Thanks, Kevin. Good afternoon and welcome to the Fulgent Genetics fourth quarter and full year 2022 financial results conference call. On the call are Ming Hsieh, Chief Executive Officer of Fulgent; Paul Kim, Chief Financial Officer of Fulgent; and Brandon Perthuis, Chief Commercial Officer of Fulgent. The company's press release discussing the financial results is available on the Investor Relations section of the company's website, www.fulgentgenetics.com. A replay of this call will be available shortly after the call concludes on the Investor Relations section of the company's website. Management's prepared remarks and answers to your questions on today's call will contain forward-looking statements. These forward-looking statements represent management's estimates based on current views and assumptions which may prove to be incorrect. As a result, matters discussed in any forward-looking statements are subject to risks, uncertainties and changes in circumstances that may cause actual results to differ from those described in the forward-looking statements. The company assumes no obligation to update any of the forward-looking statements it may make today to reflect actual results or changes in expectations. Listeners should not rely on any forward-looking statements as predictions of future events and should listen to management's remarks today with the understanding that actual events, including the company's actual future results may be materially different in what is described in or implied by these forward-looking statements. Please review the more detailed discussions related to these forward-looking statements, including the discussions of some of the risk factors that may cause results to differ from those described in these forward-looking statements contained in the company's filings with the Securities and Exchange Commission, including the previously filed 10-K for the year ended December 31, 2021 and subsequently filed reports which are available on the company's Investor Relations website. Management's prepared remarks, including discussions of earnings and earnings per share contain financial measures not prepared in accordance with accounting principles generally accepted in the United States or GAAP. Management has presented these non-GAAP financial measures because it believes they may be useful to investors for various reasons but they should not be viewed as a substitute for or superior to the company's financial results prepared in accordance with GAAP. Please see the company's press release discussing its financial results for the fourth quarter and full year of 2022 for more information, including the description of how the company calculates non-GAAP income and earnings per share and a reconciliation of these financial measures to income and earnings per share to the most directly comparable GAAP financial measures. With that, I would now like to turn the call over to Ming.

