see this MRD market evolve and the adoption ramp continue to grow. But most of our growth in 2026 will continue to come from our penetration into therapy selection. Now, big picture, cancer prevalence is on the rise. The market's massive and growing. That's been established. So what do we, NeoGenomics, have to do to deliver long-term sustainable growth? We have three strategic pillars for success. The first, to leverage our leadership position in hematology diagnostics to expand into the solid tumor therapy selection and MRD markets.
Second, we want to continue to evolve to meet the needs of our pathologists and oncologists in the community setting because, as I said earlier, this is where 80% of patients are going to be treated, and third, we will be making targeted investments to drive top-line growth and margin expansion, so let's dive into the first pillar just a little bit more. How do we leverage our leadership position in HEME? Now, before becoming CEO, I was on the board for Neo for a few years, and we always talked about this leadership position in HEME, but it wasn't until I joined as CEO and spent time in the field that I really began to appreciate how strong this relationship has been over years because we grew up in the community setting with community hospitals and pathologists, and it becomes a point of leverage for us moving forward.
From a market share perspective, our labs account for over 25% of Heme testing across diagnostics and therapy selection, 25%. We like to say we grew up in hospitals, which is why we have these strong established relationships and connections with hospital pathologists and oncologists. Today, we have over 4,000 ordering accounts. And year over year, we saw 15% growth in the number of physicians ordering five or more Neo tests. We estimate that approximately 40% of all active pathologists and oncologists have ordered five or more tests of Neo’s. So while we're proud of that reach, it still means that over half of practicing providers are still available to us to bring over to the Neo platform. Now, to further strengthen our position in Heme, we've launched the PanTracer family for therapy selection.
This portfolio is designed for solid and liquid to work together, empowering oncologists with actionable genomic insights for confident, real-time treatment decisions. Tests can be ordered independently or as complementary tests based on a patient's unique needs. But most importantly, from a business perspective, our new liquid biopsy test fills a gap in our portfolio that providers asked for, allowing them to further consolidate their vendors. I think the most impressive thing about PanTracer tissue, the first test launched in the family, is the rapid growth in volumes. You'll see we doubled the volume from 2023 to 2024, and then again from 2024 to 2025 while continuing to grow AUP. The success of the PanTracer tissue demonstrates our ability to pull higher-value tests through the community channel. Now, we're preparing to equip our team with another tool in their bag.
Following a favorable legal outcome, giving us freedom to operate, we're launching RaDaR-ST later this quarter, tapping into a $20 billion-plus and rapidly growing MRD market. RaDaR-ST has two indications approved for MolDX reimbursement, and we have submitted two additional indications. We believe approval for the additional indications, as you can see here, will double the number of patients eligible for RaDaR-ST monitoring. At the same time, we're working our whole genome next-generation MRD assay. The IP for next-gen is entirely separate from RaDaR-ST. We're working on product development now, and we believe we'll be generating data and a MolDX submission slated for next year and a potential clinical launch as early as 2028. Not only do we focus in oncology, as I said, we focus in the community setting. To continue to expand our reach, we're evolving to meet the needs of pathologists and oncologists in this unique setting.
We believe our offerings are appealing to the community oncologists as they choose to partner with partners that remove friction and enable confident treatment decisions under time, economic, and operational challenges. We offer ease of ordering, especially as we ramp our EMR integrations, including Epic Aura, easy-to-interpret test reports, competitive turnaround times, easy-to-access medical expertise through our professional component offerings, and our broad test menu spanning much of the cancer care continuum. We have a steadfast focus on our offerings and commitment to an exceptional customer experience. Our Net Promoter Score of 78 reflects strong physician satisfaction, and we're always aiming to improve. At the end of 2024 and moving into 2025, we invested in our commercial organization, specifically our oncology sales specialists, or OSSs. We added 35 people to this group who really target the community oncologists.
