Fulgent Genetics (FLGT) Q2 2025 Earnings Call Highlights
Fulgent Genetics (FLGT) announced a robust 16% year-over-year increase in core revenue, totaling $81.7 million for the second quarter of 2025. This growth reflects the company’s commitment to expanding its services and market presence.
The introduction of a new whole genome sequencing service features enhanced accuracy and improved variant calling, signaling Fulgent's intent to remain at the forefront of genetic testing.
Moreover, the company has received a CE mark for its Fulgen exome and Fulgen Pipeline Manager, thereby broadening its market reach in Europe. In addition, Fulgent executed over 20 new managed care agreements, effectively adding more than 35 million new covered lives to its in-network contracts.
In light of its strong business performance, Fulgent Genetics increased its annual revenue guidance for 2025, showcasing optimism about future growth.
Challenges Faced
Despite the positive revenue figures, the company reported a GAAP loss of $19 million for the quarter, which includes a one-time non-cash charge of $9.9 million due to impairment. Operating expenses rose, driven by increased R&D spending and higher sales and marketing costs.
The revenue from COVID-19 testing has significantly declined, contributing to an adjusted EBITDA loss of approximately $3 million for the second quarter. The company forecasts a GAAP EPS loss of $2.10 per share for the full year, highlighting ongoing financial hurdles.
Q & A Highlights
During the Q&A session, Brandon Perthhews, Chief Commercial Officer, elaborated on the $10 million increase in full-year guidance, attributing a $7 million improvement in precision diagnostics to an expanding partnership with the VA. He expressed optimism regarding future revenue growth in this sector, particularly in hereditary cancer and expanded carrier screening.
On inquiries regarding the performance in anatomic pathology (AP), Perthhews noted that growth was organic, driven by enhanced sales leadership and an expanded team. He expects continued growth despite potential seasonality in the latter half of the year.
Paul Kim, Chief Financial Officer, discussed the gross margin improvement, indicating that it was partly due to a one-time accounting adjustment while also reflecting operational efficiency. Approximately half of the increase stemmed from this adjustment.
Perthhews shared plans to capitalize on the American Academy of Pediatrics' endorsement of exome and genome sequencing by expanding the sales team to target pediatric markets, with a focus on children's hospitals and academic medical centers. As the new whole genome service demonstrates improved diagnostic yields, Fulgent anticipates further growth.
With respect to the FID07 clinical trial, Ming Shy, Chief Executive Officer, expects to accelerate enrollment in the latter part of 2025 by broadening the patient pool, with results anticipated in 2026.
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