Title

Presentation

Adaptive Biotechnologies Corporation beats earnings expectations. Reported EPS is $-0.13, expectations were $-0.16.

Operator: Good day, and thank you for standing by. Welcome to the 11 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Karina Calzadilla, head of investor relations. Please go ahead.

Karina Calzadilla: Thank you, Anton, and good afternoon, everyone. I would like to welcome you to Adaptive Biotechnologies Corporation First Quarter 2026 Earnings Conference Call. Earlier today, we issued a press release reporting Adaptive Biotechnologies Corporation financial results for 2026. The press release is available at www.adaptivebiotech.com. We are conducting a live webcast of this call and will be referencing a slide presentation that has been posted to the Investors section on our corporate website. During the call, management will make projections and other forward-looking statements within the meaning of federal securities laws regarding future events and the future financial performance of the company. These statements reflect management’s current perspective of the business as of today.

Actual results may differ materially from today’s forward-looking statements depending on a number of factors which are set forth in our public filings with the SEC and listed in this presentation. In addition, non-GAAP financial measures will be discussed during the call, and a reconciliation from non-GAAP to GAAP metrics can be found in our earnings release. Joining the call today are Chad M. Robins, our CEO and Co-Founder, and Kyle Piskel, our Chief Financial Officer. Additional members from management will be available for Q&A. With that, I will turn the call over to Chad. Chad?

Chad M. Robins: Thanks, Karina. Good afternoon, and thank you for joining us on our first quarter earnings call. As shown on slide three, we are off to a strong start to the year, with accelerating momentum in MRD and disciplined execution across the company. MRD revenue grew 53% year over year, reflecting broad-based strength across both clinical and pharma. We also recognized our first primary endpoint milestone this quarter, a meaningful proof point for MRD’s expanding role in drug development. clonoSEQ clinical volumes increased 41% year over year, demonstrating strong continued adoption. We also delivered meaningful margin expansion, with sequencing gross margin increasing eight percentage points year over year to 70%, driven by scale and operational efficiency.

At the same time, we maintained strong financial discipline, reducing cash burn and ending the quarter with approximately $222 million in cash. Given the strength we are seeing in the MRD business, we are raising our full-year MRD revenue guidance to a range of $260 million to $270 million. Kyle is going to provide more detail shortly. Let us now turn to slide four for a deeper look at the MRD business. Our clinical business continues to deliver strong growth, with revenue up 54% year over year. clonoSEQ tests reached another quarterly record of almost 32,600 in Q1, up 9% sequentially. Growth was observed in all reimbursed indications, led by DLBCL at over 19% growth versus the prior quarter. Importantly, we are seeing mounting traction across the key drivers that support durable, long-term adoption.

Blood-based testing reached 49% of MRD volume. In multiple myeloma, a traditionally bone marrow–driven indication, the contribution of blood-based MRD increased to 29%, up eight percentage points year over year. This shift is closely linked to expansion of the community setting, where a combination of favorable guideline updates and implementation of standardized testing protocols contributed to growth rates that outpaced the rest of the business. Community volumes grew 67% year over year and now represent 35% of total testing. Growth in the community business was further supported by our EMR-enabled workflows, which are driving repeat utilization. Serial monitoring orders available to Flatiron-integrated accounts are widely being utilized, and strong initial pull-through rates have further improved with 72% of repeat orders due being fulfilled.

Physician engagement also continues to expand, with the number of ordering clinicians growing 43% year over year to nearly 5,000 in Q1, underscoring increasingly broad acceptance of MRD as part of routine clinical management. Finally, we continue to see increases in pricing, with U.S. ASP growth of 11% year over year to $1,360 per test. Importantly, I am excited to share that clonoSEQ is now listed in the Texas Medicaid policy manual. clonoSEQ is one of only two specific tests included in the newly developed genetic testing section, and patients may receive up to six tests per year. It is great to be pioneers in bringing advanced molecular testing to some of our most vulnerable patients. Our scale, adoption, and embedded workflows support clonoSEQ’s sustained growth and continue to strengthen our leadership position as the market evolves.

