Greetings and welcome to the Fulgent Genetics Q2 2025 Conference Call Webcast. At this time, all participants are in listener only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the following presentation, and you may be placed into questioning queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Lauren Sloane, Investor Relations. Please go ahead. Thank you, and good morning, and welcome to the Fulgent Second Quarter 2025 Financial Results Conference Call. On the call today are Ming Hsieh, Chief Executive Officer; Paul Kim, Chief Financial Officer; and Brandon Perthuis, Chief Commercial Officer. The company's press release discussing the financial results is available on the Investor Relations section of the company's website, ir.fulgentgenetics.com. A replay of this call will be available shortly after the call concludes on the Investor Relations section of the company's website. Management's prepared remarks and answers to your questions on today's call will contain forward-looking statements. These forward-looking statements represent management's estimates based on current views, expectations, and assumptions, which may prove to be incorrect. As a result, matters discussed in any forward-looking statements are subject to risks, uncertainties, and changes in circumstances that may cause actual results to differ from those described in the forward-looking statements. The company assumes no obligation to update any of the forward-looking statements it may make today to reflect actual results or changes in expectations. Listeners should not rely on any forward-looking statements as predictions or future events and should listen to management's remarks today with the understanding that actual events, including the company's actual future results, may be materially different than what is described in or implied by these forward-looking statements. Please review the more detailed discussion related to these forward-looking statements, including the discussion of some of the risk factors that may cause results to differ from those described in the forward-looking statements contained in the company's filings with the Securities and Exchange Commission, including the previously filed 10-K for the year ended December 31, 2024, and subsequently filed reports, which are available on the company's Investor Relations website. Management's prepared remarks, including discussions of profit, loss, margin, earnings, and earnings per share, contain financial measures not prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Management has presented these non-GAAP financial measures because it believes they may be useful to investors for various reasons, but these measures should not be viewed as a substitute for or superior to the company's financial results prepared in accordance with GAAP. Please see the company's press release discussing the financial results for second quarter 2025 for more information, including the description of how the company calculates non-GAAP income, loss, non-GAAP earnings, loss per share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating profit and loss, and margin and adjusted EBITDA, and a reconciliation of these financial measures to income or loss, earnings and loss per share, and operating margin, the most directly comparable GAAP financial measures. With that, I now turn the call over to Ming. Please go ahead. Thank you, Lauren. Good morning, and thank you for joining our call today. I will start with some comments on the second quarter of 2025 and our two business lines. Brandon will review our product and go-to-market updates for our laboratory services business. Paul will conclude with the financials and outlook before we take your questions. We are pleased with our second quarter results. We have shown both sequential and year-over-year growth in laboratory services. We are pleased with the momentum we're seeing as we move through 2025. Our therapeutic development pipeline is on track. Our first clinical candidate, FID-007, is progressing through a phase two clinical trial in combination with cetuximab in patients with recurrent or metastatic head and neck squamous cell carcinoma, with 32 patients enrolled and dosed. We expect to complete patient enrollment by the end of this year with data readout in 2026. We project the clinical trial for phase two to be approximately $30 million over a multi-year period. Our second clinical candidate, FID-022, began a phase one trial, and the first group of patients has been enrolled. FID-022 is a nanoencapsulated enzyme for treatment of solid tumors, including potentially colon, pancreatic, ovarian, and bile duct cancers. We continue to expect clinical trial cost of phase one trial of FID-022 to be approximately $8 million. I am encouraged by the continued progress with our clinical pipeline and the potential for growth of FID-007 and FID-022. These drug candidates address heavily pretreated patients with very few options left. I hope we'll be able to provide alternatives to further their lives. Our anticipated cost for these programs is very reasonable, and we believe our investment will be rewarded. Overall, I'm pleased with our progress in the first half of the year in both our business areas. We'll continue to be in a strong financial position to execute our strategy. I would like to thank our employees, partners, and stakeholders for your hard work and loyalty in a great quarter for our business. We look forward to further progress in the second half of 2025. I'm now turning it over to Brandon Perthuis, our Chief Commercial Officer, to talk more about the laboratory services business. Brandon? Thanks, Ming. We had a very successful quarter with