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Presentation

Operator: Hello, and welcome to the Exact Sciences Third Quarter 2025 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Derek Leckow. You may begin.

Derek Leckow: Thank you for joining us for Exact Sciences’ Third Quarter 2025 Conference Call today, November 3, 2025. On the call today are Kevin Conroy, the company’s Chairman and CEO; and Aaron Bloomer, our Chief Financial Officer. Earlier this afternoon, Exact Sciences issued a news release detailing our third quarter financial results. This news release and today’s presentation are available on our website at exactsciences.com. During today’s call, we will make forward-looking statements based on current expectations. Our actual results may be materially different from such statements. Discussions of non-GAAP figures and reconciliations to GAAP figures are included in our earnings press release, and descriptions of the risks and uncertainties associated with Exact Sciences are included in our SEC filings. Both can be accessed through our website. I will now turn the call over to Kevin.

Kevin Conroy: Thanks, Derek. The Exact Sciences team delivered record results in the third quarter. Thanks to the team’s execution, we’re raising our full year 2025 revenue and adjusted EBITDA guidance. A few highlights from the quarter include growing revenue 20% to $851 million, the highest quarterly growth rate in over 2 years. This was driven by Cologuard’s strong brand awareness, inspiring commercial execution, accelerating health systems integrations and a record number of ordering providers. Screening 0.25 million more people in the third quarter versus last year, deepening our relationships with payers and health systems by helping close gaps in guideline recommended cancer screening and launching Cancerguard, our multi-cancer early detection test.

Our team is focused on continued commercial effectiveness, expanding access to Cologuard Plus, and driving adoption of our new tests to close a strong year. I will now pass the call to Aaron to discuss our financial results.

Aaron Bloomer: Thanks, Kevin, and good afternoon, everyone. Total revenue grew 20% year-over-year to $851 million, $43 million above the midpoint of our guidance. Growth was led by screening, which increased 22% year-over-year to $666 million. We saw broad-based Cologuard growth led by strong execution from the commercial organization, care gap programs and rescreens. Precision Oncology revenue increased 12% year-over-year on a core basis to $183 million. Growth was led by continued Oncotype DX expansion internationally, U.S. Oncotype DX volumes and partner revenues. We generated $135 million in adjusted EBITDA, an increase of $37 million or 37% year-over-year. Adjusted EBITDA margins expanded 200 basis points to 16%, driven by continued efficiency efforts across our lab, supply chain, G&A and support functions.

Non-GAAP gross margins were 71%, down 100 basis points versus last year. The reduction was driven by record care gap shipments, which can cause a temporary timing difference between cost of goods and revenue. Free cash flow was $190 million during the quarter, an increase of $77 million. This was driven by increased receivables collections following the Cologuard Plus launch and continued working capital improvements. Year-to-date free cash flow is $236 million, an increase of $173 million or 270% year-over-year. We ended the quarter with cash and securities of just over $1 billion. Turning to guidance. We are raising total full year revenue to between $3.22 billion and $3.235 billion, an increase of $78 million at midpoint. This includes screening revenue between $2.51 billion and $2.52 billion or 20% growth at midpoint, and Precision Oncology revenue between $710 million and $715 million or 9% growth at midpoint.

We are raising our adjusted EBITDA guidance to between $470 million and $480 million for the full year or 14.7% adjusted EBITDA margins at this point. Guidance at midpoint implies more than 47% adjusted EBITDA growth or about 300 basis points of adjusted EBITDA margin expansion. As stated on our last call, our adjusted EBITDA guidance does not reflect any potential impact from the Freenome licensing agreement. The upfront payment of $75 million will be expensed to R&D upon clearance of HSR, and it will not be an add back to adjusted EBITDA. Overall, this quarter marks an inflection point in our business. Momentum is building across the company. Operating leverage is expanding and cash generation continues to strengthen. We are well positioned to achieve our 2027 financial targets and create long-term value.

Back to you, Kevin.

Kevin Conroy: Thanks, Aaron. Strong Cologuard performance was driven by the trust patients, health care providers and health systems have in the Cologuard brand and our commercial organization. The iconic Cologuard brand is recognized by more than 90% of consumers. This brand awareness is driving increased adoption of Cologuard among the 55 million Americans who are not up to date with colorectal cancer screening. To have a trusted diagnostics brand, you need to have best-in-class performance. Cologuard Plus raised the bar for noninvasive CRC screening tests, demonstrating 95% sensitivity and 94% specificity. This performance leads to a 40% reduction in false positives compared to the original Cologuard. A recent modeling study published in the Journal of the National Cancer Institute showed that Cologuard Plus was the only noninvasive screening option shown to be efficient at guideline recommended intervals in age ranges.

We continue to make progress expanding patient access to Cologuard Plus, including positive coverage decisions from each of the top 10 payers. In the third quarter, we also signed contracts with Aetna and Highmark to bring the added value of Cologuard Plus to their members. Backing the Cologuard brand is our patient-centered technology platform, ExactNexus. We’ve spent over a decade building a platform that is deeply integrated within primary care workflows. Our platform connects tens of millions of patient records and integrates access and awareness to accelerate adoption of new tests. Broad insurance coverage, deep provider engagement, health system integrations, and proven product quality allow us to deliver innovative diagnostics efficiently and at scale.

