PRPO

This article first appeared on GuruFocus. Revenue: Exceeded $7 million in Q2 2026, up approximately 22% year-over-year from $5.7 million in Q2 2025 and up from approximately $6.7 million in Q1 2026. Pathology Revenue: Approximately $6.1 million, compared with $6 million in Q1 2026. Product Revenue: Approximately $900,000, up 35% from approximately $660,000 in Q1 2026 and approximately 21% above the previous quarterly record of $750,000 set in Q4 2025. Adjusted EBITDA: Approximately $400,000 in Q2 2026, compared to negative $200,000 in Q1 2026. Operating Cash Flow: Generated approximately $700,000 in Q2 2026, representing 10% of quarterly revenue. Cash Position: Ended Q2 2026 with more than $3 million in cash, an increase of approximately $0.5 million during the quarter and up from approximately $1.1 million at the end of Q2 2025. Warning! GuruFocus has detected 2 Warning Sign with PRPO. Is PRPO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 17, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Precipio Inc (NASDAQ:PRPO) achieved a record quarterly revenue of over $7 million, a 22% year-over-year increase. The company returned to positive adjusted EBITDA of approximately $400,000, a $600,000 improvement from Q1. Precipio Inc (NASDAQ:PRPO) generated approximately $700,000 in operating cash flow, ending the quarter with over $3 million in cash, an increase of $0.5 million without raising capital. Product revenue reached a record $900,000, up 35% sequentially and 21% above the previous record, driven by a growing commercial pipeline. The commercial team added 10 new distributor reps and identified over 25 new qualified customers, positioning for further growth in the second half of 2026. Pathology division revenue growth was modest, increasing only slightly from $6.0 million to $6.1 million sequentially. The company acknowledged that quarter-to-quarter timing of product shipments can create variability, as seen in Q1's flat revenue. The CEO expressed uncertainty about the source of unusually high trading volume, indicating a lack of transparency into market activity. The company's reliance on large distributors like Thermo Fisher and McKesson requires complex relationship management, which has historically slowed the ramp-up of product sales. Despite progress, the product business is still in early stages of scaling, with pipeline conversion expected to contribute more significantly only in the second half of the year. Q: Can you offer any commentary on the unusually high trading volume last month, where those shares came from, and if you are on top of it?A: Ilan Danieli, CEO: We wish there was more transparency from our end into that. It's as surprising to us as it is to you. We believe we are starting to see the fruits of our IR activities, such as participating in investment conferences like the MicroCap Conference in Vegas in June. Word is starting to spread, and there is more attention being caught by us. The other factor is computer algo trading, which is very hard to trace and explain. Q: What were the key drivers behind the significant improvement in adjusted EBITDA and cash flow in Q2?A: Ilan Danieli, CEO: The swing to positive adjusted EBITDA of approximately $400,000 from negative $200,000 in Q1 was driven by a $300,000 increase in revenue and a $200,000 decrease in stock-based compensation expense. More importantly, this demonstrates the operating leverage we have built. We generated approximately $700,000 in operating cash flow, which is 10% of our quarterly revenue, and ended the quarter with over $3 million in cash, an increase of $0.5 million, all achieved organically without raising capital. Q: Can you elaborate on the record revenue performance and the breakdown between the Pathology and Product divisions?A: Ilan Danieli, CEO: For the first time in Precipio's history, quarterly revenue surpassed $7 million, a 22% increase year-over-year from $5.7 million. The Pathology business generated approximately $6.1 million, a modest increase from $6 million in Q1, as our resources are focused on product commercial growth. The Product business generated approximately $900,000, up 35% from the prior quarter and 21% above its previous record of $750,000 set in Q4 of last year. Q: What is the current status of the commercial pipeline and the strategy with distribution partners?A: Ilan Danieli, CEO: During Q2, our commercial team added approximately 10 new distributor reps, identified over 25 new qualified customers, and completed or scheduled over 30 meetings with them. We have distribution partnerships with Thermo Fisher, McKesson, Medline, and Cardinal, which cover the entire targeted market. The challenge has been figuring out the unique recipe for working with each of these large organizations, as their sales structures and incentives vary. Our team is making progress, and in the second half of the year, we expect to see these accounts move from pipeline to active, with corresponding revenue making significant contributions to growth. Q: How does the company's "flywheel" model provide a competitive advantage in the market?A: Ilan Danieli, CEO: Our laboratory enables us to identify problems in cancer diagnostic processes firsthand. We then develop solutions, validate them in our real-world clinical laboratory, and commercialize them to other laboratories. This is a significant advantage over most diagnostic companies that develop a product and then try to recreate its use in a clinical lab. Our clinical experience drives product development, and the lab division isn't simply a service business, nor is the product division simply a manufacturing businessthey reinforce one another, expanding our addressable market without requiring us to build another laboratory. Q: Can you provide more detail on the AML product and its market potential?A: Ilan Danieli, CEO: AML is a great example of our model. Treatment decisions are extremely time-critical, as patients are at immediate risk of dying, sometimes within 48 hours. While the market delivers molecular lab results in 10 to 14 days on average, our rapid AML test delivers critical information in one day. Every week, we receive several AML patient samples in our lab and observe the impact of delivering same-day results. This assay has garnered significant interest from numerous customers, both domestically and internationally, and we are working on substantial marketing collaborations and clinical study initiatives to call attention to the problem and put our solution front and center. Q: What should shareholders be watching for in the second half of 2026?A: Ilan Danieli, CEO: Shareholders should watch for four key things: First, continued revenue growth, as we have crossed the $7 million quarterly threshold. Second, product revenue growth, as reaching $900,000 is an important achievement and we will continue expanding the customer base. Third, commercial pipeline conversion, as we expect opportunities generated through our sales capacity investments to increasingly translate into revenue. Fourth, operating leverage, as we continue focusing on translating revenue growth into adjusted EBITDA and ultimately cash generation. Q: How does the company view the Q1 timing issue with a large customer shipment, and what does Q2 tell us about that?A: Ilan Danieli, CEO: In Q1, we explained that one of our larger customers moved a shipment expected at the end of March into early April. We emphasized it was a timing issue, not a loss of a customer or a change in underlying demand. Q2 gives us the opportunity to see that distinction clearly. Quarter-to-quarter timing will always create variability, particularly in our product business, which is why it's important to look beyond any individual quarter and focus on the positive trajectory of the business. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Shares of Precipio, Inc. PRPO have gained 26.8% since the company reported its earnings for the quarter ended June 30, 2026. This compares to the S&P 500 Index’s 2% loss over the same time frame. Over the past month, the stock gained 25.3% compared with the S&P 500’s 1.7% gain. Precipio reported second-quarter 2026 net sales of $7 million, up 24.7% from $5.7 million a year earlier. The company swung to a net loss of $219,000, or 12 cents per share, from net income of $74,000, or 5 cents per share, in the prior-year quarter. Service revenues, net of the allowance for credit losses, increased 21.6% to $6.1 million from $5 million, aided by higher diagnostic case volumes. Product revenues jumped 45.2% to $906,000 from $624,000. Precipio operates as a single reporting segment encompassing its pathology services and product divisions. Gross profit increased 29.1% year over year to $3.1 million from $2.4 million, while gross margin expanded to 45% from 43%. The improvement reflected higher case volumes and revenues. Precipio processed 4,652 diagnostic cases during the quarter, up 26% from 3,692 cases in the year-ago period. Cost of sales increased 20.5%, reflecting higher reagent, operating-supply, personnel and pathologist interpretation costs associated with the greater case volume. Adjusted EBITDA was $0.4 million against an adjusted EBITDA loss of $0.1 million a year earlier. On a sequential basis, adjusted EBITDA improved from a loss of $0.2 million in the first quarter. Cash generation also improved. Management said PRPO generated $0.7 million of operating cash flow during the quarter, while cash increased to $3.1 million. The cash balance compared with roughly $1.1 million at the end of the second quarter of 2025. Precipio, Inc. price-consensus-eps-surprise-chart | Precipio, Inc. Quote CEO Ilan Danieli characterized the quarter as validation of Precipio’s operating model, pointing to record quarterly revenue, positive adjusted EBITDA and internally generated cash. Management emphasized that the increase in cash was achieved without raising capital. The product business was a particular focus. Product revenues of $0.9 million were 21% above the company’s previous quarterly record of $750,000 set in the fourth quarter of 2025. During second-quarter 2026, the commercial team added about 10 distributor representatives, identified more than 25 new qualified customers and had more than 30 meetings either scheduled or completed with those prospects. Higher diagnostic activity was a key revenue driver, with the 26% increase in cases supporting growth in service revenues. At the same time, higher volumes increased costs for reagents, operating supplies, personnel and pathologist interpretation, pushing total cost of sales higher. Operating expenses increased 14.8% year over year. General and administrative expenses rose $0.1 million, mainly on higher legal and professional fees, while sales and marketing expenses increased $0.1 million because of personnel costs associated with new product-division sales hires. Stock-based compensation increased $0.3 million. Other income totaled $380,000 (including $389,000 of Employee Retention Credit income), down from total other income of $898,000 a year earlier. Management did not provide specific revenue or earnings targets for the second half of 2026 but expects continued revenue and product revenue growth. PRPO plans to expand its customer base and commercial reach and expects more opportunities in its product pipeline to convert into active accounts and revenue. Management also intends to focus on operating leverage, with revenue growth translating into adjusted EBITDA and ultimately cash generation. In May 2026, Precipio entered into a five-year loan agreement to finance laboratory equipment. The $300,000 loan is secured by the equipment and carries monthly interest at 8.9%. PRPO did not disclose any acquisitions, divestitures or significant business restructuring during the quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Precipio, Inc. (PRPO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

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. Achieved record quarterly revenue exceeding $7 million, validating an operating model that prioritizes organic growth and cash generation over repeated capital raises. Leveraged a unique 'flywheel' strategy where the Pathology division identifies real-world diagnostic gaps, allowing the company to develop and clinically validate solutions internally before commercializing them to external labs. Attributed the 35% sequential growth in the product business to the resolution of Q1 shipping delays and the successful onboarding of a new commercial team at the start of the year. Addressed the critical clinical failure in AML (Acute Myeloid Leukemia) diagnostics by providing one-day molecular results, significantly improving upon the industry average of 10 to 14 days. Demonstrated significant operating leverage as a $300,000 revenue increase contributed to a $600,000 positive swing in adjusted EBITDA, utilizing existing infrastructure to scale. Strengthened the commercial pipeline by adding 10 new distributor reps and identifying over 25 new qualified customers during the quarter. Navigated complex distribution partnerships with major players like Thermo Fisher and Cardinal by developing 'unique recipes' for each distributor's specific sales structure and incentives. Management expects continued revenue growth in the second half of 2026, focusing on maintaining the momentum established by crossing the $7 million quarterly threshold. Anticipates a transition of pipeline accounts into active status, which is expected to drive significant revenue contributions from the product business. Plans to launch new marketing collaborations and clinical study initiatives for the rapid AML assay to increase market visibility and domestic/international sales. Focuses on translating incremental revenue growth into sustained adjusted EBITDA and cash flow through continued utilization of the established laboratory and commercial platform. Aims to continue innovating new products that address clinical utility, workflow, and economic hurdles identified within their own pathology operations. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Generated $700,000 in operating cash flow organically, increasing the cash balance to over $3 million without a financing event. Noted that stock-based compensation expense decreased by approximately $200,000, contributing to the return to positive adjusted EBITDA. Acknowledged that while the Pathology division saw only modest sequential growth, its primary strategic value remains providing the clinical infrastructure for product development. Highlighted that quarterly variability in the product business is often a result of arbitrary reporting cutoffs rather than changes in underlying customer demand. CEO Ilan Danieli noted a lack of transparency into specific share movements but attributed increased interest to recent IR activities and participation in investment conferences like the MicroCap Conference. Suggested that computer algorithmic trading, which is difficult to trace, likely played a role in the high volume observed over the two-day period.

Revenue reaches quarterly record as Precipio returns to positive Adjusted EBITDA and strengthens cash position NEW HAVEN, Conn., Aug. 14, 2026 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), announces financial results for the second quarter that ended June 30, 2026. Below are some of the key financial performance metrics for the Company. For additional results please see the Company’s Form 10-Q which was filed today. Revenue – $7.0M vs. $6.7M in Q1-2026, and up 22% YoY from $5.7M in Q2-2025. This comprised of $6.1M in pathology revenue (up from $6.0M in Q1) and $0.9M in product revenue (up from $0.66M in Q1). Adjusted EBITDA – $0.4M vs. $(0.2)M in Q1-2026. The change was driven by increased revenues of $0.3 million and a decrease in stock based compensation expense of $0.2M. Cash flow - Cash Flow generated from operations was $0.7M in Q2-2026; total increase in cash was $0.5 million, resulting in an end of quarter cash balance exceeding $3M, vs $1.1M in Q2-2025. “As anticipated, Q2 operating performance reflects a healthy recovery and continued momentum across the business, with customer growth generating quarterly revenue surpassing $7M for the first time in Company history. Product revenues increased 21% from the previous high of $750K in Q4-2025, and cash increased to over $3M,” said Ilan Danieli, CEO of Precipio. “We’ve achieved this level of cash without a financing event, demonstrating the strength of our operations. We're encouraged by the progress we've made and believe we are well positioned to continue building on this momentum.” Additional information and a more in-depth discussion on the Company’s Q2-2026 performance will be provided in the shareholder call on August 17th, 2026, at 5 PM ET. The call will include remarks by management on the Company’s core business, followed by a moderated Q&A session. EBITDA and Adjusted EBITDA Reconciliation and Explanation EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a non-GAAP financial measure that is widely used to evaluate operational performance and pre-tax profitability of emerging growth companies like ours. Management believes Adjusted EBITDA provides investors with a useful perspective on the Company’s financial health, particularly where non-cash amortization has an important impact on profitability. Adjusted EBITDA as we define it modifies EBITDA by excluding the non-cash costs of employee stock options and unusual non-operating income and expense. Below is a reconciliation of Net Income, EBITDA and Adjusted EBITDA for the second quarter of 2026 and 2025: About Precipio Precipio is a healthcare biotechnology company focused on cancer diagnostics. Our mission is to address the pervasive problem of cancer misdiagnoses by developing solutions in the form of diagnostic products and services. Our products and services deliver higher accuracy, improved laboratory workflow, and ultimately better patient outcomes, which reduce healthcare expenses. Precipio develops innovative technologies in our laboratory where we design, test, validate, and use these products clinically, improving diagnostic outcomes. Precipio then commercializes these technologies as proprietary products that serve the global laboratory community and further scales Precipio’s reach to eradicate misdiagnosis. Availability of Other Information About Precipio For more information, please visit the Precipio website at https://www.precipiodx.com/ or follow Precipio on X (formerly Twitter) (@PrecipioDx) and LinkedIn (Precipio) and on Facebook. Investors and others should note that we communicate with our investors and the public using our company website (https://www.precipiodx.com), including, but not limited to, company disclosures, investor presentations and FAQs, Securities and Exchange Commission filings, press releases, public conference call transcripts and webcast transcripts, as well as on X and LinkedIn. The information that we post on our website or on X or LinkedIn could be deemed to be material information. As a result, we encourage investors, the media and others interested to review the information that we post there on a regular basis. The contents of our website or social media shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the targets set herein and related timing. Except for historical information, statements about future volumes, sales, growth, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, cash flows, adjusted EBITDA, plans, objectives, expectations, growth or profitability and our potential to reach financial independence are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and our other reports filed with the U.S. Securities and Exchange Commission. Any such forward-looking statements represent management’s estimates as of the date of this press release only. While we may elect to update such forward-looking statements at some point in the future, except as required by law, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. CONTACT: Inquiries: [email protected] +1-203-787-7888 Ext. 523

