Fulgent Genetics (NASDAQ:FLGT) used its fourth-quarter and full-year 2025 earnings call to outline continued growth in its laboratory services business, accelerating investments in digital pathology and AI, and progress across its therapeutic development pipeline. Management also addressed a near-term transition in 2026 tied to its largest customer bringing significant testing volume in-house and discussed the planned acquisition of Bako Diagnostics and StrataDx.
Fourth-quarter and full-year 2025 results
Chief Commercial Officer Brandon Perthuis said fourth-quarter revenue was $83.3 million, up 9% year over year but slightly down sequentially. Full-year 2025 revenue totaled $322.7 million, an increase of about 14% from 2024.
For the full year, Perthuis reported precision diagnostics revenue of $190.5 million (up 14%), AP revenue of $106.4 million (up 10%), and biopharma services revenue of $25.8 million (up 58%).
Chief Financial Officer Paul Kim said 2025 revenue came in slightly below the company’s updated guidance from the prior quarter but above the original guidance issued at the start of 2025. On profitability, Kim reported non-GAAP gross margin of 41% in the fourth quarter (GAAP gross margin 39.1%). He said full-year gross margins improved year over year due to streamlined operations and efficiencies from scaling and centralizing lab operations.
Expenses, profitability, and cash position
Kim said total GAAP operating expenses were $68.8 million in the fourth quarter, up from $50.9 million in the prior quarter, driven in part by acquisition-related costs, payroll-related expenses, and a one-time professional liability expense. Non-GAAP operating expenses were $43.1 million, compared with $40.7 million in the previous quarter. Non-GAAP operating margin was -10.7%.
Fulgent posted a GAAP net loss of $23.4 million in the quarter, compared with a GAAP loss of $6.6 million in the prior quarter. Adjusted EBITDA was a loss of approximately $4.5 million, compared with a gain of $0.7 million in the third quarter.
On a non-GAAP basis and excluding equity-based compensation, intangible amortization, acquisition-related costs, and the one-time professional liability expense, Kim said income for the quarter was approximately $5.2 million, or $0.16 per share (based on 31.7 million weighted average diluted shares). For full-year 2025 on the same non-GAAP basis, he reported income of approximately $13.2 million, or $0.42 per share, which he said beat the company’s updated guidance.
Fulgent ended 2025 with approximately $705.5 million in cash equivalents, restricted cash, and marketable securities. Kim attributed the quarter-over-quarter decline in cash primarily to the purchase of income tax credits and capital expenditures. He also noted the company had not yet received a $106 million federal income tax refund, which he said was delayed due to a government shutdown in the fourth quarter of 2025.
AI and digital pathology initiatives
CEO Ming Hsieh emphasized that investments in digital pathology and AI are improving quality, turnaround time, and throughput. He highlighted the launch of the company’s proprietary imaging management system, Eziopath, which integrates in-house AI tools.
Perthuis said the company is now approximately 100% digital across all cases and is transitioning off a prior third-party platform. He listed internally developed AI modules already launched, including tissue region detection, eosinophil counting, eosinophilic esophagitis, and lymphocyte ratio in duodenal intraepithelial lymphocytosis. Eziopath also supports third-party modules such as Paige Prostate and Mindpeak for HER2 in breast cancer. He added that the 2026 AI R&D pipeline includes “a dozen” planned modules.
On oncology diagnostics, Perthuis described work to develop AI modules that analyze data across multiple modalities—citing services including flow cytometry, IHC, FISH, cytogenetics, and NGS—to provide summary diagnostic information for pathologists to review before final reporting.
Acquisition plans and commercial updates
During the quarter, the company announced plans to acquire Bako Diagnostics and StrataDx, pending regulatory approvals, for a total purchase price of $55.5 million. Perthuis said the acquisition would add new AP services, proprietary PCR tests, and a national client base, with an expected close in March. Kim later referenced an assumed purchase price of approximately $56 million in cash planning.
Perthuis said the deal would add “somewhere between 20 and 30” sales representatives and create cross-selling opportunities between the combined sales teams. He also said Bako is “not highly digital yet,” but characterized Fulgent’s digital pathology approach as portable and said the company plans to help bring acquired operations up to speed.