The power of the Cologuard brand and our ExactNexus platform is driving triple-digit growth in a new patient demographic, customer-initiated orders or CIO. This enables individuals to easily request tests ordered online by a telehealth provider directly from their phones. ExactNexus is eliminating friction points for individuals who know they want to get screened with Cologuard. Our commercial engine continues to deliver strong results. The sales team is energized by territory realignments, AI-powered efficiency tools and new products, Cologuard Plus and Cancerguard. The changes we made are working. In the third quarter, we had over 12,000 providers order a Cologuard test for the first time, the greatest number in over 5 years. We also saw the number of active ordering providers climb to over 200,000, a new record.

Our commercial team is firing on all cylinders, and they’re just getting started. All these efforts will have a lasting impact and fuel momentum in Cologuard rescreens. Rescreens represent the growing base of patients that rely on Cologuard every 3 years to stay up to date on colon cancer screening. Today, these patients make up more than 1/4 of our total screening volume. In the third quarter, we launched Cancerguard, our multi-cancer early detection test. With a blood draw, Cancerguard screens for more than 50 cancer types and subtypes. This launch is a major step forward in our mission to help eradicate cancer through earlier detection. Today, only 14% of cancers are found through screening. Cancerguard will help address this problem. We are bringing Cancerguard to patients through many channels to maximize patient adoption, including primary care physicians, health systems, concierge practices and our CIO platform.

We are leveraging our large sales force to educate providers about Cancerguard. In the third quarter, we trained the first group of sales reps on Cancerguard. We plan to train our entire screening and precision oncology commercial teams in the U.S. by the end of the year. On October 1, we launched our consumer-initiated ordering platform that allows people to request a Cancerguard test directly from our website and builds on the learnings of Cologuard CIO capability. Starting in the fourth quarter, we are investing in direct-to-consumer marketing, including social media campaigns to drive awareness of Cancerguard. Drawing on a decade of consumer marketing experience with Cologuard, these efforts leverage our trusted brand with the message that Cancerguard comes from the makers of Cologuard.

We are excited about the launch, and we look forward to sharing more over the next few quarters. Our Precision Oncology team continues to be a global platform for growth. Oncotype DX delivered solid order growth globally in the third quarter. The strong summer was supported by effective commercial execution and the recent expansion in screening guidelines to include younger age groups. We are seeing positive momentum across our Precision Oncology portfolio, including OncoExTra, Riskguard and our recently launched MRD test Oncodetect. The Oncodetect launch is progressing well. We’re seeing encouraging utilization in colorectal cancer and meaningful traction in breast cancer driven by synergies with Oncotype DX. Turning to our pipeline. One of our guiding R&D principles is to invest in areas where we can help patients the most.

We have broad technological capabilities through our multi-omic platform, including our proprietary PCR and also deep next-generation sequencing capabilities. These technologies form the backbone of our novel tests. Our platform allows us to advance multiple single cancer screening tests in areas of significant needs such as liver, esophageal and endometrial cancers. Current screening methods for these cancers are outdated and lack effectiveness. Next week, at the liver meeting, the flagship International Congress hosted by the American Association for the Study of Liver Diseases, we will present ONCOGUARD liver data from the ALTUS study, A-L-T-U-S. This readout underscores the test potential to transform liver cancer surveillance for at-risk populations.

During the fourth quarter, we will share data supporting Oncodetect’s use in triple-negative breast cancer. In 2026, we also look forward to sharing clinical validation data in launching the next-generation version of Oncodetect that leverages our MAESTRO technology. We are investing in MRD evidence generation to support reimbursement and adoption. We have over 10 clinical validation studies planned over the next few years, including 4 key studies in breast cancer, colorectal cancer and pan-tumor indications. I’m very proud of the strong third quarter, the Exact Sciences team delivered. Our best-in-class products, trusted brands, patient-centered platform and commercial execution provide a foundation for long-term growth as we continue to make transformative new tests available to physicians and their patients who need them.

We’re now happy to answer your questions.

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Operator: [Operator Instructions] Your first question comes from Vijay Kumar with Evercore ISI.

Vijay Kumar: Kevin, congrats on a nice spring here. My 1 question is on just the performance in the third quarter, quite remarkable here now for screening. Can you talk about what drove the speed, right? Was this care gap versus rescreens versus first-time rescreens? And related to that, I think the Street is looking at like 14% screening growth for 2026. You guys have done 20% year-to-date. So I’m curious on how — any early comments on 2026.

