NeoGenomics (NEO) Q3 2024 earnings summary

Executive summary

• Revenue grew 10–10.4% year-over-year to $168M in Q3 2024, with Clinical Services up 14% and Advanced Diagnostics down 9.7–10%, driven by record clinical test volumes and higher average revenue per test.

• Adjusted EBITDA rose 305% to $13–$13.4M, marking five consecutive quarters of positive adjusted EBITDA and reflecting improved operating leverage and margin expansion.

• Adjusted gross margin increased to 47.8%, up 355 basis points year-over-year, supported by automation, process improvements, and LIMS deployment.

• Net loss narrowed to $17.7–$18M from $18.5M in Q3 2023.

• Launched new products, including Neo AML Express and NeoPanTracer, and gained conditional approval for Neo Comprehensive Solid Tumor in New York State.

Financial highlights

• Q3 2024 revenue reached $167.8–$168M, up 10–10.4% year-over-year; Clinical Services revenue: $145.8–$146M (+14.3%); Advanced Diagnostics: $22M (down 9.7–10%).

• Adjusted gross profit increased 19–20.2% to $80–$80.1M; gross margin 44.6%, adjusted gross margin 47.8%.

• Adjusted EBITDA: $13–$13.4M, up from $3–$3.3M in Q3 2023.

• Cash and marketable securities at quarter-end: $387.7–$388M; positive operating cash flow of $9–$9.2M.

• Net loss: $17.7–$18M (EPS: -$0.14), improved from $18.5M (EPS: -$0.15) year-over-year.

Outlook and guidance

• FY 2024 revenue guidance raised to $655–$667M (11–13% growth); adjusted EBITDA guidance increased to $37–$40M (over 1,000% growth year-over-year).

• FY 2024 net loss expected to improve to $(78)–$(81)M, an 8–11% reduction from FY 2023.

• Adjusted diluted EPS for FY 2024 projected at $0.08–$0.10.

• Continued investment in commercial expansion, product development, and automation expected to drive future growth and margin improvement.

• Plans to provide updated long-term revenue growth targets with full-year 2024 results in February 2025.