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DATE
Monday, Nov. 3, 2025 at 5:00 p.m. ET
CALL PARTICIPANTS
Chief Executive Officer — Kevin T. Conroy
Chief Financial Officer — Aaron Bloomer
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TAKEAWAYS
Total Revenue -- $851 million, representing 20% growth, surpassing the midpoint of guidance by $43 million.
Screening Revenue -- $666 million, a 22% year-over-year increase, driven by Cologuard adoption, CareGAP, and rescreens.
Precision Oncology Revenue -- $183 million, up 12% year-over-year on a core basis, driven by Oncotype DX international and U.S. volume, and partner revenues.
Adjusted EBITDA -- $135 million, up $37 million or 37% year-over-year, with margin expansion of 200 basis points to 16%.
Non-GAAP Gross Margin -- 71%, down 100 basis points, attributed to record CareGAP shipments creating a timing difference between cost of goods and revenue.
Free Cash Flow -- $190 million, up $77 million, primarily due to receivables collections relating to Cologuard Plus and improved working capital.
Cash and Securities -- Exceeded $1 billion at quarter-end.
Raised Full-Year Revenue Guidance -- $3.22 billion to $3.235 billion, $78 million above prior midpoint.
Screening Revenue Guidance -- $2.51 billion to $2.52 billion, 20% growth at midpoint.
Precision Oncology Revenue Guidance -- $710 million to $715 million, 9% growth at midpoint.
Raised Full-Year Adjusted EBITDA Guidance -- $470 million to $480 million, 47% implied annual adjusted EBITDA growth and approximately 300 basis points of adjusted EBITDA margin expansion at midpoint.
CareGAP Program -- Record volume with broad payer partnerships; noted lower gross margins but positioned as highly accretive overall.
Cologuard Plus Performance -- Demonstrated 95% sensitivity and 94% specificity, with 40% fewer false positives than original Cologuard.
Cologuard Plus Coverage -- Achieved positive policy decisions from all top 10 payers; contracts signed with four of the top 10 plus Medicare (representing about 30% of volume).
Cologuard Plus Contribution -- Drove a 200-300 basis point price impact on screening growth in the quarter, with expected 300-400 basis point impact in the fourth quarter.
Ordering Providers -- More than 12,000 providers ordered Cologuard for the first time in the quarter; active ordering providers exceeded 200,000, reaching a new record.
Screening Volume Growth -- Quarter-over-quarter, over 250,000 additional people screened compared to the prior year period.
Rescreens -- Accounted for more than 25% of screening volume; current penetration in the mid-to-high 50% range, with compliance rates between 80%-95% after prescription fulfillment.
CancerGuard Launch -- Multi-cancer early detection test introduced; 14% of cancers are currently found through screening, and CancerGuard aims to improve early detection rates.
OncoDetect Launch -- Initial uptake in colorectal and breast cancers, leveraging synergies with Oncotype DX and Maestro technology; further data releases and next-generation launch planned for 2026.
Productivity and Cost Savings -- Progressing on $150 million cost-savings plan for 2026, with approximately $85 million in one-time transformation charges expected this year.
International Strategy -- Plans in place to globally expand Cologuard and capitalize on Genomic Health’s international reach.
SUMMARY
Exact Sciences Corporation (EXAS +4.12%) delivered record revenue and screening volume growth, raising full-year revenue and adjusted EBITDA guidance and implying significant annual margin expansion. The company’s improved operational efficiency and cash generation were attributed to successful commercial execution, Cologuard Plus uptake, and working capital optimization. Strategic payer partnerships expanded Cologuard Plus coverage, while provider engagement and technology platform enhancements drove a surge in first-time ordering clinicians.
Management considers CancerGuard’s multi-channel commercial launch and direct-to-consumer initiatives a major step intended to address the low percentage of cancers currently detected by screening.
OncoDetect’s launch is supported by positive early utilization in key cancer types, with additional validation data and a Maestro-enabled next-generation version targeted for 2026.
Cost control efforts are yielding substantial G&A leverage, and collections from Cologuard Plus have contributed to a record year-to-date free cash flow figure of $236 million.
Guidance for upcoming quarters assumes CareGAP’s record activity will diminish in the fourth quarter, leading to an anticipated sequential improvement in gross margin.
INDUSTRY GLOSSARY
Cologuard: A stool-based DNA test used for non-invasive colorectal cancer screening.
Cologuard Plus: An enhanced version of Cologuard with higher sensitivity and specificity for colorectal cancer detection.
CareGAP: Programs designed to identify and close gaps in cancer screening rates among payer and health system member populations, often through targeted patient outreach.
Oncotype DX: A gene expression profiling test for cancer, supporting risk stratification and treatment guidance.
Maestro Technology: Proprietary whole-genome sequencing technology applied to next-generation cancer diagnostics and minimal residual disease (MRD) testing.
CIO (Customer Initiated Orders): An ordering channel enabling patients to request diagnostics via telehealth and digital platforms, bypassing traditional in-office encounters.
MRD (Minimal Residual Disease): The small number of cancer cells that remain in the body after treatment, detectable with specialized molecular diagnostics.
Full Conference Call Transcript
Kevin T. Conroy: Thanks, Derek. The Exact Sciences team delivered record results in the third quarter. Thanks to the team's execution, we are raising our full-year 2025 revenue and adjusted EBITDA guidance. A few highlights from the quarter include growing revenue 20% to $851 million, the highest quarterly growth rate in over two years. This was driven by Cologuard's strong brand awareness, inspiring commercial execution, accelerating health systems integrations, and a record number of ordering providers. Screening a quarter of a million more people in the third quarter versus last year. Deepening our relationships with payers and health systems by helping close gaps in guideline-recommended cancer screening and launching CancerGuard, our multi-cancer early detection test.
