FLGT

Image source: The Motley Fool. Thursday, July 30, 2026 at 4:30 p.m. ET Investor Relations - Lauren Sloane Chief Executive Officer - Ming Hsieh Chief Financial Officer - Paul Kim Chief Commercial Officer - Brandon Perthuis Operator: Greetings and welcome to the Fulgent Genetics Second Quarter 2026 Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Lauren Sloane, Investor Relations. Lauren, please go ahead. Lauren Sloane: Good afternoon and welcome to Fulgent's Second Quarter 2026 Financial Results Conference Call. On the call are Ming Hsieh, Chief Executive Officer; Paul Kim, Chief Financial Officer; and Brandon Perthuis, Chief Commercial Officer. The company's press release discussing the financial results is available on the investor relations section of the company's website, ir.fulgentgenetics.com. A replay of this call will be available shortly after the call concludes on the investor relations section of the company's website. Management's prepared remarks and answers to your questions on today's call will contain forward-looking statements. These forward-looking statements represent management's estimates based on current views, expectations, and assumptions, which may prove to be incorrect. As a result, matters discussed in any forward-looking statements are subject to risks, uncertainties, and changes in circumstances that may cause actual results to differ from those described in the forward-looking statements. The company assumes no obligation to update any of the forward-looking statements it may make today to reflect actual results or changes in expectations. Listeners should not rely on any forward-looking statements as predictions of the future and should listen to management's remarks today with the understanding that actual events, including the company's actual future results, may be materially different than what is described in or implied by these forward-looking statements. Please review the more detailed discussions related to these forward-looking statements, including the discussion of some of the risk factors that may cause results to differ from those described in the forward-looking statements contained in the company's filings with the Securities and Exchange Commission, including the previously filed 10-K for the year ended December 31, 2025, and subsequently filed reports, which are available on the company's Investor Relations website. Management's prepared remarks, including discussions of non-GAAP profit, loss, operating expense, margin, earnings, and earnings per share, and adjusted EBITDA contain financial measures not prepared in accordance with accounting principles generally accepted in the United States or GAAP. Management has presented these non-GAAP financial measures because it believes they may be useful to investors for various reasons, but these measures should not be viewed as a substitute for or superior to the company's financial results prepared in accordance with GAAP. Please see the company's press release discussing its financial results for the second quarter 2026 for more information, including the description of how the company calculates non-GAAP income and loss, non-GAAP earnings and loss per share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating profit and loss and margin and adjusted EBITDA, and a reconciliation of these financial measures to income and loss, earnings loss per share, and operating margin, the most directly comparable GAAP financial measures. The company does not provide reconciliations of forward-looking non-GAAP measures to the most directly comparable GAAP measures because the information necessary to calculate such reconciliations, including equity-based compensation, tax effects, acquisition-related items, and potential impairments, any of which may be material, is unavailable on a forward-looking basis without unreasonable effort and the probable significance of those items cannot be predicted. With that, I'd now like to turn the call over to Ming. Please go ahead. Ming Hsieh: Thank you, Lauren. I will start with some comments on our 2 business lines. Then Brandon will review our product and go-to-market update for our laboratory service business. And Paul will conclude with the financials and outlook before we take your questions. I'm pleased with the momentum in our therapeutic development business as we progress on our clinical pipeline. In June, we presented the findings from the Phase II trial data for FID-007, which demonstrated encouraging activity in recurrent or metastatic head and neck squamous cell carcinoma. Fulgent has taken a differentiated approach with FID-007, is a novel nanoencapsulated paclitaxel candidate developed with Fulgent's CleanChemo platform. The platform is designed to reduce toxicity typically associated with conventional chemotherapy while maintaining or improving efficacy. A profile that Fulgent believes is preferable in combination oncology regimens. With Phase II complete and the encouraging data now presented to public at ASCO. We are focused on the next milestone. We have confirmed the end of Phase II meeting with the FDA, which is scheduled later this summer. We believe the Phase II we have generated provides a strong foundation going into the FDA's discussion. Our Phase III study is in preparation, and we hope to enter into a Phase III registration trial for the treatment of recurrent or metastatic head and neck squamous cell carcinoma patients in the first half of 2027. We are encouraged by our clinical trial progress achieved so far, and I believe entering into the Phase III registration trial will further increase the probability of the success of the commercialization of FID-007 for treatment of recurrent metastatic head and neck squamous cell carcinoma patients who currently have very few effective treatment options. We also want to reiterate our position on partnerships. We have financial strength to advance through the Phase II on our own, but we are open to collaboration discussions. We intend to approach those conversations with a focus on partners who bring both resources and long-term strategic alignment. Our second clinical candidate, FID-022, is progressing to the Phase I dose escalation with the first dose level successfully completed. We expect to determine the maximum tolerated dose level later this year. FID-022 is a nanoencapsulated SN38 for the treatment of solid tumors, including potentially colon, pancreatic, ovarian, and bile duct cancers. Please note that both FID-007 and FID-022 are derived from the same proprietary CleanChemo delivery platform, patented and fully owned by Fulgent. Similar to FID-007, FID-022 can also be used in various oncology drug combinations. In the laboratory service business, we continue to see our AI and the digital pathology solution work at an accelerated pace and continue to expand our AI portfolio. As we drive the innovation across our business and have seen sustained demand and a consistent testing volume, we are also managing the transition of our billing and revenue cycle management system. This transition has caused delays in billing and the processing of claims and impacted our ability to collect at our historical rates and reduce the amount of revenue we are able to recognize from the tests we have performed. Addressing revenue cycle landings is our top operational priority, and we are making progress. I would like to thank our employees, partners, and stakeholders for your hard work and loyalty. I will now turn the call over to Brandon Perthuis, our Chief Commercial Officer, to talk more about our laboratory service business. Brandon? Brandon Perthuis: Thank you, Ming. We ended the quarter at $85.4 million, an increase of 4% year-over-year and 20% sequentially. In the second quarter, we did have the new acquisitions of Bako and StrataDX integrated, which contributed to the overall performance. Breaking it down further, Precision Diagnostics ended at $41.5 million, a decrease of 13% year-over-year, but increased 3% sequentially. Anatomic Pathology came in at $37.5 million, an increase of 33% year-over-year and 50% sequentially. And BioPharma Services ended the quarter at $6.4 million, an increase of 3% year-over-year and 11% sequentially. These numbers were affected by delays in billing and a decline in collection rates related to the ongoing transition of our revenue cycle management and billing system, which I will address in more detail shortly. Paul will also discuss the related financial impact. We continue to see a real impact on operations from the development and use of AI. This quarter we expanded our AI portfolio with a novel staining-aware algorithm designed to automate mast cell quantification in gastrointestinal biopsies, an important biomarker in diseases such as systemic mastocytosis and mastocytic enterocolitis. Traditional AI approaches have struggled to accurately quantify mast cells due to diffuse tryptase staining associated with cell degranulation, limiting the reliability of automated analysis. Our proprietary Mast AI platform overcomes this challenge through a DAB-guided deep learning approach that accurately separates individual mast cells from surrounding extracellular staining. In validation study, the platform demonstrated strong performance across multiple staining methods, delivering highly accurate and reproducible quantification without requiring manual perimeter adjustments. This represents another example of our ability to solve complex pathology challenges using proprietary AI. Beyond improving workflow efficiency and diagnostic consistency, the technology establishes a foundation for advanced spatial biomarker analysis and quantitative pathology applications in eosinophilic esophagitis and other gastrointestinal inflammatory diseases. As we continue to expand our AI-enabled diagnostic portfolio, we believe these capabilities further differentiate our end-to-end digital pathology platform and create additional opportunities to deliver value to clinicians, pharmaceutical partners, and healthcare systems. The second quarter was our first full quarter of having Bako and StrataDX integrated. From the operations perspective, things have gone incredibly well. There has been minimal disruption to turnaround time and client ordering patterns. The focus going forward is to move the operation to digital pathology so we can both use and develop new AI tools to improve efficiency and quality. I would like to congratulate the operation teams on both sides for doing such an excellent job. These represented our fourth and fifth acquisitions. We believe we have proven we can successfully acquire and integrate new assets. In terms of the sales team, the Bako and StrataDX teams have been fully cross-trained and are now selling our legacy Anatomic Pathology services in dermatology and GI, in addition to their previous services. So far, the initial progress has been encouraging with the team building a robust pipeline of opportunities quickly. The new combined Anatomic Pathology team is at approximately 40, which is nearly double our size pre-acquisition. Previously, we mentioned we entered into an agreement with Epic to be added to their Aura platform. Aura is Epic's specialty diagnostics platform offering genetic testing services within health systems' electronic medical records to send orders and receive results. Both sides have been working diligently to complete the integration, and we are scheduled to go live with early adopters in the third quarter. Once live, it streamlines the process of interfacing with clients and improves access to genetic testing information within the EMR. We look forward to going live with Aura and using it as a conduit to make ordering easier for our clients and strengthening our client relationships. We continue to push the envelope related to what can be accomplished with whole genome sequencing. Our standard whole genome sequencing service is now on the Illumina TruePath system, which is a short-read light technology that maintains high accuracy while providing long-range genomic insights not achievable with standard short-read sequencing. With this new approach, our mean sequencing coverage increased from 40x to 60x to 70x. In addition, we are now able to expand the number of repeat expansions we cover. Coverage grew from 21 to 64, broadening the diagnostic scope for patients presenting with a wide range of neurological, neuromuscular, and other expansion associated conditions. This new whole genome sequencing test can be ordered with our RNA integrated sequencing evaluation or RISE. RISE provides functional insights into genetic variants, enabling deeper characterization of pathogenicity. RISE also detects aberrant gene expression, monoallelic gene expression, and aberrant splicing of expressed target genes. These features combine to cast the widest net possible, enabling improved diagnostic yield for those patients and families seeking answers to complex phenotypes. As Ming touched on, we are managing the final phase of the transition of our billing and revenue cycle management system. We originally undertook this transition to achieve greater consistency across our operations and to drive long-term efficiency, and we successfully finished Phase I and Phase II of the implementation. However, the most significant impact has been in the final phase of this transition. The system is very complex, and we have encountered challenges mostly related to implementing the customizations needed in this new system to maximize reimbursement that were not fully built into the initial launch. That customization work remains ongoing today. We have made progress implementing a number of the required customizations and remain focused on completing the remaining work as quickly as possible. As the remaining customizations are completed and integrated across our revenue cycle, we expect our collection rates to improve, though we cannot predict the exact timing of that improvement. Thanks for your time today. We appreciate you joining our call. I'll now turn it over to Paul Kim, our Chief Financial Officer. Paul? Paul Kim: Thank you, Brandon. Revenue in the second quarter of 2026 totaled $85.4 million, including $16.9 million from Bako Diagnostics and StrataDX, compared to $71.1 million in the first quarter of 2026. The increase in our Q2 revenue was primarily due to the integration of Bako Diagnostics and StrataDX for the full quarter. GAAP gross margin was 30.1%, and non-GAAP gross margin for the second quarter was 31.3%. The decline in gross margin reflects fixed costs spread over a lower revenue base, driven by the lower collection rate. We expect gross margins to normalize as our collection rate returns to historical norms and as revenue increases. Now turning to operating expenses. Total GAAP operating expenses were $61.8 million for the second quarter, which increased when compared to $56.1 million in the prior quarter. The