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Date

Thursday, May 7, 2026 at 4:30 p.m. ET

Call participants

  • Founder, Chairman, and CEO — David Halbert
  • President — David Spetzler
  • Vice Chairman and Executive Vice President — Brian Brille
  • Chief Commercial Officer — Bobby Hill
  • Chief Financial Officer — Luke Power

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Takeaways

  • Total revenue -- $216 million, increasing 79% year over year, primarily driven by clinical molecular profiling services.
  • Molecular profiling revenue -- $211 million, growing 85% year over year, outpacing total revenue growth.
  • Clinical case volumes -- 52,800 cases completed, rising 15% year over year, with an exit run rate of approximately 56,000 cases per quarter by March.
  • Clinical ASP -- Average selling price increased 61% year over year, led by MyCancerSEQ adoption; tissue ASP rose 70% to above $4,300, and blood ASP grew 14% to just under $2,500.
  • Case mix -- Approximately 43,600 tissue cases and 9,200 Caris Assure blood tests comprised the 52,800 total therapy selection cases.
  • Caris Assure volume growth -- Volume increased 58% year over year and rose 7% sequentially from Q4 2025.
  • Gross margin -- 65% on a GAAP basis, up from 47% the prior year, with over 1,800 basis points of improvement.
  • Adjusted EBITDA -- $26 million for the quarter, sustaining four consecutive quarters of positive results.
  • Free cash flow -- $22.5 million, resulting in cash on hand of slightly above $825 million after a quarterly increase of $23.4 million.
  • Refinancing activity -- Closed a new $400 million debt facility led by Blue Owl and Blackstone, lowering annual interest by $6 million, extending maturity to April 2031, and adding a $300 million delayed-draw term loan for potential acquisitions.
  • Sales force expansion -- Sales territories increased from 82 to 146, headcount reached over 270, with a target of approximately 300 in Q2 and enhanced training programs in place.
  • Electronic ordering -- Over 70% of orders submitted electronically, with 3,000 physicians using EMR integrations.
  • Product launches -- Launched Caris ChromaSeq (whole-genome heme therapy selection at a $3,228 MolDX rate) and Caris MI Clarity (AI-only digital pathology for breast cancer recurrence risk).
  • Precision Oncology Alliance -- Surpassed 100 members, highlighted by the addition of UC San Francisco.
  • Caris Detect ACHIEVE-1 data -- Reported 60.3% stage 1 and 2 sensitivity and 99.2% asymptomatic specificity in a 3,014-subject high-risk cohort; readiness for commercial launch with Everlywell in Q2.
  • Pipeline progress -- Beta launch underway for Caris Detect; additional launches and further technical assessments ongoing for MRD tumor-naïve and tumor-informed solutions.
  • Pharma and research revenue -- $5.4 million, down from $6.8 million year over year, with an expectation for revenue timing to improve in Q2 based on contracted deliverables.
  • Payer coverage -- MyCancerSEQ covered lives now exceed 225 million; the assay represented over 75% of tissue volume in Q1.
  • PAMA submission -- Submitted required reimbursement data May 1; management stated "do not expect any downward adjustments" and affirmed CDLT classification for both major assays.
  • Q2 expectations -- Management guided to "over 58,000" completed cases (10% sequential growth), approximately 47,500 tissue and over 10,000 blood cases; planned OpEx rise from $136 million to over $140 million; CapEx of $30 million expected for launch preparations.

Summary

Caris Life Sciences (CAI +3.71%) reported substantial revenue growth and margin expansion, achieving four consecutive quarters of positive adjusted EBITDA and free cash flow. Management executed a major sales force realignment that increased territory coverage and accelerated order activation rates, leading to a higher quarterly case exit velocity for both tissue and blood-based testing. Strategic milestones included the launch of ChromaSeq with confirmed MolDX reimbursement, digital MI Clarity for breast cancer, and the release of pivotal Caris Detect early-stage cancer detection data. Clinical average selling prices increased sharply across both tissue and blood modalities, directly supporting margin gains and profitability. Management reaffirmed guidance for full-year volume and revenue, underpinned by robust Q1 activations, disciplined expense escalations for pipeline launches, and stated plans to leverage financial flexibility provided by a recently refinanced $400 million credit facility with extended maturities and reduced interest costs.

