NASDAQ:NEO NeoGenomics Q1 2023 Earnings Report $10.27 +0.18 (+1.78%) Closing price 04:00 PM EasternExtended Trading$9.71 -0.56 (-5.44%) As of 07:55 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast NeoGenomics EPS ResultsActual EPS-$0.13Consensus EPS -$0.16Beat/MissBeat by +$0.03One Year Ago EPSN/ANeoGenomics Revenue ResultsActual Revenue$137.22 millionExpected Revenue$126.31 millionBeat/MissBeat by +$10.91 millionYoY Revenue GrowthN/ANeoGenomics Announcement DetailsQuarterQ1 2023Date5/8/2023TimeN/AConference Call DateMonday, May 8, 2023Conference Call Time4:30PM ETUpcoming EarningsNeoGenomics' Q1 2025 earnings is scheduled for Tuesday, April 29, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by NeoGenomics Q1 2023 Earnings Call TranscriptProvided by QuartrMay 8, 2023 ShareLink copied to clipboard.There are 18 speakers on the call. Operator00:00:00Welcome to the NeoGenomics First Quarter 2023 Financial Results Conference Call and Webcast. At this time, all participants are in a listen only mode. Please note this call is being recorded and an audio replay will be available on the company's website. Kendra Sweeney, Vice President of Investor Relations, You may begin your conference. Speaker 100:00:21Thank you, Paul. Good afternoon, everyone, and welcome to the NeoGenomics' 1st quarter financial results call. With me today to discuss the results are Chris Smith, Neo's Chief Executive Officer and Jeff Sherman, Neo's Financial Officer. Additional members of the management team are available for Q and A, including Vishal Sikri, President of Advanced Diagnostics Warren Stone, President of Clinical Services And Melody Harris, President of Enterprise Operations. This call is being simultaneously webcast. Speaker 100:00:51We will be referring to a slide presentation that has been posted to the Investors tab on our website at ir. Neogenomics.com. Starting on Slide 2, during this call, we will make forward looking statements regarding our future performance, such as our operational and financial outlooks and projections, our assumptions for that outlook, Opportunities and strategies for our products and related effects on our financial and operating results. We caution you that such statements Reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to our most recent Forms 10 ks, 10 Q and 8 ks we filed with the SEC to identify important risks and other factors that may cause our actual results to differ materially from those contained in or suggested by the forward looking statements. Speaker 100:01:41The forward looking statements made during this call speak only of the original date of the call, and we undertake no obligation update or revise any of these statements. In addition, during this call, in order to provide greater transparency regarding our operating performance, We refer to certain non GAAP financial measures that involve adjustments to GAAP results. The non GAAP financial measures Presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity and are unlikely to be comparable to non GAAP financial measures provided by other companies. Any non GAAP financial measures referenced on this call Are reconciled to the most directly comparable GAAP financial measure in a table available in the press release we issued this afternoon. I will now turn the call over Chris Smith, Chief Executive Officer of NeoGenomics. Speaker 200:02:31Thanks, Kendra, and welcome, everyone. Thanks for joining us this afternoon to go through with our mission and vision statement because it's what motivates our company and teammates on a daily basis. Our mission is to save lives by improving patient care. Before we dive in, I do want to thank all of our teammates for everything they do every single day to make NEO such a great place to be and to transform so many patients' lives. Now let's move to Slide 4 and get into the Q1 financial highlights. Speaker 200:03:10We started the year Very strong as we continue momentum from 2022 into 2023. 1st quarter revenue was $137,000,000 a 17 Increase over the prior year. Clinical services revenue increased 16%, driven by strong volumes across our modalities and an increase in revenue per test. Notably, the Q1 was our 8th consecutive quarterly increase versus prior year in revenue per test. In addition, NGS revenue growth continued to be strong. Speaker 200:03:42Pharma Services revenue, which includes informatics increased 22%, Driven by improved growth in high margin modalities, adjusted EBITDA improved 63% and adjusted gross profit was $60,000,000 a 38.5 percent increase over the prior year. Moving to Slide 5. The Q1 continued momentum we have seen throughout the past four quarters. Historically, our business is seasonal with the Q1 being a little softer than others. So this year over year accelerated growth is a testament to the strong execution by our Neo teammates and the growing demand for our products from our Existing client base as well as new customers. Speaker 200:04:23We are pleased with the performance as some of our operating and revenue cycle initiatives are taking hold and we believe that We have the ability to continue to drive improvements in the business throughout the remainder of 2023 and beyond. Turning to Slide 6. In NeoGenomics, we have approximately 2,200 teammates worldwide focused on developing innovative oncology diagnostic solutions. We have a significant share of oncology patient testing volume in the U. S. Speaker 200:04:50And one of the largest patient oncology databases. Our belief is that everything we do starts with our patients. And if we do the right things in this underserved and growing market, we are ultimately going to create long term Shareholder value. At our Investor Day last month, we laid out our strategic priorities for the next 18 to 24 months, which are Probably grow our core business, accelerate advanced diagnostics, drive value creation and enhance people and culture. Speaker 300:05:20We have Speaker 200:05:20a great team at NeoGenomics and continue to enhance this team and our strong mission driven culture is critical to our long term success. While much of this won't be visible to outside the organization, this work is key foundation to everything else we do operationally. For today's call, I'm going to focus on our other three priorities. In Q1, we made great progress in all three. As we move to Slide 7, let me touch on a few highlights in each of the focus areas. Speaker 200:05:50Beginning with profitably growing the core business, We continue to see strong growth in our clinical volumes across all modalities. NGS revenue growth continued to be strong, a result of our product Offering an ongoing sales force expansion and optimization, which has allowed us to reach oncologists and pathologists more effectively, As well as creating strong growth in revenue per test. Additionally, we set a record in Q1 for the highest volume of test processed Per quarter in the history of NeoGenomics, a testament to our core business growth. For our second priority, accelerating advanced diagnostics, We repositioned our go to market approach with successful launch of RADAR MRD assay in 4 indications: breast, Lung, head and neck and colorectal. The RADAR assay has been available over the last year for use in clinical research studies and pharmaceutical collaboration. Speaker 200:06:45Now it's fully available to U. S. Clinicians to detect small amounts of cancer fragments with up to 10 times greater sensitivity And other tests available on the market, which allows clinicians to identify cancer recurrence earlier. In the Q1, we also expanded our NGS portfolio with 3 new tests, including neo comprehensive for solid tumors. We have completed our MolDX submission for radar in breast cancer and are on track for submitting 2 additional indications by year end. Speaker 200:07:17In addition, we have completed the build out of our pharma and informatics sales force teams, which positions us well for continued growth. And our 3rd priority, driving value creation is well underway. We have prioritized an increase in productivity and efficiency And we're beginning to see results here as well. Even with a significant increase in testing volumes, we have continued to improve turnaround times by 17% in the Q1, thereby delivering results to patients and clinicians even sooner. Additionally, We have generated significant operating leverage as a large percentage of revenue favorability fell through to the bottom line. Speaker 200:07:56Overall, it was a fantastic quarter. Now I'd like to turn the call over to Jeff to review our financial results in more detail. Thanks, Chris. Good afternoon, everyone. I'll begin with Speaker 300:08:07a little more detail on our operating results for the quarter. As Chris said, we started the year with accelerating revenue growth And continued improving financial performance. 1st quarter revenue was $137,000,000 a 17% increase over the prior year. Q1 represents the highest revenue growth by quarter since Q2 of 2021. Revenue growth was driven by growth in clinical test volume, A continuing shift to higher complexity tests, improvement in revenue per test and reductions in turnaround times. Speaker 300:08:40Turning to Slide 9. Clinical Services revenue of $115,000,000 was an increase of 16% year over year, Driven by a 7% increase in volume and higher revenue per test, we are encouraged that our sales force optimization strategies Enabling us to reach oncologists and pathologists continue to show progress. Turning to Slide 10, average revenue per clinical test increased by 8% to $402 representing an improvement for the 8th consecutive quarter versus the prior year As we turn our focus to higher value tests and revenue cycle management initiatives. Turning to Slide 11, pharma services revenue increased by 22% to $22,000,000 compared to the Q1 of 2022, driven by both price and higher volume in pharma As well as by strong revenue growth from informatics. Looking at the income statement on Slide 12, adjusted gross margin was 43.5 Percent, an improvement of 6 70 basis points over the Q1 of last year. Speaker 300:09:47Adjusted EBITDA was negative 7,000,000 A $12,000,000 or 63 percent improvement over the Q1 of 2022. These significant improvements were driven by both higher gross profit and lower operating expenses and highlight the operating leverage in the business. Regarding operating expenses, sales and marketing expense was $16,300,000 G and A was $61,500,000 And R and D expense was $7,400,000 In addition, there was $4,700,000 in restructuring costs in the quarter Related to the previously announced organizational restructuring and footprint optimization. Turning to the balance sheet on Slide 13. We ended the Q1 with cash and marketable securities of $418,000,000 Our cash burn in the quarter was $20,000,000 An improvement of $14,000,000 or over 40 percent from Q1 2022. Speaker 300:10:43Our strong financial position provides us a financial ability to continue to invest in the business and achieve our strategic and financial objectives. Given our Q1 financial performance In continued progress executing on our strategic priorities, we are revising our revenue and adjusted EBITDA guidance for the year. Turning to Slide 15, we previously had revenues at $545,000,000 to $555,000,000 representing 7% to 9% growth in 2023. We are revising that range upward and now expect total revenue between 5.50 $5,000,000 $565,000,000 for the year, representing 9% to 11% growth. Adjusted EBITDA was negative $27,000,000 to negative $22,000,000 And is now negative $22,000,000 to negative $18,000,000 representing a 54% to 63% improvement. Speaker 300:11:37We continue to see strong revenue growth and an increase in NGS product mix and are very encouraged by the opportunities for Radar and Neo comprehensive. As the year progresses, our year over year comparisons will get more difficult, but we believe we have a strong foundation and dedicated teammates to deliver financial results. While we continue to be focused on driving operational efficiencies, we will also continue to invest in the business To capitalize on our future growth opportunities, our strategic focus remains to deliver long term sustainable growth. With that, I'll turn it back over to Chris. Thanks, Jeff. Speaker 200:12:16As we move to Slide 16, it provides a quick summary of the quarter. We're very pleased with our year over year progress, including strong revenue growth of 17% and significant improvement in adjusted EBITDA. In addition, we saw meaningful progress in the execution on our strategic priorities. Therefore, we are raising our full year guidance. We are well