Our team is focused on continued commercial effectiveness, expanding access to Cologuard Plus, and driving adoption of our new tests to close a strong year. I will now pass the call to Aaron to discuss our financial results.
Aaron Bloomer: Thanks, Kevin, and good afternoon, everyone. Total revenue grew 20% year over year to $851 million, $43 million above the midpoint of our guidance. Growth was led by screening, which increased 22% year over year to $666 million. We saw broad-based Cologuard growth led by strong execution from the commercial organization, CareGAP programs, and rescreens. Precision oncology revenue increased 12% year over year on a core basis to $183 million. Growth was led by continued Oncotype DX expansion internationally, U.S. Oncotype DX volumes, and partner revenues. We generated $135 million in adjusted EBITDA, an increase of $37 million or 37% year over year.
Adjusted EBITDA margins expanded 200 basis points to 16%, driven by continued efficiency efforts across our lab, supply chain, G&A, and support functions. Non-GAAP gross margins were 71%, down 100 basis points versus last year. The reduction was driven by record Caregap shipments, which can cause a temporary timing difference between cost of goods and revenue. Free cash flow was $190 million during the quarter, an increase of $77 million. This was driven by increased receivables collections following the Cologuard Plus launch and continued working capital improvements. Year-to-date free cash flow is $236 million, an increase of $173 million or 270% year over year. We ended the quarter with cash and securities of just over $1 billion.
Turning to guidance, we are raising total full-year revenue to between $3.22 and $3.235 billion, an increase of $78 million at midpoint. This includes screening revenue between $2.51 and $2.52 billion or 20% growth at midpoint and Precision Oncology revenue between $710 and $715 million or 9% growth at midpoint. We are raising our adjusted EBITDA guidance to between $470 million and $480 million for the full year, or 14.7% adjusted EBITDA margins at midpoint. Guidance at midpoint implies more than 47% adjusted EBITDA growth, or about 300 basis points of adjusted EBITDA margin expansion. As stated on our last call, our adjusted EBITDA guidance does not reflect any potential impact from the Freedom licensing agreement.
The upfront payment of $75 million will be expensed to R&D upon clearance of HSR and it will not be an add-back to adjusted EBITDA. Overall, this quarter marks an inflection point in our business. Momentum is building across the company, operating leverage is expanding, and cash generation continues to strengthen. We are well-positioned to achieve our 2027 financial targets and create long-term value.
Kevin T. Conroy: Back to you, Kevin. Thanks, Aaron. Strong Cologuard performance was driven by the trust patients, healthcare providers, and health systems have in the Cologuard brand and our commercial organization. The iconic Cologuard brand is recognized by more than 90% of consumers. This brand awareness is driving increased adoption of Cologuard among the 55 million Americans who are not up to date with colorectal cancer screening. To have a trusted diagnostics brand, you need to have best-in-class performance. Cologuard Plus raised the bar for noninvasive CRC screening tests, demonstrating 95% sensitivity and 94% specificity. This performance leads to a 40% reduction in false positives compared to the original Cologuard.
A recent modeling study published in the Journal of the National Cancer Institute showed that Cologuard Plus was the only noninvasive screening option shown to be efficient at guideline-recommended intervals in age ranges. We continue to make progress expanding patient access to Cologuard Plus, including positive coverage decisions from each of the top 10 payers. In the third quarter, we also signed contracts with Aetna and Highmark to bring the added value of Cologuard Plus to their members. Backing the Cologuard brand is our patient-centered technology platform, ExactNexus. We've spent over a decade building a platform that is deeply integrated within primary care workflows.
Our platform connects tens of millions of patient records and integrates access and awareness to accelerate the adoption of new tests. Broad insurance coverage, deep provider engagement, health system integrations, and proven product quality allow us to deliver innovative diagnostics efficiently and at scale. The power of the Cologuard brand and our ExactNexus platform is driving triple-digit growth in a new patient demographic: Customer Initiated Orders or CIO. This enables individuals to easily request tests ordered online by a telehealth provider directly from their phones. ExactNexus is eliminating friction points for individuals who know they want to get screened with Cologuard. Our commercial engine continues to deliver strong results.
The sales team is energized by territory realignments, AI-powered efficiency tools, and new products, Cologuard Plus and CancerGuard. The changes we made are working. In the third quarter, we had over 12,000 providers order a Cologuard test for the first time, the greatest number in over five years. We also saw the number of active ordering providers climb to over 200,000, a new record. Our commercial team is firing on all cylinders, and they're just getting started. All these efforts will have a lasting impact and fuel momentum in Cologuard rescreen. Rescreens represent the growing base of patients that rely on Cologuard every three years to stay up to date on colon cancer screening.
Today, these patients make up more than a quarter of our total screening volume. In the third quarter, we launched CancerGuard, our multi-cancer early detection test. With a blood draw, CancerGuard screens for more than 50 cancer types and subtypes. This launch is a major step forward in our mission to help eradicate cancer through earlier detection. Today, 14% of cancers are found through screening. CancerGuard will help address this problem. We are bringing CancerGuard to patients through many channels to maximize patient adoption, including primary care physicians, health systems, concierge practices, and our CIO platform. We are leveraging our large sales force to educate providers about CancerGuard.
