Key insights
- Personalis (PSNL) reported a mixed Q1 2026 with an EPS miss but a revenue beat. The company is strategically shifting towards higher-margin clinical and biopharma MRD testing, leading to a temporary revenue decline. Full-year revenue guidance was reaffirmed, projecting 26% growth. The market reacted with a slight positive uptick, focusing on revenue and strategic progress. However, margin compression and EPS miss signal short-term headwinds.
Personalis Inc. (PSNL) reported its Q1 2026 earnings, showcasing a mixed financial performance. The company posted an earnings per share (EPS) of -$0.29, slightly missing the forecast of -$0.27. However, revenue came in stronger than expected at $15.47 million, surpassing the $14.49 million forecast by 6.76%. Following the announcement, Personalis shares saw a minor 0.16% increase in aftermarket trading.
Personalis is in the midst of a strategic transition, focusing on higher-margin revenue streams such as clinical and biopharma MRD testing. This strategy led to a 25% year-over-year decline in total revenue, primarily due to a planned reduction in lower-margin enterprise revenues. Despite this, clinical revenue saw a significant boost, attributed to newly secured Medicare reimbursements.
The actual EPS of -$0.29 fell short of the expected -$0.27, marking a negative surprise of 7.41%. However, Personalis exceeded revenue expectations with a 6.76% surprise, reflecting strong sales in strategic areas.
Following the earnings release, Personalis shares experienced a slight 0.16% uptick in aftermarket trading, closing at $6.08. This movement suggests a cautiously optimistic market response, focusing more on the revenue beat and strategic progress than the EPS miss.
Personalis reaffirmed its full-year 2026 revenue guidance of $78-80 million, indicating a 26% growth from 2025. The company anticipates significant growth in biopharma MRD revenue, expected to more than double year-over-year.
Management emphasized the strategic shift towards higher-margin revenues, noting that the current margin compression is both intentional and temporary. They expect margin improvements as reimbursement coverage expands.
During the earnings call, analysts inquired about the sustainability of the strategic shift and the timeline for margin recovery. Executives reiterated their confidence in the long-term benefits of the current strategy, despite short-term financial challenges.
Operator: Greetings, welcome to the Personalis first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Caroline Corner of Investor Relations. Thank you, and you may proceed, Caroline.
Caroline Corner, Investor Relations, Personalis, Inc.: Thank you, operator. Welcome to Personalis’ 1st quarter 2026 earnings call. Joining today’s call are Chris Hall, Chief Executive Officer, Aaron Tachibana, Chief Financial and Chief Operating Officer, and Rich Chen, President and Chief Medical Officer. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements within the meaning of the U.S. securities laws, including any statements regarding trends and expectations for our financial performance this year and longer term, cash runway and liquidity position, revenue expectations and timing, size and booking of orders, products, services, technology, expansion of clinical volume, reimbursement goals, the outcome and timing of reimbursement decisions, expectations for our existing and future collaboration activities, cost expectations, market size, and our market opportunity and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations.
We encourage you to review our recent filings, including the risk factors described in our most recent filings. Personalis undertakes no obligation to update these statements except as required by applicable law. Our press release with our first quarter 2026 results is available on our website, www.personalis.com, under the Investors section, and includes additional details about our financial results. Our website also has our latest SEC filings, which we encourage you to review. A recording of today’s call will be available on our website by 5:00 P.M. Pacific Time today. With that, I would like to turn the call over to Chris.
Chris Hall, Chief Executive Officer, Personalis, Inc.: Good afternoon, everyone. Thank you for joining us. I’m incredibly proud of what our team has accomplished in this first quarter, but more importantly, I’m energized by where we’re going. Since we launched NeXT Personal, we haven’t just validated our Win in MRD strategy, we have disrupted the market. Last year in 2025, we established the power of our platform, and this year in 2026, we are scaling it. We’re squarely focused on driving volume in this large and rapidly expanding market. Physicians trust NeXT Personal, our clinical test volumes are accelerating, and the broader medical community is validating our roadmap. Now, for those of you new to our story, Personalis is changing how cancer recurrence is detected and monitored. We operate at the absolute leading edge of sensitivity for tracking cancer in the blood.
