NeoGenomics’ second quarter was met with a significant negative market reaction, reflecting disappointment over a shortfall in revenue compared to Wall Street expectations and a decrease in full-year guidance. Management attributed the underperformance primarily to ongoing challenges in its pharma services business and a delayed launch of a key new product. CEO Anthony Zook acknowledged, “We missed our revenue guide this quarter. It’s unacceptable. We understand that and take responsibility for it.” The company did highlight solid growth in its core clinical business and continued share gains in high-value testing segments, but external headwinds and internal execution delays weighed on results.
Is now the time to buy NEO? Find out in our full research report (it’s free).
NeoGenomics (NEO) Q2 CY2025 Highlights:
- Revenue: $181.3 million vs analyst estimates of $182.9 million (10.2% year-on-year growth, 0.9% miss)
- Adjusted EPS: $0.03 vs analyst estimates of $0.02 (in line)
- Adjusted EBITDA: $10.68 million vs analyst estimates of $11.31 million (5.9% margin, 5.6% miss)
- The company dropped its revenue guidance for the full year to $723 million at the midpoint from $753 million, a 4% decrease
- Adjusted EPS guidance for the full year is $0.10 at the midpoint, missing analyst estimates by 36.1%
- EBITDA guidance for the full year is $42.5 million at the midpoint, below analyst estimates of $54.7 million
- Operating Margin: -26.3%, down from -13.3% in the same quarter last year
- Market Capitalization: $751.8 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From NeoGenomics’s Q2 Earnings Call
- Andrew Frederick Brackmann (William Blair) asked about the company’s revised guidance philosophy and credibility rebuilding steps. CEO Anthony Zook emphasized the need for transparency, realistic assumptions, and consistent delivery, stating, “We missed our revenue guide this quarter. It’s unacceptable. We understand that and take responsibility for it.”
- Yuko Oku (Morgan Stanley) questioned the balance between being a one-stop shop and focusing on profitable products. Zook and Chief Commercial Officer Warren Stone stressed the plan to prune the portfolio while investing in high-growth areas like therapy selection and MRD.
- Thomas VonDerVellen (Guggenheim Securities) asked where guidance was most at risk and where it was most de-risked. Zook identified pharma revenue as the largest risk, noting reductions in both revenue and cost structure for that segment, and highlighted PanTracer as a key growth lever for the second half.
- Michael Ryskin (Bank of America) probed competitive positioning in pharma services after continued weak results. Zook acknowledged portfolio gaps, especially after the loss of RaDaR 1.0 contracts, and said new launches would take time to impact results.
- Puneet Souda (Leerink) asked about NGS sales force strategy and competition. Stone explained the majority of NGS growth is driven by the oncology sales specialist team, with Zook emphasizing the importance of broad portfolio offerings and operational execution.
Catalysts in Upcoming Quarters
Looking ahead, key areas to watch include (1) the commercial adoption and revenue impact of the PanTracer liquid biopsy launch, (2) ongoing operational efficiency gains from LIMS integration and automation projects, and (3) signs of stabilization or recovery in the pharma services business. Progress in cross-selling the expanded portfolio to Pathline customers and the outcome of the upcoming MRD-related litigation will also be key drivers to monitor.
NeoGenomics currently trades at $5.84, down from $6.48 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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