Image source: The Motley Fool. Thursday, April 2, 2026 at 5 p.m. ET Chief Executive Officer — Ilan Danieli Need a quote from a Motley Fool analyst? Email [email protected] Ilan Danieli: Good afternoon, and thank you for joining our 2025 fourth quarter and year-end shareholder call. I'd like to thank everyone who submitted questions ahead of time. We will do our best to address them during the call. But before we begin our financial review and for those of our shareholders that are relatively new to Precipio, I'd like to take a moment to reflect on the impact our work has on patients every day. Behind every diagnostic test we run is a patient waiting for answers often during one of the most difficult moments of their lives. Our test helps physicians determine the most appropriate treatment options for their patients battling cancer, and those answers must be provided quickly and accurately. While today's discussion will focus primarily on financial performance and operational progress, it's important to remember that these results ultimately represent something that is beyond dollars and cents. It represents our contribution to helping patients and their families navigate their battle against cancer. Now let's turn to a review of our performance in 2025. 2025 was a year of financial and strategic inflection. At the beginning of last year, we set out to achieve an important objective for Precipio, transition from a cash-using company to a self-sustaining business with positive cash flow. I'm pleased to report that in 2025, we achieved that inflection point. During the year, we also achieved several other important milestones, continued revenue growth, improved gross margin and operational leverage, the exercise of all remaining financial warrants, removing any related overhang and the completion of the repayment of Change Healthcare loan, allowing the company to move towards a clean balance sheet. For many years, like most emerging diagnostic companies, we had to manage the business with a constant constraint of conserving capital and extending our runway. That discipline shaped our company into the highly efficient organization that we are today, but it also meant that many decisions had to be made with shorter capital preservation in mind. Today, we enter a new phase of the company's development. The discipline remains, but we are now increasingly able to deploy resources towards growth initiatives and long-term value creation. The company is moving from focusing primarily on stabilization to one increasingly centered on growth and execution. And during the call, we'll highlight several examples of that shift. Now let me turn to our financial results for the year. For fiscal year 2025, Precipio delivered $24 million in revenue, representing a 30% increase year-over-year compared to 2024. This level of growth reflects the continued expansion primarily in our Pathology Services division as well as strengthening demand for our specialized cancer diagnostic services and molecular testing technologies. Equally important, this growth demonstrates the operational leverage embedded in our business model. A large portion of our cost structure, including laboratory infrastructure, scientific personnel and operational systems is already in place as a fixed cost. As a result, incremental revenue can be absorbed efficiently without requiring proportional increases in operation costs. Therefore, more dollars can go directly to the bottom line. In other words, revenue growth increasingly translates into improved margins and stronger cash flow. This operational leverage has been a key driver of the improvement in our financial performance throughout the year. While I'm pleased with the progress we made in 2025, I want to emphasize that we believe we are still in the early stages of realizing the full financial potential of this model. Let's begin with our Pathology Services division, which continues to serve as the operational and financial backbone of the company. Throughout the year, we experienced strong organic growth in this division, driven by both acquisition of new customers and increased testing volume from existing customers. One of the most encouraging aspects of this growth is that it has been achieved without requiring significant additional capital expenditures or laboratory staffing increases. Our laboratory infrastructure remains well below its maximum capacity, meaning the incremental case volume flows efficiently through the system and contributes directly to the improved margins and cash generation. Beyond revenue generation, the Pathology division also provides a unique strategic advantage for Precipio as it relates to our Products division. Because we operate a full clinical laboratory, we have direct access to incoming patient samples and a real-world testing environment. This allows us to develop, validate and refine diagnostic products rapidly and efficiently before we introduce them to the market. Few diagnostic companies possess this dual with the capability of operating both a clinical laboratory and the product development platform under the same roof. And we believe this integrated model provides Precipio with a meaningful competitive advantage. Looking ahead, our objective for the division remains straightforward, continue growing organically while allowing it to serve as a stable cash-generating foundation for the company. Now let's turn to the Products division, which we believe represents the company's greatest long-term opportunity. First of all, it's important to acknowledge that the Products division revenues did not grow as expected this year. There are a few reasons for this. And on this call, I'd like to talk about 2 main causes. First, we experienced several customer operational fluctuations. While we did add new customers during the year, we also had pauses from several other customers due to their internal factors ranging from machine downtime to lab tech maternity relief. This caused temporary loss of revenues and subsequent fluctuations, which essentially canceled out some of the growth from new customers. The good news is we learned from all these situations, and we implemented additional business continuity measures that are intended to reduce these fluctuations in the future. For example, as part of our process when we now onboard a new customer, we may establish at the customer selection, our lab as a backup testing facility to be used if the customer experiences a temporary operational interruption. If activated, our clinical laboratory is then used as the customer send-out lab. This means that if they are down for any reason, the samples get sent to our lab in accordance with the customers' instructions, which helps support continuity of patient testing during those service interruptions. This provides continuous, consistent service to their clinicians, something that's always important to any laboratory, and it provides continuity of revenues to us. The second reason for the lack of substantial growth was the limited commercial team we had in place. We had one senior executive spending part of their time on product sales plus another junior sales rep person. This team proved to be insufficient for the growth we were targeting. But at the start of 2024, that's all we could afford. That's an example of the company playing defense. But with the shift towards our cash position came a change in the form of now playing offense. Towards the end of 2025, as we saw our business swing to profitability, we focused on strengthening the project commercial team. In January 2026, we hired an industry veteran experienced Chief Commercial Officer, plus 2 seasoned experienced business development officer professionals full time. So we went from barely 1 person working on the commercial growth of the product division to 3 dedicated full-time and experienced team member. This team will focus on both direct sales as well as developing the relationships we need with our distributors to get into tougher to access customers. I'm confident that with this team, we will be making a lot of progress. Having said that, during 2025, we saw encouraging progress in this division. Product revenues were impacted by several factors, including the relapse and subsequent return of several customers to full operational volume, the acquisition of new customers and organic growth from existing customers expanding their test menu by adopting additional HemeScreen and Bloodhound panels. We expect to see the impact of all those factors during 2026. One important characteristic that our platform continues to demonstrate is the following: once laboratories adopt our technology, they tend not only to stay with it, but also expand their usage over time. We also continued strengthening our distributor