MDxHealth Stock

Hello, and welcome, everyone joining today's MDxHealth Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this call is being recorded, and we are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to John Fraunces with LifeSci Advisors. Please go ahead.

Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F.

I'll now turn the call over to Michael McGarrity, Chief Executive Officer.

Thanks, John, and thank you all for joining us for our second quarter 2026 earnings conference call. With me today is Ron Kalfus, Interim Chief Financial Officer. Q2 was a pivotal quarter for MDxHealth. Following in the unanticipated reimbursement developments related to our resolve test in April, our Q2 results reflect the strength of our core business, which was precisely what we committed to deliver with our sales force focused solely on this significant market opportunity.

More specifically, we communicated that we expected sequential revenue acceleration from Q1 to Q2. We generated a 14% sequential revenue increase for $3.3 million, representing the largest quarter-over-quarter revenue acceleration in our company's history. We also anticipated a recovery in our tissue-based business following the expected impact in Q4 and Q1, post integration and sales force restructuring from the ExoDx acquisition. We delivered that recovery with the sequential increase of greater than 1,400 tissue-based tests.

We aggressively set a goal to transition all of our resolve customers by the end of Q2, an objective that we achieved while also building deep credibility with our customer base through the unwavering dedication and support of our sales and client services teams. Based on our revenue growth expectations, coupled with exceptional operating discipline, we are now firmly on track to return to positive adjusted EBITDA as we exit 2026.

Following the discontinuation of Resolve UTI testing, we completed the cessation of our Plano, Texas lab operations and eliminated the $10.4 million contingent liability to Novitas from our corporate structure as a discontinued operation through an organized wind down of that independently operated entity.

And finally, we strengthened our balance sheet and cash position through a registered direct financing that generated $20 million in proceeds priced at the market with no discount or warrant structure. I want to express my sincere gratitude to our entire organization for their professionalism and perseverance over these challenging 90 days. In my experience, you were defined not by what happens to you, but by how you respond. Our entire team from sales and client services, the revenue cycle management and laboratory operations, demonstrated incredible character professionalism and commitment to our customers and to each other.

I am immensely proud to stand alongside such a resilient group of professionals who stepped up when it mattered most. I would also like to specifically thank our Plano, Texas team for their unwavering commitment to serving our customers through their final day of operations on June 30. Their professionalism and dedication to our patients was extraordinary, and our entire organization owes them a debt of gratitude for their integrity and service. This company did not suddenly forget how to operate and execute. While our operational strength was clearly on display in Q2, we are confident that our growth trajectory will return to the performance we have consistently delivered over the last number of years. as we move through the remainder of 2026 and beyond.

This confidence is rooted in our high-growth market opportunity, our strong competitive position and our unparalleled suite of clinically actionable diagnostics, supporting clinicians and patients across the entire prostate cancer continuum. Our foundational commitment to focus execution and growth has never been more evident than during our navigation of Q2, and we look forward to continuing that momentum.

Before turning the call over to Ron, I want to thank our shareholders who stepped up to support our mission as well as our customers and stakeholders for their continued trust and confidence in MDxHealth. We are incredibly proud of our team's commitment, not only to our operational and financial performance, but to what matters most, the patient and family on the other side of every single sample we receive. I will follow up with some closing comments and view forward. But first, let me turn the call over to Ron to walk through our second quarter financial results. Ron?

Thank you, Mike. Before I dive into the financial results, I want to briefly frame our Q2 presentation. As detailed in our press release, we have successfully completed the wind down of our Resolve UTI business in Q2 with the permanent cessation of operations of our Delta Laboratory subsidiary and its Plano, Texas laboratory prior to June 30, 2026. Having met the requisite accounting criteria, the Resolve business is now formally classified as a discontinued operation.

As such, all current and prior year financial metrics reflect only our continuing core operations with the historical results of the result business fully excluded. Our revenue for the second quarter ended June 30, 2026 was $27.2 million, an increase of 16% over the second quarter of 2025. Revenue in the second quarter of 2026 was comprised of 73% from tissue-based tests compared to 96% for the same period last year.

Moving below the revenue line, our gross profit for the quarter was $17.9 million, an increase of 11% as compared to $16.1 million for the second quarter of 2025. Gross margins were 65.7% compared to 68.6% for Q2 '25, a decrease of 2.9 percentage points, primarily attributed to tissue versus liquid mix. Our operating loss for the quarter increased to $5.1 million compared to $1.5 million for the second quarter of 2025, primarily driven by increases in head count and other operating expenses related to the ExoDx acquisition, which were not present at this time last year.

Our net loss increased 36% to $9.5 million compared to $7 million for the prior year, primarily driven by operating expenses related to the ExoDX acquisition. We are confident that our guidance and associated revenue growth will absorb this increase in acquired operating expenses and return to our trend of adjusted EBITDA profitability as we exit this year. Adjusted EBITDA for the second quarter was a negative $2.3 million compared to a positive $1.1 million for the second quarter of 2025.

Note that a reconciliation of IFRS to non-IFRS financial measures has been provided in the tables included in this press release. Finally, cash and cash equivalents as of June 30, 2026, totaled $19.2 million. In addition, on August 11, we executed a $20 million registered direct placement with existing shareholders. After taking this transaction into account, our pro forma cash balance as of June 30, 2026, would have been $39.2 million.

This concludes my overview of the financial results, and I will now turn the call back to Mike.

Thanks, Ron. When speaking with stakeholders following our Q1 results, I noted that while the decision to discontinue Resolve was unfortunate, I believe it would likely end up being a blessing in disguise, one that would manifest as an absolute singular focus on the vertical we have built in the urology market in our prostate cancer franchise, in particular. Our Q2 performance represents the first clear evidence of that promise and potential being realized.

From a focus perspective, the peer-reviewed publication of data from our Oxford Pro study is already being recognized and embraced by our urology customers. Furthermore, we see clear visibility into the potential of our landmark Oxford PROTECT study to transform the market landscape, particularly for patients in the active surveillance setting. Our vision is to establish GPS as the only diagnostic test with NCCN Level 1 evidence in this critical patient population, which represents the majority of patients in the prostate cancer diagnostic pathway.

Additionally, we continue to advance our AI initiatives, which will deliver meaningful incremental value to both new and existing customers across our urology and pathology stakeholders. Over the past 2 years, our efforts to establish and expand our reach with pathology partners alongside the urologists they serve have paid significant dividends. We are confident that both confirmed and GPS will continue to resonate strongly with this key constituency through their unique clinical features, benefits and supporting data.

All of this progress in Q2 reinforces our commitment to and confidence in meeting or exceeding our full year guidance of $110 million to $115 million in revenue while returning to adjusted EBITDA profitability as we exit this year. Our culture of quality first and customers always continues to drive our growing reputation for excellence across the urology market. We remain steadfast in our commitment to delivering growth and value, cementing MDxHealth position as the leading precision diagnostics company focused exclusively on our high-growth urology market opportunity.

As always, we carry a profound responsibility to create long-term value for all of our stakeholders, including patients, clinicians, payers and shareholders. Thank you for your continued interest in and support of MDxHealth.

I will now turn the call back over to the operator to open the line for questions.

[Operator Instructions]

And we'll take our first question from Thomas Flaten with Lake Street.

Mike and Ron, congrats on a nice rebound quarter. Two questions from me. Given the sequential increase on the tissue side, do you think we can conclude that the challenges were internal rather than there being any competitive dynamics that were impacting volumes previously?

Yes, Thomas. I think we we were ahead of that a little bit. I kind of signaled we expected Q4 and Q1 to be a little choppy, really a function of the restructuring of the sales organization, right? We had a territory reorganization and then cross training of the new reps, remapping of the customer base of the combined businesses and that's really what we saw. So we didn't see it and hopefully, Q2 is the beginning of evidence of that, that it would disrupt our position in the market, just more create a little diversion of the focus for that quarter or 2, and we're confident the Q2 signals that we're back to the full sales force focused on our core menu.

Excellent. And then as we kind of go from first half to second half towards your guidance range, do you expect the revenue progression to be pretty linear? Or should we expect some type of fluctuation between Q3 and Q4?

Yes. Thomas, I would say, generally linear, Q3 is always a little bit of a wildcard with some seasonality just based on patients and clinicians flow through our urology customer base. So that being the only potential factor to affect we would expect acceleration in Q3 and Q4 in linear-ish.

We'll take our next question from Dan Brennan with TD Cowen.

Maybe just the first one, so that it's nice to hear that liability. I think that was there from the Texas Medicare case is kind of off the books now, I guess, because you closed the lab. Just wanted to confirm, I guess, could you guys discuss that at 1Q, like this ability to kind of remove that given these actions? Because it sounds like it's a nice -- kind of a nice removal on your part.

Yes, Dan, thanks. I didn't want to get ahead of that. There was obviously a lot of work to occur with all of our outside counsels and advisers on setting that up and consent from our our lending partner, but it came together as we anticipated. We believe the structure, the way we set that entity up allowed for that. We just wanted to make sure that we had it all tight, and we're able to close that up here for this communication. So we believe that is a significant derisking element to our business as we go forward.

Good enough. And then the raise, obviously, getting it done kind of at the market was attractive. Just wondering, can you speak to a little bit how that sets you up? Obviously, your EBITDA positive exiting the year, which is nice to hear. You have this $20 million of additional capital. As we look ahead, I know you've got the debt and you have some payments from Exact still out in the next couple of years. Just how do we think about the need for further capital versus kind of internally generated cash flow?

Yes. I think it's -- I think your last statement is key, right? So we anticipate that based on the scale of our business and leverage we have in the P&L. One of the key execution items we focused on is significant and consistent top line growth while holding our OpEx really straight away for the past 3 years. We expect both of those to continue. And that leverage generates meaningful progress in the business beginning to fund itself from an operating basis. So we're confident that, that gives us pretty strong leverage as we go forward.

This capital, our balance sheet position, obviously provides significant runway for the business. And we've demonstrated, I think, with our partner, Exact, Abbott, flexibility on that. So all those options remain in front of us. But the 2 key points and also the equity option on that, they are stakeholders in the company as well. So we're really counting on the business progress growth continuing to really begins to fund some of those applications. But we have clear runway through that period right now.

