Myriad Genetics Q3 2026 Earnings Call Transcript

Myriad Genetics (NASDAQ:MYGN) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Myriad Genetics reported Q3 2026 revenue of $202.7 million, supported by growth in cancer care and mental health tests, despite a decline in prenatal health test volume.

The company announced the divestiture of its prenatal health business to LabCorp for $210 million, aiming to focus more on the cancer care continuum and improve financial stability.

Guidance for full-year 2026 revenue was raised to $780-790 million, reflecting strong performance in other segments and expectations for improved financial metrics post-divestiture.

Gross margin improved to 67.9% in Q3, and the company is focusing on initiatives like the Ascend project to enhance efficiency and profitability.

Management expressed optimism about the future, highlighting strategic initiatives, improved reimbursement processes, and a focus on core business areas to drive growth and profitability.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to the Myriad Genetics Third Quarter 2026 Financial Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation there will be a question-and-answer session. To ask a question you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 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, Matthew Scalo. Go ahead.

Matthew Scalo (Senior Vice President of Investor Relations)

Good afternoon and welcome to the Myriad Genetics third quarter 2026 earnings call. During the call we will review financial results we released today and afterwards we will host a Q&A session. Our earnings release was issued this afternoon on Form 8-K and can be found on our website at investor.myriad.com. I’m Matt Scalo, Senior Vice President of Investor Relations, and on the call with me today are Sam Raha, our President and Chief Executive Officer, and Ben Wheeler, our Chief Financial Officer.

Joining for Q&A will be Vishal Sikri, Executive Vice President of Commercial, and Mark Verratti, our Chief Operating Officer. This call can be heard live via webcast at investor.myriad.com and a recording will be archived in the Investor section of our website along with the slide presentation. Please note that some of the information presented today contains projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based on management’s current expectations and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the SEC, specifically the company’s annual report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. I’ll now turn the call over to Sam.

Sam Raha (President and CEO)

Thanks, Matt. Good afternoon everyone and thank you for joining us. I want to start by welcoming Vishal Sikri to our earnings call. Vishal joined Myriad in 2025 as our SVP of Product and was recently promoted Executive Vice President of Commercial where he is now overseeing sales, marketing and product. Vishal has a deep understanding of molecular diagnostics and oncology as well as extensive business and commercial leadership experience. As Matt mentioned, Vishal is here in the room and available to participate in the Q&A portion of our call today, along with Mark Verratti.

Before we discuss third quarter results, I want to start by framing the context. For the last few months, we understand the key challenges that we’ve been facing: continued softness in our prenatal health business, reimbursement pressure on HCT, and financial stability, and we have been taking decisive actions to address the challenges. And I am pleased by the progress we’re making on multiple fronts to materially strengthen Myriad going forward.

We have been advancing our work on a number of initiatives. First, we’ve done a rigorous review of our product portfolio to determine how to maximize shareholder value and sharpen Myriad’s focus. This led to the definitive agreement to divest our prenatal health business, which we recently announced. Next, we have been working on a set of initiatives to address reimbursement pressures. Our increased revenue per test for the cancer care continuum business in Q3 compared to Q2 reflects our team’s ongoing work and early progress with payer engagement and revenue cycle efforts.

Next, we’ve been working on the Ascend initiative, which we introduced on the second quarter call, to modernize how we operate as a company to both better serve customers and increase our ability to win in the market while improving productivity, efficiency and our cost structure. This initiative is about optimized processes and organizational design supported by new tools and technologies. We’re working on Ascend with a leading consulting firm and while this is a multi-year initiative, we’ve already started taking actions.

