NeoGenomics Inc.
02/17/2026 | Press release | Distributed by Public on 02/17/2026 15:18
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in this Annual Report on Form 10-K. The information contained below includes statements of management's beliefs, expectations, goals and plans that, if not historical, are forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. For a discussion on forward-looking statements, see the information set forth in the introductory note to this Annual Report under the caption "Forward Looking Statements," which information is incorporated herein by reference. For discussion and analysis pertaining to 2024 overview and highlights as compared to 2023, please refer to the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on February 18, 2025.
Our Company
NeoGenomics, Inc., a Nevada corporation (the "Company," or "NeoGenomics"), and its subsidiaries provide a wide range of oncology diagnostic testing and consultative services, including technical laboratory services and professional interpretation of laboratory test results by licensed physicians or molecular experts who specialize in pathology and oncology. The Company operates a network of cancer-focused testing laboratories in the United States and the United Kingdom.
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2025 Overview and Highlights
•We increased revenue by 10.1% compared to 2024;
•We increased Adjusted EBITDA 9.5% or $3.7 million to positive $43.4 million compared to 2024;
•We completed the acquisition of Pathline in April 2025; and
•We successfully resolved the RaDaR ST patent litigation with no remaining claims pending against the Company in December 2025.
Company Outlook
Advances in science and technology are driving a proliferation of oncology therapies and associated diagnostic tests. These diagnostic tools and therapies are increasing survival and enhancing quality of life for cancer patients. As a leading provider of oncology diagnostics solutions serving practicing oncologists and pathologists as well as biopharmaceutical companies, NeoGenomics facilitates the adoption of these advanced oncology diagnostic tools beyond the academic environment into the community setting. We are continuously enhancing and expanding our test menu to ensure that providers and patients have access to leading edge solutions such as advanced molecular testing and state-of-the art digital pathology. Moreover, our team of MDs and PhDs, along with our highly-trained oncology-focused sales team, provides ongoing education to our clients to ensure that they remain abreast of cutting-edge developments in oncology.
We are a leading provider of Heme oncology diagnostic testing, which includes molecular and NGS testing, and one of the key providers of solid tumor NGS testing solutions in the United States. Additionally, we are a trusted provider of specialized pharmaceutical development services, supporting pharmaceutical firms through the provision of laboratory testing, biomarker analysis, data generation, and related scientific support services in connection with sponsor-led research studies and clinical trials. We expect to continue to grow our business by offering a broad portfolio of tests with rapid turnaround times, wrap-around services, and solutions targeted to hospitals and community oncology segments. We believe that our exclusive focus on oncology, enabled by our expansive oncology testing menu and our high level of service, will further enhance our efforts.
We believe increased value of testing and lower cost is extremely important to the healthcare industry and creates a competitive advantage. We expect to continue to invest in information technology, automation and best practices to continually improve our processes and drive down the cost of testing. We are also continuing to expand our test menu and expect to remain at the forefront of the ongoing revolution in cancer related genetic and molecular testing to achieve our vision of becoming one of the world's leading cancer testing and information companies.
Our focus for 2026 is to sustain a purpose driven culture that maintains excellence in service and performance while growing through targeted innovation and to further extend our market relevance in the areas of therapy selection and MRD. We expect the following initiatives to allow the Company to continue on its path to becoming one of the world's leading comprehensive cancer testing companies catering primarily to patients receiving their care in the community setting:
Next Generation Precision Diagnostic Testing Solutions
•Drive targeted product launches in therapy selection and MRD through our launch excellence program; and
•Execute on focused investment programs in solid tumor Next Generation MRD assay targeting ultra-sensitive testing.
Our Community Channel Strength
•Continue purposeful expansion into the community oncology market, leveraging the strategic position that we've established with community hospitals; and
•Deliberately leverage partnerships to expand our market presence and accelerate our topline growth.
Optimize and Win the Customer Experience
•Maintain our focus on driving operational efficiency through automation, process improvement and platform upgrades; and
•Continually improve the customer experience as a key competitive differentiator.
Enhance Our People and Culture
•Enhance our Neo Culture through increased accountability and improved cross-functional collaboration.
These critical success factors have been communicated throughout our Company. We have structured departmental goals around these factors and have created employee incentive plans in which every employee will have a meaningful incentive for our success.
