Biodesix's 2026 Q2 Earnings Call: Sales Force Hiring and ASP Signals Don't Match

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Date of Call: Aug 5, 2026

Financials Results

• Revenue: $26.9 million, representing 34% growth year-over-year
• Gross Margin: 82%, a 200 basis point improvement over the prior year period

Guidance:

• Maintain previously raised full-year revenue outlook of $108 million to $114 million.
• Expect continued operating leverage as sales team advances along productivity curve.
• Expect continued progress towards sustained adjusted EBITDA profit.
• Current cash, expected revenue growth, and operating leverage provide sufficient liquidity for growth strategy.

Business Commentary:

Revenue and Diagnostic Testing Growth:

• Biodesics reported total revenue of $26.9 million for Q2 2026, representing 34% growth year-over-year. Diagnostic testing revenue alone grew by 42%.
• The growth was primarily driven by an increase in test volumes, which rose by 38% year-over-year, and higher average revenue per test due to additional payer coverage and improved revenue cycle management.

Primary Care and Pulmonology Expansion:

• Test volumes from primary care grew by 133%, while pulmonology showed 31% growth, contributing significantly to the overall test volume increase.
• This expansion was fueled by increased adoption of Notify CDT and Notify XL2 tests, driven by new physician orders and increased patient testing from existing accounts, supported by recent clinical evidence validating the tests' efficacy in smaller nodules.

Operational Efficiency and Margins:

• The company achieved its fifth consecutive quarter with gross margins at or above 80%, specifically 82% in Q2 2026, a 200 basis point improvement from the previous year.
• Margin improvement was due to increased adoption of higher-margin tests, operational efficiencies, and a decrease in average cost per test driven by improved productivity and cost management.

Sales Force Productivity and Expansion:

• Operating expenses, excluding direct costs, increased by 7% year-over-year, supporting the revenue growth with an 8% increase in sales, marketing, and general administrative expenses.
• The company expanded its sales team to approximately 104 representatives, focusing on productivity improvements and planned commercial organization expansion, which contributed to the revenue growth without proportionally increasing expenses.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted 'strong progress towards profitability,' 'continued growth,' and 'improved ASP.' They noted 'significant improvement' in adjusted EBITDA (56% better YoY) and expressed confidence in the full-year outlook, citing 'strong demand,' 'positive response' to publications, and 'robust' pipeline.

Q&A:

• Question from Alex DeCasen (CannaCore): Do you believe the trend of healthcare professionals ordering Notify CDT for smaller nodules and subsequently increasing orders for larger nodules could remain a meaningful test volume growth driver in the near and medium term?
  Response: Yes, management sees this as the new trend and trajectory, driven by interest in early detection, and expects it to continue.

• Question from Alex DeCasen (CannaCore): Could you elaborate on the improvement in average revenue per test during the quarter and whether these efforts are ongoing?
  Response: Improvement was driven by payer coverage and revenue cycle management, not one-time items. Gross margins are already above 80%, so further significant increases are not expected; continuous operational improvements are ongoing.

• Question from Thomas Flatton (Lake Street Capital Markets): Can you walk us through the dynamics of the sales team expansion and hiring ramp in the second half of the year?
  Response: Hiring timing is based on reps completing training and actively contributing. The split between primary care and pulmonology reps will be hired opportunistically based on progress in each segment; currently, most new hires are for pulmonology.

• Question from Thomas Flatton (Lake Street Capital Markets): What should we expect relative to more publications and news from the development pipeline in the balance of the year?
  Response: Multiple papers have been submitted; updates will be shared as they are accepted and published, with a focus on conferences like CHEST (October/November). Another R&D update is planned around the AMP meeting in November.

• Question from William Bonilla (Craig Holland Capital Group): Does the positive response to the spring publication and PCP efforts change your opinion on top-line growth pace and responsible spending?
  Response: No, the company remains cost-conscious and focused on profitability and return on investment, maintaining a steady hiring cadence and mindful spending.

• Question from William Bonilla (Craig Holland Capital Group): Any updated thoughts on activity around guidelines being updated?
  Response: Management is hopeful that their strong data package will be favorable when guidelines are updated; the target update is for 2026, and they will be eager to see results at the upcoming CHEST meeting.

• Question from William Bonilla (Craig Holland Capital Group): How is PCP test growth breaking out between new providers and increased ordering from existing providers, and how are educational events going?
  Response: Growth is balanced between new ordering physicians and increased volume from existing accounts. Educational events are effective in building market understanding and are continuing.