Let us now turn to slide five to discuss our biopharma business. We delivered one of the strongest quarters to date in MRD Pharma, with revenue growing 53% year over year, or 33% excluding milestones. As mentioned, we also recognized our first milestone in the U.S. tied to MRD as a primary endpoint, the CEPHIUS trial in multiple myeloma. New bookings were strong, driving backlog to approximately $254 million, up 24% year over year. Bookings came primarily from regulated studies, including several registrational trials where MRD will be used as a primary or co-primary endpoint in both multiple myeloma and CLL. We continue to see increasing use of MRD to guide treatment. Today, we have approximately 20 ongoing interventional studies where MRD is used for enrollment, stratification, or to guide therapy decisions.

As these trials read out, they directly support our commercial business. For example, data from the PERSEUS trial helped establish sustained MRD negativity as a meaningful measure of deeper response in multiple myeloma, which supports broader adoption of clonoSEQ in clinical practice. The momentum we are seeing in the pharma business is likely to be further supported by evolving regulatory trends. The FDA recently introduced a new clinical trial model that incorporates real-time data submission, with early proof-of-concept studies underway, including the TRAVERSE trial in mantle cell lymphoma, where MRD-negative complete response measured by clonoSEQ is a key endpoint. While early, this emerging model for accelerating data review will reinforce the value of MRD endpoints that are objective, quantitative, and longitudinal.

These dynamics are particularly relevant in regulated and registration settings where data quality, reproducibility, and regulatory credibility are critical, and where clonoSEQ is well positioned as a clinically validated MRD assay. Taken together, the trends we are observing support a reinforcing flywheel between biopharma and clinical testing, as adoption of clonoSEQ in drug development generates evidence, strengthens clinical utility, and drives demand in the clinic. To wrap up on MRD, as shown on slide six, we are well on track to deliver against our key priorities for the year. Starting with clinical volumes, we initially guided to over 30% growth for the year. Based on our first quarter performance and continued momentum, we now expect volumes to grow to at least 35% in 2026, with potential for upside.

Importantly, the underlying drivers of growth are already nearing our full-year targets. Blood-based testing is rapidly approaching our goal of over 50% contribution, and community contribution is already at 35%, in line with our full-year expectations. EMR integrations continue to advance, with six new Epic accounts added year to date and five more expected to go live in the next month. In April, we went live with Epic at another of our top 10 accounts, bringing us to seven of our top 10 now being fully integrated. On pricing, we remain on track to achieve our target of approximately $1,400 per test in 2026, supported by recent policy expansions in CLL and DLBCL, Medicaid payment traction, and commercial payer negotiations, with 10 signed in the first quarter alone.

Finally, strong top-line growth combined with continued operational efficiencies positions us to achieve over 70% sequencing gross margin and expand adjusted EBITDA. Overall, our progress across these MRD priorities is a testament to our continued momentum and strengthens our confidence in our ability to meet or exceed our full-year commitments. Turning now to slide seven, our immune medicine programs are progressing well against our 2026 key priorities. We continue to scale our TCR–antigen data sets and advance our AI/ML modeling work. We now have more than 6 million functional TCR–antigen pairs, with data that currently spans about 50,000 antigens and 50-plus HLA types. This proprietary data set enables us to understand TCR–antigen interactions and their role in cancer, virology, and autoimmunity.

We recently confirmed that our digital AI model outperformed the accuracy of existing public benchmarks in predicting TCR–antigen binding. We published this work in Proceedings of Machine Learning Research and presented at the Machine Learning for Health Symposium. Our focus this year is to further improve these models in targeted applications that could be attractive to partners seeking to leverage our data and our digital capabilities. In parallel, we are applying our AI-enabled immune medicine platform to identify the likely disease-causing T-cell receptors and their antigens in select autoimmune conditions. This quarter, we kicked off our RA target discovery partnership with Pfizer. We received over 1,000 patient samples and are on track to deliver the RA data package in 2026.

As we continue to make progress on these 2026 priorities, we are advancing discussions on additional data partnerships, maintaining a disciplined approach to capital allocation, and operating within our expected cash burn range of $15 million to $20 million for the year. I will now turn the call over to Kyle, who is going to walk through our financial results and updated full-year guidance. Kyle?

