Latest news with #TonyZook
Yahoo
13-05-2025
- Business
- Yahoo
NEO Q1 Earnings Call: Sales Growth, Pharma Headwinds, and Pathline Integration Shape Outlook
Oncology (cancer) diagnostics company NeoGenomics (NASDAQ:NEO) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 7.5% year on year to $168 million. On the other hand, the company's full-year revenue guidance of $753 million at the midpoint came in 2% above analysts' estimates. Its non-GAAP loss of $0 per share was in line with analysts' consensus estimates. Is now the time to buy NEO? Find out in our full research report (it's free). Revenue: $168 million vs analyst estimates of $170.9 million (7.5% year-on-year growth, 1.7% miss) Adjusted EPS: $0 vs analyst estimates of -$0.01 (in line) Adjusted EBITDA: $7.07 million vs analyst estimates of $5.27 million (4.2% margin, 34.3% beat) The company lifted its revenue guidance for the full year to $753 million at the midpoint from $740 million, a 1.8% increase EBITDA guidance for the full year is $56.5 million at the midpoint, above analyst estimates of $55.63 million Operating Margin: -16.6%, up from -19.6% in the same quarter last year Free Cash Flow was -$29.83 million compared to -$31.5 million in the same quarter last year Market Capitalization: $1.1 billion NeoGenomics' first quarter results reflected continued growth in clinical testing, particularly from its next-generation sequencing (NGS) portfolio and expanded commercial reach. Management attributed the increase in clinical test volumes and revenue per test to the successful launch of five new NGS products and targeted investments in its salesforce, as well as the recent acquisition of Pathline, which expands the company's Northeast presence. CEO Tony Zook emphasized that the company's strategy remains focused on serving community oncology providers, with new product launches and operational efficiencies supporting ongoing momentum. Looking ahead, leadership lifted full-year revenue guidance, underpinned by the expected benefits from Pathline, additional NGS product introductions, and commercial partnerships such as the collaboration with Adaptive for minimal residual disease (MRD) testing. Management also cautioned that macroeconomic pressures, including weaker pharma and biotech spending and non-clinical revenue headwinds, are likely to persist but will be offset by growth in the core clinical business. CFO Jeff Sherman reiterated NeoGenomics' commitment to financial discipline, stating, 'We will continue to take a balanced approach to investments with increasing adjusted EBITDA, enabling further investments to drive operating efficiencies in the business and targeted investments in R&D.' NeoGenomics' management highlighted several major factors shaping first quarter performance, with accelerating growth in clinical diagnostics and ongoing investment in new products and operational capabilities. NGS Segment Drives Growth: The launch of five new next-generation sequencing (NGS) tests accounted for 22% of total clinical revenue, reflecting strong adoption within community oncology practices. Management noted that deeper relationships with community hospitals are providing a competitive edge and driving higher-value test utilization. Pathline Acquisition Expands Market Reach: The recently closed acquisition of Pathline, a New York state-approved laboratory, establishes a physical presence in the Northeast and is expected to accelerate top-line growth by improving access to regional providers. Integration efforts are underway, with management expecting incremental clinical revenue contributions this year and greater earnings impact in 2026. Salesforce Expansion to Support Penetration: NeoGenomics completed the expansion of its commercial team to approximately 140 salespeople, aiming for near one-to-one coverage between hospital pathology and community oncology. Leadership sees this as critical to supporting upcoming product launches and deepening market penetration. Non-Clinical Revenue Pressure: The pharma and biotech segment, which comprises about 10% of total revenues, remains under pressure due to reduced research spending and macroeconomic factors such as tariffs and potential NIH funding cuts. Management acknowledged this headwind but maintained confidence in the long-term strategic value of the segment. Product Pipeline Highlights: Validation and early-access programs for PanTracer liquid biopsy, an NGS-based blood test, have generated strong interest from community oncologists. The company also highlighted a new partnership with Ultima Genomics for low-cost, high-quality sequencing and ongoing development of next-generation MRD technologies, aiming for product launches in the next two years. Management's outlook for the remainder of the year is anchored by the continued expansion of NGS offerings, Pathline integration, and the maturing salesforce, while acknowledging ongoing challenges in the non-clinical segment and industry-wide macro pressures. NGS and Product Launches: Future growth is expected to come from the commercial launch of PanTracer liquid biopsy and upgrades to the comprehensive NGS panel, along with increased adoption of MRD testing through the Adaptive partnership. Leadership anticipates these launches will drive higher test volumes and revenue per test. Pathline Integration Synergies: Successful integration of Pathline is expected to gradually enhance operating leverage and support incremental clinical revenue, with more substantial benefits projected for 2026 as NeoGenomics' full test menu becomes available to Pathline's customer base. Non-Clinical