And as these individuals got up to speed, we're seeing a quick uptake in NGS testing, accounting for a larger portion of our total clinical revenue as we increase our reach and frequency. Now, the penetration does speak to the strength of our commercial channel as well. We launched five NGS products in the last two years. And even though we were a bit late to market than some of our peers with these products, we've still seen very strong uptake. PanTracer tissue, highlighted earlier, was one of the five products. So I think this speaks to our breadth and strength of our menu and further to our ability to capture market share when we introduce new products. We expect to add additional selling resources in 2026 to increase our reach and frequency and to support the additional indications for RaDaR-ST that I highlighted earlier before.
Simultaneously, we're implementing tools and solutions we believe will enhance the productivity of the entire sales organization. Now, in parallel with our product and service offerings to grow revenue, we are making targeted investments to drive top-line growth and margin expansion. I think there is a very strong financial discipline embedded throughout the organization. We're going to build on that, and we see plenty of opportunities for us to continue to reduce cost, grow revenue, and improve margins. These are inherent in our operating leverage in our business today with a fixed cost footprint. Our only true linear cost is supplies. We have ample capacity throughout our labs for additional volume growth. With our five new products, we have the opportunity now, rather than grow volumes at any cost, to say, "Let's grow the right volumes." We don't need to be dependent on high-volume, low-value tests.
With our penetration of NGS now approaching a third of our portfolio and RaDaR-MRD testing coming online, we have the ability to be much more selective because we're seeing these really strong growth rates. We believe our 22% NGS revenue growth in 2025, even without PanTracer liquid biopsy, indicates this should be a growth driver for us for the foreseeable future. We're also getting price increases, which for our tests and seeing RCM initiatives take hold that help us to get paid for the work that we do. And that's, of course, 100% accretive to revenue, gross margin, and adjusted EBITDA. And then we have the operating efficiencies that we're working on, like our LIMS improvement, which will allow us to have one common LIMS and retiring up to eight legacy systems.
There's opportunities for us to do the same thing in a number of different areas through automation and digital pathology. We're in the early stages of capitalizing on the LIMS integration and investing in automation. Expect to see these benefits last for several years. So in summary, there's still ample opportunity for Neo to deliver accelerated revenue growth, improve gross margins, and reduce our operating costs. So let me summarize for you what we see as our core growth drivers. Our North Star will be continued execution on above-market NGS growth. We see this market growing in the mid-teens, and we're working to outpace market growth. We expect to do this through securing reimbursement for and ramping volume for PanTracer liquid biopsy. We also plan to launch RaDaR-ST later this quarter, which will enable us to gain share in the clinical MRD market.
We'll work to expand on our two approved RaDaR-ST indications with additional submissions to MolDX. We also plan to grow our non-NGS modalities as well. As a pure-play oncology lab, we're working to see FISH, flow, cyto, IHC, all these core testing modalities continue to grow at least at market rate. Following the investments we've made in our sales force, we're going to leverage our new OSSs to further penetrate the community oncology audience segment with a focus on NGS products. We plan to use our acquisition of Pathline to increase our penetration in the northeast region and drive share and pull through addition high-value NGS testing. Last, we'll continue our RCM initiatives to capture price benefits and make sure we're getting paid for the work that we do. Now, yesterday, at the start of this conference, we shared our preliminary Q4 and full year 2025 revenue.
I'm really proud of the work that our team has done to execute on our strategy and to deliver these results. Preliminary Q4 revenue is in the range of approximately $190 million, representing 11% growth year over year, and preliminary full year 2025 revenue in the range of $727 million, representing 10% growth. So to wrap it up, we believe our unwavering focus on delivering a superior customer experience in the community setting is resonating in the marketplace. We continue to expand our menu of tests. Community oncologists and pathologists will continue to view us as a partner of choice for their cancer testing and send out consolidation needs. We do remain committed to innovation and operational excellence, which we believe will drive sustainable, profitable growth for our company and improve outcomes for patients.
So with that, I thank you for your continued interest in NeoGenomics and turn it over for questions. Thank you for the powerful presentation. It's great to hear you guys had a great year and a lot of exciting news over the past year. First, I'd like to just kind of hit off on where you summarized at the end. You showed you had tremendous growth in Q4 and also 2025 overall. Do you see this continuing to drive in Q1 and the foreseeable future?