Thank you very much, Melanie. Good afternoon and thank you for joining our call today. I will start with some comments on the quarter and the year. Then Brandon will review our product and go-to-market updates from the first quarter. And Paul will conclude with the financials and our 2023 outlook before taking your questions. Looking at the fourth quarter, we exceeded our revenue guidance, reflecting 97% growth in our core business compared to 2021. We have integrated our recent acquisitions and are seeing those benefits in our annual results. For 2022, our core businesses grew across all diagnostic segments, Precision Diagnostics, Anatomic Pathology and Pharma Services, with the momentum in oncology and reproductive services. With the Inform Diagnostics businesses boosting our capability in Anatomic Pathology and adding significant revenue, we will see pressure on our bottom line in the near term which Paul will address. However, in the long-term, we believe this acquisition will make good strategic sense for us. We continue to be the leader in Precision Diagnostics due to our NGS platform capabilities. An example of our successful COVID-19 testing program between 2020 and 2022, led by our partnership contract, Fulgent delivered 19.3 million RT-PCR COVID-19 tests and generated over $1.7 billion in revenue for Fulgent. With the pandemic largely behind us, we're not anticipating additional COVID revenue in 2023. We are proud of how quickly we scaled our business and contributed to the testing efforts to fight the pandemic. We're seeing a similar opportunity to scale our platform to address the growing demand by our customers for our Beacon Carrier Screening Test. Today, we announced an expansion, Beacon787 which Brandon will talk more about. We are anticipating associated annual growth of more than 300% in Beacon sales as we grow this portion of our business. We believe this activity will further secure our leadership position in NGS and it is an important factor in our annual guidance provided today. For 2023, our revenue guidance of $240 million assumes 32% growth in our core business, driven by continued growth across all areas of our diagnostics business, including expansion and oncological carrier screening through Beacon787 announced today. Through our internal efforts and those of our lab partners, we are leveraging our proprietary NGS platform for broad applications. Fueled by our ongoing R&D effort, we have a long runway for opportunity in the core business. Diagnostics remain a continued and dependable source of revenue and growth for Fulgent in the years ahead. In the fourth quarter, we announced the acquisition of Fulgent Pharma. We believe this acquisition has the potential to gradually transform Fulgent from a genetic diagnostic service business into a fully integrated precision medicine company focused on oncology. We are joined by our team of talented individuals, integrating our company to address the continuum of care that we believe begins with diagnostics, patient care, and monitoring. Fulgent Pharma has developed a novel nanoencapsulation and targeted therapy platform technology designed to improve therapeutic windows and pharmacokinetic profiles for both new and existing cancer drugs. Our lead drug candidate, FID-007, has achieved proof-of-concept for the treatment of numerous cancers, including head and neck, ampullary, pancreatic, lung, and breast. We continue to encourage the early data from this program and are working on the clinical path forward, including additional clinical trials towards approval. We have full control of our manufacturing process and can be very efficient. We have fully converted the GMP nano materials production plans, operating with experts and scientists who are integrated into our organization. We have submitted updated clinical Phase Ib data to ASCO for presentation at the 2023 Annual Meeting in June. We look forward to sharing additional progress on the pharma business as we move throughout the year. We ended 2022 with a strong cash position, affording us the flexibility to pursue additional strategic opportunities as they arise. Earlier this year, we were pleased to expand our Board of Directors with the addition of Reggie Groves. Reggie possesses a diverse business skill set and a global perspective that we believe will be invaluable to our Board. We entered a new chapter in precision medicine with our current acquisition. Her expertise as a leader and an officer in various senior roles and with clinical and regulatory functions, particularly from her 13 years at Medtronic will add important insights into our business as we advance our mission to build a holistic platform that provides comprehensive solutions and services across the cancer care continuum from early detection, diagnostics, monitoring, drug discovery, and development. Over the year, we have expanded and strengthened our Board, adding additional expertise in diagnostics, therapeutic drug development, and commercialization. Now I'd like to thank our employees and shareholders for your support; it was a transitional and transformative year for Fulgent. I look forward to the years ahead and the momentum we are creating within our combined business. I'll turn over the call to Brandon, our Chief Commercial Officer, to talk about our diagnostics business results during the fourth quarter.