increase in operating expenses was due to Bako Diagnostics and StrataDX being integrated for the full quarter. The GAAP operating expenses also include a one-time impairment charge on customer relationship intangible assets of $2.2 million related to loss of a customer in the therapeutic development segment. Non-GAAP operating expenses also increased in Q2, totaling $49.2 million compared to $42.6 million in the previous quarter. GAAP operating margin improved to a minus 42.3% in Q2 compared to a minus 48.7% in Q1. Non-GAAP operating margin improved sequentially to a minus 26.2% in Q2 compared to a negative 27.7% in Q1. Our GAAP loss in the current quarter was $29.5 million, an increase from prior quarter's GAAP loss of $24.8 million, and a GAAP loss of $1.05 per share based on 28 million weighted average diluted shares outstanding. On a non-GAAP basis and excluding equity-based compensation expense, intangible asset amortization, impairment loss, and acquisition-related costs and severance, loss for the quarter was approximately $16.2 million, or $0.58 per share, based on 28 million weighted average diluted shares outstanding. Adjusted EBITDA for the second quarter was a loss of approximately $17.1 million compared to a loss of $15.2 million in the prior quarter. In the second quarter, we repurchased over 1.5 million shares of our stock repurchase program. Since the inception of the stock repurchase program in March 2022, a total of over 7.5 million shares of our common stock have been repurchased under the program with approximately $75.8 million currently remaining available for future repurchases of our common stock. Turning to the balance sheet, we ended the second quarter with approximately $551.5 million in cash, cash equivalents, restricted cash, and marketable securities. The $53.2 million decrease in cash from the previous quarter is primarily driven by $23.8 million spent on our stock repurchase program, one-time $13.5 million payment towards a legal settlement, which was originally discussed and accrued in Q4 of 2025 and $14.1 million cash used in operations and CapEx. As of quarter end, we have not yet received the $106.1 million federal income tax refund, which has been delayed due to constrained resources at the IRS. Before providing our guidance for 2026, I'd like to provide an update on certain drivers shaping our expectations for the year and anticipated impact from our recent acquisition of Bako Diagnostics and StrataDX. Our revised outlook for 2026 is based on lower than originally anticipated rate of collections. Core customer volume assumptions remain consistent with the original outlook, but we've also moderated our new business growth expectations. Additionally, we anticipated and mentioned on our calls in February and April, we saw a decrease in revenue from our largest customer, which is moving its testing capabilities in-house. Revenue from this customer this quarter decreased $4.6 million from the prior quarter. We anticipate a continued decline in revenue from this customer through the second half of the year. We believe this decrease in revenue from our largest customer will be partially or fully offset by the estimated contribution of approximately $53 million from Bako and StrataDX contributing to overall revenue growth in the second half of the year. Bako's revenue will primarily be categorized as Anatomic Pathology. We continue to forecast that for full year 2026, no single customer will account for more than 10% of our total revenue, reflecting an improvement in our customer concentration profile. We are revising our full year revenue guidance. We now expect total revenue to be in the range of $330 million to $340 million for 2026, down from our prior guidance of $350 million. This represents a year-over-year growth of 2.3% and 5.4%. We now estimate Precision Diagnostics' revenues to be approximately $161 million to $166 million. Anatomic Pathology to be approximately $146 million to $150 million, and BioPharma Services to be approximately $23 million to $24 million. On margins, we now expect full-year non-GAAP gross margins to be in the mid-30% range, reflecting product mix shifts tied to our changing customer composition and lower collection rates associated with the transition of our new revenue cycle management and billing system. We expect non-GAAP operating margins to be in the mid-minus 20% for the year. We continue to prioritize investment across 2 key areas: R&D, where we are advancing our laboratory testing capabilities and clinical study pipeline, and sales and marketing, where we have grown the team. Our sales and marketing spend this year reflects a full year of our expansion that began last year, combined with the recent Bako and StrataDX acquisition, which more than doubled their sales team. The anticipated spend for the therapeutic development business remains at approximately $26 million in 2026 as we continue advancing clinical trials for FID-022 and FID-007. We remain committed to strategic investment in our business, including operational improvements and targeted upgrades to our laboratory infrastructure. These investments are designed to strengthen our competitive position and enhance throughput capacity over time. We believe our foundational technology platform is highly scalable, capable of driving meaningful operating leverage and margin expansion as volumes grow. The updates to our EPS and cash guidance are attributable to our revised revenue guidance and the decreased shares resulting from the stock repurchase program and the cash used for these repurchases. Our forecasted average fully diluted share count for 2026 has decreased from approximately 29 million shares to approximately 28 million shares due to additional shares purchased under our stock repurchase program since our last earnings call. Using the updated average share count of 28 million and revised revenue guidance, we now expect full year 2026 non-GAAP EPS guidance to be a loss of $2.22 to $2.35 per share. This excludes stock-based compensation, impairment loss, acquisition-related costs, amortization of intangible assets, and any further share repurchases as well as any one-time charges. Finally, our cash position remains strong. For fiscal year 2026, assuming capital purchases of $12 million, spend on our therapeutic development business of $26 million, and excluding any future stock repurchases or other expenditures outside of ordinary course, which could include additional M&A, we anticipate ending the year with approximately $610 million of cash, cash equivalents, restricted cash, and investments and marketable securities. The decrease from our prior forecast of $636 million is mainly attributable to the $15.2 million of stock repurchases made since our last earnings call and revised revenue guidance. We continue to have conviction in the strength of our business and our technology platform and are remedying the internal operations challenge. We're executing against our strategic initiatives to drive AI and digital solutions across our laboratory services business and are proud of the momentum on our pharmaceutical pipeline. We believe we're well-positioned for longer-term growth as our strategic investments, innovations, and expanded offerings deliver value. Thank you for joining our call today. Operator, you may now open it up for questions. Operator: [Operator Instructions] Our first question today is coming from David Westenberg from Piper Sandler. Your line is now live. Karan Patel: This is Karan Patel on for David Westenberg. I guess, I'll start with some of the RCM transition issues. Maybe if you could help us pinpoint what specifically in this final phase is causing these many delayed issues, and do you have maybe an estimated timeline for resolution here? And I have a few follow-ups. Brandon Perthuis: Yes, certainly. This is Brandon. Thank you for the questions. I think as we mentioned, you know, we did make the change in our billing software. We completed Phase I and Phase II of that. And as we moved into Phase III, we really began to realize there was just certain key features or customization that was in the previous software that did not carry over to the new platform. I think we've identified those features. We're working on implementing those features. It will take some time to get some feedback from the payers, but in terms of timing, I think we do expect to get back to our historical collection rates in the coming quarters. Karan Patel: And, I guess, maybe if you can help us pinpoint maybe what percentage of Q2 revenues were lowered because of this suppressed collection rate? And then, I guess, separately, are these delayed collections, are they maybe recoverable down the road and they show up as true-ups in future quarters? Or is it a fully loss of revenue? Paul Kim: This is Paul Kim. In terms of the shortfall for Q2 as well as for the rest of the year, without this issue that Brandon he described, we would have reiterated our fiscal year guidance, and Q2 would have been in line with our original expectations. If you kind of like take a step back and look at the overall business, our capabilities and our services haven't changed at all. Actually, they've gotten better. And the volume and the volume projections for the business are intact. It actually looks very promising. It's just the collection rate that we're using to record revenues. It's been lower than our historical rates. And you also had a question on recoverability. Assuming -- and we can't assume this because we experienced this before, we can get back to the historical rates. Our business would have been fine in terms of posting our Q2 results as well as for the year. And should we get additional synergies from better contracts and better effort that we have here at the company, there could be potentially upside to our collection rate. I mean, that's getting a little too far ahead of ourselves. For right now, what we want to do is to remedy this issue. We want to be able to get back to our historical collection rates and then go on from there. Karan Patel: And maybe one last one on the large carrier screening customer moving volumes in-house. I guess, can you help us maybe -- is that transition kind of fully complete? I know you've mentioned that earlier, and maybe what is a residual run rate? How can we think about that going forward? Brandon Perthuis: Yes, that transition is nearly fully complete. And if I'm not mistaken, Paul, I think we don't have much revenue built into the model for them in the back half of the year. Paul Kim: We are getting some. Brandon Perthuis: Yes. Paul Kim: We are getting some. But we don't have a whole lot built into our projections. Karan Patel: Understood, guys. Well, thank you so much, and no more from me. Operator: We reached the end of our question and answer session. And ladies and gentlemen, that does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today. Before you buy stock in Fulgent Genetics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fulgent Genetics wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Fulgent Genetics. The Motley Fool has a disclosure policy. Fulgent Genetics (FLGT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the second-quarter revenue performance to the successful integration of Bako Diagnostics and StrataDX, which offset a $4.6 million decline from the company's largest customer. A significant transition in the billing and revenue cycle management (RCM) system caused delays in claim processing and lower collection rates, impacting recognized revenue despite consistent testing volumes. The therapeutic development segment achieved a milestone with Phase II data for FID-007, demonstrating encouraging activity in head and neck cancers with reduced toxicity via the proprietary CleanChemo platform. Operational focus in the laboratory business is shifting toward digital pathology and AI integration to drive long-term efficiency and diagnostic consistency across the newly expanded portfolio. The company successfully integrated its fourth and fifth acquisitions, doubling the sales team to approximately 40 members to cross-sell anatomic pathology and legacy services. Strategic positioning in the diagnostics market was bolstered by joining Epic's Aura platform, intended to streamline genetic testing orders within health system electronic medical records. Full-year 2026 revenue guidance was revised downward to $330 million–$340 million, primarily reflecting lower anticipated collection rates and moderated new business growth expectations. Management expects to enter a Phase III registration trial for FID-007 in the first half of 2027 following an upcoming end-of-Phase II meeting with the FDA. The company anticipates a continued decline in revenue from its largest customer through the second half of the year as that client moves testing capabilities in-house. Non-GAAP gross margins are expected to normalize in the mid-30% range as RCM customizations are completed and collection rates return to historical norms. Cash reserves are projected to end the year at approximately $610 million, accounting for $26 million in therapeutic R&D spend and $12 million in capital expenditures. A one-time impairment charge of $2.2 million was recorded on customer relationship intangible assets following the loss of a customer in the therapeutic development segment. The RCM system transition remains the top operational priority, as missing customizations from the previous software have hindered the ability to maximize reimbursements. A $13.5 million cash payment was made during the quarter to settle a legal matter originally accrued in late 2025. A $106.1 million federal income tax refund remains delayed due to resource constraints at the IRS, impacting current cash balances. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that Phase III of the RCM transition revealed that key features and customizations from the legacy software did not carry over to the new platform. The company is currently implementing these customizations but noted it will take time to receive feedback from payers to verify the fix. Management expects collection rates to return to historical levels in the coming quarters but declined to provide an exact date. Management clarified that the revenue shortfall was driven by the lower collection rate used to record revenue, rather than a drop in actual testing volume. While they hope for potential 'true-ups' or upside if collection efforts improve, they are currently focused on reaching historical stability before projecting recovery of past shortfalls. The transition of the large carrier screening customer is nearly complete, with minimal revenue from this source built into the projections for the second half of the year. Management noted that the successful integration of recent acquisitions is expected to fully or partially offset this specific revenue headwind.