Kyle Piskel: Thanks, Chad. Starting on slide eight with our first quarter results, total revenue was $70.9 million, representing 45% growth year over year, driven primarily by continued strength in MRD, which accounted for approximately 95% of total revenue. Of note, amortization from the Genentech payments is excluded from all prior period comparisons. MRD revenue grew 53% versus the prior year to $67.1 million, with clinical and pharma contributions of 65% and 35%, respectively. Immune medicine revenue was $3.8 million, down 26% from a year ago, primarily due to timing of sample receipts and processing. Turning to margins, sequencing gross margin, which excludes MRD milestones, was 70% for the quarter, up from 62% a year ago.

This improvement reflects reduced assay costs due to efficiencies from our NovaSeq X launch in 2025, leverage in overhead as we support higher volumes, and favorable pricing trends across both clinical and pharma. Total operating expenses, inclusive of cost of revenue, were $90.1 million, up 10% year over year. This increase was mainly driven by continued investment in commercial and infrastructure, including EMR integrations and reimbursement, as well as higher personnel-related costs. At the segment level, MRD continues to demonstrate strong profitability, with adjusted EBITDA of $12.1 million compared to a loss of $4.1 million in the prior year, reflecting the impact of revenue growth, including milestone revenue, and continued operating leverage.

Immune medicine adjusted EBITDA was a loss of $10.4 million. At the total company level, adjusted EBITDA was a loss of $2.5 million. Net loss for the quarter was $20 million, including approximately $2.9 million of interest expense related to our royalty financing agreement with Orbit. I will now turn to our updated full-year guidance on slide nine. We are raising our full-year MRD revenue guidance to a range of $260 million to $270 million, up from our prior range of $255 million to $265 million. This increase reflects stronger-than-expected clinical volume performance in the first quarter and continued momentum across key growth drivers. This range includes $9 million of MRD milestone revenue, which was recognized in the first quarter, and we do not anticipate additional milestone revenue for the remainder of 2026.

At the midpoint of the guide, this implies approximately 25% year-over-year growth, or 33% growth excluding milestones. In terms of seasonality, we continue to expect MRD revenue to be weighted approximately 45% in the first half and 55% in the second half. We are reiterating our full-year total operating expense guidance, including cost of revenue, of $350 million to $360 million. This reflects continued investment in MRD growth, with approximately 75% of spend allocated to MRD, approximately 20% to immune medicine, and the remainder to corporate unallocated. Importantly, we remain on track to achieve positive adjusted EBITDA and positive free cash flow for the full company in 2026. Overall, the quarter reflects strong financial execution supported by continued revenue growth, expanding margins, and operating leverage.

With that, I will turn the call back over to Chad.

Chad M. Robins: Thanks, Kyle. We are executing well across the business, and the strength we are seeing, particularly in MRD, gives us confidence in both our plan and the opportunity ahead. As we move through the year, we expect to build on this performance and drive additional upside over time. With that, I will turn it over to the operator for questions.

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Operator: We will now open the call for questions. Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while I compile the Q&A roster. Our first question comes from Andrew Brackmann from William Blair. Please go ahead.

Andrew Frederick Brackmann: Hey, guys. Good afternoon. Thanks for taking the questions here. Wanted to ask on community testing. You know, Chad, as you sort of outlined here, I think you are already at the full-year target for the mix that you want coming from the community. Can you maybe sort of compare and contrast for us just the nature of the conversations that you are having with those accounts in particular today versus a year or so ago? You have got so much sort of tailwinds from the blood mix increasing and then also the EMR integration. So how have those conversations sort of evolved over the last year or so?

Susan Bobulsky: Thanks for the question, Andrew. I can help answer that. I think a year ago, if you had asked me this question, I would have said the conversations had shifted from “What is MRD? Why should I care? Why should I do this?” to “How should I do this? Which patients? Which indications? Which use cases? Help me understand more of the practical applications.” And now, a year later, the conversations are increasingly shifting toward practical implementation. We are increasingly getting traction with conversations around protocols and, in fact, have established testing protocols in a number of large community centers and networks. The goal is: let us standardize testing so that all our patients have access to the best care; let us ensure our clinicians are not forgetting about this for their heme patients, who in the community may not make up the lion’s share of the patients they see every day.