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Regulatory Environment
The FDA has regulatory responsibility over instruments, test kits, reagents, and other medical devices used by clinical laboratories to perform diagnostic testing. High complexity and CLIA-certified laboratories such as ours frequently develop testing procedures intended exclusively for use by the developing laboratory to provide diagnostic results to customers. These tests are referred to as laboratory developed tests ("LDTs"). The regulatory framework governing LDTs is evolving, complex, and has been the subject of ongoing debate. LDTs are subject to CMS oversight through its enforcement of CLIA. The FDA has also claimed regulatory authority over LDTs but has historically exercised enforcement discretion with regard to most LDTs offered by CLIA-certified laboratories performing high complexity tests, and has not subjected these tests to FDA rules and regulations governing medical devices, including premarket review requirements.
On May 6, 2024, the FDA published a final rule on the regulation of Laboratory Developed Tests ("LDTs") which amended the FDA's regulations to make explicit that LDT's are devices under the Federal Food, Drug, and Cosmetic Act ("FD&C Act"). As part of that final rule, the FDA issued a policy to phase out, over the course of four years, its general enforcement discretion approach to LDTs and also issued targeted enforcement discretion policies for certain categories of LDTs.
On May 29, 2024, the American Clinical Laboratory Association ("ACLA") filed a lawsuit against the FDA in the United States District Court for the Eastern District of Texas, challenging the FDA's final rule. A similar lawsuit was also filed by the Association for Molecular Pathology and that case has been consolidated with the ACLA action. On March 31, 2025, the U.S. District Court for the Eastern District of Texas vacated the FDA's final rule in its entirety, ruling that the FDA exceeded its statutory authority under the FD&C Act. As a result of this decision, the final rule will not take effect, and LDTs will continue to be regulated under the existing regulatory frameworks. Notwithstanding the court's decision, future legislative, regulatory, or administrative actions could reintroduce FDA oversight of certain LDTs, which could increase compliance obligations and costs.
It is possible that changes to FDA's regulatory approach, whether triggered by legislation, the current presidential administration, or otherwise, may result in increased regulatory burdens and costs for us, including requiring us to seek marketing authorization for and maintain ongoing compliance for our existing tests, any modifications thereto, or any future tests we may develop. If the government begins to regulate our tests, it could require a significant volume of applications, which would be burdensome and potentially costly. Furthermore, governmental bodies could take a long time to review such applications and/or document responses if other laboratories were also required to file applications and/or document responses for each of their LDTs. In addition, we could be required to conduct clinical trials in order to support required applications, which could add cost, delay and uncertainty to the process of bringing our tests to market and maintaining compliance of our marketed tests.
We closely monitor changes in legislation and take specific actions to identify and estimate the impact of changes in legislation whenever possible as regulatory changes can affect reimbursement for clinical laboratory services. We do not anticipate significant changes to our revenue in 2026 resulting from known changes in legislation or rulemaking.
Reportable Segment
We operate under a single segment that encompasses a comprehensive range of services. This approach aims to streamline our operations and enhance our service offerings to our diverse client base, which includes community-based pathology and oncology practices, hospital pathology labs, reference labs, academic centers, and pharmaceutical companies.
Revenue Streams
Our revenue streams include:
•Clinical cancer testing;
•Interpretation and consultative services;
•Molecular and NGS testing;
•MRD testing;
•Comprehensive technical and professional services offering;
•Clinical trials and research;
•Validation laboratory services; and
•Oncology data solutions.
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Service Offerings
Our clinical cancer testing services are designed to complement the work of community-based pathologists and oncologists, allowing them to expand their testing capabilities without significant investment in new technology or personnel. We offer both technical component ("TC" or "tech-only") and professional component ("PC") services, enabling our clients to participate in the diagnostic process. These services are designed to be a natural extension of, and complementary to, the services that clients perform within their own practices.
We believe our relationship as a non-competitive partner to community-based pathology practices, hospital pathology labs, reference labs, and academic centers empowers them to expand their breadth of testing. We believe this enables them to provide a menu of services that could match or exceed the level of service found in any center of excellence around the world. Community-based pathology practices and hospital pathology labs may order certain testing services on a TC basis, allowing them to participate in the diagnostic process by performing the PC interpretation services without having to hire laboratory technologists or purchase sophisticated equipment needed for the TC tests.