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Fulgent Genetics Inc (NASDAQ:FLGT) reported encouraging phase 2 data for FID007 in head and neck cancer, presented at ESMO, and is preparing for a phase 3 registration trial in 1H 2027. The company's second clinical candidate, FID022, is progressing well in dose escalation, with the maximum tolerated dose expected later this year. Revenue grew 4% year-over-year and 20% sequentially in Q2 2026, driven by the integration of Baco Diagnostics and Strata DX. The company expanded its AI portfolio with a novel staining-aware algorithm for mast cell quantification, enhancing its digital pathology capabilities. Fulgent Genetics Inc (NASDAQ:FLGT) successfully integrated its fourth and fifth acquisitions, with minimal disruption and a doubled sales team, building a robust pipeline of opportunities. The company's whole genome sequencing service now offers higher coverage (60-70x) and expanded repeat expansion coverage (from 21 to 64), improving diagnostic yield. Fulgent Genetics Inc (NASDAQ:FLGT) faced significant billing and revenue cycle management system transition issues, causing delays in claims processing and lower collection rates, impacting revenue recognition. The company revised its full-year 2026 revenue guidance downward to $330-$340 million from $350 million, reflecting lower collection rates and moderated growth expectations. Revenue from the largest customer decreased by $4.6 million sequentially as it moves testing capabilities in-house, with further declines expected in the second half of the year. Gross margins declined to 30.1% (GAAP) and 31.3% (non-GAAP) due to fixed costs spread over a lower revenue base, with expectations of mid-30% for the full year. The company reported a GAAP net loss of $29.5 million and a non-GAAP loss of $16.2 million in Q2, with adjusted EBITDA loss of $17.1 million. Cash balance decreased by $50.3 million in Q2, partly due to a $13.5 million legal settlement payment and $15.2 million spent on stock repurchases, while the $106.1 million federal tax refund remains delayed. Warning! GuruFocus has detected 4 Warning Signs with FLGT. Is FLGT fairly valued? Test your thesis with our free DCF calculator. Q: Can you pinpoint what specifically in the final phase of the RCM transition is causing the billing delays, and do you have an estimated timeline for resolution?A: Brandon Peress, Chief Commercial Officer, explained that after completing phases 1 and 2 of the billing software transition, they realized in phase 3 that certain key features and customizations from the previous software did not carry over to the new platform. These customizations are critical for maximizing reimbursement. The team has identified these features and is actively working on implementing them. While it will take time to get feedback from payers, the company expects to return to historical collection rates in the coming quarters. Q: Can you quantify what percentage of Q2 revenues were lowered by the suppressed collection rate, and are these delayed collections recoverable in future quarters or fully lost?A: Paul Kim, CFO, stated that without the RCM issue, the company would have reiterated its fiscal year guidance, and Q2 would have been in line with original expectations. The underlying business capabilities, services, and volume projections remain intact. The issue is solely the collection rate used to record revenue, which is lower than historical rates. If the company can return to historical rates, future results would be fine, and there could even be potential upside from better contracts and improved efforts. Q: Is the transition of the large carrier screening customer moving volumes in-house fully complete, and what is the residual run rate going forward?A: Brandon Peress, Chief Commercial Officer, confirmed that the transition is nearly fully complete. Paul Kim added that the company has not built much revenue into the model for this customer for the back half of the year, meaning the financial impact has largely been accounted for in the revised guidance. Q: What is the status of the FID-007 phase 2 data and the path to a phase 3 registration trial?A: Ming Hsieh, CEO, highlighted that phase 2 data for FID-007, a novel nano-encapsulated paclitaxel for recurrent or metastatic head and neck squamous cell carcinoma, was presented at ESCO and demonstrated encouraging activity. The company has confirmed an end-of-phase-2 meeting with the FDA scheduled for later this summer. They are preparing for a phase 3 registration trial, with enrollment expected to begin in the first half of 2027. The company is open to partnership discussions but has the financial strength to advance independently. Q: What is the progress on the second clinical candidate, FID-022?A: Ming Hsieh, CEO, reported that FID-022, a nano-encapsulated at-3A for solid tumors, is progressing through dose escalation with the fourth dose level successfully completed. The company expects to determine the maximum tolerated dose level later this year. FID-022 is derived from the same proprietary clean chemo delivery platform as FID-007 and can be used in oncology drug combinations. Q: How are the recent acquisitions of Bacco Diagnostics and Strata DX performing, and what is the integration status?A: Brandon Peress, Chief Commercial Officer, stated that Q2 was the first full quarter with these acquisitions integrated, and operations have gone incredibly well with minimal disruption to turnaround times and client ordering. The sales teams have been fully cross-trained and are now selling legacy anatomic pathology services in dermatology and GI. The combined anatomic pathology sales team is now approximately 40 people, nearly double the pre-acquisition size, and has built a robust pipeline of opportunities. Q: What is the status of the Epic A platform integration, and when will it go live?A: Brandon Peress, Chief Commercial Officer, confirmed that both sides have been working diligently on the integration with Epic's specialty diagnostics platform. The company is scheduled to go live with early adopters in the third quarter. This integration will streamline the process of interfacing with clients and improve access to genetic testing information within the EMR, making ordering easier for clients and strengthening client relationships. Q: What are the key updates to the whole genome sequencing service and the AI portfolio?A: Brandon Peress, Chief Commercial Officer, detailed that the standard whole genome sequencing service is now on the Aluminum TrueP system, which provides long-range genomic insights with mean sequencing coverage increased from 40x to 60-70x. The number of repeat expansions covered grew from 21 to 64. Additionally, the company expanded its AI portfolio with a novel staining-aware algorithm for automated mast cell quantification in gastrointestinal biopsies, which addresses a previously challenging problem in digital pathology. Q: What is driving the revised full-year 2026 revenue guidance, and what are the new expectations?A: Paul Kim, CFO, explained that the revised guidance is based on lower-than-anticipated collection rates and moderated new business growth expectations. Core customer volume assumptions remain consistent. The company now expects total revenue of $330-340 million for 2026, down from the prior guidance of $350 million. This reflects year-over-year growth of 2.3-5.4%. The decrease in revenue from the largest customer, which is moving testing in-house, is expected to be partially or fully offset by the estimated $53 million contribution from Bacco and Strata DX. Q: What are the updated margin and EPS expectations for 2026?A: Paul Kim, CFO, stated that full-year non-GAAP gross margins are now expected to be in the mid-30% range, reflecting product mix shifts and lower collection rates. Non-GAAP operating margins are expected to be in the mid-minus-20% range. The company now expects full-year 2026 non-GAAP EPS loss of $2.22 to $2.35 per share, based on an updated average share count of 28 million shares. The company also anticipates ending the year with approximately $610 million in cash, a decrease from the prior forecast due to stock repurchases and revised revenue guidance. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Fulgent Genetics, Inc.? Here are five stocks we like better. Second-quarter revenue rose to $85.4 million, up 20% sequentially, with Bako Diagnostics and StrataDx contributing $16.9 million. However, billing-system transition issues reduced collections, pressured gross margins and contributed to a $29.5 million GAAP net loss. Fulgent lowered 2026 revenue guidance to $330 million–$340 million from $350 million, citing weaker collection rates, slower new-business growth and declining revenue from a major customer bringing testing in-house. The company ended the quarter with $551.5 million in cash, while advancing integration efforts, an AI pathology tool, Epic’s Aura platform launch and clinical development of its FID-007 and FID-022 drug candidates. Can Fulgent Sustain Sky-High Growth Post-Pandemic? Fulgent Genetics (NASDAQ:FLGT) reported second-quarter 2026 revenue of $85.4 million, up 20% sequentially and 4% from a year earlier, as the company incorporated a full quarter of contributions from Bako Diagnostics and StrataDx. Management also lowered its full-year revenue outlook, citing lower collection rates during a transition to a new billing and revenue-cycle-management system. Chief Financial Officer Paul Kim said Bako Diagnostics and StrataDx contributed $16.9 million of second-quarter revenue. Revenue had totaled $71.1 million in the first quarter. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The company’s Precision Diagnostics segment generated $41.5 million in revenue, down 13% year over year but up 3% sequentially. Anatomic Pathology revenue rose 33% year over year and 50% sequentially to $37.5 million, while Biopharma Services revenue increased 3% from a year earlier and 11% from the prior quarter to $6.4 million. Management said the final phase of its billing and revenue-cycle-management system rollout delayed billing and claims processing, reduced collections and limited the amount of revenue the company could recognize from tests already performed. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Chief Commercial Officer Brandon Perthuis said the company completed the first two phases of the transition, but discovered in the third phase that certain features and customizations in the prior software had not carried into the new platform. Fulgent has identified the needed features and is implementing them, though Perthuis said it will take time to receive payer feedback. “We do expect to get back to our historical collection rates in the coming quarters,” Perthuis said during the question-and-answer session. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Kim said that without the collection-rate issue, Fulgent would have reaffirmed its previous full-year outlook and second-quarter results would have aligned with its original expectations. He said the company’s testing capabilities, services and volume assumptions remain intact, while the main issue is the lower collection rate being used to recognize revenue. Second-quarter GAAP gross margin was 30.1%, while non-GAAP gross margin was 31.3%. Kim attributed the decline to fixed costs being spread across a lower revenue base due to reduced collections. He said gross margins are expected to normalize as collection rates return to historical levels and revenue grows. GAAP operating expenses increased to $61.8 million from $56.1 million in the first quarter, reflecting the full-quarter integration of Bako and StrataDx. Operating expenses also included a $2.2 million one-time impairment charge related to a customer-relationship intangible asset after the loss of a therapeutic-development customer. Fulgent recorded a GAAP net loss of $29.5 million, or $1.50 per share, compared with a $24.8 million GAAP loss in the prior quarter. Its non-GAAP loss was $16.2 million, or $0.58 per share, while adjusted EBITDA was a loss of $17.1 million, compared with a $15.2 million loss in the first quarter. Fulgent lowered its 2026 revenue guidance to a range of $330 million to $340 million, from prior guidance of $350 million. The revised range represents expected year-over-year growth of 2.3% to 5.4%. The company now expects approximately $161 million to $166 million in Precision Diagnostics revenue, $146 million to $150 million in Anatomic Pathology revenue, and $23 million to $24 million in Biopharma Services revenue for the year. Management said the revised outlook reflects lower-than-anticipated collection rates and moderated expectations for new business growth. It also incorporates a continuing reduction in revenue from Fulgent’s largest customer, which is moving testing capabilities in-house. Revenue from that customer fell $4.6 million sequentially in the second quarter, and the company expects further declines during the second half. Kim said Bako and StrataDx are expected to contribute about $53 million during the second half, potentially partially or fully offsetting the decline from the large customer. Fulgent expects no individual customer to account for more than 10% of full-year revenue. For 2026, the company expects non-GAAP gross margin in the mid-30% range and non-GAAP operating margin in the mid-negative-20% range. It forecast a non-GAAP loss per share of $2.22 to $2.35, based on an expected average diluted share count of about 28 million. Fulgent ended the quarter with $551.5 million in cash equivalents, restricted cash and marketable securities. Cash declined by $53.2 million from the prior quarter, primarily due to $23.8 million in share repurchases, a $13.5 million legal-settlement payment and $14.1 million used for operations and capital expenditures. The company said it had not yet received a $106.1 million federal income-tax refund because of IRS resource constraints. Perthuis said Bako and StrataDx experienced minimal disruption to turnaround times and client ordering patterns following integration. The acquired sales teams have been cross-trained to sell Fulgent’s legacy dermatology and gastrointestinal anatomic pathology offerings, and the combined anatomic pathology sales organization now includes about 40 people. The company also said it expanded its artificial-intelligence pathology portfolio with an algorithm intended to automate mast-cell quantification in gastrointestinal biopsies. Perthuis said the tool uses a DAB-guided deep-learning approach to distinguish individual mast cells from extracellular staining. Fulgent plans to go live with early adopters of Epic’s Aura specialty diagnostics platform in the third quarter. The integration is designed to enable genetic-test ordering and results delivery through health systems’ electronic medical records. In therapeutic development, Chief Executive Officer Ming Hsieh said the company presented Phase II data in June for FID-007, a nano-encapsulated paclitaxel candidate for recurrent or metastatic head and neck squamous cell carcinoma. The company has scheduled an end-of-Phase-II meeting with the Food and Drug Administration for later this summer and is preparing for a Phase III registration trial that it hopes to begin in the first half of 2027. Fulgent’s second candidate, FID-022, a nano-encapsulated SN-38 treatment candidate for solid tumors, is progressing through Phase I dose escalation. Management expects to determine the maximum tolerated dose later this year. Fulgent Genetics, Inc (NASDAQ: FLGT) is a California-based company specializing in high-complexity genetic testing and diagnostic services. Operating from its headquarters in Temple City, Fulgent leverages next-generation sequencing (NGS) technologies and advanced bioinformatics to deliver a broad range of clinical and research assays. The company's infrastructure includes CAP- and CLIA-certified laboratories, enabling it to process large volumes of samples with rapid turnaround times. Fulgent's product portfolio encompasses hereditary cancer panels, rare disease and neuromuscular disorder testing, pharmacogenomic screenings, non-invasive prenatal tests, and infectious disease assays including COVID-19 diagnostics. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Fulgent Genetics Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Revenue of $85.4 million, growing 20.1% sequentially GAAP gross profit of $25.7 million, or GAAP gross margin of 30.1%; Non-GAAP gross profit of $26.8 million, or Non-GAAP gross margin of 31.3% GAAP loss of $29.5 million, or $(1.05) per share; Non-GAAP loss of $16.2 million, or $(0.58) per share Executed on stock repurchase program; purchased approximately 1.5 million shares in the second quarter of 2026 totaling $23.8 million in cash Ended the second quarter of 2026 with $551.5 million of cash, cash equivalents, restricted cash, and investments in marketable securities, excluding an anticipated tax refund of approximately $106.1 million Revised annual revenue guidance to be in the range of $330.0-$340.0 million EL MONTE, Calif., July 30, 2026--(BUSINESS WIRE)--Fulgent Genetics, Inc. (NASDAQ: FLGT) ("Fulgent," or the "Company"), a technology-based company with a well-established laboratory services business and a therapeutic development business, today announced financial results for its second quarter ended June 30, 2026. Second Quarter 2026 Results: Revenue of $85.4 million GAAP loss of $29.5 million, or $(1.05) per share Non-GAAP loss of $16.2 million, or $(0.58) per share Adjusted EBITDA loss of $17.1 million Non-GAAP income (loss), non-GAAP income (loss) per share, adjusted EBITDA income (loss), non-GAAP gross profit and margin, and non-GAAP operating income (loss) and margin are described below under "Note Regarding Non-GAAP Financial Measures" and are reconciled to the most directly comparable GAAP financial measure, GAAP income (loss), GAAP gross profit and margin, and GAAP operating income (loss) and margin, in the accompanying tables. Ming Hsieh, Chairman of the Board of Directors and Chief Executive Officer, said, "In the second quarter, we had the honor of presenting the encouraging findings from Phase 2 data for FID-007 at the 2026 American Society of Clinical Oncology (ASCO) meeting, and we are encouraged by our clinical trial progress for both FID-007 and FID-022. We continue to execute on our strategic initiatives in our laboratory services business as we expand our AI portfolio and integrate digital pathology and are seeing a real impact from our AI tools with improved efficiency and quality." Paul Kim, Chief Financial Officer, said, "We are revising our revenue guidance for the year as a result of processing delays impacting our collection rate related to the final phase of the transition of our revenue cycle management and billing system. We are working to remedy the issue and remain confident in the fundamental strength of our business." Outlook: For the full year 2026, Fulgent now expects: Revenue to be in the range of $330.0-$340.0 million Non-GAAP loss of approximately $63.0-$67.0 million Non-GAAP loss of approximately $2.22-$2.35 per share, which includes the impact of a reduction of 4.1 million shares used for the stock repurchase program, year to date as of June 30, 2026 Cash, cash equivalents, restricted cash, and investments in marketable securities of approximately $610.0 million, which includes $63.9 million cash used for the stock repurchase program, year to date as of June 30, 2026* *Cash expenditures may be higher or lower than currently estimated due to a variety of factors and circumstances, including as a result of the Company’s ongoing stock repurchase program, or other expenditures outside the ordinary course of business, including M&A. This number further assumes receipt of approximately $106.1 million in tax refunds prior to December 31, 2026, which have been delayed as a result of constrained resources at the IRS; and assumes capital purchases of $12 million, no further repurchases under the stock repurchase program, and spend on the therapeutic development business of $26 million. The timing and amount of any future repurchases pursuant to the stock repurchase program will depend on a variety of factors, including the market price of Fulgent’s common stock, general market and economic conditions and other factors Fulgent’s board of directors may deem relevant. Conference Call Information Fulgent will host a conference call for the investment community today at 4:30 PM ET (1:30 PM PT) to discuss its second quarter 2026 results. The call may be accessed through a live audio webcast in the Investor Relations section of the Company’s website, http://ir.fulgentgenetics.com. An audio replay will be available at the same location. Note Regarding Non-GAAP Financial Measures Certain information set forth in this press release and/or to be discussed on the Company’s earnings call, including non-GAAP income (loss), non-GAAP income (loss) per share, adjusted EBITDA income (loss), non-GAAP gross profit and margin, and non-GAAP operating income (loss) and margin, are non-GAAP financial measures. Fulgent believes this information is useful to investors because it provides a basis for measuring the performance of the Company’s business, excluding certain income or expense items that management believes are not directly attributable to the Company’s operating results. Fulgent defines non-GAAP income (loss) as net income (loss) calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP, plus amortization of intangible assets, plus impairment loss, plus equity-based compensation expenses, plus acquisition-related costs, which include one-time banker fee, legal, valuation, due diligence, and closing costs, plus acquisition-related severance, plus or minus the non-GAAP tax effect, and plus or minus other charges or gains, as identified, that management believes are not representative of the Company’s operations. The non-GAAP tax effect was calculated by excluding from the GAAP provision the impact of the amortization of intangible assets, impairment loss, equity-based compensation expenses, acquisition-related costs, and acquisition-related severance. Fulgent defines adjusted EBITDA income (loss) as GAAP income (loss) plus or minus interest (expense) income, plus or minus provisions (benefits) for income taxes, plus depreciation and amortization, plus equity-based compensation expenses, plus insurance expense related to transferable tax credit, plus impairment loss, plus acquisition-related costs, plus acquisition-related severance, and plus or minus other charges or gains, as identified, that management believes are not representative of the Company’s operations. Fulgent defines non-GAAP gross profit as gross profit calculated in accordance with GAAP plus equity-based compensation included in cost of revenue as shown in the table below. Fulgent defines non-GAAP gross margin by taking non-GAAP gross profit and dividing it by GAAP revenue. Fulgent defines non-GAAP operating profit (loss) by taking GAAP operating profit (loss) and adding equity-based compensation expense, amortization of intangible assets, impairment of intangible assets, acquisition-related costs, and acquisition-related severance. Non-GAAP operating margin is calculated by taking non-GAAP operating profit (loss) and dividing it by GAAP revenue. Fulgent may continue to incur expenses similar to the items added to or subtracted from the GAAP financial measures, and, accordingly, the exclusion of these items in the presentation of these non-GAAP financial measures should not be construed as an implication that these items are unusual, infrequent or non-recurring. Management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measure in evaluating the Company’s operating performance and for internal planning and budgeting. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in conformity with GAAP, and non-GAAP financial measures as reported by Fulgent may not be comparable to similarly titled metrics reported by other companies. The Company does not provide reconciliations of forward-looking non-GAAP measures to the most directly comparable GAAP measures because the information necessary to calculate such reconciliations is unavailable on a forward‑looking basis without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amounts of items that would be included in the GAAP measures, including, but not limited to, equity‑based compensation, tax effects, acquisition‑related items, and potential impairments, any of which could be material. The Company is also unable to predict the probable significance of such items. About Fulgent Fulgent is a technology-based company with a well-established laboratory services business and a therapeutic development business. Fulgent’s laboratory services business includes technical laboratory and testing services and professional interpretation of laboratory results by licensed physicians. Fulgent’s therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. The Company aims to transform from a diagnostic business into a fully integrated precision medicine company. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‑looking statements are often identified by words such as "anticipate", "believe," "contemplate," "continue," "could," "estimate," "expect," "guidance," "intend," "may," "plan," "project," "should," "target," "will," and similar expressions. Examples of forward-looking statements in this press release include statements about, among other things: future performance; guidance, including guidance regarding expected quarterly and annual financial results, revenue, GAAP loss, non-GAAP loss and related per share figures, and cash, cash equivalents, restricted cash, and investments in marketable securities; potential improvements in margins; evaluations and judgments regarding the strength of the Company’s business; the potential benefits of the continued integration of AI into the Company’s laboratory business and expansion of the Company’s AI portfolio; any references (express or implied) to the potential benefits of the StrataDx and Bako Diagnostics acquisitions, including any potential or expected revenue and whether the revenue will offset loss of other revenues; the Company’s ability to remediate operational issues relating to the transition of its billing and revenue cycle management systems; the Company’s continued and future research and development efforts, including any implications that the results of earlier clinical trials will be representative or consistent with later clinical trials; and the Company’s identification and evaluation of opportunities and its ability to capitalize on opportunities, capture market share, or expand its presence in certain markets; and the Company’s ability to continue to grow its business. Forward-looking statements are statements other than historical facts and relate to future events or circumstances or the Company’s future performance, and they are based on management’s current assumptions, expectations, and beliefs concerning future developments and their potential effect on the Company’s business. These forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking statements. These risks and uncertainties include, among others, risks regarding: the market potential for, and the rate and degree of market adoption of, the Company’s tests; its ability to maintain turnaround times and otherwise keep pace with rapidly changing technology; the Company’s ability to maintain the low internal costs of its business model; the Company’s ability to maintain an acceptable margin; risks related to volatility in the Company’s results, which can fluctuate significantly from period to period; risks associated with the composition of the Company’s customer base, which can fluctuate from period to period and can be comprised of a small number of customers that account for a significant portion of the Company’s revenue; dependence on a limited number of customers, including risks that any such customer may further reduce, delay, or internalize testing volumes; risks related to the Company's acquisitions, including Bako and StrataDx, such as integration challenges, costs, and the Company's ability to realize expected benefits on anticipated timelines; the Company’s level of success in obtaining coverage and adequate reimbursement and collectability levels from third-party payors for its tests and testing services, including its ability to manage and to remediate billing software implementation issues and claims processing delays; the Company’s level of success in establishing and obtaining the intended benefits from partnerships, strategic investments, joint ventures, acquisitions, or other relationships; the success of the Company’s development efforts, including the Company’s ability to progress its candidates through clinical trials on the timelines expected; the Company’s compliance with the various evolving and complex laws and regulations applicable to its business and its industry; the Company’s ability to obtain expected tax refunds on the timelines expected; and the Company’s ability to protect its proprietary technology and intellectual property. As a result of these risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events. The forward-looking statements made in this press release speak only as of the date of this press release, and the Company assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes in expectations, except as otherwise required by law. The Company’s reports filed with the U.S. Securities and Exchange Commission, or the SEC, including its annual report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, its quarterly report on Form 10-Q for the fiscal year ended March 31, 2026, filed with the SEC on May 1, 2026, and the other reports it files from time to time, including subsequently filed annual, quarterly and current reports, are made available on the Company’s website and on the SEC's website at www.sec.gov upon their filing with the SEC. These reports contain more information about the Company, its business and the risks affecting its business, as well as its results of operations for the periods covered by the financial results included in this press release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730017288/en/ Contacts Investor Relations Contact: The Blueshirt GroupLauren Sloane, [email protected]

