Precipio (PRPO) Q2 2024 earnings summary

Executive summary

• Revenue growth continued in Q2 2024, with the pathology division reaching and exceeding breakeven, and the products division progressing toward breakeven as well.

• Focused on cancer diagnostics, leveraging proprietary technology and CLIA labs to develop and commercialize products for improved diagnostic accuracy and workflow.

• Significant increase in diagnostic case volume year-over-year, with expanded partnerships and distribution channels.

• Two of three major customers for the HemeScreen program have gone live, contributing to recurring revenue and moving the company closer to overall profitability.

• Operations impacted by the Change Healthcare cyberattack, causing billing and reimbursement delays, partially offset by temporary funding assistance.

Financial highlights

• Q2 2024 revenues reached $4.4 million, up 26% from Q2 2023, driven by a 92% increase in diagnostic cases processed.

• Gross profit for Q2 2024 was $1.7 million (39% margin), up from $1.4 million in Q2 2023; gross margin remained flat.

• Net loss for Q2 2024 was $1.2 million, improved from $2.3 million in Q2 2023; six-month net loss was $3.3 million, improved from $5.3 million year-over-year.

• Cash at June 30, 2024 was $1.3 million, down from $1.5 million at year-end 2023, but improved by $300,000 in Q2.

• Working capital deficit of $1.2 million at June 30, 2024.

Outlook and guidance

• Expectation for full profitability by year-end as the products division approaches breakeven and new customers ramp up.

• Management expects billing and reimbursement processes to normalize in Q3 2024 following the Change Healthcare disruption.

• Anticipated increase in revenue in Q4 as major customers reach full activity.

• FDA approval targeted for 2025, expected to provide a competitive advantage and support further market share gains.

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