Personalis (PSNL 1.88%), a precision genomics company focused on ultra-sensitive minimal residual disease (MRD) detection and comprehensive tumor profiling for cancer, reported its second-quarter 2025 results on August 5, 2025. The main headline was a significant shortfall in revenue, which came in at $17.2 million (GAAP), versus analysts’ estimate of $20.1 million, a 24.0% drop from Q2 2024. Earnings per share (EPS) registered a loss of $0.23 (GAAP), slightly better than the $0.24 GAAP loss per share expected, but net losses (GAAP) widened in absolute terms. The period saw a sharp drop in gross margin to 27.6%, falloff of legacy customer revenue, and a downward revision to full-year revenue and gross margin outlooks. Despite these financial pressures, the company posted rapid increases in clinical test adoption, with a 59% sequential increase in clinical test volume, reflecting traction for its key platform, NeXT Personal. Overall, the quarter showed strong operational momentum in the clinic, but was overshadowed by persistent financial challenges and deepening losses.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.23) | $(0.24) | $(0.24) | -4.2% |
| Revenue (GAAP) | $17.2 million | N/A | $22.6 million | (24.0%) |
| Gross Margin | 27.6% | 35.6% | (8.0 pp) | |
| Revenue – Pharma tests and services | $11.0 million | $13.2 million | (16.7%) | |
| Revenue – Population sequencing | $3.3 million | $1.3 million | 158.5% |
Source: Analyst estimates provided by FactSet. Management expectations based on management’s guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Growth Factors
Personalis develops and commercializes testing products for cancer, specializing in genomic analysis for minimal residual disease and tumor profiling. Its flagship product line, NeXT Personal, is an ultra-sensitive MRD test designed to detect early recurrences of cancer using blood samples. The company’s ImmunoID NeXT offering delivers a detailed tumor and immune profiling service, primarily used by biopharma companies for therapy development.
Recent focus for Personalis centers on three main areas: accelerating clinical adoption of MRD testing, building clinical evidence for reimbursement from Medicare and private payers, and expanding strategic partnerships for broader market reach. Success relies on continued technology differentiation, successful reimbursement approval, and reducing dependency on a handful of major customers. Rapid clinical volume growth and data showcasing test sensitivity are central to its “Win-in-MRD” strategy. At the same time, sustainable commercial success depends on broad insurer coverage and diversification of its customer base.
Quarterly Highlights and Financial Performance
The quarter was marked by sharply contrasting dynamics. Total revenue (GAAP) of $17.2 million fell well short of expectations, primarily due to the wind-down of revenue from a significant customer and lower sales in pharma testing. Revenue from pharma tests and services declined to $11.1 million, a 16% drop from Q2 2024. Segment performance reflected shifting sources: population sequencing revenue rose markedly, up 158% to $3.3 million, while enterprise sales sharply contracted. The loss of Natera revenue accounted for a $5.6 million drop, with remaining pharma and other customer revenue down by another $2.1 million. Clinical diagnostic revenues, while still small, increased significantly compared to Q1 2025 (from $308,000 to $469,000, GAAP), but remain too low to offset declines elsewhere.
Gross margin (GAAP) fell to 27.6%, down 8.0 percentage points from the prior year. This compression was attributed to lower total revenue, an unfavorable mix of customers, and higher costs for clinical tests not yet reimbursed. The company’s operating loss (GAAP) increased compared to Q2 2024, and the quarterly net loss (GAAP) rose to $20.1 million, up from a $12.8 million loss in Q2 2024. Cash burn was $13.2 million, with cash and short-term investments totaled $173.2 million as of June 30, 2025 — down from $185.7 million as of Q1 2025, reflecting ongoing investment in clinical adoption.
Despite financial contraction, Clinical test adoption set new highs, with 3,478 clinical tests delivered—a 59% sequential increase over Q1 2025. Management attributed this growth to higher physician adoption, closer collaboration with channel partner Tempus, and growing clinical data in breast and colorectal cancer. Results from ongoing studies presented at AACR 2025 demonstrated that NeXT Personal could detect 100% of clinical recurrences of colorectal cancer before imaging in the VICTORI study interim analysis (71 patients, median follow-up 15 months). Recent studies show that the test detected 100% of patients who eventually recurred in a study of 71 patients with British Columbia Cancer presented at AACR in April 2025, with 87% detected in the early landmark window after surgery and 85% by four weeks. These findings support the push for reimbursement and are being used in submissions to centers like Medicare.
Product developments also featured expanded collaboration with Tempus to distribute NeXT Personal for additional cancer types. This co-commercialization is critical for scaling adoption in the oncology community, especially as Tempus’s larger sales force reaches more physicians. However, reliance on partners also highlights customer concentration risk, as the decline in Natera revenue had immediate impacts on overall sales. Expansion in the population sequencing segment provided a partial buffer, but remains too small a part of the business to offset the loss from key legacy relationships.
Looking Ahead: Guidance and Considerations
Management issued revised guidance, lowering full-year revenue expectations to a range of $70–80 million, down from previous guidance of $80–90 million. Gross margin is forecast to fall to the 22%–24% range for the full year, a material drop from the prior year’s 32% gross margin. Projected net loss (GAAP) is now $85 million, and Cash usage is expected at $75 million for the full year, up from $47 million in the prior year. Management cited variability in biopharma projects and delays in customer orders as continuing sources of risk, and noted that guidance for the remainder of the year assumes key contract awards and successful reimbursement submissions. For the third quarter, company revenue is projected between $12.0 million and $14.0 million — a further drop from the current quarter.
On the strategic front, Personalis continues to emphasize its intention to secure Medicare coverage in two cancer types, with a submission already underway for breast cancer. The company expects that successful reimbursement approvals would improve gross margins, as the current model bears significant upfront costs for tests that are not yet covered by insurers. Areas to watch in upcoming quarters include progress on these coverage decisions.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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