We also support our pathology clients with interpretation and consultative services using our own specialized team of pathologists for difficult or complex cases, as well as provide overflow interpretation services when requested. For oncology, dermatology, and other clinician practices that prefer a direct relationship with a laboratory for cancer-related genetic testing services, we typically offer a comprehensive service where we perform both the TC and PC components of tests. Larger clinician practices internalizing pathology interpretation services can benefit from our tech-only service offering, allowing them to participate in this diagnostic process while we handle the more complex molecular testing services.
We are a leading provider of Heme oncology diagnostic testing, which includes molecular and NGS testing, and one of the key providers of solid tumor NGS testing solutions. These tests are interpreted by our team of molecular experts and are often ordered in conjunction with other testing modalities. NGS panels, one of our fastest-growing testing areas, enable clients to receive significant biomarker information from limited samples. These comprehensive panels can allow for faster treatment decisions for patients as compared to a series of single-gene molecular tests being ordered sequentially. Our broad molecular testing menu includes our PanTracer portfolio (PanTracer Tissue, PanTracer Tissue + HRD, PanTracer LBx) and Neo Comprehensive panels (Neo Comprehensive Heme Cancers and Neo Comprehensive Myeloid Disorders), which are applied across a broad range of cancer types, and NeoTYPE panels which target select genes relevant to a particular cancer type. Additionally, we have molecular-only and comprehensive NGS-targeted panels which combine DNA and RNA into a single workflow. This approach captures a full spectrum of genomic alterations, including mutations, fusions, copy number variations, and splicing mutations, as well as tumor mutation burden (TMB) and microsatellite instability (MSI) for solid tumors. These tests are complemented by IHC and FISH tests when necessary. This comprehensive molecular test menu allows our clients to obtain most of their molecular oncology testing needs satisfied from our laboratory. This is attractive to our clients as patient samples do not need to be split and then managed across several laboratories. The acquisition of Inivata in June 2021 enhanced our capabilities with oncology liquid biopsy technology including RaDaR®, which is designed to detect MRD and recurrence in plasma samples from patients with solid tumor malignancies. These molecular laboratory and NGS capabilities are expected to drive growth in the coming years.
Our specialized pharmaceutical development services support pharmaceutical firms ("sponsors") through the provision of laboratory testing, biomarker analysis, data generation, and related scientific support services in connection with sponsor-led research studies and clinical trials. These services may include assay development, analytical testing, sample analysis, and data reporting performed in accordance with applicable regulatory and quality standards. NeoGenomics does not sponsor, conduct, or control clinical trials, and sponsors retain responsibility for study design, regulatory submissions, trial conduct, and clinical decision-making.
These services provide comprehensive support in oncology programs, including biomarker discovery, study design, and clinical trial testing. We aim to help clients discover the right content, refine biomarker strategies, and develop effective pathways for clinical trial testing. Our oncology data solutions, which involve the licensing of de-identified data to pharmaceutical and biotech customers in the form of either retrospective records or prospective deliveries of data, are designed to leverage our unique market position to solve real-world problems, such as identifying patients for clinical trials or providing clinical decision support tools for physicians and providers. This integration aligns with our broader service offerings to provide seamless, comprehensive support for both clinical and pharmaceutical clients.
Strategic Focus
We aim to provide a seamless and integrated service offering to our clients. Our operating approach allows us to leverage our expertise in oncology and molecular diagnostics to support both clinical and pharmaceutical clients more effectively. Our
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commitment to connecting patients with life-altering therapies and trials remains a core focus. We have invested in leading technologies to secure data and maintain transparency and choice for patients through our Notice of Privacy Practices.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Please refer to Note 2. Summary of Significant Accounting Policies, to our Consolidated Financial Statements for a complete description of our significant accounting policies.
Our critical accounting policies are those where we have made difficult, subjective, or complex judgments in making estimates and/or where these estimates can significantly impact our financial results under different assumptions and conditions. Our critical accounting policies are:
•Goodwill;
•Contingencies; and
•Revenue Recognition and Accounts Receivable.
