Personalis (PSNL) Q4 2025 Earnings Call Transcript

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DATE

Thursday, Feb. 26, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer and President — Christopher M. Hall
• Chief Financial and Chief Operating Officer — Aaron L. Tachibana
• Chief Medical Officer and EVP, R&D — Richard Chen
• Moderator — Caroline V. Corner

TAKEAWAYS

• Clinical volume -- Six thousand one hundred eighty-three clinical tests delivered in the fourth quarter, representing a 41% sequential increase and 329% year-over-year growth.
• Full year clinical volume -- Over 16,000 clinical tests delivered in 2025, a 394% increase from the prior year.
• Revenue -- $17.3 million in the fourth quarter; $69.6 million for the full year, reflecting a transitional shift away from legacy project contracts and offset by a $19.5 million decline in Natera revenue and a $10 million decline in Moderna trial revenue.
• Biopharma MRD revenue -- Grew approximately 239% for the full year to $20 million to $21 million guidance for 2026, as biopharma customers adopted MRD assays for clinical trials.
• Medicare coverage decisions -- Achieved Medicare coverage and favorable pricing for both breast cancer (Q4) and lung cancer (early Q1), with both frameworks supporting ongoing surveillance.
• NeXT Personal test sensitivity -- Capable of detecting around one tumor DNA fragment in one million, confirmed as central to physician adoption and clinical confidence.
• Clinical revenue recognition -- $900,000 in the fourth quarter and $2 million for the year, compared to $200,000 and $800,000, respectively, in the prior year, driven by initial breast cancer surveillance reimbursement.
• Gross margin -- 11% in the fourth quarter and 22.7% for the year, with management indicating this margin compression is intentional and temporary during rapid volume ramp-up ahead of additional reimbursements.
• Operating expenses -- $27.2 million in the fourth quarter ($13.1 million R&D, $14.1 million SG&A); $103.8 million for the year, up from $95.1 million, reflecting higher commercial and R&D outlays for clinical and evidence development.
• Net loss -- $23.8 million in the fourth quarter; $81.3 million for the year, matching 2024 figures despite increased R&D and commercial investments.
• Cash and investments -- $240 million in cash and short-term investments at year-end, with total 2025 cash usage of $74 million and guidance for $100 million cash use in 2026; no material debt.
• 2026 guidance -- Company projects $78 million to $80 million in revenue; clinical volume guidance set at 43,000 to 45,000 tests (about 170% growth), clinical revenue expected at $10 million to $11 million, and gross margin forecasted at 15%--20% with the lowest point in Q1.
• 2026 strategic revenue -- Strategic revenue, defined as clinical and MRD biopharma revenue, expected to rise from $14 million to $30 million--$32 million, approximately 121% growth, largely due to planned quadrupling of clinical volumes.
• Sales strategy -- More than 900 oncologists ordered NeXT Personal in the last quarter; commercial footprint expanded to include over 10 dedicated reps, with plans to double field representatives.
• Volume mix for 2026 -- Of 43,000--45,000 tests projected, approximately 20% breast, 15%--20% lung, 20%--25% IO (immuno-oncology), 20% CRC (colorectal cancer), and 20% other; less than half expected to be reimbursed at current coverage levels.
• Evidence generation -- Participating in more than 35 ongoing studies including landmark work in lung and breast cancer; recent publications validated sensitivity/specificity and median lead timing versus imaging, with further reimbursement submissions anticipated for additional indications such as CRC and neoadjuvant breast cancer.
• Innovation highlight -- Launched real-time variant tracker as an opt-in module for NeXT Personal, enabling dynamic detection of actionable or resistance mutations during surveillance based on user selection.

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RISKS

• Gross margin compression acknowledged as an intentional, near-term outcome linked to unreimbursed clinical volume; margins expected to remain low until new reimbursement decisions convert test volume to revenue.
• Cash usage forecasted to rise to $100 million in 2026 as Personalis invests aggressively for share capture in an expanding MRD market, with no stated timeline for breakeven or profitability.
• Less than half of projected 2026 test volumes are currently reimbursed, exposing Personalis to continued dilution of gross margin and significant uncompensated operational throughput if reimbursement coverage expansions are delayed.
• Total net loss projected to increase to approximately $105 million for 2026 with continued high R&D and commercial spend, as company prioritizes volume and evidence over near-term profitability.

SUMMARY

Personalis (NASDAQ:PSNL) reported fourth quarter and full-year metrics that highlight a sharp reset of its revenue mix toward high-value clinical and MRD biopharma partnerships alongside major reimbursement milestones. Management confirmed Medicare coverage decisions for both breast and lung cancer surveillance, establishing the foundation for exponential clinical volume growth and anticipated broader adoption. The company introduced an opt-in, real-time variant tracker module for NeXT Personal, targeting physician demand for actionable mutation tracking and bolstering product stickiness. A series of major clinical study partnerships, including more than 35 ongoing and recently published studies, reinforce management's focus on rapidly expanding clinical utility evidence as the basis for further market penetration and payer engagement. Guidance for 2026 underscores an acceleration in investment despite increasing operating losses and temporary margin compression as Personalis pursues share capture in the nascent, high-growth MRD testing market.

• "Aaron L. Tachibana said, 'we used about $74 million, and that was in our prepared remarks, Bill. And we expect to use $100 million in 2026.'"
• Richard Chen confirmed, "we have gotten traction now with, you know, what we talked about in the script, 30-plus ongoing studies, and that continues to grow," signaling a deepening evidence pipeline to support reimbursement efforts.
• Product updates such as the opt-in variant tracker are already generating "a lot of excitement" among early physician users, with management anticipating expanded adoption as module demand grows.
• Christopher M. Hall and Aaron L. Tachibana noted, "the guide did not assume IO yet," indicating that forecasted growth may not fully reflect near-term upside from imminent immunotherapy reimbursement coverage.
• Company is doubling its direct sales force and intensifying collaboration with Tempus to sustain both breadth and depth of oncologist engagement as volume targets rise sharply.