all areas of our business performing well and delivering nearly $81.7 million in core revenue, which is up 16% year-over-year and 11% sequentially. On a sequential basis, precision diagnostics was up 7%, biopharma services was up 54%, and anatomic pathology was up 11%. During the second quarter, we launched a new whole genome sequencing service. While we have offered whole genome sequencing for some time, our latest version includes several new features that clinicians find important. For example, we have moved to a PCR-free NGS test, which provides more uniform coverage and reduces amplification bias from traditional PCR-based library preparation, leading to higher accuracy in variant calling. Our new whole genome includes exceptional resolution, detecting CNVs with greater than two exom resolution and genome-wide del/ dup, surpassing traditional exome sequencing. In addition, we are one of the only laboratories who integrates RNA sequencing into the interpretation. Integrated RNA analysis provides functional insights into genetic variants, enabling deeper characterization of pathogenicity. RNA is able to detect aberrant gene expression, monoallelic gene expression, and aberrant splicing of expressed target genes. Further building momentum for genomic sequencing, the American Academy of Pediatrics recently recommended exome and genome sequencing as first-tier tests for children with global developmental delay or intellectual disability. This is a significant milestone for genomic sequencing and for those patients and families who can benefit from it. This new practice guideline puts a powerful diagnostic tool in the hands of more than 60,000 pediatricians across the country. Another key development in our genomic testing was that we received certified CE Mark for FulgentE xome and Fulgent Pipeline Manager. To our knowledge, we may be the first laboratory to receive CE Mark for such a comprehensive end-to-end germline testing service. Fulgent Exome is a patient-centric, phenotype-driven analysis designed to examine coding regions and splice junctions for more than 4,600 genes and to report only the variants which are of plausible clinical relevance. It is a next-generation sequencing-based system designed for clinical exome analysis to identify germline variants to aid the clinical diagnosis of suspected genetic conditions relevant to the patient's clinical and family history. Fulgent PLM is an in vitro diagnostic software used with Fulgent Exome to analyze genetic information derived from sequencing data. Fulgent Exome is ideal for patients who have a complex or very rare combination of phenotypes that are not suggestive of any recognizable syndrome or for whom previous focus testing has been negative. The American College of Medical Genetics and Genomics recommends exome or genome as a first-line test for developmental delay, intellectual disability, and congenital anomalies. The National Society of Genetic Counselors recommends exome or genome as first-line tests for all individuals with unexplained epilepsy, and this guideline is endorsed by the American Epilepsy Society. With the CE Mark, we can now make Fulgent Exome available to clinics and hospital systems throughout Europe, helping families get answers to complex clinical phenotypes. We believe the CE Mark is an important step to growing our global business. An area we continue to make progress in is managed care. Since January, we have executed over 20 new agreements, adding over 35 million new covered lives to our in-network contracts. We believe with our extensive product portfolio, excellent turnaround time, and other features around bioinformatics and AI, we present as a valuable partner to payers. The focus for the managed care team going forward is to continue maintaining excellent relationships with our key payer partners and continue to expand our in-network coverage across the country. We believe we are firing on all cylinders and investing in the right areas to continue to expand our capabilities and commercial reach. We are excited to deliver a successful second quarter, as well as increase our annual revenue guidance for 2025. For the second half of the year, the focus will be on gaining additional market share in the three areas of our business, as well as continuing to expand the sales organization. I'd like to thank the Fulgent team for all of their hard work and dedication, and I'll now turn the call over to Paul Kim, our Chief Financial Officer. Paul? Thank you, Brandon. Revenue in the second quarter of 2025 totaled $81.8 million, compared to $73.5 million in the first quarter of 2025. The revenue from COVID-19 testing is negligible. Revenue from our core business totaled $81.7 million. Gross margin on a non-GAAP basis was 44.2%, and on a GAAP basis was 42.1%. Gross margins improved year- over- year and sequentially due to streamlined operations, enhanced efficiency, and the impact of certain one-time adjustments. Covering the operating expenses, non-GAAP operating expenses totaled $43.9 million, compared to $37.4 million in the first quarter of 2025. Total GAAP operating expense was $54.1 million in the second quarter, compared to $48.1 million in the first quarter of 2025. The rise in operating expenses reflected two key investments: the expected increase in R&D spending to support our clinical studies and higher sales and marketing costs driven by the expansion of our sales team and ramped up marketing initiatives. Non-GAAP operating margin increased slightly sequentially to a -9.4%. Our GAAP loss was $19 million for the quarter, including a one-time non-cash charge related to a $9.9 million impairment of a prior investment. Adjusted EBITDA loss