  • The company stated that Q2 will include a doubling of the liquid product specialist team after reporting 135% quarter-over-quarter growth in blood-testing targets within their remit.
  • Leadership reaffirmed flexible capital allocation, highlighting a $300 million delayed-draw term loan for potential acquisitions, but noted there are no gaps in the current portfolio.
  • Caris Detect’s ACHIEVE-1 results, with stage 1 and 2 sensitivity of 60.3% and specificity of 99.2%, used only one of nine potential pillars, implying further potential for future accuracy gains.
  • Payer collections exceeded prior accruals in both MI Profile and Caris Assure, contributing to upside in realized ASP and aggregate revenue.
  • Bobby Hill noted full-quarter activations increased 17% year over year, supporting the projected 10% sequential volume ramp entering Q2.
  • Reported operating expenses of $130 million trended lower than Q4’s $132 million despite ramping investments for new product launches and the annual $30.5 million bonus payment.
  • Guidance reaffirmed tissue growth in the low teens percent and blood growth in the high 50%-60% range for the full year.
  • Both MyCancerSEQ and Caris Assure remain outside the ADLT classification and are instead CDLTs, subject to PAMA’s three-year reporting and pricing cycle; management expects price stability in this framework.
  • Over 1.07 million cumulative profiled cases were reported, encompassing 677,000 whole exomes, 728,000 whole transcriptomes, and 790,000 matched profiles.
  • The ChromaSeq addressable market includes an estimated 50,000 AML, MDS, and MPN patients as per stated MolDX coverage.

Industry glossary

  • MCED (Multi-Cancer Early Detection): Blood-based assay designed to detect multiple cancers at an early stage using molecular profiling and AI analytics.
  • ChromaSeq: Caris Life Sciences’ whole-genome sequencing assay for therapy selection in hematological malignancies.
  • Caris Assure: Caris Life Sciences’ blood-based molecular profiling platform for cancer testing.
  • MolDX: A molecular diagnostics reimbursement program under Medicare that sets coverage and payment rates for advanced diagnostic laboratory tests.
  • MRD (Minimal Residual Disease): Testing approach used to detect small amounts of cancer cells remaining after treatment.
  • PAMA (Protecting Access to Medicare Act): Federal legislation governing clinical lab test reimbursement and pricing adjustments for Medicare.
  • CDLT/ADLT: Clinical Diagnostic Laboratory Test/Advanced Diagnostic Laboratory Test, designations determining CMS reporting and pricing frameworks.
  • MyCancerSEQ: Caris Life Sciences’ proprietary, tissue-based comprehensive profiling assay, now a primary clinical offering.
  • Precision Oncology Alliance: Caris Life Sciences’ network of medical centers collaborating in precision medicine research and clinical advancement.

Full Conference Call Transcript

J. Denton: Thank you. Earlier today, Caris Life Sciences, Inc. released financial results for the quarter ended 03/31/2026. Joining from Caris Life Sciences, Inc. today are David Halbert, our Founder, Chairman and CEO; David Spetzler, our President; Brian Brille, our Vice Chairman and EVP; Bobby Hill, our Chief Commercial Officer; and Luke Power, our CFO. Before we begin, I would like to remind you that during this call, management will make forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. These risks are discussed in our SEC filings, including our Annual Report on Form 10-Ks filed with the SEC.

Except as required by law, Caris Life Sciences, Inc. disclaims any intention or obligation to update or revise financial projections and forward-looking statements, whether because of new information, future events, or otherwise. This call will also include a discussion of non-GAAP financial measures that are adjusted to exclude certain specified items. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is available in the press release Caris Life Sciences, Inc. issued today. A copy of today's presentation materials can be found on our Investor Relations website. I will now turn the call over to Brian.

Brian Brille: Thanks, J., and thank you all for joining our first quarter 2026 earnings call. This is a strong start to the year, and we are pleased to report continued growth, profitability, and cash generation, which will continue to support our investment strategy focused on MCED launch, the broader product pipeline, and commercial platform expansion. As illustrated on Slide 3, our platform continues to expand across technology, scale, and commercial breadth. We are now supporting more than 6,100 ordering oncologists with approximately 70% of orders coming through our EHR and portal channels. In the first quarter, we completed 52,800 cases, up 15% year over year.

We are very excited about the initiatives that our CCO Bobby Hill is driving, and we began to see the benefits of these in February and March. With this clinical activity, our data set has surpassed 1.07 million profiled cases, including more than 677,000 whole exomes, 728,000 whole transcriptomes, and roughly 790,000 matched profiles. We also reached another important milestone with the recent addition of the 100th Precision Oncology Alliance member, UC San Francisco. We have launched two exciting products, Caris ChromaSeq and Caris MI Clarity. ChromaSeq is a therapy selection assay for hematological cancers, which expands the breadth of our offerings and features a cutting-edge whole-genome technology. ChromaSeq was launched on April 1.

