WGS

Investors might want to bet on GeneDx Holdings Corp. (WGS), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook. The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Consensus earnings estimates for the next quarter and full year have moved considerably higher for GeneDx Holdings Corp., as there has been strong agreement among the covering analysts in raising estimates. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: For the current quarter, the company is expected to earn $0.07 per share, which is a change of -85.7% from the year-ago reported number. The Zacks Consensus Estimate for GENEDX HOLDINGS has increased 146.67% over the last 30 days, as one estimate has gone higher compared to no negative revisions. The company is expected to earn $0.11 per share for the full year, which represents a change of -92.1% from the prior-year number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for GENEDX HOLDINGS. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 59%. Thanks to promising estimate revisions, GENEDX HOLDINGS currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. While strong estimate revisions for GENEDX HOLDINGS have attracted decent investments and pushed the stock 23.8% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away. 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 GeneDx Holdings Corp. (WGS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Monday, Aug. 3, 2026 at 4:30 p.m. ET Chief Executive Officer - Katherine Stueland Chief Financial Officer - Kevin Feeley President - Mark Gardner Investor Relations - Sabrina Dunbar Operator: Good day, and thank you for standing by. Welcome to the GeneDx Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sabrina Dunbar of Investor Relations. Please go ahead. Sabrina Dunbar: Thank you, operator, and thank you, everyone, for joining us today. On the call, we have Katherine Stueland, Chief Executive Officer; Kevin Feeley, Chief Financial Officer; and Mark Gardner, President. Earlier today, GeneDx released financial results for the second quarter ended June 30, 2026. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, updated 2026 guidance and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, August 3, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures, which exclude certain items from reported results. Please refer to our second quarter 2026 earnings release and slides available at ir.genedx.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results. Additionally, please refer to our most recent annual and quarterly filings with the SEC for a discussion of factors that could cause actual results to materially differ from forward-looking statements. With that, I will turn the call over to Katherine. Katherine Stueland: Thank you, Sabrina, and good afternoon, everyone. Our team demonstrated incredible focus and agility to deliver a solid second quarter. We hit a new record, resulting more than 30,000 exome and genome tests in the quarter, which represents 32% year-over-year growth. We reported $114.4 million of total revenue, exceeding our guide, and returned to profitability 1 quarter earlier than we had previously expected. Based on our second quarter performance and our continued momentum into Q3, we are reaffirming our full year 2026 guidance. Demand for our services has never been higher. And as we continue to drive adoption of our exome and genome, we must be relentless in our efforts to improve the rate at which we get paid for our services. It's the single biggest opportunity for us. And as we shared on the last call, we've organized the business around 3 key imperatives: first, optimizing unit economics; second, growing utilization of exome and genome; and third, delivering leading products at unmatched scale, all while managing our capital responsibly. Optimizing unit economics is our first priority because we're underearning on our potential, and we see significant room for improvement off this Q2 baseline. Our long-term vision remains unchanged. We believe the genome will increasingly become the standard for diagnosing all heritable disease, and we're continuing to optimize our commercial and operational strategies to bridge this transition. Our strategies took hold in the second quarter as mix moderated with steady month-over-month mix gains back into our exome products, including reflex. In tandem, we saw coverage begin to catch up with the clinical demand, with Carelon announcing a new coverage policy that expanded commercial genome coverage from 47% to 87% in just 1 quarter. Our team plays a pivotal role in these coverage expansions through advocacy and evidence generation, and we'll continue to pursue coverage expansion opportunities for both exome and genome. This is our market development strategy in action. By serving the market ahead of coverage, we demonstrate demand and medical necessity. That unpaid volume is prime for us to accrete revenue in new markets as coverage expands. Now our greatest focus is translating coverage into payment. We'll spend the majority of our time today discussing how we'll get paid far more for our tests and in doing so, see in the fullness of time, revenue growth rates converge with or exceed volume growth in the future. We're committed to serving families during their moments of greatest need. They're at the center of everything we do. To reach them, we're making strong progress against both our foundational and expansion markets, and demand continues to be a source of strength and optionality. We've proven we can maintain our leadership position through this genome transition and our competitive positioning is directly translatable. Clinicians choose GeneDx and return to GeneDx because of the quality and reliability of our results, our leading turnaround times, our deep data and expertise and the customer support infrastructure we have built specifically for the complexity of rare disease. As genomic testing moves into the mainstream, our ability to transform a genome's worth of information into a single actionable answer will only increase in importance. In summary, demand is strong, and we're now leaning into a large multiyear opportunity to improve ARR, which will serve as a significant revenue tailwind. We are confident we can drive collections to the industry standard of 70%, and we're building on the strength of our team to realize this massive revenue opportunity ahead. With that, I'm happy to pass the call over to the newest addition to our executive team, Mark Gardner. I was elated to welcome Mark to the team back in June, and he has brought his experience from across the industry and passion for what we do to ensure our capabilities keep pace with the growing demand for our services. I'm excited for you to hear directly from him. Mark, please take it away. Mark Gardner: Thank you, Katherine, and good afternoon, everyone. I'm excited to be here and really grateful for the opportunity to serve patients and customers in this critical segment of the advanced diagnostics industry. I joined GeneDx because I saw a company with proven clinical leadership, a strong market position and a tremendous opportunity ahead. And 6 weeks in, that conviction has only grown. The quality of our products, our variant classification and interpretation capabilities, our Infinity database and our scale are just some of the things that set us apart as the leader in rare disease testing. I've also observed that while we have grown quickly, we need to strengthen specific elements of our operations to unlock the next phase of growth. Today, I'll walk you through what I believe to be the 2 most impactful areas for improvement: revenue cycle management and commercial operations. We bring significant value to the healthcare system, and we should be paid fairly for our services. I agree with Katherine that we are underearning today on both exome and genome testing, and this is a significant opportunity that the whole of our company has rallied around. To be specific, we are focused on 4 operational levers to improve the blended average reimbursement rate of the company. First, mix management. By managing our exome versus genome mix in the near term, we have more time to build the internal processes needed to maximize payment on whole genome volume in the long term. Mix improved during the second quarter and continued to improve throughout July. Second, expand payer coverage. Payer coverage is moving in the right direction. That's a direct result of GeneDx's evidence and advocacy, but it still lags clinical demand and includes too much red tape. Third, implement payer-specific workflows. Medical necessity criteria, documentation requirements and prior authorization processes vary across payers, and we need to build workflows to ensure that we meet every administrative requirement to collect payment. When done well, this approach improves prior authorization approval rates, reduces avoidable denials and increases the percentage of tests for which we are ultimately paid. While we're focused in the near term on improving RCM processes for genome, I would note that our exome business will also continue to see improvements in collection rate. Fourth, we have to invest in technology. We're applying artificial intelligence and other systems and processes around or across our entire revenue cycle operations to build a more intelligent and scalable function. This includes internal controls and customer experience features to collect and submit billing information that enables consistent and reliable payment. This is a longer-term capability and under development. We've already made progress on all 4 of these actions, and we expect they'll begin to influence rates in the quarters to come. I'm confident based on the data we've seen during Q2 and our ability to drive ARR improvements off this Q2 baseline. Next, on commercial. Our core market of geneticists and pediatric neurologists continue to perform well. We maintained our approximately 80% market share among geneticists while expanding our pediatric neurology market share to roughly 50%. So while geneticists may have moved from exome to genome over the past year, they did not leave GeneDx. At the same time, it could still take years to reach a geneticist. Thus, diversifying call points will enable us to unlock our total addressable market and bring the power of genomic testing to patients with a much shorter diagnostic journey. This strategy is driving our investment approach. For example, based on changes in the AAP guidelines, we