INDUSTRY GLOSSARY

• MRD (Minimal Residual Disease): Ultra-sensitive genetic testing used for detecting small amounts of cancer cells remaining after treatment, with implications for both clinical surveillance and drug development.
• NeXT Personal: Personalis’ flagship liquid biopsy MRD test designed for highly sensitive personalized cancer detection and ongoing disease tracking.
• Biopharma MRD revenue (NIBID): Biopharmaceutical revenue tied to biopharma customers using NeXT Personal or related MRD products for clinical trial and research applications.
• MolDX: A program responsible for evaluating molecular diagnostic tests for Medicare coverage determinations.
• IO (Immuno-oncology): Cancer treatments and surveillance related to modulating the immune system, forming a potential new reimbursable category for MRD testing.
• CRC (Colorectal cancer): Clinical indication of colorectal cancer; highlighted as a major focus for test adoption and future reimbursement submission.
• pCR (Pathological complete response): A biomarker indicating absence of detectable cancer after neoadjuvant therapy, benchmarked against MRD assay performance.
• Tempus: Strategic commercial partner providing on-the-ground sales infrastructure for Personalis’ MRD products.

Full Conference Call Transcript

Caroline V. Corner: Thank you, operator. Welcome to Personalis, Inc.’s fourth quarter 2025 earnings call. Joining today’s call are Christopher M. Hall, Chief Executive Officer and President; Aaron L. Tachibana, Chief Financial and Chief Operating Officer; and Richard Chen, Chief Medical Officer and EVP, R&D.

All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements within the meaning of U.S. securities laws, including any statements regarding trends and expectations, our financial performance this year and longer term, cash runway and liquidity position, revenue expectations and timing, size and booking of orders, products, services, technology, expansions of clinical volume, reimbursement goals, the outcome and timing of reimbursement decisions, expectations for existing and future collaboration activities, cost expectations, market size, and our market opportunity and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations.

We encourage you to review our recent filings, including the risk factors described in our most recent filings. Personalis, Inc. undertakes no obligation to update these statements except as required by applicable law. Our press release with our fourth quarter and full year 2025 results is available on our website, personalis.com, under the Investors section at investors.personalis.com, and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today’s call will be available on our website by 5 p.m. Pacific Time today. With that, I would like to turn the call over to Chris. Good afternoon, everyone.

Christopher M. Hall: Thank you for joining us to discuss our fourth quarter and full year 2025 results. As we stand here at the beginning of 2026, I am incredibly proud of the progress our team made over the past year and the momentum that we have today. 2025 was the year we validated our win in MRD strategy. 2026 is the year we expect to scale. Physicians increasingly trust our NeXT Personal test. Our clinical volumes are building, and our strategic road map is being validated by the medical community. For those listening in for the first time, Personalis, Inc. is a leader in MRD testing services, and we are helping patients, partners, and doctors see more in cancer samples.

We operate at the leading edge of MRD sensitivity. Our ultra-sensitive NeXT Personal test is capable of detecting approximately one single fragment of tumor DNA in a million. This is not merely a technical improvement. It is a clinical necessity. This level of sensitivity allows physicians to detect cancer recurrence months ahead of standard imaging and provides them with far greater confidence in a negative result. The clinical market for these types of tests, known as residual disease or MRD tests, is growing rapidly and is expected to mature into a $20-plus billion opportunity. And Personalis, Inc. is exceptionally well positioned to command a significant share of that opportunity.

Beyond clinical testing, we remain a leader in supporting biopharma companies through clinical trials and drug development. Our platforms are used by our partner companies to analyze tumors and identify new biomarkers, serving as the foundation for the next generation of personalized therapies. We are the engine that supports researchers as they explore new treatments and allow physicians to personalize treatment for every cancer patient.

Now turning to our results, the headline of our performance is our explosive clinical growth and our achievement of two Medicare coverage decisions. In the fourth quarter, we delivered 6,183 clinical tests. This represents a 41% sequential growth over 2025, and a 329% increase year over year. Now to put that in context, in 2024, we delivered just 1,441 tests. Our performance this quarter reflects the strong uptake of NeXT Personal in the marketplace. For the full year of 2025, we delivered more than 16,000 clinical tests, growing 394% over 2024. We achieved $17.3 million of revenue in the fourth quarter, in line with our preliminary announcement last month.

Our full year revenue of $69.6 million reflects the transitional period for our top line. As we previously discussed, we have shifted our commercial focus from lower value project work to higher value MRD partnerships, which meant that we experienced a nearly $20 million year over year decline in revenue from Natera, while we set the stage for growth with our MRD engine. The uneven biopharma spending environment we discussed last year has persisted, creating variability in the timing of large project-based translational research. However, it is critical to note that the underlying demand for our strategic MRD offering remains exceptionally strong. We grew our MRD biopharma revenue by nearly 240% over 2024.

We believe we are the partner of choice for biopharma companies who need to “see what others cannot.” And we expect penetration of our MRD testing into biopharma companies to be a growth driver for years to come.