We'll take our next question from Bill Bonello with Craig-Hallum.

I want to circle back on a couple of the topics that have been talked about, I guess, first, again, on issue. So it's great to see the sequential increase, but it looks like volume is still down year-over-year basis, competitors still growing in the mid-teens. You did have 1 competitor talk about weakness in the low-risk segment of the market. However, I guess I'm just trying to get a sense of if things are sort of back to functioning on the sales force front without sort of distraction, why wouldn't we think of that being a business that should be growing faster year-over-year. And I know you talked about acceleration, but maybe give us some sense of what do you think the potential is for that business and a more normalized year-over-year growth?

Yes, Bill, I absolutely get the question. I think the risk of pointing to a comp, Q2 of last year was our highest tissue-based quarter. But I don't want to lean too much on that. I think one other note of Q2 when I commented with Thomas on tissue in Q4 and Q1. Q2, one of the things that I was -- I don't want to say concerned about, but required a lot of focus was our sales organization, also in a 6-week period on the back half -- in the back half of the quarter tend to focus on transitioning all of our resolve customers.

And while we didn't disclose the number that -- there was hundreds of customers and thousands of urologists that were using that test. So that lift was significant, probably equal to or more than the restructuring of the sales organization based on the time, and they completed that with all of our customers being successfully transitioned to their acceptance while driving that sequential acceleration. And I get at the flat year-over-year. We're not celebrating that on a go-forward basis. But our guidance as it's set up requires a return to year-over-year growth that we were seeing prior to this.

Our current guide at $110 million to $115 million contemplates 20% to 26% growth, which would suggest that if you look at our 2026 for tissue by quarters, we'd be down 12%, flat and then up accelerated, up accelerated. So I guess, hopefully, that's a fair answer that we expect as we post and discuss Q3 and post and discuss Q4. We would agree, we do think our position in that lower risk category, the active surveillance population we referenced is really gaining strength, and we'll continue to count on that. That's what our sales force will be focused on.

But I give a lot of credit to the team for doing 2 things at once, right, driving the recovery in the business and taking care of all those customers. And it's important to note, virtually all of those resolve customers are prostate cancer customers, so it requires a real focus and goodwill working with our customers to obviously not upset our base, and we think we successfully achieved that.

That's helpful. And just to be crystal clear, were you -- because as we thought through the implications for you and low risk, we sort of could have envisioned 1 of 2 scenarios. One, you're seeing similar, maybe macro level decline in utilization or two, you're taking share. It sounds like from your answer, you're not necessarily seeing any kind of headwind in terms of the utilization? Is that fair? Or I'm putting words in your mouth?

No, I think that's fair. When we refer to our growth on the tissue side, particularly with GPS, I often reference 2 drivers of growth. One is market conversion. In other words, still build, as you know, a significant part of that market opportunity is there for urologists that do not currently use biomarker testing in the active surveillance population and share. I think our growth trajectory over the past couple of years has been driven by both, and we expect that to continue. So it's kind of to -- comparing to the 2 competitors in that space and how they report. It's a combination of are we taking share from them or are we converting the market. And I think the PROMPT data today and the PROTECT data ultimately really help with both, but particularly on the conversion side, hopefully, that holds together for you. But that's an important point that we see is the opportunity.

That's super helpful. And then just one last one. Is it possible to give us any sense of what the liquid volume growth looks like on a pro forma basis that we have some sense of what the underlying because obviously, big boost from the acquisition, but so we have some sense of what the underlying growth is.

I'm not sure -- yes, go ahead.

Bill, I don't think we can because pro forma would be comparing Exo to Select, but we stopped selling Select. So we can't really compare one to the other. It's not like the...

I was trying to think of Exo last year versus Exo this year.

I see. I see. Yes, I get it now. Yes, we're not doing that. It wasn't our as reported numbers, but we've seen -- we're confident that we'll be continuing to drive growth into the Exo product line. And really, we're -- again, with the integration, we're a couple of quarters in, the majority of the Exo business that began to be covered by us, was covered by legacy MDxHealth reps. And so we're confident that this is really the quarter where we begin to see that in Q4 will be the first where we have actual year-over-year comps for a quarter on Exo volume.

We will take our next question from Mark Massaro with BTIG U.S. Bank.

Since we are in the month of August, and we're tidying up our model. I was wondering if you could react to your confidence in perhaps growing 20% in 2027. And if you could just walk us through some of the puts and takes as to how you're thinking about the next full year.

Sure, Mark. Probably premature to provide visibility to guidance for 2027. But I get the question. We would expect -- we think that there's significant opportunity for growth with the Exo business as we go forward. And then on the tissue side, I'll provide more detail around our AI initiative there as well, which obviously would drive largely GPS. But we're very, very confident that that can and will begin to contribute in 2027.

And then the third arm of that would be the PROMPT data in the active surveillance population. When you look at the data from that peer-reviewed publication, we expected to mirror what will come out of the Landmark PROTECT. So I think our urologists today are noting that. That, coupled with the AI initiatives we have gone that we would expect to be supportive as we come out of this year and the next. We think we'll have a basis to provide good growth trajectory, '27 and beyond.

That's super helpful. I know -- congrats on the [indiscernible], I guess, as Dan mentioned, you do have some puts and takes with the balance sheet. But I wanted to get a sense for -- in recent years, you've brought in some assets and now you've divested some assets. How are you thinking about the portfolio going forward? I know you're talking about some internal development with the $20 million of cash coming in, how are you thinking about exploring potential tuck-ins? I know in the past, you've been able to bolt on things that really rational and reasonable valuation. So I'm just curious how you're thinking about the potential for an organic growth from here.

Yes. I guess I would answer that 2 ways. One, per your previous question and hopefully, my answer, we're very positive and confident on our current market opportunity. We believe it can support our growth for the foreseeable future based on our initiatives, our discipline on the operating side and our sales force execution. But that said, we're a growth company. And I think I've shared with you and everybody that we run a growth strategy process here. We were always looking out. I would say that, that flipped significantly where I think -- and please take this the right way. It's not meant to be self-serving, but anybody who's looking for partner or opportunity or channel or infrastructure into the urology vertical we're an obvious first stop.

So I want to be careful here. I think you and I discussed don't get too far ahead with the potential opportunities for growth, but we'll be very disciplined as we have in the past. And for right now, in the near term, for sure, we are focused on execution of the opportunity we have in front of us in clearing what I said this resolved development was, was probably a 2 to 3 quarter setback from our previous trajectory. We've got 1 quarter posted. We look forward to posting Q3 and Q4. And then I think 2027 and beyond comes more clear, and then we can revisit how we think about growth there. Definitely, opportunities there. We just want to be disciplined.

That makes perfect sense. If I can squeeze one more in. I wanted to ask some of the other lab testing companies have seen benefits from revenue cycle management initiatives, collecting claims from prior periods. And other companies have been sort of winning some additional commercial payer coverage and the like. I know there's a lot of focus on volume growth, but I just wanted to get a sense for is there any juice to squeeze on the ASP side?

Well, as I think you know, but just to be clear, our projections, the way we build our model is based on our expectation of unit growth. But we view our market access managed care team and our RCM team as productivity engines for the business as well. So while I'm not guiding to pick up there, I think we've seen stability in our ASPs. And I guess for -- based on some of the dynamics in the reimbursement landscape across the industry unrelated to Resolve, but just in general, we're confident that we've got good discipline there. And yes, I mean we consistently -- the data helps, Mark, as you know, right?

So I think when you look at some of the initiatives that we have even our AI initiatives. And there's some opportunity there from both the PROMPT, PROTECT as well as the way we'll end up positioning our AI to support that aspect of our business, but nothing to project to right now.

[Operator Instructions]

We'll move next to Matt [indiscernible] with William Blair.

Mike, you referenced last quarter and this quarter, the notion is sort of uplifting in the skies. And you've also last quarter made quite a bit of progress on the Exo integration. Certainly, the sequential improvement in revenue maybe is the obvious KPI that would be a marked from that. But just curious, in terms of other internal KPIs, whether it's sales force productivity, account touch point, utilization, anything else that you're seeing kind of underneath the hood that suggest to you those things are moving in the right direction and perhaps that has given you additional confidence on the ramp at the back half of the year?

Yes, Matt, I think I don't want to -- I think there's nothing we don't metric and measure here with regard to the way our business builds our opportunity, and I don't want to disclose all of those, but we look at everything from the way our physicians adopt our menu with the goal of selling our full pathway solution to the way they adopt within a large [indiscernible]. In other words, you get a few of them to buy into our pathway in a reliable way, where it's -- internally, we call it compliance to our pathway. And then the other component to it is what I noted in my prepared comments, which is the influence and impact of pathology, which really has made a difference.

There's -- I'll just be brief here. But there's a couple of features of GPS in particular that really resonate with pathology, right? It requires significantly less tissue than the 2 competing tests. And once pathology understands the value of confirmed that it's not proving the pathology read was wrong, it's the limitations of biopsies. So all those things work with what we track to say, yes, we're getting pickup here. It's sustainable, it's sticky, and it helps actually create the model for our sales organization, our medical science liaison team. We have pathology supporting our resources that all work together to give us the data that suggests it really helps us build our model and definitely our forecast as we go through this year.

Okay. And then just on PROTECT, I -- just sort of the way you described it today, the notion of clear visibility into that. Just wondering if there's anything that you're seeing is giving you more confidence. And I think that is reading out early next year. But I guess maybe just confirm that, that's still the time line and kind of what you anticipate the response might be from the physician community once you get that out there?

Yes. So I think I've hesitated to give time lines there. But what I would say is we are in our clinical scientific affairs team works directly with Oxford. I mean we have consistent regular updates with them. They're almost a project management team, coupled with our CSA and project management teams working in collaboration. So it gives us confidence every every month that we're making progress there. It's difficult to handicap the timing of the readout. And then the secondary benefit would be the guideline work that we'll do on the other side of that.