In the third quarter, we trained the first group of sales reps on CancerGuard. We plan to train our entire screening and precision oncology commercial teams in the U.S. by the end of the year. On October 1, we launched our consumer-initiated ordering platform that allows people to request a CancerGuard test directly from our website and builds on the learnings of Cologuard CIO capability. Starting in the fourth quarter, we are investing in direct-to-consumer marketing, including social media campaigns to drive awareness of CancerGuard. Drawing on a decade of consumer marketing experience with Cologuard, these efforts leverage our trusted brand with the message that CancerGuard comes from the makers of Cologuard.
We are excited about the launch and we look forward to sharing more over the next few quarters. Our Precision Oncology team continues to be a global platform for growth. Oncotype DX delivered solid order growth globally in the third quarter. The strong summer was supported by effective commercial and the recent expansion in screening guidelines to include younger age groups. We are seeing positive momentum across our precision oncology portfolio, including OncoXtra, RiskGuard, and our recently launched MRD test OncoDetect. The OncoDetect launch is progressing well. We're seeing encouraging utilization in colorectal cancer and meaningful traction in breast cancer driven by synergies with Oncotype DX. Turning to our pipeline.
One of our guiding R&D principles is to invest in areas where we can help patients the most. We have broad technological capabilities through our multi-omic platform, including our proprietary PCR and also deep next-generation sequencing capabilities. These technologies form the backbone of our novel tests. Our platform allows us to advance multiple single cancer screening tests in areas of significant need such as liver, esophageal, and endometrial cancers. Current screening methods for these cancers are outdated and lack effectiveness. Next week at the Liver Meeting, the flagship international congress hosted by the American Association for the Study of Liver Diseases, we will present Oncoguard liver data from the ALTUS study.
This readout underscores the test's potential to transform liver cancer surveillance for at-risk populations. During the fourth quarter, we will share data supporting OncoDetect's use in triple-negative breast cancer. In 2026, we also look forward to sharing clinical validation data and launching the next-generation version of OncoDetect that leverages our Maestro technology. We are investing in MRD evidence generation to support reimbursement and adoption. We have over 10 clinical validation studies planned over the next few years, including four key studies in breast cancer, colorectal cancer, and pan-tumor indications. I'm very proud of the strong third quarter the Exact Sciences team delivered.
Our best-in-class products, trusted brands, patient-centered platform, and commercial execution provide a foundation for long-term growth as we continue to make transformative new tests available to physicians and their patients who need them. We're now happy to answer your questions.
Operator: Thank you. Your first question comes from Vijay Muniyappa Kumar with Evercore ISI. Your line is open.
Vijay Muniyappa Kumar: Hi, Kevin. Thanks for taking my question and congrats on the nice spring here. My one question is on just the performance in the third quarter. Quite remarkable here now for screening. Can you talk about what drove the speed, right? Was this care gap versus prescreens versus first-time rescreens? And related to that, I think that Street's looking at, like, 14% screening growth for 2026. You guys have done 20% year to date. So I'm curious on how any early comments on 2026? Thank you.
Kevin T. Conroy: Sure. Thank you, Vijay. And I'll let Aaron take this second part of that. But the first part, let's go back a year ago when we had a challenging quarter. The team really came together. I'm incredibly proud of the work that they did to deepen our relationships with health systems, to design territories allowing us to have total ownership of those territories, making more calls with better targeting, stronger messaging, you know, so that you could really bring the Cologuard brand, which is known for its high its strong test performance, sensitivity, and specificity, through our ExactNexus platform and then also bringing new products.
So this is a total commitment on the part of leadership and really, really more so on the part of our frontline sales force, our team members who are out there every day doing important work. And that's both on the screening side and the precision oncology side. So we could not be more proud of the work that is done and we think that this sets us up for lasting growth and a flywheel effect so we can get those 50 million Americans who are not up to date to date with screening screened.
Aaron Bloomer: And then, Vijay, specific to your comment on 2026, think it's important to keep in mind the long-term guide that we have sitting out there, which is a 15% compounded annual growth rate from 2022 through 2027. As you referenced, we're obviously accelerating in growth here through the back half of the year. The full-year guide for screening is at 20%. The back half of the year is obviously even north of that. And so, obviously, we're pacing ahead of our long-term goal, but it's important to note, you know, our normal practice would be to provide our 2026 guidance at our next earnings call as we review the fourth quarter and look ahead to next year.
Obviously, as Kevin alluded to, really pleased with the progress on the commercial side, the momentum that we have with Caregaps. And then there's a lot of work we have to do in the coming months on Cologuard Plus contracting as well.
Operator: The next question comes from Tycho W. Peterson with Jefferies. Your line is open.
Tycho W. Peterson: Hey, thanks. Two hopefully quick ones. Aaron, maybe just on the Caregap strength, how should we think about that continuing and then impact on, you know, margins going forward? Then for Kevin, can you just talk a little bit more about the CancerGuard strategy with payers and how you're thinking about reimbursement? Obviously, one of your competitors has a CRC first pass on MCED reimbursement. So do you kind of think about that as an approach versus where you're headed?
Aaron Bloomer: So on the first part, Tycho, we had a record quarter in terms of our Caregap business. We had our largest orders go out in the third quarter. And how we're thinking about this is we're really investing in our Caregap program. Obviously, it's slightly lower gross margins, but highly accretive to the total bottom line. And this is really giving us an opportunity to partner with payers, helping them achieve their quality measures. It's also really helping us with patients, getting more and more of that 50 to 55 million patients out there and get them up to date with screening.
And so we view this as an investment that's really bringing accelerated growth here in the back half of the year that obviously has both near-term as well as long-term patient and financial impact. As it relates to the gross margins, we would expect to see an uptick in the fourth quarter as we would have less Caregap shipments go out in the fourth quarter relative to Q3. And again, as a reminder, these are typically back half weighted. I think we've said in the past, more than two-thirds of the revenue kind of comes in the back half of the year.
