Caris Life Sciences Raises Guidance as Growth Decelerates
Caris Life Sciences posted 45% revenue growth in the second quarter, the slowest pace in at least four quarters even as clinical case volume hit a record 59,200.
Caris Life Sciences (CAI) reported second-quarter revenue growth of 45% year-over-year, extending a four-quarter deceleration from 113% in the third quarter of 2024 and 125% in the fourth quarter. The molecular-diagnostics company, whose tumor-profiling tests remain its core growth engine, raised full-year revenue guidance to $1.03 billion to $1.04 billion even as the quarterly growth rate it is guiding around keeps shrinking.
The deceleration is now the defining feature of Caris's results. Revenue growth fell to 79% in the first quarter of 2025 before dropping further to 45% in the second, a pattern that has persisted even as absolute revenue keeps climbing. Sequentially, revenue rose 22% to $263.7 million from $216.2 million in the first quarter, though it remained below the $292.9 million reported in the fourth quarter of 2024. Clinical case volume, a leading indicator for the business, hit a record roughly 59,200 cases in the quarter, up 18% year-over-year and up more than 12% sequentially from about 52,800 cases in the first quarter, when volume had been roughly flat against the fourth quarter.
Profitability told a starker story than the top line. Caris posted a net loss of $0.6 million in the second quarter, following a $0.5 million loss in the first quarter, a reversal from net income of $82.0 million in the fourth quarter of 2024 and $24.3 million in the third. Gross margin, which peaked at 75% in the fourth quarter on roughly $81 million of prior-period true-ups in molecular profiling revenue, fell to 65% in the first quarter before recovering to 68% in the second, still short of the fourth-quarter print. Adjusted EBITDA more than doubled sequentially to $55.7 million from $26.2 million but remained well below the $106.1 million reported in the fourth quarter.
Molecular profiling services, the company's primary growth driver, illustrated the same slowdown at the segment level: year-over-year growth in that business fell to 55% in the second quarter from 85% in the first quarter and 199% in the fourth quarter of 2024. Pharma research-and-development services revenue declined to $11.5 million from $18.5 million a year earlier, a smaller but shrinking contributor. Cumulative test volume kept expanding regardless, with total profiles surpassing 1,130,000 as of June 30, up from about 1,070,000 at the end of the first quarter and 1,016,000 at the end of 2024, while matched profiles reached roughly 845,000.
Operating expenses grew 16% year-over-year to $152.7 million, a slower pace than the 18% growth in the first quarter and 23% growth in the fourth quarter of 2024, suggesting cost growth has moderated in step with or ahead of the revenue slowdown. Cash generation weakened sequentially: operating cash flow fell to $28.5 million and free cash flow to $6.4 million, down from $32.9 million and $22.5 million in the first quarter — a period that had included $30.5 million of annual bonus payments — and further below the $44.8 million and $39.7 million posted in the fourth quarter of 2024. On a year-over-year basis, net cash from operating activities improved 291% in the second quarter, a smaller gain than the 215% improvement Caris reported for the fourth quarter, though the comparison bases differ.
Despite the sequential erosion in margins and cash flow, Caris raised its full-year revenue guidance to $1.03 billion to $1.04 billion, implying 27% to 28% growth, up from the $1.0 billion to $1.02 billion range issued alongside fourth-quarter results. The company also disclosed a new share repurchase program of up to $100 million, with about $82.1 million still available, its first capital-return announcement in the periods reviewed.
Caris also announced the formal launch of Caris Detect, a multi-cancer early detection blood test that had previously been discussed only in the context of pipeline data and study results, including the Achieve 1 study referenced in the first quarter. The move into early-detection testing marks an expansion beyond the company's core tumor-profiling business as it works to offset the slowing growth in its largest segment.