NEO 10-Q

Neogenomics Inc (NEO)

10-Q 2025-07-29 For: 2025-06-30

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Added on April 10, 2026

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Nevada		74-2897368
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9490 NeoGenomics Way,	Fort Myers,
Florida		33912
(Address of principal executive offices)		(Zip Code)


PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)						5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						26
Item 3. Quantitative and Qualitative Disclosures About Market Risk						37
Item 4. Controls and Procedures						37

PART II OTHER INFORMATION
Item 1. Legal Proceedings						38
Item 1A. Risk Factors						38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						38
Item 3. Defaults Upon Senior Securities						38
Item 4. Mine Safety Disclosures						38
Item 5. Other Information						38
Item 6. Exhibits						40
SIGNATURES						42


ACA						The Patient Protection and Affordable Care Act
ACLA						American Clinical Laboratory Association
AKS						Anti-Kickback Statute
CAP						College of American Pathologists
CDx						Companion Diagnostic
CLIA						Clinical Laboratory Improvement Amendments of 1988
CMS						Centers for Medicare and Medicaid Services
CRO						Contract research organizations
DHS						Designated health services
FCA						The federal False Claims Act
FDA						U.S. Federal Drug Administration
FISH						Fluorescence In-Situ Hybridization
GAAP						U.S. generally accepted accounting principles
GDPR						The European Union’s General Data Protection Regulation
HIPAA						The Health Insurance Portability and Accountability Act of 1996
IHC						Immunohistochemistry
LDT						Laboratory developed tests
LIMS						Laboratory Information Management System
MolDx						Molecular Diagnostic Services Program
MRD						Minimal residual disease
NGS						Next-generation sequencing
OIG						The Office of Inspector General of the Department of Health and Human Services
PCR						Polymerase chain reaction
PHI						Protected health information


	(unaudited) June 30, 2025		December 31, 2024
ASSETS
Current assets
Cash and cash equivalents	$	154,723	$	367,012
Marketable securities, at fair value	8,962		19,832
Accounts receivable, net	153,125		150,540
Inventories	34,171		26,748
Prepaid assets	22,831		20,165
Other current assets	9,785		11,722
Assets held for sale (Note 3)	8,956		—
Total current assets	392,553		596,019
Property and equipment (net of accumulated depreciation of $200,689 and $189,990, respectively)	85,462		94,103
Operating lease right-of-use assets	82,870		79,583
Intangible assets, net	301,795		339,681
Goodwill	524,143		522,766




Other assets	7,127		5,886
Total non-current assets	1,001,397		1,042,019
Total assets	$	1,393,950	$	1,638,038
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	27,492	$	21,607
Accrued compensation	48,557		62,443
Accrued expenses and other liabilities	18,479		12,624

Current portion of operating lease liabilities	4,052		3,381
Current portion of convertible senior notes, net	—		200,777


Contract liabilities	1,084		409
Liabilities held for sale (Note 3)	456		—
Total current liabilities	100,120		301,241
Long-term liabilities

Operating lease liabilities	66,616		60,841
Convertible senior notes, net	341,095		340,335


Deferred income tax liabilities, net	19,976		21,510
Other long-term liabilities	12,103		11,772
Total long-term liabilities	439,790		434,458
Total liabilities	$	539,910	$	735,699
Commitments and contingencies (Note 12)
Stockholders’ equity
Common stock, $0.001 par value, (250,000,000 shares authorized; 128,681,713 and 128,145,333 shares issued and outstanding, respectively)	$	128	$	128
Additional paid-in capital	1,250,679		1,228,198
Accumulated other comprehensive income (loss)	29		(206)
Accumulated deficit	(396,796)		(325,781)


Total stockholders' equity	$	854,040	$	902,339
Total liabilities and stockholders’ equity	$	1,393,950	$	1,638,038


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
NET REVENUE	$	181,330	$	164,502	$	349,365	$	320,742

COST OF REVENUE	104,072		92,008		198,861		182,779

GROSS PROFIT	77,258		72,494		150,504		137,963
Operating expenses:
General and administrative	71,747		63,328		139,954		129,125
Research and development	9,023		7,886		19,204		15,506
Sales and marketing	24,075		21,677		46,758		41,898
Restructuring charges	—		1,544		—		3,942
Impairment charges (Note 5)	20,041		—		20,041		—
Total operating expenses	124,886		94,435		225,957		190,471
LOSS FROM OPERATIONS	(47,628)		(21,941)		(75,453)		(52,508)
Interest income	(2,263)		(4,592)		(5,984)		(9,426)
Interest expense	933		1,666		2,551		3,351
Other (income) expense, net	(482)		2		(547)		265
Loss before taxes	(45,816)		(19,017)		(71,473)		(46,698)
Income tax benefit	(724)		(375)		(458)		(995)
NET LOSS	$	(45,092)	$	(18,642)	$	(71,015)	$	(45,703)