Image source: The Motley Fool. Friday, May 1, 2026 at 8:30 a.m. ET Chief Executive Officer — Ming Hsieh Chief Financial Officer — Paul Kim Chief Commercial Officer — Brandon Perthuis Ming Hsieh, Chief Executive Officer; Paul Kim, Chief Financial Officer; and Brandon Perthuis, Chief Commercial Officer. The company's press release discussing the financial results is available on the Investor Relations section of the company's website, ir.fulgentgenetics.com. A replay of this call will be available shortly after the call concludes on the Investor Relations section of the company's website. Management's prepared remarks and answers to your questions on today's call will contain forward-looking statements. These forward-looking statements represent management's estimates based on current views, expectations and assumptions, which may prove to be incorrect. As a result, matters discussed in any forward-looking statements are subject to risks, uncertainties and changes in circumstances that may cause actual results to differ from those described in the forward-looking statements. The company assumes no obligation to update any of the forward-looking statements it may make today to reflect actual results or changes in expectations. Listeners should not rely on any forward-looking statements as predictions of future events and should listen to management's remarks today with the understanding that actual events, including the company's actual future results, may be materially different than what is described in or implied by these forward-looking statements. Please review the more detailed discussion related to these forward-looking statements, including the discussions of some of the risk factors that may cause results to differ from those described in the forward-looking statements contained in the company's filings and with the Securities and Exchange Commission, including the previously filed 10-K for the year ended December 31, 2025, and subsequently filed reports, which are available on the company's Investor Relations website. Management's prepared remarks, including discussion of non-GAAP profit, loss, operating expense, margin, earnings and earnings per share and adjusted EBITDA contain financial measures not prepared in accordance with accounting principles generally accepted in the United States or GAAP. Management has presented these non-GAAP financial measures because it believes they may be useful to investors for various reasons, but these measures should not be viewed as a substitute for or superior to the company's financial results prepared in accordance with GAAP. Please see the company's press release discussing its financial results for the first quarter 2026 for more information, including the description of how the company calculates non-GAAP income and loss, non-GAAP earnings and loss per share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating profit and loss and margin and adjusted EBITDA and a reconciliation of these financial measures to income and loss, earnings and loss per share and operating margin, the most directly comparable GAAP financial measures. The company does not provide reconciliations of forward-looking non-GAAP measures to the most directly comparable GAAP measures because the information necessary to calculate such reconciliations, including equity-based compensation, tax effects, acquisition-related items and potential impairment, any of which may be material, is unavailable on a forward-looking basis without unreasonable effort and the probable significance of those items cannot be predicted. With that, I'd now like to turn the call over to Ming. Please go ahead. Ming Hsieh: Thank you, Lauren. I will start with some comments on our 2 business lines. Then Brandon will review our product and go-to-market updates for our laboratory service business. And Paul will conclude with the financials and outlook before we take your questions. I am pleased with our first quarter results in our laboratory service business and the momentum in our therapeutic development business. In Q1, we also successfully completed the acquisition of Bako Diagnostics and StrataDx, which contributed our strong first quarter results as we had anticipated. In the laboratory service business, we are seeing that the investments in AI and digital pathology solutions are continuing to work at an accelerated pace, offering new and expanded opportunities for growth and improved operating leverage in the future. And as of today, with our in-house developed platform, EasioPath, we are approximately 100% visual across all our cases. We also accelerated progress on our therapeutic development pipeline in the fourth quarter and expect to continue progress this year. Starting with our first clinical candidate, FID-007, advanced through Phase II with 46 patients enrolled. Last week, we announced that our abstract on the Phase III trial of FID-007 was selected by ASCO as a rapid oral presentation with head and neck cancer track session. The Phase II trial enrollment of FID-007 closed on time, on December 29, 2025. We are encouraged by the early efficacy and safety data. FID-007 combined with Cetuximab demonstrated meaningful anticancer activities and a favorable tolerability profile that at both levels for the second-line treatment of recurrent metastatic head and neck sarcoma cell carcinoma. We anticipate having end of Phase II meeting with FDA for the second half of this year and hope to enter into a Phase III registration trial for the treatment of recurrent or metastatic head and neck sarcoma cell carcinoma patients in the first half of 2027. We are encouraged by our clinical trial progress achieved so far and believe entering into the Phase III registration trial will further increase the probability of success of the commercialization FID-007 for the treatment of recurrent or metastatic head and neck sarcoma cell carcinoma patients who currently have very few effective treatment options. Our second clinical candidate, FID-022 is progressing through Phase I dose escalation with the third dose level successfully completed and the fourth dose escalation is ongoing. We expect to finish the study and determine the maximum tolerance dose level later this year. FID-022, it is nanoencapsulated SN-38 for the treatment of solid tumors, including potentially colon, pancreatic, ovarian, and bile duct cancers. Overall, I'm pleased with the progress we have made in the first quarter. Our pharma R&D efforts are progressing faster, better and more cost effectively than planned. We look forward to present our detailed findings from our Phase II study on FID-007 at this year's ASCO meeting. We believe that we executed our strategic initiatives and are in a strong financial position to execute our strategies. We are pleased to reiterate our topline revenue guidance for 2026. We are adjusting our non-GAAP EPS and cash balance guidance to reflect cash returned to shareholders, pursued our stock repurchase program and the resulting reduction in the number of our previously forecasted outstanding shares. I would like to thank our employees, partners and stockholders for your hard work, loyalty and a strong quarter. We look forward to further progress in 2026. I will now turn the call over to Brandon Perthuis, our Chief Commercial Officer, to talk more about our laboratory service business. Brandon? Brandon Perthuis: Thanks, Ming. We ended the first quarter at $71.1 million, which was a decrease of 3.2% year-over-year and 14.6% quarter-over-quarter, driven by the reduction in sales to our large customer who has begun transitioning testing in-house, which we discussed last quarter. Breaking it down into our 3 business areas, Precision Diagnostics revenue for the first quarter was $40.2 million, a decrease of 8.8% year-over-year and down 16.5% sequentially. Anatomic Pathology revenue for the first quarter was $25.1 million, a decrease of 0.9% year-over-year and down 7.2% sequentially. For Biopharma Services, revenue was $5.8 million, an increase of 43.2% year-over-year, but down 28.0% sequentially. We were excited to announce during the first quarter that we completed the acquisition of Bako Diagnostics and StrataDx. This acquisition adds to our market presence in Anatomic Pathology and more than doubles the size of our pathology sales team. The focus now shifts to integration, which is off to a very good start. One of the top priorities is to cross-train the Bako and Strata sales team to sell Fulgent pathology services and vice versa. We believe a well-trained, cross-functional sales team will pay dividends as we look to expand our market size in Anatomic Pathology. We've made a few announcements around our new whole genome test. In this quarter, we continue to advance the product. We have now integrated Illumina's TruPath Genome targeting the variant classes that have historically required separate testing workflows such as complex structural variants, repeat expansions in difficult to map regions and variant phasing without parental samples. Unlike traditional long-read platforms, TruPath Genome achieved this through proximity mapped read technology, delivering long-range genomic insights on the same high-throughput infrastructure already powering our genome test without the workflow or scalability trade-offs. Designed to deliver comprehensive results in a single report covering SMVs, CNVs, genome-wide deletion and duplication, mitochondrial variants and repeat expansions across 20,000 genes, our genome test is built on the principle that a rare disease patient shouldn't have to navigate a gauntlet of sequential tests to get an answer. On our last call, we detailed our AI strategy, which involved rolling out several new modules this year. In the first quarter, we went live with a new dermatopathology AI tool. Digital dermatopathology slides often arrive in inconsistent orientation. This slows the diagnostic process and may introduce interpretation errors. The objective was to implement an auto rotation solution to automatically align slides to a standard orientation. Doing so will reduce time spent adjusting images, ensure consistent presentation of structures like epidermis and dermis, improve diagnostic accuracy, enhance workflow efficiency, reduce turnaround time and potentially lower cost. Proper orientation is crucial because pathologists rely on consistent visual cues. When slides are automatically aligned, key structures appear in a predictable orientation. This reduces the cognitive load on the pathologist, allowing them to interpret images faster with fewer errors. It also helps standardize the diagnostic process, making it easier to compare cases and train new staff. Overall, this leads to improved accuracy in diagnosis and a smoother workflow as pathologists spend less time manipulating slides and more time on actual diagnosis. We are excited to announce that during the quarter, we received MolDX approval and pricing for our PGx test. This is a perfect timing with the recent update and positioning from the American Society of Clinical Oncology for pharmacogenomic testing, particularly for the gene DPYD. While ASCO historically stopped short of endorsing universal testing, newer clinical notices and meeting data signal a clear shift toward proactive integration of DPYD testing into routine oncology care. In 2026, ASCO issued clinical notice urging clinicians to prioritize DPYD genotyping as part of the initial diagnostic workup for patients being considered for certain chemotherapy drugs such as 5-FU. This represents a notable evolution from earlier physicians where ASCO and other U.S. bodies did not recommend routine pretreatment testing due to concerns about evidence sufficiency and potential impact on efficacy. The clinical driver behind these recommendations is well established. Patients with deleterious DPYD variants are at a significant increased risk of severe or fatal toxicity from fluoropyrimidines. Studies show that genotype-guided dosing can substantially reduce Grade 3 and above toxicities without compromising efficacy. In parallel, health economic analysis presented at ASCO highlights that pretreatment DPYD testing reduces downstream costs by avoiding hospitalization, intensive supportive care and treatment interruptions. As ASCO, NCCN and FDA guidance converge, ordering behavior is potentially expected to shift from discretionary to routine. Given that fluoropyrimidines are used in a large portion of solid tumors, this translates into a substantial addressable market. We believe this represents a near-term opportunity to scale pharmacogenomics and a longer-term positioning play in precision oncology, where proactive safety-driven testing is becoming integral to therapeutic decision-making rather than an optional add-on diagnostic test. We remain focused on executing our strategy with discipline, investing in opportunities that will drive sustainable growth and delivering long-term value for our shareholders. While the environment continues to evolve, we are confident in the strength of our team, the resilience of our business and our ability to navigate ahead. We appreciate your time today and look forward to updating you on our progress next quarter. I'll now turn the call over to our Chief Financial Officer, Paul Kim. Paul? Paul Kim: Thank you, Brandon. Revenue in the first quarter of 2026 totaled $71.1 million, including $2.6 million from Bako Diagnostics and StrataDx compared to $83.3 million in the fourth quarter of 2025. The decrease in our Q1 revenue was primarily the result of lower volume from our largest customer, as indicated on our last call and timing impact as we work through claims processing backlog. Gross margin. GAAP gross margin was 30.2% and non-GAAP gross margin for the first quarter was 32.3%. The decline in gross margin reflects fixed costs over lower revenue base attributed to the decline in revenue for the reasons I've mentioned. We expect gross margins to normalize as the backlog clears in the coming quarters and as revenue increases. Now turning to operating expenses. Total GAAP operating expenses were $56.1 million in the first quarter, which decreased when compared to $68.8 million in the prior quarter. The decrease in operating expenses was due to a one-time professional liability expense in the prior quarter. Non-GAAP operating expenses remained relatively flat in Q1, totaling $42.6 million compared to $43.1 million in the previous quarter. Non-GAAP operating margin decreased sequentially to a minus 27.7% due to decreased revenue. Our GAAP loss in the current quarter was $24.8 million, an increase from the prior quarter's GAAP loss of $23.4 million and a GAAP loss of $0.08 per share based on 30.9 million weighted average diluted shares outstanding. Adjusted EBITDA for the first quarter was a loss of approximately $15.2 million compared to a loss of $4.5 million in the prior quarter. On a non-GAAP basis and excluding equity-based compensation expense, intangible asset amortization and acquisition-related costs and severance, loss for the quarter was approximately $11 million or $0.36 per share based on 30.9 million weighted average diluted shares outstanding. In the first quarter, we repurchased 2.6 million shares under our stock repurchase program. We continue to repurchase shares into the current quarter, purchasing an additional 0.5 million shares as of today. Since the inception of the stock repurchase program in March 2022, a total of approximately $6.6 million in shares of common stock has been repurchased under the program with approximately $91 million currently remaining available for future repurchases of our common stock. Turning to the balance sheet. We ended the first quarter with approximately $604.7 million in cash, cash equivalents, restricted cash and marketable securities. The $100.8 million decrease in cash from the previous quarter was primarily driven by $56.6 million paid for the Bako Diagnostics StrataDx acquisition and $40.1 million spent on our stock repurchase program. As of quarter end, we have not yet received $106 million federal income tax refund, which has been delayed due to the government shutdown in the prior year and now due to constrained resources at the IRS. Before providing our guidance for 2026, I would like to provide an update on certain drivers shaping our expectations for the year and the anticipated impact from our recent acquisition of Bako Diagnostics and StrataDx. As anticipated and mentioned on our previous call in February, we saw a decrease in revenue from our largest customer, which is moving its testing capabilities in-house. Revenue from this customer this quarter decreased $6 million from the prior quarter. We expect revenue from this customer in the second quarter to continue to be impacted by a significant decrease in volume and expect revenue to potentially stabilize in the second half of the year. We continue to believe this decrease in revenue from our largest customer will be partially or fully offset by the estimated contribution of approximately $53 million from Bako and StrataDx contributing to overall revenue growth in the second half of the year. Bako's revenue will primarily be categorized as Anatomic Pathology. We continue to forecast that for the full year 2026, no single customer will account for more than 10% of our total revenue, reflecting an improvement in our customer concentration profile. We reiterate our guidance of total revenue of $350 million for 2026, representing an 8.5% year-over-year growth. We continue to estimate Precision Diagnostics revenues to be approximately $168 million, Anatomic Pathology to be approximately $162 million and Biopharma Services to be approximately $20 million. We expect non-GAAP gross margins for the full year to be approximately 39% as the product mix shifts with the change in our customer composition. We anticipate the gross margins to improve in the second quarter due to the higher forecasted revenue and then to further improve to approximately 42% by