NeXT Personal has the potential to help these partners fail in early clinical trials sooner, succeed in these trials quicker, and enroll the right patients into their studies. Now, innovation is the heartbeat of Personalis, Inc. Just as we have led the way in pioneering ultra-sensitive MRD detection down to one part per million, we recently announced the next evolution of our NeXT Personal MRD test: our real-time variant tracker report. Cancer changes over time, and it can change in reaction to treatment. The real-time variant tracker allows for the detection of mutations targetable with therapy and the identification of resistance mutations during MRD surveillance with NeXT Personal. As an example, in metastatic HR-positive breast cancer patients, the ESR1 gene can acquire mutations over time that cause resistance to the hormone therapy patients may be receiving. Knowing when these mutations happen allows physicians to adjust therapy proactively. The addition of this opt-in report is intended to give clinicians a dynamic window into how a patient’s cancer is evolving in real time.

We announced the early access program for this module for clinical and academic leaders in January. The feedback from early discussions with doctors has been positive, and we believe this provides a powerful new tool for physicians as they seek the best possible outcome for their patients. This new addition to NeXT Personal underlines our continued innovation in MRD and, most importantly, our commitment to innovate for patients.

Looking ahead to 2026, we expect total revenue to be in the range of $78 million to $80 million. However, to understand the velocity of the business, you must look at our strategic growth engines—that is, our clinical revenue and our biopharma MRD revenue. We expect our strategic revenue to grow from $14 million in 2025 to a range of $30 million to $32 million in 2026, which would be roughly 121% growth, driven by the expectation that clinical volumes will quadruple. I will now dig deeper into the three pillars of our win in MRD strategy that are driving us forward. The first pillar is clinical adoption. Now, the numbers speak for themselves.

Last quarter, we had more than 900 oncologists ordering our test, and we are seeing strong retention among those who adopt NeXT Personal. We are scaling our commercial footprint to onboard more oncologists and drive testing volumes. We now have more than 10 dedicated reps in the field working in close coordination with our partner Tempus. In 2025, we expanded our relationship with Tempus to include colorectal cancer, and our commercial efforts are fully aligned to champion the market shift toward ultra-sensitive MRD testing. We are setting our initial 2026 annual volume guidance at 43,000 to 45,000 tests, which would be about 170% growth year over year.

This underscores the tremendous momentum we are seeing and our confidence in our commercial team and our physician partners.

Our second pillar is building clinical evidence and the data we need to support continued positive reimbursement decisions. We made massive strides here in 2025. We submitted three dossiers for coverage to Medicare, backed by industry-leading clinical data. In the fourth quarter, we successfully achieved Medicare coverage for breast cancer with favorable pricing, and just a few weeks ago, we received Medicare coverage for lung cancer. These coverage decisions validate the value of our technology in changing patient lives, and I am proud of our team for these accomplishments. Both reimbursement frameworks are for ongoing cancer surveillance for patients. Our tests can be used at multiple time points along the patient’s cancer journey and across many years.

We currently have an additional dossier under review with MolDX for the use of NeXT Personal to monitor immunotherapy in metastatic cancer patients. Though exact timing remains subject to MolDX review, we remain confident in our data. Our drive toward coverage has been powered by data and the strong performance of our NeXT Personal test. These last several months, we continued to build upon our foundation to transform Personalis, Inc. from a high-growth testing company into a high-margin, reimbursed clinical powerhouse.

The landmark studies with TRACERx, Royal Marsden, and VHIO published in Cell, Annals of Oncology, and Clinical Cancer Research, respectively, are the anchors of our evidence base. The TRACERx lung cancer study is one of the largest, longest, and most rigorous lung cancer MRD studies to date with over 400 patients. In this study, NeXT Personal showed exceptional sensitivity and specificity throughout the patient journey from diagnosis to surveillance, even in lung adenocarcinoma, the most common yet difficult-to-detect subtype. Our Royal Marsden breast cancer study also showed exceptional sensitivity and specificity across HR-positive, HER2-positive, and triple-negative breast cancers with 15-month-plus median lead time ahead of imaging.

The VHIO study across 24 cancer types showed that advanced cancer patients receiving immunotherapy who achieved durable molecular clearance had 100% overall survival. The pan-cancer UCSD iPredict study was just published in NPJ Precision Oncology, and it showed that NeXT Personal identified molecular progression a median of 161 days—over five months—before imaging in late-stage cancer patients receiving immunotherapy. Yale University is leading the CHiP study to demonstrate the utility of Personalis, Inc. in breast cancer. Furthermore, our prospective B-STOR1 trial in triple-negative breast cancer is well underway, having now enrolled more than 200 patients. Overall, we are now involved in 35-plus additional studies that are powering the next generation of evidence, and that number just continues to grow.

In 2026, we are focused on neoadjuvant breast cancer, colorectal cancer, and submitting for coverage there. As a reminder, we presented data earlier from PREDICT and Scandari. Those studies showed the power of NeXT Personal in neoadjuvant breast cancer, and the British Columbia Cancer study showed the power of the technology in colorectal cancer.

The third pillar is leading in the biopharma sector. NIBID, or our NeXT Personal biopharma revenue, grew nearly 240% this past year. Biopharma companies are realizing that to prove the efficacy of their next-generation therapies, they need the most sensitive detection tools available, and this has led to our success in driving their adoption of NeXT Personal. We made tremendous strides this last year with biopharma companies in terms of their adoption of NeXT Personal. As a part of that progress, our business has been evolving toward more prospective work where revenue from a project is spread out over several years, compared with retrospective analysis where an entire study is analyzed in one batch.

In 2026, we expect our biopharma revenue to be in the range of $20 million to $21 million. This growth in our core MRD offering is expected to propel our entire biopharma segment, providing a stable and high-value revenue stream that complements our clinical expansion.