Kevin T. Conroy: Yes. As for the second question, as we talked about with CancerGuard, CancerGuard is priced at $689 distinct from other Medicare-covered tests. We, you know, think the approach is being taken by others. It's an interesting approach. I think the more sustainable approach given the regulatory context and compliance context is to keep those two tests separate in the Medicare population in terms of the playbook to get coverage across Medicare and commercial payers, we think that is a long-term game.
And we think that the work that is being done in this field by Grail, by Exact, by others, is work that will eventually captivate the payers to recognize the positive impact that screening can have and that's the way that we look at this space.
Operator: The next question comes from Patrick Bernard Donnelly with Citi. Your line is open.
Patrick Bernard Donnelly: Thank you for taking the question. Kevin, maybe to stay on the screening side, you just update us on the latest on the timelines around Phrenome? I know V2 is looming. The FDA would love just an update on some of those timelines. And then on that same topic, just how you're thinking about your internal program? I know you kind of keep it going. Maybe just an update on how you're thinking about the two combined there. I appreciate it.
Kevin T. Conroy: Really, thanks for the question. Really no changes there at all in terms of the pre-known V2 timelines. We expect that data to be presented in conjunction with a scientific conference sometime in the next few months. In terms of our internal program, yes, that continues. We haven't given more of an update there. Other than to say the free known test is now the exact test. We're really looking forward to making that available to physicians and patients through our deep network of providers that we have a relationship with over 200,000 ordering in the last quarter. Over 250,000 total. And our incredible commercial reach.
We're excited about bringing our blood test subject to regulatory approvals to clinicians and to patients.
Operator: The next question comes from Brad Bowers with Mizuho. Your line is open.
Brad Bowers: Hi there. Thanks for taking the question. Just wanted to hear about kind of the Cologuard to Cologuard Plus Sunset plan. I would imagine it sounds like you're more aligned with payers than ever. And payers would want to have their members on the better test. So just wanted to kind of hear about how you're thinking of pacing. Thank you.
Kevin T. Conroy: Well, thanks for the question. And yes, the sunset plan is, it's in the works. We haven't provided public details of that at the appropriate time, we will. What's important is what you pointed out is that Cologuard Plus is a better test. There's no 95% sensitivity and 94% specificity, no non-invasive test. As a result, we are in active discussions with payers. The top 10 payers were proud to report have all covered Cologuard. So they've issued a positive policy decision that Cologuard Plus is covered, and now we're in discussions with six of the remaining 10 to contract.
So four are contracted, six remain, and there's a long list of additional smaller payers that we are focused on as well. And at some point next year, we will sunset Cologuard so that Cologuard Plus will be the test available to all patients. We think that's the right thing to do. It's incredible technology. It's differentiated. And it's good for patients.
Operator: The next question comes from Catherine Schulte with Baird. Your line is open.
Catherine Schulte: Hey guys, thanks for the question. Maybe just on your overall portfolio, you have some new products now with OncoDetect now covered by Medicare and CancerGuard launching. Are either of those material 25? And how should we think about measurement for success as those ramp in '26? Thanks.
Kevin T. Conroy: Thanks, Catherine. We do have these wonderful new products. As we've said from the beginning of the year, we don't expect them to be material in terms of the overall mix of revenues over time. We expect them to be very material. And those are big markets. They take time to penetrate. And we are pleased in terms of how they are progressing. CancerGuard, of course, just launched within the last couple of months. And as a result, that's nascent. But we're excited about what we're seeing and the growth that we have seen not only week over week, but day over day. And we have big expectations there.
And with OncoDetect, and I'm sure there will be more questions more in-depth there, but we are doing all of the things you need to do in terms of getting the scientific evidence to secure a broad base of coverage so that we can go out there and serve patients in this large and growing opportunity. We're excited about it.
Operator: The next question comes from Brandon Couillard with Wells Fargo. Your line is open.
Brandon Couillard: Thanks. Good afternoon. Aaron, could you give us a sense of what Cologuard Plus contributed to screening growth in the quarter? And where you see that mix exiting the year? And Kevin, it'd be great to get an update just on Caregap compliance and how that's playing out and if you've been able to move the needle a little more using your compliance engine. Maybe relative to where you were twelve months ago? Thanks.
Aaron Bloomer: Hey, Brandon. Thanks for the questions. On the first part, as it relates to Cologuard Plus, so when we originally did the guide for the year, we expected a couple of points in terms of contribution to growth coming from Cologuard Plus pricing and mix. What we saw in the third quarter, just given some of the progress we had made in everybody on the last call, with Medicare and two of the top 10 payers we were kind of in the 200 to 300 basis points range in terms of price impact on overall screening growth rates.
With now having four of the top 10 plus Medicare, we would expect kind of in the 300 to 400 basis points impact on growth in terms of the fourth quarter. And you kind of package that all together, those four payers plus Medicare represent approximately 30% of our volume, which is where we'll be exiting then as we head into 2026. And as Kevin alluded to earlier, obviously, active discussions with the remaining top payers as well.
Kevin T. Conroy: Thanks, Brandon. In terms of Caregap compliance, let me first just remind folks what Caregap is. Caregap is what we referred to payers who are approaching us to help them improve their CRC screening rates within their membership. And, unfortunately, again, about half of the population in the US eligible for colon cancer screening is not up today. And payers care about it. Health systems also care deeply about getting more of their member screening. Capacity is limited with GIs having pretty much full capacity across the country. So what is occurring is they're approaching us to help get an order initiated prescribed by a physician, so that the patient gets a Cologuard kit.