invested in building out our commercial team to serve general pediatrics in early 2026. In Q2, we saw our highest growth ever in this channel, and we're seeing the early signals that typically precede larger scale adoption, including increased engagement with our field reps and medical science liaisons, new account creation and first orders from new clinicians. Across all markets, we'll continually adjust coverage models as necessary to ensure that each dollar we invest in the sales force has an appropriate return on investment in the longer term. In summary, by driving process excellence and revenue cycle management and prudently investing in call point diversification, we will drive sustainable long-term growth for the company. I'll now pass it to Kevin to walk through our financials and the leading indicators we will use to track progress over time. Kevin Feeley: Thanks, Mark, and good afternoon, everyone. Total revenues were $114.4 million, up 11% year-over-year. Exome and genome revenues were $100.3 million, up 17%, with exome and genome result volume of 30,785 tests, up 32%. Unit growth was broad-based across geneticist, pediatric neurology and the NICU, with early contributions from general pediatrics and prenatal. Total company gross margin was 70%, up sequentially from 69% in the first quarter. We returned to profitability with adjusted net income of $0.4 million, an $8.6 million improvement from the first quarter. The blended average reimbursement rate in the second quarter was $3,258 per test, roughly flat quarter-over-quarter and in line with expectations. The primary driver of the larger ARR variability against 2025 is the product mix shift into genome. There have been no meaningful changes to our contracted pricing. We view this Q2 blended ARR as the new baseline for the remainder of the year and are working against 3 key levers to improve it: product mix, payer coverage and underlying collection rates. First, on mix. In the second quarter of 2026, genome represented 32% of all insurance-based outpatient volume mix, down from close to 40% in the first quarter, demonstrating steady mix share gains back into exome and reflex each month of Q2 and continuing through July. That second quarter genome mix is up from only 15% in 2025 and is what drives the divergence between our volume and revenue growth rates year-over-year. Although genome contracted rates are lower than exome by comparison, I'll underscore that genome gross margins are healthy. Second, on payer coverage. While payer coverage is moving in the right direction, coverage varies significantly between exome and genome, and understanding that gap is important context for the forward-looking ARR outlook. On the commercial side, approximately 98% of commercial lives have some level of exome coverage, up from approximately 90% in the first quarter. Genome is earlier in that journey. Approximately 87% of commercial lives now have some level of genome coverage, up significantly from 47% last quarter, representing a structural shift in reimbursement outlook for genomes. The primary driver of that increase was Carelon. On the Medicaid side, 39 states now cover exome or genome testing, with Mississippi coming online July 1. The full impact of coverage expansion takes time to flow through our blended ARR and revenue based on collections and accrual lags. It's important to acknowledge that across both commercial and Medicaid plans, not all coverage policies are created equal. Even with written policy, genomic testing remains out of reach for too many children, as claims are denied by overly restricted eligibility criteria and administrative barriers. In the second quarter, approximately 67% of our outpatient genome volume was submitted to payers with an active positive coverage policy. Looking at the evolution here, that rate is up from 38% in the second quarter of last year and up from 46% just last quarter. The uptrend has continued in July, given the rolling advancements of policy coverage. And third, outpatient genome collection rates, which are affected by both coverage and our own operational effectiveness. Our operational underlying outpatient genome collection rate, which is the percentage of claims paid, today stands at approximately 32%, flat with the first quarter and down from 43% in the second quarter of 2025. That decline in collections from last year reflects an investment we made into developing the market by accepting volume ahead of coverage. Importantly, it reflects a tremendous opportunity for us when, in the fullness of time, we get paid more often for these volumes with greater coverage and with better RCM. As Katherine rightly pointed out, we are underearning versus our full potential. As an illustration of the opportunity, if we were to double that 32% collection rate, what are zeros in our blended ARR today become paid units, driving revenue uplift that falls directly to the bottom line. Now I focus on genome here because of the large year-over-year mix shift and its larger place in the future of the business, and also the fact that exome already operates at a gross margin above the total company average. However, outpatient exome collection rates are comparable to genome, which means there's a ton of room to improve. Most denials are addressable and we'll work to put into -- the work we'll put into RCM aims to benefit the entire portfolio. We do not expect improvements to be perfectly linear, but in terms of pacing, Q3 collection rates should remain roughly flat as our payer-specific workflows are still being built out and incrementally implemented. As a reminder, our revenue recognition reflects collection experience over a trailing period, and thus, it takes a couple of quarters to fully capture improvements in coverage and the impact of operational actions. We expect to see meaningful improvements in Q4 2026 with the most significant uplift coming in 2027, as both expanded coverage and stronger operational execution compound together. Beyond operational effectiveness, that collection rate and thus ARR could always have some underlying variability from the single payer's administrative behaviors, tightening coverage policy or contracting change. However, we serve a diversified payer base, so the impact of any single payer action is usually moderated. Moving down the income statement, beyond ARR uplift, genome gross margins have room to expand from lower COGS over time. Today, whole genome cost us nearly twice as much to produce than exome. The difference there is almost entirely higher reagent costs, which we expect will come down as utilization for genome grows and manufacturers advance their technology. We expect cost per test to stay relatively flat for the second half of 2026 with step improvements in 2027. Operating expenses were approximately $80 million, which was slightly better than expected. We completed the full $25 million of annual cost actions committed to on our last call. And we've recalibrated our investment pace while continuing to protect core investments in our proven growth channels and operational infrastructure. On to the balance sheet. Subsequent to the close of the quarter, we further fortified our financial position through a $50 million expansion of our existing debt facility and a concurrent equity investment from a valued strategic partner, Blackstone Life Sciences. This brings our pro forma liquidity to approximately $188 million as of June 30, 2026. This opportunistic capital expansion ensures that GeneDx is fully capitalized well beyond sustained positive cash flow while maintaining the flexibility to invest in high-growth strategic opportunities. Turning to guidance. We're reaffirming our full year guidance range of $475 million to $490 million in revenues. We continue to expect exome and genome volume growth of at least 30%, exome and genome revenue growth of at least 20%, gross margin of approximately 70% and to be profitable for the full year. For the third quarter, we expect revenues between $122 million and $124 million, exome and genome revenue of $110 million to $112 million on volume of approximately 33,200 tests. The blended ARR there is approximately $3,300 a test. Expect gross margins of approximately 70% and approximately $2 million in adjusted net income. With that, I'll turn it back to Katherine prior to Q&A. Katherine Stueland: Thank you, Kevin. GeneDx is positioned for long-term sustainable profitable growth. For 25 years, clinicians have relied on GeneDx to resolve their most challenging cases because our accuracy is proven. Deep clinical loyalty has enabled us to shepherd the market through major shifts before, beginning 15 years ago with the transition from single gene test and multi-gene panels to exome, and beginning now from exome to genome. Innovation accelerates, and we're leading the way. We have the strategy, the team and the operating plan to capture the significant opportunity ahead. I want to say thank you to our dedicated employees for all of their extraordinary work and to our shareholders for their continued support. Without you, our work and service of the ever-growing number of families needing answers would not be possible. With that, operator, please, let's open up the line for questions. Operator: [Operator Instructions] And our first question comes from Dan Brennan of TD Cowen. Daniel Brennan: You gave a lot of -- obviously, a ton of detail on the focus on getting better payment rates. I was hoping maybe you could just -- yes, there's a lot of numbers in there. I was hoping maybe you can just elaborate a little bit on the pacing in 3Q, 4Q. Kevin, I heard you say that it seems like 4Q could see a meaningful uplift just given the timing it takes. Maybe can you just review -- I got the numbers in 3Q. So maybe, a, like, why is the pace a little slower? And then b, what's the kind of upside case you're exiting 4Q at? And what could that mean for next year? Kevin Feeley: Yes. Thanks, Dan. Look, there's a natural lag between operational improvements and those improvements blending through our accrual rates. We'd expect the collection rate to remain roughly flat with Q3 with meaningful improvements beginning in Q4. And in 2027, the upside is real. It just takes time to flow through. We're placing a premium on getting paid and guiding with that discipline. Daniel Brennan: Okay. And maybe just on the mix, you have the reflex, you're getting the whole genomes down. I know on the last call, you talked about, obviously, you want to provide the best