In addition, we launched Caris MI Clarity, an exciting prognostic test designed to deliver insight into both early and late distant recurrence risk for breast cancer via digital pathology. Finally, and importantly, we are making progress with Caris Detect multi-cancer early detection, and we are getting ready for commercial launch with Everlywell, with plans to add additional channel partners. Our philosophy is a long-term strategic orientation to develop the best offerings on the market and to pursue this innovation while generating profitable growth and maintaining financial strength. We had a strong first quarter with total revenues increasing 79% year over year to $216 million. As demonstrated on Slide 4, this result was driven primarily by strong performance from clinical profiling.

Molecular profiling services revenues increased to $211 million in the first quarter, representing an increase of 85% year over year. In summary, across the board, we had a very productive first quarter, illustrated by the quarter highlights on Slide 5. This strong revenue performance, combined with the operating leverage inherent in our business model, has produced continued positive financial results while we ramp up investments, including revenue growth of 79%, which was driven by volume growth of 15% and a 61% increase in clinical ASP. This revenue growth has led to improved gross margins of 65% on a GAAP basis, up from 47% in the first quarter last year. We have invested significantly this quarter while maintaining financial discipline.

This approach has produced positive adjusted EBITDA of $26 million as well as positive free cash flow of $22.5 million. This is our fourth straight quarter of positive adjusted EBITDA and positive free cash flow and provides us with valuable strategic flexibility for ongoing investment in our tech platform and for new products, as well as the ability to develop new channels such as MCED. In addition, our balance sheet continues to strengthen with cash on hand growing to slightly above $825 million, an increase of $23.4 million in the quarter. Finally, as a result of this profitability profile, we were able to proactively refinance our credit facility.

The new $400 million debt facility led by Blue Owl and Blackstone offers many advantages: lower costs, saving approximately $6 million in annual interest; an extension of the maturity date, three years, from January 2028 to April 2031; and a committed delayed draw term loan of $300 million on the same terms for any potential strategic acquisition. We believe that our financial performance gives us unique strategic flexibility which supported our investment program in the first quarter. We are continuing to invest in our product pipeline, importantly in our MCED business, which Dr. Spetzler will describe in detail, as well as the expansion plan for our sales organization.

We believe that our commercial channel is highly differentiated and has many strategic edges. Bobby Hill is bringing enhanced discipline and alignment to the overall platform. We are committing new resources to expand the commercial footprint with important hires across the platform, expanding the number of territories covered, and building product-focused sales teams. As stated previously, our strategy is to maintain financial strength through a strong balance sheet and profitability. These financial pillars of strength will allow us to realize our mission of making precision medicine a reality to benefit patients and support physicians. I will now turn the presentation over to Bobby to provide an update on our commercial business and related strategic initiatives. Bobby?

Bobby Hill: Thanks, Brian. I will provide a brief update on our molecular profiling business along with our progress on the initiatives for the commercial teams in 2026. On Slide 6, this shows our strong molecular profiling revenue performance for the quarter, with revenues increasing 85% to $211 million. This revenue growth was driven by a 15% year-over-year growth in clinical case volumes to approximately 52,800 profiles and a 61% increase in ASP for our comprehensive profiling tests, reflecting our market access and billing teams’ continued excellent execution. We continue to see the benefits of ASP driven by our successful launch of MyCancerSEQ last year, and these benefits are reflected on the slide.

Our tissue ASP increased by 70% to over $4,300, and our blood ASP increased by 14% to just under $2,500, driven by improved payment for Caris Assure. Luke will discuss the breakdown of this further during the financial update. Moving on to Slide 7, I will spend a minute on the commercial changes we made at the beginning of the quarter and why we feel good about the trajectory coming out of the quarter. We completed the realignment of the sales teams in January 2026. That included expanding our territory structure from 82 to 146 territories and continuing to build out the field organization.

We made those changes deliberately to improve coverage, sharpen accountability, and create a stronger footprint for execution across both MyCancerSEQ and Caris Assure, along with setting us up well for product launches. January was a transition month, as expected, given the scale of the realignment and expansion. Following the realignment, activations in February and March grew approximately 20% year over year compared with the same two-month period last year, and full-quarter activations increased 17% year over year. That reinforces our confidence in the underlying demand trajectory and, based on the completion cadence in February and March, supports a quarterly exit run rate of roughly 56,000 completed cases.

For Q1 overall, we completed approximately 52,800 therapy selection cases, up 15% year over year, including approximately 43,600 tissue cases and approximately 9,200 Caris Assure cases. The key point is that demand accelerated as the quarter progressed due to the great work of the sales team, while completed case recognition reflected normal timing between activation and completion. Beyond overall volume, the broader commercial engine continued to perform well. Caris Assure volume grew 58% year over year. More than 70% of orders were submitted electronically. Over 3,000 physicians are using EMR integrations. And we ended the quarter with more than 270 sales representatives toward our 300-person goal.

