Greetings, and welcome to the Personalis Fourth Quarter 2025 Earnings Conference. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Caroline Corner. Thank you. You may begin. Thank you, operator. Welcome to Personalis' Fourth Quarter 2025 Earnings Call. Joining today's call are Chris Hall, Chief Executive Officer and President; Aaron Tachibana, Chief Financial and Chief Operating Officer; and Rich Chen, Chief Medical Officer and EVP, R&D. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements within the meaning of U.S. securities laws, including any statements regarding trends and expectations for our financial performance this year and longer term, cash runway and liquidity position, revenue expectations and timing, size and booking of orders, products, services, technology, expansions of Clinical volume, reimbursement goals, the outcome and timing of reimbursement decisions, expectations for our existing and future collaboration activities, cost expectations, market size and our market opportunity and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. We encourage you to review our recent filings, including the risk factors described in our most recent filings. Personalis undertakes no obligation to update these statements, except as required by applicable law. Our press release with our fourth quarter and full year 2025 results is available on our website, www.personalis.com, under the Investors section and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website by 5:00 p.m. Pacific Time today. With that, I would like to turn the call over to Chris.

Good afternoon, everyone. Thank you for joining us to discuss our fourth quarter and full year 2025 results. As we stand here at the beginning of 2026, I'm incredibly proud of the progress our team made over the past year and the momentum that we have today. 2025 was the year we validated our winning MRD strategy. 2026 is the year we expect to scale. Physicians increasingly trust our NeXT Personal test. Our Clinical volumes are building, and our strategic road map is being validated by the medical community. For those listening in for the first time, Personalis is a leader in MRD testing services, and we're helping patients, partners and doctors see more in cancer samples. We operate at the leading edge of MRD sensitivity. Our ultrasensitive NeXT Personal test is capable of detecting approximately single fragment of tumor DNA at 1 million. This is not merely a technical improvement. It's a Clinical necessity. This level of sensitivity allows physicians to detect cancer recurrence months ahead of standard imaging and provides them with far greater confidence in a negative result. The Clinical market for these types of tests known as Minimal Residual Disease or MRD test is growing rapidly and is expected to mature into a $20-plus billion opportunity, and Personalis is exceptionally well positioned to command a significant share of that opportunity. Beyond Clinical testing, we remain a leader in supporting biopharma companies through Clinical trials and drug development. Our platforms are used by our partner companies to analyze tumors and identify new biomarkers serving as the foundation for the next generation of personalized therapies. We are the engine that supports researchers as they explore new treatments and allow physicians to personalize treatment for every cancer patient. Now turning to our results. The headline of our performance is…

Thank you, Chris. I will be discussing our fourth quarter and full year 2025 results and then cover guidance for 2026. Total company revenue was $17.3 million for the fourth quarter of 2025. While this is a modest 3% increase year-over-year compared with $16.8 million for the same period last year, the headline number masks a positive rotation in the quality of our revenue. We are successfully replacing low-margin and sporadic legacy revenue with high velocity Clinical volume. And for the full year 2025, total company revenue was $69.6 million. As Chris mentioned, we navigated a planned $19.5 million decline in revenue from Natera during the year and also the conclusion of the Moderna melanoma trial enrollment, which was a $10 million decline from 2024. Despite these headwinds of nearly $29 million, we delivered 239% growth in biopharma MRD revenue over the prior year. We are no longer dependent on a single legacy contract. We are building a diversified and sustainable high-growth engine, which is centered around our Win-in-MRD strategy. Moving to our core revenue. Biopharma was $10.9 million in the fourth quarter compared with $12.2 million for the same period of the prior year. And for the full year 2025, biopharma revenue was $49 million compared with $51 million for 2024. Both the fourth quarter and the full year declines were due to the expected decrease in the Moderna volume mentioned earlier. For Clinical revenue, we recognized $0.9 million in the fourth quarter and $2 million for the full year of 2025 compared with $0.2 million for the fourth quarter and $0.8 million for the full year 2024. The fourth quarter 2025 includes initial breast cancer surveillance revenue, which was covered by Medicare in the fourth quarter. Now I want to address gross margin directly as it's a critical…

[Operator Instructions] The first question we have is from Subhalaxmi Nambi of Guggenheim.