We will share more about Ascend and its expected impact as we move into 2027. Finally, we’ve redoubled our focus on business execution and results to ensure we can demonstrate operational, commercial and financial progress on a consistent quarterly basis. With that, let me dive into our third quarter performance and highlights. Third quarter total revenue of $202.7 million was supported by growing demand for our cancer care and mental health offerings, with 4% volume growth of cancer care Continuum tests and 3% volume growth of our mental health test offset by 11% decline in the volume of prenatal health tests. For average revenue per test, we reported an increase of 1% year over year in Q3 compared to a decrease of 9% year over year in Q2. In fact, Q3 revenue for HCT test, while down 6% year over year, improved 9% sequentially over Q2 of 2026. The improvement in total average revenue per test reflects test mix and early progress addressing payer friction through enhanced engagement and revenue cycle management initiatives.

We outlined a number of these initiatives on our second quarter call and Ben will share more about this later. While we are pleased with the results from these activities so far, we know that revenue cycle management requires unrelenting attention and engagement as conditions evolve. And let me reemphasize that HCT remains a highly profitable business line with attractive margins, strong cash generation and significant long term volume growth opportunities. In terms of profitability, the sequential improvement of revenue per test flows through the P&L. Our gross margin of 67.9% improved 130 basis points compared to Q2, along with a meaningful quarter over quarter improvement in adjusted EBITDA of negative $5.3 million and adjusted EPS at negative $0.11.

On October 20th we announced that Myriad Genetics has signed a definitive agreement to sell the prenatal health business to LabCorp. This is an all cash deal for $210 million plus inventory which values this business at 1.3 times trailing 12 month revenue. We are pleased with the outcome and early investor feedback has been unanimously positive as well. I’ll speak further to the benefits of this transaction in a moment. Looking at the full year of 2026, given the steady volume growth of our cancer care continuum and mental health, along with improving average revenue per test in Q3 over Q2, we are raising the midpoint of our 2026 revenue guidance modestly. Total revenue guidance moved to a range of 780 to 790 million dollars. This update reflects conservative assumptions related to prenatal health testing volume. Ben will share more on our guidance later.

We expect the sale of the prenatal health business to unlock significant value for Myriad Genetics and our shareholders, resulting in a new Myriad Genetics that has a materially strengthened financial profile in terms of revenue growth rate, profitability and liquidity. Working with LabCorp when the transaction closes, we expect a smooth transition that preserves uninterrupted patient access to our prenatal tests and a good opportunity for our approximately 500 team members will move to LabCorp to continue serving prenatal healthcare providers.

Importantly, the transaction will enable the new Myriad Genetics to be even more focused on the sizable, attractive Cancer Care Continuum market opportunity. Now turning to third quarter performance by business, in Q3, the Cancer Care Continuum business generated revenue of $124 million, up 1% year over year, reflecting test volume growth of 4% to 98,000 tests being offset by a 3% decline in average revenue per test. HCT volume grew 6% year over year, with volume growth in both the unaffected and affected population continuing to be strong. In fact, unaffected HCT in Q3 marked its highest volume recorded in the last three years.

We continue to drive steady volume growth in HCT enabled by a combination of our clinically relevant content, strong market position, improving commercial execution. It’s encouraging to see the continued guideline expansion for HCT, including the updates by NCCN earlier this year, including multi-gene panel testing for all patients with endometrial cancer and also for colorectal cancer and gastric cancers, regardless of age and family history. Guideline expansion is expected to continue to support growth in years to come.

For prostate cancer, we continue to receive positive feedback on Prolaris AI which we launched mid year. However, we believe our volume has been impacted by the NCCN guideline which recommends blood based biomarker testing and imaging in certain situations prior to biopsy. Turning to Precise MRD, we’re pleased to report on the latest positive data using our test. At the ESMO conference a couple of weeks ago, our collaboration partner, the National Cancer Center Hospital East, presented data on the clinical significance of ultrasensitive MRD testing using our Precise MRD test in the assessment of colorectal cancer patients enrolled in the MonStar 3 study. While the overall study is still maturing, in this interim analysis, 91% of patients who recurred were MRD positive in Precise MRD one month after surgery, higher than has been reported with other assays in previous analyses.