NET LOSS PER SHARE
Basic	$	(0.35)	$	(0.15)	$	(0.56)	$	(0.36)
Diluted	$	(0.35)	$	(0.15)	$	(0.56)	$	(0.36)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	127,949		126,405		127,664		126,257
Diluted	127,949		126,405		127,664		126,257


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit				Total
		Shares			Amount
Balance, December 31, 2024		128,145,333	$	128		$	1,228,198	$	(206)	$	(325,781)		$	902,339
Issuance of common stock for ESPP		132,961	—			1,424		—		—			1,424
Issuance of restricted stock, net of forfeitures		70,829	—			(530)		—		—			(530)
Issuance of common stock for stock options		7,204	—			58		—		—			58
Stock issuance fees and expenses		—	—			(3)		—		—			(3)
Stock-based compensation expense		—	—			10,754		—		—			10,754
Net unrealized gain on marketable securities, net of tax		—	—			—		150		—			150


Net loss		—	—			—		—		(25,923)			(25,923)
Balance, March 31, 2025		128,356,327	$	128		$	1,239,901	$	(56)	$	(351,704)		$	888,269
Issuance of common stock for ESPP		135,778	—			847		—		—			847
Issuance of restricted stock, net of forfeitures		187,729	—			(2,297)		—		—			(2,297)
Issuance of common stock for stock options		1,879	—			16		—		—			16
Stock issuance fees and expenses		—	—			(3)		—		—			(3)
Stock-based compensation expense		—	—			12,215		—		—			12,215
Net unrealized gain on marketable securities, net of tax		—	—			—		85		—			85


Net (loss) income		—	—			—		—		(45,092)			(45,092)
Balance, June 30, 2025		128,681,713	$	128		$	1,250,679	$	29	$	(396,796)		$	854,040


	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
		Shares			Amount
Balance, December 31, 2023		127,369,142	$	127		$	1,190,139	$	(1,674)	$	(247,055)	$	941,537
Issuance of common stock for ESPP		70,278	—			917		—		—		917
Issuance of restricted stock, net of forfeitures		(17,398)	—			(199)		—		—		(199)
Issuance of common stock for stock options		12,764	—			102		—		—		102
Stock issuance fees and expenses		—	—			(4)		—		—		(4)
Stock-based compensation expense		—	—			7,774		—		—		7,774
Net unrealized gain on marketable securities, net of tax		—	—			—		344		—		344

Net loss		—	—			—		—		(27,061)		(27,061)
Balance, March 31, 2024		127,434,786	$	127		$	1,198,729	$	(1,330)	$	(274,116)	$	923,410
Issuance of common stock for ESPP		102,112	—			1,280		—		—		1,280
Issuance of restricted stock, net of forfeitures		32,607	—			(1,631)		—		—		(1,631)
Issuance of common stock for stock options		281,608	1			2,320		—		—		2,321
Stock issuance fees and expenses		—	—			(3)		—		—		(3)
Stock-based compensation expense		—	—			8,841		—		—		8,841
Net unrealized gain on marketable securities, net of tax		—	—			—		308		—		308

Net loss		—	—			—		—		(18,642)		(18,642)
Balance, June 30, 2024		127,851,113	$	128		$	1,209,536	$	(1,022)	$	(292,758)	$	915,884


Supplemental disclosure of cash flow information:
Interest paid	$	1,258	$	1,691
Income taxes paid	$	458	$	176
Supplemental disclosure of non-cash investing and financing information:




Purchases of property and equipment included in accounts payable	$	915	$	2,042


	Amount
Purchase consideration:
Initial cash consideration, net(1)	$	7,275


Contingent consideration	1,000
Total purchase consideration	$	8,275

Allocation of the purchase consideration:
Cash and cash equivalents	$	317
Accounts receivable, net	3,324
Inventories	657
Prepaid and other current assets	443
Intangible assets	1,200
Property and equipment	1,264
Operating lease right-of-use assets	6,632
Other non-current assets	200
Total identifiable assets acquired	14,037




Total identifiable liabilities assumed	10,602
Net identifiable assets acquired	3,435
Goodwill	4,840
Total purchase consideration	$	8,275


	June 30, 2025
ASSETS
Intangible assets, net	$	7,167
Property and equipment, net	1,378
Other assets	411
Total assets held for sale	$	8,956

