NeoGenomics raises guidance on NGS growth and plans more commercial investment

NeoGenomics grew third-quarter revenue 11% to $209 million and raised its full-year outlook, the Florida-based cancer diagnostics company said in its results release on 29 October. Clinical testing, its core business, grew faster still at 13%, to $195 million.

Where the growth came from

The mix is the story. Next-generation sequencing revenue rose 29% on 17% more NGS tests, while overall clinical volume rose just 2%. Average revenue per clinical test climbed 11% to $530. In other words, NeoGenomics is doing a similar number of tests but more of them are higher-value sequencing panels.

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That shift is showing up in margins. Adjusted gross margin improved by 310 basis points to 49%, adjusted EBITDA rose to $19 million from $12 million, and the GAAP net loss narrowed to $8 million from $27 million a year earlier. Operating expenses fell 3% to $105 million.

"Our third-quarter results reinforce that we have the right strategy in place and the right team to execute against it," Tony Zook, CEO, NeoGenomics

Reimbursement and coverage

The company highlighted wider Medicare coverage for RaDaR ST, its minimal residual disease test, which now includes monitoring how late-stage solid tumours respond to immunotherapy. That is the test's third Medicare-covered use. NeoGenomics also said it had expanded agreements with several commercial payers to bring it in-network, which should help reimbursement for newer tests.

Commercial spend and guidance

Sales and marketing expense rose to $27.6 million in the quarter from $21.8 million a year earlier, and Zook said the company sees room to invest further in its commercial teams, its community oncology channel and its product pipeline.

Full-year revenue guidance moves up to $807 million to $809 million, from $802 million to $806 million, which the company puts at about 11% growth on 2025. Adjusted EBITDA guidance rises to about $60 million.

Leadership handover

The quarter also carries the cost of a planned change at the top. As announced on 5 October, President and COO Warren Stone becomes CEO and joins the board on 4 January 2027, with Zook moving to executive chair. Stone joined in 2022 and has previously been the company's chief commercial officer and president of clinical services, after senior roles at Ortho Clinical Diagnostics and MilliporeSigma. NeoGenomics booked about $1.1 million of leadership transition costs in the quarter.

The bigger picture

Independent cancer labs have spent years arguing that sequencing and monitoring tests would lift revenue per patient. NeoGenomics now has the numbers to show it, and a CEO-in-waiting who came up through the commercial side. That combination usually means sales and market access get a bigger share of the budget.

What it means for hiring

A business that says it will invest in commercial teams and its community channel is signalling demand for oncology sales reps and territory managers who can sell NGS and MRD testing to community practices, not just academic centres.
Wider Medicare coverage and new in-network payer deals make market access and revenue cycle people more valuable. In our view, reimbursement expertise is often the real constraint on growth in diagnostics.
A CEO with a commercial background taking over in January may reshape the sales leadership team. Leaders in the wider oncology diagnostics market should expect movement.

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