Kevin Conroy: Sure. Thank you, Vijay, and I’ll let Aaron take the second part of that. But the first part, let’s go back a year ago when we had a challenging quarter. The team really came together. I’m incredibly proud of the work that they did to deepen our relationships with health systems to design territories, allowing us to have total ownership of those territories, making more calls with better targeting, stronger messaging, so that you can really bring the Cologuard brand, which is known for its high — strong test performance, sensitivity and specificity. Through our ExactNexus platform and then also bringing new products. So this is a total commitment on the part of leadership, and really more so on the part of our frontline sales force, our team members who are out there every day doing important work.

And that’s both on the screening side and the precision oncology side. So we could not be more proud of the work that is done, and we think that this sets us up for lasting growth and a flywheel effect so we can get those 50 million Americans who are not up-to-date with screening screened.

Aaron Bloomer: And then, Vijay, specific to your comment on 2026, I think it’s important to keep in mind the long-term guide that we have sitting out there, which is a 15% compounded annual growth rate from 2022 through 2027. And as you referenced, we’re obviously accelerating in growth here through the back half of the year. The full year guide for screening is at 20%. The back half of the year is obviously even north of that. And so obviously, we’re pacing ahead of our long-term goal, but it’s important to note, our normal practice would be to provide our 2026 guidance at our next earnings call as we review the fourth quarter and look ahead to next year. Obviously, as Kevin alluded to, really pleased with the progress on the commercial side, the momentum that we have with care gaps, and then there’s a lot of work we have to do in the coming months on Cologuard Plus contracting as well.

Operator: The next question comes from Tycho Peterson with Jefferies.

Tycho Peterson: Two hopefully quick ones. Aaron, maybe just on the care gap strength. How should we think about that continuing and then impact on margins going forward? And then for Kevin, can you just talk a little bit more about the Cancerguard strategy with payers and how you’re thinking about reimbursement? Obviously, 1 of your competitors has a CRC first path on MCED reimbursement. So how do you kind of think about that as an approach versus where you’re headed?

Aaron Bloomer: So on the first part, Tycho, we had a record quarter in terms of our care gap business. We had our largest orders go out in the third quarter. And how we’re thinking about this is we’re really investing in our care gap program. Obviously, it’s slightly lower gross margins, but highly accretive to the total bottom line. And this is really giving us an opportunity to partner with payers, helping them achieve their quality measures. It’s also really helping us with patients, getting more and more of that 50 million to 55 million patients out there and get them up to date with screening. And so we view this as an investment that’s really bringing accelerated growth here in the back half of the year, that obviously has both near-term as well as long-term patient and financial impact.

As it relates to the gross margins, we would expect to see an uptick in the fourth quarter as we will have less care gap shipments go out in the fourth quarter relative to Q3. And again, as a reminder, these are typically back-half weighted. I think we’ve said in the past, more than 2/3 of the revenue kind of comes in the back half of the year.

Kevin Conroy: Yes. As for the second question, as we talked about with Cancerguard, Cancerguard is priced at $689 distinct from other Medicare covered tests. We think the approach is being taken by others. It’s an interesting approach. I think the more sustainable approach given the regulatory context and compliance context is to keep those 2 tests separate in the Medicare population in terms of the playbook to get coverage across Medicare and commercial payers, we think that, that is a long-term game, and we think that the work that is being done in this field by GRAIL, by Exact, by others, is work that will eventually captivate the payers to recognize the positive impact that screening can have. And that’s the way that we look at this space.

Operator: The next question comes from Patrick Donnelly with Citi.

Patrick Donnelly: Kevin, maybe to stay on the screening side, can you just update us the latest on the time lines around Freenome? I know V2 is looming the FDA would love just an update on some of those time lines. And then on that same topic, just how you’re thinking about your internal program? I know you kind of keep it going? Maybe just an update on how you’re thinking about the 2 combined there. I appreciate it.

Kevin Conroy: Really, thanks for the question. Really no changes there at all. In terms of the from Freenome V2 time lines. We expect that data to be presented in conjunction with a scientific conference sometime in the next few months. In terms of our internal program, yes, that continues. We haven’t given more of an update there other than to say the Freenome test is now the exact test. We’re really looking forward to making that available to physicians and patients through our deep network of providers that we have a relationship with over 200,000 ordering in the last quarter, over 250,000 total and our incredible commercial reach. So we’re excited about bringing our blood test subject to regulatory approvals to clinicians and to patients.

Operator: The next question comes from Brad Bowers with Mizuho.

Bradley Bowers: Just wanted to hear about kind of the Cologuard to Cologuard plus Sunset plan. I would imagine, it sounds like you’re more aligned with payers than ever and payers would want to have their members on the better test. So I just wanted to kind of hear about how you’re thinking of pacing?

Kevin Conroy: Well, thanks for the question. And yes, the Sunset plan is — it’s in the works. We — I haven’t provided public details of that at the appropriate time, we will. What’s important is what you pointed out is that Cologuard Plus is a better test. There’s no screening test that we’re aware of that has 95% sensitivity and 94% specificity, no noninvasive test. And as a result, we are in active discussions with payers. The top 10 payers we’re proud to report have all covered Cologuard. So they’ve issued a positive policy decision that Cologuard Plus is covered. And now we’re in discussions with 6 of the remaining 10 to contract. So 4 are contracted, 6 remain and the — there’s a long list of additional smaller payers that we are focused on as well.