LIABILITIES	$	456
Total liabilities held for sale	$	456


	June 30, 2025
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Financial Assets:
Short-term marketable securities:




Municipal bonds	$	6,006	$	—	$	(26)	$	5,980


Corporate bonds	2,999		—		(17)		2,982
Total	$	9,005	$	—	$	(43)	$	8,962


	June 30, 2025
(in thousands)	One Year or Less		Over One Year Through Five Years		Over Five Years		Total
Financial Assets:
Marketable Securities:




Municipal bonds	$	5,980	$	—	$	—	$	5,980


Corporate bonds	2,982		—		—		2,982
Total	$	8,962	$	—	$	—	$	8,962


	June 30, 2025
(in thousands)	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	150,113	$	—	$	—	$	150,113


Marketable securities:




Municipal bonds	5,980		—		—		5,980


Corporate bonds	—		2,982		—		2,982
Total	$	156,093	$	2,982	$	—	$	159,075


		June 30, 2025
	Amortization Period (years)	Cost		Accumulated Amortization		Net


Customer Relationships	7 - 15	$	144,301	$	80,410	$	63,891
Developed Technology(1)	10 - 15	276,825		74,487		202,338

Trademarks(2)	15	30,261		8,142		22,119

Trademark - Indefinite lived	—	13,447		—		13,447
Total		$	464,834	$	163,039	$	301,795


		December 31, 2024
	Amortization Period (years)	Cost		Accumulated Amortization		Net
Customer Relationships	7 - 15	$	143,101	$	75,423	$	67,678
Developed Technology	10 - 15	310,226		75,758		234,468
Marketing Assets	4	549		514		35
Trademarks	15	31,473		7,420		24,053

Trademark - Indefinite lived	—	13,447		—		13,447
Total		$	498,796	$	159,115	$	339,681


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Amortization of intangibles included in cost of revenue	$	4,811	$	4,909	$	9,721	$	9,819
Amortization of intangibles included in general and administrative expenses	3,313		3,452		6,765		6,904
Total amortization of intangibles	$	8,124	$	8,361	$	16,486	$	16,723


Remainder of 2025	$	15,267
2026	30,533
2027	29,983
2028	29,983
2029	29,983

Thereafter	152,599
Total	$	288,348


	December 31, 2024		Goodwill acquired(1)	Impairment charges(2)	June 30, 2025
Goodwill	$	522,766	4,840	(3,463)	$	524,143


	Number of Shares	Weighted Average Exercise Price
Outstanding at December 31, 2024	5,231,262	$	16.14
Granted	3,147,871	$	11.66

Exercised	(9,083)	$	8.10
Forfeited	(914,134)	$	19.91
Outstanding at June 30, 2025	7,455,916	$	13.80
Vested and expected to vest at June 30, 2025	7,455,916	$	13.80
Exercisable at June 30, 2025	2,780,597	$	15.71


			Six Months Ended June 30, 2025
Expected term (in years)			5.2 - 6.5
Risk-free interest rate (%)			3.8% - 4.4%
Expected volatility (%)			56.0% - 67.1%
Dividend yield (%)			—
Weighted average grant date fair value per share			$6.50


	Number of Restricted Shares	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2024	2,164,071	$	14.25
Granted	2,693,092	$	11.19
Vested	(1,016,859)	$	14.10
Forfeited	(707,958)	$	12.52
Nonvested at June 30, 2025	3,132,346	$	12.05


	Number of Stock Units	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2024	647,084	$	19.35
Granted	—	$	—
Vested	—	$	—
Forfeited	(58,473)	$	18.62
Nonvested at June 30, 2025	588,611	$	19.42


	June 30, 2025		December 31, 2024
Current contract assets (1)	$	—	$	100

Total contract assets	$	—	$	100


Current capitalized commissions (1)	$	199	$	206
Long-term capitalized commissions (2)	43		11
Total capitalized commissions	$	242	$	217


Current contract liabilities	$	1,084	$	409
Long-term contract liabilities (3)	443		336
Total contract liabilities	$	1,527	$	745


	Three Months Ended June 30,								Six Months Ended June 30,
($ in thousands)	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Revenue	$	181,330	$	164,502	$	16,828	10.2	%	$	349,365	$	320,742	$	28,623	8.9	%


Period of Repurchase	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2025 - April 31, 2025	108,049	$	9.49	—	—
May 1, 2025 - May 31, 2025	5,180	$	6.39	—	—
June 1, 2025 - June 30, 2025	25,375	$	7.42	—	—
Total	138,604			—	—