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DATE
Feb. 26, 2026 at 4:30 p.m. ET
CALL PARTICIPANTS
- President and Chief Executive Officer — Derek J. Maetzold
- Chief Financial Officer — Frank Stokes
TAKEAWAYS
- Total revenue — $87 million for the quarter and $344.2 million for the year, with guidance for the next year at $340 million to $350 million.
- Test report volume — 105,053 reports from core drivers for the year, up 37%, with TissueCypher volumes increasing 86% to 39,014.
- DecisionDx-Melanoma volume — 39,083 test reports with 9% growth and 1,795 first-time ordering clinicians added during the year.
- Patient penetration — DecisionDx-Melanoma reached 31% and TissueCypher 11% penetration by year-end.
- Adjusted gross margin — 77.6% for the quarter and 79.8% for the year, compared to 81.2% in the prior year periods.
- Net results — Net loss of $2.3 million for the quarter and $24.2 million for the year, versus net income of $9.6 million and $18.2 million in the previous year, respectively.
- Free cash flow — Generated $28.3 million for the year; capital expenditures were $36 million.
- Cash position — $299.5 million in cash, cash equivalents, and marketable securities as of year-end.
- Advanced ADTX test launch — Limited release initiated in late November, over 500 orders in the initial five weeks across more than half of 150 targeted dermatology accounts.
- M&A and pipeline initiatives — Acquisition of ProVise, collaboration with Cybase for EIS technology, and plans for new GI disease tests and FDA device submissions in the coming year.
- Guideline recognition — The American Gastroenterological Association highlighted TissueCypher as the first prognostic test for Barrett’s esophagus risk; DecisionDx-Melanoma’s published clinical data were only partially cited by NCCN in new guidelines.
- Sales and marketing expenses — $138.1 million for the year, increased by personnel and activity spend, with salesforces in both dermatology and GI remaining below 100 representatives each.
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RISKS
- Gross margin decline — Gross margin decreased to 69.2% for the year from 78.5%, impacted by “loss of revenue from DecisionDx-SCC and the one-time adjustment of an acceleration of amortization of approximately $20.1 million.”
- Return to net loss — Net loss of $24.2 million for the year after net income of $18.2 million the prior year; diluted loss per share was $0.83 compared to earnings per share of $0.62 previously.
- No revenue from DecisionDx-SCC — No revenue included for DecisionDx-SCC in guidance and no timeline certainty for its reimbursement or commercial contribution.
- Advanced ADTX ramp — Revenue from the advanced ADTX test expected to be immaterial in the coming year, with larger impact not expected until at least 2027 or 2028.
SUMMARY
Castle Biosciences (CSTL +3.44%) delivered substantial year-over-year core test volume growth, particularly in TissueCypher, while posting a net loss for the year as gross margins contracted and several headwinds emerged. The company launched its advanced ADTX test for atopic dermatitis in late November with strong initial clinician engagement but disclosed that revenues from this new product will be insignificant in the near term. Management outlined a multi-phase strategy that includes an expanded commercial footprint, the integration of the ProVise acquisition and Cybase collaboration, and plans for an FDA submission to support commercial reimbursement opportunities for DecisionDx-Melanoma. Guidance for next year anticipates steady revenue growth concentrated in core franchises, with M&A expected to remain a tool for portfolio expansion. Castle Biosciences maintains a significant cash reserve and disciplined capital allocation to support ongoing product and pipeline development activities.
- Frank Stokes emphasized, “Our revenue guide reflects continued growth in our core dermatologic and gastrointestinal franchises, driven primarily by continued TissueCypher momentum, immaterial revenue expected from our advanced ADTX test, and no revenue included for DecisionDx-SCC.”
- Derek J. Maetzold said, “Our compelling body of evidence for DecisionDx-Melanoma also continues to expand, with now 58 peer-reviewed publications supporting the clinical use of the test, which is not only a key driver for test adoption.”
- TissueCypher’s peer-recognized value as the first prognostic test for Barrett’s esophagus progression risk supports ongoing ordering momentum and reinforces its strategic position in the GI portfolio.
- Annual operating expenses rose by $63.6 million to $387 million, with increased headcount and commercial investments, offset only partly by reductions in stock-based compensation and lower clinical studies cost in R&D.
INDUSTRY GLOSSARY
- DecisionDx-Melanoma: A multi-gene expression test predicting metastasis risk and guiding sentinel lymph node biopsy decisions in melanoma patients.
- TissueCypher: A molecular test to assess progression risk in Barrett’s esophagus, informing interventions to prevent esophageal cancer.
- Advanced ADTX: A gene expression-based diagnostic launched for guiding systemic treatment in moderate to severe atopic dermatitis patients aged twelve and older.
- EIS (Electrical Impedance Spectroscopy): Technology under evaluation in collaboration with Cybase, used for predicting atopic dermatitis flares via a handheld device.
- LCD (Local Coverage Determination): A regional reimbursement policy from Medicare Administrative Contractors impacting test coverage and commercial availability.
- Merlin-001 Study: Referenced clinical study evaluating tests used for sentinel lymph node biopsy decision-making in melanoma.
- SEER Database: The National Cancer Institute’s Surveillance, Epidemiology, and End Results database used to compare outcomes for patients tested with DecisionDx-Melanoma.