So based on our KOL network that, that group has established, are somewhat influencer reach into the NCCN and the reputation and say of Dr. [ Handy ] and the Oxford team here that gives us our confidence. Each quarter, I'll provide a better visibility as to how we think that comes timing-wise. But I think the last comment I'll make on that is that the PROMPT -- getting the PROMPT published in a peer-reviewed manner does provide really good foundational view of -- this is what we expected. This is what they somewhat mandated that we do the PROMPT first before they turn on the PROTECT cohort, which is the most valuable one in the world.

In hindsight, that was the right thing to do because it gives us confidence and confidence that GPS is what was and is the right test to prove that out.

And it does appear that there are no further questions at this time. Thank you. This brings us to the end of today's meeting. We appreciate your time and participation, and you may now disconnect.

Good afternoon, everyone, and welcome to today's MDxHealth First Quarter 2026 Earnings Conference Call. [Operator Instructions]

Please note, today's call is being recorded, and it is now my pleasure to turn the meeting over to Mr. John Francis. Please go ahead, sir.

Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F.

I'll now turn the call over to Michael McGarrity, Chief Executive Officer.

Thanks, John, and thank you all for joining us for our first quarter 2026 earnings conference call. With me today is Ron Kalfus, Interim Chief Financial Officer.

Since I joined MDxHealth, we have been very consistent in our message and our mission. We are driven by 3 core operating principles: focus; execution; and growth. And while our commitment to those principles remains absolute, we also carry a great responsibility to our patients, our customers and our stakeholders to make strategic decisions that are rooted in transparency and operating discipline.

Our Q1 results, our recent developments and the disclosures we issued today reflect a number of decisions driven by that exact responsibility. Over the past few years, our aggressive growth strategy and commercial execution have positioned MDxHealth as the leader in precision diagnostics focused specifically in urology. This strategy transformed our company from $11 million in revenue in 2019 to $108 million in 2025. We took gross margins from the 20s to the mid-60s, and we reached adjusted EBITDA profitability last year prior to our acquisition of the ExoDx business.

However, as we prioritize the ongoing integration of ExoDx and the growth of our core prostate cancer business, we have made the strategic decision to discontinue our Resolve UTI offering and to cease operations at our laboratory facility in Plano, Texas. This was a carefully considered decision. The Resolve test was uniquely designed for our urology customer base to aid in the rapid diagnosis and treatment of patients presenting with serial, complex multi-organism infections.

Despite the urgent clinical need and the undeniable medical necessity of this test to the urologists to order it, the increasingly uncertain reimbursement landscape has made the continued operation of this business line unsustainable. Specifically, an unexplained recent policy reversal by our Texas Labs Medicare administrator, Novitas, has created a level of payer uncertainty that we are simply no longer willing to accept. In connection with this, we recently received a communication from Novitas seeking up to $10.4 million in recruitments of historical Resolve testing claims. We believe this action by Novitas is without merit, and we are vigorously defending our position through the formal Medicare appeals process.

We remain fully confident in our appellate strategy and in the clinical validity of our testing services. While stepping away from Resolve is unfortunate for the thousands of patients who have benefited from the test, we view this proactive exit as a powerful catalyst for our company.

First and foremost, it allows us to focus our capital and operational excellence entirely on our prostate cancer precision diagnostics, where we drive the most scalable value. By stepping away from the reimbursement volatility of Resolve, our entire sales organization is now able to focus 100% on our core prostate cancer menu, Confirm, GPS and ExoDx. It is important to highlight that we have already completed the Exo-driven strategic mapping and cross-training of our expanded sales force in Q1.

Furthermore, we successfully met our internal goal of transitioning our SelectMDx customers to Exo, resulting in accelerating operating efficiencies as we no longer process select samples. With our sales force fully armed and aligned, we are cementing our position as the growth vertical in urology, offering an unmatched suite of precision diagnostics, addressing every single point in the prostate cancer pathway.

An additional value driver of this refocus is our ability to catalyze our commitment to leveraging artificial intelligence. Earlier this year, we initiated an AI-dedicated strategic initiative to build out an AI data platform across the company. With the hundreds of thousands of unique biopsy tissue specimens we receive, our goal is to leverage AI to advance operating efficiency, maximize clinical value and optimize our customer experience. In fact, we are seeing evidence of this with our landmark PROTECT trial in collaboration with the University of Oxford, where the study protocol now includes AI-enhanced endpoints targeted to improve the prognostic value of our GPS test.

Furthermore, we have initiated a collaboration with a customer-facing digital innovation company to develop AI-enhanced offerings that build on the evidence-based excellence of our tissue tests. We are incredibly proud of our team's commitment to not only the financials, but to what really matters, the patient and family on the other side of every sample we receive.

I will follow up with some closing comments and our updated view forward. But first, let me turn the call over to Ron to walk through our first quarter financial results. Ron?

Thank you, Mike. Before I dive into the financial results, I want to briefly frame our Q1 presentation. Because our Board's strategic decision to exit the Resolve mdx business occurred in April, the financial results of the Plano Laboratory and Resolve business remain embedded within our as reported continuing operations for the first quarter. However, to provide investors with a clear and transparent view of our core business trajectory moving forward, we have provided pro forma as adjusted tables in our earnings release. These tables entirely back out the revenue and direct operating expenses of the Resolve business. To help you model the ongoing business, I will provide the statutory results today and compare them directly to these pro forma metrics of our continuing prostate cancer operations.

Our as reported revenue for the first quarter ended March 31, 2026, was $27.4 million. However, on a pro forma basis, excluding the Resolve business entirely, revenues for our core prostate cancer operations increased by 11% to $23.9 million, demonstrating the continued commercial execution of our integrated sales team.

Moving below the revenue line, our statutory as reported gross profit was $16.6 million. When we back out the Resolve business, our pro forma gross profit for the quarter was $15 million, yielding a pro forma gross margin of 62.9% compared to 68% for Q1 2025, with the difference primarily related to tissue versus liquid mix.

Our as reported operating expenses for the quarter were $23.9 million, resulting in an as reported operating loss of $7.3 million. On a pro forma basis, excluding the direct operating expenses of Resolve, our pro forma operating expenses were $22.9 million, resulting in a pro forma operating loss of $7.9 million compared to a pro forma operating loss of $4.7 million for the prior year, primarily related to the addition of the ExoDx business.

Our statutory as reported net loss was $8.9 million. Excluding Resolve, our pro forma net loss was $9.4 million compared to a pro forma net loss of $9.3 million for Q1 of last year. Once again, I'd like to direct investors to the tables at the back of today's press release where we have provided a detailed columnary reconciliation of our statutory IFRS results for the pro forma adjustments.

Finally, our balance sheet remained solid for the quarter with cash and cash equivalents as of March 31, 2026, totaling $43.2 million. In addition, on April 15, we made the 2025 earn-out payment to Exact Sciences in the amount of $15 million. After taking into account this earn-out payment, our pro forma cash as of March 31, 2026, would have been $28.2 million.

This concludes my overview of the financial results, and I will now turn the call back to Mike.

Thanks, Ron. As we look forward, we believe that the near-term impact of our strategic exit from Resolve will ultimately augment our ability to drive sustainable, highly profitable growth across our core prostate cancer menu. By streamlining our operations and removing the reimbursement noise associated with the UTI business, we are effectively resetting our growth trajectory. Today, we are establishing updated 2026 revenue guidance for our core cancer business, excluding Resolve, of $110 million to $115 million. This represents a robust 20% to 26% year-over-year growth rate for our core cancer business.

Our culture of quality first and customer always will ensure our growing reputation for excellence in the urology market. We will continue to strive to deliver on our commitments of growth and value, positioning MDxHealth as the leading precision diagnostics company focused solely on the high-growth urology space. As always, we carry a great deal of responsibility to provide value to all of our stakeholders, including our patients, our clinicians, our payers and our shareholders. Thank you for your continued interest in and support of MDxHealth.

Now I'll turn the call back to the operator for questions.

[Operator Instructions] We'll go first this afternoon to Dan Brennan with TD Cowen.

Maybe just starting on the Novitas issue. I guess you guys cited $10.4 million related to retrospective review of certain historical Resolve mdx claims. And I know you're going to vigorously defend it. But can you -- any other color you can provide on what the issue is there? And given the cash balance, like how do we think about the $10.4 million and just the cushion you guys think you have on that? And anything on timing, how this will play out?

Yes, Dan, we anticipate this will not be resolved or adjudicated for a significant period of time, unless it's immediately in our favor. And we feel like that's a high likelihood. We -- This is a very recent development that we're communicating. So we have no sense of our multiple initial replies. So it's difficult to bracket the time line, but likely well beyond the period of time that we're focused on here between now and the end of the year. And I would say that although we don't anticipate any liability or recoupment, if there were any minimal, it would be amortized over a 5-year period. But I only share that based on our understanding. We don't anticipate -- we'd anticipate a quick positive resolution or a longer-term adjudication in our favor.

Got it. And Mike, is there any -- just maybe one more quick one there. Is there any issues or any feedback you've had throughout the process of billing there where they were calling in the question, clinical utility of the test? Or is there any issues on that front? Or just anything else you can share on that?

We don't -- as you can imagine, we don't have any further comment on our -- any communication back and forth other than to present full transparency and everything we know as of today. We -- I will say we have absolute certainty and would find impossible to argue the medical necessity and clinical validity of our test for the patients that are treated. It's important to note that a lot of this focus on broadened abuse with infectious disease testing, which UTI has been noted in what is not policy-based, but communications coming out of Novitas.

It is not the type of test that we are offering to the customer base we are, right? We market our test specifically to urology customers for a very specific patient population. And it is patients that are referred to urology, right? When you have a UTI, you don't call urologists. This is not your run-of-the-mill, immediate care, get put on cipro and you're brand new. These are patients that present in men with the large prostate or BPH, are prone to these. Women are referred to urology for these. We've had patients and clinicians present at our national sales meeting and the clinical value is impossible to argue and remarkably compelling.

So the broad panel of organisms and susceptibility markers, in addition, a little bit more detail. Our test is in the 20s of organisms and susceptibility markers. Each run is a specific reaction for each analyte or target organism. So we have exhausted when we entered the market, are following the AMN guidelines. I'll leave it there, but it leads to our confidence and for sure, the medical necessity and our ultimate process.