Moving in a short period of time from no reimbursement to now 2 indications, potentially more here early in 2026, how does that affect the focus of reps internally, externally with Tempus for Clinical and also your eye for still building the pharma business longer term?

Yes. Thanks, Subbu. Appreciate the question. I think there's a couple of ways to think about it. I mean what we're starting to do is increasingly ungate the business increasingly to pick up steam. We had the number this year, guided the $43 million to $45 million that we think represents a good mix between investing aggressively, but at the same time, making sure that we manage the cash in a prudent way. And as we go through the year, we continue to make more progress potentially with reimbursement, either getting more decisions, we've got IO in front of us or find ways to collect more, et cetera, we could continue to invest more in the area as we go, and we'll play it as we go. But right now, this is the way that we see it. And we're continuing to push hard on biopharma companies. I mean those relationships and those are growth, that's a big growth driver. And we've spent a significant amount of time over the last 2 to 3 years establishing ourselves and growing that business. I think we're having a lot of success there.

Thank you for that Chris. How has reimbursement changed receptivity from clinicians compared to other competitors in the field? Have you seen an acceleration in ordering since the reimbursement announcement?

Yes. I mean I think overall, what you have, getting reimbursement gives you gives you legitimacy in the conversations. I think being able to say that you pass through the process and the rigors of Medicare is gives you legitimacy when you're having discussions with physicians and certainly key opinion leaders. I think there's a wide recognition among people who are in the know that MolDX does a particularly phenomenal job reviewing the evidence and looking at it deeply. And so yes, I think it does help to reinforce the power of what you're doing when you've got Medicare coverage and does put wins to your back field.

The next question we have is from Mark Massaro of BTIG.

This is Vidyun on for Mark. I just wanted to ask one on the biopharma outlook. So, are you seeing pushouts or cancellations of contracts there? And then just at a higher level, you're investing into NeXT Personal MRD and focusing more on the Clinical side of your portfolio. So just how material do you think MRD side of biopharma is versus other areas that you've done historically like PCV is longer term?

Yes. Thanks. I mean I think we're seeing the sector stabilize right now. We haven't seen any pushouts or any big jolts to the business. I mean, last year was certainly more challenging. We're not seeing biopharma companies come rushing back in a major way for translational purposes. And we reflected, I think what we see right now is what we've reflected in the guide. I think things are stable right now in that sector overall is what we're seeing. I think we are making progress in MRD, and we feel like we've been accelerating our progress there. I mean, those customers are some of the most discriminating buyers. They often do head-to-head trials with the data. And so, when you win there, and you see the revenue growth that we're showing in that sector, which I think was nearly 240% year-over-year, and that came off a particularly strong year the year prior, and we see it continuing to grow this year. That reflects the decision of large companies that really do detailed analysis to choose personnel. So, we feel like we're well-positioned there. But we're investing heavily overall to win the space, both biopharma and also Clinical. We've always thought that those 2 work synergistically and that the evidence that we built in biopharma helps drive the Clinical business, and that's been one of the key vectors. As you know, with our relationship with Moderna, we've been focused on supporting them through the journey of their INT program, and that's been a potential driver of our revenue over the out years.

And then NeXT Personal, can you share any details on the mix of volumes you expect to run in '26? In your reimbursed indications versus your not reimbursed indications? I think the volume in, yes, go ahead.

Yes, go ahead and finish the question, if you want.

Sure. I was just going to say, I think the volume in rev guide implies that a good chunk of the volumes you're running today are not lung and breast. So I just want to understand what indications you're seeing there.

Sure. Aaron will take this one.

