Shares of Castle Biosciences, Inc. (NASDAQ: CSTL) surged 5.9% in pre-market trading on Monday following the company's strong Q3 2024 earnings release and positive clinical study results for its DecisionDx-Melanoma test.

For the third quarter, Castle Biosciences reported revenue of $85.8 million, up 40% year-over-year, beating analyst estimates by 8.6%. Notably, the company achieved profitability with net income of $2.27 million, compared to a net loss in Q3 2023, and earnings per share of $0.082 exceeding expectations.

The company also raised its full-year 2024 revenue guidance to $320-$330 million from the previous $275-$300 million range, reflecting continued growth momentum.

In addition to the strong financial results, Castle Biosciences presented updated findings from its prospective DECIDE study at the Dermato-Onco2024 conference. The data showed that using the DecisionDx-Melanoma test results to guide clinical decisions resulted in a significant 25% reduction in unnecessary sentinel lymph node biopsy (SLNB) procedures.

Importantly, the study found that no patients with a DecisionDx-Melanoma predicted low risk of less than 5% for lymph node positivity who opted for SLNB had a positive node, supporting the ability of the test to safely identify patients who can avoid the invasive procedure.