In closing, Personalis, Inc. is a different company than it was just a year ago. We have proven that we can build world-class clinical evidence and win Medicare coverage, and we have proven that our technology is the gold standard for sensitivity. We are starting 2026 with the winds at our backs and the confidence that we are winning in MRD. Changing the way medicine is practiced is never easy, but progress like we have seen over the past year shows our efforts have been worthwhile. I want to thank our employees and collaborators for a great year, and thank our biopharma partners, physician champions, and their patients for trusting us to provide results that truly matter. Thank you.

I will now turn it over to Aaron to dig deeper into our financial results.

Aaron L. Tachibana: Thank you, Chris. I will be discussing our fourth quarter and full year 2025 results and then cover guidance for 2026. Total company revenue was $17.3 million for the fourth quarter of 2025. While this is a modest 3% increase year over year compared with $16.8 million for the same period last year, the headline number masks a positive rotation in the quality of our revenue. We are successfully replacing low-margin and sporadic legacy revenue with high-velocity clinical volume. And for the full year 2025, total company revenue was $69.6 million.

As Chris mentioned, we navigated a planned $19.5 million decline in revenue from Natera during the year and also the conclusion of the Moderna melanoma trial enrollment, which was a $10 million decline from 2024. Despite these headwinds of nearly $29 million, we delivered 239% growth in biopharma MRD revenue over the prior year. We are no longer dependent on a single legacy contract. We are building a diversified and sustainable high-growth engine which is centered around our win in MRD strategy.

Moving to our core revenue, biopharma was $10.9 million in the fourth quarter, compared with $12.2 million for the same period of the prior year. And for the full year 2025, biopharma revenue was $49 million, compared with $51 million for 2024. Both the fourth quarter and the full year declines were due to the expected decrease in the Moderna volume mentioned earlier. For clinical revenue, we recognized $900,000 in the fourth quarter and $2 million for the full year of 2025, compared with $200,000 for the fourth quarter and $800,000 for the full year 2024. The fourth quarter 2025 includes initial breast cancer surveillance revenue, which was covered by Medicare in the fourth quarter.

Now I want to address gross margin directly, as it is a critical indicator of our MRD investment strategy. Gross margin was 11% in the fourth quarter and 22.7% for the full year. It is vital to understand that this margin compression is intentional but temporary. We foresee margin dilution to continue into 2026, with the lowest point expected to be in the first quarter of the year until the time when our third reimbursement coverage—which is expected to be IO—begins to convert to revenue. The margin dynamic is driven by the strong growth in volume of NeXT Personal tests ahead of reimbursement revenue. In the fourth quarter alone, unreimbursed costs diluted margins by approximately 1,900 basis points.

We are securing the oncologists and the volume now, so when coverage decisions like the recent wins in breast and lung cancer come online, that volume run rate begins to convert to higher margin revenue. We expect to realize benefits from investments to gain market share over the next two to three years as our clinical revenue gets to scale.

Operating expenses were $27.2 million in the fourth quarter, compared with $22.7 million for the same period of the prior year. And for the full year 2025, operating expenses were $103.8 million, compared with $95.1 million for the full year 2024. Our clinical business is thriving, and we are investing for future growth. Most of the year-over-year increase was related to commercial expenses for ramping up test volume and also R&D investments for clinical evidence to support reimbursement initiatives and technology development. The fourth quarter R&D expense was $13.1 million, compared with $11.5 million for the same period of the prior year, and SG&A expense was $14.1 million, compared with $11.2 million for the same period of the prior year.

Net loss for the fourth quarter was $23.8 million, compared with $16.4 million for the same period of the prior year, and for the full year 2025, net loss was $81.3 million, which was the same as 2024.

Now let us review the balance sheet. We finished the fourth quarter with a strong balance sheet, with cash and short-term investments of $240 million and no debt other than some small equipment loans. For the full year of 2025, we used approximately $74 million, just below our $75 million guidance. We operated with discipline throughout the year, and even as revenue fluctuated, we managed more than $12 million in downward spending adjustments to protect our cash runway.

Now looking into 2026, we entered the year with a focus on scaling volume. Our guidance reflects reimbursement coverage decisions received to date. Any upside may be realized from faster coverage expansion, payer adoption, faster volume growth for clinical tests, and continued strength in biopharma MRD demand. Additionally, we are guiding annually this year and not providing detailed quarterly ranges due to the variability and seasonality that may occur throughout the year. Our 2026 guidance is as follows. Total company revenue in the range of $78 million to $80 million, and this assumes clinical revenue of $10 million to $11 million specifically from breast and lung cancer surveillance tests recently covered by Medicare.

Revenue from pharma tests and services and all other customers in the range of $55 million to $56 million. MRD revenue from these customers is expected to grow rapidly and to be in the range of $20 million to $21 million. Population sequencing plus enterprise customers of approximately $13 million. Gross margin is expected to be in the range of 15% to 20%, with the first quarter potentially being the lowest point of the year. Net loss of approximately $105 million, and we expect our cash usage to be approximately $100 million as we continue to invest in our win in MRD strategy. This estimate reflects our decision to accelerate volume and gain market share.

With $240 million of cash on hand, we expect to have the capital to execute our plans. Additionally, our success is opening up additional clinical studies that may be able to influence guidelines, and therefore, we are stepping up investments in this area too.

What you are hearing from both Chris and me is unwavering confidence in our ability to execute our win in MRD strategy and plans. We have proven that our ultra-sensitive technology can help change patient care. The market is expanding fast toward the $20-plus billion estimate. We have growing test volume, and we are turning on the reimbursement engine to drive revenue growth this year and beyond. We look forward to updating you during the next conference call in a few months. And with that, I will turn the call back over to the operator to begin the Q&A session. Operator?

