Greetings, and welcome to the MDxHealth Second Quarter 2024 Earnings Call. As a reminder, this call is being recorded. Before we begin, I would like to remind everyone that we will make forward-looking statements during today's call, whether in prepared remarks or during the Q&A session. These forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F. I would now like to turn the call over to Michael McGarrity, CEO. Thank you, Michael. You may begin.

Thanks, Paul, and thank you all for joining us for our second quarter 2024 earnings conference call for MDxHealth. With me today is Ron Kalfus, Chief Financial Officer. I am pleased to report that our business continued to generate strong financial performance in the second quarter and first half of 2024, with revenue growth of 32% and 34%, respectively, over 2023. Our results reflect our continued focus on commercial execution and operating discipline, which we believe will drive sustainable growth through 2024 and beyond. On our last call, I noted our strategy of creating multiple sources of growth. That proved to be the case again in Q2. And in a moment, I will provide greater detail on some of the key factors that help drive our strong performance. But first, a few brief highlights from our results that support our view that our growth trajectory is sustainable. We reported second quarter revenue of $22.2 million, an increase of 32% over the prior year period. Of note, and as I've consistently stated, we have two levers of revenue growth. The first is with our sales team driving unit adoption from our Urology customer base; and the second is our market access managed care team driving coverage, which shows up in our average selling price. In Q2, we clearly delivered on both levers with total billable test time of approximately 21,000 tests, representing total test unit growth of 31%. These two important metrics clearly underscore the balance and sustainable execution of our commercial team and the growth opportunity that lies ahead for us as we expand our menu offering in a $5 billion total addressable U.S. market and build our market-leading precision in precision urology diagnostics. Based on the expansion of our business in test menu, in an effort to continue to provide good visibility to the market, we are now disclosing volume and growth rates for our menu by segment. Volume for our tissue-based test consisting of Confirm and GPS achieved 15% year-over-year growth in the second quarter, with ASP clearly continuing to accelerate. Our liquid-based tests consisting of Select and Resolve provided 35% unit growth in Q2 over last year, and we expect the recently introduced hereditary germline test to begin to contribute to growth in this segment of our menu. For context and refresh on the value of our expanded menu driving our growth, I think it is appropriate to characterize the value of each test. Confirm mdx is a tissue-based test performed after a negative biopsy, which is the only test that analyzes each core of the biopsy with our proprietary methylation technology and delivers a result with a 96% negative predictive value. Additionally, a positive Confirm test can identify patients harboring undetected clinically significant prostate cancer, which regrettably misses up to 30% of the time. We are seeing increasing understanding of the importance of this test by our urology customers and by pathologists advocating for the value of Confirm after a negative biopsy. Our GPS Test is a highly advanced multiplex gene test from tissue following a positive initial biopsy in which we interrogate the tumor for risk stratification, directing clinically actionable follow-up by urologists and providing informed decision-making for patients. It should be noted that the GPS Test has 20-year follow-up data for adverse pathology, in prostate cancer-specific mortality, and requires materially less tissue than any other tests on the market, which is critical to our pathology stakeholders. To be clear, we are the only company that can provide an actionable diagnostic on the other side of an initial biopsy, whether positive or negative. As an additional update, I've commented on the complexity of the integration of the GPS Test post-acquisition as a carve-out from Exact Sciences. We completed the integration of the field sales organization mid-year 2023. And importantly, we have now completed the laboratory operations transition from the Exact Redwood City lab to our MDxHealth lab here in Irvine. Credit to Exact as our partner in our laboratory and information technology groups for completing this complex transition. We are confident that our diligence and thesis of the value of this acquisition have been realized and will continue to show in our growth trajectory, cementing our offering as the most comprehensive diagnostic menu for the pathway of prostate cancer. On the liquid-based side, our Select mdx test is utilized after elevated PSA and can deliver 95% negative predictive value, potentially avoiding unnecessary biopsies and associated risk to patients. Our Resolve mdx is a urine-based test for DNA organisms that can lead to complex and recurrent infections with 10 million cases of UTI that present annually, 20% of whom present urology. It is, again, a highly multiplex test of pathogens and importantly, also provides a broad and comprehensive susceptibility profile to treating clinicians, effectively getting to the right drug for the right bug. We believe this additional transparency provides a more consistent and granular view of our growth across our business. In addition, Q2 of last year was the strongest quarter for the business, and we believe this quarter's unit and revenue growth over that comp reflects both customer understanding of our value proposition as well as our sales team's execution. Our core technology provides multiple drivers of growth with our menu covered by Medicare and our prostate cancer test included in the NCCN guidelines. So it is our expanded menu and execution that serve as the basis for our recently raised 2024 revenue guidance to $85 million to $87 million, from the initial $79 million to $81 million provided at the beginning of this year. This new guidance represents greater than 20% year-over-year top line growth, which we view as a long-term sustainable goal. In a moment, I will provide some closing comments on the considerable progress we have made as well as our view forward. But first, let me turn the call over to Ron for a brief review of our financial and operating results for Q2. Ron?