So overall, we feel very good about how the team has performed with the initiatives, and I will now turn it over to Dr. Spetzler to continue with our progress on our product pipeline, in particular around Caris Detect.

David Spetzler: Thanks, Bobby. I wanted to start with an important milestone for the quarter for Caris Life Sciences, Inc., which is the final readout for ACHIEVE-1 for Caris Detect, described on Slide 8. At a high level, these data points serve as our CLIA validation clinical accuracy study and reinforce our conviction that our whole-genome sequencing approach to early detection is fundamentally differentiated. In the ACHIEVE-1 data, Caris Detect delivered a 60.3% stage 1 and stage 2 sensitivity with a 99.2% asymptomatic specificity across a 3,014-subject high-risk cohort. This is a meaningful result in early detection, particularly when you consider both the size of the evaluable cohorts and the complexity of the underlying biology we are trying to detect.

What gives us confidence in these results is not just the top-line numbers, but the platform underneath them. Caris Detect is built on the foundation of Caris molecular profiling data, which now includes more than 1 million processed cases and over 50 billion molecular markers. That breadth and depth of data matters. It is what allows our AI models to identify difficult-to-detect biological signals associated with early-stage cancer with a level of resolution that we believe is differentiated in the field.

When you look at performance by stage, the pattern is exactly what you would see in a high-performing assay: sensitivity increases consistently with stage—56.8% in stage 1, 67.7% in stage 2, 79% in stage 3, and 98.6% in stage 4. We also reported 96% benign tumor and high-risk patient specificity alongside the 99.2% asymptomatic specificity results. We split the population of patients without cancer into two different groups because a false positive in a patient with a benign tumor or precancerous lesion should have a very different implication than a false positive in a healthy person. Taken together, those data show a strong balance between sensitivity and specificity across clinically relevant populations.

Importantly, the cancer type readouts were also encouraging, and in the total stage 1 and 2 data sets, we saw sensitivity of 53.7% in breast, 74.1% in prostate, 73.4% in lung, 60.6% in uterus, 61.8% in bowel, 81.3% in head and neck, and 70% in pancreatic cancer. And maybe the most important strategic point on this slide is that these results were generated using only one of nine potential pillars. In other words, we believe there is still room to improve from here, as additional pillars may further strengthen overall performance over time. We have been doing a beta launch the last few weeks, and still anticipate commercial launch later in Q2 with Everlywell.

Moving to Slide 9, this also reflects the status of our robust pipeline, and I will touch on these before letting Luke wrap up with the financials. First, as Brian mentioned, Caris ChromaSeq is now launched with MolDX coverage. This is a whole-genome heme therapy selection solution designed for AML, MDS, MPN, and suspected myeloid malignancies. The assay is differentiated by greater than 200x depth of coverage across the whole genome, the ability to detect the full range of clinically relevant genomic alterations, and approximately 1.6 billion reads per patient. Second, we have also launched the digital AI-only version of Caris MI Clarity.

Caris MI Clarity is designed for postmenopausal patients with HR-positive, HER2-negative, node-negative early-stage breast cancer at the time of diagnosis. We see this as an important extension of our platform into recurrence risk assessment designed to support better decision-making and reduce unnecessary therapy. Third, in MRD tumor-naïve, we continue to focus on colorectal cancer. This solution uses the Caris Assure platform in a tumor-naïve design and is intended to support minimal residual disease detection from a whole-blood sample. We are currently compiling additional data for the MolDX technical assessment. And fourth, in MRD tumor-informed, development and launch planning have made progress. This is a pan-tumor opportunity intended for stage 1, 2, and 3 disease.

It uses tumor-normal whole-genome sequencing to identify trackers, with a proprietary approach designed to minimize false negatives and maximize tracker counts to achieve ultra-low sensitivity. Finally, before wrapping up, I also want to provide an update on Caris Assure. We recently completed our submission to New York State, and we will provide an update to everyone once we hear back on that submission. We have had a very productive few months so far in 2026 with the newly launched solutions and are continuing to generate additional data and multiple avenues to extend the same molecular and AI foundation across therapy selection, recurrence risk, early detection, and MRD. With that, I will turn it over to Luke for the financial update.

Luke Power: Thanks, David. Turning to Slide 10, we delivered another strong quarter financially with total revenue of $216 million, up 79% year over year. The main driver remained molecular profiling, which grew 85% versus Q1 of last year, and that was on continued ASP improvement and volume growth. Therapy selection completed volume was up 15% in the quarter, and as Bobby discussed, we were very pleased with how we exited the quarter.