That sort of practical, implementation-oriented conversation is more and more the norm, and I think it is a really positive sign for the degree to which MRD is now becoming entrenched as part of the standard of care in the community at large.

Andrew Frederick Brackmann: That is perfect. I appreciate all that color. And then just wanted to ask on the reimbursement front. Obviously, there is a lot of noise out there with respect to CMS and the CRUSH initiative. Can you maybe just remind investors how clonoSEQ is positioned from a reimbursed profile? How you see your rate as durable even if there are changes to things like MolDX nationalization or implementation of prior authorizations? Thanks for taking the questions.

Unknown Speaker: Yes. It is Dave. Thanks for the question, Andrew. We have looked extensively at this question, and after internal and external evaluation with outside counsel, we determined that we are currently not subject to panel reporting requirements for the cycle. There are very specific and defined requirements for PAMA reporting by statute, and your tests must not only fall under the CLFS, or Clinical Laboratory Fee Schedule, but also have to account for over 50% of your Medicare revenue. CMS publishes a list of CPT codes that fall under the CLFS, and the clonoSEQ episode billing structure is not on it. If we go one level deeper, CMS does not identify the MolDX code that we use for billing under the clonoSEQ episodic rate structure as being on the CLFS list.

It is worth noting, as you all know, that the vast majority of our Medicare revenues are generated through the episode rate structure billing under the MolDX program. CMS does consider the PLA code that we use to bill Medicare for MCL recurrence monitoring as being on the CLFS, but our Medicare revenues under the PLA code for recurrence monitoring are well below the 50% revenue threshold set for PAMA for this initial data-reporting period. Separately, as it goes to your durability question, we are pursuing a multipronged strategy that not only includes recurrence monitoring—we are also in productive discussion with MolDX to increase the number of tests per bundle under our episode structure. There are other things that we are looking at. This is of super high importance, and we are all over it.

Andrew Frederick Brackmann: Great. Appreciate all the color.

Chad M. Robins: Thanks, guys.

Susan Bobulsky: Sure.

Operator: Thank you. Our next question comes from David Westenberg from Piper Sandler. Please go ahead.

David Michael Westenberg: Hi. Thank you for taking the question. Congrats on the great job here. So I want to talk about MRD as a primary endpoint. Congratulations on that. Should we think about different things like CDx or on the label, and how should we think about pharma basically helping to push your product because of it beyond the label? And lastly, I imagine there is a lot of power in being able to find patients that are recurring. Is there any potential reimbursement or strategic monetization of maybe getting these clinical patients into clinical trials that were not able to prior to maybe, you know, clonoSEQ and its incredibly high sensitivity?

Susan Bobulsky: Thanks, David. I appreciate those questions, and I think it is an interesting set of topics. First, with regard to primary endpoint, as you heard in Chad’s prepared remarks, we are seeing increasing use of the assay in the pharma setting in terms of regulated studies. And even more beyond that, we are seeing use in interventional studies where MRD is being used to stop or start therapy and to qualify patients that should be enrolled in the study to begin with. That particular trend is extremely favorable for our business because, of course, we are the only FDA-cleared assay in the space. We are extremely well positioned to capture these opportunities. We are also an assay that has extremely deep sensitivity and high specificity, which is really important in the context of interventions where you do not want to be giving patients therapies they do not need, right?

So, the question then comes up: is this a companion diagnostic? Should it be incorporated into studies? There are now the beginnings of studies that are exploring that use case for MRD, although up to this point, the FDA has not taken the position that MRD needed to be positioned as a companion diagnostic within the regulatory context. I imagine that will come up as time goes on. There will be some studies for which that may be appropriate and others not. But regardless of whether MRD becomes a companion or remains a complementary diagnostic for these studies and therapies, it is quite clear that pharma companies are very interested in partnering to ensure that MRD uptake supports the adoption of their therapies. We are already having numerous conversations with our biopharma partners who want to better understand MRD adoption dynamics from our point of view and want to think about how we can work together to expand MRD adoption, especially in the community setting.