Revenue Headwinds: Management warned that continued softness in pharma and biotech spending, along with external factors such as tariffs and research funding uncertainty, could further weigh on non-clinical revenues in the near-term. The company expects core clinical growth to offset these headwinds but highlighted this as a key risk. Andrew Brackman (William Blair): Asked CEO Tony Zook about any early surprises since taking the helm and whether any business areas need more attention; Zook replied he saw no major surprises and reaffirmed confidence in the company's trajectory. Dan Brennan (TD Cowen): Requested details on full-year pharma headwinds and Pathline's contribution to Q2 guidance; CFO Jeff Sherman clarified pharma revenue is expected to decline, with Pathline adding $3–$4 million per quarter and ramping up in later quarters. Tejas Savant (Morgan Stanley): Inquired about capital deployment after paying down convertible notes, and the flexibility to invest in new product launches; Sherman stated cash flow will improve in 2026, providing options for the next round of debt. Matthew Sykes (Goldman Sachs): Probed the outlook for average revenue per test (AUP) amid Pathline integration; Sherman explained Pathline's lower AUP will dilute the blended metric, but core modalities are still seeing incremental gains. David Westenberg (Piper Sandler): Asked about the salesforce ramp and when new hires reach full productivity; Warren Stone said most additions are complete, with expected full productivity reached in six to nine months, pointing to late 2025 and early 2026 for maximum impact. In the coming quarters, the StockStory team will be watching (1) the commercial launch and physician adoption of PanTracer liquid biopsy and related NGS upgrades, (2) the pace and success of Pathline integration, including the rollout of NeoGenomics' test menu to new customers, and (3) progress on operating efficiencies and cost-saving initiatives as the expanded salesforce matures. Execution on partnerships, especially with Adaptive and Ultima Genomics, and visibility into non-clinical revenue stabilization will also be important indicators of strategic execution. NeoGenomics currently trades at a forward P/E ratio of 38×. Should you double down or take your chips? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
Yahoo
29-04-2025
- Business
- Yahoo
NeoGenomics (NASDAQ:NEO) Misses Q1 Sales Targets, Stock Drops
Oncology (cancer) diagnostics company NeoGenomics (NASDAQ:NEO) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 7.5% year on year to $168 million. On the other hand, the company's full-year revenue guidance of $753 million at the midpoint came in 2% above analysts' estimates. Its non-GAAP loss of $0 per share was in line with analysts' consensus estimates. Is now the time to buy NeoGenomics? Find out in our full research report. Revenue: $168 million vs analyst estimates of $170.9 million (7.5% year-on-year growth, 1.7% miss) Adjusted EPS: $0 vs analyst estimates of -$0.01 (in line) Adjusted EBITDA: $7.07 million vs analyst estimates of $5.27 million (4.2% margin, 34.3% beat) The company lifted its revenue guidance for the full year to $753 million at the midpoint from $740 million, a 1.8% increase EBITDA guidance for the full year is $56.5 million at the midpoint, above analyst estimates of $55.63 million Operating Margin: -16.6%, up from -19.6% in the same quarter last year Free Cash Flow was -$29.83 million compared to -$31.5 million in the same quarter last year Market Capitalization: $1.28 billion 'Our business is off to a solid start in 2025 with our team delivering a record number of results to patients in the first quarter and improving our adjusted EBITDA by over 100% from prior year,' said Tony Zook, CEO of NeoGenomics. Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ:NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, NeoGenomics grew its sales at a decent 9.9% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers. Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. NeoGenomics's annualized revenue growth of 12.7% over the last two years is above its five-year trend, suggesting its demand recently accelerated. This quarter, NeoGenomics's revenue grew by 7.5% year on year to $168 million, missing Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 12.7% over the next 12 months, similar to its two-year rate. This projection is admirable and suggests the market is forecasting success for its products and services. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. NeoGenomics's high expenses have contributed to an average operating margin of negative 18.6% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It's hard to trust that the business can endure a full cycle. Analyzing the trend in its profitability, NeoGenomics's operating margin decreased by 8 percentage points over the last five years, but it rose by 13.3 percentage points on a two-year basis. Still, shareholders will want to see NeoGenomics become more profitable in the future. In Q1, NeoGenomics generated a negative 16.6% operating margin. The company's consistent lack of profits raise a flag. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Sadly for NeoGenomics, its EPS declined by 11.4% annually over the last five years while its revenue grew by 9.9%. This tells us the company became less profitable on a per-share basis as it expanded. Diving into the nuances of NeoGenomics's earnings can give us a better understanding of its performance. As we mentioned earlier, NeoGenomics's operating margin improved this quarter but declined by 8 percentage points over the last five years. Its share count also grew by 21.9%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. In Q1, NeoGenomics reported EPS at $0, up from negative $0.02 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects NeoGenomics to perform poorly. Analysts forecast its full-year EPS of $0.12 will hit $0.22. We liked that NeoGenomics beat analysts' EPS expectations this quarter. We were also glad its full-year revenue guidance exceeded Wall Street's estimates. On the other hand, its revenue missed. Another blemish is that while full-year revenue guidance was raised, full-year EBITDA guidance was maintained, signaling that profit margins for the year will be lower than initially expected. Overall, this quarter was mixed. The areas below expectations seem to be driving the move, and shares traded down 7.2% to $9.25 immediately after reporting. So do we think NeoGenomics is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Associated Press
29-04-2025
- Business
- Associated Press
NeoGenomics and Ultima Genomics collaborate to expand clinical test offerings in Oncology using the UG 100 sequencing platform
FORT MYERS, Fla. and FREMONT, Calif., April 29, 2025 /PRNewswire/ -- NeoGenomics, Inc. (Nasdaq:NEO), a leading provider of oncology diagnostic solutions that enable precision medicine, and Ultima Genomics, Inc., a developer of a revolutionary ultra-high throughput next-generation sequencing (NGS) platform, today announced a collaboration to use Ultima's UG 100™ sequencing platform and its ppmSeq™ technology to advance NeoGenomics' ability to offer innovative clinical tests. NeoGenomics has purchased a UG 100 sequencer that will be installed in its innovation center in Cambridge, UK. The UG 100 offers a cost-effective and extremely low-error sequencing profile that is a strong fit for NeoGenomics' emerging clinical assay portfolio that requires large amounts of high-fidelity sequencing data. And with the recent launch of the Solaris portfolio of product advancements, Ultima has now increased sensitivity of variant detection with 5x yield improvements for the SNVQ60 ppmSeq™ mode enabling 30X coverage from as little as 2 nanograms of DNA, making the UG 100 a strong fit for applications like liquid biopsy that require finding a 'needle-in-the haystack.' NeoGenomics' R&D team will use Ultima's UG 100 to enable development of tests spanning the cancer care continuum. 'This collaboration with Ultima, a pioneer in cost-efficient whole genome sequencing, will equip our research and development team with resources to rapidly and efficiently translate innovation for the benefit of patient care,' said Tony Zook, CEO of NeoGenomics. 'With precision oncology testing increasingly being based on next generation sequencing, we are continually looking for targeted opportunities to drive innovation that improve patient outcomes.' 'We are excited to be working with NeoGenomics, a leader in cancer diagnostics with a strong and established footprint in the oncology ecosystem. With the UG 100, NeoGenomics is well-positioned to explore fast-growing markets in oncology diagnostics such as MRD and emerging whole genome sequencing applications,' said Gilad Almogy, CEO of Ultima Genomics. 'Ultima's unique sequencing architecture was designed to specifically meet the needs of cost-effective, large-scale applications and to excel in applications like liquid biopsy requiring extreme accuracy. For oncology applications, our ppmSeq technology offers accuracy at extremely low limits of detection and at low cost, and we believe will be transformational for applications requiring earlier detection such as MRD. About NeoGenomics, Inc. NeoGenomics, Inc. is a premier cancer diagnostics company specializing in cancer genetics testing and information services. We offer one of the most comprehensive oncology-focused testing menus across the cancer continuum, serving oncologists, pathologists, hospital systems, academic centers, and pharmaceutical firms with innovative diagnostic and predictive testing to help them diagnose and treat cancer. Headquartered in Fort Myers, FL, NeoGenomics operates a network of CAP-accredited and CLIA-certified laboratories for full-service sample processing and analysis services throughout the US and a CAP-accredited full-service sample-processing laboratory in Cambridge, United Kingdom. About Ultima Genomics Ultima Genomics is unleashing the power of genomics at scale. The Company's mission is to continuously drive the scale of genomic information to enable unprecedented advances in biology and improvements in human health. With humanity on the cusp of a biological revolution, there is a virtually endless need for more genomic information to address biology's complexity and dynamic change—and a further need to challenge conventional next-generation sequencing technologies. Ultima's revolutionary new sequencing architecture drives down the costs of sequencing to help overcome the tradeoffs that scientists and clinicians are forced to make between the breadth, depth and frequency with which they use genomic information. The new sequencing architecture was designed to scale far beyond conventional sequencing technologies, lower the cost of genomic information and catalyze the next phase of genomics in the 21st century. To learn more, visit Contacts Ultima Media Contact Vikki Herrera 408-206-7009 [email protected] NeoGenomics Investor Contact Kendra Sweeney [email protected] NeoGenomics Media Contact Andrea Sampson [email protected] View original content to download multimedia: SOURCE Ultima Genomics