And at some point next year, we will sunset Cologuard so that Cologuard Plus will be the test available to all patients. We think that’s the right thing to do. It’s incredible technology. It’s differentiated, and it’s good for patients.

Operator: The next question comes from Catherine Schulte with Baird.

Catherine Ramsey: Maybe just on your overall portfolio. You have some new products now with Oncodetect now covered by Medicare and Cancerguard launching. Are either of those material contributors in ’25? And how should we think about measurements for success as those ramp in ’26?

Kevin Conroy: Thanks, Catherine. We do have these wonderful new products. As we’ve said from the beginning of the year, we don’t expect them to be material in terms of the overall mix of revenues. Over time, we expect them to be very material. And those are big markets. They take time to penetrate. And we are pleased in terms of how they are progressing. Cancerguard, of course, just launched within the last couple of months. And as a result, that’s nascent. But we’re excited about what we’re seeing and the growth that we have seen, not only week over week, but day over day. And we have big expectations there. And with Oncodetect, and I’m sure there will be more questions more in depth there. But we are doing all of the things you need to do in terms of getting the scientific evidence to secure a broad base of coverage so that we can go out there and serve patients in this large and growing opportunity. It’s — we’re excited about it.

Operator: The next question comes from Brandon Couillard with Wells Fargo.

Brandon Couillard: Aaron, could you give us a sense of what Cologuard Plus contributed to screening growth in the quarter? And where you see that mix exiting the year? And Kevin, would be great to get an update just on care gap compliance and how that’s playing out. And if you’ve been able to move the needle more using your compliance engine maybe relative to where you were 12 months ago?

Aaron Bloomer: Brandon, thanks for the questions. On the first part, as it relates to Cologuard Plus, so when we originally did the guide for the year, we expected a couple of points in terms of contribution to growth coming from Cologuard Plus pricing and mix. What we saw in the third quarter, just given some of the progress we had made and updated everybody on the last call with Medicare and 2 of the top 10 payers, we were kind of in the 200 to 300 basis points range in terms of price impact on overall screening growth rates. With now having 4 of the top 10 plus Medicare, we would expect kind of in the 300 to 400 basis points impact on growth in terms of the fourth quarter. And you kind of package that all together, those 4 payers plus Medicare represent approximately 30% of our volume, which is where we will be exiting then as we head into 2026. And as Kevin alluded to earlier, obviously, in active discussions with the remaining top payers as well.

Kevin Conroy: Thanks, Brandon. In terms of care gap compliance, let me first just remind folks what care gap is. Care gap is what we refer to payers who are approaching us to help them improve their CRC screening rates within their membership. And unfortunately, again, about half of the population in the U.S. eligible for colon cancer screening is not up today. And payers care about it. Health systems also care deeply about getting more of their members screened and capacity is limited with GIs having pretty much full capacity across the country. So what is occurring is they’re approaching us to help get an order initiated, prescribed by a physician so that the patient gets a Cologuard kit. In terms of compliance, we see room for improvement there, Brandon.

In terms of total volumes, we’re seeing a significant year-over-year increase. As you may know, FIT programs, care gap program started about 20 years ago. That has been the predominant way to fill those care gaps. Many payers and now health systems are converting to Cologuard because they see an opportunity to secure a longer duration of somebody being screened and therefore, getting 3 years of credit versus 1 year of credit. And then also, they have fallen in love with our compliance engine, our ability to engage with patients. But the patients that we get are typically people who have refused screening over and over again. So I think it’s just going to take more work for us to get the uplift we know we can with care gap compliance. We’re pleased with the volume increase and the people we’re getting screened that this, over time, we think can be even more impactful.

Operator: The next question comes from Puneet Souda with Leerink Partners.

Puneet Souda: First one, just wanted to understand the 6 commercial payers that are not in paying for Cologuard under the contracted rate, when do you think they will be contracted? If you can provide some time line on that? I’m just wondering, Kevin, on CRC blood, how are you thinking about pricing. And if the data was positive for V2, how are you thinking about pricing there?

Kevin Conroy: So in terms of the contracting for Cologuard Plus with the remaining top 10, all I can say, Puneet, is that we continue to work with those payers. Eventually, we will sunset Cologuard and move all payers — really move all patients to the newer and better tests. We have great relationships with the payers, and we have high hopes for getting that done sooner rather than later. So we won’t be providing time lines there, but it’s — we’re making strong progress. And then in terms of CRC blood pricing, we haven’t decided that yet. Our philosophy around how we price our test is to secure the broadest access and impact. If you look at the effectiveness of a screening program, it equals the sensitivity of a test times the access that people have for the test and compliance.

And those factors are the factors that impact screening. Access is so important. Commercial payers are sensitive to price, and they look at the performance of a test as part of that mix. So that’s been our philosophy, how we end up pricing a blood test is probably going to be within our greater philosophy of bringing value to patients and to payers in a greater health care ecosystem. We think it’s 1 of the reasons Cologuard has been such a wonderful success because of where we priced it relative to colonoscopy.