Goodwill
We evaluate goodwill on an annual basis in the fourth quarter, or more frequently if management believes indicators of impairment exist. Such indicators could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management performs a quantitative goodwill impairment test. The quantitative analysis is performed by comparing the fair value of the reporting unit to its carrying value. If the carrying value is greater than the estimate of fair value, an impairment loss will be recognized for the amount in which the carrying amount exceeds the reporting unit's fair value. We estimate the fair values of our reporting units using a combination of the income, or discounted cash flows approach and the market approach, which utilizes comparable companies' data.
During the third quarter of 2025, we performed a qualitative assessment to determine whether it was more likely than not that the fair values of our reporting units were less than their carrying values. Such qualitative factors included macroeconomic conditions, industry and market considerations, and other relevant events. As a result of the qualitative assessment, the Company determined that there were indicators that it was more likely than not that the fair values of its reporting units were less than their carrying values. Accordingly, the Company performed a quantitative analysis and determined the reporting units' fair values exceeded the reporting units' carrying values and there was no impairment of the recorded goodwill as of September 30, 2025.
During the fourth quarter of 2025, we performed an updated qualitative assessment to determine whether it was more likely than not that the fair values of our reporting units were less than their carrying values. As a result of the qualitative assessment, we determined that it is not more likely than not that the fair value of our reporting units is less than their carrying amounts.
Contingencies
We accrue contingent losses when estimated impacts of various conditions, situations or circumstances involve uncertain outcomes. Contingent losses are recorded based on management judgment along with internal and external advice from legal counsel and/or technical consultants. Estimated losses from contingencies are recorded when both of the following conditions are met: (i) information available before the financial statements are issued (or available to be issued) indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and (ii) the amount of loss can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, that amount shall be accrued. When no amount within the range is a better estimate than any other amount, however, the minimum amount in the range shall be accrued.
Revenue Recognition and Accounts Receivable
Our specialized clinical services are performed based on an online test order or a written test requisition form. The performance obligation is satisfied and revenues are recognized once the clinical services have been performed and the
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results have been delivered to the ordering physician. Additionally, we enter into contracts to provide pharmaceutical development services and oncology data solutions. Revenue is recorded on a unit-of-service basis based on the number of units completed towards the satisfaction of a performance obligation.
Services are billed to various payers, including client direct billing, commercial insurance, Medicare and other government payers, and patients. Revenue is recorded for all payers based on the amount expected to be collected, which considers implicit price concessions. Accounts receivable related to clinical services are reported for all payers based on the amount expected to be collected, which also considers implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration we expect to receive based on negotiated discounts, historical collection experience, assumptions in payer mix, and other anticipated adjustments, including anticipated payer denials. Collection of consideration we expect to receive typically occurs within 90 to 120 days of billing for commercial insurance, Medicare and other governmental and self-pay patients and within 60 to 90 days of billing for client payers.
The following table reflects our estimate of the breakdown of net revenue by type of payer for the years ended December 31, 2025, 2024 and 2023:
| 2025 | 2024 | 2023 | |||||||||||||||
| Client direct billing | 71 | % | 72 | % | 72 | % | |||||||||||
| Commercial insurance | 16 | % | 15 | % | 15 | % | |||||||||||
| Medicare and other government | 13 | % | 13 | % | 13 | % | |||||||||||
| Self-pay | - | % | - | % | - | % | |||||||||||
| Total | 100 | % | 100 | % | 100 | % | |||||||||||
Results of Operations for the year ended December 31, 2025 as compared with the year ended December 31, 2024
Revenue
The consolidated revenue for the years ended December 31, 2025 and 2024, are as follows (dollars in thousands):
| 2025 | 2024 | % Change | |||||||||||||||
| Net revenue | $ | 727,332 | $ | 660,566 | 10.1 | % | |||||||||||
Revenue in 2025 increased $66.8 million, or 10.1%, as compared to 2024. The increase in revenue primarily reflects an increase in test volumes, a shift to higher value tests, and the positive impact of strategic reimbursement initiatives. Revenues from the Pathline acquisition also contributed to revenue growth, which was partially offset by lower non-clinical revenue due to macro clinical trial trends in the pharmaceutical industry, and a less favorable test mix.
Cost of Revenue and Gross Profit
Cost of revenue includes compensation and benefit costs for performing tests, maintenance and/or depreciation of laboratory equipment, rent for laboratory facilities, laboratory reagents, probes and supplies, delivery and courier costs relating to the transportation of specimens to be tested, amortization for acquired intangible assets, and stock-based compensation.