Christopher M. Hall: Thank you.

Operator: We will now be conducting a question-and-answer session. You may press star and then 2. It may be necessary to pick up your handset before pressing the star keys. First question we have is from Subhalaxmi T. Nambi of Guggenheim. Please go ahead.

Subhalaxmi T. Nambi: Hey guys, thank you for taking my question. Moving in a short period of time from no reimbursement to now two indications, potentially more here early in 2026. How does that affect the focus of reps internally, externally with Tempus, for clinical and also your eye for still building the pharma business longer term? Yeah.

Christopher M. Hall: Thanks, Subbu. Appreciate the question. I think there are a couple ways to think about it. I mean, what we are starting to do is increasingly ungate the business, increasingly to pick up steam. We had the number this year guided 43 to 45, we think represents a good mix between, you know, investing aggressively but at the same time making sure that we manage the cash in a prudent way.

And as we go through the year and we continue to make more progress potentially with reimbursement, either getting more decisions—we have got IO in front of us—you know, we are finding ways to collect more, etcetera, you know, we could continue to invest more in the area as we go, and we will play it as we go. But right now, this is the way that we see it. We are continuing to push hard on biopharma companies. I mean those relationships and that growth, that is a big growth driver. And we have spent a significant amount of time over the last two to three years ourselves in growing that business.

I think we are having a lot of success there.

Subhalaxmi T. Nambi: Thank you for that, Chris. Chris, how has reimbursement changed its activity from clinicians compared to other competitors in the field? Have you seen an acceleration in ordering since the reimbursement announcements?

Christopher M. Hall: Yes. I mean, I think overall, what you have with getting reimbursement gives you legitimacy in the conversations. I think being able to say that you passed through the process and the rigors of Medicare gives you legitimacy when you are having discussions with physicians and certainly key opinion leaders. I think there is a wide recognition among people who are in the know that MolDX does a particularly phenomenal job reviewing the evidence and looking at it deeply. And so, yes, I think it does help to reinforce the power of what you are doing when you have got Medicare coverage and does put winds to your back.

Subhalaxmi T. Nambi: Super helpful. Thank you so much, guys.

Christopher M. Hall: Sure.

Operator: The next question we have is from Mark Massaro of BTIG. Please go ahead.

Vivian (for Mark Massaro): Hey, guys. This is Vivian on for Mark. Thanks for taking the questions. I just wanted to ask one on the biopharma outlook. So are you seeing pushouts or cancellation of contracts there? And then just at a higher level, you are investing into NeXT Personal MRD and focusing more on the clinical side of your portfolio. So just how material do you think MRD side of biopharma is versus other areas that you have done historically like PCV is longer term? Thanks.

Christopher M. Hall: Yeah, thanks. I think we are seeing the sector stabilize right now. We have not seen any pushouts or any big jolts to the business. I mean last year was certainly more challenging. We are not seeing biopharma companies come rushing back in a major way for translational purposes. And we reflected—I think what we see right now is what we have reflected in the guide. I think things are stable right now in that sector overall is what we are seeing. I think we are making progress in MRD. We feel like we have been accelerating our progress there. I mean, those customers are some of the most discriminating buyers. They often do head-to-head trials with the data.

And so when you win there and you should see the revenue growth that we are showing in that sector, which I think was nearly 240% year over year, and that came off a particularly strong year the year prior, and we see it continuing to grow this year. That reflects the decision of large companies who do really detailed analysis to choose Personalis, Inc. So we feel like we are well positioned there. But we are investing heavily overall to win this space, both biopharma and also clinical. We have always thought that those two work synergistically, that the evidence that we built in biopharma helps drive the clinical business, and that has been one of the key vectors.

As you know, with our relationship with Moderna, we have been focused on supporting them through their journey of their INT program, and that has been a potential driver of our revenue over the out years.

Mark Massaro: So much for that color. And then NeXT Personal, can you share any detail on the mix of volumes you expect in 2026 in your reimbursed indications versus your not‑reimbursed indications? I think the volume in that guide you—

Christopher M. Hall: Yeah, go ahead and finish the question if you want.

Mark Massaro: Okay, sure. I was going to say, I think the volume in rev guide implies that a good chunk of the volumes you are running today are not lung and breast. So just want to understand what indications you are seeing there.

Aaron L. Tachibana: Sure. If you just look at the volume at the top level—so the 43,000 to 45,000 tests—roughly 20% or so is coming from breast, 15% to 20% is coming from lung, IO is somewhere between 20% to 25%, CRC is around 20%, and all other is the remaining 20% or so. And it is true. There is a fair amount that we are running for zeros. Right? We are not getting paid. We are only getting covered for breast and lung at this point in time, so it is less than half of the tests. Right? And Medicare is roughly half of the volume, and the fee-for-service is half of that half.

And so again, we are running a lot of tests with zeros, but when you are dealing with physicians, you have to accept samples of all different cancer types, and that is what we are doing. We are doing really, really well, and we are finding that our ultra-sensitive test is really sticky with physicians. Now as we want to go forward here to drive more growth, we are going to be adding more physicians, right? We are adding more commercial heft on the Tempus side and internally. We are going to add, you know, another 10 or so reps. We ended the year with 10 reps. We are going to double it at this point in time.

That is our current plan. And we could invest even further, depending on how things go here in the first couple of quarters. So things are going really, really well.