Operator: The next question comes from Jack Meehan with Nephron Research.

Jack Meehan: Just had a couple financial ones I wanted to ask. First is just more color on the $150 million cost savings program you’ve talked about in the past. Just how is that progressing and how you think that steps up into 2026? And then last quarter, you had the accounts receivable stepped up because of the timing of the Cologuard Plus payments. I was just wondering if you were fully caught up on that. It looked like yes, but I wanted confirmation.

Aaron Bloomer: Jack. So on the first piece around the productivity program, really pleased with the progress that we’ve made. Just as a reminder, what we committed to was to deliver $150 million in savings in 2026, which would be about $100 million year-over-year impact. We’re progressing very nicely against that. The actions that we need to take to deliver against that have been taken. If you think about the other component to that is the onetime expenses. And last quarter, we guided to kind of $90 million to $95 million in 2025 and then $105 million to $120 million in total. We’re going to come in a little bit lighter on that, which is a good thing. So we now expect approximately $85 million in terms of onetime expenses for this year.

So making good progress and the team is executing against that nicely. As it pertains to the AR, yes, all of the AR from Q2 related to Cologuard Plus has now been collected on in the third quarter. And maybe just take a step back on just the progress that the teams have made across Exact to really lean in and deliver record amounts of free cash flow for the company. On a year-to-date basis, we’re at $236 million. And obviously, the strength in the third quarter obviously came from collecting on the Cologuard Plus claims, but also all of the progress that the teams have really made in terms of working capital improvements. So inventory optimization as well as renegotiation of payment terms with suppliers. So really, really pleased with the progress that the team has made across the company.

Operator: The next question comes from Dan Brennan with Cowen.

Daniel Brennan: Congrats on the quarter. Maybe just one. I know Aaron, in the past, you’ve typically updated in terms of the contribution within the screening guide between the different buckets, whether it’s first-time users or care gap or rescreens, you’ve given some color. I wonder if you can disaggregate that, like how you’re thinking about that for the year and maybe for the fourth quarter? And then just any comment on OpEx. Sales and marketing kind of was below our expectation. R&D was above. Just wondering kind of moving pieces, as we head into the fourth quarter, how we think about like the different buckets within OpEx.

Aaron Bloomer: Thanks, Dan. So we saw broad growth in the third quarter, really across all lines of business. And no matter which way you cut it, 50-plus, 45 to 49 rescreens, care gaps, CIO, all elements of the business was growing north of double digits. So really pleased with the progress. All of the commercial improvements that Kevin alluded to earlier, we’re really seeing that flow through, not only in the leading indicators in the sales rep productivity, but now obviously also into volumes. I think we talked at length already about care gap and the record amount of volume that we’re seeing there as well. Just in terms of some of the OpEx items, yes, R&D spend did step up a little bit in Q3. We would expect similar levels of spending in Q4.

A lot of that is tied to all of the clinical evidence generation and the work we’re doing to continue to improve our Oncodetect test and get additional cancer indications on that into the future. In terms of sales and marketing, Kevin talked about that earlier as well, but we would expect and are investing in our Cancerguard launch, particularly as it pertains to marketing and then you’ll probably start to see whether you’re watching on YouTube or Netflix or any of the other social channels, you’ll start to see some Cancerguard ads start to take flight here as soon as this week.

Operator: The next question comes from Doug Schenkel with Wolfe Research.

Douglas Schenkel: Just a couple of questions. So first on seasonality. The fourth quarter has typically been a seasonally weaker quarter due to the holiday season. Obviously, your guidance implies this is not the case this year. Some of that, I think, is just the assumption that ASP is going to increase sequentially. I think the balance of that is care gap. Do I have that right? And if so, is that probably the right way to think about your business moving forward, meaning not just this year? And then my second question is on CRC blood, it may be too early, but I’ll ask anyway. I’m just wondering if you have a good handle on how to manage that launch in a way where there is no channel conflict. And as we think about the P&L, at least in terms of gross profit per test, is there a way to price that test in a way where there’s — we’re going to see the same level of gross profitability, whether it’s stool or blood.

Again, it’s early, but just curious if you guys have given any thoughts to that, that you’d be willing to share?

Aaron Bloomer: I’ll start maybe the first piece there, Doug, just on the seasonality. Care gaps obviously are just with the tremendous demand that we’re seeing from payers are becoming a larger part of our business. And again, given the lumpy nature that those programs have, i.e., they’re back-end loaded. That certainly would distort some of the more traditional seasonality trends that we had in our business. And I would just flag in particular, if you think about this Q4 guide and then what that implies for a typical Q4 to Q1 step down in terms of sequential growth as we head into 2026. And again, all driven by the strength in demand in our care gap programs. You did hit on pricing. Pricing will be up slightly sequentially from 3Q to 4Q, but that’s really only about 100 basis points in terms of the overall uplift.

