GeneDx Holdings Corp. Q1 FY2025 earnings call

• Katherine Stueland noted the team delivered a strong first quarter with revenues over $87 million and third consecutive quarter of profitability. They raised full-year guidance to $360 million to $375 million. - Highlighted the broken healthcare system where children with genetic diseases wait an average of 5 years for a diagnosis; their tests are proactive solutions. - Expanded into new clinical indications in outpatient setting, laid infrastructure in NICU, and focused on helping adults. - Announced acquisition of Fabric Genomic to extend clinical excellence, integrate AI across business, and support genomic newborn screening. - Progress in pharma partnerships with tools like GeneDx Discover helping pharma companies understand disease prevalence.
• Kevin Feeley discussed revenue growth, volume trends considering weather and calendar effects, reimbursement improvements (average reimbursement rate for exome and genome up to ~$3,400), gross margin details, and Fabric acquisition economics (Fabric operates at near 70% gross margin with recurring revenue streams).

First quarter 2025 revenues were $87.1 million. Exome and genome revenues grew 62% year-over-year to $71.4 million, accounting for 40% of all tests in the quarter. Volumes from exome and genome products were up 24% year-over-year. Adjusted gross profit from continuing operations in the first quarter was $59.7 million, up 56% year-over-year, translating to an adjusted gross margin of 69% in Q1, an increase from 61% the previous year.

• Raised top line guidance to $360 million to $375 million for full year 2025, including $3 million to $5 million from the acquired Fabric business. - Reaffirmed expectation of at least 30% growth in exome and genome volume and revenues for the year. - Raised adjusted gross margin guidance to between 66% and 68%. - Reaffirmed expectation to maintain profitability each quarter and for the full year of 2025 on an adjusted net income basis.

• Weather impact on volumes, as seen with January and February volume drops due to climate change disruptions. - Reimbursement denials, with denials still at significant levels (mid-40s) and room for improvement. - Uncertainty around Medicaid policy changes and other regulatory changes that could affect business operations and reimbursement.

Q: Bill Bonello asked about the sequential volume decline in Q1 and why it's seen now when not in the past.

A: Kevin Feeley explained historic Q4 to Q1 volume drop due to patients and physicians squeezing appointments before copays/deductibles reset, and weather disruptions this year.

Q: Dan Brennan asked about visibility for NICU second half acceleration, Epic Aura feedback, pricing, and April volume.

A: Katherine Stueland said Epic Aura integration is on track; Kevin Feeley discussed reimbursement true-ups and ongoing efforts to reduce denials, and April volume playing out as expected.

Q: Mark Massaro asked about Fabric Genomics economics, ultraRapid launch, and gross margin guidance.

A: Kevin Feeley said Fabric has near 70% gross margin, ultraRapid was launched in April with mix impact to be seen, and gross margin guidance is a raise with prudent outlook.

Q: Tycho Peterson asked about new indications, ultraRapid mix, gross margin gives and takes, denial rates, and pharma progress.

A: Kevin Feeley talked about new indications contributing to growth, ultraRapid mix to be determined, gross margin guidance conservatism, and ongoing denial rate improvement; Katherine Stueland mentioned steady pharma partnerships.

Q: Matt Sykes' representative asked about whole genome vs exome testing and Medicaid risks.

A: Katherine Stueland and Kevin Feeley discussed transition to whole genome, similar gross margins, and Medicaid policy uncertainty but belief in children's healthcare importance.

Q: Brandon Couillard asked about weather impact recoupment and hereditary cancer line.

A: Kevin Feeley said weather-impacted appointments may take weeks/months to recoup and hereditary cancer contribution will be near zero in second half.