Separately, Perthuis said Fulgent received New York State approval for its proprietary NIPT offering, Nova, and for its whole genome sequencing test, opening the New York market for commercialization in rare disease and reproductive testing.
2026 outlook: customer transition, acquisition contribution, and margins
Management repeatedly flagged that the first half of 2026 will be a transition period as the company’s largest customer moves significant testing volume in-house. Kim said that customer contributed $70.8 million in 2025, representing 22% of revenue, and that the company’s 2026 plan assumes approximately $11.8 million from the customer—an implied reduction of about $59 million.
Kim said the decline is expected to be partially or fully offset by the anticipated contribution of approximately $50 million to $55 million of revenue from Bako and StrataDx in 2026, assuming the transaction closes in March and the acquired businesses perform as expected. With that backdrop, the company forecast 2026 total revenue of approximately $350 million, representing 8.5% year-over-year growth.
- Anatomic pathology revenue is expected to rise to an aggregate of $162 million in 2026 (up 53% from 2025), largely driven by the Bako acquisition.
- Biopharma services revenue is expected to decline to $20 million from $25.8 million, which Kim attributed to the longer sales cycle in that area.
- Assuming timely close and expected performance of the acquisitions, Kim said the company expects no single customer to account for more than 10% of total revenue in 2026.
On profitability, Kim guided to non-GAAP gross margin “slightly above 40%” for 2026, while noting gross margin pressure in the first half of the year due to fixed costs being allocated over a smaller revenue base. In Q&A, he added that non-GAAP gross margin is expected to decline about 4 points in the first quarter and about 2 points in the second quarter, then rebound in the second half, with gross margin forecast to be above 41% in the third quarter and higher in the fourth quarter. He guided to non-GAAP operating margin of -8% to -18% for the year, citing incremental expenses from the acquisitions, sales team expansion, and continued R&D investment.
Kim also provided non-GAAP EPS guidance for 2026 of a loss of $1.45 per share (using an average share count of 32 million), excluding items such as stock-based compensation and acquisition-related costs. He said the company anticipates ending 2026 with approximately $685 million in cash equivalents, restricted cash, and marketable securities, assuming receipt of the delayed $106 million tax refund, and factoring in planned cash uses including the acquisitions, capital purchases, therapeutic development spend, and the one-time professional liability expense.
Therapeutic development updates
Hsieh said the company accelerated progress in its therapeutic development pipeline in 2025. He reported that FID-007 has advanced through phase II, with 46 patients enrolled, and that enrollment closed on December 29, 2025. He said the company is encouraged by early efficacy and safety data and described meaningful anticancer efficacy and a favorable tolerability profile for FID-007 combined with cetuximab in second-line recurrent/metastatic head and neck squamous cell carcinoma.
Hsieh said phase III protocol development is ongoing, with trial initiation planned as early as the first half of 2027. He added that Fulgent plans to submit a request to the FDA in the second quarter of 2026, hopes to have a phase II meeting with the FDA in the third quarter of 2026, anticipates presenting interim findings at ASCO in June 2026, and expects a full data readout by the second half of 2027.
For FID-022, Hsieh said the phase 1 dose escalation is underway, with the first dose level completed at the end of December 2025 and the second dose level completed on January 28, 2026. The third dose level began on February 2, 2026. He said the company expects to finish the study and determine the maximum tolerable dose later in 2026, describing FID-022 as a nano-encapsulated SN-38 for solid tumors including potentially colon, pancreatic, ovarian, and bile duct cancers.
About Fulgent Genetics (NASDAQ:FLGT)
Fulgent Genetics, Inc (NASDAQ: FLGT) is a California-based company specializing in high-complexity genetic testing and diagnostic services. Operating from its headquarters in Temple City, Fulgent leverages next-generation sequencing (NGS) technologies and advanced bioinformatics to deliver a broad range of clinical and research assays. The company’s infrastructure includes CAP- and CLIA-certified laboratories, enabling it to process large volumes of samples with rapid turnaround times.
Fulgent’s product portfolio encompasses hereditary cancer panels, rare disease and neuromuscular disorder testing, pharmacogenomic screenings, non-invasive prenatal tests, and infectious disease assays including COVID-19 diagnostics.