service to customers, you don't want to dissuade them from getting what they want. But maybe just speak to a little bit of how you're managing that mix. You've got it down, kind of what you're baking into the back half of the year. And from a competitive standpoint, if the competitors are pushing whole genomes, does that put you at a disadvantage at all that you're trying to favor the exome against that? Katherine Stueland: Certainly. Well, first, we continue to see, as I said in my prepared remarks, the future is indeed genome. We expect that all inherited disease will be diagnosed off of a genome. But in the meantime, we have several services that we're able to provide to give our clinicians regardless of what channel they're in, the right technology to get the diagnostic yield that they need to get the right answer to their patient. Remember, 80% of the time, patients with genetic disease can be diagnosed with an exome. And so we see really good uptake with that product. And if they need more information, then we can quickly reflex them beyond that exome to a genome. And because we've been able to drive down our turnaround times, we can do all of that faster than other labs can run a genome. So we've been successful in really managing this transition. We saw it in Q2, and we continue to drive, I would say, a really meticulous approach to the sales force to ensure that we are giving customers what they want, utilizing the various tools that we have. Daniel Brennan: If I'm still live, maybe this last one to sneak in. We had modeled realized price to kind of flattish after '26 because you were just getting to this level. And I think the Street and us probably had similar, maybe low single-digit pricing. I know, Kevin, in the past, you've talked about how you'd be willing to go in contract with payers to secure higher payment rates even if it meant like you don't -- you give away some of the upside. This one sounds different now with Mark. It sounds like you feel there's like all this upside on getting realized price. Any way for us to think about where this -- what this could mean beyond '26 in terms of what the capture could look like? Kevin Feeley: Yes. Look, in terms of '27, I think to keep flat in '27 and beyond misses a core central opportunity for us. Look, today, at 32% genome collection rates reflect where we are in the coverage maturity, not where we think we're going. We've brought in that volume to deliberately build the clinical evidence to expand payer policies that's worked as represented by that, frankly, massive jump in commercial coverage from 47% to 87% in just 1 quarter. But look, both collection rates for exome and genome are well below where we think a mature diagnostic test should typically live at or around 70%. That would be doubling today's collection rate. And we think that represents a meaningful structural opportunity for us as we progress. As we said, it won't be linear. But in 2027 and beyond, we expect this work to pay off handsomely in that regard. Operator: And our next question comes from Mark Massaro of BTIG. Mark Massaro: I was hoping that maybe you could double-click on the Carelon opportunity, recognizing that, that is a very, very significant lift that you talked about. But I was just wondering if you could maybe frame what needs to happen next? Is this just getting in front of commercial payers? And I think I heard you say this is a big lift in 2027. But can you just walk me through why it wouldn't be a lift in Q3 and Q4 and any potential for that? Katherine Stueland: Yes. So Mark, thank you for that. It is indeed in a single quarter, just a massive opening up of possible patients and revenue for us moving forward. So it's a really positive development. As Kevin had shared in his comments, coverage leads and payment lags. So there's just a massive opportunity ahead to raise our collection rates and revenue based on Carelon and extended coverage to about 56 million lives, but payers don't always operationalize everything immediately. So it takes some time. Kevin, anything you want to add? Kevin Feeley: Yes. I would just add that certainly, we're not counting on anything in that regard for the third quarter here, but some contribution beginning in the fourth quarter of 2026, but then more fully in 2027 to account for that natural lag. Mark Massaro: Okay. Perfect. And then if you don't mind, I want to ask the same question on Medi-Cal. Obviously, these are different payers, but can you just walk us through the same thought process as to when you expect a benefit in -- if there could be anything in Q3 versus Q4? Kevin Feeley: Yes, monitoring it closely. The California pricing for their genome within Medi-Cal fee-for-service, they published a rate a couple of months ago, and that became effective just July 1. And so it's pretty early, but monitoring adjudication experience closely to see that they're paying often and at that price. I think some of the larger work to do is to make sure that MCOs in the state of California are following Medi-Cal policies and guidelines, which they're required to do under regulatory frameworks. But we want to see some data further accumulate that the MCOs, which is the largest proportion of volume, are going to follow policy. We have counted on some uplift based on recent trends that we can see, but continue to view it as a massive long-term win that Medi-Cal has put out policy, but still monitoring it closely and expect greater uplift in 2027. Mark Massaro: Fantastic. Last one for me. It was encouraging to hear the progress with rising engagement with the general pediatrician market with orders coming in. Is there any way to quantify what those orders are? When do you think it might be material enough to quantify them? And then are there any lessons learned? I know it's early, but perhaps can you talk about ways that maybe you've optimized the early launch and how you can attack that in a bigger way in 2027? Katherine Stueland: Certainly. Well, as a reminder, it's been just over a year since the guidelines published. We're still in the early stages of commercial activity post guidelines. We're pleased that we are investing in this channel. We're seeing clinicians in the gen peds channel ordering exome testing predominantly, and we're seeing some good interest there. It's a different call point, though. I'll let Mark comment a little bit more on this. Mark Gardner: Obviously, this is one where depending on the specifics of each of the practices, some of those practices are more attractive than the others. There's obviously a greater emphasis amongst developmental and behavioral specialists to order more exomes than you might see amongst the rest of the general peds call point. So we're definitely seeing that there's -- there are differences even within the overall general pediatrics channel. The other thing I would note is that we think that this is an area where as more and more general practitioners are becoming corporatized or part of larger groups that, that's actually an opportunity to aggregate demand and to set policy for the larger corporate entity. So we think that by being really focused on higher productivity physicians and by concentrating on how we win corporate accounts, we think that, that's a way to expand the market. But so far, the evidence is that it has a very high return on investment. Operator: And our next question comes from William Bonello of Craig-Hallum. William Bonello: I'll ask my 2 questions. One, I'm trying to understand -- so it sounded like you said a pretty significant improvement in mix, actually, in Q2 versus Q1, but we actually saw the ASP or ARR go down, not a ton, but slightly. And with the improvement in mix, we might have thought it would move the other direction. So is something else getting worse? Are you seeing an uptick in the rate of denials? Are you seeing pricing pressure? I mean why wouldn't it flow through to higher ARR rather than lower ARR? Kevin Feeley: Yes, it's a great question, Bill. Look, the mix improvement is real moving from 40% to 32% with the differential there flowing back into the reflex product, an important bridge that allows us more time to mature collection processes for genome. But the reality is exome collection rates roughly flat underlying from quarter-to-quarter. There was some slight variation in payer mix that led to about that $50 variation that's within 1% of Q1. I think the way we would read that is the blended ARR has stabilized. It's flat and now represents a new base for us to work off of. The building blocks that we described in terms of operational improvements is being deployed now that will take some time. But we're not happy with the 32% collection rate on genome and exome collection rates are comparable to that. We have work to do. And frankly, we think that represents the largest opportunity the company has to meaningfully increase our earnings power over time. William Bonello: If you'll indulge me and let me sneak in a third, I don't have to, but just, I want to follow up on that. When you're saying exome collection is roughly the same. I mean I thought in the past, we had gotten all the way up to like 55% collection rates or something on exome. And so if we're down at sort of 32-ish or something, maybe I'm just not understanding what you're saying. Kevin Feeley: No, you're tracking well, Bill. The nuance there is those collection rates we cited are for the outpatient insurance-based volume only. And so what I mean by that is excluding the NICU, the NICU is collected at 100% and what buoys that rate back up towards the 50% range in total. What we'll be tracking and calling out specifically so you can all track along with us is the improvements in the underlying outpatient insurance-based rate, which is where we see the largest opportunity at. William Bonello: Okay. That makes a ton of sense. If I can ask what was going to be my second question. I'm just trying to wrap my head around the guidance. And I may be remembering commentary a little bit wrong from last quarter. But I thought we were kind of expecting some steady improvement in ARR over the course of the year. And I appreciate all the reasons not to necessarily expect that, and that seems really prudent. But you held your volume growth rate flat and your revenue guidance flat or your volume guidance and your revenue guidance flat. I'm just sort of wondering how we reconcile maybe ARR not improving at the same rate, but revenue and volume being still where you expected. Kevin Feeley: Yes. I