for the second quarter was approximately $3 million, compared to a loss of $2.9 million in Q1 of 2025. On a non-GAAP basis and excluding equity-based compensation expense, intangible asset amortization, and impairment loss, income for the quarter was approximately $2.1 million, or a positive $0.07 per share on 30.7 million weighted average diluted shares outstanding. In the second quarter, we repurchased approximately 130,000 shares at an aggregate cost of $2.2 million pursuant to our stock repurchase program. Since the inception of the stock repurchase program in March 2022, a total of approximately $110.4 million has been spent, with approximately $139.6 million remaining available for future repurchases of our common stock. Turning to the balance sheet, we ended the second quarter with approximately $777.5 million in cash, cash equivalents, restricted cash, and marketable securities. Cash used in the period included $31.7 million for income tax credits purchased, as mentioned earlier, and $2.2 million for the stock repurchase. We guide to core revenue, which is laboratory services revenue for the company without COVID-19 testing revenue. To reflect current business performance, we're adjusting our revenue outlook for the remainder of the year, increasing revenue guidance from $310 million to $320 million for 2025, representing a growth of 14% year- over- year. We continue to expect non-GAAP gross margins for the full year to slightly exceed 40%, continuing the strong momentum we experienced in recent quarters. We expect non-GAAP operating margins to improve from a - 15% to -13% for the year, driven largely by increased revenue. We continue to invest in business growth, further develop laboratory operations, and enhance our existing laboratory facilities. We remain focused on managing our spending and continue to believe that our foundational technology platform supports a strong margin profile in the longer term. In July, we closed the acquisition of ANP Technologies for an enterprise value of approximately $4 million. ANP has already played a pivotal role in Fulgent Pharma's R&D progress through a longstanding licensing agreement that granted access to proprietary nanodrug delivery technology supporting our lead drug candidates, FID-007 and FID-022. With this acquisition, we now own the core intellectual property, enabling full control over the development, expansion, and future commercialization of these and related formulations, both in oncology and potentially beyond. However, even with this acquisition included, we continue to expect our associated cash burn for our therapeutics development business to remain at approximately $25 million this year, which is contemplated in our EPS and cash guidance. Using an average share count of 32 million, we now expect an improvement to our full-year 2025 non-GAAP EPS guidance from a loss of $0.65 per share to a loss of $0.35 per share, excluding stock-based compensation, impairments, and amortization of intangible assets, as well as any one-time charges. Reflecting the improvement in our operations, which has offset the effect of our one-time non-cash impairment adjustment, we're now revising our GAAP EPS guidance to a loss of $2.10 per share from $1.95 per share, excluding any future one-time charges, using a 32 million average share count. Finally, our cash position remains strong. We're focused on efficient capital allocation that allows us to invest in future business, fund key initiatives, and to support future growth. Excluding any future stock repurchases or other expenditures outside of the ordinary course, which could include M&A, we anticipate ending 2025 with approximately $770 million of cash, cash equivalents, restricted cash, and investments in marketable securities. Overall, we see strength in our core business, which has grown organically, and we see good momentum for the balance of 2025. Thank you for joining the call today, Operator. Now you may open it up for questions. Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Once again, that's star one to be placed into the question queue. Our first question is coming from Lu Li from UBS. Your line is now live. Great. Thank you for taking my question and congrats on the quarter. On the guidance, the $10 million increase for full year, how much is that from the Q2 bit versus the second half improvement? Specifically, I think there was a $7 million increase in Precision Diagnostics. I was wondering if that is coming out from the VA contract or the Foundation Medicine partnership. Thank you for the question. Brandon, do you want to talk about the strength in our laboratory services business and the reason why we're raising the outlook? Yeah, certainly I can do that. Thanks, Lu, for the question. In regard to the $7 million improvement in Precision Diagnostics, yes, the VA did play some role in that. You know, we've had a great working relationship thus far with the VA. We actually see that relationship expanding. We've done a lot of different tests for the VA. We've done great with turnaround time and quality implementation. There's actually some opportunity to expand that into some further areas of genetic testing. In terms of Foundation Medicine, very strong partnership. Really happy to be aligned with them to promote our products in parallel. The revenue for the quarter was not material, but we see that relationship strengthening. We see the go-to-market strategy improving. We think there could be some additional upside around that this year, but a little bit slower than we anticipated. It's a big partnership to get off the ground. In addition to those two, Lu, we saw strength across many different areas of our Precision