Yes. So if you just look at the volume at the top level, so, for the 43,000 to 45,000 tests, roughly 20% or so is coming from breast, 15% to 20% is coming from lung. IO is somewhere between 20% and 25%, CRC is around 20% and all other is the remaining 20% or so. And it's true. There's a fair amount that we're running for zeros, right? We're not getting paid for only getting covered for breast and lung at this point in time. So it's less than half of the test, right? And Medicare is roughly half of the volume, and the fee-for-service is half of that half. And so again, we are running a lot of tests with zeros. But when you're dealing with physicians, you have to accept samples of all different cancer types. And that's what we're doing. We're doing really, really well. And we're finding that our ultrasensitive test is really sticky with physicians. Now, as we want to go forward here to drive more growth, we're going to be adding more physicians, right? We're adding more commercial heft on the Tempus side and internally. We're going to add another 10 or so reps. We ended the year with 10 reps. We're going to double it at this point in time. That's our current plan, and we could invest even further depending on how things go here in the first couple of quarters, right? So things are going really, really well.

The guide didn't assume IO yet, but that's clearly out there, and we've got a significant amount of revenue. We expanded the relationship this past year with Tempus to include CRC, and we've gotten a tremendous uptick and energy around that for doctors. The data that we had at AACR last year showed that if you apply an ultrasensitive approach on the testing paradigm, you can get a dramatic leap in performance at Landmark. And that really raised a lot of eyebrows, and a significant number of physicians have been starting to adopt in the CRC. So we have been investing because that's been a historically strong space, and we've looked at it that, we're making investments in growing that market and our presence in the CRC market, and we've had a lot of progress. And so when Aaron talks about 20% of the samples coming from that group of physicians, or that 20% of our samples coming from CRC, that's been a really nice growth engine. And I think over the arc of time, progress we're making there is really going to pay off.

The next question we have is from Thomas Flaten of Lake Street.

Aaron, just a follow-up on your last prepared comment about having the cash to execute your plan. Should I read that as having cash to break even? Or should I not read that far into it?

Yes. So we haven't said anything about cash to breakeven or cash profitability or anything like that. So that's probably reading a little bit more into it. What we meant by that statement, Thomas, is that we had $240 million of cash at the end of the year. We're going to use approximately $100 million in 2026. So you can see just by the simple math, it's 2.5 years or so of cash on the balance sheet, which means we have plenty of capital here for the next couple of years to go and drive to go get market share. And that's the focus right now, really investing for market share.

Got it. Got it. And then just a question on the real-time variant tracker. I think, Chris, in your prepared comments, you mentioned that there was an opt-in test. So are people ordering it? I mean, of the physicians you went out to with the early access program, are they ordering it? Do they literally have to click a box? Or just mechanically, how does that work? And how do you drive the stickiness on that?

Yes. I mean, Rich is with me and can add any color to it. But it's an opt-in module. It's not something that just everybody gets by default.

Yes. And we're getting geared up for the early access program as we speak. But we expect that physicians will opt in, and a lot of them will, and there's been a lot of excitement about it.

Yes. One of the feedback is not just being able to quantify the tumor in the blood, but being able to track how the tumor is changing is really one of the key unmet needs in cancer. And so starting to superimpose this longitudinally really is, I think, exciting, and I think is the next big innovation in MRD and quite frankly, sort of underlines our ability to lead the space in innovating. I mean, having started with the ultrasensitive push that we've been pioneering and now starting to add this, I think, is a great positioning for where we are and the impact that we're making for patients.

Got it. And just one quick last one. Of the Clinical volume you're expecting this year, you mentioned that you had 900 oncologists ordering last year. Do you have a sense of how many docs are going to be responsible for that 43,000 to 45,000? Just again, big ranges are fine. I'm just curious about depth versus breadth.