mean, look, the guide reflects July trends that we had the benefit of seeing, which showed mix continuing to move in the right direction and core channel demand really healthy at this point, and reflex volume for the first time on a single-month basis since we've launched that product, reflex volumes exceeding genomes in the month of July. And so we took stock of the totality of what we see as really positive trends that played out throughout the second quarter and into July, and incorporated all that into the new guide that we just provided here. Operator: And our next question comes from David Westenberg of Piper Sandler. David Westenberg: Okay. I'm going to truly ask just one and one follow-up here. So can you just -- I'm going to get into the H2 guidance. How much visibility do you have on collection rates in Q4? Secondly, on kind of like the sales force ramp and their productivity, how much productivity are you seeing right now? And how much of productivity gains are in the Q4 guidance I'm thinking about specifically? I'll ask one follow-up. Kevin Feeley: Yes. Look, in terms of visibility, it was a commitment of ours to improve that following the first quarter call. And we think we've done that. I've had the benefit of adding a number of folks to my financial leadership team. We brought in some exciting revenue cycle leaders with experience doing this at very large scale at companies you all know very well in addition to Mark. So beyond Mark joining, a whole host of new talent, really, with the goal of upping experience levels operating at much larger scale than we have. And we've accumulated data trends, like I said, through July and those data points throughout the second quarter and into July inform what we see as the outlook that we provided. David Westenberg: And on the sales force productivity. Mark Gardner: With regard to the sales force, I would just say that what we've seen is that while our traditional call points continue to deliver at a very high rate per rep, if you actually look at the incremental number of new physicians, the incremental number of new orders, we think that these emerging markets actually represent a significant amount of our future growth. They by now actually represent a meaningful and impactful amount of our overall volume growth for the quarter. And frankly, a lot of those folks we just hired in the first part of this year. So traditionally, they would have a learning curve and they would get more productive as the year goes on. So we see that accelerating in the back half of the year. David Westenberg: Kevin, just going to stick with the question on you. And congrats on the return to profitability in Q2. The operating cash flow was one of the high points we've seen in quite a while. And I think investors are also kind of seeing the Blackstone facility and that happening in the quarter. So we just want to think about how you're thinking about cash flow expenses from here out for the rest of the quarter and what GeneDx needs to be -- do to become a sustainably cash flow positive company over the next couple of years? Katherine Stueland: Sure. And Dave, thanks for the question. I'll kick it off and then hand it over to Kevin. Just to say, as we committed on the last call, we have succeeded in that $25 million OpEx cut. And we've organized the company around the 3 biggest levers, which is: improving unit economics, driving utilization of exome and genome, and delivering best-in-class products. And we have organized everyone around all of our capital deployment around those 3 efforts. Anything that doesn't fall into that is opportunity to continue to make sure that we've got the right capital management strategy. So we feel like we've got the right focus in place. Kevin Feeley: Yes. And as you pointed out, Dave, Q2 certainly will be the high point of the year. Q2 reflecting the lag from the first quarter operating loss, which in large part was driven by the heavy commercial investment into expanding the sales team as well as some other investments. The second quarter was a heavier CapEx cycle than what we might expect moving forward as we've significantly increased the sequencing fleet to keep pace with the increase in genome volume that we've seen over the past year. We think that has now reached a point of leveling out. And Q2 did have some certain onetime payments as well as the lag between the fact that earning $1 today takes some more time to collect it in cash. Three things kind of improve that picture moving forward. First, as I mentioned, we've completed the execution at a net $25 million in cost from our plan. That work is behind us and in current run rates. Second, the RCM improvements we've talked about will begin to increase our earnings power more so in the fourth quarter as collection rates rise. And then third, as volumes continue to grow, we do get some compounding COGS leverage that improves operating margins over time. So would expect about $10 million approximately in the third quarter, but the fourth quarter returning to cash flow generation, and that Blackstone financing gives us ample runway to get there without any sort of compromise. And by 2027, we expect all of those factors to converge in strong sustained cash generation. Operator: And our next question comes from Kyle Mikson of Canaccord Genuity. Kyle Mikson: It's good to see a clean quarter. I wanted to ask about the reflex testing. So if that volume mix continues to expand at a pretty rapid clip like you saw recently, and the reflex mix is much higher in 4Q than you would have expected, how does that impact the guidance, especially ARR? Kevin Feeley: What's in the guide is our expectation of how those mix would evolve over time. And look, think about reflex together with exome. It's designed to be reimbursed at the exome rate. So there could be some interplaying between exome and reflex. But ultimately, see that genome mix rate at or slightly lower than where it is today in the back half of the year, and we've incorporated that into the guide. Kyle Mikson: All right. Great. And then if the outpatient genome mix decreased by so much here, what other end markets kind of benefited the most? Was it the emerging, like, the NICU and the gen peds? Or the established kind of end markets, volume -- which area did volume increase the most? Kevin Feeley: Yes. Look, the reflex product, like I said, is in large part meant to be a bridge offering. Where we're seeing the greatest interest is in the geneticist forum. As Mark said, the secular shift to genome and its interest has not slowed down. But what we have seen is many of those genome orders moving to reflex, taking advantage of the exome to reflex structure that we've put up. The product is operating better than initial expectations when we first launched it in February. Katherine Stueland: And I would just add, in the gen ped sector, we're seeing good utilization of our exome products. So it's predominantly exome. And so there's a healthy mix. Again, as we're in each channel, we learn more about what product works, what services work and what the sales force needs to do to make sure we've got the right mix. Operator: And our next question comes from Tycho Peterson of Jefferies. Tycho Peterson: Welcome, Mark. Curious how you'd characterize the competitive landscape now. I mean I think you called out at some of the conferences, competitive forces as a factor of that whole genome shift. Any comments you'd make on, kind of, just the shifting competitive landscape? Katherine Stueland: Sure. I'll kick it off and then would love Mark to share his fresh perspective on it. One, I would say we're still the dominant player. We still have 80% market share amongst geneticists. We're now at 50% for pediatric specialists. So we're continuing to be the market leader, and we're evolving and developing new markets in gen peds, mainly because of the quality and accuracy of our product, the customer experience, the underlying data that ensures that people have confidence in our answers. But yes, we keep our eyes on competition. We've made it clear this is a really attractive and it's a very large market that will require more than GeneDx. Having more voices out there really opens up markets faster. It helps shape payer policy faster, helps shape policy in general faster. So we're going to continue to be the leader, and we also welcome competition for those reasons. Mark? Mark Gardner: Tycho, it's great to hear your voice again. And I would just say that what really characterizes a lot of our competition right now is who's able to both measure variation and match variation the best. And there are a lot of different ways to measure genomic variation. But at the end of the day, the Infinity database is a unique asset for matching that variation to drive discovery. And so what we find is that our customers are loyal to that because it produces a higher diagnostic yield and it gets better answers for the patients. So we feel like we can maintain our leadership through continuing to invest in that data asset and continue to drive discovery in the market. Tycho Peterson: Okay. That's helpful. And then the 1-minute genome, where are you in rolling that out? And how critical is that to the ramp in the back half of the year? Katherine Stueland: Certainly. So we've made some really good progress with 1-minute ordering, which in the past, we've talked about as an unlock predominantly for general pediatricians. It was designed by them for them. We think it has the potential to unlock more volume across all the channels. So it will be later this summer with, I would say, a rolling set of features. We're going to continue to put out kind of an MVP and continue to iterate on it, but all is on track there. Mark Gardner: Kevin, I would just add that, obviously, that one of the things about these emerging markets is that the customer service expectations are different. And so we're obviously learning from that, and we're adjusting our approach commensurate with the maturity of those markets. And so I feel really proud of the work of the team on that. And I think we're really going to be able to accelerate growth with people who are frankly not that used to ordering exome and genome testing. Operator: And our next question comes from Subbu Nambi of Guggenheim. Subhalaxmi Nambi: Kevin, last quarter, you were really helpful in telling us the exome genome mix. And it would be really helpful if you could tell us what your assumptions are for exome genome mix in 3Q and then in 