partnerships, which represent an important pillar of our long-term growth strategy. Distribution relationships will eventually allow us to reach a significantly larger number of laboratories than we could through direct sales alone, providing more scalable pathway for expanding the adoption of our technology. As many of you know, onboarding a new customer -- new laboratory customer in the diagnostic industry involves several steps, including validation studies, workflow integration, IT and regulatory review. These processes can occasionally delay the start of revenue. However, we continue to see a growing pipeline of laboratories progressing through the onboarding process, each representing potentially substantial recurring revenue as they move into full clinical expansion. Now turning briefly to margins. Overall gross margin improved year-over-year from 41% in 2024 to 45% in 2025, primarily driven by higher case volumes in our Pathology Services division, a more favorable case mix towards higher-margin tests and continued improvement of operational efficiency. In the Products division, margins were temporarily impacted by strategic investments made during the year, including expansion into a larger facility and additional manufacturing in Q3 resulting in gross margins of 30%. However, in Q4, we saw a leap to 90% gross margin for our products. Now I know this is a surprising number, especially leaping from 30% in the previous quarter. Let me take a moment to explain this operationally. First of all, as a reminder, historically, we were consistently at around 40% to 50% gross margins. And in Q3, we dropped to 30% because of the additional expenses that were burdened into the manufacturing costs. So I'd like to treat the 50% margin number as our baseline given our covered production volume. Here's why Q4 margins dropped to 90%. As part of our production planning in Q4 2025 and looking to Q1 2026, we anticipated 2 disruptions to our production schedule. The first was downtime due to year-end holidays and staff taking time off. The second was equipment maintenance expected in Q1 of 2026, where our production machines would be down for approximately 2 to 4 weeks. Therefore, in order to ensure we had adequate inventory for our customers, in addition to the scheduled production runs to fulfill orders in Q4, we produced significantly more inventory to cover expected Q1 2026 demand. Keep in mind, when we produce these products, they are intended for sale to our product customers as well as consumed in our own clinical lab. As a result of this larger, more concentrated production run, we inadvertently achieved a much higher margin of 90%. While this was unusually high due to manufacturing circumstances, this is an illustration of the scalability of our products manufacturing capabilities and the impact to margin we can expect to achieve in the Products division as we scale up. As volumes grow, we expect division to demonstrate the strong margin profile typical of successful diagnostic product companies. Beyond financial performance, 2025 included several important operational and commercial achievements. I'd like to share a few of them with you. We continued the expansion of the HemeScreen and Bloodhound molecular platform. We published an exciting joint academic study with one of the leading cancer centers in the country, Memorial Sloan Kettering Cancer Center in New York, demonstrating the novel clinical value of our Bloodhound BCR-ABL product. We presented a poster at the AMP conference, the Association of Molecular Pathology in collaboration with Wayne State University, showcasing the clinical value of our HemeScreen cytopenia panel. We made improvements in customer onboarding processes. We expanded our manufacturing capacity, and we strengthened the company's financial position through debt repayment. We believe that each of these milestones contributes to building a more scalable and durable business. Moving now to market interaction. In 2025, we also began to interact more with the public markets. In 2024 and before, we remain relatively silent and didn't really engage with investors. And if an investor reached out to us requesting a call with management, we typically politely declined and responded that management is not currently speaking directly with investors. But as our story developed and our performance improved, in 2025, we began responding to those inquiries and engaging with investors, both in one-on-one meetings as well as in various public forums and conferences. During 2025, we had more than 50 unique interactions with investors, family offices, institutional funds and analysts. I believe that while the 300% share price appreciation we saw in 2025 was primarily due to the company's business and financial performance, it's also due to the increased engagement with investors. We plan to continue to engage with the market this year. Looking ahead to 2026, our focus is on growing the products business. With our new dedicated and experienced product sales team as well as process improvements we've implemented, we will focus on accelerating the adoption of our HemeScreen and Bloodhound products, converting our pipeline of laboratories into active revenue-generating customers and expanding the number of institutions utilizing our platform. We expect to see continued growth in the pathology service side of the business as well, further generating cash that will be reinvested primarily into the products business growth. One example of an opportunity for us is in AML or acute myeloid leukemia testing, particularly where most hospital laboratories currently rely on external reference testing and where turnaround time of testing results can have a direct critical impact on patient lives. Today, most hospital laboratories across the country do not perform AML testing internally and instead send the patient samples to external reference laboratories. For AML testing, these reference labs typically deliver results to the clinician in 7 to 10 days. And this is despite the AML guidelines requiring results delivered within 5 days. With several targeted therapies tied to specific mutations tested, receiving immediate results is a critical life and death decision. The problem is there is a severe mismatch between the clinical situation facing the doctors and their patients and the diagnostic options available to meet most of these situations. Therefore, we see an unmet need for testing workflows that can better support timely clinician decision-making. By using the combined strength of our pathology services division and our blood AML assay, we will be launching a service that combines rapid molecular testing. And when I say rapid, I mean next-day results, followed up by a comprehensive analysis 5 days later. We believe this further -- this service could further differentiate our platform and expand both our services opportunity as well as introduce laboratories to the products we offer. This is just one example of the superior service our technology enables us to provide. Further details will be announced as we launch this offering. We see significant opportunities to expand the share of our Products division within an estimated $500 million addressable market annually in the U.S. As we execute on that strategy over the next 3 to 5 years, we expect the company's revenue mix to move from its current approximate 90-10 weighting towards pathology service to a more balanced revenue mix between pathology services and products. In summary, while there is still work ahead, we believe the foundation we have built is strong and the opportunities ahead of us significant. In 2026, our focus will be on growth execution, commercial momentum, increased market share and ensuring that our progress is communicated clearly to the market. I'd like to thank our employees, customers, partners and shareholders for their continued support and trust. We look forward to updating you again next quarter as we continue executing on our strategy and building long-term value for our shareholders. Thank you, and have a great evening. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Precipio, 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 Precipio 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 $462,983!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,447!* Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 212% 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 June 2, 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Precipio (PRPO) Q4 2025 Earnings Transcript was originally published by The Motley Fool