Further, the remaining 9% who recurred were identified as positive via serial testing. Approximately half of the post-surgery ctDNA positive results were detected at an ultrasensitive level and 35% of patients who have recurred so far had their first positive detection at an ultrasensitive level. In essence, this illustrates the power of Precise MRD for earlier detection to help inform medical management and can benefit patient care. We look forward to strong data readouts and additional presentations and publications in 2027.

Regarding commercial availability, we have spoken about how we’re engaging new customers at early access sites. In fact, just last week I had the chance to personally meet with some Precise MRD customers to hear their input directly for early access. We continue to closely monitor test utilization, customer experience and our internal operational efficiency. We expect Precise MRD reimbursement for breast cancer to begin first half of 2027. We submitted to MolDX this summer and, consistent with past commentary, we would expect reimbursement for colorectal and renal cancer later in 2027.

We intend to continue prudently managing testing demand until reimbursement is established. Turning now to mental health, in the third quarter GeneSight generated $40 million in revenue, up 2% year over year on 3% year on year volume growth. We continue to expand the ordering provider base, reaching over 40,000 ordering clinicians in the third quarter. This steady volume growth reflects positive underlying demand and sales performance. We remain disciplined with a strong focus on capital efficiency while delivering growth.

With GeneSight, now moving to our prenatal health business. As I’ve already discussed the announcement of the sale, I’ll be brief. In Q3, the prenatal health business generated revenue of $39 million, down 12% year over year, reflecting a modest decline of 1% in average revenue per test while volume declined 11%. That being said, first gene testing volume showed a nice ramp and we look forward to working closely with LabCorp to provide continuity prenatal testing for healthcare providers and patients.

Finally, we’ve used this slide since the beginning of the year to track progress of key actions and milestones, product launches, publications and submissions. The check marks show that as we near the last part of the year, we have successfully completed the majority of these important milestones related to HCT, prostate cancer and Precise MRD, and these actions will support our growth in Cancer Care Continuum as we go forward. With that, I’ll turn it over to our CFO, Ben Wheeler.

Ben Wheeler (Chief Financial Officer)

Thanks, Sam. Let me start by reviewing our third quarter financial results. We reported revenue of $202.7 million, up 6% sequentially and down 1% year over year. Overall test volumes declined 1% sequentially and 2% compared with the prior year period, as continued strength in hereditary cancer testing and mental health were offset by prenatal health. Average revenue per test increased 7% sequentially and 1% year over year, a meaningful improvement from the 9% year over year decline we reported in the second quarter.

This improvement reflects product mix, a more normalized year over year comparison with prior period change in estimate impact to revenue, and early progress from our revenue cycle initiatives. I’ll spend a few minutes on that progress in more detail. While we’re encouraged by the improvement in Q3, average revenue per test can fluctuate in any particular quarter or year due to a number of factors. Longer term, we continue to expect modest headwinds to hereditary cancer testing average revenue per test, consistent with our prior commentary.

We generated gross margins of 67.9% in the third quarter, up 130 basis points sequentially but down 200 basis points year over year. Sequential growth reflects the improved average revenue per test. Our laboratory operations continue to perform at a high level, reflecting strong operating discipline and efficiency. Adjusted operating expenses were essentially flat sequentially but increased $10 million year over year. The year over year increase reflects targeted investments made earlier in the year to strengthen commercial capabilities.

Our capital allocation philosophy remains unchanged. We will continue to prioritize investments with the highest expected returns while maintaining a disciplined focus on operating efficiency and shareholder value creation. Taking all of that into account, we generated an adjusted EBITDA loss of $5 million and an adjusted EPS loss of $0.11 in the third quarter. As I mentioned, third quarter average revenue per test increased 1% year over year, primarily reflecting test mix within hereditary cancer testing. While average revenue per test remains below prior year levels, this slide shows the meaningful sequential improvement we saw in the third quarter. We believe this reflects early progress from our revenue cycle optimization and MyRisk reimbursement initiatives. As we announced last quarter, we’re implementing targeted process improvements, AI-enabled workflow acceleration and other capabilities to reduce reimbursement friction.

