Caris Life Sciences (NASDAQ:CAI) reported record clinical volume and raised its full-year revenue outlook after second-quarter revenue increased 45% from a year earlier, driven by growth in molecular profiling services, higher average selling prices and an expanding commercial organization.
The company completed approximately 59,200 clinical cases during the quarter ended June 30, up 18% year over year and 12% sequentially. Founder, Chairman and Chief Executive Officer David Dean Halbert said the increase included record tissue and blood testing volumes, with roughly 6,400 sequential case additions.
Revenue, Margins and Cash Flow Improve
Total revenue reached $263.7 million, up 45% year over year. Molecular profiling services revenue increased 55% to $252.3 million, while pharma research and development services revenue was $11.4 million.
Chief Financial Officer Luke Power said clinical volume growth and pricing both contributed to the performance. The company reported an 18% rise in volume and a 30% increase in clinical average selling price. Its blended base average selling price surpassed $3,850, a company record, according to Power.
- GAAP gross margin increased to 68%, from 63% in the prior-year quarter.
- GAAP operating expenses were $152.7 million, up about $21 million year over year as the company invested in commercial expansion and product development.
- GAAP net loss narrowed to $0.6 million, including a $25 million one-time debt-extinguishment charge related to the April refinancing of its term loan.
- Adjusted EBITDA was $55.7 million, compared with $16.7 million a year earlier.
- Free cash flow was $6.4 million despite $22.1 million of capital expenditures.
Vice Chairman and Executive Vice President Brian Brille said the quarter marked Caris’ fifth consecutive period of positive adjusted EBITDA and positive free cash flow. Cash and investments totaled $793 million at quarter-end. The board also authorized a share-repurchase program of up to $100 million, and the company repurchased approximately $18 million of shares in the open market during the second quarter.
Commercial Expansion Supports Volume Growth
Caris said tissue-based MI Profile cases totaled approximately 48,300, rising 13% from a year earlier and 11% sequentially. Caris Assure Blood cases totaled about 10,700, up 50% year over year and 17% sequentially.
The company completed a sales-force realignment in January, increasing its territory structure to 146 territories from 82. Its commercial team exceeded 290 members at the end of the second quarter, compared with 270 at the end of the first quarter, and Power said headcount surpassed 300 in July.
More than 6,200 oncologists now order through the company, Brille said, while more than 74% of orders come through electronic health record and portal channels. Caris also reported that the Precision Oncology Alliance expanded to 101 members with the additions of UC San Francisco and Northwell Health.
Management said it expects the tissue-and-blood mix to remain broadly consistent with the second quarter in the back half of the year. Power said the company expects clinical therapy-selection volume growth of about 20% in the third quarter, with further improvement anticipated afterward.
New Assays and Pipeline Programs
During the quarter, Caris launched ChromoSeq, a hematology therapy-selection assay using whole-genome and whole-transcriptome technology. The assay received MolDX coverage at a reimbursement rate of $3,228, management said.
The company also launched Caris Detect, its multi-cancer early-detection blood test, in June. President David Spetzler said the test identifies 58 cancer types from a single blood draw and provides a prioritized tissue-of-origin workup for physicians. The company plans to pursue a self-pay approach for the test and is not including Detect revenue in its updated guidance, Power said.
Management said it is increasing laboratory capacity and inventory ahead of expected demand. Inventory increased $47 million from the first quarter to the second quarter, according to Power. Halbert said current capacity is equivalent to about $1 billion in annual revenue and the company is preparing to triple that capacity, while management cautioned that demand could still lead to back orders.
Caris also plans to launch minimal residual disease, or MRD, offerings in the second half of 2026 following completion of validation. Spetzler described both a tumor-naive assay initially focused on colorectal cancer and a tumor-informed whole-genome approach intended for pan-tumor use in stages 1 through 3.
In addition, the company expects to introduce myClarity version 2 in the second half. The updated breast-cancer recurrence-risk platform is intended to add chemotherapy and endocrine-therapy decision support, according to Spetzler.
Outlook Raised
Based on first-half results and continued molecular profiling momentum, Caris raised its full-year revenue forecast to $1.03 billion to $1.04 billion, representing 27% to 28% growth. The prior outlook was $1 billion to $1.02 billion.
The company increased its expected GAAP operating-expense range to $595 million to $600 million from $590 million to $595 million, reflecting commercial expansion and increased marketing around product launches. Caris reiterated expectations for positive adjusted EBITDA and positive free cash flow for the full year.
Power said the updated revenue forecast is based on the existing molecular profiling business rather than expected contributions from Caris Detect or other newly launched products. He also said the company expects third-quarter blended clinical average selling price to be in the $3,800 to $3,900 range.
About Caris Life Sciences (NASDAQ:CAI)
Caris Life Sciences (NASDAQ: CAI) is a molecular science company focused on advancing precision medicine in oncology. The company develops and delivers comprehensive molecular profiling services designed to identify actionable biomarkers across DNA, RNA and protein modalities. Its clinical services are intended to support oncologists in treatment decision-making by matching patients to targeted therapies, immunotherapies and relevant clinical trials based on tumor biology.
Caris provides laboratory-based diagnostic testing and related interpretive reports, combining high-throughput sequencing and other molecular technologies with bioinformatic analysis.