In terms of compliance, we see room for improvement there, Brandon. In terms of total volumes, we're seeing a significant year-over-year increase. As you may know, FIT programs, the Care Gap programs started about twenty years ago. That has been the predominant way to fill those care gaps. Many payers and now health systems are converting to Cologuard because they see an opportunity to secure a longer duration of somebody being screened and, therefore, getting three years of credit versus one year of credit. And then, also, they have fallen in love with our compliance engine, our ability to engage with the patients that we get are typically people who have refused screening over and over again.
I think it's just gonna take more work for us to get the uplift we know we can with Caregap compliance. We're pleased with the volume increase and the people we're getting screened. That this over time we think, can be even more impactful.
Operator: The next question comes from Puneet Souda with Leerink Partners. Your line is open.
Puneet Souda: Yes. Hi, guys. Thanks for taking my questions. First one, just wanted to understand the six commercial payers that are not in paying for Cologuard under the contracted rate, when do you think they will be contracted if you can provide some timeline on that. And just wondering, Kevin, CRC blood how are you thinking about pricing and if the data was positive for V2, how are you thinking about pricing there? Thank you.
Kevin T. Conroy: So in terms of the contracting for Cologuard Plus with the remaining top 10, all I can say, Puneet, is that we continue to work with those payers. Eventually, we will sunset Cologuard and move all payers really move all patients to the newer and better tests. We have great relationships with the payers. And I, you know, we have high hopes for getting that done sooner rather than later. So we won't be providing timelines there, but we're making strong progress. And then in terms of CRC blood pricing, we haven't decided that yet. Our philosophy around how we price our test is to secure the broadest access and impact.
If you look at the effectiveness of a screening program, it equals the sensitivity of a test times the access that people have for the test and compliance. Those factors are the factors that impact screening. Access is so important. You know, commercial payers are sensitive to price. And they look at the performance of a test as part of that mix. So that's been our philosophy, how we end up pricing a blood test is probably going to be within our greater philosophy of bringing value to patients and to payers in the greater healthcare ecosystem.
We think it's one of the reasons Cologuard has been such a wonderful success is because of where we priced it relative to colonoscopy.
Operator: The next question comes from Jack Meehan with Nephron Research.
Jack Meehan: Thank you and good afternoon. Just had a couple of financial ones wanted to ask. First is just more color on the $150 million cost savings program you've talked about in the past. Just how is that progressing and how you think that steps up into 2026? And then last quarter, you had the accounts receivable stepped up because of the timing of the Cologuard Plus payments. I was just wondering if you're fully caught up on that. It looked like yes, but I wanted confirmation. Thank you.
Aaron Bloomer: Hey, Jack. So on the first piece around the productivity program, really pleased with the progress that we've made. Just as a reminder, what we committed to was to deliver $150 million in savings in 2026, which would be about $100 million year-over-year impact. We're progressing very nicely against that. The actions that we need to take to deliver against that have been taken. If you think about the other component to that is the one-time expenses. And last quarter we guided to kind of $90 to $95 million in 2025. And then $105 to $120 million in total. We're gonna come in a little bit lighter on that, which is a good thing.
So we now expect approximately $85 million in terms of one-time expenses for this year. So making good progress, and the team is executing against that nicely. As it pertains to the AR, yes, all of the AR from Q2 related to Cologuard Plus has now been collected on in the third quarter. And maybe just take a step back on just the progress that the teams have made across Exact to really lean in and deliver record amounts of free cash flow for the company. On a year-to-date basis, we're at $236 million.
And obviously, the strength in the third quarter obviously came from collecting on the Cologuard Plus claims but also all of the progress that the teams have really made in terms of working capital improvements. So inventory optimization as well as renegotiation of payment terms with suppliers. So really, really pleased with the progress that the team has made across the company.
Operator: The next question comes from Dan Brennan with Cowen. Your line is open.
Dan Brennan: Great. Thanks for the questions. Congrats on the quarter. Maybe just one, know Aaron and Pat you typically updated in terms of the contribution within the screening guide between maybe just one, know Aaron in the past, you've typically updated in terms of the contribution within the screening guide between the different buckets, whether it's first-time users or Caregap rescreening. You've given some color. I wonder if you can disaggregate that, like how you're thinking about that for the year and maybe for the first quarter? And then just any comment on OpEx, sales and marketing kind of was below our expectation R&D was above. Just wondering kind of moving through the fourth quarter.
We think about like the different buckets within OpEx? Thank you.
Aaron Bloomer: Thanks, Dan. So we saw broad growth in the third quarter really across all lines of business. And no matter which way you cut it, 50 plus, 45 to 49, rescreens, care gaps, CIO, all elements of the business were growing, you know, north of double digits. So really pleased with the progress. All of the commercial improvements that Kevin alluded to earlier we're really seeing that flow through. Not only in the leading indicators and the sales rep productivity, but now, obviously, also into volumes. We talked at length already about Caregap and the record amount of volume that we're seeing there. As well.
Just in terms of some of the OpEx items, yes, R&D spend did step up a little bit in Q3. We would expect similar levels of spending in Q4. A lot of that is tied to all of the clinical evidence generation and the work we're doing to continue to improve our OncoDetect test and get additional cancer indications on that, into the future. In terms of sales and marketing, Kevin talked about that earlier as well. But we would expect and are investing in our CancerGuard launch. Particularly as it pertains to marketing.
And then you'll probably start to see whether you're watching on YouTube or Netflix or any of the other social channels that you'll start to see some CancerGuard ads start to take flight here as soon as this week.