Kevin Conroy: And for the second part of the question, Doug, around CRC blood and our launch of our CRC blood test we license from Freenome. We will take lessons from the launch of Cologuard and the launch of Cologuard Plus and our unbelievable analytics around what patients have refused Cologuard or even colonoscopy over time so that we can get the right test to the right patient at the right time. And that right test may be a blood test for a patient who has consistently refused colonoscopy or a stool test. So that’s important. It’s — there are a huge number of people that are in that refuser camp and getting them tested with a test that has lower performance is better than no test at all for sure. We will price that in a way so that we can maintain margins as much as possible.

But we just don’t see a conflict here because we’ll be out there educating physicians, clinicians, PAs, nurses about what patient population is appropriate for each test. So we think of this has expansive. The way we think about this program is expansive to where we are today with growth. And because of the fact there are 50 million people not up to date with screening, there’s plenty of room for growth, significant growth with Cologuard and with our CRC blood test.

Operator: The next question comes from Andrew Brackmann with William Blair.

Andrew Brackmann: Kevin, I think you made a comment that you’re seeing encouraging signals with the MRD launch and in particular, in the breast indication. Anything more you can share with respect to how you’re sort of thinking about the halo effect that Oncotype brings to that indication in particular? Any signals or color that you can provide there?

Kevin Conroy: Yes. Thanks, Andrew. It’s been 21 years of Oncotype depth among oncologists, surgical oncologists, pathologists. The customer trust us with that tissue block. They trust us in the breast cancer space. So as you think about the adoption curve, in breast cancer, we think that is a natural starting point for us. Also our strength in colon cancer is also a natural starting point. The studies that we are doing in breast cancer include what we call the Exact DNA 003 test, which is — or study. That’s a study enrolling over 1,800 participants, with the — in conjunction with NSABP. And then also, we are enrolling a pan-tumor study that has enrolled across 10 different tumor types, including lung cancer. And so we — the evidence is going to mature.

And as we get breast cancer coverage, we expect to be able to really start to more deeply penetrate that customer base. And we’re excited about the ability to do that. The other thing that will unlock value is the MAESTRO technology which is whole genome approach for our next version, and we expect that to launch through 2026. It would be used to support other indications. It’s important to start with breast. The ability to look broadly across these thousands of different mutations while reducing the sequencing depth and achieving this ultra-low limit of both potential below 1 part per million at an attractive cost point is a differentiator. And so that is work to be done. It’s a huge market. It’s growing. It’s underpenetrated at the current time, and we think that our commercial organization and reputation among oncologists will be a great starting point.

Operator: The next question comes from Dan Arias with Stifel.

Daniel Arias: Aaron, maybe just following up on rescreening. What percentage penetration are you assuming that you’ll be able to achieve there this year? I know you were thinking mid-50s as a percent back in the starting — at the start of the year. That feels a little light just given the strength here, but would love to know just what an updated view would be and whether you think that number should move higher next year.

Aaron Bloomer: So rescreens continue to kind of be in that mid-50s to high 50s. We’ve continued to make progress on that throughout the year, Dan. I think if you take a step back, 1 of the things that we’re really trying to do is automate the rescreen process. And there’s a number of different things that we have in flight to be able to do that. And what we have said is that over time, we think that we can get that up into the 70% or 75%. And the reason for that is because we know that the key to getting people rescreened is getting that prescription. And that once we get the prescription and ship the kit back to that patient, we know that the compliance rate is anywhere from 80% to 95%. And so that’s what we’re laser-focused on right now. No more to update on that. We’ll keep you all posted as to what that means for future financial guidance.

Kevin Conroy: Yes. The goal really is to automate the screening process so that people get screened and stay screened throughout the duration of the recommended screening time period. That’s important. It’s one of the unique things that we can do with Cologuard and the ExactNexus platform that we have invested so heavily in over the last decade.

Operator: The next question comes from Bill Bonello with Craig-Hallum.

William Bonello: I wanted to follow up on the telehealth comment that you made, the consumers or patients being able to order directly. Can you just talk a little bit about how that then integrates with the primary care physician, if you have that information or are able to get that information. Does that information get channeled back to the PCP? Would the PCP still get quality credit for that patient being screened? Is there any potential conflict there if the test is ordered via you rather than being prescribed by their PCP? How do we think about that?

Kevin Conroy: Well, thanks, Bill. Yes, that’s something that we’re really sensitive to as we rolled out not only CIO, this customer-initiated ordering but also rescreen and care gap programs. And 1 of the beautiful things about the ExactNexus platform and the power, which is powered by Epic is that the MyChart account gets integrated ultimately, and we’re — that may take the next couple of years to really bring that to its maximum impact. That allows patients and physicians to see any type of test that is performed anywhere ultimately gets back into one single electronic medical record. We — so that then enables a physician to get full credit for all of the screening regardless of whether they initiated it, and allows payers, which are on — moving to the payer platform that allows them to see that as well.

It’s a powerful tool, us being on Epic, one of the nodes of Epic really creates the ability for us to do some pretty unique things in terms of managing the health at a population level. This is 1 of those really positive stories.

