Castle Biosciences (CSTL) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $83.7 million, with core test volumes up 36% year-over-year, driven by strong growth in DecisionDx-Melanoma and TissueCypher, despite a decline in dermatologic test revenues due to Medicare coverage loss for DecisionDx-SCC.

• Full-year 2026 revenue guidance was raised to $345–$355 million, reflecting strong business momentum and increased confidence in top-line growth.

• DecisionDx-Melanoma and TissueCypher tests delivered double-digit year-over-year volume growth, with record months in March 2026.

• AdvanceAD-Tx test saw 650 orders in Q1, with positive clinician feedback and ongoing limited access rollout.

• New clinical data validated DecisionDx-Melanoma's utility in risk stratification and biopsy decision-making, aligning with NCCN guidelines.

Financial highlights

• Q1 2026 revenue was $83.7 million, down from $88.0 million in Q1 2025 due to changes in Medicare coverage and discontinued products.

• Gross margin improved to 72.8% from 49.2% in Q1 2025; adjusted gross margin was 75.6%–76% vs. 81.2% prior year.

• Net loss narrowed to $14.5 million from $25.8 million year-over-year; diluted loss per share improved to $0.49 from $0.90.

• Adjusted EBITDA was negative $5.1 million, compared to $13 million in Q1 2025, reflecting prior year one-time amortization.

• Cash, cash equivalents, and marketable securities totaled $261.7 million as of March 31, 2026.

Outlook and guidance

• 2026 revenue guidance raised to $345–$355 million, reflecting high teens to low 20% growth over 2025, excluding certain products.

• Management expects continued investment in R&D and commercialization, with expenses projected to rise as new products are developed and launched.

• Ongoing efforts to regain Medicare coverage for DecisionDx-SCC could impact future revenues.

• AdvanceAD-Tx reimbursement clarity expected by end of Q3 2026; revenue to become material in 2027–2028.

• Existing liquidity and anticipated cash from operations expected to fund operations for at least the next 12 months.