Thanks, Ming. With COVID-19 mostly behind us and our integration efforts for our acquisitions, we can intensely focus our efforts on our base business. We exceeded our expectations for the fourth quarter driven by an outperformance in our reproductive health business line and our Pharma Services division. At a high level, our core revenue was $55 million in the fourth quarter compared to $28 million in the same period the prior year and $56 million in the third quarter of 2022. Starting with our Beacon Expanded Carrier Screening product, for some time, we knew we had a successful product in service. Backed against competitive products in the field, Beacon frequently excels in detection rates, our ability to discern pseudogenes, reliable copy number calls with our proprietary CNV exome algorithm plus other features. Our optimized workflow for variants with pseudogene interference has been externally validated and published as a method for analysis of genes with pseudogene interference and/or sequence homology issues, allowing for improved testing accuracy. This method also optimizes turnaround time and reduces the need for unnecessary confirmatory testing to identify point mutations, copy number variants, and gene conversion events in genes with pseudogene interference that other labs may not be able to detect. Using this pipeline, we can quickly distinguish positive and negative cases with NGS sequence misalignment, avoiding testing delays due to redundant confirmatory testing. Most bioinformatics methods do not discriminate genomic regions with extensive homology. This can lead to false negative or false positive variant calls and/or produce incorrect copy number calls due to misalignment of reads. Our bioinformatics algorithms compare read depth between homologous regions to identify sequence misalignment. In terms of the panel content, we have been offering one of the largest carrier screening panels in the market, customizable up to approximately 430 genes. Included in our panel are all of the American College of Medical Genetics and Genomics, ACMG, Tier 3 genes which ACMG published in their last practice guidelines for carrier screening, recommending that all pregnant patients and those planning a pregnancy offer this set of genes as an equitable pan-ethnic screening approach. The ACMG list includes genes with a carrier frequency greater than 1 in 200 for autosomal recessive conditions and disease prevalence greater than 1 in 40,000 for X-linked conditions. This totals 113 genes. Our Beacon panel includes all of these with most major competitors typically only covering between 60% to 90%. Historically, we were not able to fully leverage our Beacon product without managed care contracts. However, now armed with in-network coverage, we are seeing tremendous momentum. Our monthly carrier screening volume is setting company records, second only to what we saw with COVID-19 testing. In addition to our direct sales, we have also partnered with other large national labs to outsource some of their carrier screening tests to Fulgent. Finally, we announced this afternoon that we have launched the new Beacon787. This further expands our capabilities and provides the most comprehensive test available today. Turning to Pharma Services, another area with significant momentum. While we do not discuss client names due to confidentiality and competitive reasons, we are proud to say that we now work with six of the top ten pharma companies in the United States. Additionally, we are working with three of the largest global CROs to perform NGS testing. With the acquisitions of Inform Diagnostics and CSI, we were able to broaden our offering to our pharma clients by adding tests such as IHC, FISH, Flow Cytometry, etc. Recently, our Pharma Services launched a powerful solution for spatial phenotyping using multiplex immunofluorescence. The speed and accuracy of advanced digital imaging technology combined with the precision of multiplex immunofluorescence allows you to quickly assess phenotypes in a variety of cell types. This technology, along with our experienced scientific team, allows for more custom solutions for our clients and their drug programs. We anticipate continued momentum in this space as we build new partnerships, deepen relationships with existing partners, and continue to launch new services. While slightly tangent to Pharma Services but in a similar scope of work, we have partnered with a large DTC testing company to sequence thousands of human genomes. We believe our quality, test menu, turnaround time, and cost structure make us an attractive solution for B2B relationships as well as our core Pharma Services clients. We are pleased to report that Fulgent Oncology regionally launched in the second quarter of 2022 has become one of the fastest-growing segments of our business. Our oncology portfolio launched under the brand name Lumera includes our marquee product, Lumera Xpanded NGS for Solid Tumors, Lumera Comprehensive Hematology Profile, a full menu of pathology and molecular assays, and a suite of NGS germline tests. This full-service approach gives Fulgent a unique one-stop-shop provider position in the space of Precision Diagnostics. To further differentiate our offering, we will be expanding the Lumera menu in a few weeks to include a Comprehensive Heme NGS Profile. Lumera Heme NGS will be positioned as a disruptive 670 gene profile that will include analysis across mutation types and simultaneous analysis of DNA and RNA, allowing for optimal detection of fusion genes in addition to indels and SNVs. This panel recently received MolDx approval, robust coverage determination and a CMS reimbursement rate of approximately $2,850. Our new Heme Profile will further position Fulgent Oncology as a leader in a dynamic space, giving us a competitive advantage over many single assay or single technology providers in Precision Diagnostics. We anticipate continuing to expand our oncology portfolio throughout 2023 and Fulgent Oncology aims to be the undisputed leader in oncology, specialty testing, and Precision Diagnostics in the U.S. A quick update on the sales team: the overall headcount remains mostly unchanged. However, we have done intense training so that our national sales team is better able to handle multiple product lines and to look for opportunities to cross-sell. This is showing early signs of success as we have seen legacy Fulgent sales reps close Anatomic Pathology sales, for example. We remain open to expanding the sales team over time and are always looking for key additions to our team as talent presents. One area that may expand a bit more rapidly is reproductive health. We have a small team there; however, we are seeing huge momentum in the space. In addition, we have ongoing R&D to launch new products and services for reproductive health. Depending on the near-term momentum and the timing of our product launches, there is a possibility we could see expansion in the summer, as well as M&A. We are excited to enter 2023 with a wind at our backs and we look forward to another great year.