Christopher M. Hall: And note the guide did not assume IO yet. But that is clearly out there, and we have got a significant amount of revenue. We expanded the relationship this past year with Tempus to include CRC, and we have gotten tremendous uptick and energy around that from doctors. The data that we had at AACR last year showed that if you apply an ultra-sensitive approach onto the testing paradigm, you can get a dramatic leap in performance at landmark, and that really raised a lot of eyebrows. And a significant number of physicians have been starting to adopt in CRC.

So we have been investing because that has been historically a strong space, and we have looked at it, and we are making investments and growing that market and our presence in the CRC market, and we have had a lot of progress. And so when Aaron talks about 20% of the samples coming from that group of physicians—that 20% of our samples coming from CRC—that has been a really nice growth engine. And I think over the arc of time, progress we are making there is really going to pay off.

Mark Massaro: Perfect. That is super helpful. Thank you.

Christopher M. Hall: Absolutely. Thanks, James, for the questions.

Operator: The next question we have is from Thomas Flaten of Lake Street. Please go ahead.

Thomas Flaten: Hey, good afternoon. Thanks for taking the questions. Hey, Aaron, just a follow-up on your last prepared comment about having the cash to execute your plan. Should I read that as having cash to breakeven, or should I not read that far into it?

Aaron L. Tachibana: Yeah. So we have not said anything about cash to breakeven or cash to profitability or anything like that, so that is probably reading a little bit more into it. What we meant by that statement, Thomas, is that we had $240 million cash at the end of the year. We are going to use approximately $100 million in 2026. So you can see just by the simple math, it is two and a half years or so of cash on the balance sheet, which means we have plenty of capital here for the next couple of years to go and drive, to go get market share. And that is the focus right now, really investing for market share.

Thomas Flaten: Got it. Got it. Then just a question on the real-time variant tracker. I think, Chris, in your prepared comments, you mentioned that was an opt-in test. So are people ordering it? I mean, of the physicians you went out to with the early access program, are they ordering it? Do they literally have to click a box, or just mechanically, how does that work, and how do you drive the stickiness on that?

Christopher M. Hall: Yeah. I mean, it would be—I mean, Rich is with me and can add any color to it, but it is an opt-in module. It is not something that just everybody gets by default.

Richard Chen: Yeah, and we are getting geared up for the early access program as we speak. But we expect that physicians will opt in, and a lot of them will, and there has been a lot of excitement about it. One of the feedbacks has been, you know, it is not just being able to quantify the tumor in the blood, but being able to track how the tumor is changing is really one of the key unmet needs in cancer. Starting to superimpose this longitudinally really is, I think, exciting, and I think is the next big innovation in MRD and, quite frankly, underlines our ability to lead the space in innovating.

I mean, having started with the ultra-sensitive push that we have been pioneering and now starting to add this I think is a great positioning for where we are and the impact that we are making for patients.

Thomas Flaten: Got it. Just one quick last one. Of the clinical volume you are expecting this year, you mentioned that you had 900 oncologists ordering last year. Do you have a sense of how many docs are going to be responsible for that 43,000 to 45,000? Just again, big ranges are fine. I am just curious about depth versus breadth.

Christopher M. Hall: Yeah. I mean, we are—I mean, I think we are going to—I mean, this year we will keep focusing driving deeper within existing accounts.

Richard Chen: You know, the 900 doctors ordering from us continue to grow, and we will continue to go broader, but we are focusing always on going deeper as is our partner Tempus. Because, I mean, I think people start to use the technology, they see the power of it, and our experience has been that the customers who have been with us longer tend to be the customers that order the most. And so we are focused on continuing to tell the story, underline the value, and driving deeper within existing relationships.

Aaron L. Tachibana: That is great. Thank you. Thanks, Thomas.

Operator: The next question we have is from Callum Tich Marsh of Morgan Stanley. Please go ahead.

Jason (for Callum Tich Marsh): Hi. This is Jason on for Callum. Thanks for taking our questions. So maybe just a question on 2026 guidance. How should we think about the quarter-over-quarter clinical volume growth? You delivered 6,200 clinical tests in the fourth quarter. Is that a good jumping-off point for you guys, from what you guys could grow 24% to 25% quarter over quarter to get to the midpoint of your volume guide?

Aaron L. Tachibana: Yes. So we have not given quarterly guidance, but if you take the 6,183 exiting 2025 in the fourth quarter and just maybe linearize it, that probably gets you close. There would be a little bit of seasonality. Second and the fourth quarters are going to be the strongest, where the first and the third will have a little bit of some seasonality.

Richard Chen: Yes. I mean, Q1 and Q3 are always, you know, are always slower growth quarters in this kind of an environment versus Q2 and Q4 because of the combination of vacations, holidays, and then Q1 weather, and we have always seen that. But, you know, right now, we are still learning exactly how the seasonality works. But we saw that in our numbers last year, and I think that is—you know, I have spent years in this business—that is pretty common.

Jason (for Callum Tich Marsh): Thank you. That was helpful. And then maybe just as a follow-up. So a question on the competitive landscape. There are a lot of new entrants in the MRD space, and there has been some consolidation in the space as well with one of the large MRD players recently making a large acquisition of another large MRD player in December and potentially integrating their IP to enhance the sensitivity of their assay. So could you just share your thoughts on the current competitive landscape and why you think you can gain share against arguably larger players with deeper pockets? Thank you.

Richard Chen: Yeah. I mean, I think we have proven this over the last couple of years that we can. We have been focused on pioneering the story. I think a lot of people are trying to either get to or debut ultra products. Our intention is to stay ahead and continue to push forward. We are aligned with one of the biggest partners in the space, Tempus, which is providing the commercial infrastructure, which gives us the ability to move quickly and make progress. And we have gotten traction now with, you know, what we talked about in the script, 30-plus ongoing studies, and that continues to grow. And so we are investing heavily in R&D and driving forward.