And to your question about the concept of clinical trial matching, that is potentially an application of the data that we generate, and we have done some initial exploration. There is some level of interest in that, but more work needs to be done to determine whether and how we may proceed.

David Michael Westenberg: Got it. And if I may, I am going to ask just one more sticking with the clonoSEQ business. DLBCL grew 19% quarter on quarter. That is great, particularly because there is a lot of noise with competition and a competitor having a lot of different presentations. Do you think that you maybe saw benefits from all of the different presentations at ASH and that would be a one-, two-, three-quarter benefit as all these physicians saw that at ASH? Or do you think there is sustainability for something beyond that? Thank you.

Susan Bobulsky: I think that the strength we saw in the DLBCL business in Q1 is very pleasing to see, but also we have seen very strong growth quarter over quarter prior to and since the entry of competition in the space. I am quite confident that the growth we are seeing quarter over quarter is driven by the sustainable moats that we have built and the durable advantages that we have—the brand awareness specifically as a heme MRD test, the technology and its advantages relative to other approaches to assessing MRD, and the broad real-world clinical experience that we have built along with the coverage and the customer satisfaction that we have been able to deliver. All those things have contributed to clinician confidence in utilizing clonoSEQ. As the noise around MRD and DLBCL continues to mount, we are disproportionately benefiting from that as the market leader. And—

Chad M. Robins: I was just going to say, David, just remember it is really early days for MRD and DLBCL in general. Susan mentioned all the reasons that we are well positioned, but we see durable growth over many quarters ahead. The general sentiment is getting doctors to incorporate MRD into clinical practice as a routine measure. We are benefiting not only from noise across the industry, but also, as Susan mentioned, from the fact that we have what we believe is the most sensitive and specific test out there.

Susan Bobulsky: Yes. And, David, we do intend to continue to release additional data in this space, and I think particularly at ASH, we expect that you will have the opportunity to see another round of significant data advance.

David Michael Westenberg: Alright.

Chad M. Robins: Thank you.

Operator: Our next question comes from Mark Massaro from BTIG. Please go ahead.

Mark Anthony Massaro: Hey, guys. Thanks for taking the questions, and congrats on another beat and raise. I wanted to start on the pharma backlog, which increased 24% year over year. And like David said, it is great to see the first primary milestone come in. I think in prior quarters, you have broken out the secondary versus primary funnel. So I am just curious if you could speak to, with just one primary milestone in the bank, what does that look like for you guys over the next couple of years? Is this something that you think can continue? And then can you just remind investors of the economics of the primary endpoint compared to a secondary endpoint?

Susan Bobulsky: Sure, Mark. To start out, I can give you an overview of how the backlog is broken out. We have about 190 active studies, and of those, 111 are either primary or secondary endpoint studies. Twenty-three are primary, and the remaining 88 are secondary. And, Kyle, maybe you want to speak to the economics.

Kyle Piskel: Yes. On the economics front, deal by deal can have its own unique differences, and I will not go into specifics. Generally, primary endpoint milestones are higher than what we have seen historically in the past, which has been the vast majority of secondary endpoint milestones. They will not all be the same dollar amounts, etc., but they are typically a little bit higher.

Mark Anthony Massaro: Fantastic. And then maybe at a high level, can you give us a sense—might be for you, Chad—what inning do you think you are in the EMR integration? I am just basically trying to determine what type of upside you have as we think about getting to full maturity across the EMR systems.

Chad M. Robins: I think one of the most important things is prioritizing going after our largest accounts. Now we are seven out of 10 of our top largest academic accounts integrated. In the community setting in particular is where we are targeting large network practices on EMR integrations. Flatiron gives you certain advantages that Epic does not in that you can turn on a lot of accounts at one time. We have now roughly 150 in the community on EMR integrations. The real point is once you have your accounts integrated, we have a very defined strategy about targeting those accounts for pull-through and how you optimize the EMR. I would say we are early on those, but in the accounts where we have gone in and put that muscle into it, we are seeing really strong results. That is the focal point right now: once we are integrated, how do we go in and optimize those accounts? So, I would say early, but we have a very strong playbook in place.

Mark Anthony Massaro: Fantastic. Thanks, guys.

Kyle Piskel: Sure.