the end of the year. We expect non-GAAP operating margin to be a minus 20% for the year. We continue to prioritize investment across 2 key areas: R&D, where we're advancing both our laboratory testing capabilities and clinical study pipeline and sales and marketing where we have grown the team. Our sales and marketing spend this year reflects a full year of our expansion that began last year, combined with the recent Bako and StrataDx acquisition, which more than doubled our sales team. Together, we believe this sets us up with a substantially larger and more capable commercial organization to drive growth going forward. The anticipated spend for the therapeutic development business is approximately $26 million in 2026 as we continue advancing clinical trials for FID-022 and FID-007. We remain committed to the strategic investment in our business, including operational improvements and targeted upgrades to our laboratory infrastructure. These investments are designed to strengthen our competitive position and enhance throughput capacity over time. We believe our foundational technology platform is highly scalable, capable of driving meaningful operating leverage and margin expansion as volumes grow. We believe our business is still on track with our original 2026 revenue guidance. The updates to our EPS and cash guidance are solely attributable to decreased shares resulting from the stock repurchase program and the cash used for these repurchases. Our forecasted average fully diluted share count for 2026 has decreased from 32 million shares to approximately 29 million shares due to the shares purchased so far this year under our stock repurchase program. The decreased share count has an effect of $0.14 to EPS. Therefore, using the updated average share count of 29 million, we expect our full year 2026 non-GAAP EPS guidance to decrease by $0.14 to a loss of $1.59 per share, excluding stock-based compensation, impairment loss, acquisition-related costs, further share repurchases and amortization of intangible assets as well as any onetime charges. Finally, our cash position continues to be strong. Assuming for fiscal year 2026, capital purchases of $12 million spend on our therapeutic development business of $26 million, $14.5 million for the previously disclosed professional liability expense and excluding any future stock repurchases or other expenditures outside of the ordinary course, which could include other M&A, we anticipate ending the year with approximately $636 million of cash, cash equivalents, restricted cash and investments in marketable securities. The $49 million decrease from the original cash guidance of $685 million is directly attributed to the $49 million of stock repurchases made year-to-date. This number further assumes receipt of approximately $106 million in tax refunds, which has been delayed as a result of a Q4 2025 government shutdown and constrained resources at the IRS. Overall, we're proud of the growth we have achieved over the past couple of years, and we're excited by the additional momentum that the acquisition of Bako Diagnostics and StrataDx brings as we look ahead. Together with our strong technology platform, we believe we're well positioned for longer-term growth as our strategic investments, innovations and expanded offerings deliver value. Thank you for joining our call today. Operator, you may now open it up for questions. Operator: [Operator Instructions] Our first question is from Lu Li with UBS. Lu Li: I think the first one, probably sticking to the Precision Diagnostics. If you're excluding the largest customer impact, what is the underlying business growth for the remainder of the portfolio? I was like doing the quick math, it still -- it seems like still like a teens growth. Just wanted to make sure if that's correct. Paul Kim: Yes. So the impact from the largest customer was significant. The amount was substantial for 2025. We are anticipating and have experienced lower volumes from that customer in Q1, and we anticipate those levels to be further down, although not at the accelerated pace as we experienced in Q1. If you strip that away and take a look at the underlying Precision Diagnostics business, your math, we're checking it right now, I think, is consistent, meaning that we do have growth in the precision diagnostics area for this year. Lu Li: Got it. And then maybe switching to the gross margin in Q1. It seems like a little bit lower than, I think, your initial target of 37%. Any reasons why it's a little bit lower? Is it coming out from acquisition or anything else? And then -- yes, I think that will be the question. And then how comfortable you are to kind of like get back to kind of like 40% in the second half? Paul Kim: Sure. Thanks for that question. The lower gross margins are coming from the lower-than-anticipated revenues. Revenues for the first quarter could have been higher, in the millions of dollars than what we posted. And that's largely happening, as we mentioned in prior, the lower volumes from our largest customer, coupled with timing impact from claims delayed in releasing from processing backlog. We anticipate that to normalize here in the coming quarters, which should provide an uplift to the revenue in addition to normalizing our gross margins. The lower revenues also had some weather and seasonality impact, which Brandon will color in. Brandon Perthuis: Yes, certainly, Paul. Appreciate that. Q1 historically has been a little bit softer for us. And it is partially related to seasonality. Like this quarter, we did have our laboratories shut down multiple times due to weather. And in addition, January often sees deductibles being reset. So there's some impact there. But I think Paul covered probably the larger impact areas. Paul Kim: The other final thing -- the other final comment that I will make on the gross margins because that was the original part of your question is, if you take a look at the guidance for 2026, we are reiterating and keeping the $350 million guidance as well as the other financial metric, including gross margins for the entirety of the year. The difference in the update that we provided on the loss is solely due to the stock buyback, the aggressive stock buyback that we have conducted since the beginning of this year. In the first quarter, we repurchased 2.6 million shares. And to date, so far, we've purchased an additional 0.5 million shares. In total, that's 3.1 million shares or approximately 10% of our total outstanding shares or 13%, 14% of our float that's out there. So we believe that the amount and the magnitude of the buyback indicates the conviction that we have not only within our capital base, but our overall strategy and value for the company. Brandon Perthuis: Yes. And Lu, you asked, was there any impact from the acquisition? I just want to cover that. No, there was no impact from the acquisition. Lu Li: Okay. That's very helpful. And then finally, there has been a lot of attention on the CMS CRUSH initiative. I'm wondering if you guys have any in-house view in terms of like the potential impacts to your business? Brandon Perthuis: Not at this time, Lu. We don't have any comment on that. Operator: Our next question is from David Westenberg with Piper Sandler. David Westenberg: So first, Paul, a couple of things. What was -- the contribution from StrataDx and Bako would be really small, right, because it closed on the 17th. But I was just wondering what that was for the quarter. And then you also mentioned kind of some of the collections impacting Q1. So what should Q2 look like? So, like, I know you -- I think you're saying some of that will go into Q2. I don't want to get too aggressive with the number there, but I also want to include that. So how should we think about Q2 given that impact? Paul Kim: Sure. So 2 things. One, the contribution from Bako in the first quarter, you are correct. It was small. It was $2.6 million. And your question about what should Q2 look like? Q2 should be a higher quarter. It will be a higher quarter than the first quarter because of the overall positioning of our base business, but we also get the full quarter of Bako and StrataDx. So, when we take a look at the forecast for Q2, Q3 and Q4, the targets are in excess of $90 million per quarter in terms of revenues. David Westenberg: Got it. Yes, just totally mispronounced that. Anyway, secondly, Brandon, I want to kind of touch onto the key product segments, Precision Diagnostics. In terms of the growth in that area, are there any key products, [indiscernible] launches? Or is it Beacon that helps you grow there? Is it some of the stuff you're going to be doing in rare disease? I mean, what are you excited about there in terms of regrowing to fill the loop of the overall large customer? Brandon Perthuis: Yes. Thanks for the question. I think we benefit tremendously from our diverse portfolio of tests. At this point, we have 22,000 genetic tests that span just about every area of health care. So it's difficult to pick a few different areas out of that where we're particularly excited. But I think it's safe to say within sort of rare disease, the momentum we have with exomes and genomes is pretty substantial. We do believe we have a differentiated product. With our whole exome now including long reads, short reads, as well as full RNA-seq transcriptomic analysis, we are going to make more diagnoses than some of our peers and what we've been able to do previously. Analyzing all 3 of those in parallel is really the best approach to maximize diagnostic yield. So we're really excited with the product development around our whole genome and whole exome products, and we do see a lot of momentum in that space. In addition, we've launched a rapid and ultra-rapid genome. Some of those turnaround times are as quick as 48 hours, which is critical for some of these NICU patients. So certainly see momentum there. Beacon has continued to do very well for us. We now have the largest panel in the industry, up to 1,000 genes, which is fully customizable for our clients. But in addition, our oncology business is doing well. The heme business is doing well. And this momentum -- very recent momentum in pharmacogenetic testing related to this DPYD gene is very tangible. It's very real. We're seeing a lot of requests for this. We do a great job with that test in terms of our turnaround time and our quality. So again, I think we have a lot of different areas for growth and really do benefit from having tremendous capabilities across Precision Diagnostics. David Westenberg: Got it. And then just, I want to talk about -- sorry, the pharma backlog, now this was strong in the quarter, and it is the growth area. So should we expect like visibility for the full year, just given the fact that this is really probably running off backlog? And is the book-to-bill growing in that category, Paul? Paul Kim: Well, we continue to see lumpiness in our biopharma business. We've mentioned this essentially on every call that the nature of this business are large transactions with long sales cycles for better or worse. But the business does have momentum overall, but we're going to continue to see sort of these peaks and valleys until we hit this larger steady state for that business segment. But in the back half of the year, we do have continued growth in Biopharma Services. But again, there will be some up and downs in that area. David Westenberg: Got it. And then lastly, Ming, I wanted to talk about the FID-007. You're in Phase II. You do have the presentation at ASCO. So it does seem to be doing well. Can you talk about what we're needing to look at, at the ASCO presentation or other words to see if you'd advance it to Q3? And at what stage in the pipeline do you consider commercialization? I mean, partnerships, licensing, that other kind of thing in order to monetize that asset. Ming Hsieh: Yes. Thank you, David, for the questions. We are excited to be selected by the ASCO for the presentation. Out of 8,000 applications, we belong to a very small group of companies or the clinical trials to be presented in the area. You may remember, we also published our data last year at ESMO for the clinical results. During that time, our results is significantly better than the peers in the industry. So we are excited about the opportunity, and we're looking very much forward for the ASCO presentation. So that's from the clinical trial side. We are -- have the options for the collaborations with potential partners, but it also -- we want to present the opportunity when we do the collaboration at a strength, not at a weakness. So we do have the cash position to go through the clinical trials by ourselves, but we're also looking for that meaningful partners, not only contributing in terms of the resources for the trials, but also long-term relationships. Operator: There are no further questions. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation. Before you buy stock in Fulgent Genetics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fulgent Genetics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $504,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,223,471!* Now, it’s worth noting Stock Advisor’s total average return is 971% — a market-crushing outperformance compared to 202% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 1, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Fulgent Genetics. The Motley Fool has a disclosure policy. Fulgent (FLGT) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Performance was impacted by a planned transition of testing in-house by the company's largest customer, resulting in a $6 million sequential revenue decline. The acquisition of Bako Diagnostics and StrataDx was completed to double the pathology sales force and expand market presence in Anatomic Pathology. Management has implemented a new dermatopathology AI tool that automatically aligns slides to a standard orientation to ensure consistent visual cues and improve diagnostic accuracy. Precision Diagnostics growth is being driven by a shift toward high-complexity testing, including whole genome and exome products that integrate long-read and short-read technologies. The therapeutic development business is progressing faster than planned, with the lead candidate FID-007 advancing toward a Phase III registration trial. Operating leverage is expected to improve as the company utilizes its scalable technology platform to absorb fixed costs over a growing revenue base. Strategic capital allocation focused on aggressive share repurchases, with 3.1 million shares bought back to date, signaling management's conviction in the company's valuation. Full-year 2026 revenue guidance is reiterated at $350 million, assuming the $53 million contribution from recent acquisitions will partially or fully offset the decline from the largest customer. Management expects no single customer to account for more than 10% of total revenue by year-end, significantly improving the company's risk profile. Gross margins are projected to normalize and reach approximately 42% by the end of 2026 as the product mix shifts and claims processing backlogs clear. A Phase III registration trial for FID-007 in head and neck cancer is targeted for the first half of 2027, following an anticipated FDA meeting in late 2026. The company anticipates receiving a $106 million federal income tax refund, which has been delayed due to IRS resource constraints and a previous government shutdown. Non-GAAP EPS guidance was adjusted to a loss of $1.59 per share to reflect the impact of the stock repurchase program, including the reduced share count and the cash utilized for those repurchases. Q1 revenue was negatively affected by seasonal factors, including laboratory shutdowns due to weather and the annual resetting of patient insurance deductibles. The Biopharma Services segment remains subject to 'lumpiness' and volatility due to long sales cycles and large individual transaction sizes. Cash balance guidance was reduced by $49 million to account for capital returned to shareholders through the stock repurchase program. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management confirmed that the core Precision Diagnostics portfolio is seeing growth in the 'teens' when stripping away the impact of the transitioning large customer. Growth is supported by momentum in rare disease testing and the recent MolDX approval for pharmacogenomic (PGx) tests. The Q1 margin dip was attributed to lower-than-anticipated revenue and fixed cost absorption issues, not the recent acquisitions. Management targets revenue in excess of $90 million per quarter for the remainder of the year as the full impact of Bako and StrataDx is realized. CEO Ming Hsieh stated the company has the cash to fund clinical trials independently but is open to strategic partnerships if they offer long-term value. The goal is to enter any collaboration from a position of strength following the presentation of Phase II data at ASCO. Recent ASCO clinical notices urging DPYD genotyping for chemotherapy patients are expected to shift ordering behavior from discretionary to routine. Fulgent views this as a near-term scaling opportunity for its PGx business and a long-term play in safety-driven precision oncology. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