While completed cases came in modestly below our initial expectations due to timing, as discussed, activations improved sequentially for the quarter for both tissue and blood following the January realignment, and that stronger case intake we saw exiting the quarter gives us great confidence in Q2 and the balance of the year. Turning to Pharma and Research revenue, this was $5.4 million versus Q1 2025 revenue of $6.8 million and was due to the deliverable movement of our Discovery and Data businesses under contract, which will flow through over the balance of the year and is supported by improved contract activity.

Overall, our revenue continued to translate into a strong bottom line: positive adjusted EBITDA and positive free cash flow for the fourth consecutive quarter, reflecting the disciplined approach we continue to take as we invest in the business. As I stated on the last earnings call, we intend to utilize this financial strength to fund the pipeline and commercial investments throughout 2026, and you can start to see that in the numbers.

Operating expenses were $130 million in Q1, up from $132 million in Q4, as we continue to prepare for pipeline launches, including early detection, and purchases of property and equipment for just over $10 million, up from $5.1 million in Q4, while still delivering positive adjusted EBITDA of $26 million in the quarter and positive free cash flow of $23 million in the quarter, which also included our annual bonus payments of $30.5 million. Turning to Slide 11, Q1 continued to validate the strength of our molecular profiling business, with molecular profiling revenue being $211 million in the quarter, up 85% versus Q1 of last year.

Reported revenue and ASP continued to benefit from favorable collections across both MI Profile and Caris Assure. As the chart on the right shows, we have seen a meaningful buildup in the underlying revenue base over the last seven quarters, with additional upside where collections have exceeded prior accrual assumptions as we continue to have collection success from the excellent work by our billing and market access teams. At the assay level, MI Profile base ASP was $4,091 in Q1, and Caris Assure base ASP was $4,121, showing the benefit from payer contracting in progress and stronger collection experience.

With regards to our ASP, I also want to spend a minute on reimbursement framework because there has been a little confusion on this point recently. For us, both assays are CDLTs and not ADLTs. That means these are reported under PAMA, and the 2026 PAMA reporting window runs from May 1 through July 31, based on data from 01/01/2025 through 06/30/2025, with any related fee schedule update becoming effective 01/01/2027. As an update, we submitted our PAMA data on May 1 and do not expect any downward adjustments from that. We also continue to support the broader CRUSH efforts and do not view that as changing our underlying reimbursement position.

Turning to Slide 12, this highlights the key commercial and reimbursement tailwinds supporting the business in Q1, and that is demonstrated by our approach of always focusing on the technology first. Starting with MI Profile, we continue to benefit from MyCancerSEQ and the steady improvement we have seen through 2025 into 2026. That progress has been supported by our contracting and payer collection experience, as demonstrated on the previous slide. At this point, we are above 225 million covered lives for MyCancerSEQ, which we expect to continue to increase throughout the course of this year, and the assay represented more than 75% of our tissue volume in Q1.

As touched on before, we also delivered about 9% completed volume growth in MI Profile in the quarter compared to 2025, including a record February and March period following the sales realignment that also drove stronger sequential activations versus Q4, achieved through the great work done by our sales team following the realignment. On the Caris Assure side, this came in line with our expectations, with Assure’s volume growing 58% year over year. Importantly, volume also increased 7% sequentially. We continue to see traction in blood as we grow our penetration there with a differentiated solution.

This continued leverage resulted in molecular profiling services gross margin being 65% in Q1 compared with 47% in Q1 of last year, which is an improvement of over 1,800 basis points year over year. Finally, moving to guidance on Slide 13, you can see we are reaffirming our guide from February, and I will address two key components on this prior to opening up the call to questions. Starting with volume, based on the February and March trends, we remain confident in the full-year volume framework. We continue to expect tissue growth in the low teens and blood growth in the high 50s to low 60s.

The stronger activation trend exiting Q1 supports our guide view, and that timing gap between activations and completed cases should normalize as we move into Q2 and throughout the year with the realignment completed. With respect to the pipeline, we have launched Caris ChromaSeq, which was approved by MolDX and priced at $3,228, and also MI Clarity. After Q2, we will evaluate and incorporate the contribution from those launches along with any incremental impact from our continued sales strategies and commercial expansions.

On revenue, while Q1 performance points us towards the higher end of the range with a beat on our expectations for the quarter, we are reconfirming guidance today and will evaluate after Q2 with the additional history of the new launches and the continued execution. I will stop there and turn it back over to the operator for questions. Operator?

Operator: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please standby as we compile the Q&A roster. Our first question comes from the line of Michael Ryskin of Bank of America. Your line is now open.