In parallel, we launched a payer-by-payer market access strategy focused on policy engagement, LBM collaboration and reimbursement optimization to strengthen long term access and support sustainable reimbursement for hereditary cancer testing. The key takeaway is that we’re seeing encouraging early progress addressing reimbursement friction, but there is more work to do. We continue to expect modest pressure on hereditary cancer testing average revenue per test over time, but we believe that we are building the capabilities and processes necessary to navigate an increasingly complex reimbursement environment more effectively.

Next, I’ll speak to Myriad Genetics’ profitability and liquidity. Third quarter adjusted EBITDA was a loss of $5 million, a significant improvement from the second quarter. This sequential improvement was driven by stronger revenue performance and disciplined operating expense management, with adjusted operating expenses remaining flat quarter over quarter. We remain in a strong financial position. We ended the quarter with approximately $182 million in available capital.

This provides us the financial flexibility to invest in our strategic priorities and fund key growth opportunities while maintaining a disciplined approach to capital allocation. Next, I’ll address the recently announced agreement to divest the prenatal health testing business. As Sam discussed, we believe this transaction is transformational for Myriad Genetics. In 2025, we refreshed our growth strategy and made a deliberate decision to prioritize the cancer care continuum. Since that time, it has become increasingly clear that our prenatal testing business was unable to generate attractive returns in the near term, particularly given recent dynamics in the prenatal market.

We therefore moved quickly to find what we believe is the best long term home for this business. This transaction achieves a number of strategic and financial priorities. First, it sharpens our focus and allows us to prioritize resources and investment on the cancer care continuum where we believe Myriad Genetics has the strongest opportunities to create long term value. Second, we expect the transaction to meaningfully improve the financial profile of the remaining company.

Importantly, the combination of a stronger growth profile and higher gross margins should accelerate our path to sustainable profitability. Third, this $210 million plus inventory all cash deal will significantly strengthen our balance sheet and enhance our financial flexibility. We’re evaluating potential uses of the net proceeds, including debt reduction, internal and external growth investments and other general corporate purposes. It is too early to be more specific on capital allocation, but the transaction meaningfully expands our financial flexibility.

Finally, we recognize this transaction affects many of our colleagues and we do not take that lightly. At the same time, we believe this is the right strategic decision for both businesses and puts Myriad Genetics in a more focused, financially stronger and more competitive position going forward. Next, I’ll speak about guidance. Factoring in our solid Q3 performance and our updated outlook for the remainder of the year, we are raising the midpoint of our full year 2026 revenue guidance to $785 million from $780 million. This increase primarily reflects the improvement in average revenue per test we experienced in the third quarter, partially offset by some potential softness in prenatal health given the deal announcement. To provide greater insight into the underlying business, we’re also providing separate 2026 revenue guidance for prenatal health and the cancer care continuum and mental health businesses.

Now let me turn the call back to Sam.

Sam Raha (President and CEO)

Thanks, Ben. I’d like to conclude by summarizing the key points from this call. The combination of the planned divestiture of the prenatal health business, the advancement of our ongoing work to mitigate reimbursement pressures, the implementation and benefits from the Ascend initiative over the midterm, and improved operational and commercial execution is setting up the new Myriad Genetics to have a materially stronger financial profile, increased predictability and increased focus and intentionality on the cancer care continuum, serve more patients and clinicians and win in the market.

We recognize the work ahead. We are energized by it, the opportunities that will unlock. We are pleased with our Q3 results and look forward to building on that in Q4 as we head into 2027. I’ll now pass the call back over to Matt for Q&A. Matt.

Matthew Scalo (Senior Vice President of Investor Relations)

Thanks, Sam. And as a reminder, during today’s call, we use certain non-GAAP financial measures. A reconciliation of the GAAP to non-GAAP financial results, and a reconciliation of GAAP to non-GAAP financial guidance can be found in our earnings release and under the investor relations section of our website. Now we are ready to begin our Q&A session. Operator.