Thank you, Mike. To follow on Mike's remarks, we are very pleased to report strong performance in the second quarter of 2024. Revenues for the second quarter ended June 30, 2024, increased by a robust 32% to $22.2 million versus $16.7 million for the first quarter of 2023. All of this growth was organic and delivered without expansion of our sales organization, which is a testament to the leverage we are generating from our sales channel and reflects greater market penetration of our full line of tests into the $5 billion U.S. addressable market. Revenue from our tissue-based test made up approximately 81% of our Q2 2024 revenue. It should be noted that the recently introduced hereditary germline test did not contribute to our growth for the second quarter, and as stated previously, we expect it to begin to contribute to our revenues in the second half of the year. Moving below the revenue line, our gross profit for the second quarter of 2024 was $13.3 million, an increase of 33% as compared to $10 million for the second quarter of 2023. Gross margins were 60% for the second quarter of 2024, as compared to 59.7% for the second quarter of 2023. Operating loss for the second quarter was $7.4 million compared to $7.7 million for the second quarter of 2023, representing a reduction of 4%, driven by top line growth, improved gross margins, and continued operating discipline. Cash and cash equivalents as of June 30, 2024, were $21.3 million. This concludes my brief overview of the results, and I will now turn the call back to Mike.

Thanks, Ron. Our top line revenue growth of 32% in the second quarter speaks to multiple positive factors that are driving our business and positioning our company for long-term growth. These factors include the strength of our underlying precision diagnostics technology, the incomparable breadth of our menu offering, the extraordinary network of relationships that we have built with healthcare providers, recognized and expanded reimbursement for our tests, and of course, the significant opportunity for growth from the precision diagnostics end markets. Our menu has been custom built to help fundamentally change the confounding and complex diagnosis of prostate cancer and be more effectively navigated for both clinicians and patients. Each year, our technology is enabling a growing number of patients and their physicians to make better informed and personalized treatment decisions. What is clear is that the adoption of precision diagnostics is only accelerating, and we believe we are uniquely positioned to take advantage of these long-term sustainable trends in the high-growth urology market. I will again comment that our core mission is that there is a patient and family on the other side of every sample we receive. With that in mind, we pass the friends and family test. That is, if you have a friend or family member being evaluated for potential prostate cancer, you want them on our menu and pathway, front-to-back, full stop. And as always, we carry a great deal of responsibility to provide value to all of our stakeholders, including patients, customers, payers, and shareholders. So thank you for your interest in and support of MDxHealth, and now I'll turn the call back over to Paul for questions.

Our first question is from Andrew Brackmann with William Blair. Please go ahead with your question.

Hi everyone, good afternoon. I appreciate you taking my questions. To begin, I've noticed some positive increases in volume on both sides of the business, including tissue and liquid. Could you discuss the factors influencing this at the account level? What trends are you observing regarding compliance with the overall menu? Additionally, how do you plan to advance this momentum in the latter half of this year into 2025? Thank you.

