NeoGenomics 2025 Q1 Earnings Misses Targets as Net Income Drops 4%

NeoGenomics (NEO) reported its fiscal 2025 Q1 earnings on Apr 29th, 2025. Despite achieving an 8% increase in clinical testing volumes and a 3% rise in revenue per test, NeoGenomics fell short of Wall Street's expectations for first-quarter revenue. The company adjusted its 2025 revenue guidance upwards, projecting between $747 million and $759 million, while maintaining its adjusted EBITDA guidance. NeoGenomics anticipates contributions from the Pathline acquisition to bolster incremental top-line revenue.

Revenue
NeoGenomics reported a total revenue increase of 7.5% to $168.03 million for Q1 2025, compared to $156.24 million in Q1 2024. The client direct billing segment was the largest contributor, generating $122.04 million. Commercial insurance added $24.86 million, Medicare and other government sources accounted for $21.10 million, while Self-Pay contributed a modest $39,000.

Earnings/Net Income
Neogenomics narrowed its losses, reporting a $0.20 loss per share in Q1 2025, a slight improvement from the $0.21 loss per share in Q1 2024. The company reduced its net loss to $25.92 million for Q1 2025, down from $27.06 million the previous year. Despite these reductions, the EPS performance remains disappointing.

Price Action
The stock price of NeoGenomics experienced significant declines, plummeting 31.74% during the latest trading day, 32.51% over the most recent full trading week, and 30.59% month-to-date.

Post-Earnings Price Action Review
Following the earnings report, NeoGenomics (NEO) stock showed mixed results in terms of price action. While short-term gains are possible, as indicated by the 3-Day win rate of 50%, 10-Day win rate of 40%, and 30-Day win rate of 35%, the overall performance has been relatively muted, with a maximum observed return of 2.51% over 30 days. These metrics suggest that while there is potential for price appreciation, the stock’s movement post-earnings has been inconsistent, reflecting the uncertainty in investor sentiment towards the company’s financial results and strategic direction.

CEO Commentary
Tony Zook, Chief Executive Officer, emphasized the solid performance of NeoGenomics, highlighting an 8% increase in clinical testing volumes and a 3% rise in revenue per test. He noted the commitment to community oncology, stating, "We will dedicate more resources to innovation through research and development," while reaffirming the focus on patient-centric culture. Zook discussed the acquisition of Pathline, which he believes will enhance growth opportunities in the Northeast market, stating, "We expect to grow incremental top-line revenue with contributions from the acquired business this year." He expressed optimism about the company’s trajectory, reinforcing confidence in the team and strategic direction.

Guidance
NeoGenomics has revised its 2025 revenue guidance to between $747 million and $759 million, representing a growth rate of 13% to 15%. The company expects Pathline to contribute $12 million to $14 million in revenue for 2025. Adjusted EBITDA guidance remains unchanged at $55 million to $58 million. For Q2, revenue is projected to be between $183 million and $187 million, with adjusted EBITDA of $9 million to $11 million, considering the near-term impact from the Pathline acquisition.

Additional News
NeoGenomics recently announced a multi-year strategic partnership with Adaptive Biotechnologies Corporation to enhance minimal residual disease (MRD) monitoring options for patients with certain blood cancers. Under this collaboration, Adaptive's clonoSEQ, the only FDA-cleared NGS-based test for detecting MRD in lymphoid cancers, will be integrated with NeoGenomics’ COMPASS and CHART services. This partnership aims to help oncologists deliver personalized treatment strategies by combining advanced MRD testing with real-time insights into disease progression and patient risk. Additionally, NeoGenomics faced a leadership transition as Chris Smith announced his retirement, prompting concerns about executive team stability amidst the company's strategic shifts. There were no dividend or buyback announcements reported during this period.