And maybe for the follow-up, just on the core, maybe versus your guys' expectations, obviously, really strong growth in liquid. Tissue was up against a really tough comp there. Just tell me how did the quarter play out versus your expectations? And as you kind of have the updated guide, like kind of what are you incorporating? Or like how are you thinking about the rest of the year across your 2 businesses?

Thanks, Dan. Yes, I think we would appreciate your comments because it's what we expected and I communicated as far as Q4 and Q1 with the integration. There will be some focus on the transition of our Resolve customers. It's important to note also that every one of our Resolve customers is urology customers. So our reps will be navigating that with our customers. We're confident that we'll navigate through that. And then our guidance adjustment really reflects, while we don't break it out and haven't broken it out historically, made the assumption that it's really stripping out our expectation of what Resolve will contribute. That's essentially the calculus of our new guide.

And any color just on the strength in liquid? Obviously, tissue up against a really tough comp, but on a comp adjusted basis, nice growth. Just anything to point out across the 2 segments as we look out for the rest of the year?

No, I think there might be some embedded strength there because we were -- there was some additional adjustment to our Q1 revenue based on the fact that we're conservatively non accruing going forward here, cash only. So I don't have any additional comment other than our guidance clearly reflects confidence in our core cancer business, both tissue and Exo.

And we -- I'll just add that at the risk of being covered here, we view this -- we believe we'll look back on this as a blessing in disguise from a focus benefit of our sales organization because one rep selling 4 tests, Resolve is a great test that has been broadly adopted, but it requires focus and time with our customers and obviously, our organizational support of that.

We go next now to Bill Bonello with Craig-Hallum.

I want to focus a little bit on the cash situation here. So when you think about the restructuring expenses that you're going to incur, do you have any sense of the magnitude of the cash outlay that may go along with that?

Yes, Bill, I think we're confident that our expectation would be the operation would cease by the end of June. Obviously, the majority of the Plano operation is carried in COGS. But we expect to derive any additional expense associated with that will be absorbed by additional efficiencies across our operation that has adjacent or, I guess, blended support of our Resolve business in our operation across RCM client services and shared services with operation and product support. So I guess that -- hopefully, that answers your question, if I understood your question.

I mean somewhat, I mean, it just -- you got -- I just want to make sure I understand that. I mean there's going to be some severance payments you're going to be making. There's charges on the lease that you mentioned, et cetera. Those are all cash. And so you're thinking you can offset that cash outlay that may come over the next couple of quarters, you can completely offset that with enhancements to the rest of the business?

We're confident that there'll be a considerable offset there, Bill.

Okay. And then when you think about the...

The only term I used differently, we said completely, I mean, whether it's complete, materially offset. Just for transparency, Bill.

Yes. Okay. And then just -- When I look at the pro formas, and I think there's maybe $700,000-something of expense that you put with Resolve. Can you give us some sense of what those expenses are? Just -- And what I'm trying to get at here is how easy will it actually be to eliminate operating expense? What's truly attached to Resolve and what was just covering fixed costs?

Mainly incentive comp, Bill, to our sales organization for the Resolve test, if I'm understanding that question correctly. And again, as we -- we're not in a position right now to fully reconcile, but to your 2-part question, we expect the majority of the offset of the closing of the operation, the associated costs with that to be offset by efficiencies across the organization. And then from an OpEx perspective, while I noted that the majority of OpEx -- the OpEx will not change materially because the majority of the Plano carry was in COGS. We would expect some benefit, IC is a good example, right, to our [indiscernible]

Okay. That's really helpful. And then just -- I guess, if I can, and I'll get out of the way and let other people ask questions. But just on the tissue volume, just trying to get a better understanding of what's going on there? It's been sort of moving steadily downward. And I know you've been doing a big integration and Salesforce was distracted by that. But it's sort of hard to believe at these trends that there's nothing else at all happening. So I guess I'm just trying to get what can you tell us about whether you've actually been losing some customers on the GPS side or maybe people are not continuing to use Confirm, or what -- why are we seeing volume actually going down?

Yes. So I think -- I understand the question. I think I would say there's a multifactorial impact there, right? We have made significant progress, as I've noted and based on our trending consistent growth profile is sticky adoption. There are aspects of our tissue-based tests that are -- require focus and continued work with our customer base with both Confirm and GPS. You commented on the integration, which I fully anticipated, and we expect clearly reflected in our guidance to see a sequential acceleration on the tissue side, even with the focus required on this new development that was related to Resolve on the tissue side in Q3 -- I'm sorry, Q2, Q3 and Q4 as we go forward.

And that's part of the calculus that we understand with our mapping of our customer base, our utilization rates, our -- the implied churn or whatever that we would have. And we've made so much progress on that over the last couple of years that we're confident that fixed. And as we look at the comp quarter that Dan noted, we would attribute it to those multiple factors. And our guidance requires that, that comes back online on the tissue side as we anticipated at the beginning of the year, knowing that Q1 would be choppy.

[Operator Instructions] We'll go next now to Mark Massaro with BTIG.

I apologize. I hopped on the call a few minutes late. So I wanted to just ask a clarifying question. I saw from your press release that you received a Medicare recruitment decision from Novitas. But I wanted to ask, did you receive a noncoverage determination? So I'm just -- The clarification is, is the coverage suspended at this time?

Mark, my answer to that is we've not -- I don't know that Novitas has a coverage policy, which you're very experienced in this segment. I mean I don't -- I think I commented MolDX or California MAC has a clear policy related to UTI testing. Novitas does not. There have been communications that have come out over time, probably over the last year or 2 where they're calling attention to it and focused on fraud and abuse. I think this is government down to -- and I think that MolDX has probably held up as -- while difficult to navigate through MolDX, we've experienced that, that they have a standard and a policy coverage.

We have followed the AMA guidelines and the guidelines associated with how we have built Novitas and Medicare for the past 5 years, Mark. And we know -- I think you would probably know this, too, from a landscape perspective. We know we're not alone here. In fact, I would add an additional point here that we have urology customers that have brought UTI testing in-house through whatever methodology they're using our platform. And they are coming to us saying that they are experiencing reimbursement and are looking to bring reimbursement challenges, inconsistencies.

But we don't have a policy to lean on to explain their behavior. And we are very confident to my opening comment, which you missed, we can follow up that medical necessity is unquestioned and a very ambiguous seemingly change in their posture on paying tests they paid for over time.

We are not willing to try different billing schemes. We're just making what we believe is the prudent near and long-term decision for our company and for all of our stakeholders to maintain our transparency and integrity. It's unfortunate. It's remarkably unfortunate because of the value to patients and the way we've responsibly marketed this test.

Okay. Has -- So -- it -- I understand why you made the decision to cease operations in Texas. But did you guys evaluate the option to run the test out of a separate lab in a Medicare jurisdiction that does have coverage?

Yes, Mark, I don't think I'd comment any more on all of the complex decision-making process that we went through. So I don't really have a comment. I mean our Irvine laboratories and MolDX, which has a noncoverage decision for UTI test.

Yes. All right. And then last one for me. Are you seeing any -- as a follow-up to Bill's question on the tissue volume side, are you seeing any changes in the competitive landscape that you can speak of?

Nothing material from the 2 competitors on the GPS side.

We'll take a follow-up question now from Dan Brennan at TD Cowen.

Maybe just one more since -- probably follow up later. Just -- Michael, to your point on the tissue volume acceleration, can you just elaborate a little bit in terms of some of the initiatives and efforts that you kind of discussed in terms of seeing that sequential acceleration? Any color, qualitative color you can provide just about the visibility, confidence in that acceleration?

Yes. I mean I think maybe to provide to Mark's last question, the one competitive landscape change I should have noted, Mark, is on the AI side. And I think there's a lot of discussion, I don't want to say noise, but awareness of and communication about the promise of AI in our space, particularly relevant to GPS. And what I noted in our strategy here going forward, including the partnership that we've entered into is that we've been very patient in -- and rigorous in our process as to the best path forward. We have not been the steep of the wheel, but we've also not panicked. I think we've gone through a prudent exercise of our operational value and use of AI, which does drive, as I noted, all of our clinical data generation and study protocols.

But more importantly, the partnership that we've entered into, when I know customer-facing, my comment would be there is that this partner provides relevant urology, pathology services to our common customer base. So we are very, very confident that our patient approach there -- there's not a company in the space that has been partnered with or available with AI technology that we haven't spoken to or evaluated, and we're very confident that the efforts we're taking internally and the partnership that we have embarked on will drive significant support for our GPS and Confirm business.

But that coupled with our execution focus of the sales organization, I guess those are the couple, 2 or 3 different bases that we have for being confident that tissue begins to accelerate as we go forward.

And gentlemen, it appears we have no further questions today. So ladies and gentlemen, that will bring us to the conclusion of today's MDxHealth first quarter 2026 earnings conference call. We'd like to thank you all so much for joining us today and wish you all a great rest of your day. Goodbye.

Good day, and welcome to the MDxHealth Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to John Fraunces with LifeSci Advisors. Please go ahead.

Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties.

These risks and uncertainties are detailed in the Risk Factors section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F.

I'll now turn the call over to Michael McGarrity, Chief Executive Officer.

Thanks, John, and thank you all for joining us for our fourth quarter and full year 2025 earnings conference call for MDxHealth. With me today is Ron Kalfus, who has returned as our Interim Chief Financial Officer. We have been very consistent in our message and mission that MDxHealth is driven by 3 core operating principles: focus, execution and growth.

We believe that our strong results throughout 2025 demonstrate this commitment and that our guidance for 2026 will require that same commitment. We are very confident in our ability to deliver. Over the past few years, operating discipline, commercial execution and an aggressive growth strategy has positioned MDxHealth as the leader in precision diagnostics focused into urology.

It is important to note that our consistent performance and growth have been driven by the following foundational principles that are cemented in our mission. Menu expansion is driving a balanced growth dynamic across our tissue and liquid biopsy products.

