Caris Life Sciences Q4 Earnings Call Highlights

by · The Cerbat Gem

Caris Life Sciences (NASDAQ:CAI) reported a record fourth quarter in its first full year as a public company, driven by strong growth in its molecular profiling business and improved profitability. Management also outlined plans to reinvest in commercial expansion and product development in 2026, while maintaining positive adjusted EBITDA and free cash flow.

Fourth-quarter results driven by clinical profiling and higher ASPs

Vice Chairman and EVP Brian Brille said Caris delivered “another record-breaking quarter,” with total revenue up 125% year-over-year to $293 million. The performance was led by clinical profiling: molecular profiling services revenue increased 199% to $282 million in Q4, while pharma R&D services revenue totaled $10.8 million.

Brille attributed the quarterly revenue growth to 20% volume growth and a 150% increase in clinical average selling price (ASP). Caris posted GAAP gross margin of 75%, improving from 54% in Q4 2024 and 68% in Q3 2025. The company generated GAAP net income of $82 million, adjusted EBITDA of $106 million, and free cash flow of $39.7 million, marking its third consecutive quarter of positive adjusted EBITDA and free cash flow.

For the full year, CFO Luke Power said Caris delivered 97% total revenue growth and finished 2025 with adjusted EBITDA of $138 million and free cash flow of $67 million. He noted that final Q4 and full-year revenue came in about $12 million higher than preliminary January numbers due to stronger-than-expected payer collections, which led Caris to adjust accrued ASP rates in Q4.

Molecular profiling growth, payer momentum, and commercial expansion plans

Chief Commercial Officer Bobby Hill said full-year molecular profiling revenue rose 120% to $766.7 million, driven by 22% year-over-year clinical volume growth to approximately 199,300 profiles and a 79% increase in ASP. Hill highlighted the impact of the myCancerSeq launch on January 1, 2025, with tissue ASP increasing 83% to over $4,000 and blood ASP increasing 69% to just under $2,800.

Power later said that, incorporating payer collections, Caris reached ASPs for 2025 cases of $3,876 per tissue and just above $2,500 for blood. He also said only $33.6 million of the additional revenue recognized in 2025 related to 2024 and prior-year cases, with most tied to 2025 activity.

Management emphasized continued commercial investment in 2026, including expanding the sales force. On the Q&A, Power said the company had discussed being at about 250 salespeople and aiming to increase headcount by 20% to 25%, to about 300. He said Caris incorporated the expense of those hires, but did not build additional volume upside from the expansion into its 2026 volume guidance.

Hill also highlighted operational scale, noting Caris is “consistently reaching over 6,000 oncologists” and has EHR integrations with about 3,100 clinical sites, with approximately 75% of orders coming in electronically.

Early detection: ACHIEVE-1 interim results and planned Caris Detect launch

President David Spetzler reviewed interim results from ACHIEVE-1, the study supporting an expected Q2 2026 launch of Caris Detect, described on the call as a whole genome sequencing-based multi-cancer early detection (MCED) blood test. Spetzler said Caris is using ultra-deep whole genome sequencing to capture a broad range of cancer-related signals, including driver mutations, epigenomic changes, transcriptomic changes, and aneuploidy, rather than relying primarily on epigenomics.

Spetzler said the interim readout included 2,122 total samples, including 617 cancers across stages 1 through 4 and 1,505 individuals with no known cancer at the time of the blood draw. He emphasized that the control cohort was higher risk than the general population, noting that 7% of patients in the total cohort had a subsequent cancer diagnosis.

Caris reported sensitivity by stage in the interim analysis:

  • 56.8% in stage 1 (n=266)
  • 70.1% in stage 2 (n=137)
  • 77% in stage 3 (n=105)
  • 99.1% in stage 4 (n=109)

For stages 1 and 2 combined, Spetzler said sensitivity was 63.1%. He also cited selected stage 1 and 2 sensitivity examples by cancer type, including 53% for breast (n=253) and 86.7% for lung (n=15), among others.

On specificity, Spetzler reported 99.1% specificity in an “asymptomatic screening” group (n=121) with longitudinal follow-up showing no subsequent diagnosis within two years, and 95.3% specificity in a broader higher-risk normal population (n=1,505), including 600 subjects with at least two years of follow-up. He said overall model performance measured by AUC was 0.90.

Spetzler said a blinded holdout validation cohort of approximately 865 samples is being tested, with results expected in Q1. He later added that Caris plans to launch after the final readout of ACHIEVE-1, calling it the “final accuracy study” enabling launch.

Pipeline updates: hematology, breast risk, and MRD efforts

Beyond early detection, Spetzler outlined several pipeline programs:

  • Caris ChromoSeq, a whole genome plus whole transcriptome therapy selection assay for hematologic malignancies, with Caris having responded to MolDX comments and planning to launch once coverage and pricing are determined.
  • Caris MyClarity, focused on ER-positive, HER2-negative breast cancer recurrence risk scoring, with two planned versions (NGS plus digital AI, and digital AI only). Spetzler said the digital-only path is expected to be faster and may launch first, and that both versions “offer superior performance” versus currently available offerings.
  • Caris MRD Tumor Naive, initially for colorectal cancer, with MolDX requesting additional data that Caris is compiling.
  • Caris MRD Tumor-Informed, a whole genome approach intended for pan-tumor MRD applications, with development and launch planning initiated.

Spetzler also said Caris launched five new AI signatures on its molecular tumor board report available through myCancerSeq in breast, pancreatic, brain, lung, and ovarian cancer.

2026 outlook: revenue growth, continued profitability, and higher CapEx

Power introduced 2026 guidance based on existing solutions only, saying Caris will add pipeline products to guidance after they begin generating revenue. For 2026, the company expects total revenue of $1.0 billion to $1.02 billion, representing approximately 23% to 26% growth versus 2025. Therapy selection volume is expected to grow about 20% year-over-year, and molecular profiling revenue is expected to increase about 21% to 22% (or 26% to 28% excluding prior-year true-ups).

On ASPs, Power said Caris is tracking to reach about $4,000 per tissue case in Q1 and guided to approximately $4,200 for full-year 2026. For blood, he guided to $2,400 to $2,500, citing mix considerations between Medicare and commercial reimbursement. He also said Caris expects $75 million to $85 million in pharma and research revenue in 2026, including contribution from the previously announced Genentech deal and companion diagnostic collaborations, with revenue weighted more heavily to Q2 and Q4.

Caris guided to GAAP operating expenses of $590 million to $595 million, up about 19% to 20%, driven by commercial expansion and pipeline trial activity (including ACHIEVE-2). Power said Caris expects to remain positive on adjusted EBITDA and free cash flow while funding these investments, but declined to provide a more specific profitability target.

Capital spending is expected to rise as the company prepares for early detection, with CapEx guided to about $60 million in 2026 versus approximately $16 million in 2025. Power said spending will be staged and milestone-driven, including additional NovaSeq X capacity tied to both an updated Assure assay and early detection sequencing.

About Caris Life Sciences (NASDAQ:CAI)

Caris Life Sciences (NASDAQ: CAI) is a molecular science company focused on advancing precision medicine in oncology. The company develops and delivers comprehensive molecular profiling services designed to identify actionable biomarkers across DNA, RNA and protein modalities. Its clinical services are intended to support oncologists in treatment decision-making by matching patients to targeted therapies, immunotherapies and relevant clinical trials based on tumor biology.

Caris provides laboratory-based diagnostic testing and related interpretive reports, combining high-throughput sequencing and other molecular technologies with bioinformatic analysis.

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