Precipio (PRPO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 44% year-over-year to $4.9 million, driven by a 47% increase in diagnostic cases, though sequential revenue declined 9.5% due to seasonal factors.

• Gross margin improved to 43% from 27% in Q1 2024, reflecting higher case volume and economies of scale.

• Adjusted EBITDA loss improved 92% year-over-year to $108,000, and net loss narrowed to $0.8 million from $2.1 million.

• Cash used in operations improved 93% year-over-year to $44,000, with net cash use for the quarter at $372,000, a 49% improvement.

• Operating expenses remained flat at $3 million per quarter, with improved cost control and scalability.

Financial highlights

• Pathology division revenue grew 54% and test volume increased 46% year-over-year.

• Pathology gross margins rose from 24% to 42% year-over-year; Products division gross margins improved from 37% to 51%.

• Combined business gross margins increased from 27% to 43% year-over-year.

• Service revenue, net of credit loss, was $4.3 million, up $1.5 million year-over-year; product revenue was stable at $0.7 million.

• Operating expenses as a percent of revenue dropped from 87% to 61% year-over-year.

Outlook and guidance

• Management expects continued revenue growth, margin expansion, and a return to positive operating cash flow by Q2 or Q3 2025.

• Pipeline of new customers and product launches expected to drive growth in the second half of 2025.

• Substantial doubt remains about the ability to continue as a going concern without additional revenue growth or financing.

• Approximately $3.7 million remains available for future equity sales under the 2023 Registration Statement.

• Non-recurring income of $0.5 million expected in Q2 2025 from Employee Retention Credit and CHC write-off.