Fulgent Genetics Q2 2025: Unpacking Contradictions in Anatomic Pathology Growth, Revenue Guidance, and Margins

Anatomic Pathology growth, revenue and EPS guidance, gross margin adjustments, VA contract impact on revenue, and gross margin expectations are the key contradictions discussed in Fulgent Genetics' latest 2025Q2 earnings call.



Laboratory Services Revenue Growth:
- Fulgent Genetics reported core revenue of $81.7 million for Q2 2025, up 16% year-over-year and 11% sequentially.
- The growth was driven by strong performance across Precision Diagnostics, Biopharma Services, and Anatomic Pathology segments, as well as successful product launches like the new whole genome sequencing service.

Anatomic Pathology Expansion:
- Anatomic Pathology revenue increased by 11% sequentially in Q2 2025.
- Organic growth was attributed to improvements in lab operations, quality, and turnaround time, as well as expansion of the sales organization, leading to new contract wins.

Therapeutic Development Progress:
- The company's first clinical candidate, FID-007, has enrolled and dosed 32 patients in a Phase II clinical trial, with plans to complete enrollment by the end of 2025.
- Positive safety data encouraged broader patient eligibility, leading to accelerated enrollment and anticipated cost-effective clinical trial progress.

Managed Care Coverage Expansion:
- Over 20 new agreements have been executed since January 2025, adding over 35 million new covered lives to in-network contracts.
- Expansion of managed care coverage enhances sales strategy and patient access, contributing to revenue growth and improved gross margins.