Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MDxHealth SA (NASDAQ:MDXH) achieved a 28% revenue growth for Q4 and the full year 2024, demonstrating strong financial performance.
• The company reported a significant increase in test volumes, with tissue-based tests growing by 50% in Q4 and 31% for the full year.
• MDxHealth SA (NASDAQ:MDXH) maintained revenue growth without expanding its commercial sales organization, indicating increased productivity and market penetration.
• The company has a unique market position in the urology diagnostic space, offering clinically actionable results post-biopsy.
• MDxHealth SA (NASDAQ:MDXH) is on track to achieve positive adjusted EBITDA in the first half of 2025, reflecting improved financial health.

Negative Points

• Gross margins declined from 65.3% in Q4 2023 to 62.7% in Q4 2024, primarily due to test mix and timing of payments.
• Operating loss for Q4 2024 was $4.6 million, although it showed a decline from the previous year, it still indicates ongoing financial challenges.
• The company faces challenges in navigating the diagnostic pathway for patients, which remains complex and potentially confusing.
• MDxHealth SA (NASDAQ:MDXH) has not provided specific guidance on gross margins for the future, creating uncertainty for investors.
• The company's growth strategy does not currently include significant contributions from new offerings like germline testing, which may limit immediate revenue diversification.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with MDXH.

Q: Can you provide insights on how the germline offering is expected to contribute to the 2025 growth rate? A: We are confident that our germline offering will begin to contribute in 2025. We are conservative with its initial introduction, similar to our approach with the Resolve test. Our guidance is not heavily reliant on significant contributions from germline, but we are confident it fits well with our prostate cancer menu. - Michael McGarrity, CEO

Q: How should we think about gross margins moving forward, especially considering germline's contribution? A: While we don't provide specific guidance on gross margins, we expect them to remain in the mid-60s for the next few quarters. - Ryan Kalfus, CFO

Q: Could you elaborate on the outlook for operating expenses and potential changes in investment strategy after achieving adjusted EBITDA positivity? A: Our growth strategy remains consistent. We will continue to evaluate growth opportunities rigorously. While we don't anticipate transformative M&A, we will consider opportunities that align with our strategic goals. The business is expected to fund itself as we achieve operating profitability. - Michael McGarrity, CEO

Q: How have the recent NCCN guidelines for GPS impacted the business, and what is the potential for generating level one evidence? A: We have a plan to drive our data and access level one coverage. The NCCN guidelines have created some confusion, but our results with tissue-based tests show growth. We are confident in our position and the adoption of our tests by clinicians. - Michael McGarrity, CEO

Q: How do you view the breadth of your test menu, and should we expect any new test additions in 2025? A: Our current menu and market opportunity allow us to meet growth objectives. We are driving growth through market conversion and share. While we will be opportunistic, our guidance does not include additional growth opportunities for 2025. - Michael McGarrity, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.