This article first appeared on GuruFocus. Revenue: $71.1 million in Q1 2026, a decrease of 3.6% year-over-year and 14.6% quarter-over-quarter. Precision Diagnostics Revenue: $40.2 million, down 8.8% year-over-year and 16.5% sequentially. Anatomic Pathology Revenue: $25.1 million, a decrease of 0.9% year-over-year and 7.2% sequentially. Biopharma Services Revenue: $5.8 million, an increase of 43.2% year-over-year, but down 28.0% sequentially. Gross Margin: GAAP gross margin at 30.2% and non-GAAP gross margin at 32.3% for Q1 2026. Operating Expenses: GAAP operating expenses were $56.1 million, down from $68.8 million in the prior quarter. GAAP Loss: $24.8 million, with a GAAP loss of $0.08 per share. Adjusted EBITDA: Loss of approximately $15.2 million in Q1 2026. Non-GAAP Loss: Approximately $11 million or $0.36 per share. Cash Position: Ended Q1 2026 with approximately $604.7 million in cash, cash equivalents, restricted cash, and marketable securities. Stock Repurchase: Repurchased 2.6 million shares in Q1 2026, with an additional 0.5 million shares repurchased in the current quarter. 2026 Revenue Guidance: Reiterated total revenue guidance of $350 million, representing an 8.5% year-over-year growth. Non-GAAP EPS Guidance: Expected to decrease by $0.14 to a loss of $1.59 per share for the full year 2026. Warning! GuruFocus has detected 2 Warning Signs with FLGT. Is FLGT fairly valued? Test your thesis with our free DCF calculator. Release Date: May 01, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Fulgent Genetics Inc (NASDAQ:FLGT) successfully completed the acquisition of Bako Diagnostics and StrataDx, which contributed positively to their first-quarter results. The company is seeing accelerated progress in its therapeutic development pipeline, particularly with its clinical candidate FID-007 advancing through Phase 2 trials. Fulgent Genetics Inc (NASDAQ:FLGT) has integrated Illumina's TruPath Genome, enhancing their whole genome test capabilities and targeting complex variant classes. The company received MolDX approval and pricing for their PGx test, aligning with recent ASCO recommendations for pharmacogenomic testing. Fulgent Genetics Inc (NASDAQ:FLGT) is in a strong financial position, with a significant cash reserve and ongoing stock repurchase program, indicating confidence in their strategy and value. Revenue for the first-quarter of 2026 decreased by 3.6% year-over-year and 14.6% quarter-over-quarter, primarily due to a reduction in sales to their largest customer. The company's GAAP gross margin declined to 30.2%, reflecting fixed costs over a lower revenue base. Non-GAAP operating margin decreased to a negative 27.7% due to decreased revenue. Fulgent Genetics Inc (NASDAQ:FLGT) reported a GAAP loss of $24.8 million for the current quarter, an increase from the prior quarter. The company experienced delays in receiving a $106 million federal income tax refund, impacting their cash flow. Q: Excluding the impact of the largest customer, what is the underlying business growth for the remainder of the portfolio? A: Paul Kim, CFO: The impact from the largest customer was significant, but if you strip that away, the underlying Precision Diagnostics business shows growth consistent with your calculations, indicating growth in this area for the year. Q: Why was the gross margin in Q1 lower than the initial target of 37%, and how confident are you in reaching 40% in the second half? A: Paul Kim, CFO: The lower gross margins were due to lower-than-anticipated revenues, primarily from reduced volumes from our largest customer and timing impacts from claims processing backlog. We expect normalization in the coming quarters, which should improve gross margins. Q: What was the contribution from StrataDx and Bako in Q1, and what should Q2 look like? A: Paul Kim, CFO: The contribution from Bako in Q1 was $2.6 million. Q2 should be higher due to the full quarter contribution from Bako and StrataDx, with targets in excess of $90 million per quarter in revenues. Q: What are the key product segments driving growth in Precision Diagnostics? A: Brandon Perthuis, CCO: We benefit from a diverse portfolio of 22,000 genetic tests. Significant momentum is seen in rare disease with exomes and genomes, and our whole exome now includes long reads, short reads, and full RNA-seq analysis. We also see growth in oncology and pharmacogenetic testing. Q: Regarding FID-007, what should we look for at the ASCO presentation, and what are the plans for commercialization? A: Ming Hsieh, CEO: We are excited about the ASCO presentation, which highlights our strong clinical trial results. We are open to collaborations with potential partners but aim to do so from a position of strength. We have the cash to proceed independently but are also seeking meaningful partnerships. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q1 revenue was $71.1 million (down 3.2% y/y and 14.6% sequentially), pressured by its largest customer moving testing in‑house and claims-processing timing, which helped push GAAP gross margin to 30.2% and produce a GAAP loss of $24.8 million. Bako Diagnostics and StrataDX closed mid‑March and contributed about $2.6 million in Q1, more than doubling Fulgent’s pathology sales team and helping reduce customer concentration (management expects no single customer >10% of 2026 revenue) as integration and cross-selling proceed. 2026 guidance reiterated: management expects $350 million in revenue (+8.5%), non‑GAAP gross margin of ~39% (rising toward ~42% by year‑end) and a non‑GAAP operating margin of ~‑20%, while share repurchases lower the 2026 share count to ~29 million and produce a forecasted non‑GAAP loss of $1.59 per share; cash stood at about $604.7 million after the acquisition and buybacks. Interested in Fulgent Genetics, Inc.? Here are five stocks we like better. Can Fulgent Sustain Sky-High Growth Post-Pandemic? Fulgent Genetics (NASDAQ:FLGT) reported first-quarter 2026 revenue of $71.1 million as the company worked through a planned decline in testing volumes from its largest customer while integrating the recently completed acquisitions of Bako Diagnostics and StrataDX. Chief Commercial Officer Brandon Perthuis said the company ended the quarter with revenue of $71.1 million, down 3.2% year-over-year and 14.6% sequentially, “driven by the reduction in sales to our large customer who has begun transitioning testing in-house.” CFO Paul Kim added that the quarter was also impacted by “timing impact as we work through claims processing backlog.” → Corning Beats Q1 Estimates but Drops 9% on Guidance Miss By segment, Perthuis reported: Precision diagnostics revenue of $40.2 million, down 8.8% year-over-year and down 16.5% sequentially Anatomic pathology revenue of $25.1 million, down 0.9% year-over-year and down 7.2% sequentially Biopharma services revenue of $5.8 million, up 43.2% year-over-year but down 28.0% sequentially During Q&A, Kim told UBS that the impact from the largest customer was “significant” and that, excluding it, “we do have growth in the precision diagnostics area for this year,” adding that the analyst’s “teens growth” math appeared “consistent.” → Meta Posted Its Best Sales Growth Since 2021—So Why Did Shares Fall? CEO Ming Hsieh said the company “successfully completed the acquisition of Bako Diagnostics and StrataDX,” which “contributed to our strong first quarter results as we had anticipated.” Kim quantified first-quarter contribution from the acquired businesses at $2.6 million, noting the transaction closed on March 17 and therefore had a limited impact in the period. Perthuis said the acquisition “adds to our market presence in anatomic pathology and more than doubles the size of our pathology sales team.” He said the focus has shifted to integration, with a key priority being cross-training of the combined sales teams “to sell Fulgent pathology services and vice versa.” He added the integration was “off to a very good start.” → Is Oracle Undervalued as Cloud Growth Accelerates? Kim said Bako’s revenue will primarily be categorized as anatomic pathology and that, for 2026, the company forecasts no single customer will account for more than 10% of total revenue, which he described as an improvement in customer concentration. Hsieh emphasized continued investment in AI and digital pathology, stating that with the company’s in-house platform, EasioPath, Fulgent is “approaching 100% digital across all our cases.” Perthuis provided additional details on the company’s whole genome offering, saying Fulgent has integrated Illumina’s TruPath Genome to target variant classes that “historically required separate testing workflows,” including “complex structural variants” and “repeat expansions in difficult to map regions.” He described the company’s goal as delivering comprehensive results “in a single report” so rare disease patients do not have to pursue “sequential tests to get an answer.” On the AI roadmap, Perthuis said the company went live in the first quarter with a dermatopathology AI tool intended to standardize digital slide orientation. He said auto-rotation is designed to reduce time spent adjusting images, improve consistency, and potentially reduce turnaround time and cost. Perthuis also said the company received MolDX approval and pricing for its pharmacogenomics (PGx) test. He tied the update to evolving ASCO positioning around DPYD testing for patients being considered for certain chemotherapy drugs such as 5-FU, citing a 2026 ASCO clinical notice urging clinicians to prioritize DPYD genotyping as part of initial diagnostic workup. Perthuis said Fulgent is seeing “a lot of requests” related to DPYD testing, calling the opportunity “very tangible” and “very real.” Kim reported first-quarter GAAP gross margin of 30.2% and non-GAAP gross margin of 32.3%. He attributed the decline largely to fixed costs spread over a lower revenue base due to the volume decline and claims processing timing. He said the company expects margins to normalize “as the backlog clears in the coming quarters and as revenue increases.” In response to a question from UBS about whether the acquisition affected gross margin, management said it did not. “No, there was no impact from the acquisition,” the company said on the call. Kim reported GAAP operating expenses of $56.1 million, down from $68.8 million in the prior quarter due to “a one-time professional liability expense” in Q4. Non-GAAP operating expenses were $42.6 million, compared with $43.1 million in the previous quarter. Non-GAAP operating margin was -27.7%. For the quarter, Kim reported a GAAP loss of $24.8 million, or a GAAP loss of $0.08 per share based on 30.9 million weighted average diluted shares. Adjusted EBITDA was a loss of about $15.2 million, compared to a loss of $4.5 million in the prior quarter. On a non-GAAP basis, the company reported a loss of approximately $11.0 million, or $0.36 per share, excluding equity-based compensation, intangible asset amortization, and acquisition-related costs and severance. Kim reiterated full-year 2026 revenue guidance of $350 million, which he said represents 8.5% year-over-year growth. Segment expectations remained: Precision diagnostics: approximately $168 million Anatomic pathology: approximately $162 million Biopharma services: approximately $20 million He said the company expects non-GAAP gross margins of about 39% for 2026, with improvement in the second quarter on higher forecast revenue and further improvement “to approximately 42% by the end of the year.” Non-GAAP operating margin guidance remained -20%. Kim also provided quarterly revenue expectations, telling Piper Sandler that Q2 should be higher than Q1 and that “the targets are in excess of $90 million per quarter” for Q2, Q3, and Q4, reflecting both base-business positioning and a full quarter contribution from Bako and StrataDX. Fulgent’s guidance changes were tied to share repurchases. Kim said the company repurchased 2.6 million shares in the first quarter and continued repurchasing into the current quarter with an additional half-million shares “as of today.” He said the forecasted average fully diluted share count for 2026 decreased from 32 million to about 29 million shares, and that the reduced share count has an effect of $0.14 to EPS. Using the updated share count, the company now expects full-year 2026 non-GAAP EPS of a loss of $1.59 per share, excluding stock-based compensation, impairment loss, acquisition-related costs, further share repurchases, amortization of intangible assets, and one-time charges. On liquidity, Kim said the company ended the quarter with approximately $604.7 million in cash equivalents, restricted cash, and marketable securities. The $100.8 million sequential decline was primarily driven by $56.6 million paid for the Bako/StrataDX acquisition and $40.1 million spent on share repurchases. He also noted the company had not yet received a $106 million federal income tax refund, which he said had been delayed due to a prior-year government shutdown and “constrained resources at the IRS.” Assuming certain spending levels and excluding future repurchases and non-ordinary-course expenditures, Kim said the company anticipates ending 2026 with about $636 million in cash equivalents, restricted cash, and marketable securities, a figure he said was $49 million lower than prior cash guidance due directly to year-to-date repurchases. Separately, Hsieh highlighted progress in the company’s therapeutic development business. He said the phase II trial enrollment for FID-007 closed on Dec. 29, 2025, with 46 patients enrolled, and that an abstract for the phase II trial was selected by ASCO as a rapid oral presentation in the head and neck cancer track. Hsieh said the company is encouraged by early efficacy and safety data and anticipates an end-of-phase II FDA meeting in the second half of this year, with a goal of entering a phase III registration trial in the first half of 2027. He also said FID-022 is progressing through phase I dose escalation, with the third dose level completed and the fourth dose level ongoing, and that the company expects to determine the maximum tolerated dose later this year. Fulgent Genetics, Inc (NASDAQ: FLGT) is a California-based company specializing in high-complexity genetic testing and diagnostic services. Operating from its headquarters in Temple City, Fulgent leverages next-generation sequencing (NGS) technologies and advanced bioinformatics to deliver a broad range of clinical and research assays. The company's infrastructure includes CAP- and CLIA-certified laboratories, enabling it to process large volumes of samples with rapid turnaround times. Fulgent's product portfolio encompasses hereditary cancer panels, rare disease and neuromuscular disorder testing, pharmacogenomic screenings, non-invasive prenatal tests, and infectious disease assays including COVID-19 diagnostics. The article "Fulgent Genetics Q1 Earnings Call Highlights" was originally published by MarketBeat.