The consolidated cost of revenue and gross profit metrics for the years ended December 31, 2025 and 2024 are as follows (dollars in thousands):
| 2025 | 2024 | % Change | |||||||||||||||
| Cost of revenue: | |||||||||||||||||
|
Cost of revenue(1)
|
$ | 413,039 | $ | 370,466 | 11.5 | % | |||||||||||
| Cost of revenue as a percentage of revenue | 56.8 | % | 56.1 | % | |||||||||||||
| Gross Profit: | |||||||||||||||||
| Gross profit | $ | 314,293 | $ | 290,100 | 8.3 | % | |||||||||||
| Gross profit margin | 43.2 | % | 43.9 | % | |||||||||||||
_________________
(1) Cost of revenue for the year ended December 31, 2025 includes $18.9 million of amortization of acquired intangible assets and $1.4 million of stock-based compensation. Cost of revenue for the year ended December 31, 2024 includes $19.6 million of amortization
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of acquired intangible assets and $1.4 million of stock-based compensation.
Consolidated cost of revenue increased $42.6 million for the year ended December 31, 2025 when compared to the same period in 2024 primarily due to $23.3 million in higher compensation and benefit costs, an increase in supplies expense of $16.7 million, and an increase in postage and shipping costs of $2.6 million, partially offset by a decrease in depreciation of $3.9 million.
Gross profit margin for 2025 was 43.2% compared to 43.9% in 2024. This 0.7% decrease is primarily related to the acquisition of Pathline as well as higher compensation and benefits costs and supplies expense partially offset by increases in revenue.
General and Administrative Expenses
General and administrative expenses consist of compensation and benefit costs for our executive, billing, finance, human resources, information technology, and other administrative personnel, as well as stock-based compensation. We also allocate professional services, facilities expense, IT infrastructure costs, depreciation, amortization, and other administrative-related costs to general and administrative expenses.
Consolidated general and administrative expenses for the years ended December 31, 2025 and 2024 are as follows (dollars in thousands):
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| General and administrative | $ | 273,337 | $ | 259,737 | $ | 13,600 | 5.2 | % | |||||||||||||||
| General and administrative as a percentage of revenue | 37.6 | % | 39.3 | % | |||||||||||||||||||
General and administrative expenses increased $13.6 million in 2025 compared to 2024. This increase was partially due to an increase in compensation and benefit costs of $11.5 million, increased software development and other technology costs of $8.0 million, and an increase in transaction costs of $1.4 million. These increases in general and administrative expenses for the year ended December 31, 2025 were partially offset by a decrease in legal and other professional fees of $2.1 million, a decrease in equipment maintenance costs of $1.8 million, a decrease in travel costs of $1.3 million, a decrease in amortization of $1.0 million, and a decrease in facilities related expenses of $0.5 million.
Research and Development Expenses
Research and development expenses relate to costs of developing new proprietary and non-proprietary genetic tests, including compensation and benefit costs, maintenance of laboratory equipment, laboratory supplies (reagents), and outside consultants and experts assisting our research and development team, as well as stock-based compensation. Research and development expenses are presented net of research and development tax and expenditure credits from the UK government, which are recognized over the period necessary to match the reimbursement with the related costs when it is probable that the Company has complied with any conditions attached and will receive the reimbursement.
Consolidated research and development expense for the years ended December 31, 2025 and 2024 are as follows (dollars in thousands):
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Research and development | $ | 37,077 | $ | 31,159 | $ | 5,918 | 19.0 | % | |||||||||||||||
| Research and development as a percentage of revenue | 5.1 | % | 4.7 | % | |||||||||||||||||||
Research and development expenses increased $5.9 million in 2025 compared to 2024. This increase is primarily due to an increase in compensation and benefits costs of $2.2 million, an increase in supplies expense of $1.7 million, an increase in software support and other technology costs of $0.3 million, and a decrease in research and development tax credits from the UK government of $1.2 million.
We anticipate research and development expenditures will increase in the future as we continue to invest in development activities for innovation projects and bringing new tests to market.
Sales and Marketing Expenses
Sales and marketing expenses are primarily attributable to employee-related costs including sales management, sales representatives, sales and marketing consultants, marketing and client service personnel, and stock-based compensation.