Diagnostics portfolio. That's hereditary cancer, Beacon Expanded Carrier Screening, a little bit of KNOVA NIPT volume. Overall, the Precision Diagnostics business performed very well, very well in the quarter. Great. Then my second question on the AP, it seems like pretty strong in the quarter. I was wondering if there are anything like a one-time dynamic that we should think about given that your kind of like guidance suggests like the second half will be slower. I just want to make sure that I understand the dynamic within AP. Yeah. Brandon, you want to talk about the strength in our anatomic pathology? Yeah, absolutely. Lu, there's really no one-time event in the quarter. I think for a couple of quarters now, we've said we've been pretty happy with the turnaround we've made there. The lab has done an excellent job with quality and turnaround time and EMR integrations. I think the biggest thing we've done there is improve and expand that sales organization. The growth you're seeing in AP is purely organic growth. It's blocking and tackling. It's winning new deals. The AP team has excellent sales leadership and has an excellent team that is much bigger today than it was a year or two ago. It's pure execution from both the lab and the sales team. We're quite excited to see that AP business turn around and hit a really nice stride in terms of growth. Got it. Final questions for Paul. On the gross margins, 34%, it seems like there's some one-time adjustment there. I was wondering if you're estimating that, what will be the kind of organic gross margin for the quarter? That's an excellent question. We're really pleased with the bump that we saw in our gross margins. About half of the increase was due to a one-time accounting adjustment that we had in there. The other half is due to the overall strength in our business, combined with the continued efficiency that we see in the operations of our laboratory services business. Great. Thank you. Thank you, Lu. Thank you. Next question today, David Westenberg from Piper Sandler. Your line is now live. Hey, thanks for taking the question and congrats on the color there. Just a follow-up from Lu's question on anatomic pathology. I think you did say 11% growth, that it is a really good number. When you talked about the new sales force, were you able to enter new geographies, and if that's the case, is there any other new geographies that you have an opportunity to get into to keep growing that anatomic pathology business? Hey, David. It's Brandon. Thanks for the question. Yes, you nailed it. We did put new salespeople in new geographies. I think we've mentioned a few times that our managed care contracts are very strong and they're national managed care contracts. That gives us a ton of green grass to go out there and hunt in. The sales team historically has been subscale. There's been a lot of territories that were not covered. You know, there's AP opportunities, plentiful across the country. The focus has been hiring really good salespeople that can hit the ground running and putting them in territories where, you know, we either don't have reps or don't have growth consistent with other sales territories. Again, you know, it's not super flashy. It's blocking and tackling, hiring the right people, putting them in the right geographies, and then giving them a product and a service that they can successfully sell. It's turnaround time, quality, the quality of our subspecialty trained pathologists. I think we put all of that together. We have an AP business that is growing and will continue to grow throughout the rest of the year. Thanks. Brandon, you gave a lot of color on your rare disease offering. You mentioned the AAP guidelines. How are you going to go after that channel? Is this going to be, you know, I know you have experience at Baylor, for example. Is this going to be outpatient? Are you going to see this a little bit more in the NICU? Is it kind of all of the above? Can you talk about some of the synergies you might have with the existing, going after existing hospital systems or any kind of sales pull- through with, like, you know, reproductive health and, I guess it wouldn't be obstetricians, but pediatrics. Yeah, certainly. Look, I think the take-home message is the momentum in exome and genome. More and more societies are endorsing this test as a frontline test. We've seen the value of getting to a diagnosis earlier in these patient journeys, putting these types of tools in the hands of practitioners. Of course, that helps with insurance coverage and reimbursement as well. I think that's the major takeaway, you know, exomes and genomes are going to continue to grow as the utilization increases and families and patients are going to benefit from it. I think the move of AAP to endorse this for their pediatrics is great. How do you penetrate that market? It's a more fragmented market, right? When we talk about children's hospitals or academic medical centers, it's a more concentrated call point. Perhaps we might need a larger sales team if we really want to go after the pediatrics market. Certainly, the academic medical centers and children's hospitals are the main call point. I think what we've done in parallel with these improved recommendations from these societies is build a really, really good service in parallel. Our new whole genome, you know, with RNA is a great service. We're seeing a significant increase in diagnostic yield when we moved over to this new whole exome with RNA. We'll hopefully be presenting some of these data, but we're seeing improved detection rates of 10%, 15% over our previous version. We're helping a lot more families. We're encouraged to see