Operator: Thank you. Our next question comes from Subhalaxmi Nambi from Guggenheim. Please go ahead.

Subhalaxmi Nambi: Thank you, guys. Thank you for taking the questions. You have mentioned before having preliminary discussions on increasing the Medicare bundle of tests to over four. Can you give us the latest on the progress in those? Is this a late 2026 or a 2027 opportunity, and what are the steps left in that process?

Chad M. Robins: Yes. It is really hard to predict timing of government contractors and agencies, so I am not going to go out on a limb and try to do that on this call. The only thing I can tell you is that we have a very strong relationship, we continue to develop very strong evidence, and we have had very productive discussions.

Subhalaxmi Nambi: That is fair, Chad. Then can you talk about your progress so far this year related to the structure of milestone payments versus transitioning pharma to a more direct pay-for-service structure? How has that been received by partners, and is there a percentage of total customer numbers you are looking to have transitioned as we progress throughout the year?

Susan Bobulsky: It is a long process. Many of our contracts are multiyear contracts, and the renegotiations come up as those expire. It is going to take some amount of time, some number of years, for us to even get the opportunity to revisit existing contract structures. What I will say is that in the situations where it has come up, it has been a topic of conversation every time, and many of those conversations are still ongoing.

Subhalaxmi Nambi: That is fair. And last one for me, for Kyle—maybe for sequencing margin—what is the ceiling this year, and what will the gross margin progression look like this whole year? Should we expect sequential increases each quarter? Will the full benefit of the NovaSeq transition be realized this year, and what other levers do you have for gross margins?

Kyle Piskel: I appreciate the question, Subbu. As it relates to ceiling, we have talked about 75% as the north star. I think it is a fair step up into that 75% gross margin throughout the year. The utility of the NovaSeq X, as we continue to drive volume, just compounds value for us, and as we continue to improve our price point, you will see more margin improvement throughout the year. It is probably fair to state that as a linear step up through to about that 75% range.

Subhalaxmi Nambi: Perfect. Thank you so much, guys. And sorry to have nitpicky questions because, honestly, the volume numbers are pretty impressive. So thank you, guys.

Susan Bobulsky: No worries.

Operator: Our next question comes from Sebastian Sandler from JPMorgan. Please go ahead.

Sebastian L. Sandler: Great. Thank you for taking the question. My first question is on pharma MRD bookings and conversion expectations. It looks like most of the guide change is on better volume, so I am just wondering if you expect any of the incremental bookings you saw in 1Q to convert to revenues in 2026. I think normally there is a 20% release rate for in-year bookings, so I am just wondering what is baked in there and if there could be any upside to the guidance in that. And then I have a quick follow-up.

Kyle Piskel: Great to see the bookings in Q1 and the increased backlog exiting Q1. As it relates to the guide, pharma is lumpy quarter to quarter. It is a great start to the year. I think we just want to be prudent here in managing expectations, so we will keep it at that 11% to 12% year-over-year growth. That being said, as the trajectory continues and the pace of bookings and pull-through of the backlog increases, it could provide some opportunity to lift the guide in the back half of the year or even potentially next quarter.

Sebastian L. Sandler: Okay. Thank you. And then just a follow-up. It looks like EBITDA for MRD stepped up around $2 million quarter over quarter despite a $9 million pharma milestone. Were there any one-offs we should be aware of? It seems like it might have just been personnel and EMR costs. And then I know you have the total company adjusted EBITDA guide positive by the end of the year, but can you give us any more color on incremental MRD EBITDA margins for the balance of the year and pacing there? Thank you.

Kyle Piskel: Sure. As it relates to the sequential movement from Q4 to Q1, there is a bit of seasonality in our business in Q1 where we have some increased costs that will not recur, and Q4 was also a little bit higher on the pharma revenue versus Q1. That is the majority of the mix. As it relates to EBITDA improvement in the MRD business, if you focus on the base business, it is going to have a continued growth trajectory throughout the rest of the year. I do not want to put anything firm in terms of an EBIT margin at this point, but suffice it to say it is going to continue to grow sequentially each quarter.

Sebastian L. Sandler: Great. Thank you.

Susan Bobulsky: Thank you.

