Diagnostic company Exact Sciences Corporation (NASDAQ: EXAS) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 20% year on year to $850.7 million. The company’s full-year revenue guidance of $3.23 billion at the midpoint came in 2.2% above analysts’ estimates. Its non-GAAP profit of $0.24 per share was 49.4% above analysts’ consensus estimates.

Is now the time to buy EXAS? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Exact Sciences’ third quarter results received a positive response from the market, reflecting strong revenue growth and robust execution in its core screening business. Management attributed the performance to increased adoption of Cologuard, expansion of care gap programs with payers, and a record number of new ordering providers. CEO Kevin Conroy highlighted the company's ability to screen an additional 250,000 people compared to last year, citing “accelerating health systems integrations and a record number of ordering providers.” The introduction of Cologuard Plus and deepening relationships with health systems were also key contributors.

Looking ahead, Exact Sciences’ updated guidance is underpinned by expectations for continued commercial effectiveness, expanded access to Cologuard Plus, and the ramp-up of new products such as Cancerguard and Oncodetect. Management emphasized ongoing investments in direct-to-consumer marketing and technology integration to drive adoption of new tests. CFO Aaron Bloomer stated, “Momentum is building across the company. Operating leverage is expanding and cash generation continues to strengthen,” as the company focuses on executing its long-term growth plan and pipeline development.

Key Insights from Management’s Remarks

Management credited the quarter’s outperformance to a blend of commercial improvements, new product launches, and expanding payer partnerships across its screening and precision oncology segments.

• Cologuard Plus expansion: The launch and positive payer coverage of Cologuard Plus, which offers higher sensitivity and specificity than the original test, drove adoption among major insurance providers and represented a step toward sunsetting the legacy Cologuard product.
• Care gap program acceleration: Exact Sciences’ care gap initiatives—partnering with payers to reach patients overdue for screening—resulted in record shipments and contributed significantly to screening volume. While these programs have slightly lower gross margins, management believes they are highly accretive to growth and patient outcomes.
• Customer-initiated orders (CIO): The ExactNexus platform enabled a substantial increase in CIOs, allowing patients to request tests online through telehealth, reducing friction in access and driving triple-digit growth in this segment.
• Cancerguard launch: The introduction of Cancerguard, a multi-cancer early detection blood test, marked a strategic move into broader cancer screening. Early adoption is supported by direct-to-consumer marketing and provider education, though management does not expect it to materially impact revenue until future periods.
• Precision Oncology momentum: Continued international and domestic expansion of Oncotype DX and the initial ramp of Oncodetect contributed to double-digit growth in the precision oncology segment, supported by updated screening guidelines and expanding clinical evidence.

Drivers of Future Performance

Management expects continued revenue momentum driven by expanded payer coverage, launch execution for new products, and productivity gains across commercial operations.

• Full transition to Cologuard Plus: The company plans to complete the transition from Cologuard to Cologuard Plus, aiming for broader adoption and improved clinical outcomes as additional payer contracts are secured and legacy test sunsetting is implemented.
• Scaling new test launches: Ongoing investment in Cancerguard marketing and provider training is expected to gradually increase its contribution, while Oncodetect’s clinical validation and reimbursement progress could open sizable markets, though management notes these products will only become material contributors over time.
• Operational efficiency and cash flow: The $150 million cost savings program, ongoing productivity initiatives, and ExactNexus platform integration are expected to improve adjusted EBITDA margins and free cash flow, supporting long-term financial targets despite R&D and marketing investments.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will watch (1) progress in finalizing contracts with the remaining top payers for Cologuard Plus and the pace of sunsetting the original Cologuard, (2) evidence of early adoption and revenue ramp from Cancerguard and Oncodetect, and (3) execution against the company’s cost savings and margin improvement targets. Data readouts from clinical studies in the pipeline and international expansion efforts will also be important markers.

Exact Sciences currently trades at $71.56, up from $67.01 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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