Michael Ryskin: Hi. This is Alexa Chan on for Mike. Thank you so much for taking our questions. I just have a couple here. Maybe to start, can you talk about the impact that the sales realignment might have had on tissue volumes this quarter? And then as a follow-up, can you discuss your confidence in achieving the 20% volume growth target for the year given the softer start? We appreciate that the sales force is realigned and that trends improved in February and March, but it still appears to require a significant ramp from here. Thank you.

Bobby Hill: Yes. As anytime when you realign a sales organization and put them into new territories, we saw a little bit slower start at the very beginning of the year. The beginning of the year sometimes is slower; that is why we chose to do it then. But what we saw with tissue volume each month after that and what we are trending at gives us confidence.

Luke Power: One of the reasons why we also disclosed the exit rate on the completions for February and March is that it gives us additional confidence. Based on those numbers, we have improved dramatically on the tissue front from where we were running on a monthly rate last year, with over 15,500 on average from February and March. We believe that continued trend is going to benefit us as we go into Q2, and we feel good about the low-teens guidance.

Operator: Thank you. Our next question comes from the line of an analyst at TD Cowen. Your line is now open.

Analyst: First question is just on the clinical volumes in the first quarter. Did weather hold back the clinical volumes at all? And if so, by how much? And if you could also discuss the traction in blood testing—what has been the strategy impact, and where are you having the most success in types of accounts?

Luke Power: No. The reason why we pointed out that we have gotten the cases in the door is that what we expect to happen—and the reason why we are reaffirming the volume guide—is you will see an improvement in the sequential growth from Q1 to Q2. We were initially expecting about 7% growth sequentially from Q1 to Q2; now that is going to be 10%. Those cases will flow through in the second quarter, and it will be caught up by the end of the second quarter as we progress into the second half of the year.

Bobby Hill: We expanded, before Q1, our liquid product specialist team—a group of individuals that are highly skilled at helping the appropriate patients get blood testing. We saw 135% growth in their targets quarter over quarter, and because of that quarter-over-quarter growth, we will double the size of that team again in Q2. Tissue profiling was our base business, and now we are getting good at selling blood profiling. For the right patients, we will continue to do that and take those learnings to the rest of the sales force.

It is also worth noting that the version of Assure that we submitted to New York State significantly increases the amount of RNA profiling we are doing, going up to about 600 million reads from 5 million reads.

Operator: Thank you. Our next question comes from the line of Vijay Kumar of Evercore. Your line is now open.

Vijay Kumar: Hi, guys. Thank you for taking my question. Maybe one big-picture question. Luke, you brought up the CRUSH initiative. The space has been under pressure, and investors are nervous about reimbursement. At a high level, is there risk to the space on the reimbursement front, and if so, how is Caris Life Sciences, Inc. differentiated from others in the space when it comes to reimbursement?

Luke Power: It is the reason why we wanted to call it out in our script—there has been some confusion. What we have managed to do is a little unique in that we went through the CDLT process. Our codes are CDLT, not ADLT. We feel very good and we submitted our PAMA submission last week based on the timeframe. We do not feel like CRUSH changes that. There are mechanisms in place outside of CRUSH for pricing review, and PAMA is obviously the key one for us. Based on our submission, we feel really good about our price, and we do not expect any downward adjustments from that. We are supportive of CRUSH.

We have been at this a long time, and we firmly believe we are set from a pricing standpoint.

Vijay Kumar: Just to be clear, are you making a distinction between CDLT and ADLT—maybe CDLT having more visibility on pricing if there is any risk to the space?

Luke Power: Yes. How we priced both MyCancerSEQ’s PLA code and Caris Assure’s PLA code did not go through the ADLT pathway. MyCancerSEQ was priced through crosswalk, and Caris Assure through gapfill. Because we did not do ADLT, we are subject to the three-year PAMA cycle that is going through now, and as I said, we put our data into PAMA on May 1 and feel very good about price stability.

Vijay Kumar: That is helpful. And on the guidance comment you made—Q2 up 10%—was that a volume comment or a revenue comment? And if you could clarify, what were true-ups in Q1, what was underlying gross margin ex true-ups, and how should we think about gross margin progression?

Luke Power: Gross margin came in exactly in line with our expectations in the mid-60s. Our focus this year is more on the investment side. As we progress later this year and into next year, we will start focusing more on improving margin. From a true-up standpoint, that was very minimal compared to what we saw last year. We continue to execute and to appeal on the reimbursement front and have success. As we progress throughout 2026, as stated previously, those will get smaller and smaller as we continue to see the uptick in underlying ASP.

Vijay Kumar: Understood. And the 10%—was it volume or revenues?