Our test requires just a simple blood draw to detect a single fragment of tumor DNA in a background of 1 million. Let me be clear. This level of ultra-sensitivity is no longer just a technical leap forward, it’s a clinical necessity. This precision allows oncologists to detect recurrence months and years ahead of standard imaging. It also provides unprecedented confidence when delivering a negative result. The clinical market for tracking cancer in the blood or MRD is advancing towards a $20-plus billion opportunity. Personalis is armed with the right technology to win. Beyond the clinic, we are the engine powering the next generation of precision oncology. Biopharma companies rely on our platforms to analyze tumors, identify novel biomarkers, and de-risk their clinical trials. Turning to our Q1 results, we are executing aggressively.
In the first quarter, we delivered more than 7,800 clinical tests. This represents a 26% sequential growth over the fourth quarter and a 258% year-over-year increase. We’re thrilled with this momentum, especially considering that the first quarter is typically the industry’s most challenging due to standard seasonality. First quarter revenue of $15.5 million reflects our planned transition towards high-value, high-margin testing. In this quarter, total strategic revenue, which is revenue derived from the clinical testing and biopharma MRD adoption, reached $4.5 million. We remain on track to achieve our full year guidance of $78 million-$80 million, with strategic revenue expected to more than double year over year to a range of $30 million-$32 million. Let’s dig deeper into the three pillars of our Win in MRD strategy that are fueling this growth.
Our first pillar of our strategy is clinical adoption. Our clinical or commercial engine reached a new high water mark this quarter. We’ve now surpassed 1,000 ordering physicians in the quarter. We are seeing incredible retention of over 98% over the past several quarters among oncologists who integrate NeXT Personal into their routine testing workflows. We’re continuing to scale our commercial footprint with our partner Tempus. We are extremely confident in our 2026 annual volume estimate of 43,000-45,000 tests. We continue to innovate as we launched the pilot for our Real-Time Variant Tracker module. This new approach pushes MRD testing beyond ctDNA detection to track how the biology of a tumor is changing in response to therapy.
This feature allows physicians to not just monitor the presence of cancer, but to track how the biology of a tumor is changing in response to therapy. Gaining insights into the changes of emerging or resistance variants can enable doctors to proactively optimize a patient’s therapy. The early feedback has been positive. The second pillar of our strategy is building clinical evidence to secure and expand reimbursement, and we’ve come out of the gates fast in 2026. We submitted neoadjuvant breast cancer this quarter, and both that and our pan-cancer submission to monitor immunotherapy are being reviewed for coverage. While exact timing is subject to MolDX reviews, we are confident in our data and submission. If you want to understand why we’re so confident in our data, look no further than the AACR conference in San Diego last month.
The data showed off the power of our ultrasensitive approach, and 3 points stand out. First, the NEOPRISM-CRC data. Our collaborators used NeXT Personal and demonstrated a 100% negative predictive value for disease relapse following surgery in a group of colorectal cancer patients. They also used our test to identify super molecular responders who achieved a complete response after just the 1st cycle of neoadjuvant therapy. This opens the door in the future for potential non-operative management for some patients that could potentially save patients from unnecessary surgery and saving the healthcare system significant cost. The 2nd point is our real-world evidence. Data from NeXT Personal testing of 10,000 patients revealed that 40% of all positive detections occur in the ultrasensitive range below 100 parts per million across 14 different cancer types and stages. These are crucial early signals that conventional tests simply miss.
Third is the DARWIN 2 study. Our collaborators show that NeXT Personal is a strong predictor of a long-term immunotherapy success in lung cancer patients. Patients who cleared DNA early during treatment were 5 times more likely to remain progression-free at the 3-year mark. The third pillar of our strategy is leadership in the biopharma sector. Our biopharma MRD pipeline is growing robustly. We’re on track to achieve $20 million-$21 million in biopharma MRD revenue this quarter. While Q1 MRD revenue was $3.1 million, we expect this to scale significantly in the second half of the year as we commence the work for several large trials that are now committed. Biopharma companies recognize that to prove the efficacy of next-gen