• Question from Max Masucci (Ross Capital Partners): What has to go right to land the implied second-half growth to meet the full-year outlook, and how much of the growth is from the expanded PCP team versus other factors?
  Response: Key factors are continued commercial team growth, improved sales productivity, ASP stability, and new evidence generation. Growth is from multiple factors, including the expanded PCP team, rising productivity across the sales force, and no catch-up from Q1 weather disruption.

• Question from Ming (Unknown Firm): How are you balancing accelerated commercial investment and pipeline development against the objective of sustained profitability, and what expense growth is embedded in the second half?
  Response: Priority is growing revenue, then achieving profitability. Expenses will grow steadily to support commercial team increase, but internal infrastructure growth is moderate. Pipeline development is advanced cost-effectively without massive investment.

Contradiction Point 1

Sales Force Hiring Strategy and Commercialization Timeline

Contradiction on the pace and structure of sales team expansion.

Thomas Flatton (Lake Street Capital Markets) - Thomas Flatton (Lake Street Capital Markets)

2026Q2: Hiring is opportunistic... The timing and split are not yet clear-cut, and the current rep count is lower than some models expected. - Scott Hutton(CEO)

What is the sales team's hiring plan and structure, particularly the allocation between pulmonology and PCP-focused reps? - Andrew Brackmann (William Blair & Company L.L.C., Research Division)

2026Q1: Learnings... have been successfully applied. Best practices were shared at the National Sales Meeting in February. The strategy... has effectively tapped into the large addressable market. - Scott Hutton(CEO)

Contradiction Point 2

Impact and Durability of Average Selling Price (ASP) Improvements

Contradiction on the primary driver and expected continuation of ASP gains.

Alex DeCasen (CannaCore) - Alex DeCasen (CannaCore)

2026Q2: Improvements were driven by a mix of test volumes... and better revenue cycle management... Gross margins are already above 80%, and large further increases are not expected. - Robin Harper-Cowie(CFO)

What caused the improvement in average revenue per test, and are these ongoing efforts expected to sustain meaningful results? - John Wilkin (Craig-Hallum Capital Group LLC, Research Division)

2026Q1: Growth in the guidance is weighted heavily towards volume. A slight ASP improvement is anticipated, similar to mid-year 2025 levels... The current ASP improvements are seen as durable, driven by payer coverage and revenue cycle management. - Robin Cowie(CFO)

Contradiction Point 3

Sales Force Hiring Strategy and Allocation

Contradiction on the disclosed strategy for allocating future sales hires between PCP and pulmonology focuses.

Thomas Flatton (Lake Street Capital Markets) - Thomas Flatton (Lake Street Capital Markets)

2026Q2: Hiring is opportunistic... The majority of new hires to date have been pulmonology-focused. As the pulmonology base scales, the company will opportunistically add primary care reps. - Scott Hutton(CEO)

What is the hiring plan and rep split between pulmonology and primary care physician (PCP) focused sales teams? - Thomas Flaten (Lake Street Capital Markets)

20260227-2025 Q4: The allocation is not disclosed and will be need-based and agile... The mix will be a blend of associate sales professionals and primary care-focused reps. - Scott Hutton(CEO)

Contradiction Point 4

Primary Care Physician (PCP) Test Volume Growth

Contradiction on the reported growth contribution and maturity of the PCP sales channel.

William Bonilla (Craig Holland Capital Group) - William Bonilla (Craig Holland Capital Group)

2026Q2: Growth is balanced between new ordering physicians and existing ones increasing their volume.... Sponsored educational events... are ongoing. - Scott Hutton(CEO)

How is PCP test growth breaking out between adding new providers and existing providers ordering more tests, and are the educational seminars and clinics continuing? - Kyle Mikson (Canaccord Genuity)

20260227-2025 Q4: Primary care now accounts for 12% of total Nodify orders (up from 11% in Q3). ... The strategy focuses on building relationships with pulmonologists... not on calling every primary care physician directly. - Scott Hutton(CEO)

Contradiction Point 5

Sales Force Hiring Plan and Growth Strategy

Contradiction on the pace and structure of sales force expansion.

William Bonilla (Craig Holland Capital Group) - William Bonilla (Craig Holland Capital Group)

2026Q2: The company will maintain a disciplined approach, aiming for a return on investment with a target of around 120 sales professionals, and a hiring cadence of about eight reps per quarter. - Scott Hutton(CEO)

Has your top-line growth strategy changed due to the strong positive response to the spring publication and PCP efforts? - Alexander Vukasin (Canaccord Genuity Corp.)

20251104-2025 Q3: The sales force will expand by about 6 reps per quarter, focusing on 50 defined territories, without needing additional pulmonology-focused hires. - Scott Hutton(CEO)

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