MDxHealth SA (MDXH) 2025 Q4 法說會逐字稿

Good day and welcome to the MDxHealth Fourth quarter and full year 2025 earnings conference call. (Operator Instructions) I would now like to turn the conference over to John Francis with LifeSci Advisors. Please go ahead.

Before we begin, I'd 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. 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've been very consistent in our message and mission that MDxHealth is driven by three 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, his position, MDxHealth is the leader in precision diagnostics focused into the 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 three years. Commercial execution and productivity reflected on our consistent delivery of 20% top-line growth while reducing sales and marketing spend as a percentage of revenue for the past three 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 it 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 five 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 a 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 select MDx customers to ExoDx.

Resulting in accelerated operating efficiencies as we are no longer receiving select MDx samples. We also initiated the integration of our strength and 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 release and 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 earnout from the GPS acquisition, lowering our upcoming earnout payment by close to $20 million.

While deferring by an additional year the full earnout 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 its 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're 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 confirm MDx and GPS, decreased by 5% over the prior year period. Volumes for our liquid-based tests, which include Select MDx, Resolve MDx, 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, a 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, 2024, an increase of 0.5% 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 and 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 of 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. 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 UK Protect randomized trial of over 1,500 men with localized prostate cancer followed for over two decades.

Is 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 are 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 values MDxHealth is the leading growth vision diagnostics company.

(What's our target market, Great deals.) I Am 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.

Thank you. (Operator Instructions) Thomas Flaten, Lake Street Capital Markets.

Thomas is your line muted. Hi, Thomas. Your line opens now.

(Operator Instructions) Bill Bonello, Craig-Hallum.

Hey guys, thanks a lot. I'll take Thomas's question too. So, a few questions. The tissue ASP was down about 100 bucks, 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 get we tend to reflect them based on the Medicare rates confirmed 2000 GPS 3,850 so if We have a 20% quarter or whatever the growth mix is, a 2-point or 3-point swing. It's been balanced as I've communicated. One is in carrying the day on our growth, but a shift in a 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 two 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 expected 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.

Yeah, so a couple parts to that question, Bill. So let me comment, as I signaled, we expected some chop in Q4 and likely into Q1 as we absorb, the acquisition of the ExoDx business. We expect that is 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 two years. If you look at 2024, we grew top-line 28%.

And our we had negative $15 million in EBITDA, negative 20% EBITDA Margin, this year on 20% growth we had a million dollars, and 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 a 10% EBITDA margin.

We view that as a as a 30-point EBITDA margin swing over the last 24 months to 36 months. So full confidence in the ability of our business to absorb our topline or 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'll clear and we're very confident that that swing and it all comes down to the absorption of our OpEx, based on that top-line growth which we're very confident we've been able to hold ours. Core with apples to apples, all of our operating sales and marketing, G&A R&D relatively flat over the past three years on 20% or greater growth.

Hopefully that helps. So that helps. Go right to the, right through to the cashews. Yeah. And then that coupled with the, candidly, the relief on the burnout through our amendment, very confident that quarter by quarter this year that that shows up and flows through our full P&L.

Thanks a lot.

Thank you, Bill.

(Operator Instructions) Andrew Brackman, William Blair.

Hey, this is Kate Jansen on for Andrew. Thanks so much for taking the question. 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, thanks.

Yeah, okay, I think. That we don't really guide to product or segment on the tissue and liquid side. Clearly our, we really had two goals with this acquisition, right.

One was to solve for the challenge we had from in the market with Select. The second really was to drive balance in our growth profile with tissue and liquid, right.

We had 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 ExoDx 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 ExoDx and Q4 which requires a significant focus from our sales and full commercial organization hundreds of customers that we converted successfully in the Q1 we'll continue with the integration of the sales organization from a cross training and customer mapping perspective.

So, a lot of the pieces 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 $137million to $140 million this year.

It will require, which we are very confident in that balance 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 ExoDx 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 and our customer base is our goal.

That's great, super helpful, and then I guess kind of just building off of that now that 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? Thank you.

Yeah Kate, I think you know what we expect to gain is, what I mean by the combined mapping of the customer base right is the ExoDx 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 ExoDx was primary.

But also, a function of where their business was in relation to ours. So, you know if we have a strong ExoDx customer that doesn't read right on our confirmer GPS or vice versa, we view that as the 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 years or 4 years with that goal of 20% or greater growth. It's obviously accelerating this year with the ExoDx.

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.

Okay, great, thanks for the color.

Thanks

(Operator Instructions) Nelson Cox, Lake Street Capital Markets.

Yeah, hey, thanks for taking the questions. Just kind of following up on the Adjusted EBITDA margin 10% equity in 2026. And you've held them optics virtually flat in 2025 and growing the top like 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 in sales and marketing as a percentage of revenue, which I think was 39% ,2025? I mean how much lower. In that go and then It's kind of mid 60% gross margin still kind of the right baseline to have for now.

Yeah, so two-part question there. The first part is as we have this past year, right, going into this year, we're very confident that we can hold our Outbacks relatively fixed, right.

We've 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 and into the next 2 years to 3 years. So, hat 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 that gross margin.

Oh, I'm sorry, Nelson. Yeah, the gross margin what I've stated on the gross margins we've been bouncing around in the low 60's and we're for the last number of quarters, that's where we expected to be and where we needed to be candidly to get to even a profitability pre the Xo acquisition.

We got to that in 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 you know. I think we expect that to continue to arrange there. It's really a function of our expanded menu, right? So each quarter.

We not only see different mix between our four products and our two segments, tissue and liquid, but even within each of those products, each quarter can carry a different to Bill's question at the beginning a different mix by payers, that that leads to the 2-point or 3-point swing by quarter.

But are we aspirational in our gross margin going into the high 60's 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 a 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%.

Perfect, very helpful, thank you guys.

Thanks, Nelson.

(Operator Instructions) Thank you everyone. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.