Castle Biosciences NASDAQ: CSTL reported second-quarter 2026 revenue of $103.5 million, up 20% from the prior-year period, as growth in its TissueCypher test and other core offerings supported results. The company raised its full-year revenue outlook to $365 million to $375 million, from a previous range of $345 million to $355 million.
Founder, President and Chief Executive Officer Derek Maetzold said revenue growth excluding DecisionDx-SCC and IDgenetix was 40% year over year, while test report volume for the company’s core revenue drivers increased 32%.
“Our strong second quarter results reflect the continued execution of our growth strategy,” Maetzold said, citing investments in commercial resources, clinical evidence development, pipeline programs and laboratory capacity.
TissueCypher Drives Test Volume Growth
TissueCypher, Castle’s test for patients with Barrett’s esophagus, generated 14,988 test reports during the quarter, representing 63% growth from the second quarter of 2025. Management said it now expects full-year 2026 TissueCypher report volume growth of approximately 50% to 52% compared with 2025.
Chief Financial Officer Frank Stokes said revenue also benefited from some improvement in average selling price, partly reflecting changes to the company’s accrual processes implemented earlier in the year. However, he said investors should not expect another comparable step-up in pricing during the second half.
Stokes said the company views TissueCypher’s performance on a multi-quarter trend rather than quarter-to-quarter changes. The company reported lower upper-endoscopy procedure levels during the first quarter, while it expects procedure volumes may have increased in the second quarter.
Castle said it has approximately 100 sales representatives or territories across its gastroenterology and dermatology divisions. Maetzold said the company believes its commercial infrastructure is near the level needed to support TissueCypher and dermatology opportunities, although the company added representatives last year and again late in the second quarter.
During the call, Stokes said TissueCypher had reached an estimated 10% to 12% penetration of its addressable patient market exiting 2025 and could reach the mid-teens based on figures provided with the quarterly results. He said there remains substantial opportunity to educate physicians who have not yet been introduced to the test’s clinical use.
Melanoma Volumes Rise Modestly; Evidence Development Continues
DecisionDx-Melanoma delivered 10,280 test reports during the second quarter, up 3% from a year earlier and approximately 3% sequentially. Castle reiterated its expectation for mid- to high-single-digit volume growth for the full year.
Maetzold said sequential growth was below the company’s typical seasonal pattern, in part because the dermatology commercial team has adapted customer calls to support three products: DecisionDx-Melanoma, DecisionDx-SCC and AdvanceAD-Tx.
The company announced during the quarter that a prospective multicenter study found DecisionDx-Melanoma outperformed the Melanoma Institute Australia Nomogram in identifying patients at low and high risk of sentinel lymph node biopsy positivity. According to Maetzold, patients identified by the test as having a less than 5% predicted risk had an observed positivity rate of 2.6%, below the National Comprehensive Cancer Network’s 5% threshold for considering avoidance of the surgical procedure.
Castle also reported a pickup in DecisionDx-SCC volumes. Maetzold attributed the improvement to clinical value recognized by existing customers, more working days in the second quarter and a limited return of sales-force promotional attention to the test.
Regarding potential Medicare coverage for DecisionDx-SCC, Maetzold said the company had not provided public commentary on discussions with Medicare contractors and noted there is no defined timetable for reconsideration requests. He said Castle modeled a potential draft coverage decision in the second half of 2026, which, if positive, could be followed by regained coverage roughly a year later.
AdvanceAD-Tx Launch Progresses
Castle said it received more than 1,000 AdvanceAD-Tx orders in the second quarter. The test is designed to guide systemic treatment selection for patients age 12 and older with moderate-to-severe atopic dermatitis.
The company highlighted AdvanceAD-Tx receiving a Genomics Innovation Award in the MedTech Breakthrough Awards program. It also cited an independent real-world clinical utility study presented in June, in which 54.3% of patients receiving baseline systemic therapy were initially on treatment aligned with their molecular profile. Following AdvanceAD-Tx testing, 97.8% of patients were initiated on molecularly concordant systemic therapy, according to the company.
Maetzold said Castle is seeing both new ordering clinicians and repeat users of AdvanceAD-Tx, with few clinicians appearing to be “one and done” users. The company is managing the rollout through its dermatology commercial organization, which remains primarily focused on melanoma. Management said approximately 80% to 85% of field-force call focus, commissions and bonus structure remains tied to melanoma, with the remainder weighted toward atopic dermatitis and SCC.
Castle is also awaiting the Centers for Medicare & Medicaid Services’ preliminary 2026 Clinical Laboratory Fee Schedule rates following a panel’s unanimous recommendation to crosswalk AdvanceAD-Tx to an existing psoriasis drug-response test code. Maetzold said the recommended rate of $36.75 was “a very, very strong rate” for the test. He said preliminary draft rates are expected in late September.
Margins, Expenses and Cash Position
Second-quarter gross margin was 74.9%, compared with 77.3% a year earlier. Adjusted gross margin, excluding acquisition-related intangible amortization and certain prior-period revenue adjustments, was 76.3%, down from 79.5% in the prior-year quarter. Castle maintained its expectation for adjusted gross margin in the low- to mid-70% range for the full year.
Total operating expenses, including cost of sales, rose to $106.6 million from $90.4 million a year earlier. The increase reflected higher personnel costs, laboratory supplies and services, commercial travel and administration expenses, as well as increased clinical trial, advisory board and travel costs for pipeline initiatives.
- Sales and marketing expense increased to $40.9 million from $35.1 million.
- General and administrative expense increased to $25.2 million from $22.9 million.
- Research and development expense increased to $14.5 million from $12.8 million.
- Cost of sales rose to $23.7 million from $17.6 million.
Castle reported a net loss of $2.1 million, or $0.07 per diluted share, compared with net income of $4.5 million, or $0.15 per diluted share, in the second quarter of 2025. Adjusted EBITDA increased to $12.4 million from $10.4 million.
The company said it expects positive adjusted EBITDA in the third and fourth quarters and for full-year 2026, as well as for full-year 2027 absent a strategic change in direction. As of June 30, Castle had $266.8 million in cash equivalents and marketable investment securities.
About Castle Biosciences (NASDAQ:CSTL)
Castle Biosciences, Inc is a molecular diagnostics company specializing in the development and commercialization of prognostic and diagnostic tests for patients with dermatologic conditions. The company's proprietary portfolio of genomic assays is designed to improve risk assessment and guide clinical decision-making for individuals with skin cancers and other skin-related diseases. By combining genomic data with advanced statistical algorithms, Castle Biosciences seeks to provide actionable insights that help physicians tailor treatment plans and monitoring strategies.
The company's flagship test, DecisionDx-Melanoma, evaluates the probability of metastasis in patients diagnosed with cutaneous melanoma, supporting more personalized surveillance and therapeutic approaches.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Castle Biosciences, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Castle Biosciences wasn't on the list.
While Castle Biosciences currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Nuclear energy is entering a new growth cycle as rising power demand, expanding data centers, and renewed policy support bring the sector back into focus. After strong gains in recent years, the most impactful phase of nuclear investment may still be ahead.
This report highlights seven nuclear energy stocks positioned across the value chain—combining near-term revenue with long-term upside as next-generation technologies scale. Click the link below to unlock the full list.
Get This Free Report