OPERATOR

Thank you. At this time we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bill Bonillo with Craig-Hallum. Your line is open.

Bill Bonillo (Analyst at Craig-Hallum)

Hey guys, thanks very much. Fun to be on a quarter where things are moving in the right direction. Specifically to that, I was hoping to ask sort of a multi-part question on hereditary cancer pricing, just trying to understand a little bit more the dynamic there. So here’s sort of the multi-part. Is the decline in ASP a function of not getting paid or is it a function of getting paid at lower rates? And if it’s the latter, you’re getting paid at lower rates, is that something that’s resulting from contracts that you’re renegotiating?

And then let’s assume it’s that; maybe you can give us some sense of where you are in that contracting cycle, whether most of the big contracts have been negotiated down, if there’s still some big ones ahead of us. And then finally, just when you say you expect modest headwinds going forward, can you put some bookends around that? I know you have in the past, but maybe you can remind us.

Sam Raha (President and CEO)

Hey Bill, thank you very much for the question, the multi-part question. And again, we are pleased by the early progress that we’re making on reimbursement and average revenue per test on HCT. But let me turn it over to Ben to provide you some specifics on your questions.

Ben Wheeler (Chief Financial Officer)

So Bill, when we’re thinking about the softness that we’ve experienced from an HCT average revenue per test standpoint, that softness is really driven by an increase in zero pay. So more frequently we’re not getting paid or we’re experiencing denials. It’s not a byproduct or a result of contract changes or a change in medical policy. And so when we experience variability in ASP, it’s generally revenue cycle friction as we refer to it, and that’s going to be tied to denials.

And so, as Sam said, we’re pleased with the early progress that we’ve seen based on our revenue cycle management optimization initiative, and then we also referenced MyRisk reimbursement initiative both on our Q2 call and on our call today. There’s lots of work still to be done, but we’re happy with the early wins and we feel like that is what we saw drive the improvement in ASP in Q3.

Bill Bonillo (Analyst at Craig-Hallum)

And in terms of what you’re expecting for modest headwind going forward.

Ben Wheeler (Chief Financial Officer)

Yeah. So we frame that as 1 to 5%, maybe more like 3 to 5% in some years. And that’s from an average standpoint, Bill. So if you think about it, some years it may be in excess of 5%, like this year. In some years it might be down 1% or we may even be flat. But generally speaking, in the medium to long term, we would say an average decline of 1 to 5%, maybe skewing 3 to 5% most recently.

Bill Bonillo (Analyst at Craig-Hallum)

Okay. And then just one last follow-up to that. I know that zero pays are supposed to be a function of what the payer is seeing, whether they think it’s an appropriate claim or not. But do you think your price position in the market plays into that at all? And if so, how do you kind of deal with that?

Ben Wheeler (Chief Financial Officer)

Yeah, so Bill, I don’t think that it is specific to our price position. I think it’s more about the amount of money that people spend in specialty diagnostics and maybe in hereditary cancer testing. And so oftentimes we’ll see, as payers are managing their P&Ls, they make changes sometimes in their prior authorization requirements or medical record requests, and that’s where we see the increase in denials.

Sam Raha (President and CEO)

Thanks a lot. That we had—sorry, yeah, previously. Which is, what we’re seeing is not so different than what the broader industry is seeing. For example, as ACLA’s, we collectively are taking some actions to improve on that. But the longer a test is on the market, the more subject it is to various reimbursement pressures. And you know, we have a portfolio which has a number of tests that have been on the market longer. So it’s more pronounced perhaps for us at the moment.

Bill Bonillo (Analyst at Craig-Hallum)

Great, thank you very much. Very helpful.

OPERATOR

One moment for our next question. Our next question comes from the line of Kyle Boucher with TD Cowen. Your line is live.