Thanks, Brandon. Full year revenue totaled $619 million compared to $993 million in 2021, exceeding our overall guidance of $611 million. GAAP income was over $143 million or $4.63 per share. Revenue in the fourth quarter totaled $68 million compared to $252 million in the fourth quarter of 2021, exceeding our overall fourth quarter guidance by approximately $60 million. We are no longer reporting billable tests as we believe that revenue is a better measure of how the business is progressing rather than volume. Breaking down revenue a bit further, roughly $13 million came from COVID-19 testing in Q4 compared to our guidance of $8 million. Revenue from our core business totaled $55 million which exceeded our guidance of $52 million and grew 97% year-over-year. Gross margin was 19.2%, down 56 percentage points year-over-year and down 24 percentage points sequentially. The reduction in gross margin was due to test mix, including higher costs associated with our core genetic testing portfolio, including pathology testing and also due to inventory reserves and our accelerated equipment depreciation related to COVID-19. Turning to operating expenses. Total GAAP operating expenses were $49.5 million for the fourth quarter, up from $45.7 million in the third quarter of 2022. Non-GAAP operating expenses totaled $38.7 million, up from $37 million in the third quarter of 2022. Non-GAAP operating margin decreased 45 percentage points sequentially to a negative 34%. While the expense structure of our legacy Fulgent business remains lean, we have incurred a number of incremental expenses as part of our recent acquisitions as expected. We have made significant investments in people, infrastructure, and operations to support our growth, and these investments are putting pressure on our operating margins. We remain confident that these investments will translate into demonstrable ROI and drive outsized future growth of our core business. At the same time, we're pleased with our ability to still generate positive cash flow during this transformative time for our business. Adjusted EBITDA for the fourth quarter was a negative $15.1 million compared to a positive $158.8 million in the fourth quarter of 2021. On a non-GAAP basis and excluding equity-based compensation expense, intangible asset amortization, restructuring costs, and acquisition costs related to Fulgent Pharma, the loss for the quarter was $14.2 million or $0.48 per share on a 29.6 million weighted average shares outstanding. Now turning to the balance sheet. We ended the fourth quarter with approximately $872 million in cash, cash equivalents, and marketable securities, including investments pending settlement. We generated $33.2 million of cash from operations during the quarter despite the significant investments we made in our business for the quarter. I would also like to highlight that we were active with our share repurchase program in the fourth quarter. We repurchased over 815,000 shares of our common stock at an average cost of $35.65 under the stock repurchase program announced in March. As of December 31, 2022, a total of approximately $175.7 million remained available for future purchases of our common stock under the repurchase program. Now moving on to our outlook for 2023. We will not be guiding total revenue for the company without COVID testing revenues. In other words, the guidance we have provided of $240 million as well as the guidance for the first quarter is solely for core revenues. We expect total revenues to be approximately $240 million in 2023, representing core growth of 32% year-over-year. Given the tough comps this year for revenue, we want to provide more information on what we have been calling core revenue or the rest of the diagnostics business excluding COVID. We expect growth this year in all areas of our core business, including Precision Diagnostics, Anatomic Pathology, and Pharma Services. We will reference these three areas of our business going forward as we talk about our revenue trends. Precision Diagnostics includes all of our clinical NGS revenue, oncology, reproductive services, rare disease, neurogenetics, B2B relationships with labs, and our business in China. Current strength in this segment points to reproductive services and oncology as Brandon and Ming both discussed. Given certain lab arrangements, there may be variability from quarter to quarter. Anatomic Pathology includes the business we have integrated from Inform Diagnostics which had strong growth in 2022 that we expect to continue in 2023, particularly in urologic and dermapathology, including digital pathology. Pharma Services include sequencing as a service which we sell to our pharmaceutical business partners and is dependent on these relationships, so it may be lumpy from quarter to quarter. We've been building on this business and expect consistent growth. The expected 2023 revenues from these three areas are estimated as follows: $114 million from Precision Diagnostics, $113 million from Anatomic Pathology, and the remaining $13 million from Pharma Services. Given the nature of these businesses in our guidance provided today, we're comfortable with the growth projections we have given. Looking at margins going forward, given the non-COVID and the acquired revenue profile of the company, we will see gross margins coming down. This is due to the absence of revenues from COVID-19 testing as well as a larger contribution from Anatomic Pathology revenues which are lower margin than our corporate average. We expect to see lower operating margins in the quarters ahead as we integrate and further invest resources in our recent acquisitions. Long-term, our foundational technology platform supports a strong margin profile and we will continue to manage our spending with discretion to drive operating leverage. For the full year 2023, utilizing an estimated 28% tax rate and a share count of 31 million, we expect non-GAAP loss of approximately $1.25 per share for our shareholders, excluding stock-based compensation, amortization of intangible assets, restructuring costs as well as other one-time charges. Last quarter when we acquired the pharma business, we said we would report on this business separately. Revenue from this business is not anticipated in our 2023 guidance and we expect associated cash burn for this business of approximately $15 million to $17 million this year which is included in our EPS guidance provided today. Overall, we have strengthened our core business and bolstered our portfolio through strategic acquisitions and we see good momentum ahead.