Yeah, we do see a lot of the growth drivers that we had in 2025 continue to be the same growth drivers in 2026 with a couple of additions. First and foremost, we do believe that we can continue to drive above-market growth with NGS. That is pivotal to our success. We think the introduction of PanTracer liquid biopsy will enable that. We see that as a ramp through the course of 2026. Obviously, the introduction of RaDaR-ST into the MRD segment gives us another solid growth driver. That'll be a build through 26, and that'll really become more evident in 27 and 28 as you start to see that grow. I had mentioned before the strategic acquisition of a lab up in New Jersey, Pathline.
We always said that that would be an opportunity for us to grow our share and our presence in the northeast because we could then offer our customers the response they want on their rapid tests while at the same time getting operational efficiencies for NGS pull-through through Fort Myers and our AV lab. So we continue to see that as a driver. The maturation of our sales force. Now we'll get the full benefit of a year of them. So we think they'll continue to enable that growth that we've seen across the portfolio. And then the introduction of new OSSs, I think, will better prepare us for future launches of indications within RaDaR-ST. And then the outstanding work that Jeff's team continues to do with RCM and price. We see all of these still as levers and growth drivers for us in 2026.
So we feel well-positioned as we sit here today, and we see the opportunity to really perform well in 2026.
Perfect. And then kind of touching back on that for drivers in 25, would you say that it was more a volume or AUP that kind of helped drive the growth in 2025?
Yeah, I would say it was actually both. So I would say we had very strong volume growth, both on reported volume and on the same store basis throughout 2025. We also have continued to see our AUPs increasing. And so as we move more into NGS, we've seen good improvement on a sequential basis in AUPs throughout the year, continuing to focus on the RCM initiatives as well as helping to drive AUP. So it's really, I think, a combination of the organic growth, incremental volume from Pathline, and then some of the RCM initiatives were all helping to drive growth throughout the year.
Perfect. And then you kind of touched on NGS right there. You said, I think it was about a third of your revenue. How do you see that going in the future?
Up. We said before that we want to leverage our position in diagnostics, right? That is where our core strength comes from, and that heritage of a strong presence in Heme enables us to really serve the community oncology audience as we build and add to the portfolio. I think that has afforded us this really nice growth where we have seen these five products continue to grow and now representing about 20%-25% of our business with just those five and NGS now more of a third of our clinical revenue. And so when we look to what we believe we can do with above-market growth in NGS, you marry that with the addition of an outstanding product like PanTracer LBx. We think that that is a growth driver for the foreseeable future for us.
And so we would expect our penetration and ultimately the result being a higher percentage of our portfolio coming from NGS. And then you throw in MRD. We'll see that constant shift. And that is going to benefit us in a number of ways from AUP to margins to operational efficiencies that Warren and his team can drive throughout the labs.
Yeah, we also noted on our total addressable market slide that the penetration rates are still relatively low. So a penetration rate in the mid-30s for therapy selection and less than 10% for MRD. So I think just as the penetration rates increase, we're going to capture market share. Adding new products will allow us to capture market share. And I think our whole commercial strategy with our breadth of menu is going to allow us to continue to drive market share as well.
I think maybe just maybe lost a bit of points on that. It also drives a significant amount of operational simplicity because those five products, which 20%-25% of revenue represents a significantly smaller volume base. So that just drives simplicity from an operational perspective. And obviously, simplicity drives increased gross margins and profits.
And then you had mentioned exciting launches upcoming in the new year. I believe it was Q1 for RaDaR. What else needs to be done ahead of that launch? And I guess, is there anything that you want to highlight before that?
I'll let Warren color in the lines. I think that for us, penetration of the MRD market was another imperative for us. We saw that opportunity and believed that it would provide a market for long-term sustainable growth. Obviously, with RaDaR-ST coming in, we have already introduced it within the pharma segment of our business. We're now preparing for the launch in the clinical side. I think what Warren's team has been doing is preparing for making sure that this will be seamless for customers, that we can, in fact, handle the volume in a very seamless way as we move forward. Obviously, all the training and capability work that happens behind the scenes, preparing for a launch meeting with the sales force. There's been no lack of work that Warren's team has been building.