Consolidated sales and marketing expenses for the years ended December 31, 2025 and 2024, are as follows (dollars in thousands):
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| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Sales and marketing | $ | 92,007 | $ | 84,652 | $ | 7,355 | 8.7 | % | |||||||||||||||
| Sales and marketing as a percentage of revenue | 12.6 | % | 12.8 | % | |||||||||||||||||||
Sales and marketing expenses increased $7.4 million in 2025 compared to 2024. The increase primarily reflects an increase in compensation and benefit costs of $4.3 million, an increase in consulting and other professional fees of $1.3 million, and an increase in travel costs of $0.4 million.
We expect higher commissions expense in the coming quarters as we expand our sales representative force and our sales representatives generate new business. We expect our sales and marketing expenses over the long term to align with changes in revenue and we continue to evaluate the effectiveness of our incentive compensation plans.
Restructuring Charges
Consolidated restructuring charges for the years ended December 31, 2025 and 2024 are as follows (dollars in thousands):
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Restructuring charges | $ | - | $ | 6,658 | $ | (6,658) | (100.0) | % | |||||||||||||||
| Restructuring charges as a percentage of revenue | - | % | 1.0 | % | |||||||||||||||||||
Restructuring charges relate to a restructuring program to improve execution and drive efficiency across the organization. Restructuring charges consist of severance and other employee costs, costs for optimizing the Company's geographic presence, and consulting and other costs.
Restructuring charges decreased $6.7 million in 2025 compared to 2024 due to the completion of the restructuring program in 2024.
Impairment Charges
Consolidated impairment charges for the years ended December 31, 2025 and 2024 are as follows (dollars in thousands):
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Impairment charges | $ | 27,753 | $ | - | $ | 27,753 |
NM(2)
|
||||||||||||||||
| Impairment charges as a percentage of revenue | 3.8 | % | - | % | |||||||||||||||||||
_________________
(2) NM - Not meaningful
Impairment charges increased $27.8 million in 2025 compared to 2024. Impairment charges consisted of an $11.4 million impairment on InVisionFirst®-Lung intangible assets, $15.9 million impairment on the disposal of substantially all of Trapelo's assets, and a $0.4 million loss on InVisionFirst®-Lung inventory write-off.
For further details regarding our impairment charges, please refer to Note 3. Acquisition and Disposals and Note 7. Goodwill and Intangible Assets in the accompanying notes to the Consolidated Financial Statements.
Interest Income
Interest income for the years ended December 31, 2025 and 2024 is as follows (dollars in thousands):
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Interest income | $ | 9,070 | $ | 18,427 | $ | (9,357) | (50.8) | % | |||||||||||||||
Interest income decreased $9.4 million in 2025 compared to 2024. Interest income includes interest earned on funds held in our cash equivalent and marketable securities accounts. The decrease in interest income in 2025 was primarily due to a reduction in the average balance of invested cash and a lower interest rate environment when compared to the same periods in 2024.
For further details regarding our investments in marketable securities, please refer to Note 4. Fair Value Measurements in the accompanying notes to the Consolidated Financial Statements.
Interest Expense
Interest expense for the years ended December 31, 2025 and 2024 is as follows (dollars in thousands):
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| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Interest expense | $ | 3,753 | $ | 6,617 | $ | (2,864) | (43.3) | % | |||||||||||||||
Interest expense decreased $2.9 million in 2025 compared to 2024. Interest expense for the years ended December 31, 2025 and 2024 primarily reflects the effective interest rate on the 2028 Convertible Notes and the 2025 Convertible Notes which is 0.70% and 1.96%, respectively. Interest on the 2028 Convertible Notes and 2025 Convertible Notes began accruing upon issuance and is payable semi-annually. These decreases are primarily attributable to the maturity and settlement of the Company's 2025 Convertible Notes during the second quarter of 2025.
For further details regarding the convertible notes please refer to Note 8. Debt in the accompanying notes to the Consolidated Financial Statements.