4Q? And where do you see yourself exiting this year? This is all acknowledging that payer coverage is improving at a rapid rate for genome. Kevin Feeley: Yes. In terms of mix, we would expect that genome mix that we cited to come down some, hovering at around approximately 30%, maybe slightly lower in the second half of the year. And recent data order flows over the past several weeks helped frame that expectation. Subhalaxmi Nambi: And then I want to probe a bit on the operational pillars and focus in the prepared remarks. Mark, can you expand a bit on what's different about this approach compared to what was being done before? Just trying to understand how this new approach will materially change things in the near term. Mark Gardner: I would say that with regard to, like, developing payer-specific processes, that's something where historically, we've frankly not invested enough in the systems and process muscle to really execute against that. The team had already brought on a number of key personnel to help lead that. So I'm just sort of shepherding that further along. But I think with some of the people that we brought in from the industry who really have sort of been there and done that before, you really have a playbook that's relatively straightforward. It just comes down to complying with exactly what the payers need you to comply with in order to get paid. And it's a very attention and detail-oriented process, but it's something where I think that we're seeing dramatic improvement in that. Subhalaxmi Nambi: Team, you hired a bunch of sales rep. How is the productivity going on with the new reps? Are we seeing returns from that investment already? Should we expect that group to still be ramping to full productivity throughout the end of the year? Mark Gardner: Well, I would say that we already see what we would say is a positive return on investment so far. And absolutely, we think that those teams will continue to accelerate in their productivity. And things like 1-minute ordering actually just complement that. It's not just about adding reps. It's also about adding processes and market-specific customer service elements to really drive adoption. So we feel like that should continue to accelerate with time. Operator: And our next question comes from Keith Hinton of Freedom Capital Markets. Keith Hinton: I have one on volumes and then a follow-up on gross margin. So for volumes in the quarter and the back half of the year, can you just talk a little bit about the contributions from the foundational markets versus how much of the growth came from the various expansion markets? So sort of any granularity you can give there for the quarter and kind of what's baked into the guide? And then I'll follow up on gross margin. Kevin Feeley: Yes. Look, we've seen broad-based contribution. The majority of growth in terms of units, of course, coming from geneticist, ped neuro and the NICU maybe in that ranked order, just given the much larger base. If you were to double-click into those newer markets of general pediatricians and prenatal, lower unit contribution, but significant year-over-year growth rates or even quarter-over-quarter growth rates just off of a much smaller base. And we would expect through the second half of the year to see contribution from all those channels. I think signals through July continues to show we're in the right markets, and they're growing in the direction that we'd expect them to. I think, frankly, if you look at contribution, we still have significant headroom to penetrate and grow in those core foundational markets of geneticist, ped neuro and the NICU alike, notwithstanding early contributions we're seeing from the new markets. Keith Hinton: Great. That's helpful. And then on gross margin, I believe based on the numbers I'm looking at, that you guys were able to improve gross margin almost 200 bps quarter-over-quarter, even though the ExGen ASP was slightly down. So can you just talk a little bit about sort of what drove that quarter-over-quarter efficiency gains and how we should think about the sustainability going forward as hopefully ASP starts to come up? Kevin Feeley: Yes. Maybe I'll start and then see if Mark has some additional color to layer in. Thanks for pointing that out. I think the team here continues to focus really on 2 fronts: how do we continue to improve wet lab efficiency, certainly see reductions in input costs as utilization for genome grows; but also, we are still in the early innings of deploying advanced technology across the dry side stack. Having made significant efficiency gains, there still remains a large opportunity to further expand gross margins. We saw some of that this past quarter that's helping us get more efficient. We have reached a point of pretty impressive economies of scale. But I think one area we're most excited is to get Mark's fresh perspective on where we can continue to see step change and realize even greater efficiencies over time. Mark Gardner: I think this is one of the more exciting opportunities that we actually have as a company is leveraging the power of machine learning and AI and other tools like that, coupled with our data, coupled with the talented, brilliant scientists that we have on the team to really drive productivity on that. And I would say that we had very significant improvements in dry lab productivity in Q2, and we're obviously trying to continue to drive that for several years to come. By now, in a lot of ways, the amount of productivity that comes from the dry lab, in some cases, actually is larger than that than you would see from the wet lab. So exciting stuff. Operator: Thank you. This concludes our question-and-answer session. I'd like to turn it back to Katherine Stueland for closing remarks. Katherine Stueland: Excellent. Well, we appreciate everyone's time tonight. We look forward to talking to you soon over the coming days, and have a good evening. Thank you. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Before you buy stock in GeneDx, 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 GeneDx 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 $399,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!* 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 10, 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. GeneDx (WGS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Total Revenue: $114.4 million, up 11% year-over-year. Exome and Genome Revenue: $100.3 million, up 17% year-over-year. Exome and Genome Test Volume: 30,785 tests, up 32% year-over-year. Gross Margin: 70%, up sequentially from 69% in the first quarter. Adjusted Net Income: $0.4 million, an $8.6 million improvement from the first quarter. Blended Average Reimbursement Rate (ARR): $3,258 per test, roughly flat quarter-over-quarter. Genome Mix: Represented 32% of all insurance-based outpatient volume, down from close to 40% in the first quarter. Commercial Exome Coverage: Approximately 98% of commercial lives have some level of coverage, up from approximately 90% in the first quarter. Commercial Genome Coverage: Approximately 87% of commercial lives now have some level of coverage, up significantly from 47% last quarter. Outpatient Genome Collection Rate: Approximately 32%, flat with the first quarter and down from 43% in the second quarter of 2025. Operating Expenses: Approximately $80 million, slightly better than expected. Liquidity: Pro forma liquidity of approximately $188 million as of June 30, 2026. Full Year 2026 Revenue Guidance: Reaffirmed at $475 million to $490 million. Third Quarter 2026 Revenue Guidance: Expected between $122 million and $124 million. Third Quarter 2026 Exome and Genome Revenue Guidance: Expected between $110 million and $112 million. Third Quarter 2026 Volume Guidance: Approximately 33,200 tests. Third Quarter 2026 Blended ARR Guidance: Approximately $3,300 per test. Third Quarter 2026 Gross Margin Guidance: Approximately 70%. Third Quarter 2026 Adjusted Net Income Guidance: Approximately $2 million. Warning! GuruFocus has detected 3 Warning Signs with WGS. Is WGS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 03, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GeneDx Holdings Corp (NASDAQ:WGS) delivered a record quarter with over 30,000 exome and genome tests, representing 32% year-over-year growth, and returned to profitability one quarter earlier than expected. The company saw a significant expansion in commercial genome coverage, with Carillon's new policy increasing coverage from 47% to 87% of commercial lives in a single quarter. Management is focused on a clear strategy to improve the average reimbursement rate (ARR), targeting the industry standard of 70% collection rate, which represents a substantial revenue opportunity from the current 32% baseline. The company is successfully managing product mix, with genome mix decreasing from 40% in Q1 to 32% in Q2, and reflex volume exceeding exome volume in July, which helps optimize near-term unit economics. GeneDx Holdings Corp (NASDAQ:WGS) is expanding into new markets, with the general pediatrics channel showing its highest growth ever in Q2, driven by new investments and early adoption signals. The company fortified its balance sheet with a $50 million debt facility expansion and an equity investment from Blackstone Life Sciences, bringing pro forma liquidity to approximately $188 million. Gross margins improved to 70% in Q2, up from 69% in Q1, driven by wet lab efficiency gains and early progress in deploying advanced technology across the dry lab stack. The blended average reimbursement rate (ARR) remained flat at $3,258 per test in Q2, and the underlying outpatient genome collection rate is only 32%, down from 43% in the same period last year. The company's revenue growth (11% total, 17% exome/genome) continues to lag behind volume growth (32%) due to the product mix shift toward lower-priced genome tests. Despite coverage expansion, many claims are still denied due to overly restricted eligibility criteria and administrative barriers, with only 67% of outpatient genome volume submitted to payers with an active positive coverage policy. Management expects collection rates to remain roughly flat in Q3, with meaningful improvements not expected until Q4 2026 and the most significant uplift in 2027, indicating a slow path to realizing the ARR opportunity. Operating cash flow in Q2 was a high point for the year, with Q3 expected to see approximately $10 million in cash outflow before returning to generation in