Personalis, Inc. (PSNL) Earnings

Management highlights

- Investing in commercial resources to drive volume, new and existing studies for reimbursement, and technology like variant tracker. - First quarter operating expenses increased due to key investments. - R\u0026D and SG\u0026A expenses rose. - Net loss increased from investments. - Strong cash position with $233.2 million in cash and short-term investments, no debt. - 2026 outlook unchanged, relying on paid tests from current reimbursement decisions, with upsides from faster coverage expansion, etc. - Clinical revenue from Medicare-covered tests, pharma test revenue, rapid MRD revenue growth.

Guidance

- Full year 2026 guidance unchanged. - Total company revenue range $78 - $80 million, clinical revenue $10 - $11 million, pharma tests and services revenue 55 - 56 million, MRD revenue 20 - 21 million. - Gross margin 15% - 20%, first two quarters lowest. - Net loss ~$105 million, cash usage ~$100 million. - Guidance assumes paid tests from current reimbursement decisions, upsides from faster coverage expansion, etc.

Segment performance

In the first quarter, operating expenses were $32.4 million compared to $24.9 million in the same period of the prior year. R\u0026D expense was $14.5 million vs. $12.6 million prior year. SG\u0026A expense was $17.9 million vs. $12.3 million prior year. Net loss was $30 million vs. $15.8 million prior year. Cash and short-term investments ended the first quarter at $233.2 million with no debt other than small equipment loans. Total company revenue for 2026 is expected to be in the range of $78 to $80 million, with clinical revenue of $10 to $11 million (from breast and lung cancer surveillance tests covered by Medicare), pharma tests and services revenue of 55 to 56 million, MRD revenue of 20 to 21 million. Gross margin is expected to be 15% to 20%, with the first two quarters being the lowest points. Net loss is approximately $105 million and cash usage is expected to be approximately $100 million.

Analyst Q&A

• Q: Hey, guys. Thank you for taking my question. You ungated volumes mainly for share gains and to push growth. What did you see in 1Q from like a competitive win perspective to reinforce that strategy is working?

  A: You know, we achieved 26% growth quarter over quarter, 7,800 tests. In terms of competitive dynamics, we're seeing that we're doing really, really well in the marketplace. We're winning with our ultra-sensitive capability...

• Q: Hey, guys. Thanks for taking the questions. I know some of us have been hopping various calls, so pardon me if any of these have been asked before. I wanted to get a sense for how strong the lung versus breast volumes are in the quarter. And can you also just speak to, you know, IO monitoring as well? Any color on those indications would be helpful.

  A: In terms of the breast volume, it's in the ballpark of what we've been expecting and seeing. It's roughly 20%. give or take a point or two there, either way. Lung is between, you know, 15 and 20%...

• Q: Hey, good afternoon, guys. Aaron, just a quick question on gross margin. So you mentioned the second quarter was also going to be a bit of a low point. Does that mean another 2% gross margin quarter or something significantly better than that? And then following on from that, I guess question two is, as you look to maximize the reimbursed indications, are you disproportionately incentivizing the sales team to push for those indications that are reimbursed today and maybe additional indications as we roll through the year to help boost those margins? Or how are you thinking about that?

  A: In terms of the full year guide for gross margins, we said 15 to 20%... In terms of incentivizing sales team, it's hard to discourage physicians from different cancer types as we need to get reimbursement for other types in the future...

• Q: Hi, guys. Thanks so much. This is Joseph on for Mike. One question around the ordering positions, the 1,000 positions. Just want to confirm, is that in the quarter or, you know, more like to date? And then just wondering if you could maybe segment those 1,000 positions...

  A: When we report the number of physicians or we mean in the order, We don't mean cumulative that have ever ordered from us. So in this quarter, there were more than 1,000 physicians that ordered from us...

• Q: Great, thank you. Maybe just kind of zooming out for a minute on a high level. I know there's a question asked on ASCO already, but when you zoom out and you think of the ultra-sensitive approach versus maybe first-generation approach, is there anything on ASCO to speak to that or just, you know, anything you'd say from a high level about, you know, the interest in the market, kind of where it resides today, and how you think, you know, what the message will be coming up at ASCO?

  A: You know, I think, you know, what's great is if you go to these conferences, you know, it really has changed over the last few years and the increasing recognition that the ultra-sensitivity is critical for patients...

• Q: Hey, guys. Thanks a lot. So I think you said to Mark that about 35% of your testing is in covered or in reimbursed indications. And I know you're not specifically targeting or incenting people to... focus on reimbursement versus non-reimbursed indications. But just as you think about the opportunity, you look forward over the end of the year, how do you think about that shaking out? Will you be satisfied if we're at sort of a similar mix of indications by the end of the year? Is there any strategy to try and maybe grow the reimbursed indications a little more aggressively than the other indications?

  A: I think always, you know, trying to push more aggressively into physicians who treat breast cancer or treat lung cancer is what we're trying to do strategically...