Operator: The next question comes from Mike Ryskin with Bank of America.

Michael Ryskin: I want to follow up on a couple of points you guys touched on earlier. I mean, first, the gross margin you called out, I think 100 bps headwind, I think you kind of tied to the record care gap strength. Just to make sure just relatively speaking, talking about care gap being strong again in 4Q. Is that relatively the same impact we should expect then? And then just to make sure I got it right, reverses in 1Q and 2Q just from the seasonality. So I just want to make sure I got the moving pieces right there. And then I’ll throw on a follow-up at the same time. I want to bridge the revenue raise to EBITDA, really solid beat, obviously, a nice raise. But even it didn’t come up quite as much. Is that the gross price impact, that difference there or maybe some of the incremental R&D investments you talked about earlier, I think when Dan Brennan was asking on OpEx. Just kind of talk about the lines between GM and EBITDA?

Aaron Bloomer: There’s a lot of questions there, Mike. I’m going to do my best to unpack all of those. So on the gross margin piece that we saw in the third quarter, yes, it was exclusively limited to just kind of the record demand that we saw within our care gap programs. We would actually expect 4Q gross margins to step up. And if you look at kind of where consensus gross margins are in the fourth quarter, it does imply a step up, and we certainly would expect that as well. And the reason for that is because we don’t actually ship as many care gap programs out in the fourth quarter as we do in the third quarter or the second quarter. And the reason for that is because the payers, again, really want to try to get patients screened through their PCP early on in the year and then kind of turn to these larger care gap programs as you get into the middle part of the year, they want to ensure that they achieve their quality score.

And so then we would expect an uplift in 4Q as well as then in 1Q of 2026. On your question as it relates to the flow-through and the EBITDA guide, I think it’s an important point to, to just kind of take a step back, which is this is going to be our second consecutive year with nearly 50% adjusted EBITDA growth. Margins in the back half of the year are going to be in the 16% to 17% range and well on our way to achieving the long-term goal that we have of 20%. If you look kind of down the P&L line, where we’re seeing the most amount of leverage right now continues to be from G&A. We’ve talked about the productivity plan, G&A as it stands already right now, it will be down about 700 basis points on an adjusted basis versus where we were 2 years ago.

But we have said that this year was going to be a year of investment. Some of — on the R&D side, Kevin just talked about some of the areas we’re investing as it pertains to MRD and the clinical evidence generation that we want to generate in that very, very large underpenetrated market. And then in the back half of the year, really on sales and marketing expenses, specifically marketing for Cancerguard. Again, very, very large market. We don’t have to add salespeople to be able to get after that. We really want to tap into this large market that exists, and we’re putting our full back behind that and look forward to sharing updates in coming quarters and years on how that launch is progressing.

Operator: The next question comes from Subbu Nambi with Guggenheim.

Subhalaxmi Nambi: A couple of model cleanup questions and then 1 topic on Cancerguard. What were the Cologuard ASPs this quarter? Were they up quarter-over-quarter? And did I hear you right that Cologuard volumes grew 250,000 tests year-over-year? That’s one. And on the topic of Cancerguard, you have an unparalleled PCP commercial infrastructure. That said, given this is largely a cash pay market at this point, I’m curious how impactful you expect the PCP commercial infrastructure advantage to be?

Aaron Bloomer: On your first point, Subbu, the ASPs were up sequentially from Q3 versus Q2, and we would expect them to be up sequentially again in 4Q versus 3Q. And yes, we screened more than 0.25 million people more this quarter than we did a year ago at this time. Let’s say that again. We screened in this quarter more than 250,000 more patients than we did a year ago. So yes, those are the modeling questions that you had. And then Kevin, maybe you want to take the Cancerguard question.

Kevin Conroy: Yes, I think it’s a good question. Subbu, as I’ve been out talking with our field reps, one of the things they’re acutely aware of is which offices in their territories have patients that would be willing to pay for a Cancerguard test. And so that will become an important part of our sales forces conversations. It will get them more access. We believe we’re seeing that happen already. It is — you’re bringing up a good point. It’s not easy to — in the U.S. health system to get people to pay out of pocket for a novel technology, but something that is important as a multi-cancer screening test, we believe we will see uptake here. It will take some time, just like Cologuard did. We’re pleased here in the early month or 2, the early days of this launch, and we think that a significant advantage will not only be our frontline sales reps, but also the relationships that we have with health systems.

We’re trusted because they trust us with the quality of the tests that we develop and bring to them, the ability to electronically order and get resulted for a test, our customer service. They know that they can call us any time, day or night and get an answer that is needed. So all of this ecosystem, our human capability, our systems capabilities are important. Another part of our company that is important is you remember back when we acquired Genomic Health, one of the 3 things we said that was important that we loved about Genomic Health was their international reach. Cologuard has much broader applicability outside the U.S. than even inside the U.S., which is pretty significant in the U.S. And the team just — we just got back from our international headquarters where the team laid out their plans for launching Cologuard around the world.