Image source: The Motley Fool. Thursday, April 2, 2026, at 5 p.m. ET Chief Executive Officer — Ilan Danieli Operator Ilan Danieli: Good afternoon, everyone, and thank you for joining us today for Precipio's Q1 2026 Shareholder Update Call. On today's call, we'll walk through our financial results, provide an update on our operations and commercial progress. And then for the first time and following requests from several of our shareholders, we're going to open it up for a live Q&A from the audience. At the end of my remarks, the operator is going to take over and provide instructions for those who want to ask a question. Before reviewing the quarterly financials for Q1, I'd like to take a moment to step back and discuss where we believe the company is in the execution of its strategy. Our mission at Precipio is centered around advancing cancer diagnostics and delivering faster, more accessible and more actionable testing solutions to laboratories and clinicians. What makes our model unique is that we're not only developing products in isolation. By operating our own clinical laboratory, we identify real-world diagnostic challenges firsthand, validate solutions rapidly in a clinical environment. And then once our products have demonstrated their clinical, operational and financial value, we commercialize them to the broader market. Over the past several quarters, we've continued to strengthen both sides of that model. Our pathology business continues to provide a stable and growing operational foundation while generating cash flow to the company. And our products business and expanding commercial infrastructure are positioning the company for scalable, long-term growth, margin increase and cash generation. Before we get to the numbers, I'd like to take a moment to discuss a topic that several people have raised, and that is the variability and predictability of the company's revenues. Let's break it down by division, starting with pathology services. Generally speaking, the pathology services business is relatively predictable. Once we win a customer, they usually have a consistent number of patients coming in. There's a relatively consistent percentage of the patients that will require some sort of biopsy, which is sent to our lab. Testing modalities are pretty standard. We control costs extremely well, so there isn't much variance there. The same goes for revenue build, reimbursement and cash collected all quite predictable. There are 2 elements that are outside of our control and can cause fluctuations in the division performance. The first is customer transition. For example, a physician may retire or the practice may get acquired by a large hospital network that internalizes testing. In those situations, the patient's sample flow from that customer will stop. The second element, which we experienced this quarter is a change to reimbursement. Each year, usually in January, CMS comes out with its new fee schedule. As a government organization, there's no negotiations. So the new fee schedule basically becomes our new pricing. As you can imagine, there are very few rate increases. And usually, it goes the other way. In early Q1 of this year, the new 2026 CMS fee schedule was released and it included a reduction of 8% in the fee for one of our most frequently used tests, flow cytometry. Subsequently, we had to write down revenue this quarter to the tune of approximately $0.5 million creating a significant swing in net income from the prior quarter. So while there was no change to our customer base or patient sample volume, the new fee schedule introduced by CMS impacted our revenue, net income and gross margins. We've been working on several projects to reduce our operating costs and bring back up that margin, essentially reversing the impact of the fee schedule. And as you saw, our cash flow from operations was still positive. So that essentially covers drivers of variability in the pathology services business. On the product side, generally speaking, once the customer is live and operating, revenues are quite stable and predictable. This quarter, we saw an $80,000 decline in revenue from the prior quarter, and this was due to one of our main customers shifting the date of their order from the end of March to early April. So while nothing changed from a customer perspective, following the principles of revenue recognition, of course, this order will be part of Q2 revenue. This is one relatively small factor that can cause fluctuations within the products business. The second and more challenging variable is the onboarding process for customers. We've discussed this in the past and shift -- stories ranging from IT roadblocks to machine downtime during validations. I know many of you have inquired about guidance and forecasting, and I do think that as we grow the customer base and gain more experience, we will be able to better predict our future growth. Also, with a new commercial team building a broader pipeline that will help us gain better insight into future growth as well. I'll add more on the pipeline later in this call. Even within the products business, those fluctuations are mostly related to initial setup of the customer. And once the customer is live, there are far few fluctuations and revenue is more predictable. So as we grow our customer base and get more experience under our belt. I do think we will eventually reach the point where we can get -- begin to become more comfortable in predicting revenue growth. In summary, as with any business, which deals with fluctuations both internal, but in our situation, more from external factors that are largely outside of our control. However, they are more prevalent in the pathology business -- pathology services business in the products business, which is yet another reason why the products business is our growth focus. With that, let's turn to a review of our financial results for the quarter. Total revenue for Q1 remained flat quarter-over-quarter at $6.71 million and up over 30% from the same quarter last year. Pathology revenue increased a little over $6 million this quarter from $5.9 million in the previous quarter and up 36% from $4.4 million in Q1 of last year. Product revenue decreased by $80,000 from $740,000 to $660,000 this quarter, impacted by the timing of our customer shipment originally expected later in the quarter that moved into Q2. From an accounting standpoint, that revenue shifts quarter from a business standpoint, nothing really has changed. More importantly, the quarter reflects continued progress in areas we believe are the strongest indicators of future growth particularly commercial expansion, distributor engagement and pipeline development, marking a foundational quarter for our expanded commercial strategy, I'd like to take a few moments to discuss those results. As we mentioned, we recently invested in hiring a dedicated commercial team focused on accelerating adoption of our proprietary product portfolio through distributor relationships and direct customer engagement. Given the onboarding and sales cycle associated with molecular diagnostic products, the team's initial focus has been on building relationships and educating our distribution partners, identifying qualified target accounts and developing a scalable pipeline. This takes place via a process that begins primarily with our distributors. As we've described in the past, our team has to first form relationships with the distributor reps and familiarize them with our company, with our value proposition and with our product offering. Once that occurs, they can begin to review with each rep their territory and identify qualified potential leads. The way we qualify leads is through a pretty straightforward process. First, we ensure that the customer has existing cancer diagnostic operations and is either running some of the test, our products can replace in-house or most likely sending them to an outside lab. This establishes the customer as an appropriate target lab. Once we've established that, we learn which products they're interested in, and their annual volumes to assess and assign an estimated annual dollar revenue potential based on their existing testing volume for our panels. The annual revenue potential number, this account now becomes a qualified lead and we begin to work together with the distributor rep of arranging an introductory meeting to start the sales process. That work started with the hire of the commercial team at the start of the year and is already beginning to produce measurable results. During Q1, the commercial team established relationships with approximately 20 new distributor reps identified 2 -- sorry, 10 new qualified customer opportunities. and added approximately $3 million of annualized revenue potential to the pipeline. Combined with existing opportunities, our current commercial pipeline now represents approximately $10 million in annualized revenue potential. Now as a reminder, this does not translate into a forecast of $10 million for this year because the x factor, we don't know is when each customer will go live. But we do feel this represents a thorough and responsible process for targeting customers and generating a sales funnel and future pipeline. We believe this is particularly encouraging given that the sales team only joined at the start of the year and initially underwent extensive training on our technology, product portfolio, market dynamics and competitive positioning. Many of these early results validate both the market opportunity as well as our commercial strategy. As the team continues expanding distributor relationships and converting qualified opportunities into active customers, we expect the pipeline to continue to grow as well as also increase converting into recurring revenue. Now let's turn to profitability and margins. Adjusted EBITDA for the quarter was negative $200,000 compared with positive $960,000 in Q4 of 2025, a relatively large swing, I'd like to take a few moments to discuss. Importantly, the majority of that sequential change was driven by a combination of timing-related items, nonrecurring accounting impacts and investments we're making to support future growth. There were 4 primary factors impacting Q-over-Q EBITDA change. First, as discussed, this quarter, we experienced reimbursement-related impact tied to the change in certain CMS pathology billing codes which reduced our gross profit -- our gross profit by approximately $125,000. Second, the hiring of our commercial team resulted in an increase of approximately $250,000 for the quarter. This includes payroll, travel and business development expenses as well as