This strategy was a primary catalyst for the ExoDx acquisition, capitalizing on one of the largest market opportunities as it relates to patient need and total addressable market, which we believe now positions us with the best-in-class precision diagnostic menu across the patient pathway of prostate cancer.

Prudent operating discipline reflected in our reduced OpEx as a percentage of revenue over the past 3 years. Commercial execution and productivity reflected in our consistent delivery of 20% top line growth while reducing sales and marketing spend as a percentage of revenue for the past 3 years.

Prudent execution of growth opportunities that stems from internal focus on not just where the market is today, but where it is headed, coupled with customer-facing clinical needs, all of which resulted in acquisitions that have and will continue to fuel our growth and service to our patients and customers as the core of our strategy beyond the financial leverage that has provided our business.

And finally, an organizational commitment to the customer experience reflected in our progress from candidly less than ideal turnaround time of critical tissue-based patient samples to now a best-in-class 5 days or less time to result, which is one of the highest customer experience metrics we track.

We are incredibly proud of our entire organizational commitment to not only the financials, but what really matters to patients, staff and clinicians. Taken together, these foundational principles are enabling MDxHealth to comprehensively address the needs of prostate cancer patients across the entire continuum of care.

From an initial elevated PSA to and through each point along the diagnostic pathway of prostate cancer MDxHealth can deliver a clinically actionable diagnostic for clinicians and patients. And finally, as it relates to our growth, we are confident that MDxHealth will continue to deliver market-leading growth driven by focus and execution coupled with a very sound and disciplined new product and acquisition strategy.

As we go forward, we also expect to continue to achieve sustained top line growth while advancing operating profitability. On a couple of final notes. In Q4, we began the integration of the ExoDx business and met our internal goal of transitioning all of our SelectMDx customers to ExoDx, resulting in accelerated operating efficiencies as we are no longer receiving SelectMDx samples.

We also initiated the integration of our strengthened sales organization with cross-training and strategic mapping of the expanded customer base, which we expect to complete by the end of Q1. On a related note, our reported revenue of $107.9 million is $1 million less than the approximation we provided in our pre-release.

At the time of our top line pre-release in advance of JPMorgan, our year-end closing process was less than complete than would typically be the case. With the recent acquisition of ExoDx, we have had to rationalize and consolidate disparate and quite complex closing processes, which directly impacts our methodology for calculation of ASPs and top line revenue.

However, the adjustment of $1 million to our pre-release revenue estimate does not affect our 2026 revenue guidance nor the confidence in our growth trajectory. As always, our revenue guidance is based solely on unit growth associated with customer adoption and is not dependent on accelerating pricing dynamics.

We also announced our amendment to the Exact Sciences earn-out from the GPS acquisition, lowering our upcoming earn-out payment by close to $20 million while deferring by an additional year the full earn-out amount.

This provides MDxHealth with additional flexibility as we go forward with confidence of continued progress in our operating profitability profile as reflected in our adjusted EBITDA performance, which we expect to reach 10% of revenue as we exit this year.

I will follow up with closing comments and view forward. But first, let me turn the call over to Ron Kalfus, whom we have welcomed back to the role of Interim Chief Financial Officer. Ron has been a valued member of our team for the past 6 years of growth and consistent financial results, coupled with his fiduciary duty to all of our stakeholders, which is of the highest quality and integrity.

Welcome back, Ron.

Thanks very much, Mike. To follow on Mike's remarks, we are very pleased to report strong performance in the fourth quarter and full year of 2025. Q4 total billable volume was approximately 38,000 tests, of which approximately 11,000 were tissue-based and 27,000 were liquid-based tests and representing total unit growth of 62% versus the prior year quarter.

Volumes for our tissue-based tests, which include ConfirmMDx and GPS, decreased by 5% over the prior year period. Volumes for our liquid-based tests, which include SelectMDx, ResolveMDx and the newly acquired ExoDx increased by 128% over the prior year quarter. Revenues for the fourth quarter ended December 31, 2025, increased by 19% to $29.5 million versus $24.7 million for the prior year quarter.

Moving below the revenue line, our gross profit for the quarter was $18.7 million, an increase of 20% as compared to $15.5 million for the fourth quarter of 2024. Gross margins were 63.2% compared to 62.7% for Q4 '24, an increase of 0.5 percentage points, primarily attributed to economies of scale. Our operating loss for the quarter increased 14% to $5.3 million compared to $4.6 million for the fourth quarter of 2024, primarily driven by increases in headcount and other operating expenses related to the ExoDx acquisition.

Our net loss increased 31% to $8.9 million compared to $6.8 million for the prior year, driven by an increase of $3.1 million in net financial expenses, partially offset by a tax gain of $1.6 million. Adjusted EBITDA for the fourth quarter was a negative $2.1 million compared to a negative $1.4 million for the fourth quarter of 2024. Note that a reconciliation of IFRS to non-IFRS financial measures has been provided in the tables included in this press release. Cash and cash equivalents as of December 31, 2025, were $29 million.

This concludes my overview of the results. I will now turn the call back to Mike.

Thanks, Ron. We believe our Q4 results reflect the reputation we are building for excellence in focus, execution and growth. And so as we look forward, we are committed to the following operating principles: discipline in our capital allocation as reflected in our negotiated amendment with Exact Sciences, which we believe reflects their confidence with continued investment in our success, absolute dedication to the patient and customer experience by every single part of our organization.

The highest expectations for continued growth driven by our sales channel to meet or exceed expectations defined by performance over time with the culture of recognizing execution through an incentive compensation plan that rewards sustainable growth. Our culture of quality first and customers always will ensure our building reputation for excellence in operating discipline, commercial execution and most importantly, the patient and customer experience, which will continue to fuel our growth in a sustainable way.

It is important to note that with the ExoDx acquisition, we have reorganized our revenue cycle management team under new leadership to drive best-in-class access, predictability and collection across our expanded menu of tests and payers. Also supporting our payer efforts is our commitment to invest in advancing our robust clinical data to show improvements in both patient outcomes and healthcare economics.

As final evidence of these efforts, I would point to our recently communicated progress on our landmark collaboration with the University of Oxford with the completion of the GPS prompt study, which we now expect to be presented at the upcoming EAU conference by our principal investigators from Oxford.

Our Oxford collaboration now moves to commencement of the GPS-ProtecT study, evaluating the predictive power of GPS test in patients enrolled in the U.K. ProtecT randomized trial of over 1,500 men with localized prostate cancer followed for over 2 decades.

As the largest trial ever conducted to evaluate such diagnostic assessment, the outcomes of this landmark study will position MDxHealth as the leader in risk stratification of patients newly diagnosed with localized prostate cancer. We also expect the trial will serve to advance the utility of GPS in the NCCN guidelines, which would uniquely position GPS as the test with the highest level of evidence in prostate cancer patients being considered for active surveillance.

We are very proud of our growing reputation for meeting or exceeding expectations and delivering on our commitments to patients, customers and the market. Whether in the sales force, laboratory operations, revenue cycle management, client services, patient advocacy, quality and regulatory, our entire MDx team operates under the mission that there is a patient and family on the other side of every sample we receive.

That is what drives our customer base to trust MDxHealth as their laboratory partner for critical diagnostic tests that inform patient pathways. We will continue to strive to deliver on our commitments of growth and value.

MDxHealth is the leading precision diagnostics company [indiscernible] high-growth target oncology market. And as always, [indiscernible] to provide value to all of our stakeholders, including patients, customers, payers and shareholders. Thank you for your interest in and support of MDxHealth.

Now I'll turn the call back over to the operator for questions.

[Operator Instructions] Our first question today comes from Thomas Flaten with Lake Street Capital Markets. We can move on to the next question coming from Bill Bonello with Craig-Hallum.

I'll take Thomas' question, too. So a few questions. The tissue ASP was down about $100 quarter-over-quarter. Should we think of that as continued mix shift towards Confirm? Anything happening on rates of denials or anything like that?

No, Bill, I think your assumption is correct. Again, as we report tissue, it's a combination of GPS and Confirm. And I think you're reading right on it, right? So the ASPs, we tend to reflect them based on the Medicare rates, confirmed 2,000 GPS, [ $3,850 ]. So if we have a 20% quarter or whatever the growth mix is, a 2- or 3-point swing. It's been balanced, as I've communicated. One isn't carrying the day on our growth, but a shift in the quarter of that mix can affect the ASP, assuming you're just taking units and dividing it by the total revenue.

Sure. Okay. And then the EBITDA, and maybe this is sort of a 2-parter, and I'll stop. The EBITDA was a little bit lower than we expected, obviously, down from where it's been running and down from last year.

The cash flow use was a lot higher than where it has been. Can you just kind of talk about what's going on there and sort of your expectation? I know you expect it to be at 10% EBITDA margin as you're exiting the year, but maybe more particularly just thoughts on cash burn going forward, need for financing, that kind of thing.

Yes. So a couple of parts to that question, Bill. So let me comment. As I've signaled, we expected some chop in Q4 and likely into Q1 as we absorb the acquisition of the ExoDx business. We expect that as signaled by our guidance to provide a significant growth opportunity both in 2026 and beyond. So we don't view that as anything more than absorbing all that.

This is our first full quarter with that acquisition coming into our operation. I think when you look at our P&L leverage, I would maybe point to kind of the last 2 years. If you look at 2024, we grew top line 28% and our -- we had negative $15 million in EBITDA or negative 20% EBITDA margin. This year, on 20% growth, we had $1 million, so it's essentially flat.

And as we come into this year, guiding to the midpoint, let's call it, 28% growth and exiting the year at 10% EBITDA margin, we view that as a 30-point EBITDA margin swing over the last 24 to 36 months. So full confidence in the ability of our business to absorb our top line -- OpEx as a percentage of our top line growth is noted, right? They're all declining as a percentage of revenue.

But as we get the integration going in Q4 and into Q1, that will clear, and we're very confident that, that swing and all comes down to the absorption of our OpEx based on that top line growth, which we're very, very confident. We've been able to hold our core with apples-to-apples, all of our operating sales and marketing, G&A, R&D relatively flat over the past 3 years on 20% or greater growth.

So hopefully, that helps. So that flows right through to the cash use. And then that coupled with the -- candidly, the relief on the earn-out through our amendment, very confident that quarter-by-quarter this year that, that shows up and flows through our full P&L.

