GeneDx Returns to Adjusted Profit as Growth Slows
Exome and genome test volume reached 30,785, up 32% from a year earlier.
GeneDx Holdings (WGS), a genomic diagnostics company, returned to adjusted profitability in the second quarter as revenue rebounded from the preceding period. Adjusted net income was $0.4 million, improving from an $8.2 million loss in the first quarter but remaining below profits in each of the prior three quarters.
The recovery came as growth continued to moderate. Revenue rose 11% from a year earlier, slowing from 17% in the first quarter and 27% in the fourth quarter of 2024.
Second-quarter revenue was $114.4 million, up 11.9% sequentially from $102.3 million but below the fourth-quarter peak of $121.0 million. The GAAP net loss narrowed to $17.7 million from $63.3 million in the first quarter, reversing from net income of $10.8 million a year earlier.
Exome and genome revenue increased 17% year over year to $100.3 million, while volume rose 32%. That 15-percentage-point gap widened from seven points in the first quarter, extending a shift from the third quarter of 2024, when revenue growth had exceeded volume growth. Adjusted gross margin improved one percentage point sequentially to 70%, though it remained below the 71% reported a year earlier.
Adjusted operating expenses increased to $80.3 million from $78.1 million in the first quarter. Revenue growth reduced those expenses to 70% of sales from 76%, still above the ratios recorded in the second half of 2024.
The results exceeded GeneDx's May guidance: revenue topped the $110 million-to-$112 million range, test volume surpassed the roughly 30,000 target and adjusted net income beat a forecast loss of about $5 million. GeneDx reiterated its 2026 revenue outlook of $475 million to $490 million, a range reduced in May by $65 million at both ends from its original forecast. The company continues to expect at least 30% exome and genome volume growth, at least 20% related revenue growth and positive adjusted net income.
For the third quarter, GeneDx expects revenue of $122 million to $124 million and exome and genome revenue of $110 million to $112 million, with volume rising to 33,200 tests. Cash, marketable securities and restricted cash fell to $133.5 million after six-month operating cash use of $61.4 million. An expanded Blackstone facility and a private placement lifted pro forma liquidity to about $188 million as the company pursued its lowered annual target.