Certainly. Our first question is coming from Dan Leonard from Credit Suisse.

This is Lilly on for Dan Leonard. I think first question on the guidance. I think previously, we were talking about $200 million baseline revenue for core Fulgent. So just wondering what is the difference, like what are the growth drivers on the '23 guidance of the $240 million?

Yes, that's a great question. I'll start by discussing the numbers and then I'll hand it over to Ming and Brandon, who will share their insights on growth and market penetration based on our overall capabilities. We have a core revenue base of around $240 million, and considering the outlook for our core business, our guidance remains at $240 million for the year. We were pleasantly surprised by the retention of our core revenues in the fourth quarter, which boosts our confidence in reaching that target. Additionally, we have excluded COVID revenues from our current focus, although we anticipate some COVID-related revenues in 2023. For the purpose of this earnings call and our strategic priorities, we will not include those. To provide further detail on our core revenues, we expect Q1 to be around $56 million, as noted in the press release. Despite potential seasonal fluctuations, we believe the momentum of our core revenues will continue to grow throughout the year. Now, I'll pass it over to Brandon, who will discuss the areas that excite us and affirm our confidence in hitting the $240 million target.

Yes, certainly. Thanks, Paul and thanks for the question. We're seeing strength across all business lines as we've now broken them out a bit to give some more granularity. But in particular, we're seeing strong growth in reproductive health as well as our Fulgent Oncology. Now granted, Fulgent Oncology is coming off a base of essentially 0. It's a new product launch for us that happened in 2022. However, in reproductive health, we've been in for some time. We didn't have the contracts we needed to really penetrate that market. We are seeing tremendous momentum in reproductive health. There have been some market dynamics that have opened up tremendous opportunities for Fulgent. But both of those areas are showing tremendous momentum. We have a lot of confidence in the guidance for 2023 and look forward to delivering on it as the year progresses.

Got it. That's very helpful. I'm sorry, go ahead.

Yes. Adding the comments from both Paul and Brandon, I do see the long-term investment from Fulgent's R&D team in the artificial intelligence and data mining techniques. I do see the continued benefits for us to provide leadership in the NGS space and continue to build the technology which should provide our revenue growth.

Got it. That's super helpful. Brandon, I think just one follow-up on the contracts. Do you have any updates on the contract roll up? I think in the last call, you expected everything to be done by end of 2022. Is that still on track or can you give us any color on that?

It's not entirely done. We've made tremendous progress there, but there was an incredible amount of contracts we had to work through. It will still be some time before 100% of those are rolled up. That said, the momentum we're seeing in the business is closely tied to the progress we've made around the contracts. As Ming mentioned, we're expecting, I think it's safe to say, explosive growth in 2023 relating to carrier screening, that would not be possible if not for the leverage we now have with those contracts. Rolling them up and merging them together with the different entities is still a work in progress but the progress we've made has been meaningful and has really helped us grow business in the back half of the fourth quarter, with Q1 off to a fantastic start.