Luke Power: Volume. The way we are thinking about it is that roughly 2.5% that would have completed in Q1 will flow into Q2. The cases came in the door in Q1 but will be completed in Q2. Our expectation for Q2 is over 58,000 cases, which would be about 10% sequential growth from Q1.

Operator: Thank you. Our next question comes from the line of Subhalaxmi Nambi of Guggenheim. Your line is now open.

Subhalaxmi Nambi: Hi, this is Ricky on for Subbu. Thank you for taking our question. Maybe one for Bobby. You ended the quarter with, I think, over 270 sales reps. Earlier in the year, you said you would increase headcount by 20% to 25%. It sounds like you still have more reps left to hire. Could you give us some color on how that hiring is progressing and also on how the roughly 20 new reps that you have brought on year to date have been ramping up? Thank you.

Bobby Hill: We are progressing right on track. We changed territories and made them smaller, going from 82 to 146 territories, and we will continue to grow that. We have the first wave hired; we are sending them through training; they are already out making calls. We have significantly revamped our training program, and we are excited with that development. We are on track to hit the approximately 300 number and hire them all in Q2, and we feel very good about what the ramp-up and what we have changed.

Operator: Our next question comes from the line of Casey Woodring of JPMorgan. Your line is now open.

Casey Woodring: Hello. This is Martha Zrambat on for Casey. Thank you for taking my question. How should we think about Q2 volumes for tissue and blood? Any color you can share there? And then also on the pharma R&D revenues? And another one would be on the initial MCED test uptake—are you assuming any contribution this year? Thank you.

Luke Power: Our expectation is for a 10% sequential improvement from Q1 to Q2 in volume that would get you above 58,000 cases, which we feel very good about based on what we saw exiting the quarter. For mix, you will see those tissue cases flow into Q2—we would expect to be at approximately 47,500 tissue cases and approaching over the 10,000 mark in blood. We feel very confident about those for Q2. From a revenue standpoint for Q2, our initial guide from February contemplated about 32% growth in total revenue. On contribution from Caris Detect, our plan is still to launch in Q2 and we are progressing nicely.

We will assess and update on expected contribution for the second half of the year at the Q2 earnings call.

Operator: Thank you. Our next question comes from the line of Patrick Donnelly of Citi. Your line is now open.

Patrick Donnelly: Hey. This is Albert Hu on for Patrick here. Thank you for the Q2 color. Just curious on the profitability side for both Q2 and for the year. I think you previously had noted a certain cap for EBITDA profitability and it has been updated to positive. What can you share with us on EBITDA assumptions for Q2 and then for the full year? I know you have some investments—perhaps share what those are as well.

Luke Power: From an EBITDA and free cash flow standpoint, I will repeat what I stated on the last earnings call: we are going to utilize the financial profile we have. We plan to be pretty close to neutral from a free cash flow standpoint in Q2. With the early detection launch, there is going to be an increase in Q2 CapEx—we are expecting about $30 million of property and equipment purchases. That includes the NovaSeq Xs that we are ramping up. We also started to ramp up inventory purchases ahead of the detection launch. You are going to see additional spend from that standpoint.

Our goal in Q2 is to utilize the free cash flow we are generating to fund preparation for the Detect launch along with pushing MI Clarity and Caris ChromaSeq as well. We are not guiding to EBITDA because the key focus is pushing the pipeline through and commercial activities that Bobby is putting in place, along with getting the Detect product launched. For Q2, we have the 32% revenue growth and expect gross margin in the mid-60% range. We will also ramp up our OpEx from about $136 million to over $140 million. That will get you to a small EBITDA, but it is not our primary focus for Q2.

Patrick Donnelly: And just one more—congrats on the pipeline coming out. On the MRD front, you mentioned in the prepared remarks that it is still being prepared for launch. What is the priority for MRD in the pipeline? Are you aiming to launch perhaps late this year or sometime next year?

David Spetzler: Now that we have these other product launches done and behind us, MRD is the next priority. We will be focusing on that quite heavily.

Operator: Thank you. Our next question comes from the line of Mark Massaro of BTIG. Your line is now open.

Mark Massaro: Hey, thank you for taking the question. I wanted to start on a pipeline question. Now that you have MolDX approval for ChromaSeq and it is launched, can you speak to the unmet need? There is a lot of conversation about solid tumor profiling—can you speak to the unmet need in myeloid?

David Spetzler: Today, those patients often get a whole lot of small panel tests using a combination of different technologies. It is not comprehensive, and they often miss things. Those tests are also not designed to pick up resistance components. With our approach, in one fell swoop, we can identify all of the components that allow optimal therapy selection and also identify when that therapy is no longer effective. It is a truly comprehensive approach to hematological malignancies and not the hotspot testing that is being done today.