And I think something else that he's done extremely well over the last few years, we've created this framework that we refer to as operational excellence. And it wasn't evident at Neo in the past, where now we have very clear direction, very clear metrics of what we're looking for, everything from the product's target product profile to how it'll be positioned to the launch metrics and execution to what Warren and his team expect from which decile to customers. So there's been a tremendous amount going on, and Warren could add additional flavor to that.
So I'm not sure I can add too much to that. I think you covered a lot of the bases. I will say that I joined NeoGenomics 2022, and the launch of RaDaR was something I was super excited about. And obviously, it's taken us a little longer to get you for various reasons, but it represents a material opportunity for NeoGenomics in 2026 and beyond, not only with the two indications that we will launch within head and neck, HPV negative and a subset of breast, but also in terms of the additional indications that we've already submitted to MolDX. And hopefully, we'll see approval towards the back end of this year too. I think it's a real inflection point for NeoGenomics.
Would you say that it's more of the revenue is going to come from clinical or from pharma?
Yeah, I think in 2026, I think there'll be both clinical and pharma revenue and probably in a similar type of range as the clinical volume starts to ramp. As we get to 2027 and 2028, we clearly think it's going to be much more clinically driven.
Got it. Without a doubt.
There was a successful PanTracer launch. Do you see that, I guess, liquid biopsy will follow this route, or do you have any color on that?
I think we're taking a very similar playbook in terms of how we've launched PanTracer liquid. I think the first thing I'd say is we actually introduced PanTracer liquid largely because a lot of the customers that used the tissue assay actually asked for the assay. They felt it was a meaningful gap within our portfolio, within the community, as they saw the utility for liquid starting to really manifest in cases where there was insufficient sample and no sample on the solid tumor cancer side of things. So that was really one of the key drivers as to why we launched the product. We followed a very similar playbook. We feel we have got a very competitive product with TMB and MSI, and early indications have been very positive in terms of how both existing customers and how new customers actually adopted the assay.
One of the reasons for showing the sort of the trend from a PanTracer tissue perspective on the earlier slide that Shani showed was to give you some kind of an indication in terms of how we would think that the liquid assay would ramp as well.
I think maybe the last word on the concordance, perhaps.
Yeah, maybe two comments that I'd make is, interestingly enough, we have seen the category as a PanTracer family, and so it's our solution for solid tumor therapy selection. We've seen the category as a whole growth. Since we've launched liquid, we've seen an inflection point in terms of the growth rates of our solid tumor tissue as well, maybe showing the benefits of the portfolio effect and a lot of very, very positive feedback, certainly in lung applications where it's been used concurrently and strong concordance across the liquid and the solid tumor assay because it has the same backbone.
And then kind of taking a step back from a more macro perspective, do you feel like pharma will rebound in the upcoming year? How do you feel like the overall market will be going forward?
Yeah, when we gave our guide in 2025, it was driven in large part when we had to give the revised guide on the erosion rate that we had seen in our pharma business. While it represents a relatively small portion, nonetheless, it was not insignificant, and it was a rapid erosion more than we had anticipated, and it masks in many ways the outstanding performance on the clinical side. Once again, we'll see that our clinical business, mid-teen growth, and it doesn't get the attention because we focus so much on that, and so we purposely saw this, and we said that's why we had to lower, and that's why we set the expectation of around 10%. I believe that some of the macroeconomic issues, they're starting to get a little bit better, right?
And there's not quite the same severity of headwinds that we had seen in the past. But nonetheless, there's still relatively long selling cycles here. And so I think the prudent, more conservative position would be that we should expect some continued erosion on the pharma side, perhaps not as significant as we saw in 2025, but it'll still be there. And that means why we still look at this as kind of a 10% kind of growth story in the shorter term. And if, in fact, we see stabilization of pharma in large part to now the introduction of RaDaR-ST, that could represent an upside for us. And so we want to speak with confidence. And so when we give our guide for 2026 in February, we'll make sure to call these areas out.
