Executive Summary / Key Takeaways

• Dual Growth Engines: NeoGenomics is strategically positioned to capitalize on the rapidly expanding Next-Generation Sequencing (NGS) and Minimal Residual Disease (MRD) markets, which represent over $40 billion in addressable opportunity, by leveraging its deep community presence and innovative product pipeline.
• Technological Edge & Pipeline: The company is advancing its core diagnostic and therapy selection technologies, including the recently launched PanTracer liquid biopsy and the upcoming clinical launch of RaDaR ST MRD assay in Q1 2026, alongside significant R&D in next-generation MRD and strategic collaborations like the one with Adaptive Biotechnologies (ADPT).
• Operational Excellence & Market Penetration: NeoGenomics continues to drive operational efficiencies through initiatives like the LIMS project and EPIC integrations, while its expanded sales force and acquisition of Pathline are accelerating market share gains and enhancing customer experience in the community oncology setting.
• Financial Resilience Amidst Headwinds: Despite persistent macroeconomic challenges impacting its non-clinical (pharma) segment, NeoGenomics reiterated its full-year 2025 guidance, projecting consolidated revenue of $720 million to $726 million and adjusted EBITDA of $41 million to $44 million, underpinned by strong clinical business performance.
• Long-Term Value Creation: The company's long-range plan targets 12-13% annual top-line growth (excluding MRD revenue) and significant adjusted EBITDA margin expansion, driven by its core business, strategic acquisitions, and new product development, signaling a clear path to sustainable profitability.

The Oncology Landscape: NeoGenomics' Strategic Foundation

NeoGenomics, Inc. operates a vital network of cancer-focused testing laboratories across the United States and the United Kingdom, providing comprehensive oncology diagnostic and consultative services. The company's mission is to improve patient care and its vision is to become a global leader in cancer testing and decision support. This ambition is rooted in a fundamental industry reality: approximately 80% of all cancer patients receive treatment in community settings, close to home. NeoGenomics has strategically cultivated deep relationships with community hospitals and oncologists, positioning itself as the "partner of choice" for these providers.

The broader oncology diagnostics market is vast and rapidly evolving, with therapy selection and minimal residual disease (MRD) testing alone representing an addressable market exceeding $40 billion. These segments are characterized by rapid growth and relatively low penetration, offering substantial opportunities for specialized players. The Next-Generation Sequencing (NGS) market, a cornerstone of precision oncology, is expanding at an estimated 10-15% annually, while the MRD cancer surveillance and monitoring market is projected to grow at a robust 30% CAGR, currently with less than 10% market penetration. NeoGenomics' strategy is to leverage its established community presence and broad menu of over 500 oncology-focused tests to capture a significant share of these high-growth areas.

Technological Prowess and Innovation Driving the Future

NeoGenomics' competitive differentiation is deeply embedded in its advanced technological capabilities and a relentless focus on innovation. The company offers a comprehensive suite of testing services, including Cytogenetics for chromosome analysis, Fluorescence In-Situ Hybridization (FISH) for detecting specific DNA sequences, Flow Cytometry for cell population characteristics, Immunohistochemistry (IHC) and Digital Imaging for protein localization, and a broad range of Molecular testing techniques like PCR and Next-Generation Sequencing (NGS).

NGS is a critical growth engine, with NeoGenomics' NeoTYPE and Neo Comprehensive panels providing extensive biomarker information from limited samples, enabling faster and more precise treatment decisions. These comprehensive panels integrate DNA and RNA analysis to capture a full spectrum of genomic alterations, including mutations, fusions, copy number variations, splicing mutations, tumor mutation burden (TMB), and microsatellite instability (MSI). This holistic approach is a key differentiator, allowing clients to consolidate most of their molecular oncology testing needs with NeoGenomics, thereby simplifying workflows and improving patient experience.

The company's commitment to innovation extends to its robust R&D pipeline and strategic collaborations. NeoGenomics is actively developing and launching new products that enhance its competitive moat:

• RaDaR ST (formerly RaDaR 1.1): This liquid biopsy platform is designed for minimal residual disease detection and recurrence monitoring in solid tumors. Following a favorable court ruling in August 2025 that invalidated Natera's (NTRA) asserted patent claims, NeoGenomics launched RaDaR ST for biopharma customers in Q3 2025. It has also secured MolDx approval for specific subsets of head and neck (HPV-negative adjuvant and surveillance) and breast cancer (HR-positive and HER2-negative surveillance 5 years out). A full clinical launch is slated for Q1 2026, with additional indication submissions anticipated in the second half of 2026. This technology positions NeoGenomics to capture a significant portion of the rapidly growing MRD market.
• PanTracer Liquid Biopsy (LBx): Launched commercially in late July 2025, PanTracer LBx is a noninvasive, blood-based genomic profiling test for advanced solid tumors. Its key benefits include an average turnaround time of just 7 days and a very low QNS (quantity not sufficient) profile, empowering real-time decision-making. The company is actively pursuing MolDx approval, which is anticipated around the end of 2025. This product, alongside the upgraded PanTracer Tissue (which now includes HRD for ovarian cancer therapy selection), forms a comprehensive portfolio for therapy selection.
• Next-Generation MRD Program: NeoGenomics is investing in a dedicated research program focused on generating novel intellectual property for ultra-sensitive detection of low-shedding cancers. This initiative is structured with IP development in 2025, product and trial building in 2026, and a projected launch in 2027, demonstrating a long-term commitment to leading the MRD space.
• Strategic Collaborations: An exclusive multi-year partnership with Adaptive Biotechnologies, initiated with a pilot in Q3 2025, aims to advance Heme MRD monitoring. This collaboration allows for comprehensive and personalized assessment services (COMPASS and CHART) alongside Adaptive's NGS-based clonoSEQ MRD assay from a single bone marrow sample, driving incremental high-average revenue per test (AUP) COMPASS cases. Additionally, a collaboration with Ultima Genomics seeks to expand future clinical test offerings using the UG 100 sequencing platform, targeting high-quality, low-cost whole genome sequencing.

These technological advancements and strategic partnerships are crucial for NeoGenomics to maintain its competitive edge, drive higher average selling prices (ASPs), lower costs, improve margins, and solidify its market positioning in the evolving oncology landscape.

Business Model and Operational Momentum

NeoGenomics' business model centers on delivering a superior customer experience in the community setting. The company has significantly expanded its commercial resources, now approaching 140 salespeople, aiming for a one-to-one ratio between hospital pathology and community oncology call points. This expanded sales force, coupled with enhanced sales enablement efforts, is driving increased market penetration and adoption of NGS testing.

Operational excellence is a core tenet. The company improved its lab turnaround time by 11% annually compared to 2023, even amidst significant increases in test volumes. Furthermore, NeoGenomics implemented over 300 new interfaces with ordering accounts in 2024, a threefold increase over 2023, resulting in over 40% of customers having custom interfaces. These integrations enhance customer stickiness and materially increase revenue. The company's Net Promoter Score (NPS) improved to 74 in 2024 (from 70 in 2023), with oncology-specific respondents showing a notable increase from 42 to 64, underscoring its success in the challenging community oncology market.

Strategic acquisitions further bolster NeoGenomics' market presence. The acquisition of Pathline LLC in April 2025 significantly expands the company's footprint and capabilities in the Northeastern United States, a critical cancer care market. While Pathline is expected to be dilutive to adjusted EBITDA in 2025 due to initial integration costs and a higher cost per test, it is anticipated to be accretive to profitability and accelerate growth from 2026 onwards by leveraging NeoGenomics' broader test menu, including its full NGS offerings. Operational efficiencies are also expected from the multi-year LIMS project, which aims to consolidate eight legacy systems and streamline lab operations, with benefits materializing in 2026 and 2027. The implementation of Epic Aura solutions, expected to go live in late 2025, will further scale bidirectional interfaces, reduce turnaround times, and improve accounts receivable collection.

Financial Performance and Outlook

NeoGenomics delivered a solid third quarter in 2025, with total revenue reaching $187.8 million, representing a 12% increase year-over-year. The clinical business was a primary driver, growing 18% (15% excluding the Pathline acquisition), fueled by record test volumes, which increased 15% overall and 10.4% on a same-store basis. Average Revenue Per Test (AUP) for clinical tests rose 3% sequentially and year-over-year, with a 4% increase excluding Pathline, driven by a favorable mix of higher-value tests and strategic reimbursement initiatives. NGS revenue continued its robust trajectory, growing 24% over the prior year and now accounting for 33% of total clinical revenue. The five NGS products launched since 2023 contributed 24% of clinical revenue in Q3 2025.

Despite strong clinical performance, the non-clinical (pharma) segment faced significant headwinds, declining year-over-year and accounting for less than 9% of total revenue in Q3 2025. This weakness was attributed to market uncertainty, NIH funding challenges, drug pricing pressures, and the inability to sell new RaDaR 1.0 contracts following a legal settlement.

From a profitability standpoint, adjusted gross profit improved by 7% to $80.4 million in Q3 2025, though the gross profit margin slightly decreased to 42.8% from 44.6% in the prior year, primarily due to higher compensation and benefit costs and increased supplies expense. Adjusted EBITDA reached $12.2 million, marking the ninth consecutive quarter of positive adjusted EBITDA. However, the company reported a net loss of $27.1 million for the quarter. For the nine months ended September 30, 2025, total revenue was $537.2 million, with a net loss of $98.1 million. Operating expenses saw increases in general and administrative, research and development, and sales and marketing, reflecting ongoing investments in growth initiatives. Impairment charges totaled $7.1 million in Q3 2025, primarily related to the planned sale of Trapelo Health, LLC, and the wind-down of InVisionFirst-Lung.