With the turnaround time the team has been able to achieve and what we are seeing from the launch, this gets patients a complete answer faster than testing with multiple different tests trying to chase down a diagnosis.

Mark Massaro: That is helpful. I know breast cancer is one of the important indications in your early detection initiatives. Can you speak to that disease state relative to others? How should we think about the landscape progressing over time as you think about screening for various cancer types?

David Spetzler: Breast cancer is one of the more common types of cancer. It is already highly screened for, and mammography has its limitations. It is important that we serve that patient population really well. The performance that we have shown in ACHIEVE-1 is already superior to mammography. It is inevitable that older technologies are going to be replaced by future superior technologies, and that is what is happening now.

Operator: Our next question comes from the line of an analyst at Goldman Sachs. Your line is now open.

Analyst: Hi. Thanks for taking my questions. On the quarterly run rate you gave for February and March of 56,000 tests relative to the 52.8 you reported for the quarter, I think you said that was up 20% year over year relative to February and March last year. Can you talk through the split between tissue and blood? And then how durable you think the acceleration in volumes is post the sales force realignment? Was there a level of pent-up demand in the latter half of the quarter? And any update on M&A and capital allocation—are there specific areas or gaps you would look to fill inorganically?

Bobby Hill: The split followed our normal mix when we went from January into February and March. We saw ramp-ups in both products, and we are excited about the quickness of that turnaround. As we look at that volume going into Q2, we still feel very confident that we will achieve the numbers we set forth in guidance, and we expect both products to continue their growth.

Brian Brille: On M&A and capital allocation, there are no gaps—we have been a pioneer through organic growth and building our technology platform. There is nothing in particular that we think we need. On the other hand, we are very strong with respect to our financial profile. Our new debt facility gives us additional flexibility, so we are in a position to be flexible and tactical if we see the need.

Operator: Thank you. Our next question comes from the line of an analyst at Jefferies. Your line is now open.

Analyst: Hey, team. This is Noah on for Tycho. Thanks for taking our questions. I wanted to start by asking about the pharma R&D business. I think it came in a few million dollars light of consensus expectations on revenue. How are you thinking about the commercial investment in that business? Can you speak to orders or backlog performance that justifies maintaining the guide here? And a second question: a competitor had a recent study that went to ODAC for a liquid biopsy-informed drug trial that ODAC voted against. How are you thinking about implications for serialized liquid biopsy testing, and do you have any embedded assumptions for liquid testing tests per patient expanding in the long run?

Luke Power: As we stated on the last earnings call, Q1 and Q3 are typically lower quarters from a pharma standpoint—it is just the natural cadence throughout the year. The reason we are maintaining guidance is that the revenue delta from the Q1 expectation is based on contracts we already have. For example, the Genentech deal that we publicly disclosed has revenue that moved from Q1 and will flow into Q2, and the same with some of our data partners under contract—we will deliver that data in the next quarter or two. We feel good about that and expect Q2 to ramp up, Q3 to come down, and Q4 to ramp up, consistent with prior years.

On ODAC, that was really about one specific mutation, not liquid profiling in general. There is still incredible clinical utility of liquid profiling, so the ESR1-targeted agent not being approved does not impact the broader utility of profiling.

Operator: Thank you. Our final question comes from the line of Kyle Mikson of Canaccord Genuity. Your line is now open.

Kyle Mikson: Hi. This is Oscar Capo on for Kyle. Thank you for taking our questions. Congratulations again on the ChromaSeq approval and launch. What is the MolDX rate you got for this test? And from a dollars-and-cents perspective, what is the addressable market we are looking at? Also, you spoke to the expansion of your Precision Oncology Alliance for which you plan to host your summit on the eve of the ASCO conference. On ASCO, can you elaborate on what types of data you will be presenting for pipeline and recently launched products, including MCED and MRD among others?

Luke Power: The rate is $3,228 from MolDX.

Bobby Hill: From a market standpoint, there are about 50,000 patients that meet the three indications set forth in the MolDX coverage for AML, MDS, and MPN. There are existing medical policies for commercial lines of business, and we believe that when we submit to payers, we will gain coverage because of the depth and performance of our assay. We are already deploying the team to talk to payers, and where we are already contracted with MyCancerSEQ, it gives us the opportunity to add this coverage as well.

David Spetzler: On ASCO, we have a lot of data that we will be presenting. It is embargoed until the conference, so we cannot discuss it now, but there is going to be a lot of it.

Operator: Thank you. This does conclude the Q&A session and the program. I would like to thank you for your participation. You may now disconnect.