the momentum in genomic sequencing, and we intend to continue to invest in our capabilities as well as our sales team to gain market share while this service grows. Perfect. This is one last, on FID-007. I think you said enrolling this year and then reading out next year. Is there anything that would hold up the enrollment for this year? As we think about the readout in 2026, what could impact the timelines there as well? Thank you. All right. David, thank you for the question. I think that we expect to accelerate the enrollment during the second half of 2025. Previously, we excluded the patients pretreated with paclitaxel. With the current enrollment and the data we've seen, the safety data we've seen from the first 32 patients, we felt that we could open up for the patients who were previously treated with paclitaxel to be also enrolled into our program. We are broadening the post. In another area, what we've seen is encouragement from the NCI guideline. The patients previously treated with the pembro, it becomes the use of the maintenance therapy becomes the first line. We're in a good position for the head and neck cancer patients who already progressed with the pembro treatment. They can get into our treatment options right away. We see all the positive signs in that area. Thank you so much. Thank you, David. Thank you. Next question is coming from Andrew Cooper from Raymond James. Your line is now live. Hey, everybody. Thanks for the time. Thanks for the questions. Maybe just first, I want to kind of dig in a little bit more on some of the comments around AP and the guide there. It looks like you are kind of pointing to a little bit lower dollar revenues in the back half on a quarterly basis. Is anything changing there? Is there anything informing that? Is it a little bit of seasonality, a little bit of conservatism? Just help us think about the trends after what was a really good quarter in AP, at least versus our outlook. Yeah, thanks. Again, I think we're really pleased to see that business return to growth. We do see some seasonality in the back half of the year, especially around sort of dermatological procedures. If you think about the last half of the year, there's a lot of elective surgeries and biopsies that may be pushed past the holiday season, for example. Who knows? With the progress we're making and some of the new wins, we might be able to outpace some of that seasonality. I think when we take a look at the pipeline and the opportunities, there's significant strength there. It does slow down a bit in the back half of the year. I think there's some potential upside if these pipelines come to fruition that could potentially outpace the seasonality. That's essentially what you're seeing is that slowdown into the late Q3 and Q4. Andrew, this is Paul. We don't really anticipate that much softness. First of all, we're very, very happy with the increase and the results in the second quarter in our AP business. I think if you take a look at the initiatives in marketing and the expansion of the sales organization, you see that investment in the operating expenses, the selling and marketing, that's gone from $8.5 million to $12.3 million. We think that investment, as Brandon mentioned, was very much needed, and we're going to get more aggressive in expanding that sales organization. We anticipate elevated numbers in Q3 and Q4. As Brandon mentioned, they can even be better than what we anticipated. We're optimistic about the AP business. At the same time, we want to be a little cautious to take that increase and then project that out into Q3 and Q4 until it materializes. Okay. Helpful. Maybe another kind of high-level question about the trends here. If we go back to some of the acquisitions, there was talk about rolling contracts through to the broader organization and some of the advantages there. You talked about the managed care wins that you've had since the start of this year. How has that played out in terms of kind of apples- to- apples ASP versus giving you the opportunity to win incremental volume? Just would love how those dynamics have driven the numbers and informed the increased guide here, whether more price, more volume, and kind of how it's performed versus expectations. Thanks for the question. I think overall, you know, a strong managed care division and strong contracts helps with your go-to-market strategy. Clinicians nowadays do not like using out-of-network laboratories. We've seen out-of-network cost share increase over the years significantly when we look at out-of-network deductibles, co-pays, and co-insurance. The more patients we can have under our in-network umbrella, the better our go-to-market strategy is. I think we're incredibly strong in that area. We've added significant coverage this year. I know we haven't updated you much in the past, but we have made a lot of progress. We thought it was a good time for that update. Our intention is to continue to get these contracts, continue to expand our in-network coverage because that is an important part of the sales cycle, the go-to-market strategy. Clinicians want labs to be in-network so patients can take advantage of their in-network co-pay, co-insurance, and deductible. In addition to the go-to-market strategy, as Brandon mentioned, a strong RCM and reimbursement team, with the additional volume, we experience efficiency and better realization, which I think that you're continuing to see in the performance of our gross margins. Okay. Great. I'll leave it there. Thanks, everybody. Thank you, Andrew. Thank you. We appreciate our question and answer session. Ladies and gentlemen, that does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.