on our way to becoming the leading cancer testing information and decision support company. Speaker 200:12:43We will continue to build on the foundation we have laid The past several months to deliver long term sustainable growth. I'm excited for our teammates and our customers And most of all, the patients with cancer who we serve on a daily basis. Thank you for your time. And I'll turn it back to you, operator. Operator00:13:03At this point, we will open the line for questions. The company asks that each person limit their questions to 1, So that we may hear from everyone within the hour allotted for this call. And the first question today is coming from Puneet Souda from SUB Securities. Speaker 200:13:41Puneet, how are you doing? Speaker 400:13:43Hey, I'm good, Chris. Thanks for taking the questions. Speaker 200:13:46Sure. Speaker 400:13:47First one and congrats on the strong quarter here. And When we look through the cadence for the rest of the year, what are some of the things that you are sort of watching out for? I mean, because the guide increase you beat our number by $10,000,000 The guide was Increased by a proportionate amount. But just sort of I'm wondering, what sort of things that you're Counting as prudence in the guidance, if I Speaker 200:14:12may. Yes. Look, I think that's a fair question, and we're probably going to get it asked. I mean, you're asking it Folks that have been following us. And look, I think there were a couple of things, Puneet. Speaker 200:14:21I think we came in and evaluated the business Yes. As a relatively new leadership team, we saw a great franchise with significant opportunities. And we put these Strategic focus initiatives into place and really began executing it. And candidly, I think that those are coming to fruition Quickly, right? And I think in any business, like how long does it take for a rep to become effective? Speaker 200:14:48Or how quickly Can you improve operating efficiencies or how do you get leverage? I mean, launching new products. And I think what you're seeing is that these like and I always talk about the portfolio effect, What's happening is a lot of things are coming together. And so we feel very comfortable raising the guidance. You know that our nature is generally, we want to overpromise and Excuse me, under promise and over deliver. Speaker 200:15:10And I think that's what we try to do by setting initial guidance. And I think as we're getting to know the business It's performing well. We feel really good about where that's going. So I don't know, I hope that answers your question. Look, I would say MRD, if we get Radar, MolDX, we submitted in the Q1 for breast, which is one where we believe we're incredibly differentiated On sensitivity, we launched we were probably behind our competitors on solid tumor with NGS. Speaker 200:15:39We launched the new solid tumor Product or NGS, so I think those are important things. And then these reps that we're hiring, whether it's an informatics, pharma or in the clinical, getting them to get traction. And so Now it's about this long term sustainable growth. So we just we've talked a lot about expanding Houston that's well underway. And so there's a lot of things operationally, Whether IT infrastructure set that we're working on, but I think some of these initiatives where you can move the lever From a financial perspective, are taking hold. Speaker 200:16:08Yes. Speaker 300:16:08And I would just add, I think we just need to continue to focus on strategic execution, as Chris noted, With the new sales people coming on, ramping them up, making sure we're getting the right education and training on that, I think will also have an impact. Look, we're going to continue to make investments as we said as the year progresses as well. So we'll continue to make investments in the second, third and fourth quarters, Which will have long term benefit as well. Yes. Speaker 200:16:34And we've talked about this. It's a great business, but it needs to execute. And I think what you're seeing is execution. Speaker 400:16:40Got it. That's super helpful. On AUP, that obviously improved in the quarter. So How much of that was NGS contribution? And sort of when we think about the overall guide, how are you contemplating The AUP within the context of this guide. Speaker 400:16:57Thank you. Speaker 300:16:58Yes. I think when we gave guidance, we didn't break out The different buckets, but I would say we had good progress in revenue cycle initiatives. The NGS volume mix continued to be strong And that also contributed to the revenue growth. And we've also talked about we've had some pricing success as well. So I'd say all those are factors that contribute I think give us pretty good visibility for the remainder of the year on AUP. Speaker 400:17:25Got it. Okay. It's great guys. Thank you. Speaker 200:17:27Thanks. Operator00:17:29Thank you. The next question is coming from Alex Nowak from Craig Hallum Capital Group. Alex, your line is live. Speaker 500:17:37Hey, Chris. It's actually Chase on for Alex. Thanks for taking the question. Speaker 200:17:41I guess, first from us, Speaker 500:17:42a little bit more on the Qualitative side, since you've split the organization and the sales force into that new structure that you outlined pretty well on the Analyst Day, I guess any more kind of smaller kind of more specific kind of details that you can give us on any major wins or Kind of new progress that you've seen that maybe you were a little bit stagnant on before that this new structure has kind of allowed you to target your customer base in a different way? Speaker 200:18:09Yes. I'll take it and then I'll let Warren, who's here, who's leading that group follow-up. Look, I think at the end of Speaker 500:18:15the day so first of Speaker 200:18:16all, we don't Specific customer wins or losses, right? I mean, this is a highly competitive industry and we're pretty sensitive to putting that out there. But I will say and Warren maybe can Span, we talked about in the Q4 that for the first time in probably 18 months, we won more than we had lost. So we are winning more accounts than losing. And then I think Warren talked a little bit about that at Investor Day, but do you want to add any more color without specific accounts? Speaker 600:18:41Yes, I think that's spot on, Chris. We spoke about this, the commercial strategy at the Investor Day, which was protect, expand and win. And ultimately, that played out really well in quarter 1. Ultimately, we won more new customers than we lost. And specifically, we may have lost 7 and we won 28. Speaker 600:19:00So the net effect is positive there. And that's ultimately, As we start to use digital tools, particularly Salesforce and other AI enabled tools, we're able to gain And these are some of the results that we're starting to see. Speaker 200:19:16Yes. And I think a testament is look what the volume growth was. I mean, up 7%, well, north of 7%. So, I think you're getting both. Speaker 500:19:29Yes. That makes sense. And then last from us, we had a large lab here with an MRD acquisition with Haystack. I guess, now becoming kind of competition there and certainly they're going to bring a large non MRD menu as well. How do you think you'll compete there with them also being able to offer kind of a full service offering kind of like your value proposition? Speaker 200:19:56Yes. So a couple of things. I'm going to answer and then I'll let Vishal, who's on the line also. So look, at the end of the day, I mean, Quest was a big competitor already that offered heck of a lot of tests in oncology. And so we're competing against them every day. Speaker 200:20:08And look, I think that acquisition is great for the market. It's a $20,000,000,000 or going to be a $20,000,000,000 market that's less than 1% penetrated. So I think competition is great. That being said, Haystack is not even commercial yet. There's a long way to go before MRD is in the bag with Quest being sold. Speaker 200:20:27And I always joke that people don't die of indigestion, I mean, of starvation, they dive into digestion with acquisition. So they got to still look, I we're sticking to our plan. And I think, look, I applaud the acquisition. I think it was a good acquisition. Will be good for the market, but I wouldn't we're not that's not something that we're focusing on our own knitting versus worrying about them right now. Speaker 200:20:48You want to comment anymore, Vishal? Speaker 700:20:51No, I think you said it, Chris. I think it's overall good for the MRD market as a whole shows See that, and that's where the market and the clinical practice is moving to. Having said that, they're pre revenue right now and they have a long way to go. So we're Operator00:21:13The next question is coming from David Westenberg from Piper Sandler. Speaker 800:21:17Hi, thank you so much for taking the question and congrats on really a strong print here. Hello. So, I'm just going to get back to the gross margins. Now, the gross margins were way up sequentially. Mix is really good. Speaker 800:21:32I think historically, in 2019 ish, you were in the high 40s. Do you have higher confidence now that you can really get to that? Are you seeing that leverage in the GM, so we could see that maybe Get up into the 40s maybe faster than we had thought initially just given the really good sequential step up and returning to that? Speaker 300:21:55Yes. I think we said on Investor Day, we expect it to return to the company's historical margins by 2026. Obviously, Continuing to perform well and execute will give us more confidence of getting there over time. But I think again, similar to Q4, Q1 is just a good example of the company's ability to generate operating leverage on that revenue growth. And so I think adding growth We'll certainly, certainly happen we'll certainly help drive that. Speaker 300:22:25As you look at Q4 versus Q1, we did see as expected a in pharma and there's relatively more fixed costs in our pharma business than our clinical business. And so you did see clinical gross margins Up $3,600,000 and pharma down $5,600,000 but we were expecting that. So overall, it came in stronger than we were initially So I think clinical is really helping to drive that. And so I think the mix of the business in any particular quarter can have an impact. But overall, We are very focused on returning the company to profitability and producing free cash flow. Speaker 300:23:03And I think this is another good quarter And progress to get to that point. Speaker 900:23:09Got you. You have a Speaker 800:23:10lot of analysts. I think this is a short question here. Can you remind us where you're at? I think on the Analyst Dave, you said, you talked about sales force hires. And where are you at in those hires? Speaker 800:23:20And has this been hitting the P and L yet? Because again, you did get really good operating leverage. But so anyway, I'll just that quick reminder. Yes. Speaker 200:23:28I'll let Warren go into detail and if Vishal wants to comment at all on his, but I mean Vishal's is full With Farm and Rate, our much smaller sales forces, but you also want to give an update. Speaker 300:23:37Yes, I'll start just on the cost side. So you're not seeing much of a ramp yet in Sales and marketing expense, look, we also did some revisions in some of our comp plans as well. So I think there's a lot of factors in there. But I think I would expect to see sales And marketing ramp as the year progresses, as more of these reps come on, start being productive, having commission and salary costs. And so there was some in the quarter. Speaker 300:24:01It was offset by some other things in the quarter, but I would expect more to progress. And that is part of the investment we talked about Yes. And Investor Day for our guidance. You should expect that number to ramp throughout the year. Speaker 600:24:13Yes. So David, very similar. I think if you take what Jeff said from a cost I think the sales or revenue evolution is pretty self explanatory. We're rapidly bringing people on. I think we have 6 more positions to fall, which We'll be done by the end of this month and some of those were filled earlier in January. Speaker 600:24:32I'd say we're starting to get to productivity now And we really feel that we're in full stride as we get into H2. Speaker 200:24:41Those 6 are for your H1 hires than you've got Speaker 600:24:44The 6 of the H1 hires and then there's a Phase 2 in terms of further sales force expansion that we'll do in the latter part of this year. Thank Operator00:24:56you. The next question is coming from Dan Brennan from TD Cowen. Speaker 