The next question comes from Andrew Brackmann with William Blair.

This is [ Kate Jansen ] on for Andrew. Just on the guide, your 2026 revenue midpoint implies roughly 28% year-over-year growth, which is consistent with recent momentum. Can you walk us through the assumptions behind that guidance? Just specifically, how much is coming from core volume growth versus incremental contribution from ExoDx and cross-selling across the expanded menu and just kind of the levers that get to the high and low end of that?

Yes, Kate, I think that we don't really guide to product or segment on the tissue and liquid side. Clearly, our -- we really had 2 goals with this acquisition, right? One was to solve for the challenge we had in the market with Select. The second really was to drive balance in our growth profile with tissue and liquid, right? We got to the point last year where tissue was carrying 85% of our revenue, we'd prefer to see that balanced.

And then I had signaled that we expected $20 million or more contribution from Exo based on the acquisition in the full year 2026. Now as I noted, we actually kind of exceeded our expectations of the conversion of Select to Exo in Q4, which requires a significant focus from our sales and full commercial organization, hundreds of customers that we converted successfully.

Into Q1, we'll continue with the integration of the sales organization from a cross-training and customer mapping perspective. So a lot of the thesis of this acquisition to your question, was the combined customer base of ExoDx and MDxHealth. And that's our real focus to capitalize on that.

So to meet or exceed our revenue guidance of $137 million to $140 million this year, it will require, which we are very, very confident in that balanced growth across both tissue and liquid as well as an opportunistic capitalization of that combined customer base.

So that's probably what I can give you right now, but we're very confident that the conversion of the Select to Exo customers was a big step. The completion of the cross-training and integration here in Q1 of the newly structured sales organization and then really driving the adoption of our full menu in our customer base is our goal.

That's great. Super helpful. And then I guess kind of just building off of that, now you have transitioned all the customers to ExoDx and started strategically mapping that expanded customer base. After that's completed in Q1, can you provide any more detail on what you kind of expect to gain from those efforts?

Yes, Kate, I think what we expect to gain is -- what I mean by the combined mapping of the customer base, right, is the Exo customer base, and this was a key part of our diligence, right? Looking at their business, the challenge we have with Select, obviously, was the fundamental catalyst.

But then as our diligence progressed, right, the quality of the sales reps that we took over from Exo was primary, but also a function of where their business was in relation to ours. So if we have a strong ExoDx customer that doesn't read right on our Confirm or GPS or vice versa, we view that as a key aspect of the leverage we can generate with the top line growth. But it's not a hope that, that will happen.

Our guidance reflects clear visibility to that as well as continued execution as we've delivered over the past 3 or 4 years with that goal of 20% or greater growth. It's obviously accelerating this year with the Exo, but very confident that comes together, and we'll continue to work through Q1 to solidify that and then count on our continued discipline to absorb the acquired OpEx to get us to that 10% EBITDA margin.

The next question today comes from Nelson Cox with Lake Street Capital Markets.

Just kind of following up on the adjusted EBITDA margin 10% exiting 2026. You've held the OpEx virtually flat through 2025 and growing the top line 20%. Can you kind of talk about in a little more detail where there's additional operating leverage left to come, where you can find additional operating leverage?

Is there more you can take out sales and marketing as a percentage of revenue, which I think was 39% in 2025? I mean how much lower can that go? And then is kind of mid-60% gross margin still kind of the right baseline to have for now?

Yes. So two-part question there. The first part is we -- as we have this past year, right, going into this year, we're very confident that we can hold our OpEx relatively fixed, right? We -- as part of the acquisition in Q4, the increase in OpEx was largely associated with the headcount across the organization that we took over, right?

So sales, revenue cycle management, client services as well as our investment in our clinical scientific affairs efforts as evidenced by the Oxford partnership, which we are very confident will return greatly as we go beyond this year and into the next 2 to 3 years. So there's really no -- we don't expect to expand OpEx this year as we go forward.

Got it. And then maybe just quickly on that gross margin.

I'm sorry, Nelson. Yes, the gross margin, what I've stated on the gross margin is we've been bouncing around in the low 60s anywhere for the last number of quarters. That's where we expected to be and where we needed to be candidly to get to EBITDA profitability pre the Exo acquisition.

We guided to that at the beginning of 2024 that we would turn in the middle of 2025, which we did, which I think I would just say speaks to the predictability of our operating discipline and our top line growth. So I think we expect that to continue to range there. It's really a function of our expanded menu, right?

So each quarter, we not only see different mix between our 4 products in our 2 segments, tissue and liquid. But even within each of those products, each quarter can carry different to Bill's question at the beginning, the different mix by payers. That leads to the 2- or 3-point swing by quarter. But are we aspirational in our gross margin going into the high 60s or ultimately starting with the 7? We are.

And I would say that we are turning our attention to the other side of that, which is our operating efficiency, which would obviously show up in COGS as well as obviously driving price that's given. But we think we have some leverage there as well. But for right now, the margin, we would expect to run pretty straight away through this year. And that would allow us to get to that 10% EBITDA margin.

[Operator Instructions] Thank you, everyone. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the MDxHealth Third Quarter 2025 Earnings Conference Call. [Operator Instructions]. As a reminder, this call is being recorded. I would now like to hand over the conference to John Fraunces from LifeSci Advisors. Thank you, and over to you.

Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F. I'll now turn the call over to Michael McGarrity, Chief Executive Officer.

Thanks, John, and thank you all for joining us for our Third Quarter 2025 Earnings Conference Call for MDxHealth. With me today is Scott McMahan, Interim Chief Financial Officer. We have been very consistent in our message and mission that MDxHealth is driven by 3 core operating principles, focus, execution and growth. We are excited to report results that are consistent with that internal mandate.

From a focus perspective, we continue to identify high-value differentiated assets as demonstrated by our recent acquisition of the Exosome Diagnostics business, further positioning MDxHealth with the most comprehensive industry-leading menu of precision diagnostics in urology.

From an initial elevated PSA to and through each point along the diagnostic pathway of prostate cancer, MDxHealth can deliver a clinically actionable diagnostics for clinicians and patients. With respect to execution, every operating group within our company has supported our growth with an uncommon discipline as evidenced by the following: our sales organization has delivered a compound annual growth rate of 45% over the last 4 years, while significantly reducing our sales and marketing expenses as a percentage of revenue. This reflects our team's steadfast commitment to building trust and accountability with our urology customers, allowing us to confidently invest in additional growth opportunities. Our laboratory operations group has also kept pace with the increasing scale of our business while improving our gross margin profile through optimal efficiency and productivity. From a customer experience perspective, our entire team knows that we are only as good as our customers think we are. The emphasis we place on the customer experience has, in fact, become foundational to our culture.

There is nothing we do not metric and manage to help improve upon the customer experience. And through these efforts, I believe we are now resetting the industry gold standard for turnaround time from sample to result, which is clearly one of the most important patient and clinician-driven metrics. And finally, as it relates to growth, we are confident that MDxHealth will continue to deliver market-leading growth driven by focus and execution, coupled with a very sound and disciplined new product and acquisition strategy. As we go forward, we also expect to achieve sustained top line growth while advancing operating profitability following our first adjusted EBITDA profitable quarter in Q2, delivered again in Q3 as well as achieving positive adjusted EBITDA on a year-to-date basis.

I would now like to highlight the results from our third quarter that we believe reflect our focused execution and growth. Q3 revenue of $27.4 million represents 18% growth over 2024, even with our decision to forego focus on our previously planned Germline offering and adjusted EBITDA came in at $1 million. Our total OpEx is essentially flat for Q3 and year-to-date over 2024, up a mere 1% on 20% year-to-date top line growth while absorbing material acquisition-related expenses. We successfully closed on the transformative ExoDx acquisition. And at the end of Q3, we began the integration from an operational and sales force perspective, and this process will be our highest priority throughout Q4. We strengthened our laboratory operation with now 3 labs, and we'll focus on installing and advancing our quality and operating discipline goals with the team from ExoDx in the Massachusetts facility.

Finally, our total use of cash for Q3 was less than $1 million. We are confident in completing the integration of the ExoDx acquisition in this fourth quarter. The integration will be focused on the following key operational areas of the business. For the commercial operation, our diligence of the ExoDx opportunity led us to execute a strategic expansion of our sales organization from 50 direct sales reps among 6 geographic regions to now 60 direct sales reps across 8 regions. This expansion was informed by a detailed review of the customer base and ordering patterns by urologists and large urology groups and was specifically designed to optimize cross-selling opportunities of our combined customer base.

As I noted when we announced the acquisition, this strategy mirrors the growth thesis of our GPS acquisition, leveraging the potential to drive growth through our now expanded menu and customer base. We are conducting cross-training of sales reps and integrating into the newly formed regions. Through this acquisition, we are confident that our best-in-class sales team will continue to execute on our growth strategy, demonstrated by our track record of consistent and sustainable sales rep productivity and fortified by the high-performing and high-quality sales reps we retain from ExoDx, slotting them opportunistically to further drive growth and customer engagement. Lastly, on the commercial customer front, we will be converting our Select customers over to ExoDx throughout Q4 and would expect to discontinue Select by year-end.

We are confident, as we have noted, that the ExoDx test provides optimal and clinically actionable results for patients and clinicians while providing additional ease of use. We will strive for seamless integration and provide an update at the beginning of the year on our progress on what we expect to be a successful transition. We are also focused on our laboratory operational integration with our expanded laboratories operations in California, Texas and now Massachusetts. We will focus on efficiencies designed to advance our continuously improving gross margin as well as advancing our information systems to drive additional operational efficiency, all while maintaining our relentless focus on performance metrics that achieve operating excellence and improve customer experience.

Finally, we are integrating our client service and revenue cycle management teams to best serve our patients, customers and payers as we strive for world-class service standards within the industry. Based on prioritizing the successful integration and customer engagement as well as conversion of Select to ExoDx, we have set aside our entry into the Germline market. While we had expected material revenue contribution from Germline in the second half of this year, we are maintaining our 2025 revenue guidance of $108 million to $110 million, and we'll revisit and reevaluate the Germline opportunity as we enter 2026. Finally, as part of the ExoDx acquisition, we commented on the broad IP and clinical scientific data in multiple cancers, including prostate.