marketing activities. As we shared, we're already -- we've already seen commercial benefits from this hiring in terms of the pipeline growth. Importantly, we view this not only as incremental overhead, but as a strategic investment in building the commercial platform necessary to scale our products business over the coming years. In other words, once this team begins to generate increased revenue of, let's say, $1 million per quarter, the investment of $0.25 million per quarter will certainly have paid off. Third, in Q4 2025, we benefited from a onetime nonrecurring accounting adjustment related to previously accrued bonus compensation, which created an approximately $360,000 positive swing in adjusted EBITDA compared to the current quarter. And lastly, we saw a $280,000 reduction in product gross profit related to the delivery timing shift from late Q1 to early Q2 and reduced production volumes. From a business activity perspective, this revenue was not lost. It simply moved across reporting periods. The combination of these factors caused a $1 million swing in EBITDA. But as you can see, a significant dollar amount to these are onetime changes that are unrelated to the company operations. Moving now to discuss gross margins. Company gross margin for the quarter was 40% compared to 47% in Q4. As with EBITDA, we believe it's important to distinguish between structural margin pressure and temporary or investment-driven impacts. The margin compression this quarter was primarily associated with the same factors we just discussed. Revenue timing, reimbursement changes and investments in commercial capacity that are now largely in place. Also, Q4 margins were somewhat inflated due to overproduction of products in Q4 relative to Q1 due to the expected equipment downtime for maintenance as we stated previously. Resumption of regular production volume and continued growth will bring a return to higher margins, which are inherent in the underlying economics of this business. What gives us confidence going forward is that many of these costs are relatively fixed in nature. So as revenue grows, particularly in the product segment, we believe the business has the potential to generate meaningful operational leverage. Overall for the business, we would expect company margins to not only recover as product revenue scales, but over time, potentially improve beyond historical levels as the revenue mix increasingly shifts to our proprietary products and product-driven services. Turning briefly to cash flow. Total cash flow for the quarter was negative approximately $40,000, while cash flow from operations remained positive at approximately $60,000. This pattern is generally consistent with what we historically seen in the first quarter of the year, driven primarily by a combination of start of the year annual expense resets along with slower collections associated with patient insurance deductible cycles. Importantly, we don't view the quarter's cash flow performance as an indicative of any structural change in the business, but rather normal seasonality that we expect to normalize as the year progresses. So looking ahead, a couple of points I want -- I'd like to make. First, we expect continued expansion of our commercial pipeline and increased conversion of that pipeline into revenue during the second half of the year. Second, we expect margins to improve as recent commercial investments begin contributing more meaningfully to revenue growth and we scale up production. And finally, overall, we expect stronger operational performance as we move through the balance of 2026. While quarterly results may fluctuate at times due to reimbursement dynamics, shipment timing or seasonality, we do believe the broader trajectory of the business remains very positive. We're continuing to grow our commercial reach, expand our pipeline, strengthen our product platform and invest in the infrastructure we believe necessary to build a substantially larger and more scalable business over time. And with that, I'm going to hand it over to the operator to open up the call for questions. Operator, please go ahead. Thank you. Operator: [Operator Instructions]. Ilan Danieli: Thank you, Chloe. Meanwhile, as we build this roster, there's a couple of questions that were sent in, in advance of the call. So I'm going to go through those and then we can go to the live Q&A. So the first question was, can you elaborate on the utilization rate of your labs? Or in other words, how much more revenue can your current laboratories generate without significant CapEx? We're currently operating pathology services business at approximately $24 million on an annualized basis. We believe that, and this depends on the case mix. We have between $45 million to $50 million in laboratory capacity before we need to make any changes that involve any significant CapEx or hiring. Second question, in your recent corporate deck, there's a slide that mentions the expansion potential of your technology into broader multimillion dollar markets. Is there a specific road map for these expansion plans? And if yes, how much additional CapEx and R&D expenses is foreseen with which kind of financing? So that's a really important question, and it really gets to the core of how we think about the long-term evolution of Precipio. Today, our primary focus remains execution within our existing product portfolio and the markets we already serve. Even within our current addressable market, we're still at the very early stages of market penetration. So to put that in perspective, our products business generated just under $3 million in revenue last year. And this is within an annual TAM of about $0.5 billion in the U.S. So we see a very significant runway for growth with the products we already have in place. That said, one of the reasons we referenced broad market opportunities in our corporate materials is because we believe the underlying platform would be built has applications well beyond our current hematology-focused offerings. What's unique about Precipio is not any single product, it's the model itself, the combination of a real-world clinical laboratory environment for diagnostic workflows, operational validation capabilities and commercial distribution infrastructure. We believe that over time, this model can be applied to additional areas diagnostics. Having said that, we intend to approach expansion in a disciplined manner. Our philosophy is to continue scaling the existing product business, expand recurring revenue, strengthening cash flow generation and leverage the commercial infrastructure we're building today. As the company grows and becomes increasingly well capitalized, we believe we'll be in a strong position to selectively expand into adjacent markets without necessarily requiring the kind of large-scale R&D spending and associated capital typically associated with traditional diagnostic companies. And I think that's a really important distinction because our development model is tightly integrated with our clinical operations, and we think we've potentially enter new markets with a lower development risk, shorter validation cycles and significantly more capital efficiency than many traditional life sciences. So in summary, while we're not announcing any specific expansion initiatives today, we do believe the long-term opportunity for the platform extends meaningfully before the markets we currently serve. All right. With that, Chloe, let's go to our first question. Operator: We have a question from Adam Hutt from Leviticus Partners. Adam Hutt: It's really just a continuation of what you've been -- the questions you've kind of already answered, but would you be likely in at all to open up, for instance, a facility in the Midwest or the West. Would the logistics preclude that? Or is transportation so efficient that you'll never need another facility elsewhere? Ilan Danieli: Thanks, Adam, good to hear for you. Good question. I don't think so. Logistics are, for the most part, quite good. And there really isn't a significant need to spend that kind of money to duplicate the facility. I can tell you, for example, as you know, our lab is in Connecticut. Even from New Jersey, samples get picked up by FedEx and they fly through Memphis and arrive next morning at 9 or 10 in the morning. So there really isn't much advantage even from an adjacent state. There isn't much logistic advantage to having something on the West Coast. So I think if anything, if we get to that point, we'll expand capacity, which for a large part is mostly on the CapEx kind of equipment side and at those revenue levels, it's a very efficient process. Adam Hutt: So New Haven would expand, no Los Angeles facility, okay. Ilan Danieli: No, no. No, there's no need for that. Adam Hutt: Thank you. Ilan Danieli: All right. Chloe, it seems like that's the only question. Operator: As there are no questions at this time. Thank you for attending today's presentation -- oh, we have one from [ Thomas Duxbury ]. Unknown Analyst: Ilan, congrats on the continued ramping and cash flow management of the company. I guess could you give us a little bit more color on the ramp, especially on the product side from Q2 onward through the rest of the year? I assume with that order shifting into Q2 into April that Q2 will obviously be up from Q1. And hopefully, with the commercial team that you have now in place, that we will see even better loaded back half of the year? Ilan Danieli: Yes. Tom, good to hear for you. And yes, I hope so too. I think -- the commercial team has probably had already a better-than-expected impact in Q1, as I mentioned, keep