Got it. One final question for me. It's very exciting to see you guys launching a new Expanded Carrier Screening panel. But at the same time, we also heard from the industry that there are some upticks in denials from some of the commercial insurers on the reimbursement. So wondering if you have any color on that or do you see that trend happening or do you expect any pressures in 2023?

Well, I want to make it clear that we offer Expanded Carrier Screening panels or Carrier Screening panels that range from 1 gene all the way up to the new large panel, 787 and we allow our clients to customize anywhere in between. However, we do see a trend toward larger panels as we want to look across pan-ethnic populations for rare diseases where a couple may be a carrier. Certainly, there are some payers that consider Expanded Carrier Screening as investigational and experimental or unproven. But we think that's very temporary. Certainly, clinicians have embraced Expanded Carrier Screening. It is, for the most part, standard of care in a reproductive setting. The payers perhaps are a bit behind as it relates to some of the coverage. But it's a minimal amount of payers out there that have not embraced Expanded Carrier Screening. There are multiple organizations and companies that continue to educate and work with the payers as well as multiple academic societies that continue to update the guidelines around Expanded Carrier Screening. So any changes in the future should all be upside as coverage broadens.

Next question today is coming from Andrew Cooper from Raymond James.

This is Liam on for Andrew. I guess just to start out on capital allocation priorities. Now what we saw in the quarter, you acquired, you repurchased a number of shares. And obviously, we had the recent Fulgent Pharma acquisition. Going forward, what do you think the balance is between looking for more tuck-in acquisitions or more focused on share repurchases? Appreciate some color there.

Yes, I will take the answer from the CEO's position and definitely Paul will add his color from the CFO's position. I do see that Fulgent still has a lot of capabilities in addressing this growing space in NGS and diagnostics. We see numerous opportunities arising in the last year. All our options are open. We continue to evaluate companies which add to our capabilities in terms of technology or broaden our offerings. But we are also looking for the consolidation in this space, while continuing to use our available funding capabilities to internally develop technology that fill our long-term growth. The test we announced today, which is the largest of the gene panels for the carrier screening space. From previous answers, certain companies obviously feel incapable of running in this space. We feel that even with this large gene panel, we can offer efficiency and provide more quality tests to address market demand. Our funds will be allocated to continue in R&D to boost our capabilities. We're looking for the right space and also looking for consolidation but in addition, Paul can address some of the share repurchase program.

I think your question is excellent because at the end of the day, our unallocated cash position on a relative basis is as strong as ever. We've been very aggressive with stock buybacks. We've acquired a number of businesses. We feel so comfortable with our business capability and the prospects for the future; we still have a sizable cash balance. You have seen that even with the losses for the quarter, excluding investing and financing activities, we still generated cash during the quarter. The other thing, as we talked about revenues and the color around revenues, yes, we're guiding towards losses for the entire year. Part of that is because of the reduced growth in operating margin. You saw low gross margin in the fourth quarter of 2022. In the first quarter of 2023, the gross margins can be as high as 7, 8, or 9 points higher than what you've seen in the fourth quarter. That kind of increase in gross margins will be anticipated to increase throughout the year. For the operating expenses, you saw several charges and things that were COVID-related in the fourth quarter. On an absolute dollar basis, you should see lower operating expenses in each quarter compared to what you saw in the fourth quarter. Aside from one-time and other types of normal charges, we do see containment within our cost structure. Combining that with our capabilities and what we laid out in the core, yes, we are not projecting profits for 2023 but the cash burn should be significantly reduced which brings us back to what we are going to do with that cash. All those options are still very much open for the company.

Appreciate the significant color there. The one thing I have a question on, talking about OpEx moving lower. I believe Brandon mentioned we might see some S&M adds to the commercial team over the summer. Could you maybe discuss some of the dynamics there and what we can expect in terms of dollar impact?

Yes. I’ll frame it and then turn it over to Brandon. The thing that you saw in the fourth quarter was the wind down of COVID. There were several reductions related to COVID and that pivot has raised over the quarter as we look toward 2023. We are planning on aggressive hiring and what we can do to bolster our entire commercial organization. Now I’ll turn it over to Brandon, who can discuss where he sees his focus and expanding the team and spending for us to achieve these targets.