900:25:02Hey, Dan. Great. Thanks. Hey, Chris. How are you doing? Speaker 900:25:05Thanks for the questions here. Congrats on the quarter. Maybe starting off just on Innovada and kind of Radar. Just kind of remind us, so you're expecting decision this year, back half, Q3, Q4, Any way for us to think about timing there? And then I heard you say during the prepared remarks, you're expecting 2 more indications this year. Speaker 900:25:26I thought I don't know if the Investor Day said 3, but maybe just maybe a little more color on that front as well. Speaker 200:25:33Yes. I'll will let Vishal jump in, but I want to clarify. We submitted breast in Q1 and historically they take a 60 ish First pass review timeline. So we'll be in communication with them in Q2, Just so you know on that one. And maybe Vishal can even talk about how we're managing all of that around a MolDX and breaking up breast in a different Disease states, etcetera. Speaker 200:26:02Vishal, you want to take that? Speaker 700:26:03Yes, absolutely. So yes, as Chris mentioned, we submitted in Q1. We do Back to have that conversation with them in Q2 and early Q3. It all depends on the timelines from their side. But we do expect Two additional indications to go in this year and for a total of 3 for the year is what we had said. Speaker 900:26:25Got it. Okay. And then maybe just on NGS, I know you're not giving us too much color there, but just any way to think about the impact Or just qualitatively the impact, I think you talked about maybe 20% growth at the Investor Day. So and kind of what's the early traction on Neo comprehensive from customers that you Speaker 1000:26:42rolled it out with? Speaker 200:26:43Yes. I'll let both those guys take that. But look, remember that our thing was to be above 20%. So I can tell you that we were Well above 20% for the quarter. But do you guys want to give Speaker 600:26:57I think in terms of Neo comprehensive, we only launched the Product in mid March, and I'd say we met our expectations in the month of March, and that trend continues. Speaker 200:27:09Hey, Vishal, you got anything else? Speaker 700:27:11No, I think that's all right. I mean, we're on target to where we thought we would be. Speaker 900:27:17Got it. Okay. All right. I'll get back in the queue. Thank you. Operator00:27:23Thank you. And the next question is coming from Andrew Brackmann from William Blair. Speaker 1100:27:32Maybe on the pharma services revenue line, can you maybe peel back the onion there a little bit and just sort of talk about the makeup of that number? We sort of take this as to be a more healthy number, I guess, with more of those profitable projects coming through? Or is that Still, something that's sort of in flux and that should start to improve throughout the year? Thanks. Speaker 200:27:54Yes. Let me let Kind of Jeff and Vishal talk about it, but we don't disclose or break out the specifics in that format. I mean, we talk about informatics, But I think Jeff and Vishal can probably paint some color. Speaker 300:28:07Yes. So I'll start and I'll let Vishal jump in. So we said Q4 was pretty strong, And we had some big significant radar growth in Q4 and we had some pretty strong informatics growth. I would say, overall, all three had good growth, our legacy Pharma Informatics and in Nevada in the quarter. So I'd say, We're certainly on track to where we expected to be. Speaker 300:28:33We haven't gotten into the specifics, but I think we are set up pretty well as we look at the rest of the year. And Vishal, if you want to add anything else? Speaker 700:28:42No, I think you're right. I think as we look to Seasonal effect that always you see at the pharma business in general, Q1 has always been our lowest Speaker 1100:29:02Okay. I'll stick to 1. Thanks guys. Speaker 200:29:05Thank you. Operator00:29:07Thank you. And the next question is coming from David Delahunt From Goldman Sachs. Speaker 600:29:13Hey, David. Speaker 900:29:14Hey, guys. Congrats on the strong quarter. Any additional color on the drivers Of that increased volume that led to the beat? Speaker 200:29:26Yes, I mean, we kind of hit it. I mean, we really spent a lot of time. Look, I think we've talked about that we hired we started hiring 20 oncology reps In the second half of the year and then have been rapidly tried to expand that. We've been pretty open that we're going to get to 45 by the end of the year. I think we'll get 2 thirds of the way there in the first half. Speaker 200:29:50I think when you start to get new folks and to be fair, I would say a lion's share of that group is coming from The industry, so they have deep relationships and knowledge. I think they can make an impact relatively quickly. I mean, I think one of the things we've talked about this business that we like Is that there's you're not placing an analyzer in the hospital basement for 5 year contract, right? You can move business pretty quick. So I think, I'd say the expansion and the optimization definitely of the field. Speaker 200:30:17I mean, I would say that, Warren talked about this. I think our go to market strategy and the way that we think about winning accounts and doing bid process and Being more thoughtful in places where we maybe don't have a product category. So remember, we have over 6 Under test, I think and I use that a lot under the word optimization. I think what you're seeing is a lot of things around execution and that's Yes. Speaker 300:30:44And I would add just a couple of things, a couple of themes that we hit on, on Investor Day. 1 is a sense of urgency and 2 is Accountability and I think Warren and the leadership team have certainly brought that. So I just think it's focused on execution and its leadership and it's holding people accountable for results. Speaker 600:31:03And maybe just 2 other things that I'll add. Speaker 200:31:05I would say, I do a shout out to Melody too. I would say our turnaround time, no one's asked an ops question, but Melody is on the And we should talk about turnaround. I'm sorry, Warren. I didn't mean to interrupt, but you may have been throwing her No, that's exactly Speaker 100:31:17what I'm saying. Speaker 1200:31:18I want to just throw Speaker 600:31:18a minute and just say thanks. I think ultimately, it's much easier to strategy when your turnaround times are good and continue to improve and a number of our clients have recognized that. So that's positive And that's helped us also expand share of wallet, which is really the E and our protected fan win strategies. It's not only about retaining existing customers, winning new ones, It's selling more to existing customers and we've done that effectively and that's really supported by the improved turnaround times that Mary and the team from the upside are doing a great job on. Speaker 900:31:50Fantastic. Great work. Speaker 200:31:52Thanks. Thanks. Operator00:31:54Thank you. And the next question is coming from Tejas Savant From Morgan Stanley. Speaker 200:32:00Hey, DeJuan. Speaker 1200:32:02Hey, Chris. Good evening. Good start to the year, so congratulations. Just one on NeoComprehensive, perhaps to kick things off. I know you'd mentioned it's still early days in the launch, but perhaps Vishal can take this. Speaker 1200:32:17Any color you can share on the degree of switching you're seeing in those sort of oncology accounts from existing sort of users of other people's tests. And how many of those are essentially sort of first time, CGP users, at least so far, Vishal? Speaker 700:32:38So Tayah, I think it's still a little bit early. We launched this a year sorry, a month ago. So I think we're still going to look at that. I would say that right now where we thought we would be, we're well on track for that and meeting where we from a forecast perspective. I think it's still early days to see how much of it's coming from market share taking from other competitors and so on. Speaker 1200:32:59Got it. Okay, fair enough. And then on the pharma side of things, guys, I mean, any evolution in your thought process around just midcap biotech funding, Any sort of sample shipment delays or budget constraints that you're picking up on, especially at your smaller customers? Speaker 200:33:18Shaul, you want to take that? Speaker 700:33:20Yes, I can take that one too. So what we do see is that there is an impact We're seeing in some of our traditional modalities in general, but we still see very strong demand for our, What I call our high margin modalities like NGS, like radar and so on. So but we do see a little bit of impact, but we think that we can make it up on the other side. Speaker 200:33:42Got it. Thank you. Operator00:33:46Thank you. The next question is coming from Andrew Cooper from Raymond James. Speaker 200:33:51Hey, Andrew. Speaker 1300:33:53Hey, Chris. Hey, everybody. Thanks for the time and nice quarter. I guess I'll start with an ops question since nobody else has yet. We talked about it a decent amount at the Analyst Day, but when we think about that automation journey, the sort of lab optimization Spending in Houston, all of those moving parts that I think are so far you've managed well. Speaker 1300:34:13Just what inning do you feel like we're in? And Where are sort of the risk points versus the derisking gates that you'll be getting through that we can sort of try to track as you move from where you are to Ultimately, where you want to be to continue to be able to drive those margins better and better? Speaker 200:34:30I'll give the high level and then I'll let Melody give you more color. Look, I think we're still early. I would say, 2nd inning, I mean, I think, look, I think when we bought Innobada, they had pretty good innovate I mean, automation, we didn't have a lot of that. It's one of the Thanks, Melanie, spending time on. But Melanie, do you want to give some more color around what's going on? Speaker 1400:34:51Sure. So I would agree with Chris. We're maybe inning 2, inning 3 For this journey, automation, we have taken as Chris said, the Innovada line was fully automated, that remains fully automated. And so we'll replicate that in the Houston expansion as we go there. And then we're slowly starting to add automation to our other modalities. Speaker 1400:35:13And so we showed you some of that on Investor Day with the deep neural network AI that we're starting to use in our cytogenetics line. We're adding more automation in our molecular line. So that's beginning. We're taking good steps there. Yes, about some of the risk points. Speaker 1400:35:30Supply chain will, of Automation pieces, but because that rolls out relatively slowly, that's not going to be as much of a risk for us. Speaker 200:35:47Hey, Mel, do you want to also talk about your networking you're starting to think about and pull together with all the dry labs? Speaker 1400:35:53Absolutely. So, we are Scanning more and more of our images and our we're doing digital HMEs and uploading to the network so that we can Move our analysis away from the wet lab itself, the locations for the wet lab and the build out around that can be more expensive than if we are in Office space or less expensive real estate space where we can hold our analysts in those locations. And so by Digitizing our work, we're able to load into the network, do the analysis over the network, and then we're also gaining some advantage Speaker 700:36:37Thanks. Speaker 1300:36:38Great. That's super go ahead. Speaker 900:36:44Okay. If I can Speaker 1300:36:45just sneak One more and that was helpful. Speaker 900:36:46I guess you Speaker 200:36:47can. He didn't ask the question. You might as well. Thanks for giving us. Speaker 1300:36:52Just appreciate it. Just on kind of the OpEx side as well, when we think about this sort of transition, selling more into the oncology suite, Driving more of these sort of advanced diagnostics. When we think about the back end and billing and reimbursement, I think historically a lot more sort of hospital billing versus maybe where you end up. What's the spend? What's the lift that you need to do? Speaker 1300:37:14And where are you in kind of that process to continue to stay up to speed and keep up with hopefully the growing volumes that Maybe go a little bit more kind of the traditional payer route than what your historical business might have been. Speaker 300:37:28Yes. I think from the revenue cycle side, as part of our IT evaluation, we're clearly evaluating Our current revenue cycle platform and seeing how do we enhance that. So I do think That's probably more of a 2024 from a capital investment perspective, but we're certainly sizing that and looking at that for the back