Operator: Our next question comes from Daniel Brennan from TD Cowen. Please go ahead.

Daniel Gregory Brennan: Great. Thank you. Thanks for the questions, guys. Congrats. Maybe just starting off with the 35% volume guide—what do you think the puts and takes would be if you come in above that over the back half of the year, given we have been accustomed to these really strong volume numbers and now you just raised the bar again?

Susan Bobulsky: Thanks for the question, Dan. We are very pleased with the performance in Q1. It is a strong start to the year, and we feel very confident in the 35% year-over-year growth. Could it be higher? Yes, and there is potential for upside. We are just early in the year, so we want to see how our key growth drivers continue to play out. It is the same things we have been talking about: EMR integrations and whether we can drive increased adoption of serial testing and increased pull-through, particularly on the Flatiron system, which allows us to really standardize the ordering approach. We have seen really good results to date from that. The blood-based testing—you saw 29% of myeloma MRDs coming in this quarter in blood—that is a nice step up, and we will continue to look for that as a potential area for upside because we do see increased testing frequency where we see increased use of blood.

Community use—we achieved our goal, as Chad’s prepared remarks indicated, for the full year in Q1; we need to maintain that and continue to see disproportionate growth in that segment. The guidelines we have been promoting and the favorable updates that came last year have been an important component of that. If we can continue to build and implement the pathways I talked about earlier—protocols that dictate how testing will be done in a standardized fashion in large community practices—that is another source of upside. The “takes” are simply that we believe we are in a very strong position, we have the right strategy, we have the right team, and we are the market leader, but we will remain attentive to existing and emerging competition.

That is why it is important for us to maintain a rapid pace of growth, invest appropriately, and solidify all the moats we have been talking about.

Daniel Gregory Brennan: Maybe just talking about the commercial organization, can you remind us of the plan this year—where you stand now, what the targets are by year-end in terms of commercial adds—and what is the balance you are trying to strike with driving profitability while ensuring you have enough feet on the street to stay ahead of competition and maximize the opportunity?

Susan Bobulsky: The short answer is that we think the team we have is the right team to continue to prosecute the opportunity. We have 65 sales reps in the field, split half and half between account managers who focus on academic institutions and diagnostic hematology specialists who focus on community practices. Our reps have manageable index values; they are calling on a reasonable number of accounts and doctors; and they have acceptable amounts of travel time. We always look at individual territory performance and potential, and we may shift or add territories here and there to capitalize on opportunities in specific geographies. Over time, we will continue to look at new deployment strategies that could justify additional hiring, and we are watching the market dynamics carefully in that regard, but we are not expecting to invest in any significant expansions this calendar year.

Chad M. Robins: I will add that some of the areas where we are continuing to deploy capital and invest are EMR integrations, reimbursement and revenue cycle management, and continued data generation to demonstrate clinical utility across all of our indications.

Daniel Gregory Brennan: Great. Thank you.

Operator: Thank you. As a reminder, to ask a question, you need to press 11 on your telephone and wait for your name to be announced. Our next question comes from John Wilkin from Craig Hallum. Please go ahead.

John Wilkin: Hi, guys. Thanks for taking the questions. Just one quick one for me. I wanted to dig in a little bit deeper on the sequencing side of the pharma business. I know you have historically talked about that business being more like a high single-digit grower, and now we are in the second straight quarter where it has grown—I think in Q4 it was 24%, and this quarter over 30%. If you could give a little detail on what is driving that acceleration and if you think that acceleration could be sustainable through the balance of the year? Thanks.

Kyle Piskel: Yes, John, appreciate the question. I think we are seeing a lot of traction in the pharma MRD space. The bookings and backlog are really the drivers of that, and the pull-through is also starting to happen. Additional pharma partners want to generate data and get readouts on their trials. I think it is an opportunity for us to continue to go after, and we are going to be beneficiaries of it. Again, we will hold the guide here right now; I anticipate it will grow throughout the year, but it can be lumpy quarter to quarter.

John Wilkin: Okay. That is helpful. Thank you.

Susan Bobulsky: Thank you.

Operator: This concludes the question and answer session. Thank you for participating in today’s conference. This does conclude the program. You may now disconnect.

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