$WGS

Second quarter results were outstanding across all key metrics. The issue of sequential decline in test volumes seen in Q1 has been resolved, and sequential growth has resumed. The core business fundamentals remain strong, and Q2 results confirm this. GeneDx generated $102.7 million in revenue in Q2, surpassing the $85.6 million estimate. The Whole Exome and Genome (WEG) segment revenue grew 69% year over year. Non-GAAP EPS came in at $0.50, beating the $0.11 consensus estimate. Full-year 2025 revenue guidance was raised by more than 10%, from $360–375 million to $400–415 million.

Improved Pricing and Reimbursement Rates
Revenue growth was driven by both WEG test volume growth and higher average selling prices (ASP). The company continued efforts to reduce denial rates, which improved from 47% to 45%. This enabled a 32% year-over-year increase in per-test reimbursement to $3,718. Most denials stem from administrative and procedural errors, coding issues, and delays in insurance systems, all of which directly impact revenue. Denial rates may improve further in H2, although newly launched services may face initially higher rejection rates, potentially slowing this trend in the short term. ASP gains were also supported by greater recognition of WEG test value by commercial and Medicaid payers. GeneDx’s rapid turnaround service and new indications also contributed to ASP improvement due to their higher pricing.
Sequential Test Volume Growth Has Returned
In Q2, WEG test volume grew 28% year over year and 12% sequentially, alleviating concerns from the 1% sequential decline in Q1. The company reaffirmed its target of at least 30% WEG volume growth for 2025. Test volume grew just over 26% in the first half. To hit the full-year 30% target, volumes will need to grow 33% in the second half. Given the seasonally stronger second half, this appears quite achievable. In addition to momentum in its core pediatric neurology business, GeneDx’s expanded service offerings will drive incremental growth in H2. These include expanded indications such as cerebral palsy, NICU opportunities, and broader pediatric testing following the AAP guidelines.

Integration with the widely used Epic EHR system is progressing on schedule and gaining momentum. After three hospital groups went live in H1, that number is expected to increase to 12 in H2. This will create critical mass to support several thousand NICU tests per year by Q4. The company also continues expanding Medicaid coverage for both outpatient and inpatient testing across new states. GeneDx continues to differentiate itself through the scale and effectiveness of its rare disease data set. Its interpretation-as-a-service initiative may open a path to high-margin, scalable growth, including international expansion. The company is well positioned in a growing market that values speed, quality, and depth of data.