half of the year. But I think the infrastructure is in place, but I do think there are some technology investments that we can make that will help accelerate Revenue cycle and give us a little bit better visibility. But I think we have a good structure in place. Speaker 300:38:10I think some technology adds will help on that. And that will clearly be a focus as we go in the back half of the year looking at how do we optimize going forward in 2024 and beyond. Speaker 1500:38:22Great. Thanks Speaker 1300:38:23guys. I'll stop there. Thank Operator00:38:25you. The next question is coming from Mike Matson from Needham. Speaker 1000:38:29Hey Mike. Hey, guys. This is Joseph on for Mike. I think probably only one question maybe left to ask. Appreciate all the color you guys gave on the increases in revenue per test with revenue cycle management as well as just This higher price assays, NGS assays, but I didn't hear any you say anything around Maybe pruning of the test menu. Speaker 1000:39:00I believe maybe at the Investor Day or previously, there had been talk about maybe Taking out some of the lower priced tests or maybe tests that don't really see a large amount of volume aren't really ones that really move the needle. So I was curious about that if any work has been done on there. Speaker 300:39:20Yes. I think that's an ongoing effort. I'm not sure you'll see material impact AUP from that, but that is an ongoing effort that we're looking at and I think we'll continue to refine over time. Speaker 1000:39:33Okay. Okay. And then I guess maybe similar questions for Pharma Services though. In terms of shifting towards Trying to get to the earlier phases where work can, I guess, be completed, the throughput is higher? That's a similar thing that's just going to be an ongoing thing work over time? Speaker 300:39:53I think it's yes, I think we started certainly in the second half of twenty twenty two. I think that Continues and I think we've had a pretty good success there and clearly the focus is Near term revenue generation both and how we are compensating reps and even our whole approach. I think the whole Approach of really taking out bookings even from our earnings really says we're focused on clear revenue drivers that have better visibility on in the next couple of quarters versus over multi year periods. Speaker 1000:40:30Yes. Okay, absolutely. Thank you very much for taking our questions. Thank you. Speaker 200:40:34Thank you. Operator00:40:35The next question is coming from Derik De Bruin from Bank of America. Speaker 900:40:41Hey, Speaker 1600:40:42Derek. Hi, good afternoon. How are you? Good. So a couple of questions. Speaker 1600:40:48So you had a Looks like a 5% quarter on quarter increase in price. Is that sustainable that sort of run rate? And or is there anything unusual? Just basically thinking about How to look at pricing the rest of the year? And I guess when you Speaker 400:41:06sort of look at this, are you Speaker 1600:41:07getting Are you doing things at the pricing at your competitors' rates? Are you pricing at premium? Just sort of thinking about how to think about That four zero two number and how that moves up? Speaker 200:41:19Yes. Well, some of these obviously have set reimbursement, but not all that pause that process. So look, I think pricing is one of these levers That we significantly under manage as a company, whether it's standard price increase, whether it was chasing revenue cycle Management or improving our relationships with payers and getting a premium for the services and things. And so I do think it's sustainable. I don't know that I would say what the percentage was every quarter, but look, 8 quarters in a row, we've been doing it. Speaker 200:41:49I think especially When you look short term, when I think short term of 12, 18 months, our mix will continue to be lifted. We're a leader for sure on NGS and heme, but we're way Far behind on share from a solid, which is where the market's moving, which is would be probably our highest ASP. And so as we continue to grow our share of that Mark, it is going to also help us. So I think there's a lot of things going on. And so I will say internally, it's our goal to do that. Speaker 200:42:18I don't think we'd go out and disclose how much, I would say, yes. I mean, it's a Speaker 300:42:21Yes, I think we have room. I wouldn't extrapolate 1 quarter for any type of trending. It was a strong it was definitely a strong quarter. But we do expect the levers that we are pulling, which are higher intensity tests, revenue cycle improvements, As well as pricing benefits, all are going to have a positive impact over time, but I wouldn't try to guide you to a specific quarterly No impact, but in Q1, it was definitely a strong quarter. Speaker 1600:42:49Got it. And that sort of leads to my next question on just how to sort of think about the 2nd quarter. I Q1 came in so strong. And as you pointed out, it's usually your seasonally weakest quarter. Just some thought The quarter to quarter increase there, not sure not quite sure what to make of the modeling at this point. Speaker 1600:43:09Just is there any general thoughts on it? I mean, I don't know if you would model what you've historically seen in terms of jumping between Q1 and Q2, just any sort of like thoughts? Speaker 300:43:20Yes. I think we said in Investor Day that we expected a progression throughout the year From on a quarter over quarter basis, so I would kind of just stick with that as you think about the quarters versus the prior year quarters, As you're thinking about revenue for the rest of the year. Speaker 200:43:36Yes. But I would definitely I said that in the first question. Like, look, I think we're getting momentum from the initiatives. And Enough that we significantly raised guide. So I think we feel good about how things will continue. Speaker 1600:43:52Got it. Thank you very much. Speaker 200:43:53Thank you. Operator00:43:55Thank you. The next question is coming from Mark Massaro from BTIG. Speaker 200:44:06Hey, Mark. Mark, you there? Yes. Speaker 1500:44:14Hey, guys. Thanks for taking the question. Can you hear me, sir? Speaker 200:44:18Yes, we can. We got you. Speaker 1500:44:20Okay. Yes, I was on mute. So you haven't Not really, you guys haven't had a question on radar yet. So I recognize that you're not quite 2 months launched, but you're coming up on 2 months. The market leaders seem to have some degree of entrenchment in CRC. Speaker 1500:44:41You guys are launched in head and neck and lung As well as breast and CRC, I guess recognizing that it's really early, are there any takeaways out of the first Almost 2 months of launch in terms of volumes. And I'm curious if that strong volume growth that you had in Q1 included Some volumes from radar clinically? Speaker 200:45:04Yes, really wouldn't have had any revenue because Yes, on the clinical side, because we are just sending kits out late. So by the time a kit gets out, turns gets in, we run the test like we wouldn't have had any revenue. Vishal, you want to talk about how it's going and Warren, you want to jump into? Speaker 700:45:22Yes. So I would as Chris mentioned, Q1 because of The how long it takes to complete the testing and so on, you wouldn't have seen that in Q1. But I would say that where we feel that we have our strengths in breast cancer, In head and neck cancer, we're starting to see good progress there in line with where we thought we would be. So I think that's really positive. And The market uptake, especially because of this high sensitivity of the RADAR assay, really is showing in those type of cancers. Speaker 700:45:53I would also say that we're getting good interest from people that are starting to use it that want to see applications in other cancers where they feel that sensitivity matters. So we're also exploring those type of opportunities at the same time, Mark. Speaker 1500:46:07Okay. And then, I do want to press into volumes again. We haven't seen volume growth like this in approximately 2 or 3 years. So I think we could investors could probably benefit from I know you talked about NGS was well above 20%. What are you seeing in terms of end market demand? Speaker 1500:46:29How much of the volume growth came from the hiring of new reps? And any commentary about end markets like in fish and flow? Speaker 200:46:36Yes. Look, I would say in the quarter, I would say really every modality Grew above where we have been growing that business over the last 18 months. And I think a lot of that was back to this thing of winning a lot more accounts. And Look, I think the obvious one everybody wants to focus on is NGS because it's kind of out there as being talked about. But we're seeing really for example, heme, NGS is a business that's not supposedly growing. Speaker 200:47:06And I will tell you, our business grew significantly because we're the market share leader. We were moving share. That's a new rep. I would say, Warren talks a lot about expanding the wallet or winning. I would say that, look, we know where the industry is On what the number of reps that we have can do compared to a rep group that calls out with on oncologists and pathologists because it is such a different call point. Speaker 1500:47:44Excellent. Congrats on the quarter. Speaker 200:47:47Thanks. Thank you. Operator00:47:49And the next question is coming from Mason Rico from Stephens. Mason, you are now live. Speaker 1700:47:56Hey, this is Jacob Kramble on for Mason. Thanks for taking our questions. Congrats on a really strong quarter. A lot has already been covered here. So maybe just a quick one on your revenue cycle management initiatives. Speaker 1700:48:07And this might have already been Touched on a little bit earlier, but you guys have talked about a number of initiatives on this front at your most recent Analyst Day. So just wondering if you can maybe give us a further update on Speaker 300:48:22Yes. We've done a fair amount of work On getting more billing information upfront in the billing process, when we get a test Requisition and moving more to more automated ordering of our tests. So those we've made good progress on both of those in the quarter. I would say we've also made progress just on getting paid for work that we're doing. So I think there's a lot of focus on just looking at The test we've done, how we've been paid historically, particular payers or patients and what we need to do to get Actually get paid and we've seen some improvement and some lift in our revenue as a result of that. Speaker 300:49:03We're again, we've already had the test volume, we already had the cost, But we're having more success in actually getting paid for the work done. So both of those are probably 2 of the bigger areas that we've made progress on and I think are still See a lot of opportunity to improve as we go throughout the year. Speaker 200:49:21All right, got it. I'll leave it at one. Thanks. Thank you. Operator00:49:26Thank you. And there were no other questions in queue at this time. I would now like to hand the call back to Chris Smith for closing remarks. Speaker 200:49:33All right. Thanks, Paul. And everyone on the call, thanks for catching up this afternoon. It was great to be able to share the quarter with you, then also go through some questions and we'll look forward to seeing you on the market. Be well. Speaker 200:49:45Take care. Bye. Operator00:49:48Thank you. This does conclude today's conference. You may disconnect at this time and have a wonderful day. Thank you for yourRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallNeoGenomics Q1 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) NeoGenomics Earnings HeadlinesNEO Battery Materials Appoints Kenneth Hoffman, Distinguished Battery Industry Leader and Former McKinsey's Global Head of Battery Materials, as New DirectorApril 25 at 9:07 AM | globenewswire.comNeoGenomics to Showcase PanTracer LBx Validation Study at AACR Annual MeetingApril 22 at 7:05 AM | businesswire.comGet Your Bank Account “Fed Invasion” Ready with THESE 4 Simple StepsStarting as soon as a few months from now, the United States government will make a sweeping change to bank accounts nationwide. It will give them unprecedented powers to control your bank account.April 25, 2025 | Weiss Ratings (Ad)Piper Sandler Keeps Their Buy Rating on NeoGenomics (NEO)April 14, 2025 | markets.businessinsider.comNeoGenomics price target lowered to $12 from $16 at BofAApril 14, 2025 | markets.businessinsider.comNeOnc Technologies Announces Near Completion of Phase I Enrollment for NEO212 Brain Cancer TherapyApril 8, 2025 | globenewswire.comSee More