Kyle Boucher (Analyst at TD Cowen)

Hey, good afternoon, guys. Thanks for taking my questions. I wanted to start with another question, or just a question in general on guidance, sort of what’s embedded for the fourth quarter. I think the midpoint of the guide sort of reflects maybe just north of $10 million Q over Q decline. But I think if we look across hereditary cancer and GeneSight, you know, volume looks pretty good across both of those. So I guess what are the puts and takes there on the fourth quarter?

And then just second to that, were there any major out-of-period adjusts this quarter?

Sam Raha (President and CEO)

Kyle, thank you for the questions. Ben, these are right up your alley.

Ben Wheeler (Chief Financial Officer)

So Kyle, when we think about the updated guide, it really is as simple as the two pieces that we called out in the prepared remarks. And that is, you know, we were really pleased with the outperformance of we’ll say about $10 million during Q3. And so if we update the midpoint of our guidance by that Q3 beat and then soften the expectation for prenatal in Q4 as a result of some potential volume softness tied to the deal announcement, that’s how we get from a midpoint of 780 to 785 off of a $10 million outperform in Q3.

So maybe said differently, maintaining assumptions around Q4 with the exception of softening the volume tied to about half, or $5 million worth, of prenatal revenue is how it all comes together. And then as it relates to—sorry Kyle, I was just going to answer that second question—as it relates to out-of-period or change in estimate to revenue, insignificant for the quarter.

Kyle Boucher (Analyst at TD Cowen)

Got it. Okay, maybe just one more question. Just obviously much more focused now, your strategic focus on the cancer care continuum. But I guess, can you just talk a little bit more about maybe what some of your key areas of focus are post the divestiture of the prenatal business early next year? You said there’s a number of different things that you guys could do in terms of use of proceeds. Maybe there’s no update on that right now, but I guess just sort of how are you thinking about the different options?

And I guess what does the business really look like from a growth and profitability perspective, you know, excluding the prenatal business?

Sam Raha (President and CEO)

Hey Kyle, I’d start by saying, as you can understand, we have been completely heads down focused on the strategic review and the resulting transaction, also the initiatives to improve reimbursement and so forth. So we are now, you know, getting deep into 2027 planning and we’re going to have, you know, more specifics for you coming up. But that being said, Ben, what color might you add?

Ben Wheeler (Chief Financial Officer)

So Kyle, in the presentation associated with our prepared remarks, we showed that we expect revenue growth to improve over 100 basis points post divestiture. We also showed that we expect gross margins to increase or improve by greater than 500 basis points. We didn’t talk about general profitability. We’ll get into more details as we get closer to 2027. We don’t want to get ahead of guidance there before we formally communicate that, but we can say that we expect meaningful progress in 2027 as it relates to bottom-line profitability.

When we think about a more focused organization, we think about the work that we’re doing from an Ascend standpoint and then also those revenue ASP initiatives, those are going to layer in during the year at different points in time. We’re excited about what it means and what the organization will look like, but it’s not the right time to discuss from a quantification standpoint what that looks like. But I’ll re-emphasize that we’re excited about the work ahead, the work we’ve done, and what we expect the improvement in profitability profile to look like as we progress through 2027.

Sam Raha (President and CEO)

Hey Ben, the other question that Kyle had, I know it was in your prepared remarks, but if you can speak to again, you know, any thinking we have around the proceeds.

Ben Wheeler (Chief Financial Officer)

Yeah, absolutely. And so, you know, we’re contemplating use of proceeds across multiple facets or multiple fronts. Part of that will include some level of debt repayment. We’re also looking at growth opportunities internally and externally and then naturally just to fund typical operations as we continue to drive for things like MRD and competing in the market and the cancer care continuum in new ways.

Kyle Boucher (Analyst at TD Cowen)

Got it. Thanks guys.

OPERATOR

As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. This concludes the Q&A session. I would now like to turn the call back over to Matthew Scalo.

Matthew Scalo (Senior Vice President of Investor Relations)

Thanks, Grace. This concludes our earnings call. A replay will be available via webcast on our website for one week. Thank you all for joining us this afternoon and have a good night.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.