We will be actively evaluating strategic opportunities from this platform, both within MDxHealth as they apply to our urology focus and through partnering opportunities as they may present themselves. We now believe and are confident that no other company is better positioned to improve the patient journey through prostate cancer diagnosis and treatment and that our results continue to reflect our success in bringing value to this patient population. I will follow up with closing comments and a view forward. But first, let me turn the call over to Scott McMahan for a review of our financial and operating results for our third quarter. Scott?

Thank you, Mike. To follow on Mike's remarks, we are very pleased to report strong performance in the third quarter of 2025. Q3 total billable volume was approximately 33,000 tests, of which approximately 13,000 were tissue-based and 20,000 were liquid-based tests, representing total unit growth of 37% versus the prior year quarter. Volumes for our tissue-based tests, which include ConfirmMDx and GPS increased approximately 18% over the prior year period. Volumes for our liquid-based tests, which include SelectMDx, ResolveMDx, Germline and the newly acquired ExoDx increased approximately 65% over the prior year quarter.

Revenues for the third quarter ended September 30, 2025, increased by 18% to $27.4 million versus $23.3 million for the prior year quarter. Tissue-based tests made up 76% of revenues for Q3. Moving below the revenue line, our gross profit for the quarter was $17.9 million, an increase of 25% as compared to $14.3 million for the third quarter of 2024. Gross margins were 65.2% compared to 61.2% for Q3 '24, an increase of 4 percentage points, primarily attributed to our test mix and improved efficiencies in our operations. Our operating loss for the quarter declined 57% to $2.6 million compared to $6.1 million for the third quarter of 2024, primarily driven by our growth in sales and gross profit.

Our net loss decreased 28% to $8 million compared to $11.2 million for the prior year. Adjusted EBITDA for the quarter was a positive $1 million compared to a negative $3.8 million for the third quarter of 2024. Note that a reconciliation of IFRS to non-IFRS financial measures has been provided in the tables included in this press release. Cash and cash equivalents as of September 30, 2025, were $32 million. This concludes my overview of the results. I will now turn the call back to Mike.

Thanks, Scott. We believe our Q3 results reflect the reputation we are building for excellence and focused execution and growth. And so as we look forward, we are committed to excellence in the following operating principles: discipline in our capital allocation as reflected in the linear decline in cash used in operations with Q3 almost breaking even with respect to total use of cash, absolute dedication to the patient and customer experience by every single part of our organization. The highest expectations for continued growth driven by our sales channel to meet or exceed expectations, defined by performance over time with a culture of recognizing execution through an incentive compensation plan that rewards sustainable growth.

Our culture of quality first and customers always will ensure our building reputation for excellence in operating discipline, commercial execution and most importantly, the patient and customer experience will continue to fuel our growth in a sustainable way. We are very proud of our growing reputation for meeting or exceeding expectations and delivering on our commitments to patients, customers and the market, whether in the sales force, laboratory operations, revenue cycle management, client services, patient advocacy, quality and regulatory. Our entire MDxHealth team operates under the mission that there is a patient and family on the other side of every sample we receive. That is what drives our customer base to trust MDxHealth as their laboratory partner for critical diagnostic tests that inform patient pathways.

We will continue to strive to deliver on our commitments of growth and value while positioning MDxHealth as the leading growth precision diagnostics company focused solely into our high-growth target urology market. And as always, we carry a great deal of responsibility to provide value to all of our stakeholders, including patients, customers, payers and shareholders. Thank you for your interest in and support of MDxHealth. And now I'll turn the call back over to the operator for questions.

[Operator Instructions]. We have the first question from the line of Dan Brennan from TD Cowen.

Maybe just the first one, just on Exo in the quarter, it looks like given the liquid volumes really had a strong liquid quarter. Just wondering if you can give us any color on the contribution of Exo in the quarter? And then b, related to that, there's some moving pieces, obviously, with your product portfolio as we move -- as we exit the year, you're exiting Germline, you're deemphasizing Select, but now you have Exo in there. We would net those all out to still be a positive contributor such that like you should see upside to revenues. You guys aren't baking anything in right now, maintaining the guide. Is there conservatism in that? Or anything you can help on that would be really great.

Yes, Dan, I got the question. So just to be clear to take a step back, we had, as we had discussed, not expected material contribution from Germline in the first half of this year. We did, however, signal and expect material contribution from Germline in Q3 and Q4. As we entered into the process on the ExoDx acquisition, it became clear that, that would likely lead to a successful outcome. We adjusted that focus knowing that we would need to require all of our resources, focus and attention on the closing of the deal, which happened at the end of Q3.

So part of your question is no material contribution from Exo -- and that, that is an offset. So without any contribution from what we expected from Germline and the Q4 contribution from Exo, we're confident that we can meet or exceed our revenue guidance. That informs our view there and hopefully answers your question, which I understand. So we are very clear that the transition, the liquid growth in Q3 was candidly driven our Germline -- I'm sorry, our resolve business continues to accelerate. And we did see -- we announced the deal in August. We didn't close until the end of September.

So we really were focused on managing. I communicated when we announced the acquisition that I wasn't going to comment on our strategy for Select and Exo in the market out of respect for our customers and sales reps that are working that. And we're confident that we navigated through that weird period for lack of a better term, with a lot of competitive -- competitors running around and making assumptions that we held off. So we believe that our results for the year in Q4 will reflect our original thesis on the opportunity ahead of us with the Exo acquisition. And the offset of Germline, we believe, is the right strategy to ensure very, very successful integration of an expanded sales organization with territory adjustments, cross-training and maintaining the customer base while we move customers away from Select and on to Exo. So hopefully, that answered your question. And yes, we think it's -- we think we made the right decisions there. And obviously, we'll look forward to reporting support for those.

Okay. And then maybe any color just on GPS, obviously, such a big driver of revenue for the company, just given the ASP you realize on that. Just wondering what you could characterize how GPS did in the quarter? -- we were tracking volumes up significantly over the last couple of quarters. Just any color on how it came in? Any color on price or volume or just what the environment is like? And then what do you have kind of baked in as we think about GPS for the fourth quarter?

Yes. So our tissue reported 18% growth. We feel that, that's significantly ahead of the market growth, and we're very confident that, that our performance continues there with no material change to the economics. And remember, that is Confirm and GPS. In Q3, we -- I usually don't comment on seasonality. We did in our customer channel checks throughout the quarter, see a little bit of a patient flow directed slowdown in number of biopsies -- but again, we wouldn't tend to apologize for 18% growth on the tissue side.

So business is going as we anticipated and feel confident in both. I think the comment I would make is the mix shift that you saw with tissue and liquid, we view as very encouraging. In other words, our tissue as a weighting of revenue had been running about 80%. The last 2 quarters, it was up to about 85% of revenue. And what you saw in Q3 was a little bit of flip of that, really driven by the strength of the Resolve growth. And yet the margin held at the 65%, which is I've said on the last couple of calls, is ahead of our expectations. I've been reluctant to set that as the view forward. But obviously, it shows confidence that we're seeing really good execution and efficiencies in our COGS and gross margin profile across our menu, both liquid and tissue. So we believe that's sustainable as well.

Great. And maybe just a final one, just back to like the first point. So presumably, whatever the Exo contribution is, given the fact you're holding the guide, is the assumption that, that contribution is around the same level -- it was around the same level as the Germline test and the Select test? Or has something changed in your underlying assumptions for the rest of the business?

The former, not the latter. We are still very, very confident in not only the core Exo business that we acquired, it's early. And as we go forward over the next 2 or 3 quarters, we'll comment on what we see as a real opportunity there with the expanded sales organization and a renewed focus on that part of our market opportunity because I don't want to say we had walked away from it, but we were clearly challenged. And as I've commented, our focus for the first half of the year was really leading toward the tissue.

I think our results business is just really going based on our sales rep focus, but also a little bit of peer-to-peer help there. We're probably on our fifth generation of that test. It's the best test, we believe, on the market unequivocally. So we really see balanced growth throughout the menu with just an adjustment in our strategy that lines us up where we expect it to be for the year.

We have the next question from the line of Andrew Brackmann from William Blair.

Mike, you mentioned the analysis that you did of your customer bases and that's informing some of the sales team expansion here. Any additional color you can maybe give on that analysis, how you're viewing the opportunity across the combined customer bases here and how we should be thinking about the total opportunity size?

Yes, Andrew. So probably what you would expect, right? I mean we tried not to overcomplicate it. But what we did was we looked at their customer base, and we had pretty good information. I'll just say a little bit different than the GPS. That was a carve-out asset acquisition. This was an acquisition of the business. So between signing and closing, we got -- we did a lot of work on the customer base, the crossover. And what we really looked at was growth trends within an area of the business. And then also looking at where there was Exo business where we saw opportunity to build our tissue side, GPS and Confirm and vice versa.

The second comment I would make on that is that we know a lot of those customers because candidly, they're former select customers over the past few years as the market has moved on us. So we really look -- took a composite view of, a, sales talent; b, historical ordering trends and then crossover mix of our menu within our target customer base. And that informed the expansion, which we think was the right number, prudent it strengthens our focus. So we expect to drive that same productivity now over a little bit larger sales organization while still being able to carry our P&L forward with all the progress we've made on the full P&L from an OpEx absorption and productivity across the sales organization.

All that's great color. And then just on the integrating client service and RCM initiatives here just on the operations front, can you maybe just sort of talk to us about the opportunity that's there on the RCM? Why did you choose to do this now and how we should sort of think about the potential downstream effects?

Yes. I guess I called that out just because what we retained and crossed over from the business were the key operating parts of the business, right? Sales force set aside. We were -- we saw -- we'll recognize synergies there based on the size of the sales organization they were carrying and what we elected to take over. And we ran a really high quality, which was important to us, to me, really looking at each rep, each territory, each customer base. My comment there is just the 3 key parts of the business that we have to be and plan to be very successful integrating to our operating business is the laboratory operation, which is with us now, the client services group and the revenue cycle management group.