NeoGenomics Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like NeoGenomics? Sign up for Earnings360's daily newsletter to receive timely earnings updates on NeoGenomics and other key companies, straight to your email. Email Address About NeoGenomicsNeoGenomics (NASDAQ:NEO) operates a network of cancer-focused testing laboratories in the United States and the United Kingdom. It operates through Clinical Services and Advanced Diagnostics segments. The company offers testing services to hospitals, academic centers, pathologists, oncologists, clinicians, pharmaceutical companies, and clinical laboratories. It also provides cytogenetics testing services to study normal and abnormal chromosomes and their relationship to diseases; fluorescence in-situ hybridization testing services that focus on detecting and locating the presence or absence of specific DNA sequences and genes on chromosomes; flow cytometry testing services to measure the characteristics of cell populations; and immunohistochemistry and digital imaging testing services to localize cellular proteins in tissue section, as well as to allow clients to visualize scanned slides, and perform quantitative analysis for various stains. In addition, the company also provides molecular testing services, which focus on the analysis of DNA and/or RNA, and the structure and function of genes at the molecular level; morphologic analysis, which is the process of analyzing cells under the microscope by a pathologist for the purpose of diagnosis; and testing services in support of its pharmaceutical clients' oncology programs covering discovery and commercialization. NeoGenomics, Inc. was founded in 2001 and is headquartered in Fort Myers, Florida.View NeoGenomics ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Booking (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 18 speakers on the call. Operator00:00:00Welcome to the NeoGenomics First Quarter 2023 Financial Results Conference Call and Webcast. At this time, all participants are in a listen only mode. Please note this call is being recorded and an audio replay will be available on the company's website. Kendra Sweeney, Vice President of Investor Relations, You may begin your conference. Speaker 100:00:21Thank you, Paul. Good afternoon, everyone, and welcome to the NeoGenomics' 1st quarter financial results call. With me today to discuss the results are Chris Smith, Neo's Chief Executive Officer and Jeff Sherman, Neo's Financial Officer. Additional members of the management team are available for Q and A, including Vishal Sikri, President of Advanced Diagnostics Warren Stone, President of Clinical Services And Melody Harris, President of Enterprise Operations. This call is being simultaneously webcast. Speaker 100:00:51We will be referring to a slide presentation that has been posted to the Investors tab on our website at ir. Neogenomics.com. Starting on Slide 2, during this call, we will make forward looking statements regarding our future performance, such as our operational and financial outlooks and projections, our assumptions for that outlook, Opportunities and strategies for our products and related effects on our financial and operating results. We caution you that such statements Reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to our most recent Forms 10 ks, 10 Q and 8 ks we filed with the SEC to identify important risks and other factors that may cause our actual results to differ materially from those contained in or suggested by the forward looking statements. Speaker 100:01:41The forward looking statements made during this call speak only of the original date of the call, and we undertake no obligation update or revise any of these statements. In addition, during this call, in order to provide greater transparency regarding our operating performance, We refer to certain non GAAP financial measures that involve adjustments to GAAP results. The non GAAP financial measures Presented should not be considered an alternative to the financial measures required by GAAP, should not be considered measures of liquidity and are unlikely to be comparable to non GAAP financial measures provided by other companies. Any non GAAP financial measures referenced on this call Are reconciled to the most directly comparable GAAP financial measure in a table available in the press release we issued this afternoon. I will now turn the call over Chris Smith, Chief Executive Officer of NeoGenomics. Speaker 200:02:31Thanks, Kendra, and welcome, everyone. Thanks for joining us this afternoon to go through with our mission and vision statement because it's what motivates our company and teammates on a daily basis. Our mission is to save lives by improving patient care. Before we dive in, I do want to thank all of our teammates for everything they do every single day to make NEO such a great place to be and to transform so many patients' lives. Now let's move to Slide 4 and get into the Q1 financial highlights. Speaker 200:03:10We started the year Very strong as we continue momentum from 2022 into 2023. 1st quarter revenue was $137,000,000 a 17 Increase over the prior year. Clinical services revenue increased 16%, driven by strong volumes across our modalities and an increase in revenue per test. Notably, the Q1 was our 8th consecutive quarterly increase versus prior year in revenue per test. In addition, NGS revenue growth continued to be strong. Speaker 200:03:42Pharma Services revenue, which includes informatics increased 22%, Driven by improved growth in high margin modalities, adjusted EBITDA improved 63% and adjusted gross profit was $60,000,000 a 38.5 percent increase over the prior year. Moving to Slide 5. The Q1 continued momentum we have seen throughout the past four quarters. Historically, our business is seasonal with the Q1 being a little softer than others. So this year over year accelerated growth is a testament to the strong execution by our Neo teammates and the growing demand for our products from our Existing client base as well as new customers. Speaker 200:04:23We are pleased with the performance as some of our operating and revenue cycle initiatives are taking hold and we believe that We have the ability to continue to drive improvements in the business throughout the remainder of 2023 and beyond. Turning to Slide 6. In NeoGenomics, we have approximately 2,200 teammates worldwide focused on developing innovative oncology diagnostic solutions. We have a significant share of oncology patient testing volume in the U. S. Speaker 200:04:50And one of the largest patient oncology databases. Our belief is that everything we do starts with our patients. And if we do the right things in this underserved and growing market, we are ultimately going to create long term Shareholder value. At our Investor Day last month, we laid out our strategic priorities for the next 18 to 24 months, which are Probably grow our core business, accelerate advanced diagnostics, drive value creation and enhance people and culture. Speaker 300:05:20We have Speaker 200:05:20a great team at NeoGenomics and continue to enhance this team and our strong mission driven culture is critical to our long term success. While much of this won't be visible to outside the organization, this work is key foundation to everything else we do operationally. For today's call, I'm going to focus on our other three priorities. In Q1, we made great progress in all three. As we move to Slide 7, let me touch on a few highlights in each of the focus areas. Speaker 200:05:50Beginning with profitably growing the core business, We continue to see strong growth in our clinical volumes across all modalities. NGS revenue growth continued to be strong, a result of our product Offering an ongoing sales force expansion and optimization, which has allowed us to reach oncologists and pathologists more effectively, As well as creating strong growth in revenue per test. Additionally, we set a record in Q1 for the highest volume of test processed Per quarter in the history of NeoGenomics, a testament to our core business growth. For our second priority, accelerating advanced diagnostics, We repositioned our go to market approach with successful launch of RADAR MRD assay in 4 indications: breast, Lung, head and neck and colorectal. The RADAR assay has been available over the last year for use in clinical research studies and pharmaceutical collaboration. Speaker 200:06:45Now it's fully available to U. S. Clinicians to detect small amounts of cancer fragments with up to 10 times greater sensitivity And other tests available on the market, which allows clinicians to identify cancer recurrence earlier. In the Q1, we also expanded our NGS portfolio with 3 new tests, including neo comprehensive for solid tumors. We have completed our MolDX submission for radar in breast cancer and are on track for submitting 2 additional indications by year end. Speaker 200:07:17In addition, we have completed the build out of our pharma and informatics sales force teams, which positions us well for continued growth. And our 3rd priority, driving value creation is well underway. We have prioritized an increase in productivity and efficiency And we're beginning to see results here as well. Even with a significant increase in testing volumes, we have continued to improve turnaround times by 17% in the Q1, thereby delivering results to patients and clinicians even sooner. Additionally, We have generated significant operating leverage as a large percentage of revenue favorability fell through to the bottom line. Speaker 200:07:56Overall, it was a fantastic quarter. Now I'd like to turn the call over to Jeff to review our financial results in more detail. Thanks, Chris. Good afternoon, everyone. I'll begin with Speaker 300:08:07a little more detail on our operating results for the quarter. As Chris said, we started the year with accelerating revenue growth And continued improving financial performance. 1st quarter revenue was $137,000,000 a 17% increase over the prior year. Q1 represents the highest revenue growth by quarter since Q2 of 2021. Revenue growth was driven by growth in clinical test volume, A continuing shift to higher complexity tests, improvement in revenue per test and reductions in turnaround times. Speaker 300:08:40Turning to Slide 9. Clinical Services revenue of $115,000,000 was an increase of 16% year over year, Driven by a 7% increase in volume and higher revenue per test, we are encouraged that our sales force optimization strategies Enabling us to reach oncologists and pathologists continue to show progress. Turning to Slide 10, average revenue per clinical test increased by 8% to $402 representing an improvement for the 8th consecutive quarter versus the prior year As we turn our focus to higher value tests and revenue cycle management initiatives. Turning to Slide 11, pharma services revenue increased by 22% to $22,000,000 compared to the Q1 of 2022, driven by both price and higher volume in pharma As well as by strong revenue growth from informatics. Looking at the income statement on Slide 12, adjusted gross margin was 43.5 Percent, an improvement of 6 70 basis points over the Q1 of last year. Speaker 300:09:47Adjusted EBITDA was negative 7,000,000 A $12,000,000 or 63 percent improvement over the Q1 of 2022. These significant improvements were driven by both higher gross profit and lower operating expenses and highlight the operating leverage in the business. Regarding operating expenses, sales and marketing expense was $16,300,000 G and A was $61,500,000 And R and D expense was $7,400,000 In addition, there was $4,700,000 in restructuring costs in the quarter Related to the previously announced organizational restructuring and footprint optimization. Turning to the balance sheet on Slide 13. We ended the Q1 with cash and marketable securities of $418,000,000 Our cash burn in the quarter was $20,000,000 An improvement of $14,000,000 or over 40 percent from Q1 2022. Speaker 300:10:43Our strong financial position provides us a financial ability to continue to invest in the business and achieve our strategic and financial objectives. Given our Q1 financial performance In continued progress executing on our strategic priorities, we are revising our revenue and adjusted EBITDA guidance for the year. Turning to Slide 15, we previously had revenues at $545,000,000 to $555,000,000 representing 7% to 9% growth in 2023. We are revising that range upward and now expect total revenue between 5.50 $5,000,000 $565,000,000 for the year, representing 9% to 11% growth. Adjusted EBITDA was negative $27,000,000 to negative $22,000,000 And is now negative $22,000,000 to negative $18,000,000 representing a 54% to 63% improvement. Speaker 300:11:37We continue to see strong revenue growth and an increase in NGS product mix and are very encouraged by the opportunities for Radar and Neo comprehensive. As the year progresses, our year over year comparisons will get more difficult, but we believe we have a strong foundation and dedicated teammates to deliver financial results. While we continue to be focused on driving operational efficiencies, we will also continue to invest in the business To capitalize on our future growth opportunities, our strategic focus remains to deliver long term sustainable growth. With that, I'll turn it back over to Chris. Thanks, Jeff. Speaker 200:12:16As we move to Slide 16, it provides a quick summary of the quarter. We're very pleased with our year over year progress, including strong revenue growth of 17% and significant improvement in adjusted EBITDA. In addition, we saw meaningful progress in the execution on our strategic priorities. Therefore, we are raising our full year guidance. We are well on our way to becoming the leading cancer testing information and decision support company. Speaker 200:12:43We will continue to build on the foundation we have laid The past several months to deliver long term sustainable growth. I'm excited for our teammates and our customers And most of all, the patients with cancer who we serve on a daily basis. Thank you for your time. And I'll turn it back to you, operator. Operator00:13:03At this point, we will open the line for questions. The company asks that each person limit their questions to 1, So that we may hear from everyone within the hour allotted for this call. And the first question today is coming from Puneet Souda from SUB Securities. Speaker 200:13:41Puneet, how are you doing? Speaker 400:13:43Hey, I'm good, Chris. Thanks for taking the questions. Speaker 200:13:46Sure. Speaker 400:13:47First one and congrats on the strong quarter here. And When we look through the cadence for the rest of the year, what are some of the things that you are sort of watching out for? I mean, because the guide increase you beat our number by $10,000,000 The guide was Increased by a proportionate amount. But just sort of I'm wondering, what sort of things that you're Counting as prudence in the guidance, if I Speaker 200:14:12may. Yes. Look, I think that's a fair question, and we're probably going to get it asked. I mean, you're asking it Folks that have been following us. And look, I think there were a couple of things, Puneet. Speaker 200:14:21I think we came in and evaluated the business Yes. As a relatively new leadership team, we saw a great franchise with significant opportunities. And we put these Strategic focus initiatives into place and really began executing it. And candidly, I think that those are coming to fruition Quickly, right? And I think in any business, like how long does it take for a rep to become effective? Speaker 200:14:48Or how quickly Can you improve operating efficiencies or how do you get leverage? I mean, launching new products. And I think what you're seeing is that these like and I always talk about the portfolio effect, What's happening is a lot of things are coming together. And so we feel very comfortable raising the guidance. You know that our nature is generally, we want to overpromise and Excuse me, under promise and over deliver. Speaker 200:15:10And I think that's what we try to do by setting initial guidance. And I think as we're getting to know the business It's performing well. We feel really good about where that's going. So I don't know, I hope that answers your question. Look, I would say MRD, if we get Radar, MolDX, we submitted in the Q1 for breast, which is one where we believe we're incredibly differentiated On sensitivity, we launched we were probably behind our competitors on solid tumor with NGS. Speaker 200:15:39We launched the new solid tumor Product or NGS, so I think those are important things. And then these reps that we're hiring, whether it's an informatics, pharma or in the clinical, getting them to get traction. And so Now it's about this long term sustainable growth. So we just we've talked a lot about expanding Houston that's well underway. And so there's a lot of things operationally, Whether IT infrastructure set that we're working on, but I think some of these initiatives where you can move the lever From a financial perspective, are taking hold. Speaker 200:16:08Yes. Speaker 300:16:08And I would just add, I think we just need to continue to focus on strategic execution, as Chris noted, With the new sales people coming on, ramping them up, making sure we're getting the right education and training on that, I think will also have an impact. Look, we're going to continue to make investments as we said as the year progresses as well. So we'll continue to make investments in the second, third and fourth quarters, Which will have long term benefit as well. Yes. Speaker 200:16:34And we've talked about this. It's a great business, but it needs to execute. And I think what you're seeing is execution. Speaker 400:16:40Got it. That's super helpful. On AUP, that obviously improved in the quarter. So How much of that was NGS contribution? And sort of when we think about the overall guide, how are you contemplating The AUP within the context of this guide. Speaker 400:16:57Thank you. Speaker 300:16:58Yes. I think when we gave guidance, we didn't break out The different buckets, but I would say we had good progress in revenue cycle initiatives. The NGS volume mix continued to be strong And that also contributed to the revenue growth. And we've also talked about we've had some pricing success as well. So I'd say all those are factors that contribute I think give us pretty good visibility for the remainder of the year on AUP. Speaker 400:17:25Got it. Okay. It's great guys. Thank you. Speaker 200:17:27Thanks. Operator00:17:29Thank you. The next question is coming from Alex Nowak from Craig Hallum Capital Group. Alex, your line is live. Speaker 500:17:37Hey, Chris. It's actually Chase on for Alex. Thanks for taking the question. Speaker 200:17:41I guess, first from us, Speaker 500:17:42a little bit more on the Qualitative side, since you've split the organization and the sales force into that new structure that you outlined pretty well on the Analyst Day, I guess any more kind of smaller kind of more specific kind of details that you can give us on any major wins or Kind of new progress that you've seen that maybe you were a little bit stagnant on before that this new structure has kind of allowed you to target your customer base in a different way? Speaker 200:18:09Yes. I'll take it and then I'll let Warren, who's here, who's leading that group follow-up. Look, I think at the end of Speaker 500:18:15the day so first of Speaker 200:18:16all, we don't Specific customer wins or losses, right? I mean, this is a highly competitive industry and we're pretty sensitive to putting that out there. But I will say and Warren maybe can Span, we talked about in the Q4 that for the first time in probably 18 months, we won more than we had lost. So we are winning more accounts than losing. And then I think Warren talked a little bit about that at Investor Day, but do you want to add any more color without specific accounts? Speaker 600:18:41Yes, I think that's spot on, Chris. We spoke about this, the commercial strategy at the Investor Day, which was protect, expand and win. And ultimately, that played out really well in quarter 1. Ultimately, we won more new customers than we lost. And specifically, we may have lost 7 and we won 28. Speaker 600:19:00So the net effect is positive there. And that's ultimately, As we start to use digital tools, particularly Salesforce and other AI enabled tools, we're able to gain And these are some of the results that we're starting to see. Speaker 200:19:16Yes. And I think a testament is look what the volume growth was. I mean, up 7%, well, north of 7%. So, I think you're getting both. Speaker 500:19:29Yes. That makes sense. And then last from us, we had a large lab here with an MRD acquisition with Haystack. I guess, now becoming kind of competition there and certainly they're going to bring a large non MRD menu as well. How do you think you'll compete there with them also being able to offer kind of a full service offering kind of like your value proposition? Speaker 200:19:56Yes. So a couple of things. I'm going to answer and then I'll let Vishal, who's on the line also. So look, at the end of the day, I mean, Quest was a big competitor already that offered heck of a lot of tests in oncology. And so we're competing against them every day. Speaker 200:20:08And look, I think that acquisition is great for the market. It's a $20,000,000,000 or going to be a $20,000,000,000 market that's less than 1% penetrated. So I think competition is great. That being said, Haystack is not even commercial yet. There's a long way to go before MRD is in the bag with Quest being sold. Speaker 200:20:27And I always joke that people don't die of indigestion, I mean, of starvation, they dive into digestion with acquisition. So they got to still look, I we're sticking to our plan. And I think, look, I applaud the acquisition. I think it was a good acquisition. Will be good for the market, but I wouldn't we're not that's not something that we're focusing on our own knitting versus worrying about them right now. Speaker 200:20:48You want to comment anymore, Vishal? Speaker 700:20:51No, I think you said it, Chris. I think it's overall good for the MRD market as a whole shows See that, and that's where the market and the clinical practice is moving to. Having said that, they're pre revenue right now and they have a long way to go. So we're Operator00:21:13The next question is coming from David Westenberg from Piper Sandler. Speaker 800:21:17Hi, thank you so much for taking the question and congrats on really a strong print here. Hello. So, I'm just going to get back to the gross margins. Now, the gross margins were way up sequentially. Mix is really good. Speaker 800:21:32I think historically, in 2019 ish, you were in the high 40s. Do you have higher confidence now that you can really get to that? Are you seeing that leverage in the GM, so we could see that maybe Get up into the 40s maybe faster than we had thought initially just given the really good sequential step up and returning to that? Speaker 300:21:55Yes. I think we said on Investor Day, we expect it to return to the company's historical margins by 2026. Obviously, Continuing to perform well and execute will give us more confidence of getting there over time. But I think again, similar to Q4, Q1 is just a good example of the company's ability to generate operating leverage on that revenue growth. And so I think adding growth We'll certainly, certainly happen we'll certainly help drive that. Speaker 300:22:25As you look at Q4 versus Q1, we did see as expected a in pharma and there's relatively more fixed costs in our pharma business than our clinical business. And so you did see clinical gross margins Up $3,600,000 and pharma down $5,600,000 but we were expecting that. So overall, it came in stronger than we were initially So I think clinical is really helping to drive that. And so I think the mix of the business in any particular quarter can have an impact. But overall, We are very focused on returning the company to profitability and producing free cash flow. Speaker 300:23:03And I think this is another good quarter And progress to get to that point. Speaker 900:23:09Got you. You have a Speaker 800:23:10lot of analysts. I think this is a short question here. Can you remind us where you're at? I think on the Analyst Dave, you said, you talked about sales force hires. And where are you at in those hires? Speaker 800:23:20And has this been hitting the P and L yet? Because again, you did get really good operating leverage. But so anyway, I'll just that quick reminder. Yes. Speaker 200:23:28I'll let Warren go into detail and if Vishal wants to comment at all on his, but I mean Vishal's is full With Farm and Rate, our much smaller sales forces, but you also want to give an update. Speaker 300:23:37Yes, I'll start just on the cost side. So you're not seeing much of a ramp yet in Sales and marketing expense, look, we also did some revisions in some of our comp plans as well. So I think there's a lot of factors in there. But I think I would expect to see sales And marketing ramp as the year progresses, as more of these reps come on, start being productive, having commission