in mind, the only those 4 months and I would say at least half of that time has been for training. So to add about $3 million of pipeline is great, and I think that, that's only increase over time. Of course, the X factor is how long does it take to translate that $3 million of pipeline into $3 millions of revenue. And this is where it gets really difficult because a lot of those factors are out of our control. So as an example, we had a customer -- I just spoke with a customer this morning, who has completed the validation and is ready to go live from a technical standpoint, what they're now waiting for is to set up a meeting with all the physicians to teach them how to order the new test of the system. It sounds mind-numbingly ridiculous, quite frankly, but those are things they face. And this is a huge organization, so they have these meetings once a quarter, and that hasn't been scheduled yet. So this meeting could happen next week, and the customer goes live. This meeting could happen in July and then the customer goes live. So it's really hard to kind of figure out what is the time line for these customers to transition from readiness to go live and when that translates into revenue. I think the best thing I can offer -- efficient. So if the customer says, hey, we want to order $100,000 of products next week, we can deliver that. Unfortunately, things we can only control what we can control. So I hope that helps. Operator: We have a question from Adam Hutt from Leviticus Partners. Adam Hutt: One for the road, boys. I'm familiar with the company called Interpace that had a pancreatic cancer test. They pretty much got knocked out by the insurance companies. Stock has been a big, big wealth destructor. Obviously, the blood cancers, I think, are probably -- you're able to show much more efficacy and return of the dollar, I think, than a particular pancreas test. Should any of us be losing sleep over the insurance monster that's a bit of a bugaboo this quarter? Ilan Danieli: Thank you, Adam. Yes. So I don't know if losing sleep, but it's always a concern because they are the payers, and they are the ones who ultimately decide. It's not a usual kind of supply and demand model. It's really the payers kind of determine what the revenue or where payments are going to be. Having said that, all of our products and certainly all of our services use established CPT codes. I'm not familiar with Interpace, but if there's a company that doesn't have an established CPT code or it's a new code that was just assigned, there's a lot of uncertainty around that. And I don't really think that exists. Our test and the codes we used are long ago established codes and they're not going anywhere. They're supported by thousands of pages of clinical validated data. So I think in that sense, are there going to be rate fluctuations like we saw? Sure. And we, as a company, have to respond by being more efficient to keep that margin, and we're doing exactly that. But I don't think it's going to be a situation where they're going to say, yes, you know what, we're not testing for acute leukemia and we're not paying for that anymore. We're not paying for that anymore. I don't think that's going to happen. So I think relatively speaking, we're okay. Adam Hutt: Can you fight -- do you have any restitution against the rate at which they try and -- you do. What can you do besides just margin from within? You can't really see the insurance companies, can you? Ilan Danieli: No, you can't. No, you can't. So that's pretty much it. And for the most part, we haven't really seen anything egregious just when there's clinically supported data. It's usually relatively stable. And this is kind of the first drop that we've seen in 15 years of operating. It's an 8% drop on one of our tests. It's a frequently run test, but it's an 8% drop. So I think, in general, this is a pretty stable field. Adam Hutt: Thank you. Operator: Okay. There are no questions at this time. This concludes today's conference. Thank you for attending. You may now disconnect. Before you buy stock in Precipio, 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 Precipio 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 $462,983!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,447!* Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 212% 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 June 2, 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Precipio (PRPO) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

Shares of Precipio, Inc. PRPO have lost 14.4% since the company reported its earnings for the quarter ended March 31, 2026. This compares with the S&P 500 Index’s 0.3% loss over the same period. Over the past month, the stock has lost 9.1% against the S&P 500’s 5.3% gain. Precipio reported first-quarter 2026 net sales of $6.7 million, up 36.2% from $4.9 million in the year-ago quarter, driven primarily by growth in pathology services. Service revenue, net of allowance for credit losses, increased 42% year over year to $6.1 million from $4.3 million, while product revenue was essentially flat at $0.7 million. PRPO processed 4,912 diagnostic cases during the quarter, up 63% from 3,021 cases a year earlier, though a lower average price per case partially offset the benefit of higher volume. Net loss widened to $1.4 million, or 81 cents per share, from $0.9 million, or 59 cents per share, in the prior-year period. Gross profit rose 27.3% to $2.7 million from $2.1 million, although gross margin narrowed to 41% from 43% a year ago. Management highlighted continued investment in PRPO’s commercial infrastructure as a key focus area during the quarter. According to CEO Ilan Danieli, the newly hired commercial team established relationships with approximately 20 distributor representatives, identified 10 new qualified customer opportunities and added about $3 million in annualized revenue potential to the sales pipeline during the quarter. Combined with existing opportunities, Precipio’s commercial pipeline now represents around $10 million in annualized revenue potential. PRPO said the onboarding process for molecular diagnostic customers can create timing variability in quarterly results because customer validation, IT integration and physician training schedules are often outside its direct control. Management nevertheless indicated that once customers become operational, revenue tends to become more stable and predictable. Precipio, Inc. price-consensus-eps-surprise-chart | Precipio, Inc. Quote Adjusted EBITDA loss was $0.2 million in the first quarter against a gain of $0.9 million in fourth-quarter 2025. Management attributed the sequential decline to several largely temporary factors, including lower pathology gross profit tied to CMS reimbursement cuts, delayed product shipments, increased spending on commercial expansion and the absence of a one-time accounting benefit recorded in fourth-quarter 2025. Precipio said a new 2026 CMS fee schedule reduced reimbursement rates by 8% for one of its most frequently used tests, flow cytometry, leading to an approximately $0.5 million revenue write-down and a $125,000 hit to gross profit during the quarter. Additionally, hiring and ramping the commercial team increased quarterly costs by approximately $250,000, while a delayed shipment from one of Precipio’s largest product customers reduced product gross profit by about $280,000 because revenue recognition shifted into the second quarter. Operating expenses climbed 38.5% to $4.2 million from $2.9 million a year earlier, reflecting higher consulting fees, recruiting costs, research and development expenses and stock-based compensation. Stock-based compensation alone increased by $0.6 million year over year. Cash flow from operations was $64,000 during the quarter, against cash used in operating activities of $44,000 in the year-ago period. Total cash burn was approximately $47,000. Management said first-quarter cash flow reflected normal seasonal patterns, including annual bonus payments, beginning-of-year expenses and slower collections tied to patient insurance deductible resets. Precipio ended the quarter with $2.6 million in cash and working capital of $2.1 million. However, the company reiterated that substantial doubt remains regarding its ability to continue as a going concern over the next 12 months, citing accumulated deficits and dependence on future revenue growth and potential financing activities. Management expects continued expansion of the commercial pipeline and greater conversion of opportunities into revenue during the second half of 2026. PRPO also anticipates margin improvement as recent commercial investments begin contributing more significantly to revenue growth and as production volumes increase. Danieli stated that Precipio’s pathology services business currently operates at an annualized revenue run rate of about $24 million, while existing laboratory infrastructure could support between $45 million and $50 million in annual revenue before requiring significant capital expenditures. During the quarter, Precipio completed repayment of funding received under Change Healthcare’s Temporary Funding Assistance Program, which had been established following the 2024 cyberattack affecting billing systems. The company made its final repayment during the first quarter of 2026. PRPO also continues pursuing approximately $0.7 million in remaining Employee Retention Credit (ERC) claims after receiving about $0.8 million in ERC payments during 2025. Precipio did not announce any acquisitions, divestitures or restructuring initiatives during the quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Precipio, Inc. (PRPO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Total Revenue: $6.71 million, flat quarter-over-quarter, up over 30% year-over-year. Pathology Revenue: Increased to over $6 million from $5.9 million in the previous quarter, up 36% from $4.4 million in Q1 of last year. Product Revenue: Decreased by $80,000 from $740,000 to $660,000 due to timing of customer shipment. Adjusted EBITDA: Negative $200,000 compared with positive $960,000 in Q4 of 2025. Gross Margin: 40% compared to 47% in Q4. Cash Flow from Operations: Positive at approximately $60,000. Total Cash Flow: Negative approximately $40,000. Warning! GuruFocus has detected 1 Warning Sign with PRPO. Is PRPO fairly valued? Test your thesis with our free DCF calculator. Release Date: May 18, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Precipio Inc (NASDAQ:PRPO) reported a 30% increase in total revenue year-over-year, reaching $6.71 million for Q1 2026. The pathology services business remains stable and predictable, providing a strong operational foundation and consistent cash flow. The company has successfully established a commercial team that has already added approximately $3 million in annualized revenue potential to the pipeline. Precipio Inc (NASDAQ:PRPO) has a significant runway for growth within its existing product portfolio, with a total addressable market of about $0.5 billion in the US. The company is focusing on expanding its commercial pipeline and expects increased conversion into revenue during the second half of the year. The new 2026 CMS fee schedule resulted in an 8% reduction in reimbursement for flow cytometry, impacting revenue and gross margins. Product revenue decreased by $80,000 due to a shift in customer order timing, affecting quarterly financial results. Adjusted EBITDA for Q1 2026 was negative $200,000, a significant decline from positive $960,000 in Q4 2025. Gross margin decreased to 40% from 47% in the previous quarter, primarily due to reimbursement changes and timing-related factors. The onboarding process for new customers in the products business is challenging, with factors like IT roadblocks and machine downtime causing delays. Q: Can you elaborate on the utilization rate of your labs and the potential for revenue generation without significant capital expenditure? A: Ilan Danieli, CEO, stated that the pathology services business is currently operating at approximately $24 million on an annualized basis. The company believes it has a capacity of between $45 million to $50 million before needing significant capital expenditure or hiring. Q: Is there a specific roadmap for expanding your technology into broader markets, and what are the expected costs? A: Ilan Danieli explained that while the primary focus remains on executing within the existing product portfolio, there is significant growth potential within the current addressable market. The company plans to scale the existing product business and expand into adjacent markets over time, leveraging its current infrastructure without large-scale R&D spending. Q: Would Precipio consider opening a new facility in the Midwest or West, or is the current logistics sufficient? A: Ilan Danieli responded that logistics are efficient, and there is no significant need to duplicate the facility elsewhere. The current setup in Connecticut is sufficient, even for samples from adjacent states. Q: Can you provide more color on the product side ramp from Q2 onward? A: Ilan Danieli noted that the commercial team has already added about $3 million to the pipeline, and while the timeline for converting this into revenue is uncertain, the company is prepared to meet demand efficiently once customers are ready to go live. Q: Should there be concerns about insurance companies affecting revenue, similar to what happened with Interpace? A: Ilan Danieli assured that all products and services use established CPT codes, which are supported by extensive clinical data. While rate fluctuations can occur, the field is generally stable, and the company focuses on efficiency to maintain margins. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Stable revenue performance driven by timing dynamics; expanding product pipeline expected to drive second-half growth NEW HAVEN, Conn., May 14, 2026 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), announces financial results for the first quarter ended March 31, 2026. Below are some of the key financial performance metrics for the Company. Please see the Company’s Form 10-Q which was filed today for additional details. Revenue – $6.71M (vs. $6.69M in Q4-2025; $4.93M in Q1-2025). This was comprised of $6.05M in pathology revenue (up from $5.9M in Q4) and $0.66M in product revenue (down from $0.74M in Q4). The product revenue decline is temporary, and was largely driven by delayed shipment to one of the Company’s largest product customers, shifting revenue recognized to Q2. Adjusted EBITDA – $(0.16) million (vs. $0.96 million in Q4 2025). The change was driven by several factors highlighted below, and which will be addressed in more detail on the Company shareholder call on Monday, May 18th. Pathology gross profit decreased due to CMS cuts ($125K) Product gross profit decreased ($280K), largely due to a customer request to delay shipment to Q2 Increased cost due to hiring of product business development team ($250K impact) Q4-2025 had a one-time benefit due to year-end reversal of management annual bonus accruals (~$360K) Cash flow - Cash Flow from operations was positive $60,000; total cash burn was $47,000. This was largely driven by two factors: Annual bonus payments and beginning-of-year expenses for various service agreements Slower collections due to patient deductible resets at the start of the year “I think this quarter is a good example of how to properly assess non-commercial fluctuations in our business,” said Ilan Danieli, CEO of Precipio. “While revenue is flat, that is largely a function of timing. The underlying business fundamentals continue to grow, in particular the product pipeline that has been generated by our newly hired commercial team.” Additional information and a more in-depth discussion on the Company’s Q1-2026 performance will be provided in the shareholder call on May 18th, 2026, at 5 PM ET. The call will include remarks on the Company’s core business as well as a moderated Q&A session at the end of the Company’s remarks. EBITDA and Adjusted EBITDA Reconciliation and Explanation EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a non-GAAP financial measure that is widely used to evaluate operational performance and pre-tax profitability of emerging growth companies like ours. Management believes Adjusted EBITDA provides investors with a useful perspective on the Company’s financial health, particularly where non-cash amortization has an important impact on profitability. Adjusted EBITDA as we define it modifies EBITDA by excluding the non-cash costs of employee stock options and unusual non-operating income and expense. Below is a reconciliation of Net Income, EBITDA and Adjusted EBITDA for the first quarter of 2026 and 2025: About Precipio Precipio is a healthcare biotechnology company focused on cancer diagnostics. Our mission is to address the pervasive problem of cancer misdiagnoses by developing solutions in the form of diagnostic products and services. Our products and services deliver higher accuracy, improved laboratory workflow, and ultimately better patient outcomes, which reduce healthcare expenses. Precipio develops innovative technologies in our laboratory where we design, test, validate, and use these products clinically, improving diagnostic outcomes. Precipio then commercializes these technologies as proprietary products that serve the global laboratory community and further scales Precipio’s reach to eradicate misdiagnosis. Availability of Other Information About Precipio For more information, please visit the Precipio website at https://www.precipiodx.com/ or follow Precipio on X (formerly Twitter) (@PrecipioDx) and LinkedIn (Precipio) and on Facebook. Investors and others should note that we communicate with our investors and the public using our company website (https://www.precipiodx.com), including, but not limited to, company disclosures, investor presentations and FAQs, Securities and Exchange Commission filings, press releases, public conference call transcripts and webcast transcripts, as well as on X and LinkedIn. The information that we post on our website or on X or LinkedIn could be deemed to be material information. As a result, we encourage investors, the media and others interested to review the information that we post there on a regular basis. The contents of our website or social media shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the targets set herein and related timing. Except for historical information, statements about future volumes, sales, growth, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, cash flows, adjusted EBITDA, plans, objectives, expectations, growth or profitability and our potential to reach financial independence are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and our other reports filed with the U.S. Securities and Exchange Commission. Any such forward-looking statements represent management’s estimates as of the date of this press release only. While we may elect to update such forward-looking statements at some point in the future, except as required by law, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. CONTACT: Inquiries: [email protected] +1-203-787-7888 Ext. 523