Operator: The next question comes from Douglas Anthony Schenkel with Wolfe Research. Your line is open.
Douglas Anthony Schenkel: Hey, good afternoon, guys. Just a couple of quick questions. So first on seasonality, the fourth quarter has typically been a seasonally weaker quarter due to the holiday season. Obviously, guidance implies this is not the case this year. Some of that I think is just the assumption that ASP is going to increase sequentially. I think the balance of that is fair gap. Do I have that right? And if so, is that probably the right way to think about your business moving forward? Meaning not just this year? And then my second question is on CRC blood. It may be too early, but I'll ask anyway.
Just wondering if you have a good handle on how to manage that launch in a way where there's no channel conflict. And as we think about the P&L, at least in terms of gross profit per test, is there a way to price that test in a way where you know, there's there's you know, we're we're gonna we're gonna see the same level of growth profitability. Whether it's stool or blood. Again, it's early but just curious if you guys have given any thought to that, that you'd be willing to share. Thank you.
Aaron Bloomer: I'll start maybe on the first piece there, Doug. Just on the seasonality, Caregaps, obviously, are just with the tremendous demand that we're seeing from payers are becoming a larger part of our business. And again, given the lumpy nature that those programs have, i.e., they're back-end loaded, that certainly would distort some of the more traditional seasonality trends that we had in our business. And I would just flag in particular. So we think about this Q4 guide and then what that implies for a typical Q4 to Q1. Step down in terms of sequential growth as we head into 2026. And again, all driven by the strength in demand in our care gap programs.
You did hit on pricing. Pricing will be up slightly sequentially from Q3 to Q4, but that's really only about one hundred basis points in terms of the overall uplift.
Kevin T. Conroy: And for the second part of the question, Doug, around CRC blood and our launch of the our CRC blood test was licensed from Breenom. We will take lessons from the launch of Cologuard and the launch of Cologuard Plus and our unbelievable analytics around what patients have refused Cologuard or even colonoscopy over time so that we can get the right test to the right patient at the right time. And that right test may be a blood test for a patient who is consistently refused colonoscopy or a stool test. So that's important.
It's there are huge number of people that are in that refuser camp and getting them tested with a test that has lower performance is better than no test at all, for sure. We will price that in a way so that you know, we can maintain margins as much as possible. But we just don't see a conflict here because we're be out there educating physicians, clinicians, PAs, nurses about what patient population is appropriate for each test. So we think of this as expansive. The way we think about this program is expansive to where we are today with growth.
And because of the fact there are 50 million people not up to date with screening, there's plenty of room for growth significant growth with Cologuard and with our CRC blood test.
Operator: The next question comes from Andrew Frederick Brackmann with William Blair. Your line is open.
Andrew Frederick Brackmann: Hi, Good afternoon. Thanks for taking the question. Kevin, I think you made a comment that you're seeing encouraging signals with the MRD launch and in particular in the past, indication. Anything more you can share with respect to how you're sort of thinking about the halo effect that Oncotype brings to that indication in particular? Any signals or color that you can provide there? Thanks.
Kevin T. Conroy: Yeah. Thanks, Andrew. It's a twenty-one year of Oncotype DX in among oncologists, surgical oncologists, pathologists. They the customer trusts us with that tissue block. They trust us in the breast cancer space. So as you think about the adoption curve, in breast cancer, we think that is a natural starting point for us. Also, strength in colon cancer is also a natural starting point. The studies that we are doing in breast cancer include what we call the exact DNA double o three test, which is, or study. That's a study enrolling over 1,800 participants with the in conjunction with NSABP.
And then, also, we are enrolling a pan-tumor study that has enrolled across 10 different tumor types, including lung cancer. And so the evidence is going to mature. And as we get breast cancer coverage, we expect to be able to really start to more deeply penetrate that customer base. And we're excited about the ability to do that. The other thing that will unlock value is the Maestro technology. Which is the whole genome approach for our next version, and we expect that launch in 2026. It would be used to support other indications. It's important to start with breast.
The ability to look broadly across these thousands of different mutations while reducing the sequencing depth and achieving this ultra-low limit of both potentially below one part per million at an attractive cost point is a differentiator. And so that is work to be done. It's a huge market. It's growing. It's underpenetrated at the current time. And we think that our commercial organization and reputation among oncologists will be a great starting point.
Operator: The next question comes from Daniel Anthony Arias with Stifel. Your line is open.
Daniel Anthony Arias: Afternoon, guys. Thanks. Aaron, maybe just following up on rescreening. What percentage penetration are you assuming that you'll be able to achieve there this year? I know you were thinking mid-50s as a percent back in the starting the start of the year. That feels a little light just given the strength here, but we'd love to know just you know, what an updated view would be and whether you think that number should move higher next year.
Aaron Bloomer: So rescreens continue to kinda be in that mid-50s to high 50s. We've continued to make progress on that throughout the year, Dan. Think if you take a step back, one of the things that we're really trying to do is automate the rescreen process. And there's a number of different things that we have in flight to be able to do that. And what we have said is that over time, we think that we can get that up into the 70% or 75%. And the reason for that is because we know that the key to getting people rescreened is getting that prescription.
And that once we get the prescription and ship the kit back to that patient, we know that the compliance rate is anywhere from 80% to 95%. And so that's what we're laser-focused on right now. No more to update on that. We'll keep you all posted to what that means for future financial guidance.
Kevin T. Conroy: Yeah. The goal really is to automate the screening process that people just get screened and stay screened throughout the duration of the recommended screening time period. That's important. It's one of the unique things that we can do with Cologuard and the ExactNexus platform that we have invested so heavily in over the last decade.