Net Loss
The following table provides the net loss for the years ended December 31, 2025 and 2024, along with the computation of basic and diluted net loss per share (in thousands, except per share amounts):
| 2025 | 2024 | ||||||||||
| NET LOSS | $ | (108,025) | $ | (78,726) | |||||||
| Basic weighted average shares outstanding | 128,101 | 126,658 | |||||||||
| Diluted weighted average shares outstanding | 128,101 | 126,658 | |||||||||
| Basic net loss per share | $ | (0.84) | $ | (0.62) | |||||||
| Diluted net loss per share | $ | (0.84) | $ | (0.62) | |||||||
Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures
In order to provide greater transparency regarding our operating performance, the financial results and financial guidance in this press release refer to certain non-GAAP financial measures that involve adjustments to GAAP results. Non-GAAP financial measures exclude certain income and/or expense items that management believes are not directly attributable to the Company's core operating results and/or certain items that are inconsistent in amounts and frequency, making it difficult to perform a meaningful evaluation of our current or past operating performance. Management believes that the presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors by facilitating the analysis of the Company's core test-level operating results across reporting periods. These non-GAAP financial measures may also assist investors in evaluating future prospects. Management also uses non-GAAP financial measures for financial and operational decision making, planning and forecasting purposes and to manage the business. These non-GAAP financial measures do not replace the presentation of financial information in accordance with U.S. GAAP financial results, should not be considered measures of liquidity, and are unlikely to be comparable to non-GAAP financial measures provided by other companies.
Definitions of Non-GAAP Financial Measures
Non-GAAP Adjusted EBITDA
"Adjusted EBITDA" is defined by NeoGenomics as net (loss) income from continuing operations before: (i) interest income, (ii) interest expense, (iii) tax (benefit) or expense, (iv) depreciation and amortization expense, (v) stock-based compensation expense, and, if applicable in a reporting period, (vi) CEO transition costs, (vii) acquisition and integration related expenses, (viii) restructuring charges, (ix) impairment charges, (x) intellectual property ("IP") litigation costs, and (xi) other significant or non-operating (income) or expenses, net.
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The following is a reconciliation of GAAP net loss to Non-GAAP EBITDA and Adjusted EBITDA for the years ended December 31, 2025 and 2024 (dollars in thousands):
| 2025 | 2024 | |||||||||||||
| NET LOSS | $ | (108,025) | $ | (78,726) | ||||||||||
| Adjustments to net loss | ||||||||||||||
| Interest income | (9,070) | (18,427) | ||||||||||||
| Interest expense | 3,753 | 6,617 | ||||||||||||
| Income tax benefit | (2,243) | (1,949) | ||||||||||||
| Depreciation | 36,072 | 39,101 | ||||||||||||
| Amortization of intangibles | 31,752 | 33,446 | ||||||||||||
| EBITDA (non-GAAP) | $ | (47,761) | $ | (19,938) | ||||||||||
| Further adjustments to EBITDA: | ||||||||||||||
|
CEO transition costs(1)
|
3,500 | 330 | ||||||||||||
|
Acquisition and integration related expenses(2)
|
7,266 | - | ||||||||||||
| Stock-based compensation | 41,316 | 33,413 | ||||||||||||
| Restructuring charges | - | 6,658 | ||||||||||||
|
Impairment charges(3)
|
27,753 | - | ||||||||||||
|
IP litigation costs(4)
|
11,283 | 13,753 | ||||||||||||
|
Other significant expenses, net(5)
|
- | 5,392 | ||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 43,357 | $ | 39,608 | ||||||||||
_________________
(1) For the year ended December 31, 2025, CEO transition costs include severance costs, executive retention costs, and executive search costs. For the year ended December 31, 2024, CEO transition costs include executive search costs.
(2) For the year ended December 31, 2025, acquisition and integration related expenses include consulting and legal fees, severance costs, and employee retention costs. There were no such costs for the year ended December 31, 2024.
(3) For the year ended December 31, 2025, impairment charges include losses from InVisionFirst®-Lung intangible asset impairment and inventory write-off, and an impairment loss on the sale of Trapelo Health, LLC assets. There were no such costs for the year ended December 31, 2024.
(4)For the year ended December 31, 2025, IP litigation costs include a legal fees and a settlement payment. For the year ended December 31, 2024, IP litigation costs include legal fees and a settlement payment.
(5)For the year ended December 31, 2024, other significant (income) expenses, net, includes site closure costs, severance costs, and fees related to non-recurring legal matters. There we no such costs for the year ended December 31, 2025.