Yes. I mean, this year, we'll keep focusing on driving deeper within existing accounts. The 900 doctors ordering from us will continue to grow, and we'll continue to go broader, but we're focusing always on going deeper as is our partner, Tempus. Because I think people start to use the technology. They see the power of it, and our experience has been that the customers who have been with us longer tend to be the customers who order the most. And so we're focused on continuing to tell the story, underlying the value and driving deeper within existing relationships.

The next question we have is from Kallum Titchmarsh of Morgan Stanley.

This is Jason on for Kallum. So maybe just a question on 2026 guidance. How should we think about the Q-over-Q Clinical volume growth? You delivered 6,200 Clinical tests in the fourth quarter. Is that a good jumping off point for you guys, from what you guys could grow 24%, 25% Q-over-Q to get to the midpoint of your volume guide?

Yes. So we haven't given quarterly guidance. But if you take the 6183 exiting 2025 in the fourth quarter and just maybe linearize it, that probably gets you close. There would be a little bit of seasonality, right? The second and the fourth quarters are going to be the strongest, where the first and the third will have a little bit of seasonality.

Yes. I mean Q1 is always and Q3 are always the slower growth quarters in this kind of an environment versus Q2 and Q4 because of the combination of vacations, holidays and then Q1 weather, and we've always seen that. But right now, we're still learning exactly how the seasonality works. But we saw that in our numbers last year. And I think that's, I've spent years in this business, that's pretty calm.

That was helpful. And then maybe just as a follow-up, for a question on the competitive landscape. There's a lot of new entrants in the MRD space, and there's been some consolidation in the space as well with one of the large MRD players recently making a large acquisition of another large MRD player in December and potentially integrating their IP to enhance the sensitivity of their assay. So could you just share your thoughts on the current competitive landscape and why you think you can gain share against arguably larger players with deeper pockets?

Yes. I mean I think we've proven this over the last couple of years that we can execute. We've been focused on pioneering the story. I think a lot of people are trying to either get to or debut ultrasensitive products. Our intention is to stay ahead and continue to push forward. We're aligned with one of the biggest partners in the space, Tempus, which is providing the commercial infrastructure, which gives us the ability to move quickly and make progress, and we've gotten traction now with, we talked about in the script, 30-plus ongoing studies, and that continues to grow. And so we're investing heavily in R&D and driving forward. And so I think if you look at where we've been, where we are, we've emerged as one of the large players in the space. I think we've stitched together is only 3 companies with more than 2 coverages now in MRD, and we're there. And I think just in terms of test volume, we've emerged as a major player, and we've got momentum, and we're still the leaders in data and in terms of where it is. And so we feel like we're positioned well, and we're continuing to make the investments necessary to keep that position in the industry.

The next question we have is from Bill Bonello of Craig-Hallum.

So the volume expectations, obviously looked great, well above, I think, what people have been expecting. The Tempus comments last night were incredibly bullish. I think what might surprise people is sort of where you're ending up on the Clinical revenue, the gross margin and the cash flow guide. And you kind of talked about your philosophy, but maybe you can just give a little bit more color on what's prompting that. I mean, historically, your approach had kind of, as you said, been to sort of be a bit gated with the sales. I think there were some restrictions to Tempus in terms of kind of what you were encouraging them to do. You knew all along you'd be getting reimbursement. What, is it response you're getting from the field? Or what is it that's made you decide to sort of put on the gas at this point of time and maybe move away a little bit from that capital-light strategy you've talked about in the past?

Bill, this is Aaron. Thanks for the question. And so exiting 2024, getting into 2025, we did meter things a little bit primarily because we had not received any coverage at all just at that point in time. And our balance sheet did not have $240 million back then either, right? And so those 2 items there have changed over the past few months. Having coverage now for breast cancer and lung cancer and having a healthy price that we're really, really pleased with that's going to give us the right unit economics and help us get our gross margins into the low 60s and show us a path to eventually 70%. But again, at full reimbursement gives us now the confidence that we should step on the gas and go fast because this market is going to turn into $20-plus, $30-plus billion over time. And so, there's only a few players in the market today. There are only 2 real tumor-informed players that have a really robust test. We are the leader in the ultrasensitive marketplace. And so, it behooves us to go fast right now while the window is open and there's very little competition in the ultrasensitive space. So, we see it as an opportunity to go get market share over the next year or 2. And in doing so, we would have to sacrifice a little bit on cash burn as well as on gross margin, primarily because until we get a few more coverages, right, it's going to be dilutive to our gross margins. Does that make sense?