Yes, certainly, I echo what Paul said. I mentioned in my section that we may expand this summer, that's purely driven by the opportunities we are seeing. Fulgent was presented a fantastic opportunity to grow our reproductive health space by one of the larger competitors exiting the marketplace. We scaled up our operations incredibly fast. We began this late last year, and we’re hitting our turnaround time, hitting our quality metrics, which has made our clients happy. The reimbursement and ASPs we’re seeing, we're very pleased with, and there's still a lot of opportunity out there. We think we're very well positioned to win in this space; thus hiring the right salespeople to help us capitalize is a good investment for the company.

Perfect. Really appreciate that. And then just the last one for me would be so far, how have you seen Fulgent Pharma come into the fold? Just curious on the integration status there? It sounds like there are a lot of exciting pieces working in that business and would appreciate more color.

Yes. Thank you for the question. The integration is in process. We converted the employees to Fulgent and we are still building up a more robust GMP manufacturing capability. We are making all the polymer GMP in-house. This is a significant component for the pharma and manufacturing process. We also started to line up another contract manufacturer to provide the polymer and the drug mixing, filtering, and labeling. That process is also in place which will produce several thousand vials of the drugs for clinical trial. Overall, the integration is progressing well. Additionally, we are acquiring more clinical data from the Phase Ib trial. The data has been submitted to ASCO for presentation in June this year. Due to ASCO's requirements, we cannot release data before their presentation. We feel good about our progress in this respect.

Next question is coming from Tyler Anderson from Piper Sandler.

Sorry about that. This is Tyler Anderson, representing David Westenberg at Piper Sandler. I was wondering what are the expected margin outlook for the new business segments that you're breaking out? And what levers are you going to be pulling to improve them? Additionally, how is the pharma spending looking throughout the rest of the year? Do you see any opportunities to further expand your menu? And if so, do you think you will take an inorganic or organic approach to that?

Okay. I'll kind of tee it up. There are a lot of different questions built into there but we’ll gladly take several follow-up questions from you because I want to ensure we hit all those points. First and foremost, on our guidance for the overall business: when I was talking about operating margin, this includes the $15 million to $17 million of funding for pharma. This is fully built into the model. Next, we will lead into the three areas of our business, Anatomical Pathology, Precision, as well as Pharma Services. I think it goes without saying that the margin profile for Precision as well as the Pharma Services remains highly attractive for the company. I think for Anatomical Pathology, that market traditionally has a lower margin profile. Although we're doing everything possible to gain efficiency for that marketplace, utilizing the systems that we have, it will take time. That's not something that is going to happen overnight, nor is that our expectation. Our anticipation is that the margin profile for that business, although it is low, will gradually look more favorable throughout time, while the Precision as well as the Pharma Services should show attractive margins. I’ll turn it over to Brandon, who can talk more about the margin profile for those markets.

No, I don't have a lot to add there. Maybe I'll just address your second question, which was about menu expansion. I am not aware of any company that's launched as many tests as Fulgent has in the last several years. We clearly have an ability to rapidly launch tests and commercialize them at scale. We’re continuing to do so; we talked about a few on the call today. We launched our largest-ever carrier screening panel and our new Heme NGS Profile which received MolDx approval with an attractive reimbursement rate. We're going to continue to launch new products in nearly all of our business areas, including precision medicine and Pharma Services. Our R&D and technology allow us to do this with modest investment in R&D. The short answer is yes; you can expect continued menu expansion. In terms of organic versus inorganic growth, we see exceptional organic growth in the back half of last year and early into this quarter, capitalizing on the market opportunities with products and technology available at Fulgent. We continue to seek M&A as well. This leadership team consistently evaluates companies and assets. As Paul mentioned on the call, the growth is likely to come from organic and inorganic strategies, but we see that optionality for 2023 and beyond.

Thank you. We reached the end of our question-and-answer session. Ladies and gentlemen, that does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.