GeneDx NASDAQ: WGS reported second-quarter revenue of $114.4 million, above its prior guidance, as exome and genome testing volume reached a quarterly record of more than 30,000 tests. The company also returned to adjusted profitability one quarter earlier than previously expected, while maintaining its full-year 2026 outlook.
Chief Executive Officer Katherine Stueland said demand for the company’s rare-disease genetic testing services “has never been higher,” but emphasized that improving reimbursement remains GeneDx’s largest opportunity. The company is focusing on optimizing unit economics, expanding utilization of exome and genome testing, and delivering products at scale while managing capital.
“We are under-earning on our potential,” Stueland said, adding that GeneDx aims to improve collections as payer coverage expands and internal revenue-cycle processes mature.
Volume Growth Outpaced Revenue Growth
GeneDx resulted 30,785 exome and genome tests during the quarter, a 32% increase from a year earlier. Exome and genome revenue rose 17% to $100.3 million, while total revenue increased 11% year over year.
Chief Financial Officer Kevin Feeley said the difference between volume and revenue growth reflected a larger share of genome testing, which currently has lower contracted reimbursement rates than exome testing. Genome represented 32% of insurance-based outpatient volume in the second quarter, down from nearly 40% in the first quarter but up from 15% in 2025.
The company said it has seen monthly mix gains back toward exome and its reflex offering, under which a test can begin as an exome and be expanded to a genome if additional information is needed. Stueland said approximately 80% of patients with genetic disease can be diagnosed through an exome test, while reflex testing provides a pathway to genome analysis when needed.
Feeley said reflex volume exceeded genome volume on a single-month basis in July for the first time since the product launched in February. GeneDx expects genome mix to hover around 30%, or slightly below that level, during the second half of 2026.
Reimbursement and Coverage Remain Central Focus
GeneDx reported a blended average reimbursement rate of $3,258 per test in the second quarter, roughly flat sequentially and in line with company expectations. Feeley said the company views that level as its reimbursement baseline for the remainder of the year.
The company is targeting improvements through product mix management, broader payer coverage and stronger collection processes. President Mark Gardner, who joined GeneDx in June, said the company is working on four operational levers: managing exome-versus-genome mix, expanding payer coverage, developing payer-specific workflows and investing in technology and artificial intelligence across revenue-cycle operations.
Gardner said payer requirements vary by medical-necessity criteria, documentation and prior-authorization processes. GeneDx is building workflows intended to meet those administrative requirements, improve authorization rates and reduce avoidable denials.
Commercial coverage for genome testing expanded substantially during the quarter. Feeley said approximately 87% of commercial lives now have some level of genome coverage, compared with 47% in the prior quarter. The increase was primarily driven by Carelon, whose policy expanded potential commercial genome coverage to 87% from 47%, according to Stueland.
Commercial coverage for exome testing reached approximately 98% of commercial lives, up from about 90% in the first quarter. On the Medicaid side, 39 states cover exome or genome testing, with Mississippi beginning coverage on July 1.
Despite those coverage gains, Feeley said the company’s outpatient genome collection rate remained about 32% in the second quarter, flat from the first quarter and down from 43% a year earlier. He attributed the decline from last year partly to GeneDx accepting testing volume ahead of payer coverage in order to build clinical evidence and support market development.
GeneDx expects collection rates to remain roughly flat in the third quarter as payer-specific workflows are developed and implemented. The company expects meaningful improvement beginning in the fourth quarter, with the largest benefit from coverage expansion and operational changes anticipated in 2027.
Profitability, Costs and Liquidity
Total company gross margin was 70%, up from 69% in the first quarter. GeneDx posted adjusted net income of $0.4 million, improving by $8.6 million from the prior quarter.
Feeley said gross-margin improvement reflected wet-lab efficiency efforts, increased scale and gains in the company’s dry-lab operations. He added that genome testing currently costs nearly twice as much to produce as exome testing, largely because of higher reagent costs, though GeneDx expects genome costs to decline as utilization grows and technology advances. The company expects cost per test to remain relatively flat in the second half of 2026, followed by step improvements in 2027.
Operating expenses were approximately $80 million, slightly better than expected. GeneDx completed the full $25 million in annual cost actions it previously committed to, according to Feeley.
After the quarter ended, GeneDx expanded its existing debt facility by $50 million and received a concurrent equity investment from Blackstone Life Sciences. The company said the financing increased pro forma liquidity to approximately $188 million as of June 30.
Commercial Expansion and Outlook
GeneDx said its established channels of geneticists, pediatric neurology and neonatal intensive care units continued to drive most unit growth. Gardner said the company maintained approximately 80% market share among geneticists and expanded pediatric neurology market share to 50%.
The company also cited early contributions from general pediatrics and prenatal testing. GeneDx began investing in a general pediatrics commercial team in early 2026 following changes in American Academy of Pediatrics guidelines. Gardner said the channel delivered its highest growth to date in the second quarter, with increased field-representative engagement, new account creation and first orders from new clinicians.
GeneDx is also developing a “one-minute” genome ordering process, which Stueland said is expected to roll out later in the summer with an initial set of features and continued iteration.
The company reaffirmed full-year guidance for revenue of $475 million to $490 million, exome and genome volume growth of at least 30%, exome and genome revenue growth of at least 20%, gross margin of approximately 70%, and full-year profitability.
For the third quarter, GeneDx expects total revenue of $122 million to $124 million, including exome and genome revenue of $110 million to $112 million on approximately 33,200 tests. It forecasts blended average reimbursement of about $3,300 per test, gross margin of approximately 70% and adjusted net income of about $2 million.
About GeneDx (NASDAQ:WGS)
GeneDx is a clinical diagnostics company specializing in comprehensive genetic and genomic testing for rare and inherited disorders. The company offers a broad portfolio of assays, including targeted gene panels, whole exome sequencing, whole genome sequencing and chromosomal microarray analysis. GeneDx's laboratory services support the diagnosis of a wide range of conditions—from rare pediatric diseases and hereditary cancer syndromes to neuromuscular and metabolic disorders—by providing clinicians with detailed variant interpretation and reporting.
Founded in 2000 and based in Gaithersburg, Maryland, GeneDx was established with the aim of accelerating the translation of genomic discoveries into clinical care.
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