What GRAIL (GRAL) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue rose 4% to $37.5 million, while the net loss widened 16% to $103.6 million. Galleri test volume increased 24% to more than 56,000, but promotional pricing lowered the average selling price to about $660 and reduced adjusted gross margin to 42% from 55%.
• GRAIL expects an FDA decision on Galleri by early Q1 2027, following a favorable advisory committee vote; the vote was not final approval. The company said approval could support broader reimbursement efforts, though executives expect reimbursement or guideline inclusion to have a bigger effect on growth.
• GRAIL cited study results showing more cancers detected through screening, including a reduction in Stage 4 diagnoses in the NHS-Galleri trial, while noting the trial did not reduce combined Stage 3 and Stage 4 cancers. The company maintained its 2026 cash-burn guidance of no more than $300 million and said its $788.7 million cash balance provides runway into 2029.

GRAIL NASDAQ: GRAL reported 4% revenue growth for the third quarter of 2026 as higher testing volumes were offset in part by lower prices, and said it expects a U.S. regulatory decision on its Galleri cancer screening test by early in the first quarter of 2027.

The company reported revenue of $37.5 million, up from the year-earlier period, while its net loss widened 16% to $103.6 million. GRAIL updated its full-year Galleri sales revenue growth guidance to 17% to 21%, citing lower average selling prices as it uses promotional pricing to encourage testing.

Chief Executive Officer Josh Ofman said an FDA advisory committee’s favorable vote in September and the publication of two large clinical studies were significant milestones. The committee vote is not a final approval, and the company said it remains in discussions with the agency.

FDA Decision and Clinical Evidence

GRAIL submitted its premarket approval application for Galleri in January. The FDA advisory committee considered the test for early detection of multiple types of cancer in adults age 50 and older.

Chief Scientific Officer Sir Harpal Kumar said the company was in active discussions with the FDA about the test’s label but had not received a specific decision date. He said GRAIL anticipated that the intended use would align with the data submitted in its application and that it would be able to report results for any cancer type detected.

Ofman said the company had not received follow-up questions from the FDA about documented shared decision-making, an issue raised by some advisory committee panelists.

Results from the NHS-Galleri and PATHFINDER 2 studies were published in The New England Journal of Medicine and Nature Medicine, respectively, in September. Ofman said the NHS-Galleri trial did not show a combined reduction in Stage 3 and Stage 4 cancers, but did show a reduction in Stage 4 diagnoses.

He said the studies showed a 4- to 6.5-fold increase in cancer detection through screening, with almost half of those cancers identified at Stage 1 or 2. He also cited a 20% reduction in Stage 4 incidence among a prespecified group of 12 deadly cancers and a 25% reduction in emergency room cancer diagnoses.

Pricing Promotion Weighs on Margins

Third-quarter screening revenue rose 14% to $37.3 million as test volume increased 24% to more than 56,000. For the first nine months of 2026, GRAIL completed more than 174,000 tests, up 36% from a year earlier.

Chief Financial Officer Aaron Freidin said the company began a pricing promotion in September after softer growth in the first two months of the quarter. The average selling price fell to approximately $660 per test in the third quarter. Freidin said GRAIL is prioritizing growth and market penetration over short-term margin optimization.

Adjusted gross margin fell to 42% from 55% a year earlier, reflecting higher allocated overhead costs associated with changes in sample mix, lower development services revenue and a lower average selling price. Adjusted EBITDA was negative $92.6 million, compared with a loss of $71.7 million a year earlier.

GRAIL maintained its 2026 cash burn guidance of no more than $300 million. It ended the quarter with $788.7 million in cash, which Freidin said provides runway into 2029.

Freidin also said a suspended legacy royalty to Illumina is scheduled to resume in late December. The royalty would have amounted to $2.6 million in the third quarter had it not been suspended, he said. GRAIL continues to expect adjusted gross margins of 50% to 60% at scale, including the royalty.

Commercial Expansion and Reimbursement

Ofman said third-quarter growth was tempered by seasonality, competition and negative headlines about the NHS-Galleri results. The company expanded its sales force from 90 to 120 people in June and has increased direct-to-consumer advertising.

Chief Growth Officer Andy Partridge said GRAIL met its third-quarter volume goals in its clinic and health system channel, its largest business. He said the advisory committee meeting and pricing promotion helped activate new prescribers and bring back some who had stopped ordering.

GRAIL also completed its first Epic integration at the end of the quarter, with more health systems lined up for integration through the end of 2026 and into 2027, Partridge said.

Executives said potential FDA approval would support efforts to differentiate Galleri and expand reimbursement. Ofman said GRAIL plans to engage the Centers for Medicare & Medicaid Services to open a national coverage analysis after an approval. Freidin cautioned that approval alone would likely produce a smaller growth inflection than reimbursement or inclusion in clinical guidelines.

Internationally, Kumar said Galleri already has a UKCA regulatory mark. GRAIL has submitted for European IVDR approval and hopes for a decision in 2027. Discussions with the U.K.’s National Health Service are ongoing, but he did not provide a timeline for reimbursement.

About GRAIL (NASDAQ:GRAL)

GRAIL, Inc NASDAQ: GRAL is a healthcare company focused on developing blood-based screening technologies for the early detection of cancer. Its principal product is Galleri, a multi-cancer early detection test designed to identify DNA patterns associated with multiple types of cancer from a single blood sample.

Galleri is intended for use alongside recommended cancer screenings and is available by prescription through qualified healthcare providers in the United States. The test is offered as a laboratory-developed test and has not been approved or cleared by the U.S.

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