So my comment stands to be integrating those so that we're all working the same process focus and execution and expectations so that we can predict and project the business as well as we have over the last number of quarters and years. And that will be the sole focus in Q4. So when we come back at the beginning of the year and provide guidance for 2026, it will be informed across all of the aspects that drive the P&L, right? The top line unit growth, our coverage and cash collections and then how we support our customers through our client service group with a menu that is more advanced than some of our competitors with 4 tests being ordered in a different mix set by certain customers as well.

So all that is what we're focused on for Q4. And that constitutes the new people and parts of the organization that are coming over that we expect in a quarter or 2 to be fully integrated just as we've made progress over the last couple of years with our group that I hope I pointed to with the growth not being linearly offset by our spend on the OpEx side. And that's what we anticipated over the last number of quarters. And we've had 1% OpEx expansion over the last year on 20% top line growth. That we expect to continue. And those are the groups that we got to make sure that we integrate so they're operating at the same efficiency levels that we have.

We have the next question from the line of Bill Bonello from Craig-Hallum.

A few follow-up questions here. So first of all, if we're doing our math right, it looks like maybe on the tissue side, the ASP was down about 7% or so sequentially. I guess, does that sound about right? And if so, is that a function of mix between the tests? And if it's not a function of mix, sort of what's driving that move?

Yes. I mean, Bill, we don't report our ASP by test, and we see variability each quarter. So as we go forward, we don't see a material change in our view of really our entire menu consolidated or how we think about our payer mix, and we'll continue to report on that each quarter, but I don't view that as anything notable.

Okay. Because, Mike, even if I just look at the total, total tests and total revenue, the ASP was down quite a bit year-over-year and sequentially as well. And so it's just -- it's a little confusing. There's that much fluctuation from quarter-to-quarter.

Yes, Bill, we are very, very conservative on our revenue cycle management estimates as you run in the lab model. So we just -- we don't -- I don't have any additional comment on that.

Okay. And then I guess I just sort of want to come back to the guidance again because much like Dan, I think we had sort of assumed that the guidance would go up when you closed the acquisition and shame on us for not realizing you had that much Germline baked into the initial guidance. But at the time you announced the ExoDx acquisition, you talked about assuming it would add at least $20 million of revenue next year. Has anything changed on that front thus far?

Nothing has changed. And if you view that offset is that we expect a $5 million or a little bit more in Germline in the second half that would be a good assumption as we don't guide to products, but we wouldn't have communicated. We saw an opportunity there if we didn't intend to focus on it and execute and deliver. We don't feel that's the right use of our focus, particularly over the next couple of quarters. So you're reading it right and absolutely 0 change on our view of the opportunity of the contribution from Exo as we go forward.

That's helpful. And I know you're not going to give 2026 guidance, and you might not even answer this, but I'll ask it anyway. When we -- when you first sort of put that out there, the way we had thought about this was, gosh, you're sort of a 20% grower and we tag $20 million or whatever the actual number is on top of that from the acquisition. It sounds like maybe that's the wrong way to be thinking about it, and we should sort of be thinking $20 million and we net out $10 million of kind of lost Germline. And so net-net, maybe the real add is sort of $10 million to whatever the basic growth rate is? Or how are you kind of thinking about that?

Well, I think I had a really smart analyst once tell me, don't guide to the following year until it's time to guide to the following year. But I think what I said was we expected -- we expected...

[indiscernible]

I think, I think, I think I stand by our view that we made that we expected the Exo business could contribute $20 million or more in 2026. That was a view, not guidance, not intended to be guidance, I should say. And that view is unchanged. And I also said that I expected it to accelerate our revenue growth from 20% to close to 30%. Again, that was our view. It wasn't intended to be guidance. So when we provide guidance at the beginning of 2026, I think our view from today is that those are reasonable in the ballpark assumptions of how our business builds.

That's particularly helpful. I appreciate that. And as always, we appreciate your prudence.

We have the next question from the line of Mark Massaro from BTIG.

I enjoyed that discourse in the last round of questions. But I think I'd like to maybe ask this one, which is, Mike, I understand that the Exo test is certainly an attractive test. You've got many other attractive tests in your bag. And I wanted to just get your temperature on the Germline test. I recognize that you'll reevaluate that next year. But my sense is that you saw something in the marketplace, whether it was the competitive environment or just demand. But yes, I mean, can you just maybe give us a little more why are you sort of setting this test aside?

Yes, I got the question for sure, Mark. So just to be clear, we see that as a market opportunity that makes sense for our business, our offering, right? We have competitors, noncompetitors, partners. If you look at -- you can name them probably better than I, but everybody from Exact Sciences to a couple of our competitors off of that. So having that -- but candidly, in a non-materially differentiated way, the way we anticipated, which we have, I think, a good track record for is when we have our sales organizations, our sales organization, and I'll speak to it individually, our sales reps that I think have built access, influence and sway. Please take that as a respectful term, but that's how you build.

And everything I say about our organization being focused on the customer experience, that's how we've built that. So our assumption and thesis on that was it's an offering that makes sense. If you look at our Resolve test, I mean, everybody's got a Resolve -- I'm sorry, a UTI test is not unique. What we've been able to do with that business is driven by, yes, we think the best test for complex infections in our patient population within urology. We've continued to innovate that test. I think we're on our fourth or fifth generation. But when that started to go was when we really pushed it into our sales organization. We elected not to push that into our sales organization.

So our view of what we could accomplish and achieve in that was somewhat extrapolated by our experience and the way we see customer adoption go from 0 to material contribution and growth of a product that is not maybe as proprietary as Confirm GPS and Exo. So that was our view. We just chose not to have our reps spend time on that in the first half, as I noted, for the reasons I stated. And we made a late decision to forego it in the second half. But per the math, the implied math question, if you made the assumption that we expected it to contribute the delta between where you might have thought we'd be with $5 million in Exo in Q4 and not taking up guidance, to be clear, that's the question, I get it. Yes, that's a good assumption that we feel like if we roll that out at the beginning of Q3 to our sales team that we'd be able to drive that type of adoption.

We just -- we -- you have to remember, we have sales reps now that need to be cross-trained, adjusted to modest. But every time you adjust territories as a former sales rep, they're always viewed as material, not like with the GPS when we doubled our sales organization, but we deemed that, that was the appropriate way to cement our investment in this asset. And we don't see the Germline market is going away. And as I noted, we'll revisit that. So hopefully, that's a fair answer to your question.

Yes. Yes, that's great. So yes, gross margins were really strong, over 65%, up about 400 bps in the quarter. I wanted to ask, if we take Exo and just sort of like annualize it out, do you expect Exo to be accretive to gross margins in 2026? And then another way to think about it is, is 65% a level that you feel comfortable with executing against? Or are there some mix factors that we should be thinking about for next year?

I anticipated that question coming from you, Mark. And I think we'd like a full quarter of Exo. I had said that our expectation was that it would be neutral to accretive to gross margin. We have no reason to change that view. I think we want to see is a quarter or 2 of mix. And as I referred, integrating, as we fully come over in Q4, there'll be all the financial integration as well, right, working capital revenue cycle management, different payer mix, different collection profiles. We are -- we believe that maintaining our guidance reflects confidence that, that all holds together. But again, I'd probably wait till the beginning of the year so that I can give you a clear view -- an informed fact-based view of 2026. I'm just saying, give us 1.5 quarters or so to get this locked. I've said I did -- that the gross margin is running ahead of -- has run ahead of our expectations. I'm beginning to think that we can see that continue, but we'll lock that at the beginning of the year.

Okay. And that's helpful. And then one last one for me. When we think about your new commercial team, was this as simple as -- and just correct me if I'm wrong, was this as simple as taking your 50 direct reps and adding 10 from Exo? Or was there some other MDx reps that might have been impacted and perhaps you added more than 10 from Exo? And then can you speak to the experience and tenure of the Exo reps? And just what early indicators are you seeing from those newer folks?

Too early to comment on the last part of your question. But the front part of your question, really no comment on that. We wouldn't comment on specific people within our organization pre-acquisition or post acquisition. The net acquisition was 10 direct reps. And when we look at our sales organization individually and collectively, we really went through that process. We analyzed and credit to our commercial team -- this I can share, we put every one of their sales reps through our process as if we were hiring a new rep. So I won't speak to them individually out of respect for those that came over, those that didn't in our sitting sales organization going into the acquisition. But I will say that we were in a really tight process there.

So that gives us confidence. And we learned a lot from the GPS acquisition. I was very open about that. That was more complicated than we anticipated. It took longer than we anticipated. So we're trying to take that experience and apply it here so that we really -- when we provide our view at the beginning of next year, we'll be informed with granted only a quarter, but we're working on that right now.

We have the next question from the line of Thomas Flaten from Lake Street Capital.

Mike, just to confirm, so with the new 10 reps coming over, was this a question of adding 2 new white space territories? Or were you splitting and subsegmenting existing territories or maybe a combination of both?

Yes. We really don't have white space pre-acquisition, right? We designed our number of reps is designed to cover the full geography of the U.S. I would say it was probably more a function of putting strength on strength, right, from my -- I don't want to worry out with my Stryker experience, right, but add strength with strength. And so we looked to do that, but we were also opportunistic where we saw, as you would expect, strength in a customer base in a particular territory where maybe we hadn't been performing as well as we expected. So that was all part of our calculus there. It's not complicated like you wouldn't understand it, but it was complicated to make sure that we went through the exercise so that we didn't happen. So yes, the embedded question was, did territories change? Yes. When you go from 50 to 60 and you're fully covered without white space, yes, there were territory adjustments. Not...

Got it. I realize this question is probably a lot early given how early it is since the acquisition closed. But any negative feedback or pushback from docs making the switch from Select to Exo? I don't know how you've been messaging that to docs that you're in process of doing that.

Too early to comment, but we're confident that, that will not create friction or tension on our customer base. Please take [indiscernible] , but it's somewhat informed by the customers that already converted involuntarily from Select to Exo. It's just a better test.

Ladies and gentlemen, this concludes our question-and-answer session. The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.