Operator: The next question comes from Bill Bonello with Craig Hallum. Your line is open.
Bill Bonello: Hey guys, thanks a lot. I wanted to follow-up on the telehealth comment that you made. Consumers or patients being able to order directly. Can you just talk a little bit about how that then integrates with a primary care physician if you have that information? Or are able to get that information to set information get channeled back to the PCP? Would the PCP still get quality credit for that patient being screened? Is there any potential conflict there if the test is ordered via you rather than being prescribed by their PCP? How do we think about that?
Kevin T. Conroy: Well, thanks, Bill. Yes, that's something that we're really sensitive to as we rolled out not only CIO this customer-initiated ordering, but also rescreening Caregap programs. And one of the beautiful things about the ExactNexus platform and the power which is powered by Epic, is that the MyChart account gets integrated ultimately, and that may take the next couple of years to really bring that to its maximum impact. That allows patients and physicians to see any type of test that is performed anywhere ultimately gets back into one single electronic medical record.
So that then enables a physician to get full credit for all of the screening regardless of whether they initiated it and allows payers, are on moving to the payer platform, that allows them to see that as well. It's a powerful tool us being on Epic one of the nodes Epic, really creates the ability for us to do some pretty unique things in terms of managing the health at a population level. This is one of those really positive stories.
Operator: The next question comes from Michael Leonidovich Ryskin with Bank of America. Your line is open.
Michael Leonidovich Ryskin: I want to follow-up on a couple of points you guys touched on earlier. I mean, first, the gross margin you called out, think, 100 bps headwind think, kind tied it to the record carrier gas trend. Just to make sure, just relatively speaking, talking about being strong in 4Q, is that relatively the same impact that you'd expect then? And then make sure I got it right, reverses in 1Q and 2Q just from the seasonality? I just want to make sure I got the moving pieces right there. Then I'll put on a follow-up at the same time.
To bridge the revenue raise to EBITDA, really solid beat, obviously, a nice raise, but even it didn't come up quite as much. Is that gross margin impact that's different there or maybe it could be incremental R&D investments? You talked about earlier, I think when Dan Brennan was asking OpEx. Just kind of talk about the lines between GM and EBITDA. Thanks.
Aaron Bloomer: There's a lot of questions there, Mike. I'm going to do my best to unpack all of those. So on the gross margin, piece that we saw in the third quarter, yes, it was exclusively limited to just kind of the record demand that we saw within our CareCat programs. We would actually expect 4Q gross margins to step up. And if you look at kind of where consensus gross margins are in the fourth quarter, it does imply a step up, we certainly would expect that as well. And the reason for that is because we don't actually ship as many Caregap programs out in the fourth quarter as we do in the third quarter or the second quarter.
And the reason for that is because the payers, again, really wanna try to get patients screened through their PCP. Early on in the year and then kinda turn to these larger care gap programs that you get into the middle part of the year as they want to ensure that they achieve their quality score. And so then we would expect an uplift in April as well as then in January 2026. On your question as it relates to the flow through and the EBITDA guide, I think it's an important point too to just kinda take a step back, which is this is gonna be our second consecutive year with nearly 50% adjusted EBITDA growth.
Know, margins in the back half of the year are gonna be in the 16 to 17% range and well on our way to achieving the long-term goal that we have of 20%. If you look kinda down the p and l line, where we're seeing the most amount of leverage right now continues to be from G&A. We've talked about the productivity plan. G&A as it stands already right it will be down about 700 basis points on adjusted basis versus where we were two years ago. But we have said that this year was gonna be a year of investment.
Some of on the R&D side, Kevin just talked about some of the areas we're investing as it pertains to MRD. And the clinical evidence generation that we wanna generate in that very, very large underpenetrated market. And then in the back half of the year, really, on sales and marketing expenses, specifically marketing for CancerGuard. Again, very, very large market. We don't have to add salespeople to be able to get after that. We really wanna tap into this large market that exists, and we're putting our full back behind that and look forward to sharing updates, in coming quarters and years on how that launch is progressing.
Operator: The next question comes from Subhalaxmi T. Nambi with Guggenheim. Your line is open. A couple of model cleanup questions and then one topic on CancerGuard. What were the Cologuard ASPs this quarter? Were they up quarter over quarter? And did I hear you right? Cologuard volumes were grew 250,000 tests year over year? That's one. And on the topic of CancerGuard, you have an unparalleled PCP commercial infrastructure. That said, given this is a largely a cash pay market at this point, I'm curious how impactful do you expect the PCP commercial infrastructure advantage to be?
Aaron Bloomer: On your first point, Subbu, ASPs were up sequentially from Q3 versus Q2, and we would expect them to be up sequentially again in 4Q versus 3Q. And yes, we screened more than a quarter million people more this quarter we did a year ago at this time. Let's say that again. We screened in this quarter more than 250,000 more patients than we did a year ago. So, yes, those are the modeling questions that you had. And then Kevin, maybe you wanna take the CancerGuard question.
Kevin T. Conroy: Yeah, I think it's a good question, Subbu. As I've been out talking with our field reps, one of the things they're acutely aware of is which offices in their territories have patients that would be willing to pay for a CancerGuard test. And so that will become an important part of our Salesforce's conversations. It will get them more access. We believe we're seeing that happen already. You're bringing up a good point. It's not easy to in the US health system, to get people to pay out of pocket for a novel technology, but something as important as a multi-cancer screening test, we believe we will see uptake here. It will take some time just like Cologuard did.