- ASP (Average Selling Price): The average reimbursement or price received per test, referenced as a key driver for commercial expansion decisions.
Conference Call Transcript
Derek J. Maetzold, and Chief Financial Officer, Frank Stokes. Information recorded on this call speaks only as of today, 02/26/2026. Therefore, if you are listening to the replay or reading the transcript of this call, any time-sensitive information may no longer be accurate. A recording of today’s call will be available on the Investor Relations page of the company’s website for approximately three weeks following the conclusion of the call.
Before we begin, I would like to remind you that some of the statements made today will contain forward-looking statements, including statements about expected addressable markets, statements containing projections regarding future events, or our future financial or operational results and performance, including our anticipated 2026 total revenue and the impact of our investments and growth initiatives, including our ability to achieve long-term growth and drive stockholder value. Forward-looking statements are based upon current expectations and involve inherent risks and uncertainties, and there can be no assurances that the results contemplated in these statements will be realized. A number of factors and risks could cause actual results to differ materially from those contained in these forward-looking statements.
Please refer to the risk factors in our most recent SEC filings for more information. These forward-looking statements speak only as of today, and we assume no obligation to update or revise these forward-looking statements as circumstances change. In addition, some of the information discussed today includes non-GAAP financial measures, such as adjusted revenue, adjusted gross margin, and adjusted EBITDA, that have not been calculated in accordance with U.S. GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of our earnings release issued earlier today, which has been posted on the Investor Relations page of the company’s website.
I will now turn the call over to Derek.
Derek J. Maetzold: Thank you, Camilla. Good afternoon, everyone. We closed out a strong fourth quarter and delivered an outstanding year in 2025, driven by continued momentum across our core revenue drivers, disciplined execution, and the dedication of our employees. I am intentional in mentioning the dedication of our employees. It is through their efforts that we are able to deliver clinically actionable results with our current commercial tests today and tomorrow with the addition of future tests. With fourth quarter revenue of $87,000,000, we delivered revenue of $344,200,000 for the full year of 2025. Excluding DecisionDx-SCC and ID Genetics revenue from both 2025 and 2024, our revenue growth for the year would have been approximately 34%.
For the full year, we also delivered total test report volume of 105,053 test reports from our core revenue drivers, increasing 37% compared to 2024, highlighted by continued momentum in TissueCypher report volume, which achieved 86% growth over 2024. As I reflect on our many accomplishments across our growth initiatives, we have succeeded in evolving Castle considerably. Over the course of 2025, we completed the acquisition of ProVise, entered into a collaboration and license agreement with Cybase, launched our first-in-class advanced ADTX test, further strengthened our commercial teams, and continued to solidify an already strong balance sheet. At the same time, DecisionDx-Melanoma reached a significant milestone, surpassing 230,000 test orders since launch.
We continue to build a robust body of clinical evidence across our entire portfolio, and we continue with our unwavering commitment to improving patient care. Everything we do at Castle remains focused on innovative, clinically actionable tests that help clinicians make better-informed decisions to improve outcomes for their patients. We can only accomplish this mission because of the people who call Castle home. I sincerely thank our entire team for their hard work, resilience, and commitment throughout the year. None of this progress would be possible without them.
As we review 2025 results, I will also outline how we are thinking about our growth story, starting with the drivers of our near-term performance in 2026, then turning to our midterm opportunities, and finally discussing the longer-term pipeline that we believe positions Castle well for sustained growth and value creation. Frank will then provide additional 2025 financial highlights and insight for 2026 before we turn to your questions. Let us start with our core revenue drivers and what we see as the bulk of our 2026 top-line growth story: DecisionDx-Melanoma and TissueCypher. In 2025, for DecisionDx-Melanoma, we delivered 39,083 test reports, representing 9% year-over-year growth, achieving our high single-digit volume growth commitment.
Importantly, we continue to see new clinicians ordering DecisionDx-Melanoma for the first time. Specifically, in 2025, we had 1,795 clinicians order DecisionDx-Melanoma for the very first time. This was consistent with our experience in both 2024 and 2023 and reflected continued strong interest and adoption. Additionally, total ordering clinicians over the lifetime of this test is nearing 17,000. Our compelling body of evidence for DecisionDx-Melanoma also continues to expand, with now 58 peer-reviewed publications supporting the clinical use of the test, which is not only a key driver for test adoption, but also meaningfully differentiates our test from the competition. We saw approximately 31% patient penetration exiting 2025, and we believe DecisionDx-Melanoma remains a durable growth driver in 2026.
Turning to our gastroenterology franchise, TissueCypher delivered 39,014 test reports in 2025 compared to 20,956 test reports in 2024, representing 86% growth and surpassing 80,000 tests ordered to date. We believe this adoption reflects growing clinical recognition of TissueCypher’s value in determining a patient’s individual risk of progression from Barrett’s esophagus to high-grade dysplasia or esophageal cancer. Barrett’s esophagus is the only known risk factor for development of esophageal adenocarcinoma, one of the fastest growing cancers in the U.S. Unfortunately, esophageal adenocarcinoma is also one of the most aggressive and difficult cancers to treat, with a five-year survival rate of less than 20%.
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