The investment community will be very aware of how we see our core assumptions and what we see as upside opportunities versus risk to the business.
Understood. And then could you touch on your Adaptive partnership? How's that been going so far?
Yeah, I'll go high, and then Warren can get into more detail. One of the things that I've always believed that this is a tremendous strategic partnership for us. We see great value in being able to represent an outstanding heme MRD product. We often talk about the breadth of our portfolio and its ability to span the continuum of care. When we can represent an outstanding product like that from Adaptive, there is a halo effect to how customers see us and the offerings we make available. It also means that over time, our suite of products within MRD continues to grow. So we'll be in the unique position of having flow MRD. We have heme MRD with Adaptive. We'll have RaDaR-ST. We'll have our next generation ultra-sensitive MRD. And all of these things become of great value to us.
But one of the things we wanted to do is make sure we did it right, right? It had to work for customers. It had to work for Adaptive. It had to work for Neo. And that's what Warren and his team have been working on through these pilots. So perhaps he can speak in more detail to that.
Yeah, I think both organizations have been laser-focused on the customer experience here, sort of understanding the importance of that from a success perspective. And as a result, we've spent the better part of the second half of last year working through pilots, et cetera, initiated a number of them, both in terms of portal and paper-based requisition forms, but also through bidirectional interfaces. And we started to see some very positive traction. I think from a NeoGenomics perspective, one of the things that we look at other than sort of feedback from customers is the portfolio effect, and particularly within Compass, because that's the product that we're linking because of the commonality from a sample type being bone marrow and has massive patient benefits in that they only have to be subjected to a single sample extraction versus two, one for diagnosis and one for ClonoSEQ.
Anyway, that's been a massive improvement. We have seen in quarter four of 2025, we have seen improvements in sort of growth rates of Compass. There's some good leading indicators, particularly within customers that we've run the pilot with.
Perfect and then, kind of touching one question on financials, could you talk about your strategy for your 2028 convertible notes?
Yeah, so clearly they're due in January of 2028. So we're really focused on having a plan in place that we can execute when we think the market timing is appropriate in 2026. So we finished the third quarter with over $160 million of cash. We expect to be producing positive free cash flow in 2026. So we think we'll be well prepared to deal with the convert throughout 2026 as we look to have a plan in place with that we can execute on when we think the timing is right for that 2028 maturity date.
It's clearly top of mind for us. It's top of mind for the board as well. And so we will have the plan, and as Jeff said, we will be ready to execute when we think the time is right.
Yeah. Any questions from the crowd? I guess on that, is there any closing words that you guys have to say? This has been a very powerful presentation and a lot of great news for NeoGenomics.
Yeah, I would say for us, again, I mentioned it earlier, but our strategic levers, for us, we're very focused on what we need to achieve, and that, first and foremost, we need to leverage our strong position in heme to enable even additional growth in therapy selection and MRD. Those markets are strategic imperatives for us. I could tell you that every day we wake up with the ambition of winning the customer experience each and every day. Now, we don't take that lightly. We know that you earn that confidence from your customers every day, and so we tend to look at the world through the eyes of a practicing community oncologist. And what can we do to take friction out of the system, make life easier for them, everything from ordering to reports, whatever it takes for us to continue to win?
Because that, for us, is where we derive our competitive stickiness. It's a combination of the portfolio and that customer experience. And that becomes watchword number one for us. And we are in a position now, I think because of all the hard work that the team has done in the past, we're well positioned now to make selective investments where we can drive additional growth. And so getting that balance right, that we continue our financial discipline, but don't miss the opportunity that's ahead of us for additional indication growth, for example, with RaDaR-ST or for next-gen MRD. So selective, targeted investments to drive additional growth and the sales force expansion as well. So we're excited by what's ahead of us. We're looking forward to it, and we appreciate the time.
Thank you.