Castle Biosciences (CSTL) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $103.5 million, up 20% year-over-year, driven by strong growth in core test volumes, especially TissueCypher, while DecisionDx-Melanoma also grew and DecisionDx-SCC volumes declined due to Medicare coverage loss.

• Full-year 2026 revenue guidance was raised to $365–$375 million from $345–$355 million, reflecting continued momentum and strong performance.

• Positive adjusted EBITDA is expected for Q3, Q4, and full year 2026, supported by robust cash reserves and ongoing investments in commercial resources, evidence generation, and pipeline expansion.

• AdvanceAD-Tx received NYSDOH approval, won a Genomics Innovation Award, and was validated for atopic dermatitis, expanding access and clinical impact.

• Independent studies and regulatory milestones, including FDA Breakthrough Device Designation and multicenter validation for DecisionDx-Melanoma, highlighted clinical innovation.

Financial highlights

• Q2 2026 revenue: $103.5 million (+20% YoY); gross margin: 74.9–75%; adjusted gross margin: 76.3%; adjusted EBITDA: $12.4 million.

• Net loss for Q2 2026 was $2.1 million (diluted loss per share: $0.07), compared to net income of $4.5 million in Q2 2025, due to higher operating expenses and lower dermatologic test revenues.

• Operating expenses rose to $106.6 million, with increases in sales, marketing, G&A, and R&D.

• Net cash provided by operating activities was $15.2 million for Q2; cash, equivalents, and marketable securities totaled $266.8 million at quarter end.

• Total test volume for Q2 2026 was 30,822.

Outlook and guidance

• 2026 revenue guidance raised to $365–$375 million, reflecting strong Q2 and expected continued growth.

• Adjusted gross margin for 2026 expected in the low to mid-70s percent range.

• Positive adjusted EBITDA anticipated for Q3, Q4, and full year 2026, as well as for 2027 barring strategic changes.

• TissueCypher test volume expected to grow 50–52% for 2026; DecisionDx-Melanoma on track for mid to high single-digit volume growth.

• Existing liquidity is expected to fund operations for at least the next 12 months.