Well, thanks, Andrew. Yes, I think we feel two things. One, our urology customer base, we really advanced the pathway, right? It was previously, a number of years ago, a lot of doctors were trying tests and representatives having a follow-up. We've really driven compliance to the term you use to our pathway where it really becomes if this then. But probably a more material change, I would note, is our embracing our engagement with and network of pathology, right? Because what we are seeing and what's showing up in our numbers that we believe is sustainable. I would say that our relationships, access, influence, and our pathology customers is becoming as strong as our urology. And some of these pathology groups serve multiple urology group practices. So we're generating real leverage there. And I think the understanding by pathology of the value of Confirm that it's not a misread by the pathologists, right? It's the limitations of the finite sampling of tissue from a biopsy, which samples less than 1% of the prostate. And I think that understanding and engagement between urology and pathology has made all the difference, candidly. And we're really confident that both ways, both Confirm and GPS, I pointed to some of the futures, but that tissue requirement is a big deal for pathologists, right? Preserving the limited tissue that they have from the biopsy is a very important characteristic of the GPS Test. So it all kind of holds together and our sales team has built a strong hold with both urology and pathology. When you have it coming from both sides, we're seeing that be a really compelling driver for why we see this growth rate continuing.

Perfect. And then maybe just on the pricing side of things. You obviously called out market access and your efforts there. But can you maybe just give us a little bit more color around how much room do you think is left to move ASPs higher for the portfolio, be that from further market access and coverage decisions or even just improved revenue cycle management? Thanks.

Yes, Andrew, it's both, right? So we have room, right? Our Medicare rates for Confirm and GPS, and then our ASP associated with broader commercial private payer coverage as well as our revenue cycle management's ability to drive compliance to the contracts we have, even if they're out of network has made a big difference. And we have a lot of room to go there with coverage. In fact, they often we'll get a coverage decision, but not medical policies. So there can be a two-step process to coverage by certain payers, and that shows up in the acceleration of the ASP even by payer. So a contract payer, we make it a rate and then when we get a policy, that rate becomes more favorable. So we believe we have room there. And we're seeing it across each of our tests. So when I speak to the value of the sales team, but also our managed care team, all the levers are working.

Thanks guys.

Thank you. Our next question is from Mark Massaro with BTIG. Please proceed with your question.

Hi guys, this is Vidyun on for Mark. Thanks for taking the question. I guess the volume breakout for just a little bit different than the buckets we had. Can you just give us any qualitative color on relative areas of strength in the quarter? I understand that Resolve volumes, in particular, have been beating us for a while. So just curious if you had anything to call out there. Thanks.

Yes, Vidyun, so we would clearly move from unit revenue by Test for, which we've discussed, probably more for competitive market reasons. But we feel like this is a really good way to provide better visibility into our menu builds, and it's driven by a couple of things. One is when you look at the pricing of the tissue base versus the liquid-based test, it's materially different, right? So we think that gives you better visibility. As far as our unit growth rate, again, I would point to the comp of Q2 over Q2 last year. So we think these growth rates and the acceleration of revenue are very, very sustainable across our menu. So from a tissue perspective, the Medicare rates for GPS and Confirm and correspondingly our ASPs are significantly higher than Select and Resolve. So we are seeing continued growth across our menu for the most part in Resolve. And we have a lot of room in each of those markets. So we're confident that this gives better visibility for comparison purposes as we go forward in better detail on how the menu as we've expanded it, which I think is somewhat uncommon, contributes and builds up to our reported revenue and just as importantly, our view forward from a guidance perspective.

Okay. Perfect. Understood. Thanks for the color. And just a follow-up. This one is a little bit nitpicky, but it was a bigger quarter revenue-wise, but it didn't seem to drop down the gross margins as well as it has historically. I assume that would just be driven by the test mix, but just any other variables to call out on the gross margin? Thanks.

No other variables. Strictly the timing and mix, and its mix of not only again as our menus expanded, the mix becomes more relevant as far as the quarter-by-quarter gross margin, but also the payer mix that comes across. So it's a permutation of expanded menu and payer mix by quarter, but no material change there.

Great. Thanks for taking the questions.

Thank you. Our next question is from Thomas Vranken with KBC Securities. Please proceed with your question.