and salary costs. And so there was some in the quarter. Speaker 300:24:01It was offset by some other things in the quarter, but I would expect more to progress. And that is part of the investment we talked about Yes. And Investor Day for our guidance. You should expect that number to ramp throughout the year. Speaker 600:24:13Yes. So David, very similar. I think if you take what Jeff said from a cost I think the sales or revenue evolution is pretty self explanatory. We're rapidly bringing people on. I think we have 6 more positions to fall, which We'll be done by the end of this month and some of those were filled earlier in January. Speaker 600:24:32I'd say we're starting to get to productivity now And we really feel that we're in full stride as we get into H2. Speaker 200:24:41Those 6 are for your H1 hires than you've got Speaker 600:24:44The 6 of the H1 hires and then there's a Phase 2 in terms of further sales force expansion that we'll do in the latter part of this year. Thank Operator00:24:56you. The next question is coming from Dan Brennan from TD Cowen. Speaker 900:25:02Hey, Dan. Great. Thanks. Hey, Chris. How are you doing? Speaker 900:25:05Thanks for the questions here. Congrats on the quarter. Maybe starting off just on Innovada and kind of Radar. Just kind of remind us, so you're expecting decision this year, back half, Q3, Q4, Any way for us to think about timing there? And then I heard you say during the prepared remarks, you're expecting 2 more indications this year. Speaker 900:25:26I thought I don't know if the Investor Day said 3, but maybe just maybe a little more color on that front as well. Speaker 200:25:33Yes. I'll will let Vishal jump in, but I want to clarify. We submitted breast in Q1 and historically they take a 60 ish First pass review timeline. So we'll be in communication with them in Q2, Just so you know on that one. And maybe Vishal can even talk about how we're managing all of that around a MolDX and breaking up breast in a different Disease states, etcetera. Speaker 200:26:02Vishal, you want to take that? Speaker 700:26:03Yes, absolutely. So yes, as Chris mentioned, we submitted in Q1. We do Back to have that conversation with them in Q2 and early Q3. It all depends on the timelines from their side. But we do expect Two additional indications to go in this year and for a total of 3 for the year is what we had said. Speaker 900:26:25Got it. Okay. And then maybe just on NGS, I know you're not giving us too much color there, but just any way to think about the impact Or just qualitatively the impact, I think you talked about maybe 20% growth at the Investor Day. So and kind of what's the early traction on Neo comprehensive from customers that you Speaker 1000:26:42rolled it out with? Speaker 200:26:43Yes. I'll let both those guys take that. But look, remember that our thing was to be above 20%. So I can tell you that we were Well above 20% for the quarter. But do you guys want to give Speaker 600:26:57I think in terms of Neo comprehensive, we only launched the Product in mid March, and I'd say we met our expectations in the month of March, and that trend continues. Speaker 200:27:09Hey, Vishal, you got anything else? Speaker 700:27:11No, I think that's all right. I mean, we're on target to where we thought we would be. Speaker 900:27:17Got it. Okay. All right. I'll get back in the queue. Thank you. Operator00:27:23Thank you. And the next question is coming from Andrew Brackmann from William Blair. Speaker 1100:27:32Maybe on the pharma services revenue line, can you maybe peel back the onion there a little bit and just sort of talk about the makeup of that number? We sort of take this as to be a more healthy number, I guess, with more of those profitable projects coming through? Or is that Still, something that's sort of in flux and that should start to improve throughout the year? Thanks. Speaker 200:27:54Yes. Let me let Kind of Jeff and Vishal talk about it, but we don't disclose or break out the specifics in that format. I mean, we talk about informatics, But I think Jeff and Vishal can probably paint some color. Speaker 300:28:07Yes. So I'll start and I'll let Vishal jump in. So we said Q4 was pretty strong, And we had some big significant radar growth in Q4 and we had some pretty strong informatics growth. I would say, overall, all three had good growth, our legacy Pharma Informatics and in Nevada in the quarter. So I'd say, We're certainly on track to where we expected to be. Speaker 300:28:33We haven't gotten into the specifics, but I think we are set up pretty well as we look at the rest of the year. And Vishal, if you want to add anything else? Speaker 700:28:42No, I think you're right. I think as we look to Seasonal effect that always you see at the pharma business in general, Q1 has always been our lowest Speaker 1100:29:02Okay. I'll stick to 1. Thanks guys. Speaker 200:29:05Thank you. Operator00:29:07Thank you. And the next question is coming from David Delahunt From Goldman Sachs. Speaker 600:29:13Hey, David. Speaker 900:29:14Hey, guys. Congrats on the strong quarter. Any additional color on the drivers Of that increased volume that led to the beat? Speaker 200:29:26Yes, I mean, we kind of hit it. I mean, we really spent a lot of time. Look, I think we've talked about that we hired we started hiring 20 oncology reps In the second half of the year and then have been rapidly tried to expand that. We've been pretty open that we're going to get to 45 by the end of the year. I think we'll get 2 thirds of the way there in the first half. Speaker 200:29:50I think when you start to get new folks and to be fair, I would say a lion's share of that group is coming from The industry, so they have deep relationships and knowledge. I think they can make an impact relatively quickly. I mean, I think one of the things we've talked about this business that we like Is that there's you're not placing an analyzer in the hospital basement for 5 year contract, right? You can move business pretty quick. So I think, I'd say the expansion and the optimization definitely of the field. Speaker 200:30:17I mean, I would say that, Warren talked about this. I think our go to market strategy and the way that we think about winning accounts and doing bid process and Being more thoughtful in places where we maybe don't have a product category. So remember, we have over 6 Under test, I think and I use that a lot under the word optimization. I think what you're seeing is a lot of things around execution and that's Yes. Speaker 300:30:44And I would add just a couple of things, a couple of themes that we hit on, on Investor Day. 1 is a sense of urgency and 2 is Accountability and I think Warren and the leadership team have certainly brought that. So I just think it's focused on execution and its leadership and it's holding people accountable for results. Speaker 600:31:03And maybe just 2 other things that I'll add. Speaker 200:31:05I would say, I do a shout out to Melody too. I would say our turnaround time, no one's asked an ops question, but Melody is on the And we should talk about turnaround. I'm sorry, Warren. I didn't mean to interrupt, but you may have been throwing her No, that's exactly Speaker 100:31:17what I'm saying. Speaker 1200:31:18I want to just throw Speaker 600:31:18a minute and just say thanks. I think ultimately, it's much easier to strategy when your turnaround times are good and continue to improve and a number of our clients have recognized that. So that's positive And that's helped us also expand share of wallet, which is really the E and our protected fan win strategies. It's not only about retaining existing customers, winning new ones, It's selling more to existing customers and we've done that effectively and that's really supported by the improved turnaround times that Mary and the team from the upside are doing a great job on. Speaker 900:31:50Fantastic. Great work. Speaker 200:31:52Thanks. Thanks. Operator00:31:54Thank you. And the next question is coming from Tejas Savant From Morgan Stanley. Speaker 200:32:00Hey, DeJuan. Speaker 1200:32:02Hey, Chris. Good evening. Good start to the year, so congratulations. Just one on NeoComprehensive, perhaps to kick things off. I know you'd mentioned it's still early days in the launch, but perhaps Vishal can take this. Speaker 1200:32:17Any color you can share on the degree of switching you're seeing in those sort of oncology accounts from existing sort of users of other people's tests. And how many of those are essentially sort of first time, CGP users, at least so far, Vishal? Speaker 700:32:38So Tayah, I think it's still a little bit early. We launched this a year sorry, a month ago. So I think we're still going to look at that. I would say that right now where we thought we would be, we're well on track for that and meeting where we from a forecast perspective. I think it's still early days to see how much of it's coming from market share taking from other competitors and so on. Speaker 1200:32:59Got it. Okay, fair enough. And then on the pharma side of things, guys, I mean, any evolution in your thought process around just midcap biotech funding, Any sort of sample shipment delays or budget constraints that you're picking up on, especially at your smaller customers? Speaker 200:33:18Shaul, you want to take that? Speaker 700:33:20Yes, I can take that one too. So what we do see is that there is an impact We're seeing in some of our traditional modalities in general, but we still see very strong demand for our, What I call our high margin modalities like NGS, like radar and so on. So but we do see a little bit of impact, but we think that we can make it up on the other side. Speaker 200:33:42Got it. Thank you. Operator00:33:46Thank you. The next question is coming from Andrew Cooper from Raymond James. Speaker 200:33:51Hey, Andrew. Speaker 1300:33:53Hey, Chris. Hey, everybody. Thanks for the time and nice quarter. I guess I'll start with an ops question since nobody else has yet. We talked about it a decent amount at the Analyst Day, but when we think about that automation journey, the sort of lab optimization Spending in Houston, all of those moving parts that I think are so far you've managed well. Speaker 1300:34:13Just what inning do you feel like we're in? And Where are sort of the risk points versus the derisking gates that you'll be getting through that we can sort of try to track as you move from where you are to Ultimately, where you want to be to continue to be able to drive those margins better and better? Speaker 200:34:30I'll give the high level and then I'll let Melody give you more color. Look, I think we're still early. I would say, 2nd inning, I mean, I think, look, I think when we bought Innobada, they had pretty good innovate I mean, automation, we didn't have a lot of that. It's one of the Thanks, Melanie, spending time on. But Melanie, do you want to give some more color around what's going on? Speaker 1400:34:51Sure. So I would agree with Chris. We're maybe inning 2, inning 3 For this journey, automation, we have taken as Chris said, the Innovada line was fully automated, that remains fully automated. And so we'll replicate that in the Houston expansion as we go there. And then we're slowly starting to add automation to our other modalities. Speaker 1400:35:13And so we showed you some of that on Investor Day with the deep neural network AI that we're starting to use in our cytogenetics line. We're adding more automation in our molecular line. So that's beginning. We're taking good steps there. Yes, about some of the risk points. Speaker 1400:35:30Supply chain will, of Automation pieces, but because that rolls out relatively slowly, that's not going to be as much of a risk for us. Speaker 200:35:47Hey, Mel, do you want to also talk about your networking you're starting to think about and pull together with all the dry labs? Speaker 1400:35:53Absolutely. So, we are Scanning more and more of our images and our we're doing digital HMEs and uploading to the network so that we can Move our analysis away from the wet lab itself, the locations for the wet lab and the build out around that can be more expensive than if we are in Office space or less expensive real estate space where we can hold our analysts in those locations. And so by Digitizing our work, we're able to load into the network, do the analysis over the network, and then we're also gaining some advantage Speaker 700:36:37Thanks. Speaker 1300:36:38Great. That's super go ahead. Speaker 900:36:44Okay. If I can Speaker 1300:36:45just sneak One more and that was helpful. Speaker 900:36:46I guess you Speaker 