They’re revving up their teams to be able to deliver this, and we’re excited about that aspect of the platform, the Exact Sciences platform as well.

Operator: The next question comes from Mark Massaro with BTIG.

Mark Massaro: Congrats on the strong 22% growth in screening this quarter. But I wanted to ask about the Oncodetect MRD test. I appreciate the commentary about the meaningful lift in breast cancer and the encouraging utilization in CRC. Kevin, I’m just curious, do you think that Oncodetect could become at least a material contributor to your Precision Oncology business in 2026. You did put up double-digit or 12% growth in PO. I’m just trying to figure out how much of that strong growth this quarter came from OncoExTra versus Oncodetect? And any thoughts about ’26?

Kevin Conroy: Mark, it’s too early really to give much color in terms of 2026. And as we said, Oncodetect is not material to this year’s revenue, but over the long call, and we really tried to — it’s been core to who we are thinking about the long term. When we developed Cologuard, we’ve developed — when Genomic Health developed Oncotype, those were long-term investments that over time you’re able to win because you do things the right way. And I’m proud that the team is doing things the right way in terms of gaining the evidence needed to then go to the customers, show them that evidence and convince them that our test is the best test for their patient. And so I — we love what we’re seeing so far, and we expect to be able to demonstrate that quantitatively in the future.

Aaron Bloomer: And then just in terms of — then within the third quarter, and obviously, we are really pleased with what the PO team delivered in the third quarter as well, double-digit growth in our Precision Oncology business. That didn’t come from Oncodetect. As Kevin said, it’s still early days, but it does speak to the strength of Oncotype DX. And so Oncotype DX continues to expand and penetrate in international markets. And we also saw a nice uptick in volume in Oncotype DX in the U.S. as well.

Operator: The next question comes from Luke Sergott with Barclays.

Luke Sergott: Just a quick cleanup on the Freenome simple screen with the FDA. I jumped on here at Eli Lilly. I don’t know if you guys gave an update of when you expect the FDA to kind of give you any feedback there or any type of feedback you’ve gotten and types of updates you guys need to do? And then I guess, more longer term, as you think about the launch of that — of simple screen within that market. I mean you guys have a massive CRC screening database. And for whatever reason or not, whether it’s a failed or a Cologuard test or just shipping test out, realizing patients don’t want to do that. That seems like a pretty low-hanging fruit to me as you kind of launch and think about commercializing this test? And can you use that also as you think about MCED going forward, too?

Kevin Conroy: Thanks, Luke. Yes, to that last question. Yes, the — our relationship with — well, with over 30 million patients and more than 250,000 primary care physicians and then oncologists and beyond. You have GIs and OB/GYNs. We’re a source of trust in terms of our CRC blood test that we plan to bring to clinicians and to patients. We have the ability to meet what the NCCN and who else was it? ASGE, AGA recommended in terms of the blood test are. They’re not as effective as Cologuard, Cologuard Plus or colonoscopy. They’re just not. But the right test for the right patient at the right time, somebody who doesn’t get screened at all for colon cancer, well, we know who 10 million of those people are because we have sent them a Cologuard kit, and they haven’t returned it.

Now that’s over 11 years. And over time, that base of customers build. So we’re able to work hand in glove with health systems to identify patients would be appropriate for a blood test. If that patient comes into the office, okay, they’ve tried to get a colonoscopy order. They have tried to get a Cologuard test. Now how about a blood test. We are in a unique position there to help that patient get screened and nothing is more important than getting patients screened.

Operator: The next question comes from Kyle Mikson with Canaccord.

Kyle Mikson: Congrats on the quarter. So on the CRC blood partnership, just a couple on that. So on the data that’s, I guess, due early next year. Is that the V2 data that will ultimately trigger the $100 million opt-in payment upon FDA approval? Or is that — is the data related to that payment coming later in the year, later in ’26? And secondly, something that’s kind of come up in like my conversations, for example, is how do you prevent the partner from gaining access to your accounts in certain scenarios such as if the provider opts in for the FDA/CMS version and the ownership of the customer kind of switches to the partner?

Kevin Conroy: So in terms of the Freenome V2 data, let’s be clear about this. There is data that is kind of concept data, and then there is a pivotal study that is — that will be underway. The initial data is the data that will be forthcoming and sometime in the next few months. The pivotal data is data that would come next year. And we don’t know exactly when that data would come next year, but it’s the pivotal data that is — will be used to submit to the FDA, and that’s the important thing. In terms of FDA approval, that will be on the V1 data, which was submitted in August, and it takes about a year. In terms of any confusion about who gets the credit for CRC screening. We have the exclusive right to market CRC screening test and Freenome intends to launch a lung screening test and eventually a multi-cancer screening test, but the CRC blood screening test is ours exclusively to market.

Operator: This concludes the question-and-answer session. I’ll turn the call to Kevin Conroy for closing remarks.

Kevin Conroy: Thank you all for joining today and to the Exact Sciences dedicated team for their commitment to deliver on our mission of eradicating cancer. Thank you.

Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect.

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