Q4, reflecting ongoing investment and payment lags. Whole genome production costs are nearly twice that of exome, primarily due to higher reagent costs, which are not expected to decrease until 2027, limiting near-term gross margin expansion. The company's strategy of accepting volume ahead of coverage has led to a decline in collection rates, reflecting an investment in market development that has yet to translate into revenue. Q: Can you elaborate on the pacing of collection rate improvements in Q3 and Q4, and what the upside case could mean for 2027?A: Kevin Feeley (CFO) explained that there is a natural lag between operational improvements and their impact on accrual rates. Collection rates are expected to remain roughly flat in Q3, with meaningful improvements beginning in Q4. The upside in 2027 is significant, as the company is currently under-earning on its potential, with outpatient genome collection rates at approximately 32%, well below the industry standard of 70%. Q: How is the company managing the product mix between exome and genome, and does favoring exome put GeneDx at a competitive disadvantage?A: Katherine Stueland (CEO) stated that while the future is genome, 80% of patients with genetic disease can be diagnosed with exome. The company offers reflex testing from exome to genome, which provides a faster turnaround time than competitors running genome directly. This meticulous approach to sales force management has successfully moderated the mix, with genome representing 32% of outpatient volume in Q2, down from 40% in Q1. Q: Can you double-click on the Carillon coverage expansion and why the benefit won't be seen until 2027?A: Katherine Stueland (CEO) noted that Carillon's new policy expanded commercial genome coverage from 47% to 87% in one quarter, covering approximately 56 million lives. However, Kevin Feeley (CFO) added that payers don't operationalize coverage immediately, so the company is not counting on contributions in Q3, with some benefit beginning in Q4 2026 and more fully in 2027. Q: What is the status of the Medicaid opportunity, particularly in California, and when will it impact results?A: Kevin Feeley (CFO) stated that California published a genome pricing rate for Medicaid fee-for-service effective July 1. The company is monitoring adjudication experience closely, particularly whether MCOs follow the medical policies. While some uplift is expected based on recent trends, the greater impact is anticipated in 2027. Q: Can you quantify the progress in the general pediatrician market and how GeneDx is optimizing this launch?A: Katherine Stueland (CEO) noted it's been just over a year since guidelines were published, and the company is seeing strong interest with exome testing predominantly ordered. Mark Gardner (President) added that there's a greater emphasis among developmental and behavioral specialists, and the company is focusing on higher productivity physicians and corporate accounts to expand the market, with early signals showing a high return on investment. Q: Why did the blended ARR decline slightly in Q2 despite the improvement in product mix?A: Kevin Feeley (CFO) explained that while mix improved from 40% to 32% genome, exome collection rates were roughly flat with slight variation in payer mix, leading to about a $50 variation within 1% of Q1. The blended ARR has stabilized and represents a new baseline, with the 32% collection rate on genome representing the largest opportunity to increase earnings power. Q: Can you clarify the collection rate commentary, as exome collection rates were previously higher?A: Kevin Feeley (CFO) clarified that the 32% collection rate refers to outpatient insurance-based volume only, excluding the NICU, which collected at a higher rate and brought the total to around 50%. The company will track and report the underlying outpatient insurance-based rate specifically, as this is where the largest opportunity lies. Q: How is the company thinking about cash flow and expenses for the rest of the year, and what's needed to become sustainably cash flow positive?A: Kevin Feeley (CFO) stated that Q2 was the high point of the year for operating cash flow, reflecting the lag from Q1's operating loss and heavier CapEx cycle. The company expects approximately $10 million in Q3, returning to cash flow generation in Q4. By 2027, factors including RCM improvements, volume growth, and COGS leverage should converge for strong sustained cash generation. Q: How does the reflex testing volume impact guidance, and what are the mix assumptions for the back half of the year?A: Kevin Feeley (CFO) stated that reflex is designed to be reimbursed at the exome rate, and the company expects genome mix to be at or slightly lower than current levels in the back half of the year. The reflex product is operating better than initial expectations since its launch in February, with many genome orders moving to reflex. Q: How would you characterize the competitive landscape, and what differentiates GeneDx?A: Katherine Stueland (CEO) noted GeneDx maintains approximately 80% market share among geneticists and 50% among pediatric specialists. Mark Gardner (President) highlighted that the Infinity database is a unique asset for matching variation to drive discovery, producing higher diagnostic yield and better answers for patients, which maintains customer loyalty. Q: What are the assumptions for exome/genome mix in Q3 and Q4, and where does the company expect to exit the year?A: Kevin Feeley (CFO) expects genome mix to come down to approximately 30% or slightly lower in the second half of the year, based on recent order flow data over the past several weeks. Q: What's different about the new operational approach to revenue cycle management compared to what was done before?A: Mark Gardner (President) stated that the company historically didn't invest enough in systems and process muscle for payer-specific workflows. The team has brought in key personnel with industry experience who have a proven playbook, which comes down to complying with exactly what payers need to get paid. This attention to detail is already showing tremendous improvement. Q: Can you provide granularity on volume contributions from foundational versus expansion markets, and what's baked into guidance?A: Kevin Feeley (CFO) stated growth was broad-based, with the majority of unit growth coming from genetics, pediatric neurology, and the NICU given their larger bases. Newer markets like general pediatrics and prenatal have lower unit contributions but significant year-over-year growth rates. The company still has significant headroom to For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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 volume of over 30,000 exome and genome tests, representing 32% year-over-year growth, driven by broad-based demand across geneticists and pediatric neurologists. Returned to profitability one quarter earlier than anticipated by executing $25 million in annual cost actions and optimizing operational efficiencies. Managed a strategic product mix shift, moderating genome volume from 40% to 32% of insurance-based mix to allow internal billing processes to catch up with clinical demand. Maintained a dominant 80% market share among geneticists and expanded pediatric neurology share to 50%, demonstrating strong clinician loyalty despite competitive pressures. Attributed the divergence between volume growth (32%) and revenue growth (17%) primarily to the lower reimbursement rates currently captured for whole genome testing compared to exome. Leveraged the 'Infinity' database and variant interpretation capabilities as a primary competitive moat, driving higher diagnostic yields that sustain clinician retention. Reaffirmed full-year 2026 revenue guidance of $475 million to $490 million, assuming sustained 30% volume growth and stabilized average reimbursement rates. Anticipates a significant revenue tailwind in 2027 as expanded payer coverage (e.g., Carelon's jump from 47% to 87% genome coverage) translates into actual payments following typical administrative lags. Targeting a long-term collection rate of 70% for outpatient testing, a substantial increase from the current 32% baseline for genome and exome insurance claims. Expects genome production costs to remain flat through late 2026, with step-function improvements in 2027 driven by reagent price reductions and increased sequencing utilization. Projecting Q4 2026 to mark a return to sustained cash flow generation, supported by a $50 million debt expansion and strategic equity investment from Blackstone Life Sciences. Identified 'underearning' as the company's primary challenge, noting that current collection rates reflect a deliberate strategy of accepting volume ahead of formal payer coverage. Flagged administrative barriers and restrictive eligibility criteria as ongoing headwinds that prevent written payer policies from immediately converting to cash. Noted that whole genome testing currently costs nearly twice as much to produce as exome testing, primarily due to higher reagent costs. Highlighted the expansion of the commercial team into general pediatrics as a key diversification strategy to shorten the patient diagnostic journey. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects collection rates to remain flat in Q3 as new workflows are implemented, with meaningful uplift starting in Q4 and the most significant impact in 2027. The lag is attributed to the time required for operational improvements to blend into trailing accrual rates used for revenue recognition. GeneDx is utilizing 'reflex' testing (exome first, then genome if needed) to provide high diagnostic yield while managing the reimbursement profile. Management noted that 80% of genetic diseases can be diagnosed via exome, allowing them to bridge the transition to genome without losing market share to competitors pushing genome-only models. The cited 32% collection rate refers specifically to outpatient insurance-based volume; total company rates are buoyed by the NICU segment, which collects at 100%. Management views the low outpatient rate as a 'massive structural opportunity' for revenue growth that does not require additional volume. Carelon expanded commercial genome coverage to 87% of lives, but management is not counting on revenue contribution until Q4 due to payer operationalization lags. For Medi-Cal, the company is monitoring whether Managed Care Organizations (MCOs) follow the new state fee-for-service guidelines effective July 1.