We're pleased here in the early month or two the early days of this launch, and we think that a significant advantage will not only be our frontline sales, reps, but also the relationships that we have with health systems. We're trusted because they trust us with the quality of the tests that we develop and bring to them. The ability to electronically order and get resulted for a test, our customer service. They know that they can call us anytime day or night and get an answer that is needed. So all of this ecosystem, our human capability, our systems capabilities, are important.
Another part of our company that is important is, do you remember back when we acquired Genomic Health, one of the three things we said that was important that we loved about Genomic Health was their international reach. Cologuard has much broader applicability outside the US than even inside the US, which is pretty significant in the US. And the team just we just got back from our international headquarters where the team laid out their plans for launching Cologuard around the world. They're revving up their teams to be able to deliver this, and we're excited about that. That aspect of the platform, the Exact Sciences platform as well.
Operator: The next question comes from Mark Massaro with BTIG. Your line is open.
Mark Massaro: Hey guys. Congrats on the strong 22% growth in screening this quarter. But I wanted to ask about the OncoDetect MRD test. You know, I appreciate the commentary about the meaningful lift in breast cancer and the encouraging utilization in CRC. Kevin, I'm just curious, do you think that OncoDetect could become at least a material contributor to your Precision Oncology business in 2026? You did put up double-digit or 12% growth in PO. I'm just trying to figure out how much of that strong growth this quarter came from OncoXtra versus OncoDetect? And any thoughts about '26? Thank you.
Kevin T. Conroy: Mark, it's too early really to give much color in terms of 2026. And as we said, OncoDetect is not material to this year's revenue, but over the long haul, and we really tried to spend core to who we are thinking about the long term when we develop Cologuard when developed Genomic Health developed Oncotype. Those were long-term investments that over time you're able to win because you do things the right way. And I'm proud that the team is doing things the right way in terms of gaining the evidence needed to then go to the customers, show them that evidence, can convince them that our test is the best test for their patient.
And so we love what we're seeing so far, and we expect to be able to demonstrate that quantitatively in the future.
Aaron Bloomer: And then just in terms of the then within the third quarter, and obviously, we are really pleased with what the PO team delivered in the third quarter as well. Double-digit growth in our precision oncology business. That didn't come from OncoDetect. As Kevin said, it's still early days. But it does speak to the strength of Oncotype DX. And so Oncotype DX continues to expand and penetrate in international markets, and we also saw a nice uptick in volume in Oncotype DX in the US as well.
Operator: The next question comes from Luke England Sergott with Barclays. Your line is open.
Luke England Sergott: Great. Thanks for the questions here. Just quick cleanup on the FRENUM simple screen with the FDA jumped on here a little don't know if you guys gave an update of when you expect the FDA to kind of give you any feedback there or any type of feedback you've gotten and types of updates you guys need to do. And then I guess more longer term as you think about the launch of that, of SimpleScreen within that market.
I mean, you guys have a massive CRC screening database and know, for whatever reason or not, whether it's, you know, a failed or Cologuard test or just shipping tests out realizing patients don't want to do that, that seems like a pretty low hanging fruit to me as you kind of launch and think about commercializing this test and you use that also as you think about MCED going forward too?
Kevin T. Conroy: Thanks, Luke. Yes, to that last question. Yes, our relationship with well, with over 30 million patients, and more than 250,000 primary care physicians and then oncologists and beyond. You have GIs and OBGYNs. We're a source of trust in terms of our CRC blood test. That we plan to bring to clinicians and to patients. We have the ability to meet what the NCCN and who else was it? ASGE, Jed? Recommended in terms of the blood tests are not as effective as Cologuard, Cologuard Plus or colonoscopy. They're just not. But the right test for the right patient at the right time.
Somebody who doesn't get screened at all for colon cancer we know who ten million of those people are because we've sent them a Cologuard kit and they haven't returned it. Now that's over eleven years and over time that base of customers build. We're able to work hand in glove with health systems to identify patients who would be appropriate for a blood test if that patient comes into the office. They've tried to get a colonoscopy order. They have tried to get a Cologuard test. Now how about a blood test? We are in a unique position there to help that patient get screened and nothing is more important than getting patients screened.
Operator: The next question comes from Kyle Mikson with Canaccord. Your line is open.
Kyle Mikson: Hey, guys. Thanks for the questions. Congrats on the quarter. So on the CRC blood partnership, just a couple on that. So on the data that's I guess, due early next year, is that the V2 data that will ultimately trigger the $100 million opt-in payment upon a favorable or is that data set related to that payment coming later the year, later in 2026? And secondly, it's something that's kind of come up in, like, my conversations, for example, is how do you prevent the partner from gaining access to your accounts in certain scenarios, such as to the partner if the provider opts in for the FBM said version and the ownership of the customer kind of switches?
Thanks.
Kevin T. Conroy: So in terms of the free known V2 data, let's be clear about this. There is data that is kind of concept data. And then there is a pivotal study that is that will be underway. The initial data is the data that will be forthcoming sometime in the next few months. The pivotal data is data that would come next year. And we don't know exactly when that data would come next year, but it's the pivotal data that is will be used to submit to the FDA, and that's the important thing. In terms of FDA approval, that will be on the v one data, which was submitted in August, and it takes about a year.
In terms of any confusion about whose who gets the credit for CRC screening. We have the exclusive right to market CRC screening test. And FRENOM intends to launch a lung screening test and eventually a multi-cancer screening test, but the CRC blood screening test is ours exclusively to market.
Operator: This concludes the question and answer session. I'll turn the call to Kevin T. Conroy for closing remarks.
Kevin T. Conroy: Thank you all for joining today and to the Exact Sciences dedicated team for their commitment to deliver on our mission of eradicating cancer. Thank you.
Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.