And so, you know, I think if you look at where we have been, where we are, we have emerged as one of the large players in the space. I think we have stitched together—there are only two or three companies with more than two coverages now in MRD, and we are there. And I think just in terms of test volume, we have emerged as a major player, and we have got momentum, and we are still leaders in data in terms of where it is. So we feel like we are positioned well, and we are continuing to make the investments necessary to keep that position in the industry.

Jason (for Callum Tich Marsh): Great. Appreciate the answers, guys.

Operator: The next question we have is from William Bonello of Craig-Hallum. Please go ahead.

William Bonello: Hey, guys. Thanks a lot. So the volume expectations obviously look great, well above, I think, what people had been expecting. You know, the Tempus comments last night were incredibly bullish. I think what might, you know, surprise people is sort of where you are ending up on the clinical revenue, the gross margin, and the cash flow guide. And you kind of talked about, you know, your philosophy. But maybe you can just give a little bit more color on what is prompting that. I mean, historically, your approach had kind of, as you said, been, you know, to sort of be a bit gated with the sales.

I think there were some restrictions to Tempus in terms of kind of what you were encouraging them to do. You know, you knew all along you would be getting reimbursement. What, you know, is it the response you are getting from the field? Or, you know, what is it that has made you decide to sort of put on the gas at this point of time and maybe move away a little bit from that, you know, capital-light strategy you have talked about in the past?

Aaron L. Tachibana: Hi, Bill. This is Aaron. Thanks for the question. And so exiting 2024, getting into 2025, we did meter things a little bit, primarily because we had not received any coverage at all just at that point in time. And our balance sheet did not have $240 million back then either. And so those two items there have changed, you know, over the past few months.

Having coverage now for breast cancer and lung cancer, and having a healthy price that we are really, really pleased with that is going to give us the right unit economics and help us get our gross margins into the low 60s and show us a path to eventually 70%, but again, at full reimbursement, gives us now the confidence that we should step on the gas and go fast because this market is going to turn into $20-plus to $30-plus billion over time. And so there are only a few players in the market today. There are only two real tumor-informed players that have a really robust test. We are the leader in the ultra-sensitive marketplace.

And so it behooves us to go fast right now while the window is open and there is very little competition in the ultra-sensitive space. So we see it as an opportunity to go get market share over the next year or two, and in doing so, we would have to sacrifice a little bit on cash burn as well as on gross margin, primarily because until we get a few more coverages, right, it is going to be dilutive to our gross margins. That makes sense?

William Bonello: Yeah. No. It does. And I get the capital and the reimbursement. I was just curious if you were seeing things in the market that were saying, hey, we should really step up as well too. But sounds like it was more the other bits.

Aaron L. Tachibana: Yeah.

Richard Chen: Bill, I mean, we see strong demand. And, I mean, I think you are hearing that from people talking about it. And, you know, we are here to meet the demands of the physicians. And we are still managing this carefully. I mean, step up from $74 million to $100 million is not like a crazy, you know, a crazy drive forward. We are also investing heavily in R&D, both studies, the evidence development, pushing forward in multiple different ways to accelerate coverage, and, you know, the guide at the current level does not have any more progress in coverage or in reimbursement. You know, we feel like there is a lot of upside there.

That will continue to be helpful as we go forward. So, you know, we feel like this is the right spot to guide, I think, hit a good cadence of investment weighed up against expansion, and I think the investment that we do make now will pay dividends in the future. And we could probably ungate and go ever faster, but that would spend even more money. So I think we have hit—we feel like we have hit—the right balance here.

William Bonello: Sure. Just a couple follow-ups then. Are—either to the extent that you are allowed to talk about this—have you sort of given Tempus also the green light, maybe not to go full throttle, but do they have a little more freedom in what they can do with sales as well?

Richard Chen: Oh, we are focused on going deeper within accounts, and we are focused on—we have added support, some more reps ourselves, and, you know, I feel like we are in a good position, and we work really well right now. And we are driving forward with the idea that, you know, we are building demand for this ultra-sensitive approach and making progress.

William Bonello: Okay. That was a good non-answer. The last thing is just cash burn for the year. I think you—just in your comp—there was no cash flow statement. But I think in your comment you said it was about $70 million for this year. Is that right?

Aaron L. Tachibana: Yeah. So we used about $74 million, and that was in our prepared remarks, Bill. And we expect to use $100 million in 2026.

Richard Chen: Yep. $74 million to $100 million?

William Bonello: Okay. Perfect. Thank you so much.

Aaron L. Tachibana: Thank you, Bill.

Operator: The next question we have is from Michael Stephen Matson of Needham & Co. Please go ahead.

Joseph (for Michael Stephen Matson): Hey, Chris, Aaron, Rich, thank you very much for taking our questions. This is Joseph on for Mike. Just a couple here. In your prepared remarks, you called out, I guess, a heightened focus on CRC and neoadjuvant breast moving forward. Just wondering, should we expect maybe a submission at least for reimbursement in 2026 for those two? And I have a couple more after that. Thank you.

Richard Chen: Yeah. No. Absolutely. We are not, I mean, we are not sort of laying out exact timelines—everything is dependent upon when we can get publications both submitted with investigators and then accepted because we cannot submit until those things happen. But, yeah, we are driving hard in order to be able to submit for coverage for both of those this year. But there is a lot of variability as to when and how that might happen. So that is not in the guide, if you will. But, I mean, we are moving fast because we see a big demand for use of the technology for those indications for patients.