Liquidity and Capital Resources
To date, we have financed our operations primarily through cash generated from operations, public and private sales of debt and equity securities, and bank debt borrowings.
The following table presents a summary of our consolidated cash flows for operating, investing and financing activities for the years ended December 31, 2025 and 2024, as well as balances of cash and cash equivalents and working capital:
| 2025 | 2024 | ||||||||||
| Net cash (used in) provided by: | |||||||||||
| Operating activities | $ | 5,230 | $ | 7,023 | |||||||
| Investing activities | (12,336) | 12,855 | |||||||||
| Financing activities | (200,288) | 4,646 | |||||||||
| Net change in cash and cash equivalents | (207,394) | 24,524 | |||||||||
| Cash, cash equivalents and restricted cash, beginning of year | 367,012 | 342,488 | |||||||||
| Cash and cash equivalents, end of year | $ | 159,618 | $ | 367,012 | |||||||
|
Working Capital,(1)end of period
|
$ | 287,986 | $ | 294,778 | |||||||
| NEOGENOMICS, INC. | ||||||||
(1) Defined as current assets less current liabilities.
Cash Flows from Operating Activities
Cash provided by operating activities during the year ended December 31, 2025, was $5.2 million compared to cash provided of $7.0 million in the same period in 2024. This $1.8 million decrease was primarily driven by our operating results (net loss adjusted for depreciation, amortization of intangibles, and other non-cash charges) which resulted in $2.3 million of higher cash used by operating activities year-over-year, as well as a $0.5 million decrease in cash used resulting from net changes in operating assets and liabilities.
Cash Flows from Investing Activities
During the year ended December 31, 2025, cash used in investing activities was $12.3 million, compared to cash provided of $12.9 million for the same period in 2024. This change was due to a $33.9 million decrease in proceeds from maturities of marketable securities, a $6.5 million increase in cash used for the acquisition of Pathline, a $0.5 million increase in purchases of convertible notes, and a $0.5 million increase in purchases of equity securities, partially offset by a $14.1 million decrease in purchases of property and equipment and a $2.1 million increase in proceeds for the sale of Trapelo.
Cash Flows from Financing Activities
During the year ended December 31, 2025, cash used in financing activities was $200.3 million compared to cash provided of $4.6 million for the same period in 2024. The cash used in financing activities during the year ended December 31, 2025 consisted of $201.3 million for the repayment of the 2025 Convertible Notes, partially offset by cash provided of $1.0 million for the issuance of common stock net of issuance costs.
Liquidity Outlook
As of December 31, 2025, we had $159.6 million in cash and cash equivalents to support current operational liquidity needs. We anticipate that the cash on hand and cash collections are sufficient to fund our near-term capital, and operating needs for at least the next 12 months. Operating needs include, but are not limited to, the planned costs to operate our business, including amounts required to fund working capital, capital expenditures, continued research and development efforts, and potential strategic acquisitions and investments.
Related Party Transactions
Please refer to Note 16. Related Party Transactions, to our Consolidated Financial Statements for a description of our related party transactions.
Capital Expenditures
We forecast capital expenditures in order to execute on our business plan and maintain growth; however, the actual amount and timing of such capital expenditures will ultimately be determined by the volume of business. We currently anticipate that our capital expenditures for the year ended December 31, 2026, will be in the range of $30 million to $35 million. During the year ended December 31, 2025, we purchased, with cash, approximately $27.0 million of capital equipment, software, and leasehold improvements. We have funded and plan to continue funding these capital expenditures with cash and financing.
Recently Adopted Accounting Guidance
Please refer to Note 2. Summary of Significant Accounting Policies, to our Consolidated Financial Statements for a discussion of recently adopted accounting pronouncements and accounting pronouncements pending adoption.
Effects of Inflation
During the years ended December 31, 2025, 2024 and 2023, inflation did not have a material effect on our business. Widely reported inflation has occurred, however, and may be ongoing for the foreseeable future. Depending on the severity and persistence of these inflationary pressures, we could experience, in the future, a negative impact on our financial results. While we anticipate an increasingly uncertain macroeconomic environment in fiscal year 2026, we will continue to mitigate through targeted pricing and various sourcing strategies. We remain optimistic about our growth opportunities in our key markets in fiscal year 2026.
NeoGenomics Inc. published this content on February 17, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 17, 2026 at 21:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]