200:36:47can. He didn't ask the question. You might as well. Thanks for giving us. Speaker 1300:36:52Just appreciate it. Just on kind of the OpEx side as well, when we think about this sort of transition, selling more into the oncology suite, Driving more of these sort of advanced diagnostics. When we think about the back end and billing and reimbursement, I think historically a lot more sort of hospital billing versus maybe where you end up. What's the spend? What's the lift that you need to do? Speaker 1300:37:14And where are you in kind of that process to continue to stay up to speed and keep up with hopefully the growing volumes that Maybe go a little bit more kind of the traditional payer route than what your historical business might have been. Speaker 300:37:28Yes. I think from the revenue cycle side, as part of our IT evaluation, we're clearly evaluating Our current revenue cycle platform and seeing how do we enhance that. So I do think That's probably more of a 2024 from a capital investment perspective, but we're certainly sizing that and looking at that for the back half of the year. But I think the infrastructure is in place, but I do think there are some technology investments that we can make that will help accelerate Revenue cycle and give us a little bit better visibility. But I think we have a good structure in place. Speaker 300:38:10I think some technology adds will help on that. And that will clearly be a focus as we go in the back half of the year looking at how do we optimize going forward in 2024 and beyond. Speaker 1500:38:22Great. Thanks Speaker 1300:38:23guys. I'll stop there. Thank Operator00:38:25you. The next question is coming from Mike Matson from Needham. Speaker 1000:38:29Hey Mike. Hey, guys. This is Joseph on for Mike. I think probably only one question maybe left to ask. Appreciate all the color you guys gave on the increases in revenue per test with revenue cycle management as well as just This higher price assays, NGS assays, but I didn't hear any you say anything around Maybe pruning of the test menu. Speaker 1000:39:00I believe maybe at the Investor Day or previously, there had been talk about maybe Taking out some of the lower priced tests or maybe tests that don't really see a large amount of volume aren't really ones that really move the needle. So I was curious about that if any work has been done on there. Speaker 300:39:20Yes. I think that's an ongoing effort. I'm not sure you'll see material impact AUP from that, but that is an ongoing effort that we're looking at and I think we'll continue to refine over time. Speaker 1000:39:33Okay. Okay. And then I guess maybe similar questions for Pharma Services though. In terms of shifting towards Trying to get to the earlier phases where work can, I guess, be completed, the throughput is higher? That's a similar thing that's just going to be an ongoing thing work over time? Speaker 300:39:53I think it's yes, I think we started certainly in the second half of twenty twenty two. I think that Continues and I think we've had a pretty good success there and clearly the focus is Near term revenue generation both and how we are compensating reps and even our whole approach. I think the whole Approach of really taking out bookings even from our earnings really says we're focused on clear revenue drivers that have better visibility on in the next couple of quarters versus over multi year periods. Speaker 1000:40:30Yes. Okay, absolutely. Thank you very much for taking our questions. Thank you. Speaker 200:40:34Thank you. Operator00:40:35The next question is coming from Derik De Bruin from Bank of America. Speaker 900:40:41Hey, Speaker 1600:40:42Derek. Hi, good afternoon. How are you? Good. So a couple of questions. Speaker 1600:40:48So you had a Looks like a 5% quarter on quarter increase in price. Is that sustainable that sort of run rate? And or is there anything unusual? Just basically thinking about How to look at pricing the rest of the year? And I guess when you Speaker 400:41:06sort of look at this, are you Speaker 1600:41:07getting Are you doing things at the pricing at your competitors' rates? Are you pricing at premium? Just sort of thinking about how to think about That four zero two number and how that moves up? Speaker 200:41:19Yes. Well, some of these obviously have set reimbursement, but not all that pause that process. So look, I think pricing is one of these levers That we significantly under manage as a company, whether it's standard price increase, whether it was chasing revenue cycle Management or improving our relationships with payers and getting a premium for the services and things. And so I do think it's sustainable. I don't know that I would say what the percentage was every quarter, but look, 8 quarters in a row, we've been doing it. Speaker 200:41:49I think especially When you look short term, when I think short term of 12, 18 months, our mix will continue to be lifted. We're a leader for sure on NGS and heme, but we're way Far behind on share from a solid, which is where the market's moving, which is would be probably our highest ASP. And so as we continue to grow our share of that Mark, it is going to also help us. So I think there's a lot of things going on. And so I will say internally, it's our goal to do that. Speaker 200:42:18I don't think we'd go out and disclose how much, I would say, yes. I mean, it's a Speaker 300:42:21Yes, I think we have room. I wouldn't extrapolate 1 quarter for any type of trending. It was a strong it was definitely a strong quarter. But we do expect the levers that we are pulling, which are higher intensity tests, revenue cycle improvements, As well as pricing benefits, all are going to have a positive impact over time, but I wouldn't try to guide you to a specific quarterly No impact, but in Q1, it was definitely a strong quarter. Speaker 1600:42:49Got it. And that sort of leads to my next question on just how to sort of think about the 2nd quarter. I Q1 came in so strong. And as you pointed out, it's usually your seasonally weakest quarter. Just some thought The quarter to quarter increase there, not sure not quite sure what to make of the modeling at this point. Speaker 1600:43:09Just is there any general thoughts on it? I mean, I don't know if you would model what you've historically seen in terms of jumping between Q1 and Q2, just any sort of like thoughts? Speaker 300:43:20Yes. I think we said in Investor Day that we expected a progression throughout the year From on a quarter over quarter basis, so I would kind of just stick with that as you think about the quarters versus the prior year quarters, As you're thinking about revenue for the rest of the year. Speaker 200:43:36Yes. But I would definitely I said that in the first question. Like, look, I think we're getting momentum from the initiatives. And Enough that we significantly raised guide. So I think we feel good about how things will continue. Speaker 1600:43:52Got it. Thank you very much. Speaker 200:43:53Thank you. Operator00:43:55Thank you. The next question is coming from Mark Massaro from BTIG. Speaker 200:44:06Hey, Mark. Mark, you there? Yes. Speaker 1500:44:14Hey, guys. Thanks for taking the question. Can you hear me, sir? Speaker 200:44:18Yes, we can. We got you. Speaker 1500:44:20Okay. Yes, I was on mute. So you haven't Not really, you guys haven't had a question on radar yet. So I recognize that you're not quite 2 months launched, but you're coming up on 2 months. The market leaders seem to have some degree of entrenchment in CRC. Speaker 1500:44:41You guys are launched in head and neck and lung As well as breast and CRC, I guess recognizing that it's really early, are there any takeaways out of the first Almost 2 months of launch in terms of volumes. And I'm curious if that strong volume growth that you had in Q1 included Some volumes from radar clinically? Speaker 200:45:04Yes, really wouldn't have had any revenue because Yes, on the clinical side, because we are just sending kits out late. So by the time a kit gets out, turns gets in, we run the test like we wouldn't have had any revenue. Vishal, you want to talk about how it's going and Warren, you want to jump into? Speaker 700:45:22Yes. So I would as Chris mentioned, Q1 because of The how long it takes to complete the testing and so on, you wouldn't have seen that in Q1. But I would say that where we feel that we have our strengths in breast cancer, In head and neck cancer, we're starting to see good progress there in line with where we thought we would be. So I think that's really positive. And The market uptake, especially because of this high sensitivity of the RADAR assay, really is showing in those type of cancers. Speaker 700:45:53I would also say that we're getting good interest from people that are starting to use it that want to see applications in other cancers where they feel that sensitivity matters. So we're also exploring those type of opportunities at the same time, Mark. Speaker 1500:46:07Okay. And then, I do want to press into volumes again. We haven't seen volume growth like this in approximately 2 or 3 years. So I think we could investors could probably benefit from I know you talked about NGS was well above 20%. What are you seeing in terms of end market demand? Speaker 1500:46:29How much of the volume growth came from the hiring of new reps? And any commentary about end markets like in fish and flow? Speaker 200:46:36Yes. Look, I would say in the quarter, I would say really every modality Grew above where we have been growing that business over the last 18 months. And I think a lot of that was back to this thing of winning a lot more accounts. And Look, I think the obvious one everybody wants to focus on is NGS because it's kind of out there as being talked about. But we're seeing really for example, heme, NGS is a business that's not supposedly growing. Speaker 200:47:06And I will tell you, our business grew significantly because we're the market share leader. We were moving share. That's a new rep. I would say, Warren talks a lot about expanding the wallet or winning. I would say that, look, we know where the industry is On what the number of reps that we have can do compared to a rep group that calls out with on oncologists and pathologists because it is such a different call point. Speaker 1500:47:44Excellent. Congrats on the quarter. Speaker 200:47:47Thanks. Thank you. Operator00:47:49And the next question is coming from Mason Rico from Stephens. Mason, you are now live. Speaker 1700:47:56Hey, this is Jacob Kramble on for Mason. Thanks for taking our questions. Congrats on a really strong quarter. A lot has already been covered here. So maybe just a quick one on your revenue cycle management initiatives. Speaker 1700:48:07And this might have already been Touched on a little bit earlier, but you guys have talked about a number of initiatives on this front at your most recent Analyst Day. So just wondering if you can maybe give us a further update on Speaker 300:48:22Yes. We've done a fair amount of work On getting more billing information upfront in the billing process, when we get a test Requisition and moving more to more automated ordering of our tests. So those we've made good progress on both of those in the quarter. I would say we've also made progress just on getting paid for work that we're doing. So I think there's a lot of focus on just looking at The test we've done, how we've been paid historically, particular payers or patients and what we need to do to get Actually get paid and we've seen some improvement and some lift in our revenue as a result of that. Speaker 300:49:03We're again, we've already had the test volume, we already had the cost, But we're having more success in actually getting paid for the work done. So both of those are probably 2 of the bigger areas that we've made progress on and I think are still See a lot of opportunity to improve as we go throughout the year. Speaker 200:49:21All right, got it. I'll leave it at one. Thanks. Thank you. Operator00:49:26Thank you. And there were no other questions in queue at this time. I would now like to hand the call back to Chris Smith for closing remarks. Speaker 200:49:33All right. Thanks, Paul. And everyone on the call, thanks for catching up this afternoon. It was great to be able to share the quarter with you, then also go through some questions and we'll look forward to seeing you on the market. Be well. Speaker 200:49:45Take care. Bye. Operator00:49:48Thank you. This does conclude today's conference. You may disconnect at this time and have a wonderful day. 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