Hi, thanks for taking my question and congrats on the nice growth rates again. Maybe two questions from my side. The first one is whether you could give us a bit more insight into exactly where you stand with the integration of that germline testing? What are the steps that are needed or need to be taken to reach that revenue contribution as of H2? And then secondly, I also wanted to pick back up on a comment that you made a couple of months ago with regards to potentially adding or looking at additional opportunities to expand the testing menu, given the fact that the test has been added, what is now your current outlook into, let's say, the rest of the year and maybe next year with regards to evaluating additional opportunities? Thank you.

Thanks, Thomas. Yes, as far as the germline, we communicated, which is the way we take these new opportunities where we engage in a limited launch, and that's really twofold. I want to confirm our diligence and to get some experience with our sales organization and a limited launch to be able to roll out. So we're in that phase now in Q3. We have received samples. We also like to get, as you know, Thomas, about a quarter of history of payer mix coverage and to get some history of payments. Even with Medicare, we did the same thing with Select last year. So we, again, feel like we'll begin to report revenue contribution in the second half of this year and probably then be able to give you better visibility as to how it contributes to our overall view forward. But we like to fit for sure, with our menu offering. And again, I would point to the fact that concept, not unlike Resolve, came to us from our customers, right? All the good ideas come from the people in the field, whether it be our reps or customers, and that's a good example of that. As far as the second part of your question, growth opportunities. I'm careful there, but we have them, right? So I'll provide the detail, right? As I think I've commented before, I mean we run a growth strategy process here. We have, over the last two years, and we are always looking out as to what's out there that we think is interesting. It's also, candidly, an unintended consequence exercise to make sure we don't miss something. Both from our current menu offering competitively and where the direction of the market goes, but for new opportunities. And I think the strength of our channel and our customer base and our access and influence has flipped that from us always looking outbound to inbound. But we're very careful and focused in our diligence process for these opportunities. But if you made the assumption, I've communicated that we have a dashboard of opportunities that we evaluate, but we haven't, an even more rigorous process before we take anything to market or engage in any sort of partnership for distribution or strategic partnership. I'll make one more comment that I think you'd be okay with, but you saw the recent addition to our Board of Sandy Segal. And I would say that already having someone like that on our side on our team is supporting our marketing group, our relationship started with key opinion leaders. and having not only an accomplished practitioner and clinician but somebody who clearly can see beyond where the market used to be, where it is today, and where it's headed. So we like our setup there. And if you make the assumption that our menu will look different two years from now, as it does very different two years prior, where we had one test generating revenue, I think that's a reasonable assumption. Hopefully, that answers your questions, Tom.

Yes, very clear. Thank you very much, Mike. Much appreciated.

Thanks, Thomas.

Thank you. Our next question is from Jason Bednar with Piper Sandler. Please proceed with your question.

Hi, guys. Can you hear me okay?

Yes, Jason.

Great. So I just wanted to ask two questions. I'll ask both up front here and sorry for any background noise. But just want to ask on pace of volume activity during the quarter, just how that informs your view in the second half of the year. Obviously, doing very well here in the first half. And just kind of wanted to see if there's any strengthening or weakening or things are pretty stable across the quarter? And just remind us if you could have and where we're at with respect to getting back to normal testing volumes across the industry? And then the second question, a separate question. Now that we fully consolidated the GPS operations, are there efficiency benefits that we can expect to see in the second half of the year? Thank you.

Thanks, Jason. I'll address the second part first. We modeled the GPS, and Exact was responsible for running the test for us, which involved some economic factors. We believe they complement each other as we prepared our laboratory to launch the GPS test. Therefore, we do not anticipate any significant positive or negative impact on the profit and loss statement. Regarding our outlook for the second half of the year, we see it as very sustainable. Q3 tends to be unpredictable, so we are cautious about it, especially considering post-pandemic factors like seasonality related to patient staffing and vacations. However, I do not foresee any significant downturn or change in our growth trajectory, even with potential seasonal variations from Q2. That conveys our message, which is reflected in our guidance. Internally, we are confident that we can achieve 20% or more revenue growth in a highly sustainable manner.

Okay. Thank you.

Thanks, Jason.

Thank you. There are no further questions at this time. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.