BillionToOne, Inc. Q2 FY2026 earnings call

• Core Technology & Product Development

  • The company's patented QCT quantitative counting template technology achieves single-molecule sensitivity and precision for next-generation sequencing, enabling unique products in prenatal and oncology testing.
  • Prenatal: UnityConfirm, the first non-invasive confirmation assay for high-risk pregnancies, launched May 28 and is already ordered for over 50% of eligible patients. It is opening access to previously closed health systems. On August 17, the Unity Fetal Risk Screen will expand to 130 genes (the largest in-house panel on the market), expanding the serviceable market and reinforcing market leadership.
  • Oncology: A peer-reviewed study validating North Star Response for immunotherapy monitoring was published, supporting pursuit of Medicare coverage (expected by end of 2026). North Star Response accounts for ~two-thirds of current oncology test volume. The company remains on track to launch a highly sensitive tumor-naive MRD test by end of 2026. On September 1, NorthStar Select will expand to 102 genes to cover new FDA-approved therapies, and add the NorthStar Origin tissue-of-origin add-on with best-in-class accuracy for unknown primary cancers. Liquid biopsy assays have a QC failure rate below 1%, far lower than the 15-30% rate for tissue-sequencing dependent assays.

• Commercial & Operational Expansion

  • 70 additional sales representatives were added in H1 2026, ahead of hiring plan, to support upcoming growth catalysts. The company completed Epic Aura EMR integration in record time, with the first individual health system integration completed in 2 weeks. A 62,000 square foot dedicated oncology production lab lease was signed in Union City, California, with production expected by end of 2027, designed to support 5,000 tests per day long-term.
  • Average selling value (ASV) increased 21% year-over-year to $551 per test. COGS per test was $161, with a year-over-year increase driven by mix shift toward faster-growing oncology testing; prenatal COGS was flat sequentially despite the UnityConfirm launch, and oncology COGS fell over 10% quarter-over-quarter.

• Financial Profile

  • The company reached an annualized revenue run rate of $438 million, with $549 million in cash and equivalents at quarter end. It achieved GAAP profitability at a much lower scale than public competitors, with an accumulated deficit approximately 10% of peer levels. Gross margins have held stable at ~70% excluding true-up adjustments, despite the oncology mix shift.

BillionToOne reported total Q2 2026 revenue of $109.4 million, representing 64% year-over-year growth. The Prenatal segment generated revenue of $95.8 million, up 56% year-over-year, accounting for 87.6% of total Q2 revenue. The Oncology segment generated revenue of $13.7 million, up 176% year-over-year, accounting for 12.4% of total Q2 revenue. Total test volume grew 35% year-over-year to 196,000 tests. Overall gross profit was $77.1 million, with a gross margin of 70.5% (up 5 percentage points year-over-year). GAAP operating income was $5.5 million, for a 5% operating margin, and adjusted EBITDA margin hit 15%. Net income available to common shareholders was $8.1 million (15 cents per diluted share), compared to a net loss of $0.2 million in Q2 2025. Operating cash flow was $9.1 million, capital expenditures were $4.0 million, resulting in free cash flow of $5.1 million.

• Management reiterates full year 2026 total revenue guidance of $450 million to $465 million, representing 48% to 52% year-over-year growth.
• No true-up revenue is included in the 2026 guidance beyond what has already been reported.
• The company expects to maintain profitability similar to current Q2 2026 levels through the full year, even with continued significant investments in commercial and R&D activity.
• Management expects to sustain gross margins at or above 70% long-term, even as oncology becomes a larger share of overall revenue, supported by ASP growth and ongoing oncology COGS reductions. Only unexpected extreme acceleration in oncology growth could push gross margins temporarily below 70%.

• Actual future results may differ materially from forward-looking statements, due to a range of risk factors disclosed in the company's SEC filings (Form 10-K, upcoming Form 10-Q, and current Form 8-K).
• EMR integration with individual health systems depends on each system's internal IT roadmap, with most integrations not expected to be completed for 2-4 quarters, delaying revenue impact.
• The timing and outcome of Medicare coverage for North Star Response is not guaranteed, even as the company targets a decision by end of 2026.
• $10 million in held claims are pending in-network implementation by national payers, creating uncertainty around the timing and full amount of ultimate collection, with unrecognized upside potential if all claims are paid. New product launches depend on market adoption that may not materialize as quickly or to the degree expected.

Q: Would prenatal revenue have increased sequentially if you exclude the Q2 drop in true-up revenue, and is accelerated sales hiring driven by competitive pressures? / A: Excluding true-up, prenatal revenue grew ~$4.5 million (5% sequentially) with both higher volumes and ASPs. Accelerated hiring is not a response to competition, but to prepare for four upcoming growth catalysts: ramp up of newly hired sales reps, UnityConfirm opening new health system access, Epic Aura integration impact, and the 130-gene panel launch. All these factors are expected to drive accelerated health system adoption over the next 2-4 quarters, so the company pre-hired reps to be ready to convert new volume.

Q: What is the driver of sequential oncology growth, and can we expect continued sequential volume growth through H2 2026? / A: Oncology ASPs were stable quarter-over-quarter, and true-up for oncology is minimal, so all sequential growth comes from higher test volume, which is running ahead of internal expectations. Management expects strong momentum from Q2 to Q3; while Q4 typically has fewer accessioning days that slightly impact reported volumes, the underlying growth trajectory remains ahead of plan.

Q: Have you seen any payer reimbursement friction in prenatal carrier screening, as reported by a competitor? / A: BillionToOne has not experienced any payer friction, because it proactively used the correct PLA coding (obtained effective January 2025) for its panels instead of the unbundled/stacked billing that is causing issues for other providers.

Q: What is the timeline and expected impact of Epic Aura individual health system integrations, and can most be completed by 2027? / A: The company is already fully integrated with the Epic Aura platform, but each individual health system must schedule its own unique integration into their IT roadmap, which typically takes 2-4 quarters. Once prioritized, BillionToOne can complete individual integrations in 2-4 weeks (a record speed). Each integrated health system adds 1,000-3,000 incremental tests per quarter, with adoption expected to accelerate over 2027 as more integrations go live.

Q: How should we expect gross margins to trend as oncology grows? / A: Management targets maintaining stable ~70% gross margins regardless of oncology mix shift, as has been achieved over the past four quarters. Higher ASPs and COGS reductions offset the near-term dilution from new, lower-margin oncology products; all products are expected to hit 70-80% gross margins long-term at scale.