Yes. No, it does. And I get the capital and the reimbursement. I was just curious if you were seeing things in the market that we're saying, hey, we should really step up as well too. But it sounds like

Bill, I mean we see strong demand. And I mean, I think you're hearing that from people talking about it. And we're here to meet the demands of the physicians, and we're still managing this carefully. I mean the step-up from 74 to 100 is not like a crazy drive forward. We're also investing heavily in R&D, both in the studies, the evidence development, pushing forward in multiple different ways to accelerate coverage. And then, and the guide at the current level doesn't have any more progress in coverage and reimbursement, and we feel like there's a lot of upside there, and that will continue to be helpful as we go forward. So we feel like this is the right spot. The guide, I think, hit a good cadence of investment versus weighed up against expansion. And I think the investments that we do make now will pay dividends in the future, and we could probably ungate and go ever faster, but that would spend even more money. And so I think this is, I think we've, we feel like we've hit the right balance here.

Sure. Just a couple of follow-ups then. To the extent that you're allowed to talk about this, have you sort of given Tempus also the green light, maybe not to go full throttle, but do they have a little more freedom in what they can do with sales as well?

Well, we're focused on going deeper within accounts, and we're focused on, we've added some more reps ourselves. And I feel like we're in a good position, and we work really well right now, and we're driving forward with the idea that we're building demand for this ultrasensitive approach and making progress.

Okay. That was a good nonanswer. The last thing is just cash burn for the year. I think you, just in your comment, there was no cash flow statement. But I think in your comment, you just said it was about $70 million for this year. Is that right?

Yes. So we used about $74 million, and that was in our prepared remarks, Bill, and we expect in 2026.

$74 million to $100 million.

The next question we have is from Mike Matson of Needham & Co.

This is Joseph on for Mike. Just a couple here. In your prepared remarks, you called out, I guess, a heightened focus on CRC and neoadjuvant breast moving forward. Just wondering, should we expect maybe a submission at least for reimbursement in 2026 for those 2? And I have a couple more after that.

Yes. No, absolutely. We're not, I mean we're not sort of laying out exact timelines because everything is dependent upon when we can get publications, both submitted with investigators and then accepted because we can't submit until those things happen. But yes, we're driving hard in order to be able to submit for coverage for both of those. But there's a lot of variability as to when and how that might happen. So that's not in the guide, if you will. But I mean, we're not, we're moving fast because we see a big demand for use of the technology for those indications for patients.

Okay. And I guess just building on that, in terms of, I guess, evidence generation, your guys' strategy around evidence generation for additional cancer indications. I'm just wondering, is there any difference now in strategy compared to breast and lung in terms of, is the focus or at least part of the focus looking at trying to get into these very large, almost landmark studies. Is, now that you have reimbursement in two indications, do you think smaller studies can pass the bar for Medicare? You called out 35 clinical trials. So, is the idea here now quantity of trials rather than number of patients in the trial? I'm just trying to get some broad color on that.

Rich will provide his thoughts on this one.

Yes. Thanks for your question. Yes. So, we've done think of the strategy of working with the top KOL in the world and establishing some baseline evidence for these indications as we expand out our reimbursement coverage. So, we're going to continue to do that. It's really paid off for us. And so, we debuted very, very strong data in neoadjuvant breast at conferences last year and then also colorectal cancer as well with top KOL. And we think that helps us in the Medicare coverage process. So, we'll continue to do that not only for those indications, but for others. In addition to that, we are also, we've had a lot of inbound interest from KOL wanting to expand into Clinical utility studies using our assay to make decisions for patients and then show that it actually makes a difference in outcomes. And this is really important for long term, not just for the field, but also getting into guidelines and things like that. So, you'll begin to see more of that as well.