Reported second quarter 2026 revenue of $114.4 million, including $100.3 million in exome and genome revenue Reported exome and genome volume growth of 32% year-over-year Reported adjusted gross margin(1) of 70% and adjusted net income(1) of $0.4 million Reiterating full year 2026 revenue guidance of $475 to $490 million with exome and genome volume growth of at least 30% Hosting conference call today at 4:30 p.m. ET GAITHERSBURG, Md., August 03, 2026--(BUSINESS WIRE)--GeneDx Holdings Corp. (Nasdaq: WGS), the leader in rare disease diagnosis and improving health through the power of genomic data, today reported its financial results for the second quarter of 2026. "Our team’s unwavering focus and agility drove a strong second quarter. By delivering healthy revenue, volume, and gross margin growth, we successfully navigated our return to profitability," said Katherine Stueland, CEO of GeneDx. "We are managing the transition to genome testing, making progress on each of our key imperatives — optimizing unit economics, growing utilization, and delivering the best products at unmatched scale — while continuing to extend our industry-leading position in both exome and genome testing to reach as many patients and families as soon as possible." Second Quarter 2026 Financial Results (Unaudited)(1) Revenue Revenue grew to $114.4 million, an increase of 11% year-over-year. Exome and genome test revenue grew to $100.3 million, an increase of 17% year-over-year. Exome and genome volume Exome and genome test result volume grew to 30,785, an increase of 32% year-over-year. Gross margin Adjusted gross margin of 70% in the second quarter of 2026 is up from 69% in the first quarter of 2026 and compares to 71% in the second quarter of 2025. Operating expenses Adjusted total operating expenses were $80.3 million, representing 70% of revenue. Net income Adjusted net income was $0.4 million, up $8.6 million from the first quarter of 2026 and compared to adjusted net income of $16.4 million in the second quarter of 2025. Cash position Cash, cash equivalents, marketable securities and restricted cash was $133.5 million as of June 30, 2026. On August 3, 2026, the Company amended and restated its existing loan agreement with Blackstone, adding an additional $50.0 million term loan facility and increasing the aggregate principal amount available under the facility to $150.0 million. Concurrently, an affiliate of Blackstone agreed to purchase approximately $5.0 million of the Company’s Class A common stock at $61.00 per share in a private placement. GeneDx 2026 Guidance GeneDx has reaffirmed its full year 2026 guidance and has provided guidance for the third quarter of 2026. Management expects GeneDx to deliver: Second Quarter 2026 and Recent Business Highlights Strategic Expansion and Market Leadership Appointed Mark Gardner as President to lead GeneDx’s commercial and operations teams through the next phase of growth, with a focus on strengthening execution, scaling efficiently, and expanding the company’s leadership in genomic medicine. Launched redesigned exome and genome reports to streamline the delivery of genomic insights to non-genetics clinicians as part of a broader suite of customer experience improvements rolling out this summer. Expanded Coverage for Exome and Genome Improved access to exome sequencing in Texas with new Medicaid coverage effective May 1, 2026, building on existing genome sequencing coverage in the state. Received California Medicaid (Medi-Cal) pricing for genome sequencing effective July 1, 2026, with pricing published at 100% of the Medicare rate. Coverage for genome sequencing in California was originally announced as effective November 1, 2025. Secured outpatient genome sequencing coverage from Carelon, the nation’s largest lab benefit manager, opening access to up to 56 million covered lives. The policy is effective June 14, 2026. Expanded the total number of state Medicaid programs covering outpatient exome and/or genome sequencing to 39 following Mississippi Medicaid’s announcement of coverage for both tests effective July 1, 2026. Innovation and Clinical Leadership Contributed to 26 peer-reviewed publications, 41 conference presentations, and 50 abstracts in the first half of 2026, reflecting the depth and breadth of the company’s scientific expertise and its commitment to moving the field forward. Webcast and Conference Call Details GeneDx will host a conference call today, August 3, 2026, at 4:30 p.m. Eastern Time. Investors interested in listening to the conference call are required to register online. A live and archived webcast of the event will be available on the "Events" section of the GeneDx investor relations website at https://ir.genedx.com/. Non-GAAP Financial Measures GeneDx believes non-GAAP measures are useful in evaluating its operating performance. GeneDx uses this supplemental information to evaluate its ongoing operations and for internal planning and forecasting purposes. GeneDx believes that non-GAAP financial information, when taken collectively with its GAAP financial information, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. We define non-GAAP financial measures as GAAP measures, excluding certain items such as stock-based compensation expense, depreciation and amortization, restructuring costs, changes in the fair value of financial liabilities, non-core lease costs, and other expenses that the Company believes are not indicative of its ongoing operations. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business. Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our future performance and our market opportunity, including our expectations for full year and third quarter 2026 revenue, exome and genome revenue and test volumes, adjusted gross margin and adjusted net income. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) our ability to implement business plans, goals and forecasts, and identify and realize additional opportunities, (ii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, (iii) the size and growth of the market in which we operate, and (iv) future expansion of insurance coverage for exome and genome testing. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (the "SEC") on February 23, 2026, our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026, filed with the SEC on May 4, 2026, our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2026, filed with the SEC on August 3, 2026, and other documents filed by us from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations. About GeneDx GeneDx’s (Nasdaq: WGS) mission is to empower everyone to live their healthiest life through genomics. GeneDx combines unmatched clinical expertise, advanced technology, and the power of GeneDx Infinity™ – the world’s largest rare disease genomic dataset. This unparalleled foundation powers GeneDx’s ExomeDx™ and GenomeDx™ tests – ranked #1 by expert geneticists and granted FDA Breakthrough Device designation – enabling clinicians to deliver precise, fast, and actionable diagnoses. GeneDx Infinity also fuels discovery for biopharma, with the most powerful AI-driven genomic intelligence. A genomics pioneer over the last 25 years, diagnosing more than 4,800 genetic diseases and publishing more than 1,100 research publications, GeneDx is building the network that will drive the future of genomic precision medicine. For more information, visit genedx.com and connect with us on LinkedIn, Facebook, and Instagram. Volume & Revenue Unaudited Select Financial Information Unaudited Select Financial Information View source version on businesswire.com: https://www.businesswire.com/news/home/20260803559557/en/ Contacts Investor Relations Contact: [email protected] Media Contact: [email protected]

Interested in GeneDx Holdings Corp.? Here are five stocks we like better. GeneDx exceeded expectations in Q2, reporting $114.4 million in revenue and a record 30,785 exome and genome tests, up 32% year over year. The company returned to adjusted profitability ahead of schedule with $0.4 million in adjusted net income. Reimbursement remains the main growth opportunity: commercial coverage expanded to 87% of lives for genome testing and 98% for exome testing, but genome collection rates held at 32%. GeneDx expects operational improvements to drive more meaningful collection gains beginning in Q4 and into 2027. The company reaffirmed its full-year 2026 outlook, including $475 million to $490 million in revenue and full-year profitability, while forecasting Q3 revenue of $122 million to $124 million. An expanded debt facility and Blackstone investment lifted pro forma liquidity to approximately $188 million. From Industry Titans to Tiny Fish: 3 Key Stocks Insiders are Trading GeneDx (NASDAQ:WGS) reported second-quarter revenue of $114.4 million, above its prior guidance, as exome and genome testing volume reached a quarterly record of more than 30,000 tests. The company also returned to adjusted profitability one quarter earlier than previously expected, while maintaining its full-year 2026 outlook. Chief Executive Officer Katherine Stueland said demand for the company’s rare-disease genetic testing services “has never been higher,” but