Liquidity remains sound, with $164.1 million in unrestricted cash and cash equivalents as of September 30, 2025. The company successfully repaid $201.3 million in convertible senior notes due May 2025, demonstrating financial discipline.

Cash provided by operating activities for the nine months ended September 30, 2025, was $3.9 million. NeoGenomics anticipates capital expenditures of $30 million to $35 million for the full year 2025 and expects to generate positive free cash flow in 2026, which will further strengthen its balance sheet and provide flexibility for future investments and addressing the 2028 convertible notes.

For the full year 2025, NeoGenomics reiterated its revised guidance, expecting consolidated revenue in the range of $720 million to $726 million, representing 9% to 10% growth over 2024. Adjusted EBITDA is projected to be between $41 million and $44 million, reflecting 3% to 10% growth. The net loss is anticipated to be in the range of $116 million to $108 million. Management's confidence in this guidance stems from the continued strength of its clinical business, the strategic contributions from Pathline, and the anticipated ramp-up of new products like PanTracer LBx and RaDaR ST in the latter half of the year and into 2026.

Competitive Landscape and Strategic Positioning

NeoGenomics operates in a highly competitive oncology diagnostics market, contending with both large diversified diagnostic providers and specialized oncology testing companies.

Against industry giants like LabCorp (LH) and Quest Diagnostics (DGX), NeoGenomics differentiates itself through its specialized oncology focus. While LabCorp and Quest offer broader diagnostic menus and possess greater scale and distribution reach, NeoGenomics' depth in specific oncology tests—such as cytogenetics, FISH, flow cytometry, IHC, and advanced molecular analysis—provides a competitive edge in precision and tailored solutions. This specialization often translates into faster innovation cycles for oncology-specific advancements, which can be crucial for attracting pharmaceutical partners and specialized clinicians. However, NeoGenomics' smaller scale compared to these diversified players can lead to higher operating costs and potentially less efficient cash flow generation in broader, more commoditized testing segments.

When compared to specialized liquid biopsy and genomic testing firms like Guardant Health (GH), NeoGenomics offers a broader suite of comprehensive oncology testing, including traditional tissue-based diagnostics, which complements Guardant's liquid biopsy focus. NeoGenomics' established laboratory network across various regions provides more accessible services, while Guardant often leads in the speed of genomic analysis for certain applications. NeoGenomics' strategic alliances, such as the exclusive partnership with Adaptive Biotechnologies for Heme MRD, help it capture diverse oncology segments and integrate multiple testing modalities from a single sample, a significant patient and physician benefit.

Against cancer screening and diagnostics companies like Exact Sciences (EXAS), NeoGenomics' wider range of oncology services, including immunohistochemistry and digital imaging, offers more comprehensive diagnostic options. While Exact Sciences excels in patient-centric screening, NeoGenomics' full-service provider model and expertise in pathology and cytogenetics are particularly valuable for complex research applications and integrated diagnostic pathways.

NeoGenomics' competitive advantages, or "moats," include its proprietary technologies in advanced molecular and cytogenetic methods, its strong strategic alliances, and its deep relationships within the community oncology setting. The company's broad menu of over 500 tests, coupled with its ability to deliver rapid turnaround times, reinforces its position as a preferred partner for consolidating testing needs. The ongoing LIMS project and EPIC integrations are designed to further enhance customer experience and operational efficiency, making it easier for clinicians to do business with NeoGenomics and increasing customer stickiness.

However, NeoGenomics faces vulnerabilities, primarily its relatively smaller scale compared to larger rivals and its dependence on strategic partnerships. The pharma segment's sensitivity to macroeconomic factors, NIH funding, and drug pricing also poses a challenge, as evidenced by recent revenue shortfalls. The ongoing litigation with Natera, despite recent favorable rulings, introduces an element of uncertainty. Barriers to entry in oncology diagnostics, such as stringent regulatory approvals, intellectual property protections, and the need for specialized expertise, generally favor established players like NeoGenomics by defending its market position.

Conclusion

NeoGenomics is at a pivotal juncture, transforming its operational core while aggressively expanding its presence in high-growth oncology segments. The company's strategic focus on the community setting, coupled with its deep expertise in a broad range of oncology diagnostics and a robust pipeline of innovative technologies like PanTracer LBx and RaDaR ST, underpins a compelling investment thesis. While the non-clinical segment faces persistent macroeconomic headwinds, the strength and momentum of the clinical business are expected to drive sustained growth and profitability.

The company's commitment to operational excellence, evidenced by improving turnaround times, expanding interfaces, and strategic acquisitions like Pathline, reinforces its competitive standing. Technological leadership, particularly in NGS and next-generation MRD, positions NeoGenomics to capture significant market share in underpenetrated and rapidly expanding markets. Investors should monitor the successful commercialization and reimbursement trajectory of new products, the continued integration of acquired assets, and the resolution of ongoing legal and regulatory matters. With a clear strategic roadmap and a disciplined financial approach, NeoGenomics appears well-positioned to unlock substantial value by improving cancer care and delivering on its long-term growth ambitions.