Joseph (for Michael Stephen Matson): Okay. And I guess just building on that, in terms of, I guess, evidence generation, your strategy around evidence generation for additional cancer indications. I am just wondering, is there any difference now in strategy compared to breast and lung in terms of, you know, is the focus or at least part of the focus looking at trying to get into these very large, almost, you know, landmark studies? Now that you have reimbursement in two indications, do you think smaller studies can, you know, can pass the bar for Medicare? You know, you called out 35 clinical trials. So is the idea here now in the quantity of trials rather than, you know, number of patients in the trial?

I am just trying to get, you know, some broad color on that.

Richard Chen: Yeah, thanks for your question. Yeah, so, you know, we are taking a strategy of working with the top KOLs in the world in establishing some baseline evidence for these indications as we expand out our reimbursement coverage. So we are going to continue—we are going to continue to do that. It has really paid off for us. And so, you know, we debuted very, very strong data in neoadjuvant breast at conferences last year and then also colorectal cancer as well, with top KOLs, and we think that helps us in the Medicare coverage process. So we will continue to do that not only for those indications, but for others.

In addition to that, we are also—you know, we have had a lot of inbound interest from KOLs wanting to expand into clinical utility studies, you know, using our assay to make decisions for patients and then show that it actually makes a difference in outcomes. And this is really important for long term, not just for the field, but also getting into guidelines and things like that. So you will begin to see more of that as well.

Joseph (for Michael Stephen Matson): That is helpful. Maybe just one last one. You know, to get to that high gross margin target you guys have laid out, obviously reimbursed test volume is the biggest factor there. But I am just wondering, in terms of other things like lab optimization, automation, what have you, I am just wondering, have those steps all been completed? Are there more planned? You know, what inning would you say you guys are in terms of, you know, really getting ready to ramp up reimbursed clinical volume.

Aaron L. Tachibana: Yeah. Good question. So we have not said specifically what percent of completion we are on all of our operational aspects or projects. We continue to automate the workflow, which means as we add capacity—all the capacity for this year is installed in place at one point in time, right, because you have to buy equipment, hire people—and that is going to weigh even further on margins if you get too far ahead of your skis. And so we take it one step at a time. But having said that, we are continuing to automate, streamline the workflows, strip out costs from labor or overhead where we possibly can, right, as we go forward to be efficient.

And over the last couple of years as we launched product, we have done a good job with getting ready, and so we believe we are in a good position sitting here today. In terms of getting to the upper end of the range on margins, some of that is dependent upon what happens with biopharma as well, because biopharma is a fee-for-service—they pay for every test. In terms of some of the commentary Chris made earlier, we have not baked in IO into our guide, right? So that is not contemplated. Depending upon what happens with reimbursement coverage for other cancer types, that could help us as well in terms of moving toward the upper end or beyond.

Joseph (for Michael Stephen Matson): Okay. Great. Yeah. That is all from us, and congrats on the reimbursement wins so far.

Aaron L. Tachibana: Thank you. Thank you.

Operator: Ladies and gentlemen, just a final reminder, if you would like to ask a question, you may press star and then one. Next question we have is from Tom Stevens of TD Cowen. Please go ahead.

Tom Stevens: Question here. Just a quick one on adjuvant reimbursement. So have you outlined any expectations over the next couple of years in breast and lung on the potential for adjuvant reimbursement and kind of what is the pushback from MolDX there? Any color would be helpful. And then secondarily on the neoadjuvant opportunity, I mean, could you lay out broad strokes where pharma is applying them in trial today? Neoadjuvant feels like an easier use case, and maybe some initial market sizing on the neoadjuvant opportunity if you could also spare that. Thank you.

Richard Chen: Yeah. Rich is going to grab this one, Tom. Thanks. Yeah. Thanks for the question. Yeah. So adjuvant breast and lung—rest assured, you know, that is something that we are also focused on, and we will be pursuing that just like the other indications that we have been successful with. So we know that is important. With regards to neoadjuvant breast cancer—or neoadjuvant use of the assay in biopharma—yeah, I mean, there is a lot of interest there. I mean, you know, as you know, the oncology pipelines for drugs, there is intense interest in bringing the drugs that are being used in an adjuvant setting and bringing them earlier for patients.

So the neoadjuvant setting is one that is really important, and they want to know if these drugs are working. And so a highly sensitive assay like ours can be really, really helpful for that. We actually—you know, if you look at the data that we presented last year in neoadjuvant breast cancer, it just shows the power of an ultra-sensitive approach—that was in triple-negative breast cancer and HER2-positive. And the current state-of-the-art biomarker that is used is something called pCR. And so in those studies, we showed that our assay performed very well compared to pCR, and in some cases better.

And so you can imagine since that data has come out, there has been a lot of interest in using an assay like ours to get an early read on their neoadjuvant studies and whether they are being successful or not.

Tom Stevens: Great. And then just any initial view on the sizing of the kind of clinical market there and kind of what the potential for that could be long, long term?

Richard Chen: Yeah. So, you know, I think we—there is definitely—we have not estimated that. I would say, you know, if you look at the patient journey for MRD, you know, it does start with neoadjuvant, but, you know, it is a relatively small fraction of that entire patient journey. Surveillance, you know, over time, over many years, you know, there is going to be a lot of testing done there, both for breast cancer and early-stage lung cancer. That is why we started there, and we achieved coverage there. And now we are kind of working our way backwards into these other indications.

Tom Stevens: Got it. Thanks very much, guys.

Aaron L. Tachibana: Thanks, Tom.

Operator: Ladies and gentlemen, that concludes the question-and-answer session. And with that, this concludes today’s teleconference. Thank you for joining us. You may now disconnect your lines.

Caroline V. Corner: Goodbye.

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