emphasized that improving reimbursement remains GeneDx’s largest opportunity. The company is focusing on optimizing unit economics, expanding utilization of exome and genome testing, and delivering products at scale while managing capital. → Lost in Space: Why Aerospace Valuations Are Plummeting Right Now Biotech Catalyst Alert: NKTR, CDTX & WGS Rallying With Big Gains “We are under-earning on our potential,” Stueland said, adding that GeneDx aims to improve collections as payer coverage expands and internal revenue-cycle processes mature. GeneDx resulted 30,785 exome and genome tests during the quarter, a 32% increase from a year earlier. Exome and genome revenue rose 17% to $100.3 million, while total revenue increased 11% year over year. → MarketBeat Week in Review – 07/27- 07/31 GeneDx: Even After Up 2,700% in 2024, Upside Is Still in Play Chief Financial Officer Kevin Feeley said the difference between volume and revenue growth reflected a larger share of genome testing, which currently has lower contracted reimbursement rates than exome testing. Genome represented 32% of insurance-based outpatient volume in the second quarter, down from nearly 40% in the first quarter but up from 15% in 2025. The company said it has seen monthly mix gains back toward exome and its reflex offering, under which a test can begin as an exome and be expanded to a genome if additional information is needed. Stueland said approximately 80% of patients with genetic disease can be diagnosed through an exome test, while reflex testing provides a pathway to genome analysis when needed. → GE HealthCare Stock Climbs on Vital Diagnostics Demand Feeley said reflex volume exceeded genome volume on a single-month basis in July for the first time since the product launched in February. GeneDx expects genome mix to hover around 30%, or slightly below that level, during the second half of 2026. GeneDx reported a blended average reimbursement rate of $3,258 per test in the second quarter, roughly flat sequentially and in line with company expectations. Feeley said the company views that level as its reimbursement baseline for the remainder of the year. The company is targeting improvements through product mix management, broader payer coverage and stronger collection processes. President Mark Gardner, who joined GeneDx in June, said the company is working on four operational levers: managing exome-versus-genome mix, expanding payer coverage, developing payer-specific workflows and investing in technology and artificial intelligence across revenue-cycle operations. Gardner said payer requirements vary by medical-necessity criteria, documentation and prior-authorization processes. GeneDx is building workflows intended to meet those administrative requirements, improve authorization rates and reduce avoidable denials. Commercial coverage for genome testing expanded substantially during the quarter. Feeley said approximately 87% of commercial lives now have some level of genome coverage, compared with 47% in the prior quarter. The increase was primarily driven by Carelon, whose policy expanded potential commercial genome coverage to 87% from 47%, according to Stueland. Commercial coverage for exome testing reached approximately 98% of commercial lives, up from about 90% in the first quarter. On the Medicaid side, 39 states cover exome or genome testing, with Mississippi beginning coverage on July 1. Despite those coverage gains, Feeley said the company’s outpatient genome collection rate remained about 32% in the second quarter, flat from the first quarter and down from 43% a year earlier. He attributed the decline from last year partly to GeneDx accepting testing volume ahead of payer coverage in order to build clinical evidence and support market development. GeneDx expects collection rates to remain roughly flat in the third quarter as payer-specific workflows are developed and implemented. The company expects meaningful improvement beginning in the fourth quarter, with the largest benefit from coverage expansion and operational changes anticipated in 2027. Total company gross margin was 70%, up from 69% in the first quarter. GeneDx posted adjusted net income of $0.4 million, improving by $8.6 million from the prior quarter. Feeley said gross-margin improvement reflected wet-lab efficiency efforts, increased scale and gains in the company’s dry-lab operations. He added that genome testing currently costs nearly twice as much to produce as exome testing, largely because of higher reagent costs, though GeneDx expects genome costs to decline as utilization grows and technology advances. The company expects cost per test to remain relatively flat in the second half of 2026, followed by step improvements in 2027. Operating expenses were approximately $80 million, slightly better than expected. GeneDx completed the full $25 million in annual cost actions it previously committed to, according to Feeley. After the quarter ended, GeneDx expanded its existing debt facility by $50 million and received a concurrent equity investment from Blackstone Life Sciences. The company said the financing increased pro forma liquidity to approximately $188 million as of June 30. GeneDx said its established channels of geneticists, pediatric neurology and neonatal intensive care units continued to drive most unit growth. Gardner said the company maintained approximately 80% market share among geneticists and expanded pediatric neurology market share to 50%. The company also cited early contributions from general pediatrics and prenatal testing. GeneDx began investing in a general pediatrics commercial team in early 2026 following changes in American Academy of Pediatrics guidelines. Gardner said the channel delivered its highest growth to date in the second quarter, with increased field-representative engagement, new account creation and first orders from new clinicians. GeneDx is also developing a “one-minute” genome ordering process, which Stueland said is expected to roll out later in the summer with an initial set of features and continued iteration. The company reaffirmed full-year guidance for revenue of $475 million to $490 million, exome and genome volume growth of at least 30%, exome and genome revenue growth of at least 20%, gross margin of approximately 70%, and full-year profitability. For the third quarter, GeneDx expects total revenue of $122 million to $124 million, including exome and genome revenue of $110 million to $112 million on approximately 33,200 tests. It forecasts blended average reimbursement of about $3,300 per test, gross margin of approximately 70% and adjusted net income of about $2 million. GeneDx is a clinical diagnostics company specializing in comprehensive genetic and genomic testing for rare and inherited disorders. The company offers a broad portfolio of assays, including targeted gene panels, whole exome sequencing, whole genome sequencing and chromosomal microarray analysis. GeneDx's laboratory services support the diagnosis of a wide range of conditions—from rare pediatric diseases and hereditary cancer syndromes to neuromuscular and metabolic disorders—by providing clinicians with detailed variant interpretation and reporting. Founded in 2000 and based in Gaithersburg, Maryland, GeneDx was established with the aim of accelerating the translation of genomic discoveries into clinical care. 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 "GeneDx Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

GeneDx Holdings Corp. (WGS) came out with quarterly earnings of $0.01 per share, beating the Zacks Consensus Estimate of a loss of $0.19 per share. This compares to earnings of $0.5 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +105.26%. A quarter ago, it was expected that this company would post a loss of $0.06 per share when it actually produced a loss of $0.28, delivering a surprise of -366.67%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. GENEDX HOLDINGS, which belongs to the Zacks Medical Services industry, posted revenues of $114.44 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.32%. This compares to year-ago revenues of $102.69 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. GENEDX HOLDINGS shares have lost about 49.9% since the beginning of the year versus the S&P 500's gain of 9.4%. While GENEDX HOLDINGS has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for GENEDX HOLDINGS was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.15 on $124.5 million in revenues for the coming quarter and -$0.69 on $472.1 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Services is currently in the top 30% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Viatris (VTRS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This generic drugmaker is expected to post quarterly earnings of $0.62 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1% lower over the last 30 days to the current level. Viatris' revenues are expected to be $3.68 billion, up 2.6% from the year-ago 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 GeneDx Holdings Corp. (WGS) : Free Stock Analysis Report Viatris Inc. (VTRS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research