Reiterates revenue guidance for fiscal year 2026 Executed on stock repurchase program; purchased approximately 2.6 million shares in the first quarter of 2026 using $40.1 million in cash Revenue of $71.1 million GAAP gross profit of $21.5 million, or GAAP gross margin of 30.2%; Non-GAAP gross profit of $23.0 million, or Non-GAAP gross margin of 32.3% GAAP loss of $24.8 million, or $(0.80) per share; Non-GAAP loss of $11.0 million, or $(0.36) per share Ended the first quarter of 2026 with $604.7 million of cash, cash equivalents, restricted cash, and investments in marketable securities, excluding an anticipated tax refund of approximately $106 million EL MONTE, Calif., May 01, 2026--(BUSINESS WIRE)--Fulgent Genetics, Inc. (NASDAQ: FLGT) ("Fulgent," or the "Company"), a technology-based company with a well-established laboratory services business and a therapeutic development business, today announced financial results for its first quarter ended March 31, 2026. First Quarter 2026 Results: Revenue of $71.1 million GAAP loss of $24.8 million, or $(0.80) per share Non-GAAP loss of $11.0 million, or $(0.36) per share Adjusted EBITDA loss of $15.2 million Non-GAAP income (loss), non-GAAP income (loss) per share, adjusted EBITDA income (loss), non-GAAP gross profit and margin, and non-GAAP operating income (loss) and margin, are described below under "Note Regarding Non-GAAP Financial Measures" and are reconciled to the most directly comparable GAAP financial measure, GAAP income (loss), GAAP gross profit and margin, and GAAP operating income (loss) and margin, in the accompanying tables. Ming Hsieh, Chairman of the Board of Directors and Chief Executive Officer, said, "I am encouraged by our first quarter performance and the positive trajectory we are seeing across our businesses so far. Our laboratory services segment delivered solid results, and we continued to make meaningful advances in our therapeutic development pipeline across both clinical candidates, FID-007 and FID-022. We are honored to be selected to present our findings on Phase 2 data for FID-007 with a rapid oral abstract at the 2026 ASCO Annual Meeting." Paul Kim, Chief Financial Officer, said, "We continue to be confident in the fundamental strength of our business and, as such, this quarter we executed on our stock repurchase program in a meaningful way and we are updating our Non-GAAP EPS and cash guidance for the year as a result. We are maintaining our revenue guidance for the year, and we anticipate gross margins to normalize and further improve in the second half of the year." Outlook: For the full year 2026, Fulgent expects: Revenue of approximately $350.0 million To account for the impact of $48.7 million cash used and a reduction of 3.1 million shares associated with the stock repurchase program, for the full year 2026, Fulgent now expects: Non-GAAP loss of approximately $46.0 million Non-GAAP loss of approximately $(1.59) per share Cash, cash equivalents, restricted cash, and investments in marketable securities of approximately $636.0 million * *Cash expenditures may be higher or lower than currently estimated due to a variety of factors and circumstances, including as a result of the Company’s ongoing stock repurchase program, or other expenditures outside the ordinary course of business, including M&A. This number further assumes receipt of approximately $106 million in tax refunds prior to December 31, 2026, which have been delayed as a result of the government shutdown in the fourth quarter of 2025 and currently constrained resources at the IRS; and assumes the capital purchases of $12 million, no further repurchases under the stock repurchase program, and spend on the therapeutic development business of $26 million. The timing and amount of any future repurchases pursuant to the stock repurchase program will depend on a variety of factors, including the market price of Fulgent’s common stock, general market and economic conditions and other factors Fulgent’s board of directors may deem relevant. Conference Call Information Fulgent will host a conference call for the investment community today at 8:30 AM ET (5:30 AM PT) to discuss its first quarter 2026 results. The call may be accessed through a live audio webcast in the Investor Relations section of the Company’s website, http://ir.fulgentgenetics.com. An audio replay will be available at the same location. Note Regarding Non-GAAP Financial Measures Certain information set forth in this press release and/or to be discussed on the Company’s earnings call, including non-GAAP income (loss), non-GAAP income (loss) per share, adjusted EBITDA income (loss), non-GAAP gross profit and margin, and non-GAAP operating income (loss) and margin, are non-GAAP financial measures. Fulgent believes this information is useful to investors because it provides a basis for measuring the performance of the Company’s business, excluding certain income or expense items that management believes are not directly attributable to the Company’s operating results. Fulgent defines non-GAAP income (loss) as net income (loss) calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP, plus amortization of intangible assets, plus equity-based compensation expenses, plus acquisition-related costs, which include one-time banker fee, legal, valuation, due diligence, and closing costs, plus acquisition-related severance, plus or minus the non-GAAP tax effect, and plus or minus other charges or gains, as identified, that management believes are not representative of the Company’s operations. The non-GAAP tax effect was calculated by excluding from the GAAP provision the impact of the amortization of intangible assets, equity-based compensation expenses, acquisition-related costs, and acquisition-related severance. Fulgent defines adjusted EBITDA income (loss) as GAAP income (loss) plus or minus interest (expense) income, plus or minus provisions (benefits) for income taxes, plus equity-based compensation expenses, plus depreciation and amortization, plus acquisition-related costs, plus acquisition-related severance, and plus or minus other charges or gains, as identified, that management believes are not representative of the Company’s operations. Fulgent defines non-GAAP gross profit as gross profit calculated in accordance with GAAP plus equity-based compensation included in cost of revenue as shown in the table below. Fulgent defines non-GAAP gross margin by taking non-GAAP gross profit and dividing it by GAAP revenue. Fulgent defines non-GAAP operating profit (loss) by taking GAAP operating profit (loss) and adding equity-based compensation expense, amortization of intangible assets, acquisition-related costs, and acquisition-related severance. Non-GAAP operating margin is calculated by taking non-GAAP operating profit (loss) and dividing it by GAAP revenue. Fulgent may continue to incur expenses similar to the items added to or subtracted from the GAAP financial measures, and, accordingly, the exclusion of these items in the presentation of these non-GAAP financial measures should not be construed as an implication that these items are unusual, infrequent or non-recurring. Management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measure in evaluating the Company’s operating performance and for internal planning and budgeting. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in conformity with GAAP, and non-GAAP financial measures as reported by Fulgent may not be comparable to similarly titled metrics reported by other companies. The Company does not provide reconciliations of forward-looking non-GAAP measures to the most directly comparable GAAP measures because the information necessary to calculate such reconciliations is unavailable on a forward‑looking basis without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amounts of items that would be included in the GAAP measures, including, but not limited to, equity‑based compensation, tax effects, acquisition‑related items, and potential impairments, any of which could be material. The Company is also unable to predict the probable significance of such items. About Fulgent Fulgent is a technology-based company with a well-established laboratory services business and a therapeutic development business. Fulgent’s laboratory services business includes technical laboratory and testing services and professional interpretation of laboratory results by licensed physicians. Fulgent’s therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. The Company aims to transform from a diagnostic business into a fully integrated precision medicine company. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‑looking statements are often identified by words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "guidance," "intend," "may," "plan," "project," "should," "target," "will," and similar expressions. Examples of forward-looking statements in this press release include statements about, among other things: future performance; guidance, including guidance regarding expected quarterly and annual financial results, revenue, GAAP loss, non-GAAP loss and related per share figures, and cash, cash equivalents, restricted cash, and investments in marketable securities; potential improvements in margins, evaluations and judgments regarding the trajectory, the stability of certain revenue sources, the Company’s cash position and sufficiency of its resources, momentum, trajectory, vision, future opportunities and future growth of the Company’s testing and laboratory services, technologies and expansion; any references (express or implied) to the StrataDx and Bako Diagnostics acquisitions; the potential benefits of the StrataDx and Bako Diagnostics acquisitions, including any potential or expected revenue and whether the revenue will offset loss of other revenues; the Company’s research and development efforts, including any implications that the results of earlier clinical trials will be representative or consistent with later clinical trials, the expected timing of enrollment and regulatory filings for these trials and the availability of data or results of these trials, including any implication that interim or preliminary data will be representative of final data; the Company’s identification and evaluation of opportunities and its ability to capitalize on opportunities, capture market share, or expand its presence in certain markets; and the Company’s ability to continue to grow its business. Forward-looking statements are statements other than historical facts and relate to future events or circumstances or the Company’s future performance, and they are based on management’s current assumptions, expectations, and beliefs concerning future developments and their potential effect on the Company’s business. These forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking statements. These risks and uncertainties include, among others, risks regarding: the market potential for, and the rate and degree of market adoption of, the Company’s tests; its ability to maintain turnaround times and otherwise keep pace with rapidly changing technology; the Company’s ability to maintain the low internal costs of its business model; the Company’s ability to maintain an acceptable margin; risks related to volatility in the Company’s results, which can fluctuate significantly from period to period; risks associated with the composition of the Company’s customer base, which can fluctuate from period to period and can be comprised of a small number of customers that account for a significant portion of the Company’s revenue; dependence on a limited number of customers, including risks that any such customer may further reduce, delay, or internalize testing volumes; risks related to the Company's acquisitions, including Bako and StrataDx, such as integration challenges, costs, and the Company's ability to realize expected benefits on anticipated timelines; the Company’s level of success in obtaining coverage and adequate reimbursement and collectability levels from third-party payors for its tests and testing services; the Company’s level of success in establishing and obtaining the intended benefits from partnerships, strategic investments, joint ventures, acquisitions, or other relationships; the success of the Company’s development efforts, including the Company’s ability to progress its candidates through clinical trials on the timelines expected; the Company’s compliance with the various evolving and complex laws and regulations applicable to its business and its industry; the Company’s ability to obtain expected tax refunds on the timelines expected; and the Company’s ability to protect its proprietary technology and intellectual property. As a result of these risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events. The forward-looking statements made in this press release speak only as of the date of this press release, and the Company assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes in expectations, except as otherwise required by law. The Company’s reports filed with the U.S. Securities and Exchange Commission, or the SEC, including its annual report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, and the other reports it files from time to time, including subsequently filed annual, quarterly and current reports, are made available on the Company’s website and on the SEC's website at www.sec.gov upon their filing with the SEC. These reports contain more information about the Company, its business and the risks affecting its business, as well as its results of operations for the periods covered by the financial results included in this press release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260501274201/en/ Contacts Investor Relations Contact: The Blueshirt Group Lauren Sloane, [email protected]