Okay. Great. Yes, that's helpful. Maybe just one last one. To get to that high gross margin target you guys have laid out, obviously, reimbursed test volume is the biggest factor there. But I'm just wondering in terms of other things like lab optimization, automation, what have you, I'm just wondering, have those steps all been completed? Are there more planned? What inning would you say you guys are in, in terms of really getting ready to ramp up reimbursed Clinical volume?

Good question. So, we haven't said specifically what percent of completion are we on all of our operational aspects or projects. We continue to automate the workflow, which means as we add capacity and all the capacity for this year isn't all in place at one point in time, right, because you have to buy equipment, hire people, and that's going to weigh even further on margins if you get too far ahead of your skis. And so, we take it one step at a time. But having said that, we are continuing to automate, streamline the workflows, strip out costs from labor or overhead wherever we possibly can, right, as we go forward to be efficient. And over the last couple of years, as we launched the product, we've done a good job with getting ready. And so, we believe we're in a good position sitting here today. In terms of getting to the upper end of the range on margins, right, some of that is dependent upon what happens with biopharma as well because biopharma is a fee-for-service, they pay for every test. In terms of some of the commentary Chris made earlier, we have not baked in IO into our guide, right? And so that's not contemplated. Depending upon what happens with reimbursement coverage for other cancer types, that could help us as well in terms of moving towards the upper end or beyond. Reimbursement wins so far.

[Operator Instructions] The next question we have is from Tom Stevens of TD Cowen.

Just a quick one on adjuvant reimbursement. So, have you outlined any expectations over the next couple of years in breast and lung on the potential for adjuvant reimbursement? And kind of what's the pushback from MolDX there? Any color would be helpful. And then kind of secondarily, on the neoadjuvant opportunity, I mean, could you lay out broad strokes where pharma is applying them in trials today, neoadjuvant feels like an easier use case and maybe some initial market sizing on the neoadjuvant opportunity, if you could also spare that.

Yes. Richard is going to grab this one, Tom.

Yes. Thanks for the question. Yes. So, adjuvant breast and lung, rest assured, that is something that we are also focused on, and we'll be pursuing that just like the other indications that we've been successful with. So, we know that's important. With regards to neoadjuvant breast cancer in, or neoadjuvant use of the assay in biopharma, yes, I mean, there's a lot of interest there. I mean, as you know, the oncology pipeline for drugs, there's an intense interest in bringing the drugs that are being used in the adjuvant setting and bringing them earlier for patients. So, then the neoadjuvant setting is one that's really important. And they want to know if these drugs are working. And so, a highly sensitive assay like ours can be really, really helpful for that. We actually, and that, if you look at the data that we presented last year in neoadjuvant breast cancer, it just shows the power of an ultrasensitive approach. That was in triple-negative breast cancer and HER2-positive. And the current state-of-the-art biomarker that's used is something called pCR. And so, in those studies, we showed that our assay performed very well compared to pCR and in some cases, better. And so, you can imagine, since that data has come out, there's been a lot of interest in using an assay like ours to get an early read on their neoadjuvant studies and whether they're being successful or not.

Great. And then just any initial view on the sizing of the kind of Clinical market there and kind of what the potential for that could be long, long term?

Yes. So, I think we, there's definitely, we haven't estimated that. What I'd say is if you look at the patient journey for MRD, it does start with neoadjuvant, but it's a relatively small fraction of that entire patient journey. surveillance over time, over many years. There's going to be a lot of testing done there, both for breast cancer and early-stage lung cancer. That's why we started there, and we achieved coverage there. And now we're kind of working our way backwards into these other indications.

Ladies and gentlemen, that concludes the question-and-answer session. And with that, this concludes today's teleconference. Thank you for joining us. You may now disconnect your lines. Goodbye.